Authority: QSP is authorized under Section 5(f) of the CCC Charter Act, 15 U.S.C. 714c(f).

Purpose: QSP is designed to encourage the development and expansion of export markets for U.S. agricultural commodities by assisting U.S. entities in providing commodity samples to potential foreign importers to promote a better understanding and appreciation for the high quality of U.S. agricultural commodities.

QSP participants will be responsible for procuring (or arranging for the procurement of) commodity samples, exporting the samples, and providing the technical assistance necessary to facilitate successful use of the samples by importers. Participants that are funded under this announcement may seek reimbursement for the sample purchase price and the costs of transporting the samples domestically to the port of export and then to the foreign port, or point, of entry. Transportation costs from the foreign port, or point, of entry to the final destination will not be eligible for reimbursement. CCC will not reimburse the costs incidental to purchasing and transporting samples, for example, inspection or documentation fees. Although providing technical assistance is required for all projects, CCC will not reimburse the costs of providing technical assistance. A QSP participant will be reimbursed after CCC reviews its reimbursement claim and determines that the claim is complete.

General Scope of QSP Projects: QSP projects are the activities undertaken by a QSP participant to provide an appropriate sample of a U.S. agricultural commodity to a foreign importer, or a group of foreign importers, in a given market. The purpose of the project is to provide information to an appropriate target audience regarding the attributes, characteristics, and proper use of the U.S. commodity. A QSP project addresses a single market/commodity combination.

As a general matter, QSP projects should conform to the following guidelines:

• Projects should benefit the represented U.S. industry and not a specific company or brand;

• Projects should develop a new market for a U.S. product, promote a new U.S. product, or promote a new use for a U.S. product, rather than promote the substitution of one established U.S. product for another;

• Sample commodities provided under a QSP project must be in sufficient supply and available on a commercial basis;

• The QSP project must either subject the commodity sample to further processing or substantial transformation in the importing country, or the sample must be used in technical seminars designed to demonstrate to an appropriate target audience the proper preparation or use of the sample in the creation of an end product;

• Samples provided in a QSP project shall not be directly used as part of a retail promotion or supplied directly to consumers. However, the end product, that is, the product resulting from further processing, substantial transformation, or a technical seminar, may be provided to end-use consumers to demonstrate to importers consumer preference for that end product; and,

• Samples shall be in quantities less than a typical commercial sale and limited to the amount sufficient to achieve the project goal (e.g., not more than a full commercial mill run in the destination country).

QSP projects shall target foreign importers and target audiences who:

• Have not previously purchased the U.S. commodity which will be transported under QSP;

• Are unfamiliar with the variety, quality attribute, or end-use characteristic of the U.S. commodity;

• Have been unsuccessful in previous attempts to import, process, and market the U.S. commodity (e.g., because of improper specification, blending, or formulation; or sanitary or phytosanitary issues);

• Are interested in testing or demonstrating the benefits of the U.S. commodity; or,

• Need technical assistance in processing or using the U.S. commodity.

Under this announcement, the number of projects per participant will not be limited. However, individual projects will be limited to $75,000 of QSP reimbursement. Projects comprised of technical preparation seminars, that is, projects that do not include further processing or substantial transformation, will be limited to $15,000 of QSP reimbursement as these projects require smaller samples. Financial assistance will be made available on a reimbursement basis only; cash advances will not be made available to any QSP participant.

All proposals will be reviewed against the evaluation criteria contained herein and funds will be awarded on a competitive basis. Funding for successful proposals will be provided through specific agreements. These agreements will in corporate the proposal as approved by FAS. FAS must approve in advance any subsequent changes to the project.

1. Eligible Applicants. Any United States private or government entity with a demonstrated role or interest in exporting U.S. agricultural commodities may apply to the program. Government organizations consist of federal, state, or local agencies. Private organizations include non-trade associations, universities, agricultural cooperatives, state regional trade groups, and profit-making entities.

2. Cost Sharing. FAS considers the applicant's willingness to contribute resources, including cash and goods and services of the U.S. industry and foreign third parties, when determining which proposals are approved for funding.

1. Address to Request Application Package. Organizations are encouraged to submit applications to FAS through the Unified Export Strategy (UES) application Internet Web site. Applicants also have the option of submitting electronic versions in the UES format (along with two paper copies) of their applications to FAS on diskette. However, UES format is not required.

Applicants planning to use the UES Internet-based system must contact the FAS Program Policy Staff on (202) 720-4327 to obtain site access information including a user ID and password. The UES Internet-based application, including a Help file containing step-by-step instructions for its use, may be found at the following URL address: http://www.fas.usda.gov/cooperators.html.

Applicants who choose to submit applications on diskette can obtain an application format at the following URL address: http://www.fas.usda.gov/mos/programs/qsp_appl.html.

2. Content and Form of Application Submission. To be considered for QSP, an applicant must submit to FAS information detailed in this notice. In addition, in accordance with the Office of Management and Budget's issuance of a final policy (68 FR 38402) regarding the need to identify entities that are receiving government awards, all applicants must submit a Dun and Bradstreet Data Universal Numbering System (DUNS) number. An applicant may request a DUNS number at no cost by calling the dedicated toll-free DUNS number request line at 1-866-705-5711. Incomplete applications and applications which do not otherwise conform to this announcement will not be accepted for review.

FAS recommends that proposals contain, a a minimum, the following (a) Organizational information, including:

• Organization's name, address, Chief Executive Officer (or designee), Federal Tax Identification Number (TIN), and DUNS number;

• Type of organization;

• Name, telephone number, fax number, and e-mail address of the primary contact person;

• A description of the organization and its membership;

• A description of the organization's prior export promotion experience; and

• A description of the organization's experience in implementing an appropriate trade/technical assistance component.

(b) Market information, including:

• An assessment of the market;

• A long-term strategy in the market; and

• U.S. export value/volume and market share (historic and goals) for 2002-2007;

(c) Project information, including:

• A brief project title;

• Amount of funding requested;

• A brief description of the specific market development trade constraint or opportunity to be addressed by the project, performance measures for the years 2007-2009 which will be used to measure the effectiveness of the project, a benchmark performance measure for 2005, the viability of long term sales to this market, the goals of the project, and the expected benefits to the represented industry;

• A description of the activities planned to address the constraint or opportunity, including how the sample will be used in the end-use performance trial, the attributes of the sample to be demonstrated and its end-use benefit, and details of the trade/technical servicing component (including who will provide and who will fund this component);

• A sample description (i.e., commodity, quantity, quality, type, and grade), including a justification for selecting a sample with such characteristics (this justification should explain in detail why the project could not be effective with a smaller sample);

• An itemized list of all estimated costs associated with the project for which reimbursement will be sought; and

• The importer's rule in the project regarding handling and processing the commodity sample; and

(d) Information indicating all funding sources and amounts to be contributed by each entity that will supplement implementation of the proposed project. This may include the organization that submitted the proposal, private industry entities, host governments, foreign third parties, CCC, FAS, or other Federal agencies. Contributed resources may include cash or goods and services.

3. Submission Dates and Times. All applications must be received by 5 p.m. Eastern Standard Time, February 12, 2007. Applications received after this date will be considered only if funds are still available.

4. Funding Restrictions. Proposals which request more than $75,000 of CCC funding for individual projects will not be considered. Projects comprised of technical preparation seminars will be limited to $15,000 in QSP funding. CCC will not reimburse expenditures made prior to approval of a proposal or unreasonable expenditures.

5. Other Submission Requirements. All applications on diskette (with two accompanying paper copies) and any other form of application must be received by 5 p.m. Eastern Standard Time, February 12, 2007, at one of the following addresses:

Hand Delivery (including FedEx, UPS, etc.): U.S. Department of Agriculture, Foreign Agricultural Service, Program Policy Staff, Portals Office Building, Suite 400, 1250 Maryland Avenue, SW., Washington, DC 20024.

U.S. Postal Delivery: U.S. Department of Agriculture, Foreign Agricultural Service, Program Policy Staff, STOP 1042, 1400 Independence Ave., SW., Washington, DC 20250-1042.

1. Criteria. FAS will use the following criteria in evaluating proposals:

• The ability of the organization to provide an experienced staff with the requisite technical and trade experience to execute the proposal;

• The extent to which the proposal is targeted to a market in which the United States is generally competitive;

• The potential for expanding commercial sales in the proposed market;

• The nature of the specific market constraint or opportunity involved and how well it is addressed by the proposal;

• The extent to which the importer's contribution in terms of handling and processing enhances the potential outcome of the project;

• The amount of reimbursement requested and the organization's willingness to contribute resources, including cash and goods and services of the U.S. industry and foreign third parties; and

• How well the proposed technical assistance component assures that performance trials will effectively demonstrate the intended end-use benefit.

• Per capita income less than $10,725 (the ceiling on upper middle income economies as determined by the World Bank [World Development Indicators; July 2006]); and population greater than 1 million. Proposals may address suitable regional groupings, for example, the islands of the Caribbean Basin; or

• U.S. market share of imports of the commodity identified in the proposal of 10 percent or less.

2. Review and Selection Process. Proposals will be evaluated by the applicable FAS Commodity Branches in the Market Development and Grants Management Division. The Commodity Branches will review each proposal against the factors described above. The purpose of this review is to identify meritorious proposals, recommend an appropriate funding level for each proposal based upon these factors, and submit the proposals and funding recommendations to the Deputy Administrator, Office of Trade Programs.

3. Anticipated Announcement Date. Announcements of funding decisions for QSP are anticipated during May 2007.

1. Award Notices. FAS will notify each applicant in writing of the final disposition of its application. FAS will send an approval letter and agreement to each approved applicant. The approval letter and agreement will specify the terms and conditions applicable to the project, including the levels of QSP funding and any cost-share contribution requirements.

2. Administrative and National Policy Requirements. The agreements will incorporate the details of each project as approved by FAS. Each agreement will identify terms and conditions pursuant to which CCC will reimburse certain costs of each project. Agreements will also outline the responsibilities of the participant, including, but not limited to, procurement (or arranging for procurement) of the commodity sample at a fair market price, arranging for transportation of the commodity sample within the time limit specified in the agreement (organizations should endeavor to ship commodities within 6 months of effective date of agreement), compliance with cargo preference requirements (shipment on United States flag vessels, as required), compliance with the Fly America Act requirements (shipment on United States air carriers, as required), timely and effective implementation of technical assistance, and submission of a written evaluation report within 90 days of expiration of the agreement.

QSP agreements are subject to review and verification by the FAS Compliance, Security and Emergency Planning Division. Upon request, a QSP participant shall provide to CCC the original documents which support the participant's reimbursement claims. CCC may deny a claim for reimbursement if the claim is not supported by adequate documentation.

3. Reporting. A written evaluation report must be submitted within 90 days of the expiration of each participant's QSP agreement. Evaluation reports should address all performance measures that were presented in the proposal.

For additional information and assistance, contact the Program Policy Staff, Foreign Agricultural Service, U.S. Department of Agriculture, Portals Office Building, Suite 400, Stop 1042, 1250 Maryland Avenue, SW., Washington, DC 20024, phone: (202) 720-4327, fax: (202) 720-9361, e-mail: ppsadmin@fas.usda.gov .

Authority: The TASC Program is authorized by section 3205 of Pub. L. 107-171. TASC regulations appear at 7 CFR part 1487.

Purpose: The TASC program is designed to assist U.S. organizations by providing funding for projects that address sanitary, phytosanitary, and technical barriers that prohibit or threaten the export of U.S. specialty crops. U.S. specialty crops, for the purpose of the TASC Program, are defined to include all cultivated plants, or the products thereof, produced in the U.S., except wheat, feed grains, oilseeds, cotton, rice, peanuts, sugar, and tobacco.

As a general matter, TASC Program projects should be designed to accomplish the following goals:

• Projects should address a sanitary, phytosanitary, or related technical barrier that prohibits or threatens the export of U.S. specialty crops;

• Projects should demonstrably benefit the represented industry and not a specific company or brand; and,

• Projects must address barriers to U.S. specialty crops that are currently available on a commercial basis and for which barrier removal would predominately benefit U.S. exports.

Examples of expenses that the CCC may agree to reimburse under the TASC Program include, but are not limited to: Initial pre-clearance programs, export protocol and work plan support, seminars and workshops, study tours, field surveys, development of pest lists, pest and disease research, database development, reasonable logistical and administrative support, and travel and per diem expenses.

In general, all qualified proposals received before the specified application deadlines will compete for funding. The limited funds and the range of barriers affecting the exports of U.S. specialty crops worldwide preclude CCC from approving large budgets for individual projects. In prior years, the amount of funding per proposal has ranged from $13,000 to $250,000, the maximum allowed.

Applicants may submit multiple proposals, and applicants with previously approved TASC proposals may apply for additional funding. However, no TASC participant may have more than three approved projects underway at any given time.

FAS will consider providing either grant funds as direct assistance to U.S. organizations or providing technical assistance on behalf of U.S. organizations, provided that the organization submits timely and qualified proposals. FAS will review all proposals against the evaluation criteria contained in the program regulations.

Funding for successful proposals will be provided through specific agreements. These agreements will incorporate the proposal as approved by FAS. FAS must approve in advance any subsequent changes to the project. FAS or another Federal agency may be involved in the implementation of approved projects.

1. Eligible Applicants: Any United States organization, private or government, may apply to the program. Government organizations consist of federal, state, and local agencies. Private organizations include non-profit trade associations, universities, agricultural cooperatives, state regional trade groups, and private companies.

Foreign organizations, whether government or private, may participate as third parties in activities carried out by U.S. organizations, but are not eligible for funding assistance from the program.

2. Cost Sharing or Matching: Applicants are very strongly encouraged to provide matching funds or cost sharing support in this highly competitive program. Such support may be in the form of cash, goods, or in-kind services which are dedicated to the project by the organization that submitted the proposal, private industry entities, host governments, or foreign third parties.

2. Application through the UES: Organizations are strongly encouraged to submit applications to FAS through the Unified Export Strategy (UES) application Internet Web site. Using the UES application process reduces paperwork and expedites FAS processing and review cycle. Applicants planning to use the UES Internet-based system must contact FAS Program Policy Staff on (202) 720-4327 to obtain site access information including a user ID and password. The UES Internet-based application, including a Help file containing step-by-step instructions for its use, may be found at the following URL address: http://www.fas.usda.gov/cooperators.html.

2. Application through electronic and hard copies: Applicants also have the option of submitting electronic versions in the UES format (along with two paper copies) of their applications to FAS on diskette. Applicants who choose to submit applications on diskette can obtain an application format at the following URL address: http://www.fas.usda.gov/mos/tasc/proposals.html.

3. Content and Form of Application Submission: All TASC proposals must contain complete information about the proposed projects as described in § 1487.5(b) of the TASC Program regulations. In addition, in accordance with the Office of Management and Budget's issuance of a final policy (68 FR 38402) regarding the use of a universal identifier for all Federal grants and cooperative agreements, all applicants must submit a Dun and Bradstreet Data Universal Numbering System (DUNS) number. An applicant may request a DUNS number at no cost by calling the dedicated toll-free DUNS number request line on 1-866-705-5711. Incomplete applications and applications which do not otherwise conform to this announcement will not be accepted for review.

4. Submission Dates and Times: TASC funding is limited, and in order to assure sufficient resources are available to meet unanticipated needs during the fiscal year, TASC proposals will, generally, only be evaluated on a semi-annual basis. That is:

• Proposals received prior to, but not later than, 5 p.m. (local time Washington, DC) February 12, 2007, will be considered for funding with other proposals received by that date;

• Proposals not approved for funding during the review period will be reconsidered for funding after the review period only if the applicant specifically requests such reconsideration in writing, and only if funding remains available;

• Proposals received after 5 p.m. (local time, Washington, DC) February 12, 2007, will be considered for funding only if funding remains available.

Notwithstanding the foregoing, a proposal may be submitted for expedited consideration under the TASC Quick Response process if, in addition to meeting all requirements of the TASC program, a proposal clearly identifies a time-sensitive activity. In these cases, a proposal may be submitted at any time for an immediate evaluation.

FAS will track the time and date of receipt of all proposals.

5. Funding Restrictions: Proposals which request more than $250,000 of CCC funding in a given year will not be considered. Proposals to fund projects that exceed three years in duration will not be considered. No TASC participant may have more than three approved projects underway at any given time. Although funded projects may take place in the United States, all eligible projects must specifically address sanitary, phytosanitary, or technical barriers to the export of U.S. specialty crops.

Certain types of expenses are not eligible for reimbursement by the program, including the costs of market research, advertising, or other promotional expenses. CCC will not reimburse unreasonable expenditures or any expenditure made prior to approval of a proposal.

6. Other Submission Requirements: All Internet-based applications must be properly submitted to 5 p.m. (local time in Washington, DC) on February 12, 2007, to be considered.

All applications on diskette (with two accompanying paper copies) and any other applications must be received by 5 p.m. (local time in Washington, DC) on February 12, 2007, at one of the following addresses:

Hand Delivery (including FedEx, DHL, UPS, etc.): U.S. Department of Agriculture, Foreign Agricultural Service, Program Policy Staff, Portals Office Building, Suite 400, 1250 Maryland Avenue, SW., Washington, DC 20024.

U.S. Postal Delivery: U.S. Department of Agriculture, Foreign Agricultural Service, Program Policy Staff, 1400 Independence Avenue, SE, Stop Code 1042 South Building, Washington, DC 20250-1042.

1. Criteria: FAS follows the evaluation criteria set forth in § 1487.6 of the TASC regulations.

2. Review and Selection Process: FAS will review proposals for eligibility and will evaluate each proposal against the factors described above. The purpose of this review is to identify meritorious proposals, recommend an appropriate funding level for each proposal based upon these factors, and submit the proposals and funding recommendations to the Deputy Administrator, Office of Trade Programs. FAS may, when appropriate, request the assistance of other U.S. government subject area experts in evaluating the merits of a proposal.

