issue-1995-12-08•Federal Register proposed rules — 1995-12-08
Federal Register proposed rules — 1995-12-08
issue-1995-12-08Federal Register proposed rules — 1995-12-08Proposed Regulation
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FR Doc. 95-30067 Mortgage Broker Fee Disclosure Rule: Notice of Establishment of Negotiated Rulemaking Advisory Committee and of First Meeting
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63007-63009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30067]
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[[Page 63008]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing--Federal Housing
Commissioner
24 CFR Part 3500
[Docket No. FR-3780-N-03]
RIN 2502-AG40
Mortgage Broker Fee Disclosure Rule: Notice of Establishment of
Negotiated Rulemaking Advisory Committee and of First Meeting
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice of establishment of a negotiated rulemaking advisory
committee and of first meeting.
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SUMMARY: The Department is announcing the establishment of a Negotiated
Rulemaking Advisory Committee under the Federal Advisory Committee Act
(FACA). The first objective of the committee would be to determine
whether or not the amount and nature of indirect payments to mortgage
brokers and certain other mortgage originators (retail lenders) should
be disclosed to consumers. Second, the committee will seek to resolve
whether the Real Estate Settlement Procedures Act (RESPA) permits
volume-based compensation from wholesale lenders, entities that
purchase mortgage loans, to mortgage brokers and, if such compensation
is found permissible, whether and how the compensation should be
disclosed. The committee consists of representatives with a definable
stake in the outcome of a proposed rule. A charter for the committee
has been approved pursuant to the FACA, Executive Order 12838, and the
implementing regulations. This notice also announces the time and place
of the first committee meeting, which will be open to the public.
DATES: The first meeting of the committee will take place December 13-
14, 1995, and will be open to the public. On Wednesday, December 13,
the meeting will start at 9:30 a.m. and run until completion; on
Thursday, December 14, the meeting will start at 9:00 a.m. and run
until approximately 1:00 p.m. If participants and the facilitator
agree, the second day of the meeting may be extended beyond the
projected completion time of 1:00 p.m.
ADDRESSES: The first meeting of the committee will be held in Courtroom
A of the International Trade Commission Building, 500 E Street, SW.,
Washington, DC 20436.
FOR FURTHER INFORMATION CONTACT: David R. Williamson, Director, RESPA
Enforcement Unit, Department of Housing and Urban Development, Room
5241, 451 Seventh Street, SW., Washington, DC 20410-0500; telephone
(202) 708-4560, or on e-mail through Internet at [email protected].
The TDD number for persons who are hearing- or speech-impaired is (202)
708-4594 (TDD). (These telephone numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Background
On October 25, 1995 (60 FR 54794), HUD published a notice of intent
to establish a Negotiated Rulemaking Advisory Committee to discuss and
negotiate a proposed rule to discuss the treatment under RESPA,
including disclosure requirements, of indirect payments to retail
lenders and of volume-based compensation to mortgage brokers. The
October 25 notice also announced that the first meeting of the
committee could be held in late 1995, if the charter for the committee
was approved. Subsequent to the publication of the October 25 notice,
the charter for the committee was approved pursuant to the FACA,
Executive Order 12838, and the implementing regulations at 41 CFR 101-
6.1007. Because the Department noted the tentative schedule for the
first meeting in the October 25 notice and wants to commence the
negotiating process quickly, the first meeting has been scheduled for
December 13-14, 1995. Members of the committee have been contacted
directly by the Department about this schedule.
The October 25 notice requested comment concerning the proposed
membership of the Committee. After review of the comments and for the
reasons stated in the notice of intent, the Department has determined
that establishing a negotiated rulemaking advisory committee on this
subject is necessary and in the public interest.
The Department received eight comments on the October 25 notice.
Six of the eight commenters requested that a member of their
organization be included in the negotiating committee.
Specifically, four commenters suggested that lenders who
concentrate on other mortgage products, such as home equity loans, B
and C loans, and reverse mortgages, should be included. These
commenters were the American Financial Services Association, the
National Home Equity Mortgage Association, the Title One Home
Improvement Lenders Association, and Transamerica HomeFirst, a reverse
mortgage lender. In order to keep the negotiated rulemaking body
manageable and balanced, the Department concluded that with the
addition of the American Financial Services Association, the most
diverse of these organizations, the interests of junior lien and
reverse mortgage lenders would be adequately represented. Moreover, the
American Financial Services Association has indicated that it would
itself consult with other affected organizations.
Two additional national industry groups requested membership. HUD
has determined that these organizations should be added to the
committee because they represented types of lending institutions that
are not already adequately represented on the committee: the
Independent Bankers Association of America represents community banks
and the National Association of Federal Credit Unions represents
Federal credit unions.
All those who expressed interest in participating in the negotiated
rulemaking committee are reminded that meetings of the committee are
open to the public.
Facilitator
As stated in the October 25 notice, the Honorable Alan W. Heifetz,
Chief Administrative Law Judge, will be the facilitator for the
Committee.
Substantive Issues for Negotiation
The issues identified in the convening report were identified and
discussed in the October 25 notice and in a proposed rule on this same
subject recently published by the Department (60 FR 47650, September
13, 1995). The Department received approximately 800 comments on the
proposed rule; these comments are available for public inspection and
copying between 7:30 a.m. and 5:30 p.m. weekdays at the Rules Docket
Clerk, Office of General Counsel, Room 10276, Department of Housing and
Urban Development, 451 Seventh Street SW., Washington, DC 20410. The
comments also will be made available to the members of the committee
for their consideration as they are negotiating a new proposed rule.
Committee Membership
Including the members added in response to comments received on the
October 25 notice, the members of the committee will include:
[[Page 63009]]
National Industry Groups
Paul Reid, President, American Home Funding, Richmond, VA,
President-Elect, Mortgage Bankers Association of America, 1125 15th
Street, NW., Washington, DC 20005-2766
Kay Kinney, Executive Vice President, National Association of
Mortgage Brokers, 1735 N. Lynn Street, Suite 950, Arlington, VA 22209
John Rasmus, Esq., Senior Federal Administrative Counsel/
Manager, Agency Relations, American Bankers Association, 1120
Connecticut Avenue, NW., Washington, DC 20036
Glen Gimble, Esq., Program Manager and Counsel, Real Estate
Lending Compliance, America's Community Bankers, 900 19th Street, NW.,
Washington, DC 20006
Roy DeLoach, Policy Representative, Business Issues, National
Association of Realtors, 700 11th Street, NW., Washington, DC 20001-
4507
Sue Johnson, President and Executive Director, RESPRO, 1800 M
Street, NW., Suite 900 South, Washington, DC 20036
David Goldberg, The Mortgage Capitol Group, Senior Vice
President, Administration, PHH Mortgage Services Corporation, 6000
Atrium Way, Mt. Laurel, NJ 08054
Thomas J. Sheehan, Chairman, IBAA Bank Operations Committee,
Independent Bankers Association of America, One Thomas Circle, NW.,
Suite 950, Washington, DC 20005-5802
Brian McDonnell, Senior Executive Vice-President, of Navy
Federal Credit Union, National Association of Federal Credit Unions,
P.O. Box 3769, Washington, DC 20007
Robert E. McKew, Vice President and General Counsel, American
Financial Services Association, 919 18th Street, NW., Washington, DC
20006
Consumer Groups
Robert Creamer, Citizen Action, 68 East Wacker Place, Chicago,
IL 60601
William J. Brennan, Jr., Esq., (Member, Board of Directors,
National Association of Consumer Advocates), Home Defense Program of
the Atlanta Legal Aid Society, 340 West Ponce De Leon Avenue, Decatur,
Georgia 30030
Nina Simon, Esq., Jean Davis, Esq., Legal Counsel for the
Elderly, American Association of Retired Persons, 601 E Street, N.W.,
Washington, D.C. 20049
State Organizations
Craig Jordan, Esq., Assistant Attorney General for the State
of Texas, Consumer Affairs Division, 714 Jackson Street, Suite 800,
Dallas, Texas 75202
Daniel Muccia, President, American Association of Residential
Mortgage Regulators and Deputy Superintendent of Banks, State of New
York Banking Department, Two Rector Street, New York, New York 10006
Government-Sponsored Enterprises
Jim Newell, Esq., Associate General Counsel, Federal Home Loan
Mortgage Corporation, 8200 Jones Branch Drive, McLean, VA 22102-3107
JoAnn Carpenter, Esq., Vice President and Deputy General
Counsel, Federal National Mortgage Association, 3900 Wisconsin Ave.,
N.W., Washington, D.C. 20016-2899
Federal Government
Designated Federal Officer: Sarah X. Rosen, Esq., Special
Assistant to the Assistant Secretary for Housing, Room 9100, U.S.
Department of Housing and Urban Development, 451 7th Street, S.W.,
Washington, D.C. 20410, (202) 708-3600
Schedule
HUD will hold the first meeting of the committee on December 13-14,
1995. On Wednesday, December 13, the meeting will start at 9:30 a.m.
and run until completion; on Thursday, December 14, the meeting will
start at 9:00 a.m. and run until approximately 1:00 p.m. If
participants and the facilitator agree, the second day of the meeting
may be extended beyond the projected completion time of 1:00 p.m. The
location of the meeting will be Courtroom A of the International Trade
Commission Building, 500 E Street, S.W., Washington, D.C. 20436. The
purpose of the meeting will be to orient members to the negotiated
rulemaking (reg-neg) process, establish a basic set of understandings
and ground rules (protocols) regarding the process that will be
followed in seeking a consensus, and begin to address the issues. This
meeting is open to the public.
Decisions with respect to future meetings will be made at the first
meeting and from time to time thereafter. Notices of future meetings
will be published in the Federal Register if time permits.
To prevent delays that might postpone timely issuance of a proposed
rule, HUD intends to terminate the committee's activities if it does
not reach consensus within 5 months of the first meeting. The process
may end earlier if the facilitator believes that sufficient progress
cannot be made or that an impasse has developed that cannot be
resolved.
Authority: 42 U.S.C. 1437g, 3535(d).
Dated: December 5, 1995.
Stephanie A. Smith,
Acting General Deputy Assistant Secretary for Housing.
[FR Doc. 95-30067 Filed 12-6-95; 1:38 pm]
BILLING CODE 4210-27-P
Complete official Federal Register PDF
FR Doc. 95-29995 Approval and Promulgation of State Implementation Plans: Washington
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63019-63023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29995]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[WA7-1-5542; FRL-5343-2]
Approval and Promulgation of State Implementation Plans:
Washington
AGENCY: Environmental Protection Agency.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this action, Environmental Protection Agency (EPA) invites
public comment on its proposed granting of a temporary waiver of the
attainment date for the Wallula, Washington particulate nonattainment
area. This is based on EPA's review of the State implementation plan
(SIP) revision submitted by the State of Washington for the purpose of
bringing about attainment of the national ambient air quality standards
(NAAQS) for particulate matter with an aerodynamic diameter less than
or equal to a nominal 10 micrometers (PM-10). The implementation plan
was submitted by the State to satisfy certain federal Clean Air Act
requirements for an approvable moderate nonattainment area PM-10 SIP
for a geographic area referred to as Wallula, Washington due on
November 15, 1991.
DATES: Comments on this proposed action must be postmarked by January
8, 1996.
ADDRESSES: Written comments should be addressed to: Montel Livingston,
SIP Manager, United States Environmental Protection Agency, Air
Programs Branch (AT-082), 1200 Sixth Avenue, Seattle, Washington 98101.
Copies of the State's submittals and other information supporting
this proposed action are available for inspection during normal
business hours at the following locations: United States Environmental
Protection Agency, Office of Air, 1200 Sixth Avenue (AT-082), Seattle,
Washington 98101, and the State of Washington Department of Ecology,
4450 Third Ave. SE, Lacey, Washington 98504.
FOR FURTHER INFORMATION CONTACT: George Lauderdale, Office of Air (AT-
082), US Environmental Protection Agency, 1200 Sixth Avenue, Seattle,
Washington 98101, (206) 553-6511.
SUPPLEMENTARY INFORMATION:
I. Background
The Wallula, Washington, area was designated nonattainment for PM-
10 and classified as moderate under sections 107(d)(4)(B) and 188(a) of
the Clean Air Act, by operation of law upon enactment of the Clean Air
Act Amendments of 1990.1 See 56 FR 56694 (Nov. 6, 1991) (official
designation codified at 40 CFR 81.348). The air quality planning
requirements for moderate PM-10 nonattainment areas are set out in
subparts 1 and 4 of Part D, Title I of the Act.2 The EPA has
issued a ``General Preamble'' describing EPA's preliminary views on how
EPA intends to review SIP's and SIP revisions submitted under Title I
of the Act, including those State submittals containing moderate PM-10
nonattainment area SIP requirements [see generally 57 FR 13498 (April
16, 1992) and 57 FR 18070 (April 28, 1992)]. Because EPA is describing
its interpretations here only in broad terms, the reader should refer
to the General Preamble for a more detailed discussion of the
interpretations of Title I advanced in this proposal and the supporting
rationale. In this rulemaking action on the Washington moderate PM-10
SIP for the Wallula nonattainment area, EPA is proposing to apply its
interpretations, taking into consideration the specific factual issues
presented. Additional information supporting EPA's action on this
particular area is available for inspection at the address indicated
above. EPA will consider any timely submitted comments before taking
final action on today's proposal.
\1\ The 1990 Amendments to the Clean Air Act made significant
changes to the Act. See Pub. L. 101-549, 104 Stat. 2399. References
herein are to the Clean Air Act, as amended (``the Act''). The Clean
Air Act is codified, as amended, in the U.S. Code at 42 U.S.C.
sections 7401, et seq.
\2\ Subpart 1 contains provisions applicable to nonattainment
areas generally and subpart 4 contains provisions specifically
applicable to PM-10 nonattainment areas. At times, subpart 1 and
subpart 4 overlap or conflict. EPA has attempted to clarify the
relationship among these provisions in the ``General Preamble'' and,
as appropriate, in today's notice and supporting information.
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Those States containing initial moderate PM-10 nonattainment areas
(those areas designated nonattainment under section 107(d)(4)(B)) were
required to submit, among other things, the following provisions by
November 15, 1991:
1. Provisions to assure that reasonably available control measures
(RACM) (including such reductions in emissions from existing sources in
the area as may be obtained through the adoption, at a minimum, of
reasonably available control technology--RACT) shall be implemented no
later than December 10, 1993;
2. Either a demonstration (including air quality modeling) that the
plan will provide for attainment as expeditiously as practicable but no
later than December 31, 1994, or a demonstration that attainment by
that date is impracticable;
3. Quantitative milestones which are to be achieved every 3 years
and which demonstrate reasonable further progress (RFP) toward
attainment by December 31, 1994; and
4. Provisions to assure that the control requirements applicable to
major stationary sources of PM-10 also apply to major stationary
sources of PM-10 precursors except where the Administrator determines
that such sources do not contribute significantly to PM-10 levels which
exceed the NAAQS in the area. See sections 172(c), 188, and 189 of the
Act.
Some provisions were due at a date later than November 15, 1991.
States with initial moderate PM-10 nonattainment areas were required to
submit a permit program for the construction and operation of new and
modified major stationary sources of PM-10 by June 30, 1992 (see
section 189(a)). Such States also were to submit contingency measures
by November 15, 1993 which become effective without further action by
the State or EPA, upon a determination by EPA that the area has failed
to achieve RFP or to attain the PM-10 NAAQS by the applicable statutory
deadline (see section 172(c)(9) and 57 FR 13543-44).
II. Today's Action
Section 110(k) of the Act sets out provisions governing EPA's
review of SIP submittals (see 57 FR 13565-66). For PM-10 nonattainment
areas Section 188(f), Waivers for Certain Areas, can apply as well.
In this action, EPA is proposing to grant a temporary waiver of the
attainment date for the Wallula nonattainment area. Discussion of EPA's
requirements for a temporary waiver are detailed in 59 FR 41998-42017
(August 16, 1994). In this guidance EPA provides certain flexibility
for areas where the significance of anthropogenic and nonanthropogenic
sources is unknown. The Washington Department of Ecology (Ecology) has
presented preliminary data, based on a crude emission inventory of
eastern Washington, indicating that nonanthropogenic sources may be
significant in the Wallula situation. EPA
[[Page 63020]]
proposes to accept this preliminary information and grant a temporary
waiver of the moderate area attainment date to allow Ecology and EPA to
evaluate further the Wallula nonattainment area. Once the evaluation is
completed, and/or the temporary waiver expires, EPA will make a final
determination on the plan for the Wallula nonattainment area, including
the applicability of a permanent waiver for the area.
The preliminary information presented by Ecology to date indicates
that windblown dust from both anthropogenic and nonanthropogenic
sources are impacting the Columbia Plateau geographic area which
includes most of eastern Washington as well as northern Idaho and
northeastern Oregon. In addition, the primary sources causing
exceedences of the PM-10 standard may be many miles outside of the
currently designated nonattainment areas in the Columbia Plateau
region. Additional monitoring has been initiated in the region to
evaluate further the extent of the problem. Extensive analysis is being
done to distinguish anthropogenic sources from nonanthropogenic
sources.
