issue-1996-05-03•Federal Register proposed rules — 1996-05-03
Federal Register proposed rules — 1996-05-03
issue-1996-05-03Federal Register proposed rules — 1996-05-03Proposed Regulation
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FR Doc. 96-11170 Milk in the Carolina and Certain Other Marketing Areas; Notice of Hearing on Proposed Amendments to Tentative Marketing Agreements and Orders
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19861-19862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11170]
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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.
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Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Proposed
Rules
[[Page 19861]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1005, 1007, 1011 and 1046
[Docket No. AO-388-A9, et al.; DA-96-08]
Milk in the Carolina and Certain Other Marketing Areas; Notice of
Hearing on Proposed Amendments to Tentative Marketing Agreements and
Orders
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7 CFR part Marketing area Docket No.
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1005.............. Carolina................. AO-388-A9
1007.............. Southeast................ AO-366-A38
1011.............. Tennessee Valley......... AO-251-A40
1046.............. Louisville-Lexington- AO-123-A67
Evansville.
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AGENCY: Agricultural Marketing Service, USDA.
ACTION: Notice of public hearing on proposed rulemaking.
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SUMMARY: A public hearing is being held in response to industry
requests to amend four Southeastern Federal milk marketing orders. One
proposal would provide transportation credits for bulk milk that is
imported into these markets for fluid use. Mid-America Dairymen, Inc.,
the proponent of the proposed amendments, has requested that this issue
be handled on an emergency basis. A second proposal by Milkco, Inc.,
and Hunter Farms, Inc., would specify, in each of the four orders,
those costs which are the responsibility of the plant operator and that
may not, accordingly, be passed on to producers in any manner.
DATES: The hearing will convene at 9:00 a.m. on May 15, 1996.
ADDRESSES: The hearing will be held at the Sheraton Airport Plaza
Hotel, 3315 South I-85 at Bill Graham Parkway, Charlotte, North
Carolina, 28208. (Telephone: 704/392-1200).
FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist,
Order Formulation Branch, USDA/AMS/Dairy Division, Room 2971, South
Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932.
SUPPLEMENTARY INFORMATION: This administrative action is governed by
the provisions of sections 556 and 557 of Title 5 of the United States
Code and, therefore, is excluded from the requirements of Executive
Order 12866.
Notice is hereby given of a public hearing to be held at the
Sheraton Airport Plaza Hotel, 3315 South I-85 at Bill Graham Parkway,
Charlotte, North Carolina, 28208 beginning at 9:00 a.m., on May 15,
1996, with respect to proposed amendments to the tentative marketing
agreements and to the orders regulating the handling of milk in the
Carolina and certain other marketing areas.
The hearing is called pursuant to the provisions of the
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), and the applicable rules of practice and procedure governing the
formulation of marketing agreements and marketing orders (7 CFR Part
900).
The purpose of the hearing is to receive evidence with respect to
the economic and marketing conditions which relate to the proposed
amendments, hereinafter set forth, and any appropriate modifications
thereof, to the tentative marketing agreements and to the orders.
Evidence also will be taken to determine whether emergency
marketing conditions exist that would warrant omission of a recommended
decision under the rules of practice and procedure (7 CFR 900.12(d))
with respect to proposal number one. Since this proposal will be
handled on an emergency basis, it is necessary to provide interested
parties with less than 15 days notice of the public hearing to ensure
that the proposed amendments, if found to be appropriate, will be
effective by July 1, 1996.
Actions under the Federal milk order program are subject to the
Regulatory Flexibility Act (Pub. L. 96-354). This Act seeks to ensure
that, within the statutory authority of a program, the regulatory and
informational requirements are tailored to the size and nature of small
businesses. For the purpose of the Act, a dairy farm is a ``small
business'' if it has an annual gross revenue of less than $500,000, and
a dairy products manufacturer is a ``small business'' if it has fewer
than 500 employees. Most parties subject to a milk order are considered
as a small business. Accordingly, interested parties are invited to
present evidence on the probable regulatory and informational impact of
the hearing proposals on small businesses. Also, parties may suggest
modifications of these proposals for the purpose of tailoring their
applicability to small businesses.
The amendments to the rules proposed herein have been reviewed
under Executive Order 12778, Civil Justice Reform. They are not
intended to have a retroactive effect. If adopted, the proposed
amendments would not preempt any state or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Agricultural Marketing Agreement Act provides that
administrative proceedings must be exhausted before parties may file
suit in court. Under section 8c(15)(A) of the Act, any handler subject
to an order may file with the Secretary a petition stating that the
order, any provision of the order, or any obligation imposed in
connection with the order is not in accordance with the law and
requesting a modification of an order or to be exempted from the order.
A handler is afforded the opportunity for a hearing on the petition.
After a hearing, the Secretary would rule on the petition. The Act
provides that the district court of the United States in any district
in which the handler is an inhabitant, or has its principal place of
business, has jurisdiction in equity to review the Secretary's ruling
on the petition, provided a bill in equity is filed not later than 20
days after the date of the entry of the ruling.
Interested parties who wish to introduce exhibits should provide
the Presiding Officer at the hearing with four copies of such exhibits
for the Official Record. Also, it would be helpful if additional copies
are available for the use of other participants at the hearing.
List of Subjects in 7 CFR Parts 1005, 1007, 1011, and 1046
Milk marketing orders.
The authority citation for 7 CFR Parts 1005, 1007, 1011, and 1046
continues to read as follows:
[[Page 19862]]
PARTS 1005, 1007, 1011, 1046--[AMENDED]
Authority: 7 U.S.C. 601-674.
The proposed amendments, as set forth below, have not received the
approval of the Secretary of Agriculture.
Proposed by Mid-America Dairymen, Inc.
Proposal No. 1: Amend 7 CFR Parts 1005, 1007, 1011, and 1046 as
follows:
a. Amend Sec. 10XX.61 of each order by redesignating paragraph
(a)(4) as paragraph (a)(5), paragraph (a)(5) as paragraph (a)(6),
paragraph (b)(5) as paragraph (b)(6), paragraph (b)(6) as paragraph
(b)(7), and adding new paragraphs (a)(4) and (b)(5) to read as follows:
* * * * *
(a) * * *
(4) Deduct the amount by which the amount due to be paid from the
Hauling Credit Balancing Fund pursuant to Sec. 10XX.82 exceeds the
available balance in the Hauling Credit Balancing Fund pursuant to
Sec. 10XX.80.
* * * * *
(b) * * *
(5) Deduct the amount by which the amount due to be paid from the
Hauling Credit Balancing Fund pursuant to Sec. 10XX.82 exceeds the
available balance in the Hauling Credit Balancing Fund pursuant to
Sec. 10XX.80.
* * * * *
b. Add new Secs. 10XX.80, 10XX.81, and 10XX.82 to each order to
read as follows:
Sec. 10XX.80 Hauling credit balancing fund.
The market administrator shall maintain a separate fund known as
the Hauling Credit Balancing Fund into which he shall deposit the
payments made pursuant to the hauling credit balancing adjustment
specified in Sec. 10XX.82; Provided, That the market administrator
shall offset the payment due to a handler against payments due from
such handler.
Sec. 10XX.81 Payments to the hauling credit balancing fund.
(a) On or before the 12th day after the end of the month, each
handler shall pay to the market administrator the value, if any, of the
hauling credit balancing adjustment determined by multiplying the
pounds of Class I milk assigned pursuant to Sec. 10XX.44 by $0.03 per
hundredweight hauling credit balancing adjustment; Provided, That for
any of the months of July through December in which the balance in the
Hauling Credit Balancing Fund for the second preceding month is less
than the total value of the hauling credit balancing adjustments
applicable for the previous six months, then the hauling credit
balancing adjustment shall be $0.06 per hundredweight; Provided
Further, That for any of the months of January through June the hauling
credit balancing adjustment shall be zero for any month in which the
balance in the Hauling Credit Balancing Fund for the second preceding
month is greater than the total value of the hauling credit balancing
adjustments applicable during the previous six months.
(b) On or before the 13th day after the end of the month, the
market administrator shall credit the Hauling Credit Balancing Fund,
from the Producer Settlement Fund, any amount deducted pursuant to
Sec. 10XX.61 (a)(4) or (b)(5).
Sec. 10XX.82 Payments from the hauling credit balancing fund.
On or before the 13th day after the end of each of the months of
July through December, and any other month in which the classification
of producer milk allocated to Class I pursuant to Sec. 10XX.44 exceeds
80 percent, subtract the amount obtained by multiplying the pounds of
bulk fluid milk products that were transferred to the handler's pool
plant from an other order plant and allocated to Class I milk, by a
rate equal to 3.9 cents per hundredweight for each 10 miles or fraction
thereof less any difference (positive only) between the Class I
differential applicable at the receiving plant less the Class I
differential applicable at the shipping plant. Provided, That payments
may be assigned to any cooperative association which provides written
notice to the market administrator prior to the date payment is due.
Proposed by Milkco, Inc., and Hunter Farms, Inc.
Proposal No. 2: Amend Sec. 10XX.73 of 7 CFR Parts 1005, 1007, 1011,
and 1046 by adding a new paragraph (e) to read as follows:
Sec. 10XX.73 Payments to producers and to cooperative associations.
* * * * *
(e) A handler may not reduce its obligations hereunder to producers
or cooperatives by permitting producers or cooperatives to provide
``services which are the responsibility of the handler. The services
which are the responsibilities of the handler are:
(1) Preparation of producer payroll;
(2) Conduct of screening tests of tanker loads of milk required by
duly constituted regulatory authorities before milk may be transferred
to the plant's holding tanks and any other tanker load tests required
to establish the quantity and quality of milk received; and
(3) Any services for processing of raw milk or marketing of
packaged milk by the handler.
Proposed by the Dairy Division, Agricultural Marketing Service
Proposal No. 3: Make such changes as may be necessary to make the
entire marketing agreements and the orders conform with any amendments
thereto that may result from this hearing.
Copies of this notice of hearing and the orders regulating the
aforesaid marketing areas may be inspected at or procured from the
Hearing Clerk, Room 1083, South Building, United States Department of
Agriculture, Washington, DC 20250, or from the following market
administrators: Sue L. Mosley, Market Administrator, P.O. Box 1208,
Norcross, GA 30091-1208 (Tel: 770/448-1194); or Arnold M. Stallings,
Market Administrator, P.O. Box 18030, Louisville, KY 40261-0030 (Tel:
502-499-0040).
Copies of the transcript of testimony taken at the hearing will not
be available for distribution through the Hearing Clerk's Office. If
you wish to purchase a copy, arrangements may be made with the reporter
at the hearing.
From the time that a hearing notice is issued and until the
issuance of a final decision in a proceeding, Department employees
involved in the decision-making process are prohibited from discussing
the merits of the hearing issues on an ex parte basis with any person
having an interest in the proceeding. For this particular proceeding,
the prohibition applies to employees in the following organizational
units:
Office of the Secretary of Agriculture;
Office of the Administrator, Agricultural Marketing Service;
Office of the General Counsel;
Dairy Division, Agricultural Marketing Service (Washington office); and
Offices of the Market Administrators of the orders involved in this
proceeding.
Procedural matters are not subject to the above prohibition and may
be discussed at any time.
Dated: May 1, 1996.
Lon Hatamiya,
Administrator.
[FR Doc. 96-11170 Filed 5-2-96; 8:45 am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 96-11164 Extension of Port Limits of Columbus, OH
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19880-19881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11164]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 101
Extension of Port Limits of Columbus, OH
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Notice of proposed rulemaking; extension of comment period.
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SUMMARY: This notice extends the period of time within which interested
members of the public may submit comments concerning the proposal to
amend the Customs Regulations pertaining to the field organization of
[[Page 19881]]
Customs by extending the geographical limits of the port of Columbus,
Ohio, to include Rickenbacker Airport which is currently operating as a
user fee airport. The comment period is being extended another 30 days.
DATES: Comments are requested on or before May 31, 1996.
ADDRESSES: Comments (preferably in triplicate) may be addressed to the
Regulations Branch, U.S. Customs Service, Franklin Court, 1301
Constitution Avenue, N.W., Washington, D.C. 20229 and inspected at
Franklin Court, 1099 14th Street, N.W., Suite 4000, Washington, D.C.
FOR FURTHER INFORMATION CONTACT: Harry Denning, Office of Field
Operations, (202) 927-0196.
SUPPLEMENTARY INFORMATION: A document was published in the Federal
Register (61 FR 8001) on March 1, 1996, proposing to amend the Customs
Regulations pertaining to the field organization of Customs by
extending the geographical limits of the port of Columbus, Ohio, to
include Rickenbacker Airport which is currently operating as a user fee
airport. The document further stated that if the boundaries of the port
are extended as proposed, the Customs Regulations would also be amended
to remove Rickenbacker Airport's designation as a user fee airport.
Customs solicited comments on the proposal and comments were due by
April 30, 1996.
Customs has received a request to extend the comment period to
allow interested parties to have more time to consider the proposal as
the long-term economic development interests of the Greater Columbus
Community make it imperative that there be full consideration of the
proposal. Customs believes the request has merit. Accordingly, the
period of time for the submission of comments is being extended 30
days.
All comments submitted will be available for public inspection in
accordance with the Freedom of Information Act (5 U.S.C. 552), section
1.4, Treasury Department Regulations (31 CFR 1.4), and section
103.11(b), Customs Regulations (19 CFR 103.11(b)), between 9:00 a.m.
and 4:30 p.m. on normal business days, at the address stated above.
Dated: April 30, 1996.
Marvin M. Amernick,
Acting Assistant Commissioner, Office of Regulations and Rulings.
[FR Doc. 96-11164 Filed 5-02-96; 8:45 am]
BILLING CODE 4820-02-P
Complete official Federal Register PDF
FR Doc. 96-11094 Current Good Manufacturing Practice; Proposed Amendment of Certain Requirements for Finished Pharmaceuticals
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 20104-20115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11094]
[[Page 20103]]
_______________________________________________________________________
Part VIII
Department of Health and Human Services
_______________________________________________________________________
Food and Drug Administration
_______________________________________________________________________
21 CFR Parts 210 and 211
Current Good Manufacturing Practice: Amendment of Certain Requirements
for Finished Pharmaceuticals; Proposed Rule
Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Proposed
Rules
[[Page 20104]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 210 and 211
[Docket No. 95N-0362]
RIN 0910-AA45
Current Good Manufacturing Practice; Proposed Amendment of
Certain Requirements for Finished Pharmaceuticals
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
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SUMMARY: The Food and Drug Administration (FDA) is proposing to amend
certain requirements of the current good manufacturing practice (CGMP)
regulations for finished pharmaceuticals. These amendments would
clarify certain manufacturing, quality control, and documentation
requirements and would ensure that the regulations more accurately
encompass CGMP. In addition, the agency is updating the requirements
for process and methods validation to incorporate guidance previously
issued to industry and to reflect current practice. These proposed
amendments are intended to enhance the integrity of the drug
manufacturing process and the safety of drug products.
DATES: Submit written comments on the proposed rule by August 1, 1996.
Submit written comments on the information collection requirements by
June 3, 1996. FDA proposes that any final rule that may issue based
upon this proposal become effective 90 days after its date of
publication in the Federal Register.
ADDRESSES: Submit written comments to the Dockets Management Branch
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23,
Rockville, MD 20857. Submit written comments on the information
collection requirements to the Office of Information and Regulatory
Affairs, OMB, New Executive Office Bldg., 725 17th St. NW., rm. 10235,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT:
Thomas C. Kuchenberg, Center for Drug Evaluation and Research (HFD-
7), Food and Drug Administration, 7500 Standish Pl., Rockville, MD
20855, 301-594-1046; or
John M. Dietrick, Center for Drug Evaluation and Research (HFD-
325), Food and Drug Administration, 7500 Standish Pl., Rockville, MD
20855, 301-594-0098; or
William G. Marnane, Center for Veterinary Medicine (HFV-143), Food
and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-
594-0678; or
Nancy Roscioli, Center for Biologics Evaluation and Research (HFM-
205), Food and Drug Administration, 1401 Rockville Pike, Rockville, MD
20852-1448, 301-827-3031.
To obtain a copy of this document, contact the Division of
Congressional and Public Affairs (HFM-44), Center for Biologics
Evaluation and Research, Food and Drug Administration, 1401 Rockville
Pike, Rockville, MD 20852-1448. Send one self-addressed adhesive label
to assist that office in processing your requests.
The document may also be obtained by mail or FAX by calling the
Center for Biologics Evaluation and Research Voice Information System
at 1-800-835-4709.
Persons with access to the INTERNET may obtain the document in
several ways.
Users of ``Web Browser'' software, may obtain this document via the
World Wide Web by using the following Uniform Resource Locators
(URL's): http://www.fda.gov/cber/cberftp.html or ftp://ftp.fda.gov/
CBER/
The document may also be obtained via File Transfer Protocol (FTP).
Requesters should connect to the FDA FTP Server,
FTP.FDA.GOV(192.73.61.21). The Center for Biologics Evaluation and
Research (CBER) documents are maintained in a subdirectory called
``CBER'' on the server. Logins with the user name of anonymous are
permitted, and the user's e-mail address should be sent as the
password.
The ``READ.ME'' file in that subdirectory describes the available
documents which may be available as an ASCII text file (*.TXT), or a
WordPerfect 5.1 or 6.x document (*.w51,wp6), or both.
Finally, the document can be obtained by ``bounce-back e-mail''. A
message should be sent to: ``[email protected]''.
SUPPLEMENTARY INFORMATION:
I. History of the CGMP Regulations
On October 10, 1962, Congress enacted the Drug Amendments of 1962
(Pub. L. 87-781). The amendments include section 501(a)(2)(B) of the
Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C.
351(a)(2)(B)), which deems a drug to be adulterated if:
* * * the methods used in, or the facilities or controls used
for, its manufacture, processing, packing, or holding do not conform
to or are not operated or administered in conformity with current
good manufacturing practice to assure that such drug meets the
requirements of this Act as to safety and has the identity and
strength, and meets the quality and purity characteristics, which it
purports or is represented to possess.
In the Federal Register of June 20, 1963 (28 FR 6385), FDA
published the first CGMP regulations (now codified as 21 CFR parts 210
through 226).
FDA has amended these regulations several times since 1963 to
ensure that they reflect the level of control necessary and that they
incorporate current technology to the extent that it influences
compliance with CGMP. Major revisions of the CGMP regulations were
issued in the Federal Registers of January 15, 1971 (36 FR 601),
September 29, 1978 (43 FR 45014), and January 20, 1995 (60 FR 4087).
The latter revision came about as the result of a comprehensive
assessment of the CGMP regulations, pursuant to the Regulatory
Flexibility Act (Pub. L. 96-354). During the assessment, the agency
solicited comments from the public with respect to any regulations that
might be perceived as being unnecessarily costly, burdensome, or
lacking public benefit. The revisions that became final in January 1995
were based on the comments that FDA received as well as the agency's
experience in applying those regulations.
II. Background of the Regulations
Since the development of the CGMP regulations, FDA has balanced the
need for precise, easily understood standards, which ease both
compliance and enforcement burdens, with the need to encourage
innovation and the development of improved manufacturing technologies.
The agency continues to balance such issues as part of the regulatory
process, and to choose the means of regulation most suited to any
particular aspect of the manufacturing process. The agency strives to
provide manufacturers with the discretion on how to achieve the level
of control necessary under CGMP, recognizing that in a few instances,
more direction from the agency is necessary because of the potential
for harm, the narrow range of acceptable means to accomplish a
particular CGMP objective, or to provide a uniform standard to the
entire industry. The CGMP regulations are based on fundamental concepts
of quality assurance: (1) Quality, safety, and effectiveness must be
designed and built
[[Page 20105]]
into a product; (2) quality cannot be inspected or tested into a
finished product; and (3) each step of the manufacturing process must
be controlled to maximize the likelihood that the finished product will
be acceptable (Ref. 1).
To accomplish these objectives, the agency must periodically
reassess and revise the CGMP regulations to accommodate advances in
technology that further safeguard the drug manufacturing process. As
technology and scientific knowledge evolve, so does understanding of
the critical material, equipment, and process variables that must be
defined and controlled to ensure end product homogeneity and conformity
with appropriate specifications. The CGMP regulations would not achieve
their statutorily mandated purposes if they were not periodically
reassessed to identify and eliminate obsolete provisions or to modify
provisions that no longer reflect the level of quality control that
current technology dictates and that the majority of manufacturers have
adopted.
Despite the agency's historic preference for a general regulatory
approach in the CGMP regulations, experience has shown that additional
specificity is warranted in certain areas. In addition, FDA regulatory
activities, and particularly its enforcement activities, have
demonstrated a need for greater uniformity in certain procedures to
protect the integrity of the drug product. When experience has
demonstrated that the acceptable choices with respect to any given
regulation are limited, FDA believes that the regulations will better
serve the public by reflecting the actual processes and procedures that
are acceptable to FDA. In those relatively few instances where such
specificity has been introduced into the regulations, FDA believes
industry will benefit by being able to focus its resources on
activities and processes that are known to be appropriate, rather than
on those that may eventually be found to be deficient.
FDA has determined that revisions to the CGMP regulations are
necessary at this time for a number of reasons. Rapid changes in
technology have created situations not anticipated when the CGMP
regulations were originally written or last revised. The agency's
enforcement and litigation experience has revealed persistent lack of
understanding among a limited number of manufacturers with respect to
certain of the CGMP regulations. Some pharmaceutical firms have not
subjected their procedures to sufficient scrutiny, while others have
failed to update such procedures to accommodate changes or advances in
the manufacturing process. In some cases, manufacturers may be relying
on methods and procedures that were acceptable at some time in the
past, but that are not acceptable in light of current standards.
In addition, FDA investigators have encountered serious validation
deficiencies at a number of firms. FDA is particularly concerned with
validation procedures designed to ensure the quality of the
manufacturing process. Enforcement and compliance actions have also
revealed a need for greater clarity and specificity in some portions of
the regulations.
These proposed revisions would, therefore, amend certain
requirements, define or redefine certain terms, and clarify industry
obligations with respect to several portions of the regulations. In
addition, the agency is proposing to revise certain laboratory control
and cross-contamination requirements and to clarify proper testing
procedures.
FDA believes that the procedures that would be required by this
proposal reflect practices already used by many manufacturers and
represent the prevailing industry standard. The agency emphasizes,
however, that for a given practice to be considered a current good
manufacturing practice (or promulgated as such in the regulations), it
is not a prerequisite that the practice actually be in use by a
majority, or a specific percentage of, the industry.
FDA has endeavored to ensure that the drug manufacturing process
will consistently produce products that are safe and have the quality
and purity which they purport to have, while recognizing the interests
of firms in retaining some discretion in achieving the level of control
necessary to comply with CGMP. FDA believes that the proposed rule
successfully addresses this balance; however, FDA invites comments
addressing specific proposals.
Other organizations have developed standards to define quality in
the manufacturing process. One such organization is the International
Organization of Standardization (ISO). The purpose of the ISO 9000
Standards is to provide generic guidance on quality in manufacturing
processes to both industry and vendors supplying industry. Five
standards (9000-9004) have been developed by the ISO Council and are
intended to be accepted worldwide. These standards are applicable to
any industry and are not specific to the pharmaceutical industry.
Compliance with the standards is voluntary. The principles and
practices elucidated in the ISO standards are not in conflict with
those provided by the CGMP regulations. Indeed, the voluntary ISO
standards share common principles with FDA's CGMP requirements.
III. Highlights of the Proposed Rule
The proposed rule would amend or revise a number of CGMP provisions
as follows:
A. Process Validation
The proposed rule would define ``process validation.'' Process
validation is a quality assurance function that helps to ensure drug
product quality by providing documented evidence that the manufacturing
process consistently does what it purports to do. Although process
validation is widely practiced by industry, FDA continues to find firms
that have never validated manufacturing processes for some finished
products.
Manufacturing process validation is a continuous undertaking
through which the process performance is constantly monitored and
evaluated. The complexities of modern manufacturing processes may make
it necessary to adapt or alter existing parameters while unexpected
variables may affect the manufacturing process and the finished
product. For example, a slight change in the physical characteristics
of an ingredient, or in the order of adding ingredients, may alter the
bioavailability of a drug product. In such a case, a sample of the
finished product could meet compendial dissolution criteria but present
a substantially different dissolution pattern than that produced before
changes were made. Because of such effects, revalidation may be
necessary after any change in process or product characteristics or
control procedures.
Although FDA has found numerous instances in which some firms have
failed to revalidate their processes for many years, the agency
recognizes that most of industry establishes and follows process
validation standards. Moreover, most in industry recognize the need for
revalidation (Ref. 2):
To preserve the validated status of a process, measures must be
taken that will allow any significant process changes to be
recognized and addressed promptly. Such change control measures can
apply to equipment, standard operating procedures, manufacturing
instructions, environmental conditions, or any other aspect of the
process system that has an effect on its state of control, and
therefore on the state of validation.
Accordingly, the agency is proposing to add new Sec. 211.220 to the
CGMP regulations specifying the nature and extent of validation that
are necessary to
[[Page 20106]]
ensure that the resulting products have the identity, strength,
quality, and purity characteristics that they purport to possess. The
proposed regulation also clarifies this requirement by using the term
``validation'' for those elements of the manufacturing process under
the control of the manufacturer, while the term ``verification'' is
used for those items produced by a person other than the manufacturer
or otherwise not under the control of the manufacturer.
FDA believes that the proposed rule reflects current industry
standards and processes that are implemented by many in the industry.
The proposed rule is necessary to: (1) Clarify the requirement to those
firms that have not implemented or properly conducted validation; (2)
ensure that all manufacturers are applying, and are evaluated against,
the same standard; and (3) clarify any remaining confusion about the
importance of validation in CGMP. FDA invites comments on whether this
proposal adequately achieves these goals in a manner consistent with
current industry practice.
B. Methods Validation
This proposed rule would also define in Sec. 210.3 ``methods
validation,'' which is the documented, successful evaluation of an
analytical method that provides a high level of assurance that such
method will consistently yield results that are accurate within
previously established specifications. The agency is proposing to move
the requirement for methods validation from Sec. 211.165(e) to
Sec. 211.222 for emphasis and to change the word ``established'' to
``validated'' for clarification. Current regulations require regulated
firms to validate all analytical methods that vary from compendial
methods. The suitability of a chosen method may be measured by such
analytical variables as precision, accuracy, limit of detection, limit
of quantitation, selectivity, range, linearity, and ruggedness. Methods
validation is intended to provide a high level of confidence that the
method selected is scientifically sound and that it serves its intended
analytical purpose.
Methods validation is central to ensuring the reliability of all
evidence that supports a product's identity, strength, quality, and
purity. For test results to be useful, significant, and reliable, the
methods used to analyze the data in such test results must also be
validated. In other words, a firm must establish that the analytical
methods it uses to assess or evaluate a manufacturing process
accurately measure variables affecting process control.
FDA recognizes that the scientific soundness of most of the methods
used by firms is well established. Compendial methods, for example,
reflect years of experience and evaluation and, in most cases, do not
need to be revalidated. In some instances, however, no generally
recognized analytical method exists or problems may develop with
existing methods. Product modification may also lead to innovative
analytical methods. FDA inspections have revealed that some firms use
methods that have become outdated, or claim to use analytical methods
that bear little relationship to those actually being used. In such
cases, new or revised analytical methods must be established as
scientifically sound and reproducible. FDA invites comments on this
proposal with respect to alternative means, if any, of assuring the
reliability of analytical methods.
C. Contamination
Drug products can become contaminated in a variety of ways. For
example, ineffective cleaning procedures may leave residues of the
product or cleaning agents in the equipment, production workers may
fail to take proper precautions while transporting a substance from one
area to another thereby introducing a contaminant to the second
production area, or particles may become airborne and travel to
production areas throughout the facility. Drug products may become
contaminated by a number of substances such as dust, dirt, debris,
toxic substances, infectious agents, or residue of other drugs or drug
components. Most contamination can be controlled to an acceptable level
through measures such as proper planning and implementation of cleaning
processes, employee training, gowning, and air filtration. Under CGMP,
a manufacturer will set contamination limits on a substance-by-
substance basis, according to both the potency of the substance and the
overall level of sensitivity to that substance.
However, controlling or reducing the likelihood of contamination is
inadequate when substances are present that may pose a serious risk to
humans or animals because their presence in even trace amounts may
render toxic an otherwise safe product. This is of particular concern
because a toxic reaction resulting from cross-contamination may not be
apparent to a health professional treating a patient suffering from
such a reaction, or may be impossible to trace to product
contamination. Penicillin, for example, is a substance that poses an
unacceptable risk of contamination because of the severe reaction some
humans have to it even at very low levels of exposure. Penicillin has
long been subject to specific CGMP regulations designed to reduce the
danger of cross-contamination. Because other substances, such as
cytotoxic agents or other antibiotics, pose at least as great a risk of
toxicity due to cross-contamination, FDA is proposing to expand the
contamination control requirements to encompass other sources of
contamination.
FDA has determined that substances posing a serious threat of
contamination, i.e., substances to which humans or animals show a
particular sensitivity even at extremely low levels, should be
controlled through dedicated production processes. For example,
dedicated facilities, air-handling equipment, and process equipment may
be necessary. The agency has refrained from establishing a list of
drugs or drug products that present such an unacceptable risk, because
such a list would quickly become obsolete. Moreover, the agency
believes that most manufacturers are knowledgeable about risks that are
associated with products that they produce, as well as with the
effective means to prevent cross-contamination. FDA stresses that
prevention of cross-contamination of potentially toxic substances is
the goal of this proposed rule. Because, in even small amounts, those
drugs may be toxic to humans or animals, FDA expects manufacturers to
identify any drugs that they produce that present the risk of cross-
contamination and to implement measures necessary to eliminate that
risk. FDA recognizes that, depending on the drug product, a variety of
measures may be acceptable to eliminate cross-contamination; there may,
however, be situations in which nothing short of dedicated facilities
or equipment will be sufficient. FDA invites comments on this proposal
especially with respect to any alternative means of addressing and
preventing cross-contamination.
D. Testing
FDA has concluded through its inspection and enforcement activities
that many manufacturers are not conducting adequate testing procedures
and are not adequately evaluating test discrepancies or investigating
failures. Such an investigation is crucial to ensure that the
manufacturing process is adequately controlled.
FDA recognizes the need to clarify the CGMP requirements in this
area so that all manufacturers are applying the same
[[Page 20107]]
minimum standards and so that all manufacturers are thoroughly
assessing test results and discrepancies to ensure that all drug
products are safe and of the quality and purity which they purport to
be. This proposed rule would amend procedures for the testing of
components, calculation of yield, and blend testing. It would also
provide procedures for dealing with out-of-specification results. FDA
invites comments on alternate means of achieving adequate followup of
testing discrepancies or failures.
E. Quality Control
To further ensure that validation procedures are current, this
proposed rule would make the quality control unit responsible for
reviewing changes in product, process, equipment, or personnel, and for
determining if and when revalidation is required. The agency believes
that placing responsibility for oversight of validation procedures in
quality control units emphasizes the importance of proper validation to
quality control. This proposed rule stresses the importance of
validation by ensuring that a manufacturer will have a certain employee
or employees who are responsible for and accountable for ensuring that
the firm adequately evaluates its manufacturing process, validates the
processes and testing that must be validated, and thoroughly assesses
any discrepancies. FDA believes that this proposed regulation will
enhance compliance with CGMP through a means acceptable to most
manufacturers while providing FDA the ability to ensure accountability
and compliance.
IV. Description of the Proposed Rule
In general, the proposed rule would add new definitions to
Sec. 210.3 to clarify existing terms in the CGMP regulations and to
reflect proposed changes to the CGMP regulations for finished
pharmaceuticals. This proposal would also revise the CGMP regulations
for finished pharmaceuticals in part 211 to incorporate validation,
test, and documentation procedures necessary to protect the integrity
of the drug manufacturing process. Specific provisions are described in
more detail below.
A. Section 210.3--Definitions
Current Sec. 210.3(b) defines various terms that are used in the
CGMP regulations in parts 210 to 226.
This proposed rule would amend Sec. 210.3(b) to include new
definitions to clarify existing terminology and to define new terms
introduced in other provisions of this proposal. Under proposed
Sec. 210.3(b)(23), ``validation protocol'' would mean a written plan
describing the process to be validated, including production equipment
and how validation will be conducted. Such a plan would address
objective test parameters, product and process characteristics,
predetermined specifications, and factors which will determine
acceptable results.
Proposed Sec. 210.3(b)(24) would define ``process validation'' as
establishing, through documented evidence, a high degree of assurance
that a specific process will consistently produce a product that meets
its predetermined specifications and quality characteristics.
This proposal would define ``methods validation'' in
Sec. 210.3(b)(25) as establishing, through documented evidence, a high
degree of assurance that an analytical method will consistently yield
results that accurately reflect the quality characteristics of the
product tested.
Proposed Sec. 210.3(b)(26) would define ``equipment suitability''
as the established capacity of process equipment and ancillary systems
to operate consistently within established limits and tolerances.
Under proposed Sec. 210.3(b)(27), ``process suitability'' would
mean the established capacity of the manufacturing process to produce
effective and reproducible results consistently.-
Proposed Sec. 210.3(b)(28) would define ``out-of-specification'' as
an examination, measurement, or test result that does not comply with
preestablished criteria. This definition would be consistent with
Sec. 211.160(b), which requires laboratory controls for finished
pharmaceuticals to include the establishment of scientifically sound
and applicable specifications, standards, sampling plans, and test
procedures designed to ensure that components, drug product containers,
closures, in-process materials, labeling, and drug products conform to
appropriate standards of identity, strength, quality, and purity.
Proposed Sec. 210.3(b)(29) would define ``reprocessing'' as a
system of reworking batches that do not conform to standards or
specifications, including ``the steps taken to ensure that the
reprocessed batches will conform to all established standards,
specifications, and characteristics.'' Under the proposal,
``reprocessing'' would include a step or steps in the manufacturing
process that are out of the normal processing sequence or that are not
specifically provided for in the process.
Under proposed Sec. 210.3(b)(30), ``manufacturing process'' would
mean all manufacturing and storage steps in the creation of the
finished product from the weighing of components through the storing,
packaging, and labeling of the finished product, including, but not
limited to, the following: Mixing, granulating, milling, molding,
formulating, lyophilizing, tableting, encapsulating, coating,
sterilizing, and filling.
B. Section 211.22--Responsibilities of Quality Control Unit
Current Sec. 211.22 describes a quality control unit's
responsibilities. These responsibilities include ``the responsibility
and authority to approve or reject all components, drug product
containers, closures, in-process materials, packaging material,
labeling, and drug products'' as well as the authority to review
production records to determine whether errors have occurred. If errors
have occurred, Sec. 211.22 also gives quality control units the
authority to determine whether a firm has fully investigated the error.
The agency understands that some manufacturers would prefer that
the term ``quality control'' be replaced with ``quality assurance,''
that the functions of quality control and quality assurance be somehow
differentiated, or that a number of other terms be incorporated into
the regulation to reflect the distribution of quality oversight
responsibilities in various manufacturing settings.
FDA does not believe that such changes in terminology would be
useful. The difference between ``quality assurance'' and ``quality
control'' is recognized to be operational. The quality control unit is
usually responsible for performing the testing to assure that proper
specifications and limits are adhered to, while the quality assurance
unit is responsible for auditing methods, results, systems, and
processes, and for performing trend analyses. The functions described
in the proposed rule as the responsibility of the quality control unit
are designed to be implemented by all manufacturers, regardless of size
or organizational structure. However, such procedures can easily be
accommodated under organizational structures which utilize quality
assurance and quality control departments. The agency stated in the
preamble to the 1978 CGMP regulation and reiterates here, that the term
quality control ``unit'' is used in the regulations ``because it is a
term broadly applicable to any group within a manufacturing
establishment charged with the responsibility of quality control. The
[[Page 20108]]
Commissioner is not concerned about the name given by a firm to its own
unit that is responsible for quality control functions'' (43 FR 45014
at 45032).
Proposed 211.22(a) would require that firms be accountable with
respect to validation provisions and would give quality control units
the additional responsibility of reviewing and approving validation
protocols to assess their adequacy. Quality control units would also be
responsible for reviewing product, process, equipment, or other changes
to determine if and when revalidation is warranted. This change is
intended to make the quality control unit responsible for keeping
validation current and is a logical extension of the quality control
unit's role in ensuring product quality. The agency believes that, by
making clear such accountability, compliance with the validation
provisions will be more consistent and reliable.
C. Section 211.68--Automatic, Mechanical, and Electronic Equipment
Current Sec. 211.68(b) requires appropriate controls over computer
or related systems to ensure that only authorized personnel make
changes in master production and control records or other records. The
current regulation also requires that ``A backup file of data entered
into the computer or related system shall be maintained except where
certain data, such as calculations performed in connection with
laboratory analysis, are eliminated by computerization or other
automated processes.'' If computerization or other automated process
has eliminated such calculations, ``a written record of the program
shall be maintained along with appropriate validation data.''
Proposed Sec. 211.68(b) would replace the phrase ``appropriate
validation data'' with ``data establishing proper performance.'' This
change is intended to emphasize that the manufacturer must actually
establish proper performance.
D. Section 211.82--Receipt and Storage of Untested Components, Drug
Product Containers, and Closures
Section 211.82 governs the receipt and storage of untested
components, drug product containers, and closures. Section 211.82(b)
currently states, in part, that, ``Components, drug product containers,
and closures shall be stored under quarantine until they have been
tested or examined, as appropriate, and released.'' This provision is
designed to prevent the premature release of untested components,
containers, and closures that might be unsuitable for use in the
manufacturing process.
The proposal would remove the words, ``as appropriate,'' to
eliminate any ambiguity in the existing regulation. Although testing or
examination may vary with the particular component, drug product
container, or closure, the revision would also emphasize that it is, in
fact, accepted industry practice to conduct some testing or examination
before the components, drug product containers, or closures are
released from quarantine.
E. Section 211.84--Testing and Approval or Rejection of Components,
Drug Product Containers, and Closures
Section 211.84 pertains to the testing and approval or rejection of
components, drug product containers, and closures. Under current
Sec. 211.84(c)(1), containers of components ``shall be cleaned where
necessary, by appropriate means.''
This proposed rule would replace the phrases ``where necessary''
and ``by appropriate means'' with ``in a manner to prevent introduction
of contaminants into the raw material.'' This change will clarify that
the act of cleaning component containers is done for a particular
purpose, to prevent the introduction of contaminants, and that purpose
must, in all cases, be achieved.
FDA proposes to correct a typographical error in the text of
Sec. 211.84(c)(5) which requires that sample containers be identified
so that, among other things, the date on which the sample was taken can
be determined. The current regulation erroneously states ``the data on
which the sample was taken.'' FDA proposes to correct this by changing
``data'' to ``date.'' Additionally, proposed Sec. 211.84(d)(3) would
make two editorial changes by replacing the word ``conformance'' with
``conformity'' and ``procedure'' with ``specifications.''
F. Section 211.101--Charge-In of Components
Current Sec. 211.101 requires written production and control
procedures to assure that drug products have the identity, strength,
quality, and purity they purport or are represented to possess. Section
211.101(c) requires that weighing, measuring, or subdividing operations
be adequately supervised and that each container of component dispensed
to manufacturing be examined by a second person to ensure that: (1) The
component was released by the quality control unit; (2) the weight or
measure, as stated in batch production records, is correct; and (3) the
containers are properly identified.
The proposed rule would add a fourth requirement
(Sec. 211.101(c)(4)) that drug ingredients conform to the quality
specifications for the intended drug product. Active and inactive
ingredients come in varying grades and may not be interchangeable. This
proposal would require examination of the component by competent and
responsible individuals to ensure that the correct material is used.
This provision would provide additional assurance that the raw
materials used are appropriate for the intended batch, but is not
intended to require testing in addition to that required under subpart
E of part 211.
G. Section 211.103--Calculation of Yield
Section 211.100 currently requires maintenance of written
procedures for production and process controls to ensure that drug
products have the identity, strength, quality, and purity they purport
or are represented to possess. Section 211.103 currently requires that
actual yields and percentages of theoretical yield be determined at the
conclusion of appropriate phases of manufacturing, processing,
packaging, or holding of the drug product. These calculations are
performed by one person and independently verified by a second person.
Section 211.192 currently requires any unexplained discrepancy
(including a percentage of theoretical yield exceeding the maximum or
minimum percentages established in master production and control
records) to be thoroughly investigated.
This proposed rule would amend Sec. 211.103 to make clear that
there must be a written production and control procedure that will
require an investigation of any significant unexplained discrepancies
between actual yields and percentages of theoretical yield of the drug
product. This provision would help ensure that the source of any
potential problem is quickly and accurately identified and addressed.
H. Section 211.110--Sampling and Testing of In-Process Materials and
Drug Products
Current Sec. 211.110 establishes several requirements for the
sampling and testing of in-process materials and drug products. For
example, Sec. 211.110(a) requires written procedures for in-process
controls and tests or examinations to be conducted on appropriate
samples of in-process materials of each batch, whereas Sec. 211.110(b)
states that valid in-process specifications shall be consistent with
drug product final specifications and shall be derived from previous
acceptable process average and process
[[Page 20109]]
variability estimates where possible and determined by the application
of suitable statistical procedures. The regulation is designed to
protect the integrity of the manufacturing process and thus the safety
and efficacy of the drug product.
Sampling and testing techniques, however, are valid only insofar as
they provide a realistic representation of the material being sampled
or tested. Blend testing is important because it increases the
likelihood of quickly detecting uniformity problems that may produce
inferior batches. A large sample can mask differences that may be
significant in individual dosage units. Therefore, sample size must
approximate dosage size to provide an accurate representation of blend
uniformity. This proposal would create new Sec. 211.110(d) to help
ensure adequate testing. (The current paragraph (d) would be
redesignated as paragraph (e).) Proposed Sec. 211.110(d) would also
require that sampling be demonstrated through validation to be
representative of all portions of the blend.
This proposal would also require in new Sec. 211.110(f) that
validation of manufacturing processes be conducted in accordance with
process validation requirements in proposed Sec. 211.220. Validation of
these processes is intended, among other things, to ensure that the
sample is representative of all portions of the blend. For example,
firms sampling from drums containing the finished blend must
demonstrate that their sampling technique produces samples
representative of the entire batch.
I. Section 211.111--Time Limitations on Production
To assure the quality of the drug product, Sec. 211.111 currently
requires, when appropriate, time limits for the completion of each
phase of production.
This proposed rule would revise Sec. 211.111 to require for time-
sensitive procedures that manufacturers establish and validate maximum
time for completion of such procedures as part of the validation
required under Sec. 211.220. FDA expects that the validation of time-
sensitive procedures will be part of process validation.
J. Section 211.113--Control of Microbiological Contamination
Section 211.113(b) requires the establishment of, and adherence to,
written procedures designed to prevent microbiological contamination of
drug products purporting to be sterile. The provision also requires
that such procedures include ``validation of any sterilization
process.''
This proposed rule would amend Sec. 211.113(b) to refer to
validation of ``any sterilization or aseptic process.'' This change is
intended to reflect the fact that whether pharmaceutical firms use
aseptic processing techniques or whether they use terminal
sterilization, either technique must be validated.
K. Section 211.160--General Requirements
Currently, Sec. 211.160(b) requires that laboratory controls
include the establishment of scientifically sound and appropriate
specifications, standards, sampling plans, and test procedures designed
to ensure that components, drug product containers, closures, in-
process materials, labeling, and drug products conform to appropriate
standards of identity, strength, quality, and purity.
This proposal would specify a requirement for the establishment of
scientifically sound resampling, retesting, and data interpretation
procedures.
Currently under Sec. 211.160(b)(1), laboratory controls shall
include a determination of conformance to appropriate written
specifications for the acceptance of each lot within each shipment of
components, drug product containers, closures, and labeling used in the
manufacture, processing, packing, or holding of drug products.
This proposal would make editorial changes, replacing
``conformance'' with ``conformity'' and ``appropriate'' with
``applicable.''
L. Section 211.165--Testing and Release for Distribution
Section 211.165(e) requires that the accuracy, sensitivity,
specificity, and reproducibility of test methods used by a firm be
established and documented. Because other revisions in this proposal
would clarify and set forth this requirement, the proposal would remove
Sec. 211.165(e) and redesignate paragraph (f) as paragraph (e).
