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Agricultural Marketing Service, USDA.
Affirmation of interim rule as final rule.
The Department of Agriculture is adopting, as a final rule, without change, an interim rule that extended the one-year suspension of the minimum quality, maturity, pack, marking, and inspection requirements prescribed for russet potato varieties under the Washington potato marketing order for the 2011-2012 and subsequent fiscal periods. The interim rule also extended the reporting requirement for russet potato handlers for the purpose of obtaining information necessary for administering the marketing order. This change is expected to reduce overall industry expenses and increase net returns to producers and handlers while allowing the industry the opportunity to continue exploring alternative marketing strategies.
Effective August 10, 2011.
Teresa Hutchinson or Gary Olson, Northwest Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,
Small businesses may obtain information on complying with this and other marketing order regulations by viewing a guide at the following Web site:
This rule is issued under Marketing Order No. 946, as amended (7 CFR part 946), regulating the handling of Irish potatoes grown in Washington, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”
The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.
The handling of potatoes grown in Washington is regulated by 7 CFR part 946. This rule continues in effect the interim rule that extended the one-year suspension of the order's handling regulation for russet potato varieties for the 2011-2012 and subsequent fiscal periods. This change also extended the reporting requirement for russet potato handlers to obtain information necessary for the collection of assessments and statistical data. This change allows the Washington potato industry to continue marketing russet potatoes without regard to the minimum quality, maturity, pack, marking, and inspection requirements prescribed under the Washington potato marketing order.
In an interim rule published in the
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are 43 handlers of Washington potatoes subject to regulation under the order (inclusive of the 33 russet potato handlers) and approximately 267 producers in the regulated production area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $7,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000.
During the 2009-2010 fiscal period, the Committee reports that 9,765,131 hundredweight of Washington potatoes were shipped into the fresh market. Based on average f.o.b. prices estimated by the USDA's Economic Research Service and Committee data on individual handler shipments, the Committee estimates that 42, or approximately 98 percent of the handlers, had annual receipts of less than $7,000,000.
In addition, based on information provided by the National Agricultural Statistics Service, the average producer price for Washington potatoes for 2010 was $7.55 per hundredweight. The average gross annual producer revenue for each of the 267 Washington potato producers is therefore calculated to be approximately $276,130. In view of the foregoing, the majority of Washington potato producers and handlers may be classified as small entities.
This rule continues in effect the action that extended the one-year suspension of the handling regulation for russet potato varieties for the 2011-2012 and subsequent fiscal periods. This rule also continues in effect the action that extended the reporting requirement for russet potato handlers to obtain information necessary to administer the order. This change is expected to reduce overall industry expenses while providing the industry with the opportunity to continue exploring alternative marketing strategies. This rule amends the
This action is not expected to increase costs associated with the order requirements. Rather, this action represents a cost savings for handlers and has the potential to increase industry returns. This change extends the one-year suspension of minimum quality, maturity, pack, marking, and inspection requirements indefinitely. Though inspections will not be mandated for russet potatoes handled under the order, handlers may at their discretion choose to have their potatoes inspected. Handlers are thus able to control costs—which are generally passed on to producers—based on the demands of their customers. The opportunities and benefits of this rule are equally available to all Washington potato handlers and growers, regardless of their size.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178 (Vegetable and Specialty Crop Marketing Orders). No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.
This change continues the monthly reporting requirement for russet potato handlers. The reports provide the Committee with information necessary to track shipments and collect assessments. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.
Further, the Committee's meeting was widely publicized throughout the Washington potato industry and all interested persons were invited to participate in Committee deliberations. Like all Committee meetings, the January 26, 2011, meeting was a public meeting, and all entities, both large and small, were able to express views on this issue.
Comments on the interim rule were required to be received on or before July 12, 2011. No comments were received. Therefore, for the reasons given in the interim rule, we are adopting the interim rule as a final rule, without change.
To view the interim rule, go to:
This action also affirms information contained in the interim rule concerning Executive Orders 12866 and 12988, the Paperwork Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 101).
After consideration of all relevant material presented, it is found that finalizing the interim rule, without change, as published in the
Marketing agreements, Potatoes, Reporting and recordkeeping requirements.
Accordingly, the interim rule that amended 7 CFR 946.143 and 946.336 and that was published at 76 FR 27850 on May 13, 2011, is adopted as a final rule, without change.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is amending the animal drug regulations to reflect a change of sponsor for three approved new animal drug applications (NADAs) for dosage form products containing moxidectin from Fort Dodge Animal Health, Division of Wyeth, a wholly owned subsidiary of Pfizer, Inc., to Boehringer Ingelheim Vetmedica, Inc.
This rule is effective August 9, 2011.
Steven D. Vaughn, Center for Veterinary Medicine (HFV-100), Food and Drug Administration, 7520 Standish Pl., Rockville, MD 20855, 240-276-8300, e-mail:
Fort Dodge Animal Health, Division of Wyeth, a wholly owned subsidiary of Pfizer, Inc., 235 East 42d St., New York, NY 10017 has informed FDA that it has transferred ownership of, and all rights and interest in, the following three approved NADAs for dosage form products containing moxidectin to Boehringer Ingelheim Vetmedica, Inc., 2621 North Belt Highway, St. Joseph, MO 64506-2002: NADA 141-099, NADA 141-220, and NADA 141-247. Accordingly, the Agency is amending the regulations in 21 CFR parts 520, 522, and 524 to reflect the transfer of ownership.
This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.
Animal drugs.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR parts 520, 522, and 524 are amended as follows:
21 U.S.C. 360b.
(b)
(d)
21 U.S.C. 360b.
(b)
(d)
(e) * * *
(1)
(3)
21 U.S.C. 360b.
(a)
(b)
(e) * * *
(1)
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is amending the special controls for the herpes simplex virus (HSV) serological assay device type, which is classified as class II (special controls). These device types are devices that consist of antigens and antisera used in various serological tests to identify antibodies to herpes simplex virus in serum, and the devices that consist of herpes simplex virus antisera conjugated with a fluorescent dye (immunofluorescent assays) used to identify herpes simplex virus directly from clinical specimens or tissue culture isolates derived from clinical specimens.
This rule is effective September 8, 2011.
Haja Sittana El Mubarak, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg 66, Rm. 5519, Silver Spring, MD 20993-0002, 301-796-6193.
The Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 301
Under section 513 of the FD&C Act, FDA refers to devices that were in commercial distribution before May 28, 1976 (the date of enactment of the 1976 amendments), as preamendments devices. FDA classifies these devices after it takes the following steps: (1) Receives a recommendation from a device classification panel (an FDA advisory committee); (2) publishes the panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) publishes a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.
Devices that were not in commercial distribution before May 28, 1976, generally referred to as postamendments devices are classified automatically by statute (section 513(f) of the FD&C Act) into class III without any FDA rulemaking process. Those devices remain in class III until FDA does the following: (1) Reclassifies the device into class I or II; (2) issues an order classifying the device into class I or II in accordance with section 513(f)(2) of the FD&C Act; or (3) issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a legally marketed device that has been classified into class I or class II. The agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and 21 CFR part 807 of the regulations.
Under the 1976 amendments, class II devices were defined as devices for which there was insufficient information to show that general controls themselves would provide reasonable assurance of safety and effectiveness, but for which there was sufficient information to establish performance standards to provide such assurance. SMDA broadened the definition of class II devices to mean those devices for which the general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but for which there is sufficient information to establish special controls to provide such assurance, including performance standards, postmarket surveillance, patient registries, development and dissemination of guidelines, recommendations, and any other appropriate actions the agency deems necessary (section 513(a)(1)(B) of the FD&C Act).
Elsewhere in this issue of the
As a preamendments device, HSV 1 and 2 serological assays were classified into class III in a final rule in the
The final rule revises the special controls for HSV 1 and 2 serological assays because the new special controls, in addition to general controls, provide reasonable assurance of the safety and effectiveness of the device. FDA believes there is sufficient additional safety and efficacy profile information to justify this revision of the special controls to better provide such assurance. We revised the existing guidance by rewriting the method comparison section and the sample selection inclusion and exclusion criteria section. The revisions defined and differentiated the required studies and the study populations for the assessment of the safety and effectiveness of the different types of HSV1 and HSV2 serological assays. Additionally, we made several corrections and clarifications throughout the document to ensure accuracy, consistency, and ease of reading.
In addition to general controls, FDA believes that the revised guidance document entitled “Class II Special Controls Guidance Document: Herpes Simplex Virus Types 1 and 2 Serological Assays” (the class II special controls guidance document) is a special control that is adequate to address the risks to health associated with the use of the device. FDA believes that the revised class II special controls guidance document, which incorporates voluntary consensus standards and describes labeling recommendations, in addition to general controls, provides reasonable assurance of the safety and effectiveness of the device.
Following the effective date of this final rule, any firm submitting a 510(k) for HSV 1 and 2 serological assays will need to address the issues covered in the special controls guidance. However, the firm need only show that its device meets the recommendations of the guidance or in some other way provides equivalent assurances of safety and effectiveness.
As discussed previously in this document, FDA believes HSV 1 and 2 serological assays should be classified into class II because special controls, in addition to general controls, provide reasonable assurance of the safety and effectiveness of the device and because there is sufficient information to establish special controls to provide such assurance. FDA, therefore, is finalizing the establishment of the revised class II special controls guidance document as a special control for the device.
Section 510(m) of the FD&C Act provides that a class II device may be exempt from the premarket notification requirements under section 510(k) of the FD&C Act, if the agency determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this device, FDA believes that premarket notification is necessary to provide reasonable assurance of safety and effectiveness and, therefore, is not exempting the device from the premarket notification requirements.
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
FDA has examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this final rule is not a significant regulatory action under Executive Order 12866.
The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the changes to the guidance are minimal, the Agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.
Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $136 million, using the most current (2010) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.
The changes to the guidance include adding specific recommendations on appropriate comparators for tests for antibodies and antigens, as well as recommendations for sample selection inclusion and exclusion criteria to define the target populations for HSV 1 and HSV 2 serological assays. These recommended changes increase the usefulness of the guidance while imposing a minimal burden.
FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. Section 4(a) of the Executive order requires agencies to “construe * * * a Federal statute to preempt State law only where the statute contains an express preemption provision or there is some other clear evidence that the Congress intended preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute.” Federal law includes an express preemption provision that preempts certain state requirements “different from or in addition to” certain Federal requirements applicable to devices. 21 U.S.C. 360k; See
This final rule contains no new collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520) is not required. This final rule establishes as special controls a guidance document that refers to currently approved collections of information found in other FDA regulations. These collections of information are subject to review by OMB under the PRA. The analysis of the paperwork burden for the guidance document is included in its notice of availability.
Biologics, Laboratory, Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 371.
(b)
Coast Guard, DHS.
Notice of temporary deviation from regulations.
The Commander, First Coast Guard District, has issued a temporary deviation from the regulation governing the operation of the Loop Parkway Bridge, mile 0.7, across Long Creek, and the Captree State Parkway (Robert Moses Causeway) Bridge, mile 30.7, across the State Boat Channel, at Long Island, New York. This deviation is necessary to facilitate the 2011 March of Dimes Motorcycle Run. The deviation allows the two bridges listed above to remain in the closed position during this public event.
This deviation is effective from 10:51 a.m. through 1:49 p.m. on September 25, 2011.
Documents mentioned in this preamble as being available in the docket are part of docket USCG-2011-0759 and are available online at
If you have questions on this rule, call or e-mail Ms. Judy Leung-Yee, Project Officer, First Coast Guard District, telephone (212) 668-7165,
The Loop Parkway Bridge, mile 0.7, across Long Creek has a vertical clearance in the closed position of 21 feet at mean high water and 25 feet at mean low water. The existing drawbridge operation regulations are listed at 33 CFR 117.799(f).
The Captree State Parkway (Robert Moses Causeway) Bridge, mile 30.7, across the State Boat Channel has a vertical clearance in the closed position of 29 feet at mean high water and 31 feet at mean low water. The existing drawbridge operation regulations are listed at 33 CFR 117.799(i).
Long Creek and the State Boat Channel both are both transited by commercial fishing and recreational vessel traffic.
The owner of the two bridges, the State New York Department of Transportation, requested bridge closures to facilitate a public event, the March of Dimes Charity Motorcycle Run.
Under this temporary deviation the Loop Parkway Bridge may remain in the closed position from 10:51 a.m. through 11:49 a.m. and from 12:21 p.m. through 1:49 p.m. on September 25, 2011, and the Captree State Parkway Bridge (Robert Moses Causeway) may remain in the closed position from 11 a.m. through 1 p.m. on September 25, 2011, to facilitate a public event, the 2011 March of Dimes Motorcycle Run.
Vessels that can pass under the closed draws during each respective closure may do so at any time.
In accordance with 33 CFR 117.35(e), the bridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the Navy Pier Southeast Safety Zone in Chicago Harbor from September 3, 2011 through September 24, 2011. This action is necessary and intended to ensure safety of life on the navigable waters of the United States immediately prior to, during, and immediately after fireworks events. During the aforementioned period, restrictions will be enforced upon, and control movement of, vessels in a specified area immediately prior to, during, and immediately after fireworks events. During the enforcement period, no person or vessel may enter the safety zones without permission of the Captain of the Port, Sector Lake Michigan.
The regulations in 33 CFR 165.931 will be enforced at various times and on various dates between 10 p.m. on September 3, 2011 to 10:30 p.m. on September 24, 2011.
If you have questions on this notice, call or e-mail BM1 Adam Kraft, Prevention Department, Coast Guard Sector Lake Michigan, Milwaukee, WI at 414-747-7154, e-mail
The Coast Guard will enforce the Safety Zone; Chicago Harbor, Navy Pier Southeast, Chicago, IL listed in 33 CFR 165.931 for the following events:
(1)
All vessels must obtain permission from the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative to enter, move within or exit the safety zone. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.
This notice is issued under authority of 33 CFR 165.931 and 5 U.S.C. 552 (a). In addition to this notice in the
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing four temporary safety zones for marine events within the Coast Guard Captain of the Port (COTP) New York Zone for fireworks displays and swim events. This action is necessary to provide for the safety of life on navigable waters during the events. Entry into, transit through, mooring or anchoring within these zones is prohibited unless authorized by the COTP New York.
This rule is effective in the CFR on August 9, 2011 to 11:59 p.m. August 27, 2011. This rule is effective with actual notice for purpose of enforcement beginning at 12 p.m. August 6, 2011 to 11:59 p.m. August 27, 2011.
Documents indicated in this preamble as being available in the docket are part of docket USCG-2011-0688 and are available online by going to
If you have questions on this temporary rule, call or e-mail LT Eunice James, Coast Guard Sector New York Waterways Management Division; 718-354-4163, e-mail
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because any delay encountered in this regulation's effective date by publishing a NPRM would be contrary to public interest, since immediate action is needed to provide for the safety of life and property on navigable waters from the hazards associated with fireworks including unexpected detonation and burning debris; also immediate action is needed to provide for the safety of life and property on navigable waters from the hazards associated with swimmers in the water in or near navigable channels. We spoke with each event sponsor and each indicated they were unable and unwilling to move their event date to a later time. Sponsors for the Ocean Breeze Fishing Pier Fireworks Display stated they are unwilling to reschedule this event because it is being held in conjunction with a prescheduled concert sponsored by the Staten Island Borough President's Office. Changing the date would cause numerous cancelations and hurt small businesses. Rescheduling would not be
Additionally, due to the dangers posed by the pyrotechnics used in fireworks displays and the hazards associated with swim events, the safety zones are necessary to provide for the safety of event participants, spectator crafts, and other vessels operating near the event areas. For the safety concerns noted, it is in the public interest to have this regulation in effect during these events.
These fireworks displays and swim events are all reoccurring marine events with a proposed permanent rule currently in a public comment period under docket number USCG-2010-1001 titled, Special Local Regulations and Safety Zones; Recurring Events in Captain of the Port New York Zone. Additionally, the Coast Guard has ordered safety zones or special local regulations for all of these areas for past events and has not received public comments or concerns regarding establishment of waterways restrictions.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The legal basis for the temporary rule is 33 U.S.C. 1226, 1231, 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; Public Law 107-295, 116 Stat. 2064; and Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to define safety zones.
The fireworks display and swim events are being held during the month of August on the navigable waters within the COTP New York Zone. In the past, the Coast Guard has established safety zones for these events on a case by case basis to ensure the protection of the maritime public and event participants from the hazards associated with these events. The Coast Guard has not received public comments or concerns regarding the impact to waterway traffic from these events.
This temporary final rule will apprise the public in a timely manner through publication in the
These events pose significant risk to participants, spectators and the maritime public because of hazardous conditions associated with fireworks displays and swim events. These temporary safety zones are necessary to ensure the safety of participants, spectators and vessels.
This rule establishes temporary safety zones on the waters of the COTP New York zone. These temporary safety zones will encompass various locations, listed in Table 1 and Table 2 below.
All persons and vessels shall comply with the instructions of the COTP New York or the designated on-scene representative. Entry into, transiting, or anchoring within the temporary safety zones are prohibited unless authorized by the COTP New York, or the designated representative. The COTP New York or the designated representative may be reached on VHF Channel 16.
Because large numbers of spectator vessels are expected to congregate around the location of these events, the regulated areas are needed to protect both spectators and participants from the safety hazards created by fireworks displays and swimmers in the water. During the enforcement period of the regulated areas, persons and vessels are prohibited from entering, transiting through, remaining, anchoring or mooring within the zone unless specifically authorized by the COTP or the designated representatives. The Coast Guard may be assisted by other federal, state and local agencies in the enforcement of these regulated areas.
The Coast Guard determined that these regulated areas will not have a significant impact on vessel traffic due to their temporary nature and limited size and the fact that vessels are allowed to transit the navigable waters outside of the regulated areas. Additionally, the Coast Guard has ordered safety zones for all of these four areas for past events and has not received public comments or concerns regarding the impact to waterway traffic from events.
Advanced public notifications will also be made to the local maritime community by the Local Notice to Mariners as well as Broadcast Notice to Mariners.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, as supplemented by Executive Order 13563, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.
The Coast Guard's implementation of these temporary safety zones will be of short duration and designed to minimize the impact to vessel traffic on the navigable waters. These safety zones will only be enforced for a short duration. Furthermore, vessels may be authorized to transit the zones with permission of the COTP New York or the designated on-scene representative.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
This rule will affect the following entities, some of which may be small entities: the owners and operators of vessels intending to transit or anchor in a portion of the navigable waterway in the vicinity of these marine events during the effective period.
This rule will not have a significant economic impact on a substantial number of small entities for the following reasons: Vessel traffic can
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-reg-fair (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves the establishment of temporary safety zones. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR Part 165 as follows:
33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; Public Law 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(1)
(2)
(3)
(c) Vessel operators desiring to enter or operate within the regulated areas shall contact the COTP or the designated representative via VHF channel 16 or 718-354-4353 (Sector New York command center) to obtain permission to do so.
(d) Spectators or other vessels shall not anchor, block, loiter, or impede the transit of event participants or official patrol vessels in the regulated areas during the effective dates and times, or dates and times as modified through the Local Notice to Mariners, unless authorized by COTP or designated on-scene representative.
(e) Upon being hailed by a U.S. Coast Guard vessel or the designated representative, by siren, radio, flashing light or other means, the operator of the vessel shall proceed as directed. Failure to comply with a lawful direction may result in expulsion from the area, citation for failure to comply, or both.
(f) The COTP or the designated representative may delay or terminate any marine event in this subpart at any time it is deemed necessary to ensure the safety of life or property.
(g) The regulated area for all fireworks displays listed in Table 1 is that area of navigable waters within a 360 yard radius of the launch platform or launch site for each fireworks display, unless otherwise noted in Table 1 or modified in USCG First District Local Notice to Mariners at:
(h) Fireworks barges used in these locations will also have a sign on their port and starboard side labeled “Fireworks—Stay Away”. This sign will consist of 10 inch high by 1.5 inch wide red lettering on a white background. Shore sites used in these locations will display a sign labeled “Fireworks—Stay Away” with the same dimensions.
Postal Service
Final rule.
The Postal Service announces the issuance of DMM 300, dated July 5, 2011, of the
Lizbeth Dobbins (202) 268-3789.
The most recent Issue 300 of the
Changes to mailing standards will continue to be published through
Administrative practice and procedure, Incorporation by reference.
In view of the considerations discussed above, the Postal Service hereby amends 39 CFR Part 111 as follows:
5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.
(f) * * *
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), determine endangered status for the Cumberland darter (
This rule becomes effective September 8, 2011.
This final rule is available on the Internet at
For information regarding the Cumberland darter, contact Lee Andrews, Field Supervisor, U.S. Fish and Wildlife Service, Kentucky Ecological Services Field Office, J.C. Watts Federal Building, 330 W. Broadway Rm. 265, Frankfort, KY 40601; telephone 502-695-0468; facsimile 502-695-1024.
For information regarding the rush darter, contact Stephen Ricks, Field Supervisor, U.S. Fish and Wildlife Service, Mississippi Ecological Services Field Office, 6578 Dogwood View Parkway, Suite A, Jackson, MS 39213; telephone 601-965-4900; facsimile 601-965-4340 or Bill Pearson, Field Supervisor, U.S. Fish and Wildlife Service, Alabama Ecological Services Field Office, 1208-B Main Street, Daphne, AL 36526; telephone 251-441-5181; fax 251-441-6222.
For information regarding the yellowcheek darter, contact Jim Boggs, Field Supervisor, U.S. Fish and Wildlife Service, Arkansas Ecological Services Field Office, 110 South Amity Road, Suite 300, Conway, AR 72032; telephone 501-513-4470; facsimile 501-513-4480.
For information regarding the chucky madtom and laurel dace, contact Mary Jennings, Field Supervisor, U.S. Fish and Wildlife Service, Tennessee Ecological Services Field Office, 446 Neal Street, Cookeville, TN 38501; telephone 931-528-6481; facsimile 931-528-7075.
If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800-877-8339.
This document consists of a final rule to list the Cumberland darter (
Through the Federal rulemaking process, we add species that meet these definitions to the List of Endangered and Threatened Wildlife at 50 CFR 17.11 or the List of Endangered and Threatened Plants at 50 CFR 17.12. As part of this program, we maintain a list of species that we regard as candidates for listing. We call this list the Candidate Notice of Review (CNOR). A candidate species is one for which we have on file sufficient information on biological vulnerability and threats to support a proposal to list as endangered or threatened, but for which preparation and publication of a proposal is precluded by higher priority listing actions. We may identify a species as a candidate for listing based on an evaluation of its status that we conducted on our own initiative, or as a result of making a finding on a petition to list a species that listing is warranted but precluded by other higher priority listing action. Table 1 includes the citation information for the CNORs mentioned in the following paragraphs, which discuss the previous candidate status of each of the five species being listed as endangered in this rule.
The Cumberland darter was first identified as a candidate for listing in the 1985 CNOR. It was assigned a Category 2 status, which was given to those species for which the Service possessed information indicating that proposing to list as endangered or threatened was possibly appropriate, but for which conclusive data on biological vulnerability and threat was not currently available to support proposed rules. The Cumberland darter retained the Category 2 status in the 1989, 1991, and 1994 CNORs.
Assigning categories to candidate species was discontinued in 1996, and only species for which the Service had sufficient information on biological vulnerability and threats to support issuance of a proposed rule were regarded as candidate species. Candidate species were also assigned listing priority numbers based on immediacy and the magnitude of threat, as well as their taxonomic status. In the 1999, 2001, 2002, and 2004 CNORs, the Cumberland darter was identified as a
In the 2006 CNOR, we changed the listing priority number for Cumberland darter from 6 to 5, because it was formally described as a distinct species. Based on new molecular evidence, the subspecies
We first identified the rush darter as a candidate for listing in the 2002 CNOR. The rush darter was assigned a listing priority number of 5. In the 2004 CNOR, the rush darter retained a listing priority number of 5. We published a petition finding for rush darter in the 2005 CNOR in response to a petition received on May 11, 2004, stating the darter would retain a listing priority of 5.
In 2006, we changed the listing priority number of the rush darter from 5 to 2 based on the imminent threat of water quality deterioration (i.e., increased sedimentation due to urbanization, road maintenance, and silviculture practices). In the 2007, 2008, 2009, and 2010 CNORs, the rush darter retained a listing priority of 2. We proposed to list the rush darter as endangered on June 24, 2010 (75 FR 36035).
We first identified the yellowcheek darter as a candidate for listing in the 2001 CNOR with a listing priority of 2. The yellowcheek darter retained a listing priority number of 2 in the 2002 and 2004 CNORs. We published a petition finding for yellowcheek darter in the 2005 CNOR in response to a petition received on May 11, 2004, stating the darter would retain a listing priority of 2.
In the 2006, 2007, 2008, 2009, and 2010 CNORs, the yellowcheek darter retained a listing priority of 2. The yellowcheek darter is covered by a 2007 programmatic Candidate Conservation Agreement with Assurances (71 FR 53129) that covers the entire range of the species. We proposed to list the yellowcheek darter as endangered on June 24, 2010 (75 FR 36035).
We first identified the chucky madtom as a candidate for listing in the 1994 CNOR with a Category 2 status. In the 2002 and 2004 CNORs, the chucky madtom was identified as a listing priority 2 candidate species. We published a petition finding for chucky madtom in the 2005 CNOR in response to a petition received on May 11, 2004, stating the madtom would retain a listing priority of 2. In the 2006, 2007, 2008, 2009, and 2010 CNORs, the chucky madtom retained a listing priority of 2.
In 1994, the chucky madtom was first added to the candidate list as
We first identified the laurel dace as a new candidate for listing in the 2007 CNOR. New candidates are those taxa for which we have sufficient information on biological vulnerability and threats to support preparation of a listing proposal, but for which development of a listing regulation is precluded by other higher priority listing activities.
In the 2007 CNOR, we assigned the laurel dace a listing priority of 5. The laurel dace retained a listing priority of 5 in the 2008, 2009, and 2010 CNORs. We proposed to list the laurel dace as endangered on June 24, 2010 (75 FR 36035).
The Cumberland darter (
The Cumberland darter was first described as
The Cumberland darter inhabits pools or shallow runs of low- to moderate-gradient sections of streams with stable sand, silt, or sand-covered bedrock substrates (O'Bara 1988, pp. 10-11; O'Bara 1991, p. 10; Thomas 2007, p. 4). Thomas (2007, p. 4) did not encounter the species in high-gradient sections of streams or areas dominated by cobble or boulder substrates. Thomas (2007, p. 4) reported that streams inhabited by Cumberland darters were second to fourth order, with widths ranging from 4 to 9 meters (m) (11 to 30 feet (ft)) and depths ranging from 20 to 76 cm (8 to 30 in).
Little is known regarding the reproductive habits of the Cumberland darter. Thomas (2007, p. 4) reported the collection of males in breeding condition in April and May, with water temperatures ranging from 15 to 18 degrees Celsius (°C) (59 to 64 degrees Fahrenheit (°F)). Extensive searches by Thomas (2007, p. 4) produced no evidence of nests or eggs at these sites. Species commonly associated with the Cumberland darter during surveys by Thomas (2007, pp. 4-5) were creek chub (
The Cumberland darter is endemic to the upper Cumberland River system
Thomas (2007, p. 3) provided the most recent information on status and distribution of the species through completion of a range-wide status assessment in the upper Cumberland River drainage in Kentucky. Between June 2005 and April 2007, a total of 47 sites were sampled qualitatively in the upper Cumberland River drainage. All Kentucky sites with historic records were surveyed (20 sites), as well as 27 others having potentially suitable habitat. Surveys by Thomas (2007, p. 3) produced a total of 51 specimens from 13 localities (12 streams). Only one of the localities represented a new occurrence record for the species.
In 2008, the Kentucky Department of Fish and Wildlife Resources (KDFWR) initiated a propagation and reintroduction project for the Cumberland darter in the upper Cumberland River drainage (Thomas
Currently, the Cumberland darter is known from 15 localities in a total of 13 streams in Kentucky (McCreary and Whitley Counties) and Tennessee (Campbell and Scott Counties). All 15 extant occurrences of the Cumberland darter are restricted to short stream reaches, with the majority believed to be restricted to less than 1.6 kilometers (km) (1 mile (mi)) of stream (O'Bara 1991, pp. 9-10; Thomas 2007, p. 3). These occurrences are thought to form six population clusters (Bunches Creek, Indian Creek, Marsh Creek, Jellico Creek, Clear Fork, and Youngs Creek), which are geographically separated from one another by an average distance of 30.5 stream km (19 stream mi) (O'Bara 1988, p. 12; O'Bara 1991, p. 10; Thomas 2007, p. 3). Based on collection efforts by O'Bara (1991, pp. 9-10), Laudermilk and Cicerello (1998; pp. 83-233, 303-408), and Thomas (2007, p. 3), the species appears to be extirpated from 11 historical collection sites and a total of 9 streams: Cumberland River mainstem, near the mouth of Bunches Creek and Cumberland Falls (Whitley County); Sanders Creek (Whitley County); Brier Creek (Whitley County); Kilburn Fork of Indian Creek (McCreary County); Bridge Fork (McCreary County); Marsh Creek, near mouth of Big Branch and Caddell Branch (McCreary County); Cal Creek (McCreary County); Little Wolf Creek (Whitley County); and Gum Fork (Scott County). No population estimates or status trends are available for the Cumberland darter; however, survey results by Thomas (2007, p. 3) suggest that the species is uncommon or occurs in low densities across its range (Thomas 2007, p. 3).
The Cumberland darter is ranked by the Kentucky State Nature Preserves Commission (KSNPC) (2009, p. 38) and the Tennessee Department of Environment and Conservation (TDEC) (2009, p. 53) as a G1G2S1 species: critically imperiled or imperiled globally and critically imperiled in Kentucky and Tennessee. The KDFWR State Wildlife Action Plan identified the Cumberland darter as a species of Greatest Conservation Need (GCN) and identified several top conservation actions for it and other species in its Aquatic Guild (Upland Headwater Streams in Pools), including: Acquisition or conservation easements for critical habitat, development of financial incentives to protect riparian (land adjacent to stream channel) corridors, development and implementation of best management practices, and restoration of degraded habitats through various State and Federal programs (KDFWR 2005, p. 2.2.2). The Cumberland darter is designated as a Tier 1 GCN species in the Tennessee Comprehensive Wildlife Conservation Strategy (CWCS) (TWRA 2005, pp. 44, 49).
The rush darter (
Rush darters have been collected from various habitats (Stiles and Mills 2008, pp. 1-4; Bart 2002, p. 1; Johnston and Kleiner 2001, pp. 3-4; Stiles and Blanchard 2001, pp. 1-4; Bart and Taylor 1999, p. 32), including root masses of emergent vegetation along the margins of spring-fed streams in very shallow, clear, cool, and flowing water; and from both small clumps and dense stands of bur reed (
Stiles and Mills (2008, p. 2) found gravid rush darter females in February and fry (newly hatched larval fish) in late April from a wetland pool in the Mill Creek watershed (Winston County, Alabama). These pools act as nursery areas for the fry (Stiles and Mills 2008, p. 5). While little is known specifically about the life history of the rush darter, this information is available for the goldstripe darter, a related species in the
The rush darter currently has a restricted distribution (Johnston and Kleiner 2001, p. 1). All rush darter populations are located above the Fall Line (the inland boundary of the Coastal Plain physiographic region) and in other “highland regions” where topography and elevation changes are observed presenting a barrier for fish movement (Boshung and Mayden 2004, p. 18) in the Black Warrior River drainage in portions of the Appalachian Plateau and Valley and Ridge physiographic provinces of Alabama (Boshung and Mayden 2004, pp. 16-17; Warren
Historically, rush darters have been found in three distinct watersheds in Alabama: Doe Branch, Wildcat Branch, and Mill Creek of the Clear Creek drainage in Winston County; an unnamed spring run of Beaver Creek and Penny Springs of the Turkey Creek drainage in Jefferson County; and Cove Spring (Little Cove Creek system) and Bristow Creek of the Locust Fork drainage in Etowah County. Fluker
Currently, the three rush darter populations occur in the same watersheds but in a more limited distribution. One population is located in Wildcat Branch and Mill Creek in the Clear Creek drainage in Winston County (Johnston and Kleiner 2001, p. 4; Stiles and Mills 2008, pp. 1-3); the second is located in an unnamed spring run to Beaver Creek, portions of Beaver Creek, and an unnamed tributary to Turkey Creek in the Turkey Creek drainage in Jefferson County (Stiles and Blanchard 2001, p. 2; Drennen pers. obsv. 2006-2010; Kuhajda pers. comm. 2009); and the third is in the Little Cove Creek drainage (Bart and Taylor 1999, p. 28; Bart 2002, p. 7; Kuhajda pers. comm. 2008-2009; Spadgenski pers. comm. 2008-2009).
Rush darter populations are separated from each other geographically, and individual rush darters are only sporadically collected at a particular site within their range. Where it occurs, the rush darter is apparently an uncommon species that is usually collected in low numbers (compiled from Bart and Taylor 1999, pp. 31-32; Johnston and Kleiner 2001, pp. 2-4; Stiles and Blanchard 2001, pp. 1-4; Johnston 2003, pp. 1-3; Stiles and Mills 2008, pp. 1-3; Rakes pers. comm. 2010; Drennen pers. obsv. 2006-2010; Kuhajda pers. comm. 2009); however, there are no population estimates at this time.
Cumulatively, the rush darter is only known from localized collection sites within approximately 14.5 km (9 mi) of streams in the Clear Creek; Little Cove and Bristow Creek; and Turkey Creek drainages in Winston, Etowah, and Jefferson Counties, respectively. Currently, about 3 km (2 mi) of stream, or about 22 percent of the rush darter's known range, is not occupied.
Within the Clear Creek drainage, the rush darter has been collected in Wildcat Branch, Mill Creek, and Doe Creek, which represents about 13 km (9 mi) of stream or about 89 percent of the species' total cumulative range. Recent surveys (Stiles and Mills 2008, pp. 1-4; Johnston and Kleiner 2001, p. 3) have failed to document the absence of the rush darter in Doe Creek, indicating a potential reduction of the species' known range within the Clear Creek drainage by about 3 km (2 mi) of stream or 22 percent. However, rush darters were collected in 2005, 2008, and 2009 in the Little Cove Creek drainage (Cove Spring run), after a 30 year period of not finding the species. This rediscovery of the species confirms the continued existence of the species in Etowah County and Cove Spring. However, the Little Cove Creek drainage constitutes an increase of only 0.05 km (0.02 mi) of occupied stream habitat or a 0.22 percent addition to the total range of the species. No collections of the species have occurred at Bristow Creek since 1997. Bristow Creek has since been channelized (straightened and deepened to increase water velocity). In the Turkey Creek drainage, rush darters have been collected sporadically within Penny Springs and at the type locality for the species (an unnamed spring run in Jefferson County, Alabama) (Bart and Taylor 1999, pp. 28, 33). However, the rush darter is likely extirpated from Penny and Tapawingo Springs due to introductions of the watercress darter (
The rush darter is ranked by the Alabama Department of Conservation and Natural Resources (ADCNR) (Wildlife and Freshwater Fisheries Division, ADCNR 2005) as a P1G1S1 species signifying its rarity in Alabama and its status as critically imperiled globally. It is also considered a species of GCN by the State (Bart 2004, p. 193). The rush darter has a High Priority Conservation Actions Needed and Key Partnership Opportunities ranking of “CA 6,” the highest of any fish species listed. The State Wildlife Action Plan states that the species consists of disjoint populations and information is needed to determine genetic structuring within the populations (Wildlife and Freshwater Fisheries Division, ADCNR 2005). Conservation Actions for the species may require population augmentation or reintroduction of the
The yellowcheek darter (
First collected in 1959 from the Devils Fork Little Red River, Cleburne County, Arkansas, this species was eventually described by Raney and Suttkus in 1964, using 228 specimens from the Middle, South, and Devils Forks of the Little Red River (Devils Fork, Turkey Fork, and Beech Fork represent one stream with three different names and are subsequently referred to in this rule as “Devils Fork”). Wood (1996, p. 305) verified the taxonomic status of the yellowcheek darter within the subgenus
The yellowcheek darter inhabits high-gradient headwater tributaries with clear water; permanent flow; moderate to strong riffles; and gravel, rubble, and boulder substrates (Robison and Buchanan 1988, p. 429). Yellowcheek darter prey items include aquatic fly larvae, stonefly larvae, mayfly nymphs, and caddisfly larvae (McDaniel 1984, p. 56).
Male and female yellowcheek darters reach sexual maturity at 1 year of age, and maximum lifespan is around 5 years (McDaniel 1984, pp. 25, 76). Spawning occurs from late May through June in the swift to moderately swift portions of riffles, often around or under the largest substrate particles (McDaniel 1984, p. 82), although brooding females have been found at the head of riffles in smaller gravel substrate (Wine
The yellowcheek darter is endemic to the Devils, Middle, South, and Archey Forks of the Little Red River and mainstem Little Red River in Cleburne, Searcy, Stone, and Van Buren Counties, Arkansas (Robison and Buchanan 1988, p. 429). In 1962, the construction of a dam on the Little Red River to create Greers Ferry Reservoir impounded much of the range of this species, including the lower reaches of Devils Fork, Middle Fork, South Fork, and portions of the mainstem Little Red River, thus extirpating the species from these reaches. Yellowcheek darter was also extirpated from the Little Red River downstream of Greers Ferry Reservoir due to cold tailwater releases. The lake flooded optimal habitat for the species, and caused the genetic isolation of populations (McDaniel 1984, p. 1). The yellowcheek darter was known to historically occur in portions of these streams that maintained permanent year-round flows.
In the 1978-1981 study by Robison and Harp (1981, pp. 15-16), yellowcheek darter occurred in greatest numbers in the Middle and South Forks of the Little Red River, with populations estimated at 36,000 and 13,500 individuals, respectively, while populations in both Devils Fork and Archey Fork were estimated at approximately 10,000 individuals (Robison and Harp 1981, pp. 5-11). During this study, the four forks of the Little Red River supported an estimated yellowcheek darter population of 60,000 individuals, and the species was considered the most abundant riffle fish present (Robison and Harp 1981, p. 14). Extensive sampling of the first two tributaries of the Little Red River below Greers Ferry Dam (both named Big Creek) failed to find any yellowcheek darters, and no darters were found in immediately adjacent watersheds (Robison and Harp 1981, p. 5).
Two subsequent studies have failed to observe yellowcheek darters in the Turkey Fork reach of the Devils Fork Little Red River (Wine
While collecting specimens for the 1999 genetic study, ASU researchers discovered that the yellowcheek darter was no longer the most abundant riffle fish and was more difficult to find throughout its historical range (Wine
Weston and Johnson (2005, p. 22) estimated yellowcheek darter populations within the Middle Fork to be between 15,000 and 40,000 individuals, and between 13,000 and 17,000 individuals in the South Fork. Such increases since the 2000 status survey would indicate remarkable adaptability to changing environmental conditions. However, it should be noted that estimates were based upon mark/recapture estimates using the Jolly-Seber method, which requires high numbers of recaptured specimens for accurate estimations. Recaptures were extremely low during that study; therefore, population estimates were highly variable and confidence in the resulting estimates is low.
The yellowcheek darter is ranked by the Arkansas Natural Heritage Commission (ANHC) (2007, pp. 2-118) as an S1G1 species: extremely rare in Arkansas, and critically imperiled globally. The Arkansas Game and Fish Commission's (AGFC) Wildlife Action Plan describes the yellowcheek darter as a critically imperiled species with declining populations (AGFC 2005, pp. 452-454).
The chucky madtom (
The chucky madtom is a rare catfish known from only 15 specimens collected from two Tennessee streams. A lone individual was collected in 1940 from Dunn Creek (a Little Pigeon River tributary) in Sevier County, and 14 specimens have been encountered since 1991 in Little Chucky Creek (a Nolichucky River tributary) in Greene County, Tennessee. Only 3 chucky madtom individuals have been encountered since 2000; 1 in 2000 (Lang
Originally, museum specimens collected from the Roaring River in Tennessee (Cumberland River drainage) and from Piney Creek, West Fork Flint River, and the Paint Rock River system in Alabama (Tennessee River drainage) were first identified and catalogued as
All of the specimens collected in Little Chucky Creek have been found in stream runs with slow to moderate current over pea gravel, cobble, or slab-rock substrates (Burr and Eisenhour 1994, p. 2). Habitat of these types is sparse in Little Chucky Creek, and the stream affords little loose, rocky cover suitable for madtoms (Shute
No studies to determine the life history and behavior of this species have been conducted. While nothing is known specifically about chucky madtom reproductive biology, recruitment, growth and longevity, food habits, or mobility, this information is available for other similar members of the
Both smoky and elegant madtoms (
Conservation Fisheries, Inc. had one male chucky madtom in captivity from 2004 through 2008. However, based on information from other members of this genus for which longevity data are available, least and smoky madtoms, it is unlikely that chucky madtoms can survive this long in the wild. The shorter lived of these, least madtom, reached a maximum age of 18 months, though most individuals lived little more than 12 months, dying soon after reproducing (Mayden and Walsh 1984, p. 351). Based on length-frequency distributions, smoky madtoms exhibited a lifespan of 2 years, with two cohorts present in a given year (Dinkins and Shute 1996, p. 53). Collection of two age classes together provided evidence that life expectancy exceeds 1 year in the pygmy madtom (
Chucky madtom prey items are unknown; however, least madtom prey items include midge larvae, caddisfly larvae, stonefly larvae, and mayfly nymphs (Mayden and Walsh 1984, p. 339). In smoky madtoms, mayfly nymphs comprised 70.7 percent of stomach contents analyzed; fly, mosquitoe, midge, and gnat larvae 2.4 percent; caddisfly larvae 4.4 percent; and stonefly larvae 1.0 percent (Dinkins and Shute 1996, p. 61). Significant daytime feeding was observed in smoky madtoms.
Dinkins and Shute (1996, p. 50) found smoky madtoms underneath slabrocks in swift to moderate current during May to early November. Habitat use shifted to shallow pools over the course of a 1-week period, coinciding with a drop in water temperature to 7 or 8 °C (45 to 46 °F), and persisted from early November to May. Eisenhour
The current range of the chucky madtom is believed to be restricted to an approximately 3-km (1.8-mi) reach of Little Chucky Creek in Greene County, Tennessee. Because this species was also collected from Dunn Creek, a stream that is in a different watershed and physiographic province than Little Chucky Creek, it is likely that the historic range of the chucky madtom encompassed a wider area in the Ridge and Valley and the Blue Ridge physiographic provinces in Tennessee than is demonstrated by its current distribution. A survey for the chucky madtom in Dunn Creek in 1996 was not successful at locating the species (Shute
The chucky madtom is ranked by the TDEC (2009, p. 58) as an S1G1 species: extremely rare in Tennessee, and critically imperiled globally. The chucky madtom is designated as a Tier 1 GCN species in the Tennessee CWCS (TWRA 2005, pp. 44, 49).
The laurel dace (
Nuptial males often acquire brilliant coloration during the breeding season, as the two lateral stripes, breast, and underside of head turn intensely black and the entire ventral (lower/abdominal) portion of the body, contiguous with the lower black stripe and black breast, becomes an intense scarlet color. All of the fins acquire a yellow color, which is most intense in the paired fins and less intense in the dorsal, anal, and caudal fins. Females also develop most of these colors, though of lesser intensity (Skelton 2001, p. 121). Broadly rounded pectoral fins of males are easily discerned from the broadly pointed fins of females at any time during the year.
Laurel dace have been most often collected from pools or slow runs from undercut banks or beneath slab boulders, typically in first or second order, clear, cool (maximum temperature 26 °C or 78.8 °F) streams. Substrates in streams where laurel dace are found typically consist of a mixture of cobble, rubble, and boulders, and the streams tend to have a dense riparian zone consisting largely of mountain laurel (Skelton 2001, pp. 125-126).
Skelton (2001, p. 126) reported having collected nuptial individuals from late March until mid-June, though Call (pers. obs. 2004) observed males in waning nuptial color during surveys on July 22, 2004. Laurel dace may be a spawning nest associate where syntopic (sharing the same habitat) with nest-building minnow species, as has been documented in blackside dace (Starnes and Starnes 1981, p. 366). Soddy Creek is the only location in which Skelton (2001, p. 126) has collected a nest-building minnow with laurel dace. Skelton (2001, p. 126) reports finding as many as three year classes in some collections of laurel dace, though young-of-year fish are uncommon in collections. Observations of three year classes indicate that laurel dace live as long as 3 years.
Laurel dace preferred prey items include fly larvae, stonefly larvae, and caddisfly larvae (Skelton 2001, p. 126). Skelton observed that the morphological feeding traits of laurel dace, including large mouth, short digestive tract, reduced number of pharyngeal (located within the throat) teeth, and primitively shaped basioccipital bone (bone that articulates the vertebra), all of which are consistent with a diet consisting largely of animal material.
Laurel dace are known historically from seven streams on the Walden Ridge portion of the Cumberland Plateau, where drainages generally meander eastward before dropping abruptly down the plateau escarpment and draining into the Tennessee River. Specifically, these seven streams occur in three independent systems: Soddy Creek; three streams that are part of the Sale Creek system (the Horn and Laurel branch tributaries to Rock Creek, and the Cupp Creek tributary to Roaring Creek); and three streams that are part of the Piney River system (Young's, Moccasin, and Bumbee creeks). Strange and Skelton (2005, p. 8) assessed the genetic structure within populations of laurel dace and, based on distribution of genetic diversity among populations, they recognized two genetically distinct management units; (1) The southern populations in Sale and Soddy Creeks, and (2) the northern population in the Piney River system.
Skelton (2001, p. 126) considered collections by the Tennessee Valley
The current distribution of laurel dace comprises six of the seven streams that were historically occupied; the species is considered extirpated from Laurel Branch (see above). In these six streams, they are known to occupy reaches of approximately 0.3 to 8 km (0.2 to 5 mi) in length. The laurel dace is known from a single reach in Soddy Creek, and surveys in 2004 produced only a single, juvenile laurel dace (Strange and Skelton 2005, pp. 5-6 and Appendices 1 and 2). In Horn Branch, laurel dace are known from approximately 900 m (2,953 ft), but have become increasingly difficult to collect (Skelton 1997, pp. 13-14). Skelton (1997, p. 14) reports that minnow traps have been the most successful method for collecting live laurel dace from Horn Branch, as it is difficult to electroshock the fish due to in-stream rock formations and fallen trees. Only a single juvenile was caught in 2004 (Strange and Skelton 2005, p. 6). A total of 19 laurel dace were collected from Cupp Creek during 1995 and 1996 using an electroshocker (Skelton 1996, p. 14). However, Skelton found no laurel dace in this stream in 2004, despite attempts to collect throughout an approximately 700-m (2,297-ft) reach (Strange and Skelton 2005, p. 6).
Laurel dace were initially found in Young's, Moccasin, and Bumbee creeks in the Piney River system in 1996 (Skelton 1997, pp. 14-15). Sampling in 2004 led to the discovery of additional laurel dace localities in Young's and Moccasin creeks, but the locality where laurel dace were found in Young's Creek in 1996 was inaccessible due to the presence of a locked gate (Strange and Skelton 2005, p. 6-7). The new localities were in the headwaters of these two streams. Persistence of laurel dace at the Bumbee Creek locality was confirmed in 2004 by surveying from a nearby road using binoculars. Direct surveys were not possible because the land had been leased to a hunt club for which contact information was not available, and, therefore, survey permission could not be obtained (Strange and Skelton 2005, p. 7). Nuptial males are easily identified from other species present in Bumbee Creek due to their brilliant coloration during the breeding season, as the two lateral stripes, breast, and underside of head turn intensely black and the entire ventral (lower/abdominal) portion of the body, contiguous with the lower black stripe and black breast, becomes an intense scarlet color. This brilliant coloration is easily seen through binoculars at short distances by trained individuals.
No population estimates are available for laurel dace. However, based on trends observed in surveys and collections since 1991, Strange and Skelton (2005, p. 8) concluded that this species is persisting in Young's, Moccasin, and Bumbee creeks in the Piney River watershed, but is at risk of extirpation from the southern part of Walden Ridge in Soddy Creek, and in the Horn Branch and Cupp Creek areas that are tributaries to Sale Creek. As noted above, the species is considered to be extirpated from Laurel Branch, which is part of the Sale Creek system.
The laurel dace is ranked by the TDEC (2009, p. 60) as an S1G1 species: extremely rare in Tennessee, and critically imperiled globally. The laurel dace is designated as a Tier 1 GCN species in the Tennessee CWCS (TWRA 2005, pp. 44, 49).
In the proposed rule published on June 24, 2010, we requested that all interested parties submit written comments on the proposed rule to list the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace by August 23, 2010. We also contacted appropriate Federal and State agencies, scientific experts and organizations, and other interested parties and invited them to comment on the proposal. Newspaper notices inviting general public comment were published in newspapers covering all affected counties in Kentucky, Tennessee, Alabama, and Arkansas. We did not receive any requests for a public hearing.
During the comment period for the proposed rule, we received ten comment letters in response to the proposed rule: four from peer reviewers, one from a State agency, and five from organizations or individuals. All of the ten commenters supported the proposed rule to list these five fishes as endangered. All substantive information provided during the comment period has either been incorporated directly into this final determination or is addressed below.
In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited expert opinion from 12 knowledgeable individuals with scientific expertise that included familiarity with the 5 species and their habitats, biological needs, and threats. We received responses from four of the peer reviewers.
We reviewed all comments received from the peer reviewers for substantive issues and new information regarding the listing of the five fishes. The peer reviewers generally concurred with our conclusions and provided additional information on taxonomic classification, life-history, and distribution; technical clarifications; and suggestions to improve the final rule. Peer reviewer comments are addressed in the “Summary of Changes from Proposed Rule” and incorporated into the final rule as appropriate.
(1)
(2)
As a result of the comments received during the public comment period (see above) we made the following changes to the final listing rule:
(1) We added taxonomic classification information to the species' background sections.
(2) We added life-history information to the Cumberland darter and chucky madtom background sections.
(3) We updated the distributional information for the rush darter in Alabama.
(4) We changed the genus of laurel dace from
(5) We updated population estimate and threats
Section 4 of the Act and its implementing regulations (50 CFR 424) set forth the procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. A species may be determined to be an endangered or threatened species due to one or more of the five factors described in section 4(a)(1) of the Act: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; and (E) other natural or manmade factors affecting its continued existence. Listing actions may be warranted based on any of the above threat factors, singly or in combination. Each of these factors is discussed below.
The primary threat to the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace is physical habitat destruction or modification resulting from a variety of human-induced impacts such as siltation, disturbance of riparian corridors, and changes in channel morphology (Waters 1995, pp. 2-3; Skelton 1997, pp. 17, 19; Thomas 2007, p. 5). The most significant of these impacts is siltation (excess sediments suspended or deposited in a stream) caused by excessive releases of sediment from activities such as resource extraction (
Land use practices that affect sediment and water discharges into a stream can also increase the erosion or sedimentation pattern of the stream, which can lead to the destruction or modification of in-stream habitat and riparian vegetation, stream bank collapse, and increased water turbidity and temperature. Sediment has been shown to abrade and suffocate bottom-dwelling fish and other organisms by clogging gills; reduce aquatic insect diversity and abundance; impair fish feeding behavior by altering prey base and reducing visibility of prey; impair reproduction due to burial of nests; and, ultimately, negatively impact fish growth, survival, and reproduction (Waters 1995, pp. 5-7, 55-62; Knight and Welch 2001, pp. 134-136). Wood and Armitage (1997, pp. 211-212) identified at least five impacts of sedimentation on fish, including (1) reduction of growth rate, disease tolerance, and gill function; (2) reduction of spawning habitat and egg, larvae, and juvenile development; (3) modification of migration patterns; (4) reduction of food availability through the blockage of primary production; and (5) reduction of foraging efficiency. The effects of these types of threats will likely increase as development increases in these watersheds.
Non-point source pollution from land surface runoff can originate from virtually any land use activity and may be correlated with impervious surfaces and storm water runoff. Pollutants may include sediments, fertilizers, herbicides, pesticides, animal wastes, septic tank and gray water leakage, pharmaceuticals, and petroleum products. These pollutants tend to increase concentrations of nutrients and toxins in the water and alter the chemistry of affected streams such that the habitat and food sources for species like the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace are negatively impacted. Construction and road maintenance activities associated with urban development typically involve earth-moving activities that increase sediment loads into nearby streams. Other siltation sources, including timber harvesting, natural gas development activities, clearing of riparian vegetation, mining, and agricultural practices, allow exposed earth to enter streams during or after precipitation events. These activities result in canopy removal, elevated stream temperatures, and increased siltation, thereby degrading habitats used by fishes for both feeding and reproduction (Mattingly
The Cumberland darter's preferred habitat characteristics (
Siltation can also occur in the Cumberland darter's known habitat as a
Another significant threat to the Cumberland darter is water quality degradation caused by a variety of non-point source pollutants. Coal mining represents a major source of these pollutants (O'Bara 1991, p. 11; Thomas 2007, p. 5), because it has the potential to contribute high concentrations of dissolved metals and other solids that lower stream pH or lead to elevated levels of stream conductivity (Pond 2004, pp. 6-7, 38-41; Mattingly et al. 2005, p. 59). These impacts have been shown to negatively affect fish species, including listed species, in the Clear Fork system of the Cumberland basin (Weaver 1997, pp. 29; Hartowicz pers. comm. 2008). The direct effect of elevated stream conductivity on fishes, including the Cumberland darter, is poorly understood, but some species, such as blackside dace, have shown declines in abundance over time as conductivity increased in streams affected by mining (Hartowicz pers. comm. 2008). Studies indicate that blackside dace are generally absent when conductivity values exceed 240 microSiemens (µS) (Mattingly
Other non-point source pollutants that affect the Cumberland darter include domestic sewage (through septic tank leakage or straight pipe discharges); agricultural pollutants such as fertilizers, pesticides, herbicides, and animal waste; and other chemicals associated with oil and gas development. Non-point source pollutants can cause excess nutrification (increased levels of nitrogen and phosphorus), excessive algal growth, instream oxygen deficiencies, increased acidity and conductivity, and other changes in water chemistry that can seriously impact aquatic species (KDOW 1996, pp. 48-50; KDOW 2006, pp. 70-73).
In summary, habitat loss and modification represent significant threats to the Cumberland darter. Severe degradation from sedimentation, physical habitat disturbance, and contaminants threatens the habitat and water quality on which the Cumberland darter depends. Sedimentation from coal mining, logging, agriculture, and development sites within the upper Cumberland basin negatively affect the Cumberland darter by reducing growth rates, disease tolerance, and gill function; reducing spawning habitat, reproductive success, and egg, larvae, and juvenile development; modifying migration patterns; reducing food availability through reductions in prey; and reducing foraging efficiency. Contaminants associated with coal mining (metals, other dissolved solids), domestic sewage (bacteria, nutrients), and agriculture (fertilizers, pesticides, herbicides, and animal waste) cause degradation of water quality and habitats through increased acidity and conductivity, instream oxygen deficiencies, excess nutrification, and excessive algal growths. Furthermore, these threats faced by the Cumberland darter from sources of sedimentation and contaminants are imminent, the result of ongoing projects that are expected to continue indefinitely. As a result of the imminence of these threats combined with the vulnerability of the remaining small populations to extirpation from natural and manmade threats, we have determined that the present or threatened destruction, modification, or curtailment of the Cumberland darter habitat and range represents a significant threat of high magnitude. We have no information indicating that the magnitude or imminence of this threat is likely to be appreciably reduced in the foreseeable future.
Sediment is the most abundant pollutant in the Mobile River Basin (Alabama Department of Environmental Management 1996, pp. 14-15) and a major threat to the rush darter. Within the Clear Creek drainage, Johnston and Kleiner (2001, p. 4) reported that, during August 2001, the dominant land use adjacent to Doe Branch and Mill Creek appeared to be forests, and that there were no obvious threats to water quality. However, Johnston and Kleiner (2001, p. 4) reported that clearcutting in the Wildcat Branch watershed may have increased sedimentation into the stream. Approximately 84 percent (i.e., 5 km or 3 mi) of Wildcat Branch is privately owned, and recent land exchanges within the Bankhead National Forest have taken about 0.9 km (0.6 mi) of stream west of Clear Creek out of U.S. Forest Service (USFS) management and protection. In 2001, Service and USFS personnel noted heavy siltation at the County Road 329 Bridge over Doe Branch and at several other road crossings in other tributary streams in the immediate area during a modest spring rain event. Sediment in area streams is also the result of increased erosion from the scouring of roadside ditches, and erosion of the gravel County Road 329 itself adjacent to Doe and Wildcat branches (Drennen pers. obs. 2005).
Blanco (2001, p. 68) identified siltation from development projects as the greatest threat to the fauna of Turkey Creek. New subdivisions have been developed throughout the watershed, increasing the amount of impervious surfaces in the recharge areas of springs. The increase in impervious surfaces is leading to increased stormwater runoff and is reducing the amount of recharge (water storage) available to the aquifers that feed springs in the watershed. These flow alterations reduce the amount and complexity of rush darter habitat by eroding stream banks, destabilizing substrates and aquatic vegetation, and decreasing overall water quality.
There are four major soil types that occur within the Turkey Creek watershed, and all are considered highly erodible due to the steep topography (Spivey 1982, pp. 5, 7, 8, 14). Therefore, any activity that removes native vegetation on these soils can be expected to lead to increased sediment loads in Turkey Creek watershed (USFWS 2001, p. 59370), including the areas near Penny and Tapawingo Springs. Industrialization is extensive and expanding throughout the watershed, particularly near the type locality for the rush darter (Bart and Taylor 1999, p. 33; Drennen pers. obs. 2007-2010).
Point source siltation has impacted the Turkey Creek watershed, including an abundance of sites affecting Beaver Creek, a major tributary to Turkey
Springs throughout the rush darter's range, especially in Pinson Valley, flush and dilute sediments and excessive nutrients from streams by providing a constant flow of cool, clean water. However, the ongoing destruction of spring heads and wetlands throughout the species' range has significantly reduced the species' movement and colonization. Little Cove Creek and Bristow Creek spring heads have been channelized, and the head of Cove Spring has a pumping facility built on it (Fluker
In summary, threats to rush darter include stormwater runoff and siltation, caused by an increase in urbanization and impervious surfaces in the watershed. Other threats include spring head alteration, roadside maintenance, and logging. These threats are ongoing and thus considered imminent. The magnitude of the threats is high due to the small population sizes and high levels of alterations and destruction of the springs and streams. We have no information indicating that the magnitude or imminence of these threats is likely to be appreciably reduced in the foreseeable future.
Robison and Harp (1981, p. 17), McDaniel (1984, p. 92), and Robison and Buchanan (1988, p. 429) have attributed the decline in populations of yellowcheek darters in the four forks of the Little Red River and the mainstem Little Red River to habitat alteration and degradation. The suspected primary cause of the species' decline is the impoundment of the Little Red River and lower reaches of the Devils, Middle, and South Forks, areas that in the past provided optimal habitat for this species. The creation of Greers Ferry Lake, in 1962, converted optimal yellowcheek darter habitat (clear, cool, perennial flow with large substrate particle size (Robison and Buchanan 1988, p. 429)), to a deep, standing water environment. This dramatic change in habitat flooded spawning sites and changed chemical and physical characteristics in the streams that provide habitat for the species. Impoundments profoundly alter channel characteristics, habitat availability, and flow regime with serious consequences for biota (Allan and Flecker 1993, p. 36, Ward and Stanford 1995, pp. 105-119). Some of these include converting flowing to still waters, increasing depths and sedimentation, decreasing dissolved oxygen, drastically altering resident fish populations (Neves
Ozark headwater streams typically exhibit seasonal fluctuations in flows, with flow rates highest in spring and lowest in late summer and fall. The upper reaches of these small streams are most affected by seasonally fluctuating water levels (Robison and Harp 1981, p. 17). As a result, they often lack consistent and adequate flows, and by late summer or fall are reduced to a series of isolated pools (Wine pers. comm. 2008). Expanding natural gas development activities that began in the upper Little Red River watershed in 2006 require large quantities of water (both surface water and groundwater) and pose an imminent threat to the continued existence of yellowcheek darter as these activities rapidly expand and increase in the watersheds of all four forks (Davidson pers. comm. 2008). Because the yellowcheek darter requires permanent flows with moderate to strong current (Robison and Buchanan 1988, p. 429), and because downstream refugia have been lost to impoundments and channelization, water withdraws that exacerbate seasonal stream reductions and reduce moving water (lotic) habitat are a serious threat.
Additional threats to the yellowcheek darter include habitat degradation from land use activities in the watershed, including agriculture and forestry. Traditional farming practices, feedlot operations, and associated poor land use practices contribute many pollutants to rivers. Neves
The Arkansas Natural Resources Conservation Service (NRCS) has identified animal wastes, nutrients, excessive erosion, loss of plant diversity, and loss of species as water quality concerns associated with agricultural land use activities in the upper Little Red River watershed (NRCS 1999). Large poultry and dairy operations increase nutrient inputs to streams when producers apply animal waste to pastures to stimulate vegetation growth for grazing and hay production. Continuous grazing methods in the watershed allow unrestricted animal access to grazing areas, and on steeper slopes this results in increased runoff and erosion (NRCS 1999). Since pastures often extend directly to the edge of the stream, and lack a riparian zone with native vegetation, runoff from pastures carries pollutants directly into streams. Eroding stream banks also result in alterations to stream hydrology and geomorphology, degrading habitat. Livestock spend a disproportionate amount of time in riparian areas during hot summer months. Trampling and grazing can change and reduce vegetation and eliminate riparian areas
Additionally, earthen dams were constructed across a riffle in the lower South Fork to create a pool for annual chuckwagon races for many years leading up to 2003. The Service and U.S. Army Corps of Engineers met with the responsible landowner in 2004 and suggested an alternative to dam construction that would minimize impacts to the yellowcheek darter. These recommendations were followed for several years; however, another earthen dam was constructed in 2008 using material from the South Fork to facilitate events associated with the annual chuckwagon races. This dam, like its predecessors, was unpermitted and resulted in habitat degradation and alteration for several miles upstream and downstream of the site.
The chuckwagon race event draws approximately 20,000 to 30,000 people per year to the South Fork Little Red River for a 1-week period around Labor Day. Horses and wagons traverse the river and its tributaries for miles leading to increased habitat disturbance, sedimentation, and trampling. The chuckwagon races continue to grow annually and pose a threat to the continued existence of yellowcheek darters in the South Fork Little Red River.
Timber harvesting activities involving clear-cutting entire steep hillsides were observed during 1999-2000 in the Devils Fork watershed (Wine pers. comm. 2008). The failure to implement voluntary State best management practices (BMPs) for intermittent and perennial streams during timber harvests has resulted in water quality degradation and habitat alteration in stream reaches adjacent to harvesting operations. When timber harvests involve clear cutting to the water's edge, without leaving a riparian buffer, silt and sediment enter streams lying at the bottom of steep slopes. The lack of streamside vegetation also promotes bank erosion that alters stream courses and introduces large quantities of sediment into the channel (Allan 1995, p. 321). Timber harvest operations that use roads on steep slopes to transport timber can carry silt and sediment from the road into the stream at the bottom of the slope. Logging impacts on sediment production are considerable, but often erosion of access and haul roads produces more sediment than the land harvested for timber (Brim Box and Mossa 1999, p. 102). These activities have occurred historically and continue to occur in the upper Little Red River watershed.
Natural gas exploration and development is a newly emerging threat to yellowcheek darter populations. Erosion and sedimentation issues associated with natural gas development activities, particularly pipelines (herein defined as all flow lines, gathering lines, and non-interstate pipelines), were first documented by Service biologists during 2007 in the South Fork Little Red River watershed. In June 2008, the Service began documenting significant erosion and sedimentation issues associated with natural gas pipeline construction and maintenance as natural gas development activities expanded into the watershed. Service biologists documented erosion and sedimentation at almost every new pipeline stream crossing in the South Fork and Middle Fork Little Red River watersheds, regardless of the diameter of the pipe. Channel incision was documented at numerous stream crossings that are tributaries to the South Fork Little Red River. The incision increased erosion and sedimentation, as well as altering the hydrology and geomorphology characteristics of the streams. Pipeline rights-of-way were found to have one of the following conditions: (1) No BMPs (
In summary, threats to the yellowcheek darter from the present destruction, modification, or curtailment of its habitat or range negatively impact the species. Threats include such activities as impoundment, sedimentation, poor livestock grazing practices, improper timber harvest practices, nutrient enrichment, gravel mining, channelization/channel instability, and natural gas development. These threats are considered imminent and of high magnitude throughout the species' entire range. We have no information indicating that the magnitude or imminence of these threats is likely to be appreciably reduced in the foreseeable future, and in the case of pipeline disturbance, we expect this threat to become more problematic over the next several years as natural gas development continues to intensify.
The current range of the chucky madtom is believed to be restricted to an approximately 1.8-mi (3-km) reach of Little Chucky Creek in Greene County, Tennessee. Land use data from the Southeast GAP Analysis Program (SE-GAP) show that land use within the Little Chucky Creek watershed is predominantly agricultural, with the vast majority of agricultural land being devoted to production of livestock and their forage base (Jones
Traditional farming practices, feedlot operations, and associated land use practices contribute many pollutants to rivers. Neves
The TVA Index of Biological Integrity results indicate that Little Chucky Creek is biologically impaired (Middle Nolichucky Watershed Alliance 2006, p. 13). Given the predominantly agricultural land use within the Little Chucky Creek watershed, non-point source sediment and agrochemical discharges may pose a threat to the chucky madtom by altering the physical characteristics of its habitat, thus potentially impeding its ability to feed, seek shelter from predators, and successfully reproduce. The Little Chucky Creek watershed also contains a portion of the City of Greeneville, providing an additional source for input of sediments and contaminants into the creek and threatening the chucky madtom. Wood and Armitage (1997, pp. 211-212) identify at least five impacts of sedimentation on fish, including (1) reduction of growth rate, disease tolerance, and gill function; (2) reduction of spawning habitat and egg, larvae, and juvenile development; (3) modification of migration patterns; (4) reduction of food availability through
The chucky madtom is a bottom-dwelling species. Bottom-dwelling fish species are especially susceptible to sedimentation and other pollutants that degrade or eliminate habitat and food sources (Berkman and Rabeni 1987, pp. 290-292; Richter
In summary, threats to the chucky madtom from the present destruction, modification, or curtailment of its habitat or range negatively impact the species. Degradation from sedimentation, physical habitat disturbance, and contaminants threaten the habitat and water quality on which the chucky madtom depends. Sedimentation from agricultural lands could negatively affect the chucky madtom by reducing growth rates, disease tolerance, and gill function; reducing spawning habitat, reproductive success, and egg, larvae, and juvenile development; reducing food availability through reductions in prey; and reducing foraging efficiency. Contaminants associated with agriculture (e.g., fertilizers, pesticides, herbicides, and animal waste) can cause degradation of water quality and habitats through instream oxygen deficiencies, excess nutrification, and excessive algal growths. Furthermore, these threats faced by the chucky madtom from sources of sedimentation and contaminants are imminent; the result of ongoing agricultural practices that are expected to continue indefinitely. As a result of the imminence of these threats combined with the vulnerability of the remaining small population to extirpation from natural and manmade threats, we have determined that the present or threatened destruction, modification, or curtailment of the chucky madtom habitat and range represents a significant threat of high magnitude. We have no information indicating that the magnitude or imminence of these threats is likely to be appreciably reduced in the foreseeable future.
Skelton (2001, p. 127) concluded that the laurel dace is “presumably tolerant of some siltation.” However, Strange and Skelton (2005, p. 7 and Appendix 2) observed levels of siltation they considered problematic during later surveys for the laurel dace and concluded this posed a threat in several localities throughout the range of the species. Sediment has been shown to abrade and or suffocate bottom-dwelling fish and other organisms by clogging gills; reducing aquatic insect diversity and abundance; impairing fish feeding behavior by altering prey base and reducing visibility of prey; impairing reproduction due to burial of nests; and, ultimately, negatively impacting fish growth, survival, and reproduction (Waters 1995, pp. 5-7, 55-62; Knight and Welch 2001, pp. 134-136). However, we do not currently know what levels of siltation laurel dace are able to withstand before populations begin to decline due to these siltation-related stressors. The apparent stability of the northern population of laurel dace in the Piney River system suggests that this species is at least moderately tolerant of siltation-related stressors. We do not know the extent to which other factors might have driven the decline of the southern populations in Sale and Soddy Creeks.
Of the streams inhabited by the southern populations recognized by Strange and Skelton (2005, p. Appendix 2), the reaches from which laurel dace have been collected in Soddy Creek and Horn Branch approach 1 km (0.6 mi) in length. In Cupp Creek, collections of this species are restricted to less than 300 m (984 ft) of stream, in spite of surveys well beyond the reach known to be inhabited. In each of the streams occupied by the southern populations, Strange and Skelton (2005, Appendix 2) identified siltation as a factor that could alter the habitat and render it unsuitable for laurel dace. The restricted distribution of laurel dace in streams inhabited by the southern populations leaves them highly vulnerable to potential deleterious effects of excessive siltation or other localized disturbances.
A newly emerging threat to laurel dace in Soddy Creek is the conversion of silvicultural lands to row crop agriculture. Two large pine plantations within the Soddy Creek Watershed were harvested and then converted to tomato farms. An irrigation impoundment was built on one Soddy Creek tributary and another is under construction. As a result of these activities, a large silt source was introduced into the Soddy Creek headwaters. In addition to contributing sediment, crop fields often allow runoff from irrigation water to flow directly into the creek. This water contains fungicides, herbicides, and fertilizers (Thurman pers. comm. 2010).
Strange and Skelton (2005, p. 7 and Appendix 2) identified siltation as a threat in all of the occupied Piney River tributaries (Young's, Moccasin, and Bumbee Creeks). The Bumbee Creek type locality for the laurel dace is located within industrial forest that has been subjected to extensive clear-cutting and road construction in close proximity to the stream. Strange and Skelton (2005, p. 7) noted a heavy sediment load at this locality and commented that conditions in Bumbee Creek in 2005 had deteriorated since the site was visited by Skelton in 2002. Strange and Skelton (2005, pp. 7 and 8 and Appendix 2) also commented on excessive siltation in localities they sampled on Young's and Moccasin Creeks, and observed localized removal of riparian vegetation around residences in the headwaters of each of these streams. They considered the removal of riparian vegetation problematic not only for the potential for increased siltation, but also for the potential thermal alteration of these small headwater streams. Skelton (2001, p. 125) reported that laurel dace occupy cool streams with a maximum recorded temperature of 26 °C (78.8 °F). The removal of riparian vegetation could potentially increase temperatures above the laurel dace's maximum tolerable limit.
Water temperature may be a limiting factor in the distribution of this species (Skelton 1997, pp. 17, 19). Canopy cover of laurel dace streams often consists of eastern hemlock (Tsuga canadensis), mixed hardwoods, pines (
Habitat destruction and modification also stem from existing or proposed infrastructure development in association with silvicultural activities. The presence of culverts at one or more road crossings in most of the streams inhabited by laurel dace may disrupt upstream dispersal within those systems (Chance pers. obs. 2008). Such dispersal barriers could prevent re-establishment
In summary, the primary threat to laurel dace throughout its range is excessive siltation resulting from agriculture and extensive silviculture involving both inadequate riparian buffers in harvest areas and the failure to use BMPs during road construction. Severe degradation from sedimentation, physical habitat disturbance, and contaminants threatens the habitat and water quality on which the laurel dace depends. Sedimentation negatively affects species (such as the laurel dace) by reducing growth rates, disease tolerance, and gill function; reducing spawning habitat, reproductive success, and egg, larvae, and juvenile development; reducing food availability through reductions in prey; and reducing foraging efficiency (Waters 1995, pp. 5-7; 55-62; Wood and Armitage 1997, pp. 211-212; Knight and Welch 2001, pp. 134-136). These threats faced by the laurel dace from sources of sedimentation and contaminants are imminent, the result of ongoing agricultural and silvicultural practices that are expected to continue. Since the identified threats substantially affect survival, growth, reproduction, and feeding, we have determined that the present or threatened destruction, modification, or curtailment of the laurel dace habitat and range represents a significant threat of high magnitude. We have no information indicating that the magnitude or imminence of these threats is likely to be appreciably reduced in the foreseeable future.
The Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace are not commercially utilized. Individuals have been taken for scientific and private collections in the past, but collecting is not considered a factor in the decline of these species and is not expected to be so in the future. The available information does not indicate that overutilization is likely to become a threat to any of these five fishes in the foreseeable future.
Disease is not considered to be a factor in the decline of the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, or laurel dace. Although the Cumberland darter, rush darter, yellowcheek darter, and laurel dace are undoubtedly consumed by predators, the available information suggests that this predation is naturally occurring, or a normal aspect of the population dynamics. As a result, we do not believe that predation is considered to currently pose a threat to these species. Furthermore, the information we do have does not indicate that disease or predation is likely to become a threat to any of these five fishes in the foreseeable future.
The Cumberland darter and its habitats are afforded some protection from water quality and habitat degradation under the Clean Water Act of 1977 (33 U.S.C. 1251
States maintain water-use classifications through issuance of National Pollutant Discharge Elimination System (NPDES) permits to industries, municipalities, and others. NPDES permits set maximum limits on certain pollutants or pollutant parameters. For water bodies on the 303(d) list, States are required under the Clean Water Act to establish a total maximum daily load (TMDL) for the pollutants of concern that will bring water quality into the applicable standard. Three Cumberland darter streams, Jenneys Branch, Marsh Creek, and Wolf Creek, have been identified as impaired by the KDOW and placed on the State's 303(d) list (KDOW 2008). Causes of impairment were listed as siltation/sedimentation from agriculture, coal mining, land development, and silviculture and organic enrichment/eutrophication from residential areas. TMDLs have not yet been developed for these pollutants.
The Cumberland darter has been designated as an endangered species by Tennessee (TWRA 2005, p. 240) and Kentucky (KSNPC 2005, p. 11), but the designation in Kentucky conveys no legal protection. Under the Tennessee Nongame and Endangered or Threatened Wildlife Species Conservation Act of 1974 (Tennessee Code Annotated §§ 70-8-101-112), “[I]t is unlawful for any person to take, attempt to take, possess, transport, export, process, sell or offer for sale or ship nongame wildlife, or for any common or contract carrier knowingly to transport or receive for shipment nongame wildlife.” Further, regulations included in the Tennessee Wildlife Resources Commission Proclamation 00-15 Endangered Or Threatened Species state the following: “Except as provided for in Tennessee Code Annotated, Section 70-8-106 (d) and (e), it shall be unlawful for any person to take, harass, or destroy wildlife listed as threatened or endangered or otherwise to violate terms of Section 70-8-105 (c) or to destroy knowingly the habitat of such species without due consideration of alternatives for the welfare of the species listed in (1) of this proclamation, or (2) the United States list of Endangered fauna.” Under these regulations, potential collectors of this species are required to have a State collection permit, therefore protecting against potential threats under Factor B. However, in terms of project management, and potential habitat disturbance, this regulation only provides for the consideration of alternatives, and does not require the level of project review afforded by the Act.
In 7 of 12 streams where the Cumberland darter still occurs, the species receives incidental protection under the Act due to the coexistence of the Federally threatened blackside dace. These streams are in watersheds that are at least partially owned by the Federal Government (
In summary, population declines and degradation of habitat for the Cumberland darter are ongoing despite the protection afforded by State and Federal laws and corresponding regulations. Because of the vulnerability of the small remaining populations of the Cumberland darter and the imminence of these threats, we find the inadequacy of existing regulatory mechanisms to be a significant threat of high magnitude. Further, the information available to us at this time does not indicate that the magnitude or imminence of this threat is likely to be
The rush darter and its habitats are afforded some protection from water quality and habitat degradation under the Clean Water Act and the Alabama Water Pollution Control Act, as amended, 1975 (Code of Alabama, §§ 22-22-1 to 22-22-14). However, as demonstrated under Factor A, population declines and degradation of habitat for this species are ongoing despite the protection afforded by these laws. While these laws have resulted in some improvement in water quality and stream habitat for aquatic life, including the rush darter, they alone have not been adequate to fully protect this species; stormwater mismanagement, sedimentation, and non-point source pollutants continue to be a significant problem. In addition, these laws have not adequately addressed water quantity issues that are a problem throughout the range of the species. Sediment is the most abundant pollutant in the Mobile River Basin and is among the greatest threats to the rush darter.
The State of Alabama maintains water-use classifications through issuance of NPDES permits to industries, municipalities, and others that set maximum limits on certain pollutants or pollutant parameters. For water bodies on the 303(d) list, States are required under the Clean Water Act to establish a TMDL for the pollutants of concern that will bring water quality into the applicable standard. The State of Alabama has not identified any impaired water bodies in Jefferson, Winston, and Etowah counties in the immediate or upstream portion of the rush darter range or in any watersheds in Winston or Etowah counties. However, sedimentation events are usually related to stormwater runoff episodes, and are usually not captured by routine water quality sampling.
Although stormwater events are temporary in nature, they are still harmful to aquatic species. The size and frequency of floods and stormwater events increases with urbanization (Konrad 2003, pp. 1-4). Stormwater events in urban areas decrease the storage capacity for water in urban basins compared to rural basins; and urbanization promotes more rapid runoff, higher peak discharge rates, and total volume of water (Konrad 2003, pp. 1-4). Not only does urbanization and associated runoff change the physical aspects of water resources, but also the chemical and biological conditions of waterways (AMEC Earth and Environmental 2001, p. 1). Jefferson County, Alabama (2005, pp. 2, 39) has noted that the expansion of impervious surfaces in the Turkey Creek Drainage Basin caused an increase in flood heights and water velocity during stormwater events. Due to these observations, the Storm Water Management Authority and Jefferson County Department of Health (2010, pp. 4-9) are tracking and monitoring construction and maintenance sites that impact stormwater management within the Turkey Creek and City of Pinson area. As demonstrated under Factor A, flow alterations associated with stormwater runoff reduce the amount and complexity of rush darter habitat by eroding stream banks, destabilizing substrates and aquatic vegetation, and decreasing overall water quality.
In summary, population declines and degradation of habitat for the rush darter are ongoing despite the protection afforded by State and Federal laws and corresponding regulations. Despite these laws, sedimentation, flow alterations, and non-point source pollution continue to adversely affect the species. Because of the vulnerability of the small remaining populations of the rush darter and the imminence of these threats, we find the inadequacy of existing regulatory mechanisms to be a significant threat of high magnitude. Further, the information available to us at this time does not indicate that the magnitude or imminence of this threat is likely to be appreciably reduced in the foreseeable future.
The Arkansas Department of Environmental Quality (ADEQ) has established water quality standards for surface waters in Arkansas, including specific standards for those streams designated as “extraordinary resource waters” (ERW) based on “a combination of the chemical, physical, and biological characteristics of a waterbody and its watershed, which is characterized by scenic beauty, aesthetics, scientific values, broad scope recreation potential, and intangible social values” (ADEQ Regulation 2, November 25, 2007). As described in ADEQ's Regulation 2, Section 2.203, ERW “shall be protected by (1) water quality controls, (2) maintenance of natural flow regime, (3) protection of in stream habitat, and (4) pursuit of land management protective of the watershed.” This regulatory mechanism has precluded most large-scale commercial gravel mining in the Little Red River watershed; however, illegal gravel mining is still considered a cause of habitat degradation and a threat in this watershed. The Middle, Archey, and Devils (and its major tributaries) forks are designated as ERW. The South Fork has not been designated as an ERW. The applicable water quality standards have not protected yellowcheek darter habitat from alterations and water quality degradation from traditional land use and expanding natural gas development activities.
The Arkansas Forestry Commission is the State agency responsible for establishing BMPs for timber harvests in Arkansas. BMPs for timber harvests in Arkansas are only recommendations; there is no requirement that timber harvesters include BMPs in timber operations. The BMPs are currently under revision, but the Service does not know what effect these revisions will have on aquatic habitats within the range of the species.
Natural gas production in the upper Little Red River watershed presents a unique problem for yellowcheek darter conservation. In Arkansas, mineral rights for properties supersede the surface rights. Even where private landowners agree to implement certain BMPs or conservation measures on their lands for yellowcheek darter conservation, there is no guarantee that these BMPs or conservation measures will be implemented by natural gas companies, their subsidiaries, or contractors that lease and develop the mineral rights for landowners. For this reason, the intended benefits of conservation measures agreed to by landowners in agreements such as Candidate Conservation Agreements with Assurances may never be realized. Additionally, natural gas projects often do not contain a Federal nexus that would allow the Service to comment on proposed or ongoing projects.
The Arkansas Natural Resources Commission regulates water withdrawal in Arkansas streams. To date, they have not precluded water withdrawal for natural gas development activities in the upper Little Red River watershed. The USACE regulates instream activities under the Clean Water Act. Their policy to date has been to issue permits for instream activities associated with pipeline construction and maintenance under Nationwide Permits rather than Individual Permits that require more public involvement. The ADEQ lacks the resources necessary to enforce existing regulations under the Clean Water Act and the Arkansas Water and Air Pollution Act for activities associated with natural gas development.
The yellowcheek darter receives incidental protection under the Act due to the coexistence of the Federally endangered speckled pocketbook
In summary, the threats of inadequacy of existing regulatory mechanisms are imminent and considered high in magnitude. This is of particular concern in regard to the vulnerability of the species to threats from natural gas development, which is already impacting populations in the South and Middle forks of the Little Red River and is expected to intensify in the next several years throughout the range of the species. Further, the information available to us at this time does not indicate that the magnitude or imminence of this threat is likely to be appreciably reduced in the foreseeable future.
The chucky madtom and its habitats are afforded some protection from water quality and habitat degradation under the Clean Water Act and TDEC's Division of Water Pollution Control under the TWQCA. However, as demonstrated under Factor A, population declines and degradation of habitat for this species are ongoing despite the protection afforded by these laws. While these laws have resulted in improved water quality and stream habitat for aquatic life, including the chucky madtom, they alone have not been adequate to fully protect this species; sedimentation and non-point source pollutants continue to be a significant problem. Sediment is the most abundant pollutant in the Little Chucky Creek watershed and is the greatest threat to the chucky madtom.
Portions of the Nolichucky River and its tributaries in Greene County, Tennessee, are listed as impaired (303d) by the State of Tennessee due to pasture grazing, irrigated crop production, unrestricted cattle access, land development, municipal point source discharges, septic tank failures, gravel mining, agriculture, and channelization (TDEC 2010, pp. 64-73). However, Little Chucky Creek is not listed as “an impaired water” by the State of Tennessee (TDEC 2010, pp. 64-73). For water bodies on the 303(d) (impaired) list, States are required under the Clean Water Act to establish a TMDL for the pollutants of concern that will bring water quality into the applicable standard. The TDEC has developed TMDLs for the Nolichucky River watershed to address the problems of fecal coliform loads, siltation, and habitat alteration by agriculture.
The chucky madtom receives incidental protection under the Act due to the coexistence of the Federally endangered Cumberland bean (
The chucky madtom was listed as Endangered by the State of Tennessee in September of 2000. Under the Tennessee Nongame and Endangered or Threatened Wildlife Species Conservation Act of 1974 (Tennessee Code Annotated §§ 70-8-101-112), “[I]t is unlawful for any person to take, attempt to take, possess, transport, export, process, sell or offer for sale or ship nongame wildlife, or for any common or contract carrier knowingly to transport or receive for shipment nongame wildlife.” Further, regulations included in the Tennessee Wildlife Resources Commission Proclamation 00-15 Endangered Or Threatened Species state the following: “Except as provided for in Tennessee Code Annotated, Section 70-8-106 (d) and (e), it shall be unlawful for any person to take, harass, or destroy wildlife listed as threatened or endangered or otherwise to violate terms of Section 70-8-105 (c) or to destroy knowingly the habitat of such species without due consideration of alternatives for the welfare of the species listed in (1) of this proclamation, or (2) the United States list of Endangered fauna.” Under these regulations, potential collectors of this species are required to have a State collection permit. However, in terms of project management, this regulation only provides for the consideration of alternatives, and does not require the level of project review afforded by the Act.
In summary, population declines and degradation of habitat for the chucky madtom are ongoing despite the protection afforded by State and Federal laws and corresponding regulations. Despite these laws, sedimentation and non-point source pollution continue to adversely affect the species. Because of the vulnerability of the small remaining populations of the chucky madtom and the imminence of these threats, we find the inadequacy of existing regulatory mechanisms to be a significant threat of high magnitude. Further, the information available to us at this time does not indicate that the magnitude or imminence of this threat is likely to be appreciably reduced in the foreseeable future.
The laurel dace and its habitats are afforded some protection from water quality and habitat degradation under the Clean Water Act and by TDEC's Division of Water Pollution Control under the TWQCA. However, as demonstrated under Factor A, population declines and degradation of habitat for this species are ongoing despite the protection afforded by these laws. While these laws have resulted in improved water quality and stream habitat for aquatic life, including the laurel dace, they alone have not been adequate to fully protect this species; sedimentation and non-point source pollutants continue to be a significant problem. Sediment is the most abundant pollutant in the watershed and one of the greatest threats to the laurel dace.
The State of Tennessee maintains water-use classifications through issuance of NPDES permits to industries, municipalities, and others that set maximum limits on certain pollutants or pollutant parameters. For water bodies on the 303(d) list, States are required under the Clean Water Act to establish a TMDL for the pollutants of concern that will bring water quality into the applicable standard. The TDEC has not identified any impaired water bodies in the Soddy Creek, the Sale Creek system, or the Piney River system (TDEC 2008).
The TWRA lists the laurel dace as endangered. Under the Tennessee Nongame and Endangered or Threatened Wildlife Species Conservation Act of 1974 (Tennessee Code Annotated §§ 70-8-101-112), “[I]t is unlawful for any person to take, attempt to take, possess, transport, export, process, sell or offer for sale or ship nongame wildlife, or for any common or contract carrier knowingly to transport or receive for shipment nongame wildlife.” Further, regulations included in the Tennessee Wildlife Resources Commission Proclamation 00-15 Endangered Or Threatened Species state the following: “Except as provided for in Tennessee Code Annotated, Section 70-8-106 (d) and (e), it shall be unlawful for any person to take, harass, or destroy wildlife listed as threatened or endangered or otherwise to violate terms of Section 70-8-105 (c) or to destroy knowingly the habitat of such species without due consideration of alternatives for the welfare of the species listed in (1) of this proclamation, or (2) the United States list of Endangered fauna.” Under these regulations, potential collectors of this species are required to have a State collection permit. However, in terms of
In summary, population declines and degradation of habitat for the laurel dace are ongoing despite the protection afforded by State and Federal water quality laws. While these laws have resulted in improved water quality and stream habitat for aquatic life, including the laurel dace, they alone have not been adequate to fully protect this species; sedimentation and non-point source pollutants continue to be a significant problem. Non-point source pollution is not regulated by the Clean Water Act. Due to the vulnerability of the laurel dace to water quality and habitat degradation, we find the inadequacy of regulatory mechanisms that address water quality to be an imminent threat of high magnitude. Further, the information available to us at this time does not indicate that the magnitude or imminence of this threat is likely to be appreciably reduced in the foreseeable future.
The Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace have limited geographic ranges and small population sizes. Their existing populations are extremely localized, and geographically isolated from one another, leaving them vulnerable to localized extinctions from intentional or accidental toxic chemical spills, habitat modification, progressive degradation from runoff (non-point source pollutants), natural catastrophic changes to their habitat (e.g., flood scour, drought), other stochastic disturbances, and to decreased fitness from reduced genetic diversity. Potential sources of unintentional spills include accidents involving vehicles transporting chemicals over road crossings of streams inhabited by one of these five fish, or the accidental or intentional release of chemicals used in agricultural or residential applications into streams.
Species that are restricted in range and population size are more likely to suffer loss of genetic diversity due to genetic drift, potentially increasing their susceptibility to inbreeding depression, decreasing their ability to adapt to environmental changes, and reducing the fitness of individuals (Soule 1980, pp. 157-158; Hunter 2002, pp. 97-101; Allendorf and Luikart 2007, pp. 117-146). It is likely that some of the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace populations are below the effective population size required to maintain long-term genetic and population viability (Soule 1980, pp. 162-164; Hunter 2002, pp. 105-107). The long-term viability of a species is founded on the conservation of numerous local populations throughout its geographic range (Harris 1984, pp. 93-104). These separate populations are essential for the species to recover and adapt to environmental change (Noss and Cooperrider 1994, pp. 264-297; Harris 1984, pp. 93-104). The level of isolation seen in these five species makes natural repopulation following localized extirpations virtually impossible without human intervention.
Climate change has the potential to increase the vulnerability of the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace to random catastrophic events (
Fluker
The Little Red River watershed in Arkansas experienced moderate drought conditions during 1997-2000 (Southern Regional Climate Center 2000), which reduced flows in its tributaries and affected yellowcheek darter populations. During a status survey for the species conducted in 2000, the stage height of the Little Red River was 0.3 m (1 ft) lower than what was reported during a 1979-1980 status survey of the darter (Wine
The Federally endangered watercress darter (
The low fecundity rates exhibited by many madtom catfishes (Breder and Rosen 1966
Because the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace all have limited geographic ranges and small population sizes, they are subject to several ongoing natural and manmade threats. Since these threats are ongoing, they are considered to be imminent. The magnitude of these threats is high for each of these species because they result in a reduced ability to adapt to environmental change. Further, the information available to us at this time does not indicate that the magnitude or imminence of this threat is likely to be appreciably reduced in the foreseeable future.
Exacerbation of natural drought cycles as a result of global climate change could have detrimental effects on these five species, which are expected to continue or increase in the future. The specific threat of global climate change is considered to be nonimminent. The Federally endangered watercress darter (
We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace. Section 3(6) of the Act defines an endangered species as “any species which is in danger of extinction throughout all or a significant portion of its range.” We find that each of these five species is presently in danger of extinction throughout its entire range, based on the immediacy and magnitude of the threats described above. Based on our analysis, we have no reason to believe that the negative population trends for any of the five species addressed in this final rule will improve, nor will the effects of current threats acting on the species be ameliorated in the foreseeable future. Therefore, on the basis of the best available scientific and commercial information, we are listing the Cumberland darter, rush darter, yellowcheek darter, chucky madtom, and laurel dace as endangered under the Act.
Without the protection of the Act, these five species are in danger of extinction throughout all of their highly localized ranges. Extinction could occur within a few years, given the reduction of habitats and ranges, small population sizes, current habitat threats, and natural or human-induced catastrophic events. Furthermore, because of the immediate and ongoing significant threats to each species throughout their entire respective ranges, as described above in the five-factor analysis, we find that it is unnecessary to analyze whether there are any significant portions of ranges for each species that may warrant a different determination of status.
In the June 24, 2010 proposed listing rule (75 FR 36035) we determined that designation of critical habitat was prudent for all five species. However, we found that critical habitat was not determinable at the time, and set forth the steps we would undertake to obtain the information necessary to develop a proposed designation of critical habitat. We have completed these steps and intend to publish a proposed designation in the next few months for all five species. We were unable to include the critical habitat with the final listing rule due to an internal publishing issue requiring separate publication of proposed and final rules in the
Conservation measures provided to species listed as endangered or threatened under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness and conservation actions by Federal, State, and private organizations; and individuals. The Act encourages cooperation with the States and requires that recovery actions be carried out for all listed species. The protection measures required of Federal agencies and the prohibitions against certain activities are discussed, in part, below.
Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the act requires Federal agencies to confer with the Service on any action that is likely to jeopardize the continued existence of a species proposed for listing or result in destruction or adverse modification of proposed critical habitat. If a species is listed subsequently, section 7(a)(2) requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of the species or to destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into formal consultation with the Service.
Federal agency actions within the species' habitat that may require conference or consultation or both as described in the preceding paragraph include, but are not limited to, the carrying out or the issuance of permits for reservoir construction, stream alterations, discharges, wastewater facility development, water withdrawal projects, pesticide registration, mining, and road and bridge construction.
The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered wildlife. The prohibitions, codified at 50 CFR 17.21 for endangered wildlife, in part, make it illegal for any person subject to the jurisdiction of the United States to take (includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt any of these), import or export, ship in interstate
We may issue permits to carry out otherwise prohibited activities involving endangered wildlife species under certain circumstances. Regulations governing permits are codified at 50 CFR 17.22 for endangered species, and at 17.32 for threatened species. With regard to endangered wildlife, a permit must be issued for the following purposes: for scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities.
This rule does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. This rule will not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act of 1969 (42 U.S.C. 4321
A complete list of all references cited in this rulemaking is available on the Internet at
The primary authors of this document are the staff members of the Tennessee Ecological Services Field Office (see
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as follows:
16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500; unless otherwise noted.
(h) * * *
Agricultural Marketing Service, USDA.
Proposed Rule.
This rule invites comments on proposed changes to the reporting requirements currently prescribed under the marketing order that regulates the handling of kiwifruit grown in California. The order is administered locally by the Kiwifruit Administrative Committee (Committee). This rule would require handlers to file two end-of-season reports with the Committee. One report would contain price and handler shipment information and the other report would contain grower shipment information. The Committee would use this information to determine appropriate grower representation on the Committee, to conduct grower nominations, to verify shipments for assessment collections, and to prepare the annual report and the annual marketing policy, as required under the order. This proposal also announces the Agricultural Marketing Service's (AMS) intention to request approval from Office of Management and Budget (OMB) of a new information collection.
Comments on the proposed rulemaking must be received by October 11, 2011. Pursuant to the Paperwork Reduction Act (44 U.S.C. chapter 35), comments on the information collection burden that would result from this proposal must be received by October 11, 2011.
Interested persons are invited to submit written comments concerning this proposal. Comments must be sent to the Docket Clerk, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237;
Kathie M. Notoro, Marketing Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA;
Small businesses may request information on complying with this regulation by contacting Laurel May, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237;
This proposal is issued under Marketing Order No. 920 as amended (7 CFR part 920), regulating the handling of kiwifruit grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”
The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.
This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
This proposal invites comments on changes to the reporting requirements authorized under the order. This rule would add two new reporting requirements and two new forms to those currently specified in the order's administrative rules and regulations. These changes would allow the Committee to collect annual, end-of-season price, shipment, and grower information (grower entity/farm name, mailing address, location of farm by county, shipments by pack style, and acreage) from all kiwifruit handlers. Under this proposed regulation, both reports would be due from each handler within 30 days after such handler has completed current season shipments. The Committee would use this information to determine appropriate grower representation on the Committee, to conduct grower nominations, to verify shipments for assessment collections, and to prepare the annual report and the annual marketing policy, as required under the order. This proposal was unanimously recommended by the Committee at a meeting on March 17, 2011.
Section 920.12 of the order defines the Districts within the production area, and Section 920.20 provides, in part, that “* * * district representation on the committee shall be based upon the previous five-year average production in the district and shall be established so as to provide an equitable relationship between membership and districts.”
Section 920.22 of the order defines the nomination procedures, allowing for nominations to be conducted via mail, and provides that growers are eligible to
Section 920.34 of the order requires that the Committee prepare an annual report for presentation to the Secretary and the industry.” The annual report provides a cumulative review of industry statistics as well as information about program activities and expenditures.
Section 920.41 of the order provides authority to assess each person who first handles kiwifruit a pro rata share of the expenses which are reasonable and likely to be incurred by the Committee during a fiscal period.
Section 920.50 of the order requires the Committee to prepare an annual marketing policy for submission to the Secretary. The marketing policy describes expected kiwifruit production, quality, and marketing conditions. Along with other pertinent information, the marketing policy provides the basis for the recommendation of appropriate kiwifruit handling regulations for the upcoming season.
Section 920.60 of the order authorizes the Committee to require handlers to file reports and provide other information as may be necessary for the Committee to perform these duties.
Section 920.61 (Compliance) of the order provides that all handlers must conform to the provisions and regulations set forth in the order, and the Committee is to verify handler compliance with order provisions.
The Committee's current reporting requirements are specified in § 920.160 of the order's administrative rules and regulations. This section currently requires that handlers submit: (1) A report of shipment and inventory data which provides monthly data regarding the reporting period, name and identification of the shipper, and the number of containers by type and weight by shipment destination category of all kiwifruit; (2) a Kiwifruit Inventory Shipping System (KISS) form, which consists of three sections: KISS/Add Inventory, KISS/Deduct Inventory, and KISS/Shipment and which provides beginning inventory by size and container type, quantity of the fruit lost in repack or repacked into other container types, total domestic and export shipments by size and container type; and any other adjustments which increase or decrease handler inventory; (3) a Return Receipt of Kiwifruit to Grower Form which reports fruit returned by a handler to a grower(s); and (4) a KISS Price/Shipment report which contains handler information, reporting period, total fresh market shipments, and gross f.o.b. sales of non-organic kiwifruit by pack style and size.
Since 1984, the California Kiwifruit Commission (Commission) has collected end-of-season price, shipment, and grower information (grower entity/farm name, mailing address, location of farm by county, shipments by pack style, and acreage), on organic and non-organic kiwifruit via two Commission forms. The Commission has, through an agreement, shared this information with the Committee. The Committee previously used the majority of this information to determine appropriate grower representation on the Committee, to conduct grower nominations, to verify shipments for assessment collections, and to prepare the annual report and the annual marketing policy under the order.
The Commission will cease to exist as of September 30, 2011. Thus, the Committee would no longer have access to this previously shared information. As the current reporting requirements, under the order, make no provisions for collecting end-of-season information previously provided by the Commission, and as the Committee would need this information from all handlers, to include organic handlers, the Committee unanimously recommended adding these new reporting requirements and two new forms, the End-of-Season F.O.B. Sales Report and the Final Packout Report, to § 920.160 of the order's administrative rules and regulations.
Under the proposed change, § 920.160 would be revised by adding two new reporting requirements and two new forms, due by each handler (organic and non-organic) within 30 days after such handler has completed current season shipments. Kiwifruit shipments generally begin in September and continue through July. The information collected on the End-of-Season F.O.B. Sales Report would include data on gross f.o.b. sales value and number of containers for fresh market shipments by fruit size and pack style for the season. The information collected on the Final Packout Report would include containers shipped by pack style for fresh market shipments, for each grower entity during the season. The report would also include the grower entity and farm name, mailing address, the county where the farm is located, and total acreage. Both reports would also show the company name, contact person, and phone number of the handler. The information obtained from both of the two new reports would provide data to determine appropriate representation on the Committee, to conduct grower nominations, to verify shipments for assessment collections, and to prepare the annual report and annual marketing policy.
Section 8e of the Act provides that when certain domestically produced commodities, including kiwifruit, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements. This rule would only change the reporting requirements under the domestic handling regulations. No changes to the import regulations would be made.
Pursuant to requirements set forth in the Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
Small agricultural service firms are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $7,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000.
Based on Committee data, there are approximately 27 handlers of kiwifruit subject to regulation under the marketing order and approximately 176 kiwifruit growers in the production area.
The California Agricultural Statistical Service (CASS) reported total California kiwifruit production for the 2009-10 season at 26,000 tons with an average price of $1,470 per ton. Based on the average price, shipment, and grower information provided by the CASS and the Committee, it could be concluded that the majority of kiwifruit handlers would be considered small businesses under the SBA definition. In addition, based on kiwifruit production and price information, as well as the total number of California kiwifruit growers, the average annual grower revenue is less than $750,000. Thus, the majority of California kiwifruit producers may also be classified as small entities.
This proposed rule would revise § 920.160 by adding two new reporting requirements and two new forms, due
Requiring the price, shipment, and grower information at the end of the season would impose a minor increase in the reporting burden on all kiwifruit handlers. As this data was previously provided to the Commission and shared with the Committee, these two annual end-of-season reports would not significantly increase the handlers' record keeping burden because the primary source of data is already being recorded and maintained by handlers as a routine part of their daily business. The majority of handlers use computers to record their data, and this information can readily be accessed and summarized for these reports. Consequently, any additional costs associated with these changes are expected to be minimal. Also, the benefits of having consolidated end-of-season price, shipping, and grower data are expected to outweigh any costs associated with the increase in reporting burden. Further, the benefits of this rule are expected to be equally available to all industry members, regardless of their size. It is anticipated that the transmission of these reports from handlers to the Committee would be done by either e-mail or facsimile (Fax) machines.
The Committee discussed alternatives to this action, including making no changes to the reporting requirements, but determined that in order to carry out the objectives of the marketing order, the information collected contained within these two new reports would be necessary. Therefore, this alternative was rejected.
This proposal would establish two new reporting requirements and would also require two new Committee forms: the End-of-Season F.O.B. Sales Report and the Final Packout Report. Therefore, this proposed rule would impose a minor increase in the reporting burden equally on all handlers, which is discussed in the Paperwork Reduction Act section of this document.
As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.
AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
Further, the Committee's meetings were widely publicized throughout the kiwifruit industry and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the March 17, 2011, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
A 60-day comment period is provided for interested persons to comment on this proposal. All written comments timely received will be considered before a final determination is made on this matter.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), this notice announces that AMS is requesting approval from the Office of Management and Budget (OMB) for a new information collection request, under OMB No. 0581-NEW. Upon approval of this new collection by OMB, it will be merged with the forms currently approved for use under OMB No. 0581-0189, Generic OMB Fruit Crops.
On March 17, 2011, the Committee unanimously recommended an End-of-Season F.O.B. Sales Report and a Final Packout Report for all handlers to report end-of-season prices, shipment, and grower information. Information for these reports was previously collected by the Commission. This action concerns these reports, which would require the reports to be submitted to the Committee by handlers. Pursuant to § 920.60(c), handlers would maintain records for at least two succeeding fiscal years to verify the data reported to the Committee on these reports.
These forms would facilitate the collection of price, shipment, and grower information from all kiwifruit handlers and are titled End-of-Season F.O.B. Sales Report and Final Packout Report. The forms covered under this collection require the minimum information necessary to carry out the requirements of the order. The information collected would only be used by authorized representatives of the USDA, including AMS, Fruit and Vegetable Programs regional and headquarters staff, and authorized employees of the Committee. Authorized Committee employees would be the primary users of the information, and AMS would be the secondary user. The Committee's staff would compile the information collected from handlers and use it to determine grower representation on the Committee, to conduct grower nominations, to verify shipments for assessment collections, and to prepare its annual report and annual marketing policy, as required under the order. All proprietary handler information would be kept confidential in accordance with the Act and order.
The proposed request for a new information collection under the order is as follows:
Comments should reference OMB No. 0581-New and the Marketing Order for Kiwifruit Grown in California, and should be sent to the USDA in care of the Docket Clerk at the previously-mentioned address or at
All responses to this notice will be summarized and included in the request for OMB approval. All comments received will become a matter of public record and will be available for public inspection during regular business hours at the address of the Docket Clerk or at
Upon publication of the final rule, this collection will be merged with the forms currently approved for use under OMB No. 0581-0189 “Generic OMB Fruit Crops.”
Kiwifruit, Marketing agreements, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 920 is proposed to be amended as follows:
1. The authority citation for 7 CFR part 920 continues to read as follows:
7 U.S.C. 601-674.
2. § 920.160 is amended by adding paragraphs (f) and (g) to read as follows:
(f) Each handler shall file annually with the Committee an End-of-Season F.O.B. Sales Report, due within 30 days after such handler has completed current season shipments, reporting gross f.o.b. sales value and number of containers by pack style and size for fresh market shipments for the season. The report shall also show the company name, contact person, and phone number of the handler.
(g) Each handler shall file annually with the Committee a Final Packout Report, due within 30 days after such handler has completed current season shipments, reporting total containers shipped, by pack style for fresh market shipments, for each grower entity during the season. The report shall also include the grower entity and farm name, mailing address, the county in which the farm is located, and total acreage for each reported grower entity. Also, the report shall show the company name, contact person, and phone number of the handler.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of Proposed Rulemaking (NOPR).
This document clarifies the compliance date by which manufacturers must begin to use portions of a recently promulgated test procedure (i.e., the April 15, 2011 final rule) when certifying walk-in coolers and walk-in freezers. This document also proposes regulatory text changes to reflect U.S. Department of Energy's (DOE) intent that only manufacturers of components of walk-in coolers and walk-in freezers are required to submit certification reports. Additionally, the NOPR proposes clarifications as to the types of test data needed to support the certification of compliance per DOE's existing test procedures for walk-in coolers and walk-in freezers and the recently promulgated test procedure for this equipment. Finally, this document proposes to extend the compliance date for certification of metal halide lamp ballasts and fixtures.
DOE will accept comments, data, and information regarding the notice of proposed rulemaking (NOPR) postmarked no later than August 30, 2011. See section III, “Public Participation,” for details.
Any comments submitted must identify the NOPR for walk-in coolers and walk-in freezers and metal halide lamp ballasts and fixtures by providing the docket number EERE-2011-BT-CE-0050 and/or RIN number 1904-AC58. Comments may be submitted using any of the following methods:
•
•
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Ms. Ashley Armstrong, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121.
In the Office of the General Counsel, contact Ms. Laura Barhydt, U.S. Department of Energy, Office of the General Counsel, GC-32, 1000 Independence Avenue, SW., Washington, DC 20585-0121.
The Energy Policy and Conservation Act (EPCA), as amended by section 312(c) of the Energy Independence and Security Act (EISA 2007), requires the DOE to prescribe a test procedure to measure the energy use of walk-in coolers and freezers (collectively, walk-ins). See 42 U.S.C. 6314(a). DOE recently satisfied this requirement by issuing a final rule establishing a test procedure for manufacturers to use when measuring the energy use or energy efficiency of certain walk-in components: panels, non-display doors, display doors, and refrigeration systems. See 76 FR 21580 (April 15, 2011) (final rule prescribing walk-in test procedures) and 76 FR 33631 (June 9, 2011) (notice containing corrected formulas).
Since the publication of that rulemaking, DOE recognized a need to clarify the date by which manufacturers must begin using the test procedure. The
DOE is publishing this notice to address questions from walk-in manufacturers regarding how to comply with their certification requirements under 10 CFR part 429, subpart B and Appendix A, which collectively prescribe the process for manufacturers to follow when certifying their commercial equipment as compliant under the relevant energy conservation standards. DOE recently indicated that walk-in manufacturers must comply with these requirements starting on October 1, 2011. 76 FR 38287, 38292 (June 30, 2011). EPCA, through amendments established by the Energy Independence and Security Act of 2007, Pub. L. 140-110 (Dec. 19, 2007) (EISA 2007), specified a test procedure that must be followed when determining the insulation value of the insulating foam used in walk-in applications, and manufacturers have raised questions as to whether they should continue using these procedures when certifying their equipment or use the new procedures that DOE promulgated in April 2011.
EISA 2007 prescribed several design requirements for walk-ins and specified that the R value (a representation of the thermal insulating characteristics of insulating foam) shall be the 1/K factor multiplied by the thickness of the panel, and the K factor shall be based on ASTM test procedure C518-2004. EPCA also prescribed certain temperature conditions for calculating the R value. (42 U.S.C. 6314(a)(9)(A)) Since 2009, these design requirements and test procedure provisions currently apply to all newly manufactured walk-ins. See 42 U.S.C. 6314(a)(9). See also 10 CFR Part 431.306(a)-(b) and 10 CFR 304(b)(1)-(4).
In addition to the above provisions, EPCA requires that DOE issue a test procedure for walk-ins. See 42 U.S.C. 6314(a)(9)(b). As noted above, DOE complied with that requirement by publishing a final rule prescribing a test procedure that covers the various key components comprising a walk-in. See 76 FR 21580 and 76 FR 33631.
Although the April 2011 test procedure continues to remain effective under today's proposal, the procedure prescribed by the EISA 2007 amendments must continue to be used by manufacturers for certification purposes. At this time, the statutorily-prescribed procedure for determining an R value must also continue to be used when making representations regarding the energy-related performance of the relevant walk-in components. To the extent that a manufacturer chooses to make representations regarding the energy-related performance of the relevant walk-in components beyond the R-value of the foam used in panels, the April 2011 test procedure must be used for those representations. Once energy conservation standards that are performance based are established in 2012 for walk-in equipment, manufacturers must exclusively use the April 2011 test procedure when certifying their components as well as when making representations regarding that equipment's energy-related performance.
To clarify walk-in manufacturer responsibilities, DOE is proposing to add regulatory text to specify when the current and new test procedures must be used. DOE is also proposing additional language to clarify when tests must be performed on walk-in panels and when tests may be performed on insulation foam used in the construction of panels, but that has not yet been incorporated into a walk-in panel. DOE invites comment on its proposed resolution to this issue. Finally, DOE is also clarifying that manufacturers are not and will not be required to test non-foam members and/or edge regions using the ASTM C518 test procedure prescribed in EPCA. Non-foam members and edge regions are only considered in the U-factor testing using ASTM C1363, which is part of the new DOE test procedures.
In addition, DOE's recent certification, compliance and enforcement rulemaking indicated that only manufacturers of walk-in cooler and freezer components are required to submit certification reports. 76 FR 38287, 38292 (June 30, 2011). As such, DOE is proposing to add regulatory text to clarify that the WICF component manufacturers are the entities responsible for certifying compliance to the Department.
Finally, DOE's recent certification, compliance and enforcement rulemaking extended the compliance dates for certification of several types of commercial equipment. 76 FR 38287, 38292. Specifically, DOE extended the certification compliance date for manufacturers of metal halide lamp fixtures to October 1, 2011. Since the issuance of the final rule, additional information has come to the attention of the DOE regarding a lack of sufficient
DOE will accept comments, data, and information regarding this proposed rule no later than the date provided in the
The regulations.gov web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you include it in the comment itself or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Otherwise, persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.
Do not submit to
DOE processes submissions made through regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that
Comments and documents submitted via email, hand delivery, or mail also will be posted to
Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery/courier, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, that are written in English, and that are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.
Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.
According to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery/courier two well-marked copies: One copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).
This proposed rule has been determined not to be a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, this action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).
The Regulatory Flexibility Act (5 U.S.C. 601
DOE reviewed this proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. This proposed rule would merely extend the compliance date of a rulemaking already promulgated. To the extent such action has any economic impact it would be positive in that it would allow regulated parties additional time to come into compliance. DOE did undertake a full regulatory flexibility analysis of the original test procedures rulemaking. That analysis considered the impacts of that rulemaking on small entities. As a result, DOE certifies that, if adopted, this proposed rule, which would clarify the application of the test procedures, would not have a significant economic impact on a substantial number of small entities.
DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
The Secretary of Energy has approved publication of today's NOPR.
Energy conservation, Household appliances, Reporting and recordkeeping requirements.
Administrative practice and procedure, Energy conservation, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, DOE proposes to amend parts 429 and 431 of chapter II of title 10 of the Code of Federal Regulations to read as follows:
1. The authority citation for Part 429 continues to read as follows:
42 U.S.C. 6291-6317.
2. Revise § 429.12(i)(6) to read as follows:
(i) * * *
(6) Metal halide lamp ballasts and fixtures, [insert date 1 year after date of publication of the final rule in the
3. Revise § 429.53(b) to read as follows:
(b)
(2) Pursuant to § 429.12(b)(13), a certification report shall include the following public product-specific information:
(i) For WICF doors: The door type, R-value of the door insulation, and a declaration that the manufacturer has incorporated the applicable design requirements. In addition, for those WICFs with transparent reach-in doors and windows: The glass type of the doors and windows (e.g., double-pane with heat reflective treatment, triple-pane glass with gas fill), and the power draw of the antisweat heater in watts.
(ii) For WICF panels: The R-value of the insulation (except for glazed portions of the doors or structural members).
(iii) For WICF fan motors: The motor purpose (i.e., evaporator fan motor or condenser fan motor), the horsepower, and a declaration that the manufacturer has incorporated the applicable design requirements.
(iv) For WICF lighting: The efficacy of the lighting including ballast losses, and a declaration that the manufacturer has incorporated the applicable design requirements.
4. The authority citation for part 431 continues to read as follows:
42 U.S.C. 6291-6317.
5. Section 431.304 is amended by:
a. Redesignating paragraph (b) as paragraph (c) and adding a new paragraph (b); and
b. Adding in newly redesignated paragraph (c), new introductory text prior to paragraph (c)(1); and adding a new sentence at the end of paragraph (c)(5). The additions read as follows:
(b)
(1) The R value shall be the 1/K factor multiplied by the thickness of the panel.
(2) The K factor shall be based on ASTM C518 (incorporated by reference; see § 431.303).
(3) For calculating the R value for freezers, the K factor of the foam at 20 degrees Fahrenheit (average foam temperature) shall be used.
(4) For calculating the R value for coolers, the K factor of the foam at 55 degrees Fahrenheit (average foam temperature) shall be used.
(5) Foam shall be tested after it is produced in its final chemical form. Foam produced inside of a panel (“foam-in-place”) must be tested in its final foamed state and must not include any structural members or non-foam materials other than the panel's protective skins or facers. A test sample less than or equal to 4 inches thick must be taken from the center of the foam-in-place panels. Foam produced as board stock may be tested prior to its incorporation into a final panel.
(6) Manufacturers are not required to consider non-foam member and/or edge regions in ASTM C518 testing.
(c)
(5) * * * Testing must be performed on a completed panel; foam may not be used for the test sample.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for the products listed above. This proposed AD would require inspecting certain serial number (S/N) first stage turbine disks, part number (P/N) 3101520-1 and P/N 3107079-1. This proposed AD was prompted by a report of an uncontained failure of a first stage turbine disk that had a metallurgical defect. We are proposing this AD to prevent uncontained failure of the first stage turbine disk and damage to the airplane.
We must receive comments on this proposed AD by September 23, 2011.
You may send comments by any of the following methods:
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For service information identified in this proposed AD, contact Honeywell International Inc., 111 S. 34th Street, Phoenix, AZ 85034-2802;
You may examine the AD docket on the Internet at
Joseph Costa, Aerospace Engineer, Los Angles Aircraft Certification Office, FAA, Transport Airplane Directorate, 3960 Paramount Blvd., Lakewood, CA 90712-4137;
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
In May 2008, we received a report of an uncontained separation of a first stage turbine disk, P/N 3107079-1. The disk was installed in a TPE331-11U turboprop engine. That disk, which has a 20,000-cycle life, failed after accumulating 8,314 cycles-in-service. The fracture revealed a large melt-related oxide cluster inclusion in the web area of the disk, which occurred during the forging alloy melting process. The disk was produced from Waspaloy material, from Heat Lot 9-7121, which was melted by Special Metals in 1980. We have determined that approximately 360 turbine disks were produced from the same heat lot as the failed forged turbine disk and therefore may have similar inclusions. This condition, if not corrected, could result in uncontained failure of the first stage turbine disks made from these billets and damage to the airplane.
We reviewed Honeywell International Inc. Alert Service Bulletin (ASB) TPE331-72-A2156, dated December 2, 2008. The Honeywell ASB TPE331-72-A2156, dated December 2, 2008, provides S/Ns of the affected turbine disks and describes procedures for initial and repetitive fluorescent penetrant inspection (FPI) and eddy current inspection (ECI) of the first stage turbine disk.
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require:
• For turbine disks that have an S/N listed in Table 1 of this proposed AD with 4,100 or fewer cycles-since-new (CSN) on the effective date of this proposed AD, performing an initial FPI and ECI within 4,500 CSN or at the next access, whichever occurs first.
• For turbine disks that have an S/N listed in Table 1 of this proposed AD with more than 4,100 CSN on the effective date of this proposed AD, performing an initial FPI and ECI within 400 cycles-in-service after the effective date of this proposed AD or at the next access, whichever occurs first.
• Thereafter, for turbine disks that have an S/N listed in Table 1 of this proposed AD, perform a repetitive FPI and ECI at each scheduled hot section inspection, but not to exceed 3,600 hours-since-last inspection.
The proposed AD would require that you do these actions using the service information described previously.
We estimate that this proposed AD would affect 90 engines installed on airplanes of U.S. registry. We also estimate that it would take about 20 work-hours per engine to perform the proposed actions, and that the average labor rate is $85 per work-hour. Required parts would cost about $19,000 per engine. We estimate that one disk would fail the initial inspection and that repetitive inspections would be performed on 89 engines. We estimate that one engine would fail the repetitive inspections and that further repetitive inspections would be performed on 88 engines. We estimate that an additional one disk would fail those repetitive inspections before retirement. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators to be $511,155.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, part A, subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD):
(a) We must receive comments by September 23, 2011.
(b) None.
(c) Honeywell International Inc. TPE331-10, -10AV, -10GP, -10GT, -10N, -10P, -10R, -10T, -10U, -10UA, -10UF, -10UG, -10UGR, -10UR, and TPE331-11U model turboprop engines with a first stage turbine disk, part number (P/N) 3101520-1 or 3107079-1, with a serial number (S/N) listed in Table 2 of Honeywell International Inc. Alert Service Bulletin (ASB) TPE331-72-A2156, dated December 2, 2008, installed.
(d) This AD was prompted by a report of an uncontained failure of a first stage turbine disk that had a metallurgical defect. We are issuing this AD to prevent uncontained failure of the first stage turbine disk and damage to the airplane.
(e) Comply with this AD within the compliance times specified, unless already done.
(f) For first stage turbine disks, P/N 3101520-1 or 3107079-1, that have an S/N listed in Table 2 of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008, inspect the disks as follows:
(1) For turbine disks with 4,100 or fewer cycles-since-new (CSN) on the effective date of this proposed AD, perform an initial fluorescent penetrant inspection (FPI) by using paragraph 3.B.(2) through 3.B.(5) of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008, within 4,500 CSN or at the next access, whichever occurs first.
(2) For turbine disks with more than 4,100 CSN on the effective date of this proposed AD, perform an initial FPI by using paragraph 3.B.(2) through 3.B.(5) of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008, within 400 cycles-in-service (CIS) after the effective date of this proposed AD or at the next access, whichever occurs first.
(3) If the disk passes the FPI inspection, perform a special eddy current inspection (ECI) by using paragraph 3.B.(6) of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008, before returning the disk to service.
(g) If you find a crack in the disk, remove the disk from service.
(h) Thereafter, for first stage turbine disks, P/N 3101520-1 or 3107079-1, that have an S/N listed in Table 2 of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008, inspect the disks as follows:
(1) Perform a repetitive inspection at each scheduled hot section inspection, but not to exceed 3,600 hours-since-last inspection. Use paragraph 3.B.(2) through 3.B.(5) of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008.
(2) If the disk passes the FPI inspection, perform a special ECI by using paragraph 3.B.(6) of Honeywell International Inc. ASB TPE331-72-A2156, dated December 2, 2008, before returning the disk to service.
(i) If you find a crack in the disk, remove the disk from service.
(j) For the purpose of this AD, “next access to the first stage turbine disk” is defined as the removal of the second stage turbine nozzle from the turbine stator housing.
(k) The Manager, Los Angles Aircraft Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.
(l) For more information about this AD, contact Joseph Costa, Aerospace Engineer, Los Angeles Aircraft Certification Office, FAA, Transport Airplane Directorate, 3960 Paramount Blvd., Lakewood, CA 90712-4137;
(m) For service information identified in this AD, contact Honeywell International Inc., 111 S. 34th Street, Phoenix, AZ 85034-2802;
Food and Drug Administration, HHS.
Notice of petition.
The Food and Drug Administration (FDA) is announcing that Lanxess Corp. has filed a petition proposing that the food additive regulations be amended to provide for the safe use of calcium formate in poultry and swine feed as a nutrient and digestive aid.
Submit either electronic or written comments on the petitioner's environmental assessment by September 8, 2011.
Submit electronic comments to:
Isabel W. Pocurull, Center for Veterinary Medicine, Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-453-6853, e-mail:
Under the Federal Food, Drug, and Cosmetic Act (section 409(b)(5) (21 U.S.C. 348(b)(5)), notice is given that a food additive petition (FAP 2261) has been filed by Lanxess Corp. (Lanxess), 111 RIDC Park West Dr., Pittsburgh, PA 15275-1112. The petition proposes to amend the food additive regulations in part 573
The potential environmental impact of this action is being reviewed. To encourage public participation consistent with regulations issued under the National Environmental Policy Act (40 CFR 1501.4(b)), the Agency is placing the environmental assessment submitted with the petition that is the subject of this notice on public display at the Division of Dockets Management (see
Interested persons may submit to the Division of Dockets Management (see
Coast Guard, DHS.
Notice of proposed rulemaking.
Based on a review of safety and security zones around critical infrastructure in the Chicago area, the Captain of the Port Sector Lake Michigan has determined that to better protect such infrastructure, while also mitigating burdens on waterway users, it is necessary to amend these security zones in our regulations. Specifically, the Coast Guard proposes to reduce the size of an existing security zone, disestablish another security zone, and create three new security zones.
Comments and related materials must reach the Coast Guard on or before September 8, 2011.
You may submit comments identified by Coast Guard docket number USCG-2011-0489 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods:
(1)
(2)
(3)
(4)
If you have questions on this proposed rule, call MST1 Brenden Otjen Coast Guard Marine Safety Unit, Willowbrook, IL at (630) 986-2155. If you have questions on viewing or submitting material to the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone 202-366-9826.
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to
If you submit a comment, please include the docket number for this rulemaking (USCG-2011-0489), indicate the specific section of this document to which each comment
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
We do not now plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under
The Coast Guard recently worked with local governmental agencies to review the safety and security zones around critical infrastructure in the Chicago area. Based on this review, the Captain of the Port Sector Lake Michigan had determined that to better protect critical infrastructure while also mitigating burdens on waterway users it is necessary to reduce the size of an existing security zone, disestablish an existing security zone, and establish three new security zones.
For the reasons discussed in the preceding paragraph, the Captain of the Port Sector Lake Michigan proposes to amend 33 CFR 165.904 and 910. Specifically, this proposed rule would reduce the size of the safety and security zone entitled Lake Michigan at Chicago Harbor & Burnham Park Harbor-Safety and Security Zone, which is located at 33 CFR 165.904. The revised zone will be significantly reduced in size due to the disestablishment of Meigs Airfield and the need to secure only Burnham Park harbor during high profile visits that require security zone enforcement. This proposed reduction of the Chicago Harbor & Burnham Park Harbor-Safety and Security Zone would result in the zone encompassing all U.S. navigable waters of Lake Michigan within Burnham Park Harbor shoreward of a line across the entrance of the harbor connecting coordinates 41°51′09″ N, 87°36′36″ W and 41°51′11″ N, 87°36′22″ W.
In addition to reducing the size of the security zone described in § 165.904(a), this proposed rule would also disestablish a security zone. Specifically, this proposed rule would disestablish the security zone in 33 CFR 165.910(a)(1) entitled Security Zones; Captain of the Port Lake Michigan; Navy Pier Northside.
Finally, this proposed rule would establish three new security zones in 33 CFR 165.910. The first new security zone would be located in the vicinity of the Jardine Water Treatment Plant, Chicago, Illinois. The Jardine Water Filtration Plant security zone would encompass all U.S. navigable waters of Lake Michigan within an arc of a 100-yard radius with its center located on the approximate position 41°53′46″ N, 87°36′23″ W.
The second new security zone would be located in the vicinity of the Wilson Avenue Crib, Chicago, Illinois. It would encompass all U.S. navigable waters of Lake Michigan within the arc of a circle with a 100-yard radius with its center in approximate position 41°58′00″ N, 87°35′30″ W.
The third new security zone would be located in the vicinity of the new Four Mile Intake Crib in Chicago, Illinois. It would encompass all U.S. navigable waters of Lake Michigan within the arc of a circle with a 100-yard radius with its center in approximate position 41°52′40″ N, 87°32′45″ W.
In accordance with 33 CFR 165.33, no person or vessel would be able to enter or remain in one of the security zones discussed in this proposed rule without permission of the Captain of the Port Sector Lake Michigan. The Captain of the Port Sector Lake Michigan, at his or her discretion, may permit persons and vessels to enter the security zones addressed in this proposed rule. For instance, the Captain of the Port Sector Lake Michigan may permit those U.S. Coast Guard certificated passenger vessels that normally load and unload passengers at the north side of Navy Pier to operate in the Jardine Water Filtration Plant security zone.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. We conclude that this proposed rule is not a significant regulatory action because we anticipate that it would have minimal impact on the economy, would not interfere with other agencies, would not adversely alter the budget of any grant or loan recipients, and would not raise any novel legal or policy issues. The security zones amended and established by this proposed rule would be relatively small and enforced for relatively short time. Also, each security zone is designed to minimize its impact on navigable waters. Furthermore, each security zone has been designed to allow vessels to transit unrestricted to portions of the waterways not affected by the security zones. Thus, restrictions on vessel movements within that particular area are expected to be minimal. Under certain conditions, moreover, vessels may still transit through each security zone when permitted by the Captain of the Port,
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. This proposed rule would affect the following entities, some of which might be small entities: the owners and operators of vessels intending to transit or anchor in the security zones addressed in this proposed rule. These security zones would not have a significant economic impact on a substantial number of small entities for the following reasons: the security zones in this proposed rule would be in small areas surrounding the intake cribs or areas near shore to Chicago's water filtration plants; the security zones have been designed to allow traffic to pass safely around these zones whenever possible.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If this proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the Waterways Management Department, Coast Guard Marine Safety Unit Chicago, Willowbrook, IL at (630) 986-2155. The Coast Guard will not retaliate against small entities that question or object to this rule or any policy or action of the Coast Guard.
This proposed rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this proposed rule under that Order and have determined that it does not have implications for federalism.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble.
This proposed rule would not affect the taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This proposed rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is not likely to have a significant effect on the human environment. This proposed rule involves the establishing, disestablishing, and changing of security zones and therefore, is categorically excluded under paragraph 34(g) of the Instruction. A preliminary environmental analysis check list supporting this preliminary
Harbors, Marine safety, Navigation (water), Reporting and record keeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR Part 165 as follows:
1. The authority citation for part 165 continues to read as follows:
33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Public Law 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
2. Amend § 165.904 by revising paragraph (a) to read as follows:
(a)
3. In § 165.910, revise paragraph (a)(1),(a)(1)(i) and add paragraphs (a)(10) and (a)(11) to read as follows:
(a) * * *
(1)
(i) Location. All waters of Lake Michigan within the arc of a 100-yard radius with its center located on the north wall of Jardine Water Filtration Plant, approximate position 41°53′46″ N, 87°36′23″ W; (NAD 83)
(10) Wilson Avenue Intake Crib. All waters of Lake Michigan within the arc of a circle with a 100-yard radius of the Wilson Avenue Crib with its center in approximate position 41°58′00″ N, 87°35′30″ W. (NAD 83)
(11) Four Mile Intake Crib. All waters of Lake Michigan within the arc of a circle with a 100-yard radius of the Four Mile Crib with its center in approximate position 41°52′40″ N, 87°32′45″ W. (NAD 83)
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve, under the Clean Air Act (CAA), revisions to the Ohio State Implementation Plan (SIP) submitted on January 3, 2008 and June 1, 2011. These revisions incorporate provisions related to the implementation of nitrogen oxides (NO
Comments must be received on or before September 8, 2011.
Submit your comments, identified by Docket ID No. EPA-R05-OAR-2008-0032, by one of the following methods:
•
•
•
•
•
If you send an e-mail comment directly to EPA without going through
Publicly available docket materials are available either electronically in
Steven Rosenthal, Environmental Engineer, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-6052,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:
1. Identify the rulemaking by docket number and other identifying information (subject heading,
2. Follow directions—EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
4. Describe any assumptions and provide any technical information and/or data that you used.
5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
6. Provide specific examples to illustrate your concerns, and suggest alternatives.
7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
8. Make sure to submit your comments by the comment period deadline identified.
EPA is proposing to approve Ohio's new rule for the control of NO
The CAA amendments of 1990 introduced the requirement for existing major (100 tons per year in moderate nonattainment areas) stationary sources of NO
On March 17, 2009, Ohio submitted a request for a waiver from the section 182(f) NO
These NO
This section contains definitions that are necessary and appropriate for the remainder of Ohio's NO
This rule identifies the categories of NO
This chapter contains control requirements for industrial boilers, stationary combustion turbines, and stationary internal combustion engines. The emission limits contained in this chapter for industrial boilers (provided below), stationary combustion turbines, and stationary internal combustion engines are consistent with EPA guidance (generally requiring combustion controls) and other state RACT evaluations.
(A) Small boilers.
The owner or operator of a small boiler must annually perform a tune-up and maintain, in a permanently bound log book, or other format approved in writing by the Director of Ohio EPA, the following information:
a) The date of the last tune-up;
b) The name, title and affiliation of the person who performed the tune-up and made any adjustments; and
c) Any other information which the Ohio environmental protection agency may require as a condition of approval of any permit for the boiler.
(B) Mid-size, large and very large boilers.
Except as otherwise provided in paragraphs (I) and (J) of this rule, on and after the compliance deadline specified by rule 3745-110-04 of the Administrative Code, no owner or operator of a mid-size, large, or very large boiler shall allow or permit the discharge into the ambient air of any NO
This rule does not contain control requirements for electric generating units (EGUs). EPA's Cross-State Air Pollution Rule provides statewide, not unit specific, limits for EGUs. This rulemaking does not address whether unit specific limits are needed to satisfy RACT.
Ohio's rule allows an emission averaging program in lieu of the applicable emission limits for industrial boilers, stationary combustion turbines, and stationary internal combustion engines. However, Ohio's rule states that an emission averaging program shall not be Federally enforceable until EPA approves the program as part of the Ohio SIP. Any such averaging program would therefore have to be consistent with “Improving Air Quality with Economic Incentive Programs, EPA-452/R-01-001, January 2001.” Ohio's submittal includes no such averaging programs. EPA will review any such programs if and when submitted by Ohio.
This chapter also requires site-specific RACT evaluations (or RACT studies) for any applicable source that is not an industrial boiler, stationary combustion turbine, or stationary internal combustion engines. Site-specific RACT evaluations are also allowed for industrial boilers, stationary combustion turbines, and stationary internal combustion engines if the owner or operator claims that the applicable limit is economically unreasonable and/or technically infeasible. These RACT studies consist of a detailed engineering study to determine the technical and economic feasibility of reducing the NO
This chapter contains site-specific RACT requirements for four sources. Compliance for all of these sources is required by the effective date of the rule, which is May 12, 2011. These sources are:
(1)
This facility has two mid-sized natural gas fired boilers, with low NO
(2)
ArcelorMittal has 12 emission units located at its facility which are not one of the specific source types with specified limits. A 0.35 lb/mmBTU limit for the three reheat furnaces at its Hot Strip Mill is based upon the installation of 240 low NO
(3)
Republic Engineered products has 2 reheat furnaces at its facility which are not one of the specific source types with specified limits. These furnaces use low NO
(4)
United States Steel Lorain Tubular Operations has several furnaces at its facility which are not one of the specific source types with specified limits. Emissions Units P003, P0037 and P040 are subject to limits of 0.068 lb/mmBTU, 0.15 lb/mmBTU and 0.15 lb/mmBTU. These limits are based upon the continued use of low NO
The emission limits specified in this rule are based upon either of the following:
(1) The average of three one-hour stack test runs if stack testing is used to demonstrate compliance; or
(2) A twenty-four-hour input-weighted average if a continuous emissions monitor is used to demonstrate compliance.
The effective date of this chapter is December 22, 2007. For facilities that have not conducted a RACT study, compliance is required by December 22, 2009, if combustion modifications are required to achieve compliance with the limits in 3745-21-03 or December 22, 2010, if add-on controls are required to demonstrate compliance.
For facilities conducting a RACT study, compliance is required by two years after approval by the Director of Ohio EPA if combustion modifications are required to demonstrate compliance. Compliance is required by three years after approval by the Director if add-on controls are needed to demonstrate compliance. The four facilities identified in the discussion of rule 3745-110-03, and for which RACT studies have been approved, were required to have achieved compliance by May 2, 2011.
The general emission limits for industrial boilers, stationary combustion turbines, and stationary internal combustion engines represent RACT. In addition, the limits for the four facilities resulting from RACT studies can reasonably be considered to represent RACT under the specified circumstances. It should be noted that there are other facilities for which RACT studies are being developed that are not currently complying with NO
EPA's November 29, 2005, “Final Rule To Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 2” (70 FR 71612) required that compliance be achieved by March 2009. Rule 3745-110-04 provides for compliance dates after March 2009, but the compliance date has now passed for all sources that are subject to the NO
This rule requires that a source which is subject to the requirements of rule 3745-110-03 demonstrate compliance with the applicable emission limits by performing emission tests in accordance with EPA Method 7, 7A, 7C, 7D, or 7E, and any additional approved EPA methods as applicable.
Any continuous emissions monitoring system for NO
These are the appropriate EPA approved methods for establishing compliance.
These rules are not required because, as established in section 182(f) of the CAA, NO
As indicated above, these rules do not apply to EGUs. In addition, there are other otherwise applicable sources that are not subject to these rules because their RACT studies have not as yet been approved. Finally, compliance deadlines for some sources are later than the March 2009, deadline that was established in EPA's phase 2 guidance for areas required to adopt RACT rules pursuant to the 1997 8-hour ozone standard. However, EPA is satisfied that the limits for sources covered in Ohio's rule are RACT-level limits, and EPA finds the compliance dates acceptable given that the RACT requirements (and associated compliance deadline requirements) do not apply and given that in any case all sources are now required to be in compliance.
These rules are therefore being proposed for approval because they provide additional NO
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and
National Highway Traffic Safety Administration (NHTSA), and Environmental Protection Agency (EPA).
Supplemental Notice of Intent.
President Obama issued a Presidential Memorandum on May 21, 2010, concerning the development of a new generation of clean cars and trucks through innovative technologies and manufacturing. The President requested that EPA and NHTSA, on behalf of the Department of Transportation, develop, through notice and comment rulemaking, a coordinated National Program under the Clean Air Act (CAA) and the Energy Policy and Conservation Act (EPCA), as amended by the Energy Independence and Security Act (EISA), to reduce fuel consumption by and greenhouse gas emissions of light-duty vehicles for model years 2017-2025.
This notice of intent generally describes the joint proposal that the EPA and NHTSA expect to issue to establish the National Program for model years 2017-2025. The agencies are developing the proposal based on extensive technical analyses, an examination of the factors required under the respective statutes and on discussions with individual motor vehicle manufacturers and other stakeholders. The National Program would apply to passenger cars, light-duty trucks, and medium-duty passenger vehicles (light-duty vehicles) built in those model years.
The agencies currently expect to issue a proposal for a coordinated National Program for model year 2017-2025 light-duty vehicles by September 28, 2011, and a final rule by July 31, 2012.
NHTSA and EPA have established dockets for the already issued notices and upcoming rulemaking under Docket ID numbers NHTSA-2010-0131 and EPA-HQ-OAR-2010-0799, respectively. You may read the materials placed in the dockets (
You may also read the materials at the EPA Docket Center or NHTSA Docket Management Facility at the following locations:
The dockets established by the agencies will remain open for the duration of the rulemaking.
Following the successful adoption of a National Program for greenhouse gas emissions (GHG) and fuel economy standards for model years (MY) 2012-2016 vehicles, the President issued a Memorandum on May 21, 2010 requesting that the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), on behalf of the Department of Transportation, work together to develop a national program for model years 2017-2025. Specifically, he requested that the agencies develop
Since that time, the agencies have worked with the state of California, as requested by the President, to address all elements requested in the May 21, 2010 memorandum. We completed an initial assessment of the technologies, strategies and underlying analyses that would be considered in setting standards for MYs 2017-2025 in consultation with a wide range of stakeholders.
Since the publication of the SNOI in December 2010, the agencies, working with California, have been engaged in discussions with individual auto manufacturers, automotive suppliers, states, environmental groups, and the United Auto Workers, who all have expressed support for a continuation of the National Program. The agencies have focused their discussions and efforts on developing information that will support the underlying technical assessments that will inform the proposed standards.
This joint Notice of Intent announces plans by NHTSA and EPA to propose strong and coordinated Federal greenhouse gas and fuel economy standards for passenger cars, light-duty trucks, and medium-duty passenger vehicles (hereafter light-duty vehicles), referred to as the National Program.
Under the joint rulemaking, EPA will propose GHG emissions standards under the Clean Air Act (CAA), and NHTSA will propose Corporate Average Fuel Economy (CAFE) standards under EPCA, as amended by the Energy Independence and Security Act of 2007 (EISA). It is intended that this joint rulemaking proposal will reflect a carefully coordinated and harmonized approach to implementing these two statutes and will be in accordance with all substantive and procedural requirements imposed by law.
The program the agencies intend to propose holds out the promise of development of a new generation of clean cars and trucks through innovative technologies and manufacturing that will spur economic growth and create high-quality domestic jobs, enhance our energy security, and improve our environment. Consistent with Executive Order 13563, it is the result of early consultation with all stakeholders, employs flexible regulatory approaches to reduce burdens, maintains freedom of choice for the public, and harmonizes federal and state regulations.
The National Program would apply to passenger cars, light-duty trucks, and medium-duty passenger vehicles (light-duty vehicles) built in those model years. Together, these vehicle categories, which include passenger cars, sport utility vehicles, minivans, and pickup trucks, are responsible for approximately 60 percent of all U.S. transportation-related greenhouse gas emissions and fuel consumption. If ultimately adopted, these standards would represent a harmonized and consistent National Program pursuant to the separate statutory frameworks under which NHTSA and EPA operate. The approach addressed in this Notice of Intent, if ultimately adopted, is intended to allow manufacturers to build a single light-duty national fleet that would satisfy all requirements under both programs and would provide significant reductions in both greenhouse gas emissions and oil consumption.
EPA and NHTSA's current estimate is that the standards discussed in this Notice of Intent would reduce greenhouse gases by approximately 2 billion metric tons and would save approximately 4 billion barrels of oil, over the lifetime of the model year 2017-2025 vehicles.
Key elements of a harmonized and coordinated National Program that the agencies intend to propose are the level and form of the standard, the available flexibilities and compliance mechanisms, and general implementation elements. These elements are outlined in the following sections. The agencies will continue to analyze all of the issues relevant to the proposal, and will provide their analyses for review and public comment with the upcoming proposal. This will include analyses on a variety of relevant issues, such as the costs and benefits of the proposal, as well as the effects that the proposal would have on the economy, manufacturers, and consumers. The proposal that the agencies intend to issue will discuss both the analyses that will be completed for the proposal as well as any plans for conducting additional analyses.
Consistent with the Presidential Memorandum of May 21, 2010, EPA and NHTSA intend to propose two separate sets of standards for model years 2017 through 2025, each under their respective statutory authorities. Both the proposed CO
EPA currently intends to propose standards that would be projected to achieve, on an average industry fleet wide basis, 163 grams/mile of CO
NHTSA currently intends to propose standards that would be projected to require, on an average industry fleet wide basis, 40.9 mpg in model year 2021, and 49.6 mpg in model year 2025. For passenger cars, the annual increase in stringency between model years 2017 to 2021 is expected to average 4.1 percent, and to average 4.3 percent between model years 2017 and 2025. Like EPA, in recognition of the utility requirements of full-size pick-up trucks and the unique challenges to improving fuel economy compared to other light-duty trucks and passenger cars, NHTSA intends to propose a lower annual rate of improvement for light-duty trucks in the early years of the program. For light-duty trucks, the proposed overall annual
The coefficients and industry-wide curves that NHTSA and EPA intend to propose are included as Appendix B.
The agencies believe that the standards discussed above could be met with improvements in conventional gasoline and hybrid vehicle technologies and an increased market share of more advanced technologies including electric vehicles and plug-in hybrid electric vehicles.
Given the long time frame at issue in setting standards for MY2022-2025 light-duty vehicles, and given NHTSA's obligation to conduct a separate rulemaking in order to establish final standards for vehicles for those model years, EPA and NHTSA intend to propose a comprehensive mid-term evaluation and agency decision-making as described in Appendix A to this Notice of Intent. Up to date information will be developed and compiled for the evaluation, through a collaborative, robust and transparent process, including public notice and comment. The evaluation will be based on (1) A holistic assessment of all of the factors considered by the agencies in setting standards, including those set forth in the rule and other relevant factors, and (2) the expected impact of those factors on the manufacturers' ability to comply, without placing decisive weight on any particular factor or projection. The comprehensive evaluation process will lead to final agency action by both agencies.
Consistent with the Agencies' commitment to maintaining a single national framework for regulation of vehicle emissions and fuel economy, the Agencies fully expect to conduct the mid-term evaluation in close coordination with the California Air Resources Board (CARB). Moreover, the Agencies fully expect that any adjustments to the standards will be made with the participation of CARB and in a manner that ensures continued harmonization of state and Federal vehicle standards.
EPA and NHTSA have more recently sought extensive input from automobile manufacturers regarding design elements for the MY 2017-2025 National Program. In achieving the level of standards described above for the 2017-2025 program, the agencies expect automakers' use of advanced technologies to be an important element of transforming the vehicle fleet. To facilitate this transformation, the agencies are considering a number of incentive programs to encourage early adoption and introduction into the marketplace of advanced technologies that represent “game changing” performance improvement, including electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles, and hybrid electric large pickups. In addition, the agencies recognize that, as with the MY 2012-2016 program, there are technologies with the potential to achieve real-world CO2 and fuel consumption reductions that are not captured by the standard test procedures. The agencies intend to propose a program approach to further encourage manufacturer investments in these “off-cycle” technologies.
As in the MY 2012-2016 program, the objective of the off-cycle credits program is to promote the early market penetration of tailpipe CO
For the NPRM, EPA and NHTSA intend to develop a minimum credit value on a subset of technologies for which we have sufficient data. We expect this list to include at least six defined technologies, if not more.
In addition, the agencies are planning to propose that companies could also apply for off-cycle credit for technologies that are not on the pre-defined list, based on the submission of sufficient supporting data. EPA and NHTSA intend to propose a timeline for the approval process, including a 60-day NHTSA and EPA decision process from the time a manufacturer submits a complete application. EPA and NHTSA also intend to propose a detailed, common, step-by-step process, including a specification of the data that manufacturers must submit. For off-
NHTSA and EPA also intend to propose that once a technology has been approved by the two agencies, either from the pre-approved list or through the approval process, that technology and its assigned credit value is available through MY 2025.
To facilitate market penetration of the most advanced vehicle technologies as rapidly as possible, EPA intends to propose an incentive multiplier for all electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs) sold in MYs 2017 through 2021. This multiplier approach means that each EV/PHEV/FCV would count as more than one vehicle in the manufacturer's compliance calculation. EPA intends to propose that EVs and FCVs start with a multiplier value of 2.0 in MY 2017, phasing down to a value of 1.5 in MY 2021. PHEVs would start at a multiplier value of 1.6 in MY 2017 and phase down to a value of 1.3 in MY 2021.
NHTSA is precluded from offering incentives for EVs, FCVs and PHEVs, except as specified by EISA, and is not intending to propose incentive multipliers comparable to the EPA incentive multipliers described above.
As an additional incentive for EVs, PHEVs and FCVs, EPA intends to propose allowing a value of 0 g/mile for the tailpipe compliance value for EVs, PHEVs (electricity usage) and FCVs for MY 2017-2021, with no limit on the quantity of vehicles eligible for 0 g/mi tailpipe emissions accounting. For MY 2022-2025, 0 g/mi will only be allowed up to a per-company cumulative sales cap based on significant penetration of these advanced vehicles in the marketplace. EPA intends to propose an appropriate cap in the NPRM.
The agencies recognize that the standards under consideration for MY 2017-2025 will be most challenging to large trucks, including full size pickup trucks. The agencies' goal is to incentivize the penetration into the marketplace of “game changing” technologies for these pickups, including their hybridization. The agencies intend to solicit information on technologies that offer significant increases in fuel efficiency and reduction in greenhouse gas emissions. We intend to propose a credit for manufacturers that employ significant quantities of hybridization on full size pickup trucks, by including a per-vehicle credit available for mild and strong hybrid electric vehicles (HEVs). This provides the opportunity to begin to transform the most challenging category of vehicles in terms of the penetration of advanced technologies, allowing additional opportunities to successfully achieve the higher levels of truck stringencies in MY 2022-2025.
The agencies intend that access to this credit is conditioned on a minimum penetration of the technology in a manufacturer's full size pickup truck fleet, with defined criteria for a full size pickup truck (
The agencies also intend to propose a performance based incentive credit for full size pickup trucks which achieve a significant reduction below the applicable target. This credit could also be on the order of 10-20 gm/mile vehicle. The same vehicle would not receive credit under both the HEV and the performance based approaches.
As with the MY2012-2016 program, manufacturers will be able to earn credits for improvements in air conditioning (A/C) systems, both for efficiency improvements (reduces tailpipe CO
For the first time, NHTSA expects to propose that manufacturers may include air conditioning system efficiency improvements as a means to comply with fuel economy standards. NHTSA expects to not allow the use of A/C system credits that affect leakage or alternative, lower GWP refrigerant use, because those changes do not affect fuel efficiency. NHTSA also expects to increase the stringency of standards by the amount industry is expected to improve air conditioning system efficiency. NHTSA intends to propose that the maximum A/C credit available for cars is 0.000563 gallon/mile and for trucks is 0.000810 gallon/mile. The test methods used to calculate these credits will be the same as EPA's.
EPA intends that CO
EPA does not expect to extend this method to flexible fueled vehicles (FFVs) using E-85 and gasoline, since there is not a significant cost differential
In the NHTSA program for MYs 2017-2019, NHTSA expects that the fuel economy of dual fuel vehicles will be determined in the same manner as specified in the MY 2012-2016 rule, and as defined by EISA. Beginning in MY 2020, EISA does not specify how to measure the fuel economy of dual fuel vehicles, and it is expected NHTSA will propose to use the EPA “utility factor” methodology for PHEV and CNG vehicles to determine how to proportion the fuel economy when operating on gasoline or diesel fuel and the fuel economy when operating on the alternative fuel. For FFVs, NHTSA expects to propose to use the same methodology as EPA to determine how to proportion the fuel economy, which would be based on actual usage of E85. NHTSA expects to continue to use Petroleum Equivalency Factors and the incentive multipliers that are used in the MY 2012-2016 rule, however with no cap on the amount of fuel economy increase allowed.
The agencies will propose to continue the 5-year credit carry forward and 3-year credit carry back provisions of the MY2012-2016 program, with one key exception under the EPA program. To facilitate the transition to the increasingly more stringent standards, EPA intends to propose a one-time credit carry forward beyond 5 years, such that any credits generated from MY2010 through 2016 will be able to be used any time through MY 2021. This provision would not apply to early credits generated in MY 2009. NHTSA's program will continue the 5-year carry-forward and 3-year carry-back as required by statute.
As with the MY 2012-2016 program, EPA intends to continue to allow manufacturers to make unlimited transfers between their car and light truck fleets, and unlimited credit trading between manufacturers. NHTSA intends to continue to allow unlimited credit trading between manufacturers, and credit transferring up to the limits allowed by statute, consistent with the approach in the MY 2012-2016 program.
Under EPCA, manufacturers are allowed to exclude emergency vehicles from their CAFE fleet and all manufacturers have historically done so. In the MY 2012-2016 program, EPA's GHG program does apply to these vehicles. However, after further consideration of this issue, EPA intends to propose that an exclusion is appropriate because of the unique features of vehicles designed specifically for law enforcement purposes, which have the effect of raising their GHG emissions.
As EPA did for the MY 2012-2016 program, EPA intends to propose to continue to exclude small businesses from the GHG standards, for any company that meets the Small Business Administration's definition of a small business. For vehicle manufacturers, the definition of small business is any firm with less than 1,000 employees. EPA believes this exemption is appropriate since these businesses make up less than 0.1% of total U.S. vehicle sales, and there is no significant impact on emission reductions.
EPCA provides NHTSA with the authority to exempt from the generally applicable CAFE standards manufacturers that produce fewer than 10,000 passenger cars worldwide in the model year each of the two years prior to the year in which they seek an exemption.
For small volume manufacturers, which EPA defines as manufacturers with U.S. annual sales of less than 5,000 vehicles, EPA intends to propose to bring these manufacturers into the program for the first time, and allow them to petition for alternative standards.
This document outlines the key program elements of a National Program that EPA and NHTSA plan to propose for model year 2017-2025 light-duty vehicles. The agencies' efforts to develop this program have been fully consistent with the President's May 21, 2010 Memorandum. The agencies have coordinated extensively with California, and held extensive discussions with stakeholders to ensure our proposal is based on the most robust technical analysis possible. The agencies plan to issue a Notice of Proposed Rulemaking by the end of September 2011.
Given the long time frame at issue in setting standards for MY2022-2025 light-duty vehicles, and given NHTSA's obligation to conduct a separate rulemaking in order to establish final standards for vehicles for those model years, EPA and NHTSA will conduct a comprehensive mid-term evaluation and agency decision-making as described below. Up to date information will be developed and compiled for the evaluation, through a collaborative, robust and transparent process, including public notice and comment. The evaluation will be based on (1) A holistic assessment of all of the factors considered by the agencies in setting standards, including those set forth in the rule and other relevant factors, and (2) the expected impact of those factors on the manufacturers' ability to comply, without placing decisive weight on any particular factor or projection. The comprehensive evaluation process will lead to final agency action by both agencies.
Consistent with the Agencies' commitment to maintaining a single national framework for regulation of vehicle emissions and fuel economy, the Agencies fully expect to conduct the mid-term evaluation in close coordination with the California Air Resources Board (CARB). Moreover, the Agencies fully expect that any adjustments to the standards will be made with the participation of CARB and in a manner that ensures continued harmonization of state and Federal vehicle standards.
• EPA will conduct a mid-term evaluation of the later model year light-duty GHG standards (MY2022-2025). The evaluation will determine whether those standards are appropriate under section 202(a) of the Act. EPA will be legally bound to make a final decision, by April 1, 2018, on whether the MY 2022-2025 GHG standards are appropriate under section 202(a), in light of the record then before the agency. In the MY 2017-2025 rule EPA will adopt a regulation requiring EPA to make such a determination by that date.
• EPA, NHTSA and CARB will jointly prepare a draft Technical Assessment Report (TAR) to inform EPA's determination on the appropriateness of the GHG standards and to inform NHTSA's rulemaking for the CAFE standards for MYs 2022-2025. The TAR will examine the same issues and underlying analyses and projections considered in the original rulemaking, including technical and other analyses and projections relevant to each agency's authority to set standards as well as any relevant new issues that may present themselves. There will be an opportunity for public comment on the draft
• EPA will also seek public comment on whether the standards are appropriate under section 202(a),
• EPA and NHTSA will consult and coordinate in developing EPA's determination on whether the MY 2022-2025 GHG standards are appropriate under section 202(a) and NHTSA's NPRM.
• In making that determination, EPA will evaluate and determine whether the MY2022-2025 GHG standards are appropriate under section 202(a) of the CAA based on a comprehensive, integrated assessment of all of the results of the review, as well as any public comments received during the evaluation, taken as a whole. The decision making required of the Administrator in making that determination is intended to be as robust and comprehensive as that in the original setting of the MY2017-2025 standards.
• In making this determination, EPA will consider information on a range of relevant factors, including but not limited to those listed in the draft rule and below:
1. Development of powertrain improvements to gasoline and diesel powered vehicles.
2. Impacts on employment, including the auto sector.
3. Availability and implementation of methods to reduce weight, including any impacts on safety.
4. Actual and projected availability of public and private charging infrastructure for electric vehicles, and fueling infrastructure for alternative fueled vehicles.
5. Costs, availability, and consumer acceptance of technologies to ensure compliance with the standards, such as vehicle batteries and power electronics, mass reduction, and anticipated trends in these costs.
6. Payback periods for any incremental vehicle costs associated with meeting the standards.
7. Costs for gasoline, diesel fuel, and alternative fuels.
8. Total light-duty vehicle sales and projected fleet mix.
9. Market penetration across the fleet of fuel efficient technologies.
10. Any other factors that may be deemed relevant to the review.
■ If, based on the evaluation, EPA decides that the GHG standards are appropriate under section 202(a), then EPA will announce that final decision and the basis for EPA's decision. The decision will be final agency action which also will be subject to judicial review on its merits. EPA will develop an administrative record for that review that will be no less robust than that developed for the initial determination to establish the standards. In the midterm evaluation, EPA will develop a robust record for judicial review that is the same kind of record that would be developed and before a court for judicial review of the adoption of standards.