If granted, the proposed temporary waiver will extend the
attainment date to December 31, 1997. The temporary three-year waiver
will provide Ecology and EPA sufficient time to determine conclusively
the significance of anthropogenic and nonanthropogenic PM-10 sources
that are impacting the area. As required in the EPA guidance, Ecology
and EPA are proceeding under a written agreement which sets out the
protocol for both technical analysis (emission inventory, emission
factor development, dispersion modeling, receptor modeling, etc.) and
evaluation of alternative control measures, including Best Available
Control Measures. The activities required under the protocol are
generally referred to as the Columbia Plateau PM-10 Project funded by
EPA, Ecology and USDA. Cooperating agencies include USDA's Agricultural
Research Service and Natural Resources Conservation Service, as well as
several local conservation districts, Washington State University the
University of Idaho, and others. Once the technical information from
this project is finalized, EPA will determine if a permanent waiver of
the attainment date is appropriate for the Wallula area or if the area
should be reclassified as a serious PM-10 nonattainment area.
The temporary waiver of the attainment date, if finalized by EPA,
will defer approval/disapproval actions on several otherwise required
elements of the moderate area plan for Wallula. The submission of the
attainment demonstration, emission inventory, and contingency measures
will be deferred. EPA will take final action on these elements after
the analysis is completed and/or the expiration of the temporary waiver
along with a decision on the eligibility of the area for a permanent
waiver. EPA's reasoning for this approach is described in more detail
under the various SIP element headings of this notice.
The Wallula plan was submitted to EPA on November 15, 1991. Ecology
also submitted additional information on May 18, 1993 which further
described the control measures being implemented in the area (letter
from Joseph R. Williams to Jim McCormick, forwarding a report titled,
``Addendum to the State Implementation Plan for the Wallula PM-10
Nonattainment Area, Reasonably Available Control Measure Analysis'',
undated). Additional information describing the status of the control
measures and forwarding an analysis of windblown dust in the area was
submitted on June 23, 1994 (letter from Joseph R. Williams to Jim
McCormick). In a June 1, 1995, letter Ecology provided information on
allowable emissions. Finally, Ecology forwarded a revised emission
inventory for point sources within the nonattainment area on September
6, 1995 (letter from Joseph R. Williams to Michael A. Bussell).
EPA is proposing to approve the exclusion from precursor controls
as described in part II. 5 below. EPA invites public comment on the
proposed action described in this section.
A. Analysis of State Submission
1. Procedural Background
The Act requires States to observe certain procedural requirements
in developing implementation plans and plan revisions for submission to
EPA. Section 110(a)(2) of the Act provides that each implementation
plan submitted by a State must be adopted after reasonable notice and
public hearing.3 Section 110(l) of the Act similarly provides that
each revision to an implementation plan submitted by a State under the
Act must be adopted by such State after reasonable notice and public
hearing. The EPA also must determine whether a submittal is complete
and therefore warrants further EPA review and action (see section
110(k)(1) and 57 FR 13565). The EPA's completeness criteria for SIP
submittals are set out at 40 CFR Part 51, Appendix V (1992). The EPA
attempts to make completeness determinations within 60 days of
receiving a submission. However, a submittal is deemed complete by
operation of law if a completeness determination is not made by EPA six
months after receipt of the submission.
\3\ Section 172(c)(7) of the Act requires that plan provisions
for nonattainment areas meet the applicable provisions of section
110(a)(2).
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Ecology held a public hearing to receive public comment on the
Wallula implementation plan on October 23, 1991. WDOE adopted the
implementation plan for the area on November 14, 1991 and the plan was
submitted to EPA on November 15, 1991. The SIP submittal was reviewed
by EPA to determine completeness in accordance with the completeness
criteria set out at 40 CFR Part 51, Appendix V. A letter dated May 5,
1992, was forwarded to the WDOE indicating the completeness of the
submittal and the next steps to be taken in the review process.
2. PM-10 Emissions Inventory
Section 172(c)(3) of the Act requires that nonattainment plan
provisions include a comprehensive, accurate, current inventory of
actual emissions from all sources of relevant pollutants in the
nonattainment area. Because the submission of the emissions inventory
is a necessary adjunct to an area's attainment demonstration (or
demonstration that the area cannot practicably attain) the emissions
inventory must be received with the demonstration (see 57 FR 13539).
In the 1991 plan Ecology submitted an emissions inventory of
estimated actual emissions for the base year of 1990 and the attainment
year of 1994, and the 3-year maintenance year of 1997. Ecology sent a
letter to EPA on September 6, 1995, partially amending that 1991
inventory. The amended inventory adds an additional point source and
revises emission from one area source. EPA considers the changes as
minor and they do not significantly impact the overall inventory for
the area. Based on the 1995 letter the base year (1990) inventory the
major source of particulate matter impacting the area was wind blown
dust (98%, an average of 1,553,334 kilograms/day). The remainder of the
emission inventory included point sources (less that 1%, 693 kilograms/
day) and other area sources (less than 1%, 1215 kilograms/day).
A report titled ``An Analysis of the Impact of Biogenic PM-10
Sources on the Spokane PM-10 Nonattainment Area'', prepared by the
Washington State Department of Ecology, February 1992, presents the
most recent
[[Page 63021]]
information on the emission sources in the Columbia Plateau region of
eastern Washington (which includes both the Spokane and Wallula
nonattainment areas). The report attempts to determine gross annual
emissions from anthropogenic and nonanthropogenic sources of PM-10.
Preliminary information is presented indicating that about 40% of the
annual emissions in eastern Washington are from anthropogenic sources
and 60% from nonanthropogenic sources. No attempt was made to estimate
the highest 24-hour emissions which, depending on the location, is
expected to vary greatly. As discussed previously, the emission
inventory information suggests, but does not conclusively show, that
nonanthropogenic sources contribute significantly to the Wallula
nonattainment area.
The emissions inventory estimating actual emissions generally
appears to be accurate and comprehensive consistent with the
requirements of section 172(c)(3) of the Clean Air Act and national
guidance.4 Although, recent information from studies being
conducted in eastern Washington indicate that the emission factors used
for wind blown dust in the SIP revision are probably inappropriate, EPA
thinks that the assumptions were the best available at the time the
plan was prepared. The Columbia Plateau PM-10 Project will include the
development of emission factors specifically for eastern Washington and
preparation of regional emission inventories that will be used to
update the Wallula plan.
\4\ The EPA issued guidance on PM-10 emissions inventories prior
to the enactment of the Clean Air Act Amendments in the form of the
1987 PM-10 SIP Development Guideline. The guidance provided in this
document appears to be consistent with the Act.
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One additional emission inventory issue relates to the actual and
allowable emissions from stack sources. Ecology used highest actuals in
the 1991 SIP submission. For one of the point sources, a papermill,
allowable emissions are much greater (by a factor of 9) from the actual
emissions used in the plan. However, by using the higher allowable
emission estimates submitted in the September 6, 1995, letter, the
papermill still only represents less than 1% of the emission inventory.
EPA proposes to take no approval or disapproval action on the
emission inventory at this time. EPA is requiring, as well as
participating in, the development of a detailed emission inventory as
part of the Columbia Plateau project. When completed the detailed
emission inventory will be used to supplement the current one.
3. RACM (Including RACT)
As noted, the initial moderate PM-10 nonattainment areas must
submit provisions to assure that RACM (including RACT) are implemented
no later than December 10, 1993 (see sections 172(c)(1) and
189(a)(1)(C)). The General Preamble contains a detailed discussion of
EPA's interpretation of the RACM (including RACT) requirement (see 57
FR 13539-45 and 13560-61).
The current Wallula emission inventory identified wind blown dust
as the dominant contributor of PM-10 emissions. There are two principal
sources of windblown dust: Undisturbed land and agricultural fields.
Ecology submitted an analysis of RACM for agricultural sources of PM-10
based on soil conservation measures required by the federal
government's implementation of the United States Department of
Agriculture's (USDA) Food Security Act (FSA) of 1985, in the Wallula
nonattainment area and surrounding areas. EPA Title I preamble guidance
suggests states ``rely upon the soil conservation requirements (e.g.
conservation plans, conservation reserve) of the Food Security Act to
reduce emissions from agricultural operations'' (see 57 FR 18072).
EPA proposes to accept Ecology's RACM analysis and concludes that
RACM is being applied to agricultural sources not only in the
nonattainment area but throughout the region surrounding Wallula.
Ecology did not evaluate the application of reasonable controls on
undisturbed lands. This analysis will be accomplished as part of the
Columbia Plateau PM-10 Project.
The 1991 SIP revision contained a commitment from Ecology to adopt
provisions of the FSA into state regulation. Ecology has not developed
such a regulation. EPA proposes to determine that Ecology need not
develop, adopt and submit state regulations that accomplish the same
results as the current federal law and regulations. Such action would
be unnecessary since the federal government (USDA) has the primary
responsibility for implementation, and enforcement, of provisions of
the FSA.
Where sources of PM-10 contribute insignificantly to the PM-10
problem in the area, EPA's policy is that it would be unreasonable (and
would not constitute RACM) to require the implementation of potentially
available control measures. 57 FR 13540. Further, EPA has indicated
that for some sources in areas which demonstrate attainment, RACM does
not require the implementation of otherwise available control measures
that are not ``reasonably'' available because their implementation
would not expedite attainment (See 57 FR 13543).
In the Wallula situation, RACM for agricultural windblown dust is
necessary and all other sources combined do not meet the de minimus
guidance for requiring RACM. Even though not required under PM-10 SIP
development guidance, Ecology did justify that RACM (including RACT)
requirements were being met for two additional sources in the Wallula
nonattainment area. Boise Cascade paper mill and the Simplot Feeders
Limited Partnership cattle feedlot were evaluated by Ecology and found
to be implementing RACM.
The only major (greater than 100 tons per year) stationary source
facility within the nonattainment area, the Boise Cascade paper mill,
was evaluated in the 1991 SIP submittal. Ecology concluded and
documented that RACT is being applied to all stack sources in the
facility. The SIP revision does not include any additional control of
stack emissions. However, Ecology's RACT analysis did note that one
unpaved road needed paving to meet RACT for fugitive dust sources
within the facility. Ecology's June 23, 1994 letter documented that the
road was paved, thus meeting the final RACT requirement. EPA proposes
to accept Ecology's determination and considers the papermill to be at
RACT.
The second source, the cattle feedlot, was determined by Ecology as
meeting RACM in the 1991 SIP submittal. In 1992, new owners of the
feedlot implemented an additional dust abatement measure, a sprinkler
system to further reduce fugitive emissions. EPA proposes to accept
Ecology's determination of RACM being applied at the feedlot.
EPA is proposing to grant a temporary waiver of the attainment date
to December 31, 1997, which will allow Ecology and EPA to determine
conclusively the significance of anthropogenic and nonanthropogenic
sources impacting Wallula. This action does not relieve the area from
the requirement to implement RACM. In the Wallula situation EPA thinks
the significant source, as well as the two less significant sources, of
PM-10 in the area have been reasonably controlled. Thus, EPA thinks it
would be unreasonable to require other smaller sources of PM-10 in the
area to implement potentially available control measures or technology.
Further, EPA believes implementation of such additional controls in
this area would not expedite attainment.
[[Page 63022]]
A more detailed discussion of the individual source contributions,
their associated control measures and an explanation as to why certain
available control measures were not implemented, can be found in the
TSD. EPA has reviewed the State's explanation and associated
documentation and is proposing to conclude that it adequately justifies
the control measures to be implemented.
4. Demonstration
As noted, the initial moderate PM-10 nonattainment areas must
submit a demonstration (including air quality modeling) showing that
the plan will provide for attainment as expeditiously as practicable
but no later than December 31, 1994 (see section 189(a)(1)(B) of the
Act). The General Preamble sets out EPA's guidance on the use of
modeling for moderate area attainment demonstrations (57 FR 13539).
Alternatively, if the State does not submit a demonstration of
attainment, the State must show that attainment by December 31, 1994 is
impracticable (section 189(a)(1)(B)(ii).
In the 1991, Wallula SIP submission, Ecology demonstrated
attainment of the annual and 24-hour PM-10 standards by 1994. The SIP
utilized simple rollback modeling for the demonstration. As with the
emission inventory discussion above, EPA finds the attainment
evaluation is inadequate. The emission inventory does not adequately
document the anthropogenic and nonanthropogenic mix in the dominant
emission source, windblown dust. However, since EPA is proposing to
grant a temporary, three year, waiver of the attainment date, the
approval or disapproval of the attainment demonstration will be
deferred until after expiration of the temporary waiver. EPA proposes
to make a final decision on the attainment status and classification of
the area soon after the temporary waiver expires on December 31, 1997.
The alternative decisions include reclassifying the area to a serious
PM-10 nonattainment area or granting the area a permanent waiver. EPA
invites comments on this approach.
5. PM-10 Precursors
The control requirements which are applicable to major stationary
sources of PM-10, also apply to major stationary sources of PM-10
precursors unless EPA determines such sources do not contribute
significantly to PM-10 levels in excess of the NAAQS in that area (see
section 189(e) of the Act). The General Preamble contains guidance
addressing how EPA intends to implement section 189(e) (see 57 FR
13539-40 and 13541-42).
Ecology submitted the emission inventory for PM-10 from the one
major stationary source and several small sources. Due to the small
contribution of stationary sources to the Wallula nonattainment area,
EPA believes that stationary sources of precursors provide an
insignificant contribution to the Wallula, Washington, ambient PM-10
concentration and EPA is proposing to grant the area an exclusion from
PM-10 precursor control requirements authorized under section 189(e) of
the act. Note that while EPA is proposing to make a general finding for
this area, this proposed finding is based on the current character of
the area including, for example, the existing mix of sources in the
area. It is possible, therefore, that future growth could change the
significance of precursors in the area. EPA intends to issue future
guidance addressing such potential changes in the significance of
precursor emissions in an area.
6. Quantitative Milestones and Reasonable Further Progress (RFP)
The PM-10 nonattainment area plan revisions demonstrating
attainment must contain quantitative milestones which are to be
achieved every three (3) years until the area is redesignated
attainment and which demonstrate RFP, as defined in section 171(1),
toward attainment by December 31, 1994 (see section 189(c) of the Act).
Reasonable further progress is defined in section 171(1) as such annual
incremental reductions in emissions of the relevant air pollutant as
are required by Part D or may reasonably be required by the
Administrator for the purpose of ensuring attainment of the applicable
NAAQS by the applicable date.
As stated earlier, EPA is proposing to grant a temporary waiver of
the attainment date for the Wallula area. If granted, the area would
not be required to meet RFP because in 1998 EPA would determine if the
area would receive a permanent waiver or be reclassified to serious.
7. Enforceability Issues
All measures and other elements in the SIP must be enforceable by
Ecology and EPA (see sections 172(c)(6), 110(a)(2)(A) and 57 FR 13556).
EPA criteria addressing the enforceability of SIP's and SIP revisions
were stated in a September 23, 1987 memorandum (with attachments) from
J. Craig Potter, Assistant Administrator for Air and Radiation, et al.
(see 57 FR 13541). Nonattainment area plan provisions must also contain
a program that provides for enforcement of the control measures and
other elements in the SIP (see section 110(a)(2)(C)).
WDOE's control measures and regulations for control of Particulate
Matter, which are contained in the SIP, are addressed above under the
section headed ``RACM (including RACT).'' These control measures apply
to the types of activities identified in that discussion including, for
example, fugitive emissions from agricultural sources. The SIP provides
that the affected activities will be controlled throughout the entire
nonattainment area.
The SIP requires that all the applicable SIP provisions be
implemented by December 10, 1993 (section 189(a)(1)(C). In addition to
the applicable control measures, this includes the applicable record-
keeping requirements which are addressed in the supporting technical
information document (TSD).
The TSD contains further information on enforceability requirements
including enforceable emission limitations; a description of the rules
contained in the SIP and the source types subject to them; test methods
and compliance schedules; malfunction provisions; excess emission
provisions; correctly cited references of incorporated methods/rules;
and reporting and recordkeeping requirements. Ecology has the primary
responsibility for implementing the measures in the plan. Ecology has
compliance inspectors and EPA considers the staffing level adequate to
assure that the RACM provision in the Wallula attainment plan are fully
implemented. As a necessary adjunct of its enforcement program, Ecology
also has broad powers to adopt rules and regulations, issue orders,
require access to records and information, and receive and disburse
funds.
8. Contingency Measures
As provided in section 172(c)(9) of the Act, all moderate
nonattainment area SIP's that demonstrate attainment must include
contingency measures (see generally 57 FR 13543-44). These measures
must be submitted by November 15, 1993 for the initial moderate
nonattainment areas. Contingency measures should consist of other
available measures that are not part of the area's control strategy.
These measures must take effect without further action by the State or
EPA, upon a determination by EPA that the area has failed to make RFP
or attain the PM-10 NAAQS by the applicable statutory deadline. Since
the action proposed in this Federal Register notice
[[Page 63023]]
allows for a temporary extension of the attainment date, EPA proposes
to take no action on the contingency measures until after the temporary
waiver has elapsed and EPA has determined the eligibility of the area
for a permanent waiver.
III. Implications of Today's Action
EPA is proposing to grant a temporary waiver of the December 31,
1994, attainment date to December 31, 1997. If granted, the Washington
Department of Ecology will proceed with determining the significance of
anthropogenic and nonanthropogenic sources impacting the Wallula PM-10
nonattainment area. When Ecology has completed its analysis, and/or the
temporary waiver expires, EPA will make a final determination of the
status of the Wallula nonattainment area. EPA is proposing to approve
the control measures submitted by Ecology as meeting RACM and as having
been fully implemented by December 10, 1993. Finally, EPA is also
proposing to grant an exclusion from precursor control requirements as
described in part II. 5 of this notice.