1. Award Notices: FAS will notify each applicant in writing of the final disposition of its application. FAS will send an approval letter and agreement to each approved applicant. The approval letter and agreement will specify the terms and conditions applicable to the project, including levels of funding, timelines for implementation, and written evaluation requirements.

2. Administrative and National Policy Requirements: The agreements will incorporate the details of each project as approved by FAS. Each agreement will identify terms and conditions pursuant to which CCC will reimburse certain costs of each project. Agreements will also outline the responsibilities of the participant. Interested parties should review the TASC Program regulations found at 7 CFR part 1487 in addition to this announcement.

3. Reporting: TASC participants are subject to the reporting and recordkeeping requirements described in 7 CFR part 3019. In addition, participants are required to submit a written report(s), on no less than an annual basis, and a final report, each of which evaluates their TASC project using the performance measures presented in the approved proposal.

For additional information or assistance, contact the Program Policy Staff, Foreign Agricultural Service, U.S. Department of Agriculture, Portals Office Building, Suite 400, 1250 Maryland Avenue, SW., Washington, DC 20024, phone: (202) 720-4327, fax: (202) 720-9361, e-mail: ppsadmin@fas.usda.gov.

The Office of Management and Budget's (OMB) regulation (5 CFR 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d)). This notice identifies an information collection that RUS is submitting to OMB for extension.

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 will have practical utility; (b) 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; (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 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. Comments may be sent to: Richard C. Annan, Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, STOP 1522, Room 5170 South Building, 1400 Independence Ave., SW., Washington, DC 20250-1522. FAX: (202)720-4120.

Title: Assistance to High Energy Cost Rural Communities.

OMB Control Number: 0572-0136.

Type of Request: Extension of a currently approved information collection.

Abstract: The Rural Electrification Act of 1936 (RE Act) (7 U.S.C. 901 et seq. ) was amended in November 2000 to create a new program to help rural communities with extremely high energy costs (Pub. L. 106-472). Under this new section 19 of the RE Act (7 U.S.C. 918a), the Secretary of Agriculture, through the Rural Utilities Service (RUS), is authorized to provide financial assistance through the following three funding streams:

• High Energy Cost Grants and Loans. RUS may provide grants and loans for energy generation, transmission and distribution facilities serving communities with average home energy costs in excess of 275 percent of the national average. Many of these communities are in rural Alaska, but there are other eligible areas nationwide. Eligible applicants include persons, State agencies (including Territories), entities organized under State law, and Indian tribes. Only grant funds have been appropriated to date.

• Denali Commission Grants and Loans. RUS may provide grants and loans to the Denali Commission, a Federal agency, for energy generation, transmission, and distribution facilities serving extremely high energy cost rural and remote communities in Alaska. Annual Denali grants are awarded and advanced as soon as funds are available to RUS. The Denali Grants are governed by a Memorandum of Understanding between the two agencies and by individual Grant Agreements. Only grant funds have been appropriated to date.

• Bulk Fuel Revolving Fund Grants. RUS may provide grants to State entities in existence as of November 9, 2000 to support revolving loan funds to improve the efficiency of fuel purchases for communities where the fuel cannot be delivered by surface transportation. Only Alaska and a handful of other States are eligible.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 4.53 hours per response.

Respondents: Business or other for-Profit, Not-for-profit institutions, State, local or tribal government.

Estimated Number of Respondents: 45.

Estimated Number of Responses per Respondent: 4.11.

Estimated Total Annual Burden on Respondents: 828.

Copies of this information collection can be obtained from MaryPat Daskal, Program Development and Regulatory Analysis, at (202) 720-7853, FAX: (202) 720-8435.

All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.

The Office of Management and Budget's (OMB) regulation (5 CFR 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d)). This notice identifies an information collection that RUS is submitting to OMB for extension.

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 will have practical utility; (b) 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; (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 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. Comments may be sent to: Richard C. Annan, Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, STOP 1522, Room 5170 South Building, 1400 Independence Ave., SW., Washington, DC 20250-1522. FAX: (202)720-4120.

Title: Weather Radio Transmitter Grant Program.

OMB Control Number: 0572-0124.

Type of Request: Extension of a currently approved information collection.

Abstract: The National Weather Service operates an All Hazards Early Warning System that alerts people in areas covered by its transmissions of approaching dangerous weather and other emergencies. The National Weather Service can typically provide warnings of specific weather dangers up to fifteen minutes prior to the event. At present, this system covers all major metropolitan areas and many smaller cities and towns; however, many rural areas lack NOAA Weather Radio coverage. The Rural Development Utilities Programs' Service Weather Radio Transmitter Grant Program finances the installation of new transmitters to extend the coverage of the National Oceanic and Atmospheric Administration's Weather Radio system (NOAA Weather Radio) in rural America thereby promoting public safety and awareness. The President of the United States and the United States Congress have made $5 million in grant funds available to facilitate the expansion of NOAA Weather Radio system coverage into rural areas that are not covered or are poorly covered at this time. This grant program will continue to provide grant funds, on an expedited basis, for use in rural areas and communities of 50,000 or less inhabitants. Grant funds are available immediately and applications will be processed on a first-come, first-served basis until the appropriation is used in its entirety. Grant funds are used to purchase and install NOAA Weather Radio transmitters and antennas that are combined with donated tower space and other site resources to establish new rural NOAA Weather Radio transmitters. Eligible applicants must be non-profit corporations or associations (including Rural Development Utilities Programs electric and telecommunications borrower cooperatives), units of local or state government, or Federally-recognized Indian tribes.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 6 hours per response.

Respondents: Not-for-profit institutions, State, local or tribal government.

Estimated Number of Respondents: 113.

Estimated Number of Responses per Respondent: 2.

Estimated Total Annual Burden on Respondents: 678.

Copies of this information collection can be obtained from MaryPat Daskal, Program Development and Regulatory Analysis, at (202) 720-7853, FAX: (202) 720-4120.

All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.

The proposed project area is located in Franklin County, Georgia. The proposal will be sited on a previously graded five acre portion of a 139-acre property zoned Commercial and Industrial. The proposal includes the generation plant and accessory structures, fuel storage and handling areas, traffic circulation and parking areas, waste holding areas, and stormwater management features. Approximately ten additional acres will be devoted to a spray application water treatment system for which no new clearing and grading will be required. The remaining acres will be maintained as natural area buffers.

Alternatives considered by the USDA Rural Development and ERI included: (a) No action, (b) alternate locations, (c) alternate methods to provide service, (d) alternate construction methods and materials, (e) alternate designs, (f) load management and energy conservation options, and (g) alternate generation technologies. An Environmental Report that described the proposed project in detail and discussed its anticipated environmental impacts has been accepted by USDA Rural Development as the EA for the proposed project. The EA is available for public review at addresses provided above in this Notice.

Questions and comments should be sent to Ms. Stephanie Strength, USDA Rural Development at the mailing or e-mail addresses provided above in this Notice. The USDA Rural Development should receive comments on the EA in writing by February 12, 2007 to ensure that they are considered in the environmental impact determination.

Should the USDA Rural Development determine, based on the EA, that the impacts of the construction and operation of the project would not have a significant environmental impact, it will prepare a Finding of No Significant Impact. Public notification of a Finding of No Significant Impact would be published in the Federal Register and in newspapers with circulation in the project area.

Any final action by the USDA Rural Development related to the proposed project will be subject to, and contingent upon, compliance with all relevant Federal, State and local environmental laws and regulations, and completion of the environmental review requirements as prescribed in the USDA Rural Development's Environmental Policies and Procedures (7 CFR part 1794).

AECI is an electric generation and transmission cooperative, a non-profit utility owned by its members. It provides wholesale electricity and related services to six electric generation and transmission cooperatives that in turn provide electricity to 51 distribution cooperatives. AECI's service area includes most of Missouri outside of urban areas, part of northeast Oklahoma, and a small part of southeast Iowa. AECI is contractually obligated to provide all the electric power needs of the cooperative member systems it serves. AECI does not have the capacity to meet all of its members' power needs beyond 2013.

After considering various ways to meet those future needs, AECI identified the construction of a new coal-fired power plant near Norborne, Missouri as its best course of action. This Draft EIS considered 17 technology alternatives, several alternatives that did not include AECI construction of a new baseload plant, adding capacity at an existing AECI facility, and a number of siting alternatives as means of responding to the identified purpose and need for the project. These alternatives were evaluated in terms of cost-effectiveness, technical feasibility, and environmental soundness. The Draft EIS analyzes in detail the Proposed Action (Norborne Plant and related facilities), essentially the same plant and ancillary facilities at a different location (Big Lake Site), an alternative technology (integrated gasification combined cycle (IGCC), and the No Action Alternative. Under the No Action Alternative, the project would not be constructed.

With actions that have been incorporated into the Proposed Action to reduce or avoid impact, no significant adverse impacts are anticipated. Other adverse but non-significant impacts of the Proposed Action include those on soils, water, air, fisheries and wildlife, noise, transportation, floodplains, wetlands, and farmland. Impacts associated with the use of IGCC are similar.

Use of the Big Lake Site would result in impacts similar to those of the Proposed Action for most resources, but, when compared with the Proposed Action, would likely result in greater adverse impacts on floodplains, recreation and public lands and cultural resources; and potentially significant impacts on fisheries and wildlife (migratory birds), threatened and endangered species (bald eagles), and environmental justice (Native Americans).

AECI's Proposed Action has been identified as USDA/RD's Preferred Alternative. The Preferred Alternative has the potential to have non-significant impacts on wetlands and floodplains.

Any final action by the USDA Rural Development related to the proposed project will be subject to, and contingent upon, compliance with all relevant Federal, state and local environmental laws and regulations, and completion of the environmental review requirements as prescribed in the USDA Rural Utilities Services' Environmental Policies and Procedures (7 CFR part 1794).

5 U.S.C. 4314(c)(1) requires each agency to establish, in accordance with regulations prescribed by the Office of Personnel Management, a performance review board (PRB). The PRB reviews initial performance ratings of members of the Senior Executive Service (SES) and makes recommendations on performance ratings and awards for senior executives. Because the CSB is a small independent Federal agency, the SES members of the CSB's PRB are being drawn from other Federal agencies.

The Chairperson of the CSB has appointed the following individuals to the CSB Senior Executive Service Performance Review Board:

PRB Member—Lawrence W. Roffee (Executive Director, United States Access Board).

PRB Member—Leon A. Wilson, Jr. (Executive Director, Committee for Purchase From People Who Are Blind or Severely Disabled).

The above-named members of the CSB PRB replace Ronald S. Battocchi (formerly General Counsel, National Transportation Safety Board) and Elizabeth S. Woodruff (formerly General Counsel, Federal Retirement Thrift Investment Board), whose service on the PRB has ended. Their appointments were originally announced in the Federal Register of December 3, 2004 (69 FR 70224).

John S. Bresland (CSB Board Member) continues as Chair of the PRB, as announced in the Federal Register of October 8, 2003 (68 FR 58063).

This notice is published in the Federal Register pursuant to the requirement of 5 U.S.C. 4314(c)(4).

Chapter 19 of the North American Free-Trade Agreement (“Agreement”) establishes a mechanism to replace domestic judicial review of final determinations in antidumping and countervailing duty cases involving imports from the other country with review by independent bi-national panels. When a Request for Panel Review is filed, a panel is established to act in place of national courts to review expeditiously the final determination to determine whether it conforms with the antidumping or countervailing duty law of the country that made the determination.

Under Article 1904 of the Agreement, which came into force on January 1, 1994, the Government of the United States, the Government of Canada and the Government of Mexico established Rules of Procedure for Article 1904 Binational Panel Reviews (“Rules”). These Rules were published in the Federal Register on February 23, 1994 (59 FR 8686).

Panel Decision: On January 5, 2007, the binational panel issued its decision in the review of the final results of the affirmative antidumping duty determination made by the International Trade Administration (ITA) respecting Certain Softwood Lumber Products from Canada (Secretariat File No. USA-CDA-2002-1904-02). Because the Panel concluded that the October 12, 2006 revocation of the antidumping order rendered moot this proceeding and all motions pending at the time of revocation, the Panel grants the motion to dismiss.

The panel has directed the Secretary to issue a Notice of Final Panel Action on the 11th day following the issuance of the decision.

The primary purpose of the GMT working meeting is to elect officers (chair and vice-chair), update commercial bycatch models with new West Coast Groundfish Observer Program data, evaluate recreational impact projection models and consider methodology recommendations, consider recommendations for inseason adjustments to 2007 groundfish fisheries, evaluate the updated whiting fishery bycatch projection model, consider recommendations for implementing regulations for the shoreside whiting fishery for 2008 and beyond, plan 2007 GMT meetings and activities, and consider recommendations for developing a trawl individual quota (TIQ) program. The GMT will elect officers during a closed session at the start of the meeting on Tuesday, January 30 and will convene their open public meeting no later than 10:30 a.m. The GMT will discuss TIQ issues and recommendations on Thursday, February 1 regardless of progress on other agenda issues during the first two days of the meeting. The GMT may also address other assignments relating to groundfish management. No management actions will be decided by the GMT. The GMT's role will be development of recommendations for consideration by the Council at its March meeting in Sacramento, California.

Although non-emergency issues not contained in the meeting agenda may come before the GMT for discussion, those issues may not be the subject of formal GMT action during this meeting. GMT action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under Section 305 ) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the GMT's intent to take final action to address the emergency.

This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Ms. Carolyn Porter at 503-820-2280 at least five days prior to the meeting date. Entry to the NOAA Western Regional Center's Sand Point Facility requires visitors to show a valid picture ID and register with security. A visitor's badge, which must be worn while at the NOAA Western Regional Center's Facility, will be issued to non-Federal employees participating in the meeting.

The Act affords EPA a 45-day period to review, and object to, as appropriate, a title V operating permit proposed by a state permitting authority. Section 505(b)(2) of the Act authorizes any person to petition the EPA Administrator, within 60 days after the expiration of the EPA review period, to object to a title V operating permit if EPA has not done so. Petitions must be based only on objections to the permit that were raised with reasonable specificity during the public comment period provided by the State, unless the petitioner demonstrates that it was impracticable to raise these issues during the comment period, or the grounds for the issues arose after this period.

On March 9, 2006, EPA received a petition from Petitioners requesting that EPA object to the title V operating permit for Denver Regional Landfill South. The request was based on various allegations related to permit-specific procedural and substantive issues. The following is a summary of the main objections raised by the Petitioners: (1) Colorado did not respond to significant comments Petitioners raised during a second comment period on the permit, which resulted in deficiencies in the permit; (2) the operating permit fails to ensure compliance with the New Source Performance Standards (NSPS) for municipal solid waste landfills; (3) the operating permit fails to ensure compliance with startup, shutdown, and malfunction plan requirements in relation to the control of hazardous air pollutants; and (4) the operating permit contains an inappropriate exemption from emission limits during upset conditions and thus, fails to ensure compliance with applicable requirements related to NAAQS and PSD increments.

On December 22, 2006, the Administrator issued an order denying the petition. The order explains the reasons behind EPA's conclusion to deny the petition for objection on all grounds.

The general statutory authority for BEACH Act grants is section 406(b) of the Clean Water Act, as amended by the BEACH Act, Pub. L. No. 106-284, 114 Stat. 970 (2000). It provides: “The Administrator may make grants to States and local governments to develop and implement programs for monitoring and notification for coastal recreation waters adjacent to beaches or similar points of access that are used by the public.” CWA section 406(b)(2)(A), however, limits EPA's ability to award implementation grants only to those States, Tribes and Territories that meet certain requirements (see Section II, Funding and Eligibility, below for information on specific requirements).

In fiscal year 2007, EPA intends to award grants authorized under CWA section 406(b) to eligible States and Territories to support the implementation of coastal recreation water monitoring and public notification programs that are consistent with EPA's required performance criteria for implementation grants. Also in fiscal year 2007, EPA intends to award development grants to eligible Tribes to support the development of coastal recreation water monitoring and public notification programs that are consistent with EPA's performance criteria for grants. EPA published the required performance criteria for grants in its National Beach Guidance and Required Performance Criteria for Grants (EPA-823-B-02-004), on July 19, 2002. A notice of availability of the document was published in the Federal Register (67 FR 47540, July 19, 2002). This document can be found on EPA's Web site at http://www.epa.gov/waterscience/beaches/grants. Copies of the document may also be obtained by writing, calling, or e-mailing: Office of Water Resources Center, U.S. Environmental Protection Agency, Mail Code 4100T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460. (Phone: 202-566-1731 or e-mail: center.water-resource@epa.gov ).

Coastal and Great Lake States that meet the requirements of CWA section 406(b)(2)(A) are eligible for grants in fiscal year 2007 to implement monitoring and notification programs. The definition of the term “State” in CWA section 502 includes the District of Columbia, and current U.S. Territories: the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

CWA section 406(b)(2)(B) authorizes EPA to make a grant to a local government for implementation of a monitoring and notification program only if, after the one-year period beginning on the date of publication of the performance criteria (July 19, 2002), EPA determines that the State within which the local government has jurisdiction is not implementing a program that meets the requirements of CWA section 406(b), which includes a requirement that the program is consistent with the performance criteria in National Beach Guidance and Required Performance Criteria for Grants. Local governments may contact their EPA Regional office for further information about BEACH Act grants.