■ Where EPA decides that the standards are not appropriate, EPA will initiate a rulemaking to adopt standards that are appropriate under section 202(a), which could result in standards that are either less or more stringent. In this rulemaking EPA will evaluate a range of alternative standards that are potentially effective and reasonably feasible, and the Administrator will propose the alternative that in her judgment is the best choice for a standard that is appropriate under section 202(a). In the 2017-2025 rulemaking EPA will formally adopt the interpretation that the provisions of section 202(b)(1)(C) are not applicable to any revisions of the greenhouse standards adopted in this later rulemaking based on the mid-term evaluation. If EPA initiates a rulemaking, it will be a joint rulemaking with NHTSA. Any final action taken by EPA at the end of that rulemaking is also judicially reviewable.
■ The MY 2022-2025 GHG standards will remain in effect unless and until EPA changes them by rulemaking.
■ NHTSA intends to issue conditional standards for MYs 2022-2025 in the LDV rulemaking being initiated this fall for MY 2017 and later model years. The CAFE standards for MYs 2022-2025 will be determined with finality in a subsequent, de novo notice and comment rulemaking conducted in full compliance with section 32902 of title 49, U.S.C. and other applicable law. Accordingly, NHTSA's development of its proposal in that later rulemaking will include the making of economic and technology analyses and estimates that are appropriate for those model years and based on then-current information.
■ Any rulemaking conducted jointly by the agencies or by NHTSA alone will be timed to provide sufficient lead time for industry to make whatever changes to their products that the rulemaking analysis deems feasible based on the new information available. At the very latest, the three agencies will complete the mid-term evaluation process and subsequent rulemaking on the standards that may occur in sufficient time to promulgate final standards for MYs 2022-2025 with at least 18 months lead time, but additional lead time may be provided.
■ EPA understands that California intends to propose a mid-term evaluation in its program that is coordinated with EPA and NHTSA and is based on a similar set of factors as outlined in this Appendix A. The rules submitted to EPA for a waiver under the CAA will include such a mid-term evaluation. EPA understands that California intends to continue promoting harmonized state and federal vehicle standards. EPA further understands that California's 2017-2025 standards to be submitted to EPA for a waiver under the Clean Air Act will deem compliance with EPA greenhouse gas emission standards, even if amended after 2012, as compliant with California's. Therefore, if EPA revises it standards in response to the mid-term review, California may need to amend one or more of its 2022-2025 MY standards and would submit such amendments to EPA with a request for a waiver, or for confirmation that said amendments fall within the scope of an existing waiver, as appropriate.
Consistent with the above, EPA intends to propose regulations that state that no later than April 1, 2018, the Administrator shall determine whether the standards for MY2022-25 are appropriate under section 202(a) of the Act, in light of the record then before the Administrator. An opportunity for public comment shall be provided before making such determination. If she determines they are not appropriate, she shall initiate a rulemaking to revise the standards, to be either more or less stringent as appropriate.
In making the determination required by the previous paragraph, the Administrator shall consider the information available on the factors relevant to setting greenhouse gas standards under section 202(a) for these model years, including but not limited to the availability and effectiveness of technology, and the appropriate lead time for introduction of technology; the cost on the producers or purchasers of new motor vehicles or new motor vehicle engines; the feasibility and practicability of the standards; the impact of the standards on reduction of emissions, oil conservation, energy security, and fuel savings by consumers; the impact of the standards on the automobile industry; the impacts of the standards on safety; the impact of the standards on the CAFE standards and a national harmonized program; and the impact of the standards on other relevant factors.
The Administrator shall make the determination required based upon a record that includes a draft Technical Assessment Report (TAR) addressing issues relevant to the standard for MY2022-25, public comment on the TAR, public comment on whether the standards for MY2022-25 are appropriate under section 202(a), and such other materials the Administrator deems appropriate.
No later than November 15, 2017, the Administrator shall issue a draft TAR addressing issues relevant to the standards for MY2022-25.
The Administrator will set forth in detail the bases for the determination required as described above, including her assessment of each of the factors listed above.
The target curve is calculated by:
Lisa P. Jackson,
Office of the National Coordinator for Health Information Technology, Department of Health and Human Services.
Advance notice of proposed rulemaking.
Through this advance notice of proposed rulemaking (ANPRM), the Office of the National Coordination for Health Information Technology (ONC) is soliciting public comments on metadata standards to support nationwide electronic health information exchange. We are specifically interested in public comments on the following categories of metadata recommended by both the HIT Policy Committee and HIT Standards Committee: patient identity; provenance; and privacy. We also request public comments on any additional metadata categories, metadata elements, or metadata syntax that should be considered. The immediate scope of this ANPRM is the association of metadata with summary care records. More specifically, in the scenario where a patient obtains a summary care record from a health care provider's electronic health record technology or requests for it to be transmitted to their personal health record. Public comment, however, is also welcome on the use of metadata relative to other electronic health information contexts.
To be assured consideration, written comments must be received at one of the addresses provided below, no later than 5 p.m. on September 23, 2011. Similarly, electronic comments must be received by Midnight Eastern Time on September 23, 2011 as the Federal Docket Management System will not accept comments after this time.
Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. You may submit comments, identified by RIN 0991- AB78, by any of the following methods (please do not submit duplicate comments).
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Steven Posnack, Director, Federal Policy Division, Office of Policy and Planning, Office of the National Coordinator for Health Information Technology, 202- 690-7151.
The Health Information Technology for Economic and Clinical Health (HITECH) Act, Title XIII of Division A and Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5), was enacted on February 17, 2009. The HITECH Act amended the Public Health Service Act (PHSA) and established “Title XXX—Health Information Technology and Quality” to improve health care quality, safety, and efficiency through the promotion of health information technology (HIT) and the electronic exchange of health information. Section 3003(b)(1)(A) of the PHSA states that “[t]he HIT Standards Committee shall recommend to the National Coordinator standards, implementation specifications, and certification criteria described in subsection (a) that have been developed, harmonized, or recognized by the HIT Standards Committee. * * *” Section 3003(b)(2) of the PHSA states that “[t]he HIT Standards Committee shall serve as a forum for the participation of a broad range of stakeholders to provide input on the development, harmonization, and recognition of standards, implementation specifications, and certification criteria necessary for the development and adoption of a nationwide health information technology infrastructure that allows for the electronic use and exchange of health information.”
Section 3001(c)(1)(A) of the PHSA, under “Duties of the National Coordinator,” states that the National Coordinator shall “review and determine whether to endorse each standard, implementation specification, and certification criterion for the electronic exchange and use of health information that is recommended by the HIT Standards Committee under section 3003 for purposes of adoption [by the Secretary] under section 3004.”
Section 3004 of the PHSA identifies a process for the adoption of health IT standards, implementation specifications, and certification criteria and authorizes the Secretary of Health and Human Services (the Secretary) to adopt such standards, implementation specifications, and certification criteria. As specified in section 3004(a)(1), the Secretary is required, in consultation with representatives of other relevant Federal agencies, to jointly review standards, implementation specifications, and certification criteria endorsed by the National Coordinator for Health Information Technology (the National Coordinator) under section 3001(c) and subsequently determine whether to propose the adoption of any grouping of such standards, implementation specifications, or certification criteria. Section 3004(b)(1) of the PHSA requires the Secretary to adopt an initial set of standards, implementation specifications, and certification criteria for the areas required for consideration under section 3002(b)(2)(B) by December 31, 2009 and permits the Secretary to adopt the initial set through an interim final rule. Section 3004(b)(3) of the PHSA directs the Secretary to “adopt additional standards, implementation specifications, and certification criteria as necessary and consistent with the schedule” developed by the HIT Standards Committee under section 3003(b)(3) of the PHSA
On January 13, 2010, the Department of Health and Human Services (HHS) published in the
On July 28, 2010, HHS published in the
On October 13, 2010, HHS published in the
On December 8, 2010, the President's Council of Advisors on Science and Technology (PCAST) released a report entitled “Realizing the Full Potential of Health Information Technology to Improve Healthcare for Americans: The Path Forward” (the PCAST Report).
On December 10, 2010, the Office of the National Coordinator for Health Information Technology (ONC) issued a Request for Information (RFI) to seek public comment on the PCAST Report's vision and recommendations and how they may be best addressed (75 FR 76986). The RFI sought specific feedback on nine questions which are best organized according to the following categories:
• The standards, implementation specifications, certification criteria, and certification processes for EHR technology and other types of HIT that would be required to implement some of the PCAST Report's recommendations;
• The current state of information technology solutions needed to support the PCAST Report's vision as well as lessons that could be learned from other industry implementations;
• The steps that could be taken to best integrate the changes envisioned by the PCAST Report into future stages of meaningful use; and
• The impact of the PCAST recommendations on ONC programs and ongoing activities.
In total, ONC received 105 timely comments on the RFI from stakeholders throughout the health care industry. These comments were consolidated into a summary report to inform the deliberations of the PCAST Workgroup formed under the HIT Policy Committee (discussed below). The following major themes emerged from public comments: timelines; the effects on ONC programs; implementation of the PCAST recommendations; privacy and security; and standards.
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In January 2011, ONC asked the HIT Policy Committee to provide a more detailed assessment of the PCAST Report's ONC-related recommendations, how implementing the recommendations could affect ONC's programs, and potential approaches ONC could pursue to realize the vision described in the PCAST Report. To respond to this request, the HIT Policy Committee, in conjunction with the HIT Standards Committee, formed an interdisciplinary PCAST Workgroup to analyze the RFI comments as well as solicit expert testimony through a public hearing held in February 2011.
In April 2011, the HIT Policy Committee transmitted to ONC an analysis report that suggested incremental steps for ONC to pursue to achieve the vision described in the PCAST Report. As a feasible first step, the HIT Policy Committee suggested that ONC focus on facilitating the development and adoption of a minimal set of standards for metadata that could be “wrapped around” or attached to a summary care record when a patient seeks to download their health information from, for example, a health care provider's patient portal or when a patient directs his or her health care provider to transmit his or her health information to a personal health record (PHR). Generally speaking, the term “metadata” is often used to mean “data about data” or, in other words, “data that provides more information or detail about a piece of data.”
The HIT Policy Committee suggested that it would be practical to include this capability as part of the EHR certification requirements to support meaningful use Stage 2 under the Medicare and Medicaid EHR Incentive Programs. Moreover, in the context of this first “use case,” the HIT Policy Committee noted that a minimum set of metadata (and accompanying standards) should focus on these three categories: patient identity (data elements about a patient), provenance (data elements about the source of the clinical data), and privacy (data elements about the type(s) and sensitivity of clinical data included). Additionally, the HIT Policy Committee noted that if these metadata are available, they could potentially increase the level of trust that receiving providers would place in clinical information that they receive through patient-mediated exchange, such as from a PHR, and could enable patients to more easily sort and re-share their own health information.
In parallel with the work being done by the PCAST Workgroup, ONC commissioned an in-depth analysis of several widely implemented standards that include metadata. This analysis examined the various data elements each standard includes and identified certain categories of metadata that could be readily adopted as metadata standards. On April 20, 2011, this analysis was presented to the HIT Standards Committee, which included metadata options for patient identity, provenance, and privacy.
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In April 2011, after the receipt of the ONC-commissioned analysis on metadata standards, the HIT Standards Committee formed a “metadata power team” to further consider this analysis in order to identify metadata standards that would be appropriate for electronic health information exchange. On May 18, 2011, after a series of public meetings, the metadata power team presented to the HIT Standards Committee their review of the metadata elements that would be best to consider for patient identity and provenance. On May 25, 2011, the metadata power team held another meeting which focused on the analysis of privacy metadata elements.
On June 22, 2011, the metadata power team submitted its complete analysis and a set of recommendations to the HIT Standards Committee on the data elements that should be included as part of metadata standards for patient identity, provenance, and privacy. The HIT Standards Committee discussed and subsequently approved the metadata power team's findings. The HIT Standards Committee submitted its recommendations on metadata elements and standards to the National Coordinator and expressed its expectation that ONC would conduct further testing and evaluation prior to proposing these standards for adoption through rulemaking.
Upon receipt of the HIT Standards Committee's metadata standards recommendations, the National Coordinator followed the process outlined in the sections 3001(c)(1)(A) and (B) of the PHSA. These provisions require the National Coordinator to “(A) review and determine whether to endorse each standard, implementation specification, and certification criterion for the electronic exchange and use of health information that is recommended by the HIT Standards Committee under section 3003 for purposes of adoption under section 3004; [and] (B) make such determinations under subparagraph (A), and report to the Secretary such determinations, not later than 45 days after the date the recommendation is received by the Coordinator * * *”
The National Coordinator endorsed the HIT Standards Committee recommendations on metadata standards and reported this determination to the Secretary for consideration under section 3004(a) of the PHSA. Per section 3004(a)(2), if the Secretary determines “to propose adoption of any grouping of such standards, implementation specifications, or certification criteria, the Secretary shall, by regulation under section 553 of title 5, United States Code, determine whether or not to adopt such grouping of standards, implementation specifications, or certification criteria.” In accordance with section 3004(a)(3), the Secretary must also provide for publication in the
Section 3001 of the HITECH Act establishes ONC by statute and requires, under section 3001(b), the National Coordinator to “perform the duties under [section 3001](c) in a manner consistent with the development of a nationwide health information technology infrastructure that allows for the electronic use and exchange of information * * *” Since the HITECH Act's enactment in February 2009, ONC has developed a portfolio of initiatives to foster a nationwide health information technology infrastructure. The PCAST Report, published in December 2010, built on our progress to date and complemented our existing initiatives. It expressed a vision, with associated policy goals, that focused on key challenges ONC could undertake to accelerate its efforts in several electronic health information exchange areas. One such area, a cornerstone of the PCAST Report's vision, was to increase the health care industry's ability to understand and parse the health care data under its stewardship at a more granular level. The PCAST Report noted that the development of metadata standards was a critical first step to facilitating more granular understanding of data and to establishing a “universal exchange language (UEL).” The PCAST Report described the UEL as, “some kind of extensible markup language (an XML variant, for example) capable of exchanging data from an unspecified number of (not necessarily harmonized) semantic realms. Such languages are structured as individual data elements, together with metadata that provide an annotation for each data element.”
We believe that the use of metadata holds great promise and the adoption of metadata standards can help rapidly advance electronic health information exchange across a variety of different exchange architectures. The purpose of this ANPRM is to seek broad public comment on the metadata standards we are considering proposing for adoption in the next notice of proposed rulemaking with regard to the standards, implementation specifications, and certification criteria intended to support meaningful use Stage 2. We are considering whether to propose, as a requirement for certification, that EHR technology be capable of applying the metadata standards in the context of the use case selected by the HIT Policy Committee (i.e., when a patient downloads a summary care record from a health care provider's EHR technology or requests for it to be transmitted to their PHR). For example, if a patient seeks to obtain an electronic copy of her health information, her doctor's EHR technology would have to be capable of creating a summary care record and subsequently assigning metadata to the summary care record before the patient receives it. From an EHR technology developer's perspective, we believe this approach would be the least difficult to implement in support of meaningful use Stage 2. However, generally speaking, we believe this capability may also be able to be applied to other directed transfers of summary care records (e.g., as part of requirements concerning transitions of care). Additionally, looking prospectively, once EHR technology is capable of applying metadata, we believe that the health care industry could gradually develop innovative ways to repurpose this general capability to create more specialized extensions to meet future specific policy and organizational objectives. For instance, the EHR technology's capability to assign metadata to documents or more granular data elements could be used within an organization to appropriately filter data prior to making a disclosure or to process information more efficiently for quality improvement and measurement. In addition to the specific metadata standards discussed below, we also request public comments on any other metadata categories, metadata elements, or metadata syntax that we should consider.
Consistent with the recommendations of the HIT Standards Committee, ONC is interested in learning about and requests public comment on any real-life testing or use of these or other metadata standards relating to patient identity, provenance, or privacy. ONC also intends to seek pilot testing of these metadata standards to gain insights into any implementation-level challenges that may exist.
This section discusses the metadata standards we are considering for each of the three categories (patient identity, provenance, and privacy) as recommended by the HIT Standards Committee and includes specific questions for the public's consideration. Consistent with the recommendations of the HIT Standards Committee, we are considering proposing that the metadata would need to be expressed according to the requirements in the HL7 CDA R2 header (section 4.2 of HL7 CDA R2). We are also considering whether to propose the adoption of additional metadata elements for certain information that is not currently required as part of the HL7 CDA R2 header. The HIT Standards Committee recommended the use of the HL7 CDA R2 header based on its belief that the HL7 CDA R2's XML format for describing generic clinical documents would best support the implementation of its recommendations. It specifically noted that among its many benefits the HL7 CDA R2 could best accommodate the international representation of names and could potentially support additional information if desired. The HIT Standards Committee first recommended the use of the HL7 CDA R2 header for patient identity metadata. Subsequently, it acknowledged and determined that even though other standards could support the metadata elements under consideration in the provenance and privacy categories that the use of the HL7 CDA R2 header for these two categories would complement its already recommended use for patient identity metadata. Its overall rationale for the selection and recommendation of the HL7 CDA R2 header was that it provides wide coverage across metadata elements and working from a single standard would make implementation easier.
At the end of this section, we provide a complete example of how the metadata could be expressed. We request public comment on the metadata standards discussed below and in response to the specific questions listed below.
We are considering the following standard set of patient identity metadata recommended by HIT Standards Committee. This standard set would include the following data elements expressed according to the requirements explained below.
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For each of the above elements, consistent with the HIT Standards Committee's recommendation, we would consider requiring that they be expressed according to HL7 CDA R2 header syntax. We would not expect, however, to require the implementation of the surrounding structure that a complete, valid HL7 CDA R2 header would include. Rather, our intent would be to leverage the way in which the HL7 CDA R2 header expresses how each data element would be represented and not to require that the HL7 CDA R2 header's structure also be implemented.
In addition to the patient identity metadata that we would expect to be expressed using the HL7 CDA R2 header, we are considering requiring an additional metadata element to be included for “display name.” In this case, and as discussed by the HIT Standards Committee, we currently believe that extending name metadata beyond the HL7 CDA R2 header requirements
We are also considering whether to propose as a second extension, beyond the HL7 CDA R2, the use of a uniform resource identifier (URI) to act as a namespace for the patient identifier metadata as opposed to the use of an object identifier (OID) as specified in HL7 CDA R2. Currently, the definition of the “id root” attribute in the HL7 CDA R2 header is defined to only accept OIDs, universally unique identifiers (UUIDs), or specific HL7 reserved identifiers, none of which can hold a URI. A URI could be used as a means to identify the associated ID type that would be used. For instance, <id extension=“1234567” root=“
We are considering the following standard set of provenance metadata recommended by the HIT Standards Committee. The standard set would include the following data elements expressed according to the requirements explained below—a tagged data element (TDE) identifier; a time stamp; and the actor, the actor's affiliation, and the actor's digital certificate. These provenance metadata function as part of a “wrapper” that would convey the “who, what, where, and when” of the data being electronically exchanged. As with patient identity metadata, we would expect these provenance metadata elements to be expressed according to HL7 CDA R2 header syntax requirements, where applicable.
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The HIT Standards Committee also recommended that the X.509 standard for certificates be used to digitally sign the content to which the metadata pertains. It noted that that digital certificates and digital signatures could be used to provide non-repudiation and tamper-resistance. The HIT Standards Committee further acknowledged that while its expectation was that an actor and its affiliation would be expressed in an X.509 certificate that there should be optional metadata fields for actor and actor affiliation for reasons including situations where EHR technology can understand the XML format of the HL7 CDA R2 header syntax, but cannot process more complex cryptographic signatures. As a final recommendation on provenance, the HIT Standards Committee recommended an optional portion of the actor/affiliation metadata should point to the entity record in the Enterprise-Level Provider Directory, which may be a URL (this concept is included in the metadata example illustrated below).
Generally, as recommended by the HIT Standards Committee, the metadata elements for time stamp, the actor, the actor's affiliation, and the actor's digital certificate all rely on one security architecture, the use of digital certificates. We are considering whether for the purposes of adopting metadata standards it would be beneficial to decouple the metadata elements from a particular security architecture. In short, we are contemplating whether it would be more effective and appropriate to adopt provenance metadata elements that do not rely on a single security architecture, but rather can be used in various security architectures.
At the outset, we note that the HIT Standards Committee made its recommendations on privacy metadata standards with the underlying assumption that any personally identifiable information would be exchanged in an appropriately secure manner (
As recommended by the HIT Standards Committee, we are considering the following standard set of privacy metadata which would include the following data elements expressed according to the requirements explained below—a “policy pointer” and content metadata elements.
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Again, we would expect that these privacy metadata would be expressed according to the HL7 CDA R2 header syntax requirements.
The following is a complete example of how the standard sets of metadata elements for the three categories discussed above could be expressed.
To better inform future proposals, we seek public comment on the following specific questions. Commenters are also welcome to provide feedback on any of the considerations and expectations we expressed above even where a specific question is not asked.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Proposed rule; correction and extension of comment date.
This document corrects the proposed changes published in the
The comment period for the proposed rule published June, 28, 2011, at 76 FR 37704, is extended. Comments will be received until September 8, 2011.
Mr. Curtis E. Glover, Sr., Procurement Analyst, at (202) 501-1448. Please cite FAR Case 2009-042.
This document corrects the proposed changes published in the
In the proposed rule FR Doc. 2011-16169, beginning on page 37705, in 3rd column, in the issue of Tuesday, June 28, 2011, make the following correction, in the instructions of section 42.1503.
1. Section 42.1503 is corrected to read as follows:
(a) Agency procedures for the past performance evaluation system shall generally provide for input to the evaluations from the technical office, contracting office and, where appropriate, end users of the product or service. Agency procedures shall identify and assign past performance evaluation roles and responsibilities to those individuals responsible for preparing interim and final performance evaluations (
(b)(1) The evaluation report should reflect how the contractor performed. The report should include clear relevant information that accurately depicts the contractor's performance, and be based on objective facts supported by program and contract performance data. The evaluations should be tailored to the contract type, size, content, and complexity of the contractual requirements.
(2) Evaluation factors for each assessment shall include, at a minimum, the following:
(i) Technical or Quality.
(ii) Cost Control (as applicable).
(iii) Schedule/Timeliness.
(iv) Management or Business Relations.
(v) Small Business Subcontracting (as applicable).
(3) These evaluation factors, including subfactors, may be tailored, however, each factor and subfactor shall be evaluated and supporting narrative provided.
(4) Each evaluation factor, as listed in paragraph (b)(2) of this section, shall be rated in accordance with a five scale rating system (
(c)(1) When the contract provides for incentive fees, the incentive-fee contract performance evaluation shall be entered into CPARS. (See 16.401(f).)
(2) When the contract provides for award fee, the award fee-contract performance adjectival rating as described in 16.401(e)(3) shall be entered into CPARS.
(d) Agency evaluations of contractor performance, including both negative and positive evaluations, prepared under this subpart shall be provided to the contractor as soon as practicable after completion of the evaluation. Contractors shall be given a minimum of 30 days to submit comments, rebutting statements, or additional information. Agencies shall provide for review at a level above the contracting officer to consider disagreements between the parties regarding the evaluation. The ultimate conclusion on the performance evaluation is a decision of the contracting agency. Copies of the evaluation, contractor response, and review comments, if any, shall be retained as part of the evaluation. These evaluations may be used to support future award decisions, and should therefore be marked “Source Selection Information”. Evaluation of Federal Prison Industries (FPI) performance may be used to support a waiver request (see 8.604) when FPI is a mandatory source in accordance with subpart 8.6. The completed evaluation shall not be released to other than Government personnel and the contractor whose performance is being evaluated during the period the information may be used to provide source selection information. Disclosure of such information could cause harm both to the commercial interest of the Government and to the competitive position of the contractor being evaluated as well as impede the efficiency of Government operations. Evaluations used in determining award or incentive fee payments may also be used to satisfy the requirements of this subpart. A copy of the annual or final past performance evaluation shall be provided to the contractor as soon as it is finalized.
(e) Agencies shall require—
(1) Performance issues be documented promptly during contract performance to ensure critical details are included in the evaluation;
(2) The award fee determination, if required, align with the contractor's performance and be reflected in the evaluation;
(3) Timely assessments and quality data (see the quality standards in the CPARS Policy Guide at
(4) Frequent assessment (
(f) Agencies shall prepare and submit all past performance reports electronically into the CPARS at
Agencies shall ensure that appropriate management and technical controls are in place to ensure that only authorized personnel have access to the data and the information safeguarded in accordance with 42.1503(b).
(g) Agencies shall use the past performance information in PPIRS that is within the last three years (six for construction and architect-engineer contracts) and information contained in the Federal Awardee Performance and Integrity Information System (FAPIIS),
(h)
(i) Issues a final determination that a contractor has submitted defective cost or pricing data;
(ii) Makes a subsequent change to the final determination concerning defective cost or pricing data pursuant to 15.407-1(d);
(iii) Issues a final termination for cause or default notice; or
(iv) Makes a subsequent withdrawal or a conversion of a termination for default to a termination for convenience.
(2) Agencies shall establish CPARS focal points who will register users to report data into the FAPIIS module of CPARS (available at
(3) The primary duties of the CPARS focal point is to administer CPARS and FAPIIS access. Agencies must also establish PPIRS group managers. The primary duties of the PPIRS group managers are to grant or deny access to PPIRS. The CPARS Reference Material, on the Web site, includes reporting instructions.
Fish and Wildlife Service, Interior.
Notice of 12-month petition finding.
We, the U.S. Fish and Wildlife Service (Service), announce a 12-month finding on a petition to list the Nueces River shiner (
The finding announced in this document was made on August 9, 2011.
This finding is available on the Internet at
Adam Zerrenner, Field Supervisor, Austin Ecological Services Field Office (see
Section 4(b)(3)(B) of the Endangered Species Act of 1973, as amended (Act) (16 U.S.C. 1531
On June 25, 2007, we received a petition dated June 18, 2007, from Forest Guardians (now WildEarth Guardians), requesting that 475 species in the southwestern United States, including the Nueces River and plateau shiners, be listed under the Act and critical habitat be designated. We acknowledged the receipt of the petition in a letter to the petitioner, dated July 11, 2007. In that letter we also stated that the petition was under review by staff in our Southwest Regional Office.
On March 19, 2008, WildEarth Guardians filed a complaint alleging that the Service failed to comply with its mandatory duty to make a preliminary 90-day finding on the June 18, 2007, petition to list 475 southwest species. We subsequently published an initial 90-day finding for 270 of the 475 petitioned species on January 6, 2009 (74 FR 419), concluding that the petition did not present substantial information that listing of those 270 species may be warranted. This initial 90-day finding did not include the Nueces River and plateau shiners. Subsequently, on March 13, 2009, the Service and WildEarth Guardians filed a stipulated settlement agreement, agreeing that the Service would submit to the
There has been some confusion and inconsistency regarding the taxonomy of the Nueces River and plateau shiners. Currently, there are approximately 30 species that belong to the genus
When first described, the Nueces River and plateau shiners were not considered separate species. They were both originally described as the plateau shiner,
Morphological studies conducted by Matthews (1987, pp. 616-637) and Mayden (1989, pp. 58-60) provided support that
These morphological differences between the Nueces and Frio Rivers' shiners were validated by genetic investigations that revealed two distinct lineages within populations of
Further genetic investigations by Richardson and Gold (1999) supported their previous conclusion that
Another genetic study agreed that the Nueces River shiner and plateau shiner are distinct species. In 2000, Broughton and Gold (pp. 1-10) conducted a genetic analysis of all
In an effort to clarify some of the genus' taxonomic confusion, Schonhuth and Mayden (2010, pp. 77-98) conducted a genetic study of all species within the
Despite the morphological and genetic studies of the Nueces River and plateau shiners, the scientific community has been inconsistent in recognizing these shiners as separate species. The Texas Parks and Wildlife Department (TPWD) recognizes the plateau shiner (
Based on the best available science, we accept the characterization of the Nueces River shiner,
Because of the inconsistencies in taxonomy and species descriptions of the Nueces River and plateau shiners, there has been similar confusion and inconsistencies regarding these shiners' distribution. However, one thing that has been clearly understood is that both the historic and current range of both shiners is the uppermost headwaters of the Nueces, Frio, and Sabinal Rivers of the Nueces River basin (Figure 1). The Nueces River basin covers approximately 17,000 square miles (44,030 square kilometers), encompassing all or part of 23 counties in south-central Texas (Nueces River Authority 2010, p. 1). Rivers within the basin include Nueces, Frio, Leona, Sabinal, and Atascosa Rivers (Nueces River Authority 2010, p. 1). Because the Nueces River basin is so large, running from the Edwards Plateau region of Texas to the Gulf Coast of Mexico, there are large physical and chemical differences between streams in the upper and lower parts of the basin (Norris
The upper Nueces River basin, where the Nueces River and plateau shiners are found, is composed of three main tributary systems: The Nueces, Frio, and Sabinal Rivers (Edwards
An example of the inconsistency in the species' distribution occurred when TPWD associated the plateau and Nueces River shiners with the wrong stream segments in their 2005 designation of ecologically significant stream segments, which are stream segments designated based on factors related to biological function, hydrologic function, presence of riparian conservation areas, high water quality, exceptional aquatic life, high aesthetic value, threatened or endangered species, and uniqueness (Norris
In a recent study, Edwards
There is limited information in the literature regarding the Nueces River and plateau shiners' habitat. Edwards
There has been much speculation and very little research actually surveying and documenting the abundance of the Nueces River and plateau shiners. A genetic study by Richardson and Gold (1995, p. 35) noted that the plateau shiner's abundance appeared to have decreased considerably over the previous 20 years prior to their study. However, their note of plateau shiner abundance was not based on actual surveys or data collection (Richardson and Gold 1995, p. 35). Also, we could not find any evidence or documentation that either of these shiners' abundance actually declined over this time period. Therefore, we cannot conclude that there was a decline in the Nueces River or plateau shiners over the 20 years prior to Richardson and Gold's (1995) study.
Because of Richardson and Gold's (1995, p. 35) statement regarding the presumed decline of the two shiners, other researchers cited Richardson and Gold while making the same conjecture. For example, Hoagstrom
There has been a noted decline throughout Texas for many of the State's native fishes (Hubbs
Contrary to the information above, other studies have noted that the Nueces River and plateau shiners were abundant within the past decade in the headwaters of the Sabinal, Frio, and Nueces Rivers (Figure 1). In fact, Edwards
Even though there have been claims in the scientific literature that the Nueces River and plateau shiners were declining, these claims appear to be unsubstantiated by actual survey data. On the other hand, a recent study conducted by Edwards
Section 4 of the Act (16 U.S.C. 1533) and implementing regulations (50 CFR part 424) set forth procedures for adding species to, removing species from, or reclassifying species on the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, a species may be determined to be endangered or threatened based on any of the following five factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
In making this finding, information pertaining to the Nueces River and plateau shiners in relation to the five factors provided in section 4(a)(1) of the Act is discussed below. In making our 12-month finding on the petition, we considered and evaluated the best available scientific and commercial information. We reviewed the petition, information available in our files, and other available published and unpublished information. We also consulted with recognized fish experts and biologists with TPWD and The Nature Conservancy.
The following factors have the potential to affect the habitat or range of the Nueces River shiner: Livestock grazing, water quantity, water quality,
While we know that livestock grazing occurs within the range of the species, we could find no information on the extent or intensity of historical or current livestock grazing practices or the impact grazing might have on the Nueces River shiner and its habitat. In areas where livestock are grazed inappropriately, impacts could include, but are not limited to, runoff from disturbed stream banks, livestock urine and manure deposited into streams, disturbance and erosion from trampled banks, and increased solar exposure due to reduced shade from streamside vegetation and loss of undercut streambanks. Any of these impacts could affect the Nueces River shiner by degrading water quality and negatively impacting the species. Richardson and Gold (1995, p. 35) concluded that much of the land in the Nueces River basin is used for agriculture, and that overgrazing by cattle posed serious problems for aquatic fauna. However, we found no monitoring data indicating that water quality degradation associated with livestock grazing is occurring within the range of the Nueces River shiner. Based on the best available information, we could find no evidence that overgrazing is posing a threat to the Nueces River shiner or is likely to in the future. Therefore, because the best available information does not indicate that livestock grazing is negatively impacting the species, we find that the Nueces River shiner is not in danger of extinction now or in the foreseeable future as a result of livestock grazing.
Diminished water flows can cause losses in habitat diversity, reduce stream productivity, and degrade water quality for many fish species (Norris
Within the last 12 years, there has been cause for concern along certain stream segments of the Nueces River. In 1999, a 91-mile (mi) (147-kilometers (km)) stream segment of Nueces River that flows from Holland Dam in La Salle County to its confluence with the Frio River at the Choke Canyon Reservoir in Live Oak County was included in the State of Texas' Clean Water Act 303(d) list as impaired due to concentrations of dissolved oxygen below the minimum standards criteria in the lower 25-mi (40-km) portion of the stream (Bonner
Based on the best available scientific and commercial information, there is no evidence that pollution causing diminished water quality may be having an impact on the Nueces River shiner or its habitat. In 2005, the TPWD reported the Nueces River as having high water quality and exceptional aquatic life (Norris
The decline of native fishes in the southern United States generally is attributable to pervasive, complex habitat degradation across the landscape that both reduces and fragments habitat and increases isolation of fish populations (Warren
Edwards
We relied on the best available scientific and commercial information, which does not indicate that these or any factors are impacting the Nueces River shiner at a level that may impact the species. Therefore, we find that the Nueces River shiner is not in danger of extinction now or in the foreseeable future as a result of destruction, modification, or curtailment of its habitat or range.
Based on the best available scientific and commercial information, there is no evidence that impacts are occurring to the Nueces River shiner or its habitat under this factor. Other than the scientific studies referenced in this finding, this shiner is not used for any commercial, recreational, or educational purposes. Therefore, we find that the Nueces River shiner is not in danger of extinction now or in the foreseeable future as a result of overutilization for commercial, recreational, scientific, or educational purposes.
We are not aware of any research that has been conducted to examine disease or predation in the Nueces River shiner. Also, we are not aware of any nonnative species that may prey on the Nueces River shiner. Therefore, based on the best available scientific and commercial information, we find that the Nueces River shiner is not in danger of extinction now or in the foreseeable future as a result of disease or predation.
To determine if existing regulatory mechanisms are adequate to protect the Nueces River shiner, we evaluated agreements and laws in effect within the range of the species. One regulatory mechanism is the Clean Water Act (CWA), which was established in 1972. The CWA is the primary Federal law addressing water pollution in the United States. The purpose of the CWA is to stop pollutants from being discharged into waterways and to maintain water quality to provide a safe environment for fishing, swimming, and drinking. All navigable waters in the United States are covered under the CWA. The CWA provides guidelines and offers Federal financial assistance for identifying the causes of pollution. There are standards and regulations that must be adhered to by industries that discharge into waterways. The CWA sets forth water quality standards that are site-specific allowable pollutant levels for individual water bodies, such as rivers, lakes, streams, and wetlands. State agencies are required by the CWA to set water quality standards by designating uses for the water body (
In Texas, the Texas Commission on Environmental Quality (TCEQ), formerly known as Texas Natural Resource Conservation Commission, is the environmental agency that oversees water quality standards as required by the CWA (TCEQ 2010b, p. 19). The TCEQ strives to protect Texas' human and natural resources consistent with sustainable economic development, by providing clean air, clean water, and the safe management of waste (TCEQ 2010b, p. 4). The TCEQ key operations include, but are not limited to, issuing, administering, renewing, and modifying permits, water rights, licenses, or certifications for organizations and individuals whose activities have some potential or actual environmental impact that must be formally authorized by the agency; monitoring the current condition of a geographic area or natural resource, often through sampling or surveys; and identifying, verifying, and tracking violations of regulations and initiating enforcement actions in response to violations (TCEQ 2010b, p. 21). The TCEQ developed the Clean Rivers Program to implement the goals of the Texas Clean Rivers Act (TCRA), described below.
The TCRA, which was passed in 1991 by the Texas legislature, requires that basinwide water quality assessments be conducted for each river basin in Texas (Nueces River Authority 2010, p. 1). The goal of the TCRA is to provide waterways in the State with coordinated monitoring and protection, to identify the locations of water quality problems, and develop solutions on a river basin by river basin basis. The Clean Rivers Program is a partnership involving the TCEQ, other State agencies, river authorities, local governments, industry, and citizens (Nueces River Authority 2010, p. 1). Also, the Nueces River Authority was created in 1935 by special act of the 44th Texas Legislature codified as Article 8280-115 (Texas Water Code Auxiliary Laws, as amended). Under supervision of the TCEQ, the Nueces River Authority has broad authority to preserve, protect, and develop surface water resources, including flood control, irrigation, navigation, water supply, wastewater treatment, and water quality control. The Nueces River Authority serves all or parts of 22 counties in Texas, covering over 17,000 square miles (44,030 square kilometers), including the drainage area of the Nueces River and its tributaries and the adjoining coastal basins.
Under the Clean Rivers Program and using a watershed management approach, the Nueces River Authority and TCEQ work together to identify and evaluate surface water quality issues and to establish priorities for corrective action within the Nueces River basin (Nueces River Authority 2010, p. 1). The Nueces River Authority and TCEQ conduct quarterly water quality monitoring at routine monitoring sites, testing for such things as wastewater discharge, runoff from quarry operations, accidental spills, ammonia excreted by animals or from fertilizers, and agricultural runoff, among many other things (Nueces River Authority 2010, pp. 2-3). If water quality issues are detected, the Nueces River Authority and TCEQ may take appropriate corrective actions.
Lastly, the TPWD recognized the upper reaches of the West Nueces, Nueces, Frio, and Sabinal Rivers as ecologically significant river and stream
In conclusion, there are Federal and State regulatory protections currently in place offering some levels of protection for the Nueces River shiner from such factors as degraded water quality, pollution, and reservoir construction. However, as discussed in other
Global climate change, and associated effects on regional climatic regimes, is not well understood, but model predictions are that temperatures in the southwestern United States will continue to increase, with extreme weather events (such as heat waves, drought, and flooding) occurring with more frequency (Archer and Predick 2008, p. 24). Also, there is some scientific information suggesting that fish in streams in southwestern North America may be vulnerable to extirpation or extinction due to global climate change because many fish species are already living near their lethal thermal limits (Mathews and Zimmerman 1990, p. 26). Endemic species, like the Nueces River shiner, which only inhabits the spring-fed headwaters of the Nueces River, could be more vulnerable to rising stream temperatures because they may not be able to move to more suitable areas. On the other hand, spring-fed streams have nearly constant environmental conditions, such as temperature, due to the constancy of groundwater chemistry and discharge (Hoagstrom
Likewise, recent models on climate change have indicated that annual mean precipitation in the southwestern United States is likely to decrease (Intergovernmental Panel on Climate Change (IPCC) 2007, p. 887). Decreased precipitation could result in diminished water flows, which may cause losses in habitat diversity, reduce stream productivity, and degrade water quality (Norris
There are multiple hypothetical outcomes associated with climate change that could potentially affect the Nueces River shiner, but we lack predictive local or regional models on how climate change will specifically affect the Nueces River shiner or its habitat. Currently, we have no certainty regarding the timing, magnitude, or effects of impacts. Therefore, we find at this time that it is not possible to make reliable predictions of climate change effects on the status of the Nueces River shiner due to current limitations in available data and climate models. Based on the best available information and our current knowledge and understanding, we find that the Nueces River shiner is not in danger of extinction now or in the foreseeable future as a result of natural or other manmade threats affecting its continued existence.
As required by the Act, we considered the five factors in assessing whether the Nueces River shiner is threatened or endangered throughout all or a significant portion of its range. We examined the best scientific and commercial information available regarding the past, present, and future threats faced by the species. We reviewed the petition, information available in our files, other available published and unpublished information, and we consulted with recognized species experts and State agencies.
In considering what factors might constitute threats, we must look beyond the mere exposure of the species to the factor to determine whether the species responds to the factor in a way that causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat and we then attempt to determine how significant a threat it is. If the threat is significant, it may drive or contribute to the risk of extinction of the species such that the species warrants listing as threatened or endangered as those terms are defined by the Act. This does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The mere identification of factors that could impact a species negatively is not sufficient to compel a finding that listing is appropriate; we require evidence that these factors are operative threats that act on the species to the point that the species meets the definition of threatened or endangered under the Act.
Our review of all the available information does not support a determination that any current activities or activities in the foreseeable future threaten the Nueces River shiner or its habitat to the point that the species meets the definition of threatened or endangered under the Act. There is no evidence indicating that reduced water flow, improper grazing of livestock, pollution, and land use are affecting the species or its habitat. Overutilization, disease, and predation are not known concerns for this species. We find that no existing regulatory mechanisms are inadequate to limit or prevent possible negative impacts from human activities. Climate change could affect the habitat of the Nueces River shiner in the future, but we have no certainty regarding the timing, magnitude, or effects of impacts to the species.
Based on our review of the best available scientific and commercial information pertaining to the five factors, we find that there are no threats to indicate that the Nueces River shiner is in danger of extinction (endangered) or likely to become endangered within the foreseeable future (threatened)
The plateau shiner's range is in close proximity to the Nueces River shiner's range. Subsequently, many of the factors that may affect the Nueces River shiner also may affect the plateau shiner. Therefore, much of the information presented in this section is similar to that presented above for the Nueces River shiner. However, the plateau shiner does inhabit separate headwaters of the Sabinal and Frio Rivers in the Edwards Plateau region of Texas, whereas the Nueces River shiner inhabits the headwaters of the Nueces River. The Sabinal and Frio Rivers are part of the Nueces River basin because they flow into and become part of the Nueces River in south-central Texas. Because the plateau shiner occupies separate headwaters than the Nueces River shiner, we will discuss any potential threats that might uniquely affect the plateau shiner, but because these two shiner species occupy nearby headwaters and are very similar species, we will refer to the information above, where appropriate.
The following factors have the potential to affect the habitat or range of the plateau shiner: Livestock grazing, reduced water quantity, impaired water quality, and land use. Below, we discuss each of these factors and determine whether or not they constitute a threat to the plateau shiner.
While we know that livestock grazing occurs within the range of the species, we could find no information on the extent or intensity of historical, current, or future livestock grazing practices or impacts that grazing may be having on the species. As previously mentioned, Richardson and Gold (1995, p. 35) cited a personal communication in their study to conclude that much of the land in the Nueces River basin was used for agriculture, and that overgrazing by cattle posed serious problems for aquatic fauna. However, based on the best available information, we could find no evidence or data to indicate that improper livestock grazing affects the plateau shiner or its habitat. Therefore, we find that the plateau shiner is not in danger of extinction now or in the foreseeable future as a result of livestock grazing.
Please see
Based on the best available information, there is no evidence that diminished water quality caused by pollution may be occurring within the range of the plateau shiner at a level that affects the species or its habitat. In 2005, the TPWD noted the Frio and Sabinal Rivers as having high water quality and exceptional aquatic life (Norris
In 2000, a 47-mi (76-km) stream segment from where the West Frio River and the East Frio River flow together in Real County, at a point 110 yards (yd) (100 meters (m)) upstream of Highway 90 in Uvalde County, was included on the State of Texas' Clean Water Act 303(d) list as impaired due to concentrations of dissolved oxygen below criteria associated with exceptional aquatic life (Bonner
As part of the impairment verification monitoring project on this 47-mi (76-km) stream segment in the upper Frio River, Ecological Communications Corporation conducted biological data collection and analysis in September 2002, August 2003, and October 2003 (Walther and Palma 2004, p. 3). Based on the biological and habitat data collected by Ecological Communications Corporation, it appeared that the number and diversity of aquatic organisms were lower than the established standards set forth in the Texas Clean Water Act (Walther and Palma 2004, p. 8).
In 2008 and 2010, this same stream segment of the Frio River continued to remain on the 303(d) list because of concerns for impaired habitat, fish community, and organisms living at the bottom of the water (Nueces River Authority 2008, pp. 56-58; Nueces River Authority 2010, p. 17; TCEQ 2010a, p. 86). However, all testing resulted in data that were within TCEQ's normal range, which included dissolved oxygen, pH, total phosphorus, nitrates, ammonia, chlorophyll-a, nutrients, and bacteria (Nueces River Authority 2008, pp. 56-58; Nueces River Authority 2010, p. 17). Also, no hypotheses were given for the reasons this stream segment had aquatic life uses that were lower than established standards (Nueces River Authority 2008, 2010). Edwards
Another stretch of the Frio River, a segment 158 mi (254 km) long, from 110 yds (100 m) upstream of Highway 90 in Uvalde County to the confluence with Choke Canyon Reservoir in McMullen County, was placed on the 303(d) list as impaired for bacteria in 2008 and 2010 (Nueces River Authority 2008, pp. 66-71; Nueces River Authority 2010, p. 20; TCEQ 2010a, p. 86). However, this stretch of the Frio River is further downstream in south-central Texas, outside of the plateau shiner's range. Therefore, factors affecting this stream segment are not likely to affect the plateau shiner or its habitat.
As previously noted above under
In conclusion, even though a portion of the Frio River is listed as impaired by the State of Texas under the Clean Water Act 303(d) because of concerns for impaired habitat, fish community, and organisms living at the bottom of the water, a study conducted by Edwards
The primary land use factors that could affect the plateau shiner are recreation, agricultural activities, and land development. The upper Frio River is used extensively for recreation, and the extensive recreational usage is expected to continue in the future (Walther and Palma 2004, p. 1; Nueces River Authority 1998, p. 2). Although we could find no evidence to indicate that recreational usage may be impacting plateau shiner in the Sabinal River, it is reasonable to assume that recreational use does occur in this river. The Frio River is very popular for recreational activities such as canoeing, tubing, fishing, and wildlife viewing (Norris
We relied on the best available scientific and commercial information, which does not indicate that any of the factors discussed above are impacting the plateau shiner at a level that constitutes a threat to the species. Therefore, we find that the plateau shiner is not in danger of extinction now or in the foreseeable future as a result of the present or foreseeable destruction, modification, or curtailment of its habitat or range.
Based on the best available scientific and commercial information, there is no evidence that impacts are occurring to the plateau shiner or its habitat under this factor. Other than the scientific studies referenced in this finding, the plateau shiner is not used for any commercial, recreational, or educational purposes. Therefore, we find that the plateau shiner is not in danger of extinction now or in the foreseeable future as a result of overutilization for commercial, recreational, scientific, or educational purposes.
As with the Nueces River shiner, we are not aware of any research that has been conducted to specifically examine disease or predation in the plateau shiner. There was no mention of disease or predation in our review of the best available information. Also, we are not aware of any nonnative species that may prey on the plateau shiner. Therefore, we find that the plateau shiner is not in danger of extinction now or in the foreseeable future as a result of disease or predation.
As we discussed in more detail above under
The same impacts discussed above under the
As required by the Act, we considered the five factors in assessing whether the plateau shiner is threatened or endangered throughout all or a significant portion of its range. We examined the best scientific and commercial information available regarding the past, present, and future threats faced by the species. We reviewed the petition, information available in our files, other available published and unpublished information, and we consulted with recognized species experts and State agencies.
In considering what factors might constitute threats, we must look beyond the mere exposure of the species to the factor to determine whether the species responds to the factor in a way that causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat and we then attempt to determine how significant a threat it is. If the threat is significant, it may drive or contribute to the risk of extinction of the species such that the species warrants listing as threatened or endangered as those terms are defined by the Act. This does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The mere identification of factors that could impact a species negatively is not sufficient to compel a finding that listing is appropriate; we require evidence that these factors are operative threats that act on the species to the point that the species meets the definition of threatened or endangered under the Act.
Our review of the best available information does not support a determination that any current activities or activities in the foreseeable future threaten the plateau shiner or its habitat to the point that the species meets the definition of threatened or endangered under the Act. There is no evidence indicating that reduced water flow, improper grazing by livestock, diminished water quality caused by pollution, or land use is affecting the species or its habitat. Overutilization, disease, and predation are not concerns for this species. We find no existing regulatory mechanisms that are inadequate to limit or prevent possible negative impacts from human activities. Climate change is another factor that could affect the habitat of the plateau shiner in the future, but we have no certainty regarding the timing, magnitude, or effects of impacts to the species.
Based on our review of the best available scientific and commercial information pertaining to the five factors, we find that there are no threats to indicate that the species is in danger of extinction (endangered), or likely to become endangered within the foreseeable future (threatened), throughout its range. Therefore, we find that listing the plateau shiner as a threatened or endangered species is not warranted throughout its range at this time.
After assessing whether the two species are threatened or endangered throughout their ranges, we next consider whether either a significant portion of the Nueces River and plateau shiners' ranges or a distinct population segment (DPS) of either or both species meets the definition of endangered or is likely to become endangered in the foreseeable future (threatened).
Having determined that the Nueces River and plateau shiners do not meet the definition of a threatened or endangered species throughout all of their ranges, we must next consider whether there are any significant portions of the range where either species are in danger of extinction or is likely to become endangered in the foreseeable future.
The Act defines an endangered species as one “in danger of extinction throughout all or a significant portion of its range,” and a threatened species as one “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The term “significant portion of its range” is not defined by the statute. For the purposes of this finding, a portion of the species' range is “significant” if it is part of the current range of the species, and it provides a crucial contribution to the representation, resiliency, or redundancy of the species. For the contribution to be crucial it must be at a level such that, without that portion, the species would be in danger of extinction.
In determining whether a species is threatened or endangered in a significant portion of its range, we first identify any portions of the range of the species that warrant further consideration. The range of a species can theoretically be divided into portions an infinite number of ways. However, there is no purpose to analyzing portions of the range that are not reasonably likely to be significant and threatened or endangered. To identify only those portions that warrant further consideration, we determine whether there is substantial information indicating that: (1) The portions may be significant, and (2) the species may be in danger of extinction there or likely to become so within the foreseeable future. In practice, a key part of this analysis is whether the threats are geographically concentrated in some way. If the threats to the species are essentially uniform throughout its range, no portion is likely to warrant further consideration. Moreover, if any concentration of threats applies only to portions of the species' range that clearly would not meet the biologically based definition of “significant” (
If we identify portions that warrant further consideration, we then determine whether the species is threatened or endangered in these portions of its range. Depending on the biology of the species, its range, and the threats it faces, it might be more efficient for us to address either the “significant” question first, or the status question first. Thus, if we determine that a portion of the range is not “significant,” we do not need to determine whether the species is in endangered or threatened there; if we determine that the species is not endangered or threatened in a portion of its range, we do not need to determine if that portion is “significant.”
Applying the process described above for determining whether a species is threatened or endangered in a significant portion of its range, we consider status first to determine if any threats or potential threats acting individually or collectively threaten or endanger the species in a portion of its range. We have analyzed the threats to the degree possible, and determined they are essentially uniform throughout both species' ranges.
There is no information to suggest that any portion of the ranges of either species contributes more significantly to species than any other portion of their ranges. There is no information to suggest that any portion of their ranges is of better quality than any other portion, or that any portion includes important concentrations of certain types of habitat that are necessary for the species to carry out its life-history functions. As a result, we conclude that there is no information that a particular portion of the Nueces River or plateau shiners' range warrants further consideration as threatened or endangered.
We do not find the Nueces River shiner or plateau shiner to be in danger of extinction now, nor is either species likely to become endangered within the foreseeable future throughout all or a significant portion of their range. Therefore, listing either species as threatened or endangered under the Act is not warranted at this time.
We request that you submit any new information concerning the status of, or threats to, the species to our Austin Ecological Services Field Office (see
Under the Service's Policy Regarding the Recognition of Distinct Vertebrate Population Segments Under the Endangered Species Act (61 FR 4722, February 7, 1996), three elements are considered in the decision concerning the establishment and classification of a possible DPS. These are applied similarly for additions to or removal from the Federal List of Endangered and Threatened Wildlife. These elements include:
(1) The discreteness of a population in relation to the remainder of the species to which it belongs;
(2) The significance of the population segment to the species to which it belongs; and
(3) The population segment's conservation status in relation to the Act's standards for listing, delisting, or reclassification (
Under the DPS policy, a population segment of a vertebrate taxon may be considered discrete if it satisfies either one of the following conditions:
(1) It is markedly separated from other populations of the same taxon as a consequence of physical, physiological, ecological, or behavioral factors. Quantitative measures of genetic or morphological discontinuity may provide evidence of this separation.
(2) It is delimited by international governmental boundaries within which differences in control of exploitation, management of habitat, conservation status, or regulatory mechanisms exist that are significant in light of section 4(a)(1)(D) of the Act.
We determine, based on a review of the best available information, that neither the Nueces River shiner nor the plateau shiner meet the discreteness conditions of the 1996 DPS policy. Neither species has populations that are known to be markedly separate from other populations of the same taxon, nor does either species have populations delimited by international governmental boundaries. Therefore, these population segments do not qualify as a DPS under our policy and are not listable entities under the Act.
The DPS policy is clear that significance is analyzed only when a population segment has been identified as discrete. Because no population segment met the discreteness element for either the Nueces River or plateau shiners, neither species qualifies as a DPS under the Service's DPS policy. Therefore, we will not conduct an evaluation of significance.
A complete list of references cited is available on the Internet at
The primary authors of this notice are staff members of the Southwest Regional Office.
The authority for this section is section 4 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Administrative Conference of the United States.
Notice.
The Administrative Conference of the United States adopted four recommendations at its Fifty-fourth Plenary Session. The appended recommendations address electronic rulemaking, rulemaking comments, contractor ethics, and video hearings.
For Recommendation 2011-1, Emily Schleicher Bremer, Attorney Advisor; for Recommendations 2011-2 and 2011-3, Reeve Bull, Attorney Advisor; and for Recommendation 2011-4, Funmi Olorunnipa, Attorney Advisor. For all four recommendations the address and phone number is: Administrative Conference of the United States, Suite 706 South, 1120 20th Street, NW., Washington, DC 20036; Telephone 202-480-2080.
The Administrative Conference Act, 5 U.S.C. 591-596, established the Administrative Conference of the United States. The Conference studies the efficiency, adequacy, and fairness of the administrative procedures used by Federal agencies and makes recommendations for improvements to agencies, the President, Congress, and the Judicial Conference of the United States (5 U.S.C. 594(1)). For further information about the Conference and its activities, see
At its Fifty-fourth Plenary Session, held June 16-17, 2011, the Assembly of the Conference adopted four recommendations. Recommendation 2011-1, “Legal Considerations in e-Rulemaking,” provides guidance on issues that have arisen in light of the change from paper to electronic rulemaking procedures. It recommends that agencies (1) consider using content analysis software to reduce the need for agency staff to spend time reading identical or nearly identical comments, (2) provide timely, online access to all studies and reports upon which they rely, (3) implement appropriate procedures for the handling of confidential, trade secret, or other protected information, (4) consider the potential need to revise Privacy Act notices and recordkeeping schedules to accommodate e-Rulemaking, and (5) replace paper files with electronic records in the rulemaking docket and in the record for appellate review.
Recommendation 2011-2, “Rulemaking Comments,” recognizes innovations in the commenting process that could promote public participation and improve rulemaking outcomes. The recommendation encourages agencies (1) to provide public guidance on how to submit effective comments, (2) to leave comment periods open for sufficient periods, generally at least 60 days for significant regulatory actions and 30 days for other rulemakings, (3) to post comments received online within a specified period after submission, (4) to announce policies for anonymous and late-filed comments, and (5) to consider when reply and supplemental comment periods are useful.
Recommendation 2011-3, “Compliance Standards for Government Contractor Employees—Personal Conflicts of Interest and Use of Certain Non-Public Information” responds to agencies' need to protect integrity and the public interest when they rely on contractors. The Conference recommends that the Federal Acquisition Regulatory Council provide model language for agency contracting officers to use when negotiating or administering contracts that pose particular risks that employees of contractors could have personal conflicts of interest or could misuse non-public information.
Recommendation 2011-4, “Agency Use of Video Hearings: Best Practices and Possibilities for Expansion,” encourages agencies, especially those with a high volume of cases, to consider the use of video teleconferencing technology for hearings and other administrative proceedings. The recommendation sets forth factors agencies should consider when deciding whether to use video teleconferencing and best practices for the implementation of this technology.
The Appendix (below) sets forth the full text of these four recommendations. The Conference will transmit them to affected agencies, to appropriate committees of the United States Congress, and (in the case of 2011-1) to the Judicial Conference of the United States. The recommendations are not binding, so the relevant agencies, the Congress and the courts will make decisions on their implementation.
The Conference based these recommendations on research reports that it has posted at:
Agencies are increasingly turning to e-Rulemaking to conduct and improve regulatory proceedings. “E-Rulemaking” has been defined as “the use of digital technologies in the development and implementation of regulations”
A system that brings several of these activities together is operated by the eRulemaking program management office (PMO), which is housed at the Environmental Protection Agency and funded by contributions from partner Federal agencies. This program contains two components: Regulations.gov, which is a public Web site where members of the public
Federal regulators, looking to embrace the benefits of e-Rulemaking, face uncertainty about how established legal requirements apply to the web. This uncertainty arises because the APA, enacted in 1946, still provides the basic framework for notice-and-comment rulemaking. While this framework has gone largely unchanged, the technological landscape has evolved dramatically.
The Conference has therefore examined some of the legal issues agencies face in e-Rulemaking and this recommendation provides guidance on these issues. The Conference has examined the following issues:
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This recommendation seeks to provide all agencies, including those that do not participate in Regulations.gov, with guidance to navigate some of the issues they may face in e-Rulemaking.
1. Given the APA's flexibility, agencies should:
(a) Consider whether, in light of their comment volume, they could save substantial time and effort by using reliable comment analysis software to organize and review public comments.
(1) While 5 U.S.C. 553 requires agencies to consider all comments received, it does not require agencies to ensure that a person reads each one of multiple identical or nearly identical comments.
(2) Agencies should also work together and with the eRulemaking program management office (PMO), to share experiences and best practices with regard to the use of such software.
(b) Work with the eRulemaking PMO and its interagency counterparts to explore providing a method, including for members of public, for flagging inappropriate or protected content, and for taking appropriate action thereon.
(c) Work with the eRulemaking PMO and its interagency counterparts to explore mechanisms to allow a commenter to indicate prior to or upon submittal that a comment filed on Regulations.gov contains confidential or trade secret information.
(d) Confirm they have procedures in place to review comments identified as containing confidential or trade secret information. Agencies should determine how such information should be handled, in accordance with applicable law.
2. Agencies should assess whether the Federal Docket Management System (FDMS) System of Records Notice provides sufficient Privacy Act compliance for their uses of Regulations.gov. This could include working with the eRulemaking PMO to consider whether changes to the FDMS System of Records Notice are warranted.
3. The APA provides agencies flexibility to use electronic records in lieu of paper records. Additionally, the National Archives and Records Administration has determined that agencies are not otherwise legally required, at least under certain circumstances, to retain paper copies of comments properly scanned and included in an approved electronic recordkeeping system. The circumstances under which such destruction is permitted are governed by each agency's records schedules. Agencies should examine their record schedules and maintain electronic records in lieu of paper records as appropriate.
4. To facilitate the comment process, agencies should include in a publicly available electronic docket of a rulemaking proposal all studies and reports on which the proposal for rulemaking draws, as soon as practicable, except to the extent that they would be protected from disclosure in response to an appropriate Freedom of Information Act request.
5. Agencies should include in the electronic docket a descriptive entry or photograph for all physical objects received during the comment period.
6. In judicial actions involving review of agency regulations, agencies should work with parties and courts early in litigation to provide electronic copies of the rulemaking record in lieu of paper copies, particularly where the record is of substantial size. Courts should continue their efforts to embrace electronic filing and minimize requirements to file paper copies of rulemaking records.
7. In implementing their responsibilities under the Federal Records Act, agencies should ensure their records schedules include records generated during e-Rulemaking.
One of the primary innovations associated with the Administrative Procedure Act (“APA”) was its implementation of a comment period in which agencies solicit the views of interested members of the public on proposed rules.
In a December 2006 report titled “Interim Report on the Administrative Law, Process and Procedure Project for the 21st Century,” the Subcommittee on Commercial and Administrative Law of the United States House of Representatives' Committee on the Judiciary identified a number of questions related to rulemaking comments as areas of possible study by the Administrative Conference.
• Should there be a required, or at least recommended, minimum length for a comment period?
• Should agencies immediately make comments publicly available? Should they permit a “reply comment” period?
• Must agencies reply to all comments, even if they take no further action on a rule for years? Do comments eventually become sufficiently “stale” that they could not support a final rule without further comment?
• Under what circumstances should an agency be permitted to keep comments confidential and/or anonymous?
• What effects do comments actually have on agency rules?
The Conference has studied these questions and other, related issues concerning the “comment” portion of the notice-and-comment rulemaking process. The Conference also has a concurrent recommendation that deals with separate matters, focusing specifically on legal issues implicated by the rise of e-rulemaking. See Administrative Conference of the United States, Recommendation 2011-1, Legal Considerations in e-Rulemaking.
The Conference believes that the comment process established by the APA is fundamentally sound. Nevertheless, certain innovations in the commenting process could allow that process to promote public participation and improve rulemaking outcomes more effectively. In this light, the Conference seeks to highlight a series of “best practices” designed to increase the opportunities for public participation and enhance the quality of information received in the commenting process. The Conference recognizes that different agencies have different approaches to rulemaking and therefore recommends that individual agencies decide whether and how to implement the best practices addressed.
In identifying these best practices, the Conference does not intend to suggest that it has exhausted the potential innovations in the commenting process. Individual agencies and the Conference itself should conduct further empirical analysis of notice-and-comment rulemaking, should study the effects of the proposed recommendations to the extent they are implemented, and should adjust and build upon the proposed processes as appropriate.
1. To promote optimal public participation and enhance the usefulness of public comments, the eRulemaking Project Management Office should consider publishing a document explaining what types of comments are most beneficial and listing best practices for parties submitting comments. Individual agencies may publish supplements to the common document describing the qualities of effective comments. Once developed, these documents should be made publicly available by posting on the agency Web site, Regulations.gov, and any other venue that will promote widespread availability of the information.
2. Agencies should set comment periods that consider the competing interests of promoting optimal public participation while ensuring that the rulemaking is conducted efficiently. As a general matter, for “[s]ignificant regulatory action[s]” as defined in Executive Order 12,866, agencies should use a comment period of at least 60 days. For all other rulemakings, they should generally use a comment period of at least 30 days. When agencies, in appropriate circumstances, set shorter comment periods, they are encouraged to provide an appropriate explanation for doing so.
3. Agencies should adopt stated policies of posting public comments to the Internet within a specified period after submission. Agencies should post all electronically submitted comments on the Internet and should also scan and post all comments submitted in paper format.
4. The eRulemaking Project Management Office and individual agencies should establish and publish policies regarding the submission of anonymous comments.
5. Agencies should adopt and publish policies on late comments and should apply those policies consistently within each rulemaking. Agencies should determine whether or not they will accept late submissions in a given rulemaking and should announce the policy both in publicly accessible forums (
6. Where appropriate, agencies should make use of reply comment periods or other opportunities for receiving public input on submitted comments, after all comments have been posted. An opportunity for public input on submitted comments can entail a reply period for written comments on submitted comments, an oral hearing, or some other means for input on comments received.
7. Although agencies should not automatically deem rulemaking comments to have become stale after any fixed period of time, agencies should closely monitor their rulemaking dockets, and, where an agency believes the circumstances surrounding the rulemaking have materially changed or the rulemaking record has otherwise become stale, consider the use of available
The Conference believes that it is important to ensure that services provided by government contractors—particularly those services that are similar to those performed by government employees—are performed with integrity and that the public interest is protected. In that light, the Conference recommends that the Federal Acquisition Regulatory Council (“FAR Council”) promulgate model language in the Federal Acquisition Regulation (“FAR”)
In recent years, the Federal government has increasingly relied upon private contractors to perform services previously provided in-house by civil servants.
Government employees are subject to various statutes and regulations that create a comprehensive ethics regime governing, among other things, their financial interests, use of government resources, outside activities, and activities in which they may engage after leaving government.
Finally, certain contracting firms, most notably some performing work for the Department of Defense, have voluntarily adopted internal ethics codes, some of which provide fairly detailed rules relating to such important ethical issues as personal conflicts of interest, confidentiality, gifts and gratuities, protection of government property, and other major ethical areas, and that establish internal disciplinary processes for employee violations of such codes.
By dint of their work for and as part of the government, contractors performing certain services, particularly those that can influence government decisions or have access to non-public information, are in a position of public trust and responsibility for the protection of public resources, as is the government itself. It is therefore critical that their employees behave with the same high degree of integrity as government employees and do not exploit positions of public trust for improper personal gain. Whether or not there is any widespread pattern of ethical abuses, the existence of significant ethical risks can erode public confidence in the government procurement process and in the government itself. Accordingly, it is entirely appropriate to hold those contractors and their employees to a high ethical standard of conduct.
As noted above, a significant disparity currently exists between the ethical standards applicable to government employees, which are comprehensive and consist predominantly of specific rules, and those applicable to contractor employees, which are largely developed and applied on an ad hoc basis and involve significantly vaguer standards.
Of course, the mere existence of a disparity between government employee and contractor ethics standards is not itself conclusive evidence that contractor employee ethics standards should be expanded. Indeed, simply applying the rules governing the ethics of government employees (particularly those dealing with financial disclosures to guard against personal conflicts of interest) directly to contractors could create excessive and unnecessary compliance burdens for contractors and monitoring costs for agencies.
The most common ethical risks currently addressed in specific agency supplements to the FAR (as well as in contractors' own internal codes of conduct) include personal conflicts of interest, gifts, misuse of government property, and misuse of non-public information.
On the other hand, a contractor employee is less likely to face sanctions under existing laws if he or she acts despite a personal conflict of interest or exploits non-public information for personal gain. Though the Anti-Kickback Act would prevent a contractor employee's directing business to a third party in exchange for an actual payment,
In this light, various governmental entities that have studied issues of contractor ethics have singled out preventing personal conflicts of interest and misuse of non-public information as areas that need to be strengthened.
The FAR contains provisions identifying activities that “approach” being “inherently governmental functions,”
• Developing agency policy or regulations.
• Providing alternative dispute resolution services on contractual matters; legal advice involving interpretation of statutes or regulations; significant substantive input relevant to agency decision-making; or professional advice for improving the effectiveness of Federal management processes and procedures.
• Serving as the primary authority for managing or administering a project or operating a facility.
• Preparing budgets, and organizing and planning agency activities.
• Supporting substantive acquisition planning
• Evaluating another contractor's performance or contract proposal.
• Assisting in the development of a statement of work or in contract management.
• Participating as a technical advisor to a source selection board or as a member of a source evaluation board (i.e., boards designed to select or evaluate bids or proposals for procurement contracts).
• Contracts in which certain employees will receive access to information relating to an agency's deliberative processes, management operations, or staff that is not generally released to the public.
• Contracts in which certain employees will have access to certain business-related information, including trade secrets, non-public financial information, or other non-public information that could be exploited for financial gain.
• Contracts in which certain employees will have access to personally identifying or other non-public personal information, such as social security numbers, bank account numbers, or medical records.
1. The Federal Acquisition Regulatory Council (“FAR Council”) should promulgate model language for use in contracts posing a high risk of either personal conflicts of interest or misuse of certain non-public information.
2. The model FAR provisions or clauses should apply to PCI-Risk and Information-Risk Contracts.
3. Agencies should have the discretion whether to use or modify the model FAR provisions or clauses. An agency contracting officer would have the option to use the model FAR provisions or clauses when soliciting and/or contracting for activities falling into the PCI-Risk or Information-Risk categories. Because the provisions or clauses would be optional, the contracting agency would enjoy the discretion to modify the FAR language on a case-by-case basis to fit the circumstances, and to decide to forego including any such language if it deems that the particular contract at issue is unlikely to pose a significant risk of personal conflicts of interest or misuse of non-public information by contractor personnel. Nevertheless, the FAR Council should encourage contracting officers to use the model FAR language when applicable.
4. The FAR should include model provisions or clauses for use in PCI-Risk procurements. The FAR Council should encourage agencies to include these model provisions or clauses in contracting actions involving PCI-Risk procurements.
The proposed FAR provisions or clauses should require the contractor to certify
5. The FAR should include model provisions or clauses for use in Information-Risk procurements. The FAR Council should encourage agencies to include these model provisions or clauses in contracting actions involving Information-Risk procurements.
The FAR language should require the contractor to ensure that its employees who have access to certain non-public information identified as posing an information risk are made aware of their duties to maintain the secrecy of such information and to avoid using it for personal gain. To the extent an employee breaches either of these obligations, the contractor should be responsible for reporting the breach to the government, minimizing the effects of the breach, and, where appropriate, disciplining the offending employee. A contractor's failure to observe these contractual requirements may be grounds for contract termination. In addition, a contractor that proves repeatedly incapable or unwilling to fulfill its duties may be subject to suspension or debarment in appropriate circumstances.
6. Agencies not covered by the FAR also should consider using or modifying the model FAR provisions or clauses when negotiating contracts for activities falling in either of the “high risk” categories. Agencies and government instrumentalities not covered by the FAR should nevertheless familiarize themselves with the FAR language promulgated in response to this recommendation. To the extent that they plan to enter into contracts for activities listed in the PCI-Risk or Information-Risk categories, they should consider employing or, if necessary, modifying these solicitation provisions and/or contract clauses.
Since the early 1990s, video teleconferencing technology (“VTC”) has been explored by various entities in the public and private sectors for its potential use in administrative hearings and other adjudicatory proceedings.
Certain Federal agencies, such as the Social Security Administration's Office of Disability Adjudication and Review (“ODAR”), the Department of Veteran Affairs' Board of Veteran Appeals (“BVA”) and the Department of Justice's Executive Office for Immigration Review (“EOIR”) have taken advantage of VTC for various adjudicatory proceedings. For example, in 2010, ODAR conducted a total of 120,624 video hearings, and a cost-benefit analysis conducted for the agency by outside consultants found that ODAR's current use of video hearings saves the agency a projected estimated amount of approximately $59 million dollars annually and $596 million dollars over a 10-year period. A study by the agency has also determined that the use of VTC has no effect on the outcome of cases.
Other agencies, such as the Railroad Retirement Board, the United States Postal Service, the Department of Health and Human Services' Office of Medicare Hearings and Appeals, specifically have regulations allowing for the use of video teleconferencing.
Despite the fact that some agencies within the Federal government have been using VTC to conduct mass adjudications for years, other agencies have yet to employ such technology. This may be because the use of VTC for administrative hearings is not without controversy. Some applaud the use of VTC by administrative agencies because it offers potential efficiency benefits, such as
Recognizing both the praise for and critique of the use of VTC in administrative hearings and other adjudicatory proceedings, the Administrative Conference issues this Recommendation regarding the use of VTC in Federal agencies with high volume caseloads. The Conference has a long standing commitment to the values inherent in the agency adjudicatory process: Efficiency, fairness and acceptability/satisfaction.
Accordingly, this Recommendation is directed at those agencies with high volume caseloads that do not currently use VTC as a regular practice in administrative hearings and/or other adjudicatory proceedings and that may benefit from the use of it to improve efficiency and/or reduce costs. Agencies with high volume caseloads are likely to receive the most benefit and/or cost savings from the use of VTC. However, the Conference encourages all agencies (including those with lower volume caseloads) to consider whether the use of VTC would be beneficial as a way to improve efficiency and/or reduce costs while also preserving the fairness and participant satisfaction of proceedings. This Recommendation sets forth some non-exclusive criteria that agencies should consider. For those agencies that determine that the use of VTC would be beneficial, this Recommendation also sets forth best practices provided in part by agencies currently using VTC.
1. Federal agencies with high volume caseloads should consider using video teleconferencing technology (“VTC”) to conduct administrative hearings and other aspects of adjudicatory proceedings. Agencies with lower volume caseloads may also benefit from this recommendation.
2. Federal agencies with high volume caseloads should consider the following non-exclusive criteria when determining whether to use video teleconferencing technology in administrative hearings and other adjudicatory proceedings:
(a) Whether an agency's use of VTC is legally permissible under its organic legislation and other laws;
(b) Whether the nature and type of administrative hearings and other adjudicatory proceedings conducted by the agency are conducive to the use of VTC;
(c) Whether VTC can be used without affecting the outcome of cases heard by the agency;
(d) Whether the agency's budget would allow for investment in appropriate and secure technology given the costs of VTC;
(e) Whether the use of VTC would create cost savings, such as savings associated with reductions in personnel travel and with increased productivity resulting from reductions in personnel time spent on travel;
(f) Whether the use of VTC would result in a reduction of the amount of wait time for an administrative hearing;
(g) Whether users of VTC, such as administrative law judges, hearing officers and other court staff, parties, witnesses and attorneys (or other party representatives), would find the use of such technology beneficial;
(h) Whether the agency's facilities and administration, both national and regional (if applicable), can be equipped to handle the technology and administration required for use of VTC;
(i) Whether the use of VTC would adversely affect the representation of a party at an administrative hearing or other adjudicatory proceeding; and
(j) Whether the communication between the various individuals present at a hearing or proceeding (including parties, witnesses, judges, hearing officers and other agency staff, translators and attorneys (or other party representatives)) would be adversely affected.
3. Federal agencies with high volume caseloads that decide to use video teleconferencing technology to conduct administrative hearings and other adjudicatory proceedings should consider the following best practices:
(a) Use VTC on a voluntary basis and allow a party to have an in-person hearing or proceeding if the party chooses to do so.
(b) Periodically evaluate the use of VTC to make sure that the use is outcome-neutral (i.e., does not affect the decision rendered) and that the use is meeting the needs of its users.
(c) Solicit feedback and comments (possibly through notice-and-comment rulemaking) about VTC from those who would use it regularly (e.g., administrative law judges, hearing officers and other administrative staff, parties, witnesses and attorneys (or other party representatives)).
(d) Begin the use of VTC with a pilot program and then evaluate the pilot program before moving to wider use.
(e) Structure training at the outset of implementation of VTC use and have technical support available for troubleshooting and implementation questions.
(f) Consult the staff of the Administrative Conference of the United States and/or officials at other agencies that have used VTC for best practices, guidance, advice, and the possibilities for shared resources and collaboration.
Agricultural Marketing Service, USDA.
Request for comments.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), this document announces the Agricultural Marketing Service's (AMS) intention to request approval from the Office of Management and Budget, for an extension of the currently approved information collection used to compile and generate the Federally Inspected Estimated Daily Slaughter Report.
Comments must be received by October 11, 2011.
Comments should be submitted electronically at
Submitted comments will be available for public inspection at
Jennifer Porter, Deputy Director, Livestock and Grain Market News Division, AMS, USDA, by telephone at (202) 720-6231, or via e-mail at
Under this market news program, USDA issues a market news report estimating daily livestock slaughter under Federal inspection. This report is compiled by AMS on a voluntary basis in cooperation with the livestock and meat industry. Market news reporting must be timely, accurate, and continuous if it is to be useful to producers, processors, and the trade in general. The daily livestock slaughter estimates are provided at the request of industry and are used to make production and marketing decisions.
The Daily Estimated Livestock Slaughter Under Federal Inspection Report is used by a wide range of industry contacts, including packers, processors, producers, brokers and retailers of meat and meat products. The livestock and meat industry requested that USDA issue slaughter estimates (daily and weekly), by species, for cattle, calves, hogs and sheep in order to assist them in making immediate production and marketing decisions and as a guide to the volume of meat in the marketing channel. The information requested from respondents includes their estimation of the current day's slaughter at their plant(s) and the actual slaughter for the previous day. Also, the Government is a large purchaser of meat and related products and this report assists other Government agencies in providing timely information on the quantity of meat entering the processing channels.
The information must be collected, compiled, and disseminated by an impartial third-party, in a manner which protects the confidentiality of the reporting entity. AMS is in the best position to provide this service.
Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (2) the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All responses to this document will be summarized and included in the request for OMB approval. All comments will become a matter of public record.
Office of the Under Secretary, Research, Education, and Economics, Agricultural Research Service.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, 5 U.S.C. App., the United States Department of Agriculture announces a meeting of the Advisory Committee on Biotechnology and 21st Century Agriculture (AC21).
August 30-31, 2011.
Rooms 104A and 107A, USDA Jamie L. Whitten Federal Building, 12th Street and Jefferson Drive, SW., Washington, DC 20250.
Michael Schechtman, Designated Federal Official, Office of the Deputy Secretary, USDA, 202B Jamie L. Whitten Federal Building, 12th and Independence Avenue, SW., Washington, DC 20250; Telephone (202) 720-3817; Fax (202) 690-4265; E-mail
The first meeting of the reconstituted AC21 has been scheduled for August 30-31, 2011. The AC21 consists of members representing the biotechnology industry, the organic food industry, farming communities, the seed industry, food manufacturers, state government, consumer and community development groups, as well as academic researchers and a medical doctor. In addition, representatives from the Departments of Commerce, Health and Human Services, and State, and the Environmental Protection Agency, the Council on Environmental Quality, and the Office of the United States Trade Representative have been invited to serve as “ex officio” members. The Committee meeting will be held from 8:30 a.m. to 5 p.m. on each day. The topics to be discussed will include: (1) Rules of procedure for the AC21; (2) assessment of informational needs of AC21 members; (3) organization of the AC21's work in developing practical recommendations on approaches for bolstering coexistence among different agricultural production methods; and (4) preliminary presentations and introductory discussions on above work topic.
Background information regarding the work and membership of the AC21 will
The meeting will be open to the public, but space is limited. If you would like to attend the meetings, you must register by contacting Ms. Dianne Fowler at (202) 720-4074, by fax at (202) 720-3191 or by e-mail at
Food and Nutrition Service (FNS), USDA.
Notice.
In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on proposed information collection. The proposed collection is a new collection for the purpose of conducting the Study of the Effectiveness of Efforts to Increase Supplemental Nutrition Assistance Program Participation Among Medicare's Extra Help Population Pilot Projects.
Written comments must be received on or before October 11, 2011.
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 has 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 that were 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 the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All written comments will be open for public inspection at the office of the Food and Nutrition Service during regular business hours (8:30 a.m. to 5 p.m., Monday through Friday) at 3101 Park Center Drive, Alexandria, VA 22302, Room 1014.
All responses to this notice will be summarized and included in the request for Office of Management and Budget (OMB) approval. All comments will be a matter of public record.
Requests for additional information or copies of this information collection should be directed to Steven Carlson at 703-305-2017.
FNS invited State agencies to submit grant applications to use data from the Extra Help program to reduce the barriers to SNAP participation experienced by Extra Help applicants. FNS is funding three pilot projects to address some of these challenges through three approaches: (1) Targeted outreach in Washington, (2) simplified eligibility criteria in Pennsylvania, and (3) standardized SNAP benefits in New Mexico.
The overarching goal of the evaluation is to understand how the pilot programs operated, who they served, and the extent to which they generated any measurable effects on participation, cost, and SNAP benefits. As part of the evaluation, FNS will (1) Obtain a detailed description of each pilot project; (2) obtain a detailed description of the implementation process of each pilot project; (3) assess the effect of each pilot project on SNAP participation among the target population; (4) assess the effect of each pilot project on SNAP benefits; (5) assess the federal, State, and local administrative costs of each pilot project, including both implementation costs and operational costs; (6) assess the overall pilot experience among SNAP participants and non-participants within the target group; (7) assess the effect of each pilot project on SNAP case and payment errors; (8) assess the sustainability of each pilot project and the prerequisites for statewide expansion, including describing administrative barriers that may hinder replication of the pilot projects, and (9) assess and compare the relative promise of alternative models.
The information collection being requested for this project is to address the assessment of overall pilot experience among SNAP participants and eligible non-participants (objective 6 above). In order to accomplish this, the evaluation will solicit feedback from
Food and Nutrition Service, USDA.
Notice.
In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on this proposed information collection. This collection is a new collection for the Food and Nutrition Service to examine the characteristics, circumstances, program dynamics, and benefit redemption patterns of participants whose households reported zero gross income in their applications for participation in the Supplemental Nutrition Assistance Program (SNAP).
Written comments on this notice must be received on or before October 11, 2011.
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 that were used; and (c) ways to enhance the quality, utility and clarity of the information to be collected.
Written comments may be sent to: Steven Carlson, Office of Research and Analysis, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 1014, Alexandria, VA 22302. Comments may also be submitted via fax to the attention of Steven Carlson at (703) 305-2576 or via e-mail to
All written comments will be open for public inspection at the office of the Food and Nutrition Service during regular business hours (8:30 a.m. to 5 p.m., Monday through Friday) at 3101 Park Center Drive, Room 1014, Alexandria, Virginia 22302.
All responses to this notice will be summarized and included in the request for OMB approval. All comments will be also become a matter of public record.
Requests for additional information or copies of this information collection should be directed to Steven Carlson at 703-305-2017. Information requests submitted through e-mail should refer to the title of this proposal and/or the OMB approval number in the subject line.
Forest Service, USDA.
Notice of meeting.
The Hiawatha East Resource Advisory Committee will meet in Kincheloe, Michigan. The committee is meeting as authorized under the Secure Rural Schools and Community Self-Determination Act (Pub. L. 110-343) and in compliance with the Federal Advisory Committee Act. The purpose is to review project proposals.
The meeting will be held on August 25, 2011, and will begin at 6 p.m.
The meeting will be held at the Chippewa County 911 Center, 4657 Industrial Park Drive, Kincheloe, MI. Written comments should be sent to Janel Crooks, Hiawatha National Forest, 2727 North Lincoln Road, Escanaba, MI 49829. Comments may also be sent via e-mail to
All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at Hiawatha National Forest, 2727 North Lincoln Road, Escanaba, MI. Visitors are encouraged to call ahead to 906-786-4062 to facilitate entry into the building.
Janel Crooks, RAC coordinator, USDA, Hiawatha National Forest, 2727 North Lincoln Road, Escanaba, Michigan 49862; (906) 786-4062; e-mail
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Standard Time, Monday through Friday.
The meeting is open to the public. The following business will be conducted: (1) Discuss options for monitoring approved projects, (2) Review budget, if received at that time, and (3) Public Comment. Persons who wish to bring related matters to the attention of the Committee may file written statements with the Committee staff before or after the meeting.
Forest Service, USDA.
Notice of meeting cancellation.
The White Pine-Nye Resource Advisory Committee meeting scheduled in Eureka, Nevada has been cancelled. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (Pub. L. 110-343) (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with the title II of the Act.
The cancelled meeting was scheduled to be held August 8, 2011, 9 a.m.
Steven Williams, RAC Designated Federal Official, Austin Ranger District, 100 Midas Canyon Road, P.O. Box 130, Austin, Nevada 89310, 775-964-2671, e-mail
Forest Service, USDA.
Notice of meeting.
Pursuant to the authorities in the Federal Advisory Committee Act (Pub. L. 92-463) and under the Secure Rural Schools and Community Self-Determination Act of 2000 (Pub. L. 110-343), the Salmon-Challis National Forest's Central Idaho Resource Advisory Committee will conduct a business meeting which is open to the public.
Tuesday, August 30, 2011, beginning at 10:30 a.m.
Salmon-Challis N.F. South Zone Office, Highway 93, Challis, Idaho.
Agenda topics will include, presentation of proposed projects, evaluation of projects proposals, and approval and recommendation of some projects for Title II funding for 2012. Some RAC members may attend the meeting by conference call, telephone, or electronically.
Frank Guzman, Forest Supervisor, at 208-756-5111.
Forest Service, USDA.
Notice of meeting.
The Gallatin National Forest's Gallatin Resource Advisory Committee will meet in Bozeman, Montana. The committee is meeting as authorized under the Secure Rural Schools and Community Self-Determination Act (Pub. L. 110-343) and in compliance with the Federal Advisory Committee Act. The purpose is of the meeting is to review the status of project proposals, discuss and make final recommendations to the DFO and public comments.
The meeting will be held on August 30, 2011, and will begin at 1 p.m.
The meeting will be held at the Bozeman Public Library, 626 East Main Street, Bozeman, MT. Written comments should be sent to Babete Anderson, Custer National Forest, 1310 Main Street, Billings, MT 59105. Comments may also be sent via e-mail to
All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at Custer National Forest, 1310 Main Street, Billings, MT 59105. Visitors are encouraged to call ahead to 406-657-6205 ext 239.
Babete Anderson, RAC coordinator, USDA, Custer National Forest, 1310 Main Street, Billings, MT 59105; (406) 657-6205 ext 239; E-mail
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Mountain Standard Time, Monday through Friday.
The meeting is open to the public. The following business will be conducted: Review the status of project proposals, Discuss forth year of funding and Public Comments. Persons who wish to bring related matters to the attention of the Committee may file written statements with the Committee staff before or after the meeting. Public input sessions will be provided and indiviuals who made written request by August 23, 2011 will have the opportunity to address the Committee at those sessions.
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer, (202) 482-0266, Department of Commerce, Room 6616, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to Nicholas Fraser, OMB Desk Officer, FAX number (202) 395-5167, or via the Internet at
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer, (202) 482-0266, Department of Commerce, Room 6616, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Import Administration, International Trade Administration, Department of Commerce.
Elizabeth Eastwood, AD/CVD Operations, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-3874.
On November 7, 2008, the Department of Commerce (the Department) published the final results of its administrative review of the antidumping duty order on certain steel concrete reinforcing bars (rebar) from Turkey.
As part of this decision, the Department, following the methodology used in the 2005-2006 administrative review, depreciated an “asset” recorded in respondent Ekinciler Demir ve Celik Sanayi A.S.'s/Ekinciler Dis Ticaret A.S.'s (Ekinciler's) financial statements which was later determined to be capitalized expenses from a proprietary event in an earlier period.
Following the publication of the final results, Ekinciler filed a lawsuit with the United States Court of International Trade (CIT) challenging the Department's final results of administrative review.
The United States and Ekinciler have now entered into an agreement to settle this dispute. Pursuant to the terms of the agreement between the United States and Ekinciler, we calculated the following amended final margin for Ekinciler for the POR and are amending the final results of the antidumping duty administrative review of rebar from Turkey as follows:
The Department shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), for all sales made by Ekinciler, because we have the reported entered value of the U.S. sales, we have calculated importer-specific
Pursuant to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties any entries for which the assessment rate is
The Department clarified its “automatic assessment” regulation on May 6, 2003.
We are issuing this determination and publishing these amended final results and notice in accordance with 19 U.S.C. 1516a(e).
Pursuant to Section 6(c) of the Educational, Scientific and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301), we invite comments on the question of whether instruments of equivalent scientific value, for the purposes for which the instruments shown below are intended to be used, are being manufactured in the United States.
Comments must comply with 15 CFR 301.5(a)(3) and (4) of the regulations and be postmarked on or before August 29, 2011. Address written comments to Statutory Import Programs Staff, Room 3720, U.S. Department of Commerce, Washington, DC 20230. Applications may be examined between 8:30 a.m. and 5 p.m. at the U.S. Department of Commerce in Room 3720.
Pursuant to Section 6(c) of the Educational, Scientific and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301), we invite comments on the question of whether instruments of equivalent scientific value, for the purposes for which the instruments shown below are intended to be used, are being manufactured in the United States.
Comments must comply with 15 CFR 301.5(a)(3) and (4) of the regulations and be postmarked on or before August 29, 2011. Address written comments to Statutory Import Programs Staff, Room 3720, U.S. Department of Commerce, Washington, DC 20230. Applications may be examined between 8:30 a.m. and 5 p.m. at the U.S. Department of Commerce in Room 3720.
Department of Commerce, International Trade Administration.
Notice Announcing the Availability of Grant Funds.
The purpose of this notice is to inform potential applicants that the Department of Commerce is providing financial assistance in calendar year 2011 for U.S. manufacturers of certain worsted wool fabrics. Section 4002(c)(6)(A) of the Miscellaneous Trade and Technical Corrections Act of 2004 (Pub. L. 108-429, 118 Stat. 2603) (the “Act”), as amended by the Emergency Economic Stabilization Act of 2008 (Pub. L. 110-343, 122 Stat. 3765), authorizes the Secretary of Commerce to provide grants to persons (including firms, corporations, or other legal entities) who were, during calendar years 1999, 2000, and 2001, manufacturers of two categories of worsted wool fabrics. The first category are manufacturers of worsted wool fabrics, containing 85 percent or more by weight of wool, with average fiber diameters greater than 18.5 micron (Harmonized Tariff Schedule of the United States (HTS) heading 9902.51.11); the total amount of available funds is $2,666,000, to be allocated among such manufacturers on the basis of the percentage of each manufacturers' production of worsted wool fabric included in HTS 9902.51.11. The second category are manufacturers of worsted wool fabrics, containing 85 percent or more by weight of wool, with average fiber diameters of 18.5 micron or less (HTS heading 9902.51.15, previously HTS heading 9902.51.12); the total amount of available funds is $2,666,000, to be allocated among such manufacturers on the basis of the percentage of each manufacturers' production of worsted wool fabric included in HTS 9902.51.15. Funding for the worsted wool fabrics grant program will be provided by the Department of the Treasury from amounts in the Wool Apparel Manufacturers Trust Fund (the “Trust Fund”). The total amount of grants to manufacturers of worsted wool fabrics described in HTS 9902.51.11 shall be $2,666,000 in calendar year 2011. The total amount of grants to manufacturers of worsted wool fabrics described in HTS 9902.51.15 shall also be $2,666,000 in calendar year 2011.
Applications by eligible U.S. producers of certain worsted wool fabrics must be received and validated by Grants.gov, postmarked, or provided to a delivery service on or before 5 p.m. EDT, August 19, 2011. Validation or rejection of your application by Grants.gov may take up to 2 business days after submission. Applications received after the closing date and time will be rejected/returned to the sender without further consideration. Use of U.S. mail or another delivery service must be documented with a receipt. No facsimile or electronic mail applications will be accepted.
The standard application package is available at
Technical questions can be directed to Jim Bennett, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-4058;
The items listed below are required before an award can be made. Failure to submit items below by the application date will result in the application not being reviewed. Applicants must have produced in the United States, during calendar years 1999, 2000 and 2001, worsted wool fabrics of a kind described in HTS 9902.51.11 or 9902.51.15. Applicants must provide: (1) Company name, address, contact and phone number; (2) Federal tax identification number; (3) the name and address of each plant or location in the United States where worsted wool fabrics of the kind described in HTS 9902.51.11 or HTS 9902.51.15 was woven by the applicant in 1999, 2000 and 2001; (4) the name and address of each plant or location in the United States where the applicant is weaving worsted wool fabrics of the kind described in HTS 9902.51.11 or HTS 9902.51.15 as of the date of application; (5) the quantity, in linear yards, of worsted wool fabric production described in HTS 9902.51.11 or 9902.51.15, as appropriate, woven in the United States in each of calendar years 1999, 2000 and 2001; and (6) the value of worsted wool fabric production described in HTS 9902.51.11 or 9902.51.15, as appropriate, woven in the United States in each of calendar years 1999, 2000 and 2001.
This data must indicate actual production (not estimates) of worsted wool fabric of the kind described in HTS 9902.51.11 or 9902.51.15. At the conclusion of the application, the applicant must attest that “all information contained in the application is complete and correct and no false claims, statements, or representations have been made.” Applicants should be aware that, generally, pursuant to 31 U.S.C. 3729, persons providing a false or fraudulent claims, and, pursuant to 18 U.S.C. 1001, persons making materially false statements or representations, are subject to civil or criminal penalties, respectively. Information that is marked “business confidential” will be protected from disclosure to the full extent permitted by law.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that the National Marine Fisheries Service, Southeast Fisheries Science Center (SEFSC) [Bonnie Ponwith: Responsible Party], 75 Virginia Beach Drive, Miami, FL 33149, has applied in due form for a permit to take green (
Written, telefaxed, or e-mail comments must be received on or before September 8, 2011.
The application and related documents are available for review by selecting Records Open for Public Comment from the
These documents are also available upon written request or by appointment in the following offices:
Permits, Conservation and Education Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376; and
Southeast Region, NMFS, 263 13th Avenue South, Saint Petersburg, FL 33701; phone (727) 824-5312; fax (727) 824-5309.
Written comments on this application should be submitted to the Chief, Permits, Conservation and Education Division.
• by e-mail to
• by facsimile to (301) 713-0376, or
• at the address listed above.
Those individuals requesting a public hearing should submit a written request to the Chief, Permits, Conservation and Education Division at the address listed above. The request should set forth the specific reasons why a hearing on this application would be appropriate.
Colette Cairns or Amy Hapeman, (301) 427-8401.
The subject permit is requested under the authority of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
The proposed research would allow the applicant to monitor the take of green, loggerhead, hawksbill, leatherback, Kemp's ridley, olive ridley, and unidentified hardshell sea turtles during SEFSC resource assessment cruises in the Gulf of Mexico, the Atlantic Ocean and the Caribbean Sea. Green, loggerhead, Kemp's ridley, hawksbill, leatherback, olive ridley and unidentified hardshell sea turtles captured under separate authority would be handled, photographed, measured, weighed, flipper and passive integrated transponder tagged, temporarily marked, skin biopsied, and released. These efforts would aid in the development and refinement of management efforts to recover these species. The sampling would be conducted year-round for five years from the date of issuance of the permit.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Whiting Advisory Panel, in August 2011, to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
The meeting will be held on Wednesday, August 24, 2011 at 10 a.m.
The meeting will be held at the Hotel Providence, 139 Mathewson Street, Providence, RI 02903;
Paul J. Howard, Executive Director, New England Fishery Management Council;
The Whiting Advisory Panel will develop and recommend potential management alternatives for Multispecies FMP Amendment 19 for the small mesh fishery. These alternatives will include Annual Catch Limit (ACL) measures (allocations, buffers for management uncertainty, landings limits), Accountability Measures (AM), and possibly other measures to regulate the fishery and prevent catches from exceeding the ACL. The Advisory Panel will begin the meeting with a closed door session to elect a chair and vice-chair.
Although non-emergency issues not contained in this agenda may come before this group for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), those issues may not be the subject of formal action during this meeting. Actions will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council'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 Paul J. Howard, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Whiting Oversight in August, 2011 to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
The meeting will be held on Thursday, August 25, 2011 at 9:30 a.m.
The meeting will be held at the Hotel Providence, 139 Mathewson Street, Providence, RI 02903;
Paul J. Howard, Executive Director, New England Fishery Management Council;
The Oversight Committee will approve and recommend to the Council draft management alternatives to be included and analyzed in the Multispecies FMP Draft Amendment 19 document.
Although non-emergency issues not contained in this agenda may come before this group for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), those issues may not be the subject of formal action during this meeting. Actions will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council'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 Paul J. Howard, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
Proposed collection; comment request.
The United States Patent and Trademark Office (USPTO), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on the continuing information collection, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)).
Written comments must be submitted on or before October 11, 2011.
You may submit comments by any of the following methods:
•
•
•
Requests for additional information should be directed to Rod Turk, Office of Organizational Policy and Governance, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450; by telephone at 571-272-1975; or by e-mail to
The United States Patent and Trademark Office (USPTO) uses Public Key Infrastructure (PKI) technology to support electronic commerce between the USPTO and its customers. PKI is a set of hardware, software, policies, and procedures that provide important security services for the electronic business activities of the USPTO, including protecting the confidentiality of unpublished patent applications in accordance with 35 U.S.C. 122 and 37 CFR 1.14, as well as protecting international patent applications in accordance with Article 30 of the Patent Cooperation Treaty.
In order to provide the necessary security for its electronic commerce systems, the USPTO uses PKI technology to protect the integrity and confidentiality of information submitted to the USPTO. PKI employs public and private encryption keys to authenticate the customer's identity and support secure electronic communication between the customer and the USPTO. Customers may submit a request to the USPTO for a digital certificate, which enables the customer to create the encryption keys necessary for electronic identity verification and secure transactions with the USPTO. This digital certificate is required in order to access secure online systems that are provided by the USPTO for transactions such as electronic filing of patent applications and viewing confidential information about unpublished patent applications.
This information collection includes the Certificate Action Form (PTO-2042), which is used by the public to request a new digital certificate, the revocation of a current certificate, or the recovery of a lost or corrupted certificate. Customers may also change the name listed on the certificate or associate the certificate with one or more Customer Numbers. A certificate request must include a notarized signature in order to verify the identity of the applicant. The Certificate Action Form has an accompanying subscriber agreement to ensure that customers understand their obligations regarding the use of the digital certificates and cryptographic software. When generating a new certificate, customers register to get a set of seven codes that will enable customers to recover a lost certificate online without having to contact USPTO support staff.
The Certificate Action Form must be notarized and may be mailed or hand delivered to the USPTO.
This collection has costs due to the notarization requirement for authenticating the signatures on the Certificate Action Form. The USPTO estimates that the average fee for having a signature notarized is $2 and that 1,857 responses for these forms will be submitted annually, for a total cost of $3,714 per year.
This collection also has postage costs for submitting the Certificate Action Form to the USPTO by mail. The form cannot be faxed or submitted electronically because it requires an original notarized signature. The USPTO estimates that the first class postage cost for these forms will be 44 cents and that it will receive 1,857 mailed responses annually, for a total postage cost of approximately $817 per year.
Comments submitted in response to this notice will be summarized or included in the request for OMB approval of this information collection; they also will become a matter of public record.
The following notice of scheduled meetings is published pursuant to the provisions of the Government in the Sunshine Act, Public Law 94-409, 5 U.S.C. 552b.
Commodity Futures Trading Commission.
The Commission has scheduled meetings for the following dates:
October 4, 2011 at 9:30 a.m.
October 18, 2011 at 9:30 a.m.
November 1, 2011 at 9:30 a.m.
November 17, 2011 at 9:30 a.m.
Three Lafayette Center, 1155 21st St., NW., Washington, DC. Lobby Level Hearing Room (Room 1000).
Open.
The Commission has scheduled these meetings to consider various rulemaking matters, including the issuance of proposed rules and the approval of final rules. The Commission may also consider and vote on dates and times for future meetings. Agendas for each of the scheduled meetings will be made available to the public and posted on the Commission's Web site at
David A. Stawick, Secretary of the Commission, 202-418-5071.
Consumer Product Safety Commission.
Notice.
It is the policy of the Commission to publish settlements which it provisionally accepts under the Consumer Product Safety Act in the
Any interested person may ask the Commission not to accept this agreement or otherwise comment on its contents by filing a written request with the Office of the Secretary by August 24, 2011.
Persons wishing to comment on this Settlement Agreement should send written comments to Comment 11-C0008, Office of the Secretary, Consumer Product Safety Commission, 4330 East West Highway, Room 820, Bethesda, Maryland 20814-4408.
William J. Moore, Jr., Trial Attorney, Division of Enforcement and Information, Office of the General Counsel, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408; telephone (301) 504-7583.
The text of the Agreement and Order appears below.
(1) In accordance with 16 CFR 1118.20, Black & Decker (U.S.) Inc., its responsible officials, and its foreign and domestic corporate parents, affiliates, agents and employees (collectively “Black & Decker” or “the Firm”) and the staff (“Staff”) of the United States Consumer Product Safety Commission (“Commission”) hereby enter into this Settlement Agreement (“Agreement”) under the Consumer Product Safety Act (“CPSA”). The Agreement and the incorporated attached Order resolve the Staff's allegations set forth below.
(2) The Staff is the staff of the Consumer Product Safety Commission, an independent federal regulatory agency established pursuant to, and responsible for, the enforcement of the CPSA, 15 U.S.C. 2051-2089.
(3) Black & Decker is a corporation organized and existing under the laws of the State of Maryland, with its principal corporate office located at 701 East Joppa Road, Towson, Maryland.
(4) Between November 2005 and October 2006, Black & Decker imported and distributed approximately one hundred thirty-six thousand (136,000) newly designed electric, hand-held grass trimmer/edgers known as model GH1000 Grasshog XP (“Grasshog XP”). The Grasshog XPs were sold through retailers nationwide for approximately $70.00.
(5) The Grasshog XPs are “consumer products” and, at all times relevant hereto, Black & Decker was a “manufacturer” of these consumer products, which were “distributed in commerce,” as those terms are defined or used in sections 3(a)(5), (8) and (11) of the CPSA, 15 U.S.C. 2052(a)(5), (8) and (11).
(6) The Grasshog XPs contained several defects that presented four failure modes: (1) The cutting string spool covers and spools can be projected off the Grasshog XP at high speed in unpredictable directions, allowing these components to strike the user or bystanders; (2) the dual cutting lines were fed and cut off at high speed and at irregular intervals during use, allowing the line to strike the user; (3) the spool line feed guard can fall off during use, exposing the user to injury from overly long high speed cutting line; and (4) the spool housing may overheat, exposing users to risks of burn injuries.
(7) Black & Decker first learned of defects in its Grasshog XP spool cover in December 2005. It modified the defective spool cover manufacturing process and changed the spool cover to a different material (“the new spool cover”) for future production. In January 2006, the firm recalled 9,000 Grasshogs. In February 2006, Black & Decker informed the CPSC staff of what it termed a “quality” problem involving the original spool cover but did not file a report under 15 U.S.C. 2064(b) at that time.
Paragraphs one through seven, above, are hereby incorporated herein by reference.
(8) Black & Decker received its first complaints involving Grasshog XP defects, including problems with the new replacement spool cover, in mid-March and April 2006. By the end of May 2006, the Firm had received 80 safety complaints, personal injury reports and hundreds of warranty claims involving the Grasshog XP. The subject of the complaints, reports and warranty claims were the defects set forth in Paragraph 6,
(9) In a letter dated May 9, 2006, CPSC staff asked Black & Decker for full report information with regard to the Grasshog XP, including, but not limited to, the defective spool covers the Firm discovered in December 2005 and replaced in January 2006.
(10) Despite an awareness of the information set forth in Paragraphs six and eight,
(11) Based upon the incomplete information provided by Black & Decker, on June 30, 2006, the staff sent Black & Decker a letter closing the case file that had been opened on May 9, 2006. The staff letter of June 30, 2006 reminded Black & Decker of its duty to immediately report information that the risk or hazard posed by the Grasshog XP was greater than or different from that indicated by the information that had been supplied by the firm to date.
(12) By June 2006, Black & Decker had received 216 Grasshog XP safety complaints and approximately 14 reports of injury. Despite the Commission staff letters of May 2 and June 30, 2006 requesting this information, Black & Decker silently acquiesced in the file closure without revealing this information.
(13) Black & Decker waited until October 2006 to provide information requested by the staff on May 9, 2006. By its acts and omissions, the Firm knowingly violated Section 19(a)(3) of the CPSA, 15 U.S.C. 2068(a)(3), as the term “knowingly” is defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d).
Paragraphs one through thirteen, above, are hereby incorporated herein by reference.
(14) From July through September 2006, Black & Decker continued to receive large numbers of safety complaints, injury reports and warranty claims involving defects in the Grasshog XP new spool cover, the spool line feeder, the spool line feed guard and the spool feed housing (as set forth in Paragraph 6 above.) Although Black & Decker had obtained sufficient information to reasonably support the
(15) Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Black & Decker is subject to civil penalties for its knowing failure to report as required under section 15(b) of the CPSA, 15 U.S.C. § 2064(b).
(16) Black & Decker denies Staff's allegations that the Grasshog XP, contains defects which could create a substantial product hazard or create an unreasonable risk of serious injury or death, and denies that it knowingly violated Sections 19(a)(3) or 19(a)(4) of the CPSA. This payment is made in settlement of the staff allegations. Neither the payment nor the fact of entering into this Settlement Agreement, constitute evidence of or an admission of, any fault, liability or statutory or regulatory violation by Black & Decker or of the truth of any allegations made by the staff.
(17) Under the CPSA, the Commission has jurisdiction over this matter and over Black & Decker and the Grasshog XP.
(18) In settlement of the Staff's allegations stemming from the Firm's importation and distribution of the Grasshog XP and in reporting to the Commission, Black & Decker shall pay a civil penalty in the amount of nine hundred sixty thousand dollars ($960,000.00) within ten (10) calendar days of receiving service of the Commission's final Order accepting the Agreement. The payment shall be made electronically to the CPSC via
(19) The parties enter into this Agreement for settlement purposes only. The Agreement does not constitute an admission by Black & Decker or a determination by the Commission that Black & Decker knowingly violated Sections 19(a)(3) or 19(a)(4) of the CPSA.
(20) Upon provisional acceptance of the Agreement by the Commission, the Agreement shall be placed on the public record and published in the
(21) Upon the Commission's final acceptance of the Agreement and issuance of the final Order, Black & Decker knowingly, voluntarily and completely waives any rights it may have in this matter to the following: (i) An administrative or judicial hearing; (ii) judicial review or other challenge or contest of the Commission's actions; (iii) a determination by the Commission as to whether Black & Decker failed to comply with the CPSA and the underlying regulations; (iv) a statement of findings of fact and conclusions of law; and (v) any claims under the Equal Access to Justice Act.
(22) The Commission may publicize the terms of the Agreement and the Order.
(23) The Agreement and the Order shall apply to and be binding upon Black & Decker and each of its parent corporation(s), successors and/or assigns.
(24) The Commission issues the Order under the provisions of the CPSA, and a violation of the Order may subject Black & Decker and each of its parent corporation(s), successors and/or assigns to appropriate legal action.
(25) The Agreement may be used in interpreting the Order. Understandings, agreements, representations or interpretations apart from those contained in the Agreement and the Order may not be used to vary or contradict their terms. The Agreement shall not be waived, amended, modified or otherwise altered without written agreement thereto executed by the party against whom such waiver, amendment, modification or alteration is sought to be enforced.
(26) If any provision of the Agreement or the Order is held to be illegal, invalid or unenforceable under present or future laws effective during the terms of the Agreement and the Order, such provision shall be fully severable. The balance of the Agreement and the Order shall remain in full force and effect, unless the Commission and Black & Decker agree that severing the provision materially affects the purpose of the Agreement and Order.
Black & Decker (U.S.) Inc.
Dated: 6/27/2011.
Dated: 6/27/2011.
Dated: 8/2/2011.
Upon consideration of the Settlement Agreement entered into between Black & Decker (U.S.) Inc., its responsible officials, and their foreign and domestic corporate parents, affiliates, agents and employees (collectively “Black & Decker”), and the U.S. Consumer Product Safety Commission (“Commission”) staff, and the Commission having jurisdiction over the subject matter and over Black & Decker, and it appearing that the Settlement Agreement and the Order are in the public interest, it is
Provisionally accepted and provisional Order issued on the 2nd day of August, 2011.
By Order of the Commission.
Corporation for National and Community Service.
Notice of new computer matching program between the Corporation for National and Community Service and the Social Security Administration.
In accordance with the Privacy Act of 1974 (5 U.S.C. 552a), as amended by the Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100-503), OMB Final Guidance Interpreting the Provisions of the Computer Matching and Privacy Protection Act of 1988 (54 FR 25818, June 19, 1989), and OMB Circular No. A-130, “Management of Federal Information Resources,” the Corporation for National and Community Service (“CNCS”) is issuing a public notice of its new computer matching program with the Social Security Administration (“SSA”).
CNCS will file a report on the computer matching agreement with the Office of Management and Budget and Congress. The matching program will begin September 1, 2011, or 40 days after the date of CNCS's submissions to OMB and Congress, whichever is later. The matching program will continue for 18 months after the effective date and may be extended for an additional 12 months thereafter, if the conditions specified in 5 U.S.C. 552a(o)(2)(D) have been met.
You may submit comments identified by the title of this notice, by any of the following methods.
(1)
(2)
(3)
Amy Borgstrom, Associate Director for Policy, (202) 606-6930, or by e-mail at
The Privacy Act of 1974 (5 U.S.C. 552a), as amended by the Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100-503), regulates the use of computer matching agreements by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. Among other things, it requires Federal agencies involved in computer matching agreements to publish a notice in the
Participants in this computer matching program are the Social Security Administration (source agency) and the Corporation for National and Community Service (recipient agency).
The computer match between CNCS and SSA will enable CNCS to verify the social security numbers (SSNs) of applicants for approved national service positions, and verify statements made by those applicants regarding their citizenship status.
SSA's authority for this matching program is section 1711 of the Serve America Act of 2009 (Pub. L. 111-13, April 21, 2009). The legal authority for the disclosure of SSA data under this agreement is section 1106 of the Social Security Act (42 U.S.C. 1306(b)), 5 U.S.C. 552a(b)(3) of the Privacy Act, and the regulations and guidance promulgated thereunder.
CNCS's legal authority to enter into this agreement is section 146(b)(3) of the National and Community Service Act (NCSA) (42 U.S.C. 12602(a)), concerning an individual's eligibility to receive a Segal AmeriCorps Education Award from the National Service Trust upon successful completion of a term of service in an approved national service position and section 1711 of the Serve America Act (Pub. L. 111-13), which directs CNCS to enter into a data matching agreement to verify statements made by an individual declaring that such individual is in compliance with section 146(b)(3) of the NCSA by comparing information provided by the individual with information relevant to such a declaration in the possession of another Federal agency.
Each individual who applies to serve in an approved national service position, including positions in AmeriCorps State and National, AmeriCorps VISTA, AmeriCorps NCCC, and Serve America Fellows, must, at the time of application, certify that the individual meets the citizenship eligibility criteria to serve in the position,
The Master Files of Social Security Number Holders and SSN Applications SSA/OEEAS 60-0058, last published at 74 FR 62866 (December 1, 2009) (Enumeration System) maintains records about each individual who has applied for and obtained an SSN. SSA uses information from the Enumeration System to assign SSNs. The information CNCS provides from the AmeriCorps Member Individual Account (Corporation 8) system of records will be matched against this system of records and verification results will be disclosed under the applicable routine use.
This agreement will be in effect for a period of 18 months, with a provision for a one-time extension for a period not to exceed 12 months. In order to renew this agreement, both CNCS and SSA must certify to their respective Data Integrity Boards that: (1) The matching program will be conducted without change; and (2) the matching program has been conducted in compliance with the original agreement.
CNCS will provide SSA with a data file including each applicant's social security number, first and last names, date of birth, and sex. SSA will conduct a match on the identifying information. If the match does not return a result verifying the individual's citizenship status, CNCS will contact the individual or the grant recipient program that selected the individual to verify the results in accordance with the requirements of 5 U.S.C. 552a(p) and applicable OMB guidelines. The affected individual will have an opportunity to contest the accuracy of the information provided by SSA. The applicant will have at least 30 days from the date of the notice to provide clear and convincing evidence of the accuracy of the social security number, proof of U.S. citizenship, or both. The notice will advise the individual and the grant recipient program that selected the individual that failure to respond within 30 days will provide a valid basis for CNCS to assume that the information provided by SSA is correct.
Applicants will be informed at the time of application that information provided on the application is subject to verification through a computer
CNCS will furnish a copy of this notice to both Houses of Congress and the Office of Management and Budget.
Office of the Inspector General, Department of Defense.
Notice to add a system of records.
The Office of the Inspector General proposes to add a system of records to its inventory of record systems subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended.
The proposed action will be effective on September 8, 2011 unless comments are received that would result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
Ms. Tanya Layne, Office of the Inspector General, 400 Army Navy Drive, Arlington, Virginia 22202-4704, or by phone at (703) 604-9779.
The Office of the Inspector General notices for systems of records subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
Case Control System—Investigative
Department of Defense Office of the Inspector General (DoD OIG), Office of the Assistant Inspector General, Office of Professional Responsibility (OPR), 400 Army Navy Drive, Arlington, VA 22202-4704.
Persons and/or activities within the DoD community which is or has been the subject of an OIG OPR investigation.
Individual's names, Social Security Number (SSN), address, case control number, records of investigations to include Reports of Investigation and Information Reports, which are being or have been conducted by the OIG OPR.
DoD Directive 5106.1, Inspector General of the Department of Defense; Inspector General Act of 1978, (Pub. L. 452), as amended; and E.O. 9397 (SSN), as amended.
Open and closed case listings used to manage investigations, to produce statistical reports, and to control various aspects of the investigative process.
To the U.S. Secret Service in conjunction with the protection of persons under its jurisdiction.
To other Federal, State, Tribal or local agencies having jurisdiction over the substance of the allegations or a related investigative interest in criminal law enforcement investigations, including statutory violations, counter-intelligence, counter-espionage and counter-terrorist activities and other security matters.
To other Federal Inspector General offices, the Council of the Inspectors General on Integrity and Efficiency (CIGIE), and/or other Federal law enforcement agencies for the purpose of coordinating and conducting administrative inquiries and civil and criminal investigations, or when responding to such offices, Council, and agencies in connection with the investigation of potential violations of law, rule, and/or regulation.
To other Federal Inspector General offices, the CIGIE, and/or the Department of Justice for purposes of conducting external reviews to ensure that adequate internal safeguards and management procedures continue to exist within the DoD OIG.
To State, Territorial, and District of Columbia, and Commonwealth Attorney Generals and their respective employees, for statistical purposes or evidentiary documentation in connection with their agency investigation(s).
To State, Territorial, Commonwealth, County, or City law enforcement officials and their respective employees, for statistical purposes or evidentiary documentation in connection with their agency investigation(s).
The DoD “Blanket Routine Uses” set forth at the beginning of the DoD OIG's compilation of systems of records notices also apply to this system.
Records are stored in file folders and on electronic storage media.
Records are retrieved by individual's name, Social Security Number (SSN), or case control number.
Computerized records maintained in a controlled area are accessible only to authorized personnel. Physical entry is restricted by the use of locks, guards, and is accessible only to authorized personnel. Physical and electronic access is restricted to designated individuals having a need therefore in the performance of official duties and who are properly screened and cleared for need-to-know. Electronic data system is password and Common Access Card (CAC) protected.
Electronic records are retained indefinitely for statistical purposes. Paper copies of records are retained permanently and retired to the Washington National Records Center 3 years after case closure.
Office of the Inspector General of the Department of Defense, Office of the Assistant Inspector General, Office of Professional Responsibility, 400 Army Navy Drive, Arlington, VA 22202-4704.
Individuals seeking to determine whether information about themselves is contained in this system should address written inquiries to the Freedom of Information Act Requester Service Center/Privacy Act Office, Room 1021, 400 Army Navy Drive, Arlington, VA 22202-4704.
Written requests should contain the individual's full name (including former names and aliases), and Social Security Number (SSN), current home address, telephone number, and the request must be signed.
Individuals seeking access to information about themselves contained in this system should address written inquiries to the Freedom of Information Act Requester Service Center/Privacy Act Office, Room 1021, 400 Army Navy Drive, Arlington, VA 22202-4704.
Written requests should contain the individual's full name (including former names and aliases), and SSN, current home address, telephone number, and the request must be signed.
The DoD OIG's rules for accessing records and for contesting contents and appealing initial agency determinations are published in 32 CFR part 312 or may be obtained from the system manager.
Office of Inspector General System Administrators.
Parts of this system may be exempt pursuant to 5 U.S.C. 552a(j)(2) if the information is compiled and maintained by a component of the agency that performs as its principle function any activity pertaining to the enforcement of criminal laws.
An exemption rule for this record system has been promulgated in accordance with the requirements of 5 U.S.C. 553(b)(1), (2), and (3), (c) and (e) and published in 32 CFR part 312. For additional information contact the system manager.
Department of Education.
Comment request.
The Department of Education (the Department), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the reporting burden on the public and helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Director, Information Collection Clearance Division, Regulatory Information Management Services, Office of Management, invites comments on the proposed information collection requests as required by the Paperwork Reduction Act of 1995.
Interested persons are invited to submit comments on or before October 11, 2011.
Comments regarding burden and/or the collection activity requirements should be electronically mailed to
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that Federal agencies provide interested parties an early opportunity to comment on information collection requests. The Director, Information Collection Clearance Division, Regulatory Information Management Services, Office of Management, publishes this notice containing proposed information collection requests at the beginning of the Departmental review of the information collection. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology.
Copies of the proposed information collection request may be accessed from
Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Office of Special Education and Rehabilitative Services, Department of Education.
Notice.
Overview Information:
Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities (TA&D); Personnel Development to Improve Services and Results for Children with Disabilities (Personnel Development); and Technology and Media Services for Individuals with Disabilities (T&M Services) Programs—Postsecondary Education Center for Individuals who are Deaf
Notice inviting applications for new awards for fiscal year (FY) 2011.
The purpose of the TA&D Program is to promote academic achievement and to improve results for children with disabilities by providing technical assistance (TA), supporting model demonstration projects, disseminating useful information, and implementing activities that are supported by scientifically based research.
This priority is:
Individuals who are deaf or hard of hearing have unique communication and language barriers that require a range of accommodations for success in postsecondary education settings. Research, policy, and practice suggest that decisions about accommodations should be made on an individual basis (Marschark, 2001; U.S. Department of Education, 2005). For example, different accommodations are needed for a student who has hearing aids, a student who has a cochlear implant and uses oral-auditory strategies, a student with a cochlear implant who uses sign language in addition to oral-auditory strategies, and a student who uses sign language only (Marschark, 2001). It is important that postsecondary institutions be well-informed about the various accommodations that may be appropriate for students who are deaf or hard of hearing, such as oral transliteration services, cued language transliteration services, sign language transliteration, and interpreting and transcription services.
To address the needs of these students, section 682(d)(1)(B) of IDEA requires that the Secretary ensure that, for each fiscal year, not less than $4,000,000 is provided to address the postsecondary, vocational, technical, continuing, and adult education needs of individuals with deafness. Pursuant to this requirement, the Department's Office of Special Education Programs (OSEP) has previously funded four regional centers to assist postsecondary institutions in more effectively addressing the postsecondary, vocational, technical, continuing, and adult education needs of individuals who are deaf or hard of hearing. These centers have served collectively as the Postsecondary Education Programs Network (PEPNet). While PEPNet's project period is scheduled to end on September 30, 2011, institutions of higher education (IHEs) continue to need assistance to support this population. For more information about PEPNet, see
In addition to the funding required under section 682(d)(1)(B) of IDEA, section 504 of the Rehabilitation Act of 1973 (Section 504) and the Americans with Disabilities Act of 1990, as amended (ADA) outline postsecondary institutions' obligations to ensure they do not discriminate on the basis of disability, including in their provision of academic adjustments and auxiliary aids and services for students with disabilities (34 CFR 104.44; 28 CFR 35.160-164; 28 CFR 36.303). Current statistics show that many individuals who are deaf or hard of hearing are enrolling in mainstream postsecondary institutions (Raue & Lewis, 2011). Given the numbers of students enrolling in mainstream postsecondary institutions, and considering the various types of accommodations that may be necessary to serve this low-incidence population, it is paramount that personnel at these postsecondary institutions have the knowledge and skills needed to provide fully accessible learning experiences for students who are deaf or hard of hearing (Lang, 2002). For example, personnel must be skilled at helping to determine the appropriate type of interpreting services for a particular student's needs. Personnel must also be knowledgeable about other services from which the student may benefit (
In addition, there are deaf or hard of hearing students who are not college-bound and who need to develop their basic skills to prepare to enter job training programs or matriculate to other postsecondary education programs. Researchers examined the transition strengths and needs of 53 middle and high school students who were deaf or hard of hearing and found substantial deficits in employment and independent living skills
To help bring about significant improvement in the quality of services for students who are deaf or hard of hearing and to improve educational outcomes, a national agenda was developed by a coalition of parent, consumer, professional, and advocacy organizations involved in the education of children who are deaf or hard of hearing. This national agenda, called Moving Forward on Achieving Educational Equality for Deaf and Hard of Hearing Students (National Agenda),
Consistent with the Department's priority to increase all students' postsecondary success, the Department seeks to support postsecondary institutions, working with other relevant organizations and public agencies, in increasing the number and proportion of students who are deaf or hard of hearing who attend, persist in, and complete college or other postsecondary education and training (U.S. Department of Education, 2010b).
The purpose of this priority is to support a Postsecondary Education Center for Individuals who are Deaf (Center) that will support postsecondary institutions, working with other relevant organizations and public agencies, to more effectively address the postsecondary, vocational, technical, continuing, and adult education needs of individuals who are deaf or hard of hearing, including those who are deaf or hard of hearing with co-occurring disabilities such as learning and emotional disabilities, so that a greater number and proportion of these students persist in and complete college or other postsecondary education and training. The Center will: (1) Provide postsecondary institutions and other relevant organizations and public agencies with technical assistance on programs, practices, and activities that postsecondary institutions could use to improve the completion and persistence of students who are deaf or hard of hearing; (2) provide professional development opportunities through local, State, regional, and national in-person or online trainings to postsecondary educators and other individuals who provide educational services to postsecondary students who are deaf; and (3) provide training and information about how postsecondary institutions and other relevant organizations and public agencies can utilize technology to provide and promote access and accommodations for individuals who are deaf or hard of hearing.
To be considered eligible for funding under this absolute priority, applicants must meet the application requirements contained in this priority. Any project funded under this absolute priority also must meet the programmatic and administrative requirements specified in the priority.
(a) A logic model that depicts, at a minimum, the goals, activities, outputs, and outcomes of the proposed Center. A logic model communicates how the Center will achieve its outcomes and provides a framework for both the formative and summative evaluations of the Center;
The following Web sites provide more information on logic models:
(b) A plan to implement the activities described in the
(c) A plan, linked to the proposed project's logic model, for a formative evaluation of the proposed project's activities. The plan must describe how the formative evaluation will use clear performance objectives to ensure continuous improvement in the operation of the proposed project, including objective measures of progress in implementing the project and ensuring the quality of products and services;
(d) A budget for a summative evaluation to be conducted by an independent third party;
(e) A budget for attendance at the following:
(1) A one and one half day kick-off meeting to be held in Washington, DC,
(2) A three-day Project Directors' Conference in Washington, DC, during each year of the project period.
(3) A three-day Technical Assistance and Dissemination Conference in Washington, DC, during each year of the project period.
(4) A minimum of two two-day trips annually to attend Department briefings, Department-sponsored conferences, and other meetings, as requested by OSEP.
(f) A line item in the proposed budget for an annual set-aside of 5 percent of the grant amount to support emerging needs that are consistent with the proposed project's activities, as those needs are identified in consultation with OSEP.
With approval from the OSEP Project Officer, the Center must reallocate any remaining funds from this annual set-aside no later than the end of the third quarter of each budget period.
(g) A description of both the process and the selection criteria that the Center will use to identify the recipients of the needs assessments and subsequent TA described under sections (a) and (b) of each of the
(a) Conduct assessments, including examining student outcome data, to determine current TA needs of postsecondary institutions related to meeting the postsecondary, vocational, technical, continuing, and adult education needs of individuals who are deaf or hard of hearing. Such assessments must identify the needs of postsecondary institutions related to enrolling, retaining, and instructing students who are deaf or hard of hearing and addressing the varying communication needs of, and methods used by, individuals who are deaf or hard of hearing, such as oral transliteration services, cued language transliteration services, sign language transliteration and interpreting services, and transcription services. In its application, an applicant must describe both the process and the selection criteria that the Center will use to identify the institutions that will receive the needs assessment and subsequent TA. The Center must obtain approval from OSEP before finalizing the selection criteria and making the final selection of institutions.
(b) Provide TA to postsecondary institutions to address the needs identified in assessments conducted under paragraph (a) of these
(1) Be designed to enhance access to college or other postsecondary education and training by individuals who are deaf or hard of hearing;
(2) Address the needs of individuals who are deaf or hard of hearing to improve their persistence and completion in postsecondary education by implementing practices, strategies, or programs that improve student learning outcomes, reduce time to degree, reduce instructional costs, or other activities as appropriate;
(3) Provide information on how to use data to improve postsecondary student outcomes relating to enrollment, persistence, and completion, and leading to career success.
(c) Provide TA on request to other relevant organizations and public agencies working with postsecondary institutions to increase the number and proportion of individuals who are deaf or hard of hearing who enroll in, persist in, and complete postsecondary education. Other relevant organizations and public agencies may include SEAs, vocational rehabilitation agencies, community service agencies, centers for independent living, and one stop centers funded under the Workforce Investment Act. The TA provided under this paragraph (c) must focus on:
(1) Students who are deaf or hard of hearing, including those who are deaf or hard of hearing with co-occurring disabilities such as learning or emotional disabilities, who are transitioning from secondary to postsecondary, vocational, technical, continuing, adult education, the workforce, and the community.
(2) Assisting postsecondary institutions to meet their responsibilities under Federal laws, including Section 504 and the ADA, with respect to students who are deaf or hard of hearing.
(3) Developing and implementing effective procedures for providing postsecondary educational supports to students who are deaf or hard of hearing, including by encouraging the use of cooperative arrangements among postsecondary institutions and other service providers, such as public and private community service providers that may address the educational, remedial, support services, transitional, independent living, and employment needs of individuals who are deaf or hard of hearing. The Center may also address the transition of these students from postsecondary institutions to independent living and employment.
(4) Assisting teams of other relevant organizations and appropriate public agencies, including postsecondary institutions, working on State plans or other strategies to address the postsecondary, vocational, technical, continuing, and adult education needs of individuals who are deaf or hard of hearing.
(d) Make information available to individuals who are deaf or hard of hearing, parents of students who are deaf or hard of hearing, secondary schools, and postsecondary institutions on the availability of resources (
(e) Incorporate the effective use of technology (
(a) Conduct assessments, including examining student outcome data, of the personnel development training needs of postsecondary, vocational, and adult education professional and support staff who provide transitional or postsecondary educational services to students who are deaf or hard of hearing.
(b) Provide interdisciplinary training to postsecondary educators, guidance counselors, interpreters, speech pathologists, audiologists, social workers, rehabilitation counselors, and other staff that addresses the needs identified in the assessments conducted under paragraph (a) of these
(1) How to use data to improve practice and student outcomes; and
(2) Evidence-based practices that address the postsecondary, vocational, technical, continuing, and adult
(c) Provide professional development opportunities through local, State, regional, and national in-person or online trainings on key topics (
(d) Incorporate the effective use of technology (
(a) Conduct assessments, including examining student outcome data, to determine the accessible technology and media needs of postsecondary, vocational, and adult education programs related to—
(1) Enrolling, retaining, and instructing students who are deaf or hard of hearing; and
(2) Addressing the varying communication needs of and methods used by individuals who are deaf or hard of hearing.
(b) Provide TA to administrators, faculty, and support staff at postsecondary institutions to address the needs identified in assessments conducted under paragraph (a) of these
(1) Be designed to enhance access to, and completion of, college or other postsecondary education and training by individuals who are deaf;
(2) Provide information, technological support, and in-service training, as needed, to personnel at postsecondary institutions who provide services to students who are deaf or hard of hearing;
(3) Train personnel in the innovative uses and applications of technology, including universally designed technologies, assistive technology devices, and accessible media formats; and
(4) Train personnel on developing and implementing effective procedures for providing educational technology and media supports to postsecondary students who are deaf or hard of hearing.
(c) Provide information on how postsecondary institutions can use technology to meet their responsibilities under Federal laws, including the ADA and Section 504, to provide access to college or other postsecondary education and training, and to provide accommodations to individuals who are deaf or hard of hearing.
(a) Maintain a Web site that meets government or industry-recognized standards for accessibility and that links to the Web site operated by the Technical Assistance Coordination Center (TACC).
(b) Establish and maintain an advisory committee to review the activities and outcomes of the Center and provide programmatic support and advice throughout the project period. At a minimum, the advisory committee must meet on an annual basis in Washington, DC, and consist of representatives from SEAs, LEAs, school administrators, individuals who are deaf, educators, parents of individuals who are deaf, vocational rehabilitation agencies, community service agencies, centers for independent living, one stop centers funded under the Workforce Investment Act, postsecondary institutions, and service providers who work with transitioning youth and adults who are deaf. The Center must submit the names of proposed members of the advisory committee to OSEP for approval within eight weeks after receipt of the award.
(c) Prepare and disseminate reports, documents, and other materials on appropriate accommodations in postsecondary institutions, how to prepare students who are deaf or hard of hearing to be college and career ready, and related topics as requested by OSEP. The reports must identify effective evidence-based practices as well as areas that would benefit, through additional research, from improved levels of evidence for specific practices. In consultation with the OSEP Project Officer, the Center must make selected reports, documents, and other materials available for parents, educators, service providers, members of professional organizations and advocacy groups, researchers, and others, as appropriate.
(d) Communicate and collaborate, on an ongoing basis and as appropriate, with OSEP-funded projects, such as the Parent Training and Information Centers, the National Secondary Transition Technical Assistance Center, the National High School Center (jointly funded with the Office of Elementary and Secondary Education), the National Center on Deaf-Blindness, the Regional Resource Centers, the Center for Implementing Technology in Education, the Family Center on Technology and Disability, and OSEP-funded projects that focus on training personnel to serve students with low incidence disabilities. In addition, communicate and collaborate, on an ongoing basis and as appropriate, with related projects funded by the Rehabilitation Services Administration, the National Institute on Disability and Rehabilitation Research, the Institute of Education Sciences, and the Office of Vocational and Adult Education. This collaboration could include the joint development of products, the coordination of TA services, and the planning and carrying out of TA meetings and events.
(e) Host an annual National State Systems Change Summit with representatives from the SEAs, LEAs, State schools, parent organizations, postsecondary institutions, vocational rehabilitation agencies, community service agencies, centers for independent living, and one stop centers funded under the Workforce Investment Act, service providers who work with transitioning youth and adults who are deaf or hard of hearing, and other stakeholders. The National State Systems Change Summit may be held in conjunction with other national conferences such as the annual National State Leaders' Summit. The summit must—
(1) Provide, and enable the exchange of, information on establishing and implementing strategies to improve educational programs and services for postsecondary students who are deaf or hard of hearing, and to increase the number and proportion of these students who persist in and complete college or other postsecondary education and training.
(2) Facilitate collaborative planning and implementation among stakeholders to address identified needs of postsecondary institutions in the State related to enrolling, retaining, instructing, and graduating students who are deaf or hard of hearing.
(f) Participate in, organize, or facilitate communities of practice if they align with the needs of the Center's target audience. Communities of practice must align with the Center's objectives to support discussions and collaboration among key stakeholders.
The following Web site provides more information on communities of
(g) Prior to developing any new product, submit a proposal for the product to the TACC database for approval from the OSEP Project Officer.
(h) Maintain ongoing communication with the OSEP Project Officer through monthly phone conversations and e-mail communication, as needed.
The Secretary may extend the project period of the Center for up to two additional years beyond its original project period of 36 months if the grantee is achieving the intended outcomes of the grant, shows improvement against baseline measures on performance indicators, and is making a positive contribution to practices and improved services that address the postsecondary, vocational, technical, continuing, and adult education needs of individuals who are deaf or hard of hearing, including those who are deaf or hard of hearing with co-occurring disabilities (
20 U.S.C. 1462, 1463, 1474, 1481, and 1482.
The regulations in 34 CFR part 79 apply to all applicants except federally recognized Indian tribes.
The regulations in 34 CFR part 86 apply to IHEs only.
In each budget period of 12 months $1,300,000 must be budgeted for the activities described under
The Department is not bound by any estimates in this notice.
1.
Eligible applicants may form consortia that meet the requirements in 34 CFR 75.127 to 75.129 to apply under this competition. The Secretary views the formation of consortia as an effective and efficient strategy to address the requirements of this priority.
2.
3.
(b) Applicants and the grant recipient funded under this competition must involve individuals with disabilities or parents of individuals with disabilities ages birth through 26 in planning, implementing, and evaluating the projects (see section 682(a)(1)(A) of IDEA).
1.
To obtain a copy via the Internet, use the following address:
To obtain a copy from ED Pubs, write, fax, or call the following: ED Pubs, U.S. Department of Education, P.O. Box 22207, Alexandria, VA 22304. Telephone,
You can contact ED Pubs at its Web site, also:
If you request an application package from ED Pubs, be sure to identify this program or competition as follows: CFDA number 84.326D.
To obtain a copy from the program office, contact the person listed under
Individuals with disabilities can obtain a copy of the application package in an accessible format (
2.
Page Limit: The application narrative (Part III of the application) is where you, the applicant, address the selection criteria that reviewers use to evaluate your application. You must limit the application narrative to the equivalent of no more than 70 pages, using the following standards:
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial. An application submitted in any other font (including Times Roman or Arial Narrow) will not be accepted.
The page limit does not apply to Part I, the cover sheet; Part II, the budget section, including the narrative budget justification; Part IV, the assurances and certifications; or the one-page abstract, the resumes, the bibliography, the references, or the letters of support. However, the page limit does apply to all of the application narrative section (Part III).
We will reject your application if you exceed the page limit or if you apply other standards and exceed the equivalent of the page limit.
3.
Applications for grants under this competition may be submitted electronically using the
We do not consider an application that does not comply with the deadline requirements.
Individuals with disabilities who need an accommodation or auxiliary aid in connection with the application process should contact the person listed under
4.
5.
6.
a. Have a Data Universal Numbering System (DUNS) number and a Taxpayer Identification Number (TIN);
b. Register both your DUNS number and TIN with the Central Contractor Registry (CCR), the Government's primary registrant database;
c. Provide your DUNS number and TIN on your application; and
d. Maintain an active CCR registration with current information while your application is under review by the Department and, if you are awarded a grant, during the project period.
You can obtain a DUNS number from Dun and Bradstreet. A DUNS number can be created within one business day.
If you are a corporate entity, agency, institution, or organization, you can obtain a TIN from the Internal Revenue Service. If you are an individual, you can obtain a TIN from the Internal Revenue Service or the Social Security Administration. If you need a new TIN, please allow 2-5 weeks for your TIN to become active.
The CCR registration process may take five or more business days to complete. If you are currently registered with the CCR, you may not need to make any changes. However, please make certain that the TIN associated with your DUNS number is correct. Also note that you will need to update your CCR registration on an annual basis. This may take three or more business days to complete.
In addition, if you are submitting your application via
7.
a.
We are participating as a partner in the Governmentwide
If you choose to submit your application electronically, you must use the Governmentwide
You may access the electronic grant application for the Postsecondary Education Center for Individuals who are Deaf competition at
Please note the following:
• Your participation in
• When you enter the
• Applications received by
• The amount of time it can take to upload an application will vary depending on a variety of factors, including the size of the application and the speed of your Internet connection. Therefore, we strongly recommend that you do not wait until the application deadline date to begin the submission process through
• You should review and follow the Education Submission Procedures for submitting an application through
• You will not receive additional point value because you submit your application in electronic format, nor will we penalize you if you submit your application in paper format.
• If you submit your application electronically, you must submit all documents electronically, including all information you typically provide on the following forms: the Application for Federal Assistance (SF 424), the Department of Education Supplemental Information for SF 424, Budget Information—Non-Construction Programs (ED 524), and all necessary assurances and certifications.
• If you submit your application electronically, you must upload any narrative sections and all other attachments to your application as files in a .PDF (Portable Document) format only. If you upload a file type other than a .PDF or submit a password-protected file, we will not review that material.
• Your electronic application must comply with any page-limit requirements described in this notice.
• After you electronically submit your application, you will receive from
• We may request that you provide us original signatures on forms at a later date.
If you are prevented from electronically submitting your application on the application deadline date because of technical problems with the
If you submit an application after 4:30:00 p.m., Washington, DC time, on the application deadline date, please contact the person listed under
b.
If you submit your application in paper format by mail (through the U.S. Postal Service or a commercial carrier), you must mail the original and two copies of your application, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center,
You must show proof of mailing consisting of one of the following:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education.
If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
If your application is postmarked after the application deadline date, we will not consider your application.
c.
If you submit your application in paper format by hand delivery, you (or a courier service) must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center,
The Application Control Center accepts hand deliveries daily between 8:00 a.m. and 4:30:00 p.m., Washington, DC time, except Saturdays, Sundays, and Federal holidays.
(1) You must indicate on the envelope and—if not provided by the Department—in Item 11 of the SF 424 the CFDA number, including suffix letter, if any, of the competition under which you are submitting your application; and
(2) The Application Control Center will mail to you a notification of receipt of your grant application. If you do not receive this notification within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at (202) 245-6288.
1.
2.
In addition, in making a competitive grant award, the Secretary also requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
3.
4.
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multi-year award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
4.
Grantees will be required to report information on their project's performance in annual reports to the Department (34 CFR 75.590).
5.
Louise Tripoli, U.S. Department of Education, 400 Maryland Avenue, SW., room 4077, Potomac Center Plaza (PCP), Washington, DC 20202-2550.
If you use a TDD, call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
You may also access documents of the Department published in the
Office of Special Education and Rehabilitative Services, Department of Education.
Notice.
This priority is:
The Department is committed to the goal of ensuring that every child is on track to graduate from high school with the knowledge and skills needed for success in college and careers. Under Part B of IDEA, State educational agencies (SEAs) and local educational agencies (LEAs) must ensure that the individualized education programs (IEPs) of children with disabilities who turn 16, or younger if determined appropriate by the IEP Team,
Effective transition services are directly linked to better post-school outcomes for students with disabilities (National Alliance for Secondary Education and Transition (NASET), 2005; Test, Fowler, Richter, White, Mazzotti, Walker, Kohler & Kortering, 2009; Test, Mazzotti, Mustian, Fowler, Kortering & Kohler, 2009). Researchers
President Obama has established a goal that by 2020, the United States will once again have the highest proportion of college graduates in the world. To accomplish this goal, we need to better prepare all high school students for postsecondary education and employment; students with disabilities will need more preparation for these post-school outcomes than most. Data suggest that many high school students are underprepared to enter postsecondary education and employment settings (Casner-Lotto & Barrington, 2006; U.S. Department of Education, 2004). The National Longitudinal Transition Study (NLTS-2) reports considerable gaps in achievement in the core academic subjects between students with disabilities and their non-disabled peers and suggests that students with disabilities are less likely to enroll in postsecondary education programs (Newman, Wagner, Cameto, & Knokey, 2009; Wagner, Newman, Cameto, & Levine, 2006). Students with disabilities are also less likely to enter post-school employment. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) reported that in May of 2009, only 22.9 percent of individuals with disabilities—as compared to 71.1 percent of the general population—were in the workforce (BLS, 2009). Post-school outcomes are even more discouraging for particular subpopulations of individuals with disabilities, including individuals with emotional disturbance or intellectual disabilities and those from culturally and linguistically diverse backgrounds (Newman
To improve post-school outcomes for students with disabilities, LEAs and schools need support in (1) Accessing or establishing programs and initiatives designed to ensure college- and career-readiness, such as more challenging or alternative courses, as well as work-based learning experiences;
In addition to funding research on improving post-school outcomes for students with disabilities, the Department's Office of Special Education Programs (OSEP) monitors States in certain priority areas,
To further improve their compliance with Indicator 13, States indicated that they will need to provide LEAs and their stakeholders (
The Department proposes to support a Transition to College and Careers Center (Center) to assist States and LEAs with developing appropriate, measurable postsecondary goals and implementing transition services that result in improved academic and functional achievement of students with disabilities and a successful transition to college (or other postsecondary education and training) and the workforce. The Center's scope of work would include activities that are focused on supporting the implementation of evidence-based practices for transition services and facilitating and increasing the participation of students with disabilities in programs and initiatives to ensure college- and career-readiness (
The purpose of this priority is to fund a cooperative agreement to support the establishment and operation of a Transition to College and Careers Center that will provide TA and disseminate useful information to SEAs, LEAs, schools, and other stakeholders to improve the: (1) Implementation and scaling up
To be considered for funding under this absolute priority, applicants must meet the application requirements contained in this priority. Any project funded under this absolute priority also must meet the programmatic and administrative requirements specified in the priority.
(a) A logic model that depicts, at a minimum, the goals, activities, outputs, and outcomes of the proposed project. A logic model communicates how a project will achieve its outcomes and provides a framework for both the formative and summative evaluations of the project;
The following Web sites provide more information on logic models:
(b) A plan to implement the activities described in the
(c) A plan, linked to the proposed project's logic model, for a formative evaluation of the proposed project's activities. The plan must describe how the formative evaluation will use clear performance objectives to ensure continuous improvement in the operation of the proposed project, including objective measures of progress in implementing the project and ensuring the quality of products and services;
(d) A budget for a summative evaluation to be conducted by an independent third party;
(e) A budget for attendance at the following:
(1) A one and one half day kick-off meeting to be held in Washington, DC, within four weeks after receipt of the award, and an annual planning meeting held in Washington, DC, with the OSEP Project Officer during each subsequent year of the project period.
(2) A three-day Project Directors' Conference in Washington, DC, during each year of the project period.
(3) A two-day Technical Assistance and Dissemination Conference in Washington, DC, during each year of the project period.
(4) A two-day OSEP Leadership Mega Conference in Washington, DC, during each year of the project period.
(5) One one-day trip annually to attend Department briefings, Department-sponsored conferences, and other meetings, as requested by OSEP; and
(f) A line item in the proposed budget for an annual set-aside of five percent of the grant amount to support emerging needs that are consistent with the proposed project's activities, as those needs are identified in consultation with OSEP.
With approval from the OSEP Project Officer, the Center must reallocate any remaining funds from this annual set-aside no later than the end of the third quarter of each budget period.
(a) Conduct a comprehensive review of studies and related evidence and prepare papers that synthesize the research on policies and practices related to the transition of students with disabilities to postsecondary education or a workforce setting (secondary transition) and college- and career-readiness among students with disabilities. In conducting the review of studies and related evidence, the Center must use standards that are consistent with those used by the What Works Clearinghouse and the definitions of
(1) Support the effective implementation and scaling up of evidence-based practices (
(2) Improve postsecondary outcomes for students with disabilities across disability categories and severity levels, including particular subpopulations that tend to have the poorest postsecondary outcomes, such as individuals with emotional disturbance or intellectual disabilities and those from culturally and linguistically diverse backgrounds; and
(3) Facilitate the participation and completion of students with disabilities in programs and initiatives designed to ensure college- and career-readiness (
(b) Conduct an analysis of IDEA, Part B State APRs and other sources of information to determine the current status of the development of appropriate postsecondary goals and the implementation of transition services that support improved performance or create barriers to improved performance.
(a) Provide a continuum of general TA and conduct dissemination activities (
(1) Evidence-based practices that help to improve the academic and functional achievement of students with disabilities, including particular subpopulations of students with disabilities that tend to have the poorest outcomes, and prepare them for college (or other postsecondary education and training) and the workforce; and
(2) Policies and practices that facilitate the participation of students with disabilities in programs and initiatives designed to ensure college- and career-readiness (
(b) Maintain a Web site that meets government or industry-recognized standards for accessibility and that links to the Web site operated by the Technical Assistance Coordination Center (TACC).
(c) Prepare and disseminate reports, documents, and other materials, including publications in peer-reviewed journals, on developing appropriate postsecondary goals and implementing transition services and related topics as requested by OSEP for specific audiences including students, teachers, educators, rehabilitation counselors, families, administrators, policymakers, and researchers. In consultation with the OSEP Project Officer, make selected reports, documents, and other materials available in both English and Spanish.
(d) Develop materials and guidance for States and provide TA related to Indicator 13 on their APRs and SPPs, as requested by OSEP.
(e) Improve data collection and reporting systems at the State and local level related to the development of postsecondary goals and implementation of transition services.
(f) Host an annual national forum for researchers, policymakers, administrators, practitioners, and other appropriate stakeholders to exchange information on developing appropriate postsecondary goals and implementing transition services designed to prepare students with disabilities for college (or other postsecondary education and training) and the workforce.
(g) Identify, in each year of the project period, a minimum of five States to receive intensive TA
In its application, an applicant must describe both the process and the selection criteria that the Center will use to identify the States that will receive the intensive TA. The Center must obtain approval from OSEP before finalizing the selection criteria and making the final selection of States that will receive intensive TA. Once a State is selected, the Center must work with that State for the entire project period. (The Center must identify a minimum of five States the first year of the project period and a minimum of five more States in each of the second and third years of the project period, so that by
(h) Produce a summary of the results of the needs assessments conducted as a part of the intensive TA activities described in paragraph (g) of
(a) Develop collaborative partnerships with business organizations that promote employment of individuals with disabilities, such as the U.S. Business Leadership Network and the National Business and Disability Council, to create and support the operation of a Youth to Work Coalition, which is a group of Federal agencies, businesses, and foundations that will conduct activities to expand work-based learning experiences for students with disabilities. The Center, through these partnerships, must—
(1) Establish and coordinate a network of experts to provide TA to employers on establishing internships or mentoring programs for students with disabilities; and
(2) Develop tools that are designed to assist employers and schools to support work-based learning experiences.
(b) Compile and share data, as directed by OSEP, on States' APRs and updated SPPs for Indicator 13 by—
(1) Reviewing relevant sections of each State's APR and updated SPP and summarizing the data on Indicator 13;
(2) Developing a summary report for Indicator 13 that includes information about States' progress in meeting targets for the indicator, as well as any revisions made to States' monitoring and data systems, measurement systems, or improvement strategies; and
(3) Providing this summary report to OSEP in a timely manner and participating in OSEP-requested teleconferences to discuss the findings of the summary report.
(c) Establish and maintain an advisory committee to review the activities and outcomes of the Center and provide programmatic support and advice throughout the project period. At a minimum the advisory committee must convene annually, whether in person, by phone, or another means, and must represent the perspectives of individuals with disabilities or family members of students with disabilities, students, school-level transition specialists, State transition administrators, general education teachers or administrators, vocational rehabilitation counselors or administrators, postsecondary education disability service providers, adult service agencies, and other appropriate stakeholders. The Center must submit the names of proposed members of the advisory committee to OSEP for approval within eight weeks after receipt of the award.
(d) Communicate and collaborate, on an ongoing basis, with other projects funded by the U.S. Department of Education, such as the National Dropout Prevention Center for Students with Disabilities, the National Post-school Outcomes Center, the National High School Center, the Regional Resource Centers, the IDEA Partnership Project, the Postsecondary Education Programs Network, the National Alliance Technical Assistance Center, the Technical Assistance on Transition and Rehabilitation Act Project, and the National Research Center for Career and Technical Education. This collaboration could include the joint development of products, the coordination of TA services, and the planning and carrying out of TA meetings and events.
(e) Participate in, organize, or facilitate communities of practice that align with the needs of the Center's target audience. Communities of practice should align with the Center's objectives to support discussions and collaboration among key stakeholders. The following Web site provides more information on communities of practice:
(f) Prior to developing any new product, submit a proposal for the product to the TACC database for approval from the OSEP Project Officer. The development of new products should be consistent with the product definition and guidelines posted on the TACC Web site (
(g) Contribute, on an ongoing basis, updated information on the Center's approved and finalized products and services to the TACC database.
(h) Coordinate with the National Dissemination Center for Individuals with Disabilities (
(i) Maintain ongoing communication with the OSEP Project Officer through monthly phone conversations and e-mail communication.
20 U.S.C. 1463 and 1481.
The regulations in 34 CFR part 79 apply to all applicants except federally recognized Indian tribes.
The regulations in 34 CFR part 86 apply to institutions of higher education (IHEs) only.
The Department is not bound by any estimates in this notice.
1.
2.
3.
(b) Applicants and grant recipients funded under this competition must involve individuals with disabilities or parents of individuals with disabilities ages birth through 26 in planning, implementing, and evaluating the project (see section 682(a)(1)(A) of IDEA).
1.
To obtain a copy via the Internet, use the following address:
To obtain a copy from ED Pubs, write, fax, or call the following: ED Pubs, U.S. Department of Education, P.O. Box 22207, Alexandria, VA 22304. Telephone,
You can contact ED Pubs at its Web site, also:
If you request an application package from ED Pubs, be sure to identify this program or competition as follows: CFDA number 84.326J.
To obtain a copy from the program office, contact the person listed under
Individuals with disabilities can obtain a copy of the application package in an accessible format (
2.
• A “page” is 8.5″ x 11″, on one side only, with 1” margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial. An application submitted in any other font (including Times Roman or Arial Narrow) will not be accepted.
The page limit does not apply to Part I, the cover sheet; Part II, the budget section, including the narrative budget justification; Part IV, the assurances and certifications; or the one-page abstract, the resumes, the bibliography, the references, or the letters of support. However, the page limit does apply to all of the application narrative section (Part III).
We will reject your application if you exceed the page limit.
3.
Applications for grants under this competition may be submitted electronically using the
We do not consider an application that does not comply with the deadline requirements.
Individuals with disabilities who need an accommodation or auxiliary aid in connection with the application process should contact the person listed under
4.
5.
6.
a. Have a Data Universal Numbering System (DUNS) number and a Taxpayer Identification Number (TIN);
b. Register both your DUNS number and TIN with the Central Contractor Registry (CCR), the Government's primary registrant database;
c. Provide your DUNS number and TIN on your application; and
d. Maintain an active CCR registration with current information while your application is under review by the
You can obtain a DUNS number from Dun and Bradstreet. A DUNS number can be created within one business day.
If you are a corporate entity, agency, institution, or organization, you can obtain a TIN from the Internal Revenue Service. If you are an individual, you can obtain a TIN from the Internal Revenue Service or the Social Security Administration. If you need a new TIN, please allow 2-5 weeks for your TIN to become active.
The CCR registration process may take five or more business days to complete. If you are currently registered with the CCR, you may not need to make any changes. However, please make certain that the TIN associated with your DUNS number is correct. Also note that you will need to update your CCR registration on an annual basis. This may take three or more business days to complete.
In addition, if you are submitting your application via
7.
a.
We are participating as a partner in the Governmentwide
If you choose to submit your application electronically, you must use the Governmentwide
You may access the electronic grant application for the Transition to College and Careers Center competition at
Please note the following:
• Your participation in
• When you enter the
• Applications received by
• The amount of time it can take to upload an application will vary depending on a variety of factors, including the size of the application and the speed of your Internet connection. Therefore, we strongly recommend that you do not wait until the application deadline date to begin the submission process through
• You should review and follow the Education Submission Procedures for submitting an application through
• You will not receive additional point value because you submit your application in electronic format, nor will we penalize you if you submit your application in paper format.
• If you submit your application electronically, you must submit all documents electronically, including all information you typically provide on the following forms: The Application for Federal Assistance (SF 424), the Department of Education Supplemental Information for SF 424, Budget Information—Non-Construction Programs (ED 524), and all necessary assurances and certifications.
• If you submit your application electronically, you must attach any narrative sections of your application as files in a .PDF (Portable Document) format only. If you upload a file type other than a .PDF or submit a password-protected file, we will not review that material.
• Your electronic application must comply with any page-limit requirements described in this notice.
• After you electronically submit your application, you will receive from
• We may request that you provide us original signatures on forms at a later date.
If you are prevented from electronically submitting your application on the application deadline date because of technical problems with the
If you submit an application after 4:30:00 p.m., Washington, DC time, on the application deadline date, please contact the person listed under
The extensions to which we refer in this section apply only to the unavailability of, or technical problems with, the
b.
If you submit your application in paper format by mail (through the U.S. Postal Service or a commercial carrier), you must mail the original and two copies of your application, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center,
You must show proof of mailing consisting of one of the following:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education.
If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
If your application is postmarked after the application deadline date, we will not consider your application.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, you should check with your local post office.
c.
If you submit your application in paper format by hand delivery, you (or a courier service) must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center,
The Application Control Center accepts hand deliveries daily between 8:00 a.m. and 4:30:00 p.m., Washington, DC time, except Saturdays, Sundays, and Federal holidays.
(1) You must indicate on the envelope and—if not provided by the Department—in Item 11 of the SF 424 the CFDA number, including suffix letter, if any, of the competition under which you are submitting your application; and
(2) The Application Control Center will mail to you a notification of receipt of your grant application. If you do not receive this notification within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at (202) 245-6288.
1.
2.
In addition, in making a competitive grant award, the Secretary also requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
3.
4.
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multi-year award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR
4.
Grantees will be required to report information on their project's performance in annual reports to the Department (34 CFR 75.590).
5.
Michael F. Slade, U.S. Department of Education, 400 Maryland Avenue, SW., room 4083, Potomac Center Plaza (PCP), Washington, DC 20202-2550.
If you use a TDD, call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
You may also access documents of the Department published in the
Department of Education.
Notice of arbitration panel decisions under the Randolph-Sheppard Act.
The Department of Education (Department) gives notice that on May 3, 2010, and April 19, 2011, an arbitration panel rendered decisions in the matter of
You may obtain a copy of the full text of the arbitration panel decisions from Suzette E. Haynes, U.S. Department of Education, 400 Maryland Avenue, SW., Room 5022, Potomac Center Plaza, Washington, DC 20202-2800.