M. Section 211.166--Stability Testing
Currently, Sec. 211.166 requires a written stability testing
program and provides the elements of such a program. The current
provision requires that an adequate number of batches be tested to
determine an appropriate expiration date. This proposal would
redesignate current Sec. 211.166(c) and (d) as Sec. 211.166(d) and (e),
and add new Sec. 211.166(c) to require placing at least one additional
batch into the stability testing program each year.
For some time, requirements for new drug and abbreviated new drug
applications and biological products applications have included as a
condition for approval a commitment to place the initial three
production batches and at least one additional batch annually into the
stability testing program. It is necessary to place the three initial
batches in the stability testing program to account for batch
variability and to confirm the previously established expiration date.
There are, however, variations in the production process during the
lifetime of a drug product such as changes in personnel, raw materials
and suppliers, manufacturing environment, and equipment. Because a
dosage form is typically a complex unit, such changes may have an
impact on drug product stability. Because of this, the agency believes
it is imperative that ongoing production be periodically monitored to
ensure the stability of the product. The agency believes, further, that
the necessity for continued stability testing is recognized by the
industry and is now standard industry practice. The agency invites
comments on this proposed provision.
N. Section 211.180--General Requirements
Section 211.180(a) requires the retention of production, control,
or distribution records specifically associated with a batch of a drug
product, for at least 1 year after the expiration date of the batch.
FDA believes that validation records, including the validation
protocol, production and control records, data, and the study report,
should not be discarded after the validation batches expire. They
should be retained for as long as the validated process is used and as
long as any batches made by the validated process may be available to
consumers. The proposal would therefore amend this section to add a
requirement that the validation records required by proposed new
Sec. 211.220 also be retained for at least 1 year after the expiration
date of all batches associated with that validated process.
O. Section 211.192--Production Record Review
FDA's experience has revealed a variety of written and unwritten
practices and procedures under which firms have disregarded out-of-
specification laboratory results, after minimal retesting, resampling,
inappropriate averaging of results, or inappropriate outlier testing.
Some firms then proceeded to release a product without a thorough
investigation or an adequate justification for disregarding an out-of-
specification result.
[[Page 20110]]
Out-of-specification results can be caused by laboratory error,
nonprocess or operator error, or by process-related error. The agency
recognizes that laboratory errors occur and that a thorough
investigation, supported by evidence and documentation, may, for
instance, indicate an out-of-specification result caused by laboratory
personnel errors or equipment failures. However, unless and until an
investigation indicates that this is the case and the investigation is
completed and documented, FDA believes that the out-of-specification
result should not be discarded or disregarded. Moreover, FDA emphasizes
that, although retesting may be an appropriate part of an
investigation, an investigation consisting solely of repeated retesting
is clearly inadequate. If quality is not built into a drug product,
retesting cannot make it conform to specifications.
FDA recognizes the distinction between the limited investigation
that may be necessary to identify a laboratory error and the more
extensive investigation and testing necessary when out-of-specification
results may be attributed to another cause. The agency also recognizes
that the industry may impose additional criteria beyond those required
to ensure identity, strength, quality, and purity under CGMP
regulations or as required by a drug application. The agency encourages
such internal controls. Under such circumstances, a manufacturer could
have test results that violate internal standards although they would
not be out-of-specification, as defined in these regulations.
FDA believes, however, that CGMP requires written procedures to be
in place to determine the cause of any apparent failure, discrepancy,
or out-of-specification result. If the out-of-specification result
cannot be clearly attributed to laboratory error, then the quality
control unit should ensure that a thorough investigation is conducted
and supported by a written record. Certain elements and procedures are
crucial to a systematic and orderly investigation. Consequently, this
proposed rule would revise the section heading of Sec. 211.192 to read
``Production, control, and laboratory record review and investigation
of discrepancies,'' and would amend Sec. 211.192(b) to require written
procedures including the following: (1) Procedures for attempting to
identify the cause of the failure or discrepancy; (2) criteria for
determining whether out-of-specification results were caused by
sampling or laboratory error; (3) scientifically sound procedures and
criteria for the exclusion of any test data found to be invalid due to
laboratory or sampling error; (4) scientifically sound procedures and
criteria for additional sampling and testing, if necessary, during the
investigation; (5) procedures and criteria for extending the
investigation to other batches or other products; (6) procedures for
review and evaluation of the investigation, including all test results,
by the quality control unit, to ensure a thorough investigation; and
(7) criteria for final approval or rejection of the batch involved, and
for taking action on other batches and products if indicated by the
investigation.
The number of retests performed before a firm concludes that an
unexplained out-of-specification laboratory result is invalid, or that
a product is unacceptable, is a matter of scientific judgment. FDA does
not intend to issue regulations on specific retesting procedures.
Rather, the proposed rule would require each firm to have written
investigation and retesting procedures, applying scientifically sound
criteria, that limit the amount of retesting permitted and indicate the
point at which testing ends and the product is evaluated.
Proposed Sec. 211.192(c) would require written records of the
investigation to be made and shall include: (1) The reason for the
investigation; (2) a description of the investigation made, including
all laboratory tests; (3) the results of the investigation including
all laboratory test results involved in the investigation; (4)
scientifically sound and appropriate justification for excluding any
out-of-specification laboratory result found to be invalid; (5) if
laboratory results are found to be invalid, the subsequent laboratory
results supporting the final determination of the tested item's
conformity to appropriate specifications for acceptance; (6) the
conclusions and subsequent actions concerning all batches and products
that may have been associated with the failure or discrepancy; (7) the
signature(s) and date(s) of the person(s) responsible for approving the
record of the investigation; and (8) the signature(s) and date(s) of
the person(s) responsible for the final decision on disposition of the
batch, and on other batches and products involved. The agency
specifically invites comments on these proposed requirements.
P. Section 211.220--Process Validation, and Section 211.222--Methods
Validation
FDA proposes to add new subpart L to part 211 entitled
``Validation.'' The new subpart would consist of two regulations:
Sec. 211.220 for ``process validation'' (establishing through
documented evidence a high degree of assurance that a specific process
will consistently produce a product that meets predetermined
specifications and quality characteristics), and Sec. 211.222 for
``methods validation'' (establishing through documented evidence a high
degree of assurance that an analytical method will consistently yield
results that accurately reflect the quality characteristics of the
material tested).
These proposed regulations are intended to clarify the requirements
for validation and to provide the basic elements of an acceptable
validation procedure. FDA believes, in general, that scientific
knowledge and industry experience have defined the basic elements of a
sound validation system. Validation has proven to be an effective
technique for protecting the integrity of the drug manufacturing
process.
Although the particular requirements of process validation will
vary according to such factors as the nature of the drug product (e.g.,
sterile versus nonsterile) and the complexity of the process, the
requirements of the proposed subpart are generally applicable to all
drug products and provide a foundation for building a comprehensive
approach to process validation.
Proposed Sec. 211.220(a) would require validation of all drug
manufacturing processes including, but not limited to, computerized
systems involved in the manufacturing process. Under the proposal, the
manufacturing process would include all manufacturing steps in the
creation of the finished product, including, but not limited to,
cleaning, weighing, measuring, mixing, blending, compressing, filling,
packaging, and labeling. Time-sensitive steps in the manufacturing
process would be validated. Such validation ensures that the impact of
any interruption in the manufacturing process on drug product safety
and efficacy is fully understood by the manufacturer.
Proposed Sec. 211.220(b) would establish requirements for a
validation protocol. The validation protocol is the blueprint of the
validation process for a particular drug product. The protocol would
specify a sufficient number of replicate process runs to demonstrate
reproducibility and provide an accurate measure of variability among
successive runs. Validation documentation would include evidence of the
suitability of materials and the proper performance and reliability of
the equipment and systems used to manufacture a drug product. The
execution of the protocol and the test results would be
[[Page 20111]]
documented and the manufacturer would be required to retain such
documentation.
Proposed Sec. 211.220 would require that equipment and processes be
designed and selected to be consistently capable of achieving product
specifications. Determining equipment suitability would include testing
to verify whether the equipment is capable of performing adequately
within the operating limits of the process. A determination of process
suitability would include rigorous testing and documentation to
demonstrate that the process is both effective and reproducible. A
manufacturer should test those parts of the process that may affect
product quality or may cause variability.
Proposed Sec. 211.220(d) would require a quality assurance system
to implement revalidation procedures whenever there are changes,
including reprocessing, that could affect product effectiveness or
product characteristics, or whenever changes are observed in product
characteristics.
Proposed Sec. 211.222, ``methods validation,'' would require the
manufacturer to establish and document the accuracy, sensitivity,
specificity, reproducibility, and any other attribute necessary to
validate test methods. The validation would be required to meet the
existing requirements for laboratory records provided at
Sec. 211.194(a)(2). These requirements include a ``statement of each
method used in the testing of the sample,'' indicating the location of
the data that establish that the methods used in testing the sample
meet proper standards of accuracy and reliability as applied to the
tested product. The proposed provision is designed to ensure that
testing methods used are relevant to product quality and the integrity
of the manufacturing process. FDA invites comments on this proposal,
especially on alternative means, if any, of assuring the reliability of
manufacturing processes and analytical methods.
Q. Section 211.240--Control of Chemical and Physical Contaminants
FDA's experience indicates that the potential dangers of
contamination are more extensive and varied than once believed; for
example, high potency drugs, such as penicillin, cephalosporins, and
cytotoxic anticancer agents, may pose health risks even at low levels
of exposure. Cross-contamination may result in the adulteration of
other drugs, and even minimal amounts could have serious adverse
effects on persons who are allergic to the contaminant. Moreover,
because the identity or even the presence of the contaminant may be
unknown, health care professionals providing care to a patient
suffering from such an adverse effect may be unable to provide
appropriate medical intervention.
FDA is thus proposing to add new subpart M, which would be directed
to the control of chemical and physical contaminants. The new subpart,
consisting of proposed Sec. 211.240, would require firms to anticipate
and prevent specific contamination problems, including, but not limited
to, those presented by penicillin. As a result, FDA is also proposing
to remove Secs. 211.42(d) and 211.176 regarding separate facilities for
manufacturing penicillin and penicillin contamination and to
incorporate their requirements in Sec. 211.240.
Proposed Sec. 211.240(a) would require the implementation of
written procedures designed to prevent objectionable chemical and
physical contamination, including cross-contamination. Section
211.240(b) would require dedicated production, which may include
facilities, air handling, or process equipment, in those circumstances
in which contaminants pose a special danger to human or animal health.
Such contaminants include, but are not limited to, penicillin,
cephalosporins, cytotoxic anti-cancer agents, and infectious agents
(e.g., spore-bearing organisms and live viruses). Dedicated production
would also be required under proposed Sec. 211.240(b) if there are no
reasonable methods for the cleaning and removal of a drug substance or
compound residues from buildings, facilities, and equipment.
If there is a reasonable possibility that a drug has been exposed
to cross-contamination, proposed Sec. 211.240(c) would require that the
product be tested for the potential contaminant. It would also require
the establishment of limits for potential contaminants, and prohibit
the release of a product for distribution if these limits are exceeded.
The proposed contamination provisions are designed to accommodate
technological changes. For example, under the proposed rule, a
manufacturer might develop a drug product of high therapeutic potential
that also poses a high risk of contamination. If this hypothetical drug
product contamination posed a special danger to human health, dedicated
facilities would be required. If, however, experience demonstrated that
the drug product did not pose such a risk, or if changes in
manufacturing technology greatly reduced the risk, dedicated facilities
might no longer be required.
V. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(8) that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
VI. Paperwork Reduction Act of 1995
This proposed rule contains information collections which are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The title,
description, and respondent description of the information collection
are shown below with an estimate of the annual reporting and
recordkeeping burden. Included in the estimate is the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Title: Current Good Manufacturing Practice; Proposed Amendment of
Certain Requirements for Finished Pharmaceuticals.
Description: FDA is proposing to amend its CGMP regulations to
establish procedures and specifications for testing, sampling, and
other quality control activities; to establish criteria for initiating
and performing out-of-specification investigations; and to control
chemical and physical contaminants. These amendments would clarify
certain manufacturing, quality control, and documentation requirements
and ensure that the regulations more accurately encompass CGMP. In
addition, the agency is updating the requirements for process and
methods validation to incorporate guidance previously issued to
industry and to reflect current practice. These proposed changes are
intended to enhance the integrity of the drug manufacturing process and
the safety of drug products. The total recordkeeping requirements are
estimated at 89,884 hours, as a one-time reporting burden.
Description of Respondents: Businesses or other for profit and
small businesses or organizations.
[[Page 20112]]
----------------------------------------------------------------------------------------------------------------
Estimated Reporting Burden \1\
-----------------------------------------------------------------------------------------------------------------
Number of Responses per Total Annual Hours Per
CFR Section Respondents Respondent Responses Response Total Hours
----------------------------------------------------------------------------------------------------------------
211.160(b) and
(b)(1) 1,077 1 1 8.2 8,871
211.192(a) 4,184 1 1 6.7 28,060
211.192(b) 4,184 1 1 9.6 40,156
211.240 2,205 1 1 6.3 12,797
Total 89,884
----------------------------------------------------------------------------------------------------------------
\1\ Because some of the numbers underlying these estimates have been rounded, figures in this table are
approximate. There are no maintenance and operation costs nor start up and capital costs. The chart represents
a one time burden.
As required by section 3507(d) of the Paperwork Reduction Act of
1995, FDA has submitted a copy of this proposed rule to OMB for its
review of these previously approved information collection
requirements. The agency solicits comments on the information
collection requirements in order to: (1) Evaluate whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (2) evaluate the accuracy of the agency'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. Organizations and individuals
desiring to submit comments on the information collection requirements
should direct them to the Office of Information and Regulatory Affairs,
OMB, New Executive Office Bldg., rm. 10235, 725 17th St. NW.,
Washington, DC 20503, Attention: Desk Officer for FDA.
VII. Analysis of Impacts
FDA has examined the impacts of the proposed rule under Executive
Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this proposed rule is consistent with the regulatory philosophy and
principles identified in the Executive Order. The detailed data for the
cost analysis were developed by Eastern Research Group, Inc., under
contract to FDA, and their full report is on file at the Dockets
Management Branch (address above).
The proposed changes to the CGMP regulations will affect
manufacturers of finished human and veterinary pharmaceuticals,
including medical gases, and repackers and relabelers of drug products.
The majority of the proposed changes clarify existing manufacturing,
quality control, and documentation requirements and represent current
industry practice for the majority of firms. As such, they will have
little or no economic impact on the majority of the industry. Some
firms are not, however, operating in conformance with CGMP and the
estimates represent the agency's best assessment of the incremental
increase in costs that these firms would incur in implementing full
compliance with the proposed changes.
The total cost is estimated to be a one-time expenditure of
$2,900,000 ($0.7 million annualized over 5 years at a 7 percent
discount rate). These costs would be generated by proposed changes that
would require some manufacturers to revise existing, or develop new,
standard operating procedures.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact on small
entities. Because this regulation will not impose significant new costs
on a large number of drug manufacturing operations, the agency
certifies that the proposed rule will not have a significant economic
impact on a substantial number of small entities. The agency estimates
that, to comply with the proposal, establishments will incur additional
annualized costs ranging from approximately $60 to $450 for
establishments with fewer than 100 employees and from approximately
$175 to $600 for establishments with 250 or more employees. For
individual establishments, the impact of the proposal will depend on
numerous factors, such as the type of establishment, the level of
current conformance with the proposed changes, and the number and
nature of products produced. Provisions of this proposal represent the
most cost-effective option evaluated. Several of the rejected
alternatives considered (such as revisions to Sec. 211.84(d)(2) and
(d)(3)) would have increased total costs by $14 to $27 million.
As a result of its analysis, FDA has determined that the proposed
revision to the CGMP regulations for human and veterinary
pharmaceuticals is not a significant regulatory action as defined by
Executive Order 12866, and that the proposal will not have a
significant economic impact on a substantial number of small entities.
Therefore, under the Regulatory Flexibility Act, no further analysis is
required.
VIII. Effective Date
FDA proposes that any final rule that may issue based on this
proposal become effective 90 days after the date of its publication in
the Federal Register.
IX. Request For Comments
Interested persons may, on or before August 1, 1996, submit to the
Dockets Management Branch (address above) written comments regarding
this proposal. Two copies of any comments are to be submitted except
that individuals may submit one copy. Comments are to be identified
with the docket number found in brackets in the heading of this
document. Received comments may be seen in the office above between 9
a. m. and 4 p.m., Monday through Friday.
X. References
The following references, which have been consulted in the drafting
of this proposed rule, are readily and publicly available in a variety
of locations. They have also been placed on display in the Dockets
Management Branch (address
[[Page 20113]]
above) and may be seen by interested persons between 9 a.m. and 4 p.m.,
Monday through Friday.
1. Juran, Quality Control Handbook, 4th ed., McGraw-Hill, 1988.
2. Pharmaceutical Manufacturers Association's (now known as
Pharmaceutical Research and Manufacturers of America) Validation
Advisory Committee, ``Process validation concepts for drug
products,'' Pharmaceutical Technology, September 1985, p. 82.
List of Subjects
21 CFR Part 210-
Drugs, Packaging and containers.
21 CFR Part 211
Drugs, Labeling, Laboratories, Packaging and containers,
Prescription drugs, Reporting and recordkeeping requirements,
Warehouses.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, it is
proposed that 21 CFR parts 210 and 211 be amended as follows.
PART 210--CURRENT GOOD MANUFACTURING PRACTICE IN MANUFACTURING,
PROCESSING, PACKING, OR HOLDING OF DRUGS; GENERAL
1. The authority citation for 21 CFR part 210 continues to read as
follows:
Authority: Secs. 201, 501, 502, 505, 506, 507, 512, 701, 704 of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 351, 352,
355, 356, 357, 360b, 371, 374).
2. Section 210.3 is amended by adding new paragraphs (b)(23)
through (b)(30) to read as follows:
Sec. 210.3 Definitions.
* * * * *
(b) * * *
(23) Validation protocol means a written plan describing the
process to be validated, including production equipment, and how
validation will be conducted, including objective test parameters,
product and/or process characteristics, predetermined specifications,
and factors which will determine acceptable results.
(24) Process validation means establishing, through documented
evidence, a high degree of assurance that a specific process will
consistently produce a product that meets its predetermined
specifications and quality characteristics.
(25) Methods validation means establishing, through documented
evidence, a high degree of assurance that an analytical method will
consistently yield results that accurately reflect the quality
characteristics of the product tested.
(26) Equipment suitability is the established capacity of process
equipment and ancillary systems to operate consistently within
established limits and tolerances.
(27) Process suitability is the established capacity of the
manufacturing process to produce effective and reproducible results
consistently.
(28) Out-of-specification means an examination, measurement, or
test result that does not comply with preestablished criteria, as
required by Sec. 211.160(b) of this chapter.
(29) Reprocessing is a system of reworking batches that do not
conform to standards or specifications. It includes the steps taken to
ensure that the reprocessed batches will conform to all established
standards, specifications, and characteristics. It includes a step or
steps in the manufacturing process that are out of the normal
processing sequence or that are not specifically provided for in the
process.
(30) Manufacturing process means manufacturing and storage steps in
the creation of the finished product from the weighing of components
through the storing, packaging, and labeling of the finished product.
Such steps include, but are not limited to, the following: Mixing,
granulating, milling, molding, formulating, lyophilizing, tableting,
encapsulating, coating, sterilizing, and filling.
PART 211--CURRENT GOOD MANUFACTURING PRACTICE FOR FINISHED
PHARMACEUTICALS
3. The authority citation for 21 CFR part 211 continues to read as
follows:
Authority: Secs. 201, 501, 502, 505, 506, 507, 512, 701, 704 of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 351, 352,
355, 356, 357, 360b, 371, 374).
4. Section 211.22 is amended by adding a sentence at the end of
paragraph (a) to read as follows:
Sec. 211.22 Responsibilities of quality control unit.
(a) * * * The quality control unit shall be responsible for the
review and approval of validation protocols and for the review of
changes in product, process, equipment, or other changes to determine
if and when revalidation is warranted.
* * * * *
Sec. 211.42 [Amended]
5. Section 211.42 Design and construction features is amended by
removing paragraph (d).-
6. Section 211.68 is amended by revising the fifth sentence in
paragraph (b) to read as follows:
Sec. 211.68 Automatic, mechanical, and electronic equipment.
* * * * *
(b) * * * In such instances, a written record of the program shall
be maintained along with data establishing proper performance. * * *
7. Section 211.82 is amended by revising the first sentence in
paragraph (b) to read as follows:
Sec. 211.82 Receipt and storage of untested components, drug product
containers, and closures.
* * * * *
(b) Components, drug product containers, and closures shall be
stored under quarantine until they have been tested or examined and
released. * * *
8. Section 211.84 is amended by revising paragraph (c)(1), by
removing in paragraph (c)(5) the word ``data'' and adding in its place
the word ``date'', and by removing in the first sentence of paragraph
(d)(3) the word ``conformance'' and adding in its place the word
``conformity'' and removing the word ``procedures'' and adding in its
place the word ``specifications'' to read as follows:
Sec. 211.84 Testing and approval or rejection of components, drug
product containers, and closures.
* * * * *
(c) * * *
(1) The containers of components selected shall be cleaned in a
manner to prevent introduction of contaminants into the raw material.
* * * * *
9. Section 211.101 is amended by revising paragraph (c)(3) and by
adding new paragraph (c)(4) to read as follows:
Sec. 211.101 Charge-in of components.
* * * * *
(c) * * *
(3) The containers are properly identified; and
(4) The components conform to the quality specifications for the
intended drug product.
* * * * *
10. Section 211.103 is amended by adding a new sentence to the end
of the paragraph to read as follows:
Sec. 211.103 Calculation of yield.
* * * There shall also be a written production and control
procedure for investigating any discrepancies in yield outside the
maximum or minimum percentages established in master production and
control records.
[[Page 20114]]
11. Section 211.110 is amended by redesignating paragraph (d) as
paragraph (e) and by adding new paragraphs (d) and (f) to read as
follows:
Sec. 211.110 Sampling and testing of in-process materials and drug -
products.
* * * * *
(d) When blend uniformity testing is needed to determine blend
homogeneity, the sample size in both validation and ordinary production
batches should approximate the dosage size. Sampling shall be
demonstrated through validation to be representative of all portions of
the blend.
* * * * *
(f) Validation of manufacturing processes required by this section
shall be conducted in accordance with Sec. 211.220.
12. Section 211.111 is amended by revising the first sentence to
read as follows:
Sec. 211.111 Time limitations on production.
When appropriate, the manufacturer shall establish and validate
maximum time limits for each phase of production as part of validation
procedures required under Sec. 211.220. * * *
13. Section 211.113 is amended by revising the last sentence in
paragraph (b) to read as follows:
Sec. 211.113 Control of microbiological contamination.
* * * * *
(b)-* * * Such procedures shall include validation of any
sterilization or aseptic process.
14. Section 211.160 is amended by revising the first sentence in
the introductory text of paragraph (b) and the first sentence in
paragraph (b)(1) to read as follows:
Sec. 211.160 General requirements.
* * * * *
(b) Laboratory control shall include the establishment of
scientifically sound and applicable written specifications, standards,
sampling plans, and test procedures including resampling, retesting,
and data interpretation procedures designed to ensure that components,
drug product containers, closures, in-process materials, labeling, and
drug products conform to appropriate standards of identity, strength,
quality, and purity. * * *
(1) Determination of conformity to applicable written
specifications for the acceptance of each lot within each shipment of
components, drug product containers, closures, and labeling used in the
manufacture, processing, packing, or holding of drug products. * * *-
* * * * *
Sec. 211.165 [Amended]
15. Section 211.165 Testing and release for distribution is amended
by removing paragraph (e) and redesignating paragraph (f) as paragraph
(e).
16. Section 211.166 is amended by redesignating paragraphs (c) and
(d) as paragraphs (d) and (e), respectively, and by adding new
paragraph (c) to read as follows:
Sec. 211.166 Stability testing.
* * * * *
(c) After the expiration date has been determined, there shall be
an ongoing testing program for each drug product to ensure product
stability. At least one batch of each drug product shall be added to
the stability program annually.
* * * * *
Sec. 211.176 [Removed]
17. Section 211.176 Penicillin contamination is removed.
18. Section 211.180 is amended by revising paragraph (a) to read as
follows:
Sec. 211.180 General requirements.
(a) Any production, control, validation, or distribution record
that is required to be maintained in compliance with this part and is
specifically associated with a batch of a drug product shall be
retained for at least 1 year after the expiration date of the last
batch produced with that validated process or, in the case of certain
OTC drug products lacking expiration dating because they meet the
criteria for exemption under Sec. 211.137, 3 years after distribution
of the batch.
* * * * *
19. Section 211.192 is revised to read as follows:
Sec. 211.192 Production, control, and laboratory record review and -
investigation of discrepancies.
(a) Written procedures shall be established and followed requiring
the review and approval by the quality control unit of all drug product
production, control, and laboratory records, including packaging and
labeling, to determine compliance with all established and approved
written procedures and specifications before a batch is released or
distributed.
(b) Written procedures shall be established and followed requiring
the thorough investigation of any unexplained discrepancy (including a
percentage of theoretical yield exceeding the maximum or minimum
percentages established in master production and control records) or
the failure of a batch or any of its components or in-process materials
to meet any of its specifications (including any out-of-specification
test result), whether or not the batch has already been distributed.
The investigation shall extend to other batches of the same drug
product and other drug products that may have been associated with the
specific failure or discrepancy. Such procedures shall include:
(1) Procedures for attempting to identify the cause of the failure
or discrepancy.
(2) Criteria for determining whether out-of-specification results
were caused by sampling or laboratory error.
(3) Scientifically sound procedures and criteria for the exclusion
of any test data found to be invalid due to laboratory or sampling
error.
(4) Scientifically sound procedures and criteria for additional
sampling and testing, if necessary, during the investigation.
(5) Procedures and criteria for extending the investigation to
other batches or other products.
(6) Procedures for review and evaluation of the investigation,
including all test results, by the quality control unit, to ensure a
thorough investigation.
(7) Criteria for final approval or rejection of the batch involved,
and for taking action on other batches and products if indicated by the
investigation.
(c) A written record of the investigation shall be made and shall
include:
(1) The reason for the investigation.
(2) A description of the investigation made, including all
laboratory tests.
(3) The results of the investigation, including all laboratory test
results involved in the investigation.
(4) Scientifically sound and appropriate justification for
excluding any out-of-specification laboratory result found to be
invalid.
(5) If laboratory results are found to be invalid, the subsequent
laboratory results supporting the final determination of the tested
item's conformity to all appropriate specifications for acceptance.
(6) The conclusions and subsequent actions concerning all batches
and products that may have been associated with the failure or
discrepancy.
(7) The signature(s) and date(s) of the person(s) responsible for
approving the record of the investigation.
(8) The signature(s) and date(s) of the person(s) responsible for
the final decision on disposition of the batch, and on other batches
and products involved.
20. New subpart L, consisting of Secs. 211.220 and 211.222, is
added to read as follows:
[[Page 20115]]
Subpart L--Validation
Sec.
211.220 Process validation.
211.222 Methods validation.
Subpart L--Validation
Sec. 211.220 Process validation.
(a) The manufacturer shall validate all drug product manufacturing
processes including, but not limited to, computerized systems that
monitor and/or control the manufacturing process. The manufacturing
process includes all manufacturing steps in the creation of the
finished product including, but not limited to, the following
procedures: Cleaning, weighing, measuring, mixing, blending,
compressing, filling, packaging, and labeling.
(b) Validation protocols that identify the product and product
specifications and specify the procedures and acceptance criteria for
the tests to be conducted and the data to be collected during process
validation shall be developed and approved. The protocol shall specify
a sufficient number of replicate process runs to demonstrate
reproducibility of the process and provide an accurate measure of
variability among successive runs. Validation documentation shall
include evidence of the suitability of materials and the performance
and reliability of equipment and systems. The manufacturer shall
document execution of the protocol and test results.
(c) The manufacturer shall design or select equipment and processes
to ensure that product specifications are consistently achieved. The
manufacturer's determination of equipment suitability shall include
testing to verify that the equipment is capable of operating
satisfactorily within the operating limits required by the process.
Process suitability shall include documented rigorous testing to
demonstrate the effectiveness and reproducibility of the process. Parts
of the process that may cause variability or otherwise affect product
quality shall be tested.
(d) There shall be a quality assurance system in place which
requires revalidation whenever there are changes in packaging,
component characteristics, formulation, equipment, or processes,
including reprocessing, that could affect product effectiveness or
product characteristics, and whenever changes are observed in product
characteristics.
Sec. 211.222 Methods validation.
The accuracy, sensitivity, specificity, and reproducibility of test
methods used by a manufacturer shall be validated and documented. Such
validation and documentation shall be accomplished in accordance with
Sec. 211.194(a)(2).
21. New subpart M, consisting of Sec. 211.240, is added to read as
follows:
Subpart M--Contamination
Sec.
211.240 Control of chemical and physical contaminants.
Subpart M--Contamination
211.240 Control of chemical and physical contaminants.
(a) The manufacturer shall implement written procedures designed to
prevent objectionable chemical and physical contamination, including
cross-contamination.
(b) Dedicated production, which may include facilities, air
handling equipment, and/or process equipment, shall be employed where
contaminants, such as penicillin, pose a special danger to human or
animal health or if there are no reasonable methods for the cleaning
and removal of drug substances and/or component residues from
buildings, facilities, and equipment.
(c) If a reasonable possibility exists that a drug has been exposed
to cross-contamination, the manufacturer shall test the product for the
presence of the potential contaminant. The manufacturer shall establish
appropriate limits for such potential contaminants. Products that
exceed the established limits shall not be released for distribution.
Dated: March 29, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-11094 Filed 5-2-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-11089 Review of Motor Tariff Regulations-1993
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Page 19902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11089]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Part 1312
[Ex Parte No. MC-212]
Review of Motor Tariff Regulations-1993
AGENCY: Surface Transportation Board (Board).1
\1\ The ICC Termination Act of 1995, Pub. L. No. 104-88, 109
Stat. 803 (ICCTA), which was enacted on December 29, 1995, and took
effect on January 1, 1996, abolished the Interstate Commerce
Commission (ICC) and transferred certain functions and proceedings
to the Board. Section 204(b)(1) of the Act provides, in general,
that proceedings pending before the ICC on the effective date of
that legislation shall be decided under the law in effect prior to
January 1, 1996, insofar as they involve functions retained by the
Act. Section 204(b)(3) provides that, ``[i]n the case of a
proceeding under a provision of law repeal[ed], and not reenacted,
by this Act such proceeding shall be terminated.'' Although the
motor carrier tariff filing provisions were sharply curtailed in the
ICCTA and in prior legislation, they were not entirely repealed.
Therefore, it is not pursuant to the automatic termination
provisions of section 204(b)(3) of ICCTA that this pending
proceeding is being terminated.
---------------------------------------------------------------------------
ACTION: Proposed rule; termination of proceeding.
-----------------------------------------------------------------------
SUMMARY: The Board is terminating this proceeding in which
modifications to motor carrier tariff filing requirements were being
considered, because intervening legislation has made consideration of
those modifications unnecessary.
DATES: This action is made on May 3, 1996.
FOR FURTHER INFORMATION CONTACT: Michael L. Martin, (202) 927-6033;
[TDD for the hearing impaired: (202) 927-5721].
SUPPLEMENTARY INFORMATION: In a Notice of Proposed Rulemaking published
at 58 FR 14198 (March 16, 1993), the ICC instituted a proceeding to
seek public comment on whether certain motor carrier tariff filing
requirements should be modified. The proceeding was initiated in
response to a Congressional directive that the ICC increase its motor
carrier tariff oversight.2
---------------------------------------------------------------------------
\2\ Senate Report No. 102-351, dated July 30, 1992, accompanying
the U.S. Department of Transportation and Related Agencies
Appropriations Bill, 1993.
---------------------------------------------------------------------------
In recent legislation,3 Congress has repealed the tariff
filing requirements for most motor common carriers of property, and
voided such tariffs. Now, the only rates that motor carriers must
publish and file in tariffs are those relating to joint motor-water
movements in the noncontiguous domestic trade. Because carriers are no
longer required to file the tariffs that precipitated the notice of
proposed rulemaking, we are terminating this proceeding.
\3\ The Trucking Industry Regulatory Reform Act of 1994, Pub. L.
No. 103-311, 108 Stat. 1683, enacted August 26, 1994, and ICCTA.
---------------------------------------------------------------------------
Authority: 49 U.S.C. 10321.
Decided: April 17, 1996.
By the Board, Chairman Morgan, Vice Chairman Simmons, and
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-11089 Filed 5-2-96; 8:45 am]
BILLING CODE 4915-00-P
Complete official Federal Register PDF
FR Doc. 96-11079 National Emission Standards for Hazardous Air Pollutants for Source Categories: Perchloroethylene Dry Cleaning Facilities; Amendments
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19887-19889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11079]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 63
[AD-FRL-5468-1]
National Emission Standards for Hazardous Air Pollutants for
Source Categories: Perchloroethylene Dry Cleaning Facilities;
Amendments
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed amendments to rule.
-----------------------------------------------------------------------
SUMMARY: This action proposes amendments to the national emission
standards for hazardous air pollutants (NESHAP) for perchloroethylene
(PCE) dry cleaning facilities promulgated in the Federal Register on
September 22, 1993. The NESHAP was promulgated to minimize emissions of
PCE, which has been listed by EPA as a hazardous air pollutant (HAP).
The Administrator is proposing to implement a settlement agreement that
the EPA has entered into regarding a small number of transfer machines.
DATES: Comments. Comments on the proposed amendments must be received
by June 17, 1996.
Public Hearing. Persons requesting a public hearing should contact
Mr. George Smith at (919) 541-1549 by May 15, 1996. If anyone requests
a public hearing by May 15, 1996, a public hearing will be held in
Research Triangle Park, North Carolina. Persons wishing to make oral
statements at this public hearing must contact Mr. Smith by May 15,
1996 at (919) 541-1549, Emission Standards Division, U.S. EPA, MD-13,
Research Triangle Park, NC 27711. Persons interested in attending the
public hearing should also contact Mr. Smith for information on the
exact location of the public hearing, if one is requested.
ADDRESSES: Comments. Comments on the proposed amendments should be
submitted (in duplicate, if possible) to: The Air and Radiation Docket
and Information Center, U.S. Environmental Protection Agency, Mail Code
6102, 401 M Street, SW, Washington, DC 20460, attention Docket Number
A-95-16.
Docket. Docket Number A-95-16, containing supporting information
used in developing the proposed amendments, is available for public
inspection and copying between the hours of 8:00 a.m. and 5:30 p.m.,
Monday through Friday (except for government holidays) at The Air and
Radiation Docket and Information Center, U.S. Environmental Protection
Agency, 401 M Street SW., Washington, DC 20460. A reasonable fee may be
charged for copying.
FOR FURTHER INFORMATION CONTACT: Mr. George Smith at (919) 541-1549,
Emission Standards Division (MD-13), U. S. Environmental Protection
Agency, Research Triangle Park, North Carolina 27711.
SUPPLEMENTARY INFORMATION: Regulated entities. Entities regulated by
this action are dry cleaning facilities that use perchloroethylene.
Regulated categories and entities include:
------------------------------------------------------------------------
Examples of regulated
Category entities
------------------------------------------------------------------------
Perchloroethylene dry cleaning facilities. Perchloroethylene dry
cleaning facilities that
installed transfer machines
between proposal and
promulgation.
------------------------------------------------------------------------
The above table is an exhaustive guide for readers regarding
entities to be regulated by this action.
The information presented in this preamble is organized as follows:
I. Background, Summary, and Rationale for Rule Changes
II. Administrative Requirements
A. Paperwork Reduction Act
B. Executive Order 12866 Review
C. Unfunded Mandates Act
D. Regulatory Flexibility Act
I. Background, Summary, and Rationale for Rule Changes
National emission standards for hazardous air pollutants (NESHAP)
for perchloroethylene (PCE) dry cleaning facilities were promulgated on
September 22, 1993 (58 FR 49354), and amended on December 20, 1993 (58
FR 66287), as 40 CFR Part 63, subpart M. On December 20, 1993, the
International Fabricare Institute (IFI), a trade association
representing commercial and industrial dry cleaners nationwide,
submitted a statement of issues to the U.S. Court of Appeals for the
District of Columbia Circuit challenging the NESHAP. The Agency
subsequently entered into a settlement agreement with IFI, notice of
which was published prior to being lodged with the court (60 FR 52000,
October 4, 1995).
International Fabricare Institute raised the issue of new transfer
machines purchased or installed between proposal and promulgation. The
IFI's concern stems from the fact that the Agency did not propose to
ban new transfer machines, yet at promulgation did ban such machines.
The IFI argued that dry cleaners who installed new transfer machines
between proposal and promulgation did so with the understanding that
the Agency had not proposed any prohibitions against this. These dry
cleaners now have no recourse but to scrap these new transfer machines
and replace them with new dry-to-dry machines in order to comply with
the NESHAP. The IFI asserted that this is unfair, given these dry
cleaners acted in accordance with the law to the best of their
knowledge at the time.
At the time of proposal, the Agency believed that no new transfer
machines were being sold or installed, and for this reason did not
propose to ban purchase of new transfer machines. However, due to new
information that the Agency received after proposal that is explained
in the preamble to the final rule, the Agency banned the purchase of
new transfer machines. The ban was considered reasonable because the
Agency's analysis showed that emissions from clothing transfer could be
eliminated by requiring dry-to-dry machines in their place. Emissions
from clothing transfer account for about 25 percent of transfer machine
emissions. The Agency's analysis also showed that in the typical case
where a new dry-to-dry machine was installed instead of a new transfer
machine, a net savings of $300 per ton of emission reductions would be
realized by the dry cleaner. Hence, the Agency decided at promulgation
to effectively ``ban'' new transfer machines from being introduced
subsequent to promulgation, by making the emission limit for new
transfer machines impossible to achieve. It was believed this decision
would have no impact on dry cleaners, since no new transfer machines
were being purchased or installed. It was only after promulgation that
it became apparent that a few new transfer machines had been sold and
installed between proposal and promulgation of the NESHAP.
The Agency agrees with IFI on this issue. Consequently, the
Administrator proposes to subcategorize new transfer machines into two
types: new transfer machines installed after promulgation (i.e.,
September 22, 1993) and new transfer machines installed between
proposal (i.e., December 9, 1991) and promulgation (i.e., September 22,
1993). The requirements the Administrator is proposing today for new
transfer machines installed after promulgation
[[Page 19888]]
do not change from what they are in the NESHAP--under no circumstances
are new transfer machines installed after promulgation allowed to
operate. The requirements the Administrator is proposing today for the
new subcategory, new transfer machines installed between proposal and
promulgation, are similar to those for existing transfer machines.
Creation of the subcategory would recognize differences in the
technologies used at new sources and the achievability of the emissions
limit by these technologies. As noted, at the time it set the emissions
limit, the Agency failed to recognize that some owners and operators
had installed transfer machines after the proposal. Transfer machine
technology is fundamentally different than dry-to-dry technology. In
order to stay in business, an owner or operator that had installed new
transfer machines after proposal would have to purchase both a transfer
machine system and a dry-to-dry system in time period between December
9, 1991 (proposal) and September 22, 1996 (final rule compliance date),
while an owner and operator of a new source built after promulgation
would only have to purchase one dry-to-dry system. The investment
required for parties that had installed transfer machines would not be
achievable for these parties, which are mostly small businesses. The
proposal would not sacrifice significant emissions reductions because
the number of affected machines is approximately one-tenth of one
percent of all dry-cleaning machines. Today's proposal would allow for
the greatest achievable emissions reductions by both those who had
installed transfer machines prior to issuance of the final rule and all
other new sources and would maintain the prospective prohibition on new
transfer machines.
II. Administrative Requirements
A. Paperwork Reduction Act
The information collection requirements of the previously
promulgated NESHAP for PCE Dry Cleaning Facilities were submitted to
and approved by the Office of Management and Budget. A copy of this
Information Collection Request (ICR) document (OMB control number 2060-
0234) may be obtained from Sandy Farmer, Information Policy Branch (PM-
223Y); U.S. Environmental Protection Agency; 401 M Street, SW;
Washington, DC 20460 or by calling (202) 260-2740. Today's changes to
the NESHAP for PCE Dry Cleaning Facilities do not affect the
information collection burden estimates made previously.
B. Executive Order 12866 Review
Under Executive Order 12866 [58 FR 51735, (October 4, 1993)], the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines a ``significant regulatory action''
as one that is likely to result in a rule that may:
1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
3. Materially alter the budgetary impact of entitlements, grants,
user fees, or land programs or the rights and obligations of recipients
thereof; or
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
This rule was classified ``non-significant'' under Executive Order
12866 and, therefore, was not reviewed by the Office of Management and
Budget.
C. Unfunded Mandates Act
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 statement to accompany any proposed rule where the
estimated costs to State, local, or tribal governments, or to the
private sector, will be $100 million or more in any one year. Under
Section 205, EPA must select the most cost-effective and least
burdensome alternative that achieves the objective 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 impacted by the rule. The unfunded mandates
statement under Section 202 must include: (1) a citation of the
statutory authority under which the rule is proposed, (2) an assessment
of the costs and benefits of the rule, including the effect of the
mandate on health, safety, and the environment, and the federal
resources available to defray the costs, (3) where feasible, estimates
of future compliance costs and disproportionate impacts upon particular
geographic or social segments of the nation or industry, (4) where
relevant, an estimate of the effect on the national economy, and (5) a
description of EPA's prior consultation with State, local, and tribal
officials.
The amendments to the NESHAP that the Administrator is proposing
today will not cause State, local, or tribal governments, or the
private sector to incur costs that will be $100 million or more in any
one year. Rather, the costs involved in this rulemaking are relatively
insignificant in comparison to the $100 million threshold of the
Unfunded Mandates Act. Therefore, the requirements of the Unfunded
Mandates Act are not applicable to this rulemaking.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 requires the identification
of potentially adverse impacts of federal regulations upon small
business entities. The Act specifically requires the completion of a
Regulatory Flexibility Analysis in those instances where small business
impacts are possible. Because this rulemaking imposes no adverse
economic impacts, a Regulatory Flexibility Analysis has not been
prepared.
Pursuant to the provisions of 5 U.S.C. 605(b), I hereby certify
that this rule will not have a significant economic impact on a
substantial number of small business entities.
List of Subjects in 40 CFR Part 63
Environmental protection, Air pollution control, Intergovernmental
relations, Reporting and recordkeeping requirements.
Dated: April 26, 1996.
Carol M. Browner,
Administrator.
Title 40, chapter I, part 63, of the Code of Federal Regulations is
proposed to be amended as follows:
PART 63--NATIONAL EMISSION STANDARDS FOR HAZARDOUS AIR POLLUTANTS
FOR SOURCE CATEGORIES
1. The authority citation for part 63 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart M--National Perchloroethylene Air Emission Standards for
Dry Cleaning Facilities
2. Section 63.320 is amended by revising paragraphs (c), (d), (e),
and (f) to read as follows:
Sec. 63.320 Applicability.
* * * * *
(c) Each dry cleaning system that commenced construction or
reconstruction before December 9, 1991 and each new transfer machine
system
[[Page 19889]]
and its ancillary equipment that commenced construction or
reconstruction on or after December 9, 1991 and before September 22,
1993 shall comply with Secs. 63.322 (c), (d), (i), (j), (k), (l), and
(m), 63.323(d), and 63.324 (a), (b), (d)(1), (d)(2), (d)(3), (d)(4),
and (e) beginning on December 20, 1993 and shall comply with other
provisions of this subpart by September 23, 1996.
(d) Each existing dry-to-dry machine and its ancillary equipment
located in a dry cleaning facility that includes only dry-to-dry
machines, and each existing transfer machine system and its ancillary
equipment and each new transfer machine system and its ancillary
equipment installed between December 9, 1991 and September 22, 1993 as
well as each existing dry-to-dry machine and its ancillary equipment,
located in a dry cleaning facility that includes both transfer machine
system(s) and dry-to-dry machine(s) is exempt from Sec. 63.322,
Sec. 63.323, and Sec. 63.324, except paragraphs 63.322 (c), (d), (i),
(j), (k), (l), and (m), 63.323(d), and 63.324 (a), (b), (d)(1), (d)(2),
(d)(3), (d)(4), and (e) if the total perchloroethylene consumption of
the dry cleaning facility is less than 530 liters (140 gallons) per
year. Consumption is determined according to Sec. 63.323(d).
