issue-1996-06-13•Federal Register proposed rules — 1996-06-13
Federal Register proposed rules — 1996-06-13
issue-1996-06-13Federal Register proposed rules — 1996-06-13Proposed Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 96-15146 Federal-State Joint Board on Universal Service; Meeting
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)] [Proposed Rules] [Page 30028] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-15146] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Parts 36 and 69 [CC Docket 96-45; DA-96-926] Federal-State Joint Board on Universal Service; Meeting AGENCY: Federal Communications Commission. ACTION: Notice of meeting. ----------------------------------------------------------------------- SUMMARY: The purpose of the notice is to inform the general public of a meeting that will be held by the Federal-State Joint Board on universal service. DATES: The Federal-State Joint Board in CC Docket 96-45 will hold an open meeting on Wednesday, June 19, 1996 at 9 a.m. ADDRESSES: The meeting will be held in Room 856 at 1919 M Street, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Irene Flannery, Accounting and Audits Division, Common Carrier Bureau, at (202) 418-0847. SUPPLEMENTARY INFORMATION: At the meeting, the Federal-State Joint Board will hear from two panels of experts addressing universal service issues set forth in Section 254 of the Telecommunications Act. Specifically, the panelists will address what types of functionalities schools, libraries, and rural health care providers require of telecommunications services, as well as the cost, on a nationwide basis, of providing services able to deliver those functionalities. Federal Communications Commission. William F. Caton, Acting Secretary. [FR Doc. 96-15146 Filed 6-11-96; 11:17 am] BILLING CODE 6712-01-M
Complete official Federal Register PDF
FR Doc. 96-15034 Approval and Promulgation of Section 182(f) Exemption to the Nitrogen Oxides (NOINFX) Control Requirements for the Calcasieu Parish Ozone Nonattainment Area; Louisiana
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30024-30028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15034]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[LA-22-1-6870; FRL-5520-4]
Approval and Promulgation of Section 182(f) Exemption to the
Nitrogen Oxides (NOX) Control Requirements for the Calcasieu
Parish Ozone Nonattainment Area; Louisiana
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rulemaking.
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SUMMARY: The EPA proposes to approve a petition from the State of
Louisiana requesting that the Calcasieu Parish marginal ozone
nonattainment area be exempt from applicable NOX control
requirements of section 182(f) of the Clean Air Act (Act). The section
182(f) NOX requirement from which the area will be exempt is
NOX new source review (NSR). In addition, approval of the section
182(f) petition would remove the NOX general conformity provisions
and the NOX build/no build provisions of the transportation
conformity rule (for conformity provisions, see the November 24, 1993
and November 30, 1993 Federal Register). The exemption for conformity
NOX requirements is found, generally, in 40 CFR part 93, subparts
T and W. The section 182(f) NOX provisions are explained fully in
the EPA's NOX Supplement to the General Preamble, published in the
Federal Register (FR) on November 25, 1992. The State of Louisiana made
the request for Calcasieu Parish based on a demonstration that
additional NOX reductions would not contribute to ozone attainment
in the nonattainment area.
DATES: Comments on this proposed action must be received in writing on
or before July 15, 1996.
ADDRESSEES: Written comments on these actions should be addressed to
Mr. Thomas Diggs, Chief, Planning Section, at the EPA Regional Office
listed below. Copies of the documents relevant to these proposed
actions are available for public inspection during normal business
hours at the following locations. The interested persons wanting to
examine these documents should make an appointment with the appropriate
office at least 24 hours before the visiting day.
U.S. Environmental Protection Agency, Region 6, Air Planning (6PD-L),
1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.
Louisiana Department of Environmental Quality, N.B. Garlock Building,
7290 Bluebonnet, Baton Rouge, Louisiana 70810.
FOR FURTHER INFORMATION CONTACT:
Mr. Matthew Witosky or Mr. Quang Nguyen, Planning Section (6PD-L),
Multimedia Planning and Permitting Division, U.S. EPA Region 6, 1445
Ross Avenue, Dallas, Texas 75202-2733, telephone (214) 665-7214.
SUPPLEMENTARY INFORMATION:
Background
NOX are precursors to ground level (tropospheric) ozone, or
urban ``smog.'' When released into the atmosphere, NOX will react
with volatile organic compounds (VOC) in the presence of sunlight to
form ozone. Tropospheric ozone is an important factor in the nation's
urban air pollution problem.
Calcasieu Parish, Louisiana, was designated nonattainment for ozone
and classified as marginal pursuant to sections 107(d)(4) and 181(a) of
the Act. Under section 181(a), marginal areas must attain the National
Ambient Air Quality Standard for ozone (the ozone standard) by November
15, 1993. Please reference 56 FR 56694 (November 6, 1991, codified for
Louisiana at 40 CFR 81.319).
The Amendments to the Act (1990 Amendments) made significant
changes to the air quality planning requirements for areas that do not
meet the ozone standard. Subparts 1 and 2 of part D, title I of the Act
contain the air quality planning requirements for ozone nonattainment
areas. Title I includes new requirements to control NOX emissions
in certain ozone nonattainment areas and ozone transport regions.
Section 182(f) requires States to apply the same control requirements
to major stationary sources of NOX as are applied to major
stationary sources of VOC. For marginal areas, the NOX requirement
is to provide for nonattainment new source review (NSR). In addition,
there are new NOX requirements under the general and
transportation conformity provisions of section 176(c). This approval
exempts the area from the section 182(f) NSR NOX requirements (see
the NOX Supplement to the General Preamble 57 FR 55620), and from
the NOX requirements of the general, as well as the NOX
requirements of the build/no build provisions of the transportation,
conformity rules (see also 58 FR 63214 published on November 24, 1993
and 58 FR 62188 published on November 30, 1993, as amended,
particularly at 60 FR 44790, 44794, of August 29, 1995).
Applicable EPA Guidance
The Act specifies in section 182(f) that if one of the conditions
listed below is met, the new NOX requirements would not apply:
1. In any area, the net air quality benefits are greater without
NOX reductions from the sources concerned;
2. In a nontransport region, additional NOX reductions would
not contribute to ozone attainment in the nonattainment area; or
3. In a transport region, additional NOX reductions would not
produce net ozone benefits in the transport region.
In addition, section 182(f)(2) states that the application of the
new NOX requirements may be limited to the extent that any portion
of those reductions are demonstrated to result in ``excess reductions''
of NOX. The previously-described NOX provisions of the
conformity rules would also not apply in certain areas that are granted
a section 182(f) exemption (see amendment to transportation conformity
rule and associated explanation at 60 FR 44794). In addition, certain
NOX provisions of the I/M rule would not apply in an area that is
granted a section 182(f) exemption (see 57 FR 52989).
The EPA's Guideline for Determining the Applicability of Nitrogen
Oxides
[[Page 30025]]
Requirements Under Section 182(f) (December 1993), and 2 revisionary
memoranda signed by John S. Seitz, Director of the EPA Office of Air
Quality Planning and Standards, dated May 27, 1994 and February 8,
1995, describe how the EPA will interpret the NOX exemption
provisions of section 182(f). As described more fully in the Seitz
memoranda, petitions submitted under section 182(f)(3) are not required
to be submitted as State Implementation Plan (SIP) revisions.
Consequently, the State is not required under the Act to hold a public
hearing in order to petition for an area-wide NOX exemption
determination. Similarly, it is not necessary to have the Governor
submit the petition.
It should be noted with respect to the application of section
182(f) NOX waivers to certain NOx requirements of the
transportation conformity rule that the EPA has revised the
transportation conformity rule to ensure consistency with section
176(c) (see especially 60 FR 44790, 44794). This rule revision requires
areas subject to section 182(b)(1) (moderate and above, but not
marginal ozone nonattainment areas) to submit transportation conformity
NOX exemption requests as revisions to the SIP. Because Calcasieu
is classified as marginal, the revision addressing 182(b)(1) is not
applicable.
State Submittal
On October 28, 1994, the Louisiana Department of Environmental
Quality (LDEQ) submitted to the EPA a petition pursuant to section
182(f) which requests that the Calcasieu Parish nonattainment area be
exempted by the EPA from the NOX control requirements of section
182(f) of the Act. On December 21, 1995, the Governor of Louisiana
submitted a request for redesignation of the area to attainment which
contained additional information relevant to the State's NOX
exemption petition. The request for redesignation is currently under
review and will be addressed in a separate rulemaking action.
The State's NOX waiver petition was based on urban airshed
modeling (UAM). Subsequently, an analysis of ambient air quality data
(``clean air data'') indicates that the area is currently in attainment
of the ozone standard, prompting the state to submit a request that the
area be redesignated as attainment. The state's modeling and monitoring
data together demonstrate that additional NOX reductions would not
contribute to attainment of the ozone standard in the area. Overall,
this demonstration is consistent with the EPA's section 182(f)
guidance. The State's submission includes a letter from Gustave Von
Bodungen, Assistant Secretary of the LDEQ, to Jane N. Saginaw, Regional
Administrator of the EPA Region 6, and LDEQ's summary of the State's
photochemical grid modeling results. Further, the State's submission
requesting redesignation to attainment for Calcasieu Parish contains
quality-assured and quality-controlled data showing attainment of the
ozone standard. This data is for the three-year time period of 1993 to
1995.
Analysis of State Submission
The following items are the basis for the EPA's action proposing to
approve the State of Louisiana's section 182(f) NOX exemption
petition for the Calcasieu Parish ozone nonattainment area. Please
refer to the EPA's Technical Support Document and the State's submittal
for more detailed information.
A. Consistency With EPA Section 182(f) Guidance
Chapter 4 of the EPA's December 1993 section 182(f) guidance states
that the typical procedure for demonstrating that additional NOX
reductions would not contribute to ozone attainment is to utilize
photochemical grid modeling, such as UAM, to simulate conditions
resulting from three emission reduction scenarios: (1) Substantial VOC
reductions; (2) substantial NOX reductions; and (3) both VOC and
NOX reductions. To demonstrate that NOX reductions are not
beneficial to attainment, the area-wide predicted maximum 1-hour ozone
concentration for each day modeled under scenario (1) must be less than
or equal to that from scenarios (2) and (3) for the same day. Chapter 7
specifies that the application of UAM should be consistent with the
techniques specified in the EPA ``Guideline on Air Quality Models
(Revised),'' and ``Guideline for Regulatory Application of the UAM
(July 1991).'' This guidance specifically applies to moderate and
higher classification ozone nonattainment areas. As discussed in the
following sections, the EPA believes that the State's UAM demonstration
together with the ambient air quality data showing that the area is
attaining the ozone standard support the granting of an exemption from
the NOX requirements of section 182(f) of the CAA.
B. UAM Modeling Analysis
Although many ozone nonattainment areas used photochemical grid
modeling that was required by the Act for their attainment
demonstrations to apply for a NOX exemption as a marginal
nonattainment area, the Act did not require Calcasieu Parish to perform
such modeling for the purpose of an attainment demonstration. Thus,
where such an area can make an adequate showing of the effects of
NOX reductions with respect to attainment through alternative
means that are otherwise consistent with relevant guidance, EPA could
approve the area's demonstration.
The LDEQ submitted the results of a photochemical grid modeling
exercise that was carried out, in conjunction with Calcasieu's
attainment efforts, to determine if the Calcasieu area was the object
of ozone and precursor transport. Although the modeling utilized for
this exercise does not precisely replicate the procedures EPA guidance
suggests be used to support a 182(f) exemption petition. However, the
EPA believes the modeling analysis that was performed by LDEQ when
combined with the area's clean air data is comprehensive enough to use
in determining if the area should receive an exemption.
The LDEQ used UAM version IV, an EPA-approved photochemical grid
model, to develop the attainment demonstration for Calcasieu Parish.
The State's modeling activities were performed in accordance with the
EPA's ``Guideline for Regulatory Application of the Urban Airshed
Model.'' The discussion below summarizes the EPA's analysis on how the
State's modeling demonstrations complied with the EPA's guidance.
Please refer to the EPA's Technical Support Document for more detailed
information.
1. Episode Selection
The State used the EPA ``Guideline For Regulatory Application of
The Urban Airshed Model'' to select episodes for use in the Calcasieu
Parish UAM modeling exercises. Data from 1991 and 1992 were examined
for episodes which cover at least 48 consecutive hours and the worst-
case meteorological conditions. Three episodes from 1992 were selected
for the UAM analysis for the area.
Episodes selected for the Lake Charles modeling represent three
different meteorological regimes which can be characterized as
exhibiting potential for transport of pollutants from source areas near
Baton Rouge to the Lake Charles area, absence of transport potential,
and potential for transport from areas in Texas.
2. Model Domain and Meteorological Input
The LDEQ used a large modeling domain for Calcasieu Parish to
ensure that the model captured the movement
[[Page 30026]]
of VOC and NOX emissions generated by the surface sources. The
domain covers all or part of seven counties in Texas and eight parishes
in Louisiana. The domain modeled encompassed 32,000 square kilometers
of surface area. Meteorological data were collected from numerous
monitoring stations in the area. The LDEQ followed the methods
described in the UAM User's Guides to develop model inputs for wind
field data, mixing heights, temperature, and meteorological scalars for
the areas. Data was obtained from the Aerometric Information and
Retrieval System (AIRS), LDEQ data gathering activities, the Texas
Natural Resource Conservation Commission (TNRCC), and other direct
measurement techniques.
3. Boundary and Initial Conditions
LDEQ used the air quality data collected at monitoring stations
throughout the domain to construct the initial conditions of the model
exercise. Some default values were used where actual measurements were
not available. The applied boundary conditions were developed to
measure possible transport into the area from the east and west.
4. Emissions Inventory
The Calcasieu Parish modeling exercises were conducted using VOC
and NOX emission inventories compiled by survey and direct
measurement by the LDEQ. The modeling emissions inventories are
composed of point source, area, on-road mobile, off-road mobile, and
biogenic emissions. Where applicable, emissions were adjusted for
pertinent conditions related to the episode day to be modeled, thus
producing day-specific emissions. The EPA procedures for developing
episode-specific emission inventories were followed.
For Calcasieu Parish, the LDEQ developed three emission inventories
for all three episodes modeled. Although the projected inventory does
not reflect the attainment year for the area, the inventory projected
for 1993 does not differ significantly from 1991 and 1992 inventories.
Hence, the EPA believes the State's analysis still provides a valid
technical basis to evaluate the NOX contributions.
5. Model Performance
For all UAM activities, model performance is measured
quantitatively and qualitatively. The EPA has issued guidelines to
statistically measure accuracy. In addition, the EPA strongly
recommends that agencies submit graphical analysis, as a complement to
statistical analysis. While the EPA has recommended ranges for
statistical accuracy, there are no rigid criterion to accept or reject
a model exercise. Similarly, qualitative characterizations such as
good, satisfactory, fair, or poor describe the EPA's best professional
judgment about graphed model performance, but are not used to grade the
model exercise as acceptable or unacceptable.
Based on the above criteria, the Calcasieu model performance was
satisfactory. Both graphical and statistical performance measures were
employed for all meteorological episodes and monitoring networks.
Sensitivity analysis was also conducted to assess the stability of the
models across a range of possible input parameters.
For the August 20-21, 1991 episode, two of the three EPA-criterion
statistical measures obtained for the area are well within the EPA's
recommended ranges for good model performance (see Table 2 of the
technical support document). For the April 7-8, 1992 episode, the
statistical analysis for the primary day, April 8, indicates fair model
performance. The statistical measures were well within the EPA-
recommended ranges for the primary episode day. However, simulated
maximum concentrations are, in general, lower than observed peak
concentrations. For the April 20-21, 1992 episode, the model
performance is good. The statistical measures all fall within the EPA-
recommended ranges, and the temporal profiles of many sites were fairly
well simulated.
Both graphical and statistical performance measures were used to
evaluate the model. Using these analyses, the predicted results from
the model were compared to the observed results for each episode. These
analyses indicate that the model performed satisfactorily for the three
episodes used for the UAM demonstration.
6. Section 182(f) Demonstration
As noted previously, Calcasieu Parish is a marginal ozone
nonattainment area and EPA's NOX exemption guidance does not fully
address the requirements for less than moderate nonattainment areas
that were not required to utilize photochemical grid modeling for their
attainment demonstrations. For purposes of their 182(f) demonstration,
the LDEQ modeled the three episodes discussed above under a substantial
NOX reduction strategy only. The VOC-only and VOC plus NOX
reduction modeling strategies listed in EPA guidance were not
performed. EPA nonetheless feels that the State's UAM demonstration in
combination with the area's ambient air quality data provide adequate
justification for proposing approval of the NOX exemption
petition. The justification related to clean air quality data is
discussed in Section C of this notice.
The LDEQ's modeling considered across-the-board reductions in the
projected NOX point source emission inventories. The State modeled
50 and 25 percent emission reductions in the NOX point sources
inventory for each of the three episode-days. This generated six
different sensitivity tests to gauge the direction and intensity of the
atmospheric reaction to NOX reductions. The State modeled 25
percent NOX reductions to characterize the effect of NOX
control strategies that could have a more immediate impact. For all
three episodes at 25 and 50 percent reductions, the results for the
controlling day show that domain-wide predicted maximum ozone
concentrations increase as the NOX reductions are applied.
As explained in the EPA's 182(f) guidance, the EPA believes it is
appropriate to focus this analysis on the area-wide maximum 1-hour
predicted ozone concentration, since this value is critical for the
typical attainment demonstration. For all three episodes, the
controlling day showed that the domain-wide predicted maximum ozone
concentrations are lower without NOX reductions. The model results
lead to the conclusion that NOX reductions would increase the
domain-wide maximum ozone concentrations. Please refer to the EPA's
Technical Support Document for more detailed information.
C. Clean Data Eligibility for NOX Exemption
On December 21, 1995, the EPA received a request from the State to
redesignate the Calcasieu area to attainment. The request for
redesignation is based upon three years of quality-assured monitoring
data that show no violations of the ozone standard. The data that
constitute the substance of the redesignation request is available to
the EPA through the Aerometric Information and Retrieval System (AIRS).
Since the data were not available when the State initially requested a
NOX exemption, the State chose to base its waiver request on
modeling data. Now that monitoring data are available, the EPA believes
it is appropriate to consider the air quality data in conjunction with
the modeling information contained in the State's NOX exemption
petition in determining whether to approve the State's NOX
exemption request. Moreover, since the
[[Page 30027]]
EPA's NOX guidance provides for granting NOX exemptions based
solely on clean air data, the State could have resubmitted a request
for a NOX waiver based only on clean data. However, rather than
having the state resubmit an additional petition, the EPA decided that
the air quality data and modeling information already before the
Agency, when analyzed in combination, constituted an adequate basis to
propose approval of the waiver request. The EPA will act upon the
State's request for redesignation in a subsequent notice.
An EPA review of the AIRS ambient air quality data concluded that
no violations of the ozone standard occurred in the area from 1993
through 1995. Since the absence of such violations over a 3-year period
indicates that an area is in attainment of the ozone standard, this
data provides further support for the conclusion that the section
182(f) test is met. This is true because for an area, like Calcasieu,
that is already attaining it is clear that additional reductions of
oxides of nitrogen would not contribute to ozone attainment in that
area. ``Guideline for Determining the Applicability of Nitrogen Oxide
Requirements Under section 182(f)'' December 1993. See the TSD for
additional information regarding the area's air quality data.
Proposed Rulemaking Action
In this action, the EPA proposes to approve the 182(f) NOX
exemption petition submitted by the State of Louisiana for the
Calcasieu Parish ozone nonattainment area. The EPA believes that all
section 182(f) exemptions that are approved should be approved only on
a contingent basis. As described in the EPA's NOX Supplement to
the General Preamble (57 FR 55628, November 25, 1992), the EPA would
rescind a NOX exemption in cases where NOX reductions were
later found to be beneficial in the area's attainment plan. That is, a
modeling based exemption would last for only as long as the area's
modeling continued to demonstrate attainment without the additional
NOX reductions required by section 182(f). Similarly, if an area
that received an exemption based on clean air quality data which shows
that the area is attaining the ozone standard experiences a violation
prior to redesignation of the area to attainment, the exemption would
no longer be applicable.
If the EPA later determines, based on new photochemical grid
modeling that NOX reductions would be beneficial in Calcasieu
Parish, or because of an ozone violation, the area would be removed
from exempt status and would be required to adopt the applicable
NOX provisions of the NSR and conformity rules except to the
extent that NOX reductions are shown to be ``excess reductions.''
In the rulemaking action which removes the exempt status, the EPA would
provide specific information regarding the reapplication of the NSR
rules and the conformity rules.
The subsequent modeling analyses mentioned above need not be
limited to the purpose of demonstrating attainment as required by
section 182(c)(2)(A). For example, an area might want to consider a
strategy that phases in NOX reductions only after certain VOC
reductions are implemented. As improved emission inventories and
ambient data become available, areas may choose to remodel. In
addition, alternative control strategy scenarios might be considered in
subsequent modeling analyses in order to improve the cost-effectiveness
of the attainment plan.
In summary, the UAM modeling results together with ambient air
quality data showing no violations of the ozone standard during the
last 3 years in Calcasieu Parish support the conclusion that additional
NOX reductions would not contribute to attainment of the ozone
standard in this area. The EPA therefore proposes to approve a NOX
exemption for the Calcasieu Parish area. Approval of this petition
means that the area is exempt from new source review for sources of
NOX, the NOX requirements of the general conformity rule, and
the NOX ``build/no build'' provisions of the transportation
conformity rule (see 58 FR 63214 and 58 FR 62188). This exemption will
remain effective for only as long as modeling continues to show that
NOX control activities would not be beneficial in the Calcasieu
Parish nonattainment area, and/or so long as, prior to redesignation to
attainment, the area does not violate the ozone standard.
Request for Public Comments
The EPA requests comments on all aspects of this proposal. As
indicated at the outset of this action, the EPA will consider any
comments received by July 15, 1996.
Regulatory Process
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et. seq., the
EPA must prepare a regulatory flexibility analysis assessing the impact
of any proposed or final rule on small entities (5 U.S.C. 603 and 604).
Alternatively, the EPA may certify that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small not-for-profit
enterprises, and government entities with jurisdiction over populations
of less than 50,000.
Approvals of NOX exemption petitions under section 182(f) of
the CAA do not create any new requirements. Therefore, because the
Federal approval of the petition does not impose any new requirements,
the EPA certifies that it does not have a significant impact on
affected small entities. Moreover, due to the nature of the Federal-
State relationship under the CAA, preparation of a regulatory
flexibility analysis would constitute Federal inquiry into the economic
reasonableness of State action. The CAA forbids the EPA to base its
actions concerning SIP's on such grounds [Union Electric Co. v. U.S.
E.P.A. , 427 U.S. 246, 256-66 (S. Ct. 1976); 42 U.S.C. 7410 (a)(2)].
The Office of Management and Budget has exempted this action from
review under Executive Order 12866.
Unfunded Mandates
Under sections 202, 203, and 205 of the Unfunded Mandates Reform
Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22,
1995, EPA must undertake various actions in association with proposed
or final rules that include a Federal mandate that may result in
estimated costs of $100 million or more to the private sector, or to
State, local, or tribal governments in the aggregate.
Through submission of this state implementation plan or plan
revision, the State and any affected local or tribal governments have
elected to adopt the program provided for under section 110 of the
Clean Air Act. These rules may bind State, local and tribal governments
to perform certain actions and also require the private sector to
perform certain duties. To the extent that the rules being approved by
this action will impose no new requirements, such sources are already
subject to these regulations under State law. Accordingly, no
additional costs to State, local, or tribal governments, or to the
private sector, result from this action. EPA has also determined that
this action does not include a mandate that may result in estimated
costs of $100 million or more to State, local, or tribal governments in
the aggregate or to the private sector.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Intergovernmental relations, Nitrogen dioxide, Ozone, Volatile organic
compounds.
Authority: 42 U.S.C. 7401-7671q.
[[Page 30028]]
Dated: June 7, 1996.
Carol M. Browner,
Administrator.
[FR Doc. 96-15034 Filed 6-12-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-15027 Privacy Act Policy and Procedures
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30009-30012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15027]
=======================================================================
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ARMS CONTROL AND DISARMAMENT AGENCY
22 CFR Part 603
Privacy Act Policy and Procedures
AGENCY: Arms Control and Disarmament Agency.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The United States Arms Control and Disarmament Agency (ACDA)
proposes to revise and restate in their entirety its rules that govern
the means by which individuals can examine and request correction of
ACDA records containing personal information. By clarifying these
rules, this proposal will help the public interact better with ACDA and
is part of ACDA's effort to update and streamline its regulations. ACDA
invites comments from interested groups and members of the public on
the proposed regulations.
DATES: To be considered, comments must be delivered by mail or in
person to the address, or faxed to the telephone number, listed below
by 5 p.m. on Friday, July 19, 1996.
ADDRESSES: Comments should be directed to the Office of the General
Counsel, United States Arms Control and Disarmament Agency, Room 5635,
320 21st Street, NW., Washington, DC 20451; FAX (202) 647-0024.
Comments will be available for inspection between 8:15 a.m. and 5 p.m.
at the same address.
FOR FURTHER INFORMATION CONTACT:
Frederick Smith, Jr., United States Arms Control and Disarmament
Agency, Room 5635, 320 21st Street, NW., Washington, DC 20451,
telephone (202) 647-3596.
SUPPLEMENTARY INFORMATION: ACDA proposes to update, clarify,
reorganize, and streamline its rules implementing the Privacy Act, as
amended. In addition to containing internal policies and procedures,
these regulations set forth procedures whereby an individual can
determine if a system of records maintained by ACDA contains records
pertaining to the individual and can request disclosure and amendment
of such records. These regulations also set forth the bases for denying
amendment requests and the procedures for appealing such denials. ACDA
does not intend the proposed rules to materially affect current ACDA
standards, policies, or practices.
Regulatory Flexibility Act Certification
It is hereby certified that the proposed rule will not have a
significant economic impact on a substantial number of small entities.
Accordingly, a regulatory flexibility analysis is not required.
Executive Order 12866 Determination
ACDA has determined that the proposed rule is not a significant
regulatory action within the meaning of section 3(f) of that Executive
Order.
Paperwork Reduction Act Statement
The proposed rule is not subject to the provisions of the Paperwork
Reduction Act because it does not contain any information collection
requirements within the meaning of that Act.
Unfunded Mandates Act Determination
ACDA has determined that the proposed rule will not result in
expenditures by state, local, and tribal governments, or by the private
sector, of more than $100 million in any one year. Accordingly, a
budgetary impact statement is not required under section 202 of the
Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532.
List of Subjects in 22 CFR Part 603
Privacy Act.
The Proposed Regulations
ACDA proposes to revise 22 CFR part 603 to read as follows:
PART 603--PRIVACY ACT POLICY AND PROCEDURES
Sec.
603.1 Purpose and scope.
603.2 Definitions.
603.3 Policy.
603.4 Requests for determination of existence of records.
603.5 Requests for disclosure to an individual of records
pertaining to the individual.
603.6 Requests for amendment of records.
603.7 Appeals from denials of requests.
603.8 Exemptions.
603.9 New and amended systems of records.
603.10 Fees.
Authority: 5 U.S.C. 552a; 22 U.S.C. 2581; and 31 U.S.C. 9701.
Sec. 603.1 Purpose and scope.
This part 603 contains the regulations of the U.S. Arms Control and
Disarmament Agency implementing the provisions of the Privacy Act of
1974, 5 U.S.C. 552a. In addition to containing internal policies and
procedures, these regulations set forth procedures whereby an
individual can determine if a system of records maintained by the
Agency contains records pertaining to the individual and can request
disclosure and amendment of such records. These regulations also set
forth the bases for denying amendment requests and the procedures for
appealing such denials.
Sec. 603.2 Definitions.
As used in this part:
(a) Act means the Privacy Act of 1974, 5 U.S.C. 552a.
(b) ACDA and Agency mean the U.S. Arms Control and Disarmament
Agency.
(c) Privacy Act Officer means the Agency official who receives and
acts upon inquiries, requests for access and requests for amendment.
(d) Deputy Director means the Deputy Director of the Agency.
(e) Individual means a citizen of the United States or an alien
lawfully admitted for permanent residence;
(f) Maintain includes maintain, collect, use, or disseminate;
(g) Record means any item, collection, or grouping of information
about an individual that is maintained by an agency, including, but not
limited to, education, financial transactions, medical history, and
criminal or employment history and that contains the name of, or the
identifying number, symbol, or other identification particularly
assigned to, the individual, such as a finger or voice print or a
photograph;
(h) System of records means a group of any records under the
control of any agency from which information is retrieved by the name
of the individual or by some identifying number, symbol, or other
identification particularly assigned to the individual;
(i) Statistical record means a record in a system of records
maintained for statistical research or reporting purposes only and not
used in whole or in part in making any determination about an
identifiable individual, except as provided by section 8 of title 13
U.S.C.; and
(j) Routine use means, with respect to the disclosure of a record,
the use of such record for a purpose which is compatible with the
purpose for which it was collected.
[[Page 30010]]
Sec. 603.3 Policy.
(a) It is the policy of the Agency that only such information about
an individual as is relevant and necessary to accomplish a purpose of
the Agency required to be accomplished by statute or by executive order
of the President shall be maintained in an Agency record. No
information about the political or religious beliefs and activities of
an individual will be maintained within such records unless
specifically authorized by statute or by the subject individual, or
unless pertinent to and within the scope of a law enforcement activity.
(b) The Agency will not disclose any record that is contained in a
system of records to any person, or to another agency, except pursuant
to a written request by, or with the prior written consent of, the
individual to whom the record pertains, unless disclosure of the record
is:
(1) To those officers and employees of the Agency who have a need
for the record in the performance of their duties;
(2) Required under the Freedom of Information Act, as amended (5
U.S.C. 552);
(3) For a routine use, notice of which has been published in
accordance with the Act;
(4) To the Bureau of the Census for purposes of planning or
carrying out a census or survey or related activity pursuant to the
provisions of title 13 U.S.C.;
(5) To a recipient who has provided the Agency with advance
adequate written assurance that the record will be used solely as a
statistical research or reporting record, and the record is to be
transferred in a form that is not individually identifiable;
(6) To the National Archives of the United States as a record that
has sufficient historical or other value to warrant its continued
preservation by the United States Government, or for evaluation by the
Administrator of General Services or his/her designee to determine
whether the record has such value;
(7) To another agency or to an instrumentality of any governmental
jurisdiction within or under the control of the United States for a
civil or criminal law enforcement activity if the activity is
authorized by law, and if the head of the agency or instrumentality has
made a written request to the Agency that maintains the record
specifying the particular portion desired and the law enforcement
activity for which the record is sought;
(8) To a person pursuant to a showing of compelling circumstances
affecting the health or safety of an individual if upon such disclosure
notification is transmitted to the last known address of such
individual;
(9) To either House of Congress, or, to the extent of matter within
its jurisdiction, any committee or subcommittee thereof, any joint
committee of Congress or subcommittee of any such joint committee;
(10) To the Comptroller General, or any authorized representatives,
in the course of the performance of the duties of the General
Accounting Office; or
(11) Pursuant to the order of a court of competent jurisdiction.
(c) Except for disclosures of information to Agency employees
having need for the information in the official performance of their
duties or required under the provisions of the Freedom of Information
Act, an accurate accounting of each disclosure will be made and
retained for five years after the disclosure or for the life of the
record, whichever is longer. The accounting will include the date,
nature, and purpose of each disclosure and the name and address of the
person or agency to whom the disclosure is made. Each such disclosure,
unless made to agencies engaged in law enforcement activities in
accordance with paragraph (b)(7) of this section, will be made
available to the individual upon request.
(d) To the greatest extent practicable, information that may result
in an adverse determination about an individual shall be collected from
that individual, and the individual will be informed of the purposes
for which the information will be used and any rights, benefits, and
obligations with respect to supplying the data.
(e) The Agency shall ensure that all records that are used by the
Agency to make a determination about any individual are maintained with
such accuracy, relevance, timeliness and completeness as is reasonably
necessary to assure fairness to the individual. Whenever information
about an individual contained in an Agency record is used or disclosed,
the custodian of the system of records in which the record is located
will make every effort to ensure that it is accurate, relevant, timely
and complete.
(f) The Agency shall establish appropriate administrative,
technical, and physical safeguards to ensure that records are disclosed
only to those who are authorized to have access to them and to protect
against any anticipated threats or hazards to their security or
integrity that would result in substantial harm, embarrassment,
inconvenience, or unfairness to any individual on whom information is
maintained.
(g) Agency records pertaining to an individual shall be made
available to that individual to the greatest extent possible.
(h) No lists of names and addresses will be rented or sold unless
such action is specifically authorized by law, provided that names and
addresses otherwise permitted to be made public will not necessarily be
withheld when requested.
(i) All requests for information under the Privacy Act received by
the Agency will be acted upon as promptly as possible.
Sec. 603.4 Requests for determination of existence of records.
Any individual desiring to know whether any system of records
maintained by the Agency contains a record pertaining to the individual
shall send a written request to the Privacy Act Officer, U.S. Arms
Control and Disarmament Agency, 320 21st Street, NW., Washington, DC
20451. All requests for determination of the existence of records
should include sufficient information to identify the system of
records, such as its name or Federal Register identifier number if
known, in addition to such identifying information as the individual's
name and date of birth.
Sec. 603.5 Requests for disclosure to an individual of records
pertaining to the individual.
(a) An individual desiring access to or copies of records
maintained by the Agency shall send a written request to the Privacy
Act Officer, U.S. Arms Control and Disarmament Agency, 320 21st Street,
NW., Washington, DC 20451. All requests for disclosure to an individual
of records pertaining to that individual should include sufficient
information to identify the record or system of records such as its
name or Federal Register identifier number if known, in addition to
such identifying information as the individual's name and date of
birth.
(b)(1) Except as provided in paragraph (b)(2) of this section:
(i) If the individual making a written request is not personally
known to the Privacy Act Officer or to other Agency personnel
processing the request, the written request must include satisfactory
evidence that the requester is in fact the individual to whom the
requested records pertain. For this purpose, the Agency normally will
be satisfied by the receipt of the requester's statement of identity
made under penalty of perjury.
(ii) If the individual making a request in person is not personally
known to the
[[Page 30011]]
Privacy Act Officer or to other Agency personnel processing the
request, the requester must present two identification documents (at
least one of which must bear the requester's picture) containing the
individual's signature and other suitable evidence of identity.
Examples of acceptable evidence are a driver's license, passport,
employee identification card, or military identification card.
(2) Evidence that the requester is in fact the individual to whom
the requested records pertain is not required for information that
would be required to be made available to a third party under the
Freedom of Information Act (5 U.S.C. 552).
(c)(1) Access to or copies of records requested pursuant to this
section shall be furnished except as provided in paragraph (c)(3) of
this section:
(i) To an individual making a request in person, upon verification
of personal identity as required in paragraph (b) of this section, to
that individual, and if the individual is accompanied by any other
person, upon the individual's request, to that person, except that the
Agency may require the individual to furnish a written statement
authorizing disclosure of the individual's record in the presence of
the accompanying person.
(ii) To an authorized representative or designee of an individual,
if the individual has provided verification of personal identity as
required in paragraph (b) of this section, and submits a signed,
notarized statement authorizing and consenting to access or disclosure
to the representative or designee.
(iii) To a physician authorized by a signed, notarized statement
made by the individual making the request, in the event that the
records requested are medical records of such a nature that the Privacy
Act Officer has determined that the release of such medical information
directly to the requester could have an adverse effect on the
requester. The individual making the request must also provide
verification of personal identity as required in paragraph (b) of this
section.
(2) Access to records or copies of records requested shall be
furnished as promptly as possible.
(3) Access to or copies of records requested pursuant to this
section shall not be granted if:
(i) The individual making the request does not comply with the
requirements for verification of personal identity as required in
paragraph (b) of this section; or
(ii) The records are exempt from disclosure pursuant to Sec. 603.8.
Sec. 603.6 Requests for amendment of records.
(a) An individual may request amendment of a record pertaining to
that individual by sending a written request to the Privacy Act
Officer, U.S. Arms Control and Disarmament Agency, 320 21st Street,
NW., Washington, DC 20451. The request should identify the record
sought to be amended, specify the precise nature of the requested
amendment, and state why the requester believes that the record is not
accurate, relevant, timely or complete.
(b) Not later than ten (10) days after receipt of such request
(excluding Saturdays, Sundays and legal holidays), the Privacy Act
Officer will promptly:
(1) Make any correction of any portion of the record pertaining to
the individual which the Agency considers appropriate; and
(2) Inform the requester in writing of the action taken by the
Agency, of the reasons for refusing to comply with any portion of the
request, and of the procedures established by the Agency to consider
requests for review of such refusals.
(c) The Privacy Act Officer will refuse to amend a record if the
information therein is deemed by the Agency:
(1) To be relevant and necessary to accomplish a purpose of the
Agency required to be accomplished by statute or by executive order of
the President; and
(2) To be maintained with such accuracy, relevance, timeliness and
completeness as is reasonably necessary to assure fairness to the
individual in making any determination about the individual; and
(3) Not to describe how the individual exercises rights guaranteed
by the First Amendment unless expressly authorized by statute or by the
individual about whom the record is maintained.
(d) When the Privacy Act Officer agrees to amend a record, written
notice that the record has been amended and the substance of the
amendment will be sent to the last known address of all previous
recipients of that record shown in Agency's Privacy Act Requests File.
Sec. 603.7 Appeals from denials of requests.
(a) An individual who disagrees with the refusal of the Privacy Act
Officer to disclose or amend a record may request a review of such
refusal within 30 days of receipt of notice of the refusal. Such
request should be addressed to the Deputy Director, U.S. Arms Control
and Disarmament Agency, 320 21st Street, NW., Washington, DC 20451, and
should include a copy of the written request that was refused, a copy
of the denial complained of, and reasons for appeal from the denial.
(b) Review shall be made by the Deputy Director on the submitted
record. No personal appearance, oral argument, or hearing shall be
permitted.
(c) Review will be completed and a final determination made not
later than 30 days (excluding Saturdays, Sundays and legal holidays)
from the date on which the request for such review is received. This
30-day limitation may be extended, at the discretion of the Agency for
good cause shown. The requester will be notified in writing of the
Agency's final determination.
(d) If, after completion of the review, the Deputy Director also
refuses to disclose or amend the record as requested, the notice to the
individual will advise the individual of the right to file with the
Agency a concise statement setting forth the reasons for disagreement
with this refusal.
(e) When an individual has filed with the Agency a statement of
disagreement following a refusal to amend the record as requested, the
Agency will clearly note that portion of the record that is disputed
and will send copies of the statement of disagreement to the last known
address of all previous recipients of the disputed record shown in the
Agency's Privacy Act Requests File.
Sec. 603.8 Exemptions.
(a) As authorized by the Act, the following categories of records
are hereby exempted from the requirements of sections (c)(3), (d),
(e)(4)(G), (H) and (I), and (f) of 5 U.S.C. 552a, and will not be
disclosed to the individuals to which they pertain:
(1) System of Records of ACDA-4--Statements by Principals during
the Strategic Arms Limitation Talks, Mutual Balanced Force Reduction
negotiations, and the Standing Consultative Committee. This system
contains information classified pursuant to Executive Order 12958 that
is exempt from disclosure by the Act (5 U.S.C. 522a(k)(1)) in that
disclosure could damage national security.
(2) System of Records ACDA-3--Security Records. This system
contains investigatory material compiled for law enforcement purposes
which is exempt from disclosure by the Act (5 U.S.C. 522a(k)(2)):
Provided, however, that if any individual is denied any right,
privilege, or benefit to which the individual would otherwise be
entitled by Federal law, or for which the individual would otherwise be
eligible, as a result of the maintenance of such material, such
material will be provided to such individual, except to the extent that
disclosure of such material would
[[Page 30012]]
reveal the identity of a source who furnished information to the
Government under an express promise that the identity of the source
would be held in confidence, or, if furnished to the Government prior
to September 27, 1975, under an implied promise that the identity of
the source would be held in confidence.