IV. Request for Public Comments
EPA is requesting comments on all aspects of today's proposal. As
indicated at the beginning of this notice, EPA will consider any
comments postmarked by January 8, 1996.
V. Administrative Review
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant impact on a substantial number of small entities. Small
entities include small businesses, small not-for-profit enterprises,
and government entities with jurisdiction over populations of less than
50,000.
SIP approvals under section 110 and subchapter I, Part D of the CAA
do not create any new requirements, but simply approve requirements
that the state is already imposing. Therefore, because the federal SIP-
approval does not impose any new requirements, I certify that it does
not have a significant impact on any small entities affected. Moreover,
due to the nature of the federal-state relationship under the CAA,
preparation of a regulatory flexibility analysis would constitute
federal inquiry into the economic reasonableness of state action. The
CAA forbids EPA to base its actions concerning SIPs on such grounds.
Union Electric Co. v. U.S.E.P.A., 427 U.S. 246, 256-66 (S.Ct. 1976); 42
U.S.C. 7410(a)(2).
Under Section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
the private sector, of $100 million or more. Under Section 205, EPA
must select the most cost-effective and least burdensome alternative
that achieves the objectives of the rule and is consistent with
statutory requirements. Section 203 requires EPA to establish a plan
for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
EPA has determined that the proposed action promulgated does not
include a Federal mandate that may result in estimated costs of $100
million or more to either State, local, or tribal governments in the
aggregate, or to the private sector. This Federal action approves pre-
existing requirements under State or local law, and imposes no new
Federal requirements. Accordingly, no additional costs to State, local,
or tribal governments, or to the private sector, result from this
action.
Nothing in this action should be construed as permitting or
allowing or establishing a precedent for any future request for
revision to any SIP. Each request for revision to any SIP shall be
considered separately in light of specific technical, economic, and
environmental factors and in relation to relevant statutory and
regulatory requirements.
This action has been classified as a Table 3 action by the Regional
Administrator under the procedures published in the Federal Register on
January 19, 1989 (54 FR 2214-2224), as revised by a July 10, 1995
memorandum from Mary Nichols, Assistant Administrator for Air and
Radiation. The Office of Management and Budget (OMB) has exempted this
regulatory action from E.O. 12866 review.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Intergovernmental
relations, Particulate matter, and Reporting and recordkeeping
requirements.
Authority: 42 U.S.C. 7401-7671q.
Dated: November 7, 1995.
Chuck Clarke,
Regional Administrator.
[FR Doc. 95-29995 Filed 12-7-95; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 95-29965 Proposed Establishment of Class E2 Airspace; Lewisburg, WV
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63006-63007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29965]
=======================================================================
-----------------------------------------------------------------------
[[Page 63007]]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Airspace Docket No. 95-AEA-12]
Proposed Establishment of Class E2 Airspace; Lewisburg, WV
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would establish Class E2 airspace
designated as a surface area for Greenbrier Valley Airport, Lewisburg,
West Virginia. The airport has a VOR or GPS-A (circling) Standard
Instrument Approach Procedure (SIAP), an NDB or GPS RWY 4 SIAP and an
ILS RWY 4 SIAP. Class E2 airspace would be established to accommodate
these SIAPs and for instrument flight rules (IFR) operations at this
airport.
DATES: Comments must be received on or before January 29, 1996.
ADDRESSES: Send comments on the rule in triplicate to: Manager, System
Management Branch, AEA-530, Docket No. 95-AEA-12, F.A.A. Eastern
Region, Federal Building # 111, John F. Kennedy International Airport,
Jamaica, NY 11430.
The official docket may be examined in the Office of the Assistant
Chief Counsel, AEA-7, F.A.A. Eastern Region, Federal Building # 111,
John F. Kennedy International Airport, Jamaica, NY 11430. An informal
docket may also be examined during normal business hours in the System
Management Branch, AEA-530, F.A.A. Eastern Region, Federal Building #
111, John F. Kennedy International Airport, Jamaica, NY 11430.
FOR FURTHER INFORMATION CONTACT:
Mr Francis T. Jordan, Jr., Airspace Specialist, System Management
Branch, AEA-530, F.A.A. Eastern Region, Federal Building # 111, John F.
Kennedy International Airport, Jamaica, NY 11430; telephone: (718) 553-
4521.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are specially
invited on the overall regulatory, aeronautical, environmental, and
energy-related aspects of the proposal. Communications should identify
the airspace docket number and be submitted in triplicate to the
address listed above. Commenters wishing the FAA to acknowledge receipt
of their comments on this notice must submit with those comments a
self-addressed, stamped postcard on which the following statement is
made: ``Comments to Airspace Docket No. 95-AEA-12''. The postcard will
be date/time stamped and returned to the commenter.
All communications received before the specified closing date for
comments will be considered before taking action on the rule. The rule
contained in this notice may be changed in the light of comments
received. All comments received will be available for examination in
the Rules Docket both before and after the closing date for comments. A
report summarizing each substantive public contact with the FAA
personnel concerned with this rulemaking will be filed in the docket.
Availability of NPRMs
Any person may obtain a copy of this Notice of Proposed Rulemaking
(NPRM) by submitting a request to the Office of the Assistant Chief
Counsel, AEA-7, F.A.A. Eastern Region, Federal Building # 111, John F.
Kennedy International Airport, Jamaica, NY 11430. Identify the notice
number of this NPRM. Persons interested in being placed on a mailing
list for future NPRMs should also request a copy of Advisory Circular
No. 11-2A, which describes the application procedure.
The Proposal
The FAA is considering amending part 71 of the Federal Aviation
Regulations (14 CFR part 71) by establishing Class E2 airspace,
designated as a surface area for an airport, at Lewisburg, WV, to
accommodate current SIAPs and for IFR operations at the Greenbrier
Valley Airport.
The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
Class E2 airspace areas designated as a surface area for an airport are
published in Paragraph 6002 of FAA Order 7400.9C, dated August 17, 1995
and effective September 16, 1995. The Class E airspace designation
listed in this document would be published subsequently in the Order.
It therefore--(1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 1979); and
(3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this proposed rule would not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
The Proposed Amendment
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 71 as follows:
PART 71--[AMENDED]
1. The authority citation for part 71 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O 10854, 24
FR 9565, 3 CFR 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995 and effective September 16,
1995, is amended as follows:
Paragraph 6002 Class E airspace areas designated as a surface area
for an airport.
* * * * *
AEA WV E2 Lewisburg, WV [New]
Greenbrier Valley Airport, WV
(lat. 37 deg.51'30'' N, long. 80 deg.23'58'' W)
Bushi NDB (LOM)
(lat. 37 deg.46'56'' N., long. 80 deg.28'06'' W)
Within a 4-mile radius of Greenbrier Valley Airport. This Class
E area is effective during the specific dates and times established
in advance by a Notice To Airmen. The effective date and time will
thereafter be continuously published in the Airport/Facility
Directory.
* * * * *
Issued in Jamaica, New York, on November 30, 1995.
John S. Walker,
Manager, Air Traffic Division.
[FR Doc. 95-29965 Filed 12-7-95; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 95-29933 Definition of Foreign Base Company Income and Foreign Personal Holding Company Income of a Controlled Foreign Corporation; Hearing
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63009-63010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29933]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[INTL-0075-92]
RIN 1545-AR31
Definition of Foreign Base Company Income and Foreign Personal
Holding Company Income of a Controlled Foreign Corporation; Hearing
AGENCY: Internal Revenue Service, Treasury.
ACTION: Change of location of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document changes the location of the public hearing on
proposed regulations relating to the definitions of subpart F income
and foreign personal holding company income of a controlled foreign
corporation and the allocation of deficits for purposes of computing
the deemed-paid foreign tax credit.
DATES: The public hearing is being held on Thursday, January 4, 1996,
beginning at 10:00 a.m.
ADDRESSES: The public hearing originally scheduled in the IRS
Auditorium, Seventh floor, 7400 Corridor, Internal Revenue Building,
1111 Constitution Avenue, NW., Washington, DC is changed to room 2615,
Internal Revenue Building, 1111 Constitution Avenue, NW., Washington,
DC.
FOR FURTHER INFORMATION CONTACT:
Mike Slaughter of the Regulations Unit, Assistant Chief Counsel
(Corporate), (202) 622-7190, (not a toll-free number).
SUPPLEMENTARY INFORMATION: A notice of public hearing appearing in the
Federal Register on Thursday, September 7, 1995 (60 FR 46548),
announced that a public hearing relating to proposed regulations under
sections 952, 954(c), and 960 of the Internal Revenue Code will be held
Thursday, January 4, 1996, beginning at 10:00 a.m. in the IRS
Auditorium, Seventh floor, 7400 Corridor, Internal Revenue Building,
1111 Constitution Avenue, NW., Washington, DC and that requests
[[Page 63010]]
to speak and outlines of oral comments should be received by Tuesday,
June 21, 1994.
The location of the public hearing has changed. The hearing is
being held in room 2615 on Thursday, January 4, 1996, beginning at
10:00 a.m. The requests to speak and outlines of oral comments should
be received by Thursday, December 14, 1995. Because of controlled
access restrictions, attenders cannot be admitted beyond the lobby of
the Internal Revenue Building until 9:45 a.m.
Copies of the agenda are available free of charge at the hearing.
Michael L. Slaughter,
Acting Chief, Regulations Unit, Assistant Chief Counsel (Corporate).
[FR Doc. 95-29933 Filed 12-7-95; 8:45 am]
BILLING CODE 4830-01-M
Complete official Federal Register PDF
FR Doc. 95-29923 Food Assistance in Disaster and Distress Situations
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 62999-63006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29923]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 60, No. 236 / Friday, December 8, 1995 /
Proposed Rules
[[Page 62999]]
DEPARTMENT OF AGRICULTURE
Food and Consumer Service
7 CFR Part 250
RIN 0584-AB55
Food Assistance in Disaster and Distress Situations
AGENCY: Food and Consumer Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule proposes to amend the provisions of the Food
Distribution Program Regulations that relate to food assistance
provided in response to Presidentially declared disasters and
emergencies and in other situations of distress. The proposals
contained in this rule address: (1) Simultaneous issuance of
commodities and food stamps in a disaster; (2) distribution of
commodities to households in situations of distress; (3) authorization
for providing commodity assistance; (4) reporting requirements; and (5)
the replacement of commodities. In addition, revised definitions are
being proposed which encompass the definitions contained in the Robert
T. Stafford Disaster Relief and Emergency Assistance Act. These
revisions will help ensure that commodity assistance is made available
to victims of disasters and to those in situations of distress in the
most efficient and effective manner possible while maintaining the
integrity of the program.
DATES: To be assured of consideration, comments must be postmarked on
or before February 6, 1996.
ADDRESSES: Comments should be sent to: Lillie Ragan, Section Head,
Household Programs Section, Policy and Program Development Branch, Food
Distribution Division, Food and Consumer Service, U.S. Department of
Agriculture, Park Office Center, Room 502, 3101 Park Center Drive,
Alexandria, Virginia 22302-1594. Comments in response to this rule may
be inspected at 3101 Park Center Drive, Room 502, Alexandria, Virginia,
during normal business hours (8:30 a.m. to 5 p.m.), Monday through
Friday.
FOR FURTHER INFORMATION CONTACT: Lillie Ragan at the above address or
telephone (703) 305-2661.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866, and, therefore, has not been
reviewed by the Office of Management and Budget.
Regulatory Flexibility Act
This action has been reviewed with regard to the requirements of
the Regulatory Flexibility Act (5 U.S.C. 601-612). The Administrator of
the Food and Consumer Service (FCS) has certified that this action will
not have a significant economic impact on a substantial number of small
entities. The primary impact of the procedures in this rulemaking would
be on FCS Regional Offices, State governments and individuals who might
apply for disaster or distress commodity benefits. To the extent that
county or other local governments assist in the distribution of
commodities at a disaster or distress feeding site, they would also be
affected.
Executive Order 12372
These programs are listed in the Catalog of Federal Domestic
Assistance under 10.550 and are subject to the provisions of Executive
Order 12372, which requires intergovernmental consultation with State
and local officials (7 CFR part 3015, Subpart V and final rule-related
notices published at 48 FR 29114, June 24, 1983 and 49 FR 22676, May
31, 1984).
Information Collection
This proposed rule contains information collection requirements
which are subject to review and approval by the Office of Management
and Budget (OMB). As required by section 3504(h) of the Paperwork
Reduction Act of 1980 (44 U.S.C. 3504(h)), FCS has submitted a copy of
this proposed rule to OMB for review of these information collection
requirements. The title, description, and respondent description of the
information collections are shown below with an estimate of the annual
reporting and recordkeeping burdens.
Title: Commodity Assistance to Households in Disasters and
Situations of Distress.
Description: In instances when the Food Stamp Program is in
operation and commodities are being made available for distribution to
households, this proposed rule increases the reporting and
recordkeeping burden by requiring the collection of the following
minimal information from each household receiving commodities during
Presidentially declared disasters and other situations of distress: (1)
name of one household member; (2) address; (3) number of persons in the
household; and (4) a signed statement of assurance that the household
is not receiving food stamp benefits. Such information is necessary in
that it can be used by local organizations involved in the distribution
of commodities to determine if a household is receiving food stamp
benefits, thus significantly reducing the possibility of both food
stamp and commodity assistance being provided to households
simultaneously.
The reporting and recordkeeping requirements identified below have
been submitted to OMB for approval and are not effective until such
approval is obtained. The new information collection requirements will
not become effective until OMB has assigned a control number. Current
reporting and recordkeeping requirements for disaster assistance were
approved under Control Number 0584-0037.
Description of Respondents: Relief organizations, households
receiving commodities for home consumption in Presidentially declared
disasters and other situations of distress when the situation warrants.
[[Page 63000]]
Food Assistance in Disaster and Distress Situations Description of Respondent's Estimated Annual Reporting and
Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
Annual Annual Average
Section 7 CFR part Number frequency burden per Annual
respondents response hours burden
----------------------------------------------------------------------------------------------------------------
7 CFR 250.43:
Previous................................................ 0 0 0 0
Proposed................................................ 1000 1 .020 20
7 CFR 250.44:
Previous................................................ 0 0 0 0
Proposed................................................ 1000 1 .020 20
----------------------------------------------------------------------------------------------------------------
Total Previous Burden Hours: 0; Total Proposed Burden Hours: 66; Total Difference: +66.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This rule is intended to have preemptive effect
with respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the ``Effective Date'' section of the preamble
of the final rule. All available administrative procedures must be
exhausted prior to any judicial challenge to the provisions of this
rule or the application of its provisions.
Background
On October 13, 1994, the President signed the Federal Crop
Insurance Reform and Department of Agriculture Reorganization Act of
1994, Pub. L. 103-354. One of the provisions of the Act eliminated the
Food and Nutrition Service (FNS) and replaced it with the Food and
Consumer Service (FCS). Therefore, references to FNS throughout this
proposed rule have been changed to FCS. References to FNS in the
remainder of 7 CFR Part 250 will be changed through rulemaking at a
later date.
The Department makes commodities available for use in providing
food assistance to victims of disasters and emergencies, and to those
in situations of distress, in accordance with authority contained in
several statutes. Donated commodities are made available for use in
providing food assistance to victims of Presidentially declared
disasters and emergencies in accordance with the provisions contained
in sections 412 and 413 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (DREAA). DREAA was formerly known as ``The
Disaster Relief Act of 1974.'' It was amended and its title changed to
DREAA by Public Law 100-707 (November 23, 1988), the Disaster Relief
and Emergency Assistance Amendments of 1988.
Donated commodities are made available for use in non-
Presidentially declared emergencies (i.e., situations of distress) in
accordance with section 32 of the Act of August 24, 1935, section 416
of the Agricultural Act of 1949, and section 4(a) of the Agriculture
and Consumer Protection Act of 1973.
The regulations governing the Food Distribution Program (7 CFR Part
250) outline the responsibilities of FCS and distributing agencies with
regard to the distribution of donated commodities during a disaster or
emergency, and in situations of distress.
As discussed in detail below, some proposals contained in this
proposed rule reflect amendments which have been made to the
authorizing legislation. This proposed rule also includes regulatory
changes recommended by the Task Force for Disaster Preparedness
established by the Department of Agriculture (USDA or Department) in
response to issues which arose in the course of providing food
assistance to victims of several disasters and other types of
emergencies in the past several years. The Task Force was comprised of
representatives from USDA, the Federal Emergency Management Agency
(FEMA), private national organizations such as the Red Cross, and State
and local agencies. One of the objectives of the Task Force was to
identify current Federal disaster policies that are in need of
revision. Regulatory amendments embodying Task Force recommendations
are proposed in this rule under the discretionary authority granted to
the Secretary by section 32 of the Act of August 24, 1935, section 416
of the Agricultural Act of 1949, and the DREAA. The discretionary
changes are part of the Department's effort to ensure that commodity
assistance is made available to victims of disasters, emergencies and
situations of distress in the most efficient and effective manner
possible while maintaining the integrity of the program.