(e) Each existing transfer machine system and its ancillary
equipment, and each new transfer machine system and its ancillary
equipment installed between December 9, 1991 and September 22, 1993
located in a dry cleaning facility that includes only transfer machine
system(s) is exempt from Sec. 63.322, Sec. 63.323, and Sec. 63.324,
except paragraphs 63.322 (c), (d), (i), (j), (k), (l), and (m),
63.323(d), and 63.324 (a), (b), (d)(1), (d)(2), (d)(3), (d)(4), and (e)
if the perchloroethylene consumption of the dry cleaning facility is
less than 760 liters (200 gallons) per year. Consumption is determined
according to Sec. 63.323(d).
(f) If the total yearly perchloroethylene consumption of a dry
cleaning facility determined according to Sec. 63.323(d) is initially
less than the amounts specified in paragraph (d) or (e) of this
section, but later exceeds those amounts, the existing dry cleaning
system(s) and new transfer machine system(s) and its (their) ancillary
equipment installed between December 9, 1991 and September 22, 1993 in
the dry cleaning facility must comply with Sec. 63.322, Sec. 63.323,
and Sec. 63.324 by 180 calendar days from the date that the facility
determines it has exceeded the amounts specified, or by September 23,
1996, whichever is later.
* * * * *
3. Section 63.322 is amended by revising paragraphs (a)
introductory text and (b) introductory text to read as follows:
Sec. 63.322 Standards.
(a) The owner or operator of each existing dry cleaning system and
of each new transfer machine system and its ancillary equipment
installed between December 9, 1991 and September 22, 1993 shall comply
with either (a)(1) or (a)(2) of this paragraph and shall comply with
(a)(3) of this paragraph if applicable.
* * * * *
(b) The owner or operator of each new dry-to-dry machine and its
ancillary equipment and of each new transfer machine system and its
ancillary equipment installed after September 22, 1993:
* * * * *
[FR Doc. 96-11079 Filed 5-2-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-11078 National Oil and Hazardous Substance Pollution Contingency Plan; National Priorities List
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19889-19891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11078]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 300
[FRL-5465-5]
National Oil and Hazardous Substance Pollution Contingency Plan;
National Priorities List
AGENCY: Environmental Protection Agency.
ACTION: Notice of intent to delete Whiteford Sales & Service Superfund
Site South Bend, Indiana.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) Region 5 announces
its intent to delete the Whiteford Sales & Service, Inc. (WSS) site
from the National Priorities List (NPL) and requests public comment on
this proposed action. As specified in Appendix B of CFR part 300 which
is the National Oil and Hazardous Substances Pollution Contingency Plan
(NCP), which EPA promulgated pursuant to Section 105 of the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA), it has been determined that all appropriate Fund-
financed responses at the site under CERCLA have been implemented. EPA,
in consultation with the State of Indiana, has determined that the WSS
site poses no significant threat to public
[[Page 19890]]
health or the environment and that no further clean-up action at the
site is appropriate. Deletion of a site from the NPL does not preclude
eligibility for subsequent Fund-financed actions if future conditions
warrant such action.
DATES: Comments concerning this proposed NPL deletion may be submitted
June 3, 1996.
ADDRESSES: Comments may be mailed to: Mary Tierney, U.S. EPA Region 5
(SR-6J), 77 W. Jackson Blvd., Chicago, IL 60604.
Comprehensive information on the WSS site is available at the local
information repository located at the St. Joseph County Public Library,
Main Branch, 122 W. Wayne St., South Bend, Indiana. Requests for copies
of documents should be directed to: E. Levy, U.S. EPA Region 5 (MRI-
13J), 77 W. Jackson Blvd., Chicago, IL 60604.
FOR FURTHER INFORMATION CONTACT:
Mary Tierney, U.S. EPA Region 5 (SR-6J), 77 W. Jackson Blvd., Chicago,
IL 60604, (312) 886-4785.
Dave Novak, U.S. EPA Region 5 (P-19J), 77 W. Jackson Blvd., Chicago, IL
60604, (312) 886-9840.
Mary McAuliffe, U.S. EPA Region 5 (C-29A), 77 W. Jackson Blvd.,
Chicago, IL 60604, (312) 886-6237.
Scott Hansen, IDEM, 100 N. Senate Ave., P.O. Box 6015, Indianapolis, IN
46206, (317) 233-0542.
SUPPLEMENTARY INFORMATION:
I. Introduction
II. NPL Deletion Criteria
III. Deletion Procedures
IV. Basis for Intended Site Deletion
V. Conclusion
I. Introduction
The U.S. Environmental Protection Agency (EPA) Region 5 announces
its intent to delete the Whiteford Sales & Service, Inc. (WSS) site
from the National Priorities List (NPL), Appendix B of the National Oil
and Hazardous Substances Pollution Contingency Plan (NCP), 40 CFR Part
300, and requests comments on this proposed deletion. The EPA
identifies sites that appear to present a significant risk to public
health, welfare, or the environment, and maintains the NPL as the list
of those sites. As described in section 300.425(e)(3) of the NCP, sites
deleted from the NPL remain eligible for additional Fund-financed
remedial actions in the unlikely event that conditions at the site
warrant such actions.
EPA will accept comments on this proposal to delete the WSS site
from the NPL for 30 days after publication of this notice in the
Federal Register.
Section II of this notice explains the criteria for deleting sites
from the NPL. Section III discusses procedures that EPA is using for
this action. Section IV discusses the history of the WSS site and
explains how the site meets the deletion criteria. Section V summarizes
the conclusions of this notice.
II. Deletion Criteria
The 1985 amendments to the NCP established the criteria the EPA
uses to delete a site from the NPL. Section 40 CFR 300.425(e) provides
that sites ``may be deleted from or recategorized on the NPL where no
further response is appropriate''. In making a determination to delete
a site from the NPL, EPA shall consider, in consultation with the
State, whether any of the following criteria have been met:
(i) Responsible parties or other parties have implemented all
appropriate response actions required;
(ii) All appropriate Fund-financed response under CERCLA has been
implemented, and no further action by responsible parties is
appropriate; or
(iii) The remedial investigation has shown that the release poses
no significant threat to public health or the environment and,
therefore, taking of remedial measures is not appropriate under CERCLA.
Deletion of a site from the NPL does not preclude its eligibility
for subsequent Fund-financed actions if future site conditions warrant
such actions. Section 300.425(e)(3) of the NCP states that Fund-
financed actions may be taken at sites that have been deleted from the
NPL. Deletion of sites from the NPL does not itself create, alter, or
revoke any individual's rights or obligations.
III. Deletion Procedures
Upon determination that at least one of the criteria described in
section 300.425(e) of the NCP has been met, EPA may formally begin
deletion procedures. The steps that have occurred prior to publication
of this notice of intent to delete from the NPL are: (1) EPA, with the
concurrence of the Indiana Department of Environmental Management
(IDEM), issued a Record of Decision (ROD) which provided for No Action
to be taken at the WSS site; (2) IDEM concurred with the proposed
deletion decision; and (3) a local information repository was updated
and a deletion docket established. This Federal Register notice, and a
concurrent notice in the local newspaper in the site area, announce the
initiation of a 30-day public comment period on EPA's notice of intent
to delete the WSS site from the NPL. The notice has also been
distributed to appropriate federal, state, and local officials, and
other interested parties.
All comments from the public on EPA's intention to delete the WSS
site from the NPL are requested at this time. Critical documents for
evaluating EPA's decision are available in the information repository
and deletion docket at the location listed on the first page of this
notice. Upon completion of the public comment period, the EPA Regional
Office will prepare a responsiveness summary to evaluate and address
concerns which were raised during the comment period. The public is
welcome to contact the EPA Regional Office to obtain a copy of this
responsiveness summary. If, after reviewing public comments, EPA still
determines that deletion from the NPL is appropriate for this site, a
Final Notice of Deletion will be published in the Federal Register. The
WSS site will then be officially deleted at the time of the subsequent
NPL rulemaking.
IV. Basis for Intended Site Deletion
The following summary provides the EPA's rationale for the proposal
to delete the WSS site from the NPL.
A. Site Background
The WSS site covers an area of approximately 11 acres and was
formerly the location of a truck washing and leasing operation. The
site is located within the city limits of South Bend, St. Joseph
County, Indiana, approximately 1\1/2\ miles southwest of downtown. The
area in the vicinity of the site is primarily commercial and light
industrial in nature. Exit and entrance ramps for a street overpass
border the site on its north and west sides, a scrap yard is located
east of the site, and truck warehousing operations are located to the
south. A municipal well field, currently not in operation, is located
800 feet west of the site. The WSS site now serves as a storm water
retention basin for collection of run-off from the adjacent street
overpass and from nearby streets.
B. Site History
Truck washing and leasing activities occurred at the WSS site from
1967 through 1983. During its operation, the facility used various
solvents and detergents to clean and degrease truck frames and engines.
Floor drains in the truck washing areas discharged to three unlined dry
wells on the property.
In 1980, St. Joseph County purchased the property from the former
owners in order to construct the street overpass now adjacent to the
site. Truck washing
[[Page 19891]]
operations continued at the site until 1983 when overpass construction
work began. Excavation activities conducted as part of the overpass
construction led to the discovery of the three on-site dry wells.
Sludge from the wells was found to be Resource Conservation and
Recovery Act (RCRA) characteristic due to ignitability. In June 1987,
under a Consent Decree signed by the former owners of the property, St.
Joseph County and IDEM, approximately 210 cubic yards of soil and
sludge were removed from in and around the dry wells and disposed of
properly. Because a RCRA facility upgradient from the WSS site was a
documented source of volatile organic compound (VOC) groundwater
contamination, it was not clear what contribution the contamination on
the WSS site may have had on the adjacent municipal well field. Due to
the historical VOC contamination of the municipal well field west of
the site, the potential for groundwater contamination at the WSS site
to migrate to the well field, and the soil contamination discovered at
WSS, the site was scored using the Hazard Ranking System (HRS) method,
was proposed for NPL listing in June 1988, and was placed on the NPL in
October 1990. A remedial investigation was conducted at the site from
September to December 1990 to characterize the nature and extent of
contamination and to assess potential risks to human health and the
environment that the site posed.
Based on the results of the remedial investigation and the site
baseline risk assessment, a Proposed Plan recommending No Action was
prepared. A public meeting was held to address questions about the
recommendation, and EPA responded to all public comments. None of the
comments received voiced objections to the recommended action. A ROD
for the WSS site was signed on September 29, 1995, which documented the
decision that no further remedial action was necessary at the site due
to the lack of unacceptable risks posed by the site to human health and
the environment.
C. Characterization of Risk
The remedial investigation of the WSS site included the collection
of seventeen (17) surface and subsurface soil samples, the installation
and sampling of eleven (11) monitoring wells, and the collection of
groundwater samples from one adjacent extraction well and six municipal
wells. All samples were analyzed for VOCs, semi-volatile organic
compounds (SVOCs), base/neutral extractable compounds, pesticides,
polychlorinated biphenyls, and inorganic compounds (including metals).
Sampling results were used to prepare a baseline risk assessment for
the site. After results from the baseline risk assessment were
carefully analyzed by an EPA toxicologist, EPA determined that the WSS
site does not pose a significant current or future risk to human health
or the environment. An investigation at and cleanup of the RCRA
facility upgradient of the WSS site that is a documented source of VOC
contamination in groundwater continues under oversight from the RCRA
Program. In addition, monitoring of wells in all of the City of South
Bend municipal well fields continues under the auspices of the State of
Indiana to ensure that all requirements of the Safe Drinking Water Act
(SDWA) are being met.
V. Conclusion
One of the three criteria for deletion specifies that EPA may
delete a site from the NPL if ``the remedial investigation has shown
that the release poses no significant threat to public health or the
environment and, therefore, taking of remedial measures is not
appropriate''. EPA, with concurrence from IDEM, has determined that
this criterion for deletion has been met. Consequently, EPA is
proposing deletion of the WSS site from the NPL. Documents supporting
this action are available in the site deletion docket.
Dated: April 11, 1996.
David A. Ullrich,
Acting Regional Administrator.
[FR Doc. 96-11078 Filed 5-2-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-11074 Exceptions to Worker Protection Standard Early Entry Restrictions; Limited Contact Activities; Correction
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Page 19889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11074]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 170
[OPP-250101B; FRL-5366-2]
Exceptions to Worker Protection Standard Early Entry
Restrictions; Limited Contact Activities; Correction
AGENCY: Environmental Protection Agency (EPA).
ACTION: Correction.
-----------------------------------------------------------------------
SUMMARY: EPA issued a document in the Federal Register that proposed a
rule change allowing early entry into pesticide-treated areas. In that
proposal, EPA indicated that methyl parathion requires both oral and
written notification (``double notification'') of agricultural workers
when it is applied. Methyl parathion was mentioned incorrectly, as the
Agency had previously determined that its acute dermal toxicity is
Toxicity Category II, which does not require double notification.
Moreover, a study of methyl parathion's potential for acute dermal
irritation demonstrated that it is Toxicity Category IV and that it is
not a skin sensitizer.
FOR FURTHER INFORMATION CONTACT: Joshua First, Office of Pesticide
Programs (7506C), Environmental Protection Agency, 401 M St., SW.,
Washington, DC 20460. Office location, telephone number, and e-mail
address: 1921 Jefferson Davis Highway, Crystal Mall #2, Rm. 1121,
Arlington, VA, 703-305-7437, e-mail: [email protected]
SUPPLEMENTARY INFORMATION: In the Federal Register of January 11, 1995
(60 FR 2842) (FRL-4930-4), EPA issued a proposed rule to change
allowing early entry into pesticide-treated areas under certain
conditions (the proposal was subsequently finalized on May 3, 1995 (60
FR 21955) (FRL-4950-4). In the January 11th proposal, EPA described
some pesticides whose labeling requires ``double notification'' when
those pesticides are applied. The ``double notification'' requirement
is set by the Worker Protection Standard (40 CFR part 170). EPA is
hereby stating that its previous indication that methyl parathion
requires ``double notification'' was incorrect. Methyl parathion does
not require ``double notification.''
Lists of Subjects
Environmental protection, Administrative practice and procedure,
Labeling, Occupational safety and health, Pesticides and pests.
Dated: April 26, 1996.
Daniel M. Barolo,
Director, Office of Pesticide Programs.
[FR Doc. 96-11074 Filed 5-2-96; 8:45 am]
BILLING CODE 6560-50-F
Complete official Federal Register PDF
FR Doc. 96-11048 Oil Pipeline Cost-of-Service Filing Requirements; Notice of Proposed Rulemaking
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19878-19880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11048]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 346
[Docket No. RM96-10-000]
Oil Pipeline Cost-of-Service Filing Requirements; Notice of
Proposed Rulemaking
April 29, 1996.
AGENCY: Federal Energy Regulatory Commission (Commission).
ACTION: Notice of Proposed Rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes
to revise Part 346 of its regulations to make the cost-of-service
filing requirements of that Part applicable to the Trans-Alaska
Pipeline System (TAPS) carriers and carriers delivering oil directly or
indirectly to TAPS. These carriers were inadvertently excluded from the
streamlined procedural rules in Part 346 required by the Energy Policy
Act of 1992.
DATES: Comments are due on or before June 3, 1996.
[[Page 19879]]
ADDRESSES: An original and 14 copies of written comments on this
proposed rule must be filed in Docket No. RM96-10-000. All filings
should refer to Docket No. RM96-10-000 and should be addressed to:
Office of the Secretary, Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426.
FOR FURTHER INFORMATION CONTACT: Jacob Silverman, Office of the General
Counsel, Federal Energy Regulatory Commission, 888 First Street NE.,
Washington, DC 20426, Telephone: (202) 208-2078.
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission also provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours in Room 2-A, 888 First
Street, N.E. Washington, D.C. 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing (202) 208-1397 if dialing locally or 1-800 856-3920 if dialing
long distance. To access CIPS, set your communications software to
19200, 14400, 12000, 9600, 7200, 4800, 2400 or 1200bps, full duplex, no
parity, 8 data bits, and 1 stop bit. The full text of this document
will be available on CIPS indefinitely in ASCII and WordPerfect 5.1
format for one year. The complete text on diskette in WordPerfect
format may also be purchased from the Commission's copy contractor, La
Dorn Systems Corporation, also located in Room 2-A, 888 First Street,
N.E., Washington, D.C. 20426.
The Commission's bulletin board system can also be accessed through
the FedWorld system directly by modem or through the Internet. To
access the FedWorld system by modem: Dial (703) 321-3339 and logon to
the FedWorld system.
After logging on, type: /go FERC
To access the FedWorld system, through the Internet:
Telnet to: fedworld.gov
Select the option: [1] FedWorld
Logon to the FedWorld system
Type: /go FERC
The Federal Energy Regulatory Commission (Commission) proposes to
revise Part 346 of its regulations to make the cost-of-service filing
requirements of that Part applicable to the Trans-Alaska Pipeline
System (TAPS) carriers and carriers delivering oil directly or
indirectly to TAPS.
I. Background
Order No. 561 1 was issued on October 22, 1993, to comply with
the Energy Policy Act of 1992 (Act of 1992),2 which required the
Commission to establish a simplified and generally applicable
ratemaking methodology for oil pipelines and to streamline its
procedures relating to oil pipeline rates. The Act of 1992 excluded
TAPS, and any pipeline delivering oil directly or indirectly to TAPS,
from its provisions for ratemaking purposes. Thus, Order No. 561 stated
that TAPS and the other excluded pipelines would continue to be
governed by their existing rate methodologies,3 but also would be
subject to the Commission's new procedural rules. Thereafter, on
October 28, 1994, as a companion to Order No. 561, the Commission
issued Order No. 571, establishing in Part 346 of its regulations cost-
of-service filing requirements for oil pipelines.4 These
procedural requirements include all the information necessary to
support a rate filing under the Opinion No. 154-B methodology. However,
the existing provisions of Part 346 do not apply to TAPS or its feeder
lines.5
---------------------------------------------------------------------------
\1\ Revisions to Oil Pipeline Regulations Pursuant to the Energy
Policy Act of 1992, Order No. 561, FERC Statutes & Regulations para.
30,985 (1993); Order on Rehearing, Order No. 561-A, FERC Statutes &
Regulations para. 31,000 (1994); 58 FR 58778, Nov. 4, 1993.
\2\ 42 U.S.C. 7172 note (West Supp. 1993).
\3\ TAPS and the excluded pipelines would continue to justify
their rates either in accordance with an applicable settlement
methodology such as, for example, the TAPS Settlement Methodology,
or under the Opinion No. 154-B cost-of-service methodology.
\4\ Cost-of-Service Reporting and Filing Requirements for Oil
Pipelines, FERC Statutes & Regulations 31,006 (1994).
\5\ See, Milne Point Pipeline Company, 75 FERC para. 61,050
(1996).
---------------------------------------------------------------------------
II. Public Reporting Burden
The Commission estimates the public reporting burden for the
collection of information under the proposed rule will remain unchanged
for rate filings, since what the Commission proposes to codify as the
information to be provided is that which the Commission's staff
routinely has requested of oil pipelines for cost-of-service rate
filings in the past. The information will be collected on FERC-550,
``Oil Pipeline Rates: Tariff Filings.'' 6 This estimate includes
the time for reviewing instructions, researching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information. The current annual reporting burden
associated with this information collection requirement was described
in Order No. 571 and included the burden attributable to all oil
pipelines, including TAPS and its feeder lines, as follows: FERC-550:
5,350 hours, 535 responses, and 140 respondents.
---------------------------------------------------------------------------
\6\ FERC-550 is the designation covering oil pipeline tariff
filings made to the Commission.
---------------------------------------------------------------------------
Comments regarding this burden estimate or any other aspect of this
collection of information, including suggestions for reducing this
burden, can be sent to the Federal Energy Regulatory Commission, 888
First Street, N.E., Washington, DC 20426 [Attention: Michael Miller,
Information Services Division, (202) 208-1415]; and to the Office of
Information and Regulatory Affairs of OMB (Attention: Desk Officer for
Federal Energy Regulatory Commission), FAX: (202) 395-5167.
III. Discussion
It has always been the Commission's intent to exclude TAPS and its
feeder lines only from the simplified ratemaking methodology adopted in
Order No. 561, not from the streamlined procedural rules required by
the Act of 1992. Thus, the Commission stated in Order No. 561: 7
\7\ FERC Statutes & Regulations para. 30,985 at 30,961.
---------------------------------------------------------------------------
For ratemaking purposes, TAPS and those excluded pipelines [the
TAPS feeder lines] will continue to be regulated under the
ratemaking standards that are currently in effect. However, it is
the Commission's judgment that such exclusion [of TAPS and its
feeder lines from the provisions of the Energy Policy Act of 1992]
was intended to apply only to the simplified and generally
applicable rate methodology, not to the procedural rules that the
Act of 1992 required the Commission to consider. Otherwise, the
Commission would be required to enforce one set of procedural rules
for TAPS and excluded pipelines and another for all other pipelines
under its jurisdiction under the ICA. This would not be consistent
with Congress' intent for the Commission to streamline its
procedures for oil pipelines.
Likewise, the Commission meant the procedural rules of Part 346 to
apply to TAPS and its feeder lines, but Order No. 571 neglected to
include them. This is the interpretation that is consistent with the
mandate of the Act of 1992 that the Commission streamline its
procedures in order to avoid unnecessary regulatory costs and delays,
and with the Commission's explicit desire to enforce one set of
procedural rules for all pipelines. However, Part 346 of the
regulations governing oil pipeline filing requirements inadvertently
excluded TAPS and its feeder pipelines.
[[Page 19880]]
Accordingly, the Commission proposes to amend Part 346 to apply to TAPS
and its feeder lines. Thus, the TAPS carriers and the TAPS feeder lines
will be required to comply with the cost-of-service filing requirements
of Part 346 when they seek to establish rates under the Opinion No.
154-B methodology. These requirements are no more than a codification
of the information that these carriers now must provide routinely in
response to the Commission staff's requests for information to support
their cost-of-service rate filings, and, thus, should not create any
additional burden for carriers making cost-of-service filings.
Carriers' including cost-of service supporting information with their
initial filings instead of filing it at a time later in the regulatory
process also will satisfy the requirement of the Act of 1992 to avoid
unnecessary regulatory costs and delays.
IV. Environmental Analysis
The Commission is required to prepare an Environmental Assessment
or an Environmental Impact Statement for any action that may have a
significant adverse effect on the human environment.\8\ The Commission
has categorically excluded certain actions from these requirements as
not having a significant effect on the human environment.\9\ The action
proposed here is procedural in nature and therefore falls within the
categorical exclusions provided in the Commission's regulations.\10\
Therefore, neither an environmental impact statement nor an
environmental assessment is necessary and will not be prepared in this
rulemaking.
---------------------------------------------------------------------------
\8\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes
and Regulations (Regulations Preambles 1986-1990) para. 30,783
(1987).
\9\ 18 CFR 380.4.
\10\ See 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------
V. Regulatory Flexibility Act Certification
The Regulatory Flexibility Act \11\ generally requires the
Commission to describe the impact that a proposed rule would have on
small entities or to certify that the rule will not have a significant
economic impact on a substantial number of small entities. An analysis
is not required if a proposed rule will not have such an impact.\12\
---------------------------------------------------------------------------
\11\ 5 U.S.C. 601-612.
\12\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------
Pursuant to section 605(b), the Commission certifies that the
proposed rules and amendments, if promulgated, will not have a
significant adverse economic impact on a substantial number of small
entities.
VI. Information Collection Requirements
Office of Management and Budget (OMB) regulations require OMB to
approve certain information collection requirements imposed by an
agency. \13\ The information collection requirements in this proposed
rule are contained in FERC-550 ``Oil Pipeline Rates: Tariff filings''
(1902-0089).
---------------------------------------------------------------------------
\13\ 5 CFR 1320.11.
---------------------------------------------------------------------------
The Commission's Office of Pipeline Regulation uses the data
collected in these information requirements to investigate the rates
charged by oil pipeline companies subject to its jurisdiction, to
determine the reasonableness of rates, and when appropriate prescribe
just and reasonable rates.
The revisions in the proposed rule will not change the reporting
requirements of FERC-550. This rule therefore is not subject to OMB
review. Nevertheless, the Commission is submitting a copy of the
proposed rule to OMB for informational purposes. Interested persons may
obtain information on these reporting requirements by contacting the
Federal Energy Regulatory Commission, 888 First Street, N.E.,
Washington, DC 20426 [Attention: Michael Miller, Information Services
Division, (202) 208-1415]. Comments on the requirements of this rule
can be sent to the Office of Information and Regulatory Affairs of OMB
(Attention: Desk Officer for Federal Energy Regulatory Commission),
FAX: (202) 395-5167.
VII. Comment Procedures
Copies of this notice of proposed rulemaking can be obtained from
the Public Reference and Files Maintenance Branch, Room 2-A, 888 First
Street, N.E., Washington, D.C. 20426. Any person desiring to file
comments should submit an original and fourteen (14) copies of such
comments to the Federal Energy Regulatory Commission, 888 First Street,
N.E., Washington, D.C. 20426, not later than June 3, 1996.
All written comments will be placed in the Commission's public
files and will be available for public inspection in the Commission's
public reference room at 888 First Street, N.E., Washington, DC 20426,
during regular business hours.
List of Subjects
18 CFR Part 346
Pipelines, Reporting and recordkeeping requirements.
By direction of the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.
In consideration of the foregoing, the Commission gives notice of
its proposal to amend Part 346, Chapter I, Title 18, Code of Federal
Regulations, as set forth below.
PART 346--OIL PIPELINE COST-OF-SERVICE FILING REQUIREMENTS
1. The authority citation for Part 346 continues to read as
follows:
Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C.
1-85.
2. Sections 346.1 introductory text and 346.2 introductory text are
proposed to be revised as follows:
Sec. 346.1 Content of filing for cost-of-service rates.
A carrier that seeks to establish rates pursuant to Sec. 342.2(a)
of this chapter, or a carrier that seeks to change rates pursuant to
Sec. 342.4(a) of this chapter, or a carrier that otherwise seeks to
establish or change rates by filing cost, revenue, and throughput data
supporting such rates, must file:
* * * * *
Sec. 346.2 Materials in support of initial rates or change in rates.
A carrier that files for rates pursuant to Sec. 342.2(a) or
Sec. 342.4(a) of this chapter, or a carrier that otherwise files to
establish or change rates by filing cost, revenue, and throughput data
supporting such rates, must file the following statements, schedules,
and supporting workpapers. The statement, schedules, and workpapers
must be based upon an appropriate test period.
* * * * *
[FR Doc. 96-11048 Filed 5-2-96; 8:45 am]
BILLING CODE 6717-01-P
Complete official Federal Register PDF
FR Doc. 96-11037 Extension of Comment Period; Guides for Private Vocational Schools
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Page 19869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11037]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
16 CFR Part 254
Extension of Comment Period; Guides for Private Vocational
Schools
AGENCY: Federal Trade Commission.
ACTION: Extension of time for filing public comments.
-----------------------------------------------------------------------
SUMMARY: The Federal Trade Commission (the ``Commission''), as part of
a systematic review of all of its current regulations and guides,
requested public comments on April 3, 1996 about its Guides for Private
Vocational Schools. 61 FR 14685. The Commission solicited comments
until May 3, 1996. In response to requests from interested parties, the
Commission grants an extension of the time period to file written
comments.
DATES: Written comments will be accepted until July 1, 1996.
FOR FURTHER INFORMATION CONTACT: Joseph J. Koman, Jr., Federal Trade
Commission, Bureau of Consumer Protection, Division of Enforcement,
Room S-4302, 601 Pennsylvania Avenue NW., Washington, D.C. 20580, (202)
326-3014, or Walter Gross III, Federal Trade Commission, Bureau of
Consumer Protection, Division of Service Industry Practices, Room H-
200, Sixth Street and Pennsylvania Avenue NW., Washington, D.C. 20580,
(202) 326-3319.
List of Subjects in 16 CFR Part 254
Advertising, Trade practices.
Authority: 15 U.S.C. 41-58.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 96-11037 Filed 5-2-96; 8:45 am]
BILLING CODE 6750-01-M
Complete official Federal Register PDF
FR Doc. 96-11030 Airworthiness Directives; The New Piper Aircraft, Inc. (formerly Piper Aircraft Corporation) PA31, PA31P, and PA31T Series Airplanes
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19865-19867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11030]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-CE-45-AD]
RIN 2120--AA64
Airworthiness Directives; The New Piper Aircraft, Inc. (formerly
Piper Aircraft Corporation) PA31, PA31P, and PA31T Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes to supersede AD 93-25-08, which
currently requires replacing the main landing gear (MLG) actuator
reinforcement bracket with a part of improved design on certain The New
Piper Aircraft, Inc. (Piper) PA31, PA31P, and PA31T series airplanes.
The proposed action would require the same action as AD 93-25-08. An
incorrect designation of Piper Model PA31-310 airplanes made in AD 93-
25-08 prompted the proposed AD action. The actions specified by the
proposed AD are intended to prevent the MLG from extending, when not
selected and while the airplane is in flight, caused by actuator
reinforcement bracket failure, which could result in substantial
airplane damage or loss of control of the airplane.
DATES: Comments must be received on or before July 8, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Central Region, Office of the Assistant Chief
Counsel, Attention: Rules Docket No. 95-CE-45-AD, Room 1558, 601 E.
12th Street, Kansas City, Missouri 64106. Comments may be inspected at
this location between 8 a.m. and 4 p.m., Monday through Friday,
holidays excepted.
Service information that applies to the proposed AD may be obtained
from The New Piper Aircraft, Inc., Attn: Customer Service, 2926 Piper
Dr., Vero Beach, Florida, 32960. This information also may be examined
at the Rules Docket at the address above.
FOR FURTHER INFORMATION CONTACT: Christina Marsh, Aerospace Engineer,
FAA, Atlanta Aircraft Certification Office, Campus Building, 1701
Columbia Avenue, suite 2-160, College Park, Georgia 30337-2748;
telephone (404) 305-7362; facsimile (404) 305-7348.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications should identify the Rules Docket number
and be submitted in triplicate to the address specified above. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report that summarizes each FAA-public contact concerned
with the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket No. 95-CE-45-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA, Central Region, Office of the Assistant Chief Counsel,
Attention: Rules Docket No. 95-CE-45-AD, Room 1558, 601 E. 12th Street,
Kansas City, Missouri 64106.
Discussion
It has been brought to the attention of the FAA that AD 93-25-08,
which is applicable to Piper PA31, PA31P, and PA31T series airplanes,
should not have listed a Piper Model PA31-310 airplane.
[[Page 19866]]
The Piper Model PA31-310 airplane is not a recognized model on Type
Certificate Data Sheet No. A20SO. The data plate for the airplane
subject to the AD states Piper Model PA31, not a Piper Model PA31-310.
A concern was raised that some owners/operators of Model PA31 airplanes
may not have complied with AD 93-25-08, since the AD currently
specifies the airplane as a Piper Model PA31-310, even though their
serial number falls within the serial number range in the current AD.
For this reason, the FAA is proposing to supersede the current AD to
change the model designation in the Applicability section of the AD
from Piper Model PA31-310 airplanes to Piper Model PA31 airplanes.
Piper has issued Service Bulletin (SB) No. 923, dated August 16,
1989, which specifies replacing any MLG actuator reinforcement bracket
having part number (P/N) 40776-00 with a new MLG actuator reinforcement
bracket, P/N 73786-02.
After examining the circumstances and reviewing all available
information related to the incidents described above, the FAA has
determined that AD action should be taken to prevent the MLG from
extending, when not selected and while the airplane is in flight,
because of actuator reinforcement bracket failure, which could result
in substantial airplane damage or loss of control of the airplane.
Since an unsafe condition has been identified that is likely to
exist or develop in other Piper Model PA31 airplanes of the same type
design, instead of Piper Model PA31-310, the proposed AD would
supersede AD 93- 25-08 with a new AD that would retain the same
requirements as AD 93-25-08 and change the model designation in the
Applicability section from Piper Model PA31-310 airplanes to Piper
Model PA31 airplanes.
The FAA estimates that 2,448 airplanes in the U.S. registry would
be affected by the proposed AD, that it would take approximately 4
workhours to accomplish the proposed action, and that the average labor
rate is approximately $60 an hour. Parts cost approximately $308 per
airplane. Based on these figures, the total cost impact of the proposed
AD on U.S. operators is estimated to be $1,341,504. AD 93-25-08
currently requires the same actions as is proposed. The only difference
between the proposed AD and AD 93-25-08 is the change in model
designation from PA31-310 to PA31. With this in mind, the proposed
action would not provide any additional cost impact upon U.S. operators
over that already required by AD 93-25-08.
The regulations proposed herein would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated,
will not have a significant economic impact, positive or negative, on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act. A copy of the draft regulatory evaluation
prepared for this action has been placed in the Rules Docket. A copy of
it may be obtained by contacting the Rules Docket at the location
provided under the caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend 14
CFR part 39 of the Federal Aviation Regulations as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by removing AD 93-25-08, Amendment 39-
8774, and by adding the following new airworthiness directive:
The New Piper Aircraft, Inc.: Docket No. 95-CE-45-AD; Supersedes AD
93-25-08, Amendment 39-8774.
Applicability: The following Model and serial number airplanes,
certificated in any category.
------------------------------------------------------------------------
Model Serial No.
------------------------------------------------------------------------
PA31, PA31-300, and PA31-325. 31-2 through 31-8312019.
PA31-350..................... 31-5001 through 31-8553002.
PA31P........................ 31P-1 through 31P-7730012.
PA31P-350.................... 31P-8414001 through 31P-8414050.
PA31T........................ 31T-7400001 through 31T-8120104.
PA31T1....................... 31T-7804001 through 31T-8304003 and 31T-
1104004 through 31T-1104017.
PA31T2....................... 31T-8166001 through 31T-8166076 and 31T-
1166001 through 31T-1166008.
PA31T3....................... 31T-8275001 through 31T-8475001 and 31T-
5575001.
------------------------------------------------------------------------
Note 1: This AD applies to each airplane identified in the
preceding applicability revision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (c) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it. Compliance: Required within the next 200 hours time-in-
service (TIS) after February 11, 1994 (effective date of AD 93-25-
08) or within the next 25 hours TIS after the effective date of this
AD, whichever occurs later, unless already accomplished.
To prevent the main landing gear (MLG) from extending, when not
selected and while the airplane is in flight, because of actuator
reinforcement bracket failure, which could result in substantial
airplane damage or loss of control of the airplane, accomplish the
following:
(a) Replace any MLG actuator reinforcement bracket having part
number (P/N) 40776-00 with a new MLG actuator reinforcement bracket,
P/N 73786-02, in accordance with the INSTRUCTIONS section of Piper
Service Bulletin (SB) No. 923, dated August 16, 1989.
(b) Special flight permits may be issued in accordance with 14
CFR 21.197 and 21.199 to operate the airplane to a location where
the requirements of this AD can be accomplished.
[[Page 19867]]
(c) An alternative method of compliance or adjustment of the
compliance time that provides an equivalent level of safety may be
approved by the Manager, FAA, Atlanta Aircraft Certification Office,
Campus Building, 1701 Columbia Avenue, suite 2-160, College Park,
Georgia 30337-2748. The request shall be forwarded through an
appropriate FAA Maintenance Inspector, who may add comments and then
send it to the Manager, Atlanta Aircraft Certification Office.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Atlanta Aircraft Certification Office.
(d) Alternative methods of compliance approved in accordance
with AD 93-25-08 (superseded by this action) are considered approved
as alternative methods of compliance with this AD.
(e) All persons affected by this directive may obtain copies of
the document referred to herein upon request to The New Piper
Aircraft, Inc., Attn: Customer Service, 2926 Piper Dr., Vero Beach,
Florida, 32960; or may examine this document at the FAA, Central
Region, Office of the Assistant Chief Counsel, Room 1558, 601 E.
12th Street, Kansas City, Missouri 64106.
(f) This amendment supersedes AD 93-25-08, Amendment 39-8774.
Issued in Kansas City, Missouri, on April 26, 1996.
Michael Gallagher,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 96-11030 Filed 5-2-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-11027 Airworthiness Directives; The New Piper Aircraft, Inc. (Formerly Piper Aircraft Corporation) PA23, PA31, PA31P, PA31T, and PA42 Series Airplanes
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19867-19869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11027]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-CE-56-AD]
RIN 2120-AA64
Airworthiness Directives; The New Piper Aircraft, Inc. (Formerly
Piper Aircraft Corporation) PA23, PA31, PA31P, PA31T, and PA42 Series
Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes to supersede AD 86-17-07, which
currently requires replacing all hydraulic hoses with hydraulic hoses
of an improved design on certain The New Piper Aircraft, Inc. (Piper)
PA23, PA31, PA31P, PA31T, and PA42 series airplanes. The proposed
action would require inspecting for improperly manufactured hydraulic
hoses replaced during a specific time frame and replacing all affected
hydraulic hoses. An incorrect designation of a Piper Model PA31-310 and
a Piper Model PA23-150 airplane prompted the proposed AD action. The
action specified by the proposed AD is intended to prevent hydraulic
hose failure which could cause loss of hydraulic capabilities resulting
in a gear-up landing and possible loss of the airplane.
DATES: Comments must be received on or before July 8, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Central Region, Office of the Assistant Chief
Counsel, Attention: Rules Docket No. 95-CE-56-AD, Room 1558, 601 E.
12th Street, Kansas City, Missouri 64106. Comments may be inspected at
this location between 8 a.m. and 4 p.m., Monday through Friday,
holidays excepted.
Service information that applies to the proposed AD may be obtained
from The New Piper Aircraft, Inc., Attn: Customer Service, 2926 Piper
Dr., Vero Beach, Florida, 32960. This information also may be examined
at the Rules Docket at the address above.
FOR FURTHER INFORMATION CONTACT: Christina Marsh, Aerospace Engineer,
FAA, Atlanta Aircraft Certification Office, Campus Building, 1701
Columbia Avenue, suite 2-160, College Park, Georgia 30337-2748;
telephone (404) 305-7362; facsimile (404) 305-7348.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications should identify the Rules Docket number
and be submitted in triplicate to the address specified above. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report that summarizes each FAA-public contact concerned
with the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket No. 95-CE-56-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA, Central Region, Office of the Assistant Chief Counsel,
Attention: Rules Docket No. 95-CE-56-AD, Room 1558, 601 E. 12th Street,
Kansas City, Missouri 64106.
Discussion
It has been brought to the attention of the FAA that AD 86-17-07,
which is applicable to Piper PA31 and PA23 series airplanes, should not
have listed a Piper Model PA31-310 and a Piper Model PA23-150 airplane,
respectively. The Piper Model PA31-310 airplane is not a recognized
model on the Type Certificate Data Sheet No. A20SO and the airplane's
data plate will specify a Model PA31 not a Model PA31-310. Similarly,
the Piper Model PA23-150 airplane is not a recognized model on the
Aircraft Specification No. 1A10 and the airplane's data plate will
specify a Model PA23, not a Model PA23-150. The concern was raised that
some owners/operators of PA31 and PA23 series airplanes may not have
complied with AD 86-17-07, since the AD currently specifies the
airplanes as Piper Models PA31-310 or PA23-150, even though their
serial number falls within the serial number range in the current AD.
For this reason, the FAA is proposing to supersede the current AD to
change the model designation from Piper Models PA31-310 and PA23-150
airplanes to Piper Models PA31 and PA23 airplanes, respectively.
Piper has issued service bulletin (SB), No. 822, dated April 2,
1986, which specifies procedures for inspecting for improperly
manufactured hydraulic hoses, part number (P/N) 17766-02 or 465-138,
and if found installed, installing hydraulic hoses (P/N 17766-02) to
replace the improperly manufactured hydraulic hoses currently in place
on the airplane.
After examining the circumstances and reviewing all available
information related to the incidents described above, the FAA has
determined that AD action should be taken to ensure that the correct
hydraulic hoses are installed and if not installed, replacing the
hydraulic hoses with the correct hoses to avoid a loss of hydraulic
capabilities resulting in a gear-up landing and possible loss of the
airplane.
[[Page 19868]]
Since an unsafe condition has been identified that is likely to
exist or develop in other Piper PA23, PA31, PA31P, PA31T, and PA42
series airplanes of the same type design, the proposed AD would
supersede AD 86-17-07 with a new AD that would retain the same
requirements as AD 87-17-07 and change the model designation in the
Applicability section from Piper Model PA31-310 and PA23-150 airplanes
to Piper Model PA31 and PA23 airplanes, respectively.
The FAA estimates that 10,737 airplanes in the U.S. registry would
be affected by the proposed AD, that it would take approximately 1 hour
per airplane to accomplish the proposed inspection, and that the
average labor rate is approximately $60 an hour. The FAA is only using
the inspection criteria (1 workhour) since there is no way to determine
the number of these Piper airplanes already in compliance with AD 86-
17-07. Based on the figures above, the initial cost of the proposed AD
upon U.S. operators of the affected airplanes is estimated to be
$644,220. This figure only includes the cost for the initial inspection
and does not include replacement costs of the hydraulic hoses. Parts
cost approximately $53 per hydraulic hose. Piper installed on newly
manufactured aircraft and distributed approximately 93 defective hoses,
which could affect 93 airplanes. The FAA has no way of determining
which Piper airplanes may have these improperly manufactured hydraulic
hoses installed. Labor costs for the installation of one hose is
estimated to be 2 hours at approximately $60 per hour. Based on these
figures, the total cost impact of the proposed AD on U.S. operators is
estimated to be $660,309. The only difference between the proposed AD
and AD 87-17-07 is the change in model designation from PA31-310 and
PA23-150 airplanes to PA31 and PA23 airplanes, respectively. With this
in mind, the proposed action would not provide any additional cost
impact upon U.S. operators over that already required by AD 87-17-07.
The regulations proposed herein would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated,
will not have a significant economic impact, positive or negative, on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act. A copy of the draft regulatory evaluation
prepared for this action has been placed in the Rules Docket. A copy of
it may be obtained by contacting the Rules Docket at the location
provided under the caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend 14
CFR part 39 of the Federal Aviation Regulations as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2.Section 39.13 is amended by removing Airworthiness Directive (AD)
86-17-07, Amendment 39-5400, and by adding a new AD to read as follows:
The New Piper Aircraft, Inc.: Docket No. 95-CE-56-AD; Supersedes AD
86-17-07, Amendment 39-5400.
Applicability: The following models and serial numbers,
certificated in any category.
------------------------------------------------------------------------
Models Serial numbers
------------------------------------------------------------------------
PA23 and PA23-160............ 23-1 through 23-2046.
PA23-235..................... 27-505 through 27-622.
PA23-250..................... 27-1 through 27-8154030.
PA31, PA31-300, and PA31-325. 31-2 through 31-8312019.
PA31-350..................... 31-5001 through 31-8553002.
PA31P........................ 31P-1 through 31P-7730012.
PA31P-350.................... 31P-8414001 through 31P-8414050.
PA31T........................ 31T-7400002 through 31T-8120104.
PA31T1....................... 31T-7804001 through 31T-8304003, and 31T-
1104004 through 31T-1104017.
PA31T2....................... 31T-8166001 through 31T-8166076 and, 31T-
1166001 through 31T-1166008.
PA31T3....................... 31T-8275001 through 31T-8475001 and, 31T-
5575001.
PA42......................... 42-7800001, 42-7800002, 42-7801003, 42-
7801004, 42-8001001 through 42-8001106,
42-8301001, 42-8301002, 42-5501003
through 42-5501023, and 42-5501025.
------------------------------------------------------------------------
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (c) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required within 25 hours time-in-service (TIS) after
September 2, 1986 (the effective date of AD 86-17-07) or within 10
hours TIS after the effective date of this AD, whichever occurs
later, unless already accomplished.
To prevent hydraulic hose failure which could cause loss of
hydraulic capabilities resulting in a gear-up landing and possible
loss of the airplane, accomplish the following:
(a) Inspect and replace all hydraulic hoses identified as Piper
part number (P/N) 17766-02 or 465-138 and having a smooth rubber
surface and a blue colored end nut, with hoses of the same part
number having a woven outer covering and black colored end nut, in
accordance with the INSTRUCTIONS section of Piper Service Bulletin
(SB) No. 822, dated April 2, 1986.
Note 2: These hoses were available for installation starting
February 1, 1985, and may have been installed in newly manufactured
airplanes or as spares at any subsequent time.
