Forest Service
Grain Inspection, Packers and Stockyards Administration
National Foundation on the Arts and the Humanities
Inspector General Office, Health and Human Services Department
International Trade Administration
National Oceanic and Atmospheric Administration
Presidential Documents
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Children and Families Administration
Food and Drug Administration
Inspector General Office, Health and Human Services Department
National Institutes of Health
Public Health Service
Coast Guard
Transportation Security Administration
Fish and Wildlife Service
Indian Affairs Bureau
Land Management Bureau
Reclamation Bureau
United States Sentencing Commission
Committee for the Implementation of Textile Agreements
Federal Aviation Administration
Federal Motor Carrier Safety Administration
National Highway Traffic Safety Administration
Surface Transportation Board
Comptroller of the Currency
Thrift Supervision Office
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.
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Board of Governors of the Federal Reserve System.
Final rule; technical amendment.
The Board of Governors is amending appendix A of Regulation CC to delete the reference to the Little Rock check processing office of the Federal Reserve Bank of St. Louis and reassign the Federal Reserve routing symbols currently listed under that office to the St. Louis Reserve Bank's Memphis office and delete the reference to the Milwaukee check processing office of the Federal Reserve Bank of Chicago and reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal Reserve Bank of Chicago. These amendments reflect the restructuring of check processing operations within the Federal Reserve System.
The amendment to Appendix A under the Eighth Federal Reserve District (Federal Reserve Bank of St. Louis) is effective on July 24, 2004. The amendment to Appendix A under the Seventh Federal Reserve District (Federal Reserve Bank of Chicago) is effective on August 7, 2004.
Jack K. Walton II, Assistant Director (202/452-2660), or Joseph P. Baressi, Senior Financial Services Analyst (202/452-3959), Division of Reserve Bank Operations and Payment Systems; or Adrianne G. Threatt, Counsel (202/452-3554), Legal Division. For users of Telecommunications Devices for the Deaf (TDD) only, contact 202/263-4869.
Regulation CC establishes the maximum period a depositary bank may wait between receiving a deposit and making the deposited funds available for withdrawal.
Appendix A to Regulation CC contains a routing number guide that assists banks in identifying local and nonlocal banks and thereby determining the maximum permissible hold periods for most deposited checks. The appendix includes a list of each Federal Reserve check processing office and the first four digits of the routing number, known as the Federal Reserve routing symbol, of each bank that is served by that office. Banks whose Federal Reserve routing symbols are grouped under the same office are in the same check processing region and thus are local to one another.
As explained in detail in the Board's final rule published in the
To assist banks in identifying local and nonlocal banks, the Board accordingly is amending the lists of routing symbols associated with the Federal Reserve Banks of St. Louis and Chicago to reflect the transfer of operations (1) from the St. Louis Reserve Bank's Little Rock office to that Reserve Bank's Memphis office and (2) from the Chicago Reserve Bank's Milwaukee office to that Reserve Bank's head office. To coincide with the effective date of the underlying check processing changes, the amendments affecting the Federal Reserve Bank of St. Louis are effective July 24, 2004, and the amendments affecting the Federal Reserve Bank of Chicago are effective August 7, 2004. The Board is providing advance notice of these amendments to give affected banks ample time to make any needed processing changes. The advance notice will also enable affected banks to amend their availability schedules and related disclosures, if necessary, and provide their customers with notice of these changes.
The Board has not followed the provisions of 5 U.S.C. 553(b) relating to notice and public participation in connection with the adoption of this final rule. The revisions to the appendix
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board has reviewed the final rule under authority delegated to the Board by the Office of Management and Budget. This technical amendment to appendix A of Regulation CC will (1) delete the reference to the Little Rock office of the Federal Reserve Bank of St. Louis and reassign the routing symbols listed under that office to the St. Louis Reserve Bank's Memphis office and (2) delete the reference to the Milwaukee office of the Federal Reserve Bank of Chicago and reassign the routing symbols listed under that office to the Chicago Reserve Bank's head office. The depository institutions that are located in the affected check processing regions and that include the routing numbers in their disclosure statements would be required to notify customers of the resulting change in availability under § 229.18(e). However, because all paperwork collection procedures associated with Regulation CC already are in place, the Board anticipates that no additional burden will be imposed as a result of this rulemaking.
Banks, Banking, Federal Reserve System, Reporting and recordkeeping requirements.
12 U.S.C. 4001
By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, May 13, 2004.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is amending the animal drug regulations to reflect approval of two supplemental new animal drug applications (NADAs) filed by Phibro Animal Health, Inc. The supplemental NADAs provide for a 0-day preslaughter withdrawal time for use of oxytetracycline in cattle feed.
This rule is effective May 19, 2004.
Joan C. Gotthardt, Center for Veterinary Medicine (HFV-130), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-827-7571, e-mail:
Phibro Animal Health, 710 Rt. 46 East, suite 401, Fairfield, NJ 07004, filed supplements to NADA 8-804 for TM-50, TM-50D, TM-100, and TM-100D (oxytetracycline) Type A medicated articles and NADA 95-143 for TERRAMYCIN 50, TERRAMYCIN 100, and TERRAMYCIN 200 (oxytetracycline) Type A medicated articles used for making medicated feeds for the treatment of various bacterial diseases of livestock. The supplemental NADAs provide for a 0-day withdrawal time prior to slaughter when Type C medicated feeds containing oxytetracycline are fed continuously to calves, beef cattle, and nonlactating dairy cattle at a dosage of 10 milligrams per pound of body weight for up to 14 days. The supplemental NADAs are approved as of March 12, 2004, and the regulations are amended in 21 CFR 558.450 to reflect the approval. The basis of approval is discussed in the freedom of information summaries.
In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), summaries of safety and effectiveness data and information submitted to support approval of these applications may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.
The agency has determined under 21 CFR 25.33(a)(1) that these actions are of a type that do not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the
Animal drugs, Animal feeds.
21 U.S.C. 360b, 371.
Bureau of Indian Affairs, Interior.
Final rule.
We are issuing a rule requiring that we immediately distribute $90 million of fiscal year 2004 Indian Reservation Roads (IRR) funds to projects on or near Indian reservations using the relative need formula. This partial distribution reflects the funds the Federal Highway Administration has allocated to the Department of the Interior and is based on funding appropriated by the Surface Transportation Extension Act of 2003 in effect until April 30, 2004. We are using the Federal Highway Administration (FHWA) Price Trends report for the relative need formula distribution process, with appropriate modifications to address non-reporting States. This distribution will allow an immediate allocation of funds based on an existing formula, final allocations will be dependent on a final authorization of highway trust funds and a fiscal year 2004 appropriations.
LeRoy Gishi, Chief, Division of Transportation, Tribal Services, Bureau of Indian Affairs, 1951 Constitution Avenue, NW., MS-20-SIB, Washington, DC 20240. Mr. Gishi may also be reached at (202) 513-7714 (phone) or (202) 208-4696 (fax).
The background information on the IRR program, the relative need formula, the FHWA Price Trends Report, and the TEA-21 Negotiated Rulemaking process is detailed in the
We are publishing this rule to distribute $90 million of fiscal year 2004 IRR Program funds. This rule sets no precedent for the final rule to be published as required by section 1115 of TEA-21.
Under 5 U.S.C. 553(b)(3)(B), notice and public procedure on this distribution under this rule are impracticable, unnecessary, and contrary to the public interest. In addition, we have good cause for making this final rule for distribution of the available fiscal year 2004 IRR Program funds effective immediately under 5 U.S.C. 553(d)(3).
Notice and public procedure would be impracticable because of the urgent need to distribute the available fiscal year 2004 IRR Program funds. Approximately 1,300 road and bridge construction projects are at various phases that require additional funds this fiscal year to continue or complete work, including 220 deficient bridges and the construction of approximately 7,300 miles of roads. Fiscal year 2004 IRR Program funds will be used to design, plan, and construct improvements (and, in some cases, to reconstruct bridges). Without this immediate final distribution of fiscal year 2004 IRR Program funds, tribal and BIA IRR projects will be forced to cease activity, placing projects and jobs in jeopardy. Waiting for notice and comment on this final distribution of fiscal year 2004 IRR Program funds would be contrary to the public interest. In some of the BIA regions, approximately 80 percent of the roads in the IRR system (and the majority of the bridges) are designated school bus routes. Roads are essential access to schools, jobs, and medical services. Many of the priority tribal roads are also emergency evacuation routes and represent the only access to tribal lands. Approximately 40 percent of the road miles in Indian country are unimproved roads. Deficient bridges and roads are health and safety hazards. Partially constructed road and bridge projects and deficient bridges and roads jeopardize the health and safety of the traveling public. Further, over 600 projects currently in progress are directly associated with environmental protection and preservation of historic and cultural properties. This rule is going into effect immediately because of the urgent need for distributing the final funds available under the fiscal year 2004 IRR Program to continue these construction projects.
You can find this information in the
Upon publication of this rule, the Secretary will distribute only $90 million of fiscal year 2004 IRR program funds based on the current relative need formula used in fiscal years 2000, 2001, 2002 and in fiscal year 2003. We are using the latest indices from the FHWA Price Trends Report with appropriate modifications for non-reporting States in the relative need formula distribution process.
Under the criteria in Executive Order 12866, this rule is not a significant regulatory action because it will not have an annual effect of more than $100
A Regulatory Flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act, because it does not have an annual effect on the economy of $100 million or more. We are distributing only $90 million under this rule. Congress has authorized these funds and FHWA has already allocated them to BIA. The cost to the government of distributing the IRR Program funds, especially under the relative need formula with which tribal governments, tribal organizations, and the BIA are already familiar, is negligible. The distribution of the IRR Program funds does not require tribal governments and tribal organizations to expend any of their own funds. This rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. Actions under this rule will distribute Federal funds to projects for transportation planning, road and bridge construction, and road improvements. This rule does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign based enterprises. In fact, actions under this rule will provide a beneficial effect on employment through funding for construction jobs.
Under the Unfunded Mandates Reform Act (2 U.S.C. 1531
With respect to Executive Order 12630, the rule does not have significant takings implications since it involves no transfer of title to any property. A takings implication assessment is not required.
With respect to Executive Order 13132, the rule does not have significant Federalism implications to warrant the preparation of a Federalism Assessment. This rule should not affect the relationship between state governments and the Federal Government because this rule concerns administration of a fund dedicated to IRR projects on or near Indian reservations that has no effect on Federal funding of state roads. Therefore, the rule has no Federalism effects within the meaning of Executive Order 13132.
This rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of Executive Order 12988. This rule contains no drafting errors or ambiguity and is clearly written to minimize litigation, provide clear standards, simplify procedures, and reduce burden. This rule does not preempt any statute. Under the Transportation Equity Act for the 21st Century negotiated rulemaking, we have published a proposed rule and funding formula which is currently being finalized. A final funding formula for fiscal year 2004 will be published in 2004. The rule is not retroactive with respect to any funding from any previous fiscal year (or prospective to funding from any future fiscal year), but applies only to $90 million of fiscal year 2004 IRR Program funding.
The Paperwork Reduction Act does not apply because this rule does not impose record keeping or information collection requirements or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget under 44 U.S.C. 501
This rule is categorically excluded from the preparation of an environmental assessment or an environmental impact statement under the National Environmental Policy Act of 1969, 42 U.S.C. 4321
Pursuant to Executive Order 13175 of November 6, 2000, “Consultation and Coordination with Indian Tribal Governments,” we have consulted with tribal representatives throughout the negotiated rulemaking process. We have evaluated any potential effects on federally recognized Indian tribes and have determined that there are no potential adverse effects and have determined that this rule preserves the integrity and consistency of the relative need formula process we have used since 1993 to distribute IRR Program funds. We are making a change from previous years (which we also made for fiscal years 2000, 2001, 2002 and 2003 IRR Program funds (see
Highways and roads, Indians—lands.
36 Stat. 861; 78 Stat. 241, 253, 257; 45 Stat. 750 (25 U.S.C. 47; 42 U.S.C. 2000e(b), 2000e-2(i); 23 U.S.C. 101(a), 202, 204), unless otherwise noted.
On May 19, 2004, we will distribute $90 million of fiscal year 2004 IRR Program funds authorized under the Surface Transportation Extension Act of 2003, Public Law 108-88, 117 Stat. 1110. We will distribute the funds to Indian Reservation Roads projects on or near Indian reservations using the relative need formula established and approved in January 1993. The formula has been modified to account for non-reporting States by inserting the latest data reported for those states for use in the relative need formula process.
Coast Guard, DHS.
Notice of implementation of regulation.
The Coast Guard is implementing the special local regulations at 33 CFR 100.518 for the U.S. Naval Academy Crew Races, marine events to be held April 17, April 24, and May 21, 2004, on the waters of the Severn River at Annapolis, Maryland. These special local regulations are necessary to control vessel traffic due to the confined nature of the waterway and expected vessel congestion during the events. The effect will be to restrict general navigation in the regulated area for the safety of event participants, spectators and vessels transiting the event area.
33 CFR 100.518 will be enforced from 5:30 a.m. to 10 a.m. on April 17, 2004, from 5:30 a.m. to 9 a.m. on April 24, 2004 and from 5 a.m. to 8 a.m. on May 21, 2004.
Ron Houck, Marine Information Specialist, Commander, Coast Guard Activities Baltimore, 2401 Hawkins Point Road, Baltimore, MD 21226-1971, (410) 576-2674.
The U.S. Naval Academy will sponsor crew races on the waters of the Severn River at Annapolis, Maryland. The events will consist of intercollegiate crew rowing teams racing along a 2000-meter course on the waters of the Severn River. A fleet of spectator vessels is expected to gather near the event site to view the competition. In order to ensure the safety of participants, spectators and transiting vessels, 33 CFR 100.518 will be in effect for the duration of each event. Under provisions of 33 CFR 100.518, vessels may not enter the regulated area without permission from the Coast Guard Patrol Commander. Spectator vessels may anchor outside the regulated area but may not block a navigable channel. Because these restrictions will only be in effect for a limited period, they should not result in a significant disruption of maritime traffic.
Coast Guard, DHS.
Final rule.
The Coast Guard is establishing permanent special local regulations for an outboard racing regatta held annually on the waters of the Nanticoke River near Sharptown, Maryland. This action is necessary to provide for the safety of life on navigable waters during the event. This action will restrict vessel traffic in portions of the Nanticoke River during the event.
This rule is effective June 18, 2004.
Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket CGD05-03-156 and are available for inspection or copying at Commander (oax), Fifth Coast Guard District, 431 Crawford Street, Portsmouth, Virginia 23704-5004 between 9 a.m. and 2 p.m., Monday through Friday, except Federal holidays.
S. L. Phillips, Project Manager, Auxiliary and Recreational Boating Safety Branch, at (757) 398-6204.
On October 24, 2003 we published a notice of proposed rulemaking (NPRM) entitled “Special Local Regulations for Marine Events; Nanticoke River, Sharptown, MD” in the
The North-South Racing Association sponsors an outboard racing regatta annually on the last Saturday and Sunday in June. The event consists of approximately 50 hydroplanes and runabouts conducting high-speed competitive races on the waters of the Nanticoke River between the Maryland S.R. 313 Highway Bridge and Nanticoke River Light 43 (LLN-24175). The races usually begin at 12 noon and conclude at 5 p.m. each day. A fleet of spectator vessels normally gathers nearby to view the event. To provide for the safety of participants, spectators and transiting vessels, the Coast Guard intends to temporarily restrict vessel movement in the event area before, during and after the event.
This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).
We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. Although this regulation will prevent traffic from transiting a portion of the Nanticoke River during the event, the effect of this regulation will not be significant due to the limited duration that the regulated area will be in effect and the extensive advance notifications that will be made to the maritime community via the Local Notice to Mariners, marine information broadcasts, and area newspapers, so mariners can adjust their plans accordingly. Additionally, vessel traffic will be able to transit the regulated area when the Coast Guard Patrol Commander deems it is safe to do so.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit or anchor in a portion of the Nanticoke River during the event.
This rule will not have a significant economic impact on a substantial number of small entities for the following reasons. This rule will be in effect for only two days each year. Vessel traffic will be able to transit the regulated area when the Coast Guard Patrol Commander deems it is safe to do so. Before the enforcement period, we will issue maritime advisories so mariners can adjust their plans accordingly.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we offered to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. We received no requests for assistance, and none was provided.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant
We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(h). The “Environmental Assessment” and “Finding of No Significant Impact” is available in the docket where indicated under
Marine Safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
33 U.S.C. 1233; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(1) Except for persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the regulated area.
(2) The operator of any vessel in this area shall:
(i) Stop the vessel immediately when directed to do so by any Official Patrol; and
(ii) Proceed as directed by any Official Patrol.
(c)
Coast Guard, DHS.
Final rule.
In 1999, the Coast Guard established a safety zone in the Atlantic Ocean near Cape Henlopen State Park, Delaware. The zone was created to protect spectators and vessels from the potential hazards associated with the Delaware Aerospace Education Foundation launch of a Super Loki Meteorological Rocket from Cape Henlopen State Park on the second Saturday of May each year. Vessels may not enter the safety zone without permission of the Captain of the Port, Philadelphia. Because of a clerical error, this final rule was only referenced in the
This final rule became effective on May 7, 1999. The rule has been enforced using actual notice since May 7, 1999, and is enforceable using constructive notice as of May 19, 2004.
Documents as indicated in this preamble are available for inspection or copying at the office of the Commanding Officer, USCG MSO/Group Office, 1 Washington Avenue, Philadelphia, PA 19147-4395, between 8 a.m. and 5 p.m., Monday through Friday, except federal holidays. The telephone number is (215) 271-4888.
Lieutenant Junior Grade Kevin Sligh or Ensign Jill Munsch, Waterways Management Branch, USCG MSO/Group Office, 1 Washington Avenue, Philadelphia, PA 19147-4395, telephone (215) 271-4889.
On February 8, 1999, the Coast Guard published a notice of proposed rulemaking (NPRM) entitled “Safety Zone; Atlantic Ocean, Vicinity of Cape Henlopen State Park, DE” in the
Finding good cause under 5 U.S.C. 553(d)(3), the Coast Guard issued a final rule April 30, 1999, and made it effective less than 30 days after publication in the
The final rule was received at Coast Guard Headquarters on May 7, 1999, but was mistakenly designated for inclusion in a quarterly list of temporary final rules that expired before they could be published in full text in the
The Delaware Aerospace Education Foundation will launch a Super Loki Meteorological Rocket from Cape Henlopen State Park each year on the second Saturday in May, for the purpose of collecting meteorological data. If the Saturday launch is cancelled because of inclement weather, it is rescheduled for the next day. This safety zone is necessary to protect spectators and transiting vessels from the potential hazards associated with the launch.
Although the exact launch time is subject to change because of weather, the entire process from launch to splashdown should occur between 2 p.m. and 4:30 p.m. on the launch date. The Coast Guard will announce by broadcast Notice to Mariners the anticipated day (either Saturday or Sunday) and the time of launch. The Coast Guard will grant general permission to enter the safety zone during those times in which the launch and spent rocket motor do not pose a hazard to mariners. Because the hazardous condition should last for only 2
This safety zone covers an 8-square-nautical-mile section of the Atlantic Ocean adjacent to the launch site at Cape Henlopen State Park in Delaware. Specifically, the waters of the Atlantic Ocean within the area bounded by a line drawn north from the tip of Cape Henlopen, located at latitude 38°48.2′ N, longitude 75°05.5′ W, to a point located at latitude 38°49.4′ N, longitude 75°05.5′ W; then east to a point located at latitude 38°49.4′ N, longitude 75°01.4′ W; then south to a point located at latitude 38°43.0′ N, longitude 75°01.4′ W; then west to a point on the shoreline located at latitude 38°43.0′ N, longitude 75°04.5′ W, then north following the shoreline, to a point located at latitude 38°48.2′ N, longitude 75°05.5′ W.
The safety zone will be enforced on the second Saturday in May or the following day. Vessels will be prohibited from transiting through the safety zone without first obtaining permission from the Captain of the Port, Philadelphia. The Captain of the Port will announce by Broadcast Notice to Mariners the anticipated day and time of the launch and grant general permission to enter the safety zone during all non-hazardous times.
The rocket payload, assisted by parachute, should splash down in the Atlantic Ocean about 22 nautical miles southeast of the launch point, which is an area outside of the proposed safety zone. The Coast Guard advises all marine traffic to exercise caution when transiting that area during launch times.
The Coast Guard received no comments on the 1999 proposed rule (64 FR 6006, February 8, 1999). The May 1999 final rule expanded the description of the safety zone to include the final leg along the shoreline adjacent to Cape Henlopen State Park. Otherwise, the May 1999 final rule implemented the NPRM without change.
This final rule is not a significant regulatory action under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. It has been exempted from review by the Office of Management and Budget under that order. It is not significant under the regulatory policies and procedures of the Department of Homeland Security (DHS). The area of the safety zone is limited to 8 square nautical miles. The hazardous condition should last for only 2
Under the Regulatory Flexibility Act (5 U.S.C. 601
This final rule contains no Collection-of-Information requirements under the Paperwork Reduction Act (44 U.S.C. 3501
The Coast Guard has analyzed this final rule under the principles and criteria contained in Executive Order 12612 and has determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
The Coast Guard considered the environmental impact of this final rule and concluded that, under figure 2-1, paragraph (34)(g) of COMDTINST M16475.1 C, this rule is categorically excluded from further environmental documentation. Regulations establishing safety zones are excluded under that authority. Nevertheless, a Categorical Exclusion Determination statement was prepared and placed in the rulemaking docket. It is available for inspection or copying at the location indicated under
In the course of developing the Categorical Exclusion Determination, the U.S. Fish and Wildlife Service provided comments to the Coast Guard in accordance with Section 7 of the Endangered Species Act (87 Stat. 884, as amended; 16 U.S.C. 1531
The comments recommended that the rocket not launch within
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
(3) The COTP Philadelphia may authorize and designate any Coast Guard commissioned, warrant, or petty officer to act on his behalf in enforcing this safety zone.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary security zone encompassing the Trans-Alaska Pipeline (TAPS) Valdez Terminal Complex, Valdez, Alaska and TAPS Tank Vessels and a temporary security zone in the Valdez Narrows, Port Valdez, Alaska. These security zones are necessary to protect the Alyeska Marine Terminal and vessels from damage or injury from sabotage, destruction or other subversive acts. Entry of vessels into these security zones is prohibited unless specifically authorized by the Captain of the Port, Prince William Sound, Alaska.
This rule is effective from April 9, 2004, until October 31, 2004. Comments and related material must reach the Coast Guard on or before June 30, 2004.
Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket COTP Prince William Sound 04-001 and are available for inspection or copying at U.S. Coast Guard Marine Safety Office, PO Box 486, Valdez, Alaska 99686, between 7:30 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays.
LT Catherine Huot, U.S. Coast Guard Marine Safety Office Valdez, Alaska, (907) 835-7262.
A notice of proposed rulemaking (NPRM) was not published for this regulation. In accordance with 5 U.S.C. 553(b)(B), the Coast Guard finds good cause exists for not publishing an NPRM. The Coast Guard is taking this action for the immediate protection of the national security interests in light of terrorist acts perpetrated on September 11, 2001, and the continuing threat that remains from those who committed those acts. Also, in accordance with 5 U.S.C. 553(d)(3), the Coast Guard finds good cause to exist for making this regulation effective less than 30 days after publication in the
On November 7, 2001, we published three temporary final rules in the
Then on June 4, 2002, we published a temporary final rule (67 FR 38389) that established security zones to replace these security zones. That rule issued in April 2002, which expired July 30, 2002, created temporary § 165.T17-009, entitled “Port Valdez and Valdez Narrows, Valdez, Alaska—security zone”.
Then on July 31, 2002, we published a temporary final rule (67 FR 49582) that established security zones to extend the temporary security zones that would have expired July 30, 2002. This extension was to allow for the completion of a notice-and-comment rulemaking to be completed to create permanent security zones to replace the temporary zones. Then on October 23, 2002, we published a notice of proposed rulemaking that sought public comment on establishing permanent security zones similar to the temporary security zones (67 FR 65074). The comment period for that NPRM ended December 23, 2002.
Although no comments were received that would result in changes to the proposed rule an administrative omission was found that resulted in the need to issue a supplemental notice of proposed rulemaking (SNPRM) to address the “Collection of Information” section of the proposed rule (68 FR 14935, March 27, 2003). Then, on December 30, 2002, we issued a
This temporary final rule creates temporary security zones through October 31, 2004, to allow for the rulemaking involving the SNPRM to be completed. Elsewhere in today's
This temporary final rule establishes three security zones. The Trans-Alaska Pipeline Valdez Marine Terminal Security zone encompasses the waters of Port Valdez between Allison Creek to the east and Sawmill Spit to the west and offshore to marker buoys A and B (approximately 1.5 nautical miles offshore from the TAPS Terminal). The Tanker Moving Security Zone encompasses the waters within 200 yards of a TAPS Tanker within the Captain of the Port, Prince William Sound Zone. The Valdez Narrows Security Zone encompasses the waters 200 yards either side of the Tanker Optimum Trackline through Valdez Narrows between Entrance Island and Tongue Point. This zone is active only when a TAPS Tanker is in the zone.
The Coast Guard has worked closely with local and regional users of Port Valdez and Valdez Narrows waterways to develop these security zones in order to mitigate the impact on commercial and recreational users. This temporary final rule establishes a uniform transition from the temporary operating zones while the rulemaking for permanent security zones is completed.
Although the Coast Guard has good cause in implementing this regulation without a notice of proposed rulemaking, we want to afford the maritime community the opportunity to participate in this rulemaking by submitting comments and related material regarding the size and boundaries of these security zones in order to minimize unnecessary burdens. If you do so, please include your name and address, identify the docket number for this rulemaking, COTP Prince William Sound 04-001, indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8.5 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this temporary final rule in view of them.
This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS). The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. Economic impact is expected to be minimal because there are alternative routes for vessels to use when the zone is enforced, permits to enter the zone are available, and the Tanker Moving Security Zone is in effect for a short duration.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. The number of small entities impacted by this rule is expected to be minimal because there are alternative routes for vessels to use when the zone is enforced, permits to enter the zone are available, and the Tanker Moving Security Zone is in effect for a short duration. Since the time frame this rule is in effect may cover commercial harvests of fish in the area, the entities most likely affected are commercial and native subsistence fishermen. The Captain of the Port will consider applications for entry into the security zone on a case-by-case basis; therefore, it is likely that very few, if any, small entities will be impacted by this rule. Those interested may apply for a permit to enter the zone by contacting Marine Safety Office, Valdez at the above contact number.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
This rule contains no information collection requirements under the Paperwork Reduction Act (44 U.S.C. 3501
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not affect a taking of private property or otherwise have taking implications under Executive
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.
We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This rule creates no additional vessel traffic and thus imposes no additional burdens on the environment in Prince William Sound. It simply provides guidelines for vessels transiting in the Captain Of The Port, Prince William Sound Zone so that vessels may transit safely in the vicinity of the Port of Valdez and the TAPS terminal. A “Categorical Exclusion Determination” is available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and record keeping requirements, Safety measures, Vessels, Waterways.
33 U.S.C. 1226, 1231; 46 U.S.C. chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1
(a) The following areas are security zones—
(1)
(2)
(3)
(i) The Valdez Narrows Tanker Optimum Track line is a line commencing at 61°05′23″ N, 146°37′22.5″ W; thence south westerly to 61°04′03.2″ N, 146°40′03.2″ W; thence southerly to 61°03′00″ N, 146°41′12″ W.
(ii) This security zone encompasses all waters within approximately 200 yards on either side of the Valdez Narrows Optimum Track line.
(b)
(2) Tank vessels transiting directly to the TAPS terminal complex, engaged in the movement of oil from the terminal or fuel to the terminal, and vessels used to provide assistance or support to the tank vessels directly transiting to the terminal, or to the terminal itself, and that have reported their movements to the Vessel Traffic Service, as required under 33 CFR part 161 and § 165.1704, may operate as necessary to ensure safe passage of tank vessels to and from the terminal.
(3) All persons and vessels must comply with the instructions of the Coast Guard Captain of the Port and the designated on-scene patrol personnel. These personnel comprise commissioned, warrant, and petty officers of the Coast Guard. Upon being hailed by a vessel displaying a U.S. Coast Guard ensign by siren, radio, flashing light, or other means, the operator of the vessel must proceed as directed. Coast Guard Auxiliary and local or state agencies may be present to inform vessel operators of the requirements of this section and other applicable laws.
Environmental Protection Agency (EPA).
Notice of availability.
EPA is approving and announcing the availability of the MOBILE6.2 motor vehicle emissions factor model for official use in particulate matter (PM
EPA is also approving and announcing the availability of new methods for the estimation of re-entrained road dust emissions from cars, trucks, buses, and motorcycles on paved and unpaved roads for PM
Today's action also starts time periods after which MOBILE6.2 and the December 2003 AP-42 methods are required to be used in new transportation conformity analyses for PM
EPA strongly encourages areas to use the interagency consultation process to examine how MOBILE6.2 and the December 2003 AP-42 methods will affect future transportation conformity analyses, so, if necessary, PM
EPA's approval of the MOBILE6.2 emissions factor model and December 2003 AP-42 methods for re-entrained road dust is effective May 19, 2004. See below for further information regarding how today's approval starts time periods after which MOBILE6.2 and the December 2003 AP-42 methods are required in new transportation conformity analyses and certain SIP and motor vehicle emissions budget revisions.
If you have questions on this notice, please send an e-mail to EPA at
Copies of the official version of the MOBILE6.2 model are available on EPA's MOBILE Web site,
Individuals who wish to receive EPA announcements related to the MOBILE model should subscribe to the EPA-MOBILENEWS e-mail listserver. To subscribe to the EPA-MOBILENEWS listserver, write the following in the body of the e-mail message:
subscribe EPA-MOBILENEWS FIRSTNAME LASTNAME where FIRSTNAME and LASTNAME is your name (for example: John Smith) and send the e-mail to the EPA Listserver at
Your e-mail address will then be added to the list of subscribers and a confirmation message will be sent to your e-mail address. Whenever a message is posted to the EPA-MOBILENEWS listserver by the listserver owner (the Assessment and Standards Division of the EPA Office of Transportation and Air Quality), a copy of that message will be sent to every person who has subscribed.
You can remove yourself from the list by sending another message to the listserver address. This message must be sent from the same e-mail address that you used to subscribe, and should contain the message: unsubscribe EPA-MOBILENEWS.
Copies of the official version of the December 2003 edition of Sections 13.2.1 and 13.2.2 of AP-42 can be found at
MOBILE is an EPA emissions factor model for estimating pollution from on-road motor vehicles in states outside of California. The model accounts for the emission impacts of factors such as changes in vehicle emission standards, changes in vehicle populations and activity, and variation in local conditions such as temperature, humidity, fuel quality, and air quality programs.
MOBILE is used to calculate current and future inventories of motor vehicle emissions at the national and local level. These inventories are used to make decisions about air pollution policies and programs at the local, state and national level. Inventories based on MOBILE are also used to meet the federal Clean Air Act's state implementation plan (SIP) and transportation conformity requirements.
The previous version of MOBILE, known as MOBILE6, calculated emissions of volatile organic compounds (VOCs), nitrogen oxides (NO
Although MOBILE6.2 includes some corrections and enhancements to parts of the model that estimate emissions of HC, NO
Motor vehicle emissions inventories for PM are comprised of four components: exhaust emissions, emissions from brake wear, emissions from tire wear, and re-entrained road dust. MOBILE6.2 does not include the capability of estimating the emissions of re-entrained road dust as the result of motor vehicle activity. EPA has developed separate revised AP-42 methodologies for estimating re-entrained road dust from paved and unpaved roads. These new methods for estimating road dust emission factors for paved and unpaved roads are being incorporated in EPA's document AP-42. These new AP-42 methodologies (AP-42, Sections 13.2.1, Paved Roads and 13.2.2, Unpaved Roads, each dated December 2003) replace previous methods for estimating re-entrained road dust emissions for these categories with some limitations. AP-42 is the approved method only for situations for which silt loading, mean vehicle weight, and mean vehicle speed fall within ranges given in AP-42 section 13.2.1.3 and with reasonably free-flowing traffic. For other conditions, areas may use an appropriate method approved by EPA on a case-by-case basis. In some areas, alternate methods may be more appropriate than AP-42 given specific local conditions even within the parameters given in AP-42 section 13.2.1.3. State and local agencies should consult with EPA for approval of alternative approaches. This policy is described in more detail in the document “Policy Guidance on the Use of MOBILE6.2 and the December 2003 AP-42 Method for Re-Entrained Road Dust for SIP Development and Transportation Conformity” (available at
EPA has articulated its policy regarding the use of MOBILE6.2 and AP-42 in PM
PM
States should use MOBILE6.2 and AP-42 where PM
Transportation conformity is a Clean Air Act requirement to ensure that federally supported highway and transit activities are consistent with (“conform to”) the SIP. Conformity to a SIP means that a transportation activity will not cause or contribute to new air pollution violations; worsen existing violations; or delay timely attainment of federal air quality standards.
The transportation conformity rule (40 CFR part 93) requires that conformity analyses be based on the latest motor vehicle emissions model approved by EPA. Section 176(c)(1) of the Clean Air Act states that “. * * * [t]he determination of conformity shall be based on the most recent estimates of emissions, and such estimates shall be determined from the most recent population, employment, travel, and congestion estimates * * *.” When we approve new emissions models such as MOBILE6.2 and AP-42, a grace period is established before the models are required for conformity analyses. The conformity rule provides for a grace period for new emissions models of between 3-24 months.
EPA articulated its intentions for establishing the length of a conformity grace period in the preamble to the 1993 transportation conformity rule (58 FR 62211):
“EPA and [the Department of Transportation (DOT)] will consider extending the grace period if the effects of the new emissions model are so significant that previous SIP demonstrations of what emission levels are consistent with attainment would be substantially affected. In such cases, States should have an
Upon consideration of all of these factors, EPA is establishing a 2-year grace period, which begins today and ends on May 19, 2006, before MOBILE6.2 and AP-42 are required for new PM
However, the grace period will be shorter than 2 years for PM
During the grace period, areas can use earlier models such as PART5 for PM
Finally, the conformity rule provides some flexibility for analyses that are started before or during the grace period. Regional conformity analyses that began before the end of the grace period may continue to rely on earlier models such as PART5. Conformity determinations for transportation projects may also be based on an earlier model if the regional analysis was begun before the end of the grace period, and if the final environmental document for the project is issued no more than three years after the issuance of the draft environmental document (see 40 CFR 93.111(c)). The interagency consultation process should be used if it is unclear whether an analysis based on an earlier model was begun before the end of the grace period.
The release of MOBILE6.2 and AP-42 does not trigger the need for quantitative conformity hot-spot modeling to estimate concentrations of PM
EPA has not yet finalized implementation policy for the PM
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes a time-limited tolerance for residues/combined residues of indoxacarb, (S)-methyl 7-chloro-2,5-dihydro-2-[[(methoxycarbonyl) [4-(trifluoromethoxy) phenyl]amino]carbonyl] indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, and its R-enantiomer, (R)-methyl 7-chloro-2,5-dihydro-2- [[(methoxycarbonyl)[4-(trifluoromethoxy) phenyl]amino]carbonyl]indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, in or on cherry, sweet and cherry, tart. E.I. DuPont de Nemours and Company, DuPont Crop Protection requested this tolerance under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996 (FQPA). The tolerance will expire on May 21, 2007.
This regulation is effective May 19, 2004. Objections and requests for hearings must be received on or before July 19, 2004.
To submit a written objection or hearing request follow the detailed instructions as provided in Unit VIII. of the
Rita Kumar, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number: (703) 308-8291; e-mail address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer] Potentially affected entities may include, but are not limited to:
• Crop production (NAICS code 111)
• Animal production (NAICS code 112)
• Food manufacturing (NAICS code 311)
• Pesticide manufacturing (NAICS 32532)
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
In addition to using EDOCKET
In the
The petition requested that 40 CFR 180.564 be amended by establishing a tolerance for combined residues of the insecticide indoxacarb, (S)-methyl 7-chloro-2,5-dihydro-2-[[(methoxycarbonyl) [4-(trifluoromethoxy) phenyl]amino]carbonyl] indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, and its R-enantiomer, (R)-methyl 7-chloro-2,5-dihydro-2- [[(methoxycarbonyl)[4-(trifluoromethoxy) phenyl]amino]carbonyl]indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, in or on cherry, sweet and cherry, tart at 1.0 part per million (ppm). The tolerance will expire on May 21, 2007. One comment was received from a private citizen objecting to this tolerance. This commenter opposes all residues, tolerances, exemptions from tolerance, animal testing, or the Agency's risk assessment process, and has objected to numerous Agency actions over the past several months.
Section 408(b)(2)(A)(i) of the FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of the FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of the FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of the FFDCA and a complete description of the risk assessment process, see the final rule on Bifenthrin Pesticide Tolerances (62 FR 62961, November 26, 1997) (FRL-5754-7).
Consistent with section 408(b)(2)(D) of the FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of the FFDCA, for a tolerance for combined residues of indoxacarb, (S)-methyl 7-chloro-2,5-dihydro-2-[[(methoxycarbonyl) [4-(trifluoromethoxy) phenyl]amino]carbonyl] indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, and its R-enantiomer, (R)-methyl 7-chloro-2,5-dihydro-2- [[(methoxycarbonyl)[4-(trifluoromethoxy) phenyl]amino]carbonyl]indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, on cherry, sweet and cherry, tart at 1.0 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The nature of the toxic effects caused by indoxacarb are discussed in Table 1 of this unit as well as the no observed adverse effect level (NOAEL) and the lowest observed adverse effect level (LOAEL) from the toxicity studies reviewed.
The dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. An UF of 100 is routinely used, 10X to account for interspecies differences and 10X for intra species differences. Discuss any additional UFs (other than the FQPA SF) used in the assessment.
For dietary risk assessment (other than cancer) the Agency uses the UF to calculate an acute or chronic reference dose (acute RfD or chronic RfD) where the RfD is equal to the NOAEL divided by the appropriate UF (RfD = NOAEL/UF). Where an additional safety factor is retained due to concerns unique to the FQPA, this additional factor is applied to the RfD by dividing the RfD by such additional factor. The acute or chronic Population Adjusted Dose (aPAD or cPAD) is a modification of the RfD to accommodate this type of FQPA Safety Factor (SF).
For non-dietary risk assessments (other than cancer) the UF is used to determine the LOC. For example, when 100 is the appropriate UF (10X to account for interspecies differences and 10X for intraspecies differences) the LOC is 100. To estimate risk, a ratio of the NOAEL to exposures (margin of exposure (MOE) = NOAEL/exposure) is calculated and compared to the LOC.
The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify carcinogenic risk. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk. A Q* is calculated and used to estimate risk which represents a probability of occurrence of additional cancer cases (e.g., risk is expressed as 1 x 10
1.
i.
ii.
iii.
Section 408(b)(2)(E) of the FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide chemicals that have been measured in food. If EPA relies on such information, EPA must require that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. Following the initial data submission, EPA is authorized to require similar data on a time frame it deems appropriate. As required by section 408(b)(2)(E) of the FFDCA, EPA will issue a data call-in for information relating to anticipated residues to be submitted no later than 5 years from the date of issuance of this tolerance.
Section 408(b)(2)(F) of the FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if the Agency can make the following findings: Condition 1, that the data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain such pesticide residue; Condition 2, that the exposure estimate does not underestimate exposure for any significant subpopulation group; and Condition 3, if data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of percent crop treated (PCT) as required by section 408(b)(2)(F) of the FFDCA , EPA may require registrants to submit data on PCT.
Dietary exposure estimates were based on 1% CT for peaches and cherries. This PCT of 1% was based on the fact that the 2-year experimental use permit s were issued for only 300 acres of peaches, and 180 acres of cherries to be treated annually, which amounts to 0.2% of the total peach and cherry acreages in the United States. The reason for using 1% instead of 0.2% is to allow for any uncertainties in the residue evaluation. Before making this tolerance permanent, reevaluation of dietary exposure will be performed using all available information. Other commodities were assumed to be 100% treated.
The Agency believes that the three conditions previously discussed have been met. With respect to Condition 1, EPA finds that the PCT information described 1% for indoxacarb used on peaches and cherries is reliable and has a valid basis. A 2-year EUP has been issued for both of these uses, which will allow for use of indoxacarb on 300 acres of peaches and 180 acres of cherries in some eastern states. Before these uses can be expanded for treatment of greater than 300 or 180 acres respectively per year, permission from the Agency must be obtained. As to Conditions 2 and 3, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available information on the regional consumption of food to which Indoxacarb may be applied in a particular area.
2.
The Agency uses the First Index Reservoir Screening Tool (FIRST) or the Pesticide Root Zone/Exposure Analysis Modeling System (PRZM/EXAMS) to estimate pesticide concentrations in surface water and Screening Concentrations in Ground Water (SCI-GROW), which predicts pesticide concentrations in ground water. In general, EPA will use FIRST (a Tier 1 model) before using PRZM/EXAMS (a Tier 2 model) for a screening-level assessment for surface water. The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. FIRST and PRZM/EXAMS incorporate an index reservoir environment. FIRST and PRZM/EXAMS models include a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.
None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would exceed human health levels of concern.
Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or %PAD. Instead drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are high-end to bounding estimates on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to indoxacarb they are further discussed in the aggregate risk sections below.
Based on the PRZM/EXAMS and SCI-GROW models the estimated EECs of indoxacarb for acute exposures are estimated to be 13.7 parts per billion (ppb) for surface water and 0.02 ppb for ground water. The EECs for chronic exposures are estimated to be 3.7 ppb for surface water and 0.02 ppb for ground water.
3.
Indoxacarb is not registered for use on any sites that would result in residential exposure.
4.
EPA does not have, at this time, available data to determine whether
1.
2.
The reproduction toxicity study with JW062 can be used to satisfy the requirement for an indoxacarb study because: (1) systemic toxicity is at similar doses and of similar magnitude to that observed in subchronic feeding studies with both indoxacarb and JW062; (2) based on the data base, EPA determined that there was support for using data from dietary studies conducted with JW062 to satisfy the data requirements for indoxacarb.
The Agency has required a developmental neurotoxicity study as confirmatory data due to:
• Clinical signs of neurotoxicity in several studies, males and females, mice and rats, at some doses that do not cause mortality.
• Signs of neurotoxicity in the acute neurotoxicity study rat with indoxacarb (males and females), no mortality in males at neurotoxic doses.
• Clinical signs of neurotoxicity in the 90-day toxicity study rat indoxacarb (females), mortality.
• Clinical signs of neurotoxicity in the 90-day toxicity study mouse with the racemic mixture, JW062 (males and females), no mortality in females at neurotoxic doses, mortality in males.
• Clinical signs of neurotoxicity in the 18-month carcinogenicity study mouse with JW062 (males and females) high and mid dose, mortality at the high but no mortality at the mid dose.
• Clinical signs of neurotoxicity in the developmental toxicity study rat with JW062 (using methyl cellulose as the vehicle), at doses causing mortality.
3.
• There is no indication of quantitative or qualitative increased susceptibility of rats or rabbits to
• The requirement of a developmental neurotoxicity study is not based on the criteria reflecting special concern for the developing fetuses or young which are generally used for requiring a DNT study - and a safety factor (e.g., neuropathy in adult animals; CNS malformations following prenatal exposure; brain weight or sexual maturation changes in offspring; and/or functional changes in offspring) - and therefore does not warrant an FQPA safety factor.
• The dietary (food and drinking water) exposure assessments will not underestimate the potential exposures for infants and children.
• There are no registered residential uses at the current time.
To estimate total aggregate exposure to a pesticide from food, drinking water, and residential uses, the Agency calculates DWLOCs which are used as a point of comparison against the model estimates of a pesticide's concentration in water (EECs). DWLOC values are not regulatory standards for drinking water. DWLOCs are high-end to bounding estimates on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food and residential uses. In calculating a DWLOC, the Agency determines how much of the acceptable exposure (i.e., the PAD) is available for exposure through drinking water (e.g., allowable chronic water exposure (mg/kg/day) = cPAD - (average food + residential exposure)). This allowable exposure through drinking water is used to calculate a DWLOC.
A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by the USEPA Office of Water are used to calculate DWLOCs: 2 liter (L)/70 kg (adult male), 2L/60 kg (adult female), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: acute, short-term, intermediate-term, chronic, and cancer.
When EECs for surface water and ground water are less than the calculated DWLOCs, EPA concludes with reasonable certainty that exposures to the pesticide in drinking water (when considered along with other sources of exposure for which EPA has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because EPA considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, EPA will reassess the potential impacts of residues of the pesticide in drinking water as a part of the aggregate risk assessment process.
1.
2.
3.
4.
5.
6.
Adequate enforcement methodology (example—gas chromotography) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; e-mail address:
There are no established or proposed Codex, Canadian, or Mexican maximum residue limits (MRLs) for residues of indoxacarb; therefore, international harmonization is not an issue at this time.
Therefore, the tolerance is established for combined residues of indoxacarb, (S)-methyl 7-chloro-2,5-dihydro-2-[[(methoxycarbonyl) [4-(trifluoromethoxy) phenyl]amino]carbonyl] indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, and its R-enantiomer, (R)-methyl 7-chloro-2,5-dihydro-2- [[(methoxycarbonyl)[4-(trifluoromethoxy) phenyl]amino]carbonyl]indeno[1,2-e][1,3,4]oxadiazine-4a(3H)-carboxylate, in or on cherry, sweet and cherry, tart at 1.0 ppm. This tolerance will expire and is revoked on May 21, 2007.
Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. Although the procedures in those regulations require some modification to reflect the amendments made to the FFDCA by the FQPA, EPA will continue
You must file your objection or request a hearing on this regulation in accordance with the instructions provided in this unit and in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number OPP-2004-0130 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before July 19, 2004.
1.
Mail your written request to: Office of the Hearing Clerk (1900L), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. You may also deliver your request to the Office of the Hearing Clerk in Suite 350, 1099 14
2.
EPA is authorized to waive any fee requirement “when in the judgement of the Administrator such a waiver or refund is equitable and not contrary to the purpose of this subsection.” For additional information regarding the waiver of these fees, you may contact James Tompkins by phone at (703) 305-5697, by e-mail at
If you would like to request a waiver of the tolerance objection fees, you must mail your request for such a waiver to: James Hollins, Information Resources and Services Division (7502C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.
3.
A request for a hearing will be granted if the Administrator determines that the material submitted shows the following: There is a genuine and substantial issue of fact; there is a reasonable possibility that available evidence identified by the requestor would, if established resolve one or more of such issues in favor of the requestor, taking into account uncontested claims or facts to the contrary; and resolution of the factual issues(s) in the manner sought by the requestor would be adequate to justify the action requested (40 CFR 178.32).
This final rule establishes a tolerance under section 408(d) of the FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
21 U.S.C. 321(q), 346a and 371.
(a) * * * P>(2) * * *
Office of Inspector General (OIG), HHS.
Interim final rule with comment period.
In accordance with section 1860D-31 of the Social Security Act, this rule sets forth the OIG's new authority for imposing civil money penalties (CMPs) against endorsed sponsors under the Medicare prescription drug discount card program that knowingly engage in false or misleading marketing practices; overcharge program enrollees; or misuse transitional assistance funds.
In commenting, please refer to file code OIG-54-FC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. Please mail or deliver your written comments to the following address: Office of Inspector General, Department of Health and Human Services, Attention: OIG-54-FC, Room 5246, Cohen Building, 330 Independence Avenue, SW,. Washington, DC 20201.
Please allow sufficient time for us to receive mailed comments on time in the event of delivery delays. Because access to the Cohen Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the OIG drop box located in the main lobby of the building. For information on viewing public comments, see section IV. in the
Joel Schaer, Office of Management and Policy, (202) 619-0089; or Niteesha Gupte, Office of Counsel to the Inspector General, (202) 619-1306.
In 1981, Congress enacted the civil money penalty statute, section 1128A of
Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act (MPDIMA) of 2003, as enacted by Public Law 108-173 and codified in section 1860D-31 of the Social Security Act (the Act), provides for a voluntary prescription drug discount card program for Medicare beneficiaries entitled to benefits, or enrolled, under Part A or enrolled under Part B, excluding beneficiaries entitled to medical assistance for outpatient prescription drugs under Medicaid, including section 1115 waiver demonstrations. Eligible beneficiaries may access negotiated prices on prescription drugs by enrolling in drug discount card programs offered by Medicare-endorsed sponsors.
The implementing regulations establishing the requirements for the MPDIMA program were published in the
Sections 1860D-31(b)(1) and (2) of the Act, and 42 CFR 403.810(a) and (b) of the CMS regulations, establish the eligibility criteria for the Medicare drug discount card program and for transitional assistance. Section 1860D-31(f)(1)(A) of the Act directs the Secretary to specify the procedures for determining a beneficiary's eligibility for the Medicare drug discount card program or transitional assistance, and section 1860D-31(c)(1) directs the Secretary to establish a process for eligible beneficiaries enrolling in, and disenrolling from, an endorsed program. These provisions have been codified, respectively, in 42 CFR 403.810 and 403.811 of the CMS regulations.
Section 1860D-31(a)(1)(A) of the Act requires the Secretary to endorse qualified applicants seeking to offer endorsed discount card programs to Medicare beneficiaries. MPDIMA sets forth specific requirements that applicants must satisfy to be eligible for endorsement and that endorsed sponsors must meet to retain their endorsement. The obligations of endorsed sponsors related to eligibility determinations and enrollment are specifically set forth in section II.C.6. of the preamble to the interim final rule.
Under MPDIMA, certain low-income Medicare beneficiaries enrolled in the Medicare drug discount card program are eligible to receive transitional assistance of up to $600 per year, which may be applied toward the cost of covered discount card drugs obtained under the program. Section 1860D-31(h)(1)(C) of the Act requires endorsed sponsors to administer the transitional assistance on behalf of CMS and to demonstrate to the Secretary that they have satisfactory arrangements to account for the transitional assistance provided to transitional assistance enrollees. These requirements are codified in 42 CFR 403.806(e).
Section 1860D-31(d)(2)(A) of the Act requires that each prescription drug card endorsed sponsor that offers an endorsed discount card program make available to beneficiaries eligible for the discount card program—through the internet and otherwise—information that the Secretary identifies as being necessary to promote informed choice among endorsed discount card programs, including information on enrollment fees and negotiated prices for covered discount card drugs. In addition, section 1860D-31(h)(7)(A) of the Act limits drug card endorsed sponsors to providing under their endorsements only products and services directly related to covered discount card drugs, or discounts on over-the-counter drugs; and section 1860D-31(h)(7)(B) prohibits endorsed sponsors from marketing, under their endorsements, any products and services other than those described in section 1860D-31(h)(7)(A). The requirements for information to be included in materials are contained in the CMS regulations at 42 CFR 403.806(g).
Section 1860D-31(i)(3) of the Act authorizes the imposition of CMPs against endorsed sponsors that knowingly engage in conduct that violates the requirements of section 1860D-31 of the Act or engage in false or misleading marketing practices. Section 403.820(b) of the CMS regulations interpreted this to mean that those endorsed sponsors that knowingly engage in conduct that violates the conditions of their endorsement agreement with the Department or that constitutes false or misleading marketing practices may be subject to CMPs.
The Department has divided the sanction authority between CMS and the OIG. Where CMP authority is shared between CMS and the OIG, the Department has assigned sanction authority to the OIG for those violations that concern
As a result, in accordance with CMS's Medicare prescription drug discount card implementing regulations (68 FR 69787; December 15, 2003), in addition to or in place of sanctions that CMS may impose, as set forth in 42 CFR 403.820(a), the OIG has been authorized to impose CMPs against an endorsed
• Misrepresented or falsified information in outreach material or comparable material provided to a program enrollee or other person;
• Charged a program enrollee in violation of the terms of the endorsement contract; or
• Used transitional assistance funds in any manner that is inconsistent with the purpose of the transitional assistance program.
The OIG may impose CMPs of no more than $10,000 for each of these violations. A violation is deemed to occur in each instance when an endorsed sponsor (1) provides misleading information to a program enrollee or other person; (2) overcharges a program enrollee; or (3) misuses the transitional assistance funds of a program enrollee. Appeal rights will be afforded in accordance with the appeal procedures set forth in 42 CFR parts 1003 and 1005.
To address these new OIG civil money penalty authorities, we are amending 42 CFR part 1003 as follows:
• In § 1003.100, Basis and purpose, we are revising paragraphs (a) and (b) to state the broad purpose of these new CMP authorities.
• In § 1003.101, Definitions, we are adding a definition for the term “transitional assistance,” consistent with the definition in 42 CFR 403.802.
• In § 1003.102, Basis for CMPs and assessments, we are adding new paragraphs (b)(17), (b)(18) and (b)(19) to cross-reference the implementing CMS regulations and the OIG's authority to impose penalties for violations.
• In § 1003.103, Amount of penalty, we are adding a new paragraph (k) to address the $10,000 maximum penalty amounts for each of these violations.
The OIG specifically seeks public comments on the possible inclusion of specific mitigating and aggravating factors to be considered in determining penalty amounts.
We note that in addition to the CMPs set forth above, a card sponsor's misuse of the Medicare name or emblem may subject them to CMPs in accordance with 42 U.S.C. 1320b-10 and the OIG regulations at § 1003.102(b)(7), which prohibit the misuse of the Medicare name and emblem. In general, in accordance with the statute and the implementing regulations, the OIG may impose penalties on any person who misuses the term “Medicare,” or other names associated with DHHS in any item constituting a communication in a manner which the person knows or should know gives the false impression that the item is approved, endorsed, or authorized by the Department. Violators are subject to fines of up to $5,000 per violation or, in the case of a broadcast or telecast violation, $25,000.
We have examined the impacts of this proposed rule as required by Executive Order 12866, the Regulatory Flexibility Act (RFA) of 1980, the Unfunded Mandates Reform Act of 1995, and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulations are necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). A regulatory impact analysis must be prepared for major rules with economically significant effects ($100 million or more in any given year). This is not a major rule as defined at 5 U.S.C. 804(2), and it is not economically significant since it would not have a significant effect on program expenditures and there would be no additional substantive cost to implement the resulting provisions. The OIG has significant experience in enforcing CMPs for a wide variety of violations and fraudulent conduct. Over the past three fiscal years (FYs), total CMPs levied by the OIG for various violations and fraudulent conduct has averaged about $2.2 million annually ($1.1 million in FY 2001; $2.4 million in FY 2002; and $3.1 million in FY 2003). In addition, the revisions to 42 CFR part 1003 set forth in this rule are designed to further clarify statutory requirements, and hence the economic effect of these regulatory provisions should impact only those limited few endorsed sponsors that would perhaps engage in prohibited behavior in violation of the statute. Given the OIG's enforcement history and the nature of the entities subject to CMPs, we do not believe that these regulations will result in a significant economic impact or have an appreciable effect on the economy or on Federal or State expenditures.
The RFA, and the Small Business Regulatory Enforcement and Fairness Act of 1996, which amended the RFA, requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most providers are considered to be small entities by having revenues of $6 million to $29 million or less in any one year. For purposes of the RFA, most physicians and suppliers are considered to be small entities. In addition, section 1102(b) of the Social Security Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural providers. This analysis must conform to the provisions of section 604 of the RFA.
Because of the requirements to be an endorsed sponsor, we anticipate that few, if any, endorsed sponsors will be small entities and none will be rural providers. However, even if some sponsored entities are small entities, we believe that the aggregate economic impact of this rulemaking is minimal since it is the nature of the conduct and not the size or type of the entity that would result in a violation of the statute and the regulations. As a result, we have concluded that this rulemaking rule should not have a significant impact on the operations of a substantial number of small or rural providers, and that a regulatory flexibility analysis is not required for this rulemaking.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditure in any one year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. As indicated, these proposed revisions comport with congressional and statutory intent and clarify the Department's legal authorities against those who defraud or otherwise act improperly against the Federal and State health care programs. As a result, we believe that there are no significant expenditures required by these revisions that would impose any mandates on State, local, or tribal governments, or the private sector that will result in an expenditure of $110 million or more (adjusted for inflation) in any given year, and that a full analysis under the Unfunded Mandates Reform Act is not necessary.
Executive Order 13132, Federalism, establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct requirements or costs on State and local governments, preempts State law, or
The Office of Management and Budget (OMB) has reviewed this final rule in accordance with Executive Order 12866.
The provisions of this rulemaking impose no express new reporting or recordkeeping requirements on health care providers or endorsed sponsors.
Comments will be available for public inspection beginning on June 2, 2004, in Room 5518 of the Office of Inspector General at 330 Independence Avenue, SW., Washington, DC, on Monday and through Friday of each week from 8 a.m. to 4 p.m., (202) 619-0089. Because of the large number of comments we normally receive on regulations, we cannot acknowledge or respond to comments individually. However, we will consider all timely and appropriate comments when developing any revised final rulemaking.
We ordinarily publish a proposed rule in the
This rulemaking provides for a 60-day public comment period.
Administrative practice and procedure, Fraud, Grant programs—health, Health facilities, Health professions, Maternal and child health, Medicaid, Medicare, Penalties, Social security.
42 U.S.C. 262a, 1302, 1320-7, 1320a-7a, 1320b-10, 1395u(j), 1395u(k), 1395cc(j), 1395w-141(i)(3), 1395dd(d)(1), 1395mm, 1395nn(g), 1395ss(d), 1396b(m), 11131(c), and 11137(b)(2).
(1) Provides for the imposition of civil money penalties and, as applicable, assessments against persons who—
(xv) Violate the Federal health care programs' anti-kickback statute as set forth in section 1128B of the Act;
(xvi) Violate the provisions of part 73 of this title, implementing section 351A(b) and (c) of the Public Health Service Act, with respect to the possession and use within the United States, receipt from outside the United States, and transfer within the United States, of select agents and toxins in use, or transfer of listed biological agents and toxins; or
(xvii) Violate the provisions of part 403, subpart H of this title, implementing the Medicare prescription drug discount card and transitional assistance program, by misleading or defrauding program beneficiaries, by overcharging a discount program enrollee, or by misusing transitional assistance funds.
For purposes of this part:
(b) The OIG may impose a penalty and, where authorized, an assessment against any person (including an insurance company in the case of paragraphs (b)(5) and (b)(6) of this section) whom it determines in accordance with this part—
(17) Is an endorsed sponsor under the Medicare prescription drug discount card program who knowingly misrepresented or falsified information in outreach material or comparable material provided to a program enrollee or other person.
(18) Is an endorsed sponsor under the Medicare prescription drug discount card program who knowingly charged a program enrollee in violation of the terms of the endorsement contract.
(19) Is an endorsed sponsor under the Medicare prescription drug discount card program who knowingly used transitional assistance funds of any program enrollee in any manner that is inconsistent with the purpose of the transitional assistance program.
(m) For violations of section 1860D-31 of the Act and 42 CFR part 403, subpart H, regarding the misleading or defrauding of program beneficiaries, or the misuse of transitional assistance funds, the OIG may impose a penalty of not more than $10,000 for each individual violation.
Federal Motor Carrier Safety Administration, (FMCSA); DOT.
Final rule; correction.
The Federal Motor Carrier Safety Administration published in the
Effective on June 1, 2004.
Mr. Robert Redmond, Office of Safety Programs, (202) 366-9579, Federal Motor Carrier Safety Administration, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590. Office hours are from 8:30 a.m. to 5 p.m., e.s.t., Monday through Friday, except Federal holidays.
The FMCSA published two documents in the
The discussion of CDL endorsements under § 383.93(b), which occurs in the preamble of the March 30 final rule, includes obsolete information about the hazardous materials endorsement and omits the school bus endorsement. The agency revised § 383.93(b) in an interim final rule titled
In accordance with the CMVSA, all drivers of commercial motor vehicles must possess a valid CDL in order to be properly qualified to operate the vehicle(s) they drive. In addition to passing the CDL knowledge and skills tests required for the basic vehicle group, all persons who operate or expect to operate any of the following vehicles, which have special handling characteristics, must obtain endorsements under 49 CFR 383.93(b):
(a) Double/triple trailers;
(b) Passenger vehicles;
(c) Tank vehicles;
(d) Vehicles required to be placarded for hazardous materials.
In accordance with the CMVSA, all drivers of commercial motor vehicles must possess a valid CDL in order to be properly qualified to operate the vehicle(s) they drive. In addition to passing the CDL knowledge and skills tests required for the basic vehicle group, 49 CFR 383.93(b) requires an operator to obtain State-issued endorsements to his/her CDL to operate commercial motor vehicles which are:
(1) Double/triple trailers;
(2) Passenger vehicles;
(3) Tank vehicles;
(4) Used to transport hazardous materials as defined in § 383.5, or
(5) School buses.
The information on those endorsements for which a driver must pass a skills test excludes the school bus endorsement. On page 16723, in the first column, in paragraph 2, in the second full paragraph, the second sentence reads:
To obtain a passenger endorsement, the driver also must pass a skills test.
It should read:
To obtain a passenger or school bus endorsement, the driver also must pass a skills test.
These preamble errors do not require a correction to the regulatory text.
In rule FR Doc. 04-6794 published on March 30, 2004, (69 FR 16722) make the following corrections:
1. On page 16727, in the third column, in paragraph 3, in the seventh line, “391.53” is corrected to read “391.55”.
49 U.S.C. 322, 504, 508, 31133, 31136 and 31502; Sec. 4007(b) of Pub. L. 102-240 (105 Stat. 2152); Sec. 114, Pub. L. 103-311 (108 Stat. 1673, 1677); and 49 CFR 1.73”.
Forest Service, USDA; Fish and Wildlife Service, Interior.
Seasonal adjustment.
This provides notice of the Federal Subsistence Board's action in the Stikine River to provide for a subsistence harvest opportunity. These actions provide an exception to the Subsistence Management Regulations for Public Lands in Alaska, published in the
The action for the Stikine River sockeye fishery described in this document is effective July 1, 2004, through July 31, 2004.
Thomas H. Boyd, Office of Subsistence Management, U.S. Fish and Wildlife Service, telephone (907) 786-3888. For questions specific to National Forest System lands, contact Steve Kessler, Subsistence Program Leader, USDA—Forest Service, Alaska Region, telephone (907) 786-3592.
Title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126) requires that the Secretary of the Interior and the Secretary of Agriculture (Secretaries) implement a joint program to grant a preference for subsistence uses of fish and wildlife resources on public lands in Alaska, unless the State of Alaska enacts and implements laws of general applicability that are consistent with ANILCA and that provide for the subsistence definition, preference, and participation specified in Sections 803, 804, and 805 of ANILCA. In December 1989, the Alaska Supreme Court ruled that the rural preference in the State subsistence statute violated the Alaska Constitution and, therefore, negated State compliance with ANILCA.
The Department of the Interior and the Department of Agriculture (Departments) assumed, on July 1, 1990, responsibility for implementation of Title VIII of ANILCA on public lands. The Departments administer Title VIII through regulations at Title 50 Part 100 and Title 36 Part 242 of the Code of Federal Regulations (CFR). Consistent with Subparts A, B, and C of these regulations, as revised January 8, 1999 (64 FR 1276), the Departments established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board's composition includes a Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture; the Alaska Regional Director, U.S. Fish and Wildlife Service; the Alaska Regional Director, National Park Service; the Alaska State Director, Bureau of Land Management; the Alaska Regional Director, Bureau of Indian Affairs; and the Alaska Regional Forester, USDA Forest Service. Through the Board, these agencies participate in the development of regulations for Subparts A, B, and C, which establish the program structure and determine which Alaska residents are eligible to take specific species for subsistence uses, and the annual Subpart D regulations, which establish seasons, harvest limits, and methods and means for subsistence take of species in specific areas. Subpart D regulations for the 2003 fishing seasons, harvest limits, and methods and means were published on February 3, 2004 (69 FR 5018). Because this rule relates to public lands managed by an agency or agencies in both the Departments of Agriculture and the Interior, identical closures and adjustments would apply to 36 CFR part 242 and 50 CFR part 100.
The Alaska Department of Fish and Game (ADF&G), under the direction of the Alaska Board of Fisheries (BOF), manages sport, commercial, personal use, and State subsistence harvest on all lands and waters throughout Alaska. However, on Federal lands and waters, the Federal Subsistence Board implements a subsistence priority for rural residents as provided by Title VIII of ANILCA. In providing this priority, the Board may, when necessary, preempt State harvest regulations for fish or wildlife on Federal lands and waters.
This action is necessary to provide opportunity for subsistence harvest in the Stikine River. This action is authorized and in accordance with 50 CFR 100.19(d-e) and 36 CFR 242.19(d-e).
In December 2003, the Board adopted regulatory proposals establishing a new Federal subsistence sockeye fishery in the Stikine River. This fishery is open to Federally qualified users having customary and traditional use of salmon. Notification of and implementation of this action were delayed pending coordination with the Pacific Salmon Commission.
The following stipulations will apply to this new fishery:
In the mainstem of the Stikine River:
(A) You may take sockeye salmon under the authority of a Federal subsistence fishing permit issued by the USDA Forest Service for the Stikine River. Each Stikine River permit will be issued to a household and will be valid for 15 days. Permits may be revalidated for additional 15-day periods.
(B) The total annual guideline harvest level for the Stikine River fishery is 600 sockeye salmon.
(C) You may take sockeye salmon from July 1 through July 31. The annual limit is 40 sockeye salmon per household. Only dipnets, spears, gaffs, rod and reel, beach seine, or gillnet not exceeding 15 fathoms in length with mesh size no larger than 5
(D) You may retain other salmon taken incidentally by gear operated under terms of this permit. The incidentally taken salmon must be reported on your permit calendar.
The Board finds that additional public notice and comment requirements under the Administrative Procedure Act (APA) for these adjustments are impracticable, unnecessary, and contrary to the public interest. Lack of appropriate and immediate conservation measures could adversely impact subsistence opportunities for rural Alaskans, and would generally fail to serve the overall public interest. Therefore, the Board finds good cause pursuant to 5 U.S.C. 553(b)(3)(B) to waive additional public notice and comment procedures prior to implementation of this action and pursuant to 5 U.S.C. 553(d)(3) to make this action effective as indicated in the
A Final Environmental Impact Statement (FEIS) was published on February 28, 1992, and a Record of Decision on Subsistence Management for Federal Public Lands in Alaska (ROD) was signed April 6, 1992. The
The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. A Section 810 analysis was completed as part of the FEIS process. The final Section 810 analysis determination appeared in the April 6, 1992, ROD, which concluded that the Federal Subsistence Management Program, under Alternative IV, with an annual process for setting hunting and fishing regulations, may have some local impacts on subsistence uses, but the program is not likely to significantly restrict subsistence uses.
The information collection requirements contained in this rule have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The action has been exempted from OMB review under Executive Order 12866.
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601
Title VIII of ANILCA requires the Secretaries to administer a subsistence preference on public lands. The scope of this program is limited by definition to certain public lands. Likewise, the action has no potential private property takings implications as defined by Executive Order 12630.
The Service has determined and certifies pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502
The Service has determined that the action meets the applicable standards provided in Sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform.
In accordance with Executive Order 13132, the action does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands. Cooperative salmon run assessment efforts with ADF&G will continue.
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and 512 DM 2, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no effects. The Bureau of Indian Affairs is a participating agency in this rulemaking.
On May 18, 2001, the President issued Executive Order 13211 on regulations that significantly affect energy supply, distribution, or use. This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. As this action is not expected to significantly affect energy supply, distribution, or use, it is not a significant energy action and no Statement of Energy Effects is required.
William Knauer drafted this document under the guidance of Thomas H. Boyd, of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Taylor Brelsford, Alaska State Office, Bureau of Land Management; Rod Simmons, Alaska Regional Office, U.S. Fish and Wildlife Service; Bob Gerhard, Alaska Regional Office, National Park Service; Dr. Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs; and Steve Kessler, USDA-Forest Service, provided additional guidance.
16 U.S.C. 3, 472, 551, 668dd, 3101-3126; 18 U.S.C. 3551-3586; 43 U.S.C. 1733.
Nuclear Regulatory Commission.
Petition for rulemaking: denial.
The Nuclear Regulatory Commission (NRC) is denying a petition for rulemaking (PRM-30-62) submitted by the Union of Concerned Scientists (UCS). The petition requested that the NRC amend its employee protection regulations to require licensees to provide training to their management to make certain that their management is aware of its obligations under these regulations. Subsequent to submission of PRM-30-62, an event occurred which altered the processing for disposition of the Petition. On August 3, 2000, the Commission announced in the
Copies of the petition for rulemaking, the public comments received, and NRC's letter of denial to the petitioner may be examined, and copied for a fee at the NRC Public Document Room, Room O1F23, 11555 Rockville Pike, Rockville, MD. These documents also may be viewed and downloaded electronically via the rulemaking website.
The NRC maintains an Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. These documents may be accessed through the NRC's Public Electronic Reading Room on the Internet at
James R. Firth, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Telephone (301) 415-6628, e-mail
The petition, assigned Docket No. PRM-30-62, was filed with the NRC by the Union of Concerned Scientists (UCS) on August 13, 1999. Notice of receipt of the petition and request for public comment was published in the
Presently, the Commission's regulations prohibiting discrimination against employees are found at 10 CFR 30.7, 40.7, 50.7, 60.9, 61.9, 70.7, 72.10, and 76.7. These regulations provide notice that discrimination against an employee for engaging in protected activities as defined in Section 211 of the Energy Reorganization Act (ERA) is prohibited; and that civil penalties and other enforcement action may be taken against licensees for violations of these regulations by licensees or by their contractors or subcontractors. The petition noted that between March 1996 and August 1999, the NRC took escalated enforcement action 111 times against individuals. Within this period, the NRC took 23 enforcement actions against licensees for discriminating against nuclear workers who raised safety concerns. The petition states that despite identifying “who” in these 23 cases was responsible for violating the Federal regulations, the NRC took enforcement action against individuals on only four occasions.
In 1991, the Commission promulgated its deliberate misconduct regulations (
On October 27, 1999, the NRC published a notice of receipt of a petition for rulemaking (64 FR 57785), filed by UCS on August 13, 1999, inviting interested persons to submit comments. The comment period closed on January 10, 2000. The NRC received 153 comment letters that included comments from several utilities, a professional association, a quasi-government agency, several universities, a number of private companies, a law firm, and numerous public citizens. The majority of the comment letters received, 146, favoring the petition voiced the same opinions as those provided in an “action alert” from the UCS to its subscribers asking them to contact the NRC to support the petition. Support for the petition focused on two concerns: First, the asserted inadequacy of NRC's regulations to protect nuclear plant workers who raise safety issues from discrimination or retaliation; and second, the failure of the NRC to enforce its employee protection regulations based on the rationale that individuals who discriminate against whistleblowers are not aware that their actions are illegal.
There were seven comment letters opposed to the petition. Reasons for opposition to the petition included:
(1) One commenter believed the petition is inconsistent with NRC policy, which does not include promulgation of a training requirement for each substantive regulation with which licensees must comply; and therefore, training should not be the subject of Federal regulation. It was noted that licensees already offer voluntary employee training to their managers on a wide range of regulatory issues (including employee protection) to maintain a Safety Conscious Work Environment (SCWE). Therefore, contrary to the petition, the commenter asserted that licensees already train their management in an effort to provide individual managers with a basic understanding of the laws prohibiting discrimination, including offering practical ways to address employee concerns. With respect to the content and type of training needed to respond to the petition, several commenters felt licensees need flexibility to identify the scope and substance of the training in order to fit the needs of employees at their individual facilities.
(2) One commenter believed the petition failed to provide adequate justification to support the requested agency action because it failed to explain, among other things, why existing mechanisms to ensure compliance with the employee protection regulations, such as in 10 CFR 50.7, including enforcement actions against licensees, are not sufficient to deter discriminatory behavior or encourage corrective action. In this regard, it was noted that an explicit requirement for training will not necessarily guarantee compliance with employee protection requirements or increase individual accountability because, in most cases, it is difficult to prove that adverse actions taken by licensee management were deliberate. To the commenter, the petitioner's inference that every employee protection violation necessarily includes a finding of deliberate misconduct against individuals as defined for example in 10 CFR 50.5 is overstated. The commenter believes that many cases involving alleged violations of the employee protection regulations result from good faith attempts by individual licensee managers to deal with difficult situations and not from deliberate attempts to discriminate against nuclear workers. The petitioner's assertion that there are frequent violations of the employee protection regulations was not supported by the facts provided in the petition in the commenter's view. However, the commenter noted that assuming the petitioner was correct, the fact there were 23 enforcement actions against licensees for violations of, in this case, 10 CFR 50.7 requirements over a 3 year period from March 1996 through August 1999 (less than 8 violations per year) does not demonstrate a widespread and pervasive industry problem that warrants a rule requiring employee protection training. Such a solution for issues involving human interactions and personalities will not solve all perceived problems of discrimination, and arguing that formal training will overcome this dilemma is simplistic.
(3) One commenter noted the petition appears designed only to encourage additional punitive action against individuals by the NRC when discrimination findings are made. However, the commenter asserted that it was noted in the past (with no specific reference to where or when) that, in most cases, enforcement actions citing discrimination typically are based on circumstantial evidence and are often difficult to prove.
(4) Several commenters noted that Section 211 of the ERA and the employee protection regulations such as in 10 CFR 50.7, Employee Protection, already set out the requirements that licensees and their contractors must meet to ensure that employees are free to raise safety concerns without fear of retaliation.