Individuals with disabilities can obtain this document in an accessible format (
Under section 6(c) of the Randolph-Sheppard Act (Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the
Art Stevenson (Complainant) alleged that the Oregon Commission for the Blind, the State licensing agency (SLA), violated the Act and its implementing regulations in 34 CFR part 395. Specifically, Complainant alleged that the SLA improperly administered the transfer and promotion policies and procedures of the Oregon Randolph-Sheppard Vending Facility Program in violation of the Act, implementing regulations under the Act, and State rules and regulations in Complainant's bid to manage the Marion County vending route comprised of vending machines at the Oregon Department of Public Safety Standards and Training (DPSST).
On May 1, 2006, the SLA issued a vacancy announcement for the DPSST vending route. While the posting did not indicate that the DPSST campus would be closed, i.e., that trainees would not be permitted to return home on weekends, the SLA communicated this information at an early May meeting with the Blind Enterprise Consumer Committee, of which Complainant was a member. On May 20, 2006, the SLA informed Complainant that his bid had been accepted. On July 27, 2006, Complainant signed a vendor's operating agreement with the SLA to manage the DPSST vending route. Subsequently, on August 1, 2006, Complainant informed the SLA that he would continue to operate his current vending route in Multnomah County (Multnomah) until September 30, 2006.
On August 10, 2006, staff of the SLA informed Complainant that the Multnomah vending route was being put out to bid. On August 22, 2006, a vacancy announcement was sent to all eligible vendors. Another vendor submitted the only bid for the Multnomah vending route and he was awarded the Multnomah vending route contract on September 6, 2006.
On September 28, 2006, Complainant requested from the SLA a two-week extension on relinquishing the Multnomah vending route to the new vendor, citing low sales figures for the DPSST vending route. The SLA agreed to the extension of Complainant's request to delay turning over the Multnomah vending route to the new vendor.
At a meeting on October 3, 2006, a DPSST official informed the blind vendor and SLA for the first time that the DPSST had decided to operate the DPSST facility as an open campus in which trainees were allowed to go home on weekends. At the same time, the SLA learned that the DPSST cafeteria was selling items in competition with Complainant's vending machines.
On October 4, 2006, Complainant filed a grievance with the SLA requesting an administrative review indicating that “there are several issues that must be addressed before I relinquish my current status as the Multnomah County vending route manager.” Following Complainant's request for an administrative review, staff of the SLA met with him and suggested alternatives to supplement Complainant's income at DPSST. However, Complainant declined the offer and requested that he be permitted to continue operating the Multnomah vending route. The SLA denied Complainant's request. However, Complainant continued to operate the Multnomah vending route until mid-2008. On June 13, 2008, SLA staff directed Complainant to turn over keys to the Multnomah vending route to the new vendor and Complainant complied with the SLA's request.
Subsequently, Complainant filed for a State fair hearing. The SLA held a State hearing on this matter. The SLA adopted the hearing officer's decision to deny Complainant's request to continue operating the Multnomah vending route as final agency action. It is this decision on which Complainant sought review by a Federal arbitration panel.
After hearing testimony and reviewing all of the evidence, the panel majority ruled on May 3, 2010, that Complainant did not have the right to rescind the August 1, 2006, notice of termination of his operating agreement with the SLA for the Multnomah vending route. The panel majority concluded that the change in circumstances in the DPSST vending route was the result of DPSST's unilateral decision to open the campus. It was undisputed that DPSST decided to open the campus after the bidding ended and that it did not inform the SLA of this change until after the vendor complained of unexpected low earnings soon after he began operating the vending machines.
Thus, according to the panel, the SLA was not responsible for the change simply because it occurred at the outset of the operation of the DPSST vending route instead of a month or a year into the operation. Moreover, based on information at the time of the bid, Complainant had no reasonable expectation that he would receive sufficient income from just servicing the DPSST vending route—especially since the vacancy announcement for DPSST informed bidders that additional vending would be a significant part of the DPSST vending route. Finally, when the SLA official became aware of the decision to open the campus, he immediately mitigated the impact by offering additional vending and also promptly objected upon learning that the cafeteria was selling similar items.
The panel majority also ruled that Complainant was not entitled to be restored as the manager of the Multnomah vending route. This was based upon the finding that significant inequities would have ensued had Complainant been allowed to rescind his decision to relinquish the Multnomah vending route. By the time the SLA learned of DPSST's change to an open campus, the new vendor at the Multnomah vending route had already incurred significant cost to prepare to service the Multnomah vending route. Therefore, allowing Complainant to retain the Multnomah vending route would have caused real economic harm to the new vendor.
Accordingly, the panel majority concluded that the SLA did not violate the Randolph-Sheppard Act. The panel majority denied Complainant's motion for summary judgment and granted the SLA's motion for summary judgment.
One panel member dissented from the panel majority's decision stating that Complainant had a right to rescind his agreement to operate the Multnomah vending route. This panel member concluded that, if the SLA had acted upon Complainant's rescission request promptly, no additional harm would have occurred to Complainant or the other vendor. As a remedy, this panel member would have awarded damages in an appropriate amount to Complainant for the SLA's failure to rescind his agreement in a timely manner.
On July 27, 2010, following the panel's submitting the final decision to the Department, Complainant submitted to the panel a Request for Reconsideration. However, the request did not identify any specific issues that remained to be addressed. After consultation, the panel requested by e-mail, dated August 2, 2010, that Complainant articulate the specific issues in his view that were within the panel's jurisdiction under the Randolph-Sheppard Act and identify remaining issues in light of the panel majority's ruling on May 3, 2010.
On August 17, 2010, Complainant responded to the panel with a list of eleven issues. After reviewing the list, the panel majority concluded on April 19, 2011, that Complainant had not presented issues warranting further hearing in this matter. Specifically, the panel determined that it did not have jurisdiction to consider three of the issues because they had not been addressed at the State level first. For the remainder of the issues, the panel determined that they had either already been resolved or were moot. Therefore, Complainant's Request for Reconsideration was denied.
One panel member dissented in part and concurred in part from the panel majority. This panel member dissented stating that Complainant had not waived his right to a hearing on the SLA's alleged inappropriate administration of the Randolph-Sheppard vending facility program regarding the DPSST vending route.
The views and opinions expressed by the panel do not necessarily represent the views and opinions of the Department.
You may also access documents of the Department published in the
Office Electricity Delivery and Energy Reliability, DOE.
Notice of Filings.
The owners of three new base load electric powerplants submitted coal capability self-certifications to the Department of Energy (DOE) pursuant to section 201(d) of the Powerplant and Industrial Fuel Use Act of 1978 (FUA), as amended, and DOE regulations in 10 CFR 501.60, 61. Section 201(d) of FUA requires DOE to publish a notice of receipt of self-certifications in the
Copies of coal capability self-certification filings are available for public inspection, upon request, in the Office of Electricity Delivery and Energy Reliability, Mail Code OE-20, Room 8G-024, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585.
Christopher Lawrence at (202) 586-5260.
Title II of FUA, as amended (42 U.S.C. 8301
Pursuant to FUA section 201(d), in order to meet the requirement of coal capability, the owner or operator of such a facility proposing to use natural gas or petroleum as its primary energy source shall certify to the Secretary of Energy (Secretary) prior to construction, or prior to operation as a base load electric powerplant, that such powerplant has the capability to use coal or another alternate fuel. Such certification establishes compliance with FUA section 201(a) as of the date it is filed with the Secretary. The Secretary is required to publish a notice in the
The following owners of proposed new base load electric powerplants have filed self-certifications of coal-capability with DOE pursuant to FUA section 201(d) and in accordance with DOE regulations in 10 CFR 501.60, 61:
Take notice that on July 20, 2011, El Paso Natural Gas Company (El Paso), P.O. Box 1087, Colorado Springs, Colorado 80944, filed in Docket No. CP11-519-000, a request for authority, pursuant to 18 CFR part 157 and section 7(b) of the Natural Gas Act, to abandon, in place, El Paso's El Paso-Douglas Line (Line No. 1004) in Dona Ana and Luna Counties, New Mexico. Specifically, El Paso proposes to abandon approximately 34.2 miles of 12.75-inch diameter pipeline Line No. 1004 and the related appurtenances between the Afton and Florida Compressor Stations. El Paso states that the abandonment of Line No. 1004 will have no impact on capacity and service, all as more fully set forth in the application, which is on file with the Commission and open to public inspection. The filing may also be viewed on the web at
Any questions regarding this application should be directed to Susan C. Stires, Director, Regulatory Affairs Department, Colorado Interstate Gas Company, P.O. Box 1087, Colorado Springs, CO 80944, telephone no. (719) 667-7514, facsimile no. (719) 667-7534, and
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 7 copies of filings made in the proceeding with the Commission and must mail a copy to the applicant and to every other party. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Take notice that on July 26, 2011, Michigan Consolidated Gas Company (MichCon), and Dawn Gateway Pipeline, LLC (Dawn Gateway), whose offices are co-located at One Energy Plaza, Detroit, Michigan 48226, filed in Docket No. CP11-521-000, a joint application pursuant to section 3 of the Natural Gas Act (NGA) requesting Commission authorization to (1) Permit MichCon to relinquish its existing NGA section 3 authorization and Presidential Permit that was issued to MichCon for the Belle River-St. Clair Pipeline on September 13, 1989; and (2) issue a new NGA section 3 authorization and Presidential Permit to Dawn Gateway to reflect its anticipated lease from MichCon of the Belle River-St. Clair Pipeline. Dawn Gateway states that incorporating MichCon's Belle River-St. Clair Pipeline into the new 21-mile long Dawn Gateway Pipeline system, which includes other pipeline segments in Canada, will improve the connections between Michigan and the Dawn Ontario market hub. MichCon and Dawn Gateway further have requested that the Commission grant these approvals to become effective on the date that the lease takes effect.
The application is on file with the Commission and open to public inspection. This filing may also be viewed on the Commission's Web site at
Any questions regarding this application should be directed to Mark Bering, Director, Marketing & Optimization, DTE Pipeline/Dawn Gateway LLC, One Energy Plaza, Detroit, MI 48226, phone (313) 235-6531 or e-mail
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding, or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify Federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the below listed comment date, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's
Motions to intervene, protests and comments may be filed electronically via the internet in lieu of paper; see, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site under the “e-Filing” link. The Commission strongly encourages electronic filings.
Comment Date: August 24, 2011.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
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Comments, protests, and interventions may be filed electronically via the Internet in lieu of paper; see 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site under the “e-Filing” link. The Commission strongly encourages electronic filings.
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person in the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
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m. This filing is available for review and reproduction at the Commission in the Public Reference Room, Room 2A, 888 First Street, NE., Washington, DC 20426. The filing may also be viewed on the web at
n. Development Application—Any qualified applicant desiring to file a competing application must submit to the Commission, on or before the specified deadline date for the particular application, a competing development application, or a notice of intent to file such an application. Submission of a timely notice of intent allows an interested person to file the competing development application no later than 120 days after the specified deadline date for the particular application. Applications for preliminary permits will not be accepted in response to this notice.
o. Notice of Intent—A notice of intent must specify the exact name, business address, and telephone number of the prospective applicant, and must include an unequivocal statement of intent to submit a competing development application. A notice of intent must be served on the applicant(s) named in this public notice.
p. Protests or Motions to Intervene—Anyone may submit a protest or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210, 385.211, and 385.214. In determining the appropriate action to take, the Commission will consider all protests filed, but only those who file a motion to intervene in accordance with the Commission's Rules may become a party to the proceeding. Any protests or motions to intervene must be received on or before the specified deadline date for the particular application.
q. All filings must (1) bear in all capital letters the title “PROTEST”, “MOTION TO INTERVENE”, “NOTICE OF INTENT TO FILE COMPETING APPLICATION”, “COMPETING APPLICATION”, “COMMENTS”, “REPLY COMMENTS,” “RECOMMENDATIONS,” “TERMS AND CONDITIONS,” or “PRESCRIPTIONS;” (2) set forth in the heading the name of the applicant and the project number of the application to
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Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to protest this filing must file in accordance with Rule 211 of the Commission's Rules of Practice and Procedure (18 CFR 385.211). Protests to this filing will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Such protests must be filed on or before 5 p.m. Eastern time on the specified comment date. Anyone filing a protest must serve a copy of that document on all the parties to the proceeding.
The Commission encourages electronic submission of protests in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene or to protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5 p.m. Eastern time on the specified comment date. It is not necessary to separately intervene again in a subdocket related to a compliance filing if you have previously intervened in the same docket. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. In reference to filings initiating a new proceeding, interventions or protests submitted on or before the comment deadline need not be served on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 14 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First St. NE., Washington, DC 20426.
The filings in the above proceedings are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed dockets(s). For assistance with any FERC Online service, please e-mail
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene or to protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5 p.m. Eastern time on the specified comment date. It is not necessary to separately intervene again in a subdocket related to a compliance filing if you have previously intervened in the same docket. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. In reference to filings initiating a new proceeding, interventions or protests submitted on or before the comment deadline need not be served on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the
Persons unable to file electronically should submit an original and 14 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First St., NE., Washington, DC 20426.
The filings in the above proceedings are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed dockets(s). For assistance with any FERC Online service, please e-mail
On April 1, 2011, Lock+
Hydro Friends' proposed Project Oscar Project No. 14136-000 would consist of: (1) A 109-foot-wide, 40-foot-high lock frame module placed in a new gate constructed in the downstream portion of an inactive, incomplete auxiliary lock of the Lock and Dam No. 5; (2) a 109-foot-wide, 40-foot-high lock frame module placed east of the movable section of the Lock and Dam No. 5 in an existing levee of the east abutment; (3) a new switchyard and control room located on the eastern side of the dam; and (4) a new 3-mile-long, 115-kilovolt transmission line extending from the switchyard to a nearby distribution line which would feed the project power to the grid. Each lock frame module would consist of ten 7-foot-diameter hydropower turbines each rated at 650 kilowatts (kW) based on a design head of 9 feet with a total rated capacity per module of 6.5 megawatts (MW) resulting in a total project installed capacity of 13 MW. Each module would be equipped with fish/debris screens located upstream of each module and control door assemblies that can open and close off flow to the units when needed. The project's average annual generation would be 79,770 megawatt-hours (MWh), and the project would operate run-of-release.
Riverbank Hydro's Mississippi 5 Hydroelectric Project No. 14139-000 would consist of: (1) A forebay and intake structure equipped with a trashrack constructed upstream of the powerhouse on the east section of the dam in the existing levee of the east abutment; (2) a reinforced concrete powerhouse containing five turbine-generators each with a rating of 4,000 kW for a total project installed capacity of 20 MW; (3) a tailrace directing river flows back into the Mississippi River; and (4) a 13.1-mile-long, 69-kV transmission line feeding the project power to an existing transmission line. The intake, powerhouse, and tailrace dimensions would be determined during the permit period. The project's average annual generation would be 87,000 MWh at a head range of 5.0 to 9.5 feet, and the project would operate run-of-release.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about each project, including a copy of the applications, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On June 29 2009, The Appalachian Power Company, licensee for the Claytor Hydroelectric Project, filed an
The license for Project No. 739 was issued for a period ending June 30, 2011. Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1), requires the Commission, at the expiration of a license term, to issue from year-to-year an annual license to the then licensee under the terms and conditions of the prior license until a new license is issued, or the project is otherwise disposed of as provided in section 15 or any other applicable section of the FPA. If the project's prior license waived the applicability of section 15 of the FPA, then, based on section 9(b) of the Administrative Procedure Act, 5 U.S.C. 558(c), and as set forth at 18 CFR 16.21(a), if the licensee of such project has filed an application for a subsequent license, the licensee may continue to operate the project in accordance with the terms and conditions of the license after the minor or minor part license expires, until the Commission acts on its application. If the licensee of such a project has not filed an application for a subsequent license, then it may be required, pursuant to 18 CFR 16.21(b), to continue project operations until the Commission issues someone else a license for the project or otherwise orders disposition of the project.
If the project is subject to section 15 of the FPA, notice is hereby given that an annual license for Project No. 739 is issued to the Appalachian Power Company for a period effective July 1, 2011 through June 30, 2012, or until the issuance of a new license for the project or other disposition under the FPA, whichever comes first. If issuance of a new license (or other disposition) does not take place on or before June 30, 2012, notice is hereby given that, pursuant to 18 CFR 16.18(c), an annual license under section 15(a)(1) of the FPA is renewed automatically without further order or notice by the Commission, unless the Commission orders otherwise.
If the project is not subject to section 15 of the FPA, notice is hereby given that the Appalachian Power Company is authorized to continue operation of the Claytor Hydroelectric Project, until such time as the Commission acts on its application for a subsequent license.
As indicated in the June 21, 2011 Notice in this docket, comments on the technical conference that was held on July 29, 2011, to discuss the performance measurement of demand response in PJM's capacity market, are due 15 days from the date of this conference, or Monday, August 15, 2011.
Take notice that on July 25, 2011, Liberty Gas Storage, LLC (Liberty) submitted a request for confirmation that it is not required to file FERC Form No. 2-A and will not be applicable until such time as the actual volume transactions on Liberty exceed 200,000 Dth for three consecutive calendar years. Liberty argues that given the low levels of total volume transactions on Liberty's pipeline system during the preceding three calendar years, Liberty does not meet the threshold for filing a Form 2-A. Liberty, in fact, has never met this threshold since it placed its initial facilities into service in 2007. Since the Form No. 3-Q filing requirement is applicable only when a natural gas company is obligated to file a Form 2-A, Liberty likewise believes that it is not required to file a Form No. 3-Q under present circumstances. Liberty requests the issuance of an order or other determination on this request for confirmation by September 1, 2011, which is the requested effective date for new, cost-based rates on Liberty's system.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 or 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
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All documents may be filed electronically via the Internet. See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site at
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n. Comments, Protests, or Motions to Intervene: Anyone may submit comments, a protest, or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211, .214. In determining the appropriate action to take, the Commission will consider all protests or other comments filed, but only those who file a motion to intervene in accordance with the Commission's Rules may become a party to the proceeding. Any comments, protests, or motions to intervene must be received on or before the specified comment date for the particular application.
o. Filing and Service of Responsive Documents: Any filing must (1) Bear in all capital letters the title “Comments”, “Protest”, or “Motion to Intervene” as applicable; (2) set forth in the heading the name of the applicant and the project number of the application to which the filing responds; (3) furnish the name, address, and telephone number of the person protesting or intervening; and (4) otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. All comments, motions to intervene, or protests must set forth their evidentiary basis and otherwise comply with the requirements of 18 CFR 4.34(b). All comments, motions to intervene, or protests should relate to project works which are the subject of the amendment application. Agencies may obtain copies of the application directly from the applicant. A copy of any protest or motion to intervene must be served upon each representative of the applicant specified in the particular application. If an intervener files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency. A copy of all other filings in reference to this application must be accompanied by proof of service on all persons listed in the service list prepared by the Commission in this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
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j. Symbiotics LLC, on behalf of Oliver Hydro LLC, filed its request to use the Traditional Licensing Process on May 20, 2011. Symbiotics LLC provided public notice of its request on May 23, 2011. In a letter dated July 20, 2011, the Director of the Division of Hydropower Licensing approved Symbiotics LLC's request to use the Traditional Licensing Process.
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l. Symbiotics LLC, on behalf of Oliver Hydro LLC, filed a Pre-Application Document (PAD; including a proposed process plan and schedule) with the Commission, pursuant to 18 CFR 5.6 of the Commission's regulations.
m. A copy of the PAD is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site (
n. Register online at
Take notice that the following application has been filed with the Commission and is available for public inspection:
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All documents should be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site at
Commenters can submit brief comments up to 6,000 characters, without prior registration, using the eComment system at
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The upper project consists of: (1) A fifty-foot-wide concrete weir, directing water into a 2,002-foot-long, 24-28-inch-diameter steel penstock; (2) a single-story reinforced concrete powerhouse, containing a 261-kW turbine/generator; (3) a tailrace releasing water into the intake for the lower powerhouse; (4) a 75-foot-long transmission line; and (5) appurtenant facilities.
The lower project consists of: (1) A fifty-foot-wide concrete weir, directing water into a 5,341-foot-long 24-28-inch-diameter steel penstock; (2) a two-story reinforced concrete and masonry powerhouse, containing an 850-kW turbine/generator; (3) a tailrace releasing water into Little Cottonwood Creek; (4) a 200-foot-long transmission line; and (5) appurtenant facilities.
When a Petition for Declaratory Order is filed with the Federal Energy Regulatory Commission, the Federal Power Act requires the Commission to investigate and determine if the interests of interstate or foreign commerce would be affected by the proposed project. The Commission also determines whether or not the project: (1) Would be located on a navigable waterway; (2) would occupy or affect public lands or reservations of the United States; (3) would utilize surplus water or water power from a government dam; or (4) if applicable, has involved or would involve any construction subsequent to 1935 that may have increased or would increase the project's head or generating capacity, or have otherwise significantly modified the project's pre-1935 design or operation.
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n. Comments, Protests, or Motions to Intervene—Anyone may submit comments, a protest, or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211, .214. In determining the appropriate action to take, the Commission will consider all protests or other comments filed, but only those who file a motion to intervene in accordance with the Commission's Rules may become a party to the proceeding. Any comments, protests, or motions to intervene must be received on or before the specified comment date for the particular application.
o. Filing and Service of Responsive Documents—Any filings must bear in all capital letters the title “Comments”, “Protests”, and/or “Motions to Intervene”, as applicable, and the Docket Number of the particular application to which the filing refers. A copy of any motion to intervene must also be served upon each representative of the Applicant specified in the particular application.
p. Agency Comments—Federal, State, and local agencies are invited to file comments on the described application. A copy of the application may be obtained by agencies directly from the Applicant. If an agency does not file comments within the time specified for filing comments, it will be presumed to
On February 1, 2011, FFP Project 29 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in West Feliciana and Pointe Coupee Parishes, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Sarah Bend hydrokinetic project would consist of the following: (1) Up to 2,000 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 80,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 175,200,000 kilowatt-hours (kWh), which would be sold to a local utility.
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 11 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near Waggaman, in Jefferson and St. Charles Parishes, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Kenner Bend hydrokinetic project would consist of the following: (1) Up to 2,250 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 90,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 197,100,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 5 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near the town of Belle Chase, in Orleans and St. Bernard Parishes, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Twelve Mile Point hydrokinetic project would consist of the following: (1) Up to 5,000 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 200,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 438,000,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On March 1, 2011, Free Flow Power Corporation filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near New Orleans, in Jefferson and Orleans Parishes, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Carrollton Bend hydrokinetic project would consist of the following: (1) Up to 950 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 38,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 86,420,550 kilowatt-hours (kWh), which would be sold to a local utility.
Applicant Contact: Ramya Swaminathan, Free Flow Power Corporation, 239 Causeway Street, Boston, MA 02114; phone (978) 283-2822.
FERC Contact: Michael Spencer, (202) 502-6093.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On March 1, 2011, Free Flow Power Corporation filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near New Orleans, in Jefferson and Orleans Parishes, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Greenville Bend hydrokinetic project would consist of the following: (1) Up to 1,450 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 58,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 131,905,050 kilowatt-hours (kWh), which would be sold to a local utility.
Applicant Contact: Ramya Swaminathan, Free Flow Power Corporation, 239 Causeway Street, Boston, MA 02114; phone (978) 283-2822.
FERC Contact: Michael Spencer, (202) 502-6093.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On January 10, 2011, FFP Project 125 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near Natchez, in Adams County, Mississippi and near Vidalia, in Concordia Parish, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Vidal Island hydrokinetic project would consist of the following: (1) Up to 5,640 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 225,600 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 513,065,160 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 49 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near the town of Hickman, in Fulton County Kentucky and Mississippi County, Missouri. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Hickman Bend hydrokinetic project would consist of the following: (1) Up to 2,850 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 114,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 249,660,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 47 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in Mississippi County Arkansas and Tipton County, Tennessee. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Williams Point hydrokinetic project would consist of the following: (1) Up to 3,550 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 142,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 310,980,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 43 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in Mississippi County Arkansas and Tipton County, Tennessee. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Plum Point hydrokinetic project would consist of the following: (1) Up to 5,900 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 236,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 516,840,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 37 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in Washington County Mississippi and Chicot County, Arkansas. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Anconia Point hydrokinetic project would consist of the following: (1) Up to 750 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 30,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 65,700,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 Days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 36 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in Issaquena County Mississippi and East Carroll Parish, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Cat Island hydrokinetic project would consist of the following: (1) Up to 2,800 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 112,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 245,280,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 Days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 46 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near the town of Caruthersville, in Pemiscot County, Missouri and Lake County Tennessee. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Little Prairie Bend hydrokinetic project would consist of the following: (1) Up to 2,700 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 108,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 236,520,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 48 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near the town of New Madrid, in New Madrid County, Missouri and Fulton County Kentucky. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed New Madrid Bend hydrokinetic project would consist of the following: (1) Up to 5,350 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 214,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 468,660,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On January 10, 2011, FFP Project 121 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near Vicksburg, in Warren County, Mississippi and near Tallulah in Madison Parish, Louisiana. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Vicksburg Bend hydrokinetic project would consist of the following: (1) Up to 8,340 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 333,600 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 758,681,460 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 44 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in Lauderdale County, Tennessee and in Mississippi County, Arkansas. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Bar Field Bend hydrokinetic project would consist of the following: (1) Up to 4,700 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 188,000 kilowatts; (3) flexible cables would convey each arrays power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 411,720,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 50 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near Wickliffe, in Ballard County, Kentucky and in Mississippi County Missouri. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Wickliffe hydrokinetic project would consist of the following: (1) Up to 1,450 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 58,000 kilowatts; (3) flexible cables would convey each array's power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 127,020,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 42 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, near Memphis, in Shelby County, Tennessee and near West Memphis, in Crittenden County Arkansas. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Hope Field Point hydrokinetic project would consist of the following: (1) Up to 5,600 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 224,000 kilowatts; (3) flexible cables would convey each array's power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 490,560,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On February 1, 2011, FFP Project 45 LLC filed an application, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of hydropower on the Mississippi River, in Mississippi County, Arkansas and Dyer County Tennessee. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed Huffman Light hydrokinetic project would consist of the following: (1) Up to 1,900 SmarTurbine generating units installed in arrays on the bottom of the river; (2) the total capacity of the installation would be up to 76,000 kilowatts; (3) flexible cables would convey each array's power to a metering station; and (4) a transmission line would interconnect with the power grid. The proposed project would have an average annual generation of 166,440,000 kilowatt-hours (kWh), which would be sold to a local utility.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of the Commission's Web site at
On May 13, 2011, Free Flow Power Project 70, LLC filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Mississippi Lock and Dam #19 Water Power Project (Mississippi Lock and Dam #19 Project or project) to be located at the abandoned lock and dry dock area of the Army Corp of Engineer's (Corps) Mississippi Lock and Dam #19 on the Mississippi River, near Keokuk, Lee County, Iowa and Hancock County, Illinois. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The existing dam is composed of four sections: the dam, an existing hydro powerhouse, an abandoned navigational lock at which the project is proposed, and an operational navigational lock. The dam and powerhouse are owned and operated by Ameren UE, and the two lock structures are owned and operated by the Corps.
The proposed project would consist of the following: (1) A 370-foot-wide, 660-foot-long new approach channel; (2) a 500-foot-long new guide wall to separate barge traffic going into the existing operational lock and direct water flow into the powerhouse; (3) an undetermined length of new retaining wall constructed along the eastern edge of the approach channel; (4) a 200-foot-wide, 250-foot-long new reinforced concrete powerhouse containing three new turbine-generators, each rated at 17 megawatts; (5) a 520-foot-wide, 1,100 foot-long new tailrace channel; (6) a discharge retaining wall of undetermined length constructed along the existing operational lock to protect the lock foundation against scour and undermining; (7) a 60-foot-wide, 75-foot-long new substation containing a step-up transformer and high-side and low-side disconnects; (8) a 900-foot-long, 161-kilovolt (kV) transmission line connecting the substation to Ameren UE's existing infrastructure; and (9) appurtenant facilities. The estimated annual generation of the Mississippi Lock and Dam #19 Water Power Project would be 200 gigawatt-hours.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and competing applications may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
Take notice that on July 19, 2011, Natural Gas Pipeline Company of America LLC (Natural), 3250 Lacey Road, Suite 700, Downers Grove, Illinois 60515 filed a prior notice request pursuant to sections 157.205 and 157.216 of the Federal Energy Regulatory Commission's Regulations under the Natural Gas Act (NGA), as amended, for authorization to abandon by removal two 1,250 horsepower horizontal compressor units (Units 9 and 10) at Natural's Compressor Station No. 112 (CS 112) on Natural's Shamrock Lateral located near Stinnett in Moore County, Texas. Natural states that the estimated cost to replace the facilities is approximately $7.5 million. Additionally, Natural avers that Units 9 and 10 are operationally and functionally obsolete and no longer required for system operations. Natural's compressor Units 1 and 2 at CS 112 are sufficient to meet the level of service on Natural's Shamrock Lateral, all as more fully set forth in the application, which is open to the public for inspection. The filing may also be viewed on the web at
Any questions regarding this prior notice should be directed to Bruce H. Newsome, Vice President, Regulatory Products and Services, Natural Gas Pipeline Company of America LLC, 3250 Lacey Road, 7th Floor, Downers Grove, Illinois 60515-7918, or telephone (630) 725-3070, or by e-mail
Any person may, within 60 days after the issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention. Any person filing to intervene or the Commission's staff may, pursuant to section 157.205 of the Commission's Regulations under the NGA (18 CFR 157.205) file a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests, and interventions via the Internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site (
Take notice that on July 29, 2011 Monroe Gas Storage Company, LLC (Monroe), Three Riverway, Suite 1350, Houston, Texas 77056, filed in the above docket, a request pursuant to section 157.213 of the Commission's Regulations under the Natural Gas Act for authorization to modify a previously approved natural gas storage injection and withdrawal well. Specifically, Monroe proposes to alter the authorized but not yet constructed Well MGS-6-W-D from a directional well to a horizontal well, changing its final bottomhole location, and rename it Well MGS-6-W-H. The filing may be viewed on the Web at
Any questions regarding this Application should be directed to J. Gordon Pennington, Attorney at Law, 2707 N. Kensington St., Arlington, VA 22207; phone 703-533-7638; e-mail:
Any person may, within 60 days after the issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention. Any person filing to intervene or the Commission's staff may, pursuant to section 157.205 of the Commission's Regulations under the NGA (18 CFR 157.205) file a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for protest. If a protest is filed and not withdrawn within 30 days after the time allowed for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenter's will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with he Commission's environmental review process. Environmental commenter's will not be required to serve copies of filed documents on all other parties. However, the non-party commentary, will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests, and interventions via the internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site (
Take notice that on July 26, 2011, Williston Basin Interstate Pipeline Company (Williston Basin), 1250 West Century Avenue, Bismarck, North Dakota 58503 filed a prior notice request in accordance with sections 157.210 and 157.216 of the Federal Energy Regulatory Commission's (Commission) Regulations under the Natural Gas Act and Williston Basin's blanket certificate issued in Docket Nos. CP82-487-000,
Any questions regarding the application should be directed to Keith A. Tiggelaar, Director of Regulatory Affairs, Williston Basin Interstate Pipeline Company, 1250 West Century Avenue, Bismarck, North Dakota 58503, or telephone (701) 530-1560, or by e-mail
Any person may, within 60 days after the issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests, and interventions via the internet in lieu of paper. See 18 CFR 385.2001(a) (1) (iii) and the instructions on the Commission's Web site (
Take notice that on July 20, 2011, Questar Pipeline Company (Questar), 180 East 100 South, Salt Lake City, Utah 84111 filed a prior notice request pursuant to 18 CFR 157.205 and 157.214 for authority to increase the maximum certificated volume of natural gas to be stored at its Clay Basin storage reservoir and increase the maximum certificated shut-in pressure of Clay Basin located in Daggett County, Utah. The request was made pursuant to the blanket certificate authorization issued to Questar in Docket No. CP82-491-000, all as more fully set forth in the application, which is open to the public for inspection. The filing may also be viewed on the Web at
Any questions regarding this prior notice application should be directed to L. Bradley Burton, General Manager, Federal Regulatory Affairs, and Chief Compliance Officer, Questar Pipeline Company, 180 East 100 South, P.O. Box 45360, Salt Lake City, Utah 84145-0360, or telephone (801) 324-2459, or fax (801) 324-5834 by e-mail
Any person may, within 60 days after the issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention. Any person filing to intervene or the Commission's staff may, pursuant to section 157.205 of the Commission's Regulations under the NGA (18 CFR 157.205) file a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for protest. If a protest is filed and not withdrawn within 30 days after the time allowed for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests, and interventions via the internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site (
On July 29, 2011, the New York Independent System Operator, Inc. (NYISO) filed a notification of its inability to timely complete price corrections, a request for a limited tariff waiver to permit ancillary service prices to be corrected with the corrected prices to be posted by the end of Monday, August 1, 2011, and a request for a shortened notice period and expedited Commission action. NYISO requests a shortened answer period to facilitate expedited Commission consideration. NYISO states that good cause exists for the Commission to act on an expedited basis because until the Commission acts on NYISO's waiver request, NYISO and market participants will not know if
By this notice, the period for filing answers to NYISO's request for a tariff waiver is shortened to and including August 3, 2011.
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Comments must be submitted on or before October 11, 2011.
Submit your comments, identified by Docket ID No. EPA-HQ-RCRA-2011-0625, by one of the following methods:
•
•
•
•
•
Melissa Kaps, Office of Resource Conservation and Recovery (5304P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
EPA has established a public docket for this ICR under Docket ID No. EPA-HQ-RCRA-2011-0625, which is available for online viewing at
Use
Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically solicits comments and information to enable it to:
(i) 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;
(ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) enhance the quality, utility, and clarity of the information to be collected; and
(iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible and provide specific examples.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Offer alternative ways to improve the collection activity.
6. Make sure to submit your comments by the deadline identified under
7. To ensure proper receipt by EPA, be sure to identify the docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
40 CFR parts 260 and 261 contain provisions that allow regulated entities to apply for petitions, variances, exclusions, and exemptions from various RCRA requirements.
Under 40 CFR 260.20(b), all rulemaking petitioners must submit basic information with their demonstrations, including name, address, and statement of interest in the proposed action. Under § 260.21, all petitioners for equivalent testing or analytical methods must include specific information in their petitions and demonstrate to the satisfaction of the Administrator that the proposed method is equal to, or superior to, the corresponding method in terms of its sensitivity, accuracy, and reproducibility. Under § 260.22, petitions to amend part 261 to exclude a waste produced at a particular facility (more simply, to delist a waste) must meet extensive informational requirements. When a petition is submitted, the Agency reviews materials, deliberates, publishes its tentative decision in the
The ICR provides a detailed explanation of the Agency's estimate, which is only briefly summarized here:
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. At that time, EPA will issue another Federal Register notice pursuant to 5 CFR 1320.5(a)(1)(iv) to announce the submission of the ICR to OMB and the opportunity to submit additional comments to OMB. If you have any questions about this ICR or the approval process, please contact the technical person listed under
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Comments must be submitted on or before October 11, 2011.
Submit your comments, identified by Docket ID No. EPA-HQ-RCRA-2011-0624, by one of the following methods:
•
•
•
•
•
Jeff Gaines, Office of Resource Conservation and Recovery, (5303P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: 703-308-8655; fax number: 703-308-8617; e-mail address:
EPA has established a public docket for this ICR under Docket ID No. EPA-HQ-RCRA-2011-0624, which is available for online viewing at www.regulations.gov, or in person viewing at the RCRA Docket in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The EPA/DC Public Reading Room is open from 8 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for RCRA Docket is (202) 566-0270.
Use
Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically solicits comments and information to enable it to:
(i) 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;
(ii) Evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) Enhance the quality, utility, and clarity of the information to be collected; and
(iv) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology,
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible and provide specific examples.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Offer alternative ways to improve the collection activity.
6. Make sure to submit your comments by the deadline identified under
7. To ensure proper receipt by EPA, be sure to identify the docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
The ICR provides a detailed explanation of the Agency's estimate, which is only briefly summarized here:
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. At that time, EPA will issue another
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Comments must be submitted on or before October 11, 2011.
Submit your comments, identified by Docket ID No. EPA-HQ-RCRA-2011-0626, by one of the following methods:
•
•
•
•
•
William Schoenborn, Office of Resource Conservation and Recovery, (mail code 5303P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
EPA has established a public docket for this ICR under Docket ID No. EPA-HQ-RCRA-2011-0626, which is available for online viewing at
Use
Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically solicits comments and information to enable it to:
(i) 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;
(ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) enhance the quality, utility, and clarity of the information to be collected; and
(iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. In particular, EPA is requesting comments from very small businesses (those that employ less than 25) on examples of specific additional efforts that EPA could make to reduce the paperwork burden for very small businesses affected by this collection.
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible and provide specific examples.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Offer alternative ways to improve the collection activity.
6. Make sure to submit your comments by the deadline identified under
7. To ensure proper receipt by EPA, be sure to identify the docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements which have subsequently changed; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
The ICR provides a detailed explanation of the Agency's estimate, which is only briefly summarized here:
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. At that time, EPA will issue another
Environmental Protection Agency (EPA).
Notice of final action.
This notice is to announce that on June 15, 2011, EPA issued a final Outer Continental Shelf (OCS) air permit for Anadarko Petroleum Corporation (Anadarko). The permit authorizes Anadarko to mobilize the Transocean Discoverer Spirit drill ship and support vessels to drill a single exploration well in the Gulf of Mexico, at Lloyd Ridge Lease Block 410, to determine if natural gas reserves are present in this location. The drill site is located approximately 200 miles southwest of Panama City, Florida. The operation will last less than 92 days, and based on applicable permitting regulations, is a “temporary source” for permitting purposes.
The final permit, EPA's responses to the public comments and additional supporting information are available at
Gregg Worley, Air Permits Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is (404) 562-9141. Mr. Worley can also be reached via electronic mail at
On March 25, 2011, the EPA Region 4 Office requested public comments on a proposal to issue an OCS air permit for Anadarko. During the public comment period, which ended on April 25, 2011, EPA received comments from Offshore Operators Committee and Anadarko Petroleum Corporation regarding the project. EPA carefully reviewed each of the comments submitted and, after consideration of the expressed view of all interested persons, the pertinent federal statutes and regulations, and additional material relevant to the application and contained in the administrative record, EPA made a decision in accordance with title 40 CFR 52.21 and 40 CFR part 55 to issue a final OCS permit.
40 CFR 124.19(f)(2) requires notice of any final Agency action regarding a prevention of significant deterioration (PSD) permit to be published in the
Federal Communications Commission.
Notice.
This document announces the date of the Emergency Access Advisory Committee's (Committee or EAAC) next meeting. The August meeting will continue deliberations to develop recommendations to the Commission as required in the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA).
The Committee's next meeting will take place on Friday, August 12, 2011, 10:30 a.m. to 3:30 p.m. (EST), at the headquarters of the Federal Communications Commission (FCC).
Federal Communications Commission, 445 12th Street, SW., Commission Meeting Room, Washington, DC 20554.
Cheryl King, Consumer and Governmental Affairs Bureau, 202-418-2284 (voice) or 202-418-0416 (TTY), e-mail:
On December 7, 2010, in document DA 10-2318, Chairman Julius Genachowski announced the establishment, and appointment of members and Co-Chairpersons, of the EAAC, an advisory committee required by the CVAA, Pub. L. 111-260, which directs that an advisory committee be established for the purpose of achieving equal access to emergency services by individuals with disabilities as part of our nation's migration to a national Internet protocol-enabled emergency network, also known NG9-1-1.
The purpose of the EAAC is to determine the most effective and efficient technologies and methods by which to enable access to NG9-1-1 emergency services by individuals with disabilities. In order to fulfill this mission, the CVAA directs that within one year after the EAAC's members are appointed, the Committee shall conduct a national survey, with the input of groups represented by the Committee's membership, after which the Committee shall develop and submit to the Commission recommendations to implement such technologies and methods. The EAAC survey has been completed and the EAAC is now considering recommendations based on the survey results. The August meeting will continue deliberations to develop recommendations to the Commission as required in the CVAA.
The meeting site is fully accessible to people using wheelchairs or other mobility aids. Sign language interpreters, open captioning, and assistive listening devices will be provided on site. Other reasonable accommodations for people with disabilities are available upon request. In your request, include a description of the accommodation you will need and a way we can contact you if we need more information. Last minute requests will be accepted, but may be impossible to fill. Send an e-mail to:
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to
August 5, 2011.
11 a.m., Thursday, August 11, 2011.
The Richard V. Backley Hearing Room, 9th Floor, 601 New Jersey Avenue, NW., Washington, DC.
Open.
The Commission will consider and act upon the following in open session:
Any person attending this meeting who requires special accessibility features and/or auxiliary aids, such as sign language interpreters, must inform the Commission in advance of those needs. Subject to 29 CFR 2706.150(a)(3) and 2706.160(d).
Jean Ellen (202) 434-9950/(202) 708-9300 for TDD Relay/1-800-877-8339 for toll free.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than August 24, 22011.
A. Federal Reserve Bank of Richmond (Adam M. Drimer, Assistant Vice President) 701 East Byrd Street, Richmond, Virginia 23261-4528:
1.
B. Federal Reserve Bank of Dallas (E. Ann Worthy, Vice President) 2200 North Pearl Street, Dallas, Texas 75201-2272:
1.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than September 2, 2011.
A. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198-0001:
1.
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR part 225) to engage
Each notice is available for inspection at the Federal Reserve Bank indicated. The notice also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the question whether the proposal complies with the standards of section 4 of the BHC Act.
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 24, 2011.
1.
1.
10 a.m. (EST). August 15, 2011.
4th Floor Conference Room, 1250 H Street, NW., Washington, DC.
Open.
1. Approval of the minutes of the July 18, 2011 Board member meeting
2. Thrift Savings Plan activity report by the Executive Director
a. Monthly Participant Activity Report;
b. Monthly Investment Performance Review;
c. Legislative Report.
Thomas J. Trabucco, Director, Office of External Affairs, (202) 942-1640.
Office of Governmentwide Policy, General Services Administration (GSA).
Notice of a bulletin.
The Internal Revenue Service (IRS) Standard Mileage Rate for moving purposes is the rate at which agencies will reimburse an employee for using a privately owned vehicle for relocation on a worldwide basis. On June 23, 2011, the IRS announced that as of July 1, 2011, the relocation mileage rate would increase to $0.235 until December 31, 2011. FTR Bulletin 11-08 and all other FTR Bulletins may be found at
Mr. Ed Davis, Office of Governmentwide Policy (M), Office of Travel, Transportation and Asset Management (MT), General Services Administration at (202) 208-7638 or via e-mail at
Department of Health and Human Services, Office of the Secretary, Office of the Assistant Secretary for Health, Office of HIV/AIDS Policy.
Notice.
The Department of Health and Human Services is hereby giving notice that the charter for the Presidential Advisory Council on HIV/AIDS (PACHA; the Council) has been renewed.
Mr. Melvin Joppy, Committee Manager, Presidential Advisory Council on HIV/AIDS, Department of Health and Human Services, 200 Independence Avenue, SW., Room 443H Humphrey Building, Washington, DC 20201; (202) 690-5560. More detailed information about PACHA can be obtained by accessing the Council's Web site,
To carry out its mission, PACHA provides advice, information, and recommendations to the Secretary regarding programs and policies to (a) reduce HIV incidence; (b) advance research on HIV/AIDS; (c) improve health outcomes and ensure people living with HIV have access to quality health care; (d) address HIV-related health disparities; and (e) provide global leadership in responding to the HIV pandemic and expand access to treatment, care, and prevention for people infected with and affected by HIV/AIDS around the world.
On July 27, 2011, the Secretary of Health and Human Services approved for the PACHA charter to be renewed. The new charter was effected and filed with the appropriate Congressional offices and Library of Congress on July 27, 2011. Renewal of the PACHA charter gives authorization for the Council to continue to operate until July 27, 2013.
A copy of the PACHA charter is available on the Council
Department of Health and Human Services, Office of the Assistant Secretary for Health, Presidential Commission for the Study of Bioethical Issues.
Notice of meeting.
The Presidential Commission for the Study of Bioethical Issues will conduct its sixth meeting in August. At this meeting, the Commission will discuss research into the U.S. Public Health Service STD inoculation and serological studies in Guatemala from 1946-1948, and the current Federal standards regarding human subjects protection in scientific studies.
The meeting will take place Monday and Tuesday, August 29 and 30, 2011.
The Ritz-Carlton Hotel, 1150 22nd Street, NW., Washington, DC 20037. Phone 202-835-0500.
Hillary Wicai Viers, Communications Director, Presidential Commission for the Study of Bioethical Issues, 1425 New York Avenue, NW., Suite C-100, Washington, DC 20005.
Pursuant to the Federal Advisory Committee Act of 1972, Public Law 92-463, 5 U.S.C. app. 2, notice is hereby given of the sixth meeting of the Presidential Commission for the Study of Bioethical Issues (the Commission). The meeting will be held from 10 a.m. to approximately 4 p.m. on Monday, August 29, 2011, and from 9 a.m. to approximately 4 p.m. on Tuesday, August 30, 2011, in Washington, DC. The meeting will be open to the public with attendance limited to space available. The meeting will also be webcast at
Under authority of Executive Order 13521, dated November 24, 2009, the President established the Commission. The Commission is an advisory panel of the nation's leaders in medicine, science, ethics, religion, law, and engineering. The Commission advised the President on bioethical issues arising from advances in biomedicine and related areas of science and technology. The Commission seeks to identify and promote policies and practices that ensure scientific research, health care delivery, and technological innovation are conducted in a socially and ethically responsible manner.
The main agenda items for this sixth meeting are to review Public Health Service STD inoculation and serological studies in the 1940s in Guatemala as well as contemporary Federal standards for human subjects protections in scientific studies supported by the Federal government as requested by President Obama on November 24, 2010.
The draft meeting agenda and other information about PCSBI, including information about access to the webcast, will be available at
The Commission welcomes input from anyone wishing to provide public comment on any issue before it. Respectful debate of opposing views and active participants by citizens in public exchange of ideas can enhance decisions that are reached and the overall public understanding of them. The Commission is particularly interested in receiving oral comments during the meeting that are responsive to specific sessions. Written comments will be accepted at the registration desk and comment forms will be provided for members of the public to write down questions for the Commission as they arise. To accommodate as many speakers as possible the time for each individual to speak may be limited. If the number of individuals wishing to speak is greater than can reasonably be accommodated during the scheduled meeting, the Commission may randomly select comments.
Anyone planning to attend the meeting who needs special assistance, such as sign language interpretation or other reasonable accommodations, should notify Esther Yoo (contact information above) in advance of the meeting. The Commission will make every effort to accommodate persons who need special assistance.
Written comments will also be accepted and are especially welcome. Please address written comments by e-mail to
Department of Health and Human Services, Office of the Secretary, Office of the Assistant Secretary for Health, National Vaccine Program Office.
Notice.
The Department of Health and Human Services is hereby giving notice that the National Vaccine Advisory Committee (NVAC) has been rechartered.
LCDR Guillermo Aviles-Mendoza, Public Health Advisor, National Vaccine Program Office, Department of Health and Human Services, Room 739G.4 Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201.
Annual Burden Estimates.
Estimated Total Annual Burden Hours: 378.
Copies of the proposed collection may be obtained by writing to the Administration for Children and Families, Office of Administration, Office of Information Services, 370 L'Enfant Promenade, SW., Washington, DC 20447, Attn: ACF Reports Clearance Officer. All requests should be identified by the title of the information collection. E-mail address:
OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the
Administration for Children and Families' Office of Head Start (OHS).
Notice of meetings.
Pursuant to the Improving Head Start for School Readiness Act of 2007, Public Law 110-134, notice is hereby given of one-day Tribal Consultation Sessions to be held between the Department of Health and Human Services, Administration for Children and Families, Office of Head Start leadership and the leadership of Tribal Governments operating Head Start (including Early Head Start) programs. The purpose of these Consultation Sessions is to discuss ways to better meet the needs of American Indian and Alaska Native children and their families, taking into consideration funding allocations, distribution formulas, and other issues affecting the delivery of Head Start services in their geographic locations [42 U.S.C. 9835, Section 640(l)(4)].
October 17 and 19, 2011.
2011 Office of Head Start Tribal Consultation Sessions will be held at the following locations: Monday, October 17, 2011— Seattle, Washington—Westin Seattle,1900 5th Avenue, Seattle, WA 98101; Wednesday, October 19, 2011— Anchorage, Alaska—Sheraton Anchorage Hotel & Spa, 401 East 6th Avenue, Anchorage, AK 99501.
Camille Loya, Acting Regional Program Manager Region XI, e-mail
The Department of Health and Human Services (HHS) announces Office of Head Start (OHS) Tribal Consultations
The agendas for both scheduled OHS Tribal Consultations will be organized around the statutory purposes of Head Start Tribal Consultations related to meeting the needs of American Indian and Alaska Native children and families, taking into consideration funding allocations, distribution formulas, and other issues affecting the delivery of Head Start services in their geographic locations. In addition, OHS will share actions taken and in progress to address the issues and concerns raised in 2010 OHS Tribal Consultations.
Tribal leaders and designated representatives interested in submitting written testimony or proposing specific agenda topics for the Seattle or Anchorage Consultation Sessions should contact Camille Loya at
The Consultation Sessions will be conducted with elected or appointed leaders of Tribal Governments and their designated representatives [42 U.S.C.9835, Section 640(l)(4)(A)]. Designees must have a letter from the Tribal Government authorizing them to represent the Tribe. The letter should be submitted at least three days in advance of the Consultation Session to Camille Loya at (202) 205-9721 (fax). Other representatives of Tribal organizations and Native nonprofit organizations are welcome to attend as observers.
A detailed report of each Consultation Session will be prepared and made available within 90 days of the Consultation Session to all Tribal Governments receiving funds for Head Start and Early Head Start programs. Tribes wishing to submit written testimony for the report should send testimony to Camille Loya at
Oral testimony and comments from the Consultation Session will be summarized in the report without attribution, along with topics of concern and recommendations. Hotel and logistical information for all Consultation Sessions has been sent to Tribal leaders via e-mail and posted on the Head Start Resource Center Web site at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by September 8, 2011.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or e-mailed to
Daniel Gittleson, Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850, 301-796-5156,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Section 502 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 352), among other things, establishes requirements for the label or labeling of a medical device so that it is not misbranded and subject to a regulatory action. Certain provisions under section 502 require manufacturers, importers, and distributors of medical devices to disclose information about themselves or the devices, on the labels or labeling for the devices.
Section 502(b) of the FD&C Act requires that for packaged devices, the label must bear the name and place of business of the manufacturer, packer, or distributor as well as an accurate statement of the quantity of the contents. Section 502(f) of the FD&C Act requires that the labeling for a device must contain adequate directions for use. FDA may however, grant an exemption, if the Agency determines that the adequate directions for use labeling requirements are not necessary for the particular case, as it relates to protection of the public health.
FDA regulations under parts 800, 801, and 809 (21 CFR parts 800, 801, and 809) require disclosure of specific information by manufacturers, importers, and distributors of medical devices about themselves or the devices, on the label or labeling for the devices to health professionals and consumers. FDA issued these regulations under the authority of sections 201, 301, 502, and 701 of the FD&C Act (21 U.S.C. 321, 331, 352, and 371). Most of the regulations under parts 800, 801, and 809 are derived from requirements of section 502 of the FD&C Act, which provides in part, that a device shall be misbranded if among other things, its label or labeling fails to bear certain required information concerning the device, is false or misleading in any particular way, or fails to contain adequate directions for use.
Sections 800.10(a)(3) and 800.12(c) require that the label for contact lens cleaning solutions bear a prominent statement alerting consumers of the tamper-resistant feature. Further, § 800.12 requires that packaged contact lens cleaning solutions contain a tamper-resistant feature, to prevent malicious adulteration.
Section 800.10(b)(2) requires that the labeling for liquid ophthalmic preparations packed in multiple-dose containers provide information on the duration of use and the necessary warning information to afford adequate protection from contamination during use.
Section 801.1 requires that the label for a device in package form, contain the name and place of business of the manufacturer, packer, or distributor.
Section 801.5 requires that labeling for a device include information on intended use as defined under § 801.4 and provide adequate directions to assure safe use by the lay consumers.
Section 801.61 requires that the principal display panel of an over-the-counter (OTC) device in package form must bear a statement of the identity of the device. The statement of identity of the device must include the common name of the device followed by an accurate statement of the principal intended actions of the device.
Section 801.62 requires that the label for an OTC device in package form must bear a statement of declaration of the net quantity of contents. The label must express the net quantity in terms of weight, measure, numerical count, or a combination of numerical count and weight, measure, or size.
Section 801.109 establishes labeling requirements for prescription devices, in which the label for the device must describe the application or use of the device, and contain a cautionary statement restricting the device for sale by, or on the order of an appropriate professional.
For prescription by a licensed practitioner, § 801.110 establishes labeling requirements for a prescription device delivered to the ultimate purchaser or user. The device must be accompanied by labeling bearing the name and address of the licensed practitioner, directions for use, and cautionary statements if any, provided by the order.
Section 801.150(e) requires a written agreement between firms involved when a nonsterile device is assembled or packaged with labeling that identifies the final finished device as sterile, for which the device is ultimately introduced into interstate commerce to an establishment or contract manufacturer to be sterilized. When a written agreement complies with the requirements under § 801.150(e), FDA takes no regulatory action against the device as being misbranded or adulterated. In addition, § 801.150(e) requires that each pallet, carton, or other designated unit, be conspicuously marked to show its nonsterile nature when introduced into interstate commerce, and while being held prior to sterilization.
Section 801.405(b)(1) provides for labeling requirements for articles, including repair kits, re-liners, pads, and cushions, intended for use in temporary repairs and refitting of dentures for lay persons. Section 801.405(b)(1) also requires that the labeling contain the word “emergency” preceding and modifying each indication-for-use statement for denture repair kits and the word “temporary” preceding and modifying each indication-for-use statement for re-liners, pads, and cushions.
Section 801.405(c) provides for labeling requirements that contain essentially the same information described under § 801.405(b)(1). The information is intended to enable a lay person to understand the limitations of using OTC denture repair kits, and denture re-liners, pads, and cushions.
Section 801.420(c)(1) requires that manufacturers or distributors of hearing aids develop a user instructional brochure to be provided by the dispenser of the hearing aid to prospective users. The brochure must contain detailed information on the use and maintenance of the hearing aid.
Section 801.420(c)(4) establishes requirements that the user instructional brochure or separate labeling, provide for technical data elements useful for selecting, fitting, and checking the performance of a hearing aid. In addition, § 801.420(c)(4) provides for testing requirements to determine that the required data elements must be conducted in accordance with the American National Standards Institute's (ANSI) “Specification of Hearing Aid Characteristics,” ANSI S3.22-1996 (ASA 70-1996); (Revision of ANSI S3.22-1987), which is incorporated by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
Section 801.421(b) establishes requirements for the hearing aid dispenser to provide prospective users with a copy of the user instructional brochure along with an opportunity to review comments, either orally or by the predominant method of communication used during the sale.
Section 801.421(c) establishes requirements for the hearing aid dispenser to provide a copy of the user instructional brochure to the prospective purchaser of any hearing aid upon request or, if the brochure is unavailable, provide the name and address of the manufacturer or distributor from which it may be obtained.
Section 801.430(d) establishes labeling requirements for menstrual tampons to provide information on signs, risk factors, and ways to reduce the risk of Toxic Shock Syndrome (TSS).
Section 801.430(e)(2) requires menstrual tampon package labels to provide information on the absorbency term based on testing required under § 801.430(f) and an explanation of selecting absorbencies that reduce the risk of contracting TSS.
Section 801.430(f) establishes requirements that manufacturers of menstrual tampons devise and follow an ongoing sampling plan for measuring the absorbency of menstrual tampons. Further, manufacturers must use the method and testing parameters described under § 801.430(f).
Section 801.435(b), (c), and (h) establishes requirements for condom labeling to bear an expiration date that is supported by testing that demonstrates the integrity of three random lots of the product.
Section 809.10(a) and (b) establishes requirements that a label for an in vitro diagnostic device and the accompanying labeling (package insert), must contain information identifying its intended use, instructions for use and lot or control number, and source.
Section 809.10(d)(1) provides that the labeling requirements for general purpose laboratory reagents may be exempt from the requirements of § 809.10(a) and (b), if the labeling contains information identifying its intended use, instructions for use, lot or control number, and source.
Section 809.10(e) provides that the labeling for “Analytic Specific Reagents” (ASRs) must provide information identifying the quantity or proportion of each reagent ingredient, instructions for use, lot or control number, and source.
Section 809.10(f) provides that the labeling for OTC test sample collection systems for drugs of abuse must include information on the intended use, specimen collection instructions, identification system, and information about use of the test results. In addition, § 809.10(f) requires that this information be in language appropriate for the intended users.
Section 809.30(d) requires that advertising and promotional materials for ASRs include the identity and purity of the ASR and the identity of the analyte.
Section 1040.20(d) provides that manufacturers of sunlamp products and ultraviolet lamps are subject to the labeling regulations under part 801.
Section 801.150(a)(2) establishes recordkeeping requirements for reprocessors, relabelers, or repackagers to retain a copy of the agreement containing the specifications for the processing, labeling, or repacking of the device for 2 years after the shipment or delivery of the device. Section 801.150(a)(2) also requires that the subject respondents make copies of this agreement available for inspection at any reasonable hour to any officer or employee of the Department of Health and Human Services (HHS), upon their request.
Section 801.421(d) establishes requirements for hearing aid dispensers to retain copies of all physician statements or any waivers of medical evaluation for 3 years after dispensing the hearing aid.
Section 801.410(e) requires copies of invoices, shipping documents, and records of sale or distribution of all impact resistant lenses, including finished eyeglasses and sunglasses, be maintained for 3 years by the retailer and made available upon request by any officer or employee of FDA or by any other officer or employee acting on behalf of the Secretary of HHS.
Section 801.410(f) requires that the results of impact tests and description of the test method and apparatus be retained for a period of 3 years.
Section 801.421(d) requires hearing aid dispensers to retain a copy of any written statement from a physician required under § 801.421(a)(1), or any written statement waiving medical evaluation required under § 801.421(a)(2)(iii) for 3 years after the dispensing of the hearing aid.
Section 801.435(g) requires latex condom manufacturers to document and provide, upon request, an appropriate justification for the application of the testing data from one product on any variation of that product to support expiration dating in the user labeling.
In the
FDA estimates the burden of this collection of information as follows:
The medical device labeling regulations also refer to currently approved collections of information found in FDA regulations. The collections of information under § 800.12(d) and 801.437(i) have been approved under OMB control number 0910-0183; the collections of information under § 800.12(e) have been approved under OMB control number 0910-0231; and the collections of information under § 801.435(g) have been approved under OMB control number 0910-0073.
Further, FDA concludes that labeling statements under §§ 801.63, 801.405(b)(2) and (b)(3), 801.420(c)(2) and (c)(3), 801.430(c) and (e)(1), 801.433, 801.437(d) through (g), and 809.30(d)(2), (d)(3), and (e) do not constitute a “collection of information” under the PRA. Rather, these labeling statements are “public disclosure” of information originally supplied by the Federal Government to the recipient for the purpose of “disclosure to the public” (5 CFR 1320.3(c)(2)).
These estimates are based on FDA's registration and listing database for medical device establishments and FDA's knowledge of and experience with device labeling.
These estimates are based on FDA's registration and listing database for medical device establishments, Agency communications with industry, and FDA's knowledge of and experience with device labeling.
The medical device labeling regulations also refer to previously approved collections of information. The collections of information under § 800.12(d) and 801.437(i) have been approved under OMB control number 0910-0183; and the collections of information under § 800.12(e) have been approved under OMB control number 0910-0231.
The information collection requirements under § 801.63, 801.405(b)(2) and (b)(3), 801.420(c)(2) and (c)(3), 801.430(c) and (e)(1), 801.433, 801.437(d) through (g), and 809.30(d)(2), (d)(3), and (e) are not considered information collection because the public information is originally supplied by the Federal Government to the recipient for the purpose of disclosure to the public (5 CFR 1320.3(c)(2)).
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is denying Ray Nathan's request for a hearing and is issuing an order under the Federal Food, Drug, and Cosmetic Act (the FD&C Act) permanently debarring Nathan from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Nathan was convicted of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval, of any drug product. Nathan has failed to file with the Agency information and analysis sufficient to create a basis for a hearing concerning this action.
This order is effective August 9, 2011.
Submit applications for termination of debarment to the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
G. Matthew Warren, Office of Scientific Integrity, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, rm. 4210, Silver Spring, MD 20993, 301-796-4613.
On May 3, 2007, the U.S. District Court for the District of Massachusetts entered a criminal judgment against Nathan pursuant to his guilty plea for wire fraud under 18 U.S.C. 1343 and 1342. The basis for this conviction was Nathan's scheme to obtain from Lyne Laboratories (Lyne) a copy of a certificate of analysis for the drug PhosLo to determine how to manufacture a generic version of the drug. Nathan, a founder of a startup drug company named Argus Therapeutics (Argus), admitted that he created a fake email account for a senior employee at Nabi Biopharmaceuticals (Nabi), a Florida company. In an effort to obtain the certificate of analysis, he then sent an email from that account to an employee at Lyne, which manufactured PhosLo as a subcontractor for Nabi. When the Lyne employee requested a physical address to which the certificate should be sent, Nathan provided the address of another principal at Argus via email. Nathan subsequently sent a third email from the fraudulent email account to inquire about the status of his request.
Nathan is subject to debarment based on a finding, under section 306(a)(2)(A) of the FD&C Act (21 U.S.C. 335a(a)(2)(A)), that he was convicted of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval, of any drug product. By a letter dated March 2, 2010, FDA served Nathan a notice proposing to permanently debar him from providing services in any capacity to a person having an approved or pending drug product application. In a letter dated April 6, 2010, Nathan requested a hearing on the proposal, and he submitted materials in support of that request on May 10, 2010. In his request for a hearing, Nathan acknowledges his conviction for wire fraud under Federal law, as alleged by FDA. However, he argues that the conduct underlying the conviction does not relate to the development or approval, including the
We reviewed Nathan's request for a hearing, as well as the materials submitted in support of that request, and find that Nathan has not created a basis for a hearing because hearings will be granted only if there is a genuine and substantial issue of fact. Hearings will not be granted on issues of policy or law, on mere allegations, denials, or general descriptions of positions and contentions, or on data and information insufficient to justify the factual determination urged (see 21 CFR 12.24(b)).
The Chief Scientist and Deputy Commissioner for Science and Public Health has considered Nathan's arguments and concludes that they are unpersuasive and fail to raise a genuine and substantial issue of fact requiring a hearing.
In support of his hearing request, Nathan argues that the conduct underlying his conviction for wire fraud does not relate to the development or approval of a drug product or otherwise relate to the regulation of drugs under the FD&C Act. We need not address whether the conduct relates to the regulation of drugs under the FD&C Act because it clearly relates to the development of a drug product. Nathan argues that the “development or approval” of a drug product subject to FDA's premarket review begins with preclinical testing in animals and ends with postmarket studies. He contends that his actions in attempting to obtain a certificate of analysis for PhosLo do not relate to that process but instead relate to “pre-development” market research. Nathan maintains that he and Argus were attempting to evaluate production costs for a generic version of PhosLo and that Argus did not possess the funding necessary to pursue the steps that he asserts are associated with the actual development or approval of a drug product.
Nathan's narrow reading of section 306(a)(2)(A) is not convincing. In analyzing the scope of a statute, the first step is to “determine whether the language at issue has a plain and unambiguous meaning.” (
Therefore, the Chief Scientist and Deputy Commissioner for Science and Public Health, under section 306(a)(2)(A) of the FD&C Act and under authority delegated to him, finds that Nathan has been convicted a of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval, of a drug product.
As a result of the foregoing findings, Nathan is permanently debarred from providing services in any capacity to a person with an approved or pending drug product application under section 505, 512, or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 351 of the Public Health Service Act (42 U.S.C. 262), effective August 9, 2011 (21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(ii) and 21 U.S.C. 321(dd)). Any person with an approved or pending drug product application who knowingly uses the services of Nathan, in any capacity during his period of debarment, will be subject to civil money penalties. If Nathan, during his period of debarment, provides services in any capacity to a person with an approved or pending drug product application, he will be subject to civil money penalties. In addition, FDA will not accept or review any abbreviated new drug applications submitted by or with the assistance of Nathan during his period of debarment.
Any application by Nathan for termination of debarment under section 306(d) of the FD&C Act (21 U.S.C. 335a(d)) should be identified with Docket No. FDA-2010-N-0064 and sent to the Division of Dockets Management (see
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of the guidance entitled “Class II Special Controls Guidance Document: Herpes Simplex Virus Types 1 and 2 Serological Assays.” This guidance document describes a means by which the herpes simplex virus types 1 and 2 serological assay device type may comply with the requirement of special controls for class II devices.
Submit either electronic or written comments on this guidance at any time. General comments on Agency guidance documents are welcome at any time.
Submit written requests for single copies of the guidance document entitled “Class II Special Controls Guidance Document: Herpes Simplex Virus Types 1 and 2 Serological Assays” to the Division of Small Manufacturers, International and Consumer Assistance, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, rm. 4613, Silver Spring, MD 20993-
Submit electronic comments on the guidance to
Haja Sittana El Mubarak, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, rm. 5519, Silver Spring, MD 20993-0002, 301-796-6193.
This guidance document provides recommendations on the types of information and data that FDA believes needs to be included in a 510(k) for herpes simplex virus (HSV) types 1 and 2 serological assays. HSV serological assays are devices that consist of antigens and antisera used in various serological tests to identify antibodies to HSV in serum. Additionally, some of the assays consist of HSV antisera conjugated with a fluorescent dye (immunofluorescent assays) used to identify HSV directly from clinical specimens or tissue culture isolates derived from clinical specimens. The identification aids in the diagnosis of diseases caused by HSVs and provides epidemiological information on these diseases. Herpes simplex viral infections range from common and mild lesions of the skin and mucous membranes to a severe form of encephalitis (inflammation of the brain). Neonatal herpes virus infections range from a mild infection to a severe generalized disease with a fatal outcome. We revised the existing guidance by rewriting the method comparison section and the sample selection inclusion and exclusion criteria section. The revisions define and differentiate the required studies and the study populations for the assessment of the safety and effectiveness of the different types of HSV types 1 and 2 serological assays. Additionally, the revisions include several corrections and clarifications throughout the document to ensure accuracy, consistency, and ease of reading. The draft of this guidance issued on September 28, 2010 (75 FR 59726) and the comment period closed on December 27, 2010. We received no comments on the draft guidance. Elsewhere in this issue of the
FDA believes that adherence to the recommendations described in this guidance document, in addition to the general controls, will provide reasonable assurance of the safety and effectiveness of the HSV types 1 and 2 serological assays classified under 21 CFR 866.3305. In order to be classified as a class II device, HSV types 1 and 2 serological assays must comply with the requirements of special controls; manufacturers must address the issues requiring special controls as identified in the guidance document, either by following the recommendations in the guidance document or by some other means that provides equivalent assurances of safety and effectiveness.
Persons interested in obtaining a copy of the guidance may do so by using the Internet. A search capability for all CDRH guidance documents is available at
This guidance refers to previously approved collections of information found in FDA regulations and guidance documents. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 807, subpart E, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 812 have been approved under OMB control number 0910-0078; and the collections of information in 21 CFR part 801 and 21 CFR 809.10 have been approved under OMB control number 0910-0485.
Interested persons may submit to the Division of Dockets Management (see
Food and Drug Administration, HHS.
Notice.
This notice announces a forthcoming meeting of a public advisory committee of the Food and Drug Administration (FDA). The meeting will be open to the public.
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its Web site prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's Web site after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that the Agency is not responsible for providing access to electrical outlets.
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with physical disabilities or special needs. If you require special accommodations due to a disability, please contact AnnMarie Williams at 301-796-5966 at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our Web site at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
In compliance with the requirement of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, for opportunity for public comment on proposed data collection projects, the National Heart, Lung, and Blood Institute (NHLBI), the National Institutes of Health (NIH) will publish periodic summaries of proposed projects to be submitted to the Office of Management and Budget (OMB) for review and approval.
To request more information on the proposed project or to obtain a copy of the data collection plans and instruments, contact Dr. Larissa Aviles-Santa, Project Officer, NIH, NHLBI, 6701 Rockledge Drive, MSC 7936, Bethesda, MD 20892-7936, or call non-toll-free number 301-435-0450 or e-mail your request, including your address to:
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App), notice is hereby given of a meeting of the Board of Scientific Counselors, Lister Hill Center for Biomedical Communications.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public as indicated below in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended for review, discussion, and evaluation of individual intramural programs and projects conducted by the NATIONAL LIBRARY OF MEDICINE, including consideration of personnel qualifications and performance, and the competence of individual investigators, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel, and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
The Substance Abuse and Mental Health Services Administration published a document in the
Cynthia A. Graham, 240-276-1692.
In the
30-Day Notice of Information Collection Under Review: Form G-884, Request for the Return of Original Document(s).
The Department of Homeland Security, U.S. Citizenship and Immigration Services (USCIS) has submitted the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995. The information collection was previously published in the
The purpose of this notice is to allow an additional 30 days for public comments. Comments are encouraged and will be accepted until September 8, 2011. This process is conducted in accordance with 5 CFR 1320.10.
Written comments and/or suggestions regarding the item(s) contained in this notice, especially regarding the estimated public burden and associated response time, should be directed to the Department of Homeland Security (DHS), and to the Office of Management and Budget (OMB) USCIS Desk Officer. Comments may be submitted to: Sunday Aigbe, Chief, Regulatory Products Division, USCIS, 20 Massachusetts Avenue, NW., Washington, DC 20529-2020. Comments may also be submitted to DHS via facsimile to 202-272-0997 or via e-mail at
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6)
If you need a copy of the information collection instrument, please visit the Web site at:
We may also be contacted at: USCIS, Regulatory Products Division, Office of the Executive Secretariat, 20 Massachusetts Avenue, NW., Washington, DC 20529-2020; Telephone 202-272-8377.
U.S. Customs and Border Protection, Department of Homeland Security.
30-Day Notice and request for comments; Extension of an existing collection of information.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act: Crewman's Landing Permit (CBP Form I-95). This is a proposed extension of an information collection that was previously approved. CBP is proposing that this information collection be extended with no change to the burden hours. This document is published to obtain comments from the public and affected agencies. This proposed information collection was previously published in the
Written comments should be received on or before September 8, 2011.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 799 9th Street, NW., 5th Floor, Washington, DC 20229-1177, at 202-325-0265.
CBP invites the general public and other Federal agencies to comment on proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13; 44 U.S.C. 3505(c)(2)). The comments should address: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimates of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden including the use of automated collection techniques or the use of other forms of information technology; and (e) the annual costs burden to respondents or record keepers from the collection of information (a total capital/startup costs and operations and maintenance costs). The comments that are submitted will be summarized and included in the CBP request for Office of Management and Budget (OMB) approval. All comments will become a matter of public record. In this document CBP is soliciting comments concerning the following information collection:
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of receipt of petition to reconcile inconsistent Customs and
Customs and Border Protection (“CBP”) has received a petition, dated June 6, 2010, submitted by an importer (“petitioner”) under 19 CFR 177.13, requesting the reconciliation of inconsistent classification decisions under the Harmonized Tariff Schedule of the United States (“HTSUS”) of a certain CN-9 solution that has been liquidated under subheading 2842.90.90, HTSUS, at the Port of Baltimore on June 3, 2010, and under subheading 3102.60.00, HTSUS, at the Port of Long Beach on October 13, 2009. The petitioner contends that the proper classification for the CN-9 Solution is in subheading 3102.60.00, HTSUS, as “Mineral or chemical fertilizers, nitrogenous: Double salts and mixtures of calcium nitrate and ammonium nitrate.” This document invites comments with regard to the correctness of each classification.
Comments must be received on or before August 24, 2011.
You may submit comments, identified by
•
•
Tamar Anolic, Tariff Classification and Marking Branch, Regulations and Rulings, Office of International Trade at (202) 325-0036.
A petition has been filed under section 177.13, CBP regulations (19 CFR 177.13), on behalf of Yara North America, Inc. (“Yara”). Yara is a subset of Yara International ASA, a global firm specializing in agricultural products and environmental protection agents. It is a supplier of mineral fertilizers. As an importer of these products, Yara has received inconsistent classification decisions on its merchandise at different ports. As such, Yara meets the requirements as an interested party set forth in 19 CFR 177.13(a)(2) and 19 U.S.C. 1514(c) and meets the requirements regarding the types of decisions subject to petition set forth in 19 CFR 177.13(a)(1) and 19 U.S.C. 1514(a). Furthermore, having filed this petition within 90 days of the latest decision it received from a port, Yara meets the timeliness requirements of 19 CFR 177.13(a)(3). Lastly, Yara also meets the requirements of 19 CFR 177.13(b)(2), and specifically 19 CFR 177.13(b)(2)(i) in that their petition contains a complete description of the inconsistent decisions of which they complain. Their petition includes enough information to demonstrate the inconsistency of the decisions at the Ports. Furthermore, the company has submitted a sample that has been tested at Customs and Border Protection (“CBP”) laboratories. Yara is requesting that CBP classify the imported merchandise in subheading 3102.60.00, Harmonized Tariff Schedule of the United States (HTSUS).
This transaction in particular concerns Yara's importation of CN-9 Solution, a hydrated ammonium calcium nitrate double salt that is primarily used as a fertilizer but is also used for waste water treatment. Yara entered the subject merchandise at the Port of Long Beach between January 24, 2009 and September 8, 2009, and the Port of Baltimore on April 20, 2010, under subheading 3102.60.00, HTSUS, as “Mineral or chemical fertilizers, nitrogenous: Double salts and mixtures of calcium nitrate and ammonium nitrate.” Citing Legal Note 2(a)(v) to Chapter 31, HTSUS, the Port of Long Beach liquidated the subject merchandise as entered.
Citing Legal Note 5 to Chapter 28, HTSUS, the Port of Baltimore liquidated the subject merchandise under subheading 2842.90.90, HTSUS, as “Other salts of inorganic acids or peroxoacids (including aluminosilicates whether or not chemically defined), other than azides: Other: Other.”
Pursuant to section 177.13(c), CBP regulations (19 CFR 177.13(c)), before making a determination on this matter, CBP invites written comments on this petition to resolve inconsistent CBP decisions.
The comments received in response to this notice, will be available for public inspection on the docket at
This notice is published in accordance with section 177.13(c), CBP Regulations (19 CFR 177.13(c)).
Office of Community Planning and Development, HUD.
Announcement of funding awards.
In accordance with Section 102(a)(4)(C) of the Department of Housing and Urban Development Reform Act of 1989, this announcement notifies the public of funding decisions made by the Department in a competition for funding under the Fiscal Year 2010 (FY 2010) Notice of Funding Availability (NOFA) for the Self-Help Homeownership Opportunity Program (SHOP). This announcement contains the consolidated names and addresses of this year's award recipients under SHOP.
For questions concerning SHOP Program awards, contact Ginger Macomber, SHOP Program Manager, Office of Affordable Housing Programs, U.S.
The SHOP program provides grants to national and regional nonprofit organizations and consortia that have experience in providing self-help housing. Grant funds are used to purchase land and install or improve infrastructure, which together may not exceed an average investment of $15,000 per dwelling unit. Low-income homebuyers contribute a minimum of 100 hours of sweat equity on the construction of their homes and/or the homes of other homebuyers participating in the local self-help housing program. Sweat equity can include, but is not limited to, assisting in the painting, carpentry, trim work, drywall, roofing and siding for the housing. Persons with disabilities can substitute administrative tasks. Donated volunteer labor is also required.
The SHOP funds together with the sweat equity and volunteer labor contributions significantly reduce the cost of the housing for the low-income homebuyers. The FY 2010 awards announced in this Notice were selected for funding in the NOFA competition posted on February 1, 2011, on the grants.gov website. Applications were scored and selected for funding based on the selection criteria in the General Section and the SHOP program NOFA.
The amount appropriated in FY 2010 to fund the SHOP grants was $26,730,000. The allocations for SHOP grantees are as follows:
These non-profit organizations propose to distribute SHOP funds to several hundred local affiliates that will acquire and prepare the land for construction, select homebuyers, coordinate the homebuyer sweat equity and volunteer efforts, and assist in the arrangement of interim and permanent financing for the homebuyers.
Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the U.S. Fish and Wildlife Service (Service), announce the availability of our draft comprehensive conservation plan and environmental assessment (Draft CCP/EA) for the Kootenai National Wildlife Refuge (NWR, refuge) for public review and comment. The Draft CCP/EA describes our proposal for managing the refuge for the next 15 years.
To ensure consideration, we need to receive your written comments by September 12, 2011.
You may submit comments, requests for more information, or requests for copies by any of the following methods. You may request a hard copy or a CD-ROM of the documents.
Dianna Ellis, Refuge Manager, (208) 267-3888.
With this notice, we continue the CCP process for Kootenai National Wildlife Refuge. We started this process through a notice in the
Kootenai NWR encompasses 2,774 acres along the lower Kootenai River in Boundary County, ID. Habitat types on the refuge include seasonal, semipermanent, and permanent wetlands; floodplain forests; coniferous forests; managed pastures; and croplands. The refuge was established “for use as an inviolate sanctuary, or for any other management purpose, for migratory birds.” The refuge provides important habitat for waterbirds, migratory landbirds, and raptors; a variety of mammals including white-tailed deer, elk, and moose; and bull trout, which is listed as a threatened species under the Federal Endangered Species Act.
The National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668dd-668ee) (Refuge Administration Act), as amended by the National Wildlife Refuge System Improvement Act of 1997, requires us to develop a CCP for each national wildlife refuge. The purpose for developing a CCP is to provide refuge managers with a 15-year plan for achieving refuge purposes and contributing toward the mission of the National Wildlife Refuge System, consistent with sound principles of fish and wildlife management, conservation, legal mandates, and our policies. In addition to outlining broad management direction on conserving wildlife and their habitats, CCPs identify compatible wildlife-dependent recreational opportunities available to the public, including opportunities for hunting, fishing, wildlife observation and photography, and environmental education and interpretation. We will review and update the CCP at least every 15 years in accordance with the Refuge Administration Act.
We began public outreach by distributing Planning Update 1 to our mailing list and public outlets in January 2009. On January 23, 2009, we held two public scoping meetings in Bonners Ferry, Idaho, to meet the public and obtain comments. The meetings were announced through local media outlets, on the refuge's Web site, and in Planning Update 1. We published a Notice of Intent in the
During the public scoping process, we, along with other governmental partners, Tribes, and the public raised several issues which our Draft CCP addresses. A full description of each CCP alternative will be in the EA. To address these issues, we developed and evaluated the following alternatives, summarized below:
Under Alternative 1, the refuge would continue to manage wetlands, croplands, and grasslands for migratory waterfowl, shorebirds, deer, and elk. Two hundred acres of grain crops would be grown annually. Riparian and forest habitat would be maintained. Minimal management of instream habitat would occur. Waterfowl hunting would continue on the 740-acre hunt area, 4 days per week, in accordance with the State's season. A 200-yard no-shooting area (91 acres) would continue along the auto tour route to provide for safety. Big game and upland game (grouse) hunting would be allowed on the 295 acres of timber on the west side of Lions Den and Westside Roads. Fishing would be allowed from the banks of Myrtle Creek only. The 4.5-mile auto tour route would remain open year round to vehicles, walking, bicycling, jogging, dog walking (on leash only), cross-country skiing, and snowshoeing as weather and road conditions permit. Slightly over 5 miles of trails would be open to walking, jogging, and dog walking (on leash only) year round, except for Island Pond Trail, which would be closed on hunt days during the waterfowl hunting season. The Environmental Education Center would be available for teacher-led, and occasionally staff-led, programs. This alternative is considered the base from which to compare the action alternatives.
Under Alternative 2, our preferred alternative, wetland, cropland, and grassland management for migratory waterfowl, shorebirds, deer, and elk would continue. Repairs and improvements to the existing water management infrastructure would take place to increase the refuge's ability to manage wetlands. Increased emphasis would be placed on moist soil management. Crop acreage could decrease to 125 acres with an increase in acreage of moist soil wetlands. Existing riparian habitat would be maintained and increased restoration of native riparian and grassland habitats would occur. White-tailed deer and elk populations would be managed, in consultation with the Idaho Department of Fish and Game (IDFG), through special permit hunts in order to protect restored riparian habitat. Wildfires would still be suppressed and forests would be thinned to maintain an open understory and reduce ladder fuels that would allow fire to carry from the forest understory into the canopy. The refuge would work with partners to examine the feasibility of restoring degraded stream habitats for the benefit of native fish. The refuge would initiate a land protection plan study to analyze alternatives for possible refuge boundary expansion to include 120 acres of floodplain owned by the Idaho Department of Lands.
Waterfowl hunting would be permitted 4 days per week, in accordance with the State's season. The waterfowl hunt area would be reduced to 605 acres due to increasing the size of the 200-yard non-shooting area to include the area along the Deep Creek Trail (225 acres) to provide for safety. An additional ADA-accessible blind would be constructed on the north hunt unit. South Pond would be open to hunting from the ADA blind only. The location of fixed blinds and free roam hunt areas would be adjusted as necessary based on habitat quality, waterfowl use of wetlands, and data from hunter surveys. Overall, waterfowl hunting opportunities will be the same as under current management. Big game, upland game (grouse only), and turkey hunting would be allowed west of Lions Den Road (173 acres). Big game and upland game hunting would be discontinued west of Westside Road (122 acres). A special permit hunt for white-tailed deer and elk would be developed, in consultation with IDFG, to reduce damage to riparian vegetation on the refuge flats. Overall, opportunities for big game and upland game hunting would increase compared to current management. Fishing would be allowed from the banks of Myrtle Creek only.
The 4.5-mile auto tour route would remain open year round to vehicles, walking, bicycling, jogging, dog walking (on leash only), cross-country skiing, and snowshoeing as weather and road conditions permit. Wildlife observation, photography, walking, cross-country skiing, and snowshoeing would be allowed on four trails (3.7 miles total) year round, weather permitting. The Island Pond Trail would be closed to reduce disturbance to waterfowl. Environmental education programs would increase.
Under Alternative 3, actions to protect, maintain, and restore habitat for priority species are the same as under Alternative 2, except that fewer areas would be planted to crops since more acres are managed as moist soil wetlands. The acreage in crops and moist soil would be intermediate between Alternatives 1 and 2.
Waterfowl, big game, upland game, and turkey hunting would be the same as in Alternative 2. As in Alternative 2, special permit hunts for white-tailed deer and elk on the refuge flats would be developed to reduce damage to riparian vegetation. Catch-and-release fishing would be allowed from the banks of Myrtle Creek using single, barbless, non-baited hooks only.
The 4.5-mile auto tour route would remain open year-round to vehicles, walking, bicycling, jogging, dog walking (on leash only), cross-country skiing, and snowshoeing as weather and road conditions permit. Wildlife observation, photography, walking, cross-country skiing, and snowshoeing would be allowed on five trails (4.8 miles total) year round, weather permitting. The Island Pond Trail would be closed, but the 1.1-mile Kootenai River Trail would be reopened. Environmental education programs would increase.
In addition to the information in
After this comment period ends, we will analyze the comments and address them in the final CCP and decision document.
Before including your address, phone number, e-mail address, or other
Fish and Wildlife Service, Interior.
Notice.
Under the Endangered Species Act of 1973, as amended (Act), we, the U.S. Fish and Wildlife Service, announce the availability of a draft general conservation plan (GCP) and accompanying draft environmental impact statement (dEIS). If approved, the GCP would facilitate review of future incidental take applications. The take would affect the federally endangered Alabama beach mouse (
We must receive any written comments on the GCP and dEIS at our Regional Office (see
Documents will be available for public inspection by appointment during normal business hours at the Regional Office, 1875 Century Boulevard, Suite 200, Atlanta, GA 30345, or at the Fish and Wildlife Service Field Office, 1208-B Main Street, Daphne, AL 36526. For how to comment, see Public Comments under
Mr. David Dell, Regional HCP Coordinator (see
We announce the availability of the proposed GCP and the dEIS. These documents analyze the take of the Alabama beach mouse incidental to construction of up to 500 single-family developments potentially affecting an estimated total of 75 acres of Alabama beach mouse habitat. Individual land owners who would need incidental take permits (ITP) for single-family developments, and whose development proposal fits within limits evaluated in the GCP, could apply for ITPs using the GCP provisions instead of producing their own habitat conservation plans. The GCP evaluates issuance of ITPs with up to 50-year terms under section 10(a)(1)(B) of the Act (16 U.S.C. 1531
We specifically request information, views, and opinions from the public via this notice on our proposed Federal action, including identification of any other aspects of the human environment not already identified in the dEIS pursuant to National Environmental Policy Act (NEPA) regulations in the Code of Federal Regulations (CFR) at 40 CFR 1506.6. Further, we specifically solicit information regarding the adequacy of the GCP per 50 CFR parts 13 and 17.
The dEIS analyzes the preferred alternative, as well as a range of reasonable alternatives and the associated impacts of each. Alternative 3 (Preferred Alternative) is implementation of the GCP. Rejection of the GCP would not necessarily halt single-family lot development in the study area. One of the alternatives considered would be to continue individual permitting as is done currently.
Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
If you wish to comment, you may submit comments by any one of several methods. Please reference “Alabama beach mouse GCP” in such comments. You may mail comments to our Regional Office or the Alabama Field Office (see
The GCP coverage area extends along the Gulf of Mexico for about 17 miles, encompassing approximately 2,400 acres of open beach and associated nearshore coastal dune environments on the Fort Morgan Peninsula, Baldwin County, Alabama. The coverage area begins at Little Lagoon Pass, on State Highway 182 in Gulf Shores, and extends westward to the tip of the Fort Morgan State Historic site at the western terminus of the Fort Morgan Peninsula. The area is defined biologically as that area where an Alabama beach mouse population or subpopulation could be affected by residential single-family development.
We will evaluate the GCP and its potential use by ITP applicants, as well as any comments we receive, to determine whether the GCP, when used by ITP applicants, would meet the requirements of section 10(a)(1)(B) of the Act. We will also evaluate whether issuance of section 10(a)(1)(B) ITPs under the GCP would comply with section 7 of the Act by conducting an intra-Service section 7 consultation on anticipated ITP actions. We will consider the results of this consultation, in combination with the above findings, in our final analysis to determine whether or not to make the GCP available to ITP applicants and issue ITPs under the GCP. If we determine that the requirements are met, we will issue ITPs for the incidental take of the Alabama beach mouse to those applicants who meet the criteria established in the GCP.
We provide this notice under section 10 of the Act (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of receipt of applications for permit.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species, marine mammals, or both. With some exceptions, the Endangered Species Act (ESA) and Marine Mammal Protection Act (MMPA) prohibit activities with listed species unless a Federal permit is issued that allows such activities. Both laws require that we invite public comment before issuing these permits.
We must receive comments or requests for documents on or before September 8, 2011. We must receive requests for marine mammal permit public hearings, in writing, at the address shown in the
Brenda Tapia, Division of Management Authority, U.S. Fish and Wildlife Service, 4401 North Fairfax Drive, Room 212, Arlington, VA 22203; fax (703) 358-2280; or e-mail
Brenda Tapia, (703) 358-2104 (telephone); (703) 358-2280 (fax);
Send your request for copies of applications or comments and materials concerning any of the applications to the contact listed under
Please make your requests or comments as specific as possible. Please confine your comments to issues for which we seek comments in this notice, and explain the basis for your comments. Include sufficient information with your comments to allow us to authenticate any scientific or commercial data you include.
The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) Those that include citations to, and analyses of, the applicable laws and regulations. We will not consider or include in our administrative record comments we receive after the close of the comment period (see
Comments, including names and street addresses of respondents, will be available for public review at the address listed under
To help us carry out our conservation responsibilities for affected species, section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The applicant requests a permit to authorize interstate and foreign commerce, export, and cull of excess barashingh (
The applicant requests a permit to import biological samples from howler monkeys (
The following applicants each request a permit to import the sport-hunted trophy of one male bontebok (
The applicant requests a permit to take, import, and export manatee specimens from West Indian manatees (
The applicant requests a permit to photograph polar bears (
Concurrent with publishing this notice in the
Fish and Wildlife Service, Interior.
Notice of document availability.
We, the Fish and Wildlife Service, announce the availability of the final recovery plan for Pyne's ground-plum (
You may obtain a copy of the recovery plan by contacting the Tennessee Field Office, U.S. Fish and Wildlife Service, 446 Neal Street, Cookeville, TN 38501 (telephone 931-528-6481), or by visiting our recovery plan Web site at
Mr. Geoff Call at the above address, or telephone: (931) 528-6481, ext. 213.
We listed Pyne's ground-plum as an endangered species under the Act (16 U.S.C. 1531
Factors contributing to its endangered status are an extremely limited range and loss of habitat. The primary threat is the loss of habitat from residential, commercial, or industrial development; livestock grazing; woody encroachment; and recreational uses such as all-terrain vehicles.
The Act requires the development of recovery plans for listed species, unless such a plan would not promote the conservation of a particular species. Section 4(f) of the Act requires us to provide a public notice and an opportunity for public review and comment during recovery plan development. We made the draft recovery plan available for public comment from April 1 through June 1, 2010 (75 FR 16499). We considered information we received during this public comment period and information from peer reviewers in our preparation of this final recovery plan. We will forward comments to other Federal agencies so each agency can consider these comments in implementing approved recovery plans.
Restoring an endangered or threatened animal or plant to the point where it is again a secure, self-sustaining member of its ecosystem is a primary goal of the endangered species program. To help guide the recovery effort, we are preparing recovery plans for most listed species. Recovery plans describe actions considered necessary for conservation of the species, establish criteria for downlisting or delisting, and estimate time and cost for implementing recovery measures.
The objective of this plan is to provide a framework for the recovery of this species so that protection under the Act is no longer necessary.
• On lands owned and managed by a public agency, with a written plan committing to conserve
• On private lands protected by a permanent conservation easement, State Natural Area registry, or other legally binding agreement, with a written plan committing to conserve
The reclassification and recovery criteria were made more protective in the final recovery plan than they were in the draft recovery plan for this plant based on: (1) Comments from peer reviewers that the plan should provide additional redundancy on the landscape to help protect this plant against threats like drought, (2) new scientific information showing that this plant exhibits density-dependent regulation of population growth, and (3) recognition that more information was needed about the role of this plant's seed bank in maintaining population viability.
As reclassification and recovery criteria are met, the status of the species will be reviewed and the species will be considered for reclassification or removal from the Federal List of Endangered and Threatened Plants.
The authority for this action is section 4(f) of the Endangered Species Act, 16 U.S.C. 1533(f).
United States Geological Survey (USGS), Interior.
Notice; request for comments for a new proposed information collection.
We (the U.S. Geological Survey) will ask the Office of Management and Budget (OMB) to approve the new information collection (IC) described below. As required by the Paperwork Reduction Act of 1995 and as part of our continuing efforts to reduce paperwork and respondent burden, we invite the general public and other Federal agencies to take this opportunity to comment on this IC. The objectives of this information collection are to obtain information on water quality issues that affect private well owners. Please note that we may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
To ensure that we are able to consider your comments to this IC, we must receive them on or before October 11, 2011.
Please submit a copy of your written comments to the USGS Information Collection Clearance Officer, U.S. Geological Survey, 12201 Sunrise Valley Drive, Mail Stop 807, Reston, VA 20192 (mail); 703-648-7197 (phone); 703-648-6853 (fax); or
To request additional information about this IC, please contact the U.S. Geological Survey, Rudy Schuster, 2150-C Centre Avenue, Fort Collins, CO 80526 (mail); by telephone (970) 226-9165; or
Uranium concentrations in groundwater that is used for private domestic drinking water are not well characterized in south-east New Hampshire. These water sources do not fall under any jurisdiction for testing and therefore private well owners generally do not know if uranium is present in their water supply. For example, concentrations 10 times greater than the drinking water standard that applies to public wells have been found in some private wells. The benefits associated with knowing if a well has high uranium in the water or if specific areas of the region have elevated levels is a value to the citizens that inhabit those areas. In most scenarios, approximately 40 percent of the population that utilize private wells in the study area have no option but to connect to public supply. The objectives of this survey are to obtain information on water quality issues that affect private well owners. The survey will gather information concerning: water uranium concentrations, use of wells that may contain uranium, and any systems in place to remove uranium, if present.
We invite comments concerning this IC on: (a) Whether the proposed collection of information is necessary for the agency to perform its duties, 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; (c) ways to enhance the quality, usefulness, and clarity of the information to be collected; and (d) ways to minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology.
Please note comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, e-mail address or other personal identifying information in your comment, you should be aware that your entire comment including your personal identifying information, may be made publically available at any time. While you can ask OMB in your comment to withhold your personal identifying information from public review, we cannot guarantee that will be done.
Bureau of Land Management, Interior.
Notice Of Filing Of Plat Of Survey; Wisconsin.
The Bureau of Land Management (BLM) will file the plat of survey of the lands described below in the BLM-Eastern States office in Springfield, Virginia, 30 calendar days from the date of publication in the
Bureau of Land Management—Eastern States, 7450 Boston Boulevard, Springfield, Virginia 22153.
The survey was requested by the Bureau of Indian Affairs.
The land surveyed is:
The plat of survey represents the dependent resurvey of a portion of the subdivisional lines of Section 8, and the dependent resurvey of Lots 2, 3, and 4 of Block 49, and Lot 4 of Block 50 of the modified Townsite of Lac Du Flambeau, in Section 8, in Township 40 North, Range 5 East, in the State of Wisconsin, and was accepted June 23, 2011.
We will place a copy of the plat we described in the open files. It will be
If BLM receives a protest against the survey, as shown on the plat, prior to the date of the official filing, we will stay the filing pending our consideration of the protest.
We will not officially file the plat until the day after we have accepted or dismissed all protests and they have become final, including decisions on appeals.
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act (FLPMA) and the Federal Advisory Committee Act of 1972 (FACA), the U.S. Department of the Interior, Bureau of Land Management (BLM) Idaho Falls District Resource Advisory Council (RAC), will meet as indicated below.
The Idaho Falls District RAC will meet in Challis, Idaho, September 27-28, 2011 for a two-day meeting at the Challis Field Office, 1151 Blue Mountain Road, Challis, Idaho 83226. The first day will begin at 10:30 a.m. and adjourn at 5 p.m. The second day will begin at 8:30 a.m. and adjourn at 2:30 p.m. Members of the public are invited to attend. A comment period will be held following the introductions at 10:30 a.m. All meetings are open to the public.
The 15-member Council advises the Secretary of the Interior, through the Bureau of Land Management, on a variety of planning and management issues associated with public land management in the BLM Idaho Falls District (IFD), which covers eastern Idaho.
Items on the agenda will include an overview of the current issues affecting the District and Field Offices, review and approval of past meeting minutes, public comment period and discussion of the Wild Horse and Burro program in Challis, and other issues pertinent to the Challis Field Office. Following the morning part of the meeting, a tour of the Wild Horse and Burro facilities and herd management area will be conducted. On the second day, RAC members will meet to discuss the increased monitoring requirements related to threatened and endangered species and the impacts this is having on the local field office. A tour will be conducted at one of the monitoring sites to provide the RAC with a greater understanding of implementation.
All meetings are open to the public. The public may present written comments to the Council. Each formal Council meeting will also have time allocated for hearing public comments. Depending on the number of persons wishing to comment and time available, the time for individual oral comments may be limited. Individuals who plan to attend and need special assistance, such as sign language interpretation, tour transportation or other reasonable accommodations, should contact the BLM as provided below.
Sarah Wheeler, RAC Coordinator, Idaho Falls District, 1405 Hollipark Dr., Idaho Falls, ID 83401.
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act (FLPMA) and the Federal Advisory Committee Act of 1972 (FACA), the U.S. Department of the Interior, Bureau of Land Management (BLM) Coeur d'Alene District Resource Advisory Council (RAC) will meet as indicated below.
September 13, 2011. The meeting will begin at 8:30 a.m. and end no later than 2:30 p.m. The public comment period will be held from 10 a.m. to 10:30 a.m. The meeting will be held at the Blue Creek Bay Recreation Site located six miles east of Coeur d'Alene, Idaho off of Interstate 90 exit 22.
Suzanne Endsley, RAC Coordinator, BLM Coeur d'Alene District, 3815 Schreiber Way, Coeur d'Alene, Idaho 83815 or telephone at (208) 769-5004.
The 15-member RAC advises the Secretary of the Interior, through the Bureau of Land Management, on a variety of planning and management issues associated with public land management in Idaho. The agenda will include a site visit to the developed recreation site at Blue Creek Bay and the historic Mullan Trail Road. The meeting will also include discussion about vegetation treatment projects in the Coeur d'Alene District. Additional agenda topics or changes to the agenda will be announced in local press releases. More information is available at
All meetings are open to the public. The public may present written comments to the RAC in advance of or at the meeting. Each formal RAC meeting will also have time allocated for receiving public comments. Depending upon the number of persons wishing to comment and time available, the time for individual oral comments may be limited. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should contact the BLM as provided above.
Notice is hereby given that, on June 29, 2011, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and PXI Systems Alliance, Inc. intends to file additional written notifications disclosing all changes in membership.
On November 22, 2000, PXI Systems Alliance, Inc. filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on February 24, 2011. A notice was published in the
Notice is hereby given that, on July 1, 2011, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
More detail regarding these changes can be found at
On September 17, 2004, IEEE filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 3, 2011. A notice was published in the
Notice is hereby given that, on June 24, 2011, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Applied Robotics, Inc., Glenville, NY; WIT, St.-Laurent-Du-Var, FRANCE; Caron Engineering, Inc., Wells, ME; and OPTO 22, Temecula, CA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and ODVA intends to file additional written notifications disclosing all changes in membership.
On June 21, 1995, ODVA filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on April 1, 2011. A notice was published in the
On February 24, 2010, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order To Show Cause to Stacey J. Webb, M.D. (Respondent), of Chesapeake, Virginia. The Show Cause Order proposed the denial of Respondent's pending application for a DEA Certificate of Registration as a practitioner, on the ground that she had committed acts which render her registration “inconsistent with the public interest.” Order at 1 (citing 21 U.S.C. 823(f)).
The Show Cause Order specifically alleged that Respondent, while holding a DEA registration (which expired by its terms on May 31, 2009), had “prescribed controlled substances to individuals in Virginia and Alabama via the Internet based on online questionnaires, submissions of unverified medical records, and/or telephone consultations without a medical examination.”
Following service of the Show Cause Order, Respondent initially requested a hearing on the allegations and the matter was placed on the docket of the Agency's Administrative Law Judges. However, the day before the hearing was to convene, Respondent withdrew her request for a hearing and submitted a letter in lieu of a hearing. Order Terminating Proceedings, at 1; Ltr. of Respondent to Hearing Clerk (May 24, 2010) (hereinafter, Resp.'s Ltr.) Respondent did, however, respond to the allegations of the Show Cause Order.
Based on Respondent's letter, I find that she has waived her right to a hearing.
On July 14, 2009, Respondent
On August 1, 2006, the Virginia Board of Medicine issued Respondent a license (number 0101-240458) to practice medicine and surgery in the Commonwealth of Virginia.
From approximately January 2007 through August 2008, Respondent was employed by one or more Internet pharmacy ventures known as Telemed Ventures and/or Secure Telemedicine (hereinafter, Telemed). Va. Consent Order, at 1-2.; Ikner Decl. at 2;
During interviews conducted by Drug Enforcement Administration (DEA) Special Agents and Diversion Investigators with Telemed customers, Respondent's customers described learning about Telemed through an internet source. Fitzgerald Decl. at 11, Aug. 17, 2010. Once connected with the Telemed Web site, customers completed an online questionnaire, which included general health questions and Telemed disclaimer questions.
Following the telephone consultation with the customer, in most instances, an order for a controlled substance was issued and forwarded to a pharmacy to dispense the drugs to the customer. Ikner Decl. at 2
During an interview with a DEA Investigator, Respondent admitted that she never physically examined the Telemed customers before authorizing a prescription, but stated that she spoke with them by telephone every other month. Tribble Decl. at 12, Aug. 2, 2010. Respondent also admitted that she did not have any medical records for the customers, but only “prescription originals.”
Each of the customers who were interviewed provided a description of their interaction with Telemed, and all of them stated that they received prescriptions from Respondent; their prescriptions are contained in the investigative file.
While she was employed by Telemed, Respondent based her practice in and around Norfolk, Virginia.
On September 2, 2009, the Virginia Board of Medicine found that Respondent violated Va. Code §§ 54.1-2915.A(13), (17) and 54.1-3303(A), by prescribing controlled substances over the Internet. Consent Order, at 1. More specifically, the Board found that from July 2007 through October 2008, Respondent prescribed controlled substances, including opioids (schedule III hydrocodone), outside of a bona fide practitioner-patient relationship to numerous persons who “sought medical services” on the Web site TopLineRx.com; the patients were assigned to Respondent by her employer, Secure Telemedicine, LLC, which also owned the Web site.
Section 303(f) of the Controlled Substances Act (CSA) provides that an application for a practitioner's registration may be denied upon a determination “that the issuance of such registration would be inconsistent with the public interest.” 21 U.S.C. 823(f). In making the public interest determination in the case of a practitioner, Congress directed that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The Respondent's experience in dispensing * * * controlled substances.
(3) The Respondent's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
“[T]hese factors are considered in the disjunctive.”
With respect to a practitioner's registration, the Government bears the burden of proving by a preponderance of the evidence that granting the application would be inconsistent with the public interest. 21 CFR 1301.44(d). However, where the Government has made out a
“Moreover, because `past performance is the best predictor of future performance,'
In this matter, while I have considered all of the factors, I conclude that it is not necessary to make findings with respect to factors one (the recommendation of the state licensing board), three (Respondent's conviction record), and five (such other conduct which may threaten public health and safety). I find that the Government's evidence with respect to Respondent's experience in dispensing controlled substances (factor two) and her compliance with applicable Federal and State laws related to the distribution and dispensing of controlled substances (factor four) makes out a
Under a longstanding DEA regulation, a prescription for a controlled substance is not “effective” unless it is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of [her] professional practice.” 21 CFR 1306.04(a). This regulation further provides that “an order purporting to be a prescription issued not in the usual course of professional treatment * * * is not a prescription within the meaning and intent of [21 U.S.C. 829] and * * * the person issuing it, shall be subject to the penalties provided for violations of the provisions of law related to controlled substances.”
As the U.S. Supreme Court has explained, “the [CSA's] prescription requirement * * * ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse. As a corollary, [it] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.”
Under the CSA, it is fundamental that a practitioner must establish and maintain a bona fide doctor-patient relationship in order to act “in the usual course of * * * professional practice” and to issue a prescription for a “legitimate medical purpose.”
Under Virginia law, a “prescription * * * may be issued only to persons * * * with whom the practitioner has a bona fide practitioner-patient relationship.” Va. Code Ann. § 54.1-3303(A). The statute defines the term “bona fide practitioner-patient-pharmacist relationship” as “one in which a practitioner prescribes, and a pharmacist dispenses, controlled substances in good faith to his patient for a medicinal or therapeutic purpose within the course of his professional practice.”
(i) [E]nsure that a medical or drug history is obtained;
(ii) [P]rovide information to the patient about the benefits and risks of the drug being prescribed;
(iii) [P]erform or have performed an appropriate examination of the patient, either physically or by the use of instrumentation and diagnostic equipment through which images and medical records may be transmitted electronically; except for medical emergencies, the examination of the patient shall have been performed by the practitioner himself, within the group in which he practices, or by a consulting practitioner prior to issuing a prescription; and
(iv) [I]nitiate additional interventions and follow-up care, if necessary, especially if a prescribed drug may have serious side effects.
Respondent violated the CSA's prescription requirement because she did not establish a bona fide doctor-patient relationship with the Telemed customers. While Respondent was a resident of Virginia, her practice was located a substantial distance from the majority of the Virginia residents she prescribed to through Telemed. Most significantly, Respondent admitted to Investigators that she prescribed on the basis of telephonic consultations and did not conduct a physical examination of the customers; she also admitted that she did not maintain medical records for them.
In her letter responding to the allegations, Respondent maintained that her “actions met [Virginia's] definition of a practitioner-patient relationship.” Resp.'s Ltr. at 1. First, Respondent maintained that patients submitted their medical records, that Telemed scrutinized the documents for legitimacy, and that she reviewed records and called the customer's primary care physician and/or consultant.
In her letter, Respondent maintained that based on her “literal reading of the Virginia code,” her actions met the definition of a practitioner-patient relationship.
That may be as a matter of tort liability, but that does not mean that the relationship complies with accepted standards of medical practice necessary to properly diagnose a patient and issue treatment recommendations, including prescribing a controlled substance. Indeed, the Virginia Board found Respondent's position unavailing, concluding that she “issu[ed] prescriptions to [customers of the website] despite the fact that her contact with the individuals was solely by telephone and despite the fact that she never saw these individuals in person, and did not perform any examination of them either physically or by the use of instrumentation and diagnostic equipment.” Consent Order at 1-2. The Board further concluded that Respondent “prescribed controlled substances including opioids * * * to numerous individuals outside of a bona fide practitioner-patient relationship.”
In numerous other cases involving practitioners who prescribed controlled substances over the internet and telephone to persons they had never physically examined and with whom they did not establish a bona-fide doctor-patient relationship, DEA has denied pending applications and revoked registrations pursuant to its authority under 21 U.S.C. 824(a)(4).
I therefore conclude that because Respondent failed to establish a legitimate physician-patient relationship with various persons found above, she lacked a legitimate medical purpose and acted outside of the usual course of professional practice in prescribing controlled substances to them and thus violated Federal law.
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 CFR 0.100(b), I order that the application of Stacey J. Webb, M.D., for a DEA Certificate of Registration as a practitioner be, and it hereby is, denied. This order is effective September 8, 2011.
On September 15, 2008, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration (DEA or “Government”), issued an Order to Show Cause to
More specifically, the Show Cause Order alleged that Respondent “knowingly engaged in a scheme to distribute controlled substances based on purported prescriptions that were issued for other than legitimate medical purposes and by physicians acting outside the usual course of professional practice, in violation of Federal and State law.”
By letter of September 29, 2008, Respondent, through its attorney, requested a hearing on the allegations and the matter was placed on the docket of the Agency's Administrative Law Judges (ALJs). Thereafter, on January 13, 2009, an ALJ conducted a hearing in Orlando, Florida at which only the Government presented evidence. Following the hearing, both parties filed briefs containing their proposed findings of fact, conclusions of law, and argument.
On October 6, 2009, the ALJ issued her recommended decision (also ALJ). Therein, the ALJ began by noting that under Federal law “[a] prescription for a controlled substance . . . must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his practice” and that a pharmacist has “a corresponding responsibility” not to fill an unlawful prescription. ALJ at 19 (quoting 21 CFR 1306.04(a)). The ALJ then found that “the evidence shows that the Respondent filled over 42,000 prescriptions written by doctors for patients in states where those doctors were not licensed.”
The ALJ also found that while Respondent “is only licensed to practice pharmacy in Florida, Texas, and Illinois,” it “nevertheless dispensed medication to patients in Arkansas, Connecticut, New Hampshire, California, and Louisiana” and thus “engaged in the unlicensed practice of pharmacy in violation of the laws of these states.”
Finally, the ALJ found that Respondent “knowingly filled prescriptions issued in the name of a doctor whose DEA registration was suspended.”
The ALJ then turned to whether Respondent had rebutted the Government's prima facie case. Noting that “both Mr. Liddy and Mrs. Liddy,” who are Respondent's owners, “invoked their Fifth Amendment privilege against self-incrimination” and refused to testify, the ALJ further found that “Respondent presented no evidence or testimony whatsoever to rebut any of the Government's evidence.”
On October 27, 2009, Respondent filed Exceptions to the ALJ's decision, and on November 9, 2009, the record was forwarded to me for final agency action. On April 14, 2010, Respondent's owner executed a voluntary surrender of its registration. Notice of Surrender and Motion To Terminate Proceedings, at 1. Thereafter, the Government moved to terminate the proceeding on the ground that it is now moot.
Having reviewed the voluntary surrender form (DEA-104), I conclude that this case is not moot because that form contains no language manifesting that Respondent has withdrawn its pending application. Moreover, even if Respondent had withdrawn its application, under the Agency's regulation, once an applicant is served with an order to show cause, an application may only be “withdrawn with permission of the Administrator * * * where good cause is shown by the applicant or where the * * * withdrawal is in the public interest.” 21 CFR 1301.16(a). In light of the extensive resources that have been expended in both the litigation and review of this case, the egregious misconduct established by this record, and that neither the voluntary surrender form nor Agency regulations bar Respondent from immediately re-applying for a new registration or impose any time-bar on its reapplying, I conclude that allowing Respondent to withdraw its application would be contrary to the public interest.
Having considered the entire record in this matter, including Respondent's exceptions, I adopt the ALJ's recommended decision in its entirety except as noted herein. Accordingly, Respondent's pending application will be denied. I make the following findings.
At the time of the hearing, Respondent held DEA Certificate of Registration BD8523335, which authorized it to dispense controlled substances in schedules II through V as a retail pharmacy at its Lakeland, Florida location. GX 1; ALJ Ex. 5, at 1. While Respondent's registration was initially to expire on March 31, 2009, on February 2, 2009, it timely filed a renewal application. GX 1; ALJ Ex. 5, at 1. Accordingly, Respondent's registration remained valid until April 14, 2010, when Respondent's owner surrendered it.
Respondent, which is licensed as a pharmacy in the states of Florida, Texas, and Illinois, Tr. 42, is owned by Mr. Robert Bruce Liddy, Sr., and Mrs. Melinda Carol Liddy. GX 5. Respondent is also known by the name “Discount Mail Meds.” Tr. 19;
At the hearing, the Government called both Mr. and Mrs. Liddy to testify.
At some point not established by the record, multiple law enforcement agencies including DEA commenced an investigation into Respondent's practices, specifically focusing on its filling of prescriptions for hydrocodone (a Schedule III controlled substance), alprazolam (a Schedule IV controlled substance), and Soma or carisoprodol (a drug controlled under Florida law), which were issued by doctors who did not appear to have valid physician-patient relationships with the recipients of the prescriptions because the latter were located throughout the country.
According to the DEA's lead investigator, Respondent was associated with four to five internet prescribing Web sites, including ExpressReliefServices.com and NationwidePills.com.
Between June and August 2006, DEA Investigators from the Cleveland District Office made four undercover purchases of 10 mg. strength hydrocodone drugs by accessing several unidentified Web sites, completing questionnaires, providing medical records, and speaking with a physician's assistant.
Approximately one year later, on July 30, 2007, a search warrant was executed at Respondent and five other locations.
According to the affidavit, Mr. Liddy was first approached by the owner of Express Relief Services (ERS) in December 2004. GX 5, at 1. The owner of ERS was “seeking a pharmacy to fill prescriptions generated from his `network of physicians' in the telemedicine field.”
Mr. Liddy told the DI that Respondent received the prescriptions directly from the prescribing physicians, among them one Dr. Jorge Alsina.
During the interview, Mr. Liddy stated that, while he worked for ERS, he also contracted with other Internet Web sites to fill prescriptions for them.
Mr. Liddy asserted that he had a pharmacy license “in each state where he had out-of-state customers.”
During the execution of the search warrant, Respondent's dispensing records were seized by downloading them from the hard drives of its computer system. Tr. 53, 55, 97. The Government introduced into evidence both summaries of data seized at the execution of the search warrant prepared by the National Drug Intelligence Center (NDIC) and DEA's forensic digital laboratory in Lorton, Virginia, as well as data from DEA's Automated Reports and Consummated Order System (ARCOS) which showed the monthly amounts of hydrocodone (in dosage units) which Respondent purchased between January 1, 2004 and September 16, 2008.
Dr. Jorge Alsina was listed as a prescribing physician in records seized from Respondent.
The DI further testified as to manner in which ERS operated. According to the DI, an ERS clerk would request medical records and a copy of a driver's license from a customer; the records were then faxed to either Dr. Alsina or to Mr. Folder, who was a physician's assistant. However, in an interview, Dr. Alsina stated that he did not have a registered supervisory relationship with Folder as required by Florida law.
Dr. Alsina also “did not necessarily review” the medical records which he would fax to the physician's assistant; Alsina would also e-mail the prescription to Folder as well.
The Government introduced into evidence eight prescriptions for controlled substances that were sent as e-mail attachments from “Matthew and Gayle Folder” to “Bruce Liddy.” GX 4, at 2, 4, 8, 10, 12, 14, 18, and 20. All of the prescriptions were dated March 19, 2005 and bore Dr. Alsina's electronic signature.
The Government also entered into evidence an e-mail dated September 10, 2004, from Danna E. Droz, Executive Director, Board of Pharmacy, State of Florida, to Mr. Liddy at the e-mail address:
The DI testified that the “vast majority” of the seized prescriptions did not comply with the manual signature requirement.
Based on the records seized from Respondent, the NDIC prepared a chart compiling the number of prescriptions dispensed by Respondent by each prescriber for hydrocodone, alprazolam and other drugs. GX 14. According to the chart, Respondent filled 19,447 prescriptions which were written by Dr. Alsina; 12,796 of the prescriptions were for hydrocodone products and 5,860 were for alprazolam. GX 14, at 1; GX 15. Only 791 prescriptions were for other drugs, some of which may have also been controlled substances.
Moreover, between October 2004 and the end of December 2005, Respondent dispensed prescriptions written by Dr. Alsina to patients in such states as West Virginia (4,308 prescriptions), Tennessee (4,307 prescriptions), Ohio (2,455 prescriptions), Kentucky (2,346 prescriptions),
As an example of Dr. Alsina's prescribing of controlled substances across state lines, on July 6, 2005, he issued 351 prescriptions
DEA suspended Dr. Alsina's Certificate of Registration on September 26, 2005. Tr. 44-45; GX 10. Dr. Alsina notified Respondent of this fact by an e-mail of October 5, 2005, which Respondent acknowledged with another e-mail of the same date. Tr. 47-48; GX 12. However, Respondent's records reflect that through December 2005, Respondent continued to fill prescriptions issued using Dr. Alsina's registration. GX 20, at 66-68. More specifically, it appears that Respondent filled 67 prescriptions from the time of the suspension through the end of December 2005. GX 20; GX 13;
Respondent's pharmacy records also listed Dr. Dora Fernandez as a prescribing physician. Tr. 43; GXs 13-14, 19 & 20. Dr. Fernandez is only licensed to practice medicine in the State of Florida. Tr. 43.
The NDIC data indicate that Dr. Fernandez wrote a total of 13,603 prescriptions which were filled by Respondent. Of these, 3,242 were for hydrocodone, 60 were for alprazolam, and 301 were for other medications. GX 14, at 1; GX 15. Between February 2006 and the end of April 2007, Respondent dispensed prescriptions written by Dr. Fernandez to individuals in numerous States, in the following quantities: Florida (1,448 prescriptions), Texas (1,387 prescriptions), Alabama (856 prescriptions), Virginia (837 prescriptions), New York (702 prescriptions), Washington (690 prescriptions), Michigan (652 prescriptions), Pennsylvania (497 prescriptions), Ohio (476 prescriptions)
As an example of her prescribing across state lines, on November 13, 2006, Dr. Fernandez issued 91 prescriptions.
Given the respective locations of Dr. Fernandez and those she prescribed to, it is implausible that Dr. Fernandez conducted physical examinations of these persons and established bona fide doctor-patient relationships with them. Here again, Respondent clearly had reason to know that Dr. Fernandez could not have established a bona fide doctor-patient relationship with these persons. Tr. 43-44.
Respondent's records also listed Dr. Jose Mercado Francis as a prescribing physician. Tr. 43; GXs 13-15, 19 & 20. Dr. Francis is only licensed to practice medicine in the State of Michigan.
The NDIC data indicates that Dr. Francis wrote 7,319 prescriptions which were filled by Respondent, including 5,135 for hydrocodone products, 1,135 for alprazolam, and 1,049 for other medications. GX 14, at 1. Between February 2006 and the end of April 2007, Respondent dispensed prescriptions written by Dr. Francis to individuals in a number of States, the top ten being as follows: Alabama (1,294 prescriptions), California (568 prescriptions), Louisiana (518 prescriptions), Texas (486 prescriptions), Washington (456 prescriptions), Ohio (404 prescriptions), Florida (386 prescriptions), Georgia (337 prescriptions), Virginia (272 prescriptions), and Maine (268 prescriptions). GXs 19, at 1; GX 20, at 195-270. Again, even assuming that all of the non-specified prescriptions were for non-controlled drugs and subtracting them out, Dr. Francis still clearly issued numerous controlled substance prescriptions to residents of Alabama.
As an example of his prescribing across state lines, on March 3, 2006, Dr. Francis issued thirty prescriptions to residents of the following States: Georgia (7), South Carolina (4), Florida (3), Maryland (3), Ohio (3), California (2), Indiana (2), Louisiana (2), Colorado (1), Maine (1), North Carolina (1), and Texas (1). GX 20, at 196. Clearly, Dr. Francis could not have established bona fide doctor-patient relationships with these patients or performed physical examinations on them. Here again, Respondent, when it filled these prescriptions, had reason to know this.
Respondent's records list Dr. Edward Cheslow as a prescribing physician. Tr. 44; GXs 13-14, 19-20. Dr. Cheslow is only licensed to practice in the State of New York. Tr. 44.
NDIC data show that Dr. Cheslow wrote 6,577 prescriptions which were filled by Respondent; of these, 6,362 were for hydrocodone products, 36 were for alprazolam, and 179 were for other medications. GX 14, at 1. From February 2006 through May 1, 2007, Dr. Cheslow wrote prescriptions for medications which were filled by Respondent for residents of numerous States, the top ten being California (2,831 prescriptions), Texas (349 prescriptions), Florida (299 prescriptions), Georgia (232 prescriptions), New York (206 prescriptions), New Jersey (185 prescriptions), Ohio (177 prescriptions), Washington (168 prescriptions), Virginia (162 prescriptions), and Alabama (140 prescriptions). GX 19, at 1-2; GX 20, at 270-343. Subtracting out the 179 prescriptions for “other” medication, the evidence still shows that Dr. Cheslow wrote controlled substance prescriptions for individuals in California, Texas, Florida, Georgia, and New Jersey.
As an example of Dr. Cheslow's daily prescribing, on October 23, 2006, he issued thirty prescriptions to residents of States where he was not licensed to practice as follows: California (16), Texas (3), Florida (2), Mississippi (2), Alabama (1), Maine (1), Minnesota (1), New Jersey (1), Ohio (1), Utah (1), and Virginia (1). GX 20, at 305. Again, Respondent dispensed these prescriptions having reason to know that Dr. Cheslow was prescribing to persons who resided in States where he was not licensed to practice medicine and that he was prescribing to persons he did not physically examine and with whom he did not establish a bona fide doctor-patient relationship.
Respondent's records list Dr. Gerard Romain as a prescribing physician. Tr. 44; GXs 13-14, 19-20. Dr. Romain is only licensed to practice medicine in the State of Florida. Tr. 44.
The NDIC data indicate that Respondent filled 6,121 prescriptions issued by Dr. Romain, of which 5,103 were for hydrocodone products, 681 were for alprazolam, and 337 were for other medications. GX 14, at 2. Between May 2004 and June 18, 2007, Respondent dispensed prescriptions issued by Dr. Romain to individuals in numerous States, the top ten being as follows: Virginia (672 prescriptions), California (433 prescriptions), West Virginia (367 prescriptions), Ohio (354 prescriptions), Florida (339 prescriptions), Tennessee (321 prescriptions), Alabama (309 prescriptions), Texas (294 prescriptions), Georgia (231 prescriptions), and Indiana (205). GXs 19, at 2, & 20, at 428-517. Again, even if the 337 prescriptions for other medications were for non-controlled drugs, at a minimum, Dr. Romain prescribed controlled substances to residents of Virginia, California, West Virginia, and Ohio, and likely other States as well.
As an example of Dr. Romain's daily prescribing, on September 23, 2005, he issued twenty-two prescriptions to individuals in the following States: West Virginia (6), Virginia (5), Ohio (3), California (2), Washington (2), Alabama (1), Connecticut (1), Kansas (1), and Texas (1). GX 20, at 435. Again, in filling these prescriptions, Respondent had reason to know that Dr. Romain did not physically examine the patients and could not have established bona fide doctor-patient relationships with them.
Respondent's pharmacy records also list Dr. Felix Llamido as a prescribing physician. Tr. 44; GXs 13-14; GXs 19-20, at 343-428. Dr. Llamido is only licensed to practice in the State of Florida. Tr. 44.
According to the NDIC data, Respondent filled 6,481 prescriptions written by Dr. Llamido, of which 6,290 were for hydrocodone products, 32 were for alprazolam, and 159 for other medications. GX 14, at 1. Between February 2006 and the end of April 2007, Respondent dispensed prescriptions written by Dr. Llamido to patients in numerous States, the top ten being California (766 prescriptions), New Jersey (582 prescriptions), Georgia (550 prescriptions), Massachusetts (518 prescriptions), Maryland (470 prescriptions), Texas (363 prescriptions), Illinois (350
As an example of his daily prescribing, on March 27, 2006, Dr. Llamido issued thirty-nine prescriptions to residents of the following states: California (6), Maryland (5), New Hampshire (3), Ohio (3), Pennsylvania (3), New Jersey (2), Texas (2), Virginia (2), Washington (2), West Virginia (2), Connecticut (1), Georgia (1), Hawaii (1), Indiana (1), Minnesota (1), Mississippi (1), Oklahoma (1), Utah (1), and Wisconsin (1). GX 20, at 350. Again, Respondent had reason to know that Dr. Llamido could not have performed physical examinations on these patients and did not have bona fide doctor-patient relationships with them.
Finally, Respondent's pharmacy records listed Dr. Caroline Moore as a prescribing physician. Tr. 44; GXs 13-14, 19-20, at 517-35. Dr. Moore is licensed only in the State of Florida. Tr. 44.
The NDIC data shows that Respondent filled 2,687 prescriptions written by Dr. Moore, including 1,884 for hydrocodone products, 659 for alprazolam, and 144 for other medications. GX 14, at 1-2. From January 2, 2005 through the end of December 2006,
As an example of Dr. Moore's out-of-state prescribing practices, on November 21, 2005, she issued seventy-two prescriptions to residents in States other than Florida, as follows: West Virginia (22), Ohio (14), California (10), Virginia (3), Georgia (2), Indiana (2), Massachusetts (2), Missouri (2), North Carolina (2), New Jersey (2), New York (2), Pennsylvania (2), Texas (2), Arkansas (1), Arizona (1), Illinois (1), Oklahoma (1), and Washington (1). GX 20, at 524. Given the geographically diverse locations of Dr. Moore's “patients,” in filling these prescriptions, Respondent clearly had reason to know that Dr. Moore did not physically examine them and did not establish bona fide doctor-patient relationships with them.
The Government also entered into evidence a letter from Robert Bruce Liddy, Sr., to Peter A. Grasso, Chief Compliance Investigator, New Hampshire Board of Pharmacy, dated November 18, 2005. GX 9. In the letter, Mr. Liddy wrote that Respondent did not “solicit prescription sales [from] the State of New Hampshire or any other state outside of Florida.”
The Government submitted into evidence data showing that between May 25, 2004 and May 14, 2007, Respondent dispensed a total of 472 prescriptions to New Hampshire residents; the evidence also shows that Respondent dispensed twenty-four prescriptions prior to the date of the above-referenced letter. GX 18, at 1, 11. Moreover, prior to Mr. Liddy's letter, Respondent had dispensed seven prescriptions for controlled substances (as well as refills for several of the prescriptions) for drugs which included alprazolam, temazepam, hydrocodone, and oxycodone.
Respondent rested without calling any witnesses or introducing any other evidence. Moreover, as noted above, when called to testify by the Government, Respondent's owners invoked their privilege under the Fifth Amendment and refused to answer any questions regarding their ownership of Respondent, the pharmacy's operations and its association with various Web sites. Tr. 12-13 (testimony of Robert Bruce Liddy, Sr.);
Section 303(f) of the Controlled Substances Act (CSA) provides that “[t]he Attorney General may deny an application for [a practitioner's] registration if he determines that the issuance of such registration would be inconsistent with the public interest.” 21 U.S.C. 823(f). In determining the public interest, section 303(f) directs that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
“[T]hese factors are * * * considered in the disjunctive.”
Having considered all of the factors, I conclude that the evidence pertaining to factors two and four is dispositive and establishes that Respondent has committed acts which render the issuance of a registration to it “inconsistent with the public interest.”
Under a longstanding DEA regulation, a prescription for a controlled substance is unlawful unless it has been “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). Moreover, while “[t]he responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner * * * a corresponding responsibility rests with the pharmacist who fills the prescription.”
The Agency has interpreted this regulation as “prohibiting a pharmacist from filling a prescription for controlled substances when he either `knows or has reason to know that the prescription was not written for a legitimate medical purpose.' ”
As I explained in
Moreover, “[a] physician who engages in the unauthorized practice of medicine is not a `practitioner acting in the usual course of * * * professional practice.' ”
Consistent with the statutory text, shortly after the CSA's enactment, the Supreme Court explained that “[i]n the case of a physician, [the Act] contemplates that he is authorized by the State to practice medicine and to dispense drugs in connection with his professional practice.”
As found above, Respondent dispensed millions of dosage units of hydrocodone (a schedule III controlled substance,
As found above, five of the doctors whose prescriptions Respondent filled were licensed to practice medicine only in Florida and yet wrote controlled substance prescriptions to residents of States where they were unlicensed and thus engaged in the unauthorized practice of medicine. More specifically, the evidence clearly establishes that Dr. Alsina wrote controlled substance prescriptions for residents of Virginia, Ohio, California, Alabama, and Georgia; that Dr. Fernandez wrote controlled substance prescriptions for residents of Texas, Ohio, and Georgia; that Dr. Romain wrote controlled substance prescriptions to residents of Virginia, California, and Ohio; that Dr. Llamido wrote controlled substance prescriptions for residents of California, Georgia, Texas; and that Dr. Moore wrote controlled substance
The record also establishes that while Dr. Francis was licensed to practice medicine only in Michigan, he wrote controlled substance prescriptions to residents of Alabama and other States. Finally, while Dr. Cheslow was licensed to practice medicine only in New York, he wrote controlled substance prescriptions in California, Texas, and Georgia as well as other States.
As found above, Respondent filled prescriptions written by each of the above doctors on a regular basis for a lengthy period of time, and in each case, Respondent received prescriptions (which it filled) which were written by a physician on a single day for persons located in numerous States in which the physicians were not licensed. As explained above, “[a] physician who engages in the unauthorized practice of medicine is not a `practitioner acting in the usual course of * * * professional practice.' ”
In its Exceptions, Respondent invokes an Agency rulemaking which clarified the registration requirements for practitioners to argue that prior to January 2, 2007 (when the regulation became effective), “a physician could prescribe in any state provided the physician held a [DEA] registration in a single state.” Exceptions at 4 (discussing DEA, Final Rule,
Beyond the fact that Respondent simply misstates the Agency's published interpretation of the authority conveyed by a DEA registration (and which had been published before much of the conduct at issue here had occurred), its argument conflates two separate issues: (1) The requirements for holding a DEA registration for a particular location, and (2) the licensure requirements for prescribing under state law. As the Agency explained in its Notice of Proposed Rulemaking, “[t]o be valid in a particular jurisdiction, a controlled substance prescription must be written by a practitioner
Contrary to Respondent's contention that there is no evidence that it aided the unlicensed practice of medicine, the evidence exists in the thousands of prescriptions it filled which indicated that the patients resided in one State and the prescribing physician practiced in another.
The controlled substance prescriptions Respondent filled were unlawful for a further reason. Under the CSA, it is fundamental that “a practitioner must establish a bona fide doctor-patient relationship in order to act `in the usual course of * * * professional practice' and to issue a prescription for a `legitimate medical purpose.' ”
Since January 2001, California has prohibited the prescribing or dispensing of a dangerous drug “on the Internet for delivery to any person in this state, without an appropriate prior examination and medical indication therefore, except as authorized by Section 2242.” Cal. Bus. & Prof. Code § 2242.1. In 2003, the Medical Board of California made clear that “[b]efore prescribing a dangerous drug, a physical examination must be performed” by the prescribing physician.
Moreover, well before Respondent commenced to dispense the prescriptions at issue here, the Medical Board of California had issued numerous Citation Orders to out-of-state physicians for prescribing over the Internet to California residents. These Orders invariably cited not only the physicians' failure to perform a “good faith prior examination,” but also their lack of a “valid California Physician and Surgeon's License to practice medicine in California.” Citation Order, Martin P. Feldman (August 15, 2003);
Doctors Cheslow, Romain, and Llamido all wrote a substantial number of controlled substance prescriptions based on internet consultations with
Similar to California, regulations adopted by the States of Ohio and Indiana require that a physician perform a physical examination of his/her patient prior to prescribing a controlled substance, except in limited circumstances not applicable here. Ind. Admin. Code § 5-4-1(a); Ohio Admin Code § 4731-11-09(A). Doctors Llamido and Moore issued a substantial number of prescriptions for controlled substances to individuals in Indiana; Doctors Alsina, Fernandez, Romain, and Moore issued a substantial number of controlled substance prescriptions to individuals in Ohio. These doctors violated Indiana and Ohio law respectively, as it is inconceivable that they went to Indiana or Ohio to perform physical examinations on the patients when they were not licensed to practice in those States (or that the patients travelled to see them) and were also issuing numerous prescriptions to the residents of multiple States on the same day. And as explained above, given the respective locations of the patients and the physicians, Respondent had reason to know that the prescriptions were issued outside of the usual course of professional practice and lacked a legitimate medical purpose. 21 CFR 1306.04(a). By dispensing the prescriptions, Respondent further violated the CSA.
Under Virginia law, a doctor must establish a bona fide practitioner-patient relationship prior to prescribing a controlled substance. Va. Code Ann. § 54.1-3303(A).
Doctors Alsina, Fernandez, Romain, and Moore, all of whom were licensed to practice only in Florida, issued controlled substance prescriptions to residents of Virginia. Here again, these physicians issued prescriptions to Virginia residents under circumstances which render it inconceivable that they met the requirements of Virginia for establishing a bona fide doctor-patient relationship prior to prescribing the controlled substances. These physicians thus violated Virginia law. Here again, given the respective locations of the physicians and the patients, Respondent (and its owners) had reason to know that these physicians did not establish bona fide doctor-patient relationships with the individuals to whom they prescribed controlled substances and that the prescriptions were issued outside of the usual course of professional practice and lacked a legitimate medical purpose as required by Federal law. 21 CFR 1306.04(a). By filling these prescriptions, Respondent again failed to comply with its “corresponding responsibility” under Federal law to dispense only lawful prescriptions.
Respondent simply ignores these various state medical practice standards. Instead, in its Exceptions, Respondent argues that Florida's telemedicine rule “does not require that the physician issuing the prescription have a face to face consultation with the patient or that the physician issuing the prescription conduct a physical examination, rather that their [sic] be a `documented patient evaluation.” Exceptions at 3 (quoting Fla. Admin. Code Ann. r. 64B8-9.003). However, even if it is the case that the State of Florida interprets its regulation as authorizing a physician to prescribe without having personally performed a physical examination of a patient, Florida has no authority to promulgate the standards of medical practice applicable in other States for prescribing a controlled substance to those States' residents. Thus, even if the prescriptions issued by the Florida-based physicians would have been lawful if they had been issued to residents of Florida, they were still illegal under the laws of California, Ohio, Indiana and Virginia.
Finally, Respondent cites to a recommended order of a state ALJ in a proceeding before the Florida Board of Pharmacy to argue “that it would be `problematic' to require a pharmacist to `independently determine the validity of the patient/physician relationship' because the standards used to determine the validity of such a relationship `differ from state to state.'” Exceptions at 3-4 (quoting
To the extent the Florida Board adopted the state ALJ's reasoning,
Finally, Respondent violated the laws of numerous States by engaging in the unauthorized practice of pharmacy.
The Agency has thus recognized that “the parameters of the hearing are determined by the prehearing statements.”
While the Order to Show Cause did not allege that Respondent had failed to obtain the necessary pharmacy licenses to dispense to States other than Florida, in its supplemental prehearing statement, the Government notified Respondent that it intended to litigate the issue by eliciting the testimony of its owner as to its “licensure status * * * in those jurisdictions where [it] shipped controlled substance prescriptions and whether [it] was licensed as an out-of-state pharmacy in any jurisdiction that required such licensure.” Gov. Supp. Prehearing Stmt. at 1. The Government also notified Respondent that it intended to litigate the issue of Respondent's communications with the New Hampshire Board of Pharmacy “regarding the licensure requirement to ship controlled substances into that state.”
Most other States also prohibit an out-of-state pharmacy from dispensing medication to state residents without being licensed to do so.
Finally, the evidence shows that Respondent violated DEA regulations by filling controlled substance prescriptions which were unlawful because they were not manually signed by the prescribing practitioner. Under 21 CFR 1306.05(a), “prescriptions shall be written with ink or indelible pencil and shall be manually signed by the practitioner.” Moreover, while “the prescribing practitioner is responsible in case the prescription does not conform in all essential respects to the law and regulations[,] [a] corresponding liability rests upon the pharmacist * * * who fills a prescription not prepared in the form prescribed by DEA regulations.”
As the forgoing demonstrates, Respondent's experience in dispensing controlled substances and its record of compliance with applicable controlled substance laws is marked by its (and its owner's) repeated and egregious violations in dispensing prescriptions that were unlawful under both the CSA and numerous state laws. I therefore hold that the Government has shown that Respondent has committed numerous acts which render issuing it a new registration “inconsistent with the public interest.”
Under Agency precedent, where, as here, “the Government has proved that a registrant has committed acts inconsistent with the public interest, a registrant must ` “present[] sufficient mitigating evidence to assure the Administrator that it can be entrusted with the responsibility carried by such a registration.” '”
As the ALJ observed, both of Respondent's owners invoked their Fifth Amendment privilege when called to testify by the Government and refused to answer any questions. ALJ at 24. I therefore find that Respondent (and its owners) have failed to accept responsibility for their misconduct. This alone provides reason to hold that Respondent has not rebutted the Government's
In its Exceptions, Respondent nonetheless contends that “even though the [Liddy's] invoked their Fifth Amendment Privilege, the record * * * demonstrate[s] that the complained of conduct was no longer present” and that it had ceased the offending conduct prior to the execution of the search warrant in July 2007. Exceptions at 1-2. Respondent thus asserts that it has changed its practices and that its then-existing registration should not be revoked.
While the record does not establish the precise subject matter that was discussed, it is not everyday that the DEA comes knocking at one's door, and it is reasonable to infer that the Investigator's visit had something to do with the illegality of Respondent's activities in dispensing the internet prescriptions. Accordingly, even were I to ignore the failure of Respondent's owners to acknowledge their illegal behavior (which I decline to do), the weight to be given Respondent's cessation of its unlawful practices is substantially diminished by the fact that this followed, rather than preceded, its owners becoming aware that they were under investigation. Moreover, as the ALJ noted, Respondent put on no evidence as to what steps it has undertaken to reform its practices. ALJ at 24.
I therefore concur with the ALJ's conclusion that Respondent's “extensive record of unlawful conduct * * *, its callous disregard for the serious responsibility of a DEA registrant, and its failure to present any evidence to show how it has corrected these practices outweigh” the fact that the State Pharmacy Board has taken no action against its license (factor one) and the absence of any criminal convictions (factor three).
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 CFR 0.100(b), I deny the Government's motion to terminate the proceeding as moot. I further order that the application of Liddy's Pharmacy, L.L.C., for a DEA Certificate of Registration be, and it hereby is, denied. This Order is effective September 8, 2011.
On October 28, 2010, Administrative Law Judge (ALJ) Timothy D. Wing, issued the attached recommended decision. The Respondent did not file exceptions to the decision.
Having reviewed the record in its entirety
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as 21 CFR 0.100(b) and 0.104, I order that DEA Certificate of Registration, BL1667596, issued to Sheryl Lavender, D.O., be, and it hereby is, revoked. I further order that any pending application of Sheryl Lavender, D.O., to renew or modify her registration, be, and it hereby is, denied. This Order is effective immediately.
Timothy D. Wing, Administrative Law Judge. On July 26, 2010, the Deputy Administrator, DEA, issued an Order to Show Cause and Immediate Suspension (OSC/IS) of DEA COR BL1667596, dated July 26, 2010, and served on Respondent on August 2, 2010. The OCS/IS alleged that Respondent's continued registration constitutes an imminent danger to the public health and safety. The OSC/IS also provided notice to Respondent of an opportunity to show cause as to why the DEA should not revoke Respondent's DEA COR BL1667596 pursuant to 21 U.S.C. 824(a)(4), on the grounds that Respondent lacks authority to handle controlled substances in Florida, the state in which she maintains her DEA registration, and on the grounds that Respondent's continued registration would be inconsistent with the public interest under 21 U.S.C. 823(f). On August 31, 2010, Respondent, acting
I issued an Order for Prehearing Statements on September 8, 2010. On the same date, OALJ sent Respondent a letter informing her of her right to representation under 21 CFR 1316.50.
On September 10, 2010, the Government filed a Motion for Summary Judgment. On September 13, 2010, I issued an order directing Respondent to reply to the Government's motion by September 20, 2010. On September 17, 2010, Respondent, through counsel, filed Respondent's Unopposed Motion for Extension of Time to Allow Respondent to Answer Motion for Summary Judgment, seeking an extension of time so that Respondent might obtain
On October 12, 2010, having secured permanent counsel,
On October 15, 2010, Respondent timely filed her response to the Government's Motion for Summary Judgment.
In support of its motion for summary judgment, the Government asserts that on May 7, 2010, the State of Florida, Department of Health, issued an Order of Emergency Suspension of Respondent's osteopathic medical license, and that Respondent consequently lacks authority to possess, dispense or otherwise handle controlled substances in Florida, the jurisdiction in which she maintains her DEA registration. The Government contends that such state authority is a necessary condition for maintaining a DEA COR and therefore asks that I summarily recommend to the Deputy Administrator that Respondent's COR be revoked. In support of its motion, the Government attaches three documents: (1) The Emergency Order of Suspension referred to above; (2) a copy of Respondent's request for a hearing, filed August 31, 2010, in which Respondent denies that the state suspension “should remain in full force and effect, thereby prohibiting Sheryl Lavender, D.O., from practicing medicine, and prescribing medications to patients” (Gov't Mot. Sum. J. at 2 ¶(3) (citing Resp't Req. Hg. at 1 ¶(B)(2))); and (3) a printout dated September 9, 2010, from a Web site maintained by the Florida Department of Health indicating that Respondent's suspension remained in effect as of that date.
Respondent opposes summary judgment and seeks the opportunity to “discuss the merits of this matter.” (Resp't Opp'n Gov't Mot. Sum. J. 2 ¶5.) In sum and in substance, Respondent argues that while “it is technically true Respondent lacks state authorization to practice medicine at this time, this shall soon be remedied and having the DEA registration withdrawn or otherwise revoked would unnecessarily elongate Dr. Lavender's return to medicine * * *.” (
At issue is whether Respondent may maintain her DEA COR given that Florida has suspended her state license to practice medicine.
Under 21 U.S.C. 824(a)(3), a practitioner's loss of state authority to engage in the practice of medicine and to handle controlled substances is grounds to revoke a practitioner's registration. Accordingly, this agency has consistently held that a person may not hold a DEA registration if she is without appropriate authority under the laws of the state in which she does business.
Summary judgment in a DEA suspension case is warranted even if the period of suspension of a Respondent's state medical license is temporary, or even if there is the potential for reinstatement of state authority because “revocation is also appropriate when a state license had been suspended, but with the possibility of future reinstatement.”
It is well-settled that when no question of fact is involved, or when the material facts are agreed upon, a plenary, adversarial administrative proceeding is not required, under the rationale that Congress does not intend administrative agencies to perform meaningless tasks.
In the instant case, the Government asserts, and Respondent concedes, that Respondent's Florida medical license is presently suspended. While Respondent disagrees that the state suspension of her Florida medical license “
I therefore find that there is no genuine dispute as to any material fact, and that substantial evidence shows that Respondent is presently without state authority to handle controlled substances in Florida. Because “DEA does not have statutory authority under the Controlled Substances Act to maintain a registration if the registrant is without state authority to handle controlled substances in the state in which he practices,”
I grant the Government's motion for summary judgment and recommend that Respondent's DEA COR BL1667596 be revoked and any pending applications denied.
On September 9, 2010, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Robert Leigh Kale, M.D. (Registrant), of Fort Smith, Arkansas.
The Show Cause Order alleged that as a result of action by the Arkansas State Medical Board, Registrant was “without authority to handle controlled substances in the State of Arkansas, the state in which [he is] registered with DEA,” and that therefore, his registration was subject to revocation.
On September 10, 2010, the Government initially attempted to serve the Show Cause Order on Registrant by certified mail to him at the address of his registered location. However, the mailing was returned and marked “Returned to Sender” and “Vacant.” GX E. The Government then attempted to serve the Show Cause Order by certified mail to him at his last known address in Oklahoma, where he also previously held a state license. GXs C & F. However, this package was returned as “unclaimed.” GX F.
On October 21, 2010, the Government then sent the Show Cause Order as an attachment to an e-mail which was sent to Respondent at an address that he had previously provided to DEA. GX G. In the accompanying e-mail, the Government wrote: “Upon receiving this, please confirm receipt via email.”
On January 7, 2011, the Government filed a Request for Final Agency Action and the Investigative Record with this Office. Req. for Final Agency Action, at 3. Therein, the Government requests that I find that Registrant has waived his right to a hearing because more than thirty days have now passed since the date of service of the Show Cause Order, and that neither Registrant, nor anyone purporting to represent him, has requested a hearing or submitted a written statement in lieu of a hearing.
Before proceeding to the merits, it is necessary to determine whether the means employed by the Government to serve the Show Cause Order on Registrant were constitutionally sufficient. The Supreme Court has long held “that due process requires the government to provide `notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’ ”
In
The
Thus, in
I conclude that the Government has satisfied its obligation under the Due Process Clause “to provide `notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’ ”
Several courts have held that the e-mailing of process can, depending on the facts and circumstances, satisfy due process, especially where service by conventional means is impracticable because a person secretes himself.
Having found that the service of the Show Cause Order was constitutionally adequate, I further find that Respondent has waived his right to a hearing or to submit a written statement in lieu of a hearing. I therefore issue this Decision and Final Order based on relevant evidence contained in the Investigative Record submitted by the Government. 21 CFR 1301.43(d) and (e). I make the following additional findings of fact.
Registrant is an anesthesiologist and the holder of DEA Certificate of Registration BK9514375, which authorizes him to dispense controlled substances in Schedules II through V as a practitioner, at the registered address of 2300 South 57th Street, Suite 11, Fort Smith, Arkansas 72903.
On April 7, 2009, the Arkansas State Medical Board (Arkansas Board) issued an Emergency Order of Suspension and Notice of Hearing charging Registrant with violations of the Arkansas Medical Practices Act, including that he violated a statute or rule governing the practice of medicine by a medical licensing authority or agency of another State.
Registrant subsequently allowed his Arkansas medical license to expire; his license remains in inactive status as of the date of this order. GX C. I therefore find that Registrant is currently without authority to dispense controlled substances under the laws of the State in which he is registered with DEA.
Under the Controlled Substances Act (CSA), a practitioner must be currently authorized to handle controlled substances in the “jurisdiction in which he practices” in order to maintain a DEA registration.
The CSA further authorizes the Agency to revoke a registration “upon a finding that the registrant * * * has had his State license or registration suspended [or] revoked * * * and is no longer authorized by State law to engage in the * * * distribution [or] dispensing of controlled substances.” 21 U.S.C. 824(a)(3). Moreover, DEA has consistently held that revocation of a registration is warranted whenever a practitioner's state authority to dispense controlled substances has been suspended or revoked, and has done so even when a practitioner's state authority has been summarily suspended and the State has yet to provide the practitioner with a hearing to challenge the State's action and at which he may ultimately prevail.
As found above, on April 7, 2010, the Arkansas State Medical Board suspended Registrant's state medical license. Moreover, his Arkansas license is now expired and in inactive status. Because Registrant is without authority to dispense controlled substances in Arkansas, the State in which he holds the DEA registration which is the subject of this proceeding, he is not entitled to maintain the registration.
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as 28 CFR 0.100(b) and 0.104, I order that DEA Certificate of Registration, BK9514375, issued to Robert Leigh Kale, M.D., be, and it hereby is, revoked. I further order that any pending application of Robert Leigh Kale, M.D., to renew or modify his registration, be, and it hereby is, denied. This Order is effective immediately.
Notice.
The Department of Labor (DOL) is submitting the Occupational Safety and Health Administration (OSHA) sponsored information collection request (ICR) titled, “Powered Industrial Trucks Standard,” to the Office of Management and Budget (OMB) for review and approval for continued use in accordance with the Paperwork Reduction Act (PRA) of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35).
Submit comments on or before September 8, 2011.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained from the
Submit comments about this request to the Office of Information and Regulatory Affairs,
Michel Smyth by telephone at 202-693-4129 (this is not a toll-free number) or by e-mail at
The Powered Industrial Trucks Standard contains several information collection requirements addressing truck design, construction, and modification, as well as certification of training and evaluation for truck operators.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• 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; and
• 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,
Bureau of International Labor Affairs, U.S. Department of Labor.
Notice of Open Meeting, August 25, 2011.
Pursuant to the Federal Advisory Committee Act (FACA), as amended, 5. U.S.C. App. 2, the Office of Trade and Labor Affairs (OTLA) gives notice of a meeting of the National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements (“Committee” or “NAC”), which was established by the Secretary of Labor.
The purpose of the meeting is to provide advice to the Secretary of Labor through the Bureau of International Labor Affairs (ILAB) concerning the implementation of the North American Agreement on Labor Cooperation (NAALC)—the labor side accord to the North American Free Trade Agreement (NAFTA)—and the labor provisions of free trade agreements.
The Committee will meet on Thursday, August 25, 2011 from 9 a.m. to 5 p.m.
The Committee will meet at the U.S. Department of Labor, 200 Constitution Avenue, NW., Secretary's Conference Room, Washington, DC 20210. Mail comments, views, or statements in response to this notice to Paula Church Albertson, Office of Trade and Labor Affairs, ILAB, U.S. Department of Labor, 200 Constitution Avenue, NW., Room S-5004, Washington, DC 20210; phone (202) 693-4789; fax (202) 693-4784.
Paula Church Albertson, Designated Federal Officer, Office of Trade and Labor Affairs, Bureau of International Labor Affairs, U.S. Department of Labor, 200 Constitution Avenue, NW., Room S-5004, Washington, DC 20210; phone (202) 693-4789 (this is not a toll free number). Individuals with disabilities wishing to attend the meeting should contact Ms. Albertson no later than August 18, 2011, to obtain appropriate accommodations.
NAC meetings are open to the public on a first-come, first-served basis, as seating is limited. Attendees must present valid identification and will be subject to security screening to access the Department of Labor for the meeting.
The United States Department of Labor's Iqbal Masih Award for the Elimination of Child Labor presented by Secretary Hilda Solis, United States Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210:
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Establish an annual non-monetary award recognizing the extraordinary efforts by an individual, company, organization or national government toward the reduction of the worst forms of child labor. The award shall be named, “the United States Department of Labor's Iqbal Masih Award for the Elimination of Child Labor.” Iqbal Masih was a Pakistani carpet weaver sold into slavery at age four. He escaped from his servitude at age 12 and became an outspoken advocate against child slavery. He told the world of his plight when he received the Reebok Human Rights Award in 1994. He was tragically killed a year later at the age of 13 in his native Pakistan.
In view of inspiring and motivating those who are working to eliminate the worst forms of child labor, the award's two major goals are to:
a. Honor and give public recognition to a recipient demonstrating extraordinary efforts to combat the worst forms of child labor internationally, and who shares qualities demonstrated by Iqbal Masih including leadership, courage, integrity, and a search to end the labor exploitation of children, and,
b. Raise awareness about the worst forms of child labor internationally.
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A. The nominees may include individuals, companies, organizations, or national governments and nominations may be submitted by other persons and entities with the knowledge and permission of the nominee.
B. Nominees for the United States Department of Labor's Iqbal Masih Award for the Elimination of Child Labor will be judged by the following selection criteria:
1. Implemented extraordinary efforts that contribute towards the reduction of the worst forms of child labor.
2. Generated positive international attention in support of efforts to reduce the worst forms of child labor.
3. Inspired others, including young persons, to become champions against the worst forms of child labor following the spirit and example of Iqbal Masih.
4. Fomented constructive change regarding the labor exploitation of children under great odds or at great personal cost.
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A. Nominations must identify the proposed candidate and include a justification statement.
B. The nomination packages should be limited to information relevant to the nominee. Nomination packages should be no longer than two (2) typed pages double-spaced. A page is 8.5 × 11 (on one side only) with one-inch margins (top, bottom, and sides).
C. Nomination packages must include the following for consideration:
1. An executive summary about the nominee, which clearly identifies the specific attributes of the nominee relevant to the selection criteria as listed in Section 5(B).
2. A data summary on the nominee. See Section 6(D).
D. A data summary on the nominee will include the following:
1. Name(s) of the individual, company, organization or national government being nominated.
2. Full street address, telephone number and e-mail address of nominee.
3. Name, title, street address, telephone number and e-mail address of the person or organization submitting the nomination.
E. Timing and Acceptable Methods of Submission of Nominations:
Nomination packages must be submitted to The United States Department of Labor's Iqbal Masih Award for the Elimination of Child Labor, Office of Child Labor, Forced Labor and Human Trafficking, Room S-5317, 200 Constitution Avenue, NW., Washington, DC 20210 by September 30, 2011. Any application received after 4:45 p.m. EDT on September 30, 2011 will not be considered unless it was received before the award is made and:
1. It was sent by registered or certified mail no later than September 15, 2011.
2. It is determined by the Government that the late receipt was due solely to mishandling by the Government after receipt at the U.S. Department of Labor at the address indicated; or
3. It was sent by U.S. Postal Service Express Mail Next Day Service—Post Office to Addressee, not later than 5 p.m. EDT at the place of mailing, September 29, 2011.
The only acceptable evidence to establish the date of mailing of a late application sent by registered or certified mail is the U.S. Postal Service postmark on the envelope or wrapper and on the original receipt from the U.S. Postal Service. If the postmark is not legible, an application received after the above closing time and date will be processed as if mailed late. “Postmark” means a printed, stamped, or otherwise placed impression (not a postage meter machine impression) that is readily identifiable without further action as having been applied and affixed by an employee of the U.S. Postal Service on the date of mailing. Therefore, applicants should request that the postal clerk place a legible hand cancellation “bull's-eye” postmark on both the receipt and the envelope or wrapper.
The only acceptable evidence to establish the time of receipt at the U.S. Department of Labor is the date/time stamp of the ILAB/OCFT on the application wrapper or other documentary evidence or receipt maintained by that office. Applications sent by other delivery services, such as Federal Express, UPS, e-mail (to
Confirmation of receipt of your application can be made by contacting Katie Cook, by e-mail
4. The U.S. Department of Labor will also consider nomination packages from previous years that were deemed responsive but not yet selected for award.
7.
A. ILAB/OCFT will perform a preliminary administrative review to determine the sufficiency of all submitted application packages relative to the selection criteria listed in Section 5(B).
B. ILAB/OCFT will conduct an initial substantive review of the nominations received and will identify a short list of candidates to be considered.
C. A panel of Department of Labor representatives will perform a secondary review to make a determination of the semi-finalists.