(b) Special flight permits may be issued in accordance with 14
CFR 21.197 and 21.199 to operate the airplane to a location where
[[Page 19869]]
the requirements of this AD can be accomplished.
(c) An alternative method of compliance or adjustment of the
initial compliance time that provides an equivalent level of safety
may be approved by the Manager, FAA, Atlanta Aircraft Certification
Office, Campus Building, 1701 Columbia Avenue, suite 2-160, College
Park, Georgia 30337-2748. The request shall be forwarded through an
appropriate FAA Maintenance Inspector, who may add comments and then
send it to the Manager, Atlanta Aircraft Certification Office.
Note 3: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Atlanta Aircraft Certification Office.
(d) Alternative methods of compliance approved in accordance
with AD 87-17-07 (superseded by this action) are considered approved
as alternative methods of compliance with this AD.
(e) All persons affected by this directive may obtain a copy of
the document referred to herein upon request to The New Piper
Aircraft, Inc., Attn: Customer Service, 2926 Piper Dr., Vero Beach,
Florida, 32960; or may examine this document at the FAA, Central
Region, Office of the Assistant Chief Counsel, Room 1558, 601 E.
12th Street, Kansas City, Missouri 64106.
(f) This amendment supersedes AD 86-17-07, Amendment 39-5400.
Issued in Kansas City, Missouri, on April 26, 1996.
Michael Gallagher,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 96-11027 Filed 5-2-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-11023 Virginia Regulatory Program
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19885-19887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11023]
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
30 CFR Part 946
[VA-107-FOR]
Virginia Regulatory Program
AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM),
Interior.
ACTION: Proposed rule; public comment period and opportunity for public
hearing.
-----------------------------------------------------------------------
SUMMARY: OSM is announcing receipt of a proposed amendment to the
Virginia regulatory program (hereinafter referred to as the Virginia
program) under the Surface Mining Control and Reclamation Act of 1977
(SMCRA). The proposed amendment consists of statutory changes contained
in Virginia House Bill 706 and the implementing regulations, both of
which address sudden release of accumulated water from underground coal
mine voids. The amendment is intended to improve the effectiveness of
the Virginia program.
DATES: Written comments must be received by 4:00 p.m., on June 3, 1996.
If requested, a public hearing on the proposed amendment will be held
on May 28, 1996. Requests to speak at the hearing must be received by
4:00 p.m., on May 20, 1996.
ADDRESSES: Written comments and requests to speak at the hearing should
be mailed or hand delivered to Mr. Robert A. Penn, Director, Big Stone
Gap Field Office at the first address listed below.
Copies of the Virginia program, the proposed amendment, a listing
of any scheduled public hearings, and all written comments received in
response to this document will be available for public review at the
addresses listed below during normal business hours, Monday through
Friday, excluding holidays. Each requestor may receive one free copy of
the proposed amendment by contacting OSM's Big Stone Gap Field Office.
Office of Surface Mining Reclamation and Enforcement, Big Stone Gap
Field Office, P.O. Box 1217, Powell Valley Square Shopping Center, Room
220, Route 23, Big Stone Gap, Virginia 24219, Telephone: (703) 523-4303
Virginia Division of Mined Land Reclamation, P.O. Drawer 900, Big Stone
Gap, Virginia 24219, Telephone: (703) 523-8100.
FOR FURTHER INFORMATION CONTACT:
Mr. Robert A. Penn, Director, Big Stone Gap Field Office, Telephone:
(703) 523-4303.
SUPPLEMENTARY INFORMATION:
I. Background on the Virginia Program
On December 15, 1981, the Secretary of the Interior conditionally
approved the Virginia program. Background information on the Virginia
program, including the Secretary's findings, the disposition of
comments, and the conditions of approval can be found in the December
15, 1981, Federal Register (46 FR 61085-61115). Subsequent actions
concerning the conditions of approval and program amendments can be
found at 30 CFR 946.12, 946.13, 946.15, and 946.16.
II. Discussion of the Proposed Amendment
By letter dated April 17, 1996 (Administrative Record No. VA-876),
Virginia submitted amendments to Sec. 45.1-243 of the Code of Virginia
contained in Virginia House Bill 706, and concerning the sudden release
of accumulated water from underground coal mine voids. Virginia also
submitted the proposed implementing regulations at Sec. 480-03-
19.784.14 concerning hydrologic information for reclamation and
operations plans, and Sec. 480-03-19.817.41 concerning performance
standards for hydrologic balance protection.
The proposed amendments are as follows:
1. Sec. 45.1-243 of the Code of Virginia is amended by adding a new
subsection to read as follows:
B. The Director's regulations shall require that permit applicants
submit hydrologic reclamation plans that include measures that will be
utilized to prevent the sudden release of
[[Page 19886]]
accumulated water from underground workings.
2. Sec. 480-03-19.784.14(g) of the Virginia regulations is amended
to add the requirement that the hydrologic reclamation plan shall also
include identification of the measures to be taken to prevent the
sudden release of accumulated water from the underground workings.
3. Sec. 480-03-19.817.41(I) is amended by adding new subparagraph
(3) to read as follows:
(3) Except where surface entries and accesses to underground
workings are located pursuant to (i)(1) of this Section, an unmined
barrier of coal shall be left in place where the coal seam dips toward
the land surface. The unmined barrier and associated overburden shall
be designed to prevent the sudden release of water that may accumulate
in the underground workings.
(I) The applicant may demonstrate the appropriate barrier width and
overburden height by either:
(A) providing a site specific design, certified by a qualified
registered professional engineer, which considers the overburden and
barrier characteristics; or
(B) providing the greater barrier width necessary for a minimum of
100 feet of vertical overburden or for an unmined horizontal barrier
calculated by the formula: W=50+H, when W is the minimum width in feet
and H is the calculated hydrostatic head in feet.
(ii) Exception to the barrier requirement may be approved provided
the Division finds, based upon the geologic and hydrologic conditions,
an accumulation of water in the underground workings cannot reasonably
be expected to occur or other measures taken by the applicant are
adequate to prevent the accumulation of water.
III. Public Comment Procedures
In accordance with the provisions of 30 CFR 732.17(h), OSM is now
seeking comment on whether the amendments proposed by Virginia satisfy
the applicable program approval criteria of 30 CFR 732.15. If the
amendments are deemed adequate, they will become part of the Virginia
program.
Written Comments
Written comments should be specific, pertain only to the issues
proposed in this rulemaking, and include explanations in support of the
commenter's recommendations. Comments received after the time indicated
under ``DATES'' or at locations other than the Big Stone Gap Field
Office will not necessarily be considered in the final rulemaking or
included in the Administrative Record.
Public Hearing
Persons wishing to comment at the public hearing should contact the
person listed under FOR FURTHER INFORMATION CONTACT by close of
business on May 20, 1996. If no one requests an opportunity to comment
at a public hearing, the hearing will not be held.
Filing of a written statement at the time of the hearing is
requested as it will greatly assist the transcriber. Submission of
written statements in advance of the hearing will allow OSM officials
to prepare adequate responses and appropriate questions.
The public hearing will continue on the specified date until all
persons scheduled to comment have been heard. Persons in the audience
who have not been scheduled to comment, and who wish to do so, will be
heard following those scheduled.
The hearing will end after all persons scheduled to comment and
persons present in the audience who wish to comment have been heard.
Public Meeting
If only one person requests an opportunity to comment at a hearing,
a public meeting, rather than a public hearing, may be held. Persons
wishing to meet with OSM representatives to discuss the proposed
amendments may request a meeting at the Big Stone Gap Field Office by
contacting the person listed under FOR FURTHER INFORMATION CONTACT. All
such meetings will be open to the public and, if possible, notices of
meetings will be posted in advance at the locations listed under
ADDRESSES. A written summary of each public meeting will be made part
of the Administrative Record.
Any disabled individual who has need for a special accommodation to
attend a public hearing should contact the individual listed under FOR
FURTHER INFORMATION CONTACT.
IV. Procedural Determinations
Executive Order 12866
This rule is exempted from review by the Office of Management and
Budget (OMB) under Executive Order 12866 (Regulatory Planning and
Review).
Executive Order 12778
The Department of the Interior has conducted the reviews required
by section 2 of Executive Order 12778 (Civil Justice Reform) and has
determined that, to the extent allowed by law, this rule meets the
applicable standards of subsections (a) and (b) of that section.
However, these standards are not applicable to the actual language of
State regulatory programs and program amendments since each such
program is drafted and promulgated by a specific State, not by OSM.
Under sections 503 and 505 of the SMCRA (30 U.S.C. 1253 and 1255) and
30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State
regulatory programs and program amendments submitted by the States must
be based solely on a determination of whether the submittal is
consistent with SMCRA and its implementing Federal regulations and
whether the other requirements of 30 CFR Parts 730, 731, and 732 have
been met.
National Environmental Policy Act
No environmental impact statement is required for this rule since
section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency
decisions on proposed State regulatory program provisions do not
constitute major Federal actions within the meaning of section
102(2)(C) of the National Environmental Policy Act (42 U.S.C.
4332(2)(c).
Paperwork Reduction Act
This rule does not contain information collection requirements that
require approval by the OMB under the Paperwork Reduction Act (44
U.S.C. 3507 et seq.).
Regulatory Flexibility Act
The Department of the Interior has determined that this rule will
not have a significant economic impact on a substantial number of small
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The State submittal which is the subject of this rule is based upon
corresponding Federal regulations for which an economic analysis was
prepared and certification made that such regulations would not have a
significant economic effect upon a substantial number of small
entities. According, this rule will ensure that existing requirements
previously promulgated by OSM will be implemented by the State. In
making the determination as to whether this rule would have a
significant economic impact, the Department relied upon the data and
assumptions for the counterpart Federal regulations.
List of Subjects in 30 CFR Part 946
Intergovernmental relations, Surface mining, Underground mining.
[[Page 19887]]
Dated: April 25, 1996.
Michael K. Robinson,
Acting Regional Director, Appalachian Regional Coordinating Center.
[FR Doc. 96-11023 Filed 5-2-96; 8:45 am]
BILLING CODE 4310-05-M
Complete official Federal Register PDF
FR Doc. 96-11022 Arkansas Regulatory Program
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19881-19885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11022]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation and Enforcement
30 CFR Part 904
[SPATS No. AR-027-FOR]
Arkansas Regulatory Program
AGENCY: Office of Surface Mining Reclamation and Enforcement (OSM),
Interior.
ACTION: Proposed rule; public comment period and opportunity for public
hearing.
-----------------------------------------------------------------------
SUMMARY: OSM is announcing receipt of a proposed amendment to the
Arkansas regulatory program (hereinafter the ``Arkansas program'')
under the Surface Mining Control and Reclamation Act of 1977 (SMCRA).
The proposed amendment was submitted at the State's own initiative and
consists of revisions to and additions of regulations pertaining to
remining, water replacement, subsidence damage repair/compensation, and
enforcement. Arkansas also proposes to remove duplicated regulation
sections for surface and underground mining permit applications
pertaining to general requirements for the description of hydrology and
geology, groundwater information, surface water information,
alternative water supply information, and fish and wildlife resources
information. The amendment is intended to incorporate the additional
flexibility afforded by the revised Federal regulations, and to enhance
the enforcement of the State program.
DATES: Written comments must be received by 4:00 p.m., c.d.t., June 3,
1996. If requested, a public hearing on the proposed amendment will be
held on May 28, 1996. Requests to speak at the hearing must be received
by 4:00 p.m., c.d.t. on May 20, 1996.
ADDRESSES: Written comments and requests to speak at the hearing should
be mailed or hand delivered to Mr. Jack R. Carson, Acting Director,
Tulsa Field Office, at the address listed below.
Copies of the Arkansas program, the proposed amendment, a listing
of any scheduled public hearings, and all written comments received in
response to this document will be available for public review at the
addresses listed below during normal business hours, Monday through
Friday, excluding holidays. Each requester may receive one free copy of
the proposed amendment by contacting OSM's Tulsa Field Office.
Jack R. Carson, Acting Director, Tulsa Field Office, Office of Surface
Mining Reclamation and Enforcement, 5100 East Skelly Drive, Suite 470,
Tulsa, Oklahoma 74135-6547, Telephone: (918) 581-6430.
Arkansas Department of Pollution Control and Ecology, Surface Mining
and Reclamation Division, 8001 National Drive, Little Rock, Arkansas
72219-8913, Telephone (501) 682-0744.
FOR FURTHER INFORMATION CONTACT: Mr. Jack Carson, Acting Director,
Tulsa Field Office, Telephone: (918) 581-6430.
SUPPLEMENTARY INFORMATION:
I. Background on the Arkansas Program
On November 21, 1980, the Secretary of the Interior conditionally
approved the Arkansas program. Background information on the Arkansas
program, including the Secretary's findings, the disposition of
comments, and the conditions of approval can be found in the November
21, 1980, Federal Register (45 FR 77003). Arkansas amended its program
by submitting provisions that satisfied all of the conditions of the
Secretary's approval of November 21, 1980. Effective January 22, 1982,
OSM removed the conditions of the approval of the Arkansas permanent
regulatory program. Information on the removal of the conditions can be
found in the January 22, 1982, Federal Register (47 FR 3108).
Subsequent actions concerning the conditions of approval and program
amendments can be found at 30 CFR 904.12, 904.15, and 904.16.
II. Description of the Proposed Amendment
By letter dated April 2, 1996 (Administrative Record No. AR-557),
Arkansas submitted a proposed amendment to its program pursuant to
SMCRA. Arkansas submitted the proposed amendment at its own initiative.
The provisions of the Arkansas Surface Coal Mining and Reclamation Code
(ASCMRC) that Arkansas proposes to amend are:
A. Subchapter A--General
1. ASCMRC Section 700.10(b) Termination of Jurisdiction
Arkansas proposed to add this paragraph to include provisions for
termination of jurisdiction.
2. ASCMRC Section 705.5 Definitions
Arkansas proposes to amend this section by adding, alphabetically,
definitions of ``drinking, domestic or residential water supply,''
``land eligible for remining,'' ``material damage,''
[[Page 19882]]
``non-commercial building,'' ``occupied residential dwelling and
structures related thereto,'' ``previously mined areas,'' ``replacement
of water supply,'' and ``unanticipated event or condition.''
B. Subchapter G--Surface Coal Mining and Reclamation Operations Permits
and Coal Exploration Procedures Systems
1. ASCMRC Section 771.12(h) Procedures
Arkansas proposes to amend this section by replacing the incorrect
reference to Sections 787.11(b) and 787.12(b)(1) with a reference to
Sections 787.11 and 787.12.
2. ASCMRC Section 771.25(b) Permit Fees
Arkansas proposes to amend this section by replacing the
calculation of the annual administration and enforcement fee on a per
affected acre basis with a flat fee of $600.00 per year through the
life of the permit.
3. ASCMRC Section 778.14(c) Compliance Information
Arkansas proposes to amend this section by replacing all existing
language except for the last sentence of the paragraph.
4. ASCMRC Section 778.18 Personal Injury and Property Insurance
Information
Arkansas proposes to amend this section by removing the reference
to Part 806 and adding a reference to Section 800.60.
5. ASCMRC Section 779.19(b) Vegetation Information
Arkansas proposes to amend this section by replacing the reference
to Part 779.20 with a reference to Section 780.16.
6. ASCMRC Section 779.22 Land Use Information
Arkansas proposes to remove this section and to incorporate its
provisions into Section 780.23.
7. ASCMRC Section 779.25(k) Cross-sections, Maps, and Plans
Arkansas proposes to remove and reserve this section.
8. ASCMRC Sections 780.21 and 784.14 Hydrologic Information
Arkansas proposes to amend Section 780.21 by inserting a new
subparagraph (f)(3)(v). Also, through an inadvertent oversight, Section
784.14 was not updated when Section 780.21 was amended in 1988.
Therefore, Arkansas proposes to amend Section 784.14 by renaming the
heading, by deleting the inappropriate reference to Section
780.21(b)(3) and referencing instead Sections 780.21(e) and
780.21(f)(3)(iii) as inapplicable to underground operations, and
inserting a reference to new paragraph Section 780.21(f)(3)(v).
Additionally, through an apparent typographical error, the heading for
Section 784.15 had been deleted making it appear that section 784.14
also references Section 780.23. Moreover, this reference incorrectly
excluded Section 780.23(a)(2) from consideration for underground mining
operations. Therefore, Section 784.14 is further amended by deleting
the reference to Section 780.23 and placing the corrected reference
under relisted Section 784.15.
9. ASCMRC Sections 780.23 and 784.15 Land Use Information
Arkansas proposes to amend Section 780.23 by replacing it in its
entirety. Additionally, through an apparent typographical error, the
heading for Section 784.15 had been deleted making it appear that
Section 784.14 also references Section 780.23. Moreover, this reference
incorrectly excluded Section 780.23(a)(2) from consideration for
underground mining operations. Therefore, Arkansas proposes to relist
the heading for Section 784.15, and to place the reference to Section
780.23 under this section.
10. ASCMRC Sections 780.25 and 784.16 Ponds, Impoundments, Banks, Dams
and Embankments
Arkansas proposes to amend Sections 780.25 and 7847.16 by replacing
the term ``Pond'' in the heading with ``Siltation Structures.'' Also,
Section 780.25 is proposed to be amended by replacing the terms ``pond
and sedimentation ponds'' with ``siltation structures'' in paragraphs
(a) and (b), by adding the phrase ``and a detailed design plan'' to
paragraph (a), by replacing the impoundment classification criteria in
paragraphs (a)(2), (a)(3), and (f), by replacing the references to now-
removed Sections 816.91 through 816.93 in paragraphs (a)(3) (i) and (e)
with a reference to Sections 816.81 through 816.84, by replacing the
existing language in paragraph (c), and by revising the referenced
sections in paragraph (d) from 816.85 to 816.84.
11. ASCMRC Section 783.22 Land Use Information
Arkansas proposes to remove this section and consolidate its
provisions into amended Section 783.23.
12. ASCMRC Section 784.20 Subsidence Control
Arkansas proposes to amend this section by removing all existing
language and adding new provisions for presubsidence surveys and
subsidence control plans.
13. ASCMRC Section 784.25(a) Return of Coal Processing Waste to
Abandoned Underground Workings
Arkansas proposes to amend this subsection by revising the
reference to Section 816.88 with a reference to Section 816.81(f).
14. ASCMRC Section 785.25 Lands Eligible for Remining
Arkansas proposes to add new Section 785.25 pertaining to
permitting requirements for lands eligible for remining.
15. ASCMRC Section 786.5(b) Definitions
Arkansas proposes to amend this subsection by revising the
introductory text; by rearranging, alphabetically, the existing
definitions; and by inserting alphabetically, definitions for
``Applicant/Violator System or AVS,'' ``Federal violation notice,''
``Ownership or control link,'' ``State violation notice,'' and
``violation notice.''
16. ASCMRC Section 786.11(c)(2) Public Notices of Filing of Permit
Applications
Arkansas proposes to amend this subsection by replacing the
reference to Section 783.20 with a reference to Section 780.16.
17. ASCMRC Section 786.17(c) Reveiw of Violations
Arkansas proposes to amend Section 786.17 by revising paragraph
(c)(1), by adding an additional qualifying phrase to paragraph (c)(2)
regarding permits which will be conditionally issued, and by adding new
paragraph (c)(4) regarding an exception to the prohibitions of
paragraph (b).
18. ASCMRC Section 786.19(g)-(r) Criteria for Permit Approval or
Denial
Arkansas proposes to amend this section by adding new paragraphs
(q) and (r) pertaining to lands eligible for remining.
19. ASCMRC Section 786.30 Improvidently Issued Permits: General
Procedures
Arkansas proposes to amend this section by revising paragraphs (b)
and (c), by renumbering the existing subparagraphs under (b) and (c),
and by adding new paragraphs (b)(2) and (c)(2)
[[Page 19883]]
pertaining to when an ownership and control link may be challenged
under Section 786.35.
20. ASCMRC Section 786.31 Improvidently Issued Permits: Rescission
Procedures
Arkansas proposes to amend this section by replacing the reference
to Section 786.30(c)(4) with 786.30(c)(1)(iv), by adding a qualifying
phrase regarding the provisions of proposed Section 786.35 to paragraph
(a), and by deleting the right to appeal provisions of paragraph (c)
which are now incorporated in Section 786.30.
21. ASCMRC Section 786.32 Verification of Ownership or Control
Application Information
Arkansas proposes to add new Section 786.32 pertaining to
verification of ownership or control application information through
manual data sources and automated data sources.
22. ASCMRC Section 786.33 Review of Ownership or Control Violation
Information
Arkansas proposes to add new Section 786.33 pertaining to the
review of violation notices and ownership or control links to determine
whether the application can be approved.
23. ASCMRC Section 786.34 Procedures for Challenging Ownership or
Control Links Shown in AVS
Arkansas proposes to add new Section 786.34 pertaining to
procedures for challenging ownership or control links shown in the AVS.
24. ASCMRC Section 786.35 Standards for Challenging Ownership or
Control Links and the Status of Violations
Arkansas proposes to add new Section 786.35 pertaining to the
standards for challenging ownership or control links shown in the AVS.
25. ASCMRC Section 788.14(a)(3) Permit Renewals: Completed
Applications
Arkansas proposes to amend this subsection by replacing the
reference to Section 806.14 with a reference to Section 800.60.
C. Subchapter H--Small Operator Assistance
1. ASCMRC Section 795.12 Program Services and Data Requirements
Arkansas proposes to revise the provisions in this section
pertaining to its small operator assistance program (SOAP) and to
revise the section title from ``Program Services'' to ``Program
Services and Data Requirements.'' This amended section includes the
provisions of former Section 795.16 Data Requirements.
2. ASCMRC Section 795.13(a)(2) Eligibility for Assistance
Arkansas proposes to amend paragraph (a)(2) by changing the
liability period and increasing the production level to 300,000 tons
with respect to operator eligibility.
3. ASCMRC Section 795.16 Data Requirements
Arkansas proposes to remove this section and combine it with
amended Section 795.12 Program Services and Data Requirements.
4. ASCMRC Section 795.17 Qualified Laboratories
Arkansas proposes to amend this section by revising the definition
of ``qualified laboratory'' in paragraph (a)(1) and by replacing the
references of Sections 795.16 (b)(1) and (b)(2) in paragraph (b)(2)
with Sections 795.12 (b)(1) and (b)(2).
5. ASCMRC Section 795.19 Applicant Liability
Arkansas proposes to amend this section by raising the production
level to 300,000 tons and reducing the liability period, and by making
other minor changes.
D. Subchapter J--Bond Insurance Requirements for Surface Coal Mining
and Reclamation Operations
1. Part 800--General Requirements for Bonding of Surface Coal Mining
and Reclamation Operations Under the State Program
Arkansas proposes to amend Subchapter J by deleting all existing
language from Part 800, and by removing Parts 805, 806, 807, and 808,
and consolidating the provisions of these removed Parts into amended
Part 800. Arkansas also proposes to change the title of Part 800 from
``General Requirements for Bonding of Surface Coal Mining and
Reclamation Operations Under the State Program'' to ``Bond and
Insurance Requirements for Surface Coal Mining and Reclamation
Operations Under the State Program.''
E. Subchapter K--State Program Performance Standards
1. ASCMRC Section 816.41 Hydrologic Balance Protection
Arkansas proposes to amend this section by adding new paragraph (e)
pertaining to permittees replacing a drinking, domestic or residential
water supply that is adversely impacted by underground mining
activities.
2. ASCMRC Section 816.46 Hydrologic Balance: Siltation Structures
Arkansas proposes to amend this section by expanding the definition
of ``other treatment facility'' in paragraph (a)(3), by suspending
paragraph (b)(2), and by revising paragraph (c)(2) regarding spillways.
3. ASCMRC Section 816.49 Impoundments
Arkansas proposes to amend this section by redesigning paragraphs
(a)(1) through (a)(8) as paragraphs (a)(2) through (a)(9),
respectively, and paragraphs (a)(9) through (a)(11) as paragraphs
(a)(11) through (a)(13), respectively; by replacing the language of
paragraph (a)(1) with language pertaining to impoundments meeting the
Class B or C criteria for dams in the U.S. Department of Agriculture,
Soil Conservation Service (SCS) Technical Release No. 60; by adding new
paragraph (a)(10) pertaining to high walls; by revising newly
redesignated paragraphs (a)(4), (a)(5), (a)(6)(i), and (a)(11), and
existing paragraphs (c)(2) (i) and (ii) by inserting references to the
SCS criteria for dam classification; and by replacing the existing
language of a newly redesignated paragraph (a)(9) with language
pertaining to spillways.
4. ASCMRC Section 816.81 Coal Mine Waste: General Requirements
Arkansas proposes to amend this section by replacing the
introductory text in paragraph (a); by replacing existing language in
paragraph (c)(2) with language pertaining to design criteria for a
disposal facility; and by deleting paragraphs (c)(3) and (c)(4).
5. ASCMRC Section 816.82 Coal Processing Waste Banks: Site Inspection
Arkansas proposes to remove this section pertaining to inspections
of coal processing waste banks.
6. ASCMRC Section 816.85 Coal Processing Waste Banks: Construction
Requirements
Arkansas proposes to remove this section pertaining to the
construction of coal processing waste banks.
7. ASCMRC Section 816.86 Coal Processing Waste: Burning
Arkansas proposes to remove this section pertaining to
extinguishing coal processing waste fires.
[[Page 19884]]
8. ASCMRC Section 816.88 Coal Processing Waste: Return to Underground
Workings
Arkansas proposes to remove this section pertaining to the return
of coal processing waste to underground mine workings.
9. ASCMRC Section 816.89 Disposal of Noncoal Mine Wastes
Arkansas proposes to amend this section by removing paragraph (d)
pertaining to the handling of hazardous noncoal mine waste.
10. ASCMRC Section 816.91--816.93 Coal Processing Waste: Dams and
Embankments
Arkansas proposes to remove Sections 816.91, 816.92, and 816.93 and
incorporate their provisions into Section 816.84. Sections 816.91,
816.92, and 816.93 pertain to obtaining State approval, site
preparation, and design and construction standards, respectively,
before using coal processing waste to construct dams and embankments.
11. ASCMRC Section 816.112 Revegetation, Use of Introduced Species
Arkansas proposes to remove this section pertaining to substituting
introduced species for native species.
12. ASCMRC Section 816.116 Revegetation: Standards for Success
Arkansas proposes to amend this section by revising paragraph
(c)(2) by deleting the precipitation qualifier and by adding new
subparagraphs (c)(2)(i) and (c)(2)(ii) pertaining to success standards
for lands eligible for remining, by deleting paragraph (c)(3)
pertaining to an average annual precipitation criterion, and by
redesignating paragraph (c)(4) as (c)(3).
13. ASCMRC Section 816.121-U Subsidence Control: General Requirements
Arkansas proposes to amend this section by combining the provisions
of Sections 816.121-U General requirements, 816.124-U Surface owner
protection, and 816.126-U Buffer zones into revised Section 816.121-U
General requirements.
14. ASCMRC Section 816.121-U Subsidence Control: Public Notice
Arkansas proposes to remove the first sentence of the introductory
paragraph and paragraphs (b) and (c) and insert language pertaining to
notifying landowners of proposed underground mining operations.
15. ASCMRC Section 816.124-U and 816.126-U Subsidence Control: Surface
Owner Protection and Buffer Zones, Respectively
Arkansas proposes to remove these two sections and incorporate
their provisions under revised Section 816.121-U General requirements.
16. ASCMRC Section 827.12 Coal Processing Plants: Performance
Standards
Arkansas proposes to replace the references to Sections 816.91
through 816.93 in paragraph (e) with Section 816.84. Arkansas also
proposes to amend paragraph (g) by replacing the terms ``solid waste''
and ``any excavated materials'' with ``noncoal mine waste'' and
``excess spoil,'' and by rearranging and revising the referenced
sections.
F. Subchapter L--State Program Inspection and Enforcement Procedures
1. ASCMRC Section 842.11 Inspections
Arkansas proposes to replace all existing language in paragraphs
(c)(1) through (c)(4), and to add new paragraphs (d) through (f).
2. ASCMRC Section 842.14 Review of Adequacy and Completeness of
Inspections
Arkansas proposes to amend this section by replacing references to
specific sections with more generalized language.
G. Subchapter R--Abandoned Mine Land Reclamation
1. ASCMRC Section 874.5 Definitions
Arkansas proposes to amend this section by revising the definition
of ``left or abandoned in either an unreclaimed or inadequately
reclaimed condition.''
2. ASCMRC Section 874.12 Eligible Lands and Water
Arkansas proposes to amend this section by adding new paragraphs
(a)(4) through (a)(8) pertaining to coal lands and water eligible for
reclamation activities.
H. The proposed amendment also consists of removals of duplicative
regulation sections for surface and underground mining permit
applications pertaining to ASCMRC Sections 779.13 and 783.13
Description of hydrology and geology: General requirements, ASCMRC
Sections 779.15 and 783.15 Groundwater information, ASCMRC Sections
779.16 and 783.16 Surface water information, ASCMRC Sections 779.17 and
783.17 Alternative water supply information, and ASCMRC Sections 779.20
and 783.20 Fish and wildlife resources information.
III. Public Comment Procedures
In accordance with the provisions of 30 CFR 732.17(h), OSM is
seeking comments on whether the proposed amendment satisfies the
applicable program approval criteria of 30 CFR 732.15. If the amendment
is deemed adequate, it will become part of the Arkansas program.
Written Comments
Written comments should be specific, pertain only to the issues
proposed in this rulemaking, and include explanations in support of the
commenter's recommendations. Comments received after the time indicated
under DATES or at locations other than the Tulsa Field Office will not
necessarily be considered in the final rulemaking or included in the
Administrative Record.
Public Hearing
Persons wishing to speak at the public hearing should contact the
person listed under FOR FURTHER INFORMATION CONTACT by 4:00 p.m.,
c.d.t. on May 20, 1996. The location and time of the hearing will be
arranged with those persons requesting the hearing. Any disabled
individual who has need for a special accommodation to attend a public
hearing should contact the individual listed under FOR FURTHER
INFORMATION CONTACT. If no one requests an opportunity to speak at the
public hearing, the hearing will not be held.
Filing of a written statement at the time of the hearing is
requested as it will greatly assist the transcriber. Submission of
written statements in advance of the hearing will allow OSM officials
to prepare adequate responses and appropriate questions.
The public hearing will continue on the specified date until all
persons scheduled to speak have been heard. Persons in the audience who
have not been scheduled to speak, and who wish to do so, will be heard
following those who have been scheduled. The hearing will end after all
persons scheduled to speak and persons present in the audience who wish
to speak have been heard.
Public Meeting
If only one person requests an opportunity to speak at a hearing, a
public meeting, rather than a public hearing, may be held. Persons
wishing to meet with OSM representatives to discuss the proposed
amendment may request a meeting by contacting the person listed under
FOR FURTHER
[[Page 19885]]
INFORMATION CONTACT. All such meetings will be open to the public and,
if possible, notices of meetings will be posted at the locations listed
under ADDRESSES. A written summary of each meeting will be made a part
of the Administrative Record.
IV. Procedural Determinations
Executive Order 12866
This rule is exempted from review by the Office of Management and
Budget (OMB) under Executive Order 12866 (Regulatory Planning and
Review).
Executive Order 12778
The Department of the Interior has conducted the reviews required
by section 2 of Executive Order 12778 (Civil Justice Reform) and has
determined that, to the extent allowed by law, this rule meets the
applicable standards of subsections (a) and (b) of that section.
However, these standards are not applicable to the actual language of
State regulatory programs and program amendments since each such
program is drafted and promulgated by a specific State, not by OSM.
Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and 30
CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State
regulatory programs and program amendments submitted by the States must
be based solely on a determination of whether the submittal is
consistent with SMCRA and its implementing Federal regulations and
whether the other requirements of 30 CFR Parts 730, 731, and 732 have
been met.
National Environmental Policy Act
No environmental impact statement is required for this rule since
section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency
decisions on proposed State regulatory program provisions do not
constitute major Federal actions within the meaning of section
102(2)(C) of the National Environmental Policy Act (42 U.S.C.
4332(2)(C)).
Paperwork Reduction Act
This rule does not contain information collection requirements that
require approval by OMB under the Paperwork Reduction Act (44 U.S.C.
3507 et seq.).
Regulatory Flexibility Act
The Department of the Interior has determined that this rule will
not have a significant economic impact on a substantial number of small
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The State submittal which is the subject of this rule is based upon
counterpart Federal regulations for which an economic analysis was
prepared and certification made that such regulations would not have a
significant economic effect upon a substantial number of small
entities. Accordingly, this rule will ensure that existing requirements
previously promulgated by OSM will be implemented by the State. In
making the determination as to whether this rule would have a
significant economic impact, the Department relied upon the data and
assumptions for the counterpart Federal regulations.
List of Subjects in 30 CFR Part 904
Intergovernmental relations, Surface mining, Underground mining.
Dated: April 26, 1996.
Brent Wahlquist,
Regional Director, Mid-Continent Regional Coordinating Center.
[FR Doc. 96-11022 Filed 5-2-96; 8:45 am]
BILLING CODE 4310-05-M
Complete official Federal Register PDF
FR Doc. 96-10997 Tank Vessel and Facility Response Plans, and Response Equipment for Hazardous Substances
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 20084-20094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10997]
[[Page 20083]]
_______________________________________________________________________
Part VI
Department of Transportation
_______________________________________________________________________
Coast Guard
33 CFR Parts 154 and 155
Tank Vessel and Facility Response Plans, and Response Equipment for
Hazardous Substances; Proposed Rule
Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Proposed
Rules
[[Page 20084]]
DEPARTMENT OF TRANSPORTATION
Coast Guard
33 CFR Parts 154 and 155
[CGD 94-032 and 94-048]
RIN 2115-AE87 and 2115-AE88
Tank Vessel and Facility Response Plans, and Response Equipment
for Hazardous Substances
AGENCY: Coast Guard, DOT.
ACTION: Advance notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Coast Guard is soliciting comments relating to proposed
regulations requiring response plans for: certain tank vessels
operating on the navigable waters of the United States or any marine
transportation-related (MTR) facility that, because of its location,
could reasonably be expected to cause substantial or significant and
substantial harm to the environment by discharging a hazardous
substance. These regulations are mandated by the Oil Pollution Act of
1990 (OPA 90), which requires the President to issue regulations
requiring the preparation of hazardous substance response plans. The
purpose of requiring response plans is to minimize the impact of a
discharge or release of hazardous substances into the navigable waters
of the United States.
DATES: Comments must be received on or before September 3, 1996.
ADDRESSES: Comments may be mailed to the Executive Secretary, Marine
Safety Council [G-LRA-2/3406] (CGD 94-032, 94-048), U.S. Coast Guard
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may
be delivered to room 3406 at the above address between 8 a.m. and 3
p.m., Monday through Friday, except Federal holidays. The telephone
number is (202) 267-1477.
The Executive Secretary maintains the public docket for this
rulemaking. Comments will become part of this docket and will be
available for inspection or copying at room 3406, U.S. Coast Guard
Headquarters.
FOR FURTHER INFORMATION CONTACT:
LT Cliff Thomas, Standards Evaluation and Development Division (G-MES),
(202) 267-1099.
SUPPLEMENTARY INFORMATION:
Request for Comments
The Coast Guard encourages interested persons to participate in the
early stages of this rulemaking by submitting written data, views, or
arguments. Persons submitting comments should include their names and
addresses, identify this specific advance notice (CGD 94-032, 94-048),
and the specific section of the action being addressed or the issue to
which each comment applies, and give the reason for each comment.
Please submit two copies of all comments and attachments in an unbound
format, no larger than 8\1/2\ by 11 inches, suitable for copying and
electronic filing. Persons wanting acknowledgment of receipt of
comments should enclose stamped, self-addressed postcards or envelopes.
The Coast Guard will consider all comments received during the
comment period. All comments will be considered in drafting the notice
of proposed rulemaking.
The Coast Guard plans to hold a public meeting in Washington, DC
regarding this proposed rulemaking between 45 to 60 days after
publication of this advance notice of proposed rulemaking (ANPRM). This
meeting will be conducted for the purpose of receiving views on what
should be regulated and what appropriate regulations would be. The date
and time will be announced by a later notice in the Federal Register.
Persons may request additional public meetings by writing to the Marine
Safety Council at the address under addresses. The request should
include the reasons why a meeting would be beneficial. If it determines
that an additional opportunity for oral presentations will aid this
rulemaking, the Coast Guard will hold another public meeting at a time
and place announced by a later notice in the Federal Register.
Drafting Information. The principal persons involved in drafting
this document are LT Cliff Thomas, Standards Evaluation Division,
(G-MES), LCDR Walter (Bud) Hunt, Response Division, (G-MRO), and
Jacqueline Sullivan, Project Counsel, Office of the Chief Counsel.
Background and Purpose
1. General
Section 311(j)(5) of the Federal Water Pollution Control Act
(FWPCA) [33 U.S.C. 1321(j)(5)], as amended by section 4202(a) of OPA
90, requires owners or operators of tank vessels, offshore facilities,
and onshore facilities that could reasonably by expected to cause
substantial harm to the environment to prepare and submit plans for
responding, to the maximum extent practicable, to a worst case
discharge, or a substantial threat of such a discharge, of oil or a
hazardous substance. Section 4202(b)(4) of OPA 90 establishes an
implementation schedule for these requirements with regard to oil.
Under section 4202(b)(4), an owner or operator of a tank vessel or
facility for which a response plan was required under 33 U.S.C.
1321(j)(5) and which handled, stored, or transported oil was required
to be operating in compliance with an approved response plan by August
18, 1993. However, section 4202(b)(4) did not establish a compliance
date requiring response plans for hazardous substances. For the
purposes of this ANPRM, discharge and release are synonymous.
2. Oil Response Plan Regulations
The Coast Guard issued two separate interim final rules (IRS) on
February 5, 1993: one requiring response plans for tank vessels
carrying oil in bulk as cargo (VRP IFR) [33 CFR 155] and another
requiring response plans for MTR facilities that handle, store, or
transport oil in bulk (FRP IFR) [33 CFR 154]. These IFRs define many
concepts such as ``marine transportation-related facility,'' ``maximum
extent practicable,'' and ``worst case discharge.'' The rules also
provide a specific format for response plans; however, they allow for
deviations from this format as long as the required information is
included and there is a cross reference sheet identifying its location.
The Coast Guard is considering using these concepts or modifying them
as necessary in the regulations for response plans for hazardous
substances.
3. Tank Vessels
The VRP IFR for oil uses the definition of ``tank vessel'' in 46
U.S.C. 2101. The same definition applies for purposes of implementing
the OPA 90 provisions for hazardous substance response plans. This
definition applies the requirement for hazardous substance response
plans to all tank vessels that carry hazardous substances in bulk as
cargo. Offshore supply vessels (OSVs) and certain fishing and fish
tender vessels are exempt from the requirements for hazardous substance
response plans because, in accordance with section 5209(b) of the Coast
Guard Authorization Act of 1992 [Pub L. 102-587, 106 Stat. 5039 at
5076], they are not considered tank vessels for the purposes of any
law.
The VRP IFR for oil establishes three categories for tank vessels:
manned vessels carrying oil as a primary cargo, unmanned tank barges
carrying oil as a primary cargo, and vessels carrying oil as a
secondary cargo. The Coast Guard is considering applying this scheme
for categorizing tank vessels to regulations requiring hazardous
substance response plans.
[[Page 20085]]
4. Marine Transportation Related Facilities
OPA 90 requires hazardous substance response plans for any offshore
facility or any onshore facility that, because of its location, could
reasonably be expected to cause substantial or significant and
substantial harm to the environment by discharging a hazardous
substance. In Executive Order (E.O.) 12777, the President divided the
responsibility for implementing the provisions of OPA 90 regarding
hazardous substance response plans among various Federal agencies.
Through a series of delegations, the Coast Guard was granted the
authority to implement hazardous substance response plan requirements
for fixed and mobile onshore MTR facilities and for deepwater ports.
The Environmental Protection Agency (EPA) was granted the authority to
regulate fixed onshore non-transportation-related facilities. The
Research and Special Programs Administration (RSPA) was granted the
authority to regulate onshore non-marine transportation-related
facilities (i.e., pipelines, motor carriers, and railways). The
Department of Interior's Minerals Management Service (MMS) was granted
the authority to regulate offshore facilities and associated pipelines,
other than deepwater ports subject to the Deepwater Ports Act of 1974.
That segment of the MTR facility that is over water is considered
to be an ``offshore facility'' under the FWPCA. Under E.O. 12777, this
segment is under the purview of MMS. A memorandum of understanding
(MOU) between the Department of Interior (DOI), Department of
Transportation (DOT), and the EPA establishing Federal jurisdictional
boundaries for offshore facilities became effective on February 3, 1994
[59 FR 9494; February 28, 1994]. To avoid any confusion caused by the
definition of ``offshore facility'', MMS coordinated an effort to
establish jurisdictional boundaries for oil spill prevention and
control, response planning, and response equipment inspection
activities. The Secretary of the Interior redelegated DOI's functions
under section 2(i) of E.O. 12777 to give the EPA jurisdiction over non-
transportation-related offshore facilities landward of the coast line
and to give DOT jurisdiction over transportation-related offshore
facilities located landward of the coast line. This MOU does not
include jurisdictional boundaries for oil spill financial
responsibility.
The FRP IFR for oil defines an MTR facility as any onshore
facility, including piping and structures used for the transfer or oil
to or from a vessel and any deepwater port subject to regulation under
33 CFR part 150. This definition includes not only large fixed onshore
facilities but also tank trucks, marinas, and railroad tank cars that
transfer oil to or from vessels where the vessel has a capacity of 250
barrels of oil or more. This definition, modified by substituting the
phrase ``hazardous substance'' for the word ``oil'', could be applied
to regulations requiring hazardous substance response plans.
As Coast Guard-regulated fixed onshore MTR facility is generally a
segment of a larger facility or complex. The FRP IFR for oil describes
a complex as a facility that contains portions which are regulated by
two or more Federal agencies. Onshore non-transportation related fixed
facilities, which can be part of a complex, are already covered by a
web of existing statutes and regulations at the Federal, state, and
local levels that address preparedness for, and response to, hazardous
substance releases. One of the purposes of this ANPRM is to address any
potential gaps in the coverage of these facilities and to prevent
imposing duplicative, overlapping, or conflicting regulations.
OPA 90 makes the distinction between onshore facilities that could
reasonably be expected to cause substantial harm to the environment
(substantial harm facilities) and facilities that could reasonably be
expected to cause significant and substantial harm to the environment
(significant and substantial harm facilities). Response plans must be
prepared and submitted for both types of MTR facilities; however,
response plans for significant and substantial harm MTR facilities also
must be reviewed and approved by the Coast Guard.
Under the FRP IFR for oil, all MTR facilities, including mobile
facilities, that are capable of transferring oil in bulk to or from
vessels with a capacity of 250 barrels or more, and MTR facilities that
are specifically so designated by the Coast Guard Captain of the Port
(COTP) are classified as substantial harm facilities. However, within
this set of substantial harm facilities, there is a subset of
significant and substantial harm facilities. Significant and
substantial harm facilities are fixed onshore MTR facilities, capable
of transferring oil in bulk to or from vessels with a capacity of 250
barrels or more, deepwater ports, or facilities that are specifically
so designated by the COTP. Mobile MTR facilities are not considered to
be significant and substantial harm facilities unless so designated by
the COTP.
The terms substantial harm facility and significant and substantial
harm facility, as defined in the FRP IFR for oil, could be used in the
FRP response plan regulations for hazardous substances if the phrase
``hazardous substances'' were substituted for the word ``oil'' in the
definitions of those terms.
The Coast Guard considered developing criteria for designation of
facilities that handle, store, or transport hazardous substances as
substantial harm and as significant and substantial harm facilities
that would be different from those criteria used in the oil FRP IFR.
The criteria considered would reflect the prospect that discharges of
hazardous substances present a different type and degree of potential
damage to human health and the environment than oil discharges.
EPA uses the concept of a ``reportable quantity'' to set the amount
of a discharge of a hazardous substance which requires the releaser to
report the discharge to the government. Section 117.1 of 40 CFR defines
``reportable quantity'' as that quantity that may be harmful and is a
violation of section 311(b)(3) of the FWPCA [33 U.S.C. 1321(b)(3)] when
discharged into or upon navigable waters, adjoining shorelines, the
contiguous zone, or in conjunction with activities under the Outer
Continental Shelf Lands Act [43 U.S.C. 1331, et seq.] or Deepwater
Ports Act of 1974 [33 U.S.C. 1501 through 1524]. Table 117.3 of 40 CFR
lists the reportable quantities of substances designated as hazardous
substances under section 311(b)(4) of the FWPCA [33 U.S.C. 1321(b)(4)].