(3) Systems of Records ACDA-3--Security Records. This system
contains investigatory materials compiled solely for the purpose of
determining suitability, eligibility, or qualifications for Federal
civilian employment, military service, Federal contracts, or access to
classified information which is exempt from disclosure by the Act (5
U.S.C. 552a(k)(5)), but only to the extent that disclosure of such
material would reveal the identity of a source who furnished
information to the Government under an express promise that the
identity of the source would be held in confidence, or, if furnished to
the Government prior to September 27, 1975, under an implied promise
that the identity of the source would be held in confidence.
(b) Nothing in these regulations shall be construed to allow an
individual access to:
(1) Any information compiled in reasonable anticipation of a civil
action or proceeding; or
(2) Testing or examination material used solely to determine
individual qualification for appointment or promotion in the Federal
Service, the disclosure of which would compromise the objectivity or
fairness of the testing or examination process.
Sec. 603.9 New and amended systems of records.
(a) The Agency shall provide adequate advance notice to Congress
and to the Office of Management and Budget of any proposal to establish
or alter any system of records. Such notice shall be in a form
consistent with guidance on content, format and timing issued by the
Office of Management and Budget.
(b) The Agency shall publish by August 31 of each year in the
Federal Register a notice of the existence and character of each system
of records maintained by the Agency. Such notice shall be consistent
with guidance on format contained in the Act and issued by the General
Services Administration. At least 30 days before any new or changed
routine use of records contained within a system of records can be
made, the Agency shall publish notice of such new or changed use in the
Federal Register.
Sec. 603.10 Fees.
Fees to be charged in responding to requests under the Privacy Act
shall be, to the extent permitted by paragraph (f)(5) of the Act, the
rates established in title 22 CFR 602.20 for responding to requests
under the Freedom of Information Act.
Dated: May 30, 1996.
Mary Elizabeth Hoinkes,
General Counsel.
[FR Doc. 96-15027 Filed 6-12-96; 8:45 am]
BILLING CODE 6820-32-M
Complete official Federal Register PDF
FR Doc. 96-15015 Migratory Bird Hunting; Supplemental Proposals for Migratory Game Bird Hunting Regulations; Notice of Meetings.
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30114-30118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15015]
[[Page 30113]]
_______________________________________________________________________
Part II
Department of the Interior
_______________________________________________________________________
Fish and Wildlife Service
_______________________________________________________________________
50 CFR Part 20
Supplemental Proposals for Migratory Game Bird Hunting Regulations;
Notice of Meetings; Proposed Rule
Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 /
Proposed Rules
[[Page 30114]]
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 20
RIN: 1018-AD69
Migratory Bird Hunting; Supplemental Proposals for Migratory Game
Bird Hunting Regulations; Notice of Meetings.
AGENCY: Fish and Wildlife Service, Interior.
ACTION: Proposed rule; supplemental.
-----------------------------------------------------------------------
SUMMARY: The U.S. Fish and Wildlife Service (hereinafter the Service)
proposed in an earlier document to establish annual hunting regulations
for certain migratory game birds for the 1996-97 hunting season. This
supplement to the proposed rule provides the regulatory schedule,
announces the Service Migratory Bird Regulations Committee and Flyway
Councils meetings, and describes proposed changes from 1995-96 hunting
regulations.
DATES: The Service Migratory Bird Regulations Committee will consider
and develop proposed regulations for early-season migratory bird
hunting on June 25, 26, and 27, and for late-season migratory bird
hunting on July 31, August 1, and 2. The Service will hold public
hearings on proposed early- and late-season frameworks at 9:00 a.m. on
June 27 and August 2, 1996, respectively. The comment period for
proposed migratory bird hunting-season frameworks for Alaska, Hawaii,
Puerto Rico, the Virgin Islands, and other early seasons will end on
July 25, 1996. The comment period for late-season proposals will end on
September 3, 1996.
ADDRESSES: The Service Migratory Bird Regulations Committee will meet
in room 200 of the U.S. Fish and Wildlife Service's Arlington Square
Building, 4401 N. Fairfax Drive, Arlington, Virginia. The Service will
hold public hearings in the Auditorium of the Department of the
Interior Building, 1849 C Street, NW., Washington, DC. Parties should
submit written comments on the proposals and/or a notice of intent to
participate in either hearing to the Chief, Office of Migratory Bird
Management, U.S. Fish and Wildlife Service, Department of the Interior,
ms 634--ARLSQ, 1849 C Street, NW., Washington, DC 20240. The public may
inspect comments during normal business hours in room 634, ARLSQ
Building, 4401 N. Fairfax Drive, Arlington, Virginia.
FOR FURTHER INFORMATION CONTACT: Paul R. Schmidt, Chief, Office of
Migratory Bird Management, U.S. Fish and Wildlife Service, (703) 358-
1714.
SUPPLEMENTARY INFORMATION:
Regulations Schedule for 1996
On March 22, 1996, the Service published in the Federal Register
(61 FR 11992) a proposal to amend 50 CFR part 20. The proposal dealt
with the establishment of seasons, limits, and other regulations for
migratory game birds under Secs. 20.101 through 20.107, 20.109, and
20.110 of subpart K. This document is the second in a series of
proposed, supplemental, and final rules for migratory game bird hunting
regulations. The Service will propose early-season frameworks in late
June and late-season frameworks in early August. The Service will
publish final regulatory frameworks for early seasons on or about
August 14, 1996, and those for late seasons on or about September 23,
1996.
On June 27, 1996, the Service will hold a public hearing in
Washington, DC, to review the status of migratory shore and upland game
birds and waterfowl hunted during early seasons and the recommended
hunting regulations for these species.
On August 2, 1996, the Service will hold a public hearing in
Washington, DC, to review the status of waterfowl and recommended
hunting regulations for regular waterfowl seasons, and other species
and seasons not previously discussed at the June 27 public hearing.
Announcement of Service Migratory Bird Regulations Committee
Meetings
The June 25 meeting will review information on the current status
of migratory shore and upland game birds and develop 1996-97 migratory
game bird regulations recommendations for these species plus
regulations for migratory game birds in Alaska, Puerto Rico, and the
Virgin Islands; special September waterfowl seasons in designated
States; special sea duck seasons in the Atlantic Flyway; and extended
falconry seasons. In addition, the Service will review and discuss
preliminary information on the status of waterfowl as it relates to the
development of the regulatory packages for the 1996-97 regular
waterfowl seasons. The June 26 meeting will ensure that the Service
develops its regulations recommendations in full consultation.
The July 31 meeting will review information on the current status
of waterfowl and develop 1996-97 migratory game bird regulations
recommendations for regular waterfowl seasons and other species and
seasons not previously discussed at the early season meetings. The
August 1 meeting will ensure that the Service develops its regulations
recommendations in full consultation.
In accordance with Departmental policy on meetings of the Service
Migratory Bird Regulations Committee attended by any person outside the
Department, these meetings will be open to public observation. Members
of the public may submit written comments on the matters discussed to
the Director.
Announcement of Flyway Council Meetings
On July 27-29, 1996, Service representatives will attend the joint
and individual Flyway Council meetings at the Adams Mark Hotel in
Kansas City, Missouri. Although specific agendas are not yet available,
these meetings will begin the afternoon of the 27th and close the
afternoon of the 29th.
Review of Public Comments
This supplemental rulemaking describes recommended changes based on
the preliminary proposals published in the March 22, 1996, Federal
Register. This supplement includes only those recommendations requiring
either new proposals or substantial modification of the preliminary
proposals. This supplement does not include recommendations that
support or oppose but do not recommend alternatives to the preliminary
proposals. The Service will consider these comments later in the
regulations-development process. The Service will publish responses to
proposals, written comments, and public-hearing testimony when it
develops final frameworks.
The Service seeks additional information and comments on the
recommendations in this supplemental proposed rule. The Service will
consider all recommendations and associated comments during development
of the final frameworks.
New proposals and modifications to previously described proposals
are discussed below. Wherever possible, they are discussed under
headings corresponding to the numbered items in the March 22, 1996,
Federal Register.
1. Ducks
Categories used to discuss issues related to duck harvest
management are: (A) Harvest Strategy Considerations, (B) Framework
Dates, (C) Season Length, (D) Closed Seasons, (E) Bag Limits, (F) Zones
and Split Seasons, and (G)
[[Page 30115]]
Special Seasons/Species Management. Categories containing substantial
recommendations are discussed below.
A. Harvest Strategy Considerations
Council Recommendations: In the March 22, 1996, Federal Register,
the Service reported on recommendations made by an Adaptive Harvest
Management (AHM) technical working group for the 1996 regulatory
process. Comprised of representatives from the Service and the four
Flyway Councils, the working group was established in 1992 to develop
recommendations for improving the regulation of duck harvests. The
working group's function is, however, strictly technical in nature.
All four Flyways continued to express support for the AHM approach
to setting duck hunting regulations. However, the Mississippi, Central,
and Pacific Flyway Councils recommended some modifications to the
specific regulatory packages recommended by the working group, and
these modifications are identified below under ``Season Length,'' ``Bag
Limits,'' and ``Special Seasons/Species Management.''
The Atlantic Flyway Council endorsed the AHM technical working
group's recommendations regarding harvest-management objectives, use of
mid-continent mallard population models, and regulatory options for the
Atlantic Flyway in 1996.
The Upper-Region Regulations Committee of the Mississippi Flyway
Council expressed support for no more than three regulations packages,
but recommended a harvest-management objective (objective function)
that achieves an equal balance between harvest and a breeding
population objective of 8.1 million mallards.
The Lower-Region Regulations Committee of the Mississippi Flyway
Council requested the working group investigate the addition of both a
more conservative and a more liberal regulatory package to the group of
regulations packages offered for the 1997-98 hunting season.
The Central Flyway Council supported the working group's
recommendation to modify the objective function so that it continue to
reflect the broad resource values of the population goals of the North
American Waterfowl Management Plan (NAWMP), but commented that many
technical issues will need to be resolved before AHM will be fully
operational for multiple stocks of ducks.
The Pacific Flyway Council endorsed the AHM working group's 1996
duck regulations approach and, with the exception of a harvest strategy
for pintails, recommendations for the 1996 regulations process.
B. Framework Dates
Council Recommendations: The Lower-Region Regulations Committee of
the Mississippi Flyway Council recommended the AHM technical working
group investigate the impacts of a January 31 framework closing date.
C. Season Length
Council Recommendations: In the regulations packages recommended
for 1996-97, the Upper- and Lower-Region Regulations Committees of the
Mississippi Flyway Council recommended the season length in the
``liberal'' package be 51 days instead of 50 days. The Central Flyway
Council recommended the season length in the ``liberal'' package be 67
days instead of 60 days.
D. Bag Limits
Council Recommendations: The Upper- and Lower-Region Regulations
Committees of the Mississippi Flyway Council and the Central Flyway
Council recommended the redhead daily bag limit in the ``liberal''
package be 2 birds instead of 1.
The Lower-Region Regulations Committee of the Mississippi Flyway
Council also recommended the overall daily bag limit in the ``liberal''
package be 6 birds instead of 5, and within this overall limit, the
daily bag limit for mottled ducks be 4 instead of 3; and the limit for
ringnecks, scaup, goldeneyes, and buffleheads be 4 instead of 5. Limits
for black ducks, pintails, wood ducks, and canvasbacks would be the
same as in 1995.
Written Comments: The Massachusetts Division of Fisheries and
Wildlife recommended any ``liberal'' regulatory package delete the hen
mallard restriction in the Atlantic Flyway.
E. Zones and Split Seasons
In 1990, the Service established guidelines for the use of zones
and split seasons for duck hunting (Federal Register 55 FR 38901).
These guidelines were based upon a cooperative review and evaluation of
the historical use of zone/split options. The Service reiterated 1977
criteria that the primary purpose of these options would be to provide
more equitable distribution of harvest opportunity for hunters
throughout a State. In 1977, the Service had also stated that these
regulations should not substantially change the pattern of harvest
distribution among States within a Flyway, nor should these options
detrimentally change the harvest distribution pattern among species or
populations at either the State or Flyway level. The 1990 review did
not show that the proliferation of these options had increased harvest
pressure; however, the ability to detect the impact of zone/split
configurations was poor because of poorly chosen response variables,
the lack of statistical tests to differentiate between real and
perceived changes, and the absence of adequate experimental controls.
Therefore, the 1990 strategy intended to provide a framework for
controlling the proliferation of changes in zone/split options and
limited changes to 5-year intervals. The first open season for changes
was in 1991 and the second occurs this year when zone/split
configurations will be established for the 1996-2000 period.
Council Recommendations: The Flyway Councils made several
recommendations on the Service's proposed guidelines on the use of
zones and split seasons for duck hunting. The Service published these
guidelines in the March 22, 1996, Federal Register.
The Central Flyway Council recommended non-contiguous zones be
allowed when supported by adequate justification. The Council also made
several recommendations regarding the use of additional days in the
High Plains Management Unit. The Council recommended the restrictions
``must be consecutive'' and ``after the regular duck season'' be
removed from the proposed guidelines. Further, the Council recommended
additional days in the management unit be restricted to one split
(i.e., two segments).
The Pacific Flyway Council recommended the guidelines for zones
allow identical season dates and/or different zoning configurations
with different regulatory packages.
Regarding Flyway Council recommendation for specific changes
requested by States, the Atlantic Flyway Council recommended the State
of Maine be granted a waiver for its proposed zoning option for 1996-
2000. The Upper-Region Regulations Committee of the Mississippi Flyway
Council recommended the Service approve changes to zone-boundary
configurations proposed by Illinois, Indiana, Michigan, and Wisconsin
for the 1996-2000 period. The Central Flyway Council recommended the
Service approve Nebraska's duck hunting zone proposal. The Pacific
Flyway Council recommended the Service approve duck zone changes in
Arizona, Nevada, Oregon, and Utah for the 1996-2000 period.
Written Comments: The Nebraska Game and Parks Commission and the
[[Page 30116]]
Kansas Department of Wildlife and Parks recommended the restrictions
``must be consecutive'' and ``after the regular duck season'' be
removed from the proposed guidelines on the use of additional days in
the High Plains Management Unit. Both noted these requirements were new
and seemed unnecessary.
The Nebraska Game and Parks Commission recommended the addition of
a provision allowing the use of non-contiguous zones when supported by
strong justification. The Wyoming Game and Fish Department also
requested a variance from the contiguous-boundary criterion, stating
that the current zoning guidelines do not seem to contain the
flexibility needed to address the considerable variation in hunting
opportunity associated with the diverse physiographic regions found in
many Rocky Mountain States.
Service Response: For the 1996 open season, the Service proposed in
the March 22, 1996, Federal Register use of the existing 1990
guidelines, with an exception for the handling of special management
units. The Service proposed to delete the following provision from the
1990 guidelines:
Special Management Unit Limitation: Within existing Flyway
boundaries, States may not zone and/or use a 3-way split season
simultaneously within a special management unit and the remainder of
the State.
The Service proposed this change with the understanding that the
additional days allowed for a management unit must be consecutive and,
for the Central Flyway, be held both after the Saturday nearest
December 10 and after the regular duck season. While the Service
continues to support this proposed change, based on preliminary
comments, the Service is now proposing an additional special provision
for management units: For the States that have a recognized management
unit and include a non-management unit portion, an independent 2-way
split season with no zones can be selected for the management unit. The
remainder of the State in the non-management unit portion can be zoned/
split according to existing guidelines.
Regarding the Central Flyway Council recommendation that the
criteria ``must be consecutive'' and ``after the regular duck season''
be removed from the guidelines on the use of additional High Plains
Management Unit days, the Service reviewed the justification provided
and believes that restrictions regarding the use of additional days
should remain as proposed.
Regarding Flyway Council recommendations to alter the definition
and interpretation of a ``zone'' that would allow the establishment of
hunting areas with non-contiguous boundaries or concurrent seasons, the
Service has reviewed the rationale provided with the recommendations
and believes that the definition/interpretations previously used are
still appropriate. The requirement for contiguous boundaries for zones
and different season dates among zones supports a primary objective of
the guidelines for selecting zones/split seasons for duck hunting,
which is to improve stability in hunting regimes. If concurrent seasons
among zones were allowed, States would in effect have the option to
either zone or not zone. With respect to non-contiguous boundaries, the
Service believes that the current guidelines allow States sufficient
flexibility to address differences in physiography, climate, etc.
within a State. Allowing either of these exceptions in interpretation
could further confound our ability to regulate and evaluate overall
harvest pressure on ducks.
The following zone/split-season guidelines apply only for the
regular duck season and include several definitions and interpretations
developed in response to questions during and following the first open
season in 1991. For clarification, these are reiterated:
1. A zone is a geographic area or portion of a State, with a
contiguous boundary, for which independent dates (at least 1 day
difference) can be selected for the regular duck season.
2. Consideration of changes for management-unit boundaries are not
subject to the guidelines and provisions governing the use of zones and
split seasons for ducks.
3. Only minor (less than a county in size) boundary changes will be
allowed for any grandfather arrangement, and changes are limited to the
open season.
4. Any State may change its zone/split arrangement to the Basic
Option at any time during the 5 years between open seasons. If such a
change is made, the Basic Option must be continued for the remainder of
the 5-year period.
For the 1996-2000 period, any State may continue the configuration
used in 1991-1995. If changes are made, the zone/split-season
configuration must conform to one of the following options:
1. Basic Option: The Basic Option, available at any time to any
State, would allow the regular duck season to be split into two
segments with no zones.
2. Alternative Options: Where the Basic Option is deemed
undesirable, States may choose one of the following:
a. No more than three zones with no splits,
b. A 3-way split with no zones, or
c. Two zones with the option for 2-way split seasons in one or both
zones.
At the end of 5 years after any changes in splits or zones (except
conversions to the Basic Option), States will be required to provide
the Service with a review of pertinent data (e.g., estimates of
harvest, hunter numbers, hunter success, etc.). This review does not
have to be the result of a rigorous experimental design, but
nonetheless should assist the Service in ascertaining whether major
undesirable changes in harvest or hunter activity occurred as a result
of split and zone regulations. The next open season for changes in
zone/split configurations will be 2001.
Using the above revised guidelines, the Service reviewed specific
proposals for zoning changes submitted to date, including those
recommended by the Flyway Councils and those proposed by the various
States. Proposals by the States of Arizona, Illinois, Kentucky, Maine
(boundary change), Michigan, Mississippi, Montana, Nevada, Oregon,
South Dakota, Utah, and Wisconsin were within the established
guidelines and are approved for the 1996-2000 period. Proposals by the
States of Indiana, Kansas, Maine (creation of third zone), and Wyoming
did not comply with the revised guidelines and the Service requests
these States revise their proposals accordingly.
Regarding Nebraska's proposed zoning plan, the Service does not
support the Central Flyway Council's recommendation that would allow a
variance to Nebraska or any other State for establishment of non-
contiguous zone boundaries. The use of ``early'' and ``late'' zones in
the Low Plains portion of Nebraska during 1991-95 is clearly outside
the established guidelines, but was allowed (1991-95) under the
grandfather clause. In the event that this arrangement is now
unacceptable, Nebraska must use the guidelines provided above to
establish a zone/split configuration for the 1996-2000 period. Under
the grandfather arrangement, minor boundary changes are allowed and
Nebraska's proposed Low Plains zone boundary changes would be
acceptable.
F. Special Seasons/Species Management
i. Canvasbacks
Council Recommendations: The Lower-Region Regulations Committee of
the Mississippi Flyway Council
[[Page 30117]]
recommended canvasback regulations fluctuate within the regulations
packages commensurate with model predictions, breeding-population
indices, and habitat conditions.
ii. Pintails
Council Recommendations: The Central Flyway Council recommended a
harvest strategy for pintails based on the breeding population size.
The pintail daily bag limit would be 1 with a pintail breeding
population below 3.0 million; 2 with a breeding population between 3.0
and 4.5 million; 3 with a breeding population between 4.5 and 5.6
million; and equal to the overall daily bag limit with a breeding
population above 5.6 million.
The Pacific Flyway Council recommended guidelines for the 1996-97
Pacific Flyway pintail harvest regulations based on a prescriptive
basis. A matrix of breeding population size from a subset of survey
strata association with the Pacific Flyway breeding population and the
numbers of prairie ponds counted during the May survey would determine
bag limits.
iii. September Teal Seasons
Council Recommendations: The Upper-Region Regulations Committee of
the Mississippi Flyway Council recommended a 5-day experimental
September teal season be offered to the production States of Iowa,
Michigan, Minnesota, and Wisconsin for a 3-year period. The Committee
recommended a daily bag limit of 4 teal with sunrise to sunset shooting
hours.
The Central Flyway Council recommended a harvest strategy of
linking regulatory packages developed for the September teal season
with those developed for the regular duck season under the Adaptive
Harvest Management process. For 1996, the Council recommended either a
``restrictive'' package of 5 days with a daily bag limit of 3 teal, a
``moderate'' package of 9 days with a daily bag limit of 4 teal, or a
``liberal'' package of 16 days with a daily bag limit of 5 teal.
iv. September Duck Seasons
Council Recommendations: The Upper-Region Regulations Committee of
the Mississippi Flyway Council recommended Iowa be allowed to hold up
to 5 days of its regular duck hunting season in September, starting no
earlier than the Saturday nearest September 14. The remainder of the
Iowa regular duck season could begin no earlier than October 10.
v. Other Species
Council Recommendations: The Atlantic Flyway Council recommended
black duck harvest restrictions in place during the 1990-94 period be
continued or increased for a 3-year period where necessary to ensure
adequate harvest reductions throughout the black duck range, beginning
with the 1997-98 hunting season.
4. Canada Geese
A. Special Seasons
Council Recommendations: The Atlantic Flyway Council recommended
the frameworks for September Canada goose seasons in the Atlantic
Flyway be modified as follows:
September 1-15: Montezuma region of New York, Lake Champlain region
of New York and Vermont, Maryland (Caroline, Cecil, Dorchester, and
Talbot Counties), South Carolina, and Delaware.
September 1-20: North Carolina (Currituck, Camden, Pasquotank,
Perquimans, Chowan, Bertie, Washington, Tyrrell, Dare, and Hyde
Counties).
September 1-30: New Jersey and remaining portion of North Carolina.
September 1-25: Remaining portion of Flyway, except Georgia and
Florida.
The Lower-Region Regulations Committee of the Mississippi Flyway
Council recommended the Service continue to closely monitor the impacts
of early Canada goose seasons, including both special seasons and
September openings of regular seasons, to insure that cumulative
impacts do not adversely affect migrant Canada geese and to insure that
special seasons adhere to the criteria established by the Service.
The Upper-Region Regulations Committee of the Mississippi Flyway
Council and the Pacific Flyway Council made several recommendations
relating to September Canada goose seasons. All of the recommendations
were within the established criteria for special Canada goose seasons
published in the August 29, 1995, Federal Register (60 FR 45020).
Written Comments: The Massachusetts Division of Fisheries and
Wildlife supported extending the September frameworks for September
Canada goose seasons in the Atlantic Flyway to September 25.
B. Regular Seasons
Council Recommendations: The Upper-Region Regulations Committee of
the Mississippi Flyway Council recommended a September 21 framework
opening date for the regular goose season in the Upper Peninsula of
Michigan and statewide in Wisconsin.
The Pacific Flyway Council reiterated its 1995 recommendation that
Alaska, Oregon, and Washington take actions to reduce the harvest of
dusky Canada geese.
Written Comments: The Massachusetts Division of Fisheries and
Wildlife urged the Service to consider new data on Atlantic Population
Canada geese that supports two populations of northern Atlantic Flyway
geese.
7. Snow and Ross's Geese
Council Recommendations: The Lower-Region Regulations Committee of
the Mississippi Flyway Council recommended the Service give serious
consideration to innovative approaches to harvest management for snow
geese. The Committee also recommended the Service consider recent
changes in the Migratory Bird Treaty to provide greater hunter
opportunities for snow geese.
The Central Flyway Council recommended a March 10 framework closing
date for hunting light geese throughout the Central Flyway. However,
the Council further recommended within the Rainwater Basin Region in
Nebraska, the framework closing date be February 1 for hunting light
geese on land owned or controlled by the Nebraska Game and Parks
Commission or the Service.
8. Swans
Council Recommendations: The Atlantic Flyway Council recommended
eliminating the requirement that tundra swan seasons must be held
during snow goose seasons.
9. Sandhill Cranes
Council Recommendations: The Central Flyway Council recommended
Wyoming's sandhill crane hunt area expand to include Park and Big Horn
Counties.
The Pacific Flyway Council recommended season modifications in
Montana and Wyoming. In Montana, the Council recommended a new hunt
zone in the Ovando-Helmville area. In Wyoming, the Council recommended
expanding the season from 3 to 8 days, increasing the number of
permits, and establishing a new hunt zone in Park and Big Horn
Counties.
18. Alaska
Council Recommendations: The Pacific Flyway Council recommended the
establishment of separate basic limits for geese. For dark geese, the
Council recommended a basic daily bag limit of 4, with 8 in possession.
For light geese, the Council recommended a daily bag limit of 3, with 6
in possession. The proposed limits would be subject to area
restrictions for Canada geese and limits for brant and emperor geese
would remain separate.
[[Page 30118]]
Public Comment Invited
The Service intends that adopted final rules be as responsive as
possible to all concerned interests, and therefore desires to obtain
the comments and suggestions of the public, other concerned
governmental agencies, non-governmental organizations, and other
private interests on these proposals. Such comments, and any additional
information received, may lead to final regulations that differ from
these proposals.
Special circumstances are involved in the establishment of these
regulations which limit the amount of time that the Service can allow
for public comment. Specifically, two considerations compress the time
in which the rulemaking process must operate: (1) the need to establish
final rules at a point early enough in the summer to allow affected
State agencies to appropriately adjust their licensing and regulatory
mechanisms; and (2) the unavailability, before mid-June, of specific,
reliable data on this year's status of some waterfowl and migratory
shore and upland game bird populations. Therefore, the Service believes
that to allow comment periods past the dates specified is contrary to
the public interest.
Comment Procedure
The policy of the Department of the Interior, whenever practical,
affords the public an opportunity to participate in the rulemaking
process. Accordingly, interested persons may participate by submitting
written comments to the Chief, Office of Migratory Bird Management,
U.S. Fish and Wildlife Service, Department of the Interior, ms 634--
ARLSQ, 1849 C Street, NW., Washington, DC 20240. The public may inspect
comments during normal business hours at the Service's office in room
634, Arlington Square Building, 4401 N. Fairfax Drive, Arlington,
Virginia. The Service will consider all relevant comments received. The
Service will attempt to acknowledge received comments, but substantive
response to individual comments may not be provided.
NEPA Consideration
NEPA considerations are covered by the programmatic document,
``Final Supplemental Environmental Impact Statement: Issuance of Annual
Regulations Permitting the Sport Hunting of Migratory Birds (FSES 88-
14),'' filed with EPA on June 9, 1988. The Service published a Notice
of Availability in the June 16, 1988, Federal Register (53 FR 22582).
The Service published its Record of Decision on August 18, 1988 (53 FR
31341). Copies of these documents are available from the Service at the
address indicated under the caption ADDRESSES.
Endangered Species Act Consideration
As in the past, hunting regulations this year will be designed,
among other things, to remove or alleviate chances of conflict between
seasons for migratory game birds and the protection and conservation of
endangered and threatened species. Consultations are presently under
way to ensure that actions resulting from these regulatory proposals
will not likely jeopardize the continued existence of endangered or
threatened species or result in the destruction or adverse modification
of their critical habitat. It is possible that the findings from the
consultations, which will be included in a biological opinion, may
cause modification of some regulatory measures proposed in this
document. The final frameworks will reflect any modifications. The
Service's biological opinions resulting from its consultation under
Section 7 are public documents and are available for public inspection
in the Division of Endangered Species and the Office of Migratory Bird
Management, U.S. Fish and Wildlife Service, Arlington Square Building,
4401 N. Fairfax Drive, Arlington, Virginia.
Regulatory Flexibility Act; Executive Order (E.O.) 12866 and the
Paperwork Reduction Act
In the Federal Register dated March 22, 1996, the Service reported
measures it had undertaken to comply with requirements of the
Regulatory Flexibility Act and the Executive Order. These included
preparing a Small Entity Flexibility Analysis (Analysis) in 1995 to
document the significant beneficial economic effect on a substantial
number of small entities. The Analysis estimated that migratory bird
hunters would spend between $258 and $586 million at small businesses
in 1995. Copies of the Analysis are available upon request from the
Office of Migratory Bird Management. This rule was not subject to
review by the Office of Management and Budget under E.O. 12866.
The Service examined these proposed regulations under the Paperwork
Reduction Act of 1995 and found no information collection requirements.
Authorship: The primary authors of this proposed rule are Ron W.
Kokel and Patricia R. Hairston, Office of Migratory Bird Management.
List of Subjects in 50 CFR Part 20
Exports, Hunting, Imports, Reporting and recordkeeping
requirements, Transportation, Wildlife.
The rules that eventually will be promulgated for the 1996-97
hunting season are authorized under 16 U.S.C. 703-711, 16 U.S.C. 712,
and 16 U.S.C. 742 a-j.
Dated: June 5, 1996.
George T. Frampton, Jr.,
Assistant Secretary for Fish and Wildlife and Parks.
[FR Doc. 96-15015 Filed 6-12-96; 8:45 am]
BILLING CODE 4310-55-F
Complete official Federal Register PDF
FR Doc. 96-15002 Small Purchase Authority
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Page 30028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15002]
=======================================================================
-----------------------------------------------------------------------
GENERAL SERVICES ADMINISTRATION
41 CFR Part 101-20
RIN 3090-AG00
Small Purchase Authority
AGENCY: General Services Administration.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This General Services Administration (GSA) proposed rule
revises the regulations regarding the delegation of authority to
occupant agencies to contract for reimbursable space alterations. The
present FPMR provisions stated in 101-20.106.1 cite a project
accomplishment threshold of $25,000. This threshold was established
based on the small purchase authority in place at the time of the
original publication of this provision.
Since the purpose of this FPMR provision is to provide occupant
agencies choices in their use of a service provider, it is recommended
that the Simplified Acquisition Procurement threshold be used. Rather
than establish an authority at a selected value, the reference should
be changed to link it to the Federal Acquisition Streamlining Act of
1994. Therefore, if the value of the statute changes the FPMR would not
require a change. The present Simplified Acquisition Procedures (SAP)
authority is $50,000 for GSA procurement activities.
Modifying the FPMR provisions to tie to the SAP authority gives
occupants increased flexibility in accomplishing alteration tasks and
fully delegates the authority to do the work.
No other changes are suggested.
DATES: Comments must be received on or before July 15, 1996.
ADDRESSES: Written comments should be sent to General Services
Administration, Office of Property Management, Portfolio Customer Team
(PMX), 18th and F Streets, NW, Room G118, Washington, DC 20405.
FOR FURTHER INFORMATION CONTACT: Jeffrey Neely, Portfolio Customer
Team, PMX, (202) 208-1497.
SUPPLEMENTARY INFORMATION: The General Services Administration (GSA)
has determined that this rule is not a significant regulatory action
for the purposes of Executive Order 12866.
The Paperwork Reduction Act does not apply because the revisions do
not impose record keeping or information collection requirements, or
collections of information from offerors, contractors, or members of
the public which require the approval of the Office of Management and
Budget under 44 U.S.C. 3501, et seq.
This rule is not required to be published in the Federal Register
for notice and comment. Therefore, the Regulatory Flexibility Act does
not apply.
List of Subjects in 41 CFR Part 101-20
Concessions, Federal buildings and facilities, Government property
management.
For the reasons set forth in the preamble, it is proposed to amend
41 CFR Part 101-20 as follows:
PART 101-20--MANAGEMENT OF BUILDINGS AND GROUNDS
1. The authority citation for Part 101-20 continues to read as
follows:
Authority: Sec. 205(c) of Pub. L. 152, 63, Stat., 390, 40
U.S.C., 486(c).
Subpart 101-20.1--Buildings Operations, Maintenance, Protection,
and Alterations
2. Section 202-20.106-1 is amended by revising paragraphs (b) and
(e) to read as follows:
Sec. 101-20.106-1 Placing of orders for reimbursable alterations by
occupant agencies.
* * * * *
(b) No individual order, or combination of orders for a single
alteration project, shall exceed the statutory limitation for a
simplified acquisition procedure, and agencies shall not split orders
so as to circumvent this limitation.
* * * * *
(e) Where no GSA contracts or agreements are in effect, an agency
may contract directly for services up to the maximum of the statutory
limitation for simplified acquisition procedures per project after
obtaining written approval of the GSA buildings manager. Agencies
contracting directly must provide the GSA buildings manager with
complete documentation of the scope of work and contract specifications
at the time of submission for approval. Each project shall include
appropriate reviews by the regional safety staff. If contracting for
security systems, agencies must submit the design work to the regional
Federal Protective Service Division for review and approval. Agencies
shall be responsible for inspecting and certifying satisfactory
completion of the ordered work. All work must conform to GSA fire and
safety standards. GSA at anytime has the authority to make inspections
and require correction if the project is found not in compliance with
GSA fire and safety standards. As-built drawings must be submitted to
the GSA buildings manager within 30 days of completion of work.
Dated: April 5, 1996.
Robert A. Peck,
Commissioner, Public Buildings Service.
[FR Doc. 96-15002 Filed 6-12-96; 8:45 am]
BILLING CODE 6820-23-M
Complete official Federal Register PDF
FR Doc. 96-14989 Airworthiness Directives; Beech Aircraft Corporation 90, 99, 100, 200, and 1900 Series Airplanes
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 29994-29996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14989]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 96-CE-11-AD]
RIN 2120-AA64
Airworthiness Directives; Beech Aircraft Corporation 90, 99, 100,
200, and 1900 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes to supersede AD 92-27-10, which
currently requires inspecting the pilot and copilot chairs to ensure
that the locking pins will fully engage in the seat tracks on certain
Beech Aircraft Corporation (Beech) 90, 99, 100, 200, and 1900 series
airplanes, and modifying any chair where any locking pin fails to fully
engage or is misaligned. Reports of pilot and copilot chair locking pin
malfunctions prompted AD 92-27-10. Since issuance of that AD, the
Federal Aviation Administration (FAA) has determined that additional
airplanes should be affected by the pilot and copilot chair locking
pins inspection and modification (if required), and that the inspection
should be accomplished in accordance with revised procedures. The
proposed action would retain the inspection and modification
requirements of AD 92-27-10; incorporate additional airplanes into the
applicability over that included in AD 92-27-10; and require the
inspection in accordance with revised service information. The actions
specified by the proposed AD are intended to prevent inadvertent
movement of the pilot or copilot chair, which could result in loss of
control of the airplane if it occurs during a critical flight maneuver.
DATES: Comments must be received on or before August 16, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Central Region, Office of the Assistant Chief
Counsel, Attention: Rules Docket No. 96-CE-11-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 Beech Aircraft Corporation, P.O. Box 85, Wichita, Kansas
67201-0085. This information also may be examined at the Rules Docket
at the address above.
FOR FURTHER INFORMATION CONTACT: Mr. Steve Potter, Aerospace Engineer,
Wichita Aircraft Certification Office, FAA, 1801 Airport Road, Mid-
Continent Airport, Wichita, Kansas 67209; telephone (316) 946-4124;
facsimile (316) 946-4407.
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. 96-CE-11-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. 96-CE-11-AD, Room 1558, 601 E. 12th Street,
Kansas City, Missouri 64106.
Discussion
AD 92-27-10, Amendment 39-8444 (58 FR 5923, January 25, 1993),
currently requires the following on certain Beech Aircraft Corporation
(Beech) 90, 99, 100, 200, and 1900 series
[[Page 29995]]
airplanes: inspecting the pilot and copilot chairs to ensure that the
locking pins will fully engage in the seat tracks, and modifying any
chair where any locking pin fails to fully engage or is misaligned.
Accomplishment of the inspection required by AD 92-27-10 is in
accordance with Beech Service Bulletin (SB) No. 2444, Revision 1, dated
September 1992.
Reports of pilot and copilot chair locking pin malfunctions,
including one instance where the pilot chair slid back from the full
forward position, prompted the FAA to issue AD 92-27-10. Since issuance
of that AD, the FAA has determined that additional airplanes should be
affected by the pilot and copilot chair locking pins inspection and
modification, and that the inspection should be accomplished in
accordance with revised procedures.
Applicable Service Information
The Beech Aircraft Corporation has revised SB No. 2444 to the
Revision II level (dated May 1995). The SB revision updates airplane
serial number effectivity, and incorporates an additional procedure to
Step 5 of the ACCOMPLISHMENT INSTRUCTIONS section.
Evaluation of All Applicable Information
After examining the circumstances and reviewing all available
information related to the incidents described above, including the
referenced SB revision, the FAA has determined that AD action should be
taken to prevent inadvertent movement of the pilot or copilot chair,
which could result in loss of control of the airplane if it happens
during a critical flight maneuver.
Explanation of the Provisions of the Proposed AD
Since an unsafe condition has been identified that is likely to
exist or develop in other Beech 90, 99, 100, 200, and 1900 series
airplanes of the same type design, the proposed AD would supersede AD
92-27-10 with a new AD that would (1) retain the requirement of
inspecting the pilot and copilot chairs to ensure that the locking pins
will fully engage in the seat tracks, and modifying any chair where any
locking pin fails to fully engage or is misaligned; (2) incorporate
additional airplanes into the applicability over that included in AD
92-27-10; and (3) require the inspection in accordance with Beech SB
No. 2444, Revision II, dated May 1995.
Cost Impact
The FAA estimates that 4,971 airplanes in the U.S. registry would
be affected by the proposed AD, that it would take approximately 1
workhour per airplane to accomplish the proposed inspection, and that
the average labor rate is approximately $60 an hour. No parts are
required to accomplish the proposed action. Based on these figures, the
total cost impact of the proposed AD on U.S. operators is estimated to
be $298,260. This figure only takes into account the cost of the
inspection and does not take into account the cost of modifying any
pilot or copilot seat where the locking mechanism fails to fully engage
or is misaligned. If a pilot or copilot seat fails to fully engage or
is misaligned, the modification would take approximately 2 workhours
per airplane at an average labor rate of $60 per hour ($120 per
airplane).
Regulatory Impact
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 USC 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by removing Airworthiness Directive
(AD) 92-27-10, Amendment 39-8444 (58 FR 5923, January 25, 1993), and by
adding a new AD to read as follows:
Beech Aircraft Corporation: Docket No. 96-CE-11-AD. Supersedes AD
92-27-10, Amendment 39-8444.
Applicability: The following model and serial number airplanes,
certificated in any category:
------------------------------------------------------------------------
Models Serial No.
------------------------------------------------------------------------
65-90, 65-A90, B90, C90, and LJ-1 through LJ-1307.
C90A.
65-A90-1 (U-21A)............. LM-1 through LM-63, LM-65, LM-67 through
LM-69, LM-71 through LM-99, and LM- 112
through LM-114.
65-A90-1 (JU-21A)............ LM-64, LM-66, and LM-70.
65-A90-1 (RU-21D)............ LM-100, LM-102 through LM-106, and LM-116
through LM-124.
65-A90-1 (RU-21H)............ LM-101 LM-107, LM-115, LM-125, LM-127, LM-
128, LM-129, LM-132, LM-133, LM- 136, LM-
137, and LM-138.
65-A90-1 (RU-21A)............ LM-108 through LM-111.
65-A90-1 (U-21G)............. LM-126, LM-130, LM-131, LM- 134, LM-135,
and LM-139 through LM-141.
65-A90-2 (RU-21B)............ LS-1, LS-2, and LS-3.
65-A90-3 (RU-21C)............ LT-1 and LT-2.
65-A90-4 (RU-21E)............ LU-1, LU-3, LU-4, LU-7, LU-8, and LU-14.