Definitions
Section 250.3 of the current regulations contains definitions of
``Emergency'' and ``Major Disaster'' derived from the Disaster Relief
Act of 1974 (now ``DREAA''). Pub. L. 100-707 amended the Disaster
Relief Act of 1974 to revise these definitions.
The DREAA defines ``Emergency'' as ``any occasion or instance for
which, in the determination of the President, Federal assistance is
needed to supplement State and local efforts and capabilities to save
lives and to protect property and public health and safety, or to
lessen or avert the threat of a catastrophe in any part of the United
States.''
A ``Major Disaster'' is defined under the DREAA as ``any natural
catastrophe (including any hurricane, tornado, storm, flood, high
water, wind-driven water, tidal wave, tsunami, earthquake, volcanic
eruption, landslide, mudslide, snowstorm, drought), or, regardless of
cause, any fire, flood, or explosion, in any part of the United States,
which in the determination of the President causes damage of sufficient
severity and magnitude to warrant major disaster assistance under the
DREAA to supplement the efforts and available resources of States,
local governments, and disaster relief organizations in alleviating the
damage, loss, hardship, or suffering caused thereby.''
The majority of the general public is not familiar with the
specific terms contained in the DREAA (i.e. ``Emergency'' and ``Major
Disaster''). Furthermore, this rulemaking establishes no distinctions
between the situations these terms represent regarding types of
benefits or procedures for authorizing, utilizing, reporting on
utilization of, or replacing commodities. Therefore, this rule proposes
to: (1) add to Section 250.3 the term ``Disaster,'' which would
incorporate the definitions of ``Emergency'' and ``Major Disaster''
contained in the DREAA; and (2) delete the terms ``Emergency'' and
``Major
[[Page 63001]]
Disaster'' currently contained in Section 250.3. These proposed
revisions would not impact on program operations or benefits in any
way.
The key distinction between disasters and situations of distress
with regard to food assistance is whether a Presidential declaration is
made. However, there is no definition of ``Situation of Distress''
under Section 250.3 of the current regulations to make this distinction
immediately clear.
Therefore, this rule also proposes to amend Section 250.3 to add a
definition for ``Situation of Distress.'' Under this proposal, a
``Situation of Distress'' is defined as ``(1) a hurricane, tornado,
storm, flood, high water, wind-driven water, tidal wave, tsunami,
earthquake, volcanic eruption, landslide, mudslide, snowstorm, drought,
fire, explosion, or other natural catastrophe not declared by the
President to be an emergency or disaster, but which, in the judgment of
a State distributing agency, warrants the use of USDA commodities for
congregate feeding; and (2) any other situation not declared by the
President to be an emergency or disaster, but which, in the judgment of
FCS, warrants the use of USDA commodities for congregate feeding or
household distribution.'' This proposed definition will: (1) clarify
that a situation of distress lacks a Presidential declaration; and (2)
clearly identify those situations in which State distributing agencies
can independently initiate USDA commodity assistance, on the one hand,
and those in which prior approval by FCS is required.
Reference to the Disaster Relief Act of 1974
The Disaster Relief Act of 1974 is referenced in Sections 250.43(a)
and 250.43(e) of the current regulations. Following publication of the
regulations, the Disaster Relief Act of 1974 was amended and renamed
the DREAA. Therefore, this rule proposes to amend Section 250.43(e) to
remove the outdated reference and replace it with a reference to the
DREAA, and proposes to remove all reference to any statutory authority
in Section 250.43(a) since such reference is unnecessary.
Distribution of Commodities to Households in Presidentially Declared
Disaster Areas
This section of the preamble addresses ``disasters,'' the proposed
definition for which encompasses only situations in which a
Presidential declaration has been issued. ``Situations of distress,''
proposed to be defined as situations lacking a Presidential
declaration, are discussed later in this preamble.
On August 19, 1985, an overall revision of Part 250 was published
as a proposed rule in the Federal Register (50 FR 33470). Section
250.43 of the proposed rule limited the distribution of commodities to
households residing in areas served by the Food Stamp Program to those
instances in which commercial channels of trade have been disrupted due
to a major disaster or emergency.
Approval of requests to make commodities available for distribution
to households was made contingent upon commercial channels of trade
having been disrupted because it is in these circumstances that
households would have no way of using food stamps. Thus, such a
contingency would ensure that commodity and food stamp assistance would
not be provided in any area simultaneously, thereby eliminating any
possibility of households receiving dual benefits.
In general, commenters on the proposed rule of August 1985 opposed
limiting the distribution of commodities to households in this manner.
However, the interim rule published in the Federal Register on June 3,
1988, (53 FR 20416) retained the provision as proposed on the premise
that in instances in which commercial channels of trade are intact,
nutritional needs of disaster victims can be met through the Food Stamp
Program.
Since implementation of the interim rule, several disasters have
occurred in response to which the Department provided food assistance.
This experience, and recommendations of the Task Force for Disaster
Preparedness, have led the Department to reevaluate the current
regulatory provisions. While the Department still believes that the
Food Stamp Program should be the primary food assistance program for
disaster victims whenever commercial channels of trade are intact, it
also acknowledges that there are instances in which such facilities
remain in operation yet are inaccessible to some disaster victims. For
example, where roads have been heavily damaged or flooded, some
individuals residing in households in that area may not be able to
reach food stamp certification offices or local grocery stores. They
may, however, have access to emergency commodity distribution sites
strategically located in response to the specific situation.
Therefore, in accordance with the discretionary authority provided
under the DREAA, to facilitate reasonable access to food assistance for
all disaster victims, this rule proposes to amend Section 250.43 of the
current regulations to establish FCS's authority to permit distribution
of commodities to households regardless of whether commercial channels
of trade have been disrupted or the Food Stamp Program is in operation
in instances in which such distributions are warranted. However, the
Department believes that most disaster situations will not warrant the
simultaneous operation of the Food Stamp Program and a household
commodity distribution program in the same area.
Submission of Requests
Section 250.43(c) of the current regulations requires that
distributing agencies submit requests to the appropriate FCS Regional
Office (FCSRO) for approval prior to making commodities available for
distribution to households. However, the process for approving such
requests has not been clearly understood.
While the regulations require submission of such requests to the
appropriate FCSRO, the requests are forwarded to FCS Headquarters for
actual approval. In an effort to eliminate any confusion regarding the
approval process, this rule proposes to revise Section 250.43(c) to
require that requests be submitted to the FCSRO for forwarding to FCS
for approval. Since the FCSRO is typically very close to or on the
scene of a disaster, the FCSRO will be expected to submit a
recommendation to FCS along with the application for use in making
appropriate determinations. In addition, this rule proposes to revise
this section to clarify the information currently required to be
submitted as part of such requests.
This rule also proposes to apply information requirements
established under current rules for approval to make household
distributions in situations when commercial channels of trade have been
disrupted to situations in which commercial channels are intact. The
proposal would also establish additional requirements in both types of
situations. In addition to the information distributing agencies are
currently required to submit when requesting approval for the
distribution of commodities to households, requests would be required
to include, at a minimum, the following information: (1) An explanation
as to why the distribution of commodities to households is warranted;
(2) identification of the specific area(s) included in the request; (3)
a statement of assurance that simultaneous food stamp and commodity
assistance will not be provided to individual households; and (4) a
description of the
[[Page 63002]]
system that will be implemented to prevent dual participation.
Submission of such information is necessary in order for FCS to
determine if the situation warrants the simultaneous distribution of
food stamps and commodities and to ensure that the State has a viable
system to prevent dual benefits from being provided to households.
Collection of Household Information
While various forms have been developed by States for use in
collecting household data, current regulations contain no provisions
concerning the collection of information from households for the
receipt of donated foods during a disaster. Under the provisions
contained in this proposed rule, food stamp benefits can be issued and
commodities distributed for home consumption in areas where it has been
determined by the Department that the situation warrants such
simultaneous operations. However, the Department is concerned that in
such instances food stamp benefits and commodities may be provided to
the same household simultaneously. In an effort to ensure that
information necessary to prevent the issuance of dual benefits and for
establishing and pursuing claims action is available, this rule
proposes to amend section 250.43(c) to require that organizations
distributing donated foods to households in areas where the Food Stamp
Program is in operation obtain, at a minimum, the name of the household
member applying for assistance, number of members in the household, and
the household's address. Such information must be recorded in whatever
format the State deems appropriate.
In addition to providing the above information, organizations
distributing donated foods to households would be required to obtain a
signed statement of assurance from the adult member of the household
applying for benefits to the effect that the household: (1) Is in need
of food assistance as a result of the disaster; (2) understands that
misrepresentation of need and the sale or exchange of the donated food
are prohibited and could result in a fine, imprisonment, or both; (3)
is not residing in a shelter which provides food assistance; and (4) is
not receiving food stamp assistance. While the intent of this signed
statement is to prevent applicants from receiving duplicative food
assistance benefits, it should be reasonably interpreted in the context
of the individual case. For example, a household which applies for
commodity assistance en route from a shelter where food assistance was
provided to reoccupy its permanent residence should not be considered
to be ``residing in a shelter.'' The signing of such statements will
ensure that households understand the conditions under which the food
assistance is being provided. Such statements will also provide further
support for pursuing a claim against a household in instances in which
both food stamp and commodity assistance were provided. Under the
proposal, all signed statements must be provided to the distributing
agency unless the organization distributing the commodities is an
agency of the State. At the discretion of the distributing agency, non-
State agencies may be assigned responsibility of retaining such
statements rather than forwarding them to the State.
In instances when it is determined that claims action against a
household is warranted due to the receipt of both food stamp and
commodity assistance, the Department intends to pursue such action
through establishment of a claim against the household for the value of
the food stamps issued. This course of action is preferred since the
recordkeeping requirements that would have to be imposed on a disaster
organization to ensure availability of information necessary to
establish a claim for the value of commodities would be significant,
while recording the value of the food stamp benefit provided is already
required and much less time consuming.
There have been instances in past years in which other Federal
agencies have been involved in providing food assistance to disaster
victims with USDA commodities. Questions were raised as to whether
these agencies were subject to the requirements set forth for disaster
situations. In instances in which it has been determined that the
collection of certain information is necessary and the regulations
contain information collection requirements, all organizations,
regardless of the type, must comply with the requirements. This
proposed rule will clarify that any entity, including Federal, State,
and local agencies, involved in the distribution of USDA commodities
must comply with all such regulatory requirements. In addition, this
proposed rule will clarify that State and Federal agencies can act as a
disaster organization in providing food assistance during disasters and
situations of distress.
Replacement of Commodities
Section 250.43(g) of the current regulations states that USDA
commodities used from the State's inventory for a major disaster or
emergency will be replaced by FCS to the extent that foods are
available.
Section 413(b) of the DREAA authorizes the use of funds under
section 32 of the Act of August 24, 1935, to purchase food necessary to
provide adequate supplies for use in a major disaster or emergency.
This rule proposes to amend paragraph (g) of Section 250.43 to reflect
the statutory authority. This change will guarantee that USDA
commodities used by a State for disaster assistance are replaced,
provided that a timely request is submitted by the distributing agency.
Use of Commodities in Situations of Distress
The primary difference between a disaster and a situation of
distress, with regard to USDA food assistance, is that a situation of
distress is not of a magnitude to warrant an emergency or disaster
declaration by the President. This section of the preamble addresses
only such situations of distress.
Section 250.44 of the current regulations permits, upon approval by
the Secretary, the distribution of donated foods to organizations for
use in preparing meals in situations in which the need for food
assistance cannot be met through other provisions of Part 250
regulations. Prior to the overall revision of Part 250, which was
published as an interim rule in the Federal Register on June 3, 1988,
(53 FR 20416), the regulations also permitted the Department to
authorize distribution of commodities to households in all such
situations. In drafting the overall revision, the Department decided to
delete those provisions relative to household distribution in
situations of distress on the premise that food assistance to
households can be provided through the Food Stamp Program.
Since implementation of the interim rule, the Department has
determined that the Food Stamp Program may not be able to meet the
nutritional needs of all affected households in situations of distress.
For example, it may not be possible for some households to obtain food
stamp benefits due to certain eligibility requirements, such as
resource limits on the value of vehicles, or citizenship. In addition,
there may be instances in which certain areas are hard hit by a non-
Presidentially declared disaster (i.e., situation of distress) and
using food stamps is not feasible because commercial channels of trade
in those particular areas are disrupted.
Therefore, to ensure that food assistance can be made available to
households in these types of situations,
[[Page 63003]]
this rule proposes to revise Section 250.44 to reinstate the
Department's authority to permit the distribution of commodities to
households in situations of distress. This discretionary authority is
afforded the Secretary under section 416 of the Agricultural Act of
1949, and section 32 of the Act of August 24, 1935.
Section 250.44 is being revised instead of Section 250.43, which
sets forth provisions relative to disasters, in order to clarify and
underscore the different treatment of Presidentially declared
``disasters,'' on the one hand, and ``situations of distress,'' on the
other.
Submission of Requests
Section 250.44 of the current regulations requires that all
requests for the donation of commodities for use in situations of
distress be submitted for approval by the Secretary.
This rule proposes to revise Section 250.44 to delegate the
authority for approving requests for the donation of commodities for
use in congregate feeding to the distributing agency in instances in
which the need for such assistance meets the conditions of paragraph
(1) of the definition of ``Situation of Distress'' set forth in Section
250.3. Those instances include ``a hurricane, tornado, storm, flood,
high water, wind-driven water, tidal wave, tsunami, earthquake,
volcanic eruption, landslide, mudslide, snowstorm, drought, fire,
explosion, or other natural catastrophe not declared by the President
to be an emergency or disaster.'' This delegation of authority is
consistent with the delegation of authority contained in Section 250.43
for the use of commodities for congregate feeding in Presidentially
declared disasters. While the Department recognizes that instances
other than those included above may warrant the donation of commodities
for use in preparing congregate meals, such donations should be limited
to those situations where it can be determined that other traditional
Federal or State assistance programs cannot meet the needs of
individuals who have been adversely affected by the situation. Thus, in
an effort to ensure consistency in such determinations, Section 250.44
of this rule proposes to require that requests for the donation of
commodities for use in preparing congregate meals in instances when the
situation of distress does not fit the above criteria be submitted for
approval by FCS. Approval by FCS, instead of by the Secretary, will
facilitate expeditious handling of requests, while still maintaining an
appropriate level of oversight.
Section 250.44(c)(2) of this rule also proposes to require that
requests for the donation of commodities for distribution to households
in situations of distress, regardless of the type of situation, be
submitted for approval by FCS. The proposal would require this level of
approval in an effort to ensure that: (1) Such distributions are
limited to situations that warrant this type of assistance; and (2)
households will not be receiving food stamp and commodity assistance
simultaneously.
As discussed in the Definitions section earlier in this preamble,
for purposes of clarification, this rule also proposes to specify the
above-described approval authorities for congregate feeding and
household distribution, respectively, in the definition of ``Situation
of Distress'' contained in Section 250.3.
This rule also proposes to amend Section 250.44 to require that
organizations requesting the donation of commodities for use in
congregate meal service for victims of situations of distress provide
the following information to the distributing agency: (1) A description
of the distress situation; (2) number of people requiring meals; (3)
period of time for which the donations are being requested; and (4)
quantity and types of food needed. In addition, information on the
number and location of sites providing meals will be provided as sites
are established.
It is imperative that this information be provided so that FCS and
the distributing agency are able to determine if: (1) The donation of
commodities is warranted; (2) the amount and types of commodities
requested are appropriate for the situation; and (3) there is
sufficient food in inventory within the State to meet the needs of the
organizations. When the distributing agency has approved requests for
the donation of commodities for congregate feeding in accordance with
the delegation of authority prescribed above, it must forward this
information to the appropriate FCSRO.
This rule proposes to revise Section 250.44 to require that
requests to FCS for permission to distribute commodities to households
contain, at a minimum, the following information: (1) A description of
the situation; (2) an explanation as to why such distributions are
warranted; (3) period of time for which the request is being made; (4)
identification of the specific area(s) included in the request; (5)
number of households expected to participate; (6) quantity and types of
food needed; (7) a statement of assurance that both food stamp and
commodity assistance will not be provided to individual households
simultaneously; and (8) a description of the system that will be
implemented to prevent dual participation in the Food Stamp Program and
the commodity household distribution program. In addition, information
relative to the number and location of distribution sites must be
provided to FCS as sites are established.
Collection of Household Information
Section 250.44 is also revised in this proposed rule to require
that any entity, including Federal, State, and local agencies, involved
in the distribution of USDA commodities comply with the requirements
contained in Section 250.43(c) of this proposed rule regarding the
collection and submission of information (i.e., household information,
and statements of assurance). As with Presidentially declared
disasters, this information will be used to ensure that such
distributions are warranted and to enhance program accountability.
Submission of Form FNS-292
This rule proposes to incorporate in Section 250.44 a requirement
that distributing agencies submit a summary report to the FCSRO using
Form FNS-292, Report of Coupon Issuance and Commodity Distribution for
Disaster Relief, within 30 days following termination of the
distribution period. This requirement is being incorporated to ensure
timely reporting, strengthen program accountability, and facilitate
timely replacement of State inventories of USDA commodities in
instances in which replacement commodities are available.
Thirty-Day Restriction
Section 250.44 of the current regulations limits the distribution
of commodities in situations of distress to a period of 30 days.