D. The Secretary of Labor will conduct the final review and selection.
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Paperwork Reduction Act Notice (Pub. L. 104-13): Persons are not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. This collection of information is approved under OMB Number 1290-0007 (Expiration Date: 12/31/2012). The obligation to respond to this information collection is voluntary; however, only nominations that follow the nomination procedures outlined in this notice will receive consideration. The average time to respond to this information of collection is estimated to be 10 hours per response; including the time for reviewing instructions, researching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Submit comments regarding this estimate; including suggestions for reducing response time or for improving any aspect of this collection of information to the Departmental Clearance Officer, U.S. Department of Labor, Office of the Chief Information Officer, Room N-1301, 200 Constitution Avenue, NW., Washington DC 20210 or e-mail to
We are very interested in your thoughts and suggestions about your experience in preparing and filing this nomination packet for the United States Department of Labor's Iqbal Masih Award for the Elimination of Child Labor. Your comments will be very useful to the ILAB/OCFT in making improvements in our solicitation for nominations for this award in subsequent years. All comments are strictly voluntary and strictly private. We would appreciate your taking a few minutes to tell us—for example, whether you thought the instructions were sufficiently clear; what you liked or disliked; what worked or didn't work; whether it satisfied your need for information or if it didn't, or anything else that you think is important for us to know. Your comments will be most helpful if you can be very specific in relating your experience.
Please send any comments you have to Katie Cook at
Pursuant to the authority contained in Section 512 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1142, the 157th open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held on August 30-September 1, 2011.
The three-day meeting will take place in C-5515 Room 1-A, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. The purpose of the open meeting is for Advisory Council members to hear testimony from invited witnesses and to receive an update from the Employee Benefits Security Administration (EBSA). The meeting will run from 9 a.m. to approximately 5 p.m. on August 30 and from 8:30 a.m. to approximately 5 p.m. on August 31 and September 1, with a one hour break for lunch each day. The EBSA update is scheduled for the afternoon of August 31, subject to change.
The Advisory Council will study the following issues: (1) Current Challenges and Best Practices for ERISA Compliance for 403(b) Plan Sponsors, (2) Hedge Funds and Private Equity Investments, and (3) Privacy and Security Issues Affecting Employee Benefit Plans (other than health care plans). The schedule for testimony and discussion of these issues generally will be one issue per day in the order noted above. Descriptions of these topics are available on the Advisory Council page of the EBSA Web site, at
Organizations or members of the public wishing to submit a written statement may do so by submitting 30 copies on or before August 19, 2011 to Larry Good, Executive Secretary, ERISA Advisory Council, U.S. Department of Labor, Suite N-5623, 200 Constitution Avenue, NW., Washington, DC 20210. Statements also may be submitted as e-mail attachments in text or pdf format transmitted to
Individuals or representatives of organizations wishing to address the
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Employment and Training Administration, Labor.
Notice.
Announcement regarding the Virgin Islands triggering “on” Tier Three of Emergency Unemployment Compensation 2008 (EUC08).
Public law 111-312 extended provisions in public law 111-92 which amended prior laws to create a Third and Fourth Tier of benefits within the EUC08 program for qualified unemployed workers claiming benefits in high unemployment states. The Department of Labor produces a trigger notice indicating which states qualify for EUC08 benefits within Tiers Three and Four and provides the beginning and ending dates of payable periods for each qualifying state. The trigger notice covering state eligibility for the EUC08 program can be found at:
Based on data published July 8, 2011, by the Bureau of Labor Statistics, the following trigger change has occurred for the Virgin Islands' EUC08 program:
• The estimated three month average, seasonally adjusted total unemployment rate for the Virgin Islands rose to meet or exceed the 6.0% threshold to trigger “on” in Tier Three of the EUC 2008 program. The payable period in Tier Three for the Virgin Islands began July 24, 2011, and claimants there will be eligible for up to an additional 13 weeks of benefits.
The duration of benefits payable in the EUC program, and the terms and conditions under which they are payable, are governed by public laws 110-252, 110-449, 111-5, 111-92, 111-118, 111-144, 111-157, 111-205 and 111-312, and the operating instructions issued to the states by the U.S. Department of Labor. Persons who believe they may be entitled to additional benefits under the EUC08 program, or who wish to inquire about their rights under the program, should contact their State Workforce Agency.
Scott Gibbons, U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance, 200 Constitution Avenue NW., Frances Perkins Bldg. Room S-4524, Washington, DC 20210, telephone number (202) 693-3008 (this is not a toll-free number) or by e-mail:
Legal Services Corporation.
Request for comments.
Since 1996, the Legal Services Corporation's annual appropriation has mandated that the Corporation distribute most of its appropriated funds to basic field programs for LSC-defined geographic areas so as to provide an equal figure per individual in poverty for each geographic area. The appropriation has further mandated that the number of individuals in poverty in each geographic area be determined by the Bureau of the Census “on the basis of the most recent decennial census.” The 2010 decennial census, however, did not collect poverty data for the 50 states, the District of Columbia or Puerto Rico, so “the most recent decennial census” will not provide a basis for determining how many people in poverty are within those jurisdictions. The LSC Board of Directors requests comments on a proposal by LSC's management to address this issue by making recommendations to the President and to Congress that: (1) The determination of the number of individuals in poverty in each geographic area be made by the Bureau of the Census, without any reference to the decennial census as the basis for that determination; (2) funding be reallocated among geographic areas every three years based on updated poverty population determinations by the Bureau of the Census; and (3) the first reallocation be phased in over two years, in Fiscal Year 2013 and Fiscal Year 2014.
Written comments will be accepted until September 8, 2011.
Written comments may be submitted by mail, fax or e-mail to Mark Freedman, Senior Assistant General Counsel, Legal Services Corporation, 3333 K St., NW., Washington, DC 20007; 202-295-1623 (phone); 202-337-6519 (fax);
Mark Freedman, Senior Assistant General Counsel, Legal Services Corporation, 3333 K St., NW., Washington, DC 20007; 202-295-1623 (phone); 202-337-6519 (fax);
The Legal Services Corporation (“LSC” or “Corporation”) was established by the United States Congress “for the purpose of providing financial support for legal assistance in noncriminal matters or proceedings to persons financially unable to afford such assistance.” 42 U.S.C. 2996b(a). LSC performs this function primarily through providing Federal funding to civil legal aid programs providing legal services to low-income persons throughout the United States and its possessions and territories in geographic areas determined by LSC. Since 1996, the Legal Services Corporation's annual appropriation has mandated that the Corporation distribute most of its appropriated funds to basic field programs for LSC-defined geographic areas so as to provide an equal figure per individual in poverty for each geographic area. The appropriation has further mandated that the number of individuals in poverty in each geographic area be determined by the Bureau of the Census “on the basis of the most recent decennial census.” (Certain exceptions apply for areas in which other adjusted population counts have been historically used.) Public Law 104-134, Title V, 501(a), 110 Stat. 1321, 1321-50 (1996) (incorporated by reference thereafter). Under that mandate, LSC has reallocated funding every ten years. The 2010 U.S. census,
LSC management has proposed to the LSC Board of Directors (“Board”) that LSC request an update to the statutory mandate in light of the elimination of poverty data from almost all of the 2010 census. LSC management has proposed that LSC make recommendations to the President and to Congress that: (1) The determination of the number of individuals in poverty in each geographic area be made by the Bureau of the Census, without any reference to the decennial census as the basis for that determination; (2) funding be reallocated among geographic areas every three years based on updated poverty population determinations by the Bureau of the Census; and (3) the first reallocation be phased in over two years, in Fiscal Year 2013 and Fiscal Year 2014.
LSC management presented this proposal to the Board's Operations and Regulations Committee (“Committee”) on July 20, 2011, which also received a presentation of recommendations from the National Legal Aid and Defender Association (“NLADA”). The Committee then presented management's proposal to the full board on July 21, 2011. The Board adopted the recommendation of management and the Committee that LSC publish management's proposal in the
LSC management's proposal “Management Recommendation on Funding Reallocation Issues” (July 13, 2011) and NLADA's recommendations can both be found at:
LSC invites public comment on this issue. Interested parties may submit comments to LSC within 30 days.
Executive Office of the President, Office of Management and Budget.
Request for written submissions from the public.
The Federal Government is currently undertaking a significant effort to eliminate counterfeit products from the U.S. Government supply chain. In June 2010, Vice President Biden and White House Intellectual Property Enforcement Coordinator, Victoria Espinel, announced the Joint Strategic Plan on Intellectual Property Enforcement, laying out a coordinated government-wide approach to strengthening intellectual property enforcement and directing the establishment of an inter-agency working group. Recent reports issued by the Department of Commerce and the Government Accountability Office have found that counterfeits have infiltrated many sectors of the U.S. Government supply chain and have the potential to cause serious disruptions in national defense, critical infrastructure and other vital applications. This working group will develop a framework for reducing vulnerability to counterfeits that is flexible enough to accommodate the wide variety of missions across Federal agencies. This cross-functional working group will identify any gaps in legal authority, regulation, policy and guidance that undermine the security of U.S. Government supply chain from counterfeit parts. The working group's examination will include reviewing current industry standards, the ability of prime contractors and their suppliers to authenticate or trace at-risk items to the original manufacturer, government evaluation and detection capabilities and limitations, and contractual enforcement of authenticity.
Submissions must be received on or before September 16, 2011 at 5 p.m.
Public comment should be electronically submitted to
Michael Lewis, Office of the Intellectual Property Enforcement Coordinator, at (202) 395-1808.
The core members of the Working Group are the Office of the Intellectual Property Enforcement Coordinator (IPEC) in the Office of Management and Budget (OMB) of the Executive Office of the President; Department of Defense (DoD); National Aeronautics and Space Administration (NASA); and the General Services Administration (GSA). These core members, along with other government components, have partnered to identify areas of common interest and compare progress and best practices to ultimately eliminate counterfeits in the government-wide supply chains. The working group will work to accomplish the following objectives:
• Objective #1—Develop procedures for program managers to identify items at risk for counterfeiting or requiring authentication of legitimacy. These procedures will, to the greatest extent practicable, utilize current industry standards.
• Objective #2—Examine whether additional administrative actions, including regulatory actions, are needed to require suppliers to take stronger anti-counterfeiting measures.
• Objective #3—Examine when and how product and package traceability, reporting and marking processes can be used by prime contractors, their suppliers, Federal government personnel and potentially other customers to confirm production authority by the original manufacturer of at-risk items.
• Objective #4—Examine government/industry evaluation capabilities and determine whether improvement is needed.
• Objective #5—Develop an anti-counterfeiting training and outreach strategy for the Federal workforce.
• Objective #6—Examine whether additional measures are needed to protect the rights and interests of the United States, recoup costs and prosecute offenders.
The purpose of the request for comments and recommendations is to solicit feedback and best practices from industry, academia, research laboratories, and other stakeholders on issues related to identifying areas of common interest and compare progress and best practices to ultimately eliminate counterfeits in Federal Government supply chains. This request for comments and for recommendations is divided into six categories. Responses to this request for comments may be directed to any or all of the six categories.
The U.S. Government Inter-Agency Anti-Counterfeiting Working group seeks written comment submissions on the following topics:
• Describe functional responsibilities, procedures and programs specifically designed to address prevention, identification and control of suspect/counterfeit items.
• Describe any procedures for the disposal of items identified as suspect/counterfeit items. Do these procedures include segregation, evaluation of safety/mission impact, extent of condition, removal, destruction or return to the vendor?
• Describe both internal and/or external notification procedures used when a suspect/counterfeit item is discovered. Identify suspect/counterfeit industry information exchanges to which you report counterfeit items.
• Describe any testing and inspection procedures used to authenticate a procured item.
• Describe any rules or procedures that can improve the use and functionality of the Government-Industry Data Exchange Program (GIDEP).
• Recommend best practices for identifying counterfeit products entering the U.S. Government supply chain and for curbing their entry into that supply chain.
• Describe methodologies for determining the functional criticality of parts and whether critical parts have unintentional or intentional vulnerabilities that may subject them to counterfeiting. For critical parts, describe the consequences of counterfeiting and the likelihood that counterfeiting will occur.
• As the likelihood of the counterfeiting of critical parts increases, describe ways to establish more stringent traceability requirements for direct suppliers and their subcontractors to assure and support evidence of part authenticity.
• Describe processes for the verification of direct suppliers' trustworthiness for consistent delivery of authentic and conforming parts that meet specifications.
• Describe procedures for tracking parts and materials received from suppliers to the original manufacturer, or other acceptable source, to authenticate that they meet the requirements of the customer's specifications.
• Describe procedures that you follow to ensure that counterfeit parts are not incorporated into products during the manufacturing processes, including the means of identifying suspect parts during receiving inspection and preventing their acceptance.
• Describe effective international and industry standards used in anti-counterfeiting risk management efforts.
• Describe contractual requirements used by customers to assure the authenticity of the products upon delivery. Describe the provisions of these requirements, if any. Describe any process or procedures used to flow authenticity requirements down to suppliers. Describe any conflicts between requirements from different customers.
• Are contract clauses that notify suppliers that they are prohibited from providing suspect/counterfeit items effective?
• Describe any special quality assurance provisions that may be contained in anti-counterfeiting contract clauses that require parties to confirm compliance.
• Describe effective methods for addressing counterfeit prevention during the source selection process.
• Describe any risk factors used in determining risk for counterfeit items/commodity groups.
• Describe procedures for processing potentially counterfeit items. Describe any requirements imposed on suppliers when potential counterfeit items are identified.
• Describe procedures that require the labeling, stamping or marking of authentic parts and/or part packaging prior to purchasing parts and material for installation in products.
• Describe the use of part markings to address the following:
(1) Identification of distributors and/or suppliers who have a documentation system, and receiving inspection system that ensures the traceability of their parts to a production or design authority-approved source, and
(2) Methods of screening part markings to identify unfamiliar distributors and/or suppliers to determine if the parts present a potential risk of being unapproved by a production or design authority.
• Describe procedures for establishing product and packaging identification and authenticity documentation requirements for at-risk items and applying these requirements to suppliers to ensure traceability of product authenticity throughout the supply chain.
• Describe how the use of enhanced product/package identification marking methods (such as marking products/packages with globally unique item identifiers (UIIs) using international standards, and then registering these UIIs and their product/package pedigree information in a database to enable tracking them back to their originating source as they transit the supply chain) might help reduce or eliminate counterfeits in the supply chain. Does the use of these identification marking methods impose a substantial burden on manufacturers/suppliers? Identify the types of incentives that would encourage manufacturers/suppliers to consistently use identification markings.
• Describe how the use of advanced technology for ensuring the integrity of products delivered in the supply chain (including such techniques as digital signatures, hologram tags, tamper-resistant and tamper-evident packaging) might help reduce or eliminate counterfeits in the supply chain.
• Describe any techniques that may be employed when product authentication cannot be confirmed by use of product and packaging identification and authenticity documentation requirements.
• List physical inspection, non-destructive examination, and laboratory testing equipment that your organization owns and operates and that is capable of authenticating a suspected counterfeit part.
• Describe specific products that can be inspected/tested using this equipment and how the inspection/testing technique(s) can be used to distinguish counterfeit product from authentic product.
• List any laboratory/testing certifications or accreditations that your facility(ies) maintains.
• List any governmental or industry customers that employ your testing facilities.
• Describe handling and storage techniques that your facility employs to prevent comingling, tampering and unauthorized release of suspect counterfeit items.
• How much capacity would your facility be able to manage—how many parts per day can you handle? Can your test facility handle classified information?
• Does your organization provide anti-counterfeit training for employees? Identify the type of training that is available. List the types of employees who receive anti-counterfeit training (
○ Did you model your training after another industry standard or company, or outsource the training? If so, please describe.
○ How frequently do you provide anti-counterfeiting training to your employees?
○ How do you educate/train your new hires?
○ What is the venue and medium for this training? (
○ How long are the training sessions?
• How do you track and benchmark the effectiveness of your training in anti-counterfeiting?
• What training resources do you provide to suppliers or customers on anti-counterfeit tactics and strategies for your industry or products?
• Do you formally test recipients on the contents of the training and/or provide formal qualifications/certifications upon completion of the training?
• Describe the scope and contents of your anti-counterfeiting training.
To submit comments via
The
Nuclear Regulatory Commission.
Notice of the OMB review of information collection and solicitation of public comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted to OMB for review the following proposal for the collection of information under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The NRC published a
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The public may examine and have copied for a fee publicly available documents, including the final supporting statement, at the NRC's Public Document Room, Room O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852. OMB clearance requests are available at the NRC
Comments and questions should be directed to the OMB reviewer listed below by September 8, 2011. Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given to comments received after this date.
Comments can also be e-mailed to
The NRC Clearance Officer is Tremaine Donnell, 301-415-6258.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission (NRC).
Notice of pending NRC action to submit an information collection request to the Office of Management and Budget (OMB) and solicitation of public comment.
The U.S. Nuclear Regulatory Commission invites public comment about our intention to request the OMB's approval for renewal of an existing information collection that is summarized below. We are required to publish this notice in the
Information pertaining to the requirement to be submitted:
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Submit, by October 11, 2011, comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the burden estimate accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection be minimized, including the use of automated collection techniques or other forms of information technology?
The public may examine and have copied for a fee publicly available documents, including the draft supporting statement, at the NRC's Public Document Room, Room O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852. OMB clearance requests are available at the NRC Web site:
Questions about the information collection requirements may be directed to the NRC Clearance Officer, Tremaine Donnell (T-5 F53), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, by telephone at 301-415-6258, or by e-mail to
For the Nuclear Regulatory Commission.
Pursuant to Section 189a. (2) of the Atomic Energy Act of 1954, as amended (the Act), the U.S. Nuclear Regulatory Commission (the Commission or NRC) is publishing this regular biweekly notice. The Act requires the Commission publish notice of any amendments issued, or proposed to be issued and grants the Commission the authority to issue and make immediately effective any amendment to an operating license upon a determination by the Commission that such amendment involves no significant hazards consideration, notwithstanding the pendency before the Commission of a request for a hearing from any person.
This biweekly notice includes all notices of amendments issued, or proposed to be issued from July 14, 2011, to July 27, 2011. The last biweekly notice was published on July 26, 2011 (76 FR 44614).
Please include Docket ID NRC-2011-0175 in the subject line of your comments. Comments submitted in writing or in electronic form will be posted on the NRC Web site and on the Federal rulemaking Web site
The NRC requests that any party soliciting or aggregating comments received from other persons for submission to the NRC inform those persons that the NRC will not edit their comments to remove any identifying or contact information, and therefore, they should not include any information in their comments that they do not want publicly disclosed.
You may submit comments by any one of the following methods:
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You can access publicly available documents related to this notice using the following methods:
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The Commission has made a proposed determination that the following amendment requests involve no significant hazards consideration. Under the Commission's regulations in Title 10 of the Code of Federal Regulations (10 CFR), Section 50.92, this means that operation of the facility in accordance with the proposed amendment would not (1) involve a significant increase in the probability or consequences of an accident previously evaluated; or (2) create the possibility of a new or different kind of accident from any accident previously evaluated; or (3) involve a significant reduction in a margin of safety. The basis for this proposed determination for each amendment request is shown below.
The Commission is seeking public comments on this proposed determination. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination.
Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day period provided that its final determination is that the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period should circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example in derating or shutdown of the facility. Should the Commission take action prior to the expiration of either the comment period or the notice period, it will publish in the
Within 60 days after the date of publication of this notice, any person(s) whose interest may be affected by this action may file a request for a hearing and a petition to intervene with respect to issuance of the amendment to the subject facility operating license. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's ”Rules of Practice for Domestic Licensing Proceedings” in 10 CFR part 2. Interested person(s) should consult a current copy of 10 CFR 2.309, which is available at the NRC's PDR, located at One White Flint North, Room O1-F21, 11555 Rockville Pike (first floor), Rockville, Maryland 20852. NRC regulations are accessible electronically from the NRC Library on the NRC Web site at
As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements: (1) The name, address, and telephone number of the requestor or petitioner; (2) the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding; (3) the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and (4) the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also identify the specific contentions which the requestor/petitioner seeks to have litigated at the proceeding.
Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the requestor/petitioner shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the requestor/petitioner intends to rely in proving the contention at the hearing. The requestor/petitioner must also provide references to those specific sources and documents of which the petitioner is aware and on which the requestor/petitioner intends to rely to establish those facts or expert opinion. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the requestor/petitioner to relief. A requestor/petitioner who fails to satisfy these requirements with respect to at least one
Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing.
If a hearing is requested, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, then any hearing held would take place before the issuance of any amendment.
All documents filed in NRC adjudicatory proceedings, including a request for hearing, a petition for leave to intervene, any motion or other document filed in the proceeding prior to the submission of a request for hearing or petition to intervene, and documents filed by interested governmental entities participating under 10 CFR 2.315(c), must be filed in accordance with the NRC E-Filing rule (72 FR 49139, August 28, 2007). The E-Filing process requires participants to submit and serve all adjudicatory documents over the Internet, or in some cases to mail copies on electronic storage media. Participants may not submit paper copies of their filings unless they seek an exemption in accordance with the procedures described below.
To comply with the procedural requirements of E-Filing, at least 10 days prior to the filing deadline, the participant should contact the Office of the Secretary by e-mail at
Information about applying for a digital ID certificate is available on the NRC's public Web site at
If a participant is electronically submitting a document to the NRC in accordance with the E-Filing rule, the participant must file the document using the NRC's online, Web-based submission form. In order to serve documents through the Electronic Information Exchange System, users will be required to install a Web browser plug-in from the NRC Web site. Further information on the Web-based submission form, including the installation of the Web browser plug-in, is available on the NRC's public Web site at
Once a participant has obtained a digital ID certificate and a docket has been created, the participant can then submit a request for hearing or petition for leave to intervene. Submissions should be in Portable Document Format (PDF) in accordance with NRC guidance available on the NRC public Web site at
A person filing electronically using the agency's adjudicatory E-Filing system may seek assistance by contacting the NRC Meta System Help Desk through the “Contact Us” link located on the NRC Web site at
Participants who believe that they have a good cause for not submitting documents electronically must file an exemption request, in accordance with 10 CFR 2.302(g), with their initial paper filing requesting authorization to continue to submit documents in paper format. Such filings must be submitted by: (1) First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or (2) courier, express mail, or expedited delivery service to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. A presiding officer, having granted an exemption request from using E-Filing, may require a participant or party to use E-Filing if the presiding officer subsequently determines that the reason for granting the exemption from use of E-Filing no longer exists.
Documents submitted in adjudicatory proceedings will appear in NRC's electronic hearing docket which is available to the public at
Petitions for leave to intervene must be filed no later than 60 days from the date of publication of this notice. Non-timely filings will not be entertained absent a determination by the presiding officer that the petition or request should be granted or the contentions should be admitted, based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i)-(viii).
For further details with respect to this license amendment application, see the application for amendment which is available for public inspection at the NRC's PDR, located at One White Flint North, Room O1-F21, 11555 Rockville Pike (first floor), Rockville, Maryland 20852. Publicly available documents created or received at the NRC are accessible electronically through ADAMS in the NRC Library at
1. Does the proposed amendment involve a significant increase in the probability or consequences of an accident previously evaluated?
The proposed changes [ ] modify the time allowed for the plant to operate when the only operable RCS leakage detection instrumentation monitors are the containment atmosphere gaseous radioactivity monitoring system and the primary containment pressure and temperature monitoring system. The monitoring of RCS leakage is not a precursor to any accident previously evaluated. The monitoring of RCS leakage is not a direct method used to mitigate the consequences of any accident previously evaluated. [The RCS leakage detection instruments are used to detect a degradation of the RCS pressure boundary and are used to determine the need to initiate mitigative actions.] Therefore, the proposed amendment does not involve a significant increase in the probability or consequences of an accident previously evaluated.
The proposed changes also renumber [certain] current TS Actions to accommodate the new TS Action. This change is administrative in nature and does not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated?
The proposed changes [ ] modify the time allowed for the plant to operate when the only operable RCS leakage detection instrumentation monitor monitors are the containment atmosphere gaseous radioactivity monitoring system and the primary containment pressure and temperature monitoring system. The proposed changes do not involve a physical alteration of the plant (no new or different type of equipment will be installed) or a change in the methods governing normal plant operation.
Therefore, the proposed amendment does not create the possibility of a new or different kind of accident from any accident previously evaluated. The proposed changes also renumber [certain] current TS Actions to accommodate the new TS Action. This change is administrative in nature and does not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. Does the proposed change involve a significant reduction in a margin of safety?
The proposed changes [ ] increase the time allowed for the drywell floor drain sump flow monitoring system and the drywell unit coolers condensate flow rate monitoring system to be inoperable concurrently from 12 hours to 7 days. Increasing the amount of time the plant is allowed to operate with these two leakage detection monitors inoperable does not significantly decrease the margin of safety due to the addition of compensatory actions to analyze grab samples of the primary containment atmosphere once per 12 hours and monitor RCS leakage by administrative means once per 12 hours. The overall likelihood that an increase in RCS leakage will be detected before it potentially results in gross failure is maintained with the addition of the actions. Therefore, the proposed amendment does not involve a significant reduction in a margin of safety.
The proposed changes also renumber [certain] current TS Actions to accommodate the new TS Action. This change is administrative in nature and does not involve a significant reduction in a margin of safety. Therefore, the proposed change does not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review, including the edits in brackets above, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration.
1. Does the proposed amendment involve a significant increase in the probability or
The proposed Technical Specifications changes do not affect any plant systems, structures, or components designed for the prevention or mitigation of previously evaluated accidents. The amendment would only change how the reactivity anomaly surveillance is performed. Verifying that the core reactivity is consistent with predicted values ensures that accident and transient safety analyses remain valid. This amendment changes the Technical Specification requirements such that, rather than performing the surveillance by comparing predicted to actual control rod density, the surveillance is performed by a direct comparison of [effective multiplication factor] k
Therefore, since the reactivity anomaly surveillance will continue to be performed by a viable method, the proposed amendment does not involve a significant increase in the probability or consequence of a previously evaluated accident.
2. Does the proposed amendment create the possibility of a new or different kind of accident from any accident previously evaluated?
This Technical Specifications amendment request does not involve any changes to the operation [ ] or maintenance of any safety-related, or otherwise important to safety systems. All systems important to safety will continue to be operated and maintained within their design bases. The proposed changes to the reactivity anomaly Technical Specifications will only provide a new, more efficient method of detecting an unexpected change in core reactivity.
Since all systems continue to be operated within their design bases, no new failure modes are introduced and the possibility of a new or different kind of accident is not created.
3. Does the proposed amendment involve a significant reduction in a margin of safety?
This proposed Technical Specifications amendment proposes to change the method for performing the reactivity anomaly surveillance from a comparison of predicted to actual control rod density to a comparison of predicted to actual k
Therefore, the proposed amendment does not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration.
1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated?
The proposed change does not involve physical changes to any plant structure, system, or component. As a result, no new failure modes of the Reactor Coolant System (RCS) leakage detection systems are being introduced. Additionally, the RCS leakage detection systems have no impact on any initiating event frequency.
The consequences of a previously analyzed accident are dependent on the initial conditions assumed for the analysis, the behavior of the fuel during the analyzed accident, the availability and successful functioning of the equipment assumed to operate in response to the analyzed event, and the setpoints at which these actions are initiated. The RCS leakage detection systems do not perform an accident mitigating function. Emergency Core Cooling System, Reactor Protection System, and primary and secondary containment isolation actuations are not affected by the proposed change. The proposed change has no impact on any setpoints or functions related to these actuations. There are no changes in the types or significant increase in the amounts of any effluents released offsite.
Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated?
The proposed change allows use of the drywell equipment drain system as an alternative method of quantifying unidentified leakage in the drywell. The drywell equipment drain system will continue to be used for leakage collection and quantification. There is no alteration to the parameters within which the plant is normally operated or in the setpoints that initiate protective or mitigative actions. As a result, no new failure modes are being introduced.
Therefore, the proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. Does the proposed change involve a significant reduction in a margin of safety?
The current TS require a periodic measurement of RCS leakage. The proposed change maintains the existing level of safety by allowing use of the drywell equipment drain sump system to quantify unidentified leakage in the drywell. No changes are being made to any of the RCS leakage limits specified in the TS. The impact of the change is that measured unidentified and identified leakage within the drywell will be quantified as equivalent values since the drywell equipment drain sump monitoring system will also be used to measure leakage into the drywell floor drain sump. In addition, the alternative method conservatively assumes that all leakage in the drywell is unidentified leakage.
Therefore, the proposed change does not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration.
1. The proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated.
The proposed change does not impact the physical function of plant structures, systems, or components (SSCs) or the manner in which SSCs perform their design function. The proposed change neither adversely affects accident initiators or precursors, nor alters design assumptions. The proposed change does not alter or prevent the ability of operable SSCs to perform their design function to mitigate the consequences of an initiating event within assumed acceptance limits. The [reactor coolant system (RCS)] leakage detection instruments are not used in [the] mitigation of any accidents. [The RCS leakage detection instruments are used to detect a degradation of the RCS pressure boundary and are used to determine the need to initiate mitigative actions].
Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. The proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated.
The proposed change will not impact the accident analysis. The change does not involve a physical alteration of the plant (
Therefore, the proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. The proposed changes do not involve a significant reduction in the margin of safety.
Margin of safety is associated with confidence in the ability of the fission product barriers (
Therefore, these proposed changes do not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves NSHC.
During the period since publication of the last biweekly notice, the Commission has issued the following amendments. The Commission has determined for each of these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR Chapter I, which are set forth in the license amendment.
Notice of Consideration of Issuance of Amendment to Facility Operating License, Proposed No Significant Hazards Consideration Determination, and Opportunity for A Hearing in connection with these actions was published in the
Unless otherwise indicated, the Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments. If the Commission has prepared an environmental assessment under the special circumstances provision in 10 CFR 51.22(b) and has made a determination based on that assessment, it is so indicated.
For further details with respect to the action see (1) the applications for amendment, (2) the amendment, and (3) the Commission's related letter, Safety Evaluation and/or Environmental Assessment as indicated. All of these items are available for public inspection at the NRC's Public Document Room (PDR), located at One White Flint North, Room O1-F21, 11555 Rockville Pike (first floor), Rockville, Maryland 20852. Publicly available documents created or received at the NRC are accessible electronically through the Agencywide Documents Access and Management System (ADAMS) in the NRC Library at
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 26, 2011.
The supplement dated November 15, 2010, provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the staff's original proposed no significant hazards consideration determination.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 21, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 27, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 26, 2011.
The supplements dated February 15, and April 4, 2011, provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the NRC staff's original proposed no significant hazards consideration determination as published in the
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 22, 2011.
The supplements dated February 15 and April 4, 2011, provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the NRC staff's original proposed no significant hazards consideration determination as published in the
The Commission's related evaluation of this amendment is contained in a Safety Evaluation dated July 20, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 27, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 27, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 20, 2011.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 21, 2011.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 26, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 27, 2011.
The supplements contained clarifying information and did not change the NRC staff's initial proposed finding of no significant hazards consideration.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 21, 2011.
The Commission's related evaluation of the amendment is contained in a safety evaluation dated July 27, 2011.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 15, 2011.
The supplement dated April 4, 2011, provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the NRC staff's original proposed no significant hazards consideration determination as published in the
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 21, 2011.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 18, 2011.
The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated July 26, 2011.
The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated July 27, 2011.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Weeks of August 8, 15, 22, 29, September 5, 12, 2011.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and Closed.
There are no meetings scheduled for the week of August 8, 2011.
There are no meetings scheduled for the week of August 15, 2011.
There are no meetings scheduled for the week of August 22, 2011.
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of September 5, 2011.
There are no meetings scheduled for the week of September 12, 2011.
*The schedule for Commission meetings is subject to change on short notice. To verify the status of meetings, call (recording)—(301) 415-1292. Contact person for more information: Rochelle Bavol, (301) 415-1651.
The NRC Commission Meeting Schedule can be found on the Internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (e.g. braille, large print), please notify Bill Dosch, Chief, Work Life and Benefits Branch, at 301-415-6200, TDD: 301-415-2100, or by e-mail at
This notice is distributed electronically to subscribers. If you no longer wish to receive it, or would like to be added to the distribution, please contact the Office of the Secretary, Washington, DC 20555 (301-415-1969), or send an e-mail to
Nuclear Regulatory Commission.
Solicitation of comments on proposed revisions.
The U.S. Nuclear Regulatory Commission (NRC) is soliciting written comments from interested parties, including public interest groups, States, members of the public, and the regulated industry (
Submit comments on or before September 8, 2011. Comments received after this date will be considered if it is practical to do so, but the Commission is able to assure consideration only for comments received on or before the specified date.
Please include Docket ID NRC-2011-0176 in the subject line of your comments. Comments submitted in writing or in electronic form will be posted on the NRC Web site and on the Federal rulemaking Web site,
The NRC requests that any party soliciting or aggregating comments received from other persons for submission to the NRC inform those persons that the NRC will not edit their comments to remove any identifying or contact information, and therefore, they should not include any information in their comments that they do not want publicly disclosed. You may submit comments by any one of the following methods:
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You can access publicly available documents related to this document using the following methods:
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Carolyn Faría, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-4050, e-mail to
The Commission, in SRM-SECY-09-0190, dated August 27, 2010 (ADAMS accession number ML102390327), approved a major revision to its Enforcement Policy. The NRC published a notice (75 FR 60485) announcing an effective date of September 30, 2010, for that revision to the Policy. The Commission, in SRM-SECY-09-0190, also directed the NRC staff (the staff) to reevaluate the portions of the Enforcement Policy associated with construction activities (
As new last paragraphs in the section, add the following:
The foregoing language was developed by staff to clarify the identity of responsible entities within the context of the Policy. However, the staff does not intend with this proposed language to change or alter any enforcement practice as currently implemented. The staff will ensure that the final policy revision reflects the scope of the term “licensee” in the glossary.
In the first sentence of Section 2.2.1.a, revise the sentence to read: “ * * *, onsite or offsite radiation exposures,
Add a new section, as follows:
The revision to Section 2.2.1.a is to ensure consistency with the staff's current process to disposition violations related to chemical hazards exposures. The staff believes that the addition of Section 2.2.6 is necessary to broadly address when and how the assessment of violations during construction occur. The staff is currently developing the CdC PAR process, an elective precursor to the license amendment review, established via license condition. Comments on the CdC PAR process will be solicited under a separate FRN and will not be addressed under this FRN.
Add a second paragraph to the introduction of the section:
The staff developed this paragraph to recognize that although certain rules (
Section 2.3.2 provides the Policy on use of non-cited violations as a method of dispositioning Severity Level IV violations. The staff proposes to revise this section as follows:
If certain criteria (described below) are met, Severity Level IV (SL IV) violations and violations associated with green ROP findings (
1. The licensee must place the violation into a corrective action program to
2. (Unchanged)
3. The violation must either not be repetitive as a result of inadequate corrective action, or, if repetitive, the violation must not be NRC identified. This criterion does not apply to violations associated with green ROP findings.
4. (Unchanged)
Of note regarding this topic, on June 3, 2011, the NRC issued EGM-11-002, “Enforcement Discretion for Licensee-Identified Violations at Power Reactor Construction Sites Pursuant to Title 10 of the
SRM-09-0190, Item 1.f requires staff to “propose revisions to provide fuel cycle licensees with credit for effective corrective actions programs”. The staff acknowledges that further work being done to address Item 1.f of SRM-09-0190 has the potential to generate additional changes to this section of the Policy. The staff will ensure that the final policy revision is coordinated to reflect both initiatives.
Add a footnote to the section title that states:
The staff considered development of an NOED process for use (1) After a COL is issued but prior to the 10 CFR 52.103(g) finding (after which point, the licensee's Technical Specifications are in effect), (2) after the issuance of a construction permit pursuant to 10 CFR 50.50 but prior to the 10 CFR 50.57 operations finding, and (3) after the issuance of an LWA but prior to the issuance of a COL. The Enforcement Policy states, in part, that:
The NRC may choose not to enforce the applicable technical specification (TS) limiting condition for operation (LCO) or other license conditions, in circumstances where compliance would involve an unnecessary plant transient or the performance of a test, inspection, or system realignment that may not be the most prudent action to take under the specific plant conditions, or unnecessary delays in plant startup, without a corresponding health and safety benefit * * *.
The NRC will issue a notice of enforcement discretion (NOED) only if the staff is clearly satisfied that the action is consistent with protecting the public health and safety or security. The NRC staff may also grant enforcement discretion in cases involving severe weather or other natural phenomena, based upon balancing the public health and safety or common defense and security of not operating against the potential radiological or other hazards associated with continued operation, and a determination that safety will not be impacted unacceptably by exercising this discretion * * *
Consequently, the NOED policy in its current form is predicated upon the expectation that public health and safety will be
Moreover, the NOED process, as applied to operating reactors, involves, in essence, a preemptive request by a licensee and an associated preemptive determination by the NRC to permit the licensee to exceed technical specifications limiting conditions for operations. However, technical specifications limiting conditions for operation are not applicable to new reactors under construction until issuance of the operating license under 10 CFR part 50 or the 10 CFR 52.103(g) Commission determination under 10 CFR part 52, “Licenses, Certifications, and Approvals for Nuclear Power Plants.” As such, under the current NOED policy paradigm, the staff does not believe it appropriate to use the NOED process for any of the situations under consideration.
With that said, the staff could consider a new paradigm for the granting of NOEDs to COL holders during construction, one premised upon a finding that no adverse impact, or risk increase, to public health and safety, security, or the environment would occur over the period of time enforcement discretion was applied.
However, the staff believes the CdC process, described in more detail in Item 3.B, will provide an appropriate licensing-based change process that will address the vast majority of issues identified during construction, by allowing licensees to effect changes in parallel with staff's review of the acceptability of the change.
In addition, the staff considered the development of a NOED-like process during construction under a Limited Work Authorization (LWA). However, given the limited use of LWAs and their narrow scope, the staff believes that development of an NOED process at this time would require expenditure of resources that would not be commensurate with the benefit.
Add a new Section 3.9 that states the following:
•
•
•
The staff is currently developing the CdC PAR process including the development of interim staff guidance and the endorsement of industry guidance. The purpose of the CdC PAR process is, as an elective precursor to the license amendment review established by a condition of license, to determine if the NRC has any objection to the licensee proceeding with construction activities different from the licensing basis while the NRC is evaluating the related license amendment request. The NRC will not issue violations for licensee-planned changes properly entered into the CdC PAR process. Comments on CdC are being solicited under a separate FRN and will not be addressed under this FRN.
This policy statement does not contain new or amended information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.
In accordance with the Congressional Review Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs.
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
This document informs the public that an appeal of the closing of the Hoxie, Iowa post office has been filed. It identifies preliminary steps and provides a procedural schedule. Publication of this document will allow the Postal Service, petitioners, and others to take appropriate action.
Submit comments electronically by accessing the “Filing Online” link in the banner at the top of the Commission's Web site (
Stephen L. Sharfman, General Counsel, at 202-789-6820 (case-related information) or
Notice is hereby given that, pursuant to 39 U.S.C. 404(d), on July 29, 2011, the Commission received a petition for review of the Postal Service's determination to close the post office in Hoxie, Arkansas. The petition was filed by Lanny Tinker, Mayor of the city of Hoxie (Petitioner) and is postmarked July 22, 2011. The Commission hereby institutes a proceeding under 39 U.S.C. 404(d)(5) and establishes Docket No. A2011-36 to consider Petitioner's appeal. If Petitioner would like to further explain his position with supplemental information or facts, Petitioner may either file a Participant Statement on PRC Form 61 or file a brief with the Commission no later than September 2, 2011.
After the Postal Service files the administrative record and the Commission reviews it, the Commission may find that there are more legal issues than those set forth above, or that the Postal Service's determination disposes of one or more of those issues. The deadline for the Postal Service to file the applicable administrative record with the Commission is August 15, 2011.
The appeal and all related documents are also available for public inspection in the Commission's docket section. Docket section hours are 8 a.m. to 4:30 p.m., Monday through Friday, except on Federal government holidays. Docket section personnel may be contacted via electronic mail at
The Commission reserves the right to redact personal information which may infringe on an individual's privacy rights from documents filed in this proceeding.
(1) The Postal Service shall file the applicable administrative record regarding this appeal no later than August 15, 2011.
(2) Any responsive pleading by the Postal Service to this notice is due no later than August 15, 2011.
(3) The procedural schedule listed below is hereby adopted.
(4) Pursuant to 39 U.S.C. 505, Cassandra L. Hicks is designated officer of the Commission (Public Representative) to represent the interests of the general public.
(5) The Secretary shall arrange for publication of this notice and order in the
By the Commission.
Postal Regulatory Commission.
Notice.
This document informs the public that an appeal of the closing of the Thayer, Iowa post office has been filed. It identifies preliminary steps and provides a procedural schedule. Publication of this document will allow the Postal Service, petitioners, and others to take appropriate action.
Submit comments electronically by accessing the “Filing Online” link in the banner at the top of the Commission's Web site (
Stephen L. Sharfman, General Counsel, at 202-789-6820 (case-related information) or
Notice is hereby given that, pursuant to 39 U.S.C. 404(d), on July 29, 2011, the Commission received a petition for review of the Postal Service's determination to close the post office in Thayer, Iowa. The petition was filed by Mike Tonelli (Petitioner) and is postmarked July 20, 2011. The Commission hereby institutes a proceeding under 39 U.S.C. 404(d)(5) and establishes Docket No. A2011-37 to consider Petitioner's appeal. If Petitioner would like to further explain his position with supplemental information or facts, Petitioner may either file a Participant Statement on PRC Form 61 or file a brief with the Commission no later than September 2, 2011.
After the Postal Service files the administrative record and the Commission reviews it, the Commission may find that there are more legal issues than the one set forth above, or that the Postal Service's determination disposes of one or more of those issues. The deadline for the Postal Service to file the applicable administrative record with the Commission is August 15, 2011.
The appeal and all related documents are also available for public inspection in the Commission's docket section. Docket section hours are 8 a.m. to 4:30 p.m., Monday through Friday, except on Federal government holidays. Docket section personnel may be contacted via electronic mail at
The Commission reserves the right to redact personal information which may infringe on an individual's privacy rights from documents filed in this proceeding.
1. The Postal Service shall file the applicable administrative record regarding this appeal no later than August 15, 2011.
2. Any responsive pleading by the Postal Service to this Notice is due no later than August 15, 2011.
3. The procedural schedule listed below is hereby adopted.
4. Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is designated officer of the Commission (Public Representative) to represent the interests of the general public.
5. The Secretary shall arrange for publication of this notice and order in the
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
NASDAQ is filing with the Commission a proposal to introduce a bulk-quoting interface for NASDAQ market makers that will help them meet their obligations as market makers and to provide liquidity to the market in an efficient manner.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
NASDAQ currently offers an order-based market making interface on its options trading platform (“NOM”). Market makers use this interface to provide a two-sided quotation on NOM. Since it is an order-based interface, a two-sided quotation requires the entry of both a buy and a sell order.
As part of several technological enhancements NASDAQ plans to implement on NOM, NASDAQ proposes to introduce a bulk-quoting interface for market makers in order to offer an additional market making interface choice to NASDAQ market makers. The proposed bulk-quoting market making interface will be used by market makers to submit and update their quotations in the marketplace much like the current order-based interface is used today. The bulk-quoting interface, however, allows market makers to provide both a bid and an offer in one message. In addition, the bulk-quoting interface allows market makers to bundle several quote updates into one bulk message. This is a useful feature for market makers that provide quotations in many different options. Furthermore, the bulk-quoting market making interface includes certain data elements (described below) which
The data to be offered over the Interfaces either will be administrative in nature or used to attract liquidity to NASDAQ in response to an auction. NASDAQ believes the data included in this feed is necessary for participants who have written systems to interface with NASDAQ in the case of administrative messages or information regarding auctions and used to attract liquidity. Though these Interfaces are only available to market makers for quoting purposes, non-quoting firms will be allowed to connect to the Interfaces and receive the relevant information, but not send quotes or orders.
Participants who have written interfaces to the NASDAQ system would use the administrative data to determine the current state of the trading system. For example, this data would show which symbols are trading on NASDAQ, the current state of an options symbol (
NASDAQ holds an opening auction as an efficient and robust mechanism to start each trading day. Additionally, NASDAQ uses an auction to resume trading after a trading halt. During these auction events, NASDAQ advertises the liquidity it has available for execution. This auction information is available on other data feeds and is made available to all exchange participants. The information being added to these market making Interfaces is for convenience purposes so that market participants utilizing them have an additional means to access the information directly impacting their quoting behavior and are not required to take other feeds simply in order to have access to these data elements.
A participant's quoting application will then be able to receive these notifications over the same Interface by which it sends quotes to NASDAQ and could then use the data to respond to auctions quickly and efficiently. This data is not disseminated as a quote to the market because it represents interest that is not immediately executable, but rather interest that is currently gathering in an auction.
Data proposed for these interfaces will initially include the following:
(1) Options Auction Notifications (
(2) Options Symbol Directory Messages;
(3) System Event Messages (
(4) Option Trading Action Messages (
NASDAQ believes that its proposal is consistent with Section 6(b) of the Act
NASDAQ believes that this proposal is in keeping with those principles by protecting investors and the public interest, as well as promoting just and equitable principles of trade, through the addition of a new market making interface option for NASDAQ market makers, which by aiding market makers in their market making activities will help to enhance market liquidity for investors. Additionally, permitting the Interfaces to include data elements that are administrative in nature or that are used to attract liquidity to NASDAQ in response to the opening auction, serves to remove impediments to and acts to perfect the mechanism of a free and open market and a national market.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 15(a) of the Act and rule 18f-2 under the Act.
Applicants request an order that would permit them to enter into and materially amend subadvisory agreements without shareholder approval.
RidgeWorth Funds (the “Trust”) and RidgeWorth Capital Management, Inc. (the “Adviser”).
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on August 29, 2011 and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, 3333 Piedmont Road, NE., Suite 1500, Atlanta, GA 30305-1740.
Deepak T. Pai, Senior Counsel, at (202) 551-6876, or Dalia Osman Blass, Branch Chief, at (202) 551-6821 (Division of Investment Management, Office of Investment Company Regulation).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. The Trust is a Massachusetts business trust registered under the Act as an open-end management investment company and offers multiple series (each a “Fund”).
2. The Adviser, a Georgia corporation with its principal office in Atlanta, serves as investment adviser to the Funds and is registered under the Investment Advisers Act of 1940 (the “Advisers Act”) pursuant to an investment advisory agreement with the Trust (“Advisory Agreement”). The Adviser is a wholly owned subsidiary of SunTrust Banks, Inc. The Advisory Agreement was approved by the board of trustees of the Trust (“Board”),
3. The Adviser, subject to the oversight and authority of the Board, is responsible for furnishing the overall investment program for each Fund and providing continuous investment management for each Fund's assets pursuant to the Advisory Agreement. For the investment management services that it provides to each Fund, the Adviser receives the fee specified in the Advisory Agreement from each Fund based on the Fund's average daily net assets. The Advisory Agreement permits the Adviser to retain one or more unaffiliated investment subadvisers (each a “Subadviser”), at the Adviser's own expense, subject to the approval of the Fund's Board, including approval by a majority of its Independent Trustees, for the purpose of managing the investment of the assets of one or more Funds.
4. Applicants request an order to permit the Adviser, subject to Board approval, including a majority of the Independent Trustees, to enter into and materially amend Subadvisory Agreements without shareholder approval.
1. Section 15(a) of the Act provides, in relevant part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract that has been approved by a vote of a majority of the company's outstanding voting securities. Rule 18f-2 under the Act provides that each series or class of stock in a series investment company affected by a matter must approve the matter if the Act requires shareholder approval.
2. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or from any rule thereunder, if 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 the requested relief meets the necessary standards for the reasons discussed below.
3. Applicants believe that the shareholders expect the Adviser and the Board to select the portfolio manager or Subadviser for a Fund that is best suited to achieve the Fund's investment objective. Applicants assert that, from the perspective of the investor, the role of the Subadvisers with respect to the Funds utilizing the manager of managers structure is substantially equivalent to the role of the individual portfolio managers employed by the traditional investment company advisory firms. In the absence of exemptive relief from section 15(a) of the Act, when a new Subadviser is proposed for retention by a Fund or the Trust on behalf of one or more of the Funds, shareholders would be required to approve the Subadvisory Agreement with that Subadviser. Similarly, if an existing Subadvisory Agreement were to be amended in any material respect (
Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. Before a Fund may rely on the order requested in the application, the operation of the Fund in the manner described in the application will be approved by a majority of the Fund's outstanding voting securities, as defined in the Act or, in the case of a Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder(s) before offering shares of that Fund to the public.
2. Each Fund that relies on the order requested in the application will disclose in its prospectus the existence, substance, and effect of any order granted pursuant to the application. Each Fund relying on the order requested in the application will hold itself out to the public as utilizing the manager of managers structure described in the application. The prospectus will prominently disclose that the Adviser has ultimate responsibility (subject to oversight by the Board) to oversee the Subadvisers and recommend their hiring, termination, and replacement.
3. Within 90 days of the hiring of a new Subadviser, the affected Fund shareholders will be furnished all information about the new Subadviser that would be included in a proxy statement. To meet this obligation, the Fund will provide shareholders of the affected Fund within 90 days of hiring a new Subadviser with an information statement meeting the requirements of Regulation 14C, Schedule 14C, and Item 22 of Schedule 14A under the Securities Exchange Act of 1934, as amended.
4. The Adviser will not enter into a subadvisory agreement with any Affiliated Subadviser without such agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Fund.
5. At all times, at least a majority of the Board will be Independent Trustees, and the nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.
6. Whenever a subadviser change is proposed for a Fund with an Affiliated Subadviser, the Board, including a majority of the Independent Trustees,
7. The Adviser will provide general management services to each Fund that is subadvised, including overall supervisory responsibility for the general management and investment of the Fund's assets, and, subject to review and approval of the Board, will: (i) Set each Fund's overall investment strategies; (ii) evaluate, select and recommend Subadvisers to manage all or a part of a Fund's assets; (iii) allocate and, when appropriate, reallocate a Fund's assets among one or more Subadvisers; (iv) monitor and evaluate the performance of Subadvisers; and (v) implement procedures reasonably designed to ensure that the Subadvisers comply with the relevant Fund's investment objective, policies, and restrictions.
8. No trustee or officer of the Trust or a Fund, or director, manager or officer of the Adviser, will own, directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person), any interest in a Subadviser, except for (a) ownership of interests in the Adviser or any entity that controls, is controlled by, or is under common control with the Adviser, or (b) ownership of less than 1% of the outstanding securities of any class of equity or debt of any publicly traded company that is either a Subadviser or an entity that controls, is controlled by or is under common control with a Subadviser.
9. In the event the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the application, the requested order will expire on the effective date of that rule.
For the Commission, by the Division of Investment Management, under delegated authority.
Securities and Exchange Commission (the “Commission”).
Notice of an application for an order under section 61(a)(3)(B) of the Investment Company Act of 1940 (the “Act”).
Secretary, U.S. Securities and Commission, 100 F Street, NE., Washington, DC 20549-1090; Applicant, 2 Bethesda Metro Center, 14th Floor, Bethesda, Maryland 20814.
Deepak T. Pai, Senior Counsel, at (202) 551-6876, or Dalia Osman Blass, Branch Chief, at (202) 551-6821 (Division of Investment Management, Office of Investment Company Regulation).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. Applicant, a Delaware corporation, is a business development company (“BDC”) within the meaning of section 2(a)(48) of the Act.
2. Applicant requests an order under section 61(a)(3)(B) of the Act approving its proposal to grant stock options under the Plan to its Non-employee Directors.
3. Non-employee Directors are eligible to receive options under the Plan.
4. Under the terms of the Plan, the exercise price of an option will not be less than 100% of the current market value of the Shares on the date of issuance of the option, or if no such market value exists, the current NAV of the Shares on the date of issuance of the options. The Initial Grants will expire on September 15, 2020, and the Other Grants will expire on the tenth anniversary of the date the person becomes a Non-employee Director. Options granted under the Plan may not be assigned or transferred other than by will or the laws of descent and distribution. In the event of the death or disability (as defined in the Plan) of a Non-employee Director during such director's service, all such director's unexercised options will immediately become exercisable and may be exercised for a period of three years following the date of death (by such director's personal representative) or one year following the date of disability, but in no event after the respective expiration dates of such options. In the event of the termination of a Non-employee Director for cause, any unexercised options will terminate immediately. If a Non-employee Director's service is terminated for any reason other than by death, disability, or for cause, the options may be exercised within one year immediately following the date of termination, but in no event later than the expiration date of such options.
5. Applicant's officers and employees, including directors who are employees, are eligible or have been eligible to receive options under stock option plans that exclude Non-employee Directors as participants (the “Employee Plans”). Non-employee Directors have been eligible to receive options under applicant's two Disinterested Director stock option plans (the “1997 Disinterested Director Plan” and the “2000 Disinterested Director Plan”, together the “Disinterested Director Plans”). Additionally, applicant's officers and employees, as well as Non-employee Directors, are eligible or have been eligible to receive options under applicant's 2006 stock option plan (the “2006 Option Plan”), applicant's 2007 stock option plan (the “2007 Option Plan”), applicant's 2008 stock option plan (the “2008 Option Plan”), and applicant's 2009 stock option plan (“2009 Option Plan”) (collectively, the 2009 Option Plan, the 2008 Option Plan, the 2007 Option Plan, the 2006 Option Plan, the Disinterested Director Plans and the Employee Plans are the “Other Plans”). Non-employee Directors are now eligible to receive options only under the Plan.
1. Section 63(3) of the Act permits a BDC to sell its common stock at a price below current NAV upon the exercise of any option issued in accordance with section 61(a)(3). Section 61(a)(3)(B) provides, in pertinent part, that a BDC may issue to its non-employee directors options to purchase its voting securities pursuant to an executive compensation plan, provided that: (a) The options expire by their terms within ten years; (b) the exercise price of the options is not less than the current market value of the underlying voting securities at the date of the issuance of the options, or if no market value exists, the current NAV of the underlying voting securities; (c) the proposal to issue the options is authorized by the BDC's shareholders, and is approved by order of the Commission upon application; (d) the options are not transferable except for disposition by gift, will or intestacy; (e) no investment adviser of the BDC receives any compensation described in section 205(a)(1) of the Investment Advisers Act of 1940, except to the extent permitted by clause (b)(1) or (b)(2) of that section; and (f) the BDC does not have a profit-sharing plan as described in section 57(n) of the Act.
2. In addition, section 61(a)(3) provides that the amount of the BDC's voting securities that would result from the exercise of all outstanding warrants, options, and rights at the time of issuance may not exceed 25% of the BDC's outstanding voting securities, except that if the amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights issued to the BDC's directors, officers, and employees pursuant to any executive compensation plan would exceed 15% of the BDC's outstanding voting securities, then the total amount of voting securities that would result from the exercise of all outstanding warrants, options, and rights at the time of issuance will not exceed 20% of the outstanding voting securities of the BDC.
3. Applicant represents that its proposal to grant stock options to Non-employee Directors under the Plan meets all the requirements of section 61(a)(3)(B). Applicant states that the Board is actively involved in the oversight of applicant's affairs and that it relies extensively on the judgment and experience of its directors. In addition to their duties as Board members generally, applicant states that the Non-employee Directors provide guidance and advice on operational
4. As noted above, applicant states that the amount of voting securities that would result from the exercise of all outstanding options issued to applicant's directors, officers, and employees under the Other Plans and the Plan would be 50,200,843 shares of applicant's common stock, or 14.3% of applicant's outstanding voting securities, as of July 14, 2011. However, applicant represents that the maximum number of voting securities that would result from the exercise of all outstanding options issued and all options issuable to applicant's directors, officers, and employees under the Plan and the Other Plans would be 68,698,074 shares of applicant's common stock, or 19.6% of applicant's outstanding voting securities, as of July 14, 2011. Applicant states that to the extent the number of shares of common stock that would be issued upon the exercise of options issued under the Other Plans and the Plan exceeds 15% of applicant's outstanding voting securities, applicant will comply with the 20% limit in section 61(a)(3) of the Act.
5. Applicant asserts that, given the relatively small amount of common stock issuable to Non-employee Directors upon their exercise of options under the Plan, the exercise of such options would not, absent extraordinary circumstances, have a substantial dilutive effect on the NAV of applicant's common stock.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) proposes to amend its Fees Schedule and circular regarding Trading Permit Holder application and other related fees (“Trading Permit Fee Circular”) to amend the fee assessed to Floor Broker Trading Permit Holders that conduct a certain level of activity in CBOE Volatility Index (“VIX”) options. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.
CBOE Rule 2.20 grants the Exchange the authority to, from time to time, fix the fees and charges payable by Trading Permit Holders. CBOE is proposing to amend its Fees Schedule and Trading Permit Fee Circular effective August 1, 2011 to amend the fee assessed to Floor Broker Trading Permit Holders that conduct a certain level of activity in VIX (“VIX Floor Broker Fee”) to assess one $1,000 fee monthly to each Trading Permit Holder and TPH organization that maintains one or more Floor Broker Trading Permits that collectively meet the criteria for the assessment of the VIX Floor Broker Fee rather than assessing the Fee to each Floor Broker Trading Permit Holder. CBOE is also proposing to eliminate one of the requirements used to calculate the minimum level of activity in VIX that subjects a Floor Broker Trading Permit Holder to this fee.
CBOE assesses a tier appointment fee to CBOE Market-Maker Trading Permit Holders for certain proprietary classes in recognition of the cost to develop those products and of the profit potential in those classes.
In January 2011, CBOE amended its Fees Schedule to establish a fee (the VIX Floor Broker Fee) to be assessed to any Floor Broker Trading Permit Holder (a) that executes more than 20,000 VIX contracts during the month and (b) whose aggregate VIX executed contracts during the month comprise more than
CBOE is proposing to simplify the manner in which this fee is assessed by (i) allocating one fee to each Trading Permit Holder or TPH organization that maintains more than one Floor Broker Trading Permit and that collectively through those Floor Broker Trading Permits meets the criteria to be assessed the VIX Floor Broker Fee rather than to assess the VIX Floor Broker Fee in that instance for each of the individual Floor Broker Trading Permits; and (ii) removing the criterion for the assessment of the fee that looks to aggregate VIX executed contracts during the month in relation to a Floor Broker Trading Permit Holder's exchange-wide total executed contracts. Instead, the only applicable requirement for assessment of the fee would be the current first criterion (
CBOE believes the proposal to allocate one fee to each Trading Permit Holder or TPH organization, as applicable, is reasonable and appropriate in that each Market-Maker present in the VIX trading crowd has the ability to participate on a trade, regardless of whether those Market-Makers are associated with the same TPH organization. However, for Floor Broker Trading Permit Holders, each Trading Permit Holder or TPH organization, as a single agent, is limited in their ability to participate on behalf of any account in which the Trading Permit Holder has an interest or on behalf of a non-Market-Maker customer to a single Floor Broker Trading Permit Holder.
In addition, the proposal will level the playing field between Trading Permit Holders and TPH organizations that maintain multiple Floor Broker Trading Permits in VIX rather than one Floor Broker Trading Permit in VIX. Under the existing structure, Trading Permit Holders may have only one Floor Broker Trading Permit assigned to execute orders in VIX but may have others providing VIX orders to that particular Floor Broker for execution. This enables these Trading Permit Holders and TPH organizations to avoid being assessed more than one VIX Floor Broker Fee. Thus, this proposal will eliminate the disparity between the VIX Floor Broker Fees that are assessed to those Trading Permit Holders or TPH organizations that elect to maintain multiple Floor Broker Trading Permits to execute VIX orders and those that choose to only maintain one Floor Broker Trading Permit to execute VIX orders.
In addition, by removing the 30% aggregate calculation, affiliated Trading Permit Holders and TPH organizations will be able to better monitor whether the fee will be assessed throughout the month. Based on the numbers generated for May 2011, the removal of this criterion would not subject additional Trading Permit Holders to the fee.
In addition to the proposed changes to the Fees Schedule described above, CBOE is proposing to revise its regulatory circular that sets forth the existing Trading Permit Holder application and other related fees. The Exchange proposes to revise this circular to incorporate the changes to Section 10 of the CBOE Fees Schedule that are described above. The proposed changes to the circular are included as Exhibit 2 to the Form 19b-4.
The proposed rule change will treat all Trading Permit Holders in the same manner and is equitable and not discriminatory in that there is an objective test for the application of this fee. CBOE believes this proposal is reasonable in that, based on the data for May 2011, the removal of the criterion that aggregates VIX executed contracts during the month to determine if the aggregated amount comprises more than 30% of the Floor Broker Trading Permit Holder's exchange-wide total executed contracts does not appear to increase, in and of itself, the number of Trading Permit Holders that are subject to this fee. In addition, CBOE believes the assessment of one VIX Floor Broker fee to each Trading Permit Holder or TPH organizations is reasonable to ensure it is in congruence with that level of opportunity available to Floor Broker Trading Permit Holders as compared to the level of opportunity available to Market-Makers. Further, the assessment of one fee to each Trading Permit Holder or TPH organization “levels the playing field” for Trading Permit Holders and TPH organizations that maintain more than one Floor Broker Trading Permit to execute orders in VIX options. Accordingly, the Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The ISE is proposing to amend fees for certain complex orders executed on the Exchange. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchange currently assesses per contract transaction charges and credits to market participants that add or remove liquidity from the Exchange (“maker/taker fees”) in a number of options classes (the “Select Symbols”).
For complex orders in the Select Symbols, the Exchange currently charges a “take” fee of: (i) $0.30 per contract for Market Maker,
Additionally, the Exchange provides a rebate of $0.25 per contract to Priority Customer complex orders that trade with non-customer orders in the Complex Order Book.
The Exchange now proposes to extend the fees and credits for complex orders applicable to the Select Symbols to all symbols that are in the Penny Pilot Program.
Additionally, the Exchange currently provides a rebate of $0.25 per contract to Priority Customer complex orders that trade with non-customer orders in the Complex Order Book and proposes to extend this rebate to the Penny Pilot Symbols. Finally, the Exchange currently charges a Payment for Order Flow (PFOF) fee of $0.25 per contract for each customer order executed in the Penny Pilot Symbols, including complex orders. As part of this proposed rule change, the Exchange proposes not to charge a PFOF fee for customer complex orders transacted in the Penny Pilot Symbols.
The Exchange has designated this proposal to be operative on August 1, 2011.
The Exchange believes that its proposal to amend its Schedule of Fees is consistent with Section 6(b) of the Act
The Exchange believes that its complex order fees and credits remain competitive with fees charged by other exchanges and therefore are reasonable and equitably allocated to those members that opt to direct orders to the Exchange rather than to a competing exchange. The Exchange believes that its proposal to extend its complex order pricing to all Penny Pilot Symbols is reasonable because doing so will attract additional order flow to the Exchange. The complex order pricing employed by the Exchange for the Select Symbols has proven to be an effective pricing mechanism and attractive to Exchange participants and their customers. The Exchange believes extending that pricing structure will attract additional complex order business while at the same time creating standardization in complex order pricing across symbols that make up the majority of daily volume in options trading. The Exchange further believes that the amounts of the proposed fees are reasonable because they are identical to fees assessed by the Exchange for execution of complex orders in the Select Symbols.
The Exchange believes it is reasonable to eliminate the PFOF fee for customer complex orders in the Penny Pilot Symbols because the Exchange does not charge a PFOF fee for symbols that are subject to the Exchange's maker/taker pricing,
The Exchange also believes that extending the maker/taker pricing to complex orders in the Penny Pilot Symbols is reasonable and equitable because the Exchange is not changing its maker/taker pricing structure; it is merely extending it to additional symbols,
Finally, the Exchange believes that the proposed fees are fair, equitable and not unfairly discriminatory because the proposed fees are consistent with price differentiation that exists today at other option exchanges. Additionally, the Exchange believes it remains an attractive venue for market participants to trade complex orders despite its proposed fee change as its fees remain competitive with those charged by other exchanges for similar trading strategies. The Exchange operates in a highly competitive market in which market participants can readily direct order flow to another exchange if they deem fee levels at a particular exchange to be excessive.
The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
CBOE proposes to amend its rules in order to simplify the $1 Strike Price Interval Program. The text of the rule proposal is available on the Exchange's Web site (
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Interpretation and Policy .01 to Rule 5.5 in order to simplify the $1 Strike Price Interval Program (“Program”).
In 2003, the Commission issued an order permitting the Exchange to establish the Program on a pilot basis.
The Exchange renewed the pilot program on a yearly basis and in 2007, the Commission granted permanent approval of the Program.
Since the Program was made permanent, the number of class selections per exchange has been increased from ten (10) classes to 55 classes
The most recent expansion of the Program was approved by the Commission in early 2011 and increased the number of $1 strike price intervals permitted within the $1 to $50 range.
• When the price of the underlying stock is equal to or less than $20, permit $1 strike price intervals with an exercise price up to 100% above and 100% below the price of the underlying stock.
○ However, the above restriction would not prohibit the listing of at least five (5) strike prices above and below the price of the underlying stock per expiration month in an option class.
○ For example, if the price of the underlying stock is $2, the Exchange would be permitted to list the following series: $1, $2, $3, $4, $5, $6 and $7.
• When the price of the underlying stock is greater than $20, permit $1 strike price intervals with an exercise price up to 50% above and 50% below the price of the underlying security up to $50.
• For the purpose of adding strikes under the Program, the “price of the underlying stock” shall be measured in the same way as “the price of the underlying security” is as set forth in Rule 5.5A(b)(i).
• Prohibit the listing of additional series in $1 strike price intervals if the underlying stock closes at or above $50 in its primary market and provide that additional series in $1 strike price intervals may not be added until the underlying stock closes again below $50.
The early 2011 expansion of the Program permitted for some limited listing of LEAPS in $1 strike price intervals for classes that participate in the Program. The Exchange is proposing to maintain the expansion as to LEAPS, but simplify the language and provide examples of the simplified rule text. These changes are set forth subparagraph (v) to Rule 5.5.01(b)(2).
For stocks in the Program, the Exchange may list one $1 strike price interval between each standard $5 strike interval, with the $1 strike price interval being $2 above the standard strike for each interval above the price of the underlying stock, and $2 below the standard strike for each interval below the price of the underlying stock (“$2 wings”). For example, if the price of the underlying stock is $24.50, the Exchange may list the following standard strikes in $5 intervals: $15, $20, $25, $30 and $35. Between these standard $5 strikes, the Exchange may list the following $2 wings: $18, $27 and $32.
In addition, the Exchange may list the $1 strike price interval which is $2 above the standard strike just below the underlying price at the time of listing. In the above example, since the standard strike just below the underlying price ($24.50) is $20, the Exchange may list a $22 strike. The Exchange may add additional long-term options series strikes as the price of the underlying stock moves, consistent with the OLPP.
The early 2011 expansion of the Program prohibited the listing of $2.50 strike price intervals for classes that participate in the Program. This prohibition applies to non-LEAP and LEAPS. The Exchange proposes to maintain this prohibition and codify it in Rule 5.5.01(a)(1) (Program Description).
For ease of reference, the Exchange is proposing to add the headings “Program Description,” “Initial and Additional Series” and “LEAPS” to Rule 5.5.01.
The Exchange is proposing to more accurately reflect the nature of the Program and is proposing to make stylistic changes throughout Rule 5.5.01 by adding the phrase “price interval.”
Lastly, the Exchange is making technical changes to Rule 5.5.01,
The Exchange represents that it has the necessary systems capacity to support the increase in new options series that will result from the proposed streamlining changes to the Program.
The Exchange believes the proposed rule change is consistent with Section 6(b)
CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On June 9, 2011, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA proposed to amend FINRA Rules 6282, 6380A, 6380B and 6622 (“trade reporting rules”) relating to trade reporting of OTC transactions in equity securities. Under FINRA trade reporting rules, members are required to report OTC transactions in equity securities to FINRA unless they fall within an express exception. As a general matter, when members report OTC trades, FINRA facilitates the public dissemination of the trade information and/or assesses regulatory transaction fees under Section 3 of Schedule A to the FINRA By-Laws (“Section 3”) and the Trading Activity Fee (“TAF”). Certain transactions and transfers of securities are not required to be reported to FINRA (
FINRA proposed to amend its trade reporting rules to: (1) Clarify the existing exception for transactions that are part of a distribution of securities and impose certain notice requirements on members relying on the exception for transactions that are part of an “unregistered secondary distribution”; and (2) expressly exclude from the trade reporting requirements, transfers of equity securities for the purpose of creating or redeeming instruments such as American Depositary Receipts (“ADRs”) and exchange-traded funds (“ETFs”).
FINRA rules contain an exception from the trade reporting requirements for transactions that are effected in connection with a distribution of securities, specifically:
Transactions that are part of a primary distribution by an issuer or of a registered secondary distribution (other than “shelf distributions”) or of an unregistered secondary distribution.
Thus, transactions that are part of a distribution (other than a secondary shelf distribution) are not reported to FINRA or publicly disseminated, and they are not assessed regulatory transaction fees under Section 3 or the TAF.
FINRA proposed to amend its trade reporting rules to incorporate by reference the definition of “distribution” set forth in SEC Regulation M for purposes of this exception.
In addition, FINRA proposed to adopt Supplementary Material in its trade reporting rules that applies specifically to the trade reporting exception for transactions that are part of an “unregistered secondary distribution” which would require members to provide notice to FINRA that they are relying on this exception. Members also would be required to provide FINRA the security name and symbol, execution date, execution time, number of shares, trade price and parties to the trade, for each transaction that is part of the unregistered secondary distribution and not trade reported. Under the proposed rule, members must provide the notice and information no later than three business days following trade date. If the trade executions occur over multiple days, then the member would be required to provide initial notice and information available at that time to FINRA no later than three business days following the first trade date and final notice and information no later than three business days following the last trade date.
The proposed Supplementary Material also would require that the member retain records sufficient to document its basis for relying on this trade reporting exception, including but not limited to, the basis for determining that the transactions are part of an unregistered secondary distribution, as defined under Rule 100 of Regulation M. FINRA explained that members would be required to demonstrate that they have satisfied the “magnitude of the offering” and “special selling efforts” criteria under Regulation M, and stated that the mere assertion that the order was large-sized or a block or that execution of the order was “worked” by a member would usually not by itself be sufficient. FINRA also explained that members must be able to demonstrate that they have complied with the applicable notification requirements in FINRA Rule 5190.
The Commission believes that this requirement, as well as the modification to provide a definition of “distribution” for use in connection with the exception, should ensure that members apply the trade reporting exception correctly and should help ensure that members report all transactions that are required to be reported. The Commission specifically notes that large block trades must be reported to FINRA for tape dissemination purposes and are assessed regulatory transaction fees under Section 3 and the TAF. The trade reporting exception does not apply to block trades, unless they otherwise meet the definition of distribution under Regulation M.
FINRA also proposed to amend its trade reporting rules to expressly
FINRA stated that the proposed rule change will be effective 90 days following the date of Commission approval.
After carefully considering the proposed rule change, the Commission finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association. In particular, the Commission finds that the proposal is consistent with Section 15A(b)(6) of the Act,
The Commission believes that the proposal is reasonably designed to clarify the interpretation and application of the current exception from the trade reporting requirements for transactions that are part of a distribution. The Commission believes that the proposal will: (1) Enhance market transparency by helping to ensure that transactions that are not part of an “unregistered secondary distribution,” such as large block trades, are properly reported; and (2) clarify members' obligations with respect to the reporting of transfers of equity securities to create or redeem instruments such as ADRs and ETFs under FINRA trade reporting rules.
In addition, FINRA will receive information regarding transactions that are part of an unregistered secondary distribution which will enhance FINRA's ability to monitor compliance with the securities laws and rules.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Tennessee (FEMA-4005-DR), dated 07/20/2011.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Tennessee, dated 07/20/2011, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
This notice announces a meeting of the International Telecommunication Advisory Subcommittees (ITAC) on August 22, 2011, 10 a.m.-noon EDT, at the Department of State, 2201 C Street, NW., Washington, DC 20520, to seek advice from the telecommunications industry on: (a) The consultation of International Telecommunication Union, Telecommunication Standardization Sector Study Group 15, on whether draft Recommendation G.tp-oam (Operations, Administration and Maintenance mechanism for MPLS-TP in Packet Transport Network (PTN)) should be approved as a policy-level document; and (b) what policy position the United States should take at the December 2011 Study Group 15 meeting on this issue.
This meeting is open to the public as seating capacity allows. The public will have an opportunity to provide comments at this meeting. People desiring further information on this meeting or wishing to request reasonable accommodation may contact the Secretariat at
Federal Aviation Administration (FAA), DOT.
Notice of petition for exemption received.
This notice contains a summary of a petition seeking relief from specified requirements of 14 CFR. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before August 29, 2011.
You may send comments identified by Docket Number
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Frances Shaver, ARM-200, (202) 267-4059, FAA, Office of Rulemaking, 800 Independence Ave SW., Washington, DC 20591. This notice is published pursuant to 14 CFR 11.85.
Federal Highway Administration (FHWA), DOT.
Rescind Notice of Intent to Prepare an Environmental Impact Statement.
The FHWA, on behalf of the California Department of Transportation (Caltrans) is issuing this notice to advise the public that the Notice of Intent (NOI) published on September 5, 2002
Sandra E. Rosas, Chief, Office of Environmental Management, Caltrans, 703 B Street, Marysville, CA 95901 or call (530) 741-4017.
Effective July 1, 2007, the Federal Highway Administration (FHWA) assigned, and the California Department of Transportation (Caltrans) assumed, environmental responsibilities for this project pursuant to 23 U.S.C. 327. Caltrans, as the delegated National Environmental Policy Act (NEPA) agency, is rescinding the NOI to prepare an EIS for the Hopland Bypass Project in Mendocino County, California. The 8.8 mile project proposed to construct a four-lane freeway or expressway on State Route 101 in southern Mendocino County and bypass the community of Hopland. Since the NOI to prepare an EIS was published in the
Federal Motor Carrier Safety Administration (FMCSA), DOT.
August 11, 2011, 12 noon to 3 p.m., Eastern Daylight Time.
This meeting will take place telephonically. Any interested person may call 877.820.7831, passcode, 908048 to participate in this meeting.
Open to the public.
The Unified Carrier Registration Plan Board of Directors (the Board) will continue its work in developing and implementing the Unified Carrier Registration Plan and Agreement and to that end, may consider matters properly before the Board.
Mr. Avelino Gutierrez, Chair, Unified Carrier Registration Board of Directors at (505) 827-4565.
In accordance with Part 211 of Title 49 Code of Federal Regulations (CFR), this document provides the public notice that by a document dated May 23, 2011, the Marquette Rail, LLC (Marquette) has petitioned the Federal Railroad Administration (FRA) approval of a Product Safety Plan (PSP) submitted pursuant to 49 CFR part 236, subpart H. FRA assigned the petition Docket Number FRA-2011-0055.
Marquette submitted a petition for approval of a PSP for the Railsoft TrackAccess System. The TrackAccess System is a processor-based dispatch system developed to be operated in the autonomous mode (without dispatcher intervention) for low density lines. The system provides a processor-based methodology of requesting and issuing track authority to either qualified train crewmembers or roadway workers, and to do so while significantly improving safety of train operations, roadway workers, and other railway equipment, while also increasing railroad productivity. Marquette asserts the PSP demonstrates that the TrackAccess System has been designed in a highly safe manner, and has been sufficiently tested to verify that fact. The PSP provides descriptions of the TrackAccess System itself.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
Alabama & Florida Railway Co., Inc. (A&F) has filed a verified notice of exemption under 49 CFR pt. 1152 subpart F—
A&F has certified that: (1) No local traffic has moved over the line for at least 2 years;
Where, as here, the carrier is abandoning a line that constitutes its entire rail system, the Board does not normally impose labor protection under 49 U.S.C. 10502(g), unless the evidence indicates the existence of: (1) A corporate affiliate that will continue substantially similar rail operations; or (2) a corporate parent that will realize substantial financial benefits over and above relief from the burden of deficit operations by its subsidiary railroad.
Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on September 8, 2011, unless stayed pending reconsideration. Petitions to stay that do not involve environmental
A copy of any petition filed with the Board should be sent to A&F's representatives: William A. Mullins and Robert A. Wimbish, Baker & Miller PLLC, 2401 Pennsylvania Avenue, NW., Suite 300, Washington, DC 20037.
If the verified notice contains false or misleading information, the exemption is void
A&F has filed a combined environmental and historic report that addresses the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by August 12, 2011. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423-0001) or by calling OEA, at (202) 245-0305. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public.
Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), A&F shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by A&F's filing of a notice of consummation by August 9, 2012, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire.
Board decisions and notices are available on our Web site at
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995. An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number. The OCC is soliciting comment concerning its information collection titled, “Fair Housing Home Loan Data System Regulation.” The OCC is also giving notice that it has sent the collection to OMB for approval.
You should submit your comments by September 8, 2011.
You should direct all written comments to: Communications Division, Office of the Comptroller of the Currency, Mailstop 2-3,
Additionally, please send a copy of your comments to OCC Desk Officer, 1557-0159, 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 from Ira Mills or Mary H. Gottlieb, OCC Clearance Officers, (202) 874-5090, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
The OCC is proposing to revise the following information collection:
The information collection requirements in 12 CFR part 27 are as follows:
• Section 27.3(a) requires national banks that are required to collect data on home loans under 12 CFR part 203 to present the data on Federal Reserve Form FR HMDA-LAR,
• Section 27.3(b) lists the information banks should obtain from an applicant as part of a home loan application, and states information that a bank must disclose to an applicant.
• Section 27.3(c) sets forth additional information required to be kept in the loan file.
• Section 27.4 states that the OCC may require a national bank to maintain a Fair Housing Inquiry/Application Log found in Appendix III to part 27 if there is reason to believe that the bank is engaging in discriminatory practices or if analysis of the data compiled by the bank under the Home Mortgage Disclosure Act (12 U.S.C. 2801
• Section 27.5 requires a national bank to maintain the information required by § 27.3 for 25 months after the bank notifies the applicant of action taken on an application, or after withdrawal of an application.
• Section 27.7 requires a national bank to submit the information required by §§ 27.3(a) and 27.4 to the OCC upon its request, prior to a scheduled examination using the Monthly Home Loan Activity Format form in Appendix I to part 27 and the Home Loan Data Form in Appendix IV to part 27.
The OCC issued a
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the information collection;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995. An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning its information collection titled “Loans in Areas Having Special Flood Hazards.” The OCC is also giving notice that it has submitted the collection to OMB for review.
You should submit written comments by: September 8, 2011.
Communications Division, Office of the Comptroller of the Currency, Mail Stop 2-3, Attention: 1557-0202, 250 E Street, SW., Washington, DC 20219. In addition, comments may be sent by fax to (202) 874-5274, or by electronic mail to
Additionally, you should send a copy of your comments to OCC Desk Officer, 1557-0202, 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 Ira Mills or Mary H. Gottlieb, Clearance Officers, (202) 874-5090, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
The OCC is proposing to extend OMB approval of the following information collection:
This collection of information is set forth in OCC regulations at 12 CFR Parts 22 and 172 and is required by section 303(a)
The collections of information pertain to loans secured by buildings and mobile homes located or to be located in areas determined by the director of the Federal Emergency Management Agency (FEMA) to have special flood hazards. Sections 22.6 and 172.6 apply to loans secured by buildings or mobile homes, regardless of location.
This collection of information, which previously applied only to national banks, has been merged with former OTS OMB Control No. 1550-0281. On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010) (Dodd-Frank Act) was enacted. As part of the comprehensive package of financial regulatory reform measures enacted, Title III of the Dodd-Frank Act transfers the powers, authorities, rights and duties of the Office of Thrift Supervision to other banking agencies, including the OCC, on the “transfer date.” The transfer date is July 21, 2011. As a result, the OCC now regulates both national banks and Federal savings associations.
An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless the information collection displays a currently valid OMB control number.
On January 14, 2011, the OCC published a notice in the
The commenter asserted that the OCC's burden estimates were understated. They further stated that the accuracy of the estimates is essential to the reduction of regulatory burden and policy discussions regarding the future of the national flood insurance program.
The commenter cited to Executive Order 13563 (E.O.), which emphasizes the importance of reducing regulatory burdens and cost. The E.O. requires that agencies: Use the best, most innovative, and least burdensome tools to achieve regulatory goals; take into account quantitative and qualitative costs and benefits; ensure that regulations are accessible, consistent, written in plain language, and easy to understand; and measure and strive to improve the results of regulatory requirements. These requirements must be satisfied any time a regulation is changed. Because this information collection renewal involves no changes to the OCC's flood insurance regulations, the executive order does not apply.
The commenter also cited to OMB's Implementing Guidance for OMB Review of Agency Information Collection, which requires that the following be included in estimates of burden for covered information collections: Design, procurement, and operation of data collection, data management and data reporting systems; response to changes in the requirements of an existing information collection; training staff on how to comply with the collection; time and resources required to perform all required tasks and certifications; and time and resources required to transmit the collection to the OCC or a third party. The design, procurement, and operation of the systems required to conduct the information collection are regarded as one-time start up costs that are phased out over time. The estimates provided were intended to cover the time and resources required to perform all required tasks and certifications and transmit required information to the OCC or a third party. There have been no changes in the requirements of the collection, therefore no time has been allotted for this item in the burden estimates. Lastly, the burden estimates do not include time devoted to ongoing training as the regulations contain no training requirement. In this case, the training of staff is considered a usual and customary business practice, which does not require that PRA burden be taken.
The commenter indicated that the OCC's estimate of 15 minutes per loan could only include the time required to complete the administrative tasks involved and not the time spent on procedures, systems, and monitoring to ensure compliance. They reference the “Interagency Questions and Answers Regarding Flood Insurance” issued in 2009, which reflects the complexity of compliance with the mandatory purchase obligation of the flood insurance statutes and regulations. Their members reported to them that one hour per loan is a more accurate estimate.
The commenter set out the following recommendations for revised burden estimates:
• Determining whether a building or mobile home offered as collateral will be located in a special flood hazard area:
○ 5-30 minutes per file to order the determination and review the completed form.
○ Time expended for commercial loans may be considerably longer than that for a less complicated consumer loan—20-30 minutes or more per file.
• Providing the borrower and loan servicer with warning notice that the building securing the loan is located in a special flood hazard area:
○ 5 minutes per loan to prepare and send the notice to the borrower.
○ Most borrowers have questions about the determination and how to obtain insurance. The time required to assist borrowers may take from 5-10 minutes to several hours. If appropriate, the bank will make a joint request with the borrower to FEMA for a Letter of Determination Review.
• Ensuring that the borrower maintains flood insurance throughout the life of the loan; notify the borrower of the obligation and explain the force placement process:
○ The burden estimates should include the significant amounts of time required for the compliance structure necessary to ensure that lapses are discovered, notice is provided, and force placement occurs when necessary.
○ Banks have loan servicing review procedures to ensure continuous coverage, which require loan file reviews averaging 10 minutes. If a lapse is discovered, an additional 15-25 minutes is required to send the 45-day notice to the borrower, monitor whether the insurance is purchased, and purchase a force placed policy when necessary.
○ FEMA regularly updates flood insurance rate maps to address changing risks. In the case of remapping, banks must order new determinations, notify customers if the structure is in a special flood hazard area, review policy adequacy, and force place a policy if necessary. Remapping requires a minimum of 30 minutes per file.
○ Interagency Q&As urge banks to conduct file reviews for purchased loans, loan participations, or syndication agreements. Depending on complexity, conducting the reviews and sending necessary notices requires 10-30 minutes.
• Notifying FEMA in writing of the identity of the servicer and any change in servicer requires 2 minutes per loan.
• Compliance monitoring and auditing to ensure compliance requires 20 minutes per loan.
• Training for employees requires an average of 2 hours per employee each year.
• Revising procedures pursuant to the OCC's final Q&As
In response to the commenter's recommendations for revised burden estimates, the OCC has the following responses and revised estimates. OCC has not taken any burden for Requests for Flood Zone Determination Review, as they are accomplished using FEMA forms approved under OMB Control No. 1660-0040. Assisting borrowers is a usual and customary business practice for which the OCC is not required to take burden under the PRA. There is no specific requirement for bank review of Flood Insurance Rate Maps and, therefore, the OCC has not taken burden for this procedure. In addition, the flood insurance regulation does not state that banks with loans in the affected area must undertake another loan file review. Lastly, there is no specific requirement in the Q&As for banks to conduct file reviews or for revision of policies and procedures to reflect the Q&As. Any such reviews or revisions would be usual and customary business practices and, therefore, the OCC is not required to take that PRA burden.
The OCC has considered the comment and has adjusted its revised estimates. The revised estimates are as follows:
• Retention of standard FEMA form: 2.5 minutes.
• Notice of special flood hazards to borrowers and servicers: 5 minutes.
• Notice to FEMA of servicer: 5 minutes.
• Notice to FEMA of change of servicer: 5 minutes.
• Notice to borrowers of lapsed mandated flood insurance: 5 minutes.
• Purchase of flood insurance on the borrower's behalf: 15 minutes.
• Notice to borrowers mandated flood insurance due to remapping: 5 minutes.
• Purchase flood insurance on the borrower's behalf due to remapping: 15 minutes.
Comments continue to be invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information shall have practical utility;
(b) The accuracy of the OCC's estimate of the burden of the collection of information;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
The OCC estimates that there are 871 HMDA national bank reporters who make an average of 3,591 home loans and 517 HMDA savings association reporters who make an average of 1,438 loans. There are an additional 716 national banks and 147 savings associations that are not HMDA reporters making on average 20 home loans. Thus, there are 1,587 national banks and 664 Federal savings associations that make on average 1,980 and 1,124 home loans, respectively. Of these loans, 20% (396 and 225 loans, respectively) are estimated to be in a Special Flood Hazard Area and require a notice to FEMA or its designee of the identity of the servicer. Of that 20%, 50% (198 and 112 loans, respectively) are estimated to require an additional notice to FEMA or its designee of a change in the identity of the servicer. Of the 20% of loans that are estimated to be in a Special Flood Hazard Area, 20% (79 and 45 loans, respectively) are estimated to have a lapse or underinsured situation that would require a notice to the borrower. Of the 20% that had a lapse or inadequate coverage, 25% (20 and 11 loans, respectively) would require the bank to issue a force placed policy.
Two percent of the home loans made will require the national bank or Federal savings association to provide notice to the borrower of the mandatory purchase requirement due to a remapping issue (40 and 22 loans, respectively). Of that 2%, 50% would require the bank or savings association to issue a force placed policy (20 and 11 loans, respectively).
Retention of Standard FEMA Form:
Disclosures:
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is publishing the names of seven individuals and nine entities whose property and interests in property have been unblocked pursuant to Executive Order 12978 of October 21, 1995,
The unblocking and removal from the list of Specially Designated Nationals and Blocked Persons (“SDN List”) of the seven individuals and nine entities identified in this notice whose property and interests in property were blocked pursuant to Executive Order 12978 of October 21, 1995, is effective on August 3, 2011.
Assistant Director, Compliance Outreach & Implementation, Office of Foreign Assets Control, Department of the Treasury, Washington, DC 20220,
This document and additional information concerning OFAC are available from OFAC's Web site (
On October 21, 1995, the President, invoking the authority,
Section 1 of the Order blocks, with certain exceptions, all property and interests in property that are in the United States, or that hereafter come within the United States or that are or hereafter come within the possession or control of United States persons, of: (1) The foreign persons listed in an Annex to the Order; (2) any foreign person determined by the Secretary of Treasury, in consultation with the Attorney General and the Secretary of State: (a) to play a significant role in international narcotics trafficking centered in Colombia; or (b) to materially assist in, or provide financial or technological support for or goods or services in support of, the narcotics trafficking activities of persons designated in or pursuant to the Order; and (3) persons determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to be owned or controlled by, or to act for or on behalf of, persons designated pursuant to the Order.
On July 20, 2011, the Director of OFAC removed from the SDN List the seven individuals and nine entities listed below, whose property and interests in property were blocked pursuant to the Order:
Office of the Comptroller of the Currency (OCC).
Interim final rule with request for comment.
Pursuant to Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act, all functions of the Office of Thrift Supervision (OTS) relating to Federal savings associations and the rulemaking authority of the OTS relating to all savings associations are transferred to the Office of the Comptroller of the Currency (OCC) on July 21, 2011 (transfer date). In order to facilitate the OCC's enforcement and administration of former OTS rules and to make appropriate changes to these rules to reflect OCC supervision of Federal savings associations as of the transfer date, the OCC is republishing, with nomenclature and other technical changes, the OTS regulations currently found in Chapter V of Title 12 of the Code of Federal Regulations. The republished regulations will be recodified with the OCC's regulations in Chapter I at parts 100 through 197 (Republished Regulations), effective on July 21, 2011. The Republished Regulations will supersede the OTS regulations in Chapter V for purposes of OCC supervision and regulation of Federal savings associations, and certain of the Republished Rules will supersede the OTS regulations in Chapter V for purposes of the FDIC's supervision of state savings associations. Chapter V of Title 12 of the Code of Federal Regulations will be vacated at a later date.
This interim final rule is effective July 21, 2011. Comments must be received on or before October 11, 2011.
Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments by the Federal eRulemaking Portal or e-mail, if possible. Please use the title “Republication of Regulations in Connection with Office of Thrift Supervision Integration Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:
•
• Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting or viewing public comments, viewing other supporting and related materials, and viewing the docket after the close of the comment period.
• E-mail:
• Mail: Office of the Comptroller of the Currency, 250 E Street, SW., Mail Stop 2-3, Washington, DC 20219.
• Fax: (202) 874-5274.
• Hand Delivery/Courier: 250 E Street, SW., Mail Stop 2-3, Washington, DC 20219.
You may review comments and other related materials that pertain to this interim final rule by any of the following methods:
• Viewing Comments Electronically: Go to
• Viewing Comments Personally: You may personally inspect and photocopy comments at the OCC, 250 E Street, SW., Washington, DC. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 874-4700. Upon arrival, visitors will be required to present valid government-issued photo identification and to submit to security screening in order to inspect and photocopy comments.
• Docket: You may also view or request available background documents and project summaries using the methods described above.
Andra Shuster, Senior Counsel, or Heidi Thomas, Special Counsel, Legislative and Regulatory Activities Division, (202) 874-5090, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
On July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act or Act).
Under Title III of the Dodd-Frank Act, the OCC will assume all functions of the OTS and the Director of the OTS relating to Federal savings associations.
In an effort to ensure an orderly transfer of OTS regulations to the OCC as of the transfer date, the OCC has determined that it is appropriate to republish in 12 CFR Chapter I all OTS regulations from 12 CFR Chapter V that we have the authority to promulgate and enforce, with appropriate nomenclature and other technical changes. The Republished Regulations will supersede the OTS regulations found in Chapter V for purposes of the OCC's supervision and regulation of Federal savings associations, and, where applicable, for purposes of the FDIC's supervision and regulation of state savings associations.
Since the adoption of the Dodd-Frank Act, the OCC, in collaboration with the OTS, has been reviewing its regulations, as well as those of the OTS, to determine what changes are needed to facilitate a smooth regulatory transition to OCC supervision of Federal savings associations. This review is being accomplished in several phases. On July 21, 2011, the OCC issued a final rule revising certain OCC rules that are central to internal agency functions and operations immediately upon the transfer of supervisory jurisdiction for Federal savings associations.
This interim final rule is the next step of our review of OCC and OTS regulations. As described in more detail below, this interim final rule republishes those OTS regulations that the OCC has the authority to promulgate and will enforce as of the transfer date.
Subsequent to the transfer date, the OCC will consider more comprehensive substantive amendments, as necessary, to the Republished Regulations. For example, we may propose to repeal or combine provisions in cases where OCC and former OTS rules are substantively identical or substantially overlap. In addition, we may propose to repeal or modify OCC or former OTS rules where differences in regulatory approach are not required by statute or warranted by features unique to either the national bank or Federal savings association charter. This substantive review also will provide an opportunity for the OCC to ask for comments suggesting revisions to the rules for both national banks and Federal savings associations that would remove provisions that are “outmoded, ineffective, insufficient, or excessively burdensome,” consistent with the goals outlined in an executive order recently issued by the President.
As noted above, the interim final rule republishes those OTS regulations the OCC has the authority to promulgate and, along with the FDIC in the case of state savings associations, will enforce as of the transfer date. The OTS regulations are currently set out in Chapter V of Title 12 as parts 500 through 591. In order to reduce confusion and to assist the thrift industry, we have preserved where possible the OTS's numbering system by republishing these regulations with OCC part numbers that correspond to the former OTS rules, specifically, by changing the “5” to a “1”. For example, 12 CFR part 545 is republished as 12 CFR part 145. We note, however, that there were a number of instances where the OTS numbering system has been modified because it deviated from standard CFR numbering conventions. Therefore, for example, former parts 563b through 563g are being republished as parts 192 through 197 (with corresponding cross-reference changes). This preamble contains a redesignation table indicating how the newly issued parts in Chapter I correspond to the former parts in Chapter V.
We also have made nomenclature and other technical amendments to reflect OCC supervision of Federal savings associations and FDIC supervision of state savings associations, along with certain required Dodd-Frank Act changes. OTS regulations in Chapter V of Title 12 that will be unnecessary following the transfer date, or that are superseded by this rulemaking (or other rulemakings by the FDIC and the Board) or other provisions of the Dodd-Frank Act, will be repealed at a later date. We have added a new part 100 to clarify that the Republished Regulations supersede any rules applying to savings associations contained in Chapter V of Title 12.
In addition, part 100 provides that the Comptroller may, for good cause and to the extent permitted by statute, waive the applicability of any provision of parts 100 through 197. This provision transfers to the Comptroller authority provided to the OTS Director by 12 CFR 500.30(a).
The OCC has worked closely with the OTS, FDIC and the Board to coordinate the republication of OTS rules. Although section 312 of the Dodd-Frank Act transfers all OTS rulemaking authority for all savings associations to the OCC, where the FDIC has identified an independent basis for its rulemaking authority over state savings associations (either due to other amendments made by the Dodd-Frank Act or based on other statutory authority) the FDIC will promulgate regulations for state savings associations. Therefore, not all of the Republished Regulations apply to state savings associations.
We also have not republished those OTS rules relating exclusively to savings and loan holding companies (SLHCs), because the Dodd-Frank Act transferred the OTS's supervision and rulewriting authority for SLHCs to the Board.
Similarly, under the Dodd-Frank Act, rulewriting authority for certain consumer rules is transferred to the Bureau of Consumer Financial Protection (Bureau). Therefore, although the OCC has the authority to enforce these rules for Federal savings associations and national banks with total assets of $10 billion or less, we have not republished these rules and they remain in Chapter V of the Code of Federal Regulations, until superseded by the Bureau.
We also note that, in addition to parts 100 through 197, certain rules contained in parts 1 through 41 will also take into consideration the OCC's supervision of Federal savings associations, such as part 4 (regarding disclosure of information) and part 8 (regarding assessments).
The OCC has made certain nomenclature and other non-substantive changes consistently throughout the Republished Regulations to replace references to the OTS and its administrative structure with appropriate references to the OCC and, in the case of rules also applicable to state savings associations, the FDIC. Specifically, these changes are as follows:
• References to “the OTS,” “Office,” and “Secretary” have been changed to “the OCC” or “FDIC” or to “the appropriate Federal banking agency” (AFBA), as defined in 12 U.S.C. 1813(q) and as amended by the Dodd-Frank Act. Because some of the Republished Regulations apply to both Federal and state savings associations, the term “AFBA” is used where a provision applies to both types of institutions. We have added the definition of AFBA to part 161.
• References to “the Director of the OTS” or “Director” have been changed to “Comptroller” or “Board of Directors of the FDIC” or “FDIC,” as appropriate. We have added the definition of “Comptroller” and “OCC” to part 161.
• In some cases, references to specific offices within the OTS have been removed and replaced with the names of the corresponding office within the OCC (for example, references to the OTS Office of Enforcement have been changed to reference the OCC's Enforcement and Compliance Division). However, some OTS rules include references to offices that do not correspond easily to the OCC's administrative structure. In those cases, the specific reference has been replaced with “the OCC.” Similar references have been made to the FDIC where appropriate. OCC and FDIC handbooks and other agency publications (which will be amended as appropriate after the transfer date), as well as OCC and FDIC Web sites will provide the specific filing locations.
• In some cases, we have reduced the number of copies of filings to be submitted to the OCC.
• Some OTS regulations include agency addresses and contact information as well as addresses of third parties. Because office addresses frequently are subject to change as a result of moves and reassignments, the OCC generally has chosen not to include specific addresses in its regulations governing national banks, and has made similar changes in the Republished Regulations. Updated contact information for these entities will continue to be available on the OCC's Web site or in other agency publications, or by contacting the specified third parties.
• Cross-references in the Republished Rules have been changed to reference the new OCC CFR numbers in Chapter I. For example, a reference to 12 CFR 550.80 has been changed to reference the new section 12 CFR 150.80 in the Republished Regulations. Cross-references also have been updated to reference OCC rules, or relevant rules issued by the FDIC or the Board.
In addition to the changes described above, the OCC has made other notable changes to sections of the Republished Regulations to implement provisions of the Dodd-Frank Act or to delete obsolete references.
•
•
•
•
•
•
•
•
•
This interim final rule is effective on July 21, 2011. Pursuant to the Administrative Procedure Act (APA), at 5 U.S.C. 553(b)(B), notice and comment are not required prior to the issuance of a final rule if an agency, for good cause, finds that “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”
Section 316(b) of the Dodd-Frank Act provides that all OTS regulations in effect the day before the transfer date shall continue in effect until modified, terminated, set aside, or superseded by the OCC. The interim final rule makes non-substantive, technical changes to the OTS regulations, such as renumbering, changing internal cross-references, replacing appropriate nomenclature, and changing the address for filing applications and notices. The rule also makes a few changes to conform the rules for Federal savings associations to changes in the law affected by the Dodd-Frank Act. Because these regulations are nearly identical to the OTS's rules which savings associations are currently subject to, the new rules do not change or impose additional requirements that necessitate adjustments by these institutions. In addition, codifying former OTS regulations as OCC regulations with nomenclature changes and updated filing addresses will help reduce confusion in the industry. Moreover, the transferring rules in general were originally issued by the OTS following notice and comment rulemaking, as appropriate.
Therefore, the OCC has concluded that advance notice and comment under the APA is unnecessary and not in the public interest.
This interim final rule is effective on July 21, 2011. A final rule may be published with an immediate effective date if an agency finds good cause and publishes such with the final rule.
Section 302 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4802) requires, subject to certain exceptions, that regulations imposing additional reporting, disclosure, or other requirements on insured depository institutions take effect on the first day of the calendar quarter after publication of the final rule. As a general matter this interim final rule does not impose additional reporting, disclosure, or other requirements. However, to the extent that there are any additional reporting, disclosure, or other requirements, because they impose minimal burden on savings associations and because of the need to have final rules in place on he transfer date, the OCC finds good cause not to delay the effectiveness of these rules.
Although notice and comment are not required prior to the effective date of this interim final rule, the OCC invites comments on all aspects of the rule and will revise it if necessary or appropriate in light of the comments received.
The Regulatory Flexibility Act (Pub. L. 96-354, Sept. 19, 1980) (RFA) applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). Pursuant to the APA at 5 U.S.C. 553(b)(B), general notice and an opportunity for public comment are not required prior to the issuance of a final rule when an agency, for good cause, finds that “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” As discussed above, the OCC has determined for good cause that the APA does not require general notice and public comment on this interim final rule and, therefore, we are not publishing a general notice of proposed rulemaking. Thus, the RFA, pursuant 5 U.S.C. 601(2), does not apply to this interim final rule.
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 (2 U.S.C. 1532) (Unfunded Mandates Act), requires that an agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. The OCC has determined that there is no Federal mandate imposed by this rulemaking that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year.
The OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number.
This rule contains information collection requirements under the Paperwork Reduction Act (PRA), which have been previously approved by OMB under the following OMB control numbers, and the PRA burden for which is unchanged by this rule: OMB Control Nos. 1550-0003; 1550-0005 through 1550-0007; 1550-0011 through 1550-0020; 1550-0021, 1550-0025; 1550-0030; 1550-0032; 1550-0035; 1550-0037; 1550-0041; 1550-0047; 1550-0051; 1550-0053; 1550-0056; 1550-0060; 1550-0062; 1550-0066; 1550-0072; 1550-0077 through 1550-0078; 1550-0081; 1550-0088; 1550-0092; 1550-0094 through 1550-0095; 1550-0103 through 1550-0106; 1550-0109 through 1550-0110; 1550-0112 through 1550-0113; 1550-0115; 1550-0117; 1557-0119; 1550-0122; and 1550-0127. The information collection approved under OMB Control No. 1550-0059 will be amended through a non-substantive change. There are no new information collection requirements in this interim final rule.
The following redesignation table is provided for reader reference and shows the relationship of former section numbers within Chapter V to the new section numbers in Chapter I.
Savings associations.
Administrative practice and procedure, Crime, Savings associations.
Administrative practice and procedure, Penalties.
Administrative practice and procedure, Investigations.
Administrative practice and procedure, Reporting and recordkeeping requirements, Savings associations.
Advertising, Aged, Civil rights, Credit, Equal employment opportunity, Fair housing, Individuals with disabilities, Marital status discrimination, Mortgages, Religious discrimination, Reporting and recordkeeping requirements, Savings associations, Sex discrimination, Signs and symbols.
Confidential business information, Freedom of information, Reporting and recordkeeping requirements, Savings associations.
Consumer protection, Insurance, Reporting and recordkeeping requirements, Savings associations.
Savings associations.
Reporting and recordkeeping requirements; Savings associations.
Reporting and recordkeeping requirements, Savings associations.
Consumer protection, Credit, Electronic funds transfers, Investments, Manufactured homes, Mortgages, Reporting and recordkeeping requirements, Savings associations.
Reporting and recordkeeping requirements, Savings associations.
Administrative practice and procedure, Reporting and recordkeeping requirements, Savings associations, Trusts and trustees.
Reporting and recordkeeping requirements, Savings associations, Securities, Trusts and trustees.
Reporting and recordkeeping requirements, Savings associations, Securities.
Accounting, Consumer protection, Electronic funds transfers, Reporting and recordkeeping requirements, Savings associations.
Reporting and recordkeeping requirements, Savings associations.
Reporting and recordkeeping requirements, Savings associations, Subsidiaries.
Consumer protection, Investments, Manufactured homes, Mortgages, Reporting and recordkeeping requirements, Savings associations, Securities.
Administrative practice and procedure, Savings associations.
Accounting, Reporting and recordkeeping requirements, Savings associations.
Accounting, Administrative practice and procedure, Advertising, Conflict of interests, Crime, Currency, Investments, Mortgages, Reporting and recordkeeping requirements, Savings associations, Securities, Surety bonds.
Appraisals, Mortgages, Reporting and recordkeeping requirements, Savings associations.
Administrative practice and procedure, Savings associations.
Capital, Reporting and recordkeeping requirements, Risk, Savings associations.
Consumer protection, Privacy, Reporting and recordkeeping requirements, Savings associations, Security measures.
Savings associations, Securities.
Accounting, Administrative practice and procedure, Bank deposit insurance, Reporting and recordkeeping requirements, Safety and soundness, Savings associations.
Consumer protection, Credit, Fair Credit Reporting Act, Privacy, Reporting and recordkeeping requirements, Savings associations.
Flood insurance, Reporting and recordkeeping requirements, Savings associations.
Administrative practice and procedure, Reporting and recordkeeping requirements, Savings associations, Securities.
Banks, banking, Loan programs-housing and community development, Manufactured homes, Mortgages.
Banks, banking, Loan programs-housing and community development, Mortgages.
Reporting and recordkeeping requirements, Savings associations, Securities.
Accounting, Savings associations, Securities.
Authority delegations (Government agencies), Reporting and recordkeeping requirements, Savings associations, Securities.
Community development, Credit, Investments, Reporting and recordkeeping requirements, Savings associations.
Antitrust, Reporting and recordkeeping requirements, Savings associations.
Reporting and recordkeeping requirements, Savings associations, Securities.
12 U.S.C. 1462a, 1463, 5412(b)(2)(B), 5414(b)(2).
Effective on July 21, 2011, section 312(b)(2)(B) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, 124 Stat. 1376 (2010)) (12 U.S.C. 5412(b)(2)(B)) transferred rulemaking authority of the Office of Thrift Supervision (OTS) relating to all savings associations, both state and Federal to the OCC. The regulations set forth in parts 100 through 197 of this Chapter I applying to Federal savings associations and state savings associations, as those terms are defined in section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)), supersede corresponding regulations set forth in parts 500 through 591 of Chapter V of the Code of Federal Regulations that were applicable to such entities prior to July 21, 2011.
The Comptroller of the Currency may, for good cause and to the extent permitted by statute, waive the applicability of any provision of parts 100 through 197.
12 U.S.C. 1464, 1818, 5412(b)(2)(B).
The rules in this part apply to hearings, which are exempt from the adjudicative provisions of the Administrative Procedure Act, afforded to any officer, director, or other person participating in the conduct of the affairs of a Federal savings association, Federal savings association subsidiary, or affiliate service corporation, where such person has been suspended or removed from office or prohibited from further participation in the conduct of the affairs of one of the aforementioned entities by a Notice or Order served by the OCC upon the grounds set forth in section 8(g) of the Federal Deposit Insurance Act, (12 U.S.C. 1818(g)).
As used in this part—
(a) The term
(b) [Reserved]
(c) The term
(d) The term
(e) The term
(f) The term
(g) The term
(a) The OCC may issue and serve a Notice upon an officer, director, or other person participating in the conduct of the affairs of an association, where the individual is charged in any information, indictment, or complaint with the commission of or participation in a crime involving dishonesty or breach of trust that is punishable by imprisonment for a term exceeding one year under state or Federal law, if the OCC, upon due deliberation, determines that continued service or participation by the individual may pose a threat to the interests of the association's depositors or may threaten to impair public confidence in the association. The Notice shall remain in effect until the information, indictment, or complaint is finally disposed of or until terminated by the OCC.
(b) The OCC may issue and serve an Order upon a subject individual against whom a judgment of conviction, or an agreement to enter a pretrial diversion or other similar program has been rendered, where such judgment is not subject to further appellate review, and the OCC, upon the deliberation, has determined that continued service or participation by the subject individual may pose a threat to the interests of the association's depositors or may threaten to impair public confidence in the association.
(a) The Notice or Order shall set forth the basis and facts in support of the OCC's issuance of such Notice or Order, and shall inform the subject individual of his right to a hearing, in accordance with this part, for the purpose of determining whether the Notice or Order should be continued, terminated, or otherwise modified.
(b) The OCC shall serve a copy of the Notice or Order upon the subject individual and the related association in the manner set forth in § 109.11 of this chapter.
(c) Upon receipt of the Notice or Order, the subject individual shall immediately comply with the requirements thereof.
(a) To obtain a hearing, the subject individual must file two copies of a petition with the OCC within 30 days of being served with the Notice or Order.
(b) The petition filed under this section shall admit or deny specifically each allegation in the Notice or Order, unless the petitioner is without knowledge or information, in which case the petition shall so state and the statement shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When a petitioner intends in good faith to deny only a part of or to qualify an allegation, he shall specify so much of it as is true and shall deny only the remainder.
(c) The petition shall state whether the petitioner is requesting termination or modification of the Notice or Order, and shall state with particularity how the petitioner intends to show that his continued service to or participation in the conduct of the affairs of the association would not, or is not likely to, pose a threat to the interests of the association's depositors or to impair public confidence in the association.
(a) Within 10 days of the filing of a petition for hearing, the OCC shall notify the petitioner of the time and place fixed for hearing, and it shall designate one or more OCC employees to serve as presiding officer.
(b) The hearing shall be scheduled to be held no later than 30 days from the date the petition was filed, unless the time is extended at the request of the petitioner.
(c) A petitioner may appear personally or through counsel, but if represented by counsel, said counsel is required to comply with § 109.6 of this chapter.
(d) A representative(s) of the OCC's Enforcement and Compliance Division also may attend the hearing and participate therein as a party.
(a) Hearings provided by this section are not subject to the adjudicative provisions of the Administrative Procedure Act (5 U.S.C. 554-557). The presiding officer is, however, authorized to exercise all of the powers enumerated in § 109.5 of this chapter.
(b) Witnesses may be presented, within time limits specified by the presiding officer, provided that at least 10 days prior to the hearing date, the party presenting the witnesses furnishes the presiding officer and the opposing party with a list of such witnesses and a summary of the proposed testimony. However, the requirement for furnishing such a witness list and summary of testimony shall not apply to the presentation of rebuttal witnesses. The presiding officer may ask questions of any witness, and each party shall have an opportunity to cross-examine any witness presented by an opposing party.
(c) Upon the request of either the petitioner or a representative of the Enforcement and Compliance Division, the record shall remain open for a period of 5 business days following the hearing, during which time the parties may make any additional submissions for the record. Thereafter, the record shall be closed.
(d) Following the introduction of all evidence, the petitioner and the representative of the Enforcement and Compliance Division shall have an opportunity for oral argument; however, the parties may jointly waive the right to oral argument, and, in lieu thereof, elect to submit written argument.
(e) All oral testimony and oral argument shall be recorded, and transcripts made available to the petitioner upon payment of the cost thereof. A copy of the transcript shall be sent directly to the presiding officer, who shall have authority to correct the record
(f) The parties may, in writing, jointly waive an oral hearing and instead elect a hearing upon a written record in which all evidence and argument would be submitted to the presiding officer in documentary form and statements of individuals would be made by affidavit.
If the subject individual fails to file a petition for a hearing, or fails to appear at a hearing, either in person or by attorney, or fails to submit a written argument where oral argument has been waived pursuant to § 108.7(d) or (f) of this part, the Notice shall remain in effect until the information, indictment, or complaint is finally disposed of and the Order shall remain in effect until terminated by the OCC.
(a) Formal rules of evidence shall not apply to a hearing, but the presiding officer may limit the introduction of irrelevant, immaterial, or unduly repetitious evidence.
(b) All matters officially noticed by the presiding officer shall appear on the record.
The petitioner has the burden of showing, by a preponderance of the evidence, that his or her continued service to or participation in the conduct of the affairs of the association does not, or is not likely to, pose a threat to the interests of the association's depositors or threaten to impair public confidence in the association.
(a) In determining whether the petitioner has shown that his or her continued service to or participation in the conduct of the affairs of the association would not, or is not likely to, pose a threat to the interests of the association's depositors or threaten to impair public confidence in the association, in order to decide whether the Notice or Order should be continued, terminated, or otherwise modified, the OCC will consider:
(1) The nature and extent of the petitioner's participation in the affairs of the association;
(2) The nature of the offense with which the petitioner has been charged;
(3) The extent of the publicity accorded the indictment and trial; and
(4) Such other relevant factors as may be entered on the record.
(b) When considering a request for the termination or modification of a Notice, the OCC will not consider the ultimate guilt or innocence of the petitioner with respect to the criminal charge that is outstanding.
(c) When considering a request for the termination or modification of an Order which has been issued following a final judgment of conviction against a subject individual, the OCC will not collaterally review such final judgment of conviction.
(a) Within 30 days after completion of oral argument or the submission of written argument where oral argument has been waived, the presiding officer shall file with and certify to the OCC for decision the entire record of the hearing, which shall include a recommended decision, the Notice or Order, and all other documents filed in connection with the hearing.
(b) The recommended decision shall contain:
(1) A statement of the issue(s) presented,
(2) A statement of findings and conclusions, and the reasons or basis therefor, on all material issues of fact, law, or discretion presented on the record, and
(3) An appropriate recommendation as to whether the suspension, removal, or prohibition should be continued, modified, or terminated.
(a) Within 30 days after the recommended decision has been certified to the OCC, the OCC shall issue a final decision.
(b) The OCC's final decision shall contain a statement of the basis therefor. The OCC may satisfy this requirement where it adopts the recommended decision of the presiding officer upon finding that the recommended decision satisfies the requirements of § 109.38 of this chapter.
(c) The OCC shall serve upon the petitioner and the representative of the Enforcement and Compliance Division a copy of the OCC's final decision and the related recommended decision.
The provisions of §§ 109.10, 109.11, and 109.12 of this chapter shall apply to proceedings under this part.
5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a, 1468, 1817(j), 1818, 1820(k), 1829(e), 3349, 4717, 5412(b)(2)(B); 15 U.S.C. 78
This subpart prescribes Uniform Rules of practice and procedure with regard to Federal savings associations applicable to adjudicatory proceedings as to which hearings on the record are provided for by the following statutory provisions:
(a) Cease-and-desist proceedings under section 8(b) of the Federal Deposit Insurance Act (FDIA) (12 U.S.C. 1818(b));
(b) Removal and prohibition proceedings under section 8(e) of the FDIA (12 U.S.C. 1818(e));
(c) Change-in-control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) to determine whether the OCC should issue an order to approve or disapprove a person's proposed acquisition of an institution;
(d) Proceedings under section 15C(c)(2) of the Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78o-5), to impose sanctions upon any government securities broker or dealer or upon any person associated or seeking to become associated with a government securities broker or dealer for which the OCC is the appropriate agency.
(e) Assessment of civil money penalties by the OCC against institutions, institution-affiliated parties, and certain other persons for which it is the appropriate agency for any violation of:
(1) Section 5 of the Home Owners' Loan Act (HOLA) or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1464 (d), (s) and (v);
(2) Section 9 of the HOLA or any regulation or order issued thereunder, pursuant to 12 U.S.C. 1467(d);
(3) Section 10 of the HOLA, pursuant to 12 U.S.C. 1467a (i) and (r);
(4) Any provisions of the Change in Bank Control Act, any regulation or order issued thereunder or certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1817(j)(16);
(5) Sections 22(h) and 23 of the Federal Reserve Act, or any regulation issued thereunder or certain unsafe or unsound practices or breaches of fiduciary duty, pursuant to 12 U.S.C. 1468;
(6) Certain provisions of the Exchange Act, pursuant to section 21B of the Exchange Act (15 U.S.C. 78u-2);
(7) Section 1120 of Financial Institutions Reform, Recovery and Enforcement Act of 1989 (12 U.S.C. 3349), or any order or regulation issued thereunder;
(8) The terms of any final or temporary order issued or enforceable pursuant to section 8 of the FDIA or of any written agreement executed by the OCC, the terms of any conditions imposed in writing by the OCC in connection with the grant of an application or request, certain unsafe or unsound practices or breaches of fiduciary duty, or any law or regulation not otherwise provided herein pursuant to 12 U.S.C. 1818(i)(2);
(9) Any provision of law referenced in section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) or any order or regulation issued thereunder; and
(10) Any provision of law referenced in 31 U.S.C. 5321 or any order or regulation issued thereunder;
(f) Remedial action under section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(g));
(g) Proceedings under section 10(k) of the FDIA (12 U.S.C. 1820(k)) to impose penalties on senior examiners for violation of post-employment prohibitions; and
(h) This subpart also applies to all other adjudications required by statute to be determined on the record after opportunity for an agency hearing, unless otherwise specifically provided for in the Local Rules.
(i) [Reserved]
For purposes of this subpart:
(a) Any term in the singular includes the plural, and the plural includes the singular, if such use would be appropriate;
(b) Any use of a masculine, feminine, or neuter gender encompasses all three, if such use would be appropriate;
(c) The term
(d) Unless the context requires otherwise, a party's counsel of record, if any, may, on behalf of that party, take any action required to be taken by the party.
For purposes of this subpart, unless explicitly stated to the contrary:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
The Comptroller may, at any time during the pendency of a proceeding perform, direct the performance of, or waive performance of, any act which could be done or ordered by the administrative law judge.
(a)
(b)
(1) To administer oaths and affirmations;
(2) To issue subpoenas, subpoenas
(3) To receive relevant evidence and to rule upon the admission of evidence and offers of proof;
(4) To take or cause depositions to be taken as authorized by this subpart;
(5) To regulate the course of the hearing and the conduct of the parties and their counsel;
(6) To hold scheduling and/or pre-hearing conferences as set forth in § 109.31 of this subpart;
(7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Comptroller shall have the power to grant any motion to dismiss the proceeding or to decide any other motion that results in a final determination of the merits of the proceeding;
(8) To prepare and present to the Comptroller a recommended decision as provided herein;
(9) To recuse himself or herself by motion made by a party or on his or her own motion;
(10) To establish time, place and manner limitations on the attendance of the public and the media for any public hearing; and
(11) To do all other things necessary and appropriate to discharge the duties of a presiding officer.
(a)
(2)
(3)
(b)
(a)
(b)
(2) If a filing or submission of record is not signed, the administrative law judge shall strike the filing or submission of record, unless it is signed promptly after the omission is called to the attention of the pleader or movant.
(c)
(a)
(b)
(1) That the counsel has personally and fully discussed the possibility of conflicts of interest with each such party and non-party; and
(2) That each such party and non-party waives any right it might otherwise have had to assert any known conflicts of interest or to assert any non-material conflicts of interest during the course of the proceeding.
(a)
(i) An interested person outside the OCC (including such person's counsel); and
(ii) The administrative law judge handling that proceeding, the Comptroller, or a decisional employee.
(2)
(b)
(1) No interested person outside the OCC shall make or knowingly cause to be made an
(2) The Comptroller, administrative law judge, or decisional employee shall not make or knowingly cause to be made to any interested person outside the OCC any
(c)
(d)
(e)
(a)
(b)
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service, overnight delivery service, or to the U.S. Post Office for Express Mail delivery;
(3) Mailing the papers by first class, registered, or certified mail; or
(4) Transmission by electronic media, only if expressly authorized, and upon any conditions specified, by the Comptroller or the administrative law judge. All papers filed by electronic media shall also concurrently be filed in accordance with paragraph (c) of this section as to form.
(c)
(2)
(3)
(4)
(a)
(b)
(1) Personal service;
(2) Delivering the papers to a reliable commercial courier service, overnight delivery service, or to the U.S. Post Office for Express Mail delivery;
(3) Mailing the papers by first class, registered, or certified mail; or
(4) Transmission by electronic media, only if the parties mutually agree. Any papers served by electronic media shall also concurrently be served in accordance with the requirements of § 109.10(c) of this subpart as to form.
(c)
(2) If a party has not appeared in the proceeding in accordance with § 109.6 of this subpart, the Comptroller or the administrative law judge shall make service by any of the following methods:
(i) By personal service;
(ii) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works;
(iii) If the person to be served is a corporation or other association, by delivery to an officer, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the party;
(iv) By registered or certified mail addressed to the person's last known address; or
(v) By any other method reasonably calculated to give actual notice.
(d)
(1) By personal service;
(2) If the person to be served is an individual, by delivery to a person of suitable age and discretion at the physical location where the individual resides or works;
(3) By delivery to an agent, which in the case of a corporation or other association, is delivery to an officer, managing or general agent, or to any other agent authorized by appointment or by law to receive service and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the party;
(4) By registered or certified mail addressed to the person's last known address; or
(5) By any other method reasonably calculated to give actual notice.
(e)
(a)
(b)
(i) In the case of personal service or same day commercial courier delivery, upon actual service;
(ii) In the case of overnight commercial delivery service, U.S. Express mail delivery, or first class, registered, or certified mail, upon deposit in or delivery to an appropriate point of collection; or
(iii) In the case of transmission by electronic media, as specified by the authority receiving the filing, in the case of filing, and as agreed among the parties, in the case of service.
(2) The effective filing and service dates specified in paragraph (b)(1) of this section may be modified by the Comptroller or administrative law judge in the case of filing or by agreement of the parties in the case of service.
(c)
(1) If service is made by first class, registered, or certified mail, add three calendar days to the prescribed period;
(2) If service is made by express mail or overnight delivery service, add one calendar day to the prescribed period; or
(3) If service is made by electronic media transmission, add one calendar day to the prescribed period, unless otherwise determined by the Comptroller or the administrative law judge in the case of filing, or by agreement among the parties in the case of service.
Except as otherwise provided by law, the administrative law judge may, for good cause shown, extend the time limits prescribed by the Uniform Rules or any notice or order issued in the proceedings. After the referral of the case to the Comptroller pursuant to § 109.38 of this subpart, the Comptroller may grant extensions of the time limits for good cause shown. Extensions may be granted at the motion of a party or on the Comptroller's or the administrative law judge's own motion after notice and opportunity to respond is afforded all non-moving parties.
Witnesses subpoenaed for testimony or deposition shall be paid the same fees for attendance and mileage as are paid in the United States district courts in proceedings in which the United States is a party, provided that, in the case of a discovery subpoena addressed to a party, no witness fees or mileage need be paid. Fees for witnesses shall be tendered in advance by the party requesting the subpoena, except that fees and mileage need not be tendered in advance where the OCC is the party requesting the subpoena. The OCC shall not be required to pay any fees to, or expenses of, any witness not subpoenaed by the OCC.
Any respondent may, at any time in the proceeding, unilaterally submit to Enforcement Counsel written offers or proposals for settlement of a proceeding, without prejudice to the rights of any of the parties. No such offer or proposal shall be made to any OCC representative other than Enforcement Counsel. Submission of a written settlement offer does not provide a basis for adjourning or otherwise delaying all or any portion of a proceeding under this part. No settlement offer or proposal, or any subsequent negotiation or resolution, is
Nothing contained in this subpart limits in any manner the right of the OCC to conduct any examination, inspection, or visitation of any institution or institution-affiliated party, or the right of the OCC to conduct or continue any form of investigation authorized by law.
If an interlocutory appeal or collateral attack is brought in any court concerning all or any part of an adjudicatory proceeding, the challenged adjudicatory proceeding shall continue without regard to the pendency of that court proceeding. No default or other failure to act as directed in the adjudicatory proceeding within the times prescribed in this subpart shall be excused based on the pendency before any court of any interlocutory appeal or collateral attack.
(a)
(ii) The notice must be served by the Comptroller upon the respondent and given to any other appropriate financial institution supervisory authority where required by law.
(iii) The notice must be filed with the OFIA.
(2) Change-in control proceedings under section 7(j)(4) of the FDIA (12 U.S.C. 1817(j)(4)) commence with the issuance of an order by the Comptroller.
(b)
(1) The legal authority for the proceeding and for the OCC's jurisdiction over the proceeding;
(2) A statement of the matters of fact or law showing that the OCC is entitled to relief;
(3) A proposed order or prayer for an order granting the requested relief;
(4) The time, place, and nature of the hearing as required by law or regulation;
(5) The time within which to file an answer as required by law or regulation;
(6) The time within which to request a hearing as required by law or regulation; and
(7) The answer and/or request for a hearing shall be filed with OFIA.
(a)
(b)
(c)
(2)
(a)
(b)
Failure of a respondent to appear in person at the hearing or by a duly authorized counsel constitutes a waiver of respondent's right to a hearing and is deemed an admission of the facts as alleged and consent to the relief sought in the notice. Without further proceedings or notice to the respondent, the administrative law judge shall file with the Comptroller a recommended decision containing the findings and the relief sought in the notice.
(a)
(2) In the event of consolidation under paragraph (a)(1) of this section, appropriate adjustment to the prehearing schedule must be made to avoid unnecessary expense, inconvenience, or delay.
(b)
(1) Undue prejudice or injustice to the moving party would result from not severing the proceeding; and
(2) Such undue prejudice or injustice would outweigh the interests of judicial economy and expedition in the complete and final resolution of the proceeding.
(a)
(2) All written motions must state with particularity the relief sought and must be accompanied by a proposed order.
(3) No oral argument may be held on written motions except as otherwise directed by the administrative law judge. Written memoranda, briefs, affidavits or other relevant material or documents may be filed in support of or in opposition to a motion.
(b)
(c)
(d)
(2) The failure of a party to oppose a written motion or an oral motion made on the record is deemed a consent by that party to the entry of an order substantially in the form of the order accompanying the motion.
(e)
(f)
(a)
(2) Discovery by use of deposition is governed by § 109.102 of this part.
(3) Discovery by use of interrogatories is not permitted.
(b)
(c)
(d)
(a)
(b)
(c)
(1) The response was materially incorrect when made; or
(2) The response, though correct when made, is no longer true and a failure to amend the response is, in substance, a knowing concealment.
(d)
(2) The party who served the request that is the subject of a motion to revoke or limit may file a written response within five days of service of the motion. No other party may file a response.
(e)
(f)
(2) The party who asserted the privilege or failed to comply with the request may file a written response to a motion to compel within five days of service of the motion. No other party may file a response.
(g)
(h)
(a)
(2) A party shall only apply for a document subpoena under this section within the time period during which such party could serve a discovery request under § 109.24(d) of this subpart. The party obtaining the document subpoena is responsible for serving it on the subpoenaed person and for serving copies on all parties. Document subpoenas may be served in any state, territory, or possession of the United States, the District of Columbia, or as otherwise provided by law.
(3) The administrative law judge shall promptly issue any document subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she may refuse to issue the subpoena or may issue it in a modified form upon such conditions as may be consistent with the Uniform Rules.
(b)
(2) Any motion to quash or modify a document subpoena must be filed on the same basis, including the assertion of privilege, upon which a party could object to a discovery request under § 109.25(d) of this subpart, and during the same time limits during which such an objection could be filed.
(c)
(a)
(i) The witness will be unable to attend or may be prevented from attending the hearing because of age, sickness or infirmity, or will otherwise be unavailable;
(ii) The witness' unavailability was not procured or caused by the subpoenaing party;
(iii) The testimony is reasonably expected to be material; and
(iv) Taking the deposition will not result in any undue burden to any other party and will not cause undue delay of the proceeding.
(2) The application must contain a proposed deposition subpoena and a brief statement of the reasons for the issuance of the subpoena. The subpoena must name the witness whose deposition is to be taken and specify the time and place for taking the deposition. A deposition subpoena may require the witness to be deposed at any place within the country in which that witness resides or has a regular place of employment or such other convenient place as the administrative law judge shall fix.
(3) Any requested subpoena that sets forth a valid basis for its issuance must be promptly issued, unless the administrative law judge on his or her own motion, requires a written response or requires attendance at a conference concerning whether the requested subpoena should be issued.
(4) The party obtaining a deposition subpoena is responsible for serving it on the witness and for serving copies on all
(b)
(2) A statement of the basis for the motion to quash or modify a subpoena issued under this section must accompany the motion. The motion must be served on all parties.
(c)
(2) Any party may move before the administrative law judge for an order compelling the witness to answer any questions the witness has refused to answer or submit any evidence the witness has refused to submit during the deposition.
(3) The deposition must be subscribed by the witness, unless the parties and the witness, by stipulation, have waived the signing, or the witness is ill, cannot be found, or has refused to sign. If the deposition is not subscribed by the witness, the court reporter taking the deposition shall certify that the transcript is a true and complete transcript of the deposition.
(d)
(a)
(b)
(1) The ruling involves a controlling question of law or policy as to which substantial grounds exist for a difference of opinion;
(2) Immediate review of the ruling may materially advance the ultimate termination of the proceeding;
(3) Subsequent modification of the ruling at the conclusion of the proceeding would be an inadequate remedy; or
(4) Subsequent modification of the ruling would cause unusual delay or expense.
(c)
(d)
(a)
(1) There is no genuine issue as to any material fact; and
(2) The moving party is entitled to a decision in its favor as a matter of law.
(b)
(2) A motion for summary disposition must be accompanied by a statement of the material facts as to which the moving party contends there is no genuine issue. Such motion must be supported by documentary evidence, which may take the form of admissions in pleadings, stipulations, depositions, investigatory depositions, transcripts, affidavits and any other evidentiary materials that the moving party contends support his or her position. The motion must also be accompanied by a brief containing the points and authorities in support of the contention of the moving party. Any party opposing a motion for summary disposition must file a statement setting forth those material facts as to which he or she contends a genuine dispute exists. Such opposition must be supported by evidence of the same type as that submitted with the motion for summary disposition and a brief containing the points and authorities in support of the contention that summary disposition would be inappropriate.
(c)
(d)
If the administrative law judge determines that a party is entitled to
(a)
(b)
(1) Simplification and clarification of the issues;
(2) Stipulations, admissions of fact, and the contents, authenticity and admissibility into evidence of documents;
(3) Matters of which official notice may be taken;
(4) Limitation of the number of witnesses;
(5) Summary disposition of any or all issues;
(6) Resolution of discovery issues or disputes;
(7) Amendments to pleadings; and
(8) Such other matters as may aid in the orderly disposition of the proceeding.
(c)
(d)
(a) Within the time set by the administrative law judge, but in no case later than 14 days before the start of the hearing, each party shall serve on every other party, his or her:
(1) Prehearing statement;
(2) Final list of witnesses to be called to testify at the hearing, including name and address of each witness and a short summary of the expected testimony of each witness;
(3) List of the exhibits to be introduced at the hearing along with a copy of each exhibit; and
(4) Stipulations of fact, if any.
(b)
(a)
(b)
(a)
(2) A party may apply for a hearing subpoena at any time before the commencement of a hearing. During a hearing, a party may make an application for a subpoena orally on the record before the administrative law judge.
(3) The administrative law judge shall promptly issue any hearing subpoena requested pursuant to this section. If the administrative law judge determines that the application does not set forth a valid basis for the issuance of the subpoena, or that any of its terms are unreasonable, oppressive, excessive in scope, or unduly burdensome, he or she may refuse to issue the subpoena or may issue it in a modified form upon any conditions consistent with this subpart. Upon issuance by the administrative law judge, the party making the application shall serve the subpoena on the person named in the subpoena and on each party.
(b)
(2) Any motion to quash or modify a hearing subpoena must be filed prior to the time specified in the subpoena for compliance, but not more than ten days after the date of service of the subpoena upon the movant.
(c)
(a)
(2)
(3)
(4)
(b)
(a)
(2) Evidence that would be admissible under the Federal Rules of Evidence is admissible in a proceeding conducted pursuant to this subpart.
(3) Evidence that would be inadmissible under the Federal Rules of Evidence may not be deemed or ruled to be inadmissible in a proceeding conducted pursuant to this subpart if such evidence is relevant, material, reliable and not unduly repetitive.
(b)
(2) All matters officially noticed by the administrative law judge or Comptroller shall appear on the record.
(3) If official notice is requested or taken of any material fact, the parties, upon timely request, shall be afforded an opportunity to object.
(c)
(2) Subject to the requirements of paragraph (a) of this section, any document, including a report of examination, supervisory activity, inspection or visitation, prepared by the appropriate Federal banking agency, as defined in section 3(q) of the FDIA (12 U.S.C. 1813(q)), or state regulatory agency, is admissible either with or without a sponsoring witness.
(3) Witnesses may use existing or newly created charts, exhibits, calendars, calculations, outlines or other graphic material to summarize, illustrate, or simplify the presentation of testimony. Such materials may, subject to the administrative law judge's discretion, be used with or without being admitted into evidence.
(d)
(2) When an objection to a question or line of questioning propounded to a witness is sustained, the examining counsel may make a specific proffer on the record of what he or she expected to prove by the expected testimony of the witness, either by representation of counsel or by direct interrogation of the witness.
(3) The administrative law judge shall retain rejected exhibits, adequately marked for identification, for the record, and transmit such exhibits to the Comptroller.
(4) Failure to object to admission of evidence or to any ruling constitutes a waiver of the objection.
(e)
(f)
(2) Such deposition transcript is admissible to the same extent that testimony would have been admissible had that person testified at the hearing, provided that if a witness refused to answer proper questions during the depositions, the administrative law judge may, on that basis, limit the admissibility of the deposition in any manner that justice requires.
(3) Only those portions of a deposition received in evidence at the hearing constitute a part of the record.
(a)
(2) Proposed findings and conclusions must be supported by citation to any relevant authorities and by page references to any relevant portions of the record. A post-hearing brief may be filed in support of proposed findings and conclusions, either as part of the same document or in a separate
(b)
(c)
(a)
(b)
(a)
(b)
(2) No exception need be considered by the Comptroller if the party taking exception had an opportunity to raise the same objection, issue, or argument before the administrative law judge and failed to do so.
(c)
(2) All exceptions and briefs in support of exceptions must set forth page or paragraph references to the specific parts of the administrative law judge's recommendations to which exception is taken, the page or paragraph references to those portions of the record relied upon to support each exception, and the legal authority relied upon to support each exception.
(a)
(b)
(c)
(2) The Comptroller shall render a final decision within 90 days after notification of the parties that the case has been submitted for final decision, or 90 days after oral argument, whichever is later, unless the Comptroller orders that the action or any aspect thereof be remanded to the administrative law judge for further proceedings. Copies of the final decision and order of the Comptroller shall be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Comptroller or required by statute, upon any appropriate state or Federal supervisory authority.
The commencement of proceedings for judicial review of a final decision and order of the OCC may not, unless specifically ordered by the Comptroller or a reviewing court, operate as a stay of any order issued by the Comptroller. The Comptroller may, in its discretion, and on such terms as it finds just, stay the effectiveness of all or any part of its order pending a final decision on a petition for review of the order.
The rules and procedures in this subpart B shall apply to those proceedings covered by subpart A of this part. In addition, subpart A of this part and this subpart shall apply to adjudicatory proceedings for which hearings on the record are provided for by the following statutory provisions:
(a) Proceedings under section 10(a)(2)(D) of the HOLA (12 U.S.C. 1467a(a)(2)(D)) to determine whether any person directly or indirectly exercises a controlling influence over the management or policies of a savings association or any other company; and
(b) [Reserved]
(c) Proceedings under section 15(c)(4) of the Securities and Exchange Act of 1934 (15 U.S.C. 78o(c)(4)) (Exchange Act) to determine whether any Federal savings association or person subject to the jurisdiction of the OCC pursuant to section 12(i) of the Exchange Act (15 U.S.C. 78
Unless otherwise directed by the OCC, all hearings under subpart A of this part and this subpart shall be conducted by administrative law judges under the direction of the Office of Financial Institution Adjudication.
(a)
(b)
(c)
(d)
(e)
(1) Is unreasonable, oppressive, excessive in scope, or unduly burdensome;
(2) Involves privileged, investigative, trial preparation, irrelevant or immaterial matters; or
(3) Is being conducted in bad faith or in such manner as to unreasonably annoy, embarrass, or oppress the deponent.
(f)
(g)
(2)
(3)
(4)
(a)
(b)
(2) Checks in payment of civil penalties shall be made payable to the Treasurer of the United States and sent to the OCC. Upon receipt, the OCC shall forward the check to the Treasury of the United States.
(c)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
12 U.S.C. 1462a, 1463, 1464, 1467, 1467a, 1813, 1817(j), 1818(n), 1820(c), 5412(b)(2)(B); 15 U.S.C. 78
This part prescribes rules of practice and procedure applicable to the conduct of formal examination proceedings with respect to Federal savings associations and their affiliates under section 5(d)(1)(B) of the HOLA, as amended, 12 U.S.C. 1464(d)(1)(B) or section 7(j)(15) of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1817(j)(15) (“FDIA”), section 8(n) of the FDIA, 12 U.S.C. 1818(n), or section 10(c) of the FDIA, 12 U.S.C. 1820(c). This part does not apply to adjudicatory proceedings as to which hearings are required by statute, the rules for which are contained in part 109 of this chapter.
As used in this part:
(a)
(b) [Reserved]
(c)
(d)
All formal examination proceedings shall be private and, unless otherwise ordered by the OCC, all investigative proceedings shall also be private. Unless otherwise ordered or permitted by the OCC, or required by law, and except as provided in §§ 112.4 and 112.5, the entire record of any investigative proceeding or formal examination proceeding, including the resolution of the OCC or its delegate(s) authorizing the proceeding, the transcript of such proceeding, and all documents and information obtained by the designated representative(s) during the course of said proceedings shall be confidential.
Transcripts or other recordings, if any, of investigative proceedings or formal examination proceedings shall be prepared solely by an official reporter or by any other person or means authorized by the designated representative. A person who has submitted documentary evidence or given testimony in an investigative proceeding or formal examination proceeding may procure a copy of his own documentary evidence or transcript of his own testimony upon payment of the cost thereof;
(a) Any person who is compelled or requested to furnish documentary evidence or give testimony at an investigative proceeding or formal examination proceeding shall have the right to examine, upon request, the OCC resolution authorizing such proceeding. Copies of such resolution shall be furnished, for their retention, to such persons only with the written approval of the OCC.
(b) Any witness at an investigative proceeding or formal examination proceeding may be accompanied and advised by an attorney personally representing that witness.
(1) Such attorney shall be a member in good standing of the bar of the highest court of any state, Commonwealth, possession, territory, or the District of Columbia, who has not been suspended or debarred from practice by the bar of any such political entity or before the OCC in accordance with the provisions of part 19 of this chapter and has not been excluded from the particular investigative proceeding or formal examination proceeding in accordance with paragraph (b)(3) of this section.
(2) Such attorney may advise the witness before, during, and after the taking of his testimony and may briefly question the witness, on the record, at the conclusion of his testimony, for the sole purpose of clarifying any of the answers the witness has given. During the taking of the testimony of a witness, such attorney may make summary notes solely for his use in representing his client. All witnesses shall be sequestered, and, unless permitted in the discretion of the designated representative, no witness or accompanying attorney may be permitted to be present during the taking of testimony of any other witness called in such proceeding. Neither attorney(s) for the association(s) that are the subjects of the investigative proceedings or formal examination proceedings, nor attorneys for any other interested persons, shall have any right to be present during the testimony of any witness not personally being represented by such attorney.
(3) The OCC, for good cause, may exclude a particular attorney from further participation in any investigation in which the OCC has found the attorney to have engaged in dilatory, obstructionist, egregious, contemptuous or contumacious conduct. The person conducting an investigation may report to the OCC instances of apparently dilatory, obstructionist, egregious, contemptuous or contumacious conduct on the part of an attorney. After due notice to the attorney, the OCC may take such action as the circumstances warrant based upon a written record evidencing the conduct of the attorney in that investigation or such other or additional written or oral presentation as the OCC may permit or direct.
The designated representative shall report to the Comptroller any instances where any witness or counsel has engaged in dilatory, obstructionist, or contumacious conduct or has otherwise violated any provision of this part during the course of an investigative proceeding or formal examination proceeding; and the OCC may take such action as the circumstances warrant, including the exclusion of counsel from further participation in such proceeding.
(a)
(1)
(2)
(b)
(1) Deny the application;
(2) Quash or revoke the subpoena;
(3) Modify the subpoena; or
(4) Condition the granting of the application on such terms as the Deputy
(c)
(d)
5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464, 2901
(a) This part explains OCC procedures for processing applications, notices, or filings (applications) for Federal savings associations. Except as provided in paragraph (b) of this section, subparts A and E of this part apply whenever an OCC regulation requires any person (you) to file an application pertaining to a Federal savings association with the OCC. Subparts B, C, and D, however, only apply when an OCC regulation incorporates the procedures in the subpart or where otherwise required by the OCC.
(b) This part does not apply to any of the following:
(1) An application related to a transaction under section 13(c) or (k) of the Federal Deposit Insurance Act, 12 U.S.C. 1823(c) or (k).
(2) A request for reconsideration, modification, or appeal of a final OCC or OTS action.
(3) A request related to litigation, an enforcement proceeding, a supervisory directive or supervisory agreement. Such requests include a request seeking approval under, modification of, or termination of an order issued under part 108 or 109 of this chapter, a supervisory agreement, a supervisory directive, a consent merger agreement or a document negotiated in settlement of an enforcement matter or other litigation, unless an applicable OCC regulation specifically requires an application under this part.
(4) An application filed under an OCC regulation that prescribes other application processing procedures and time frames for the approval of applications.
(c) If an OCC regulation for a specific type of application prescribes some application processing procedures, or time frames, the OCC will apply this part to the extent necessary to process the application. For example, if an OCC regulation for a specific type of application does not identify time periods for the processing of an application, the time periods in this part apply.
The OCC processes applications under this part using two procedures, expedited treatment and standard treatment. To determine which treatment applies, you may use the following chart:
In computing time periods under this part, the OCC does not include the day of the act or event that commences the time period. When the last day of a time period is a Saturday, Sunday, or Federal holiday, the time period runs until the end of the next day that is not a Saturday, Sunday, or Federal holiday.
(a)
(b)
(2) All other applicants are encouraged to contact the appropriate OCC licensing office to determine whether a pre-filing meeting or the submission of a draft business plan or other relevant information would expedite the application review process.
If you must submit a draft business plan under § 116.15, your plan must:
(a) Clearly and completely describe the savings association's projected operations and activities;
(b) Describe the risks associated with the transaction and the impact of this transaction on any existing activities and operations of the savings association, including financial projections for a minimum of three years;
(c) Identify the majority of the proposed board of directors and the key senior executive officers (as defined in § 163.555 of this chapter) of the savings association and demonstrate that these individuals have the expertise to prudently manage the activities and operations described in the savings association's draft business plan; and
(d) Demonstrate how applicable requirements regarding serving the credit and lending needs in the market areas served by the savings association will be met.
(a)
(b)
(c)
(1) Describing the requirement to be waived and
(2) Explaining why the information is not needed to enable the OCC to evaluate your notice or application under applicable standards.
(a)
(b)
(a)
(b)
(2) The OCC will not treat as confidential the portion of your application describing how you plan to meet your Community Reinvestment Act (CRA) objectives. The OCC will make information in your CRA plan, including any information incorporated by reference from other parts of your application, available to the public upon request.
(c)
(a)
(2) The addresses of appropriate OCC licensing offices and the states covered by each office are listed in 12 CFR 4.5.
(b)
(2)(i) You may obtain a list of applications involving significant issues of law or policy at the OCC website at
(ii) The OCC reserves the right to identify significant issues of law or policy in a particular application. The OCC will advise you, in writing, if it makes this determination.
(a) Your application's filing date is the date that you complete all of the following requirements.
(1) You attend a pre-filing meeting and submit a draft business plan or relevant information, if the OCC requires you to do so under § 116.15.
(2) You file your application and all required copies with the OCC, as described under § 116.40.
(i) If you are required to file with an OCC licensing office and with OCC headquarters, you have not filed with the OCC until you file with both offices.
(ii) You have not filed with an OCC licensing office or with OCC headquarters until you file the application and the required number of copies with that office.
(iii) If you file after the close of business established by an OCC licensing office or OCC headquarters, you have filed with that office on the next business day.
(3) You pay the applicable fee. You have not paid the fee until you submit the fee to the appropriate OCC licensing office, or the OCC waives the fee. You may pay by check, money order, cashier's check or wire transfer payable to the OCC.
(b) The OCC may notify you that it has adjusted your application filing date if you fail to meet any applicable publication requirements.
(c) If, after you properly file your application with the appropriate OCC licensing office, the OCC determines that a significant issue of law or policy exists under § 116.40(b)(2)(ii), the filing date of your application is the day you filed with the appropriate OCC licensing office. The 30-day review period under §§ 116.200 or 116.210 of this part will restart in its entirety when the OCC licensing office forwards the appropriate number of copies of your application to OCC headquarters.
To amend or supplement your application, you must file the amendment or supplemental information at the appropriate OCC office(s) along with the number of copies required under § 116.40. Your amendment or supplemental information also must meet the caption and exhibit requirements at § 116.30(b).
This subpart applies whenever an OCC regulation requires an applicant (“you”) to follow the public notice procedures in this subpart.
Your public notice must include the following:
(a) Your name and address.
(b) The type of application.
(c) The name of the depository institution(s) that is the subject matter of the application.
(d) A statement indicating that the public may submit comments to the appropriate OCC licensing office(s).
(e) The address of the appropriate OCC offices where the public may submit comments.
(f) The date that the comment period closes.
(g) A statement indicating that the nonconfidential portions of the application are on file with the OCC, and are available for public inspection during regular business hours.
(h) Any other information that the OCC requires you to publish.
You must publish a public notice of the application no earlier than seven days before and no later than the date of filing of the application.
You must publish the notice in a newspaper having a general circulation in the communities indicated in the following chart:
(a)
(b)
This subpart contains the procedures governing the submission of public comments on certain types of applications or notices (“applications”) pending before the OCC. It applies whenever a regulation incorporates the procedures in this subpart, or where otherwise required by the OCC.
Any person may submit a written comment supporting or opposing an application.
(a) A comment should recite relevant facts, including any demographic, economic, or financial data, supporting the commenter's position. A comment opposing an application should also:
(1) Address at least one of the reasons why the OCC may deny the application under the relevant statute or regulation;
(2) Recite any relevant facts and supporting data addressing these reasons; and
(3) Address how the approval of the application could harm the commenter or any community.
(b) A commenter must include any request for a meeting under § 116.170 in its comment. The commenter must describe the nature of the issues or facts to be discussed and the reasons why written submissions are insufficient to adequately address these facts or issues.
A commenter must file with the appropriate OCC licensing office (
(a)
(b)
This subpart contains meeting procedures. It applies whenever a regulation incorporates the procedures in this subpart, or when otherwise required by the OCC.
(a) The OCC will grant a meeting request or conduct a meeting on its own initiative, if it finds that written submissions are insufficient to address facts or issues raised in an application, or otherwise determines that a meeting will benefit the decision-making process. The OCC may limit the issues considered at the meeting to issues that the OCC decides are relevant or material.
(b) The OCC will inform the applicant and all commenters requesting a meeting of its decision to grant or deny a meeting request, or of its decision to conduct a meeting on its own initiative.
(c) If the OCC decides to conduct a meeting, the OCC will invite the applicant and any commenters requesting a meeting and raising an issue that the OCC intends to consider at the meeting. The OCC may also invite other interested persons to attend. The OCC will inform the participants of the date, time, location, issues to be considered, and format for the meeting a reasonable time before the meeting.
(a) The OCC may conduct meetings in any format including, but not limited to, a telephone conference, a face-to-face meeting, or a more formal meeting.
(b) The Administrative Procedure Act (5 U.S.C. 551
The OCC will not approve or deny an application at a meeting under this subpart.
If the OCC decides to conduct a meeting, it may suspend applicable application processing time frames, including the time frames for deeming an application complete and the applicable approval time frames in subpart E of this part. If the OCC suspends applicable application processing time frames, the time period will resume when the OCC determines that a record has been developed that sufficiently supports a determination on the issues considered at the meeting.
If you are eligible for expedited treatment and you have appropriately filed your notice with the OCC, you may engage in the proposed activities upon the expiration of 30 days after the filing date of your notice, unless the OCC takes one of the following actions before the expiration of that time period:
(a) The OCC notifies you in writing that you must file additional information supplementing your notice. If you are required to file additional information, you may engage in the proposed activities upon the expiration of 30 calendar days after the date you file the additional information, unless the OCC takes one of the actions described in paragraphs (b) through (d) of this section before the expiration of that time period;
(b) The OCC notifies you in writing that your notice is subject to standard treatment under this subpart. The OCC will subject your notice to standard treatment if it raises a supervisory concern, raises a significant issue of law or policy, or requires significant additional information;
(c) The OCC notifies you in writing that it is suspending the applicable time frames under § 116.190; or
(d) The OCC notifies you that it disapproves your notice.
(a)
(b)
(a) You may use the following chart to determine the procedure that applies to your submission of additional information under § 116.210(a)(1):
(b) The OCC may extend the 15-day period referenced in paragraph (a)(1) of this section by up to 15 calendar days, if the OCC requires the additional time to review your response. The OCC will notify you that it has extended the period before the end of the initial 15-day period and will briefly explain why the extension is necessary.
(c) If your response filed under paragraph (a)(1) of this section includes a request for a waiver of an informational requirement, your request for a waiver is granted if the OCC fails to act on it within 15 calendar days after the filing of your response, unless the OCC extends the review period under paragraph (b). If the OCC extends the review period under paragraph (b), your request is granted if the OCC fails to act on it by the end of the extended review period.
(a)
(b)
After your application is deemed complete, but before the end of the applicable review period,
(a) The OCC may require you to provide additional information if the information is necessary to resolve or clarify the issues presented by your application.
(b) The OCC may determine that a major issue of law or a change in circumstances arose after you filed your application, and that the issue or changed circumstances will substantially effect your application. If the OCC identifies such an issue or changed circumstances, it may:
(1) Notify you, in writing, that your application is now incomplete and require you to submit additional information to complete the application under the procedures described at § 116.220; and
(2) Require you to publish a new public notice of your application under § 116.250.
(a) If your application was subject to a publication requirement, the OCC may require you to publish a new public notice of your application if:
(1) You submitted a revision to the application, you submitted new or additional information, or a major issue of law or a change in circumstances arose after the filing of your application; and
(2) The OCC determines that additional comment on these matters is appropriate because of the significance of the new information or circumstances.
(b) The OCC will notify you in writing if you must publish a new public notice of your revised application.
(c) If you are required to publish a new public notice of your revised application, you must notify the OCC after you publish the new public notice.
(a)
(1) The OCC, another governmental entity, or a self-regulatory trade or professional organization initiates an investigation, examination, or administrative proceeding that is relevant to the OCC's evaluation of your application;
(2) You request the suspension or there are other extraordinary circumstances that have a significant impact on the processing of your application.
(b)
(a)
(b)
(c)
(2) The OCC may also extend the review period as needed until it acts on the application, if the application presents a significant issue of law or policy that requires additional time to resolve. The OCC must notify you in writing of the extension and the general reasons for the extension. The OCC must issue the written extension before the end of the review period, including any extension of that period under paragraph (c)(1) of this section. This section applies to notices filed under § 174 of this chapter.
(a)
(2) The OCC will promptly notify you in writing of its decision to approve or deny your application.
(b)
If the OCC has not approved or denied your pending application within two calendar years after the filing date under § 116.45, the OCC will notify you, in writing, that your application is deemed withdrawn unless the OCC determines that you are actively pursuing a final OCC determination on your application. You are not actively pursuing a final OCC determination if you have failed to timely take an action required under this part, including filing required additional information, or the OCC has suspended processing of your application under § 116.260 based on circumstances that are, in whole or in part, within your control and you have failed to take reasonable steps to resolve these circumstances.
12 U.S.C. 1464, 5412(b)(2)(B).
As used in this part 128—
(a)
(b)
(c)
(a) No savings association may deny a loan or other service, or discriminate in the purchase of loans or securities or discriminate in fixing the amount, interest rate, duration, application procedures, collection or enforcement procedures, or other terms or conditions of such loan or other service on the basis of the age or location of the dwelling, or on the basis of the race, color, religion, sex, handicap, familial status (having one or more children under the age of 18), marital status, age (provided the person has the capacity to contract) or national origin of:
(1) An applicant or joint applicant;
(2) Any person associated with an applicant or joint applicant regarding such loan or other service, or with the purposes of such loan or other service;
(3) The present or prospective owners, lessees, tenants, or occupants of the dwelling(s) for which such loan or other service is to be made or given;
(4) The present or prospective owners, lessees, tenants, or occupants of other dwellings in the vicinity of the dwelling(s) for which such loan or other service is to be made or given.
(b) A savings association shall consider without prejudice the combined income of joint applicants for a loan or other service.
(c) No savings association may discriminate against an applicant for a loan or other service on any prohibited basis (as defined in 12 CFR 202.2(z) and 24 CFR part 100).
Note to § 128.2:
(a) No savings association may discourage, or refuse to allow, receive, or consider, any application, request, or inquiry regarding a loan or other service, or discriminate in imposing conditions upon, or in processing, any such application, request, or inquiry on the basis of the age or location of the dwelling, or on the basis of the race, color, religion, sex, handicap, familial status (having one or more children under the age of 18), marital status, age (provided the person has the capacity to contract), national origin, or other characteristics prohibited from consideration in § 128.2(c) of this part, of the prospective borrower or other person, who:
(1) Makes application for any such loan or other service;
(2) Requests forms or papers to be used to make application for any such loan or other service; or
(3) Inquires about the availability of such loan or other service.
(b) A savings association shall inform each inquirer of his or her right to file a written loan application, and to receive a copy of the association's underwriting standards.
No savings association may directly or indirectly engage in any form of advertising that implies or suggests a policy of discrimination or exclusion in violation of title VIII of the Civil Rights Acts of 1968, the Equal Credit Opportunity Act, or this part 128. Advertisements for any loan for the purpose of purchasing, constructing, improving, repairing, or maintaining a dwelling or any loan secured by a dwelling shall include a facsimile of the following logotype and legend:
(a) Each savings association shall post and maintain one or more Equal Housing Lender Posters, the text of which is prescribed in paragraph (b) of this section, in the lobby of each of its offices in a prominent place or places readily apparent to all persons seeking loans. The poster shall be at least 11 by 14 inches in size, and the text shall be easily legible. It is recommended that savings associations post a Spanish language version of the poster in offices serving areas with a substantial Spanish-speaking population.