65-A90-4 (RU-21H)............ LU-2, LU-5, LU-6, LU-9, LU-10 through LU-
13, and LU-15.
E90.......................... LW-1 through LW-347.
H90 (T-44A).................. LL-1 through LL-61.
F90.......................... LA-2 through LA-236.
[[Page 29996]]
99, 99A, A99A, B99, and C99.. U-1 through U-239.
100 and A100................. B-1 through B-94 and B-100 through B-247.
A100 (U-21F)................. B-95 through B-99.
A100-1 (U-21J)............... BB-3, BB-4, and BB-5.
B100......................... BE-1 through BE-137.
200 and B200................. BB-2 and BB-6 through BB-1440.
200C and B200C............... BL-1 through BL-72 and BL-124 through BL-
137.
200CT and B200CT............. BN-1 through BN-4.
200T and B200T............... BT-1 through BT-34.
A200 (C-12A, C-12C).......... BD-1 through BD-30, and BC-1 through BC-
75.
A200 (UC-12B)................ BJ-1 through BJ-66.
A200CT (C-12D)............... BP-1, BP-22, and BP-24 through BP-51.
A200CT(FWD-12D).............. BP-7 through BP-11.
A200CT (RC-12D).............. GR-1 through GR-13.
A200CT (C-12F)............... BP-52 through BP-63.
A200CT (RC-12G).............. FC-1, FC-2, and FC-3.
A200CT (RC-12H).............. GR-14 through GR-19.
A200CT (RC-12K).............. FE-1 through FE-23.
B200C (C-12F)................ BL-73 through BL-112, and BL-118 through
BL-123.
B200C (UC-12F)............... BU-1 through BU-10.
B200C (RC-12F)............... BU-11 and BU-12.
B200C (UC-12M)............... BV-1 through BV-10.
B200C (RC-12M)............... BV-11 and BV-12.
B200CT (FWD-12D)............. FG-1 and FG-2.
B200CT (C-12F)............... BP-64 through BP-71.
1900......................... UA-1, UA-2, and UA-3.
1900C........................ UB-1 through UB-74, and UC-1 through UC-
174.
1900C (C-12)................. UD-1 through UD-6.
1900D........................ UE-1 through UE-17.
------------------------------------------------------------------------
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 (d) 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 150 hours time-in-
service after the effective date of this AD, unless already
accomplished.
To prevent inadvertent movement of the pilot or copilot chair,
which could result in loss of control of the airplane if it occurs
during a critical flight maneuver, accomplish the following:
(a) Inspect the pilot and copilot chairs to ensure that the
locking pins will fully engage in the seat tracks in accordance with
the ACCOMPLISHMENT INSTRUCTIONS section of Beech Service Bulletin
(SB) No. 2444, Revision II, dated May 1995. Prior to further flight,
modify any chair where any locking pin fails to fully engage or is
misaligned in accordance with the maintenance manual as specified in
Beech SB No. 2444, Revision II, dated May 1995.
(b) The inspection and modification required by paragraph (a) of
this AD are still mandatory even if the actions were previously
accomplished in accordance with Beech SB No. 2444, dated April 1992,
or Beech SB No. 2444, Revision I, dated September 1992.
(c) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(d) An alternative method of compliance or adjustment of the
compliance time that provides an equivalent level of safety may be
approved by the Manager, Wichita Aircraft Certification Office
(ACO), 1801 Airport Road, Room 100, Mid-Continent Airport, Wichita,
Kansas 67209. The request shall be forwarded through an appropriate
FAA Maintenance Inspector, who may add comments and then send it to
the Manager, Wichita ACO. Alternative methods of compliance approved
in accordance with AD 92-27-10 (superseded by this action) are not
considered approved as alternative methods of compliance with this
AD.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Wichita ACO.
(e) All persons affected by this directive may obtain copies of
the document referred to herein upon request to the Beech Aircraft
Corporation, P.O. Box 85, Wichita, Kansas 67201-0085; 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 92-27-10, Amendment 39-8444.
Issued in Kansas City, Missouri, on June 4, 1996.
Henry A. Armstrong,
Acting Manager, Small Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-14989 Filed 6-12-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-14988 Airworthiness Directives; Airbus Model A300, A300-600, A310, and A320 Series Airplanes
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 29996-30001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14988]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-NM-227-AD]
RIN 2120-AA64
Airworthiness Directives; Airbus Model A300, A300-600, A310, and
A320 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes the supersedure of an existing
airworthiness directive (AD), applicable to certain Airbus Model A300,
A300-600, A310, and A320 series airplanes, that currently requires an
inspection of the landing gear brakes for wear, and replacement if the
specified wear limits are not met. That AD also requires incorporation
of the specified wear limits into the FAA-approved maintenance
inspection program. This action would require that certain wear limits
that are dependent on brake stack weight be used in conjunction with
specified brake stack weights, and that maximum allowable
[[Page 29997]]
brake wear limits for additional brake units be incorporated into the
FAA-approved maintenance program. This proposal is prompted by a report
that some brakes that are subject to the requirements of the existing
AD have not been removed from service and by the determination of the
maximum allowable brake wear limits for additional brake unit part
numbers. The actions specified by the proposed AD are intended to
prevent the loss of brake effectiveness during a high energy rejected
takeoff.
DATES: Comments must be received by July 22, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Transport Airplane Directorate, ANM-103,
Attention: Rules Docket No. 95-NM-227-AD, 1601 Lind Avenue, SW.,
Renton, Washington 98055-4056. Comments may be inspected at this
location between 9:00 a.m. and 3:00 p.m., Monday through Friday, except
Federal holidays.
The service information referenced in the proposed rule may be
obtained from Messier Services, 45635 Willow Pond Plaza, Sterling,
Virginia 20164; Allied Signal Aerospace, Technical Publications, Dept.
65-70, P.O. Box 52170, Phoenix, Arizona 85072-2170; or BFGoodrich
Company, Aircraft Evacuation Systems, Department 7916, Phoenix, Arizona
85040. This information may be examined at the FAA, Transport Airplane
Directorate, 1601 Lind Avenue, SW., Renton, Washington.
FOR FURTHER INFORMATION CONTACT: Joe Jacobsen, Aerospace Engineer,
Standardization Branch, ANM-113, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (206)
227-2011; fax (206) 227-1149.
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 shall 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 summarizing 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 Number 95-NM-227-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, Transport Airplane Directorate, ANM-103, Attention: Rules
Docket No. 95-NM-227-AD, 1601 Lind Avenue, SW., Renton, Washington
98055-4056.
Discussion
On December 14, 1994, the FAA issued AD 94-26-05, amendment 39-9101
(59 FR 65927, December 22, 1994), applicable to certain Airbus Model
A300, A300-600, A310, and A320 series airplanes, to require an
inspection of certain landing gear brakes for wear, and replacement if
the specified wear limits are not met. That AD also requires
incorporation of the specified wear limits into the FAA-approved
maintenance inspection program. That action was prompted by an accident
in which a transport category airplane executed a rejected takeoff
(RTO) and was unable to stop on the runway due to worn brakes, and
subsequent review of allowable brake wear limits for all transport
category airplanes. The requirements of that AD are intended to prevent
the loss of brake effectiveness during a high energy RTO.
Actions Since Issuance of Previous Rule
Since the issuance of that AD, the airplane manufacturer and one
brake unit manufacturer have advised the FAA that certain brake part
numbers and maximum brake wear information provided to the FAA and
specified in AD 94-26-05 was incorrect and must be revised. The FAA
finds that this information must be revised in order to ensure that any
brake worn beyond its maximum wear limit is replaced with a brake
within that limit.
Additionally, the FAA has been advised that some brakes that are
subject to the requirements of AD 94-26-05 have not been removed from
service. These particular brakes are unable to withstand maximum RTO
energy with the wear pin limit specified in the existing AD due to
lower brake stack weights. Consequently, the FAA has determined that a
requirement that certain wear limits that are dependent on brake stack
weight must be used in conjunction with appropriate brake stack weights
specified in the brake manufacturer's Component Maintenance Manual
(CMM), certain service bulletins, or the Airplane Maintenance Manual.
Further, additional brake unit part numbers that were not addressed
in AD 94-26-05 have since been evaluated, and the maximum allowable
brake wear limits for these brake units have been determined in
accordance with a methodology approved by the FAA. The newly identified
maximum brake wear limits must be applied to these brake configurations
in order to ensure their braking effectiveness. The FAA has determined
that airplanes equipped with these brake units are currently subject to
the same unsafe condition addressed in the existing AD.
The FAA also finds that references to certain brake part numbers
that were specified in the existing AD must be clarified to indicate
that the listing refers to a ``series''of brake part numbers.
Additionally, the FAA has determined that certain service
information specified in the existing AD must be revised to specify
issuance dates and revision levels.
Type Certification of the Affected Airplanes
These airplane models are manufactured in France and are type
certificated for operation in the United States under the provisions of
section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and
the applicable bilateral airworthiness agreement.
Explanation of Requirements of Proposed Rule
Since an unsafe condition has been identified that is likely to
exist or develop on other airplanes that are of the same type design,
that are equipped with the subject brake configurations, and that are
registered in the United States, the proposed AD would supersede AD 94-
26-05. This proposed AD would continue to require inspection of certain
landing gear brakes for wear, replacement of the brakes if certain wear
limits are not met, and incorporation of the specified wear limits into
the FAA-approved maintenance inspection program. Additionally, the
proposed AD would:
[[Page 29998]]
Revise certain brake part numbers and maximum brake wear
information specified in the existing AD;
Require that certain wear limits that are dependent on
brake stack weight be used in conjunction with appropriate brake stack
weights specified in various service documents; and
Require that maximum allowable brake wear limits for
additional brake units be incorporated into the FAA-approved
maintenance program.
Cost Impact
There are approximately 165 Model A300, A300-600, A310, and A320
series airplanes of U.S. registry that would be affected by this
proposed AD.
Incorporation of the revision of the FAA-approved maintenance
inspection program, which is currently required by AD 94-26-05, takes
approximately 20 work hours per operator (for 4 U.S. operators) to
accomplish, at an average labor rate of $60 per work hour. Based on
these figures, the cost impact on U.S. operators to accomplish this
currently required action is estimated to be $4,800, or $1,200 per
operator.
The inspection currently required by AD 94-26-05 takes
approximately 15 work hours per airplane to accomplish, at an average
labor rate of $60 per work hour. The cost of required parts to
accomplish the change in wear limits for these airplanes (that is, the
cost resulting from the requirement to change the brakes before they
are worn to their previously approved limits for a one-time change)
will be approximately $2,236 per airplane. The FAA estimates that 46 of
the 165 affected airplanes of U.S. registry will be required to
accomplish the inspection. Based on these figures, the cost impact on
U.S. operators to accomplish the currently required inspection is
estimated to be $144,256, or $3,136 per airplane.
The new actions that are proposed in this AD action would affect
one U.S. operator of 8 airplanes. The FAA estimates that the new
actions would take approximately 15 work hours per airplane to
accomplish, at an average labor rate of $60 per work hour. Required
parts would cost approximately $2,236 per airplane. Based on these
figures, the cost impact on the affected U.S. operator of the proposed
requirements of this AD is estimated to be $3,136 per airplane.
The cost impact figures discussed above are based on assumptions
that no operator has yet accomplished any of the current or proposed
requirements of this AD action, and that no operator would accomplish
those actions in the future if this AD were not adopted.
Regulatory Impact
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 proposed
regulation (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under the 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 is contained 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
part 39 of the Federal Aviation Regulations (14 CFR part 39) 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 amendment 39-9101 (59 FR
65927, December 22, 1994), and by adding a new airworthiness directive
(AD), to read as follows:
Airbus Industrie: Docket 95-NM-227-AD. Supersedes AD 94-26-05,
Amendment 39-9101.
Applicability: Model A300, A300-600, A310, and A320 series
airplanes equipped with Messier-Bugatti, BFGoodrich, Allied Signal
(ALS) Aerospace Company (Bendix), or Aircraft Braking Systems (ABS)
brakes; certificated in any category.
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 (d) 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 as indicated, unless accomplished
previously.
To prevent the loss of brake effectiveness during a high energy
rejected takeoff (RTO), accomplish the following:
RESTATEMENT OF REQUIREMENTS OF AD 94-26-05
(a) Within 180 days after January 23, 1995 (the effective date
of AD 94-26-05, amendment 39-9101), accomplish paragraphs (a)(1) and
(a)(2) of this AD.
(1) Inspect main landing gear brakes having the brake part
numbers listed in Table 1, below, for wear. Any brake worn more than
the maximum wear limit specified in Table 1, below, must be
replaced, prior to further flight, with a brake within that limit.
Table 1
[Airbus Industrie Model A300, A300-600, A310, and A320 Series Airplanes -
Equipped with Messier-Bugatti, BFGoodrich, Allied Signal (ALS) Aerospace
Company (Bendix), or Aircraft Braking Systems (ABS) Brakes]
------------------------------------------------------------------------
Maximum brake
Airplane model/ Brake Brake part No.- wear limit (inch/
series- manufacturer- mm)
------------------------------------------------------------------------
A300 B2-100- Messier-Bugatti 286349-115 0.98''(25.0 mm).
A300 B2-100- Messier-Bugatti 286349-116 0.98'' (25.0
mm).
A300 B2-100- BFGoodrich 2-1449 1.4'' (35.6 mm).
A300 B2-100- BFGoodrich 2-1449 1.1'' (27.9 mm)
S.C.*
A300 B4-100- Messier-Bugatti A21329-41-7- 1.1'' (28.0 mm).
[[Page 29999]]
A300 B4-100- Messier-Bugatti A21329-41-17 1.1'' (28.0 mm).
A300 B4-100- ALS (Bendix) 2606802-3/-4/-5 0.9'' (22.9 mm).
A300 B4-100- ALS (Bendix) 2606802-3/-4/-5 1.48'' (37.6 mm)
S.C.*
A300 B4-100- BFGoodrich 2-1449 1.4'' (35.6 mm).
A300 B4-100- BFGoodrich 2-1449 1.1'' (27.9 mm)
S.C.*
A300 B4-200 Messier-Bugatti C20060-100- 1.1'' (28.0 mm).
and A300-600-
A300-600 ALS (Bendix) 2607932-1 0.9'' (22.9 mm).
A300-600 ALS (Bendix) 2607932-1 1.48'' (37.6 mm)
S.C.*
A300 B4-600R Messier-Bugatti C20210000 1.97'' (50.0
mm).
A300 B4-600R Messier-Bugatti C20210200 1.97'' (50.0
mm).
A310-200 Messier-Bugatti C20089000 1.1'' (28.0 mm).
A310-200 ALS (Bendix) 2606822-1 1.26'' (32.0
mm).
A310-200 ALS (Bendix) 2606822-1 1.5'' (38.2 mm)
S.C.*
A310-300 Messier-Bugatti C20194000 1.97'' (50.0
mm).
A310-300 Messier-Bugatti C20194200 1.97'' (50.0
mm).
A310-300 ABS 5010995 1.97'' (50.0
mm).
A320 Messier-Bugatti C20225000 1.97'' (50.0
mm).
A320 Messier-Bugatti C20225200 1.97'' (50.0
mm).
A320 BFGoodrich 2-1526-2 1.97'' (50.0
mm).
A320 BFGoodrich 2-1526-3/-4 2.68'' (68.0
mm).
------------------------------------------------------------------------
* S.C. represents ``Service Configured'' brakes, which are marked
according to the instructions provided in the brake manufacturer's
Component Maintenance Manual (CMM).
Note 2: Measuring instructions that must be revised to
accommodate the new brake wear limits specified in Table 1, above,
can be found in Chapter 32-42-27 of the Airplane Maintenance Manual
(AMM), in Chapter 32-32-( ) or 32-44-( ) of the brake manufacturer's
CMM, or in certain service bulletins (SB), as listed in Table 2,
below:
Table 2
------------------------------------------------------------------------
Date/revision
Brake Part No.-- Document/chapter (or later
manufacturer-- revisions)
------------------------------------------------------------------------
FOR MODEL A300 B2-100 SERIES AIRPLANES:
Messier-Bugatti- 286349-115- CMM 32-42-27- April 1991.
Messier-Bugatti- 286349-116- CMM 32-42-27- April 1991.
BFGoodrich- 2-1449 and S.C.*- CMM 32-44-37 January 1993.
SB 567 (2-1449- January 30,
32-4)- 1993.
FOR MODEL A300 B4-100 SERIES AIRPLANES:
ALS (Bendix)- 2606802-3- CMM 32-42-02- September 1993.
2606802-4 SB 2606802-32- March 31, 1993.
2606802-5 and 003-
S.C.*-
BFGoodrich- 2-1449 and S.C.*- CMM 32-44-37 January 1993.
SB 567 (2-1449- January 30,
32-4)- 1993.
FOR MODEL A300 B4-200 AND A300-600 SERIES AIRPLANES:
ALS (Bendix)- 2607932-1 and CMM 32-42-27 September 1993.
S.C.*- SB 2607932-32- March 31,1993
002- and Revision 1/
October 1, 1993.
FOR MODEL A300 B4-600R SERIES AIRPLANES:
Messier-Bugatti- C20210000 Airbus SB 470-32- April 6, 1990.
and C20210200- 675-
FOR MODEL A310-200 SERIES AIRPLANES:
ALS (Bendix)- 2606822-1 & S.C.*- CMM 32-42-03 September 1993.
SB 2606822-32- March 31, 1993.
002 -
FOR MODEL A310-300 SERIES AIRPLANES:
Messier-Bugatti- C20225000 Airbus SB 470-32- April 6, 1990. --
and C20225200- 675-
------------------------------------------------------------------------
* S.C. represents ``Service Configured'' brakes, which are marked
according to the instructions provided in the brake manufacturer's
CMM.
(2) Incorporate into the FAA-approved maintenance inspection
program the maximum brake wear limits specified in paragraph (a)(1)
of this AD.
Note 3: Once an operator has complied with the requirements of
paragraphs (a)(1) and (a)(2) of this AD, those paragraphs do not
require that operators subsequently record accomplishment of those
requirements each time a brake is inspected or overhauled in
accordance with that operator's FAA-approved maintenance inspection
program.
[[Page 30000]]
NEW REQUIREMENTS OF THIS AD
(b) Within 90 days after the effective date of this AD, revise
the FAA-approved maintenance program to include the requirements of
paragraphs (b)(1), (b)(2), (b)(3), and (b)(4) of this AD.
Accomplishment of these requirements terminates the requirements of
paragraph (a) of this AD.
(1) Incorporate the maximum wear pin limits specified in Table 3
of this AD into the FAA-approved maintenance program.
(2) Comply with those measurements thereafter.
(3) Measure the brake wear in accordance with Chapter 32-42-27
of the AMM, with Chapter 32-32-( ) of the brake manufacturer's CMM,
or with certain service bulletins (SB), as listed in Table 4, below.
Brake wear limits specified in Table 3, below, that are identified
in the service information specified in Table 4, below, as being
dependent on brake stack weights shall be used in conjunction with
the brake stack weights specified in that service information.
(4) If any brake has measured wear beyond the maximum wear
limits specified in Table 3 of this AD, prior to further flight,
replace it with a brake that is within the wear limits specified in
Table 3.
Table 3
Airbus Industrie Model A300, A300-600, A310, and A320 Series Airplanes -
Equipped with Messier-Bugatti, BFGoodrich, Allied Signal (ALS) Aerospace
Company (Bendix), or Aircraft Braking Systems (ABS) Brakes
------------------------------------------------------------------------
Maximum brake
Airplane model/ Brake Brake part No.- wear limit (inch/
series- manufacturer- mm)
------------------------------------------------------------------------
A300 B2-100- Messier-Bugatti- 286349-115- 0.98'' (25.0
mm).
A300 B2-100- Messier-Bugatti- 286349-116- 0.98'' (25.0
mm).
A300 B2-100- BFGoodrich- 2-1449- 1.4'' (35.6 mm).
A300 B2-100- BFGoodrich- 2-1449- 1.1'' (27.9 mm)
S.C.*
A300 B4-100- Messier-Bugatti- A21329-41-7- 1.1'' (28.0 mm).
A300 B4-100- Messier-Bugatti- A21329-41-17- 1.1'' (28.0 mm).
A300 B4-100/-200- ALS (Bendix)- 2606802-3/-4/-5 0.9'' (22.9 mm).
A300 B4-100/-200- ALS (Bendix)- 2606802-3/-4/-5 1.48'' (37.6 mm)
S.C.*
A300-B4-100- BFGoodrich- 2-1449- 1.4'' (35.6 mm).
A300-B4-100- BFGoodrich- 2-1449- 1.1'' (27.9 mm)
S.C.*
A300-600- Messier-Bugatti- C20060-100 1.1'' (28.0 mm).
Series-
A300-600- ALS (Bendix)- 2607932-1- 0.9'' (22.9 mm).
A300-600- ALS (Bendix)- 2607932-1- 1.48'' (37.6 mm)
S.C.*
A300 B4-600R Messier-Bugatti- C20210000 Series- 1.97'' (50.0
mm). -
A300 B4-600R- Messier-Bugatti- C20210200 Series- 1.97'' (50.0
mm). -
A310-200- Messier-Bugatti- C20089000 Series- 1.1'' (28.0 mm).
-
A310-200- ALS (Bendix)- 2606822-1- 1.26'' (32.0
mm).
A310-200- ALS (Bendix)- 2606822-1- 1.5'' (38.2 mm)
S.C.*
A310-300- Messier-Bugatti- C20194000 Series 1.97'' (50.0
- mm). -
A310-300- Messier-Bugatti- C20194200 Series 1.97'' (50.0
- mm). -
A310-300- ABS- 5010995- 2.22'' (56.39
mm).
A320- Messier-Bugatti- C20225000 Series- 1.97'' (50.0
mm).
A320- Messier-Bugatti- C20225200 Series- 1.97'' (50.0
mm). -
A320- BFGoodrich- 2-1526- 1.97'' (50.0
mm).
A320- BFGoodrich- 2-1526-2- 1.97'' (50.0
mm).
A320- BFGoodrich- 2-1526-5- 1.97'' (50.0
mm).
A320- BFGoodrich- 2-1526-3/-4- 2.68'' (68.0
mm).
A320- BFGoodrich- 2-1572- 2.68'' (68.0
mm).
A320- ABS- 5011075- 2.14'' (54.36
mm).
------------------------------------------------------------------------
* S.C. represents ``Service Configured'' brakes, which are marked
according to the instructions provided in the brake manufacturer's
CMM.
Table 4
------------------------------------------------------------------------
Date/revision
Brake Part No. Document/chapter (or later
manufacturer revisions)
------------------------------------------------------------------------
FOR MODEL A300 B2-100 SERIES AIRPLANES:
Messier-Bugatti 286349-115 CMM 32-42-27- April 30, 1991.
Messier-Bugatti 286349-116 CMM 32-42-27- April 30, 1991.
BFGoodrich 2-1449 and S.C.* CMM 32-44-37 January 30,
SB 567 (2-1449- 1993.
32-4)- January 30,1993.
FOR MODEL A300 B4-100 SERIES AIRPLANES:
Messier-Bugatti A21329-41-17 CMM 32-44-37 January 30,
1993.
ALS (Bendix) 2606802-3 CMM 32-42-02 Revision 7/April
2606802-4 SB 2606802-32- 30, 1995.
2606802-5 and 003 March 31, 1993,
S.C.* and
Revision 1/
October 1,
1993.
BFGoodrich- 2-1449 and S.C.* CMM 32-44-37 January 30,
SB 567 (2-1449- 1993.
32-4)- - January 30,
1993.
FOR MODEL A300 B4-200 SERIES AIRPLANES:
Messier-Bugatti C20060-100 Series CMM 32-44-24 December 31,
1991.
ALS (Bendix) 2606802-3 CMM 32-42-02 Revision 7/April
2606802-4 SB 2606802-32- 30, 1995.
2606802-5 and 003 March 31, 1993,
S.C.* and
Revision 1/
October 1,
1993.
[[Page 30001]]
FOR MODEL A300-600 SERIES AIRPLANES:
Messier-Bugatti C20060-100 Series CMM 32-44-24 December 31,
1991.
ALS (Bendix) 2607932-1 and CMM 32-42-05 Revision 4/
S.C.* SB 2607932-32- February
002 15,1992.
SB 2607932-32- March 31,1993,
003 and
Revision 1/
October 1,
1993.
May 31, 1995.
- - FOR MODEL A300 B4-600R SERIES AIRPLANES:
Messier-Bugatti C20210000 CMM 32-44-51 August 31, 1994.
and SB 470-32-675 Revision 1/
C20210200 Series September 26,
1994.
--FOR MODEL A310-200 SERIES AIRPLANES:
Messier-Bugatti C20089000 Series CMM 32-46-23 January 31,
1992.
ALS (Bendix) 2606822-1 and CMM 32-42-03 Revision 5/
S.C. January 31,
SB 2606822-32- 1991.
002 - March 31, 1993.
--FOR MODEL A310-300 SERIES AIRPLANES:
Messier-Bugatti C20194000 and CMM 32-46-37 August 31, 1994.
C20194200 Series SB 470-32-675 Revision 1/
September 26,
1994.
ABS 5010995 CMM 32-43-97 February 28,
1991.
FOR MODEL A320 SERIES AIRPLANES:
Messier-Bugatti C20225000 and CMM 32-47-20 January 31,
C20225200 Series SB 580-32-3042 1995.
Revision 1/June
30, 1995. ---
BFGoodrich 2-1526/-2/-5 CMM 32-44-38 March 15, 1993.
2-1526-3/-4 CMM 32-44-38 March 15, 1993.
2-1572 CMM 32-41-63 April 29, 1994.
ABS 5011075 CMM 32-41-18 February 28,
1991.
------------------------------------------------------------------------
* S.C. represents ``Service Configured'' brakes, which are marked
according to the instructions provided in the brake manufacturer's
CMM.
NOTE 4: Once an operator has complied with the requirement of
paragraph (b) of this AD, that paragraph does not require that the
operator subsequently record accomplishment of those requirements
each time a brake is inspected or overhauled in accordance with that
operator's FAA-approved maintenance inspection program.
(c) Prior to installation of any brake having a part number
other than those specified in Table 3 of this AD, revise the FAA-
approved maintenance program to include the provisions specified in
paragraph (b) of this AD for that part number brake, that have been
approved by the Manager, Standardization Branch, ANM-113, FAA,
Transport Airplane Directorate.
-(d) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Standardization Branch, ANM-113.
Operators shall submit their requests through an appropriate FAA
Principal Maintenance Inspector, who may add comments and then send
it to the Manager, Standardization Branch, ANM-113.
Note 5: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Standardization Branch, ANM-113.
-(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished. Issued in Renton,
Washington, on June 6, 1996.
James V. Devany,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-14988 Filed 6-12-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-14966 Approval and Promulgation of Air Quality Implementation Plans; Virginia; Proposed Approval of Alternative Compliance Plans for the Reynolds Metals Graphic Arts Plants
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Page 30023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14966]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[VA010-5545b; FRL-5514-7]
Approval and Promulgation of Air Quality Implementation Plans;
Virginia; Proposed Approval of Alternative Compliance Plans for the
Reynolds Metals Graphic Arts Plants
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA proposes to approve the State Implementation Plan (SIP)
revision submitted by the Commonwealth of Virginia for the purpose of
establishing alternative compliance plans for the Reynolds Metals--
Bellwood and South Plants located in Richmond, Virginia. In the Final
Rules section of this Federal Register, EPA is approving the State's
SIP revision as a direct final rule without prior proposal because the
Agency views this as a noncontroversial SIP revision and anticipates no
adverse comments. A detailed rationale for the approval is set forth in
the direct final rule. If no adverse comments are received in response
to this proposed rule, no further activity is contemplated in relation
to this rule. If EPA receives adverse comments, the direct final rule
will be withdrawn and all public comments received will be addressed in
a subsequent final rule based on this proposed rule. EPA will not
institute a second comment period on this action. Any parties
interested in commenting on this action should do so at this time.
DATES: Comments must be received in writing by July 15, 1996.
ADDRESSES: Written comments on this action should be addressed to
Marcia L. Spink, Associate Director, Air Programs, Mailcode 3AT00, U.S.
Environmental Protection Agency, Region III, 841 Chestnut Building,
Philadelphia, Pennsylvania 19107. Copies of the documents relevant to
this action are available for public inspection during normal business
hours at the Air, Radiation, and Toxics Division, U.S. Environmental
Protection Agency, Region III, 841 Chestnut Building, Philadelphia,
Pennsylvania 19107 and the Virginia Department of Environmental
Quality, 629 East Main Street, Richmond, Virginia 23219.
FOR FURTHER INFORMATION CONTACT: Marcia L. Spink, (215) 566-2104.
SUPPLEMENTARY INFORMATION: See the information provided in the Direct
Final action of the same title which is located in the Rules and
Regulations Section of this Federal Register.
Authority: 42 U.S.C. 7401-7671q.
Dated: May 17, 1996.
W. Michael McCabe,
Regional Administrator, Region III.
[FR Doc. 96-14966 Filed 6-12-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-14964 Approval and Promulgation of Implementation Plans; Indiana
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30023-30024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14964]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[IN61-1-7230b; FRL-5509-6]
Approval and Promulgation of Implementation Plans; Indiana
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The EPA proposes to approve the State Implementation Plan
(SIP) revision request submitted by the State of Indiana on September
19, 1995, and November 8, 1995, which establishes regulations for
suppliers and users of automobile/mobile equipment refinishing coatings
in Clark, Floyd, Lake, and Porter Counties. In the final rules section
of this Federal Register, the EPA is approving this action as a direct
final rule without prior proposal because EPA views this as a
noncontroversial action and anticipates no adverse comments. A detailed
rationale for the approval is set forth in the direct final rule. If no
adverse comments are received in response to that direct final rule, no
further activity is contemplated in relation to this proposed rule. If
EPA receives adverse comments, the direct final rule will be withdrawn
and all public comments received will be addressed in a subsequent
final rule based on the proposed rule. Any parties interested in
[[Page 30024]]
commenting on this document should do so at this time.
DATES: Comments on this proposed rule must be received on or before
July 15, 1996.
ADDRESSES: Written comments should be mailed to: J. Elmer Bortzer,
Chief, Regulation Development Section, Air Programs Branch (AR18-J),
Environmental Protection Agency, Region 5, 77 West Jackson Boulevard,
Chicago, Illinois 60604.
Copies of the State submittal are available for inspection at:
Regulation Development Section, Air Programs Branch (AR18-J),
Environmental Protection Agency, Region 5, 77 West Jackson Boulevard,
Chicago, Illinois 60604.
FOR FURTHER INFORMATION CONTACT: Mark J. Palermo, Regulation
Development Section, Air Programs Branch (AR-18J), Environmental
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago,
Illinois 60604, (312) 886-6082.
SUPPLEMENTARY INFORMATION: For additional information see the direct
final rule published in the rules section of this Federal Register.
Dated: May 13, 1996.
Valdas V. Adamkus,
Regional Administrator.
[FR Doc. 96-14964 Filed 6-12-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-14963 Northeast Multispecies Fishery; Amendment 7; Resubmission of Disapproved Measure for an Open Access Permit for Nonregulated Multispecies
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30028-30030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14963]
=======================================================================
-----------------------------------------------------------------------
[[Page 30029]]
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 651
[Docket No. 960216032-6158-05; I.D. 052196A]
Northeast Multispecies Fishery; Amendment 7; Resubmission of
Disapproved Measure for an Open Access Permit for Nonregulated
Multispecies
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Proposed rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: NMFS proposes regulations to implement a revised measure that
was disapproved in the preliminary evaluation of Amendment 7 to the
Northeast Multispecies Fishery Management Plan (FMP) as revised and
resubmitted by the New England Fishery Management Council (Council).
This revision would rename the existing open access Possession Limit
Permit, and allow certain fisheries to continue under this permit
category that would otherwise be prohibited by Amendment 7. The
intended effect of this action is to continue to allow fishing for
nonregulated multispecies (silver hake, red hake, and ocean pout) by
vessels that do not qualify for a limited access multispecies permit.
DATES: Comments on this proposed rule must be received by July 1, 1996.
ADDRESSES: Comments should be sent to Dr. Andrew A. Rosenberg,
Director, NMFS, Northeast Regional Office, 1 Blackburn Drive,
Gloucester, MA 01930. Mark on the outside of the envelope ``Comments on
Possession Limit Permit Category.''
FOR FURTHER INFORMATION CONTACT: Peter W. Christopher, Fishery
Management Specialist, 508-281-9288.
SUPPLEMENTARY INFORMATION: The Council submitted Amendment 7 to the FMP
on February 5, 1996. After a preliminary evaluation, the following
three measures in the amendment were disapproved on February 14, 1996:
An additional allowance of days-at-sea (DAS) for trawl vessels enrolled
in the Individual DAS category that use 8-inch (20.32 cm) mesh, a 300-
lb (136.1 kg) possession limit of regulated species for vessels that
use 8-inch (20.32 cm) mesh in an exempted fishery, and the
establishment of a limited access category for vessels that fished in
the Possession Limit Open Access category under Amendment 5. The
remainder of Amendment 7 was published as a proposed rule on March 5,
1996 (61 FR 8540). The first two of the three disapproved measures were
resubmitted by the Council. The measure that would have allowed a 300-
lb (136.1 kg) regulated species possession limit for vessels fishing
with 8-inch (20.32 cm) mesh in an exempted fishery was again
disapproved, and the measure that would give additional multispecies
DAS to all limited access multispecies vessels fishing exclusively with
large mesh was published as a proposed rule on April 18, 1996 (61 FR
16892), and was added to the final rule to implement Amendment 7, which
was published on May 31, 1996 (61 FR 27710). Pursuant to section
304(b)(3)(A) of the Magnuson Fishery Conservation and Management Act
(Magnuson Act), the Council has resubmitted the measure that would
implement a possession limit permit by revising it to allow possession
of nonregulated multispecies, defined to be silver hake, red hake, and
ocean pout. This proposed permit is now named the ``open access
nonregulated multispecies permit.''
On February 27-28, 1996, the Council discussed the three
disapproved measures and voted to resubmit revisions of the first and
second while deferring action on the third measure pending further
discussions. The third measure disapproved by NMFS was the proposed
implementation of a limited access possession limit permit under the
FMP. An inequity would have been established if this measure were
implemented, because vessels would have to qualify for a permit that
would not allow fishing for regulated multispecies, whereas, if vessel
owners selected an open access category and used appropriate gear, they
would be allowed to catch regulated and nonregulated multispecies.
Furthermore, an administrative burden would have been created because
vessel permit applications would have to be processed through a review
procedure to qualify for the permit, with a possibility that no fishing
for multispecies finfish would be allowed after this time.
Subsequent to the disapproval of this measure, several affected
fishermen contacted the Council and indicated that, if an open access
permit for nonregulated multispecies were not established, they would
be denied an opportunity to fish for or retain a bycatch of
nonregulated multispecies. The fishermen indicated that this would
occur even though the impact of their activities on regulated species
would be controlled by the fishery exemption program that only allows
those fisheries that have a minimal bycatch of regulated species.
On April 17-18, 1996, the Council passed a motion to resubmit the
proposed possession limit permit category, redefining it as an open
access permit category for nonregulated species and renaming it the
``Nonregulated Multispecies'' permit category. This permit category
would allow fishing for nonregulated multispecies by vessels using
various gear types that do not qualify for a limited access
multispecies permit and would eliminate any inequity or administrative
burden associated with the need to qualify for a permit. The Council
believes that implementation of this permit category jeopardizes
neither the nonregulated multispecies, because they are not currently
categorized as overfished, nor the regulated species, because a fishery
allowed under this permit would be required to be exempted and meet the
regulated multispecies bycatch limit of 5 percent.
Classification
Section 304(a)(1)(D)(ii) of the Magnuson Act, as amended, requires
NMFS to publish implementing regulations proposed by a Council within
15 days of the receipt of an amendment and proposed regulations. At
this time, NMFS has not determined whether the amendment this rule
would implement is consistent with the national standards, other
provisions of the Magnuson Act, and other applicable law. NMFS, in
making that determination, will take into account the information,
views and comments received during the comment period.
This proposed rule has been determined to be not significant for
purposes of E.O. 12866.
The Assistant General Counsel for Legislation and Regulation of the
Department of Commerce certified to the Chief Counsel for Advocacy of
the Small Business Administration that this proposed rule, if adopted,
would not have a significant economic impact on a substantial number of
small entities. Vessels benefitting from this open access permit could
have an increase in gross ex-vessel revenues of more than 5 percent
compared to the status quo. However, the number of small entities being
affected in this manner is believed to be much less than 20 percent of
the vessels that are in the Northeast multispecies fishery (all of
which are considered small entities). No vessels are expected to cease
operations if the proposed action is implemented, nor are
[[Page 30030]]
vessels expected to incur increased operating costs. As a result, a
regulatory flexibility analysis was not prepared.
List of Subjects in 50 CFR Part 651
Fisheries, Fishing, Reporting and recordkeeping requirements.
Dated: June 6, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
For the reasons set out in the preamble, 50 CFR part 651 is
proposed to be amended as follows:
PART 651--NORTHEAST MULTISPECIES FISHERY
1. The authority citation for part 651 continues to read as
follows:
Authority: 16 U.S.C. 1801 et seq.
2. In Sec. 651.2, the definition for ``Nonregulated Multispecies''
is added in alphabetical order to read as follows:
Sec. 651.2 Definitions.
* * * * *
Nonregulated Multispecies means the subset of multispecies finfish
that includes silver hake, red hake, and ocean pout.
* * * * *
3. In Sec. 651.4, paragraph (c) is revised to read as follows:
Sec. 651.4 Vessel permits.
* * * * *
(c) Open access permits. Subject to the restrictions in
Sec. 651.33, a U.S. vessel that has not been issued a limited access
multispecies permit may obtain an open access Handgear, Charter/Party
or Nonregulated Multispecies permit. Vessels that are issued a valid
scallop limited access permit under Sec. 650.4 of this chapter may
obtain an open access Scallop Multispecies Possession Limit permit.
* * * * *
4. In Sec. 651.33, paragraph (d) is added to read as follows:
Sec. 651.33 Open access permit restrictions.
* * * * *
(d) A vessel issued a valid open access Nonregulated Multispecies
permit issued under Sec. 651.4(c) may possess nonregulated
multispecies, provided it does not fish for, possess, or land regulated
species. The vessel is subject to restrictions on gear, area, and time
of fishing specified in Sec. 651.20.
[FR Doc. 96-14963 Filed 6-10-96; 12:26 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-14962 Approval and Promulgation of Implementation Plans; Indiana
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Page 30023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14962]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[IN59-1-7217b; FRL-5510-8]
Approval and Promulgation of Implementation Plans; Indiana
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: On August 29, 1995, the State of Indiana submitted a State
Implementation Plan (SIP) revision request to the EPA for rule changes
specific to Allison Engine Company (Allison) plants 5 and 8 located in
Marion County, Indiana. The EPA proposes to approve Indiana's request.
In the final rules section of this Federal Register, the EPA is
approving this action as a direct final rule without prior proposal
because the EPA views this as a noncontroversial action and anticipates
no adverse comments. A detailed rationale for the approval is set forth
in the direct final rule. If no adverse comments are received in
response to that direct final rule, no further activity is contemplated
in relation to this proposed rule. If the EPA receives adverse
comments, the direct final rule will be withdrawn and all public
comments received will be addressed in a subsequent final rule based on
the proposed rule. The EPA will not institute a second comment period
on this action. Any parties interested in commenting on this notice
should do so at this time.
DATES: Comments on this proposed rule must be received on or before
July 15, 1996.
ADDRESSES: Written comments should be mailed to: J. Elmer Bortzer,
Chief, Regulation Development Section, Air Programs Branch (AR-18J),
U.S. Environmental Protection Agency, Region 5, 77 West Jackson
Boulevard, Chicago, Illinois 60604.