However, it is the opinion of the Department that some situations of
distress may warrant a longer distribution period. Thus, this rule
proposes to amend Section 250.44 to permit the distribution of
commodities for longer periods of time when the situation warrants. In
instances in which the distributing agency approves the distribution of
commodities for use in preparing congregate meals, such approval may be
granted for a period not to exceed 30 days. Should the distributing
agency determine that the situation warrants a longer distribution
period, the distributing agency must submit a request to justify an
extension to FCS for
[[Page 63004]]
approval. These provisions will afford FCS increased flexibility in
responding to situations of distress, and at the same time ensure that
the use of USDA commodities in these situations is warranted.
In addition, this rule proposes to clarify in Section 250.44 that
the determination as to the appropriate period of time for which
commodities will be made available would be subject to revision as
developing circumstances dictate. In instances when the distributing
agency extends the distributions within the 30-day period discussed
above, it must notify the FCSRO of such extensions. Submission of this
information to the FCSRO is necessary to facilitate accurate
replacement of USDA commodities, as discussed below.
Replacement of Commodities
Section 250.44 of the current regulations does not contain
provisions relative to the replacement of the USDA commodities that
States use to provide assistance during a situation of distress. USDA
has limited funding to purchase commodities for use in providing food
assistance in situations of distress, and can also donate for this use
commodities purchased under price-support and surplus removal
authorities. Therefore, USDA commodities that are used from the State's
inventory for a situation of distress will be replaced at the request
of the distributing agency to the extent that inventories of price-
support and surplus-removal commodities permit. This rule proposes to
amend Section 250.44 to include this replacement policy. In addition,
to ensure timely submission of requests for replacement, this rule
proposes to incorporate a requirement that such requests be submitted
within 30 days following termination of the distributions.
The attached chart has been included in this preamble to assist
readers in understanding the basic provisions set forth in this
proposed rule.
Situation of
Disaster distress
Definition............ (1) any natural (1) a hurricane,
catastrophe (including tornado, storm,
any hurricane, tornado, flood, high water,
storm, flood, high water, wind-driven water,
wind-driven water, tidal tidal wave,
wave, tsunami, tsunami,
earthquake, volcanic earthquake,
eruption, landslide, volcanic eruption,
mudslide, snowstorm, landslide,
drought), or, regardless mudslide,
of cause, any fire, snowstorm, drought,
flood, or explosion, in fire, explosion, or
any part of the U.S., other natural
which in the catastrophe not
determination of the declared by the
President causes damage President to be an
of sufficient severity emergency or
and magnitude to warrant disaster, but
major disaster assistance which, in the
under the DREAA to judgment of the
supplement the efforts distributing
and available resources agency, warrants
of States, local the use of USDA
governments, and disaster commodities for
relief organizations in congregate feeding;
alleviating the damage, and (2) any other
loss, hardship, or situation not
suffering caused thereby; declared by the
or (2) any other occasion President to be an
or instance for which, in emergency or
the determination of the disaster, but
President, Federal which, in the
assistance is needed to judgment of FCS,
supplement State and warrants the use of
local efforts and USDA commodities
capabilities to save for congregate
lives and to protect feeding or
property and public household
health and safety, or to distribution.
lessen or avert the
threat of a catastrophe
in any part of the U.S.
----------------------------------------------------------------------------------------------------------------
Household Household
Food assistance authorized Congregate feeding distribution Congregate feeding distribution
----------------------------------------------------------------------------------------------------------------
Approval authority.............. State distributing FCS HQ............ If distress FCS HQ.
agency. situation in
accordance with
(1) in above
definition, State
distributing
agency;
Otherwise, FCS HQ.
Applicable sections of 250.43(b)......... 250.43(c)......... 250.44(b)......... 250.44(c).
regulations.
Household information required.. None.............. Name; Address; None.............. Name; Address;
Number in Number in
Household; Household;
Assurance Assurance
Statement re: Statement re:
need and dual need and dual
participation in participation in
food stamps; food stamps;
Signature (in Signature (in
instances when instances when
the Food Stamp the Food Stamp
Program is in Program is in
operation). operation).
Replacement of USDA commodities. Yes............... Yes............... To the extent To the extent
available. available.
----------------------------------------------------------------------------------------------------------------
List of Subjects
7 CFR Part 250
Aged, Agricultural commodities, Business and industry, Food
assistance programs, Food donations, Food processing, Grant programs-
social programs, Indian, Infants and children, Price support programs,
Reporting and recordkeeping requirements, School breakfast and lunch
programs, Surplus agricultural commodities.
Accordingly, 7 CFR Part 250 is proposed to be amended as follows:
PART 250--DONATION OF FOODS FOR USE IN THE UNITED STATES, ITS
TERRITORIES AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION
1. The authority citation for Part 250 continues to read as
follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 612c, 612 note, 612c note,
1431, 1431b, 1431e, 1431 note, 1446a-1, 1859; 15 U.S.C. 713c; 22
U.S.C. 1922; 42 U.S.C. 1755, 1758, 1760, 1761, 1762a, 1766, 3030a,
5179, 5180.
2. In Section 250.3:
a. The definitions of Emergency and Major Disaster are removed; and
b. definitions of Disaster and Situation of Distress are added in
alphabetical order.
The additions read as follows:
Sec. 250.3 Definitions.
* * * * *
Disaster means:
(a) any natural catastrophe (including any hurricane, tornado,
storm, flood, high water, wind-driven water, tidal wave, tsunami,
earthquake, volcanic eruption, landslide, mudslide, snowstorm,
drought), or, regardless of
[[Page 63005]]
cause, any fire, flood, or explosion, in any part of the United States,
which in the determination of the President causes damage of sufficient
severity and magnitude to warrant major disaster assistance under the
Disaster Relief and Emergency Assistance Act to supplement the efforts
and available resources of States, local governments, and disaster
relief organizations in alleviating the damage, loss, hardship, or
suffering caused thereby; or
(b) any other occasion or instance for which, in the determination
of the President, Federal assistance is needed to supplement State and
local efforts and capabilities to save lives and to protect property
and public health and safety, or to lessen or avert the threat of a
catastrophe in any part of the United States.
* * * * *
Situation of Distress means:
(a) a hurricane, tornado, storm, flood, high water, wind-driven
water, tidal wave, tsunami, earthquake, volcanic eruption, landslide,
mudslide, snowstorm, drought, fire, explosion, or other natural
catastrophe not declared by the President to be an emergency or
disaster, but which, in the judgment of the distributing agency,
warrants the use of USDA commodities for congregate feeding; and
(b) any other situation not declared by the President to be an
emergency or disaster, but which, in the judgment of FCS, warrants the
use of USDA commodities for congregate feeding or household
distribution.
* * * * *
3. Section 250.43 is revised to read as follows:
Sec. 250.43 Disaster Food Assistance.
(a) Organizational eligibility. In instances in which the President
has declared a disaster and FCS has determined that, as a result of the
disaster, low-income households are unable to purchase adequate amounts
of nutritious food, disaster organizations (including agencies of State
and Federal government) may be eligible to receive donated foods for
congregate meal service or household distribution to disaster victims.
Applications submitted for the receipt and distribution of donated
foods in accordance with paragraphs (b)(2) and (c)(2) of this section
shall be initially submitted in writing if circumstances permit and, if
not, confirmed in writing in a timely manner. Both the applications and
the written approval for the use of USDA commodities shall be
maintained in accordance with the recordkeeping requirements of this
Part.
(b) Congregate meal service. (1) Approval authority and duration.
Distributing agencies may review and approve applications submitted by
disaster organizations for the donation of foods for use in preparing
congregate meals for disaster victims. Distributing agencies also shall
determine the length of such donations, taking into consideration the
magnitude of the situation, and may extend the duration of such
donations as developing circumstances dictate. Following approval of a
request for donated foods, the distributing agency shall make
appropriate donated foods available from any source within the State to
the disaster organization(s) and within 24 hours of approving the
application shall report the information listed in paragraph (b)(2) of
this section to the appropriate FCSRO.
(2) Applications. Disaster organizations shall submit applications
for the receipt and distribution of donated foods for use in providing
congregate meal service to the distributing agency. Applications shall,
to the extent possible, include the following information.
(i) Description of disaster or emergency situation;
(ii) Number of people requiring meals;
(iii) Period of time for which commodities are requested; and
(iv) Quantity and types of food needed for congregate meal service.
In addition, organizations shall report the number and location of
sites providing congregate meal service as sites are established.
(c) Household distribution. (1) Approval authority and duration.
Distributing agencies shall submit applications for the distribution of
donated foods to households to the appropriate FCSRO for submission to
FCS for approval. FCS will determine the length of time such donations
will be made, taking into consideration the magnitude of the situation,
and may extend the duration of such donations as developing
circumstances dictate.
(2) Applications. Disaster organizations shall submit applications
for the receipt and distribution of donated foods to households to the
distributing agency. Applications shall, to the extent possible,
include the following information:
(i) Description of disaster or emergency situation;
(ii) Identification of the specific area(s) included in the
request;
(iii) Number of households affected;
(iv) Explanation as to why the distribution of commodities to
households is warranted;
(v) Anticipated distribution period;
(vi) Method of distribution available;
(vii) Quantity and types of food needed for distribution;
(viii) Statement of assurance that simultaneous food stamp and
commodity assistance will not be provided to individual households; and
(ix) Description of the system that will be implemented to prevent
dual participation.
Information on the number and location of sites where commodities
are to be distributed shall be provided as sites are established.
(3) Collection of household information. In instances in which the
Food Stamp Program is in operation, any entity (i.e. Federal, State, or
local) distributing donated foods to households shall, at a minimum,
collect the information listed below in a format prescribed by the
distributing agency. Such information shall be forwarded to the
distributing agency and maintained by the distributing agency in
accordance with the recordkeeping requirements contained in this Part,
except that such information may, at the discretion of the distributing
agency, be maintained by the organization distributing commodities if
such organization is an agency of the State government.
(i) Name of household member applying for assistance;
(ii) Address;
(iii) Number of household members; and
(iv) Statement signed by the household certifying that the
household:
(A) is in need of food assistance;
(B) understands that misrepresentation of need, and the sale or
exchange of the donated food are prohibited and could result in a fine,
imprisonment, or both;
(C) is not residing in a shelter which provides food assistance;
and
(D) is not receiving food stamp assistance.
(d) Quantities and value of donated foods. The distributing agency
shall make donated foods available to eligible disaster organizations
based on the caseload factor information provided by the disaster
organizations.
(e) Types of donated foods authorized for donation. Disaster
organizations providing food assistance under this Section are eligible
to receive donated foods under section 416, section 32, section 709,
section 4(a), and sections 412 and 413 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5181-82).
(f) Summary report. Within 30 days following termination of the
disaster assistance, the distributing agency shall provide a summary
report to the appropriate FCSRO using Form FNS-
[[Page 63006]]
292, Report of Coupon Issuance and Commodity Distribution for Disaster
Relief.
(g) Replacement. The distributing agency shall request, in writing
to the FCSRO, the replacement of foods used for disaster assistance
within 30 days following termination of the assistance. FCS will
replace donated foods used from State and/or local inventories for
disaster assistance in instances when a request for replacement is
submitted within the required 30 days or sufficient justification
exists to waive the 30-day requirement.
4. Section 250.44 is revised to read as follows:
Sec. 250.44 Food Assistance in Situations of Distress.
(a) Organizational eligibility. In situations of distress in which
needs for food assistance cannot be met under other provisions of this
Part, organizations (including agencies of State and Federal
government) may be eligible to receive donated foods for congregate
meal service or household distribution to victims of the situation of
distress. Applications submitted for the receipt and distribution of
donated foods in accordance with paragraphs (b)(2) and (c)(2) of this
section shall be initially submitted in writing if circumstances permit
and, if not, confirmed in writing in a timely manner. Both the
applications and the written approval for the use of USDA commodities
shall be maintained in accordance with the recordkeeping requirements
of this Part.
(b) Congregate meal service. (1) Approval authority and duration.
Distributing agencies may review and approve applications for the
donation of foods for use in preparing congregate meals for a period
not to exceed 30 days for victims of situations of distress in
instances in which the need for such assistance meets the conditions of
paragraph (a) of the definition of Situation of Distress in Section
250.3. Following approval of a request, distributing agencies shall
report the information listed in paragraph (b)(2) of this section to
the appropriate FCSRO within 24 hours. In instances when the
distributing agency extends the distribution period initially approved
up to the 30-day limit, it shall notify the FCSRO of such extensions.
Distributing agencies shall request approval from FCS, via the
appropriate FCSRO, for donations to exceed 30 days. Applications for
the donation of foods for congregate meals in instances other than
those that meet the criteria in paragraph (a) of the definition of
Situation of Distress in Section 250.3 shall be forwarded by the
distributing agency to the appropriate FCSRO for submission to FCS for
approval. FCS will determine the duration of such donations, taking
into consideration the magnitude of the situation. Determinations as to
the length of donations may be revised as developing circumstances
dictate.
(2) Applications. (i) Organizations shall submit applications for
the receipt and distribution of donated foods for use in providing
congregate meal service to the distributing agency. Applications shall,
to the extent possible, include the following information:
(A) Description of the situation of distress;
(B) Number of people requiring meals and congregate meal service
period; and
(C) Quantity and types of food needed.
(ii) In addition, information on the number and location of sites
providing meals shall be submitted as sites are established.
(c) Household distribution. (1) Approval authority and duration.
Applications for the donation of foods for distribution to households
shall be forwarded by the distributing agency to the appropriate FCSRO
for submission to FCS for approval. FCS will determine the duration of
the donations, taking into consideration the magnitude of the
situation. Such determinations may be revised as developing
circumstances dictate.
(2) Applications. Organizations shall submit applications for the
receipt and distribution of donated foods to households to the
distributing agency. The distributing agency shall review and submit
applications to the appropriate FCSRO. Applications shall, to the
extent possible, include the following information:
(i) Description of the situation of distress;
(ii) Explanation as to why the distribution of commodities to
households is warranted;
(iii) Identification of the specific area(s) included in the
request;
(iv) Anticipated distribution period;
(v) Number of households expected to participate;
(vi) Quantity and types of food needed for distribution;
(vii) Statement of assurance that simultaneous food stamp and
commodity assistance will not be provided to individual households; and
(viii) Description of the system that will be implemented to
prevent dual participation.
In addition, information on the number and location of sites shall
be provided as sites are established.
(3) Collection of household information. In a format prescribed by
the distributing agency, any entity (i.e. Federal, State, or local)
distributing donated foods to households in an area where the Food
Stamp Program is in operation shall, at a minimum, collect the
information listed below. Such information shall be forwarded to the
distributing agency and maintained by the distributing agency in
accordance with the recordkeeping requirements contained in this Part,
except that such information may, at the discretion of the distributing
agency, be maintained by the organization distributing commodities if
such organization is an agency of the State government.
(i) Name of household member applying for assistance;
(ii) Address;
(iii) Number of household members; and
(iv) Statement signed by the household certifying that the
household:
(A) is in need of food assistance;
(B) understands that misrepresentation of need, and the sale or
exchange of the donated food are prohibited and could result in a fine,
imprisonment, or both;
(C) is not residing in a shelter which provides food assistance;
and
(D) is not receiving food stamp assistance.
(d) Quantities and value of donated foods. The distributing agency
shall make donated foods available to eligible organizations based on
the caseload factor information provided by the organizations.
(e) Types of donated foods authorized for donation. Organizations
providing food assistance in situations of distress are eligible to
receive donated foods under section 416, section 32, section 709, and
section 4(a).
(f) Summary report. Within 30 days following termination of the
assistance, the distributing agency shall provide a summary report to
the appropriate FCSRO using Form FNS-292, Report of Coupon Issuance and
Commodity Distribution for Disaster Relief.
(g) Replacement. The distributing agency shall request, in writing
to the FCSRO, the replacement of foods used for a situation of distress
within 30 days following termination of the assistance. FCS will
replace donated foods used from State and/or local inventories for
situations of distress to the extent that foods are available.
Dated: November 28, 1995.
William E. Ludwig,
Administrator.
[FR Doc. 95-29923 Filed 12-7-95; 8:45 am]
BILLING CODE 3410-30-U
Complete official Federal Register PDF
FR Doc. 95-29909 Federal Acquisition Regulation; Contracting by Negotiation (FAR Part 15 Rewrite)
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63023-63024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29909]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Part 15
Federal Acquisition Regulation; Contracting by Negotiation (FAR
Part 15 Rewrite)
AGENCY: Department of Defense (DoD).
ACTION: Notice of public meeting.
-----------------------------------------------------------------------
SUMMARY: The Director of Defense Procurement, in concert with the
Federal Acquisition Regulations Council, is sponsoring an initiative to
rewrite the Federal Acquisition Regulation (FAR) Part 15, Contracting
by Negotiation. The intent is to make Part 15 easier to understand and
to eliminate policies, procedures, or requirements that impose
unnecessary burdens on contractors or contracting officers. Regulatory
requirements that are not required by statute, required to ensure
adequately standardized government business practices, or required to
protect the public interest will be considered for elimination.
Innovative means of simplifying the procurement process and enhancing
its efficiency will be considered for incorporation into the
regulation. The rewrite team will use a number of fora to facilitate
the exchange of ideas and information. Comments are solicited from both
government and industry personnel, and notices of public meetings will
be published in the Federal Register. To initiate the rewrite effort,
interested parties are invited to present statements or provide
suggestions on how to improve FAR Part 15 at a public meeting.