One criterion considered was to designate an MTR facility that
handles, stores, or transports a hazardous substance in an amount
exceeding the reportable quantity of that hazardous substance as a
substantial harm facility. A criterion considered in designating
significant and substantial harm facilities was to identify facilities
that handle, store, or transport hazardous substances above 10 times
the reportable quantity. Alternately, facilities could be designated as
significant and substantial harm facilities if they handle, store, or
transport hazardous substances 100 times above the reportable quantity.
Using the concept of a reportable quantity to define what
constitutes a substantial harm facility, and distinguishing it from a
significant and substantial harm facility has the advantage of building
a regulatory
[[Page 20086]]
structure with a concept that incorporates quantifiable values that
already exist and are based on rational decisions through the
rulemaking process. The added advantage is that the public, industry,
and Coast Guard are familiar with these concepts. However, it may also
result in selection criteria that are unnecessarily complicated and
that are not consistent with those established in the FRP IFR for oil.
Additionally, the reportable quantity concept may not be applicable to
non-FWPCA hazardous chemicals. It is also not clear that using this
criteria will appreciably increase the likelihood of predicting the
harm that may occur to the environment in the event of a discharge of
hazardous substances from the MTR portion of a complex facility.
The applicability criteria established in 33 CFR 154.1015 for the
FRP oil regulations will be considered in drafting hazardous substances
response planning regulations. These criteria build on two existing
regulatory regimes which include pollution prevention regulations for
oil and hazardous substances and response planning regulations for oil
spills.
The applicability in 33 CFR 154.1015 is based on the ability of a
facility to transfer to or from a vessel with a capacity of 250 barrels
or more. The determination of substantial harm and significant and
substantial harm is associated with the capacity of an MTR facility and
its proximity to navigable waters, adjoining shorelines, or the
exclusive economic zone (EEZ), as well as other factors such as a
facility's proximity to public and commercial water supply intakes and
to areas of economic importance and environmental sensitivity. Such
determining factors are as relevant for hazardous substances as they
were for oils.
Using the FRP applicability for oil for hazardous substances would
provide that all MTR facilities that are capable of transferring to or
from a vessel with a capacity of 250 barrels or more could reasonably
be expected to experience a release of a hazardous substance, into or
on the navigable waters, adjoining shorelines, or EEZ, which would
result in substantial harm to the environment. All MTR facilities would
be classified as substantial harm facilities. Fixed MTR facilities
would be classified as significant and substantial harm facilities. As
in the FRP IFR, the COTP would have the authority to upgrade an MTR
facility classification to substantial harm or significant and
substantial harm. An owner or operator of an MTR facility who does not
agree with the initial classification would be provided with a process
to request review of the MTR facility's classification by the COTP
using the appeal process established in 33 CFR 154.1075.
5. Defining Hazardous Substances
OPA 90 does not define the term ``hazardous substance,'' but relies
on the existing definition of hazardous substance in section 311(a) of
the FWPCA [33 U.S.C. 1321(a)]. Section 311(a) defines ``hazardous
substance'' as ``any substance designated pursuant to subsection (b)(2)
[33 U.S.C. 1321(b)(2)] of this section.'' Under section 311(b)(2), the
EPA Administrator is tasked with developing, issuing, and revising a
list of hazardous substances which may affect natural resources or
present imminent and substantial danger to public health or welfare,
including but not limited to fish, shellfish, wildlife, shorelines, and
beaches. The EPA Administrator has designated 296 chemicals as
hazardous substances under the FWPCA. The list of hazardous substances
is located at 40 CFR part 116.
Section 1321(j)(5) of title 33 of the U.S.C., as amended by section
4202(a) of OPA 90, requires the Coast Guard to issue response plan
regulations for those hazardous substances designated under the FWPCA.
The Coast Guard notes that a number of dangerous chemicals other than
those designated as hazardous substances are carried in bulk as cargo
in the marine environment.
The International Maritime Organization (IMO) has begun to address
response plan requirements for hazardous chemicals. Its intention is to
use the basic guidelines for vessels contained in Regulation 26 of
Annex I of MARPOL as a model for such requirements. The approach
proposed here is consistent with that under consideration by IMO.
6. Maximum Extent Practicable and Worst Case Discharge
OPA 90 requires vessels and facilities to prepare and submit plans
for responding, ``to the maximum extent practicable, to a worst case
discharge, and to a substantial threat of such a discharge.'' For
regulatory purposes, both maximum extent practicable and worst case
discharge are defined in the VRP and FRP regulations for oil. These
concepts could be applied to the requirements for response plans for
hazardous substances.
For vessels, the worst case discharge is defined at 33 CFR 155.1020
as ``a discharge in adverse weather conditions of a vessel's entire oil
cargo.'' For facilities, the worst case discharge is defined to mean
``in the case of an onshore facility and deepwater port, the largest
foreseeable discharge [of oil] in adverse weather conditions * * *''
The FRP IFR provides at 33 CFR 154.1029 a formula for calculating the
worst case discharge for each facility. By substituting the phrase
``hazardous substances,'' in lieu of ``oil'', the definitions of worst
case discharge for vessels and facilities could be applied to the
hazardous substance regulations.
For vessels and facilities, maximum extent practicable is ``the
planned capability to respond to a worst case discharge in adverse
weather.'' Maximum extent practicable is tied to a quantity of
equipment and personnel needed to respond to a worst case discharge. It
recognizes the limits on available current technology and private
response capabilities and places a limit or cap on the worst case
discharge volumes for which an owner or operator must plan to respond.
However, this cap does not limit the amount of response resources which
owners or operators may have to provide during an actual spill
response.
For oil, planning to respond to the maximum extent practicable
generally implies planning for the containment and recovery of spilled
oil. However, the Coast Guard recognizes that the concept of
containment and recovery does not apply to all hazardous substances.
Some hazardous substances that are released in the water will not be
recoverable. For the hazardous substance regulations, planning to
respond to the maximum extent practicable will require planning to
protect the public health and safety, facility and vessel personnel,
responders, and the environment. This protection may require planning
for actions other than containment and recovery of discharged hazardous
substances. Through rulemaking, the Coast Guard would be able to
determine what types of response strategies would be required to
address releases of the various types of hazardous substances. The
Computer-Aided Management of Emergency Operations (CAMEO) appears to be
the most effective method for determining the appropriateness of a
response to a hazardous substance release. CAMEO is a computer program
used by many response organizations to properly prepare for and respond
to a hazardous substance release. It was developed by the National
Oceanic and Atmospheric Administration (NOAA), EPA, and the National
Safety Council. It is kept current by frequent updates, is widely used,
and is readily available.
[[Page 20087]]
7. Average Most Probable Discharge and Maximum Most Probable Discharge
Although OPA 90 requires the issuance of regulations that address
only the worst case discharge from a vessel or a facility, the VRP and
FRP IFRs for oil require owners or operators to plan also for the
average most probable discharges and the maximum most probable
discharges. These concepts were developed to address the majority of
the spills that occur on vessels and at facilities--spills which are
significantly lower in volume than the worst case discharge volume
required to be addressed in response plans by OPA 90.
In the VRP IFR for oil, the average most probable discharge is
defined as a discharge of 50 barrels of oil from the vessel during
transfer operations. The maximum most probable discharge is a discharge
of (1) 2,500 barrels of oil for vessels with an oil cargo capacity
equal to or greater than 25,000 barrels; or (2) 10 percent of the
vessel oil cargo capacity if less than 25,000 barrels.
If the FRP IFR for oil, the average most probable discharge is
defined as a discharge of the lesser of 50 barrels or 1 percent of the
volume of a worst case discharge. The maximum most probable discharge
is the discharge of the lesser of 1,200 barrels or 10 percent of the
volume of a worst case discharge.
The concepts for the average and maximum most probable discharge in
the VRP and FRP IFRs for oil could be applied to the regulations
requiring response plans for hazardous substances; however, the
definitions of the terms may need to be modified to specifically
address the differences inherent in hazardous substances. These
definitions in the oil regulations are based on historical spill data
of the volumes of oil discharged into the marine environment. For
hazardous substance response plan regulations, the definitions may need
to be modified to reflect the historical data for the volumes of
hazardous substances that have been released in the marine environment
provided that the data is reliable.
8. Other Response Plan Requirements
Section 4202(a) of OPA 90 requires both oil and hazardous substance
response plan regulations to address issues such as plan review and
approval; consistency with the National Contingency Plan and Area
Contingency Plans; identification of the qualified individual;
identification by contract or other approved means of private response
resources; description of training, equipment testing, drills, and
responsibilities of vessel and facility personnel; periodic updating of
plans; and resubmission and approval after each significant change of a
plan. These issues and others (i.e., plan format) are addressed in the
VRP and FRP IFRs for oil and could be handled similarly for the
hazardous substance response plan regulations.
9. Developing Effective Response Plans
A key element in developing effective response plans for hazardous
substances is the development of an approach for addressing the
different types of hazardous chemicals. In addition to the 296
hazardous substances regulated by the FWPCA, there are a number of
additional hazardous chemicals that are not designated as hazardous
substances by the EPA under FWPCA but that are transported in bulk in
the marine environment. Effective response planning should include all
hazardous chemicals carried in bulk, not just those determined as
hazardous substances by the EPA. The Coast Guard is interested in the
views of the regulated community and the general public with respect to
response plans for hazardous chemicals not regulated under the FWPCA.
Discussion of Areas of Regulation Under Consideration
Regulations covering the following areas are being considered to
implement the response plan requirements of section 311(j) of the
FWPCA. Comments and suggestions from interested parties are invited.
1. Response Plans
(a) Response plans for MTR facilities would be submitted to the
cognizant Captain of the Port (COTP) for approval.
(b) Response plans for vessels would be submitted to the Commandant
(G-MEP), U.S. Coast Guard Headquarters, Washington, DC for approval.
(c) Each plan may be required to contain the following information:
--Emergency notification procedures.
--Vessel-specific or facility-specific information.
--Name of qualified individual.
--List and location of release response and fire extinguishing
equipment (including equipment on board the vessel or equipment located
at the facility).
--Response personnel, job descriptions for key positions, and their
training.
--Cargo or commodity hazard identification.
--Emergency response guidelines for each hazardous substance (i.e.,
containment, cleanup, or other appropriate response measures).
--Emergency response guidelines for different scenarios (i.e., large
and small, fires and explosions, collision, grounding, salvage
operations, piping failure, releases in sensitive or populated areas,
offshore and shoreside releases, etc.).
--Salvage operations (vessels only).
--Lightering capabilities (vessels only).
--Waste disposal.
--Worker health and safety.
--Threats to environment or public health and safety.
--Identification of sensitive areas and resources to protect sensitive
areas (facilities only).
(d) Response plans would be required to be consistent with the
National Contingency Plan (NCP) [40 CFR part 300], as required by 33
U.S.C. 1321(c)(2), and the Area Contingency Plan (ACP) as required by
section 311(j)(4) of the FWPCA [33 U.S.C. 1321(j)(4)], as amended by
section 4202(a) of OPA 90.
All plans may be required to follow a general format. Certain
aspects of the response plan for vessels, such as on board emergency
response procedures would be ``generic'' in form, regardless of the
vessel's port of call. These generic aspects would form the main
``core'' of the response plan. Information that is unique to a port of
call, however, such as clean up contractors or local contracting
representatives, would be included in the response plan as appendices.
(e) A qualified individual would have to be identified in the
response plan. A ``qualified individual'' is a representative of a
vessel or facility with written authority to engage in contracting with
response companies and to activate necessary funds from the owner or
operator to carry out cleanup activities. This individual should have
sufficient training to direct response contractors pending the arrival
of a company representative. The qualified individual must have the
means for immediate communication with the appropriate Federal official
and the persons providing personnel and equipment for release response.
(f) A communications network, such as a release response telephone
list, would be required to identify which parties must be contacted
(i.e., Federal agencies, contractors, a call-up tree) and how those
communications would be established.
(g) Vessel and facility owners or operators would be required to
identify and ensure by contract or other approved means, the
availability of private personnel and equipment necessary to respond to
a release. When
[[Page 20088]]
appropriate, the Coast Guard would provide guidelines regarding what
type and amounts of equipment are required for an average most
probable, maximum most probable, and worst case discharge.
The Coast Guard would maintain an oversight and enforcement role in
verifying the contractual availability of equipment and personnel
between pollution contractors and owners or operators of tank vessels
or facilities. The local COTP representative would determine that local
contractors possess the necessary qualifications and resources to
address hazardous substance releases for which they are contracted. In
addition, the Coast Guard could review the contract arrangements
between the vessel or facility and contractor for the interim period
when the response plans are submitted but not yet approved.
(h) The plan would be required to address training, equipment
testing, periodic unannounced drills, and the response actions of
vessel or facility personnel. The regulations would specify criteria
describing acceptable levels for approval. For vessels, response
actions and persons assigned would be listed in the ship's station
bills and muster list, which is currently required under 46 CFR subpart
35.10--Fire and Emergency Requirements.
(i) Response plans would be submitted for initial approval as well
as for approval of each significant change. Significant changes would
include changes in a vessel's or facility's configuration; changes in
hazardous substance handled, stored, or transported; changes in the
name and authority of a person in charge; changes of the owners or
operators (depending on who received approval of the plan); or changes
in the identification of cleanup operators.
(j) Response plans would be required to be updated periodically.
2. Response Equipment
The response planning requirements for the response equipment would
address the following areas:
(a) The type, quantity, and capacity of response equipment to be
carried on tank vessels or staged at locations ashore.
(b) The periodic inspection of response equipment, including the
standards of inspection.
(c) The method for enforcement, whether through required
recordkeeping or other means.
The regulations regarding vessel and facility response plans for
discharges of hazardous substances may closely parallel those
regulations for vessel and facility response plans for discharges of
oil. Because the physical properties of these various hazardous
substances are different from those of oil, alternative cleanup
measures will need to be considered.
3. Federal Response and Contingency Plan Requirements
OPA 90 is the latest of a series of statutes that regulate
hazardous chemicals. An onshore facility is required to comply with
numerous planning requirements associated with the handling, storage,
transportation, and manufacturing of various hazardous chemicals. The
following discussion is a brief summary of the various Federal planning
requirements for hazardous chemicals.
Section 311(j)(5)(c) of the FWPCA [33 U.S.C. 1321(j)(5)(c)], as
amended by the Oil Pollution Act of 1990 (OPA 90), sets forth certain
minimum requirements for vessel and facility response plans for FWPCA
hazardous substances. The plans must--
--Be consistent with the requirements of the National Oil and Hazardous
Substances Pollution Contingency Plan (NCP) and Area Contingency Plans
(ACPs);
--Identify the qualified individual having full authority to implement
response actions, and require immediate communications between that
individual and the appropriate Federal official and the persons
providing response personnel and equipment;
--Identify and ensure by contract or other approved means the
availability of private personnel and equipment necessary to respond,
to the maximum extent practicable, to a worst case discharge (including
a discharge resulting from fire or explosion), and to mitigate or
prevent a substantial threat of such a discharge;
--Describe the training, equipment testing, periodic unannounced
drills, and response actions of persons at the facility, to be carried
out under the plan to ensure the safety of the facility and to mitigate
or prevent a discharge or the substantial threat of a discharge;
--Be updated periodically; and
--Be resubmitted for approval of each significant change.
In the case of onshore facilities, the OPA 90 Conference Report
recognizes that a ``substantial number of facilities that handle, store
or transport hazardous substances are subject to emergency planning
requirements under the Solid Waste Disposal Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the
Occupational Safety and Health Act, and other Federal statutes.'' [H.R.
Rep. No. 101-653, 101st Cong. 2nd Sess. 1990 at p. 151] Additionally,
the Conference Report recognizes that chemical emergency planning
requirements are in effect for communities under the Emergency Planning
and Community Right to Know Act (EPCRA). The Report also states that
the President should select onshore facility response plans in a manner
that will avoid duplicative or conflicting response plan review
requirements and should ensure that such plans are coordinated with the
community emergency planning effort under EPCRA.
Resource Conservation and Recovery Act (RCRA)
EPA regulations at 40 CFR part 264, subpart D issued under RCRA
establish requirements for owners and operators of hazardous waste
facilities to use in developing facility-specific contingency plans.
The plans must include response procedures; a list of all persons
qualified to act as a facility emergency coordinator; a list of all
emergency equipment and, when required, decontamination equipment at
the facility; evacuation plans, when evacuation could be necessary; and
arrangements upon which local police departments, fire departments,
hospitals, contractors, and State and local emergency response teams
have agreed to coordinate emergency services. The regulations pertain
to facilities that treat, store, or dispose of hazardous wastes as
defined in 40 CFR 261.3. Hazardous wastes include characteristics
wastes (see 40 CFR part 261, subpart C) and listed wastes (see 40 CFR
part 261, subpart D).
EPCRA or Title III of the Superfund Amendments and Reauthorization Act
of 1986 (SARA)
EPCRA requires Local Emergency Planning Committees (LEPCs) to
develop local emergency response plans for their community and review
them at least annually. Under EPCRA, facilities are required to notify
the State Emergency Response Commission (SERC) and Local Emergency
Planning Committee (LEPC) if they have ``extremely hazardous
substances'' (see 40 CFR part 355 for a list of the 360 ``extremely
hazardous substances'') present above threshold planning quantities. In
addition, upon request of the SERC or LEPC, the facility is required to
provide the LEPC with any information necessary to develop and
[[Page 20089]]
implement the LEPC plan. Local emergency response plans must identify
regulated facilities; describe procedures, equipment, and personnel to
respond to releases; and include evacuation plans. Because of this
requirement that certain facilities participate in emergency planning
under EPCRA, it is likely that some overlap may exist with OPA 90
response plan requirements. In addition, under some state EPCRA laws
facilities are required to prepare contingency plans.
Clean Air Act
Under section 112(r) of the Clean Air Act (CAA), as amended, owners
and operators of stationary sources with ``regulated substances'' above
specified threshold quantities will be required to prepare risk
management plans (RMPs), which must include a hazard assessment
(including, among other things, an evaluation of worst-case accidental
releases), a prevention program, and a response program. Owners and
operators are to provide a copy of the RMPs to the State, local
planning and response authorities, and the Chemical Safety and Hazard
Investigation Board. The list of ``regulated substances'' promulgated
under section 112(r) authority includes a diverse array of toxins (77),
flammables (63), and high explosives [see 59 FR 4493; January 31,
1994].
Section 112(r)(7) of the CAA requires that the hazard assessment
evaluate worst case accidental releases, estimate potential release
quantities, and determine downwind effects including potential
exposures to affected populations. Owners or operators must also
develop an emergency response program that includes specific actions to
be taken in response to a release including procedures for notifying
the public and response agencies, emergency health care, and employee
training measures. EPA is currently developing regulations to implement
the new CAA RMP requirements. In addition, some states already have RMP
rules in place that require facilities to develop emergency plans.
In addition, section 112(r)(1) of the CAA, as amended, indicates
that stationary sources have a general duty in the same manner and to
the same extent as under the Occupational Safety and Health Act to--
--Identify hazards that may result from accidental releases of
regulated substances or other extremely hazardous substances;
--Design and maintain a safe facility, taking such steps as are
necessary to prevent releases; and
--Minimize the consequences of accidental releases which do occur.
Section 112(r)(1) imposes upon owners and operators of facilities
emergency response duties for a broad range of hazardous chemicals not
restricted to a named list. Also under CAA section 112(r)(9), the EPA
Administrator may issue an administrative order to seek such judicial
relief as is necessary to abate an actual or threatened accidental
release when the Administrator determines there may be an imminent and
substantial endangerment to human health or the environment.
Occupational Safety and Health Act (OSHA)
OSHA has several sets of standards that envision some form of
emergency response planning for facilities that handle, store, or
transport hazardous substances. These requirements are directed mostly
at the protection of facility employees and emergency responders. The
OSHA Process Safety Management Standard (see 29 CFR 1910.119) requires
the preparation of emergency response plans under 29 CFR 1910.38(a) or
29 CFR 1910.120 for employers to prevent or minimize the consequences
of catastrophic releases of certain chemicals in the workplace.
Employers must develop formal process safety management program for
facility processes that involve a listed highly hazardous substance at
or above the threshold quantity. The list of highly hazardous
substances (see 29 CFR 191.119) includes 125 toxic and reactive
chemicals as well as several mixtures. The program covers employee
participation, process safety information, process hazard analysis,
operating procedures, training, contractors, pre-start up review,
mechanical integrity, hot work permits, management of change, incident
investigation, emergency planning and response, and compliance audits.
The EPA/OSHA Hazardous Waste Operations and Emergency Response
(HAZWOPER) Standard (see 29 CFR 1910.120) establishes requirements for
employers and organizations to protect the safety and health of workers
involved in such operations. The operations covered by this standard
are cleanups at uncontrolled hazardous waste sites, corrective actions
and routine hazardous waste operations at RCRA treatment, storage, or
disposal (TSD) facilities, and emergency response operations without
regard to location. Employers must implement a written safety and
health program that includes an organizational work plan, site
evaluation and control, information and training, personal protective
equipment, monitoring, medical surveillance, decontamination
procedures, and an emergency response program. The HAZWOPER list of
substances is broad and includes all 296 FWPCA hazardous substances.
Coordination of Planning Requirements
The issue of coordinating multiple contingency planning
requirements in an attempt to minimize duplication on the regulated
community is a focal point of the recently published Presidential
review of Federal agency authorities and coordination responsibilities
for release prevention, mitigation, and response required by section
112(r)(10) of CAA. EPA's Chemical Emergency Preparedness and Prevention
Office, in cooperation with the National Response Team, conducted a
study titled A Review of Federal Authorities for Hazardous Materials
Accident Safety (EPA550-R-93-002) to fulfill the Congressional mandate.
The review concludes that, while achieving its statutory goals, the
existing regulatory scheme is both complex and costly.
With respect to contingency planning, the report notes that the
previously mentioned statutes were enacted independently of one another
resulting in inconsistent components in the regulatory process. Some
planning requirements are more stringent than others; some require
specific technical features; and some require submission of the
contingency plans for Federal or State and local review. Also, because
different statutes address slightly different hazards using different
lists of substances, the number and type of facilities required to
develop these plans varies. Moreover, there is seldom harmony in the
required formats or elements of particular plans. Although the study
team did not find many actual conflicts among planning requirements,
there were numerous differences in terminology and emphases: these
differences have resulted in facilities preparing multiple plans to
ensure compliance.
To provide relief for the redundant and overlapping federal
response planning requirements faced by facility operators, under the
leadership of the Environmental Protection Agency (EPA), the National
Response Team is producing guidance on an integrated planning approach
which would ultimately result in the ability to prepare one plan to
cover multiple federal response planning requirements, thereby reducing
burden and cost for the regulated community. The ``One Plan'' guidance
is being developed
[[Page 20090]]
through a cooperative effort among numerous NRT agencies, state and
local officials, and industry and community representatives. Response
plans developed in accordance with One Plan guidance will be acceptable
to the federal agencies responsible for reviewing and/or approving
response plans developed to comply with the following regulations:
(a) EPA Oil Pollution Prevention Regulation (Spill Prevention,
Control and Countermeasure and Facility Response Plan Requirements)--40
CFR part 112;
(b) MMS Facility Responses Plan Regulation--30 CFR part 254;
(c) RSPA Pipeline Response Plan Regulation--49 CFR part 194;
(d) USCG Facility Response Plan Regulation--33 CFR part 154,
Subpart F;
(e) EPA Risk Management Programs Regulation--40 CFR part 68
(proposed);
(f) OSHA Emergency Action Plan Regulation--29 CFR 1910.38(a);
(g) OSHA Process Safety Standard--29 CFR 1910.119;
(h) OSHA HAZWOPER Regulation--29 CFR 1910.120; and
(i) EPA Resource Conservation and Recovery Act Contingency Planning
Requirement--40 CFR part 264, Subpart D, 40 CFR part 265, Subpart D,
and 40 CFR 279.52.
The integrated contingency planning approach is an effective way to
ensure response procedures are coordinated throughout the facility and
to avoid duplicative and potentially conflicting plans. The One Plan
format does not change the actual planning requirements imposed by
federal statute. The Coast Guard fully expects that any future
hazardous substance response planning requirements resulting from this
ANPRM will be accommodated within a facility's ``One Plan''.
Analysis reveals that there may be a significant degree of overlap
between the types of facilities and chemicals that would be regulated
under prospective OPA 90 requirements and those under existing response
planning requirements. However, the specific intent of OPA 90, with
respect to hazardous substances, is to address the discharge or
substantial threat of a discharge of a limited number and type of
substances (i.e., FWPCA hazardous substances) to U.S. surface waters.
The other regulatory programs discussed previously, for the most part,
have slightly different emphases in terms of the type of chemicals
covered, the primary media considered (e.g., air, land, water), and the
general purpose of the regulation (i.e., protection of the environment,
protection of workers, etc.).
The existence of these related planning requirements provide an
opportunity for the promulgation of regulations which allow a certain
degree of flexibility in the way owners or operators meet the OPA 90
statutory requirements. The Coast Guard requests comment on specific
examples of how existing Federal and State planning requirements can be
shown to satisfy one or more of the OPA 90 mandates. The Coast Guard
also requests comment on which OPA 90 requirements may not be
adequately addressed in existing plans and how such requirements can be
implemented in the least burdensome manner. For example, if the Coast
Guard accepted a plan prepared to meet State or other Federal
requirements (or the Federal baseline standard mentioned previously) as
long as it was adopted to meet OPA 90 requirements and cross-referenced
in an appropriate manner, would owners or operators still choose to
develop a separate plan?
The Coast Guard will provide the responses to this ANPRM to other
Federal agencies so that these agencies may develop options to satisfy
the OPA 90 mandate while minimizing the burden on facility owners and
operators.
Assessment
At this early stage in the rulemaking process, the Coast Guard
anticipates that any final rule may be considered a significant
regulatory action under section 3(f) under E.O. 12866. The Coast Guard
anticipates that any final rule will also require an assessment of
potential costs and benefits under section 6(a)(3) of that order. It is
significant under the regulatory policies and procedures of the
Department of Transportation (44 FR 11030; February 26, 1979).
This rulemaking may have a substantial effect on States that have
or are developing response plan requirements. It may also affect
domestic and international shipment of hazardous substances to and from
the United States and may generate substantial public interest and
controversy. The primary economic impact of these regulations would be
on those tank vessel and facility owners that would have to comply with
any new requirements. These vessels would include approximately 270
tank vessels and 540 tank barges carrying hazardous materials: these
figures represent the number of these vessels that called in United
States waters in 1990. The Coast Guard estimates that this regulation
would affect 300 MTR facilities. In addition, these regulations may
also impact private hazardous substance release response contractors
and spill cooperatives.
Several alternative methods of implementing the rulemaking for
vessel response plans have been identified. These include the
following: (1) Requiring response plans for specific tank vessels based
on factors such as vessel route, capacity, or product carried; (2)
requiring generic response plans for all tank vessels, with port
specific appendices; and (3) requiring individualized response plans
for each tank vessel and each facility.
The full extent of the economic and operational impact cannot be
quantified at this time. A primary purpose of this advance notice is to
help the Coast Guard to develop the rule and determine the cost of any
new requirements, to the extent that they exceed current legal and
regulatory requirements or current industry practice. The Coast Guard
anticipates that the public response to this advance notice will assist
it in writing proposed rule and a draft regulatory impact analysis.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the
Coast Guard must consider whether this proposal, if adopted, will have
a significant economic impact on a substantial number of small
entities. ``Small entities'' may include (1) Small business and not-
for-profit organizations that are independently owned and operated and
are not dominant in their fields and (2) governmental jurisdictions
with populations of less than 50,000.
Because specific requirements have not yet been proposed, the Coast
Guard is currently unable to determine the effect of regulations upon
small entities. Accordingly, an Initial Regulatory Flexibility Analysis
discussing the impact of this anticipated rulemaking on small entities
has not been prepared. However, the Coast Guard anticipates that there
is a potential significant impact on a substantial number of small
businesses, small not-for-profit organizations, and State and local
governments. The Coast Guard expects that the comments received on this
advance notice will assist it in determining the number of affected
small entities, and in weighing the impacts of various regulatory
alternatives for the purpose of drafting these regulations.
Collection of Information
Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the
Office of
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Management and Budget (OMB) reviews each proposed rule that contains a
collection-of-information requirement to determine whether the
practical value of the information is worth the burden imposed by its
collection. Collection-of-information requirements include reporting,
recordkeeping, notification, and other, similar requirements.
The Coast Guard cannot yet estimate the paperwork burden associated
with this rulemaking because no regulations have been drafted. However,
at a future stage, the Coast Guard may require that tank vessel and
facility owners and operators maintain records of response plan
approvals and equipment inspections which would be available upon
request to the Coast Guard as well as developing and maintaining
response plans. The Coast Guard expects that comments received on this
advance notice will assist it in estimating the potential paperwork
burden, as required under the Paperwork Reduction Act (44 U.S.C. 3501
et seq.). Once estimated, the Coast Guard will submit this proposed
recordkeeping requirement to the Office of Management and Budget (OMB)
for approval.
Federalism
This advance notice of proposed rulemaking has been analyzed in
accordance with the principles and criteria contained in Executive
Order 12612. Based on the information available to it at this time, the
Coast Guard is unable to determine whether this rulemaking would have
sufficient federalism implications to warrant the preparation of a
Federalism Assessment. Some standardization of vessel response plan
requirements is necessary because affected vessels move from port to
port in the national marketplace and separate regulations and plans for
each port would be economically burdensome and potentially unsafe.
Some standardization of the MTR facility response plans may also be
necessary. MTR facilities may be regulated by other Federal agencies,
and some States may impose their own response planning requirements.
OPA 90 prohibits Federal preemption. Many facilities operate in the
national marketplace and excessive variation in the requirements would
be economically burdensome and potentially unsafe. The Coast Guard
specifically seeks public comment on the federalism implications of
this proposal.
Environment
The Coast Guard considered the environment impact of this
anticipated rulemaking and expects that it should have a positive
impact on the environment by ensuring that hazardous substance response
planning has been conducted by owners or operators of tank vessels and
facilities for the purpose of enhancing preparedness to contain and
recover releases of these products. Before a proposed rule is
published, an environment analysis will be prepared in accordance with
Coast Guard requirements, COMDTINST M16475.1B. That document, which
will describe the anticipated environmental effects of the proposed
rulemaking, will be placed in the docket for inspection or copying at a
location indicated in the proposed rule. The Coast Guard invites
comments addressing possible effects this proposal may have on the
human environment, or on potential inconsistencies with any Federal,
State, or local law or administrative determinations relating to the
environment. A final determination regarding the possible need for an
environmental assessment will be made after receipt of relevant written
comments.
Questions
To adequately address the issues discussed in this advance notice,
additional information is needed. Responses to the following questions
would be particularly useful in developing a future Notice of Proposed
Rulemaking (NPRM).
Reponse Plans
1. Are there any historical data existing on hazardous substance
discharges in the marine environment (e.g., causes of discharges,
resulting injuries or fatalities, number of hazardous substances
discharged, volume of discharges, need to evacuate, and resulting
natural resource and property damage? If so, where can such data be
found? Are there any restrictions on the accessibility of this data?
2. Are there any data regarding the effectiveness of hazardous
substance response planning in terms of preventing occurrences of
casualties and incidents, reducing the volume of releases after the
occurrences of casualties and incidents, improving containment and
recovery, if possible, and avoiding injuries and fatalities)?
3. How many companies operate tank vessels that carry, or
facilities that store or transport hazardous substances? On the
average, how many vessels or facilities are operated by a single
company?
4. How should response plans for non-FWPCA hazardous chemicals
which are carried in bulk (e.g., noxious liquid substances as listed in
Annex II of MARPOL) be addressed?
5. How many different types of hazardous substances are carried
during a single voyage? How many different types of hazardous
substances are handled, stored, or transported by a single MTR
facility?
6. What are appropriate hazardous substance storage and throughout
thresholds for selecting facilities that could cause substantial harm
to the environment and for selecting the subset of those facilities
that could reasonably be expected to cause significant and substantial
harm to the environment? Should the Coast Guard use the capacity of a
vessel calling at an MTR facility as a means of selecting facilities
that could reasonably be expected to cause significant and substantial
harm to the environment?
7. Should the CAMEO program be used to determine the appropriate
response strategies for the various hazardous substances which may be
involved in a potential release? What alternative guidance is
available? Would you consider it more appropriate? If so, why?
8. For MTR facilities that are part of an onshore non-
transportation related fixed facility complex, are there potential
conflicts in the areas of hazardous substances regulated and the amount
of a worst case discharge?
9. Are there potential gaps in existing Federal regulatory coverage
for hazardous substance response plans for the onshore non-
transportation fixed facility portion of an MTR complex?
10. What information should be required in the tank vessel and
facility response plans?
11. Should the information provided in response plans for vessels
carrying hazardous substances and for facilities handling hazardous
substances vary depending on the type of substances transported? How
should substances be classified? Should each class of hazardous
substance have a different plan? Should vessel owners and facility
owners have a separate plan for each product they handle or should they
have product groups within the plan? How would response strategies
differ for the various types of hazardous substances?
12. Should all FWPCA hazardous substance be regulated at the same
threshold or should thresholds for individual substances be set based
upon the specific considerations associated with each substance? Should
the threshold level be based upon the reportable quantity (i.e.,
quantities of hazardous substances that may be harmful as set forth in
40 CFR 117.3, the
[[Page 20092]]
discharge of which is a violation of section 311(b)(3) of the FWPCA [33
U.S.C. 1321(b)(3)] and requires notice as set forth in 40 CFR 117.21
for the substance) or a multiple of the reportable quantity? What would
be an appropriate multiplier for such a determination?
13. How should the concept of ``responding to the maximum extent
practicable'' be applied for purposes of planning the response to a
worst case discharge of a hazardous substance? Should it be the same
for hazardous substances as it is for oil in 33 CFR parts 154 and 155?
14. How many U.S. companies provide response services for hazardous
substance releases and in what geographic areas would these services be
available? What response capabilities do these services have in terms
of amount and type of equipment and personnel available?
15. How should the concept of ``contracts or other approved means''
be applied for the purposes of planning the response to a worst case
discharge of a hazardous substance? What aspects of hazardous substance
spill response may warrant treatment different form oil spill
responses? What role do public responders (e.g., local fire department
personnel) play in response to releases of FWPCA hazardous substances
and how should their involvement be reflected in the planning
requirements?
16. What format should be used for the response plans?
17. For vessel response plans, what information should be required
in the ``core plans'' and in port specific annexes?
18. How often should the response plans be reviewed and updated by
vessel and facility owners and the Coast Guard? Should there be any
other reviewing entity? Should the frequency of review be dependent on
the type of substance transported?
19. Where should the response plans be kept on an unmanned tank
barge or a tank barge that is at anchor or underway? Should the plans
be kept on board a towboat when engaged in towing a barge with a
hazardous substance in bulk as cargo?
20. Are there vessels and facilities which have voluntarily
prepared response plans addressing a potential release of a hazardous
substance? Are there response plans for hazardous substances which were
prepared in response to other U.S. or international regulations or
policies?
21. Should the owner or operator of a facility that has already
prepared an emergency or contingency plan under Title III of the
Superfund Amendments and Reauthorization Act of 1986 (SARA) [Pub. L.
99-499, 100 Stat. 1613] or other applicable statute (EPCRA, RCRA, CAA,
and HAZWOPER) be permitted to amend that plan to incorporate hazardous
substance response plan provisions to comply with the requirements of
OPA 90?
22. If requested, the owner or operator of a facility must submit
Tier Two information forms to local authorities with jurisdiction over
the facility under Title III of SARA. Could the Title III, Tier Two
form be supplemented to comply with the requirements of OPA 90
regulations?
23. Should the term ``qualified individual'' be define differently
from its definition in oil response plan regulations? If so, why?
24. In addition to navigating the vessel, should the vessel crew be
required to do more than attempt to control or stop the discharge and
report it to the proper authorities?
25. Should hazardous substance response contractors listed by a
vessel or a facility (as a condition of approval of the vessel's or
facility's plan) be required to develop a local response plan
consistent with the Area Contingency Plan?
26. How should worst case discharges be determined for an MTR
facility? Should it be the same for hazardous substances as it is for
oil? If not, upon what should this determination be based? Should worst
case discharge quantities be based on probable accident or incident
scenarios and resulting releases?
27. How should adverse weather be defined and considered in
determining a worst case discharge of a FWPCA hazardous substance? How
might weather concerns differ when responding to a hazardous substance
discharge versus an oil discharge? For example, could a lack of wind,
rain, and strong currents result in a riskier situation when a
discharge of a hazardous substance is involved because of the potential
for the substance to accumulate due to lack of dispersion?
28. What should the definition of average most probable and maximum
most probable discharge be for vessels and facilities?
29. Do discharges that are smaller than a worst case discharge
dictate different response strategies and resource commitments?
30. What is an appropriate response action for releases of
hazardous substances as defined in the National Contingency Plan [40
CFR 300.5] as minor, medium, major, or catastrophic releases, or for a
worst case discharge, as defined in section 311(a) of the FWPCA [33
U.S.C. 1321(a)], as amended by section 4201 of OPA 90? How would the
appropriate response action be determined? Would it be measured by
distance from the release, distance from the closest equipment
launching facility, type of substance discharged, or by another means?
Should response action planning requirements reflect consideration of
the hazardous substance properties and hazards?
31. Should vessel damage stability and general arrangement plans be
maintained off the vessel as well as on board for salvage and
firefighting purposes? Where should they be located (i.e., Coast Guard
Marine Safety Center, local COTP, classification societies)? How
accessible should they be?
32. Should each vessel owner be required to maintain a response
plan for each U.S. port of call? Should the vessel owner or agent
representative in each port maintain a local plan which would be
sufficient for the vessels calling under his control?
33. What involvement, if any, should State or local authorities
have in the review or approval of vessel and facility response plans?
34. Using the definition of ``tank vessel'' in 46 U.S.C. 2101, what
impact will these regulations have on vessels that carry limited
quantities of hazardous substances in bulk as cargo or cargo residue
(passenger, cargo, or miscellaneous vessels)? Should any vessels be
exempt from these requirements? If so, what types, tonnages, and
capacities should these exemptions cover and why?
35. For certain classes of materials should the response plan
include evacuation and public notification procedures for areas
affected by the release as appropriate? How should plans address
threats to public health and safety, including bodies of water used for
drinking supplies? How should plans address threats to air quality?
36. Should a facility be required to plan for possible releases of
all hazardous substances carried by vessels calling at the facility
even if the facility does not typically handle those substances?
37. What type of response equipment should be required at
facilities? To what size discharge, if any, should the facility be
prepared to respond?
38. Should dispersion modeling (air and water) be required? Should
a minimum standard be set? What models are available to estimate the
dispersion of hazardous substances in the air or water?
39. Following an incident, what requirements should be in place for
[[Page 20093]]
taking samples of the water and the air? Should response plans include
requirements for air and water sampling?
Carriage and Inspection of Response and Firefighting Equipment
40. What types and how much hazardous substance response equipment
and firefighting equipment currently are carried on board tank vessels
or located at facilities?
41. Should all vessels required to have response plans also be
required to carry response equipment? Should some vessels be exempt
from equipment requirements?
42. What firefighting equipment would be necessary to have on board
a vessel or staged at a facility to respond to a possible fire
associated with the discharge of hazardous substances? Would the type
of equipment needed vary dependent upon the type of substance
discharged? What are the various firefighting options?
43. What equipment other than response and firefighting equipment
(e.g., transfer equipment, rescue equipment, and monitoring equipment)
should be addressed in response plans to prevent or mitigate a
potential hazardous substance release?
44. What response equipment is appropriate for vessels or manned
tank barges to carry, if any? Would the type of response equipment
needed vary dependent upon the type of substances carried?
45. What response equipment should be carried on board unmanned
tank barges, if any?
46. What are the appropriate capabilities of the equipment?
47. Should MTR facilities be required to have response equipment
staged at the facility?
48. If facilities are not required to stage equipment at the
facility, how much time should be allowed to bring response resources
to the facility?
49. How large a discharge should the response equipment be capable
of handling?
50. What equipment-inspection requirements are appropriate?
51. What equipment needs to be inspected?
52. Should the inspection be the responsibility of the owner or
operator and who should be required to maintain a record of that
inspection?
53. Should spot inspections of the equipment be made by Coast Guard
personnel as part of the vessel and facility inspection?
54. Should third-party inspection be used?
55. What action should be taken if required equipment is missing or
in disrepair?
56. What inspection requirements are appropriate for equipment
maintained by a cooperative or an independent organization?
57. Should the required equipment be approved by the Coast Guard?
58. Should the area of the vessel's operation or the regional
availability of support equipment affect the on board equipment-
carriage requirements?
59. Should tank barges in the same tow or fleeting area be
permitted to share equipment?
60. How should response equipment be deployed on unmanned tank
barges? Who should deploy the response equipment?
61. If containment boom is required, how much should be carried?
Should it be sufficient to completely encircle the vessel?
62. Should plans require an assessment of a local port's municipal
capabilities to respond to a hazardous substance release, including
firefighting capabilities?
63. What involvement, if any, should State or local authorities
have in the approval or inspection of response equipment?
64. Are there methods available to rate the capabilities of the
response and containment equipment?
65. Should frequency of inspections be the same as in the existing
oil response planning regulations?
66. How would compliance with this proposed regulation impact
compliance with other existing hazardous substance requirements?
67. Is there sufficient response equipment available to respond to
a worse case discharge? What, if any, caps should be placed on
equipment requirements?
68. Where is response equipment currently located? How should
required response times take into consideration the location of the
equipment? Are the response times established in the VRP and FRP IFRs
for oil appropriate for hazardous substance response planning in rivers
and canals, inland, nearshore, offshore, ocean, and Great Lakes waters?
If not, what other response times are appropriate?
Training
69. At the present time, what type of training do vessel and
facility personnel receive in the worker safety and response aspects to
hazardous substance releases? How many vessel and facility personnel
receive such training?
70. What training in the use of response equipment should be
required for vessel and facility personnel?
71. Should the Coast Guard or another entity certify providers of
this training?
72. Who should be required to have response training (i.e.,
licensed, unlicensed, deck or engine department personnel on board
vessels) among the vessel's crew and the facility's employees?
73. Should mariners be required to have their licenses or merchant
mariners' documents endorsed to show that the mariners have completed
emergency response training?
74. How can mariners and facility personnel demonstrate completion
of emergency response training?
75. What training in the implementation of the required response
plans should be included?
76. What specialized firefighting training should be required for
the crew of vessels carrying hazardous substances and personnel of
facilities that handle, store, or transport hazardous substances? How
will the training vary dependent upon the type of substances
transported by the vessel or handled, stored, or transported by the
facility?
77. What level of training will be required for qualified
individuals and responders?
78. Should hazardous substance response contractors be separately
classified by the Coast Guard? if yes, what should the criterion be?
Drills
79. Should drills be required in accordance with existing
regulations, i.e., as required in 33 CFR parts 154 and 155?
80. Should the Coast Guard adopt the National Preparedness for
Response Exercise Program (PREP) guidelines for hazardous substances?
81. Should there be a requirement to maintain a record of drills
conducted? Assuming records of drills will be required, where should
they be maintained? Should they be maintained on board vessels and at
facilities?
82. How should drill performance be measured?
83. What should the drill requirements be and should they be
different for different classes of substances?
84. How should drill performance be measured? What should be
considered acceptable performance (i.e., notification time, response
mobilization time, etc.)?
Economic Issues
85. What would be the economic impact of requiring each tank vessel
and facility to develop and implement a hazardous substance release
response plan? How would this impact vary
[[Page 20094]]
dependent upon the type of hazardous substances transported or handled?
86. How much would it cost to develop a hazardous substance
response plan, as described in this ANPRM, for single tank vessel or
facility? How would this cost vary depending upon the size and type of
tank vessel or facility? How would this cost vary by type of hazardous
substance transported, handled, or stored?
87. Would the per vessel or per facility cost to develop a response
plan for a fleet or tank vessels or group of facilities be lower than
the cost to prepare a response plan for a single vessel or facility?
88. What would be the cost to owners and operators of vessels and
facilities to annually review and update response plans?