Copies of the State submittal and the EPA's analysis of it are
available for inspection at: Regulation Development Section, Air
Programs Branch (AR-18J), U.S. Environmental Protection Agency, Region
5, 77 West Jackson Boulevard, Chicago, Illinois 60604.
FOR FURTHER INFORMATION CONTACT: David Pohlman, Regulation Development
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection
Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604,
(312) 886-3299.
SUPPLEMENTARY INFORMATION: For additional information see the direct
final rule published in the rules section of this Federal Register.
Dated: May 15, 1996.
Valdas V. Adamkus,
Regional Administrator.
[FR Doc. 96-14962 Filed 6-12-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-14954 Airworthiness Directives; The New Piper Aircraft, Inc. (Formerly Piper Aircraft Corporation) Model PA31T2 Airplanes
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 29992-29994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14954]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-CE-21-AD]
RIN 2120-AA64
Airworthiness Directives; The New Piper Aircraft, Inc. (Formerly
Piper Aircraft Corporation) Model PA31T2 Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Supplemental notice of proposed rulemaking (NPRM); Reopening of
the comment period.
-----------------------------------------------------------------------
SUMMARY: This document proposes to revise an earlier proposed
airworthiness directive (AD), which would have required rerouting the
landing gear emergency extension air line on The New Piper Aircraft,
Inc. (Piper) Model PA31T2 airplanes that have Parker Hannifin Wheel and
Brake Conversion Kit 199-111 incorporated in accordance with
Supplemental Type Certificate (STC) SA599GL. Three incidents of the
brake cylinder contacting the landing gear emergency extension air line
on both wheel wells of the affected airplanes prompted the proposal.
Since issuance of the proposal, the Federal Aviation Administration
(FAA) has determined that additional serial numbers of Piper Model
PA31T2 airplanes should be included in the Applicability section of the
proposed AD, and that revised service information should be
incorporated. The actions specified by the proposed AD are intended to
prevent the brake cylinder from chafing against the landing gear
emergency extension air line when the gear is in the up and locked
position, which could result in damage to the air line and subsequent
loss of emergency gear extension capability. Since the comment period
for the original proposal has closed and the change described above
goes beyond the scope of what was originally proposed, the FAA is
allowing additional time for the public to comment.
DATES: Comments must be received on or before August 16, 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-21-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 Parker Hannifin Corporation, Aircraft Wheel & Brake, 1160
Center Road, P.O. Box 158, Avon, Ohio 44011; telephone (216) 937-6211;
facsimile (216) 937-5409. This information also may be examined at the
Rules Docket at the address above.
FOR FURTHER INFORMATION CONTACT: Mr. Nick Miller, Aerospace Engineer,
FAA, Chicago Aircraft Certification Office, FAA, 2300 East Devon
Avenue, Des Plaines, Illinois 60018; telephone (847) 294-7837;
facsimile (847) 294-7834.
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
[[Page 29993]]
supplemental 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 supplemental notice must submit a self-
addressed, stamped postcard on which the following statement is made:
``Comments to Docket No. 95-CE-21-AD.'' The postcard will be date
stamped and returned to the commenter.
Availability of Supplemental NPRM
Any person may obtain a copy of this supplemental NPRM by
submitting a request to the FAA, Central Region, Office of the
Assistant Chief Counsel, Attention: Rules Docket No. 95-CE-21-AD, Room
1558, 601 E. 12th Street, Kansas City, Missouri 64106.
Discussion
A proposal to amend part 39 of the Federal Aviation Regulations (14
CFR part 39) to include an AD that would apply to certain Piper Model
PA31T2 airplanes that have Parker Hannifin Wheel and Brake Conversion
Kit 199-111 incorporated in accordance with STC SA599GL was published
in the Federal Register on April 17, 1995 (60 FR 19174). The action
proposed to require rerouting the landing gear emergency extension air
line. Accomplishment of the proposed action would be in accordance with
Parker Hannifin Service Bulletin SB7034, dated March 23, 1994 (since
revised to Revision B, dated December 19, 1995).
Interested persons have been afforded an opportunity to participate
in the making of this amendment. No comments were received on the
proposed rule or the FAA's determination of the cost to the public.
Since issuance of the notice of proposed rulemaking (NPRM), the FAA
has determined that the Applicability section of the proposed AD should
be revised to include additional serial numbers of Piper Model PA31T2
airplanes. In addition, Parker Hannifin Service Bulletin SB7034 has
been revised (Revision B, dated December 19, 1995) to reflect the Piper
Model PA31T2 airplane serial numbers change.
Evaluation of All Applicable Information
After examining the circumstances and reviewing all available
information related to the subject described above, including the
comments received, the FAA has determined that the NPRM should be
revised to include the above-referenced serial number change and
revised service bulletin, and that AD action should still be taken to
prevent brake cylinders from chafing against the landing gear emergency
extension air line when the gear is in the up and locked position. This
condition could result in damage to the air line and subsequent loss of
emergency gear extension capability.
Since this revision of the NPRM to add serial numbers for the Piper
Model PA31T2 airplanes proposes actions that go beyond the scope of
what was already proposed, the FAA is reopening the comment period to
allow the public additional time to comment on this proposed action.
Explanation of the Provisions of the Proposed AD
Since an unsafe condition has been identified that is likely to
exist or develop in other Piper Model PA31T2 airplanes of the same type
design that have a Parker Hannifin Wheel and Brake Conversion Kit 199-
111 incorporated in accordance with STC SA599GL, the proposed AD would
require rerouting the landing gear emergency extension air line.
Accomplishment of the proposed action would be in accordance with
Parker Hannifin Service Bulletin SB7034, Revision B, dated December 19,
1995.
Cost Impact
The FAA has determined that there are 62 Piper Model PA31T2
airplanes in the U.S. registry that could incorporate a Parker Hannifin
Wheel and Brake Conversion Kit 199-111 (in accordance with STC
SA599GL), that it would take approximately 4 workhours per airplane to
accomplish the proposed action, and that the average labor rate is
approximately $60 an hour. Parts cost approximately $20 per airplane.
Based on these figures, the total cost impact of the proposed AD on
U.S. operators could be as much as $16,120 if all affected airplanes
had the referenced conversion kit installed.
Parker Hannifin has informed the FAA that it has distributed 31
kits (shipped after March 28, 1994) to Piper Model PA31T2 airplane
owners/operators. Kits shipped after March 28, 1994, included the
replacement parts referenced in Parker Hannifin SB7034, Revision B.
Based on each of the 31 kits being incorporated on an affected
airplane, the cost impact of the proposed AD on U.S. owners and
operators would be reduced 50 percent from $16,120 to $8,060. The
reduction results from the difference between the 62 airplanes that are
type certificated to have a Parker Hannifin Wheel and Brake Conversion
Kit 199-111 incorporated (in accordance with STC SA599GL) and the 31
kits that have already been distributed.
Regulatory Impact
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
part 39 of the Federal Aviation Regulations (14 CFR part 39) 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.
[[Page 29994]]
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding a new airworthiness directive
(AD) to read as follows:
The New Piper Aircraft, Inc.: Docket No. 95-CE-21-AD.
Applicability: Model PA31T2 airplanes (serial numbers 31T-
8166001 through 31T-8166062), certificated in any category, that
have a Parker Hannifin Wheel and Brake Conversion Kit 199-111
incorporated in accordance with Supplemental Type Certificate (STC)
SA599GL.
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 the next 100 hours time-in-service
after the effective date of this AD, unless already accomplished.
To prevent the brake cylinder from chafing against the landing
gear emergency extension air line when the gear is in the up and
locked position, which could result in damage to the air line and
subsequent loss of emergency gear extension capability, accomplish
the following:
(a) Reroute the landing gear emergency extension air line in
accordance with the ACCOMPLISHMENT INSTRUCTIONS section of Parker
Hannifin Service Bulletin SB7034, Revision B, dated December 19,
1995.
(b) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(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, Chicago Aircraft Certification Office
(ACO), FAA, 2300 East Devon Avenue, Des Plaines, Illinois 60018. The
request shall be forwarded through an appropriate FAA Maintenance
Inspector, who may add comments and then send it to the Manager,
Chicago ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Chicago ACO.
(d) All persons affected by this directive may obtain copies of
the document referred to herein upon request to the Parker Hannifin
Corporation, Aircraft Wheel & Brake, 1160 Center Road, P.O. Box 158,
Avon, Ohio 44011; 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.
Issued in Kansas City, Missouri, on June 4, 1996.
Henry A. Armstrong,
Acting Manager, Small Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-14954 Filed 6-12-96; 8:45 am]
BILLING CODE 4910-13-P
Complete official Federal Register PDF
FR Doc. 96-14894 Internal Analgesic, Antipyretic, and Antirheumatic Drug Products for Over-the-Counter Human Use; Proposed Amendment to the Tentative Final Monograph
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30001-30009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14894]
=======================================================================
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[[Page 30002]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 343
[Docket No. 77N-094A]
RIN 0910-AA01
Internal Analgesic, Antipyretic, and Antirheumatic Drug Products
for Over-the-Counter Human Use; Proposed Amendment to the Tentative
Final Monograph
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is proposing to amend
the tentative final monograph for over-the-counter (OTC) internal
analgesic, antipyretic, and antirheumatic drug products to include the
use of aspirin, buffered aspirin, and aspirin in combination with
antacid to reduce the risk of vascular mortality in people with a
suspected acute myocardial infarction (MI). This proposal is in
response to two citizen petitions and is part of the ongoing review of
OTC drug products conducted by FDA.
DATES: Submit written comments by September 11, 1996. Written comments
on the agency's economic impact determination by September 11, 1996.
The agency is proposing that any final rule that may issue based on
this proposal be effective 12 months after the date of its publication
in the Federal Register.
ADDRESSES: Written comments to the Dockets Management Branch (HFA-305),
Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23, Rockville,
MD 20857.
FOR FURTHER INFORMATION CONTACT: William E. Gilbertson, Center for Drug
Evaluation and Research (HFD-105), Food and Drug Administration, 5600
Fishers Lane, -Rockville, MD 20857, 301-827-2304.
SUPPLEMENTARY INFORMATION:
I. Introduction
In the Federal Register of November 16, 1988 (53 FR 46204), the
agency published a tentative final monograph (TFM) to establish
conditions under which OTC internal analgesic, antipyretic, and
antirheumatic drug products are generally recognized as safe and
effective and not misbranded (hereinafter referred to as the 1988 TFM).
The 1988 TFM included professional labeling for drug products
containing aspirin, buffered aspirin, and aspirin in combination with
an antacid for certain cardiovascular and cerebrovascular uses to: (1)
Reduce the risk of death and/or nonfatal MI in patients with a previous
infarction or unstable angina pectoris, and (2) reduce the risk of
recurrent transient ischemic attacks (TIA's) or stroke in men who have
had transient ischemia of the brain due to fibrin platelet emboli.
The agency has received two citizen petitions (Refs. 1 and 2),
submitted in accord with Sec. 10.30 (21 CFR 10.30), requesting that the
professional labeling section of the monograph for OTC internal
analgesic, antipyretic, and antirheumatic drug products be amended to
include an indication for the use of aspirin in treating acute MI. One
petition included reports of four studies to support this indication.
The petitions are on public display in the Dockets Management Branch
(address above).
FDA has reviewed the information in the petitions and finds that it
supports the safety and effectiveness of aspirin, buffered aspirin, or
aspirin in combination with antacid to reduce the risk of vascular
mortality in patients with a suspected acute MI. Therefore, the agency
is proposing to amend the professional labeling in Sec. 343.80 of the
1988 TFM for OTC internal analgesic drug products to include
information on aspirin, buffered aspirin, or aspirin in combination
with antacid for this indication. Final agency action on this proposal
will occur in a future issue of the Federal Register.
II. The Citizen Petitions
A. The Agency's Evaluation of the Citizen Petitions
One citizen petition (Ref. 1) included reports of four clinical
trials conducted to evaluate the safety and effectiveness of aspirin in
treating acute MI (Refs. 3 through 6). The petition cited the results
of the Second International Study of Infarct Survival (ISIS-2) (Ref. 3)
as primary support for the safety and effectiveness of aspirin in the
treatment of acute MI to reduce the risk of fatal and nonfatal
cardiovascular and cerebrovascular events.
The ISIS-2 study was undertaken after a pilot study (Ref. 7) of 619
subjects suggested that aspirin was effective in reducing the incidence
of nonfatal reinfarction, death, and stroke in subjects with suspected
acute MI. The ISIS-2 study was a 2 x 2 factorial study of 17,187
subjects (both men and women) with suspected acute MI, randomized so
that 8,592 subjects received a single dose of streptokinase (1.5
million units (MU)) and 8,595 received an intravenous placebo
(hepatitis-B-antigen-free albumin). Streptokinase or placebo was
intravenously infused over about 1 hour in 50 to 200 milliliters of
physiological saline. Of the subjects, 8,587 were also allocated
randomly to receive oral aspirin (162.5 milligrams (mg), enteric-
coated) daily for 1 month (the first dose crushed, sucked, or chewed),
and 8,600 received oral placebo (enteric-coated starch tablets). Thus,
within 24 hours of the onset of symptoms, 4,300 subjects received
streptokinase plus oral placebo, 4,295 received aspirin plus placebo
infusion, 4,292 received both active treatments, and 4,300 received
double placebo. Subjects in whom acute MI was suspected but not
confirmed were eligible for the study if they were entered within 24
hours of the onset of symptoms and had no clear indication for, or
contraindication to, streptokinase or aspirin. Subjects from 417
hospitals in 16 countries were included in the study. Information
collected and recorded prior to randomization included patient
identifiers, age, systolic blood pressure, hours from onset of pain,
aspirin use in the week prior to admission, and details concerning the
planned treatment. Ancillary treatment (including treatment with
aspirin) was not restricted. Electrocardiogram (ECG) results were not
used as a basis for randomization. Once enrolled, subjects remained in
the assigned treatment group for an intent-to-treat analysis of
results.
An ECG done prerandomization was submitted along with information
on compliance with the study treatment, other drug use, and adverse
events. Observers blind to the treatment assignment read the ECG's and
reviewed the deaths. Causes of death were categorized as ``vascular''
or ``nonvascular.'' The protocol defined vascular deaths as those
attributed to cardiac, cerebral, hemorrhagic, other vascular, or
unknown causes. Further details of reports of stroke were collected for
blinded review by a neurologist.
Three primary analyses were conducted to assess the following
effects: (1) Streptokinase on vascular mortality during the first 35
days, (2) streptokinase on vascular mortality during the entire study
period (a median followup of 15 months), and (3) oral daily aspirin on
vascular mortality during the first 35 days. The effects of allocated
treatment on clinical events (reinfarction, cardiac rupture, cardiac
arrest, bleeding, and stroke) and on nonvascular mortality were also
[[Page 30003]]
evaluated. Although not specified in the protocol, subgroup analysis on
vascular mortality in days 0 to 35 was performed for certain
parameters, such as age, gender, diabetes, and systolic blood pressure.
Results were presented as absolute changes and as changes in the
odds of death. The report states: ``* * * a change from 10 percent dead
(odds 10/90) to 8 percent dead (odds 8/92) involves an odds ratio of 8/
92 divided by 10/90, or 0.78, and is therefore described as a 22
percent reduction in the odds of death (rather than as a 20 percent
reduction in the risk of death).'' (A change from 10 percent dead (risk
10/100) to 8 percent dead (risk 8/100) would represent a 20 percent
reduction in risk of death.)
During the first 35 days, there were 804 (9.4 percent) vascular
deaths in the 8,587 subjects randomized to receive oral aspirin, and
1,016 (11.8 percent) vascular deaths in the 8,600 subjects randomized
to placebo. These results represent an absolute reduction of 2.4
percent in the mean 35-day vascular mortality attributable to aspirin
and a highly significant (23 percent) reduction in the odds of vascular
death (2p < 0.00001, confidence interval 15 to 30 percent). Although
not an endpoint specified in the protocol, an effect of aspirin was
still present after the median 15-month followup was completed, with a
total reduction of early and late vascular mortality of 1.9 percent,
highly significant (2p < 0.001).
The number of nonvascular deaths in subjects allocated to receive
aspirin was not significantly different from subjects receiving placebo
for the 15-month median followup. One nonvascular death occurred before
5 weeks, and 24 deaths occurred after 5 weeks in the aspirin group,
compared to 7 and 32, respectively, in the placebo group. Total
mortality (vascular plus nonvascular) was reduced at both 35 days (9.4
percent versus 11.9 percent, odds ratio 0.77) and after 15 months
median followup (16.0 percent versus 18.1 percent odds ratio 0.87) for
the aspirin group and placebo group). The reduction in all-cause
mortality was highly significant (2p < 0.001) at both times.
The beneficial effects of aspirin on vascular mortality in days 0
to 35 was found to be independent of streptokinase infusion. (See Table
1.)
Table 1.--Beneficial Effects of Aspirin on Vascular Mortality in Days 0
To 35
----------------------------------------------------------------------------------------------------------------
Percent Percent
Treatment\1\ Tablet/Infusion Vascular Deaths/No. of Subjects Percent Absolute Reduction in
Change Odds of Death
----------------------------------------------------------------------------------------------------------------
A/S+A/P 804/8,587\2\ 9.4
vs
P/S+P/P 1,016/8,600\3\- 11.8 -2.4 23
(2p<0.00001)
A/P 461/4,295 10.7
vs
P/P 568/4,300 13.2 -2.5- 21 (2p<0.001)
A/S 343/4,292 8.0
vs
P/S 448/4,300 10.4 -2.4 25 (2p<0.001)
A/S 343/4,292 8.0
vs
P/P 568/4,300 13.2 -5.2- 42
(2p<0.00001)
A/S 343/4,292 8.0
vs
A/P 461/4,295 10.7 -2.7- 28 (2p<0.0001)
P/S 448/4,300 10.4
vs
P/P- 568/4,300 13.2 -2.8 23 (2p<0.0001)
A/S+P/S 791/8,592\4\- 9.2
vs
A/P+P/P 1,029/8,595\5\ 12.0 -2.8 25
(2p<0.00001)
----------------------------------------------------------------------------------------------------------------
\1\ A=aspirin, S=streptokinase, and P=placebo.
\2\ Inludes 4,295 allocated aspirin tablets + placebo infusion and 4,292 allocated aspirin tablets +
streptokinase infusion.
\3\ Includes 4,300 allocated placebo tablets + placebo infusion and 4,300 allocated placebo tablets +
streptokinase infusion.
\4\Includes 4,292 allocated aspirin tablets + placebo infusion and 4,300 allocated streptokinase infusion +
placebo tablets.
\5\Includes 4,295 allocated aspirin tablets + placebo infusion and 4,300 allocated placebo tablets + placebo
infusion.
Each subject received one tablet and one infusion (e.g., each
subject was allocated either a single active ingredient plus placebo,
both active ingredients, or two placebos). Aspirin reduced the odds of
death within 35 days by 25 percent (standard deviation (SD) 6) in
people who were also given streptokinase infusion, and by 21 percent
(SD 6) in people given a placebo infusion (2p < 0.001). Thus, aspirin
was effective in reducing mortality both in the presence and absence of
streptokinase.
Similarly, there were significantly fewer deaths in the
streptokinase group compared to the placebo both in the presence and
absence of aspirin. The effect of the combined therapy of aspirin plus
streptokinase was approximately additive. The 35-day vascular mortality
of the group that received aspirin plus streptokinase was 8 percent
compared to 13.2 percent for the double-placebo group. These results
represent an absolute reduction of 5.2 percent and a 42-percent
reduction in odds of death in
[[Page 30004]]
the aspirin plus streptokinase group (2p < 0.00001).
-When specific clinical events (fatal plus nonfatal) that occurred
in the hospital were evaluated separately, statistically significant
absolute reductions favoring aspirin were found for reinfarction (1.5
percent absolute reduction, 45 percent odds reduction, 2p < 0.00001),
cardiac arrest (1.2 percent absolute reduction, 14.2 percent odds
reduction, 2p < 0.01), and total stroke (0.4 percent absolute
reduction, 41.5 percent odds reduction, 2p < 0.01). Moreover, the
effect of aspirin over and above its effect on mortality was evidenced
by small, but significant, reductions in vascular morbidity in those
subjects who were discharged.
-The combination of streptokinase infusion and daily aspirin was
significantly better than either active treatment alone for vascular
mortality (See Table 1). The differences in favor of aspirin plus
streptokinase compared to double placebo for specific clinical events
were 1.1 percent in reinfarction, 2.5 percent in cardiac arrest, and
0.5 percent (2p = 0.02) in total stroke. The effects of aspirin and
aspirin in combination with streptokinase on major clinical events that
occurred in a hospital is shown in Table 2.
Table 2.--Effects of Aspirin and Aspirin plus Streptokinase on Major
Clinical Events in Hospital
----------------------------------------------------------------------------------------------------------------
Aspirin Aspirin plus Streptokinase
-----------------------------------------------------------------------------------------------
Percent Placebo Percent
Asprin Tablets Placebo Absolute Aspirin and Infusion and Absolute
Tablets Change Streptokinase Tablet Change
----------------------------------------------------------------------------------------------------------------
Number
randomized 8,587 8,600 4,292 4,300
Number
discharged
alive 8,492 8,489 4,239 4,238
Reinfarction
(any) 156 284 1.5 77 123 1.1
(any
discharged
alive) 83 170 1.0 46 61 0.4
Cardiac rupture
(any) 69 81 0.1 31 38 0.2
(any
discharged
alive) 7 5 0.0 2 1 0.0
Cardiac arrest
(any) 690- 793 1.2 311 417 2.5
(any
discharged
alive) 259 289 0.4 133 129 -0.1
Stroke (any)- 47 81 0.4 25 45 0.5
(fatal) 20 30 0.1 12 18 0.1
(disabled) 17 23 0.1 9 15 0.1
(not disabled) 10 28 0.2 4 12 0.2
(hemorrhagic) 5 2 0.0 5 0 -0.1
(any
discharged
alive) 27 51 0.3 13 27 0.3
Major bleeds
(transfused) 31- 33 0.0- 24 11 -0.3
Minor bleeds
(not
transfused) 215 163 -0.6 167 33 -3.2
----------------------------------------------------------------------------------------------------------------
Subgroup analysis was done for 35-day vascular mortality for 3,945
women assigned to either aspirin (1,994) or oral placebo (1,951), and
for 13,125 men assigned to aspirin (6,540) or oral placebo (6,585).
Vascular mortality was higher in women than men in both the placebo and
the aspirin group, but the absolute reduction of risk of vascular death
was 2.6 percent for women and 2.4 percent for men, representing a 19
percent (p = 0.018) odds reduction for women and a 25 percent (p <
0.0001) odds reduction for men. These data suggest that beneficial
effects of aspirin may be expected in treating both men and women for
an acute MI.
Subgroup analyses suggest that all age groups analyzed benefited
from aspirin. There were 1 percent fewer vascular deaths recorded for
3,870 subjects under 60 years of age who received aspirin than for
3,850 subjects who received oral placebo (18 percent relative risk
reduction). In subjects 60 to 69 years old, 3.1 percent fewer vascular
deaths were recorded for 2,999 subjects who received aspirin than for
3,057 subjects who received placebo (22 percent relative risk
reduction). Subjects over 70 years old (1,718 on aspirin versus 1,693
on placebo) appeared to have the greatest (4.7 percent) absolute
reduction in vascular death. The relative risk reduction in subjects
over 70 years old was 21 percent for those who received aspirin.--
However, the agency agrees with the investigators' conclusion that
more weight should be placed on the overall results than on any
particular subgroup of people. The agency has determined that the
evidence is insufficient at present to validate efficacy results in
particular subsets of patients with suspected acute MI.
The principal entry criterion for subjects in the ISIS-2 study was
that the responsible physician suspected acute MI based on clinical
presentation. The protocol did not require that MI be documented in
those entering the study. The agency notes that the only preliminary
indications of an MI are chest pain and changes in the ECG. The report
did not indicate how many of the subjects actually had an acute MI. In
a retrospective analysis, about 98 percent of the subjects admitted to
the study had some ECG abnormality.
Aspirin produced similar-sized reductions in vascular mortality
among subjects treated early and treated late after the onset of
symptoms (odds reductions at 0 to 4, 5 to 12, and 13 to 24 hours were
25 percent, 21 percent, and 21 percent, respectively). The effects of
streptokinase appeared to be greatest among those treated earliest.
When comparing subjects who received both aspirin and streptokinase to
subjects who received double placebo, the odds of death were more
reduced among those subjects randomized 0 to 4 hours (53 percent odds
reduction; 2p < 0.00001) after the onset of pain than those randomized
later: 5 to 12 hours (32 percent odds reduction; 2p < 0.0001), and 13
to 24 hours (38 percent odds reduction; 2p < 0.01).
The aspirin regimen was well tolerated. There was no difference in
the incidence of major bleeding (bleeds requiring transfusion) between
the two groups (0.4 percent for aspirin; 0.4 percent for placebo).
There was a small but statistically significant 0.6 percent (SD = 0.2,
2p < 0.01) increase in minor bleeding in people taking aspirin compared
to placebo (2.5 versus 1.9
[[Page 30005]]
percent). No other significant adverse effects were reported. Although
there were five confirmed cerebral hemorrhages in the aspirin group
compared with two in the placebo group, this difference was not
statistically significant. As discussed above, the incidence of stroke
of any cause was lower in subjects taking aspirin when compared to
those on oral placebo (47 versus 81), a 0.4 percent absolute reduction
and a 41.5 percent reduction in odds of stroke (2p < 0.01) in subjects
taking aspirin.
The second study (Ref. 4) was a study of low dose aspirin (75 mg
daily) and intravenous heparin in 945 men with unstable coronary artery
disease, defined as non-Q-wave MI or increasing angina within the
previous 4 weeks associated with ischemia (deficiency of oxygen supply
to the heart muscle, due to the constriction or obstruction of a blood
vessel) in a resting ECG or during a predischarge exercise test. The
subjects were randomized within 72 hours after admission to coronary
care units to receive bolus intravenous injections of heparin (10,000
units 4 times a day for 1 day and 7,500 units 4 times a day for 4
additional days) or placebo (saline) for 5 days, and oral aspirin (75
mg daily) or placebo for 1 year. The study was stopped early after
publication of the ISIS-2 study. As a result, the minimum period of
randomized treatment was reduced to 3 months. A detailed report of this
study has not been submitted to the agency for review.
One hundred and forty-nine subjects were excluded from the study
(115 with no evidence of myocardial ischemia after an exercise test,
and 34 with an anterior Q-wave MI before recruitment). The remaining
796 subjects were randomized to either double placebo (199), heparin
and aspirin (210), aspirin and placebo (189), or heparin and placebo
(198).
The combined rate of MI or death in subjects on aspirin (aspirin
with placebo and aspirin with heparin) was 9.1 percent and 10.6 percent
lower at 1 and 3 months, respectively, than the combined rate for
subjects receiving placebo (double placebo or placebo with heparin), a
risk reduction of 68 percent at 1 month (p = 0.0001) and 62 percent at
3 months (p = 0.0001). Heparin alone did not appear to affect the rate
of death or MI. However, the combination of heparin and aspirin was the
only regimen that significantly reduced the risk of MI during the first
5 days in the hospital. Thus, the authors suggested that reduction of
events in the aspirin treated group may have been influenced by initial
simultaneous treatment with heparin.
A few side effects were reported with the daily aspirin dose used
in this study, although details were not provided. Hematological side
effects were reported to be rare and minor. Gastrointestinal side
effects were similar in the aspirin and placebo groups at 1 month, but
were more frequent with aspirin (5.2 percent to 6.5 percent) than with
placebo (0.7 percent to 1.9 percent) at 3 months.
This study primarily involved the use of aspirin in subjects with
unstable angina. The agency has already accepted the benefits of
aspirin in unstable angina and has included that indication in
Sec. 343.80(c).
The third study (Ref. 5) compared the effect of aspirin (100 mg
daily) to placebo for 3 months on infarct size, death, reinfarction,
unstable angina, and revascularization in 100 subjects with early
symptoms of first anterior wall acute MI. All subjects also received
subcutaneous heparin until they were mobilized. In addition, those
subjects who were less than 70 years of age and had symptoms for less
than 4 hours when recruited (24 subjects on aspirin and 26 subjects on
placebo) also received thrombolysis therapy (intravenous
streptokinase). The study was randomized for aspirin but not for
thrombolysis.
The primary endpoint was infarct size in the first 72 hours. The
size of the infarct was determined by the cumulative release of serum
lactate dehydrogenase (LDH) in the first 72 hours. Secondary endpoints
were death, reinfarction, unstable angina, and revascularization. The
results showed a 10 percent difference in infarct size (1,431
782 versus 1,592 1,082 LDH units per liter)
for the aspirin versus placebo group. This difference was not
statistically significant (p = 0.35). Of the secondary endpoints
evaluated, only reinfarction was significantly lower in the aspirin
than the placebo group (4 percent versus 18 percent, p < 0.03) at 3
months. Mortality rate was 20 percent in subjects given aspirin
compared to 24 percent in those given placebo. This difference was not
statistically significant (p = 0.65).
The significant reduction in incidence of reinfarction in this
study is surprising because of the small size of the study and may
depend on an atypical incidence of reinfarction in the control group
(18 percent at 3 months). This was much higher than in the control
group of the ISIS-2 study (approximately 3 percent at 35 days).
Followup for this third study was longer than for the ISIS-2 study (3
months versus 35 days). Only subjects with early signs of first
anterior wall infarction were eligible for entry in the third study,
while in the ISIS-2 study subjects with only ``suspected acute MI''
were eligible. The more stringent entry criteria and the longer
followup period may account for the higher incidence of reinfarction in
the control group and the significant effect of aspirin on reinfarction
in the third study. A detailed report of this study was not submitted
to the agency. Based on the information provided, this study provides
little additional evidence of the effectiveness of aspirin in treating
acute MI.
The fourth study (Ref. 6) was an uncontrolled study to evaluate
infarct vessel patency in subjects started on both aspirin (325 mg/day)
and dipyridamole (75 mg/day) after thrombolytic therapy with
streptokinase. In the absence of a control group, the study cannot
provide any information on the effectiveness of aspirin in treating
acute MI.
The second petition (Ref. 2) also requested the agency to approve
professional labeling for aspirin for prevention of fatal and nonfatal
cardiovascular events in patients with suspected acute MI. The petition
requested approval of an initial dose of ``at least 162 mg aspirin''
during the 24 hours following acute MI, with continued treatment for at
least the subsequent 30-day followup period at the minimum dose of 162
mg/day. The petition relied primarily on the results of ISIS-2 (Ref. 3)
to support the labeling claim. Data from that study are summarized
above.
In addition to ISIS-2, the petition included results of four
published efficacy studies of aspirin in acute MI (Refs. 5, 7, 8, and
9). The study by Verheugt et al. (Ref. 5) was also submitted in the
first petition and is discussed above.
In the ISIS-2 pilot study (Ref. 7), there was a nonsignificant
reduction in nonfatal reinfarction in 313 subjects who received 325 mg
aspirin on alternate days compared with 306 subjects who received
placebo. In-hospital death (all causes) was reported to be
significantly lower in the aspirin-treated group. Postdischarge death
was reported at a similar rate in both the aspirin and placebo
subjects.
Elwood and Williams (Ref. 8) found no evidence of reduced mortality
in males or females evaluated up to 28 days after a single 300 mg dose
of aspirin. Aspirin or placebo was administered to 2,530 subjects, upon
first suspicion of acute MI. Analysis was
[[Page 30006]]
confined to 1,705 subjects in whom acute MI was subsequently confirmed.
Husted et al. (Ref. 9) compared aspirin 100 mg/day, aspirin 1,000
mg/day, and placebo in 293 subjects with suspected acute MI. An intent-
to-treat analysis showed no significant difference between groups. A
significant benefit of 100 mg/day (but not 1,000 mg/day) on the
combined incidence of cardiac death and nonfatal MI was found when
subjects who withdrew from the study were excluded from the analysis.
No conclusions were drawn as to the reasons for the difference in
effect between a 100 mg and 1,000 mg daily dose.
The agency received additional comments that raised other issues
related to professional labeling of aspirin for cardiovascular use.
Those issues will be addressed in a future issue of the Federal
Register.
B. Summary of the Agency's Evaluation
The agency has determined that the ISIS-2 study (Ref. 3) supports
the use of aspirin at a dose of 162.5 mg/day, started as soon as
possible after an infarction and continued for at least 30 days to
reduce the risk of fatal and nonfatal cardiovascular and
cerebrovascular events in subjects with a suspected acute MI. The study
also shows that the effect of aspirin is not diminished with
concomitant early treatment with a thrombolytic (i.e., an immediate 1-
hour, single-dose, infusion of 1.5 million units of streptokinase).
Aspirin treatment should be started as soon as the physician suspects
an MI, rather than delaying treatment until definitive testing can be
done. A significant benefit of aspirin in reducing the risk of vascular
death was seen in ISIS-2 for aspirin alone compared to placebo as well
as for aspirin plus streptokinase compared to streptokinase alone,
representing, in effect, two separate studies showing a benefit of
aspirin. This internal replication supports the indication for
treatment of acute MI. The large number of investigators involved in
the study and the consistency of results among countries lend further
credibility to the results of this single study.-
The benefit of aspirin is evident for both all-cause mortality and
vascular mortality for aspirin alone and for aspirin in addition to
early thrombolytic treatment. Although the most important effect of
aspirin in acute MI is the reduction in mortality, small, but
statistically significant, decreases in nonfatal reinfarction and
stroke were also found. Overall, the other studies included in the
petitions are consistent with a favorable effect of aspirin in the
acute and subacute MI setting, but do not provide substantial support
for ISIS-2. While the dosage in the ISIS-2 study was 162.5 mg enteric-
coated aspirin daily, the agency believes one-half of a conventional
325-mg tablet or two 80- or 81-mg tablets are also reasonable doses
(i.e., a range of 160 to 162.5 mg).
In the 1988 TFM (53 FR 46204 at 46229 and 46231), the agency
proposed (in Sec. 343.20(b)(3)) that aspirin, buffered aspirin, and
aspirin in combination with antacids are effective to treat patients
with TIA, a previous MI, or unstable angina pectoris. That proposal was
based on recommendations of the Peripheral and Central Nervous System
Drugs Advisory Committee, the agency's review of data submitted to show
that buffered aspirin would be expected to have similar effects, and on
the data from an unstable angina trial that used a highly buffered
aspirin solution. Based on those data, the agency is proposing that
aspirin, buffered aspirin, or aspirin in combination with an antacid
may be used to treat patients with a suspected acute MI. After the 30-
day recommended treatment with aspirin for acute MI, physicians should
consider further therapy based on the labeling for dosage and
administration of aspirin for prevention of recurrent MI
(reinfarction).
Based on the above discussion, the agency is now proposing several
changes in the professional labeling proposed in Sec. 343.80(c) for OTC
drug products containing aspirin proposed in Sec. 343.10(b) or
permitted combinations proposed in Sec. 343.20(b)(3) as follows: (1)
Add information for treatment of a suspected acute MI, and (2) revise
some of the previously proposed text based on additional information
from the ISIS-2 study (Ref. 8).
III. Summary of Agency Changes
In summary, the agency is proposing to add the following to the
professional labeling in Sec. 343.80(c): An indication for aspirin to
reduce the risk of vascular mortality in patients with a suspected
acute MI; the findings of the ISIS-2 study under ``Clinical Trials;'' a
dosage of 160 to 162.5 mg for a suspected acute MI taken as soon as the
infarct is suspected and then daily for at least 30 days; and a
statement that this use of aspirin applies to both solid, oral dosage
forms and buffered aspirin in solution.
To add the findings of the ISIS-2 study and to improve readability,
the agency is also proposing the following: Change the heading from
``Indication'' to ``Indications;'' add the subheadings, ``Recurrent MI
(Reinfarction) or Unstable Angina Pectoris'' and ``Suspected Acute
MI,'' under the headings ``Indications,'' ``Clinical Trials,'' and
``Dosage and Administration;'' revise the text under ``Gastrointestinal
Reactions'' and change from 300 mg aspirin to 160 mg aspirin daily the
dosage level at which subjects should have biochemical measurements
assessed; add a subheading, ``Bleeding,'' under the heading ``Adverse
Reactions'' (after ``Gastrointestinal Reactions''); renumber existing
reference (8) as reference (9); and add a new reference (8).
IV. References
The following references are on display in the Dockets Management
Branch (address above) and may be seen by interested persons between 9
a.m. and 4 p.m., Monday through Friday.
(1) Comment No. CP9, Docket No. 77N-0094, Dockets Management
Branch.
(2) Comment No. CP10, Docket No 77N-0094, Dockets Management
Branch.
(3) ISIS-2 (Second International Study of Infarct Survival)
Collaborative Group, ``Randomized Trial of Intravenous
Streptokinase, Oral Aspirin, Both, or Neither Among 17,187 Cases of
Suspected Acute Myocardial Infarction: ISIS--2,'' Lancet, 2:349-360,
1988.
(4) RISC Group, ``Risk of Myocardial Infarction and Death During
Treatment with Low Dose Aspirin and Intravenous Heparin in Men with
Unstable Coronary Artery Disease,'' Lancet, 336:827-830, 1990.
(5)- Verheugt, F. W. et al., ``Effects of Early Intervention
with Low-dose Aspirin (100 mg) on Infarct Size, Reinfarction and
Mortality in Anterior Wall Acute Myocardial Infarction,'' American
Journal of Cardiology, 66:267-270, 1990.
(6)- Hays, L. J. et al., ``Short-term Infarct Vessel Patency
with Aspirin and Dipyridamole Started 24 to 36 Hours After
Intravenous Streptokinase,'' American Heart Journal, 115:717-721,
1988.
(7) ISIS Pilot Study Investigators, ``Randomized Factorial Trial
of High-Dose Intravenous Streptokinase, of Oral Aspirin and of
Intravenous Heparin in Acute Myocardial Infarction,'' European Heart
Journal, 8:634-642, 1987.
(8) Elwood, P. C., and W. O. Williams, ``A Randomized Controlled
Trial of Aspirin in the Prevention of Early Mortality in Myocardial
Infarction,'' Journal of the Royal College of General Practitioners,
29:413-416, 1979.
(9) Husted, S. E. et al., ``Acetylsalicylic Acid 100 mg and
1,000 mg Daily in Acute Myocardial Infarction Suspects: A Placebo-
Controlled Trial,'' Journal of Internal Medicine, 226:303-310, 1989.
V. Enforcement Policy
The agency is allowing the proposed professional labeling to be
used prior to the completion of a final rule for OTC internal
analgesic, antipyretic, and antirheumatic drug products. This decision
is based on the substantial data
[[Page 30007]]
supporting the safety and effectiveness of aspirin for suspected acute
MI and on the importance of early dissemination of this information to
health professionals. Manufacturers who disseminate this information
must use the exact professional labeling set forth in this proposal.
Such labeling may be disseminated pending issuance of a final rule,
subject to the risk that the agency may, in the final rule, adopt a
different position that could require relabeling, recall, or other
regulatory action. Those manufacturers who do not wish to revise the
professional labeling in accordance with this proposal may continue to
disseminate the labeling proposed in the 1988 TFM (53 FR 46204 at 46258
through 46260) until a final rule becomes effective. Dissemination of
professional labeling that is not in accord with the labeling in the
1988 TFM or with this proposed amendment to the 1988 TFM may result in
regulatory action against the product, the marketer, or both.
VI. 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. In addition, the proposed
rule is not a significant regulatory action as defined by the Executive
Order and so is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. If this proposed rule becomes a final rule, direct
one-time costs associated with changing professional labeling will be
imposed. That cost is estimated to be less than $1 million. Also, there
appears to be a limited number of aspirin products involved because
many manufacturers of these products do not distribute professional
labeling for their products. Manufacturers who do distribute such
professional labeling will have an additional claim to make for their
product(s) and will have 1 year after publication of the final rule to
implement this relabeling. Accordingly, the agency certifies that the
proposed rule will not have a significant economic impact on a
substantial number of small entities. Therefore, under the Regulatory
Flexibility Act, no further analysis is required.