DATES: Public Meeting: A public meeting will be conducted at the
address shown below from 1 p.m. to 3 p.m., Eastern standard time, on
January 23, 1996.
Statements: Statements from interested parties for presentation at
the public meeting should be submitted to the address below on or
before January 16, 1996.
ADDRESSES: Public Meeting: The location of the public meeting is the
General Services Administration auditorium, 18th and F Streets NW.,
Washington, D.C. 20405. Individuals wishing to attend the meeting,
including individuals wishing to make presentations on the topic
scheduled for discussion should contact the Part 15 Rewrite Committee
Chair, Ms. Melissa
[[Page 63024]]
Rider, DAR Council, Attn: IMD 3D139, PDUSD (A&T) DP/DAR, 3062 Defense
Pentagon, Washington, D.C. 20301-3062.
FOR FURTHER INFORMATION CONTACT:
Ms. Melissa Rider, telephone (703) 602-0131. FAX (703) 602-0350.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
[FR Doc. 95-29909 Filed 12-7-95; 8:45 am]
BILLING CODE 5000-04-M
Complete official Federal Register PDF
FR Doc. 95-29864 Revision of Requirements Governing Surety Bonds for Outer Continental Shelf Leases
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63011-63019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29864]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Part 250, 251, and 256
RIN 1010-AB92
Revision of Requirements Governing Surety Bonds for Outer
Continental Shelf Leases
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The proposed rule would establish a deadline of 2 years for
all Outer Continental Shelf (OCS) oil and gas and sulphur lessees to
bring their bond coverage into compliance with the new levels of
coverage established in 1993; clarify MMS's position that assignees,
assignors, and co-lessees are jointly and severally liable for
compliance with OCS oil and gas and sulphur leases; establish a
regulatory framework for lease-specific abandonment accounts and
acceptance of a third-party guarantee; and update the bond coverage
required of right-of-way holders and Geological and Geophysical (G&G)
exploration permittees. These changes are needed to reduce the risk of
default by an underfunded company operating a lease or holding a right-
of-way.
DATES: Comments must be received or postmarked no later than March 7,
1996 to be considered in this rulemaking.
ADDRESSES: Written comments must be mailed or hand-carried to the
Department of the Interior; Minerals Management Service; 381 Elden
Street; Mail Stop 4700; Herndon, Virginia 22070-4817; Attention: Chief,
Engineering and Standards Branch.
FOR FURTHER INFORMATION CONTACT: Gerald D. Rhodes, Engineering and
Technology Division, telephone (703) 787-1609.
SUPPLEMENTARY INFORMATION: The MMS regulations at 30 CFR Part 250,
Subpart G, Abandonment of Wells, Subpart I, Platforms and Structures,
and Subpart J, Pipelines and Pipeline Rights-of-Way, specify that OCS
lessees, right-of-way holders, and G&G exploration permittees are
liable for all end-of-lease financial obligations including unpaid
royalties; costs of well plugging and abandonment; removal of pipe,
equipment, platform(s), and facilities; and clearance of obstructions
to other uses of the sea. The levels of bond coverage required by the
regulations do not limit the obligations of OCS oil and gas or sulphur
lessees, holders of an OCS pipeline right-of-way, or exploration
permittees conducting deep stratigraphic tests.
The transfer of OCS leases from large producing companies to
smaller producers, some of which are marginally financed, has increased
the risk that the responsible party will not be able to satisfy end-of-
lease obligations.
The MMS continues to investigate ways to provide more flexibility
to lessees in meeting bonding requirements. For example, MMS has
allowed third-party guarantees and escrow accounts as alternatives to
traditional bonds. These methods would be specifically addressed in
regulations to facilitate their use. The MMS encourages lessees to
suggest other alternatives to traditional bonds. The regulations
provide flexibility to the Regional Director to consider alternate
forms of surety.
Oil and Gas and Sulphur Lease Bond Coverage Requirements: To reduce
the number of cases of underfunded liabilities, MMS published revised
rules on August 27, 1993 (58 FR 45255), increasing the bond coverage
required for OCS oil and gas or sulphur leases.
The MMS is phasing in the increases in the minimum levels of bond
coverage as part of the process of reviewing requests for approval of
lease assignments, Exploration Plans (EP), Development and Production
Plans
[[Page 63012]]
(DPP), or Development Operations Coordination Documents (DOCD). The
1993 regulation replaced the requirement for a $50,000 bond for oil and
gas and sulphur leases with requirements based upon the drilling or
production stage of a lease as follows:
------------------------------------------------------------------------
Areawide
State of development Lease bond bond
------------------------------------------------------------------------
Issuance of lease............................... $50,000 $300,000
EP approval..................................... 200,000 1,000,000
DPP and DOCD approval........................... 500,000 3,000,000
------------------------------------------------------------------------
This proposed rule would require lessees not already in compliance
with the higher bond levels to submit and maintain the higher lease or
areawide bonds within 2 years of the promulgation of a final rule.
Assignors, Assignees, and Co-Lessees Liable for Compliance: When
the designated operator is unable to meet end-of-lease obligations, MMS
will require any or all of the lessees to bring the lease into
compliance. If there is no lessee able to perform, MMS will require the
prior lessee(s) to perform these functions.
Relationship Between these Regulations and The Liability
Regulations Published by MMS's Royalty Management Program: This
proposed rule clarifies MMS's position with respect to the liability of
assignees, assignors, and lessees (record title owners) for the
plugging and abandonment of wells, removal of platforms and other
facilities, and clearance of well and platform locations. These
obligations are joint and several in nature. The obligations are not
divisible, and a degree of residual liability is attached (i.e., an
assignor may be required to perform lease and well abandonment and
clearance obligations when an assignee refuses or is unable to carry
out any or all of these responsibilities).
The indivisible nature of these obligations distinguishes them from
the royalty and other payment obligations addressed in the regulations
proposed for modification by the notice of proposed rulemaking (NPR)
published on June 9, 1995, by MMS's Royalty Management Program (RMP)
(60 FR 30492). The provisions of that NPR would establish liability for
the payment of royalty due on Federal and Indian leases and establish
responsibility to pay and report royalty and other payments.
The RMP's NPR dated June 9, 1995, proposes that royalty and other
payment obligations be treated as divisible according to the division
of the record title interests in a lease and proposes that a record
title owner's (lessee's) liability for the payment of royalty and other
payments be proportionate to percentage of the record title interest
owned. That NPR also points out that lease obligations such as
leasehold and well abandonment and reclamation are not divisible.
Neither of these NPR's address against whom MMS will take
enforcement action if MMS discovers noncompliance either in payments
due or required leases abandonment and reclamation activities. In every
instance, MMS retains the discretion to determine which person to
pursue. Once the lease has been brought into compliance, the person MMS
takes enforcement action against could seek contributions from other
liable persons.
While these proposed rule should make it easier to determine who
the liable parties are, it is not MMS's intention that these rules
govern the relationship or liabilities between and among the affected
parties other than MMS.
Means for Financing Abandonment and Clearance Obligations: Since no
revenues are being generated from a lease at the time lease wells are
to be plugged and abandoned, platforms are to be removed, and the
seafloor cleared of obstructions, MMS wants assurances that OCS lessees
establish some means of funding their end-of-lease obligations.
Similarly, no revenues are generated by pipeline operations at the
time the right-of-way holder is called upon to remove all platforms,
structures, domes over valves, pipes, taps, and valves along the right-
of-way in compliance with MMS regulations. The MMS wants assurances
that holders of OCS pipeline right-of-way grants provide some means of
funding their right-of-way abandonment obligations.
Supplemental bonds: The MMS's Regional Directors may require OCS
lessees, on a case-by-case basis. To provide additional security in the
form of a supplemental bond or bonds or an increase in the amount of
coverage under an existing bond. The additional security is required
when the Regional director deems it necessary to ensure that the lessee
or its guarantor will be able to comply with all end-of-lease
obligations. The Regional Director will also consider the added
liability created when new leases are added to an existing areawide
bond.
The proposed rule would increase the level of bond coverage for G&G
exploration permittees drilling a deep stratigraphic test well and
would provide authority for MMS's Regional Directors to require right-
of-way holders and G&G exploration permittees, on a case-by-case basis,
to post additional bonds or other security in the form of a
supplemental bond or bonds or an increase in the amount of coverage
under an existing bond. These changes recognize that the current
bonding requirements found in Secs. 250.159(b) and 251.6-4 are
inadequate and also recognize the variation in costs associated with
the abandonment of deep stratigraphic test wells and pipelines
constructed on OCS right-of-ways.
Lease-Specific Abandonment Accounts and Third-Party Guarantee:
Proposed Sec. 256.56, Lease-specific abandonment accounts, and
Sec. 256.57, Third-party guarantee, would establish specific regulatory
authority under which MMS's Regional Director may approve these
alternate methods for funding end-of-lease abandonment obligations.
Regional Directors already accept lease-specific abandonment accounts.
A third-party guarantee or a supplemental bond may cover specific
obligations, such as plugging and abandonment of specified leases or
wells. However, the Regional Director's approval will depend on how
well the combination of all bonds and guarantees is able to ensure that
the lessee will meet all obligations.
Section-by-Section Discussion
Part 250--Oil and Gas and Sulphur Operations in the OCS
Section 250.110 General Requirements
Current rules at Sec. 256.62(d) provide that assignors remain
``liable for all obligations under the lease accruing prior to the
approval of the assignment.'' The rule at Sec. 250.110 of subpart G,
Abandonment of Wells, is being amended to clarify existing requirements
that when a well is drilled, a platform or other facility is installed,
or an obstruction is created, the lessee's obligation accrues to
properly plug and abandon the wellbore, remove the platform or other
facility, and clear the ocean of obstructions in accordance with
procedures specified in subpart G of 30 CFR part 250. When an
assignment occurs, the assignor continues to have residual liability
should the assignee fail to fully perform obligations that accrued
before assignment with respect to wells and structures in existence at
the time of the assignment.
The clarification also provides that when there are several
responsible lessees, they are jointly and severally liable for end-of-
lease obligations.
Section 250.159, General requirements for a pipeline right-of-way
grant, would be modified to add a
[[Page 63013]]
provision under which the Regional Director could require the holder of
a right-of-way to submit and maintain additional security in the form
of a supplemental bond or bonds or by increasing the amount of coverage
provided under an existing surety bond.
Part 251--G&G Explorations of the OCS
Section 251.6-4, Bonds, would be modified to increase the bond
coverage required to $200,00 for drilling a deep stratigraphic test
well unless an areawide bond is maintained. A provision would be added
under which the Regional Director could require a permittee under a G&G
Exploration permit to submit and maintain additional security in the
form of a supplemental bond or bonds or by increasing the amount of
coverage provided under an existing surety bond. Compliance with the
increased amount of bond coverage would be required for all permits
granted after the effective date of a final rule.
Part 256--Leasing of Sulphur or Oil and Gas in the OCS
Subpart I--Bonding
Section 256.52 Requirement to File a Bond
Proposed Sec. 256.52, Requirement to file a bond (current
Sec. 256.58, Acceptable bonds/alternate security instruments), expands
upon the provisions of Sec. 256.58 and establishes the bonding
requirements for lessees. This section establishes the time at which a
bond must be provided and recognizes alternate methods that a Regional
Director may approve for providing additional security.
Proposed Sec. 256.52(d) expands upon the provisions of current
Sec. 256.58(d) with regard to the results of a payment of a claim in
the face amount of the surety.
Proposed Sec. 256.52(f) expands upon the provisions of current
Sec. 256.58(f) with regard to the responsibility of the lessee to
monitor the value of U.S. Department of the Treasury (U.S. Treasury)
instruments provided to MMS and to submit additional U.S. Treasury
instruments if the value of the instruments previously provided falls
below the level of bond required.
In Sec. 256.52, new paragraph (i) requires the lessee to give
notice and to cease operations if the lease ceases to be in compliance
with bonding requirements. Paragraph (i) also authorizes the Regional
Director to allow continued operations when ceasing operations would
pose a danger to the environment or to the producing reservoir but with
all proceeds being paid into lease abandonment accounts.
Section 256.53 Additional Bonds
Proposed Sec. 256.53, Additional bonds (existing Sec. 256.61,
Additional bonds), expands the provisions of current Sec. 256.61 to
establish a deadline (2 years after promulgation of a final rule) for
lessees of existing leases to provide the required increased amounts of
bond coverage.
Proposed Sec. 256.53(d) modifies the generic criteria used by the
Regional Director to assess the ability of a lessee to carry out its
present and future financial obligations and the need for supplemental
bond.
Proposed Sec. 256.53(e) would expand Sec. 256.61 to establish
regulatory provisions for determining the amount of additional bond
coverage to be required.
Section 256.54 Bond Form
Section 256.59, Form of bond, would be renumbered and renamed
Sec. 256.54, Bond form. New Sec. 256.54 establishes certain required
terms of surety bonds including a requirement that the bond be
noncancellable.
Proposed Sec. 256.54(d)(3) authorizes the submission of U.S.
Treasury securities in lieu of surety bond, in accordance with 31
U.S.C. 9303. It specifies that the lessee using such Treasury
securities shall also submit authorization for the Regional Director to
sell such securities upon the lessee's default on its lease
obligations.
The MMS is concerned that, should the lessee file for bankruptcy
and MMS merely have a security interest in the Treasury securities, it
will not be able to obtain prompt access to funds to provide for
remediation of leaking wells and or other critical environmental
problems. In that event, the Treasury bills or notes will not give MMS
the same assurance of timely performance of lease obligations that a
surety bond provides. Accordingly, MMS is exploring with the Department
of the Treasury alternative procedures under which the lessee would
transfer title to its book-entry Treasury bills to MMS or a third-party
escrow agent, so that the bills would not be property of the bankruptcy
estate in the event of insolvency. The MMS requests comments on its
alternative approach which it may adopt in the final version of this
rule.
Section 256.55 General Terms and Conditions of Bond
Proposed new Sec. 256.55 would establish general terms and
conditions of a bond and includes language which specifies that bonds
are to be payable to the MMS Regional Director and conditioned upon
compliance with all terms and conditions of the OCS oil and gas or
sulphur leases and governing regulations. Lessees or sureties may
propose alternate forms of bond for the Director's approval but should
submit therewith an opinion of qualified counsel that the proposed bond
form provides security equivalent to that of the standard MMS bond
forms.
Proposed Sec. 256.55(d) adds a requirement that the lessee give
prompt notice to the Regional Director of any action alleging the
insolvency or bankruptcy of the surety or alleging any matter which
could result in suspension or revocation of the surety's charter or
license to do business.
Section 256.56 Lease-Specific Abandonment Accounts
Proposed new Sec. 256.56, Lease-specific abandonment accounts,
establishes regulatory guidance for the establishment of lease-specific
abandonment accounts in addition to the Treasury pledge accounts
currently established to permit lessees to fund end-of-lease
abandonment and clearance costs through scheduled payments into a
lease-specific escrow account dedicated to lease abandonment and
cleanup.
Section 256.57 Third-Party Guarantee
The third-party guarantee provisions of proposed Sec. 256.57 would
establish a regulatory framework for identifying some of the criteria
that the Regional Director would use to approve a third-party guarantee
of a lessee's compliance with its lease obligations and for
establishing how MMS will obtain needed information.
Section 256.58 Termination of the Period of Liability and Cancellation
of a Bond
Proposed new Sec. 256.58(a) provides for termination of the period
of liability under a bond and allows the Regional Director to permit a
lessee to replace existing bonds with other forms of security that
provide equivalent protection. Replacement of a bond pursuant to
Sec. 256.58(b) would conditionally release the existing bond.
Section 256.59 Forfeiture of Bonds and/or Other Securities
Proposed new Sec. 256.59 specifies that if a lessee refuses or is
unable to comply
[[Page 63014]]
with lease terms or if the lessee defaults on the conditions under
which a bond and other security was accepted, the Regional Director
will take action to forfeit all or part of a bond or other security.
Section 256.62 Assignment of Leases or Interests Therein
Under the proposed rulemaking, Sec. 256.62 would be modified to
clarify and make explicit existing authority that--
(1) The approval of a lease assignment is subject to the lessee
furnishing bond coverage pursuant to the revised bonding requirements.
(2) Having a lease assignment become effective any date other than
the first day of the lease month following the filing of documents is
at the discretion of the Regional Director.
(3) Approval of an assignment by the Regional Director does not
relieve the assignor of accrued lease obligations if the assignee
subsequently fails to perform.
(4) Approval of an assignment will not be given until the assignee
submits an acceptable level of surety coverage.
(5) When the lessee is not the sole lessee, the Regional Director
will look first to the designated operator to perform lease
obligations, but all lessees are jointly and severally liable for their
performance.
(6) The assignee assumes a responsibility to remedy all existing
environmental problems on the tract and to properly abandon all wells
and reclaim the lease site.
Section 256.64 Requirements for Filing Transfers
Under the proposed rulemaking, Sec. 256.64 would be modified to
clarify that--
(1) Neither the transfer of operating rights, nor the creation of a
sublease(s), releases the lessee from performance of any obligation
under any lease or under any regulation.
(2) The lessee(s) are jointly and severally liable with sublessees
and operating rights owners (to the extent of their interests) for the
performance of each obligation under the lease and under the governing
regulations with each party holding an interest at the time the
obligation was accruing.