Subsequent to receipt of the petition, an event occurred which altered the processing and schedule for disposition of PRM-30-62. On April 14, 2000, the NRC approved the establishment of a working group to evaluate the NRC processes for handling discrimination cases. The purpose of the working group was to: (1) Evaluate the NRC's handling of matters covered by its employee protection regulations; (2) propose recommendations for improvement of the NRC's process for handling such matters; (3) ensure that the application of the NRC enforcement process was consistent with the objective of promoting an environment where workers are free to raise safety concerns in accordance with the NRC's employee protection standards; and (4) promote active and frequent involvement of internal and external stakeholders in the development of recommendations for future changes to the process. On August 3, 2000, a notice was published in the
The DTG submitted a report to the Commission with its findings and recommendations on December 12, 2002. The report was provided as an attachment to a paper sent to the Commission, SECY-02-0166, and was entitled, “Policy Options and Recommendations for Revising the NRC's Process for Handling Discrimination Issues.”
On March 26, 2003, the Commission issued a Staff Requirements Memorandum (SRM) on SECY-02-0166 approving the recommendations of the DTG, as revised by the SMRT and subject to the specific comments provided in the SRM. The SRM also stated that proposed guidance to licensees should be developed and
The DTG concluded that the petition would not correct the problem that was the basis for the petition. The fact that a licensee manager may have received training on the discrimination regulations does not constitute enough evidence to conclude that an adverse action taken was deliberate. Consistent with the Commission's direction in the SRM of March 26, 2003, regulatory guidance will be developed and made available for licensees' use that will consider those attributes that constitute an effective SCWE program. Developing such guidance is consistent with NRC's performance-based approach, which allows licensees flexibility to develop programs that are best suited for them.
The NRC is denying the petition for the following reasons:
1. As discussed above, on March 26, 2003, the Commission issued a Staff Requirements Memorandum (SRM) on SECY-02-0166 approving the recommendations of the DTG, as revised by the SMRT and subject to the specific comments provided in the SRM. The SRM also stated that proposed guidance to licensees should be developed and should emphasize training of licensee management as to its obligations under the employee protection regulations and provide information as to the recommended content of such training. Although the NRC believes the current employee protection regulations are adequate, clear, and sufficiently flexible to accommodate the concerns in PRM-30-62, the Commission believes that such guidance would further the NRC policy statement related to an SCWE.
2. The NRC has concluded that the petition would not correct the problem that was the basis for the petition. The fact that a licensee manager may have received training on the discrimination regulations does not constitute enough evidence to conclude that an adverse action taken was deliberate. Consistent with the Commission's direction in the SRM of March 26, 2003, regulatory guidance will be developed and made available for licensees' use that will consider those attributes that constitute an effective SCWE program. Developing such guidance is consistent with NRC's performance-based approach, which also allows licensees flexibility to develop programs that are best suited for them.
In sum, no new information has been provided by the petitioner that supports the need to undertake rulemaking action to amend the requirements of the employee protection regulations. The goals of the petition can be achieved through the development of regulatory guidance in conjunction with licensees and stakeholders and communicating this guidance to their managers and employees. Additional rulemaking would impose unnecessary regulatory burden on licensees and does not appear to be warranted for the adequate protection of the public health and safety and the common defense and security.
For the reasons cited in this document, the NRC denies this petition.
For the Nuclear Regulatory Commission.
Board of Governors of the Federal Reserve System.
Notice of proposed rulemaking.
The Board of Governors of the Federal Reserve System (Board) proposes to allow the continued inclusion of outstanding and prospective issuances of trust preferred securities in the tier 1 capital of bank holding companies, subject to stricter quantitative limits and qualitative standards. The Board also proposes to revise the quantitative limits applied to the aggregate amount of cumulative perpetual preferred stock, trust preferred securities, and minority interests in the equity accounts of certain consolidated subsidiaries (collectively, restricted core capital elements) included in the tier 1 capital of bank holding companies. The quantitative limits would become effective after a three-year transition period. In addition, the Board is proposing to revise the qualitative standards for capital instruments included in regulatory capital consistent with longstanding Board policies. These revisions are being proposed to address supervisory concerns, competitive equity considerations, and changes in generally accepted accounting principles. The proposal would have the effect of strengthening the definition of regulatory capital for bank holding companies.
Comments must be received by no later than July 11, 2004.
You may submit comments, identified by Docket No. R-1193, by any of the following methods:
• Agency Web Site:
• Federal eRulemaking Portal:
• E-mail:
• FAX: 202/452-3819 or 202/452-3102.
• Mail: Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551.
All public comments are available from the Board's Web site at
Norah Barger, Associate Director (202/452-2402 or
The Board's current risk-based capital guidelines, which are based on the 1988
The Federal Reserve's capital guidelines allow minority interest in the equity accounts of consolidated subsidiaries to be included in a BHC's tier 1 capital because it represents capital support from third-party investors in a subsidiary owned by a BHC and consolidated on its balance sheet. Nonetheless, minority interest does not constitute equity on the BHC's consolidated balance sheet because typically minority interest is available to absorb losses only within the subsidiary that issues it and is not generally available to absorb losses in the broader consolidated banking organization. Although the Board's capital rules state that voting common stock generally should be the dominant form of tier 1 capital, minority interest is not subject to a specific numeric limit. Minority interest in the form of cumulative preferred stock, however, generally has been subject to the same limits as cumulative preferred stock issued directly by a BHC.
In 1996, the Board explicitly approved the inclusion in BHCs' tier 1 capital of minority interest in the form of trust preferred securities. Trust preferred securities are undated cumulative preferred securities issued out of a special purpose entity (SPE), usually in the form of a trust, in which a BHC owns all of the common securities. The trust preferred securities allow for at least twenty consecutive quarters of dividend deferral, after which the investors have the right to take hold of the sole asset in the trust, a deeply subordinated note issued by the BHC. The note, which is subordinated to all obligations of the BHC other than its common and preferred stock, has terms that generally mirror those of the trust preferred securities, except that the subordinated debt has a fixed maturity of at least 30 years. Trust preferred securities are considered tax-efficient because, for tax purposes, payments on the instrument are deductible from the issuer's income, unlike dividends on directly issued preferred stock, which must be paid from after-tax earnings. Because trust preferred securities are cumulative, they currently are limited, together with directly issued cumulative perpetual preferred stock and other minority interest in the form of cumulative preferred stock, to no more than 25 percent of a BHC's core capital elements.
The Board's decision to include trust preferred securities in tier 1 capital was based on a number of factors in addition to its qualification as minority interest under generally accepted accounting principles (GAAP). In terms of features, trust preferred securities have long lives that approach economic perpetuity and deferral rights that, at twenty consecutive quarters, approach economically indefinite deferral. With regard to loss absorbency, trust preferred securities, like other minority interest included in tier 1 capital, cannot deter technical insolvency because they are not represented as equity on the BHC's consolidated balance sheet. Unlike minority interest in the form of equity in a typical operating subsidiary, however, trust preferred securities are available to absorb losses more broadly in the consolidated banking organization. Its availability for this purpose stems from the fact that the sole asset of the issuing subsidiary is a note from the parent BHC, which constitutes a deeply subordinated claim on the consolidated BHC. Thus, if a BHC defers payments on trust preferred securities, the cash flow preserved can be used anywhere within the consolidated organization. Dividend deferrals on equity in the typical operating subsidiary, on the other hand, absorb losses and preserve cash flow only within the subsidiary; the cash that is freed up cannot be used elsewhere in the consolidated organization.
The Board also considered competitive equity factors in making its decision to include trust preferred securities in tier 1 capital. A number of non-BHC companies, including domestic and non-domestic financial institutions, had issued trust preferred securities or similar tax-efficient instruments. Thus, these companies were able to enjoy a lower after-tax cost of capital than BHCs that compete in some of the same markets. Since 1996, approximately 820 BHCs have issued over $77 billion of trust preferred securities, the popularity of which stems in large part from its tax-efficiency.
Trust preferred securities are not the only tax-efficient source of tier 1 capital, although BHCs tend to favor them because they are relatively simple, standard, and well-understood instruments that are also issued by non-banking corporations. One alternative tax-efficient instrument that is included in the tier 1 capital of banks and BHCs as minority interest in the form of perpetual preferred securities is referred to as real estate investment trust (REIT) preferred securities. These securities, which usually are noncumulative, are issued by an SPE that qualifies as a REIT for tax purposes. Proceeds from the issuance of the REIT's common securities, which are wholly owned by the sponsoring banking organization, and preferred securities, which are owned by third-party investors, are used to buy real estate-related assets. Because the source of the assets typically is a subsidiary bank of the sponsoring banking organization, REIT preferred securities are usually issued by an SPE that is a subsidiary of the bank, rather than of the BHC. Statutorily, dividends on REIT preferred securities may be deducted from the taxable income of the banking organization if the assets are related to real estate and certain other criteria are met, including the distribution of 95 percent of the REIT's income in dividends to investors. A key prudential condition for REIT preferred securities to be included in tier 1 capital is that they must have an exchange feature providing for an exchange of the securities for an equal amount of directly-issued perpetual preferred securities of the sponsoring bank with identical terms upon the occurrence of certain events, including the event that the sponsoring bank becomes undercapitalized or insolvent. This feature is necessary for regulatory capital inclusion of the REIT preferred securities because they are effectively secured by the assets of the SPE, which often are high quality and very liquid. The Federal Reserve, together with the other Federal banking agencies, limits the inclusion of REIT preferred securities to 25 percent of the sum of a banking organization's core capital elements.
A few banking organizations have used other asset-driven structures that are similar to REIT preferred securities to issue tier 1 preferred securities that are included in minority interest and are subject to the same exchange provision as REIT preferred securities. Asset-
Overall, the supervisory experience with trust preferred securities has been positive. The instrument has performed much as expected in troubled banking organizations; in numerous instances, BHCs in deteriorating financial condition have deferred dividends on trust preferred securities to preserve cash flow. In addition, trust preferred securities have proven to be a useful source of capital funding for BHCs, which often downstream the proceeds in the form of common stock to subsidiary banks, thereby strengthening the banks' capital bases. For example, in the months following the events of September 11, 2001, a period when issuance of most other capital instruments was extremely difficult, BHCs were able to execute large issuances of trust preferred securities to retail investors, demonstrating the financial flexibility offered by this instrument.
Around 2000, the first securities backed by a pool of trust preferred securities from multiple issuers came to the market. Pooling arrangements, which have become increasingly popular and typically involve thirty or so separate issuers, have made the issuance of trust preferred securities possible for even very small BHCs, most of which had not previously enjoyed capital market access for tier 1 instruments. Although this development has helped level the competitive playing field between small and large banking organizations with regard to capital funding sources, it also has given rise to concerns. Evidence supports the view that, in some instances, BHCs that participate in poolings have over-relied on trust preferred securities within their capital structures. As a result, for some time the Federal Reserve has been considering ways to limit undue reliance on these instruments.
Excessive reliance generally has not been a concern at large banking organizations because they are subject to much more rigorous market discipline, which works to limit the amount of trust preferred securities a BHC may issue. Moreover, a 1998 agreement among the G-10 banking supervisors that participate in deliberations of the Basel Committee on Banking Supervision called for the Federal Reserve's best efforts to limit the issuance by internationally active banking organizations of innovative instruments'a category that would include trust preferred securities'to 15 percent of their tier 1 capital. Although the Federal Reserve has informally encouraged BHCs to comply with this standard, the Federal Reserve's commitment to the standard has not been formalized.
As the Federal Reserve was working through various issues related to trust preferred securities and alternative tax-efficient instruments, the accounting treatment of trust preferred securities was revised, adding yet another factor to be taken into account in the reconsideration of the regulatory capital treatment of these instruments. In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46,
Consistent with longstanding Board direction, BHCs are required to follow GAAP for regulatory reporting purposes. Thus, BHCs should, for both accounting and regulatory reporting purposes, determine the appropriate application of GAAP (including FIN 46 and FIN 46R) to their trusts issuing trust preferred securities. Accordingly, there should be no substantive difference in the treatment of such trusts for purposes of regulatory reporting and GAAP accounting.
The change in the GAAP accounting of a capital instrument does not necessarily change the regulatory capital treatment of that instrument. Although GAAP informs the definition of regulatory capital, the Federal Reserve is not bound by GAAP accounting in its definition of tier 1 or tier 2 capital because these are regulatory constructs designed to ensure the safety and soundness of banking organizations, not accounting designations designed to ensure the transparency of financial statements. The current definition of tier 1 capital differs from GAAP equity in a number of ways that the Federal Reserve has determined are consistent with its responsibility for ensuring the soundness of the capital bases of banking organizations under its supervision. These differences do not constitute differences between regulatory reporting and GAAP accounting requirements, but rather are differences only between GAAP equity and the concept of tier 1 capital as used in the Board's regulatory capital requirements for banking organizations.
In proposing a revised capital treatment of trust preferred securities, the Board has taken into account a number of factors. In addition to its supervisory experience and the revised accounting treatment, the Board has considered domestic and international competitive equity issues and supervisory concerns with alternative tax-efficient instruments. In balancing all these considerations, the Board has decided to propose permitting BHCs to continue to include outstanding and prospective issuances of trust preferred securities in their tier 1 capital, subject to stricter quantitative limits, which would apply to a broader range of capital instruments issued by BHCs.
In the Board's view, experience with trust preferred securities has demonstrated that they can play a useful role in providing financial support to banking organizations in deteriorating
In reviewing existing alternative tax-efficient tier 1 capital instruments available to BHCs, the Board has concluded that in several ways trust preferred securities are a superior instrument to these alternatives. In this regard, trust preferred securities are available to absorb losses throughout the BHC and do not affect the BHC's liquidity position. Trust preferred securities are relatively simple, standardized, and well-understood instruments that are widely issued by both corporate and banking organizations. Moreover, issuance of trust preferred securities tends to be broad and transparent and, thus, easy for the market to track. In the Board's view, these reasons support maintaining trust preferred securities as a component of tier 1 capital within limits that should likewise be applied to other capital instruments that do not provide the same level of capital support as common equity and noncumulative perpetual preferred stock.
Accordingly, in formulating quantitative limits for trust preferred securities, the Board has decided to apply them to a range of other instruments. Since 1989, cumulative perpetual preferred stock has been limited to 25 percent of the sum of core capital elements. In 1996, trust preferred was grouped together with other cumulative preferred stock for the purpose of the 25 percent limit. The Board is proposing to continue subjecting cumulative perpetual preferred stock and trust preferred securities to a common limit, while requiring other capital elements in the form of minority interest in the equity accounts of consolidated subsidiaries to be subject to that same limit. In this regard, the Board is proposing to distinguish among three types of qualifying minority interest. The aim of making this distinction is to allow common and preferred equity instruments issued directly by a consolidated U.S. depository institution or foreign bank subsidiary of a BHC to receive a treatment parallel to similar instruments issued directly by a BHC, while placing additional restrictions on minority interest in the equity accounts of other subsidiaries, whether the subsidiary is at the bank or the BHC level.
Thus, the Board is proposing that minority interest related to qualifying common or noncumulative perpetual preferred stock directly issued by a consolidated U.S. depository institution or foreign bank subsidiary (Class A minority interest) would not be subject to formal limitation within tier 1 capital. Under the proposal, minority interest related to qualifying cumulative perpetual preferred stock directly issued by a consolidated U.S. depository institution or foreign bank subsidiary (Class B minority interest) would be a restricted core capital element subject to limitation within tier 1 capital, but not subject to a tier 2 capital sublimit. Finally, minority interest in the form of qualifying common stockholders' equity or qualifying perpetual preferred stock (and related surplus) in a consolidated subsidiary that is neither a U.S. depository institution nor a foreign bank (Class C minority interest) would be eligible for inclusion in tier 1 capital as a restricted core capital element. In addition, as discussed below, Class C minority interest, which would include REIT preferred securities and other asset-driven capital instruments whether issued directly by a nonbank subsidiary of the BHC or of a U.S. depository institution or foreign bank subsidiary of the BHC, is subject to a tier 2 sublimit.
As discussed above, minority interest in a typical operating subsidiary does not stave off technical insolvency or provide capital support for the broader consolidated organization. Minority interest in the equity accounts of a consolidated U.S. depository institution or foreign bank subsidiary, however, does absorb losses throughout the issuing U.S. depository institution or foreign bank and provides protection to depositors, whose deposit accounts are often government-insured. Further, a BHC generally is expected to support a subsidiary depository institution. Because of the special role that such minority interest plays in protecting subsidiary depository institutions, the Board is proposing a more favorable treatment for Class A and Class B minority interest within tier 1 capital than it is proposing for minority interest in the equity accounts of other consolidated subsidiaries, including subsidiaries of a consolidated U.S. depository institution or foreign bank subsidiary or a subsidiary of the parent BHC (Class C minority interest). The Board seeks views on the appropriateness of the distinction among types of minority interest and specifically seeks comment on the treatment of minority interest in a foreign bank subsidiary of a BHC.
The limit the Board is proposing for the aggregate amount of a BHC's cumulative perpetual preferred stock, trust preferred securities, Class B minority interest, and Class C minority interest (collectively referred to as restricted core capital elements) is 25 percent of core capital elements, net of goodwill. By netting goodwill from the calculation of the 25 percent limit, the Board is tightening the current 25 percent limit, which currently is determined on a basis that does not deduct goodwill. Deducting goodwill from core capital elements will help ensure that a BHC is not unduly leveraging its tangible equity to issue restricted core capital elements. The deduction of goodwill for the purpose of this limit is also consistent with the direction taken by the Basel Committee on Banking Supervision in its consultative paper on a new capital accord. The paper proposes that limits set for so-called innovative capital instruments within tier 1 capital be determined on a basis that deducts goodwill from the sum of core capital elements.
Qualifying cumulative perpetual preferred stock and Class B minority interest in excess of the 25 percent limit would be includable in tier 2 capital with no sublimit. To further guard against potential over-reliance on trust preferred securities and other non-equity elements within a BHC's capital structure, the Board is proposing that amounts of qualifying trust preferred securities and Class C minority interest in excess of the 25 percent limit be included in tier 2 capital but be limited, together with subordinated debt and limited-life preferred stock, to 50 percent of tier 1 capital. A BHC would be free to attribute its excess amounts of restricted core capital elements first to any qualifying cumulative perpetual preferred stock or to Class B minority interest, and second to qualifying trust
To help ensure comparability in capital structures among internationally active banking organizations, the Board is proposing to amend its capital guidelines to make explicit the Board's general expectation that internationally active BHCs limit the amount of restricted core capital elements to 15 percent of the sum of core capital elements, including restricted core capital elements, net of goodwill. The 15 percent limit for internationally active banking organizations is in line with the above-mentioned 1998 Basel agreement concerning innovative capital instruments. As indicated above, most internationally active banking organizations have long used the 15 percent limit as a guideline for their issuance of innovative instruments. For this purpose, an internationally active BHC is one that has significant activity in non-U.S. markets or that is considered a candidate for the Advanced Internal Ratings Based Approach under the proposals for a new Basel Accord. The Board seeks comment on whether the capital guidelines for BHCs should contain such an explicit expression of the Board's expectation for internationally active BHCs with respect to use of restricted core capital elements, should impose an explicit 15 percent limit on the use by internationally active BHCs of restricted core capital elements, or should include a more explicit definition of internationally active BHCs.
The proposal would provide a three-year transition period for BHCs to meet the new, stricter limitations within regulatory capital by proposing that the limits on restricted core capital elements become fully effective as of March 31, 2007. During the interim, BHCs with restricted core capital elements in excess of these limits must consult with the Federal Reserve on a plan for ensuring that the banking organization is not unduly relying upon these elements in its capital base and, where appropriate, for reducing such reliance. Until March 31, 2007, BHCs generally must comply with the current tier 1 capital limits. That is, BHCs generally should calculate their tier 1 capital on a basis that limits the aggregate amount of qualifying cumulative perpetual preferred stock and qualifying trust preferred securities to 25 percent of the sum of qualifying common stockholders' equity, qualifying noncumulative and cumulative perpetual preferred stock (including related surplus), qualifying minority interest in the equity accounts of consolidated subsidiaries, and qualifying trust preferred securities. Amounts of qualifying cumulative perpetual preferred stock and qualifying trust preferred securities in excess of this limit may be included in tier 2 capital.
The Board is also proposing to revise the capital guidelines to specify the criteria trust preferred securities must meet to be eligible for inclusion in tier 1 capital. Under these criteria, which the Board has broadly used since 1996, a BHC must consult with the Federal Reserve before issuing trust preferred securities. Such consultation would normally be undertaken with the BHC's District Reserve Bank. Qualifying trust preferred securities must be undated and provide for a minimum of twenty consecutive quarters of dividend deferral, as well as a call at the BHC's option commencing no later than ten years from issuance. The Board seeks comment on the continued requirement for a call option on trust preferred securities qualifying for inclusion in tier 1 capital. The criteria also specify that the sole asset of the trust must be a subordinated note issued by the BHC, which must have a minimum maturity of thirty years and must be subordinated to all other subordinated debt of the BHC. The terms of the subordinated note must conform to the requirements of the Board's subordinated debt policy statement, 12 CFR 250.166, although, consistent with the approved structure of these securities, the note may become due and payable upon default following the deferral of dividends for more than 20 consecutive quarters. Trust preferred securities issued before May 31, 2004 for which the underlying subordinated debt does not comply with 12 CFR 250.166 may continue to be included in tier 1 capital provided the noncomplying terms (i) have been commonly used by banking organizations, (ii) do not provide an unreasonably high degree of protection to the holder in circumstances other than bankruptcy, and (iii) do not effectively allow the holder in due course of the note to stand ahead of senior or subordinated debt holders in the event of bankruptcy. With regard to trust preferred securities issued by a BHC to a pool, the proposal sets forth the longstanding Board policy that the BHC may not purchase a security issued by that same pool. Where it does hold such a security (for example, through an acquisition of another banking organization), the notional amount of that security must be deducted from the amount of trust preferred securities qualifying for inclusion in regulatory capital.
The proposal also provides that in the last five years before the underlying subordinated note matures, the associated trust preferred securities must be treated as limited-life preferred stock. Thus, in the last five years of the life of the note, the outstanding amount of trust preferred securities will be excluded from tier 1 capital and included in tier 2 capital, subject, together with subordinated debt and other limited-life preferred stock, to a limit of 50 percent of tier 1 capital. During this period, the trust preferred securities will be amortized out of tier 2 capital by one-fifth of the original amount (less redemptions) each year and excluded totally from tier 2 capital during the last year of life of the underlying note.
To ensure that the overall framework for the definition of regulatory capital remains effective, the Board is proposing a number of revisions to set forth in the capital guidelines for BHCs longstanding policies with regard to the terms and features of qualifying capital instruments. The Board seeks comment on whether parallel revisions to the definition of regulatory capital for state member banks should be made in Regulation H.
The proposal notes that where a BHC has directly or indirectly funded the purchase of an instrument, the instrument generally is excluded from regulatory capital. This provision is not intended to capture unintentional, indirect funding of capital instruments but rather intentional arrangements that undermine the concept that instruments included in regulatory capital must be fully paid up. The proposal also clarifies that common stockholders' equity may not have terms or features that create investor preferences, and strengthens language on the need for voting common equity to be the dominant form of tier 1 capital. In addition, the proposal emphasizes the need for a BHC to have the unrestricted ability to waive preferred dividends and the general expectation of the Board that such dividends will be waived when a BHC is in weakened condition and clarifies the distinction between cumulative and noncumulative preferred stock. The proposal also sets forth the general exclusion from tier 1 capital of preferred instruments with dividend rate step-ups or so-called market value conversion features whereby the holder must or can convert the preferred instrument into common stock at the market price prevailing at the time of the conversion.
The Board also is considering clarifying either by rulemaking or through supervisory guidance the treatment of qualifying trust preferred securities issued by small BHCs (that is, BHCs with consolidated assets of $150 million or less) under the Small Bank Holding Company Policy Statement, 12 CFR Part 225 Appendix C (Small BHC Policy Statement), which generally exempts small BHCs from the Board's risk-based capital and leverage capital guidelines. One approach being considered by the Board is to generally treat the subordinated debt associated with trust preferred securities issued by small BHCs as debt for most purposes under the Small BHC Policy Statement (other than the 12-year debt reduction and 25-year debt retirement standards), except that an amount of subordinated debt up to 25 percent of a small BHC's GAAP total stockholders' equity, net of goodwill, would be considered as neither debt nor equity under the Small BHC Policy Statement. This approach would result in a treatment for trust preferred securities issued by BHCs subject to the Small BHC Policy Statement that would be more in line with the treatment of these securities that the Board is proposing for larger BHCs subject to the Federal Reserve's risk-based capital guidelines. The Board seeks comment on this approach and other approaches to revision of the Small BHC Policy Statement to ensure a fair and sound approach for small BHCs' issuances of trust preferred securities.
The Board is also proposing to delete tables and attachments in the risk-based capital standards for state member banks and BHCs that summarize the definition of capital, the risk categories, credit conversion factors, credit equivalent amount calculations, and transitional arrangements to remove unnecessary regulatory text. These tables and attachments have become outdated and unnecessary because the substance of these summaries is included in the main text of the risk-based capital standards. Furthermore, these summary tables and attachments were originally provided to assist banking organizations unfamiliar with the new framework during the transition period when the Board's risk-based capital requirements were initially implemented.
The Board welcomes comments on all aspects of this notice of proposed rulemaking.
Pursuant to section 605(b) of the Regulatory Flexibility Act, the Board has determined that this proposed rule would not have a significant impact on a substantial number of small entities in accordance with the spirit and purposes of the Regulatory Flexibility Act (5 U.S.C. 601
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1.), the Board reviewed the proposed rulemaking under the authority delegated to the Board by the Office of Management and Budget. No collections of information pursuant to the Paperwork Reduction Act are contained in the proposed rulemaking.
Section 722 of the Gramm-Leach-Bliley (GLB) Act requires the Board to use “plain language” in all proposed and final rules published after January 1, 2000. In light of this requirement, the Board has sought to present its proposed rule in a simple and straightforward manner. The Board invites comment on whether there are additional steps the Board could take to make its rule easier to understand.
Accounting, Agriculture, Banks, Banking, Confidential business information, Crime, Currency, Mortgages, Reporting and recordkeeping requirements, Securities.
Administrative practice and procedure, Banks, Banking, Holding companies, Reporting and recordkeeping requirements, Securities.
1. The authority citation of part 208 continues to read as follows:
12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1820(d)(9), 1823(j), 1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1831w, 1831x, 1835a, 1882, 2901-2907, 3105, 3310, 3331-3351, and 3906-3909; 15 U.S.C. 78b, 78l(b), 781(g), 781(i), 78o-4(c)(5), 78q, 78q-1, and 78w; 31 U.S.C. 5318, 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
2. In Appendix A to part 208, remove Attachments II, III, IV, V, and VI.
3. The authority citation for part 225 continues to read as follows:
12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 1843(c)(8), 1844(b). 1972(l), 3106, 3108, 3310, 3331-3351, 3907, and 3909; 15 U.S.C. 6801 and 6805.
4. In Appendix A to part 225, the following amendments are proposed:
a. In section II, designate the first three undesignated paragraphs as paragraphs (i), (ii), and (iii); and revise redesignated paragraphs (i), (ii) and (iii).
b. In section II.A.,
i. Revise the heading.
ii. Remove footnote 5.
c. Revise section II.A.1.
d. In section II.A.2.,
i. Revise the heading.
ii. Remove footnote 8.
iii. Redesignate footnotes 9 and 10 as footnotes 11 and 12.
iv. Revise paragraph b.
v. Revise paragraph d.
vi. Redesignate footnotes 14 through 61 as footnotes 15 through 62 respectively, and add new footnote 14.
e. Add a sentence at the end of newly redesignated footnote 17.
f. Revise newly redesignated footnotes 38 and 39.
g. Remove Attachments II, III, IV, V, and VI.
(i) A banking organization's qualifying total capital consists of two types of capital components: “core capital elements” (tier 1 capital elements) and “supplementary capital elements” (tier 2 capital elements). These capital elements and the various limits, restrictions, and deductions to which they are subject, are discussed below. To qualify as an element of tier 1 or tier 2 capital, an instrument must be fully paid up and effectively unsecured. Accordingly, if a banking organization has purchased, or has directly or indirectly funded the purchase of, its own capital instrument, that instrument generally is disqualified from inclusion in regulatory capital. A qualifying tier 1 or tier 2 capital instrument also must be subordinated to all senior indebtedness of the organization. If issued by a bank, it also must be subordinated to claims of depositors. In addition, the instrument must not contain or be covered by any covenants, terms, or restrictions that are inconsistent with safe and sound banking practices.
(ii) On a case-by-case basis, the Federal Reserve may determine whether, and to what extent, any instrument that does not fit wholly within the terms of a capital element set forth below, or that does not have an ability to absorb losses commensurate with the capital treatment specified below, will qualify as an element of tier 1 or tier 2 capital. In making such a determination, the Federal Reserve will consider the similarity of the instrument to instruments explicitly treated in the guidelines; the ability of the instrument to absorb losses, particularly while the organization operates as a going concern; the maturity and redemption features of the instrument; and other relevant terms and factors.
(iii) Redemptions of capital instruments before stated maturity could have a significant impact on an organization's overall capital structure. Consequently, an organization considering such a step should consult with the Federal Reserve before redeeming any equity or debt capital instrument prior to stated maturity if such redemption could have a material effect on the level or composition of the organization's capital base. Such consultation generally would not be necessary when the instrument is to be redeemed with the proceeds of, or replaced by, a like amount of a capital instrument that is of equal or higher quality with regard to terms and maturity and the Federal Reserve considers the organization's capital position to be fully sufficient.
1.
a.
i. Qualifying common stockholders' equity;
ii. Qualifying noncumulative perpetual preferred stock (including related surplus);
iii. Minority interest related to qualifying common or noncumulative perpetual preferred stock directly issued by a consolidated U.S. depository institution or foreign bank subsidiary (Class A minority interest); and
iv. Restricted core capital elements. The aggregate of these items is limited within tier 1 capital as set forth in section II.A.1.b. of this appendix. These elements are defined to include:
(1) Qualifying cumulative perpetual preferred stock (including related surplus);
(2) Minority interest related to qualifying cumulative perpetual preferred stock directly issued by a consolidated U.S. depository institution or foreign bank subsidiary (Class B minority interest);
(3) Minority interest in the form of qualifying common stockholders' equity or qualifying perpetual preferred stock (and related surplus) in a consolidated subsidiary that is neither a U.S. depository institution nor a foreign bank (Class C minority interest); and
(4) Qualifying trust preferred securities.
b.
(2) The excess amounts of restricted core capital elements that are in the form of Class C minority interest and qualifying trust preferred securities are subject to further limitation within tier 2 capital in accordance with section II.A.2.d.iv. of this appendix. A banking organization may attribute excess amounts of restricted core capital elements first to any qualifying cumulative perpetual preferred stock or to Class B minority interest, and second to qualifying trust preferred securities or to Class C minority interest, which are subject to a tier 2 sublimit.
(3) The Federal Reserve generally expects internationally active banking organizations to limit the aggregate amount of restricted core capital elements included in tier 1 capital to 15 percent of the sum of all core capital elements, including restricted core capital elements, net of goodwill.
ii.
(1) The quantitative limits for restricted core capital elements set forth in sections II.A.1.b.i. and II.A.2.d.iv. of this appendix do not become effective until March 31, 2007. Prior to that time, a banking organization with restricted core capital elements in amounts that cause them to exceed these limits must consult with the Federal Reserve on a plan for ensuring that the banking organization is not unduly relying on these elements in its capital base and, where appropriate, for reducing such reliance.
(2) Until March 31, 2007, the aggregate amount of qualifying cumulative perpetual preferred stock (including related surplus) and qualifying trust preferred securities that a banking organization may include in tier 1 capital is limited to 25 percent of the sum of the following core capital elements: qualifying common stockholders' equity, qualifying noncumulative and cumulative perpetual preferred stock (including related surplus), qualifying minority interest in the equity accounts of consolidated subsidiaries, and qualifying trust preferred securities. Until March 31, 2007, amounts of qualifying cumulative perpetual preferred stock and qualifying trust preferred securities in excess of this limit may be included in tier 2 capital.
(3) Until March 31, 2007, internationally active banking organizations generally are expected to limit the amount of qualifying cumulative perpetual preferred stock and qualifying trust preferred securities included in tier 1 capital to 15 percent of the sum of core capital elements set forth in section II.A.1.b.ii.(2) of this appendix.
c.
i.
(1)
(2)
(3)
ii.
(1)
(2)
(3)
iii.
iv.
2.
b.
d.
ii.
(1) The subordinated debt must be unsecured.
(2) The subordinated debt must clearly state on its face that it is not a deposit and is not insured by a Federal agency.
(3) The subordinated debt must not have credit-sensitive features or other provisions that are inconsistent with safe and sound banking practice.
(4) Subordinated debt issued by a subsidiary depository institution of a bank holding company must be subordinated in right of payment to the claims of all the institution's general creditors and depositors, and must not contain provisions permitting debt holders to accelerate payment of principal or interest upon the occurrence of any event other than receivership of the institution. Subordinated debt issued by a bank holding company or its non-depository institution subsidiaries must be subordinated to all senior indebtedness of the issuer; that is, the debt must be subordinated at a minimum to all borrowed and purchased money, similar obligations arising from off-balance sheet guarantees and direct credit substitutes, and obligations associated with derivative products such as interest rate and foreign exchange contracts, commodity contracts, and similar arrangements. Subordinated debt issued by a bank holding company or its non-depository institution subsidiaries must not contain provisions permitting debt holders to accelerate payment of principal or interest upon the occurrence of any event other than bankruptcy of the bank holding company or the receivership of a major subsidiary depository institution. Thus, a provision permitting acceleration in the event that any other affiliate of the bank holding company issuer enters into bankruptcy or receivership makes the instrument ineligible for inclusion in tier 2 capital.
iii.
iv.
B. * * *
2. * * *
a. * * * The aggregate amount of investments in banking or finance subsidiaries
III. * * *
C. * * *
2. * * *
a. * * * U.S. depository institutions
5. In Appendix D to Part 225, the following amendments are proposed:
a. Amend the second sentence of section I.b. by changing the word “that” to “than.”
b. In section II.b., revise footnote 3.
c. In section II.c., revise the second sentence.
II. * * *
b. * * * For the purpose of this leverage ratio, the definition of tier 1 capital as set forth in the risk-based capital guidelines contained in appendix A of this part will be used.
c. * * * This is consistent with the Federal Reserve's risk-based capital guidelines and long-standing Board policy and practice with regard to leverage guidelines. * * *
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
This document proposes the adoption of a new airworthiness directive (AD) that is applicable to certain Saab Model SAAB 2000 series airplanes. This proposal would require various repetitive inspections for cracking of the drag and shear angles that attach the nacelle to the front spar of the wing, and related corrective action. The proposal also would require eventual modification of the drag and shear angles, which would end the repetitive inspections. This action is necessary to prevent fatigue cracking of the drag and shear angles, which could result in reduced structural integrity of the nacelle and wing. This action is intended to address the identified unsafe condition.
Comments must be received by June 18, 2004.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2002-NM-347-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9 a.m. and 3 p.m., Monday through Friday, except Federal holidays. Comments may be submitted via fax to (425) 227-1232. Comments may also be sent via the Internet using the following address:
The service information referenced in the proposed rule may be obtained from Saab Aircraft AB, SAAB Aircraft Product Support, S-581.88, Linköping, Sweden. This information may be examined at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington.
Dan Rodina, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98055-4057; telephone (425) 227-2125; fax (425) 227-1149.
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 action may be changed in light of the comments received.
Submit comments using the following format:
• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.
• For each issue, state what specific change to the proposed AD is being requested.
• Include justification (
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 action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2002-NM-347-AD.” The postcard will be date stamped and returned to the commenter.
Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2002-NM-347-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.
The Luftfartsverket (LFV), which is the airworthiness authority for Sweden, notified the FAA that an unsafe condition may exist on certain Saab Model SAAB 2000 series airplanes. The LFV advises that inspections done by a full-scale fatigue unit have revealed cracks in the drag angles that attach the nacelle to the wing box via the upper and lower wing skin; and in the shear angles that attach the nacelle to the front spar of the wing. Fatigue cracking of the drag and shear angles of the front spar of the wing could result in reduced structural integrity of the nacelle and wing.
The manufacturer has issued Saab Service Bulletins 2000-54-026, Revision 01, and 2000-54-028, Revision 01, both dated June 20, 2002. The service bulletins describe procedures for
Additionally, the manufacturer has issued Saab Service Bulletins 2000-54-027, and 2000-54-029, both dated November 4, 2002, which describe procedures for modification of the upper and lower drag angles and the shear angles which attach the nacelle to the front spar of the wing. Accomplishment of both modifications eliminates the need for the repetitive inspections. The modification procedures in Service Bulletin 2000-54-027 include an eddy current inspection of the surface of the shear angles and a rotating probe inspection of the hi-lok holes for cracking. If no cracking is found, the service bulletin describes procedures for installation of pressure pads on the shear angles. The modification procedures in Service Bulletin 2000-54-029 include an eddy current (rotating probe) inspection of the upper and lower drag angles for cracking. If no cracking is found, the service bulletin describes procedures for installation of pressure pads on the drag angles. If any cracking is found, both service bulletins describe procedures for determining the length and position of each crack, and sending a report to the manufacturer for further corrective action.
Accomplishment of the actions specified in the service information is intended to adequately address the identified unsafe condition. The LFV classified this service information as mandatory and issued Swedish airworthiness directives 1-174 and 1-175, both dated April 30, 2002; and 1-180 and 1-181, both dated November 8, 2002; to ensure the continued airworthiness of these airplanes in Sweden.
This airplane model is manufactured in Sweden and is 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. Pursuant to this bilateral airworthiness agreement, the LFV has kept us informed of the situation described above. We have examined the findings of the LFV, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.
Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service information described previously, except as discussed below.
Unlike the procedures described in the service bulletins, and referenced in the Swedish airworthiness directives, this proposed AD would not permit further flight if cracks are found in the drag and shear angles. We have determined that, because of the safety implications and consequences associated with such cracking, any cracked drag or shear angle must be repaired before further flight.
The compliance time specified in the table in paragraph 1.D., ‘Compliance,’ of Service Bulletin 2000-54-029 does not recommend a specific compliance time for the modification of the drag angles. The table cites cracking damage and different compliance times depending on the severity of the damage; however, we have determined the modification must be done before the accumulation of 24,000 flight cycles, as specified in the column citing no crack damage.
Swedish airworthiness directives 1-174 and 1-175 require following the repetitive inspection intervals specified in Table 1 of the referenced service bulletins (determined by the severity of the cracking); however, this proposed AD follows the repetitive inspection interval in the column citing no crack damage as specified in Table 1 of Service Bulletin 2000-54-028, Revision 01, for all airplanes.
The compliance times specified above represent an appropriate interval of time for affected airplanes to continue to operate without compromising safety.
The referenced service bulletins specify that operators may contact the manufacturer for disposition of certain repair (cracking) conditions; however, this proposed AD would not allow this option but would require operators to repair any cracking per a method approved by either the FAA or the LFV (or its delegated agent). In light of the type of repair that would be required to address the unsafe condition, and consistent with existing bilateral airworthiness agreements, we have determined that, for this proposed AD, a repair approved by either the FAA or the LFV would be acceptable for compliance with this proposed AD.
The referenced service bulletins also specify that operators may contact the manufacturer to obtain repetitive inspection intervals if the cracking exceeds certain parameters; however, we have determined that operators must obtain appropriate repetitive inspection/repair procedures from either the FAA or the LFV (or its delegated agent).
Although the service bulletins recommend that operators send the manufacturer a report of the inspection results, this proposed AD would not require submission of such a report.
The above differences have been coordinated with the LFV.
This proposed AD would specify a “detailed” inspection for cracking of the shear angles which attach the nacelle to the front spar of the wing, in lieu of a detailed “visual” inspection, as specified in Service Bulletin 2000-54-026, Revision 01. A note has been added to this proposed AD to define that inspection.
We estimate that 3 airplanes of U.S. registry would be affected by this proposed AD.
It would take about 6 work hours per airplane to do the proposed inspections, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the proposed inspections on U.S. operators is estimated to be $1,170, or $390 per airplane, per inspection cycle.
It would take about 40 work hours per airplane to do the proposed modification of the shear angles, at an average labor rate of $65 per work hour. Required parts would cost about $6,200 per airplane. Based on these figures, the cost impact of the proposed modification on U.S. operators is estimated to be $26,400, or $8,800 per airplane.
It would take about 400 work hours per airplane to do the proposed modification of the drag angles, at an average labor rate of $65 per work hour. Required parts would cost about $41,794 per airplane. Based on these figures, the cost impact of the proposed modification on U.S. operators is estimated to be $203,382, or $67,794 per airplane.
The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.
The regulations proposed herein would not have a substantial direct effect 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, it is determined that this proposal would not have federalism implications under Executive Order 13132.
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
Air transportation, Aircraft, Aviation safety, Safety.
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:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive:
To prevent fatigue cracking of the drag and shear angles of the front spar of the wing, which could result in reduced structural integrity of the nacelle and wing, accomplish the following:
(a) Do the inspections required by paragraphs (a)(1) and (a)(2) of this AD, at the applicable time specified in paragraph (b) of this AD.
(1) Do a detailed inspection for cracking of the shear angles which attach the nacelle to the front spar of the wing, and an eddy current inspection for cracking around the fasteners, by doing all the actions per the Accomplishment Instructions of Saab Service Bulletin 2000-54-026, Revision 01, dated June 20, 2002.
(2) Do an endoscope inspection of the upper and lower drag angles for cracking, and an eddy current inspection for cracking around the fasteners, by doing all the actions per the Accomplishment Instructions of Saab Service Bulletin 2000-54-028, Revision 01, dated June 20, 2002.
For the purposes of this AD, a detailed inspection is defined as: “An intensive visual examination of a specific structural area, system, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at intensity deemed appropriate by the inspector. Inspection aids such as mirror, magnifying lenses,
(b) Do the inspections required by paragraph (a) of this AD at the applicable compliance time specified in paragraph (b)(1), (b)(2), or (b)(3) of this AD. Repeat the inspections thereafter at intervals not to exceed 4,000 flight cycles until the modification required by paragraph (e) of this AD is done.
(1) For airplanes that have accumulated 14,000 or more total flight cycles as of the effective date of this AD: Inspect within 500 flight cycles after the effective date of this AD.
(2) For airplanes that have accumulated 10,000 or more total flight cycles, but fewer than 14,000 total flight cycles as of the effective date of this AD: Inspect within 1,000 flight cycles after the effective date of this AD.
(3) For airplanes that have accumulated fewer than 10,000 total flight cycles as of the effective date of this AD: Inspect within 2,000 flight cycles after the effective date of this AD.
(c) If any cracking is found during any inspection required by this AD: Before further flight, repair the cracking per a method approved by either the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, or the LFV (or its delegated agent). In lieu of repairing the cracking, the modifications required by paragraph (e) of this AD may be done before further flight, which would end the repetitive inspections required by paragraphs (a) and (b) of this AD.
(d) Inspections done before the effective date of this AD per Saab Service Bulletins 2000-54-026 and 2000-54-028, both dated April 26, 2002, are considered acceptable for compliance with the corresponding actions specified in this AD.
(e) Except as provided by paragraph (c) of this AD: Do the modifications of the drag and shear angles of the front spar of the wing at the times specified in paragraphs (e)(1) and (e)(2) of this AD. Accomplishment of these modifications ends the repetitive inspections required by paragraphs (a) and (b) of this AD.
(1) Before the accumulation of 20,000 total flight cycles: Modify the shear angles that attach the nacelle to the front spar of the wing by doing all the actions per the Accomplishment Instructions of Saab Service Bulletin 2000-54-027, dated November 4, 2002.
(2) Before the accumulation of 24,000 total flight cycles: Modify the upper and lower drag angles by doing all the actions per the Accomplishment Instructions of Saab Service Bulletin 2000-54-029, dated November 4, 2002.
(f) Although the Saab Service Bulletins referenced in this AD recommend submitting certain information to the manufacturer, this AD does not include such a requirement.
(g) In accordance with 14 CFR 39.19, the Manager, International Branch, ANM-116, Transport Airplane Directorate, is authorized to approve alternative methods of compliance for this AD.
The subject of this AD is addressed in Swedish airworthiness directives 1-174 and 1-175, both dated April 30, 2002; and Swedish airworthiness directives 1-180 and 1-181, both dated November 8, 2002.
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
This document proposes the adoption of a new airworthiness directive (AD) that is applicable to certain Bombardier Model DHC-8-101, -102, -103, -106, -201, -202, -301, -311, and -315 airplanes. This proposal would require an inspection of the fuel tube assembly of the auxiliary power unit (APU) for clearance from adjacent components; and inspecting the fuel tube assembly and the bleed air duct shroud for discrepancies (insufficient clearance, nicks, dents, chafing, or other damage); and related investigative and corrective actions if necessary. This proposal also would require relocating certain support clamps on the APU fuel tube assembly. This action is necessary to prevent a fuel leak caused by chafing of the APU fuel tube assembly, which could result in fire in the center wing area. This action is intended to address the identified unsafe condition.
Comments must be received by June 18, 2004.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2003-NM-285-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9 a.m. and 3 p.m., Monday through Friday, except Federal holidays. Comments may be submitted via fax to (425) 227-1232. Comments may also be sent via the Internet using the following address:
The service information referenced in the proposed rule may be obtained from Bombardier, Inc., Bombardier Regional Aircraft Division, 123 Garratt Boulevard, Downsview, Ontario M3K 1Y5, Canada. This information may be examined at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, suite 410, Westbury, New York.
Sarbhpreet Singh Sawhney, Aerospace Engineer, Airframe and Propulsion Branch, ANE-171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, suite 410, Westbury, New York 11590; telephone (516) 228-7340; fax (516) 794-5531.
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 action may be changed in light of the comments received.
Submit comments using the following format:
• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.
• For each issue, state what specific change to the proposed AD is being requested.
• Include justification (
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 action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2003-NM-285-AD.” The postcard will be date stamped and returned to the commenter.
Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2003-NM-285-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.
Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on certain Bombardier Model DHC-8-101, -102, -103, -106, -201, -202, -301, -311, and -315 airplanes. TCCA advises that an investigation of a fuel leak revealed chafing of the fuel tube assembly for the auxiliary power unit (APU). This fuel tube assembly is on the bleed air duct shroud, which is located in the center wing area where it is attached to a fairlead by two support clamps. It is possible that incorrect location of these support clamps may result in insufficient clearance between the fuel line and the bleed air duct, and/or between the fuel line and the gust lock cable. If there is insufficient clearance, the APU feed tube assembly can chafe, which could result in a fuel leak and possible fire in the center wing area.
Bombardier has issued Service Bulletin 8-49-19, Revision A, dated July 7, 2003, which describes procedures for doing a visual inspection of the APU fuel tube assembly. This inspection includes examining the routing of the fuel tube assembly to ensure that the tube has sufficient clearance between the shroud of the bleed air duct and the gust lock cable; and inspecting the fuel tube assembly and the bleed air duct shroud for other discrepancies such as nicks, dents, chafing, or other damage. If the visual inspection shows no discrepancies, the service bulletin specifies to relocate the clamps on the APU fuel tube assembly. If the visual inspection shows discrepancies, the service bulletin describes procedures for related investigative and corrective actions before relocating the support clamps for the fuel tube assembly. These related investigative and corrective actions include:
• Blending out the damaged area and measuring the depth of the reworked area.
• For fuel tubes on which damage (nicks, chafing, or dents) is within acceptable limits: Doing an eddy current or fluorescent penetrant inspection for cracks. If cracks are found, or if the damage is outside the acceptable limits specified in the service bulletin: Reworking/repairing the tube assembly or replacing it with a new or serviceable tube assembly.
• Visually inspecting the replaced tube assembly for fuel leakage after rework or repair.
Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. TCCA classified this service bulletin as mandatory and issued Canadian airworthiness directive CF-2003-22, dated September 3, 2003, to ensure the continued airworthiness of these airplanes in Canada.
These airplane models are manufactured in Canada 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. Pursuant to this bilateral airworthiness agreement, TCCA has kept the FAA informed of the situation described above. We have examined the findings of TCCA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.
Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously.
We estimate that up to 125 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 1 work hour per airplane to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $8,125, or $65 per airplane.
The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.
The regulations proposed herein would not have a substantial direct effect 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, it is determined that this proposal would not have federalism implications under Executive Order 13132.
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
Air transportation, Aircraft, Aviation safety, Safety.
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:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive:
To prevent a fuel leak caused by chafing of the APU fuel tube assembly, which could result in fire in the center wing area, accomplish the following:
(a) Within 6 months after the effective date of this AD: Do a general visual inspection of the APU fuel tube assembly for discrepancies. The inspection includes examining the routing of the fuel tube assembly to ensure that the tube has sufficient clearance between the shroud of the bleed air duct and the gust lock cable; and inspecting the fuel tube assembly and the bleed air duct shroud for other discrepancies such as nicks, dents, chafing, or other damage. If the inspection shows no discrepancies, before further flight, relocate the clamps on the fuel tube assembly. If the inspection shows discrepancies, before further flight, do the applicable related investigative and corrective actions, and relocate the clamps on the fuel tube assembly. Accomplish all actions per the Accomplishment Instructions of Bombardier Service Bulletin 8-49-19, Revision A, dated July 7, 2003.
For the purposes of this AD, a general visual inspection is defined as: “A visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made from within touching distance unless otherwise specified. A mirror may be necessary to enhance visual access to all exposed surfaces in the inspection area. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or droplight and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.”
(b) Actions accomplished before the effective date of this AD per Bombardier Service Bulletin 8-49-19, dated May 13, 2003, are considered acceptable for compliance with the corresponding action specified in this AD.
(c) In accordance with 14 CFR 39.19, the Manager, New York Aircraft Certification Office, FAA, is authorized to approve alternative methods of compliance for this AD.
The subject of this AD is addressed in Canada airworthiness directive CF-2003-22, dated September 3, 2003.
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
This document proposes the adoption of a new airworthiness directive (AD) that is applicable to certain Bombardier Model CL-600-2C10 (Regional Jet Series 700 & 701) series airplanes. This proposal would require an inspection of the thrust reverser cascades for correct installation; removing and reinstalling the cascade in the correct location, if necessary; and reworking the thrust reverser cascades to add locating spigots (metal protrusions) to each cascade; as applicable. This action is necessary to prevent asymmetric reverse thrust and consequent loss of control of the airplane during reverse thrust operation. This action is intended to address the identified unsafe condition.
Comments must be received by June 18, 2004.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2003-NM-46-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9 a.m. and 3 p.m., Monday through Friday, except Federal holidays. Comments may be submitted via fax to (425) 227-1232. Comments may also be sent via the Internet using the following address:
The service information referenced in the proposed rule may be obtained from Bombardier, Inc., Canadair, Aerospace Group, P.O. Box 6087, Station Centre-ville, Montreal, Quebec H3C 3G9, Canada. This information may be examined at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, suite 410, Westbury, New York.
James Delisio, Aerospace Engineer, Airframe and Propulsion Branch, ANE-171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, suite 410, Westbury, New York 11590; telephone (516) 228-7321; fax (516) 794-5531.
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 action may be changed in light of the comments received.
Submit comments using the following format:
• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.
• For each issue, state what specific change to the proposed AD is being requested.
• Include justification (
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 action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2003-NM-46-AD.” The postcard will be date stamped and returned to the commenter.
Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2003-NM-46-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056; or at the FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, suite 410, Westbury, New York 11590.
Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on certain Bombardier Model CL-600-2C10 (Regional Jet Series 700 & 701) series airplanes. TCCA advises that an incident occurred during a pre-delivery flight where, upon landing and application of maximum thrust reverser, the airplane veered to the right from the runway heading. Investigation revealed that the thrust reverser cascades configuration of the left engine was incorrectly installed during production. The cascades have different part numbers to control the correct installation location; however, it is physically possible that diagonally opposed thrust reverser cascades can be intermixed in either engine at any time the assemblies are changed. Incorrectly installed thrust reverser cascades, if not corrected, could cause asymmetric reverse thrust and consequent loss of control of the airplane during reverse thrust operation.
For certain airplanes, Bombardier has issued Alert Service Bulletin A670BA-78-001, Revision A, dated April 23, 2002, which describes procedures for performing a general visual inspection of the thrust reverser cascades for correct installation, and removing and reinstalling the cascade in the correct cascade location, if necessary. TCCA classified this service bulletin as mandatory and issued Canadian airworthiness directive CF-2002-30, dated May 22, 2002, in order to assure the continued airworthiness of these airplanes in Canada.
For certain airplanes, Bombardier has also issued Service Bulletin 670BA-78-003, dated January 22, 2004, which describes procedures for reworking the thrust reverser cascades to add locating spigots (metal protrusions) to each
Bombardier Service Bulletin 670BA-78-003 refers to GE Aircraft Engines Service Bulletin 670GE-78-008, dated December 17, 2003, as an additional source of information for accomplishment of the rework.
Accomplishment of the actions specified in the Bombardier service bulletins is intended to adequately address the identified unsafe condition.
This airplane model is manufactured in Canada and is 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. Pursuant to this bilateral airworthiness agreement, TCCA has kept the FAA informed of the situation described above. The FAA has examined the findings of TCCA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.
Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the applicable Bombardier service bulletins described previously.
Canadian airworthiness directive CF-2002-30 requires inspection of the thrust reverser cascades (interim action) per Bombardier Alert Service Bulletin A670BA-78-001, Revision A. Unlike the Canadian airworthiness directive, for certain airplanes, the proposed AD would require rework of the thrust reverser cascades (terminating action) per Bombardier Service Bulletin 670BA-78-003. After the issuance of the Canadian airworthiness directive, TCCA approved Bombardier Service Bulletin 670BA-78-003, and is considering superseding CF-2002-30 to mandate rework of the thrust reverser cascades (terminating action).
The FAA estimates that 102 airplanes of U.S. registry would be affected by this proposed AD. The average labor rate is $65 per work hour.
It would take approximately 1 work hour per airplane to accomplish the proposed inspection. Based on these figures, the cost impact of the proposed inspection on U.S. operators is estimated to be $6,630, or $65 per airplane, per inspection cycle.
It would take approximately 4 work hours per airplane to accomplish the proposed modification. Based on these figures, the cost impact of the proposed rework on U.S. operators is estimated to be $26,520, or $260 per airplane.
The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this proposed AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions. Manufacturer warranty remedies may be available for labor costs associated with this proposed AD. As a result, the costs attributable to the proposed AD may be less than stated above.
The regulations proposed herein would not have a substantial direct effect 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, it is determined that this proposal would not have federalism implications under Executive Order 13132.
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
Air transportation, Aircraft, Aviation safety, Safety.
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:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive:
To prevent asymmetric reverse thrust and consequent loss of control of the airplane during reverse thrust operation, accomplish the following:
(a) For airplanes with serial numbers 10005 through 10040 inclusive: Within 72 flight hours or 30 days from the effective date of the AD, whichever occurs first, perform a general visual inspection of the thrust reverser cascades for correct installation, per the Accomplishment Instructions of Bombardier Alert Service Bulletin A670BA-78-001, Revision A, dated April 23, 2002.
For the purposes of this AD, a general visual inspection is defined as: “A visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made from within touching distance unless otherwise specified. A mirror may be necessary to enhance visual access to all exposed surfaces in the inspection area. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or droplight and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.”
(b) For airplanes with serial numbers 10003 through 10116 inclusive: Each time the thrust reverser cascade is removed and reinstalled, perform the action specified in paragraph (a) of this AD.
(c) If any thrust reverser cascade is found to be incorrectly installed during any inspection required by paragraph (a) or (b) of this AD, before further flight, remove and reinstall the cascade in the correct location, per the Accomplishment Instructions of
(d) Within 6,000 flight hours from the effective date of the AD, rework the thrust reverser cascades by accomplishing all the actions in the Accomplishment Instructions of Bombardier Service Bulletin 670BA-78-003, dated January 22, 2004. Accomplishment of the rework terminates the requirements of paragraphs (a) and (b) of this AD.
Bombardier Service Bulletin 670A-78-003, references GE Aircraft Engines Service Bulletin 670GE-78-008, dated December 17, 2003, as an additional source of service information for the accomplishment of the rework.
(e) Except as provided by paragraphs (b) and (c) of this AD, as of the effective date of this AD, no person may install on any airplane a thrust reverser cascade with powerplant system, serial numbers PS0003 through PS0116 inclusive, left- and right-hand, unless it has been reworked per Bombardier Service Bulletin 670BA-78-003, dated January 22, 2004.
(f) Inspections accomplished before the effective date of this AD per Bombardier Alert Service Bulletin A670BA-78-001, dated April 19, 2002, are considered acceptable for compliance with paragraph (a) and (b) of this AD.
(g) In accordance with 14 CFR 39.19, the Manager, New York Aircraft Certification Office (ACO), FAA, is authorized to approve alternative methods of compliance for this AD.
The subject of this AD is addressed in Canadian airworthiness directive CF-2002-30, dated May 22, 2002.
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
This document proposes the adoption of a new airworthiness directive (AD) that is applicable to certain Airbus Model A310 series airplanes. This proposal would require repetitive inspections for fatigue cracking of the area around the fasteners of the landing plate of the aileron access doors of the bottom skin panel of the wings, and related corrective action. The proposal also provides for an optional terminating action, which would end the repetitive inspections. This action is necessary to prevent fatigue cracking of the area around the fasteners of the landing plate of the aileron access doors and the bottom skin panel of the wings, which could result in reduced structural integrity of the wings. This action is intended to address the identified unsafe condition.
Comments must be received by June 18, 2004.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2003-NM-279-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9 a.m. and 3 p.m., Monday through Friday, except Federal holidays. Comments may be submitted via fax to (425) 227-1232. Comments may also be sent via the Internet using the following address:
The service information referenced in the proposed rule may be obtained from Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France. This information may be examined at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington.
Tim Backman, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (425) 227-2797; fax (425) 227-1149.
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 action may be changed in light of the comments received.
Submit comments using the following format:
• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.
• For each issue, state what specific change to the proposed AD is being requested.
• Include justification (
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 action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2003-NM-279-AD.” The postcard will be date stamped and returned to the commenter.
Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2003-NM-279-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.
The Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, has notified the FAA that an unsafe condition may exist on certain Airbus Model A310 series airplanes. The DGAC advises that full-scale fatigue testing of a Model A310 airplane on which Airbus Modification 5106 had been done revealed skin cracking in the modified area. The cracking had initiated from one of the attachment holes of the landing plate of the aileron access door. In addition, during routine maintenance of a post-modification 5106 Model A310 airplane, a 62-millimeter crack was found on the right-hand wing in the
The manufacturer has developed an inspection program for Model A310 series airplanes on which Airbus Modification 5106 has been done. The manufacturer is also conducting a review of the inspection program developed for airplanes on which Airbus Modification 5106 has not been done.
On December 8, 1998, the FAA issued AD 98-26-01, amendment 39-10942 (63 FR 69179, December 16, 1998) applicable to all Airbus Model A310 series airplanes. That AD requires various inspections to detect fatigue cracks at certain locations on the fuselage, horizontal stabilizer, wings and tail; repair or modification, if necessary; and installation of doublers. The actions specified by that AD are intended to prevent reduced structural integrity of the fuselage, horizontal stabilizer, and wings.
Airbus has issued the following service information:
• Airbus Service Bulletin A310-57-2004, Revision 2, dated March 5, 1990, which describes procedures for modification of the landing plate of the access door of the bottom skin panel of the left and right wings. The modification includes removing the existing clearance fit bolts from the landing plate of the aileron access door on the left and right wings, and installing reamed oversized interference fit bolts. Accomplishment of the modification eliminates the need for the repetitive inspections.
• Airbus Service Bulletin A310-57-2081, dated June 11, 2002, which describes procedures for modification of the access door and the bottom skin panel of the left and right wings. The modification includes a high frequency eddy current inspection of the fastener holes of the modification areas for cracking, and repair per Service Bulletin A310-57-2082, if cracking is found. The service bulletin also specifies contacting the manufacturer for repair instructions if cracking is found outside the modification areas. If no cracking is found, the service bulletin describes procedures for cutting the landing plate of the aileron access door into three parts, cold expanding of the fastener holes of the landing plate, installing an interference plug; installing an external reinforcement plate, cold expanding of the attachment holes of the reinforcement plate, and installing interference fit fasteners.
• Airbus Service Bulletin A310-57-2082, dated June 11, 2002, which describes procedures for a high frequency eddy current inspection for cracking of the area around the fasteners of the landing plate of the aileron access doors of the bottom skin panel of the left and right wings, and related corrective action. The related corrective action includes doing a permanent repair (installing a repair plate and new landing plates), or a temporary repair (crack-stop drilling) followed by repetitive inspections until a permanent repair is done.
Accomplishment of the actions specified in the service information is intended to adequately address the identified unsafe condition. The DGAC classified this service information as mandatory and issued French airworthiness directive 2003-242(B), dated June 25, 2003, to ensure the continued airworthiness of these airplanes in France.
This airplane model is manufactured in France and is 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. Pursuant to this bilateral airworthiness agreement, the DGAC has kept us informed of the situation described above. We have examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.
Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service information described previously, except as discussed below. This proposed AD also would provide for optional terminating action for the repetitive inspections.
Consistent with the findings of the DGAC, the proposed AD would allow repetitive inspections to continue in lieu of the terminating action. In making this determination, we considered that long-term continued operational safety in this case will be adequately ensured by repetitive inspections to find cracking before it represents a hazard to the airplane.
Unlike the procedures described in Service Bulletin A310-57-2082, and the French airworthiness directive, this proposed AD would not permit further flight if cracks are found in the area around the fasteners of the landing plate of the aileron access doors of the wings. The service bulletin specifies the option of a temporary repair (crack-stop drilling) if cracking is found in the landing plate and wing skin panel, and follow-on repetitive inspections until a permanent repair is done. We have determined that, because of the safety implications and consequences associated with such cracking, no temporary repair is allowed and a permanent repair must be done before further flight. However, under the provisions of paragraph (e) of the proposed AD, we may approve requests for a temporary repair provided that data are submitted to substantiate that (1) the crack is not part of multi-site damage, (2) crack growth is easily detectable, and (3) established inspection procedures would detect cracked structure at intervals permitting a permanent repair to be done before reduced structural integrity of the wings can occur.
Service Bulletin A310-57-2081 specifies that operators may contact the manufacturer for disposition of certain repair conditions, but this proposed AD would require operators to repair those conditions per a method approved by either the FAA or the DGAC (or its delegated agent). In light of the type of repair that would be required to address the unsafe condition, and consistent with existing bilateral airworthiness agreements, we have determined that, for this proposed AD, a repair approved by either the FAA or the DGAC would be acceptable for compliance with this proposed AD.
For airplanes on which Airbus Modification 5106 has been done, the French airworthiness directive specifies an inspection threshold of a certain number of flights “since new.” However, this proposed AD specifies an inspection threshold of a certain number of flight cycles since the date of issuance of the original Airworthiness Certificate or the date of issuance of the original Export Certificate of Airworthiness, whichever is first. This decision is based on our determination that “since new” may be interpreted differently by different operators. We
We estimate that 46 airplanes of U.S. registry would be affected by this proposed AD, that it would take about 2 work hours per airplane to do the proposed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the inspection proposed by this AD on U.S. operators is estimated to be $5,980, or $130 per airplane, per inspection cycle.
The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.
The regulations proposed herein would not have a substantial direct effect 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, it is determined that this proposal would not have federalism implications under Executive Order 13132.
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
Air transportation, Aircraft, Aviation safety, Safety.
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:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive:
To prevent fatigue cracking of the area around the fasteners of the landing plate of the aileron access doors and the bottom skin panel of the wings, which could result in reduced structural integrity of the wings, accomplish the following:
(a) For airplanes on which Airbus Modification 5106 (Airbus Service Bulletin A310-57-2004, Revision 2, dated March 5, 1990) has not been done as of the effective date of this AD: Within 2,000 flight cycles after the effective date of this AD, or within 3,000 flight cycles after the last inspection done per paragraph (k) of AD 98-26-01, amendment 39-10942 (63 FR 69179, December 16, 1998), whichever is first; do a high frequency eddy current (HFEC) inspection for cracking of the area around the fasteners of the landing plate of the wing bottom skin panel No. 2 of the left and right wings. Do the inspection per the Accomplishment Instructions of Airbus Service Bulletin A310-57-2082, dated June 11, 2002. If no cracking is found, repeat the inspection thereafter at intervals not to exceed 1,900 flight cycles, until accomplishment of the terminating action specified in paragraph (d) of this AD.
(b) For airplanes on which Airbus Modification 5106 has been done as of the effective date of this AD: Do the HFEC inspection required by paragraph (a) of this AD at the applicable time specified in paragraph (b)(1), (b)(2), (b)(3), or (b)(4) of this AD. If no cracking is found, repeat the inspection thereafter at intervals not to exceed 1,900 flight cycles, until accomplishment of the terminating action specified in paragraph (d) of this AD.
(1) For airplanes that have accumulated fewer than 17,000 total flight cycles since the date of issuance of the original Airworthiness Certificate or the date of issuance of the original Export Certificate of Airworthiness, whichever is first, as of the effective date of this AD: Inspect prior to the accumulation of 18,000 total flight cycles.
(2) For airplanes that have accumulated 17,000 or more total flight cycles, but fewer than 19,001 total flight cycles since the date of issuance of the original Airworthiness Certificate or the date of issuance of the original Export Certificate of Airworthiness, whichever is first, as of the effective date of this AD: Inspect within 2,000 flight cycles after the effective date of this AD.
(3) For airplanes that have accumulated 19,001 or more total flight cycles, but fewer than 21,001 total flight cycles since the date of issuance of the original Airworthiness Certificate or the date of issuance of the original Export Certificate of Airworthiness, whichever is first, as of the effective date of this AD: Inspect with 1,200 flight cycles after the effective date of this AD.
(4) For airplanes that have accumulated 21,001 or more total flight cycles since the date of issuance of the original Airworthiness Certificate or the date of issuance of the original Export Certificate of Airworthiness, whichever is first, as of the effective date of this AD: Inspect within 500 flight cycles after the effective date of this AD.
(c) If any cracking is found during any inspection required by paragraph (a) or (b) of this AD: Before further flight, do the actions required by either paragraph (c)(1) or (c)(2) of this AD.
(1) Do a permanent repair of the area by doing the applicable corrective actions per the Accomplishment Instruction of Airbus Service Bulletin A310-57-2082, dated June 11, 2002. Accomplishment of the permanent repair terminates the repetitive inspections required by this AD for the repaired area only.
(2) Do the terminating action specified in paragraph (d) of this AD.
(d) Modification of the landing plate of the aileron access doors of the wing bottom skin panel No. 2 of the left and right wings by doing all the actions, per the Accomplishment Instructions of Airbus Service Bulletin A310-57-2081, dated June 11, 2002, terminates the requirements of this AD. Where the service bulletin specifies contacting the manufacturer for disposition of certain repair conditions that may be associated with the modification procedure, this AD requires that the repair be done per a method approved by either the Manager, International Branch, ANM-116, FAA, Transport Airplane Directorate; or the Direction Générale de l'Aviation Civile, or its delegated agent.
(e) In accordance with 14 CFR 39.19, the Manager, International Branch, ANM-116, is authorized to approve alternative methods of compliance for this AD.
The subject of this AD is addressed in French airworthiness directive 2003-242(B), dated June 25, 2003.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking.
This notice proposed to amend Class E5 airspace at Dayton, TN. As a result of an evaluation, it has been determined a modification should be made to the Dayton, TN, Class E5 airspace area to contain the Nondirectional Radio Beacon (NDB) Runway 3, Standard Instrument Approach Procedure (SIAP) to Hardwick Field Airport, Cleveland, TN. Addtional controlled airspace extending upward from 700 feet Above Ground Level (AGL) is needed to contain the SIAP.
Comments must be received on or before June 18, 2004.
Send comments on this proposal to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You must identify the docket number FAA-2004-17616/Airspace Docket No. 04-ASO-6, at the beginning of your comments. You may also submit comments on the Internet at
An informal docket may also be examined during normal business hours at the office of the Regional Air Traffic Division, Federal Aviation Administration, Room 550, 1701 Columbia Avenue, College Park, Georgia 30337.
Walter R. Cochran, Manager, Airspace Branch, Air Traffic Division, Federal Aviation Administration, P.O. Box 20636, Atlanta, Georgia 30320; telephone (404) 305-5627.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2004-17616/Airspace Docket No. 04-ASO-6.” The postcard will be date/time stamped and returned to the commenter. All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the Internet at
The FAA is considering an amendment to part 71 of the Federal Aviation Regulations (14 CFR part 71) to amend Class E5 airspace at Dayton, TN. Class E airspace designations for airspace areas extending upward from 700 feet or more above the surface of the earth are published in Paragraph 6005 of FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Airspace, Incorporation by reference, Navigation (Air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
The authority citation for part 71 continues to read as follows:
49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9L, Airspace Designations and Reporting Points, dated September 2, 2003, and effective
That airspace extending upward from 700 feet above the surface within a 12.5-mile radius of Mark Anton Airport, and that airspace within a 6.5-mile radius of Hardwick Field Airport and within 3.5 miles northwest and 5.3 miles southeast of the 227° bearing from the HDI NDB extending from the 6.5-mile radius to 10 miles southwest of the NDB, and that airspace within a 6-mile radius of the point in space (lat. 35°37′34″ N, long. 85°10′38″ W) serving Bledsoe County Hospital, Pikeville, TN, and that airspace within a 6-mile radius of the point in space (lat. 35°10′52″ N, long. 84°52′56″ W) serving Bradley Memorial Hospital, Cleveland, TN; excluding that airspace within the CHA Class C airspace area and that airspace within the Athens, TN, Class E airspace area.
Coast Guard, DHS.
Second supplemental notice of proposed rulemaking.
The Coast Guard proposes to establish security zones encompassing the Trans-Alaska Pipeline (TAPS) Valdez Terminal Complex, Valdez, Alaska and TAPS Tank Vessels and a security zone in the Valdez Narrows, Port Valdez, Alaska. These security zones are necessary to protect the Alyeska Marine Terminal and vessels from damage or injury from sabotage, destruction or other subversive acts. Entry of vessels into these security zones is prohibited unless specifically authorized by the Captain of the Port, Prince William Sound, Alaska.
Comments and related material must reach the Coast Guard on or before July 30, 2004.
You may mail comments and related material to U.S. Coast Guard Marine Safety Office, PO Box 486, Valdez, Alaska 99686. Marine Safety Office, Valdez, Port Operations Department maintains the public docket for this rulemaking. Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, will become part of this docket and will be available for inspection or copying at Marine Safety Office Valdez, 105 Clifton, Valdez, AK 99686 between 7:30 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays.
LT Catherine Huot, Port Operations Department, U.S. Coast Guard Marine Safety Office, Valdez, Alaska, (907) 835-7218.
On November 7, 2001, we published three temporary final rules in the
Section 165.T17-003-Security zone: Trans-Alaska Pipeline Valdez Terminal Complex, Valdez, Alaska;
Section 165.T17-004-Security zone; Port Valdez; and
Section 165.T17-005-Security zones: Captain of the Port Zone, Prince William Sound, Alaska.
Then on June 4, 2002, we published a temporary final rule (67 FR 38389) that established security zones to replace these security zones. That rule issued in April 2002, which expired July 30, 2002, created temporary § 165.T17-009, entitled “Port Valdez and Valdez Narrows, Valdez, Alaska—security zone”.
Then on July 31, 2002, we published a temporary final rule (67 FR 49582) that established security zones to extend the temporary security zones that would have expired July 30, 2002. This extension was to allow for the completion of a notice-and-comment rulemaking to be completed to create permanent security zones to replace the temporary zones. On October 23, 2002, we published the notice of proposed rulemaking that sought public comment on establishing permanent security zones similar to the temporary security zones (67 FR 65074). The comment period for that NPRM ended December 23, 2002. Although no comments were received that would result in changes to the proposed rule an administrative omission was found that resulted in the need to issue a supplemental notice of proposed rulemaking (SNPRM) to address the “Collection of Information” section of the proposed rule (68 FR 14935, March 27, 2003). Then, on December 30, 2002, we issued a temporary final rule (68 FR 26490, May 16, 2003) that established security zones to extend the temporary security zones until June 30, 2003. This extension was to allow for a rulemaking for the permanent security zones to be completed. Then, on September 12, 2003, we issued a temporary final rule (68 FR 62009, October 31, 2003) that established security zones to extend the temporary security zones through March 12, 2004.
Elsewhere in today's
We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking, COTP Prince William Sound 04-002, indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8
We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Marine Safety Office Valdez at the address under
The Coast Guard is taking this action for the protection of the national security interests in light of terrorist acts perpetrated on September 11, 2001, and the continuing threat that remains from those responsible for those acts. As a vibrant port with a high volume of oil tanker traffic, these security zones are necessary to provide protection for the tankers transiting through the Port of Valdez and Valdez Narrows. These security zones are a necessary part of the Coast Guard's efforts to provide for the safety of the people and environment in Valdez and the surrounding area.
This supplemental notice of proposed rulemaking sets out three security zones. The Trans-Alaska Pipeline Valdez Marine Terminal Security zone encompasses the waters of Port Valdez between Allison Creek to the east and Sawmill Spit to the west and offshore to marker buoys A and B (approximately 1.5 nautical miles offshore from the TAPS Terminal). The Tanker Moving Security Zone encompasses the waters within 200 yards of a TAPS Tanker within the Captain of the Port, Prince William Sound Zone. The Valdez Narrows Security Zone encompasses the waters 200 yards either side of the Tanker Optimum Trackline through Valdez Narrows between Entrance Island and Tongue Point. This zone is active only when a TAPS Tanker is in the zone.
This action is necessary to provide for the safety of the TAPS terminal and TAPS tank vessels. The Coast Guard has worked closely with local and regional users of Port Valdez and Valdez Narrows waterways to develop these security zones in order to mitigate the impact on commercial and recreational users.