Section 518(e) of the CWA authorizes EPA to treat eligible Indian Tribes in the same manner as States for the purpose of receiving CWA section 406 grant funding. For fiscal year 2007, EPA will make $50,000 available for development grants to eligible Tribes. In order to be eligible for a CWA section 406 development grant, a Tribe must have coastal recreation waters adjacent to beaches or similar points of access that are used by the public. The phrase “coastal recreation waters” is defined in CWA section 502(21) to mean the Great Lakes and marine coastal waters (including coastal estuaries) that are designated under CWA section 303(c) for use for swimming, bathing, surfing, or similar water contact activities. The statute explicitly excludes from the definition inland waters and waters upstream of the mouth of a river or stream having an unimpaired natural connection with the open sea. In addition, a tribe must demonstrate that it meets the “treatment in the same manner as a State” (TAS) criteria contained in CWA section 518(e) for purposes of receiving a section 406 beaches grant. To demonstrate TAS, the Tribe must show that it: (1) Is federally recognized; (2) has a governing body carrying out substantial governmental duties and powers; (3) will be exercising functions pertaining to waters within reservation; and (4) is reasonably expected to be capable of carrying out the functions consistent with the CWA and all applicable regulations. EPA encourages those Tribes with coastal recreation waters to contact their regional Beach Act grant coordinator for further information regarding the application process as soon as possible.

Yes, there are additional eligibility requirements and grant conditions. First, CWA section 406(b)(2)(A) provides that EPA may only award a grant to implement a monitoring and notification program if:

(I) the program is consistent with the performance criteria published by the Administrator under CWA section 406(a);

(ii) the State or local government prioritizes the use of grant funds for particular coastal recreation waters based on the use of the water and the risk to human health presented by pathogens or pathogen indicators;

(iii) the State or local government makes available to the Administrator the factors used to prioritize the use of funds under clause (ii);

(iv) the State or local government provides a list of discrete areas of coastal recreation waters that are subject to the program for monitoring and notification for which the grant is provided that specifies any coastal recreation waters for which fiscal constraints will prevent consistency with the performance criteria under CWA section 406(a); and

(v) the public is provided an opportunity to review the program through a process that provides for public notice and an opportunity for comment.

Second, CWA section 406(c) requires that as a condition of receipt of a CWA section 406 grant, a State or local government program for monitoring and notification must identify:

(1) Lists of coastal recreation waters in the State, including coastal recreation waters adjacent to beaches or similar points of access that are used by the public;

(2) in the case of a State program for monitoring and notification, the process by which the State may delegate to local governments responsibility for implementing the monitoring and notification program;

(3) the frequency and location of monitoring and assessment of coastal recreation waters based on—

(A) the periods of recreational use of the waters;

(B) the nature and extent of use during certain periods;

(C) The proximity of the waters to known point sources and nonpoint sources of pollution; and

(D) Any effect of storm events on the waters;

(4) (A) The methods to be used for detecting levels of pathogens and pathogen indicators that are harmful to human health; and

(B) The assessment procedures for identifying short-term increases in pathogens and pathogen indicators that are harmful to human health in coastal recreation waters (including increases in relation to storm events);

(5) Measures for prompt communication of the occurrence, nature, location, pollutants involved, and extent of any exceeding of, or likelihood of exceeding, applicable water quality standards for pathogens and pathogen indicators to—

(A) The Administrator, in such form as the Administrator determines to be appropriate; and

(B) A designated official of a local government having jurisdiction over land adjoining the coastal recreation waters for which the failure to meet applicable standards is identified;

(6) Measures for the posting of signs at beaches or similar points of access, or functionally equivalent communication measures that are sufficient to give notice to the public that the coastal recreation waters are not meeting or are not expected to meet applicable water quality standards for pathogens and pathogen indicators; and

(7) Measures that inform the public of the potential risks associated with water contact activities in the coastal recreation waters that do not meet applicable water quality standards.

Third, as required by CWA section 406(b)(3)(A), a State recipient of a CWA section 406 grant must submit to EPA, in such format and at such intervals as EPA determines to be appropriate, a report that describes:

(1) Data collected as part of the program for monitoring and notification as described in section 406(c), and

(2) Actions taken to notify the public when water quality standards are exceeded. States must submit to EPA both the monitoring and notification reports for any beach season by January 31 of the year following the beach season. For the 2007 beach season, the deadline for states to submit these reports is January 31, 2008. EPA first established this report submission deadline in the Federal Register notice for the fiscal year 2003 grants (68 FR 15446, 15449 (March 31, 2003)).

Fourth, States are required to report to EPA, latitude, longitude and mileage data on:

(1) The extent of beaches and similar points of public access adjacent to coastal recreation waters, and

(2) The extent of beaches that are monitored.

For fiscal year 2007, the total available for BEACH Act grants is expected to be $9,900,000 subject to the availability of funds. EPA expects to award $9,850,000 in implementation and development grants to eligible States and Territories. In addition, EPA intends to award $50,000 in development grants to eligible Tribes.

For fiscal year 2007, EPA expects to award grants to all eligible States and Territories who apply for funding based on an allocation formula that the Agency developed for allocating BEACH Act grant funds in 2002. EPA consulted with various States, the Coastal States Organization, and the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA) to develop this formula. It uses three factors: (1) Beach season length, (2) beach miles, and (3) beach use. As discussed in more detail below, EPA is reviewing the allocation formula in an effort to improve it.

EPA selected beach season length as a factor because it determines the part of the year when a government would conduct its monitoring program. The longer the beach season, the more resources a government would need to conduct monitoring. The Agency obtained the information on the length of a beach season from the National Health Protection Survey of Beaches for the States or Territories that submitted a completed survey. EPA estimated the beach season length for Alaska based on air and water temperature, available information on recreation activities, and data from the 1993 National Water Based Recreation Survey. EPA grouped the States and U.S. Territories into four categories of beach season lengths:

EPA selected miles of beach as a factor because it determines the geographical extent over which a government would conduct monitoring. The more miles of beaches, the more resources a government would need to conduct monitoring. EPA does not have beach mileage data in a format that can be used for the allocation formula at this time. Therefore, in the interim, EPA is using shoreline miles as a surrogate for beach miles in the allocation formula. Shoreline miles data overestimates beach miles in some States and Territories; however, EPA and States agreed that this is the best way to estimate beach miles available at this time. EPA used the National Oceanic and Atmospheric Administration (NOAA) publication, The Coastline of the United States, to quantify shoreline miles. EPA is in the process of reviewing the appropriateness of shoreline and beach miles data as factors in the allocation formula.

EPA selected beach use as a factor because it reflects the magnitude of potential human exposure to pathogens at recreational beaches. Greater use of beaches makes it more likely that a government would need to increase monitoring frequency due to the larger number of people potentially exposed to pathogens. EPA continues to use the coastal population of counties (based on the 2000 Census data) to quantify the coastal population that is wholly or partially within the State's or Territory's legally defined coastal zone, as a surrogate for actual beach usage. EPA is reviewing the appropriateness of coastal county population and beach use data as factors in the allocation formula.

The grants allocation formula sums three parts. The first part is a base amount for all States and Territories that varies with the length of the beach season. The second part distributes 50% of the total remaining funds based on the ratio of shoreline miles in a State or Territory to the total length of shoreline miles. For example, if a State has 4% of the total coastal and Great Lakes shoreline, that State would receive 4% of 50% (or 2%) of total funds remaining after the Agency distributed the funds for part one. The third part distributes the remaining 50% based on the ratio of coastal population in a State or Territory to the total coastal population. For example, if a State has 2% of the total coastal and Great Lakes population, that State would receive 2% of 50% (or 1%) of the total funds remaining after the Agency distributes the funds for the first two parts. The following table summarizes the allocation formula:

For 2007, the total available for BEACH Act grants to States and Territories is expected to be $9,850,000 million. This is an estimate pending the Agency's fiscal year 2007 appropriation. EPA will announce on its Web site any changes to the total amount available for BEACH Act grants, at http://www.epa.gov/waterscience/beaches/grants/. Assuming all 35 States and Territories with coastal recreation waters apply and meet the statutory eligibility requirements for implementation grants (and have met the statutory grant conditions applicable to previously awarded section 406 grants), the distribution of the funds for year 2007 is expected to be:

In the Federal Register notice announcing the availability of fiscal year 2006 grants EPA declared its intention to consider revising the grant allocation formula (71 FR 1744, 1746 (January 11, 2006)). EPA began this process on February 15, 2006, when it convened a State/EPA workgroup to evaluate the current allocation formula. In order to garner input from the widest available audience, EPA intends to propose for broad input a revised allocation formula in calendar year 2008. Although the planning for this proposal is still in the early stages, EPA expects that one component of any revised allocation formula will include an incentive to encourage more timely expenditure of grant funds by individual States and Territories. EPA intends to consult further with interested stakeholders before making any changes to improve the allocation formula in the future. At this time, EPA expects that any change would be implemented when EPA awards BEACH Act grants for fiscal year 2010.

EPA expects that all 35 States and Territories will apply. If fewer than 35 States and Territories apply for the allocated amount, or if any applicant fails to meet the statutory eligibility requirements (or the statutory conditions applicable to previously awarded section 406 grants), then EPA will distribute available grant funds to eligible States and Territories in the following order:

(1) States that meet the eligibility requirements for implementation grants and that have met the statutory conditions applicable to previously awarded section 406 grants will be awarded the full amount of funds allocated to the State under the formula described above.

(2) States that have not met the requirements for implementation grants but have met the statutory requirements and grant conditions applicable to previously awarded section 406 grants may receive grants for continued program development. Any program development grants that the Agency awards will be for the limited purpose of completing work needed to qualify for implementation grants. Therefore, we expect that funding levels for continued program development grants will be lower than the amount allocated for program implementation grants.

(3) EPA may award program implementation grants to local governments in States that the Agency determines have not met the requirements for implementation grants.

(4) Should there be any remaining funds, EPA may award these funds to those States that have met the statutory requirements for implementation grants, as well as the statutory grant conditions of previous section 406 grants, using the criteria in the allocation formula.

If a State, Tribe, or Territory cannot use all of its allocation, the Regional Administrator may award the unused funds to any eligible coastal or Great Lake grant recipient in the Region for the continued development or implementation of their coastal recreation water monitoring and notification program(s). If, after re-allocations, there are still unused funds within the Region, EPA Headquarters will redistribute these funds to any eligible coastal or Great Lake BEACH Act grant recipient.

EPA expects to apportion the funds set aside for tribal grants evenly among all eligible Tribes that apply for funding.

The expected funding and project periods for implementation grants awarded in fiscal year 2007 is one year.

Recipients do not have to provide matching funds for BEACH Act grants. EPA may establish a match requirement in the future based on a review of State program activity and funding levels.

Recipients of implementation grants may use funds for activities to support implementing a beach monitoring and notification program that is consistent with the required performance criteria for grants specified in the document, National Beach Guidance and Required Performance Criteria for Grants, (document number: EPA-823-B-02-004). Recipients of development grants may use the funds to develop a beach monitoring and notification program consistent with the performance criteria.

EPA Regional offices will award CWA section 406 grants through a non-competitive process. EPA expects to award grants to all eligible State, Tribe, and Territory applicants that meet the applicable requirements described in this notice.

The Administrator has delegated the authority to award BEACH Act grants to the Regional Administrators.

The number assigned to the BEACH Act Grants is 66.472, Program Code CU.

For fiscal year 2007, BEACH Act Grants cannot be included in a Performance Partnership Grant.

Your application package should contain completed: EPA SF-424 Application for Federal Assistance, Program Summary, and Data Submission Plan.

In order for EPA to determine that a State or local government is eligible for an implementation grant, the applicant must submit documentation with its application to demonstrate that its program is consistent with the performance criteria. The Program Summary must contain sufficient technical detail for EPA to confirm that your program meets the statutory eligibility requirements and statutory grant conditions for previously awarded CWA section 406 grants listed in section II (Funding and Eligibility) of this notice. The Program Summary must also describe how the State used BEACH Act Grant funds to develop the beach monitoring and notification program, and how the program is consistent with the nine performance criteria in National Beach Guidance and Required Performance Criteria for Grants, (EPA-823-B-02-004). The Program Summary should also describe the state or territory program's objectives for the next year.

The Data Submission Plan describes the State data infrastructure and how the State plans to submit beach monitoring and notification data to EPA. States may submit a new Data Submission Plan, or they may submit updates and amendments to their current Plan. More information on both the Program Summary and Data Submission Plan is available at http://www.epa.gov/waterscience/beaches/grants/.

States and territories must submit application packages to the appropriate EPA Regional Office by April 11, 2007. EPA will make an award after the Agency reviews the documentation and confirms that the program meets the applicable requirements. The Office of Management and Budget has authorized EPA to collect this information (BEACH Act Grant Information Collection Request, OMB control number 2040-0244). Please contact the appropriate EPA Regional Office for a complete application package. See Section VI for a list of EPA Regional Grant Coordinators or visit the EPA Beach Watch Web site at www.epa.gov/waterscience/beaches/contact.html on the Internet.

The Notice of Intent should include the Tribe's name and the name and telephone number of a contact person.

Yes. Three specific QA/QC requirements must be met to comply with EPA's performance criteria for grants:

(1) Applicants must submit documentation that describes the quality system implemented by the State, Tribe, or local government. Documentation may be in the form of a Quality Management Plan or equivalent documentation.

(2) Applicants must submit a quality assurance project plan (QAPP) or equivalent documentation.

(3) Applicants are responsible for submitting documentation of the quality system and QAPP for review and approval by the EPA Quality Assurance Officer or his designee before they take primary or secondary environmental measurements. More information about the required QA/QC procedures is available in Chapter Four and Appendix H of National Beach Guidance and Required Performance Criteria for Grants (EPA-823-B-02-004).

Recipients must submit annual performance reports and financial reports as required in 40 CFR 31.40 and 31.41. The annual performance report explains changes to the beach monitoring and notification program during the grant year. It also describes how the grant funds were used to implement the program to meet the performance criteria listed in National Beach Guidance and Required Performance Criteria for Grants (EPA-823-B-02-004). The annual performance report required under 40 CFR 31.40 is due no later than 90 days after the grant year. Recipients must also submit annual monitoring and notification reports required under by the National Beach Guidance and Required Performance Criteria for Grants; (EPA-823-B-02-004). Sections 2.2.3 and 4.3 of the document contain the performance criterion requiring an annual monitoring report, and sections 2.2.8 and 5.4 contain the performance criterion requiring an annual notification report. This document can be found at http://www.epa.gov/waterscience/beaches/grants/. These reports, required to be submitted to EPA by States, Tribes and Territories under CWA section 406(b)(3)(A), include data collected as part of a monitoring and notification program. As a condition of award of an implementation grant, EPA requires that the monitoring report and the notification report for any beach season be submitted not later than January 31 of the year following the beach season. (See Section II, Funding and Eligibility, above.)

The regulations at 40 CFR Part 31 govern the award and administration of grants to States, Tribes, local governments, and Territories under CWA sections 406(b). Allowable costs will be determined according to the cost principles outlined in OMB Cost Circular A-87.

Rich Healy USEPA, 1200 Pennsylvania Ave., NW—4305, Washington, DC 20460; T: 202-566-0405; F: 202-566-0409; healy.richard@epa.gov.

Matt Liebman USEPA Region I, One Congress St., Ste. 1100-CWQ, Boston, MA 02114-2023; T: 617-918-1626; F: 617-918-1505; liebman.matt@epa.gov.

Helen Grebe USEPA Region II, 2890 Woodbridge Ave., MS220, Edison, NJ 08837-3679; T: 732-321-6797; F: 732-321-6616; grebe.helen@epa.gov.

Tiffany Crawford USEPA Region III, 1650 Arch Street, 3ES10, Philadelphia, PA 19103-2029; T: 215-814-5776; F: 215-814-2301; crawford.tiffany@epa.gov.

Joel Hansel USEPA Region IV, 61 Forsyth St., 15th Floor, Atlanta, GA 30303-3415; T: 404-562-9274; F: 404-562-9224; hansel.joel@epa.gov.

Holly Wirick USEPA Region V, 77 West Jackson Blvd., WT-16J, Chicago, IL 60604-3507; T: 312-353-6704; F: 312-886-0168; wirick.holiday@epa.gov.

Mike Schaub USEPA Region VI, 1445 Ross Ave., 6WQ-EW, Dallas, TX 75202-2733; T: 214-665-7314; F: 214-665-6689; schaub.mike@epa.gov.

Terry Fleming USEPA Region IX, 75 Hawthorne St., WTR-2, San Francisco, CA 94105; T: 415-972-3462; F: 415-947-3537; fleming.terrence@epa.gov.

Rob Pedersen USEPA Region X, 120 Sixth Ave., OW-134, Seattle, WA 98101; T: 206-553-1646; F: 206-553-0165; pedersen.rob@epa.gov.

Parts of this meeting of the Board will be open to the public (limited space available) and parts will be closed to the public. In order to increase the accessibility to Board meetings, persons requiring assistance should make arrangements in advance. The matters to be considered at the meeting are:

• December 14, 2006 (Regular Meeting).

• Review of Insurance Premium Rates.

• Audit Plan for the Year Ended December 31, 2006.

Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 2.34 of the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for January 4, 2007), on the World Wide Web, at http://www.ftc.gov/os/2007/01/index.htm. A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or by calling (202) 326-2222.

Public comments are invited, and may be filed with the Commission in either paper or electronic form. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before the date specified in the DATES section.

The Federal Trade Commission has accepted, subject to final approval, an agreement containing a consent order from Goen Technologies Corp., Nutramerica Corp., TrimSpa, Inc., and Alexander Szynalski a/k/a Alexander Goen (together, “respondents”).

The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.

This matter involves the advertising and promotion of TrimSpa® Completely Ephedra Free Formula X32 (“TrimSpa X32”), a dietary supplement that, according to its label, contains, among other ingredients, Hoodia gordonii, chromium, vanadium, glucomannan, citrus naringine, glucosamine HCI, cocoa extract, and green tea extract. According to the FTC complaint, respondents represented that TrimSpa X32 causes rapid and substantial weight loss; and that Hoodia gordonii—an African appetite suppressant—in TrimSpa X32 enables users to lose substantial amounts of weight by suppressing their appetite. The complaint alleges that respondents failed to have substantiation for these claims. The proposed consent order contains provisions designed to prevent respondents from engaging in similar acts and practices in the future.