The agency invites public comment regarding any substantial or
significant economic impact that this rulemaking would have on the
professional labeling of OTC internal analgesic, antipyretic, and
antirheumatic drug products that contain aspirin, buffered aspirin, or
aspirin in combination with antacid. Types of impact may include, but
are not limited to, costs associated with relabeling. Comments
regarding the impact of this rulemaking on these OTC drug products
should be accompanied by appropriate documentation. The agency will
evaluate any comments and supporting data that are received and will
reassess the economic impact of this rulemaking in the preamble to the
final rule.
VII. Paperwork Reduction Act of 1995
FDA tentatively concludes that the labeling requirements proposed
in this document are not subject to review by the Office of Management
and Budget because they do not constitute a ``collection of
information'' under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
et seq.). Rather, the proposed labeling statements are a ``public
disclosure of information originally supplied by the Federal Government
to the recipient for the purpose of disclosure to the public'' (5 CFR
1320.3(c)(2)).
VIII. Environmental Impact
The agency has determined under 21 CFR 25.24(c)(6) 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.
IX. Request for Comments
Interested persons may, on or before September 11, 1996, submit to
the Dockets Management Branch (address above) written comments
regarding this proposal. Written comments on the agency's economic
impact determination may be submitted on or before September 11, 1996.
Three copies of all 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 and may
be accompanied by a supporting memorandum or brief. Received comments
may be seen in the office above between 9 a.m. and 4 p.m., Monday
through Friday.
List of Subjects in 21 CFR Part 343
Labeling, Over-the-counter drugs.
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 part 343 (proposed in the Federal Register of
November 16, 1988, 53 FR 46204) be amended as follows:
PART 343--INTERNAL ANALGESIC, ANTIPYRETIC, AND ANTIRHEUMATIC DRUG
PRODUCTS FOR OVER-THE-COUNTER HUMAN USE
1. The authority citation for 21 CFR part 343 continues to read as
follows:
-Authority: Secs. 201, 501, 502, 503, 505, 510, 701 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 351, 352, 353,
355, 360, 371).
2. Section 343.80 is amended by revising paragraph (c) to read as
follows:
Sec. 343.80 Professional labeling.
* * * * *-
(c) For products containing aspirin identified in Sec. 343.10(b)
or permitted combinations identified in Sec. 343.20(b)(3). The labeling
states, under the heading ``ASPIRIN FOR MYOCARDIAL INFARCTION,'' the
following:
Indications:
Recurrent Myocardial Infarction (MI) (Reinfarction) or Unstable
Angina Pectoris
Aspirin is indicated to reduce the risk of death and/or nonfatal
MI in patients with a previous MI or unstable angina pectoris.
Suspected Acute MI
Aspirin is indicated to reduce the risk of vascular mortality in
patients with a suspected acute MI.
Clinical Trials:
Recurrent MI (Reinfarction) and Unstable Angina Pectoris
The indication is supported by the results of six large,
randomized multicenter, placebo-controlled studies involving 10,816,
predominantly male, post-MI subjects and one randomized placebo-
controlled study of 1,266 men with unstable angina (1-7). Therapy
with aspirin was begun at intervals after the onset of acute MI
varying from less than 3 days to more than 5 years and continued for
periods of from less than 1 year to 4 years. In the unstable angina
study, treatment was started within 1 month after the onset of
unstable angina and continued for 12 weeks, and patients with
complicating conditions such as congestive heart failure were not
included in the study.
Aspirin therapy in MI subjects was associated with about a 20-
percent reduction in the risk of subsequent death and/or nonfatal
reinfarction, a median absolute decrease of 3 percent from the 12-
to 22-percent event rates in the placebo groups. In aspirin-treated
unstable angina patients the reduction in risk was about 50 percent,
a
[[Page 30008]]
reduction in the event rate of 5-percent from the 10-percent rate in
the placebo group over the 12-weeks of the study.
Daily dosage of aspirin in the post-MI studies was 300
milligrams in one study and 900 to 1,500 milligrams in five studies.
A dose of 325 milligrams was used in the study of unstable angina.
Suspected Acute MI
The use of aspirin in patients with a suspected acute MI is
supported by the results of a large, multicenter 2 x 2 factorial
study of 17,187 subjects with suspected acute MI (8). Subjects were
randomized within 24 hours of the onset of symptoms so that 8,587
subjects received oral aspirin (162.5 milligrams, enteric-coated)
daily for 1 month (the first dose crushed, sucked, or chewed) and
8,600 received oral placebo. Of the subjects, 8,592 were also
randomized to receive a single dose of streptokinase (1.5 million
units) infused intravenously for about 1 hour, and 8,595 received a
placebo infusion. Thus, 4,295 subjects received aspirin plus
placebo, 4,300 received streptokinase plus placebo, 4,292 received
aspirin plus streptokinase, and 4,300 received double placebo.
Vascular mortality (attributed to cardiac, cerebral,
hemorrhagic, other vascular, or unknown causes) occurred in 9.4
percent of the subjects in the aspirin group and in 11.8 percent of
the subjects in the oral placebo group in the 35-day followup. This
represents an absolute reduction of 2.4 percent in the mean 35-day
vascular mortality attributable to aspirin and a 23-percent
reduction in the odds of vascular death (2p < 0.00001).
Significant absolute reductions in mortality and corresponding
reductions in specific clinical events favoring aspirin were found
for reinfarction (1.5 percent absolute reduction, 45 percent odds
reduction, 2p < 0.00001), cardiac arrest (1.2 percent absolute
reduction, 14.2 percent odds reduction, 2p < 0.01), and total stroke
(0.4 percent absolute reduction, 41.5 percent odds reduction, 2p <
0.01). The effect of aspirin over and above its effect on mortality
was evidenced by small, but significant, reductions in vascular
morbidity in those subjects who were discharged.
The beneficial effects of aspirin on mortality were present with
or without streptokinase infusion. Aspirin reduced vascular
mortality from 10.4 to 8.0 percent for days 0 to 35 in subjects
given streptokinase and reduced vascular mortality from 13.2 to 10.7
percent in subjects given no streptokinase.
The effects of aspirin and thrombolytic therapy with
streptokinase in this study were approximately additive. Subjects
who received the combination of streptokinase infusion and daily
aspirin had significantly lower vascular mortality at 35 days than
those who received either active treatment alone (combination 8.0
percent, aspirin 10.7 percent, streptokinase 10.4 percent, and no
treatment 13.2 percent). While this study demonstrated that aspirin
has an additive benefit in patients given streptokinase, there is no
reason to restrict its use to that specific thrombolytic.
Adverse Reactions:
Gastrointestinal Reactions
Doses of 1,000 milligrams per day of aspirin caused
gastrointestinal symptoms and bleeding that in some cases were
clinically significant. In the Aspirin Myocardial Infarction Study
(AMIS) (4) with 4,500 post-infarction subjects, the percentage
incidences of gastrointestinal symptoms for the aspirin (1,000
milligrams of a standard, solid-tablet formulation) and placebo-
treated subjects, respectively, were: Stomach pain (14.5 percent,
4.4 percent); heartburn (11.9 percent, 4.8 percent); nausea and/or
vomiting (7.6 percent, 2.1 percent); hospitalization for
gastrointestinal disorder (4.8 percent, 3.5 percent). Symptoms and
signs of gastrointestinal irritation were not significantly
increased in subjects treated for unstable angina with 325
milligrams buffered aspirin in solution.
Bleeding
In the AMIS and other trials, aspirin-treated subjects had
increased rates of gross gastrointestinal bleeding. In the ISIS-2
study (8), there was no significant difference in the incidence of
major bleeding (bleeds requiring transfusion) between 8,587 subjects
taking 162.5 milligrams aspirin daily and 8,600 subjects taking
placebo (31 versus 33 subjects). There were five confirmed cerebral
hemorrhages in the aspirin group compared with two in the placebo
group, but the incidence of stroke of all causes was significantly
reduced from 81 to 47 for the placebo versus aspirin group (0.4
percent absolute change). There was a small and statistically
significant excess (0.6 percent) of minor bleeding in people taking
aspirin (2.5 percent for aspirin, 1.9 percent for placebo). No other
significant adverse effects were reported.-
(Other applicable warnings related to the use of aspirin as
described in Sec. 343.50(c) may also be included here.)
Cardiovascular and Biochemical
In the AMIS trial (4), the dosage of 1,000 milligrams per day of
aspirin was associated with small increases in systolic blood
pressure (BP) (average 1.5 to 2.1 millimeters Hg) and diastolic BP
(0.5 to 0.6 millimeters Hg), depending upon whether maximal or last
available readings were used. Blood urea nitrogen and uric acid
levels were also increased, but by less than 1.0 milligram percent.
Subjects with marked hypertension or renal insufficiency had
been excluded from the trial so that the clinical importance of
these observations for such subjects or for any subjects treated
over more prolonged periods is not known. It is recommended that
patients placed on long-term aspirin treatment, even at doses of 160
milligrams per day, be seen at regular intervals to assess changes
in these measurements.
Sodium in Buffered Aspirin for Solution Formulations:
One tablet daily of buffered aspirin in solution adds 553
milligrams of sodium to that in the diet and may not be tolerated by
patients with active sodium-retaining states such as congestive
heart or renal failure. This amount of sodium adds about 30 percent
to the 70- to 90-milliequivalent intake suggested as appropriate for
dietary treatment of essential hypertension in the ``1984 Report of
the Joint National Committee on Detection, Evaluation, and Treatment
of High Blood Pressure'' (9).
Dosage and Administration:
Recurrent MI (Reinfarction) and Unstable Angina Pectoris
Although most of the studies used dosages exceeding 300
milligrams, two trials used only 300 milligrams, and pharmacologic
data indicate that this dose inhibits platelet function fully.
Therefore, 300 milligrams or a conventional 325 milligram aspirin
dose is a reasonable, routine dose that would minimize
gastrointestinal adverse reactions. This use of aspirin applies to
both solid, oral dosage forms (buffered and plain aspirin) and
buffered aspirin in solution.
Suspected Acute MI
The recommended dose of aspirin to treat suspected acute MI is
160 to 162.5 milligrams taken as soon as the infarct is suspected
and then daily for at least 30 days. (One-half of a conventional
325-milligram aspirin tablet or two 80- or 81-milligram aspirin
tablets may be taken.) This use of aspirin applies to both solid,
oral dosage forms (buffered, plain, and enteric-coated aspirin) and
buffered aspirin in solution. If using a solid dosage form, the
first dose should be crushed, sucked, or chewed. After the 30-day
treatment, physicians should consider further therapy based on the
labeling for dosage and administration of aspirin for prevention of
recurrent MI (reinfarction).
(1) Elwood, P. C. et al., ``A Randomized Controlled Trial of
Acetylsalicylic Acid in the Secondary Prevention of Mortality from
Myocardial Infarction,'' British Medical Journal, 1:436-440, 1974.
(2) The Coronary Drug Project Research Group, ``Aspirin in
Coronary Heart Disease,'' Journal of Chronic Diseases, 29:625-642,
1976.
(3) Breddin, K. et al., ``Secondary Prevention of Myocardial
Infarction: A Comparison of Acetylsalicylic Acid, Phenprocoumon or
Placebo,'' Homeostasis, 470:263-268, 1979.
(4) Aspirin Myocardial Infarction Study Research Group, ``A
Randomized, Controlled Trial of Aspirin in Persons Recovered from
Myocardial Infarction,'' Journal of the American Medical
Association, 243:661-669, 1980.
(5) Elwood, P. C., and P. M. Sweetnam, ``Aspirin and Secondary
Mortality After Myocardial Infarction,'' Lancet, II:1313-1315,
December 22-29, 1979.
(6) The Persantine-Aspirin Reinfarction Study Research Group,
``Persantine and Aspirin in Coronary Heart Disease,'' Circulation,
62:449-461, 1980.
(7) Lewis, H. D. et al., ``Protective Effects of Aspirin Against
Acute Myocardial Infarction and Death in Men with Unstable Angina,
Results of a Veterans Administration Cooperative Study,'' New
England Journal of Medicine, 309:396-403, 1983.
(8) ISIS-2 (Second International Study of Infarct Survival)
Collaborative Group, ``Randomized Trial of Intravenous
Streptokinase, Oral Aspirin, Both, or Neither Among 17,187 Cases of
Suspected Acute Myocardial Infarction: ISIS-2,'' Lancet, 2:349-360,
August 13, 1988.
[[Page 30009]]
(9) ``1984 Report of the Joint National Committee on Detection,
Evaluation, and Treatment of High Blood Pressure,'' United States
Department of Health and Human Services and United States Public
Health Service, National Institutes of Health, Publication No. NIH
84-1088, 1984.
Dated: June 5, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-14894 Filed 6-12-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-14860 Production of Volatile Fruit-Flavor Concentrate (95R-026P)
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30017-30018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14860]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
27 CFR Part 18
[Notice No. 823]
RIN 1512-AB59
Production of Volatile Fruit-Flavor Concentrate (95R-026P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: Pursuant to the President's regulatory reform initiative, the
Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing to amend the
regulations in 27 CFR Part 18. The proposed amendment would
specifically authorize the transfer of volatile fruit-flavor
concentrate (VFFC) unfit for beverage use from one VFFC plant to
another for further processing. The proposed amendment would clarify
the regulations in order to allow greater flexibility in the production
processes of VFFC plants.
DATES: Written comments must be received on or before August 12, 1996.
ADDRESSES: Submit written comments to: Chief, Wine, Beer, and Spirits
Regulations Branch, Bureau of Alcohol, Tobacco and Firearms, P.O. Box
50221, Washington, DC 20091-0221. ATTN: Notice No. 823.
FOR FURTHER INFORMATION CONTACT: Mary A. Wood, Wine, Beer, and Spirits
Regulations Branch, Bureau of Alcohol, Tobacco and Firearms, 650
Massachusetts Avenue NW.ca a13jn2.071, Washington, DC 20226; (202) 927-
8210.
SUPPLEMENTARY INFORMATION:
Background
On February 21, 1995, President Clinton announced a regulatory
reform initiative. As part of this initiative, each Federal agency was
instructed to conduct a page by page review of all agency regulations
to identify those which are obsolete or burdensome and those whose
goals could be better achieved through the private sector, self-
regulation or state and local governments. In cases where the agency's
review disclosed regulations which should be revised or eliminated, the
agency would, as soon as possible, propose administrative changes to
its regulations.
The page by page review of all regulations was completed as
directed by the President. In addition, on April 13, 1995, the Bureau
published Notice No. 809 (60 FR 18783) in the Federal Register
requesting comments from the public regarding which ATF regulations
could be improved or eliminated. No comments were received regarding 27
CFR part 18, Production of Volatile Fruit-Flavor Concentrate; however,
ATF is proposing a clarifying amendment to this part based on a
variance request received from a volatile fruit-flavor concentrate
(VFCC) producer.
The Internal Revenue Code of 1986, 26 U.S.C. 5511, authorizes the
manufacture of volatile fruit-flavor concentrate by any process which
includes evaporations from the mash or juice of any fruit. Section 5511
also places certain restrictions on the manufacture of volatile fruit-
flavor concentrate. Pursuant to section 5511(1), the concentrate, and
the mash or juice from which it is produced, must contain no more
alcohol than is reasonably unavoidable in the manufacture of such
concentrate. Section 5511(2) provides that the concentrate must be
rendered unfit for use as a beverage before removal from the place of
manufacture; however, concentrate which is fit for beverage use and
which does not exceed 24 percent alcohol by volume may be transferred
to a bonded wine cellar for use in production of natural wine. Finally,
section 5511(3) authorizes the Secretary to prescribe such regulations
as are necessary for the protection of the revenue regarding
applications, records, reports, bonds, and other requirements with
respect to the production, removal, sale, transportation, and use of
concentrate and the mash or juice from which the concentrate is
produced.
Volatile fruit-flavor concentrate which is produced in accordance
with the requirements of the regulations is not subject to the
distilled spirits or wine excise tax. However, section 5001(a)(6)
provides for the imposition of tax on any volatile fruit-flavor
concentrate (or any fruit mash or juice from which such concentrate is
produced) containing one-half of 1 percent or more of alcohol by
volume, which is manufactured free from tax under section 5511, and is
then sold, transported, or used by any person in violation of Chapter
51 or the regulations promulgated thereunder.
Proposed Amendment
The current regulations in 27 CFR 18.54(a) allow the transfer of
volatile fruit-flavor concentrate (``concentrate'') which is unfit for
beverage use for any purpose authorized by law. However, ATF recently
received a request from a VFFC producer as to whether a concentrate
unfit for beverage use could be transferred from one VFFC plant to
another for further processing. Apparently it was more cost-effective
for the second VFFC plant to conduct the processing operation at issue.
While the transfer of the concentrate was clearly authorized by current
regulations, since the concentrate was unfit for beverage use, there
was nothing in the current regulations which specifically authorized
the second VFFC plant to receive concentrate for further processing.
The existing regulations in section 18.51 allow proprietors to
receive processing material which is produced elsewhere, subject to
certain restrictions
[[Page 30018]]
and recordkeeping requirements. However, the term ``processing
material'' is defined in section 18.11 to mean ``[t]he fruit mash or
juice from which concentrate is produced.'' This definition does not
include concentrate intended for further processing. The regulations in
section 18.56 authorize a VFFC producer to accept the return of a
shipment of concentrate shipped by it, and provide recordkeeping and
reporting requirements regarding the returned concentrate. However,
these regulations do not specifically authorize the proprietor to
accept concentrate from another proprietor for further processing.
In response to the request from the VFFC producer, ATF determined
that nothing in the Internal Revenue Code or existing regulations
precludes one VFFC proprietor from accepting concentrate from another
VFFC proprietor for further processing. However, since the existing
regulations do not specifically authorize such an operation, ATF is
proposing to amend section 18.56 to specifically allow a proprietor to
accept concentrate which is unfit for beverage use for further
processing. Such concentrate will be subject to the existing
recordkeeping and reporting requirements for concentrate which is
returned to the proprietor. ATF believes that the proposed amendment
will clarify to VFFC proprietors that the transfer of concentrate from
one plant to another for further processing is allowed, as long as the
concentrate meets the definition of a concentrate unfit for beverage
use at the time it leaves the place of manufacture. This liberalizing
amendment will allow VFFC proprietors greater flexibility in production
operations without jeopardizing the revenue in any way.
Other Possible Changes
ATF also solicits public comment concerning other possible changes
to the regulations in Part 18, such as amendments which would authorize
VFFC plants to alternate the use of their premises so as to operate
temporarily as a distilled spirits plant, bonded winery, or other
regulated facility. Comments on this proposal, as well as any other
suggestions, are welcome.
Public Participation
ATF requests written comments from all interested persons. All
comments received on or before the closing date will be carefully
considered. Comments received after that date will be given the same
consideration if it is practical to do so, but assurance of
consideration cannot be given except as to comments received on or
before the closing date.
ATF will not recognize any material as confidential. Any material
which the commenter considers to be confidential or inappropriate for
disclosure should not be included in the comment. The name of the
person submitting the comment is not exempt from disclosure.
Any interested person who desires an opportunity to comment orally
at a public hearing should submit a request, in writing, to the
Director within the 60-day comment period. The Director, however,
reserves the right to determine, in light of all circumstances, whether
a public hearing will be scheduled.
Written comments will be available for public inspection during
normal business hours at the following address: ATF Reading Room,
Office of Public Affairs and Disclosure, Room 6480, 650 Massachusetts
Avenue, NW, Washington, DC.
Regulatory Flexibility Act
It is hereby certified that this proposed regulation, if
implemented as a final rule, will not have a significant economic
impact on a substantial number of small entities. The proposed
amendment would liberalize the regulations to add a provision that will
allow for the transfer of concentrate from one VFFC plant to another
for further processing. Accordingly, a regulatory flexibility analysis
is not required because the proposal, if promulgated as a final rule,
will not have a significant economic impact on a substantial number of
small entities.
Pursuant to section 7805(f) of the Internal Revenue Code, this
proposed regulation has been submitted to the Chief Counsel for
Advocacy of the Small Business Administration for comment on its impact
on small business.
Executive Order 12866
It has been determined that this proposed regulation is not a
significant regulatory action as defined in Executive Order 12866.
Accordingly, this proposal is not subject to the analysis required by
this Executive Order.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, no persons are required
to respond to a collection of information unless it displays a valid
OMB control number. The collections of information contained in the
regulations proposed to be amended by this notice have been previously
reviewed and approved by the Office of Management and Budget in
accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 3504(h))
under control numbers 1512-0046 and 1512-0098. The proposed amendment
is not expected to result in any change in the total number of burden
hours.
Drafting Information: The principal author of this document is
Mary A. Wood of the Wine, Beer, and Spirits Regulations Branch,
Bureau of Alcohol, Tobacco and Firearms.
List of Subjects in 27 CFR Part 18
Administrative practice and procedure, Authority delegations,
Excise taxes, Exports, Labeling, Reporting requirements, Security
measures, Spices and flavorings, Stills, and Surety bonds.
Authority and Issuance
ATF is proposing to amend Part 18 in Title 27 of the Code of
Federal Regulations as follows:
PART 18--PRODUCTION OF VOLATILE FRUIT-FLAVOR CONCENTRATE
Par. 1. The authority citation for Part 18 continues to read as
follows:
Authority: 26 U.S.C. 5001, 5172, 5178, 5179, 5203, 5511, 5552,
6065, 7805; 44 U.S.C. 3504(h).
Par. 2. Section 18.56 is revised to read as follows:
Sec. 18.56 Receipt of concentrate.
(a) General. The proprietor of a concentrate plant may accept the
return of concentrate that it shipped. In addition, concentrate that is
unfit for beverage use may be received from another concentrate plant
for further processing in accordance with this part.
(b) Record of concentrate received. When concentrate is received,
the proprietor shall record the receipt, including the name of the
consignor and a notation regarding any loss in transit or other
discrepancy.
(c) Report of concentrate received. The quantity of concentrate
received shall be reported on an unused line on the annual report, ATF
Form 1695 (5520.2).
(Approved by the Office of Management and Budget under control
numbers 1512-0046 and 1512-0098).
Signed: May 20, 1996.
John W. Magaw,
Director.
Approved: May 24, 1996.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 96-14860 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-31-U
Complete official Federal Register PDF
FR Doc. 96-14859 Labeling of Unaged Grape Brandy (95R-018P)
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30015-30017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14859]
[[Page 30015]]
Bureau of Alcohol, Tobacco, and Firearms
27 CFR Part 5
[Notice No. 826]
RIN 1512-AB46
Labeling of Unaged Grape Brandy (95R-018P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing
to amend the regulations to permit the optional use of the word
``unaged'', instead of ``immature'', to describe grape brandy which has
never been stored in oak containers. ATF believes that the proposed
regulations provide industry members with greater flexibility in
labeling their unaged grape brandy, while ensuring that the consumer is
adequately informed as to the identity of the product.
The proposed amendment is part of the Administration's Reinventing
Government effort to reduce regulatory burdens and streamline
requirements.
DATES: Written comments must be received on or before September 11,
1996.
ADDRESSES: Send written comments to: Chief, Wine, Beer and Spirits
Regulations Branch; Bureau of Alcohol, Tobacco and Firearms; P.O. Box
50221; Washington, DC 20091-0221; ATTN: Notice No. 826.
FOR FURTHER INFORMATION CONTACT: James P. Ficaretta, Wine, Beer and
Spirits Regulations Branch, Bureau of Alcohol, Tobacco and Firearms,
650 Massachusetts Avenue, NW., Washington, DC 20226 (202-927-8230).
SUPPLEMENTARY INFORMATION:
Background
Section 105(e) of the Federal Alcohol Administration Act (FAA Act),
27 U.S.C. 205(e), vests broad authority in the Director of ATF, as a
delegate of the Secretary of the Treasury, to prescribe regulations
intended to prevent deception of the consumer, and to provide the
consumer with adequate information as to the identity and quality of
the product.
Regulations which implement the provisions of section 105(e), as
they relate to distilled spirits, are set forth in Title 27, Code of
Federal Regulations (CFR), Part 5. Subpart C of Part 5 sets forth the
standards of identity for distilled spirits for labeling and
advertising purposes. Section 5.22(d)(1) provides, in part, that
``fruit brandy'' is brandy distilled solely from the fermented juice or
mash of whole, sound, ripe fruit, or from standard grape, citrus, or
other fruit wine. Fruit brandy, derived from grapes, must be designated
as ``grape brandy'' or ``brandy''. This section further provides that
in the case of brandy (other than neutral brandy, pomace brandy, marc
brandy, or grappa brandy) distilled from the fermented juice, mash, or
wine of grapes, or the residue thereof, which has been stored in oak
containers (i.e., ``aged'') for less than 2 years, the statement of
class and type must be immediately preceded, in the same size and kind
of type, by the word ``immature'' (e.g., ``immature grape brandy'',
``immature brandy'', ``immature residue brandy''). As a result of this
section, brandy which has never been aged in oak containers is also
labeled as ``immature.''
Petition
ATF has received a petition, dated July 10, 1995, filed on behalf
of a domestic brandy producer, requesting an amendment of the
regulations concerning the labeling of grape brandy which has never
been stored in oak containers. The petitioner wishes to produce and
market a clear, unaged grape distillate which the petitioner states
will have distinct varietal characteristics without the influence of
wood extracts. According to the petitioner, aging such a distillate in
oak containers for 2 years would remove most, if not all, of the
varietal character. The petitioner states that an amendment of the
regulations is needed ``so this style of brandy can be made and labeled
in a manner that will not cause consumer deception or rejection based
on the negative use of the word `immature' as now required.''
Therefore, the petitioner has requested an amendment of section
5.22(d)(1) that would add a new sentence that states:
Grape brandy which has not been aged in wood and does not have
added coloring may use the statement `unaged' in lieu of `immature'.
Discussion
The requirement to label grape brandy which has not been stored in
oak containers for a minimum of 2 years as ``immature'' dates back to
May 25, 1956, with the publication in the Federal Register of T.D. 6174
(21 FR 3535). The need for such rulemaking was brought out in the
December 1, 1955, hearing which preceded T.D. 6174. In his opening
remarks at that hearing the Director of the Alcohol and Tobacco Tax
Division, Internal Revenue Service, Department of the Treasury, stated:
The single proposal contained in the notice has as its objective
an improvement in the existing quality standards for grape brandy.
Heretofore no minimum age has been specified for this product, the
only requirement contained in the regulations with respect to young
brandy being that an age statement must appear upon the brand label
of any brandy which has not been aged for at least two years.
The proposal precluded the use of the unqualified term ``brandy''
or ``grape brandy'' on the label of any grape brandy stored in wood
containers less than 2 years.
According to a trade association representing the California wine
and brandy industry, the amendment of the regulations was necessary
``to advise the consumer more adequately as to the difference between a
proper standard brandy and a product that is only potentially a brandy
because of the inadequacy of its age.''
Several alternative proposals were offered in the Notice of Hearing
(November 19, 1955; 20 FR 8574) to describe grape brandy not aged a
minimum of 2 years, including ``young brandy'', ``substandard brandy'',
and ``immature brandy''. The last designation was adopted in the final
rule.
ATF and its predecessor agencies have historically taken the
position that the material from which a spirit is distilled is the
determining factor insofar as the designation of the product is
concerned. Since 1936, with the issuance of the first distilled spirits
regulations promulgated under the FAA Act, brandy has generally been
defined in the standards of identity as an alcoholic distillate
obtained from the fermented juice, mash, or wine of fruit, or from the
residue thereof, produced in such manner that the distillate possesses
the taste, aroma, and characteristics generally attributed to the
product. A newly distilled brandy has a characteristic taste and aroma,
and aging does not change these basic properties. Although
traditionally described as harsh, raw, etc., a newly distilled brandy
still has brandy character. Likewise, a newly distilled brandy will
have the same congeners (e.g., esters, aldehydes, furfurals, etc.) as
an aged brandy, although there will be a difference in the amount
present. Aging in wood generally serves to reduce or remove the harsh,
burning taste and generally unpleasant character of a brandy distillate
obtained directly from the still. This results in a smoother tasting
and less harsh product.
[[Page 30016]]
Although the material from which the spirits are distilled is the
determining factor in designating the product, ATF and its predecessors
have required modifiers on the label to further describe the final
product. For example, section 5.22(b)(1)(iii) provides that whisky
which has been aged in oak containers for a minimum of 2 years must be
further designated as ``straight.'' In the matter at hand, a review of
the earlier rulemaking record indicates that the designation ``immature
brandy'' for newly distilled spirits aged less than 2 years in wood
correctly describes the product, since the record shows that it takes
at least 2 years of aging to remove the rawness from the brandy.
Proposed Regulatory Amendments
ATF believes that a distinction should be made in the labeling of
``mature'' grape brandy, i.e., brandy which has been aged for at least
2 years, and ``immature'' grape brandy, i.e., brandy which has either
never been aged or has been aged for some period of time less than 2
years. These distinctions are necessary, pursuant to the Bureau's
responsibilities under the FAA Act, to provide the consumer with
adequate information as to the identity and quality of the product. On
the other hand, the Bureau believes in reducing the regulatory burden
placed upon the industry and providing industry members with greater
flexibility in the labeling of their products. This is consistent with
the Administration's Reinventing Government effort to reduce regulatory
burdens and streamline requirements.
ATF also believes that the word ``unaged'' accurately describes a
grape brandy which has never been stored in oak containers and, as
such, is equally as informative to consumers than the designation
``immature.'' Therefore, the Bureau is proposing to require grape
brandy that has never been aged in wood to be labeled either
``immature'' or ``unaged''. ATF believes that either word on the label
will provide consumers with adequate information as to the identity of
the product. Nevertheless, ATF is interested in comments on whether the
continued use of ``immature'' to describe brandy that has never been
aged and brandy that has been aged for some time but less than 2 years
could lead to consumer confusion. Furthermore, brandy producers will
have greater choices in labeling their products.
The proposal applies to grape brandy (other than neutral brandy,
pomace brandy, marc brandy, or grappa brandy) distilled from the
fermented juice, mash, or wine of grapes, or the residue thereof. Grape
brandy stored in oak containers for any amount of time less than 2
years must still be designated as ``immature''.
Finally, the petitioner asked that ATF prohibit the addition of
coloring to an ``unaged brandy''. Under the current regulations,
Sec. 5.23, harmless flavoring, blending, or coloring materials
(including caramel) may be added to any class and type of distilled
spirits, within certain limitations, without altering the class or type
of the distilled spirits. While ATF is not proposing to amend
Sec. 5.23, the Bureau is soliciting comments on whether there should be
any restrictions on the addition of harmless coloring, flavoring, or
blending materials in the case of unaged grape brandy.
Executive Order 12866
It has been determined that this proposed rule is not a significant
regulatory action as defined in E.O. 12866. Therefore, a regulatory
assessment is not required.
Regulatory Flexibility Act
It is hereby certified that this proposed regulation will not have
a significant economic impact on a substantial number of small
entities. The proposed rule is liberalizing in nature in that brandy
producers will have greater choices in labeling their products.
Accordingly, a regulatory flexibility analysis is not required.
Public Participation
ATF requests comments on the proposed regulations from all
interested persons. Comments received on or before the closing date
will be carefully considered. Comments received after that date will be
given the same consideration if it is practical to do so, but assurance
of consideration cannot be given except as to comments received on or
before the closing date.
ATF will not recognize any material in comments as confidential.
Comments may be disclosed to the public. Any material which the
commenter considers to be confidential or inappropriate for disclosure
to the public should not be included in the comment. The name of the
person submitting a comment is not exempt from disclosure.
Any interested person who desires an opportunity to comment orally
at a public hearing should submit his or her request, in writing, to
the Director within the 90-day comment period. The Director, however,
reserves the right to determine, in light of all circumstances, whether
a public hearing is necessary.
Disclosure
Copies of this notice and the written comments will be available
for public inspection during normal business hours at: ATF Public
Reading Room, Room 6480, 650 Massachusetts Avenue, NW, Washington, DC.
Drafting Information: The author of this document is James P.
Ficaretta, Wine, Beer and Spirits Regulations Branch, Bureau of
Alcohol, Tobacco and Firearms.
List of Subjects in 27 CFR Part 5
Advertising, Consumer protection, Customs duties and inspection,
Imports, Labeling, Liquors, Packaging and containers.
Authority and Issuance
ATF is proposing to amend Part 5 in Title 27 of the Code of Federal
Regulations as follows:
PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS
Par. 1. The authority citation for 27 CFR Part 5 continues to read
as follows:
Authority: 26 U.S.C. 5301, 7805; 27 U.S.C. 205.
Par. 2. Section 5.22(d)(1) is amended by revising the third
sentence to read as follows:
Sec. 5.22 The standards of identity.
* * * * *
(d) * * *
(1) * * * Fruit brandy, derived from grapes, shall be designated as
``grape brandy'' or ``brandy'', except that in the case of brandy
(other than neutral brandy, pomace brandy, marc brandy or grappa
brandy) distilled from the fermented juice, mash, or wine of grapes, or
the residue thereof: which has been stored in oak containers for some
period of time less than 2 years, the statement of class and type shall
be immediately preceded, in the same size and kind of type, by the word
``immature''; or which has never been stored in oak containers, the
statement of class and type shall be immediately preceded, in the same
size and kind of type, by the word ``immature'' or ``unaged''. * * *
* * * * *
Par. 3. Section 5.40 is amended by revising the first sentence in
paragraph (b) and the second proviso in paragraph (e)(2) to read as
follows:
Sec. 5.40 Statements of age and percentage.
* * * * *
(b) Statements of age for rum, brandy, and Tequila. Age may, but
need not, be stated on labels of rums, brandies, and
[[Page 30017]]
Tequila, except that an appropriate statement with respect to age shall
appear on the brand label in the case of brandy (other than immature or
unaged brandies, as provided in Sec. 5.22(d)(1), and fruit brandies
which are not customarily stored in oak containers) not stored in oak
containers for a period of at least 2 years. * * *
* * * * *
(e) * * *
(2) * * * And provided further, That the labels of whiskies and
brandies (except immature or unaged brandies, as provided in
Sec. 5.22(d)(1)) not required to bear a statement of age, and rum and
Tequila aged for not less than 4 years, may contain general
inconspicuous age, maturity or similar representations without the
label bearing an age statement.
Par. 4. Section 5.65(c) is amended by revising the last sentence to
read as follows:
Sec. 5.65 Prohibited practices.
* * * * *
(c) Statement of age. * * * An advertisement for any whisky or
brandy (except immature or unaged brandies, as provided in
Sec. 5.22(d)(1)) which is not required to bear a statement of age on
the label or an advertisement for any rum or Tequila, which has been
aged for not less than 4 years may, however, contain inconspicuous,
general representations as to age, maturity or other similar
representations even though a specific age statement does not appear on
the label of the advertised product and in the advertisement itself.
* * * * *
Signed: April 25, 1996.
Bradley A. Buckles,
Acting Director.
Approved: May 15, 1996.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary, (Regulatory, Tariff and Trade
Enforcement).
[FR Doc. 96-14859 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-31-U
Complete official Federal Register PDF
FR Doc. 96-14858 Distribution and Use of Denatured Alcohol and Rum (95R-028P)
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Page 30019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14858]
[[Page 30019]]
27 CFR Part 20
[Notice No. 827]
RIN 1512-AB57
Distribution and Use of Denatured Alcohol and Rum (95R-028P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Advance notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: Pursuant to the President's regulatory reform initiative, ATF
is conducting a complete review of all Federal government regulations
relating to the distribution and use of denatured alcohol and rum. ATF
believes that the regulations can be modernized and simplified since
the last major revision in 1985.
ATF is issuing this advance notice to solicit comments on ways in
which the regulations can be simplified so as to greatly reduce or
eliminate unnecessary regulatory burdens on industry members, while
continuing to provide adequate protection of the revenue.
DATES: Comments must be submitted by August 12, 1996.
ADDRESSES: Submit all comments to: Chief, Wine, Beer, and Spirits
Regulations Branch; Bureau of Alcohol, Tobacco and Firearms; P.O. Box
50221; Washington, DC 20091-0221. ATTN: Notice No. 827.
FOR FURTHER INFORMATION CONTACT: Mary A. Wood; Wine, Beer, and Spirits
Regulations Branch; Bureau of Alcohol, Tobacco and Firearms; 650
Massachusetts Avenue, NW; Washington, DC 20226; (202) 927-8210.
SUPPLEMENTARY INFORMATION:
Background
ATF wishes to solicit comments from the public on its proposal to
conduct a complete review of the regulatory requirements in Part 20
pertaining to the distribution and use of denatured alcohol and rum.
ATF aims to eliminate, revise, or simplify the regulations where
necessary. ATF believes that the current regulations may contain
unnecessary provisions and ATF desires to delete regulatory
requirements which have become obsolete.
ATF wants to ensure that the regulations provided for in this part
are made as simple as possible, while still providing the necessary
protection to the revenue. In updating the regulations, primary
emphasis will be given to the simplification of procedures for
qualifying as a denatured alcohol and rum distributor and user or for
keeping records and filing reports.
ATF solicits comments on the following issues:
(1) Are specific regulations in Part 20 duplicative and
unnecessary? Can specific sections of the regulations be combined to
eliminate such duplication?
(2) Can the permit application, approved formula or statement of
process, or loss claim requirements in these regulations be made more
streamlined, while continuing to provide adequate safeguards to the
revenue?
(3) Can the labeling requirements for articles or packages of
specially denatured spirits be simplified?
(4) Are there any other suggestions for providing flexibility in
the provisions in Part 20, including the recovery of denatured spirits
and the reuse of the recovered spirits.
(5) Overall, ATF would like to solicit general comments on ways in
which it could reduce recordkeeping paperwork and/or simplify
procedures, while continuing to maintain adequate safeguards to the
revenue.
(6) Finally, under the current regulations, ATF may grant a
permittee's request for an alternate method or procedure as a variance
from some regulatory requirements. ATF is interested in comments from
permittees concerning their experience with such variances and whether
these regulations should be revised to incorporate some of the
practices authorized by existing variances.
Participation
ATF requests comments from all interested persons. All comments
received on or before the closing date will be carefully considered.
Comments received after that date will be given the same consideration
if it is practical to do so, but assurance of consideration cannot be
given except as to comments received on or before the closing date.
ATF will not recognize any material as confidential. Comments may
be disclosed to the public. Any material which the commenter considers
to be confidential or inappropriate for disclosure should not be
included in the comment. The name of the person submitting the comment
is not exempt from disclosure.
During the comment period, any person may request an opportunity to
present oral testimony at a public hearing. However, the Director
reserves the right, in light of all circumstances, to determine if a
public hearing is necessary.
Executive Order 12866
It has been determined that this proposed regulation is not a
significant regulatory action as defined in Executive Order 12866.
Accordingly, this proposal is not subject to the analysis required by
this Executive Order.
Drafting Information: The principal author of this document is
Mary A. Wood of the Wine, Beer, and Spirits Regulations Branch,
Bureau of Alcohol, Tobacco and Firearms.
List of Subjects in 27 CFR Part 20
Administrative practice and procedure, Advertising, Alcohol and
alcohol beverages, Authority delegations, Claims, Excise taxes,
Reporting and recordkeeping requirements, Surety bonds.
Authority and Issuance
This advance notice of proposed rulemaking is issued under the
authority in 26 U.S.C. 5001, 5206, 5214, 5241-5276, 5311, 5552, 5555,
5607, 6065, 7805.
Signed: May 17, 1996.
Bradley A. Buckles,
Acting Director.