This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).
We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary.
Economic impact is expected to be minimal because there are alternative routes for vessels to use when the zone is enforced, permits to enter the zone are available, and the Tanker Moving Security Zone is in effect for a short duration.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. The number of small entities impacted by this rule is expected to be minimal because there are alternative routes for vessels to use when the zone is enforced, permission to enter the zone is available, and the Tanker Moving Security Zone is in effect for a short duration. Since the time frame this rule is in effect may cover commercial harvests of fish in the area, the entities most likely affected are commercial and native subsistence fishermen. The Captain of the Port will consider applications for entry into the security zone on a case-by-case basis; therefore, it is likely that very few, if any, small entities will be impacted by this rule. Those interested may apply for a permit to enter the zone by contacting Marine Safety Office, Valdez at the above contact number.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact LT Catherine Huot, Marine Safety Office Valdez, Alaska at (907)835-7218.
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this proposed rule under that Order and have determined that it does not have implications for federalism.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045,
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.
We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This rule creates no additional vessel traffic and thus imposes no additional burdens on the environment in Prince William Sound. It simply provides guidelines for vessels transiting in the Captain Of The Port, Prince William Sound Zone so that vessels may transit safely in the vicinity of the Port of Valdez and the TAPS terminal. A draft “Environmental Analysis Check List” and a draft “Categorical Exclusion Determination” (CED) are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Safety measures, Vessels, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
1. The authority citation for part 165 continues to read as follows:
33 U.S.C. 1231; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1
2. Remove 165.T17-030.
3. Add new § 165.1710 to read as follows:
(a)
(1)
(2)
(3)
(i) The Valdez Narrows Tanker Optimum Track line is a line commencing at 61°05′23″ N, 146°37′22.5″ W; thence south westerly to 61°04′03.2″ N, 146°40′03.2″ W; thence southerly to 61°03′00″ N, 146°41′12″ W.
(ii) This security zone encompasses all waters within approximately 200 yards on either side of the Valdez Narrows Optimum Track line.
(b)
(2) Tank vessels transiting directly to the TAPS terminal complex, engaged in the movement of oil from the terminal or fuel to the terminal, and vessels used to provide assistance or support to the tank vessels directly transiting to the terminal, or to the terminal itself, and that have reported their movements to the Vessel Traffic Service, as required under 33 CFR part 161 and § 165.1704, may operate as necessary to ensure safe passage of tank vessels to and from the terminal.
(3) All persons and vessels must comply with the instructions of the Coast Guard Captain of the Port and the designated on-scene patrol personnel. These personnel comprise commissioned, warrant, and petty officers of the Coast Guard. Upon being hailed by a vessel displaying a U.S. Coast Guard ensign, by siren, radio, flashing light, or other means, the operator of the vessel must proceed as directed. Coast Guard Auxiliary and local or state agencies may be present to inform vessel operators of the requirements of this section and other applicable laws.
Environmental Protection Agency (EPA).
Announcement of public hearing.
The EPA is announcing a public hearing for the “Supplemental Proposal for the Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule).” The hearing will be held on June 3, 2004, in Alexandria, Virginia. For convenience, we refer to the supplemental proposal as the Supplemental Proposal, and the Clean Air Interstate Rule as the CAIR.
On January 30, 2004, the EPA proposed a rule that we now term the Clean Air Interstate Rule (CAIR). This proposal would require 29 States in the eastern part of the country and the District of Columbia to reduce emissions of sulfur dioxide (SO
The public hearing for the supplemental proposal for the Clear Air Interstate Rule will be held on June 3, 2004. Please refer to
The hearing will be held at the Holiday Inn Select, Old Town Alexandria, 480 King Street, Alexandria, Virginia 22314, phone 703-549-6080.
Written comments on this Supplemental Proposal may also be submitted to EPA electronically, by mail, by facsimile, or through hand delivery/courier. Please refer to the Supplemental Proposal for the addresses and detailed instructions.
Documents relevant to this action are available for public inspection at the EPA Docket Center, located at 1301 Constitution Avenue, NW., Room B102, Washington, DC between 8:30 a.m. and 4:30 p.m., Monday through Friday, excluding legal holidays. A reasonable fee may be charged for copying. Documents are also available through EPA's electronic Docket system at
The EPA Web site for this rulemaking, which will include information about the public hearing announced today, is at
If you would like to speak at the public hearing or have questions concerning it, please contact Jo Ann Allman at the address given below under
The public hearing will provide interested parties the opportunity to present data, views, or arguments concerning issues raised in today's proposed rule. The EPA may ask clarifying questions during the oral presentations, but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as any oral comments and supporting information presented at the public hearing. Written comments must be postmarked by the last day of the comment period, as specified in the proposal.
The public hearing for the “Supplemental Proposal for the Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule)” will be held on June 3, 2004, in Alexandria, Virginia. The hearing will begin at 9 and end at 5. The meeting facility and phone number is provided above under
If you would like to present oral testimony at the hearing, please notify Jo Ann Allman, U.S. EPA, Office of Air Quality Planning and Standards, Air Quality Strategies and Standards Division, C539-02, Research Triangle Park, NC 27711, telephone (919) 541-1815, e-mail
We will be able to provide equipment for commenters to show overhead slides or make computerized slide presentations only if we receive requests in advance. Commenters should notify Jo Ann Allman if they will need specific equipment. The EPA encourages commenters to provide written versions of their oral testimonies either electronically on computer disk or CD ROM or in paper copy.
The hearing schedule, including the speaker list, will be posted on EPA's Web pages for the proposal at
The EPA will hold a separate public hearing for a related proposal, “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations,” at the same facility on the following day, June 4, 2004. The EPA is holding the hearings on consecutive days to facilitate travel plans for persons wishing to attend both hearings.
The Supplemental Proposal for the CAIR is available on EPA's Web site for the CAIR rulemaking at
The EPA has established the official public docket for the CAIR under Docket ID No. OAR-2003-0053. Please refer to the proposal for detailed information on accessing information related to the proposal.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed 2004 specifications for the Atlantic bluefish fishery; request for comments.
NMFS proposes 2004 specifications for the Atlantic bluefish fishery, including total allowable landings (TAL), state-by-state commercial quotas, recreational harvest limits, and recreational possession limits. The intent of the specifications is to conserve and manage the bluefish resource.
Public comments must be received no later than 5 p.m., Eastern Standard Time, on June 3, 2004.
You may submit comments, identified by Docket Number 040507144-4144-01 or RIN Number 0648-AQ85, by any of the following methods:
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• E-mail:
• Fax: 978-281-9135.
• Mail: Patricia A. Kurkul, Regional Administrator, Northeast Regional Office, NMFS, One Blackburn Drive, Gloucester, MA 01930-2298. Please mark the outside of the envelope, “Comments--2004 Bluefish Specifications.”
Copies of supporting documents, including the Environmental Assessment (EA), Initial Regulatory Flexibility Analysis (IRFA), and the Essential Fish Habitat Assessment (EFHA) are available from: Daniel Furlong, Executive Director, Mid-Atlantic Fishery Management Council, Room 2115, Federal Building, 300 South New Street, Dover, DE 19904-6790. The EA, IRFA, and EFHA are accessible via the Internet at
Myles Raizin, Fishery Policy Analyst, (978) 281-9104.
Regulations implementing the Atlantic Bluefish Fishery Management Plan (FMP) prepared by the Mid-Atlantic Fishery Management Council (Council) appear at 50 CFR part 648, subparts A and J. Regulations requiring annual specifications are found at § 648.160. The FMP requires that the Council recommend, on an annual basis, a TAL, which is comprised of a commercial quota and a recreational harvest limit.
The FMP also requires that: (1) The TAL for any given year be set based on the fishing mortality rate (F) resulting from the stock rebuilding schedule contained in the FMP, or the estimated F in the most recent fishing year, whichever is lower; and (2) a total of 17 percent of the TAL be allocated to the commercial fishery, as a quota, with the remaining 83 percent allocated as a recreational harvest limit, with the stipulation that, if 17 percent of the TAL is less than 10.50 million lb (4.762 million kg) and the recreational fishery is not projected to land its harvest limit for the upcoming year, the commercial fishery may be allocated up to 10.50 million lb (4.762 million kg) as its quota, provided that the combination of the projected recreational landings and the commercial quota does not exceed TAL.
The Council's recommendations must include supporting documentation, as appropriate, concerning the environmental, economic, and social impacts of the recommendations. NMFS is responsible for reviewing these recommendations to assure they achieve the FMP objectives. NMFS then publishes proposed specifications in the
On August 5, 2003, the Council adopted specifications for the 2004 Atlantic bluefish fishery. The Council submitted its recommendations and analysis November 24, 2003, and submitted a supplement to clarify and correct the document on January 20, 2004. NMFS has reviewed the Council's recommendation and has found it complies with the FMP objectives. Although these proposed specifications are intended to be in place at the beginning of the fishing year, the delay in implementing the proposed specifications for 2004 should not compromise this fishery because the Atlantic States Marine Fisheries Commission (ASMFC) measures, which are already in place in applicable states, provide equivalent conservation for bluefish. NMFS is proposing to implement the Council's recommended specifications.
For the 2004 fishery, the stock rebuilding program in the FMP restricts F to 0.31. However, the 2002 fishery (the most recent fishing year for which F can be calculated) produced an F of only 0.184. So, in accordance with the FMP, the measures proposed for 2004 were developed to achieve F=0.184. Projection results indicate that the bluefish stock will increase to an estimated biomass of 165.853 million lb (365.504 million kg) in 2004. This biomass can produce a Total Allowable Catch (TAC) of 34.215 million lb (15.5 million kg) in 2004 at F=0.184. The proposed TAL for 2004 is derived from this value by subtracting estimated discards of 2.365 million lb (1.06 million kg) from the TAC. This results in a proposed TAL for 2004 of 31.85 million lb (14.45 million kg).
If the TAL for the 2004 fishery were allocated based on the percentages specified in the FMP, the commercial quota would be 5.414 million lb (2.456 million kg), with a recreational harvest limit of 26.435 million lb (11.990 million kg). However, recreational landings from the last several years were much lower than the recreational allocation for 2004, ranging between 8.30 and 15.5 million lb (3.74 and 7.05 million kg, respectively). Since the recreational fishery is not projected to land its 26.435 million-lb (11.990 million-kg) harvest limit in 2004, the FMP allows the specification of a commercial quota of up to 10.5 million lb (4.76 million kg). Therefore, consistent with the FMP and regulations governing the bluefish fishery, the Council recommended, and NMFS proposes, to transfer 5.085 million lb (2.036 million kg) from the initial 2004 recreational allocation of 26.435 million lb (11.990 million kg), resulting in 21.350 million lb (9.684 million kg) for a 2004 proposed recreational harvest limit and a proposed quota of 10.5 million lb (4.76 million kg). The proposed 2004 commercial quota would be the same as was allocated in 2003 and also as implemented by the states for 2004 under the ASMFC's Interstate Fishery Management Plan for Atlantic Bluefish. A Notice of Request for Proposals was published in the
The Council also recommends maintaining the current recreational possession limit of 15 fish to meet the recreational harvest limit.
The annual commercial quota for bluefish will be distributed to the states (see Table 1.). Proposed state commercial allocations for the 2004 commercial quotas are shown in the table below, based on the percentages specified in the FMP, less the proposed RSA allocation.
This action is authorized by 50 CFR part 648 and has been determined to be not significant for purposes of Executive Order 12866.
The Council prepared an IRFA that describes the impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for the action are provided in the preamble of this proposed rule. A summary of the IRFA follows:
An active participant in the commercial bluefish fishery sector is defined as being any vessel that reported having landed one or more pounds of bluefish to NMFS-permitted dealers during calendar year 2002. Vessels fishing for bluefish with a Federal permit intending to sell their catch must do so to NMFS-permitted dealers. All vessels affected by this rulemaking have gross receipts less than $3.5 million and are considered to be small entities under the Regulatory Flexibility Act (RFA). Since there are no large entities participating in this fishery, there are no disproportionate effects resulting from small versus large entities. Since costs are not readily available, vessel profitability cannot be determined directly. Therefore, changes in gross revenue were used as a proxy for profitability. Of the active, Federally-permitted vessels in 2002, 928 landed bluefish from Maine to North Carolina. Dealer data do not cover vessel activity from South Carolina to Florida. South Atlantic Trip Ticket Report data indicate that 1,004 vessels landed bluefish in North Carolina, including those with Federal permits and those fishing only in state waters. These data also indicate that bluefish landings in South Carolina and Georgia represented less than 1/10 of 1 percent of total landings. Therefore, it was assumed that no vessels landed bluefish from those states. According to South Atlantic Trip Ticket Report data, 101 commercial vessels landed bluefish to dealers on Florida's east coast in 2002.
In addition, in 2002, approximately 2,063 party/charter vessels caught bluefish in either state or Federal waters. All of these vessels are considered small entities under the RFA having gross receipts of less than $5 million annually. Since the possession limits would remain at 15 fish per person, there should be no impact on demand for party/charter vessel fishing, and therefore, no impact on revenues earned by party/charter vessels.
The Council analyzed three alternatives. The TAL recommendation and RSA are unchanged in the alternatives, as the TAL is the level that would achieve the target F in 2004, and the RSA is the amount allocated through the grants process. The difference between the preferred alternative (Alternative 1) and Alternatives 2 and 3, therefore, relates only to the manner in which the overall TAL is allocated between the commercial and recreational components of the bluefish fishery. Under Alternative 1, the commercial quota allocation is 10.401 million lb (4.718 million kg), with a recreational harvest limit of 21.150 million lb (9.68 million kg). Under Alternative 2, the commercial quota allocation is 5.363 million lb (2.433 million kg) with a recreational harvest limit of 26.188 million lb (11.878 million kg). Under Alternative 3, the commercial quota allocation is 9.493 million lb (4.346 million kg) with a recreational harvest limit of 22.058 million lb (10.100 million kg).
The preferred commercial quota represents a less than 1-percent decrease from the 2003 commercial quota, with the decrease due to the amount specified for the RSA. The 2004 recreational harvest limit would be 21 percent lower than the recreational harvest limit specified for 2003. However, the recreational harvest limit would still be about twice the recreational landings for 2002. Bluefish landings for the 2000-2002 period
The allocations specified in Alternative 2 represent a 49-percent decrease in the commercial quota from the 2003 commercial quota, and a 2-percent decrease in the recreational harvest limit from the 2003 recreational harvest limit. The 2004 recreational harvest limit would be more than twice the 2003 projected recreational landings. The reduction in the commercial quota would cause 15 vessels to have revenue losses of 50 percent or more, while 123 would have revenue losses from 5 to 49 percent. An additional 790 vessels would incur revenue losses of less than 5 percent of their total ex-vessel revenue. Also, evaluation of South Atlantic Trip Ticket Reports indicates an average of 4.43 and 0.03-percent reductions in revenue for fishermen that land bluefish in North Carolina and Florida, respectively.
Alternative 3 represents a 9-percent decrease in the total allowable commercial landings for bluefish in 2003 versus 2004. The 2004 recreational harvest limit would be 17 percent lower than the estimated recreational landings in 2003. Under this scenario, a total of 53 vessels would incur revenue losses from 5 to 19 percent due to the reduction in the commercial quota. An additional 875 commercial vessels would incur revenue losses of less than 5 percent of their total ex-vessel revenue. Also, evaluation of South Atlantic Trip Ticket Reports indicate reduction in revenues of 0.82 and 0.05-percent for fishermen that land bluefish in North Carolina and Florida, respectively.
The Council further analyzed the impacts on revenues of the proposed RSA specified in all three alternatives. The social and economic impacts of this proposed RSA are expected to be minimal. Assuming the full RSA is allocated for bluefish, the set-aside amount could be worth as much as $101,235 dockside, based on a 2002 price of $0.34 per pound for bluefish. Assuming an equal reduction among all 928 active dealer reported vessels, this could mean a reduction of about $109 per individual vessel. Changes in the recreational harvest limit would be insignificant (less than 1 percent decrease), if 2 percent of the TAL is used for research. It is unlikely that there would be negative impacts. A copy of this analysis is available from the Council (see
Forest Service, USDA.
Notice of meeting.
The Mendocino County Resource Advisory Committee (RAC) will meet May 21, 2004, in Willits, California. Agenda items to be covered include: (1) Approval of minutes, (2) public comment, (3) sub-committees, (4) prioritize prior interest list, (5) evaluation criteria, tracking and monitoring forms, (6) matters before the group-discussion only, (9) next agenda and meeting date.
The meeting will be held on May 21, 2004, from 9 a.m. to 12 noon.
The meeting will be held at the Mendocino County Museum, located at 400 E. Commercial St., Willits, California.
Roberta Hurt, Committee Coordinator, USDA, Mendocino National Forest, Covelo Ranger District, 78150 Covelo Road, Covelo, CA 95428. (707) 983-8503; e-mail
The meeting is open to the public. Persons who wish to bring matters to the attention of the Committee may file written statements with the Committee staff by May 18, 2004. Public comment will have the opportunity to address the committee at the meeting.
Grain Inspection, Packers and Stockyards Administration, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), this notice announces the Grain Inspection, Packers and Stockyards Administration's (GIPSA) intention to request an extension for and revision to the currently approved information collection for “Regulations Governing the National Inspection and Weighing System under the United States Grain Standards Act and under the Agricultural Marketing Act of 1946.”
We will consider comments that we receive by July 19, 2004.
We invite you to submit comments on this notice. You may submit comments by any of the following methods:
• E-mail: Send comments via electronic mail to
• Mail: Send hardcopy written comments to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, Washington, DC 20250-3604.
• Fax: Send comments by facsimile transmission to: (202) 690-2755.
• Hand Delivery or Courier: Deliver comments to: Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, Washington, DC 20250-3604.
For information regarding the collection of information activities and the use of the information, contact Tess Butler (202) 720-7486, or at the address listed above.
Copies of this information collection can be obtained from Cathy McDuffie, the Information Management Specialist, at (301) 734-5190.
Congress enacted the United States Grain Standards Act (USGSA) (7 U.S.C. 71
The USGSA, with few exceptions, requires official certification of export grain sold by grade. Official services are provided, upon request, for grain in domestic commerce. The AMA authorizes similar inspection and weighing services, upon request, for rice, pulses, flour, corn meal, and certain other agricultural products. Conversely, the regulations promulgating the USGSA and AMA require specific information collection and recordkeeping necessary to carry out requests for official services. Applicants for service must specify the kind and level of service desired, the identification of the product, the location, the amount, and other pertinent information in order that official personnel can efficiently respond to their needs.
Official services under the USGSA are provided through FGIS field offices and delegated and/or designated State and private agencies. Delegated agencies are State agencies delegated authority under the Act to provide official inspection service, Class X or Class Y weighing services, or both, at one or more export port locations in the State. Designated
Official services under the AMA are performed, upon request, on a fee basis for domestic and export shipments either by FGIS employees, individual contractors, or cooperators. Contractors are persons who enter into a contract with FGIS to perform specified inspection services. Cooperators are agencies or departments of the Federal Government which have an interagency agreement or State agencies which have a reimbursable agreement with FGIS.
Import Administration, International Trade Administration, Department of Commerce.
May 19, 2004.
Irina Itkin or Elizabeth Eastwood, Office of AD/CVD Enforcement, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0656 or (202) 482-3874, respectively.
In accordance with sections 735(a) and 777(i)(1) of the Tariff Act of 1930, as amended, (the Act), on April 16, 2004, the Department published its notice of final determination of sales at less than fair value (LTFV) in the investigation of certain color television receivers (CTVs) from the People's Republic of China (PRC).
After analyzing Konka's, TCL's, and the petitioners' submissions, we have determined, in accordance with 19 CFR 351.224(e), that we made the following general ministerial errors in our calculations performed for the final determination:
• We inadvertently included values associated with zero quantities in our calculation of the surrogate value for diodes;
• We inadvertently excluded certain costs from the denominators of the financial ratios calculated for each of the surrogate producers selected in this case;
• We treated packing expenses inconsistently in our calculations for the surrogate CTV producers and the PRC respondents;
• We inadvertently calculated the cost of plastic parts for Konka using plastic part consumption figures that did not correspond with the POI;
• We incorrectly tested the mark-ups charged by Konka's affiliated market-economy supplier by comparing this amount to the costs incurred by a different affiliated party;
• We inadvertently included freight costs for one of Konka's market economy inputs when the price charged was on a delivered basis;
• We inadvertently double-counted certain market-economy freight expenses for TCL; and
• We inadvertently excluded certain factor values when calculating the normal value for one of Xiamen Overseas Chinese Electronic Co., Ltd.'s (XOXECO's) products.
Correcting these errors resulted in revised margins for Sichuan Changhong Electric Co., Ltd., Konka, TCL, and XOXECO. In addition, we have revised the calculation of the all others rate accordingly.
For a detailed discussion of the ministerial errors noted above, as well
Therefore, in accordance with 19 CFR 351.224(e), we are amending the final determination of sales at LTFV in the antidumping duty investigation of CTVs from the PRC. The revised dumping margins are as follows:
In accordance with section 735(c)(1)(B) of the Act, we are directing Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of CTVs from the PRC. The CBP shall require a cash deposit or the posting of a bond equal to the estimated amount by which the normal value exceeds the U.S. price as indicated in the chart above. These instructions suspending liquidation will remain in effect until further notice. This determination is issued and published pursuant to sections 735(d) and 777(i)(1) of the Act.
Notice of application to amend an Export Trade Certificate of Review.
The Office of Export Trading Company Affairs (“OETCA”), International Trade Administration, U.S. Department of Commerce, has received an application to amend an Export Trade Certificate of Review (“Certificate”). This notice summarizes the proposed amendment and requests comments relevant to whether the Certificate should be issued.
Jeffrey C. Anspacher, Director, Office of Export Trading Company Affairs, International Trade Administration, (202) 482-5131 (this is not a toll-free number) or by e-mail at
Title III of the Export Trading Company Act of 1982 (15 U.S.C. 4001-21) authorizes the Secretary of Commerce to issue Export Trade Certificates of Review. An Export Trade Certificate of Review protects the holder and the members identified in the Certificate from State and Federal government antitrust actions and from private treble damage antitrust actions for the export conduct specified in the Certificate and carried out in compliance with its terms and conditions. Section 302(b)(1) of the Export Trading Company Act of 1982 and 15 CFR 325.6(a) require the Secretary to publish a notice in the
Interested parties may submit written comments relevant to the determination whether an amended Certificate should be issued. If the comments include any privileged or confidential business information, it must be clearly marked and a non-confidential version of the comments (identified as such) should be included. Any comments not marked privileged or confidential business information will be deemed to be non-confidential. An original and five (5) copies, plus two (2) copies of the non-confidential version, should be submitted no later than 20 days after the date of this notice to: Office of Export Trading Company Affairs, International Trade Administration, U.S. Department of Commerce, Room 1104H, Washington, DC 20230, or transmit by e-mail at
A summary of the application for an amendment follows.
The USSA original Certificate was issued on June 3, 1986 (51 FR 20873, June 9, 1986), and last amended on April 3, 2001 (66 FR 35773, July 9, 2001).
1. Add each of the following companies as a new “Member” of the Certificate within the meaning of section 325.2(l) of the Regulations (15 CFR 325.2(l) (2004)): Bayer CropScience, Research Triangle Park, North Carolina (Controlling Entity: Bayer Corporation, Bayer CropScience AG, D-40789 Monheim am Rhein,
2. Change the listing of the Members of the Certificate to reflect corporate organizational changes: Aventis Crop Science, USA LP to Bayer CropScience (Aventis Crop Science was acquired by Bayer Corporation); Phillips Petroleum Company merged with Conoco, Inc., to form ConocoPhillips; and Solvay Minerals, Inc., combined with Solvay Interox and Solvay Performance Chemicals to form Solvay Chemicals, Inc. (Controlling Entity: Solvay America, Inc.).
3. Delete the following members: Aventis Crop Science, USA LP, Research Triangle Park, North Carolina (Controlling Entity: Aventis Crop Science Holding SA, 69009 Lyon, France); Phillips Petroleum Company, Bartlesville, Oklahoma; and Solvay Minerals, Inc., Houston, Texas (Controlling Entity: Solvay S.A., Brussels, Belgium).
International Trade Administration (ITA), Department of Commerce.
Notice and request for applications.
ITA is soliciting U.S. export promotion projects to be conducted by eligible entities for periods of up to three years. Project award periods normally begin between October 1, 2004 and January 1, 2005, but may begin as late as April 1, 2005. MDCP awards help to underwrite the start-up costs of new export ventures that export multipliers are often reluctant to undertake without Federal Government support. MDCP aims to develop, maintain and expand foreign markets for non-agricultural goods and services produced in the United States.
Proposals must be received by ITA no later than 5 p.m. e.s.t., July 14, 2004. A public meeting to discuss the competition will be held on June 23, 2004, at 10 a.m. in Room 6059 at the address indicated below.
Proposals must be submitted to ITA, U.S. Department of Commerce, HCHB 3215; Washington, DC 20230, or via
Interested parties who are unable to access information via Internet or who have questions may contact Mr. Brad Hess by mail (
15 U.S.C. 4723.
(1) Export Success Potential (20%). This is the potential of the project to generate export success stories and/or export initiatives in both the short-term and medium-term.
(2) Performance Measures (20%). Applicants must provide quantifiable estimates of how the project will increase or enhance the U.S. industry's export presence in the foreign market(s).
(3) Partnership and Priorities (20%). This criterion indicates the degree to which the project initiates or enhances partnership with ITA and the degree to which the proposal furthers or is compatible with ITA's priorities.
(4) Creativity and Capacity (20%). Applicants demonstrate creativity, innovation, and realism in the project work plan as well as their institutional capacity to carry out the work plan.
(5) Budget and Sustainability (20%). This criterion indicates the reasonableness and effectiveness of the itemized budget for project activities, the amount of the cash match that is readily available, and the probability that the project can be continued on a self-sustained basis after the completion of the award.
The five criteria together constitute the application score. At 20 points per criterion, the total possible score is 100.
The ITA priorities referred to under Evaluation Criteria (3) and Selection Factor (2) are listed below. ITA is interested in receiving proposals to promote U.S. exports that include, but are not limited to, projects that: (1) Improve the competitiveness of U.S. manufacturing and service industries by addressing impediments to innovation
The Department of Commerce Pre-Award Notification Requirements for Grants and Cooperative Agreements contained in the
This document contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA). The use of Standard Forms 424 and 424A, 424B, SF-LLL, and CD-346 has been approved by OMB under the respective control numbers 0348-0043, 0348-0044, 0348-0040, 0348-0046, and 0605-0001. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA unless that collection of information displays a currently valid OMB control number.
This notice has been determined to be not significant for purposes of Executive Order 12866.
It has been determined that this notice does not contain policies with Federalism implications as that term is defined in Executive Order 13132.
Prior notice and an opportunity for public comments are not required by the Administrative Procedure Act or any other law for this notice concerning grants, benefits, and contracts (5 U.S.C. section 553(a)(2)). Because notice and opportunity for comment are not required pursuant to 5 U.S.C. 553 or any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The National Marine Fisheries Service (NOAA Fisheries) is hosting a public meeting to present a draft of the NOAA Fisheries Strategic Plan for Recreational Fisheries 2005-2010. The primary goal of the meeting is to collect public input on the DRAFT plan. Additional meetings are planned for Texas, Alabama, and North Carolina. Specific dates times and locations of these meetings will be published in the
The meetings will be held on June 3 and June 26, 2004. See
The meetings will be held in Peabody, MA and Honolulu, HI. See
Mr. Michael Kelly, Division Chief, Office of Constituent Services at (301) 713-2379.
1. Directions: The hotel is located directly on Route 1 on the northbound side. From 495/93/24/95 South. Take 128 Northbound. Take exit 44A onto 1 South.Turn around at first set of lights, staying to the left. Turn onto Rt. 1 North. Hotel is down on the right. From 95 North: Take 128 to Topfield/Boston exit. Follow Rte. 1 South to first set of lights. Turn around to Rte. 1 North. Hotel is down on the right. From Boston: Follow 93 to Tobin Bridge. Take Rte. North into Peabody.
2. Directions: From the Honolulu International Airport: Travel east on Nimitz Highway for 7 miles toward Waikiki, turn left on Atkinson Drive.After the Ala Moana Center, Hotel is on the left immediately after the first light.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Michael Kelly at 301 713-9504 at least 5 days prior to the meeting date.
Committee for the Implementation of Textile Agreements (CITA).
Issuing a directive to the Commissioner, Bureau of Customs and Border Protection adjusting limits.
May 19, 2004.
Naomi Freeman, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-4212. For information on the quota status of these limits, refer to the
Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as amended.
The current limits for certain categories are being adjusted for swing, carryover, and the recrediting of unused carryforward.
A description of the textile and apparel categories in terms of HTS numbers is available in the CORRELATION: Textile and Apparel Categories with the Harmonized Tariff Schedule of the United States (see
Dear Commissioner: This directive amends, but does not cancel, the directive issued to you on December 10, 2003, by the Chairman, Committee for the Implementation of Textile Agreements. That directive concerns imports of certain cotton, wool and man-made fiber textile products, produced or manufactured in Turkey and exported during the twelve-month period which began on January 1, 2004 and extends through December 31, 2004.
Effective on May 19, 2004, you are directed to adjust the current limits for the following categories, as provided for under the Uruguay Round Agreement on Textiles and Clothing:
The Committee for the Implementation of Textile Agreements has determined that these actions fall within the foreign affairs exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).
Sincerely,
This is to give notice, pursuant to section 10(a) of the Federal Advisory Committee Act, 5 U.S.C. App. 2, section 10(a), that the Commodity Futures Trading Commission's Global Markets Advisory Committee will conduct a
The agenda will consist of the following:
(1) Call to order and introductions.
(2) Report on activities of CFTC Office of International Affairs.
(3) Cross-border clearing issues.
(4) International regulatory coordination/enforcement harmonization.
(5) Other business.
(6) Discussion of future meetings and topics.
(7) Adjournment.
The meeting is open to the public. The Chairman of the Advisory Committee, Commissioner Walter L. Lukken, is empowered to conduct the meeting in a fashion that will, in his judgment, facilitate the orderly conduct of business. Any member of the public who wishes to file a written statement with the Advisory Committee should mail a copy of the statement to the attention of: Global Markets Advisory Committee, c/o Commissioner Walter L. Lukken, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, before the meeting. Members of the public who wish to make oral statements should inform Commissioner Lukken in writing at the foregoing address at least three business days before the meeting. Reasonable provision will be made, if time permits, for oral presentations of no more than five minutes each in duration.
For further information concerning this meeting, please contact David A. Stawich at 202-418-5071.
Department of Education.
Correction notice.
On March 15, 2004, the Department of Education published a notice in the
Federal Interagency Coordinating Council, Education.
Notice of a public meeting.
This notice describes the schedule and agenda of a forthcoming meeting of the Federal Interagency Coordinating Council (FICC). Notice of this meeting is intended to inform members of the general public of their opportunity to attend the meeting. The FICC will engage in policy discussions related to educational services for young children with autism and their families. The meeting will be open and accessible to the general public.
American Institutes for Research, 1000 Thomas Jefferson Street, NW., Conference Rooms B & C, 2nd Floor, Washington, DC 20007.
Obral Vance, U.S. Department of Education, 330 C Street, SW., Room 3090, Switzer Building, Washington, DC 20202. Telephone: (202) 205-5507 (press 3). Individuals who use a telecommunications device for the deaf (TDD) may call (202) 205-5637.
The FICC is established under section 644 of the Individuals with Disabilities Education Act (20 U.S.C. 1444). The FICC is established to: (1) Minimize duplication across Federal, State and local agencies of programs and activities relating to early intervention services for infants and toddlers with disabilities and their families and preschool services for children with disabilities; (2) ensure effective coordination of Federal early invention and preschool programs, including Federal technical assistance and support activities; and (3) identify gaps in Federal agency programs and services and barriers to Federal interagency cooperation. To meet these purposes, the FICC seeks to: (1) Identify areas of conflict, overlap, and omissions in interagency policies related to the provision of services to infants, toddlers, and preschoolers with disabilities; (2) develop and implement joint policy interpretations on issues related to infants, toddlers, and preschoolers that cut across Federal agencies, including modifications of regulations to eliminate barriers to interagency programs and activities; and (3) coordinate the provision of technical assistance and dissemination of best practice information.
Individuals who need accommodations for a disability in order to attend the meeting (i.e., interpreting services, assistive listening devices, material in alternative format) should notify Obral Vance at (202) 205-5507 (press 3) or (202) 205-5637 (TDD) ten days in advance of the meeting. The meeting location is accessible to individuals with disabilities.
Summary minutes of the FICC meetings will be maintained and available for public inspection at the U.S. Department of Education, 330 C Street, SW., Room 3090, Switzer Building, Washington, DC 20202, from the hours of 9 a.m. to 5 p.m., weekdays, except Federal Holidays.
Department of Energy.
Notice of subsequent arrangement.
This notice is being issued under the authority of Section 131 of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2160). The Department is providing notice of a proposed “subsequent arrangement” under the Agreement for Cooperation Concerning
This subsequent arrangement concerns the retransfer of seventeen 18-element driver fuel bundles, totaling 22,000 grams uranium, 4,355 g of which is in the isotope uranium-235, from Atomic Energy of Canada, Limited to the Korea Atomic Energy Research Institute (KAERI) Hanaro Reactor Center. The material, which is currently located Chalk River, Ontario, will be used by KAERI for additional fueling for the Hanaro Reactor Center. The material, which was originally obtained from the U.S. Department of Energy, Oak Ridge, exported to Canada under export license number XSNM3305.
In accordance with Section 131 of the Atomic Energy Act of 1954, as amended, we have determined that this subsequent arrangement will not be inimical to the common defense and security.
This subsequent arrangement will take effect no sooner than fifteen days after the publication of this notice.
For the Department of Energy.
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (44 U.S.C. 3501
Comments must be submitted on or before July 19, 2004.
Submit your comments, referencing docket ID number OAR-2004-0073, to EPA online using EDOCKET (our preferred method), by mail to: EPA Docket Center, Environmental Protection Agency, Air and Radiation Docket and Information Center, Mail Code 6102T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
Pamela S. Long, Office of Air Quality Planning and Standards, Mail Code C339-03, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-0641; fax number (919) 541-5509; e-mail address:
EPA has established a public docket for this ICR under Docket ID number OAR-2004-0073, which is available for public viewing at the Air Docket in the EPA Docket Center (EPA/DC), EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742. An electronic version of the public docket is available through EPA Dockets (EDOCKET) at
Any comments related to this ICR should be submitted to EPA within 60 days of this notice. EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing in EDOCKET as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose public disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EDOCKET. The entire printed comment, including the copyrighted material, will be available in the public docket. Although identified as an item in the official docket, information claimed as CBI, or whose disclosure is otherwise restricted by statute, is not included in the official public docket, and will not be available for public viewing in EDOCKET. For further information about the electronic docket,
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15. The
The EPA would like to solicit comments to:
(i) Evaluate whether the proposed collection of information is necessary for the proper performance of the
(ii) Evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) Enhance the quality, utility, and clarity of the information to be collected; and
(iv) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
Environmental Protection Agency.
Notice of external peer-review panel meeting.
The U.S. Environmental Protection Agency (EPA) is announcing an external peer-review panel meeting for the draft document entitled, “Proposed Oral Reference Dose (RfD) for Barium and Compounds” (NCEA-S-1683). The document was prepared by EPA's National Center for Environmental Assessment (NCEA) of the Office of Research and Development.
The half-day meeting will begin on June 10, 2004, at 9 a.m. and end at 12 p.m. Members of the public may attend as observers.
The meeting will be held at American Geophysical Union (AGU) Headquarters, 2000 Florida Avenue NW., Washington, DC 20009. Under an Interagency Agreement with EPA and the Department of Energy, the Oak Ridge Institute of Science and Education (ORISE) is organizing, convening, and conducting the peer-review meeting. To attend the meeting, register by June 1, 2004, by visiting:
Questions regarding registration and logistics should be directed to Leslie Shapard, Oak Ridge Institute of Science and Education (ORISE), MS-17, PO Box 117, Oak Ridge, TN 37831, 865-241-5784 (telephone), 865-241-3168 (facsimile) or
The EPA is seeking external peer review on the draft document entitled: “Proposed Oral Reference Dose (RfD) for Barium and Compounds.” EPA's Office of Research and Development (ORD), National Center for Environmental Assessment (NCEA), developed the proposed RfD in response to a Request for Correction that was submitted to EPA in 2002. The request was submitted to the Agency in accordance with the
EPA has established an official public docket for this peer review announcement under Docket ID No. ORD-2004-0005. The official public docket consists of the document referenced in this notice and a list of charge questions that have been submitted to the external peer reviewers. Both the document and charge are available on the Internet at
Environmental Protection Agency (EPA).
Notice; request for public comment.
In accordance with the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, (“CERCLA”), 42 U.S.C. 9601-9675, notice is hereby given that a proposed prospective purchaser agreement (“Purchaser Agreement”) associated with the Whitmoyer Laboratories Superfund Site, Myerstown, Lebanon County, Pennsylvania was executed by the Environmental Protection Agency and the Department of Justice and is now subject to public comment, after which the United States may modify or withdraw its consent if comments received disclose facts or considerations which indicate that the Purchaser Agreement is inappropriate, improper, or inadequate. The Purchaser Agreement would resolve certain potential EPA claims under sections 106 and 107 of CERCLA, 42 U.S.C. 9606, 9607, against the Jackson Township and Jackson Township Recreational Authority (collectively, the “Purchaser”). The settlement would require the Purchaser to, among other things, use the Property as a recreational green space in accordance with use restrictions to preserve the protective site features and the monitoring, routine maintenance and reporting requirements set forth in the Purchaser Agreement.
For thirty (30) days following the date of publication of this notice, the Agency will receive written comments relating to the Purchaser Agreement. The Agency's response to any comments received will be available for public inspection at the U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, PA 19103.
Comments must be submitted on or before June 18, 2004.
The Purchaser Agreement and additional background information relating to the Purchaser Agreement are available for public inspection at the U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, PA 19103. A copy of the Purchaser Agreement may be obtained from Patricia C. Miller (3RC41), Senior Assistant Regional Counsel, U.S. Environmental Protection Agency, 1650 Arch Street, Philadelphia, PA 19103. Comments should reference the “Whitmoyer Laboratories Superfund Site, Prospective Purchaser Agreement” and “EPA Docket No. CERC-03-2004-0003 PP” and should be forwarded to Patricia C. Miller at the above address.
Patricia C. Miller (3RC41), Senior Assistant Regional Counsel, U.S. Environmental Protection Agency, 1650 Arch Street, Philadelphia, PA 19103, Phone: (215) 814-2662.
Environmental Protection Agency.
Notice of proposed prospective purchaser agreement and opportunity for public comment.
The United States Environmental Protection Agency (“EPA”) is proposing to enter into an administrative settlement to resolve claims under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”), 42 U.S.C. 9601
Comments must be provided on or before June 18, 2004.
Comments should be addressed to the U.S. Environmental Protection Agency, Office of Regional Counsel, 290 Broadway-17th Floor, New York, New York 10007-1866 and should refer to: In the Matter of the General Color Company Superfund Site, U.S. EPA Region II Docket No. CERCLA-02-2004-2013.
U.S. Environmental Protection Agency, Office of Regional Counsel, 290 Broadway-17th Floor, New York, New York 10007-1866, Attention: Alexandra Ince, Esq. (212) 637-3144.
In accordance with EPA guidance, notice is hereby given of a proposed administrative settlement concerning the General Color Company Superfund Site, located in the City of Camden, Camden County, New Jersey. CERCLA provides EPA the authority to settle certain claims for response costs incurred by the United States with the approval of the Attorney General of the United States.
The proposed settlement provides that Westfield Acres Urban Renewal Associates II, LP, a private developer which plans on redeveloping the General Color Company Superfund Site, will perform work at the Site in return for a covenant not to sue under sections 106 or 107 of CERCLA from the United States. EPA is also waiving any liens it may have at the General Color Company Superfund Site under sections 107(l) and 107(r) of CERCLA.
A copy of the proposed administrative settlement agreement and covenant not to sue, as well as background information relating to the settlement, may be obtained in person or by mail from EPA's Region II Office of Regional Counsel, 290 Broadway-17th Floor, New York, New York 10007-1866.
Environmental Protection Agency.
Notice of proposed administrative settlement and opportunity for public comment.
The United States Environmental Protection Agency (EPA) is proposing to enter into an administrative settlement to resolve certain claims under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA). Notice is being published to inform the public of the proposed settlement and of the opportunity to comment.
The settlement requires thirty-one (31) Settling Parties to make seven payments totaling $10,000,000 to resolve their potential liability for performance of the Remedial Investigation/Feasibility Study (“RI/FS”) and for Past Response Costs and Future Response Costs incurred and to be incurred in connection with the RI/FS for the Lower Passaic River Study Area. EPA has reserved its rights in the event of cost overruns. For thirty (30) days following the date of publication of this notice, EPA will receive written comments relating to the settlement. EPA will consider all comments received and may modify or withdraw its consent to the settlement if comments received disclose facts or considerations that indicate that the proposed settlement is inappropriate, improper or inadequate.
EPA's response to any comments received will be available for public inspection at EPA Region II, 290 Broadway, New York, New York 10007-1866.
Comments must be submitted on or before June 18, 2004.
The proposed settlement is available for public inspection at EPA Region II offices at 290 Broadway, New York, New York 10007-1866. Comments should reference the Diamond Alkali Superfund Site located in and about Essex, Hudson, Bergen and Passaic Counties, New Jersey, Index No. CERCLA-02-2004-2011. To request a copy of the proposed settlement agreement, please contact the individual identified below.
Kedari Reddy, Assistant Regional Counsel, New Jersey Superfund Branch, Office of Regional Counsel, U.S. Environmental Protection Agency, 17th Floor, 290 Broadway, New York, New York 10007-1866. Telephone: 212-637-3106.
Federal Communications Commission.
Notice of meeting.
The Federal Communications Commission will hold a Localism Task Force hearing in Rapid City, South Dakota, on May 26, 2004. The purpose of the hearing is to gather information from consumers, industry, civic organizations, and others on broadcasters' service to their local communities.
The hearing will be held on Wednesday, May 26, 2004, from 5:30 p.m. to 9 p.m.
The hearing will be held at the Surbeck Student Center Ballroom at the South Dakota School of Mines and Technology, located at 501 East Saint Joseph Street, Rapid City, South Dakota.
Rebecca Lockhart, Media Bureau, 202-418-7777.
The Federal Communications Commission (FCC) will hold a Localism Task Force hearing on the subject of localism, on May 26, 2004, in Rapid City, South Dakota. Several FCC Commissioners will preside. The purpose of the hearing is to gather information from consumers, industry, civic organizations, and others on broadcasters' service to their local communities. An important focus of the hearing will be to gather information and to conduct outreach for the ongoing nationwide round of broadcast station license renewals. The designated speakers will include representatives from consumer and advocacy groups as well as broadcasters. The hearing format will enable members of the public to participate via an “open microphone” session. Additional details regarding the designated speakers, agenda, and hearing format will be announced shortly.
1. Open captioning will be provided for this event. Other reasonable accommodations for people with disabilities are available upon request. Please include a description of the accommodation needed, providing as much detail as you can, as well as contact information in case additional information is needed. Please make your request as early as possible. Last minute requests will be accepted, but may be impossible to fulfill. Please send a request by e-mail to
2. A live audiocast of the hearing will be available at the Commission's Web site at
Pursuant to the provisions of the “Government in the Sunshine Act” (5 U.S.C. 552b), notice is hereby given that the Federal Deposit Insurance Corporation's Board of Directors will meet in open session at 10 a.m. on Friday, May 21, 2004, to consider the following matters:
No substantive discussion of the following items is anticipated. These matters will be resolved with a single vote unless a member of the Board of Directors requests that an item be moved to the discussion agenda.
Disposition of minutes of previous Board of Directors' meetings.
Summary reports, status reports, and reports of actions taken pursuant to authority delegated by the Board of Directors.
Memorandum and resolution re: Notice of Proposed Rulemaking—12 CFR part 364: Proper Disposal of
Memorandum and resolution re: Notice of Proposed Rulemaking—Proposed Amendments to Part 327 of the FDIC Rules and Regulations Concerning Certified Statements and Requests for Review of Assessment Computations.
The meeting will be held in the Board Room on the sixth floor of the FDIC Building located at 550 17th Street, NW., Washington, DC.
The FDIC will provide attendees with auxiliary aids (
Requests for further information concerning the meeting may be directed to Mr. Robert E. Feldman, Executive Secretary of the Corporation, at (202) 898-7043.
Pursuant to the provisions of the “Government in the Sunshine Act” (5 U.S.C. 552b), notice is hereby given that at 10:30 a.m. on Friday, May 21, 2004, the Federal Deposit Insurance Corporation's Board of Directors will meet in closed session, pursuant to sections 552b(c)(2), (c)(4), (c)(6), (c)(8), (c)(9)(A)(ii), and (c)(10) of title 5, United States Code, to consider matters relating to the Corporation's corporate and supervisory activities.
The meeting will be held in the Board Room on the sixth floor of the FDIC Building located at 550—17th Street, NW., Washington, DC.
Requests for further information concerning the meeting may be directed to Mr. Robert E. Feldman, Executive Secretary of the Corporation, at (202) 898-7043.
The Commission hereby gives notice of the filing of the following agreements under the Shipping Act of 1984. Interested parties can review or obtain copies of agreements at the Washington, DC offices of the Commission, 800 North Capitol Street, NW., Room 940. Interested parties may submit comments on an agreement to the Secretary, Federal Maritime Commission, Washington, DC 20573, within 10 days of the date this notice appears in the
By Order of the Federal Maritime Commission.
Board of Governors of the Federal Reserve System.
On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board of Governors of the Federal Reserve System (Board) its approval authority under the Paperwork Reduction Act, as per 5 CFR 1320.16, to approve of and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board under conditions set forth in 5 CFR 1320
The following information collections, which are being handled under this delegated authority, have received initial Board approval and are hereby published for comment. At the end of the comment period, the proposed information collections, along with an analysis of comments and recommendations received, will be submitted to the Board for final approval under OMB delegated authority. Comments are invited on the following:
a. Whether the proposed collections of information are necessary for the proper performance of the Federal Reserve's functions; including whether the information has practical utility;
b. The accuracy of the Federal Reserve's estimate of the burden of the proposed information collections, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected; and
d. Ways to minimize the burden of information collections on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments must be submitted on or before July 19, 2004.
You may submit comments, identified by FR 4006 or FR 2046, by any of the following methods:
• Agency Web Site:
• Federal eRulemaking Portal:
• E-mail:
• Fax: (202) 452-3819 or (202) 452-3102.
• Mail: Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551.
All public comments are available from the Board's Web site at
A copy of the proposed forms and instructions, the Paperwork Reduction Act Submission (OMB 83-I), supporting statements, and other documents that will be placed into OMB's public docket files once approved may be requested from the agency clearance officer, whose name appears below.
Michelle E. Long, Acting Federal Reserve Board Clearance Officer ((202) 452-3829), Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869), Board of Governors of the Federal Reserve System, Washington, DC 20551.
Proposal to approve under OMB delegated authority the extension for three years, without revision, of the following reports:
1.
2.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal
Board of Governors of the Federal Reserve System, May 13, 2004.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the office of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than June 3, 2004.
Board of Governors of the Federal Reserve System, May 14, 2004.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Additional information on all bank holding companies may be obtained from the National Information Center website at
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than June 11, 2004.
Board of Governors of the Federal Reserve System, May 13, 2004.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Additional information on all bank holding companies may be obtained from the National Information Center website at
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than June 13, 2004.
Board of Governors of the Federal Reserve System, May 14, 2004.
In accordance with § 271.25 of its rules regarding availability of information (12 CFR part 271), there is set forth below the domestic policy directive issued by the Federal Open Market Committee at its meeting held on March 16, 2004.
The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee in the immediate future seeks conditions in reserve markets consistent with maintaining the federal funds rate at an average of around 1 percent.
By order of the Federal Open Market Committee, May 11, 2004.
The Centers for Disease Control and Prevention (CDC) publishes a list of information collection requests under review by the Office of Management and Budget (OMB) in compliance with the Paperwork Reduction Act (44 U.S.C. chapter 35). To request a copy of these requests, call the CDC Reports Clearance Officer at (404) 498-1210. Send written comments to CDC, Desk Officer, Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503 or by fax to (202) 395-6974. Written comments should be received within 30 days of this notice.
Prevention Research Center Information System—New—National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP), Centers for Disease Control and Prevention (CDC). The Prevention Research Center Information System will collect in electronic format (a) data needed to measure progress toward, or achievement of, newly developed performance indicators, (b) information on Prevention Research Centers that is currently being reported in hard-copy documents, and (c) data on research projects that are currently submitted electronically via a spreadsheet.
In 1984, Congress passed Public Law 98-551 directing the Department of Health and Human Services (DHHS) to establish Centers for Research and Development of Health Promotion and Disease Prevention. In 1986, CDC was given lead responsibility for this program, referred to now as the Prevention Research Centers program. Currently, CDC provides funding to 28 Prevention Research Centers (PRCs) selected through competitive peer review process and managed as CDC cooperative agreements. Awards are made for five (5) years and may be renewed through a competitive Request for Application (RFA) process. PRCs (which can be housed in a school of public health, medicine, or osteopathy) conduct multi-disciplinary, community-based, outcomes-oriented research on a broad range of topics related to health promotion and disease prevention.
In Spring 2003, CDC published RFA #04003 (FY20004-20009) for the Prevention Research Centers program. The RFA introduces a set of performance indicators that were developed collaboratively with the PRCs and other program stakeholders and are consistent with federal requirements that all agencies, in response to the Government Performance and Results Act of 1993, prepare performance plans and collect program-specific performance measures.
An Internet-based information system will allow CDC to monitor, and report on, PRC activities more efficiently. Data reported to CDC through the PRC information system will be used by CDC to identify training and technical assistance needs, monitor compliance with cooperative agreement requirements, evaluate the progress made in achieving center-specific goals, and obtain information needed to respond to Congressional and other inquiries regarding program activities and effectiveness.
The estimated annualized burden is 237 hours.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 for opportunity for public comment on proposed data collection projects, the Centers for Disease Control and Prevention (CDC) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the data collection plans and instruments, call the CDC Reports Clearance Officer on (404) 498-1210.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Send comments to Dale Verell, CDC Assistant Reports Clearance Officer, 1600 Clifton Road, MS-E11, Atlanta, GA 30333. Written comments should be received within 60 days of this notice.
CDC Model Performance Evaluation Program, OMB No. 0920-0274—Revision—Public Health Practice Program Office (PHPPO), Centers for Disease Control and Prevention (CDC).
In 1986, the Centers for Disease Control and Prevention (CDC) implemented the Model Performance Evaluation Program (MPEP) to evaluate the performance of laboratories conducting testing to detect human immunodeficiency virus type 1 (HIV-1) antibody (Ab), and to support CDC's mission of improving public health and preventing disease through continuously improving laboratory practices.
High-quality HIV-1 antibody testing is essential to meeting the public health objectives for the prevention and control of this retrovirus infection. High-quality CD4+ T-cell determinations and HIV-1 viral RNA (viral load) determinations are essential to HIV-infected patient care and management, and the mission of reducing retrovirus-associated morbidity and mortality. Prevention programs, diagnostic clinics, and seroprevalence studies rely not only on accurate antibody testing results to document HIV infection but also accurate CD4+ T-cell determinations and HIV-1 viral RNA determinations. The impetus for developing this program came from the recognized need to assess the quality of retroviral and AIDS-related laboratory testing and to ensure that the quality of testing was adequate to meet medical and public health needs. The objectives of the MPEP are to: (1) Develop appropriate methods for evaluating quality in laboratory testing systems (including test selection, sample collection, and reporting and interpreting test results); (2) develop strategies for identifying and correcting testing quality failures; and(3) evaluate the effect of testing quality on public health.
This external quality assessment program will be made available at
• Assuring accurate tests are being provided by the laboratory/testing site through external quality assessment;
• Improving testing quality through self-evaluation in a non-regulatory environment;
• Testing well characterized samples from a source outside the test kit manufacturer;
• Discovering potential testing problems so that procedures can be adjusted to eliminate them;
• Comparison of testing results with others at a national and international level; and
• Ability to consult with CDC staff to discuss testing issues.
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the following meeting:
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Center for Medicare & Medicaid Services, HHS.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Centers for Medicare & Medicaid services (CMS), Department of Health and Human Services, is publishing the following summary of proposed collections for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
We are, however, requesting an emergency review of the information collection referenced below. In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we have submitted to the Office of Management and Budget (OMB) the following requirements for emergency review. We are requesting an emergency review because the collection of this information is needed before the expiration of the normal time limits under OMB's regulations at 5 CFR Part 1320. This is necessary to ensure compliance with provisions of Section 641 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). We cannot reasonably comply with the normal clearance procedures because of an unanticipated event and possible public harm.
Section 641 of the MMA provides for the implementation of a demonstration under which Medicare would pay under Part B for drugs and biologicals that would not otherwise be covered until Part D is implemented in 2006. Drugs covered under this demonstration must be replacements for existing covered Medicare drugs and biologicals that are provided incident to a physicians service or are replacements for oral cancer drugs that are otherwise covered under Medicare Part B. Cost sharing under the demonstration is to be in the same manner as Medicare Part D. The statute also required that the demonstration begin 90 days after passage of the legislation, which was March 8, 2004. Due to the complexities of implementing this demonstration, we were unable to meet that deadline. However, because of the importance of this demonstration to beneficiaries with serious illnesses and the already delayed time frame, it is urgent that there not be further delay.
CMS is requesting OMB review and approval of this collection by May 28, 2004, with a 180-day approval period. Written comments and recommendation will be accepted from the public if received by the individuals designated below by May 25, 2004.
We have submitted a copy of this notice to OMB for its review of these information collections.
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, access CMS' Web site address at
Interested persons are invited to send comments regarding the burden or any other aspect of these collections of information requirements. However, as noted above, comments on these information collection and recordkeeping requirements must be
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice of hearing.
This notice announces an administrative hearing to be held on June 8, 2004, at 10 a.m., JFK Federal Building, Room 2325,Boston, Massachusetts 02203-0003, to reconsider CMS' decision to disapprove Connecticut's Medicaid State Plan Amendment (SPA) 03-002A.
Kathleen Scully-Hayes, Presiding Officer CMS,Lord Baltimore Drive,Mail Stop LB-23-20,Baltimore, Maryland 21244,Telephone: (410) 786-2055.
This notice announces an administrative hearing to reconsider the CMS' decision to disapprove Connecticut's Medicaid State Plan Amendment (SPA) 03-002A.
Connecticut submitted SPA 03-002A on February 13, 2003, which proposes to establish new pharmacy reimbursement rates for the period January 1, 2003, through February 4, 2003. The CMS reviewed this proposal and for the reasons set forth below, the Agency was unable to approve SPA 03-002A as submitted.
The sole issue is whether the requested effective date is consistent with statutory and regulatory requirements. In a separate action, CMS approved SPA 03-002B, which made the requested changes to pharmacy reimbursement rates for a subsequent period. Under section 1902(a)(30)(A) of the Social Security Act (the Act), states are required to have methods and procedures to ensure that rates are consistent with efficiency, economy, and quality of care. Under that authority, the Secretary has issued regulations prescribing state rate-setting procedures. One of those requirements, set forth at 42 CFR 447.205(d), is issuance of public notice prior to the effective date of a significant change in any methods and standards for setting payment rates for services. While the State indicated that a legislative hearing was held in February 2002, and that other activities occurred in the Connecticut General Assembly, the required public notice was not published in the Connecticut Law Journal until February 4, 2003. The regulations at 42 CFR 447.205(d) are quite specific that in order to meet the public notice requirements, a notice must be published in one of the following publications: (1) A state register similar to the
Therefore, based on the reasoning set forth above, and after consultation with the Secretary as required under 42 CFR 430.15(c)(2), CMS disapproved Connecticut SPA 03-002A.
Section 1116 of the Act and 42 CFR part 430 establish Department procedures that provide an administrative hearing for reconsideration of a disapproval of a state plan or plan amendment. CMS is required to publish a copy of the notice to a State Medicaid agency that informs the agency of the time and place of the hearing and the issues to be considered.
If we subsequently notify the agency of additional issues that will be considered at the hearing, we will also publish that notice.
Any individual or group that wants to participate in the hearing as a party must petition the presiding officer within 15 days after publication of this notice, in accordance with the requirements contained at 42 CFR 430.76(b)(2). Any interested person or organization that wants to participate as
The notice to Connecticut announcing an administrative hearing to reconsider the disapproval of its SPA reads as follows: Mr. Michael Starkowski, Deputy Commissioner, State of Connecticut, Department of Social Services,25 Sigourney Street,Hartford, CT 06106-5033.
I am responding to your request for reconsideration of the decision to disapprove State Plan Amendment (SPA) 03-002A.
Connecticut submitted SPA 03-002A on February 13, 2003, which proposes to establish new pharmacy reimbursement rates for the period January 1, 2003, through February 4, 2003. The Centers for Medicare & Medicaid Services (CMS) reviewed this proposal and for the reasons set forth below, the Agency was unable to approve SPA 03-002A as submitted.
The sole issue is whether the requested effective date is consistent with statutory and regulatory requirements. In a separate action, CMS approved SPA 03-002B, which made the requested changes to pharmacy reimbursement rates for a subsequent period. Under section 1902(a)(30)(A) of the Social Security Act, states are required to have methods and procedures to ensure that rates are consistent with efficiency, economy, and quality of care. Under that authority, the Secretary has issued regulations prescribing state rate-setting procedures. One of those requirements, set forth at 42 CFR 447.205(d), is issuance of public notice prior to the effective date of a significant change in any methods and standards for setting payment rates for services. While the State indicated that a legislative hearing was held in February 2002, and that other activities occurred in the Connecticut General Assembly, the required public notice was not published in the Connecticut Law Journal until February 4, 2003. The regulations at 42 CFR 447.205(d) are quite specific that in order to meet the public notice requirements, a notice must be published in one of the following publications: (1) A state register similar to the
Therefore, based on the reasoning set forth above, and after consultation with the Secretary as required under 42 CFR 430.15(c)(2), CMS disapproved Connecticut SPA 02-003A.
I am scheduling a hearing on your request for reconsideration to be held on June 8, 2004, at 10 a.m., JFK Federal Building, Room 2325, Boston, Massachusetts 02203-0003. If this date is not acceptable, we would be glad to set another date that is mutually agreeable to the parties. The hearing will be governed by the procedures prescribed at 42 CFR part 430.
I am designating Ms. Kathleen Scully-Hayes as the presiding officer. If these arrangements present any problems, please contact the presiding officer. In order to facilitate any communication which may be necessary between the parties to the hearing, please notify the presiding officer to indicate acceptability of the hearing date that has been scheduled and provide names of the individuals who will represent the State at the hearing. Ms. Kathleen Scully-Hayes may be reached at (410) 786-2055.
Sincerely,
Mark B. McClellan, M.D., Ph.D.
Section 1116 of the Social Security Act (42 U.S.C. 1316; 42 CFR 430.18).
Office of Planning, Research and Evaluation, ACF, HHS.
Award announcement.
Notice is hereby given that the Office of Planning, Research and Evaluation will award grant funds without competition to the Institute for American Values. This grant is being awarded for an unsolicited proposal that conforms to the applicable program objectives, is within the legislative authorities and proposes activities that may be lawfully supported through grant mechanisms. This application is of outstanding merit and will have significant impact in focusing new public policy initiatives related to healthy marriage and contribute to better scholarly and public understanding of the issues, particularly related to the benefits of marriage for African Americans. The systematic review of academic findings published since 1990 will include studies with substantial rigor in order to address the existing inconclusive and often contradictory evidence presented in the current social science literature regarding the benefits of marriage for African Americans. The proposal presents a unique approach and includes a research team comprised of nationally recognized experts who will draw on the experience and knowledge of other nationally recognized experts in identifying the universe of scholarly publications to be considered and providing recommendations regarding variables to be considered and approaches for analysis.
The Institute for American Values is a nonpartisan organization devoted to contributing intellectually to the renewal of marriage and family life and the sources of competence, character, and citizenship.
The grant will support a 16-month project at a cost of $48,852 in federal support. The project is also being supported through non-federal funding sources.
K.A. Jagannathan, Administration for Children and Families, Office of Planning, Research and Evaluation, 370 L'Enfant Promenade, SW., Washington, DC 20447, Phone: 202-205-4829.
The Community Services Block Grant (CSBG) Act of 1981, as amended, (Section 680 of the Community Opportunities, Accountability, and Training and Educational Services Act of 1998), authorizes the Secretary of the U.S. Department of Health and Human Services to make grants to provide technical and financial assistance for economic development activities designed to address the economic needs of low-income individuals and families by creating employment and business development opportunities. Low-income beneficiaries include those who are determined to be living in poverty as determined by the HHS Guidelines on Poverty (See Appendix A), are unemployed, on public assistance, including Temporary Assistance for Needy Families (TANF), are at risk teenagers, custodial and non-custodial parents, public housing residents, persons with disabilities and persons who are homeless. Under this priority area, the Office of Community Services (OCS) is particularly interested in receiving applications from urban and tribal American Indian and Alaskan Village community development corporations and other community development corporations (CDC) including faith-based ones.
The following definitions apply:
CED projects further HHS goals of strengthening American families and promoting their self-sufficiency and OCS goals of promoting healthy families in healthy communities. CED is particularly directed toward public-private partnerships that develop employment and business opportunities for low-income people and revitalize distressed communities.
Projects include business startups, business expansions, development of new products and services, and other newly-undertaken physical and commercial activities. Projects must result in creation of new jobs. Each applicant must describe the project scope which includes the low-income community to be served, business activities to be undertaken and the types of jobs to be created.
OCS will fund nonprofit Tribal, Urban Indian Centers or Alaska Native CDCs or nonprofit non-Indian CDCs that assist Indian tribes or Alaskan Native Communities in carrying out business development activities for their members; business startups, business expansions, development of new services or industries, and other newly-undertaken physical and commercial activities. If the CDC is non-Indian or non-Alaska Native, the application must reflect a significant partnership role for the tribe or community. The application must contain a written, signed agreement from an authorized tribal official confirming the tribe's significant involvement in the project. By entering into a partnership agreement with a tribe, the applicant will be considered to have fulfilled the goal of mobilizing non-discretionary program dollars and will be granted the maximum number of points in that category.
An eligible community development corporation applicant must submit a business plan that shows the economic feasibility of the venture. An applicant for an Incremental Development Project does not have to have in place all signed written commitments from other funding sources contributing to the project, but it must describe probable funding sources and any conditions under which they may be made available. In addition, an applicant for Incremental Development funds does not have to have in place all third party agreements but must describe needed third parties, their contributions and qualifications, and the feasibility of bringing them into the project. Letters of support from community stakeholders are welcome. An applicant must also clearly explain whether it has site control, and if not, the time period required to obtain site control.
OCS will support an Incremental Development Project under a cooperative agreement. A cooperative agreement is an award instrument of financial assistance used when substantial involvement is anticipated between OCS and the grantee during performance of the project. OCS will outline a plan of interaction with the grantee for implementation under the cooperative agreement. A schedule of tasks will be developed and agreed upon in addition to any special conditions relating to the implementation of the project.
The duties and responsibilities of the applicant and ACF/OCS in fulfilling the Cooperative Agreement during each phase will include the following:
• To implement activities described in the approved project description;
• Develop and implement work plans that will ensure that the services and activities included in the approved application address the goals and objectives of the approved project in an efficient, effective and timely manner;
• Submit regular semi-annual Financial Status (Standard Form 269) and progress reports that describe activities including, at a minimum, (a) information about the actions taken to implement the proposed project, and (b) the proposed plan for outcomes measurement and program evaluation of the activities supported with Federal funds.
• Work cooperatively and collaboratively with ACF officials, other Federal agency officials conducting related activities, and other entities or organizations contracted by ACF to assist in carrying out the purposes of the Community Economic Development Program; such cooperation and collaboration shall include, but not be limited to, providing requested financial and programmatic information, creating opportunities for interviews with agency officials and staff, and allowing on-site observation of activities supported under the cooperative agreement;
• Notify the Office of Community Services Project Officer if revisions are needed to the cooperative agreement;
• Consult with the Office of Community Services Project Officer in implementing the activities on an Ongoing and frequent basis during each phase of the project;
• Comply with Community Economic Development Program regulations (unless otherwise expressly waived in the approved application) and all other applicable Federal statutes and regulations in effect during the time that applicant is receiving grant funding;
• Notify the Office of Community Services Project Officer of any key personnel changes in writing;
• Ensure that the executive director and/or project director, and the evaluator are qualified to perform their responsibilities;
• Attend a two-day national workshop in Washington, DC. The workshop will be scheduled shortly after the effective date of the grant award. Additionally, the project director should plan annual meetings with their
• To provide consultation to the grantee with regard to the development of the work plan, approaches to address problems that arise, and identification of areas needing technical assistance;
• To consult with and to provide the grantee the data collection requirements of OCS, and to keep the grantee informed of policy developments as they affect the implementation of the project;
• To provide timely review, comment and decisions on significant project documents;
• To work together to address issues or problems with regard to the grantee's ability to carry out the full range of activities included in the approved application in the most efficient and effective manner;
• To promptly review written requests for approval of deviations from the project description or approved budget. Any changes which affect the terms and conditions of the grant award or revisions/amendments to the cooperative agreement or to the approved scope of activities will require prior approval by the ACF Grants Management Officer; and
An applicant requesting funding for an IDP must request the total amount of CED funding needed for the project on the SF424, Application for Federal Assistance. The maximum CED award for an IDP can be no more than $700,000 per project.
Applications that are exclusively for construction may have project periods of up to five years with continuation funding every twelve months. First year funding will be awarded for up to 20% of the requested total amount, not to exceed $140,000. The application must also include an incremental budget based on the design of the project for the four remaining years, not to exceed the balance of the total requested funding. A minimum of 2% of the award, or a minimum of $14,000, must be set aside for each continuation year.
Non-construction projects may have project periods of up to three years with continuation funding every twelve months. First year funding will be awarded for up to 20% of the total requested amount, not to exceed $140,000. The applicant must also include an incremental budget based on the design of the project for the two remaining years, not to exceed the balance of the total requested funding. A minimum of 2% of the award, or a minimum of $14,000, must be set aside for each continuation year.
Funding beyond the first 20% is dependent on a grantee's documenting (1) site control, (2) all of the non-CED funding required to complete the project and (3) referral sources. In addition, continuing funding will be subject to the availability of funds, satisfactory progress by the grantee on the project and a determination that continuation is in the best interests of the Federal Government. The decision to continue funding the project is at the sole discretion of OCS.
Applicants awarded a FY 2003 Incremental Development Project (IDP) grant cannot receive a second IDP grant until the first grant is significantly complete and has met most of its proposed goals and objectives. Particular attention will be paid to satisfying all job creation commitments.
The first increment of an Incremental Development Project may not exceed $140,000. An application that exceeds the upper value of the dollar range specified will be considered “non-responsive” and be returned to the applicant without further review.
Nonprofits having a 501(c) (3) status with the IRS, other than institutions of higher education. Nonprofits that do not have a 501(c) (3) status with the IRS, other than institutions of higher education. Faith-based community development corporations are eligible to apply.
An applicant must be a private, non-profit community development corporation (CDC). For purposes of this grant program, the CDC must be governed by a Board of Directors consisting of residents of the community and business and civic leaders. The CDC must have as a principal purpose planning, developing, or managing low-income housing or community development activities.
Applications that do not include proof of nonprofit status with their application will be disqualified.
Any non-profit organization submitted an application must submit proof of its non-profit status in its application at the time of submission. The non-profit agency can accomplish this by providing:
(a) A reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS Code.
(b) A copy of a currently valid IRS tax exemption certificate.
(c) A statement from a State taxing body, State attorney general, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earnings accrue to any private shareholders or individuals.
(d) A certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status.
(e) Or any of the items referenced above for a State or national parent organization and a statement signed by the parent organization that the applicant organization is a local non-profit affiliate. For American Indian Tribes and Alaska Native Villages, proof of non-profit status can also be documented by submitting a
Private, non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms” titled “Survey for Private, Non-Profit Grant Applicants” at
Applicants that do not include proof of CDC status in the application will be disqualified.
An applicant must be a private, non-profit Community Development Corporation. For purposes of this grant program, the CDC must be governed by a Board of Directors consisting of residents of the community and business and civic leaders. The CDC must have as a principal purpose, planning, developing, or managing low-income housing or community development projects.
Applicants must document their eligibility as a CDC for the purposes of this grant program. The application must include a list of governing board members along with their designation as a community resident, or business or civic leader. In addition, the application must include documentation that the
None.
There is no cost sharing or matching requirement but most projects require significant funding in addition to the Federal CED funds so applicants are strongly encouraged to mobilize the resources needed for a successful project. The ability to mobilize resources is considered in evaluating the feasibility of a proposal.
On June 27, 2003, the Office of Management and Budget published in the
Please ensure that your organization has a DUNS number. You may acquire a DUNS number at no cost by calling the dedicated toll-free DUNS number request line on 1-866-705-5711 or you may request a number on-line at
Office of Community Services,Administration for Children and Families,370 L'Enfant Promenade, SW., Suite 500 West,Washington, DC 20447,Email:
Each application must include the following components:
1. Table of Contents.
2. Abstract of the Proposed Project—one or two paragraphs, not to exceed 350 words, that describe the community in which the project will be implemented, beneficiaries to be served, type(s) of business(es) to be developed, type(s) of jobs to be created, projected cost-per-job, any land or building to be purchased or building constructed, resources leveraged and intended impact on the community.
3. Completed Standard Form 424—that has been signed by an official of the organization applying for the grant who has legal authority to obligate the organization. Under Box 11., include “Priority Area 1 Operational Grant.”
4. Standard Form 424A—Budget Information-Non-Construction Programs.
5. Standard Form 424B—Budget Information—Construction Programs.
6. Narrative Budget Justification—for each object class category required under Section B, Standard Form 424A and/or 424B, as applicable.
6. Project Narrative—A narrative that addresses issues described in the “Application Review Information” and the “Review and Selection Criteria” sections of this announcement.
Submit application materials on white 8
Do not include organizational brochures or other promotional materials, slides, films, clips, etc.
The font size may be no smaller than 12 pitch and the margins must be at least one inch on all sides.
Number all application pages sequentially throughout the package, beginning with the abstract of the proposed project as page number one.
Present application materials either in loose-leaf notebooks or in folders with pages two-hole punched at the top center and fastened separately with a slide paper fastener.
The application package including sections for the Table of Contents, Project Abstract, Project and Budget Narratives, and business and work plans must not exceed 40 pages. The page limitation does not include Standard Forms and Assurances, Certifications, Disclosures, appendices and any supplemental documents as required in this announcement.
Applicants must submit Standard Form (SF) 424, Request for Financial Assistance.
Applicants requesting financial assistance for a non-construction project must sign and return Standard Form 424A, Assurances: Non-Construction Programs with their applications.
Applicants requesting financial assistance for a construction project must sign and return Standard Form 424B, Assurances: Construction Programs with their applications.
Applicants must provide a Certification Regarding Lobbying. Prior to receiving an award in excess of $100,000, applicants must furnish an executed copy of the lobbying certification. Applicants must sign and return the certification with their application.
Applicants must make the appropriate certification of their compliance with all Federal statues relating to nondiscrimination. Applicants provide certification by signing the SF424 and need not mail back the certification with the application.
Applicants must make the appropriate certification of their compliance with the requirements of the Pro-Children Act of 1994 as outlined in Certification Regarding Environmental Tobacco Smoke. Applicants provide certification by signing the SF424 and need not mail back the certification with the application.
The closing time and date for receipt of applications is 4:30 p.m. Eastern Standard Time (EST) on July 19, 2004. Mailed or hand carried applications received after 4:30 p.m. on the closing date will be classified as late.
Applications hand carried by applicants, applicant couriers, other representatives of the applicant, or by overnight/express mail couriers shall be considered as meeting an announced deadline if they are received on or before the deadline date, between the hours of 8 a.m. and 4:30 p.m., EST, at the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services” Operations Center, 1815 Fort Meyer Drive, Suite 300, Arlington, Virginia 22209
This program is covered under Executive Order 12372, “Intergovernmental Review of Federal Programs,” and 45 CFR Part 100, “Intergovernmental Review of Department of Health and Human Services Programs and Activities.” Under the Order, States may design their own processes for reviewing and commenting on proposed Federal assistance under covered programs. As of October 1, 2003, the following jurisdictions have elected not to participate in the Executive Order process. Applicants from these jurisdictions or for projects administered by federally-recognized Indian Tribes need take no action in regard to E.O. 12372:
All States and Territories except Alabama, Alaska, Arizona, Colorado, Connecticut, Hawaii, Idaho, Indiana, Kansas, Louisiana, Massachusetts, Minnesota, Montana, Nebraska, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, Virginia, Washington, Wyoming and Palau have elected to participate in the Executive Order process and have established Single Points of Contact (SPOCs). Applicants from these twenty-seven jurisdictions need take no action.
Although the jurisdictions listed above no longer participate in the process, entities which have met the eligibility requirements of the program are still eligible to apply for a grant even if a State, Territory, Commonwealth, etc. does not have a SPOC. All remaining jurisdictions participate in the Executive Order process and have established SPOCs. Applicants from participating jurisdictions should contact their SPOCs as soon as possible to alert them of the prospective applications and receive instructions. Applicants must submit any required material to the SPOCs as soon as possible so that the program office can obtain and review SPOC comments as part of the award process. The applicant must submit all required materials, if any, to the SPOC and indicate the date of this submittal (or the date of contact if no submittal is required) on the Standard Form 424, item 16a. Under 45 CFR 100.8(a)(2), a SPOC has 60 days from the application deadline to comment on proposed new or competing continuation awards.