The provisions of these proposed rules have been designed to meet
the objectives to: (1) ensure lessee's financial capability to perform
lease obligations, (2) protect the environment from threat of harm
which might result from a lessee's failure to timely carry out proper
well abandonment and site clearance operations on a lease, (3) achieve
a reasonable degree of protection at a minimum increase in costs to the
lessee or lease operator, and (4) select a method of attaining these
goals which impact equitably on all parties who would be affected.
The MMS does not have authorized funds available to use to correct
a noncompliance or default when the cost of corrective action exceeds
the funds available under a forfeited bond and other security.
Author: This document was prepared by Gerald D. Rhodes, Engineering
and Technology Division, MMS.
Executive Order (E.O.) 12866
This proposed rule is not a significant rule under E.O. 12866.
Regulatory Flexibility Act
The Department of the Interior (DOI) has determined that this
proposed rule will not have a significant effect on a substantial
number of small entities because, in general, the entities that engage
in offshore exploration, development, and production activities
including pipeline transportation across the OCS are not considered
small due to the technical expertise, financial resources, and
experience necessary to safely conduct such activities in an
environmentally responsible manner.
Paperwork Reduction Act
This proposed rule does not contain new information collection
requirements which require approval by the Office of Management and
Budget (OMB). The information collection requirements in 30 CFR part
256 are approved by OMB under approval No. 1010-0006.
Takings Implication Assessment
The DOI certifies that this proposed rule does not represent a
governmental action capable of interference with constitutionally
protected property rights. Thus, a Takings Implication Assessment need
not be prepared pursuant to E.O. 12630, Government Action and
Interference with Constitutionally Protected Property Rights.
E.O. 12778
The DOI has certified to OMB that this proposed rule meets the
applicable civil justice reform standards provided in Sections 2(a) and
2(b)(2) of E.O. 12778.
National Environmental Policy Act
The DOI determined that this action does not constitute a major
Federal action significantly affecting the quality of the human
environment; therefore, an Environment Impact Statement is not
required.
List of Subjects
30 CFR Part 250
Continental shelf, Environmental impact statements, Environmental
protection, Government contracts, Incorporation by reference,
Investigations, Mineral royalties, Oil and gas development and
production, Oil and gas exploration, Oil and gas reserves, Penalties,
Pipelines, Public lands--mineral resources, Public lands--rights-of-
way, Reporting and recordkeeping requirements, Sulphur development and
production, Sulphur exploration, Surety bonds.
30 CFR Part 251
Continental shelf, Freedom of information, Oil and gas exploration,
Public lands--mineral resources, Reporting and recordkeeping
requirements, Research.
30 CFR Part 256
Administrative practice and procedure, Continental shelf,
Government contracts, Incorporation by reference, Oil and gas
exploration, Public lands--mineral resources, Reporting and
recordkeeping requirements, Surety bonds.
Dated: September 5, 1995.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.
For the reasons set forth in the preamble, MMS proposes to amend 30
CFR parts 250, 251, and 256 as follows:
PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER
CONTINENTAL SHELF
1. The authority citation for part 250 is revised to read as
follows:
Authority: 43 U.S.C. 1334.
2. In Sec. 250.110, the existing paragraph is designated as
paragraph (a) and a new paragraph (b) is added to read as follows:
Sec. 250.110 General requirements.
* * * * *
(b) The obligations to plug and abandon wellbores, remove platforms
or other facilities, and to clear the ocean of obstructions accrue when
the well is drilled, the platform or other facility is installed, or
the obstruction is created and continue until the requirements of
subpart G are fully accomplished. These obligations are the joint and
several responsibility of all lessees.
3. In Sec. 250.159, paragraph (b)(1) is revised to read as follows:
[[Page 63015]]
Sec. 250.159 General requirements for a pipeline right-of-way grant.
* * * * *
(b) (1) When applying for a right-of-way grant, the applicant or
the right-of-way holder shall provide the surety bonds described in
this section in addition to the bonds required of a lessee in 30 CFR
part 256.
(i) Each applicant or holder of a right-of-way shall furnish the
Regional Supervisor a $300,000 corporate surety bond conditioned on
compliance with the terms of all right-of-way grants held by the
applicant in the Outer Continental Shelf (OCS) area in which the right-
of-way is located.
(ii) If the Regional Director determines that a surety bond in
excess of $300,000 is necessary to cover the costs and liabilities of
compliance with the terms of the right-of-way, he/she may require the
applicant or the holder of the right-of-way to submit additional
security in the form of a supplemental bond or an increase in the
amount of the existing surety bond.
* * * * *
PART 251--GEOLOGICAL AND GEOPHYSICAL (G&G) EXPLORATIONS OF THE
OUTER CONTINENTAL SHELF
4. The authority citation for part 251 is revised to read as
follows:
Authority: 43 U.S.C. 1331 et seq.
5. Section 251.6-4 is revised to read as follows:
Sec. 251.6-4 Bonds.
(a) Before the Minerals Management Service (MMS) will issue a
permit authorizing the drilling of a deep stratigraphic test well, the
applicant must either:
(1) Furnish MMS a bond of not less than $200,000 conditioned on
compliance with the terms of the permit; or
(2) Maintain with or furnish to MMS a $1 million bond conditioned
on compliance with the terms of the permit issued to him/her for the
area of the OCS where the applicant proposes to drill a deep
stratigraphic test.
(b) If the Regional Director determines that security in excess of
$1 million is needed, he/she may require the permittee to provide
additional security in the form of a supplemental bond or bonds or an
increase in the amount of the existing surety bond.
(c) The Director of MMS may require the submission of a bond before
authorizing shallow test drilling.
(d) Any bond furnished shall be on a form approved or prescribed by
the Director, MMS.
PART 256--LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER
CONTINENTAL SHELF
6. The authority citation for part 256 is revised to read as
follows:
Authority: 43 U.S.C. 1331 et seq.
7. Section 256.58 is redesignated as Sec. 256.52.
8. Newly designated Sec. 256.52 is amended by revising the heading
and paragraphs (a), (c), (d), (f), and (g); and by adding a new
paragraph (i) to read as follows:
Sec. 256.52 Requirement to file a bond.
(a) Before an oil and gas or sulphur lease will be issued the
successful bidder must:
(1) Furnish the Regional Director a $50,000 lease surety bond,
conditioned on compliance with all the terms and conditions of the
lease;
(2) Maintain or furnish a $300,000 areawide bond, issued by a
qualified surety and conditioned on compliance with all the terms and
conditions of oil and gas and sulphur leases held by the bidder in the
OCS for the area in which the lease to be issued is situated;
(3) Maintain or furnish an areawide bond under Sec. 256.53 (a)(2)
or (b)(2) of this part; or
(4) Furnish a substitute security instrument in accordance with
paragraphs (f) and (g) of this section.
* * * * *
(c) The lessee shall maintain a separate areawide surety bond as
required by paragraph (a) of this section for each of the areas
identified in paragraph (b) of this section.
(1) If the Regional Director approves, the lessee may substitute
for its bond either:
(i) An operator's bond in the same amount as the lease bond
required under paragraph (a); or
(ii) Alternate security instruments as provided in paragraphs (f)
and (g) of this section.
(2) The lessee(s)' substitution of an operator's bond or an
alternate form of security for its bond does not relieve the lessee(s)
of its (their) obligation to comply with all the terms and conditions
of the lease.
(d) If a default causes the surety or other guarantor to pay the
United States any indebtedness under a lease secured by a bond or
alternate form of security, the face amount of the bond or alternate
form of security and the surety's liability will be reduced by the
amount of the payment.
* * * * *
(f) U.S. Department of the Treasury (Treasury) securities (U.S.
Bonds or Notes) may be submitted in lieu of a bond, provided the
Treasury instrument or legal tender submitted is negotiable at the time
of submission for an amount of cash equal to the value of the required
bond. The entity submitting Treasury instruments under this paragraph
is responsible for monitoring the value of those instruments. If the
value of those instruments falls below the level of bond required, the
entity must submit additional Treasury instruments or legal tender to
raise the value of the securities held by MMS to the value of the
required bond.
(g) As provided in Sec. 256.54, the Regional Director may accept
alternate types of security instruments in lieu of the surety bonds
required by this section if he/she determines that the interests of the
Government are protected to the same extent that these interests would
be protected by the required surety bond.
* * * * *
(i) Any time that a lease is not in compliance with bonding
requirements of this subpart, the Regional Director will notify the
lessee in writing and specify a reasonable period, not to exceed 90
days, to post an adequate bond.
(1) If an adequate bond or other guarantee is not provided by the
end of the period allowed, the lessee shall cease mineral production,
unless the Regional Director authorizes continued production from the
lease to avoid premature lease abandonment or damage to the environment
or to the producing reservoir(s).
(2) The lessee shall immediately begin preparation for lease
abandonment and clearance and shall submit to the Regional Director its
plans for paying outstanding royalty underpayments and for meeting all
regulatory and lease requirements.
(3) Mineral production shall not resume until the Regional Director
determines that an adequate bond has been posted or other guarantee
provided.
(4) When the Regional Director authorizes continued production
under this section, the net proceeds from that production, less the
royalties paid to the United States, shall be paid into one or more
lease-specific abandonment accounts approved by the Regional Director.
9. Section 256.61 is redesignated as Sec. 256.53; paragraphs
(a)(1), (b)(1), and (d) are revised; and paragraphs (a) introductory
text, (b) introductory text, (e), (f), and (g) are added to read as
follows:
[[Page 63016]]
Sec. 256.53 Additional bonds.
(a) Activities under an Exploration Plan (EP).
(1) When submitting a proposed EP, when submitting a proposed
assignment of a lease with an approved EP, or 2 years after publication
of a final rule, whichever is earliest, a lessee must submit a $200,000
surety bond issued by a qualified surety and conditioned on compliance
with all the terms and conditions of the lease shall be furnished to
the Regional Director. Approval of the EP or assignment shall be
conditioned upon receipt of a $200,000 lease surety bond, unless the
Regional Director authorizes the submission of the $200,000 lease
exploration bond after the submission of the EP but before approval of
drilling activities under the EP. This bond coverage may be provided by
increasing the bond coverage provided in Sec. 256.52(a) of this part.
(2) * * *
(b) Operations under a Development and Production Plan (DPP) or a
Development Operations Coordination Document (DOCD).
(1) When submitting a proposed DPP or DOCD, when submitting a
proposed assignment of a lease with an approved DPP or DOCD, or 2 years
after publication of a final rule, whichever is earliest, a lessee must
submit a $500,000 surety issued by a qualified surety and conditioned
on compliance with all the terms and conditions of the lease shall be
furnished to the Regional Director. Approval of a DPP, a DOCD, or an
assignment of a lease with an approved DPP or DOCD shall be conditioned
on receipt of a $500,000 lease surety bond, unless the Regional
Director authorizes the submission of the $500,000 lease development
bond after the submission of the DPP or DOCD, but prior to the approval
of platform installation or drilling activities under the approved DPP
or DOCD. The lessee may provide this additional bond by submission of a
new bond or by increasing the lease bond coverage provided under
paragraph (a) of this section.
(2) * * *
* * * * *
(d) The Regional Director may require additional security (i.e.,
security over and above the amounts prescribed in Secs. 256.52(a) and
256.53 (a) and (b) of this part) in the form of a supplemental bond or
bonds or increased amount of coverage of an existing surety bond when
he/she determines that additional security is necessary to cover
royalty due the Government, penalties and interest assessed against the
lessee, and/or costs and liabilities of the lessee for regulatory
compliance. The Regional Director shall base the decision on an
evaluation of the ability of the lessee to carry out its present and
future financial obligations as demonstrated by factors such as:
(1) Financial capacity substantially in excess of existing and
anticipated lease and other obligations (e.g., costs of well
abandonment and platform removal, amount of underpaid royalties, and
penalties and interest assessed by the Government), as evidenced by
audited financial statements (including auditor's certificate, balance
sheet, and profit and loss sheet);
(2) Projected financial strength as evidenced by existing OCS
production and proven reserves of future production valued
significantly in excess of existing and future lease obligations;
(3) Business stability as evidenced by 5 years of continuous
operation and production of oil and gas or sulphur in the OCS or in the
onshore oil and gas industry;
(4) Reliability in meeting obligations as evidenced by:
(i) Credit rating; or
(ii) Trade references including names and addresses of other
lessees, drilling contractors, and suppliers with whom lessee has
dealt; and
(5) Record of compliance with laws, regulations, and lease terms.
(e) The amount of the bond shall be sufficient to ensure the
compliance with all lease terms and conditions, including any
outstanding underpayment of royalty and cumulative end-of-lease
obligations to abandon wells, remove platforms and facilities, and
clear the seafloor in the event of default. The Regional Director will
determine the amount of supplemental bond required based on an analysis
conducted by MMS. The lessee may submit data for consideration by MMS.
(f) The Regional Director may adjust the amount of supplemental
bond or deposit required and the terms for the acceptance of the
lessee's bond if the liability for outstanding underpaid royalties and
end-of-lease abandonment and clearance either increases or decreases.
The Regional Director shall:
(1) Notify the lessee and the surety of any proposed adjustment to
the amount of bond required; and
(2) Give the lessee an opportunity to submit written or oral
comment on the adjustment.
(g) A lessee may request a reduction of the amount of supplemental
bond required by submitting to the Regional Director evidence
demonstrating that the projected royalties and costs of end-of-lease
abandonment and clearance of the seafloor are less than the specified
bond coverage.
10. Section 256.59 is redesignated as Sec. 256.54 and revised to
read as follows:
Sec. 256.54 Bond form.
(a) All bonds must be on a form or in a form approved by the
Director. Bonds submitted after November 26, 1993, must be issued by a
qualified surety certified by the U.S. Treasury as an acceptable surety
on Federal bonds and listed in the current U.S. Treasury Circular No.
570 which is available from the Surety Bond Branch, Financial
Management Service, Department of the Treasury, 401 14th Street SW.,
Washington, D.C. 20227.
(b) A surety bond must be executed by the lessee and a qualified
surety.
(c) Surety bonds must be noncancellable.
(d) Lease bonds must be:
(1) A surety bond;
(2) A lease-specific abandonment account in accordance with
Sec. 256.56;
(3) United States Treasury securities negotiable for an amount
equal to the amount of bond required, accompanied by a conveyance of
full authority to the Secretary to sell the securities in case of
default;
(4) A combination of these security methods; or
(5) Another form of security approved by the Regional Director.
11. Sections 256.55, 256.56, 256.57, 256.58, and 256.59 are added
to read as follows:
Sec. 256.55 General terms and conditions of bond.
(a) The Regional Director shall determine the amount of the lease
bond as provided in Secs. 256.52 and 256.53 of this part.
(b) A lease bond must be payable to MMS.
(c) A lease bond shall be conditioned upon compliance with all the
terms and conditions of the lease and governing regulations.
(d) Lessees must notify the Regional Director of any action filed
alleging the insolvency or bankruptcy of the lessee, a surety company,
or a third-party guarantor. The lessee shall notify the Regional
Director within 72 hours of any such action filed or within 72 hours of
learning of an action that involves a company other than the lessee.
Lease bonds must require the surety to provide this information to the
lessee and directly to MMS.
(e) Upon the incapacity of a surety company by reason of
bankruptcy, insolvency, or suspension or revocation of its charter or
license, the lessee is deemed to be without bond coverage
[[Page 63017]]
and must promptly notify the Regional Director.
Sec. 256.56 Lease-specific abandonment accounts.
(a) The Regional Director may authorize the lessee or guarantor to
supplement its bond(s) by establishing a lease(s)-specific abandonment
account in one or more federally insured accounts made payable upon
demand to the Regional Director. The total security, including the
lease-specific abandonment account(s), shall not be less than the
amount required to meet outstanding underpayments of royalty and
lessee's end-of-lease abandonment and clearance obligations.
(b) Any interest paid on an abandonment account shall be retained
in the account unless the Regional Director approves the payment of the
interest to the lessee or guarantor.
(c) When authorized by the Regional Director, U.S. Treasury
obligations may be substituted for payments into an abandonment
account.
(d) An individual abandonment account shall not contain more than
$100,000 or the maximum insurable amount as determined by the Federal
Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation.
(e) The Regional Director may require the lessee to make an
overriding royalty or production payment into an escrow account. The
required overriding royalty or payment out of production may be
associated with production from a lease(s) other than the lease(s)
bonded through the escrow account.
Sec. 256.57 Third-party guarantee.
(a) The Regional Director may accept a third party's written
guarantee as surety for a lessee's lease obligations, following a
review of:
(1) The period of time that the guarantor has been in continuous
operation as a business entity;
(i) Continuous operation is the time that business was conducted
immediately preceding the posting of a guarantee.
(ii) Continuous operation excludes periods of interruption in
operations that were beyond the guarantor's control and that do not
affect the guarantor's likelihood of remaining in business during lease
exploration, development, production, abandonment, and clearance
operations.
(2) Financial information available in the public record or
submitted by the guarantor, on its own initiative, in sufficient detail
to show to the Regional Director's satisfaction that the guarantor is
qualified based on:
(i) The guarantor's current rating for its most recent bond
issuance by either Moody's Investor Service or Standard and Poor's
Corporation;
(ii) The guarantor's net worth taking into account liabilities
under this and other guarantees.