89. What would be the economic impact for tank vessel or facility
owners or operators of maintaining on board or on site specialized
firefighting equipment?
90. What would be the economic impact on tank vessel or facility
owners or operators of reviewing and updating hazardous substance
release response plans?
91. What would be the economic impact on tank vessel or facility
owners or operators of maintaining on board or on site hazardous
substance release response equipment?
92. What would be the economic impact of these requirements on
small entities, as defined by section 605(b) of the Regulatory
Flexibility Act [5 U.S.C. 605(b)]?
93. What would be the economic impact for tank vessel and facility
owners or operators of maintaining contracts with release response
companies in each port they utilize?
94. What would be the economic impact on the cleanup industry of
enhancing hazardous substance response capabilities?
95. How much would it cost annually for a facility or tank vessel
to retain the services of a hazardous substance spill response
contractor to address its worst case discharge? How would this cost
vary by size and type of facility or vessel?
96. What would be the economic impact of requiring tank vessel and
facility owners or operators to train and drill personnel in worker
safety and release response?
Comments are not limited to the preceding questions and are invited
on any aspect of implementing the response planning requirements for
hazardous substance releases and the carriage of response and
firefighting equipment.
Dated: April 24, 1996.
Robert E. Kramek,
Admiral, U.S. Coast Guard, Commandant.
[FR Doc. 96-10997 Filed 5-2-96; 8:45 am]
BILLING CODE 4910-14-M
Complete official Federal Register PDF
FR Doc. 96-10993 Scallop Fishery off Alaska; Implementation of Federal Management Measures
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19902-19903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10993]
=======================================================================
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 673
[I.D. 042496B]
RIN 0648-AF81
Scallop Fishery off Alaska; Implementation of Federal Management
Measures
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce
ACTION: Notice of availability of an amendment to a fishery management
plan; request for comments.
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SUMMARY: The North Pacific Fishery Management Council (Council) has
submitted Amendment 1 to the Fishery Management Plan for the Scallop
Fishery off Alaska for Secretarial review. Amendment 1 would establish
a Federal management regime for the scallop fishery in Federal waters
off Alaska. Comments from the public are requested.
DATES: Comments on Amendment 1 must be submitted on or before June 28,
1996.
[[Page 19903]]
ADDRESSES: Comments on Amendment 1 should be submitted to Ronald J.
Berg, Chief, Fisheries Management Division, Alaska Region, NMFS, P.O.
Box 21668, Juneau, AK 99802-1668, Attn: Lori Gravel, or delivered to
the Federal Building, 709 West 9th Street, Juneau, AK. Copies of
Amendment 1 and the Environmental Assessment/Regulatory Impact Review/
Initial Regulatory Flexibility Analysis prepared for the amendment are
available from the Council, 605 West Fourth Avenue, Anchorage, AK
99501-2252; telephone 907-271-2809.
FOR FURTHER INFORMATION CONTACT: Kent Lind, 907-586-7228.
SUPPLEMENTARY INFORMATION: The Magnuson Fishery Conservation and
Management Act (Magnuson Act) requires that each Regional Fishery
Management Council submit any fishery management plan (FMP) or plan
amendment it prepares to NMFS for review and approval, disapproval, or
partial disapproval. The Magnuson Act also requires that NMFS, upon
receiving an FMP or amendment, immediately publish a document that the
FMP or amendment is available for public review and comment. NMFS will
consider the public comments received during the comment period in
determining whether to approve the FMP or amendment.
The management measures proposed under Amendment 1 include: (1)
Gear and efficiency restrictions, (2) scallop registration areas and
districts, (3) procedures for specifying total allowable catch and crab
bycatch limits, (4) time and area closures, (5) inseason management
authority, (6) fishing seasons, and (7) observer coverage requirements.
NMFS will consider the public comments received during the comment
period in determining whether to approve the proposed amendments. A
proposed rule to implement Amendment 1 has been submitted for
Secretarial review and approval. The proposed rule to implement this
amendment is scheduled to be published within 15 days of this document.
Dated: April 29, 1996.
Richard H. Schaefer,
Director, Office of Fisheries Conservation and Management, National
Marine Fisheries Service.
[FR Doc. 96-10993 Filed 4-29-96; 4:44 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-10936 Proposed Rulemaking Concerning Voting by Interested Members of Self-Regulatory Organization Governing Boards and Committees and Concerning the Publicizing of Broker Association Memberships
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19869-19878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10936]
=======================================================================
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Parts 1 and 156
Proposed Rulemaking Concerning Voting by Interested Members of
Self-Regulatory Organization Governing Boards and Committees and
Concerning the Publicizing of Broker Association Memberships
AGENCY: Commodity Futures Trading Commission.
ACTION: Proposed rulemaking.
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SUMMARY: The Commodity Futures Trading Commission (``Commission'') is
proposing a rulemaking which would implement the statutory directives
of Section 5a(a)(17) of the Commodity Exchange Act (``CEA'') as it was
amended by Section 217 of the Futures Trading Practices Act of 1992
(``FTPA'').1
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\1\ Pub. L. No. 102-546, sec. 217, 106 Stat. 3590 (1992).
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The proposed rulemaking would establish a new Commission Regulation
1.69 which would require self-regulatory organizations (``SROs'') to
adopt rules prohibiting governing board, disciplinary committee and
oversight panel members from deliberating and voting on certain matters
where the member has either a relationship with the matter's named
party in interest or a financial interest in the matter's outcome. The
proposed rulemaking also would amend existing Commission Regulations
1.3, 1.41 and 1.63 to make modifications made necessary by new
Commission Regulation 1.69. The Commission also is proposing to add a
new Regulation 156.4 to require that contract markets make more readily
available to the public the identity of members of broker associations
at their respective exchanges.
DATES: Comments on the proposed rules and proposed rule amendments must
be received by July 2, 1996.
ADDRESSES: Interested persons should submit their views and comments to
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581.
Telephone: (202) 418-5100.
FOR FURTHER INFORMATION CONTACT: David P. Van Wagner, Special Counsel,
Division of Trading and Markets, Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581.
Telephone: (202) 418-5481.
SUPPLEMENTARY INFORMATION:
I. Introduction
Section 217 of the FTPA amended Section 5a(a)(17) of the CEA to
provide that each contract market must ``provide for the avoidance of
conflict of interest in deliberations by [its] governing board and any
disciplinary and oversight committees.'' 2 FTPA Section 217
further describes certain conflict situations where committee members
must abstain from deliberations and voting, while also requiring that
the Commission promulgate regulations in this regard.
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\2\ For the purposes of this release, the term ``committee''
will generally be used to include governing boards, disciplinary
committees and oversight committees unless otherwise specified.
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Consistent with Section 217 of the FTPA, proposed Commission
Regulation 1.69 would generally bar an SRO committee member from
deliberations and voting on a committee decision where the member could
potentially be unduly influenced, due to either financial or personal
concerns, by the outcome of the decision. The Commission's proposed
rulemaking is intended to ensure that SRO committee actions are not
infected by any conflict of interest and are in the best interest of
the entire SRO. By furthering the impartiality of the SRO
decisionmaking process, the Commission believes that Regulation 1.69
should promote public confidence in the integrity of the self-
regulatory process.3
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\3\ The Commission notes that proposed Regulation 1.69 would be
the latest in an ongoing series of recent Commission rulemakings
aimed at enhancing the fairness and impartiality of the SRO
committee decisionmaking process. In 1990, the Commission adopted
Regulation 1.63 prohibiting persons with histories of disciplinary
violations from serving on various SRO committees. Prompted by the
FTPA, in 1993, the Commission adopted three separate rulemakings
dealing with SRO committee procedures and service. First, the
Commission amended Regulation 1.41 to establish conditions under
which contract markets may take emergency actions without prior
Commission approval, while also establishing specific procedures for
Commission review of such emergency actions. Second, the Commission
amended Regulation 1.59 to enhance its prohibition of SRO governing
board members and employees disclosing or trading on inside
information. Third, the Commission promulgated Regulation 1.64 which
establishes committee composition requirements to ensure that a
diversity of each SRO's membership is represented on its committees.
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[[Page 19870]]
The Commission notes that the governing boards of futures exchanges
are legally bound to not act in ``bad faith'' when taking actions on
behalf of an exchange. This ``bad faith'' standard was first
articulated in Daniel v. Board of Trade of the City of Chicago, 164
F.2d 815 (7th Cir., 1947), a case arising from Chicago Board of Trade
(``CBOT'') emergency actions raising the price limits on various grain
futures contracts due to price volatility. The plaintiffs in the case
lost money on their grain positions as a result of the CBOT's actions
and claimed that the CBOT's Board members acted ``wilfully,
maliciously, and for their own personal gain'' in imposing the
emergency price limits. 164 F.2d at 818. In the Daniel case, the Court
recognized that while exchange boards have a ``duty'' to address market
emergencies, they also have a ``relation to the public'' which requires
that they ``act with the utmost, objectivity, impartiality, honesty,
and good faith.'' 164 F.2d at 819-20. In order to prevail in a suit
challenging an emergency action, the Court determined that the
plaintiff must show ``bad faith amounting to fraud,'' since fraud would
imply a board's breach of its public trust. Id.
The ``bad faith'' standard governing exchange boards has been
consistently followed and further refined by the Commission and the
courts. Most recently, the Commission included a bad faith standard as
part of its amendment to Commission Regulation 1.41(f) setting forth
standards to be used by the Commission in assessing temporary exchange
actions addressing Regulation 1.41(a)(4) emergencies.4 The courts
have applied the ``bad faith'' standard a number of times to cases
where a board member may have had a personal financial interest in a
board decision due to his market position.5
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\4\ Under Regulation 1.41(f)(4)(i), within ten days after
Commission receipt of a notice of an exchange temporary emergency
action, the Commission will make a determination to permit such an
action to remain in effect unless it is: (1) arbitrary, capricious
or an abuse of discretion; (2) lacking a reasonable basis in fact;
or, (3) taken in bad faith by the contract market or its officials.
See 58 FR 26229 (May 3, 1993) for a full description of the
Commission's rulemaking regarding the review of contract market
emergency actions.
\5\ See, e.g., Sam Wong & Sons, Inc. v. New York Mercantile
Exchange, 735 F.2d 355 (7th Cir. 1975) and Bishop v. Commodity
Exchange, Inc., 564 F.Supp. 1557 (S.D.N.Y. 1983).
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The Commission believes that by including more specificity in the
factors to be considered with respect to barring persons with potential
financial or personal interests from deliberating and voting on
committee decisions, the proposed rulemaking should reduce the
potential for collateral attack of such committee decisions on the
grounds that they were made in ``bad faith.'' The Commission has
attempted to structure proposed Regulation 1.69 to provide guidance to
SROs, consistent with the new provisions of the FTPA, on what type of
committee member circumstances could be the basis for ``bad faith''
challenges.
In proposing Commission Regulation 1.69, the Commission does not
intend to exclude the views of any particular group or groups
represented on SRO committees. By requiring that committee members with
potential biases abstain from participating in committee proceedings,
the Commission is attempting only to ensure that SRO committee
decisions serve the best interests of the entire SRO membership and the
public, rather than the self-interests of a few committee
members.6
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\6\ The Commission notes that current Regulation 1.64
establishes composition requirements for SRO committees in order to
ensure that a diversity of membership interests are represented on
such committees. See 58 FR 37644 (July 13, 1993) for a full
description of Commission Regulation 1.64 and its underlying
rationale. In this connection, the Commission specifically invites
comment on how to balance the goals of Regulation 1.64 and the goals
of FTPA Section 217 and proposed Commission Regulation 1.69 with
respect to conflicts.
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II. Description of Proposed Rulemaking
The following description consists of a section-by-section analysis
of the Commission's proposed rulemaking. In addition to explaining the
rationale and operation of the proposal, this description is intended
to provide interested persons with a framework for addressing issues
which may be raised by particular provisions of the rulemaking.
A. Proposed Regulation 1.69(a)--Definitions 7
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\7\ This section will discuss only those term definitions which
could raise noteworthy issues.
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1. Self-Regulatory Organizations
Proposed Regulation 1.69's conflicts restrictions would apply to
each SRO governing board, disciplinary committee and oversight panel.
Proposed Regulation 1.69(a)(6)'s definition of SRO would include
contract markets, clearing organizations and registered futures
associations (``RFAs''). While Section 217 of the FTPA specifies that
``contract markets'' must adopt conflict of interest provisions, the
Commission believes that it is appropriate for proposed Regulation
1.69's conflicts restrictions to extend to clearing organizations and
RFAs as well.
In making clearing organizations subject to proposed Regulation
1.69, the Commission notes that FTPA Section 217 requires that its
conflicts restrictions apply to committees handling certain types of
margin changes. Margin levels in the futures industry, however, are
established by both contract markets and clearing organizations. The
Commission does not find any reason to distinguish between contract
markets and clearing organizations with respect to the potential for
conflicts of interests when making margin decisions. In addition, there
are already a number of instances where the Commission has taken CEA
requirements addressed to contract markets and applied them to clearing
organizations. For example, Section 5a(a)(12)(A) of the CEA mandates
Commission review of ``contract market'' rules, while Commission
Regulation 1.41, which establishes procedures for Commission review of
such rules, specifically includes clearing organizations within the
definition of contract markets for these purposes. For these reasons,
the Commission believes that it would be appropriate to make clearing
organizations subject to proposed Regulation 1.69.
The Commission also believes that it would be beneficial to apply
its proposed rulemaking to RFAs in order to ensure that their
committees would be able to make decisions which were free from the
potential taint of committee member bias and self-interest.8
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\8\ As noted in footnote 10 below, however, the rulemaking would
have a more limited impact on RFAs as opposed to contract markets
and clearing organizations.
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The Commission particularly seeks comment on its proposed
definition of SRO and whether it would be consistent with the
principles endorsed by FTPA Section 217 to extend this proposed
rulemaking to clearing organizations and RFAs in addition to contract
markets.
2. Governing Boards and Oversight Panels
Proposed Regulation 1.69(a)(2)'s definition of governing board
would
[[Page 19871]]
include any SRO ``board of directors, board of governors, board of
managers, or any similar body'' and any subcommittee thereof, such as
an executive committee, which is authorized to take action on behalf of
the SRO. Proposed Regulation 1.69 also would apply to SRO oversight
panels which have the responsibility of formulating and carrying out an
SRO's self-regulatory responsibilities.9
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\9\ In order to consolidate the Commission's Regulations,
``oversight panel'' would be defined by a new Commission Regulation
1.3(tt). That provision would define oversight panel for application
in both current Regulation 1.63 and proposed Regulation 1.69. The
definition would be identical to Commission Regulation 1.63(a)(4)'s
current oversight panel definition.
The Commission notes that its ``oversight panel'' definition is
intended to cover floor committees when they make decisions such as
changing a price quote on a price change register, setting modified
closing call ranges and establishing settlement prices. Please
comment on whether the oversight panel definition needs to be
clarified in any way to incorporate floor committees when they
engage in such activities.
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3. Disciplinary Committees
Proposed Regulation 1.69(a)(1) would define an SRO ``disciplinary
committee'' to mean a body which was authorized by an SRO ``to conduct
disciplinary proceedings, to settle disciplinary charges, to impose
sanctions, or to hear appeals thereof.'' 10 This definition, in
combination with the proposed formulation of Regulations 1.69(b)(1) and
(2), would ensure that Regulation 1.69's conflicts restrictions would
apply to disciplinary committee members when they deliberated and voted
on matters as a body, but would not apply to members of disciplinary
committees when they individually exercised disciplinary powers. Thus,
it would not include a floor committee member who disposes of minor
disciplinary violations by individually issuing summary fines or other
limited penalties, but it would apply to instances where more than one
floor committee member is required to endorse a decision.
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\10\ In this connection, the Commission also is proposing to
amend Regulation 1.63's definition of ``disciplinary committee'' so
that it will be identical to proposed Regulation 1.69(a)(1). To make
these two definitions identical, Regulation 1.63(a)(2) would be
revised by deleting ``disciplinary hearings'' and substituting
``disciplinary proceedings.''
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While the Commission recognizes that restrictions on conflicted
members participating in disciplinary matters promotes the impartiality
of the disciplinary process, it also believes that applying such
restrictions to floor committee members acting individually may present
countervailing problems. One apparent disadvantage of such an
application would be that it might actually diminish the coverage of an
SRO's compliance program. For example, if an individual floor committee
member were subject to Regulation 1.69's conflicts restrictions, he
would be prohibited from summarily fining any floor trader with whom he
had one of the specified relationships, even if he directly observed
violative conduct by such a trader. In those instances where such a
floor committee member was the only committee member responsible for
monitoring trading activity in a particular pit, such behavior might go
unpunished.
Applying conflicts restrictions to disciplinary committee members
when they act individually might also present more practical
difficulties. As currently proposed, Regulation 1.69 would require that
before each disciplinary proceeding SRO staff must determine whether
any committee member has a conflict in the matter. Floor committee
members, however, typically issue summary fines to SRO members who
commit minor rule violations on the trading floor (e.g., violations of
dress and decorum rules). Requiring floor committee members to submit
to some prior staff review in these circumstances could undermine, or
possibly eliminate, their ability to discipline violative behavior
expeditiously.
The Commission seeks comment on its proposed application of
Commission Regulation 1.69's conflicts restrictions to disciplinary
committees and floor committees in particular. Does the current
proposed approach strike an equitable balance between the need for an
impartial disciplinary mechanism versus the need for the deterrent
effect of having floor committee members on exchange trading floors?
Are there other ways in which to further both of these goals?
4. Significant Actions
As explained below, proposed Regulation 1.69's conflicts
restrictions would apply to SRO committees when they consider any
``significant action which would not be submitted to the Commission for
its prior approval.'' Proposed Regulation 1.69(a)(7)'s definition of
that term would include, at a minimum, two types of SRO actions. First,
the term would include SRO actions or rule changes which address
emergencies at an SRO, as they are defined by Commission Regulation
1.41(a)(4), including actual or attempted market corners, squeezes or
manipulations. Second, proposed Regulation 1.69(a)(7)'s definition also
would include SRO margin changes which ``respond to extraordinary
market conditions when such conditions are likely to have a substantial
effect on prices in any contract traded or cleared'' at the SRO.11
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\11\ Notably, under this definition, RFA committees would not
consider either of the two types of SRO actions which would
constitute a ``significant action which would not be submitted to
the Commission for its prior approval.'' Accordingly, this aspect of
Regulation 1.69's conflicts restrictions would be inapplicable to
RFA committee members. See proposed Commission Regulation 1.69(b)(2)
and Section II.C. below. RFA committee members would, however, be
subject to proposed Regulation 1.69(b)(1)'s restrictions on SRO
committee members considering matters in which they had a
relationship with the named party in interest (e.g., disciplinary
cases). See proposed Commission Regulation 1.69(b)(1) and Section
II.B. below. The Commission invites comment on whether it should
revise proposed Commission Regulation 1.69 to specifically exclude
RFA committees from being subject to Regulation 1.69(b)(2)'s
restrictions on SRO committees which consider a ``significant action
which would not be submitted to the Commission for its prior
approval.''
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The proposed definition of a ``significant action which would not
be submitted to the Commission for its prior approval'' generally
follows Congress' definition of that same term in FTPA Section 217. The
Commission believes that its proposed definition should capture those
circumstances in which a committee member's conflict would have the
greatest potential to influence SRO actions. The proposed definition
has been limited to committee actions which could have an immediate
impact on the marketplace and, consequently, the positions of SRO
committee members, because those are the situations in which a
decision- maker most likely would be influenced by self-interest. The
proposal does not intend to suggest that any particular significant
action would have a predictable impact on market prices; in fact, the
experience of the Commission in assessing the consequences of prior
emergency actions has been to the contrary. That being said, it is
critical for public confidence in self-regulation that such actions be
perceived as being applied even-handedly and not to the advantage or
disadvantage of any given group. The Commission has attempted to
formulate a definition which addresses the objectives explicitly set
forth in the legislation the rulemaking is intended to implement, but
which, at the same time, does not do unnecessary injury to the
mechanics of the SRO committee decisionmaking process and the ability
of the SRO to engage in effective self-governance activities.
The Commission seeks comment on whether there are any other types
of SRO actions or rule changes which should be subject to Regulation
1.69's conflicts restrictions. For instance, the Commission currently
proposes to limit
[[Page 19872]]
the conflicts restrictions to SRO actions which would not be submitted
for prior Commission review, because the Commission approval process is
intended to consider the public interest and to insulate SRO actions
from impropriety. The rule approval process requires a discussion of
all opposing views and a statement of the purpose of each rule change.
Ordinarily, such rule changes do not even have the potential to affect
prices. Nonetheless, the Commission requests comment on whether the
public interest would be better served if a broader range of SRO
actions, whether or not there was prior Commission review, were subject
to conflicts restrictions. If so, what other types of SRO actions
should be covered? 12
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\12\ For example, should changes to a price quote on a price
change register, setting modified closing call ranges, or
establishing settlement prices be particularly included in
Regulation 1.69's definition of a ``significant action which would
not be submitted to the Commission for its prior approval.''
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B. Proposed Regulation 1.69(b)(1)--Relationship With Named Party in
Interest
Proposed Regulation 1.69(b)(1) would mandate that SROs implement
rules requiring that committee members abstain from deliberating and
voting on any matter in which they had a significant relationship with
the matter's ``named party in interest.'' 13 Proposed Regulations
1.69(b)(1) (i) through (v) would list the types of relationships
between a committee member and named party in interest which would
require abstention, including family 14 and employment 15
relationships.
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\13\ For these purposes, proposed Commission Regulation
1.69(a)(5) would define a ``named party in interest'' as a ``party
who is identified as the subject of any matter being considered'' by
an SRO committee.
\14\ Proposed Regulation 1.69(b)(1)(v) would prohibit a
committee member from deliberating and voting on a matter if he was
in the immediate family of the named party in interest. Proposed
Regulation 1.69(a)(3) would define ``immediate family'' to mean a
person's ``spouse, parent, stepparent, child, stepchild, sibling,
stepbrother, stepsister, or in-law.''
\15\ Under proposed Regulation 1.69(b)(1)(ii), a committee
member could not deliberate or vote on any matter in which the named
party interest was an employer, employee or fellow employee of the
committee member.
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Another type of relationship which would be the basis for
abstention, under proposed Regulation 1.69(b)(1)(iv), would be if the
committee member and the named party in interest had a ``significant,
ongoing business relationship.'' Under this provision, for example, a
committee member would be prohibited from participating in a matter in
which he and the named party were co-owners of a business venture. In
order to clarify this provision, the Commission proposes to include any
clearing relationship within the scope of a ``significant, ongoing
business relationship,'' but proposes to exclude relationships which
are limited to executing futures or option contract transactions
16 with each other. In drawing this distinction, the Commission
notes that two parties in a clearing relationship typically rely upon
each other, to some degree, to carry on their respective businesses.
Accordingly, the Commission believes that parties to a clearing
relationship may not be totally impartial if one party was involved in
considering an SRO committee action which directly bore upon the other
party. The Commission notes that under proposed Commission Regulation
1.69(b)(1)(iii), members of a broker association would be required to
abstain from deliberations and voting on any SRO committee matter in
which one of its members was a named party in interest.
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\16\ For these purposes, the Commission would consider exchange
of futures for physical transactions and CEA Section 4(c) contract
market transactions to be futures and option contract transactions
under proposed Regulation 1.69(b)(1)(iv).
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The Commission invites comment as to whether any other specific
type of relationship should be included or excluded as a ``significant,
ongoing business relationship'' for the purposes of proposed Regulation
1.69(b)(1)(iv). For example, two SRO members might do a significant
amount of transactional business with each other outside of the SRO as
counterparties in the over-the-counter market. Could such a
relationship give rise to a potential conflict because of the frequency
of contacts? Or, should whether or not a transaction is arms length
govern the possibility for conflicts?
While the Commission anticipates that proposed Regulation
1.69(b)(1)'s restrictions would most oftentimes be applied to
disciplinary cases because they involve named respondents, the
provision also would pertain to any matter handled by an SRO governing
board, disciplinary committee or oversight panel in which there was a
particular named party in interest. Accordingly, the proposed conflict
restrictions would apply to such committees if they were to review a
membership application or consider some action with respect to a
particular individual (e.g., directing a person to reduce his position
in a contract).
The Commission believes that this proposed provision should reduce
the potential for committee members to be unduly influenced by family
and personal business considerations. Accordingly, the provision should
help to assure that committee decisions will be the result of fair
deliberations and will not be tainted by the real or perceived self-
interest of committee members.
The Commission notes that Section 217 of the FTPA states that
contract markets must adopt rules requiring that committee members
abstain from ``confidential'' deliberations and voting on matters where
they have a relationship with the named party in interest. Commission
Regulation 1.69(b)(1), which is being proposed in furtherance of that
provision, takes the more prophylactic approach of applying its
conflicts restrictions to all deliberations and voting on such matters,
whether they are confidential or non-confidential. The Commission
believes that this approach should help to reduce the potential for
biased decisionmaking in both settings. Theoretically, in non-
confidential committee meetings outsiders would be able to monitor the
fairness of a committee's decision-making process. The Commission
questions, however, whether there could ever be an effective outside
presence at SRO committee proceedings given their history of usually
being closed to the public. In addition, the Commission believes that
even in a public setting it would be difficult to detect any one
committee member's bias or prejudice on a matter unless the member also
publicly disclosed any possible relationships with the named party in
interest.
C. Proposed Regulation 1.69(b)(2)--Financial Interest in an Action
Proposed Commission Regulation 1.69(b)(2) would require that SRO
committee members abstain from committee deliberations and voting on
certain matters in which they would have a ``direct and substantial
financial interest.'' The proposed restriction would only apply when a
committee is considering ``a significant action which would not be
submitted to the Commission for its prior approval.'' As discussed in
Section II.A. above, those committee actions would include, at a
minimum, Regulation 1.41(a)(4) emergency actions and margin changes
which respond to market conditions which are likely to have a
substantial effect on the prices of any contract traded or cleared at
the SRO.17
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\17\ See proposed Commission Regulation 1.69(a)(7).
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[[Page 19873]]
In determining a committee member's financial interest in a
possible committee action, Regulation 1.69(b)(2) would require SROs to
review for positions of the member, the member's family, the member's
firm and the customers of the member's firm held in any contract which
could be affected by the committee action.18 With respect to a
committee member's personal positions, proposed Regulations 1.69(b)(2)
(i) and (ii) specifically would require that SROs consider gross
positions in the subject contract held in the member's personal
accounts, the member's Regulation 1.3(j) controlled accounts and any
accounts in which the member had a significant financial interest.
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\18\ While proposed Regulation 1.69(b)(2) would specify what
positions SROs must review in determining whether an SRO committee
member would have a ``direct and substantial financial interest'' in
an SRO committee action, proposed Regulation 1.69(b)(3) would
specify what sources of position information an SRO would be
required to consider, at a minimum, in making such a determination.
See Section II.D. of this release below for a further description of
Regulation 1.69(b)(3).
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Regarding positions of the member's family, proposed Regulation
1.69(b)(2)(iv) would require that SROs review gross positions held in
the personal accounts or Regulation 1.3(j) controlled accounts of the
member's immediate family. For these purposes a committee member's
immediate family would be defined by proposed Regulation 1.69(a)(3),
excluding those immediate family members who were not dependents of the
member and who did not reside with the member. The Commission has
proposed this exclusion in order to limit the provision to position
information which a committee member likely would know in the ordinary
course.
SROs reviewing for a committee member's financial interest in a
committee matter also would be required to consider gross positions
held in the member's firm's proprietary accounts, net positions held in
customer accounts at the member's firm and gross positions held by any
customers who constituted a significant proportion of business for the
member's firm.
Proposed Commission Regulation 1.69(b)(2) would specifically fix
the types of positions which SROs would have to review in determining
whether a committee member had a ``direct and substantial financial
interest'' in the outcome of the committee's consideration of ``a
significant action which would not be submitted to the Commission for
its prior approval.'' The proposal would not, however, set any specific
standards as to what position size warranted a member's abstention from
deliberations and voting on a matter. Rather, the Commission has
endeavored to give SROs flexibility in complying with this aspect of
its proposed rulemaking.
The criteria for each SRO in evaluating whether a committee member
would have a ``direct and substantial financial interest'' in a
committee action must be the extent to which an individual would be
exposed to market risk, the size of the individual's positions, whether
or not market neutral, relative to the market and, with respect to a
committee member's affiliated firm, the potential effect on the firm's
capital. The Commission would expect each SRO to weigh a variety of
factors in making these determinations. Each SRO should assess the
magnitude and probable market impact of the underlying ``significant
action.'' A possible margin change or emergency action for a contract
might be so profound that even the smallest position in the contract
could be affected by the measure. Likewise, a committee member might
not have a particularly large position in any one of the categories
listed in Regulation 1.69(b)(2) (i) through (vi). However, if a
member's positions in each one of these categories were similarly
aligned such that they all would be favorably or unfavorably impacted
by even a moderate margin change, the member should be required to
abstain from participating in deliberations and voting on such a
possible margin action.
The Commission invites comment on its proposed approach to
determining whether a committee member has a ``direct and substantial
financial interest'' in a matter being considered by an SRO committee.
What numerical thresholds for margin changes or position sizes could
the Commission establish for SROs in this regard? What other
requirements could the Commission impose in this area to require SROs
to make more objective abstention decisions? For example, a
straightforward approach to this issue could be to require abstention
by committee members with any position in a contract which could be
impacted by a committee's significant action. Please comment on the
effect of such an approach.
D. Proposed Regulation 1.69(b)(3)--Abstention Decision
Proposed Commission Regulation 1.69(b)(3) would mandate procedures
which SROs would have to follow in determining whether any SRO
committee members must abstain from deliberations and voting on a
matter due to a conflict. These procedural requirements would apply
whenever an SRO governing board, disciplinary committee or oversight
panel took up a matter involving: (1) a named party in interest (See
proposed Regulation 1.69(b)(1)); (2) an action or rule change
addressing a Regulation 1.41(a)(4) emergency (See proposed Regulations
1.69(a)(7)(i) and 1.69(b)(2)); or, (3) a margin change designed to
respond to extraordinary market conditions when such conditions would
be likely to have a substantial effect on prices in any contract traded
at the SRO (See proposed Regulations 1.69(a)(7)(ii) and 1.69(b)(2)).
Prior to a committee's consideration of any such matter, proposed
Regulation 1.69(b)(3) would require the SRO's staff to make a
determination whether any member of the committee was subject to any of
the conflicts situations listed in Regulations 1.69(b) (1) and (2). In
determining whether a conflict existed under Regulation 1.69(b)(1), the
Commission would expect SRO staff to ascertain whether any committee
member had a relationship with the named party in interest based upon
its available records and questioning of the committee's members. In
the case of conflicts based upon a committee member's financial
interest in a committee's action under Regulation 1.69(b)(2), SRO staff
would be required to review the positions listed in Regulation
1.69(b)(2) for each committee member. In ascertaining this position
information, an SRO's staff would be permitted to rely upon:
(1) The most recent large trader reports and clearing records
available to the staff;
(2) Position information provided to the staff by committee members
pursuant to Regulation 1.69(c); 19 and,
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\19\ See proposed Commission Regulation 1.69(c) and related
Section II.F. of this release below for a description of each
committee member's position reporting responsibility.
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(3) Any other source of position information which was readily
available to the staff.20
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\20\ Proposed Commission Regulation 1.69(b)(3)(i)(A) (1) through
(3).
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The Commission believes that by consulting this range of easily
accessible sources of position data, SRO staffs should be able to make
a well-informed decision as to whether any committee member has a
financial interest in a committee action.
Under proposed Regulations 1.69(b)(3)(i) (B) and (C), SRO staff
would be required to determine whether any committee member had a
conflict, under either Regulation 1.69(b)(1) or (2), and
[[Page 19874]]
to direct any committee member with such a conflict to abstain from
deliberations and voting on the matter.
Whenever SRO staff made an abstention determination pursuant to
proposed Regulation 1.69(b)(3)(i), proposed Commission Regulation
1.69(b)(3)(ii) would require the SRO committee considering the
underlying substantive matter to include certain information regarding
the abstention determination in the minutes of its meeting. Such a
record would be required to indicate, among other things, the committee
members who attended the meeting, the staff member(s) who reviewed the
committee members' positions, a listing of the position information
reviewed for each committee member, the names of any committee member
directed to abstain and the reasons thereof. The Commission believes
that these recordation requirements would enable SROs to demonstrate
the propriety of their abstention decisions should they be called into
question by either SRO members, the Commission or the public. In
addition, such records would be useful to the Commission in any future
evaluation of Regulation 1.69 and the SROs' implementing rules and
procedures.
In instances when a committee member was permitted to deliberate
but not vote on a matter pursuant to proposed Commission Regulation
1.69(b)(4), the committee's records would be required to include a full
description of the views expressed by such member during the
committee's deliberations on the underlying substantive matter. This
description should not be limited to a recital of the committee
member's presence at the meeting, but should detail the views and
supporting arguments offered by the member at such meeting. To ensure a
full description of the member's views, SRO committees should consider
making transcripts of the pertinent portions of such a meeting. The
Commission believes that this requirement should deter such a committee
member from offering strictly self-interested advice to an SRO
committee.
Under proposed Regulation 1.69(b)(3), the Commission would confer
the responsibility for making abstention determinations on SRO staff.
The Commission believes that this approach would best assure that the
process of making such determinations would not adversely impact the
SRO committee decisionmaking process.
The Commission understands that this provision's proposed approach
would closely follow the procedures which most SROs currently use when
handling committee member conflicts. Notably, a number of SRO staff
members indicated to Commission staff that SRO committee members rarely
resist their staffs' abstention recommendations based upon potential
conflicts.
The Commission invites comment on the efficiency of these proposed
procedures for handling abstention decisions, and particularly its
approach to having SRO staff gather position information. Would the
proposed procedures be administratively burdensome for SRO staffs or
should the Commission grant SRO staffs more discretion in this regard?
Would the specified range of position information to be gathered
provide a sufficient basis for making a fair assessment of a committee
member's potential conflict of interest with respect to any particular
committee matter?
Should the Commission's rulemaking include any provisions for
appealing abstention determinations by SRO staff? For instance, should
the rulemaking allow SRO committees to include ``conflicted'' members
in deliberations and voting on matters when the member's vote was
needed to obtain a quorum? 21
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\21\ Note that, as described in Section II.E. below, the
Commission's proposed rulemaking already would permit, in specified
circumstances, ``conflicted'' committee members to participate in
committee deliberations, but not voting, on certain matters.
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E. Proposed Regulation 1.69(b)(4)--Participation in Deliberations
In a limited number of circumstances, proposed Commission
Regulation 1.69(b)(4) would permit SRO committees to allow a committee
member, who otherwise would be required to abstain from deliberations
and voting on a matter because of a conflict, to deliberate but not
vote on the matter.22 Regulation 1.69(b)(4) only would permit such
a ``deliberation exception'' for matters in which a committee member
``knowingly [had] a direct and substantial interest in the result of
the vote'' under proposed Regulation 1.69(b)(2). Consistent with
Section 217 of the FTPA, this exception would not apply to matters in
which a committee member had a conflict, under proposed Regulation
1.69(b)(1), due to his or her relation with the matter's named party in
interest.
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\22\ Under Regulation 1.69's proposed abstention determination
procedures, SRO staff would make the initial determination of
whether a committee member should be required to abstain from
deliberations and voting on any particular committee matter. For
reasons discussed in this section below, however, the Commission
proposes that only SRO committees, and not SRO staff, be able to
permit a committee member to participate in deliberations, but not
voting, on a committee matter.
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While the conflicts restrictions established by Section 217 of the
FTPA further the fairness and integrity of the decisionmaking processes
of SRO committees, Section 217 also recognizes that in some instances a
committee member with a conflict with respect to a particular matter
might also have special knowledge or experience regarding that matter.
Accordingly, proposed Regulation 1.69(b)(4) would allow such members to
participate in deliberations only, but subject to qualifying criteria
limiting such participation to instances where the committee believed
that it had insufficient expertise to consider a matter and needed such
a member to participate.
In determining whether to permit a committee member to deliberate
on a matter, proposed Regulation 1.69(b)(4)(i) would require the
presiding committee to consider a number of factors including: (1)
Whether the member had special expertise in the matter involved which
few or no other members of the committee had; (2) whether the
committee's ability to meaningfully deliberate would be adversely
affected by the member's non-participation; and (3) whether the
member's participation in deliberations would be necessary for the
committee to obtain a quorum.23
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\23\ This factor presumes that an SRO's quorum requirement is
based upon the number of committee members who can deliberate on a
matter and not upon the number of committee members who can vote on
a matter. See Robert's Rules of Order Sec. 3 (Henry M. Roberts III
and William J. Evans, eds., 9th Ed. 1990). The Commission invites
comment from SROs on whether the proposed approach would be
consistent with their committees' quorum requirements.
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Given the factors which must be considered, the Commission believes
that deliberation exception decisions should be made by the committee
involved, rather than SRO staff. For any particular matter to be
considered by an SRO committee, the committee members themselves would
be in a better position than SRO staff to assess their individual
levels of expertise in the matter and their need for input during
deliberations from the committee member who otherwise would be required
to abstain.
In order to help ensure that committees handle deliberation
exception decisions in an impartial manner, proposed Commission
Regulation 1.69(b)(4)(ii) would require that any such exception must be
approved by all ``public'' members of the presiding committee (i.e.,
committee members who are not members of the SRO) who were present when
the
[[Page 19875]]
committee made such a determination. This requirement would not apply
to those SRO governing boards, disciplinary committees or oversight
committees which do not normally have public members.24
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\24\ See Commission Regulations 1.64 (b) and (c) which
respectively require governing boards and certain disciplinary
committees to include non-SRO member representatives.
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The Commission invites comment on its proposal to permit, in
certain circumstances, an SRO committee member, who otherwise would be
required to abstain from deliberations and voting on a matter because
of a conflict, to deliberate but not vote on the matter.
Notwithstanding the statute, should the possibility of allowing an
interested committee member to participate in deliberations be further
limited or even prohibited entirely? Would the proposed exception for
deliberations provide a person who could not vote on a matter with an
opportunity to unduly influence a committee's decision? Would the
proposed requirements strike a proper balance between ensuring that SRO
committees make well-informed decisions while minimizing the influence
of a committee member's potential bias or self-interest in the matter?
F. Proposed Regulation 1.69(c)--Disclosure Requirement
Under proposed Commission Regulation 1.69(c), whenever an SRO
committee considered a ``significant action which would not be
submitted to the Commission for its prior approval,'' as that term is
defined by proposed Regulation 1.69(a)(7), each member of the committee
would be required to disclose to the SRO's staff any position
information which was known or should have been known by the member
with respect to the positions listed in Regulation 1.69(b)(2) (i.e.,
positions held by the member, the member's family, the member's firm
and certain customers of the member's firm). Proposed Regulation
1.69(c) would make it a direct violation of the Regulation,
prosecutable by the Commission, for any committee member to fail to
report such information to the SRO's staff.
For the purposes of this provision, committee members would be
presumed to have knowledge of gross positions held in: (1) the member's
personal or controlled accounts (See proposed Regulation
1.69(b)(2)(i)); (2) accounts in which the member had a significant
financial interest (See proposed Regulation 1.69(b)(2)(ii)); (3)
proprietary accounts at the member's firm (See proposed Regulation
1.69(b)(2)(iii)); and, (4) the personal or controlled accounts of
persons in the member's immediate family (excepting family members who
were not dependents of the committee member and did not reside at the
member's residence) (See proposed Regulation 1.69(b)(2)(iv)). While it
would always be a question of fact as to what position information a
committee member knew at a particular point in time, the Commission
believes that a committee member usually should be aware of this type
of position information because it would be based on either his own
trading activity or the trading activity of parties with whom he would
have a close relationship. This presumption of knowledge would be
rebuttable, but the committee member involved would bear the burden of
providing evidence of his or her lack of knowledge.
The Commission believes that its proposed Regulation 1.69(c)
reporting requirement should help SRO staff and committees to better
determine whether committee members have conflicts which warrant
abstention from committee deliberations and voting. In addition, the
Commission believes that its enforcement powers under Regulation
1.69(c) should help ensure compliance with the conflicts restrictions.
Of course, each SRO would continue to have an independent
responsibility under Section 5a(8) of the CEA and Commission Regulation
1.51 to enforce any of its own rules implementing Regulation 1.69.
G. Proposed Regulation 1.69(d)--Violations of SRO Rules
Proposed Commission Regulation 1.69(d) would make it a violation
for an SRO to permit a committee member to participate in deliberations
or voting on a matter if such participation would violate any SRO rule
implementing the conflicts restrictions of Commission Regulations
1.69(b) (1) or (2). As with proposed Regulation 1.69(c), Regulation
1.69(d) would enable the Commission to enforce the conflicts
restriction requirements as implemented by SRO rules if necessary. The
Commission believes that this reservation of enforcement power would be
appropriate given Regulation 1.69's purpose of upholding the fairness
and integrity of the SRO decisionmaking process.
The Commission invites comment on the appropriate enforcement
mechanisms for implementing the FTPA's conflicts restrictions.
H. Proposed Regulation 1.69(e)--Liability to Other Parties
Under proposed Commission Regulation 1.69(e), SROs, SRO officials
and SRO staffs involved in reviewing committee member positions and
making abstention decisions, pursuant to Regulation 1.69(b)(3), would
be protected from liability to any party other than the Commission.
This limitation of liability is mandated by Section 217 of the FTPA.
I. Amendments to Current Commission Regulations Made Necessary by
Proposed New Commission Regulation 1.69
1. Proposed Regulation 1.3(tt)--Definition of Oversight Panel
As indicated in Section II. A. above, the Commission proposes to
establish a definition for oversight panels in the definitional section
of the Commission's regulations. The definition would be identical to
the definition of oversight panel in current Commission Regulation
1.63(a)(4). As part of its proposal, the Commission would delete
Regulation 1.63(a)(4) and make the new Regulation 1.3(tt)'s definition
of oversight panel applicable to both Regulation 1.63 and proposed
Regulation 1.69.
2. Proposed Regulation 1.41(f)--Voting on Temporary Emergency Rules
Section 213 of the FTPA amended Section 5a(a)(12)(B) of the CEA to
require that the Commission issue regulations establishing ``terms and
conditions'' under which contract markets may take temporary emergency
actions without prior Commission approval. Section 5a(a)(12)(B) and
Regulation 1.41(f), the Commission's implementing regulation, require
that any such temporary emergency action be adopted by a two-thirds
vote of a contract market's governing board. In recognition of the fact
that governing board members may be required to abstain from
deliberations and voting on such an action under contract market rules
implementing proposed Regulation 1.69,25 as part of its rulemaking
the Commission is proposing to amend Regulation 1.41(f) to provide that
such abstaining board members should not be included in determining
whether a temporary emergency action has been approved by two-thirds of
a governing board.
---------------------------------------------------------------------------
\25\ Contract market governing board members would be subject to
Regulation 1.69's conflict restrictions whenever they considered
such temporary emergency actions. See proposed Commission
Regulations 1.69(a)(7)(i) and 1.69(b)(2).
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[[Page 19876]]
J. Proposed Regulation 156.4--Disclosure of Broker Association
Membership
Section 102 of the FTPA amended Section 4j(d) of the CEA to
prohibit the knowing execution of a customer order by a floor broker
opposite any broker or trader with whom the floor broker has a
specified business relationship, unless the Commission has adopted
rules requiring exchange procedures and standards designed to prevent
violations of the CEA attributable to broker association trading. In
response to this provision, the Commission adopted Part 156 to its
regulations in order for contract markets to identify and enhance
surveillance of broker associations.26 Among other things, the
Commission's Part 156 Regulations require that contract markets
register broker associations at their respective exchanges and maintain
records listing ``the name of each person who is a member or otherwise
has a direct beneficial interest in [a] broker association.''
---------------------------------------------------------------------------
\26\ See 58 FR 31167 (June 1, 1993) for a full description of
the Commission's Part 156 rulemaking regarding broker associations.
---------------------------------------------------------------------------
As part of the current rulemaking, the Commission is proposing to
amend its Part 156 Regulations by adding a new Regulation 156.4 which
would require contract markets to post a listing of the broker
association membership information which they are currently required to
compile pursuant to Regulation 156.2(b). This posting should be made in
a place designed to ensure its availability to the general public such
as an exchange's lobby or other common access area. The Commission
believes that this requirement would serve the public interest by
enabling the public to take broker association relationships into
account when making trading decisions and assessing exchange actions
generally.