Part I of the proposed order requires respondents to have competent and reliable scientific evidence substantiating any claims that a covered product or service causes rapid and substantial weight loss or that the Hoodia gordonii, or any other appetite suppressant, in a covered product enables users to lose substantial amounts of weight by suppressing their appetite. The provision further requires that any such claim be true. A “covered product or service” is defined as “any dietary supplement, food, drug, or device, or any health-related service or program.” Part I.C. further requires that future claims about the health benefits, performance, efficacy, safety, or side effects of any covered product or service be truthful and supported by competent and reliable scientific evidence.

Part II of the proposed order provides that the order does not prohibit respondents from making representations for any drug that are permitted in labeling for the drug under any tentative final or final Food and Drug Administration (“FDA”) standard or under any new drug application approved by the FDA; representations for any medical device that are permitted in labeling under any new medical device application approved by the FDA; and representations for any product that are specifically permitted in labeling for that product by regulations issued by the FDA under the Nutrition Labeling and Education Act of 1990.

Part III provides for the payment of $1,500,000 to the Commission.

Part IV of the proposed order requires respondents to provide the Commission with a list of all consumers who respondents know purchased TrimSpa X32 from March 1, 2003 through the date of entry of this Order.

Parts V through IX require respondents to keep copies of relevant advertisements and materials substantiating claims made in the advertisements; to provide copies of the order to certain of their personnel; to notify the Commission of changes in corporate structure (for the corporate respondents) and changes in employment (for the individual respondent) that might affect compliance obligations under the order; and to file compliance reports with the Commission. Part X provides that the order will terminate after twenty (20) years under certain circumstances.

The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.

The UAGA is a model law drafted by the National Conference of Commissioners on Uniform State Laws in an effort to achieve uniformity among the anatomical gift laws of the States. Three ACOT recommendations provided a stimulus for revising the UAGA. In particular, recommendation number 10 (recommendation to engage in legislative strategies to encourage medical examiners not to withhold life-saving organs); recommendation number 19 (recommendation to take steps to ensure that the donors' wishes are fulfilled); and recommendation number 20 (recommendation that the State update the law governing anatomical gifts). The initial UAGA was written in 1968.

The purpose of this call is to hear discussion from the ACOT members and, if the Committee chooses, to develop a recommendation from the ACOT to the Secretary concerning the revised UAGA.

Background. The final phase of this investigation is being scheduled as a result of an affirmative preliminary determination by the Department of Commerce that imports of Certain Polyester Staple Fiber from China are being sold in the United States at less than fair value within the meaning of section 733 of the Act (19 U.S.C. 1673b). The investigation was requested in a petition filed on June 23, 2006, by DAK Americas, LLC, Charlotte, NC; Nan Ya Plastics Corporation, America, Lake City, SC; and Wellman, Inc., Shrewsbury, NJ.

Participation in the investigation and public service list. Persons, including industrial users of the subject merchandise and, if the merchandise is sold at the retail level, representative consumer organizations, wishing to participate in the final phase of this investigation as parties must file an entry of appearance with the Secretary to the Commission, as provided in § 201.11 of the Commission's rules, no later than 21 days prior to the hearing date specified in this notice. A party that filed a notice of appearance during the preliminary phase of the investigation need not file an additional notice of appearance during this final phase. The Secretary will maintain a public service list containing the names and addresses of all persons, or their representatives, who are parties to the investigation.

Limited disclosure of business proprietary information (BPI) under an administrative protective order (APO) and BPI service list. Pursuant to § 207.7(a) of the Commission's rules, the Secretary will make BPI gathered in the final phase of this investigation available to authorized applicants under the APO issued in the investigation, provided that the application is made no later than 21 days prior to the hearing date specified in this notice. Authorized applicants must represent interested parties, as defined by 19 U.S.C. 1677(9), who are parties to the investigation. A party granted access to BPI in the preliminary phase of the investigation need not reapply for such access. A separate service list will be maintained by the Secretary for those parties authorized to receive BPI under the APO.

Staff report. The prehearing staff report in the final phase of this investigation will be placed in the nonpublic record on February 27, 2007, and a public version will be issued thereafter, pursuant to § 207.22 of the Commission's rules.

Hearing. The Commission will hold a hearing in connection with the final phase of this investigation beginning at 9:30 a.m. on March 13, 2007, at the U.S. International Trade Commission Building. Requests to appear at the hearing should be filed in writing with the Secretary to the Commission on or before March 2, 2007. A nonparty who has testimony that may aid the Commission's deliberations may request permission to present a short statement at the hearing. All parties and nonparties desiring to appear at the hearing and make oral presentations should attend a prehearing conference to be held at 9:30 a.m. on March 6, 2007, at the U.S. International Trade Commission Building. Oral testimony and written materials to be submitted at the public hearing are governed by §§ 201.6(b)(2), 201.13(f), and 207.24 of the Commission's rules. Parties must submit any request to present a portion of their hearing testimony in camera no later than 7 business days prior to the date of the hearing.

Written submissions. Each party who is an interested party shall submit a prehearing brief to the Commission. Prehearing briefs must conform with the provisions of section 207.23 of the Commission's rules; the deadline for filing is March 6, 2007. Parties may also file written testimony in connection with their presentation at the hearing, as provided in § 207.24 of the Commission's rules, and posthearing briefs, which must conform with the provisions of § 207.25 of the Commission's rules. The deadline for filing posthearing briefs is March 20, 2007; witness testimony must be filed no later than three days before the hearing. In addition, any person who has not entered an appearance as a party to the investigation may submit a written statement of information pertinent to the subject of the investigation, including statements of support or opposition to the petition, on or before March 20, 2007. On April 5, 2007, the Commission will make available to parties all information on which they have not had an opportunity to comment. Parties may submit final comments on this information on or before April 9, 2007, but such final comments must not contain new factual information and must otherwise comply with § 207.30 of the Commission's rules. All written submissions must conform with the provisions of § 201.8 of the Commission's rules; any submissions that contain BPI must also conform with the requirements of §§ 201.6, 207.3, and 207.7 of the Commission's rules. The Commission's rules do not authorize filing of submissions with the Secretary by facsimile or electronic means, except to the extent permitted by § 201.8 of the Commission's rules, as amended, 67 FR 68036 (November 8, 2002). Even where electronic filing of a document is permitted, certain documents must also be filed in paper form, as specified in II (C) of the Commission's Handbook on Electronic Filing Procedures, 67 FR 68168, 68173 (November 8, 2002).

Additional written submissions to the Commission, including requests pursuant to section 201.12 of the Commission's rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff.

In accordance with §§ 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the investigation must be served on all other parties to the investigation (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.

I. Background

The National Longitudinal Survey of Youth 1979 (NLSY79) is a nationally representative survey of people who were born in the years 1957 to 1964 and lived in the U.S. when the survey began in 1979. NLSY79 participants were interviewed annually from 1979 to 1994 and have been interviewed every two years since 1994. The focus of the survey is labor market experiences, but the survey also covers topics that affect or are affected by labor market activity. These topics include education, training, marital and family relationships, fertility, childcare, health, substance use, and others.

The Bureau of Labor Statistics (BLS) contracts with the National Opinion Research Center (NORC) of the University of Chicago to conduct the NLSY79. Prior to each round of the NLSY79, a pretest has been conducted with a separate, smaller sample to help ensure the proper functioning of questionnaires, procedures, and systems and to rectify any problems before the main fielding of the NLSY79. Over time, the size of the pretest sample has declined significantly, and the characteristics of pretest participants now differ so sharply from the characteristics of most NLSY79 participants that the pretest no longer is a useful tool to detect and remedy problems with the survey. For this reason, the BLS and its contractors have decided to replenish the pretest sample.

One of the goals of the Department of Labor (DOL) is to produce and disseminate timely, accurate, and relevant information about the U.S. labor force. The BLS contributes to this goal by gathering information about the labor force and labor market and disseminating it to policymakers and the public so that participants in those markets can make more informed, and thus more efficient, choices. Research based on the NLSY79 contributes to the formation of national policy in the areas of education, training, employment programs, and school-to-work transitions. In addition to the reports that the BLS produces based on data from the NLSY79, members of the academic community publish articles and reports based on NLSY79 data for the DOL and other funding agencies. The survey design provides data gathered from the same respondents over time to form the only data set that contains this type of intergenerational information for these important population groups. Without the collection of these data, an accurate longitudinal data set could not be provided to researchers and policymakers, thus adversely affecting the DOL's ability to perform its policy- and report-making activities.

The BLS seeks approval to conduct interviews to replenish the pretest sample of the NLSY79. The process of replenishing the sample requires new sample members to be interviewed during the summer of 2007. The information obtained from this interview will be used for an input file during the NLSY79 Round 23 pretest that is planned for October 2007. Because the NLSY79 is longitudinal, the questions that respondents are asked in one round sometimes depend on the responses they provided in previous rounds. The summer 2007 interview is necessary to obtain information that will enable all questions to function properly in the October 2007 pretest. At an appropriate later date, the BLS will request approval to conduct the regular pretest and main fielding for Round 23 of the NLSY79.

The expanded pretest sample will add 100 cooperative respondents born in the years 1957 to 1964. The sample will be selected from a targeted telephone list of approximately 1,000 numbers that is maintained in the NORC telephone center system. To make the dialing effort more efficient, NORC will screen its list for phone numbers that are no longer working or that are associated with businesses. The new sample members will be dispersed across rural, suburban, and urban tracts within 40 miles of Chicago. The sample will be targeted across these different types of tracts based on the area codes selected for the replenishment effort.

By design, the replenished pretest sample will be one of convenience rather than one used to produce nationally representative estimates. The sample characteristics will be constrained only by the birth year, but the BLS and its contractors will seek a diverse mix of men and women across racial and ethnic groups. Employed individuals also will be targeted so that the pretest can effectively examine the most critical NLSY79 questionnaire paths, which relate to employment.

The Bureau of Labor Statistics is particularly interested in comments that:

• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.

• 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.

• Enhance the quality, utility, and clarity of the information to be collected.

• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

Type of Review: Reinstatement, with change, of a previously approved collection for which approval has expired.

Agency: Bureau of Labor Statistics.

Title: National Longitudinal Survey of Youth 1979.

OMB Number: 1220-0109.

Affected Public: Individuals or households.

Total Burden Cost (capital/startup): $0.

Total Burden Cost (operating/maintenance): $0.

Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they also will become a matter of public record.

The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Desk, 100 F Street, NE., Washington, DC 20549-0102 (telephone (202) 551-5850).

1. Nexbank is a UIT registered under the Act. Each Series will be a series of a Trust, each a UIT which is or will be registered under the Act. NexBank Securities, a Delaware corporation, is registered under the Securities Exchange Act of 1934 as a broker-dealer and is the depositor of NexBank. Each Trust will be sponsored by a Depositor. Each Series will be created by a trust indenture between the Depositor and a banking institution or trust company as trustee (“Trustee”).

2. The Depositor acquires a portfolio of securities, which it deposits with the Trustee in exchange for certificates representing units of fractional undivided interest in the Series' portfolio (“Units”). The Units are offered to the public through the Depositor and dealers at a price which, during the initial offering period, is based upon the aggregate market value of the underlying securities plus a front-end sales charge. The Depositor may reduce the sales charge in compliance with rule 22d-1 under the Act in certain circumstances, which are disclosed in the Series' prospectus.

3. The Depositor does not currently intend to maintain a secondary market for Units of outstanding Series, but may seek to do so in the future. Other broker-dealers may or may not maintain a secondary market for Units of a Series. If a secondary market is maintained, investors will be able to purchase Units on the secondary market at the current public offering price plus a front-end sales charge. If such a market is not maintained at any time for any Series, holders of the Units (“Unitholders”) of that Series may redeem their Units through the Trustee.

1. Applicants request an order to the extent necessary to permit one or more Series to impose a sales charge on a deferred basis (“DSC”). For each Series, the Depositor would set a maximum sales charge per Unit, a portion of which may be collected “up front” (i.e., at the time an investor purchases the Units). The DSC would be collected subsequently in installments (“Installment Payments”) as described in the application. The Depositor would not add any amount for interest or any similar or related charge to adjust for such deferral.

2. When a Unitholder redeems or sells Units, the Depositor intends to deduct any unpaid DSC from the redemption or sale proceeds. When calculating the amount due, the Depositor will assume that Units on which the DSC has been paid in full are redeemed or sold first. With respect to Units on which the DSC has not been paid in full, the Depositor will assume that the Units held for the longest time are redeemed or sold first. Applicants represent that the DSC collected at the time of redemption or sale, together with the Installment Payments and any amount collected up front, will not exceed the maximum sales charge per Unit. Under certain circumstances, the Depositor may waive the collection of any unpaid DSC in connection with redemptions or sales of Units. These circumstances will be disclosed in the prospectus for the relevant Series and implemented in accordance with rule 22d-1 under the Act.

3. Each Series offering Units subject to a DSC will state the maximum charge per Unit in its prospectus. In addition, the prospectus for such Series will include the table required by Form N-1A (modified as appropriate to reflect the difference between UITs and open-end management investment companies) and a schedule setting forth the number and date of each Installment Payment, along with the duration of the collection period. The prospectus also will disclose that portfolio securities may be sold to pay an Installment Payment if distribution income is insufficient and that securities will be sold pro rata or a specific security will be designated for sale.

1. Applicants request an order to the extent necessary to permit Unitholders of a Series to exchange their Units for Units of another Series (“Exchange Option”) and Unitholders of a Series that is terminating to exchange their Units for Units of a new Series of the same type (“Rollover Option”). The Exchange Option and Rollover Option would apply to all exchanges of Units sold with a front-end sales charge or DSC.

2. A Unitholder who purchases Units under the Exchange Option or Rollover Option would pay a lower sales charge than that which would be paid for the Units by a new investor. The reduced sales charge will be reasonably related to the expenses incurred in connection with the administration of the DSC program, which may include an amount that will fairly and adequately compensate the Depositor and participating underwriters and brokers for their services in providing the DSC program.

3. Pursuant to the Exchange Option, an adjustment would be made if Units of any Series are exchanged within five months of their acquisition for Units of a Series with a higher sales charge (“Five Months Adjustment”). An adjustment also would be made if Units on which a DSC is collected are exchanged for Units of a Series that imposes a front-end sales charge and the exchange occurs before the DSC collected (plus any amount collected up front on the exchanged Units) at least equals the per Unit sales charge on the acquired Units (“DSC Front-End Exchange Adjustment”). If an exchange involves either the Five Months Adjustment or the DSC Front-End Exchange Adjustment, the Unitholder would pay the greater of the reduced sales charge or an amount which, together with the sales charge already paid on the exchanged Units, equals the normal sales charge on the acquired Units on the date of the exchange. With appropriate disclosures, the Depositor may waive such payment. Further, the Depositor would reserve the right to vary the sales charge normally applicable to a Series and the charge applicable to exchanges, as well as to modify, suspend, or terminate the Exchange Option as set forth in the conditions to the application.

1. Section 4(2) of the Act defines a “unit investment trust” as an investment company that issues only redeemable securities. Section 2(a)(32) of the Act defines a “redeemable security” as a security that, upon its presentation to the issuer, entitles the holder to receive approximately his or her proportionate share of the issuer's current net assets or the cash equivalent of those assets. Rule 22c-1 under the Act requires that the price of a redeemable security issued by a registered investment company for purposes of sale, redemption or repurchase be based on the security's current net asset value (“NAV”). Because the collection of any unpaid DSC may cause a redeeming Unitholder to receive an amount less than the NAV of the redeemed Units, applicants request relief from section 2(a)(32) and rule 22c-1.

2. Section 22(d) of the Act and rule 22d-1 under the Act require a registered investment company and its principal underwriter and dealers to sell securities only at the current public offering price described in the investment company's prospectus, with the exception of sales of redeemable securities at prices that reflect scheduled variations in the sales load. Section 2(a)(35) of the Act defines the term “sales load” as the difference between the sales price and the portion of the proceeds invested by the depositor or trustee. Applicants request relief from section 2(a)(35) and section 22(d) to permit waivers, deferrals or other scheduled variations of the sales load.

3. Under section 6(c) of the Act, the Commission may exempt classes of transactions, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that their proposal meets the standards of section 6(c). Applicants state that the provisions of section 22(d) are intended to prevent (a) riskless trading in investment company securities due to backward pricing, (b) disruption of orderly distribution by dealers selling shares at a discount, and (c) discrimination among investors resulting from different prices charged to different investors. Applicants assert that the proposed DSC program will present none of these abuses. Applicants further state that all scheduled variations in the sales load will be disclosed in the prospectus of each Series and applied uniformly to all investors, and that applicants will comply with all the conditions set forth in rule 22d-1.

4. Section 26(a)(2)(C) of the Act, in relevant part, prohibits a trustee or custodian of a UIT from collecting from the trust as an expense any payment to the trust's depositor or principal underwriter. Because the Trustee's payment of the DSC to the Depositor may be deemed to be an expense under section 26(a)(2)(C), applicants request relief under section 6(c) from section 26(a)(2)(C) to the extent necessary to permit the Trustee to collect Installment Payments and disburse them to the Depositor. Applicants submit that the relief is appropriate because the DSC is more properly characterized as a sales load.

1. Sections 11(a) and 11(c) of the Act prohibit any offer of exchange by a UIT for the securities of another investment company unless the terms of the offer have been approved in advance by the Commission. Applicants request an order under sections 11(a) and 11(c) for Commission approval of the Exchange Option and the Rollover Option. Applicants state that the Five Months Adjustment and the DSC Front-End Exchange Adjustment in certain circumstances are appropriate to maintain the equitable treatment of various investors in each Series.