Approved: May 24, 1996.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 96-14858 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-31-P
Complete official Federal Register PDF
FR Doc. 96-14852 Liquors and Articles From Puerto Rico and the Virgin Islands (1512-AB50)
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30021-30023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14852]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
27 CFR Part 250
[Notice No. 825]
RIN: 1512-AB50
Liquors and Articles From Puerto Rico and the Virgin Islands
(1512-AB50)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Advance notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: ATF is considering the revision and recodification of the
regulations regarding liquors and articles (hereinafter ``alcoholic
products'') which are brought into the United States from Puerto Rico
or the Virgin Islands. The purpose of the proposed revision/
recodification is to update and simplify the regulations in 27 CFR Part
250 and to reissue those regulations as part of the same chapter. ATF
is issuing this advance notice to solicit comments on its proposal to
eliminate application and transaction forms required to be submitted by
persons who bring alcoholic products into the United States from Puerto
Rico.
Comments are also being solicited on proposals to coordinate with
the U.S. Customs Service to reduce duplicate efforts involving
shipments of merchandise from Puerto Rico to the United States. ATF
would also like to receive comments regarding other suggestions for
reducing or eliminating unnecessary regulatory burdens on proprietors
in both Puerto Rico and the United States while continuing to provide
adequate protection to the revenue.
DATES: Written comments must be received on or before September 11,
1996.
ADDRESSES: Comments must be submitted to the Chief, Wine, Beer, and
Spirits Branch, P.O. Box 50221, Washington, DC 20091-0221. ATTN Notice
No. 825.
FOR FURTHER INFORMATION CONTACT: Tami Light, Wine, Beer and Spirits
Branch, Bureau of Alcohol, Tobacco and Firearms, Washington, DC 20226,
(202) 927-8210.
[[Page 30022]]
SUPPLEMENTARY INFORMATION:
Background
Pursuant to section 7652 of the Internal Revenue Code of 1986,
alcoholic products of Puerto Rican manufacture which are brought into
the United States for consumption or sale, and alcoholic products
coming into the United States from the Virgin Islands, are subject to a
tax equal to the tax imposed on similar products of domestic
manufacturer.
Under section 5232, distilled spirits brought into the United
States in bulk containers from Puerto Rico or the Virgin Islands may be
withdrawn from Customs custody and transferred to the bonded premises
of a distilled spirits plant without payment of tax.
On September 8, 1992, ATF published in the Federal Register an
advanced notice of proposed rulemaking, Notice No. 751, 57 FR 40885, in
order to solicit comments on its proposal to review and update the
regulations pertaining to shipments of alcoholic products from Puerto
Rico or the Virgin Islands to the United States, and plans to recodify
and reissue such regulations now in 27 CFR part 250 as part 26 of the
same chapter. In response to Notice No. 751, two favorable comments
were received from the Jim Beam Co. (Beam) and the National Association
of Beverage Importers, Inc. In general, both of these comments
supported ATF's proposed simplification of application and
recordkeeping requirements. In addition, Beam supported ATF's proposed
coordination with the U.S. Customs Service to streamline regulation of
Puerto Rican products. Given ATF's continued interest in these
proposals, the relative lack of comments received during its initial
airing, and the length of time since these issues were first
considered, ATF is reairing its proposal in its entirety to give
industry and concerned citizens another opportunity to comment.
Proposals
ATF would like to reorganize the regulations to eliminate often
lengthy duplication of requirements that apply equally to operations in
Puerto Rico and the Virgin Islands. We are considering deleting many
regulatory requirements which may be unnecessary.
In updating the regulations, primary emphasis will be given to the
simplification of procedures for the taxpayment and shipment of
alcoholic products from Puerto Rico to the United States. ATF is also
considering proposals to coordinate with the U.S. Customs Service to
reduce duplicate efforts at the port of arrival in the United States
when such products are shipped from Puerto Rico, however, the
responsibilities of Customs with respect to shipments from the Virgin
Islands would remain unchanged.
Under current regulations, before distilled spirits, wine or beer
may be shipped from Puerto Rico to the United States, an application on
ATF Form 5110.51, Application, Permit and Report-Wine and Beer (Puerto
Rico), must be submitted and a permit received to verify computation of
the internal revenue tax. After tax determination, a second application
and permit on ATF Form 487-B (5170.5) Application and Permit to Ship
Liquors and Articles of Puerto Rican Manufacturer Taxpaid to the United
States, is required in order to ship the taxpaid or tax determined
products to the United States.
ATF is considering ways to reduce paperwork and simplify the
procedures for shipping distilled spirits, beer or wine from Puerto
Rico to the United States. We would like comments on the following
proposals:
(1) Should the regulations be amended to permit the proprietor of
qualified premises in Puerto Rico to maintain a record of tax
determination in lieu of the application and permit to compute the tax?
ATF is proposing that, in lieu of the initial application and permit
currently required to compute the tax, a record of tax determination be
kept by the proprietor containing sufficient information to allow an
ATF officer to verify the tax liability represented by the document.
(2) Should the regulations be amended to allow such record of tax
determination to be an invoice, bill of lading, or other commercial
document which would contain the necessary data elements?
(3) If ATF adopts the above proposals what additional safeguards to
the revenue would be necessary?
(4) Do the current provisions in part 250 adequately address the
bulk shipment of distilled spirits from Puerto Rico to the United
States? ATF is interested in whether or not the regulations reflect the
current technology or shipment and distribution practices in this area.
(5) In this advance notice, ATF would like to solicit comments on
specific ways in which it could reduce paperwork, simplify existing
procedures and eliminate unnecessary regulations in any area concerning
Puerto Rico or the Virgin Islands that is currently covered in part
250, while continuing to maintain adequate safeguards to the revenue.
(6) ATF would like specific comments on the experience of the
industry with respect to any duplicative regulatory efforts by ATF and
the U.S. Customs Service on shipments of distilled spirits from Puerto
Rico to the United States.
(7) Finally, under the current regulations, ATF may grant an
industry member's request for an alternate method or procedure as a
variance from some regulatory requirements. ATF is interested in
comments from industry members concerning their experience with such
variances and whether these regulations should be revised to
incorporate some of the practices authorized by existing variances.
Public Participation
ATF requests comments from all interested persons. All comments
received on or before the closing date will be carefully considered.
Comments received after the closing date will be given the same
consideration if it is practical to do so, but assurance of
consideration cannot be given except as to comments received on or
before the closing date.
ATF will not recognize any material or comments as confidential.
All comments submitted in response to this advance notice will be
available for public inspection during normal business hours at: ATF
Public Reading Room, room 6480, 650 Massachusetts Avenue NW.,
Washington, DC. Any material that the commenter considers confidential
or inappropriate for disclosure to the public should not be included in
the comment. The name of the person submitting a comment is not exempt
from disclosure.
Executive Order 12866
It has been determined that this proposed regulation is not a
significant regulatory as defined by Executive Order 12866.
Accordingly, this proposal is not subject to the analysis required by
this Executive Order.
Drafting Information: The principal author of this document is
Tami Light of the Wine, Beer and Spirits Branch, Bureau of Alcohol,
Tobacco and Firearms.
List of Subjects in 27 CFR Part 250
Administrative practice and procedure, Alcohol and alcoholic
beverages, Authority delegations, Beer, Customs duties and inspection,
Electronic fund transfers, Excise taxes, Liquors, Packaging and
containers, Puerto Rico, Reporting and recordkeeping requirements,
Surety bonds, Transportation, Virgin Islands, Warehouses, Wine.
[[Page 30023]]
Authority: This advance notice of proposed rulemaking is issued
under the authority in 26 U.S.C. 7805.
Signed: May 17, 1996.
Bradley A. Buckles,
Acting Director.
Approved: May 24, 1996.
John P. Simpson.
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 96-14852 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-31-U
Complete official Federal Register PDF
FR Doc. 96-14851 Recodification of the Statement of Procedural Rules in Part 70 (96R-007P)
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30013-30014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14851]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
27 CFR Parts 0 and 70
[Notice No. 824]
RIN 1512-AB54
Recodification of the Statement of Procedural Rules in Part 70
(96R-007P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: As part of a regulatory reform initiative, the Bureau of
Alcohol, Tobacco and Firearms (ATF) is proposing to revise the
statement of procedural rules in subpart E of 27 CFR Part 70, and
recodify this statement as a new part 0 of 27 CFR. ATF solicits
comments on its proposals and suggestions for further improvements in
the statement of procedural rules.
DATES: Written comments must be received by August 12, 1996.
ADDRESSES: Send written comments to: Chief, Wine, Beer and Spirits
Regulations Branch, Bureau of Alcohol, Tobacco and Firearms, P.O. Box
50221, Washington, DC 20091-0221, Attn: Notice No. 824. Copies of
written comments received in response to this notice of proposed
rulemaking will be available for public inspection during normal
business hours at: ATF Reference Library, Office of Public Affairs and
Disclosure, Room 6480, 650 Massachusetts Avenue, NW, Washington, DC
20226.
FOR FURTHER INFORMATION CONTACT: Marjorie D. Ruhf, Wine, Beer and
Spirits Regulations Branch, Bureau of Alcohol, Tobacco and Firearms,
650 Massachusetts Avenue, NW., Washington, DC 20226 (202-927-8230).
[[Page 30014]]
SUPPLEMENTARY INFORMATION:
Background
On February 21, 1995, President Clinton announced a regulatory
reform initiative. As part of this initiative, each Federal agency was
instructed to conduct a page by page review of all agency regulations
to identify those which are obsolete or burdensome and those whose
goals could be better achieved through the private sector, self-
regulation or state and local governments. In cases where the agency's
review disclosed regulations which should be revised or eliminated, the
agency would propose administrative changes to its regulations. In
addition, on April 13, 1995, the Bureau published Notice 809 (60 FR
18783) requesting comments from the public regarding which ATF
regulations could be improved or eliminated.
No specific comments were received in response to that notice
concerning the content or arrangement of the statement of procedural
rules in subpart E of 27 CFR Part 70. The Bureau, in its own review,
determined that the statement of procedural rules should be removed
from its present location and placed in a location which reflects its
unique function as a summary statement of the regulations and the
formal and informal procedures applicable to the activities conducted
under the laws administered and enforced by ATF. In addition, the
statement of procedural rules will soon need substantial revision to
reflect ongoing projects consolidating, eliminating and revising other
parts of the regulations. Finally, ATF wishes to improve the usefulness
of the statement of procedural rules to the public and regulated
industries as a guide to agency operations.
Proposed Changes
When the pending regulatory reform projects are complete, ATF plans
to revise the statement of procedural rules in order to provide current
descriptions and citations. At the same time, ATF proposes to move the
statement of procedural rules from its current location as sections
70.411 to 70.462 of subpart E of 27 CFR Part 70 to a new location as 27
CFR Part 0 at the beginning of 27 CFR for ease of use. We also plan to
restructure the statement. We believe the statement will be more
helpful and easier to use as a reference tool if it is divided into
more sections, to allow for better indexing, and arranged by commodity,
so that all provisions relating to a particular subject will be
together. For example, instead of having information pertaining to wine
labels mixed in with discussions of nonindustrial use of distilled
spirits and establishment of breweries, we will adopt an arrangement
which will place descriptions of all ATF procedural rules which affect
wine labeling together in one location.
Public Participation
ATF requests comments from all interested persons on the proposals
presented in this notice. We particularly request suggestions for any
additional information which should be placed in the statement of
procedural rules to make it more useful, and any suggestions for
arrangement or indexing of the information already contained in the
statement.
After consideration of all comments and suggestions, ATF may issue
a Treasury decision. The proposals discussed in this notice may be
modified due to comments and suggestions received.
Comments received on or before the closing date will be carefully
considered. Comments received after the closing date will be given the
same consideration if it is practical to do so, but assurance of
consideration cannot be given except as to comments received on or
before the closing date. ATF will not recognize any material or
comments as confidential. All comments submitted in response to this
notice will be available for public inspection. Any material that the
commenter considers confidential or inappropriate for disclosure to the
public should not be included in the comment. The name of the person
submitting the comment is not exempt from disclosure.
Executive Order 12866
It has been determined that this document is not a significant
regulatory action as defined in E.O. 12866; therefore, a regulatory
assessment is not required.
Regulatory Flexibility Act
It is hereby certified that these proposed regulations will not
have a significant economic impact on a substantial number of small
entities. Accordingly, a regulatory flexibility analysis is not
required. The changes proposed are for the purpose of clarifying the
existing regulations and making them easier to use. No substantive
changes are proposed. Pursuant to section 7805(f) of the Internal
Revenue Code, this proposed regulation has been submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on its impact on small business.
Paperwork Reduction Act
Although the information collections described in sections 70.411
through 70.414, 70.431 and 70.433 of subpart E of Part 70 merely
summarize and reference the parts of Title 27 CFR where the information
collections are imposed, these sections were reviewed and approved by
the Office of Management and Budget under control numbers 1512-0141 and
1512-0472. These control numbers were in effect on October 1, 1995, the
effective date of the Paperwork Reduction Act of 1995. Any comments on
these collections of information may be sent to the Office of
Management and Budget, Attention: Desk officer for the Department of
the Treasury, Bureau of Alcohol, Tobacco and Firearms, Office of
Information and Regulatory Affairs, Washington, DC 20503, with copies
to the Chief, Document Services Branch, Room 3450, Bureau of Alcohol,
Tobacco and Firearms, 650 Massachusetts Avenue, NW, Washington, DC
20226. No additional requirement to collect information is proposed in
this document.
Drafting Information: The principal author of this document is
Marjorie D. Ruhf of the Wine, Beer and Spirits Regulations Branch,
Bureau of Alcohol, Tobacco and Firearms.
List of Subjects in 27 CFR Part 70
Administrative practice and procedure, Alcohol and alcoholic
beverages, Authority delegations, Bankruptcy, Claims, Disaster
assistance, Excise taxes, Firearms and ammunition, Government
employees, Law enforcement, Law enforcement officers, Penalties,
Reporting and recordkeeping requirements, Seizures and forfeitures,
Surety bonds, Tobacco.
Authority: This notice of proposed rulemaking is issued under
the authority in 18 U.S.C. 847 and 926; 26 U.S.C. 7805; 27 U.S.C.
201-219a.
Signed: May 21, 1996.
John W. Magaw,
Director.
Approved: May 24, 1996.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 96-14851 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-31-U
Complete official Federal Register PDF
FR Doc. 96-14850 Distribution and Use of Tax-Free Alcohol (95R-030P)
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30019-30021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14850]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
27 CFR Part 22
[Notice No. 828]
RIN 1512-AB51
Distribution and Use of Tax-Free Alcohol (95R-030P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: Pursuant to the President's regulatory reform initiative, the
Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing revisions in
this notice to eliminate and liberalize certain regulatory requirements
relating to tax-free alcohol. ATF believes that these proposed
revisions will greatly reduce and simplify the qualification process
governing the tax-free alcohol permit application process.
DATES: Written comments must be received on or before August 12, 1996.
ADDRESSES: Submit written comments to: Chief, Wine, Beer, and Spirits
[[Page 30020]]
Regulations Branch; Bureau of Alcohol, Tobacco and Firearms; P.O. Box
50221; Washington, DC 20091-0221. ATTN: Notice No. 828.
FOR FURTHER INFORMATION CONTACT: Mary A. Wood, Wine, Beer, and Spirits
Regulations Branch; Bureau of Alcohol, Tobacco and Firearms; 650
Massachusetts Avenue, NW; Washington, DC 20226; (202) 927-8210.
SUPPLEMENTARY INFORMATION:
Background
There are certain registration requirements under the law and its
implementing regulations that must be met prior to the issuance of a
permit to withdraw and use tax-free alcohol. Depending upon the class
of the applicant, these registration requirements may include the
submission of a detailed application and supporting data, the payment
of special (occupational) tax (SOT) and the acquisition of bond
coverage. Once such registration requirements are met, the applicant is
issued a tax-free alcohol users permit and may commence conducting any
of the uses authorized under the law and regulations for tax-free
alcohol permittees. The permittee is allowed to purchase and acquire
alcohol from a registered distilled spirits plant (DSP) free of the
excise tax payments normally required to be made by the DSP proprietor.
For this reason, tax-free alcohol authorized uses and users are
limited or restricted under the law. Tax-free alcohol may not be
withdrawn and used for beverage purposes, in food products, or in any
preparation used in preparing beverage or food products. Tax-free
alcohol may not be sold, used in the manufacture of any product for
sale, or sold in any product resulting from the use of tax-free
alcohol. Finally, tax-free alcohol or products resulting from the use
of tax-free alcohol may not be removed from the permit premises.
Authorized users of tax-free alcohol include any State or political
subdivision of a State, or the District of Columbia acquiring the
alcohol for nonbeverage purposes. Tax-free alcohol may also be used by
any educational organization (exempt from income tax), scientific
university or college of learning, laboratory for use exclusively in
scientific research, hospital, blood bank, sanitarium, pathological
laboratory exclusively engaged in making analyses, or tests, for
hospitals or sanitariums, or clinic operated for charity and not for
profit. These permittees are unique in that they are not engaged in the
business of selling tax-free alcohol or any product manufactured from
or containing tax-free alcohol. Any permittee who uses tax-free alcohol
in a manner that violates the laws and regulations becomes liable for
the tax and other provisions of the Internal Revenue Code of 1986, 26
U.S.C. 5001(a)(4).
ATF believes that the present bond requirements are unnecessary and
the qualification requirements can be effectively streamlined.
Therefore, ATF is proposing to delete the bond requirements and revise
the qualification requirements for obtaining a permit to withdraw and
use tax-free alcohol and is soliciting public comments on them.
Bonds and Consents of Surety
Section 5272 of the Internal Revenue Code of 1986 provides that
bond coverage may be required as part of the tax-free alcohol permit
qualification process. Subpart E of the implementing regulations at 27
CFR Part 22, requires every applicant, with certain exceptions, to
obtain a bond prior to the issuance of a permit. In 1985, the tax-free
regulations were revised and the exemption from bond coverage was
expanded. See, T.D. ATF-199, 50 Fed. Reg. 9152 (March 6, 1985). Under
those revisions, the percentage of users of tax-free alcohol who were
exempt from filing a surety bond increased from 36 percent under the
prior regulations to 75 percent under the adopted regulations.
Based on the post-1985 experience in administering Part 22, ATF
believes that bond coverage should no longer be required of any
applicant for a tax-free alcohol permit.
Additionally, ATF believes that elimination of the bond requirement
under Subpart E will result in substantially reduced administrative and
financial burdens on the tax-free alcohol permittees.
Qualification
Section 5271 of the Internal Revenue Code of 1986 requires the
submission of an application before a permit may be issued to procure
and use tax-free alcohol. Current regulations require the submission of
a detailed application with supporting data by all applicants. The
regional director (compliance) is authorized to waive some of the
detailed data for applicants who are a State, political subdivisions
thereof or the District of Columbia or whose annual withdrawal and
usage of tax-free alcohol will not exceed 1,500 proof gallons.
ATF believes that this waiver should be available to all applicants
when the regional director (compliance) concludes that the revenue is
adequately protected with respect to the person submitting the
application. ATF is, therefore, proposing that regulatory provisions be
made that will allow the regional director (compliance) to waive
detailed applications with supporting data for all applicants. The
regulations will continue to recognize the current waiver category of
applicants who are governmental entities and the waiver category based
on the 1,500 proof gallon annual withdrawal and usage is encompassed by
the proposed amended regulation.
Public Participation
ATF requests written comments from all interested persons. All
comments received on or before the closing date will be carefully
considered. Comments received after that date will be given the same
consideration if it is practical to do so, but assurance of
consideration cannot be given except as to comments received on or
before the closing date.
ATF will not recognize any material as confidential. Any material
which the commenter considers to be confidential or inappropriate for
disclosure should not be included in the comment. The name of the
person submitting the comment is not exempt from disclosure.
Any interested person who desires an opportunity to comment orally
at a public hearing should submit his or her request, in writing, to
the Director within the 60-day comment period. The Director, however,
reserves the right to determine, in light of all circumstances, whether
a public hearing will be scheduled.
Written comments will be available for public inspection during
normal business hours at the following address: ATF Reading Room,
Office of Public Affairs and Disclosure, Room 6480, 650 Massachusetts
Avenue, NW, Washington, DC.
Regulatory Flexibility Act
It is hereby certified that this proposed regulation will not have
a significant economic impact on a substantial number of small
entities. The regulations will give ATF specific regulatory authority
to relax and remove certain registration requirements. The regulations
will not increase recordkeeping or reporting requirements. Accordingly,
a regulatory flexibility analysis is not required because the proposal,
if promulgated as a final rule, will not have a significant economic
impact on a substantial number of small entities.
Executive Order 12866
It has been determined that this proposed regulation is not a
significant regulatory action as defined in
[[Page 30021]]
Executive Order 12866. Accordingly, this proposal is not subject to the
analysis required by this Executive Order.
Paperwork Reduction Act
The provisions of the Paperwork Reduction Act of 1980, Pub. L. 96-
511, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR Part
1320, do not apply to this notice because no new information collection
requirements are being proposed.
The existing collections of information contained in this notice of
proposed rulemaking have been previously reviewed and approved by the
Office of Management and Budget in accordance with the requirements of
the Paperwork Reduction Act of 1980 (44 U.S.C. 3504(h) under control
numbers 1512-0334 and 1512-0335.
Drafting Information: The principal drafter of this document is
Mary A. Wood of the Wine, Beer, and Spirits Regulations Branch,
Bureau of Alcohol, Tobacco, and Firearms.
List of Subjects in 27 CFR Part 22
Administrative practice and procedure, Advertising, Alcohol and
alcohol beverages, Authority delegations (Government agencies), Claims,
Excise taxes, Reporting and recordkeeping requirements, Surety bonds.
Authority and Issuance
ATF is proposing to amend Part 22 in Title 27 of the Code of
Federal Regulations as follows:
PART 22--DISTRIBUTION AND USE OF TAX-FREE ALCOHOL
Par. 1. The authority citation for Part 22 continues to read as
follows:
Authority: 26 U.S.C. 5001, 5121, 5142, 5143, 5146, 5206, 5214,
5271-5276, 5311, 5552, 5555, 6056, 6061, 6065, 6109, 6151, 6806,
7011, 7805; 31 U.S.C. 9304, 9306.
Sec. 22.21 [Amended]
Par. 2. Section 22.21(a) is amended by removing the word ``bonds,''
from the first sentence.
Sec. 22.25 [Removed]
Par. 3. Section 22.25 is removed.
Sec. 22.26 [Redesignated]
Par. 4. Section 22.26 is redesignated as Sec. 22.25.
Sec. 22.27 [Redesignated]
Par. 5. Section 22.27 is redesignated as Sec. 22.26.
Sec. 22.43 [Amended]
Par. 6. In Sec. 22.43, paragraphs (a)(2) and (b) are revised as
follows:
Sec. 22.43 Exceptions to application requirements.
(a) * * *
(2) Applications, Form 5150.22, filed by applicants where the
regional director (compliance) has determined that the waiver of such
requirements does not pose any jeopardy to the revenue or a hindrance
of the effective administration of this part.
(b) The waiver provided for in this section will terminate for a
permittee, other than States or political subdivisions thereof or the
District of Columbia, when the permittee files an application to amend
the permit and the regional director (compliance) determines that the
conditions justifying the waiver no longer exist. In this case, the
permittee will furnish the information in respect to the previously
waived items, as provided in Sec. 22.57(a)(2).
Sec. 22.59 [Amended]
Par. 7. In Sec. 22.59, the second sentence of the section is
removed.
Sec. 22.60 [Amended]
Par. 8. Section 22.60 is amended as follows:
1. Paragraph (b) is removed.
2. Paragraph (c) is redesignated as paragraph (b).
3. Paragraph (d) is redesignated as paragraph (c).
Sec. 22.62 [Amended]
Par. 9. Section 22.62 is amended by the removal of the last
sentence in the section.
Sec. 22.63 [Amended]
Par. 10. Section 22.63 is amended as follows:
1. Paragraph (b) is removed.
2. The paragraph letter and title ``(a) Permit.'' designation is
removed.
Sec. 22.68 [Amended]
Par. 11. Section 22.68 is amended as follows:
1. Paragraph (b) is removed.
2. The paragraph letter and title ``(a) Notice.'' designation is
removed.
Subpart E [Removed and Reserved]
Par. 12. Subpart E (Bonds and Consent of Surety) is removed and
reserved.
Sec. 22.152 [Amended]
Par. 13. Section 22.152 is amended as follows:
1. Paragraph (b) is removed.
2. Paragraph (c) is redesignated as paragraph (b).
Signed: May 8, 1996.
Bradley A. Buckles,
Acting Director.
Approved: May 24, 1996.
John P. Simpson.
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 96-14850 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-13-U
Complete official Federal Register PDF
FR Doc. 96-14123 Sale of Seized Property
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30012-30013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14123]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[GL-007-96]
RIN 1545-AU13
Sale of Seized Property
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations relating to the
sale of seized property. The proposed regulations reflect changes
concerning the setting of a minimum price for seized property by the
Tax Reform Act of 1986. The proposed regulations affect all sales of
seized property.
DATES: Written comments and requests for a public hearing must be
received by September 11, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (GL-007-96), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered to:
CC:DOM:CORP:R (GL-007-96), room 5228, Internal Revenue Service, 1111
Constitution Avenue NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Kevin B.
Connelly, (202) 622-3640 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to the Procedure and
Administration Regulations (26 CFR part 301) relating to the sale of
seized property under section 6335 of the Internal Revenue Code (Code).
The Tax Reform Act of 1986 amended section 6335(e), relating to the
manner and conditions of sale, to authorize the Secretary to determine
whether it would be in the best interest of the United States to buy
seized property at the minimum price set by the Secretary. These
proposed regulations reflect this change.
Explanation of Provisions
Section 1570 of the Tax Reform Act of 1986 amended section 6335(e)
of the Code to require the Secretary to determine before the sale of
seized property whether it would be in the best interest of the United
States to purchase such property at the minimum price set by the
Secretary. The best interest determination is to be based on criteria
prescribed by the Secretary. If, at the sale, one or more persons offer
at least the minimum price, the property shall be sold to the highest
bidder. If no one offers at least the minimum price and the Secretary
has determined that it would be in the best interest of the United
States to purchase the property for the minimum price, the property
will be declared sold to the United States for the minimum price. If no
one offers the minimum price and the Secretary has not determined that
it would be in the best interest of the United States to purchase the
property for the minimum price, the property shall be released to the
owner of the property and the expense of the levy and sale shall be
added to the amount of tax for the collection of which the United
States made the levy. Any property released shall remain subject to any
lien imposed by subchapter C of chapter 64 of subtitle F of the Code.
The proposed regulations reflect the changes made by the Tax Reform
Act of 1986. The regulations propose to authorize district directors to
make the required determination whether it would be in the best
interest of the United States to purchase seized property for the
minimum price. In addition, the regulations propose to set forth
factors the district director may consider when determining the best
interest of the United States. The district director may consider all
relevant facts and circumstances including for example: (1)
marketability of the property; (2) cost of maintaining the property;
(3) cost of repairing or restoring the property; (4) cost of
transporting the property; (5) cost of safeguarding the property; (6)
cost of potential toxic waste cleanup; and (7) other factors pertinent
to the type of property.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory
[[Page 30013]]
assessment is not required. It also has been determined that section
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the
Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to these
regulations, and, therefore, a Regulatory Flexibility Analysis is not
required. Pursuant to section 7805(f) of the Internal Revenue Code,
this notice of proposed rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on its impact on small business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments that are submitted
timely (preferably a signed original and eight (8) copies) to the IRS.
All comments will be available for public inspection and copying. A
public hearing may be scheduled if requested in writing by a person
that timely submits written comments. If a public hearing is scheduled,
notice of the date, time, and place for the hearing will be published
in the Federal Register.
Drafting Information: The principal author of these regulations
is Kevin B. Connelly, Office of Assistant Chief Counsel (General
Litigation) CC:EL:GL, IRS. However, other personnel from the IRS and
Treasury Department participated in their development.
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 continues to read
in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6335-1 is amended as follows:
1. Paragraph (c)(3) is revised.
2. Paragraphs (c)(4) through (c)(9) are redesignated as paragraphs
(c)(5) through (c)(10).
3. New paragraph (c)(4) is added.
The additions and revision read as follows:
Sec. 301.6335-1 Sale of seized property.
* * * * *
(c) * * *
(3) Determinations relating to minimum price--(i) Minimum price.
Before the sale of property seized by levy, the district director shall
determine a minimum price, taking into account the expenses of levy and
sale, for which the property shall be sold. The internal revenue
officer conducting the sale may either announce the minimum price
before the sale begins, or defer announcement of the minimum price
until after the receipt of the highest bid, in which case, if the
highest bid is greater than the minimum price, no announcement of the
minimum price shall be made.
(ii) Purchase by the United States. Before the sale of property
seized by levy, the district director shall determine whether the
purchase of property by the United States at the minimum price would be
in the best interest of the United States. In determining whether the
purchase of property would be in the best interest of the United
States, the district director may consider all relevant facts and
circumstances including for example--
(a) Marketability of the property;
(b) Cost of maintaining the property;
(c) Cost of repairing or restoring the property;
(d) Cost of transporting the property;
(e) Cost of safeguarding the property;
(f) Cost of potential toxic waste cleanup; and
(g) Other factors pertinent to the type of property.
(iii) Effective date. This paragraph (c)(3) applies to
determinations relating to minimum price made on or after [date final
regulations are published in the Federal Register].
(4) Disposition of property at sale--(i) Sale to highest bidder at
or above minimum price. If one or more persons offer to buy the
property for at least the amount of the minimum price, the property
shall be sold to the highest bidder.
(ii) Property deemed sold to United States at minimum price. If no
one offers at least the amount of the minimum price for the property
and the Secretary has determined that it would be in the best interest
of the United States to purchase the property for the minimum price,
the property shall be declared to be sold to the United States for the
minimum price.
(iii) Release to owner. If the property is not declared to be sold
under paragraph (c)(4)(i) or (ii) of this section, the property shall
be released to the owner of the property and the expense of the levy
and sale shall be added to the amount of tax for the collection of
which the United States made the levy. Any property released under this
paragraph (c)(4)(iii) shall remain subject to any lien imposed by
subchapter C of chapter 64 of subtitle F of the Internal Revenue Code.
(iv) Effective date. This paragraph (c)(4) applies to dispositions
of property at sale made on or after [date final regulations are
published in the Federal Register].
* * * * *
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-14123 Filed 6-12-96; 8:45 am]
BILLING CODE 4830-01-U
Complete official Federal Register PDF
FR Doc. 96-13828 Subsidiaries and Equity Investments
[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 29976-29992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13828]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 /
Proposed Rules
[[Page 29976]]
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Parts 545, 559, 560, 563, 567, 571
[No. 96-47]
RIN 1550-AA88
Subsidiaries and Equity Investments
AGENCY: Office of Thrift Supervision, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Office of Thrift Supervision (OTS) is proposing to update,
reorganize, and streamline its subsidiaries and equity investment
regulations and policy statements. This proposal follows a detailed
review of each pertinent regulation and policy statement to determine
whether it is necessary, imposes the least possible burden consistent
with safety and soundness, and is written in a clear, straightforward
manner. Today's proposal is being made pursuant to the Regulatory
Reinvention Initiative of the Vice President's National Performance
Review and section 303 of the Community Development and Regulatory
Improvement Act of 1994.
DATES: Comments must be received on or before August 12, 1996.
ADDRESSES: Send comments to Manager, Dissemination Branch, Records
Management and Information Policy, Office of Thrift Supervision, 1700 G
Street, NW., Washington, D.C. 20552, Attention Docket No. 96-47. These
submissions may also be hand-delivered to 1700 G Street, NW., from 9:00
A.M. to 5:00 P.M. on business days or may be sent by facsimile
transmission to FAX Number (202) 906-7755. Comments will be available
for inspection at 1700 G Street, NW., from 9:00 A.M. until 4:00 P.M. on
business days.
FOR FURTHER INFORMATION CONTACT: Debra Merkle, Project Manager,
Supervision Policy, (202) 906-5688; Donna Miller, Senior Program
Manager, Supervision Policy, (202) 906-7488; Susan Miles, Senior
Attorney, Regulations and Legislation Division, (202) 906-6798; Dean
Shahinian, Senior Counsel for Corporate Activities, Business
Transactions Division, (202) 906-7289; or Deborah Dakin, Assistant
Chief Counsel, (202) 906-6445, Regulations and Legislation Division,
Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street,
NW., Washington, D.C. 20552.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background of the Proposal
II. Objectives
A. Create More User-Friendly Subsidiary and Equity Investment
Regulations
B. Codify Pass-through Investment Authority
C. Update the List of Preapproved Activities for Service
Corporations
D. Streamline Subsidiary Notice and Application Procedures
E. Clarify and Simplify Computation of the Service Corporation
Investment Limit
F. Clarify What Constitutes a ``Subsidiary'' Under Various
Regulatory Provisions and, in so Doing, Simplify Calculations of
Capital
III. Historical Overview
A. Service Corporations
B. Finance Subsidiaries
C. Operating Subsidiaries
D. Pass-Through Investments
IV. Section-by-Section Analysis
A. New Part 559--Subsidiaries
B. Amendments to Proposed New Part 560--Lending and Investment
C. Disposition of Existing Regulations
V. Chart Showing the Proposed Disposition of Regulations
VI. Request for Comment
VII. Paperwork Reduction Act of 1995
VIII. Executive Order 12866
IX. Regulatory Flexibility Act Analysis
X. Unfunded Mandates Act of 1995
I. Background of the Proposal
In a comprehensive review of the agency's regulations in the spring
of 1995, OTS identified numerous provisions for immediate repeal, plus
several key regulatory areas for further intensive, systematic
regulatory burden analysis. These areas--lending and investment
authority, subsidiaries and equity investments, insurance referrals and
loan-related fees, and charter and bylaws--were selected because they
are vital to thrift operations, and have not been developed on an
interagency basis or been comprehensively reviewed for many years.
Today's proposal presents the results of an intensive review of OTS's
subsidiary and equity investments regulations and related policy
statements.
Since commencing its reinvention initiative in the spring of 1995,
OTS has already repealed eight percent of its regulations. In addition,
in January of 1996, OTS issued a comprehensive proposal on its lending
and investment regulations.1 That proposal, once adopted in final
form, will reduce the number of lending and investment regulations from
43 to 23. Burden reduction proposals regarding charter and bylaws and
insurance referrals and loan-related fees will be issued in the near
future.
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\1\ 61 FR 1162 (January 17, 1996).
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Today's proposal regarding subsidiaries and equity investments is
also expected to result in significant regulatory burden reduction. In
developing this proposal, OTS considered the relevant regulations,
guidance, legal interpretations, and reporting requirements of the
other federal banking agencies. In addition, as with our other
regulatory reinvention efforts, this proposal was prepared in
consultation with those who use the regulations on a daily basis,
including the agency's regional examination staff and a focus group
composed of representatives of the thrift industry.
The consensus that emerged from this process is that the primary
need in the subsidiaries and equity investment area is to enhance
flexibility and clarify available investment options, as opposed to
simply eliminating large portions of regulatory text. Thus, although
today's proposal does call for the elimination of 12 paragraphs of
regulatory text, the most significant burden reduction is expected to
result from clarifying investment options and streamlining procedural
requirements.
II. Objectives
The overarching goal of OTS's reinvention initiative is to reduce
regulatory burden on savings associations to the greatest extent
possible consistent with statutory requirements and safety and
soundness. In the context of the subsidiary and equity investment
regulations, we believe that maximum burden reduction can be achieved
by pursuing the following six specific objectives:
[[Page 29977]]
A. Create More User-Friendly Subsidiary and Equity Investment
Regulations
Our first objective is to make it easier for savings associations
to find and understand the regulations governing subsidiaries and
equity investments. Industry representatives and other reviewers
expressed concern that the current subsidiary and equity investment
regulations are scattered throughout the regulations and are worded in
a confusing manner. Accordingly, this proposal:
Reorganizes the regulations for easier reference. New part
559 consolidates all of the regulations that apply directly to
subsidiaries. It features a chart to allow ready comparisons of the
requirements applicable to operating subsidiaries and service
corporations. This should make it easier for savings associations to
determine which structure will best meet their needs. The lending and
investment chart and regulations in proposed part 560 are also being
expanded to include permissible equity investments.
Employs plain language drafting. Proposed part 559
utilizes plain language drafting techniques that have been pioneered by
the Department of the Interior and promoted by the Vice President's
Regulatory Reinvention Initiative. If thrifts find this approach
helpful, OTS will expand the use of plain language drafting to
encompass other regulatory projects. The goal of plain language
drafting is to decrease industry frustration, inadvertent errors, the
need to seek clarification in correspondence and phone calls, and the
amount of staff time institutions must devote to understanding the
regulations. Plain language drafting emphasizes the use of informative
headings, lists and charts where appropriate, short sentences, sections
and paragraphs, non-technical language (including the use of ``you''),
and sentences in the active voice.
B. Codify Pass-Through Investment Authority
Institutions and examiners have also expressed concern that OTS's
subsidiary and equity investment regulations do not reflect all
significant investment options. As a result, some institutions may not
be aware of options that have been recognized in various OTS opinions
and policy statements.
The most significant gap in the current regulations concerns pass-
through investment authority. As is explained more fully below, federal
savings associations have long been permitted to exercise pass-through
investment authority, that is, to invest in companies that engage
exclusively in activities that federal savings associations may conduct
directly. These companies generally are organized as mutual funds or
limited partnerships. Indirect investments of this type often offer
important benefits--such as risk spreading, enhanced liquidity, and
greater investment security (due to any overcollateralization or
recourse commitment offered by the organizer of the pass-through
entity).
Because pass-through investment authority has been discussed in OTS
opinions and policy statements (rather than the regulations), some
institutions may be unaware of this investment option and applicable
restrictions. Even institutions that are aware of the option frequently
feel the need to write to OTS seeking confirmation or clarification of
the circumstances under which they may exercise this authority. To
resolve this uncertainty, OTS proposes to codify pass-through
investment authority in proposed part 560.
C. Update the List of Preapproved Activities for Service Corporations
OTS's service corporation regulation contains a list of preapproved
activities that service corporations of most federal savings
associations may conduct after notifying OTS. Service corporations
wanting to engage in activities not on the preapproved list must submit
a formal application to OTS demonstrating, among other things, that the
proposed activity is reasonably related to the business of a federal
thrift.
The list of pre-approved service corporation activities has not
been updated for many years. As a result, institutions are often
required to file applications for activities that are clearly
reasonably related, but have not yet been added to the preapproved
list.
The proposal updates the preapproved list in several respects.
First, the list is being amended to confirm that all activities that
federal savings associations may conduct directly are preapproved. This
general authorization is substituted for the current detailed (but
incomplete) listing of specific activities that thrifts may conduct
directly. Second, the proposal broadens the universe of customers for
whom certain services that are already preapproved may be provided.
Third, the proposal adds activities that OTS has routinely approved on
a case-by-case basis and other specific finance-related activities that
have been authorized for bank service corporations and bank operating
subsidiaries. Each of these changes is described in more detail below.
The proposal also reemphasizes OTS's longstanding position that
federal thrifts may, on a case-by-case basis, apply for approval for
their service corporations to engage in any activity not on the
preapproved list that is reasonably related to the operation of a
thrift. The preapproved list reflects the most common service
corporation activities and is not intended to be a comprehensive
statement of every conceivable reasonably related activity.
D. Streamline Subsidiary Notice and Application Procedures
The industry focus group made the agency aware of confusion over
subsidiary notice and application requirements, including what
procedures apply when converting a subsidiary from a service
corporation to an operating subsidiary or the reverse. Regulations
governing service corporations were first promulgated in 1965, finance
subsidiaries in 1984, and operating subsidiaries in 1992. The
procedures for establishing and operating each type of entity have
never been thoroughly harmonized.