III. Conclusion
The Commission believes that the proposed new Regulation 1.69 and
the proposed amendments to Regulations 1.3, 1.41 and 1.63 meet the
statutory directive of Section 5a(a)(17) of the CEA as it was amended
by Section 217 of the FTPA. The proposal would establish guidelines and
factors to be considered in determining whether an SRO committee member
was subject to a conflict which could potentially impinge on his
ability to make fair and impartial decisions in a matter and, thus,
warrant abstention from participating in committee deliberations and
voting.
The Commission invites public comments on any aspect of this
proposed rulemaking, including whether it would fulfill the
implementation requirements of FTPA Section 217. The Commission also
invites comment on whether any other revisions should be made to ensure
greater fairness and impartiality in the decisionmaking processes of
SRO committees. For instance, would it be beneficial for the Commission
to amend current Commission Regulation 1.64 to provide a higher level
of representation for public, non-SRO members on SRO boards and
committees?
IV. Related Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq.
(1988), requires that agencies, in proposing rules, consider the impact
of those rules on small businesses. The Commission has previously
determined that contract markets are not ``small entities'' for
purposes of the RFA, and that the Commission, therefore, need not
consider the effect of proposed rules on contract markets. 47 FR 18618,
18619 (April 30, 1982). Furthermore, the Chairman of the Commission
previously has certified on behalf of the Commission that comparable
rule proposals affecting clearing organizations and registered futures
associations, if adopted, would not have had a significant economic
impact on a substantial number of small entities. 51 FR 44866, 44868
(December 12, 1986).
The proposed rulemaking would affect individuals who serve on SRO
governing boards, disciplinary committees and oversight panels. The
Commission does not believe that its proposed rulemaking would have a
significant economic impact on these SRO committee members. The
proposed rulemaking would require these committee members to disclose
to their SROs certain position information which is known or should be
known to them at the time that their committees consider certain
significant actions which would not be submitted to the Commission for
approval. The Commission believes that this requirement would not have
any significant economic impact on such members because the information
which they would be required to provide should be readily available to
them and because the significant actions which would give rise to this
requirement should occur on an infrequent basis.
Accordingly, the Acting Chairman, on behalf of the Commission,
hereby certifies, pursuant to Section 3(a) of the RFA, 5 U.S.C.
Sec. 605(b), that the proposed rulemaking, if adopted, would not have a
significant economic impact on a substantial number of small entities.
B. Agency Information Activities: Proposed Collection; Comment Request
The Paperwork Reduction Act of 1980 (``PRA''), 44 U.S.C. 3501 et
seq. (1988), imposes certain requirements on federal agencies
(including the Commission) in connection with their conducting or
sponsoring any collection of information as defined by the PRA. In
compliance with the PRA, the Commission has submitted the proposed
rulemaking and its associated information collection requirements to
the Office of Management and Budget (``OMB''). The burden associated
with the entire collection, including this proposed regulation and
amendments, is as follows:
Average burden hours per response--3,546.26
Number of respondents--15,286.00
Frequency of response--On Occasion
The burden associated with the proposed regulation and amendments
is as follows:
Average burden hours per response--2.00
Number of respondents--20
Frequency of response--On Occasion
Persons wishing to comment on the information that would be
required by the proposed rulemaking should contact Jeff Hsu, OMB, Room
3228, NEOB, Washington, D.C. 20503, (202) 395-7340. Copies of the
information collection submission to OMB are available from Joe F.
Mink, Clearance Officer, Commodity Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581.
Telephone: (202) 418-5170.
List of Subjects
17 CFR Part 1
Brokers, Commodity futures, Consumer protection, Reporting and
recordkeeping requirements.
17 CFR Part 156
Brokers, Commodity futures, Reporting and recordkeeping
requirements.
In consideration of the foregoing, and based on the authority
contained in the Commodity Exchange Act, the Commission is proposing to
amend Title 17, Chapter I of the Code of Federal Regulations as
follows:
[[Page 19877]]
PART 1--GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT
1. The authority citation for Part 1 continues to read as follows:
Authority: 7 USC 2, 2a, 4, 4a, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g,
6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 7, 7a, 8, 9, 12, 12a, 12c, 13a, 13a-
1, 16, 19, 21, 23, and 24, unless otherwise stated.
2. Section 1.3 would be proposed to be amended by adding paragraph
(tt) to read as follows:
Sec. 1.3 Definitions.
* * * * *
(tt) ``Oversight panel'' means any panel authorized by a self-
regulatory organization to review, recommend or establish policies or
procedures with respect to the self-regulatory organization's
surveillance, compliance, rule enforcement or disciplinary
responsibilities.
3. Section 1.41 would be proposed to be amended by adding paragraph
(f)(10) to read as follows:
Sec. 1.41 Contract market rules; submission of rules to the
Commission; exemption of certain rules.
* * * * *
(f) * * *
(10) Governing board members who abstain from voting on a temporary
emergency rule pursuant to Sec. 1.69, shall not be counted in
determining whether such a rule was approved by the two-thirds vote
required by this regulation.
4. Section 1.63(a)(2) would be proposed to be revised to read as
follows:
Sec. 1.63 Service on self-regulatory organization governing boards or
committees by persons with disciplinary histories.
(a) * * *
(2) ``Disciplinary committee'' means a committee of persons which
is authorized by a self-regulatory organization to conduct disciplinary
proceedings, to settle disciplinary charges, to impose sanctions, or to
hear appeals thereof.
* * * * *
5. Section 1.63(a)(4) would be proposed to be removed.
6. Section 1.63(a)(5) would be proposed to be redesignated as
Sec. 1.63(a)(4).
7. Section 1.63(a)(6) would be proposed to be redesignated as
Sec. 1.63(a)(5).
8. In redesignated Sec. 1.63(a)(5)(ii), the reference to
``subparagraphs (a)(6)(i) (A) through (C)'' would be proposed to be
amended to read ``paragraphs (a)(5)(i) (A) through (C)''.
9. In redesignated Sec. 1.63(a)(5)(iv), the reference to
``paragraphs (a)(6)(i) through (iii)'' would be proposed to be amended
to read ``paragraphs (a)(5)(i) through (iii)''.
10. Section 1.63(a)(7) would be proposed to be redesignated as
Sec. 1.63(a)(6).
11. In Section 1.63(d), the reference to ``paragraph (a)(6)(i)''
would be proposed to be amended to read ``paragraph (a)(5)(i)''.
12. Section 1.69 would be proposed to be added to read as follows:
Sec. 1.69 Voting by interested members of self-regulatory organization
governing boards and various committees.
(a) Definitions. For purposes of this section:
(1) ``Disciplinary committee'' means a committee of persons which
is authorized by a self-regulatory organization to conduct disciplinary
proceedings, to settle disciplinary charges, to impose sanctions, or to
hear appeals thereof.
(2) ``Governing board'' means a self-regulatory organization's
board of directors, board of governors, board of managers, or similar
body, or any subcommittee thereof, duly authorized, pursuant to a rule
of the self-regulatory organization that has been approved by the
Commission or has become effective pursuant to either Section 5a(a)
(12)(A) or 17(j) of the Act, to take action for and on behalf of the
self-regulatory organization with respect to a matter covered by this
section.
(3) A person's ``immediate family'' means the person's spouse,
parent, stepparent, child, stepchild, sibling, stepbrother, stepsister,
or in-law.
(4) ``Member's affiliated firm'' is a firm in which the member is a
``principal,'' as defined in Sec. 3.1(a), or an employee.
(5) ``Named party in interest'' means a party who is identified as
the subject of any matter being considered by a governing board,
disciplinary committee or oversight panel.
(6) ``Self-regulatory organization'' means a ``self-regulatory
organization'' as defined in Sec. 1.3(ee) and includes a ``clearing
organization'' as defined in Sec. 1.3(d).
(7) ``Significant action which would not be submitted to the
Commission for its prior approval'' includes, at a minimum, any of the
following types of self-regulatory organization actions or rule changes
which can be implemented without the Commission's prior approval:
(i) Any actions or rule changes which address an ``emergency'' as
defined in Sec. 1.41(a)(4); and,
(ii) Any changes in margin levels that are designed to respond to
extraordinary market conditions when such conditions are likely to have
a substantial effect on prices in any contract traded or cleared at
such self-regulatory organization.
(b) Self-Regulatory Organization Rules. Each self-regulatory
organization shall maintain in effect rules which have been submitted
to the Commission pursuant to Section 5a(a)(12)(A) of the Act and
Sec. 1.41 or, in the case of a registered futures association, pursuant
to Section 17(j) of the Act, which require, at a minimum, that:
(1) Relationship With Named Party in Interest. A member of a self-
regulatory organization's governing board, disciplinary committee or
oversight panel shall abstain from such body's deliberations and voting
on any matter where such member:
(i) Is the named party in interest;
(ii) Is an employer, employee or fellow employee of the named party
in interest;
(iii) Is associated with the named party in interest through a
``broker association'' as defined in Sec. 156.1;
(iv) Has any other significant, ongoing business relationship with
the named party in interest, including clearing relationships, but not
including relationships limited to executing futures or option contract
transactions with each other; or,
(v) Is in the immediate family of the named party in interest.
(2) Financial Interest in an Action. A member of a self-regulatory
organization's governing board, disciplinary committee or oversight
panel shall abstain from such body's deliberations and voting on any
significant action which would not be submitted to the Commission for
its prior approval if the member knowingly has a direct and substantial
financial interest in the result of the vote. In determining whether a
member has a direct and substantial financial interest in the result of
such a vote, among other things, a self-regulatory organization's rules
must consider with respect to any contract or product which the self-
regulatory organization reasonably expects could be affected by the
action:
(i) Gross positions held in the member's personal accounts or
``controlled accounts,'' as defined in Sec. 1.3(j);
(ii) Gross positions held in accounts in which the member has a
significant financial interest;
(iii) Gross positions held in proprietary accounts, as defined in
Sec. 1.17(b)(3), at the member's affiliated firm;
[[Page 19878]]
(iv) Gross positions held in the personal accounts or ``controlled
accounts,'' as defined in Sec. 1.3(j), of any person in the member's
immediate family, unless such person is not a dependent of the member
and does not reside at the member's residence;
(v) Net positions held in ``customer'' accounts, as defined in
Sec. 1.17(b)(2), at the member's affiliated firm; and,
(vi) Gross position of any customer who constitutes a significant
portion of business for the member or the member's affiliated firm.
(3) Abstention Decision.
(i) Prior to the start of any self-regulatory organization's
governing board, disciplinary committee or oversight panel
deliberations or voting on a matter, appropriate self-regulatory
organization staff shall:
(A) review the positions described in paragraph (b)(2) of this
section for each member of such body based upon:
(1) The most recent large trader reports and clearing records
available to the staff;
(2) Position information provided by the member to the staff
pursuant to Paragraph (c) of this section; and,
(3) Any other source of position information which is readily
available to the staff;
(B) Determine whether any such member is subject to any of the
conditions listed in paragraphs (b)(1) or (2) of this section; and,
(C) Direct any such member to abstain from deliberations and voting
on the matter.
(ii) Whenever the staff of a self-regulatory organization makes an
abstention determination pursuant to paragraph (b)(3)(i) of this
section, the appropriate governing board, disciplinary committee or
oversight panel shall include in the minutes or records of its
subsequent meeting the following information regarding any such
determination:
(A) The names of all members who attended the meeting in person or
who otherwise were present by electronic means;
(B) The name of any member who voluntarily recused himself from
deliberations and/or voting on a matter and the reason for the recusal,
if stated;
(C) The names of the individuals reviewing the positions described
in paragraph (b)(2) of this section;
(D) A list referencing the position information which was reviewed
for each member;
(E) The name of any member who was directed to abstain from any
deliberations and voting on a matter and the reason for the abstention;
(F) A description of the procedures followed in making any
determination on abstentions from deliberations and voting; and,
(G) In those instances when a committee member is permitted to
deliberate but not vote on a matter pursuant to this paragraph (b)(4)
of this section, a full description of the views expressed by such
member during deliberations.
(4) Participation in Deliberations.
(i) A self-regulatory organization governing board, disciplinary
committee or oversight panel may permit a member to participate in
deliberations prior to a vote on a matter for which he otherwise would
be required to abstain under the self-regulatory organization's rules
implementing the requirements of paragraph (b)(2) of this section. In
making such a determination, the presiding body should consider the
following factors:
(A) Whether the member has expertise, knowledge or experience in
the matter under consideration which few or no other members of the
presiding body have;
(B) Whether the ability of the presiding body to deliberate
meaningfully would be adversely affected by the non-participation of
the member; and,
(C) Whether the member's participation in deliberations is
necessary for the presiding body to achieve a quorum in the matter.
(ii) Any determination to so allow a member to participate in
deliberations on a matter shall be approved by each of those members of
the presiding body who are present and who are non-members of the self-
regulatory organization.
(c) Disclosure Requirement. Each member of a self-regulatory
organization governing board, disciplinary committee or oversight panel
which is to consider a matter referred to in paragraph (b)(2) of this
section shall disclose to the appropriate self-regulatory organization
staff prior to such consideration the position information referred to
in paragraph (b)(2) of this section which is known or should be known
to the member at that time. For these purposes, members shall be
presumed to have knowledge of those positions referred to in paragraphs
(b)(2) (i) through (iv) of this section.
(d) Violations of Self-Regulation Organization Rules. No self-
regulatory organization may permit a person to engage in deliberations
or voting on a matter if it would violate any rule adopted by the self-
regulatory organization in compliance with paragraphs (b) (1) or (2) of
this section.
(e)Liability to Other Parties. No self-regulatory organization or
self-regulatory organization official, employee or member, other than
the member whose position or positions are being reviewed, or delegee
or agent thereof, shall be subject to liability under this section,
except for liability in an action initiated by the Commission, in
connection with the review required by paragraph (b)(3) and any action
taken or required to be taken thereunder.
PART 156--BROKER ASSOCIATIONS
1. The authority citation for Part 156 continues to read as
follows:
Authority: 7 U.S.C. 6b, 6c, 6j(d), 7a(b) and 12a.
2. Section 156.4 would be proposed to be added to read as follows:
Sec. 156.4 Disclosure of Broker Association Membership
Each contract market shall post in a location accessible to the
public a list of all registered broker associations which identifies
for each such association the name of each person who is a member or
otherwise has a direct beneficial interest in the association. This
list shall be updated at least semi-annually.
Issued in Washington, D.C. on April 29, 1996, by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 96-10936 Filed 5-2-96; 8:45 am]
BILLING CODE 6351-01-P
Complete official Federal Register PDF
FR Doc. 96-10757 Acquisition Regulation; Regulatory Reinvention
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19891-19902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10757]
=======================================================================
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DEPARTMENT OF ENERGY
48 CFR Parts 901, 905, 906, 908, 915, 916, 917, 922, 928, 932, 933,
935, 936, 942, 945, 952 and 971
RIN 1991-AB25
Acquisition Regulation; Regulatory Reinvention
AGENCY: Department of Energy.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department of Energy (DOE) proposes to amend the
Department of Energy Acquisition Regulation (DEAR) in its continuing
effort to streamline and simplify the acquisition process and to meet
the objectives of several Executive Orders (EO), including: EO 12861,
Elimination of One-Half of Executive Branch Internal Regulations; EO
12931, Federal Procurement Reform; and EO 12866, Regulatory Planning
and Review. This proposed rule revises certain regulatory material and
deletes other material that has been determined to be nonregulatory and
unnecessary. Specific material to be revised or deleted from the DEAR
is summarized in the ``Section-by-Section Analysis'' appearing later in
this document.
DATES: Written comments should be forwarded no later than July 2, 1996.
ADDRESSES: Send written comments to the attention of Kevin M. Smith,
Office of Policy (HR-51), Office of Procurement and Assistance
Management, Department of Energy, 1000 Independence Avenue, SW.,
Washington, D.C. 20585.
FOR FURTHER INFORMATION CONTACT: Kevin M. Smith, (202) 586-8189.
SUPPLEMENTARY INFORMATION:
I. Background
II. Section-by-Section Analysis
III. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under Executive Order 12778
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
E. Review Under Executive Order 12612
F. Review Under the National Environmental Policy Act
G. Public Hearing Determination
I. Background
Executive Order (EO) 12861, dated September 11, 1993, Elimination
of One-Half of Executive Branch Internal Regulations, was issued by the
President to streamline Government operations, improve productivity,
and improve customer service. EO 12931, dated October 13, 1994, Federal
Procurement Reform, calls for significant changes to make the
Government procurement process more effective and efficient. EO 12866,
dated September 30, 1993, Regulatory Planning and Review, requires
agencies to review regulations to improve effectiveness and to reduce
regulatory burden. This proposed rule represents DOE's third action to
eliminate existing regulatory material that is unnecessary. In
promulgating this rule, the Department will further the objectives of
the EOs by reducing the volume of the DEAR; streamlining operations;
reducing constraints, prescriptive requirements, and administrative
processes; making requirements outcome oriented vs. process oriented;
and, defining roles and assigning responsibilities at the lowest
appropriate level within the procurement organization. This proposed
rule makes three types of changes to the DEAR. Certain regulatory
coverage is being revised and condensed
[[Page 19892]]
to simplify and streamline the acquisition process; substantive policy
changes have not been made in these areas. In addition, to implement
certain requirements of the Federal Acquisition Streamlining Act of
1994, Pub. L. 103-355, regarding the availability of protest files and
agency protest reviews, two new solicitation provisions are being
added. Consistent with the requirements of E.O. 12979, dated October
25, 1995, Agency Procurement Protests, language also is being added to
encourage the use of alternative dispute resolution procedures in
appropriate circumstances. Finally, other material that has been
determined to be nonregulatory in nature is being removed from the
DEAR, including informational material and internal guidance and
procedures.
II. Section-by-Section Analysis
1. Part 901 is revised to simplify the language, remove
informational material, and remove internal procedures addressing
deviations to the regulation, ratification of unauthorized commitments,
and selection of contracting officers and their representatives.
2. Subpart 905.4, addressing the internal DOE process for release
of contract information, is removed.
3. Section 906.302, citing the Atomic Energy Act authority for
circumstances permitting other than full and open competition, is
removed.
4. Section 906.303, addressing the internal procedures for
processing noncompetitive justifications, is removed.
5. Part 908, addressing required sources of supplies and services,
is revised to simplify the language, remove informational material,
remove internal procedures, and to move subpart 908.3, addressing the
acquisition of utility services, to the new Part 941.
6. Subpart 915.5, addressing unsolicited proposals, is revised to
simplify the language, remove informational material, and remove
internal procedures.
7. Subpart 915.6, addressing internal source selection procedures,
is removed.
8. Subsection 915.970-8, addressing weighted guidelines application
considerations, is revised to remove informational material and
internal guidance.
9. Section 916.405, containing recommended language for award fee
contract clauses, is removed.
10. Subpart 917.70, addressing cost participation, is revised to
simplify the language, remove informational material, and remove
internal procedures.
11. Subpart 917.72, addressing Program Opportunity Notices for
commercial demonstrations, is revised to simplify the language, remove
informational material, and remove internal procedures.
12. Subpart 917.73, addressing Program Research and Development
Announcements, is revised to simplify the language, remove
informational material, and remove internal procedures.
13. Subpart 917.74, addressing the acquisition, use and disposal of
real estate, is revised to simplify the language, remove informational
material, and remove internal procedures.
14. Subpart 917.75, providing guidance for the use of multiple
awards-phased acquisitions, is removed.
15. Section 922.805, providing guidance to the contracting officer
for obtaining affirmative action program posters, is removed.
16. Subpart 922.70, providing guidance regarding construction
laborers and mechanics, is removed.
17. Subpart 928.1, addressing the use of bonds, is revised to
simplify the language, remove informational material, and remove
internal procedures.
18. Section 932.102, providing information on contract financing,
is revised to simplify the language, remove informational material, and
remove internal procedures.
19. Subpart 932.7, providing information on contract financing, is
removed.
20. Section 932.802, providing information on the use of partial
assignments, is removed.
21. Section 932.805, providing internal procedures for the
information to be furnished to assignees, is removed.
22. Subpart 932.9, addressing prompt payments, is revised to
simplify the language, remove informational material, and remove
internal procedures.
23. Section 932.7000, providing introductory information on loan
guarantees, is removed.
24. Section 932.7001, providing definitions, is removed.
25. Subpart 933.1, addressing protests, is revised to simplify the
language, remove informational material, remove internal procedures,
add two new solicitation provisions that address protest file
availability and agency protest review, and add alternative dispute
resolution procedures.
26. Section 935.016, addressing research opportunity announcements,
is revised to simplify the language, remove informational material, and
remove internal procedures.
27. Sections 936.601, 936.602-2, 936.602-3, and 936.602-4,
providing internal procedures for contracting for architect-engineer
services, are removed.
28. Sections 936.603, 936.605, and 936.606, providing internal
procedures for contracting for architect-engineer services, are
removed.
29. Subpart 936.72, providing internal information and guidance for
the acquisition of special equipment, is removed.
30. Part 941, addressing the acquisition of utility services, is
added to include the coverage, as revised, that was previously
contained in Part 908.
31. Subsection 942.705-1, addressing final indirect cost rate
determinations, is revised to simplify the language.
32. Subsection 942.705-3, addressing negotiated rates for
educational institutions, is revised to simplify the language.
33. Subsection 942.705-4, addressing negotiated rates for state and
local governments, is revised to simplify the language.
34. Subsection 942.705-5, addressing negotiated rates for nonprofit
organizations other than educational and state and local governments,
is revised to simplify the language.
35-36. Subpart 942.70, providing internal guidance and procedures
for obtaining audit support services, is removed.
37. Subsection 945.505-5, providing internal guidance for making
records of plant equipment, is removed.
38. Subsection 945.505-14, providing information for the completion
of Government property reports, is removed.
39. Section 952.214, addressing clauses related to sealed bidding,
is removed as there is no material under that section title.
40. Section 952.215, addressing clauses related to contracting by
negotiation, is removed as the prescriptions for those clauses were
removed in an earlier final rule.
41. Subsection 952.233-2 is revised to change the DOE office that
receives copies of protests.
42. Subsection 952.233-4 is added to include a new solicitation
provision regarding the availability of protest files.
43. Subsection 952.233-5 is added to include a new solicitation
provision regarding agency protest reviews.
44. Subsection 952.251-70 is amended to correct the date of the
contract clause Contractor Employee Travel Discounts.
45. Part 971, providing internal procedures for the review and
approval of contract actions, is removed.
[[Page 19893]]
III. Procedural Requirements
A. Review Under Executive Order 12866
This regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).
Accordingly, this action was not subject to review, under that
Executive Order, by the Office of Information and Regulatory Affairs of
the Office of Management and Budget (OMB).
B. Review Under Executive Order 12778
Section 2 of Executive Order 12778 instructs each agency to adhere
to certain requirements in promulgating new regulations and reviewing
existing regulations. These requirements, set forth in sections 2(a)
and (b)(2), include eliminating drafting errors and needless ambiguity,
drafting the regulations to minimize litigation, providing clear and
certain legal standards for affected legal conduct, and promoting
simplification and burden reduction. Agencies are also instructed to
make every reasonable effort to ensure that the regulation specifies
clearly any preemptive effect, effect on existing Federal law or
regulation, and retroactive effect; describes any administrative
proceedings to be available prior to judicial review and any provisions
for the exhaustion of such administrative proceedings; and defines key
terms. DOE certifies that this proposed rule meets the requirements of
sections 2(a) and (b) of Executive Order 12778.
C. Review Under the Regulatory Flexibility Act
This proposed rule was reviewed under the Regulatory Flexibility
Act of 1980, Pub. L. 96-354, which requires preparation of a regulatory
flexibility analysis for any rule that is likely to have a significant
economic impact on a substantial number of small entities. This
proposed rule will have no impact on interest rates, tax policies or
liabilities, the cost of goods or services, or other direct economic
factors. It will also not have any indirect economic consequences such
as changed construction rates. DOE certifies that this proposed rule
will not have a significant economic impact on a substantial number of
small entities and, therefore, no regulatory flexibility analysis has
been prepared.
D. Review Under the Paperwork Reduction Act
No new information collection or recordkeeping requirements are
imposed by this proposed rule. Accordingly, no OMB clearance is
required under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et
seq.).
E. Review Under Executive Order 12612
Executive Order 12612, entitled ``Federalism,'' 52 FR 41685
(October 30, 1987), requires that regulations, rules, legislation, and
any other policy actions be reviewed for any substantial direct effects
on States, on the relationship between the Federal Government and the
States, or in the distribution of power and responsibilities among
various levels of government. If there are sufficient substantial
direct effects, then the Executive Order requires preparation of a
federalism assessment to be used in all decisions involved in
promulgating and implementing a policy action. DOE has determined that
this proposed rule will not have a substantial direct effect on the
institutional interests or traditional functions of States.
F. Review Under the National Environmental Policy Act
Pursuant to the Council on Environmental Quality Regulations (40
CFR 1500-1508), the Department has established guidelines for its
compliance with the provisions of the National Environmental Policy Act
(NEPA) of 1969 (42 U.S.C. 4321, et seq.). Pursuant to Appendix A of
Subpart D of 10 CFR 1021, National Environmental Policy Act
Implementing Procedures (Categorical Exclusion A6), DOE has determined
that this proposed rule is categorically excluded from the need to
prepare an environmental impact statement or environmental assessment.
G. Public Hearing Determination
DOE has concluded that this proposed rule does not involve any
significant issues of law or fact. Therefore, consistent with 5 U.S.C.
553, DOE has not scheduled a public hearing.
List of Subjects in 48 CFR Parts 901, 905, 906, 908, 915, 916, 917,
922, 928, 932, 933, 935, 936, 942, 945, 952, and 971
Government procurement.
Issued in Washington, D.C., on April 24, 1996.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is proposed to be amended as set forth
below:
1. The authority citation for Parts 901, 905, 906, 908, 915, 916,
917, 922, 928, 932, 933, 935, 936, 942, 945, 952, and 971 continues to
read as follows:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
2. Part 901 is revised to read as follows:
PART 901--FEDERAL ACQUISITION REGULATIONS SYSTEM
Subpart 901.1--Purpose, Authority, Issuance
Sec.
901.101 Purpose.
901.102 Authority.
901.103 Applicability.
901.104 Issuance.
901.104-1 Publication and code arrangement.
901.104-2 Arrangement of regulations.
901.104-3 Copies.
901.105 OMB control numbers.
Subpart 901.3--Agency Acquisition Regulations
901.301-70 Other issuances related to acquisition.
Subpart 901.6--Contracting Authority and Responsibilities
901.601 General.
901.602-3 Ratification of unauthorized commitments.
Subpart 901.1--Purpose, Authority, Issuance
901.101 Purpose.
The Department of Energy Acquisition Regulation (DEAR) establishes
uniform acquisition policies which implement and supplement the Federal
Acquisition Regulation (FAR).
901.102 Authority.
The DEAR and amendments thereto are issued by the Procurement
Executive pursuant to a delegation from the Secretary in accordance
with the authority of section 644 of the Department of Energy
Organization Act (42 U.S.C. 7254), section 205(c) of the Federal
Property and Administrative Services Act of 1949, as amended, (40
U.S.C. 486(c)), and other applicable law.
901.103 Applicability.
The FAR and DEAR apply to all DOE acquisitions of supplies and
services which obligate appropriated funds unless otherwise specified
in this chapter.
901.104 Issuance.
901.104-1 Publication and code arrangement.
(a) The DEAR and its subsequent changes are published in the
Federal Register, cumulative form in the Code of Federal Regulations,
and a separate loose-leaf edition.
(b) The DEAR is issued as Chapter 9 of Title 48 of the Code of
Federal Regulations.
[[Page 19894]]
901.104-2 Arrangement of regulations.
(a) General. The DEAR is divided into the same parts, subparts,
sections, subsections and paragraphs as is the FAR.
(b) Numbering. The numbering illustrations at (FAR) 48 CFR 1.104-
2(b) apply to the DEAR, but the DEAR numbering will be preceded with a
9 or a 90. Material which supplements the FAR will be assigned the
numbers 70 and up.
901.104-3 Copies.
Copies of the DEAR published in the Federal Register or Code of
Federal Regulations may be purchased from the Superintendent of
Documents, Government Printing Office, Washington, DC 20402.
901.105 OMB control numbers.
The Paperwork Reduction Act of 1980, Public Law 98-511, and the
Office of Management and Budget's implementing regulations at 5 CFR
Part 1320, require that reporting and record keeping requirements
affecting 10 or more members of the public be cleared by that Office.
The OMB control number for the collection of information under 48 CFR
Chapter 9 is 1910-4100.
Subpart 901.3--Agency Acquisition Regulations
901.301-70 Other issuances related to acquisition.
In addition to the FAR and DEAR, there are other issuances which
deal with acquisition. Among these are the Federal Property Management
Regulations, the DOE Property Management Regulations, and DOE
Directives.
Subpart 901.6--Contracting Authority and Responsibilities
901.601 General.
Contracting authority vests in the Secretary of Energy. The
Secretary has delegated this authority to the Procurement Executive.
The Procurement Executive has redelegated this authority to the Heads
of Contracting Activities (HCA). These delegations are formal written
delegations containing dollar limitations and conditions. Each HCA in
turn makes formal contracting officer appointments within the
contracting activity. 901.602-3 Ratification of unauthorized
commitments.
(b) (2) The Procurement Executive is authorized to ratify an
unauthorized commitment.
(3) The ratification authority of the Procurement Executive in
paragraph (b)(2) of this section is delegated to the Head of the
Contracting Activity (HCA) for individual unauthorized commitments of
$25,000 or under. The ratification authority of the HCA is
nondelegable.
PART 905--PUBLICIZING CONTRACT ACTIONS
905.4 [Removed]
3. Subpart 905.4 is removed.
PART 906--COMPETITION REQUIREMENTS
906.302 [Removed]
4. Section 906.302, including 906.302-70, is removed.
906.303 [Removed]
5. Section 906.303, including 906.303-1, is removed.
6. Part 908 is revised to read as follows:
PART 908--REQUIRED SOURCES OF SUPPLIES AND SERVICES
Subpart 908.8--Acquisition of Printing and Related Supplies
Sec.
908.802 Policy.
Subpart 908.11--Leasing of Motor Vehicles
908.1102 Presolicitation requirements.
908.1104 Contract clauses.
908.1170 Leasing of fuel-efficient vehicles.
Subpart 908.71--Acquisition of Special Items
908.7100 Scope of subpart.
908.7101 Motor vehicles.
908.7101-1 Consolidated acquisition of new vehicles by General
Services Administration.
908.7101-3 Direct acquisition.
908.7101-4 Replacement of motor vehicles.
908.7101-5 Used vehicles.
908.7101-6 Acquisition of fuel-efficient vehicles.
908.7101-7 Government license tags.
908.7102 Aircraft.
908.7103 Office machines.
908.7104 Office furniture and furnishings.
908.7105 Filing cabinets.
908.7106 Security cabinets.
908.7107 Alcohol.
908.7108 Helium.
908.7109 Fuels and packaged petroleum products.
908.7111 Arms and ammunition.
908.7112 Materials handling equipment replacement standards.
908.7114 Wiretapping and eavesdropping equipment.
908.7115 Forms.
908.7116 Electronic data processing tape.
908.7117 Tabulating machine cards.
Subpart 908.8--Acquisition of Printing and Related Supplies
908.802 Policy.
(b) Inclusion of printing requirements (limited exceptions are set
forth in paragraphs 35-2 through 35-4 of the Government Printing and
Binding Regulations) in contracts for supplies and services is
prohibited unless specifically approved by the Director, Office of
Administrative Services, Headquarters. Contracting officers shall
insert the clause at 48 CFR 952.208-70.
Subpart 908.11--Leasing of Motor Vehicles
908.1102 Presolicitation requirements.
(a)(4) Commercial vehicle lease sources may be used only when the
General Services Administration (GSA) has advised that it cannot
furnish the vehicle(s) through the Interagency Motor Pool System and it
has been determined that the vehicle(s) are not available through the
GSA Consolidated Leasing Program.
908.1104 Contract clauses.
(e) The clause at 48 CFR 952.208-7, Tagging of Leased Vehicles,
shall be inserted whenever a vehicle(s) is to be leased over 60 days,
except for those vehicles exempted by (FPMR) 41 CFR 101-38.6.
908.1170 Leasing of fuel-efficient vehicles.
(a) All sedans and station wagons and certain types of light
trucks, as specified by GSA, that are acquired by lease for 60
continuous days or more for official use by DOE or its authorized
contractors, are subject to the requirements of the Energy Policy and
Conservation Act of 1975 (EPCA), Public Law 94-163 and of Executive
Order 12003 and subsequent implementing regulations.
(b) Leased vehicles will meet the miles-per-gallon criteria of, and
be incorporated in, the approved plan of the fiscal year in which
leases are initiated, reviewed, extended, or increased in scope.
Vehicle leases will specify the vehicle model type to be provided.
Subpart 908.71--Acquisition of Special Items
908.7100 Scope of subpart.
This subpart sets forth requirements and procedures for the
acquisition of special items by DOE and contractors authorized to use
special sources of supply to the extent indicated herein.
908.7101 Motor vehicles.
908.7101-1 Consolidated acquisition of new vehicles by General
Services Administration.
(a) New vehicles shall be procured in accordance with (FPMR) 41 CFR
101 25.304, 101-26.501, and 101-38.13, and
[[Page 19895]]
(DOE-PMR) 41 CFR 109-25.304, 109-38.13, and 109-38.51.
908.7101-3 Direct acquisition.
Vehicles may be acquired by DOE activities directly rather than
through GSA when a waiver has been granted by GSA. A copy of the
activity's request to GSA for a waiver shall be forwarded to the
Director, Office of Property Management, within the Headquarters
procurement organization. In those cases involving general purpose
vehicles where GSA refuses to grant a waiver and where it is believed
that acquisition through GSA would adversely affect or otherwise impair
the program, authority for direct acquisition shall be obtained from
the above-mentioned Headquarters official, prior to acquisition. In the
acquisition of special purpose vehicles for use by DOE and its
authorized contractors, the Head of the Contracting Activity may
authorize direct purchases. The purchase price for sedans and station
wagons, shall not exceed any statutory limitation in effect at the time
the acquisition is made. (See (DOE-PMR) 41 CFR 109-38.5102-4).
908.7101-4 Replacement of motor vehicles.
(a) The replacement of motor vehicles shall be in accordance with
the replacement standards prescribed in (FPMR) 41 CFR 101-38.9 and
(DOE-PMR) 41 CFR 109-38.9.
(b) The Heads of Contracting Activities may arrange to sell, as
exchange sales, used motor vehicles being replaced and to apply the
proceeds to the purchase of similar new vehicles. However, in the event
personnel are not available to make such sales, or it is in the best
interest of the DOE office, GSA may be requested to sell the used
vehicles.
908.7101-5 Used vehicles.
Heads of Contracting Activities may authorize the purchase of used
vehicles where justified by special circumstances; e.g., when new
vehicles are in short supply, the vehicles are to be used for
experimental or test purposes, or the vehicles are acquired from
exchange sale. In accordance with (DOE-PMR) 41 CFR 109-38.5102, the
statutory passenger vehicle allocation requirements for DOE shall apply
to any purchase of used vehicles except in the case of vehicles to be
used exclusively for experimental or test purposes.
908.7101-6 (Acquisition of fuel-efficient vehicles.
(a) All purchases of sedans and station wagons, and certain types
of light trucks as specified by GSA, are subject to the requirements of
the Energy Policy and Conservation Act of 1975 (EPCA), Public Law 94-
163, and of Executive Orders 12003 and 12375 and subsequent
implementing regulations.
(b) Sedans, station wagons, and light trucks requisitioned
according to an approved forecast, but not contracted for by GSA until
the subsequent fiscal year, will be included in the acquisition plan
for the miles-per-gallon criteria of the year in which GSA signs the
purchase contract along with the new vehicles planned for acquisition
that year.
908.7101-7 Government license tags.
(a) Government license tags shall be procured and assignments
recorded by DOE offices in accordance with (FPMR) 41 CFR 101-38.303.
Special license tags for security purposes shall be purchased in
accordance with State and local laws, regulations, and procedures. See
(DOE-PMR) 41 CFR 109-38.3 and 109-38.6 for additional guidance.
908.7102 Aircraft.
Acquisition of aircraft shall be in accordance with (DOE-PMR) 41
CFR 109-38.5205.
908.7103 Office machines.
Acquisitions of office machines by DOE offices and its authorized
contractors shall be in accordance with (FPMR) 41 CFR 101-25.104, 101-
25.302, 101-25.302-3, 101-25.302-4, and 101-25.302-6, and 101-25.403,
and (DOE-PMR) 41 CFR 109-25.302, 109-25.302-3, and 109-25.4.
908.7104 Office furniture and furnishings.
Acquisitions of office furniture and furnishings by DOE offices
shall be in accordance with (FPMR) 41 CFR 101-25.104, 101-25.302, 101-
25.302-1, 101-25.302-5, 101-25.302-7, and 101-25.302-8, 101-25.404 and
101-26.505, and (DOE-PMR) 41 CFR 109-25.302, 109-25.302-1, and 109-
25.350.
908.7105 Filing cabinets.
Acquisitions of filing cabinets shall be in accordance with (FPMR)
41 CFR 101-26.308 and 101-25.302-2 and (DOE-PMR) 41 CFR 109-25.302-2.
908.7106 Security cabinets.
(a) Acquisitions of security cabinets shall be in accordance with
(FPMR) 41 CFR 101-26.507 and the ``prerequisites to ordering'' criteria
contained in (FPMR) 41 CFR 101-25.302-2 and (DOE-PMR) 41 CFR 109-
25.302-2.
(b) Fixed-price prime contractors and lower tier subcontractors may
use GSA acquisition sources for security cabinets in accordance with
(FPMR) 41 CFR 101-26.407 and FAR 51.
908.7107 Alcohol.
(a) To the fullest extent practicable, alcohol for use by DOE or
its cost-type contractors shall be procured on a tax-free basis.
(b) ATF regulations relating to the acquisition and use of alcohol
free of tax, by Government agencies, are set forth in 26 CFR 213.141
through 213.146.
(c) ATF Form 1444/1486, ``Tax Free Spirits or Specially Denatured
Spirits for Use of United States,'' shall be used for acquisitions of
specially denatured alcohol and ethyl alcohol. Section I of the form is
the application for permission to acquire and Section II is the permit.
If acquisition from more than one warehouse is desirable, separate
applications must be made for withdrawal from each warehouse. When
permits are no longer required, they should be forwarded to the Bureau
of Alcohol, Tobacco and Firearms for cancellation. Alcohol procured by
use of the ATF form referred to in this section shall be used
exclusively on DOE work.
(d) The Procurement Executive has been authorized to sign and
delegate to others authority to sign applications under Bureau of
Alcohol, Tobacco and Firearms regulations relating to the acquisition
and use of alcohol free of tax. Specific DOE personnel have been
delegated authority to execute Part I of Form 1444/1486 by letters to
the Director, Bureau of Alcohol, Tobacco and Firearms without power of
redelegation. Only the individuals so authorized shall execute Section
I of these forms.
(e) Applications on the ATF Form 1444/1486 shall be executed in
duplicate by an authorized DOE official and mailed directly to the
address on the application. Only one permit will be provided to each
field organization. Due to the numerous locations managed by field
operations offices, the exact shipping address need not be shown in
block 3 of the form. Shipments, however, must be addressed to the
``Department of Energy at various locations within the United States.''
The ATF will assign the application a permit number and return it to
the requestor. Distribution of certified copies shall be controlled and
each holder of a certified copy recorded.
(f) A signed copy of the permit shall accompany the original
purchase order issued to the plant or warehouse, where it shall be
retained or returned with the shipment. Subsequent orders shall refer
to the permit on file in the plant or warehouse if it was retained.
(g) When alcohol is shipped, the shipper prepares the required form
as specified by Bureau of Alcohol, Tobacco
[[Page 19896]]
and Firearms regulations and forwards them to the consignee. Upon
receipt of the receiving report covering the shipment, the officer who
signed the purchase order shall execute the certificate of receipt and
forward it to the appropriate Regional Director, Bureau of Alcohol,
Tobacco and Firearms. The carrier transporting the alcohol shall also
be given a receipt as specified by Bureau of Alcohol, Tobacco and
Firearms regulations.
(h) Abandoned and forfeited alcohol which has come into the custody
or control of a Federal agency may be obtained by following the
procedure set forth in (FPMR) 41 CFR 101-48.1.
908.7108 Helium.
(a) Acquisitions of helium by DOE and its authorized contractors
shall be in accordance with this section.
(b) The Helium Act (Public Law 86-777, as amended (50 U.S.C.
167(d)) provides that, to the extent that supplies are readily
available, whether in gaseous or liquid form, DOE shall purchase all
major requirements of helium from the Secretary of Interior, Bureau of
Mines, or from the Bureau of Mines distribution contractors eligible to
sell Bureau of Mines helium to Federal agencies and their users in
accordance with 30 CFR part 602.
908.7109 Fuels and packaged petroleum products.
Acquisitions of fuel and packaged petroleum products by DOE offices
shall be in accordance with (FPMR) 41 CFR 101-26.602. When contractors
are authorized, consistent with 48 CFR part 951, to acquire such
products from Defense sources, they shall do so in accordance with
(FPMR) 41 CFR 101-26.602.
908.7111 Arms and ammunition.
(a) Acquisition of arms and ammunition readily procurable in the
civilian market shall be made in accordance with regular acquisition
procedures.
(b) Acquisition of arms and ammunition which are peculiar to the
military services shall be made by submission of order form to the
Commanding General, Headquarters, U.S. Army Material Development and
Readiness Command, 5001 Eisenhower Avenue, Alexandria, VA 22333.
908.7112 Materials handling equipment replacement standards.
Materials handling equipment shall be purchased for replacement
purposes in accordance with the standards in (FPMR) 41 CFR 101-25.405
and (DOE-PMR) 41 CFR 109-25.4. The Heads of Contracting Activities are
authorized to replace an item earlier than the date specified in such
standards under unusual circumstances. A written justification shall be
placed in the purchase file.
908.7114 Wiretapping and eavesdropping equipment.
Acquisition by DOE offices and contractors of devices primarily
designed to be used surreptitiously to overhear or record conversations
is prohibited.
908.7115 Forms.
(a) DOE forms shall be obtained by DOE offices in accordance with
the DOE Order 1322.2 (See current version). Cost-type contractors shall
obtain DOE forms through the DOE contracting officer.
(b) Standard, optional, and certain other agency forms as listed in
the GSA Supply Catalog will be obtained by DOE offices in accordance
with (FPMR) 41 CFR 101-26.302.
(c) Marginally punched continuous forms shall be obtained in
accordance with (FPMR) 41 CFR 101-26.703.
908.7116 Electronic data processing tape.
(a) Acquisitions of electronic data processing tape by DOE offices
shall be in accordance with (FPMR) 41 CFR 101-26.508.
(b) Acquisitions of electronic data processing tape by authorized
contractors shall be in accordance with (FPMR) 41 CFR 101-26.508-1.
However, if adequate justification exists, the Heads of the Contracting
Activities may authorize contractors to obtain their tape from other
sources. When such an authorization is granted, a copy of the
authorization and justification shall be retained in the contract file.
908.7117 Tabulating machine cards.
DOE offices shall acquire tabulating machine cards in accordance
with (FPMR) 41 CFR 101-26.509.
PART 915--CONTRACTING BY NEGOTIATION
7. Subpart 915.5 is revised to read as follows:
Subpart 915.5--Unsolicited Proposals
Sec.
915.502 Policy.
915.503 General.
915.505 Content of unsolicited proposals.
915.506 Agency procedures.
915.507 Contracting methods.
915.502 Policy.
(a) Present and future needs demand the involvement of all
resources in exploring alternative energy sources and technologies. To
achieve this objective, it is DOE policy to encourage external sources
of unique and innovative methods, approaches, and ideas by stressing
submission of unsolicited proposals for government support. In
furtherance of this policy and to ensure the integrity of the
acquisition process through application of reasonable controls, the
DOE:
(1) Disseminates information on areas of broad technical concern
whose solutions are considered relevant to the accomplishment of DOE's
assigned mission areas;
(2) Encourages potential proposers to consult with program
personnel before expending resources in the development of written
unsolicited proposals;
(3) Endeavors to distribute unsolicited proposals to all interested
organizations within DOE;
(4) Processes unsolicited proposals in an expeditious manner and,
where practicable, keep proposers advised as discrete decisions are
made;
(5) Assures that each proposal is evaluated in a fair and objective
manner; and,
(6) Assures that each proposal will be used only for its intended
purpose and the information contained therein will not be divulged
without prior permission of the proposer.