1. Section 14(a) of the Act requires that a registered investment company have $100,000 of net worth prior to making a public offering. Applicants state that each Series will comply with this requirement because the Depositor will deposit substantially more than $100,000 of debt and/or equity securities, depending on the objective of the particular Series. Applicants assert, however, that the Commission has interpreted section 14(a) as requiring that the initial capital investment in an investment company be made without any intention to dispose of the investment. Applicants state that, under this interpretation, a Series would not satisfy section 14(a) because of the Depositor's intention to sell all the Units of the Series.

2. Rule 14a-3 under the Act exempts UITs from section 14(a) if certain conditions are met, one of which is that the UIT invest only in “eligible trust securities,” as defined in the rule. Applicants state that they may not rely on rule 14a-3 because certain future Series (collectively, “Equity Series”) will invest all or a portion of their assets in equity securities or registered investment company securities pursuant to an exemptive order, which do not satisfy the definition of eligible trust securities.

3. Applicants request an exemption under section 6(c) of the Act to the extent necessary to exempt the Equity Series from the net worth requirement in section 14(a). Applicants state that the Series and the Depositor will comply in all respects with the requirements of rule 14a-3, except that the Equity Series will not restrict their portfolio investments to “eligible trust securities.”

1. Section 19(b) of the Act and rule 19b-1 under the Act provide that, except under limited circumstances, no registered investment company may distribute long-term gains more than once every twelve months. Rule 19b-1(c), under certain circumstances, exempts a UIT investing in eligible trust securities (as defined in rule 14a-3) from the requirements of rule 19b-1. Because the Equity Series do not limit their investments to eligible trust securities, however, the Equity Series will not qualify for the exemption in paragraph (c) of rule 19b-1. Applicants therefore request an exemption under section 6(c) from section 19(b) and rule 19b-1 to the extent necessary to permit capital gains earned in connection with the sale of portfolio securities to be distributed to Unitholders along with the Equity Series' regular distributions. In all other respects, applicants will comply with section 19(b) and rule 19b-1.

2. Applicants state that their proposal meets the standards of section 6(c). Applicants assert that any sale of portfolio securities would be triggered by the need to meet Trust expenses, Installment Payments, or by redemption requests, events over which the Depositor and the Equity Series do not have control. Applicants further state that, because principal distributions must be clearly indicated in accompanying reports to Unitholders as a return of principal and will be relatively small in comparison to normal dividend distributions, there is little danger of confusion from failure to differentiate among distributions.

Applicants agree that any order granting the requested relief will be subject to the following conditions:

1. Whenever the Exchange Option or the Rollover Option is to be terminated or its terms are to be amended materially, any holder of a security subject to that privilege will be given prominent notice of the impending termination or amendment at least 60 days prior to the date of termination or the effective date of the amendment, provided that: (a) No such notice need be given if the only material effect of an amendment is to reduce or eliminate the sales charge payable at the time of an exchange, to add one or more new Series eligible for the Exchange Option or the Rollover Option, or to delete a Series which has terminated; and (b) no notice need be given if, under extraordinary circumstances, either (i) there is a suspension of the redemption of Units of the Series under section 22(e) of the Act and the rules and regulations promulgated thereunder, or (ii) a Series temporarily delays or ceases the sale of its Units because it is unable to invest amounts effectively in accordance with applicable investment objectives, policies and restrictions.

2. An investor who purchases Units under the Exchange Option or the Rollover Option will pay a lower sales charge than that which would be paid for the Units by a new investor.

3. The prospectus of each Series offering exchanges or rollovers and any sales literature or advertising that mentions the existence of the Exchange Option or Rollover Option will disclose that the Exchange Option and the Rollover Option are subject to modification, termination or suspension without notice, except in certain limited cases.

4. Any DSC imposed on a Series' Units will comply with the requirements of subparagraphs (1), (2) and (3) of rule 6c-10(a) under the Act.

5. Each Series offering Units subject to a DSC will include in its prospectus the disclosure required by Form N-1A relating to deferred sales charges (modified as appropriate to reflect the differences between UITs and open-end management investment companies) and a schedule setting forth the number and date of each Installment Payment.

1. Applicants will comply in all respects with the requirements of rule 14a-3, except that the Equity Series will not restrict their portfolio investments to “eligible trust securities.”

An electronic copy of this document may be downloaded using a modem and suitable communications software from the Government Printing Office's Electronic Bulletin Board Service at (202) 512-1661. Internet users may reach the Office of the Federal Register's home page at: http://www/nara.gov/fedreg and the Government Printing Office's database at: http://www.access.gpo.gov.nara .

The FHWA in cooperation with the Idaho Department of Transportation (ITD), and Connecting Idaho Partners (CIP) will prepare an EIS to identify an alignment for the extension of State Highway 16 (SH 16) from SH 44 (State Street) to Interstate 84 (I-84) in Ada County, Idaho. This extension includes a new bridge across the Boise River. Notice is hereby given that the public scoping process has been initiated to prepare an EIS that will address the impacts of and alternatives to the proposal. The purpose of the scoping process is to solicit public comment regarding the full spectrum of issues and concerns, including a suitable range of alternatives, and the nature and extent of potential environmental impacts and appropriate mitigation measures that should be addressed in the EIS process. The EIS will examine the short and long-term impacts of a reasonable range of alternatives, including the no action alternative, on the natural, physical, and human environments. The impacts assessment will include, but not be limited to, impacts on wetlands, wildlife, and fisheries; social environment; changes in land use; aesthetics; changes in traffic; and economic impacts. Environmental Justice (as outlined in Executive Order 12898) will also be addressed as part of the impact assessment. The EIS will also examine measures to mitigate adverse impacts resulting from the proposed action.

Comments are being solicited from Federal, State, and local agencies and from private organizations and citizens who have interest in this proposal. Public information meetings will be held in the project area to discuss the potential alignments. The draft EIS will be available for public and agency review, and a public hearing will be held to receive comments. Public notice will be given of the time and place of all meetings and hearings.

Comments and/or suggestions from all interested parties are requested, to ensure that the purpose and need for the project, the full range of all issues, and significant environmental issues in particular, are identified and reviewed. Comments or questions concerning this proposed action and/or its EIS should be directed to the FHWA, ITD or CIP at the addresses listed previously.

It is anticipated that a draft EIS will be available in the Fall of 2009.

The Proposed Program: The proposed program grew out of a 1998 study of the Rapid Transit System, a busway serving the greater Jacksonville area, which has been funded in part by a one-half cent sales tax approved in 2000. The Rapid Transit System's proposed alignments are located in major corridors—the North corridor, extending from the Jacksonville central business district (CBD) north to Norwood Avenue; the East corridor, extending from the CBD east to Regency Square Mall; the Southeast corridor, extending from the CBD southeast to Baymeadows Road; and the Southwest corridor, extending from the CBD southwest to 103rd Street/Timuquana Road—that serve and connect employment centers and residential areas. A full description of the system, complete with maps, may be obtained upon request, and will be available at each public scoping meeting. Additional information on the Regional Transit System can also be found on the Jacksonville Transportation Authority Web site at http://www.jtafla.org. The proposed program is consistent with the approved Long Range Transportation Plan of the First Coast Metropolitan Planning Organization. The objective of this programmatic—also known as Tier 1—impact statement process is to settle on alignments within system corridors to enable right-of-way acquisition to proceed, thereby avoiding additional delays that would serve to increase the overall cost of the program.

Purposes of and Need for the Proposed Program: Recent studies of the corridors to be served by the proposed program revealed the need for transportation improvements, including a wider range of mobility options, to meet increasing travel demand within and through the corridors. Transit service delivery options are undergoing major changes in the greater Jacksonville area in response to changing demographics. Jacksonville is geographically expansive, with multiple employment centers both downtown and in suburban areas. Additionally, Jacksonville has an increasingly elderly population occurring naturally with long term residents and with in-migration from other States and south Florida. Jacksonville also has experienced increases in suburban employment centers and increases in downtown residential development along with continued suburban residential development. Regional Transit System improvements are designed to accommodate these changing circumstances.

Alternatives: By and large, the proposed program is substantially identical to a locally preferred alternative that was adopted in 2005 at the conclusion of alternatives analysis studies. This programmatic impact statement process will examine the transit system as a whole with a view toward settling on alignments within the four corridors identified above. Refinements to various alignments will be explored. These refinements will be developed in consultation with State and local agencies and the surrounding community in the context of the programmatic impact statement. The intent of the refinements is to stay generally within the original corridor while seeking to enhance ridership potential, reduce costs where feasible, and mitigate adverse environmental impacts. Major components of the entire system will be phased in over time. A site-specific environmental process will be undertaken for each component.

For this programmatic examination, the only other alternative currently under consideration is a no-build alternative. The no-build alternative serves as the baseline against which environmental effects of other alternatives, including the proposed program, may be measured.

The Programmatic Environmental Impact Statement Process and the Role of the Public: The purpose of the programmatic impact statement process is to explore in a public setting potentially significant effects of implementing the proposed program, particularly as it relates to alignment options within the system, on the physical, human, and natural environment. Areas of investigation include, but are not limited to, land use, development potential, land acquisition and displacements, historic resources, visual and aesthetic qualities, air quality, noise and vibration, energy use, safety and security, and ecosystems, including threatened and endangered species. Measures to avoid, minimize, or mitigate any significant adverse impacts will be identified.

Regulations implementing the National Environmental Policy Act (NEPA), as well as provisions of the joint Federal Transit Administration—Federal Highway Administration National Environmental Policy Act procedures, call for public involvement in the impact statement process. The scoping meetings announced above are designed to provide the public with the most meaningful opportunity to participate knowledgeably in this process.

Comments in response to this notice on potentially significant environmental impacts that may be associated with the proposed program are welcomed. There will be additional opportunities to comment in the scoping process at the public meetings announced above.

This document is organized in the following sections:

On September 7, 2006, the Federal Transit Administration (FTA) published in the Federal Register (at 71 FR 52849), a proposed policy on (i) when High-Occupancy Vehicle (HOV) lanes converted to High-Occupancy/Toll (HOT) lanes shall be classified as “fixed guideway miles” for the purpose of FTA's funding formulas and (ii) when HOT lanes shall not be classified as fixed guideway miles for the purpose of FTA's funding formulas. The proposed policy reads as follows:

This final policy statement explains when FTA shall classify HOV lanes converted to HOT lanes as “fixed guideway miles” for the purpose of FTA's funding formulas and when FTA shall not classify HOT lanes as fixed guideway miles for the purpose of its funding formulas.

Since the early 1980s, transportation officials have sought to manage traffic congestion and increase vehicle occupancy by means of High-Occupancy Vehicle (HOV) lanes—highway lanes reserved for the exclusive use of car pools and transit vehicles. Today, there are over 130 freeway HOV facilities in metropolitan areas in the US, 1 of which approximately ten have received funding through FTA's Major Capital Investment program and approximately eighty are counted as fixed guideway miles for purposes of FTA's formula grant programs. 2 Since 1990, however, HOV mode share in thirty-six of the forty largest metropolitan areas has steadily declined, 3 while both excess capacity on HOV lanes and congestion on general purpose lanes have increased. 4

An increasing number of metropolitan areas are considering new demand management strategies as alternatives to HOV lanes. One emerging alternative is the variably-priced High-Occupancy/Toll (HOT) lane. HOT lanes combine HOV and pricing strategies by allowing Single-Occupant Vehicles (SOVs) to access HOV lanes by paying a toll. The lanes are “managed” through pricing to maintain free flow conditions even during the height of rush hours.

HOT lanes provide multiple benefits to metropolitan areas that are experiencing severe and worsening congestion and significant transportation funding shortages. First, variably-priced HOT lanes expand mobility options in congested urban areas by providing an opportunity for reliable travel times for users prepared to pay a premium for this service. HOT lanes also improve the efficiency of HOV facilities by allowing toll-paying SOVs to utilize excess lane capacity on HOVs. In addition, HOT lanes generate new revenue which can be used to pay for transportation improvements, including enhanced transit service.

In August of 2005, recognizing the advantages of HOT lanes, the U.S. Congress enacted Section 112 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), codified at 23 U.S.C. 166, to authorize States to permit use of HOV lanes by SOVs, so long as the performance of the HOV lanes is continuously monitored and continues to meet specified performance standards. The U.S. Department of Transportation (Department) has strongly endorsed the conversion of HOV lanes to variably-priced HOT lanes, most recently in its Initiative to Reduce Congestion on the Nation's Transportation Network. It is the Department's policy to encourage jurisdictions to consider “HOV-to-HOT” conversion as a means of congestion relief and possible revenue enhancement.

The ability of HOT lanes to introduce additional traffic to existing HOV facilities, while using pricing and other management techniques to control the number of additional motorists, maintain high service levels and provide new revenue, make HOT lanes an effective means of reducing congestion and improving mobility. For this reason, and given the new authority enacted by Congress to promote “HOV-to-HOT” conversions, many States, transportation agencies and metropolitan areas are seriously considering applying variable pricing to both new and existing roadways. For example, the current long-range transportation plan for the Washington, DC, metropolitan area includes four new HOT lanes along fifteen miles of the Capital Beltway in Virginia, and six new variably-priced lanes along eighteen miles on the Inter-County Connector in Montgomery and Prince George's Counties in Maryland. 5 Virginia is also exploring the possibility of converting existing HOV lanes along the I-95/395 corridor into HOT lanes. 6 Maryland is considering express toll lanes along I-495, I-95 and I-270, as well as along other facilities. 7 Similarly, in San Francisco, the Metropolitan Transportation Commission's Transportation 2030 Plan advocates development of a HOT network that would convert that region's existing HOV lanes to HOT lanes;  8 Houston's 2025 Regional Transportation Plan includes plans to implement peak period pricing within the managed HOT lanes of the major freeway corridors in the region;  9 and the Miami-Dade, Florida 2030 Transportation Plan includes conversion of existing HOV lanes to reversible HOV/HOT lanes to provide additional capacity to I-95 in Miami-Dade County. 10 Other jurisdictions are exploring the potential for HOT lanes with grants provided by the Department's Value Pricing Pilot Program. 11 These include the Port Authority of New York/New Jersey; San Antonio, Texas; Seattle, Washington; Atlanta, Georgia; and Portland, Oregon. 12

While an increasing number of metropolitan planning organizations and State departments of transportation are studying the HOT lane concept as a strategy to improve mobility, six HOT lane facilities currently operate in the United States: State Route 91 (SR 91) Express Lanes in Orange County, California; the I-15 FasTrak in San Diego, California; the Katy Freeway QuickRide and the Northwest Freeway (US 290) in Harris County, Texas; I-394 in Minneapolis and St. Paul, Minnesota; and I-25 in Denver, Colorado.

Since 2002, FTA's policy has been to continue to classify the lanes of an HOV facility converted to HOT lanes as fixed guideway miles for funding formula purposes on the condition that the facility meets two requirements: (i) The HOT facility manages SOV use so that it does not impede the free-flow and high speed of transit and high-occupancy vehicles and (ii) toll revenues collected on the facility will be used for mass transit purposes. 13 FTA has considered requiring as an additional condition for eligibility that the lowest toll payable by SOVs on a HOT facility be not less than the fare charged for transit services on the HOT facility.

(a) Purpose of Final Policy. This final policy statement will help ensure that Federal transit funding for congested urban areas is not decreased when existing HOV facilities are converted to variably-priced HOT lanes in an effort by localities to reduce congestion, improve air quality, and maximize throughput using excess HOV lane capacity. The policy will also promote a uniform approach by the Department's operating agencies concerning HOV-to-HOT conversions. In particular, FTA's policy will be coordinated with the statutes enacted by the U.S. Congress under Section 112 of SAFETEA-LU applicable to the Federal Highway Administration that are intended to simplify conversion of HOV lanes to HOT lanes. The policy will also support the Department's objective of encouraging HOV-to-HOT conversions.

(b) Final Policy. FTA shall classify HOT lanes as fixed guideway miles for purposes of the funding formulas administered under 49 U.S.C. 5307 and 49 U.S.C. 5309, so long as each of the following conditions is satisfied:

(i) The HOT lanes were previously  14 HOV lanes reported in the National Transit Database as fixed guideway miles for purposes of the funding formulas administered by FTA under 49 U.S.C. 5307(b) and 49 U.S.C. 5309(a)(E). 15 Facilities that were not eligible HOV lanes prior to being converted to HOT lanes will remain ineligible for inclusion as fixed guideway miles in FTA's funding formulas. Therefore, neither non-HOV facilities converted directly to HOT facilities nor facilities constructed as HOT lanes will be eligible for classification as fixed guideway miles. 16

(ii) The HOT lanes are continuously monitored and continue to meet performance standards that preserve free flow traffic conditions as specified in 23 U.S.C. 166(d). 23 U.S.C. 166(d) provides operational performance standards for an HOV facility converted to a HOT facility. It also requires that the performance of the facility be continuously monitored and that it continue to meet specified performance standards. Due to original project commitments, HOV facilities constructed using capital funds available under 49 U.S.C. 5309(d) or (e) may be required, when converted to HOT lanes, to achieve a higher performance standard than required under 23 U.S.C. 166(d). Standards for operational performance and determining degradation of operational performance for facilities constructed with funds from FTA's New Starts program shall be determined by FTA on a case-by-case basis. FTA will require real-time monitoring of traffic flows to ensure on-going compliance with operational performance standards.

(iii) Program income from the HOT lane facility, including all toll revenue, is used solely for “permissible uses. ” “Permissible uses” means any of the following uses with respect to any HOT lane facility, whether operated by a public or private entity: (a) Debt service, (b) a reasonable return on investment of any private financing, (c) the costs necessary for the proper operation and maintenance of such facility, 17 and (d) if the operating entity annually certifies that the facility is being adequately operated and maintained (including that the permissible uses described in (a), (b) and (c) above, if applicable, are being duly paid), any other purpose relating to a project carried out under Title 49 U.S.C. 5301 et seq. In cases where the HOT lane facility has received (or receives) funding from FTA and another Federal agency, such that use of the facility's program income is governed by more than one Federal program, FTA's restrictions concerning permissible use shall not apply to more than transit's available share  18 of the facility's program income. FTA shall not require recipients to assign priority in payment to any permissible use.