SPOCs are encouraged to eliminate the submission of routine endorsements as official recommendations. Additionally, SPOCs are requested to clearly differentiate between mere advisory comments and those official State process recommendations which may trigger the “accommodate or explain” rule.
When comments are submitted directly to ACF, they should be addressed to: Department of Health and
A list of the Single Points of Contact for each State and Territory is included with the application materials for this announcement.
OCS will not fund projects with a cost-per-job in CED funds that exceeds $10,000. An exception will be made if the project includes purchase of land or a building, or major renovation or construction of a building. In this instance, the applicant must explain the factors that raise the cost beyond $10,000. In no instance, will OCS allow for more than $15,000 cost-per-job in CED funds. Cost per job is calculated by dividing the number of jobs to be created by the amount of the CED grant request.
If an applicant is proposing a project which will affect a property listed in, or eligible for, inclusion in the National Register of Historic Places, it must identify this property in the narrative and explain how it has complied with the National Historic Preservation Act of 1996, as amended. If there is any question as to whether the property is listed in or eligible for inclusion in the National Register of Historic Places, the applicant must consult with the State Historic Preservation Officer and describe in the narrative the content of such consultation.
OCS will not fund any project where the role of the applicant is primarily to serve as a conduit for funds to organizations other than the applicant. The applicant must have a substantive role in the implementation of the project for which funding is requested. This prohibition does not bar the making of sub-grants or sub-contracting for specific services or activities needed to conduct the project.
Except for the retail development initiative, each application may include only one proposed project.
OCS will not consider applications that propose to establish Small Business Investment Corporations or Minority Enterprise Small Business Investment Corporations.
OCS will not fund projects that are primarily education and training projects. In projects where participants must be trained, any funds proposed for training must be limited to specific job-related training to those individuals who have been selected for employment in the grant-supported project. Projects involving training and placement for existing vacant positions will be disqualified from competition.
OCS will not fund projects that would result in the relocation of a business from one geographic area to another resulting in job displacement.
Pre-award costs will not be covered by an award.
Applicants must provide proof of nonprofit status and proof of status as a community development corporation as required by statute and as described under “Additional Information on Eligibility.”
Because CED funds are Federal, all grantees must be capable of meeting the requirements of 45 CFR Part 74 concerning their financial management system. To assure that the applicant has such capability, applications must include a signed statement from a Certified or Licensed Public Accountant as to the sufficiency of the CDCs financial management system in accordance with 45 CFR 74 and financial statements for the CDC for the prior three years. If such statements are not available because the CDC is a newly formed entity, the application must include a statement to this effect. The CDC grantee is responsible for ensuring that grant funds expended by it and a third party are expended in compliance with Federal Regulations of 45 CFR, Part 74 and OMB Circular A-122.
Applications for Priority Area 3. Incremental Development Projects—Native Americans, must submit a business plan. For incubator or microenterprise development projects, the business plan covers the project, not the individual business plans of beneficiaries.
The business plan is a major component that will be evaluated by an expert review panel, OCS and OGM to determine the feasibility of a business venture or other economic development project. It must address all the relevant elements as follows:
(1) Executive Summary (limit to 2 pages)
(2) Description of the business: The business as a legal entity and its general business category. Business activities must be described by Standard Industrial Codes (SIC) using the North American Industry Classification System (NAICS) and jobs by occupational classification. This information is published by the U.S. Department of Commerce in the Statistical Abstract of the United States, 1998, Tables No. 679 and 680. These tables include information necessary to meet this requirement.
(3) Description of the industry, current status and prospects.
(4) Products and services, including detailed descriptions of:
(a) Products or services to be sold;
(b) Proprietary position of any of the product, e.g., patents, copyright, trade secrets;
(c) Features of the product or service that may give it an advantage over the competition;
(5) Market Research: This section describes the research conducted to assure that the business has a substantial market to develop and achieve sales in the face of competition. This includes researching:
(a) Customer base: Describe the actual and potential purchasers for the product or service by market segment.
(b) Market size and trends: Describe the site of the current total market for the product or service offered;
(c) Competition: Provide an assessment of the strengths and weaknesses of the competition in the current market;
(d) Estimated market share and sales: Describe the characteristics of the product or service that will make it competitive in the current market;
(6) Marketing Plan: The marketing plan details the product, pricing, distribution, and promotion strategies that will be used to achieve the estimated market share and sales projections. The marketing plan must describe what is to be done, how it will be done and who will do it. The plan addresses overall marketing, strategy, packaging, service and warranty, pricing, distribution and promotion.
(7) Design and Development Plans: If the product, process or service of the proposed venture requires any design and development before it is ready to be placed on the market, describe the nature, extent and cost of this work. The section covers items such as development status and tasks, difficulties and risks, product improvement and new products and costs.
(8) Operations Plan: An operations plan describes the kind of facilities, site location, space, capital equipment and labor force (part and/or full time and wage structure) that are required to provide the company's product or service.
(9) Management Team: This section describes the technical, managerial and business skills and experience to be brought to the project. This a description of key management personnel and their primary duties; compensation and/or ownership; the organizational structure and placement of this proposed project within the organization; the board of directors; management assistance and training needs; and supporting professional services.
(10) Overall Schedule: This section is the implementation plan which shows the timing and interrelationships of the major events or benchmarks necessary to launch the venture and realize its objectives. This includes a month-by-month schedule of activities such as product development, market planning, sales programs, production and operations. If the proposed project is for construction, this section lays out timeframes for conduct of predevelopment, architectural, engineering and environmental and other studies, and acquisition of permits for building, use and occupancy that are required for the project.
(11) Job Creation: This section describes the job creation activities and projections expected as a result of this project. This includes a description of the strategy that will be used to identify and hire individuals who are low-income, including those on TANF. This section includes the following:
(a) The number of permanent jobs that will be created during the project period, with particular emphasis on jobs for low-income individuals.
(b) For low-income individuals, the number of jobs that will be filled by low-income individuals (this must be at least 60% of all jobs created); the number of jobs that have career development opportunities and a description of those jobs; the number of jobs that will be filled by individuals receiving TANF; the annual salary expected for each person employed.
(c) For low-income individuals who become self-employed, the number of self-employed and other ownership opportunities created; specific steps to be taken including on-going management support and technical assistance provided by the grantee or a third party to develop and sustain self-employment after the businesses are in place; and expected net profit after deductions of business expenses.
OCS will not recognize job equivalents nor job counts based on economic multiplier functions; jobs must be specifically identified.
(12) Financial Plan: The financial plan demonstrates the economic supports underpinning the project. It shows the project's potential and the timetable for financial self-sufficiency. The following exhibits must be submitted for the first three years of the business' operation:
(a) Profit and Loss Forecasts—quarterly for each year;
(b) Cash Flow Projections—quarterly for each year;
(c) Pro forma balance sheets—quarterly for each year;
(d) Sources and Use of Funds Statement for all funds available to the project and projected to be available;
(e) Brief summary discussing any further capital requirements and methods or projected methods for obtaining needed resources.
(13) Critical Risks and Assumptions: This section covers the risks faced by the project and assumptions surrounding them. This includes a description of the risks and critical assumptions relating to the industry, the venture, its personnel, the product or service market appeal, and the timing and financing of the venture.
(14) Community Benefits: This section describes other economic and non-economic benefits to the community such as development of a community's physical assets; provision of needed, but currently unsupplied, services or products to the community; or improvement in the living environment.
An applicant must include a detailed work plan covering the activities to be undertaken and benchmarks that demonstrate progress toward stated goals and measurable objectives.
Applicants submitting an application for funding under Priority Area 3, Incremental Development Projects—Native Americans, that proposes to use some or all of the requested CED funds to enter into a third party agreement are required to either submit the signed Third Party Agreement in the application, along with the business plan, for approval by OCS, or in the narrative, explain who the prospective third party (parties) would be and their contributions to the project. It should be noted that the portion of a grant that will be used to fund project activities related to a third party agreement will not be released (in any instances) until the agreement has been approved by OCS.
All third party agreements must include written commitments as follows: From third party (as appropriate):
(1) Low-income individuals will fill a minimum of 60% of the jobs to be created from project activities as a result of the injection of grant funds.
(2) The grantee will have the right to screen applicants for jobs to be filled by low-income individuals and to verify their eligibility.
(3) If the grantee's equity investment equals 25% or more of the business' assets, the grantee will have representation on the board of directors.
(4) Reports will be made to the grantee regarding the use of grant funds on a quarterly basis or more frequently, if necessary.
(5) Procedures will be developed to assure that there are no duplicate counts of jobs created.
(6) That the third party will maintain documentation related to the grant objectives as specified in the agreement and will provide the grantee and HHS access to that documentation. From the grantee:
(1) Detailed information on how the grantee will provide support and technical assistance to the third party in areas of recruitment and retention of low-income individuals.
(2) How the grantee will provide oversight of the grant-supported activities of the third party for the life of the agreement. Detailed information must be provided on how the grant funds will be used by the third party by submitting a Sources and Uses of Funds Statement.
From the grantee and third party:
Signatures of the authorized officials of the grantee and third party organization.
A third party agreement covering an equity investment must contain, at a minimum, the following:
(1) Purpose(s) for which the equity investment is being made.
(2) The type of equity transaction (
(3) Cost per share and basis on which the cost per share is derived.
(4) Number of shares being purchased.
(5) Percentage of CDC ownership in the business.
(6) Term of duration of the agreement.
(7) Number of seats on the board, if applicable.
(8) Signatures of the authorized officials of the grantee and third party organization.
A third party agreement covering a loan transaction must contain, at a minimum, the following information:
(1) Purpose(s) for which the loan is being made.
(2) Interest rates and other fees.
(3) Terms of the loan.
(4) Repayment schedules.
(5) Collateral security.
(6) Default and collection procedures.
(7) Signatures of the authorized officials of the lender and borrower.
All third party agreements must be accompanied by a signed statement from a Certified or Licensed Public Accountant as to the sufficiency of the third party's financial management system in accordance with 45 CFR 74 and financial statements for the third party organization for the prior three years. If such statements are not available because the organization is a newly formed entity, the application must include a statement to this effect. The grantee is responsible for ensuring that grant funds expended by it and the third party are expended in compliance with Federal regulations of 45 CFR, Part 74 and OMB Circular A-122.
Applications must include provision for an independent, methodologically sound evaluation of the effectiveness of the activities carried out with the grant and their efficacy in creating new jobs and business ownership opportunities. There must be a well-defined process evaluation, and an outcome evaluation whose design will permit tracking of project participants throughout the proposed project period. The evaluation must be conducted by an independent evaluator,
Competitive procurement regulations (45 CFR, Part 74, Section 74.40-74.48, especially Section 74.43) apply to service contracts such as those for evaluators.
Public reporting burden for this collection of information is estimated to average 25 hours per response, including the time for reviewing instructions, gathering and maintaining the data needed, and reviewing the collection of information.
The project description is approved under Office of Management and Budget (OMB) Control Number 0970-0139.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The project description provides a major means by which an application is evaluated and ranked to compete with other applications for available assistance. The project description should be concise and complete and should address the activity for which Federal funds are being requested. Supporting documents should be included where they can present information clearly and succinctly. In preparing your project description, all information requested through each specific evaluation criteria should be provided. Awarding offices use this and other information in making their funding recommendations. It is important, therefore, that this information be included in the application.
Applicants required to submit a full project description shall prepare the project description statement in accordance with the following instructions and the specified evaluation criteria. The instructions give a broad overview of what your project description should include while the evaluation criteria expands and clarifies more program-specific information that is needed.
Provide a summary of the project description (a page or less) with reference to the funding request.
Clearly identify the physical, economic, social, financial, institutional, and/or other problem(s) requiring a solution. The need for assistance must be demonstrated and the principal and subordinate objectives of the project must be clearly stated; supporting documentation, such as letters of support and testimonials from concerned interests other than the applicant, may be included. Any relevant data based on planning studies should be included or referred to in the endnotes/footnotes. Incorporate demographic data and participant/beneficiary information, as needed. In developing the project description, the applicant may volunteer or be requested to provide information on the total range of projects currently being conducted and supported (or to be initiated), some of which may be outside the scope of the program announcement.
Identify the results and benefits to be derived. For example, describe the population to be served by the program and the number of new jobs that will be targeted to the target population. Explain how the project will reach the targeted population, how it will benefit participants including how it will support individuals to become more economically self-sufficient.
Outline a plan of action which describes the scope and detail of how the proposed work will be accomplished. Account for all functions or activities identified in the application. Cite factors which might accelerate or decelerate the work and state your reason for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technological innovations, reductions in cost or time, or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in such terms as the number of people to be served and the number of activities accomplished. Account for all functions or activities identified in the application. Cite factors that might accelerate or decelerate the work and state your reasons for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technical innovations, reductions in cost or time or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in, for example such terms as the “number of people served.” When accomplishments cannot be quantified by activity or function, list them in chronological order to show the schedule of accomplishments and their target dates.
If any data is to be collected, maintained, and/or disseminated, clearance may be required from the U.S. Office of Management and Budget
List organizations, cooperating entities, consultants, or other key individuals who will work on the project along with a short description of the nature of their effort or contribution.
Provide a narrative addressing how the results of the project and the conduct of the project will be evaluated. In addressing the evaluation of results, state how you will determine the extent to which the project has achieved its stated objectives and the extent to which the accomplishment of objectives can be attributed to the project. Discuss the criteria to be used to evaluate results, and explain the methodology that will be used to determine if the needs identified and discussed are being met and if the project results and benefits are being achieved. With respect to the conduct of the project, define the procedures to be employed to determine whether the project is being conducted in a manner consistent with the work plan presented and discuss the impact of the project's various activities on the project's effectiveness.
Provide information on the applicant organization(s) and cooperating partners such as organizational charts, financial statements, audit reports or statements from CPAs/Licensed Public Accountants, Employer Identification Numbers, names of bond carriers, contact persons and telephone numbers, child care licenses and other documentation of professional accreditation, information on compliance with Federal/State/local government standards, documentation of experience in the program area, and other pertinent information. Any non-profit organization submitting an application must submit proof of its non-profit status in its application at the time of submission.
The non-profit agency can accomplish this by providing a copy of the applicant's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in Section 501(c)(3) of the IRS code, or by providing a copy of the currently valid IRS tax exemption certificate, or by providing a copy of the articles of incorporation bearing the seal of the State in which the corporation or association is domiciled.
Provide line item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for the calculation to be duplicated. The detailed budget must also include a breakout by the funding sources identified in Block 15 of the SF-424.
Provide a narrative budget justification that describes how the categorical costs are derived. Discuss the necessity, reasonableness, and allocability of the proposed costs.
The application describes the project, its scope and methods that will be used to ensure that the project results in employment and business development opportunities for low income individuals. (0-5 points)
The applicant has site control or the possibility of site control within 12 months. (0-5 points)
The work plan is results-oriented and related to job creation and business development opportunities for low income individuals. The application addresses the following: specific outcomes to be achieved; performance targets that the project is committed to achieving, including a discussion of and how the project will verify the achievement of these targets; critical milestones which must be achieved if results are to be gained; organizational support, the level of support from the applicant organization; past performance in similar work; and specific resources contributed to the project that are critical to success. The project is able to be implemented soon after a grant award is made. (0-10 points)
The business plan meets the requirements of “Part 6. Other Submission Requirements Business Plan.” (0-5 points) Required financial documents are contained in the application and demonstrate that the project is viable if funding is leveraged as expected. (0-5 points) Where applicable, third party agreements meet the requirements of “Part 6. Other Submission Requirements Third Party Agreements” and can be expected to be executed within 12 months after receipt of a grant award. (0-8 points)
The application documents that the project addresses a vital need in a distressed community. “Distressed community” is defined as a geographic urban neighborhood or rural community with high unemployment and pervasive poverty. The application documents that both the unemployment rate and poverty level for the targeted neighborhood or community must be equal to or greater than the state or national level. (0-3 points) The application cites the most recent available statistics from published sources, e.g. the recent U.S. Census or updates, the State, county, city, election district and other information provided in support of its contention. (0-3 points)
The application documents that the applicant is an active partner in either a new or on-going comprehensive community revitalization project such as: a federally-designated Empowerment Zone, Enterprise Community or Renewal Community project that has clear goals of strengthening economic and human development in target neighborhoods; a State or local-government supported comprehensive neighborhood revitalization project; a foundation supported community revitalization initiative. (0-3 points)
The application demonstrates a commitment to, or agreements with, local agencies to ensure that low-income individuals will be trained and placed in the newly created jobs. Low income individuals include welfare recipients, at-risk youth, displaced workers, public housing residents, persons who are homeless, persons with disabilities and custodial and non-custodial parents.The application provides written agreements from the local TANF, employment education and training office, and child support enforcement agency indicating what actions will be taken to integrate or coordinate services that relate directly to the project or a narrative that describes such agreements to be entered into. (0-3 points) The agreements include: (1) The goals and objectives that the applicant and the TANF, employment education and training office and/or child support enforcement agency expect to achieve through their collaboration. (2) The specific activities that will be undertaken to integrate or coordinate services on an on-going basis. (3) The target population that this collaboration will serve. (4) The mechanism(s) to be used in integrating or coordinating activities. (5) How those activities will be significant in relation to the goals
The application describes the business(es) that will be established or expanded as a result of the project. The applicant documents the number of jobs that will be created. (0-3 points)
During the project period, the proposed project will create new, permanent jobs or maintain permanent jobs for low-income residents at a cost-per-job not to exceed $10,000 in CED funds. If the project involves construction or major renovation, the cost-per-job will not exceed $15,000 and the applicant demonstrates the need to exceed $10,000 per job. (0-3 points)
The application documents that the jobs to be created for low-income people have career development opportunities that will promote self-sufficiency. (0-2 points)
A non-Indian applicant submits a signed letter of agreement to participate in the Incremental Development Project—Native American by officials of the affected tribe. (0-8 points)
Cash resources such as cash or loans contributed from all project sources (except for those contributed directly by the applicant) are documented by letters of commitment from third parties making the contribution.
The value of in-kind contributions for personal property is documented by an inventory valuation for equipment and a certified appraisal for real property. Also, a copy of a deed or other legal document is required for real property.
Anticipated or projected program income such as gross or net profits from the project or business operations will not be recognized as mobilized or contributed resources.
a. Organizational profile (sub-rating: 0-8 points)
The application demonstrates that the applicant has the management capacity, organizational structure and successful record of accomplishment relevant to business development, commercial development, physical development, and/or financial services and that it has the ability to mobilize other financial and in-kind resources.
The application describes in brief resume form the experience and skills of the project director who is not only well qualified, but whose professional capabilities are relevant to the successful implementation of the project. If the key staff person has not yet been identified, the application contains a comprehensive position description that indicates that the responsibilities to be assigned to the project director are relevant to the successful implementation of the project. (0-5 points)
The applicant has adequate facilities and resources (i.e. space and equipment) to successfully carry out the work plan. (0-3 points)
The application contains the outline of a project evaluation plan. The outline explains how the applicant proposes to answer key questions about how effectively the project is implemented; whether the project activities, or interventions, achieved the expected immediate outcomes, and why or why not (the process evaluation); and whether and to what extent the project achieved its stated goals, and why or why not (the outcome evaluation). Together, the process and outcome evaluations answer the question: “What did this program accomplish and why did it work/not work?” Applicants are not being asked to submit a complete and final evaluation plan as part of their application, but the plan must include:
(1) An outline of an evaluation plan that identifies the principal cause-and-effect relationships to be tested and that demonstrates the applicant's understanding of the role and purpose of both process and outcome evaluations, and the effectiveness of the project in fostering self-sufficiency in low-income populations. (0-3 points)
(2) A reporting format based on the grantee's demonstration of its activities (interventions) and their effectiveness, to be included in the grantee's semi-annual progress reports to OCS. These reports are expected to provide OCS with insights and lessons learned, as they become evident, concerning the various aspects of the work plan, such as recruitment, training, support, public-private partnerships, and coordination with other community resources, as they are relevant to the proposed project. (0-3 points)
(3) The identity and qualifications of the proposed third-party evaluator, if not selected at the time of application, the qualifications which will be sought in choosing an evaluator. The evaluator must have knowledge about and experience in conducting process and outcome evaluations in the business development or job creation field and have a thorough understanding of the range and complexity of the problems faced by the target population. It is important that the applicant have a third-party evaluator selected and performing at the very latest by the time the work program of the project is begun, and, if possible, before that time in order for the evaluator to participate in the final design of the program and assure that data necessary for the evaluation will be collected and available. Plans for selecting an evaluator should be included in the application narrative. OCS must approve selection of a third party evaluator. (0-2 points)
(4) Process for completing a final evaluation design and plan, in collaboration with the approved evaluator and OCS, during the six-month start-up period of the project. Applicants should ensure that the evaluation design is consistent with the project design, identifying key project assumptions about the target populations and their needs; hypotheses, or expected cause-effect relationships, to be tested in the project; and the proposed project activities, or interventions, that will address needs in ways that will lead to self-sufficiency. The design also identifies in advance the most important process and outcome measures that will be used to identify performance success and expected changes in individual participants, the grantee organization, and the community. (0-2 points)
Funds requested are commensurate with the level of effort necessary to accomplish the goals and objectives of the project. (0-2 points)
The application includes a detailed budget breakdown and a narrative justification for each of the budget categories in the SF-424A. The applicant presents a reasonable administrative cost. (0-2 points)
The estimated cost to the government of the project also is reasonable in relation to the anticipated results. (0-1 point)
Each application submitted to OCS will be screened to determine whether it was received by the closing date and time. Applications received by the closing date and time will be screened
All applications must comply with the following requirements except as noted:
(a) The application must contain a signed Standard Form 424 Application for Federal Assistance, a Standard Form 424-A Budget Information for Non-Construction Projects, or signed Standard Form 424B Budget Information for Construction Projects. These forms must be completed according to instructions provided in this Program Announcement and must be signed by an official of the applicant organization who has legal authority to obligate the organization. The applicant's legal name as required on the SF-424 (Item 5) must match that listed as corresponding to the Employer Identification Number (Item 6);
(b) The application must include a project narrative that meets requirements set forth in this announcement.
(c) The application must contain documentation of the applicant's tax-exempt and community development corporation status as indicated in the “Additional Information on Eligibility” section of this announcement.
Applications that pass the initial OCS screening will be reviewed and rated by a panel based on the program elements and review criteria presented in relevant sections of this program announcement.
The review criteria are designed to enable the review panel to assess the quality of a proposed project and determine the likelihood of its success. The criteria are closely related to each other and are considered as a whole in judging the overall quality of an application. The review panel awards points only to applications that are responsive to the program elements and relevant review criteria within the context of this program announcement.
The OCS Director and program staff use the reviewer scores when considering competing applications. Reviewer scores will weigh heavily in funding decisions, but will not be the only factors considered.
Applications generally will be considered in order of the average scores assigned by the review panel. Because other important factors are taken into consideration, highly ranked applications are not guaranteed funding. These other considerations include, for example: the timely and proper completion by the applicant of projects funded with OCS funds granted in the last five (5) years; comments of reviewers and government officials; staff evaluation and input; amount and duration of the grant requested and the proposed project's consistency and harmony with OCS goals and policy; geographic distribution of applications; previous program performance of applicants, including compliance with programmatic and financial reporting requirements; compliance with grant terms under previous HHS grants, including the actual dedication to program of mobilized resources as set forth in project applications; audit reports; investigative reports; and applicant's progress in resolving any final audit disallowance on previous OCS or other Federal agency grants.
90 days after the due date of applications.
The successful applicants will be notified through the issuance of a Financial Assistance Award document which sets forth the amount of funds awarded, the terms and conditions of the award, the effective date of the award, the budget period for which support is granted, and the total project period for which support is contemplated. The Financial Assistance Award will be signed and issued via postal mail by an authorized Grants Officer.
45 CFR Part 74.
Debra Brown, Office of Community Services, 370 L'Enfant Promenade, SW., Suite 500 West, Aerospace Building, Washington, DC 20447-0002, Email:
Barbara Ziegler-Johnson, Office of Grants Management, Division of Discretionary Grants, 370 L'Enfant Promenade, SW., Aerospace Building, Washington, DC 20447-0002, Email:
Additional information about this program and its purpose can be located on the following Web site:
Administration for Children and Families, Office of Community Services.
The Community Services Block Grant (CSBG) Act of 1981, as amended, (Section 680 of the Community Opportunities, Accountability, and Training and Educational Services Act of 1998), authorizes the Secretary of the U.S. Department of Health and Human Services to make grants to provide technical and financial assistance for economic development activities designed to address the economic needs of low-income individuals and families by creating employment and business development opportunities. Pursuant to this Announcement, OCS will award incremental development project funds to eligible Community Development Corporations (CDCs) that do not have in place written commitments for all projected non-OCS funding, project operations and site control for their
Community Economic Development (CED) projects should further HHS goals of strengthening American families and promoting their self-sufficiency, and OCS goals of promoting healthy families in healthy communities. The CED Program is particularly directed toward public-private partnerships that develop employment and business opportunities for low-income people and revitalize distressed communities.
Projects may include business startups, business expansions, development of new products and services, and other newly-undertaken physical and commercial activities. Projects must result in the creation of new jobs. Each applicant must describe the project scope including the low-income community to be served, business activities to be undertaken and the types of jobs to be created.
Pursuant to this Program Announcement, OCS will award funds to eligible CDCs that do not have in place written commitments for all projected non-OCS funding, project operations and site control for their planned economic development project.
Community Economic Development Program funds for Priority Area: Incremental Development Projects are designed to encourage rural and urban community development corporations to create projects intended to provide employment and business development opportunities for low-income people through business or commercial development. Low income beneficiaries of such projects include those who are determined to be living in poverty as determined by the Health and Human Services (HHS) Guidelines of Poverty (See Appendix A). They may be unemployed, on public assistance, including Temporary Assistance for Needy Families (TANF), or at risk teenagers, custodial and non-custodial parents, public housing residents, persons with disabilities and persons who are homeless. Grant funds under this priority area are intended to provide resources to eligible applicants (CDCs) but also have the broader objectives of arresting tendencies toward dependency, chronic unemployment, and community deterioration in urban and rural areas.
An eligible applicant must submit a business plan that shows the economic feasibility of the venture.
An applicant for an IDP must have: (1) All written commitments need not be in place; (2) All non-OCS funding necessary to complete the project need not be in place; (3) Third party agreements need not be in place (if applicable); and (4) Acquisition or site control need not be in place.
OCS will support an IDP under a cooperative agreement. A cooperative agreement is an award instrument of financial assistance used when substantial involvement is anticipated between OCS and the grantee during performance of the project. OCS will outline a plan of interaction with the grantee for implementation under the cooperative agreement. A schedule of tasks will be developed and agreed upon in addition to any special conditions relating to the implementation of the project.
The duties and responsibilities of the applicant and ACF/OCS in fulfilling the Cooperative Agreement during each phase will include the following:
• To implement activities described in the approved project description;
• Develop and implement work plans that will ensure that the services and activities included in the approved application address the goals and objectives of the approved project in an efficient, effective and timely manner;
• Submit regular semi-annual Financial Status (Standard Form 269) and progress reports that describe activities including, at a minimum, (a) information about the actions taken to implement the proposed project, and (b) the proposed plan for outcomes measurement and program evaluation of the activities supported with Federal funds.
• Work cooperatively and collaboratively with ACF officials, other Federal agency officials conducting related activities, and other entities or organizations contracted by ACF to assist in carrying out the purposes of the
• Notify the Office of Community Services Project Officer if revisions are needed to the cooperative agreement;
• Consult with the Office of Community Services project officer in implementing the activities on an on-going and frequent basis during each phase of the project;
• Comply with Community Economic Development Program regulations (unless otherwise expressly waived in the approved application) and all other applicable Federal statutes and regulations in effect during the time that applicant is receiving grant funding;
• Notify the Federal Project Officer of any key personnel changes in writing;
• Ensure that the executive director and/or project director, and the evaluator attend a two-day national workshop in Washington, DC. The workshop will be scheduled shortly after the effective date of the grant award. Additionally, the project director should plan annual meetings with their program and grants management specialists each year, thereafter, during the life of the grant. The evaluator should also attend a final evaluation workshop to be held at the end of the project period. Project budgets must include funds from the OCS award for travel to and attendance at these meetings and workshops; and
• To provide consultation to the grantee with regard to the development of the work plan, approaches to address problems that arise, and identification of areas needing technical assistance;
• To consult with and to provide the grantee the data collection requirements of OCS, and to keep the grantee informed of policy developments as they affect the implementation of the project;
• To provide timely review, comment and decisions on significant project documents;
• To assist in resolving issues or problems with regard to the grantee's ability to carry out the full range of activities included in the approved application in the most efficient and effective manner;
• To promptly review written requests for approval of deviations from the project description or approved budget.
• To assist in evaluation of any proposed subcontractors who will perform substantive work under this project.
An applicant requesting funding for an IDP must request the total amount of CED funding needed for the project on the SF424, Application for Federal Assistance. The maximum CED award for an IDP can be no more than $700,000 per project.
Applications that are exclusively for construction may have project periods of up to five years with continuation funding every twelve months. First year funding will be awarded for up to 20% of the requested total amount, not to exceed $140,000. The application must also include an incremental budget based on the design of the project for the four remaining years, not to exceed the balance of the total requested funding. A minimum of 2% of the award, or a minimum of $14,000, must be set aside for each continuation year.
Non-construction projects may have project periods of up to three years with continuation funding every twelve months. First year funding will be awarded for up to 20% of the total requested amount, not to exceed $140,000. The applicant must also include an incremental budget based on the design of the project for the two remaining years, not to exceed the balance of the total requested funding. A minimum of 2% of the award, or a minimum of $14,000, must be set aside for each continuation year.
Funding beyond the first 20% is dependent on a grantee's documenting (1) site control, (2) all of the non-CED funding required to complete the project and (3) referral sources. In addition, continuing funding will be subject to the availability of funds, satisfactory progress by the grantee on the project and a determination that continuation is in the best interests of the Federal Government. The decision to continue funding the project is at the sole discretion of OCS.
Applicants awarded a FY 2003 Incremental Development Project (IDP) grant cannot receive a second IDP grant until the first grant is significantly complete and has met most of its proposed goals and objectives. Particular attention will be paid to satisfying all job creation commitments.
Applicants awarded a FY 2002 or FY 2003 Incremental Development Project (IDP) award cannot receive a second IDP award until the first project is complete and has met most of its proposed goals and objectives. Particular attention will be paid to satisfying all job creation commitments.
Furthermore, applicants that have not completed a previously awarded IDP award are not eligible to receive another IDP award during the one year period following the end of the project period of the last IDP grant award.
The first increment of an Incremental Development Project may not exceed $140,000. An application that exceeds the upper value of the dollar range specified will be considered “non-responsive” and be returned to the applicant without further review.
Nonprofits having a 501 (c) (3) status with the IRS, other than institutions of higher education. Nonprofits that do not have a 501 (c) (3) status with the IRS, other than institutions of higher education. Faith-based community development corporations are eligible to apply.
An applicant must be a private, non-profit Community Development Corporation (CDC). For purposes of this grant program, the CDC must be governed by a Board of Directors consisting of residents of the community and business and civic leaders. The CDC must have as a principal purpose planning, developing, or managing low-income housing or community development activities.
Applications that do not include proof of nonprofit status with their application will be disqualified.
Any non-profit organization submitting an application must submit proof of its non-profit status in its application at the time of submission. The non-profit agency can accomplish this by providing:
(a) a reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS Code;
(b) a copy of a currently valid IRS tax exemption certificate;
(c) a statement from a State taxing body, State attorney general, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earnings accrue to any private shareholders or individuals;
(d) a certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status;
(e) or any of the items referenced above for a State or national parent organization and a statement signed by the parent organization that the applicant organization is a local non-profit affiliate.
Private, non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms” titled “Survey for Private, Non-Profit Grant Applicants” at
Applicants that do not include proof of CDC status in the application will be disqualified.
An applicant must be a private, non-profit Community Development Corporation. For purposes of this grant program, the CDC must be governed by a Board of Directors consisting of residents of the community and business and civic leaders. The CDC must have as a principal purpose, planning, developing, or managing low-income housing or community development projects.
Applicants must document their eligibility as a CDC for the purposes of this grant program. The application must include a list of governing board members along with their designation as a community resident, or business or civic leader. In addition, the application must include documentation that the organization has as a primary purpose planning, developing or managing low income housing or community development activities. This documentation may include incorporation documents or other official documents that identify the organization.
2.
There is no cost sharing or matching requirement but most economic development projects require significant funding in addition to the federal CED funds so applicants are strongly encouraged to mobilize the resources needed for a successful project. The ability to mobilize resources is considered in evaluating the feasibility of a proposal.
On June 27, 2003, the Office of Management and Budget published in the
Please ensure that your organization has a DUNS number. You may acquire a DUNS number at no cost by calling the dedicated toll-free DUNS number request line on 1-866-705-5711 or you may request a number on-line at
Office of Community Services, Operations Center, 1815 North Fort Myer Drive, Suite 300, Arlington, Virginia 22209, Email:
Each application must include the following components:
1. Table of Contents.
2. Abstract of the Proposed Project—one or two paragraphs, not to exceed 350 words, that describe the community in which the project will be implemented, beneficiaries to be served, type(s) of business(es) to be developed, type(s) of jobs to be created, projected cost-per-job, any land or building to be purchased or building constructed, resources leveraged and intended impact on the community.
3. Completed Standard Form 424—that has been signed by an official of the organization applying for the grant who has legal authority to obligate the organization. Under Box 11, indicate the Priority Area for which the application is written.
4. Standard Form 424A—Budget Information-Non-Construction Programs.
5. Standard Form 424B—Assurances-Non-Construction Programs.
6. Narrative Budget Justification—for each object class category required under Section B, Standard Form 424A.
Applicants are encouraged to use job titles and not specific names in developing the application budget.
However, the specific salary rates or amounts for staff positions identified must be included in the application budget.
7. Project Narrative—A narrative that addresses issues described in the “Application Review Information” and the “Review and Selection Criteria” sections of this announcement.
Submit application materials on white 8
Do not include organizational brochures or other promotional materials, slides, films, clips, etc.
The font size may be no smaller than 12 pitch and the margins must be at least one inch on all sides.
Number all application pages sequentially throughout the package, beginning with the abstract of the proposed project as page number one.
Present application materials either in loose-leaf notebooks or in folders with pages two-hole punched at the top center and fastened separately with a slide paper fastener.
Each application should include one signed original and two additional copies.
The application package including sections for the Table of Contents, Project Abstract, Project and Budget Narratives, business and work plans must not exceed 60 pages. The page limitation does not include Standard Forms and Assurances, Certifications, Disclosures, appendices and any supplemental documents as required in this announcement.
An application that exceeds the page limitation will be considered “non-responsive” and be returned to the applicant without further review.
Applicants must submit a signed Standard Form 424, Application for Federal Assistance, Standard Form 424A Budget Information—Non-Construction Projects, and Standard Form 424B Assurances—Non-Construction Programs.
Applicants must provide a certification regarding lobbying when applying for an award in excess of $100,000. Applicants must sign and
Applicants must disclose lobbying activities on the Standard Form LLL when applying for an award in excess of $100,000. Applicants who have used non-Federal funds for lobbying activities in connection with receiving assistance under this announcement shall complete a disclosure form to report lobbying. Applicants must sign and return the disclosure form, if applicable, with their applications.
Applicants must make the appropriate certification of their compliance with all Federal statutes relating to nondiscrimination. Applicants provide certification by signing the SF424 and need not mail back the certification with the application.
Applicants must make the appropriate certification of their compliance with the requirements of the Pro-Children Act of 1994 as outlined in Certification Regarding Environmental Tobacco Smoke. Applicants provide certification by signing the SF424 and need not mail back the certification with the application.
The closing time and date for receipt of applications is 4:30 p.m. Eastern Standard Time (EST) on July 19, 2004. Mailed or hand carried applications received after 4:30 p.m. on the closing date will be classified as late.
Applications hand carried by applicants, applicant couriers, other representatives of the applicant, or by overnight/express mail couriers shall be considered as meeting an announced deadline if they are received on or before the deadline date, between the hours of 8 a.m. and 4:30 p.m., Eastern Standard Time (EST), at the U.S. Department of Health and Human Services (HHS), Administration for Children and Families, Office of Community Services Operations Center, 1815 North Fort Myer Drive, Suite 300, Arlington, Virginia 22209, between Monday and Friday (excluding Federal holidays). This address must appear on the envelope/package containing the application with the note: “Attention: Operations Center”. Applicants are responsible for express/overnight mail services delivery.
This program is covered under Executive Order 12372, “Intergovernmental Review of Federal Programs,” and 45 CFR Part 100, “Intergovernmental Review of Department of Health and Human Services Programs and Activities.” Under the Order, States may design their own processes for reviewing and commenting on proposed Federal assistance under covered programs. As of October 1, 2003, the following jurisdictions have elected not to participate in the Executive Order process. Applicants from these jurisdictions or for projects administered by federally-recognized Indian Tribes need take no action in regard to E.O. 12372:
All States and Territories except Alabama, Alaska, Arizona, Colorado, Connecticut, Hawaii, Idaho, Indiana, Kansas, Louisiana, Minnesota, Montana, Nebraska, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, Virginia, Washington, Wyoming and Palau have elected to participate in the Executive Order process and have established Single Points of Contact (SPOCs). Applicants from these twenty-five jurisdictions need take no action.
Although the jurisdictions listed above no longer participate in the process, entities which have met the eligibility requirements of the program are still eligible to apply for a grant even if a State, Territory, Commonwealth, etc. does not have a SPOC. All remaining jurisdictions participate in the Executive Order process and have established SPOCs. Applicants from participating jurisdictions should contact their SPOCs as soon as possible to alert them of the prospective applications and receive instructions. Applicants must submit any required material to the SPOCs as soon as possible so that the program office can obtain and review SPOC comments as part of the award process. The applicant must submit all required materials, if any, to the SPOC and indicate the date of this submittal (or the date of contact if no submittal is required) on the Standard Form 424, item 16a. Under 45 CFR 100.8(a) (2), a SPOC has 60 days from the application deadline to comment on proposed new or competing continuation awards.
SPOCs are encouraged to eliminate the submission of routine endorsements as official recommendations. Additionally, SPOCs are requested to clearly differentiate between mere advisory comments and those official State process recommendations which may trigger the “accommodate or explain” rule.
When comments are submitted directly to ACF, they should be addressed to: Department of Health and Human Services, Administration for Children and Families, Division of Discretionary Grants, 370 L'Enfant Promenade, SW., Mail Stop 6C-462, Washington, DC 20447.
A list of the Single Points of Contact for each State and Territory is included with the application materials for this announcement.
OCS will not fund projects with a cost-per-job in CED funds that exceeds $10,000. An exception will be made if the project includes purchase of land or a building, or major renovation or construction of a building. In this instance, the applicant must explain the factors that raise the cost beyond $10,000. In no instance, will OCS allow for more than $15,000 cost-per-job in CED funds. Cost per job is calculated by dividing the number of jobs to be created by the amount of the CED grant request.
If an applicant is proposing a project which will affect a property listed in, or eligible for, inclusion in the National Register of Historic Places, it must identify this property in the narrative and explain how it has complied with the National Historic Preservation Act of 1996, as amended. If there is any question as to whether the property is listed in or eligible for inclusion in the National Register of Historic Places, the applicant must consult with the State Historic Preservation Officer and describe in the narrative the content of such consultation.
OCS will not fund any project where the role of the applicant is primarily to serve as a conduit for funds to organizations other than the applicant. The applicant must have a substantive role in the implementation of the project for which funding is requested. This prohibition does not bar the making of sub-grants or sub-contracting for specific services or activities needed to conduct the project.
Each application may include only one proposed project.
OCS will not consider applications that propose to establish Small Business Investment Corporations or Minority Enterprise Small Business Investment Corporations.
OCS will not fund projects that are primarily education and training projects. In projects where participants must be trained, any funds proposed for training must be limited to specific job-related training to those individuals who have been selected for employment in the grant supported project. Projects involving training and placement for existing vacant positions will be disqualified from competition.
OCS will not fund projects that would result in the relocation of a business from one geographic area to another resulting in job displacement.
Pre-award costs will not be covered by an award.
Applicants must provide proof of nonprofit status and proof of status as a community development corporation as required by statute and as described under “Additional Information on Eligibility.”
Because CED funds are Federal, all grantees must be capable of meeting the requirements of 45 CFR Part 74 concerning their financial management system. To assure that the applicant has such capability, applications must include a signed statement from a Certified or Licensed Public Accountant as to the sufficiency of the CDCs financial management system in accordance with 45 CFR 74 and financial statements for the CDC for the
Applicants for Priority Area 2. Incremental Development Projects, must submit a business plan. For incubator or microenterprise development projects, the business plan covers the project, not the individual business plans of beneficiaries.
The business plan is a major component that will be evaluated by an expert review panel, OCS and OGM to determine the feasibility of a business venture or other economic development project. It must address all the relevant elements as follows:
(1) EXECUTIVE SUMMARY (limit to 2 pages)
(2) Description of the business: The business as a legal entity and its general business category. Business activities must be described by Standard Industrial Codes (SIC) using the North American Industry Classification System (NAICS) and jobs by occupational classification. This information is published by the U. S. Department of Commerce in the Statistical Abstract of the United States, 1998, Tables No. 679 and 680. These tables include information necessary to meet this requirement.
(3) Description of the industry, current status and prospects.
(4) Products and Services, including detailed descriptions of:
(a) Products or services to be sold;
(b) Proprietary Position of any of the product,
(c) Features of the product or service that may give it an advantage over the competition;
(5) Market Research: This section describes the research conducted to assure that the business has a substantial market to develop and achieve sales in the face of competition. This includes researching:
(a) Customer base: Describe the actual and potential purchasers for the product or service by market segment.
(b) Market size and trends: Describe the site of the current total market for the product or service offered;
(c) Competition: Provide an assessment of the strengths and weaknesses of the competition in the current market;
(d) Estimated market share and sales: Describe the characteristics of the product or service that will make it competitive in the current market;
(6) Marketing Plan: The marketing plan details the product, pricing, distribution, and promotion strategies that will be used to achieve the estimated market share and sales projections. The marketing plan must describe what is to be done, how it will be done and who will do it. The plan addresses overall marketing, strategy, packaging, service and warranty, pricing, distribution and promotion.
(7) Design and Development Plans: If the product, process or service of the proposed venture requires any design and development before it is ready to be placed on the market, describe the nature, extent and cost of this work. The section covers items such as development status and tasks, difficulties and risks, product improvement and new products and costs.
(8) Operations Plan: An operations plan describes the kind of facilities, site location, space, capital equipment and labor force (part and/or full time and wage structure) that are required to provide the company's product or service.
(9) Management Team: This section describes the technical, managerial and business skills and experience to be brought to the project. This a description of key management personnel and their primary duties; compensation and/or ownership; the organizational structure and placement of this proposed project within the organization; the board of directors; management assistance and training needs; and supporting professional services.
(10) Overall Schedule: This section is the implementation plan which shows the timing and interrelationships of the major events or benchmarks necessary to launch the venture and realize its objectives. This includes a month-by-month schedule of activities such as product development, market planning, sales programs, production and operations. If the proposed project is for construction, this section lays out timeframes for conduct of predevelopment, architectural, engineering and environmental and other studies, and acquisition of permits for building, use and occupancy that are required for the project.
(11) Job Creation: This section describes the job creation activities and projections expected as a result of this project. This includes a description of the strategy that will be used to identify and hire individuals who are low-income, including those on TANF. This section includes the following:
(a) The number of permanent jobs that will be created during the project period, with particular emphasis on jobs for low-income individuals.
(b) For low-income individuals, the number of jobs that will be filled by low income individuals (this must be at least 60% of all jobs created); the number of jobs that have career development opportunities and a description of those jobs; the number of jobs that will be filled by individuals receiving TANF; the annual salary expected for each person employed.
(c) For low-income individuals who become self-employed, the number of self-employed and other ownership opportunities created; specific steps to be taken including on-going management support and technical assistance provided by the grantee or a third party to develop and sustain self-employment after the businesses are in place; and expected net profit after deductions of business expenses;
OCS will not recognize job equivalents nor job counts based on economic multiplier functions; jobs must be specifically identified.
(12) Financial Plan: The financial plan demonstrates the economic supports underpinning the project. Its shows the project's potential and the timetable for financial self-sufficiency. The following exhibits must be submitted for the first three years of the business' operation:
(a) Profit and Loss Forecasts—quarterly for each year;
(b) Cash Flow Projections—quarterly for each year;
(c) Pro forma balance sheets—quarterly for each year;
(d) Sources and Use of Funds Statement for all funds available to the project;
(e) Brief summary discussing any further capital requirements and methods or projected methods for obtaining needed resources.
(13) Critical Risks and Assumptions: This section covers the risks faced by the project and assumptions surrounding them. This includes a description of the risks and critical assumptions relating to the industry, the venture, its personnel, the product or service market appeal, and the timing and financing of the venture.
(14) Community Benefits: This section describes other economic and non-economic benefits to the community such as development of a community's physical assets; provision of needed, but currently unsupplied, services or products to the community; or improvement in the living environment.
An applicant must include a detailed work plan covering the activities to be undertaken and benchmarks that demonstrate progress toward stated goals and measurable objectives.
Applicants submitting an application for funding under Priority Area 2, Incremental Development Projects that proposes to use some or all of the requested CED funds to enter into a third party agreement in order to make an equity investment, such as the purchase of stock or a loan to an organization or business entity (including a wholly-owned subsidiary), are required to submit signed Third Party Agreements in the application, if available and executed by the time of submission of the application along with the business plan, for approval by OCS.
While Third Party Agreements need not be in place at the time of the application, following are requirements for these agreements.
It should be noted that the portion of a grant that will be used to fund project activities related to a third party agreement will not be released (in any instances) until the agreement has been approved by OCS.
All third party agreements must include written commitments as follows: From third party (as appropriate): (1) Low-income individuals will fill a minimum of 60% of the jobs to be created from project activities as a result of the injection of grant funds. (2) The grantee will have the right to screen applicants for jobs to be filled by low-income individuals and to verify their eligibility. (3) If the grantee's equity investment equals 25% or more of the business' assets, the grantee will have representation on the board of directors. (4) Reports will be made to the grantee regarding the use of grant funds on a quarterly basis or more frequently, if necessary. (5) Procedures will be developed to assure that there are no duplicate counts of jobs created. (6) That the third party will maintain documentation related to the grant objectives as specified in the agreement and will provide the grantee and HHS access to that documentation. From the grantee: (1) Detailed information on how the grantee will provide support and technical assistance to the third party in areas of recruitment and retention of low-income individuals. (2) How the grantee will provide oversight of the grant-supported activities of the third party for the life of the agreement. Detailed information must be provided on how the grant funds will be used by the third party by submitting a Sources and Uses of Funds Statement.
A third party agreement covering an equity investment must contain, at a minimum, the following: (1) Purpose(s) for which the equity investment is being made. (2) The type of equity transaction (
A third party agreement covering a loan transaction must contain, at a minimum, the following information: (1) Purpose(s) for which the loan is being made. (2) Interest rates and other fees. (3) Terms of the loan. (4) Repayment schedules. (5) Collateral security. (6) Default and collection procedures. (7) Signatures of the authorized officials of the lender and borrower.
All third party agreements must be accompanied by a signed statement from a Certified or Licensed Public Accountant as to the sufficiency of the third party's financial management system in accordance with 45 CFR part 74 and financial statements for the third party organization for the prior three years. If such statements are not available because the organization is a newly formed entity, the application must include a statement to this effect. The grantee is responsible for ensuring that grant funds expended by it and the third party are expended in compliance with Federal regulations of 45 CFR Part 74 and OMB Circular A-122.
Applications must include provision for an independent, methodologically sound evaluation of the effectiveness of the activities carried out with the grant and their efficacy in creating new jobs and business ownership opportunities. There must be a well-defined process evaluation, and an outcome evaluation whose design will permit tracking of project participants throughout the proposed project period. The evaluation must be conducted by an independent evaluator,
Public reporting burden for this collection of information is estimated to average 25 hours per response, including the time for reviewing instructions, gathering and maintaining the data needed, and reviewing the collection of information.
The project description is approved under Office of Management and Budget (OMB) Control Number 0970-0139.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The project description provides a major means by which an application is evaluated and ranked to compete with other applications for available assistance. The project description should be concise and complete and should address the activity for which Federal funds are being requested. Supporting documents should be included where they can present information clearly and succinctly. In preparing your project description, all information requested through each specific evaluation criteria should be provided. Awarding offices use this and other information in making their funding recommendations. It is important, therefore, that this information be included in the application.
Applicants required to submit a full project description shall prepare the project description statement in accordance with the following instructions and the specified evaluation criteria. The instructions give a broad overview of what your project description should include while the evaluation criteria expands and clarifies more program-specific information that is needed.
Provide a summary of the project description (a page or less) with reference to the funding request.
Clearly identify the physical, economic, social, financial, institutional, and/or other problem(s)
Identify the results and benefits to be derived. For example, describe the population to be served by the program and the number of new jobs that will be targeted to the target population. Explain how the project will reach the targeted population, how it will benefit participants including how it will support individuals to become more economically self-sufficient.
Outline a plan of action which describes the scope and detail of how the proposed work will be accomplished. Account for all functions or activities identified in the application. Cite factors which might accelerate or decelerate the work and state your reason for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technological innovations, reductions in cost or time, or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in such terms as the number of people to be served and the number of activities accomplished. Account for all functions or activities identified in the application. Cite factors that might accelerate or decelerate the work and state your reasons for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technical innovations, reductions in cost or time or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in, for example such terms as the “number of people served.” When accomplishments cannot be quantified by activity or function, list them in chronological order to show the schedule of accomplishments and their target dates.
If any data is to be collected, maintained, and/or disseminated, clearance may be required from the U.S. Office of Management and Budget (OMB). This clearance pertains to any “collection of information that is conducted or sponsored by ACF.”
List organizations, cooperating entities, consultants, or other key individuals who will work on the project. Include a short description of the nature of their effort or contribution.
Provide a narrative addressing how the results of the project and the conduct of the project will be evaluated. In addressing the evaluation of results, state how you will determine the extent to which the project has achieved its stated objectives and the extent to which the accomplishment of objectives can be attributed to the project. Discuss the criteria to be used to evaluate results, and explains the methodology that will be used to determine if the needs identified and discussed are being met and if the project results and benefits are being achieved. With respect to the conduct of the project, define the procedures to be employed to determine whether the project is being conducted in a manner consistent with the work plan presented and discuss the impact of the project's various activities on the project's effectiveness.
Provide information on the applicant organization(s) and cooperating partners such as organizational charts, financial statements, audit reports or statements from CPAs/Licensed Public Accountants, Employer Identification Numbers, names of bond carriers, contact persons and telephone numbers, child care licenses and other documentation of professional accreditation, information on compliance with Federal/State/local government standards, documentation of experience in the program area, and other pertinent information. Any non-profit organization submitting an application must submit proof of its non-profit status in its application at the time of submission.
The non-profit agency can accomplish this by providing a copy of the applicant's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in Section 501(c)(3) of the IRS code, or by providing a copy of the currently valid IRS tax exemption certificate, or by providing a copy of the articles of incorporation bearing the seal of the State in which the corporation or association is domiciled.
Provide line item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for the calculation to be duplicated. The detailed budget must also include a breakout by the funding sources identified in Block 15 of the SF-424.
Provide a narrative budget justification that describes how the categorical costs are derived. Discuss the necessity, reasonableness, and allocability of the proposed costs.
a. The business plan is sound and feasible. The project must be able to be implemented soon after a grant award is made. The business plan meets the requirements of this program announcement and development of business and creation of jobs will occur during the project period. (0-20 points)
b. The applicant has site control. (0-1 points)
c. Executed third party agreements meet the requirements set forth above. (0-2 points)
d. The required financial documents are contained in the application, clearly describe proposed use of CED funds and demonstrate the project is viable. (0-7 points)
a. Organizational profile.
The application demonstrates that the applicant has the management capacity, organizational structure and successful record of accomplishment relevant to business development, commercial development, physical development, and/or financial services and that it has the ability to mobilize other financial and in-kind resources. (0-10 points)
b. Staff skills, resources and responsibilities.
The application describes in brief resume form the experience and skills of
c. The application documents adequate facilities and resources (
d. The assigned responsibilities of the staff are appropriate to the tasks identified for the project and sufficient time of senior staff will be budgeted to assure timely implementation and cost effective management of the project. (0-2 points)
a. Results or benefits Expected.
Application proposes to produce permanent and measurable results including, but not limited to, employment and business ownership opportunities that reduce poverty, reduce the need for TANF assistance in the community and thus enable families to be economically self-sufficient. (0-3 points)
Application proposes a project designed to produce the above mentioned measurable results specifically in a rural community or urban neighborhood characterized by economic distress. Indicators of economic distress may include: High rate of poverty; high incidence of TANF program participation; high rates of unemployment; significant rates of children dropping out of school; high incidence of crime. (0-2 points)
b. Community empowerment and coordination.
Application documents that the applicant is an active partner in either a new or on-going comprehensive community revitalization project such as: A federally-designated Empowerment Zone, Enterprise Community or Renewal Community project that has clear goals of strengthening economic and human development in target neighborhoods; a State or local-government supported comprehensive neighborhood revitalization project; or a private sector supported community revitalization project. (0-2 points)
c. Cost-per-job.
During the project period, the proposed project will create new, permanent jobs or maintain permanent jobs for low-income residents at a cost-per-job not to exceed $10,000 in OCS funds unless the project involves construction or significant renovation. (0-5 points)
d. Career development opportunities.
The application documents that the jobs to be created for low-income people have career development opportunities that will promote self-sufficiency. (0-3 points)
a. The application documents that the project addresses a vital need in a distressed community. “Distressed community” is defined as a geographic urban neighborhood or rural community with high unemployment and pervasive poverty. The application documents that both the unemployment rate and poverty level for the targeted neighborhood or community are equal to or greater than the state or national level. (0-5 points)
b. The application cites the most recent available statistics from published sources,
c. The application shows how the project will respond to stated need. (0-3 points)
Sound evaluations are essential to the Community Economic Development Program. OCS requires applicants to include in their applications a well thought through outline of an evaluation plan for their project. The outline should explain how the applicant proposes to answer the key questions about how effectively the project is being/was implemented; whether the project activities, or interventions, achieved the expected immediate outcomes, and why or why not (the process evaluation); and whether and to what extent the project achieved its stated goals, and why or why not (the outcome evaluation). Together, the process and outcome evaluations should answer the question: “What did this program accomplish and why did it work/not work?'' Applicants are not being asked to submit a complete and final evaluation plan as part of their application; but they must include:
a. A well thought through outline of an evaluation plan that identifies the principal cause-and-effect relationships to be tested, and that demonstrates the applicant's understanding of the role and purpose of both process and outcome evaluations. (0-2 points)
b. A reporting format based on the grantee's demonstration of its activities (interventions) and their effectiveness, to be included in the grantee's semi-annual program progress report, which will provide OCS with insights and lessons learned, as they become evident, concerning the various aspects of the work plan, such as recruitment, training, support, public-private partnerships, and coordination with other community resources, as they may be relevant to the proposed project. (0-2 points)
c. The identity and qualifications of the proposed third-party evaluator, if not selected, the qualifications which will be sought in choosing an evaluator, which must include successful experience in evaluating community development programs, and the planning and/or evaluation of programs designed to foster self-sufficiency in low-income populations. (0-2 points)
d. A commitment to the selection of a third-party evaluator approved by OCS, and to completion of a final evaluation design and plan, in collaboration with the approved evaluator and the OCS Evaluation Technical Assistance Contractor during the six-month start-up period of the project, if funded. (0-2 points)
Applicants should ensure, above all, that the evaluation outline presented is consistent with their project design. A clear project framework of the type recommended earlier identifies the key project assumptions about the target populations and their needs, as well as the hypotheses, or expected cause-effect relationships to be tested in the project; and the proposed project activities, or interventions, that will address those needs in ways that will lead to the achievement of the project goals of self-sufficiency. It also identifies in advance the most important process and outcome measures that will be used to identify performance success and expected changes in individual participants, the grantee organization, and the community. Finally, as noted above, the outline should provide from prompt reporting, concurrently with the semi-annual program progress reports, of lessons learned during the course of the project, so that they may be shared without waiting for the final evaluation report.
e. For all of the above stated reasons, it is important that each successful applicant have a third-party evaluator selected and are performing at the very latest by the time the work program of the project is begun, and if possible before that time so that he or she can
The competitive procurement regulations (45 CFR, Part 74, Sections 74.40-74.48, especially Section 74.43) apply to service contracts such as those for evaluators.
It is suggested that applicants use no more than three (3) pages for this Element, plus the resume or position description for the evaluator, which should be included in an appendix.
a. Mobilization of resources:
The application documents the applicant has mobilized from public and/or private sources the proposed balance of non-OCS funding required to fully implement the project. Lesser contributions will be given consideration based upon the value documented. (0-5 points)
Cash resources such as cash or loans contributed from all project sources (except for those contributed directly by the applicant) are documented by letters of commitment from third parties making the contribution.
The value of in-kind contributions for personal property is documented by an inventory valuation for equipment and a certified appraisal for real property. Also, a copy of a deed or other legal document is required for real property.
Anticipated or projected program income such as gross or net profits from the project or business operations will not be recognized as mobilized or contributed resources.
b. Integration/coordination of services:
The application demonstrates a commitment to, or agreements with, local agencies responsible for administering child support enforcement, employment education, and training programs to ensure that welfare recipients, at-risk youth, displaced workers, public housing tenants, homeless and low-income individuals, and low-income custodial and non-custodial parents will be trained and placed in the newly created jobs. The applicant provides written agreements from the local TANF or other employment education and training offices, and child support enforcement agency indicating what actions will be taken to integrate/coordinate services that relate directly to the project for which funds are being requested. (0-2 points)
The agreement includes: (1) The goals and objectives that the applicant and the TANF or other employment education and training offices and/or child support enforcement agency expect to achieve through their collaboration; (2) the specific activities/actions that will be taken to integrate/coordinate services on an on-going basis; (3) the target population that this collaboration will serve; (4) the mechanism(s) to be used in integrating/coordinating activities; (5) how those activities will be significant in relation to the goals and objectives to be achieved through the collaboration; and (6) how those activities will be significant in relation to their impact on the success of the OCS-funded project. (0-2 points)
The application also provides documentation that illustrates the organizational experience is related to the employment, education and training program. (0-1 point)
a. Funds requested are commensurate with the level of effort necessary to accomplish the goals and objectives of the project. (0-2 points)
b. The application includes a detailed budget breakdown and a narrative justification for each of the budget categories in the SF-424A. The applicant presents a reasonable administrative cost. (0-2 points)
c. The estimated cost to the government of the project also is reasonable in relation to the anticipated results.(0-1 point)
Each application submitted to OCS will be screened to determine whether it was received by the closing date and time.
Applications received by the closing date and time will be screened for completeness and conformity with the following requirements. Only complete applications that meet the requirements listed below will be reviewed and evaluated competitively. Other applications will be returned to the applicants with a notation that they were unacceptable and will not be reviewed.
All applications must comply with the following requirements except as noted:
(a) The application must contain a signed Standard Form 424 Application for Federal Assistance “SF-424”, a Standard Form 424-A Budget Information “SF-424A” and signed Standard Form 424B Assurance—Non-Construction Programs “SF-424B” completed according to instructions provided in this Program Announcement. The forms SF-424 and the SF-424B must be signed by an official of the organization applying for the grant who has authority to obligate the organization legally. The applicant's legal name as required on the SF-424 (Item 5) must match that listed as corresponding to the Employer Identification Number (Item 6);
(b) The application must include a project narrative that meets requirements set forth in this announcement.
(c) The application must contain documentation of the applicant's tax-exempt and CDC statuses as indicated in the “Additional Information on Eligibility” section of this announcement.
Applications that pass the initial OCS screening will be reviewed and rated by a panel based on the program elements and review criteria presented in relevant sections of this program announcement.
The review criteria are designed to enable the review panel to assess the quality of a proposed project and determine the likelihood of its success. The criteria are closely related to each other and are considered as a whole in judging the overall quality of an application. The review panel awards points only to applications that are responsive to the program elements and relevant review criteria within the context of this program announcement.
The OCS Director and the program staff use the reviewer scores when considering competing applications. Reviewer scores will weigh heavily in funding decisions, but will not be the only factors considered.
Applications generally will be considered in order of the average scores assigned by the review panel. Because other important factors are taken into consideration, highly ranked applications are not guaranteed funding. These other considerations include, for example: the timely and proper completion by the applicant of projects funded with OCS funds granted in the last five (5) years; comments of reviewers and government officials; staff evaluation and input; amount and
1.
The successful applicants will be notified through the issuance of a Financial Assistance Award document which sets forth the amount of funds awarded, the terms and conditions of the award, the effective date of the award, the budget period for which funds are awarded, and the total project period for which support is contemplated. The Financial Assistance Award is signed and issued via postal mail by an authorized Grants Officer.
2.
Additional information about this program and its purpose can be located on the following Web site:
Administration for Children and Families, Office of Community Services.
The Community Services Block Grant (CSBG) Act of 1981, as amended, (Section 680 of the Community Opportunities, Accountability, and Training and Educational Services Act of 1998), authorizes the Secretary of the U.S. Department of Health and Human Services to make grants to provide technical and financial assistance for economic development activities designed to address the economic needs of low-income individuals and families by creating employment and business development opportunities. Pursuant to this Announcement OCS will award planning grants to Community Development Corporations (CDCs) that are less than three years old or inexperienced in implementing economic development projects. The primary purpose of this Priority Area is to assist eligible CDCs in planning, developing organizational capacity, identifying potential projects, mobilizing resources and developing a business plan to implement a project. Low-income beneficiaries of such projects include those who are determined to be living in poverty as determined by the HHS Guidelines on Poverty (See Appendix A). They may be unemployed, on public assistance, including Temporary Assistance for Needy Families (TANF), are at risk teenagers, custodial and non-custodial parents, public housing residents, persons with disabilities and persons who are homeless.
The following definitions apply:
CED projects should further HHS goals of strengthening American families and promoting their self-sufficiency, and OCS goals of promoting healthy families in healthy communities. The CED Program is particularly directed toward public-private partnerships that develop employment and business opportunities for low-income people and revitalize distressed communities.
Planning grants may include three to five feasibility studies covering business startups, business expansions, development of new products and services, and other newly-undertaken
Pursuant to this Program Announcement, OCS will award grants to CDCs that are inexperienced in implementing economic development projects. The primary purpose of this priority area is to assist eligible CDCs in planning, developing organizational capacity, identifying potential projects, mobilizing resources and developing a business plan to implement a project.
Eligible applicants cannot be more than three years old, or if more than three years old, have no experience in implementing economic development projects. (For the latter type of applicant, a written assurance must be provided in the project narrative that states “The applicant has no previous participation in economic development projects.”) The phrase “no previous participation in economic development projects” means an eligible applicant has not sponsored nor had any significant participation in projects that have provided employment or business development opportunities through business startups, expansions or development provision of financial services. In addition, applicants with housing experience must not have had primary responsibility in planning, developing, and managing housing projects.
Under this priority area, applicants may incur costs to: (a) Evaluate the feasibility of potential economic development projects (b) Develop a business plan related to a chosen project; (c) Mobilize resources for the chosen project; and (d) Develop organizational capacity. Examples of activities under item (d) are hiring staff, training board members and staff, recruiting community volunteers and developing management information systems.
The maximum CED award for a Planning Project cannot exceed $75,000, including the cost of travel for the program director to attend a two-day workshop in Washington, DC. The project and budget period can be no longer than 12 months. The result of a planning project is a business and work plan for a specific project for which the applicant may seek other Priority Area funds.
An application that exceeds the upper value of the dollar range specified will be considered “non-responsive” and will be returned to the applicant without further review.
An applicant must be a private, non-profit Community Development Corporation (CDC) less than three years old or inexperienced in developing and managing economic development projects. For purposes of this grant program, the CDC must be governed by a Board of Directors consisting of residents of the community and business and civic leaders. The CDC must have as a principal purpose: planning, developing, or managing low-income housing or community development activities.
Any non-profit organization submitting an application must submit proof of its non-profit status in its application at the time of submission. The non-profit agency can accomplish this by providing a reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS Code; a copy of a currently valid IRS tax exemption certificate; a statement from a State taxing body, State attorney general, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earnings accrue to any private shareholders or individuals; a certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status; or any of the items referenced above for a State or national parent organization and a statement signed by the parent organization that the applicant organization is a local non-profit affiliate.
Private, non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms” titled “Survey for Private, Non-Profit Grant Applicants” at
Applications that do not include proof of CDC status in the application will be disqualified.
An applicant must be a private, non-profit Community Development Corporation. For purposes of this grant program, the CDC must be governed by a Board of Directors consisting of residents of the community and business and civic leaders. The CDC must have as a principal purpose, planning, developing, or managing low-income housing or community development projects.
Applicants must document their eligibility as a CDC for the purposes of this grant program. The application must include a list of governing board members along with their designation as a community resident, or business or civic leader. In addition, the application must include documentation that the organization has as a primary purpose planning, developing or managing low income housing or community development activities. This documentation may include incorporation documents or other official documents that identify the organization.
Non-profit organizations applying for funding are required to submit proof of their non-profit status. Proof of non-profit status is any one of the following:
(a) A reference to the applicant organization's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in the IRS code.
(b) A copy of a currently valid IRS tax exemption certificate.
(c) A statement from a State taxing body, State Attorney General, or other appropriate State official certifying that the applicant organization has a non-profit status and that none of the net earnings accrue to any private shareholders or individuals.
(d) A certified copy of the organization's certificate of incorporation or similar document that clearly establishes non-profit status.
(e) Any of the items in the subparagraphs immediately above for a State or national parent organization and a statement singed by the parent organization that the applicant organization is a local non-profit affiliate.
None.
On June 27, 2003, the Office of Management and Budget published in the
Please ensure that your organization has a DUNS number. You may acquire a DUNS number at no cost by calling the dedicated toll-free DUNS number request line on 1-866-705-5711 or you may request a number on-line at
Office of Community Services, Operations Center, 1815 North Fort Meyer Drive, Suite 300, Arlington, Virginia 22209, Email:
Each application must include the following components:
1. Table of Contents.
2. Abstract of the Proposed Project—one or two paragraphs, not to exceed 350 words, that describe the community in which the project will be implemented, beneficiaries to be served, type(s) of business(es) to be developed, type(s) of jobs to be created, projected cost-per-job, any land or building to be purchased or building constructed, resources leveraged and intended impact on the community.
3. Completed Standard Form 424—that has been signed by an official of the organization applying for the grant who has legal authority to obligate the organization. Under Box 11. indicate the Priority Area for which the application is written.
4. Standard Form 424A—Budget Information-Non-Construction Programs.
5. Standard Form 424B—Assurances-Non-Construction Programs.
6. Narrative Budget Justification—for each object class category required under Section B, Standard Form 424A.
Applicants are encouraged to use job titles and not specific names in developing the application budget. However, the specific salary rates or amounts for staff positions identified must be included in the application budget.
7. Project Narrative—A narrative that addresses issues described in the “Application Review Information” and the “Review and Selection Criteria” sections of this announcement.
Submit application materials on white 8
Do not include organizational brochures or other promotional materials, slides, films, clips, etc.
The font size may be no smaller than 12 pitch and the margins must be at least one inch on all sides.
Number all application pages sequentially throughout the package, beginning with the abstract of the proposed project as page number one.
Present application materials either in loose-leaf notebooks or in folders with pages two-hole punched at the top center and fastened separately with a slide paper fastener.
Each application should include one signed original and two additional copies.
The application package including sections for the Table of Contents, Project Abstract, Project and Budget Narratives, business and work plans must not exceed 60 pages. The page limitation does not include Standard Forms and Assurances, Certifications, Disclosures, appendices and any supplemental documents as required in this announcement.
An application that exceeds the page limitation specified will be considered “non-responsive” and be returned to the applicant without further review.
Applicants must submit completed and signed SF 424 Application for Federal Assistance, SF 424A Budget Information—Non-Construction Programs, and Standard Form 424B, Assurances: Non-Construction Programs.
Applicants must provide a certification regarding lobbying when applying for an award in excess of $100,000. Applicants must sign and return the certification with their applications.
Applicants must disclose lobbying activities on the Standard Form LLL when applying for an award in excess of $100,000. Applicants who have used non-Federal funds for lobbying activities in connection with receiving assistance under this announcement shall complete a disclosure form to report lobbying. Applicants must sign and return the disclosure form, if applicable, with their applications.
Applicants must make the appropriate certification of their compliance with all Federal statutes relating to nondiscrimination. Applicants provide certification by signing the SF 424 and need not mail back the certification with the application.
Applicants must make the appropriate certification of their compliance with the requirements of the Pro-Children Act of 1994 as outlined in Certification Regarding Environmental Tobacco Smoke. Applicants provide certification by signing the SF 424 and need not mail the application back with the application.
You may submit your application to us in either electronic or paper format.
To submit an application electronically, please use the
Please note the following if you plan to submit your application electronically via Grants.gov.
• Electronic submission is voluntary.
• When you enter the Grants.gov site, you will find information about submitting an application electronically through the site, as well as the hours of operation. We strongly recommend that you do not wait until the application deadline date to begin the application process through Grants.gov.
• To use Grants.gov, you, as the applicant, must have a DUNS Number and register in the Central Contractor
• You will not receive additional point value because you submit a grant application in electronic format, nor will we penalize you if you submit an application in paper format.
• You may submit all documents electronically, including all information typically included on the SF 424 and all necessary assurances and certifications.
• Your application must comply with any page limitation requirements described in this program announcement.
• After you electronically submit your application, you will receive an automatic acknowledgement from Grants.gov that contains a Grants.gov tracking number. The Administration for Children and Families will retrieve your application from Grants.
• We may request that you provide original signatures on forms at a later date.
• You may access the electronic application for this program on
• You must search for the downloadable application package by the CFDA number.
Private non-profit organizations are encouraged to submit with their applications the survey located under “Grant Related Documents and Forms” titled “Survey for Private, Non-Profit Grant Applicants” at
The closing time and date for receipt of applications is 4:30 p.m. Eastern Standard Time (EST) on July 19, 2004. Mailed or hand carried applications received after 4:30 p.m. on the closing date will be classified as late.
Applications hand carried by applicants, applicant couriers, other representatives of the applicant, or by overnight/express mail couriers shall be considered as meeting an announced deadline if they are received on or before the deadline date, between the hours of 8 a.m. and 4:30 p.m., EST, at the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services' Operations Center, 1815 Fort Meyer Drive, Suite 300, Arlington, Virginia 22209 Attention: Operations Center, between Monday and Friday (excluding Federal holidays). This address must appear on the envelope/package containing the application with the note: “Attention: Operations Center”. Applicants are cautioned that express/overnight mail services do not always deliver as agreed.
This program is covered under Executive Order 12372, “Intergovernmental Review of Federal Programs,” and 45 CFR Part 100, “Intergovernmental Review of Department of Health and Human Services Programs and Activities.” Under the Order, States may design their own processes for reviewing and commenting on proposed Federal assistance under covered programs. As of October 1, 2003, the following jurisdictions have elected not to participate in the Executive Order process. Applicants from these jurisdictions or for projects administered by federally-recognized Indian Tribes need take no action in regard to E.O. 12372:
All States and Territories except Alabama, Alaska, Arizona, Colorado, Connecticut, Hawaii, Idaho, Indiana, Kansas, Louisiana, Minnesota, Montana, Nebraska, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, Virginia, Washington, Wyoming and Palau have elected to participate in the Executive Order process and have established Single Points of Contact (SPOCs). Applicants from these twenty-six jurisdictions need take no action.
Although the jurisdictions listed above no longer participate in the process, entities which have met the eligibility requirements of the program are still eligible to apply for a grant even if a State, Territory, Commonwealth, etc. does not have a SPOC. All remaining jurisdictions participate in the Executive Order process and have established SPOCs. Applicants from participating jurisdictions should contact their SPOCs as soon as possible to alert them of the prospective applications and receive instructions. Applicants must submit any required material to the SPOCs as soon as possible so that the program office can obtain and review SPOC comments as part of the award process. The applicant must submit all required materials, if any, to the SPOC and indicate the date of this submittal (or the date of contact if no submittal is required) on the Standard Form 424, item 16a. Under 45 CFR 100.8(a) (2), a SPOC has 60 days from the application deadline to comment on proposed new or competing continuation awards.
SPOCs are encouraged to eliminate the submission of routine endorsements as official recommendations. Additionally, SPOCs are requested to clearly differentiate between mere advisory comments and those official State process recommendations which may trigger the “accommodate or explain” rule.
When comments are submitted directly to ACF, they should be addressed to: Department of Health and Human Services, Administration for Children and Families, Division of Discretionary Grants, 370 L'Enfant Promenade, SW., Mail Stop 6C-462, Washington, DC 20447.
A list of the Single Points of Contact for each State and Territory is included with the application materials for this announcement.
OCS will not fund project where the role of the applicant is primarily to serve as a conduit for funds to organizations other than the applicant. The applicant must have a substantive role in the implement of the project for which funding is requested. This prohibition does not bar the making of sub-grants or sub-contracting for specific services or activities needed to conduct the project.
OCS will not consider applications that propose to establish Small Business Investment Corporations or Minority Enterprise Small Business Investment Corporations.