(iii) The guarantor's ratio of current assets to current
liabilities taking into account liabilities under this and other
guarantees; and
(iv) The guarantor's unencumbered fixed assets in the United
States.
(3) When the information required by paragraph (2) is not publicly
available, the guarantor may submit the information voluntarily. If
this is done, the guarantor must update the information annually within
90 days of the end of the fiscal year or as otherwise approved by the
Regional Director. The information should include:
(i) Financial statements for the most recently completed fiscal
year accompanied by a report prepared by an independent certified
public accountant in conformance with generally accepted accounting
principles and containing the accountant's audit opinion or review
opinion of the financial statements, with no adverse opinion;
(ii) Financial statements, certified to be correct by the
guarantor's financial officer, for completed quarters in the current
fiscal year; and
(iii) Additional information, certified to be correct by the
guarantor's financial officer, as requested by the Regional Director.
(b) The terms of a third-party guarantee shall provide for the
following:
(1) If the lessee fails to comply with any governing lease term,
the guarantor shall take corrective actions or be liable under the
indemnity agreement to provide funds to the Regional Director
sufficient to complete the required corrective action.
(2) If the guarantor wishes to terminate the period of liability
under a third-party guarantee it must:
(i) Notify the Regional Director and the lessee at least 90 days
before the proposed termination date; and
(ii) Obtain the Regional Director's approval for the termination of
the period of liability for all or a specified portion of its
guarantee.
(3) The lessee must obtain a suitable replacement security
instrument before the proposed termination date or if no activities
have taken place on the lease(s) for which the guarantee was approved,
before any activities take place.
(c) The total amount of all outstanding and proposed guarantees by
the guarantor must not exceed 25 percent of that guarantor's
unencumbered net worth in the United States.
(d) If the Regional Director approves a third-party guarantee, the
guarantor must submit an indemnity agreement.
(1) The indemnity agreement shall be executed by all persons and
parties who are to be bound by it, including the guarantor, and shall
bind each jointly and severally.
(2) Two corporate officers who are authorized to bind their
corporation must sign the indemnity agreement.
(3) The guarantor must provide the Regional Director copies of:
(i) The authorization of the signatory officials to bind the
corporation;
(ii) An affidavit certifying that the agreement is valid under all
applicable laws; and
(iii) The corporate authorization, demonstrating that the
corporation can guarantee the obligation and execute the indemnity
agreement.
(4) if the third-party guarantor is a partnership, joint venture,
or syndicate, the agreement shall:
(i) Bind each partner or party who has a beneficial interest,
directly or indirectly, in the guarantor; and
(ii) Provide that, if the third-party guarantee is forfeited, each
partner or party shall be jointly and severally liable for compliance
with all terms and conditions of the lease(s).
(5) Pursuant to Sec. 256.59 of this chapter, the guarantor shall
bring the lease into compliance or pay the Regional Director the amount
necessary to bring the lease into compliance. The indemnity agreement,
upon default by the lessee or operator, shall operate as a judgment
against those parties liable under the indemnity agreement.
(e) If during the life a third-party guarantee the guarantor no
longer meets the criteria of paragraphs (a)(3) and (c) of this section,
the lessee must:
(i) Notify the Regional Director immediately; and
(ii) Bring the lease into compliance with the requirements of this
subpart within 90 days.
Sec. 256.58 Termination of the period of liability and cancellation of
a bond.
(a) The Regional Director shall terminate the period of liability
under a bond upon the request of the surety and demand a replacement
bond of equivalent amount from the lessee. The termination of the
period of liability under a bond does not constitute release of the
bond. The surety continues to be responsible for all obligations and
liabilities accruing before the effective date of the termination of
the period of liability.
(b) The Regional Director will cancel or release a bond as to
obligations that
[[Page 63018]]
accrued before the cancellation only upon:
(1) Being furnished a replacement bond in which the surety agrees
to assume all outstanding liabilities under the bond to be cancelled,
in an amount equal to or greater than the amount of the bond to be
cancelled; or
(2) The determination that all outstanding obligations have been
fulfilled. Such cancellation shall be by a written instrument that
subjects the bond to automatic reinstatement, as if no cancellation had
occurred, if at any time within 6 years of such cancellation:
(i) Any payment made by the principal(s) is rescinded or must be
restored due to insolvency, bankruptcy, reorganization, or
receivership; or
(ii) The principal's representation to MMS that it has paid its
financial obligations or performed the other obligations of the lease
in accordance with MMS specifications is materially false at the time
of cancellation.
(c) Failure of the lessee to replace a deficient bond could result
in penalties under subpart N of part 250 of this Title or suspension of
production or other operations in accordance with Sec. 250.10.
Sec. 256.59 Forfeiture of bonds and/or other securities.
(a) If a lessee refuses or is unable to comply with lease terms or
defaults on the conditions under which a bond, third-party guarantee,
and/or other form of security was accepted, the Regional Director
shall:
(1) Notify in writing the lessee, third-party guarantor, and any
surety on the bond or other form of guarantee of the determination to
call or forfeit all or part of the bond or guarantee, the reasons for
the forfeiture, and the amount to be forfeited. The amount shall be
based on the estimated total cost of correcting the lessee's
noncompliance or default.
(2) Advise the lessee, third-party guarantor, and any surety that
they can avoid forfeiture by:
(i) Agreeing to correct the noncompliance or default and
demonstrating that they have the ability to do so; or
(ii) Agreeing that the surety will complete actions required for
compliance in accordance with a schedule that meets the conditions of
the lease and governing regulations if the surety can demonstrate the
ability to carry out the action required.
(b) If there is a default, the Regional Director may cause the
forfeiture of any and all bonds or other security deposited on
condition of compliance with all the terms and conditions of the lease
or leases.
(c) If forfeiture of the bond or security is required by this
section, the Regional Director shall:
(1) Collect the forfeited amount, and
(2) Use funds collected from bond or security forfeiture to correct
the noncompliance or default.
(d) If the amount forfeited is insufficient to pay for the full
cost of corrective actions:
(1) the lessee(s) and any third-party guarantor(s) are jointly and
severally liable for the remaining costs of obtaining full compliance
with the terms and conditions of the lease, and
(2) The Regional Director may take or authorize required corrective
action to obtain full compliance and may recover from the lessee(s) and
any third-party guarantor(s) all costs in excess of the amount
forfeited.
(3) If the amount of bond or security forfeited exceeds the total
costs of the corrective actions required to obtain compliance, the
Regional Director shall return the excess amount to the party from whom
it was collected.
12. In Sec. 256.62, paragraphs (a), (d), and (e) are revised, and
paragraph (f) is added to read as follows:
Sec. 256.62 Assignment of leases or interests therein.
(a) Subject to the approval of the Regional Director and the
furnishing of bond coverage pursuant to the requirements of subpart I
of this part, leases, or any undivided interests therein, may be
assigned in whole, or as to any officially designated subdivision, to
anyone qualified under Sec. 256.35(b) of this part to hold a lease.
* * * * *
(d) The assignor is liable for all obligations under the lease
accruing before the approval of the lease assignment. Approval of the
assignment by the Regional Director does not relieve the assignor of
accrued lease obligations which the assignee subsequently fails to
perform.
(e) After the Regional Director approves a lease assignment, the
assignee is liable for all obligations under the lease and must comply
with all regulations issued under the Act. The assignee must remedy all
existing environmental problems on the tract, properly abandon all
wells, and reclaim the lease site in accordance with part 250, subpart
G. Before MMS approves an assignment, the assignee must submit
acceptable bond coverage as required by Secs. 256.52 and 256.53 of this
part.
(f) Where there is more than one lessee, the lessees are jointly
and severally responsible for performing the obligations of the lease,
unless provided otherwise in these regulations. The Regional Director
will look to the designated operator to perform lessee obligations
under any lease and under any regulations in this chapter. Should the
operator fail or be unable to perform any obligation of the lessee(s),
the Regional Director will require any or all the lessee(s) to bring
the lease into compliance. If there is no lessee able to perform, the
Regional Director will require prior lessees to bring the lease into
compliance to the extent that the obligation accrued before assignment.
13. In Sec. 256.64, paragraphs (a)(1), (c), and (g) are revised to
read as follows:
Sec. 256.64 Requirements for filing transfers.
(a) All instruments of transfer of a lease or of an interest
therein as to any officially designated subdivision, including
operating rights, subleases and record title interests, shall be
submitted in duplicate to the Regional Director for approval within 90
days from the date of final execution. Instruments of transfer shall
include a statement over the transferee's own signature with respect to
citizenship and qualifications similar to that required of a lessee and
shall contain all of the terms and conditions agreed upon by the
parties thereto.
(1) Neither the transfer of operating rights or creation of a
sublease(s) releases the lessee from any obligation under the lease or
regulations.
(2) The assignment of record title interests does not release the
lessee from any accrued obligation under any lease or regulations.
(3) Carried working interests, overriding royalty interests, or
payments out of production may be created or transferred without filing
an approval.
* * * * *
(c) Where an assignment is of all the lease title interest in a
lease or creates a segregated lease, the assignee must furnish a bond
in the amount prescribed in Secs. 256.52 and 256.53 of this part. Where
an assignment is of less than all the lease title and the assignment
does not create separate leases, the assignee, if the assignment
provides and the surety consents, may become a joint principal on the
bond with the assignor.
* * * * *
(g) Each obligation under any lease and under the regulations in
this part binds the heirs, executors, administrators, successors, and
assignees of the lessee. Except as otherwise provided in the
regulations in this chapter, the lessee(s) (and to the extent of their
interests, sublessees and operating rights owners) are jointly and
severally liable for the performance of each obligation under the lease
and
[[Page 63019]]
under the governing regulations with each prior lessee and operating
rights owner holding an interest when the obligation was accruing.
* * * * *
[FR Doc. 95-29864 Filed 12-07-95; 8:45 am]
BILLING CODE 4310-MR-M
Complete official Federal Register PDF
FR Doc. 95-29552 Elementary-Secondary Staff Information Report EEO-5
[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Proposed Rules]
[Pages 63010-63011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29552]
=======================================================================
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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
29 CFR Part 1602
Elementary-Secondary Staff Information Report EEO-5
AGENCY: Equal Employment Opportunity Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Equal Employment Opportunity Commission (EEOC) has voted
to discontinue the requirement for filing he Elementary-Secondary Staff
Information Report EEO-5 for individual schools and annexes within
school systems or districts. This proposed rule amends the school
filing requirement in subpart M of 29 CFR Part 1602. The recordkeeping
requirements for elementary and secondary public school systems and
districts, including individual schools and annexes, remain unchanged.
This action is being taken in the interest of streamlining the survey
process and reducing the burden on respondents, while maintaining
sufficient data to meet the EEOC's program needs. The change is planned
to become effective beginning with the 1996 EEO-5 survey.
DATES: Written comments on this proposed rule must be submitted on or
before February 6, 1996.
ADDRESSES: Comments should be submitted to Frances M. Hart, Executive
Officer, Executive Secretariat, Equal Employment Opportunity
Commission, 10th Floor, 1801 L Street, NW., Washington, DC 20507. As a
convenience to commentators, the Executive Secretariat will accept
comments transmitted by facsimile (``FAX'') machine. The telephone
number of the FAX receiver is (202) 663-4114. (This is not a toll free
number.) Only comments of six or fewer pages will be accepted via FAX
transmittal. This limitation is necessary to assure access to the
equipment. Receipt of FAX transmittals will not be acknowledged, except
that the sender may request confirmation of receipt by calling the
Executive Secretariat staff at (202) 663-4078 (voice) or (202) 663-4077
(TDD). (These are not toll-free numbers.) Copies of comments submitted
by the public will be available for review at the EEOC's library, Room
6502, 1801 L Street, NW., Washington, DC between the hours of 9:30 a.m.
and 5:00 p.m.
FOR FURTHER INFORMATION CONTACT:
Joachim Neckere, Director, Program Research and Surveys Division, at
(202) 663-4958 (voice) or (202) 663-7063 (TDD).
SUPPLEMENTARY INFORMATION: Section 709(c) of Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. 2000e-8(c), requires
employers to make and keep records relevant to a determination of
whether unlawful employment practices have been or are being committed
and to make reports therefrom as required by the EEOC. Accordingly, the
EEOC has issued regulations which set forth the reporting requirements
for various kinds of employers. Elementary and secondary public school
systems and districts have been required to submit EEO-5 reports to the
EEOC since 1974 (biennially in even numbered years since 1982). Two
types of EEO-5 reports have been used: EEOC Form 168A, covering the
entire public school system or district; and EEOC Form 168B, covering
each individual school and annex within the system or district.
EEO-5 data are used by the EEOC to investigate charges of
employment discrimination against elementary and secondary public
school systems and districts. The data are used to support EEOC
decisions and conciliations, and in systemic program activities. The
data also enhance the Commission's ability to perform research,
analysis, technical assistance, and public education. In addition, data
are shared with the Department of Education (Office for Civil Rights
and the National Center for Education Statistics) and the Department of
Justice. EEO-5 data also are shared with approximately 23 state and 56
local Fair Employment Practice Agencies.
On October 5, 1995, the EEOC voted to discontinue the EEO-5 Report
168B for individual schools and annexes. The primary reason for the
discontinuance of the reporting requirement for individual schools is
to reduce the reporting burden on respondents and to streamline the
collection of information required for enforcement purposes. The
recordkeeping requirements of subpart L of 29 CFR 1602, however, remain
in effect and unchanged.
Paperwork Reduction Act
This action will result in a reduced expense and reporting burden
for school systems and districts as required under the Paperwork
Reduction Act of 1995, 44 U.S.C. 3502(1). The reporting burden for this
collection is based upon an average estimate per response and takes
into consideration the large number of school systems and districts
that submit their reports on diskettes or magnetic tapes. Burden hours
for any particular school system or district may differ from this
average estimate depending on the accessibility of information and the
degree of automation. The burden estimate includes the time needed for
reviewing instructions, searching existing data sources, gathering and
maintaining the data, and completing and reviewing the collection of
information. Public comments on the accuracy of the burden estimates as
well as suggestions for further reducing the burden are welcome. The
EEOC has encouraged and will continue to encourage the use of magnetic
media (diskettes, computer tapes, etc.) as a means of submitting
information on the EEO-5 report.
(1) Type of review: Extension (Discontinuance of individual school
reports).
(2) Agency: Equal Employment Opportunity Commission.
(3) Title: Elementary-Secondary Staff Information (EEO-5).
(4) OMB Number: 0346-0003.
(5) Frequency: Biennially.
(6) Affected Public: State and Local Government.
(7) Number of Respondents: 5,000.
(8) Estimated Time Per Respondent: 5 Hours during a survey year.
(9) Total Burden Hours: 25,000 Hours.
The Office of Management and Budget (OMB) approval of the current
EEO-5 collection of information, OMB Control Number 0346-0003, will
expire on January 31, 1996. In order to comply with new information
collection clearance procedures that OMB has instituted pursuant to the
act, set forth at 29 CFR 1320.8, .9, and .11, the EEOC has obtained a
90 day extension of the current OMB collection approval in which to
notice the proposed change in the EEO-5 collection and also to notice
the extension.
[[Page 63011]]
Pursuant to 29 CFR 1320.8(d)(1), the EEOC solicits public comment
to enable it to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the EEOC's functions, including
whether the information will have practical utility;
(2) Evaluate the accuracy of the EEOC's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Regulatory Flexibility Act
The Commission certifies pursuant to 5 U.S.C. 605(b), enacted by
the Regulatory Flexibility Act, Pub. L. No. 96-354, that this proposed
change will not result in significant impact on small employers or
other entities because the change involves elimination of reporting
requirements, and that a regulatory flexibility analysis therefore is
not required. The Commission hereby publishes this proposed rule for
public information and comment. The rule appears below.
List of Subjects in 29 CFR Part 1602
Reporting and recordkeeping requirements.
Dated: November 30, 1995.
For the Commission.
Gilbert F. Casellas,
Chairman.
Accordingly, it is proposed to amend 29 CFR Part 1602 as follows:
1. The authority citation for part 1602 continues to read as
follows:
Authority: 42 U.S.C. 2000e-8, 2000e-12; 44 U.S.C. 3501 et seq.;
42 U.S.C. 12117.
Sec. 1602.41 [Amended]
2. Section 1602.41 is amended as follows:
(a) In the introductory text, in the first sentence, delete the
phrase ``and individual schools within such systems or district''.
(b) In the concluding text, in the first sentence, delete the
phrase, ``, or the individual school which is the subject of the
report, where more convenient,''
3. Section 1602.43 is revised to read as follows:
Sec. 1602.43 Commission's remedy for school systems' or districts'
failure to file report.
Any school system or district failing or refusing to file report
EEO-5 when required to do so may be compelled to file by order of a
U.S. district court, upon application of the Commission or the Attorney
General.
4. Section 1602.44 is revised to read as follows:
Sec. 1602.44 School systems' or districts' exemption from reporting
requirements.
If it is claimed that the preparation or filing of the report would
create undue hardship, the school system or district may apply to the
Commission for an exemption from the requirements set forth in this
part by submitting to the Commission or its delegate a specific
proposal for an alternative reporting system prior to the date on which
the report is due.
[FR Doc. 95-29552 Filed 12-7-95; 8:45 am]
BILLING CODE 6750-01-M
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