Thus, OTS has reviewed these procedural requirements with a view
toward enhancing consistency and clarity and substituting notices for
more burdensome applications (or recordkeeping for notices) wherever
feasible. As a result, the proposal:
Allows all savings associations to establish or acquire
operating subsidiaries upon 30 days notice to OTS. Under current
regulations, all but the strongest institutions must submit an
application for prior OTS approval to establish an operating
subsidiary. As part of this application, institutions must
affirmatively demonstrate that the proposed operating subsidiary will
improve the institution's financial and managerial condition. By
contrast, the strongest institutions (i.e., those eligible for
expedited treatment under 12 CFR 516.3(a)) need only notify OTS 30 days
before establishing an operating subsidiary and, unless OTS objects,
can establish their subsidiaries at the end of that period. Based on
the agency's experience with operating subsidiaries, we have concluded
that the 30-day notice procedure provides adequate information and
opportunity to object whenever an operating subsidiary is proposed by
any federal thrift--especially since operating subsidiaries can only
engage in activities that federal thrifts may conduct directly.
Accordingly, OTS is proposing to apply the notice procedure to all
federal thrifts who wish to form operating subsidiaries.
[[Page 29978]]
Clarifies the procedures for redesignating a subsidiary as
an operating subsidiary or a service corporation. The current
regulations are unclear about how and when a service corporation may be
converted into an operating subsidiary, or an operating subsidiary into
a service corporation, and whether a notice or application must be
filed with OTS. Both operating subsidiaries and service corporations
are incorporated under state law. The distinctions based on ownership,
control, and activities that separate an operating subsidiary from a
service corporation for OTS regulatory purposes do not affect this
underlying corporate form. OTS, therefore, has taken the position that
merely redesignating a service corporation as an operating subsidiary
or vice versa, without adding new activities, does not constitute an
event requiring notice or application to OTS. The proposal makes this
position clear by establishing explicit, streamlined recordkeeping
provisions to document all such redesignations.
Streamlines salvage power procedures affecting service
corporations. Under the current regulations, a savings association must
file an application and obtain formal OTS approval before using its
salvage powers to make an additional investment to protect its interest
in a troubled service corporation. The proposal allows a savings
association to file a notice in lieu of a formal application. Under the
proposal, institutions will be permitted to proceed with salvage
investments in service corporations within 30 days of filing notice,
unless the OTS raises objection.
E. Clarify and Simplify Computation of the Service Corporation
Investment Limit
Section 5(c)(4)(B) of the Home Owners' Loan Act (HOLA) limits a
federal savings association's aggregate investment in service
corporations to 3% of total assets. The implementing regulations have
long provided that all loans to service corporations count toward this
investment limit, except for ``conforming loans.'' The amount of
conforming loans that qualify for exclusion from the 3% limit varies on
the basis of whether the lending institution owns more than 10% of the
stock of the borrowing service corporation.
Institutions have expressed frustration at the complexity and
ambiguity of these service corporation investment rules. Accordingly,
today's proposal clarifies which loans to service corporations may be
considered separately from the general statutory service corporation
investment limit of 3% of assets (see the discussion of proposed
Sec. 559.4 below for details). The proposal also removes the confusing
distinctions tied to a thrift's percentage ownership of the service
corporation. A single rule regarding the amount of qualifying loans to
service corporations that will be exempt from the 3% investment cap
will be applied to all federal thrifts regardless of percentage of
ownership of the service corporation.
F. Clarify What Constitutes a ``Subsidiary'' Under Various Regulatory
Provisions and, in so Doing, Simplify Calculations of Capital
Another concern expressed by the industry focus group was the
complexity of determining the appropriate amount of capital to be held
against service corporation investments, especially when the service
corporation itself has investments in lower-tier entities. A further
complication is that the HOLA ties OTS regulations in the areas of
transactions with affiliates, lending limits, and capital to a variety
of banking statutes and regulations that in turn define ``subsidiary''
differently and not entirely consistently.
Defines ``subsidiary'' in a manner that is more consistent
with the other banking agencies. The proposal adopts the same
definition of ``subsidiary'' used by the other banking agencies for
purposes of transactions with affiliates, lending limits, and notices
regarding subsidiaries. The proposal also modifies the capital
definition of ``subsidiary'' to follow Generally Accepted Accounting
Principles (GAAP) and to be more consistent with the other federal
banking agencies. Currently, the OTS employs a definition of
``subsidiary'' for capital purposes that is far more encompassing than
the definitions used by the other banking agencies and GAAP. This
sometimes results in higher capital requirements for thrifts.
Defines ``includable subsidiary'' in a manner that
eliminates overstatement of the risk presented by lower-tier
nonincludable subsidiaries. Under the current capital regulations (as
interpreted by instructions in the Thrift Financial Report), a savings
association's investment in a first-tier subsidiary engaged exclusively
in activities permissible for national banks must be completely
deducted from capital if a lower-tier subsidiary engages in any
activity impermissible for a national bank. Deduction is required even
when the first-tier subsidiary's investment in the lower-tier
subsidiary constitutes a tiny portion of its total assets. Under the
proposal, savings associations will only be required to deduct the
actual amount of their indirect investment in the lower-tier
nonincludable subsidiary.
The OTS is hopeful that the foregoing reforms, taken as a whole,
will result in a significant decrease in the regulatory burden
associated with establishing and operating thrift subsidiaries and
making pass-through equity investments. The remainder of this preamble
provides a historical overview of the regulation of thrift subsidiaries
and a detailed section-by-section description of the proposed
amendments.
III. Historical Overview
Regulations affecting the ability of savings associations to invest
in service corporations and other subsidiaries and to make limited
equity investments have evolved over the past 30 years in response to
changes in statutes, competition, and the financial markets. The result
has been increased flexibility in service corporation activities and in
the permissible form of corporate structures (e.g., finance
subsidiaries and operating subsidiaries). With this increased
flexibility, however, has come added complexity and elements of
inconsistency.
In order to provide a context for OTS's current proposal, a brief
history of key developments in the subsidiary and equity investment
authority of federal thrifts is provided.
A. Service Corporations
In 1964, Congress authorized federal savings associations to invest
up to one percent of their assets in service corporations.2 The
statute did not limit the types of activities in which such service
corporations could engage. The accompanying legislative history noted,
however, that such investments were expected to be reasonably related
in purpose to the savings and loan business.3 This standard was
incorporated into the implementing regulations of the Federal Home Loan
Bank Board (FHLBB), the predecessor regulatory agency to the OTS. The
FHLBB regulations expressly indicated that certain service corporation
activities met the reasonably related standard and established an
application process for considering other proposed activities. This
allowed federal savings associations and the agency to gain experience
in identifying appropriate service corporation activities.
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\2\ Pub. L. 88-560, section 905, amending 12 U.S.C. 1464.
\3\ H. Rep. 1703, 1964 U.S. Code Congressional and
Administrative News 3444.
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The HOLA was amended in 1980 to expand the authority of federal
savings
[[Page 29979]]
associations ``to act as one-stop family financial centers'' 4 and
to increase the amount a federal savings association could invest in
its service corporations from one percent to a maximum of three percent
of its assets.5
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\4\ S. Rep. 96-368 at 13, 1980 U.S. Code Congressional and
Administrative News 248. See also 45 FR 85049 (Dec. 24, 1980).
\5\ Depository Institutions Deregulation and Monetary Control
Act of 1980, Pub. L. 96-221, 94 Stat. 132, section 401, amending 12
U.S.C. 1464(c)(4)(B).
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In December 1980, the FHLBB proposed to update the list of
preapproved activities for service corporations.6 In determining
which activities were appropriate for preapproval, the FHLBB ``examined
activities that have been approved consistently for service
corporations upon application to the Board, newly authorized activities
for Federal associations, and the present needs of the residential
mortgage market.'' 7 This list of preapproved activities remains
in effect today,8 with only a few additions and modifications,
such as securities brokerage services (added in 1989).9
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\6\ 45 FR 85048 (Dec. 24, 1980) (proposed rule); 46 FR 24526
(May 1, 1981) (final rule).
\7\ 45 FR at 85049.
\8\ In 1982, the FHLBB proposed a much broader list of potential
preapproved activities, 47 FR 9855 (March 8, 1982), but did not
adopt the proposal in the wake of the Garn-St Germain Depository
Institutions Act of 1982 (DIA), which significantly expanded federal
savings association activities. The FHLBB did add personal property
leasing and commercial lending (activities that the DIA had
authorized for federal savings associations) and rearranged the list
for ease of reference, 48 FR 23032 (May 23, 1983).
\9\ 54 FR 32954 (Aug. 11, 1989).
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In 1989, the Financial Institutions Reform, Recovery, and
Enforcement Act (FIRREA) mandated that OTS adopt capital regulations
requiring substantial amounts of additional capital to be held against
thrifts' investments in subsidiaries, such as service corporations,
that engaged as principal in activities not permissible for national
banks. The OTS adopted these regulations in November, 1989.
No new activities have been added to the preapproved list since
1989, although the OTS has continued to receive, review, and process
applications to engage in new activities on a case-by-case basis.
Thus, the same basic regulatory structure for service corporations
first established in 1964--a list of preapproved activities, coupled
with authorization to apply to engage in any other reasonably related
activities--has continued until the present. Nothing in today's
proposal would alter this basic structure. Instead, OTS is proposing to
update the preapproved list, clarify how to compute the service
corporation investment limit, and simplify the capital treatment of
investments in subsidiaries.
B. Finance Subsidiaries
In 1984, the FHLBB recognized a federal savings association's
incidental authority to establish finance subsidiaries.10 These
entities are dedicated financing vehicles created to issue securities
that the parent association is authorized to issue and to remit the
proceeds to the parent. The securities issued via finance subsidiaries
have typically been collateralized mortgage obligations, mortgage-
backed bonds or Eurobonds backed by mortgages or mortgage-related
securities. The finance subsidiary regulation has fallen into disuse
since OTS promulgated the operating subsidiary regulation. Operating
subsidiaries can do all that finance subsidiaries can do and more.
Thus, we are proposing to repeal the finance subsidiary rule.
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\10\ 49 FR 29357 (July 20, 1984).
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C. Operating Subsidiaries
In October, 1992, the OTS authorized federal savings associations
to establish operating subsidiaries.11 Thrift operating
subsidiaries were modeled on national bank operating subsidiaries.
Under the OTS operating subsidiary regulation, a federal thrift may
make unlimited investments in an operating subsidiary, provided the
thrift is the majority owner and has effective operating control and
the subsidiary engages only in activities that the thrift could conduct
directly. Unlike service corporations, operating subsidiaries can issue
minority ownership interests to investors that are not savings
associations. Thus, operating subsidiaries offer federal thrifts
greater structural flexibility. Unlike service corporations, however,
operating subsidiaries can only do what a federal thrift could do
directly.
---------------------------------------------------------------------------
\11\ 57 FR 48942 (Oct. 29, 1992).
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D. Pass-Through Investments
Finance subsidiaries and operating subsidiaries are examples of
pass-through investments. In both instances, a savings association
acquires an interest in a company that in turn engages exclusively in
activities that the savings association can perform directly. However,
pass-through investment options have not been restricted to operating
subsidiaries and finance subsidiaries.
In 1982, the FHLBB issued a legal opinion, which was followed by a
policy statement in 1986, recognizing that federal thrifts have
incidental authority to invest indirectly in permissible
investments.12 In other words, federal thrifts can purchase shares
of a mutual fund, a partnership interest in a limited partnership, or
interests in a similar investment vehicle, provided the pass-through
entity's activities are limited to those a federal thrift could conduct
directly. At about the same time, the OCC, through legal opinions and
guidance, authorized similar investments for national banks.
---------------------------------------------------------------------------
\12\ Memorandum T-79a, issued on June 10, 1986, memorialized
this authority. T-memoranda issued by the FHLBB were the
counterparts of OTS Thrift Bulletins. Memorandum T-79a has not been
superseded by a later Thrift Bulletin.
---------------------------------------------------------------------------
These types of pass-through investments do not count against
service corporation limits, nor are they deemed to be operating
subsidiaries. The pass-through entity must comply with the same
restrictions that would apply if the thrift engaged in the activity or
held the asset directly. Additional restrictions have been imposed on a
case-by-case basis. These include limiting the amount of investment
that a thrift can make in any one pass-through entity to the amount
that would be permitted under the loans to one borrower (LTOB) rule.
(Pass-through investment authority has recently proven to be an
important vehicle for authorizing several community development
investments, such as purchasing limited partnership interests in Low
Income Housing Tax Credit partnerships.)
Several other legal opinions have authorized federal savings
associations (like national banks) to invest, with certain
restrictions, in certain ``special purpose corporations'' that engage
exclusively in activities federal savings associations may conduct
directly. To date, such corporations have been used to enable thrifts
to pool resources with others to obtain basic support services (such as
data processing and ATM operations) free from the operating subsidiary
control requirement and the service corporation investment limits.
One of the key objectives of today's proposal is to rationalize and
harmonize these various pass-through investment options. Codification
of these options will ensure industry awareness, reduce confusion, and
facilitate consistent application of relevant safety and soundness
standards.
IV. Section-by-Section Analysis
A. New Part 559--Subsidiaries
OTS proposes to adopt a new part 559, Subsidiaries, that will
include all of the agency's regulations affecting
[[Page 29980]]
federal thrift subsidiaries, that is, operating subsidiaries and
service corporations. The agency believes this action will make it much
easier for savings associations to find and use these regulations. This
new part will utilize techniques of ``plain language'' drafting,
employing simple expression and short sentences to the full extent
possible.
Section 559.1 What Does This Part Cover? (Proposed)
This proposed section explains the scope of new part 559 and sets
forth OTS's basic statutory authority over operating subsidiaries and
service corporations. The section first explains which regulations in
part 559 apply only to federal savings associations and which apply to
all savings associations. It then incorporates into one place language
from current Secs. 545.74(b)(5) and 545.81(h) regarding limits that OTS
may impose on subsidiary activities for supervisory, safety or
soundness, or legal reasons.
Proposed Sec. 559.1 also incorporates language from current
Sec. 545.81(i). That paragraph provides that the OTS may impose
conditions in writing when authorizing a federal thrift to acquire or
establish an operating subsidiary or to engage in new activities in an
existing operating subsidiary and that such conditions are enforceable.
This statement is true for conditions OTS imposes in all of its
approvals and authorizations, not just those involving operating
subsidiaries. The regulation merely makes explicit what is already
implicit in OTS's safety and soundness jurisdiction.
Subpart A--Regulations Applicable to Federal Savings Associations
(Proposed)
This subpart will contain regulations directly applicable only to
operating subsidiaries and service corporations of federal savings
associations. The subpart may indirectly apply to operating
subsidiaries and service corporations of state-chartered savings
associations by virtue of various statutory and regulatory provisions
that tie state savings associations to certain requirements applicable
to federal thrifts.13
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\13\ See 12 U.S.C. 1828(m) and 1831e, and 12 CFR 303.13.
---------------------------------------------------------------------------
Section 559.2 What Are the Characteristics of, and What Requirements
Apply to, Operating Subsidiaries and Service Corporations of Federal
Savings Associations? (Proposed)
Proposed Sec. 559.2 authorizes federal savings associations to
establish or acquire operating subsidiaries and service corporations.
The introductory text explains that OTS may limit this authority for
supervisory, legal, or safety and soundness reasons.
The majority of proposed Sec. 559.2 takes the form of a chart that
lists, in a side-by-side format, the different characteristics of, and
requirements that apply to, operating subsidiaries and service
corporations. These include ownership, activities, investment limits,
the applicability of other federal statutes and regulations, and
notices. The chart reiterates that in addition to preapproved service
corporation activities, a federal thrift may continue to apply to the
OTS for case-by-case approval to engage in any activity that is
reasonably related to the operation of a thrift.The regulation also
confirms that state law is preempted for operating subsidiaries to the
same extent as it is for the parent federal savings association, as has
been the case since operating subsidiaries were first authorized.
However, state law is not preempted for service corporations.
Where appropriate, and for ease of reference, the subsidiaries
chart cross-references other applicable OTS regulations that have been
the subject of frequent questions to the agency. The chart is derived
in large part from the current regulations at 12 CFR 545.74 and 12 CFR
545.81. OTS expects that this format will make it easier for a federal
savings association to compare these two structures and determine which
best fits the association's needs.
Section 559.3 What Activities Are Permissible for Service
Corporations? (Proposed)
This section replaces the list of preapproved activities found in
current Sec. 545.74(c). OTS proposes to revise the list of preapproved
activities to:
Specifically affirm that any activity a federal thrift may
conduct directly, except deposit-taking, is preapproved for a service
corporation, when conducted in the same manner as allowed at the
federal savings association level. This includes all activities listed
in the HOLA and proposed part 560, as well as other incidental powers
addressed in OTS legal opinions and guidance. As a result, OTS proposes
to delete various activities from the preapproved list that federal
thrifts are obviously permitted to conduct (e.g., lending) and to
reiterate only those activities the service corporation may conduct
without being subject to the same limitations that would apply to the
federal savings association (e.g., data processing services and
leasing). As set forth in the subsidiaries chart at Sec. 559.2(i),
investments made by service corporations are not aggregated with the
parent thrift for purposes of determining the parent thrift's
compliance with any investment limits, such as those that appear in
section 5(c) of the HOLA. For example, the educational loans made by a
service corporation do not count against the parent thrift's
educational lending cap (5% of assets).
Include certain activities that the OTS already routinely
approves on a case-by-case basis (i.e., foreign currency exchange,
operating a collection agency, and distributing welfare benefits).
Specifically include community development and charitable
activities, including investing in community development financial
institutions.
Allow business and professional activities that involve
financial documents, financial clients, or are generally finance-
related to be performed for any person. These activities--clerical,
accounting, and internal auditing services, advertising, liquidity
management and credit analysis, developing personnel benefit plans,
establishing and maintaining remote service units, and purchasing
office supplies and equipment--currently have been preapproved only
when performed for other financial institutions.
Expand the list to include a limited number of services
that have not been previously authorized, but are reasonably related to
the operation of a federal savings association and have been permitted
for bank operating subsidiaries and bank service corporations. These
include financial courier services and check and credit card guaranty
and verification services.
OTS seeks comment on whether certain other activities that have
been permitted only upon application, such as acting as an insurance
agent for private mortgage insurance, or underwriting insurance or
reinsurance, should be preapproved activities for service corporations.
Section 559.4 How Much May a Savings Association Invest in Service
Corporations? (Proposed)
This proposed section replaces current Sec. 545.74(d). It
reiterates that a savings association may invest in the
[[Page 29981]]
aggregate 3% of its assets in one or more service corporations as long
as the excess investment over 2% serves primarily community, inner
city, or community development purposes. In addition, the proposal
revises and significantly simplifies the rules governing when a federal
savings association may make loans to service corporations separate
from the 3% of assets limit. Such loans are only permitted when:
(1) The federal savings association has the authority elsewhere
under the HOLA to make the loan;
(2) The thrift has adequate capacity under any applicable
percentage of assets limit to make the loan (e.g., 10% of assets for
commercial loans); and
(3) The loan complies with the loans-to-one borrower
regulation.14
---------------------------------------------------------------------------
\14\ The LTOB regulation is also being amended to clarify that
it does apply to service corporations. It will remain inapplicable
to a savings association's loans to its operating subsidiaries.
---------------------------------------------------------------------------
This proposed treatment is more consistent with the OCC's treatment
of loans to bank service corporations. It would remove the current
aggregate regulatory limit of 50% of capital on loans to multiple
service corporations, but subjects loans to any one service corporation
to the LTOB requirements. A thrift (like a bank) would be able to
exceed this limit only when making loans to a service corporation that
are secured with exceptionally high quality collateral.
Subpart B--Regulations Applicable to All Savings Associations
(Proposed)
Section 559.10 What Must a Savings Association and Its Subsidiary Do
To Maintain Separate Corporate Identities?
This section describes what a savings association and its
subsidiaries must do to establish that they have separate identities.
The purpose for these requirements is to reduce the potential for
customer confusion or for a court to hold the parent liable for the
subsidiary's conduct or obligations. The requirements are derived from
current Secs. 545.81(f), 563.37, and 571.21.
Section 559.11 What Notices Are Required To Establish or Acquire a New
Subsidiary or Engage in New Activities Through an Existing Subsidiary?
This section combines and streamlines the overlapping notice
requirements currently contained in Secs. 545.74(b)(2), 545.81(c), and
563.37(c).
Section 559.12 How May a Subsidiary of a Savings Association Issue
Securities?
This section replaces current Sec. 563.132 and reiterates its basic
requirement: a savings association must notify OTS before a subsidiary
issues securities. The section also incorporates requirements from
existing Sec. 545.82, requiring that securities issued by all
subsidiaries indicate that they are not covered by federal deposit
insurance and may not be called or accelerated in the event of the
savings association's insolvency.
Section 559.13 How May a Savings Association Exercise Its Salvage
Power in Connection With Its Service Corporation?
This section replaces the application procedure of current
Sec. 563.38 with a 30-day notice requirement. In its notice, an
institution must fully document its additional investment in a manner
that demonstrates how its action is consistent with safety and
soundness and document other salvage alternatives considered. The
agency may take objection to, or grant conditional approval of, a
notice to exercise salvage power to assist a troubled service
corporation.
B. Amendments to Proposed New Part 560--Lending and Investment
OTS is also proposing to add provisions dealing with subsidiary and
equity-related investments to proposed new part 560--Lending and
Investments.
Section 560.30 General Lending and Investment Powers for Federal
Savings Associations
In the interest of completeness, OTS proposes to add several
equity- and subsidiary-related investments to the lending and
investment powers chart contained in this regulation. The chart will
now include investments in small business investment corporations
chartered pursuant to section 301(d) of the Small Business Act, open-
end management investment companies, and service corporations.
Section 560.32 Pass-Through Investments
This new section will codify federal savings associations'
authority to invest in entities, such as limited partnerships and
mutual funds, that hold only assets, and engage only in activities,
permissible for federal savings associations. Unlike an operating
subsidiary, a thrift does not have effective operating control over
such investments. To allow thrifts flexibility while maintaining
effective OTS supervision of such investments, OTS proposes to
establish a safe harbor. Investments made in accordance with the safe
harbor standards will not require advance notice to OTS. Under the safe
harbor, a federal savings association may invest up to 15% of its
capital without prior OTS approval in:
(1) A limited partnership;
(2) An open-end management investment company (mutual fund);
(3) A closed-end investment trust; or
(4) An entity in which the federal savings association invests
primarily to use the services provided (e.g., data processing);
so long as the entity in which the investment is made:
(1) Is engaged solely in activities in which the federal savings
association itself may engage directly; and
(2) Would not be controlled by the savings association;
and the thrift:
(1) Has liability limited to the amount of its investment;
(2) Has adequate capacity within the relevant HOLA investment
category (e.g., 10% of assets for commercial loans);
(3) Is able to monitor internal managerial controls to ensure they
are equivalent to those the thrift would be required to have in place
if engaging in the activity directly; and
(4) Does not, after making the investment, have more than 50% of
its capital invested in pass-through investments.
A savings association must provide written notice to OTS before
making any pass-through investment that does not meet the foregoing
standards. OTS will review these notices and may object or impose
conditions for supervisory, legal, or safety and soundness reasons.
This structure will clarify the rules applicable to pass-through
investments, thereby enhancing savings association access to this
investment option and establishing uniform safety and soundness
constraints. This structure will ensure that the OTS is aware of, and
has opportunity to object, to any move by a thrift to place significant
amounts of its assets under the operating control of third parties.
OTS solicits comments on whether other structures, such as limited
liability companies, should be preapproved.
Section 560.33 De Minimis Investments
OTS and its predecessor have long recognized that a federal savings
association's incidental powers include the ability to make charitable
contributions that assist its community. In the past, thrifts have
sometimes requested permission to make (and book) de minimis equity
investments in community organizations in an amount
[[Page 29982]]
equal to what they could otherwise directly contribute. To further
thrifts' community development activities, OTS proposes to add a
section specifically confirming that a federal savings association may
make these types of de minimis investments. The proposed regulation
provides that the investments must be of a type that would be
permissible for a national bank under 12 CFR Part 24 and in the
aggregate may not exceed the greater of $100,000 or one-fourth of 1% of
a thrift's total capital.
C. Disposition of Existing Regulations
Part 545 Operations (Federal Savings Associations)
Section 545.74 Service Corporations
Paragraph (a) of Sec. 545.74 defines terms specific to the service
corporation section. The OTS is proposing to remove this paragraph. The
operative provisions of new part 559 will cover the matters now
addressed by the definitions.
Paragraph (b) begins by restating the broad statutory authority of
federal savings associations under section 5(c)(4)(B) of the HOLA to
invest in service corporations that are organized under the laws of the
state in which the association's home office is located. This authority
will be incorporated into the proposed lending/investment chart in part
560, with a cross-reference to the more extensive provisions contained
in proposed part 559.
Paragraphs (b)(1)-(5) set forth general notice, application,
examination, and activities provisos. The proposed subsidiaries chart
at Sec. 559.2(e)(2) incorporates the requirement in paragraph (b)(1)
that a service corporation's activities be either pre-approved by
regulation or specifically approved by application. The OTS proposes to
move the notice requirements contained in paragraph (b)(2) into new
Sec. 559.11. Paragraph (b)(3) requires weaker savings associations to
apply to OTS for permission to engage in any activities beyond what a
federal savings association may conduct directly. This requirement has
been incorporated into proposed Sec. 559.2(e)(2)(ii). The examination
requirement currently found in paragraph (b)(4) will be included in the
subsidiaries chart at Sec. 559.2(o)(2). The restriction on activities
where OTS has supervisory objections contained in paragraph (b)(5) has
been incorporated into the introductory text of Sec. 559.1.
Paragraph (c) of Sec. 545.74 first sets forth the OTS's general
rule that federal savings associations may invest in service
corporations that can engage in such activities reasonably related to
the activities of federal associations as the OTS may approve. The OTS
proposes to retain this general rule and move it to the new
subsidiaries chart at Sec. 559.2(e)(2). Paragraph (c) next explains how
to apply for approval to engage in such activities. OTS proposes to
incorporate this requirement into the chart at Sec. 559.2(e)(2)(iii).
The next sentence in paragraph (c) authorizes service corporations
of most savings associations to engage in the listed preapproved
activities upon satisfying a notice requirement. This requirement has
been moved to Sec. 559.2(e)(2)(i).
Finally, paragraph (c) lists the preapproved activities. The
proposal would replace this list with a revised, updated compilation of
new preapproved activities. For example, currently, a variety of
activities that a federal savings association itself may conduct are
scattered throughout the list as preapproved for service corporations.
Instead of individually listing these activities, the proposal simply
preapproves for service corporations all activities that a thrift may
conduct directly, other than taking deposits. The list would be
reorganized by grouping related activities and moving the list to
proposed Sec. 559.3, as discussed more fully in section IV.A. of this
preamble.
Paragraph (c)(4) contains safeguards that apply to securities
brokerage activities of service corporations. These safeguards will
remain in that paragraph, with one exception, while OTS considers
whether to incorporate them into new part 559, or modify the safeguards
and apply them to all securities sales programs taking place on thrift
premises by subsidiaries, affiliates, and broker dealers. OTS is
proposing to remove paragraph (c)(4)(ii)(F), which has barred savings
associations (not their service corporations) from contracting with
third parties for securities brokerage activities. This restriction
predates the 1994 Interagency Guidelines on Retail Sales of Nondeposit
Investment Products. The Guidelines now contain safeguards to ensure
that any contractual relationship with a third-party broker-dealer will
be conducted in a proper manner. Thus, paragraph (c)(4)(ii)(F) has
become unnecessary. Removing this restriction will provide thrifts with
greater flexibility in structuring operations involving the sale of
nondeposit investment products.
Paragraph (d) addresses the permissible aggregate amount of
investments in, or loans to, service corporations by a federal thrift.
The HOLA specifically authorizes thrifts to invest up to 3% of their
assets in the stock and obligations of service corporations (generally,
2% undesignated authority plus an additional 1% for community-
development). Since 1970, the regulations have allowed a federal thrift
to make additional loans to its service corporations if the thrift has
the authority under the HOLA to make the same loan to a third party.
This lending authority has been subject to limitations that changed
over time, but has always been separate and apart from the 3% of assets
limitation.
For example, the current regulatory provisions allow a federal
thrift to make ``conforming loans'' of up to 100% of its capital to any
service corporation in which the thrift has an ownership interest of
less than 10%, with no aggregate limit. A separate aggregate limit of
50% of capital applies to loans made to all other service corporations.
``Conforming loans'' is broadly defined at Sec. 545.74(a)(2) as any
type of loan a federal savings association may make except for
nonconforming real estate loans and unsecured construction loans. Thus,
if a thrift currently has only one wholly-owned service corporation, it
may, to the extent it has commercial loan authority available under the
statutory 10% of assets limit, make commercial loans to its service
corporation of up to 50% of its capital.
When these provisions were last substantively amended in 1985, the
100% of capital limit paralleled the then-existing LTOB limit. The
percentage limits in the regulation do not reflect the new lower LTOB
limit of 12 CFR 563.93, although paragraph (d) does state that these
loans are subject to any applicable LTOB requirements. The LTOB
regulation itself, however, states that it does not apply to loans made
to subsidiaries.
As the foregoing overview indicates, the rules governing service
corporation investment limits and conforming loans are needlessly
complex and confusing, and in some respects inconsistent. The OTS
proposes to substantially revise and simplify these rules and
incorporate them into new Sec. 559.4, as discussed more fully in
Section IV.A. of this preamble.
Paragraph (e) describes the circumstances under which a federal
savings association must dispose of its investment in a service
corporation. The OTS proposes to retain this paragraph in the new
subsidiaries chart as Sec. 559.2(q)(2).
[[Page 29983]]
Section 545.76 Investment in Open-End Management Investment Companies
Paragraph (a) reiterates the HOLA's statutory grant of authority to
federal savings associations to buy, sell or otherwise deal in
registered securities of any open-end management investment company
that restricts its portfolio to investments that federal savings
associations may buy, sell or otherwise deal in without limitation as
to percentage of assets.15 The OTS proposes to incorporate this
provision into the lending and investment chart in proposed
Sec. 560.30. An endnote to that chart will indicate that federal
thrifts may be able to invest limited amounts in a broader range of
pass-through investments under proposed new Sec. 560.32.
---------------------------------------------------------------------------
\15\ 12 U.S.C. 1464(c)(1)(Q).
---------------------------------------------------------------------------
Paragraph (b) provides that the maximum investment a federal thrift
may make in any one open-end management investment company is limited
to 5% of total assets. Paragraph (b) also applies the regulatory
limitations imposed on a federal thrift's investments in commercial
paper and corporate debt securities to the commercial paper and
corporate debt securities investments of open-end management investment
companies in which thrifts invest. The OTS proposes to remove paragraph
(b) because its subject matter will be covered by the pass-through
investment provisions of proposed new Sec. 560.32.
Section 545.80 Small Business Investment Corporations
Section 545.80 reiterates section 5(c)(4)(D) of the HOLA's grant of
statutory authority for federal savings associations to invest in small
business investment corporations pursuant to section 301(d) of the
Small Business Investment Company Act of 1958. The proposal moves this
section into the proposed lending and investment powers chart in
Sec. 560.30.
Section 545.81 Operating Subsidiaries
Paragraph (a) sets forth federal savings associations' authority to
establish or acquire operating subsidiaries subject to certain
requirements. The OTS proposes to incorporate this paragraph into the
introductory text of Sec. 559.2.
Paragraph (b) defines the term ``operating subsidiary.'' The
substance of this definition would be covered in the proposed
subsidiaries chart as Sec. 559.2 (c)(1) and (e)(1).
Paragraph (c) spells out the notice and application requirements
that a federal savings association must meet to acquire or establish an
operating subsidiary. Paragraph (c)(1) contains requirements for
federal savings associations that are eligible for ``expedited
treatment'' in the processing of applications as defined in Sec. 516.3.
Paragraph (c)(2) covers requirements for all other federal savings
associations. In general, institutions that qualify for expedited
treatment need only give 30 days notice to OTS before establishing an
operating subsidiary, whereas other institutions must file an
application and obtain advance approval. OTS proposes to apply the
notice procedure to all institutions. Because operating subsidiaries
can only engage in activities that are permissible for federal thrifts
themselves, requiring a formal application and advance approval seems
unduly burdensome. OTS can always object during the 30-day notice
period in the unlikely event that an operating subsidiary proposal
raises concerns.
Paragraph (c)(3) addresses the additional notice requirements of
section 18(m) of the FDIA, the regulations associated with section
18(m) and all applicable clearances under those requirements. The
notice requirements will be consolidated with similar requirements for
all subsidiaries and moved into the new notice Sec. 559.11.
Paragraph (d) details the conditions under which a federal savings
association may convert its service corporation to an operating
subsidiary. The OTS proposes to substantially simplify this paragraph
and incorporate the conditions in new Sec. 559.2(p).
Paragraph (e) indicates that all federal laws, regulations and
policies of the OTS covering the operations of federal thrifts apply to
the operations of operating subsidiaries. The paragraph also requires
consolidation of the parent association and its operating subsidiary
for application of statutory and regulatory requirements and
limitations, unless otherwise provided by statute, regulation or OTS
policy. OTS proposes to incorporate the substance of this paragraph
into the subsidiaries chart at Sec. 559.2(h)(1).
Paragraph (f) subjects operating subsidiaries and their parent
federal savings associations to the same separate corporate existence
requirements as apply to service corporations of savings associations
under 12 CFR 571.21 and 563.37. As discussed below, OTS proposes to
consolidate these overlapping sections into a new Sec. 559.10.
Paragraph (g) subjects each operating subsidiary to the same
examination and supervision authority as its parent federal savings
association. This requirement will be included in the subsidiaries
chart at Sec. 559.2(o)(1).
Paragraph (h) provides that OTS may limit, at any time, the
activities of an operating subsidiary for supervisory or legal reasons.
OTS proposes to place this provision in Sec. 559.1(a).
Paragraph (i) sets forth OTS's authority to impose conditions on an
operating subsidiary for supervisory, legal or safety and soundness
reasons. This authority has also been inherent in the review of the
establishment of, or commencement of new activities by, service
corporations, but has not been specifically set forth in regulation.
The OTS proposes to move this paragraph to Sec. 559.1(b), where it will
explicitly apply to all conditions contained in all approvals affecting
subsidiaries.
Paragraph (j) authorizes parent savings associations to own a
deposit-taking operating subsidiary under certain conditions. This
authority would be retained and included in the proposed subsidiaries
chart at Sec. 559.2(e)(1)(ii).
Paragraph (k) addresses changing from an operating subsidiary to a
service corporation. The OTS proposes to incorporate this provision
into the subsidiaries chart at Sec. 559.2(p), where the rules governing
changes from a service corporation to an operating subsidiary will also
be stated.
Section 545.82 Finance Subsidiaries
Section 545.82 authorizes federal savings associations to establish
subsidiaries solely for the purpose of issuing securities that the
thrift may issue directly. Thrifts were authorized to establish finance
subsidiaries before being authorized to establish operating
subsidiaries. Because operating subsidiaries may perform the same
activities as finance subsidiaries without as many restrictions, the
OTS proposes to delete this section as redundant and obsolete, except
for paragraphs (d)(2) and (d)(3). Paragraph (d)(2) of current
Sec. 545.82 prohibits a finance subsidiary from issuing or dealing in
the deposits or savings accounts of its parent federal savings
association and from representing in any way that securities issued by
it are insured by the Federal Deposit Insurance Corporation. Paragraph
(d)(3) prohibits a finance subsidiary from issuing any security that
would permit accelerated payment, maturity or redemption upon the
condition that its parent federal savings association was insolvent or
had been placed in receivership. The agency believes both of these
restrictions should apply to the issuance of securities by any
subsidiary of a federal savings association.
[[Page 29984]]
Therefore, it proposes to incorporate them into proposed Sec. 559.12,
which will replace current Sec. 563.132 and cover those issuances, as
discussed below.
Because the requirements for finance subsidiaries go beyond those
applicable to operating subsidiaries, OTS proposes to deem all existing
finance subsidiaries to be operating subsidiaries for all purposes.
Part 563--Operations
Section 563.37 Operation of Service Corporation, Liability of Savings
Association for Debt of Service Corporation
Paragraphs (a) and (b) of section 563.37 require savings
associations and their service corporations to maintain a separate
corporate existence and insulate the thrift from liability for debt of
its service corporation. The OTS proposes to combine these requirements
with those of 12 CFR 571.21, the policy statement regarding separate
corporate existence of a service corporation, and move them into a new
Sec. 559.10.
Paragraph (c), which sets forth notice requirements for all savings
association service corporations (not just service corporations of
federal thrifts), would be incorporated in the new notice section,
Sec. 559.11, where the notice requirements applicable to federal thrift
service corporations will also appear.
Section 563.38 Salvage Power of Savings Association To Assist Service
Corporation
Section 563.38 addresses a savings association's use of its salvage
power to assist a troubled service corporation. The salvage power
doctrine permits a thrift to exceed applicable investment limitations
where an infusion of additional capital is necessary to preserve the
existing investment.
Paragraph (a) prohibits a savings association from exercising its
salvage power to assist a troubled service corporation without prior
OTS approval. Paragraph (b) conditions such approval on the OTS
receiving an application demonstrating that the proposed action ``is
for the protection of the savings association's investment and is
consistent with safe, sound, and economical home financing.'' The
application must also address alternative solutions, including those
not involving financial assistance, to the service corporation's
financial problem, and contain other information as the OTS deems
necessary.
While it is important for the OTS to have advance knowledge of
proposed salvage investments in service corporations, the OTS proposes
to reduce burden by substituting a notice for the current application.
While the notice would still contain much of the current information,
the change would allow the savings association to make the salvage
investment if OTS had not objected to the notice or imposed conditions
within 30 days. The notice requirement will appear as new Sec. 559.13.
Section 563.41 Loans and Other Transactions With Affiliates and
Subsidiaries.
OTS proposes to modify the definition of ``subsidiary'' in this
regulation to mirror the statutory definition of section 23A of the
Federal Reserve Act, 12 U.S.C. 371c, rather than the OTS capital
regulation. This will make it clear that the scope of the subsidiaries
covered by the regulation is the same for thrifts as for banks.
Section 563.93 Lending Limitations
Similarly, the OTS proposes to amend the scope of its loans-to-one-
borrower regulation to better conform with the scope of the OCC's
lending limits regulation. This section will not apply to loans to a
thrift's operating subsidiaries, but will apply to loans to its service
corporations.
Section 563.132 Securities Issued Through Subsidiaries
This section requires savings associations to notify OTS when
issuing securities through a subsidiary. OTS proposes to remove
outdated provisions from this section and transfer the remaining notice
requirements to new Sec. 559.12.
Paragraph (a), which defines terms for this section, is being
deleted as those terms are no longer necessary. Paragraph (b), which
excludes certain securities in addressing the amount of securities
issued by a subsidiary, is being removed as obsolete. The proposed
regulation does not limit the amount of securities a subsidiary may
issue.
Paragraph (c) sets forth the notice and application requirements
that a parent savings association must satisfy prior to establishing a
finance subsidiary, transferring additional assets to an existing
finance subsidiary, or issuing securities through a subsidiary defined
in paragraph (a)(1)(ii) of the section. The OTS proposes to modify the
notice requirements of paragraph (c) by removing the references and
requirements pertaining to finance subsidiaries and by reducing the
application requirements to uniform notice requirements.
Part 567--Capital
Section 567.1 Definitions
OTS proposes to amend two definitions in its capital regulation.
First, Sec. 567.1(dd), which defines subsidiary, is being amended to
mirror the OCC's definition of a subsidiary in its risk-based capital
regulation, 12 CFR Part 3, Appendix A. This definition is more
consistent with GAAP, defining a subsidiary as a company where the
institution owns a majority of the stock. Currently, OTS employs a much
broader definition of subsidiary, which can sometimes result in higher
capital requirements. Proposed Sec. 567.1(dd) includes language from
the footnote currently located in Sec. 567.1(dd), which provides that
OTS reserves the right to review investments on a case-by-case basis to
determine whether the investment is more appropriately treated as a
subsidiary or as an equity investment.