(c) Transit Fares and Tolls on HOT Lane Facilities. FTA shall not condition the classification of HOT lanes converted from HOV lanes as fixed guideway miles, or condition any approval or waiver under a Full Funding Grant Agreement, on a grantee's adopting transit fare policies or a tolling authority's adopting of tolling policies concerning, respectively, the price of transit services on the HOT lane facility and the tolls payable by SOVs. Instead, FTA shall permit grantees and tolling authorities to develop their own fare structures for transit services and tolls, respectively, on HOT lane facilities. Transit fares shall remain subject to 49 U.S.C. 332 (Nondiscrimination) and 49 U.S.C. 5307 (Urbanized area formula grants), however.

(d) No Return of Funds under Full Funding Grant Agreements. In the event that an HOV facility is converted to a HOT facility and the HOV facility has received funds through FTA's New Starts program, FTA shall not require the grantee to return such funds so long as the facility complies with the conditions set forth in this final policy statement and the original grant agreement or Full Funding Grant Agreement, as applicable.

Thirty-four parties submitted comments in response to FTA's proposed policy, published in the Federal Register on September 7, 2006, at 71 FR 52849 (the proposed policy). This section responds to those comments by topic in the following order: (a) Policy Statement Generally; (b) HOT Lanes Were Previously HOV Lanes Reported in the National Transit Database as “Fixed Guideway Miles”; (c) Monitoring and Performance Standards; (d) Program Income and Toll Revenues; (e) Transit Fares and Tolls; (f) Return of Funds under Full Funding Grant Agreements; and (g) Miscellaneous Comments.

(a) Policy Statement Generally. The purpose of the proposed policy was to ensure that Federal transit funding for congested urban areas would not be decreased if HOV facilities were converted to variably-priced HOT lanes. The proposed policy also sought to achieve a uniform approach among the operating agencies of the Department concerning HOV-to-HOT conversions, and supported the Department's policy of encouraging HOV-to-HOT conversions. Eight commenters agreed generally with FTA's proposed policy. Six parties submitted general comments. Four commenters asked FTA to defer its final policy determination until the impacts become more apparent. One commenter articulated four policy principles that discuss ways to integrate transit into toll roads and HOT lanes. 19 Another commenter stated that one of FTA's top priorities in developing the policy should be to foster an increase in alternative transportation ridership—whether that alternative is carpool, vanpool, transit, or other shared-mode—and suggested four ways the policy statement could better support this end. 20

FTA Response: The commenters that asked FTA to defer its final policy determination until the impacts are more apparent seemed to misunderstand the scope of FTA's proposed policy. FTA's HOV-to-HOT policy will not result in all HOT lane facilities being classified as fixed guideway miles for purposes of FTA's funding formulas. Rather, only those HOT lane facilities converted from HOV lanes that have been previously classified as fixed guideway miles shall qualify for continued classification as such, subject to the conditions set forth in the final policy statement in section II of this notice.

In response to the four policy principles summarized at footnote (19), FTA reminds the commenter that, without this final policy statement, transit formula funding for congested urban areas would decrease if existing HOV facilities were converted to variably-priced HOT lanes. For this reason, FTA believes that this policy statement: (1) Gives states greater latitude to use tolling without negatively impacting available transit resources; (2) enhances existing transportation funding through the collection of toll revenues; (3) grants project sponsors discretion to use toll revenues for any “permissible use” (as defined in section II of this notice); and (4) encourages variably-priced HOT lanes as a long-term strategy, consistent with the policy of the Department.

In response to the commenter that stated FTA should consider fostering an increase in alternative transportation ridership as one of its top priorities in developing this guidance, FTA reemphasizes its primary purpose in drafting this guidance—to ensure that Federal transit funding for congested urban areas is not decreased when exiting HOV facilities are converted to HOT lanes. FTA responds to the commenter's four suggestions summarized at footnote (20) in turn. With respect to the first suggestion, the final policy statement supports HOV usage, but recognizes that many HOV facilities are underutilized; the ability of HOT lanes to introduce additional traffic to existing HOV facilities, while using pricing and other demand management techniques to control the number of additional motorists, maintain high service levels and provide new revenue, make HOT lanes an effective means of reducing congestion and improving mobility. With respect to the second and third suggestions, FTA will rely on the management, operation, monitoring and enforcement provisions of 23 U.S.C. 166(d). With respect to the fourth suggestion, the final policy statement does not modify language at 23 U.S.C. 166(c)(3).

Accordingly, FTA has adopted as final the general provisions of its proposed policy.

(b) HOT Lanes Were Previously HOV Lanes Reported in the National Transit Database as Fixed Guideway Miles. In its notice describing the proposed policy, FTA requested comments on its proposal to classify HOT lanes as fixed guideway miles for purposes of the funding formulas administered under 49 U.S.C. 5307 and 49 U.S.C. 5309, so long as each of three conditions is satisfied. The first condition is that the HOT lanes were previously HOV lanes reported in the National Transit Database as fixed guideway miles for purposes of the funding formulas administered by FTA under 49 U.S.C. 5307 and 49 U.S.C. 5309. FTA received thirty-five comments on this condition, with some parties offering multiple comments. Eight commenters favored FTA's proposed policy. Eighteen commenters asked FTA to expand its policy to classify all HOT lanes as fixed guideway miles for purposes of the funding formulas administered by FTA, regardless of whether the HOT lane facility was newly constructed or was previously an HOV facility. Seven commenters asked FTA not to fund HOT lane facilities at a level that would dilute the pool of transit funding available for existing fixed guideway facilities. Two commenters proposed that FTA require converted HOV lanes to have operated as HOV lanes for seven years prior to their conversion to HOT lanes before FTA would classify them as fixed guideway miles.

FTA Response: FTA recognizes that all HOT lanes provide similar benefits to metropolitan areas that are experiencing severe and worsening congestion, regardless of whether the facility is newly constructed or converted from HOV or general purpose lanes. However, the purpose of the final policy statement is to ensure that Federal transit funding for congested urban areas is not decreased when existing HOV facilities are converted to variably-priced HOT lanes in an effort by localities to reduce congestion, improve air quality, or maximize throughput using excess HOV lane capacity and to promote a uniform approach by the Department's operating agencies concerning HOV-to-HOT conversions. If FTA were to classify all HOT lanes as fixed guideway miles without a commensurate increase in overall funding levels, it could negatively impact the ability of many transit operators to finance needed capital maintenance on existing infrastructure. For this reason, FTA has limited the scope of the final policy statement to classifying as fixed guideway miles only those HOT lane facilities that are converted from HOV lanes which had previously been classified as fixed guideway miles. In this way, FTA will ensure that Federal transit funding for congested urban areas is not decreased when existing HOV facilities are converted to variably-priced HOT lanes. FTA believes it appropriate to leave for the U.S. Congress, and not to determine on an administrative basis, the question of whether and on what terms facilities newly constructed as HOT lanes or general purpose lanes converted directly to HOT lanes would be classified as fixed guideway miles given the substantial reallocation of formula funds among transit authorities that might result over time if such facilities were also classified as fixed guideway miles.

FTA has included the following footnote (15) in section II (b)(i) of this notice in response to the recommendation that FTA require HOV lanes to have operated as HOV lanes for seven years before they may be converted to HOT lanes and remain classified as fixed guideway miles:

(c) Monitoring and Performance Standards. In its notice describing the proposed policy, FTA requested comments on its proposal to classify HOT lanes as fixed guideway miles for purposes of the funding formulas administered under 49 U.S.C. 5307 and 49 U.S.C. 5309, so long as each of three conditions is satisfied. The second condition is that the HOT lanes are continuously monitored and continue to meet performance standards that preserve free flow traffic conditions as specified in 23 U.S.C. 166(d). FTA received twenty comments on this topic. Four commenters favored FTA's proposed position. Seven commenters proposed that FTA require a minimum level of transit service on a HOT lane facility before its lanes could be classified as fixed guideway miles for purposes of the funding formulas administered by FTA. Five commenters requested that FTA adopt more exacting performance standards. One commenter requested that FTA state explicitly that local agencies may increase HOV occupancy levels as necessary to ensure free flow conditions needed for transit bus service. Another commenter asked FTA to amend its policy to state that single occupant vehicles may be permitted on HOT lanes that are classified as fixed guideway miles, provided that the lanes satisfy the conditions set forth in FTA's final policy statement. One commenter requested that FTA acknowledge that compliance with State law governing performance standards for HOT lanes suffices in terms of meeting the condition that the HOT lanes are continuously monitored and continue to meet performance standards that preserve free flow traffic conditions as specified in 23 U.S.C. 166(d). One commenter asked FTA to require a study on degradation of transit service before an HOV facility may convert to a HOT lane facility and be classified as fixed guideway miles for purposes of funding formulas administered by FTA.

FTA Response: FTA disagrees that it should require a more exacting performance standard, including a minimum level of transit service. FTA recognizes that a more exacting standard would be necessary if all HOT lane facilities were eligible for classification as fixed guideway miles, for under this scenario rural or suburban HOT lane facilities with little or no transit service could receive a significant portion of the Federal transit funds needed by the Nation's largest transit providers to maintain their current infrastructure. For this reason, FTA has limited the benefits of the final policy to HOV lanes that have previously been classified as fixed guideway miles. Such designation as a fixed guideway mile indicates that a facility has a minimum level of transit service. FTA believes that compliance with the performance standards codified at 23 U.S.C. 166(d) is sufficient to ensure free flow traffic conditions and to avoid degradation of transit service on these facilities when converted from HOV lanes to HOT lane facilities. Moreover, HOV facilities constructed using capital funds available under 49 U.S.C. 5309(d) or (e) could be required, when an HOV facility converts to a HOT lane facility, to achieve a higher performance standard than required under 23 U.S.C. 166(d). In all circumstances, FTA shall require real-time monitoring of traffic flows to ensure on-going compliance with 23 U.S.C. 166(d).

FTA does not agree that compliance with State law governing HOT lane performance standards will satisfy FTA's requirements in all circumstances. Rather, FTA shall require all HOT lane facilities to comply with the statutory requirements of 23 U.S.C. 166 to be classified as fixed guideway miles for purposes of FTA's funding formulas. It may be the case that the laws of certain states require a higher level of performance than the Federal standard articulated here. In these instances, the lesser Federal standard should present no obstacle to HOT conversion.

With respect to the request that FTA require a study on the degradation of transit service before an HOV facility may convert to a HOT facility, FTA (i) believes that compliance with the free flow traffic requirements of 23 U.S.C. 166 is sufficient to avoid the degradation of transit service on these facilities and accordingly (ii) will not require that project sponsors incur the additional expense of a formal study on the degradation of transit service.

(d) Program Income and Toll Revenues. In its notice describing the proposed policy, FTA requested comments on its proposal to classify HOT lanes as fixed guideway miles for purposes of the funding formulas administered under 49 U.S.C. 5307 and 49 U.S.C. 5309, so long as each of three conditions is satisfied. The third condition is that program income from the HOT lane facility, including all toll revenue, is used solely for “permissible uses.” FTA received twenty-five comments on this condition. Five commenters favored FTA's proposed policy. Seven commenters requested that FTA expressly state in its final policy that grantees may use toll revenues for transit operating costs. Four commenters stated that FTA funds should not be used for the maintenance and/or construction of HOT lane facilities. Four commenters asked FTA to require that all Federal transit funds generated by HOT lane facilities because of their classification as fixed guideway miles be directed to the “designated recipient” for Federal transit funding. Three commenters stated that FTA should not permit the operators of HOT lane facilities to finance a HOT lane facility's operating losses with Federal funds generated by the facility's classification as fixed guideway miles. One commenter asked FTA not to limit the use of HOT lane toll revenues to transit. Another commenter asked FTA to require that priority of payment be provided for in the project implementation documents.

FTA Response: Based on the recommendation of several commenters that FTA expressly state that grantees may use toll revenues for transit operating costs, and pursuant to 49 CFR part 18.25, which states that FTA “grantees may retain program income for allowable capital or operating expenses,” FTA has added transit operating costs to its description of “permissible uses” at section II(b)(iii) of this notice.

FTA disagrees with the comment that its grantees should not use Federal transit funds for the maintenance and/or construction of HOT lane facilities. The commenter did not indicate whether it referred to the use of grant funds or program income. While FTA recognizes both HOV and HOT lanes as permissible incidental uses of FTA-funded assets, FTA grant funds shall not be used to construct a HOT lane facility beyond what is allowed by 49 U.S.C. 5302(a)(4), as implemented by FTA's regulations, as amended from time to time. 21 Any facility that converts from an HOV to a HOT facility, and retains its classification as a fixed guideway by satisfying the conditions of this policy statement, may use program income in accordance with this final policy statement, the Department's regulation at 49 CFR part 18.25, and other applicable statutes, regulations and requirements. Similarly, FTA disagrees with the comment that it should limit the use of HOT lane toll revenues to transit. In many cases, a HOT lane facility may have received (or receives) funding from FTA and another Federal agency, such that use of the facility's program income is governed by more than one Federal program. In these instances, FTA's restrictions concerning permissible use shall not apply to more than transit's allocable share of the facility's program income, as described in section II of this notice. FTA will not require recipients to assign priority in payment to any permissible use.

Federal transit law requires FTA to disburse certain funds to the designated recipient. The designated recipient for FTA formula funds shall not be changed because the grantee converted an HOV facility to a HOT facility, in accordance with the final policy statement. FTA shall not prevent such designated recipients from using the funds for eligible activities in accordance with the process for programming transit funds described at 23 CFR part 450.324(l) of the joint FTA-FHWA planning regulations.

(e) Transit Fares and Tolls. In its notice describing the proposed policy, FTA requested comments on transit fares and tolls on HOT lane facilities. FTA stated that it would not condition the receipt of Federal transit funds by a qualifying HOT lane facility on the tolling authority's adoption of policies concerning the price of transit services on the HOT lane facility or the tolls payable by single occupant vehicles. FTA would allow grantees and tolling authorities to develop their own fare structures for transit services and tolls on HOT lane facilities. FTA received sixteen comments on this topic. Without further comment, five commenters agreed with FTA's proposed policy not to regulate toll prices. Ten commenters stated that transit vehicles should be exempt from tolls charged on Federally-funded HOT lane facilities for its lanes to be classified as fixed guideway miles for purposes of the funding formulas administered by FTA. One commenter asked FTA to require that transit fares and tolls remain competitive.

FTA Response: Federal transit law prohibits FTA from regulating the “rates, fares, tolls, rentals, or other charges prescribed by any provider of public transportation.” 49 U.S.C. 5334(b)(1). Accordingly, FTA shall not condition the receipt of Federal transit funds by a qualifying HOT lane facility on the tolling authority's adoption of policies concerning the price of transit services on the HOT lane facility or the tolls payable by single occupant vehicles. FTA will allow grantees and tolling authorities to develop their own fare structures for transit services and tolls, respectively, on HOT lane facilities. Transit fares shall remain subject to 49 U.S.C. 5332 (Nondiscrimination) and 49 U.S.C. 5307 (Urbanized area formula grants), however.

(f) Return of Funds under Full Funding Grant Agreements. In its notice describing the proposed policy, FTA requested comments on its proposal that, in the event that an HOV facility is converted to a HOT facility and the HOV facility has received funds through FTA's New Starts program, FTA would not require the grantee to return such funds, so long as the facility complied with the conditions set forth in the proposed policy. FTA received one comment on this topic. The commenter expressed concern that, when the grantee is not also the tolling authority, the tolling authority may make business decisions contrary to the interest of the grantee/transit provider, thus forcing the grantee/transit provider to repay New Starts funding to FTA.

FTA Response: It appears that the commenter misunderstood the scope of FTA's proposed policy, which states that “in the event that an HOV facility is converted to a HOT facility and the HOV facility has received funds through FTA's New Starts program, FTA would not require the grantee to return such funds so long as the facility complied with the conditions set forth in this guidance.” If a grantee wishes to convert an existing HOV facility to a HOT lane facility and maintain the classification of its facility as a fixed guideway for purposes of FTA's funding formulas, it must comply with the conditions set forth in the final policy statement. To the extent that the facility is subject to a Full Funding Grant Agreement, the grantee is obligated to abide by the requirements thereof, just as it is bound to any other contractual or legal obligation.

(g) Miscellaneous Comments. FTA received seven miscellaneous comments in response to its proposed policy. One commenter asked FTA to address a circumstance in which a previously eligible HOV lane (or a portion of an HOV lane) is temporarily or permanently taken out of service in order to be reconstructed and expanded into an improved HOT lane facility in the same corridor. A second commenter requested that FTA indicate whether it would classify as fixed guideway miles bus-only shoulders converted to HOT lanes when the bus-only shoulders are currently classified as fixed guideway miles. Another commenter asked FTA to clarify its policy with respect to variable-priced express lanes. Two commenters asked FTA to require coordination between privately operated HOT lane facilities and public transportation agencies. One commenter asked FTA to connect this policy with transit supportive land use. And another commenter argued that FTA's policy should not affect New Starts project eligibility criteria.

FTA Response: FTA recognizes that it may be necessary to temporarily remove an HOV lane from service in order to convert it into a HOT lane facility. Such a HOT lane facility will not lose its classification as a fixed guideway so long as it satisfies the conditions set forth in the final policy statement.