OCS will not fund projects that are primarily education and training projects. In projects where participants must be trained, any funds proposed for training must be limited to specific job-related training to those individuals who have been selected for employment in the grant supported project. Projects involving training and placement for existing vacant positions will be disqualified from competition.
OCS will not fund projects that would result in the relocation of a business from one geographic area to another resulting in job displacement.
Pre-award costs will not be covered by an award.
Applicants must provide proof of nonprofit status and proof of status as a community development corporation as required by statute and as described under “Additional Information on Eligibility.”
Because CED funds are Federal, all grantees must be capable of meeting the requirements of 45 CFR Part 74 concerning their financial management system. To assure that the applicant has such capability, applications must include a signed statement from a Certified or Licensed Public Accountant as to the sufficiency of the CDCs financial management system in accordance with 45 CFR 74 and financial statements for the CDC for the prior three years. If such statements are not available because the CDC is a newly formed entity, the application must include a statement to this effect. The CDC grantee is responsible for ensuring that grant funds expended by it and the third party are expended in compliance with Federal regulations of 45 CFR, Part 74 and OMB Circular A-122.
An applicant must include a detailed work plan covering the activities to be undertaken and benchmarks that demonstrate progress toward stated goals and measurable objectives.
Applications must include provision for an independent, methodologically sound evaluation of the effectiveness of the activities carried out with the grant and their efficacy in creating new jobs and business ownership opportunities. There must be a well-defined process evaluation, and an outcome evaluation whose design will permit tracking of project participants throughout the proposed project period. The evaluation must be conducted by an independent evaluator,
Public reporting burden for this collection of information is estimated to average 25 hours per response, including the time for reviewing instructions, gathering and maintaining the data needed, and reviewing the collection of information.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The project description provides a major means by which an application is evaluated and ranked to compete with other applications for available assistance. The project description should be concise and complete and should address the activity for which Federal funds are being requested. Supporting documents should be included where they can present information clearly and succinctly. In preparing your project description, all information requested through each specific evaluation criteria should be provided. Awarding offices use this and other information in making their funding recommendations. It is important, therefore, that this information be included in the application.
Applicants required to submit a full project description shall prepare the project description statement in accordance with the following instructions and the specified evaluation criteria. The instructions give a broad overview of what your project description should include while the evaluation criteria expands and clarifies more program-specific information that is needed.
Provide a summary of the project description (a page or less) with reference to the funding request.
Clearly identify the physical, economic, social, financial, institutional, and/or other problem(s) requiring a solution. The need for assistance must be demonstrated and the principal and subordinate objectives of the project must be clearly stated; supporting documentation, such as letters of support and testimonials from concerned interests other than the applicant, may be included. Any relevant data based on planning studies should be included or referred to in the endnotes/footnotes. Incorporate demographic data and participant/beneficiary information, as needed. In developing the project description, the applicant may volunteer or be requested to provide information on the total range of projects currently being conducted and supported (or to be initiated), some of which may be outside the scope of the program announcement.
Identify the results and benefits to be derived. For example, describe the population to be served by the program and the number of new jobs that will be targeted to the target population. Explain how the project will reach the targeted population, how it will benefit participants including how it will
Outline a plan of action which describes the scope and detail of how the proposed work will be accomplished. Account for all functions or activities identified in the application. Cite factors which might accelerate or decelerate the work and state your reason for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technological innovations, reductions in cost or time, or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in such terms as the number of people to be served and the number of activities accomplished. Account for all functions or activities identified in the application. Cite factors that might accelerate or decelerate the work and state your reasons for taking the proposed approach rather than others. Describe any unusual features of the project such as design or technical innovations, reductions in cost or time or extraordinary social and community involvement.
Provide quantitative monthly or quarterly projections of the accomplishments to be achieved for each function or activity in, for example such terms as the “number of people served.” When accomplishments cannot be quantified by activity or function, list them in chronological order to show the schedule of accomplishments and their target dates.
If any data is to be collected, maintained, and/or disseminated, clearance may be required from the U.S. Office of Management and Budget (OMB). This clearance pertains to any “collection of information that is conducted or sponsored by ACF.”
List organizations, cooperating entities, consultants, or other key individuals who will work on the project along with a short description of the nature of their effort or contribution.
Provide a narrative addressing how the results of the project and the conduct of the project will be evaluated. In addressing the evaluation of results, state how you will determine the extent to which the project has achieved its stated objectives and the extent to which the accomplishment of objectives can be attributed to the project. Discuss the criteria to be used to evaluate results, and explain the methodology that will be used to determine if the needs identified and discussed are being met and if the project results and benefits are being achieved. With respect to the conduct of the project, define the procedures to be employed to determine whether the project is being conducted in a manner consistent with the work plan presented and discuss the impact of the project's various activities on the project's effectiveness.
Provide information on the applicant organization(s) and cooperating partners such as organizational charts, financial statements, audit reports or statements from CPAs/Licensed Public Accountants, Employer Identification Numbers, names of bond carriers, contact persons and telephone numbers, child care licenses and other documentation of professional accreditation, information on compliance with Federal/State/local government standards, documentation of experience in the program area, and other pertinent information. Any non-profit organization submitting an application must submit proof of its non-profit status in its application at the time of submission.
The non-profit agency can accomplish this by providing a copy of the applicant's listing in the Internal Revenue Service's (IRS) most recent list of tax-exempt organizations described in section 501(c)(3) of the IRS code, or by providing a copy of the currently valid IRS tax exemption certificate, or by providing a copy of the articles of incorporation bearing the seal of the State in which the corporation or association is domiciled.
Provide line item detail and detailed calculations for each budget object class identified on the Budget Information form. Detailed calculations must include estimation methods, quantities, unit costs, and other similar quantitative detail sufficient for the calculation to be duplicated. The detailed budget must also include a breakout by the funding sources identified in Block 15 of the SF-424.
Provide a narrative budget justification that describes how the categorical costs are derived. Discuss the necessity, reasonableness, and allocability of the proposed costs.
The application describes the project, feasibility studies it proposes to conduct and organizational capacity building it proposes to undertake. (0-5 Points)
The work plan is results-oriented and related to conducting feasibility studies that address job creation and business development opportunities for low-income individuals. The applicant addresses the following: Specific outcomes to be achieved; performance targets that the project is committed to achieving, including a discussion of how project will verify the achievement of these targets; critical milestones which must be achieved if results are to be gained; organizational support, the level of support from the applicant organization; past performance in similar work; and specific resources contributed to the project that are critical to success. The planning project is able to be implemented soon after a grant award is made. (0-15 Points)
The work plan outlines realistic quarterly time schedules of work tasks by which the objectives (including the development of organizational capacity, a business plan and mobilization of resources) will be accomplished not withstanding any such potential problems. (0-5 Points)
The narrative describes the basis on which the applicant will determine the feasibility of a project and the determination of whether to pursue a business plan. (0-5 points)
The work plan describes critical issues or potential problems that might impact negatively on the project and it indicates how the project objectives will be attained despite these issues or problems. (0-5 points)
The applicant will conduct three to five feasibility studies of business development opportunities that may result in viable, full time permanent jobs. (0-5 points)
The proposed businesses are in stable or growth industries that can be sustained over the long term in the community. (0-5 points)
The business plan expected as a result of this project looks to be feasible based on the organizational capability and experience of the applicant's
The applicant demonstrates capacity to mobilize resources from the private sector, public resources, corporations and foundations, if the proposed project is implemented. (0-10 points)
The applicant documents that the project addresses a vital need in a distressed community. “Distressed community” is defined as a geographic urban neighborhood or rural community with high unemployment and pervasive poverty. The application documents that both the unemployment rate and poverty level for the targeted neighborhood of community are equal to or greater than the state or national level. The applications cites the most recent available statistics from published sources,
The applicant documents that it is an active partner in either a new or on-going comprehensive community revitalization project such as: A federally designated Empowerment Zone, Enterprise Community or Renewal Community project that has clear goals of strengthening economic and human development in target neighborhoods; a State or local-government supported comprehensive neighborhood revitalization project; or a privately supported community revitalization initiative. (0-3 points)
The applicant demonstrates that it has the management capacity, organizational structure and successful record of accomplishment relevant to community development and that it has the ability to mobilize other financial and in-kind resources. (0-10 points)
The application describes in brief resume form the experience and skills of the project director who is not only well qualified, but whose professional capabilities are relevant to the successful implementation of the project. If the key staff person has not yet been identified, the application contains a comprehensive position description that indicates that the responsibilities to be assigned to the project director are relevant to the successful implementation of the project. (0-5 points)
The application includes a self-evaluation component that describes criteria to be used to evaluate project results and explain the methodology to be used to determine whether criteria are met. (0-5 points)
The application defines procedures to be employed to determine whether the project is being conducted consistent with the work plans. (0-5 points)
Funds requested are commensurate with the level of effort necessary to accomplish the goals and the objectives of the project. (0-5 Points)
Each application submitted to OCS will be screened to determine whether it was received by the closing date and time.
Applications received by the closing date and time will be screened for completeness and conformity with the following requirements. Only complete applications that meet the requirements listed below will be reviewed and evaluated competitively. Other applications will be returned to the applicants with a notation that they were unacceptable and will not be reviewed.
All applications must comply with the following requirements except as noted:
(a) The application must contain a signed Standard Form 424 Application for Federal Assistance “SF-424”, a Standard Form 424-A Budget Information “SF-424A” and signed Standard Form 424B Assurance— Non-Construction Programs “SF-424B” completed according to instructions provided in this Program Announcement. The forms SF-424 and the SF-424B must be signed by an official of the organization applying for the grant who has authority to obligate the organization legally. The applicant's legal name as required on the SF-424 (Item 5) must match that listed as corresponding to the Employer Identification Number (Item 6);
(b) The application must include a project narrative that meets requirements set for in this announcement.
(c) The application must contain documentation of the applicant's tax-exempt and CDC statuses as indicated in the “Additional Information on Eligibility” section of this announcement.
Applications that pass the initial OCS screening will be reviewed and rated by a panel based on the program elements and review criteria presented in relevant sections of this program announcement.
The review criteria are designed to enable the review panel to assess the quality of a proposed project and determine the likelihood of its success. The criteria are closely related to each other and are considered as a whole in judging the overall quality of an application. The review panel awards points only to applications that are responsive to the program elements and relevant review criteria within the context of this program announcement.
The OCS Director and the program staff use the reviewer scores when considering competing applications. Reviewer scores will weigh heavily in funding decisions, but will not be the only factors considered.
Applications generally will be considered in order of the average scores assigned by the review panel. Because other important factors are taken into consideration, highly ranked applications are not guaranteed funding. These other considerations include, for example: the timely and proper completion by the applicant of projects funded with OCS funds granted in the last five (5) years; comments of reviewers and government officials; staff evaluation and input; amount and duration of the grant requested and the proposed project's consistency and harmony with OCS goals and policy; geographic distribution of applications; previous program performance of applicants; compliance with grant terms under previous HHS grants, including the actual dedication to program of mobilized resources as set forth in project applications; audit reports; investigative reports; and applicant's progress in resolving any final audit disallowance on previous OCS or other Federal agency grants.
In cases where more applications are approved for funding than ACF can fund with the money available, the Grants Officer shall fund applications in their order of approval until funds run out. In this case, ACF has the option of carrying over the approved applications up to a year for funding consideration in a later competition of the same program. These applications need not be reviewed and scored again if the program's evaluation criteria have not changed. However, they must then be
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Additional Information about this program and its purpose can be located on the following Web site:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by June 18, 2004.
OMB is still experiencing significant delays in the regular mail, including first class and express mail, and messenger deliveries are not being accepted. To ensure that comments on the information collection are received, OMB recommends that comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: Fumie Yokota, Desk Officer for FDA, FAX: 202-395-6974.
Peggy Robbins, Office of Management Programs (HFA-250), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-1223.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The authority for FDA to collect the information derives from the FDA Commissioner's authority, as specified in section 903(d)(2) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 393(d)(2)). The “Health and Diet Survey—2004 Supplement” will provide FDA with information about consumers' knowledge of dietary fats and the risk of coronary heart disease as well as consumers' attitudes toward diet, health, and physical activity. A total of 2,200 adults in the 50 States and the District of Columbia will be interviewed by telephone. Participation will be voluntary. The survey will collect information concerning the following items: (1) Knowledge of the relationships between the risk of heart disease and dietary fats, including saturated fat, trans fatty acids, hydrogenated oil, omega-3 fatty acids, monounsaturated fats, and polyunsaturated fats; (2) attitudes toward diet, health, and physical activity; and (3) demographics and health status.
The agency has established specific targets to improve consumer understanding of diet-disease relationships, and in particular, the relationships between dietary fats and the risk of coronary heart disease, the leading cause of death in the United States. FDA intends to evaluate and track consumer understanding of heart-healthy and heart-harmful fats (saturated fat, trans fatty acids, and omega-3 fatty acids) as initial outcome measures of its achievement in improving public health. The primary purpose of the information collected in the survey will be to gauge current levels of consumer understanding. The establishment of a baseline of consumer understanding will be useful for the development of performance indicators to identify and measure incremental improvement in consumer understanding. A secondary purpose of the information will be to increase the agency's understanding of consumers' attitudes toward diet, health, and physical activity. This information will provide insight for the exploration of effective communication strategies and messages to assist consumers in making informed dietary and lifestyle choices.
In the
FDA estimates the burden of this collection of information as follows:
These estimates are based on FDA's experience with previous consumer surveys. Prior to the administration of the survey, the agency plans to conduct a pretest of the final questionnaire to examine and reduce potential problems in survey administration The pretest will be conducted in three waves, each with nine respondents. The agency will use a screener to select an eligible adult respondent in each household to participate in the survey. Target sample size of the survey is 2,000 respondents who complete the interview. The agency, as part of an effort to increase survey participation, plans to re-contact and complete the interview with prospective respondents who refuse to participate at initial contacts. Two hundred of those who refuse for the second time, defined as “initial refusers,” will be administered a shorter interview about their knowledge of saturated fat, trans fatty acids, omega-3 fatty acids, and the risk of coronary heart disease.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal agencies are required to publish notice in the
Submit written or electronic comments on the collection of information by July 19, 2004.
Submit electronic comments on the collection of information to:
Karen Nelson, Office of Management Programs (HFA-250), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-1482.
Under the PRA (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
FDA's patent extension activities are conducted under the authority of the Drug Price Competition and Patent Term Restoration Act of 1984 and the Animal Drug and Patent Term Restoration Act of 1988 (35 U.S.C. 156). New human drugs, animal drugs, human, biological, medical device, food additive, or color additive products regulated by FDA must undergo FDA safety, or safety and effectiveness, review before marketing is permitted. Where the product is covered by a patent, part of the patent's term may be consumed during this review, which diminishes the value of the patent. In enacting 35 U.S.C. 156, Congress sought to encourage development of new, safer, and more effective medical and food
Since 1992, seven requests for revision of the regulatory review period have been submitted under § 60.24. Three regulatory review periods have been altered. Two due diligence petitions have been submitted to FDA under § 60.30. There have been no requests for hearings under § 60.40 regarding the decisions on such petitions.
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal agencies are required to publish notice in the
Submit written or electronic comments on the collection of information by July 19, 2004.
Submit electronic comments on the collection of information to:
Denver Presley, Office of Management Programs (HFA-250), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-1472.
Under the PRA, (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal agencies to provide a 60-day notice in the
With respect to the proposed collection of information, FDA invites comments on these topics: (1) Whether
FDA has the responsibility under the Federal Food, Drug, and Cosmetic Act (the act), for the approval of new animal drugs that are safe and effective. Section 512(b) of the act (21 U.S.C. 360b(b)), requires that a sponsor submit and receive approval of an NADA, before interstate marketing is allowed. The regulations implementing statutory requirements for NADA approval have been codified under part 514 (21 CFR part 514). NADA applicants generally use a single form, FDA 356V. The NADA must contain, among other things, safety and effectiveness data for the drug, labeling, a list of components, manufacturing and controls information, and complete information on any methods used to determine residues of drug chemicals in edible tissues. While the NADA is pending, an amended application may be submitted for proposed changes. After an NADA has been approved, a supplemental application must be submitted for certain proposed changes, including changes beyond the variations provided for in the NADA and other labeling changes. An amended application and a supplemental application may omit statements concerning which no change is proposed. This information is reviewed by FDA scientific personnel to ensure that the intended use of an animal drug, whether as a pharmaceutical dosage form, in drinking water, or in medicated feed, is safe and effective. The respondents are pharmaceutical firms that produce veterinary products and commercial feed mills.
FDA estimates the burden of this collection of information as follows:
The estimate of the burden hours required for reporting are based on fiscal year 2003 data. The burden estimate includes original NADAs, supplemental NADAs and amendments to unapproved applications.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a guidance for industry entitled “Fixed Dose Combination and Co-Packaged Drug Products for Treatment of HIV.” This guidance is intended to encourage sponsors to develop fixed dose combinations (FDC) and co-packaged products for the treatment of human immunodeficiency virus (HIV) infection. The availability of combination products may help to improve patient adherence to and facilitate distribution programs for treatment regimens for HIV.
Submit written or electronic comments on the draft guidance by July 19, 2004. General comments on agency guidance documents are welcome at any time.
Submit written requests for single copies of this guidance to the Division of Drug Information (HFD-240), Center for Drug Evaluation and Research, Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857. Send one self-addressed adhesive label to assist that office in processing your requests. Submit written comments on the guidance to the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. See the
Debra B. Birnkrant, Center for Drug Evaluation and Research (HFD-530), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301 827-2330.
FDA is announcing the availability of a draft guidance for industry entitled “Fixed Dose Combination and Co-Packaged Drug Products for Treatment of HIV.” This guidance is intended to encourage the development of fixed dose combination (FDC) and co-packaged products for the treatment of human immunodeficiency virus (HIV). The guidance addresses the agency's current thinking regarding the types of information that should be provided in an application seeking approval for an
Combination therapy is essential for the treatment of HIV/AIDS. At least three active drugs, usually from two different classes, are required to suppress the virus, allow recovery of the immune system, and reduce the emergence of HIV resistance. In the United States and developing countries, simplified HIV regimens in the form of co-packaged drugs (such as blister packs) or FDCs may facilitate distribution of antiretroviral therapies and improve patient adherence to the regimens.
Although there are more than 20 unique antiretroviral drugs approved in the United States, only a few are approved for use as FDC products, and none are approved as co-packaged products. Some antiretrovirals should not be combined due to overlapping toxicities and potential viral antagonism. Other antiretrovirals should not be used in pregnant women and other special populations. It is important, therefore, that possible combinations of these products be evaluated for safety and efficacy in the various populations that may have need of them.
Recently, newer FDCs that have not been approved by FDA have received attention, and some are being promoted for use in resource poor nations where HIV/AIDS has reached epidemic proportions. These FDCs may offer cost advantages and allow simplified dosing because all three drugs are in one pill. However, the safety, efficacy, and quality of these products have not been evaluated by FDA. Products whose safety, efficacy, and quality do not conform to expected standards may pose a threat to individual patients by increasing the chances of substandard performance, which may lead not only to treatment failure, but also to the development and spread of resistant virus.
FDA is prepared to move swiftly to evaluate such products when applications for them are submitted for approval. This guidance seeks to clarify what regulatory requirements would be applied to such applications, what issues might be of concern, and how these should be addressed. Different considerations apply depending on whether a sponsor owns or has a right of reference to all of the data required to support an application or a sponsor plans to rely on literature or the FDA's findings of safety and effectiveness for an approved drug. Where appropriate, this guidance addresses the issues associated with these different scenarios.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the agency's current thinking on FDC and co-packaged products for treating HIV infection. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.
Interested persons may submit written comments on the guidance to the Division of Dockets Management (see
Persons with access to the Internet may obtain the document at either
Food and Drug Administration, HHS.
Notice of eligibility; request for data and information; extension of comment period.
The Food and Drug Administration (FDA) is extending to August 16, 2004, the comment period for the safety and effectiveness review of piroctone olamine, 0.05 percent to 0.5 percent and 0.1 percent to 1.0 percent, for use as a dandruff control single active ingredient in leave-on and rinse-off dosage forms, respectively. FDA published a notice of eligibility and call-for-data for safety and effectiveness data and information on piroctone olamine in the
Submit data, information, and general comments by August 16, 2004.
Submit written comments, data, and information to the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic comments, data, and information to
Michael L. Koenig, Center for Drug Evaluation and Research (HFD-560), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-2222.
In the
On April 16, 2004, Keller and Heckman LLP, on behalf of Clariant GmbH, requested a 90-day extension beyond the May 18, 2004, deadline for the submission of safety and effectiveness data concerning piroctone olamine (Ref. 1). The request stated that additional time is needed to assemble a comprehensive submission for this ingredient. FDA considers an extension of time for submission of data, information, and general comments concerning the safety and effectiveness of piroctone olamine to be in the public interest. Accordingly, FDA is extending the comment period for 90 days to August 16, 2004, as requested.
Interested persons should submit comments, data, and general information to the Division of Dockets Management (see
Under § 330.14(h), any product containing the conditions for which data and information are requested may not be marketed as an OTC drug in the United States at this time unless it is the subject of an approved new drug application or abbreviated new drug application.
The following reference is on display in the Division of Dockets Management (see
1. Comment No. EXT1.
Food and Drug Administration, HHS.
Notice; availability.
The Food and Drug Administration (FDA) is announcing the availability of a guidance for industry (#149) entitled “Studies to Evaluate the Safety of Residues of Veterinary Drugs in Human Food: General Approach to Testing” (VICH GL33). This guidance has been developed by the International Cooperation on Harmonization of Technical Requirements for Registration of Veterinary Medicinal Products (VICH). This guidance outlines a recommended testing approach to assure human food safety following the consumption of food products derived from animals treated with veterinary drugs.
Submit written or electronic comments at any time.
Submit written requests for single copies of the guidance to the Communications Staff (HFV-12), Center for Veterinary Medicine, Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Submit written comments on the guidance to the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic comments to
Louis T. Mulligan, Center for Veterinary Medicine (HFV-153), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-827-6984, e-mail:
In recent years, many important initiatives have been undertaken by regulatory authorities and industry associations to promote the international harmonization of regulatory requirements. FDA has participated in efforts to enhance harmonization and has expressed its commitment to seek scientifically based harmonized technical procedures for the development of pharmaceutical products. One of the goals of harmonization is to identify and then reduce differences in technical requirements for drug development among regulatory agencies in different countries.
FDA has actively participated in the International Conference on Harmonization of Technical Requirements for Approval of Pharmaceuticals for Human Use for several years to develop harmonized technical requirements for the approval of human pharmaceutical and biological products among the European Union, Japan, and the United States. The VICH is a parallel initiative for veterinary medicinal products. The VICH is concerned with developing harmonized technical requirements for the approval of veterinary medicinal products in the European Union, Japan, and the United States, and includes input from both regulatory and industry representatives.
The VICH Steering Committee is composed of member representatives from the European Commission, European Medicines Evaluation Agency; European Federation of Animal Health; Committee on Veterinary Medicinal Products; the FDA; the U.S. Department of Agriculture; the Animal Health Institute; the Japanese Veterinary Pharmaceutical Association; the Japanese Association of Veterinary Biologics; and the Japanese Ministry of Agriculture, Forestry and Fisheries.
Four observers are eligible to participate in the VICH Steering Committee: One representative from the Government of Australia/New Zealand, one representative from the industry in Australia/New Zealand, one representative from the Government of Canada, and one representative from the industry of Canada. The VICH Secretariat, which coordinates the preparation of documentation, is provided by the International Federation for Animal Health (IFAH). An IFAH representative also participates in the VICH Steering Committee meetings.
In the
Existing toxicological testing recommendations for veterinary drugs have evolved from the toxicological tests for human medicines, food additives, and pesticides. The following guidance was developed to include tests particularly relevant to the identification of a no-observable adverse effect level (NOAEL) for veterinary drugs. The scope of this guidance is to identify the following tests: (1) Basic tests recommended for all new animal drugs used in food-producing animals in order to assess the safety of drug residues present in human food; (2)
This document, developed under the VICH process, has been revised to conform to FDA's good guidance practices regulation (21 CFR 10.115). For example, the document has been designated “guidance” rather than “guideline.” Because guidance documents are not binding, unless specifically supported by statute or regulation, mandatory words such as “must,” “shall,” and “will” in the original VICH documents have been substituted with “should.”
This guidance document represents the agency's current thinking to establish the safety of veterinary drug residues in human food in a variety of toxicological evaluations. This guidance does not create or confer any rights for or on any person and will not operate to bind FDA or the public. An alternative method may be used as long as it satisfies the requirements of applicable statutes and regulations.
As with all of FDA's guidances, the public is encouraged to submit written or electronic comments pertinent to this guidance. FDA will periodically review the comments in the docket and, where appropriate, will amend the guidance. The agency will notify the public of any such amendments through a notice in the
Interested persons may submit to the Division of Dockets Management (see
Copies of the guidance document entitled “Studies to Evaluate the Safety of Residues of Veterinary Drugs in Human Food: General Approach to Testing” (VICH GL33) may be obtained on the Internet from the CVM home page at
Under the provisions of section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the Office of Extramural Research, the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request to review and approve the information collection listed below. The proposed information collection was previously published in the
The annual reporting burden is as follows:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of a meeting of the National Advisory Council for Complementary and Alternative Medicine.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and/or contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications and/or contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
The public comments session is scheduled from 3:40 p.m.-4 p.m. Each speaker will be permitted 5 minutes for their presentation. Interested individuals and representatives of organizations are requested to notify Dr. Jane Kinsel, National Center for Complementary and Alternative Medicine, NIH, 6707 Democracy Boulevard, Suite 401, Bethesda, MD 20892, 301-496-6701, fax: 301-480-0087. Letters of intent to present comments, along with a brief description of the organization represented, should be received no later that 5 p.m. on May 25, 2004. Only one representative of an organization may present oral comments. Any person attending the meeting who does not request an opportunity to speak in advance of the meeting may be considered for oral presentation, if time permits, and at the discretion of the Chairperson. In addition, written comments may be submitted to Dr. Jane Kinsel at the address listed above up to 10 calendar days (June 14, 2004) following the meeting.
Copies of the meeting agenda and the roster of members will be furnished upon request by contacting Dr. Jane Kinsel, Executive Secretary, NACCAM, National Institues of Health, 6707 Democracy Boulevard, Suite 401, Bethesda, MD 20892, 301-496-6701, fax: 301-480-0087, or via e-mail at
In the interest of security, NIH has instituted stringent procedures for entrance into the building by non-government employees. Persons without a government I.D. will need to show a photo I.D. and sign-in at the security desk upon entering the building.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets of commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of a meeting of the Recombinant DNA Advisory Committee.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should inform the contact person listed below in advance of the meeting.
This notice is being published less than 15 days prior to the meeting date because of scheduling problems with presenters at the meeting.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
OMB's “Mandatory Information Requirements for Federal Assistance Program Announcements” (45 FR 39592, June 11, 1980) requires a statement concerning the official government programs contained in the Catalog of Federal Domestic Assistance. Normally NIH lists in its announcements the number and title of affected individual programs for the guidance of the public. Because the guidance in this notice covers virtually every NIH and Federal research program in which DNA recombinant molecules techniques could be used, it has been determined not to be cost effective or in the public interest to attempt to list these programs. Such a list would likely require several additional pages. In addition, NIH could not be certain that every Federal program would be included as many Federal agencies, as well as private organizations, both national and international, have elected to follow the NIH Guidelines. In lieu of the individual program listing, NIH invites readers to direct questions to the information address above about whether individual programs listed in the Catalog of Federal Domestic Assistance are affected.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
The National Toxicology Program (NTP) announces its intent to review additional agents, substances, mixtures and exposure circumstances for possible listing in the Report on Carcinogens (RoC), Twelfth Edition that is scheduled for publication in 2006. This Report (previously known as the Annual Report on Carcinogens) is a Congressionally mandated listing of known human carcinogens and reasonably anticipated human carcinogens and its preparation is delegated to the NTP by the Secretary, Department of Health and Human Services (DHHS). Section 301(b)(4) of the Public Health Service Act, as amended, provides that the Secretary, DHHS shall publish a report, which contains a list of all substances (1) which either are known to be human carcinogens or may reasonably be anticipated to be human carcinogens, and (2) to which a significant number of persons residing in the United States (US) are exposed. The law also states that the reports should provide available information on the nature of exposures, the estimated number of persons exposed and the extent to which the implementation of Federal regulations decreases the risk to public health from exposure to these chemicals.
A nomination recommended for review in the RoC is evaluated initially by the NIEHS/NTP RoC nomination review committee, composed of scientists from the NIEHS/NTP staff, to determine if the information available for a nomination indicates the criteria for listing can be applied and warrants formal consideration by the NTP. The scientific review of a nomination involves three separate scientific reviews: two Federal review groups and one non-government peer review body (a subcommittee of the NTP Board of Scientific Counselors) that meets in an open, public forum. Throughout the review process, multiple opportunities are provided for public input including comment at the public meeting of the NTP Board RoC Subcommittee. In reviewing nominations for the RoC, all available data and public comments are considered in the application of the criteria for inclusion or removal of candidate agents, substances, mixtures
The criteria used in the review process and a detailed description of the review procedures, including the steps in the current formal review process, can be obtained from the NTP Web site at
The following table identifies the 21 nominations that the NTP may consider for review in 2004 or 2005, as either a new listing in or changing the current listing in the Twelfth Report. These nominations are provided with their Chemical Abstracts Services (CAS) Registry numbers (where available) and pending review action. Additional nominations for the Twelfth Report or modifications to the nominations in the attached table may be identified and would be announced in future
The NTP solicits and encourages the broadest participation from interested individuals or parties in nominating agents, substances, or mixtures for review for the Twelfth and future RoCs. Nominations should contain a rationale for review. Appropriate background information and relevant data (
Transportation Security Administration (TSA), DHS.
Notice inviting applications under the Intercity Bus Security Grant Program.
The purpose of the Intercity Bus Security Program is to improve security for intercity bus operators and passengers.
The Intercity Bus Security Grant Program improves security for operators and passengers by providing bus security enhancements and training to bus companies and others. Competitive grant funding is used to address a wide variety of security needs including driver protection, tracking and communications with over-the-road buses, passenger and baggage screening, security assessments and/or development of security plans, and training for transportation personnel to recognize and respond to criminal attacks and terrorist threats. The grants will also fund physical security enhancements such as fencing, lighting, and surveillance equipment at locations where buses are parked and maintained. Funds in the amount of $9,900,000 appropriated from Public Law 108-90, “Department of Homeland Security Appropriations Act, 2004,” are being awarded under the Intercity Bus Security Grant Program.
Applications must be received by Wednesday, July 7, 2004, 4 p.m. eastern daylight saving time.
Information about this funding opportunity and the application material are available through the TSA Internet site at
Elizabeth Dorfman, Office of Maritime and Land Security, TSA-8, Transportation Security Administration, 601 South 12th Street, Arlington, VA 22202-4220; telephone: (571) 227-2190, e-mail:
Total anticipated funding available for the Intercity Bus Security Grant Program is $9,900,000. Awards under this program are subject to the availability of funds.
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice of upcoming meeting via conference call.
This notice sets forth the schedule and proposed agenda of an upcoming meeting of the Manufactured Housing Consensus Committee (the Committee) to be held via telephone conference. This meeting is open to the general public with participation.
The conference call will be held on Monday, June 7, 2004, from 11 a.m. to 3 p.m.
Information concerning the conference call can be obtained from the Department's Consensus Committee Administering Organization, the National Fire Protection Association (NFPA). Interested parties can log onto NFPA's website for instructions on how to participate and for contact information for the conference call:
William W. Matchneer III, Administrator, Office of Manufactured Housing Programs, Office of the Deputy Assistant Secretary for Regulatory
Notice of this meeting is provided in accordance with Section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C. App.2) and 41 CFR 102-3.150. The Manufactured Housing Consensus Committee was established under Section 604(a)(3) of the National Manufactured Housing Construction and Safety Standards Act of 1974, 42 U.S.C. 4503(a)(3). The Consensus Committee is charged with providing recommendations to the Secretary to adopt, revise, and interpret manufactured housing construction and safety standards and procedural and enforcement regulations, and with developing proposed model installation standards. The purpose of this conference call is to discuss the Consensus Committee's review and recommendations to the Secretary on the draft Proposed Installation Standards.
E. Task group recommendations on proposed rule—
Bureau of Land Management, Interior.
Notice.
Notice is hereby given that effective immediately, off road vehicles (ORV) are restricted on selected public lands administered by the Bureau of Land Management (BLM), Ely Field Office within the Duck Creek Basin. ORV's will be limited to designated roads and trails in the Duck Creek Basin on an interim basis. The BLM is temporarily closing roads on public land to be consistent with the Duck Creek travel management plan map. This action will allow BLM, Ely Field Office to address concerns related to unrestricted cross-country travel in the specific places where resources are now damaged. The Duck Creek Basin is critical habitat for mule deer, elk and peregrine falcons. The purpose of the emergency interim measure is to wildlife habitat, rangeland resources, soil, vegetation, cultural resources, recreation habitat and other resources from imminent adverse impacts from ORV use. Exemptions from this restriction will apply for BLM authorized permittees, official Nevada State business and BLM law enforcement. The authorized officer may make other exemptions to this restriction on a case-by-case basis. This restriction will remain in effect until BLM completes a land use plan amendment or revision for OHV management.
Jack Tribble, Lead Outdoor Recreation Planner, Bureau of Land Management, Ely Field Office, HC 33 Box 33500, Ely, Nevada 89301, e-mail
As an interim measure, BLM is joining the U.S. Forest Service, Nevada State Division of Wildlife, user groups and public citizens in implementing travel restriction decisions of the White Pine County Coordinated Resource Management Steering Committee (WPCRM). The Committee's travel restriction decisions were based on citizen lead Technical Review Team's recommendations that analyzed resource concerns and user demands over a two-year period. The travel limitations and road closures shall not be construed as a limitation on BLM's future planning and off-highway vehicle route designations. The referenced map is available for review at the above address.
The authority for this restriction and closure is 43 CFR 8341.2 and 43 CFR 8341.1. Violations of this restriction and closure are punishable by a fine not to exceed $1,000 and/or imprisonment not to exceed 12 months as provided in 43 CFR 8360.0-7.
Bureau of Reclamation, Interior.
Notice of adoption of an interim 602(a) storage guideline for management of the Colorado River.
Pursuant to the National Environmental Policy Act (NEPA) of 1969 (as amended), the Bureau of Reclamation has prepared a final environmental assessment (EA) for adoption of an interim 602(a) storage guideline for management of the Colorado River. The Secretary of the Department of the Interior (Secretary), acting through the Bureau of Reclamation, proposed the adoption of an interim 602(a) storage guideline that would assist the Secretary in making a determination of the quantity of water considered necessary as of September 30 of each year, as required by article II(1) of the 1970 Criteria for Coordinated Long-Range Operation of Colorado River Reservoirs pursuant to the Colorado River Basin Project Act of September 30, 1968.
We are notifying the public that a Finding of No Significant Impact (FONSI) on the proposed guideline was approved by Bureau of Reclamation Regional Directors Rick L. Gold and
Copies of the final EA and FONSI are available from Tom Ryan, Bureau of Reclamation, Upper Colorado Regional Office, 125 South State Street, Salt Lake City, Utah 84138-1147; telephone (801) 524-3732; faxogram (801) 524-5499; e-mail:
Copies of the EA and FONSI are also available for public review and inspection at the following locations:
• Bureau of Reclamation, Upper Colorado Regional Office, 125 South State Street, Room 7239, Salt Lake City, Utah 84138-1147
• Bureau of Reclamation, Denver Office Library, Denver Federal Center, Building 67, Room 167, Denver, Colorado 80225-0007
• Bureau of Reclamation, Main Interior Building, Room 7060-MIB, 1849 C Street, NW, Washington, DC 20240-0001
The Secretary of the Interior, acting through the Bureau of Reclamation (Reclamation), has proposed the adoption of an interim 602(a) storage guideline that will assist the Secretary of the Interior in making a determination of the quantity of water considered necessary as of September 30 of each year to assist in implementation of and as required by Article II(1) of the 1970 Criteria for Coordinated Long-Range Operation of Colorado River Reservoirs (Long-Range Operating Criteria) pursuant to the Colorado River Basin Project Act of September 30, 1968. See 68 FR 56317 (September 30, 2003).
Section 602(a) of the Colorado River Basin Project Act (codified at 43 U.S.C. 1552(a)), requires that the Secretary of the Interior make an annual determination of the quantity of water considered necessary to be in storage in Upper Basin reservoirs to provide protection to the Upper Division States of Colorado, New Mexico, Utah, and Wyoming against drought in the Colorado River Basin. This quantity of water is commonly referred to as “602(a) storage.” In years when projected storage in Upper Basin reservoirs is greater than 602(a) storage, and Lake Powell storage is greater than storage at Lake Mead, storage equalization releases are made. Such storage equalization releases are made to maintain, as nearly as practicable, the active storage in Lake Mead equal to the active storage in Lake Powell on September 30 of each year. In years when projected storage in the Upper Basin is less than 602(a) storage, such storage equalization releases from Lake Powell are not made and the operating objective is to maintain a release of a minimum of 8.23 million acre-feet as specified in the Long-Range Operating Criteria.
In July 2000, Reclamation issued a draft environmental impact statement (DEIS) on the proposed adoption of specific criteria, applicable for 15 years, under which surplus water conditions would be determined, and accordingly surplus water made available, for use by the Lower Division States of Arizona, California, and Nevada. During the public comment period for the DEIS, the seven Colorado River Basin States submitted information to the Department of the Interior that contained a proposal for interim surplus criteria and a number of other related issues. This information was published in the
During the interim period, 602(a) storage requirements determined in accordance with Article II(1) of the Criteria [Long-Range Operating Criteria] shall utilize a value of not less than 14.85 million acre-feet (elevation 3,630 feet) for Lake Powell (65 FR 48537).
Reclamation did not adopt this aspect of the seven Basin States submission based upon Reclamation's finding that this proposal was outside the scope of the proposed action for adoption of interim surplus guidelines. See 66 FR 7775 (January 25, 2001).
This proposed action would adopt this aspect of the Basin States' recommendation and would limit 602(a) storage equalization releases when the storage level in Lake Powell is projected to be below 14.85 million acre-feet (elevation 3,630 feet) on September 30 as an added consideration (guideline) in the annual 602(a) storage determination through the year 2016. Under this guideline, water year releases from Lake Powell would be limited to the minimum objective release of 8.23 million acre-feet when Lake Powell is projected to be below 14.85 million acre-feet (elevation 3,630 feet) on September 30. The proposed guideline would remain in effect through calendar year 2016.
A final environmental assessment (EA), “Adoption of an Interim 602(a) Storage Guideline” (March 2004), has been prepared by Reclamation. In this final EA, the effects of the proposed action (referred to as the Proposed Action Alternative) are analyzed.
Reclamation's analysis indicates that there will be limited impacts resulting from adoption of the proposed guideline. Computer simulation modeling of the Colorado River concludes that there is an 88 percent probability that the proposed guideline will not result in any change to the operation of the Colorado River reservoirs. Under some possible future runoff scenarios, there could be some change to storage equalization releases made from Lake Powell under the proposed guideline. Modeling results showed that there is a 12 percent probability that the proposed guideline would modify storage equalization releases from Lake Powell to Lake Mead to some degree. Within this 12 percent probability range, effects were generally minimal. Modeling results indicate that the total volume of water released from Lake Powell through 2016 will be unaffected by adoption of the proposed guideline. The proposed guideline resulted in no long-term effects and there were no effects observed beyond the year 2016.
1. Lake Powell—There is a 12 percent probability that there could be a temporary increase in the water surface elevation of Lake Powell of 0.01 to 6.4 feet, an increase of up to 407,000 acre-feet of storage (an increase of 2.8 percent).
2. Lake Mead—There is a 12 percent probability that there could be a temporary decrease in water surface elevation of 0.01 to 4.1 feet, a decrease of up to 413,000 acre-feet of storage (a decrease of 2.9 percent).
3. River Flows—Changes to river flows below Lake Powell, if they occur, are projected to be minor. Releases from Lake Powell, Lake Mead, and reservoirs below Lake Mead are projected to
4. Water Supply—There are no anticipated effects on water supply to the Upper Division States of Colorado, New Mexico, Utah, and Wyoming. There is a very small probability (about 1 percent) that the proposed guideline could reduce surplus deliveries to the Lower Division States of Arizona, California, and Nevada in a single year through the year 2016. Computer model studies showed that the proposed guideline would not increase the frequency or magnitude of future water shortages to the Lower Division States.
5. Water Deliveries to Mexico—The proposed guideline is not anticipated to result in any change to the delivery of water to Mexico pursuant to the 1944 United States-Mexico Water Treaty.
6. Water Quality—There could be some minor increases in salinity in Lake Mead.
7. Aquatic Resources—There would be no measurable changes to aquatic resources in the area of potential effects.
8. Special Status Species—There would be no effect to special status species caused by the proposed guideline.
9. Recreation—There are no projected adverse impacts to recreation at Lake Powell, Lake Mohave, or Lake Havasu. There would be no anticipated impacts to Colorado River recreation. The proposed guideline could result in some short-term impacts to recreation resources at Lake Mead related to item 2 above.
10. Hydropower—Changes to hydropower production at Glen Canyon Dam and Hoover Dam are projected to be less than 0.01 percent. There could be some minor incremental increases to pumping costs for the Southern Nevada Water Authority which draws water from Lake Mead.
11. Air Quality—There are no projected impacts to air quality.
12. Visual Resources—There are no projected impacts to visual resources.
13. Cultural Resources—There will be no effect to cultural resources as a result of this undertaking. Reclamation is in the process of compiling data regarding the location of cultural resources (and historic properties) within the area of potential effects of the proposed guideline and the Colorado River Interim Surplus Guideline.
14. Indian Trust Assets—There would be no effect to Indian Trust Assets. The proposed guideline does not allocate additional Colorado River water. There would be no effect on existing or additional tribal water rights and/or tribal allocations.
15. Environmental Justice—There are no environmental justice implications from the proposed guideline.
Based on the analysis of the environmental impacts as described in the final EA and on thorough review of public comments received, Reclamation has determined that implementing the proposed guideline will not have a significant impact on the quality of the human environment or the natural resources of the area.
Reclamation hereby adopts the following interim 602(a) Storage Guideline:
1. Through the year 2016, 602(a) storage requirements determined in accordance with Article II(1) of the Long-Range Operating Criteria shall utilize a value of not less than 14.85 million acre-feet (elevation 3,630 feet) for Lake Powell. Accordingly, when projected September 30 Lake Powell storage is less than 14.85 million acre-feet (elevation 3,630 feet), the objective will be to maintain a minimum annual release of water from Lake Powell of 8.23 million acre-feet, consistent with Article II(2) of the Long-Range Operating Criteria.
2. Under the current area-capacity relationship at Lake Powell, a water surface elevation of 3,630 feet corresponds to 14.85 million acre-feet of storage. In the event that a sediment survey is performed at Lake Powell and a revised area-capacity relationship is determined before the year 2016, the revised water storage volume that correlates with the water surface elevation of 3,630 feet at Lake Powell shall be used in Section V(1) of this Interim 602(a) Storage Guideline.
3. The Interim 602(a) Storage Guideline shall be utilized in the operation of the Colorado River in years 2005 through 2016. This guideline will first be implemented in the development of the 2005 Colorado River Annual Operating Plan (AOP) and for all subsequent AOPs through the year 2016.
United States International Trade Commission.
Scheduling of an expedited five-year review concerning the antidumping duty order on barium chloride from China.
The Commission hereby gives notice of the scheduling of an expedited review pursuant to section 751(c)(3) of the Tariff Act of 1930 (19 U.S.C. 1675(c)(3)) (the Act) to determine whether revocation of the antidumping duty order on barium chloride from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
May 7, 2004.
Fred Fischer (202-205-3179 or
In accordance with sections 201.16(c) and 207.3 of the rules, each document filed by a party to the review must be served on all other parties to the review (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
This review is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.62 of the Commission's rules.
By order of the Commission.
On the basis of the record
Pursuant to § 207.18 of the Commission's rules, the Commission also gives notice of the commencement of the final phase of its investigations. The Commission will issue a final phase notice of scheduling, which will be published in the
On March 24, 2004, a petition was filed with the Commission and Commerce by the U.S. PET Resin Producers' Coalition, Washington, DC, alleging that an industry in the United States is materially injured or threatened with material injury by reason of subsidized and LTFV imports of PET resin from India, Indonesia, Taiwan, and Thailand. Accordingly, effective March 24, 2004, the Commission instituted countervailing duty and antidumping investigations Nos. 701-TA-439-440 and 731-TA-1077-1080 (Preliminary).
Notice of the institution of the Commission's investigations and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission transmitted its determinations in these investigations to the Secretary of Commerce on May 10, 2004. The views of the Commission are contained in USITC Publication 3694 (May 2004), entitled
By order of the Commission.
United States International Trade Commission.
Scheduling of an expedited five-year review concerning the antidumping duty order on sorbitol from France.
The Commission hereby gives notice of the scheduling of an expedited review pursuant to section 751(c)(3) of the Tariff Act of 1930 (19 U.S.C. 1675(c)(3)) (the Act) to determine whether revocation of the antidumping duty order on sorbitol from France would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
May 7, 2004.
Fred Fischer (202-205-3179 or
In accordance with sections 201.16(c) and 207.3 of the rules, each document filed by a party to the review must be served on all other parties to the review (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
This review is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.62 of the Commission's rules.
By order of the Commission.
In accordance with Departmental policy, 28 CFR 50.7, notice is hereby given that a proposed consent decree in
The Department of Justice will receive, for a period of thirty (30) days from the date of this publication, comments relating to the proposed consent decree. Comments should be addressed to the Assistant Attorney General for the Environment and Natural Resources Division, Department of Justice, Washington, DC 20530, and should refer to
The proposed consent decree may be examined at the office of the United States Attorney, 601 Union Street, Seattle, WA 98101. During the public comment period, the Consent Decree may be examined on the following Department of Justice Web site:
The National Endowment for the Humanities, The National Foundation on the Arts and the Humanities.
Notice of meetings.
Pursuant to the provisions of the Federal Advisory Committee Act (Pub. L. 92-463, as amended), notice is hereby given that the following meetings of the Humanities Panel will be held at the Old Post Office, 1100 Pennsylvania Avenue, NW., Washington, DC 20506.
Daniel Schneider, Advisory Committee Management Officer, National Endowment for the Humanities, Washington, DC 20506; telephone (202) 606-8322. Hearing-impaired individuals are advised that information on this matter may be obtained by contacting the Endowment's TDD terminal on (202) 606-8282.
The proposed meetings are for the purpose of panel review, discussion, evaluation and recommendation on applications for financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including discussion of information given in confidence to the agency by the grant applicants. Because the proposed meetings will consider information that is likely to disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential and/or information of a personal nature the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, pursuant to authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee meetings, dated July 19, 1993, I have determined that these meetings will be closed to the public pursuant to subsections (c)(4), and (6) of section 552b of Title 5, United States Code.
U.S. Nuclear Regulatory Commission (NRC).
Notice of the OMB review of information collection and solicitation of public comment.
The NRC has recently submitted to OMB for review the following proposal for the collection of information under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
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A copy of the final supporting statement may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. OMB clearance requests are available at the NRC World Wide Web site:
Comments and questions should be directed to the OMB reviewer listed below by June 18, 2004. Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given to comments received after this date.
OMB Desk Officer, Office of Information and Regulatory Affairs (3150-0047), NEOB-10202, Office of Management and Budget, Washington, DC 20503.
Comments can also be submitted by telephone at (202) 395-3087.
The NRC Clearance Officer is Brenda Jo. Shelton, 301-415-7233.
For the Nuclear Regulatory Commission.
The U.S. Nuclear Regulatory Commission (NRC) is considering withdrawal of an exemption from title 10 of the Code of Federal Regulations (10 CFR) part 50, Appendix R, subsection III.L.1 for Facility Operating License No. NPF-3, issued to FirstEnergy Nuclear Operating Company (FENOC or the licensee), for operation of the Davis-Besse Nuclear Power Station (DBNPS), located in Ottawa County, Ohio. Therefore, as required by 10 CFR 51.21, the NRC is issuing this environmental assessment and finding of no significant impact.
The proposed action would withdraw an exemption to 10 CFR part 50, Appendix R, subsection III.L.1, regarding the plant's capability to achieve cold shutdown within 72 hours by the alternative shutdown process, independent of offsite power.
The proposed action is in accordance with the licensee's application dated December 17, 2003.
The action is proposed because the licensee has now determined that DBNPS can achieve cold shutdown within 72 hours by the alternative shutdown process independent of offsite power; therefore, the exemption is no longer required.
The NRC has completed its evaluation of the proposed action and concludes that the proposed exemption withdrawal does not involve radioactive wastes, release of radioactive material into the atmosphere, solid radioactive waste, or liquid effluents released to the environment.
The DBNPS systems were evaluated in the Final Environmental Statement (FES) dated October 1975 (NUREG 75/097). The proposed exemption withdrawal will not involve any change in the waste treatment systems described in the FES.
The proposed action will not significantly increase the probability or consequences of accidents, no changes are being made in the types of effluents that may be released offsite, and there is no significant increase in occupational or public radiation exposure. Therefore, there are no significant radiological environmental impacts associated with the proposed action.
With regard to potential nonradiological impacts, the proposed action does not have a potential to affect any historic sites. It does not affect nonradiological plant effluents and has no other environmental impact. Therefore, there are no significant nonradiological environmental impacts associated with the proposed action.
Accordingly, the NRC concludes that there are no significant environmental impacts associated with the proposed action.
As an alternative to the proposed action, the staff considered denial of the proposed action (
The action does not involve the use of any different resource than those previously considered in the DBNPS FES dated October 1975.
On April 16, 2004, the staff consulted with Ohio State official, C. O'Claire of the Ohio Emergency Management Agency, regarding the environmental impact of the proposed action. The State official had no comments.
On the basis of the environmental assessment, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed action.
For further details with respect to the proposed action, see the licensee's letter dated December 17, 2003 (ADAMS ML033600026). Documents may be examined, and/or copied for a fee, at the NRC's Public Document Room (PDR), located at One White Flint North, Public File Area O1-F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible electronically from the Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site,
For the Nuclear Regulatory Commission.
In accordance with the purposes of Sections 29 and 182b. of the Atomic Energy Act (42 U.S.C. 2039, 2232b), the Advisory Committee on Reactor Safeguards (ACRS) will hold a meeting on June 2-4, 2004, 11545 Rockville Pike, Rockville, Maryland. The date of this meeting was previously published in the
Procedures for the conduct of and participation in ACRS meetings were published in the
Further information regarding topics to be discussed, whether the meeting has been canceled or rescheduled, as well as the Chairman's ruling on requests for the opportunity to present oral statements and the time allotted therefore can be obtained by contacting Mr. Sam Duraiswamy, Cognizant ACRS staff (301-415-7364), between 7:30 a.m. and 4:15 p.m., ET.
ACRS meeting agenda, meeting transcripts, and letter reports are available through the NRC Public Document Room at
Videoteleconferencing service is available for observing open sessions of ACRS meetings. Those wishing to use this service for observing ACRS meetings should contact Mr. Theron Brown, ACRS Audio Visual Technician (301-415-8066), between 7:30 a.m. and 3:45 p.m., ET, at least 10 days before the meeting to ensure the availability of this service.Individuals or organizations requesting this service will be responsible for telephone line charges and for providing the equipment and facilities that they use to establish the videoteleconferencing link. The availability of videoteleconferencing services is not guaranteed.
The ACRS Subcommittee on Materials and Metallurgy will hold a meeting on June 1, 2004, Room T-2B3, 11545 Rockville Pike, Rockville, Maryland.
The entire meeting will be open to public attendance.
The agenda for the subject meeting shall be as follows:
The purpose of this meeting is to hear presentations regarding materials degradation issues. The Subcommittee will hear presentations by and hold discussions with representatives of the NRC staff, the EPRI/MRP, NEI and other interested persons regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the full Committee.
Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official, Ms. Maggalean W. Weston (telephone 301/415-3151) five days prior to the meeting, if possible, so that appropriate arrangements can be made. Electronic recordings will be permitted.
Further information regarding this meeting can be obtained by contacting the Designated Federal Official between 8 a.m. and 5:30 p.m. (ET). Persons planning to attend this meeting are urged to contact the above named individual at least two working days prior to the meeting to be advised of any potential changes to the agenda.
The ACRS Subcommittee on Planning and Procedures will hold a meeting on June 1, 2004, Room T-2B1, 11545 Rockville Pike, Rockville, Maryland.
The entire meeting will be open to public attendance, with the exception of a portion that may be closed pursuant to 5 U.S.C. 552b(c) (2) and (6) to discuss organizational and personnel matters that relate solely to the internal personnel rules and practices of the ACRS, and information the release of which would constitute a clearly unwarranted invasion of personal privacy.
The agenda for the subject meeting shall be as follows:
The Subcommittee will discuss proposed ACRS activities and related matters. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the full Committee.
Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official, Mr. Sam Duraiswamy (telephone: 301-415-7364) between 7:30 a.m. and 4:15 p.m. (ET) five days prior to the meeting, if possible, so that appropriate arrangements can be made. Electronic recordings will be permitted only during those portions of the meeting that are open to the public.
Further information regarding this meeting can be obtained by contacting the Designated Federal Official between 7:30 a.m. and 4:15 p.m. (ET). Persons planning to attend this meeting are urged to contact the above named individual at least two working days prior to the meeting to be advised of any potential changes in the agenda.
Postal Rate Commission.
Notice of commission visit.
Postal Rate Commissioners and staff members will tour printing and distribution facilities located in the vicinity of Martinsburg, West Virginia on May 20 and 21, 2004. The purpose is to familiarize attendees with various postal-related operations, including those related to parcel handling.
May 20, 2004 (afternoon): Quad/Graphics Parcel Direct presentation/facility tour. May 21, 2004 (morning): 1. Quad/Graphics commercial printing plant tour. 2. Norm Thompson Outfitters presentation/facility tour.
Stephen L. Sharfman, General Counsel, 202-789-6818.
Pursuant to section 11A of the Securities Exchange Act of 1934 (the “Act”)
A P/A Order is an order for the principal account of a market maker that is authorized to represent customer orders, reflecting the terms of a related unexecuted customer order for which the market maker is acting as agent.
Currently, the Linkage Plan provides a market maker with two ways to handle P/A Orders that are larger than the FCQS. First, the market maker may send a P/A Order larger than the FCQS representing the entire customer order for manual processing at the receiving Participant. Second, the market maker may send an initial P/A Order for up to the FCQS. If the market maker then seeks to send another P/A Order, it must send an order for the lesser of the entire remaining size of the underlying customer order or 100 contracts.
The proposed Amendment addresses the handling of P/A orders if the market maker chooses the second alternative, the sending of multiple P/A Orders. As currently drafted, the Linkage Plan does not recognize the possibility that a Participant's disseminated quotation may be for less than either the remaining size of the customer order or 100 contracts. Thus, the proposed Amendment specifies that a market maker sending a second P/A Order may limit such order to the lesser of: the remaining size of the customer order; 100 contracts; or the size of the receiving Participant's disseminated quotation.
In addition, the Participants believe that there is a practical issue if multiple exchanges are displaying the same bid or offer. In that case, the Linkage Plan is unclear as to whether a market maker must send the entire order to one Participant or can send orders to multiple Participants, as long as they are for the size of the entire order, or 100 contracts, in the aggregate. The Amendment proposes to clarify the Linkage Plan to specify that a market maker may send P/A Orders to multiple exchanges, as long as all such orders, in the aggregate, are for the lesser of the entire remaining size of the customer order or 100 contracts. However, a market maker may limit the size of any single additional order to the size of the receiving market's disseminated quotation.
Finally, the proposed Amendment modifies the provisions of the Linkage Plan relating to the time period within which a receiving Participant must inform the sending Participant of the amount of the order executed and the amount, if any, that was canceled, and the time period for which a sending Participant must wait while the receiving Participant continues to disseminate the same price at the national best bid or offer before sending a second P/A Order. Currently, the applicable time period for each such circumstance is 15 seconds. The proposed Amendment would permit the Options Linkage Authority to determine different applicable time periods for both circumstances, subject to approval by the Commission.
The Participants intend to make the proposed amendment to the Linkage Plan reflected in this filing effective when the Commission approves the amendment.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed amendment to the Linkage Plan is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to Joint Amendment No. 10 to File Number 4-429. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 11A of the Securities Exchange Act of 1934 (“Act”)
The purpose of proposed Joint Amendment No. 11 is to change the manner in which the Participants process Satisfaction Orders following a Trade-Through. Pursuant to the Linkage Plan, if a disseminated quote that is traded through represents a customer order, a member representing that order may send a Satisfaction Order.
First, the Linkage Plan currently permits a Participant to send a Satisfaction Order for the full size of the customer order traded through, regardless of the size of the transaction that caused the Trade-Through (although the Participant receiving the Satisfaction Order that elects to execute it must limit its execution to the size of the Trade-Through).
Second, the Plan currently permits a Participant that sends a Satisfaction Order through Linkage to reject the receiving Participant's execution of the Satisfaction Order (a “fill”) within 30 seconds of being notified of the fill if the customer order that underlies the Satisfaction Order either has been executed on the sending exchange or has been canceled while the Satisfaction Order is being processed.
Third, as noted above, a Participant can reject a Satisfaction Order fill if the underlying customer order is executed or cancelled while the Satisfaction Order is pending. However, it is possible that the member that initiated the Satisfaction Order could decide to trade against the customer order before the member receives a notice from another Participant that the Satisfaction Order has been filled. In this case, the Participants believe that it would be inappropriate to reject the fill. Accordingly, the proposed amendment would provide that a Participant may not reject the fill of the Satisfaction Order when the underlying customer order has been executed against the member that initiated the Satisfaction Order.
The Participants propose to make the amendment to the Linkage Plan reflected in this filing effective when the Commission approves the amendment.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Joint Amendment No. 11 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to Joint Amendment No. 11 to File Number 4-429. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
All submissions should refer to Joint Amendment No. 11 to File Number 4-429 and should be submitted on or before June 9, 2004.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 11A of the Securities Exchange Act of 1934 (“Act”)
The Participants are proposing to extend for an additional seven months, until January 31, 2005, the pilot provision in the Linkage Plan
The Participants originally proposed a 10-contract limitation on liability during the last seven minutes of the trading day as a one-year pilot in Joint Amendment No. 4 to the Plan.
In the order approving Joint Amendment No. 4, Commission stated that in the event the Participants chose to seek permanent approval of this limitation, the Participants must provide the Commission with a report regarding data on the use of the exemption no later than 60 days before seeking permanent approval (the “Report”).
Following the extension of the pilot program, certain Participants provided the Commission with portions of the information required in the Report, but were unable to provide sufficient information to enable the Commission to evaluate whether permanent approval would be appropriate. Extending the pilot through January 31, 2005 would allow the limitation to continue in
The Participants propose to make the proposed amendment to the Linkage Plan reflected in this filing effective on July 1, 2004.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed Joint Amendment No. 12 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to Joint Amendment No. 12 to File Number 4-429. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
All submissions should refer to Joint Amendment 12 to File Number 4-429 and should be submitted on or before June 9, 2004.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
May 13, 2004.
On October 15, 2003, the Public Company Accounting Oversight Board (the “Board” or the “PCAOB”) filed a Form 19b-4 with the Securities and Exchange Commission (the “Commission”) pursuant to Sections 102 and 107 of the Sarbanes-Oxley Act of 2002 (the “Act”), consisting of a proposed rule and application form completion instructions governing withdrawal from registration (collectively the “proposed rule”). Notice of the proposed rule was published in the
The Act established the PCAOB to oversee the audits of public companies and related matters, to protect investors, and to further the public interest in the preparation of informative, accurate and independent audit reports. The PCAOB is to accomplish these goals through registration, standard setting, inspections, and disciplinary programs.
In furtherance of the registration requirement in Section 102 of the Act, the PCAOB adopted registration rules on April 23, 2003. The Commission approved those rules on August 1, 2003, following a public comment period. The registration rules do not address the process by which a registered public accounting firm may cancel, rescind or withdraw its registration with the PCAOB. Accordingly, the Board published a proposed registration withdrawal rule and related withdrawal application form completion instructions for public comment on July 28, 2003 (PCAOB Release No. 2003-014). The PCAOB revised the proposed rule in response to three letters it received during the comment period. The PCAOB adopted the proposed rule, as revised, and concurrently authorized submission of the proposed rule to the Commission for approval. The proposed rule was filed with the Commission pursuant to the requirements of Section 107(b) of the Act and Section 19(b) of the Securities Exchange Act of 1934 (the “Exchange Act”).
The PCAOB has proposed a rule and instructions for completion of an application form (Form 1-WD) to govern the process by which public accounting firms may request leave to withdraw from registration. Under the proposed rule, a registered firm may seek to withdraw at any time by filing Form 1-WD. However, withdrawal from registration is not automatic. The PCAOB may order that withdrawal be delayed while the Board conducts a related inspection, investigation, or disciplinary proceeding. The PCAOB may delay a requested withdrawal for up to 18 months, and, under the rule, that period shall automatically be extended to cover any period necessary to complete a disciplinary proceeding initiated prior to the expiration of the 18-month period.
The proposed rule also provides that, if the PCAOB determines within three years of granting a request for withdrawal that the withdrawal application form contained a material misstatement or omission, the Board may void the withdrawal retroactively. The PCAOB wants to provide a basis for inspecting, investigating and potentially disciplining a registered firm that made a false or misleading statement in its withdrawal application. Because the PCAOB's regulatory authority is greatest over entities registered with the Board, the proposed rule provides that the registration of a suspect firm shall be reinstated, effective from the date of the deemed withdrawal.
While a request for leave to withdraw is pending, the applicant may not
The American Institute of Certified Public Accountants (the “AICPA”) submitted to the Commission a comment letter dated April 29, 2004. The comment letter contains a restatement of the points made by the AICPA in a letter dated August 18, 2003 on the proposed rule released by the PCAOB for public comment on July 28, 2003. The PCAOB gave careful consideration to the comments received from the AICPA and two other commenters in the course of revising the proposed rule prior to its adoption by the Board.
On the basis of the foregoing, the Commission finds that the proposed rule is consistent with the requirements of the Act and the securities laws and is necessary and appropriate in the public interest and for the protection of investors.
By the Commission.
On October 1, 2003, the Chicago Board Options Exchange, Inc. (“CBOE” or “Exchange”), filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The CBOE proposes to amend CBOE Rule 6.8, Interpretation and Policy .01, to allow broker-dealer orders that are eligible for execution on CBOE's Retail Automatic Execution System (“RAES”) to execute automatically against limit orders on the CBOE book in classes designated by the appropriate Floor Procedure Committee. The proposed rule change would permit broker-dealer orders to execute automatically against customer limit orders on the book provided that such customer orders are at the national best bid or offer (“NBBO”). However, the proposed rule change provides that proprietary orders of an Order Entry Firm or its affiliates, or orders solicited by the Order Entry Firm from members or non members (collectively, “Order Entry Firm Orders”), may not automatically execute against a customer limit order on the limit order book that was placed on the book by the Order Entry Firm unless the customer order has been exposed on the book for at least thirty seconds. Finally, the proposed rule change specifies that it shall be a violation of the proposed rule for any Exchange member or member organization to be a party to any arrangement designed to circumvent the proposed rule by allowing a customer, member, member organization or non-member broker-dealer to execute immediately against agency orders delivered to the Exchange whether such orders are delivered via the CBOE ORS system or represented in the trading crowd.
The Commission finds that the proposed rule change, as amended by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange
The Commission anticipates that the ability for broker-dealer orders on RAES to execute against customer limit orders on the book should help to provide faster execution of both eligible broker-dealer orders and eligible customer limit orders, while reducing the burden on the Exchange's members to manually execute these orders. The Commission believes that the proposal should benefit customers using the RAES system, as well as customers whose orders are residing in the Exchange's customer limit order book. Moreover, the Commission finds that the proposed rule change that requires a customer limit order to be exposed on the book for 30 seconds before an Order Entry Firm Order can execute against it addresses the concern that Order Entry Firms could use this proposed rule change to internalize or cross orders. The Commission notes that CBOE represented that it has developed a surveillance procedure to enforce compliance with this provision by its members.
The Commission finds good cause for approving Amendment No. 1 prior to the thirtieth day after the date of publication of notice of filing thereof in the
Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 1 to the proposed rule change, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-CBOE-2003-42. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”),
CBOE proposes to amend CBOE Rules 8.84 and 8.95 to grant to the MTS Committee, and not the Allocation Committee, the authority to approve the relocation of an entire trading station's securities to another trading station that is operated by the same DPM organization. The text of the proposed rule change follows. Additions are in
(a) The MTS Committee may establish (i) restrictions applicable to all DPMs on the concentration of securities allocable to a single DPM and to affiliated DPMs and (ii) minimum eligibility standards applicable to all DPMs which must be satisfied in order for a DPM to receive allocations of securities, including but not limited to standards relating to adequacy of capital and number of personnel.
(b) The MTS Committee has the authority under other Exchange rules to
(a) The Allocation Committee shall be responsible for determining for each equity option class traded on the Exchange: (i) whether the option class should be allocated to a trading crowd or to a DPM and (ii) which trading crowd or DPM should be allocated the option class. The Allocation Committee shall also be responsible for determining the location on the Exchange's trading floor of each trading crowd, each DPM, and each security traded on the Exchange. The Special Product Assignment Committee shall be responsible for determining for each security traded on the Exchange other than an equity option (i) whether the security should be allocated to a trading crowd or to a DPM and (ii) which trading crowd or DPM should be allocated the security.
(b)-(g) no change.
In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
CBOE Rule 8.95(a) currently provides that the Exchange's Allocation Committee is responsible for determining the location on the Exchange's trading floor of each trading crowd, each DPM, and each security traded on the Exchange. Moreover, Paragraph (c) of Rule 8.95 provides that any decision made by the Allocation Committee (or the Special Product Assignment Committee) may be changed if the committee concludes that a change is in the best interest of the Exchange based on operational factors or efficiency. Paragraph (d) of Rule 8.95 describes the process the Allocation Committee follows prior to taking any action under Rule 8.95(c), including giving notice to the DPM and trading crowd affected by the proposed committee action, and giving the DPM and the trading crowd an opportunity to appear before the committee or submit a written statement to the committee.
Recently, some DPM organizations, which operate as a DPM at more than one trading station on the Exchange's trading floor, have requested to relocate all of the securities traded at a particular trading station operated by that DPM organization to another trading station operated by the same DPM (sometimes referred to as consolidations of DPM trading stations). Pursuant to CBOE Rule 8.95, CBOE's Allocation Committee has considered these requests.
However, because these requests may impact the operational performance and market performance of the DPM organization, the Exchange believes that it would be appropriate for the MTS Committee to consider these types of requests.
Proposed Interpretation .01 to CBOE Rule 8.84 also states that in making a determination pursuant to the Interpretation, the MTS Committee
Similar to paragraph (d) of CBOE Rule 8.95, the proposed new Interpretation .01 to CBOE Rule 8.84 also includes a provision requiring the MTS Committee to notify the DPM organization and trading crowds affected by the relocation of the securities of the action the MTS Committee is considering taking, and shall convene one or more informal meetings of the Committee with the DPM and the trading crowds to discuss the matter, or shall provide the DPM and the trading crowds with the opportunity to submit a written statement to the Committee.
This proposed change maintains the authority of the Allocation Committee (under CBOE Rules 8.95(a) and (c)) to determine whether or not to relocate less than all of the securities at a particular trading station to another trading station that is operated by the same DPM organization.
Finally, CBOE notes that (i) nothing in this proposal is intended to amend CBOE's rules which allow for limited side-by-side trading and integrated market making (CBOE Rule 30.18), and (ii) to the extent any person is aggrieved in an economic sense by any decision made by the MTS Committee, such person may seek to have the decision reviewed under Chapter XIX of the Exchange's Rules.
The Exchange believes the proposed rule change is consistent with section 6(b) of the Act
The Exchange does not believe that the proposed rule change will impose a burden on competition that is not necessary or appropriate in furtherance of purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
Within 35 days of the date of publication of this notice in the
(A) by order approve such proposed rule change, or,
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic comments:
• Use the Commission's Internet comment form (
• Send an e-mail to
Paper comments:
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-CBOE-2004-05. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is proposing to amend its rules to trade options on the Index. The text of the proposed rule change, as amended, appears below. Additions are
((a)-(m) No change).
.01 The reporting authorities designated by the Exchange in respect of each index underlying an index options contract traded on the Exchange are as provided in the chart below.
(a) Rule 412 generally shall govern position limits for broad-based index options, as modified by this Rule 2004. There may be no position limit for certain Specified (as provided in Rule 2000) broad-based index options contracts. All other broad-based index options contracts shall be subject to a contract limitation fixed by the Exchange, which shall not be larger than the limits provided in the chart below.
((b)-(c) No change).
((a)(1)-(3) no change)
(4) “European-Style Exercise.” The following European-style index options, some of which may be A.M.-settled as provided in paragraph (a)(5), are approved for trading on the Exchange:
(i) S&P SmallCap 600 Index[.]
(ii) Morgan Stanley Technology Index
(5) A.M.-Settled Index Options. The last day of trading for A.M.-settled index options shall be the business day preceding the last day of trading in the underlying securities prior to expiration. The current index value at the expiration of an A.M.-settled index option shall be determined, for all purposes under these Rules and the Rules of the Clearing Corporation, on the last day of trading in the underlying securities prior to expiration, by reference to the reported level of such index as derived from first reported sale (opening) prices of the underlying securities on such day, except that:
(i) In the event that the primary market for an underlying security does not open for trading on that day, the price of that security shall be determined, for the purposes of calculating the current index value at expiration, as set forth in Rule 2008(g), unless the current index value at expiration is fixed in accordance with
(ii) In the event that the primary market for an underlying security is open for trading on that day, but that particular security does not open for trading on that day, the price of that security, for the purposes of calculating the current index value at expiration, shall be the last reported sale price of the security.
The following A.M.-settled index options are approved for trading on the Exchange:
(i) S&P SmallCap 600 Index
(ii) Morgan Stanley Technology Index
(b) Long-Term Index Options Series.
((1)(i) and (ii) no change)
(2) Reduced Value Long Term Options Series.
(i) Reduced-value long term options series on the following stock indices are approved for trading on the Exchange:
(A) S&P SmallCap 600 Index
(B) Morgan Stanley Technology Index
(C)
(ii) Expiration Months. Reduced-value long term options series may expire at six-month intervals. When a new expiration month is listed, series may be near or bracketing the current index value. Additional series may be added when the value of the underlying index increases or decreases by ten (10) to fifteen (15) percent.
(c) Procedures for Adding and Deleting Strike Prices. The procedures for adding and deleting strike prices for index options are provided in Rule 504, as amended by the following:
(1) The interval between strike prices will be no less than $5.00; provided, that in the case of the following classes of index options, the interval between strike prices will be no less than $2.50:
(i) S&P SmallCap 600, if the strike price is less than $200.00[.]
(ii) Morgan Stanley Technology Index, if the strike price is less than $200.00
(iii)
((c)(2)-(e) no change)
In its filing with the Commission, the ISE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change, as amended. The text of these statements may be examined at the places specified in Item III below. The ISE has prepared summaries, set forth in Sections A, B and C below, of the most significant aspects of such statements.
The ISE proposes to amend its rules to provide for the listing and trading on the Exchange of cash-settled, European-style index options and LEAPS, including reduced value LEAPS, on the S&P MidCap 400. Options on the Index are currently trading on the American Stock Exchange LLC (“Amex”).
As of January 6, 2004, 286 companies in the Index are listed on the New York Stock Exchange, Inc. (“NYSE”), 112 on the National Association of Securities Dealers, Inc. (“NASD”), Automated Quotation System (“Nasdaq”), and 2 on the Amex. All Nasdaq stocks in the Index are designated as national market system securities by the NASD, meaning, among other things, that real-time last sale reports are available for these stocks. As of January 6, 2004, no one stock comprises more than 1.23% of the Index's total value, and the percentage weighting of the 5 largest components in the Index accounts for only 4.66% of the Index's value. Additionally, 344 (86%) of the 400 stocks included in the Index, representing 88.1% of the total weight of the Index, are the subject of standardized options trading, and many of the other Index component stocks are eligible for options trading (as of January 6, 2004).
As of January 6, 2004, the market capitalization of the stocks in the Index ranged from a high of $11.8 billion to a low of $336.2 million, with the mean and median being $2.4 billion and $2.1 billion, respectively. The total number of shares outstanding for the stocks in the Index ranges from a high of 471.4 million shares to a low of 9.5 million shares. The price per share of the stocks in the Index ranges from a high of $796.51 to a low of $3.55. Finally, the trading volume of the stocks in the Index ranges from a high of 11,489,282 average shares per day to a low of 7,605 average shares per day, with the median and mean being 437,107 and 724,445, respectively.
For the six-month period ending January 6, 2004, 398 of the 400 (99.5%) companies within the Index had an average daily trading volume greater than 30,000 shares per day. Those companies represent 99.25% of the market capitalization of the Index. The average daily trading volume of the 20 most heavily traded companies in the Index, representing 7.51% of the market capitalization of the Index, was 3,784,032 shares per day.
The Index value for purposes of settling S&P MidCap 400 options (“Settlement Value”) is calculated on the basis of opening market prices on the business day prior to the expiration date of such options (“Settlement Day”).
In order to ensure that the S&P MidCap 400 contains a representative sample of the stocks that represent the performance of the middle-capitalization segment of the market, S&P selects component securities based on the following market and economic criteria.