(b) Extensions of contract work resulting from unsolicited
proposals shall be processed in accordance with the procedures at 48
CFR 943.170.
915.503 General.
(f) Unsolicited proposals for the performance of support services
are, except as discussed in this paragraph, unacceptable as the
performance of such services is unlikely to necessitate innovative and
unique concepts. There may be rare instances in which an unsolicited
proposal offers an innovative and unique approach to the accomplishment
of a support service. If such a proposal offers a previously unknown or
an alternative approach to generally recognized techniques for the
accomplishment of a specific service(s) and such approach will provide
significantly greater economy or enhanced quality, it may be considered
for acceptance. Such acceptance shall, however, require approval of the
acquisition of support services in accordance with applicable DOE
Directives and be processed as a deviation to the prohibition herein.
915.505 Content of unsolicited proposals.
(b)(5) Unsolicited proposals for nonnuclear energy demonstration
activities not covered by existing formal competitive solicitations or
program opportunity notices may include a
[[Page 19897]]
request for federal assistance or participation, and shall be subject
to the cost sharing provisions of 48 CFR 917.70.
915.506 Agency procedures.
(b) Unless otherwise specified in a notice of program interest, all
unsolicited proposals should be submitted to the Unsolicited Proposal
Coordinator, Office of Procurement and Assistance, Washington, DC
20585. If the proposer has ascertained the cognizant program office
through preliminary contacts with program staff, the proposal may be
submitted directly to that office. In such instances, the proposer
should separately send a copy of the proposal cover letter to the
unsolicited proposal coordinator to assure that the proposal is logged
in the Department's automated tracking system for unsolicited
proposals.
915.507 Contracting methods.
(d) DOE's cost participation policy, at 48 CFR 917.70, shall be
followed in determining the extent to which the DOE will participate in
the cost for the proposed effort.
Subpart 915.6--[Removed]
8. Subpart 915.6 is removed.
9. Subsection 915.970-8 is revised to read as follows:
915.970-8 Weighted guidelines application considerations.
The Department has developed internal procedures to aid the
contracting officer in the application of weighted guidelines and to
assure a reasonable degree of uniformity across the Department.
PART 916--TYPES OF CONTRACTS
916.405 [Removed]
10. Section 916.405 is removed.
PART 917--SPECIAL CONTRACTING METHODS
11. Subpart 917.70 is revised to read as follows:
Subpart 917.70--Cost Participation
Sec.
917.7000 Scope of subpart.
917.7001 Policy.
Subpart 917.70--Cost Participation.
917.7000 Scope of subpart.
(a) This subpart sets forth the DOE policy on cost participation by
organizations performing research, development, and/or demonstration
projects under DOE prime contracts. This subpart does not cover efforts
and projects performed for DOE by other Federal agencies.
(b) Cost participation is a generic term denoting any situation
where the Government does not fully reimburse the performer for all
allowable costs necessary to accomplish the project or effort under the
contract. The term encompasses cost sharing, cost matching, cost
limitation (direct or indirect), participation in kind, and similar
concepts.
917.7001 Policy.
(a) When DOE supports performer research, development, and/or
demonstration efforts, where the principal purpose is ultimate
commercialization and utilization of the technologies by the private
sector, and when there are reasonable expectations that the performer
will receive present or future economic benefits beyond the instant
contract as a result of performance of the effort, it is DOE policy to
obtain cost participation. Full funding may be provided for early
phases of development programs when the technological problems are
still great.
(b) In making the determination to obtain cost participation, and
evaluating present and future economic benefits to the performer, DOE
will consider the technical feasibility, projected economic viability,
societal and political acceptability of commercial application, as well
as possible effects of other DOE-supported projects in competing
technologies.
(c) The propriety, manner, and amount of cost participation must be
decided on a case-by-case basis.
(d) Cost participation is required for demonstration projects
unless exempted by the Under Secretary. Demonstration projects,
pursuant to this subpart, include demonstrations of technological
advances and field demonstrations of new methods and procedures, and
demonstrations of prototype commercial applications for the
exploration, development, production, transportation, conversion, and
utilization of energy resources.
12. Subpart 917.72 is revised to read as follows:
Subpart 917.72--Program Opportunity Notices for Commercial
Demonstrations
Sec.
917.7200 Scope of subpart.
917.7201 Policy.
917.7201-1 General.
Subpart 917.72--Program Opportunity Notices for Commercial
Demonstrations
917.7200 Scope of subpart.
(a) This subpart discusses the policy for the use of a program
opportunity notice solicitation approach to accelerate the
demonstration of the technical feasibility and commercial application
of all potentially beneficial non-nuclear energy sources and
utilization technologies.
(b) This subpart applies to demonstrations performed by
individuals, educational institutions, other commercial or industrial
organizations, or other private entities, or by public entities,
including State and local governments, but not other Federal agencies.
For purposes of this subpart, commercial demonstration projects include
demonstrations of technological advances, field demonstrations of new
methods and procedures, and demonstration of prototype commercial
applications for the exploration, development, production,
transportation, conversion, and utilization of non-nuclear energy
resources.
917.7201 Policy.
917.7201-1 General.
(a) It is DOE's intent to encourage the submission of proposals to
accelerate the demonstration of the technical, operational, economic,
and commercial feasibility and environmental acceptability of
particular energy technologies, systems, subsystems, and components.
Program opportunity notices will be used to provide information
concerning scientific and technological areas encompassed by DOE's
programs. DOE shall, from time to time, issue program opportunity
notices for proposals for demonstrations of various forms of non-
nuclear energy and technology utilization.
(b) Each program opportunity notice shall as a minimum describe:
the goal of the intended demonstration effort; the time schedule for
award; evaluation criteria; program policy factors; the amount of cost
detail required; and proposal submission information. Program policy
factors are those factors which, while not appropriate indicators of a
proposal's individual merit (i.e., technical excellence, proposer's
ability, cost, etc.), are relevant and essential to the process of
choosing which of the proposals received will, taken together, best
achieve the program objectives. All such factors shall be predetermined
and specified in the notice so as to notify proposers that factors
which are
[[Page 19898]]
essentially beyond their control will affect the selection process.
13. Subpart 917.73 is revised to read as follows:
Subpart 917.73--Program Research and Development Announcements
Sec.
917.7300 Scope of subpart.
917.7301 Policy.
917.7301-1 General.
Subpart 917.73--Program Research and Development Announcements
917.7300 Scope of subpart.
(a) This subpart discusses the policy for the use of a program
research and development announcement (PRDA) solicitation approach to
obtain and select proposals from the private sector for the conduct of
research, development, and related activities in the energy field.
917.7301 Policy
917.7301-1 General
(a) PRDAs shall be used to provide potential proposers with
information concerning DOE's interest in entering into arrangements for
research, development, and related projects in specified areas of
interest. It is DOE's intent to solicit the submission of ideas which
will serve as a basis for research, development, and related activities
in the energy field. It is DOE's desire to encourage the involvement of
small business concerns, small disadvantage business concerns, and
women-owned small business concerns in research and development
undertaken pursuant to PRDAs.
(b) The PRDA should not replace existing acquisition procedures
where a requirement can be sufficiently defined for solicitation under
standard advertised or negotiated acquisition procedures. Similarly, it
should not inhibit or curtail the submission of unsolicited proposals.
However, a proposal which is submitted as though it were unsolicited
but is in fact germane to an existing PRDA shall be treated as though
submitted in response to the announcement or returned without action to
the proposer, at the proposer's option. Further, the PRDA is not to be
used in a competitive situation where it is appropriate to negotiate a
study contract to obtain analysis and recommendations to be
incorporated in the subsequent request for proposals.
(c) The PRDA is to be used only where:
(1) Research and development is required in support of a specific
project area within an energy program with the objective of advancing
the general scientific and technological base, and this objective is
best achieved through:
(i) A diversity of possible approaches, within the current state of
the art, available for solving the problems;
(ii) The involvement of a broad spectrum of organizations in
seeking out solutions to the problems posed;
(iii) The application of the unique qualifications or specialized
capabilities of many individual proposers which will enable them to
perform portions of the research project (without necessarily
possessing the qualifications to perform the entire project) so that
the overall support may be broken into segments which cannot be
ascertained in advance; and,
(iv) The fostering of new and creative solutions.
(2) Consistent with paragraph (c)(1) of this section, it is
anticipated that choices will have to be made among dissimilar
concepts, ideas, or approaches; and
(3) It is determined that a broad range of organizations exist that
would be capable of contributing towards the overall research and
development goals identified in paragraph (c)(1) of this section.
(d) Each PRDA shall as a minimum describe: the area(s) of program
interest; time schedule for award; proposal submittal information;
evaluation criteria; and program policy factors. The PRDA should
clearly emphasize to proposers that program policy factors are
essentially beyond their control and will affect the selection process.
The PRDA should also state that DOE reserves the right to select for
award or support any, all, or none of the proposals received in
response to an announcement.
14. Subpart 917.74 is revised to read as follows:
Subpart 917.74--Acquisition, Use, and Disposal of Real Estate
Sec.
917.7401 General.
917.7402 Policy.
917.7403 Application.
Subpart 917.74--Acquisition, Use, and Disposal of Real Estate
917.7401 General.
Special circumstances and situations may arise under cost-type
contracts when, in the performance of their contract or subcontract,
the performer shall be required, or otherwise find it necessary, to
acquire real estate or interests therein by:
(a) Purchase, on DOE's behalf or in its own name, with title
eventually vesting in the Government.
(b) Lease, and DOE assumes liability for, or otherwise will pay for
the obligation under the lease.
(c) Acquisition of temporary interest through easement, license or
permit, and DOE funds the cost of the temporary interest.
917.7402 Policy.
It is the policy of the Department of Energy that when the real
estate acquisitions are made, the following policies and procedures
shall be applied to such acquisitions:
(a) Real estate acquisitions shall be mission essential;
effectively, economically, and efficiently managed and utilized; and
disposed of promptly, when not needed;
(b) Acquisitions shall be justified, with documentation which
describes the need for the acquisitions, general requirements, cost,
acquisition method to be used, site investigation reports, site
recommended for selection, and property appraisal reports; and
(c) Acquisition by lease, in addition to the requirements in
paragraphs (a) and (b) of this section:
(1) Shall not exceed a one-year term if funded by one-year
appropriations.
(2) May exceed a one-year term, when the lease is for special
purpose space funded by no-year appropriations and approved by the
Department.
(3) Shall contain an appropriate cancellation clause which limits
the Government's obligation to no more than the amount of rent to the
earliest cancellation date plus a reasonable cancellation payment.
(4) Shall be consistent with Government laws and regulations
applicable to real estate management.
917.7403 Application.
The clause at 48 CFR 952.217-70 shall be included in contracts or
modifications where contractor acquisitions are expected to be made.
917.75 [Removed]
15. Subpart 917.75 is removed.
922.805 [Removed]
16. Section 922.805 is removed.
922.70 [Removed]
17. Subpart 922.70 is removed.
PART 928--BONDS AND INSURANCE
18. Subpart 928.1 is revised to read as follows:
Subpart 928.1--Bonds
Sec.
928.101-1 Policy on use.
928.103-3 Payment bonds.
928.103-70 Review of performance and payment bonds for other than
construction.
[[Page 19899]]
Subpart 928.1--Bonds
928.101-1 Policy on use.
(a) In addition to the restriction on use of bid guarantees in FAR
28.101-1(a), a bid guarantee may be required only for fixed price or
unit price contracts entered into as a result of sealed bidding. They
may not be required for negotiated contracts.
928.103-3 Payment bonds.
(a) A determination that is in the best interest of the Government
to require payment bonds in connection with other than construction
contracts may be made by the contracting officer on individual
acquisitions.
928.103-70 Review of performance and payment bonds for other than
construction.
A performance or payment bond, other than an annual bond, shall not
antedate the contract to which it pertains.
PART 932--CONTRACT FINANCING
19. Section 932.102 is revised to read as follows:
932.102 Description of contract financing methods.
(e)(2) Progress payments based on a percentage or stage of
completion may be authorized by the Head of the Contracting Activity
when a determination is made that progress payments based on costs
cannot be practically employed and that there are adequate safeguards
provided for the administration of progress payments based on a
percentage or stage of completion.
932.7 [Removed]
20. Subpart 932.7 is removed.
932.802 [Removed]
21. Section 932.802 is removed.
932.805 [Removed]
22. Section 932.805 is removed.
23. Subpart 932.9 is revised to read as follows:
Subpart 932.9--Prompt Payment
Sec.
932.970 Implementing DOE policies and procedures.
Subpart 932.9--Prompt Payment
932.970 Implementing DOE policies and procedures.
(a) Invoice payments. (1) Contract settlement date. For purposes of
determining any interest penalties under cost-type contracts, the
effective date of contract settlement shall be the effective date of
the final contract modification issued to acknowledge contract
settlement and to close out the contract.
(2) Constructive acceptance periods. Where the contracting officer
determines, in writing, on a case-by-case basis, that it is not
reasonable or feasible for DOE to perform the acceptance or approval
function within the standard period, the contracting officer should
specify a longer constructive acceptance or approval period, as
appropriate. Considerations include, but are not limited to, the nature
of supplies or services involved, geographical site location,
inspection and testing requirements, shipping and acceptance terms, and
available DOE resources.
(b) Contract financing payments. Contracting officers may specify
payment due dates that are less than the standard 30 days when a
determination is made, in writing, on a case-by-case basis, that a
shorter contract financing payment cycle will be required to finance
contract work. In such cases, the contracting officer should coordinate
with the finance and program officials that will be involved in the
payment process to ensure that the contract payment terms to be
specified in solicitations and resulting contract awards can be
reasonably met. Consideration should be given to geographical
separation, workload, contractor ability to submit a proper request,
and other factors that could affect timing of payment. However, payment
due dates that are less than 7 days for progress payments or less than
14 days for interim payments on cost-type contracts are not authorized.
932.7000 [Removed]
24. Section 932.7000 is removed.
932.7001 [Removed]
25. Section 932.7001 is removed.
PART 933--PROTESTS, DISPUTES AND APPEALS
26. Subpart 933.1 is revised to read as follows:
Subpart 933.1--Protests
Sec.
933.103 Protests to the agency.
933.104 Protests to GAO.
933.105 Protests to GSBCA.
933.106 Solicitation provisions.
Subpart 933.1--Protests
933.103 Protests to the agency.
(f) If FAR 33.103(f) requires that award be withheld or performance
be suspended or the awarded contract be terminated pending resolution
of an agency protest, authority to award and/or continue performance of
the protested contract may be requested by the Head of the Contracting
Activity (HCA), concurred in by counsel, and approved by the
Procurement Executive.
(i)(1) Protests filed with the contracting officer before or after
award shall be decided by the Head of the Contracting Activity except
for the following cases, which shall be decided by the Procurement
Executive:
(i) The protester requests that the protest be decided by the
Procurement Executive.
(ii) The HCA is the contracting officer of record at the time the
protest is filed, having signed either the solicitation where the award
has not been made, or the contract, where the award or nomination of
the apparent successful offeror has been made.
(iii) The HCA concludes that one or more of the issues raised in
the protest have the potential for significant impact on DOE
acquisition policy.
(2) Upon receipt of a protest requesting a decision by the
Procurement Executive, the contracting activity shall immediately
provide a copy of the protest to the Office of Clearance and Support.
(j) The Department of Energy encourages direct negotiations between
an offeror and the contracting officer in an attempt to resolve
protests. In those situations where the parties are not able to achieve
resolution, the Department favors the use of alternative dispute
resolution (ADR) techniques to resolve protests. A protest requesting a
decision at the Headquarters level shall state whether the protester is
willing to utilize ADR techniques such as mediation or nonbinding
evaluation of the protest by a neutral. Upon receipt of a protest
requesting a decision at the Headquarters level, the Office of
Clearance and Support will explore with the protester whether the use
of ADR techniques would be appropriate to resolve the protest. Both
parties must agree that the use of such techniques is appropriate. If
the parties do not mutually agree to utilize ADR to resolve the
protest, the protest will be processed in accordance with the
procedures set forth in paragraph (k).
(k) Upon receipt of a protest lodged with the Department, the
contracting officer shall prepare a report similar to that discussed in
FAR 33.104(a)(3)(iii). In the case of a protest filed at the
Headquarters level, the report shall be forwarded to the Office of
Clearance and Support within 21 calendar days of being notified of such
a protest with a proposed response to the protest. The Procurement
Executive (for protests at the Headquarters level or those specific HCA
protests cited in paragraph (d)(2) of this section) or an HCA (for
protests
[[Page 19900]]
at the contracting activity level) will render a decision on a protest
within 35 calendar days, unless a longer period of time is determined
to be needed.
933.104 Protests to GAO.
(a)(2) The contracting officer shall provide the notice of protest.
(b) Protests before award. (1) When the Department has received
notice from the GAO of a protest filed directly with the GAO, a
contract may not be awarded until the matter is resolved, unless
authorized by the Head of the Contracting Activity in accordance with
FAR 33.104(b). Before the Head of the Contracting Activity authorizes
the award, the required finding shall be concurred in by the DOE
counsel handling the protest, endorsed by the Senior Program Official,
and approved by the Procurement Executive. The finding shall address
the likelihood that the protest will be sustained by the GAO.
(c) Protests after award. Before the Head of the Contracting
Activity authorizes the award, the finding required by FAR 33.104(c)(2)
shall be concurred in by the DOE counsel handling the protest, endorsed
by the Senior Program Official, and approved by the Procurement
Executive.
(g) Notice to GAO. (1) The report to the GAO regarding a decision
not to comply with the GAO's recommendation, discussed at FAR
33.104(f), shall be provided by the HCA making the award, after
approval of the Procurement Executive. If a DOE-wide policy issue is
involved, the report shall be provided by the Procurement Executive.
(2) It is the policy of the Department to comply promptly with
recommendations set forth in Comptroller General Decisions except for
compelling reasons.
(3) The GAO does not have jurisdiction to consider subcontractor
protests.
933.105 Protests to GSBCA.
(a)(1)(i) The GSBCA does not have jurisdiction to consider
subcontractor protests.
(d)(2) The determinations and findings required by FAR 33.105(d)(2)
shall be executed by the HCA.
(4) If the GSBCA suspends the procurement authority to acquire any
goods or services not previously delivered and accepted under an
awarded contract, the contracting officer shall invoke the clause at
FAR 52.233-3, ``Protest After Award,'' to cause the contractor to cease
performance and to suspend related activities that may result in
additional obligations being incurred by the Government.
933.106 Solicitation provisions.
(a) The contracting officer shall supplement the provision at FAR
52.233-2, Service of Protest, in solicitations for other than
simplified acquisitions by adding the provision at 48 CFR 952.233-2.
(b) The contracting officer shall include the provision at 48 CFR
952.233-4 in solicitations for purchases above the simplified
acquisition threshold.
(c) The contracting officer shall include the provision at 48 CFR
952.233-5 in solicitations for purchases above the simplified
acquisition threshold.
PART 935--RESEARCH AND DEVELOPMENT CONTRACTING
27. Subsections 935.016-3 through 935.016-7 and 935.016-9 are
removed, and section 935.016 and subsections 935.016-1, 935.016-2 and
935.016-8 are revised to read as follows:
935.016 Research opportunity announcements.
935.016-1 Scope.
(a) FAR 35.016 sets forth the policies and procedures for
contracting for research through the use of broad agency announcements
as authorized by the Competition in Contracting Act of 1984 (CICA) (41
U.S.C. 259(b)(2)) and Federal Acquisition Regulation (FAR) 6.102(d)(2).
Within DOE, broad agency announcements, will be designated as Research
Opportunity Announcements (ROAs).
(b) Research Opportunity Announcements are a form of competitive
solicitation under which DOE's broad mission and program-level research
objectives are defined; proposals which offer meritorious approaches to
those objectives are requested from all offerors capable of satisfying
the Government's needs; those proposals are evaluated by scientific or
peer review against stated specific evaluation criteria; and selection
of proposals for possible contract award is based upon that evaluation,
the importance of the research to the program objectives, and funds
availability.
935.016-2 Applicability.
(a) This section applies to all DOE Headquarters and field program
organizations which, by virtue of their statutorily mandated mission or
other such authority as may exist, support energy or energy-related
research activities through contractual relationships.
(1) The ROA may be used as a competitive solicitation procedure
through which DOE acquires basic and applied research in support of its
broad mission and program-level research objectives, and these
objectives may be best achieved through relationships where contractors
pursue diverse and dissimilar solutions and approaches to scientific
and technological areas related to DOE's missions and programs.
(2) The ROA shall not be used as a solicitation method when one or
more of the following conditions exist:
(i) In accordance with the Federal Grant and Cooperative Agreement
Act, Public Law 97-258, the principal purpose of the relationship will
be assistance;
(ii) The purpose of the research is to accelerate the demonstration
of the technical, operational, economic, or commercial feasibility and
environmental acceptability of particular energy technologies, systems,
subsystems, and components that would appropriately be acquired by
Program Opportunity Notices (PONs) in accordance with 48 CFR 917.72;
(iii) The research is required in support of a specific project
area within an energy program which appropriately would be acquired by
Program Research and Development Announcements (PRDAs) in accordance
with 48 CFR 917.73;
(iv) The research requirements can be sufficiently defined to allow
the use of contracting by negotiation in accordance with FAR part 15;
(v) The purpose of the research is the acquisition of goods and
services related to the development of a specific system or hardware
acquisition; or,
(vi) Any funds to be obligated to a resulting contract will be used
to conduct or support a conference or training activity.
(b) The following limitations are applicable to the use of ROAs:
(1) The use of broad agency announcements for the acquisition of
that part of development not related to the development of a specific
system or hardware is authorized by FAR 35.016(a). Notwithstanding that
authorization, ROAs shall be used within DOE only to acquire basic and
applied research.
(2) Proposals shall not be solicited from, and contracts shall not
be awarded to, any specific entity which operates a Government-owned or
-controlled research, development, special production, or testing
establishment, such as DOE's management and operating contractor
[[Page 19901]]
facilities, Federally Funded Research and Development Centers chartered
by other agencies, or other such entities. This limitation shall not be
used to preclude the parent organization of the entity operating the
Government-owned or -controlled facility, its subsidiaries, other
divisions, or other related business affiliates from proposing, or
receiving awards, under DOE's ROA solicitations, provided that any
proposed resources (personnel, facilities, and other resources) used in
the management and operation of the Government-owned or -controlled
facility have been approved for use in the ROA effort by the sponsoring
agency.
935.016-8 Selection of proposals.
(a) After considering the evaluation findings, the importance of
the proposed research to the program objectives, and funds
availability, the Selection Official shall determine whether a specific
proposal warrants selection for negotiation and award of a contract.
The decision of the Selection Official shall be documented in writing
and shall address, as appropriate, such issues as:
(1) The scientific and technical merit of the proposal in relation
to the ROA evaluation criteria;
(2) The qualifications, capabilities, and experience of the
proposed personnel; technical approach; facilities; and where
applicable, cost participation by the offeror (or any combination of
the above);
(3) The importance of the proposed research to the program
objectives;
(4) Which areas of the proposal, whether in whole or in part, have
been selected for funding, and the amount of that funding; and,
(5) Assurances that any other requirements which are imposed by
statute, regulation, or internal directives relating to the specific
research activities and which are properly the responsibility of the
program office have been satisfied.
(b) Absent extenuating circumstances, selection decisions regarding
any individual proposal should be made within six (6) months after
receipt of the proposal. Proposals which have been evaluated may be
accumulated to allow for a consolidated selection decision so long as
not more than six (6) months have passed since the receipt of any of
the proposals so accumulated.
(c) The cognizant DOE program official shall notify successful and
unsuccessful offerors of any selection/non-selection decisions. These
notices shall be made in writing promptly after the decision is made,
and shall, at a minimum, state in general terms, the basis for the
determination.
PART 936--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
936.601 through 936.602-4 [Removed]
28. Sections 936.601, 936.602-2, 936.602-3, and 936.602-4 are
removed.
936.603 through 936.606 [Removed]
29. Sections 936.603, 936.605, and 936.606 are removed.
936.72 [Removed]
30. Subpart 936.72 is removed.
31. Part 941 is added at the end of Subchapter F as follows:
PART 941--ACQUISITION OF UTILITY SERVICES
Subpart 941.2--Acquiring Utility Services.
Sec.
941.201-70 DOE Directives.
941.201-71 Use of subcontracts.
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
Subpart 941.2--Acquiring Utility Services
941.201-70 DOE Directives.
Utility services (defined at FAR 41.101) shall be acquired in
accordance with FAR part 41 and DOE Directives in subseries 4540
(Public Services).
941.201-71 Use of subcontracts.
Utility services for the furnishing of electricity, gas (natural or
manufactured), steam, water and/or sewerage at facilities owned or
leased by DOE shall not be acquired under a subcontract arrangement,
except as provided for at 48 CFR 970.0803 or if the prime contract is
with a utility company.
PART 942--CONTRACT ADMINISTRATION
32. Subsection 942.705-1 is revised to read as follows:
942.705-1 Contracting officer determination procedure.
(a)(3) The Department of Energy shall use the contracting officer
determination procedure for all business units for which it shall be
required to negotiate final indirect cost rates. A list of such
business units is maintained by the Office of Policy, within the
Headquarters procurement organization.
(b)(1) Pursuant to FAR 52.216-7, Allowable Cost and Payment,
contractors shall be requested to submit their final indirect cost rate
proposals reflecting actual cost experience during the covered period
to the cognizant contracting officer responsible for negotiating their
final rates. The DOE negotiating official shall request all needed
audit service in accordance with internal procedures.
33. Subsection 942.705-3 is revised to read as follows:
942.705-3 Educational institutions.
(a)(2) The negotiated rates established for the institutions cited
in OMB circular No. A-88 are distributed to the Cognizant DOE Office
(CDO) assigned lead office responsibility for all DOE indirect cost
matters relating to a particular contractor by the Office of Policy,
within the Headquarters procurement organization.
34. Subsection 942.705-4 is revised to read as follows:
942.705-4 State and local governments.
A list of cognizant agencies for State/local government
organizations is periodically published in the Federal Register by the
Office of Management and Budget (OMB). The responsible agencies are
notified of such assignments. The current negotiated rates for State/
local government activities is distributed to each CDO by the Office of
Policy, within the Headquarters procurement organization.
35. Subsection 942.705-5 is revised to read as follows:
942.705-5 Nonprofit organizations other than educational and state
and local governments.
OMB Circular A-122 establishes the rules for assigning cognizant
agencies for the negotiation and approval of indirect cost rates. The
Federal agency with the largest dollar value of awards (contracts plus
federal financial assistance dollars) will be designated as the
cognizant agency. There is no published list of assigned agencies. The
Office of Policy, within the Headquarters procurement organization,
distributes to each CDO the rates established by the cognizant agency.
942.70 [Removed]
36.37. Subpart 942.70 is removed.
PART 945--GOVERNMENT PROPERTY
945.505-5 [Removed]
38. Subsection 945.505-5 is removed.
945.505-14 [Removed]
39. Subsection 945.505-14 is removed.
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
952.214 [Removed]
40. Section 952.214 is removed.
[[Page 19902]]
952.215 [Removed]
41. Section 952.215 and subsections 952.215-22 and 952.215-23 are
removed.
42. Subsection 952.233-2 is revised to read as follows:
952.233-2 Service of protest.
As prescribed in 48 CFR 933.106(a), add the following to the end of
the clause at FAR 52.233-2:
(c) Another copy of a protest filed with the General Accounting
Office or the General Services Administration Board of Contract
Appeals shall be furnished to the following address within the time
periods described in paragraph (b) of this clause: U.S. Department
of Energy, Assistant General Counsel for Procurement and Financial
Assistance (GC-61), 1000 Independence Avenue, SW., Washington, DC
20585, Fax: (202) 586-4546.
43. Subsection 952.233-4 is added to read as follows:
952.233-4 Notice of protest file availability.
As prescribed in 933.106(b), insert the following provision:
NOTICE OF PROTEST FILE AVAILABILITY (XXX)
(a) If a protest of this procurement is filed with the General
Accounting Office (GAO) in accordance with 4 CFR part 21, any actual
or prospective offeror may request the Department of Energy to
provide it with reasonable access to the protest file pursuant to
FAR 33.104(a)(3)(ii), implementing section 1065 of Pub.L. 103-355.
Such request must be in writing and addressed to the contracting
officer for this procurement.
(b) Any offeror who submits information or documents to the
Department for the purpose of competing in this procurement is
hereby notified that information or documents it submits may be
included in the protest file that will be available to actual or
prospective offerors in accordance with the requirements of FAR
33.104(a)(3)(ii). The Department will be required to make such
documents available unless they are exempt from disclosure pursuant
to the Freedom of Information Act. Therefore, offerors should mark
any documents as to which they would assert that an exemption
applies. (See 10 CFR part 1004.)
44. Subsection 952.233-5 is added to read as follows:
952.233-5 Agency protest review.
As prescribed in 48 CFR 933.106(c), insert the following provision:
AGENCY PROTEST REVIEW (XXX)
Protests to the Agency will be decided either at the level of
the Head of the Contracting Activity or at the Headquarters level.
The Department of Energy's agency protest procedures, set forth in
933.103, elaborate on these options and on the availability of a
suspension of a procurement that is protested to the agency. The
Department encourages potential protesters to discuss their concerns
with the contracting officer prior to filing a protest.
952.251-70 [Amended]
45. Subsection 952.251-70 is amended by revising the date of the
clause to read ``(June 1995)''.
PART 971--REVIEW AND APPROVAL OF CONTRACT ACTIONS [REMOVED]
46. Part 971 is removed.
[FR Doc. 96-10757 Filed 5-2-96; 8:45 am]
BILLING CODE 6450-01-P
Complete official Federal Register PDF
FR Doc. 96-10733 Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks; Loans to Holding Companies and Affiliates
[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Proposed Rules]
[Pages 19862-19865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10733]
=======================================================================
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[[Page 19863]]
FEDERAL RESERVE SYSTEM
12 CFR Part 215
[Regulation O; Docket No. R-0924]
Loans to Executive Officers, Directors, and Principal
Shareholders of Member Banks; Loans to Holding Companies and Affiliates
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The proposed rule would amend the Board's Regulation O, which
limits how much and on what terms a bank may lend to its own insiders
and insiders of its affiliates. Under the proposed rule, four of the
five restrictions of Regulation O would not apply to extensions of
credit by a bank to executive officers and directors of the bank's
affiliates, provided that those executive officers and directors were
not engaged in major policymaking functions of the lending bank. Of the
restrictions in Regulation O, only the prohibition on preferential
lending would apply to extensions of credit to such persons.
The Board was granted authority to create such an exception for
directors of affiliates for the first time by the Riegle Community
Development and Regulatory Improvement Act of 1994; Regulation O
already contains a blanket regulatory exception for executive officers
of affiliates not involved in policymaking at the lending bank, which
as a result of the statute must be scaled back to no longer include the
prohibition on preferential lending.
DATES: Comments must be received on or before June 17, 1996.
ADDRESSES: Comments should refer to Docket No. R-0924 and be mailed to
William W. Wiles, Secretary, Board of Governors of the Federal Reserve
System, Washington, DC 20551. They may also be delivered to the guard
station in the Eccles Building Courtyard on 20th Street, NW., (between
Constitution Avenue and C Street) between 8:45 a.m. and 5:15 p.m.
weekdays. Except as provided in the Board's rules regarding the
availability of information (12 CFR 261.8), comments will be available
for inspection and copying by members of the public in the Freedom of
Information Office, Room MP-500 of the Martin Building, between 9:00
a.m. and 5:00 p.m. weekdays.
FOR FURTHER INFORMATION CONTACT: Gregory Baer, Managing Senior Counsel
(202/452-3236), or Gordon Miller, Attorney (202/452-2534), Legal
Division, Board of Governors of the Federal Reserve System. For the
hearing impaired only, Telecommunications Device for the Deaf (TDD),
Dorothea Thompson (202/452-3544).
SUPPLEMENTARY INFORMATION:
Background
Section 22(h) of the Federal Reserve Act, 12 U.S.C. 375b, restricts
insider lending by banks, and Regulation O implements section 22(h).
Regulation O limits total loans to any one insider and aggregate loans
to all insiders to a percentage of the bank's capital and requires that
such loans be on non-preferential terms--that is, on the same terms a
person not affiliated with the bank would receive.1 12 CFR 215.4
(a), (c) and (d). For this purpose, an ``insider'' means an executive
officer, director, or principal shareholder, and loans to an insider
include loans to any ``related interest'' of the insider, including any
company controlled by the insider. 12 CFR 215.2(h). Regulation O
requires that banks maintain records to document compliance with all
these restrictions. 12 CFR 215.8.
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\1\ Regulation O also requires prior approval of the bank's
board of directors for certain loans to insiders and prohibits
overdrafts by executive officers and directors.
---------------------------------------------------------------------------
Section 22(h) restricts lending not only to insiders of the bank
making the loan but also to insiders of the bank's parent bank holding
company and any other subsidiary of that bank holding company. As
amended by the Federal Deposit Insurance Corporation Improvement Act of
1991 (FDICIA),2 section 22(h)(8) provides that ``any executive
officer, director, or principal shareholder (as the case may be) of any
company of which the member bank is a subsidiary, or of any other
subsidiary of that company, shall be deemed to be an executive officer,
director, or principal shareholder (as the case may be) of the member
bank.'' 12 U.S.C. 375b(8)(A).
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\2\ Pub. L. 102-242, section 306 (1991).
---------------------------------------------------------------------------
At the time that the FDICIA amendment became effective, the Board's
rules did not place any restrictions on loans to an executive officer
of a bank's affiliates (other than the parent bank holding company)
unless the executive officer was involved in major policymaking
functions at the bank.3 12 CFR 215.2(d) (1992). The Board
considered this treatment appropriate for two reasons. First, such
persons generally were not considered to be in a position to exert
sufficient leverage on the bank to obtain a loan on anything but arm's
lengths terms, in contrast to executive officers of the bank or its
parent. Thus, in terms of protecting the safety and soundness of banks,
the Board considered the benefits of restricting loans to these
affiliate insiders to be small. Second, applying these restrictions to
affiliate insiders would have required each bank to maintain an updated
list of all its affiliates' executive officers and all related
interests of those executive officers, and to check all loans against
this list. Particularly for a bank in a large bank holding company
structure, this effort would have constituted a significant burden--and
one not outweighed by any substantial benefit.
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\3\ Subsection (h) of section 22 was added in 1978. Financial
Institutions Regulatory and Interest Rate Control Act of 1978, Pub.
L. 95-630, section 104. However, the statute was ambiguous about
whether an executive officer of a bank's affiliate was required to
be treated like an executive officer of the bank itself. (The
statute imposed restrictions on lending by banks to ``executive
officers'' of the bank. The statute provided that an ``officer'' of
a bank included officers of affiliates--but did not so provide with
respect to ``executive officers.'') No such ambiguity arose with
respect to directors and principal shareholders of affiliates, who
were explicitly treated like their banking counterparts. In 1980,
the Board amended Regulation O to cover insiders of affiliates, but
included a regulatory exception for executive officers of affiliates
not involved in major policymaking functions at the bank.
---------------------------------------------------------------------------
However, after the FDICIA amendment to section 22(h)(8), the
language of the statute no longer appeared to allow such an exception
for executive officers of affiliates, who are explicitly treated like
executive officers of the bank itself. Still, nothing in the
legislative history of FDICIA indicated that Congress intended to
invalidate the Board's regulatory exception and extend coverage to all
executive officers of affiliates.
In the Riegle Community Development and Regulatory Improvement Act
of 1994, Congress addressed this issue by amending section 22(h)(8) yet
again. Congress allowed the Board to make exceptions to the statutory
restrictions on lending to affiliate insiders embodied in paragraph
(8). The extension of the statute to affiliate insiders was moved to a
new paragraph (8)(A), and authority for the Board to make exceptions
was placed in a new paragraph (8)(B), which reads as follows:
The Board may, by regulation, make exceptions to subparagraph
(A), except as that subparagraph makes applicable paragraph (2), for
an executive officer or director of a subsidiary of a company that
controls the member bank, if that executive officer or director does
not have authority to participate, and does not participate, in
major policymaking functions of the member bank.
Section 22(h)(2)--the ``paragraph (2)'' to which the Board may not make
[[Page 19864]]
exceptions--is the prohibition against lending on preferential terms.
The 1994 amendment to section 22(h) allows the Board to exempt
executive officers and directors of affiliates (other than the bank
holding company) from insider lending restrictions, provided they are
not involved in major policymaking functions at the lending bank. The
legislative history of the provision indicates that it was intended to
allow the Board to extend its existing exception for executive officers
to directors as well.4 However, the 1994 amendment clearly does
not allow the Board to exempt either executive officers or directors
from the restriction on preferential lending in section 22(h)(2).
---------------------------------------------------------------------------
\4\ House Report 103-652, 103d Cong., 2d Sess. 180 (1994).
---------------------------------------------------------------------------
Thus, the apparent effect of the 1994 amendments regulation is (1)
to reaffirm the Board's regulation insofar as it exempts executive
officers of affiliates who are not involved in policymaking functions
at the bank from the aggregate and individual lending limits, overdraft
restriction, and prior approval requirements of Regulation O; (2) to
invalidate the Board's regulation insofar as it exempts such executive
officers from the prohibition on preferential lending; and (3) to grant
the Board authority to extend the remaining parts of its executive
officer exemption to directors as well.
Exception for Certain Executive Officers and Directors of
Affiliates
Accordingly, the Board is proposing amendments to Regulation O that
would eliminate its restrictions--other than the restriction on
preferential lending--on a bank's lending to executive officers and
directors of affiliates who are not involved in major policymaking
functions of the lending bank. The Board believes that extending the
exemption to directors would relieve regulatory burden on bank holding
companies without increasing the risk of insider lending or resultant
safety and soundness problems. Reimposing the preferential lending
restriction on executive officers (and maintaining the restriction on
directors) might negate some of this relief; although banks would no
longer be required to document that loans to executive officers and
directors of affiliates fall within the lending limits of Regulation O,
they might be required to maintain similar documentation to demonstrate
that the loans were not on preferential terms. However, the Board
believes that the plain language of the statute requires coverage of
preferential lending.
There is some reason to believe that this effect on the Board's
regulation was unintended, and that Congress intended for the Board's
across-the-board exemption for executive officers of affiliates to
continue. The Riegle-Neal conference report stated, ``It is not the
intent of the Conferees to affect the exemptions that the Federal
Reserve Board has already extended to executive officers, but rather to
allow the Board the authority to provide appropriate treatment for
directors.'' House Report 103-652 at 180 (1994). However, where, as
here, the provisions of a statute are unambiguous, legislative history
may not be used to alter that plain meaning. The Board has, however,
suggested and supported an amendment to section 22(h) to make its
language consistent with its apparent intent.
Elimination of Unnecessary Board of Directors Approval
In order to qualify for the regulatory exception for executive
officers of affiliates, an executive officer currently must be excluded
from major policymaking functions of the lending bank by resolutions of
the board of directors of both the lending bank and the affiliate for
which the executive officer works. Because a bank has full control over
who participates in its policymaking, the Board believes that requiring
a board resolution of the affiliate in addition to the resolution of
the bank is superfluous and unduly burdensome. Accordingly, the Board
is proposing to delete this requirement from the existing exception for
executive officers and not to include it in the new exception for
directors.
Regulatory Flexibility Act
The Board has concluded after reviewing the proposed regulation
that, if adopted, it would not impose a significant economic hardship
on small institutions. The proposal does not necessitate the
development of sophisticated recordkeeping or reporting systems by
small institutions; nor will small institutions need to seek out the
expertise of specialized accountants, lawyers, or managers in order to
comply with the regulation. The proposal is designed to reduce the
burden of Regulation O consistent with the requirements of the
underlying statute. The Board therefore certifies pursuant to section
605b of the Regulatory Flexibility Act (5 U.S.C. 605b) that the
proposal, if adopted, will not have a significantly adverse economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
Paperwork Reduction Act
In accordance with section 3506 of the Paperwork Reduction Act of
1995 (44 U.S.C. Ch. 35; 5 CFR part 1320, Appendix A.1), the Board
reviewed the proposed rule under the authority delegated to the Board
by the Office of Management and Budget. Comments on the collections of
information should be sent to the Office of Management and Budget,
Paperwork Reduction Project (7100-0036), Washington, DC 20503, with
copies of such comments to be sent to Mary M. McLaughlin, Federal
Reserve Board Clearance Officer, Division of Research and Statistics,
Mail Stop 97, Board of Governors of the Federal Reserve System,
Washington, DC 20551.
The collection of information requirements in this proposed
regulation are found in 12 CFR part 215. This information is required
to evidence compliance with the requirements of Section 22(h) of the
Federal Reserve Act. The respondents and recordkeepers are for-profit
financial institutions, including small businesses. Records must be
retained for two years.
The Federal Reserve may not conduct or sponsor, and an organization
is not required to respond to, this information collection unless it
displays a currently valid OMB control number. The OMB control number
is 7100-0036.
The proposed amendments are expected to provide for some reduction
in the recordkeeping and disclosure practices of state member banks,
and would not affect the banks' reporting requirements to the Federal
Reserve. The recordkeeping and disclosure requirements on extensions of
credit by the reporting bank to insiders of the bank and its affiliates
are contained in the information collection for the Consolidated
Reports of Condition and Income (FFIEC 031-034; OMB No. 7100-0036).
Because the records would be maintained at state member banks and
the notices are not provided to the Federal Reserve, no issue of
confidentiality under the Freedom of Information Act arises.
Comments are invited on: (a) whether the proposed revision to the
collection of information is necessary for the proper performance of
the Federal Reserve's functions; including whether the information has
practical utility; (b) ways to enhance the quality, utility, and
clarity of the information to be collected; and (c) ways to minimize
the burden of information collection on respondents, including through
the use of automated collection techniques or other forms of
information technology.
[[Page 19865]]
List of Subjects in 12 CFR Part 215
Credit, Federal Reserve System, Penalties, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, and pursuant to the
Board's authority under section 22(h) of the Federal Reserve Act (12
U.S.C. 375b), the Board is proposing to amend 12 CFR Part 215, subpart
A, as follows:
PART 215--LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL
SHAREHOLDERS OF MEMBER BANKS (REGULATION O)
1. The authority citation for part 215 continues to read as
follows:
Authority: 12 U.S.C. 248(i), 375a(10), 375b (9) and (10),
1817(k)(3) and 1972(2)(G)(ii); Pub. L. 102-242, 105 Stat. 2236.
2. Section 215.2 is amended as follows:
a. Paragraph (d) introductory text and paragraphs (d)(1) through
(d)(3) are redesignated as paragraph (d)(1) introductory text and
paragraphs (d)(1)(i) through (d)(1)(iii), respectively;
b. A new paragraph (d)(2) is added; and
c. Paragraph (e)(2) is revised.
The addition and revision read as follows:
Sec. 215.2.2 Definitions.
* * * * *
(d)(1) Director of a company or bank * * *
* * * * *
(2) Exception. Extensions of credit to a director of an affiliate
of a member bank (other than a company that controls the bank) shall
not be subject to Secs. 215.4 (b) through (d) and 215.6, provided
that--
(i) The director of the affiliate is excluded (by name or by title)
from participation in major policymaking functions of the member bank
by resolution of the bank's boards of directors, and does not actually
participate in such major policymaking functions; and
(ii) The director is not otherwise subject to Secs. 215.4 (b)
through (d) and 215.6.
(e) * * *
(2) Extensions of credit to an executive officer of an affiliate of
a member bank (other than a company that controls the bank) shall not
be subject to Secs. 215.4 (b) through (d) and 215.6, provided that--
(i) The executive officer of the affiliate is excluded (by name or
by title) from participation in major policymaking functions of the
member bank by resolution of the bank's boards of directors, and does
not actually participate in such major policymaking functions; and
(ii) The executive officer is not otherwise subject to Secs. 215.4
(b) through (d) and 215.6.
* * * * *
By order of the Board of Governors of the Federal Reserve
System, April 25, 1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-10733 Filed 5-2-96; 8:45 am]
BILLING CODE 6210-01-P
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