(b) The text of the Equal Housing Lender Poster shall be as follows:
We Do Business In Accordance With Federal Fair Lending Laws.
UNDER THE FEDERAL FAIR HOUSING ACT, IT IS ILLEGAL, ON THE BASIS OF RACE, COLOR, NATIONAL ORIGIN, RELIGION, SEX, HANDICAP, OR FAMILIAL STATUS (HAVING CHILDREN UNDER THE AGE OF 18) TO:
[__] Deny a loan for the purpose of purchasing, constructing, improving, repairing or maintaining a dwelling or to deny any loan secured by a dwelling; or
[__] Discriminate in fixing the amount, interest rate, duration, application procedures, or other terms or conditions of such a loan or in appraising property.
IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD:
SEND A COMPLAINT TO:
Assistant Secretary for Fair Housing and Equal Opportunity, Department of Housing and Urban Development, Washington, DC 20410.
For processing under the Federal Fair Housing Act
AND TO:
[Insert contact information for appropriate Federal regulator]
For processing under applicable Regulations.
UNDER THE EQUAL CREDIT OPPORTUNITY ACT, IT IS ILLEGAL TO DISCRIMINATE IN ANY CREDIT TRANSACTION:
[ ] On the basis of race, color, national origin, religion, sex, marital status, or age;
[ ] Because income is from public assistance; or
[ ] Because a right has been exercised under the Consumer Credit Protection Act.
IF YOU BELIEVE YOU HAVE BEEN DISCRIMINATED AGAINST, YOU SHOULD SEND A COMPLAINT TO:
[Insert contact information for appropriate Federal regulator]
Savings associations and other lenders required to file Home Mortgage Disclosure Act Loan Application Registers with the OCC in accordance with 12 CFR part 203 must enter the reason for denial, using the codes provided in 12 CFR part 203, with respect to all loan denials.
(a) No savings association shall, because of an individual's race, color, religion, sex, or national origin:
(1) Fail or refuse to hire such individual;
(2) Discharge such individual;
(3) Otherwise discriminate against such individual with respect to such individual's compensation, promotion, or the terms, conditions, or privileges of such individual's employment; or
(4) Discriminate in admission to, or employment in, any program of apprenticeship, training, or retraining, including on-the-job training.
(b) No savings association shall limit, segregate, or classify its employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect such individual's status as an employee because of such individual's race, color, religion, sex, or national origin.
(c) No savings association shall discriminate against any employee or applicant for employment because such employee or applicant has opposed any employment practice made unlawful by Federal, state, or local law or regulation or because he has in good faith made a charge of such practice or testified, assisted, or participated in any manner in an investigation, proceeding, or hearing of such practice by any lawfully constituted authority.
(d) No savings association shall print or publish or cause to be printed or published any notice or advertisement relating to employment by such savings association indicating any preference, limitation, specification, or discrimination based on race, color, religion, sex, or national origin.
(e) This regulation shall not apply in any case in which the Federal Equal Employment Opportunities law is made inapplicable by the provisions of section 2000e-1 or sections 2000e-2(e) through (j) of title 42, United States Code.
(f) Any violation of the following laws or regulations by a savings association shall be deemed to be a violation of this part 128:
(1) The Equal Employment Opportunity Act, as amended, 42 U.S.C. 2000e-2000h-2, and Equal Employment Opportunity Commission (EEOC) regulations at 29 CFR part 1600;
(2) The Age Discrimination in Employment Act, 29 U.S.C. 621-633, and EEOC and Department of Labor regulations;
(3) Office of Federal Contract Compliance Programs (OFCCP) regulations at 41 CFR part 60;
(4) The Veterans Employment and Readjustment Act of 1972, 38 U.S.C. 2011-2012, and the Vietnam Era Veterans Readjustment Adjustment Assistance Act of 1974, 38 U.S.C. 2021-2026;
(5) The Rehabilitation Act of 1973, 29 U.S.C. 701
(6) The Immigration and Nationality Act, 8 U.S.C. 1324b, and INS regulations at 8 CFR part 274a.
Complaints alleging violations of the Fair Housing Act by a savings association shall be referred to the Assistant Secretary for Fair Housing and Equal Opportunity, U.S. Department of Housing and Urban Development, Washington, DC 20410 for processing under the Fair Housing Act, and to the appropriate Federal regulator for processing under applicable regulations. Complaints regarding discrimination in employment by a savings association should be referred to the Equal Employment Opportunity Commission, Washington, DC 20506 and a copy, for information only, sent to the appropriate Federal regulator.
(a)
(b)
(c)
(2)
(3)
(4)
(5)
(i) In some instances, past credit difficulties may have resulted from discriminatory practices;
(ii) A policy favoring applicants who previously owned homes may perpetuate prior discrimination;
(iii) A current, stable earnings record may be the most reliable indicator of credit-worthiness, and entitled to more weight than factors such as educational level attained;
(iv) Job or residential changes may indicate upward mobility; and
(v) Preferring applicants who have done business with the lender can perpetuate previous discriminatory policies.
(6)
(7)
(8)
(d)
The policy statement found at 12 CFR 128.9 supplements this part and should be read together with this part. Refer
(a)
(b)
12 U.S.C. 1462a, 1463, 1464, 1831y and 5412(b)(2)(B).
(a)
(1) Make the covered agreement available to the public and the appropriate Federal banking agency; and
(2) File an annual report with the appropriate Federal banking agency concerning the covered agreement.
(b)
(1) Federal savings associations and their subsidiaries;
(2) [Reserved]
(3) Affiliates of Federal savings associations; and
(4) NGEPs that enter into covered agreements with any company listed in paragraphs (b)(1) and (b)(2) of this section.
(c)
(d)
(2) Examples in a paragraph illustrate only the issue described in the paragraph and do not illustrate any other issues that may arise in this part.
(a)
(1) The agreement is in writing.
(2) The parties to the agreement include—
(i) One or more insured depository institutions or affiliates of an insured depository institution; and
(ii) One or more NGEPs.
(3) The agreement provides for the insured depository institution or any affiliate to—
(i) Provide to one or more individuals or entities (whether or not parties to the agreement) cash payments, grants, or other consideration (except loans) that have an aggregate value of more than $10,000 in any calendar year; or
(ii) Make to one or more individuals or entities (whether or not parties to the agreement) loans that have an aggregate principal amount of more than $50,000 in any calendar year.
(4) The agreement is made pursuant to, or in connection with, the fulfillment of the CRA, as defined in § 133.4 of this part.
(5) The agreement is with a NGEP that has had a CRA communication as described in § 133.3 of this part prior to entering into the agreement.
(b)
(2)
(3)
(c)
(1) Any individual loan that is secured by real estate; or
(2) Any specific contract or commitment for a loan or extension of credit to an individual, business, farm, or other entity, or group of such individuals or entities, if—
(i) The funds are loaned at rates that are not substantially below market rates; and
(ii) The loan application or other loan documentation does not indicate that the borrower intends or is authorized to use the borrowed funds to make a loan or extension of credit to one or more third parties.
(d)
(2)
(3)
(4)
(e)
(f)
(a)
(1) Any written or oral comment or testimony provided to a Federal banking agency concerning the adequacy of the performance under the CRA of the insured depository institution, any affiliated insured depository institution, or any CRA affiliate.
(2) Any written comment submitted to the insured depository institution that discusses the adequacy of the performance under the CRA of the institution and must be included in the institution's CRA public file.
(3) Any discussion or other contact with the insured depository institution or any affiliate about—
(i) Providing (or refraining from providing) written or oral comments or testimony to any Federal banking agency concerning the adequacy of the performance under the CRA of the insured depository institution, any affiliated insured depository institution, or any CRA affiliate;
(ii) Providing (or refraining from providing) written comments to the insured depository institution that concern the adequacy of the institution's performance under the CRA and must be included in the institution's CRA public file; or
(iii) The adequacy of the performance under the CRA of the insured depository institution, any affiliated insured depository institution, or any CRA affiliate.
(b)
(2)
(i) More than 3 years before the parties entered into the agreement, in the case of any written communication;
(ii) More than 3 years before the parties entered into the agreement, in the case of any oral communication in which the NGEP discusses providing (or refraining from providing) comments or testimony to a Federal banking agency or written comments that must be included in the institution's CRA public file in connection with a request to, or agreement by, the institution or affiliate to take (or refrain from taking) any action that is in fulfillment of the CRA; or
(iii) More than 1 year before the parties entered into the agreement, in the case of any other oral communication not described in paragraph (b)(2)(ii).
(3)
(ii)
(A) An employee who approves, directs, authorizes, or negotiates the agreement with the NGEP; or
(B) An employee designated with responsibility for compliance with the CRA or executive officer if the employee or executive officer knows that the institution or affiliate is negotiating, intends to negotiate, or has been informed by the NGEP that it expects to request that the institution or affiliate negotiate an agreement with the NGEP.
(iii)
(A) Any testimony provided to a Federal banking agency at a public meeting or hearing;
(B) Any comment submitted to a Federal banking agency that is conveyed in writing by the agency to the insured depository institution or affiliate; and
(C) Any written comment submitted to the insured depository institution that must be and is included in the institution's CRA public file.
(4)
(i) A director, employee, or member of the NGEP who approves, directs, authorizes, or negotiates the agreement with the insured depository institution or affiliate;
(ii) A person who functions as an executive officer of the NGEP and who knows that the NGEP is negotiating or intends to negotiate an agreement with the insured depository institution or affiliate; or
(iii) Where the NGEP is an individual, the NGEP.
(c)
(i)
(ii)
(iii)
(iv)
(2)
(i)
(ii)
(iii)
(iv)
(v)
(d)
(i) The NGEP has not had a CRA communication; and
(ii) No representative of the NGEP identified in paragraph (b)(4) of this section has knowledge at the time of the agreement that another NGEP that is a party to the agreement has had a CRA communication.
(2) An insured depository institution or affiliate that is a party to a covered agreement that involves multiple insured depository institutions or affiliates is not required to comply with the requirements in §§ 133.6 and 133.7 if—
(i) No NGEP that is a party to the agreement has had a CRA communication concerning the insured depository institution or any affiliate; and
(ii) No representative of the insured depository institution or any affiliate identified in paragraph (b)(3) of this section has knowledge at the time of the agreement that an NGEP that is a party to the agreement has had a CRA communication concerning any other insured depository institution or affiliate that is a party to the agreement.
(a)
(1)
(2)
(i) Home-purchase, home-improvement, small business, small farm, community development, and consumer lending, as described in § 195.22 of this chapter, including loan purchases, loan commitments, and letters of credit;
(ii) Making investments, deposits, or grants, or acquiring membership shares, that have as their primary purpose community development, as described in § 195.23 of this chapter;
(iii) Delivering retail banking services, as described in § 195.24(d) of this chapter;
(iv) Providing community development services, as described in § 195.24(e) of this chapter;
(v) In the case of a wholesale or limited-purpose insured depository institution, community development lending, including originating and purchasing loans and making loan commitments and letters of credit, making qualified investments, or providing community development services, as described in § 195.25(c) of this chapter;
(vi) In the case of a small insured depository institution, any lending or other activity described in § 195.26(a) of this chapter; or
(vii) In the case of an insured depository institution that is evaluated on the basis of a strategic plan, any element of the strategic plan, as described in § 195.27(f) of this chapter.
(b)
The following rules must be applied in determining whether an agreement is a covered agreement under § 133.2 of this part.
(a)
(1) Are entered into with the same NGEP;
(2) Were entered into within the same 12-month period; and
(3) Are each in fulfillment of the CRA.
(b)
(a)
(b)
(2)
(3)
(i) The names and addresses of the parties to the agreement;
(ii) The amount of any payments, fees, loans, or other consideration to be made or provided by any party to the agreement;
(iii) Any description of how the funds or other resources provided under the agreement are to be used;
(iv) The term of the agreement (if the agreement establishes a term); and
(v) Any other information that the relevant supervisory agency determines is not properly exempt from public disclosure.
(4)
(5)
(6)
(7)
(c)
(i) A complete copy of the agreement; and
(ii) In the event the NGEP proposes the withholding of any information contained in the agreement in accordance with paragraph (b)(2) of this section, a public version of the agreement that excludes such information and an explanation justifying the exclusions. Any public version must include the information described in paragraph (b)(3) of this section.
(2) The obligation to provide a covered agreement to the relevant supervisory agency terminates 12 months after the end of the term of the covered agreement.
(d)
(i)(A) A complete copy of each covered agreement entered into by the insured depository institution or affiliate during the calendar quarter; and
(B) In the event the institution or affiliate proposes the withholding of any information contained in the agreement in accordance with paragraph (b)(2) of this section, a public version of the agreement that excludes such information (other than any information described in paragraph (b)(3) of this section) and an explanation justifying the exclusions; or
(ii) A list of all covered agreements entered into by the insured depository institution or affiliate during the calendar quarter that contains—
(A) The name and address of each insured depository institution or affiliate that is a party to the agreement;
(B) The name and address of each NGEP that is a party to the agreement;
(C) The date the agreement was entered into;
(D) The estimated total value of all payments, fees, loans and other consideration to be provided by the institution or any affiliate of the institution under the agreement; and
(E) The date the agreement terminates.
(2)
(ii) The obligation of an insured depository institution or affiliate to provide a covered agreement to the relevant supervisory agency under this paragraph (d)(2) terminates 36 months after the end of the term of the covered agreement.
(3)
(a)
(b)
(c)
(2)
(i) Provides or receives any payments, fees, or loans under the covered agreement that must be reported under paragraphs (e)(1)(iii) and (e)(1)(iv) of this section; or
(ii) Has data to report on loans, investments, and services provided by a party to the covered agreement under the covered agreement under paragraph (e)(1)(vi) of this section.
(d)
(i) The name and mailing address of the NGEP filing the report;
(ii) Information sufficient to identify the covered agreement for which the annual report is being filed, such as by providing the names of the parties to the agreement and the date the agreement was entered into or by providing a copy of the agreement;
(iii) The amount of funds or resources received under the covered agreement during the fiscal year; and
(iv) A detailed, itemized list of how the funds or resources received by the NGEP under the covered agreement were used during the fiscal year, including the total amount used for—
(A) Compensation of officers, directors, and employees;
(B) Administrative expenses;
(C) Travel expenses;
(D) Entertainment expenses;
(E) Payment of consulting and professional fees; and
(F) Other expenses and uses (specify expense or use).
(2)
(A) A brief description of each specific purpose for which the funds or other resources were used; and
(B) The amount of funds or resources used during the fiscal year for each specific purpose.
(ii)
(3)
(4)
(5)
(ii)
(iii)
(iv)
(e)
(i) The name and principal place of business of the insured depository institution or affiliate filing the report;
(ii) Information sufficient to identify the covered agreement for which the annual report is being filed, such as by providing the names of the parties to the agreement and the date the agreement was entered into or by providing a copy of the agreement;
(iii) The aggregate amount of payments, aggregate amount of fees, and aggregate amount of loans provided by the insured depository institution or affiliate under the covered agreement to any other party to the agreement during the fiscal year;
(iv) The aggregate amount of payments, aggregate amount of fees, and aggregate amount of loans received by the insured depository institution or affiliate under the covered agreement from any other party to the agreement during the fiscal year;
(v) A general description of the terms and conditions of any payments, fees, or loans reported under paragraphs (e)(1)(iii) and (e)(1)(iv) of this section, or, in the event such terms and conditions are set forth—
(A) In the covered agreement, a statement identifying the covered agreement and the date the agreement (or a list identifying the agreement) was filed with the relevant supervisory agency; or
(B) In a previous annual report filed by the insured depository institution or affiliate, a statement identifying the date the report was filed with the relevant supervisory agency; and
(vi) The aggregate amount and number of loans, aggregate amount and number of investments, and aggregate amount of services provided under the covered agreement to any individual or entity not a party to the agreement—
(A) By the insured depository institution or affiliate during its fiscal year; and
(B) By any other party to the agreement, unless such information is not known to the insured depository institution or affiliate filing the report or such information is or will be contained in the annual report filed by another party under this section.
(2)
(ii)
(iii)
(f)
(2)
(A) A copy of the NGEP's annual report required under paragraph (d) of this section for the fiscal year; and
(B) Written instructions that the insured depository institution or affiliate promptly forward the annual report to the relevant supervisory agency or agencies on behalf of the NGEP.
(ii) An insured depository institution or affiliate that receives an annual report from a NGEP pursuant to paragraph (f)(2)(i) of this section must file the report with the relevant supervisory agency or agencies on behalf of the NGEP within 30 days.
The OCC will make covered agreements and annual reports available to the public in accordance with the Freedom of Information Act (5 U.S.C. 552
(a)
(2) If the NGEP does not comply within the time period established by the OCC, the agreement shall thereafter be unenforceable by that NGEP by operation of section 48 of the Federal Deposit Insurance Act (12 U.S.C. 1831y).
(3) The OCC may assist any insured depository institution or affiliate that is a party to a covered agreement that is unenforceable by a NGEP by operation of section 48 of the Federal Deposit Insurance Act (12 U.S.C. 1831y) in identifying a successor to assume the NGEP's responsibilities under the agreement.
(b)
(1) Order the individual to disgorge the diverted funds or resources received under the agreement;
(2) Prohibit the individual from being a party to any covered agreement for a period not to exceed 10 years.
(c)
(d)
(e)
(a)
(1) Any company that controls, is controlled by, or is under common control with another company; and
(2) For the purpose of determining whether an agreement is a covered agreement under § 133.2, an
(i) The parties enter into the agreement; and
(ii) The NGEP that is a party to the agreement makes a CRA communication, as described in § 133.3 of this part.
(b)
(c)
(d)
(e)
(f)
(g)
(2) Any NGEP, insured depository institution, or affiliate that has a fiscal year may elect to have the calendar year be its fiscal year for purposes of this part.
(h)
(i)
(2)
(i) The United States government, a state government, a unit of local government (including a county, city, town, township, parish, village, or other general-purpose subdivision of a state) or an Indian tribe or tribal organization established under Federal, state or Indian tribal law (including the Department of Hawaiian Home Lands), or a department, agency, or instrumentality of any such entity;
(ii) A Federally-chartered public corporation that receives Federal funds appropriated specifically for that corporation;
(iii) An insured depository institution or affiliate of an insured depository institution; or
(iv) An officer, director, employee, or representative (acting in his or her capacity as an officer, director, employee, or representative) of an entity listed in paragraphs (i)(2)(i), (i)(2)(ii), or (i)(2)(iii) of this section.
(j)
(k)
(1) Each insured depository institution (or subsidiary thereof) that is a party to the covered agreement;
(2) Each insured depository institution (or subsidiary thereof) or CRA affiliate that makes payments or loans or provides services that are subject to the covered agreement; and
(3) Any company (other than an insured depository institution or subsidiary thereof) that is a party to the covered agreement.
(l)
12 U.S.C. 1462a, 1463, 1464, 1831x, and 5412(b)(2)(B).
(a)
(1) Any Federal savings association; or
(2) Any other person that is engaged in such activities at an office of a Federal savings association or on behalf of a Federal savings association.
(b)
As used in this part:
(1) Attempting to cause or causing or threatening another person physical harm, severe emotional distress, psychological trauma, rape, or sexual assault;
(2) Engaging in a course of conduct or repeatedly committing acts toward another person, including following the person without proper authority, under circumstances that place the person in reasonable fear of bodily injury or physical harm;
(3) Subjecting another person to false imprisonment; or
(4) Attempting to cause or causing damage to property so as to intimidate or attempt to control the behavior of another person.
(1) A Federal savings association, as defined in § 141.11 of this chapter; or
(2) Any other person only when the person sells, solicits, advertises, or offers an insurance product or annuity to a consumer at an office of a Federal savings association, or on behalf of a Federal savings association. For purposes of this definition, activities on behalf of a Federal savings association include activities where a person, whether at an office of the savings association or at another location, sells, solicits, advertises, or offers an insurance product or annuity and at least one of the following applies:
(i) The person represents to a consumer that the sale, solicitation, advertisement, or offer of any insurance product or annuity is by or on behalf of the savings association;
(ii) The savings association refers a consumer to a seller of insurance products and annuities and the savings association has a contractual arrangement to receive commissions or fees derived from a sale of an insurance product or annuity resulting from that referral; or
(iii) Documents evidencing the sale, solicitation, advertising, or offer of an insurance product or annuity identify or refer to the savings association.
(a)
(1) The purchase of an insurance product or annuity from a Federal savings association or any of its affiliates; or
(2) An agreement by the consumer not to obtain, or a prohibition on the consumer from obtaining, an insurance product or annuity from an unaffiliated entity.
(b)
(1) The fact that an insurance product or annuity you or any subsidiary of a Federal savings association sell or offer for sale is not backed by the Federal government or a Federal savings association, or the fact that the insurance product or annuity is not insured by the Federal Deposit Insurance Corporation;
(2) In the case of an insurance product or annuity that involves investment risk, the fact that there is an investment risk, including the potential that principal may be lost and that the product may decline in value; or
(3) In the case of a Federal savings association or subsidiary of a Federal savings association at which insurance products or annuities are sold or offered for sale, the fact that:
(i) The approval of an extension of credit to a consumer by the savings association or subsidiary may not be conditioned on the purchase of an insurance product or annuity by the consumer from the savings association or a subsidiary of a savings association; and
(ii) The consumer is free to purchase the insurance product or annuity from another source.
(c)
(a)
(1) The insurance product or annuity is not a deposit or other obligation of, or guaranteed by, a Federal savings association or an affiliate of a Federal savings association;
(2) The insurance product or annuity is not insured by the Federal Deposit Insurance Corporation (FDIC) or any other agency of the United States, a Federal savings association, or (if applicable) an affiliate of a Federal savings association; and
(3) In the case of an insurance product or annuity that involves an investment risk, there is investment risk associated with the product, including the possible loss of value.
(b)
(1) The consumer's purchase of an insurance product or annuity from the savings association or any of its affiliates; or
(2) The consumer's agreement not to obtain, or a prohibition on the consumer from obtaining, an insurance product or annuity from an unaffiliated entity.
(c)
(2)
(3)
(4)
(ii) You are not required to provide orally any disclosures required by paragraphs (a) or (b) of this section that you provide by electronic media.
(5)
• NOT A DEPOSIT
• NOT FDIC-INSURED
• NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
• NOT GUARANTEED BY THE FEDERAL SAVINGS ASSOCIATION
• MAY GO DOWN IN VALUE
(6)
(A) A plain-language heading to call attention to the disclosures;
(B) A typeface and type size that are easy to read;
(C) Wide margins and ample line spacing;
(D) Boldface or italics for key words; and
(E) Distinctive type size, style, and graphic devices, such as shading or sidebars, when the disclosures are combined with other information.
(ii) You have not provided the disclosures in a meaningful form if you merely state to the consumer that the required disclosures are available in printed material, but do not provide the printed material when required and do not orally disclose the information to the consumer when required.
(iii) With respect to those disclosures made through electronic media for which paper or oral disclosures are not required, the disclosures are not meaningfully provided if the consumer may bypass the visual text of the disclosures before purchasing an insurance product or annuity.
(7)
(i) Obtain an oral acknowledgment of receipt of the disclosures and maintain sufficient documentation to show that the acknowledgment was given; and
(ii) Make reasonable efforts to obtain a written acknowledgment from the consumer.
(d)
(a)
(1) Keep the area where the savings association conducts transactions involving insurance products or annuities physically segregated from areas where retail deposits are routinely accepted from the general public;
(2) Identify the areas where insurance product or annuity sales activities occur; and
(3) Clearly delineate and distinguish those areas from the areas where the savings association's retail deposit-taking activities occur.
(b)
A Federal savings association may not permit any person to sell or offer for sale any insurance product or annuity in any part of the savings association's office or on its behalf, unless the person is at all times appropriately qualified and licensed under applicable state insurance licensing standards with regard to the specific products being sold or recommended.
Any consumer who believes that any Federal savings association or any other person selling, soliciting, advertising, or offering insurance products or annuities to the consumer at an office of the savings association or on behalf of the savings association has violated the requirements of this part should contact the Customer Assistance Group, Office of the Comptroller of the Currency, (800) 613-6743, 1301 McKinney Street, Suite 3710, Houston, Texas 77010-3031.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).
The definitions in this part and in 12 CFR part 161 apply throughout parts 100 through 199 of this chapter, unless another definition is specifically provided.
The term
The term
The term
The term
The term
The term
The term
The term
(a) Containing a permanent structure(s) constituting at least 25 percent of its value; or
(b) Containing improvements which make it usable by a business or industrial enterprise; or
(c) Used, or to be used within a reasonable time, for commercial farming, excluding hobby and vacation property.
The term
The term
The term
The term
The terms
The terms
(a) Homes (including a dwelling unit in a multi-family residential property such as a condominium or a cooperative);
(b) Combinations of homes and business property (
(c) Other real estate used for primarily residential purposes other than a home (but which may include homes);
(d) Combinations of such real estate and business property involving only minor business use (
(e) Farm residences and combinations of farm residences and commercial farm real estate;
(f) Property to be improved by the construction of such structures; or
(g) Leasehold interests in the above real estate.
The term
The term
The term
The term
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901
(a)
(b)
(a)
(b) [Reserved]
(c) [Reserved]
(d)
(2) Promptly after publication, the applicant(s) shall transmit copies of each notice and publisher's affidavit of publication in the same manner as the original filing.
(3) The OCC shall give notice of the application to the state official who supervises savings associations in the state in which the new association is to be located.
(4) Any person may inspect the application and all related communications at the address specified in 12 CFR 4.14(c) during regular business hours, unless such information is exempt from public disclosure.
(e)
(f)
(g)
(i) Whether the applicants are persons of good character and responsibility;
(ii) Whether a necessity exists for such association in the community to be served;
(iii) Whether there is a reasonable probability of the association's usefulness and success;
(iv) Whether the association can be established without undue injury to properly conducted existing local thrift and home financing institutions;
(v) Whether the association will perform a role of providing credit for housing consistent with safe and sound operation of a Federal savings association; and
(vi) Whether the factors set forth in § 143.3 are met, in the case of an application that would result in the formation of a
(2) Approvals of applications will be conditioned on the following:
(i) Receipt by the OCC of written confirmation from the Federal Deposit Insurance Corporation that the accounts of the Federal savings association will be insured by the Federal Deposit Insurance Corporation;
(ii) A minimum amount of capital to be paid into the association's accounts prior to commencing business;
(iii) The submission of a statement that—
(A) The applicants have complied in all respects with the Act and these rules and regulations regarding organization of a Federal savings association;
(B) The applicants have incurred no expense in forming the association
(C) No funds have been collected on account of the association before the OCC's approval;
(D) An organization committee has been created (naming the committee and its officers);
(E) The committee will organize the association and serve as temporary officers of the association until officers are elected by the association's board of directors under § 143.5 of this part; and
(F) No funds will be accepted for deposit by the association until organization has been completed; and
(iv) The satisfaction of any other requirement the OCC may impose.
(h)
(2) Approval of an application for permission to organize an interim Federal savings association shall be conditioned on approval by the OCC of an application to merge the interim Federal savings association and an existing insured stock association or on approval by the OCC of such other transaction which the interim was chartered to facilitate. In evaluating the application, the OCC will consider the purpose for which the association will be organized, the form of any proposed transactions involving the organizing association, the effect of the transactions on existing associations involved in the transactions, and the factors specified in § 143.2(g)(1) to the extent relevant.
(a)
(b)
(2) On a case by case basis, the OCC may, for good cause, approve a
(c)
(i) Lending, leasing and investment activity, including plans for meeting Qualified Thrift Lender requirements;
(ii) Deposit, savings and borrowing activity;
(iii) Interest-rate risk management;
(iv) Internal controls and procedures;
(v) Plans for meeting the credit needs of the proposed
(vi) Projected statements of condition;
(vii) Projected statements of operations; and
(viii) Any other information requested by the OCC.
(2) The business plan shall:
(i) Provide for the continuation or succession of competent management subject to the approval of the OCC;
(ii) Provide that any material change in, or deviation from, the business plan must receive the prior approval of the OCC;
(iii) Demonstrate the
(d)
(2) The
(e)
(f)
Approval by the OCC of the organization of a Federal savings association or the conversion of an
(a)(1)
(2)
(b) First meeting of directors. Upon election, the association's board of directors shall hold a meeting to elect officers of the association as provided by its charter and bylaws and to take any other action necessary to permit operation of the association in accordance with law, the association's charter and bylaws, and these rules and regulations. When such officers have been bonded under § 163.190 of this chapter, they shall immediately collect the sums due on subscriptions to the association's capital.
(c)
(d)
No person may organize a Federal savings association, collect money from others for such purpose, or represent himself or herself as authorized to do so, and no Federal savings association shall transact any business prior to completion of its organization, except as provided in this part.
The preceding sections of this part do not apply to a Federal savings association which is proposed by the Federal Deposit Insurance Corporation under section 11(c) of the Federal Deposit Insurance Act (12 U.S.C. 1821(c)) or section 21A of the Federal Home Loan Bank Act (12 U.S.C. 1441A), or is otherwise chartered by the OCC in connection with an association in default or in danger of default. Incorporation and organization of such associations are complete when the OCC so determines.
(a) With the approval of the OCC, any depository institution, as defined in § 152.13 of this chapter, that is in mutual form, may convert into a Federal mutual savings association, provided that:
(1) The depository institution, upon conversion, will have its deposits insured by the Federal Deposit Insurance Corporation;
(2) The depository institution, in accomplishing the conversion, complies with all applicable state and Federal statutes and regulations, and OCC policies, and obtains all necessary regulatory and member approvals; and
(3) The resulting Federal mutual association conforms, within the time prescribed by the OCC, to the requirements of section 5(c) of the Home Owners' Loan Act.
(b) Recommendations regarding applications for issuance of Federal charters are privileged, confidential and subject to part 4, subpart C of this chapter.
(a)(1)
(2)
(b)
(1) Appropriate reserves and surplus for the Federal savings association;
(2) Satisfaction in full or assumption by the Federal savings association of all creditor obligations of the applicant;
(3) Issuance by the Federal savings association of savings accounts to current holders of withdrawable accounts in an amount equaling the value of such accounts; and
(4) If applicable, issuance of additional savings accounts to current holders of nonwithdrawable capital stock of the applicant in an amount equaling the value of their nonwithdrawable capital stock, including the present value of any preference to which such holders are entitled.
(c)
(1) Compliance by the applicant with all conditions prescribed in the approval;
(2) Receipt by the applicant of approval of the plan of conversion by such vote as may be required by the laws of the applicant's jurisdiction to consider such action;
(3) In the case of a converting association the accounts of which are not insured by the Federal Deposit Insurance Corporation, receipt by the OCC of written confirmation from the Federal Deposit Insurance Corporation that the accounts of the converting association will be insured by the Federal Deposit Insurance Corporation; and
(4) Receipt by the OCC of written confirmation from the appropriate Federal Home Loan Bank of approval of the converting institution's application for Federal Home Loan Bank membership, if the institution is not a member.
Except as provided in § 143.11, after a Federal charter is issued under § 143.9 the association's members shall, after due notice, or upon a valid adjournment of a previous legal meeting, hold a meeting to elect directors and take all other action necessary fully to effect the conversion and operate the association in accordance with law and these rules and regulations. Immediately thereafter the board of directors shall meet, elect officers, and transact any other appropriate business.
(a)
(b)
(c)
(ii) The plan:
(A) Shall set forth the names of those persons who are being proposed for service on the applicant's governing board after conversion to a Federal charter,
(B) Shall show how trustees not elected by the converted bank's membership will be appointed or otherwise selected, and
(C) Shall provide that no trustees may be appointed or elected to terms of more than three years.
(iii) The plan may provide that
(A) After receipt of its Federal charter the bank will be organized by its existing governing board,
(B) Within the first two years following receipt of its Federal charter, the bank's charter may be amended without a membership vote, provided any such amendment is first approved by a two-thirds vote of its board of trustees and is thereafter approved by the OCC, and
(C) The bank's first annua1 membership meeting need not take place until two years after receipt of its Federal charter.
(2) Except to the extent that the OTS prior to July 21, 2011 or by the OCC approves a plan under this paragraph (c) which is inconsistent with other provisions of this section, a Federal mutual savings bank shall in all respects comply with those other provisions.
(a) A Federal savings bank formerly chartered or designated as a mutual savings bank under state law may exercise any authority it was authorized to exercise as a mutual savings bank under state law at the time of its conversion from a state mutual savings bank to a Federal or other state charter. Except to the extent such authority may be exercised by Federal savings associations not enjoying grandfathered rights hereunder, such authority may be exercised only to the degree authorized under state law at the time of such conversion. Unless otherwise determined by the OTS prior to July 21, 2011 or by the OCC an association, in the exercise of grandfathered authority, may continue to follow applicable state laws and regulations in effect at the time of such conversion.
(b) A Federal savings association that acquires, or has acquired, a Federal savings bank by merger or consolidation may itself exercise any grandfathered rights enjoyed by the disappearing institution, whether such rights were obtained directly through conversion or through merger or consolidation. The extent of the grandfathered rights of a Federal savings association that disappeared prior to the effective date of this section shall be determined exclusively pursuant to this section.
(c) This section shall not be construed to prevent the exercise by a Federal savings association enjoying grandfathered rights hereunder of authority that is available under the applicable state law only upon the occurrence of specific preconditions, such as the attainment of a particular future date or specified level of regulatory capital, which have not occurred at the time of conversion from a state mutual savings bank, provided they occur thereafter.
(d) This section shall not be construed to permit the exercise of any particular authority on a more liberal basis than is allowable under the most liberal construction of either state or Federal law or regulation.
The corporate existence of an association converting under this part shall continue in its successor. Each savings or demand accountholder shall receive a savings account or accounts in the converted association equal in amount to the value of accounts held in the former association.
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901
A Federal mutual savings association shall have a charter in the following form, which may include any of the additional provisions set forth in § 144.2 of this part, if such provisions are specifically requested. A charter for a Federal mutual savings bank shall substitute the term “savings bank” for “association.” The term “trustee” may be substituted for the term “director.” Associations adopting this charter with existing borrower members must grandfather those borrower members who were members as of the date of issuance of the new charter by the OCC. Such borrowers shall have one vote for the period of time such borrowings are in existence.
All holders of accounts of the association shall be entitled to equal distribution of assets,
(a)
(1)
(2)
(ii)
(b)
(1)
(2)
(3)
(4)
(c)
Issuance by the OCC of a charter to a Federal mutual savings association within the meaning of § 143.4 of this chapter constitutes the incorporation of that association by the OCC.
(a)
(b) The following requirements are applicable to Federal mutual savings associations:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(i) A list of depositors in or borrowers from such association;
(ii) Their addresses;
(iii) Individual deposit or loan balances or records; or
(iv) Any data from which such information could be reasonably constructed.
(8)
(9)
(10)
(ii) All officers and agents of the association, as between themselves and the association, shall have such authority and perform such duties in the management of the association as may be provided in the bylaws, or as may be determined by resolution of the board of directors not inconsistent with the bylaws. In the absence of any such provision, officers shall have such powers and duties as generally pertain to their respective offices. Any officer may be removed by the board of directors with or without cause, but such removal, other than for cause, shall be without prejudice to the contractual rights, if any, of the person so removed.
(iii) Any indemnification provision must provide that any indemnification is subject to applicable Federal law, rules, and regulations.
(11)
(12)
(i) By resolution, to appoint from among its members and remove an executive committee and one or more other committees, which committee[s] shall have and may exercise all the powers of the board between the meetings or the board; but no such committee shall have the authority of the board to amend the charter or bylaws, adopt a plan of merger, consolidation, dissolution, or provide for the disposition of all or substantially all the property and assets of the association. Such committee shall not operate to relieve the board, or any member thereof, of any responsibility imposed by law;
(ii) To fix the compensation of directors, officers, and employees; and to remove any officer or employee at any time with or without cause;
(iii) To exercise any and all of the powers of the association not expressly reserved by the charter to the members.
(13)
(14)
(15)
(i) Amendments shall be effective:
(A) After approval by a majority vote of the authorized board, or by a majority of the vote cast by the members of the association at a legal meeting; and
(B) After receipt of any applicable regulatory approval.
(ii) When an association fails to meet its quorum requirement, solely due to vacancies on the board, the bylaws may be amended by an affirmative vote of a majority of the sitting board.
(16)
(c)
(A) Render more difficult or discourage a merger, proxy contest, the assumption of control by a mutual account holder of the association, or the removal of incumbent management;
(B) Involve a significant issue of law or policy, including indemnification, conflicts of interest, and limitations on director or officer liability; or
(C) Be inconsistent with the requirements of this section or with applicable laws, rules, regulations, or the association's charter.
(ii) Applications submitted under paragraph (c)(1)(i) of this section are subject to standard treatment processing procedures at part 116, subparts A and E of this chapter.
(iii) For purposes of this paragraph (c), bylaw provisions that adopt the language of the OCC's model or optional bylaws, if adopted without change, and filed with the OCC within 30 days after adoption, are effective upon adoption.
(2)
(3)
(d)
Notwithstanding any subsequent change to its charter or bylaws, the authority of a Federal mutual savings association to engage in any transaction shall be determined only by the association's charter or bylaws then in effect.
A Federal mutual savings association shall make available to its members at all times in its offices a true copy of its charter and bylaws, including any amendments, and shall deliver such a copy to any member on request.
(a)
(b)
(1) The member shall give the Federal mutual savings association a written request to communicate;
(2) If the proposed communication is in connection with a meeting of the Federal savings association's members, the request shall be given at least thirty days before the annual meeting or 10 days before a special meeting;
(3) The request shall contain—
(i) The member's full name and address;
(ii) The nature and extent of the member's interest in the Federal savings association at the time the information is given;
(iii) A copy of the proposed communication; and
(iv) If the communication is in connection with a meeting of the members, the date of the meeting;
(4) The Federal savings association shall reply to the request within either—
(i) Fourteen days;
(ii) Ten days, if the communication is in connection with the annual meeting; or
(iii) Three days, if the communication is in connection with a special meeting;
(5) The reply shall provide either—
(i) The number of the Federal savings association's members and the estimated reasonable cost to the Federal savings association of mailing to them the proposed communication; or
(ii) Notification that the Federal savings association has determined not to mail the communication because it is “improper”, as defined in paragraph (c) of this section;
(6) After receiving the amount of the estimated costs of mailing and sufficient copies of the communication, the Federal savings association shall mail
(i) Within fourteen days;
(ii) Within seven days, if the communication is in connection with the annual meeting;
(iii) As soon as practicable before the meeting, if the communication is in connection with a special meeting; or
(iv) On a later date specified by the member;
(7) If the Federal savings association refuses to mail the proposed communication, it shall return the requesting member's materials together with a written statement of the specific reasons for refusal, and shall simultaneously send to the appropriate OCC licensing office two copies each of the requesting member's materials, the Federal savings association's written statement, and any other relevant material. The materials shall be sent within:
(i) Fourteen days,
(ii) Ten days if the communication is in connection with the annual meeting, or
(iii) Three days, if the communication is in connection with a special meeting, after the Federal savings association receives the request for communication.
(c)
(1) At the time and in the light of the circumstances under which it is made:
(i) Is false or misleading with respect to any material fact; or
(ii) Omits a material fact necessary to make the statements therein not false or misleading, or necessary to correct a statement in an earlier communication on the same subject which has become false or misleading;
(2) Relates to a personal claim or a personal grievance, or is solicitous of personal gain or business advantage by or on behalf of any party;
(3) Relates to any matter, including a general economic, political, racial, religious, social, or similar cause, that is not significantly related to the business of the Federal savings association or is not within the control of the Federal savings association; or
(4) Directly or indirectly and without expressed factual foundation:
(i) Impugns character, integrity, or personal reputation,
(ii) Makes charges concerning improper, illegal, or immoral conduct, or
(iii) Makes statements impugning the stability and soundness of the Federal savings association.
12 U.S.C. 1462a, 1463, 1464, 1828. 5412(b)(2)(B).
A Federal savings association may exercise all authority granted it by the Home Owners' Loan Act of 1933 (“Act”), 12 U.S.C. 1464, as amended, and its charter and bylaws, whether or not implemented specifically by OCC regulations, subject to the limitations and interpretations contained in this part.
(a)
(1)
(2)
(3)
(4) Terms in paragraph (b) of this section have the meanings they have under applicable state law.
(b)
(2) If state law requires as a condition of such deposit or investment that the Federal savings association or its bond or security, or any combination thereof, be surety for or with respect to other deposits or instruments, whether of that depositor or investor or of any other(s), and whether in the Federal savings association or in any other institution(s) having, when the investments or deposits were made, insurance by the Federal Deposit Insurance Corporation, the same shall become, or if the state law is self-executing shall be, such surety.
(c)
A Federal savings association is authorized to transfer, with or without fee, its customers' funds from any account (including a line of credit) of the customer at the Federal savings association or at another financial intermediary to third parties or other accounts of the customer on the customer's order or authorization by any mechanism or device, including cashier's checks, conforming with applicable laws and established commercial practices.
(a) All operations of a Federal savings association (“you”) are subject to direction from the home office.
(b) You must notify the appropriate OCC licensing office if the permanent address of your home office changes, unless you have submitted an application or notice regarding the change under §§ 145.93 and 145.95 of this chapter.
(a)
(b)
(1) Section 5(r) of the HOLA (12 U.S.C. 1464(r));
(2) Section 10(e)(3) of the HOLA (12 U.S.C. 1467a(e)(3)); or
(3) Section 13(k)(4) of the FDIA (12 U.S.C. 1823(k)(4)).
(c)
(a)
(b)
(1)
(2)
(i) A 1000-foot radius of an existing office that is within a Principal City in a Metropolitan Statistical Area (MSA) designated by the U.S. Department of Commerce;
(ii) A one-mile radius of an existing office that is within an MSA, but is not within a Principal City; or
(iii) A two-mile radius of an existing office that is not in an MSA.
(3)
(i) You are eligible for expedited treatment under § 116.5 of this chapter. For the purposes of that section, you must meet the capital requirements under part 167 of this chapter before and immediately after you change the location of your home or branch office or establish a new branch office.
(ii) You published a notice of your intent to change the location of your home or branch office or establish a new branch office. To satisfy this publication requirement, you must follow the procedures in subpart B of part 116 of this chapter except that:
(A) Under § 116.55(d) and (e) of this chapter, your public notice must state that the public may submit comments to you and to the appropriate OCC licensing office, and must provide addresses for you and for the appropriate OCC licensing office where the public may submit comments;
(B) Section 4.14(c) of this chapter, which addresses public inspections of filings with the OCC, does not apply; and
(C) Under § 116.60 of this chapter, you must publish the public notice at least 35 days before you take the proposed action. If you publish a public notice more than 12 months before you take the proposed action, the publication is invalid.
(iii) If you intend to change the location of an existing office, you must post a notice of your intent in a prominent location in the existing office to be relocated. You must post the notice for 30 days from the date of publication of the initial public notice described in paragraph (b)(3)(ii) of this section.
(iv)(A) No person files a comment opposing the proposed action within 30 days after the date of the publication of the proposed notice; or
(B) A person files a comment opposing the proposed action and the OCC determines that the comment raises issues that are not relevant to the approval standards in § 145.95(b) of this chapter or that OCC action in response to the comment is not required.
(4)
(c)
(d)
(e)
(a)
(1)
(ii) If you propose to change the location of an existing office, you must also post a notice of the application in a prominent location in the office to be relocated. You must post the notice for 30 days from the date of publication of the initial public notice.
(2)
(3)
(4)
(b)
(i) You should meet or exceed minimum capital requirements under part 167 of this chapter and should be at least adequately capitalized as described in § 165.4(b)(2) of this
(ii) The OCC will evaluate your record of helping to meet the credit needs of your entire community, including low- and moderate-income neighborhoods, under part 195 of this chapter. The OCC may:
(A) Deny your application or disapprove your notice based upon this evaluation; or
(B) Impose a condition to the approval of your application (or non-objection to your notice) requiring you to improve specific practices and/or aspects of your performance under part 195 of this chapter. In most cases, a commitment to improve will not be sufficient to overcome a seriously deficient record.
(iii) The OCC will review the application or notice under the National Environmental Policy Act (42 U.S.C. 3421
(2) In reviewing your application and notice, the OCC may consider information available from any source, including any comments submitted by interested parties or views expressed by interested parties at meetings with the OCC.
(3) The OCC may approve an amendment to your charter in connection with a home office relocation under this section.
(c)
(2) If you do not open or relocate the proposed office within this time period, you must comply with the application and notice requirements of this section before you may open or relocate the proposed office.
(a)
(1) Servicing, originating, or approving loans and contracts;
(2) Managing or selling real estate owned by the Federal savings association; and
(3) Conducting fiduciary activities or activities ancillary to the association's fiduciary business in compliance with subpart A of part 150 of this chapter.
(b)
(c)
A Federal savings association designated fiscal agent by the Secretary of the Treasury or with OCC approval by another instrumentality of the United States, shall, as such, perform such reasonable duties and exercise only such powers and privileges as the Secretary of the Treasury or such instrumentality may prescribe.
A Federal savings association shall indemnify its directors, officers, and employees in accordance with the following requirements:
(a)
(i)
(ii)
(iii)
(iv)
(2) References in this section to any individual or other person, including any association, shall include legal representatives, successors, and assigns thereof.
(b)
(1) Any amount for which that person becomes liable under a judgment if such action; and
(2) Reasonable costs and expenses, including reasonable attorney's fees, actually paid or incurred by that person in defending or settling such action, or in enforcing his or her rights under this section if he or she attains a favorable judgment in such enforcement action.
(c)
(i) Final judgment on the merits is in his or her favor; or
(ii) In case of:
(A) Settlement,
(B) Final judgment against him or her, or
(C) Final judgment in his or her favor, other than on the merits, if a majority of the disinterested directors of the Federal savings association determine that he or she was acting in good faith within the scope of his or her employment or authority as he or she could reasonably have perceived it under the circumstances and for a purpose he or she could reasonably have believed under the circumstances was in the best interests of the savings association or its members.
(2) However, no indemnification shall be made unless the association gives the OCC at least 60 days' notice of its intention to make such indemnification. Such notice shall state the facts on which the action arose, the terms of any settlement, and any disposition of the action by a court. Such notice, a copy thereof, and a certified copy of the resolution containing the required determination by the board of directors shall be sent to the association's supervisory office, which shall promptly acknowledge receipt thereof. The notice period shall run from the date of such receipt. No such indemnification shall be made if the OCC advises the association in writing, within such notice period, the OCC's objection thereto.
(d)
(e)
(f)
(g) The indemnification provided for in paragraph (b) of this section is subject to and qualified by 12 U.S.C. 1821(k).
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901
The terms used in §§ 146.2 and 146.3 shall have the same meaning as set forth in §§ 152.13(b) and 163.22(g) of this chapter.
(a) A Federal mutual savings association may combine with any depository institution, provided that:
(1) The combination is in compliance with, and receives all approvals required under, any applicable statutes and regulations;
(2) Any resulting Federal savings association meets the requirements for Federal Home Loan Bank membership and insurance of accounts;
(3) Any resulting Federal savings association conforms within the time prescribed by the OCC to the requirements of sections 5(c) and 10(m) of the Home Owners' Loan Act; and
(4) The resulting institution shall be a mutually held savings association, unless:
(i) The transaction involves a supervisory merger;
(ii) The transaction is approved under part 192 of this chapter; or
(iii) The transaction involves a transfer in the context of a mutual holding company reorganization under section 10(o) of the Home Owners' Loan Act.
(b) Each Federal mutual savings association, by a two-thirds vote of its board of directors, shall approve a plan of combination evidenced by a combination agreement. The agreement shall state:
(1) That the combination shall not be effective unless and until the combination receives any necessary approval from the OCC pursuant to § 163.22 (a) or (c), or in the case of a transaction requiring a notice pursuant to § 163.22(c), the notice has been filed, and the appropriate period of time has passed or the OCC has advised the parties that it will not disapprove the transaction;
(2) Which constituent institution is to be the resulting institution;
(3) The name of the resulting institution;
(4) The location of the home office and any other offices of the resulting institution;
(5) The terms and conditions of the combination and the method of effectuation;
(6) Any charter amendments, or the new charter in the combination;
(7) The basis upon which the resulting institution's savings accounts will be issued;
(8) If the Federal mutual savings association is the resulting institution, the number, names, residence addresses, and terms of directors;
(9) The effect upon and assumption of any liquidation account of a disappearing institution by the resulting institution; and
(10) Such other provisions, agreements, or understandings as relate to the combination.
(c) Prior written notification or notice to the appropriate OCC licensing office or prior written approval of the OCC, pursuant to § 163.22 of this chapter, is required for every combination. In the case of applications and notices pursuant to 163.22 (a) or (c), the OCC shall apply the criteria set out in § 163.22 of this chapter and shall impose any conditions it deems necessary or appropriate to ensure compliance with those criteria and the requirements of this chapter.
(d) Where the resulting institution is a Federal mutual savings association, the OCC may approve a temporary increase in the number of directors of the resulting institution provided that the association submits a plan for bringing the board of directors into compliance with the requirements of § 144.1 of this chapter within a reasonable period of time.
(e) Notwithstanding any other provision of this part, the OCC may require that a plan of combination be submitted to the voting members of any of the mutual savings associations that are constituent institutions at a duly called meeting(s), and that the plan, to be effective, be approved by such voting members.
(f) A conservator or receiver for a Federal mutual savings association may combine the association with another insured depository institution without submitting the plan to the association's board of directors or members for their approval.
(g) If a plan of combination provides for a resulting Federal mutual savings association's name or location to be changed, its charter shall be amended accordingly. If the resulting institution is a Federal mutual savings association, the effective date of the combination shall be the date specified in the approval; if the resulting institution is not a Federal savings association, the effective date shall be that prescribed under applicable law. Approval of a merger automatically cancels the Federal charter of a Federal association that is a disappearing institution as of the effective date of merger, and the association shall, on that date, surrender its charter to the OCC.
On the effective date of a merger or consolidation in which the resulting institution is a Federal association, all assets and property of the disappearing institutions shall immediately, without any further act, become the property of the resulting institution to the same extent as they were the property of the disappearing institutions, and the resulting institution shall be a continuation of the entity which absorbed the disappearing institutions. All rights and obligations of the disappearing institutions shall remain unimpaired, and the resulting institution shall, on the effective date of the merger or consolidation, succeed to all those rights and obligations, subject to the Home Owners' Loan Act and other applicable statutes.
(a) A Federal savings association's board of directors may propose a plan for dissolution of the association. The plan may provide for either:
(1) Appointment of the Federal Deposit Insurance Corporation (under section 5 of the Act and section 11 of the Federal Deposit Insurance Act, as amended or section 21A of the Federal Home Loan Bank Act, as amended) as receiver for the purpose of liquidation;
(2) Transfer of all the association's assets to another association or home-financing institution under Federal or state charter either for cash sufficient to pay all obligations of the association and retire all outstanding accounts or in exchange for that association's payment of all the association's outstanding obligations and issuance of share accounts or other evidence of interest to the association's members on a
(3) Dissolution in a manner proposed by the directors which they consider best for all concerned.
(b) The plan, and a statement of reasons for proposing dissolution and for proposing the plan, shall be submitted to the appropriate OCC licensing office for approval. The OCC will approve the plan if the OCC believes dissolution is advisable and the plan best for all concerned, but if the OCC considers the plan inadvisable, the OCC may either make recommendations to the association concerning the plan or disapprove it. When the plan is approved by the association's board of directors and by the OCC, it shall be submitted to the association's members at a duly called meeting and, when approved by a majority of votes cast at that meeting, shall become effective. After dissolution in accordance with the plan, a certificate evidencing dissolution, supported by such evidence as the may require, shall immediately be filed with the OCC. When the OCC receives such evidence satisfactory to the OCC, it will terminate the corporate existence of the dissolved association and the association's charter shall thereby be canceled. A Federal savings association is not required to obtain approval under this section where the Federal savings association transfers all of its assets and liabilities to a bank in a transaction that is subject to § 163.22(b) of this chapter.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).
A Federal savings association (“you”) must conduct its fiduciary operations in accordance with 12 U.S.C. 1464(n) and this part.
Fiduciary powers are the authority that the OCC permits you to exercise under 12 U.S.C. 1464(n).
You are subject to this part if you act in a fiduciary capacity, except as described in subpart E of this part. You act in a fiduciary capacity when you act in any of the following capacities:
(a) Trustee.
(b) Executor.
(c) Administrator.
(d) Registrar of stocks and bonds.
(e) Transfer agent.
(f) Assignee.
(g) Receiver.
(h) Guardian or conservator of the estate of a minor, an incompetent person, an absent person, or a person over whose estate a court has taken jurisdiction, other than under bankruptcy or insolvency laws.
(i) A fiduciary in a relationship established under a state law that is substantially similar to the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act as published by the American Law Institute.
(j) Investment adviser, if you receive a fee for your investment advice.
(k) Any capacity in which you have investment discretion on behalf of another.
(l) Any other similar capacity that the OCC may authorize under 12 U.S.C. 1464(n).
(a)
(b)
A fiduciary account is an account that you administer acting in a fiduciary capacity.
You should refer to the following chart to determine if you must obtain OCC approval or file a notice with the OCC before you exercise fiduciary powers. This chart does not apply to activities that are exempt under subpart E of this part.
You must file an application under part 116, subparts A and E of this chapter.
You must describe the fiduciary powers that you or your affiliate will exercise. You must also include information necessary to enable the OCC to make the determinations described in § 150.100.
The OCC may consider the following factors when reviewing your application:
(a) Your financial condition.
(b) Your capital and whether that capital is sufficient under the circumstances.
(c) Your overall performance.
(d) The fiduciary powers you propose to exercise.
(e) Your proposed supervision of those powers.
(f) The availability of legal counsel.
(g) The needs of the community to be served.
(h) Any other facts or circumstances that the OCC considers proper.
The OCC may approve or deny your application. If your application is approved, the OCC may impose conditions to ensure that the requirements of this part are met.
(a) If you are required to file a notice under § 150.70(c), within ten days after you commence the fiduciary activities in a new state, you must file a written notice that identifies each new state in which you conduct or will conduct fiduciary activities, describe the fiduciary activities that you conduct or will conduct in each new state, and provide sufficient information supporting a conclusion that the activities are permissible in the state.
(b) You must file the notice with the appropriate OCC licensing office.
(a)
(b)
(1) You may market your fiduciary services to, and act as a fiduciary for, customers located in any state, may act as a fiduciary for relationships that include property located in other states, and may act as a testamentary trustee for a testator located in other states.
(2) You may establish or utilize an office in any state to perform activities that are ancillary to your fiduciary business.
(a) The state laws that apply to you by virtue of 12 U.S.C. 1464(n) are the laws of the states in which you conduct fiduciary activities. For each individual state, you may conduct fiduciary activities in the capacity of trustee, executor, administrator, guardian, or in any other fiduciary capacity the state permits for its state banks, trust companies, or other corporations that compete with Federal savings associations in the state.
(b) For each fiduciary relationship, the state referred to in 12 U.S.C. 1464(n) is the state in which you conduct fiduciary activities for that relationship.
(a)
(b)
(1) Registration and licensing;
(2) Recordkeeping;
(3) Advertising and marketing;
(4) The ability of a Federal savings association conducting fiduciary activities to maintain an action or proceeding in state court; and
(5) Fiduciary-related fees.
(c)
(1) Contract and commercial law;
(2) Real property law;
(3) Tort law;
(4) Criminal law;
(5) Probate law; and
(6) Any other law that the OCC, upon review, finds:
(i) Furthers a vital state interest; and
(ii) Either has only an incidental effect on fiduciary operations or is not otherwise contrary to the purposes expressed in paragraph (a) of this section.
You must adopt and follow written policies and procedures adequate to maintain your fiduciary activities in compliance with applicable law. Among other relevant matters, the policies and procedures should address, where appropriate, the following areas:
(a) Your brokerage placement practices.
(b) Your methods for ensuring that your fiduciary officers and employees do not use material inside information in connection with any decision or recommendation to purchase or sell any security.
(c) Your methods for preventing self-dealing and conflicts of interest.
(d) Your selection and retention of legal counsel who is ready and available to advise you and your fiduciary officers and employees on fiduciary matters.
(e) Your investment of funds held as fiduciary, including short-term investments and the treatment of fiduciary funds awaiting investment or distribution.
The exercise of your fiduciary powers must be managed by or under the direction of your board of directors. In discharging its responsibilities, the board may assign any function related to the exercise of fiduciary powers to any director, officer, employee, or committee of directors, officers, or employees.
You may use your qualified personnel and facilities or an affiliate's qualified personnel and facilities to perform services related to the exercise of fiduciary powers.
Your other departments or affiliates may use fiduciary officers, employees, and facilities to perform services unrelated to the exercise of fiduciary powers, to the extent not prohibited by applicable law.
You may perform services related to the exercise of fiduciary powers for another association or other entity under a written agreement. You may also purchase services related to the exercise of fiduciary powers from another association or other entity under a written agreement.
You must obtain an adequate bond for all fiduciary officers and employees.
Before accepting a prospective fiduciary account, you must review it to determine whether you can properly administer the account.
After you accept a fiduciary account for which you have investment discretion, you must conduct a prompt review of all assets of the account to evaluate whether they are appropriate, individually and collectively, for the account.
At least once every calendar year, you must conduct a review of all assets of each fiduciary account for which you have investment discretion. In this review, you must evaluate whether the assets are appropriate, individually and collectively, for the account.
You must place assets of fiduciary accounts in the joint custody or control of not fewer than two fiduciary officers or employees designated for that purpose by the board of directors.
You may hold the investments of a fiduciary account off-premises, if this practice is consistent with applicable law, and you maintain adequate safeguards and controls.
You must keep the assets of fiduciary accounts separate from your other assets. You must also keep the assets of each fiduciary account separate from all other accounts, or you must identify the investments as the property of a particular account, except as provided in § 150.260.
(a)
(b)
(2) If you must file a document with the OCC under 12 CFR 9.18, the OCC may review such documents for compliance with this part and other laws and regulations.
(3) “Bank” and “national bank” as used in 12 CFR 9.18 shall be deemed to include a Federal savings association.
If you have investment discretion or discretion over distributions for a fiduciary account which contains funds awaiting investment or distribution, you must ensure that those funds do not remain uninvested and undistributed any longer than is reasonable for the proper management of the account and consistent with applicable law. You also must obtain a rate of return for those funds that is consistent with applicable law.
(a)
(b)
If the FDIC does not insure the entire amount of a self deposit, you must set aside collateral as security. If the FDIC does not insure the entire amount of an affiliate deposit, you or your affiliate must set aside collateral as security. The market value of the collateral must at all times equal or exceed the amount of the uninsured fiduciary funds. You must place the collateral under the control of appropriate fiduciary officers and employees.
Any of the following is acceptable collateral for self deposits or affiliate deposits under § 150.310:
(a) Direct obligations of the United States, or other obligations fully guaranteed by the United States as to principal and interest.
(b) Readily marketable securities of the classes in which state-chartered corporate fiduciaries are permitted to invest fiduciary funds under applicable state law.
(c) Other readily marketable securities as the OCC may determine.
(d) Surety bonds, to the extent they provide adequate security, unless prohibited by applicable law.
(e) Any other assets that qualify under applicable state law as appropriate security for deposits of fiduciary funds.
You may not invest funds of a fiduciary account for which you have investment discretion in the following assets, unless authorized by applicable law:
(a) The stock or obligations of, or assets acquired from, you or any of your directors, officers, or employees.
(b) The stock or obligations of, or assets acquired from, your affiliates or any of their directors, officers, or employees.
(c) The stock or obligations of, or assets acquired from, other individuals or organizations if you have an interest in the individual or organization that might affect the exercise of your best judgment.
If the retention of investments in your stock or obligations or the stock or obligations of an affiliate in fiduciary accounts is consistent with applicable law, you may do either of the following:
(a) Exercise rights to purchase additional stock (or securities convertible into additional stock) when these rights are offered
(b) Purchase fractional shares to complement fractional shares acquired through the exercise of rights or through the receipt of a stock dividend resulting in fractional share holdings.
(a)
(b)
(i) The transaction is authorized by applicable law.
(ii) Legal counsel advises you in writing that you have incurred, in your fiduciary capacity, a contingent or potential liability. Upon the sale or transfer of assets, you must reimburse the fiduciary account in cash in an amount equal to the greater of book or market value of the assets.
(iii) The transaction is permitted under 12 CFR 9.18(b)(8)(iii) for defaulted fixed-income investments.
(iv) The OCC requires you to do so.
(2)
You may make a loan to a fiduciary account that is secured by an interest in the assets of the account, if the transaction is fair to the account and is not prohibited by applicable law.
You may sell assets or lend money between fiduciary accounts, if the transaction is fair to both accounts and is not prohibited by applicable law.
If the amount of your compensation for acting in a fiduciary capacity is not set or governed by applicable law, you may charge a reasonable fee for your services.
You may not permit your officers or employees to retain any compensation for acting as a co-fiduciary with you in the administration of a fiduciary account, except with the specific approval of your board of directors.
You may not permit any fiduciary officer or employee to accept a bequest or gift of fiduciary assets, unless the bequest or gift is directed or made by a relative of the officer or employee or is specifically approved by your board of directors.
You must keep adequate records for all fiduciary accounts. For example, you must keep documents on the establishment and termination of each fiduciary account.
You must keep fiduciary records for three years after the termination of the account or the termination of any litigation relating to the account, whichever is later.
You must keep fiduciary records separate and distinct from your other records.
(a)
(b)
Auditors must follow generally accepted standards for attestation engagements and other standards established by the OCC. An audit must ascertain whether your internal control policies and procedures provide reasonable assurance of three things:
(a) You are administering fiduciary activities in accordance with applicable law.
(b) You are properly safeguarding fiduciary assets.
(c) You are accurately recording transactions in appropriate accounts in a timely manner.
Internal auditors, external auditors, or other qualified persons who are responsible only to the board of directors, may conduct an audit.
Your fiduciary audit committee directs the conduct of the audit. Your fiduciary audit committee may consist of a committee of your directors or an audit committee of an affiliate. There are two restrictions on who may serve on the committee:
(a) Your officers and officers of an affiliate who participate significantly in administering your fiduciary activities may not serve on the audit committee.
(b) A majority of the members of the audit committee may not serve on any committee to which the board of directors has delegated power to manage and control your fiduciary activities.
(a)
(b)
You must deposit securities with a state's authorities or, if applicable, a Federal Home Loan Bank under § 150.510, if you meet all of the following:
(a) You are located in the state.
(b) You act as a private or court-appointed trustee.
(c) The law of the state requires corporations acting in a fiduciary capacity to deposit securities with state authorities for the protection of private or court trusts.
If you administer fiduciary assets in more than one state, you must compute the amount of deposit required for each state on the basis of fiduciary assets that you administer primarily from offices located in that state.
If state authorities refuse to accept your deposit under § 150.490, you must deposit the securities with the Federal Home Loan Bank of which you are a member. The Federal Home Loan Bank will hold the securities for the protection of private or court trusts to the same extent as if the securities had been deposited with state authorities.
If the OCC appoints a conservator or receiver, or if you place yourself in voluntary liquidation, the receiver, conservator, or liquidating agent must promptly close or transfer all fiduciary accounts to a substitute fiduciary, in accordance with OCC instructions and the orders of the court having jurisdiction.
If you want to surrender your fiduciary powers, you must file a certified copy of a resolution of your board of directors evidencing that intent. You must file the resolution with the appropriate OCC licensing office.
If, after appropriate investigation, the OCC is satisfied that you have been discharged from all fiduciary duties, the appropriate OCC licensing office will issue a written notice indicating that you are no longer authorized to exercise fiduciary powers.
Upon issuance of the OCC written notice under § 150.540, you may recover any securities deposited with state authorities, or a Federal Home Loan Bank, under subpart C of this part.
The OCC may revoke your fiduciary powers if it determines that you have done any of the following:
(a) Exercised those fiduciary powers unlawfully or unsoundly.
(b) Failed to exercise those fiduciary powers for five consecutive years.
(c) Otherwise failed to follow the requirements of this part.
The procedures for revocation of fiduciary powers are set forth in 12 U.S.C. 1464(n)(10). The OCC will conduct the hearing required under 12 U.S.C. 1464(n)(10)(B) under part 109 of this chapter.
Subject to the requirements of this subpart E, you do not need OCC approval under subpart B if you conduct fiduciary activities in the following fiduciary capacities:
(a) Trustee of a trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan qualifying for specific tax treatment under section 401(d) of the Internal Revenue Code of 1954 (26 U.S.C. 401(d)).
(b) Trustee or custodian of a Individual Retirement Account within the meaning of section 408(a) of the Internal Revenue Code of 1954 (26 U.S.C. 408(a)).
You must observe principles of sound fiduciary administration, including those related to recordkeeping and segregation of assets.
If you act in an exempt fiduciary capacity under § 150.580, the funds of the fiduciary account may be invested only in the following:
(a) Your accounts, deposits, obligations, or securities.
(b) Other assets as the customer may direct, provided you do not exercise any investment discretion and do not directly or indirectly provide any investment advice for the fiduciary account.
(a) If you act in an exempt fiduciary capacity under § 150.580 and fiduciary investments are not limited to accounts or deposits insured by the FDIC, you must include the following language in bold type on the first page of any contract documents:
(b) Funds invested pursuant to this agreement are not insured by the FDIC merely because the trustee or custodian is a Federal savings association the accounts of which are covered by such insurance. Only investments in the accounts of a Federal savings association are insured by the FDIC, subject to its rules and regulations.
You may receive reasonable compensation.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).
This part establishes recordkeeping and confirmation requirements that apply when a Federal savings association (“you”) effects certain securities transactions for customers.
(a)
(1) You effect a securities transaction for a customer.
(2) You effect a transaction in government securities.
(3) You effect a transaction in municipal securities and are not registered as a municipal securities dealer with the SEC.
(4) You effect a securities transaction as fiduciary. You also must comply with 12 CFR part 150 when you effect such a transaction.
(b)
(2)
(3)
(4)
(5)
You must effect all transactions, including transactions excepted under § 151.20, in a safe and sound manner. You must maintain effective systems of records and controls regarding your customers' securities transactions. These systems must clearly and accurately reflect all appropriate information and provide an adequate basis for an audit.
(1) If the customer purchases a security through or from you, except as provided in paragraph (2) of this definition, the time the customer pays you any part of the purchase price. If payment is made by a bookkeeping entry, the time you make the bookkeeping entry for any part of the purchase price.
(2) If the customer purchases a security through or from you and pays for the security before you request payment or notify the customer that payment is due, the time you deliver the security to or into the account of the customer.
(3) If the customer sells a security through or to you, except as provided in paragraph (4) of this definition, the time the customer delivers the security to you. If you have custody of the security at the time of sale, the time you transfer the security from the customer's account.
(4) If the customer sells a security through or to you and delivers the security to you before you request delivery or notify the customer that delivery is due, the time you pay the customer or pay into the customer's account.
(1) A security that is a direct obligation of, or an obligation that is guaranteed as to principal and interest by, the United States;
(2) A security that is issued or guaranteed by a corporation in which the United States has a direct or indirect interest if the Secretary of the Treasury has designated the security for exemption as necessary or appropriate in the public interest or for the protection of investors;
(3) A security issued or guaranteed as to principal and interest by a corporation if a statute specifically designates, by name, the corporation's securities as exempt securities within the meaning of the laws administered by the SEC; or
(4) Any put, call, straddle, option, or privilege on a government security described in this definition, other than a put, call, straddle, option, or privilege:
(i) That is traded on one or more national securities exchanges; or
(ii) For which quotations are disseminated through an automated quotation system operated by a registered securities association.
(1) A customer purchases securities issued by an open-end investment company or unit investment trust registered under the Investment Company Act of 1940, making the payments directly to, or made payable to, the registered investment company, or the principal underwriter, custodian, trustee, or other designated agent of the registered investment company; or
(2) A customer sells securities issued by an open-end investment company or unit investment trust registered under the Investment Company Act of 1940 under:
(i) An individual retirement or individual pension plan qualified under the Internal Revenue Code; or
(ii) A contractual or systematic agreement under which the customer purchases at the applicable public offering price, or redeems at the applicable redemption price, securities in specified amounts (calculated in security units or dollars) at specified time intervals, and stating the commissions or charges (or the means of calculating them) that the customer will pay in connection with the purchase.
(1) A security that is a direct obligation of, or an obligation guaranteed as to principal or interest by, a state or any political subdivision, or any agency or instrumentality of a state or any political subdivision.
(2) A security that is a direct obligation of, or an obligation guaranteed as to principal or interest by, any municipal corporate instrumentality of one or more states; or
(3) A security that is an industrial development bond, the interest on which is excludable from gross income under section 103(a) of the Code (26 U.S.C. 103(a)).
If you effect securities transactions for customers, you must maintain all of the following records for at least three years:
(a)
(1) The account or customer name for which you effected each transaction;
(2) The name and amount of the securities;
(3) The unit and aggregate purchase or sale price;
(4) The trade date; and
(5) The name or other designation of the registered broker-dealer or other person from whom you purchased the securities or to whom you sold the securities.
(b)
(1) Purchases and sales of securities;
(2) Receipts and deliveries of securities;
(3) Receipts and disbursements of cash; and
(4) Other debits and credits pertaining to transactions in securities.
(c)
(1) The account or customer name for which you effected each transaction;
(2) Whether the transaction was a market order, limit order, or subject to special instructions;
(3) The time the trader received the order;
(4) The time the trader placed the order with the registered broker-dealer, or if there was no registered broker-dealer, the time the trader executed or cancelled the order;
(5) The price at which the trader executed the order;
(6) The name of the registered broker-dealer you used.
(d)
(e)
(a) You may maintain the records required under § 151.50 in any manner, form, or format that you deem appropriate. However, your records must clearly and accurately reflect the required information and provide an adequate basis for an audit of the information.
(b) You, or the person that maintains and preserves records on your behalf, must:
(1) Arrange and index the records in a way that permits easy location, access, and retrieval of a particular record;
(2) Separately store, for the time required for preservation of the original record, a duplicate copy of the record on any medium allowed by this section;
(3) Provide promptly any of the following that OCC examiners or your directors may request:
(i) A legible, true, and complete copy of the record in the medium and format in which it is stored;
(ii) A legible, true, and complete printout of the record; and
(iii) Means to access, view, and print the records.
(4) In the case of records on electronic storage media, you, or the person that maintains and preserves records for you, must establish procedures:
(i) To maintain, preserve, and reasonably safeguard the records from loss, alteration, or destruction;
(ii) To limit access to the records to properly authorized personnel, your directors, and OCC examiners; and
(iii) To reasonably ensure that any reproduction of a non-electronic
(c) You may contract with third party service providers to maintain the records.
If you effect a securities transaction for a customer, you must give or send the customer the registered broker-dealer confirmation described at § 151.80, or the written notice described at § 151.90. For certain types of transactions, you may elect to provide the alternate notices described in § 151.100.
(a) If you elect to satisfy § 151.70 by providing the customer with a registered broker-dealer confirmation, you must provide the confirmation by having the registered broker-dealer send the confirmation directly to the customer or by sending a copy of the registered broker-dealer's confirmation to the customer within one business day after you receive it.
(b) If you have received or will receive remuneration from any source, including the customer, in connection with the transaction, you must provide a statement of the source and amount of the remuneration in addition to the registered broker-dealer confirmation described in paragraph (a) of this section.
If you elect to satisfy § 151.70 by providing the customer a written notice, you must give or send the written notice at or before the completion of the securities transaction. You must include all of the following information in a written notice:
(a) Your name and the customer's name.
(b) The capacity in which you acted (for example, as agent).
(c) The date and time of execution of the securities transaction (or a statement that you will furnish this information within a reasonable time after the customer's written request), and the identity, price, and number of shares or units (or principal amount in the case of debt securities) of the security the customer purchased or sold.
(d) The name of the person from whom you purchased or to whom you sold the security, or a statement that you will furnish this information within a reasonable time after the customer's written request.
(e) The amount of any remuneration that you have received or will receive from the customer in connection with the transaction unless the remuneration paid by the customer is determined under a written agreement, other than on a transaction basis.
(f) The source and amount of any other remuneration you have received or will receive in connection with the transaction. If, in the case of a purchase, you were not participating in a distribution, or in the case of a sale, were not participating in a tender offer, the written notice may state whether you have or will receive any other remuneration and state that you will furnish the source and amount of the other remuneration within a reasonable time after the customer's written request.
(g) That you are not a member of the Securities Investor Protection Corporation, if that is the case. This does not apply to a transaction in shares of a registered open-end investment company or unit investment trust if the customer sends funds or securities directly to, or receives funds or securities directly from, the registered open-end investment company or unit investment trust, its transfer agent, its custodian, or a designated broker or dealer who sends the customer either a confirmation or the written notice in this section.
(h) Additional disclosures. You must provide all of the additional disclosures described in the following chart for transactions involving certain debt securities:
You may elect to satisfy § 151.70 by providing the alternate notices described in the following chart for certain types of transactions.
You may provide any written notice required under this subpart B electronically. If a customer has a facsimile machine, you may send the notice by facsimile transmission. You may use other electronic communications if:
(a) The parties agree to use electronic instead of hard copy notices;
(b) The parties are able to print or download the notice;
(c) Your electronic communications system cannot automatically delete the electronic notice; and
(d) Both parties are able to receive electronic messages.
You may not charge a fee for providing a notice required under this subpart B, except that you may charge a reasonable fee for the notices provided under §§ 151.100(a), (d), and (e).
(a) You may not effect or enter into a contract for the purchase or sale of a security that provides for payment of funds and delivery of securities later than the latest of:
(1) The third business day after the date of the contract. This deadline is no later than the fourth business day after the contract for contracts involving the sale for cash of securities that are priced after 4:30 p.m. Eastern Standard Time on the date the securities are priced and are sold by an issuer to an underwriter under a firm commitment underwritten offering registered under the Securities Act of 1933, 15 U.S.C. 77a,
(2) Such other time as the SEC specifies by rule (
(3) Such time as the parties expressly agree at the time of the transaction. The parties to a contract are deemed to have expressly agreed to an alternate date for payment of funds and delivery of securities at the time of the transaction for a contract for the sale for cash of securities under a firm commitment offering, if the managing underwriter and the issuer have agreed to the date for all securities sold under the offering and the parties to the contract have not expressly agreed to another date for payment of funds and delivery of securities at the time of the transaction.
(b) The deadlines in paragraph (a) of this section do not apply to the purchase or sale of limited partnership interests that are not listed on an exchange or for which quotations are not disseminated through an automated quotation system of a registered securities association.
If you effect securities transactions for customers, you must maintain and follow policies and procedures that meet all of the following requirements:
(a) Your policies and procedures must assign responsibility for the supervision of all officers or employees who:
(1) Transmit orders to, or place orders with, registered broker-dealers;
(2) Execute transactions in securities for customers; or
(3) Process orders for notice or settlement purposes, or perform other back office functions for securities transactions that you effect for customers. Policies and procedures for personnel described in this paragraph (a)(3) must provide supervision and reporting lines that are separate from supervision and reporting lines for personnel described in paragraphs (a)(1) and (2) of this section.
(b) Your policies and procedures must provide for the fair and equitable allocation of securities and prices to accounts when you receive orders for the same security at approximately the same time and you place the orders for execution either individually or in combination.
(c) Your policies and procedures must provide for securities transactions in which you act as agent for the buyer and seller (crossing of buy and sell orders) on a fair and equitable basis to the parties to the transaction, where permissible under applicable law.
(d) Your policies and procedures must require your officers and employees to file the personal securities trading reports described at § 151.150, if the officer or employee:
(1) Makes investment recommendations or decisions for the accounts of customers;
(2) Participates in the determination of these recommendations or decisions; or
(3) In connection with their duties, obtains information concerning which securities you intend to purchase, sell, or recommend for purchase or sale.
An officer or employee described in § 151.140(d) must report all personal transactions in securities made by or on behalf of the officer or employee if he or she has a beneficial interest in the security.
(a)
(1) The date of each transaction, the title and number of shares, the interest rate and maturity date (if applicable), and the principal amount of each security involved.
(2) The nature of each transaction (i.e., purchase, sale, or other type of acquisition or disposition).
(3) The price at which each transaction was effected.
(4) The name of the broker, dealer, or other intermediary effecting the transaction.
(5) The date the officer or employee submitted the report.
(b)
(1) He or she has no direct or indirect influence or control over the account for which the transaction was effected or over the securities held in that account;
(2) The transaction was in shares issued by an open-end investment company registered under the Investment Company Act of 1940;
(3) The transaction was in direct obligations of the government of the United States;
(4) The transaction was in bankers' acceptances, bank certificates of deposit, commercial paper or high quality short term debt instruments, including repurchase agreements; or
(5) The officer or employee had an aggregate amount of purchases and sales of $10,000 or less during the calendar quarter.
(c)
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 5412(b)(2)(B).
(a)
(1)
(ii) Promptly after publication of the public notice, the applicant shall transmit copies of the public notice and publisher's affidavit of publication to the appropriate OCC licensing office in the same manner as the original filing.
(iii) Any person may inspect the application and all related communications at the offices specified in 12 CFR 4.14(c) during regular business hours, unless such information is exempt from public disclosure.
(2)
(3)
(4)
(b)
(1) Factors that will be considered on all applications for permission to organize a Federal stock association are:
(i) Whether the applicants are persons of good character and responsibility;
(ii) Whether a necessity exists for such association in the community to be served;
(iii) Whether there is a reasonable probability of the association's usefulness and success;
(iv) Whether the association can be established without undue injury to properly conducted existing local thrift and home financing institutions; and
(v) Whether the association will perform a role of providing credit for housing consistent with safe and sound operation of a Federal savings association.
(2) [Reserved]
(3) Approvals of applications will be conditioned on the following:
(i) Receipt by the OCC of written confirmation from the Federal Deposit Insurance Corporation that the accounts of the association will be insured by the Federal Deposit Insurance Corporation;
(ii) The sale of a minimum amount of fully-paid capital stock of the association prior to commencing business;
(iii) The submission of a statement that:
(A) The applicants have incurred no expense in organization which is chargeable to the association, and that no such expense will be incurred, and
(B) No funds will be accepted for deposit by the association until organization has been completed;
(iv) Compliance with all applicable laws, rules, and regulations; and
(v) The satisfaction of any other requirement or condition the OCC may impose.
(c)
(d)
(e)
(f)
(g)
(h)
(1) The association has obtained Federal Home Loan Bank membership and insurance of its accounts from the Federal Deposit Insurance Corporation;
(2) It has completed the sale of and received full payment for its capital stock;
(3) It has complied with all requirements of part 197 of this chapter;
(4) It has held its organizational meeting for the election of directors and all directors have been elected;
(5) Its officers have been elected and bonded; and
(6) It has met the requirements and conditions imposed by the OCC in connection with approval of the application.
(i)
(a) Applications for permission to organize an interim Federal savings association are not subject to subparts B, C and D of part 116 of this chapter or § 152.1(b)(3) of this part.
(b) Approval of an application for permission to organize an interim Federal stock association shall be conditioned upon approval by the OCC of an application to merge the interim Federal stock association, or upon approval by the OCC of another transaction which the interim was chartered to facilitate. Applications for permission to organize an interim Federal stock association shall be submitted in the same manner as the related filing(s). In evaluating the application, the OCC will consider the
(c) If a merger or other transaction facilitated by the existence of the interim Federal stock association has not been approved within six months of the approval of the application for permission to organize, unless extended for good cause shown, the charter shall be void and all subscriptions for capital stock shall be returned.
The charter of a Federal stock association shall be in the following form, except that an association that has converted from the mutual form pursuant to part 192 of this chapter shall include in its charter a section establishing a liquidation account as required by § 192.3(c)(13) of this chapter. A charter for a Federal stock savings bank shall substitute the term “savings bank” for “association.” Charters may also include any preapproved optional provision contained in § 152.4 of this part.
Federal Stock Charter
Except for shares issued in the initial organization of the association or in connection with the conversion of the association from the mutual to stock form of capitalization, no shares of capital stock (including shares issuable upon conversion, exchange, or exercise of other securities) shall be issued, directly or indirectly, to officers, directors, or controlling persons of the association other than as part of a general public offering or as qualifying shares to a director, unless the issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal meeting.
The holders of the common stock shall exclusively possess all voting power. Each holder of shares of common stock shall be entitled to one vote for each share held by such holder, except as to the cumulation of votes for the election of directors, unless the charter provides that there shall be no such cumulative voting. Subject to any provision for a liquidation account, in the event of any liquidation, dissolution, or winding up of the association, the holders of the common stock shall be entitled, after payment or provision for payment of all debts and liabilities of the association, to receive the remaining assets of the association available for distribution, in cash or in kind. Each share of common stock shall have the same relative rights as and be identical in all respects with all the other shares of common stock.
(a)
(1)
(2)
(ii)
(b)
(1)
(2)
(3)
(4)
Except for shares issued in the initial organization of the association or in connection with the conversion of the association from the mutual to the stock form of capitalization, no shares of capital stock (including shares issuable upon conversion, exchange, or exercise of other securities) shall be issued, directly or indirectly, to officers, directors, or controlling persons of the association other than as part of a general public offering or as qualifying shares to a director, unless their issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections hereto) shall entitle the holders of any class of a series of capital stock to vote as a separate class or series or to more than one vote per share, except as to the cumulation of votes for the election of directors, unless the charter otherwise provides that there shall be no such cumulative voting:
(i) To any provision which would authorize the holders of preferred stock, voting as a class or series, to elect some members of the board of directors, less than a majority thereof, in the event of default in the payment of dividends on any class or series of preferred stock;
(ii) To any provision that would require the holders of preferred stock, voting as a class or series, to approve the merger or consolidation of the association with another corporation or the sale, lease, or conveyance (other than by mortgage or pledge) of properties or business in exchange for securities of a corporation other than the association if the preferred stock is exchanged for securities of such other corporation:
(iii) To any amendment which would adversely change the specific terms of any class or series of capital stock as set forth in this Section 5 (or in any supplementary sections hereto), including any amendment which would create or enlarge any class or series ranking prior thereto in rights and preferences. An amendment which increases the number of authorized shares of any class or series of capital stock, or substitutes the surviving association in a merger or consolidation for the association, shall not be considered to be such an adverse change.
A description of the different classes and series (if any) of the association's capital stock and a statement of the designations, and the relative rights, preferences, and limitations of the shares of each class of and series (if any) of capital stock are as follows:
A.
Whenever there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and of sinking fund, retirement fund, or other retirement payments, if any, to which such holders are respectively entitled in preference to the common stock, then dividends may be paid on the common stock and on any class or series of stock entitled to participate therewith as to dividends out of any assets legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the association, the holders of the common stock (and the holders of any class or series of stock entitled to participate with the common stock in the distribution of assets) shall be entitled to receive, in cash or in kind, the assets of the association available for distribution remaining after: (i) Payment or provision for payment of the association's debts and liabilities; (ii) distributions or provision for distributions in settlement of its
B.
(a) The distinctive serial designation and the number of shares constituting such series;
(b) The dividend rate or the amount of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date(s), the payment date(s) for dividends, and the participating or other special rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such series;
(d) Whether the shares of such series shall be redeemable and, if so, the price(s) at which, and the terms and conditions on which, such shares may be redeemed;
(e) The amount(s) payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution, or winding up of the association;
(f) Whether the shares of such series shall be entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and if so entitled, the amount of such fund and the manner of its application, including the price(s) at which such shares may be redeemed or purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes of stock of the association and, if so, the conversion price(s) or the rate(s) of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange.
(h) The price or other consideration for which the shares of such series shall be issued; and
(i) Whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of serial preferred stock and whether such shares may be reissued as shares of the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same relative rights as and be identical in all respects with all the other shares of the same series.
The board of directors shall have authority to divide, by the adoption of supplementary charter sections, any authorized class of preferred stock into series, and, within the limitations set forth in this section and the remainder of this charter, fix and determine the relative rights and preferences of the shares of any series so established.
Prior to the issuance of any preferred shares of a series established by a supplementary charter section adopted by the board of directors, the association shall file with the OCC a dated copy of that supplementary section of this charter established and designating the series and fixing and determining the relative rights and preferences thereof.
(5)
(6)
(7) [Reserved]
(8)
A.
In the event shares are acquired in violation of this section 8, all shares beneficially owned by any person in excess of 10% shall be considered “excess shares” and shall not be counted as shares entitled to vote and shall not be voted by any person or counted as voting shares in connection with any matters submitted to the stockholders for a vote.
For purposes of this section 8, the following definitions apply:
(1) The term “person” includes an individual, a group acting in concert, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of the equity securities of the association.
(2) The term “offer” includes every offer to buy or otherwise acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value.
(3) The term “acquire” includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise.
(4) The term “acting in concert” means (a) knowing participation in a joint activity or conscious parallel action towards a common goal whether or not pursuant to an express agreement, or (b) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other
B.
C.
(c)
(d)
(a)
(b)
(A) Render more difficult or discourage a merger, tender offer, or proxy contest, the assumption of control by a holder of a large block of the association's stock, or the removal of incumbent management; or
(B) Be inconsistent with §§ 152.6, 152.7, 152.8, and 152.9 of this part, with applicable laws, rules, regulations or the association's charter or involve a significant issue of law or policy, including indemnification, conflicts of interest, and limitations on director or officer liability.
(ii) Applications submitted under paragraph (b)(1)(i) of this section are subject to standard treatment processing procedures at part 116, subparts A and E of this chapter.
(iii) Bylaw provisions that adopt the language of the OCC's model or optional bylaws, if adopted without change, and filed with the OCC within 30 days after adoption, are effective upon adoption.
(2)
(3)
(c)
(d)
(a)
(b)
(c)
(d)
(2) In lieu of making the shareholders list available for inspection by any shareholders as provided in paragraph (d)(1) of this section, the board of directors may perform such acts as required by paragraphs (a) and (b) of Rule 14a-7 of the General Rules and Regulations under the Securities and Exchange Act of 1934 (17 CFR 240.14a-7) as may be duly requested in writing, with respect to any matter which may be properly considered at a meeting of shareholders, by any shareholder who is entitled to vote on such matter and who shall defray the reasonable expenses to be incurred by the association in performance of the act or acts required.
(e)
(f)
(2)
(g)
(h)
(a)
(b)
(c)
(d)
(e)
(f)
(2) If less than the entire board is to be removed, no one of the directors may be removed if the votes cast against the removal would be sufficient to elect a director if then cumulatively voted at an election of the class of directors of which such director is a part.
(3) Whenever the holders of the shares of any class are entitled to elect one or more directors by the provisions of the charter or supplemental sections thereto, the provisions of this section shall apply, in respect to the removal of a director or directors so elected, to the vote of the holders of the outstanding shares of that class and not to the vote of the outstanding shares as a whole.
(g)
(h)
(i)
(j)
(k)
(a)
(b)
(c)
(a)
(b)
A Federal stock association not wholly-owned by a holding company shall, within 130 days after the end of its fiscal year, mail to each of its stockholders entitled to vote at its annual meeting an annual report containing financial statements that satisfy the requirements of rule 14a-3 under the Securities Exchange Act of 1934. (17 CFR 240.14a-3). Concurrently with such mailing a certification of such mailing signed by the chairman of the board, the president or a vice president of the association, together with copies of the report, shall be transmitted by the association to the OCC.
(a) Each Federal stock association shall keep correct and complete books and records of account; shall keep minutes of the proceedings of its stockholders, board of directors, and committees of directors; and shall keep at its home office or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders, and the number, class and series, if any, of the shares held by each.
(b)(1) Any stockholder or group of stockholders of a Federal stock association, holding of record the number of voting shares of such association specified below, upon making written demand stating a proper purpose, shall have the right to examine, in person or by agent or attorney, at any reasonable time or times, nonconfidential portions of its books and records of account, minutes and record of stockholders and to make extracts therefrom. Such right of examination is limited to a stockholder or group of stockholders holding of record:
(i) Voting shares having a cost of not less than $100,000 or constituting not less than one percent of the total outstanding voting shares, provided in either case such stockholder or group of stockholders have held of record such voting shares for a period of at least six months before making such written demand, or
(ii) Not less than five percent of the total outstanding voting shares.
(2) No stockholder or group of stockholders of a Federal stock association shall have any other right under this section or common law to examine its books and records of account, minutes and record of stockholders, except as provided in its bylaws with respect to inspection of a list of stockholders.
(c) The right to examination authorized by paragraph (b) of this section and the right to inspect the list of stockholders provided by a Federal stock association's bylaws may be denied to any stockholder or group of stockholders upon the refusal of any such stockholder or group of stockholders to furnish such association, its transfer agent or registrar an affidavit that such examination or inspection is not desired for any purpose which is in the interest of a business or object other than the business of the association, that such stockholder has not within the five years preceding the date of the affidavit sold or offered for sale, and does not now intend to sell or offer for sale, any list of stockholders of the association or of any other corporation, and that such stockholder has not within said five-year period aided or abetted any other person in procuring any list of stockholders for purposes of selling or offering for sale such list.
(d) Notwithstanding any provision of this section or common law, no stockholder or group of stockholders shall have the right to obtain, inspect or copy any portion of any books or records of a Federal stock association containing:
(1) A list of depositors in or borrowers from such association;
(2) Their addresses;
(3) Individual deposit or loan balances or records; or
(4) Any data from which such information could be reasonably constructed.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(c)
(1) The combination is in compliance with, and receives all approvals required under, any applicable statutes and regulations;
(2) Any resulting Federal savings association meets the requirements for Federal Home Loan Bank membership and insurance of accounts;
(3) Any resulting Federal savings association conforms within the time prescribed by the OCC to the
(4) If any constituent savings association is a mutual savings association, the resulting institution shall be mutually held, unless:
(i) The transaction involves a supervisory merger;
(ii) The transaction is approved under part 192 of this chapter;
(iii) The transaction involves an interim Federal stock association or an interim state stock savings association; or
(iv) The transaction involves a transfer in the context of a mutual holding company reorganization under section 10(o) of the Home Owners' Loan Act.
(d)
(e)
(1) By a two-thirds vote of the entire board of each constituent Federal savings association; and
(2) As required by other applicable Federal or state law, for other constituent institutions.
(f)
(1) That the combination shall not be effective unless and until:
(i) The combination receives any necessary approval from the OCC pursuant to § 163.22 (a) or (c);
(ii) In the case of a transaction requiring a notification pursuant to § 163.22(b), notification has been provided to the OCC; or
(iii) In the case of a transaction requiring a notice pursuant to § 163.22(c), the notice has been filed, and the appropriate period of time has passed or the OCC has advised the parties that it will not disapprove the transaction;
(2) Which constituent institution is to be the resulting institution;
(3) The name of the resulting institution;
(4) The location of the home office and any other offices of the resulting institution;
(5) The terms and conditions of the combination and the method of effectuation;
(6) Any charter amendments, or the new charter in the combination;
(7) The basis upon which the savings accounts of the resulting institution shall be issued;
(8) If a Federal association is the resulting institution, the number, names, residence addresses, and terms of directors;
(9) The effect upon and assumption of any liquidation account of a disappearing institution by the resulting institution; and
(10) Such other provisions, agreements, or understandings as relate to the combination.
(g) [Reserved]
(h)
(2)
(i) It does not involve an interim Federal savings association or an interim state savings association;
(ii) The association's charter is not changed;
(iii) Each share of stock outstanding immediately prior to the effective date of the combination is to be an identical outstanding share or a treasury share of the resulting Federal stock association after such effective date; and
(iv) Either:
(A) No shares of voting stock of the resulting Federal stock association and no securities convertible into such stock are to be issued or delivered under the plan of combination, or
(B) The authorized unissued shares or the treasury shares of voting stock of the resulting Federal stock association to be issued or delivered under the plan of combination, plus those initially issuable upon conversion of any securities to be issued or delivered under such plan, do not exceed 15% of the total shares of voting stock of such association outstanding immediately prior to the effective date of the combination.
(3)
(i)
(j)
(i) The plan of combination;
(ii) The number of shares outstanding in each depository institution; and
(iii) The number of shares in each depository institution voted for and against such plan.
(2) Both sets of articles of combination shall be filed with the OCC. If the OCC determines that such articles conform to the requirements of this section, the OCC shall endorse the articles and return one set to the resulting institution.
(k)
(l)
(a)
(b)
(c)
(2)
(3)
(A) Give written notice by mail to stockholders of constituent Federal stock associations who have complied with the provisions of paragraph (c)(2) of this section and have not voted in favor of the combination, of the effective date of the combination;
(B) Make a written offer to each stockholder to pay for dissenting shares at a specified price deemed by the resulting association to be the fair value thereof; and
(C) Inform them that, within sixty days of such date, the respective requirements of paragraphs (c)(5) and (c)(6) of this section (set out in the notice) must be satisfied.
(ii) The notice and offer shall be accompanied by a balance sheet and statement of income of the association the shares of which the dissenting stockholder holds, for a fiscal year ending not more than sixteen months before the date of notice and offer, together with the latest available interim financial statements.
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
Notwithstanding the foregoing provisions of this part, the Comptroller may waive or deem inapplicable any provision of § 152.13 or § 152.14 of this part if he or she determines that grounds exist, or may imminently exist, for appointment of a conservator or receiver for an association under subsection 5(d) of the Home Owners' Loan Act.
Notwithstanding any subsequent change to its charter or bylaws, the authority of a Federal stock association to engage in any transaction shall be determined only by the association's charter or bylaws then in effect.
Sections 152.1 and 152.2 of this part do not apply to a Federal stock association which is proposed by the Federal Deposit Insurance Corporation, or the Resolution Trust Corporation under section 5(p) of the Home Owner's Loan Act of 1933, section 11(c) of the Federal Deposit Insurance Act, or section 21A of the Federal Home Loan Bank Act, or is otherwise chartered by the OCC in connection with an association in default or in danger of default. Incorporation and organization of such associations are complete when and under such conditions as the OCC so determines.
(a) With the approval of the OCC, any stock depository institution that is, or is eligible to become, a member of a Federal Home Loan Bank, may convert to a Federal stock association, provided that the depository institution, at the time of the conversion, has deposits insured by the Federal Deposit Insurance Corporation, and provided further, that the depository institution, in accomplishing the conversion, complies with all applicable statutes and regulations, including, without limitation, section 5(d) of the Federal Deposit Insurance Act. The resulting Federal stock association must conform within the time prescribed by the OCC to the requirements of section 5(c) of the Home Owners' Loan Act. For purposes of this section, the term “depository institution” shall have the meaning set forth at 12 CFR 152.13(b). An application for conversion filed under this section is subject to the procedures for organization of a Federal stock organization at § 152.1.
(b) Any and all of the assets and other property (whether real, personal, mixed, tangible or intangible, including choses in action, rights, and credits) of the former stock form depository institution become assets and property of the Federal stock association when the conversion occurs. Similarly, any and all of the obligations and debts of or claims against the former stock form depository institution become obligations and debts of and claims against the Federal stock association when the conversion occurs. In effect, the Federal stock association is the same as the former stock form depository institution with respect to any and all assets, property, claims and debts of or claims against the former stock form depository institution.
A Federal stock association may convert to a national banking association or a state bank after filing a notification or application, as appropriate, with the appropriate OCC licensing office in accordance with the applicable provisions of § 163.22(b) of this chapter.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).
This part describes how a Federal savings association may provide products and services through electronic means and facilities.
(a)
(b)
If you use electronic means and facilities under this subpart, your management must:
(a) Identify, assess, and mitigate potential risks and establish prudent internal controls; and
(b) Implement security measures designed to ensure secure operations. Such measures must be adequate to:
(1) Prevent unauthorized access to your records and your customers' records;
(2) Prevent financial fraud through the use of electronic means or facilities; and
(3) Comply with applicable security devices requirements of part 168 of this chapter.
(a)
(b)
(c)
You must file a written notice with your OCC supervisory office at least 30 days before you establish a transactional Web site. The notice must do three things:
(a) Describe the transactional web site.
(b) Indicate the date the transactional web site will become operational.
(c) List a contact familiar with the deployment, operation, and security of the transactional web site.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B).
This part applies to the deposit activities of Federal savings associations.
A Federal savings association (“you”) may raise funds through accounts and may issue evidence of accounts under section 5(b)(1) of the HOLA (12 U.S.C. 1464(b)(1)), your charter, and this part. Additionally, 12 CFR parts 204 and 230 apply to your deposit activities.
State law applies to the deposit activities of Federal savings associations and their subsidiaries to the same extent and in the same manner that those laws apply to national banks and their subsidiaries.
(a) You may pay interest at any rate or anticipated rate of return on accounts, either in deposit or in share form, as provided in your charter and the account's terms.
(b) You may pay fixed or variable rates. If you pay a variable rate, you must base it on a schedule, index, or formula that you specify in the account's terms.
You may treat the holder of record as the account owner, even if you receive contrary notice, until you transfer the account on your records.
You should establish and maintain deposit documentation practices and records that demonstrate that you appropriately administer and monitor deposit-related activities. Your records should adequately evidence ownership, balances, and all transactions involving each account. You may maintain records on deposit activities in any format that is consistent with standard business practices.
12 U.S.C. 1462, 1462a, 1463, 1464, 1828, 5412(b)(2)(B).
(a) The OCC is issuing this part 159 pursuant to its general rulemaking and supervisory authority under the Home Owners' Loan Act, 12 U.S.C. 1462
(b) Notices under this part are applications for purposes of statutory and regulatory references to “applications.” Any conditions that the OCC imposes in approving any application are enforceable as a condition imposed in writing by the OCC in connection with the granting of a request by a Federal savings association within the meaning of 12 U.S.C. 1818(b) or 1818(i).
For purposes of this part:
A Federal savings association (“you”) that meets the requirements of this section, as detailed in the following chart, may establish, or obtain an interest in an operating subsidiary or a service corporation. For ease of reference, this section cross-references other regulations in this chapter affecting operating subsidiaries and service corporations. You should refer to those regulations for the details of how they apply. The chart also discusses the regulations that may apply to lower-tier entities in which you have an indirect ownership interest through your operating subsidiary or service corporation. The chart follows:
This section sets forth the activities that have been preapproved for service corporations. Section 159.3(e)(2) of this part sets forth the procedures for engaging in a broader scope of activities on a case-by-case basis. You should read these two sections together to determine whether you must file a notice with the OCC under § 159.11 of this part, or whether you must file an application under part 116 of this chapter and receive prior written OCC approval for your service corporation to engage in a particular activity. The notice or application should be filed with the appropriate OCC licensing office. To the extent permitted by § 159.3(e)(2) of this part, a service corporation may engage in the following activities:
(a) Any activity that all Federal savings associations may conduct directly, except taking deposits.
(b) Business and professional services. The following services are preapproved for service corporations only when they are limited to financial documents or financial clients or are generally finance-related:
(1) Accounting or internal audit;
(2) Advertising, marketing research and other marketing;
(3) Clerical;
(4) Consulting;
(5) Courier;
(6) Data processing;
(7) Data storage facilities operation and related services;
(8) Office supplies, furniture, and equipment purchasing and distribution;
(9) Personnel benefit program development or administration;
(10) Printing and selling forms that require Magnetic Ink Character Recognition (MICR) encoding;
(11) Relocation of personnel;
(12) Research studies and surveys;
(13) Software development and systems integration; and
(14) Remote service unit operation, leasing, ownership or establishment.
(c) Credit-related activities.
(1) Abstracting;
(2) Acquiring and leasing personal property;
(3) Appraising;
(4) Collection agency;
(5) Credit analysis;
(6) Check or credit card guaranty and verification;
(7) Escrow agent or trustee (under deeds of trust, including executing and deliverance of conveyances, reconveyances and transfers of title); and
(8) Loan inspection.
(d) Consumer services.
(1) Financial advice or consulting;
(2) Foreign currency exchange;
(3) Home ownership counseling;
(4) Income tax return preparation;
(5) Postal services;
(6) Stored value instrument sales;
(7) Welfare benefit distribution;
(8) Check printing and related services; and
(9) Remote service unit operation, leasing, ownership, or establishment.
(e) Real estate related services.
(1) Acquiring real estate for prompt development or subdivision, for construction of improvements, for resale or leasing to others for such construction, or for use as manufactured home sites, in accordance with a prudent program of property development;
(2) Acquiring improved real estate or manufactured homes to be held for rental or resale, for remodeling, renovating, or demolishing and rebuilding for sale or rental, or to be used for offices and related facilities of a stockholder of the service corporation;
(3) Maintaining and managing real estate; and
(4) Real estate brokerage for property owned by a savings association that owns capital stock of the service corporation, the service corporation, or a lower-tier entity in which the service corporation invests.
(f) Securities activities, liquidity management, and coins.
(1) Execution of transactions in securities on an agency or riskless principal basis solely upon the order and for the account of customers or the provision of investment advice. The service corporation must register with the Securities and Exchange Commission and state securities regulators, as required by applicable Federal and state law and regulations;
(2) Liquidity management;
(3) Issuing notes, bonds, debentures, or other obligations or securities;
(4) Purchase or sale of coins issued by the U.S. Treasury.
(g)
(2) Tax-exempt obligations of public housing agencies used to finance housing projects with rental assistance subsidies;
(3) Small business investment companies and new markets venture capital companies licensed by the U.S. Small Business Administration;
(4) Rural business investment companies; and
(5) Investing in savings accounts of an investing thrift.
(h) Community development and charitable activities:
(1) Investments in governmentally insured, guaranteed, subsidized or otherwise sponsored programs for housing, small farms, or businesses that are local in character;
(2) Investments designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families (such as providing housing, services, or jobs);
(3) Investments in low-income housing tax credit and new markets tax credit projects and entities authorized by statute (e.g., community development financial institutions) to promote community, inner city, and community development purposes; and
(4) Establishing a corporation that is recognized by the Internal Revenue Service as organized for charitable purposes under 26 U.S.C. 501(c)(3) of the Internal Revenue Code and making a reasonable contribution to capitalize it,
(i) Activities conducted on behalf of a customer on an other than “as principal” basis.
(j) Activities reasonably incident to those listed in paragraphs (a) through (i) of this section if the service corporation engages in those activities.
The amount that a Federal savings association (“you”) may invest in a service corporation or any lower-tier entity depends upon several factors. These include your total assets, your capital, the purpose of the investment, and your ownership interest in the service corporation or entity.
(a) Under section 5(c)(4)(B) of the HOLA, you may invest up to 3% of your assets in the capital stock, obligations, and other securities of service corporations. Any investment you make under this paragraph that would cause your investment, in the aggregate, to exceed 2% of your assets must serve primarily community, inner city, or community development purposes. You must designate the investments serving those purposes, which include:
(1) Investments in governmentally insured, guaranteed, subsidized or otherwise sponsored programs for housing, small farms, or businesses that are local in character;
(2) Investments for the preservation or revitalization of either urban or rural communities;
(3) Investments designed to meet the community development needs of, and primarily benefit, low- and moderate-income communities; or
(4) Other community, inner city, or community development-related investments approved by the OTS or the OCC.
(b) In addition to the amounts you may invest under paragraph (a) of this section, and to the extent that you have authority under other provisions of section 5(c) of the HOLA and part 160 of this chapter, and available capacity within any applicable investment limits, you may make loans to any service corporation and any lower-tier entity, subject to the following conditions:
(1) You and your GAAP-consolidated subsidiaries may, in the aggregate, make loans of up to 15% of your total capital, as described in part 167 of this chapter to each subordinate organization that does not qualify as a GAAP-consolidated subsidiary. All loans made under this paragraph (b)(1) may not, in the aggregate, exceed 50% of your total capital, as described in part 167 of this chapter.
(2) The OCC may limit the amount of loans to a GAAP-consolidated subsidiary, or may adjust the limits set forth in paragraph (b)(1) of this section where safety and soundness considerations warrant such action.
(c) For purposes of this section, the terms “loans” and “obligations” include all loans and other debt instruments (except accounts payable incurred in the ordinary course of business and paid within 60 days) and all guarantees or take-out commitments of such loans or debt instruments.
(a) Each Federal savings association and subordinate organization thereof must be operated in a manner that demonstrates to the public that each maintains a separate corporate existence. Each must operate so that:
(1) Their respective business transactions, accounts, and records are not intermingled;
(2) Each observes the formalities of their separate corporate procedures;
(3) Each is adequately financed as a separate unit in light of normal obligations reasonably foreseeable in a business of its size and character;
(4) Each is held out to the public as a separate enterprise; and
(5) Unless the parent savings association has guaranteed a loan to the subordinate organization, all borrowings by the subordinate organization indicate that the parent is not liable.
(b) OCC regulations that apply both to Federal savings associations and subordinate organizations shall not be construed as requiring a savings association and its subordinate organizations to operate as a single entity.
When required by section 18(m) of the Federal Deposit Insurance Act, a Federal savings association (“you”) must file a notice (“Notice”) under part 116, subpart A of this chapter at least 30 days before establishing or acquiring a subsidiary or engaging in new activities in a subsidiary. The Notice should be filed with the appropriate OCC licensing office and must contain all of the information the Federal Deposit Insurance Corporation (FDIC) requires under 12 CFR 362.15. Providing the OCC with a copy of the notice you file with the FDIC will satisfy this requirement. If the OCC notifies you within 30 days that the Notice presents supervisory concerns, or raises significant issues of law or policy, you must apply for and receive the OCC's prior written approval under the standard treatment processing procedures at part 116, subpart A and E of this chapter before establishing or acquiring the subsidiary or engaging in new activities in the subsidiary.
(a) A subsidiary may issue, either directly or through a third party intermediary, any securities that its parent Federal savings association (“you”) may issue. The subsidiary must not state or imply that the securities it issues are covered by Federal deposit insurance. A subsidiary may not issue any security the payment, maturity, or redemption of which may be accelerated upon the condition that you are insolvent or have been placed into receivership.
(b) You must file a notice with the appropriate OCC licensing office in accordance with § 159.11 of this part at least 30 days before your first issuance of any securities through an existing subsidiary or in conjunction with establishing or acquiring a new subsidiary. If the OCC notifies you within 30 days that the notice presents supervisory concerns or raises significant issues of law or policy, you must receive the OCC's prior written approval before issuing securities through your subsidiary.
(c) For as long as any securities are outstanding, you must maintain all records generated through each securities issuance in the ordinary course of business, including a copy of any prospectus, offering circular, or similar document concerning such issuance, and make such records available for examination by the OCC. Such records must include, but are not limited to:
(1) The amount of your assets or liabilities (including any guarantees you make with respect to the securities issuance) that have been transferred or made available to the subsidiary; the percentage that such amount represents of the current book value of your assets on an unconsolidated basis; and the current book value of all such assets of the subsidiary;
(2) The terms of any guarantee(s) issued by you or any third party;
(3) A description of the securities the subsidiary issued;
(4) The net proceeds from the issuance of securities (or the pro rata portion of the net proceeds from securities issued through a jointly owned subsidiary); the gross proceeds of the securities issuance; and the market value of assets collateralizing the securities issuance (any assets of the subsidiary, including any guarantees of its securities issuance you have made);
(5) The interest or dividend rates and yields, or the range thereof, and the frequency of payments on the subsidiary's securities;
(6) The minimum denomination of the subsidiary's securities; and
(7) Where the subsidiary marketed or intends to market the securities.
(a) In accordance with this section, a Federal savings association (“you”) may exercise your salvage power to make a contribution or a loan (including a guarantee of a loan made by any other person) to your service corporation or lower-tier entity (“salvage investment”) that exceeds the maximum amount otherwise permitted under law or regulation. You must notify the appropriate OCC licensing office at least 30 days before making such a salvage investment. This notice must demonstrate that:
(1) The salvage investment protects your interest in the service corporation or lower-tier entity;
(2) The salvage investment is consistent with safety and soundness; and
(3) You considered alternatives to the salvage investment and determined that such alternatives would not adequately satisfy paragraphs (a)(1) and (a)(2) of this section.
(b) If the OCC notifies you within 30 days that the Notice presents supervisory concerns, or raises significant issues of law or policy, you must apply for and receive the OCC's prior written approval under the standard treatment processing procedures at part 116, subparts A and E of this chapter before making a salvage investment.
(c) If your service corporation or lower-tier entity is a GAAP-consolidated subsidiary, your salvage investment under this section will be considered an investment in a subsidiary for purposes of part 167 of this chapter.
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1701j-3, 1828, 3803, 3806, 5412(b)(2)(B); 42 U.S.C. 4106.
(a)
(b)
State law applies to the lending activities of Federal savings associations and their subsidiaries to the same extent and in the same manner that those laws apply to national banks and their subsidiaries.
For purposes of this part and any determination under 12 U.S.C. 1467a(m):
(1) The security property is real estate pursuant to the law of the state in which the property is located;
(2) The security interest of the Federal savings association may be enforced as a real estate mortgage or its equivalent pursuant to the law of the state in which the property is located;
(3) The security property is capable of separate appraisal; and
(4) With regard to a security property that is a leasehold or other interest for a period of years, the term of the interest extends, or is subject to extension or renewal at the option of the Federal savings association for a term of at least five years following the maturity of the loan.
Pursuant to section 5(c) of the Home Owners' Loan Act (“HOLA”), 12 U.S.C. 1464(c), a Federal savings association may make, invest in, purchase, sell, participate in, or otherwise deal in (including brokerage or warehousing) all loans and investments allowed under section 5(c) of the HOLA including, without limitation, the following loans, extensions of credit, and investments, subject to the limitations indicated and any such terms, conditions, or limitations as may be prescribed from time to time by the OCC by policy directive, order, or regulation:
(a) If a loan or other investment is authorized under more than one section of the HOLA, as amended, or this part, a Federal savings association may designate under which section the loan or investment has been made. Such a loan or investment may be apportioned among appropriate categories, and may be moved, in whole or part, from one category to another. A loan commitment shall be counted as an investment and included in total assets of a Federal savings association for purposes of calculating compliance with HOLA section 5(c)'s investment limitations only to the extent that funds have been advanced and not repaid pursuant to the commitment.
(b) Loans or portions of loans sold to a third party shall be included in the calculation of a percentage-of-assets or percentage-of-capital investment limitation only to the extent they are sold with recourse.
(c) A Federal savings association may make a loan secured by an assignment of loans to the extent that it could, under applicable law and regulations, make or purchase the underlying assigned loans.
(a) A Federal savings association (“you”) may make pass-through investments. A pass-through investment occurs when you invest in an entity (“company”) that engages only in activities that you may conduct directly and the investment meets the requirements of this section. If an investment is authorized under both this section and some other provision of law, you may designate under which authority or authorities the investment is made. When making a pass-through investment, you must comply with all the statutes and regulations that would apply if you were engaging in the activity directly. For example, your proportionate share of the company's assets will be aggregated with the assets you hold directly in calculating investment limits (
(b) You may make a pass-through investment without prior notice to the OCC if all of the following conditions are met:
(1) You do not invest more than 15% of your total capital in one company;
(2) The book value of your aggregate pass-through investments does not exceed 50% of your total capital after making the investment;
(3) Your investment would not give you direct or indirect control of the company;
(4) Your liability is limited to the amount of your investment; and
(5) The company falls into one of the following categories:
(i) A limited partnership;
(ii) An open-end mutual fund;
(iii) A closed-end investment trust;
(iv) A limited liability company; or
(v) An entity in which you are investing primarily to use the company's services (
(c) If you want to make other pass-through investments, you must provide the OCC with 30 days' advance notice. If within that 30-day period the OCC notifies you that an investment presents supervisory, legal, or safety and soundness concerns, you must apply for and receive the OCC's prior written approval under the standard treatment processing procedures at part 116, subparts A and E of this chapter before making the investment. Notices under this section are deemed to be applications for purposes of statutory and regulatory references to “applications.” Any conditions that the OCC imposes on any pass-through investment shall be enforceable as a condition imposed in writing by the OCC in connection with the granting of a request by a Federal savings association within the meaning of 12 U.S.C. 1818(b) or 1818(i).
A Federal savings association may include in a home loan contract a provision authorizing the imposition of a late charge with respect to the payment of any delinquent periodic payment. With respect to any loan made after July 31, 1976, on the security of a home occupied or to be occupied by the borrower, no late charge, regardless of form, shall be assessed or collected by a Federal savings association, unless any billing, coupon, or notice the Federal savings association may provide regarding installment payments due on the loan discloses the date after which the charge may be assessed. A Federal savings association may not impose a late charge more than one time for late payment of the same installment, and any installment payment made by the borrower shall be applied to the longest outstanding installment due. A Federal savings association shall not assess a late charge as to any payment received by it within fifteen days after the due date of such payment. No form of such late charge permitted by this paragraph shall be considered as interest to the Federal savings association and the Federal savings association shall not deduct late charges from the regular periodic installment payments on the loan, but must collect them as such from the borrower.
Any prepayment on a real estate loan must be applied directly to reduce the principal balance on the loan unless the loan contract or the borrower specifies otherwise. Subject to the terms of the loan contract, a Federal savings association may impose a fee for any prepayment of a loan.
(a) For any home loan secured by borrower-occupied property, or property to be occupied by the borrower, adjustments to the interest rate, payment, balance, or term to maturity must comply with the limitations of this section and the disclosure and notice requirements of 560.210 until superseding regulations are issued by the Consumer Financial Protection Bureau.
(b) Adjustments to the interest rate shall correspond directly to the movement of an index satisfying the requirements of paragraph (d) of this section. A Federal savings association also may increase the interest rate pursuant to a formula or schedule that specifies the amount of the increase, the time at which it may be made, and which is set forth in the loan contract. A Federal savings association may decrease the interest rate at any time.
(c) Adjustments to the payment and the loan balance that do not reflect an interest-rate adjustment may be made if:
(1) The adjustments reflect a change in an index that may be used pursuant to paragraph (d) of this section;
(2) In the case of a payment adjustment, the adjustment reflects a change in the loan balance or is made pursuant to a formula, or to a schedule specifying the percentage or dollar change in the payment as set forth in the loan contract; or
(3) In the case of an open-end line-of-credit loan, the adjustment reflects an advance taken by the borrower under the line-of-credit and is permitted by the loan contract.
(d)(1) Any index used must be readily available and independently verifiable. If set forth in the loan contract, an association may use any combination of indices, a moving average of index values, or more than one index during the term of a loan.
(2) Except as provided in paragraph (d)(3) of this section, any index used must be a national or regional index.
(3) A Federal savings association may use an index not satisfying the requirements of paragraph (d)(2) of this section 30 days after filing a notice unless, within that 30-day period, the OCC has notified the association that the notice presents supervisory concerns or raises significant issues of law or policy. If the OCC notifies the association of such concerns or issues, the Federal savings association may not use such an index unless it applies for and receives the OCC's prior written approval under the standard treatment processing procedures at part 116, subparts A and E of this chapter.
A Federal savings association may invest in the aggregate up to the greater of 1% of its total capital or $250,000 in community development investments of the type permitted for a national bank under 12 CFR part 24.
A Federal savings association may invest in real estate (improved or unimproved) to be used for office and related facilities of the association, or for such office and related facilities and for rental or sale, if such investment is made and maintained under a prudent program of property acquisition to meet the Federal savings association's present needs or its reasonable future needs for office and related facilities. A Federal savings association may not make an investment that would cause the outstanding book value of all such investments (including investments under § 159.4(e)(2) of this chapter) to exceed its total capital.
Pursuant to HOLA section 5(c)(2)(D), a Federal savings association may invest in, sell, or hold commercial paper and corporate debt securities subject to the provisions of this section.
(a)
(i) As of the date of purchase, rated in either one of the two highest categories by at least two nationally recognized investment ratings services as shown by the most recently published rating made of such investments; or
(ii) If unrated, guaranteed by a company having outstanding paper that is rated as provided in paragraph (a)(1)(i) of this section.
(2) Corporate debt securities must be:
(i) Securities that may be sold with reasonable promptness at a price that corresponds reasonably to their fair value; and
(ii) Rated in one of the four highest categories as to the portion of the security in which the association is investing by a nationally recognized investment ratings service at its most recently published rating before the date of purchase of the security.
(3) A Federal savings association's total investment in the commercial paper and corporate debt securities of any one issuer, or issued by any one person or entity affiliated with such issuer, together with other loans, shall not exceed the general lending limitations contained in § 160.93(c) of this part.
(4) Investments in corporate debt securities convertible into stock are subject to the following additional limitations:
(i) The purchase of securities convertible into stock at the option of the issuer is prohibited;
(ii) At the time of purchase, the cost of such securities must be written down to an amount that represents the investment value of the securities considered independently of the conversion feature; and
(iii) Federal savings associations are prohibited from exercising the conversion feature.
(5) A Federal savings association shall maintain information in its files adequate to demonstrate that it has exercised prudent judgment in making investments under this section.
(b) Notwithstanding the limitations contained in this section, the OCC may permit investment in corporate debt securities of another savings association in connection with the purchase or sale of a branch office or in connection with a supervisory merger or acquisition.
(c)
(a)
(b)
(1) The term
(i) The servicing, repair or maintenance of the leased property during the lease term;
(ii) The purchasing of parts and accessories for the leased property, except that improvements and additions to the leased property may be leased to the lessee upon its request in accordance with the full-payout requirements of paragraph (c)(2)(i) of this section;
(iii) The loan of replacement or substitute property while the leased property is being serviced;
(iv) The purchasing of insurance for the lessee, except where the lessee has failed to discharge a contractual
(v) The renewal of any license, registration, or filing for the property unless such action by the Federal savings association is necessary to protect its interest as an owner or financier of the property.
(2) The term
(3) The term
(i) Rentals;
(ii) Estimated tax benefits, if any; and
(iii) The estimated residual value of the property at the expiration of the term of the lease.
(c)
(2)
(i) The lease must be a net, full-payout lease representing a non-cancelable obligation of the lessee, notwithstanding the possible early termination of the lease;
(ii) The portion of the estimated residual value of the property relied upon by the lessor to satisfy the requirements of a full-payout lease must be reasonable in light of the nature of the leased property and all relevant circumstances so that realization of the lessor's full investment plus the cost of financing the property depends primarily on the creditworthiness of the lessee, and not on the residual market value of the leased property; and
(iii) At the termination of a financing lease, either by expiration or default, property acquired must be liquidated or released on a net basis as soon as practicable. Any property held in anticipation of re-leasing must be reevaluated and recorded at the lower of fair market value or book value.
(d)
(e)
(1) As the owner and lessor, take reasonable and appropriate action to salvage or protect the value of the property or its interest arising under the lease;
(2) As the assignee of a lessor's interest in a lease, become the owner and lessor of the leased property pursuant to its contractual right, or take any reasonable and appropriate action to salvage or protect the value of the property or its interest arising under the lease; or
(3) Include any provisions in a lease, or make any additional agreements, to protect its financial position or investment in the circumstances set forth in paragraphs (e)(1) and (e)(2) of this section.
(a)
(b)
(c)
(d)
Pursuant to HOLA section 5(c)(4)(C), a Federal savings association may make foreign assistance investments in an aggregate amount not to exceed one percent of its assets, subject to the following conditions:
(a) For any investment made under the Foreign Assistance Act, the loan agreement shall specify what constitutes an event of default, and provide that upon default in payment of principal or interest under such agreement, the entire amount of outstanding indebtedness thereunder shall become immediately due and payable, at the lender's option. Additionally, the contract of guarantee shall cover 100% of any loss of investment thereunder, except for any portion of the loan arising out of fraud or misrepresentation for which the party seeking payment is responsible, and provide that the guarantor shall pay for any such loss in U.S. dollars within a specified reasonable time after the date of application for payment.
(b) To make any investments in the share capital and capital reserve of the Inter-American Savings and Loan Bank, a Federal savings association must be adequately capitalized and have adequate allowances for loan and lease losses. The Federal savings association's aggregate investment in such capital or capital reserve, including the amount of any obligations undertaken to provide said Bank with reserve capital in the future (call-able capital), must not, as a result of such investment, exceed the lesser of one-quarter of 1% of its assets or $100,000.
A Federal savings association may issue letters of credit and may issue such other independent undertakings as are approved by the OCC, subject to the restrictions in § 160.120.
Pursuant to section 5(b)(2) of the HOLA, a Federal savings association may enter into a repayable suretyship or guaranty agreement, subject to the conditions in this section.
(a)
(b)
(1) The Federal savings association must limit its obligations under the agreement to a fixed dollar amount and a specified duration.
(2) The Federal savings association's performance under the agreement must create an authorized loan or other investment.
(3) The Federal savings association must treat its obligation under the agreement as a loan to the principal for purposes of §§ 160.93 and 163.43 of this chapter.
(4) The Federal savings association must take and maintain a perfected security interest in collateral sufficient to cover its total obligation under the agreement.
(c)
(i) If the collateral is real estate, the Federal savings association must establish the value by a signed appraisal or evaluation in accordance with part 164 of this chapter. In determining the value of the collateral, the Federal savings association must factor in the value of any existing senior mortgages, liens or other encumbrances on the property, except those held by the principal to the suretyship or guaranty agreement.
(ii) If the collateral is marketable securities, the Federal savings association must be authorized to invest in that security taken as collateral. The Federal savings association must ensure that the value of the security is 110 percent of the obligation at all times during the term of agreement.
(2) The Federal savings association may take and maintain a perfected security interest in collateral which is at all times equal to at least 100 percent of its obligation, if the collateral is:
(i) Cash;
(ii) Obligations of the United States or its agencies;
(iii) Obligations fully guarantied by the United States or its agencies as to principal and interest; or
(iv) Notes, drafts, or bills of exchange or bankers' acceptances that are eligible for rediscount or purchase by a Federal Reserve Bank.
(a)
(b)
(1) The term
(2) The term
(3)
(4)
(5) The term
(i) No new funds are advanced by the association to the borrower; and
(ii) The association is not placed in a more detrimental position as a result of the sale.
(6) [Reserved]
(7)
(8)
(9)
(10) A
(11)
(i) A savings association's core capital and supplementary capital included in its total capital under part 167 of this chapter; plus
(ii) The balance of a savings association's allowance for loan and lease losses not included in supplementary capital under part 167 of this chapter; plus
(iii) The amount of a savings association's loans to, investments in, and advances to subsidiaries not included in calculating core capital under part 167 of this chapter.
(c)
(1) The total loans and extensions of credit by a savings association to one borrower outstanding at one time and not fully secured, as determined in the same manner as determined under 12 U.S.C. 84(a)(2), by collateral having a market value at least equal to the amount of the loan or the extension of credit shall not exceed 15 percent of the unimpaired capital and unimpaired surplus of the association.
(2) The total loans and extensions of credit by a savings association to one borrower outstanding at one time and fully secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, at least equal to the amount of the funds outstanding shall not exceed 10 per centum of the unimpaired capital and unimpaired surplus of the association. This limitation shall be separate from and in addition to the limitation contained in paragraph (c)(1) of this section.
(d)
(2)
(3)
(i) The final purchase price of each single family dwelling unit the development of which is financed under this paragraph (d)(3) does not exceed $500,000;
(ii) The savings association is, and continues to be, in compliance with its capital requirements under part 167 of this chapter.
(iii) The appropriate Federal banking agency permits, subject to conditions it may impose, the savings association to use the higher limit set forth under this paragraph (d)(3). A savings association that meets the requirements of paragraphs (d)(3)(i), (ii), (iv) and (v) of this section and that meets the requirements for “expedited treatment” under § 116.5 of this chapter may use the higher limit set forth under this paragraph (d)(3) if the savings association has filed a notice with the appropriate Federal banking agency that it intends to use the higher limit at least 30 days prior to the proposed use. A savings association that meets the requirements of paragraphs (d)(3)(i), (ii), (iv), and (v) of this section and that meets the requirements for “standard treatment” under § 116.5 of this chapter may use the higher limit set forth under this paragraph (d)(3) if the savings association has filed an application with the appropriate Federal banking agency and the agency has approved the use the higher limit;
(iv) Loans made under this paragraph (d)(3) to all borrowers do not, in aggregate, exceed 150 percent of the savings association's unimpaired capital and unimpaired surplus; and
(v) Such loans comply with the applicable loan-to-value requirements that apply to Federal savings associations.
(4) The authority of a savings association to make a loan or extension of credit under the exception in paragraph (d)(3) of this section ceases immediately upon the association's failure to comply with any one of the requirements set forth in paragraph (d)(3) of this section or any condition(s) set forth in an order issued by the appropriate Federal banking agency under paragraph (d)(3)(iii) of this section.
(5) Notwithstanding the limit set forth in paragraphs (c)(1) and (c)(2) of this section, a savings association may invest up to 10 percent of unimpaired capital and unimpaired surplus in the obligations of one issuer evidenced by:
(i) Commercial paper rated, as of the date of purchase, as shown by the most recently published rating by at least two nationally recognized investment rating services in the highest category; or
(ii) Corporate debt securities that may be sold with reasonable promptness at a price that corresponds reasonably to their fair value, and that are rated in one of the two highest categories by a nationally recognized investment rating service in its most recently published ratings before the date of purchase of the security.
(e)
(f)
(2) If a savings association or subsidiary thereof makes a loan or extension of credit to any one borrower, as defined in paragraph (b)(1) of this section, in an amount that, when added to the total balances of all outstanding loans owed to such association and its subsidiary by such borrower, exceeds the greater of $500,000 or 5 percent of unimpaired capital and unimpaired surplus, the records of such association or its subsidiary with respect to such loan shall include documentation showing that such loan was made within the limitations of paragraphs (c) and (d) of this section; for the purpose of such documentation such association or subsidiary may require, and may accept in good faith, a certification by the borrower identifying the persons, entities, and interests described in the definition of one borrower in paragraph (b)(1) of this section.
(g) [Reserved]
(h)
1. The § 160.93(d)(3) exception for loans to one person to develop domestic residential housing units is characterized in the regulation as an “alternative” limit. This exceptional $30,000,000 or 30 percent limitation does not operate
2. This result does not change even if the facts are altered to assume that some or all of the $800,000 amount of lending permissible under the General Limitation's 15 percent basket is not used, or is devoted to the development of domestic residential housing units.
In other words, using the above example, if Association A lends Y $400,000 for commercial purposes and $300,000 for residential purposes—both of which would be permitted under the Association's $800,000 General Limitation—Association A's remaining permissible lending to Y would be: First, an additional $100,000 under the General Limitation, and then another $800,000 to develop domestic residential housing units if the Association meets the paragraph (d)(3) prerequisites. (The latter is $800,000 because in no event may the total lending to Y exceed 30 percent of unimpaired capital and unimpaired surplus). If Association A did not lend Y the remaining $100,000 permissible under the General Limitation, its permissible loans to develop domestic residential housing units under paragraph (d)(3) would be $900,000 instead of $800,000 (the total loans to Y would still equal $1,600,000).
3. In short, under the paragraph (d)(3) exception, the 30 percent or $30,000,000 limit will always operate as the uppermost limitation, unless of course the association does not avail itself of the exception and merely relies upon its General Limitation.
1. Numerous questions have been received regarding the allocation of loans between the different lending limit “baskets,”
2. In June, Association A receives authorization to lend under the Residential Development exception. In July, Association A lends $3 million to Borrower to develop domestic residential housing units. In August, Borrower seeks an additional $12 million commercial loan from Association A. Association A cannot make the loan to Borrower, however, because it already has an outstanding $10 million loan to Borrower that counts against Association A's General Limitation of $15 million. Thus, Association A may lend only up to an additional $5 million to Borrower under the General Limitation.
3. However, Association A may be able to reallocate the $10 million loan it made to Borrower in January to its Residential Development basket provided that: (1) Association A has obtained authority under an order issued by the appropriate Federal banking agency to avail itself of the additional lending authority for residential development and maintains compliance with all prerequisites to such lending authority; (2) the original $10 million loan made in January constitutes a loan to develop domestic residential housing units as defined; and (3) the housing unit(s) constructed with the funds from the January loan remain in a stage of “development” at the time Association A reallocates the loan to the domestic residential housing basket. The project must be in a stage of acquisition, development, construction, rehabilitation, or conversion in order for the loan to be reallocated.
4. If Association A is able to reallocate the $10 million loan made to Borrower in January to its Residential Development basket, it may make the $12 million commercial loan requested by Borrower in August. Once the January loan is reallocated to the Residential Development basket, however, the $10 million loan counts towards Association's 150 percent aggregate limitation on loans to all borrowers under the residential development basket (section 5(u)(2)(A)(ii)(IV)).
5. If Association A reallocates the January loan to its domestic residential housing basket and makes an additional $12 million commercial loan to Borrower, Association A's totals under the respective limitations would be: $12 million under the General Limitation; and $13 million under the Residential Development limitation. The full $13 million residential development loan counts toward Association A's aggregate 150 percent limitation.
This section, and § 160.101 of this subpart, issued pursuant to section 304 of the Federal Deposit Insurance
(a) Each Federal savings association shall adopt and maintain written policies that establish appropriate limits and standards for extensions of credit that are secured by liens on or interests in real estate, or that are made for the purpose of financing permanent improvements to real estate.
(b)(1) Real estate lending policies adopted pursuant to this section must:
(i) Be consistent with safe and sound banking practices;
(ii) Be appropriate to the size of the institution and the nature and scope of its operations; and
(iii) Be reviewed and approved by the savings association's board of directors at least annually.
(2) The lending policies must establish:
(i) Loan portfolio diversification standards;
(ii) Prudent underwriting standards, including loan-to-value limits, that are clear and measurable;
(iii) Loan administration procedures for the savings association's real estate portfolio; and
(iv) Documentation, approval, and reporting requirements to monitor compliance with the savings association's real estate lending policies.
(c) Each Federal savings association must monitor conditions in the real estate market in its lending area to ensure that its real estate lending policies continue to be appropriate for current market conditions.
(d) The real estate lending policies adopted pursuant to this section should reflect consideration of the Interagency Guidelines for Real Estate Lending Policies established by the Federal bank and thrift supervisory agencies.
The agencies' regulations require that each insured depository institution adopt and maintain a written policy that establishes appropriate limits and standards for all extensions of credit that are secured by liens on or interests in real estate or made for the purpose of financing the construction of a building or other improvements.
Each institution's policies must be comprehensive, and consistent with safe and sound lending practices, and must ensure that the institution operates within limits and according to standards that are reviewed and approved at least annually by the board of directors. Real estate lending is an integral part of many institutions' business plans and, when undertaken in a prudent manner, will not be subject to examiner criticism.
The lending policy should contain a general outline of the scope and distribution of the institution's credit facilities and the manner in which real estate loans are made, serviced, and collected. In particular, the institution's policies on real estate lending should:
• Identify the geographic areas in which the institution will consider lending.
• Establish a loan portfolio diversification policy and set limits for real estate loans by type and geographic market (
• Identify appropriate terms and conditions by type of real estate loan.
• Establish loan origination and approval procedures, both generally and by size and type of loan.
• Establish prudent underwriting standards that are clear and measurable, including loan-to-value limits, that are consistent with these supervisory guidelines.
• Establish review and approval procedures for exception loans, including loans with loan-to-value percentages in excess of supervisory limits.
• Establish loan administration procedures, including documentation, disbursement, collateral inspection, collection, and loan review.
• Establish real estate appraisal and evaluation programs.
• Require that management monitor the loan portfolio and provide timely and adequate reports to the board of directors.
The institution should consider both internal and external factors in the formulation of its loan policies and strategic plan. Factors that should be considered include:
• The size and financial condition of the institution.
• The expertise and size of the lending staff.
• The need to avoid undue concentrations of risk.
• Compliance with all real estate related laws and regulations, including the Community Reinvestment Act, anti-discrimination laws, and for savings associations, the Qualified Thrift Lender test.
• Market conditions.
The institution should monitor conditions in the real estate markets in its lending area so that it can react quickly to changes in market conditions that are relevant to its lending decisions. Market supply and demand factors that should be considered include:
• Demographic indicators, including population and employment trends.
• Zoning requirements.
• Current and projected vacancy, construction, and absorption rates.
• Current and projected lease terms, rental rates, and sales prices, including concessions.
• Current and projected operating expenses for different types of projects.
• Economic indicators, including trends and diversification of the lending area.
• Valuation trends, including discount and direct capitalization rates.
Prudently underwritten real estate loans should reflect all relevant credit factors, including:
• The capacity of the borrower, or income from the underlying property, to adequately service the debt.
• The value of the mortgaged property.
• The overall creditworthiness of the borrower.
• The level of equity invested in the property.
• Any secondary sources of repayment.
• Any additional collateral or credit enhancements (such as guarantees, mortgage insurance or takeout commitments).
The lending policies should reflect the level of risk that is acceptable to the board of directors and provide clear and measurable underwriting standards that enable the institution's lending staff to evaluate these credit factors. The underwriting standards should address:
• The maximum loan amount by type of property.
• Maximum loan maturities by type of property.
• Amortization schedules.
• Pricing structure for different types of real estate loans.
• Loan-to-value limits by type of property.
For development and construction projects, and completed commercial properties, the policy should also establish, commensurate with the size and type of the project or property:
• Requirements for feasibility studies and sensitivity and risk analyses (
• Minimum requirements for initial investment and maintenance of hard equity by the borrower (
• Minimum standards for net worth, cash flow, and debt service coverage of the borrower or underlying property.
• Standards for the acceptability of and limits on non-amortizing loans.
• Standards for the acceptability of and limits on the use of interest reserves.
• Pre-leasing and pre-sale requirements for income-producing property.
• Pre-sale and minimum unit release requirements for non-income-producing property loans.
• Limits on partial recourse or nonrecourse loans and requirements for guarantor support.
• Requirements for takeout commitments.
• Minimum covenants for loan agreements.
The institution should also establish loan administration procedures for its real estate portfolio that address:
• Documentation, including:
Type and frequency of financial statements, including requirements for verification of information provided by the borrower;
Type and frequency of collateral evaluations (appraisals and other estimates of value).
• Loan closing and disbursement.
• Payment processing.
• Escrow administration.
• Collateral administration.
• Loan payoffs.
• Collections and foreclosure, including:
Delinquency follow-up procedures;
Foreclosure timing;
Extensions and other forms of forbearance;
Acceptance of deeds in lieu of foreclosure.
• Claims processing (
• Servicing and participation agreements.
Institutions should establish their own internal loan-to-value limits for real estate loans. These internal limits should not exceed the following supervisory limits:
The supervisory loan-to-value limits should be applied to the underlying property that collateralizes the loan. For loans that fund multiple phases of the same real estate project (
In establishing internal loan-to-value limits, each lender is expected to carefully consider the institution-specific and market factors listed under “Loan Portfolio Management Considerations,” as well as any other relevant factors, such as the particular subcategory or type of loan. For any subcategory of loans that exhibits greater credit risk than the overall category, a lender should consider the establishment of an internal loan-to-value limit for that subcategory that is lower than the limit for the overall category.
The loan-to-value ratio is only one of several pertinent credit factors to be considered when underwriting a real estate loan. Other credit factors to be taken into account are highlighted in the “Underwriting Standards” section above. Because of these other factors, the establishment of these supervisory limits should not be interpreted to mean that loans at these levels will automatically be considered sound.
The agencies recognize that appropriate loan-to-value limits vary not only among categories of real estate loans but also among individual loans. Therefore, it may be appropriate in individual cases to originate or purchase loans with loan-to-value ratios in excess of the supervisory loan-to-value limits, based on the support provided by other credit factors. Such loans should be identified in the institutions' records, and their aggregate amount reported at least quarterly to the institution's board of directors. (
In determining the aggregate amount of such loans, institutions should: (a) Include all loans secured by the same property if any one of those loans exceeds the supervisory loan-to-value limits; and (b) include the recourse obligation of any such loan sold with recourse. Conversely, a loan should no longer be reported to the directors as part of aggregate totals when reduction in principal or senior liens, or additional contribution of collateral or equity (
The agencies also recognize that there are a number of lending situations in which other factors significantly outweigh the need to apply the supervisory loan-to-value limits.
These include:
• Loans guaranteed or insured by the U.S. government or its agencies, provided that the amount of the guaranty or insurance is at least equal to the portion of the loan that exceeds the supervisory loan-to-value limit.
• Loans backed by the full faith and credit of a state government, provided that the amount of the assurance is at least equal to the portion of the loan that exceeds the supervisory loan-to-value limit.
• Loans guaranteed or insured by a state, municipal or local government, or an agency thereof, provided that the amount of the guaranty or insurance is at least equal to the portion of the loan that exceeds the supervisory loan-to-value limit, and provided that the lender has determined that the guarantor or insurer has the financial capacity and willingness to perform under the terms of the guaranty or insurance agreement.
• Loans that are to be sold promptly after origination, without recourse, to a financially responsible third party.
• Loans that are renewed, refinanced, or restructured without the advancement of new funds or an increase in the line of credit (except for reasonable closing costs), or loans that are renewed, refinanced, or restructured in connection with a workout situation, either with or without the advancement of new funds, where consistent with safe and
• Loans that facilitate the sale of real estate acquired by the lender in the ordinary course of collecting a debt previously contracted in good faith.
• Loans for which a lien on or interest in real property is taken as additional collateral through an abundance of caution by the lender
• Loans, such as working capital loans, where the lender does not rely principally on real estate as security and the extension of credit is not used to acquire, develop, or construct permanent improvements on real property.
• Loans for the purpose of financing permanent improvements to real property, but not secured by the property, if such security interest is not required by prudent underwriting practice.
Some provision should be made for the consideration of loan requests from creditworthy borrowers whose credit needs do not fit within the institution's general lending policy. An institution may provide for prudently underwritten exceptions to its lending policies, including loan-to-value limits, on a loan-by-loan basis. However, any exceptions from the supervisory loan-to-value limits should conform to the aggregate limits on such loans discussed above.
The board of directors is responsible for establishing standards for the review and approval of exception loans. Each institution should establish an appropriate internal process for the review and approval of loans that do not conform to its own internal policy standards. The approval of any such loan should be supported by a written justification that clearly sets forth all of the relevant credit factors that support the underwriting decision. The justification and approval documents for such loans should be maintained as a part of the permanent loan file. Each institution should monitor compliance with its real estate lending policy and individually report exception loans of a significant size to its board of directors.
The real estate lending policies of institutions will be evaluated by examiners during the course of their examinations to determine if the policies are consistent with safe and sound lending practices, these guidelines, and the requirements of the regulation. In evaluating the adequacy of the institution's real estate lending policies and practices, examiners will take into consideration the following factors:
• The nature and scope of the institution's real estate lending activities.
• The size and financial condition of the institution.
• The quality of the institution's management and internal controls.
• The expertise and size of the lending and loan administration staff.
• Market conditions.
Lending policy exception reports will also be reviewed by examiners during the course of their examinations to determine whether the institutions' exceptions are adequately documented and appropriate in light of all of the relevant credit considerations. An excessive volume of exceptions to an institution's real estate lending policy may signal a weakening of its underwriting practices, or may suggest a need to revise the loan policy.
For the purposes of these Guidelines:
(1) The total amount of any loan, line of credit, or other legally binding lending commitment with respect to real property; and
(2) The total amount, based on the amount of consideration paid, of any loan, line of credit, or other legally binding lending commitment acquired by a lender by purchase, assignment, or otherwise.
(1) Farmland, ranchland or timberland committed to ongoing management and agricultural production;
(2) 1- to 4-family residential property that is not owner-occupied;
(3) Residential property containing five or more individual dwelling units;
(4) Completed commercial property; or
(5) Other income-producing property that has been completed and is available for occupancy and use, except income-producing owner-occupied 1- to 4-family residential property.
(a)
(b)
(c)
(a)
(b)
(i) The independent character of the letter of credit or approved undertaking should be apparent from its terms (such as terms that subject it to laws or rules providing for its independent character);
(ii) The letter of credit or approved undertaking should be limited in amount;
(iii) The letter of credit or approved undertaking should:
(A) Be limited in duration; or
(B) Permit the savings association to terminate the letter of credit or approved undertaking, either on a periodic basis (consistent with the savings association's ability to make any necessary credit assessments) or at will upon either notice or payment to the beneficiary; or
(C) Entitle the savings association to cash collateral from the account party on demand (with a right to accelerate the customer's obligations, as appropriate); and
(iv) The savings association either should be fully collateralized or have a post-honor right of reimbursement from its customer or from another issuer of a letter of credit or an independent undertaking. Alternatively, if the savings association's undertaking is to purchase documents of title, securities, or other valuable documents, it should obtain a first priority right to realize on the documents if the savings association is not otherwise to be reimbursed.
(2)
(i) In the event that the undertaking is to honor by delivery of an item of value other than money, the savings association should ensure that market fluctuations that affect the value of the item will not cause the savings association to assume undue market risk;
(ii) In the event that the undertaking provides for automatic renewal, the terms for renewal should allow the savings association to make any necessary credit assessment prior to renewal;
(iii) In the event that a savings association issues an undertaking for its own account, the underlying transaction for which it is issued must be within the savings association's authority and comply with any safety and soundness requirements applicable to that transaction.
(3)
(4)
(a) Any Federal savings association to the extent it has legal authority to do so, may make investments in, commitments to invest in, loans to, or commitments to lend to any state housing corporation; provided, that such obligations or loans are secured directly, or indirectly through a fiduciary, by a first lien on improved real estate which is insured under the National Housing Act, as amended, and that in the event of default, the holder of such obligations or loans has the right directly, or indirectly through a fiduciary, to subject to the satisfaction of such obligations or loans the real estate described in the first lien, or the insurance proceeds.
(b) Any Federal savings association that is adequately capitalized may, to the extent it has legal authority to do so, invest in obligations (including loans) of, or issued by, any state housing corporation incorporated in the state in which such savings association has its
(1) The obligations are rated in one of the four highest grades as shown by the most recently published rating made of such obligations by a nationally recognized rating service; or
(2) The obligations, if not rated, are approved by the OCC. The aggregate outstanding direct investment in obligations under paragraph (b) of this section shall not exceed the amount of the savings association's total capital.
(c) Each state housing corporation in which a savings association invests under the authority of paragraph (b) of this section shall agree, before accepting any such investment (including any loan or loan commitment), to make available at any time to the OCC such information as the OCC may consider to be necessary to ensure that investments are properly made under this section.
If you are a director, officer, or other natural person having the power to direct the management or policies of a Federal savings association, you must not receive, directly or indirectly, any commission, fee, or other compensation in connection with the procurement of any loan made by the savings association or a subsidiary of the savings association.
(a)(1) Each savings association must evaluate and classify its assets on a regular basis in a manner consistent with, or reconcilable to, the asset classification system used by the OCC.
(2) In connection with the examination of a savings association or its affiliates, OCC examiners may identify problem assets and classify them, if appropriate. The association must recognize such examiner classifications in its subsequent reports to the OCC.
(b) Based on the evaluation and classification of its assets, each savings association shall establish adequate valuation allowances or charge-offs, as appropriate, consistent with generally accepted accounting principles and the practices of the Federal banking agencies.
In establishing and maintaining its records pursuant to § 163.170 of this chapter, each Federal savings association and service corporation should establish and maintain loan documentation practices that:
(a) Ensure that the institution can make an informed lending decision and can assess risk on an ongoing basis;
(b) Identify the purpose and all sources of repayment for each loan, and assess the ability of the borrower(s) and any guarantor(s) to repay the indebtedness in a timely manner;
(c) Ensure that any claims against a borrower, guarantor, security holders, and collateral are legally enforceable;
(d) Demonstrate appropriate administration and monitoring of its loans; and
(e) Take into account the size and complexity of its loans.
A Federal savings association shall appraise each parcel of real estate owned at the earlier of in-substance foreclosure or at the time of the savings association's acquisition of such property, and at such times thereafter as dictated by prudent management policy; such appraisals shall be consistent with the requirements of part 164 of this chapter. The Comptroller or his or her designee may require subsequent appraisals if, in his or her discretion, such subsequent appraisal is necessary under the particular circumstances. The foregoing requirement shall not apply to any parcel of real estate that is sold and reacquired less than 12 months subsequent to the most recent appraisal made pursuant to this part. A dated, signed copy of each report of appraisal made pursuant to any provisions of this part shall be retained in the savings association's records.
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 5412(b)(2)(B).
The definitions in this part and in 12 CFR part 141 apply throughout parts 100-199 of this chapter, unless another definition is specifically provided.
The term
The term
The term
(a) Of which a savings association, directly or indirectly, owns or controls either a majority of the voting shares or more than 50 per centum of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its
(b) Of which control is held, directly or indirectly through stock ownership or in any other manner, by the shareholders of a savings association who own or control either a majority of the shares of such savings association or more than 50 per centum of the number of shares voted for the election of directors of such savings association at the preceding election, or by trustees for the benefit of the shareholders of any such savings association; or
(c) Of which a majority of its directors, trustees, or other persons exercising similar functions are directors of any one savings association.
The term
(a) A director, officer, or controlling person of such association;
(b) A spouse of a director, officer, or controlling person of such association;
(c) A member of the immediate family of a director, officer, or controlling person of such association, who has the same home as such person or who is a director or officer of any subsidiary of such association or of any holding company affiliate of such association;
(d) Any corporation or organization (other than the savings association or a corporation or organization through which the savings association operates) of which a director, officer or the controlling person of such association:
(1) Is chief executive officer, chief financial officer, or a person performing similar functions;
(2) Is a general partner;
(3) Is a limited partner who, directly or indirectly either alone or with his or her spouse and the members of his or her immediate family who are also affiliated persons of the association, owns an interest of 10 percent or more in the partnership (based on the value of his or her contribution) or who, directly or indirectly with other directors, officers, and controlling persons of such association and their spouses and their immediate family members who are also affiliated persons of the association, owns an interest of 25 percent or more in the partnership; or
(4) Directly or indirectly either alone or with his or her spouse and the members of his or her immediate family who are also affiliated persons of the association, owns or controls 10 percent or more of any class of equity securities or owns or controls, with other directors, officers, and controlling persons of such association and their spouses and their immediate family members who are also affiliated persons of the association, 25 percent or more of any class of equity securities; and
(5) Any trust or other estate in which a director, officer, or controlling person of such association or the spouse of such person has a substantial beneficial interest or as to which such person or his or her spouse serves as trustee or in a similar fiduciary capacity.
The
The term
The term
The term
The term
The term
(a) Obtained in connection with an annual solicitation of proxies, or
(b) Obtained from savings account holders and borrowers if such proxies are voted as directed by a majority vote of the entire board of directors of such association, or of a committee of such directors if such committee's composition and authority are controlled by a majority vote of the entire board and if its authority is revocable by such a majority.
The terms
The term
(a) The term
(b) [Reserved]
The term
The term
(a) Such person's spouse, father, mother, children, brothers, sisters, and grandchildren;
(b) The father, mother, brothers, and sisters of such person's spouse; and
(c) The spouse of a child, brother, or sister of such person.
The term
(a) Secured by real estate upon which all facilities and improvements have been completely installed, as required by local regulations and practices, so that it is entirely prepared for the erection of structures;
(b) To finance the purchase of land and the accomplishment of all improvements required to convert it to developed building lots; or
(c) Secured by land upon which there is no structure.
The term
(a) Money Market Deposit Accounts (MMDAs) offered by Federal savings associations in accordance with 12 U.S.C. 1464(b)(1) and by state-chartered savings associations in accordance with applicable state law are savings accounts on which interest may be paid if issued subject to the following limitations:
(1) The savings association shall reserve the right to require at least seven days' notice prior to withdrawal or transfer of any funds in the account; and
(2)(i) The depositor is authorized by the savings association to make no more than six transfers per calendar month or statement cycle (or similar period) of at least four weeks by means of preauthorized, automatic, telephonic, or data transmission agreement, order, or instruction to another account of the depositor at the same savings association to the savings association itself, or to a third party.
(ii) Savings associations may permit holders of MMDAs to make unlimited transfers for the purpose of repaying loans (except overdraft loans on the depositor's demand account) and associated expenses at the same savings association (as originator or servicer), to make unlimited transfers of funds from this account to another account of the same depositor at the same savings association or to make unlimited payments directly to the depositor from the account when such transfers or payments are made by mail, messenger, automated teller machine, or in person, or when such payments are made by telephone (via check mailed to the depositor).
(3) In order to ensure that no more than the number of transfers specified in paragraph (a)(2)(i) of this section are made, a savings association must either:
(i) Prevent transfers of funds in excess of the limitations; or
(ii) Adopt procedures to monitor those transfers on an after-the-fact basis and contact customers who exceed the limits on more than an occasional basis. For customers who continue to violate those limits after being contacted by the depository savings association the depository savings association must either place funds in another account that the depositor is eligible to maintain or take away the account's transfer and draft capacities.
(iii) Insured savings association at their option, may use on a consistent basis either the date on a check or the date it is paid in determining whether the transfer limitations within the specified interval are exceeded.
(b) Federal savings associations may offer MMDAs to any depositor, and state-chartered savings associations may offer MMDAs to any depositor not inconsistent with applicable state law.
(a) Negotiable Order of Withdrawal (NOW) accounts are savings accounts authorized by 12 U.S.C. 1832 on which the savings association reserves the right to require at least seven days' notice prior to withdrawal or transfer of any funds in the account.
(b) For purposes of 12 U.S.C. 1832:
(1) An organization shall be deemed “operated primarily for religious, philanthropic, charitable, educational, or other similar purposes and * * * not * * * for profit” if it is described in sections 501(c)(3) through (13), 501(c)(19), or 528 of the Internal Revenue Code; and
(2) The funds of a sole proprietorship or unincorporated business owned by a husband and wife shall be deemed beneficially owned by “one or more individuals.”
The term
The term
The term
The term
The term
The term
The term
(a) The creation of which subdivision or department has been expressly authorized by state statute,
(b) To which some functions of government have been delegated by state statute, and
(c) To which funds have been allocated by statute or ordinance for its exclusive use and control. It also includes drainage, irrigation, navigation, improvement, levee, sanitary, school or power districts and bridge or port
The term
The term
The term
The term
The term
The term
The term
The term
The term
The term
The term
(a) The term
(1) The amount of any insurance or guarantee against loss in the event of default provided by a third party,
(2) The amount of any loss to be borne by the purchaser in the event of default, and
(3) The amount of any loss resulting from a recourse obligation entered on the books and records of the savings association.
(b) The term
(1) To hold or retain a subordinate interest in a specified percentage of the loans or interests; or
(2) To guarantee against loss up to a specified percentage of the loans or interests, which specified percentage shall not exceed ten percent of the outstanding balance of the loans or interests at the time of sale:
(c) This definition does not apply for purposes of determining the capital adequacy requirements under part 167 of this chapter.
12 U.S.C. 1463, 5412(b)(2)(B).
(a)
(b)
(2)
(a)
(b)
(i) Incorporate GAAP whenever GAAP is the referenced accounting instruction for regulatory reports to the Federal banking agencies;
(ii) Incorporate safe and sound practices contained in OCC regulations, bulletins, examination handbooks and instructions to regulatory reports. Such safety and soundness requirements shall be no less stringent than those applied by the Comptroller of the Currency for national banks; and
(iii) Incorporate additional safety and soundness requirements more stringent than GAAP, as the Comptroller may prescribe.
(2)
(3)
(a)
(b)
(c)
(2) The Comptroller may waive the independent audit requirement described at paragraph (b)(1) of this section, if the Comptroller determines that an audit would not provide further information on safety and soundness issues relevant to the examination rating.
(3) When the OCC requires the application of procedures agreed upon for safety and soundness purposes, the Comptroller shall identify the procedures to be performed. The Comptroller shall also determine whether the agreed upon procedures were conducted and filed in a manner satisfactory to the OCC.
(d)
(1) Is registered or licensed to practice as a public accountant, and is in good standing, under the laws of the state or other political subdivision of the United States in which the savings association's or holding company's principal office is located;
(2) Agrees in the engagement letter to provide the OCC with access to and copies of any work papers, policies, and procedures relating to the services performed;
(3)(i) Is in compliance with the American Institute of Certified Public Accountants' (AICPA) Code of Professional Conduct; and
(ii) Meets the independence requirements and interpretations of the Securities and Exchange Commission and its staff; and
(4) Has received, or is enrolled in, a peer review program that meets guidelines acceptable to the OCC.
(e)
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1817, 1820, 1828, 1831o, 3806, 5101
(a)
(b)
Every security issued by a Federal savings association must include in its provisions a clear statement that the security is not insured by the Federal Deposit Insurance Corporation.
(a) No Federal savings association may, without application to and approval by the OCC:
(1) Combine with any insured depository institution, if the acquiring or resulting institution is to be a Federal savings association; or
(2) Assume liability to pay any deposit made in, any insured depository institution.