In addition, S&P considers industry group representation in selecting stocks for the S&P MidCap 400. Moreover, in order to avoid “overweighting” of utility and financial stocks, electric utilities and regional bank stocks are selected on the basis of their geographic representation as well as the above criteria.
The Exchange shall notify the Market Regulation Division of the Commission immediately in the event S&P determines to cease maintaining or calculating the Index. In the event the Index ceases to be maintained or calculated, the Exchange may determine not to list any additional series for trading or limit all transactions in such options to closing transactions only for the purpose of maintaining a fair and orderly market and protecting investors.
The minimum customer margin for uncovered writers shall be 100% of the market value of the option plus 15% of the aggregate Index value less any out-of-the-money amount, subject to a minimum of 100% of the market value of the option plus 10% of the aggregate Index value.
The Exchange proposes to use strike price intervals of 2
The Exchange states that it has the necessary systems capacity to support new series that will result from the introduction of S&P MidCap 400 Index options. ISE has also been informed that the Options Price Reporting Authority believes that it has the capacity to support such new series.
The ISE believes that the proposed rule change, as amended, is consistent with and furthers the objectives of section 6(b)(5) of the Act,
The ISE does not believe that the proposed rule change, as amended, will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change, as amended.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-ISE-2004-08. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and, in particular, the requirements of section 6(b)(5).
The trading of MidCap 400 options, however, raises several issues, namely, issues related to index classification, index design, surveillance, and market impact. The Commission believes, for the reasons discussed below, that the ISE has adequately addressed these issues.
The Commission finds that classifying the Index as broad-based, and, thus,
The broad diversification, large capitalization, and liquid markets of the Index's component stocks significantly minimizes the potential for manipulation of the Index. First, as discussed above, the Index represents a broad cross-section of domestic mid-level capitalized stocks, with no single industry group or stock dominating the Index. Second, the overwhelming majority of the stocks that comprise the Index are actively traded, with a mean and median average daily trading volume of 437,107 and 724,445 shares, respectively.
Third, S&P has developed procedures and criteria designed to ensure that the Index maintains its broad representative sample of stocks in the middle-capitalization range of securities.
The Exchange represents that it has an adequate surveillance program in place for the Exchange's other index options (at present, options on the S&P SmallCap 600 Index) and intends to apply those same program procedures to the options on the Index. Additionally, the Exchange is a member of the Intermarket Survelliance Group (“ISG”), which allows for the sharing of surveillance information for potential intermarket trading abuses pursuant to the Intermarket Surveillance Group Agreement (the “Agreement”).
The Commission believes that the listing and trading of MidCap 400 options, including LEAPS and reduced-value LEAPS, on the Exchange will not adversely impact the underlying securities markets. First, as described above, the Index is broad-based and no one stock or industry group dominates the Index. Second, as noted above, the stocks contained in the Index have large capitalizations and are actively traded. Third, existing ISE stock index options rules and surveillance procedures will apply to MidCap 400 options. Fourth, the Exchange has established position and exercise limits for the MidCap 400 options that will serve to minimize potential manipulation and market impact concerns. Fifth, the risk to investors of contra-party non-performance will be minimized because the Index options and Index LEAPS will be issued and guaranteed by the Options Clearing Corporation just like other standardized options traded in the United States.
Finally, the Commission believes that the ISE's other proposed rule changes to accommodate the trading of S&P MidCap 400 options, such as strike price intervals, are consistent with the Act. Based on representations from the ISE, the Commission also believes that the Exchange will have sufficient capacity to accommodate the anticipated order flow. The Commission also believes the Amex's proposed expiration cycle for the S&P MidCap 400 options is reasonable because it provides investors sufficient flexibility to establish their desired options positions.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
NASD Dispute Resolution is proposing a new rule of the NASD to permit parties in an arbitration to communicate directly with the arbitrators if all parties and arbitrators agree, and to establish guidelines for such direct communication. Below is the text of the proposed rule change. Proposed new language is in italics.
In its filing with the Commission, NASD Dispute Resolution included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASD Dispute Resolution has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
NASD proposes a rule that would permit direct communication with the arbitrators where all parties and arbitrators agree. The rule also would establish guidelines for direct communication.
In response to a recommendation of the NASD National Arbitration and Mediation Committee, the Chicago Office of NASD Dispute Resolution began a pilot project in June 2001 to determine whether direct communication between parties and arbitrators would enhance the arbitration process. The Chicago Office developed the parameters governing whether a case would be eligible for inclusion in the pilot and changed the script used by the panel chairperson at the Initial Prehearing Conference (“IPHC”) on those cases. A modified IPHC Order also was given to the panel chairperson to memorialize all direct communication matters agreed to by the parties and the arbitrators.
In total, 839 cases were eligible for inclusion in the project. Of these cases, parties and arbitrators in 255 cases (30%) participated in the program. At the end of the one-year pilot period, staff formulated a survey for those arbitrators and party representatives who participated in the pilot project. NASD Dispute Resolution sent out 850 surveys and obtained 268 responses (32%). Although attempts were made to limit duplication, certain arbitrators and party representatives who participated in more than one eligible case in the pilot might have sent in multiple survey responses.
Of the responses NASD received, 193 came from arbitrators and 75 from party representatives. Overall, 73% of party representatives and 69% of the arbitrators who responded to the survey favored continuing direct communication with the arbitrators. Favorable comments reflected the opinion that direct communication expedited the arbitration process and was more convenient than the normal method of communicating through staff.
In light of the success of the Chicago pilot, NASD has developed a nationwide rule that would permit direct communication with the arbitrators where all parties and arbitrators agree. The rule also would establish guidelines for direct communication.
On October 2, 2002, the Securities Industry Conference on Arbitration (“SICA”)
The proposed rule provides that either an arbitrator or a party may rescind his or her agreement at any time if direct communication is no longer working well. Materials must be sent at the same time and in the same manner to all parties and the Director (through the assigned staff member), and staff must receive copies of any orders and decisions made as a result of direct communications among the parties and the arbitrators. As requested by staff of NASD Dispute Resolution, however, the rule contains a provision stating that materials more than 15 pages long shall be sent to the Director only by mail or courier, to avoid tying up busy fax machines and printers. Arbitrators (or parties) with similar concerns could include a similar provision as to themselves in the direct communication order. NASD will prepare a template for direct communication orders to guide the arbitrators and parties in considering these issues.
NASD Dispute Resolution believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
NASD Dispute Resolution does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
Written comments were neither solicited nor received.
Within 35 days of the date of publication of this notice in the
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic comments:
• Use the Commission's Internet comment form (
• Send an e-mail to
Paper comments:
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-NASD-2003-163. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
On February 19, 2004, the New York Stock Exchange, Inc. (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
On April 26, 2004, the Exchange amended the proposed rule change.
This order approves the proposed rule change. Simultaneously, the Commission provides notice of filing of Amendment No. 1 and grants accelerated approval of Amendment No. 1.
The Commission has reviewed carefully the proposed rule change and finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act.
The Commission believes the electronic entry of all market-on-close (“MOC”) and limit-on-close (“LOC”) orders may allow market participants greater control in active trading crowds, and may enhance the dissemination of accurate information to all participants, because publications will be systematically generated. Furthermore, the Commission believes that moving the MOC and LOC deadline from 3:40 p.m. to 3:50 p.m. may allow traders and floor brokers greater control over the execution of customer orders and greater participation in active markets. The Exchange stated that its electronic entry systems for MOC and LOC order processing would require technology upgrades. Accordingly, the Exchange has represented that it will notify the Exchange membership and the Commission of the timing and implementation of such electronic entry systems.
For these reasons, the Commission finds that the proposed rule change is consistent with the Act.
The Commission finds good cause for approving Amendment No. 1 prior to the thirtieth day after the date of publication of notice of filing thereof in the
Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 1, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic comments:
• Use the Commission's Internet comment form (
• Send e-mail to
Paper comments:
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-NYSE-2004-09. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The PCX proposes to amend its rules regarding the Exchange's conditions to membership. Specifically the Exchange proposes to (1) modify rules relating to PCX administered examinations for Floor Brokers and Market Makers; and (2) adopt a rule permitting waiver of the examination requirements by the Membership Committee. The text of the proposed rule change appears below. New text is italicized, and deleted text is in brackets.
Rule 1.7(b) (1-8)—No change.
(9) does not successfully complete [such written proficiency] examinations as required by the Exchange to [enable it to examine and] verify the applicant's qualifications to function in [one or more of the] capacities
(A)
For purposes of this Rule:
(i) The term “trader” means a person who is directly or indirectly compensated by an Exchange member organization and who trades, makes trading decisions with respect to, or otherwise engages in the proprietary or agency trading of securities
(ii) The term “primary business” means greater than 50% of the member organization's business.
(B) Each member organization for which the Exchange is the DEA must complete, on an annual basis, and on a form prescribed by the Exchange, a written attestation as to whether the member organization's primary business is conducted in the performance of the function of a registered specialist, a registered market maker or a registered floor broker (pursuant to Rules 5.27(a), 6.33 or 6.44, respectively).
(C) The requirement to complete the Series 7 Examination will apply to current Traders of member organizations that meet the criteria of subsection (A), above, as well as to future Traders of member organizations that meet the criteria of subsection (A), above, at a later date. Traders of member organizations that meet the criteria of subsection (A), above, at the time of SEC approval of this Rule, must successfully complete the Series 7 Examination within six months of notification by the Exchange.]
Rule 1.7(b)(10-12)—No change.
Rule 1.7
In its filing with the Commission, the PCX included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The PCX has prepared summaries, set forth in sections (A), (B) and (C) below, of the most significant aspects of such statements.
The PCX reviewed its examination requirements for Floor Brokers and Market Makers relative to those of other options exchanges. In doing so, the PCX believes that its current membership testing requirements are more restrictive than the requirements of other exchanges.
Therefore, the Exchange is proposing to amend its Rule 1.7(b) and 1.7(c). The proposed rules will extend the time period when a former member of the PCX or another self-regulatory organization may have taken an examination from two years to five years so long as the applicant has been a member of an Self-Regulatory organization within six months of the application date for Exchange membership.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Written comments on the proposed rule change were neither solicited nor received.
Within 35 days of the date of publication of this notice in the
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic comments:
• Use the Commission's Internet comment form (
• Send e-mail to
Paper comments:
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File Number SR-PCX-2003-51. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Phlx proposes to modify its hours of business for dealings upon the Exchange to change the opening of Canadian dollar foreign currency options (“FCO”) trading from 7 a.m. eastern time (e.t.) to 2:30 a.m. e.t.
In its filing with the Commission, the Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Phlx has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to conform the trading hours of Canadian dollar FCOs to the trading hours of other FCOs.
The Exchange believes that the increased trading hours should allow investors greater access to trading in Canadian dollar FCOs and increased flexibility to meet the exchange rate risk protection and hedging needs of European-based market participants.
The Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) of the Act,
The Phlx does not believe that the proposed rule change, as amended, will impose any inappropriate burden on competition.
No written comments were either solicited or received with respect to the proposed rule change, as amended.
Because the foregoing proposed rule change, as amended, has been designated as a practice with respect to the administration of an existing rule, it has become effective pursuant to Section 19(b)(3)(A)(i) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic comments:
• Use the Commission's Internet comment form (
• Send an e-mail to
Paper comments:
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-Phlx-2004-24. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
On March 1, 2004, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”), filed with the Securities and Exchange Commission (“Commission”) a proposed rule change pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On September 29, 2003, the Commission approved a six-month pilot enhancement to the Exchange's AUTOM system, called Book Sweep.
Book Sweep allows certain orders resting on the limit order book
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and, in particular, the requirements of section 6 of the Act.
The Commission notes that permanent approval of Book Sweep, which has been operating on a pilot basis for over six months, should help facilitate the more efficient execution of orders when Auto-Quote or SQF locks or crosses the Exchange's best bid or offer in a series, as established by an order on the limit order book. The Commission notes that the Exchange's Book Sweep system is similar to systems that the Commission has previously approved for use on other exchanges.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Phlx proposes to amend its schedule of dues, fees and charges to cap the current specialist unit fixed monthly fee (“fixed monthly fee”)
Currently, the Exchange offers specialist units
In its filing with the Commission, the Phlx included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to limit the amount of fixed monthly fees incurred per specialist unit per month. The current fixed monthly fee and the proposed $310,000 monthly fee cap should create an
The Exchange believes that its proposal to amend its schedule of dues, fees and charges is consistent with section 6(b) of the Act
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to section 19(b)(3)(A)(ii) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number SR-Phlx--2004-30. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Federal Aviation Administration (FAA), DOT.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before June 18, 2004. A comment to OMB is most effective if OMB receives it within 30 days of publication.
Judy Street on (202) 267-9895.
1.
2.
Send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention FAA Desk Officer.
Comments are invited on: Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimates of the burden of the proposed information collection; ways to enhance the quality, utility and clarity of the information to be collected; and 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.
Federal Aviation Administration, DOT.
Notice.
By
Barry Brayer, Executive Resource Staff, Western Pacific Region Headquarters, 15000 Aviation Blvd., Hawthorne, CA 90250, telephone: (310) 725-3800, E-mail:
The National Parks Air Tour Management Act of 2000 (the Act) was enacted on April 5, 2000, as Public Law 106-181. The Act required the establishment of the advisory group within 1 year after its enactment. The NPOAG was established in March 2001. The advisory group is comprised of a balanced group of representatives of general aviation, commercial air tour operations, environmental concerns, and Native American tribes. The Administrator and the Director (or their designees) serve as ex officio members of the group. Representatives of the Administrator and Director serve alternating 1-year terms as chairman of the NPOAG ARC.
The NPOAG ARC provides “advice, information, and recommendations to the Administrator and the Director—
(1) On the implementation of this title [the Act] and the amendments made by this title;
(2) on commonly accepted quiet aircraft technology for use in commercial air tour operations over a national park or tribal lands, which will receive preferential treatment in a given air tour management plan;
(3) on other measures that might be taken to accommodate the interests of visitors to national parks; and
(4) at the request of the Administrator and the Director, safety, environmental, and other issues related to commercial air tour operations over a national park or tribal lands.”
To maintain the balanced representation of the group, the FAA and the NPS recently published a notice in the
Federal Aviation Administration, DOT.
Notice of availability and request for public comments.
This notice announces the availability of and requests comments on a proposed revision to Order 8100.9, DAS, DOA, and SFAR 36 Authorization Procedures, implementing a new evaluation program for these organizations. This notice is necessary to give all interested persons an opportunity to present their views on the proposed policy.
Comments must be received on or before June 18, 2004.
Send all comments on the proposed revised Order to: Ralph Meyer, Delegation and Airworthiness Programs Branch, P.O. Box 26460, Oklahoma City, OK 73125. Comments may be faxed to: (405) 954-7072 or e-mailed to:
Ralph Meyer, Aircraft Engineering Division, Airworthiness Programs Branch (AIR-140), P.O. Box 26460, Oklahoma City, OK 73125. Telephone: (405) 954-7072 or FAX: (405) 954-4104.
You are invited to comment on the proposed revised Order by submitting such written data, views, or arguments to the address or FAX number listed above. Your comments should identify “Order 8100.9A.” The Associate Administrator for Regulation and Certification will consider all communications received on or before the closing date before issuing the final Order.
The revision to Order 8100.9 establishes a new evaluation program to evaluate all aspects of an authorization holder's performance. Currently, these organizations are evaluated under both the Aircraft Certification Systems Evaluation Program (ACSEP) and Order 8100.9 Technical Evaluations. When
You may get a copy of the proposed revised Order from the Internet at:
General Motors Corporation (GM), has determined that certain 2004 model year vehicles that it produced do not comply with S5.1 of 49 CFR 571.124, Federal Motor Vehicle Safety Standard (FMVSS) No. 124, “Accelerator control systems.” GM has filed an appropriate report pursuant to 49 CFR part 573, “Defect and Noncompliance Reports.”
Pursuant to 49 U.S.C. 30118(d) and 30120(h), GM has petitioned for an exemption from the notification and remedy requirements of 49 U.S.C. chapter 301 on the basis that this noncompliance is inconsequential to motor vehicle safety.
This notice of receipt of GM's petition is published under 49 U.S.C. 30118 and 30120 and does not represent any agency decision or other exercise of judgment concerning the merits of the petition.
Approximately 19,924 model year 2004 Cadillac SRX, Cadillac XLR, and Pontiac Grand Prix vehicles are affected. S5.1 of FMVSS No. 124 requires that:
There shall be at least two sources of energy capable of returning the throttle to the idle position within the time limit specified by S5.3 . . . . In the event of failure of one source of energy by a single severance or disconnection, the throttle shall return to the idle position within the time limits specified by S5.3 . . . .
In the event of failure of either of the two Electronic Throttle Control (ETC) Pedal return springs, at ambient temperatures of −30°C to −40°C for the Grand Prix and XLR and −10°C to −40°C for the SXR, the engine in some of the subject vehicles may not return to idle within the time limits specified by S5.3.
GM believes that the noncompliance is inconsequential to motor vehicle safety for the following reasons:
Vehicle Controllability: A number of conditions must occur for the noncompliance to occur. A return spring must be severed, the stack-up of tolerances in the ETC Pedal Position Sensor must exist, the vehicle must have soaked at an ambient temperature of −30°C to −40°C for the Grand Prix and XLR and −10°C to −40°C for the SXR, and the customer must drive the vehicle prior to the vehicle interior warming up. In the extremely low likelihood of all of these conditions existing, the condition would occur upon the first application of the throttle pedal. The vehicle would continue to be controllable by steering and braking, and the ETC Pedal assembly would return to normal operation once the passenger compartment warmed up.
Pedal Assembly is Protected: When FMVSS No. 124 was established in 1973, the accelerator control systems of vehicles consisted of a mechanical connection between the accelerator pedal and the engine's carburetor. The throttle return springs required by FMVSS No. 124 were typically part of the carburetor, and subject to the harsh engine environment. The requirements of S5.1 were established to ensure that if one of those springs in that environment were to fail, the engine would return to idle in a timely manner.
The ETC Accelerator Pedal Module in the subject vehicles consists of the accelerator pedal at the end of the accelerator pedal lever. The lever is connected to the ETC Pedal Sensor shaft, and is returned to the idle position by two return springs. The ETC Pedal Sensor provides two redundant signals to the engine control module to indicate accelerator pedal position. The ETC Accelerator Pedal Module is located entirely within the passenger compartment of the vehicle. The return springs are in a protected area under the instrument panel, and are not subject to the harsh environment of the engine compartment.
Condition Requires Failed Return Spring: The condition that is described can only occur if one of the two return springs is severed or disconnected. The springs in the subject Accelerator Pedal Module, however, have extremely high reliability and are not likely to fail in the real world.
Durability Testing: The ETC Accelerator Pedal Module is designed for a service life of at least 100,000 miles or 10 years working life for passenger car application. The Minimum Typical Predicted Usage Profile of the Component Technical Specification states that the Accelerator Pedal mechanism may be subject to 35,000,000 dithers / 70,000,000 sensor direction changes. The GM Test Procedure TP3750, Accelerator Pedal Lab Durability Cycling Test, that is used during the development and validation of this system, subjects these parts to 2 million cycles, an equivalent usage greater than 6 lives for an automatic transmission passenger vehicle and 3 lives for a manual transmission passenger vehicle. There were no accelerator pedal return spring failures after testing multiple samples to 10 million cycles during the durability testing that was performed on the ETC Accelerator Pedal Module for the subject vehicles.
Condition Requires Extreme Temperatures, Pedal Assembly Warms Quickly: The root cause of the condition is an increase in friction that may occur on some ETC Accelerator Pedal Modules due to a stack-up of tolerances, but only when the Module is subjected to extreme ambient temperatures. All tests at temperatures above those extremes resulted in full compliance with the FMVSS No. 124 time limits for all pedal assemblies tested. Therefore, the ambient temperatures required for the possibility of the noncompliance to exist are severe. Even if a vehicle with a disconnected return spring soaked under the necessary harsh conditions for a sufficient time, the potential for the noncompliance to occur would exist for only a short time, because the pedal assembly would warm up quickly with activation of the vehicle heating system.
Warranty Data: GM has reviewed warranty data for these 2004 vehicles, as well as complaint data. GM is unaware of any data suggesting the subject condition is a real world safety issue.
Prior NHTSA Decision: On August 3, 1998, NHTSA granted a petition for decision of inconsequential noncompliance to GM for 1997 Chevrolet Corvettes that failed to meet the requirements of FMVSS No. 124, with respect to the requirement to return to idle in less than 3 seconds at −40°C.
Interested persons are invited to submit written data, views, and arguments on the petition described above. Comments must refer to the docket and notice number cited at the beginning of this notice and be submitted by any of the following methods. Mail: Docket Management Facility, U.S. Department of Transportation, Nassif Building, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590-0001. Hand delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC. It is requested, but not required, that two copies of the comments be provided. The Docket Section is open on weekdays from 10 a.m. to 5 p.m. except Federal holidays. Comments may be submitted electronically by logging onto the Docket Management System Web site at
The petition, supporting materials, and all comments received before the close of business on the closing date indicated below will be filed and will be considered. All comments and supporting materials received after the closing date will also be filed and will be considered to the extent possible. When the petition is granted or denied, notice of the decision will be published in the
Comment closing date: June 18, 2004.
49 U.S.C. 30118, 30120: delegations of authority at CFR 1.50 and 501.8.
Progressive Rail, Incorporated (PGR), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41
PGR certifies that its projected revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier and states that such revenues will not exceed $5 million annually. The transaction was scheduled to be consummated on or about May 3, 2004.
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to STB Finance Docket No. 34496, must be filed with the Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Thomas F. McFarland, P.C., 208 South LaSalle St., Suite 1890, Chicago, IL 60604-1112.
Board decisions and notices are available on our Web site at
By the Board, David M. Konschnik, Director, Office of Proceedings.
The Department of the Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220.
Written comments should be received on or before June 18, 2004, to be assured of consideration.
Recordkeeping—2 hr., 9 min.
Learning about the law or the form—35 min.
Preparing and sending the form to the IRS—39 min.
Recordkeeping—4 hr., 32 min.
Learning about the law or the form—53 min.
Preparing and sending the form to the IRS—1 hr., 0 min.
The Department of the Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220.
Written comments should be received on or before June 18, 2004, to be assured of consideration.
Recordkeeping—3 hr., 49 min.
Learning about the law or the form—18 min.
Preparing, copying, assembling, and sending the form to the IRS—22 min.
Recordkeeping—7 hr., 24 min.
Learning about the law or the form—2 hr., 47 min.
Preparing and sending the form to the IRS—3 hr., 1 min.
The Department of the Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220.
Written comments should be received on or before June 18, 2004, to be assured of consideration.
Office of the Comptroller of the Currency, Treasury (OCC); Office of Thrift Supervision, Treasury (OTS); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); and Securities and Exchange Commission (SEC).
Notice of interagency statement with request for public comment.
The OCC, OTS, Board, FDIC, and SEC (collectively, the Agencies) are requesting public comment on a proposed interagency statement concerning the complex structured finance activities of financial institutions (national and state banks; bank holding companies; federal and state savings associations; savings and loan holding companies; and SEC-registered broker-dealers and investment advisors) supervised by the Agencies. As recent events have highlighted, a financial institution may assume substantial reputational and legal risk if the institution enters into a complex structured finance transaction with a customer and the customer uses the transaction to circumvent regulatory or financial reporting requirements, evade tax liabilities, or further other illegal or improper behavior. The proposed interagency statement (Statement) describes the types of internal controls and risk management procedures that the Agencies believe are particularly effective in assisting financial institutions to identify and address the reputational, legal, and other risks associated with complex structured finance transactions. The Statement, among other things, provides that financial institutions should have effective policies and procedures in place to identify those complex structured finance transactions that may involve heightened reputational and legal risk, to ensure that these transactions receive enhanced scrutiny by the institution, and to ensure that the institution does not participate in illegal or inappropriate transactions.
Comments regarding the Statement should be received on or before June 18, 2004. Comments regarding the information collections contained in the Statement should be received on or before July 19, 2004.
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• Board's Web Site:
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All public comments are available from the Board's Web site at
• Use the Commission's Internet comment form (
• Send an e-mail to
• Use the Federal eRulemaking Portal (
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
All submissions should refer to File Number S7-22-04. This file number should be included on the subject line if e-mail is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
Financial markets have grown rapidly over the past decade and innovations in financial instruments have facilitated the structuring of cash flows and the allocation of risk among borrowers and investors in more efficient ways. This innovation has led to the development of a wide array of structured finance products, including financial derivatives for market and credit risk, asset-backed securities with customized cash flow features, and specialized financial conduits that manage pools of purchased assets.
National and state banks, bank holding companies, and SEC-registered broker-dealers and investment advisers have played an active and important role in the development of structured finance products and markets. In this regard, financial institutions often play an important role in structuring, arranging or participating in complex structured finance transactions for their own use and to facilitate the needs of customers.
As financial intermediaries, financial institutions play a critical role in ensuring the integrity of financial markets and maintaining the trust and public confidence essential to the proper functioning of the capital markets. In the vast majority of cases, structured finance products and the role played by financial institutions with respect to these products have served the legitimate business purposes of customers. This has allowed structured finance products to become an essential part of U.S. and international capital markets.
The more complex variations of structured finance products, however, have placed pressure on the interpretations of accounting and tax rules, and, in turn, have given rise to significant concerns about the legality and appropriateness of certain individual transactions. Importantly, a limited number of complex structured finance transactions appear to have been used to alter the appearance of a customer's public financial statements in ways that are not consistent with the economic reality of the transactions or to inappropriately reduce a customer's tax liabilities. In the most extreme cases, structured finance transactions appear to have been used in fraudulent schemes to misrepresent the financial condition of public companies or evade taxes.
Financial institutions must conduct their operations in compliance with applicable law and regulations, and institutions that do not may be subject to enforcement actions by the Agencies and lawsuits by private parties. As recent events have highlighted, financial institutions may face substantial legal risk to the extent they participate in complex structured finance transactions that are used by customers to circumvent regulatory or financial reporting requirements, evade tax liabilities, or further other illegal or improper behavior by the customer. Involvement in such transactions also may damage an institution's reputation and franchise value. Reputational risk poses a major threat to financial institutions because the nature of their business requires maintaining the confidence of customers, creditors, and the general marketplace. Importantly, reputational risks may arise even where the transactions involved are structured to technically comply with existing laws and regulations.
The events associated with Enron Corp. demonstrate the potential for the abusive use of complex structured finance transactions, as well as the substantial legal and reputational risks that financial institutions face when they participate in complex structured finance transactions that are designed or used for improper purposes. After conducting investigations, the OCC, Federal Reserve System, and the SEC took strong and coordinated civil and
The Agencies have long expected financial institutions to develop and maintain robust control infrastructures enabling them fully to identify, evaluate and control all dimensions of risk associated with their business activities. In the area of complex structured finance transactions, it is critical that financial institutions have effective risk management and internal controls to ensure that the institutions' activities comply with the law and that all of the risks associated with a transaction—including legal and reputational risks—are identified and appropriately addressed.
In light of recent events, the OCC, Board, and SEC conducted special reviews of several banking and securities firms that are significant participants in the market for complex structured finance products. These reviews were designed to evaluate the product approval, transaction approval, and other internal controls and processes used by these institutions to identify and manage the legal, reputational, and other risks associated with complex structured finance transactions. These assessments indicated that many financial institutions have already taken meaningful steps to improve their control infrastructures relating to complex structured finance products in light of the control weaknesses evidenced by recent events. The Agencies also have focused attention on the complex structured finance activities of financial institutions in the normal course of our supervisory process.
In order to help ensure that financial institutions have and maintain adequate control infrastructures for complex structured finance transactions, the Agencies have developed, and are seeking public comment on, the attached Statement included at the end of this notice.
As a general matter, the Statement indicates that financial institutions offering complex structured finance transactions should maintain a comprehensive set of formal, firm-wide policies and procedures that provide for the identification, documentation, evaluation, and control of the full range of credit, market, operational, legal, and reputational risks that may be associated with these transactions. These policies and procedures should be designed to ensure that the financial institution consistently and appropriately manages its complex structured finance activities on both a per transaction and relationship basis, with all customers (including corporate entities, government entities, and individuals) and in all jurisdictions where the financial institution operates.
The board of directors of a financial institution has ultimate responsibility for establishing the institution's risk tolerances for complex structured finance transactions and ensuring that a sufficiently strong risk control framework is in place to guide the actions of the financial institution's personnel. The board of directors and senior management also should send a strong message to others in the financial institution about the importance of integrity, compliance with the law, and overall good business ethics, which may be implemented through a Code of Professional Conduct.
• As described further in the Statement, an institution's policies and procedures should define what constitutes a complex structured finance transaction and should, among other things—
• Define the process that financial institution personnel must follow to obtain approval for complex structured finance transactions;
• Establish a control process for the approval of all new complex structured finance products;
• Ensure that the reputational and legal risks associated with a complex structured finance transaction, or series of transactions, are identified and evaluated in both the transaction and new product approval process and appropriately managed by the institution;
• Ensure that financial institution staff appropriately reviews and documents the customers' proposed accounting treatment of complex structured finance transactions, financial disclosures relating to the transactions, and business objectives for entering into the transactions;
• Provide for the generation, collection and retention of appropriate documentation relating to all complex structured finance transactions;
• Ensure that senior management and the board of directors of the institution receive appropriate and timely reports concerning the institution s complex structured finance activities;
• Provide for periodic independent reviews of the institution's complex structured finance activities to ensure that the institution's policies and controls are being implemented effectively and to identify potential compliance issues;
• Ensure effective internal audit coverage of the institution's complex structured finance activities; and
• Ensure that financial institution personnel receive appropriate training concerning the institution's policies and procedures governing its complex structured finance activities.
An institution should establish a clear process for identifying those complex structured finance transactions that involve heightened legal and reputational risks. Once a transaction is identified as involving potentially heightened legal or reputational risk, the institution should ensure that these transactions receive an elevated and thorough review. If, after conducting this review, the financial institution determines that a proposed transaction may result in the customer filing materially misleading financial statements, the financial institution should decline to participate in the transaction, condition its participation upon the customer making express and accurate disclosures regarding the nature and financial impact of the transaction on the customer's financial condition, or take other steps to ensure that the financial institution does not participate in an inappropriate transaction.
The Statement includes examples of characteristics that may indicate that a transaction or series of transactions involves elevated levels of legal or reputational risk and, thus, should be subject to heightened review by the institution. The examples included in the Statement are not exclusive and institutions may differ in the sets of characteristics they use in identifying transactions that may involve heightened risks. Institutions, however, should be conservative when establishing these characteristics and the ultimate goals of all institutions should remain the same—to identify those transactions that require additional scrutiny at inception and to ensure that transactions receive a level of review that is commensurate with the legal and reputational risks associated with the transaction.
Because the Statement discusses sound practices related to complex structured finance activities—activities that typically are conducted only by larger financial institutions—the Statement would not be relevant and, therefore, would not apply to most small institutions. Moreover, an institution's policies and procedures concerning complex structured finance activities should be tailored to, and appropriate in light of, the institution's size and the nature, scope, and risk of its complex structured finance activities.
The Agencies request comment on all aspects of the Statement and will revise the Statement as appropriate after a review of public comments.
The Board, the FDIC, the OTS, and the OCC have determined that the Statement, which will represent supervisory guidance for institutions supervised by the Board, the FDIC, the OTS, and the OCC, contains collections of information for purposes of the Paperwork Reduction Act of 1995 (44 U.S.C. Ch. 35). The OCC, the FDIC, the OTS, and Board request public comment on all aspects of the collections of information contained in the Statement. Also, the OCC, FDIC, OTS, and Board request comment on whether institutions involved in complex structured finance transactions currently are in compliance with the Statement and the information collections therein.
The OCC, FDIC, OTS, and Board also invite comment on:
(1) Whether the collections of information contained in the Statement are necessary for the proper performance of each agency's functions, including whether the information has practical utility;
(2) The accuracy of each agency's estimate of the burden of the proposed information collections;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected;
(4) Ways to minimize the burden of the information collections on respondents, including the use of automated collection techniques or other forms of information technology; and
(5) Estimates of capital or start-up costs and costs of operation, maintenance, and purchases of services to provide information.
Respondents/record keepers are not required to respond to these collections of information unless the Board, the FDIC, the OTS, and OCC display a currently valid Office of Management and Budget (OMB) control number. The OCC, FDIC, and OTS currently are requesting approval of these information collections from OMB, and the Board is processing this collection under its delegated authority.
The OCC, FDIC, OTS, and Board estimates of the total annual burden of the collections of information contained in the Statement on the financial institutions they supervise follow.
Comments on the collections of information should be sent to John Ference or Camille Dixon, Office of the Comptroller of the Currency, 250 E Street, SW., Mail Stop 8-4, Attention: Docket Number 04-12 (1557-CSFA), Washington, DC 20219. You may also send comments by electronic mail to
The potential respondents are the largest national banks and U.S. branches of foreign banks.
Comments on the collections of information should be sent to Thomas Nixon, Legal Division, Federal Deposit
The potential respondents are the largest state nonmember banks.
Send comments, referring to the collection by title of the proposal, to Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to
The potential respondents are the largest savings associations and savings and loan holding companies.
Comments on the collections of information should be sent to Michelle Long, Acting Federal Reserve Board Clearance Officer, Division of Research and Statistics, Mail Stop 41, Board of Governors of the Federal Reserve System, Washington, DC 20551. You should also send a copy of your comments to OMB Desk Officer, Mark Menchik, Office of Information and Regulatory Affairs, Office of Management and Budget, Paperwork Reduction Project (1557—To Be Determined), Washington, DC 20503. Alternatively, you may e-mail your comments to
The potential respondents are the largest state member banks, bank holding companies, and U. S. branches and agencies of foreign banks.
The proposed Statement follows.
Financial markets have grown rapidly over the past decade and innovations in financial instruments have facilitated the structuring of cash flows and allocation of risk among creditors, borrowers and investors in more efficient ways. Financial derivatives for market and credit risk, asset-backed securities with customized cash flow features, specialized financial conduits that manage pools of purchased assets, along with other structured transactions have usually served the legitimate business purposes of the customers of financial institutions and are an essential part of U.S. and international capital markets.
Financial institutions have played an active and important role in the development of structured finance products and markets. Structured finance transactions are often employed to manage risk or for other legitimate business purposes, such as diversifying risks, allocating cash flows, and reducing cost of capital. The more complex variations of selected structured finance transactions have, however, placed pressure on the interpretations of accounting and tax rules, and this has given rise to significant concerns about the risks associated with certain individual transactions. More so, a limited number of transactions appear to have been used primarily to alter the appearance of a customer's public financial statements in ways that are not consistent with the economic reality of the transactions or to inappropriately reduce a customer's tax liabilities. In the most extreme cases, structured finance transactions appear to have been used in fraudulent schemes primarily to misrepresent the financial condition of public companies or evade taxes. Some financial institutions have been subject to criminal sanctions, and civil and administrative enforcement actions by the regulatory agencies, for participating in complex structured finance transactions used by a public company in reporting false or misleading financial statements.
Financial institutions are in a unique position given their role in structuring, arranging or participating in complex structured finance transactions for their own use and to facilitate the needs of their customers. When a financial institution provides advice on, arranges or actively participates in a complex structured finance transaction, it assumes the usual market, credit, and operational risks and also may assume substantial reputational and legal risk to the extent that an end-user enters into the transaction for improper purposes. Considering the inherent complexity of many structured finance transactions and the many risks associated with these transactions, it is critical that
The regulatory agencies have long expected financial institutions to develop and maintain robust control infrastructures enabling them to fully identify, evaluate and control all dimensions of risk associated with their business activities. In the wake of recent developments, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the U.S. Securities and Exchange Commission are issuing this guidance to financial institutions that we supervise (“financial institutions” or “institutions”)
Because many of the core elements of an effective control infrastructure are the same regardless of the business line involved, this guidance draws heavily on controls and procedures that our agencies previously have found to be effective in managing and controlling risks and identifies ways in which these controls and procedures can effectively be applied to the institution's complex structured finance activities. Financial institutions should consider this guidance in developing, or evaluating existing, risk controls for complex structured finance activities. These risk controls should supplement the financial institution's more general internal controls and risk management systems, as appropriate.
Structured finance transactions encompass a broad array of products with varying levels of complexity. This guidance addresses complex structured finance transactions, which usually share several common characteristics. First, they typically result in a final product that is often non-standard and structured to meet the specific financial objectives of a customer. Second, they often involve professionals from multiple disciplines within the financial institution and may have significant fees or high returns in relation to the market and credit risks associated with the transaction. Third, they may be associated with the creation or use of one or more special purpose entities (SPEs) designed to address the economic, legal, tax or accounting objectives of the customer and/or the combination of cash and derivative products. Finally, and perhaps most importantly, they may expose the financial institution to elevated levels of market, credit, operational, legal or reputational risks. These criteria are not exclusive and institutions should supplement or modify these criteria as appropriate to reflect the institution's business activities and changes in the marketplace.
Financial risks include, among other things, market and credit risks. Due to their inherent complexity, financial institutions participating in complex structured finance transactions also may face heightened reputational or legal risk. Financial institutions have been sued due to their involvement in complex structured finance transactions that allegedly facilitated the deceptive accounting or financial reporting practices of certain public companies. Legal risk also may arise in other situations if the financial institution is involved in transactions that are used by customers to circumvent regulatory or financial reporting requirements, evade tax liabilities, or further other illegal or improper behavior by the customer.
Accordingly, financial institutions need to have strong controls to ensure that their actions with respect to complex structured finance transactions—including structuring, marketing, sales, funding and trading activities—are conducted in accordance with applicable laws and regulations, and to ensure that the institution identifies and appropriately addresses the potential reputational risks involved in these transactions. As discussed further under “Reputational and Legal Risk,” an institution's policies and procedures should identify those complex structured finance transactions that may warrant enhanced scrutiny due to factors related specifically to reputational and legal risk.
Although the foregoing (and this document more generally) highlights some of the most significant risks associated with complex structured finance transactions, it is not intended to present a full exposition of the risks associated with these transactions. Financial institutions are encouraged to refer to other supervisory information prepared by the agencies for further information concerning market, credit, operational, legal and reputational risks.
The board of directors (the Board) of a financial institution is elected by and accountable to shareholders, and is the focal point of the corporate governance system. Effective oversight by the boards of directors of public institutions is fundamental to preserving the integrity of capital markets. The board of directors, in its oversight role, is ultimately responsible for the financial well being of the institutions they oversee, as well as ensuring that the risks associated with the firm's business activities, including those activities associated with the offering and delivery of complex structured finance transactions, are appropriately identified, evaluated and controlled by management. The Board should establish the financial institution's threshold for the risks associated with complex structured finance products and ensure that a sufficiently strong risk
Using guidance provided by the Board, senior management should implement a risk control framework for complex structured finance transactions that includes comprehensive policies, defined roles and responsibilities and approval authorities, detailed management reporting, required documentation, and ongoing independent monitoring and testing of policy compliance. In order to manage the risks associated with complex structured finance transactions, some institutions have established a senior management committee that is designed to ensure that all of the relevant control functions within the financial institution, including independent risk management, accounting policy, legal, and financial control, are involved in the oversight of complex structured finance transactions. The goal of such a senior-level risk control committee is to ensure that those complex structured finance activities that may expose the financial institution to higher levels of financial, legal and reputational risk are comprehensively and consistently managed and controlled on a company-wide basis. This senior management committee regularly reviews trends in new products and complex structured transaction activity, including overall risk exposures from such transactions, and typically provides final approval of the most complicated or controversial complex structured finance transactions. The agencies believe that such a senior-level committee can serve as an important part of an effective control infrastructure for complex structured finance activities.
The Board and senior management also should send a strong message to others in the financial institution about the importance of integrity, compliance with the law, and overall good business ethics, which may be implemented through a Code of Professional Conduct. The Board and senior management should strive to create a firm-wide corporate culture that is sensitive to ethical issues as well as the potential risks to the financial institution. The financial institution's culture and procedures should encourage personnel to elevate ethical concerns regarding a complex structured finance transaction or series of transactions to appropriate levels of management. Establishing a culture that encourages financial institution personnel to elevate concerns to appropriate levels of management may require mechanisms to protect personnel by permitting confidential disclosure in appropriate circumstances.
Financial institutions offering complex structured finance transactions should maintain a comprehensive set of formal, firm-wide policies and procedures that provide for the identification, documentation, evaluation, and control of the full range of credit, market, operational, legal, and reputational risks that may be associated with these transactions. These policies should start with the financial institution's definition of what constitutes a complex structured finance transaction and be designed to ensure that the financial institution appropriately manages its complex structured finance activities on both an individual transaction and a relationship basis, with all customers (including corporate entities, government entities and individuals) and in all jurisdictions where the financial institution operates.
To be most effective, the institution's policies and procedures relating to complex structured finance transactions should specifically set forth the particular responsibilities of the personnel involved in the origination, structuring, trading, review, approval, documentation, verification, and execution of these transactions. Accordingly, these policies and procedures should address responsibilities of personnel from sales and trading, relationship management, market risk, credit risk, operations, accounting, legal, compliance, audit and senior line management. The financial institution's policies and procedures should provide a clear framework for the approval and monitoring of complex structured finance transactions. Policies for relevant personnel should describe responsibilities for working with relationship managers, advising and counseling customers, disclosing information to customers, and providing relevant information to control areas.
The institution's policies should ensure that the market, credit, and operational risk associated with individual complex structured transactions are appropriately identified, aggregated, and managed. A financial institution should, at a minimum, also have procedures, controls and systems for complex structured finance activities that address the following: (1) Transaction approval, (2) new product approval, (3) reputational and legal risk, (4) accounting and disclosure by the customer, (5) documentation, (6) reporting, (7) independent monitoring, analysis and compliance with internal policies, (8) audit, and (9) training.
The policies and procedures of a financial institution should define the process that personnel must follow to obtain approval for a complex structured finance transaction. Policies for approving complex structured finance transactions should clearly articulate the roles and responsibilities of both transactors (
Complex structured finance transactions also should be incorporated into a financial institution's new product policies. In this regard, a financial institution's policies should include a definition of what constitutes a “new” complex structured finance product and should establish a control process for the approval of each new product. In determining whether or not a complex structured finance transaction is “new,” a financial institution should consider a variety of factors, including any structural variations from existing products, whether the product is targeted at a new class of customers, pricing variations from existing products, whether the product raises additional or new legal, compliance or regulatory issues, and deviations from standard market practices. When in doubt as to whether a complex structured finance transaction requires vetting through the new product approval process, financial institution personnel should err on the side of conservatism and route the proposed product through the process dictated in the new product approval policy. The new product policies for complex structured finance activities should address the roles and responsibilities of all relevant parties, including the front office, credit risk, market risk, operations, accounting, legal, compliance, audit and senior line management. In addition, it is imperative that the institution's policies require that new products receive the approval of all relevant control areas that are independent of the profit center before the product is offered to customers.
A financial institution also should have in place controls that are designed to ensure that new complex structured finance products are, in fact, subjected to the institution's established approval process. Moreover, subsequent to the new product approval, the financial institution should monitor new complex structured finance products to ensure that they are effectively incorporated into the institution's risk control systems.
The policies and procedures established by a financial institution for complex structured finance activities should ensure that the legal and reputational risks associated with a transaction, or series of transactions, are identified and evaluated in both the transaction and new product approval processes and effectively and appropriately managed by the institution. A financial institution should have effective policies, procedures and controls for assessing the customer's business objectives for entering into a transaction or series of transactions and the economic substance of the transaction(s), evaluating the appropriateness of the transaction(s), and preventing the financial institution from participating in inappropriate transactions.
Policies should ensure that the customer understands the risk and return profile of the transaction. In instances where the financial institution is designing the transaction and advising the customer, the disclosures to the customer should include an adequate description of the risks in the complex structured finance transaction as well as disclosure of any conflicts of interest associated with the financial institution's participation in the transaction. Policies should also articulate when a proposed transaction requires acknowledgement by the customer that the transaction has been reviewed and approved by higher levels of the customer's management. Notwithstanding a customer's sophistication and structure of a complex structured finance transaction, the financial institution should evaluate the impact a transaction may have on the financial institution's reputation or franchise value.
Policies should outline responsibilities of the sales force, front office, credit and other risk control personnel for analyzing and documenting the customer's objectives and customer-related accounting, regulatory, or tax issues. In addition, a financial institution's policies and procedures should establish criteria or factors for when concerns related to a particular structured finance transaction will necessitate a comprehensive evaluation of the institution's entire relationship with a customer.
Policies should ensure that complex structured finance transactions are reviewed on a consistent basis by the financial institution's legal department and, where appropriate, by independent outside counsel. In general, the financial institution's legal department should review complex structured finance transactions as part of the approval process. Legal personnel may be assigned to business units or areas where complex structured transactions originate to ensure the legal department's involvement throughout the transaction's development, or financial institutions may assign specific legal personnel to each complex structured finance transaction. Independent monitoring by a risk control group or compliance unit should ensure that all complex structured transactions receive appropriate legal review, including review by outside counsel where appropriate.
Areas for legal review include financial institution permissibility, disclosure by the customer, regulatory capital requirements, the enforceability of any netting and collateral agreements associated with the transaction, suitability or appropriateness assessments, customer assurances, insurance considerations and tax issues. Because transactions may involve multiple counterparties located in different jurisdictions, the financial institution should establish review and documentation procedures that are designed to ensure that each counterparty has the authority to enter into the transaction and that each counterparty's obligations are reduced to legally enforceable contracts. Financial institutions should ensure that any legal reviews are conducted by qualified in-house or outside counsel and that these professionals are provided the documentation and other information needed to properly evaluate the transaction.
Careful evaluations of the consequences of a transaction are particularly important when the transaction is designed to achieve a customer's financial reporting or complex tax objectives. Policies should clearly define the types of circumstances where the approval of transactions or patterns of transactions should be elevated to higher levels of financial institution management for reasons specific to legal or reputational risk. In creating procedures for elevating certain transactions to higher levels, financial institutions should identify the characteristics of those transactions, or series of transactions, that increase reputational and legal risk. Institutions should be conservative when identifying these characteristics. While institutions may differ in the sets of characteristics they identify, the goals should remain the same—to identify the transactions that require additional scrutiny at inception and to ensure that transactions receive a level of review
• Transactions with questionable economic substance or business purpose or designed primarily to exploit accounting, regulatory or tax guidelines), (particularly when executed at year end or at the end of a reporting period);
• Transactions that require an equity capital commitment from the financial institution;
• Transactions with terms inconsistent with market norms (
• Transactions using non-standard legal agreements (
• Transactions involving multiple obligors or otherwise lacking transparency (
• Transactions with unusual profits or losses or transactions that give rise to compensation that appears disproportionate to the services provided or to the risk assumed by the institution;
• Transactions that raise concerns about how the client will report or disclose the transaction (
• Transactions with unusually short time horizons or potentially circular transfers of risk (either between the financial institution and customer or between the customer and other related parties);
• Transactions with oral or undocumented agreements, which, if documented, could have material legal, reputational, financial accounting, financial disclosure, or tax implications;
• Transactions that cross multiple geographic or regulatory jurisdictions, making processing and oversight difficult;
• Transactions that cannot be processed via established operations systems; and
• Transactions with significant leverage.
Having developed a process to identify transactions that may pose higher levels of legal and reputational risk, financial institutions should implement procedures to address these risks. These procedures should, among other things:
• Ensure that staff approving each transaction fully understands the scope of the institution's relationship with the customer and has evaluated and documented the customer's business objectives for entering into the transaction, the economic substance of the transaction, and the potential legal and reputational risks to the financial institution;
• Ensure a thorough review and evaluation of whether credit exceptions, accounting issues, rating agency disclosures, law suits against the customer, or other factors expose the financial institution to unwarranted legal or reputational risks;
• Develop and implement effective internal communication procedures to ensure that all financial institution personnel responsible for transaction approval and monitoring receive, and document in a timely manner, complete and accurate information about the transaction, the customer's purpose(s) for entering into the particular transaction, and the materiality of the transaction to the customer;
• Ensure sufficient time is allowed for a detailed, thorough review of the transaction by the relevant personnel;
• Ensure that complex structured finance transactions identified as having heightened risks receive a thorough review by senior management for an evaluation of credit, market, operation, legal and reputational risks to the financial institution;
• Ensure that complex structured finance transactions that are determined to present unacceptable risk to the financial institution are declined;
• Ensure that the Board and senior management periodically assess the financial institution's tolerance for risks associated with complex structured finance transactions; and
• Ensure that the institution provides the customer with appropriate information concerning the structure and risks of the transaction, and articulate when a proposed transaction requires acknowledgement of review by higher levels of a customer's management.
As noted above, transactions designed primarily to achieve financial reporting or complex tax objectives may require greater scrutiny due to possible legal and reputational risk implications. For transactions identified as involving elevated risks, the financial institution's procedures should ensure that staff approving the transactions obtain and document complete and accurate information about the customer's proposed accounting treatment of the transaction, financial disclosures relating to the transaction, as well as the customer's objectives for entering into the transaction. The institution's policies should ensure that this information is assessed by appropriate personnel in the approval process and that these personnel consider the information in light of financial, accounting, rating agency disclosure, or other information associated with the transaction that may raise legal or reputational risks for the financial institution.
The financial institution's policies also should address when third party accounting professionals should be engaged to review transactions. Moreover, there may be circumstances where the financial institution or the third-party accounting professionals it engages will wish to communicate directly with the customer's independent auditors to discuss the transaction. Independent monitoring of the approval process (discussed below) should ensure that personnel adhere to established requirements for obtaining a review by third party accountants or communicating with the customer's independent auditor.
In any instance where the financial institution determines that a proposed transaction may result in the customer filing materially misleading financial statements, the financial institution should take appropriate actions. Such actions may include declining to participate in the transaction or conditioning its participation upon the customer making express and accurate disclosures regarding the nature and financial impact of the transaction on the customer's financial condition. The ultimate objective is to take steps to ensure that the financial institution does not participate in an inappropriate transaction. As part of this process, financial institutions should consider seeking representations and warranties from the customer stating the purpose of the transaction, how the customer will account for the transaction, and that the customer will account for the transaction in accordance with applicable accounting standards, consistently applied.
The financial institution also should develop procedures to address the creation, acquisition, and use of institution and client-sponsored SPEs. When a structured transaction requires the establishment of such an entity, the financial institution should implement an SPE approval process that permits the risk control groups to evaluate the accounting, legal, and tax issues. Effective review may protect the financial institution against accounting, legal, tax, and reputational risks. Financial institutions should also monitor the use of SPEs by providing periodic updates to executive management and maintaining a database of all SPEs created to facilitate structured finance transactions.
The documentation that financial institutions use to support complex structured finance transactions is often highly customized and negotiated. Careful generation, collection and retention of documents associated with complex structured finance transactions are important control mechanisms in minimizing legal and credit risks, as well as reducing unwarranted exposures to the financial institution's reputation. Policies and procedures should ensure that transaction documentation is appropriately detailed and transparent for review by all control or approval functions. When in doubt, financial institutions should err on the side of conservatism and retain documents associated with transaction due diligence, approval and monitoring. Financial institutions should maintain comprehensive documentation for all transactions approved, as well as disapproved transactions with controversial elements (
The documentation policies of a financial institution should seek to ensure that all counterparty obligations are reduced to legally enforceable written contracts. This would include the use of term sheets, confirmations, master agreements, netting agreements, and collateral agreements or comparable documents. An institution should have systems in place to track the status of documentation on a deal-by-deal basis to ensure that counterparties execute and return all necessary contractual documents. The responsibility for drafting transaction documents, or selecting appropriate templates, should be assigned to personnel who can identify legal issues (
The financial institution's documentation standards also should clearly assign accountability and strive for transparency in the approval process and ongoing monitoring of exposures associated with complex structured finance transactions. Such standards should include appropriate guidance on:
• Generation, distribution and retention of documents associated with individual transactions. In addition to standard legal documents, such documentation should include, as appropriate:
• Generation, distribution and retention of documents such as minutes of meetings of committees and control groups prepared in sufficient detail to indicate issues raised, approval or rejection of a transaction, rationale or factors considered in approving or rejecting a transaction and contingencies or items to be resolved pending final approval. It may be practical to assign a specific coordinator or central location for the maintenance of committee and control group minutes.
• Generation, distribution and retention of information demonstrating final resolution of items still pending at time of transaction approval.
• Generation, distribution and retention of key documents associated with ongoing communications with the customer.
• Generation, distribution and retention of key documents showing the financial institution's monitoring of exposures and periodic assessment of reputational and legal risk considerations.
Regardless of the approval structure, the financial institution should define the complex structured finance transaction reporting requirements appropriate for various levels of management and the Board. Financial institutions should develop and ensure that reports summarizing pending and contemplated complex structured finance transactions are disseminated to appropriate levels of management for their review and further distribution. At a minimum, the financial institution should establish an independent risk function that prepares a periodic summary of trends in complex structured finance transactions and a brief summary of each deal determined to involve heightened risks. In addition, management should establish a process for reporting transactions viewed as possessing higher risk.
The events of recent years evidence the need for a strong compliance function in those financial institutions engaged in complex structured finance transactions. Financial institutions should develop and enforce procedures to conduct periodic independent reviews of complex structured finance business activity to ensure that policies and controls are being implemented effectively and to identify complex structured transactions that may have been executed without proper approvals or which may indicate problematic trends. These reviews should cover all the processes involved in creating, analyzing, offering and marketing
The establishment of an independent monitoring and analysis program often requires considerable work, as unique reports often need to be set up for specialized products. Elevated monitoring should be directed to those transactions or relationships that the financial institution has identified as presenting heightened legal or reputational risks, based on the factors and considerations discussed above under “Reputational and Legal Risks,” or where the transaction or patterns of transactions pose greater credit or market risk. Such monitoring may include more frequent assessments of customer exposures and elevation of findings to a higher level of management in the financial institution.
Compliance functions often are organized along product lines, and this structure may prove challenging when offering complex structured finance transactions that cross product lines. Practices that may assist financial institutions in establishing proactive compliance functions include, but are not limited to:
• Assigning onsite compliance officers for each traded product or business line and establishing a process for communication across product lines, legal entities, or regions
• Developing comprehensive compliance programs that address responsibilities for risk assessment, identifying and managing conflicts of interest, and require policy implementation, training, monitoring and testing
• Establishing clear policies that govern product and transaction approval, require the pre-approval of higher risk transactions, and define standards for marketing materials
• Conducting periodic reviews of derivatives and complex structured transaction documentation and policy compliance
• Reviewing trading activity to identify off market trades, synthetic funding transactions, unusually profitable trades and customer relationships and trades that present reputational concerns
• Conducting a periodic assessment of the supervision of sales and trading personnel and policy compliance.
The internal audit department of any financial institution is integral to its defense against fraud, unauthorized risk taking and damage to the financial institution's reputation. These are all areas of concern with respect to complex structured finance activities. The complexity and relative profitability of these activities may add to the difficulty of analysis and increase the incentives for risk taking. For these reasons, the internal audit department in conducting its review of complex structured finance activities should audit the financial institution's adherence to its own control procedures, and further assess the adequacy of its policies and procedures given the nature of its complex structured finance business.
Effective internal audit coverage of complex structured finance transactions requires a comprehensive independent audit program that is staffed with personnel that have the necessary skills and experience to identify and report on compliance with financial institution policy and procedures. These necessary skills and experience should include an understanding of the nature and risks of structured transactions, as well as a detailed understanding of the institution's policies and procedures. Internal audit should validate that all business lines and individual desks are complying with the financial institution's standards for complex structured finance transactions and appropriately identify any exceptions. This validation should include transaction testing that confirms policy compliance, the existence of proper approvals, the adequacy of documentation, and the integrity of management reporting. Internal audit should have well-articulated procedures for when to expand the scope of audit activities. Further, internal audit should have procedures for reporting audit findings directly to the financial institution's audit committee and senior management of the audited area. Internal audit should implement follow-up procedures to ensure that audit findings have been resolved and the business unit or department has implemented audit recommendations in a timely manner.
In addition, the complexity of the structured finance activities may cause financial institutions to retain outside consultants, accountants, or lawyers to review the structured product area. The retention of such independent expertise may be a prudent method to fully grasp and control the overall risk resulting from such activities. For example, financial institutions may employ external auditors to test the structured transactions approval process and ensure compliance with its policies and procedures.
The resulting reports and memoranda can provide valuable insight to the financial institution in improving its risk controls and oversight.
Appropriate training on the financial institution's policies and procedures for handling complex structured finance transactions is critical. At the inception of a complex structured finance transaction, financial institution personnel should be aware of the required approval process needed for transaction implementation. The financial institution should retain documentation to support the initial and ongoing training of personnel involved in complex structured finance transactions.
Financial institutions play a critical role in ensuring the integrity of our financial markets. The ability of financial institutions to fulfill this role and operate in a prudent manner depends on a foundation built upon trust and public confidence and compliance with all applicable legal requirements. The regulatory agencies expect financial institutions involved in structured finance transactions to build and implement enhanced risk management and internal controls systems that effectively ensure compliance with the law and control the risks associated with complex structured finance transactions.
By the Office of Thrift Supervision.
By order of the Board of Governors of the Federal Reserve System.
By order of the Board of Directors.
By the Commission.
In proposed rule document 04-10651 beginning on page 26059 in the issue of Tuesday, May 11, 2004, make the following correction:
On page 26060, in the third column, in the second full paragraph titled,
In notice document 04-10842 beginning on page 26619 in the issue of Thursday, May 13, 2004, make the following correction:
On page 26619, in the third column, the third line after the subject heading is corrected to read “Consent Decree in
In notice document 04-10843 appearing on page 26618 in the issue of Thursday, May 13, 2004, make the following correction:
On page 26618, in the third column, in the second paragraph, in the third line above the signature block, “$725” should read “$7.25”.
In notice document 04-10406 beginning on page 25792 in the issue of Friday May 7, 2004, make the following correction:
On page 25793 in the third column, under the heading “
In proposed rule document 04-10407 beginning on page 25797 in the issue of May 7, 2004, make the following correction:
On page 25798, in the first column, under the heading “
United States Sentencing Commission.
Notice of submission to Congress of amendments to the sentencing guidelines effective November 1, 2004.
Pursuant to its authority under 28 U.S.C. § 994(p), the Commission has promulgated amendments to the sentencing guidelines, policy statements, commentary, and statutory index. This notice sets forth the amendments and the reason for each amendment.
The Commission has specified an effective date of November 1, 2004, for the amendments set forth in this notice.
Michael Courlander, Public Affairs Officer, (202) 502-4590. The amendments set forth in this notice also may be accessed through the Commission's Web site at
The United States Sentencing Commission is an independent agency in the judicial branch of the United States Government. The Commission promulgates sentencing guidelines and policy statements for federal sentencing courts pursuant to 28 U.S.C. § 994(a). The Commission also periodically reviews and revises previously promulgated guidelines pursuant to 28 U.S.C. § 994(o) and generally submits guideline amendments to Congress pursuant to 28 U.S.C. § 994(p) not later than the first day of May each year. Absent action of Congress to the contrary, submitted amendments become effective by operation of law on the date specified by the Commission (generally November 1 of the year in which the amendments are submitted to Congress).
Notice of proposed amendments was published in the
28 U.S.C. 994(a), (o), and (p); USSC Rule of Practice and Procedure 4.1.
1.
“1. Applicability of Guideline.—This guideline applies in cases of premeditated killing. This guideline also applies when death results from the commission of certain felonies. For example, this guideline may be applied as a result of a cross reference (
2. Imposition of Life Sentence.—
(A) Offenses Involving Premeditated Killing.—In the case of premeditated killing, life imprisonment is the appropriate sentence if a sentence of death is not imposed. A downward departure would not be appropriate in such a case. A downward departure from a mandatory statutory term of life imprisonment is permissible only in cases in which the government files a motion for a downward departure for the defendant's substantial assistance, as provided in 18 U.S.C. 3553(e).
(B) Felony Murder.—If the defendant did not cause the death intentionally or knowingly, a downward departure may be warranted. For example, a downward departure may be warranted if in robbing a bank, the defendant merely passed a note to the teller, as a result of which the teller had a heart attack and died. The extent of the departure should be based upon the defendant's state of mind (
3. Applicability of Guideline When Death Sentence Not Imposed.—If the defendant is sentenced pursuant to 18 U.S.C. 3591
Section 2A1.2(a) is amended by striking “33” and inserting “38”.
Section 2A1.2 is amended by striking the commentary captioned “Background” and inserting the following:
1. Upward Departure Provision.—If the defendant's conduct was exceptionally heinous, cruel, brutal, or degrading to the victim, an upward departure may be warranted.
Section 2A1.3(a) is amended by striking “25” and inserting “29”.
Section 2A1.3 is amended by striking the commentary captioned “Background”.
Section 2A1.4(a) is amended in subdivision (1) by striking “conduct was criminally negligent” and inserting “offense involved criminally negligent conduct”; and by striking subdivision (2) and inserting the following:
“(2) (Apply the greater):
(A) 18, if the offense involved reckless conduct; or
(B) 22, if the offense involved the reckless operation of a means of transportation.”.
Section 2A1.4 is amended by adding at the end the following:
“(b) Special Instruction.
(1) If the offense involved the involuntary manslaughter of more than one person, Chapter Three, Part D (Multiple Counts) shall be applied as if the involuntary manslaughter of each person had been contained in a separate count of conviction.”.
The Commentary to § 2A1.4 captioned “Application Notes” is amended in the heading by striking “Notes” and inserting “Note”; and by striking Notes 1 and 2 and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘Criminally negligent’ means conduct that involves a gross deviation from the standard of care that a reasonable person would exercise under the circumstances, but which is not reckless. Offenses with this characteristic usually will be encountered as assimilative crimes.
‘Means of transportation’ includes a motor vehicle (including an automobile or a boat) and a mass transportation vehicle. ‘Mass transportation’ has the meaning given that term in 18 U.S.C. § 1993(c)(5).
‘Reckless’ means a situation in which the defendant was aware of the risk created by his conduct and the risk was of such a nature and degree that to disregard that risk constituted a gross deviation from the standard of care that
Section 2A1.5(a) is amended by striking “28” and inserting “33”.
Section 2A2.1(a) is amended in subdivision (1) by striking “28” and inserting “33”; and in subdivision (2) by striking “22” and inserting “27”.
Section 2A2.1(b)(1) is amended by striking “(A) If” and inserting “If (A)”; and by striking “if” each place it appears.
The Commentary to § 2A2.1 captioned “Application Notes” is amended by striking Notes 1 through 3 and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘First degree murder’ means conduct that, if committed within the special maritime and territorial jurisdiction of the United States, would constitute first degree murder under 18 U.S.C. § 1111.
‘Permanent or life-threatening bodily injury’ and ‘serious bodily injury’ have the meaning given those terms in Application Note 1 of the Commentary to § 1B1.1 (Application Instructions).
2. Upward Departure Provision.—If the offense created a substantial risk of death or serious bodily injury to more than one person, an upward departure may be warranted.”.
Section 2A2.2(a) is amended by striking “15” and inserting “14”.
Section 2A2.2(b)(2) is amended by striking “(A) If” and inserting “If (A)”; and by striking “if” each place it appears.
Section 2A2.2(b)(3) is amended in subdivision (A) by striking “2” and inserting “3”; in subdivision (B) by striking “4” and inserting “5”; in subdivision (C) by striking “6” and inserting “7”; in subdivision (D) by striking “3” and inserting “4”; and in subdivision (E) by striking “5” and inserting “6”.
Section 2A2.2.(b)(3) is amended by striking “Provided, however,” and all that follows through “not exceed 9 levels.” and inserting the following:
“However, the cumulative adjustments from application of subdivisions (2) and (3) shall not exceed 10 levels.”.
Section 2A2.2(b) is amended by adding at the end the following:
“(6) If the defendant was convicted under 18 U.S.C. § 111(b) or § 115, increase by 2 levels.”.
The Commentary to § 2A2.2 captioned “Application Notes” is amended by striking Note 2 and all that follows through “For purposes of subsection (b)(1),” and inserting the following:
“2. Application of Subsection (b)(1).—For purposes of subsection (b)(1),”;
“3. Application of Subsection (b)(2).—In a case involving a dangerous weapon with intent to cause bodily injury, the court shall apply both the base offense level and subsection (b)(2).
4. Application of Official Victim Adjustment.—If subsection (b)(6) applies, § 3A1.2 (Official Victim) also shall apply.”.
The Commentary to § 2A2.2 captioned “Background” is amended by adding at the end the following:
“Subsection (b)(6) implements the directive to the Commission in subsection 11008(e) of the 21st Century Department of Justice Appropriations Act (the ‘Act’), Public Law 107-273. The enhancement in subsection (b)(6) is cumulative to the adjustment in § 3A1.2 (Official Victim) in order to address adequately the directive in section 11008(e)(2)(D) of the Act, which provides that the Commission shall consider ‘the extent to which sentencing enhancements within the Federal guidelines and the authority of the court to impose a sentence in excess of the applicable guideline range are adequate to ensure punishment at or near the maximum penalty for the most egregious conduct covered by’ 18 U.S.C. §§ 111 and 115.”.
Section 2A2.3(a) is amended in subdivision (1) by striking “6” and inserting “7”, and by striking “conduct” and inserting “offense”; and in subdivision (2) by striking “3” and inserting “4”.
Section 2A2.3(b)(1) is amended by inserting “(A) the victim sustained bodily injury, increase by 2 levels; or (B)” after “If”.
Section 2A2.3 is amended by adding at the end the following:
“(c) Cross Reference
(1) If the conduct constituted aggravated assault, apply § 2A2.2 (Aggravated Assault).”.
The Commentary to § 2A2.3 captioned “Application Notes” is amended by striking Notes 1 through 3 and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘Bodily injury’, ‘dangerous weapon’, and ‘firearm’ have the meaning given those terms in Application Note 1 of the Commentary to § 1B1.1 (Application Instructions).
‘Minor assault’ means a misdemeanor assault, or a felonious assault not covered by § 2A2.2 (Aggravated Assault).
‘Substantial bodily injury’ means ‘bodily injury which involves (A) a temporary but substantial disfigurement; or (B) a temporary but substantial loss or impairment of the function of any bodily member, organ, or mental faculty.’
2. Application of Subsection (b)(1).—Conduct that forms the basis for application of subsection (a)(1) also may form the basis for application of the enhancement in subsection (b)(1)(A) or (B).”.
Section 2A2.4(a) is amended by striking “6” and inserting “10”.
Section 2A2.4(b) is amended by striking “Characteristic” and inserting “Characteristics”; by striking in subdivision (1) “If the conduct involved physical contact, or if” and inserting “If (A) the offense involved physical contact; or (B)”; and by adding at the end the following:
“(2) If the victim sustained bodily injury, increase by 2 levels.”.
The Commentary to § 2A2.4 captioned “Application Notes” is amended by striking Notes 1 and 2 and inserting the following:
“1. Definitions.—For purposes of this guideline, ‘bodily injury’, ‘dangerous weapon’, and ‘firearm’ have the meaning given those terms in Application Note 1 of the Commentary to § 1B1.1 (Application Instructions).
2. Application of Certain Chapter Three Adjustments.—The base offense level incorporates the fact that the victim was a governmental officer performing official duties. Therefore, do not apply § 3A1.2 (Official Victim) unless, pursuant to subsection (c), the offense level is determined under § 2A2.2 (Aggravated Assault). Conversely, the base offense level does not incorporate the possibility that the defendant may create a substantial risk of death or serious bodily injury to another person in the course of fleeing from a law enforcement official (although an offense under 18 U.S.C. § 758 for fleeing or evading a law enforcement checkpoint at high speed will often, but not always, involve the creation of that risk). If the defendant creates that risk and no higher guideline adjustment is applicable for the conduct creating the risk, apply § 3C1.2 (Reckless Endangerment During Flight).”.
The Commentary to § 2A2.4 captioned “Application Notes” is amended in Note 3 by inserting “Upward Departure Provision.—” before “The base”.
The Commentary to § 2A2.4 captioned “Background” is amended by striking the last sentence.
Section 3A1.2 is amended to read as follows:
Ҥ 3A1.2. Official Victim
(Apply the greatest):
(a) If (1) the victim was (A) a government officer or employee; (B) a former government officer or employee; or (C) a member of the immediate family of a person described in subdivision (A) or (B); and (2) the offense of conviction was motivated by such status, increase by 3 levels.
(b) If subsection (a)(1) and (2) apply, and the applicable Chapter Two guideline is from Chapter Two, Part A (Offenses Against the Person), increase by 6 levels.
(c) If, in a manner creating a substantial risk of serious bodily injury, the defendant or a person for whose conduct the defendant is otherwise accountable—
(1) knowing or having reasonable cause to believe that a person was a law enforcement officer, assaulted such officer during the course of the offense or immediate flight therefrom; or
(2) knowing or having reasonable cause to believe that a person was a prison official, assaulted such official while the defendant (or a person for whose conduct the defendant is otherwise accountable) was in the custody or control of a prison or other correctional facility,
The Commentary to § 3A1.2 captioned “Application Notes” is amended in Note 2 by striking the second sentence; and by striking in the third sentence “, Part A,”.
The Commentary to § 3A1.2 captioned “Application Notes” is amended in Note 3 by striking “Subsection (a)” and inserting “Subsections (a) and (b)”; and by striking “in subsection (a)” and inserting “, for purposes of subsections (a) and (b),”.
The Commentary to § 3A1.2 captioned “Application Notes” is amended in Note 4 by striking “Subsection (b)” each place it appears and inserting “Subsection (c)”; by striking “subsection (b)” each place it appears and inserting “subsection (c)”; and by striking “and control” each place it appears and inserting “or control”.
The Commentary to § 3A1.2 captioned “Application Notes” is amended by striking Note 5 and inserting the following:
“5. Upward Departure Provision.—If the official victim is an exceptionally high-level official, such as the President or the Vice President of the United States, an upward departure may be warranted due to the potential disruption of the governmental function.”.
First, this amendment makes a number of changes to the homicide guidelines. The amendment revises the commentary in guideline § 2A1.1 (First Degree Murder) and deletes outdated language. One effect of this revision is to clarify that a downward departure from a mandatory statutory sentence of life imprisonment is permissible only in cases in which the government files a motion for a downward departure for the defendant's substantial assistance, as provided in 18 U.S.C. § 3553(e).
In addition, the Commission received public comment that the guideline penalties for all homicides, other than for first degree murder, were inadequate and in need of review. An examination of the homicide and manslaughter guidelines also was prompted by section 104 of the PROTECT Act, which directed the Commission to increase the base offense level for § 2A4.1 (Kidnapping, Abduction, Unlawful Restraint). The Commission increased the base offense level for kidnapping by eight levels, from base offense level 24 to base offense level 32, effective May 30, 2003. This increase brought kidnapping without injury to within one level of the base offense of level 33 for second degree murder. The Commission examined data on second degree murder offenses and found that in 2002, courts departed upward from the guideline range in 34.3% of the cases. The Commission also received public comment expressing concern that an individual convicted of second degree murder who accepted responsibility might serve as little as eight years' imprisonment. By increasing the base offense level in § 2A1.2 (Second Degree Murder) to level 38, the Commission has established an approximate 20-year sentence of imprisonment for second degree murder.
Data also showed a high level of upward departure sentences for some other homicide offenses, such as voluntary manslaughter, which had a 28.6% upward departure rate in 2002. Based upon such indications that the sentences may be inadequate for these offenses, the Commission increased the base offense levels of many of the homicide guidelines to punish them more appropriately and with an eye toward restoring the proportionality found in the original guidelines. For example, the original base offense level of 28 for attempted first degree murder, § 2A2.1 (Assault with Intent to Commit Murder; Attempted Murder) is five levels lower than the original base offense level of level 33 for second degree murder. In this amendment, the five-level increase from a base offense level of level 28 to level 33 for attempted first degree murder mirrors the five-level increase for second degree murder from offense level of level 33 to level 38 and maintains the five-level difference that exists between the two. The amendment increases the base offense levels in the guidelines for §§ 2A1.2, 2A1.3 (Voluntary Manslaughter), 2A1.5 (Conspiracy or Solicitation to Commit Murder), and 2A2.1.
Additionally, the amendment adds a third alternative base offense level in § 2A1.4 (Involuntary Manslaughter) of level 22 for reckless involuntary manslaughter offenses that involved the reckless operation of a means of transportation. This new offense level completes work undertaken in the previous amendment cycle to address disparities between federal and state sentences for vehicular manslaughter and to account for the 1994 increase in the statutory maximum term of imprisonment from three to six years. The new alternative offense level focusing on the reckless operation of a means of transportation addresses concerns raised by some members of Congress and comports with a recommendation from the Commission's Native American Advisory Group that vehicular manslaughter involving alcohol or drugs should be sentenced at offense level 22. The amendment also adds a special instruction to apply § 3D1.2 (Groups of Closely Related Counts) as if there had been a separate count of conviction for each victim in cases in which more than one victim died. The purpose of the instruction is to ensure an incremental increase in punishment for single count offenses involving multiple victims.
Second, this amendment makes a number of changes to the assault guidelines and the Chapter Three adjustment relating to official victims, to implement the congressional directive and the changes in statutory maximum terms of imprisonment in the 21st
The amendment restructures § 3A1.2 (Official Victim) and provides a two-tiered adjustment. The amendment maintains the three-level adjustment for offenses motivated by the status of the official victim, but increases the adjustment to six levels if that defendant's offense guideline was from Chapter Two, Part A (Offenses Against the Person). For example, a threat against a federal judge sentenced pursuant to § 2A6.1 (Threatening or Harassing Communications) that is calculated at base offense level 12 could have received, before this amendment, a three-level enhancement under § 3A1.2, which would have resulted in an adjusted offense level of level 15 and a guideline range of 18 to 24 months. Under this amendment, the defendant could receive a six-level adjustment, resulting in an enhanced offense level of level 18 and a guideline range of 27 to 33 months. The six level enhancement also applies to assaultive conduct against law enforcement officers or prison officials if the defendant committed the assault in a manner creating a substantial risk of serious bodily injury. This increase comports with the directive in the Act to “ensure punishment at or near the maximum penalty for the most egregious conduct covered by the offense” for offenses against federal officers, officials and employees.