FTA agrees with the proposal that it classify as fixed guideway miles bus-only shoulders converted to HOT lanes as long as the bus-only shoulders are currently classified as fixed guideway miles and satisfy the conditions of this final policy statement. Accordingly, FTA has included the following language at footnote (16) in section II(b)(i) of this notice:

The commenter that asked FTA to consider variably-priced express lanes did not provide enough information for FTA to determine whether such facility could satisfy the conditions set forth in the proposed policy. FTA responds by reiterating its statement at section II(b)(i) of this notice, that with the exception of bus-only shoulders, “neither non-HOV facilities nor facilities constructed as HOT lanes would be eligible for classification as fixed guideway miles.”

The comment requesting that FTA require coordination between privately operated HOT lane facilities and public transportation is beyond the scope of this notice. FTA's Planning and Assistance Standards are located at 49 CFR part 613.

Similarly, the comments requesting that FTA connect this policy with transit supportive land use and that this policy not affect FTA's New Starts project eligibility criteria are beyond the scope of this notice, which is limited to the classification of HOT lane facilities as fixed guideway miles for purposes of FTA's funding formulas.

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 assets, and other types of structured finance transactions serve important purposes, such as diversifying risk, allocating cash flows and reducing cost of capital. As a result, structured finance transactions, including the more complex variations of these transactions, now are an essential part of U.S. and international capital markets.

When a financial institution participates in a CSFT, it bears the usual market, credit, and operational risks associated with the transaction. In some circumstances, a financial institution also may face heightened legal or reputational risks due to its involvement in a CSFT. For example, a financial institution involved in a CSFT may face heightened legal or reputational risk if the customer's regulatory, tax or accounting treatment for the CSFT, or disclosures concerning the CSFT in its public filings or financial statements, do not comply with applicable laws, regulations or accounting principles. 1

In some cases, certain CSFTs appear to have been used in illegal schemes that misrepresented the financial condition of public companies to investors and regulatory authorities. After conducting investigations, the OCC, Federal Reserve System and SEC took strong and coordinated civil and administrative enforcement actions against certain financial institutions that engaged in CSFTs that appeared to have been designed or used to shield their customers' true financial health from the public. These actions involved the assessment of significant financial penalties on the institutions and required the institutions to take several measures to strengthen their risk management procedures for CSFTs. 2 The complex structured finance relationships involving these financial institutions also sparked an investigation by the Permanent Subcommittee on Governmental Affairs of the United States Senate, 3 as well as numerous lawsuits by private litigants.

The OCC, Federal Reserve System and SEC also conducted special reviews of several large financial institutions engaged in CSFTs, and the Agencies have focused attention on the CSFT activities of financial institutions in the normal course of the supervisory process. These reviews and activities indicate that many of the large financial institutions engaged in CSFTs have taken meaningful steps in recent years to improve their control infrastructure relating to CSFTs.

To assist financial institutions in identifying, managing, and addressing the risks that may be associated with CSFTs, the Agencies developed and requested public comment on the Initial Proposed Statement. 4 The Initial Proposed Statement described the types of policies and procedures that a financial institution engaged in CSFTs should have in place to allow the institution to identify, document, evaluate, and control the full range of credit, market, operational, legal, and reputational risks that may arise from CSFTs. The agencies collectively received comments from more than 40 commenters on the Initial Proposed Statement. Although commenters generally supported the Agencies' efforts to describe the types of risk management procedures and internal controls that may help institutions manage the risks associated with CSFTs, virtually all of the commenters recommended changes to the Initial Proposed Statement.

After carefully reviewing the comments on the Initial Proposed Statement, the Agencies issued and requested comment on a Revised Proposed Statement. 5 The Revised Proposed Statement was modified in numerous respects to clarify the purpose, scope and effect of the statement; make the statement more risk-focused and principles based; and focus the statement on those CSFTs that may pose elevated levels of legal or reputational risk to the relevant institution. 6

The Agencies collectively received written comments from 19 commenters on the Revised Proposed Statement, although many commenters submitted identical comments to multiple Agencies. Commenters included banking organizations, financial services trade associations, and individuals. Commenters generally expressed strong support for the Revised Proposed Statement, including its principles-based structure and focus on elevated risk CSFTs. Many commenters also asserted that the Revised Proposed Statement provides a financial institution appropriate flexibility to develop internal controls and risk management procedures that are tailored to the institution's own business activities and organizational structure.

Several commenters requested that the Agencies clarify or revise the Revised Proposed Statement in certain respects. For example, some commenters asked the Agencies to further streamline the provisions in the statement pertaining to documentation of elevated risk CSFTs, or clarify how the U.S. branches or agencies of foreign banks might implement risk management systems, policies or controls consistent with the statement's principles. In addition, some commenters asked the Agencies to set forth or clarify the legal standards governing the potential liability of financial institutions for CSFTs or provide “safe harbors” from such potential liability. One group of commenters also argued that the Revised Proposed Statement should not be implemented because it allegedly would encourage or condone illegal conduct by financial institutions. The comments received on the Revised Proposed Statement are further discussed below.

After carefully reviewing the comments on the Revised Proposed Statement, the Agencies have made minor modifications to the Revised Proposed Statement in response to comments and to clarify the principles, scope, and intent of the Final Statement. The Final Statement has been adopted as supervisory guidance by the Board, OCC, FDIC and OTS and as a policy statement by the SEC. The Agencies will use the Final Statement going forward in reviewing the internal controls and risk management policies, procedures and systems of financial institutions engaged in CSFTs as part of the Agencies' ongoing supervisory process.

The Agencies continue to believe that it is important for a financial institution engaged in CSFTs to have policies and procedures that are designed to allow the institution to effectively manage and address the full range of risks associated with its CSFT activities, including the elevated legal or reputational risks that may arise in connection with certain CSFTs. For this reason, the Final Statement describes the types of risk management principles that the Agencies believe may help a financial institution to identify elevated risk CSFTs and to evaluate, manage, and address these risks within the institution's internal control framework. 7 These policies and procedures should, among other things, be designed to allow the institution to identify elevated risk CSFTs during its transaction and new product approval processes, and should provide for elevated risk CSFTs to be reviewed by appropriate levels of control and management personnel at the institution, including personnel from control areas that are independent of the business line(s) involved in the transaction.

The Final Statement—like the Revised Proposed Statement—applies to financial institutions that are engaged in CSFT activities and focuses on those CSFTs that may create heightened levels of legal or reputational risks for a participating financial institution. Because CSFTs typically are conducted by a limited number of large financial institutions, the Final Statement will not affect or apply to the vast majority of financial institutions, including most small institutions.

As the Final Statement recognizes, structured finance transactions encompass a broad array of products with varying levels of complexity. Most structured finance transactions, such as standard public mortgage-backed securities and hedging-type transactions involving “plain vanilla” derivatives or collateralized debt obligations, are familiar to participants in the financial markets, have well-established track records, and typically would not be considered CSFTs for purposes of the Final Statement. Some commenters requested that the Agencies provide a more extensive list of structured finance transactions that typically would not be considered CSFTs. The Agencies note that the types of non-complex transactions listed in the Final Statement are only examples of the types of transactions that typically would not be considered CSFTs and that any list of examples would not, and could not, be all inclusive given the changing nature of the structured finance market. Consistent with the principles-based approach of the Final Statement, the Agencies believe the statement appropriately highlights the hallmarks of a non-complex transaction— i.e. , a well established track record and familiarity to participants in the financial markets—that may guide institutions and examiners in considering whether a particular type of transaction should be considered a CSFT now or in the future.

As noted above, a financial institution should establish and maintain policies, procedures and systems that are designed to identify elevated risk CSFTs as part of the institution's transaction or new product approval processes, and to ensure that transactions or new products identified as elevated risk CSFTs are subject to heightened review. 8 In general, a financial institution should conduct the level and amount of due diligence for an elevated risk CSFT that is commensurate with the level of risks identified. A financial institution's policies and procedures should provide that CSFTs identified as potentially having elevated legal or reputational risk are reviewed and approved by appropriate levels of management. The Agencies continue to believe that the designated approval process for elevated risk CSFTs should include the institution's representatives from the relevant business line(s) and/or client relationship management, as well as from appropriate control areas that are independent of the business line(s) involved in the transaction. An institution's policies should provide that new complex structured finance products receive the approval of all relevant control areas that are independent of the profit center before the product is offered to customers. 9

The Final Statement—like the Revised Proposed Statement—provides examples of transactions that may warrant additional scrutiny by an institution. These examples include, among other things, transactions that appear to the institution to:

• Lack economic substance or business purpose;

• Be designed or used primarily for questionable accounting, regulatory, or tax objectives, particularly when the transactions are executed at year-end or at the end of a reporting period for the customer; or

• Raise concerns that the client will report or disclose the transaction in its public filings or financial statements in a manner that is materially misleading or inconsistent with the substance of the transaction or applicable regulatory or accounting requirements.

A few commenters contended that the examples of elevated risk CSFTs contained in the Revised Proposed Statement have characteristics that are signals, if not conclusive proof, of fraudulent activity, and recommended that the Agencies inform financial institutions that transactions or products with any of these characteristics should be considered presumptively prohibited. The commenters also argued that the statement encourages or condones illegal conduct by financial institutions. The Agencies believe that CSFTs that initially appear to an institution, during the ordinary course of its new product or transaction approval process, to have one or more of the characteristics identified in the Final Statement should generally be identified as an elevated risk CSFT, and the institution should conduct due diligence for the transaction that is commensurate with the level of identified, potential risks. The Agencies, however, do not believe it is appropriate to provide that all transactions initially identified as potentially creating elevated legal or reputational risks for an institution should be considered presumptively prohibited. For example, an institution, after conducting additional due diligence for a transaction initially identified as an elevated risk CSFT, may determine that the transaction does not, in fact, have the characteristics that initially triggered the review. Alternatively, the institution may take steps to address the legal or reputational risks that initially triggered the review. In this regard, the Final Statement expressly provides that, if after evaluating an elevated risk CSFT, a financial institution determines that its participation in the transaction would create significant legal or reputational risks for the institution, the financial institution should take appropriate steps to manage and address these risks. Such steps may include modifying the transaction or conditioning the institution's participation in the transaction upon the receipt of representations or assurances from the customer that reasonably address the heightened risks presented by the transaction.

Importantly, the Final Statement continues to provide that a financial institution should decline to participate in an elevated risk CSFT if, after conducting appropriate due diligence and taking appropriate steps to address the risks from the transaction, the institution determines that the transaction presents unacceptable risks to the institution or would result in a violation of applicable laws, regulations or accounting principles. 10 The Final Statement also expressly notes that financial institutions must conduct their activities in accordance with applicable statutes and regulations. The Agencies believe the Final Statement should assist financial institutions engaged in CSFTs in managing the risks associated with these activities and complying with the law, and does not, as some commenters alleged, encourage or condone illegal conduct.

Some commenters also requested that the Agencies enunciate, clarify or modify the legal standards governing the potential liability of a financial institution for participating in a CSFT that is used for fraudulent or illegal purposes. For example, some commenters asked the Agencies to declare that institutions do not have a duty to ensure the accuracy of a client's public filings or accounting. Other commenters asked that the Agencies state that an institution will not be held liable or responsible for a CSFT if the institution has a reasonable degree of confidence that the customer will report or account for the transactions properly. Other commenters expressed concern that the Revised Proposed Statement, or the comments submitted on that document, attempted to alter the current legal standards under which a financial institution may be held liable for fraudulent activity or criminally responsible under the Federal securities law or other laws.

As events in recent years have highlighted, institutions may in certain circumstances bear significant legal or reputational risk from participating in a CSFT. In light of these risks, the Final Statement describes the types of risk management systems and internal controls that may help a financial institution engaged in CSFTs to identify those CSFTs that may pose heightened legal or reputational risk to the institution, and to evaluate, manage, and address those risks. Because the Final Statement represents guidance on the part of the Banking Agencies and a policy statement on the part of the SEC, it does not, by itself, establish any legally enforceable requirements or obligations. Moreover, as the Final Statement expressly provides, it does not create any private rights of action, nor does it alter or expand the legal duties and obligations that a financial institution may have to a customer, its shareholders or other parties under applicable law. Accordingly, the Agencies do not believe it is appropriate or possible to address in the Final Statement these legal concerns expressed by commenters.

The Final Statement states that a financial institution should create and collect sufficient documentation to, among other things, verify that the institution's policies and procedures related to elevated risk CSFTs are being followed and allow the internal audit function to monitor compliance with those policies and procedures. The Final Statement also provides that, when an institution's policies and procedures require an elevated risk CSFT to be submitted for approval to senior management, the institution should maintain the transaction-related documentation provided to senior management as well as other documentation that reflect management's approval (or disapproval) of the transaction, any conditions imposed by senior management, and the reasons for such action.

Several commenters strongly suggested that the Agencies should eliminate or modify the portions of the statement that provide for a financial institution to maintain certain documentation related to elevated risk CSFTs that are submitted to the institution's senior management for approval (or denial). For example, some commenters argued that institutions should not be required to maintain any documentation for declined transactions. Other commenters expressed concern that this provision was inconsistent with the current practice of financial institutions, would require financial institutions to create new and potentially extensive documentation to memorialize all aspects of the institution's analytical and decision-making process with respect to an elevated risk CSFT, or would require institutions to create or maintain extensive documentation even for transactions that are approved or rejected by junior staff.

As an initial matter, the Agencies note that the Final Statement's provisions regarding documentation for elevated risk CSFTs submitted to senior management for approval (or disapproval) do not apply to transactions that may be reviewed and acted on by more junior personnel in accordance with the institution's policies and procedures. Rather, these provisions apply only to those elevated risk CSFTs that are identified by the institution as potentially involving the greatest degree of risk to the institution and, for this reason, are required to be reviewed by the institution's senior management. The Agencies believe that it is important for institutions to maintain documentation for this category of elevated risk CSFTs, whether approved or declined, that reflects the factors considered by senior management in taking such action. The Agencies believe this type of documentation may be of significant benefit to the institution and to the Agencies in reviewing the effectiveness of the institution's CSFT-related policies, procedures, and internal controls. However, to help address the commenter's concern about potential burden, the Agencies have modified the Final Statement to recognize that the minutes of an institution's reviewing senior management committee may have the information described and to clarify that the documentation for a transaction should reflect the factors considered by senior management in taking action, but does not have to detail every aspect of the institution's legal or business analysis of the transaction. 11

The Final Statement—like the Revised Proposed Statement—also describes some of the other key risk management policies and internal controls that financial institutions should have in place for elevated risk CSFTs. For example, the Final Statement provides that the board of directors and senior management of an institution should establish a “tone at the top” through both actions and formalized policies that sends a strong message throughout the financial institution about the importance of compliance with the law and overall good business ethics. The Final Statement also describes the types of training, reporting mechanisms, and audit procedures that institutions should have in place with respect to elevated risk CSFTs. The Final Statement also provides that a financial institution should conduct periodic independent reviews of its CSFT activities to verify and monitor that its policies and controls relating to elevated risk CSFTs are being implemented effectively and that elevated risk CSFTs are accurately identified and receive proper approvals.

In response to comments, the Agencies have modified the Final Statement to clarify that the independent reviews conducted by a financial institution may be performed by the institution's audit department or an independent compliance function within the institution. One commenter also asked the Agencies to state that the proper role of an institution's independent review function is only to confirm that the institution's policies and procedures for elevated risk CSFTs are being followed and that the function should not assess the quality of the decisions made by institution personnel. The Agencies believe that an institution's audit or compliance department should have the flexibility, in appropriate circumstances, to review the decisions made by institution personnel during the review and approval process for elevated risk CSFTs and for this reason have not made the recommended change.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR Part 1320, Appendix A.1), the Agencies reviewed the Final Statement. The Agencies may not conduct or sponsor, and an organization is not required to respond to, this information collection unless it displays a currently valid OMB control number. The Agencies previously determined that certain provisions of the Revised Proposed Statement contained information collection requirements. OMB reviewed and approved the information collections contained in the Revised Proposed Statement for the FDIC, OTS, OCC and SEC; and the Board reviewed the Revised Proposed Statement under the authority delegated to the Board by OMB (5 CFR Part 1320, Appendix A.1).

OMB control numbers:

OCC: 1557-0229.

OTS: 1550-0111.

FRB: 7100-0311.

FDIC: 3064-0148.

SEC: 3235-0622.

Number of Respondents: 21.

Estimated Time per Response: 25 hours.

Total Estimated Annual Burden: 525 hours.

Number of Respondents: 5.

Estimated Time per Response: 25 hours.

Total Estimated Annual Burden: 125 hours.

Number of Respondents: 20.

Estimated Time per Response: 25 hours.

Total Estimated Annual Burden: 500 hours.

Number of Respondents: 5.

Estimated Time per Response: 25 hours.

Total Estimated Annual Burden: 125 hours.

Number of Respondents: 5.

Estimated Time per Response: 25 hours.

Total Estimated Annual Burden: 125 hours.

No commenters addressed the Agencies' information collection estimates. The Agencies do not believe that the clarifications included in this Final Statement impact the burden estimates previously developed and approved for these information collections. The Agencies have a continuing interest in the public's opinions of our collections of information. At any time, comments regarding the burden estimate, or any other aspect of this collection of information, including suggestions for reducing the burden, may be sent to:

OCC: You should direct your comments to:

Communications Division, Office of the Comptroller of the Currency, Public Information Room, Mailstop 1-5, Attention: 1557-0229, 250 E Street, SW., Washington, DC 20219. In addition, comments may be sent by fax to (202) 874-4448, or by electronic mail to regs.comments@occ.treas.gov . You can inspect and photocopy the comments at the OCC's Public Information Room, 250 E Street, SW., Washington, DC 20219. You can make an appointment to inspect the comments by calling (202) 874-5043. Additionally, you should send a copy of your comments to OCC Desk Officer, 1557-0229, by mail to U.S. Office of Management and Budget, 725 17th Street, NW., #10235, Washington, DC 20503, or by fax to (202) 395-6974.