(b)(1) No Federal savings association may, without notifying the OCC, as provided in paragraph (h)(1) of this section:
(i) Combine with another insured depository institution where a Federal savings association is not the resulting institution; or
(ii) In the case of a savings association that meets the conditions for expedited treatment under § 116.5 of this chapter, convert, directly or indirectly, to a national or state bank.
(2) A Federal savings association that does not meet the conditions for expedited treatment under § 116.5 of this chapter may not, directly or indirectly, convert to a national or state bank without prior application to and approval of the OCC, as provided in paragraph (h)(2)(ii) of this section.
(c) No Federal savings association may make any transfer (excluding transfers subject to paragraphs (a) or (b) of this section) without notice or application to the OCC, as provided in paragraph (h)(2) of this section. For purposes of this paragraph, the term “transfer” means purchases or sales of assets or liabilities in bulk not made in the ordinary course of business including, but not limited to, transfers of assets or savings account liabilities, purchases of assets, and assumptions of deposit accounts or other liabilities, and combinations with a depository institution other than an insured depository institution.
(d)(1) In determining whether to confer approval for a transaction under paragraphs (a), (b)(2), or (c) of this section, the OCC shall take into account the following:
(i) The capital level of any resulting Federal savings association;
(ii) The financial and managerial resources of the constituent institutions;
(iii) The future prospects of the constituent institutions;
(iv) The convenience and needs of the communities to be served;
(v) The conformity of the transaction to applicable law, regulation, and supervisory policies;
(vi) Factors relating to the fairness of and disclosure concerning the transaction, including, but not limited to:
(A)
(B)
(C)
(D)
(
(
(E) The accounting and tax treatment of the transaction; and
(F) Fees paid and professional services rendered in connection with the transaction.
(2) In conferring approval of a transaction under paragraph (a) of this section, the OCC also will consider the competitive impact of the transaction, including whether:
(i) The transaction would result in a monopoly, or would be in furtherance of any monopoly or conspiracy to monopolize or to attempt to monopolize the savings association business in any part of the United States; or
(ii) The effect of the transaction on any section of the country may be substantially to lessen competition, or tend to create a monopoly, or in any other manner would be in restraint of trade, unless the OCC finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the communities to be served.
(3) Applications and notices filed under this section shall be upon forms prescribed by the OCC.
(4) Applications filed under paragraph (a) of this section must be processed in accordance with the time frames set forth in §§ 116.210 through 116.290 of this chapter, provided that the period for review may be extended only if the OCC determines that the applicant has failed to furnish all requested information or that the information submitted is substantially inaccurate, in which case the review period may be extended for up to 30 days.
(e)(1) The following procedures apply to applications described in paragraph (a) of this section, unless the OCC finds that it must act immediately to prevent the probable default of one of the depository institutions involved:
(i) The applicant must publish a public notice of the application in accordance with the procedures in subpart B of part 116 of this chapter. In addition to the initial publication, the applicant must also publish on a weekly basis during the public comment period.
(ii) Commenters may submit comments on an application in accordance with the procedures in subpart C of part 116 of this chapter. The public comment period is 30 calendar days after the date of publication of the initial public notice. However, if the OCC has advised the Attorney General that an emergency exists requiring expeditious action, the public comment period is 10 calendar days after the date of publication of the initial public notice.
(iii) The OCC may arrange a meeting in accordance with the procedures in subpart D of part 116 of this chapter.
(iv) The OCC will request the Attorney General to provide reports on the competitive impacts involved in the transaction.
(v) The OCC will immediately notify the Attorney General of the approval of the transaction. The applicant may not consummate the transaction before the date established under 12 U.S.C. 1828(c)(6).
(2) For applications described in § 163.22, certain savings associations described below must provide affected accountholders with a notice of a proposed account transfer and an option of retaining the account in the transferring Federal savings association. The notice must allow affected accountholders at least 30 days to consider whether to retain their accounts in the transferring Federal savings association. The following savings associations must provide the notices:
(i) A Federal savings association transferring account liabilities to an institution the accounts of which are not insured by the Deposit Insurance Fund or the National Credit Union Share Insurance Fund; and
(ii) Any mutual Federal savings association transferring account liabilities to a stock form depository institution.
(f)
(1) The acquiring Federal savings association does not meet the criteria for expedited treatment under § 116.5 of this chapter;
(2) The OCC recommends the imposition of non-standard conditions prior to approving the application;
(3) The OCC suspends the applicable processing time frames under § 116.190 of this chapter;
(4) The OCC raises objections to the transaction;
(5) The resulting Federal savings association would be one of the 3 largest depository institutions competing in the relevant geographic area where before the transaction there were 5 or fewer depository institutions, the resulting savings association would have 25 percent or more of the total deposits held by depository institutions in the relevant geographic area, and the share of total deposits would have increased by 5 percent or more;
(6) The resulting Federal savings association would be one of the 2 largest depository institutions competing in the relevant geographic area where before the transaction there were 6 to 11 depository institutions, the resulting savings association would have 30 percent or more of the total deposits held by depositing institutions in the relevant geographic area, and the share of total deposits would have increased by 10 percent or more;
(7) The resulting Federal savings association would be one of the 2 largest
(8) The Herfindahl-Hirschman Index (HHI) in the relevant geographic area was more than 1800 before the transaction, and the increase in the HHI caused by the transaction would be 50 or more;
(9) In a transaction involving potential competition, the OCC determines that the acquiring Federal savings association is one of three or fewer potential entrants into the relevant geographic area;
(10) The acquiring Federal savings association has assets of $1 billion or more and proposes to acquire assets of $1 billion or more;
(11) The Federal savings association that will be the resulting savings association in the transaction has a composite Community Reinvestment Act rating of less than satisfactory and the deficiencies have not been resolved to the satisfaction of the OCC;
(12) The transaction involves any supervisory or assistance agreement with the OCC, Office of Thrift Supervision, the Resolution Trust Corporation, or the Federal Deposit Insurance Corporation;
(13) The transaction is part of a conversion under part 192 of this chapter;
(14) The transaction raises a significant issue of law or policy; or
(15) The transaction is opposed by any constituent institution or contested by a competing acquiror.
(g)
(2)
(3) With regard to paragraph (f) of this section, the term
(h)
(ii) The notification may be in the form of either a letter describing the material features of the transaction or a copy of a filing made with another Federal or state regulatory agency seeking approval from that agency for the transaction under the Bank Merger Act or other applicable statute. If the action contemplated by the notification is not completed within one year after the OCC's receipt of the notification, a new notification must be submitted to the OCC.
(2)
(ii)
No Federal savings association shall use advertising (which includes print or broadcast media, displays or signs, stationery, and all other promotional materials), or make any representation which is inaccurate in any particular or which in any way misrepresents its services, contracts, investments, or financial condition.
(a)
(i) A majority of the directors must not be salaried officers or employees of the savings association or of any subsidiary thereof.
(ii) Not more than two of the directors may be members of the same immediate family.
(iii) Not more than one director may be an attorney with a particular law firm.
(2)
(b) [Reserved]
For applicable rules, see regulations of the Board of Governors of the Federal Reserve System.
(a)
(b)
(1) The Federal savings association's board of directors may terminate the officer or employee's employment at any time, but any termination by the association's board of directors other than termination for cause, shall not prejudice the officer or employee's right to compensation or other benefits under the contract. The officer or employee shall have no right to receive compensation or other benefits for any period after termination for cause. Termination for cause shall include termination because of the officer or employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the contract.
(2) If the officer or employee is suspended and/or temporarily prohibited from participating in the conduct of the association's affairs by a notice served under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)), the association's obligations under the contract shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the association may in its discretion (i) pay the officer or employee all or part of the compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.
(3) If the officer or employee is removed and/or permanently prohibited from participating in the conduct of the association's affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all obligations of the association under the contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.
(4) If the savings association is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act), all obligations under the contract shall terminate as of the date of default, but this paragraph (b)(4) shall not affect any vested rights of the contracting parties:
(5) All obligations under the contract shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the association;
(i) By the Comptroller, or his or her designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the association under the authority contained in 13(c) of the Federal Deposit Insurance Act; or
(ii)(A) By the Comptroller or his or her designee, at the time the Comptroller, or his or her designee approves a supervisory merger to resolve problems related to operation of the association or when the association is determined by the Comptroller to be in an unsafe or unsound condition.
(B) Any rights of the parties that have already vested, however, shall not be affected by such action.
For applicable rules, see regulations of the Board of Governors of the Federal Reserve System.
For applicable rules, see Regulation O of the Board of Governors of the Federal Reserve System.
(a)
(b)
(c)
(1) Any such increase shall be for a period and amount determined by the sponsor's board of directors, but in no event shall it exceed the annual increase in the Consumer Price Index published by the Bureau of Labor Statistics; and
(2) No increase shall be granted unless:
(i) Anticipated charges to net income for future periods have first been found by such board of directors to be reasonable and are documented by appropriate resolution and supporting analysis; and
(ii) The increase will not reduce the association's regulatory capital below its regulatory capital requirement.
(d)
(e)
(1) Plan description;
(2) Schedule of participants and beneficiaries;
(3) Schedule of participants and beneficiaries' rights and obligations;
(4) Plan's financial statements; and
(5) Except for defined contribution plans, an opinion signed by an enrolled actuary (as defined by the Employee Retirement Income Security Act of 1974) affirming that actuarial assumptions in the aggregate are reasonable, take into account the plan's experience and expectations, and represent the actuary's best estimate of the plan's projected experiences.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(i) Shall bear on its face, in bold-face type, the following legend: “This security is not a savings account or a deposit and it is not insured by the United States or any agency or fund of the United States”; and
(ii) Shall clearly state that the certificate is subject to the requirements of § 163.74(i)(2).
(2)
(i) Be subordinate to all claims against the association having the same priority as savings accounts, savings certificates, debt obligations or any higher priority;
(ii) Not be eligible for use as collateral for any loan made by the issuing association;
(iii) Constitute a claim in liquidation not exceeding the face value plus accrued dividends of the certificates, on the general reserves, surplus and undivided profits of the association remaining after the payment in full of all savings accounts, savings certificates and debt obligations;
(iv) Be entitled to the payment of dividends, which may be fixed, variable, participating, or cumulative, or any combination thereof, only if, when and as declared by the association's board of directors out of funds legally available for that purpose, provided that no dividend may be declared or paid without the approval of the appropriate Federal banking agency if such payment would cause the association to fail to meet its regulatory capital requirements under part 167 of this chapter if a Federal savings association or 12 CFR part 390, subpart Z if a state savings association, and provided further that no dividend may be paid if such payment would constitute a violation of 12 U.S.C. 1828(b);
(v) Not be redeemable, except: where the dollar weighted average term of each issue of mutual capital certificates to be redeemed is seven years or more and redemption is to be made pursuant to a redemption schedule; in the event of a merger, consolidation or reorganization approved by the appropriate Federal banking agency; or where the funds for redemption are raised by the issuance of mutual capital certificates approved pursuant to this section, or in conjunction with the issuance of capital stock pursuant to part 192 of this chapter:
(vi) Not have preemptive rights;
(vii) Not have voting rights, except that an association may provide for voting rights if:
(A) The savings association fails to pay dividends for a minimum of three consecutive dividend periods, and then the holders of the class or classes of mutual capital certificates granted such voting rights, and voting as a single class, with one vote for each outstanding certificate, may elect by a majority vote a maximum of one-third of the association's board of directors, the directors so elected to serve until the next annual meeting of the association succeeding the payment of all current and past dividends;
(B) Any merger, consolidation, or reorganization (except in a supervisory case) is sought to be authorized, where the issuing association is not the
(C) Action is sought to be authorized which would create any class of mutual capital certificates having a preference or priority over an outstanding class or classes of mutual capital certificates;
(D) Any action is sought to be authorized which would adversely change the specific terms of any class of mutual capital certificates;
(E) Action is sought to be authorized which would increase the number of a class of mutual capital certificates, or the number of a class of mutual capital certificates ranking prior to or on parity with another class of mutual capital certificates; or
(F) Action is sought which would authorize the issuance of an additional class or classes of mutual capital certificates without the association having met specific financial standards;
(viii) Not constitute an obligation of the association and shall confer no rights which would give rise to any claim of or action for default;
(ix) Not be convertible into any account, security, or interest, except that mutual capital certificates may be surrendered in exchange for preferred stock issued in connection with the conversion of the issuing savings association to the stock form pursuant to part 192 of this chapter, provided that the preferred stock shall have substantially the same voting rights, designations, preferences and relative, participating optional, or other special rights, and qualifications, limitations, and restrictions, as the mutual capital certificates exchanged for the preferred stock.
(x) Provide for charging of losses after the exhaustion of all other items in the regulatory capital account.
(a) A Federal saving association may not offer or sell debt or equity securities issued by the association or an affiliate of the association at an office of the association; except that equity securities issued by the association or an affiliate in connection with the association's conversion from the mutual to stock form of organization in a conversion approved pursuant to part 192 of this chapter may be offered and sold at the association's offices:
(1) The OCC does not object on supervisory grounds to the offer and sale of the securities at the offices of the association;
(2) No commissions, bonuses, or comparable payments are paid to any employee of the savings association or its affiliates or to any other person in connection with the sale of securities at an office of a savings association; except that compensation and commissions consistent with industry norms may be paid to securities personnel of registered broker-dealers;
(3) No offers or sales are made by tellers or at the teller counter, or by comparable persons at comparable locations;
(4) Sales activity is conducted in a segregated or separately identifiable area of the savings association's offices apart from the area accessible to the general public for the purposes of making or withdrawing deposits;
(5) Offers and sales are made only by regular, full-time employees of the savings association or by securities personnel who are subject to supervision by a registered broker-dealer;
(6) An acknowledgment, in the form set forth in paragraph (c) of this section, is signed by any customer to whom the security is sold in the savings association's offices prior to the sale of any such securities;
(7) A legend that the security is not a deposit or account and is not Federally insured or guaranteed appears conspicuously on the security and in all offering documents and advertisements for the securities; the legend must state in bold or other prominent type at least as large as other textual type in the document that “This security is not a deposit or account and is not Federally insured or guaranteed”; and
(8) The savings association will be in compliance with its current capital requirements upon completion of the conversion stock offering.
(b) Securities sales practices, advertisements, and other sales literature used in connection with offers and sales of securities by Federal savings associations shall be subject to § 197.10 of this chapter.
(c) Offers and sales of securities of a savings association or its affiliates in any office of the savings association must use a one-page, unambiguous, certification in substantially the following form:
I ACKNOWLEDGE THAT THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED, AND IS NOT GUARANTEED BY [
If anyone asserts that this security is Federally insured or guaranteed, or is as safe as an insured deposit, I should call the Office of the Comptroller of the Currency].
I further certify that, before purchasing the [
The offering circular that I received contains disclosure concerning the nature of the security being offered and describes the risks involved in the investment, including:
[
(d) For purposes of this section, an “office” of an association means any premises used by the association that are identified to the public through advertising or signage using the association's name, trade name, or logo.
(a)
(b)
(c)
(d)
This security is not a savings account or a deposit and it is not insured by the United States or any agency or fund of the United States.
(e)
(i) Principal amount of the securities;
(ii) Anticipated interest rate range and price range at which the securities are to be sold;
(iii) Minimum denomination;
(iv) Stated and average effective maturity;
(v) Mandatory and optional prepayment provisions;
(vi) Description, amount, and maintenance of collateral if any;
(vii) Trustee provisions if any;
(viii) Events of default and remedies of default;
(ix) Any provisions which restrict, conditionally or otherwise, the operations of the association.
(2) The appropriate Federal banking agency shall have 10 business days after receipt of such filing to object to the issuance of such securities. The appropriate Federal banking agency shall object if the terms or covenants of the proposed issue place unreasonable burdens on, or control over, the operations of the association. If no objection is taken, the savings association shall have 120 calendar days within which to issue such securities.
(f)
(a)
(b)
(2) A savings association must also comply with the securities offering rules at 12 CFR part 197 by filing an offering circular for a proposed issuance of covered securities, unless the offering qualifies for an exemption under that part.
(c)
(1)
(A) Bear the following legend on its face, in bold type: “This security is
(B) State that the security is subordinated on liquidation, as to principal, interest, and premium, to all claims against the savings association that have the same priority as savings accounts or a higher priority;
(C) State that the security is not secured by the savings association's assets or the assets of any affiliate of the savings association. An affiliate means any person or company which controls, is controlled by, or is under common control with the savings association;
(D) State that the security is not eligible collateral for a loan by the savings association;
(E) State the prohibition on the payment of dividends or interest at 12 U.S.C. 1828(b) and, in the case of subordinated debt securities, state the prohibition on the payment of principal and interest at 12 U.S.C. 1831o(h);
(F) For subordinated debt securities, state or refer to a document stating the terms under which the savings association may prepay the obligation; and
(G) State or refer to a document stating that the savings association must obtain OCC's approval before the voluntary prepayment of principal on subordinated debt securities, the acceleration of payment of principal on subordinated debt securities, or the voluntarily redemption of mandatorily redeemable preferred stock (other than scheduled redemptions), if the savings association is undercapitalized, significantly undercapitalized, or critically undercapitalized as described in § 165.4(b) of this chapter, fails to meet the regulatory capital requirements at 12 CFR part 167, or would fail to meet any of these standards following the payment.
(ii) A Federal savings association must include such additional statements as the OCC may prescribe for certificates, purchase agreements, indentures, and other related documents.
(2)
(3)
(i) Arise from the Federal savings association's failure to make timely payment of interest or principal;
(ii) Arise from its failure to comply with reasonable financial, operating, and maintenance covenants of a type that are customarily included in indentures for publicly offered debt securities; or
(iii) Relate to bankruptcy, insolvency, receivership, or similar events.
(4)
(ii) A Federal savings association is not required to use an indenture if the subordinated debt securities are sold only to accredited investors, as that term is defined in 15 U.S.C. 77d(6). A savings association must have an indenture that meets the requirements of paragraph (c)(4)(i) of this section in place before any debt securities for which an exemption from the indenture requirement is claimed, are transferred to any non-accredited investor. If a savings association relies on this exemption from the indenture requirement, it must place a legend on the debt securities indicating that an indenture must be in place before the debt securities are transferred to any non-accredited investor.
(d)
(2) In reviewing notices and applications under this section, the OCC will consider whether:
(i) The issuance of the covered securities is authorized under
(ii) The savings association is at least adequately capitalized under § 165.4(b) of this chapter and meets the regulatory capital requirements at part 167 of this chapter.
(iii) The savings association is or will be able to service the covered securities.
(iv) The covered securities are consistent with the requirements of this section.
(v) The covered securities and related transactions sufficiently transfer risk from the Deposit Insurance Fund.
(vi) The OCC has no objection to the issuance based on the savings association's overall policies, condition, and operations.
(3) The OCC's approval or non-objection is conditioned upon no material changes to the information disclosed in the application or notice submitted to the OCC. The OCC may impose such additional requirements or conditions as it may deem necessary to protect purchasers, the savings association, the OCC, or the Deposit Insurance Fund.
(e)
(f)
(g)
(1) A written report indicating the number of purchasers, the total dollar amount of securities sold, the net proceeds received by the savings association from the issuance, and the amount of covered securities, net of all expenses, to be included as supplementary capital;
(2) Three copies of an executed form of the securities and a copy of any related documents governing the issuance or administration of the securities; and
(3) A certification by the appropriate executive officer indicating that the savings association complied with all applicable laws and regulations in connection with the offering, issuance, and sale of the securities.
This subpart applies to all capital distributions by a Federal savings association (“you”).
A capital distribution is:
(a) A distribution of cash or other property to your owners made on account of their ownership, but excludes:
(1) Any dividend consisting only of your shares or rights to purchase your shares; or
(2) If you are a Federal mutual savings association, any payment that you are required to make under the terms of a deposit instrument and any other amount paid on deposits that the OCC determines is not a distribution for the purposes of this section;
(b) Your payment to repurchase, redeem, retire or otherwise acquire any of your shares or other ownership interests, any payment to repurchase, redeem, retire, or otherwise acquire debt instruments included in your total capital under part 167 of this chapter, and any extension of credit to finance an affiliate's acquisition of your shares or interests;
(c) Any direct or indirect payment of cash or other property to owners or affiliates made in connection with a corporate restructuring. This includes your payment of cash or property to shareholders of another association or to shareholders of its holding company to acquire ownership in that association, other than by a distribution of shares;
(d) Any other distribution charged against your capital accounts if you would not be well capitalized, as set forth in § 165.4(b)(1) of this chapter, following the distribution; and
(e) Any transaction that the OCC determines, by order or regulation, to be in substance a distribution of capital.
The following definitions apply to this subpart:
Whether and what you must file with the OCC depends on whether you and your proposed capital distribution fall within certain criteria.
(a)
(b)
(c)
(d)
(a)
(1) Be in narrative form.
(2) Include all relevant information concerning the proposed capital distribution, including the amount, timing, and type of distribution.
(3) Demonstrate compliance with § 163.146.
(b)
(c)
You may combine the notice or application required under § 163.143 with any other notice or application, if the capital distribution is a part of, or is proposed in connection with, another transaction requiring a notice or application under this chapter. If you submit a combined filing, you must:
(a) State that the related notice or application is intended to serve as a notice or application under this subpart; and
(b) Submit the notice or application in a timely manner.
The OCC will review your notice or application under the review procedures in 12 CFR part 116, subpart E, except that the OCC will not act on informational copies of the notice submitted to the OCC pursuant to § 163.143(d). The OCC may disapprove your notice or deny your application filed under § 163.143, in whole or in part, if it makes any of the following determinations.
(a) You will be undercapitalized, significantly undercapitalized, or critically undercapitalized as set forth in § 165.4(b) of this chapter, following the capital distribution. If so, the OCC will determine if your capital distribution is permitted under 12 U.S.C. 1831o(d)(1)(B).
(b) Your proposed capital distribution raises safety or soundness concerns.
(c) Your proposed capital distribution violates a prohibition contained in any statute, regulation, agreement between you and the OCC or the OTS, or a condition imposed on you in an application or notice approved by the OCC or the OTS. If so, the OCC will determine whether it may permit your capital distribution notwithstanding the prohibition or condition.
(a)(1) For the protection of depositors and other savings associations, each Federal savings association and each service corporation must be well managed and operate safely and soundly. Each also must pursue financial policies that are safe and consistent with economical home financing and the purposes of savings associations. In implementing this section, the OCC will consider that service corporations may be authorized to engage in activities that involve a
(2) As part of meeting its requirements under paragraph (a)(1) of this section, each Federal savings association and service corporation must maintain sufficient liquidity to ensure its safe and sound operation.
(b) Compensation to officers, directors, and employees of each Federal savings association and its service corporations shall not be in excess of that which is reasonable and commensurate with their duties and responsibilities. Former officers, directors, and employees of savings association or its service corporation who regularly perform services therefore under consulting contracts are employees thereof for purposes of this paragraph (b).
(a)
(b)
(2) The OCC may obtain at any time, at its expense, such appraisals of any of the assets, including the security therefore, of a savings association, affiliate, or service corporation as the OCC deems appropriate.
(c)
(d)
(1) By resolution authorized the transfer or maintenance; and
(2) Sent a certified copy of the resolution to the OCC.
(e)
(a)
(b)
(2) [Reserved]
(3) In general, if you engage in a transaction involving a financial derivative, you should do so to reduce your risk exposure.
(c)
(2) Before you may engage in any transaction involving a financial derivative, your board of directors must establish written policies and procedures governing authorized financial derivatives. Your board of directors should review applicable guidance issued by the OCC on establishing a sound risk management program.
(3) Your board of directors must periodically review:
(i) Compliance with the policies and procedures established under paragraph (c)(2) of this section; and
(ii) The adequacy of these policies and procedures to ensure that they continue to be appropriate to the nature and scope of your operations and existing market conditions.
(4) Your board of directors must ensure that management establishes an adequate system of internal controls for transactions involving financial derivatives.
(d)
(2) Management must ensure that financial derivatives activities are conducted in a safe and sound manner and should review applicable guidance issued by the OCC on implementing a sound risk management program.
(e)
Federal savings associations shall take the following actions:
(a) The board of directors or a committee thereof shall review the savings association's interest-rate-risk exposure and devise a policy for the savings association's management of that risk.
(b) The board of directors shall formally adopt a policy for the management of interest-rate risk. The management of the savings association shall establish guidelines and procedures to ensure that the board's policy is successfully implemented.
(c) The management of the savings association shall periodically report to the board of directors regarding implementation of the savings association's policy for interest-rate-risk management and shall make that information available upon request to the OCC.
(d) The savings association's board of directors shall review the results of operations at least quarterly and shall make such adjustments as it considers necessary and appropriate to the policy for interest-rate-risk management, including adjustments to the authorized acceptable level of interest-rate risk.
(a)
(b)
(2)
(c)
(1) Provide for a system of internal controls to assure ongoing compliance;
(2) Provide for independent testing for compliance to be conducted by a savings association's in-house personnel or by an outside party;
(3) Designate individual(s) responsible for coordinating and monitoring day-to-day compliance; and
(4) Provide training for appropriate personnel.
(a)
(b)
(1) Make any written or oral statement to the appropriate Federal banking agency or to an agent, representative or employee of the appropriate Federal banking agency that is false or misleading with respect to any material fact or omits to state a material fact concerning any matter within the jurisdiction of the appropriate Federal banking agency or
(2) Make any such statement or omission to a person or organization auditing a savings association or otherwise preparing or reviewing its financial statements concerning the accounts, assets, management condition, ownership, safety, or soundness, or other affairs of the association.
(c)
(d)
(2)
(i)
(ii)
(iii)
(3)
(i)
(ii)
(iii)
(iv)
(A) The transaction involves funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any law or regulation or to avoid any transaction reporting requirement under Federal law;
(B) The transaction is designed to evade any regulations promulgated under the Bank Secrecy Act; or
(C) The transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.
(4)
(5)
(6)
(7)
(8)
(9)
(ii)
(10)
(11)
(12)
(i)
(A) Director, Litigation Division, Office of the Comptroller of the Currency or the appropriate FDIC region, as appropriate and
(B) The Financial Crimes Enforcement Network (FinCEN).
(ii)
(A) The disclosure by a savings association or service corporation, or any director, officer, employee or agent of a savings association or service corporation of:
(
(
(
(
(B) The sharing by a savings association or service corporation, or any director, officer, employee, or agent of a savings association or service corporation, of a SAR, or any information that would reveal the existence of a SAR, within the corporate organizational structure of the savings association or service corporation, for purposes consistent with Title II of the Bank Secrecy Act as determined by regulation or in guidance.
(iii)
(iv)
(13)
(e)
(2)
(3)
(a) Each Federal savings association shall maintain fidelity bond coverage. The bond shall cover each director, officer, employee, and agent who has control over or access to cash, securities, or other property of the savings association.
(b) The amount of coverage to be required for each Federal savings association shall be determined by the association's management, based on its assessment of the level that would be safe and sound in view of the association's potential exposure to risk; provided, such determination shall be subject to approval by the association's board of directors.
(c) Each Federal savings association may maintain bond coverage in addition to that provided by the insurance underwriter industry's standard forms, through the use of endorsements, riders, or other forms of supplemental coverage, if, in the judgment of the association's board of directors, additional coverage is warranted.
(d) The board of directors of each Federal savings association shall formally approve the association's bond
In lieu of the bond provided in § 163.190 of this part in the case of agents appointed by a Federal savings association, a fidelity bond may be provided in an amount at least twice the average monthly collections of such agents, provided such agents shall be required to make settlement with the savings association at least monthly, and provided such bond is approved by the board of directors of the savings association. No bond need be obtained for any agent that is a financial institution insured by the Federal Deposit Insurance Corporation.
If you are a director, officer, or employee of a Federal savings association, or have the power to direct its management or policies, or otherwise owe a fiduciary duty to a Federal savings association:
(a) You must not advance your own personal or business interests, or those of others with whom you have a personal or business relationship, at the expense of the savings association; and
(b) You must, if you have an interest in a matter or transaction before the board of directors:
(1) Disclose to the board all material nonprivileged information relevant to the board's decision on the matter or transaction, including:
(i) The existence, nature and extent of your interests; and
(ii) The facts known to you as to the matter or transaction under consideration;
(2) Refrain from participating in the board's discussion of the matter or transaction; and
(3) Recuse yourself from voting on the matter or transaction (if you are a director).
(a) If you are a director or officer of a Federal savings association, or have the power to direct its management or policies, or otherwise owe a fiduciary duty to a Federal savings association, you must not take advantage of corporate opportunities belonging to the savings association.
(b) A corporate opportunity belongs to a Federal savings association if:
(1) The opportunity is within the corporate powers of the savings association or a subsidiary of the savings association; and
(2) The opportunity is of present or potential practical advantage to the savings association, either directly or through its subsidiary.
(c) The OCC will not deem you to have taken advantage of a corporate opportunity belonging to the Federal savings association if a disinterested and independent majority of the savings association's board of directors, after receiving a full and fair presentation of the matter, rejected the opportunity as a matter of sound business judgment.
This subpart implements 12 U.S.C. 1831i, which requires certain Federal savings associations to notify the OCC before appointing or employing directors and senior executive officers.
The following definitions apply to this subpart:
(1) Is not elected by the shareholders;
(2) Is not authorized to vote on any matters before the board of directors or any committee of the board of directors;
(3) Provides only general policy advice to the board of directors or any committee of the board of directors; and
(4) Has not been identified by the OCC or the OTS in writing as an individual who performs the functions of a director, or who exercises significant influence over, or participates in, major policymaking decisions of the board of directors.
(1) A Federal savings association that has a composite rating of 4 or 5, as composite rating is defined in § 116.5(c) of this chapter;
(2) A Federal savings association that is subject to a capital directive, a cease-and-desist order, a consent order, a formal written agreement, or a prompt corrective action directive relating to the safety and soundness or financial viability of the savings association, unless otherwise informed in writing by the OCC; or
(3) A Federal savings association that is informed in writing by the OCC that it is in troubled condition based on information available to the OCC.
(a)
(1) You do not comply with all minimum capital requirements under part 167 of this chapter;
(2) Are in troubled condition; or
(3) The OCC has notified you, in connection with its review of a capital restoration plan required under section 38 of the Federal Deposit Insurance Act or part 165 of this chapter or otherwise, that a notice is required under this subpart.
(b)
The procedures found in part 116, subpart A of this chapter govern the filing of your notice under § 163.560.
(a)
(1) The information required under 12 U.S.C. 1817(j)(6)(A), and the information prescribed in the Interagency Notice of Change in Director or Senior Executive Officer and the
(2) Legible fingerprints of the proposed director or senior executive officer. You are not required to file fingerprints if, within three years prior to the date of submission of the notice, the proposed director or senior executive officer provided legible fingerprints as part of a notice filed with the OCC or the Office of Thrift Supervision under 12 U.S.C. 1831i; and
(3) Such other information required by the OCC.
(b)
The OCC will first review your notice to determine whether it is complete.
(a) If your notice is complete, the OCC will notify you in writing of the date that the OCC received the complete notice.
(b) If your notice is not complete, the OCC will notify you in writing what additional information you need to submit, why we need the information, and when you must submit it. You must, within the specified time period, provide additional information or request that the OCC suspend processing of the notice. If you fail to act within the specified time period, the OCC may treat the notice as abandoned or may review the application based on the information provided.
The OCC will disapprove a notice if, pursuant to the standard set forth in 12 U.S.C. 1831i(e), the OCC finds that the competence, experience, character, or integrity of the proposed director or senior executive officer indicates that it would not be in the best interests of the depositors of the Federal savings association or of the public to permit the individual to be employed by, or associated with, the savings association. If the OCC disapproves a notice, it will issue a written notice that explains why the OCC disapproved the notice. The OCC will send the notice to the savings association and the individual.
(a) A proposed director or senior executive officer may begin service 30 days after the date the OCC receives all required information, unless:
(1) The OCC notifies you that it has disapproved the notice; or
(2) The OCC extends the 30-day period for an additional period not to exceed 60 days. If the OCC extends the 30-day period, it will notify you in writing that the period has been extended, and will state the reason for the extension. The proposed director or senior executive officer may begin service upon expiration of the extended period, unless the OCC notifies you that it has disapproved the notice during the extended period.
(b) Notwithstanding paragraph (a) of this section, a proposed director or senior executive officer may begin service after the OCC notifies you, in writing, of its intention not to disapprove the notice.
(a)
(i) Delay would threaten the safety or soundness of the savings association;
(ii) Delay would not be in the public interest; or
(iii) Other extraordinary circumstances exist that justify waiver of prior notice.
(2) If the OCC grants a waiver, you must file a notice under this subpart within the time period specified by the OCC.
(b)
(c)
12 U.S.C. 1462, 1462a, 1463, 1464, 1828(m), 3331
(a) [Reserved]
(b)
(2) This part: (i) Identifies which real estate-related financial transactions require the services of an appraiser;
(ii) Prescribes which categories of Federally related transactions shall be appraised by a state certified appraiser and which by a state licensed appraiser; and
(iii) Prescribes minimum standards for the performance of real estate appraisals in connection with Federally related transactions under the jurisdiction of the OCC.
(a)
(b)
(c)
(d)
(e)
(f)
(1) Any regulated institution engages in or contracts for; and
(2) Requires the services of an appraiser.
(g)
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
(h)
(i)
(1) The sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof; or
(2) The refinancing of real property or interests in real property; or
(3) The use of real property or interests in property as security for a loan or investment, including mortgage-backed securities.
(j)
(k)
(l)
(m)
(1) For loans or other extensions of credit, the amount of the loan or extension of credit;
(2) For sales, leases, purchases, and investments in or exchanges of real property, the market value of the real property interest involved; and
(3) For the pooling of loans or interests in real property for resale or purchase, the amount of the loan or market value of the real property calculated with respect to each such loan or interest in real property.
(a)
(1) The transaction value is $250,000 or less;
(2) A lien on real estate has been taken as collateral in an abundance of caution;
(3) The transaction is not secured by real estate;
(4) A lien on real estate has been taken for purposes other than the real estate's value;
(5) The transaction is a business loan that:
(i) Has a transaction value of $1 million or less; and
(ii) Is not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment;
(6) A lease of real estate is entered into, unless the lease is the economic equivalent of a purchase or sale of the leased real estate;
(7) The transaction involves an existing extension of credit at the lending institution, provided that:
(i) There has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the institution's real estate collateral protection after the transaction, even with the advancement of new monies; or
(ii) There is no advancement of new monies, other than funds necessary to cover reasonable closing costs;
(8) The transaction involves the purchase, sale, investment in, exchange of, or extension of credit secured by, a loan or interest in a loan, pooled loans, or interests in real property, including mortgaged-backed securities, and each loan or interest in a loan, pooled loan, or real property interest met OCC regulatory requirements for appraisals at the time of origination;
(9) The transaction is wholly or partially insured or guaranteed by a United States government agency or United States government sponsored agency;
(10) The transaction either:
(i) Qualifies for sale to a United States government agency or United States government sponsored agency; or
(ii) Involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate;
(11) The regulated institution is acting in a fiduciary capacity and is not required to obtain an appraisal under other law; or
(12) The OCC determines that the services of an appraiser are not necessary in order to protect Federal financial and public policy interests in real estate-related financial transactions or to protect the safety and soundness of the institution.
(b)
(c)
(d)
(2)
(3)
(i) The regulated institution may ask the licensed appraiser to complete the appraisal and have a certified appraiser approve and co-sign the appraisal; or
(ii) The institution may engage a certified appraiser to complete the appraisal.
(e)
For Federally related transactions, all appraisals shall, at a minimum:
(a) Conform to generally accepted appraisal standards as evidenced by the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Standards Board of the Appraisal Foundation unless principles of safe and sound banking require compliance with stricter standards;
(b) Be written and contain sufficient information and analysis to support the institution's decision to engage in the transaction;
(c) Analyze and report appropriate deductions and discounts for proposed construction or renovation, partially leased buildings, non-market lease terms, and tract developments with unsold units;
(d) Be based upon the definition of market value as set forth in this part; and
(e) Be performed by state licensed or certified appraisers in accordance with requirements set forth in this part.
(a)
(b)
(2) A regulated institution also may accept an appraisal that was prepared by an appraiser engaged directly by another financial services institution, if:
(i) The appraiser has no direct or indirect interest, financial or otherwise, in the property or the transaction; and
(ii) The regulated institution determines that the appraisal conforms to the requirements of this part and is otherwise acceptable.
(a)
(b)
Institutions and institution-affiliated parties, including staff appraisers and fee appraisers, who violate this part may be subject to removal and/or prohibition orders, cease and desist orders, and the imposition of civil money penalties pursuant to the Federal Deposit Insurance Act, 12 U.S.C. 1811
(a)
(b)
(c)
(1) Management shall develop written appraisal policies, subject to formal adoption by the savings association's board of directors, that it shall implement in consultation with other appropriate personnel. These policies shall ensure that adequate appraisals are obtained and proper appraisal procedures are followed consistent with the requirements of this part 164.
(2) Management shall develop and adopt guidelines and institute procedures pertaining to the hiring of appraisers to perform appraisal services for the savings association consistent with the requirements of this part 164. These guidelines shall set forth specific factors to be considered by management including, but not limited to, an appraiser's state certification or licensing, professional education, and type of experience. An appraiser's membership in professional appraisal organizations may be considered consistent with the requirements of § 164.6
(3) Management shall review on an annual basis the performance of all approved appraisers used within the preceding 12-month period for compliance with (i) the savings association's appraisal policies and procedures; and (ii) the reasonableness of the value estimates reported.
(d)
12 U.S.C. 1831o, 5412(b)(2)(B).
(a)
(b)
(c)
(d)
(e)
For purposes of this part, except as modified in this section or unless the context otherwise requires, the terms used in this part have the same meanings as set forth in sections 38 and 3 of the FDI Act.
(a)(1)
(2)
(3)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(a)
(b)
(1) A Consolidated Report of Condition (Call Report) or Thrift Financial Report (TFR), as appropriate, is required to be filed with the OCC;
(2) A final report of examination is delivered to the savings association; or
(3) Written notice is provided by the OCC to the savings association of its capital category for purposes of section 38 of the FDI Act and this part or that the savings association's capital category has changed as provided in paragraph (c) of this section or § 165.4(c).
(c)
(2)
(a)
(1) The total risk-based capital ratio;
(2) The Tier 1 risk-based capital ratio; and
(3) The leverage ratio.
(b)
(1)
(i) Has a total risk-based capital ratio of 10.0 percent or greater; and
(ii) Has a Tier 1 risk-based capital ratio of 6.0 percent or greater; and
(iii) Has a leverage ratio of 5.0 percent or greater; and
(iv) Is not subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the OCC or OTS under section 8 of the FDI Act, the International Lending Supervision Act of 1983 (12 U.S.C. 3907), the Home Owners' Loan Act (12 U.S.C. 1464(t)(6)(A)(ii)), or section 38 of the FDI Act, or any regulation thereunder, to meet and maintain a specific capital level for any capital measure.
(2)
(i) Has a total risk-based capital ratio of 8.0 percent or greater; and
(ii) Has a Tier 1 risk-based capital ratio of 4.0 percent or greater; and
(iii) Has:
(A) A leverage ratio of 4.0 percent or greater; or
(B) A leverage ratio of 3.0 percent or greater if the savings association is assigned a composite rating of 1, as composite rating is defined in § 116.5(c) of this chapter; and
(iv) Does not meet the definition of a
(3)
(i) Has a total risk-based capital ratio that is less than 8.0 percent; or
(ii) Has a Tier 1 risk-based capital ratio that is less than 4.0 percent; or
(iii)(A) Except as provided in paragraph (b)(3)(iii)(B) of this section, has a leverage ratio that is less than 4.0 percent; or
(B) Has a leverage ratio that is less than 3.0 percent if the savings association is assigned a composite rating of 1, as composite rating is defined in § 116.5(c) of this chapter.
(4)
(i) A total risk-based capital ratio that is less than 6.0 percent; or
(ii) A Tier 1 risk-based capital ratio that is less than 3.0 percent; or
(iii) A leverage ratio that is less than 3.0 percent.
(5)
(c)
(1)
(2)
(a)
(2)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(A) An amount equal to 5.0 percent of the savings association's total assets at the time the savings association was notified or deemed to have notice that the savings association was undercapitalized; or
(B) The amount necessary to restore the relevant capital measures of the savings association to the levels required for the savings association to be classified as adequately capitalized, as those capital measures and levels are defined at the time that the savings association initially fails to comply with a capital restoration plan under this part.
(ii)
(iii)
(2)
(3)
(a)
(2)
(i) Restricting payment of capital distributions and management fees (section 38(d));
(ii) Requiring that the OCC monitor the condition of the savings association (section 38(e)(1));
(iii) Requiring submission of a capital restoration plan within the schedule established in this part (section 38(e)(2));
(iv) Restricting the growth of the savings association's assets (section 38(e)(3)); and
(v) Requiring prior approval of certain expansion proposals (section 38(e)(4)).
(3)
(4)
(i) Restricting the activities of the savings association (section 38(h)(1)); and
(ii) Restricting payments on subordinated debt of the savings association (section 38(h)(2)).
(b)
(a)
(2)
(b)
(1) A statement of the Federal savings association's capital measures and capital levels;
(2) A description of the restrictions, prohibitions or affirmative actions that the OCC proposes to impose or require;
(3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for completion of such affirmative actions; and
(4) The date by which the Federal savings association or company subject to the directive may file with the OCC a written response to the notice.
(c)
(2)
(i) An explanation why the action proposed by the OCC is not an appropriate exercise of discretion under section 38;
(ii) Any recommended modification of the proposed directive; and
(iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the savings association or company regarding the proposed directive.
(d)
(1) Issue the directive as proposed or in modified form;
(2) Determine not to issue the directive and so notify the savings association or company; or
(3) Seek additional information or clarification of the response from the savings association or company, or any other relevant source.
(e)
(f)
(a)
(
(
(B) Any action pursuant to this paragraph (a)(1)(i) shall hereinafter be referred to as “reclassification.”
(ii)
(2)
(i) A statement of the savings association's capital measures and capital levels and the category to which the savings association would be reclassified;
(ii) The reasons for reclassification of the savings association;
(iii) The date by which the savings association subject to the notice of reclassification may file with the OCC a written appeal of the proposed reclassification and a request for a hearing, which shall be at least 14 calendar days from the date of service of the notice unless the OCC determines that a shorter period is appropriate in light of the financial condition of the savings association or other relevant circumstances.
(3)
(i) An explanation of why the savings association is not in unsafe or unsound condition or otherwise should not be reclassified; and
(ii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the savings association or company regarding the reclassification.
(4)
(5)
(6)
(7)
(ii) The informal hearing shall be recorded and a transcript furnished to the savings association upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). The presiding officer(s) may ask questions of any witness.
(iii) The presiding officer(s) may order that the hearing be continued for a reasonable period (normally five business days) following completion of oral testimony or argument to allow additional written submissions to the hearing record.
(8)
(9)
(b)
(a)
(b)
(2)
(3)
(c)
(d)
(2) The informal hearing shall be recorded and a transcript furnished to the Respondent upon request and payment of the cost thereof. Witnesses need not be sworn, unless specifically requested by a party or the presiding officer(s). The presiding officer(s) may ask questions of any witness.
(3) The presiding officer(s) may order that the hearing be continued for a reasonable period (normally five business days) following completion of oral testimony or argument to allow additional written submissions to the hearing record.
(e)
(1) To become adequately capitalized, to the extent that the directive was issued as a result of the savings association's capital level or failure to submit or implement a capital restoration plan; and
(2) To correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the directive was issued as a result of classification of the savings association based on supervisory criteria other than capital, pursuant to section 38(g) of the FDI Act.
(f)
(g)
(a)
(b)
(2)
(c)
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1828 (note), 5412(b)(2)(B).
(a) This part prescribes the minimum regulatory capital requirements for Federal savings associations. Subpart B of this part applies to all Federal savings associations, except as described in paragraph (b) of this section.
(b)(1) A Federal savings association that uses Appendix C of this part must comply with the minimum qualifying criteria for internal risk measurement and management processes for calculating risk-based capital requirements, utilize the methodologies for calculating risk-based capital requirements, and make the required disclosures described in that appendix.
(2) Subpart B of this part does not apply to the computation of risk-based capital requirements by a Federal savings association that uses Appendix C of this part. However, these savings associations:
(i) Must compute the components of capital under § 167.5, subject to the modifications in sections 11 and 12 of Appendix C of this part.
(ii) Must meet the leverage ratio requirement at §§ 167.2(a)(2) and 167.8 with tier 1 capital, as computed under sections 11 and 12 of Appendix C of this part.
(iii) Must meet the tangible capital requirement described at §§ 167.2(a)(3) and 167.9.
(iv) Are subject to §§ 167.3 (individual minimum capital requirement), 167.4 (capital directives); and 167.10 (consequences of failure to meet capital requirements).
(v) Are subject to the reservations of authority at § 167.11, which supplement the reservations of authority at section 1 of Appendix C of this part.
(c) [Reserved]
For the purposes of this subpart:
(1) A Federal savings association's total assets as that term is defined in this section;
(2) Plus the prorated assets of any includable subsidiary in which the savings association has a minority ownership interest that is not consolidated under GAAP;
(3) Minus:
(i) Assets not included in the applicable capital standard except for those subject to paragraphs (3)(ii) and (3)(iii) of this definition;
(ii) Investments in any includable subsidiary in which a savings association has a minority interest; and
(iii) Investments in any subsidiary subject to consolidation under paragraph (2)(ii) of this definition.
(1) Establishes an ABCP program;
(2) Approves the sellers permitted to participate in an ABCP program;
(3) Approves the asset pools to be purchased by an ABCP program; or
(4) Administers the ABCP program by monitoring the assets, arranging for debt placement, compiling monthly reports, or ensuring compliance with the program documents and with the program's credit and investment policy.
(1) Purchase loans or securities;
(2) Extend credit in the form of loans or leases, participations in loans or leases, overdraft facilities, revolving credit facilities, home equity lines of credit, eligible ABCP liquidity facilities, or similar transactions.
(i) Represents the contractual right to receive some or all of the interest due on transferred assets; and
(ii) Exposes the Federal savings association to credit risk directly or indirectly associated with the transferred assets that exceeds its
(2) The OCC reserves the right to identify other cash flows or related interests as a credit-enhancing interest-only strip. In determining whether a particular interest cash flow functions as a credit-enhancing interest-only strip, The OCC will consider the economic substance of the transaction.
(2) Credit-enhancing representations and warranties include promises to protect a party from losses resulting from the default or nonperformance of another party or from an insufficiency in the value of the collateral.
(3) Credit-enhancing representations and warranties do not include:
(i) Early-default clauses and similar warranties that permit the return of, or premium refund clauses covering, qualifying mortgage loans for a period not to exceed 120 days from the date of transfer. These warranties may cover only those loans that were originated within one year of the date of the transfer;
(ii) Premium refund clauses covering assets guaranteed, in whole or in part, by the United States government, a United States government agency, or a United States government-sponsored enterprise, provided the premium
(iii) Warranties that permit the return of assets in instances of fraud, misrepresentation or incomplete documentation.
(1) Financial standby letters of credit that support financial claims on a third party that exceed a savings association's
(2) Guarantees, surety arrangements, credit derivatives, and similar instruments backing financial claims that exceed a savings association's
(3) Purchased subordinated interests that absorb more than their
(4) Credit derivative contracts under which the savings association assumes more than its
(5) Loans or lines of credit that provide credit enhancement for the financial obligations of a third party;
(6) Purchased loan servicing assets if the servicer is responsible for credit losses or if the servicer makes or assumes credit-enhancing representations and warranties with respect to the loans serviced. Servicer cash advances as defined in this section are not direct credit substitutes;
(7) Clean-up calls on third party assets. However, clean-up calls that are 10 percent or less of the original pool balance and that are exercisable at the option of the savings association are not direct credit substitutes; and
(8) Liquidity facilities that provide support to asset-backed commercial paper (other than eligible ABCP liquidity facilities).
(1)(i) At the time of the draw, the liquidity facility must be subject to an asset quality test that precludes funding against assets that are 90 days or more past due or in default; and
(ii) If the assets that the liquidity facility is required to fund against are assets or exposures that have received a credit rating by a NRSRO at the time of the inception of the facility, the facility can be used to fund only those assets or exposures that are rated investment grade by an NRSRO at the time of funding; or
(2) If the assets that are funded under the liquidity facility do not meet the criteria described in paragraph (1) of this definition, the assets must be guaranteed, conditionally or unconditionally, by the United States Government, its agencies, or the central government of an OECD country.
(i) The savings association's management appears to be competent;
(ii) The savings association, as certified by its Board of Directors, is in substantial compliance with all applicable statutes, regulations, orders and written agreements and directives; and
(iii) The savings association's management, as certified by its Board of Directors, has not engaged in insider dealing, speculative practices, or any other activities that have or may jeopardize the association's safety and soundness or contributed to impairing the association's capital.
(2) Federal savings associations, for purposes of this paragraph, will be deemed to be eligible unless the Comptroller makes a determination otherwise or notifies the savings association of its intent to conduct either an informal or formal examination to determine eligibility and provides written notification thereof to the savings association.
(2)(i) The term
(A) Stock, certificate of interest of participation in any profit-sharing agreement, collateral trust certificate or subscription, preorganization certificate or subscription, transferable share, investment contract, or voting trust certificate; or
(B) In general, any interest or instrument commonly known as an equity security; or
(C) Loans having profit sharing features which GAAP would reclassify as equity securities; or
(D) Any security immediately convertible at the option of the holder without payment of substantial additional consideration into such a security; or
(E) Any security carrying any warrant or right to subscribe to or purchase such a security; or
(F) Any certificate of interest or participation in, temporary or Interim certificate for, or receipt for any of the foregoing or any partnership interest; or
(G) Investments in equity securities and loans or advances to and guarantees issued on behalf of partnerships or joint ventures in which a Federal savings association holds an interest in real property under GAAP.
(ii) The term
(3) For purposes of this part, the term
(4) In addition, for purposes of this part, the term
(1) To repay money borrowed by, or advanced to, or for the account of, a second party (the account party); or
(2) To make payment on behalf of the account party, in the event that the account party fails to fulfill its obligation to the beneficiary.
(1) Engaged solely in activities not impermissible for a national bank;
(2) Engaged in activities not permissible for a national bank, but only if acting solely as agent for its customers and such agency position is clearly documented in the savings association's files;
(3) Engaged solely in mortgage-banking activities;
(4)(i) Itself an insured depository institution or a company the sole investment of which is an insured depository institution, and
(ii) Was acquired by the parent savings association prior to May 1, 1989; or
(5) A subsidiary of any savings association existing as a savings association on August 9, 1989 that
(i) Was chartered prior to October 15, 1982, as a savings bank or a cooperative bank under state law, or
(ii) Acquired its principal assets from an association that was chartered prior to October 15, 1982, as a savings bank or a cooperative bank under state law.
(1) The commitment is not subject to extension or renewal and will actually expire on its stated expiration date; or
(2) If the commitment is subject to extension or renewal beyond its stated expiration date, the stated expiration date will be deemed the original maturity only if the extension or renewal must be based upon terms and conditions independently negotiated in good faith with the customer at the time of the extension or renewal and upon a new,
(1) Was subject to special regulatory controls by its primary Federal or state regulatory authority;
(2) Posed particular supervisory concerns to its primary Federal or state regulatory authority; or
(3) Failed to meet its regulatory capital requirement immediately before the transaction.
(i) Is fully secured by a first lien on a one-to four-family residential property;
(ii) Is underwritten in accordance with prudent underwriting standards, including standards relating the ratio of the loan amount to the value of the property (LTV ratio).
(iii) Maintains an appropriate LTV ratio based on the amortized principal balance of the loan; and
(iv) Is performing and is not more than 90 days past due.
(2) If a Federal savings association holds the first and junior lien(s) on a residential property and no other party holds an intervening lien, the transaction is treated as a single loan secured by a first lien for the purposes of determining the LTV ratio and the appropriate risk weight under § 167.6(a).
(3) A loan to an individual borrower for the construction of the borrower's home may be included as a qualifying mortgage loan.
(4) A loan that meets the requirements of this section prior to modification on a permanent or trial basis under the U.S. Department of Treasury's Home Affordable Mortgage Program may be included as a
(i) The amortization of principal and interest occurs over a period of not more than 30 years;
(ii) The original minimum maturity for repayment of principal on the loan is not less than seven years;
(iii) When considering the loan for placement in a lower risk-weight category, all principal and interest payments have been made on a timely basis in accordance with its terms for the preceding year;
(iv) The loan is performing and not 90 days or more past due;
(v) The loan is made by the Federal savings association in accordance with prudent underwriting standards; and
(vi) If the interest rate on the loan does not change over the term of the loan:
(A) The current loan balance amount does not exceed 80 percent of the value of the property securing the loan; and
(B) For the property's most recent fiscal year, the ratio of annual net operating income generated by the property (before payment of any debt service on the loan) to annual debt service on the loan is not less than 120 percent, or in the case of cooperative or other not-for-profit housing projects, the property generates sufficient cash flows to provide comparable protection to the institution; or
(vii) If the interest rate on the loan changes over the term of the loan:
(A) The current loan balance amount does not exceed 75 percent of the value of the property securing the loan; and
(B) For the property's most recent fiscal year, the ratio of annual net operating income generated by the property (before payment of any debt service on the loan) to annual debt service on the loan is not less than 115 percent, or in the case of cooperative or other not-for-profit housing projects, the property generates sufficient cash flows to provide comparable protection to the institution.
(2) The term
(3) For purposes of paragraphs (1)(vi) and (vii) of this definition, the term
(4) In cases where a borrower refinances a loan on an existing property, as an alternative to paragraphs (1)(iii), (vi), and (vii) of this definition:
(i) All principal and interest payments on the loan being refinanced have been made on a timely basis in accordance with the terms of that loan for the preceding year; and
(ii) The net income on the property for the preceding year would support timely principal and interest payments on the new loan in accordance with the applicable debt service requirement.
(i) The builder must have substantial project equity in the home construction project;
(ii) The residence being constructed must be a 1-4 family residence sold to a home purchaser;
(iii) The lending Federal savings association must obtain sufficient documentation from a permanent lender (which may be the construction lender) demonstrating that:
(A) The home buyer intends to purchase the residence; and
(B) Has the ability to obtain a permanent qualifying mortgage loan sufficient to purchase the residence;
(iv) The home purchaser must have made a substantial earnest money deposit;
(v) The construction loan must not exceed 80 percent of the sales price of the residence;
(vi) The construction loan must be secured by a first lien on the lot, residence under construction, and other improvements;
(vii) The lending thrift must retain sufficient undisbursed loan funds throughout the construction period to ensure project completion;
(viii) The builder must incur a significant percentage of direct costs (
(ix) If at any time during the life of the construction loan any of the criteria of this rule are no longer satisfied, the association must immediately recategorize the loan at a 100 percent risk-weight and must accurately report the loan in the association's next quarterly Consolidated Reports of Condition and Income (Call Report) or Thrift Financial Report (TFR), as appropriate;
(x) The home purchaser must intend that the home will be owner-occupied;
(xi) The home purchaser(s) must be an individual(s), not a partnership, joint venture, trust corporation, or any other entity (including an entity acting as a sole proprietorship) that is purchasing the home(s) for speculative purposes; and
(xii) The loan must be performing and not more than 90 days past due.
(2) The documentation for each loan and home sale must be sufficient to demonstrate compliance with the criteria in paragraph (1) of this definition. The OCC retains the discretion to determine that any loans not meeting sound lending principles must be placed in a higher risk-weight category. The OCC also reserves the discretion to modify these criteria on a case-by-case basis provided that any such modifications are not inconsistent with the safety and soundness objectives of this definition.
(1) A securities firm incorporated in the United States that is a broker-dealer that is registered with the Securities and Exchange Commission (SEC) and that complies with the SEC's net capital regulations (17 CFR 240.15c3(1)); and
(2) A securities firm incorporated in any other OECD-based country, if the Federal savings association is able to demonstrate that the securities firm is subject to consolidated supervision and regulation (covering its subsidiaries, but not necessarily its parent organizations) comparable to that imposed on depository institutions in OECD countries. Such regulation must include risk-based capital requirements comparable to those imposed on depository institutions under the Accord on International Convergence of Capital Measurement and Capital Standards (1988, as amended in 1998).
(1) Credit-enhancing representations and warranties made on transferred assets;
(2) Loan servicing assets retained pursuant to an agreement under which the savings association will be responsible for losses associated with the loans serviced. Servicer cash advances as defined in this section are not recourse obligations;
(3) Retained subordinated interests that absorb more than their
(4) Assets sold under an agreement to repurchase, if the assets are not already included on the balance sheet;
(5) Loan strips sold without contractual recourse where the maturity of the transferred portion of the loan is shorter than the maturity of the commitment under which the loan is drawn;
(6) Credit derivatives that absorb more than the savings association's pro rata share of losses from the transferred assets;
(7) Clean-up calls on assets the savings association has sold. However, clean-up calls that are 10 percent or less of the original pool balance and that are exercisable at the option of the savings association are not recourse arrangements; and
(8) Liquidity facilities that provide support to asset-backed commercial paper (other than eligible ABCP liquidity facilities).
(i) Represents an interest (including a beneficial interest) created by a transfer that qualifies as a sale (in accordance with GAAP) of financial assets, whether through a securitization or otherwise; and
(ii) Exposes a Federal savings association to credit risk directly or indirectly associated with the transferred asset that exceeds a
(2) Residual interests generally include credit-enhancing interest-only strips, spread accounts, cash collateral accounts, retained subordinated interests (and other forms of overcollateralization), and similar assets that function as a credit enhancement.
(3) Residual interests further include those exposures that, in substance, cause the savings association to retain the credit risk of an asset or exposure that had qualified as a residual interest before it was sold.
(4) Residual interests generally do not include assets purchased from a third
(1) The servicer is entitled to full reimbursement and this right is not subordinated to other claims on the cash flows from the underlying asset pool; or
(2) For any one loan, the servicer's obligation to make nonreimbursable advances is contractually limited to an insignificant amount of the outstanding principal amount on that loan.
(1) Unaffiliated investors to purchase the security; or
(2) An unaffiliated third party to enter into a transaction involving the position, such as a purchase, loan, or repurchase agreement.
(a) To meet its regulatory capital requirement a Federal savings association must satisfy each of the following capital standards:
(1)
(ii) A Federal savings association may not use supplementary capital to satisfy this requirement in an amount greater than 100% of its core capital as defined in § 167.5 of this part.
(2)
(ii) A Federal savings association must satisfy this requirement with core capital as defined in § 167.5(a) of this part.
(3)
(ii) A Federal savings association must satisfy this requirement with tangible capital as defined in § 167.9 of this part in an amount not less than 1.5% of its adjusted total assets.
(b) [Reserved]
(c) Federal savings associations are expected to maintain compliance with all of these standards at all times.
(a)
(b)
(1) A Federal savings association receiving special supervisory attention;
(2) A Federal savings association that has or is expected to have losses resulting in capital inadequacy;
(3) A Federal savings association that has a high degree of exposure to interest rate risk, prepayment risk, credit risk, concentration of credit risk, certain risks arising from nontraditional activities, or similar risks; or a high proportion of off-balance sheet risk, especially standby letters of credit;
(4) A Federal savings association that has poor liquidity or cash flow;
(5) A Federal savings association growing, either internally or through acquisitions, at such a rate that supervisory problems are presented that are not dealt with adequately by other OCC regulations or other guidance;
(6) A Federal savings association that may be adversely affected by the activities or condition of its holding company, affiliate(s), subsidiaries, or other persons or savings associations with which it has significant business relationships, including concentrations of credit;
(7) A Federal savings association with a portfolio reflecting weak credit quality or a significant likelihood of financial loss, or that has loans in nonperforming status or on which borrowers fail to comply with repayment terms;
(8) A Federal savings association that has inadequate underwriting policies, standards, or procedures for its loans and investments; or
(9) A Federal savings association that has a record of operational losses that exceeds the average of other, similarly situated savings associations; has management deficiencies, including failure to adequately monitor and control financial and operating risks, particularly the risks presented by concentrations of credit and nontraditional activities; or has a poor record of supervisory compliance.
(c)
(1) The conditions or circumstances leading to the determination that a higher minimum capital requirement is appropriate or necessary for the savings association;
(2) The exigency of those circumstances or potential problems;
(3) The overall condition, management strength, and future prospects of the savings association and, if applicable, its holding company, subsidiaries, and affiliates;
(4) The savings association's liquidity, capital and other indicators of financial stability, particularly as compared with those of similarly situated savings associations; and
(5) The policies and practices of the savings association's directors, officers, and senior management as well as the internal control and internal audit systems for implementation of such adopted policies and practices.
(d)
(2)
(A) When, in the opinion of the OCC, the condition of the savings association so requires, and the OCC informs the savings association of the shortened response period in the notice;
(B) With the consent of the savings association; or
(C) When the savings association already has advised the OCC that it cannot or will not achieve its applicable minimum capital requirement.
(ii) Failure to respond within 30 days, or such other time period as may be specified by the OCC, may constitute a waiver of any objections to the proposed individual minimum capital requirement or to the schedule for complying with it, unless the OCC has provided an extension of the response period for good cause.
(3)
(4)
(5)
(a)
(A) Achieve its minimum capital requirement by a specified date;
(B) Adhere to the compliance schedule for achieving its individual minimum capital requirement;
(C) Submit and adhere to a capital plan acceptable to the OCC describing the means and a time schedule by which the savings association shall reach its required capital level;
(D) Take other action, including but not limited to, reducing the savings association's assets or its rate of liability growth, or imposing restrictions on the savings association's payment of dividends, in order to cause the savings association to reach its required capital level;
(E) Take any action authorized under § 167.10(e); or
(F) Take a combination of any of these actions.
(ii) A capital directive issued under this section, including a plan submitted pursuant to a capital directive, is enforceable under 12 U.S.C. 1818 in the same manner and to the same extent as an effective and outstanding cease and desist order which has become final under 12 U.S.C. 1818.
(2)
(i) The reasons for issuance of the capital directive and
(ii) The proposed contents of the capital directive.
(3)
(A) When, in the opinion of the OCC, the condition of the savings association so requires, and the OCC informs the savings association of the shortened response period in the notice;
(B) With the consent of the savings association; or
(C) When the savings association already has advised the OCC that it cannot or will not achieve its applicable minimum capital requirement.
(ii) Failure to respond within 30 days of receipt, or such other time period as may be specified by the OCC, may constitute a waiver of any objections to the capital directive unless the OCC grants an extension of the time period for good cause.
(4)
(5)
(ii) A capital directive shall become effective upon the expiration of 30 days after service upon the savings association, unless the OCC determines that a shorter effective period is necessary either on account of the public interest or in order to achieve the capital directive's purpose. If the savings association has consented to issuance of the capital directive, it may become effective immediately. A capital directive shall remain in effect and enforceable unless, and then only to the extent that, it is stayed, modified, or terminated by the OCC.
(6)
(b)
(1) May consider a Federal savings association's progress in adhering to any capital plan required under this section whenever such savings association or any affiliate of such savings association (including any company which controls such savings association) seeks approval for any proposal that would have the effect of diverting earnings, diminishing capital, or otherwise impeding such savings association's progress in meeting its minimum capital requirement; and
(2) May disapprove any proposal referred to in paragraph (b)(1) of this section if the OCC determines that the proposal would adversely affect the ability of the savings association on a current or pro forma basis to satisfy its capital requirement.
(a)
(i) Common stockholders' equity (including retained earnings);
(ii) Noncumulative perpetual preferred stock and related surplus;
(iii) Minority interests in the equity accounts of the subsidiaries that are fully consolidated.
(iv) Nonwithdrawable accounts and pledged deposits of mutual savings associations (excluding any treasury shares held by the savings association) meeting the criteria of regulations and memoranda of the OCC to the extent that such accounts or deposits have no fixed maturity date, cannot be withdrawn at the option of the accountholder, and do not earn interest that carries over to subsequent periods;
(v) [Reserved]
(2)
(ii) Servicing assets that are not includable in core capital pursuant to § 167.12 of this part are deducted from assets and capital in computing core capital.
(iii) Credit-enhancing interest-only strips that are not includable in core capital under § 167.12 of this part are deducted from assets and capital in computing core capital.
(iv) Investments, both equity and debt, in subsidiaries that are not includable subsidiaries (including those subsidiaries where the savings association has a minority ownership interest) are deducted from assets and, thus core capital except as provided in paragraphs (a)(2)(v) and (a)(2)(vi) of this section.
(v) If a Federal savings association has any investments (both debt and equity) in one or more subsidiaries engaged in any activity that would not fall within the scope of activities in which includable subsidiaries may engage, it must deduct such investments from assets and, thus, core capital in accordance with this paragraph (a)(2)(v). The savings association must first deduct from assets and, thus, core capital the amount by which any investments in such subsidiary(ies) exceed the amount of such investments held by the savings association as of April 12, 1989. Next the savings association must deduct from assets and, thus, core capital, the savings association's investments in and extensions of credit to the subsidiary on the date as of which the savings association's capital is being determined.
(vi) If a Federal savings association holds a subsidiary (either directly or through a subsidiary) that is itself a domestic depository institution, the OCC may, in its sole discretion upon determining that the amount of core capital that would be required would be higher if the assets and liabilities of such subsidiary were consolidated with those of the parent savings association than the amount that would be required if the parent savings association's investment were deducted pursuant to paragraphs (a)(2)(iv) and (a)(2)(v) of this section, consolidate the assets and liabilities of that subsidiary with those of the parent savings association in calculating the capital adequacy of the parent savings association, regardless of whether the subsidiary would otherwise be an includable subsidiary as defined in § 167.1 of this part.
(vii) Deferred tax assets that are not includable in core capital pursuant to § 167.12 of this part are deducted from assets and capital in computing core capital.
(b)
(1)
(ii) Mutual capital certificates issued pursuant to regulations and memoranda of the OCC;
(iii) Nonwithdrawable accounts and pledged deposits (excluding any treasury shares held by the savings association) meeting the criteria of 12 CFR 161.42 to the extent that such instruments are not included in core capital under paragraph (a) of this section;
(iv) Perpetual subordinated debt issued pursuant to regulations and memoranda of the OCC; and
(v) Mandatory convertible subordinated debt (capital notes) issued pursuant to regulations and memoranda of the OCC.
(2)
(ii) Intermediate-term preferred stock issued pursuant to regulations and memoranda of the OCC and any related surplus:
(iii) Mandatory convertible subordinated debt (commitment notes) issued pursuant to regulations and memoranda of the OCC; and
(iv) Mandatorily redeemable preferred stock that was issued before July 23, 1985 or issued pursuant to regulations and memoranda of the Office of Thrift Supervision and approved in writing by the FSLIC for inclusion as regulatory capital before or after issuance.
(3)
(ii) A Federal savings association issuing maturing capital instruments after November 7, 1989, may choose, subject to paragraph (b)(3)(ii)(C) of this section, to include such instruments pursuant to either paragraph (b)(3)(ii)(A) or (b)(3)(ii)(B) of this section.
(A) At the beginning of each of the last five years of the life of the maturing capital instrument, the amount that is eligible to be included as supplementary capital is reduced by 20% of the original amount of that instrument (net of redemptions).
(B) Only the aggregate amount of maturing capital instruments that mature in any one year during the seven years immediately prior to an instrument's maturity that does not exceed 20% of an institution's capital will qualify as supplementary capital.
(C) Once a Federal savings association selects either paragraph (b)(3)(ii)(A) or (b)(3)(ii)(B) of this section for the issuance of a maturing capital instrument, it must continue to elect that option for all subsequent issuances of maturing capital instruments for as long as there is a balance outstanding of such issuances. Only when such issuances have all been repaid and the savings association has no balance of such issuances outstanding may the savings association elect the other option.
(4)
(5)
(c)
(2) The following assets, in addition to assets required to be deducted elsewhere in calculating core capital, are deducted from assets for purposes of determining total capital:
(i) Reciprocal holdings of depository institution capital instruments; and
(ii) All equity investments.
(a)
(1)
(i)
(B) Securities issued by and other direct claims on the U.S. Government or its agencies (to the extent such securities or claims are unconditionally backed by the full faith and credit of the United States Government) or the central government of an OECD country;
(C) Notes and obligations issued by either the Federal Savings and Loan Insurance Corporation or the Federal Deposit Insurance Corporation and backed by the full faith and credit of the United States Government;
(D) Deposit reserves at, claims on, and balances due from Federal Reserve Banks;
(E) The book value of paid-in Federal Reserve Bank stock;
(F) That portion of assets that is fully covered against capital loss and/or yield maintenance agreements by the Federal Savings and Loan Insurance Corporation or any successor agency.
(G) That portion of assets directly and unconditionally guaranteed by the United States Government or its agencies, or the central government of an OECD country.
(H) Claims on, and claims guaranteed by, a qualifying securities firm that are collateralized by cash on deposit in the savings association or by securities issued or guaranteed by the United States Government or its agencies, or the central government of an OECD country. To be eligible for this risk weight, the savings association must maintain a positive margin of collateral on the claim on a daily basis, taking into account any change in a savings association's exposure to the obligor or counterparty under the claim in relation to the market value of the collateral held in support of the claim.
(ii)
(B) That portion of assets collateralized by the current market value of securities issued or guaranteed by the United States government or its agencies, or the central government of an OECD country;
(C) That portion of assets conditionally guaranteed by the United States Government or its agencies, or the central government of an OECD country;
(D) Securities (not including equity securities) issued by and other claims on the U.S. Government or its agencies which are not backed by the full faith and credit of the United States Government;
(E) Securities (not including equity securities) issued by, or other direct claims on, United States Government-sponsored agencies;
(F) That portion of assets guaranteed by United States Government-sponsored agencies;
(G) That portion of assets collateralized by the current market value of securities issued or guaranteed by United States Government-sponsored agencies;
(H) Claims on, and claims guaranteed by, a qualifying securities firm, subject to the following conditions:
(
(
(
(
(
(
(
(
(I) Claims representing general obligations of any public-sector entity in an OECD country, and that portion of any claims guaranteed by any such public-sector entity;
(J) [Reserved]
(K) Balances due from and all claims on domestic depository institutions. This includes demand deposits and other transaction accounts, savings deposits and time certificates of deposit,
(L) The book value of paid-in Federal Home Loan Bank stock;
(M) Deposit reserves at, claims on and balances due from the Federal Home Loan Banks;
(N) Assets collateralized by cash held in a segregated deposit account by the reporting savings association;
(O) Claims on, or guaranteed by, official multilateral lending institutions or regional development institutions in which the United States Government is a shareholder or contributing member;
(P) That portion of assets collateralized by the current market value of securities issued by official multilateral lending institutions or regional development institutions in which the United States Government is a shareholder or contributing member.
(Q) All claims on depository institutions incorporated in an OECD country, and all assets backed by the full faith and credit of depository institutions incorporated in an OECD country. This includes the credit equivalent amount of participations in commitments and standby letters of credit sold to other depository institutions incorporated in an OECD country, but only if the originating bank remains liable to the customer or beneficiary for the full amount of the commitment or standby letter of credit. Also included in this category are the credit equivalent amounts of risk participations in bankers' acceptances conveyed to other depository institutions incorporated in an OECD country. However, bank-issued securities that qualify as capital of the issuing bank are not included in this risk category;
(R) Claims on, or guaranteed by depository institutions other than the central bank, incorporated in a non-OECD country, with a remaining maturity of one year or less;
(S) That portion of local currency claims conditionally guaranteed by central governments of non-OECD countries, to the extent the savings association has local currency liabilities in that country.
(iii)
(B) Qualifying mortgage loans and qualifying multifamily mortgage loans;
(C) Privately-issued mortgage-backed securities (
(D) Qualifying residential construction loans as defined in § 167.1 of this part.
(iv)
(A) Consumer loans;
(B) Commercial loans;
(C) Home equity loans;
(D) Non-qualifying mortgage loans;
(E) Non-qualifying multifamily mortgage loans;
(F) Residential construction loans;
(G) Land loans;
(H) Nonresidential construction loans;
(I) Obligations issued by any state or any political subdivision thereof for the benefit of a private party or enterprise where that party or enterprise, rather than the issuing state or political subdivision, is responsible for the timely payment of principal and interest on the obligations,
(J) Debt securities not otherwise described in this section;
(K) Investments in fixed assets and premises;
(L) Certain nonsecurity financial instruments including servicing assets and intangible assets includable in core capital under § 167.12 of this part;
(M) Interest-only strips receivable, other than credit-enhancing interest-only strips;
(N)-(O) [Reserved]
(P) That portion of equity investments not deducted pursuant to § 167.5 of this part;
(Q) The prorated assets of subsidiaries (except for the assets of includable, fully consolidated subsidiaries) to the extent such assets are included in adjusted total assets;
(R) All repossessed assets or assets that are more than 90 days past due; and
(S) Equity investments that the OCC determines have the same risk characteristics as foreclosed real estate by the savings association;
(T) Equity investments permissible for a national bank.
(v) [Reserved]
(vi)
(2)
(i)
(A) [Reserved]
(B) Risk participations purchased in bankers' acceptances;
(C) [Reserved]
(D) Forward agreements and other contingent obligations with a certain draw down,
(E) Indemnification of customers whose securities the savings association has lent as agent. If the customer is not indemnified against loss by the savings association, the transaction is excluded from the risk-based capital calculation. When a savings association lends its own securities, the transaction is treated as a loan. When a savings association lends its own securities or is acting as agent, agrees to indemnify a customer, the transaction is assigned to the risk weight appropriate to the obligor or collateral that is delivered to the lending or indemnifying institution or to an independent custodian acting on their behalf.
(ii)
(B) Unused portions of commitments (including home equity lines of credit and eligible ABCP liquidity facilities) with an original maturity exceeding one year except those listed in paragraph (a)(2)(v) of this section. For eligible ABCP liquidity facilities, the resulting credit equivalent amount is assigned to the risk category appropriate to the assets to be funded by the liquidity facility based on the assets or the obligor, after considering any collateral or guarantees, or external credit ratings under paragraph (b)(3) of this section, if applicable; and
(C) Revolving underwriting facilities, note issuance facilities, and similar arrangements pursuant to which the savings association's customer can issue short-term debt obligations in its own name, but for which the savings association has a legally binding commitment to either:
(
(
(iii)
(iv)
(v)
(B) Unused commitments with an original maturity greater than one year, if they are unconditionally cancelable at any time at the option of the savings association and the savings association has the contractual right to make, and in fact does make, either:
(
(
(C) The unused portion of retail credit card lines or other related plans that are unconditionally cancelable by the savings association in accordance with applicable law.
(vi)
(
(
(B)
(
(
(
(
(
(
(
(
(C)
(D)
(E)
(
(
(
(b)
(i) Multiply the full amount of the credit-enhanced assets for which the savings association directly or indirectly retains or assumes credit risk by a 100 percent conversion factor. (For a direct credit substitute that is an on-balance sheet asset (e.g., a purchased subordinated security), a Federal savings association must use the amount of the direct credit substitute and the full amount of the asset its supports,
(ii) Assign this credit equivalent amount to the risk-weight category appropriate to the obligor in the underlying transaction, after considering any associated guarantees or collateral. Paragraph (a)(1) of this section lists the risk-weight categories.
(2)
(i)
(ii)
(iii)
(A) The risk-based capital requirement for the residual interest as calculated under paragraph (b)(2)(i) through (ii) of this section; or
(B) The full risk-based capital requirement for the assets transferred, subject to the low-level recourse rules under paragraph (b)(7) of this section.
(3)
Note: Stripped mortgage-backed securities or other similar instruments, such as interest-only and principal-only strips, that are not credit enhancing must be assigned to the 100% risk-weight category.
(ii)
(
(
(
(B)
(
(
(
(
(
(C)
(4)
(ii)
(A)
(
(
(
(
(
(
(
(
(
(B)
(
(
(C)
(5)
(A)
(
(
(B)
(ii)
(iii)
(iv)
(v)
(B) A Federal savings association shall compute its capital requirement without regard to this paragraph (b)(5) for the purposes of applying 12 U.S.C. 1831o(g), regardless of the association's capital level.
(6)
(i) If a Federal savings association conveys a risk participation in a direct credit substitute, the savings association must convert the full amount of the assets that are supported by the direct credit substitute to a credit equivalent amount using a 100 percent conversion factor. The savings association must assign the
(ii) If a Federal savings association acquires a risk participation in a direct
(iii) If the Federal savings association holds a direct credit substitute in the form of a syndication where each savings association or other participant is obligated only for its
(7)
(ii)
(iii)
(8)
(a) The minimum leverage capital requirement for a Federal savings association assigned a composite rating of 1, as defined in § 116.3 of this chapter, shall consist of a ratio of core capital to adjusted total assets of 3 percent. These generally are strong associations that are not anticipating or experiencing significant growth and have well-diversified risks, including no undue interest rate risk exposure, excellent asset quality, high liquidity, and good earnings.
(b) For all Federal savings associations not meeting the conditions set forth in paragraph (a) of this section, the minimum leverage capital requirement shall consist of a ratio of core capital to adjusted total assets of 4 percent. Higher capital ratios may be required if warranted by the particular circumstances or risk profiles of an individual Federal savings association. In all cases, Federal savings associations should hold capital commensurate with the level and nature of all risks, including the volume and severity of problem loans, to which they are exposed.
(a) Federal savings associations shall have and maintain tangible capital in an amount equal to at least 1.5% of adjusted total assets.
(b) The following elements, less the amount of any deductions pursuant to paragraph (c) of this section, comprise a Federal savings association's tangible capital:
(1) Common stockholders' equity (including retained earnings);
(2) Noncumulative perpetual preferred stock and related earnings;
(3) Nonwithdrawable accounts and pledged deposits that would qualify as core capital under § 167.5 of this part; and
(4) Minority interests in the equity accounts of fully consolidated subsidiaries.
(c)
(1) Intangible assets (as defined in § 167.1) except for mortgage servicing assets to the extent they are includable in tangible capital under § 167.12, and credit enhancing interest-only strips and deferred tax assets not includable in tangible capital under § 167.12.
(2) Investments, both equity and debt, in subsidiaries that are not includable subsidiaries (including those subsidiaries where the savings association has a minority ownership interest), except as provided in paragraphs (c)(3) and (c)(4) of this section.
(3) If a Federal savings association has any investments (both debt and equity) in one or more subsidiary(ies) engaged in any activity that would not fall within the scope of activities in which includable subsidiaries may engage, it must deduct such investments from assets and, thus, tangible capital in accordance with this paragraph (c)(3). The savings association must first deduct from assets and, thus, capital the amount by which any investments in such a subsidiary(ies) exceed the amount of such investments held by the savings association. Next, the savings association must deduct from assets and, thus, tangible capital the savings association's investments in and extensions of credit to the subsidiary on the date as of which the savings association's capital is being determined.
(4) If a savings association holds a subsidiary (either directly or through a subsidiary) that is itself a domestic depository institution the OCC may, in
(a)
(2) The OCC shall require any Federal savings association not in compliance with capital standards to submit a capital plan that:
(i) Addresses the savings association's need for increased capital;
(ii) Describes the manner in which the savings association will increase capital so as to achieve compliance with capital standards;
(iii) Specifies types and levels of activities in which the savings association will engage;
(iv) Requires any increase in assets to be accompanied by increase in tangible capital not less in percentage amount than the leverage limit then applicable;
(v) Requires any increase in assets to be accompanied by an increase in capital not less in percentage amount than required under the risk-based capital standard then applicable; and
(vi) Is acceptable to the Comptroller.
(3) To be acceptable to the Comptroller under this section, a plan must, in addition to satisfying all of the requirements set forth in paragraphs (a)(2)(i) through (a)(2)(v) of this section, contain a certification that while the plan is under review by the OCC, the savings association will not, without the prior written approval of the OCC:
(i) Grow beyond net interest credited;
(ii) Make any capital distributions; or
(iii) Act inconsistently with any other limitations on activities established by statute, regulation or by the OCC in supervisory guidance for Federal savings associations not meeting capital standards.
(4) If the plan submitted to the Comptroller under paragraph (a)(2) of this section is not approved by the Comptroller, the savings association shall immediately and without any further action, be subject to the following restrictions:
(i) It may not increase its assets beyond the amount held on the day it receives written notice of the Comptroller's disapproval of the plan; and
(ii) It must comply with any other restrictions or limitations set forth in the written notice of the Comptroller's disapproval of the plan.
(b) The Comptroller shall:
(1) Prohibit any asset growth by any Federal savings association not in compliance with capital standards,
(2) Require any Federal savings association not in compliance with capital standards to comply with a capital directive issued by the Comptroller which may include the restrictions contained in paragraph (e) of this section and any other restrictions the Comptroller determines appropriate.
(c) A Federal savings association that wishes to obtain an exemption from the sanctions provided in paragraph (b)(2) of this section must file a request for exemption with the OCC. Such request must include a capital plan that satisfies the requirements of paragraph (a)(2) of this section.
(d) The Comptroller may permit any Federal savings association that is subject to paragraph (b) of this section to increase its assets in an amount not exceeding the amount of net interest credited to the savings association's deposit liabilities, if:
(1) The savings association obtains the Comptroller's prior approval;
(2) Any increase in assets is accompanied by an increase in tangible capital in an amount not less than 3% of the increase in assets;
(3) Any increase in assets is accompanied by an increase in capital not less in percentage amount than required under the risk-based capital standards then applicable;
(4) Any increase in assets is invested in low-risk assets; and
(5) The savings association's ratio of core capital to total assets is not less than the ratio existing on January 1, 1991.
(e) If a Federal savings association fails to meet the risk-based capital requirement, the leverage ratio requirement, or the tangible capital requirement established under this part, the Comptroller may, through enforcement proceedings or otherwise, require such savings association to take one or more of the following corrective actions:
(1) Increase the amount of its regulatory capital to a specified level or levels;
(2) Convene a meeting or meetings with the supervision staff of the OCC for the purpose of accomplishing the objectives of this section;
(3) Reduce the rate of earnings that may be paid on savings accounts;
(4) Limit the receipt of deposits to those made to existing accounts;
(5) Cease or limit the issuance of new accounts of any or all classes or categories, except in exchange for existing accounts;
(6) Cease or limit lending or the making of a particular type or category of loan;
(7) Cease or limit the purchase of loans or the making of specified other investments;
(8) Limit operational expenditures to specified levels;
(9) Increase liquid assets and maintain such increased liquidity at specified levels; or
(10) Take such other action or actions as the Comptroller may deem necessary or appropriate for the safety and soundness of the savings association, or depositors or investors in the savings association.
(f) The Comptroller shall treat as an unsafe and unsound practice any material failure by a Federal savings association to comply with any plan, regulation, written agreement undertaken under this section or order or directive issued to comply with the requirements of this part.
(a)
(b)
(c)(1)
(2) Notwithstanding § 167.6 of this part, the OCC will look to the substance of a transaction and may find that the assigned risk weight for any asset, or credit equivalent amount or credit conversion factor for any off-balance sheet item does not appropriately reflect the risks imposed on the savings association. The OCC may require the savings association to apply another risk-weight, credit equivalent amount, or credit conversion factor that the OCC deems appropriate.
(3) The OCC may find that the capital treatment for an exposure to a transaction not subject to consolidation on the savings association's balance sheet does not appropriately reflect the risks imposed on the savings association. Accordingly, the OCC may require the savings association to treat the transaction as if it were consolidated on the savings association's balance sheet. The OCC will look to the substance of and risk associated with the transaction as well as other relevant factors in determining whether to require such treatment and in calculating risk based capital as the OCC deems appropriate.
(4) If this part does not specifically assign a risk weight, credit equivalent amount, or credit conversion factor, the OCC may assign any risk weight, credit equivalent amount, or credit conversion factor that it deems appropriate. In making this determination, the OCC will consider the risks associated with the asset or off-balance sheet item as well as other relevant factors.
(d) In making a determination under this paragraph (c) of this section, the OCC will notify the savings association of the determination and solicit a response from the savings association. After review of the response by the savings association, the OCC shall issue a final supervisory decision regarding the determination made under paragraph (c) of this section.
(a)
(b)
(2) In accordance with the restrictions in this section, mortgage servicing assets may be included in computing core and tangible capital and nonmortgage servicing assets may be included in core capital.
(3) Intangible assets, as defined in § 167.1 of this part, other than purchased credit card relationships described in paragraph (b)(1) of this section, servicing assets described in paragraph (b)(2) of this section, and core deposit intangibles described in paragraph (g)(3) of this section, are deducted in computing tangible and core capital, subject to paragraph (e)(3)(ii) of this section.
(4) Credit-enhancing interest-only strips may be included (that is not deducted) in computing core capital subject to the restrictions of this section, and may be included in tangible capital in the same amount.
(5) Deferred tax assets may be included (that is not deducted) in computing core capital subject to the restrictions of paragraph (h) of this section, and may be included in tangible capital in the same amount.
(c)
(d)
(1) 90 percent of their fair value determined in accordance with paragraph (c) of this section; or
(2) 100 percent of their remaining unamortized book value determined in accordance with the instructions for the Call Report or TFR, as appropriate.
(e)
(A) 100 percent of the amount of core capital; or
(B) The amount of servicing assets and purchased credit card relationships determined in accordance with paragraph (d) of this section.
(ii) In addition to the aggregate limitation in paragraph (e)(1)(i) of this section, a sublimit applies to purchased credit card relationships and non mortgage-related serving assets. The maximum allowable amount of these two types of assets combined is limited to the lesser of:
(A) 25 percent the amount of core capital; and
(B) The amount of purchased credit card relationships and non mortgage-related servicing assets determined in accordance with paragraph (d) of this section.
(2)
(3)
(ii) A Federal savings association may elect to deduct the following items on a basis net of deferred tax liabilities:
(A) Disallowed servicing assets;
(B) Goodwill such that only the net amount must be deducted from Tier 1 capital;
(C) Disallowed credit-enhancing interest only strips (both purchased and retained); and
(D) Other intangible assets arising from non-taxable business combinations. A deferred tax liability that is specifically related to an intangible asset (other than purchased credit card relationships) arising from a nontaxable business combination may be netted against this intangible asset. The net amount of the intangible asset must be deducted from Tier 1 capital.
(iii) Deferred tax liabilities that are netted in accordance with paragraph (e)(3)(ii) of this section cannot also be netted against deferred tax assets when determining the amount of deferred tax assets that are dependent upon future taxable income.
(f)
(g)
(i) The thrift and subsidiary are not conducting activities on an arm's length basis; or
(ii) The exemption is not consistent with the association's safe and sound operation.
(2)
(i) The association's investments in, and extensions of credit to, the subsidiary are deducted from capital when calculating capital under this part;
(ii) Extensions of credit and other transactions with the subsidiary are conducted in compliance with the rules for covered transactions with affiliates set forth in sections 23A and 23B of the Federal Reserve Act, as applied to thrifts; and
(iii) Any contracts entered into by the subsidiary include a written disclosure indicating that the subsidiary is not a bank or Federal savings association; the subsidiary is an organization separate and apart from any bank or Federal savings association; and the obligations of the subsidiary are not backed or guaranteed by any bank or Federal savings association and are not insured by the FDIC.
(h)
(1) Tier 1 capital limitations. (i) The maximum allowable amount of deferred tax assets net of any valuation allowance that are dependent upon future taxable income will be limited to the lesser of:
(A) The amount of deferred tax assets that are dependent upon future taxable income that is expected to be realized within one year of the calendar quarter-end date, based on a projected future taxable income for that year; or
(B) Ten percent of the amount of Tier 1 capital that exists before the deduction of any disallowed servicing assets, any disallowed purchased credit card relationships, any disallowed credit-enhancing interest-only strips, and any disallowed deferred tax assets.
(ii) For purposes of this limitation, all existing temporary differences should be assumed to fully reverse at the calendar quarter-end date. The recorded amount of deferred tax assets that are dependent upon future taxable income, net of any valuation allowance for deferred tax assets, in excess of this limitation will be deducted from assets and from equity capital for purposes of determining Tier 1 capital under this part. The amount of deferred tax assets that can be realized from taxes paid in prior carryback years and from the reversal of existing taxable temporary differences generally would not be deducted from assets and from equity capital.
(iii) Notwithstanding paragraph (h)(1)(B)(ii) of this section, the amount of carryback potential that may be considered in calculating the amount of deferred tax assets that a Federal savings association that is part of a consolidated group (for tax purposes) may include in Tier 1 capital may not exceed the amount which the association could reasonably expect to have refunded by its parent.
(2) Projected future taxable income. Projected future taxable income should not include net operating loss carryforwards to be used within one year of the most recent calendar quarter-end date or the amount of existing temporary differences expected to reverse within that year. Projected future taxable income should include the estimated effect of tax planning strategies that are expected to be implemented to realize tax carryforwards that will otherwise expire during that year. Future taxable income projections for the current fiscal year (adjusted for any significant changes that have occurred or are expected to occur) may be used when applying the capital limit at an interim calendar quarter-end date rather than preparing a new projection each quarter.
(3)
(a)
(1) Minimum qualifying criteria for Federal savings associations using Federal savings association-specific internal risk measurement and management processes for calculating risk-based capital requirements;
(2) Methodologies for such Federal savings associations to calculate their risk-based capital requirements; and
(3) Public disclosure requirements for such Federal savings associations.
(b)
(i) Has consolidated assets, as reported on the most recent year-end Consolidated Reports of Condition and Income (Call Report) or Thrift Financial Report (TFR), as appropriate, equal to $250 billion or more;
(ii) Has consolidated total on-balance sheet foreign exposure at the most recent year-end equal to $10 billion or more (where total on-balance sheet foreign exposure equals total cross-border claims less claims with head office or guarantor located in another country plus redistributed guaranteed amounts to the country of head office or guarantor plus local country claims on local residents plus revaluation gains on foreign exchange and derivative products, calculated in accordance with the Federal Financial Institutions Examination Council (FFIEC) 009 Country Exposure Report);
(iii) Is a subsidiary of a depository institution that uses 12 CFR part 3, appendix C, 12 CFR part 208, appendix F, 12 CFR part 325, appendix D, or 12 CFR part 167, appendix C, to calculate its risk-based capital requirements; or
(iv) Is a subsidiary of a bank holding company that uses 12 CFR part 225, appendix G, to calculate its risk-based capital requirements.
(2) Any Federal savings association may elect to use this appendix to calculate its risk-based capital requirements.
(3) A Federal savings association that is subject to this appendix must use this appendix unless the OCC determines in writing that application of this appendix is not appropriate in light of the savings association's asset size, level of complexity, risk profile, or scope of operations. In making a determination under this paragraph, the OCC will apply notice and response procedures in the same manner and to the same extent as the notice and response procedures in § 167.3(d).
(c)
(2)
(ii) If the OCC determines that the risk-weighted asset amount for operational risk produced by the savings association under this appendix is not commensurate with the operational risks of the savings association, the OCC may require the savings association to assign a different risk-weighted asset amount for operational risk, to change elements of its operational risk analytical framework, including distributional and dependence assumptions, or to make other changes to the savings association's operational risk management processes, data and assessment systems, or quantification systems, all as specified by the OCC.
(3)
(4)
(d)
(1) The savings association can demonstrate on an ongoing basis to the satisfaction of the OCC that not applying the provision would, in all circumstances, unambiguously generate a risk-based capital requirement for each such exposure greater than that which would otherwise be required under this appendix;
(2) The savings association appropriately manages the risk of each such exposure;
(3) The savings association notifies the OCC in writing prior to applying this principle to each such exposure; and
(4) The exposures to which the savings association applies this principle are not, in the aggregate, material to the savings association.
(1) With respect to an exposure that has multiple external ratings assigned by NRSROs, the lowest solicited external rating assigned to the exposure by any NRSRO; and
(2) With respect to an exposure that has a single external rating assigned by an NRSRO, the external rating assigned to the exposure by the NRSRO.
(1) With respect to an exposure that has multiple inferred ratings, the lowest inferred rating based on a solicited external rating; and
(2) With respect to an exposure that has a single inferred rating, the inferred rating.
(1) Has an external rating; and
(2) Is backed by underlying exposures held in a bankruptcy-remote SPE.
(1) Establishes an ABCP program;
(2) Approves the sellers permitted to participate in an ABCP program;
(3) Approves the exposures to be purchased by an ABCP program; or
(4) Administers the ABCP program by monitoring the underlying exposures, underwriting or otherwise arranging for the placement of debt or other obligations issued by the program, compiling monthly reports, or ensuring compliance with the program documents and with the program's credit and investment policy.
(1) Owns, controls, or holds with power to vote 25 percent or more of a class of voting securities of the company; or
(2) Consolidates the company for financial reporting purposes.
(1) The originating Federal savings association has appropriate policies and procedures to ensure that it has sufficient capital and liquidity available in the event of an early amortization;
(2) Throughout the duration of the securitization (including the early amortization period), there is the same pro rata sharing of interest, principal, expenses, losses, fees, recoveries, and other cash flows from the underlying exposures based on the originating Federal savings association's and the investors' relative shares of the underlying exposures outstanding measured on a consistent monthly basis;
(3) The amortization period is sufficient for at least 90 percent of the total underlying exposures outstanding at the beginning of the early amortization period to be repaid or recognized as in default; and
(4) The schedule for repayment of investor principal is not more rapid than would be allowed by straight-line amortization over an 18-month period.
(1) Represents a contractual right to receive some or all of the interest and no more than a minimal amount of principal due on the underlying exposures of a securitization; and
(2) Exposes the holder to credit risk directly or indirectly associated with the underlying exposures that exceeds a pro rata share of the holder's claim on the underlying exposures, whether through subordination provisions or other credit-enhancement techniques.
(1) Early default clauses and similar warranties that permit the return of, or premium refund clauses that cover, first-lien residential mortgage exposures for a period not to exceed 120 days from the date of transfer, provided that the date of transfer is within one year of origination of the residential mortgage exposure;
(2) Premium refund clauses that cover underlying exposures guaranteed, in whole or in part, by the U.S. government, a U.S. government agency, or a U.S. government sponsored enterprise, provided that the clauses are for a period not to exceed 120 days from the date of transfer; or
(3) Warranties that permit the return of underlying exposures in instances of misrepresentation, fraud, or incomplete documentation.
(1) Total wholesale and retail risk-weighted assets;
(2) Risk-weighted assets for securitization exposures; and
(3) Risk-weighted assets for equity exposures.
(A) The exposure is 180 days past due, in the case of a residential mortgage exposure or revolving exposure;
(B) The exposure is 120 days past due, in the case of all other retail exposures; or
(C) The savings association has taken a full or partial charge-off, write-down of principal, or material negative fair value adjustment of principal on the exposure for credit-related reasons.
(ii) Notwithstanding paragraph (1)(i) of this definition, for a retail exposure held by a non-U.S. subsidiary of the savings association that is subject to an internal ratings-based approach to capital adequacy consistent with the Basel Committee on Banking Supervision's “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” in a non-U.S. jurisdiction, the savings association may elect to use the definition of default that is used in that jurisdiction, provided that the savings association has obtained prior approval from the OCC to use the definition of default in that jurisdiction.
(iii) A retail exposure in default remains in default until the savings association has reasonable assurance of repayment and performance for all contractual principal and interest payments on the exposure.
(2)
(A) The savings association determines that the obligor is unlikely to pay its credit obligations to the savings association in full, without recourse by the savings association to actions such as realizing collateral (if held); or
(B) The obligor is past due more than 90 days on any material credit obligation(s) to the savings association.
(ii) An obligor in default remains in default until the savings association has reasonable assurance of repayment and performance for all contractual principal and interest payments on all exposures of the savings association to the obligor (other than exposures that have been fully written-down or charged-off).
(1) Is triggered solely by events not directly related to the performance of the underlying exposures or the originating Federal savings association (such as material changes in tax laws or regulations); or
(2) Leaves investors fully exposed to future draws by obligors on the underlying exposures even after the provision is triggered.
(1) For wholesale exposures other than repo-style transactions, eligible margin loans, and OTC derivative contracts described in paragraph (2) or (3) of this definition:
(i) The weighted-average remaining maturity (measured in years, whole or fractional) of the expected contractual cash flows from the exposure, using the undiscounted amounts of the cash flows as weights; or
(ii) The nominal remaining maturity (measured in years, whole or fractional) of the exposure.
(2) For repo-style transactions, eligible margin loans, and OTC derivative contracts subject to a qualifying master netting agreement for which the savings association does not apply the internal models approach in paragraph (d) of section 32 of this appendix, the weighted-average remaining maturity (measured in years, whole or fractional) of the individual transactions subject to the qualifying master netting agreement, with the weight of each individual transaction set equal to the notional amount of the transaction.
(3) For repo-style transactions, eligible margin loans, and OTC derivative contracts for which the savings association applies the internal models approach in paragraph (d) of section 32 of this appendix, the value determined in paragraph (d)(4) of section 32 of this appendix.
(1) Is exercisable solely at the discretion of the originating Federal savings association or servicer;
(2) Is not structured to avoid allocating losses to securitization exposures held by investors or otherwise structured to provide credit enhancement to the securitization; and
(3)(i) For a traditional securitization, is only exercisable when 10 percent or less of the principal amount of the underlying exposures or securitization exposures (determined as of the inception of the securitization) is outstanding; or
(ii) For a synthetic securitization, is only exercisable when 10 percent or less of the principal amount of the reference portfolio of underlying exposures (determined as of the inception of the securitization) is outstanding.
(1) The contract meets the requirements of an eligible guarantee and has been confirmed by the protection purchaser and the protection provider;
(2) Any assignment of the contract has been confirmed by all relevant parties;
(3) If the credit derivative is a credit default swap or nth-to-default swap, the contract includes the following credit events:
(i) Failure to pay any amount due under the terms of the reference exposure, subject to any applicable minimal payment threshold that is consistent with standard market practice and with a grace period that is closely in line with the grace period of the reference exposure; and
(ii) Bankruptcy, insolvency, or inability of the obligor on the reference exposure to pay its debts, or its failure or admission in writing of its inability generally to pay its debts as they become due, and similar events;
(4) The terms and conditions dictating the manner in which the contract is to be settled are incorporated into the contract;
(5) If the contract allows for cash settlement, the contract incorporates a robust valuation process to estimate loss reliably and specifies a reasonable period for obtaining post-credit event valuations of the reference exposure;
(6) If the contract requires the protection purchaser to transfer an exposure to the protection provider at settlement, the terms of at least one of the exposures that is permitted to be transferred under the contract provides that any required consent to transfer may not be unreasonably withheld;
(7) If the credit derivative is a credit default swap or nth-to-default swap, the contract clearly identifies the parties responsible for determining whether a credit event has occurred, specifies that this determination is not the sole responsibility of the protection provider, and gives the protection purchaser the right to notify the protection provider of the occurrence of a credit event; and
(8) If the credit derivative is a total return swap and the savings association records net payments received on the swap as net income, the savings association records offsetting deterioration in the value of the hedged exposure (either through reductions in fair value or by an addition to reserves).
(1)
(i) At the time the guarantor issued the guarantee or credit derivative or at any time thereafter, the savings association assigned a PD to the guarantor's rating grade that was equal to or lower than the PD associated with a long-term external rating in the third-highest investment-grade rating category; and
(ii) The savings association currently assigns a PD to the guarantor's rating grade that is equal to or lower than the PD associated with a long-term external rating in the lowest investment-grade rating category; or
(2)
(i) The savings association demonstrates that the guarantor is subject to consolidated supervision and regulation comparable to that imposed on U.S. depository institutions, securities broker-dealers, or insurance companies (as the case may be), or has issued and outstanding an unsecured long-term debt security without credit enhancement that has a long-term applicable external rating of at least investment grade;
(ii) At the time the guarantor issued the guarantee or credit derivative or at any time thereafter, the savings association assigned a PD to the guarantor's rating grade that was equal to or lower than the PD associated with a long-term external rating in the third-highest investment-grade rating category; and
(iii) The savings association currently assigns a PD to the guarantor's rating grade that is equal to or lower than the PD associated with a long-term external rating in the lowest investment-grade rating category.
(1) Is written and unconditional;
(2) Covers all or a pro rata portion of all contractual payments of the obligor on the reference exposure;
(3) Gives the beneficiary a direct claim against the protection provider;
(4) Is not unilaterally cancelable by the protection provider for reasons other than the breach of the contract by the beneficiary;
(5) Is legally enforceable against the protection provider in a jurisdiction where the protection provider has sufficient assets against which a judgment may be attached and enforced;
(6) Requires the protection provider to make payment to the beneficiary on the occurrence of a default (as defined in the guarantee) of the obligor on the reference exposure in a timely manner without the beneficiary first having to take legal actions to pursue the obligor for payment;
(7) Does not increase the beneficiary's cost of credit protection on the guarantee in response to deterioration in the credit quality of the reference exposure; and
(8) Is not provided by an affiliate of the savings association, unless the affiliate is an insured depository institution, bank, securities broker or dealer, or insurance company that:
(i) Does not control the savings association; and
(ii) Is subject to consolidated supervision and regulation comparable to that imposed on U.S. depository institutions, securities broker-dealers, or insurance companies (as the case may be).
(1) The extension of credit is collateralized exclusively by liquid and readily marketable debt or equity securities, gold, or conforming residential mortgages;
(2) The collateral is marked to market daily, and the transaction is subject to daily margin maintenance requirements;
(3) The extension of credit is conducted under an agreement that provides the savings association the right to accelerate and terminate the extension of credit and to liquidate or set off collateral promptly upon an event of default (including upon an event of bankruptcy, insolvency, or similar proceeding) of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions;
(4) The savings association has conducted sufficient legal review to conclude with a well-founded basis (and maintains sufficient written documentation of that legal review) that the agreement meets the requirements of paragraph (3) of this definition and is legal, valid, binding, and enforceable under applicable law in the relevant jurisdictions.
(1) Are generated by internal business practices to absorb highly predictable and reasonably stable operational losses, including reserves calculated consistent with GAAP; and
(2) Are available to cover expected operational losses with a high degree of certainty over a one-year horizon.
(1) The savings association or securitization SPE purchased from an unaffiliated seller and did not directly or indirectly originate;
(2) Was generated on an arm's-length basis between the seller and the obligor (intercompany accounts receivable and receivables subject to contra-accounts between firms that buy and sell to each other do not satisfy this criterion);
(3) Provides the savings association or securitization SPE with a claim on all proceeds from the exposure or a pro rata interest in the proceeds from the exposure;
(4) Has an M of less than one year; and
(5) When consolidated by obligor, does not represent a concentrated exposure relative to the portfolio of purchased wholesale exposures.
(1) A sovereign entity, the Bank for International Settlements, the International Monetary Fund, the European Central Bank, the European Commission, a Federal Home Loan Bank, Federal Agricultural Mortgage Corporation (Farmer Mac), a multilateral development bank, a depository institution, a bank holding company, a savings and loan holding company (as defined in 12 U.S.C. 1467a) provided all or substantially all of the holding company's activities are permissible for a financial holding company under 12 U.S.C. 1843(k), a foreign bank (as defined in § 211.2 of the Federal Reserve Board's Regulation K (12 CFR 211.2)), or a securities firm;
(2) Any other entity (other than a securitization SPE) that has issued and outstanding an unsecured long-term debt security without credit enhancement that has a long-term applicable external rating in one of the three highest investment-grade rating categories; or
(3) Any other entity (other than a securitization SPE) that has a PD assigned by the savings association that is lower than or equal to the PD associated with a long-term external rating in the third highest investment-grade rating category.
(1) The servicer is entitled to full reimbursement of advances, except that a servicer may be obligated to make non-reimbursable advances for a particular underlying exposure if any such advance is contractually limited to an insignificant amount of the outstanding principal balance of that exposure;
(2) The servicer's right to reimbursement is senior in right of payment to all other claims on the cash flows from the underlying exposures of the securitization; and
(3) The servicer has no legal obligation to, and does not make advances to the securitization if the servicer concludes the advances are unlikely to be repaid.
(1) A security or instrument (whether voting or non-voting) that represents a direct or indirect ownership interest in, and is a residual claim on, the assets and income of a company, unless:
(i) The issuing company is consolidated with the Federal savings association under GAAP;
(ii) The savings association is required to deduct the ownership interest from tier 1 or tier 2 capital under this appendix;
(iii) The ownership interest incorporates a payment or other similar obligation on the part of the issuing company (such as an obligation to make periodic payments); or
(iv) The ownership interest is a securitization exposure;
(2) A security or instrument that is mandatorily convertible into a security or instrument described in paragraph (1) of this definition;
(3) An option or warrant that is exercisable for a security or instrument described in paragraph (1) of this definition; or
(4) Any other security or instrument (other than a securitization exposure) to the extent the return on the security or instrument is based on the performance of a security or instrument described in paragraph (1) of this definition.
(1) Gross finance charge collections and other income received by a securitization SPE (including market interchange fees) over a period minus interest paid to the holders
(2) The principal balance of the underlying exposures at the end of the period.
(1) For a wholesale exposure to a non-defaulted obligor or segment of non-defaulted retail exposures that is carried at fair value with gains and losses flowing through earnings or that is classified as held-for-sale and is carried at the lower of cost or fair value with losses flowing through earnings, zero.
(2) For all other wholesale exposures to non-defaulted obligors or segments of non-defaulted retail exposures, the product of PD times LGD times EAD for the exposure or segment.
(3) For a wholesale exposure to a defaulted obligor or segment of defaulted retail exposures, the Federal savings association's impairment estimate for allowance purposes for the exposure or segment.
(4) Total ECL is the sum of expected credit losses for all wholesale and retail exposures other than exposures for which the savings association has applied the double default treatment in section 34 of this appendix.
(i) If the exposure or segment is a security classified as available-for-sale, the savings associations carrying value (including net accrued but unpaid interest and fees) for the exposure or segment less any unrealized gains on the exposure or segment and plus any unrealized losses on the exposure or segment; or
(ii) If the exposure or segment is not a security classified as available-for-sale, the savings association's carrying value (including net accrued but unpaid interest and fees) for the exposure or segment.
(2) For the off-balance sheet component of a wholesale exposure or segment of retail exposures (other than an OTC derivative contract, or a repo-style transaction or eligible margin loan for which the savings association determines EAD under section 32 of this appendix) in the form of a loan commitment, line of credit, trade-related letter of credit, or transaction-related contingency, EAD means the savings association's best estimate of net additions to the outstanding amount owed the savings association, including estimated future additional draws of principal and accrued but unpaid interest and fees, that are likely to occur over a one-year horizon assuming the wholesale exposure or the retail exposures in the segment were to go into default. This estimate of net additions must reflect what would be expected during economic downturn conditions. Trade-related letters of credit are short-term, self-liquidating instruments that are used to finance the movement of goods and are collateralized by the underlying goods. Transaction-related contingencies relate to a particular transaction and include, among other things, performance bonds and performance-based letters of credit.
(3) For the off-balance sheet component of a wholesale exposure or segment of retail exposures (other than an OTC derivative contract, or a repo-style transaction or eligible margin loan for which the savings association determines EAD under section 32 of this appendix) in the form of anything other than a loan commitment, line of credit, trade-related letter of credit, or transaction-related contingency, EAD means the notional amount of the exposure or segment.
(4) EAD for OTC derivative contracts is calculated as described in section 32 of this appendix. A savings association also may determine EAD for repo-style transactions and eligible margin loans as described in section 32 of this appendix.
(5) For wholesale or retail exposures in which only the drawn balance has been securitized, the savings association must reflect its share of the exposures' undrawn balances in EAD. Undrawn balances of revolving exposures for which the drawn balances have been securitized must be allocated between the seller's and investors' interests on a pro rata basis, based on the proportions of the seller's and investors' shares of the securitized drawn balances.
(1) The credit rating fully reflects the entire amount of credit risk with regard to all payments owed to the holder of the exposure. If a holder is owed principal and interest on an exposure, the credit rating must fully reflect the credit risk associated with timely repayment of principal and interest. If a holder is owed only principal on an exposure, the credit rating must fully reflect only the credit risk associated with timely repayment of principal; and
(2) The credit rating is published in an accessible form and is or will be included in the transition matrices made publicly available by the NRSRO that summarize the historical performance of positions rated by the NRSRO.
(1) In the form of:
(i) Cash on deposit with the Federal savings association (including cash held for the savings association by a third-party custodian or trustee);
(ii) Gold bullion;
(iii) Long-term debt securities that have an applicable external rating of one category below investment grade or higher;
(iv) Short-term debt instruments that have an applicable external rating of at least investment grade;
(v) Equity securities that are publicly traded;
(vi) Convertible bonds that are publicly traded;
(vii) Money market mutual fund shares and other mutual fund shares if a price for the shares is publicly quoted daily; or
(viii) Conforming residential mortgages; and
(2) In which the savings association has a perfected, first priority security interest or, outside of the United States, the legal equivalent thereof (with the exception of cash on deposit and notwithstanding the prior security interest of any custodial agent).
(1) One- to four-family residential properties; or
(2) Commercial real estate projects in which:
(i) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio in the OCC's real estate lending standards at 12 CFR 160.100-160.101;
(ii) The borrower has contributed capital to the project in the form of cash or unencumbered readily marketable assets (or has paid development expenses out-of-pocket) of at least 15 percent of the real estate's appraised “as completed” value; and
(iii) The borrower contributed the amount of capital required by paragraph (2)(ii) of this definition before the Federal savings association advances funds under the credit facility, and the capital contributed by the borrower, or internally generated by the project, is contractually required to remain in the project throughout the life of the project. The life of a project concludes only when the credit facility is converted to permanent financing or is sold or paid in full. Permanent financing may be provided by the savings association that provided the ADC facility as long as the permanent financing is subject to the savings association's underwriting criteria for long-term mortgage loans.
(1) The securitization exposure does not have an external rating; and
(2) Another securitization exposure issued by the same issuer and secured by the same underlying exposures:
(i) Has an external rating;
(ii) Is subordinated in all respects to the unrated securitization exposure;
(iii) Does not benefit from any credit enhancement that is not available to the unrated securitization exposure; and
(iv) Has an effective remaining maturity that is equal to or longer than that of the unrated securitization exposure.
(1) All or substantially all of the assets of which are financial assets; and
(2) That has no material liabilities.
(1) The total amount of securitization exposures issued by the securitization SPE to investors; divided by
(2) The outstanding principal amount of underlying exposures.
(1) For a wholesale exposure, the greatest of:
(i) Zero;
(ii) The savings association's empirically based best estimate of the long-run default-weighted average economic loss, per dollar of EAD, the savings association would expect to incur if the obligor (or a typical obligor in the loss severity grade assigned by the savings association to the exposure) were to default within a one-year horizon over a mix of economic conditions, including economic downturn conditions; or
(iii) The savings association's empirically based best estimate of the economic loss, per dollar of EAD, the savings association would expect to incur if the obligor (or a typical obligor in the loss severity grade assigned by the savings association to the exposure) were to default within a one-year horizon during economic downturn conditions.
(2) For a segment of retail exposures, the greatest of:
(i) Zero;
(ii) The savings association's empirically based best estimate of the long-run default-weighted average economic loss, per dollar of EAD, the savings association would expect to incur if the exposures in the segment were to default within a one-year horizon over a mix of economic conditions, including economic downturn conditions; or
(iii) The savings association's empirically based best estimate of the economic loss, per dollar of EAD, the savings association would expect to incur if the exposures in the segment were to default within a one-year horizon during economic downturn conditions.
(3) The economic loss on an exposure in the event of default is all material credit-related losses on the exposure (including accrued but unpaid interest or fees, losses on the sale of collateral, direct workout costs, and an appropriate allocation of indirect workout costs). Where positive or negative cash flows on a wholesale exposure to a defaulted obligor or a defaulted retail exposure (including proceeds from the sale of collateral, workout costs, additional extensions of credit to facilitate repayment of the exposure, and draw-downs of unused credit lines) occur after the date of default, the economic loss must reflect the net present value of cash flows as of the default date using a discount rate appropriate to the risk of the defaulted exposure.
(1) Exposures to the same legal entity or natural person denominated in different currencies;
(2)(i) An income-producing real estate exposure for which all or substantially all of the repayment of the exposure is reliant on the cash flows of the real estate serving as collateral for the exposure; the savings association, in economic substance, does not have recourse to the borrower beyond the real estate collateral; and no cross-default or cross-acceleration clauses are in place other than clauses obtained solely out of an abundance of caution; and
(ii) Other credit exposures to the same legal entity or natural person; and
(3)(i) A wholesale exposure authorized under section 364 of the U.S. Bankruptcy Code (11 U.S.C. 364) to a legal entity or natural person who is a debtor-in-possession for purposes of Chapter 11 of the Bankruptcy Code; and
(ii) Other credit exposures to the same legal entity or natural person.
(1) Internal fraud, which means the operational loss event type category that comprises operational losses resulting from an act involving at least one internal party of a type intended to defraud, misappropriate property, or circumvent regulations, the law, or company policy, excluding diversity- and discrimination-type events.
(2) External fraud, which means the operational loss event type category that comprises operational losses resulting from an act by a third party of a type intended to defraud, misappropriate property, or circumvent the law. Retail credit card losses arising from non-contractual, third-party initiated fraud (for example, identity theft) are external fraud operational losses. All other third-party initiated credit losses are to be treated as credit risk losses.
(3) Employment practices and workplace safety, which means the operational loss event type category that comprises operational losses resulting from an act inconsistent with employment, health, or safety laws or agreements, payment of personal injury claims, or payment arising from diversity- and discrimination-type events.
(4) Clients, products, and business practices, which means the operational loss event type category that comprises operational losses resulting from the nature or design of a product or from an unintentional or negligent failure to meet a professional obligation to specific clients (including fiduciary and suitability requirements).
(5) Damage to physical assets, which means the operational loss event type category that comprises operational losses resulting from the loss of or damage to physical assets from natural disaster or other events.
(6) Business disruption and system failures, which means the operational loss event type category that comprises operational losses resulting from disruption of business or system failures.
(7) Execution, delivery, and process management, which means the operational loss event type category that comprises operational losses resulting from failed transaction processing or process management or losses arising from relations with trade counterparties and vendors.
(1) Directly or indirectly originated or securitized the underlying exposures included in the securitization; or
(2) Serves as an ABCP program sponsor to the securitization.
(1) An exposure to an individual for non-business purposes; or
(2) An exposure to an individual or company for business purposes if the Federal savings association's consolidated business credit exposure to the individual or company is $1 million or less.
(1) For a wholesale exposure to a non-defaulted obligor, the Federal savings association's empirically based best estimate of the long-run average one-year default rate for the rating grade assigned by the savings association to the obligor, capturing the average default experience for obligors in the rating grade over a mix of economic conditions (including economic downturn conditions) sufficient to provide a reasonable estimate of the average one-year default rate over the economic cycle for the rating grade.
(2) For a segment of non-defaulted retail exposures, the savings association's empirically based best estimate of the long-run average one-year default rate for the exposures in the segment, capturing the average default experience for exposures in the segment over a mix of economic conditions (including economic downturn conditions) sufficient to provide a reasonable estimate of the average one-year default rate over the economic cycle for the segment and adjusted upward as appropriate for segments for which seasoning effects are material. For purposes of this definition, a segment for which seasoning effects are material is a segment where there is a material relationship between the time since origination of exposures within the segment and the savings association's best estimate of the long-run average one-year default rate for the exposures in the segment.
(3) For a wholesale exposure to a defaulted obligor or segment of defaulted retail exposures, 100 percent.
(1) Any exchange registered with the SEC as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f); or
(2) Any non-U.S.-based securities exchange that:
(i) Is registered with, or approved by, a national securities regulatory authority; and
(ii) Provides a liquid, two-way market for the instrument in question, meaning that there are enough independent bona fide offers to buy and sell so that a sales price reasonably related to the last sales price or current bona fide competitive bid and offer quotations can be determined promptly and a trade can be settled at such a price within five business days.
(1) Facilitates trades between counterparties in one or more financial markets by either guaranteeing trades or novating contracts;
(2) Requires all participants in its arrangements to be fully collateralized on a daily basis; and
(3) The Federal savings association demonstrates to the satisfaction of the OCC is in sound financial condition and is subject to effective oversight by a national supervisory authority.
(1) The underlying financial transactions are OTC derivative contracts, eligible margin loans, or repo-style transactions; and
(2) The Federal savings association obtains a written legal opinion verifying the validity and enforceability of the agreement under applicable law of the relevant jurisdictions if the counterparty fails to perform upon an event of default, including upon an event of bankruptcy, insolvency, or similar proceeding.
(1) The agreement creates a single legal obligation for all individual transactions covered by the agreement upon an event of default, including bankruptcy, insolvency, or similar proceeding, of the counterparty;
(2) The agreement provides the Federal savings association the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set off collateral promptly upon an event of default, including upon an event of bankruptcy, insolvency, or similar proceeding, of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions;
(3) The Federal savings association has conducted sufficient legal review to conclude with a well-founded basis (and maintains sufficient written documentation of that legal review) that:
(i) The agreement meets the requirements of paragraph (2) of this definition; and
(ii) In the event of a legal challenge (including one resulting from default or from
(4) The Federal savings association establishes and maintains procedures to monitor possible changes in relevant law and to ensure that the agreement continues to satisfy the requirements of this definition; and
(5) The agreement does not contain a walkaway clause (that is, a provision that permits a non-defaulting counterparty to make a lower payment than it would make otherwise under the agreement, or no payment at all, to a defaulter or the estate of a defaulter, even if the defaulter or the estate of the defaulter is a net creditor under the agreement).
(1) Is revolving (that is, the amount outstanding fluctuates, determined largely by the borrower's decision to borrow and repay, up to a pre-established maximum amount);
(2) Is unsecured and unconditionally cancelable by the Federal savings association to the fullest extent permitted by Federal law; and
(3) Has a maximum exposure amount (drawn plus undrawn) of up to $100,000.
(1) The transaction is based solely on liquid and readily marketable securities, cash, gold, or conforming residential mortgages;
(2) The transaction is marked-to-market daily and subject to daily margin maintenance requirements;
(3)(i) The transaction is a “securities contract” or “repurchase agreement” under section 555 or 559, respectively, of the Bankruptcy Code (11 U.S.C. 555 or 559), a qualified financial contract under section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)), or a netting contract between or among financial institutions under sections 401-407 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4401-4407) or the Federal Reserve Board's Regulation EE (12 CFR part 231); or
(ii) If the transaction does not meet the criteria set forth in paragraph (3)(i) of this definition, then either:
(A) The transaction is executed under an agreement that provides the savings association the right to accelerate, terminate, and close-out the transaction on a net basis and to liquidate or set off collateral promptly upon an event of default (including upon an event of bankruptcy, insolvency, or similar proceeding) of the counterparty, provided that, in any such case, any exercise of rights under the agreement will not be stayed or avoided under applicable law in the relevant jurisdictions; or
(B) The transaction is:
(
(
(4) The savings association has conducted sufficient legal review to conclude with a well-founded basis (and maintains sufficient written documentation of that legal review) that the agreement meets the requirements of paragraph (3) of this definition and is legal, valid, binding, and enforceable under applicable law in the relevant jurisdictions.
(1) An exposure that is primarily secured by a first or subsequent lien on one- to four-family residential property; or
(2) An exposure with an original and outstanding amount of $1 million or less that is primarily secured by a first or subsequent lien on residential property that is not one to four family.
(1) A direct exposure to a sovereign entity; or
(2) An exposure directly and unconditionally backed by the full faith and credit of a sovereign entity.
(1) All or a portion of the credit risk of one or more underlying exposures is transferred to one or more third parties through the use of one or more credit derivatives or guarantees (other than a guarantee that transfers only the credit risk of an individual retail exposure);
(2) The credit risk associated with the underlying exposures has been separated into at least two tranches reflecting different levels of seniority;
(3) Performance of the securitization exposures depends upon the performance of the underlying exposures; and
(4) All or substantially all of the underlying exposures are financial exposures (such as loans, commitments, credit derivatives, guarantees, receivables, asset-backed securities, mortgage-backed securities, other debt securities, or equity securities).
(1) The sum of:
(i) Credit risk-weighted assets; and
(ii) Risk-weighted assets for operational risk; minus
(2) Excess eligible credit reserves not included in tier 2 capital.
(1) All or a portion of the credit risk of one or more underlying exposures is transferred to one or more third parties other than through the use of credit derivatives or guarantees;
(2) The credit risk associated with the underlying exposures has been separated into at least two tranches reflecting different levels of seniority;
(3) Performance of the securitization exposures depends upon the performance of the underlying exposures;
(4) All or substantially all of the underlying exposures are financial exposures (such as loans, commitments, credit derivatives, guarantees, receivables, asset-backed securities, mortgage-backed securities, other debt securities, or equity securities);
(5) The underlying exposures are not owned by an operating company;
(6) The underlying exposures are not owned by a small business investment company described in section 302 of the Small Business Investment Act of 1958 (15 U.S.C. 682); and
(7) The underlying exposures are not owned by a firm an investment in which is designed primarily to promote community welfare, including the welfare of low- and moderate-income communities or families, such as by providing services or jobs.
(8) The OCC may determine that a transaction in which the underlying exposures are owned by an investment firm that exercises substantially unfettered control over the size and composition of its assets, liabilities, and off-balance sheet exposures is not a traditional securitization based on the transaction's leverage, risk profile, or economic substance.
(9) The OCC may deem a transaction that meets the definition of a traditional securitization, notwithstanding paragraph (5), (6), or (7) of this definition, to be a traditional securitization based on the transaction's leverage, risk profile, or economic substance.
(1) A non-tranched guarantee issued by a Federal savings association on behalf of a company;
(2) A repo-style transaction entered into by a Federal savings association with a company and any other transaction in which a savings association posts collateral to a company and faces counterparty credit risk;
(3) An exposure that a Federal savings association treats as a covered position under any applicable market risk rule for which there is a counterparty credit risk capital requirement;
(4) A sale of corporate loans by a Federal savings association to a third party in which the savings association retains full recourse;
(5) An OTC derivative contract entered into by a Federal savings association with a company;
(6) An exposure to an individual that is not managed by a Federal savings association as part of a segment of exposures with homogeneous risk characteristics; and
(7) A commercial lease.
(a) Except as modified by paragraph (c) of this section or by section 23 of this appendix, each Federal savings association must meet a minimum ratio of:
(1) Total qualifying capital to total risk-weighted assets of 8.0 percent; and
(2) Tier 1 capital to total risk-weighted assets of 4.0 percent.
(b) Each Federal savings association must hold capital commensurate with the level and nature of all risks to which the savings association is exposed.
(c) When a Federal savings association subject to any applicable market risk rule calculates its risk-based capital requirements under this appendix, the savings association must also refer to any applicable market risk rule for supplemental rules to calculate risk-based capital requirements adjusted for market risk.
(a)
(1) A Federal savings association is not required to deduct certain equity investments and CEIOs (as provided in section 12 of this appendix); and
(2) A Federal savings association also must make the deductions from capital required by paragraphs (b) and (c) of this section.
(b)
(c)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(a)
(b)
(a)
(2)
(b)
(a)
(2) A Federal savings association that elects to be subject to this appendix under paragraph (b)(2) of section 1 of this appendix must adopt a written implementation plan.
(b)
(i) Comprehensively address the qualification requirements in section 22 of this appendix for the savings association and each consolidated subsidiary (U.S. and foreign-based) of the savings association with respect to all portfolios and exposures of the savings association and each of its consolidated subsidiaries;
(ii) Justify and support any proposed temporary or permanent exclusion of business lines, portfolios, or exposures from application of the advanced approaches in this appendix (which business lines, portfolios, and exposures must be, in the aggregate, immaterial to the savings association);
(iii) Include the savings association's self-assessment of:
(A) The savings association's current status in meeting the qualification requirements in section 22 of this appendix; and
(B) The consistency of the savings association's current practices with the OCC's supervisory guidance on the qualification requirements;
(iv) Based on the savings association's self-assessment, identify and describe the areas in which the savings association proposes to undertake additional work to comply with the qualification requirements in section 22 of this appendix or to improve the consistency of the savings association's current practices with the OCC's supervisory guidance on the qualification requirements (gap analysis);
(v) Describe what specific actions the Federal savings association will take to address the areas identified in the gap analysis required by paragraph (b)(1)(iv) of this section;
(vi) Identify objective, measurable milestones, including delivery dates and a date when the savings association's implementation of the methodologies described in this appendix will be fully operational;
(vii) Describe resources that have been budgeted and are available to implement the plan; and
(viii) Receive approval of the savings association's board of directors.
(2) The savings association must submit the implementation plan, together with a copy of the minutes of the board of directors' approval, to the OCC at least 60 days before the savings association proposes to begin its parallel run, unless the OCC waives prior notice.
(c)
(d)
(1) The savings association fully complies with all the qualification requirements in section 22 of this appendix;
(2) The savings association has conducted a satisfactory parallel run under paragraph (c) of this section; and
(3) The savings association has an adequate process to ensure ongoing compliance with the qualification requirements in section 22 of this appendix.
(e)
(1)
(A) The savings association's floor-adjusted tier 1 risk-based capital ratio; or
(B) The savings association's advanced approaches tier 1 risk-based capital ratio.
(ii)
(A) The savings association's floor-adjusted total risk-based capital ratio; or
(B) The savings association's advanced approaches total risk-based capital ratio.
(2)
(A) The savings association's total risk-weighted assets as calculated under subpart B of part 167; and
(B) The appropriate transitional floor percentage in Table 1.
(ii) A Federal savings association's floor-adjusted total risk-based capital ratio during a transitional floor period is equal to the sum of the savings association's tier 1 and tier 2 capital as calculated under subpart B of part 167, divided by the product of:
(A) The savings association's total risk-weighted assets as calculated under subpart B of part 167; and
(B) The appropriate transitional floor percentage in Table 1.
(iii) A Federal savings association that meets the criteria in paragraph (b)(1) or (b)(2) of section 1 of this appendix as of April 1, 2008, must use subpart B of part 167 during the parallel run and as the basis for its transitional floors.
(3)
(ii) A Federal savings association's advanced approaches total risk-based capital ratio equals the savings association's total risk-based capital ratio as calculated under this appendix (other than this section on transitional floor periods).
(4)
(5)
(6)
(a)
(2) The systems and processes used by a Federal savings association for risk-based capital purposes under this appendix must be consistent with the savings association's internal risk management processes and management information reporting systems.
(3) Each Federal savings association must have an appropriate infrastructure with risk measurement and management processes that meet the qualification requirements of this section and are appropriate given the savings association's size and level of complexity. Regardless of whether the systems and models that generate the risk parameters necessary for calculating a Federal savings association's risk-based capital requirements are located at any affiliate of the savings association, the savings association itself must ensure that the risk parameters and reference data used to determine its risk-based capital requirements are representative of its own credit risk and operational risk exposures.
(b)
(2) For wholesale exposures:
(i) A Federal savings association must have an internal risk rating system that accurately and reliably assigns each obligor to a single rating grade (reflecting the obligor's likelihood of default). A Federal savings association may elect, however, not to assign to a rating grade an obligor to whom the savings association extends credit based solely on the financial strength of a guarantor, provided that all of the savings association's exposures to the obligor are fully covered by eligible guarantees, the savings association applies the PD substitution approach in paragraph (c)(1) of section 33 of this appendix to all exposures to that obligor, and the savings association immediately assigns the obligor to a rating grade if a guarantee can no longer be recognized under this appendix. The savings association's wholesale obligor rating system must have at least seven discrete rating grades for non-defaulted obligors and at least one rating grade for defaulted obligors.
(ii) Unless the savings association has chosen to directly assign LGD estimates to each wholesale exposure, the savings association must have an internal risk rating system that accurately and reliably assigns each wholesale exposure to a loss severity rating grade (reflecting the savings association's estimate of the LGD of the exposure). A Federal savings association employing loss severity rating grades must have a sufficiently granular loss severity grading system to avoid grouping together exposures with widely ranging LGDs.
(3) For retail exposures, a Federal savings association must have an internal system that groups retail exposures into the appropriate retail exposure subcategory, groups the retail exposures in each retail exposure subcategory into separate segments with homogeneous risk characteristics, and assigns accurate and reliable PD and LGD estimates for each segment on a consistent basis. The savings association's system must identify and group in separate segments by subcategories exposures identified in paragraphs (c)(2)(ii) and (iii) of section 31 of this appendix.
(4) The savings association's internal risk rating policy for wholesale exposures must describe the savings association's rating philosophy (that is, must describe how wholesale obligor rating assignments are affected by the savings association's choice of the range of economic, business, and industry conditions that are considered in the obligor rating process).
(5) The savings association's internal risk rating system for wholesale exposures must provide for the review and update (as appropriate) of each obligor rating and (if applicable) each loss severity rating whenever the savings association receives new material information, but no less frequently than annually. The savings association's retail exposure segmentation system must provide for the review and update (as appropriate) of assignments of retail exposures to segments whenever the savings association receives new material information, but generally no less frequently than quarterly.
(c)
(2) Data used to estimate the risk parameters must be relevant to the savings association's actual wholesale and retail exposures, and of sufficient quality to support the determination of risk-based capital requirements for the exposures.
(3) The savings association's risk parameter quantification process must produce appropriately conservative risk parameter estimates where the savings association has limited relevant data, and any adjustments that are part of the quantification process must not result in a pattern of bias toward lower risk parameter estimates.
(4) The savings association's risk parameter estimation process should not rely on the possibility of U.S. government financial assistance, except for the financial assistance that the U.S. government has a legally binding commitment to provide.
(5) Where the savings association's quantifications of LGD directly or indirectly incorporate estimates of the effectiveness of its credit risk management practices in reducing its exposure to troubled obligors prior to default, the savings association must support such estimates with empirical analysis showing that the estimates are consistent with its historical experience in dealing with such exposures during economic downturn conditions.
(6) PD estimates for wholesale obligors and retail segments must be based on at least five years of default data. LGD estimates for wholesale exposures must be based on at least seven years of loss severity data, and LGD estimates for retail segments must be based on at least five years of loss severity data. EAD estimates for wholesale exposures must be based on at least seven years of exposure amount data, and EAD estimates for retail segments must be based on at least five years of exposure amount data.
(7) Default, loss severity, and exposure amount data must include periods of economic downturn conditions, or the savings association must adjust its estimates
(8) The savings association's PD, LGD, and EAD estimates must be based on the definition of default in this appendix.
(9) The savings association must review and update (as appropriate) its risk parameters and its risk parameter quantification process at least annually.
(10) The savings association must at least annually conduct a comprehensive review and analysis of reference data to determine relevance of reference data to the savings association's exposures, quality of reference data to support PD, LGD, and EAD estimates, and consistency of reference data to the definition of default contained in this appendix.
(d)
(e)
(f)
(g)
(h)
(i) Have an operational risk management function that:
(A) Is independent of business line management; and
(B) Is responsible for designing, implementing, and overseeing the savings association's operational risk data and assessment systems, operational risk quantification systems, and related processes;
(ii) Have and document a process (which must capture business environment and internal control factors affecting the savings association's operational risk profile) to identify, measure, monitor, and control operational risk in savings association products, activities, processes, and systems; and
(iii) Report operational risk exposures, operational loss events, and other relevant operational risk information to business unit management, senior management, and the board of directors (or a designated committee of the board).
(2)
(i) Be structured in a manner consistent with the savings association's current business activities, risk profile, technological processes, and risk management processes; and
(ii) Include credible, transparent, systematic, and verifiable processes that incorporate the following elements on an ongoing basis:
(A)
(
(
(
(B)
(C)
(D)
(3)
(A) Must generate estimates of the savings association's operational risk exposure using its operational risk data and assessment systems;
(B) Must employ a unit of measure that is appropriate for the savings association's range of business activities and the variety of operational loss events to which it is exposed, and that does not combine business activities or operational loss events with demonstrably different risk profiles within the same loss distribution;
(C) Must include a credible, transparent, systematic, and verifiable approach for weighting each of the four elements, described in paragraph (h)(2)(ii) of this section, that a savings association is required to incorporate into its operational risk data and assessment systems;
(D) May use internal estimates of dependence among operational losses across and within units of measure if the savings association can demonstrate to the satisfaction of the OCC that its process for estimating dependence is sound, robust to a variety of scenarios, and implemented with integrity, and allows for the uncertainty surrounding the estimates. If the savings association has not made such a demonstration, it must sum operational risk exposure estimates across units of measure to calculate its total operational risk exposure; and
(E) Must be reviewed and updated (as appropriate) whenever the savings association becomes aware of information that may have a material effect on the savings association's estimate of operational risk exposure, but the review and update must occur no less frequently than annually.
(ii) With the prior written approval of the OCC, a Federal savings association may generate an estimate of its operational risk exposure using an alternative approach to that specified in paragraph (h)(3)(i) of this section. A savings association proposing to use such an alternative operational risk quantification system must submit a proposal to the OCC. In determining whether to approve a savings association's proposal to use an alternative operational risk quantification system, the OCC will consider the following principles:
(A) Use of the alternative operational risk quantification system will be allowed only on an exception basis, considering the size, complexity, and risk profile of the savings association;
(B) The savings association must demonstrate that its estimate of its operational risk exposure generated under the alternative operational risk quantification system is appropriate and can be supported empirically; and
(C) A savings association must not use an allocation of operational risk capital requirements that includes entities other than depository institutions or the benefits of diversification across entities.
(i)
(2) A Federal savings association must retain data using an electronic format that allows timely retrieval of data for analysis, validation, reporting, and disclosure purposes.
(3) A Federal savings association must retain sufficient data elements related to key risk drivers to permit adequate monitoring, validation, and refinement of its advanced systems.
(j)
(2) The savings association's board of directors (or a designated committee of the board) must at least annually review the effectiveness of, and approve, the savings association's advanced systems.
(3) A savings association must have an effective system of controls and oversight that:
(i) Ensures ongoing compliance with the qualification requirements in this section;
(ii) Maintains the integrity, reliability, and accuracy of the savings association's advanced systems; and
(iii) Includes adequate governance and project management processes.
(4) The Federal savings association must validate, on an ongoing basis, its advanced systems. The savings association's validation process must be independent of the advanced systems' development, implementation, and operation, or the validation process must be subjected to an independent review of its adequacy and effectiveness. Validation must include:
(i) An evaluation of the conceptual soundness of (including developmental evidence supporting) the advanced systems;
(ii) An ongoing monitoring process that includes verification of processes and benchmarking; and
(iii) An outcomes analysis process that includes back-testing.
(5) The Federal savings association must have an internal audit function independent of business-line management that at least annually assesses the effectiveness of the controls supporting the savings association's advanced systems and reports its findings to the savings association's board of directors (or a committee thereof).
(6) The Federal savings association must periodically stress test its advanced systems. The stress testing must include a consideration of how economic cycles, especially downturns, affect risk-based capital requirements (including migration across rating grades and segments and the credit risk mitigation benefits of double default treatment).
(k)
(a)
(b)
(2) The Federal savings association must establish and submit a plan satisfactory to the OCC to return to compliance with the qualification requirements.
(3) In addition, if the OCC determines that the savings association's risk-based capital requirements are not commensurate with the savings association's credit, market, operational, or other risks, the OCC may require such a savings association to calculate its risk-based capital requirements:
(i) Under subpart B of part 167; or
(ii) Under this appendix with any modifications provided by the OCC.
(a)
(b)
(2) If the acquiring Federal savings association is not subject to the advanced approaches in this appendix at the time of acquisition or merger, during the period when subpart B of part 167 apply to the acquiring savings association, the ALLL associated with the exposures of the merged or acquired company may not be directly included in tier 2 capital. Rather, any excess eligible credit reserves associated with the merged or acquired company's exposures may be included in the savings association's tier 2 capital up to 0.6 percent of the credit-risk-weighted assets associated with those exposures.
(a)
(1) Phase 1—categorization of exposures;
(2) Phase 2—assignment of wholesale obligors and exposures to rating grades and segmentation of retail exposures;
(3) Phase 3—assignment of risk parameters to wholesale exposures and segments of retail exposures; and
(4) Phase 4—calculation of risk-weighted asset amounts.
(b)
(c)
(i) The savings association must assign each obligor of a wholesale exposure to a single obligor rating grade and must assign each wholesale exposure to which it does not directly assign an LGD estimate to a loss severity rating grade.
(ii) The savings association must identify which of its wholesale obligors are in default.
(2)
(ii) The savings association must identify which of its retail exposures are in default. The savings association must segment defaulted retail exposures separately from non-defaulted retail exposures.
(iii) If the savings association determines the EAD for eligible margin loans using the approach in paragraph (b) of section 32 of this appendix, the savings association must identify which of its retail exposures are eligible margin loans for which the savings association uses this EAD approach and must segment such eligible margin loans separately from other retail exposures.
(3)
(d)
(i) Associate a PD with each wholesale obligor rating grade;
(ii) Associate an LGD with each wholesale loss severity rating grade or assign an LGD to each wholesale exposure;
(iii) Assign an EAD and M to each wholesale exposure; and
(iv) Assign a PD, LGD, and EAD to each segment of retail exposures.
(2)
(3)
(4)
(5)
(ii) A Federal savings association may take into account the risk reducing effects of guarantees and credit derivatives in support of retail exposures in a segment when quantifying the PD and LGD of the segment.
(iii) Except as provided in paragraph (d)(6) of this section, a Federal savings association may take into account the risk reducing effects of collateral in support of a wholesale exposure when quantifying the LGD of the exposure and may take into account the risk reducing effects of collateral in support of retail exposures when quantifying the PD and LGD of the segment.
(6)
(ii) A Federal savings association may attribute an EAD of zero to:
(A) Derivative contracts that are publicly traded on an exchange that requires the daily receipt and payment of cash-variation margin;
(B) Derivative contracts and repo-style transactions that are outstanding with a qualifying central counterparty (but not for those transactions that a qualifying central counterparty has rejected); and
(C) Credit risk exposures to a qualifying central counterparty in the form of clearing deposits and posted collateral that arise from transactions described in paragraph (d)(6)(ii)(B) of this section.
(7)
(i) Has a legal and practical ability not to renew or roll over the exposure in the event of credit deterioration of the obligor;
(ii) Makes an independent credit decision at the inception of the exposure and at every renewal or roll over; and
(iii) Has no substantial commercial incentive to continue its credit relationship with the obligor in the event of credit deterioration of the obligor.
(e)
(ii) The sum of all the dollar risk-based capital requirements for each wholesale exposure to a non-defaulted obligor and segment of non-defaulted retail exposures calculated in paragraph (e)(1)(i) of this section and in paragraph (e) of section 34 of this appendix equals the total dollar risk-based capital requirement for those exposures and segments.
(iii) The aggregate risk-weighted asset amount for wholesale exposures to non-defaulted obligors and segments of non-defaulted retail exposures equals the total dollar risk-based capital requirement calculated in paragraph (e)(1)(ii) of this section multiplied by 12.5.
(2)
(ii) The dollar risk-based capital requirement for a segment of defaulted retail exposures equals 0.08 multiplied by the EAD of the segment.
(iii) The sum of all the dollar risk-based capital requirements for each wholesale exposure to a defaulted obligor calculated in paragraph (e)(2)(i) of this section plus the dollar risk-based capital requirements for each segment of defaulted retail exposures calculated in paragraph (e)(2)(ii) of this section equals the total dollar risk-based capital requirement for those exposures and segments.
(iv) The aggregate risk-weighted asset amount for wholesale exposures to defaulted obligors and segments of defaulted retail exposures equals the total dollar risk-based capital requirement calculated in paragraph (e)(2)(iii) of this section multiplied by 12.5.
(3)
(ii) The risk-weighted asset amount for the residual value of a retail lease exposure equals such residual value.
(iii) The risk-weighted asset amount for any other on-balance-sheet asset that does not meet the definition of a wholesale, retail, securitization, or equity exposure equals the carrying value of the asset.
(4)
(a)
(2) This section also describes the methodology for calculating EAD for an OTC derivative contract or a set of OTC derivative contracts subject to a qualifying master netting agreement. A Federal savings association also may use the internal models methodology to estimate EAD for qualifying cross-product master netting agreements.
(3) A Federal savings association may only use the standard supervisory haircut approach with a minimum 10-business-day holding period to recognize in EAD the benefits of conforming residential mortgage collateral that secures repo-style transactions (other than repo-style transactions included in the savings association's VaR-based measure under any applicable market risk rule), eligible margin loans, and OTC derivative contracts.
(4) A Federal savings association may use any combination of the three methodologies for collateral recognition; however, it must use the same methodology for similar exposures.
(b)
(i) The collateral haircut approach described in paragraph (b)(2) of this section;
(ii) For netting sets only, the simple VaR methodology described in paragraph (b)(3) of this section; or
(iii) The internal models methodology described in paragraph (d) of this section.
(2)
(A) ΣE equals the value of the exposure (the sum of the current market values of all instruments, gold, and cash the Federal savings association has lent, sold subject to repurchase, or posted as collateral to the counterparty under the transaction (or netting set));
(B) ΣC equals the value of the collateral (the sum of the current market values of all instruments, gold, and cash the Federal savings association has borrowed, purchased subject to resale, or taken as collateral from the counterparty under the transaction (or netting set));
(C) Es equals the absolute value of the net position in a given instrument or in gold (where the net position in a given instrument or in gold equals the sum of the current market values of the instrument or gold the Federal savings association has lent, sold subject to repurchase, or posted as collateral to the counterparty minus the sum of the current market values of that same instrument or gold the savings association has borrowed, purchased subject to resale, or taken as collateral from the counterparty);
(D) Hs equals the market price volatility haircut appropriate to the instrument or gold referenced in Es;
(E) Efx equals the absolute value of the net position of instruments and cash in a currency that is different from the settlement currency (where the net position in a given currency equals the sum of the current market values of any instruments or cash in the currency the Federal savings association has lent, sold subject to repurchase, or posted as collateral to the counterparty minus the sum of the current market values of any instruments or cash in the currency the savings association has borrowed, purchased subject to resale, or taken as collateral from the counterparty); and
(F) Hfx equals the haircut appropriate to the mismatch between the currency referenced in Efx and the settlement currency.
(ii)
(
(
(
(
(iii)
(A) To receive the OCC's approval to use its own internal estimates, a Federal savings association must satisfy the following minimum quantitative standards:
(
(
(
(
(
(B) With respect to debt securities that have an applicable external rating of investment grade, a Federal savings association may calculate haircuts for categories of securities. For a category of securities, the savings association must calculate the haircut on the basis of internal volatility estimates for securities in that category that are representative of the securities in that category that the savings association has lent, sold subject to repurchase, posted as collateral, borrowed, purchased subject to resale, or taken as collateral. In determining relevant categories, the savings association must at a minimum take into account:
(
(
(
(
(C) With respect to debt securities that have an applicable external rating of below investment grade and equity securities, a Federal savings association must calculate a separate haircut for each individual security.
(D) Where an exposure or collateral (whether in the form of cash or securities) is denominated in a currency that differs from the settlement currency, the Federal savings association must calculate a separate currency mismatch haircut for its net position in each mismatched currency based on estimated volatilities of foreign exchange rates between the mismatched currency and the settlement currency.
(E) A Federal savings association's own estimates of market price and foreign exchange rate volatilities may not take into account the correlations among securities and foreign exchange rates on either the exposure or collateral side of a transaction (or netting set) or the correlations among securities and foreign exchange rates between the exposure and collateral sides of the transaction (or netting set).
(3)
(i) ΣE equals the value of the exposure (the sum of the current market values of all instruments, gold, and cash the savings association has lent, sold subject to repurchase, or posted as collateral to the counterparty under the netting set);
(ii) ΣC equals the value of the collateral (the sum of the current market values of all instruments, gold, and cash the savings association has borrowed, purchased subject to resale, or taken as collateral from the counterparty under the netting set); and
(iii) PFE (potential future exposure) equals the savings association's empirically based best estimate of the 99th percentile, one-tailed confidence interval for an increase in the value of (ΣE − ΣC) over a five-business-day holding period for repo-style transactions or over a ten-business-day holding period for eligible margin loans using a minimum one-year historical observation period of price data representing the instruments that the savings association has lent, sold subject to repurchase, posted as collateral, borrowed, purchased subject to resale, or taken as collateral. The savings association must validate its VaR model, including by establishing and maintaining a rigorous and regular back-testing regime.
(c)
(2) A Federal savings association must determine the EAD for multiple OTC derivative contracts that are subject to a qualifying master netting agreement using the current exposure methodology in paragraph (c)(6) of this section or using the internal models methodology described in paragraph (d) of this section.
(3)
(i) A Federal savings association that purchases a credit derivative that is recognized under section 33 or 34 of this appendix as a credit risk mitigant for an exposure that is not a covered position under any applicable market risk rule need not compute a separate counterparty credit risk capital requirement under this section so long as the savings association does so consistently for all such credit derivatives and either includes all or excludes all such credit derivatives that are subject to a master netting agreement from any measure used to determine counterparty credit risk exposure to all relevant counterparties for risk-based capital purposes.
(ii) A Federal savings association that is the protection provider in a credit derivative must treat the credit derivative as a wholesale exposure to the reference obligor and need not compute a counterparty credit risk capital requirement for the credit derivative under this section, so long as it does so consistently for all such credit derivatives and either includes all or excludes all such credit derivatives that are subject to a master netting agreement from any measure used to determine counterparty credit risk exposure to all relevant counterparties for risk-based capital purposes (unless the savings association is treating the credit derivative as a covered position under any applicable market risk rule, in which case the savings association must compute a supplemental counterparty credit risk capital requirement under this section).
(4)
(5)
(i)
(ii)
(6)
(i)
(A) The net sum of all positive and negative mark-to-market values of the individual OTC derivative contracts subject to the qualifying master netting agreement; or
(B) Zero.
(ii)
(A) Agross = the gross PFE (that is, the sum of the PFE amounts (as determined under paragraph (c)(5)(ii) of this section) for each individual OTC derivative contract subject to the qualifying master netting agreement); and
(B) NGR = the net to gross ratio (that is, the ratio of the net current credit exposure to the gross current credit exposure). In calculating the NGR, the gross current credit exposure equals the sum of the positive current credit exposures (as determined under paragraph (c)(5)(i) of this section) of all individual OTC derivative contracts subject to the qualifying master netting agreement.
(7)
(d)
(i) The savings association effectively integrates the risk mitigating effects of cross-product netting into its risk management and other information technology systems; and
(ii) The savings association obtains the prior written approval of the OCC. A savings association that uses the internal models methodology for a transaction type must receive approval from the OCC to cease using the methodology for that transaction type or to make a material change to its internal model.
(2) Under the internal models methodology, a Federal savings association uses an internal model to estimate the expected exposure (EE) for a netting set and then calculates EAD based on that EE.
(i) The savings association must use its internal model's probability distribution for changes in the market value of a netting set that are attributable to changes in market variables to determine EE.
(ii) Under the internal models methodology, EAD = α x effective EPE, or, subject to the OCC's approval as provided in paragraph (d)(7), a more conservative measure of EAD.
(
(
(B) α = 1.4 except as provided in paragraph (d)(6), or when the OCC has determined that the Federal savings association must set α higher based on the savings association's specific characteristics of counterparty credit risk.
(iii) A Federal savings association may include financial collateral currently posted by the counterparty as collateral (but may not include other forms of collateral) when calculating EE.
(iv) If a Federal savings association hedges some or all of the counterparty credit risk associated with a netting set using an eligible credit derivative, the savings association may take the reduction in exposure to the counterparty into account when estimating EE. If the savings association recognizes this reduction in exposure to the counterparty in its estimate of EE, it must also use its internal model to estimate a separate EAD for the savings association's exposure to the protection provider of the credit derivative.
(3) To obtain the OCC's approval to calculate the distributions of exposures upon which the EAD calculation is based, the Federal savings association must demonstrate to the satisfaction of the OCC that it has been using for at least one year an internal model that broadly meets the following minimum standards, with which the savings association must maintain compliance:
(i) The model must have the systems capability to estimate the expected exposure to the counterparty on a daily basis (but is
(ii) The model must estimate expected exposure at enough future dates to reflect accurately all the future cash flows of contracts in the netting set.
(iii) The model must account for the possible non-normality of the exposure distribution, where appropriate.
(iv) The savings association must measure, monitor, and control current counterparty exposure and the exposure to the counterparty over the whole life of all contracts in the netting set.
(v) The savings association must be able to measure and manage current exposures gross and net of collateral held, where appropriate. The savings association must estimate expected exposures for OTC derivative contracts both with and without the effect of collateral agreements.
(vi) The savings association must have procedures to identify, monitor, and control specific wrong-way risk throughout the life of an exposure. Wrong-way risk in this context is the risk that future exposure to a counterparty will be high when the counterparty's probability of default is also high.
(vii) The model must use current market data to compute current exposures. When estimating model parameters based on historical data, at least three years of historical data that cover a wide range of economic conditions must be used and must be updated quarterly or more frequently if market conditions warrant. The savings association should consider using model parameters based on forward-looking measures, where appropriate.
(viii) A savings association must subject its internal model to an initial validation and annual model review process. The model review should consider whether the inputs and risk factors, as well as the model outputs, are appropriate.
(4)
(ii) If the remaining maturity of the exposure or the longest-dated contract in the netting set is one year or less, the savings association must set M for the exposure or netting set equal to one year, except as provided in paragraph (d)(7) of section 31 of this appendix.
(5)
(i) With prior written approval from the OCC, a savings association may include the effect of a collateral agreement within its internal model used to calculate EAD. The savings association may set EAD equal to the expected exposure at the end of the margin period of risk. The margin period of risk means, with respect to a netting set subject to a collateral agreement, the time period from the most recent exchange of collateral with a counterparty until the next required exchange of collateral plus the period of time required to sell and realize the proceeds of the least liquid collateral that can be delivered under the terms of the collateral agreement and, where applicable, the period of time required to re-hedge the resulting market risk, upon the default of the counterparty. The minimum margin period of risk is five business days for repo-style transactions and ten business days for other transactions when liquid financial collateral is posted under a daily margin maintenance requirement. This period should be extended to cover any additional time between margin calls; any potential closeout difficulties; any delays in selling collateral, particularly if the collateral is illiquid; and any impediments to prompt re-hedging of any market risk.
(ii) A savings association that can model EPE without collateral agreements but cannot achieve the higher level of modeling sophistication to model EPE with collateral agreements can set effective EPE for a collateralized netting set equal to the lesser of:
(A) The threshold, defined as the exposure amount at which the counterparty is required to post collateral under the collateral agreement, if the threshold is positive, plus an add-on that reflects the potential increase in exposure of the netting set over the margin period of risk. The add-on is computed as the expected increase in the netting set's exposure beginning from current exposure of zero over the margin period of risk. The margin period of risk must be at least five business days for netting sets consisting only of repo-style transactions subject to daily re-margining and daily marking-to-market, and ten business days for all other netting sets; or
(B) Effective EPE without a collateral agreement.
(6)
(i) The savings association's own estimate of alpha must capture in the numerator the effects of:
(A) The material sources of stochastic dependency of distributions of market values of transactions or portfolios of transactions across counterparties;
(B) Volatilities and correlations of market risk factors used in the joint simulation, which must be related to the credit risk factor used in the simulation to reflect potential increases in volatility or correlation in an economic downturn, where appropriate; and
(C) The granularity of exposures (that is, the effect of a concentration in the proportion of each counterparty's exposure that is driven by a particular risk factor).
(ii) The savings association must assess the potential model uncertainty in its estimates of alpha.
(iii) The savings association must calculate the numerator and denominator of alpha in a consistent fashion with respect to modeling methodology, parameter specifications, and portfolio composition.
(iv) The savings association must review and adjust as appropriate its estimates of the numerator and denominator of alpha on at least a quarterly basis and more frequently when the composition of the portfolio varies over time.
(7)
(a)
(i) Credit risk is fully covered by an eligible guarantee or eligible credit derivative; or
(ii) Credit risk is covered on a pro rata basis (that is, on a basis in which the Federal savings association and the protection provider share losses proportionately) by an eligible guarantee or eligible credit derivative.
(2) Wholesale exposures on which there is a tranching of credit risk (reflecting at least two different levels of seniority) are securitization exposures subject to the securitization framework in part V.