2.
Section 2A3.1(b)(1) is amended by striking “was committed by the means set forth” and inserting “involved conduct described”.
Section 2A3.1(b)(6) is amended by striking “Internet-access device” and inserting “interactive computer service”.
Section 2A3.1(c) is amended in the heading by striking “Cross Reference” and inserting “Cross References”.
Section 2A3.1(c)(1) is amended by inserting “, if the resulting offense level is greater than that determined above” after “Murder)”.
Section 2A3.1(c) is amended by adding at the end the following:
“(2) If the offense involved causing, transporting, permitting, or offering or seeking by notice or advertisement, a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, apply § 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production), if the resulting offense level is greater than that determined above.”.
Section 2A3.1(d)(1) is amended by striking “a correctional facility and the victim was a corrections employee” and inserting “the custody or control of a prison or other correctional facility and the victim was a prison official”; and by striking “(a)” and inserting “(c)(2)”.
The Commentary to § 2A3.1 captioned “Application Notes” is amended by striking Notes 1 through 3 and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘Abducted’, ‘permanent or life-threatening bodily injury’, and ‘serious bodily injury’ have the meaning given those terms in Application Note 1 of the Commentary to § 1B1.1 (Application Instructions). However, for purposes of this guideline, “serious bodily injury” means conduct other than criminal sexual abuse, which already is taken into account in the base offense level under subsection (a).
‘Custody or control’ and ‘prison official’ have the meaning given those terms in Application Note 4 of the Commentary to § 3A1.2 (Official Victim).
‘Child pornography’ has the meaning given that term in 18 U.S.C. § 2256(8).
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Distribution’ means any act, including possession with intent to distribute, production, transportation, and advertisement, related to the transfer of material involving the sexual exploitation of a minor. Accordingly, distribution includes posting material involving the sexual exploitation of a minor on a website for public viewing, but does not include the mere solicitation of such material by a defendant.
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
‘Minor’ means (A) an individual who had not attained the age of 18 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 18 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 18 years.
‘Participant’ has the meaning given that term in Application Note 1 of the Commentary to § 3B1.1 (Aggravating Role).
‘Prohibited sexual conduct’ (A) means any sexual activity for which a person can be charged with a criminal offense; (B) includes the production of child pornography; and (C) does not include trafficking in, or possession of, child pornography.
‘Victim’ includes an undercover law enforcement officer.
2. Application of Subsection (b)(1).—For purposes of subsection (b)(1), ‘conduct described in 18 U.S.C. § 2241(a) or (b)’ is: (i) using force against the victim; (ii) threatening or placing the victim in fear that any person will be subject to death, serious bodily injury, or kidnapping; (iii) rendering the victim unconscious; or (iv) administering by force or threat of force, or without the knowledge or permission of the victim, a drug, intoxicant, or other similar
3. Application of Subsection (b)(3).—
(A) Care, Custody, or Supervisory Control.—Subsection (b)(3) is to be construed broadly and includes offenses involving a victim less than 18 years of age entrusted to the defendant, whether temporarily or permanently. For example, teachers, day care providers, baby-sitters, or other temporary caretakers are among those who would be subject to this enhancement. In determining whether to apply this enhancement, the court should look to the actual relationship that existed between the defendant and the minor and not simply to the legal status of the defendant-minor relationship.
(B) Inapplicability of Chapter Three Adjustment.—If the enhancement in subsection (b)(3) applies, do not apply § 3B1.3 (Abuse of Position of Trust or Use of Special Skill).”.
The Commentary to § 2A3.1 captioned “Application Notes” is amended in Note 4 by inserting before “The enhancement” the following:
“Application of Subsection (b)(6).—
(A) Misrepresentation of Participant's Identity.—”;
“(B) Use of a Computer or Interactive Computer Service.—Subsection (b)(6)(B) provides an enhancement if a computer or an interactive computer service was used to (i) persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct; or (ii) facilitate transportation or travel, by a minor or a participant, to engage in prohibited sexual conduct. Subsection (b)(6)(B) is intended to apply only to the use of a computer or an interactive computer service to communicate directly with a minor or with a person who exercises custody, care, or supervisory control of the minor. Accordingly, the enhancement would not apply to the use of a computer or an interactive computer service to obtain airline tickets for the minor from an airline's Internet site.”.
The Commentary to § 2A3.1 captioned “Application Notes” is amended by redesignating Note 5 as Note 6; and by inserting after Note 4 the following:
“5. Application of Subsection (c)(1).—
(A) In General.—The cross reference in subsection (c)(1) is to be construed broadly and includes all instances where the offense involved employing, using, persuading, inducing, enticing, coercing, transporting, permitting, or offering or seeking by notice or advertisement, a minor to engage in sexually explicit conduct for the purpose of producing any visual depiction of such conduct.
(B) Definition.—For purposes of subsection (c)(1), ‘sexually explicit conduct’ has the meaning given that term in 18 U.S.C. § 2256(2).”.
The Commentary to § 2A3.1 captioned “Application Notes” is amended in Note 6, as redesignated by this amendment, by inserting “Upward Departure Provision.”—before “If a victim”.
Section 2A3.2 is amended by striking subsection (a) and inserting the following:
“(a) Base Offense Level: 18”.
Section 2A3.2(b)(1) is amended by striking “victim” and inserting “minor”; and by striking “2 levels” and inserting “4 levels”.
Section 2A3.2(b) is amended by striking subdivisions (2) through (4) and inserting the following:
“(2) If (A) subsection (b)(1) does not apply; and (B)(i) the offense involved the knowing misrepresentation of a participant's identity to persuade, induce, entice, or coerce the minor to engage in prohibited sexual conduct; or (ii) a participant otherwise unduly influenced the minor to engage in prohibited sexual conduct, increase by 4 levels.
(3) If a computer or an interactive computer service was used to persuade, induce, entice, or coerce the minor to engage in prohibited sexual conduct, increase by 2 levels.”.
The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 1 by inserting after “Definitions.—For purposes of this guideline:” the following:
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
‘Minor’ means (A) an individual who had not attained the age of 16 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 16 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 16 years.”;
The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 2 by striking “Custody, Care, and Supervisory Control Enhancement.—Subsection (b)(1)” and inserting the following:
“Custody, Care, or Supervisory Control Enhancement.—
(A) In General.—Subsection (b)(1)”;
“(B) Inapplicability of Chapter Three Adjustment.—If the enhancement in subsection (b)(1) applies, do not apply subsection (b)(2) or § 3B1.3 (Abuse of Position of Trust or Use of Special Skill).”.
The Commentary to § 2A3.2 captioned “Application Notes” is amended by striking Notes 3 through 5 and inserting the following:
“3. Application of Subsection (b)(2).—
(A) Misrepresentation of Identity.—The enhancement in subsection (b)(2)(B)(i) applies in cases involving the misrepresentation of a participant's identity to persuade, induce, entice, or coerce the minor to engage in prohibited sexual conduct. Subsection (b)(2)(B)(i) is intended to apply only to misrepresentations made directly to the minor or to a person who exercises custody, care, or supervisory control of the minor. Accordingly, the enhancement in subsection (b)(2)(B)(i) would not apply to a misrepresentation made by a participant to an airline representative in the course of making travel arrangements for the minor.
The misrepresentation to which the enhancement in subsection (b)(2)(B)(i) may apply includes misrepresentation of a participant's name, age, occupation, gender, or status, as long as the misrepresentation was made with the intent to persuade, induce, entice, or coerce the minor to engage in prohibited sexual conduct. Accordingly, use of a computer screen name, without such intent, would not be a sufficient basis for application of the enhancement.
(B) Undue Influence.—In determining whether subsection (b)(2)(B)(ii) applies, the court should closely consider the facts of the case to determine whether a participant's influence over the minor compromised the voluntariness of the minor's behavior.
In a case in which a participant is at least 10 years older than the minor, there shall be a rebuttable presumption, for purposes of subsection (b)(2)(B)(ii), that such participant unduly influenced the minor to engage in prohibited sexual conduct. In such a case, some degree of
4. Application of Subsection (b)(3).—Subsection (b)(3) provides an enhancement if a computer or an interactive computer service was used to persuade, induce, entice, or coerce the minor to engage in prohibited sexual conduct. Subsection (b)(3) is intended to apply only to the use of a computer or an interactive computer service to communicate directly with the minor or with a person who exercises custody, care, or supervisory control of the minor.”.
The Commentary to § 2A3.2 captioned “Application Notes” is amended by redesignating Notes 6 and 7 as Notes 5 and 6, respectively.
The Commentary to § 2A3.2 captioned “Background” is amended by striking “or chapter 117 of title 18, United States Code”; by striking “victim” each place it appears and inserting “minor”; and by striking “victim's” and inserting “minor's”.
Section 2A3.3(a) is amended by striking “9” and inserting “12”.
Section 2A3.3(b)(1) is amended by striking “(A)”; and by striking “; or (B) facilitate transportation or travel, by a minor or a participant, to engage in prohibited sexual conduct”.
Section 2A3.3(b)(2) is amended by striking “(A)”; by striking “; or (B) facilitate transportation or travel, by a minor or a participant, to engage in prohibited sexual conduct”; and by striking “Internet-access device” and inserting “interactive computer service”.
The Commentary to § 2A3.3 captioned “Application Notes” is amended in Note 1 by striking “For purposes of this guideline—and inserting the following:
“Definitions.”—For purposes of this guideline:
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).”.
The Commentary to § 2A3.3 captioned “Application Notes” is amended by striking Notes 2 and 3 and inserting the following:
“2. Application of Subsection (b)(1).—The enhancement in subsection (b)(1) applies in cases involving the misrepresentation of a participant's identity to persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct. Subsection (b)(1) is intended to apply only to misrepresentations made directly to a minor or to a person who exercises custody, care, or supervisory control of the minor.
The misrepresentation to which the enhancement in subsection (b)(1) may apply includes misrepresentation of a participant's name, age, occupation, gender, or status, as long as the misrepresentation was made with the intent to persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct. Accordingly, use of a computer screen name, without such intent, would not be a sufficient basis for application of the enhancement.
3. Application of Subsection (b)(2).—Subsection (b)(2) provides an enhancement if a computer or an interactive computer service was used to persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct. Subsection (b)(2) is intended to apply only to the use of a computer or an interactive computer service to communicate directly with a minor or with a person who exercises custody, care, or supervisory control of the minor.”.
Section 2A3.4(a) is amended by striking subdivisions (1) through (3) and inserting the following:
“(1) 20, if the offense involved conduct described in 18 U.S.C. § 2241(a) or (b);
(2) 16, if the offense involved conduct described in 18 U.S.C. § 2242; or
(3) 12, otherwise.”.
Section 2A3.4(b)(1) is amended by striking “16” each place it appears and inserting “20”.
Section 2A3.4(b) is amended by striking subdivisions (4) through (6) and inserting the following:
“(4) If the offense involved the knowing misrepresentation of a participant's identity to persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct, increase by 2 levels.
(5) If a computer or an interactive computer service was used to persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct, increase by 2 levels.”.
The Commentary to § 2A3.4 captioned “Application Notes” is amended in Note 1 by striking “For purposes of this guideline—” and all the follows through “18 years.” and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
‘Minor’ means (A) an individual who had not attained the age of 18 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 18 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 18 years.”.
The Commentary to § 2A3.4 captioned “Application Notes” is amended by striking Notes 2 and 3 and inserting the following:
“2. Application of Subsection (a)(1).—For purposes of subsection (a)(1), ‘conduct described in 18 U.S.C. § 2241(a) or (b)’ is: (i) using force against the victim; (ii) threatening or placing the victim in fear that any person will be subjected to death, serious bodily injury, or kidnapping; (iii) rendering the victim unconscious; or (iv) administering by force or threat of force, or without the knowledge or permission of the victim, a drug, intoxicant, or other similar substance and thereby substantially impairing the ability of the victim to appraise or control conduct.
3. Application of Subsection (a)(2).—For purposes of subsection (a)(2), ‘conduct described in 18 U.S.C. § 2242’ is: (i) threatening or placing the victim in fear (other than by threatening or placing the victim in fear that any person will be subjected to death, serious bodily injury, or kidnapping); or (ii) victimizing an individual who is incapable of appraising the nature of the conduct or physically incapable of declining participation in, or communicating unwillingness to engage in, the sexual act.”.
The Commentary to § 2A3.4 captioned “Application Notes” is amended in Note 4 by inserting before “Subsection (b)(3)” the following:
“Application of Subsection (b)(3).—
(A) Custody, Care, or Supervisory Control.—”;
“(B) Inapplicability of Chapter Three Adjustment.—If the enhancement in subsection (b)(3) applies, do not apply § 3B1.3 (Abuse of Position of Trust or Use of Special Skill).”.
The Commentary to § 2A3.4 captioned “Application Notes” is amended by striking Note 5; and by redesignating Notes 6 and 7 as Notes 5 and 6, respectively.
The Commentary to § 2A3.4 captioned “Application Notes” is amended in Note 5, as redesignated by this amendment, by inserting “Misrepresentation of a Participant's Identity.—” before “The enhancement”; by striking “(A)” each place it appears; and by striking “; or (B) facilitate
The Commentary to § 2A3.4 captioned “Application Notes” is amended in Note 6, as redesignated by this amendment, by striking the text and inserting the following:
“Application of Subsection (b)(5).—Subsection (b)(5) provides an enhancement if a computer or an interactive computer service was used to persuade, induce, entice, or coerce a minor to engage in prohibited sexual conduct. Subsection (b)(5) is intended to apply only to the use of a computer or an interactive computer service to communicate directly with a minor or with a person who exercises custody, care, or supervisory control of the minor.”.
The Commentary to § 2A3.4 captioned “Background” is amended by striking “For cases involving” and all that follows through “level 6.”.
Chapter Two, Part G, Subpart 1 is amended by striking § 2G1.1 and its accompanying commentary and inserting the following:
Ҥ 2G1.1. Promoting a Commercial Sex Act or Prohibited Sexual Conduct with an Individual Other than a Minor
(a) Base Offense Level: 14
(b) Specific Offense Characteristic
(1) If the offense involved fraud or coercion, increase by 4 levels.
(c) Cross Reference
(1) If the offense involved conduct described in 18 U.S.C. § 2241(a) or (b) or 18 U.S.C. § 2242, apply § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse).
(d) Special Instruction.
(1) If the offense involved more than one victim, Chapter Three, Part D (Multiple Counts) shall be applied as if the promoting of a commercial sex act or prohibited sexual conduct in respect to each victim had been contained in a separate count of conviction.
1. Definitions.—For purposes of this guideline:
‘Commercial sex act’ has the meaning given that term in 18 U.S.C. § 1591(c)(1).
‘Prohibited sexual conduct’ has the meaning given that term in Application Note 1 of § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse).
‘Promoting a commercial sex act’ means persuading, inducing, enticing, or coercing a person to engage in a commercial sex act, or to travel to engage in, a commercial sex act.
‘Victim’ means a person transported, persuaded, induced, enticed, or coerced to engage in, or travel for the purpose of engaging in, a commercial sex act or prohibited sexual conduct, whether or not the person consented to the commercial sex act or prohibited sexual conduct. Accordingly, “victim” may include an undercover law enforcement officer.
2. Application of Subsection (b)(1).—Subsection (b)(1) provides an enhancement for fraud or coercion that occurs as part of the offense and anticipates no bodily injury. If bodily injury results, an upward departure may be warranted.
3. Application of Chapter Three Adjustment.—For the purposes of § 3B1.1 (Aggravating Role), a victim, as defined in this guideline, is considered a participant only if that victim assisted in the promoting of a commercial sex act or prohibited sexual conduct in respect to another victim.
4. Application of Subsection (c)(1).—
(A) Conduct Described in 18 U.S.C. § 2241(a) or (b).—For purposes of subsection (c)(1), conduct described in 18 U.S.C. § 2241(a) or (b) is: (i) using force against the victim; (ii) threatening or placing the victim in fear that any person will be subject to death, serious bodily injury, or kidnapping; (iii) rendering the victim unconscious; or (iv) administering by force or threat of force, or without the knowledge or permission of the victim, a drug, intoxicant, or other similar substance and thereby substantially impairing the ability of the victim to appraise or control conduct. This provision would apply, for example, if any dangerous weapon was used or brandished, or in a case in which the ability of the victim to appraise or control conduct was substantially impaired by drugs or alcohol.
(B) Conduct Described in 18 U.S.C. § 2242.—For purposes of subsection (c)(1), conduct described in 18 U.S.C. § 2242 is: (i) threatening or placing the victim in fear (other than by threatening or placing the victim in fear that any person will be subject to death, serious bodily injury, or kidnapping); or (ii) victimizing a victim who is incapable of appraising the nature of the conduct or who is physically incapable of declining participation in, or communicating unwillingness to engage in, the sexual act.
5. Special Instruction at Subsection (d)(1).—For the purposes of Chapter Three, Part D (Multiple Counts), each person transported, persuaded, induced, enticed, or coerced to engage in, or travel to engage in, a commercial sex act or prohibited sexual conduct is to be treated as a separate victim. Consequently, multiple counts involving more than one victim are not to be grouped together under § 3D1.2 (Groups of Closely Related Counts). In addition, subsection (d)(1) directs that if the relevant conduct of an offense of conviction includes the promoting of a commercial sex act or prohibited sexual conduct in respect to more than one victim, whether specifically cited in the count of conviction, each such victim shall be treated as if contained in a separate count of conviction.
6. Upward Departure Provision.—If the offense involved more than ten victims, an upward departure may be warranted.
This guideline also covers offenses under section 1591 of title 18, United States Code, that involve recruiting or transporting a person, other than a minor, in interstate commerce knowing that force, fraud, or coercion will be used to cause the person to engage in a commercial sex act.
Offenses of promoting prostitution or prohibited sexual conduct in which a minor victim is involved are to be sentenced under § 2G1.3 (Promoting a Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Transportation of Minors to Engage in a Commercial Sex Act or Prohibited Sexual Conduct; Travel to Engage in Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Sex Trafficking of Children; Use of Interstate Facilities to Transport Information about a Minor).”.
Chapter Two, Part G, Subpart 1, is amended by adding at the end the
Ҥ 2G1.3. Promoting a Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Transportation of Minors to Engage in a Commercial Sex Act or Prohibited Sexual Conduct; Travel to Engage in Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Sex Trafficking of Children; Use of Interstate Facilities to Transport Information about a Minor
(a) Base Offense Level: 24
(b) Specific Offense Characteristics
(1) If (A) the defendant was a parent, relative, or legal guardian of the minor; or (B) the minor was otherwise in the custody, care, or supervisory control of the defendant, increase by 2 levels.
(2) If (A) the offense involved the knowing misrepresentation of a participant's identity to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in prohibited sexual conduct; or (B) a participant otherwise unduly influenced a minor to engage in prohibited sexual conduct, increase by 2 levels.
(3) If the offense involved the use of a computer or an interactive computer service to (A) persuade, induce, entice, coerce, or facilitate the travel of, the minor to engage in prohibited sexual conduct; or (B) entice, encourage, offer, or solicit a person to engage in prohibited sexual conduct with the minor, increase by 2 levels.
(4) If the offense involved (A) the commission of a sex act or sexual contact; or (B) a commercial sex act, increase by 2 levels.
(5) If the offense involved a minor who had not attained the age of 12 years, increase by 8 levels.
(c) Cross References
(1) If the offense involved causing, transporting, permitting, or offering or seeking by notice or advertisement, a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, apply § 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production), if the resulting offense level is greater than that determined above.
(2) If a minor was killed under circumstances that would constitute murder under 18 U.S.C. § 1111 had such killing taken place within the territorial or maritime jurisdiction of the United States, apply § 2A1.1 (First Degree Murder), if the resulting offense level is greater than that determined above.
(3) If the offense involved conduct described in 18 U.S.C. § 2241 or § 2242, apply § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse), if the resulting offense level is greater than that determined above. If the offense involved interstate travel with intent to engage in a sexual act with a minor who had not attained the age of 12 years, or knowingly engaging in a sexual act with a minor who had not attained the age of 12 years, § 2A3.1 shall apply, regardless of the “consent” of the minor.
(d) Special Instruction
(1) If the offense involved more than one minor, Chapter Three, Part D (Multiple Counts) shall be applied as if the persuasion, enticement, coercion, travel, or transportation to engage in a commercial sex act or prohibited sexual conduct of each victim had been contained in a separate count of conviction.
1. Definitions.—For purposes of this guideline:
‘Commercial sex act’ has the meaning given that term in 18 U.S.C. § 1591(c)(1).
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Illicit sexual conduct’ has the meaning given that term in 18 U.S.C. § 2423(f).
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
‘Minor’ means (A) an individual who had not attained the age of 18 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 18 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 18 years.
‘Participant’ has the meaning given that term in Application Note 1 of the Commentary to § 3B1.1 (Aggravating Role).
‘Prohibited sexual conduct’ has the meaning given that term in Application Note 1 of the Commentary to § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse).
‘Sexual act’ has the meaning given that term in 18 U.S.C. § 2246(2).
‘Sexual contact’ has the meaning given that term in 18 U.S.C. § 2246(3).
2. Application of Subsection (b)(1).—
(A) Custody, Care, or Supervisory Control.—Subsection (b)(1) is intended to have broad application and includes offenses involving a victim less than 18 years of age entrusted to the defendant, whether temporarily or permanently. For example, teachers, day care providers, baby-sitters, or other temporary caretakers are among those who would be subject to this enhancement. In determining whether to apply this enhancement, the court should look to the actual relationship that existed between the defendant and the minor and not simply to the legal status of the defendant-minor relationship.
(B) Inapplicability of Chapter Three Adjustment.—If the enhancement under subsection (b)(1) applies, do not apply § 3B1.3 (Abuse of Position of Trust or Use of Special Skill).
3. Application of Subsection (b)(2).—
(A) Misrepresentation of Participant's Identity.—The enhancement in subsection (b)(2)(A) applies in cases involving the misrepresentation of a participant's identity to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in prohibited sexual conduct. Subsection (b)(2)(A) is intended to apply only to misrepresentations made directly to a minor or to a person who exercises custody, care, or supervisory control of the minor. Accordingly, the enhancement in subsection (b)(2)(A) would not apply to a misrepresentation made by a participant to an airline representative in the course of making travel arrangements for the minor.
The misrepresentation to which the enhancement in subsection (b)(2)(A) may apply includes misrepresentation of a participant's name, age, occupation, gender, or status, as long as the misrepresentation was made with the intent to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in prohibited sexual conduct. Accordingly, use of a computer screen name, without such intent, would not be a sufficient basis for application of the enhancement.
(B) Undue Influence.—In determining whether subsection (b)(2)(B) applies, the court should closely consider the facts of the case to determine whether a participant's influence over the minor compromised the voluntariness of the minor's behavior.
In a case in which a participant is at least 10 years older than the minor, there shall be a rebuttable presumption, for purposes of subsection (b)(2)(B), that
4. Application of Subsection (b)(3).—Subsection (b)(3) is intended to apply only to the use of a computer or an interactive computer service to communicate directly with a minor or with a person who exercises custody, care, or supervisory control of the minor. Accordingly, the enhancement in subsection (b)(3) would not apply to the use of a computer or an interactive computer service to obtain airline tickets for the minor from an airline's Internet site.
5. Application of Subsection (c).—
(A) Application of Subsection (c)(1).—The cross reference in subsection (c)(1) is to be construed broadly and includes all instances in which the offense involved employing, using, persuading, inducing, enticing, coercing, transporting, permitting, or offering or seeking by notice, advertisement or other method, a minor to engage in sexually explicit conduct for the purpose of producing any visual depiction of such conduct. For purposes of subsection (c)(1), “sexually explicit conduct” has the meaning given that term in 18 U.S.C. § 2256(2).
(B) Application of Subsection (c)(3).—For purposes of subsection (c)(3):
(i) Conduct described in 18 U.S.C. § 2241(a) or (b) is: (I) using force against the minor; (II) threatening or placing the minor in fear that any person will be subject to death, serious bodily injury, or kidnapping; (III) rendering the minor unconscious; or (IV) administering by force or threat of force, or without the knowledge or permission of the minor, a drug, intoxicant, or other similar substance and thereby substantially impairing the ability of the minor to appraise or control conduct. This provision would apply, for example, if any dangerous weapon was used or brandished, or in a case in which the ability of the minor to appraise or control conduct was substantially impaired by drugs or alcohol.
(ii) Conduct described in 18 U.S.C. § 2241(c) is: (I) interstate travel with intent to engage in a sexual act with a minor who has not attained the age of 12 years; (II) knowingly engaging in a sexual act with a minor who has not attained the age of 12 years; or (III) knowingly engaging in a sexual act under the circumstances described in 18 U.S.C. § 2241(a) and (b) with a minor who has attained the age of 12 years but has not attained the age of 16 years (and is at least 4 years younger than the person so engaging).
(iii)Conduct described in 18 U.S.C. § 2242 is: (I) threatening or placing the minor in fear (other than by threatening or placing the minor in fear that any person will be subject to death, serious bodily injury, or kidnapping); or (II) victimizing a minor who is incapable of appraising the nature of the conduct or who is physically incapable of declining participation in, or communicating unwillingness to engage in, the sexual act.
6. Application of Subsection (d)(1).—For the purposes of Chapter Three, Part D (Multiple Counts), each minor transported, persuaded, induced, enticed, or coerced to engage in, or travel to engage in, a commercial sex act or prohibited sexual conduct is to be treated as a separate minor. Consequently, multiple counts involving more than one minor are not to be grouped together under § 3D1.2 (Groups of Closely Related Counts). In addition, subsection (d)(1) directs that if the relevant conduct of an offense of conviction includes travel or transportation to engage in a commercial sex act or prohibited sexual conduct in respect to more than one minor, whether specifically cited in the count of conviction, each such minor shall be treated as if contained in a separate count of conviction.
7. Upward Departure Provision.—If the offense involved more than ten minors, an upward departure may be warranted.
Section 2G2.1(a) is amended by striking “27” and inserting “32”.
Section 2G2.1(b) is amended in subdivision (1) by striking “victim” and inserting “minor”; by redesignating subdivisions (2) and (3) as subdivisions (5) and (6), respectively; and by inserting after subdivision (1) the following:
“(2) (Apply the greater) If the offense involved—
(A) the commission of a sexual act or sexual contact, increase by 2 levels; or
(B) (i) the commission of a sexual act; and (ii) conduct described in 18 U.S.C. § 2241(a) or (b), increase by 4 levels.
(3) If the offense involved distribution, increase by 2 levels.
(4) If the offense involved material that portrays sadistic or masochistic conduct or other depictions of violence, increase by 4 levels.”.
Section 2G2.1(b)(6), as redesignated by this amendment, is amended by striking “Internet-access device” and inserting “interactive computer service”.
Section 2G2.1 is amended by redesignating subsection (c) as subsection (d); and by inserting after subsection (b) the following:
“(c) Cross Reference
(1) If the victim was killed in circumstances that would constitute murder under 18 U.S.C. § 1111 had such killing taken place within the territorial or maritime jurisdiction of the United States, apply § 2A1.1 (First Degree Murder), if the resulting offense level is greater than that determined above.”.
The Commentary to § 2G2.1 captioned “Statutory Provisions” is amended by striking “(a), (b), (c)(1)(B), 2260” and inserting “, 2260(b)”.
The Commentary to § 2G2.1 captioned “Application Notes” is amended by striking Notes 1 through 5 and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Distribution’ means any act, including possession with intent to distribute, production, advertisement, and transportation, related to the transfer of material involving the sexual exploitation of a minor. Accordingly, distribution includes posting material involving the sexual exploitation of a minor on a website for public viewing but does not include the mere solicitation of such material by a defendant.
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
‘Minor’ means (A) an individual who had not attained the age of 18 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 18 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 18 years.
‘Sexually explicit conduct’ has the meaning given that term in 18 U.S.C. § 2256(2).
2. Application of Subsection (b)(2).—For purposes of subsection (b)(2):
‘Conduct described in 18 U.S.C. § 2241(a) or (b)’ is: (i) using force against the minor; (ii) threatening or placing the minor in fear that any person will be subject to death, serious bodily injury, or kidnapping; (iii) rendering the minor unconscious; or (iv) administering by force or threat of force, or without the knowledge or permission of the minor, a drug, intoxicant, or other similar substance and thereby substantially impairing the ability of the minor to appraise or control conduct. This provision would apply, for example, if any dangerous weapon was used or brandished, or in a case in which the ability of the minor to appraise or control conduct was substantially impaired by drugs or alcohol.
‘Sexual act’ has the meaning given that term in 18 U.S.C. § 2246(2).
‘Sexual contact’ has the meaning given that term in 18 U.S.C. § 2246(3).
3. Application of Subsection (b)(5).—
(A) In General.—Subsection (b)(5) is intended to have broad application and includes offenses involving a minor entrusted to the defendant, whether temporarily or permanently. For example, teachers, day care providers, baby-sitters, or other temporary caretakers are among those who would be subject to this enhancement. In determining whether to apply this adjustment, the court should look to the actual relationship that existed between the defendant and the minor and not simply to the legal status of the defendant-minor relationship.
(B) Inapplicability of Chapter Three Adjustment.—If the enhancement in subsection (b)(5) applies, do not apply § 3B1.3 (Abuse of Position of Trust or Use of Special Skill).
4. Application of Subsection (b)(6).—
(A) Misrepresentation of Participant's Identity.—The enhancement in subsection (b)(6)(A) applies in cases involving the misrepresentation of a participant's identity to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in sexually explicit conduct for the purpose of producing sexually explicit material. Subsection (b)(6)(A) is intended to apply only to misrepresentations made directly to a minor or to a person who exercises custody, care, or supervisory control of the minor. Accordingly, the enhancement in subsection (b)(6)(A) would not apply to a misrepresentation made by a participant to an airline representative in the course of making travel arrangements for the minor.
The misrepresentation to which the enhancement in subsection (b)(6)(A) may apply includes misrepresentation of a participant's name, age, occupation, gender, or status, as long as the misrepresentation was made with the intent to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in sexually explicit conduct for the purpose of producing sexually explicit material. Accordingly, use of a computer screen name, without such intent, would not be a sufficient basis for application of the enhancement.
(B) Use of a Computer or an Interactive Computer Service.—Subsection (b)(6)(B) provides an enhancement if the offense involved the use of a computer or an interactive computer service to persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in sexually explicit conduct for the purpose of producing sexually explicit material or otherwise to solicit participation by a minor in such conduct for such purpose. Subsection (b)(6)(B) is intended to apply only to the use of a computer or an interactive computer service to communicate directly with a minor or with a person who exercises custody, care, or supervisory control of the minor. Accordingly, the enhancement would not apply to the use of a computer or an interactive computer service to obtain airline tickets for the minor from an airline's Internet site.
5. Application of Subsection (d)(1).—For the purposes of Chapter Three, Part D (Multiple Counts), each minor exploited is to be treated as a separate minor. Consequently, multiple counts involving the exploitation of different minors are not to be grouped together under § 3D1.2 (Groups of Closely Related Counts). Subsection (d)(1) directs that if the relevant conduct of an offense of conviction includes more than one minor being exploited, whether specifically cited in the count of conviction or not, each such minor shall be treated as if contained in a separate count of conviction.”.
The Commentary to § 2G2.1 captioned “Application Notes” is amended in Note 6 by striking “victims” and inserting “minors”.
Chapter Two, Part G, Subpart 2, is amended by striking §§ 2G2.2 and 2G2.4 and their accompanying commentary and inserting after § 2G2.1 the following:
Ҥ 2G2.2. Trafficking in Material Involving the Sexual Exploitation of a Minor; Receiving, Transporting, Shipping, Soliciting, or Advertising Material Involving the Sexual Exploitation of a Minor; Possessing Material Involving the Sexual Exploitation of a Minor with Intent to Traffic; Possessing Material Involving the Sexual Exploitation of a Minor
(a) Base Offense Level:
(1) 18, if the defendant is convicted of 18 U.S.C. § 1466A(b), § 2252(a)(4), or § 2252A(a)(5).
(2) 22, otherwise.
(b) Specific Offense Characteristics
(1) If (A) subsection (a)(2) applies; (B) the defendant's conduct was limited to the receipt or solicitation of material involving the sexual exploitation of a minor; and (C) the defendant did not intend to traffic in, or distribute, such material, decrease by 2 levels.
(2) If the material involved a prepubescent minor or a minor who had not attained the age of 12 years, increase by 2 levels.
(3) (Apply the greatest) If the offense involved:
(A) Distribution for pecuniary gain, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to the retail value of the material, but by not less than 5 levels.
(B) Distribution for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain, increase by 5 levels.
(C) Distribution to a minor, increase by 5 levels.
(D) Distribution to a minor that was intended to persuade, induce, entice, or coerce the minor to engage in any illegal activity, other than illegal activity covered under subdivision (E), increase by 6 levels.
(E) Distribution to a minor that was intended to persuade, induce, entice, coerce, or facilitate the travel of, the minor to engage in prohibited sexual conduct, increase by 7 levels.
(F) Distribution other than distribution described in subdivisions (A) through (E), increase by 2 levels.
(4) If the offense involved material that portrays sadistic or masochistic conduct or other depictions of violence, increase by 4 levels.
(5) If the defendant engaged in a pattern of activity involving the sexual abuse or exploitation of a minor, increase by 5 levels.
(6) If the offense involved the use of a computer or an interactive computer service for the possession, transmission, receipt, or distribution of the material, increase by 2 levels.
(7) If the offense involved—
(A) at least 10 images, but fewer than 150, increase by 2 levels;
(B) at least 150 images, but fewer than 300, increase by 3 levels;
(C) at least 300 images, but fewer than 600, increase by 4 levels; and
(D) 600 or more images, increase by 5 levels.
(c) Cross Reference
(1) If the offense involved causing, transporting, permitting, or offering or seeking by notice or advertisement, a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, apply § 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production), if the resulting offense level is greater than that determined above.
1. Definitions.—For purposes of this guideline:
“Computer” has the meaning given that term in 18 U.S.C. § 1030(e)(1).
“Distribution” means any act, including possession with intent to distribute, production, advertisement, and transportation, related to the transfer of material involving the sexual exploitation of a minor. Accordingly, distribution includes posting material involving the sexual exploitation of a minor on a website for public viewing but does not include the mere solicitation of such material by a defendant.
“Distribution for pecuniary gain” means distribution for profit.
“Distribution for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain” means any transaction, including bartering or other in-kind transaction, that is conducted for a thing of value, but not for profit. “Thing of value” means anything of valuable consideration. For example, in a case involving the bartering of child pornographic material, the “thing of value” is the child pornographic material received in exchange for other child pornographic material bartered in consideration for the material received.
“Distribution to a minor” means the knowing distribution to an individual who is a minor at the time of the offense.
“Interactive computer service” has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
“Minor” means (A) an individual who had not attained the age of 18 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 18 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 18 years.
“Pattern of activity involving the sexual abuse or exploitation of a minor” means any combination of two or more separate instances of the sexual abuse or sexual exploitation of a minor by the defendant, whether or not the abuse or exploitation (A) occurred during the course of the offense; (B) involved the same minor; or (C) resulted in a conviction for such conduct.
“Prohibited sexual conduct ” has the meaning given that term in Application Note 1 of the Commentary to § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse).
“Sexual abuse or exploitation” means any of the following: (A) conduct described in 18 U.S.C. § 2241, § 2242, § 2243, § 2251, § 2251A, § 2260(b), § 2421, § 2422, or § 2423; (B) an offense under state law, that would have been an offense under any such section if the offense had occurred within the special maritime or territorial jurisdiction of the United States; or (C) an attempt or conspiracy to commit any of the offenses under subdivisions (A) or (B). “Sexual abuse or exploitation” does not include possession, receipt, or trafficking in material relating to the sexual abuse or exploitation of a minor.
2. Application of Subsection (b)(4).—Subsection (b)(4) applies if the offense involved material that portrays sadistic or masochistic conduct or other depictions of violence, regardless of whether the defendant specifically intended to possess, receive, or distribute such materials.
3. Application of Subsection (b)(5).—A conviction taken into account under subsection (b)(5) is not excluded from consideration of whether that conviction receives criminal history points pursuant to Chapter Four, Part A (Criminal History).
4. Application of Subsection (b)(7).—
(A) Definition of “Images”.—“Images” means any visual depiction, as defined in 18 U.S.C. § 2256(5), that constitutes child pornography, as defined in 18 U.S.C. § 2256(8).
(B) Determining the Number of Images.—For purposes of determining the number of images under subsection (b)(7):
(i) Each photograph, picture, computer or computer-generated image, or any similar visual depiction shall be considered to be one image. If the number of images substantially underrepresents the number of minors depicted, an upward departure may be warranted.
(ii) Each video, video-clip, movie, or similar recording shall be considered to have 75 images. If the length of the recording is substantially more than 5 minutes, an upward departure may be warranted.
5. Application of Subsection (c)(1).—
(A) In General.—The cross reference in subsection (c)(1) is to be construed broadly and includes all instances where the offense involved employing, using, persuading, inducing, enticing, coercing, transporting, permitting, or offering or seeking by notice or advertisement, a minor to engage in sexually explicit conduct for the purpose of producing any visual depiction of such conduct.
(B) Definition.—“Sexually explicit conduct ” has the meaning given that term in 18 U.S.C. § 2256(2).
6. Upward Departure Provision.—If the defendant engaged in the sexual abuse or exploitation of a minor at any time (whether or not such abuse or exploitation occurred during the course of the offense or resulted in a conviction for such conduct) and subsection (b)(5) does not apply, an upward departure may be warranted. In addition, an upward departure may be warranted if the defendant received an enhancement under subsection (b)(5) but that enhancement does not adequately reflect the seriousness of the sexual abuse or exploitation involved.
Section 2G3.1 is amended in the heading by adding at the end “; Misleading Domain Names”.
Section 2G3.1(b)(1) is amended by redesignating subdivisions (D) and (E) as subdivisions (E) and (F), respectively; and by inserting after subdivision (C) the following:
“(D) Distribution to a minor that was intended to persuade, induce, entice, or coerce the minor to engage in any illegal activity, other than illegal activity covered under subdivision (E), increase by 6 levels.”;
Section 2G3.1(b) is amended by redesignating subdivision (2) as subdivision (4); and by inserting after subdivision (1) the following:
“(2) If the offense involved the use of a misleading domain name on the Internet with the intent to deceive a minor into viewing material on the Internet that is harmful to minors, increase by 2 levels.
(3) If the offense involved the use of a computer or an interactive computer service, increase by 2 levels.”.
The Commentary to § 2G3.1 captioned “Statutory Provisions” is amended by inserting”, 2252B” after “1470”.
The Commentary to § 2G3.1 captioned “Application Note” is amended by striking “Note” in the heading and inserting “Notes”; and by striking Application Note 1 and inserting the following:
“1. Definitions.—For purposes of this guideline:
‘Computer’ has the meaning given that term in 18 U.S.C. § 1030(e)(1).
‘Distribution’ means any act, including possession with intent to distribute, production, advertisement, and transportation, related to the transfer of obscene matter. Accordingly, distribution includes posting material involving the sexual exploitation of a minor on a website for public viewing but does not include the mere solicitation of such material by a defendant.
‘Distribution for pecuniary gain’ means distribution for profit.
‘Distribution for the receipt, or expectation of receipt, of a thing of value, but not for pecuniary gain’ means any transaction, including bartering or other in-kind transaction, that is conducted for a thing of value, but not for profit. ‘Thing of value’ means anything of valuable consideration.
‘Distribution to a minor’ means the knowing distribution to an individual who is a minor at the time of the offense.
‘Interactive computer service’ has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
‘Material that is harmful to minors’ has the meaning given that term in 18 U.S.C. § 2252B(d).
‘Minor’ means (A) an individual who had not attained the age of 18 years; (B) an individual, whether fictitious or not, who a law enforcement officer represented to a participant (i) had not attained the age of 18 years, and (ii) could be provided for the purposes of engaging in sexually explicit conduct; or (C) an undercover law enforcement officer who represented to a participant that the officer had not attained the age of 18 years.
‘Prohibited sexual conduct’ has the meaning given that term in Application Note 1 of the Commentary to § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse).
‘Sexually explicit conduct’ has the meaning given that term in 18 U.S.C. § 2256(2).
2. Inapplicability of Subsection (b)(3).—If the defendant is convicted of 18 U.S.C. § 2252B, subsection (b)(3) shall not apply.
3. Application of Subsection (b)(4).—Subsection (b)(4) applies if the offense involved material that portrays sadistic or masochistic conduct or other depictions of violence, regardless of whether the defendant specifically intended to possess, receive, or distribute such materials.”.
Section 3D1.2(d) is amended by striking “2G2.4” and inserting “2G3.1”.
Section 5B1.3(d)(7) is amended by striking “If the instant” and all that follows through “sex offenders.” and inserting the following:
“If the instant offense of conviction is a sex offense, as defined in Application Note 1 of the Commentary to § 5D1.2 (Term of Supervised Release)—
(A) A condition requiring the defendant to participate in a program approved by the United States Probation Office for the treatment and monitoring of sex offenders.
(B) A condition limiting the use of a computer or an interactive computer service in cases in which the defendant used such items.”.
Section 5D1.2 is amended by striking subsections (a) through (c) and inserting following:
“(a) Except as provided in subsections (b) and (c), if a term of supervised release is ordered, the length of the term shall be:
(1) At least three years but not more than five years for a defendant convicted of a Class A or B felony.
(2) At least two years but not more than three years for a defendant convicted of a Class C or D felony.
(3) One year for a defendant convicted of a Class E felony or a Class A misdemeanor.
(b) Notwithstanding subdivisions (a)(1) through (3), the length of the term of supervised release shall be not less than the minimum term of years specified for the offense under subdivisions (a)(1) through (3) and may be up to life, if the offense is—
(1) any offense listed in 18 U.S.C. § 2332b(g)(5)(B), the commission of which resulted in, or created a foreseeable risk of, death or serious bodily injury to another person; or
(2) a sex offense.
(c) The term of supervised release imposed shall be not less than any statutorily required term of supervised release.”.
Section 5D1.3(d)(7) is amended by striking “If the instant” and all that follows through “sex offenders.” and inserting the following:
“If the instant offense of conviction is a sex offense, as defined in Application Note 1 of the Commentary to § 5D1.2 (Term of Supervised Release)—
(A) A condition requiring the defendant to participate in a program approved by the United States Probation Office for the treatment and monitoring of sex offenders.
(B) A condition limiting the use of a computer or an interactive computer service in cases in which the defendant used such items.”.
Section 7B1.3(g) is amended by striking “Where” each place it appears and inserting “If”; and in subdivision (2) by striking “and the term of imprisonment imposed is less than the maximum term of imprisonment imposable upon revocation”.
The Commentary to § 7B1.3 captioned “Application Notes” is amended by striking “and imposition of less than the maximum imposable term of imprisonment” in Note 2; and by striking Note 6.
Appendix A (Statutory Index) is amended by inserting after the line referenced to 18 U.S.C. § 1466 the following:
First, the amendment consolidates §§ 2G2.2 (Trafficking in Material Involving the Sexual Exploitation of a
Section 103 of the PROTECT Act established five-year mandatory minimum terms of imprisonment for offenses related to trafficking and receipt of child pornography under 18 U.S.C. §§ 2252(a)(1)-(3) and 2252A(a)(1), (2), (3), (4) and (6). This section also increased the statutory maximum terms of imprisonment for these offenses from 15 years to 20 years. Furthermore, the PROTECT Act increased the statutory maximum penalty for possession offenses from five to ten years. As a result of these new mandatory minimum penalties and the increases in the statutory maxima for these offenses, the Commission increased the base offense level for these offenses.
The amendment provides two alternative base offense levels depending upon the statute of conviction. The base offense level is set at level 18 for a defendant convicted of the possession of child pornography under 18 U.S.C. § 2252(a)(4), 18 U.S.C. § 2252A(a)(5), or 18 U.S.C. § 1466A(b), and at level 22 for a defendant convicted of any other offense referenced to this guideline, primarily trafficking and receipt of child pornography. The Commission determined that a base offense level of level 22 is appropriate for trafficking offenses because, when combined with several specific offense characteristics which are expected to apply in almost every case (
The amendment also provides a new, six-level enhancement at § 2G2.2(b)(3)(D) for offenses that involve distribution to a minor with intent to persuade, induce, entice, or coerce the minor to engage in any illegal activity, other than sexual activity.
The amendment also makes a number of changes to the commentary at § 2G2.2, as follows. The amendment adds several definitions, including definitions of “computer,” “image,” and “interactive computer service,” to provide greater guidance for these terms and uniformity in application of the guideline. The amendment also broadens the “use of a computer” enhancement at § 2G2.2(b)(5) in two ways. First, the amendment expands the enhancement to include an “interactive computer service” (
The PROTECT Act directly amended §§ 2G2.2 and 2G2.4 to create a specific offense characteristic related to the number of child pornography images. That specific offense characteristic provides a graduated enhancement of two to five levels, depending on the number of images. However, the congressional amendment did not provide a definition of “image,” which raised questions regarding how to apply the specific offense characteristic. This amendment defines the term “image” and provides an instruction regarding how to apply the specific offense characteristic to videotapes. Application Note 4 states that an “image” means any visual depiction described in 18 U.S.C. § 2256(5) and (8) and instructs that each photograph, picture, computer or computer-generated image, or any similar visual depiction shall be considered one image. Furthermore, the application note provides that each video, video-clip, movie, or similar recording shall be considered to have 75 images for purposes of the specific offense characteristic. Application Note 4 also provides two possible grounds for an upward departure (if the number of images substantially under-represents the number of minors or if the length of the videotape or recording is substantially more than five minutes). Because the image specific offense characteristic created directly by Congress in the PROTECT Act essentially supercedes an earlier directive regarding a specific offense characteristic relating to the number of items (
In response to the increase in the use of undercover officers in child pornography investigations, the amendment expands the definition of “minor.” “Minor” is defined as (1) an
The amendment also makes clear that distribution includes advertising and posting material involving the sexual exploitation of a minor on a website for public viewing but does not include soliciting such material. In response to a circuit conflict, the amendment adds an application note to make clear that the specific offense characteristic for material portraying sadistic or masochistic conduct applies regardless of whether the defendant specifically intended to possess, receive, or distribute such material. The circuit courts have disagreed regarding whether a defendant must have specifically intended to receive the sadistic or masochistic images. Some circuit courts have required that the defendant must have intended to receive these images.
Second, section 103 of the PROTECT Act increased the mandatory minimum term of imprisonment from 10 to 15 years for offenses related to the production of child pornography under 18 U.S.C. § 2251. In response, the amendment increases the base offense level at § 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production) from level 27 to level 32. A base offense level of level 32 is appropriate for production offenses because, combined with the application of several specific offense characteristics that are expected to apply in almost all production cases (
The amendment adds three new specific offense characteristics that are associated with the production of child pornography. The amendment provides, at § 2G2.1(b)(2), a two-level increase if the offense involved the commission of a sex act or sexual contact, or a four-level increase if the offense involved a sex act and conduct described in 18 U.S.C. § 2241(a) or (b) (
Third, this amendment creates a new guideline, § 2G1.3 (Promoting a Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Transportation of Minors to Engage in a Commercial Sex Act or Prohibited Sexual Conduct; Travel to Engage in Commercial Sex Act or Prohibited Sexual Conduct with a Minor; Sex Trafficking of Children; Use of Interstate Facilities to Transport Information about a Minor), to specifically address offenses under chapter 117 of title 18, United States Code (Transportation for Illegal Sexual Activity and Related Crimes). Prior to the amendment, chapter 117 offenses, primarily 18 U.S.C. §§ 2422 (Coercion and Enticement) and 2423 (Transportation of Minors), were referenced by Appendix A (Statutory Index) to either § 2G1.1 or § 2A3.2. Offenses under 18 U.S.C. §§ 2422 and 2423(a) (Transportation with Intent to Engage in Criminal Sexual Activity) are referenced to § 2G1.1 (Promoting A Commercial Sex Act or Prohibited Sexual Conduct), but are then cross referenced from § 2G1.1 to § 2A3.2 (Criminal Sexual Abuse of a Minor Under the Age of Sixteen Years (Statutory Rape) or Attempt to Commit Such Acts) in order to account for certain underlying behavior. Application of this cross reference has led to confusion among courts and practitioners. Offenses under 18 U.S.C. § 2423(b) (Travel with Intent to Engage in Sexual Act with a Juvenile) are referenced to § 2A3.1, § 2A3.2, or § 2A3.3, but most are sentenced at § 2A3.2. Until recently, the majority of cases sentenced under § 2A3.2 were statutory rape cases that occurred on Federal property (
Prior to the amendment, § 2A3.2 provided alternative base offense levels of (1) level 24 for a chapter 117 violation with a sexual act; (2) level 21 for a chapter 117 violation with no sexual act (
This new guideline has a base offense level of level 24 to account for the new mandatory minimum terms of imprisonment established by the PROTECT Act. The new guideline provides six specific offense characteristics to provide proportionate enhancements for aggravating conduct that may occur in connection with these cases. The guideline contains enhancements for commission of a sex act or commercial sex act, use of a computer, misrepresentations of identity, undue influence, custody issues, and involvement of a minor under the age of 12 years. The amendment also provides three cross references to account for certain more serious sexual abuse conduct, including a cross reference if the offense involved conduct described in 18 U.S.C. § 2241 or
Fourth, section 521 of the PROTECT Act created a new offense at 18 U.S.C. § 2252B (Misleading Domain Names on the Internet). Section 2252B(a) prohibits the knowing use of a misleading domain name on the Internet with the intent to deceive a person into viewing material constituting obscenity. Offenses under this subsection are punishable by a maximum term of imprisonment of two years. Section 2252B(b) prohibits the knowing use of a misleading domain name with the intent to deceive a minor into viewing material that is harmful to minors, with a maximum term of imprisonment of four years. The amendment refers the new offense to § 2G3.1 (Importing, Mailing, or Transporting Obscene Matter; Transferring Obscene Matter to a Minor), modifies the title of the guideline to include “Misleading Domain Names”, and provides a two-level enhancement at § 2G3.1(b)(2), if “the offense involved the use of a misleading domain name on the Internet with the intent to deceive a minor into viewing material on the Internet that is harmful to minors.” In addition, the amendment also provides enhancements for the following conduct: (1) distribution to a minor that was intended to persuade, induce, entice, or coerce a minor to engage in any illegal activity; and (2) use of a computer or interactive computer service. Finally, the amendment adds § 2G3.1 to the list of guidelines at subsection (d) of § 3D1.2 (Groups of Closely Related Counts). Grouping multiple counts of these offenses pursuant to § 3D1.2(d) is appropriate because typically these offenses, as well as other pornography distribution offenses, are ongoing or continuous in nature. The amendment makes other minor technical changes to the commentary to make this guideline consistent with other Chapter Two, Part G guidelines.
Fifth, in response to a circuit conflict, this amendment adds a condition to §§ 5B1.3 (Conditions of Probation) and 5D1.3 (Conditions of Supervised Release) permitting the court to limit the use of a computer or an interactive computer service for sex offenses in which the defendant used such items. The circuit courts have disagreed over imposition of restrictive computer use and Internet-access conditions. Some circuit courts have refused to allow complete prohibitions on computer use and Internet access (
In addition, this amendment makes § 5D1.2 (Term of Supervised Release) consistent with changes made by the PROTECT Act regarding the applicable terms of supervised release under 18 U.S.C. § 3583 for sex offenders.
Sixth, section 401(i)(2) of the PROTECT Act directs the Commission to “amend the Sentencing Guidelines to ensure that the Guidelines adequately reflect the seriousness of the offenses” under sections 2243(b) (Sexual Abuse of a Ward), 2244(a)(4) (Abusive Sexual Contact), and 2244(b) (Sexual Contact with a Person without that Person's Permission) of title 18, United States Code. This amendment makes several amendments to the guidelines in Chapter Two, Part A (Criminal Sexual Abuse) to address this directive and to account for proportionality issues created by the increases in the Chapter Two, Part G guidelines. In addition, the amendment makes changes to the commentary to make the definitions in these guidelines consistent with definitions in the pornography guidelines.
Seventh, the amendment increases the base offense level at § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse) from level 27 to level 30 to maintain proportionality between this guideline and § 2G2.1, the production of child pornography guideline, the base offense level of which was raised to level 32 by this amendment. Furthermore, the amendment adds the term “interactive computer service” to the computer enhancement in § 2A3.1.
Eighth, the amendment increases the offense levels for two specific offense characteristics at § 2A3.2. The amendment increases the custody, care, or supervisory control enhancement from two to four levels at § 2A3.2(b)(1), and changes § 2A3.2(b)(3), which involves the misrepresentation or undue influence by the defendant, from a two-to a four-level increase. The Commission concluded that an increase in the magnitude of these enhancements is appropriate because of the seriousness of such conduct. The amendment also deletes the alternative base offense level of level 21 or level 24 because these cases will be referenced to the new travel guideline at § 2G1.3.
Ninth, in response to section 401 of the PROTECT Act, the amendment increases the base offense level at § 2A3.3 (Criminal Sexual Abuse of a Ward) from level 9 to a level 12. Although 18 U.S.C. § 2243(b) offenses have only a one-year statutory maximum term of imprisonment, the Commission determined that these offenses were serious in nature and deserved punishment near that statutory maximum.
Finally, the amendment increases the alternative base offense levels in § 2A3.4 (Abusive Sexual Contact or Attempt to Commit Abusive Sexual Contact) to level 20, 16, or 12, depending on the conduct involved in the offense. Prior to the amendment, these base offenses levels were level 16, 12, or 10. Base offense level 20 applies if the offense involved conduct described in 18 U.S.C. § 2241(a) or (b). Base offense level 16 applies if the offense involved conduct described in 18 U.S.C. § 2242, and base offense level 12 applies for all other cases sentenced at this guideline. The Commission concluded that these increases were appropriate to account for the serious conduct committed by the defendant and to maintain proportionality with other Chapter Two, Part A guidelines.
3. Amendment: Section 2B1.1(b) is amended by redesignating subdivisions (7) through (14) as subdivisions (8) through (15), respectively; and by inserting after subdivision (6) the following:
“(7) If (A) the defendant was convicted of an offense under 18 U.S.C. § 1037; and (B) the offense involved obtaining electronic mail addresses through improper means, increase by 2 levels.”.
The Commentary to § 2B1.1 captioned “Statutory Provisions” is amended by inserting “1037,” after “1031,”.
The Commentary to § 2B1.1 captioned “Application Notes” is amended in Note 4 by redesignating subdivisions (B)
“(B) Applicability to Transmission of Multiple Commercial Electronic Mail Messages.—For purposes of subsection (b)(2), an offense under 18 U.S.C. § 1037, or any other offense involving conduct described in 18 U.S.C. § 1037, shall be considered to have been committed through mass-marketing. Accordingly, the defendant shall receive at least a two-level enhancement under subsection (b)(2) and may, depending on the facts of the case, receive a greater enhancement under such subsection, if the defendant was convicted under, or the offense involved conduct described in, 18 U.S.C. § 1037.”.
The Commentary to § 2B1.1 captioned “Application Notes” is amended by redesignating Notes 6 through 18 as Notes 7 through 19, respectively; and by inserting after Note 5 the following:
“6. Application of Subsection (b)(7).—For purposes of subsection (b)(7), ‘improper means’ includes the unauthorized harvesting of electronic mail addresses of users of a website, proprietary service, or other online public forum.”.
Appendix A (Statutory Index) is amended by inserting after the line referenced to 18 U.S.C. § 1035 the following new line: “18 U.S.C. § 1037 2B1.1”.
The amendment refers violations of subsections of 18 U.S.C. § 1037 to § 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States). The Commission determined that reference to § 2B1.1 is appropriate because subsection 18 U.S.C. § 1037(a)(1) involves misappropriation of another's computer, and 18 U.S.C. § 1037(a)(2) through (a)(5) involve deceit. Because each offense under 18 U.S.C. § 1037 contains as an element the transmission of multiple commercial electronic messages (where “multiple” is defined in the statute as “more than 100 electronic mail messages during a 24-hour period, more than 1,000 electronic mail messages during a 30-day period, or more than 10,000 electronic mail messages during a 1-year period”), the amendment provides in Application Note 4 that the mass-marketing enhancement in § 2B1.1(b)(2)(A)(ii) shall apply automatically to any defendant who is convicted of 18 U.S.C. § 1037, or who committed an offense involving conduct described in 18 U.S.C. § 1037. Broadening application of the mass marketing enhancement to all defendants sentenced under § 2B1.1 whose offense involves conduct described in 18 U.S.C. § 1037, whether or not the defendant is convicted under 18 U.S.C. § 1037, responds specifically to that part of the directive concerning offenses that are facilitated by sending large volumes of electronic mail.
Additionally, in response to the directive, a new specific offense characteristic in § 2B1.1(b)(7) provides for a two-level increase if the defendant is convicted under 18 U.S.C. § 1037 and the offense involved obtaining electronic mail addressed through improper means. A corresponding application note provides a definition of “improper means.” Finally, the Commission also responded to the directive concerning other offenses by making several modifications to other guidelines, as set forth in Amendment 2 of this document. For example, an amendment to the obscenity guideline, § 2G3.1 (Importing, Mailing, or Transporting Obscene Matter; Transferring Obscene Matter to a Minor), added a two-level enhancement if the offense involved the use of a computer or interactive computer service.
4.
“For example, a state employee who improperly influenced the award of a contract and used the mails to commit the offense may be prosecuted under 18 U.S.C. § 1341 for fraud involving the deprivation of the intangible right of honest services. Such a case would be more aptly sentenced pursuant to § 2C1.1 (Offering, Giving, Soliciting, or Receiving a Bribe; Extortion Under Color of Official Right; Fraud involving the Deprivation of the Intangible Right to Honest Services of Public Officials; Conspiracy to Defraud by Interference with Governmental Functions).”.
Chapter Two, Part C is amended by striking §§ 2C1.1 and 2C1.2 and their accompanying commentary and inserting the following:
Ҥ 2C1.1. Offering, Giving, Soliciting, or Receiving a Bribe; Extortion Under Color of Official Right; Fraud Involving the Deprivation of the Intangible Right to Honest Services of Public Officials; Conspiracy to Defraud by Interference with Governmental Functions
(a) Base Offense Level:
(1) 14, if the defendant was a public official; or
(2) 12, otherwise.
(b) Specific Offense Characteristics
(1) If the offense involved more than one bribe or extortion, increase by 2 levels.
(2) If the value of the payment, the benefit received or to be received in return for the payment, the value of anything obtained or to be obtained by a public official or others acting with a public official, or the loss to the government from the offense, whichever is greatest, exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.
(3) If the offense involved an elected public official or any public official in a high-level decision-making or sensitive position, increase by 4 levels. If the resulting offense level is less than level 18, increase to level 18.
(4) If the defendant was a public official who facilitated (A) entry into the United States for a person, a vehicle, or cargo; (B) the obtaining of a passport or a document relating to naturalization, citizenship, legal entry, or legal resident status; or (C) the obtaining of a government identification document, increase by 2 levels.
(c) Cross References
(1) If the offense was committed for the purpose of facilitating the commission of another criminal offense, apply the offense guideline applicable to a conspiracy to commit that other offense, if the resulting offense level is greater than that determined above.
(2) If the offense was committed for the purpose of concealing, or obstructing justice in respect to, another criminal offense, apply § 2X3.1 (Accessory After the Fact) or § 2J1.2 (Obstruction of Justice), as appropriate,
(3) If the offense involved a threat of physical injury or property destruction, apply § 2B3.2 (Extortion by Force or Threat of Injury or Serious Damage), if the resulting offense level is greater than that determined above.
(d) Special Instruction for Fines—Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of § 8C2.4 (Base Fine), use the greatest of: (A) the value of the unlawful payment; (B) the value of the benefit received or to be received in return for the unlawful payment; or (C) the consequential damages resulting from the unlawful payment.
1. Definitions.—For purposes of this guideline:
“Government identification document” means a document made or issued by or under the authority of the United States Government, a State, or a political subdivision of a State, which, when completed with information concerning a particular individual, is of a type intended or commonly accepted for the purpose of identification of individuals.
“Payment” means anything of value. A payment need not be monetary.
“Public official” shall be construed broadly and includes the following:
(A) “Public official” as defined in 18 U.S.C. § 201(a)(1).
(B) A member of a state or local legislature. “State” means a State of the United States, and any commonwealth, territory, or possession of the United States.
(C) An officer or employee or person acting for or on behalf of a state or local government, or any department, agency, or branch of government thereof, in any official function, under or by authority of such department, agency, or branch of government, or a juror in a state or local trial.
(D) Any person who has been selected to be a person described in subdivisions (A), (B), or (C), either before or after such person has qualified.
(E) An individual who, although not otherwise covered by subdivisions (A) through (D): (i) Is in a position of public trust with official responsibility for carrying out a government program or policy; (ii) acts under color of law or official right; or (iii) participates so substantially in government operations as to possess de facto authority to make governmental decisions (
2. More than One Bribe or Extortion.—Subsection (b)(1) provides an adjustment for offenses involving more than one incident of either bribery or extortion. Related payments that, in essence, constitute a single incident of bribery or extortion (
In a case involving more than one incident of bribery or extortion, the applicable amounts under subsection (b)(2) (
3. Application of Subsection (b)(2).—“Loss”, for purposes of subsection (b)(2)(A), shall be determined in accordance with Application Note 3 of the Commentary to § 2B1.1 (Theft, Property Destruction, and Fraud). The value of ‘the benefit received or to be received’ means the net value of such benefit. Examples: (1) A government employee, in return for a $500 bribe, reduces the price of a piece of surplus property offered for sale by the government from $10,000 to $2,000; the value of the benefit received is $8,000. (2) A $150,000 contract on which $20,000 profit was made was awarded in return for a bribe; the value of the benefit received is $20,000. Do not deduct the value of the bribe itself in computing the value of the benefit received or to be received. In the preceding examples, therefore, the value of the benefit received would be the same regardless of the value of the bribe.
4. Application of Subsection (b)(3).—
(A) Definition.—“High-level decision-making or sensitive position” means a position characterized by a direct authority to make decisions for, or on behalf of, a government department, agency, or other government entity, or by a substantial influence over the decision-making process.
(B) Examples.—Examples of a public official in a high-level decision-making position include a prosecuting attorney, a judge, an agency administrator, and any other public official with a similar level of authority. Examples of a public official who holds a sensitive position include a juror, a law enforcement officer, an election official, and any other similarly situated individual.
5. Application of Subsection (c).—For the purposes of determining whether to apply the cross references in this section, the “resulting offense level” means the final offense level (
6. Inapplicability of § 3B1.3.—Do not apply § 3B1.3 (Abuse of Position of Trust or Use of Special Skill).
7. Upward Departure Provisions.—In some cases the monetary value of the unlawful payment may not be known or may not adequately reflect the seriousness of the offense. For example, a small payment may be made in exchange for the falsification of inspection records for a shipment of defective parachutes or the destruction of evidence in a major narcotics case. In part, this issue is addressed by the enhancements in § 2C1.1(b)(2) and (c)(1), (2), and (3). However, in cases in which the seriousness of the offense is still not adequately reflected, an upward departure is warranted.
In a case in which the court finds that the defendant's conduct was part of a systematic or pervasive corruption of a governmental function, process, or office that may cause loss of public confidence in government, an upward departure may be warranted.
Background: This section applies to a person who offers or gives a bribe for a corrupt purpose, such as inducing a public official to participate in a fraud or to influence such individual's official actions, or to a public official who solicits or accepts such a bribe.
The object and nature of a bribe may vary widely from case to case. In some cases, the object may be commercial advantage (
In determining the net value of the benefit received or to be received, the value of the bribe is not deducted from the gross value of such benefit; the harm is the same regardless of value of the bribe paid to receive the benefit. In a case in which the value of the bribe exceeds the value of the benefit, or in which the value of the benefit cannot be determined, the value of the bribe is used because it is likely that the payer of such a bribe expected something in return that would be worth more than the value of the bribe. Moreover, for deterrence purposes, the punishment should be commensurate with the gain to the payer or the recipient of the bribe, whichever is greater.
Under § 2C1.1(b)(3), if the payment was for the purpose of influencing an official act by certain officials, the offense level is increased by 4 levels.
Under § 2C1.1(c)(1), if the payment was to facilitate the commission of another criminal offense, the guideline applicable to a conspiracy to commit that other offense will apply if the result is greater than that determined above. For example, if a bribe was given to a law enforcement officer to allow the smuggling of a quantity of cocaine, the guideline for conspiracy to import cocaine would be applied if it resulted in a greater offense level.
Under § 2C1.1(c)(2), if the payment was to conceal another criminal offense or obstruct justice in respect to another criminal offense, the guideline from § 2X3.1 (Accessory After the Fact) or § 2J1.2 (Obstruction of Justice), as appropriate, will apply if the result is greater than that determined above. For example, if a bribe was given for the purpose of concealing the offense of espionage, the guideline for accessory after the fact to espionage would be applied.
Under § 2C1.1(c)(3), if the offense involved forcible extortion, the guideline from § 2B3.2 (Extortion by Force or Threat of Injury or Serious Damage) will apply if the result is greater than that determined above.
Section 2C1.1 also applies to offenses under 15 U.S.C. §§ 78dd-1, 78dd-2, and 78dd-3. Such offenses generally involve a payment to a foreign public official, candidate for public office, or agent or intermediary, with the intent to influence an official act or decision of a foreign government or political party. Typically, a case prosecuted under these provisions will involve an intent to influence governmental action.
Section 2C1.1 also applies to fraud involving the deprivation of the intangible right to honest services of government officials under 18 U.S.C. §§ 1341-1343 and conspiracy to defraud by interference with governmental functions under 18 U.S.C. § 371. Such fraud offenses typically involve an improper use of government influence that harms the operation of government in a manner similar to bribery offenses.
Offenses involving attempted bribery are frequently not completed because the offense is reported to authorities or an individual involved in the offense is acting in an undercover capacity. Failure to complete the offense does not lessen the defendant's culpability in attempting to use public position for personal gain. Therefore, solicitations and attempts are treated as equivalent to the underlying offense.
§ 2C1.2. Offering, Giving, Soliciting, or Receiving a Gratuity
(a) Base Offense Level:
(1) 11, if the defendant was a public official; or
(2) 9, otherwise.
(b) Specific Offense Characteristics
(1) If the offense involved more than one gratuity, increase by 2 levels.
(2) If the value of the gratuity exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.
(3) If the offense involved an elected public official or any public official in a high-level decision-making or sensitive position, increase by 4 levels. If the resulting offense level is less than level 15, increase to level 15.
(4) If the defendant was a public official who facilitated (A) entry into the United States for a person, a vehicle, or cargo; (B) the obtaining of a passport or a document relating to naturalization, citizenship, legal entry, or legal resident status; or (C) the obtaining of a government identification document, increase by 2 levels.
(c) Special Instruction for Fines—Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of § 8C2.4 (Base Fine), use the value of the unlawful payment.
1. Definitions.—For purposes of this guideline:
“Government identification document” means a document made or issued by or under the authority of the United States Government, a State, or a political subdivision of a State, which, when completed with information concerning a particular individual, is of a type intended or commonly accepted for the purpose of identification of individuals.
“Public official” shall be construed broadly and includes the following:
(A) “Public official” as defined in 18 U.S.C. § 201(a)(1).
(B) A member of a state or local legislature.
(C) An officer or employee or person acting for or on behalf of a state or local government, or any department, agency, or branch of government thereof, in any official function, under or by authority of such department, agency, or branch of government, or a juror.
(D) Any person who has been selected to be a person described in subdivisions (A), (B), or (C), either before or after such person has qualified.
(E) An individual who, although not otherwise covered by subdivisions (A) through (D): (i) is in a position of public trust with official responsibility for carrying out a government program or policy; (ii) acts under color of law or official right; or (iii) participates so substantially in government operations as to possess de facto authority to make governmental decisions (
2. Application of Subsection (b)(1).—Related payments that, in essence, constitute a single gratuity (
3. Application of Subsection (b)(3).—
(A) Definition.—“High-level decision-making or sensitive position” means a position characterized by a direct authority to make decisions for, or on behalf of, a government department, agency, or other government entity, or by a substantial influence over the decisionmaking process.
(B) Examples.—Examples of a public official in a high-level decisionmaking position include a prosecuting attorney, a judge, an agency administrator, a law enforcement officer, and any other public official with a similar level of authority. Examples of a public official who holds a sensitive position include a juror, a law enforcement officer, an election official, and any other similarly situated individual.
4. Inapplicability of § 3B1.3.—Do not apply the adjustment in § 3B1.3 (Abuse of Position or Trust or Use of Special Skill).
Chapter Two, Part C, Subpart 1, is amended by striking §§ 2C1.6 and 2C1.7 and their accompanying commentary.
Appendix A (Statutory Index) is amended in the line referenced to 18 U.S.C. § 209 by striking “2C1.4” and inserting “2C1.3”;
In the line referenced to 18 U.S.C. § 212 by striking “2C1.6” and inserting “2C1.2”;
In the line referenced to 18 U.S.C. § 213 by striking “2C1.6” and inserting “2C1.2”;
In the line referenced to 18 U.S.C. § 214 by striking “2C1.6” and inserting “2C1.2”;
In the line referenced to 18 U.S.C. § 217 by striking “2C1.6” and inserting “2C1.2”;
In the line referenced to 18 U.S.C. § 371 by striking “2C1.7” and inserting “2C1.1 (if conspiracy to defraud by interference with governmental functions)”; and by striking “924(c)” and inserting “924(c))”;
In the line referenced to 18 U.S.C. § 1341 by striking “2C1.7” and inserting “2C1.1”;
In the line referenced to 18 U.S.C. § 1342 by striking “2C1.7” and inserting “2C1.1”;
In the line referenced to 18 U.S.C. § 1343 by striking “2C1.7” and inserting “2C1.1”;
In the line referenced to 18 U.S.C. § 1909 by striking “, 2C1.4”; and
In the line referenced to 41 U.S.C. § 423(e) by striking “, 2C1.7”.
Sections 2C1.1 and 2C1.2 each are amended to include alternative base offense levels, with an increase of two levels for public official defendants who violate their offices or responsibilities by accepting bribes, gratuities, or anything else of value. The higher alternative base offense levels for public officials reflect the Commission's view that offenders who abuse their positions of public trust are inherently more culpable than those who seek to corrupt them, and their offenses present a somewhat greater threat to the integrity of governmental processes.
A specific offense characteristic in the former §§ 2C1.1, 2C1.2, and 2C1.7 that raised offense levels incrementally with the financial magnitude of the offense or, if greater, by eight levels for the defendant's status as a “high-level decision-maker” is replaced by two separate specific offense characteristics in the amended guidelines. These new specific offense characteristics for “loss” and “status” are to be applied cumulatively when they both co-exist in the case. Their operation in tandem ensures that the offense level will always rise commensurate with the financial magnitude of the offense, and that all offenses involving “an elected public official or any public official in a high-level decision-making or sensitive position” will receive four additional offense levels and, when applicable, a minimum offense level of level 18 (in § 2C1.1) or level 15 (in § 2C1.2). The minimum offense level ensures that an offender sentenced under the amended guidelines will not receive a less severe sentence than a similarly situated offender under the former guidelines. Application notes and illustrative examples have been added to the amended guidelines to clarify the meaning of “high-level decision-making or sensitive position.”
A new specific offense characteristic has been added to §§ 2C1.1 and 2C1.2 that provides two additional offense levels when the offender is a public official whose position involves the security of the borders of the United States or the integrity of the process for generating documents related to naturalization, legal entry, legal residence, or other government identification documents. This specific offense characteristic recognizes the extreme sensitivity of these positions in light of heightened threats from international terrorism.
5.
“(5) If the defendant, or a person for whose conduct the defendant is accountable under § 1B1.3 (Relevant Conduct), distributed a controlled substance through mass-marketing by means of an interactive computer service, increase by 2 levels.”.
Section 2D1.1 is amended by adding after subsection (d) the following:
“(e) Special Instruction
(1) If (A) subsection (d)(2) does not apply; and (B) the defendant committed, or attempted to commit, a sexual offense against another individual by distributing, with or without that individual's knowledge, a controlled substance to that individual, an adjustment under § 3A1.1(b)(1) shall apply.”.
Section 2D1.1(c) is amended in subdivision (10) by striking “or Schedule III substances” in the thirteenth entry; and by inserting after the thirteenth entry the following: “40,000 or more units of Schedule III substances;”;
In subdivision (11) by striking “or Schedule III substances” in the thirteenth entry; and by inserting after the thirteenth entry the following: “At least 20,000 but less than 40,000 units of Schedule III substances;”;
In subdivision (12) by striking “or Schedule III substances” in the thirteenth entry; and by inserting after the thirteenth entry the following: “At least 10,000 but less than 20,000 units of Schedule III substances;”;
In subdivision (13) by striking “or Schedule III substances” in the thirteenth entry; and by inserting after the thirteenth entry the following: “At least 5,000 but less than 10,000 units of Schedule III substances;”;
In subdivision (14) by striking “or Schedule III substances” in the thirteenth entry; and by inserting after
In subdivision (15) by striking “or Schedule III substances” in the fourth entry; and by inserting after the fourth entry the following: “At least 1,000 but less than 2,500 units of Schedule III substances;”;
In subdivision (16) by striking “or Schedule III substances” in the fourth entry; and by inserting after the fourth entry the following: “At least 250 but less than 1,000 units of Schedule III substances;”; and
In subdivision (17) by striking “or Schedule III substances” in the fourth entry; and by inserting after the fourth entry the following: “Less than 250 units of Schedule III substances;”.