Second, Sec. 567.1(l), which defines ``includable subsidiary,''
currently encompasses subsidiaries that ``directly or indirectly''
engage in any activity not permissible for a national bank. The
regulatory reference to ``indirect'' activities, which does not appear
in the statutory provision upon which the regulation is based,16
has been interpreted (in the Thrift Financial Report) as requiring a
savings association's entire investment in a subsidiary engaged
exclusively in activities permissible for national banks to be deducted
from capital if a lower-tier subsidiary engages in any activity
impermissible for a national bank. Deduction is required even when the
first-tier subsidiary's investment in the lower-tier subsidiary
constitutes a minute portion of its total assets. Eliminating the
regulatory reference to ``indirect'' activities will enable OTS to
revise the instruction in the Thrift Financial Report. Thereafter,
savings associations will only be required to deduct the actual amount
of their indirect investment in the lower-tier nonincludable
subsidiary.
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\16\ 12 U.S.C. 1464(t)(5)
---------------------------------------------------------------------------
Part 571--Statements of Policy
Section 571.21 Separate Corporate Existence of a Service Corporation
Paragraph (a) sets forth the attributes of corporate separateness
that should be maintained by a savings association and its service
corporation. Maintaining this separate corporate identity is important
to minimize the risks that a court, for equitable reasons, might pierce
the corporate veil of a service corporation and hold the parent savings
association
[[Page 29985]]
liable for the obligations or conduct of its service corporation.
Paragraph (b), in addressing operation of service corporations and
monitoring their compliance with paragraph (a), references
Sec. 563.37(a) and reiterates the potential for serious risk to the
savings association from failure to maintain corporate separateness.
The proposal would incorporate the substantive requirements of
Sec. 571.21 and Sec. 563.37 into new Sec. 559.10, which will apply to
all subsidiaries.
V.--Chart Showing the Proposed Disposition of Regulations
----------------------------------------------------------------------------------------------------------------
Original provision New provision Comment
----------------------------------------------------------------------------------------------------------------
545.74(a)........................ ...................................... Removed
545.74(b) introductory text...... 560.30................................ Incorporated into lending and
investment powers chart.
545.74(b)(1)..................... 559.2(e)(2) .....................................
545.74(b)(2)..................... 559.11 .....................................
545.74(b)(3)..................... 559.2(e)(2)(ii) .....................................
545.74(b)(4)..................... 559.2(o)(2) .....................................
545.74(b)(5)..................... 559.1(a) .....................................
545.74(c) introductory text...... 559.2(e)(2) .....................................
545.74(c)(1)-(7)................. 559.3 .....................................
545.74(d)........................ 559.4................................. Substantially revised.
545.74(e)........................ 559.2(q)(2) .....................................
545.76(a)........................ 560.30 .....................................
545.76(b)........................ ...................................... Removed.
545.80........................... 560.30 .....................................
545.81(a)........................ 559.2 .....................................
545.81(b)........................ 559.2(c)(1), (e)(1) .....................................
545.81(c)(1),(2)................. 559.2(a)(1) .....................................
545.81(c)(3)..................... 559.11 .....................................
545.81(d)........................ 559.2(p) .....................................
545.81(e)........................ 559.2(h)(1) .....................................
545.81(f)........................ 559.10 .....................................
545.81(g)........................ 559.2(o)(1) .....................................
545.81(h)........................ 559.1(a) .....................................
545.81(i)........................ 559.1(b).............................. Modified.
545.81(j)........................ 559.2(e)(1)(ii) .....................................
545.81(k)........................ 559.2(p) .....................................
545.82........................... ...................................... Removed.
563.37(a), (b)................... 559.10................................ Modified.
563.37(c)........................ 559.11 .....................................
563.38........................... 559.13................................ Modified.
563.41(b)(4)..................... ...................................... Modified.
563.93(a)........................ ...................................... Modified.
563.132(a),(b)................... ...................................... Removed.
563.132(c)....................... 559.12................................ Modified.
567.1(l)......................... ...................................... Modified.
567.1(dd)........................ ...................................... Modified.
571.21........................... 559.10................................ Modified.
----------------------------------------------------------------------------------------------------------------
VI. Request for Comment
The OTS requests comments on all aspects of this proposal.
VII. Paperwork Reduction Act
The reporting requirements contained in this proposed rule have
been submitted to the Office of Management and Budget for review in
accordance with the Paperwork Reduction Act of 1995. Comments on the
collection of information should be sent to the Office of Management
and Budget, Paperwork Reduction Project (1550), Washington, DC 20503,
with copies to the Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552.
Comments are invited on (i) whether the collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information shall have practical utility, (ii)
the accuracy of the estimate of the burden of the collection of
information, (iii) ways to enhance the quality of the information
collected, and (iv) ways to minimize the burden of the collection of
information on respondents, including the use of automated collection
techniques or other forms of information technology.
The reporting requirements in this proposed rule are currently
found in 12 CFR 545.74, 545.81, 563.38, and 563.132. These requirements
will be now be found in Secs. 559.2, 559.3, 559.11, 559.12, and 559.13.
These requirements are currently addressed in the following OMB
approved packages: Control Nos. 1550-0013; 1550-0077; and 1550-0065.
We are proposing to repeal Sec. 545.82 (finance subsidiaries) and
the related OMB package (Control No. 1550-0033).
The requirements in new Sec. 560.32 will be reflected in the OMB
approved package No. 1550-0078. The package has been amended to reflect
the following data for the requirements in new Sec. 560.32.
The information is needed by the OTS to assist in regulating
savings associations and their subsidiaries.
Estimated number of respondents: 1,460.
Estimated average burden per respondent: 8 hours.
Estimated annual frequency of responses: 1.
FR Doc. 96-13828 Subsidiaries and Equity Investments
Estimated total annual reporting burden: 11,680.
[[Page 29986]]
Under the Paperwork Reduction Act of 1995, no persons are required
to respond to a collection of information unless it displays a valid
OMB control number. The valid OMB control number assigned to the
collection of information in these proposed regulations will be
displayed in the table at 12 CFR 506.1(b).
VIII. Executive Order 12866
The Director of the OTS has determined that this proposed rule does
not constitute a ``significant regulatory action'' for the purposes of
Executive Order 12866.
IX. Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
OTS certifies that this proposed rule will not have a significant
economic impact on a substantial number of small entities. The proposal
reorganizes the regulation to make it easier for small savings
associations to locate applicable rules. It streamlines requirements
for all savings associations. It simplifies the applicable requirements
when savings associations create, invest in, or conduct new activities
through subsidiaries and clarifies the statutorily required notices for
such actions.
X. Unfunded Mandates Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L.
104-4 (Unfunded Mandates Act) requires that an agency prepare a
budgetary impact statement before promulgating a rule that includes a
federal mandate that may result in expenditure by state, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, Section 205 of the Unfunded Mandates Act also requires an
agency to identify and consider a reasonable number of regulatory
alternatives before promulgating a rule. As discussed in the preamble,
this proposed rule streamlines and reduces requirements on savings
associations. The OTS has therefore determined that the proposed rule
will not result in expenditures by state, local, or tribal governments
or by the private sector of $100 million or more. Accordingly, sections
202 and 205 do not require a budgetary impact statement or discussion
of regulatory alternatives to this proposal.
List of Subjects
12 CFR Part 545
Accounting, Consumer protection, Credit, Electronic funds
transfers, Investments, Manufactured homes, Mortgages, Reporting and
recordkeeping requirements, Savings associations.
12 CFR Part 559
Savings associations, Subsidiaries.
12 CFR Part 560
Consumer protection, Investments, Manufactured homes, Mortgages,
Reporting and recordkeeping requirements, Savings associations,
Securities.
12 CFR Part 563
Accounting, Advertising, Crime, Currency, Flood insurance,
Investments, Morgages, Reporting and recordkeeping requirements,
Savings associations, Securities, Surety bonds.
12 CFR Part 567
Capital, Savings associations.
12 CFR Part 571
Accounting, Conflict of interests, Investments, Reporting and
recordkeeping requirements, Savings associations.
Accordingly, and for the reasons set forth in the preamble, the
Office of Thrift Supervision proposes to amend chapter V, title 12,
Code of Federal Regulations, as set forth below.
PART 545--OPERATIONS
1. The authority citation for part 545 continues to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1828.
Sec. 545.74 [Amended]
2. Section 545.74 is amended by removing and reserving paragraphs
(a), (b), (d) and (e), by amending paragraph (c) by removing and
reserving the introductory text and paragraphs (c)(1) through (c)(3)
and (c)(5) through (c)(7), by removing and reserving paragraph
(c)(4)(ii)(F), and by amending the introductory text to paragraph
(c)(4)(i) by removing the words ``Execution of'' and adding in their
place ``A service corporation may execute''.
Secs. 545.76, 545.80 through 545.82 [Removed]
3. Sections 545.76, 545.80, 545.81, and 545.82 are removed.
4. Part 559 is added to read as follows:
PART 559--SUBSIDIARIES
Sec.
559.1 What does this part cover?
Subpart A--Regulations Applicable to Federal Savings Associations
559.2 What are the characteristics of, and what requirements apply
to, operating subsidiaries and service corporations of federal
savings associations?
559.3 What activities are preapproved for service corporations?
559.4 How much may a savings association invest in service
corporations?
Subpart B--Regulations Applicable to All Savings Associations
559.10 What must a savings association and its subsidiary do to
maintain separate corporate identities?
559.11 What notices are required to establish or acquire a new
subsidiary or engage in new activities through a subsidiary?
559.12 How may a subsidiary of a savings association issue
securities?
559.13 How may a savings association exercise its salvage power in
connection with its service corporation?
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1828.
Sec. 559.1 What does this part cover?
(a) Subpart A of this part 559 contains requirements applicable to
operating subsidiaries and service corporations of federal savings
associations. Subpart B of this part 559 applies to subsidiaries of all
savings associations. OTS is issuing this part 559 pursuant to its
general rulemaking and supervisory authority under the Home Owners'
Loan Act, 12 U.S.C. 1462 et seq., and its specific authority under
section 18(m) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(m).
OTS may at any time limit a savings association's investment in a
subsidiary or service corporation, or may limit or refuse to permit any
activities of a subsidiary or service corporation for supervisory,
legal, or safety and soundness reasons.
(b) Notices under this part are deemed to be applications for
purposes of statutory and regulatory references to ``applications.''
Any conditions that OTS imposes for supervisory, legal, or safety and
soundness reasons in approving any application shall be enforceable as
a condition imposed in writing by the OTS in connection with the
granting of a request by a savings association within the meaning of 12
U.S.C. 1818(b) or 1818(i).
Subpart A--Regulations Applicable to Federal Savings Associations
Sec. 559.2 What are the characteristics of, and what requirements
apply to, operating subsidiaries and service corporations of federal
savings associations?
A federal savings association (``you'') that meets the requirements
of this section, as detailed in the following chart, may establish,
acquire, or acquire
[[Page 29987]]
in an interest in an operating subsidiary or a service corporation. For
ease of reference, this section cross-references other regulations in
this chapter affecting subsidiaries. You should refer to those
regulations for the details of how they apply to an operating
subsidiary or a service corporation. The chart follows:
------------------------------------------------------------------------
Operating
subsidiaries Service corporations
------------------------------------------------------------------------
(a) How may a savings (1) To establish an (2) To establish a
association establish an operating service
operating subsidiary or a subsidiary, you corporation, you
service corporation? must file a notice must file a notice
satisfying Sec. satisfying Sec.
559.11 559.11. Depending
upon your condition
and the activities
in which the
service corporation
will engage, you
may have to submit
an application
under Sec.
559.2(e)(2).
(b) Who may own stock? (1) Anyone may own (2) Only savings
stock in an associations with
operating home offices in the
subsidiary state where you
have your home
office may own
stock in any
service corporation
in which you
invest.
(c) What are the ownership (1) You must hold at (2) You are not
requirements? least 50% of the required to hold a
voting stock of the particular amount
operating of stock and need
subsidiary. No one not have control of
else may exercise the service
effective operating corporation.
control
(d) Where may the subsidiary (1) There are no (2) A service
be incorporated? geographic corporation must be
restrictions on incorporated in the
where an operating state where your
subsidiary may be home office is
incorporated. located.
(e) What activities are (1)(i) After you (2) (i) If you are
permissible? have notified OTS eligible for
in accordance with expedited treatment
Sec. 559.11, an under Sec.
operating 516.3(a) of this
subsidiary may chapter, and notify
engage in any OTS as required by
activity that you Sec. 559.11, your
may conduct service corporation
directly. may engage in
activities listed
in Sec. 559.3.
(ii) You may hold (ii) If you are
another insured subject to standard
depository treatment under
institution as an Sec. 516.3(b) of
operating this chapter, you
subsidiary. must apply and
receive OTS
approval for your
service corporation
to engage in any
activities except
those authorized by
Sec. 559.3(a).
(iii) Any finance (iii) A service
subsidiary that corporation may
existed on [insert also engage in any
effective date of activity reasonably
final rule] shall related to the
be deemed an activities of
operating financial
subsidiary. institutions, but
not preapproved
under Sec. 559.3,
after applying to
OTS in accordance
with Sec. 516.1 of
this chapter and
receiving OTS's
prior written
approval.
(f) May the subsidiary (1)(i) An operating (2) A service
invest in other entities? subsidiary may corporation may
itself hold an invest in other
operating entities, including
subsidiary. All of corporations,
the requirements of partnerships, and
this part 559 apply other joint
equally to such a ventures. All of
lower tier the requirements of
operating this part apply
subsidiary. In equally to such
applying the entities except for
regulations in this paragraphs (b)(2),
part, operating (d)(2), and (g)(2)
subsidiaries should of this section.
substitute
``operating
subsidiary''
wherever this part
refers to ``you''
or ``savings
association.''
(ii) An operating
subsidiary may
invest in a service
corporation. Such a
service corporation
is subject to all
of the requirements
of this part.
(g) Are there any limits on (1) There are no (2) You may invest
how much a savings limits on the up to the amounts
association may invest? amount you may set forth in Sec.
invest in your 559.4 in service
operating corporations.
subsidiaries,
either separately
or in the
aggregate..
(h) Do federal statutes and (1) Unless otherwise (2) (i) If the
regulations that apply to specifically federal statute or
the savings association provided by regulation
also apply to its statute, specifically refers
subsidiaries? regulation, or OTS to ``service
policy, all federal corporation,'' it
statutes and applies to all
regulations apply service
to operating corporations,
subsidiaries in the regardless of
same manner as they whether you control
apply to you. You the service
and your operating corporation or
subsidiary are whether it would be
generally a subsidiary under
consolidated and GAAP.
treated as a unit
for statutory and
regulatory purposes.
(ii) If the federal
statute or
regulation refers
to ``subsidiary,''
it applies only to
service
corporations that
you control.
(i) Do the investment limits (1) Your assets and (2) Your service
that apply to federal those of your corporation's
savings associations (HOLA operating assets are not
section 5(c) and part 560 subsidiary are subject to the same
of this chapter) apply to aggregated when investment
subsidiaries? calculating limitations that
investment apply to you.
limitations.
(j) How does the capital (1) Your assets and (2) The capital
regulation (part 567 of those of your treatment of a
this chapter) apply? operating service corporation
subsidiary are depends upon
consolidated for whether it is an
all capital includable
purposes. subsidiary. That
determination is
based upon factors
set forth in part
567 of this
chapter, including
your percentage
ownership of the
service corporation
and the activities
in which the
service corporation
engages.
[[Page 29988]]
(k) How does the loans-to- (1) The LTOB (2) The LTOB
one-borrower (LTOB) regulation does not regulation applies
regulation (Sec. 563.93 of apply to loans from to loans from you
this chapter) apply? you to your to your service
operating corporation, but
subsidiary or loans does not apply to
from your operating loans from your
subsidiary to you. service corporation
Other loans made by to you. Other loans
your operating made by your
subsidiary are service corporation
aggregated with are aggregated with
your loans for LTOB your loans for LTOB
purposes. purposes.
(l) How does transactions (1) Section 563.41 (2) Section 563.41
with affiliates (TWA) apply of this chapter of this chapter
to subsidiaries? explains how TWA explains how TWA
applies to applies to
subsidiaries. subsidiaries.
(m) How does the Qualified (1) Under 12 U.S.C. (2) Under 12 U.S.C.
Thrift Lender (QTL) test 1467a(m)(5), you 1467a(m)(5), you
apply to subsidiaries? may determine may determine
whether you wish to whether you wish to
consolidate the consolidate the
assets of a assets of a
particular particular
subsidiary for subsidiary for
purposes of purposes of
calculating your calculating your
qualified thrift qualified thrift
investments. investments.
Section 563.51 of Section 563.51 of
this chapter this chapter
contains the contains the
calculations that calculations that
follow from this follow from this
determination. determination.
(n) Does state law apply? (1) State law (2) State law
applies to applies to service
operating corporations
subsidiaries only regardless of
to the extent it whether it applies
applies to you. to you.
(o) Is the subsidiary (1) An operating (2) A service
subject to examination by subsidiary is corporation must
OTS? subject to agree in writing to
examination by OTS. permit and to pay
the cost of such
examinations as OTS
deems necessary.
(p) What must be done to (1) Before (2) Before
redesignate an operating redesignating an redesignating a
subsidiary as a service operating service corporation
corporation or a service subsidiary as a as an operating
corporation as an operating service subsidiary, you
subsidiary. corporation, you should consult with
should consult with the OTS Regional
the OTS Regional Director for the
Director for the Region in which
Region in which your home office is
your home office is located. You must
located. You must also maintain
maintain adequate adequate internal
internal records, records, available
available for for examination by
examination by OTS, OTS, demonstrating
demonstrating that that the
the redesignated redesignated
subsidiary meets subsidiary meets
all of the all of the
applicable applicable
requirements of requirements of
this part and that this part and that
your board of your board of
directors has directors has
approved the approved the
redesignation. redesignation.
(q) What happens if the (1) If an operating (2) If a service
subsidiary fails to comply subsidiary fails to corporation, or any
with the requirements of continue to qualify entity in which the
this part. as an operating service corporation
subsidiary for any invests pursuant to
reason, you must paragraph (f)(2) of
notify OTS. Unless this section, fails
otherwise advised to meet any of the
by OTS, if the requirements of
subsidiary cannot this section, you
comply within 90 must notify OTS.
days with all of Unless otherwise
the requirements advised by OTS, if
for either an the subsidiary
operating cannot comply
subsidiary or a within 90 days with
service corporation all of the
under this section, requirements for
you must promptly either an operating
dispose of your subsidiary or a
investment in the service corporation
subsidiary. under this section,
you must promptly
dispose of your
investment in the
subsidiary.
------------------------------------------------------------------------
Sec. 559.3 What activities are preapproved for service corporations?
To the extent permitted by Sec. 559.2(e)(2), a service corporation
may engage in the following activities:
(a) Any activity that all federal savings associations may conduct
directly, except taking deposits.
(b) Business and professional services. The following services are
preapproved for service corporations only when they are limited to
financial documents or financial clients or are generally finance-
related:
(1) Accounting or internal audit;
(2) Advertising, marketing research and other marketing;
(3) Clerical;
(4) Courier;
(5) Data processing;
(6) Data storage facilities operation and related services;
(7) Office supplies, furniture, and equipment purchasing and
distribution;
(8) Personnel benefit program development or administration;
(9) Relocation of personnel;
(10) Remote service unit operation, leasing, ownership or
establishment;
(11) Research studies and surveys; and
(12) Software development and systems integration.
(c) Credit related activities:
(1) Abstracting;
(2) Appraising;
(3) Collection agency;
(4) Credit analysis;
(5) Check or credit card guaranty and verification;
(6) Escrow agent or trustee (under deeds of trust, including
executing and deliverance of conveyances, reconveyances and transfers
of title);
(7) Leasing; and
(8) Loan inspection.
(d) Consumer services:
(1) Financial advisory or consulting;
(2) Foreign currency exchange;
(3) Home ownership counseling;
(4) Income tax return preparation;
(5) Postal services;
(6) Stored value instrument sales; and
(7) Welfare benefit distribution.
(e) Real estate related services:
(1) Acquiring real estate for prompt development or subdivision,
for construction of improvements, for resale or leasing to others for
such construction, or for use as manufactured home sites, in accordance
with a prudent program of property development;
(2) Acquiring improved real estate or manufactured homes to be held
for rental or resale, for remodeling, renovating, or demolishing and
rebuilding for sale or rental, or to be used for offices and related
facilities of a stockholder of the service corporation;
(3) Maintaining and managing real estate; and
(4) Real estate brokerage for property owned by an association that
owns capital stock of the service corporation, the service corporation,
or a joint venture in which the service corporation participates.
(f) Securities brokerage, insurance and related services:
(1) Nondeposit investment product brokerage. Execution of
transactions in securities or other nondeposit investment products on
an agency or riskless principal basis solely upon the order of and for
the account of customers, provided that the service
[[Page 29989]]
corporation complies with the provisions of Sec. 545.74(c)(4) of this
chapter;
(2) Investment advice, provided that the service corporation
complies with the provisions of Sec. 545.74(c)(4) of this chapter;
(3) Insurance brokerage or agency for liability, casualty,
automobile, life, health, accident or title insurance;
(4) Liquidity management;
(5) Issuing notes, bonds, debentures or other obligations or
securities; and
(6) Purchase or sale of coins issued by the U.S. Treasury.
(g) Investments:
(1) Tax-exempt bonds used to finance residential real property for
family units;
(2) Tax-exempt obligations of public housing agencies used to
finance housing projects with rental assistance subsidies;
(3) Small business investment companies licensed by the U.S. Small
Business Administration to invest in small businesses engaged
exclusively in the activities listed in paragraphs (a) through (i) of
this section; and
(4) Investing in savings accounts of a stockholder thrift.
(h) Community development and charitable activities:
(1) Investments in governmentally insured, guaranteed, subsidized
or otherwise sponsored programs for housing, small farms, or businesses
that are local in character;
(2) Investments that meet the community development needs of, and
primarily benefit, low- and moderate-income communities;
(3) Investments in low-income housing tax credit projects and
entities authorized by statute (e.g., Community Development Financial
Institutions) to promote community, inner city, and community
development purposes; and
(4) Establishing a corporation that is recognized by the Internal
Revenue Service as organized for charitable purposes under Section
501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) and making
a reasonable contribution to capitalize it, provided that the
corporation engages exclusively in activities designed to promote the
well-being of communities in which the shareholders of the service
corporation operate.
(i) Activities reasonably incident to those listed in paragraphs
(a) through (h) of this section for service corporations engaged in
those activities.
Sec. 559.4 How much may a savings association invest in service
corporations?
(a) A federal savings association (``you'') may invest in the
capital stock, obligations, and other securities of a service
corporation. Your aggregate investment in all such service corporations
may not exceed 3% of your assets. If you have an aggregate outstanding
investment in excess of 2% of your assets, that excess investment must
serve primarily community, inner city, or community development
purposes. You must designate the investments serving those purposes,
which include:
(1) Investments in governmentally insured, guaranteed, subsidized
or otherwise sponsored programs for housing, small farms, or businesses
that are local in character;
(2) Investments for the preservation or revitalization of either
urban or rural communities;
(3) Investments designed to meet the community development needs
of, and primarily benefit, low- and moderate-income communities; or
(4) Other community, inner city, or community development-related
investments approved by OTS.
(b) Except as provided in paragraph (c) of this section, your
aggregate investment in service corporations includes all loans (except
accounts payable incurred in the ordinary course of business and paid
within 60 days) and all guarantees or take out commitments of such
loans to a service corporation and to any entity in which the service
corporation invests, whether or not you hold stock in that entity.
(c) In addition to the amounts you may invest under paragraph (a)
of this section, and to the extent you have authority under section
5(c) of the HOLA and part 560 of this chapter, you may make loans to
any service corporation in which you hold stock. Such loans are subject
to the loans-to-one-borrower regulation, Sec. 563.93 of this chapter.
For purposes of the investment limits of section 5(c) of the HOLA and
part 560 of this chapter, loans under this paragraph (c) will be
aggregated with any other loans of that type you make.
Subpart B--Regulations Applicable to All Savings Associations
Sec. 559.10 What must a savings association and its subsidiary do to
maintain separate corporate identities?
(a) Each savings association and subsidiary thereof must be
operated in a manner that demonstrates to the public the separate
corporate existence of the savings association and subsidiary. Each
must operate so that:
(1) Their respective business transactions, accounts, and records
are not intermingled;
(2) Each observes the formalities of their separate corporate
procedures;
(3) Each is adequately financed as a separate unit in the light of
normal obligations reasonably foreseeable in a business of its size and
character;
(4) Each is held out to the public as a separate enterprise; and
(5) Unless the parent savings association has guaranteed a loan by
the subsidiary, all borrowings by the subsidiary indicate that the
parent is not liable.
(b) OTS regulations that apply both to savings associations and
subsidiaries shall not be construed as requiring a savings association
and its subsidiaries to operate as a single entity.
Sec. 559.11 What notices are required to establish or acquire a new
subsidiary or engage in new activities through an existing subsidiary?
When required by section 18(m) of the Federal Deposit Insurance
Act, a savings association (``you'') must file a notice (``Notice'') in
accordance with Sec. 516.1(c) of this chapter at least 30 days before
establishing or acquiring a subsidiary or engaging in new activities in
a subsidiary. The Notice must contain all of the information the FDIC
requires pursuant to 12 CFR 303.13. Providing OTS with a copy of the
notice you file with the FDIC will satisfy this requirement. If OTS
notifies you within 30 days that the Notice presents supervisory
concerns, or raises significant issues of law or policy, you must apply
for and receive OTS's prior written approval in accordance with
Sec. 516.1(c) of this chapter before establishing or acquiring the
subsidiary or engaging in new activities in the subsidiary.
Sec. 559.12 How may a subsidiary of a savings association issue
securities?
(a) A subsidiary may issue, either directly or through a third
party intermediary, any securities that its parent savings association
(``you'') are authorized to issue (or if you are a mutual savings
association, would be authorized to issue if you converted to the stock
form). The subsidiary must not state or imply that the securities it
issues are covered by federal deposit insurance. A subsidiary may not
issue any security the payment, maturity, or redemption of which may be
accelerated upon the condition that you are insolvent or have been
placed into receivership.
(b) You must file a notice with OTS in accordance with Sec. 516.1
of this chapter at least 30 days before issuing any securities through
an existing subsidiary or in conjunction with establishing or acquiring
a new subsidiary. If OTS notifies you within
[[Page 29990]]
30 days that the notice presents supervisory concerns or raises
significant issues of law or policy, you must receive OTS's prior
written approval before issuing securities through your subsidiary. The
notice must contain:
(1) The amount of your assets or liabilities (including any
guarantees you make with respect to the securities issuance) that you
will transfer or make available to the subsidiary; the percentage that
such amount represents of the current book value of your assets on an
unconsolidated basis; and the current book value of all such assets of
the subsidiary;
(2) The terms of any guarantee(s) to be issued by you or any third
party;
(3) A description of the securities the subsidiary will issue;
(4) An estimate of the net proceeds from the issuance of securities
(or the pro rata portion of the net proceeds from securities issued
through a jointly owned subsidiary); the anticipated amount of gross
proceeds of the securities issuance; and the current market value of
assets collateralizing the securities issuance (any assets of the
subsidiary, including any guarantees of its securities issuance you
have made);
(5) The anticipated interest or dividend rates and yields, or the
range thereof, and the frequency of payments on the subsidiary's
securities;
(6) The minimum denomination of the subsidiary's securities;
(7) Where the subsidiary intends to market the securities; and
(8) A statement that within 10 days after the issuance of any
securities through a subsidiary, you will notify the OTS in writing
that you have issued the securities and provide a copy of any
prospectus, offering circular, or similar document concerning such
issuance.
(c) Sales of the subsidiary's securities to retail customers must
comply with Sec. 545.74(c)(4) of this chapter.
Sec. 559.13 How may a savings association exercise its salvage power
in connection with its service corporation?
(a) In accordance with this section, a savings association
(``you'') may exercise your salvage power to make a contribution or a
loan (including a guarantee of a loan made by any other person) to your
service corporation (``salvage investment'') that exceeds the maximum
amount otherwise permitted under law or regulation. You must notify OTS
at least 30 days before making a salvage investment in a service
corporation. This notice must demonstrate that:
(1) The salvage investment protects your interest in the service
corporation;
(2) The salvage investment is consistent with safety and soundness;
and
(3) You considered alternatives to the salvage investment and
determined that such alternatives would not adequately satisfy
paragraphs (a)(1) and (a)(2).
(b) If OTS notifies you within 30 days that the Notice presents
supervisory concerns, or raises significant issues of law or policy,
you must apply for and receive OTS's prior written approval in
accordance with Sec. 516.1(c) of this chapter before making a salvage
investment in a service corporation.
PART 560--LENDING AND INVESTMENT
5. Part 560 as proposed to be added at 61 FR 1177 is amended as
follows:
a. The authority citation for part 560 continues to read as
follows:
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1828, 1701j-3,
3803, 3806; 42 U.S.C. 4106.
b. Section 560.30 is revised to read as follows:
Sec. 560.30 General lending and investment powers of federal savings
associations.
Pursuant to section 5(c) of the Home Owners Loan Act (HOLA), 12
U.S.C. 1464(c), a federal savings association may make, invest in,
purchase, sell, participate in, or otherwise deal in (including
brokerage or warehousing) all loans and investments allowed under
section 5(c) of the HOLA including, without limitation, the following
loans, extensions of credit, and investments, subject to the
limitations indicated and any such terms, conditions, or limitations as
may be prescribed from time to time by the Office by policy directive,
order, or regulation:
Lending and Investment Powers Chart
----------------------------------------------------------------------------------------------------------------
Statutory percentage of assets limitations (endnotes
Category HOLA authorization contain applicable regulatory limitations)
----------------------------------------------------------------------------------------------------------------
Commercial loans................ 5(c)(2)(A) 10% of total assets.
Commercial paper and corporate 5(c)(2)(D) Up to 30% of total assets.\1\ \2\
debt securities.
Community development........... 5(c)(3)(B) 5% of total assets.
Community development direct 5(c)(3)(B) 2% of total assets.\3\
investments.
Consumer loans.................. 5(c)(2)(D) Up to 35% of total assets.\1\ \4\
Credit cards.................... 5(b)(4) None.\5\
Education loans................. 5(c)(3)(A) 5% of total assets.
Finance leasing................. 5(c)(1)(B) Based on collateral type for property financed.\6\
5(c)(2)(A)
5(c)(2)(D)
Foreign assistance investments.. 5(c)(4)(C) 1% of total assets.\7\
General leasing................. 5(c)(2)(C) 10% of assets.\6\
Home improvement loans.......... 5(c)(1)(J) None.\5\
Home (residential) loans \8\.... 5(c)(1)(B) None.\5\ \9\
Letters of credit............... 5(c)(2)(A) Included in aggregate 10% of assets commercial lending
limitation.\10\
Loans secured by accounts....... 5(c)(1)(A) None.\5\ \11\
Loans to financial institutions, 5(c)(1)(L) None.\5\ \12\
brokers, and dealers.
Manufactured home loans......... 5(c)(1)(J) None.\5\ \13\
Nonresidential real property 5(c)(2)(B) 400% of total capital.\14\
loans.
Open-end management investment 5(c)(1)(Q) None.\5\
companies a.
Service corporations............ 5(c)(4)(B) 3% of total assets, as long as any amount in excess of
2% of total assets furthers community, inner city, or
community development purposes.b
Small business investment 5(c)(4)(D) 1% of total assets.
companies c.
[[Page 29991]]
State and local government 5(c)(1)(H) None.\5\ \15\
obligations.
State housing corporations...... 5(c)(1)(P) None.\5\ \16\
Transaction account loans, 5(c)(1)(A) None.\5\ \17\
including overdrafts.
----------------------------------------------------------------------------------------------------------------
Notes:
\1\ For purposes of determining a Federal savings association's percentage assets limitation, investment in
commercial paper and corporate debt securities must be aggregated with the Federal savings association's
investment in consumer loans.
\2\ A Federal savings association may invest in commercial paper and corporate debt securities, which includes
corporate debt securities convertible into stock, subject to the provisions of Sec. 560.40.
\3\ This 2% of assets limitation is a sublimit within the overall 5% of assets limitation on community
development loans and investments.
\4\ Amounts in excess of 30% of assets, in aggregate, may be invested only in loans made by the association
directly to the original obligor and for which no finder's or referral fees have been paid. A Federal savings
association may include loans to dealers in consumer goods to finance inventory and floor planning in the
total investment made under this section.
\5\ While there is no statutory limit on certain categories of loans and investments, including credit card
loans, home improvement loans, and deposit account loans, the OTS may establish an individual limit on such
loans or investments if the association's concentration in such loans or investments presents a safety and
soundness concern.
\6\ A Federal savings association may engage in leasing activities subject to the provisions of Sec. 560.41.
\7\ This 1% of assets limitation applies to the aggregate outstanding investments made under the Foreign
Assistance Act and in the capital of the Inter-American Savings and Loan Bank. Such investments may be made
subject to the provisions of Sec. 560.43.
\8\ A home (or residential) loan includes loans secured by on one-to-four family dwellings, multi-family
residential property and loans secured by a unit or units of a condominium or housing cooperative.
\9\ A Federal savings association may make home loans subject to the provisions of Sec. 560.34.
\10\ A Federal savings association may issue letters of credit subject to the provisions of Sec. 560.120.
\11\ Loans secured by savings accounts and other time deposits may be made without limitation, provided the
Federal savings association obtains a lien on, or a pledge of, such accounts. Such loans may not exceed the
withdrawable amount of the account.
\12\ A Federal savings association may only invest in loans secured by obligations of, or by obligations fully
guaranteed as to principal and interest by, the United States or any of its agencies or instrumentalities
where the borrower is a financial institution insured by the Federal Deposit Insurance Corporation or is a
broker or dealer registered with the Securities and Exchange Commission and the market value of the securities
for each loan at least equals the amount of the loan at the time it is made.
\13\ If the wheels and axles of the manufactured home have been removed and it is permanently affixed to a
foundation, a loan secured by a combination of a manufactured home and developed residential lot on which it
sits may be treated as a home loan.
\14\ Without regard to any limitations of this part, a Federal savings association may make or invest in the
fully insured or guaranteed portion of nonresidential real estate loans insured or guaranteed by the Economic
Development Administration, the Farmers Home Administration, or the Small Business Administration.
Unguaranteed portions of guaranteed loans must be aggregated with uninsured loans when determining an
association's compliance with the 400% of capital limitation for other real estate loans.
a This authority is limited to investments in open-end management investment companies that are registered with
the Securities and Exchange Commission under the Investment Company Act of 1940. The portfolio of the
investment company must be restricted by the company's investment policy (changeable only if authorized by
shareholder vote) solely to investments that a Federal savings association may, without limitation as to
percentage of assets, invest in, sell, redeem, hold, or otherwise deal in. Separate and apart from this
authority, a Federal savings association may make pass-through investments to the extent authorized by Sec.
560.32.
b A Federal savings association may invest in service corporations subject to the provisions of part 559 of this
chapter.
c A Federal savings association may only invest in small business investment companies formed pursuant to
section 301(d) of the Small Business Investment Act of 1958.
\15\ This category includes obligations issued by any state, territory, or possession of the United States or
political subdivision thereof (including any agency, corporation, or instrumentality of a state or political
subdivision), subject to Sec. 560.42.
\16\ A Federal savings association may invest in state housing corporations subject to the provisions of Sec.
560.121.
\17\ Payments on accounts in excess of the account balance (overdrafts) on commercial deposit or transaction
accounts shall be considered commercial loans for purposes of determining the association's percentage of
assets limitation.
C. Sections 560.32 and 560.33 are added to read as follows:
Sec. 560.32 Pass-Through Investments
(a) A federal savings association (``you'') may make pass-through
investments. A pass-through investment is one where you invest in an
entity (``company'') that engages only in activities that you may
conduct directly. You must comply with all the statutes and regulations
that would apply if you were engaging in the activity directly. For
example, your proportionate share of the company's assets will be
aggregated with the assets you hold directly in calculating investment
limits (e.g., 10% of assets for commercial loans).
(b) You may make a pass-through investment without prior notice to
OTS if all of the following conditions are met:
(1) You do not invest more than 15% of your capital in one company;
(2) You have not invested more than 50% of your total capital in
pass-through investments;
(3) Your investment would not give you direct or indirect control
of the company;
(4) Your liability is limited to the amount of your investment;
(5) The company falls into one of the following categories:
(i) A limited partnership;
(ii) An open-end mutual fund;
(iii) A closed-end investment trust; or
(iv) An entity in which you are investing primarily to use the
company's services (e.g., data processing).
(c) If you want to make other pass-through investments, you must
provide OTS with 30 days' advance notice. If within that 30-day period
OTS notifies you that an investment presents supervisory, legal, or
safety and soundness concerns, you must file an application with OTS in
accordance with Sec. 516.1 of this chapter and may not make the
investment without first receiving OTS's prior written approval.
Notices under this section are deemed to be applications for purposes
of statutory and regulatory references to ``applications.'' Any
conditions that OTS imposes for supervisory, legal, or safety and
soundness reasons on any pass-through investment shall be enforceable
as a condition imposed in writing by the OTS in connection with the
granting of a request by a savings association within the meaning of 12
U.S.C. 1818(b) or 1818(i).
[[Page 29992]]
Sec. 560.33 De minimis investments.
A federal savings association may invest in the aggregate up to the
greater of one-fourth of 1% of its capital or $100,000, in community
development investments of the type permitted for a national bank under
12 CFR Part 24.
PART 563--OPERATIONS
6. The authority citation for part 563 continues to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468,
1817, 1828, 3806; 42 U.S.C. 4106.
Secs. 563.37, 563.38, 563.132 [Removed]
7. Sections 563.37, 563.38, and 563.132 are removed.
8. Section 563.41 is amended by revising paragraph (b)(4) to read
as follows:
Sec. 563.41 Loans and other transactions with affiliates and
subsidiaries.
* * * * *
(b) * * *
(4) The term subsidiary with respect to a specified savings
association means a company that is controlled by such specified
savings association;
* * * * *
9. Section 563.93 is amended by revising paragraph (a) to read as
follows:
Sec. 563.93 Lending limitations.
(a) Scope. This section applies to all loans and extensions of
credit to third parties made by a savings association and its
subsidiaries or service corporations. This section does not apply to
loans made by a savings association to operating subsidiaries or
affiliates of the savings association. The term operating subsidiary
has the same meaning indicated in Sec. 559.2 of this chapter. The terms
subsidiary and affiliate have the same meanings as those terms are
defined in Sec. 563.41.
* * * * *
PART 567--CAPITAL
10. The authority citation for part 567 continues to read as
follows:
Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1828
(note).
11. Section 567.1 is amended by removing in paragraph (l)(1) the
phrase ``(either directly or through ownership of a subsidiary)'', and
by revising paragraph (dd) to read as follows:
Sec. 567.1 Definitions.
* * * * *
(dd) Subsidiary. The term subsidiary means any corporation,
partnership, business trust, joint venture, association or similar
organization in which a savings association directly or indirectly
holds more than a 50% ownership interest.1 This definition does
not include ownership interests that were taken in satisfaction of
debts previously contracted, provided that the reporting association
has not held the interest for more than five years or a longer period
approved by the OTS.
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\1\ The Office reserves the right to review a savings
association's investment in a subsidiary on a case-by-case basis. If
the Office determines that such investment is more appropriately
treated as an equity security or an ownership interest in a
subsidiary it will make such determination regardless of the
percentage of ownership held by the savings association.
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* * * * *
PART 571--STATEMENTS OF POLICY
12. The authority citation for part 571 continues to read as
follows:
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464.
Sec. 571.21 [Removed]
13. Section 571.21 is removed.
Dated: May 28, 1996.
By the Office of Thrift Supervision.
Jonathan L. Fiechter,
Acting Director.
[FR Doc. 96-13828 Filed 6-12-96; 8:45 am]
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