(3) A Federal savings association may elect to recognize the credit risk mitigation benefits of an eligible guarantee or eligible credit derivative covering an exposure described in paragraph (a)(1) of this section by using the PD substitution approach or the LGD adjustment approach in paragraph (c) of this section or, if the transaction qualifies, using the double default treatment in section 34 of this appendix. A savings association's PD and LGD for the hedged exposure may not be lower than the PD and LGD floors described in paragraphs (d)(2) and (d)(3) of section 31 of this appendix.
(4) If multiple eligible guarantees or eligible credit derivatives cover a single exposure described in paragraph (a)(1) of this section, a Federal savings association may treat the hedged exposure as multiple separate exposures each covered by a single eligible guarantee or eligible credit derivative and may calculate a separate risk-based capital requirement for each separate exposure as described in paragraph (a)(3) of this section.
(5) If a single eligible guarantee or eligible credit derivative covers multiple hedged wholesale exposures described in paragraph (a)(1) of this section, a Federal savings association must treat each hedged exposure as covered by a separate eligible guarantee or eligible credit derivative and must calculate a separate risk-based capital requirement for each exposure as described in paragraph (a)(3) of this section.
(6) A Federal savings association must use the same risk parameters for calculating ECL as it uses for calculating the risk-based capital requirement for the exposure.
(b)
(2) A Federal savings association may only recognize the credit risk mitigation benefits of an eligible credit derivative to hedge an exposure that is different from the credit derivative's reference exposure used for determining the derivative's cash settlement value, deliverable obligation, or occurrence of a credit event if:
(i) The reference exposure ranks pari passu (that is, equally) with or is junior to the hedged exposure; and
(ii) The reference exposure and the hedged exposure are exposures to the same legal entity, and legally enforceable cross-default or cross-acceleration clauses are in place to assure payments under the credit derivative are triggered when the obligor fails to pay under the terms of the hedged exposure.
(c)
(ii)
(A) The savings association must calculate its risk-based capital requirement for the protected exposure under section 31 of this appendix, where PD is the protection provider's PD, LGD is determined under paragraph (c)(1)(iii) of this section, and EAD is P. If the savings association determines that full substitution leads to an inappropriate degree of risk mitigation, the savings association may use a higher PD than that of the protection provider.
(B) The savings association must calculate its risk-based capital requirement for the unprotected exposure under section 31 of this appendix, where PD is the obligor's PD, LGD is the hedged exposure's LGD (not adjusted to reflect the guarantee or credit derivative), and EAD is the EAD of the original hedged exposure minus P.
(C) The treatment in this paragraph (c)(1)(ii) is applicable when the credit risk of a wholesale exposure is covered on a partial pro rata basis or when an adjustment is made to the effective notional amount of the guarantee or credit derivative under paragraph (d), (e), or (f) of this section.
(iii)
(A) The lower of the LGD of the hedged exposure (not adjusted to reflect the guarantee or credit derivative) and the LGD of the guarantee or credit derivative, if the guarantee or credit derivative provides the Federal savings association with the option to receive immediate payout upon triggering the protection; or
(B) The LGD of the guarantee or credit derivative, if the guarantee or credit derivative does not provide the Federal savings association with the option to receive immediate payout upon triggering the protection.
(2)
(A) The risk-based capital requirement for the exposure as calculated under section 31 of this appendix, with the LGD of the exposure adjusted to reflect the guarantee or credit derivative; or
(B) The risk-based capital requirement for a direct exposure to the protection provider as calculated under section 31 of this appendix, using the PD for the protection provider, the LGD for the guarantee or credit derivative, and an EAD equal to the EAD of the hedged exposure.
(ii)
(A) The savings association's risk-based capital requirement for the protected exposure would be the greater of:
(
(
(B) The savings association must calculate its risk-based capital requirement for the unprotected exposure under section 31 of this appendix, where PD is the obligor's PD, LGD is the hedged exposure's LGD (not adjusted to reflect the guarantee or credit derivative), and EAD is the EAD of the original hedged exposure minus P.
(3)
(d)
(2) A maturity mismatch occurs when the residual maturity of a credit risk mitigant is less than that of the hedged exposure(s).
(3) The residual maturity of a hedged exposure is the longest possible remaining time before the obligor is scheduled to fulfill its obligation on the exposure. If a credit risk mitigant has embedded options that may reduce its term, the savings association (protection purchaser) must use the shortest possible residual maturity for the credit risk mitigant. If a call is at the discretion of the protection provider, the residual maturity of the credit risk mitigant is at the first call date. If the call is at the discretion of the savings association (protection purchaser), but the terms of the arrangement at origination of the credit risk mitigant contain a positive incentive for the savings association to call the transaction before contractual maturity, the remaining time to the first call date is the residual maturity of the credit risk mitigant. For example, where there is a step-up in cost in conjunction with a call feature or where the effective cost of protection increases over time even if credit quality remains the same or improves, the residual maturity of the credit risk mitigant will be the remaining time to the first call.
(4) A credit risk mitigant with a maturity mismatch may be recognized only if its original maturity is greater than or equal to one year and its residual maturity is greater than three months.
(5) When a maturity mismatch exists, the savings association must apply the following adjustment to the effective notional amount of the credit risk mitigant: Pm = E × (t − 0.25)/(T − 0.25), where:
(i) Pm = effective notional amount of the credit risk mitigant, adjusted for maturity mismatch;
(ii) E = effective notional amount of the credit risk mitigant;
(iii) t = the lesser of T or the residual maturity of the credit risk mitigant, expressed in years; and
(iv) T = the lesser of five or the residual maturity of the hedged exposure, expressed in years.
(e)
(1) Pr = effective notional amount of the credit risk mitigant, adjusted for lack of restructuring event (and maturity mismatch, if applicable); and
(2) Pm = effective notional amount of the credit risk mitigant adjusted for maturity mismatch (if applicable).
(f)
(i) Pc = effective notional amount of the credit risk mitigant, adjusted for currency mismatch (and maturity mismatch and lack of restructuring event, if applicable);
(ii) Pr = effective notional amount of the credit risk mitigant (adjusted for maturity mismatch and lack of restructuring event, if applicable); and
(iii) H
(2) A Federal savings association must set H
(i) The own-estimates haircuts in paragraph (b)(2)(iii) of section 32 of this appendix;
(ii) The simple VaR methodology in paragraph (b)(3) of section 32 of this appendix; or
(iii) The internal models methodology in paragraph (d) of section 32 of this appendix.
(3) A Federal savings association must adjust H
(a)
(1) The hedged exposure is fully covered or covered on a pro rata basis by:
(i) An eligible guarantee issued by an eligible double default guarantor; or
(ii) An eligible credit derivative that meets the requirements of paragraph (b)(2) of section 33 of this appendix and is issued by an eligible double default guarantor.
(2) The guarantee or credit derivative is:
(i) An uncollateralized guarantee or uncollateralized credit derivative (for example, a credit default swap) that provides protection with respect to a single reference obligor; or
(ii) An nth-to-default credit derivative (subject to the requirements of paragraph (m) of section 42 of this appendix).
(3) The hedged exposure is a wholesale exposure (other than a sovereign exposure).
(4) The obligor of the hedged exposure is not:
(i) An eligible double default guarantor or an affiliate of an eligible double default guarantor; or
(ii) An affiliate of the guarantor.
(5) The Federal savings association does not recognize any credit risk mitigation benefits of the guarantee or credit derivative for the hedged exposure other than through application of the double default treatment as provided in this section.
(6) The Federal savings association has implemented a process (which has received the prior, written approval of the OCC) to detect excessive correlation between the creditworthiness of the obligor of the hedged exposure and the protection provider. If excessive correlation is present, the savings association may not use the double default treatment for the hedged exposure.
(b)
(c)
(1) For the protected exposure, the savings association must set EAD equal to P and calculate its risk-weighted asset amount as provided in paragraph (e) of this section.
(2) For the unprotected exposure, the savings association must set EAD equal to the EAD of the original exposure minus P and then calculate its risk-weighted asset amount as provided in section 31 of this appendix.
(d)
(e)
Where:
(1)
(2) PD
(3) PD
(4) LGD
(ii) The LGD of the guarantee or credit derivative, if the guarantee or credit derivative does not provide the savings association with the option to receive immediate payout on triggering the protection.
(5) ρ
(6) b (maturity adjustment coefficient) is calculated according to the formula for b provided in Table 2 in section 31 of this appendix, with PD equal to the lesser of PD
(7) M (maturity) is the effective maturity of the guarantee or credit derivative, which may not be less than one year or greater than five years.
(a)
(1)
(2)
(3)
(4)
(b)
(1) Transactions accepted by a qualifying central counterparty that are subject to daily marking-to-market and daily receipt and payment of variation margin;
(2) Repo-style transactions, including unsettled repo-style transactions (which are addressed in sections 31 and 32 of this appendix);
(3) One-way cash payments on OTC derivative contracts (which are addressed in sections 31 and 32 of this appendix); or
(4) Transactions with a contractual settlement period that is longer than the normal settlement period (which are treated as OTC derivative contracts and addressed in sections 31 and 32 of this appendix).
(c)
(d)
(e)
(2) From the business day after the savings association has made its delivery until five business days after the counterparty delivery is due, the savings association must calculate its risk-based capital requirement for the transaction by treating the current market value of the deliverables owed to the savings association as a wholesale exposure.
(i) A savings association may assign an obligor rating to a counterparty for which it is not otherwise required under this appendix to assign an obligor rating on the basis of the applicable external rating of any outstanding unsecured long-term debt security without credit enhancement issued by the counterparty.
(ii) A savings association may use a 45 percent LGD for the transaction rather than estimating LGD for the transaction provided the savings association uses the 45 percent LGD for all transactions described in paragraphs (e)(1) and (e)(2) of this section.
(iii) A savings association may use a 100 percent risk weight for the transaction provided the savings association uses this risk weight for all transactions described in paragraphs (e)(1) and (e)(2) of this section.
(3) If the savings association has not received its deliverables by the fifth business day after the counterparty delivery was due, the savings association must deduct the current market value of the deliverables owed to the savings association 50 percent from tier 1 capital and 50 percent from tier 2 capital.
(f)
(a)
(1) The transfer is considered a sale under GAAP;
(2) The savings association has transferred to third parties credit risk associated with the underlying exposures; and
(3) Any clean-up calls relating to the securitization are eligible clean-up calls.
(b)
(1) The credit risk mitigant is financial collateral, an eligible credit derivative from an eligible securitization guarantor or an eligible guarantee from an eligible securitization guarantor;
(2) The savings association transfers credit risk associated with the underlying exposures to third parties, and the terms and conditions in the credit risk mitigants employed do not include provisions that:
(i) Allow for the termination of the credit protection due to deterioration in the credit quality of the underlying exposures;
(ii) Require the savings association to alter or replace the underlying exposures to improve the credit quality of the pool of underlying exposures;
(iii) Increase the savings association's cost of credit protection in response to deterioration in the credit quality of the underlying exposures;
(iv) Increase the yield payable to parties other than the savings association in response to a deterioration in the credit quality of the underlying exposures; or
(v) Provide for increases in a retained first loss position or credit enhancement provided by the savings association after the inception of the securitization;
(3) The savings association obtains a well-reasoned opinion from legal counsel that confirms the enforceability of the credit risk mitigant in all relevant jurisdictions; and
(4) Any clean-up calls relating to the securitization are eligible clean-up calls.
(a)
(1) A Federal savings association must deduct from tier 1 capital any after-tax gain-on-sale resulting from a securitization and must deduct from total capital in accordance with paragraph (c) of this section the portion of any CEIO that does not constitute gain-on-sale.
(2) If a securitization exposure does not require deduction under paragraph (a)(1) of this section and qualifies for the Ratings-Based Approach in section 43 of this appendix, a Federal savings association must apply the Ratings-Based Approach to the exposure.
(3) If a securitization exposure does not require deduction under paragraph (a)(1) of this section and does not qualify for the Ratings-Based Approach, the Federal savings association may either apply the Internal Assessment Approach in section 44 of this appendix to the exposure (if the savings association, the exposure, and the relevant ABCP program qualify for the Internal Assessment Approach) or the Supervisory Formula Approach in section 45 of this appendix to the exposure (if the savings association and the exposure qualify for the Supervisory Formula Approach).
(4) If a securitization exposure does not require deduction under paragraph (a)(1) of this section and does not qualify for the Ratings-Based Approach, the Internal Assessment Approach, or the Supervisory Formula Approach, the Federal savings association must deduct the exposure from total capital in accordance with paragraph (c) of this section.
(5) If a securitization exposure is an OTC derivative contract (other than a credit derivative) that has a first priority claim on the cash flows from the underlying exposures (notwithstanding amounts due under interest rate or currency derivative contracts, fees due, or other similar payments), with approval of the OCC, a Federal savings association may choose to set the risk-weighted asset amount of the exposure equal to the amount of the exposure as determined in paragraph (e) of this section rather than apply the hierarchy of approaches described in paragraphs (a) (1) through (4) of this section.
(b)
(c)
(2) A Federal savings association may calculate any deduction from tier 1 capital and tier 2 capital for a securitization exposure net of any deferred tax liabilities associated with the securitization exposure.
(d)
(1) The savings association's total risk-based capital requirement for the underlying exposures as if the savings association directly held the underlying exposures; and
(2) The total ECL of the underlying exposures.
(e)
(i) The Federal savings association's carrying value minus any unrealized gains and plus any unrealized losses on the exposure, if the exposure is a security classified as available-for-sale; or
(ii) The Federal savings association's carrying value, if the exposure is not a security classified as available-for-sale.
(2) The amount of an off-balance sheet securitization exposure that is not an OTC derivative contract (other than a credit derivative) is the notional amount of the exposure. For an off-balance-sheet securitization exposure to an ABCP program, such as a liquidity facility, the notional amount may be reduced to the maximum potential amount that the Federal savings association could be required to fund given the ABCP program's current underlying assets (calculated without regard to the current credit quality of those assets).
(3) The amount of a securitization exposure that is a repo-style transaction, eligible margin loan, or OTC derivative contract (other than a credit derivative) is the EAD of the exposure as calculated in section 32 of this appendix.
(f)
(g)
(1) If the Federal savings association is an originating savings association, deduct from tier 1 capital any after-tax gain-on-sale resulting from the securitization and deduct
(2) If the securitization exposure does not require deduction under paragraph (g)(1), apply the RBA in section 43 of this appendix to the securitization exposure if the exposure qualifies for the RBA;
(3) If the securitization exposure does not require deduction under paragraph (g)(1) and does not qualify for the RBA, apply the IAA in section 44 of this appendix to the exposure (if the Federal savings association, the exposure, and the relevant ABCP program qualify for the IAA); and
(4) If the securitization exposure does not require deduction under paragraph (g)(1) and does not qualify for the RBA or the IAA, deduct the exposure from total capital in accordance with paragraph (c) of this section.
(h)
(1) The savings association must hold regulatory capital against all of the underlying exposures associated with the securitization as if the exposures had not been securitized and must deduct from tier 1 capital any after-tax gain-on-sale resulting from the securitization; and
(2) The savings association must disclose publicly:
(i) That it has provided implicit support to the securitization; and
(ii) The regulatory capital impact to the savings association of providing such implicit support.
(i)
(j)
(k)
(i) The transaction is a sale under GAAP.
(ii) The savings association establishes and maintains, pursuant to GAAP, a non-capital reserve sufficient to meet the savings association's reasonably estimated liability under the recourse arrangement.
(iii) The loans and leases are to businesses that meet the criteria for a small-business concern established by the Small Business Administration under section 3(a) of the Small Business Act (15 U.S.C. 632).
(iv) The savings association is well capitalized, as defined in the OCC's prompt corrective action regulation at 12 CFR part 165. For purposes of determining whether a savings association is well capitalized for purposes of this paragraph, the savings association's capital ratios must be calculated without regard to the capital treatment for transfers of small-business obligations with recourse specified in paragraph (k)(1) of this section.
(2) The total outstanding amount of recourse retained by a Federal savings association on transfers of small-business obligations receiving the capital treatment specified in paragraph (k)(1) of this section cannot exceed 15 percent of the savings association's total qualifying capital.
(3) If a Federal savings association ceases to be well capitalized or exceeds the 15 percent capital limitation, the preferential capital treatment specified in paragraph (k)(1) of this section will continue to apply to any transfers of small-business obligations with recourse that occurred during the time that the savings association was well capitalized and did not exceed the capital limit.
(4) The risk-based capital ratios of the savings association must be calculated without regard to the capital treatment for transfers of small-business obligations with recourse specified in paragraph (k)(1) of this section as provided in 12 CFR 167.6(b)(5)(v).
(l)
(ii)
(A) The protection amount of the derivative;
(B) 12.5; and
(C) The sum of the risk-based capital requirements of the individual underlying exposures, up to a maximum of 100 percent.
(2)
(
(
(B) If a savings association satisfies the requirements of paragraph (m)(2)(i)(A) of this section, the savings association must determine its risk-based capital requirement for the underlying exposures as if the savings association had only synthetically securitized the underlying exposure with the nth lowest risk-based capital requirement and had obtained no credit risk mitigant on the other underlying exposures.
(ii)
(A) The protection amount of the derivative;
(B) 12.5; and
(C) The sum of the risk-based capital requirements of the individual underlying exposures (excluding the n-1 underlying exposures with the lowest risk-based capital requirements), up to a maximum of 100 percent.
(a)
(2)
(b)
(2) A Federal savings association must apply the risk weights in Table 6 when the securitization exposure's applicable external or applicable inferred rating represents a long-term credit rating, and must apply the risk weights in Table 7 when the securitization exposure's applicable external or applicable inferred rating represents a short-term credit rating.
(i) A Federal savings association must apply the risk weights in column 1 of Table 6 or Table 7 to the securitization exposure if:
(A) N (as calculated under paragraph (e)(6) of section 45 of this appendix) is six or more (for purposes of this section only, if the notional number of underlying exposures is 25 or more or if all of the underlying exposures are retail exposures, a Federal savings association may assume that N is six
(B) The securitization exposure is a senior securitization exposure.
(ii) A Federal savings association must apply the risk weights in column 3 of Table 6 or Table 7 to the securitization exposure if N is less than six, regardless of the seniority of the securitization exposure.
(iii) Otherwise, a Federal savings association must apply the risk weights in column 2 of Table 6 or Table 7.
(a)
(1)
(i) The savings association's internal credit assessments of securitization exposures must be based on publicly available rating criteria used by an NRSRO.
(ii) The savings association's internal credit assessments of securitization exposures used for risk-based capital purposes must be consistent with those used in the savings association's internal risk management process, management information reporting systems, and capital adequacy assessment process.
(iii) The savings association's internal credit assessment process must have sufficient granularity to identify gradations of risk. Each of the savings association's internal credit assessment categories must correspond to an external rating of an NRSRO.
(iv) The savings association's internal credit assessment process, particularly the stress test factors for determining credit enhancement requirements, must be at least as conservative as the most conservative of the publicly available rating criteria of the NRSROs that have provided external ratings to the commercial paper issued by the ABCP program.
(A) Where the commercial paper issued by an ABCP program has an external rating from two or more NRSROs and the different NRSROs' benchmark stress factors require
(B) If any NRSRO that provides an external rating to the ABCP program's commercial paper changes its methodology (including stress factors), the savings association must evaluate whether to revise its internal assessment process.
(v) The Federal savings association must have an effective system of controls and oversight that ensures compliance with these operational requirements and maintains the integrity and accuracy of the internal credit assessments. The savings association must have an internal audit function independent from the ABCP program business line and internal credit assessment process that assesses at least annually whether the controls over the internal credit assessment process function as intended.
(vi) The Federal savings association must review and update each internal credit assessment whenever new material information is available, but no less frequently than annually.
(vii) The Federal savings association must validate its internal credit assessment process on an ongoing basis and at least annually.
(2)
(3)
(i) The Federal savings association initially rated the exposure at least the equivalent of investment grade.
(ii) The ABCP program has robust credit and investment guidelines (that is, underwriting standards) for the exposures underlying the securitization exposure.
(iii) The ABCP program performs a detailed credit analysis of the sellers of the exposures underlying the securitization exposure.
(iv) The ABCP program's underwriting policy for the exposures underlying the securitization exposure establishes minimum asset eligibility criteria that include the prohibition of the purchase of assets that are significantly past due or of assets that are defaulted (that is, assets that have been charged off or written down by the seller prior to being placed into the ABCP program or assets that would be charged off or written down under the program's governing contracts), as well as limitations on concentration to individual obligors or geographic areas and the tenor of the assets to be purchased.
(v) The aggregate estimate of loss on the exposures underlying the securitization exposure considers all sources of potential risk, such as credit and dilution risk.
(vi) Where relevant, the ABCP program incorporates structural features into each purchase of exposures underlying the securitization exposure to mitigate potential credit deterioration of the underlying exposures. Such features may include wind-down triggers specific to a pool of underlying exposures.
(b)
(a)
(b)
(c)
(2) If K
(i) 0.0056 * T; or
(ii) S[L + T] − S[L].
(3) If K
(i) 0.0056 * (T − (K
(ii) S[L + T] − S[K
(d)
(1) In these expressions, β[Y; a, b] refers to the cumulative beta distribution with parameters a and b evaluated at Y. In the case where N = 1 and EWALGD = 100 percent, S[Y] in formula (1) must be calculated with K[Y] set equal to the product of K
(2) [Reserved]
(e)
(2)
(3)
(A) The sum of the risk-based capital requirements for the underlying exposures plus the expected credit losses of the underlying exposures (as determined under this appendix as if the underlying exposures were directly held by the Federal savings association); to
(B) UE.
(ii) The calculation of K
(iii) All assets related to the securitization are treated as underlying exposures, including assets in a reserve account (such as a cash collateral account).
(4)
(A) The amount of all securitization exposures subordinated to the tranche that contains the Federal savings association's securitization exposure; to
(B) UE.
(ii) A Federal savings association must determine L before considering the effects of any tranche-specific credit enhancements.
(iii) Any gain-on-sale or CEIO associated with the securitization may not be included in L.
(iv) Any reserve account funded by accumulated cash flows from the underlying exposures that is subordinated to the tranche that contains the Federal savings association's securitization exposure may be included in the numerator and denominator of L to the extent cash has accumulated in the account. Unfunded reserve accounts (that is, reserve accounts that are to be funded from future cash flows from the underlying exposures) may not be included in the calculation of L.
(v) In some cases, the purchase price of receivables will reflect a discount that provides credit enhancement (for example, first loss protection) for all or certain tranches of the securitization. When this arises, L should be calculated inclusive of this discount if the discount provides credit enhancement for the securitization exposure.
(5)
(i) The amount of the tranche that contains the Federal savings association's securitization exposure; to
(ii) UE.
(6)
(ii) Multiple exposures to one obligor must be treated as a single underlying exposure.
(iii) In the case of a re-securitization (that is, a securitization in which some or all of the underlying exposures are themselves securitization exposures), the savings association must treat each underlying exposure as a single underlying exposure and must not look through to the originally securitized underlying exposures.
(7)
(f)
(i) h = 0; and
(ii) v = 0.
(2) Under the conditions in paragraphs (f)(3) and (f)(4) of this section, a Federal savings association may employ a simplified method for calculating N and EWALGD.
(3) If C
(4) Alternatively, if only C
(a)
(b)
(i) SE* = max {0, [SE—C x (1−Hs−Hfx)]};
(ii) SE = the amount of the securitization exposure calculated under paragraph (e) of section 42 of this appendix;
(iii) C = the current market value of the collateral;
(iv) Hs = the haircut appropriate to the collateral type; and
(v) Hfx = the haircut appropriate for any currency mismatch between the collateral and the exposure.
(2)
(3)
(i) A savings association must use the collateral type haircuts (Hs) in Table 3;
(ii) A savings association must use a currency mismatch haircut (Hfx) of 8 percent if the exposure and the collateral are denominated in different currencies;
(iii) A savings association must multiply the supervisory haircuts obtained in paragraphs (b)(3)(i) and (ii) by the square root of 6.5 (which equals 2.549510); and
(iv) A savings association must adjust the supervisory haircuts upward on the basis of a holding period longer than 65 business days where and as appropriate to take into account the illiquidity of the collateral.
(4)
(c)
(2)
(i) Calculate ECL for the protected portion of the exposure using the same risk parameters that it uses for calculating the risk-weighted asset amount of the exposure as described in paragraph (c)(3) of this section; and
(ii) Add the exposure's ECL to the Federal savings association's total ECL.
(3)
(i)
(ii)
(A)
(B)
(
(4)
(a)
(i) Includes one or more underlying exposures in which the borrower is permitted to vary the drawn amount within an agreed limit under a line of credit; and
(ii) Contains an early amortization provision.
(2) For securitizations described in paragraph (a)(1) of this section, an originating Federal savings association must calculate the risk-based capital requirement for the originating savings association's interest under sections 42-45 of this appendix, and the risk-based capital requirement for the investors' interest under paragraph (b) of this section.
(b)
(1) The investors' interest EAD;
(2) The appropriate conversion factor in paragraph (c) of this section;
(3) K
(4) 12.5; and
(5) The proportion of the underlying exposures in which the borrower is permitted to vary the drawn amount within an agreed limit under a line of credit.
(c)
(ii) To find the appropriate conversion factor in the tables, a Federal savings association must divide the three-month average annualized excess spread of the securitization by the excess spread trapping point in the securitization structure. In securitizations that do not require excess spread to be trapped, or that specify trapping points based primarily on performance measures other than the three-month average annualized excess spread, the excess spread trapping point is 4.5 percent.
(2) For a securitization for which all or substantially all of the underlying exposures are residential mortgage exposures, a Federal savings association may calculate the appropriate conversion factor using paragraph (c)(1) of this section or may use a conversion factor of 10 percent. If the savings association chooses to use a conversion factor of 10 percent, it must use that conversion factor for all securitizations for which all or substantially all of the underlying exposures are residential mortgage exposures.
(a)
(b)
(1) For the on-balance sheet component of an equity exposure, the savings association's carrying value of the exposure reduced by any unrealized gains on the exposure that are reflected in such carrying value but excluded
(2) For the off-balance sheet component of an equity exposure, the effective notional principal amount of the exposure, the size of which is equivalent to a hypothetical on-balance sheet position in the underlying equity instrument that would evidence the same change in fair value (measured in dollars) for a given small change in the price of the underlying equity instrument, minus the adjusted carrying value of the on-balance sheet component of the exposure as calculated in paragraph (b)(1) of this section. For unfunded equity commitments that are unconditional, the effective notional principal amount is the notional amount of the commitment. For unfunded equity commitments that are conditional, the effective notional principal amount is the savings association's best estimate of the amount that would be funded under economic downturn conditions.
(a)
(b)
(1)
(2)
(3)
(i) An equity exposure that is designed primarily to promote community welfare, including the welfare of low- and moderate-income communities or families, such as by providing services or jobs, excluding equity exposures to an unconsolidated small business investment company and equity exposures held through a consolidated small business investment company described in section 302 of the Small Business Investment Act of 1958 (15 U.S.C. 682).
(ii)
(iii)
(A) To compute the aggregate adjusted carrying value of a Federal savings association's equity exposures for purposes of this paragraph (b)(3)(iii), the savings association may exclude equity exposures described in paragraphs (b)(1), (b)(2), (b)(3)(i), and (b)(3)(ii) of this section, the equity exposure in a hedge pair with the smaller adjusted carrying value, and a proportion of each equity exposure to an investment fund equal to the proportion of the assets of the investment fund that are not equity exposures or that meet the criterion of paragraph (b)(3)(i) of this section. If a savings association does not know the actual holdings of the investment fund, the savings association may calculate the proportion of the assets of the fund that are not equity exposures based on the terms of the prospectus, partnership agreement, or similar contract that defines the fund's permissible investments. If the sum of the investment limits for all exposure classes within the fund exceeds 100 percent, the savings association must assume for purposes of this paragraph (b)(3)(iii) that the investment fund invests to the maximum extent possible in equity exposures.
(B) When determining which of a Federal savings association's equity exposures qualify for a 100 percent risk weight under this paragraph, a savings association first must include equity exposures to unconsolidated small business investment companies or held through consolidated small business investment companies described in section 302 of the Small Business Investment Act of 1958 (15 U.S.C. 682), then must include publicly traded equity exposures (including those held indirectly through investment funds), and then must include non-publicly traded equity exposures (including those held indirectly through investment funds).
(4)
(5)
(6)
(i) Would meet the definition of a traditional securitization were it not for the OCC's application of paragraph (8) of that definition; and
(ii) Has greater than immaterial leverage is assigned a 600 percent risk weight.
(c)
(2)
(i) Under the dollar-offset method of measuring effectiveness, the Federal savings association must determine the ratio of value change (RVC). The RVC is the ratio of the cumulative sum of the periodic changes in value of one equity exposure to the cumulative sum of the periodic changes in the value of the other equity exposure. If RVC is positive, the hedge is not effective and E equals 0. If RVC is negative and greater than or equal to −1 (that is, between zero and −1), then E equals the absolute value of RVC. If RVC is negative and less than −1, then E equals 2 plus RVC.
(ii) Under the variability-reduction method of measuring effectiveness:
(iii) Under the regression method of measuring effectiveness, E equals the coefficient of determination of a regression in
(3) The effective portion of a hedge pair is E multiplied by the greater of the adjusted carrying values of the equity exposures forming a hedge pair.
(4) The ineffective portion of a hedge pair is (1−E) multiplied by the greater of the adjusted carrying values of the equity exposures forming a hedge pair.
(a)
(b)
(1) The savings association must have one or more models that:
(i) Assess the potential decline in value of its modeled equity exposures;
(ii) Are commensurate with the size, complexity, and composition of the savings association's modeled equity exposures; and
(iii) Adequately capture both general market risk and idiosyncratic risk.
(2) The savings association's model must produce an estimate of potential losses for its modeled equity exposures that is no less than the estimate of potential losses produced by a VaR methodology employing a 99.0 percent, one-tailed confidence interval of the distribution of quarterly returns for a benchmark portfolio of equity exposures comparable to the savings association's modeled equity exposures using a long-term sample period.
(3) The number of risk factors and exposures in the sample and the data period used for quantification in the savings association's model and benchmarking exercise must be sufficient to provide confidence in the accuracy and robustness of the savings association's estimates.
(4) The savings association's model and benchmarking process must incorporate data that are relevant in representing the risk profile of the savings association's modeled equity exposures, and must include data from at least one equity market cycle containing adverse market movements relevant to the risk profile of the savings association's modeled equity exposures. In addition, the savings association's benchmarking exercise must be based on daily market prices for the benchmark portfolio. If the savings association's model uses a scenario methodology, the savings association must demonstrate that the model produces a conservative estimate of potential losses on the savings association's modeled equity exposures over a relevant long-term market cycle. If the savings association employs risk factor models, the savings association must demonstrate through empirical analysis the appropriateness of the risk factors used.
(5) The savings association must be able to demonstrate, using theoretical arguments and empirical evidence, that any proxies used in the modeling process are comparable to the savings association's modeled equity exposures and that the savings association has made appropriate adjustments for differences. The savings association must derive any proxies for its modeled equity exposures and benchmark portfolio using historical market data that are relevant to the savings association's modeled equity exposures and benchmark portfolio (or, where not, must use appropriately adjusted data), and such proxies must be robust estimates of the risk of the savings association's modeled equity exposures.
(c)
(1) The risk-weighted asset amount of each equity exposure that qualifies for a 0 percent, 20 percent, or 100 percent risk weight under paragraphs (b)(1) through (b)(3)(i) of section 52 (as determined under section 52 of this appendix) and each equity exposure to an investment fund (as determined under section 54 of this appendix); and
(2) The greater of:
(i) The estimate of potential losses on the savings association's equity exposures (other than equity exposures referenced in paragraph (c)(1) of this section) generated by the savings association's internal equity exposure model multiplied by 12.5; or
(ii) The sum of:
(A) 200 percent multiplied by the aggregate adjusted carrying value of the savings association's publicly traded equity exposures that do not belong to a hedge pair, do not qualify for a 0 percent, 20 percent, or 100 percent risk weight under paragraphs (b)(1) through (b)(3)(i) of section 52 of this appendix, and are not equity exposures to an investment fund;
(B) 200 percent multiplied by the aggregate ineffective portion of all hedge pairs; and
(C) 300 percent multiplied by the aggregate adjusted carrying value of the savings association's equity exposures that are not publicly traded, do not qualify for a 0 percent, 20 percent, or 100 percent risk weight under paragraphs (b)(1) through (b)(3)(i) of section 52 of this appendix, and are not equity exposures to an investment fund.
(d)
(1) The risk-weighted asset amount of each equity exposure that qualifies for a 0 percent, 20 percent, or 100 percent risk weight under paragraphs (b)(1) through (b)(3)(i) of section 52 (as determined under section 52 of this appendix), each equity exposure that qualifies for a 400 percent risk weight under paragraph (b)(5) of section 52 or a 600 percent risk weight under paragraph (b)(6) of section 52 (as determined under section 52 of this appendix), and each equity exposure to an investment fund (as determined under section 54 of this appendix); and
(2) The greater of:
(i) The estimate of potential losses on the Federal savings association's equity exposures (other than equity exposures referenced in paragraph (d)(1) of this section) generated by the savings association's internal equity exposure model multiplied by 12.5; or
(ii) The sum of:
(A) 200 percent multiplied by the aggregate adjusted carrying value of the Federal savings association's publicly traded equity exposures that do not belong to a hedge pair, do not qualify for a 0 percent, 20 percent, or 100 percent risk weight under paragraphs (b)(1) through (b)(3)(i) of section 52 of this appendix, and are not equity exposures to an investment fund; and
(B) 200 percent multiplied by the aggregate ineffective portion of all hedge pairs.
(a)
(2) The risk-weighted asset amount of an equity exposure to an investment fund that meets the requirements for a community development equity exposure in paragraph (b)(3)(i) of section 52 of this appendix is its adjusted carrying value.
(3) If an equity exposure to an investment fund is part of a hedge pair and the Federal savings association does not use the Full Look-Through Approach, the savings association may use the ineffective portion of the hedge pair as determined under paragraph (c) of section 52 of this appendix as the adjusted carrying value for the equity exposure to the investment fund. The risk-weighted asset amount of the effective portion of the hedge pair is equal to its adjusted carrying value.
(b)
(1) Set the risk-weighted asset amount of the Federal savings association's exposure to the fund equal to the product of:
(i) The aggregate risk-weighted asset amounts of the exposures held by the fund as if they were held directly by the savings association; and
(ii) The savings association's proportional ownership share of the fund; or
(2) Include the savings association's proportional ownership share of each exposure held by the fund in the savings association's IMA.
(c)
(d)
(e)
Under the IMA, in addition to holding risk-based capital against an equity derivative contract under this part, a Federal savings association must hold risk-based capital against the counterparty credit risk in the equity derivative contract by also treating the equity derivative contract as a wholesale exposure and computing a supplemental risk-weighted asset amount for the contract under part IV. Under the SRWA, a Federal savings association may choose not to hold risk-based capital against the counterparty credit risk of equity derivative contracts, as long as it does so for all such contracts. Where the equity derivative contracts are subject to a qualified master netting agreement, a Federal savings association using the SRWA must either include all or exclude all of the contracts from any measure used to determine counterparty credit risk exposure.
(a)
(1) The savings association's operational risk quantification system is able to generate an estimate of the savings association's operational risk exposure (which does not incorporate qualifying operational risk mitigants) and an estimate of the savings association's operational risk exposure adjusted to incorporate qualifying operational risk mitigants; and
(2) The savings association's methodology for incorporating the effects of insurance, if the savings association uses insurance as an operational risk mitigant, captures through appropriate discounts to the amount of risk mitigation:
(i) The residual term of the policy, where less than one year;
(ii) The cancellation terms of the policy, where less than one year;
(iii) The policy's timeliness of payment;
(iv) The uncertainty of payment by the provider of the policy; and
(v) Mismatches in coverage between the policy and the hedged operational loss event.
(b)
(1) Insurance that:
(i) Is provided by an unaffiliated company that has a claims payment ability that is rated in one of the three highest rating categories by a NRSRO;
(ii) Has an initial term of at least one year and a residual term of more than 90 days;
(iii) Has a minimum notice period for cancellation by the provider of 90 days;
(iv) Has no exclusions or limitations based upon regulatory action or for the receiver or liquidator of a failed depository institution; and
(v) Is explicitly mapped to a potential operational loss event; and
(2) Operational risk mitigants other than insurance for which the OCC has given prior written approval. In evaluating an
(a) If a Federal savings association does not qualify to use or does not have qualifying operational risk mitigants, the savings association's dollar risk-based capital requirement for operational risk is its operational risk exposure minus eligible operational risk offsets (if any).
(b) If a Federal savings association qualifies to use operational risk mitigants and has qualifying operational risk mitigants, the savings association's dollar risk-based capital requirement for operational risk is the greater of:
(1) The Federal savings association's operational risk exposure adjusted for qualifying operational risk mitigants minus eligible operational risk offsets (if any); or
(2) 0.8 multiplied by the difference between:
(i) The Federal savings association's operational risk exposure; and
(ii) Eligible operational risk offsets (if any).
(c) The Federal savings association's risk-weighted asset amount for operational risk equals the savings association's dollar risk-based capital requirement for operational risk determined under paragraph (a) or (b) of this section multiplied by 12.5.
(a) Each Federal savings association must publicly disclose each quarter its total and tier 1 risk-based capital ratios and their components (that is, tier 1 capital, tier 2 capital, total qualifying capital, and total risk-weighted assets).
(b) A Federal savings association must comply with paragraph (c) of section 71 of this appendix unless it is a consolidated subsidiary of a depository institution or bank holding company that is subject to these requirements.
(c)(1) Each consolidated Federal savings association described in paragraph (b) of this section that is not a subsidiary of a non-U.S. banking organization that is subject to comparable public disclosure requirements in its home jurisdiction and has successfully completed its parallel run must provide timely public disclosures each calendar quarter of the information in tables 11.1-11.11 below. If a significant change occurs, such that the most recent reported amounts are no longer reflective of the savings association's capital adequacy and risk profile, then a brief discussion of this change and its likely impact must be provided as soon as practicable thereafter. Qualitative disclosures that typically do not change each quarter (for example, a general summary of the savings association's risk management objectives and policies, reporting system, and definitions) may be disclosed annually, provided any significant changes to these are disclosed in the interim. Management is encouraged to provide all of the disclosures required by this appendix in one place on the savings association's public Web site.
(2) Each Federal savings association is required to have a formal disclosure policy approved by the board of directors that addresses its approach for determining the disclosures it makes. The policy must address the associated internal controls and disclosure controls and procedures. The board of directors and senior management are responsible for establishing and maintaining an effective internal control structure over financial reporting, including the disclosures required by this appendix, and must ensure that appropriate review of the disclosures takes place. One or more senior officers of the savings association must attest that the disclosures required by this appendix meet the requirements of this appendix.
(3) If a Federal savings association believes that disclosure of specific commercial or financial information would prejudice seriously its position by making public information that is either proprietary or confidential in nature, the savings association need not disclose those specific items, but must disclose more general information about the subject matter of the requirement, together with the fact that, and the reason why, the specific items of information have not been disclosed.
For each separate risk area described in tables 11.4 through 11.11, the Federal savings association must describe its risk management objectives and policies, including:
• Strategies and processes;
• The structure and organization of the relevant risk management function;
• The scope and nature of risk reporting and/or measurement systems;
• Policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants.
Such a breakdown might, for instance, be (a) loans, off-balance sheet commitments, and other non-derivative off-balance sheet exposures, (b) debt securities, and (c) OTC derivatives.
A Federal savings association might choose to define the geographical areas based on the way the company's portfolio is geographically managed. The criteria used to allocate the loans to geographical areas must be specified.
(a)
(b)
(1)
(i) Subject to the limitations in paragraph (d) of section 81, assets held by a VIE, provided that the following conditions are met:
(A) The VIE existed prior to the implementation date,
(B) The savings association did not consolidate the VIE on its balance sheet for calendar quarter-end regulatory report dates prior to the implementation date,
(C) The savings association must consolidate the VIE on its balance sheet beginning as of the implementation date as a result of its implementation of FAS 167, and
(D) The savings association excludes all assets held by VIEs described in paragraphs (b)(1)(i)(A) through (C) of this section 81; and
(ii) Subject to the limitations in paragraph (d) of this section 81, assets held by a VIE that is a consolidated ABCP program, provided that the following conditions are met:
(A) The savings association is the sponsor of the ABCP program,
(B) Prior to the implementation date, the savings association consolidated the VIE onto its balance sheet under GAAP and excluded the VIE's assets from the savings association's risk-weighted assets, and
(C) The savings association chooses to exclude all assets held by ABCP program VIEs described in paragraphs (b)(1)(ii)(A) and (B) of this section 81.
(2)
(3)
(c)
(1)
(2)
(3)
(d)
12 U.S.C. 1462a, 1463, 1464, 1467a, 1828, 1831p-1, 1881-1884, 5412(b)(2)(B); 15 U.S.C. 1681s and 1681w; 15 U.S.C. 6801 and 6805(b)(1).
(a) This part is issued under section 3 of the Bank Protection Act of 1968 (12 U.S.C 1882), sections 501 and 505(b)(1) of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 and 6805(b)(1)), and sections 621 and 628 of the Fair Credit Reporting Act (15 U.S.C. 1681s and 1681w). This part is applicable to Federal savings associations. It requires each Federal savings association to adopt appropriate security procedures to discourage robberies, burglaries, and larcenies and to assist in the identification and prosecution of persons who commit such acts. Section 168.5 of this part is applicable to Federal savings associations and their subsidiaries (except brokers, dealers, persons providing insurance, investment companies, and investment advisers). Section 168.5 of this part requires covered institutions to establish and implement appropriate administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of customer information.
(b) It is the responsibility of a Federal savings association's board of directors to comply with this regulation and ensure that a written security program for the association's main office and branches is developed and implemented.
Within 30 days after the effective date of insurance of accounts, the board of directors of each Federal savings association shall designate a security officer who shall have the authority, subject to the approval of the board of directors, to develop, within a reasonable time but no later than 180 days, and to administer a written security program for each of the association's offices.
(a)
(1) Establish procedures for opening and closing for business and for the safekeeping of all currency, negotiable securities, and similar valuables at all times;
(2) Establish procedures that will assist in identifying persons committing crimes against the association and that will preserve evidence that may aid in their identification and prosecution. Such procedures may include, but are not limited to:
(i) Maintaining a camera that records activity in the office;
(ii) Using identification devices, such as prerecorded serial-numbered bills, or chemical and electronic devices; and
(iii) Retaining a record of any robbery, burglary, or larceny committed against the association;
(3) Provide for initial and periodic training of officers and employees in their responsibilities under the security program and in proper employee conduct during and after a burglary, robbery, or larceny; and
(4) Provide for selecting, testing, operating and maintaining appropriate security devices, as specified in paragraph (b) of this section.
(b)
(1) A means of protecting cash and other liquid assets, such as a vault, safe, or other secure space;
(2) A lighting system for illuminating, during the hours of darkness, the area around the vault, if the vault is visible from outside the office;
(3) Tamper-resistant locks on exterior doors and exterior windows that may be opened;
(4) An alarm system or other appropriate device for promptly notifying the nearest responsible law enforcement officers of an attempted or perpetrated robbery or burglary; and
(5) Such other devices as the security officer determines to be appropriate, taking into consideration:
(i) The incidence of crimes against financial institutions in the area;
(ii) The amount of currency and other valuables exposed to robbery, burglary, or larceny;
(iii) The distance of the office from the nearest responsible law enforcement officers;
(iv) The cost of the security devices;
(v) Other security measures in effect at the office; and
(vi) The physical characteristics of the structure of the office and its surroundings.
The security officer for each Federal savings association shall report at least annually to the association's board of directors on the implementation, administration, and effectiveness of the security program.
Federal savings associations and their subsidiaries (except brokers, dealers, persons providing insurance, investment companies, and investment advisers) must comply with the Interagency Guidelines Establishing Information Security Standards set forth in appendix B to part 170 of this chapter. Supplement A to appendix B to part 170 of this chapter provides interpretive guidance.
Section 2, 48 Stat. 128, as amended (12 U.S.C. 1462); section 3, as added by section 301, 103 Stat. 278 (12 U.S.C. 1462a); section 4, as added by section 301, 103 Stat. 280 (12 U.S.C. 1463), 5412(b)(2)(B).
As used in this part:
(a)
(i) Ownership of any security of the association or
(ii) Any indebtedness to the association.
(2) For purposes of this part, the term
(b)
(c)
(d)
(i) Any request for a proxy whether or not accompanied by or included in a form of proxy;
(ii) Any request to execute, not execute, or revoke a proxy; or
(iii) The furnishing of a form of proxy or other communication to security holders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy.
(2) The terms do not apply, however, to the furnishing of a form of proxy to a security holder upon the request of such security holder or to the performance by any person of ministerial acts on behalf of a person soliciting a proxy.
Every form of proxy shall conform to the following requirements:
(a) The proxy shall be revocable at will by the person giving it. The power to revoke may not be conditioned on any event or occurrence or be otherwise limited; except that, in the case of a proxy relating to capital stock if such proxy is coupled with an interest, states such fact on its face, and is valid under the laws of the state in which it is to be exercised, such proxy may be made irrevocable to the extent permitted by such state law.
(b) The proxy may not be part of any other document or instrument (such as an account card).
(c) The proxy shall be clearly labeled “Revocable Proxy” in boldface type (at least as large as 18 point).
No proxy of a mutual savings association with a term greater than eleven months or solicited at the expense of the association may designate as holder anyone other than the board of directors [trustees] as a whole, or a committee appointed by a majority of such board.
No solicitation of a proxy shall be made by means of any statement, form of proxy, notice of meeting, or other communication, written or oral, which:
(a) Solicits any undated or postdated proxy;
(b) Solicits any proxy that provides that it shall be deemed to be dated as of any date subsequent to the date on which it is signed by the security holder; or
(c)(1) Contains any statement that is false or misleading with respect to any material fact, or
(2) Omits to state any material fact:
(i) Necessary in order to make the statements therein not false or misleading or
(ii) Necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter that has subsequently become false or misleading.
12 U.S.C. 1462a, 1463, 1464, 1467a, 1828, 1831p-1, 1881-1884, 5412(b)(2)(B); 15 U.S.C. 1681s and 1681w; 15 U.S.C. 6801 and 6805(b)(1).
(a)
(b)
(c)
(d)
(a)
(b)
(a)
(2)
(b)
(c)
(d)
(e)
(a)
(2)
(b)
(1) A statement of the safety and soundness deficiency or deficiencies that have been identified at the Federal savings association;
(2) A description of any restrictions, prohibitions, or affirmative actions that the OCC proposes to impose or require;
(3) The proposed date when such restrictions or prohibitions would be effective or the proposed date for completion of any required action; and
(4) The date by which the savings association subject to the order may file with the OCC a written response to the notice.
(c)
(2)
(i) An explanation why the action proposed by the OCC is not an appropriate exercise of discretion under section 39 of the FDI Act;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances, documentation, or other evidence in support of the position of the savings association regarding the proposed order.
(d)
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the Federal savings association; or
(3) Seek additional information or clarification of the response from the savings association, or any other relevant source.
(e)
(f)
(a)
(b)
(c)
i. Section 39 of the Federal Deposit Insurance Act
ii. Section 39(a) requires the agencies to establish operational and managerial standards relating to: (1) Internal controls, information systems and internal audit systems, in accordance with section 36 of the FDI Act (12 U.S.C. 1831m); (2) loan documentation; (3) credit underwriting; (4) interest rate exposure; (5) asset growth; and (6) compensation, fees, and benefits, in accordance with subsection (c) of section 39. Section 39(b) requires the agencies to establish standards relating to asset quality, earnings, and stock valuation that the agencies determine to be appropriate.
iii. Section 39(c) requires the agencies to establish standards prohibiting as an unsafe and unsound practice any compensatory arrangement that would provide any executive officer, employee, director, or principal shareholder of the institution with excessive compensation, fees or benefits and any compensatory arrangement that could lead to material financial loss to an institution. Section 39(c) also requires that the agencies establish standards that specify when compensation is excessive.
iv. If an agency determines that an institution fails to meet any standard established by guideline under subsection (a) or (b) of section 39, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. In the event that an institution fails to submit an acceptable plan within the time allowed by the agency or fails in any material respect to implement an accepted plan, the agency must, by order, require the institution to correct the deficiency. The agency may, and in some cases must, take other supervisory actions until the deficiency has been corrected.
v. The agencies have adopted amendments to their rules and regulations to establish deadlines for submission and review of compliance plans.
vi. The following Guidelines set out the safety and soundness standards that the agencies use to identify and address problems at insured depository institutions before capital becomes impaired. The agencies believe that the standards adopted in these Guidelines serve this end without dictating how institutions must be managed and operated. These standards are designed to identify potential safety and soundness concerns and ensure that action is taken to address those concerns before they pose a risk to the Deposit Insurance Fund.
Neither section 39 nor these Guidelines in any way limits the authority of the agencies to address unsafe or unsound practices, violations of law, unsafe or unsound conditions, or other practices. Action under section 39 and these Guidelines may be taken independently of, in conjunction with, or in addition to any other enforcement action available to the agencies. Nothing in these Guidelines limits the authority of the FDIC pursuant to section 38(i)(2)(F) of the FDI Act (12 U.S.C. 1831(o)) and part 325 of Title 12 of the Code of Federal Regulations.
1.
2.
3.
4.
5.
6.
A.
1. An organizational structure that establishes clear lines of authority and responsibility for monitoring adherence to established policies;
2. Effective risk assessment;
3. Timely and accurate financial, operational and regulatory reports;
4. Adequate procedures to safeguard and manage assets; and
5. Compliance with applicable laws and regulations.
B.
1. Adequate monitoring of the system of internal controls through an internal audit function. For an institution whose size, complexity or scope of operations does not warrant a full scale internal audit function, a system of independent reviews of key internal controls may be used;
2. Independence and objectivity;
3. Qualified persons;
4. Adequate testing and review of information systems;
5. Adequate documentation of tests and findings and any corrective actions;
6. Verification and review of management actions to address material weaknesses; and
7. Review by the institution's audit committee or board of directors of the effectiveness of the internal audit systems.
C.
1. Enable the institution to make an informed lending decision and to assess risk, as necessary, on an ongoing basis;
2. Identify the purpose of a loan and the source of repayment, and assess the ability of the borrower to repay the indebtedness in a timely manner;
3. Ensure that any claim against a borrower is legally enforceable;
4. Demonstrate appropriate administration and monitoring of a loan; and
5. Take account of the size and complexity of a loan.
D.
1. Are commensurate with the types of loans the institution will make and consider the terms and conditions under which they will be made;
2. Consider the nature of the markets in which loans will be made;
3. Provide for consideration, prior to credit commitment, of the borrower's overall financial condition and resources, the financial responsibility of any guarantor, the nature and value of any underlying collateral, and the borrower's character and willingness to repay as agreed;
4. Establish a system of independent, ongoing credit review and appropriate communication to management and to the board of directors;
5. Take adequate account of concentration of credit risk; and
6. Are appropriate to the size of the institution and the nature and scope of its activities.
E.
1. Manage interest rate risk in a manner that is appropriate to the size of the institution and the complexity of its assets and liabilities; and
2. Provide for periodic reporting to management and the board of directors regarding interest rate risk with adequate information for management and the board of directors to assess the level of risk.
F.
1. The source, volatility and use of the funds that support asset growth;
2. Any increase in credit risk or interest rate risk as a result of growth; and
3. The effect of growth on the institution's capital.
G.
1. Conduct periodic asset quality reviews to identify problem assets;
2. Estimate the inherent losses in those assets and establish reserves that are sufficient to absorb estimated losses;
3. Compare problem asset totals to capital;
4. Take appropriate corrective action to resolve problem assets;
5. Consider the size and potential risks of material asset concentrations; and
6. Provide periodic asset reports with adequate information for management and the board of directors to assess the level of asset risk.
H.
1. Compare recent earnings trends relative to equity, assets, or other commonly used benchmarks to the institution's historical results and those of its peers;
2. Evaluate the adequacy of earnings given the size, complexity, and risk profile of the institution's assets and operations;
3. Assess the source, volatility, and sustainability of earnings, including the effect of nonrecurring or extraordinary income or expense;
4. Take steps to ensure that earnings are sufficient to maintain adequate capital and reserves after considering the institution's asset quality and growth rate; and
5. Provide periodic earnings reports with adequate information for management and the board of directors to assess earnings performance.
I.
Excessive compensation is prohibited as an unsafe and unsound practice. Compensation shall be considered excessive when amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director, or principal shareholder, considering the following:
1. The combined value of all cash and non-cash benefits provided to the individual;
2. The compensation history of the individual and other individuals with comparable expertise at the institution;
3. The financial condition of the institution;
4. Comparable compensation practices at comparable institutions, based upon such factors as asset size, geographic location, and the complexity of the loan portfolio or other assets;
5. For postemployment benefits, the projected total cost and benefit to the institution;
6. Any connection between the individual and any fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the institution; and
7. Any other factors the agencies determines to be relevant.
Compensation that could lead to material financial loss to an institution is prohibited as an unsafe and unsound practice.
The Interagency Guidelines Establishing Information Security Standards (Guidelines) set forth standards pursuant to section 39(a) of the Federal Deposit Insurance Act (12 U.S.C. 1831p-1), and sections 501 and 505(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 and 6805(b)). These Guidelines address standards for developing and implementing administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of customer information. These Guidelines also address standards with respect to the proper disposal of consumer information, pursuant to sections 621 and 628 of the Fair Credit Reporting Act (15 U.S.C. 1681s and 1681w).
A.
B.
C.
2. For purposes of the Guidelines, the following definitions apply:
a.
i.
(A) A consumer report that a Federal savings association obtains;
(B) Information from a consumer report that you obtain from your affiliate after the consumer has been given a notice and has elected not to opt out of that sharing;
(C) Information from a consumer report that you obtain about an individual who applies for but does not receive a loan, including any loan sought by an individual for a business purpose;
(D) Information from a consumer report that you obtain about an individual who guarantees a loan (including a loan to a business entity); or
(E) Information from a consumer report that you obtain about an employee or prospective employee.
(2)
(A) Aggregate information, such as the mean credit score, derived from a group of consumer reports; or
(B) Blind data, such as payment history on accounts that are not personally identifiable, that may be used for developing credit scoring models or for other purposes.
b.
c.
d.
e.
f.
A.
B.
1. Ensure the security and confidentiality of customer information;
2. Protect against any anticipated threats or hazards to the security or integrity of such information;
3. Protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer; and
4. Ensure the proper disposal of customer information and consumer information.
A.
1. Approve your written information security program; and
2. Oversee the development, implementation, and maintenance of your information security program, including assigning specific responsibility for its implementation and reviewing reports from management.
B.
1. Identify reasonably foreseeable internal and external threats that could result in unauthorized disclosure, misuse, alteration, or destruction of customer information or customer information systems.
2. Assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of customer information.
3. Assess the sufficiency of policies, procedures, customer information systems, and other arrangements in place to control risks.
C.
1. Design your information security program to control the identified risks, commensurate with the sensitivity of the information as well as the complexity and scope of your activities. You must consider whether the following security measures are appropriate for you and, if so, adopt those measures you conclude are appropriate:
a. Access controls on customer information systems, including controls to authenticate and permit access only to authorized individuals and controls to prevent employees from providing customer information to unauthorized individuals who may seek to obtain this information through fraudulent means.
b. Access restrictions at physical locations containing customer information, such as buildings, computer facilities, and records storage facilities to permit access only to authorized individuals;
c. Encryption of electronic customer information, including while in transit or in storage on networks or systems to which unauthorized individuals may have access;
d. Procedures designed to ensure that customer information system modifications are consistent with your information security program;
e. Dual control procedures, segregation of duties, and employee background checks for employees with responsibilities for or access to customer information;
f. Monitoring systems and procedures to detect actual and attempted attacks on or intrusions into customer information systems;
g. Response programs that specify actions for you to take when you suspect or detect that unauthorized individuals have gained access to customer information systems, including appropriate reports to regulatory and law enforcement agencies; and
h. Measures to protect against destruction, loss, or damage of customer information due to potential environmental hazards, such as fire and water damage or technological failures.
2. Train staff to implement your information security program.
3. Regularly test the key controls, systems and procedures of the information security program. The frequency and nature of such tests should be determined by your risk assessment. Tests should be conducted or reviewed by independent third parties or staff independent of those that develop or maintain the security programs.
4. Develop, implement, and maintain, as part of your information security program, appropriate measures to properly dispose of customer information and consumer information in accordance with each of the requirements in this paragraph III.
D.
1. Exercise appropriate due diligence in selecting your service providers;
2. Require your service providers by contract to implement appropriate measures designed to meet the objectives of these Guidelines; and
3. Where indicated by your risk assessment, monitor your service providers to confirm that they have satisfied their obligations as required by paragraph D.2. As part of this monitoring, you should review audits, summaries of test results, or other equivalent evaluations of your service providers.
E.
F.
G.
2.
3.
4.
This Guidance
Section 501(b) of the GLBA required the Agencies to establish appropriate standards for financial institutions subject to their jurisdiction that include administrative, technical, and physical safeguards, to protect the security and confidentiality of customer information. Accordingly, the Agencies issued Security Guidelines requiring every financial institution to have an information security program designed to:
1. Ensure the security and confidentiality of customer information;
2. Protect against any anticipated threats or hazards to the security or integrity of such information; and
3. Protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.
1. The Security Guidelines direct every financial institution to assess the following risks, among others, when developing its information security program:
a. Reasonably foreseeable internal and external threats that could result in unauthorized disclosure, misuse, alteration, or destruction of customer information or customer information systems;
b. The likelihood and potential damage of threats, taking into consideration the sensitivity of customer information; and
c. The sufficiency of policies, procedures, customer information systems, and other arrangements in place to control risks.
2. Following the assessment of these risks, the Security Guidelines require a financial institution to design a program to address the identified risks. The particular security measures an institution should adopt will depend upon the risks presented by the complexity and scope of its business. At a minimum, the financial institution is required to consider the specific security measures enumerated in the Security Guidelines,
a. Access controls on customer information systems, including controls to authenticate and permit access only to authorized individuals and controls to prevent employees from providing customer information to unauthorized individuals who may seek to obtain this information through fraudulent means;
b. Background checks for employees with responsibilities for access to customer information; and
c. Response programs that specify actions to be taken when the financial institution suspects or detects that unauthorized individuals have gained access to customer information systems, including appropriate reports to regulatory and law enforcement agencies.
The Security Guidelines direct every financial institution to require its service providers by contract to implement appropriate measures designed to protect against unauthorized access to or use of customer information that could result in substantial harm or inconvenience to any customer.
Millions of Americans, throughout the country, have been victims of identity theft.
In addition, each institution should be able to address incidents of unauthorized access to customer information in customer information systems maintained by its domestic and foreign service providers.
1. At a minimum, an institution's response program should contain procedures for the following:
a. Assessing the nature and scope of an incident, and identifying what customer information systems and types of customer information have been accessed or misused;
b. Notifying its primary Federal regulator as soon as possible when the institution becomes aware of an incident involving unauthorized access to or use of
c. Consistent with the Agencies' Suspicious Activity Report (“SAR”) regulations,
d. Taking appropriate steps to contain and control the incident to prevent further unauthorized access to or use of customer information, for example, by monitoring, freezing, or closing affected accounts, while preserving records and other evidence;
e. Notifying customers when warranted.
2. Where an incident of unauthorized access to customer information involves customer information systems maintained by an institution's service providers, it is the responsibility of the financial institution to notify the institution's customers and regulator. However, an institution may authorize or contract with its service provider to notify the institution's customers or regulator on its behalf.
Financial institutions have an affirmative duty to protect their customers' information against unauthorized access or use. Notifying customers of a security incident involving the unauthorized access or use of the customer's information in accordance with the standard set forth below is a key part of that duty. Timely notification of customers is important to manage an institution's reputation risk. Effective notice also may reduce an institution's legal risk, assist in maintaining good customer relations, and enable the institution's customers to take steps to protect themselves against the consequences of identity theft. When customer notification is warranted, an institution may not forgo notifying its customers of an incident because the institution believes that it may be potentially embarrassed or inconvenienced by doing so.
When a financial institution becomes aware of an incident of unauthorized access to sensitive customer information, the institution should conduct a reasonable investigation to promptly determine the likelihood that the information has been or will be misused. If the institution determines that misuse of its information about a customer has occurred or is reasonably possible, it should notify the affected customer as soon as possible. Customer notice may be delayed if an appropriate law enforcement agency determines that notification will interfere with a criminal investigation and provides the institution with a written request for the delay. However, the institution should notify its customers as soon as notification will no longer interfere with the investigation.
Under the Guidelines, an institution must protect against unauthorized access to or use of customer information that could result in substantial harm or inconvenience to any customer. Substantial harm or inconvenience is most likely to result from improper access to
If a financial institution, based upon its investigation, can determine from its logs or other data precisely which customers' information has been improperly accessed, it may limit notification to those customers with regard to whom the institution determines that misuse of their information has occurred or is reasonably possible. However, there may be situations where the institution determines that a group of files has been accessed improperly, but is unable to identify which specific customers' information has been accessed. If the circumstances of the unauthorized access lead the institution to determine that misuse of the information is reasonably possible, it should notify all customers in the group.
1. Customer notice should be given in a clear and conspicuous manner. The notice should describe the incident in general terms and the type of customer information that was the subject of unauthorized access or use. It also should generally describe what the institution has done to protect the customers' information from further unauthorized access. In addition, it should include a telephone number that customers can call for further information and assistance.
a. A recommendation that the customer review account statements and immediately report any suspicious activity to the institution;
b. A description of fraud alerts and an explanation of how the customer may place a fraud alert in the customer's consumer reports to put the customer's creditors on notice that the customer may be a victim of fraud;
c. A recommendation that the customer periodically obtain credit reports from each nationwide credit reporting agency and have information relating to fraudulent transactions deleted;
d. An explanation of how the customer may obtain a credit report free of charge; and
e. Information about the availability of the FTC's online guidance regarding steps a consumer can take to protect against identity theft. The notice should encourage the customer to report any incidents of identity theft to the FTC, and should provide the
2. The Agencies encourage financial institutions to notify the nationwide consumer reporting agencies prior to sending notices to a large number of customers that include contact information for the reporting agencies.
Customer notice should be delivered in any manner designed to ensure that a customer can reasonably be expected to receive it. For example, the institution may choose to contact all customers affected by telephone or by mail, or by electronic mail for those customers for whom it has a valid e-mail address and who have agreed to receive communications electronically.
12 U.S.C. 1462a, 1463, 1464, 1467a, 1828, 1831p-1, 1881-1884, and 5412(b)(2)(B); 15 U.S.C. 1681b, 1681m, 1681s, 1681s-2, 1681s-3, 1681t, and 1681w; 15 U.S.C. 6801 and 6805; Section 214 Pub. L. 108-159, 117 Stat. 1952.
(a)
(b)
(c)
(1) Require you to maintain or destroy any record pertaining to a consumer that is not imposed under any other law; or
(2) Alter or affect any requirement imposed under any other provision of law to maintain or destroy such a record.
(a)
(b)
(1)
(i) An extension of credit, such as the purchase of property or services involving a deferred payment; and
(ii) A deposit account.
(2) The term
(i) In the case of a branch or agency of a foreign bank, the managing official in charge of the branch or agency; and
(ii) In the case of any other creditor that does not have a board of directors, a designated employee at the level of senior management.
(3)
(i) An account that a financial institution or creditor offers or maintains, primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions, such as a credit card account, mortgage loan, automobile loan, margin account, cell phone account, utility account, checking account, or savings account; and
(ii) Any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(c)
(1) The methods it provides to open its accounts;
(2) The methods it provides to access its accounts; and
(3) Its previous experiences with identity theft.
(d)
(2)
(i) Identify relevant Red Flags for the covered accounts that the financial institution or creditor offers or maintains, and incorporate those Red Flags into its Program;
(ii) Detect Red Flags that have been incorporated into the Program of the financial institution or creditor;
(iii) Respond appropriately to any Red Flags that are detected pursuant to paragraph (d)(2)(ii) of this section to prevent and mitigate identity theft; and
(iv) Ensure the Program (including the Red Flags determined to be relevant) is updated periodically, to reflect changes in risks to customers and to the safety and soundness of the financial institution or creditor from identity theft.
(e)
(1) Obtain approval of the initial written Program from either its board of directors or an appropriate committee of the board of directors;
(2) Involve the board of directors, an appropriate committee thereof, or a designated employee at the level of senior management in the oversight, development, implementation and administration of the Program;
(3) Train staff, as necessary, to effectively implement the Program; and
(4) Exercise appropriate and effective oversight of service provider arrangements.
(f)
(a)
(b)
(1)
(2)
(c)
(1)(i) Notifies the cardholder of the request:
(A) At the cardholder's former address; or
(B) By any other means of communication that the card issuer and the cardholder have previously agreed to use; and
(ii) Provides to the cardholder a reasonable means of promptly reporting incorrect address changes; or
(2) Otherwise assesses the validity of the change of address in accordance with the policies and procedures the card issuer has established pursuant to § 171.90 of this part.
(d)
(e)
The examples in Appendix J and Supplement A to Appendix J are not exclusive. Compliance with an example, to the extent applicable, constitutes compliance with this subpart. Examples in a paragraph illustrate only the issue described in the paragraph and do not illustrate any other issue that may arise in this subpart.
Section 171.90 of this part requires each financial institution and creditor that offers or maintains one or more covered accounts, as defined in § 171.90(b)(3) of this part, to develop and provide for the continued administration of a written Program to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account. These guidelines are intended to assist financial institutions and creditors in the formulation and maintenance of a Program that satisfies the requirements of § 171.90 of this part.
In designing its Program, a financial institution or creditor may incorporate, as appropriate, its existing policies, procedures, and other arrangements that control reasonably foreseeable risks to customers or to the safety and soundness of the financial institution or creditor from identity theft.
(a)
(1) The types of covered accounts it offers or maintains;
(2) The methods it provides to open its covered accounts;
(3) The methods it provides to access its covered accounts; and
(4) Its previous experiences with identity theft.
(b)
(1) Incidents of identity theft that the financial institution or creditor has experienced;
(2) Methods of identity theft that the financial institution or creditor has identified that reflect changes in identity theft risks; and
(3) Applicable supervisory guidance.
(c)
(1) Alerts, notifications, or other warnings received from consumer reporting agencies or service providers, such as fraud detection services;
(2) The presentation of suspicious documents;
(3) The presentation of suspicious personal identifying information, such as a suspicious address change;
(4) The unusual use of, or other suspicious activity related to, a covered account; and
(5) Notice from customers, victims of identity theft, law enforcement authorities, or other persons regarding possible identity theft in connection with covered accounts held by the financial institution or creditor.
The Program's policies and procedures should address the detection of Red Flags in connection with the opening of covered accounts and existing covered accounts, such as by:
(a) Obtaining identifying information about, and verifying the identity of, a person
(b) Authenticating customers, monitoring transactions, and verifying the validity of change of address requests, in the case of existing covered accounts.
The Program's policies and procedures should provide for appropriate responses to the Red Flags the financial institution or creditor has detected that are commensurate with the degree of risk posed. In determining an appropriate response, a financial institution or creditor should consider aggravating factors that may heighten the risk of identity theft, such as a data security incident that results in unauthorized access to a customer's account records held by the financial institution, creditor, or third party, or notice that a customer has provided information related to a covered account held by the financial institution or creditor to someone fraudulently claiming to represent the financial institution or creditor or to a fraudulent website. Appropriate responses may include the following:
(a) Monitoring a covered account for evidence of identity theft;
(b) Contacting the customer;
(c) Changing any passwords, security codes, or other security devices that permit access to a covered account;
(d) Reopening a covered account with a new account number;
(e) Not opening a new covered account;
(f) Closing an existing covered account;
(g) Not attempting to collect on a covered account or not selling a covered account to a debt collector;
(h) Notifying law enforcement; or
(i) Determining that no response is warranted under the particular circumstances.
Financial institutions and creditors should update the Program (including the Red Flags determined to be relevant) periodically, to reflect changes in risks to customers or to the safety and soundness of the financial institution or creditor from identity theft, based on factors such as:
(a) The experiences of the financial institution or creditor with identity theft;
(b) Changes in methods of identity theft;
(c) Changes in methods to detect, prevent, and mitigate identity theft;
(d) Changes in the types of accounts that the financial institution or creditor offers or maintains; and
(e) Changes in the business arrangements of the financial institution or creditor, including mergers, acquisitions, alliances, joint ventures, and service provider arrangements.
(a)
(1) Assigning specific responsibility for the Program's implementation;
(2) Reviewing reports prepared by staff regarding compliance by the financial institution or creditor with § 171.90 of this part; and
(3) Approving material changes to the Program as necessary to address changing identity theft risks.
(b)
(2)
(c)
Financial institutions and creditors should be mindful of other related legal requirements that may be applicable, such as:
(a) For financial institutions and creditors that are subject to 31 U.S.C. 5318(g), filing a Suspicious Activity Report in accordance with applicable law and regulation;
(b) Implementing any requirements under 15 U.S.C. 1681c-1(h) regarding the circumstances under which credit may be extended when the financial institution or creditor detects a fraud or active duty alert;
(c) Implementing any requirements for furnishers of information to consumer reporting agencies under 15 U.S.C. 1681s-2, for example, to correct or update inaccurate or incomplete information, and to not report information that the furnisher has reasonable cause to believe is inaccurate; and
(d) Complying with the prohibitions in 15 U.S.C. 1681m on the sale, transfer, and placement for collection of certain debts resulting from identity theft.
In addition to incorporating Red Flags from the sources recommended in section II.b. of the Guidelines in Appendix J of this part, each financial institution or creditor may consider incorporating into its Program, whether singly or in combination, Red Flags from the following illustrative examples in connection with covered accounts:
1. A fraud or active duty alert is included with a consumer report.
2. A consumer reporting agency provides a notice of credit freeze in response to a request for a consumer report.
3. A consumer reporting agency provides a notice of address discrepancy, as defined in § 171.82(b) of this part.
4. A consumer report indicates a pattern of activity that is inconsistent with the history and usual pattern of activity of an applicant or customer, such as:
a. A recent and significant increase in the volume of inquiries;
b. An unusual number of recently established credit relationships;
c. A material change in the use of credit, especially with respect to recently established credit relationships; or
d. An account that was closed for cause or identified for abuse of account privileges by a financial institution or creditor.
5. Documents provided for identification appear to have been altered or forged.
6. The photograph or physical description on the identification is not consistent with the appearance of the applicant or customer presenting the identification.
7. Other information on the identification is not consistent with information provided by the person opening a new covered account or customer presenting the identification.
8. Other information on the identification is not consistent with readily accessible information that is on file with the financial institution or creditor, such as a signature card or a recent check.
9. An application appears to have been altered or forged, or gives the appearance of having been destroyed and reassembled.
10. Personal identifying information provided is inconsistent when compared against external information sources used by the financial institution or creditor. For example:
a. The address does not match any address in the consumer report; or
b. The Social Security Number (SSN) has not been issued, or is listed on the Social Security Administration's Death Master File.
11. Personal identifying information provided by the customer is not consistent with other personal identifying information provided by the customer. For example, there is a lack of correlation between the SSN range and date of birth.
12. Personal identifying information provided is associated with known fraudulent activity as indicated by internal or third-party sources used by the financial institution or creditor. For example:
a. The address on an application is the same as the address provided on a fraudulent application; or
b. The phone number on an application is the same as the number provided on a fraudulent application.
13. Personal identifying information provided is of a type commonly associated with fraudulent activity as indicated by internal or third-party sources used by the financial institution or creditor. For example:
a. The address on an application is fictitious, a mail drop, or a prison; or
b. The phone number is invalid, or is associated with a pager or answering service.
14. The SSN provided is the same as that submitted by other persons opening an account or other customers.
15. The address or telephone number provided is the same as or similar to the address or telephone number submitted by an unusually large number of other persons opening accounts or by other customers.
16. The person opening the covered account or the customer fails to provide all required personal identifying information on an application or in response to notification that the application is incomplete.
17. Personal identifying information provided is not consistent with personal identifying information that is on file with the financial institution or creditor.
18. For financial institutions and creditors that use challenge questions, the person opening the covered account or the customer cannot provide authenticating information beyond that which generally would be available from a wallet or consumer report.
19. Shortly following the notice of a change of address for a covered account, the institution or creditor receives a request for a new, additional, or replacement card or a cell phone, or for the addition of authorized users on the account.
20. A new revolving credit account is used in a manner commonly associated with known patterns of fraud. For example:
a. The majority of available credit is used for cash advances or merchandise that is easily convertible to cash (e.g., electronics equipment or jewelry); or
b. The customer fails to make the first payment or makes an initial payment but no subsequent payments.
21. A covered account is used in a manner that is not consistent with established patterns of activity on the account. There is, for example:
a. Nonpayment when there is no history of late or missed payments;
b. A material increase in the use of available credit;
c. A material change in purchasing or spending patterns;
d. A material change in electronic fund transfer patterns in connection with a deposit account; or
e. A material change in telephone call patterns in connection with a cellular phone account.
22. A covered account that has been inactive for a reasonably lengthy period of time is used (taking into consideration the type of account, the expected pattern of usage and other relevant factors).
23. Mail sent to the customer is returned repeatedly as undeliverable although transactions continue to be conducted in connection with the customer's covered account.
24. The financial institution or creditor is notified that the customer is not receiving paper account statements.
25. The financial institution or creditor is notified of unauthorized charges or transactions in connection with a customer's covered account.
26. The financial institution or creditor is notified by a customer, a victim of identity theft, a law enforcement authority, or any other person that it has opened a fraudulent account for a person engaged in identity theft.
12 U.S.C. 1462a, 1463, 1464; 42 U.S.C. 4012a, 4104a, 4104b, 4106, 4128, and 5412(b)(2)(B).
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(1) Receiving any scheduled, periodic payments from a borrower under the terms of a loan, including amounts for taxes, insurance premiums, and other charges with respect to the property securing the loan; and
(2) Making payments of principal and interest and any other payments from the amounts received from the borrower as may be required under the terms of the loan.
(k)
(l)
(a)
(b)
The flood insurance requirement prescribed by § 172.3 does not apply with respect to:
(a) Any state-owned property covered under a policy of self-insurance satisfactory to the Director of FEMA, who publishes and periodically revises the list of states falling within this exemption; or
(b) Property securing any loan with an original principal balance of $5,000 or less and a repayment term of one year or less.
If a Federal savings association requires the escrow of taxes, insurance premiums, fees, or any other charges for a loan secured by
(a)
(b)
If a Federal savings association, or a servicer acting on behalf of the savings association, determines at any time during the term of a designated loan that the building or mobile home and any personal property securing the designated loan is not covered by flood insurance or is covered by flood insurance in an amount less than the amount required under § 172.3, then the savings association or its servicer shall notify the borrower that the borrower should obtain flood insurance, at the borrower's expense, in an amount at least equal to the amount required under § 172.3, for the remaining term of the loan. If the borrower fails to obtain flood insurance within 45 days after notification, then the savings association or its servicer shall purchase insurance on the borrower's behalf. The savings association or its servicer may charge the borrower for the cost of premiums and fees incurred in purchasing the insurance.
(a)
(b)
(1) Is made in connection with a making, increasing, extending, or renewing of the loan that is initiated by the borrower;
(2) Reflects the Director of FEMA's revision or updating of floodplain areas or flood-risk zones;
(3) Reflects the Director of FEMA's publication of a notice or compendium that:
(i) Affects the area in which the building or mobile home securing the loan is located; or
(ii) By determination of the Director of FEMA, may reasonably require a determination whether the building or mobile home securing the loan is located in a special flood hazard area; or
(4) Results in the purchase of flood insurance coverage by the lender or its servicer on behalf of the borrower under § 172.7.
(c)
(a)
(b)
(1) A warning, in a form approved by the Director of FEMA, that the building or the mobile home is or will be located in a special flood hazard area;
(2) A description of the flood insurance purchase requirements set forth in section 102(b) of the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 4012a(b));
(3) A statement, where applicable, that flood insurance coverage is available under the NFIP and may also be available from private insurers; and
(4) A statement whether Federal disaster relief assistance may be available in the event of damage to the building or mobile home caused by flooding in a Federally-declared disaster.
(c)
(d)
(e)
(f)
(a)
(b)
We are giving you this notice to inform you that:
The building or mobile home securing the loan for which you have applied is or will be located in an area with special flood hazards.
The area has been identified by the Director of the Federal Emergency Management Agency (FEMA) as a special flood hazard area using FEMA's
Federal law allows a lender and borrower jointly to request the Director of FEMA to review the determination of whether the property securing the loan is located in a special flood hazard area. If you would like to make such a request, please contact us for further information.
__ The community in which the property securing the loan is located participates in the National Flood Insurance Program (NFIP). Federal law will not allow us to make you the loan that you have applied for if you do not purchase flood insurance. The flood insurance must be maintained for the life of the loan. If you fail to purchase or renew flood insurance on the property, Federal law authorizes and requires us to purchase the flood insurance for you at your expense.
• Flood insurance coverage under the NFIP may be purchased through an insurance agent who will obtain the policy either directly through the NFIP or through an insurance company that participates in the NFIP. Flood insurance also may be available from private insurers that do not participate in the NFIP.
• At a minimum, flood insurance purchased must cover
(1) the outstanding principal balance of the loan;
(2) the maximum amount of coverage allowed for the type of property under the NFIP.
Flood insurance coverage under the NFIP is limited to the overall value of the property securing the loan minus the value of the land on which the property is located.
• Federal disaster relief assistance (usually in the form of a low-interest loan) may be available for damages incurred in excess of your flood insurance if your community's participation in the NFIP is in accordance with NFIP requirements.
__ Flood insurance coverage under the NFIP is not available for the property securing the loan because the community in which the property is located does not participate in the NFIP. In addition, if the non-participating community has been identified for at least one year as containing a special flood hazard area, properties located in the community will not be eligible for Federal disaster relief assistance in the event of a Federally-declared flood disaster.
12 U.S.C. 1817(j).
The purpose of this part is to implement the provisions of the Change in Bank Control Act, 12 U.S.C. 1817(j) (“Control Act”) relating to acquisitions and changes in control of Federal savings associations that are organized in stock form.
As used in this part and in the forms under this part, the following definitions apply, unless the context otherwise requires:
(a)
(1) An increase in percentage ownership resulting from a redemption, repurchase, reverse stock split or a
(2) The acquisition of stock by a group of persons and/or companies acting in concert which shall be deemed to occur upon formation of such group:
(i) Votes the stock only upon instruction from the beneficial owner, and
(ii) Does not provide the beneficial owner with advice concerning the voting of such stock.
(b)
(c)
(1) Knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement, or
(2) A combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise.
(3) A person or company which acts in concert with another person or company (“other party”) shall also be deemed to be acting in concert with any person or company who is also acting in concert with that other party, except that any tax-qualified employee stock benefit plan as defined in § 192.25 of this chapter will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.
(d)
(e) [Reserved]
(f)
(1) The Federal Deposit Insurance Corporation, the Resolution Trust Corporation, the Office of the Comptroller of the Currency (OCC), or any Federal Home Loan Bank;
(2) Any company the majority of shares of which is owned by:
(i) The United States or any state;
(ii) An officer of the United States or any state in his or her official capacity; or
(iii) An instrumentality of the United States or any state; or
(3) A savings and loan holding company registered under section 10(b) of the Home Owners' Loan Act (Holding Company Act).
(g)
(h)
(i) [Reserved]
(j)
(k)
(l) [Reserved]
(m)
(n)
(o) [Reserved]
(p)
(q) [Reserved]
(r)
(1) The transferability and voting of any stock or other indicia of participation in another entity, or
(2) Achievement of a common or shared objective, such as to collectively manage or control another entity.
(s)
(t)
(u)(1)
(i) To vote for or to select directors, trustees, or partners (or persons exercising similar functions of the issuing savings association or company); or
(ii) To vote or to direct the conduct of the operations or other significant policies of the issuer:
(2) Notwithstanding anything in paragraph (u)(1) of this section, preferred stock, limited partnership shares or interests, or similar interests are not “voting stock” if:
(i) Voting rights associated with the stock, shares or interests are limited solely to the type customarily provided by statute with regard to matters that would significantly and adversely affect the rights or preference of the stock, security or other interest, such as the issuance of additional amounts or classes of senior securities, the modification of the terms of the stock, security or interest, the dissolution of the issuer, or the payment of dividends by the issuer when preferred dividends are in arrears;
(ii) The stock, shares or interests represent an essentially passive investment or financing device and do not otherwise provide the holder with control over the issuer; and
(iii) The stock, shares or interests do not at the time entitle the holder, by statute, charter, or otherwise, to select or to vote for the selection of directors, trustees, or partners (or persons exercising similar functions) of the issuer;
(3) Notwithstanding anything in paragraphs (u)(1) and (u)(2) of this
(a) [Reserved]
(b)
(c)
(1) [Reserved]
(2) The following transactions are exempt from the notice requirements of paragraph (b) of this section:
(i)(A) Control of a Federal savings association acquired by a bank holding company that is registered under and subject to, the Bank Holding Company Act of 1956, or any company controlled by such bank holding company;
(B) Control of a Federal savings association acquired solely as a result of a pledge or hypothecation of stock to secure a loan contracted for in good faith or the liquidation of a loan contracted for in good faith, in either case where such loan was made in the ordinary course of the business of the lender:
(C) Control of a Federal savings association acquired through a percentage increase in stock ownership following a
(D) Acquisition of additional stock after a non-disapproval under § 174.7 of this part, or any predecessor provision, has been received:
(E) Acquisitions of less than 25 percent (25%) of a class of stock by a tax-qualified employee stock benefit plan as defined in § 192.25.
(ii) Transactions for which approval is required under the HOLA;
(iii) Transactions for which approval is required under part 146 or § 152.13 and § 163.22 of this chapter;
(iv) Transactions for which a change of control notice must be submitted to the Board of Governors of the Federal Reserve System pursuant to the Change in Bank Control Act, 12 U.S.C. 1817(j);
(v) Acquisition of additional stock of a Federal savings association by any person who:
(A) Has held power to vote 25 percent or more of any class of voting stock in such association continuously since March 9, 1979; or
(B) Has maintained control of the savings association continuously since acquiring control in compliance with the Control Act (or the Repealed Control Act) and the OCC's regulations thereunder then in effect:
(vi) Acquisitions of stock of a
(3) An acquiror that would be considered to be in control of a Federal savings association pursuant to § 174.4 of this part on December 26, 1985, shall not be subject to this § 174.3 unless the acquiror acquires additional stock of the savings association or obtains a control factor with respect to such association after December 26, 1985:
(d)
(i) Control of a savings association acquired through
(ii) Control of a savings association acquired through liquidation of a loan contracted in good faith where the loan
(iii) Control of a savings association acquired through a percentage increase in ownership following a stock split or redemption that was not
(iv) Control determined pursuant to § 174.4 (a) or (b) as a result of actions by third parties that are not within the control of the acquiror;
(v) Control of a savings association acquired through testate or intestate succession:
(2) The exemptions provided by paragraphs (d)(1)(i) through (d)(1)(iv) of this section are subject to the following conditions:
(i) The acquiror shall file a notice or rebuttal, as appropriate, with the OCC within 90 days of acquisition of control;
(ii) The acquiror shall not take any action to direct the management or policies of the savings association or which are designed to effect a change in the business plan of the savings association other than voting on matters that may be presented to stockholders by management of the savings association until the OCC has acted favorably upon the acquiror's notice or rebuttal, and the OCC may require that the acquiror take such steps as the OCC deems necessary to insure that control is not exercised; and
(iii) If the OCC disapproves the acquiror's notice or rebuttal, the acquiror shall divest such portion of the stock held by the acquiror so as to cause the acquiror not to be determined to be in control of the savings association under § 174.4 of this part, within one year or such shorter period of time and in the manner that the OCC may order.
(a)
(i) Acquires 25 percent or more of any class of voting stock of the savings association;
(ii) Acquires irrevocable proxies representing 25 percent or more of any class of voting stock of the savings association; or
(iii) Acquires any combination of voting stock and irrevocable proxies representing 25 percent or more of any class of voting stock of a savings association.
(iv) [Reserved]
(2) [Reserved]
(3) [Reserved]
(4) A person or company shall be deemed to control a savings association if the OCC determines that such person has the power to direct the management or policies of the savings association.
(b)
(i) Acquires more than 10 percent of any class of voting stock of the savings association and is subject to any control factor, as defined in paragraph (c) of this section;
(ii) Acquires 25 percent or more of any class of stock of the savings association and is subject to any control factor, as defined in paragraph (c) of this section.
(2) An acquiror shall be determined, subject to rebuttal, to have acquired control of a savings association, if the acquiror directly or indirectly, or through one or more subsidiaries or transactions or acting in concert with one or more persons or companies, holds any combination of voting stock and revocable proxies, representing 25 percent or more of any class of voting stock of a savings association, excluding such proxies held in connection with a solicitation by, or in opposition to, a solicitation on behalf of management of the savings association, but including a solicitation in connection with an election of directors, and such proxies would enable the acquiror to:
(i) Elect one-third or more of the savings association's board of directors, including nominees or representatives of the acquiror currently serving on such board;
(ii) Cause the savings association's stockholders to approve the acquisition or corporate reorganization of the savings association; or
(iii) Exert a continuing influence on a material aspect of the business operations of the savings association.
(c)
(1) The acquiror would be one of the two largest holders of any class of voting stock of the Federal savings association.
(2) The acquiror would hold 25 percent or more of the total stockholders' equity of the Federal savings association.
(3) The acquiror would hold more than 35 percent of the combined debt securities and stockholders' equity of the Federal savings association.
(4) The acquiror is party to any agreement:
(i) Pursuant to which the acquiror possesses a material economic stake in the Federal savings association resulting from a profit-sharing arrangement, use of common names, facilities or personnel, or the provision of essential services to the savings association; or
(ii) That enables the acquiror to influence a material aspect of the management or policies of the Federal savings association, other than agreements to which the savings association is a party where the restrictions are customary under the circumstances and in the case of an acquisition agreement, which apply only during the period when the acquiror is seeking the OCC's approval to acquire the savings association, the agreement prohibits transactions between the acquiror and the savings association and their respective affiliates without approval by the OCC during the pendency of the notice process, and the agreement contains no material forfeiture provisions applicable to the savings association in the event the acquisition is not approved or not approved by a specified date.
(5) The acquiror would have the ability, other than through the holding of revocable proxies, to direct the votes of 25 percent or more of a class of the Federal savings association's voting stock or to vote 25 percent or more of a class of the savings association's voting stock in the future upon the occurrence of a future event.
(6) The acquiror would have the power to direct the disposition of 25 percent or more of a class of the Federal savings association's voting stock in a manner other than a widely dispersed or public offering.
(7) The acquiror and/or the acquiror's representatives or nominees would constitute more than one member of the Federal savings association's board of directors.
(8) The acquiror or a nominee or management official of the acquiror would serve as the chairman of the board of directors, chairman of the executive committee, chief executive officer, chief operating officer, chief financial officer, or in any position with similar policymaking authority in the Federal savings association.
(d)
(1) A company will be presumed to be acting in concert with a controlling shareholder, partner, trustee or management official of such company with respect to the acquisition of stock of a Federal savings association, if
(i) Both the company and the person own stock in the savings association,
(ii) The company provides credit to the person to purchase the savings association's stock, or
(iii) The company pledges its assets or otherwise is instrumental in obtaining financing for the person to acquire stock of the savings association;
(2) A person will be presumed to be acting in concert with members of the person's immediate family;
(3) Persons will be presumed to be acting in concert with each other where
(i) Both own stock in the savings association and both are also management officials, controlling shareholders, partners, or trustees of another company, or
(ii) One person provides credit to another person or is instrumental in obtaining financing for another person to purchase stock of the savings association;
(4) A company controlling or controlled by another company and companies under common control will be presumed to be acting in concert;
(5) Persons or companies will be presumed to be acting in concert where they constitute a group under the beneficial ownership reporting rules under section 13 or the proxy rules under section 14 of the Securities Exchange Act of 1934, promulgated by the Securities and Exchange Commission.
(6) A person or company will be presumed to be acting in concert with any trust for which such person or company serves as trustee, except that a tax-qualified employee stock benefit plan as defined in § 192.2(a)(39) shall not be presumed to be acting in concert with its trustee or person acting in a similar fiduciary capacity solely for the purposes of determining whether to combine the holdings of a plan and its trustee or fiduciary.
(7) Persons or companies will be presumed to be acting in concert with each other and with any other person or company with which they also are presumed to act in concert.
(e)
(i) An acquiror seeking to rebut the determination of control arising under paragraph (b)(1) of this section shall submit to the appropriate OCC licensing office an executed agreement materially conforming to the agreement set forth at Appendix A to this part. Unless agreed to by the OCC in writing, no other agreement or filing shall be deemed to rebut the determination of control arising under paragraph (b)(1) of this section. If accepted by the OCC, the acquiror shall furnish a copy of the executed agreement to the association to which the rebuttal pertains.
(ii) An acquiror seeking to rebut the determination of control with respect to holding of proxies arising under paragraph (b)(2) of this section shall be subject to the requirements of paragraph (e)(1) of this section, except that in the case of a rebuttal of the presumption of control arising under paragraph (b)(2) of this section, the OCC may require the acquiror to furnish information in response to a specific request for information and depending upon the particular facts and circumstances, to provide an executed rebuttal agreement materially conforming to the agreement set forth at Appendix A to this part, with any modifications deemed necessary by the OCC.
(2)
(3)
(f)
(1) In order to qualify for the safe harbor, an acquiror must submit a certification to the appropriate OCC licensing office that shall be signed by the acquiror or an authorized representative thereof and shall read as follows:
The undersigned makes this submission pursuant to § 174.4(f) of the regulations of the Office of the Comptroller of the Currency (“OCC”) with respect to [name of savings association] and hereby certifies to the OCC the following:
The undersigned is not in control of [name of savings association] under § 174.4(a);
The undersigned is not subject to any control factor as enumerated in § 174.4(c) with respect to the [name of savings association];
The undersigned will not solicit proxies relating to the voting stock of [name of savings association];
Before any change in status occurs that would bring the undersigned within the scope of § 174.4(a) or (b), the undersigned will file and obtain approval of a rebuttal or non-disapproval of a notice or holding company application, as appropriate.
The undersigned has not acquired stock of [name of savings association] for the purpose or effect of changing or influencing the control of [name of savings association] or in connection with or as a participant in any transaction having such purpose or effect.
(2) An acquiror claiming safe-harbor status may vote freely and dissent with respect to its own stock. Certifications provided for in this paragraph must be filed with the appropriate OCC licensing office in accordance with §§ 116.30 and 116.40 of this chapter.
(a)
(2) The certification filed pursuant to this section shall be signed by the acquiror or an authorized representative thereof and shall read as follows:
The undersigned is the beneficial owner of 10 percent or more of a class of stock of [name of savings association]. The undersigned is not in control of such association, as defined in 12 CFR 174.4(a), and is not subject to a rebuttable determination of control under § 174.4(b), and will take no action that would result in a determination of control or a rebuttable determination of control without first filing and obtaining approval of an application under the Savings and Loan Holding Company Act, 12 U.S.C. 1467a, or notice under the Change in Bank Control Act, 12 U.S.C. 1817(j), or filing and obtaining acceptance by the Office of the Comptroller of the Currency of a rebuttal of the rebuttable determination of control.
(3) Notwithstanding anything contained in this paragraph (a), an acquiror is not required to file a certification if:
(i) The OCC has issued a notice of non-disapproval of the acquisition of the savings association; or
(ii) The acquiror has filed a materially complete notice pursuant to § 174.3 of this part.
(b)
(a)
(1) [Reserved]
(2) [Reserved]
(3) [Reserved]
(4) [Reserved]
(5) [Reserved]
(6)
(b)
(ii) Any person or company may amend a notice or rebuttal submission, or file additional information, upon request of the OCC or, in the case of the party filing a notice or rebuttal, upon such party's own initiative.
(2) [Reserved]
(c)
(2) The period for the OCC's review of any proposed acquisition will commence upon receipt by the OCC of a notice deemed sufficient under paragraph (c)(1) of this section. The OCC shall notify an acquiror in writing within 30 calendar days after proper filing of a notice as to whether the notice—
(i) Is sufficient;
(ii) Is insufficient, and what additional information is requested in order to render the notice sufficient; or
(iii) Is materially deficient and will not be processed. The OCC shall also notify an acquiror in writing within 15 calendar days after proper filing of any additional information furnished in response to a specific request by the OCC as to whether the notice is thereby deemed to be sufficient. If the OCC fails to so notify an acquiror within such time, the notice shall be deemed to be sufficient as of the expiration of the applicable period.
(3) After additional information has been requested and supplied, the OCC may request additional information only with respect to matters derived from or prompted by information already furnished, or information of a material nature that was not reasonably available from the acquiror, was concealed, or pertains to developments subsequent to the time of the OCC's initial request for additional information. With regard to information of a material nature that was not reasonably available from the acquiror or was concealed at the time a notice was deemed to be sufficient or which pertains to developments subsequent to the time a notice was deemed to be sufficient, the OCC, at its option, may request such additional information as it considers necessary, or may deem the notice not to be sufficient until such additional information is furnished and cause the review period to commence again in its entirety upon receipt of such additional information.
(i) The 60-day period for the OCC's review of a notice deemed to be sufficient also may be extended by the OCC for up to an additional 30 days.
(ii) The period for the OCC's review of a notice may be further extended not
(A) The OCC determines that any acquiring party has not furnished all the information required under this part;
(B) In the OCC's judgment, any material information submitted is substantially inaccurate;
(C) The OCC has been unable to complete an investigation of each acquiror because of any delay caused by, or the inadequate cooperation of, such acquiror; or
(D) The OCC determines that additional time is needed to investigate and determine that no acquiring party has a record of failing to comply with the requirements of subchapter II of chapter 53 of title 31 of the United States Code.
(4) [Reserved]
(5) The OCC may waive any requirements of this paragraph (c) determined to be unnecessary by the OCC, upon its own initiative, upon the written request of an acquiring person, or in a supervisory case.
(d)
(2) The acquiror must provide a copy of the public notice to the savings association whose stock is sought to be acquired, and may provide a copy of the public notice to any other person who may have an interest in the notice.
(3) The OCC will notify the persons whose requests for announcements, as described in 12 CFR part 195, appendix B, have been received in time for the notification. The OCC may also notify any other persons who may have an interest in the notice.
(e)
(f)
(2) Any person who submits any information or causes or permits any information to be submitted to the OCC pursuant to this part may request that the OCC afford confidential treatment under the Freedom of Information Act to such information for reasons of personal privacy or business confidentiality, which shall include such information that would be deemed to result in the commencement of a tender offer under § 240.14d-2 of title 17 of the Code of Federal Regulations, or for any other reason permitted by Federal law. Such request for confidentiality must be made and justified in accordance with paragraph (f)(5) of this section at the time of filing, and must, to the extent practicable, identify with specificity the information for which confidential treatment may be available and not merely indicate portions of documents or entire documents in which such information is contained. Failure to specifically identify information for which confidential treatment is requested, failure to specifically justify the bases upon which confidentiality is claimed in accordance with paragraph (f)(5) of this section, or overbroad and indiscriminate claims for confidential treatment, may be bases for denial of the request. In addition, the filing party should take all steps reasonably necessary to ensure, as nearly as practicable, that at the time the information is first received by the OCC it is supplied segregated from information for which confidential treatment is not being requested, it is appropriately marked as confidential, and it is accompanied by a written request for confidential treatment which identifies with specificity the information as to which confidential treatment is requested. Any such request must be substantiated in accordance with paragraph (f)(5) of this section.
(3) All documents which contain information for which a request for confidential treatment is made or the appropriate segregable portions thereof shall be marked by the person submitting the records with a prominent stamp, typed legend, or other suitable form of notice on each page or segregable portion of each page, stating “Confidential Treatment Requested by [name].” If such marking is impracticable under the circumstances, a cover sheet prominently marked “Confidential Treatment Requested by [name]” should be securely attached to each group of records submitted for which confidential treatment is requested. Each of the records transmitted in this manner should be individually marked with an identifying number and code so that they are separately identifiable.
(4) A determination as to the validity of any request for confidential treatment may be made when a request for disclosure of the information under the Freedom of Information Act is received, or at any time prior thereto. If the OCC receives a request for the information under the Freedom of Information Act, the OCC will advise the filing party before it discloses material for which confidential treatment has been requested.
(5) Substantiation of a request for confidential treatment shall consist of a statement setting forth, to the extent appropriate or necessary for the determination of the request for confidential treatment, the following information regarding the request:
(i) The reasons, concisely stated and referring to specific exemptive provisions of the Freedom of Information Act, why the information should be withheld from access under the Freedom of Information Act;
(ii) The applicability of any specific statutory or regulatory provisions which govern or may govern the treatment of the information;
(iii) The existence and applicability of any prior determination by the OCC, other Federal agencies, or a court, concerning confidential treatment of the information;
(iv) The adverse consequences to a business enterprise, financial or otherwise, that would result from disclosure of confidential commercial or financial information, including any adverse effect on the business' competitive position;
(v) The measures taken by the business to protect the confidentiality of the commercial or financial information in question and of similar information, prior to, and after, its submission to the OCC;
(vi) The ease or difficulty of a competitor's obtaining or compiling the commercial or financial information;
(vii) Whether commercial or financial information was voluntarily submitted to the OCC, and, if so, whether and how disclosure of the information would tend to impede the availability of similar information to the OCC;
(viii) The extent, if any, to which portions of the substantiation of the request for confidential treatment should be afforded confidential treatment;
(ix) The amount of time after the consummation of the proposed acquisition for which the information should remain confidential and a justification thereof;
(x) Such additional facts and such legal and other authorities as the requesting person may consider appropriate.
(6) Any person requesting access to a notice, other filing, or public comment made pursuant to this part for purposes of commenting on a pending submission may prominently label such request: “Request for Disclosure of Filing(s) Made Under part 174/Priority Treatment Requested.”
(g)
(h) [Reserved]
(i)
(j)
(a) (1) [Reserved]
(2) [Reserved]
(3) [Reserved]
(b) [Reserved]
(c) [Reserved]
(d)
(1) The proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the banking business in any part of the United States;
(2) The effect of the proposed acquisition of control in any section of the country may be substantially to lessen competition or to tend to create a monopoly or the proposed acquisition of control would in any other manner be in restraint of trade, and the anticompetitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served;
(3) The financial condition of any acquiring person or company or the future prospects of the institution is such as might jeopardize the financial stability of the association or prejudice the interests of the depositors of the association;
(4) The competence, experience, or integrity of the acquiring person or any of the proposed management personnel indicates that it would not be in the interests of the depositors of the association, the OCC, or the public to permit such person to control the association;
(5) The acquiring person fails or refuses to furnish information requested by the OCC; or
(6) The OCC determines that the proposed acquisition would have an adverse effect on the Deposit Insurance Fund.
(e)
(f) [Reserved]
(g)
(i) During the 10-year period immediately preceding filing of the notice, criminal, civil or administrative judgments, consents or orders, and any indictments, formal investigations, examinations, or civil or administrative proceedings (excluding routine or customary audits, inspections and investigations) that terminated in any agreements, undertakings, consents or orders, issued against, entered into by, or involving the acquiror or affiliates of the acquiror by any Federal or state court, any department, agency, or commission of the U.S. Government, any state or municipality, any Federal Home Loan Bank, any self-regulatory trade or professional organization, or any foreign government or governmental entity, which involve:
(A) Fraud, moral turpitude, dishonesty, breach of trust or fiduciary duties, organized crime or racketeering;
(B) Violation of securities or commodities laws or regulations;
(C) Violation of depository institution laws or regulations;
(D) Violation of housing authority laws or regulations; or
(E) Violation of the rules, regulations, codes of conduct or ethics of a self-regulatory trade or professional organization;
(ii) Denial, or withdrawal after receipt of formal or informal notice of an intent to deny, by the acquiror or affiliates of the acquiror, of
(A) Any application relating to the organization of a financial institution,
(B) An application to acquire any financial institution or holding company thereof under the Savings and Loan Holding Company Act or the Bank Holding Company Act or otherwise,
(C) A notice relating to a change in control of any of the foregoing under the Control Act or
(D) An application or notice under a state holding company or change in control statute;
(iii) The acquiror or affiliates of the acquiror were placed in receivership or conservatorship during the preceding 10 years, or any management official of the acquiror was a management official or director (other than an official or director serving at the request of the OCC, the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, or the former Federal Savings and Loan Insurance Corporation) or controlling shareholder of a company or savings association that was placed into receivership, conservatorship, or a management consignment program, or was liquidated during his or her tenure or control or within two years thereafter;
(iv) Felony conviction of the acquiror, an affiliate of the acquiror or a management official of the acquiror or an affiliate of the acquiror;
(v) Knowingly making any written or oral statement to the OCC or any predecessor agency (or its delegate) in connection with a notice or other filing under this part that is false or misleading with respect to a material fact or omits to state a material fact with respect to information furnished or requested in connection with such a notice or other filing;
(vi) Acquisition and retention at the time of submission of a notice, of stock in the savings association by the acquiror in violation of § 174.3 or its predecessor sections.
(2)
(i) Liability for amounts of debt which, in the opinion of the OCC, create excessive risks of default and pressure on the savings association to be acquired; or
(ii) Failure to furnish a business plan or furnishing a business plan projecting activities which are inconsistent with economical home financing.
A. [ ] is the owner of [ ] shares (the “Shares”) of the [ ] stock (the “Stock”) of [name and address of association], which Shares represent [ ] percent of a class of “voting stock” of [ ] as defined under the Acquisition of Control Regulations (“Regulations”) of the Office of the Comptroller of the Currency (“OCC”), 12 CFR part 174 (“Voting Stock”);
B. [ ] is a “savings association” within the meaning of the Regulations;
C. [ ] seeks to acquire additional shares of stock of [ ] (“Additional Shares”), such that [ ]'s ownership thereof will exceed 10 percent of a class of Voting Stock but will be less than 25 percent of a class of Voting Stock of [ ]; [and/or] [ ] seeks to [ ], which would constitute the acquisition of a “control factor” as defined in the Regulations (“Control Factor”);
D. [ ] does not seek to acquire the [Additional Shares or Control Factor] for the purpose or effect of changing the control of [ ] or in connection with or as a participant in any transaction having such purpose or effect;
E. The Regulations require a company or a person who intends to hold 10 percent or more but less than 25 percent of any class of Voting Stock of a savings association or holding company thereof and that also would possess any of the Control Factors specified in the Regulations, to file and obtain clearance of a notice (“Notice”) under the Change in Control Act (“Control Act”), 12 U.S.C. 1817(j), prior to acquiring such amount of stock and a Control Factor unless the rebuttable determination of control has been rebutted.
F. Under the Regulations, [ ] would be determined to be in control, subject to rebuttal, of [ ] upon acquisition of the [Additional Shares or Control Factor];
G. [ ] has no intention to manage or control, directly or indirectly, [ ];
H. [ ] has filed on [ ], a written statement seeking to rebut the determination of control, attached hereto and incorporated by reference herein, (this submission referred to as the “Rebuttal”);
I. In order to rebut the rebuttable determination of contro1, [ ] agrees to offer this Agreement as evidence that the acquisition of the [Additional Shares or Control Factor] as proposed would not constitute an acquisition of control under the Regulations.
II. The OCC has determined, and hereby agrees, to act favorably on the Rebuttal, and in consideration of such a determination and agreement by the OCC to act favorably on the Rebuttal, [ ] and any other existing, resulting or successor entities of [ ] agree with the OCC that:
A. Unless [ ] shall have filed a Notice under the Control Act, or an Application under the Holding Company Act, as appropriate, and shall have obtained clearance of the Notice in accordance with the Regulations, [ ] will not, except as expressly permitted otherwise herein or pursuant to an amendment to this Rebuttal Agreement:
1. Seek or accept representation of more than one member of the board of directors of [insert name of association and any holding company thereof];
2. Have or seek to have any representative serve as the chairman of the board of directors, or chairman of an executive or similar committee of [insert name of association and any holding company thereof]'s board of directors or as president or chief executive officer of [insert name of association and any holding company thereof];
3. Engage in any intercompany transaction with [ ] or [ ]'s affiliates;
4. Propose a director in opposition to nominees proposed by the management of [insert name of association and any holding company thereof] for the board of directors of [insert name of association and any holding company thereof] other than as permitted in paragraph A-1;
5. Solicit proxies or participate in any solicitation of proxies with respect to any matter presented to the stockholders [ ] other than in support of, or in opposition to, a solicitation conducted on behalf of management of [ ];
6. Do any of the following, except as necessary solely in connection with [ ]'s performance of duties as a member of [ ]'s board of directors:
(a) Influence or attempt to influence in any respect the loan and credit decisions or policies of [ ], the pricing of services, any personnel decisions, the location of any offices, branching, the hours of operation or similar activities of [ ];
(b) Influence or attempt to influence the dividend policies and practices of [ ] or any decisions or policies of [ ] as to the offering or exchange of any securities;
(c) Seek to amend, or otherwise take action to change, the bylaws, articles of incorporation, or charter of [ ];
(d) Exercise, or attempt to exercise, directly or indirectly, control or a controlling influence over the management, policies or business operations of [ ]; or
(e) Seek or accept access to any non-public information concerning [ ].
B. [ ] is not a party to any agreement with [ ].
C. [ ] shall not assist, aid or abet any of [ ]'s affiliates or associates that are not parties to this Agreement to act, or act in concert with any person or company, in a manner which is inconsistent with the terms hereof or which constitutes an attempt to evade the requirements of this Agreement.
D. Any amendment to this Agreement shall only be proposed in connection with an amended rebuttal filed by [ ] with the OCC for its determination;
E. Prior to acquisition of any shares of “Voting Stock” of [ ] as defined in the Regulations in excess of the Additional Shares, any required filing will be made by [ ] under the Control Act or the Holding Company Act and either approval of the acquisition under the Holding Company Act or any Notice filed under the Control Act shall be cleared in accordance with applicable regulations;
F. At any time during which 10 percent or more of any class of Voting Stock of [ ] is owned or controlled by [ ], no action which is inconsistent with the provisions of this Agreement shall be taken by [ ] until [ ] files and either obtains a favorable determination with respect to either an amended rebuttal, approval of an Application under the Holding Company Act, or clearance of a Notice under the Control Act in accordance with applicable regulations;
G. Where any amended rebuttal filed by [ ] is denied or disapproved, [ ] shall take no action which is inconsistent with the terms of this Agreement, except after either (1) reducing the amount of shares of Voting Stock of [ ] owned or controlled by [ ] to an amount under 10 percent of a class of Voting Stock, or immediately ceasing any other actions that give rise to a conclusive or rebuttable determination of control under the Regulations; or (2) filing a Notice under the Control Act or an Application under the Holding Company Act, as appropriate, and either obtaining clearance of the Notice or approval of the Application, in accordance with applicable regulations;
H. Where any Notice filed by [ ] is disapproved, [ ] shall take no action which is inconsistent with the terms of this Agreement, except after reducing the amount of shares of Voting Stock of [ ] owned or controlled by [ ] to an amount under 10 percent of any class of Voting Stock, or immediately ceasing any other actions that give rise to a conclusive or rebuttable determination of control under the Regulations;
I. Should circumstances beyond [ ]'s control result in [ ] being placed in a position to direct the management or policies of [ ], then [ ] shall either (1) promptly file a Notice under the Control Act or an Application under the Holding Company Act, as appropriate, and take no affirmative steps to enlarge that control pending either a final determination with respect to the Notice or Application, or (2) promptly reduce the amount of shares of [ ] Voting Stock owned or controlled by [ ] to an amount under 10 percent of any class of Voting Stock or immediately cease any actions that give rise to a conclusive or rebuttable determination of control under the Regulations;
J. By entering into this Agreement and by offering it for reliance in reaching a decision on the request to rebut the presumption of control under the Regulations, as long as 10 percent or more of any class of Voting Stock
K. Any violation of this Agreement shall be deemed to be a violation of the [Control Act or Holding Company Act] and the Regulations, and shall be subject to such remedies and procedures as are provided in the [Control Act or Holding Company Act], as appropriate and the Regulations for a violation thereunder and in addition shall be subject to any such additional remedies and procedures as are provided under any other applicable statutes or regulations for a violation, willful or otherwise, of any agreement entered into with the OCC.
III. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which counterparts collectively shall constitute one instrument representing the Agreement among the parties thereto. It shall not be necessary that any one counterpart be signed by all of the parties hereto as long as each of the parties has signed at least one counterpart.
IV. This Agreement shall be interpreted in a manner consistent with the provisions of the Rules and Regulations of the OCC.
V. This Agreement shall terminate upon (i) clearance by the OCC of [ ]'s Notice under the Control Act to acquire [ ], and consummation of the transaction as described in such Notice, (ii) in the disposition by [ ] of a sufficient number of shares of [ ], or (iii) the taking of such other action that thereafter [ ] is not in control and would not be determined to be in control of [ ] under the Control Act or the Regulations of the OCC as in effect at that time.
VI. IN WITNESS THEREOF, the parties thereto have executed this Agreement by their duly authorized officer.
12 U.S.C. 1735f-7a, 5412(b)(2)(B).
(a)
(b)
For the purposes of this part, the following definitions apply:
(a)
(b)
(1) Made by any lender whose deposits or accounts are insured by any agency of the Federal government;
(2) Made by any lender regulated by any agency of the Federal government;
(3) Made by any lender approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act;
(4) Made in whole or in part by the Secretary of Housing and Urban Development; insured, guaranteed, supplemented, or assisted in any way by the Secretary or any officer or agency of the Federal government, or made under or in connection with a housing or urban development program administered by the Secretary, or a housing or related program administered by any other such officer or agency;
(5) Eligible for purchase by the Federal National Mortgage Association, the Government National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or made by any financial institution from which the loan could be purchased by the Federal Home Loan Mortgage Corporation; or
(6) Made in whole or in part by any entity which:
(i) Regularly extends, or arranges for the extension of, credit payable by agreement in more than four installments or for which the payment of a finance charge is or may be required; and
(ii) Makes or invests in residential real property loans, including loans secured by first liens on residential manufactured homes that aggregate more than $1,000,000 per year; except that the latter requirement shall not apply to such an entity selling residential manufactured homes and providing financing for such sales through loans or credit sales secured by first liens on residential manufactured homes, if the entity has an arrangement to sell such loans or credit sales in whole or in part, or where such loans or credit sales are sold in whole or in part, to a lender or other institution otherwise included in this section.
(c)
(d)
(1) A first security interest in stock or a membership certificate issued to a tenant stockholder or resident member by a cooperative housing organization; and
(2) An assignment of the borrower's interest in the proprietary lease or occupancy agreement issued by such organization.
(e)
(f)
(g)
(h)
(a) The provisions of the constitution or law of any state expressly limiting the rate or amount of interest, discount points, finance charges, or other charges which may be charged, taken, received, or reserved shall not apply to any Federally-related loan:
(1) Made after March 31, 1980; and
(2) Secured by a first lien on:
(i) Residential real property;
(ii) Stock in a residential cooperative housing corporation when the loan is used to finance the acquisition of such stock; or
(iii) A residential manufactured home:
(b) The provisions of paragraph (a) of this section shall apply to loans made in any state on or before the date (after April 1, 1980 and prior to April l, 1983) on which the state adopts a law or certifies that the voters of such state have voted in favor of any law, constitutional or otherwise, which states explicitly and by its terms that such state does not want the provisions of paragraph (a) of this section to apply with respect to loans made in such state, except that—
(1) The provisions of paragraph (a) of this section shall apply to any loan which is made after such date pursuant to a commitment therefore which was entered into during the period beginning on April 1, 1980, and ending on the date the state takes such action;
(2) The provisions of paragraph (a) of this section shall apply to any rollover of a loan which loan was made, or committed to be made, during the period beginning on April 1, 1980, and ending on the date the state takes such action, if the mortgage document or loan note provided that the interest rate to the original borrower could be changed through the use of such a rollover; and
(3) At any time after the date of adoption of these regulations, any state may adopt a provision of law placing limitations on discount points or such other charges on any loan described in this part.
(c) Nothing in this section preempts limitations in state laws on prepayment charges, attorneys' fees, late charges or other provisions designed to protect borrowers.
(a)
(1)
(i) Refinancing or consolidation of the indebtedness;
(ii) Actual prepayment of the indebtedness by the debtor, whether voluntarily or following acceleration of the payment obligation by the creditor; or
(iii) The entry of a judgment for the indebtedness in favor of the creditor.
(2)
(3)
(4)
(b)
(2)
(A)
(B)
(ii) Any interested party may petition the OCC for a determination that state law requirements are more protective of consumers than the provisions of this section. Petitions shall include:
(A) A copy of the state law to be considered;
(B) Copies of any relevant judicial, regulatory, or administrative interpretations of the state law; and
(C) An opinion or memorandum from the state Attorney General or other appropriate state official having primary enforcement responsibilities for the subject state law provision, indicating how the state law to be considered offers greater protection to consumers than the OCC's regulation.
(c)
(1) That portion of the precomputed finance charge which is allocable to all unexpired payment periods as originally scheduled, or if deferred, as deferred. A payment period shall be deemed unexpired if prepayment is made within 15 days after the payment period's scheduled due date. The unearned precomputed finance charge is the total of that which would have been earned for each such period had the loan not been precomputed, by applying to unpaid balances of principal, according to the actuarial method, an annual percentage rate based on those charges which are considered precomputed finance charges in this section, assuming that all payments were made as originally scheduled, or as deferred, if deferred. The creditor, at its option, may round this annual percentage rate to the nearest one-quarter of one percent; or
(2) The total precomputed finance charge less the earned precomputed finance charge. The earned
(d)
(e)
(2)
(f)
(2) To the extent that applicable state law does not provide for a longer period of time, no late charge may be collected on an installment which is paid in full on or before the 15th day after its scheduled or deferred due date even though an earlier maturing installment or a late charge on an earlier installment may not have been paid in full. For purposes of assessing late charges, payments received are deemed to be applied first to current installments.
(3) A late charge may be imposed only once on an installment; however, no such charge may be collected for a late installment which has been deferred.
(4) To the extent that applicable state law does not provide for a lower charge or a longer grace period, a late charge on any installment not paid in full on or before the 15th day after its scheduled or deferred due date may not exceed five percent of the unpaid amount of the installment.
(5) If, at any time after imposition of a late charge, the lender provides the borrower with written notice regarding amounts claimed to be due but unpaid, the notice shall separately state the total of all late charges claimed.
(6) Interest after the final scheduled maturity date may not exceed the maximum rate otherwise allowable under state law for such contracts, and if such interest is charged, no separate late charge may be made on the final scheduled installment.
(g)
(i) Provide, to the extent that applicable state law does not provide for a lower charge, for a charge not exceeding one percent of each installment or part thereof for each month from the date when such installment was due to the date when it is agreed to become payable and proportionately for a part of each month, counting each day as 1/30th of a month;
(ii) Incorporate by reference the transaction to which the deferral applied;
(iii) Disclose each installment or part thereof in the amount to be deferred, the date or dates originally payable, and the date or dates agreed to become payable: and
(iv) Set forth the fact of the deferral charge, the dollar amount of the charge for each installment to be deferred, and the total dollar amount to be paid by the debtor for the privilege of deferring payment.
(2) No term of a writing executed by the debtor shall constitute authority for a creditor unilaterally to grant a deferral with respect to which a charge is to be imposed or collected.
(3) The deferral period is that period of time in which no payment is required or made by reason of the deferral.
(4) Payments received with respect to deferred installments shall be deemed to be applied first to deferred installments.
(5) A charge may not be collected for the deferral of an installment or any part thereof if, with respect to that installment, a refinancing or consolidation agreement is concluded by the parties, or a late charge has been imposed or collected, unless such late charge is refunded to the borrower or credited to the deferral charge.
(h)
(2) The notice in the following form shall state the nature of the default, the action the debtor must take to cure the default, the creditor's intended actions upon failure of the debtor to cure the default, and the debtor's right to redeem under state law.
To:
Date: , 20
Notice of Default and Right To Cure Default
Name, address, and telephone number of creditor
Account number, if any
Brief identification of credit transaction
You are now in default on this credit transaction. You have a right to correct this default within 30 days from the postmarked date of this notice.
If you correct the default, you may continue with the contract as though you did not default. Your default consists of:
Describe default alleged
Creditor's rights: If you do not correct your default in the time allowed, we may exercise our rights against you under the law by (describe action creditor intends to take).
If you have any questions, write (the creditor) at the above address or call (creditor's designated employee) at (telephone number) between the hours of and on (state days of week).
If this default was caused by your failure to make a payment or payments, and you want to pay by mail, please send a check or money order; do not send cash.
The OCC continues to adhere to the views expressed in the formal
(a) Section 501 provides that “the provisions of the constitution or laws of any state expressly limiting the rate or amount of interest, discount points, finance charges, or other charges shall not apply to any” Federally-related loan secured by a first lien on residential real property, a residential manufactured home, or all the stock allocated to a dwelling unit in a residential housing cooperative. 12 U.S.C. 1735f-7 note (Supp. IV 1980). The question has arisen as to whether the Federal statute preempts a state law which deems it a criminal offense to charge interest at a rate in excess of that specified in the state law.
(b) Section 501 preempts all state laws which expressly limit the rate or amount of interest chargeable on a Federally-related residential first mortgage. It does not matter whether the statute in question imposes criminal or civil sanctions; section 501, by its terms, preempts “any” state law which imposes a ceiling on interest rates. The wording of the Federal statute clearly expresses an intent to displace all direct state law restraints on interest. Any state law that conflicts with this Congressional purpose must yield.
12 U.S.C. 1464, 1701j-3, and 5412(b)(2)(B).
(a)
(b)
For the purposes of this part, the following definitions apply:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(1) A security interest in stock or a membership certificate issued to a tenant stockholder or resident member by a cooperative housing organization; and
(2) An assignment of the borrower's interest in the proprietary lease or occupancy agreement issued by such organization.
(j)
(k)
(l)
(m)
(n)
(o)
(p)(1) A
(2) The window-period begins on:
(i) The date a state adopted a law (by means of a constitutional provision or statute) prohibiting the unrestricted exercise of due-on-sale clauses upon outright transfers of property securing loans subject to the state law creating the window-period, or the effective date of a constitutional or statutory provision so adopted, whichever is later; or
(ii) The date on which the highest court of the state rendered a decision prohibiting such unrestricted exercise (or if the highest court has not so decided, the date on which the next highest appellate court rendered a decision resulting in a final judgment which applies statewide), and ends on the earlier of the date such state law prohibition terminated under state law or October 15, 1982.
(3) Categories of state law which create window-periods by prohibiting the unrestricted exercise of due-on-sale clauses upon outright transfers of property securing loans subject to such state law restrictions include laws or judicial decisions which permit the lender to exercise its option under a due-on-sale clause only where:
(i) The lender's security interest or the likelihood of repayment is impaired; or
(ii) The lender is required to accept an assumption of the existing loan without an interest-rate change or with an interest-rate change below the market interest rate currently being offered by the lender on similar loans secured by similar property at the time of the transfer.
(a) With regard to any real property loan originated or to be originated by a Federal savings association, as a matter of contract between it and the borrower, a Federal savings association continues to have the power to include a due-on-sale clause in its loan instrument.
(b) Except as otherwise provided in § 191.5 of this part with respect to any such loan made on the security of a home occupied or to be occupied by the borrower, exercise by any lender of a due-on-sale clause in a loan originated by a Federal savings association shall be exclusively governed by the terms of the loan contract, and all rights and remedies of the lender and borrower shall at all times be fixed and governed by that contract.
(a) With regard to any real property loan originated by a lender other than a Federal savings association, as a matter of contract between it and the borrower, the lender has the power to include a due on sale clause in its loan instrument.
(b) Except as otherwise provided in paragraph (c) of this section and § 191.5 of this part, the exercise of due-on-sale clauses in loans originated by lenders other than Federal savings associations shall be governed exclusively by the terms of the loan contract, and all rights and remedies of the lender and the borrower shall be fixed and governed by that contract.
(c)(1) In the case of a window-period loan, the provisions of paragraph (b) of this section shall apply only in the case of a sale or transfer of the property subject to the real property loan and only if such sale or transfer occurs on or after October 15, 1985:
(i) With respect to real property loans originated in a state by lenders other than national banks, Federal savings associations, and Federal credit unions, a state may otherwise regulate such contracts by state law enacted prior to October 16, 1985, in which case paragraph (b) of this section shall apply only if such state law so provides; and
(ii) With respect to real property loans originated by national banks and Federal credit unions, the OCC or the National Credit Union Administration Board, respectively, may otherwise regulate such contracts by regulations promulgated prior to October 16, 1985, in which case paragraph (b) of this section shall apply only if such regulation so provides.
(2) A lender may not exercise its options pursuant to a due-on-sale clause contained in a window-period loan in the case of a sale or transfer of property securing such loan where the sale or transfer occurred prior to October 15, 1982.
(d)(1) Prior to the sale or transfer of property securing a window-period loan subject to the provisions of paragraph (c) of this section.
(i) Any lender in the business of making real property loans may require any successor or transferee of the borrower to supply credit information customarily required by the lender in connection with credit applications, to complete its customary credit application, and to meet customary credit standards applied by such lender, at the date of sale or transfer, to the lender's similar loans secured by similar property.
(ii) Any lender not in the business of making loans may require any successor or transferee of the borrower to meet credit standards customarily applied by other similarly situated lenders or sellers in the geographic market within which the transaction occurs, for similar loans secured by similar property, prior to the lender's consent to the transfer.
(2) The lender may exercise a due-on-sale clause in a window-period loan if:
(i) The successor or transferee of the borrower fails to meet the lender's credit standards as set forth in paragraphs (b)(1)(i) and (b)(1)(ii) of this section; or
(ii) Upon transfer of the security property and not later than fifteen days after written request by the lender, the successor or transferee of the borrower fails to provide information requested by the lender pursuant to paragraph (d)(1)(i) or (d)(1)(ii) of this section, to determine whether such successor or transferee of the borrower meets the lender's customary credit standards.
(3) The lender shall, within thirty days of receipt of a completed credit application and any other related information provided by the successor or transferee of the borrower, determine whether such successor or transferee meets the customary credit standards of the lender and provide written notice to the successor or transferee of its decision, and the reasons in the event of a disapproval. Failure of the lender to provide such notice shall preclude the lender from exercise of its due-on-sale clause upon the sale or transfer of the property securing the loan.
(4) The lender's right to exercise a due-on-sale clause pursuant to this paragraph (d)(4) is in addition to any other rights afforded the lender by state law regulating window-period loans with regard to the exercise of due-on-sale clauses and loan assumptions.
(a)
(b)
(1) A lender shall not (except with regard to a reverse mortgage) exercise its option pursuant to a due-on-sale clause upon:
(i) The creation of a lien or other encumbrance subordinate to the lender's security instrument which does not relate to a transfer of rights of occupancy in the property:
(ii) The creation of a purchase-money security interest for household appliances;
(iii) A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(iv) The granting of a leasehold interest which has a term of three years or less and which does not contain an option to purchase (that is, either a lease of more than three years or a lease with an option to purchase will allow the exercise of a due-on-sale clause);
(v) A transfer, in which the transferee is a person who occupies or will occupy the property, which is:
(A) A transfer to a relative resulting from the death of the borrower;
(B) A transfer where the spouse or child(ren) becomes an owner of the property; or
(C) A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an owner of the property; or
(vi) A transfer into an inter vivos trust in which the borrower is and remains the beneficiary and occupant of the property, unless, as a condition precedent to such transfer, the borrower refuses to provide the lender with reasonable means acceptable to the lender by which the lender will be assured of timely notice of any subsequent transfer of the beneficial interest or change in occupancy.
(2) A lender shall not impose a prepayment penalty or equivalent fee when the lender or party acting on behalf of the lender.
(i) Declares by written notice that the loan is due pursuant to a due-on-sale clause or
(ii) Commences a judicial or nonjudicial foreclosure proceeding to enforce a due-on-sale clause or to seek payment in full as a result of invoking such clause.
(3) A lender shall not impose a prepayment penalty or equivalent fee when the lender or party acting on behalf of the lender fails to approve within 30 days the completed credit application of a qualified transferee of the security property to assume the loan in accordance with the terms of the loan, and thereafter the borrower transfers the security property to such transferee and prepays the loan in full within 120 days after receipt by the lender of the completed credit application. For purposes of this paragraph (b)(3), a
(4) A lender waives its option to exercise a due-on-sale clause as to a specific transfer if, before the transfer, the lender and the existing borrower's prospective successor in interest agree in writing that the successor in interest will be obligated under the terms of the loan and that interest on sums secured by the lender's security interest will be payable at a rate the lender shall request. Upon such agreement and resultant waiver, a lender shall release the existing borrower from all obligations under the loan instruments, and the lender is deemed to have made a new loan to the existing borrower's successor in interest. The waiver and release apply to all loans secured by homes occupied by borrowers made by a Federal savings association after July 31, 1976, and to all loans secured by homes occupied by borrowers made by other lenders after the effective date of this regulation.
(5) Nothing in paragraph (b)(1) of this section shall be construed to restrict a lender's right to enforce a due-on-sale clause upon the subsequent occurrence of any event which disqualifies a transfer for a previously-applicable exception under that paragraph (b)(1).
(c)
The OCC periodically will publish Interpretations under section 341 of the Garn-St Germain Depository Institutions Act of 1982, Public Law 97-320, 96 Stat. 1469, 1505-1507, in the Federal Register in response to written requests sent to the OCC.
12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901, 5412(b)(2)(B); 15 U.S.C. 78c, 78
(a)
(b)
(c)
(1) Specifies the requirement(s) or provision(s) you want the appropriate Federal banking agency to waive;
(2) Demonstrates that the waiver is equitable; is not detrimental to you, your account holders, or other savings associations; and is not contrary to the public interest; and
(3) Includes an opinion of counsel demonstrating that applicable law does not conflict with the requirement or provision.
You may convert to the stock form of ownership as part of a transaction where you organize a holding company to acquire all of your shares upon their issuance. In such a transaction, your holding company will offer rights to purchase its shares instead of your shares. Regulations of the Board of Governors of the Federal Reserve System address holding company application requirements.
When you convert to the stock form, you may form a charitable organization. Your contributions to the charitable organization are governed by the requirements of §§ 192.550 through 192.575.
When you convert to stock form, you may acquire for cash or stock another insured depository institution that is already in the stock form of ownership.
The following definitions apply to this part and the forms prescribed under this part:
(1) A corporation or organization (other than you or your majority-owned subsidiaries), if the person is a senior officer or partner, or beneficially owns, directly or indirectly, 10 percent or more of any class of equity securities of the corporation or organization.
(2) A trust or other estate, if the person has a substantial beneficial interest in the trust or estate or is a trustee or fiduciary of the trust or estate. For purposes of §§ 192.370, 192.380, 192.385, 192.390, 192.395 and 192.505, a person who has a substantial beneficial interest in your tax-qualified or non-tax-qualified employee stock benefit plan, or who is a trustee or a fiduciary of the plan, is not an associate of the plan. For the purposes of § 192.370, your tax-qualified employee stock benefit plan is not an associate of a person.
(3) Any person who is related by blood or marriage to such person and:
(i) Who lives in the same home as the person; or
(ii) Who is your director or senior officer, or a director or senior officer of your holding company or your subsidiary.
(1) Every county, parish, or similar governmental subdivision in which you have a home or branch office;
(2) Each county's, parish's, or subdivision's metropolitan statistical area;
(3) All zip code areas in your Community Reinvestment Act assessment area; and
(4) Any other area or category you set out in your plan of conversion, as approved by the appropriate Federal banking agency.
(1) Eligible account holders under § 192.355;
(2) Tax-qualified employee stock ownership plans under § 192.380;
(3) Supplemental eligible account holders under § 192.355; and
(4) Other voting members under § 192.365.
(a) Your board, or a subcommittee of your board, must meet with the appropriate Federal banking agency before you pass your plan of conversion. The meeting may occur at the appropriate Federal banking agency or your offices at your option. At that meeting you must provide the appropriate Federal banking agency with a written strategic plan that outlines the objectives of the proposed conversion and the intended use of the conversion proceeds.
(b) You should also consult with the appropriate Federal banking agency before you file your application for conversion. The appropriate Federal banking agency will discuss the information that you must include in the application for conversion, general issues that you may confront in the conversion process, and any other pertinent issues.
(a) Prior to filing an application for conversion, you must adopt a business plan reflecting your intended plans for deployment of the proposed conversion proceeds. Your business plan is required, under § 192.150, to be included in your conversion application. At a minimum, your business plan must address:
(1) Your projected operations and activities for three years following the conversion. You must describe how you will deploy the conversion proceeds at the converted savings association (and holding company, if applicable), what opportunities are available to reasonably achieve your planned deployment of conversion proceeds in your proposed market areas, and how your deployment will provide a reasonable return on investment commensurate with investment risk, investor expectations, and industry norms, by the final year of the business plan. You must include three years of projected financial statements. The business plan must provide that the converted savings association must retain at least 50 percent of the net conversion proceeds. The appropriate Federal banking agency may require that a larger percentage of proceeds remain in the institution.
(2) Your plan for deploying conversion proceeds to meet credit and lending needs in your proposed market areas. The appropriate Federal banking agencies strongly discourage business plans that provide for a substantial investment in mortgage securities or other securities, except as an interim measure to facilitate orderly, prudent deployment of proceeds during the three years following the conversion, or as part of a properly managed leverage strategy.
(3) The risks associated with your plan for deployment of conversion proceeds, and the effect of this plan on management resources, staffing, and facilities.
(4) The expertise of your management and board of directors, or that you have planned for adequate staffing and controls to prudently manage the growth, expansion, new investment, and other operations and activities proposed in your business plan.
(b) You may not project returns of capital or special dividends in any part of the business plan. A newly converted company may not plan on stock repurchases in the first year of the business plan.
(a) Your chief executive officer and members of the board of directors must review, and at least two-thirds of your board of directors must approve, the business plan.
(b) Your chief executive officer and at least two-thirds of the board of directors must certify that the business plan accurately reflects the intended plans for deployment of conversion proceeds, and that any new initiatives reflected in the business plan are reasonably achievable. You must submit these certifications with your business plan, as part of your conversion application under § 192.150.
(a) The appropriate Federal banking agency will review your business plan to determine that it demonstrates a safe and sound deployment of conversion proceeds, as part of its review of your conversion application. In making its determination, the appropriate Federal banking agency will consider how you have addressed the applicable factors of § 192.105. No single factor will be determinative.
(b) If you are a Federal savings association, you must file your business plan with the appropriate OCC licensing office. If you are a state savings association, you must file your business plan with the appropriate FDIC region. The appropriate Federal banking agency may request additional information, if necessary, to support its determination under paragraph (a) of this section. You must file your business plan as a confidential exhibit to the Form AC.
(c) If the appropriate Federal banking agency approves your application for conversion and you complete your conversion, you must operate within the parameters of your business plan. You must obtain the prior written approval of the appropriate Federal banking agency for any material deviations from your business plan.
(a) You may discuss information about your conversion with individuals that you authorize to prepare documents for your conversion.
(b) Except as permitted under paragraph (a) of this section, you must keep all information about your conversion confidential until your board of directors adopts your plan of conversion.
(c) If you violate this section, the appropriate Federal banking agency may require you to take remedial action. For example, the appropriate Federal banking agency may require you to take any or all of the following actions:
(1) Publicly announce that you are considering a conversion;
(2) Set an eligibility record date acceptable to the appropriate Federal banking agency;
(3) Limit the subscription rights of any person who violates or aids a violation of this section; or
(4) Take any other action to assure that your conversion is fair and equitable.
Prior to filing an application for conversion, your board of directors must adopt a plan of conversion that conforms to §§ 192.320 through 192.485 and 192.505. Your board of directors must adopt the plan by at least a two-thirds vote. Your plan of conversion is required, under § 192.150, to be included in your conversion application.
You must include the information included in §§ 192.320 through 192.485 and 192.505 in your plan of conversion. The appropriate Federal banking agency may require you to delete or revise any provision in your plan of conversion if it determines the provision is inequitable; is detrimental to you, your account holders, or other savings associations; or is contrary to public interest.
(a)
(b)
(1) Your board of directors adopted a proposed plan to convert from a mutual to a stock savings institution.
(2) You will send your members a proxy statement with detailed information on the proposed conversion before you convene a members' meeting to vote on the conversion.
(3) Your members will have an opportunity to approve or disapprove the proposed conversion at a meeting. At least a majority of the eligible votes must approve the conversion.
(4) You will not vote existing proxies to approve or disapprove the conversion. You will solicit new proxies for voting on the proposed conversion.
(5) The appropriate Federal banking agency, and in the case of a state-chartered savings association, the appropriate state regulator, must approve the conversion before the conversion will be effective. Your members will have an opportunity to file written comments, including objections and materials supporting the objections, with the appropriate Federal banking agency.
(6) The IRS must issue a favorable tax ruling, or a tax expert must issue an appropriate tax opinion, on the tax consequences of your conversion before the appropriate Federal banking agency will approve the conversion. The ruling or opinion must indicate the conversion will be a tax-free reorganization.
(7) The appropriate Federal banking agency, and in the case of a state-chartered savings association, the appropriate state regulator, might not approve the conversion, and the IRS or a tax expert might not issue a favorable tax ruling or tax opinion.
(8) Savings account holders will continue to hold accounts in the converted savings association with the same dollar amounts, rates of return, and general terms as existing deposits. FDIC will continue to insure the accounts.
(9) Your conversion will not affect borrowers' loans, including the amount, rate, maturity, security, and other contractual terms.
(10) Your business of accepting deposits and making loans will continue without interruption.
(11) Your current management and staff will continue to conduct current services for depositors and borrowers under current policies and in existing offices.
(12) You may continue to be a member of the Federal Home Loan Bank System.
(13) You may substantively amend your proposed plan of conversion before the members' meeting.
(14) You may terminate the proposed conversion.
(15) After the appropriate Federal banking agency, and in the case of a state-chartered savings association, the appropriate state regulator, approves the proposed conversion, you will send proxy materials providing additional information. After you send proxy materials, members may telephone or write to you with additional questions.
(16) The proposed record date for determining the eligible account holders who are entitled to receive subscription rights to purchase your shares.
(17) A brief description of the circumstances under which supplemental eligible account holders will receive subscription rights to purchase your shares.
(18) A brief description of how voting members may participate in the conversion.
(19) A brief description of how directors, officers, and employees will participate in the conversion.
(20) A brief description of the proposed plan of conversion.
(21) The par value (if any) and approximate number of shares you will issue and sell in the conversion.
(c)
(2) If you respond to inquiries about the conversion, you may address only the matters listed in paragraph (b) of this section.
You may amend your plan of conversion before you solicit proxies. After you solicit proxies, you may amend your plan of conversion only if the appropriate Federal banking agency concurs.
(a) Your application for conversion must include all of the following information.
(1) Your plan of conversion.
(2) Pricing materials meeting the requirements of § 192.200(b).
(3) Proxy soliciting materials under § 192.270, including:
(i) A preliminary proxy statement with signed financial statements;
(ii) A form of proxy meeting the requirements of § 192.255; and
(iii) Any additional proxy soliciting materials, including press releases, personal solicitation instructions, radio or television scripts that you plan to use or furnish to your members, and a legal opinion indicating that any marketing materials comply with all applicable securities laws.
(4) An offering circular described in § 192.300.
(5) The documents and information required by Form AC. You may obtain Form AC from the appropriate Federal banking agency.
(6) Where indicated, written consents, signed and dated, of any accountant, attorney, investment banker, appraiser, or other professional who prepared, reviewed, passed upon, or certified any statement, report, or valuation for use.
(7) Your business plan, submitted as a separately bound, confidential exhibit.
(8) Any additional information that the appropriate Federal banking agency requests.
(b) The appropriate Federal banking agency will not accept for filing, and will return, any application for conversion that is improperly executed, materially deficient, substantially incomplete, or that provides for unreasonable conversion expenses.
If you are a Federal savings association, you must file an original and at least one conformed copy of Form AC with the appropriate OCC licensing office. If you are a state savings association, you must file all copies of your application with the appropriate FDIC region.
(a) The appropriate Federal banking agency makes all filings under this part available to the public, but may keep portions of your application for conversion confidential under paragraph (b) of this section.
(b) You may request that the appropriate Federal banking agency keep portions of your application confidential. To do so, you must separately bind and clearly designate as “confidential” any portion of your application for conversion that you deem confidential. You must provide a written statement specifying the grounds supporting your request for confidentiality. The appropriate Federal banking agency will not treat as confidential the portion of your application describing how you plan to meet your Community Reinvestment Act (CRA) objectives. The CRA portion of your application may not incorporate by reference information contained in the confidential portion of your application.
(c) The appropriate Federal banking agency will determine whether confidential information must be made available to the public under 5 U.S.C. 552 and part 4 of this chapter or 12 CFR 309. The appropriate Federal banking agency will advise you before it makes information you designated as “confidential” available to the public.
To amend your application for conversion, you must:
(a) File an amendment with an appropriate facing sheet;
(b) Number each amendment consecutively;
(c) Respond to all issues raised by the appropriate Federal banking agency; and
(d) Demonstrate that the amendment conforms to all applicable regulations.
(a) You must publish a public notice of the application in accordance with the procedures in subpart B of part 116 of this chapter. You must simultaneously prominently post the notice in your home office and all branch offices.
(b) Promptly after publication, you must file any public notice and an affidavit of publication from each publisher. If you are a Federal savings association, you must file the affidavit and two copies of any public notice with the appropriate OCC licensing office. If you are a state savings association, you must file all copies with the appropriate FDIC region.
(c) If the appropriate Federal banking agency does not accept your application for conversion under § 192.200 and requires you to file a new application, you must publish and post a new notice and allow an additional 30 days for comment.
Commenters may submit comments on your application in accordance with the procedures in subpart C of part 116 of this chapter. A commenter must file the original and one copy of any comments with the appropriate OCC licensing office for Federal savings association applications and with the appropriate FDIC region for state savings association applications.
(a) The appropriate Federal banking agency may approve your application for conversion only if:
(1) Your conversion complies with this part;
(2) You will meet your regulatory capital requirements under part 167 of this chapter after the conversion; and
(3) Your conversion will not result in a taxable reorganization under the Internal Revenue Code of 1986, as amended.
(b) The appropriate Federal banking agency will review the appraisal required by § 192.150(a)(2) in determining whether to approve your application. The appropriate Federal banking agency will review the appraisal under the following requirements.
(1) Independent persons experienced and expert in corporate appraisal, and acceptable to the appropriate Federal banking agency, must prepare the appraisal report.
(2) An affiliate of the appraiser may serve as an underwriter or selling agent, if you ensure that the appraiser is separate from the underwriter or selling agent affiliate and the underwriter or selling agent affiliate does not make recommendations or affect the appraisal.
(3) The appraiser may not receive any fee in connection with the conversion other than for appraisal services.
(4) The appraisal report must include a complete and detailed description of the elements of the appraisal, a justification for the appraisal methodology, and sufficient support for the conclusions.
(5) If the appraisal is based on a capitalization of your pro forma income, it must indicate the basis for determining the income to be derived from the sale of shares, and demonstrate that the earnings multiple used is appropriate, including future earnings growth assumptions.
(6) If the appraisal is based on a comparison of your shares with outstanding shares of existing stock associations, the existing stock associations must be reasonably comparable in size, market area, competitive conditions, risk profile, profit history, and expected future earnings.
(7) The appropriate Federal banking agency may decline to process the application for conversion and deem it materially deficient or substantially incomplete if the initial appraisal report is materially deficient or substantially incomplete.
(8) You may not represent or imply that the appropriate Federal banking agency approved the appraisal.
(c) The appropriate Federal banking agency will review your compliance record under part 195 of this chapter and your business plan to determine how you will serve the convenience and needs of your communities after the conversion.
(1) Based on this review, the appropriate Federal banking agency may approve your application, deny your application, or approve your application on the condition that you will improve your CRA performance or that you will address the particular credit or lending needs of the communities that you will serve.
(2) The appropriate Federal banking agency may deny your application if your business plan does not demonstrate that your proposed use of conversion proceeds will help you to meet the credit and lending needs of the communities that you will serve.
(d) The appropriate Federal banking agency may request that you amend your application if further explanation is necessary, material is missing, or material must be corrected.
(e) The appropriate Federal banking agency will deny your application if the application does not meet the requirements of this subpart, unless The appropriate Federal banking agency waives the requirement under § 192.5(c).
(a) Any person aggrieved by the appropriate Federal banking agency's final action on your application for conversion may ask the court of appeals of the United States for the circuit in which the principal office or residence of such person is located, or the U.S. Court of Appeals for the District of Columbia Circuit, to review the action under 12 U.S.C. 1464(i)(2)(B).
(b) To obtain court review of the action, this statute requires the aggrieved person to file a written petition requesting that the court modify, terminate, or set aside the final appropriate Federal banking agency action. The aggrieved person must file the petition with the court within the later of 30 days after the appropriate Federal agency publishes notice of its final action in the Federal Register or 30 days after you mail the proxy statement to your members under § 192.235.
(a) After the appropriate Federal banking agency approves your plan of conversion, you must submit your plan of conversion to your members for approval. You must obtain this approval at a meeting of your members, which may be a special or annual meeting, unless you are a state-chartered savings association and state law requires you to obtain approval at an annual meeting.
(b) Your members must approve your plan of conversion by a majority of the total outstanding votes, unless you are a state-chartered savings association and state law prescribes a higher percentage.
(c) Your members may vote in person or by proxy.
(d) You may notify eligible account holders or supplemental eligible account holders who are not voting members of your proposed conversion. You may include only the information in § 192.135 in your notice.
You determine members' eligibility to vote by setting a voting record date. You must set a voting record date that is not more than 60 days nor less than 20 days before your meeting, unless you are a state-chartered savings association and state law requires a different voting record date.
(a) You must notify your members of the meeting to consider your conversion by sending the members a proxy statement cleared by the appropriate Federal banking agency.
(b) You must notify your members 20 to 45 days before your meeting, unless you are a state-chartered savings association and state law requires a different notice period.
(c) You must also notify each beneficial holder of an account held in a fiduciary capacity:
(1) If you are a Federal savings association, and the name of the beneficial holder is disclosed on your records; or
(2) If you are a state-chartered association and the beneficial holder possesses voting rights under state law.
(a) Promptly after the members' meeting, you must file all of the following information with the appropriate OCC licensing office if you are a Federal savings association, and with the appropriate FDIC region if you are a state savings association.
(1) A certified copy of each adopted resolution on the conversion.
(2) The total votes eligible to be cast.
(3) The total votes represented in person or by proxy.
(4) The total votes cast in favor of and against each matter.
(5) The percentage of votes necessary to approve each matter.
(6) An opinion of counsel that you conducted the members' meeting in compliance with all applicable state or Federal laws and regulations.
(b) Promptly after completion of the conversion, you must submit an opinion of counsel that you complied with all laws applicable to the conversion.
(a) You must comply with these proxy solicitation provisions when you provide proxy solicitation material to members for the meeting to vote on your plan of conversion.
(b) Your members must comply with these proxy solicitation provisions when they provide proxy solicitation materials to members for the meeting to vote on your conversion, pursuant to § 192.280, except where:
(1) The member solicits 50 people or fewer and does not solicit proxies on your behalf; or
(2) The member solicits proxies through newspaper advertisements after your board of directors adopts the plan of conversion. Any newspaper advertisements may include only the following information:
(i) Your name;
(ii) The reason for the advertisement;
(iii) The proposal or proposals to be voted upon;
(iv) Where a member may obtain a copy of the proxy solicitation material; and
(v) A request for your members to vote at the meeting.
The form of proxy must include all of the following:
(a) A statement in bold face type stating that management is soliciting the proxy.
(b) Blank spaces where the member must date and sign the proxy.
(c) Clear and impartial identification of each matter or group of related matters that members will vote upon. You must include any proposed charitable contribution as an item to be voted on separately.
(d) The phrase “Revocable Proxy” in bold face type (at least 18 point).
(e) A description of any charter or state law requirement that restricts or conditions votes by proxy.
(f) An acknowledgment that the member received a proxy statement before he or she signed the form of proxy.
(g) The date, time, and the place of the meeting, when available.
(h) A way for the member to specify by ballot whether he or she approves or disapproves of each matter that members will vote upon.
(i) A statement that management will vote the proxy in accordance with the member's specifications.
(j) A statement in bold face type indicating how management will vote the proxy if the member does not specify a choice for a matter.
You may not use previously executed proxies for the plan of conversion vote.
You may vote a proxy obtained under this part on matters that are incidental to the conduct of the meeting. You may not vote a proxy obtained under this subpart at any meeting other than the meeting (or any adjournment of the meeting) to vote on your plan of conversion.
(a)
(b)
(2) You must provide a cleared written proxy statement to your members before or at the same time you provide any other soliciting material. You must mail cleared proxy solicitation material to your members within ten days after the appropriate Federal banking agency clears the solicitation.
(a) You must file revised proxy materials as an amendment to your application for conversion.
(b) To revise your proxy solicitation materials, you must file:
(1) Seven copies of your revised proxy materials as required by Form PS;
(2) Seven copies of your revised form of proxy, if applicable; and
(3) Seven copies of any additional proxy solicitation material subject to § 192.270.
(c) You must mark four of the seven required copies to clearly indicate changes from the prior filing.
(d) You must file seven definitive copies of all proxy solicitation material, in the form in which you furnish the material to your members. You must file no later than the date that you send or give the proxy solicitation material to your members. You must indicate the date that you will release the materials.
(e) Unless the appropriate Federal banking agency requests you to do so, you do not have to file copies of replies to inquiries from your members or copies of communications that merely request members to sign and return proxy forms.
(a) You must mail the member's cleared proxy solicitation material if:
(1) Your board of directors adopted a plan of conversion;
(2) A member requests in writing that you mail the proxy solicitation material;
(3) The appropriate Federal banking agency has cleared the member's proxy solicitation; and
(4) The member agrees to defray your reasonable expenses.
(b) As soon as practicable after you receive a request under paragraph (a) of this section, you must mail or otherwise furnish the following information to the member:
(1) The approximate number of members that you solicited or will solicit, or the approximate number of members of any group of account holders that the member designates; and
(2) The estimated cost of mailing the proxy solicitation material for the member.
(c) You must mail cleared proxy solicitation material to the designated members promptly after the member furnishes the materials, envelopes (or other containers), and postage (or payment for postage) to you.
(d) You are not responsible for the content of a member's proxy solicitation material.
(e) A member may furnish other members its own proxy solicitation material, cleared by the appropriate Federal banking agency, subject to the rules in this section.
(a)
(i) Is false or misleading with respect to any material fact;
(ii) Omits any material fact that is necessary to make the statements not false or misleading; or
(iii) Omits any material fact that is necessary to correct a statement in an earlier communication that has become false or misleading.
(2) No one may represent or imply that the appropriate Federal banking agency determined that the proxy solicitation material is accurate, complete, not false or not misleading, or passed upon the merits of or approved any proposal.
(b)
(1) An undated or post-dated proxy;
(2) A proxy that states it will be dated after the date it is signed by a member;
(3) A proxy that is not revocable at will by the member; or
(4) A proxy that is part of another document or instrument.
(a) If a solicitation violates § 192.285, the appropriate Federal banking agency may require remedial measures, including:
(1) Correction of the violation by a retraction and a new solicitation;
(2) Rescheduling the members' meeting; or
(3) Any other actions necessary to ensure a fair vote.
(b) The appropriate Federal banking agency may also bring an enforcement action against the violator.
If you amend your application for conversion, the appropriate Federal banking agency may require you to re-solicit proxies for your members' meeting as a condition of approval of the amendment.
(a) You must prepare and file your offering circular with the Securities and Corporate Practices Division of the OCC if you are a Federal savings association and with the appropriate FDIC region if you are a state savings association, in compliance with this part and Form OC and, where applicable, part 197 of this chapter. File your offering circular in accordance with the procedures in section 192.155.
(b) You must condition your stock offering upon member approval of your plan of conversion.
(c) The appropriate Federal banking agency will review the Form OC and may comment on the included disclosures and financial statements.
(d) You must file any revised offering circular, final offering circular, and any post-effective amendment to the final offering circular in accordance with the procedures in section 192.155.
(e) The appropriate Federal banking agency will not approve the adequacy or accuracy of the offering circular or the disclosures.
(f) After you satisfactorily address the appropriate Federal banking agency's concerns, you must request the
(a) You may distribute a preliminary offering circular at the same time as or after you mail the proxy statement to your members.
(b) You may not distribute an offering circular until the appropriate Federal banking agency declares it effective. You must distribute the offering circular in accordance with this part.
(c) You must distribute your offering circular to persons listed in your plan of conversion within 10 days after the appropriate Federal banking agency declares it effective.
(a) You must file a post-effective amendment to the offering circular with the appropriate Federal banking agency when a material event or change of circumstance occurs.
(b) After the appropriate Federal banking agency declares the post-effective amendment effective, you must immediately deliver the amendment to each person who subscribed for or ordered shares in the offering.
(c) Your post-effective amendment must indicate that each person may increase, decrease, or rescind their subscription or order.
(d) The post-effective offering period must remain open no less than 10 days nor more than 20 days, unless the appropriate Federal banking agency approves a longer rescission period.
You must offer to sell your shares in the following order:
(a) Eligible account holders.
(b) Tax-qualified employee stock ownership plans.
(c) Supplemental eligible account holders.
(d) Other voting members who have subscription rights.
(e) Your community, your community and the general public, or the general public.
(a) You may offer to sell your conversion shares after the appropriate Federal banking agency approves your conversion, clears your proxy statement, and declares your offering circular effective.
(b) The offer may commence at the same time you start the proxy solicitation of your members.
(a) You must sell your conversion shares at a uniform price per share and at a total price that is equal to the estimated pro forma market value of your shares after you convert.
(b) The maximum price must be no more than 15 percent above the midpoint of the estimated price range in your offering circular.
(c) The minimum price must be no more than 15 percent below the midpoint of the estimated price range in your offering circular.
(d) If the appropriate Federal banking agency permits, you may increase the maximum price of conversion shares sold. The maximum price, as adjusted, must be no more than 15 percent above the maximum price computed under paragraph (b) of this section.
(e) The maximum price must be between $5 and $50 per share.
(f) You must include the estimated price in any preliminary offering circular.
(a) You must distribute order forms to all eligible account holders, supplemental eligible account holders, and other voting members to enable them to subscribe for the conversion shares they are permitted under the plan of conversion. You may either send the order forms with your offering circular or after you distribute your offering circular.
(b) You may sell your conversion shares in a community offering, a public offering, or both. You may begin the community offering, the public offering, or both at any time during the subscription offering or upon conclusion of the subscription offering.
(c) You may pay underwriting commissions (including underwriting discounts). The appropriate Federal banking agency may object to the payment of unreasonable commissions. You may reimburse an underwriter for accountable expenses in a subscription offering if the public offering is limited. If no public offering occurs, you may pay an underwriter a consulting fee. The appropriate Federal banking agency may object to the payment of unreasonable consulting fees.
(d) If you conduct the community offering, the public offering, or both at the same time as the subscription offering, you must fill all subscription orders first.
(e) You must prepare your order form in compliance with this part and Form OF.
(a) In connection with offers, sales, or purchases of conversion shares under this part, you and your directors, officers, agents, or employees may not:
(1) Employ any device, scheme, or artifice to defraud;
(2) Obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary to make the statements, in light of the circumstances under which they were made, not misleading; or
(3) Engage in any act, transaction, practice, or course of business that operates or would operate as a fraud or deceit upon a purchaser or seller.
(b) During your conversion, no person may:
(1) Transfer, or enter into any agreement or understanding to transfer, the legal or beneficial ownership of subscription rights for your conversion shares or the underlying securities to the account of another;
(2) Make any offer, or any announcement of an offer, to purchase any of your conversion shares from anyone but you; or
(3) Knowingly acquire more than the maximum purchase allowable under your plan of conversion.