You can request additional information or a copy of the collection from Mary Gottlieb, OCC Clearance Officer, or Camille Dickerson, (202) 874-5090, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.

OTS: 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 infocollection.comments@ots.treas.gov . OTS will post comments and the related index on the OTS Internet site at http://www.treas.gov . In addition, interested persons may inspect the comments at the Public Reading Room, 1700 G Street, NW., by appointment. To make an appointment, call (202) 906-5922, send an e-mail to public.info@ots.treas.gov , or send a facsimile transmission to (202) 906-7755.

To obtain a copy of the submission to OMB, contact Marilyn K. Burton at marilyn.burton@ots.treas.gov , (202) 906-6467, or fax number (202) 906-6518, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552

Board: You may submit comments, identified by FR 4022, by any of the following methods:

• Agency Web site: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.

• Federal eRulemaking Portal: http://www.regulations.gov . Follow the instructions for submitting comments.

• E-mail : Regs.comments@federalreserve.gov . Include docket number in the subject line of the message.

• Fax: (202) 452-3819 or (202) 452-3102.

• Mail: Michelle Long, 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.

All public comments are available from the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room MP-500 of the Board's Martin Building (20th and C Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.

FDIC: Interested parties are invited to submit written comments to the FDIC concerning the Paperwork Reduction Act implications of this proposal. Such comments should refer to “Complex Structured Finance Transactions, 3064-0148.” Comments may be submitted by any of the following methods:

• http://www.FDIC.gov/regulations/laws/federal/propose.html.

• E-mail: comments@FDIC.gov. Include Complex Structured Financial Transactions, 3064-0148 in the subject line of the message.

• Mail: Steven F. Hanft (202) 898-3907, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.

• Hand Delivery: Comments may be hand-delivered to the guard station at the rear of the 17th Street Building (located on F Street), on business days between 7 a.m. and 5 p.m.

SEC: You should direct your comments to: Office of Management and Budget, Attention Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Room 10102, New Executive Office Building, Washington, DC 20503, with a copy sent to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090 with reference to File No. S7-08-06.

The Final 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 assets and other types of structured finance transactions serve important business purposes, such as diversifying risks, allocating cash flows, and reducing cost of capital. As a result, structured finance transactions now are an essential part of U.S. and international capital markets. Financial institutions have played and continue to play an active and important role in the development of structured finance products and markets, including the market for the more complex variations of structured finance products.

When a financial institution participates in a complex structured finance transaction (“CSFT”), it bears the usual market, credit, and operational risks associated with the transaction. In some circumstances, a financial institution also may face heightened legal or reputational risks due to its involvement in a CSFT. For example, in some circumstances, a financial institution may face heightened legal or reputational risk if a customer's regulatory, tax or accounting treatment for a CSFT, or disclosures to investors concerning the CSFT in the customer's public filings or financial statements, do not comply with applicable laws, regulations or accounting principles. Indeed, in some instances, CSFTs have been used to misrepresent a customer's financial condition to investors, regulatory authorities and others. In these situations, investors have been harmed, and financial institutions have incurred significant legal and reputational exposure. In addition to legal risk, reputational risk poses a significant threat to financial institutions because the nature of their business requires them to maintain the confidence of customers, creditors and the general marketplace.

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 Securities and Exchange Commission (the “Agencies”) have long expected financial institutions to develop and maintain robust control infrastructures that enable them to identify, evaluate and address the risks associated with their business activities. Financial institutions also must conduct their activities in accordance with applicable statutes and regulations.

The Agencies are issuing this Statement to describe the types of risk management principles that we believe may help a financial institution to identify CSFTs that may pose heightened legal or reputational risks to the institution (“elevated risk CSFTs”) and to evaluate, manage and address these risks within the institution's internal control framework. 12

Structured finance transactions encompass a broad array of products with varying levels of complexity. Most structured finance transactions, such as standard public mortgage-backed securities transactions, public securitizations of retail credit cards, asset-backed commercial paper conduit transactions, and hedging-type transactions involving “plain vanilla” derivatives and collateralized loan obligations, are familiar to participants in the financial markets, and these vehicles have a well-established track record. These transactions typically would not be considered CSFTs for the purpose of this Statement.

Because this Statement focuses on sound practices related to CSFTs that may create heightened legal or reputational risks—transactions that typically are conducted by a limited number of large financial institutions—it will not affect or apply to the vast majority of financial institutions, including most small institutions. As in all cases, a financial institution should tailor its internal controls so that they are appropriate in light of the nature, scope, complexity and risks of its activities. Thus, for example, an institution that is actively involved in structuring and offering CSFTs that may create heightened legal or reputational risk for the institution should have a more formalized and detailed control framework than an institution that participates in these types of transactions less frequently. The internal controls and procedures discussed in this Statement are not all inclusive, and, in appropriate circumstances, an institution may find that other controls, policies, or procedures are appropriate in light of its particular CSFT activities.

Because many of the core elements of an effective control infrastructure are the same regardless of the business line involved, this Statement draws heavily on controls and procedures that the Agencies previously have found to be effective in assisting a financial institution to manage and control risks and identifies ways in which these controls and procedures can be effectively applied to elevated risk CSFTs. Although this Statement highlights some of the most significant risks associated with elevated risk CSFTs, it is not intended to present a full exposition of all risks associated with these transactions. Financial institutions are encouraged to refer to other supervisory guidance prepared by the Agencies for further information concerning market, credit, operational, legal and reputational risks as well as internal audit and other appropriate internal controls.

This Statement does not create any private rights of action, and does not alter or expand the legal duties and obligations that a financial institution may have to a customer, its shareholders or other third parties under applicable law. At the same time, adherence to the principles discussed in this Statement would not necessarily insulate a financial institution from regulatory action or any liability the institution may have to third parties under applicable law.

A financial institution that engages in CSFTs should maintain a set of formal, written, firm-wide policies and procedures that are designed to allow the institution to identify, evaluate, assess, document, and control the full range of credit, market, operational, legal and reputational risks associated with these transactions. These policies may be developed specifically for CSFTs, or included in the set of broader policies governing the institution generally. A financial institution operating in foreign jurisdictions may tailor its policies and procedures as appropriate to account for, and comply with, the applicable laws, regulations and standards of those jurisdictions. 13

A financial institution's policies and procedures should establish a clear framework for the review and approval of individual CSFTs. These policies and procedures should set forth the responsibilities of the personnel involved in the origination, structuring, trading, review, approval, documentation, verification, and execution of CSFTs. Financial institutions may find it helpful to incorporate the review of new CSFTs into their existing new product policies. In this regard, a financial institution should define what constitutes a “new” complex structured finance product and establish a control process for the approval of such new products. In determining whether a CSFT is new, a financial institution may consider a variety of factors, including whether it contains structural or pricing variations from existing products, whether the product is targeted at a new class of customers, whether it is designed to address a new need of customers, whether it raises significant new legal, compliance or regulatory issues, and whether it or the manner in which it would be offered would materially deviate from standard market practices. An institution's policies should require new complex structured finance products to receive the approval of all relevant control areas that are independent of the profit center before the product is offered to customers.

As part of its transaction and new product approval controls, a financial institution should establish and maintain policies, procedures and systems to identify elevated risk CSFTs. Because of the potential risks they present to the institution, transactions or new products identified as elevated risk CSFTs should be subject to heightened reviews during the institution's transaction or new product approval processes. Examples of transactions that an institution may determine warrant this additional scrutiny are those that (either individually or collectively) appear to the institution during the ordinary course of its transaction approval or new product approval process to:

• Lack economic substance or business purpose;

• Be designed or used primarily for questionable accounting, regulatory, or tax objectives, particularly when the transactions are executed at year end or at the end of a reporting period for the customer;

• Raise concerns that the client will report or disclose the transaction in its public filings or financial statements in a manner that is materially misleading or inconsistent with the substance of the transaction or applicable regulatory or accounting requirements;

• Involve circular transfers of risk (either between the financial institution and the customer or between the customer and other related parties) that lack economic substance or business purpose;

• Involve oral or undocumented agreements that, when taken into account, would have a material impact on the regulatory, tax, or accounting treatment of the related transaction, or the client's disclosure obligations;  14

• Have material economic terms that are inconsistent with market norms ( e.g. , deep “in the money” options or historic rate rollovers); or

• Provide the financial institution with compensation that appears substantially disproportionate to the services provided or investment made by the financial institution or to the credit, market or operational risk assumed by the institution.

The examples listed previously are provided for illustrative purposes only, and the policies and procedures established by financial institutions may differ in how they seek to identify elevated risk CSFTs. The goal of each institution's policies and procedures, however, should remain the same—to identify those CSFTs that warrant additional scrutiny in the transaction or new product approval process due to concerns regarding legal or reputational risks.

Financial institutions that structure or market, act as an advisor to a customer regarding, or otherwise play a substantial role in a transaction may have more information concerning the customer's business purpose for the transaction and any special accounting, tax or financial disclosure issues raised by the transaction than institutions that play a more limited role. Thus, the ability of a financial institution to identify the risks associated with an elevated risk CSFT may differ depending on its role.

Having developed a process to identify elevated risk CSFTs, a financial institution should implement policies and procedures to conduct a heightened level of due diligence for these transactions. The financial institution should design these policies and procedures to allow personnel at an appropriate level to understand and evaluate the potential legal or reputational risks presented by the transaction to the institution and to manage and address any heightened legal or reputational risks ultimately found to exist with the transaction.

Due Diligence . If a CSFT is identified as an elevated risk CSFT, the institution should carefully evaluate and take appropriate steps to address the risks presented by the transaction with a particular focus on those issues identified as potentially creating heightened levels of legal or reputational risk for the institution. In general, a financial institution should conduct the level and amount of due diligence for an elevated risk CSFT that is commensurate with the level of risks identified. A financial institution that structures or markets an elevated risk CSFT to a customer, or that acts as an advisor to a customer or investors concerning an elevated risk CSFT, may have additional responsibilities under the federal securities laws, the Internal Revenue Code, state fiduciary laws or other laws or regulations and, thus, may have greater legal and reputational risk exposure with respect to an elevated risk CSFT than a financial institution that acts only as a counterparty for the transaction. Accordingly, a financial institution may need to exercise a higher degree of care in conducting its due diligence when the institution structures or markets an elevated risk CSFT or acts as an advisor concerning such a transaction than when the institution plays a more limited role in the transaction.

To appropriately understand and evaluate the potential legal and reputational risks associated with an elevated risk CSFT that a financial institution has identified, the institution may find it useful or necessary to obtain additional information from the customer or to obtain specialized advice from qualified in-house or outside accounting, tax, legal, or other professionals. As with any transaction, an institution should obtain satisfactory responses to its material questions and concerns prior to consummation of a transaction. 15

In conducting its due diligence for an elevated risk CSFT, a financial institution should independently analyze the potential risks to the institution from both the transaction and the institution's overall relationship with the customer. Institutions should not conclude that a transaction identified as being an elevated risk CSFT involves minimal or manageable risks solely because another financial institution will participate in the transaction or because of the size or sophistication of the customer or counterparty. Moreover, a financial institution should carefully consider whether it would be appropriate to rely on opinions or analyses prepared by or for the customer concerning any significant accounting, tax or legal issues associated with an elevated risk CSFT.

Approval Process . A financial institution's policies and procedures should provide that CSFTs identified as having elevated legal or reputational risk are reviewed and approved by appropriate levels of control and management personnel. The designated approval process for such CSFTs should include representatives from the relevant business line(s) and/or client management, as well as from appropriate control areas that are independent of the business line(s) involved in the transaction. The personnel responsible for approving an elevated risk CSFT on behalf of a financial institution should have sufficient experience, training and stature within the organization to evaluate the legal and reputational risks, as well as the credit, market and operational risks to the institution.

The institution's control framework should have procedures to deliver the necessary or appropriate information to the personnel responsible for reviewing or approving an elevated risk CSFT to allow them to properly perform their duties. Such information may include, for example, the material terms of the transaction, a summary of the institution's relationship with the customer, and a discussion of the significant legal, reputational, credit, market and operational risks presented by the transaction.

Some institutions have established a senior management committee that is designed to involve experienced business executives and senior representatives from all of the relevant control functions within the financial institution (including such groups as independent risk management, tax, accounting, policy, legal, compliance, and financial control) in the oversight and approval of those elevated risk CSFTs that are identified by the institution's personnel as requiring senior management review and approval due to the potential risks associated with the transactions. While this type of management committee may not be appropriate for all financial institutions, a financial institution should establish processes that assist the institution in consistently managing the review and approval of elevated risk CSFTs on a firm-wide basis. 16

If, after evaluating an elevated risk CSFT, the financial institution determines that its participation in the CSFT would create significant legal or reputational risks for the institution, the institution should take appropriate steps to address those risks. Such actions may include declining to participate in the transaction, or conditioning its participation upon the receipt of representations or assurances from the customer that reasonably address the heightened legal or reputational risks presented by the transaction. Any representations or assurances provided by a customer should be obtained before a transaction is executed and be received from, or approved by, an appropriate level of the customer's management. A financial institution should decline to participate in an elevated risk CSFT if, after conducting appropriate due diligence and taking appropriate steps to address the risks from the transaction, the institution determines that the transaction presents unacceptable risk to the institution or would result in a violation of applicable laws, regulations or accounting principles.

Documentation. The documentation that financial institutions use to support CSFTs is often highly customized for individual transactions and negotiated with the customer. Careful generation, collection and retention of documents associated with elevated risk CSFTs are important control mechanisms that may help an institution monitor and manage the legal, reputational, operational, market, and credit risks associated with the transactions. In addition, sound documentation practices may help reduce unwarranted exposure to the financial institution's reputation.

A financial institution should create and collect sufficient documentation to allow the institution to:

• Document the material terms of the transaction;

• Enforce the material obligations of the counterparties;

• Confirm that the institution has provided the customer any disclosures concerning the transaction that the institution is otherwise required to provide; and

• Verify that the institution's policies and procedures are being followed and allow the internal audit function to monitor compliance with those policies and procedures.

When an institution's policies and procedures require an elevated risk CSFT to be submitted for approval to senior management, the institution should maintain the transaction-related documentation provided to senior management as well as other documentation, such as minutes of the relevant senior management committee, that reflect senior management's approval (or disapproval) of the transaction, any conditions imposed by senior management, and the factors considered in taking such action. The institution should retain documents created for elevated risk CSFTs in accordance with its record retention policies and procedures as well as applicable statutes and regulations.

General Business Ethics. The board and senior management of a financial institution also should establish a “tone at the top” through both actions and formalized policies that sends a strong message throughout the financial institution about the importance of compliance with the law and overall good business ethics. The board and senior management should strive to create a firm-wide corporate culture that is sensitive to ethical or legal issues as well as the potential risks to the financial institution that may arise from unethical or illegal behavior. This kind of culture coupled with appropriate procedures should reinforce business-line ownership of risk identification, and encourage personnel to move ethical or legal concerns regarding elevated risk CSFTs to appropriate levels of management. In appropriate circumstances, financial institutions may also need to consider implementing mechanisms to protect personnel by permitting the confidential disclosure of concerns. 17 As in other areas of financial institution management, compensation and incentive plans should be structured, in the context of elevated risk CSFTs, so that they provide personnel with appropriate incentives to have due regard for the legal, ethical and reputational risk interests of the institution.

Reporting. A financial institution's policies and procedures should provide for the appropriate levels of management and the board of directors to receive sufficient information and reports concerning the institution's elevated risk CSFTs to perform their oversight functions.

Monitoring Compliance with Internal Policies and Procedures. The events of recent years evidence the need for an effective oversight and review program for elevated risk CSFTs. A financial institution's program should provide for periodic independent reviews of its CSFT activities to verify and monitor that its policies and controls relating to elevated risk CSFTs are being implemented effectively and that elevated risk CSFTs are accurately identified and received proper approvals. These independent reviews should be performed by appropriately qualified audit, compliance or other personnel in a manner consistent with the institution's overall framework for compliance monitoring, which should include consideration of issues such as the independence of reviewing personnel from the business line. Such monitoring may include more frequent assessments of the risk arising from elevated risk CSFTs, both individually and within the context of the overall customer relationship, and the results of this monitoring should be provided to an appropriate level of management in the financial institution.

Audit . 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. The internal audit department of a financial institution should regularly audit the financial institution's adherence to its own control procedures relating to elevated risk CSFTs, and further assess the adequacy of its policies and procedures related to elevated risk CSFTs. Internal audit should periodically validate that business lines and individual employees are complying with the financial institution's standards for elevated risk CSFTs and appropriately identifying any exceptions. This validation should include transaction testing for elevated risk CSFTs.

Training . An institution should identify relevant personnel who may need specialized training regarding CSFTs to be able to effectively perform their oversight and review responsibilities. Appropriate training on the financial institution's policies and procedures for handling elevated risk CSFTs is critical. Financial institution personnel involved in CSFTs should be familiar with the institution's policies and procedures concerning elevated risk CSFTs, including the processes established by the institution for identification and approval of elevated risk CSFTs and new complex structured finance products and for the elevation of concerns regarding transactions or products to appropriate levels of management. Financial institution personnel involved in CSFTs should be trained to identify and properly handle elevated risk CSFTs that may result in a violation of law.

Structured finance products have become an essential and important part of the U.S. and international capital markets, and financial institutions have played an important role in the development of structured finance markets. In some instances, however, CSFTs have been used to misrepresent a customer's financial condition to investors and others, and financial institutions involved in these transactions have sustained significant legal and reputational harm. In light of the potential legal and reputational risks associated with CSFTs, a financial institution should have effective risk management and internal control systems that are designed to allow the institution to identify elevated risk CSFTs, to evaluate, manage and address the risks arising from such transactions, and to conduct those activities in compliance with applicable law.