Section 2D1.1 is amended in the subdivision captioned “*Notes to Drug Quantity Table” in Note (F) in the first sentence by inserting “(except gamma-hydroxybutyric acid)” after “Depressants”; and in the second sentence by inserting “(except gamma-hydroxybutyric acid)” after “substance”, and by striking “gm” and inserting “ml”.
The Commentary to § 2D1.1 captioned “Application Notes” is amended by striking Note 5 and inserting the following:
“5. Analogues and Controlled Substances Not Referenced in this Guideline.—Any reference to a particular controlled substance in these guidelines includes all salts, isomers, all salts of isomers, and, except as otherwise provided, any analogue of that controlled substance. Any reference to cocaine includes ecgonine and coca leaves, except extracts of coca leaves from which cocaine and ecgonine have been removed. For purposes of this guideline ‘analogue’ has the meaning given the term ‘controlled substance analogue’ in 21 U.S.C. § 802(32). In determining the appropriate sentence, the court also may consider whether a greater quantity of the analogue is needed to produce a substantially similar effect on the central nervous system as the controlled substance for which it is an analogue.
In the case of a controlled substance that is not specifically referenced in this guideline, determine the base offense level using the marihuana equivalency of the most closely related controlled substance referenced in this guideline. In determining the most closely related controlled substance, the court shall, to the extent practicable, consider the following:
(A) Whether the controlled substance not referenced in this guideline has a chemical structure that is substantially similar to a controlled substance referenced in this guideline.
(B) Whether the controlled substance not referenced in this guideline has a stimulant, depressant, or hallucinogenic effect on the central nervous system that is substantially similar to the stimulant, depressant, or hallucinogenic effect on the central nervous system of a controlled substance referenced in this guideline.
(C) Whether a lesser or greater quantity of the controlled substance not referenced in this guideline is needed to produce a substantially similar effect on the central nervous system as a controlled substance referenced in this guideline.”.
The Commentary to § 2D1.1 captioned “Application Notes” is amended in Note 10 in the Drug Equivalency Tables by striking the subdivision captioned “Schedule I or II Depressants” and inserting the following new subdivisions:
The Commentary to § 2D1.1 captioned “Application Notes” is amended in Note 12 by striking the last sentence of the third paragraph and inserting the following:
“If, however, the defendant establishes that the defendant did not intend to provide or purchase, or was not reasonably capable of providing or purchasing, the agreed-upon quantity of the controlled substance, the court shall exclude from the offense level determination the amount of controlled substance that the defendant establishes that the defendant did not intend to provide or purchase or was not reasonably capable of providing or purchasing.”.
The Commentary to § 2D1.1 captioned “Application Notes” is amended by adding at the end the following:
“22. Application of Subsection (b)(5).—For purposes of subsection (b)(5), ‘mass-marketing by means of an interactive computer service’ means the solicitation, by means of an interactive computer service, of a large number of persons to induce those persons to purchase a controlled substance. For example, subsection (b)(5) would apply to a defendant who operated a web site to promote the sale of Gamma-hydroxybutyric Acid (GHB) but would not apply to coconspirators who use an interactive computer service only to communicate with one another in furtherance of the offense. ‘Interactive computer service’, for purposes of subsection (b)(5) and this note, has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).
“23. Application of Subsection (e)(1).—
“(A) Definition.—For purposes of this guideline, ‘sexual offense’ means a ‘sexual act’ or ‘sexual contact’ as those terms are defined in 18 U.S.C. § 2246(2) and (3), respectively.
(B) Upward Departure Provision.—If the defendant committed a sexual offense against more than one individual, an upward departure would be warranted.”.
Section 2D1.11(b)(2) is amended by striking “21 U.S.C. §§ 841(d)(2), (g)(1), or 960(d)(2),” and inserting “21 U.S.C. § 841(c)(2) or (f)(1), or § 960(d)(2), (d)(3), or (d)(4),”.
Section 2D1.11(b) is amended by adding at the end the following:
“(4) If the defendant, or a person for whose conduct the defendant is accountable under § 1B1.3 (Relevant Conduct), distributed a listed chemical through mass-marketing by means of an interactive computer service, increase by 2 levels.”.
Section 2D1.11(e) is amended in subdivision (1) by striking “10,000 KG or more of Gamma-butyrolactone;” and inserting “2271 L or more of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (2) by striking “At least 3,000 KG but less than 10,000 KG of Gamma-butyrolactone;” and inserting “At least 681.3 L but less than 2271 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (3) by striking “At least 1,000 KG but less than 3,000 KG of Gamma-butyrolactone;” and inserting “At least 227.1 L but less than 681.3 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (4) by striking “At least 700 KG but less than 1,000 KG of Gamma-butyrolactone;” and inserting “At least 159 L but less than 227.1 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (5) by striking “At least 400 KG but less than 700 KG of Gamma-butyrolactone;” and inserting “At least 90.8 L but less than 159 L of Gamma-
In subdivision (6) by striking “At least 100 KG but less than 400 KG of Gamma-butyrolactone;” and inserting “At least 22.7 L but less than 90.8 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (7) by striking “At least 80 KG but less than 100 KG of Gamma-butyrolactone;” and inserting “At least 18.2 L but less than 22.7 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (8) by striking “At least 60 KG but less than 80 KG of Gamma-butyrolactone;” and inserting “At least 13.6 L but less than 18.2 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”;
In subdivision (9) by striking “At least 40 KG but less than 60 KG of Gamma-butyrolactone;” and inserting “At least 9.1 L but less than 13.6 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”; and
In subdivision (10) by striking “Less than 40 KG of Gamma-butyrolactone;” and inserting “Less than 9.1 L of Gamma-butyrolactone;”; and by inserting “, White Phosphorus, or Hypophosphorous Acid” after “Red Phosphorus”.
The Commentary to § 2D1.11 captioned “Statutory Provisions” is amended by inserting “, (3), (4)” after “(d)(1), (2)”.
The Commentary to § 2D1.11 captioned “Application Notes” is amended in Note 5 by striking “21 U.S.C. §§ 841(d)(2), (g)(1), and 960(d)(2)” and inserting “21 U.S.C. §§ 841(c)(2) and (f)(1), and 960(d)(2), (d)(3), and (d)(4)”; and by striking “Where” and inserting “In a case in which”.
The Commentary to § 2D1.11 captioned “Application Notes” is amended by adding at the end the following:
“7. Application of Subsection (b)(4).—For purposes of subsection (b)(4), ‘mass-marketing by means of an interactive computer service’ means the solicitation, by means of an interactive computer service, of a large number of persons to induce those persons to purchase a controlled substance. For example, subsection (b)(4) would apply to a defendant who operated a web site to promote the sale of Gamma-butyrolactone (GBL) but would not apply to coconspirators who use an interactive computer service only to communicate with one another in furtherance of the offense. ‘Interactive computer service’, for purposes of subsection (b)(4) and this note, has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).”.
Section 2D1.12(b) is amended by adding at the end the following:
“(3) If the defendant, or a person for whose conduct the defendant is accountable under § 1B1.3 (Relevant Conduct), distributed any prohibited flask, equipment, chemical, product, or material through mass-marketing by means of an interactive computer service, increase by 2 levels.
(4) If the offense involved stealing anhydrous ammonia or transporting stolen anhydrous ammonia, increase by 6 levels.”.
The Commentary to § 2D1.12 captioned “Application Notes” is amended by adding at the end the following:
“4. Application of Subsection (b)(3).—For purposes of subsection (b)(3), ‘mass-marketing by means of an interactive computer service’ means the solicitation, by means of an interactive computer service, of a large number of persons to induce those persons to purchase a controlled substance. For example, subsection (b)(3) would apply to a defendant who operated a web site to promote the sale of prohibited flasks but would not apply to coconspirators who use an interactive computer service only to communicate with one another in furtherance of the offense. ‘Interactive computer service’, for purposes of subsection (b)(3) and this note, has the meaning given that term in section 230(e)(2) of the Communications Act of 1934 (47 U.S.C. § 230(f)(2)).”.
Appendix A (Statutory Index) is amended by striking the following: “21 U.S.C. § 957 2D1.1”.
Second, this amendment adds a two-level enhancement in §§ 2D1.1, 2D1.11, and 2D1.12 (Unlawful Possession, Manufacture, Distribution, Transportation, Exportation, or Importation of Prohibited Flask, Equipment, Chemical, Product, or Material; Attempt or Conspiracy) for mass marketing of a controlled substance, listed chemical, or prohibited equipment, respectively, through the use of an interactive computer service. The Commission identified use of an interactive computer service as a tool providing easier access to illegal products. Use of an interactive computer service enables drug traffickers to market their illegal products more efficiently and anonymously to a wider audience than through traditional drug trafficking means, while making it more difficult for law enforcement authorities to discover the offense and apprehend the offenders.
Third, this amendment provides a special instruction in § 2D1.1(e) that requires application of the vulnerable victim adjustment in § 3A1.1(b)(1) (Hate Crime Motivation or Vulnerable Victim) if the defendant commits a sexual offense by distributing a controlled substance to another individual, with or without that individual's knowledge. The amendment addresses cases in which the cross reference in
Fourth, this amendment modifies the existing rule at Application Note 5 of § 2D1.1 to provide a uniform mechanism for determining sentences in cases involving analogues of controlled substances or controlled substances not specifically referenced in this guideline. The genesis of this amendment was the Commission's investigation of GHB, during which the Commission learned that analogues of GHB, specifically GBL and 1,4 Butanediol (BD), among others, often are used in its stead and cause the same effects as GHB. The Commission was concerned that analogues of other drugs might be similarly used. Additionally, the Commission became aware that courts employ a variety of means to determine the applicable guideline range for defendants charged with offenses involving controlled substances not specifically referenced in § 2D1.1, resulting in disparate sentences. The purpose of the amendment is to provide a more uniform mechanism for determining sentences in cases involving analogues or controlled substances not specifically referenced in this guideline.
Fifth, this amendment corrects a technical error in the Drug Quantity Table at § 2D1.1(c) with respect to Schedule III substances. Specifically, the maximum base offense level for Schedule III substances is level 20, but prior to the amendment there was no corresponding language in the Drug Quantity Table to so indicate.
Sixth, this amendment addresses a circuit conflict regarding the interpretation of the last sentence in Application Note 12 of § 2D1.1.
Seventh, this amendment updates the statutory references in § 2D1.11(b)(2) and accompanying commentary to conform to statutory redesignations of certain offenses, and also expands application of § 2D1.11(b)(2) to include 21 U.S.C. § 960(d)(3) and (d)(4) among the statutes of conviction for which the three-level reduction at subsection (b)(2) is available. The reduction formerly applied in cases in which the defendant, convicted under 21 U.S.C. § 841(c)(2), (f)(1), or § 960(d)(2), as properly redesignated, did not have knowledge or actual belief that the listed chemical would be used to manufacture a controlled substance. Section 841(c)(2) of title 21, United States Code, requires a finding of either knowledge or a reasonable cause to believe that the listed chemical would be used to manufacture a controlled substance. Sections 960(d)(3) and (d)(4) of title 21, United States Code, similarly require a finding that a person who imports, exports, or serves as a broker for, a listed chemical knows or has a reasonable cause to believe, that the listed chemical will be used to manufacture a controlled substance. Given that the reduction applies in 21 U.S.C. § 841(c)(2) cases in which the defendant had a reasonable cause to believe, but not knowledge or actual belief, that the listed chemical would be used to manufacture a controlled substance, and the mens rea in 21 U.S.C. § 841(c)(2) is the same as in 21 U.S.C. § 960(d)(3) and (d)(4), the amendment adds 21 U.S.C. § 960(d)(3) and (d)(4) to § 2D1.11(b)(2).
Eighth, this amendment adds white phosphorus and hypophosphorous acid to the Chemical Quantity Table in § 2D1.11(e). Both substances are List I chemicals that can be substituted for red phosphorus in the manufacture of methamphetamine. Red phosphorus was added to the Chemical Quantity Table effective November 1, 2003 (
Ninth, this amendment provides an enhancement of six levels at § 2D1.12 if the offense involved stealing anhydrous ammonia or transporting stolen anhydrous ammonia. A widely used source of nitrogen fertilizer for crops, anhydrous ammonia also is used in the manufacture of methamphetamine. Anhydrous ammonia must be stored and handled under high pressure, which requires specially designed and well-maintained equipment. The improper handling and storage of anhydrous ammonia can result in permanent injury (such as cell destruction and severe chemical burns) and explosions. Methamphetamine manufacturers often obtain anhydrous ammonia by siphoning large-volume tanks at fertilizer plants and farms, and rarely have the knowledge or equipment required to properly handle it. This enhancement accounts for the inherent dangers created by such conduct, as well as the likely intended unlawful use.
Finally, this amendment modifies Appendix A (Statutory Index) by deleting the reference to 21 U.S.C. § 957, which is not a substantive criminal offense, but rather a registration provision for which violations are prosecuted under 21 U.S.C. § 960(a) or (b) (for controlled substances) or § 960(d)(6) (for listed chemicals).
6.
“(3) The offense level specified in the Drug Quantity Table set forth in subsection (c), except that if (A) the defendant receives an adjustment under § 3B1.2 (Mitigating Role); and (B) the base offense level under subsection (c) is (i) level 32, decrease by 2 levels; (ii) level 34 or level 36, decrease by 3 levels; or (iii) level 38, decrease by 4 levels.”.
Section 2D1.11 is amended by striking subsection (a) and inserting the following:
“(a) Base Offense Level: The offense level from the Chemical Quantity Table set forth in subsection (d) or (e), as appropriate, except that if (A) the defendant receives an adjustment under § 3B1.2 (Mitigating Role); and (B) the base offense level under subsection (e) is (i) level 32, decrease by 2 levels; (ii) level 34 or level 36, decrease by 3 levels; or (iii) level 38, decrease by 4 levels.”.
7.
“(3) If the offense involved—
(A) A destructive device that is a portable rocket, a missile, or a device for use in launching a portable rocket or a missile, increase by 15 levels; or
(B) A destructive device other than a destructive device referred to in subdivision (A), increase by 2 levels.”.
Section 2K2.1(b) is amended by striking the paragraph that begins “Provided, that the” and inserting the following:
“The cumulative offense level determined from the application of subsections (b)(1) through (b)(4) may not exceed level 29, except if subsection (b)(3)(A) applies.”.
The Commentary to § 2K2.1 captioned “Application Notes” is amended by striking Notes 1 through 4; and by redesignating Note 5 as Note 1.
The Commentary to § 2K2.1 captioned “Application Notes” is amended in Note 1, as redesignated by this amendment, by inserting Definitions.—”before “For purposes of this guideline:”; by inserting before “ ‘Controlled substance offense’ ” the following paragraph: “ ‘Ammunition’ has the meaning given that term in 18 U.S.C. § 921(a)(17)(A).”;
By inserting after the paragraph that begins “ ‘Crime of violence’ ” the following paragraph: “ ‘Destructive device’ has the meaning given that term in 26 U.S.C. § 5845(f).”;
And by adding at the end, the following paragraph: “ ‘Firearm’ has the meaning given that term in 18 U.S.C. § 921(a)(3).”.
The Commentary to § 2K2.1 captioned “Application Notes” is amended by inserting after Note 1, as redesignated by this amendment, the following:
“2. Firearm Described in 18 U.S.C. § 921(a)(30).—For purposes of subsection (a), a ‘firearm described in 18 U.S.C. § 921(a)(30)’ (pertaining to semiautomatic assault weapons) does not include a weapon exempted under the provisions of 18 U.S.C. § 922(v)(3).”.
The Commentary to § 2K2.1 captioned “Application Notes” is amended by redesignating Notes 6 through 19 as Notes 3 through 16, respectively.
The Commentary to § 2K2.1 captioned “Application Notes” is amended in Note 8, as redesignated by this amendment, by striking “a two-level” and inserting “the applicable”; and by adding at the end the following paragraph:
“Offenses involving such devices cover a wide range of offense conduct and involve different degrees of risk to the public welfare depending on the type of destructive device involved and the location or manner in which that destructive device was possessed or transported. For example, a pipe bomb in a populated train station creates a substantially greater risk to the public welfare, and a substantially greater risk of death or serious bodily injury, than an incendiary device in an isolated area. In a case in which the cumulative result of the increased base offense level and the enhancement under subsection (b)(3) does not adequately capture the seriousness of the offense because of the type of destructive device involved, the risk to the public welfare, or the risk of death or serious bodily injury that the destructive device created, an upward departure may be warranted.
The Commentary to § 2K2.1 captioned “Application Notes” is amended in Note 13, as redesignated by this amendment, by inserting “(
Section 2X1.1 is amended by striking subsection (d) and inserting the following:
“(d) Special Instruction
(1) Subsection (b) shall not apply to:
(A) Any of the following offenses, if such offense involved, or was intended to promote, a federal crime of terrorism as defined in 18 U.S.C. § 2332b(g)(5): 18 U.S.C. § 81; 18 U.S.C. § 930(c); 18 U.S.C. § 1362; 18 U.S.C. § 1363; 18 U.S.C. § 1992; 18 U.S.C. § 2339A; 18 U.S.C. § 2340A; 49 U.S.C. § 46504; 49 U.S.C. § 46505; and 49 U.S.C. § 60123(b).
(B) Any of the following offenses: 18 U.S.C. § 32; 18 U.S.C. § 1993; and 18 U.S.C. § 2332a.”.
Appendix A (Statutory Index) is amended in the line referenced to 18 U.S.C. § 1993(a)(8) by inserting “2A5.2 (if attempt or conspiracy to commit 18 U.S.C. § 1993(a)(4), (a)(5), or (a)(6)),” before “2A6.1”.
This amendment responds to concerns that these types of weapons, which have been used overseas, have the ability to inflict death or injury on large numbers of persons if fired at an aircraft, train, building, or similar target. Because of the inherent risks of such weapons and the fact that there is no legitimate reason to possess them, the Commission determined that the statutory maximum penalty for possession of such devices should apply in all such offenses, even after possible application of acceptance of responsibility. The amendment also re-designates Application Note 11 as Application Note 8, and adds an invited upward departure for non-MANPADS destructive devices in a case in which the two-level enhancement for such devices does not adequately capture the
The amendment also increases guideline penalties for attempts and conspiracies to commit certain offenses if those offenses involved the use of a MANPADS or similar destructive device. Affected offenses include 18 U.S.C. § 32 (Destruction of aircraft or aircraft facilities), 18 U.S.C. § 1993 (Terrorist attacks and other acts of violence against mass transportation systems), and 18 U.S.C. § 2332a (Use of certain weapons of mass destruction). The Commission amended the special instruction in subsection (d) of § 2X1.1 (Attempt, Solicitation, or Conspiracy (Not Covered by a Specific Offense Guideline)) to prohibit application of the three-level reduction for attempts and conspiracies for these offenses generally, and not just in the context of the use of a MANPADS or similar destructive device.
Finally, the amendment modifies the Statutory Index (Appendix A) reference for convictions under 18 U.S.C. § 1993(a)(8), relating to attempts, threats, or conspiracies to commit any of the substantive terrorist offenses in 18 U.S.C. § 1993(a). Under this amendment, these offenses will be referred to § 2A5.2 (Interference with Flight Crew Member or Flight Attendant; Interference with Dispatch, Operation, or Maintenance of Mass Transportation Vehicle or Ferry) rather than § 2A6.1 (Threatening or Harassing Communications).
8.
Ҥ 2K2.6. Possessing, Purchasing, or Owning Body Armor by Violent Felons
(a) Base Offense Level: 10
(b) Specific Offense Characteristic
(1) If the defendant used the body armor in connection with another felony offense, increase by 4 levels.
1. Application of Subsection (b)(1).—
(A) Meaning of “Defendant”.—Consistent with § 1B1.3 (Relevant Conduct), the term ‘defendant’, for purposes of subsection (b)(1), limits the accountability of the defendant to the defendant's own conduct and conduct that the defendant aided or abetted, counseled, commanded, induced, procured, or willfully caused.
(B) Meaning of “Felony Offense”.—For purposes of subsection (b)(1), ‘felony offense’ means any offense (federal, state, or local) punishable by imprisonment for a term exceeding one year, regardless of whether a criminal charge was brought, or a conviction obtained.
(C) Meaning of “Used”.—For purposes of subsection (b)(1), ‘used’ means the body armor was (i) actively employed in a manner to protect the person from gunfire; or (ii) used as a means of bartering. Subsection (b)(1) does not apply if the body armor was merely possessed. For example, subsection (b)(1) would not apply if the body armor was found in the trunk of a car but was not being actively used as protection.
2. Inapplicability of § 3B1.5.—If subsection (b)(1) applies, do not apply the adjustment in § 3B1.5 (Use of Body Armor in Drug Trafficking Crimes and Crimes of Violence).
3. Grouping of Multiple Counts.—If subsection (b)(1) applies (because the defendant used the body armor in connection with another felony offense) and the instant offense of conviction includes a count of conviction for that other felony offense, the counts of conviction for the 18 U.S.C. § 931 offense and that other felony offense shall be grouped pursuant to subsection (c) of § 3D1.2 (Groups of Closely Related Counts).”.
The Commentary to § 3B1.5 captioned “Application Notes” is amended by adding at the end the following:
“3. Interaction with § 2K2.6 and Other Counts of Conviction.—If the defendant is convicted only of 18 U.S.C. § 931 and receives an enhancement under subsection (b)(1) of § 2K2.6 (Possessing, Purchasing, or Owning Body Armor by Violent Felons), do not apply an adjustment under this guideline. However, if, in addition to the count of conviction under 18 U.S.C. § 931, the defendant (A) is convicted of an offense that is a drug trafficking crime or a crime of violence; and (B) used the body armor with respect to that offense, an adjustment under this guideline shall apply with respect to that offense.”.
This amendment creates a new guideline at § 2K2.6 (Possessing, Purchasing, or Owning Body Armor by Violent Felons) because there is no guideline that covers conduct sufficiently analogous to the conduct constituting a violation of 18 U.S.C. § 931.
The new guideline provides a base offense level of 10 because 18 U.S.C. § 931 offenses have lesser statutory maximum punishments than offenses involving weapon possession and trafficking. Those offenses, which are sentenced at § 2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition), have a base offense level of 12 if there is no aggravating circumstance present in the case.
The new guideline provides a four-level increase at § 2K2.6(b)(1) “[i]f the defendant used the body armor in connection with another felony offense” because violations in which the body armor was used in connection with another felony offense are more serious than those involving only possession, purchase, or ownership of body armor. “Felony offense” is defined as “any offense (federal, state, or local) punishable by imprisonment for a term exceeding one year” and does not require that a charge be brought or a conviction sustained.
The commentary also provides guidance for the scope of the terms “defendant” and “used” for purposes of § 2K2.6(b)(1). Use of the term “defendant” limits the accountability of the defendant to the defendant's own conduct and conduct that the defendant aided or abetted, counseled, commanded, induced, procured, or willfully caused. The term “used” requires that the body armor be actively used in order to protect from gunfire or be used as a means of bartering. Finally, the commentary provides that when subsection (b)(1) applies and the defendant also is convicted of the underlying offense (the offense with respect to which the body armor was used), the counts shall be grouped pursuant to subsection (c) of § 3D1.2 (Groups of Closely Related Counts).
Section 3B1.5 (Use of Body Armor in Drug Trafficking Crimes and Crimes of
9.
“(3) If the defendant fraudulently obtained or used a United States passport, increase by 4 levels.”.
The Commentary to § 2L2.2 captioned “Application Notes” is amended by striking Note 1 and inserting the following:
“1. Definition.—For purposes of this guideline, ‘immigration and naturalization offense’ means any offense covered by Chapter Two, Part L.”; by striking Note 2, and redesignating Note 3 as Note 2; and in Note 2, as redesignated by this amendment, by inserting “Application of Subsection (b)(2).—” before “Prior”.
The Commentary to § 2L2.2 captioned “Application Notes” is amended by adding at the end the following:
“3. Application of Subsection (b)(3).—The term ‘used’ is to be construed broadly and includes the attempted renewal of previously-issued passports.
4. Multiple Counts.—For the purposes of Chapter Three, Part D (Multiple Counts), a count of conviction for unlawfully entering or remaining in the United States covered by § 2L1.2 (Unlawfully Entering or Remaining in the United States) arising from the same course of conduct as the count of conviction covered by this guideline shall be considered a closely related count to the count of conviction covered by this guideline, and therefore is to be grouped with the count of conviction covered by this guideline.
5. Upward Departure Provision.—If the defendant fraudulently obtained or used a United States passport for the purpose of entering the United States to engage in terrorist activity, an upward departure may be warranted.
This amendment responds to comments received from the Departments of State and Justice to the effect that maintaining the integrity of United States passports is at the core of United States border and security efforts. Accordingly, this amendment ensures increased punishment for those defendants who threaten the security of the United States by their fraudulent abuse of United States passports.
10.
“(7) If the defendant was convicted under 49 U.S.C. § 5124 or § 46312, increase by 2 levels.”.
The Commentary to § 2Q1.2 captioned “Statutory Provisions” is amended by striking “; 49 U.S.C. § 60123(d)” and inserting “; 49 U.S.C. §§ 5124, 46312”.
The Commentary to § 2Q1.2 captioned “Application Notes” is amended by striking Note 9 and inserting the following:
“9. Other Upward Departure Provisions.—
(A) Civil Adjudications and Failure to Comply with Administrative Order.—In a case in which the defendant has previously engaged in similar misconduct established by a civil adjudication or has failed to comply with an administrative order, an upward departure may be warranted.
(B) Extreme Psychological Injury.—If the offense caused extreme psychological injury, an upward departure may be warranted.
(C) Terrorism.—If the offense was calculated to influence or affect the conduct of government by intimidation or coercion, or to retaliate against government conduct, an upward departure would be warranted.
In addition, this amendment adds an application note inviting an upward departure if the offense was calculated to influence or affect the conduct of the government by intimidation or coercion, or to retaliate against government conduct. The Commission added this departure provision to address concerns that terrorists may commit hazardous material transportation offenses because of their potential to cause a one-time, catastrophic event. The upward departure provision would apply in cases in which a defendant who has a terrorist motive is not also convicted of a “federal crime of terrorism” that would trigger application of § 3A1.4 (Terrorism).
This amendment also adds an upward departure provision that could apply if the offense resulted in extreme psychological injury. This provision conforms to the upward departure provision found at § 2Q1.4 (Tampering or Attempted Tampering with a Public Water System; Threatening to Tamper with a Public Water System).
11.
The guidelines and policy statements in this chapter apply when the convicted defendant is an organization. Organizations can act only through agents and, under federal criminal law, generally are vicariously liable for offenses committed by their agents. At the same time, individual agents are responsible for their own criminal conduct. Federal prosecutions of organizations therefore frequently involve individual and organizational co-defendants. Convicted individual agents of organizations are sentenced in accordance with the guidelines and policy statements in the preceding chapters. This chapter is designed so that the sanctions imposed upon organizations and their agents, taken together, will provide just punishment, adequate deterrence, and incentives for organizations to maintain internal mechanisms for preventing, detecting, and reporting criminal conduct.
This chapter reflects the following general principles:
First, the court must, whenever practicable, order the organization to remedy any harm caused by the offense. The resources expended to remedy the harm should not be viewed as punishment, but rather as a means of making victims whole for the harm caused.
Second, if the organization operated primarily for a criminal purpose or primarily by criminal means, the fine should be set sufficiently high to divest the organization of all its assets.
Third, the fine range for any other organization should be based on the seriousness of the offense and the culpability of the organization. The seriousness of the offense generally will be reflected by the greatest of the pecuniary gain, the pecuniary loss, or the amount in a guideline offense level fine table. Culpability generally will be determined by six factors that the sentencing court must consider. The four factors that increase the ultimate punishment of an organization are: (i) The involvement in or tolerance of criminal activity; (ii) the prior history of the organization; (iii) the violation of an order; and (iv) the obstruction of justice. The two factors that mitigate the ultimate punishment of an organization are: (i) The existence of an effective compliance and ethics program; and (ii) self-reporting, cooperation, or acceptance of responsibility.
Fourth, probation is an appropriate sentence for an organizational defendant when needed to ensure that another sanction will be fully implemented, or to ensure that steps will be taken within the organization to reduce the likelihood of future criminal conduct.
These guidelines offer incentives to organizations to reduce and ultimately eliminate criminal conduct by providing a structural foundation from which an organization may self-police its own conduct through an effective compliance and ethics program. The prevention and detection of criminal conduct, as facilitated by an effective compliance and ethics program, will assist an organization in encouraging ethical conduct and in complying fully with all applicable laws.”.
Section 8A1.2(a) is amended by inserting “, Subpart 1” after “Part B”.
Section 8A1.2(b)(2)(D) is amended by adding at the end the following:
“To determine whether the organization had an effective compliance and ethics program for purposes of § 8C2.5(f), apply § 8B2.1 (Effective Compliance and Ethics Program).”.
The Commentary to § 8A1.2 captioned “Application Notes” is amended in Note 3(c) in the second sentence by inserting “of the organization” after “high-level personnel”.
The Commentary to § 8A1.2 captioned “Application Notes” is amended by striking Note 3(k).
Chapter Eight, Part B is amended by striking the heading and inserting the following:
§ 8B2.1. Effective Compliance and Ethics Program
(a) To have an effective compliance and ethics program, for purposes of subsection (f) of § 8C2.5 (Culpability Score) and subsection (c)(1) of § 8D1.4 (Recommended Conditions of Probation—Organizations), an organization shall—
(1) Exercise due diligence to prevent and detect criminal conduct; and
(2) Otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.
Such compliance and ethics program shall be reasonably designed, implemented, and enforced so that the program is generally effective in preventing and detecting criminal conduct. The failure to prevent or detect the instant offense does not necessarily mean that the program is not generally effective in preventing and detecting criminal conduct.
(b) Due diligence and the promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with the law within the meaning of subsection (a) minimally require the following:
(1) The organization shall establish standards and procedures to prevent and detect criminal conduct.
(2)(A) The organization's governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.
(B) High-level personnel of the organization shall ensure that the organization has an effective compliance and ethics program, as described in this guideline. Specific individual(s) within high-level personnel shall be assigned overall responsibility for the compliance and ethics program.
(C) Specific individual(s) within the organization shall be delegated day-to-day operational responsibility for the compliance and ethics program. Individual(s) with operational responsibility shall report periodically to high-level personnel and, as appropriate, to the governing authority, or an appropriate subgroup of the governing authority, on the effectiveness of the compliance and ethics program. To carry out such operational responsibility, such individual(s) shall be given adequate resources, appropriate authority, and direct access to the governing authority or an appropriate subgroup of the governing authority.
(3) The organization shall use reasonable efforts not to include within the substantial authority personnel of the organization any individual whom the organization knew, or should have known through the exercise of due diligence, has engaged in illegal activities or other conduct inconsistent with an effective compliance and ethics program.
(4)(A) The organization shall take reasonable steps to communicate periodically and in a practical manner its standards and procedures, and other aspects of the compliance and ethics program, to the individuals referred to in subdivision (B) by conducting effective training programs and otherwise disseminating information appropriate to such individuals' respective roles and responsibilities.
(B) The individuals referred to in subdivision (A) are the members of the governing authority, high-level personnel, substantial authority personnel, the organization's employees, and, as appropriate, the organization's agents.
(5) The organization shall take reasonable steps—
(A) To ensure that the organization's compliance and ethics program is followed, including monitoring and auditing to detect criminal conduct;
(B) To evaluate periodically the effectiveness of the organization's compliance and ethics program; and
(C) To have and publicize a system, which may include mechanisms that allow for anonymity or confidentiality, whereby the organization's employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation.
(6) The organization's compliance and ethics program shall be promoted and enforced consistently throughout the organization through (A) appropriate incentives to perform in accordance with the compliance and ethics program; and (B) appropriate disciplinary measures for engaging in criminal conduct and for failing to take reasonable steps to prevent or detect criminal conduct.
(7) After criminal conduct has been detected, the organization shall take reasonable steps to respond
(c) In implementing subsection (b), the organization shall periodically assess the risk of criminal conduct and shall take appropriate steps to design, implement, or modify each requirement set forth in subsection (b) to reduce the risk of criminal conduct identified through this process.
1. Definitions.—For purposes of this guideline:
‘Compliance and ethics program’ means a program designed to prevent and detect criminal conduct.
‘Governing authority’ means the (A) the Board of Directors; or (B) if the organization does not have a Board of Directors, the highest-level governing body of the organization.
‘High-level personnel of the organization’ and ‘substantial authority personnel’ have the meaning given those terms in the Commentary to § 8A1.2 (Application Instructions—Organizations).
‘Standards and procedures’ means standards of conduct and internal controls that are reasonably capable of reducing the likelihood of criminal conduct.
2. Factors to Consider in Meeting Requirements of this Guideline.—
(A) In General.—Each of the requirements set forth in this guideline shall be met by an organization; however, in determining what specific actions are necessary to meet those requirements, factors that shall be considered include: (i) Applicable industry practice or the standards called for by any applicable governmental regulation; (ii) the size of the organization; and (iii) similar misconduct.
(B) Applicable Governmental Regulation and Industry Practice.—An organization's failure to incorporate and follow applicable industry practice or the standards called for by any applicable governmental regulation weighs against a finding of an effective compliance and ethics program.
(C) The Size of the Organization.—
(i) In General.—The formality and scope of actions that an organization shall take to meet the requirements of this guideline, including the necessary features of the organization's standards and procedures, depend on the size of the organization.
(ii) Large Organizations.—A large organization generally shall devote more formal operations and greater resources in meeting the requirements of this guideline than shall a small organization. As appropriate, a large organization should encourage small organizations (especially those that have, or seek to have, a business relationship with the large organization) to implement effective compliance and ethics programs.
(iii) Small Organizations.—In meeting the requirements of this guideline, small organizations shall demonstrate the same degree of commitment to ethical conduct and compliance with the law as large organizations. However, a small organization may meet the requirements of this guideline with less formality and fewer resources than would be expected of large organizations. In appropriate circumstances, reliance on existing resources and simple systems can demonstrate a degree of commitment that, for a large organization, would only be demonstrated through more formally planned and implemented systems.
Examples of the informality and use of fewer resources with which a small organization may meet the requirements of this guideline include the following: (I) The governing authority's discharge of its responsibility for oversight of the compliance and ethics program by directly managing the organization's compliance and ethics efforts; (II) training employees through informal staff meetings, and monitoring through regular ‘walk-arounds’ or continuous observation while managing the organization; (III) using available personnel, rather than employing separate staff, to carry out the compliance and ethics program; and (IV) modeling its own compliance and ethics program on existing, well-regarded compliance and ethics programs and best practices of other similar organizations.
(D) Recurrence of Similar Misconduct.—Recurrence of similar misconduct creates doubt regarding whether the organization took reasonable steps to meet the requirements of this guideline. For purposes of this subdivision, ‘similar misconduct’ has the meaning given that term in the Commentary to § 8A1.2 (Application Instructions—Organizations).
3. Application of Subsection (b)(2).—High-level personnel and substantial authority personnel of the organization shall be knowledgeable about the content and operation of the compliance and ethics program, shall perform their assigned duties consistent with the exercise of due diligence, and shall promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.
If the specific individual(s) assigned overall responsibility for the compliance and ethics program does not have day-to-day operational responsibility for the program, then the individual(s) with day-to-day operational responsibility for the program typically should, no less than annually, give the governing authority or an appropriate subgroup thereof information on the implementation and effectiveness of the compliance and ethics program.
4. Application of Subsection (b)(3).—
(A) Consistency with Other Law.—Nothing in subsection (b)(3) is intended to require conduct inconsistent with any Federal, State, or local law, including any law governing employment or hiring practices.
(B) Implementation.—In implementing subsection (b)(3), the organization shall hire and promote individuals so as to ensure that all individuals within the high-level personnel and substantial authority personnel of the organization will perform their assigned duties in a manner consistent with the exercise of due diligence and the promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with the law under subsection (a). With respect to the hiring or promotion of such individuals, an organization shall consider the relatedness of the individual's illegal activities and other misconduct (
5. Application of Subsection (b)(6).—Adequate discipline of individuals responsible for an offense is a necessary component of enforcement; however, the form of discipline that will be appropriate will be case specific.
6. Application of Subsection (c).—To meet the requirements of subsection (c), an organization shall:
(A) Assess periodically the risk that criminal conduct will occur, including assessing the following:
(i) The nature and seriousness of such criminal conduct.
(ii) The likelihood that certain criminal conduct may occur because of the nature of the organization's
(iii) The prior history of an organization may indicate types of criminal conduct that it shall take actions to prevent and detect.
(B) Prioritize periodically, as appropriate, the actions taken pursuant to any requirement set forth in subsection (b), in order to focus on preventing and detecting the criminal conduct identified under subdivision (A) of this note as most likely to occur.
(C) Modify, as appropriate, the actions taken pursuant to any requirement set forth in subsection (b) to reduce the risk of criminal conduct identified under subdivision (A) of this note as most likely to occur.
The requirements set forth in this guideline are intended to achieve reasonable prevention and detection of criminal conduct for which the organization would be vicariously liable. The prior diligence of an organization in seeking to prevent and detect criminal conduct has a direct bearing on the appropriate penalties and probation terms for the organization if it is convicted and sentenced for a criminal offense.”.
The Commentary to § 8C2.4 captioned “Application Notes” is amended in Note 2 by striking “(Larceny, Embezzlement, and Other Forms of Theft)” and inserting “(Theft, Property Destruction, and Fraud)”.
Section 8C2.5 is amended by striking subsection (f) and inserting the following:
“(f) Effective Compliance and Ethics Program
(1) If the offense occurred even though the organization had in place at the time of the offense an effective compliance and ethics program, as provided in § 8B2.1 (Effective Compliance and Ethics Program), subtract 3 points.
(2) Subsection (f)(1) shall not apply if, after becoming aware of an offense, the organization unreasonably delayed reporting the offense to appropriate governmental authorities.
(3)(A) Except as provided in subdivision (B), subsection (f)(1) shall not apply if an individual within high-level personnel of the organization, a person within high-level personnel of the unit of the organization within which the offense was committed where the unit had 200 or more employees, or an individual described in § 8B2.1(b)(2)(B) or (C), participated in, condoned, or was willfully ignorant of the offense.
(B) There is a rebuttable presumption, for purposes of subsection (f)(1), that the organization did not have an effective compliance and ethics program if an individual—
(i) Within high-level personnel of a small organization; or
(ii) Within substantial authority personnel, but not within high-level personnel, of any organization,
The Commentary to § 8C2.5 captioned “Application Notes” is amended by striking Note 1 and inserting the following:
“1. Definitions.—For purposes of this guideline, ‘condoned’, ‘prior criminal adjudication’, ‘similar misconduct’, ‘substantial authority personnel’, and ‘willfully ignorant of the offense’ have the meaning given those terms in Application Note 3 of the Commentary to § 8A1.2 (Application Instructions—Organizations).
‘Small Organization’, for purposes of subsection (f)(3), means an organization that, at the time of the instant offense, had fewer than 200 employees.”.
The Commentary to § 8C2.5 captioned “Application Notes” is amended in Note 3 in the last sentence by striking “entire organization” and inserting “organization in its entirety”.
The Commentary to § 8C2.5 captioned “Application Notes” is amended in Note 10 by striking “The second proviso in subsection (f)” and inserting “Subsection (f)(2)”; and by striking “this proviso” and inserting “subsection (f)(2)”.
The Commentary to § 8C2.5 captioned “Application Notes” is amended in Note 12 by adding at the end the following:
“Waiver of attorney-client privilege and of work product protections is not a prerequisite to a reduction in culpability score under subdivisions (1) and (2) of subsection (g) unless such waiver is necessary in order to provide timely and thorough disclosure of all pertinent information known to the organization.”.
Section 8C2.8(a) is amended in subdivision (9) by striking “and”; in subdivision (10) by striking the period at the end of the subdivision and inserting “; and”; and by adding at the end the following:
“(11) whether the organization failed to have, at the time of the instant offense, an effective compliance and ethics program within the meaning of § 8B2.1 (Effective Compliance and Ethics Program).”.
The Commentary to § 8C2.8 captioned “Application Notes” is amended in Note 4 in the first sentence by inserting “within high-level personnel of” after “organization or”.
Section 8C4.10 is amended by striking “(Effective Program to Prevent and Detect Violations of Law)” and inserting “(Effective Compliance and Ethics Program)”; and by adding at the end the following paragraph:
“Similarly, if, at the time of the instant offense, the organization was required by law to have an effective compliance and ethics program, but the organization did not have such a program, an upward departure may be warranted.”.
Chapter Eight, Part D, is amended in the “Introductory Commentary” by striking “8D1.5” and inserting “8D1.4, and § 8F1.1,”.
Section 8D1.1(a) is amended by striking subdivision (3) and inserting the following:
“(3) If, at the time of sentencing, (A) the organization (i) has 50 or more employees, or (ii) was otherwise required under law to have an effective compliance and ethics program; and (B) the organization does not have such a program;”.
Section 8D1.4(b)(4) is amended by striking “(1)” and inserting “(A)”; by striking “(2)” and inserting “(B)”; and by striking “(3)” and inserting “(C)”.
Section 8D1.4(c) is amended by striking subdivision (1) and inserting the following:
“(1) The organization shall develop and submit to the court an effective compliance and ethics program
The Commentary to § 8D1.4 captioned “Application Notes” is amended by striking “Notes” in the heading and inserting “Note”; and in Note 1 by striking “a program to prevent and detect violations of law” and inserting “a compliance and ethics program”; and by striking the last sentence of the first paragraph and inserting “The court should approve any program that appears reasonably calculated to prevent and detect criminal conduct, as long as it is consistent with § 8B2.1 (Effective Compliance and Ethics Program), and any applicable statutory and regulatory requirements.”.
Chapter Eight, Part D is amended by striking § 8D1.5 and its accompanying commentary.
Chapter Eight is amended by adding at the end the following Part:
§ 8F1.1. Violations of Conditions of Probation—Organizations (Policy Statement)
Upon a finding of a violation of a condition of probation, the court may extend the term of probation, impose more restrictive conditions of probation, or revoke probation and resentence the organization.
1. Appointment of Master or Trustee.—In the event of repeated violations of conditions of probation, the appointment of a master or trustee may be appropriate to ensure compliance with court orders.
2. Conditions of Probation.—Mandatory and recommended conditions of probation are specified in §§ 8D1.3 (Conditions of Probation—Organizations) and 8D1.4 (Recommended Conditions of Probation—Organizations).”.
Consistent with the Act's focus on deterring criminal misconduct, this amendment revises the introductory commentary to Chapter Eight to highlight the importance of structural safeguards designed to prevent and detect criminal conduct. First and foremost among these safeguards is a regime of internal crime prevention and self-policing (“an effective compliance and ethics program”). While Chapter Eight derives its authority and content from the federal criminal law, an effective compliance and ethics program not only will prevent and detect criminal conduct, but also should facilitate compliance with all applicable laws.
Under § 8C2.5(g) (Culpability Score), an effective compliance and ethics program is one of the mitigating factors that can reduce an organization's fine punishment under Chapter Eight. The absence of an effective program may be a reason for the court to place an organization on probation, and the implementation of an effective program may be a condition of probation for organizations under § 8D1.4(c) (Recommended Conditions of Probation-Organizations).
In order to emphasize the importance of compliance and ethics programs and to provide more prominent guidance on the requirements for an effective program, the amendment elevates the criteria for an effective compliance program previously set forth in the Commentary to § 8A1.2 (Application Instructions—Organizations) into a separate guideline. Furthermore, the amendment elaborates upon these criteria, introducing additional rigor generally and imposing significantly greater responsibilities on the organization's governing authority and executive leadership.
Section 8B2.1(a)(1) sets forth the existing requirement that an organization exercise due diligence to prevent and detect criminal conduct, but adds the requirement that an organization “otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.” This addition is intended to reflect the emphasis on ethical conduct and values incorporated into recent legislative and regulatory reforms, such as those provided by the Act.
Section 8B2.1(b) provides that due diligence and the promotion of desired organizational culture are indicated by the fulfilment of seven minimum requirements, which are the hallmarks of an effective program that encourages compliance with the law and ethical conduct. While the framework of requirements is derived from the existing criteria for an effective compliance program at Application Note 3(k) to § 8A1.2, significant additional guidance is provided.
First, § 8B2.1(b)(1) provides that organizations must establish “standards and procedures to prevent and detect criminal conduct.” Application Note 1 establishes that “standards and procedures” encompass “standards of conduct and internal controls that are reasonably capable of reducing the likelihood of criminal conduct.”
Second, the new guideline replaces the requirement in Application Note 3(k)(2) to § 8A1.2 that “specific individual(s) within high-level personnel of the organization must have been assigned overall responsibility to oversee compliance” with more specific and exacting requirements. Section 8B2.1(b)(2) defines the specific roles and reporting relationships of particular categories of personnel with respect to compliance and ethics program responsibilities. Specifically, the Commission has determined that the organization's governing authority must “be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.” Application Note 1 defines “governing authority” as the “(A) Board of Directors, or (B) if the organization does not have a Board of Directors, the highest-level governing body of the organization.”
Section 8B2.1(b)(2) provides that it is the organizational leadership, defined in the guidelines as “high-level personnel,” who must ensure that the organization's program is effective. The accompanying commentary at Application Note 1 retains existing definitions for the terms “high-level personnel” and “substantial authority personnel” of the organization. Section
Section 8B2.1(b)(2)(C) requires that certain individual(s) have day-to-day responsibility for the compliance and ethics program and adequate resources to carry out the associated tasks. Specifically, § 8B2.1 requires that the individual assigned day-to-day operational responsibility for the program, whether it be a high-level person or an employee to whom this task is assigned, report to organizational leadership and the governing authority on the program. If authority is delegated, the governing authority must receive reports from such individuals at least annually, according to the commentary in Application Note 3. In order to carry out such responsibility, the new guideline mandates that such individual or individuals, no matter the level, must “be given adequate resources, appropriate authority, and direct access to the governing authority or an appropriate subgroup of the governing authority.”
Third, § 8B2.1(b)(3) replaces the previous requirement that substantial authority personnel be screened for their “propensity to engage in violations of law” with the requirement that the organization “use reasonable efforts not to include within the substantial authority personnel of the organization any individual whom the organization knew, or should have known through the exercise of due diligence, has engaged in illegal activities or other conduct inconsistent with an effective compliance and ethics program.” Application Note 4(A) makes explicit that this provision does not require any “conduct inconsistent with any Federal, State, or local law, including any law governing employment or hiring practices.” Application Note 4(B) provides that the organization shall hire and promote individuals so as to ensure that all individuals within the organizational leadership will perform their assigned duties in a manner consistent with the exercise of due diligence and the promotion of an organizational culture that encourages a commitment to compliance with ethics and the law. If an individual has engaged in illegal activities, the organization has an obligation to consider the relatedness of the individual's illegal activities and other misconduct to the specific responsibilities such individual is expected to be assigned. The recency of the individual's illegal activities and other misconduct also should be considered.
Fourth, § 8B2.1(b)(4) makes compliance and ethics training a requirement, and specifically extends the training requirement to the upper levels of an organization, including the governing authority and high-level personnel, in addition to all of the organization's employees and agents, as appropriate. Furthermore, subsection (b)(4) establishes that this communication and training obligation is ongoing, requiring “periodic” updates.
Fifth, § 8B2.1(b)(5) expands the existing requirement regarding reasonable steps to achieve compliance. Specifically, the amendment mandates that organizations use auditing and monitoring systems designed to detect criminal conduct. It also adds the specific requirement that the organization periodically evaluate the effectiveness of its compliance and ethics program. Significantly, the new guideline expands the focus of internal reporting from simply reporting “the criminal conduct * * * of others” to using internal systems to either “report or seek guidance regarding potential or actual criminal conduct.” The addition of “seeking guidance” is consistent with the increased focus of this guideline on the prevention and deterrence of wrongdoing within organizations. This section also replaces the existing reference to “reporting systems without fear of retribution” with the more specific requirement that the organization must have “a system, which may include mechanisms that allow for anonymity or confidentiality, whereby the organization's employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation.”
The Commission is aware that both anonymous and confidential mechanisms have inherent value and limitations. For example, anonymous mechanisms may hinder an organization from engaging in an effective dialogue with the potential whistleblower to discover additional information that might lead to a more efficient detection of the wrongdoing. Confidential mechanisms may permit the dialogue and development of maximum information, but the ability of organizations to ensure total confidentiality may be limited by legal obligations relating to self-disclosure, law enforcement subpoenas, and civil discovery requests. The Commission intends for an organization to have maximum flexibility in implementing a system that is best suited to its culture and conforms to applicable law. A responsible organization is expected, as appropriate, to communicate to its employees any applicable limitations of its internal reporting mechanisms.
Sixth, § 8B2.1(b)(6) broadens the existing criterion that the compliance standards be enforced through disciplinary measures by adding that such standards also be encouraged through “appropriate incentives to perform in accordance with the compliance and ethics program.” This addition articulates both a duty to promote proper conduct in whatever manner an organization deems appropriate, as well as a duty to sanction improper conduct.
Finally, § 8B2.1(b)(7) retains the requirement that an organization take reasonable steps to respond to and prevent further similar criminal conduct. This dual duty underscores the organization's obligation to address both specific instances of misconduct and systemic shortcomings that compromise the deterrent effect of its compliance and ethics program.
In addition to the seven requirements for a compliance and ethics program, § 8B2.1(c) expressly provides, as an essential component of the design, implementation, and modification of an effective program, that an organization must periodically assess the risk of the occurrence of criminal conduct. The new guideline includes at Application Note 6 various factors that should be addressed when assessing relevant risks. Specifically, organizations should evaluate the nature and seriousness of potential criminal conduct, the likelihood that certain criminal conduct may occur because of the nature of the organization's business, and the prior history of the organization. To be effective, this process must be ongoing. Organizations must periodically prioritize their compliance and ethics resources to target those potential criminal activities that pose the greatest threat in light of the risks identified.
The amendment also provides additional guidance with respect to the implementation of compliance and ethics programs by small organizations by including frequent references to small organizations throughout the commentary of § 8B2.1 and providing illustrations (
This amendment also changes the automatic preclusion for compliance program credit provided in § 8C2.5(f) (Culpability Score) for “small organizations.” A “small organization” is defined, for this subsection only, as an organization having fewer than 200 employees. This modification is intended to assist smaller organizations that previously may have been automatically precluded, because of their size, from arguing for a culpability score reduction based upon an effective compliance and ethics program that fulfills all of the guideline requirements. Rather than precluding absolutely these small organizations from obtaining the reduction if certain categories of high-level personnel are involved in the offense of conviction, § 8C2.5(f)(3) establishes that an offense by an individual within high-level personnel of the organization results in a rebuttable presumption for a small organization that it did not have an effective program. The small organization, however, can rebut that presumption by demonstrating that it had an effective program, despite the involvement in the offense of a person high in the organization's structure.
This amendment also addresses concerns about the relationship between obtaining credit under § 8C2.5(g) and waiver of the attorney-client privilege and the work product protection doctrine. Pursuant to § 8C2.5(g)(1) and (2), an organization's culpability score will be reduced if it “fully cooperated in the investigation” of its wrongdoing, among other factors. The Commission's Ad Hoc Advisory Group on the Organizational Sentencing Guidelines studied the relationship between waivers and § 8C2.5(g) by obtaining testimony and conducting its own research, including a survey of United States Attorneys' Offices (all of which are described at Part V of the Advisory Group Report of October 7, 2003). The Commission addresses some of these concerns by providing at Application Note 12 that waiver of the attorney-client privilege and of work product protections “is not a prerequisite to a reduction in culpability score under subdivisions (1) and (2) of subsection (g) unless such waiver is necessary in order to provide timely and thorough disclosure of all pertinent information known to the organization.” The Commission expects that such waivers will be required on a limited basis. See “United States Attorneys” Bulletin,” November 2003, Volume 51, Number 6, pp. 1, 8.
12.
The Commentary to § 1B1.4 captioned “Background” is amended in the fifth sentence by striking “sentencing above the guideline range” and inserting “an upward departure”.
The Commentary to § 1B1.8 captioned “Application Notes” is amended in Note 1 in the third sentence by striking “increase the defendant's sentence above the applicable guideline range by upward departure” and inserting “depart upward”; and in the last sentence by striking “below the applicable guideline range” and inserting “downward”.
Section 2B1.1(b)(10), as redesignated by Amendment 3 of this document, is amended in subdivision (A) by striking “device-making equipment” and inserting “(i) device-making equipment, or (ii) authentication feature”; in subdivision (B) by inserting “(i)” before “unauthorized access”; and by inserting “, or (ii) authentication feature” after “counterfeit access device”; and in subdivision (C)(i) by striking the semi-colon and inserting a comma.
The Commentary to § 2B1.1 captioned “Application Notes” is amended in Note 4 by striking subdivision (C)(ii), as redesignated by Amendment 3 of this document, and inserting the following:
“(ii) Special Rule.—A case described in subdivision (C)(i) of this note that involved—
(I) A United States Postal Service relay box, collection box, delivery vehicle, satchel, or cart, shall be considered to have involved at least 50 victims.
(II) A housing unit cluster box or any similar receptacle that contains multiple mailboxes, whether such receptacle is owned by the United States Postal Service or otherwise owned, shall, unless proven otherwise, be presumed to have involved the number of victims corresponding to the number of mailboxes in each cluster box or similar receptacle.”.
The Commentary to § 2B1.1 captioned “Application Notes” is amended in Note 7, as redesignated by Amendment 3 of this document, by striking “(b)(7)” each place it appears and inserting “(b)(8)”; and in Note 8, as redesignated by Amendment 3 of this document, by striking “(b)(8)” each place it appears and inserting “(b)(9)”.
The Commentary to § 2B1.1 captioned “Application Notes” is amended in Note 9, as redesignated by Amendment 3 of this document, by striking “(b)(9)” each place it appears and inserting “(b)(10)”; in subdivision (A) by inserting before the paragraph that begins “ ‘Counterfeit access device’ ” the following paragraph:
“ ‘Authentication feature’ has the meaning given that term in 18 U.S.C. § 1028(d)(1).”; in the paragraph that begins “ ‘Means of identification’ ” by striking “(d)(4)” and inserting “(d)(7)”; and in subdivision (B) by inserting “Authentication Features and” before “Identification Documents.”; and by inserting “authentication features,” after “involving”.
The Commentary § 2B1.1 captioned “Application Notes” is amended in Note 10, as redesignated by Amendment 3 of this document, by striking “(b)(10)” each place it appears and inserting “(b)(11)”; in Note 11, as redesignated by Amendment 3 of this document, by striking “(b)(12)” each place it appears and inserting “(b)(13)”; in Note 12, as redesignated by Amendment 3 of this document, by striking “(b)(12)” each place it appears and inserting “(b)(13)”; in Note 13, as redesignated by Amendment 3 of this document, by striking “(b)(13)” each place it appears and inserting “(b)(14)”; and by striking “(b)(12)(B)” each place it appears and inserting “(b)(13)(B)”; in Note 14, as redesignated by Amendment 3 of this document, by striking “(b)(14)” and inserting “(b)(15)”; and in Note 19(B), as redesignated by Amendment 3 of this document, by striking “(b)(13)(iii)” and inserting “(b)(14)(iii)”.
The Commentary to § 2B1.1 captioned “Background” is amended in the ninth paragraph by striking “Subsection (b)(7)(D)” and inserting “Subsection (b)(8)(D)”; in the tenth paragraph by striking “Subsection (b)(8)” and inserting “Subsection (b)(9)”; in the eleventh paragraph by striking “Subsections (b)(9)(A) and (B)” and inserting “Subsections (b)(10)(A)(i) and (B)(i)”; in the twelfth paragraph by striking “Subsection (b)(9)(C)” and inserting “Subsection (b)(10)(C)”; in the thirteenth paragraph by striking “Subsection (b)(11)(B)” and inserting “Subsection (b)(12)(B)”; in the fourteenth paragraph by striking “Subsection (b)(12)(A)” and inserting “Subsection (b)(13)(A)”; in the fifteenth paragraph by striking “Subsection (b)(12)(B)” and inserting “Subsection (b)(13)(B)”; in the sixteenth paragraph by striking “Subsection (b)(13) implements” and inserting “Subsection (b)(14) implements”; and by striking “subsection (b)(13)(B)” and inserting “subsection (b)(14)(B)”.
The Commentary to § 2D1.1 captioned “Application Notes” is amended in Note 7 by striking “sentence below the applicable guideline range” and inserting “downward departure”.
The Commentary to § 2R1.1 captioned “Application Notes” is amended in Note 7 by striking “, or even above,”; and by inserting “, or an upward departure,” after “guideline range”.
The Commentary to § 2T1.8 captioned “Application Note” is amended in Note 1 by striking “a sentence above the guidelines” and inserting “an upward departure”.
Chapter Two, Part T, Subpart 3, is amended in the “Introductory Commentary” by striking “imposing a sentence above that specified in the guideline in this Subpart” and inserting “departing upward”.
Chapter Two, Part X is amended by adding at the end the following new Subpart:
§ 2X6.1. Use of a Minor in a Crime of Violence.
(a) Base Offense Level: 4 plus the offense level from the guideline applicable to the underlying crime of violence.
1. Definition.—For purposes of this guideline, ‘underlying crime of violence’ means the crime of violence as to which the defendant is convicted of using a minor.
2. Inapplicability of § 3B1.4.—Do not apply the adjustment under § 3B1.4 (Using a Minor to Commit a Crime).
3. Multiple Counts.—
(A) In a case in which the defendant is convicted under both 18 U.S.C. § 25 and the underlying crime of violence, the counts shall be grouped pursuant to subsection (a) of § 3D1.2 (Groups of Closely Related Counts).
(B) Multiple counts involving the use of a minor in a crime of violence shall not be grouped under § 3D1.2.”.
The Commentary to § 3C1.1 captioned “Application Notes” is amended in Note 5(b) by striking “3(g)” and inserting “4(g)”.
Section 3D1.2(d) is amended by striking the period after “2P1.3” and inserting a semi-colon; and by inserting after the line that begins “§§ 2P1.1,” the following new line: “§ 2X6.1.”.
The Commentary to § 3D1.3 captioned “Application Notes” is amended in Note 4 by striking “a sentence above the guideline range” and inserting “an upward departure”.
The Commentary to § 4B1.2 captioned “Application Notes” is amended in Note 1 in the first sentence of the paragraph that begins “ ‘Crime of violence’ ” does not include” by inserting “, unless the possession was of a firearm described in 26 U.S.C. § 5845(a)” before the period.
The Commentary to § 4B1.2 captioned “Application Notes” is amended in Note 1 by inserting before the paragraph that begins “Unlawfully possessing a prohibited flask” the following paragraph:
“Unlawfully possessing a firearm described in 26 U.S.C. § 5845(a) (
The Commentary to § 4B1.4 captioned “Application Note” is amended by striking “Note” in the heading and inserting “Notes”; and by adding at the end the following:
“2. Application of § 4B1.4 in Cases Involving Convictions Under 18 U.S.C. § 844(h), § 924(c), or § 929(a).—If a sentence under this guideline is imposed in conjunction with a sentence for a conviction under 18 U.S.C. § 844(h), § 924(c), or § 929(a), do not apply either subsection (b)(3)(A) or (c)(2). A sentence under 18 U.S.C. § 844(h), § 924(c), or § 929(a) accounts for the conduct covered by subsections (b)(3)(A) and (c)(2) because of the relatedness of the conduct covered by these subsections to the conduct that forms the basis for the conviction under 18 U.S.C. § 844(h), § 924(c), or § 929(a).
In a few cases, the rule provided in the preceding paragraph may result in a guideline range that, when combined with the mandatory consecutive sentence under 18 U.S.C. § 844(h), § 924(c), or § 929(a), produces a total maximum penalty that is less than the maximum of the guideline range that would have resulted had there not been a count of conviction under 18 U.S.C. § 844(h), § 924(c), or § 929(a) (
Section 5C1.2(a) is amended by striking “verbatim”.
The Commentary to § 5G1.2 captioned “Application Notes” is amended in Note 3(B)(iii) in the first sentence by striking “2113(a) (20 year” and inserting “113(a)(3) (10 year”; in the second sentence by striking “400” and inserting “460”, and by striking “360-life” and inserting “460-485 months”; and in the third sentence by striking “40” and inserting “100”, and by striking “2113(a)” and inserting “113(a)(3)”.
Section 5H1.1 is amended by striking “sentence should be outside the applicable guideline range” and inserting “departure is warranted”; by striking “impose a sentence below the applicable guideline range when” and inserting “depart downward in a case in which”; and by inserting “; Gambling Addiction” after “Abuse”.
Section 5H1.2 is amended by striking “sentence should be outside the applicable guideline range” and inserting “departure is warranted”.
Section 5H1.3 is amended by striking “sentence should be outside the applicable guideline range” and inserting “departure is warranted”.
Section 5H1.5 is amended by striking “sentence should be outside the applicable guideline range” and inserting “departure is warranted”.
Chapter Five, Part H is amended by striking § 5H1.6 and inserting the following:
5H1.6. Family Ties and Responsibilities (Policy Statement).
In sentencing a defendant convicted of an offense other than an offense described in the following paragraph, family ties and responsibilities are not ordinarily relevant in determining whether a departure may be warranted.
In sentencing a defendant convicted of an offense involving a minor victim under section 1201, an offense under section 1591, or an offense under chapter 71, 109A, 110, or 117, of title 18, United States Code, family ties and responsibilities and community ties are not relevant in determining whether a sentence should be below the applicable guideline range.
Family responsibilities that are complied with may be relevant to the determination of the amount of restitution or fine.”.
The Commentary to § 5H1.6 is amended by adding at the end the following:
“
Section 5H1.11 is amended by striking “sentence should be outside the applicable guideline range” and inserting “departure is warranted”.
Section 5H1.12 is amended by striking “grounds for imposing a sentence outside the applicable guideline range” and inserting “in
Section 5K2.14 is amended by striking “increase the sentence above the guideline range” and inserting “depart upward”.
Section 5K2.16 is amended by striking “departure below the applicable guideline range for that offense” and inserting “downward departure”.
Section 5K2.21 is amended by striking “increase the sentence above the guideline range” and inserting “depart upward”.
Section 5K2.22 is amended by striking “impose a sentence below the applicable guideline range” each place it appears and inserting “depart downward”; and by striking “for imposing a sentence below the guidelines” and inserting “to depart downward”.
Section 5K2.23 is amended by striking “sentence below the applicable guideline range” and inserting “downward departure”.
Section 6A1.1 is amended by striking “A probation officer” and all that follows through “presentence report.” and inserting the following:
“(a) The probation officer must conduct a presentence investigation and submit a report to the court before it imposes sentence unless—
(1) 18 U.S.C. § 3593(c) or another statute requires otherwise; or
(2) The court finds that the information in the record enables it to meaningfully exercise its sentencing authority under 18 U.S.C. § 3553, and the court explains its finding on the record.
Rule 32(c)(1)(A), Fed. R. Crim. P.
(b) The defendant may not waive preparation of the presentence report.”.
The Commentary to § 6A1.1 is amended to read as follows:
A thorough presentence investigation ordinarily is essential in determining the facts relevant to sentencing. Rule 32(c)(1)(A) permits the judge to dispense with a presentence report in certain limited circumstances, as when a specific statute requires or when the court finds sufficient information in the record to enable it to exercise its statutory sentencing authority meaningfully and explains its finding on the record.”.
Chapter Six, Part A is amended by striking § 6A1.2 and its accompanying commentary and inserting the following:
Ҥ 6A1.2. Disclosure of Presentence Report; Issues in Dispute (Policy Statement)
(a) The probation officer must give the presentence report to the defendant, the defendant's attorney, and an attorney for the government at least 35 days before sentencing unless the defendant waives this minimum period. Rule 32(e)(2), Fed. R. Crim. P.
(b) Within 14 days after receiving the presentence report, the parties must state in writing any objections, including objections to material information, sentencing guideline ranges, and policy statements contained in or omitted from the report. An objecting party must provide a copy of its objections to the opposing party and to the probation officer. After receiving objections, the probation officer may meet with the parties to discuss the objections. The probation officer may then investigate further and revise the presentence report accordingly. Rule 32(f), Fed. R. Crim. P.
(c) At least 7 days before sentencing, the probation officer must submit to the court and to the parties the presentence report and an addendum containing any unresolved objections, the grounds for those objections, and the probation officer's comments on them. Rule 32(g), Fed. R. Crim. P.
Section 6A1.3(b) is amended by striking “Rule 32(c)(1)” and inserting “Rule 32(i)”.
The Commentary to § 6A1.3 is amended by striking the first paragraph; by striking “117 S. Ct. 633, 635” and inserting “519 U.S. 148, 154”; and by striking “117 S. Ct. at 637” and inserting “519 U.S. at 157”.
Chapter Six, Part A is amended by adding at the end the following:
Ҥ 6A1.4. Notice of Possible Departure (Policy Statement)
Before the court may depart from the applicable sentencing guideline range on a ground not identified for departure either in the presentence report or in a party's prehearing submission, the court must give the parties reasonable notice that it is contemplating such a departure. The notice must specify any ground on which the court is contemplating a departure. Rule 32(h), Fed. R. Crim. P.
Chapter Six, Part B is amended by striking the Introductory Commentary and inserting the following:
Policy statements governing the acceptance of plea agreements under Rule 11(c), Fed. R. Crim. P., are intended to ensure that plea negotiation practices: (1) Promote the statutory purposes of sentencing prescribed in 18 U.S.C. § 3553(a); and (2) do not perpetuate unwarranted sentencing disparity.
These policy statements make clear that sentencing is a judicial function and that the appropriate sentence in a guilty plea case is to be determined by the judge. The policy statements also ensure that the basis for any judicial decision to depart from the guidelines will be explained on the record.”.
Section 6B1.1 is amended by striking subsections (a), (b), and (c) and inserting the following:
“(a) The parties must disclose the plea agreement on open court when the plea is offered, unless the court for good cause allows the parties to disclose the plea agreement on camera. Rule 11(c)(2), Fed. R. Crim. P.
(b) To the extent the plea agreement is of the type specified in Rule 11(c)(1)(B), the court must advise the defendant that the defendant has no right to withdraw the plea if the court does not follow the recommendation or request. Rule 11(c)(3)(B), Fed. R. Crim. P.
(c) To the extent the plea agreement is of the type specified in Rule 11(c)(1)(A) or (C), the court may accept the agreement, reject it, or defer a decision until the court has reviewed the presentence report. Rule 11(c)(3)(A), Fed. R. Crim. P.”.
The Commentary to § 6B1.1 is amended in the first paragraph by striking “Rule 11(e)” and inserting “Rule 11(c)”;
“Section 6B1.1(c) deals with the timing of the court's decision regarding whether to accept or reject the plea agreement. Rule 11(c)(3)(A) gives the court discretion to accept or reject the plea agreement immediately or defer a decision pending consideration of the presentence report. Given that a presentence report normally will be prepared, the Commission recommends that the court defer acceptance of the plea agreement until the court has reviewed the presentence report.”.
Section 6B1.3 is amended by striking “If a plea” and all that follows through “Fed. R. Crim. P.” and inserting the following:
“If the court rejects a plea agreement containing provisions of the type specified in Rule 11(c)(1)(A) or (C), the court must do the following on the record and in open court (or, for good cause, in camera)—
(a) Inform the parties that the court rejects the plea agreement;
(b) Advise the defendant personally that the court is not required to follow the plea agreement and give the defendant an opportunity to withdraw the plea; and
(c) Advise the defendant personally that if the plea is not withdrawn, the court may dispose of the case less favorably toward the defendant than the plea agreement contemplated.
Rule 11(c)(5), Fed. R. Crim. P.”.
The Commentary to § 6B1.3 is amended by striking “Rule 11(e)(4)”and inserting “Rule 11(c)(5)”; and by striking “that would require dismissal of charges or imposition of a specific sentence.” and inserting a period.
Appendix A is amended by inserting after the line referenced to 18 U.S.C. § 4 the following new line: “18 U.S.C. § 25 2X6.1”.
First, this amendment corrects a typographical error in Application Note 4 to § 3C1.1 (Obstructing or Impeding the Administration of Justice) by changing a reference to Application Note 3(g) to 4(g).
Second, this amendment makes a number of conforming changes to various guideline provisions and commentary as a result of departure amendments previously made in furtherance of the Prosecutorial Remedies and Other Tools to end the Exploitation of Children Today Act of 2003, Pub. L. 108-21 (the “PROTECT Act”).
Third, this amendment corrects an error in an example provided in Application Note 3(B)(iii) of § 5G1.2 (Sentencing on Multiple Counts of Conviction).
Fourth, this amendment generally updates Chapter Six (Sentencing Procedures and Plea Agreements) in response to a number of amendments that were made to the Federal Rules of Criminal Procedure effective December 1, 2002. While some of these changes to the Rules were substantive, the bulk of the changes to Rules 11 and 32 of the Federal Rules of Criminal Procedure were organizational and stylistic. These guideline amendments conform to those changes made to the Federal Rules of Criminal Procedure with respect to such issues as deadlines for disputed issues and requirements for disclosure of presentence reports, as well as procedures the court must follow in rejecting certain plea agreements. Certain outdated commentary also has been deleted.
Fifth, this amendment broadens the special multiple victim rule in Application Note 4(C)(ii) of § 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States), as redesignated by Amendment 3 of this document, for offenses involving stolen United States mail. The rule is expanded to include theft of mail from housing unit cluster boxes, whether owned by the United States Postal Service or otherwise. The amendment provides a presumption that a theft from such a cluster box involves the number of victims corresponding to the number of mailboxes contained in the cluster box. The same rationale for the original special rule applies to this expansion: (i) Unique proof problems in that once entry is gained to such a cluster box and mail is removed, it is difficult to determine the number of persons from whom mail was stolen; (ii) the frequently significant, but difficult to quantify, non-monetary losses; and (iii) the importance of maintaining the integrity of the United States mail service.
Sixth, this amendment modifies § 2B1.1(b)(10), as redesignated by Amendment 3 of this document, which provides a two-level enhancement and a minimum offense level of 12, in response to the Secure Authentication Feature and Enhanced Identification Defense Act of 2003 (the “SAFE ID Act”) (section 607 of the PROTECT Act, Pub. L. 108-21). That Act created a new offense at 18 U.S.C. § 1028(a)(8), prohibiting the trafficking of authentication features (
Seventh, this amendment creates a new guideline at § 2X6.1 (Use of a Minor to Commit a Crime of Violence). This new guideline is in response to a new offense provided at 18 U.S.C. § 25 (Use of Minors in Crimes of Violence), which was created by section 601 of the PROTECT Act. The new offense prohibits any person 18 years of age or older from intentionally using a minor to commit a crime of violence or to assist in avoiding detection or apprehension for such offense. For a first conviction, the penalty is twice the maximum term of imprisonment that would otherwise be authorized for the offense, and for each subsequent conviction, three times the maximum term of imprisonment that would otherwise be authorized for the offense.
While consideration was given to expanding the existing two-level adjustment at § 3B1.4 (Using a Minor to Commit a Crime), the Commission determined it was more appropriate and consistent with guideline construction to create a new guideline for the new substantive offense created by Congress in the PROTECT Act. This new guideline at § 2X6.1 directs the court to increase by 4 levels the offense level from the guideline applicable to the underlying crime of violence. Application notes are included to provide that the adjustment under § 3B1.4 is inapplicable if § 2X6.1 is used and to provide rules for the grouping of multiple counts.
Eighth, this amendment expands the definition of “crime of violence” in Application Note 1 to § 4B1.2 (Definitions of Terms Used in Section 4B1.1) to include unlawful possession of any firearm described in 26 U.S.C. § 5845(a). The amendment also excepts possession of those firearms described in 26 U.S.C. § 5845(a) from the rule that excludes felon in possession offenses from the definition of “crime of violence.” Congress has determined that those firearms described in 26 U.S.C. § 5845(a) are inherently dangerous and when possessed unlawfully, serve only violent purposes. In the National Firearms Act, Pub. L. 90-618, Congress required that these firearms be registered with the National Firearms Registration and Transfer Record. A number of courts have held that possession of certain of these firearms, such as a sawed-off shotgun, is a “crime of violence” due to the serious potential risk of physical injury to another person.
The amendment's categorical rule incorporating 26 U.S.C. § 5845(a) firearms includes short-barreled rifles and shotguns, machine guns, silencers, and destructive devices. It will affect
Ninth, this amendment provides an application note in § 4B1.4 (Armed Career Criminal) to address an apparent “double counting” issue that appears to be present when a defendant is convicted both of 18 U.S.C. § 922(g) (Felon in Possession) and also of an offense such as 18 U.S.C. § 924(c) (Use of a Firearm in Relation to Any Crime of Violence or Drug Trafficking Crime) or a similar offense carrying a mandatory minimum consecutive penalty, such as 18 U.S.C. § 844(h) relating to use of explosives, or 18 U.S.C. § 929(a) relating to use of restricted ammunition.
The basis for the mandatory minimum, consecutive penalties in these offenses is the same as the basis for the enhanced guideline offense level 34 at § 4B1.4(b)(3)(A) and the enhanced Criminal History Category VI at § 4B1.4(c)(2);
An upward departure is provided for those cases that result in a total maximum penalty that is less than the maximum of the guideline range that would have resulted if the enhanced offense level under § 4B1.4(b)(3)(A) and the criminal history enhancement under § 4B1.4(c)(2) had been applied. However, the extent of the upward departure shall not exceed the maximum of the guideline range that would have resulted had there not been a conviction under 18 U.S.C. § 924(c), § 844(h), or § 929(a).