(c) The restrictions in paragraphs (b)(1) and (b)(2) of this section do not apply to offers for more than 10 percent of any class of conversion shares by:
(1) An underwriter or a selling group, acting on your behalf, that makes the offer with a view toward public resale; or
(2) One or more of your tax-qualified employee stock ownership plans so long as the plan or plans do not beneficially own more than 25 percent of any class of your equity securities in the aggregate.
(d) If any person is found to have violated the restrictions in paragraphs (b)(1) and (b)(2) of this section, they may face prosecution or other legal action.
(a) A subscriber may purchase conversion shares with cash, by a withdrawal from a savings account, or a withdrawal from a certificate of deposit. If a subscriber purchases shares by a withdrawal from a certificate of deposit, you may not assess a penalty for the withdrawal.
(b) You may not extend credit to any person to purchase your conversion shares.
(a) You must pay interest from the date you receive a payment for conversion shares until the date you complete or terminate the conversion. You must pay interest at no less than your passbook rate for amounts paid in cash, check, or money order.
(b) If a subscriber withdraws money from a savings account to purchase conversion shares, you must pay interest on the payment until you complete or terminate the conversion as if the withdrawn amount remained in the account.
(c) If a depositor fails to maintain the applicable minimum balance requirement because he or she withdraws money from a certificate of deposit to purchase conversion shares, you may cancel the certificate and pay interest at no less than your passbook rate on any remaining balance.
(a) You must give each eligible account holder subscription rights to purchase conversion shares in an amount equal to the greater of:
(1) The maximum purchase limitation established for the community offering or the public offering under § 192.395;
(2) One-tenth of one percent of the total stock offering; or
(3) Fifteen times the following number: The total number of conversion shares that you will issue, multiplied by the following fraction. The numerator is the total qualifying deposit of the eligible account holder. The denominator is the total qualifying deposits of all eligible account holders. You must round down the product of this multiplied fraction to the next whole number.
(b) You must give subscription rights to purchase shares to each supplemental eligible account holder in the same amount as described in paragraph (a) of this section, except that you must compute the fraction described in paragraph (a)(3) of this section as follows: The numerator is the total qualifying deposit of the supplemental eligible account holder. The denominator is the total qualifying deposits of all supplemental eligible account holders.
Your officers, directors, and their associates may be eligible account holders. However, if an officer, director, or his or her associate receives subscription rights based on increased deposits in the year before the eligibility record date, you must subordinate subscription rights for these deposits to subscription rights exercised by other eligible account holders.
(a) You must give rights to purchase your conversion shares in the conversion to voting members who are neither eligible account holders nor supplemental eligible account holders. You must allocate rights to each voting member that are equal to the greater of:
(1) The maximum purchase limitation established for the community offering and the public offering under § 192.395; or
(2) One-tenth of one percent of the total stock offering.
(b) You must subordinate the voting members' rights to the rights of eligible account holders, tax-qualified employee stock ownership plans, and supplemental eligible account holders.
(a) When you convert, your officers, directors, and their associates may not purchase, in the aggregate, more than the following percentage of your total stock offering:
(b) The purchase limitations in this section do not apply to shares held in tax-qualified employee stock benefit plans that are attributable to your officers, directors, and their associates.
(a) If your conversion shares are oversubscribed by your eligible account holders, you must allocate shares among the eligible account holders so that each, to the extent possible, may purchase 100 shares.
(b) If your conversion shares are oversubscribed by your supplemental eligible account holders, you must allocate shares among the supplemental eligible account holders so that each, to the extent possible, may purchase 100 shares.
(c) If a person is an eligible account holder and a supplemental eligible account holder, you must include the eligible account holder's allocation in determining the number of conversion shares that you may allocate to the person as a supplemental eligible account holder.
(d) For conversion shares that you do not allocate under paragraphs (a) and (b) of this section, you must allocate the shares among the eligible or supplemental eligible account holders equitably, based on the amounts of qualifying deposits. You must describe this method of allocation in your plan of conversion.
(e) If shares remain after you have allocated shares as provided in paragraphs (a) and (b) of this section, and if your voting members oversubscribe, you must allocate your conversion shares among those members equitably. You must describe
(a) Your tax-qualified employee stock ownership plan may purchase up to 10 percent of the total offering of your conversion shares.
(b) If the appropriate Federal banking agency approves a revised stock valuation range as described in § 192.330(e), and the final conversion stock valuation range exceeds the former maximum stock offering range, you may allocate conversion shares to your tax-qualified employee stock ownership plan, up to the 10 percent limit in paragraph (a) of this section.
(c) If your tax-qualified employee stock ownership plan is not able to or chooses not to purchase stock in the offering, it may, with prior appropriate Federal banking agency approval and appropriate disclosure in your offering circular, purchase stock in the open market, or purchase authorized but unissued conversion shares.
(d) You may include stock contributed to a charitable organization in the conversion in the calculation of the total offering of conversion shares under paragraphs (a) and (b) of this section, unless the appropriate Federal banking agency objects on supervisory grounds.
(a) You may limit the number of shares that any person, group of associated persons, or persons otherwise acting in concert, may subscribe to up to five percent of the total stock sold.
(b) If you set a limit of five percent under paragraph (a) of this section, you may modify that limit with appropriate Federal banking agency approval to provide that any person, group of associated persons, or persons otherwise acting in concert subscribing for five percent, may purchase between five and ten percent as long as the aggregate amount that the subscribers purchase does not exceed 10 percent of the total stock offering.
(c) You may require persons exercising subscription rights to purchase a minimum number of conversion shares. The minimum number of shares must equal the lesser of the number of shares obtained by a $500 subscription or 25 shares.
(d) In setting purchase limitations under this section, you may not aggregate conversion shares attributed to a person in your tax-qualified employee stock ownership plan with shares purchased directly by, or otherwise attributable to, that person.
(a) In your subscription offering, you may give a purchase preference to eligible account holders, supplemental eligible account holders, and voting members residing in your local community.
(b) In your community offering, you must give a purchase preference to natural persons residing in your local community.
(a) You must offer and sell your stock to achieve a widespread distribution of the stock.
(b) If you offer shares in a community offering, a public offering, or both, you must first fill orders for your stock up to a maximum of two percent of the conversion stock on a basis that will promote a widespread distribution of stock. You must allocate any remaining shares on an equal number of shares per order basis until you fill all orders.
You must complete all sales of your stock within 45 calendar days after the last day of the subscription period, unless the offering is extended under § 192.405.
(a) You must request, in writing, an extension of any offering period.
(b) The appropriate Federal banking agency may grant extensions of time to sell your shares. The appropriate Federal banking agency will not grant any single extension of more than 90 days.
(c) If the appropriate Federal banking agency grants your request for an extension of time, you must provide a post-effective amendment to the offering circular under § 192.310 to each person who subscribed for or ordered stock. Your amendment must indicate that the appropriate Federal banking agency extended the offering period and that each person who subscribed for or ordered stock may increase, decrease, or rescind their subscription or order within the time remaining in the extension period.
(a) In your plan of conversion, you must set a date by which the conversion must be completed. This date must not be more than 24 months from the date that your members approve the plan of conversion. The date, once set, may not be extended by you or by the appropriate Federal banking agency. You must terminate the conversion if it is not completed by that date.
(b) Your conversion is complete on the date that you accept the offers for your stock.
(a) Your members may terminate the conversion by failing to approve the conversion at your members' meeting.
(b) You may terminate the conversion before your members' meeting.
(c) You may terminate the conversion after the members' meeting only if the appropriate Federal banking agency concurs.
(a) If you are a Federally chartered mutual savings association or savings bank, and you convert to a Federally chartered stock savings association or savings bank, you must apply to the OCC to amend your charter and bylaws consistent with part 152 of this chapter, as part of your application for conversion. You may only include OCC pre-approved anti-takeover provisions in your amended charter and bylaws.
(b) If you are a Federally chartered mutual savings association or savings bank and you convert to a state-chartered stock savings association under this part, you must surrender your charter to the OCC for cancellation promptly after the state issues your charter. You must promptly file a copy of your new state stock charter with the FDIC.
(c) If you are a state-chartered mutual savings association or savings bank, and you convert to a Federally chartered stock savings association or savings bank, you must apply to the OCC for a new charter and bylaws consistent with part 152 of this chapter. You may only include OCC pre-approved anti-takeover provisions in your charter and bylaws.
(d) Your new or amended charter must require you to establish and maintain a liquidation account for eligible and supplemental eligible account holders under § 192.450.
Your corporate existence will continue following your conversion, unless you convert to a state-chartered stock savings association and state law prescribes otherwise.
You must provide your stockholders with exclusive voting rights, except as provided in § 192.445(c).
(a) You must provide each savings account holder, without payment, a withdrawable savings account or accounts in the same amount and under the same terms and conditions as their accounts before your conversion.
(b) You must provide a liquidation account for each eligible and supplemental eligible account holder under § 192.450.
(c) If you are a state-chartered savings association and state law requires you to provide voting rights to savings account holders or borrowers, your charter must:
(1) Limit these voting rights to the minimum required by state law; and
(2) Require you to solicit proxies from the savings account holders and borrowers in the same manner that you solicit proxies from your stockholders.
(a) A liquidation account represents the potential interest of eligible account holders and supplemental eligible account holders in your net worth at the time of conversion. You must maintain a sub-account to reflect the interest of each account holder.
(b) Before you may provide a liquidation distribution to common stockholders, you must give a liquidation distribution to those eligible account holders and supplemental eligible account holders who hold savings accounts from the time of conversion until liquidation.
(c) You may not record the liquidation account in your financial statements. You must disclose the liquidation account in the footnotes to your financial statements.
The initial balance of the liquidation account is your net worth in the statement of financial condition included in the final offering circular.
(a)(1) You determine the initial sub-account balance for a savings account held by an eligible account holder by multiplying the initial balance of the liquidation account by the following fraction: The numerator is the qualifying deposit in the savings account expressed in dollars on the eligibility record date. The denominator is total qualifying deposits of all eligible account holders on that date.
(2) You determine the initial sub-account balance for a savings account held by a supplemental eligible account holder by multiplying the initial balance of the liquidation account by the following fraction: The numerator is the qualifying deposit in the savings account expressed in dollars on the supplemental eligibility record date. The denominator is total qualifying deposits of all supplemental eligible account holders on that date.
(3) If an account holder holds a savings account on the eligibility record date and a separate savings account on the supplemental eligibility record date, you must compute separate sub-accounts for the qualifying deposits in the savings account on each record date.
(b) You may not increase the initial sub-account balances. You must decrease the initial balance under § 192.470 as depositors reduce or close their accounts.
Eligible account holders or supplemental eligible account holders do not retain any voting rights based on their liquidation sub-accounts.
(a)(1) You must reduce the balance of an eligible account holder's or supplemental eligible account holder's sub-account if the deposit balance in the account holder's savings account at the close of business on any annual closing date, which for purposes of this section is your fiscal year end, after the relevant eligibility record dates is less than:
(i) The deposit balance in the account holder's savings account at the close of business on any other annual closing date after the relevant eligibility record date; or
(ii) The qualifying deposits in the account holder's savings account on the relevant eligibility record date.
(2) The reduction must be proportionate to the reduction in the deposit balance.
(b) If you reduce the balance of a liquidation sub-account, you may not subsequently increase it if the deposit balance increases.
(c) You are not required to adjust the liquidation account and sub-account balances at each annual closing date if you maintain sufficient records to make the computations if a liquidation subsequently occurs.
(d) You must maintain the liquidation sub-account for each account holder as long as the account holder maintains an account with the same social security number.
(e) If there is a complete liquidation, you must provide each account holder with a liquidation distribution in the amount of the sub-account balance.
(a) A liquidation is a sale of your assets and settlement of your liabilities with the intent to cease operations and close. Upon liquidation, you must return your charter to the governmental agency that issued it. The government agency must cancel your charter.
(b) A merger, consolidation, or similar combination or transaction with another depository institution, is not a liquidation. If you are involved in such a transaction, the surviving institution must assume the liquidation account.
The liquidation account does not affect your net worth.
If you convert to Federal stock form, you must include the following provision in your new charter: “Liquidation Account. Under appropriate Federal banking agency regulations, the association must establish and maintain a liquidation account for the benefit of its savings account holders as of _____. If the association undergoes a complete liquidation, it must comply with appropriate Federal banking agency regulations with respect to the amount and priorities on liquidation of each of the savings account holder's interests in the liquidation account. A savings account holder's interest in the liquidation account does not entitle the savings account holder to any voting rights.”
(a) During the 12 months after your conversion, you may implement a stock option plan (Option Plan), an employee stock ownership plan or other tax-qualified employee stock benefit plan
(1) You disclose the plans in your proxy statement and offering circular and indicate in your offering circular that there will be a separate shareholder vote on the Option Plan and the MRP at least six months after the conversion. No shareholder vote is required to implement the ESOP. Your ESOP must be tax-qualified.
(2) Your Option Plan does not encompass more than ten percent of the number of shares that you issued in the conversion.
(3)(i) Your ESOP and MRP do not encompass, in the aggregate, more than ten percent of the number of shares that you issued in the conversion. If you have tangible capital of ten percent or more following the conversion, the appropriate Federal banking agency may permit your ESOP and MRP to encompass, in the aggregate, up to 12 percent of the number of shares issued in the conversion; and
(ii) Your MRP does not encompass more than three percent of the number of shares that you issued in the conversion. If you have tangible capital of ten percent or more after the conversion, the appropriate Federal banking agency may permit your MRP to encompass up to four percent of the number of shares that you issued in the conversion.
(4) No individual receives more than 25 percent of the shares under any plan.
(5) Your directors who are not your officers do not receive more than five percent of the shares of your MRP or Option Plan individually, or 30 percent of any such plan in the aggregate.
(6) Your shareholders approve each of the Option Plan and the MRP by a majority of the total votes eligible to be cast at a duly called meeting before you establish or implement the plan. You may not hold this meeting until six months after your conversion.
(7) When you distribute proxies or related material to shareholders in connection with the vote on a plan, you state that the plan complies with the appropriate Federal banking agency's regulations and that the appropriate Federal banking agency does not endorse or approve the plan in any way. You may not make any written or oral representations to the contrary.
(8) You do not grant stock options at less than the market price at the time of grant.
(9) You do not fund the Option Plan or the MRP at the time of the conversion.
(10) Your plan does not begin to vest earlier than one year after shareholders approve the plan, and does not vest at a rate exceeding 20 percent per year.
(11) Your plan permits accelerated vesting only for disability or death, or if you undergo a change of control.
(12) Your plan provides that your executive officers or directors must exercise or forfeit their options in the event the institution becomes critically undercapitalized (as defined in § 165.4 of this chapter), is subject to appropriate Federal banking agency enforcement action, or receives a capital directive under § 165.7 of this chapter.
(13) You file a copy of the proposed Option Plan or MRP with the appropriate Federal banking agency and certify to such agency that the plan approved by the shareholders is the same plan that you filed with, and disclosed in, the proxy materials distributed to shareholders in connection with the vote on the plan.
(14) You file the plan and the certification with the appropriate Federal banking agency within five calendar days after your shareholders approve the plan.
(b) You may provide dividend equivalent rights or dividend adjustment rights to allow for stock splits or other adjustments to your stock in your ESOP, MRP, and Option Plan.
(c) The restrictions in paragraph (a) of this section do not apply to plans implemented more than 12 months after the conversion, provided that materials pertaining to any shareholder vote regarding such plans are not distributed within the 12 months after the conversion. If a plan adopted in conformity with paragraph (a) of this section is amended more than 12 months following your conversion, your shareholders must ratify any material deviations to the requirements in paragraph (a).
(a) Directors and officers who purchase conversion shares may not sell the shares for one year after the date of purchase, except that in the event of the death of the officer or director, the successor in interest may sell the shares.
(b) You must include notice of the restriction described in paragraph (a) of this section on each certificate of stock that a director or officer purchases during the conversion or receives in connection with a stock dividend, stock split, or otherwise with respect to such restricted shares.
(c) You must instruct your stock transfer agent about the transfer restrictions in this section.
(d) For three years after you convert, your officers, directors, and their associates may purchase your stock only from a broker or dealer registered with the Securities and Exchange Commission. However, your officers, directors, and their associates may engage in a negotiated transaction involving more than one percent of your outstanding stock, and may purchase stock through any of your management or employee stock benefit plans.
(a) You may not repurchase your shares in the first year after the conversion except:
(1) In extraordinary circumstances, you may make open market repurchases of up to five percent of your outstanding stock in the first year after the conversion if you file a notice under § 192.515(a) and the appropriate Federal banking agency does not disapprove your repurchase. The appropriate Federal banking agency will not approve such repurchases unless the repurchase meets the standards in § 192.515(c), and the repurchase is consistent with paragraph (c) of this section.
(2) You may repurchase qualifying shares of a director or conduct an appropriate Federal banking agency- approved repurchase pursuant to an offer made to all shareholders of your association.
(3) Repurchases to fund management recognition plans that have been ratified by shareholders do not count toward the repurchase limitations in this section. Repurchases in the first year to fund such plans require prior written notification to the appropriate Federal banking agency.
(4) Purchases to fund tax qualified employee stock benefit plans do not count toward the repurchase limitations in this section.
(b) After the first year, you may repurchase your shares, subject to all other applicable regulatory and supervisory restrictions and paragraph (c) of this section.
(c) All stock repurchases are subject to the following restrictions.
(1) You may not repurchase your shares if the repurchase will reduce your regulatory capital below the amount required for your liquidation account under § 192.450. You must comply with the capital distribution requirements at part 163, subpart E of this chapter.
(2) The restrictions on share repurchases apply to a charitable organization under § 192.550. You must aggregate purchases of shares by the charitable organization with your repurchases.
(a) To repurchase stock in the first year following conversion, other than repurchases under § 192.510(a)(3) or (a)(4), you must file a written notice with the appropriate OCC licensing office if you are a Federal savings association and with the appropriate FDIC region if you are a state savings association. You must provide the following information:
(1) Your proposed repurchase program;
(2) The effect of the repurchases on your regulatory capital; and
(3) The purpose of the repurchases and, if applicable, an explanation of the extraordinary circumstances necessitating the repurchases.
(b) You must file your notice with the appropriate OCC licensing office if you are a Federal savings association and with the appropriate regional director of the FDIC if you are a state savings association at least ten days before you begin your repurchase program.
(c) You may not repurchase your shares if the appropriate Federal banking agency objects to your repurchase program. The appropriate Federal banking agency will not object to your repurchase program if:
(1) Your repurchase program will not adversely affect your financial condition;
(2) You submit sufficient information to evaluate your proposed repurchases;
(3) You demonstrate extraordinary circumstances and a compelling and valid business purpose for the share repurchases; and
(4) Your repurchase program would not be contrary to other applicable regulations.
You may declare or pay a dividend on your shares after you convert if:
(a) The dividend will not reduce your regulatory capital below the amount required for your liquidation account under § 192.450;
(b) You comply with all capital requirements under part 167 of this chapter after you declare or pay dividends;
(c) You comply with the capital distribution requirements under part 163, subpart E, of this chapter; and
(d) You do not return any capital, other than ordinary dividends, to purchasers during the term of the business plan submitted with the conversion.
(a) For three years after you convert, no person may, directly or indirectly, acquire or offer to acquire the beneficial ownership of more than ten percent of any class of your equity securities without the appropriate Federal banking agency's prior written approval. If a person violates this prohibition, you may not permit the person to vote shares in excess of ten percent, and may not count the shares in excess of ten percent in any shareholder vote.
(b) A person acquires beneficial ownership of more than ten percent of a class of shares when he or she holds any combination of your stock or revocable or irrevocable proxies under circumstances that give rise to a conclusive control determination or rebuttable control determination under §§ 174.4(a) and (b) of this chapter. The appropriate Federal banking agency will presume that a person has acquired shares if the acquiror entered into a binding written agreement for the transfer of shares. For purposes of this section, an offer is made when it is communicated. An offer does not include non-binding expressions of understanding or letters of intent regarding the terms of a potential acquisition.
(c) Notwithstanding the restrictions in this section:
(1) Paragraphs (a) and (b) of this section do not apply to any offer with a view toward public resale made exclusively to you, to the underwriters, or to a selling group acting on your behalf.
(2) Unless the appropriate Federal banking agency objects in writing, any person may offer or announce an offer to acquire up to one percent of any class of shares. In computing the one percent limit, the person must include all of his or her acquisitions of the same class of shares during the prior 12 months.
(3) A corporation whose ownership is, or will be, substantially the same as your ownership may acquire or offer to acquire more than ten percent of your common stock, if it makes the offer or acquisition more than one year after you convert.
(4) One or more of your tax-qualified employee stock benefit plans may acquire your shares, if the plan or plans do not beneficially own more than 25 percent of any class of your shares in the aggregate.
(5) An acquiror does not have to file a separate application to obtain the appropriate Federal banking agency's approval under paragraph (a) of this section, if the acquiror files an application under part 174 of this chapter that specifically addresses the criteria listed under paragraph (d) of this section and you do not oppose the proposed acquisition.
(d) The appropriate Federal banking agency may deny an application under paragraph (a) of this section if the proposed acquisition:
(1) Is contrary to the purposes of this part;
(2) Is manipulative or deceptive;
(3) Subverts the fairness of the conversion;
(4) Is likely to injure you;
(5) Is inconsistent with your plan to meet the credit and lending needs of your proposed market area;
(6) Otherwise violates laws or regulations; or
(7) Does not prudently deploy your conversion proceeds.
After you convert, you must:
(a) Promptly register your shares under the Securities Exchange Act of 1934 (15 U.S.C. 78a-78jj, as amended). You may not deregister the shares for three years.
(b) Encourage and assist a market maker to establish and to maintain a market for your shares. A market maker for a security is a dealer who:
(1) Regularly publishes bona fide competitive bid and offer quotations for the security in a recognized inter-dealer quotation system;
(2) Furnishes bona fide competitive bid and offer quotations for the security on request; or
(3) May effect transactions for the security in reasonable quantities at quoted prices with other brokers or dealers.
(c) Use your best efforts to list your shares on a national or regional securities exchange or on the National Association of Securities Dealers Automated Quotation system.
(d) File all post-conversion reports that the appropriate Federal banking agency requires.
You may contribute some of your conversion shares or proceeds to a charitable organization if:
(a) Your plan of conversion provides for the proposed contribution;
(b) Your members approve the proposed contribution; and
(c) The IRS either has approved, or approves within two years after formation, the charitable organization as
At the meeting to consider your conversion, your members must separately approve by at least a majority of the total eligible votes, a contribution of conversion shares or proceeds. If you are in mutual holding company form and adding a charitable contribution as part of a second step stock conversion, you must also have your minority shareholders separately approve the charitable contribution by a majority of their total eligible votes.
You may contribute a reasonable amount of conversion shares or proceeds to a charitable organization, if your contribution will not exceed limits for charitable deductions under the Internal Revenue Code and the appropriate Federal banking agency does not object on supervisory grounds. If you are a well-capitalized savings association, the appropriate Federal banking agency generally will not object if you contribute an aggregate amount of eight percent or less of the conversion shares or proceeds.
The charitable organization's charter (or trust agreement) and gift instrument must provide that:
(a) The charitable organization's primary purpose is to serve and make grants in your local community;
(b) As long as the charitable organization controls shares, it must vote those shares in the same ratio as all other shares voted on each proposal considered by your shareholders;
(c) For at least five years after its organization, one seat on the charitable organization's board of directors (or board of trustees) is reserved for an independent director (or trustee) from your local community. This director may not be your officer, director, or employee, or your affiliate's officer, director, or employee, and should have experience with local community charitable organizations and grant making; and
(d) For at least five years after its organization, one seat on the charitable organization's board of directors (or board of trustees) is reserved for a director from your board of directors or the board of directors of an acquiror or resulting institution in the event of a merger or acquisition of your organization.
(a) A person who is your director, officer, or employee, or a person who has the power to direct your management or policies, or otherwise owes a fiduciary duty to you (for example, holding company directors) and who will serve as an officer, director, or employee of the charitable organization, is subject to § 163.200 of this chapter.
(b) Before your board of directors may adopt a plan of conversion that includes a charitable organization, you must identify your directors that will serve on the charitable organization's board. These directors may not participate in your board's discussions concerning contributions to the charitable organization, and may not vote on the matter.
(a) The charitable organization's charter (or trust agreement) and the gift instrument for the contribution must provide that:
(1) The appropriate Federal banking agency may examine the charitable organization at the charitable organization's expense;
(2) The charitable organization must comply with all supervisory directives that the appropriate Federal banking agency imposes;
(3) The charitable organization must annually provide the appropriate Federal banking agency with a copy of the annual report that the charitable organization submitted to the IRS;
(4) The charitable organization must operate according to written policies adopted by its board of directors (or board of trustees), including a conflict of interest policy; and
(5) The charitable organization may not engage in self-dealing, and must comply with all laws necessary to maintain its tax-exempt status under the Internal Revenue Code.
(b) You must include the following legend in the stock certificates of shares that you contribute to the charitable organization or that the charitable organization otherwise acquires: “The board of directors must consider the shares that this stock certificate represents as voted in the same ratio as all other shares voted on each proposal considered by the shareholders, as long as the shares are controlled by the charitable organization.”
(c) As long as the charitable organization controls shares, you must consider those shares as voted in the same ratio as all of the shares voted on each proposal considered by your shareholders.
(d) After you complete your stock offering, you must submit copies of the following documents to the appropriate OCC licensing office in accordance with part 192.155, or if you are a state savings association, with the appropriate FDIC region: the charitable organization's charter and bylaws (or trust agreement), operating plan (within six months after your stock offering), conflict of interest policy, and the gift instrument for your contributions of either stock or cash to the charitable organization.
(a) You must comply with this subpart to engage in a voluntary supervisory conversion. This subpart applies to all voluntary supervisory conversions under sections 5(i)(1), (i)(2), and (p) of the Home Owners' Loan Act (HOLA), 12 U.S.C. 1464(i)(1), (i)(2), and (p).
(b) Subpart A of this part also applies to a voluntary supervisory conversion, unless a requirement is clearly inapplicable.
(a) You may sell your shares or the shares of a holding company to the public under the requirements of subpart A of this part.
(b) You may convert to stock form by merging into an interim Federal-or state-chartered stock association.
(c) You may sell your shares directly to an acquiror, who may be a person, company, depository institution, or depository institution holding company.
(d) You may merge or consolidate with an existing or newly created depository institution. The merger or consolidation must be authorized by, and is subject to, other applicable laws and regulations.
Your members do not have the right to approve or participate in a voluntary supervisory conversion, and will not have any legal or beneficial ownership interests in the converted association, unless the appropriate Federal banking agency provides otherwise. Your members may have interests in a liquidation account, if one is established.
(a) If you are an insured savings association, you may be eligible to convert under this subpart if:
(1) You are significantly undercapitalized (or you are undercapitalized and a standard conversion that would make you adequately capitalized is not feasible) and you will be a viable entity following the conversion;
(2) Severe financial conditions threaten your stability and a conversion is likely to improve your financial condition;
(3) FDIC will assist you under section 13 of the Federal Deposit Insurance Act, 12 U.S.C. 1823; or
(4) You are in receivership and a conversion will assist you.
(b) You will be a viable entity following the conversion if you satisfy all of the following:
(1) You will be adequately capitalized as a result of the conversion;
(2) You, your proposed conversion, and your acquiror(s) comply with applicable supervisory policies;
(3) The transaction is in your best interest, and the best interest of the Deposit Insurance Fund and the public; and
(4) The transaction will not injure or be detrimental to you, the Deposit Insurance Fund, or the public interest.
If you are a state-chartered savings bank you may be eligible to convert to a Federal stock savings bank under this subpart if:
(a) FDIC certifies under section 5(o)(2)(C) of the HOLA that severe financial conditions threaten your stability and that the voluntary supervisory conversion is likely to improve your financial condition; or
(b) You meet the following conditions:
(1) Your liabilities exceed your assets, as calculated under generally accepted accounting principles, assuming you are a going concern; and
(2) You will issue a sufficient amount of permanent capital stock to meet your applicable FDIC capital requirement immediately upon completion of the conversion, or FDIC determines that you will achieve an acceptable capital level within an acceptable time period.
A majority of your board of directors must adopt a plan of voluntary supervisory conversion. You must include all of the following information in your plan of voluntary supervisory conversion.
(a) Your name and address.
(b) The name, address, date and place of birth, and social security number of each proposed purchaser of conversion shares and a description of that purchaser's relationship to you.
(c) The title, per-unit par value, number, and per-unit and aggregate offering price of shares that you will issue.
(d) The number and percentage of shares that each investor will purchase.
(e) The aggregate number and percentage of shares that each director, officer, and any affiliates or associates of the director or officer will purchase.
(f) A description of any liquidation account.
(g) Certified copies of all resolutions of your board of directors relating to the conversion.
You must include all of the following information and documents in a voluntary supervisory conversion application to the appropriate OCC licensing office if you are a Federal savings association and to the appropriate FDIC region if you are a state savings association under this subpart:
(a)
(2) An opinion of qualified, independent counsel or an independent, certified public accountant regarding the tax consequences of the conversion, or an IRS ruling indicating that the transaction qualifies as a tax-free reorganization.
(3) An opinion of independent counsel indicating that applicable state law authorizes the voluntary supervisory conversion, if you are a state-chartered savings association converting to state stock form.
(b)
(c)
(d)
(2) A description of your estimated conversion expenses.
(3) Evidence supporting the value of any non-cash asset contributions. Appraisals must be acceptable to the appropriate Federal banking agency and the non-cash asset must meet all other appropriate Federal banking agency policy guidelines.
(4) Pro forma financial statements that reflect the effects of the transaction. You must identify your tangible, core, and risk-based capital levels and show the adjustments necessary to compute the capital levels. You must prepare your pro forma statements in conformance with the appropriate Federal banking agency regulations and policy.
(e)
(2) Your proposed stock certificate form.
(f)
(2) A copy and description of all existing and proposed employment contracts. You must describe the term, salary, and severance provisions of the contract, the identity and background of the officer or employee to be employed, and the amount of any conversion shares to be purchased by the officer or employee or his or her affiliates or associates.
(g)
(2) Any required Control Act notice, rebuttal submission under part 174 of this chapter, or copies of any Holding Company Act Applications, including prior-conduct certifications under Regulatory Bulletin 20.
(3) A subordinated debt application, if applicable.
(4) Applications for permission to organize a stock association and for approval of a merger, if applicable, and a copy of any application for Federal Home Loan Bank membership or FDIC insurance of accounts, if applicable.
(5) A statement describing any other applications required under Federal or state banking laws for all transactions related to your conversion, copies of all dispositive documents issued by regulatory authorities relating to the applications, and, if requested by the
(h)
The appropriate Federal banking agency will generally approve your application to engage in a voluntary supervisory conversion unless it determines:
(a) You do not meet the eligibility requirements for a voluntary supervisory conversion under §§ 192.625 or 192.630 or because the proceeds from the sale of your conversion stock, less the expenses of the conversion, would be insufficient to satisfy any applicable viability requirement;
(b) The transaction is detrimental to or would cause potential injury to you or the Deposit Insurance Fund or is contrary to the public interest;
(c) You or your acquiror, or the controlling parties or directors and officers of you or your acquiror, have engaged in unsafe or unsound practices in connection with the voluntary supervisory conversion; or
(d) You fail to justify an employment contract incidental to the conversion, or the employment contract will be an unsafe or unsound practice or represent a sale of control. In a voluntary supervisory conversion, the appropriate Federal banking agency generally will not approve employment contracts of more than one year for your existing management.
(a) The appropriate Federal banking agency will condition approval of a voluntary supervisory conversion application on all of the following.
(1) You must complete the conversion stock sale within three months after the appropriate Federal banking agency approves your application. The appropriate Federal banking agency may grant an extension for good cause.
(2) You must comply with all filing requirements of parts 192 and 197 of this chapter.
(3) You must submit an opinion of independent legal counsel indicating that the sale of your shares complies with all applicable state securities law requirements.
(4) You must comply with all applicable laws, rules, and regulations.
(5) You must satisfy any other requirements or conditions the appropriate Federal banking agency may impose.
(b) The appropriate Federal banking agency may condition approval of a voluntary supervisory conversion application on either of the following:
(1) You must satisfy any conditions and restrictions the appropriate Federal banking agency imposes to prevent unsafe or unsound practices, to protect the Deposit Insurance Fund and the public interest, and to prevent potential injury or detriment to you before and after the conversion. The appropriate Federal banking agency may impose these conditions and restrictions on you (before and after the conversion) or, as appropriate, your acquiror, controlling parties, or your directors and officers; or
(2) You must infuse a larger amount of capital, if necessary, for safety and soundness reasons.
If you convert under this subpart, you must offer and sell your shares under part 197 of this chapter.
For three years after the completion of a voluntary supervisory conversion, neither you nor your controlling shareholder(s) may acquire shares from minority shareholders without the appropriate Federal banking agency's prior approval.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B); 15 U.S.C. 78c(b), 78m, 78n, 78w.
(a) This subpart A states the requirements as to form and content of financial statements included by a Federal savings association in the following documents. However, the OCC's regulations governing the applicable documents specify the actual financial statements that are to be included in that document.
(1) Any proxy statement or offering circular required to be used in connection with a conversion under part 192 of this chapter.
(2) Any offering circular or nonpublic offering materials required to be used in connection with an offer or sale of securities under part 197 of this chapter.
(3) Any filing under the Securities Exchange Act of 1934, 15 U.S.C. 78a
(b) Except as otherwise provided by the OCC by rule, regulation or order made specifically applicable to financial statements governed by this section, financial statements shall:
(1) Be prepared and presented in accordance with generally accepted accounting principles;
(2) Comply with subpart C of this part;
(3) Consistent with the provisions of this subpart, comply with articles 1, 2, 3, 4, 10, and 11 of Regulation S-X adopted by the Securities and Exchange Commission (17 CFR 210.1-210.4, 210.10, and 210.11).
(4) Be audited, when required, by an independent auditor in accordance with the standards imposed by the American Institute of Certified Public Accountants.
(c) The term “financial statements” includes all notes to the statements and related schedules.
(a)
(b)
(1) The association's and its other subsidiaries' investments in and advances to the subsidiary exceed 10 percent of the total assets of the
(2) The association's and its other subsidiaries' proportionate share of the total assets (after intercompany eliminations) of the subsidiary exceeds 10 percent of the total assets of the association and its subsidiaries consolidated as of the end of the most recently completed fiscal year; or
(3) The association's and its other subsidiaries' equity in the income from continuing operations before income taxes, extraordinary items, and cumulative effect of a change in accounting principle of the subsidiary exceeds 10 percent of such income of the association and its subsidiaries consolidated for the most recently completed fiscal year.
For purposes of making the prescribed income test the following guidance should be applied:
1. When a loss has been incurred by either the parent or its consolidated subsidiaries or the tested subsidiary, but not both, the equity in the income or loss of the tested subsidiary should be excluded from the income of the association and its subsidiaries consolidated for purposes of the computation.
2. If income of the association and its subsidiaries consolidated for the most recent fiscal year is at least 10 percent lower than the average of the income for the last five fiscal years, such average income should be substituted for purposes of the computation. Any loss years should be omitted for purposes of computing average income.
The term “qualified public accountant” means a certified public accountant or licensed public accountant certified or licensed by a regulatory authority of a state or other political subdivision of the United States who is in good standing as such under the laws of the jurisdiction where the home office of the registrant to be audited is located. Any person or firm who is suspended from practice before the Securities and Exchange Commission or other governmental agency is not a “qualified public accountant” for purposes of this section.
(a) The information prescribed by Schedule III pursuant to section IV of Appendix A to this part shall be presented in a note to the financial statements when the restricted net assets (17 CFR 210.4-08(e)(3)) of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The investment in and indebtedness of and to association subsidiaries shall be stated separately in the condensed balance sheet from amounts for other subsidiaries; and the amount of cash dividends paid to the parent association for each of the last three years by association subsidiaries shall be stated separately in the condensed income statement from amounts for other subsidiaries.
(b) For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the association's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent year may not be transferred to the parent company by subsidiaries in the form of loans, advances, or cash dividends without the consent of a third party (
(c) Where restrictions on the amount of funds which may be loaned or advanced differ from the amount restricted as to transfer in the form of cash dividends, the amount least restrictive to the subsidiary shall be used. Redeemable preferred stocks (
This subpart contains rules pertaining to the form and content of financial statements included as part of:
(a) A conversion application under part 192, including financial statements in proxy statements and offering circulars,
(b) A filing under the Securities Exchange Act of 1934, 15 U.S.C. 78a
(c) Any offering circular required to be used in connection with the issuance of mutual capital certificates under § 163.74 and debt securities under § 163.80 and § 163.81 of this chapter.
Federal savings associations shall comply with Appendix A to this part, which specifies the various line items that should appear on the face of the financial statements governed by this subpart C and additional disclosures that should be included with the financial statements in related notes.
1.
(b) State in a note the amount and terms of any deposits in depository institutions held as compensating balances against long- or short-term borrowing arrangements. This disclosure should include the provisions of any restrictions as to withdrawal or usage. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits; however, time deposits and short-term certificates of deposits are not generally included in legally restricted deposits. In cases where compensating balance arrangements exist but are not agreements which legally restrict the use of cash amounts shown on the balance sheet, describe in the notes to the financial statements these arrangements and the amount involved, if determinable, for the most recent audited balance sheet required and for any subsequent unaudited balance sheet required. Compensating balances that are maintained under an agreement to ensure future credit availability shall be disclosed in the notes to the financial statements along with the amount and terms of the agreement.
(c) Checks outstanding in excess of an applicant's book balance in a demand deposit account shall be shown as a liability.
2.
3.
4.
5.
6.
(b) Disclose in a note the carrying value and market value of securities of (i) the U.S. Treasury and other U.S. Government agencies and corporations; (ii) states of the U.S. and political subdivisions thereof; and (iii) other securities.
7.
8.
(b) State on the balance sheet or in a note the amount of loans in each of the following categories: (i) Real estate mortgage; (ii) real estate construction; (iii) installment; and (iv) commercial, financial, and agricultural.
(c)(i) Include under the real estate mortgage category loans payable in monthly, quarterly, or other periodic installments and secured by developed income property and/or personal residences.
(ii) Include under the real estate construction category loans secured by real estate which are made for the purpose of financing construction of real estate and land development projects.
(iii) Include under the installment category loans to individuals generally repayable in monthly installments. This category shall include, but not be limited to, credit card and related activities, individual automobile loans, other installment loans, mobile home loans, and residential repair and modernization loans.
(iv) Include under the commercial, financial, and agricultural category all loans not included in another category. This category shall include, but not be limited to, loans to real estate investment trusts, mortgage companies, banks, and other financial institutions; loans for carrying securities; and loans for agricultural purposes. Do not include loans secured primarily by developed real estate.
(d) State separately any other loan category regardless of relative size if necessary to reflect any unusual risk concentration.
(e) Unearned income on installment loans shall be shown and deducted separately from total loans.
(f) Unamortized discounts on purchased loans shall be deducted separately from total loans.
(g) Loans in process shall be deducted separately from total loans.
(h) A series of categories other than those specified in item (b) of paragraph 8. may be used to present details of loans if considered a more appropriate presentation. The categories specified in item (b) of paragraph 8. should be considered the minimum categories that may be presented.
(i) For each period for which an income statement is presented, disclose in a note the total dollar amount of loans being serviced by the association for the benefit of others.
(j)(i)(A) As of each balance sheet date, disclose in a note the aggregate dollar amount of loans (exclusive of loans to any such persons which in the aggregate do not exceed $60,000 during the last year) made by the association or any of its subsidiaries to directors, executive officers, or principal holders of equity securities (17 CFR 210.1-02) of the association or any of its significant subsidiaries (17 CFR 210.1-02) or to any associate of such persons. For the latest fiscal year, an analysis of activity with respect to such aggregate loans to related parties should be provided. The analysis should include at the beginning of the period new loans, repayments, and other changes. (Other changes, if significant, should be explained.)
(B) This disclosure need not be furnished when the aggregate amount of such loans at the balance sheet date (or with respect to the latest fiscal year, the maximum amount outstanding during the period) does not exceed 5 percent of stockholders' equity at the balance sheet date.
(ii) If a significant portion of the aggregate amount of loans outstanding at the end of the fiscal year disclosed pursuant to item (i)(A) of this paragraph (j) relates to nonaccrual, past due, restructured, and potential problem loans (
(iii) Notwithstanding the aggregate disclosure called for by paragraph (j)(i) of this balance sheet caption 8, if any loans were not made in the ordinary course of business during any period for which an income statement is required to be filed, provide an appropriate description of each such loan (
(iv) For purposes only of Balance Sheet item 8(j), the following definitions shall apply:
(A)
(B)
(C)
(D)
(k) For each period for which an income statement is presented, furnish in a note a statement of changes in the allowance for loan losses, showing balances at beginning and end of the period, provision charged to income, recoveries of amounts previously charged off, and losses charged to the allowance.
9.
10.
(a) The amount of real estate owned by class as described in item (b) of paragraph 10. and the basis for determining that amount; and
(b) A description of each class of real estate owned (i) acquired by foreclosure or by deed in lieu of foreclosure, (ii) in judgment and subject to redemption, or (iii) acquired for development or resale. Show separately any accumulated depreciation or valuation allowances. Disclose the policies regarding, and amounts of, capitalized costs, including interest.
11.
12.
(i)
(ii) Excess of cost over assets acquired (net of amortization).
(b) State in a note (i) amounts representing investments in affiliates and investments in other persons which are accounted for by the equity method, and (ii) indebtedness of affiliates and other persons, the investments in which are accounted for by the equity method. State the basis of determining the amounts reported under paragraph (b)(i).
13.
Liabilities, and Stockholders' Equity
14.
(b) Include under the savings-deposits category interest-bearing deposits without specified maturity or contractual provisions requiring advance notice of intention to withdraw funds. Include deposits for which an association may require at its option written notice of intended withdrawal not less than 14 days in advance.
(c) Include under the time-deposits category deposits subject to provisions specifying maturity or other withdrawal conditions such as time certificates of deposits, open account time deposits, and deposits accumulated for the payment of personal loans.
(d) Include accrued interest or dividends, if appropriate.
15.
(b) Federal funds purchased and sales of securities under repurchase agreements shall be reported gross and not netted against sales of Federal funds and purchase of securities under resale agreements.
(c) Include as securities sold under agreements to repurchase all transactions of this type regardless of (i) whether they are called simultaneous purchases and sales, buy-backs, turnarounds, overnight transactions, delayed deliveries, or other terms signifying the same substantive transaction, and (ii) whether the transactions are with the same or different institutions, if the purpose of the transactions is to repurchase identical or similar securities.
(d) The amount and terms (including commitment fees and the conditions under which lines may be withdrawn) of unused lines of credit for short-term financing shall be disclosed, if significant, in the notes to the financial statements. The amount of these lines of credit which support a commercial paper borrowing arrangement or similar arrangements shall be separately identified.
16.
17.
(a) Income taxes payable.
(b) Deferred income taxes.
(c) Indebtedness to affiliate and other persons the investment in which is accounted for by the equity method.
(d) Indebtedness to directors, executive officers, and principal holders of equity securities of the registrant or any of its significant subsidiaries. (The guidance in balance sheet caption “8(j)” shall be used to identify related parties for purposes of this disclosure.)
18.
(b) For each issue or type of obligation state in a note:
(i) The general character of each type of debt, including: (A) The rate of interest, (B) the date of maturity, or, if maturing serially, a brief indication of the serial maturities, such as “maturing serially from 1980 to 1990,” (C) if the payment of principal or interest is contingent, an appropriate indication of such contingency, (D) a brief indication of priority, and (E) if convertible, the basis. For amounts owed to related parties
(ii) The amount and terms (including commitment fees and the conditions under which commitments may be withdrawn) of unused commitments for long-term financing arrangements that, if used, would be disclosed under this caption shall be disclosed in the notes to the financial statements, if significant.
(c) State in the notes with appropriate explanations (i) the title and amount of each issue of debt of a subsidiary included in item (a) of paragraph 18 which has not been assumed or guaranteed by the association, and (ii) any liens on premises of a subsidiary or its consolidated subsidiaries which have not been assumed by the subsidiary or its consolidated subsidiaries.
19.
20.
21.
22.
(b) State on the face of the balance sheet the title, carrying amount, and redemption amount of each issue. (If there is more than one issue, these amounts may be aggregated on the face of the balance sheet and details concerning each issue may be presented in the note required by item (c) of paragraph 22.) Show also the dollar amount of any shares subscribed for but unissued, and show the deduction of subscriptions receivable therefrom. If the carrying value is different from the redemption amount, describe the accounting treatment for such difference in the note required by item (c) of paragraph 22. Also state in this note or on the face of the balance sheet, for each issue, the number of shares authorized and the number of shares issued or outstanding, as appropriate. (
(c) State in a separate note captioned “Redeemable Preferred Stock” (i) a general description of each issue, including its redemption features (
(d) Securities reported under this caption are not to be included under a general heading “stockholders' equity” or combined in a total with items described in captions 23, 24 or 25, which follow.
23.
24.
25.
(b) For a period of at least 10 years subsequent to the effective date of a quasi-reorganization, any description of retained earnings shall indicate the point in time from which the new retained earnings dates, and for a period of at least three years shall indicate, on the face of the balance sheet, the total amount of the deficit eliminated.
(c) Changes in stockholders' equity shall be disclosed in accordance with the requirements of 17 CFR 210.3-04.
26.
1.
(b) Current amortization of premiums on mortgages or other loans shall be deducted from interest on loans, and current accretion of discount on such items shall be added to interest on loans.
(c) Discounts and other deferred amounts which are related to or are an adjustment of the loan interest yield shall be amortized into income using the interest (level yield) method.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
(a) Commissions and fees from fiduciary activities.
(b) Fees for other services to customers.
(c) Commissions, fees, and markups on securities underwriting and other securities activities.
(d) Profit or loss on transactions in investment securities.
(e) Equity in earnings of unconsolidated subsidiaries and 50-percent- or less-owned persons.
(f) Gains or losses on disposition of investments in securities of subsidiaries and 50-percent- or less-owned persons.
(g) Profit or loss from real estate operations.
(h) Other fees related to loan originations or commitments not included in income statement caption 1.
The remaining other income may be shown in one amount.
(i) Investment securities gains or losses. The method followed in determining the cost of investments sold (
14.
(a) Salaries and employee benefits.
(b) Net occupancy expense of premises.
(c) Net cost of operations of other real estate (including provisions for real estate losses, rental income, and gains and losses on sales of real estate).
(d) Minority interest in income of consolidated subsidiaries.
(e) Goodwill amortization.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
(a) Amounts and descriptions of discounts and premiums related to recording the aggregate interest-bearing assets and liabilities at their fair market value. The disclosure should also include the methods of amortization or accretion and the estimated remaining lives.
(b) The net effect on net income before taxes of the amortization and accretion of discounts, premiums, and intangible assets related to the purchase accounting transaction(s). For subsequent periods, the association shall disclose the remaining total unamortized or unaccreted amounts of discounts, premiums, and intangible assets as of the date of the most recent balance sheet presented. In addition, the association shall disclose the net effect on net income before taxes of the amortization and accretion of discounts, premiums, and intangible assets related to prior business combinations accounted for by the purchase method of accounting. Such disclosures need not be made if the total amounts of discounts, premiums, or intangible assets do not exceed 30 percent of stockholders' equity as of the date of the most recent balance sheet presented.
The amounts shown in this statement should be those items which materially enhance the reader's understanding of the association's business. For example, gains from sales of loans should be segregated from sales of mortgage-backed securities and other securities, if material, proceeds from principal repayments and maturities from loans and mortgage-backed securities should be segregated from proceeds from sales of loans and mortgage-backed securities, purchases of loans, mortgage-backed securities and other securities should be segregated, if material. Additional guidance may be found in the FASB's Statement of Financial Accounting Standards No. 95 Statement of Cash Flows.
The following schedules, which should be examined by an independent accountant, shall be filed unless the required information is not applicable or is presented in the related financial statements:
(1)
(2)
(3)
[Parent only]
[Association may determine disclosure based on information provided in footnotes below]
(a) Provide condensed financial information as to financial position, changes in financial position, and results of operations of the association as of the same dates and for the same periods for which audited consolidated financial statements are required. The financial information required need not be presented in greater detail than is required for a condensed statement by 17 CFR 210.10-01(a) (2), (3), (4). Detailed footnote disclosure which would normally be included with complete financial statements may be omitted with the exception of disclosure regarding material contingencies, long-term obligations, and guarantees. Description of significant provisions of the association's long-term obligations, mandatory dividend, or redemption requirements of redeemable stocks, and guarantees of the association shall be provided along with a 5-year schedule of maturities of debt. If the material contingencies, long-term obligations, redeemable stock requirements, and guarantees of the association have been separately disclosed in the consolidated statements, they need not be repeated in this schedule.
(b) Disclose separately the amount of cash dividends paid to the association for each of the last three fiscal years by consolidated subsidiaries, unconsolidated subsidiaries, and 50-percent- or less-owned persons accounted for by the equity method, respectively.
12 U.S.C. 1462a, 1463, 1464, 5412(b)(2)(B); 15 U.S.C. 78c(b), 78
In respect to any securities issued by Federal savings associations, the powers, functions, and duties vested in the Securities and Exchange Commission (the “Commission”) to administer and enforce sections 10A(m), 12, 13, 14(a), 14(c), 14(d), 14(f), and 16 of the Securities Exchange Act of 1934, as amended, (the “Act”); and sections 302, 303, 304, 306, 401(b), 404, 406, and 407 of the Sarbanes-Oxley Act of 2002 (codified at 15 U.S.C. 7241, 7242, 7243, 7244, 7261, 7262, 7264, and 7265) are vested in the OCC. The rules, regulations and forms prescribed by the Commission pursuant to those sections or applicable in connection with obligations imposed by those sections, shall apply to securities issued by Federal savings associations, except as otherwise provided in this part. The term “Securities and Exchange Commission” or “Commission” as used in those rules and regulations shall, with respect to securities issued by Federal savings associations, be deemed to refer to the OCC unless the context otherwise requires. All filings with respect to securities issued by Federal savings associations required by those rules and regulations to be made with the Commission shall be made with the OCC's Securities and Corporate Practices Division. Except to the extent otherwise specifically provided by the OCC in the application fee schedule published in the Thrift Bulletin pursuant to 12 CFR part 102, all filing fees specified by the Commission's rules shall be paid to the OCC. If, after the OCC reviews a Form 10-K, Form 10-Q, Schedule 13D or Schedule 13G and determines that the filing is materially deficient such that the OCC requires that an amendment be filed to correct the deficiency, then, upon the filing of the amendment to the Form 10-K, Form 10-Q, Schedule 13D or Schedule 13G, as the case may be, the filer shall pay an additional filing fee to the OCC, in the amount specified by the OCC.
This section replaces adherence to 17 CFR 240.3b-6 and applies as follows:
(a) A statement within the coverage of paragraph (b) of this section which is made by or on behalf of an issuer or by an outside reviewer retained by the issuer shall be deemed not to be a fraudulent statement (as defined in paragraph (d) of this section), unless it is shown that such statement was made or reaffirmed without a reasonable basis or was disclosed other than in good faith.
(b) This section applies to the following statements:
(1) A forward-looking statement (as defined in paragraph (c) of this section) made in a proxy statement or offering circular filed with the OCC under part 192 of this chapter; in a registration statement filed with the OCC under the Act on Form 10 (17 CFR 249.210); in part I of a quarterly report filed with the OCC on Form 10-Q (17 CFR 249.308a); in an annual report to shareholders meeting the requirements of § 194.1 of this part, particularly 17 CFR 240.14a-3 (b) and (c) or 17 CFR 240.14c-3 (a) and (b) under the Act; in a statement reaffirming such forward-looking statement subsequent to the date the document was filed or the annual report was made publicly available; or a forward-looking statement made prior to the date the document was filed or the date the annual report was made publicly available if such statement is reaffirmed in a filed document or annual report made publicly available within a reasonable time after the making of such forward-looking statement:
(i) At the time such statements are made or reaffirmed, either:
(A) The issuer is subject to the reporting requirements of section 13(a) or 15(d) of the Act and has complied with the requirements of 17 CFR 240.13a-1 or 240.15d-1 thereunder, if applicable, to file its most recent annual report on Form 10-K; or
(B) If the issuer is not subject to the reporting requirements of section 13(a) or 15(d) of the Act, the statements are made either in a registration statement filed under part 197 of this chapter or pursuant to section 12 (b) or (g) of the Act, or in a proxy statement or offering circular filed with the OCC under part 192 of this chapter if such statements are reaffirmed in a registration statement under the Act on Form 10, filed with the OCC within 180 days of the Federal savings association's conversion, and
(ii) The statements are not made by or on behalf of an issuer that is an investment company registered under the Investment Company Act of 1940;
(2) Information relating to the effects of changing prices on the business enterprise presented voluntarily or pursuant to item 303 of Regulation S-K (17 CFR 229.303), management's discussion and analysis of financial condition and results of operations, or item 302 of Regulation S-K (17 CFR 229.302), supplementary financial information, and disclosed in a document filed with the OCC or in an annual report to shareholders meeting the requirements of 17 CFR 240.14a-3 (b) and (c) or 17 CFR 240.14c-3 (a) and (b) under the Act:
(c) For purposes of this section, the term “forward-looking statement” shall mean and shall be limited to:
(1) A statement containing a projection of revenues, income (loss), earnings (loss) per share, capital expenditures, dividends, capital structure, or other financial items;
(2) A statement of management's plans and objectives for future operations;
(3) A statement of future economic performance contained in management's discussion and analysis of financial condition and results of operations pursuant to item 303 of Regulation S-K; or
(4) A statement of the assumptions underlying or relating to any of the statements described in paragraph (c)(1), (c)(2), or (c)(3) of this section.
(d) For purposes of this section, the term “fraudulent statement” shall mean a statement which is an untrue statement of a material fact, a statement false or misleading with respect to any material fact, an omission to state a material fact necessary to make a statement not misleading, or which constitutes the employment of a manipulative, deceptive, or fraudulent device, contrivance, scheme, transaction, act, practice, course of business, or an artifice to defraud, as those terms are used in the Securities Act of 1933 or the rules or regulations promulgated thereunder.
The financial statements required to be contained in filings with the OCC under the Act are as set out in the applicable form and Regulation S-X, 17 CFR part 210. Those financial statements, however, shall conform as to form and content to the requirements of § 193.1 of this chapter.
This subpart contains interpretations pertaining to the requirements of the
(a) This section applies to the description-of-business portion of:
(1) Registration statements filed on Form 10 (item 1) (17 CFR 249.210),
(2) Proxy and information statements relating to mergers, consolidations, acquisitions, and similar matters (item 14 of Schedule 14A and item 1 of Schedule 14C) (17 CFR 240.14a-101 and 240.14c-101), and
(3) Annual reports filed on Form 10-K (item 7) (17 CFR 249.310).
(b) The description of business should conform to the description of business required by item 7 of Form PS under part 192 of this chapter.
(c) No repetitive disclosure is required by virtue of similar requirements in item 7 of Form PS and items 301 and 303 of Regulation S-K (17 CFR 229.301, 303). However, there should be included appropriate disclosure which arises by virtue of the registrant being a stock Federal savings association. For example, the table regarding return on equity and assets, item 7(d)(5), should include a line item for “dividend payout ratio (dividends declared per share divided by net income per share).”
12 U.S.C. 1462a, 1463, 1464, 1814, 1816, 1828(c), 2901 through 2908, 5412(b)(2)(B).
(a)
(b)
(1) Establishing the framework and criteria by which the appropriate Federal banking agency assesses a savings association's record of helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the savings association; and
(2) Providing that the appropriate Federal banking agency takes that record into account in considering certain applications.
(c)
(2)
For purposes of this part, the following definitions apply:
(a)
(b)
(1) The median family income for the MSA, if a person or geography is located in an MSA, or for the metropolitan division, if a person or geography is located in an MSA that has been subdivided into metropolitan divisions; or
(2) The statewide nonmetropolitan median family income, if a person or geography is located outside an MSA.
(c)
(d)
(e) [Reserved]
(f)
(g)
(1) Affordable housing (including multifamily rental housing) for low or moderate-income individuals;
(2) Community services targeted to low- or moderate-income individuals;
(3) Activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration's Development Company or Small Business Investment Company programs (13 CFR 121.301) or have gross annual revenues of $1 million or less;
(4) Activities that revitalize or stabilize—
(i) Low- or moderate-income geographies;
(ii) Designated disaster areas; or
(iii) Distressed or underserved, nonmetropolitan middle-income geographies designated by the appropriate Federal banking agency based on—
(A) Rates of poverty, unemployment, and population loss; or
(B) Population size, density, and dispersion. Activities revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of
(5) Loans, investments, and services that—
(i) Support, enable or facilitate projects or activities that meet the “eligible uses” criteria described in Section 2301(c) of the Housing and Economic Recovery Act of 2008 (HERA), Public Law 110-289, 122 Stat. 2654, as amended, and are conducted in designated target areas identified in plans approved by the United States Department of Housing and Urban Development in accordance with the Neighborhood Stabilization Program (NSP);
(ii) Are provided no later than two years after the last date funds appropriated for the NSP are required to be spent by grantees; and
(iii) Benefit low-, moderate-, and middle-income individuals and geographies in the savings association's assessment area(s) or areas outside the savings association's assessment area(s) provided the savings association has adequately addressed the community development needs of its assessment area(s).
(h)
(1) Has as its primary purpose community development; and
(2) Except in the case of a wholesale or limited purpose savings association:
(i) Has not been reported or collected by the savings association or an affiliate for consideration in the savings association's assessment as a home mortgage, small business, small farm, or consumer loan, unless it is a multifamily dwelling loan (as described in appendix A to part 203 of this title); and
(ii) Benefits the savings association's assessment area(s) or a broader statewide or regional area that includes the savings association's assessment area(s).
(i)
(1) Has as its primary purpose community development;
(2) Is related to the provision of financial services; and
(3) Has not been considered in the evaluation of the savings association's retail banking services under § 195.24(d).
(j)
(1)
(2)
(3)
(4)
(5)
(k)
(l)
(m)
(1)
(2)
(3)
(4)
(n)
(o)
(1) A consumer loan is located in the geography where the borrower resides;
(2) A home mortgage loan is located in the geography where the property to which the loan relates is located; and
(3) A small business or small farm loan is located in the geography where the main business facility or farm is located or where the loan proceeds otherwise will be applied, as indicated by the borrower.
(p)
(q)
(r)
(s)
(t)
(u)
(2)
(v)
(w)
(x)
(a)
(1)
(2)
(3)
(4)
(b)
(1) Demographic data on median income levels, distribution of household income, nature of housing stock, housing costs, and other relevant data pertaining to a savings association's assessment area(s);
(2) Any information about lending, investment, and service opportunities in the savings association's assessment area(s) maintained by the savings association or obtained from community organizations, state, local, and tribal governments, economic development agencies, or other sources;
(3) The savings association's product offerings and business strategy as determined from data provided by the savings association;
(4) Institutional capacity and constraints, including the size and financial condition of the savings association, the economic climate (national, regional, and local), safety and soundness limitations, and any other factors that significantly affect the savings association's ability to provide lending, investments, or services in its assessment area(s);
(5) The savings association's past performance and the performance of similarly situated lenders;
(6) The savings association's public file, as described in § 195.43, and any written comments about the savings association's CRA performance submitted to the savings association or the appropriate Federal banking agency; and
(7) Any other information deemed relevant by the appropriate Federal banking agency.
(c)
(d)
(e)
(f)
(a)
(2) The appropriate Federal banking agency considers originations and purchases of loans. The appropriate Federal banking agency will also consider any other loan data the savings association may choose to provide, including data on loans outstanding, commitments and letters of credit.
(3) A savings association may ask the appropriate Federal banking agency to consider loans originated or purchased by consortia in which the savings association participates or by third parties in which the savings association has invested only if the loans meet the definition of community development loans and only in accordance with paragraph (d) of this section. The appropriate Federal banking agency will not consider these loans under any criterion of the lending test except the community development lending criterion.
(b)
(1)
(2)
(i) The proportion of the savings association's lending in the savings association's assessment area(s);
(ii) The dispersion of lending in the savings association's assessment area(s); and
(iii) The number and amount of loans in low-, moderate-, middle-, and upper-income geographies in the savings association's assessment area(s);
(3)
(i) Home mortgage loans to low-, moderate-, middle-, and upper-income individuals;
(ii) Small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;
(iii) Small business and small farm loans by loan amount at origination; and
(iv) Consumer loans, if applicable, to low-, moderate-, middle-, and upper-income individuals;
(4)
(5)
(c)
(2) The appropriate Federal banking agency considers affiliate lending subject to the following constraints:
(i) No affiliate may claim a loan origination or loan purchase if another institution claims the same loan origination or purchase; and
(ii) If a savings association elects to have the appropriate Federal banking agency consider loans within a particular lending category made by one or more of the savings association's affiliates in a particular assessment area, the savings association shall elect to have the appropriate Federal banking agency consider, in accordance with paragraph (c)(1) of this section, all the loans within that lending category in that particular assessment area made by all of the savings association's affiliates.
(3) The appropriate Federal banking agency does not consider affiliate lending in assessing a savings association's performance under paragraph (b)(2)(i) of this section.
(d)
(1) Will be considered, at the savings association's option, if the savings association reports the data pertaining to these loans under § 195.42(b)(2); and
(2) May be allocated among participants or investors, as they choose, for purposes of the lending test, except that no participant or investor:
(i) May claim a loan origination or loan purchase if another participant or investor claims the same loan origination or purchase; or
(ii) May claim loans accounting for more than its percentage share (based on the level of its participation or investment) of the total loans originated by the consortium or third party.
(e)
(a)
(b)
(c)
(d)
(e)
(1) The dollar amount of qualified investments;
(2) The innovativeness or complexity of qualified investments;
(3) The responsiveness of qualified investments to credit and community development needs; and
(4) The degree to which the qualified investments are not routinely provided by private investors.
(f)
(a)
(b)
(c)
(d)
(1) The current distribution of the savings association's branches among low-, moderate-, middle-, and upper-income geographies;
(2) In the context of its current distribution of the savings association's branches, the savings association's record of opening and closing branches, particularly branches located in low- or moderate-income geographies or primarily serving low- or moderate-income individuals;
(3) The availability and effectiveness of alternative systems for delivering retail banking services (
(4) The range of services provided in low-, moderate-, middle-, and upper-income geographies and the degree to which the services are tailored to meet the needs of those geographies.
(e)
(1) The extent to which the savings association provides community development services; and
(2) The innovativeness and responsiveness of community development services.
(f)
(a)
(b)
(c)
(1) The number and amount of community development loans (including originations and purchases of loans and other community development loan data provided by the savings association, such as data on loans outstanding, commitments, and letters of credit), qualified investments, or community development services;
(2) The use of innovative or complex qualified investments, community development loans, or community development services and the extent to which the investments are not routinely provided by private investors; and
(3) The savings association's responsiveness to credit and community development needs.
(d)
(1) Qualified investments or community development services provided by an affiliate of the savings association, if the investments or services are not claimed by any other institution; and
(2) Community development lending by affiliates, consortia and third parties, subject to the requirements and limitations in § 195.22(c) and (d).
(e)
(2)
(f)
(a)
(2)
(b)
(1) The savings association's loan-to-deposit ratio, adjusted for seasonal variation, and, as appropriate, other lending-related activities, such as loan originations for sale to the secondary markets, community development loans, or qualified investments;
(2) The percentage of loans and, as appropriate, other lending-related activities located in the savings association's assessment area(s);
(3) The savings association's record of lending to and, as appropriate, engaging in other lending-related activities for borrowers of different income levels and businesses and farms of different sizes;
(4) The geographic distribution of the savings association's loans; and
(5) The savings association's record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment area(s).
(c)
(1) The number and amount of community development loans;
(2) The number and amount of qualified investments;
(3) The extent to which the savings association provides community development services; and
(4) The savings association's responsiveness through such activities to community development lending, investment, and services needs.
(d)
(a)
(1) The savings association has submitted the plan to the appropriate Federal banking agency as provided for in this section;
(2) The appropriate Federal banking agency has approved the plan;
(3) The plan is in effect; and
(4) The savings association has been operating under an approved plan for at least one year.
(b)
(c)
(2)
(3)
(d)
(1) Informally seek suggestions from members of the public in its assessment area(s) covered by the plan while developing the plan;
(2) Once the savings association has developed a plan, formally solicit public comment on the plan for at least 30 days by publishing notice in at least one newspaper of general circulation in each assessment area covered by the plan; and
(3) During the period of formal public comment, make copies of the plan available for review by the public at no cost at all offices of the savings association in any assessment area covered by the plan and provide copies of the plan upon request for a reasonable fee to cover copying and mailing, if applicable.
(e)
(f)
(ii) A savings association shall address in its plan all three performance categories and, unless the savings association has been designated as a wholesale or limited purpose savings association, shall emphasize lending and lending-related activities. Nevertheless, a different emphasis, including a focus on one or more performance categories, may be appropriate if responsive to the characteristics and credit needs of its assessment area(s), considering public comment and the savings association's capacity and constraints, product offerings, and business strategy.
(2)
(3)
(4)
(g)
(2)
(3)
(i) The extent and breadth of lending or lending-related activities, including, as appropriate, the distribution of loans among different geographies, businesses and farms of different sizes, and individuals of different income levels, the extent of community development lending, and the use of innovative or flexible lending practices to address credit needs;
(ii) The amount and innovativeness, complexity, and responsiveness of the savings association's qualified investments; and
(iii) The availability and effectiveness of the savings association's systems for delivering retail banking services and the extent and innovativeness of the savings association's community development services.
(h)
(i)
(a)
(b)
(1) A savings association that receives an “outstanding” rating on the lending test receives an assigned rating of at least “satisfactory”;
(2) A savings association that receives an “outstanding” rating on both the service test and the investment test and a rating of at least “high satisfactory” on the lending test receives an assigned rating of “outstanding”; and
(3) No savings association may receive an assigned rating of “satisfactory” or higher unless it receives a rating of at least “low satisfactory” on the lending test.
(c)
(i) Discrimination against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair Housing Act;
(ii) Violations of the Home Ownership and Equity Protection Act;
(iii) Violations of section 5 of the Federal Trade Commission Act;
(iv) Violations of section 8 of the Real Estate Settlement Procedures Act; and
(v) Violations of the Truth in Lending Act provisions regarding a consumer's right of rescission.
(2) In determining the effect of evidence of practices described in paragraph (c)(1) of this section on the savings association's assigned rating, the appropriate Federal banking agency considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the savings association (or affiliate, as applicable) has in place to prevent the practices; any corrective action that the savings association (or affiliate, as applicable) has taken or has committed to take, including voluntary corrective action resulting from self-assessment; and any other relevant information.
(a)
(1) The establishment of a domestic branch or other facility that would be authorized to take deposits;
(2) The relocation of the main office or a branch;
(3) The merger or consolidation with or the acquisition of the assets or assumption of the liabilities of an insured depository institution requiring appropriate Federal banking agency approval under the Bank Merger Act (12 U.S.C. 1828(c));
(4) A Federal thrift charter; and
(5) Acquisitions subject to section 10(e) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)).
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(1) Consist generally of one or more MSAs or metropolitan divisions (using the MSA or metropolitan division boundaries that were in effect as of January 1 of the calendar year in which the delineation is made) or one or more contiguous political subdivisions, such as counties, cities, or towns; and
(2) Include the geographies in which the savings association has its main office, its branches, and its deposit-taking ATMs, as well as the surrounding geographies in which the savings association has originated or purchased a substantial portion of its loans (including home mortgage loans, small business and small farm loans, and any other loans the savings association chooses, such as those consumer loans on which the savings association elects to have its performance assessed).
(d)
(e)
(1) Must consist only of whole geographies;
(2) May not reflect illegal discrimination;
(3) May not arbitrarily exclude low- or moderate-income geographies, taking into account the savings association's size and financial condition; and
(4) May not extend substantially beyond an MSA boundary or beyond a state boundary unless the assessment area is located in a multistate MSA. If a savings association serves a geographic area that extends substantially beyond a state boundary, the savings association shall delineate separate assessment areas for the areas in each state. If a savings association serves a geographic area that extends substantially beyond an MSA boundary, the savings association shall delineate separate assessment areas for the areas inside and outside the MSA.
(f)
(g)
(a)
(1) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file;
(2) The loan amount at origination;
(3) The loan location; and
(4) An indicator whether the loan was to a business or farm with gross annual revenues of $1 million or less.
(b)
(1)
(i) With an amount at origination of $100,000 or less;
(ii) With amount at origination of more than $100,000 but less than or equal to $250,000;
(iii) With an amount at origination of more than $250,000; and
(iv) To businesses and farms with gross annual revenues of $1 million or less (using the revenues that the savings association considered in making its credit decision);
(2)
(3)
(c)
(i) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file;
(ii) The loan amount at origination or purchase;
(iii) The loan location; and
(iv) The gross annual income of the borrower that the savings association considered in making its credit decision.
(2)
(d)
(e)
(f)
(g)
(h)
(1) For each county (and for each assessment area smaller than a county) with a population of 500,000 persons or fewer in which the savings association reported a small business or small farm loan:
(i) The number and amount of small business and small farm loans reported as originated or purchased located in low-, moderate-, middle-, and upper-income geographies;
(ii) A list grouping each geography according to whether the geography is low-, moderate-, middle-, or upper-income;
(iii) A list showing each geography in which the savings association reported a small business or small farm loan; and
(iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;
(2) For each county (and for each assessment area smaller than a county) with a population in excess of 500,000 persons in which the savings association reported a small business or small farm loan:
(i) The number and amount of small business and small farm loans reported as originated or purchased located in geographies with median income relative to the area median income of less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more;
(ii) A list grouping each geography in the county or assessment area according to whether the median income in the geography relative to the area median income is less than 10 percent, 10 or more but less than 20 percent, 20 or more but less than 30 percent, 30 or more but less than 40 percent, 40 or more but less than 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more but less than 80 percent, 80 or more but less than 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more but less than 120 percent, and 120 percent or more;
(iii) A list showing each geography in which the savings association reported a small business or small farm loan; and
(iv) The number and amount of small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less;
(3) The number and amount of small business and small farm loans located inside each assessment area reported by the savings association and the number and amount of small business and small farm loans located outside the assessment area(s) reported by the savings association; and
(4) The number and amount of community development loans reported as originated or purchased.
(i)
(j)
(a)
(1) All written comments received from the public for the current year and each of the prior two calendar years that specifically relate to the savings association's performance in helping to meet community credit needs, and any response to the comments by the savings association, if neither the comments nor the responses contain statements that reflect adversely on the good name or reputation of any persons other than the savings association or publication of which would violate specific provisions of law;
(2) A copy of the public section of the savings association's most recent CRA Performance Evaluation prepared by the appropriate Federal banking agency. The savings association shall place this copy in the public file within 30 business days after its receipt from the appropriate Federal banking agency;
(3) A list of the savings association's branches, their street addresses, and geographies;
(4) A list of branches opened or closed by the savings association during the current year and each of the prior two calendar years, their street addresses, and geographies;
(5) A list of services (including hours of operation, available loan and deposit products, and transaction fees) generally offered at the savings association's branches and descriptions of material differences in the availability or cost of services at particular branches, if any. At its option, a savings association may include information regarding the availability of alternative systems for delivering retail banking services (
(6) A map of each assessment area showing the boundaries of the area and identifying the geographies contained within the area, either on the map or in a separate list; and
(7) Any other information the savings association chooses.
(b)
(i) If the savings association has elected to have one or more categories of its consumer loans considered under the lending test, for each of these categories, the number and amount of loans:
(A) To low-, moderate-, middle-, and upper-income individuals;
(B) Located in low-, moderate-, middle-, and upper-income census tracts; and
(C) Located inside the savings association's assessment area(s) and outside the savings association's assessment area(s); and
(ii) The savings association's CRA Disclosure Statement. The savings association shall place the statement in the public file within three business days of its receipt from the appropriate Federal banking agency.
(2)
(3)
(i) The savings association's loan-to-deposit ratio for each quarter of the prior calendar year and, at its option, additional data on its loan-to-deposit ratio; and
(ii) The information required for other savings associations by paragraph (b)(1) of this section, if the savings association has elected to be evaluated under the lending, investment, and service tests.
(4)
(5)
(c)
(1) At the main office and, if an interstate savings association, at one branch office in each state, all information in the public file; and
(2) At each branch:
(i) A copy of the public section of the savings association's most recent CRA Performance Evaluation and a list of services provided by the branch; and
(ii) Within five calendar days of the request, all the information in the public file relating to the assessment area in which the branch is located.
(d)
(e)
A savings association shall provide in the public lobby of its main office and each of its branches the appropriate public notice set forth in Appendix B of this part. Only a branch of a savings association having more than one assessment area shall include the bracketed material in the notice for branch offices. Only a savings association that is an affiliate of a holding company shall include the last two sentences of the notices.
The appropriate Federal banking agency publishes at least 30 days in advance of the beginning of each calendar quarter a list of savings associations scheduled for CRA examinations in that quarter.
(a)
(2) A savings association's performance need not fit each aspect of a particular rating profile in order to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others. The savings association's overall performance, however, must be consistent with safe and sound banking practices and generally with the appropriate rating profile as follows.
(b)
(i)
(A) Excellent responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);
(B) A substantial majority of its loans are made in its assessment area(s);
(C) An excellent geographic distribution of loans in its assessment area(s);
(D) An excellent distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association;
(E) An excellent record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;
(F) Extensive use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and
(G) It is a leader in making community development loans.
(ii)
(A) Good responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);
(B) A high percentage of its loans are made in its assessment area(s);
(C) A good geographic distribution of loans in its assessment area(s);
(D) A good distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association;
(E) A good record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;
(F) Use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and
(G) It has made a relatively high level of community development loans.
(iii)
(A) Adequate responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);
(B) An adequate percentage of its loans are made in its assessment area(s);
(C) An adequate geographic distribution of loans in its assessment area(s);
(D) An adequate distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association;
(E) An adequate record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;
(F) Limited use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and
(G) It has made an adequate level of community development loans.
(iv)
(A) Poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);
(B) A small percentage of its loans are made in its assessment area(s);
(C) A poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s);
(D) A poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association;
(E) A poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;
(F) Little use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and
(G) It has made a low level of community development loans.
(v)
(A) A very poor responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small business, small farm, and consumer loans, if applicable, in its assessment area(s);
(B) A very small percentage of its loans are made in its assessment area(s);
(C) A very poor geographic distribution of loans, particularly to low- or moderate-income geographies, in its assessment area(s);
(D) A very poor distribution, particularly in its assessment area(s), of loans among individuals of different income levels and businesses (including farms) of different sizes, given the product lines offered by the savings association;
(E) A very poor record of serving the credit needs of highly economically disadvantaged areas in its assessment area(s), low-income individuals, or businesses (including farms) with gross annual revenues of $1 million or less, consistent with safe and sound operations;
(F) No use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies; and
(G) It has made few, if any, community development loans.
(2)
(i)
(A) An excellent level of qualified investments, particularly those that are not routinely provided by private investors, often in a leadership position;
(B) Extensive use of innovative or complex qualified investments; and
(C) Excellent responsiveness to credit and community development needs.
(ii)
(A) A significant level of qualified investments, particularly those that are not routinely provided by private investors, occasionally in a leadership position;
(B) Significant use of innovative or complex qualified investments; and
(C) Good responsiveness to credit and community development needs.
(iii)
(A) An adequate level of qualified investments, particularly those that are not routinely provided by private investors, although rarely in a leadership position;
(B) Occasional use of innovative or complex qualified investments; and
(C) Adequate responsiveness to credit and community development needs.
(iv)
(A) A poor level of qualified investments, particularly those that are not routinely provided by private investors;
(B) Rare use of innovative or complex qualified investments; and
(C) Poor responsiveness to credit and community development needs.
(v)
(A) Few, if any, qualified investments, particularly those that are not routinely provided by private investors;
(B) No use of innovative or complex qualified investments; and
(C) Very poor responsiveness to credit and community development needs.
(3)
(i)
(A) Its service delivery systems are readily accessible to geographies and individuals of different income levels in its assessment area(s);
(B) To the extent changes have been made, its record of opening and closing branches has improved the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;
(C) Its services (including, where appropriate, business hours) are tailored to the convenience and needs of its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and
(D) It is a leader in providing community development services.
(ii)
(A) Its service delivery systems are accessible to geographies and individuals of different income levels in its assessment area(s);
(B) To the extent changes have been made, its record of opening and closing branches has not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderate-income individuals;
(C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderate-income geographies and low- and moderate-income individuals; and
(D) It provides a relatively high level of community development services.
(iii)
(A) Its service delivery systems are reasonably accessible to geographies and individuals of different income levels in its assessment area(s);
(B) To the extent changes have been made, its record of opening and closing branches has generally not adversely affected the accessibility of its delivery systems, particularly in low- and moderate-income geographies and to low- and moderate-income individuals;
(C) Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderate-income geographies and low- and moderate-income individuals; and
(D) It provides an adequate level of community development services.
(iv)
(A) Its service delivery systems are unreasonably inaccessible to portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals;
(B) To the extent changes have been made, its record of opening and closing branches has adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;
(C) Its services (including, where appropriate, business hours) vary in a way that inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and
(D) It provides a limited level of community development services.
(v)
(A) Its service delivery systems are unreasonably inaccessible to significant portions of its assessment area(s), particularly to low- or moderate-income geographies or to low- or moderate-income individuals;
(B) To the extent changes have been made, its record of opening and closing branches has significantly adversely affected the accessibility of its delivery systems, particularly in low- or moderate-income geographies or to low- or moderate-income individuals;
(C) Its services (including, where appropriate, business hours) vary in a way that significantly inconveniences its assessment area(s), particularly low- or moderate-income geographies or low- or moderate-income individuals; and
(D) It provides few, if any, community development services.
(c)
(1)
(i) A high level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;
(ii) Extensive use of innovative or complex qualified investments, community development loans, or community development services; and
(iii) Excellent responsiveness to credit and community development needs in its assessment area(s).
(2)
(i) An adequate level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;
(ii) Occasional use of innovative or complex qualified investments, community development loans, or community development services; and
(iii) Adequate responsiveness to credit and community development needs in its assessment area(s).
(3)
(i) A poor level of community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;
(ii) Rare use of innovative or complex qualified investments, community development loans, or community development services; and
(iii) Poor responsiveness to credit and community development needs in its assessment area(s).
(4)
(i) Few, if any, community development loans, community development services, or qualified investments, particularly investments that are not routinely provided by private investors;
(ii) No use of innovative or complex qualified investments, community development loans, or community development services; and
(iii) Very poor responsiveness to credit and community development needs in its assessment area(s).
(d)
(A) A reasonable loan-to-deposit ratio (considering seasonal variations) given the savings association's size, financial condition, the credit needs of its assessment area(s), and taking into account, as appropriate, other lending-related activities such as loan originations for sale to the secondary markets and community development loans and qualified investments;
(B) A majority of its loans and, as appropriate, other lending-related activities, are in its assessment area;
(C) A distribution of loans to and, as appropriate, other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of different sizes that is reasonable given the demographics of the savings association's assessment area(s);
(D) A record of taking appropriate action, when warranted, in response to written complaints, if any, about the savings association's performance in helping to meet the credit needs of its assessment area(s); and
(E) A reasonable geographic distribution of loans given the savings association's assessment area(s).
(ii)
(iii)
(2)
(ii)
(iii)
(3)
(ii)
(B) A small savings association that is not an intermediate small savings association that meets each of the standards for a “satisfactory” rating under the lending test and exceeds some or all of those standards may warrant consideration for an overall rating of “outstanding.” In assessing whether a savings association's performance is “outstanding,” the appropriate Federal banking agency considers the extent to which the savings association exceeds each of the performance standards for a “satisfactory” rating and its performance in making qualified investments and its performance in providing branches and other services and delivery systems that enhance credit availability in its assessment area(s).
(iii)
(e)
(2)
(3)
(i) If the savings association substantially achieves its plan goals for a satisfactory rating, the appropriate Federal banking agency will rate the savings association's performance under the plan as “satisfactory.”
(ii) If the savings association exceeds its plan goals for a satisfactory rating and substantially achieves its plan goals for an outstanding rating, the appropriate Federal banking agency will rate the savings association's performance under the plan as “outstanding.”
(iii) If the savings association fails to meet substantially its plan goals for a satisfactory rating, the appropriate Federal banking agency will rate the savings association as either “needs to improve” or “substantial noncompliance,” depending on the extent to which it falls short of its plan goals, unless the savings association elected in its plan to be rated otherwise, as provided in § 195.27(f)(4).
(a)
Under the Federal Community Reinvestment Act (CRA), the [Office of the Comptroller of the Currency (OCC) or Federal Deposit Insurance Corporation (FDIC)] evaluates our record of helping to meet the credit needs of this community consistent with safe and sound operations. The [OCC or FDIC] also takes this record into account when deciding on certain applications submitted by us.
Your involvement is encouraged.
You are entitled to certain information about our operations and our performance under the CRA, including, for example, information about our branches, such as their location and services provided at them; the public section of our most recent CRA Performance Evaluation, prepared by the [OCC or FDIC]; and comments received from the public relating to our performance in helping to meet community credit needs, as well as our responses to those comments. You may review this information today.
At least 30 days before the beginning of each quarter, the [OCC or FDIC] publishes a nationwide list of the savings associations that are scheduled for CRA examination in that quarter. This list is available from the [OCC Deputy Comptroller (address) or FDIC appropriate regional director (address)]. You may send written comments about our performance in helping to meet community credit needs to (name and address of official at savings association) and the [OCC Deputy Comptroller (address) or FDIC appropriate regional director (address)]. Your letter, together with any response by us, will be considered by the [OCC or FDIC] in evaluating our CRA performance and may be made public.
You may ask to look at any comments received by the [OCC Deputy Comptroller or FDIC appropriate regional director]. You may also request from the [OCC Deputy Comptroller or FDIC appropriate regional director] an announcement of our applications covered by the CRA filed with the [OCC or FDIC]. We are an affiliate of (name of holding company), a savings and loan holding company. You may request from the (title of responsible official), Federal Reserve Bank of ____ (address) an announcement of applications covered by the CRA filed by savings and loan holding companies.
(b)
Under the Federal Community Reinvestment Act (CRA), the [Office of the Comptroller of the Currency (OCC) or Federal Deposit Insurance Corporation (FDIC)] evaluates our record of helping to meet the credit needs of this community consistent with safe and sound operations. The [OCC or FDIC] also takes this record into account when deciding on certain applications submitted by us.
Your involvement is encouraged.
You are entitled to certain information about our operations and our performance under the CRA. You may review today the public section of our most recent CRA evaluation, prepared by the [OCC or FDIC] and a list of services provided at this branch. You may also have access to the following additional information, which we will make available to you at this branch within five calendar days after you make a request to us: (1) A map showing the assessment area containing this branch, which is the area in which the [OCC or FDIC] evaluates our CRA performance in this community; (2) information about our branches in this assessment area; (3) a list of services we provide at those locations; (4) data on our lending performance in this assessment area;
[If you would like to review information about our CRA performance in other communities served by us, the public file for our entire savings association is available at (name of office located in state), located at (address).]
At least 30 days before the beginning of each quarter, the [OCC or FDIC] publishes a nationwide list of the savings associations that are scheduled for CRA examination in that quarter. This list is available from the [OCC Deputy Comptroller (address) or FDIC appropriate regional office (address)]. You may send written comments about our performance in helping to meet community credit needs to (name and address of official at savings association) and the [OCC or FDIC]. Your letter, together with any response by us, will be considered by the [OCC or FDIC] in evaluating our CRA performance and may be made public.
You may ask to look at any comments received by the [OCC Deputy Comptroller or FDIC appropriate regional director]. You may also request an announcement of our applications covered by the CRA filed with the [OCC Deputy Comptroller or FDIC appropriate regional director]. We are an affiliate of (name of holding company), a savings and loan holding company. You may request from the (title of responsible official), Federal Reserve Bank of ____ (address) an announcement of applications covered by the CRA filed by savings and loan holding companies.
12 U.S.C. 3201-3208; 5412(b)(2)(B).
(a)
(b)
(c)
For purposes of this part, the following definitions apply:
(a)
(2) For purposes of section 202(3)(B) of the Interlocks Act (12 U.S.C. 3201(3)(B)), an affiliate relationship involving a savings association based on common ownership does not exist if the OCC determines, after giving the affected persons the opportunity to respond, that the asserted affiliation was established in order to avoid the prohibitions of the Interlocks Act and does not represent a true commonality of interest between the depository organizations. In making this determination, the OCC considers, among other things, whether a person, including members of his or her immediate family, whose shares are necessary to constitute the group owns a nominal percentage of the shares of one of the organizations and the percentage is substantially disproportionate to that person's ownership of shares in the other organization.
(b)
(1) The median family income for the metropolitan statistical area (MSA), if a depository organization is located in an MSA; or
(2) The statewide nonmetropolitan median family income, if a depository organization is located outside an MSA.
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(i) A director;
(ii) An advisory or honorary director of a depository institution with total assets of $100 million or more;
(iii) A senior executive officer as that term is defined in § 163.555 of this chapter;
(iv) A branch manager;
(v) A trustee of a depository organization under the control of trustees; and
(vi) Any person who has a representative or nominee serving in any of the capacities in this paragraph (j)(1).
(2) The term
(i) A person whose management functions relate exclusively to the business of retail merchandising or manufacturing;
(ii) A person whose management functions relate principally to the business outside the United States of a foreign commercial bank; or
(iii) A person described in the provisos of section 202(4) of the Interlocks Act (12 U.S.C. 3201(4)) (referring to an officer of a state-chartered savings bank, cooperative bank, or trust company that neither makes real estate mortgage loans nor accepts savings).
(k)
(l)
(m)
(n)
(o)
(1) Any Federal savings association (as defined in section 3(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(2));
(2) [Reserved]; and
(3) Any corporation (other than a bank as defined in section 3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1)) the deposits of which are insured by the Federal Deposit Insurance Corporation, that the Board of Directors of the Federal Deposit Insurance Corporation and the Comptroller of the Currency jointly determine to be operating in substantially the same manner as a Federal savings association.
(p)
(2) The term
(i) Assets of a diversified savings and loan holding company as defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)(F)) other than the assets of its depository institution affiliate;
(ii) Assets of a bank holding company that is exempt from the prohibitions of section 4 of the Bank Holding Company Act of 1956 pursuant to an order issued under section 4(d) of that Act (12 U.S.C. 1843(d)) other than the assets of its depository institution affiliate; or
(iii) Assets of offices of a foreign commercial bank other than the assets of its United States branch or agency.
(q)
(a)
(b)
(c)
The prohibitions of § 196.3 do not apply in the case of any one or more of the following organizations or to a subsidiary thereof:
(a) A depository organization that has been placed formally in liquidation, or which is in the hands of a receiver, conservator, or other official exercising a similar function;
(b) A corporation operating under section 25 or section 25A of the Federal Reserve Act (12 U.S.C. 601
(c) A credit union being served by a management official of another credit union;
(d) A depository organization that does not do business within the United States except as an incident to its activities outside the United States;
(e) A state-chartered savings and loan guaranty corporation;
(f) A Federal Home Loan Bank or any other bank organized solely to serve depository institutions (a bankers' bank) or solely for the purpose of providing securities clearing services and services related thereto for depository institutions and securities companies;
(g) A depository organization that is closed or is in danger of closing as determined by the appropriate Federal depository institutions regulatory agency and is acquired by another depository organization. This exemption lasts for five years, beginning on the date the depository organization is acquired;
(h)(1) A diversified savings and loan holding company (as defined in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)(F)) with respect to the service of a director of such company who also is a director of an unaffiliated depository organization if:
(i) Both the diversified savings and loan holding company and the unaffiliated depository organization notify their appropriate Federal depository institutions regulatory agency at least 60 days before the dual service is proposed to begin; and
(ii) The appropriate regulatory agency does not disapprove the dual service before the end of the 60-day period.
(2) The OCC may disapprove a notice of proposed service if it finds that:
(i) The service cannot be structured or limited so as to preclude an anticompetitive effect in financial services in any part of the United States;
(ii) The service would lead to substantial conflicts of interest or unsafe or unsound practices; or
(iii) The notificant failed to furnish all the information required by the OCC.
(3) The OCC may require that any interlock permitted under this paragraph (h) be terminated if a change in circumstances occurs with respect to one of the interlocked depository organizations that would have provided a basis for disapproval of the interlock during the notice period; and
(i) Any savings association which has issued stock in connection with a qualified stock issuance pursuant to section 10(q) of the Home Owners' Loan Act, except that this paragraph (i) shall apply only with regard to service as a single management official of such savings association, or any subsidiary of such savings association, by a single management official of the savings and loan holding company which purchased the stock issued in connection with
(a)
(1) The interlock is not prohibited by § 196.3(c); and
(2) The depository organizations (and their depository institution affiliates) hold, in the aggregate, no more than 20 percent of the deposits in each RMSA or community in which both depository organizations (or their depository institution affiliates) have offices. The amount of deposits shall be determined by reference to the most recent annual Summary of Deposits published by the FDIC for the RMSA or community.
(b)
(a)
(b)
(1) Primarily serves low- and moderate-income areas;
(2) Is controlled or managed by persons who are members of a minority group, or women;
(3) Is a depository institution that has been chartered for less than two years; or
(4) Is deemed to be in “troubled condition” as defined in § 163.555 of this chapter.
(c)
(a)
(b)
Except as provided in this section, the OCC administers and enforces the Interlocks Act with respect to savings associations and their affiliates, and may refer any case of a prohibited interlocking relationship involving these entities to the Attorney General of the United States to enforce compliance with the Interlocks Act and this part. If an affiliate of a savings association is subject to the primary regulation of another Federal depository organization supervisory agency, then the OCC does not administer and enforce the Interlocks Act with respect to that affiliate.
A management official or prospective management official of a depository organization may enter into an otherwise prohibited interlocking relationship with another depository organization for a period of up to 10 years if such relationship is approved by the Federal Deposit Insurance Corporation pursuant to section 13(k)(1)(A)(v) of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1823(k)(1)(A)(v)).
12 U.S.C. 1462a, 1463, 1464 5412(b)(2)(B); 15 U.S.C. 78c(b), 78
(a) For purposes of this part, the following definitions apply:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(b) A term not defined in this part but defined in another part of this chapter, when used in this part, shall have the meanings given in such other part, unless the context otherwise requires.
(c) When used in the rules, regulations, or forms of the Commission referred to in this part, the term
(a)
(1) The offer or sale is accompanied or preceded by an offering circular
(2) An exemption is available under this part.
(b)
(1) Prior to filing an offering circular, any notice of a proposed offering which satisfies the requirements of Commission Rule 135 (17 CFR 230.135) under the Securities Act;
(2) Subsequent to filing an offering circular, any notice circular, advertisement, letter, or other communication published or transmitted to any person which satisfies the requirements of Commission Rule 134 (17 CFR 230.134) under the Securities Act; and
(3) Oral offers of securities covered by an offering circular made after filing the offering circular with the OCC.
(c)
(1) The preliminary offering circular has been filed pursuant to this part;
(2) The preliminary offering circular includes the information required by this part, except for the omission of information relating to offering price, discounts or commissions, amount of proceeds, conversion rates, call prices, or other matters dependent on the offering price; and
(3) The offering circular declared effective by the OCC is furnished to the purchaser prior to, or simultaneously with, the sale of any such security.
The offering circular requirement of § 197.2 of this part shall not apply to an issuer's offer or sale of securities:
(a) [Reserved]
(b) Exempt from registration under either section 3(a) or section 4 of the Securities Act, but only by reason of an exemption other than section 3(a)(5) (for regulated savings associations), and section 3(a)(11) (for intrastate offerings) of the Securities Act;
(c) In a conversion from the mutual to the stock form of organization pursuant to part 192 of this chapter, except for a supervisory conversion undertaken pursuant to subpart C of part 192 of this chapter;
(d) In a non-public offering which satisfies the requirements of § 197.4 of this part;
(e) That are debt securities issued in denominations of $100,000 or more, which are fully collateralized by cash, any security issued, or guaranteed as to principal and interest, by the United States, the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Government National Mortgage Association or by interests in mortgage notes secured by real property;
(f) Distributed exclusively abroad to foreign nationals:
(g) To its officers, directors or employees pursuant to an employee benefit plan or a dividend or interest reinvestment plan, and provided that any such plan has been approved by the majority of shareholders present in person or by proxy at an annual or special meeting of the shareholders of the savings association.
Offers and sales of securities by an issuer that satisfy the conditions of paragraph (a) or (b) of this section and the requirements of paragraphs (c) and (d) of this section shall be deemed to be transactions not involving any public offering within the meaning of section 4(2) of the Securities Act and §§ 197.3(b) and 197.3(d) of this part. However, an issuer shall not be deemed to be not in compliance with the provisions of this section solely by reason of making an untimely filing of the notice required to be filed by paragraph (c) of this section so long as the notice is actually filed and all other conditions and requirements of this section are satisfied.
(a)
(b)
(1) Sales of the security are not made to more than 35 persons during the offering period, as determined under the integration provisions of Commission Rule 502(a) (17 CFR 230.502(a)). The number of purchasers referred to above is exclusive of any accredited investor, officer, director or affiliate of the issuer. For purposes of paragraph (b) of this section, a husband and wife (together with any custodian or trustee acting for the account of their minor children) are counted as one person and a partnership, corporation or other organization which was not specifically formed for the purpose of purchasing the security offered in reliance upon this exemption, is counted as one person.
(2) All purchasers either have a preexisting personal or business relationship with the issuer or any of its officers, directors or controlling persons, or by reason of their business or financial experience or the business or financial experience of their professional advisors who are unaffiliated with and who are not compensated by the issuer or any affiliate or selling agent of the issuer, directly or indirectly, could reasonably be assumed to have the capacity to protect their own interests in connection with the transaction.
(3) Each purchaser represents that the purchaser is purchasing for the purchaser's own account (or a trust account if the purchaser is a trustee) and not with a view to or for sale in connection with any distribution of the security.
(4) The offer and sale of the security is not accomplished by the publication of any advertisement.
(c)
(d)
(1) Reasonable inquiry to determine if the purchaser is acquiring the securities for the purchaser or for other persons;
(2) Written disclosure to each purchaser prior to the sale that the securities are not offered by an offering circular filed with, and declared effective by, the OCC pursuant to § 197.2 of this part, but instead are being sold in reliance upon the exemption from the offering circular requirement provided for by this section; and
(3) Placement of a legend on the certificate, or other document evidencing the securities, indicating
(a)
(b)
(i) For a
(ii) For an existing savings association, with the OCC's Securities and Corporate Practices Division.
(2) Within five days after the effective date of an offering circular or the commencement of a public offering after the effective date, whichever occurs later, four copies of the offering circular used shall be filed with the OCC, as described in (b)(1).
(3) After the effective date of an offering circular, an offering circular which varies from the form previously filed shall not be used, unless it includes only non-material supplemental or additional information and until 4 copies have been filed with the OCC in the manner required.
(c)
(i) The issuer, by its duly authorized representative;
(ii) The issuer's principal executive officer;
(iii) The issuer's principal financial officer;
(iv) The issuer's principal accounting officer; and
(v) At least a majority of the issuer's directors.
(2) Any other document filed pursuant to this part shall be signed by a person authorized to do so.
(3) At least one copy of every document filed pursuant to this part shall be manually signed, and every copy of a document filed shall:
(i) Have the name of each person who signs typed or printed beneath the signature;
(ii) State the capacity or capacities in which the signature is provided;
(iii) Provide the name of each director of the issuer, if a majority of directors is required to sign the document; and
(iv) With regard to any copies not manually signed, bear typed or printed signatures.
(a) Except as provided for in paragraph (d) of this section, an offering circular filed by a savings association shall be deemed to be automatically declared effective by the OCC on the twentieth day after filing or on such earlier date as the OCC may determine for good cause shown.
(b) If any amendment is filed prior to the effective date, the offering circular shall be deemed to have been filed when such amendment was filed.
(c) The period until automatic effectiveness under this section shall be stated at the bottom of the facing page of the Form OC or any amendment.
(d) The effectiveness will be delayed if a duly authorized amendment, telegram confirmed in writing, or letter states that the effective date is delayed until a further amendment is filed specifically stating that the offering circular will become effective in accordance with this section.
(e) An amendment filed after the effective date of the offering circular shall become effective on such date as the OCC may determine.
(f) If it appears to the OCC at any time that the offering circular includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, then the OCC may pursue any remedy it is authorized to pursue under section 5(d) of the Home Owners' Loan Act of 1933, as amended (12 U.S.C. 1464(d)) or section 8 of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1818), including, but not limited to, institution of cease-and-desist proceedings.
(a)
(1) Be filed under cover of Form OC, which is under part 192 of this chapter;
(2) Comply with the requirements of Items 3 and 4 of Form OC and the requirements of all items of the form for registration (17 CFR part 239) that the issuer would be eligible to use were it required to register the securities under the Securities Act;
(3) Comply with all item requirements of the Form S-1 (17 CFR part 239) for registration under the Securities Act, if the association issuing the securities is not in compliance with the OCC's regulatory capital requirements during the time the offering is made;
(4) Where a form specifies that the information required by an item in the Commission's Regulation S-K (17 CFR part 229) should be furnished, include such information and all of the information required by Item 7 of Form PS, which is under part 192 of this chapter;
(5) Include after the facing page of the Form OC a cross-reference sheet listing each item requirement of the form for registration under the Securities Act and indicate for each item the applicable heading or subheading in the offering circular under which the required information is disclosed;
(6) Include in part II of the Form OC the applicable undertakings required by the form for registration under the Securities Act;
(7) If the issuer has not previously been required to file reports pursuant to section 13(a) of the Exchange Act or § 197.18 of this part, include in part II of Form OC the following undertaking: “The issuer hereby undertakes, in connection with any distribution of the offering circular, to have a preliminary or effective offering circular including the information required by this part distributed to all persons expected to be mailed confirmations of sale not less than 48 hours prior to the time such confirmations are expected to be mailed”;
(8) In offerings involving the issuance of options, warrants, subscription rights or conversion rights within the meaning of § 197.1(a)(8) of this part, include in part II of Form OC an undertaking to provide a copy of the issuer's most recent audited financial statements to persons exercising such options, warrants or rights promptly upon receiving written notification of the exercise thereof;
(9) Include as supplemental information and not as part of the Form OC and only with respect to
(10) In addition to the information expressly required to be included by this section, there shall be added such further material information, if any, as may be necessary to make the required statements, in light of the circumstances
(b)
(a) An offering circular or amendment declared effective by the OCC shall not be used more than nine months after the effective date, unless the information contained therein is as of a date not more than 16 months prior to such use.
(b) An offering circular filed under § 197.5(b)(3) of this part shall not extend the period for which an effective offering circular or amendment may be used under paragraph (c) of this section.
(c) If any event arises, or change in fact occurs, after the effective date and such event or change in fact, individually or in the aggregate, results in the offering circular containing any untrue statement of material fact, or omitting to state a material fact necessary in order to make statements made in the offering circular not misleading under the circumstances, then no offering circular, which has been declared effective under this part, shall be used until an amendment reflecting such event or change in fact has been filed with, and declared effective by, the OCC.
(a) Any funds received in an offering which is offered and sold on a best efforts all-or-none condition or with a minimum-maximum amount to be sold shall be held in an escrow or similar separate account until such time as all of the securities are sold with respect to a best efforts all-or-none offering or the stated minimum amount of securities are sold in a minimum-maximum offering.
(b) If the amount of securities required to be sold under escrow conditions in paragraph (a) of this section are not sold within the time period for the offering as disclosed in the offering circular, all funds in the escrow account shall be promptly refunded unless the OCC otherwise approves an extension of the offering period upon a showing of good cause and provided that the extension is consistent with the public interest and the protection of investors.
(a) No person shall directly or indirectly,
(1) Employ any device, scheme or artifice to defraud,
(2) Make any untrue statement of a material fact or omit to state a material fact necessary in order to make statements made, in light of the circumstances under which they were made, not misleading, or
(3) Engage in any act, practice, or course of business which operates as a fraud or deceit upon any person, in connection with the purchase or sale of any security of a savings association.
(b) Violations of this section shall constitute an unsafe or unsound practice within the meaning of section (3)(a) of the Home Owners' Loan Act of 1933, as amended, 12 U.S.C. 1462a(a), and section 8 of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 1818.
(c) Nothing in this section shall be construed as a limitation on the applicability of section 10(b) of the Exchange Act (15 U.S.C. 78j(b)) or Rule 10b-5 promulgated thereunder (17 CFR 240.10b-5).
(a) Any offering circular, amendment, or exhibit may be withdrawn prior to the effective date. A withdrawal shall be signed and state the grounds upon which it is made. Any document withdrawn will not be removed from the files of the OCC, but will be marked “Withdrawn upon the request of the issuer on (date).”
(b) When an offering circular or amendment has been on file with the OCC for a period of nine months and has not become effective, the OCC may, in its discretion, determine whether the filing has been abandoned, after notifying the issuer that the filing is out of date and must either be amended to comply with the applicable requirements of this part or be withdrawn within 30 days after the date of such notice. When a filing is abandoned, the filing will not be removed from the files of the OCC, but will be marked “Declared abandoned by the OCC on (date).”
(a) Within 30 days after the first sale of the securities, every six months after such 30 day period and not later than 30 days after the later of the last sale of securities in an offering pursuant to § 197.2 of this part or the application of the proceeds therefrom, the issuer shall file with the OCC, a report describing the results of the sale of the securities and the application of the proceeds, which shall include all of the information required by Form G-12 set forth appendix A to this part and shall also include the following:
(1) The name, address, and docket number of the issuer;
(2) The title, number, aggregate and per-unit offering price of the securities sold;
(3) The aggregate and per-unit dollar amounts of actual itemized expenses, discounts or commissions, and other fees;
(4) The aggregate and per-unit dollar amounts of the net proceeds raised, and the use of proceeds therefrom; and
(5) The number of purchasers of each class of securities sold and the number of owners of record of each class of the issuer's equity securities after the issuance of the securities or termination of the offer.
(b) Within 30 days after the first sale of the securities, every six months after the first sale of the securities and not later than 30 days after the last sale of securities in an offering pursuant to § 197.4 of this part, the issuer shall file with the OCC a report describing the results of the sale of securities, which shall include all of the information required by Form G-12 set forth at appendix A to this part, and shall also include the following:
(1) All of the information required by paragraph (a) of this section; and
(2) A detailed statement of the factual and legal grounds for the exemption claimed.
(a) Any offering circular, amendment, exhibit, notice, or report filed pursuant to this part will be publicly available. Any other related documents will be treated in accordance with the provisions of the Freedom of Information Act (5 U.S.C. 552), the Privacy Act of 1974 (5 U.S.C. 552a), and part 4 of this chapter.
(b) Any requests for confidential treatment of information in a document required to be filed under this part shall be made as required under Commission Rule 24b-2 (17 CFR 240.24b-2) under the Exchange Act.
(a) The OCC may waive any requirement of this part, or any required information:
(1) Determined to be unnecessary by the OCC;
(2) In connection with a transaction approved by the OCC for supervisory reasons, or
(3) Where a provision of this part conflicts with a requirement of applicable state law.
(b) Any condition, stipulation or provision binding any person acquiring a security issued by a savings association which seeks to waive compliance with any provision of this
Any requests to the OCC for interpretive advice or a waiver with respect to any provision of this part shall satisfy the following requirements:
(a) A copy of the request, including any attachments, shall be filed consistent with the procedures in § 197.5 of this part;
(b) The provisions of this part to which the request relates, the participants in the proposed transaction, and the reasons for the request, shall be specifically identified or described; and
(c) The request shall include a legal opinion as to each legal issue raised and an accounting opinion as to each accounting issue raised.
Any offer or sale of securities under § 197.2 of this part may be made on a continuous or delayed basis in the future, if:
(a) The securities would satisfy all of the eligibility requirements of the Commission's Rule 415, 17 CFR 230.415; and
(b) The association issuing the securities is in compliance with the OCC's regulatory capital requirements during the time the offering is made.
Sales of securities of a savings association or its affiliates at an office of a savings association may only be made in accordance with the provisions of 12 CFR 197.76.
(a) Each savings association which files an offering circular which becomes effective pursuant to this part, after such effective date, shall file with the OCC periodic and current reports on Forms 8-K, 10-Q and 10-K as may be required by section 13 of the Exchange Act (15 U.S.C. 78m) as if the securities sold by such offering circular were securities registered pursuant to section 12 of the Exchange Act (15 U.S.C. 78
(b) For purposes of registering securities under section 12(b) or 12(g) of the Exchange Act, an issuer subject to the reporting requirements of paragraph (a) of this section may use the Commission's registration statement on Form 10 or Form 8-A or 8-B as applicable.
Any securities of a savings association which are not exempt under this part and are offered or sold pursuant to an offering circular which becomes effective under this part, are deemed to be approved as to form and terms for purposes of § 197.3 of this chapter.
A copy of the offering circular, or similar document, if any, used in connection with an offering exempt from the offering circular requirement of § 197.2 by reason of § 197.3(e) or § 197.4 of this part shall be mailed to the OCC, in the manner described in § 197.5, within 30 days after the first sale of such securities. Such copy of the offering circular, or similar document, is solely for the information of the OCC and shall not be deemed to be “filed” with the OCC pursuant to § 197.2 of this part. The mailing to the OCC of such offering circular, or similar document, shall not be a pre-condition of the applicable exemption from the offering circular requirements of § 197.2 of this part.
If in organization, state the date of FDIC certification of insurance of accounts: ____
State the title, number, aggregate and per-unit offering price of the securities sold: ____
State the aggregate and per-unit dollar amounts of actual itemized offering expenses, discounts, commissions, and other fees: ____
State the aggregate and per-unit dollar amounts of the net proceeds raised: ____
Describe the use of proceeds. If unknown, provide reasonable estimates of the dollar amount allocated to each purpose for which the proceeds will be used: ____
State the number of purchasers of each class of securities sold and the number of owners of record of each class of the issuer's equity securities at the close or termination of the offering: ____
For a non-public offering, also state the factual and legal grounds for the exemption claimed (attach additional pages if necessary): ____
For a non-public offering, all offering materials used should be listed: ____
This issuer has duly caused this securities sale report to be signed on its behalf by the undersigned person.
Instruction: Print the name and title of the signing representative under his or her signature. Ten copies of the securities sale report should be filed, including one copy manually signed, as required under 12 CFR 197.5.
Intentional misstatements or omissions of fact constitute violations of Federal law (
Fish and Wildlife Service, Interior.
Proposed rule; 12-month finding.
We, the U.S. Fish and Wildlife Service (Service), propose to list as endangered the Philippine cockatoo (
We will consider comments and information received or postmarked on or before October 11, 2011.
You may submit comments by one of the following methods:
•
•
We will not accept comments by e-mail or fax. We will post all comments on
Janine Van Norman, Chief, Branch of Foreign Species, Endangered Species Program, U.S. Fish and Wildlife Service, 4401 North Fairfax Drive, Room 420, Arlington, VA 22203; telephone 703-358-2171. If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800-877-8339.
Section 4(b)(3)(B) of the ESA (16 U.S.C. 1531
If the listing of a species is found to be warranted but precluded by higher-priority listing actions, then the petition to list that species is treated as if it is a petition that is resubmitted on the date of the finding and is, therefore, subject to a new 12-month finding within one year. The Service publishes an annual notice of resubmitted petition findings (annual notice) for all foreign species for which listings were previously found to be warranted but precluded.
In this document, we announce that listing Philippine cockatoo and yellow-crested cockatoo as endangered is warranted, and we are issuing a proposed rule to add those species as endangered under the Federal Lists of Endangered and Threatened Wildlife and Plants. We find that listing the crimson shining parrot as endangered or threatened is not warranted. We further find that listing white cockatoo as threatened is warranted, and we are issuing a proposed rule to add that species as threatened under the Federal Lists of Endangered and Threatened Wildlife and Plants.
Prior to issuing a final rule on this proposed action, we will take into consideration all comments and any additional information we receive. Such information may lead to a final rule that differs from this proposal. All comments and recommendations, including names and addresses of commenters, will become part of the administrative record.
On January 31, 2008, the Service received a petition dated January 29, 2008, from Friends of Animals, as represented by the Environmental Law Clinic, University of Denver, Sturm College of Law, requesting we list 14 parrot species under the ESA. The petition clearly identified itself as a petition and included the requisite information required in the Code of Federal Regulations (50 CFR 424.14(a)). On July 14, 2009 (74 FR 33957), we published a 90-day finding in which we determined that the petition presented substantial scientific and commercial information to indicate that listing may be warranted for 12 of the 14 parrot species. In our 90-day finding on this petition, we announced the initiation of a status review to list as endangered or threatened under the ESA the following 12 parrot species: Blue-headed macaw (
On July 21, 2010, a settlement agreement was approved by the Court (CV-10-357, D. D.C.), in which the Service agreed to (in part) submit to the
We intend that any final actions resulting from this proposed rule will be based on the best scientific and commercial data available. Therefore, we request comments or information from other concerned governmental agencies, the scientific community, or any other interested parties concerning this proposed rule. We particularly seek clarifying information concerning:
(1) Information on taxonomy, distribution, habitat selection and trends (especially breeding and foraging habitats), diet, and population abundance and trends (especially current recruitment data) of these species.
(2) Information on the effects of habitat loss and changing land uses on the distribution and abundance of these species (particularly the conversion of habitat to biofuel production on Halmahera Island and any data on Bacan Island related to the white cockatoo).
(3) Information on the effects of other potential threat factors, including live capture and hunting, domestic and international trade, predation by other animals, and any diseases that are known to affect these species or their principal food sources.
(4) Information on management programs for parrot conservation, including mitigation measures related to conservation programs, and any other private, nongovernmental, or governmental conservation programs that benefit these species.
(5) The potential effects of climate change on these species and their habitats.
Please include sufficient information with your submission (such as full references) to allow us to verify any scientific or commercial information you include. Submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination. Section 4(b)(1)(A) of the ESA directs that determinations as to whether any species is an endangered or threatened species must be made “solely on the basis of the best scientific and commercial data available.”
At this time, we do not have a public hearing scheduled for this proposed rule. The main purpose of most public hearings is to obtain public testimony or comment. In most cases, it is sufficient to submit comments through the Federal eRulemaking Portal, described above in the
Section 4 of the ESA (16 U.S.C. 1533) and implementing regulations (50 CFR 424) set forth procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the ESA, a species may be determined to be endangered or threatened based on any one or a combination of the following five factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
In considering what factors might constitute threats, we look beyond the actual or perceived exposure of the species to the factor to determine how the species responds to the factor and whether the factor causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat and we then attempt to determine how significant a factor it is. If the factor is significant, it may drive or contribute to the risk of extinction of the species such that it is considered to be a threat. In some cases, there is little information available regarding the status of the species, in part due to their remoteness.
This finding addresses the following four species of parrots: crimson shining parrot, Philippine cockatoo, white cockatoo, and yellow-crested cockatoo. For each of these parrots, we evaluate the five factors under ESA Section 4(a)(1) on the species. In some cases, we found under a factor that a threat was contributing to the extinction risk for multiple species, while some factors constituted a threat for some of the species but not others. In some cases, the factors affecting species are the same or very similar and in other cases the factors are unique. In each evaluation, we clearly identify what species is being addressed, and if the threat applies to more than one species.
The crimson shining parrot (
The crimson shining parrot's head, neck, and underparts are a bright red. It is a medium-sized parrot, with a length of 45 centimeters (cm) (18 inches (in)). It has been observed in flocks of up to 40 birds in the past, but more recently in flocks of up to 12 birds. During the day, this species is generally quiet and becomes vocal towards dusk, at which time it becomes more active. A blue collar extends across the back of its neck; its back and rump are bright green. Its flight feathers and tail are green, strongly covered with blue. Its bill and feet are black, and its irises are orange. Males and females are similar morphologically; however, the bill of males is larger, and the head of males is more square-shaped than females. It differs from the maroon shining parrot in its size and coloration; crimson shining parrots are generally smaller than maroon shining parrots. Rump feathers on the crimson shining parrot do not have the red edges that can be seen on the maroon shining parrot. The main visible features that distinguish the crimson shining parrot from the masked shining parrot and the maroon shining parrot are the scarlet rather than maroon underparts and the blue collar at the back of the neck.
There is little to no information available regarding this species. The crimson shining parrot, also known as the Kadavu musk parrot, is endemic to the islands of Kadavu and Ono in Fiji. These two islands are separated by a narrow channel, often navigated by kayaks and other small boats. This species has also been reported on the island of Viti Levu in the Upper Navua Conservation Area (Tokaduadu 2008, pp. 5, 7), where they are thought to be escaped pet birds. There are no known records of this species successfully breeding other than on the islands of Kadavu and Ono (
Very little is known about the ecology of this species in the wild (NatureFiji 2011, pp. 1-2). Although in captivity this species has been known to exhibit aggression in males, it is a social species in the wild (Lin and Lee 2006, p. 188). It has been observed in flocks of up to approximately 40 birds (Tabaranza 1992 as cited in BLI 2001, p. 1679) but more recently it has been observed in flocks of up to 12 individuals. Flocking is thought to serve several purposes including mate selection, and learning food sources and eating techniques (Cameron 2007, pp. 115, 144)
In 2004, the population estimate was 6,000 mature birds, with a declining population (Jackson and Jit 2004 in BLI 2010a, p. 1). However, the species' population estimate was inferred from population surveys conducted on another species, the Masked Shining-Parrot (
Its range is estimated to be 460 km
Kadavu is the fourth largest of Fiji's islands, at 410 km
Fiji is actively involved in forest protection efforts; a new Forest Policy was adopted in 2007 (Fiji Ministry of Fisheries and Forestry 2009, p. 1). Crimson shining parrot is also protected by Fiji's Endangered and Protected Species (EPS) Act of 2002. Additionally, Fiji's first national nongovernmental organization (NGO), Nature Fiji, was established recently, and its goal is conservation of its wildlife. Nature Fiji is working closely with BLI to develop a conservation program to protect endangered wildlife in Fiji such as the crimson shining parrot.
In 1981, the crimson shining parrot was listed in Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). At that time, almost all Psittaciformes species (
Appendix II includes species that are not necessarily threatened with extinction, but may become so unless trade is subject to strict regulation to avoid utilization incompatible with the species' survival. International trade in specimens (dead or live) of Appendix II species is authorized through permits or certificates. International trade in specimens of Appendix II species is authorized when: (1) The CITES Scientific Authority of the country of export has determined that the export will not be detrimental to the survival of the species in the wild; and (2) the CITES Management Authority of the country of export has determined that the specimens to be exported were legally acquired (UNEP-WCMC 2008a, p. 1).
In 1988, the crimson shining parrot was described by the IUCN as lower risk/least concern, and the status changed to vulnerable in 2000 (IUCN 2008; BLI 2010a), which is its current IUCN classification. The authority for compilation of information and determining the appropriate risk extinction category for bird species on the IUCN Red List is Birdlife International, and is cited frequently throughout this document. However, IUCN rankings do not confer any actual protection or management.
This section contains an assessment in which we evaluate the effects of any of the five factors listed in section 4(a)(1) of the ESA on the species. Listing actions may be warranted based on whether any of the five factors under section 4(a)(1), singly or in combination, places the species in danger of extinction now or in the foreseeable future. Each evaluation is specific to this species identified unless we specify that the evaluation is for more than one species.
There is little to no evidence of destruction, modification, or curtailment of this species' habitat, in fact, there is recent evidence of reforestation efforts and conservation of the species' habitat taking place (BLI 2011a, p. 1; Fiji Daily Post 2007, 2009, unpaginated). It was suggested that this species is roughly estimated to be declining at the rate of forest loss, which had been estimated to be 0.5 to 0.8 percent per year across Fiji (Claasen 1991 in BLI 2011a, p. 1), and that forest loss may be higher on Kadavu due to fires in recent years (BLI 2011a, p. 1). However, there is no information on the extent of past or current forest loss. Not only does the United Nations describe deforestation in Fiji as modest when compared with the rest of Melanesia (UN 2011, p. 1), but also local communities on Kadavu are implementing reforestation efforts and conservation of this species' habitat as described above (Fiji Daily News 2007, unpaginated). Although the eastern part of the island is experiencing pressures from agricultural encroachment, there is no evidence that agricultural encroachment or forest loss due to fires currently threatens the crimson shining parrot (NatureFiji 2011, pp. 1-2).
Forests on Kadavu were heavily logged in the late 1960s and early 1970s, and habitat loss and degradation of habitat for agricultural purposes continues. However, approximately 75 percent of the island remains forested; East Kadavu IBA is reported to have the largest area of old-growth forest in Kadavu, including extensive areas of lowland rainforest. Furthermore, the crimson shining parrot is reported to use degraded habitats extensively (BLI 2011a, p. 1; BLI 2011f, unpaginated). Most river estuaries and bays still hold large areas of mangroves, which are used by the crimson shining parrot for feeding (and possibly breeding), and pressure on mangrove forest here is not currently significant (BLI 2011a, p. 1).
BLI and Nature Fiji are working with landowners on Kadavu to conserve these forested natural areas and to increase awareness of the value of maintaining these areas in a little-disturbed state (BLI 2011e, p. 1). NGOs are working with the landowners in the Mount Nabukelevu area to create awareness about the value of their forests and the benefits of establishing “Permanent Forest Estates” (PFEs) (described below) on their lands. These NGOs are also working to help build the capacity of indigenous communities to continue forest conservation on their own (BLI 2011e, p. 3). BLI, through the Darwin Initiative, has worked with the Kadavu's Department of Forestry and local communities on Kadavu to protect this species' habitat. The Darwin Initiative, implemented by the United Kingdom, assists countries that are rich in biodiversity but poor in financial resources to meet their objectives under one or more of the three major biodiversity conventions. BLI conducted a workshop on Kadavu to teach sustainable agricultural practices and ways to reduce soil erosion which subsequently supports community livelihoods. Later, the villages of Lomati, Nabukelevuira, Qalira, and Daviqele committed to protect 1,500 hectares (3,707 ac) of their forest that had been designated as an Important Bird Area (IBA) on Mount Nabukelevu in Kadavu (Fiji Daily News 2007).
On Kadavu, particularly in the area of Mount Nabukelevu, many forest-owning mataqalis (clan or landowning units) are under pressure to convert their forests into agricultural land (BLI 2011e, p. 1). In 2010, 10 mataqalis signed an agreement with an NGO to protect the forests of Mount Nabukelevu for the next 20 years (BLI 2011f; NatureFiji 2011). The community-declared protected area now includes 10 mataqali (clan) lands plus a native reserve. Additionally, the Government of Fiji recognizes that maintaining forests is critically important for Fiji's people and biodiversity and has taken steps to preserve its country's resources. In 2007, Fiji introduced the Fiji Forest Policy, which promotes sustainable forest management. One of the foundations of the new Forest Policy is the concept of “Permanent Forest Estates” (PFEs). The policy promotes sustainable management of healthy forests by providing sustainable development incentives for landowners. In addition, the government of Fiji initiated a campaign to plant one million trees in 2010 to halt or slow ecological degradation associated with the depletion of the world's forests. Fiji launched its One Million Trees Campaign in support of the 2010 International Year of Biodiversity, and in 2011 as the International Year of Forests. Fiji indicated that they had surpassed their goal, and participants had succeeded in planting over one million trees (Fiji Ministry of Information 2011).
Although forest loss may be occurring within the range of the crimson shining parrot, we have no information on the extent of forest loss or evidence to suggest that this loss has impacted or is currently affecting this species. The crimson shining parrot is found in forests, agriculture lands, around human habitation, and is known to use degraded habitats extensively. Furthermore, there is no information indicating this species is declining. Additionally, we have no information to suggest that habitat loss may become a threat to this species in the future such that it may contribute to the risk of extinction of this species. Fiji has implemented proactive policies and
Conservation projects on Kadavu are believed to have reduced the numbers of parrots trapped for trading, but this species is still thought to be captured in small numbers for domestic and international trade (BLI 2010a, p. 1). As indicated above, this species has been listed in Appendix II of CITES since 1981. The United Nations Environment Programme—World Conservation Monitoring Centre (UNEP-WCMC) manages a CITES Trade Database on behalf of the CITES Secretariat. We queried the UNEP-WCMC CITES Trade Database for gross data on export and import of this species since 2000, and found no record of trade in this species (UNEP-WCMC 2011, accessed January 4, 2011.)
Each Party to CITES is responsible for compiling and submitting annual reports to the CITES Secretariat regarding their country's trade in species listed in the CITES Appendices. The data from submitted annual reports is compiled into the database, and it provides a mechanism by which CITES trade can be assessed. Due to the time needed to compile the data, the most recent year for which comprehensive trade statistics are available is normally 2 years prior to the current year. UNEP-WCMC acknowledges that the data are not always accurate (UNEP-WCMC 2011, p. 5). They indicate that it is not uncommon for the quantity of specimens traded to be considerably less than the amount specified on the permits and that the quantity specified on the permits is frequently the quantity that is reported in annual reports. They further clarify that trade transactions that may have been authorized by the issuance of permits but never have taken place, as well as inaccurately reported volumes of trade, will exist in the UNEP-WCMC CITES database. UNEP-WCMC also acknowledges that gross and net outputs from the CITES database are often overestimates of the quantities traded because in cases where different quantities are reported by the importing and exporting countries, the CITES database program selects the larger quantity. Errors do occur in the database, and the numbers may not be entirely accurate, but they do provide an approximate representation of international trade that is occurring through CITES. However, we consider the UNEP-WCMC CITES trade data to be the best available information pertaining to international trade in CITES-listed species.
Although it has been reported that birds are taken as gifts and there is some illegal trade overseas, it is thought to occur in small numbers (BLI 2010a, p. 1). Conservation projects described under Factor A have reduced the numbers of birds trapped for the pet bird trade (BLI 2011a, p. 1). BLI reports that four communities have set up village protected areas on Kadavu, and they conduct regular bird surveys under their own initiative. Additionally, it is protected by law against trading and transfers out of Kadavua and Ono (NatureFiji 2011, p. 2). There appears to be substantial protection, awareness, and local conservation of this species occurring. Because there is no evidence of poaching (
We are unaware of any other information currently available that addresses overutilization for commercial, recreation, scientific, or education purposes that may be affecting the crimson shining parrot. We found no evidence of overutilization due to historic or cultural use of this species by local populations. Based on the best available scientific and commercial information, we find that overutilization for commercial, recreational, scientific, or educational purposes is not a threat to the crimson shining parrot now or in the foreseeable future.
Predation by introduced mammals such as feral cats (
Researchers suggest that maintaining minimally-disturbed forests is one of the most cost-effective strategies for protecting species (Olson
We are not aware of any occurrence of disease that may be affecting the crimson shining parrot. In conclusion, we find that neither disease nor predation is a threat to the crimson shining parrot in any portion of its range now or in the foreseeable future.
Various regulatory mechanisms are in place to protect the crimson shining parrot. This species is listed on Fiji's Endangered and Protected Species (EPS) Act of 2002 which is the legislation that implements CITES. As discussed under Factor B, the government of Fiji is adequately controlling international trade. According to a review conducted for CITES with respect to national legislation to determine each country's ability to implement CITES effectively, Fiji meets the requirements for
The import into the United States of all of these species: the crimson shining parrot, Philippine cockatoo, white cockatoo, and yellow-crested cockatoo, is regulated by the Wild Bird Conservation Act (WBCA) (16 U.S.C. 4901
Under the provisions of WBCA, any individual importing their pet bird to the United States for the first time must reside outside of the United States for at least 12 continuous months. In addition, in order to control diseases, the U.S. Department of Agriculture's Animal and Plant Health Inspection Service requires veterinary health certificates and health inspections for pet birds, and implements quarantine procedures for birds imported into the United States. A report published in 2006 showed that imports of parrot species to the United States declined from the mid-1980s to 1991 (Pain
As discussed under Factor B, local protections are in place on the islands where this species exists. The governmental institutions responsible for oversight of the conservation of this species have a good legal framework to manage wildlife and their habitats. Not only are local NGOs involved in conservation activities for this species, but there also appears to be adequate capacity at various levels to protect this species and its habitat. The forestry regulations appear to be effective; there are no reports of illegal logging on the islands of Kadavu and Ono. Most of Fiji's forests are managed or owned by local communities, which have incentive to protect the native habitat. Ownership of native lands is not transferable through land sales, but user rights can be transferred via land leases (Leslie and Tuinivanua 2010, p. 10). These landowning groups are deeply attached to their lands and Fiji's forestry policy supports the local ownership of its lands. Within this species' habitat, the forested areas are being adequately managed and protected by these mataqalis.
Environmental education, conservation initiatives, and restoration efforts are occurring on Kadavu. Another NGO working on Kadavu to protect this species is the Matava Foundation (
In summary, the existing regulatory mechanisms appear to be adequate. There are no current records of this species in international trade, and the government of Fiji is actively conducting environmental stewardship projects. There is nothing to suggest that this factor is a threat to the species. Local conservation activities involving indigenous communities are occurring on Kadavu and this species and its habitat appear to be well protected. Fiji has enacted various laws and regulatory mechanisms to protect and manage wildlife and their habitats. As described above in our review, we found that the government of Fiji and NGOs are implementing many projects and mechanisms that will likely have a positive impact on this species and its habitat. Reforestation and conservation efforts are occurring. The best scientific and commercial information available indicates that the crimson shining parrot is not in danger of extinction or likely to become so within the foreseeable future due to inadequate regulatory mechanisms.
In this section, we examined whether invasive species are threats to the crimson shining parrot. The eastern part of Kadavu supports several bird species that are endemic to Kadavu. BLI indicated that logging and roads (see Factor A) may be facilitating the movement of invasive species. Logging enables alien invasive species such as rats and cats, and in some cases, Indian or common mynahs (
Having determined that the crimson shining parrot is not in danger of extinction or likely to become so within the foreseeable future throughout all of its range, we must next consider whether there are any significant portions of the range where the crimson shining parrot is in danger of extinction
The Act defines an endangered species as one “in danger of extinction throughout all or a significant portion of its range,” and a threatened species as one “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The term “significant portion of its range” is not defined by the statute. For the purposes of this finding, a portion of a species' range is “significant” if it is part of the current range of the species, and it provides a crucial contribution to the representation, resiliency, or redundancy of the species. For the contribution to be crucial it must be at a level such that, without that portion, the species would be in danger of extinction.
In determining whether a species is threatened or endangered in a significant portion of its range, we first identify any portions of the range of the species that warrant further consideration. The range of a species can theoretically be divided into portions in an infinite number of ways. However, there is no purpose to analyzing portions of the range that are not reasonably likely to be significant and threatened or endangered. To identify only those portions that warrant further consideration, we determine whether there is substantial information indicating that: (1) The portions may be significant, and (2) the species may be in danger of extinction there or likely to become so within the foreseeable future. In practice, a key part of this analysis is whether the threats are geographically concentrated in some way. If the threats to the species are essentially uniform throughout its range, no portion is likely to warrant further consideration. Moreover, if any concentration of threats applies only to portions of the species' range that clearly would not meet the biologically based definition of “significant” (
If we identify portions that warrant further consideration, we then determine their status (
Applying the process described above for determining whether a species is threatened in a significant portion of its range, we considered status first to determine if any threats or potential threats acting individually or collectively threaten or endanger the species in a portion of its range. We have analyzed the potential threats and determined they are essentially uniform throughout the species' range.
Section 3 of the ESA defines an “endangered species” as “any species which is in danger of extinction throughout all or a significant portion of its range” and a “threatened species” as “any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” In this finding, we determine whether the petitioned action is: (a) Not warranted, (b) warranted, or (c) warranted but precluded (see Background, above).
As required by the ESA, we considered the five factors separately and in combination in assessing whether the crimson shining parrot is endangered or threatened throughout all or a significant portion of its range. We examined the best scientific and commercial information available regarding the past, present, and future threats faced by the crimson shining parrot. We reviewed the petition, information available in our files, and available published and unpublished information regarding this species and its habitat.
We do not have long-term population trend data for the crimson shining parrot. This species has always been an island endemic and may have always had a small population; island endemics tend to have smaller population sizes. Without historical population information, we do not know if this species has experienced a decrease in population size or if its population has been fairly consistent. Furthermore, this species is reported as common and widespread. During our review of the status of the species, we evaluated the potential threats to the crimson shining parrot including: habitat loss and habitat degradation, take for the pet trade, disease and predation, the inadequacy of regulatory mechanisms, and other natural or manmade factors such as invasive species. We found no information that habitat loss is a threat to the crimson shining parrot. We conclude that the present or threatened destruction, modification, or curtailment of its habitat or range is not a threat to the crimson shining parrot. We found no information that poaching for the pet trade is a threat to the species. This species is not in international trade according to the UNEP-WCMC trade database. Additionally, education and public awareness campaigns are occurring in Kadavu. Fiji is actively involved in forest protection efforts; a new Forest Policy was adopted in 2007 (Fiji Ministry of Fisheries and Forestry 2009, p. 1). We found no evidence that disease or predation affects the wild crimson shining parrot population. In addition, this species is protected by laws against trading and transfers out of Kadavu and Ono. We also concluded that there are no other natural or manmade factors that are threats to the species (Factor E).
The best available information indicates that there is little disturbance on the islands where the crimson shining parrot naturally occurs. Habitat loss is often a threat to wildlife, however, in this case, there is no evidence that habitat loss is affecting the crimson shining parrot. On the contrary, this species is said to occupy altered habitat extensively. Conservation efforts for this species have been underway within the past few years to ensure long-term conservation of habitat where this species exists; local groups on Kadavu are implementing reforestation and conservation programs. Based on the lack of threats acting on this species throughout its range as described above, and the lack of information indicating the species population is in decline, we determine that this species is not in danger of extinction now, nor is it likely to become endangered within the foreseeable future, throughout all or a significant portion of its range. Therefore, we find that listing the crimson shining parrot as a threatened or endangered species is not warranted.
The species was first taxonomically described by Müller in 1776 (BLI 2011b). We accept the species as
Cockatoos are only found in Australasia—a few archipelagos in Southeast Asia (Philippines, Indonesia,
The Philippine cockatoo, or red-vented cockatoo, is locally known as the “katala” and “kalangay,” and has a helmet crest and a red undertail (Rowley 1997). Cockatoos are a distinct group of parrots (order Psittaciformes), distinguished by the presence of an erectile crest (Collar 1989, p. 5; Cameron 2007, p. 1) and the lack of dyck texture in their feathers. Dyck texturing is a microscopic texturing that produces blue and green coloration and is present in the plumage of other parrots (Brown and Toft 1999, p. 141).
This species is endemic to the Philippines, an archipelago of approximately 7,000 islands. The total area of the Philippines is 30,000,000 ha (74,131,614 ac) (Kummer 1991, p. 44). The Philippine cockatoo requires lowland primary or secondary forests with suitable nesting tree cavities and food sources, within or adjacent to riparian or coastal areas with mangroves (IUCN 2008i). The species is reported to use regenerating forest and even heavily degraded forest, as long as emergent nest trees survive. However, its nest sites are restricted to lowlands (Widmann and Widmann 2010, pers. comm.).
The Philippine cockatoo is a food generalist; its diet varies based on the seasons. It consumes seeds, legumes, fruit, flowers, buds, and nectar. It will also eat agricultural crops such as corn and rice, and has been observed feeding on
This species nests in tree cavities, and produces two to three eggs per season (Cameron 2007, p. 140). Breeding generally occurs March through June (BLI 2001, p. 1684), and both sexes participate in nest building (Widmann
Based on recent reports, it is likely that between 450 and 1,245 individuals remain in the wild. Surveys indicated that until around the 1980s, the Philippine cockatoo was fairly common within the Philippine archipelago (Collar
The species' current range is significantly reduced from its historic range. In the past, the species was reported to have been commonly found throughout the Philippines except for northern and central Luzon (Delacour and Mayr 1946; DuPont 1971 in Boussekey 2000, p. 138; Collar
Snyder
Between 2004 and 2010, the population estimate decreased from 1,000 to 4,000 individuals to 450 to 1,245 individual birds in the wild (Widmann and Widmann 2008, p. 23; BLI 2010b; Widmann and Widmann 2010, pers. comm.). This species currently is found in the Culasian Managed Resource Protected Area (CMRPA), Palawan, Dumaran Island (negligible population), Pandanan and Bugsok Islands, Polillo Island Group, Rasa Island, Tawi-Tawi, and possibly on Samar Island. An estimated additional 400 individuals may survive in the Sulu archipelago; however, only sparse information is available for this area (Widmann
This area is in the south of Palawan Island and is 1,954 hectares (ha) (4,828 acres (ac)). The total land area of Palawan is approximately 1.5 million ha (3.7 million ac), including the 1,767 islands and islets surrounding the main island. This species exists both within the actual designated protected area (CMRPA) and in the areas surrounding the protected area on Palawan Island. Philippine cockatoos are thought to travel between Palawan Island and nearby Rasa Island. This species has been known to fly from the mainland to offshore islands as far as 8 km (5 mi) away from the mainland to roost and breed. No roosting sites are known in the CMRPA and surrounding areas (Widmann
CMRPA has been described as exhibiting the “empty forest syndrome.” Although its forest is largely intact, little wildlife remains due to hunting pressure and poaching. In the small population that was protected only recently here, there are no indications that the species' status is improving. Only one breeding pair exists outside of the reserve. Cockatoo poaching occurred in this area within the past 3 years, and breeding in the 2009-2010 season failed. Because all nests have been systematically poached over many years, extinction of this population is likely to occur suddenly due to lack of recruitment (Widmann and Widmann 2010, pers. comm.).
On Dumaran Island, which is off the northeastern coast of Palawan, three areas are managed by the Katala Foundation's Philippine Cockatoo Conservation Programme (PCCP). Two of those are protected areas: the Omoi Cockatoo Reserve and the Manambaling Cockatoo Reserve (Widmann
Pandanan and Bugsok (119 km²) (46 mi
This group of islands is approximately 110 km (68 mi) east of Manila, in Quezon Province in the northern Philippines. Patnanungan Island is part of the Polillo Island Group and is not yet very developed. Polillo Island itself is 1,000 km
Rasa Island is a protected 8 km
Little current data exists regarding the status of the Philippine cockatoo on
An older survey indicated that possibly 100 to 200 Philippine cockatoos existed in the Tawi-Tawi region; however, those data are from over 20 years ago, and, therefore, no longer likely to be an accurate population estimate (Lambert 1993, Dutson 1997, and Allen 1997 in Snyder 2000, p. 84; BLI 2010b, p. 1). Tawi-Tawi is in the southwestern part of the Philippines in the Sulu Archipelago. Tawi-Tawi consists of 107 islands and islets and is approximately 1,197 km
Samar is the third largest island in the Philippines archipelago. It experienced threats from logging and mining in the past, but in 1989, an unexpected natural disaster resulted in initiation of conservation actions (Samar Island Natural Park 2010, p. 1). Due to the intense landslides that occurred as a result of logging activities, a logging moratorium was put into place that year. Samar Island Natural Park was subsequently established on the island, which may have positive results for the Philippine cockatoo. Samar has been reported to contain one of the Philippines' largest unfragmented tracts of lowland rainforest. There have been several reports of Philippine cockatoo sightings on Samar, but there is no current estimate of how many exist there other than the reported sightings (Widmann
Protections exist through various national, local, and international mechanisms. This species was transferred from Appendix II to Appendix I of CITES in 1992 (refer to the discussions under Factors B and D for the crimson shining parrot above for more information about CITES). Inclusion in Appendix I means that international commercial trade is generally prohibited (
The Philippine cockatoo is also listed as Critically Endangered in the 2010 IUCN Red List. Critically endangered is IUCN's most severe category of extinction assessment, which equates to an extremely high risk of extinction in the wild. IUCN criteria include rate of decline, population size, area of geographic distribution, and degree of population and distribution fragmentation; however, IUCN rankings do not confer any actual protection or management.
Widespread deforestation and destruction of native mangroves have affected the habitat of the Philippine cockatoo. The loss of this species' habitat through deforestation largely occurred prior to the 1980s (Kummer 1991, p. 46; Galang 2004, p. 13). Forest cover decreased in Palawan from 10,703 km
Soil erosion is a secondary impact that further degrades suitable habitat (Kummer 1991, p. 41), as demonstrated on Samar Island. In addition to habitat degradation and destruction through road construction, digging, removal of trees, and mining are causing secondary habitat degradation through severe erosion. During the rainy season, water creates deep clefts along the roads that are created for mining operations, causing road collapse. No mitigation measures have been put into place to reduce erosion (IUCNb 2010, pp. 1-2). Virtually all chainsaw operations in Patnanungan and Burdeos are not registered with the appropriate authority (Widmann
Cockatoos are highly impacted by selective logging of primary forests because they are large birds and subsequently require large nests. Selective logging, which targets mature trees, has a negative impact on tree-cavity nesters such as the Philippine cockatoo. Research has found that the abundance of cockatoos is positively related to the density of its favored nest tree and strangling figs (
It is well documented that habitat loss is one of the most significant effects
The Palawan Islands Region is essentially the last area where Philippine cockatoos have a viable population. Although Palawan has been seen as a center for environmental preservation (McNally 2002, p. 9), it still faces many threats, in part due to a burgeoning human population (IUCN 2010b, p. 1; Laurance
Despite the protection measures that are in place to prohibit mining and other activities that degrade habitat, mining operations and oil palm plantations are being developed on Palawan Island (IUCN 2010c, pp. 1-3; Novellino 2010, pp. 2-48). The Philippine cockatoo has not been recorded in areas in southern Palawan where mining and oil palm plantations exist (Widmann and Widmann 2010, pers. comm.). Although mining does not occur directly within Philippine cockatoo habitat, it indirectly adds to habitat loss and degradation on the island (Novellino
Rasa Island contains a large percentage of the Philippine cockatoo population, although small in actual numbers. In addition to the formal protection measures in place on Rasa Island, this population is actively monitored and protected by PCCP staff (Widmann
On Dumaran Island, the pending implementation of a Jatropha plantation is occurring within the few remaining forest patches left (Widmann
PCCP currently manages three areas on Dumaran Island, including a newly acquired buffer area in Omoi (Widmann
In the other areas where this species exists, the current extent of the present and threatened destruction, modification, or curtailment of the species' habitat is unclear; however, it is likely that the pressures on the species are similar, if not worse (BLI 2010b; Widmann
We have identified a number of threats to the habitat of the Philippine cockatoo that have operated in the past, are impacting the species now, and will continue to impact the species. Habitat loss and degradation from past events, such as selective and commercial logging, conversion to plantations or agriculture, and mining, have decreased this species' suitable habitat; and these activities are still occurring. Illegal logging (discussed under Factor D) is widespread in the Philippines (Kummer 1991, pp. 70-75; Galang 2004, pp. 12, 17, 22; Laurence 2007, p. 1544), which adds to any pressures of legal deforestation. Based on the best available scientific and commercial data available, we find that the present and threatened destruction, modification, or curtailment of the species' habitats, particularly in the Palawan area, is a threat to the Philippine cockatoo throughout all of its range.
The Philippine cockatoo, like all cockatoos, is a desirable pet (Cameron 2007, p. vii). In the Philippines, cockatoos are reported to be popular pets due to their ability to mimic human voices (Catigob-Sinha 1993 in
In recent years, several programs to combat the poaching problem, such as public awareness programs and the rehabilitation and release of confiscated parrots were established by the PCCP to support the conservation of the Philippine cockatoo. PCCP started these awareness programs to educate adults and children in villages near areas where the birds are concentrated. The programs use the Philippine cockatoo as a flagship species for conservation, especially with children, because the image of the endemic Philippine cockatoo is unique (Widmann
Because illegal trade is difficult to monitor and quantify, it is unclear to what extent poaching for the pet trade is affecting this species. Considering that in the early 1990s, the population was estimated to be only between 1,000 and 4,000 birds (Tabaranza 1992 and Lambert 1994b in BLI 2001, p. 1681), relatively high numbers were legally traded internationally in the 1980s (
Although we are unsure of the magnitude of the pet trade and its effect on the survival of this species, several reports describe how poaching is still a problem for parrot species, particularly in poorer countries (Dickson 2005, p. 548;
PCCP also broadcasts local radio programs raising conservation awareness. For example, in August 2010, they broadcast an interview regarding wildlife trade and a recent confiscation in Palawan (Widmann
The Philippine cockatoo was transferred to CITES' Appendix I in June 1992 because populations were declining rapidly due to uncontrolled trapping for the pet bird trade. Refer to the Factor B discussion above under the crimson shining parrot for additional information about CITES. An Appendix-I listing includes species threatened with extinction whose trade is permitted only under exceptional circumstances, which generally precludes commercial trade. The import of an Appendix-I species requires the issuance of both an import and export permit. Import permits are issued only if findings are made that the import would be for purposes that are not detrimental to the survival of the species in the wild and that the specimen will not be used for primarily commercial purposes (CITES Article III(3)). Export permits are issued only if findings are made that the specimen was legally acquired and trade is not detrimental to the survival of the species. (CITES Appendix III(2)). These two findings made prior to issuance of a CITES permit are designed to ensure that international trade in a CITES-listed species is not detrimental to that species.
An exception to permitting requirements for international trade of Appendix I species exists specimens originating from a CITES-registered captive-breeding operation. Under the exception in the CITES Treaty and Resolution Conf. 12.10 (Rev. CoP15), specimens of Appendix-I species originating from CITES-registered captive-breeding operations can be traded for commercial purposes, and shipments only need to be accompanied by an export permit issued by the exporting country. An import permit is not required because these specimens are treated as CITES' Appendix-II species. There is one CITES-registered captive-breeding operation in the Philippines that is authorized to export captive bred specimens of this species (
We queried the UNEP-WCMC CITES Trade Database for data on exports and imports of this species from 2000 to 2009, and there were very few exports from the Philippines reported as “wild” origin. Between 2000 and 2009, CITES Party countries reported to UNEP-WCMC that a total of 91 live Philippine cockatoos were imported (
In summary, cockatoos are popular pets, and poaching for the pet trade still occurs, particularly on Pandanan Island (Widmann
In the information provided and the literature reviewed, there were suggestions that diseases, particularly a fungal disease, in the wild may be a threat to this species. It was suggested that Viscertropic Velogenic Newcastle Disease, Psittacine Beak and Feather Disease (PBFD), or the psittacid herpes virus (PsHV-1 or PsHV-2) were indicated as possible threats and may have been introduced into the wild population, possibly by the release of captive birds (Lambert 1994 in BLI 2001, p. 1686; BLI 2010b, p. 1). Cockatoo species are widely distributed throughout Australasia, and some avian species have developed resistance to some diseases (Commonwealth of Australia 2006, p. 1). These diseases affect each cockatoo species differently.
Psittacine Beak and Feather Disease (PBFD) is a viral disease that originated in Australia and affects both wild and captive birds, causing chronic infections resulting in either feather loss or deformities of beak and feathers (Cameron 2007, p. 82). PBFD causes immunodeficiency and affects organs such as the feathers, liver, and brain. Suppression of the immune system can result in secondary infections due to other viruses, bacteria, or fungi. The disease can occur without obvious signs (de Kloet and de Kloet 2004, p. 2394). Birds usually become infected in the nest by ingesting or inhaling viral particles. Infected birds develop immunity, die within a couple of weeks, or become chronically infected. No vaccine exists to immunize populations (Cameron 2007, p. 82). While some cockatoo species are susceptible to this virus, there is no indication that PBFD adversely affects the Philippine cockatoo at the population level in the wild.
Another serious disease that has been reported to infect some cockatoos is Proventricular Dilatation Disease (PDD). PDD is a fatal disease that may pose a serious threat to domesticated and wild parrots worldwide, particularly those with very small populations (Waugh 1996, p. 112; Kistler
Wild birds, especially waterfowl and shorebirds, are natural reservoirs of avian influenza (also known as “bird flu”). Most strains of the avian influenza virus have low pathogenicity and cause few clinical signs in infected birds. Pathogenicity is the ability of a pathogen to produce an infectious disease in an organism. However, strains can mutate into highly pathogenic forms, which is what happened in 1997, when the highly pathogenic avian influenza virus (called H5N1) first appeared in Hong Kong (USDA
Aspergillosis is an infection or allergic response to the
Ectoparasitism by lice and mites was documented as the possible cause of death in some chick mortalities on Rasa Island (Widmann
When conducting a status review, we evaluate the magnitude of each factor that may be affecting a species, and, in this case, we did not find evidence that any disease or predator rises to the level of a threat that is affecting this species in the wild. After conducting a literature search (Johnson
Several regulatory mechanisms are in place at the national and local levels that serve to conserve this species and the habitat on which it depends; however, the mechanisms are ineffective at adequately protecting the Philippine cockatoo. We find that CITES effectively protects the species from unsustainable legal international trade. Factors hampering the regulatory mechanisms in place include remoteness of protected areas, poverty that causes locals to unsustainably use this species' habitat or to poach, and the lack of resources to adequately enforce laws and regulations (Galang 2004, p. 17; Laurance 2007, p. 1544; Palawan Council for Sustainable Development (PCSD) 2007, p. 1-3). These are discussed below.
In the late 1980s and early 1990s, efforts were already underway to protect the Philippine cockatoo (Boussekey 2000, p. 140; Galang 2004, p. 17). In 1987, the Government of the Philippines established the Protected Areas and Wildlife Bureau (PAWB) through the DENR, under Executive Order 192. Its responsibilities are in part to manage and protect the country's protected areas. In 1992, the National Integrated Protected Areas System Act (NIPAS Act of 1992) was adopted in order to protect and maintain the Philippines' biological diversity. In 1994, the PAWB signed a memorandum of agreement (MOA) regarding the conservation of this species (Boussekey 2000, p. 138, Philippines DENR 2009, pp. 1-2). This MOA has been implemented by a nongovernmental organization, the Katala Foundation, since 2006 through the PCCP. Under this MOA, an intensive species conservation program has been underway to conserve this species and its habitat. The PCCP accomplishes its mission through intense local management of the species. Some aspects of the conservation program are to educate local communities about the benefits of conserving endemic wildlife, protect and restore nesting sites and habitat, conduct research, and reintroduce the species into the wild (Widmann
As a protected species (DENR 2010b, p. 2), under the Republic Act No. 9147, certain activities such as capture and trade of live wildlife are prohibited. Republic Act No. 9147 provides for fines and penalties for prohibited acts. However, within the Philippines, the laws are generally ignored and only poorly enforced (Galang 2004, pp. 12-17; Laurance 2007, p. 1544; Rose 2008, p. 232).
Additional protections exist under the Philippines' Executive Order No. 247, which protects the rights of local people with respect to the use of natural resources (
As discussed under Factor B, the Philippine cockatoo is monitored and managed in some, but not all, areas where it exists. Some areas are designated as protected specifically for the Philippine cockatoo and wardens are employed (Widmann
The Philippine cockatoo is carefully monitored and managed in some, but not all, areas where it exists. The species exists in five protected areas: (1) Rasa Island Wildlife Sanctuary (Narra, Palawan), (2) Puerto Princesa Subterranean River National Park
Although there are five areas designated as being “protected,” the levels of protection vary. An increase in the population is occurring in some areas, but in other areas where protections are not as robust, the population is declining, in part due to poaching. The PCCP, the Philippine government, and individuals concerned with the conservation of this species have actively worked to protect the Philippine cockatoo since 1998. The PCCP is a nonprofit organization dedicated to the conservation of wild Philippine cockatoos. Its goals are to teach the principles and value of conservation, work to rehabilitate Philippine cockatoos back into the wild, and conduct scientific research. As of 2000, the local communities that live within the range of this species have been aware that it is illegal to capture or trade this species (Boussekey 2000, p. 143).
At most sites where a viable population appears to exist, PCCP is actively managing this species to try to increase the populations. For example, artificial nest boxes for the Philippine cockatoo were installed on Rasa Island and the mainland (Palawan) (Widmann and Widmann 2008, p. 27). Recovery of the Philippine cockatoo on Rasa Island has been fairly effective, where nest-guarding by local people has virtually stopped poaching (Boussekey, pers. comm. in Cahill
Recent efforts are being focused on Pandanan Island (south of Palawan Island), which has excellent habitat for this species, and has recently been targeted by PCCP for protection of the Philippine cockatoo. A grant under the U.S. Fish and Wildlife Service's Wildlife Without Borders, Critically Endangered Species Conservation Fund, for the Pandanan project was approved in September 2009 (Widmann
As resources allow, other protections and conservation actions are in place for this species. On Dumaran, Rizal, and Patnanungan Islands, Philippine cockatoo activity is observed through wardens monitoring, and patrols occur at protected areas and roost sites. Monitoring of the population trend on Rasa and Dumaran Islands is done through counting individuals at traditional roost sites. Due to both a lack of funding and logistics, not all Philippine cockatoo sites are actively monitored and managed. This is primarily because it is more efficient to focus resources in the Palawan Islands Region where the Philippine cockatoo has a viable population.
In summary, while laws to protect this species are in place, enforcement often is severely lacking or difficult, given the many islands that make up the Philippines and considering that illegal activities in many cases remain socially acceptable at the local level. Illegal logging is considered a leading cause of forest degradation in the Philippines (Galang 2004, pp. 12-17; Laurance 2007, p. 1544; Rose 2008, p. 232). Laws and regulations are frequently ignored, which further reduces the effectiveness of regulatory mechanisms (Galang 2004, pp. 12-17), and this species continues to suffer a decline in population numbers. Therefore, we find that, although the Philippines has a good legal framework to manage wildlife and their habitats, actual implementation of its laws and regulatory mechanisms is inadequate to reduce the threats to the Philippine cockatoo.
The evaluation of the effectiveness of CITES as a regulatory mechanism is cross-referenced under Factor B, as CITES regulates international trade of wildlife. The Treaty requires CITES Parties to have in place adequate legislation for its implementation. Through Resolution Conf. 8.4 (Rev. CoP15), the Parties to CITES adopted a process, termed the National Legislation Project, to evaluate whether Parties have adequate domestic legislation to successfully implement the Treaty. In reviewing a country's national legislation, the CITES Secretariat evaluates factors such as whether a Party's domestic laws designate the responsible Scientific and Management Authorities, prohibit trade contrary to the requirements of the Convention, have penalty provisions in place for illegal trade, and provide for seizure of specimens that are illegally traded or possessed. The Philippines has enacted domestic legislation to implement CITES. That legislation is currently being reviewed by the Secretariat to determine if it meets all the necessary criteria (CITES 2011a).
With respect to international trade, we found CITES to be an adequate existing regulatory mechanism for this species (see our analysis under Factor B for legal trade). See our analysis for the crimson shining parrot for additional discussion on how we made this determination. As discussed under Factor B, very few Philippine cockatoos have been legally exported from the Philippines since 2000. One operation in the Philippines is registered to export captive-bred specimens of this species for commercial purposes and appears to be adequately monitored and regulated. Based on the information available, CITES and the Government of the Philippines have effectively controlled legal international trade of this species.
In summary, we find that the Government of the Philippines appears to have controlled legal international trade through CITES (see discussion under Factor B above). With respect to trade, the existing domestic regulatory mechanisms within the Philippines, as implemented, are inadequate to reduce or remove the current threats to the Philippine cockatoo in the wild based
Even with government controls, poaching of cockatoos is relatively common in areas that are not protected. In addition, laws and regulations are frequently ignored, in part due to the difficulty in monitoring and enforcement throughout the multitude of islands in the Philippines. As discussed under Factors A and B above, we found that poaching, logging, and conversion of forests to agriculture and plantations are threats to the Philippine cockatoo. Despite regulatory mechanisms in place, illegal logging continues to be a leading cause of forest degradation in the Philippines (Laurance 2007, pp. 1544-1555; Rose 2008, p. 231). There is no information available to suggest these threats will change in the foreseeable future; therefore, we find that the existing regulatory mechanisms, as implemented, are inadequate to reduce or remove the current threats to the Philippine cockatoo.
Various other factors have been cited as being potential threats to this species. In addition to poaching, trapping, and deforestation (Boussekey 2000, p. 138) (refer to the discussions under Factors A and B, above), hunting (to protect crops), harassment by bees, and nest flooding have been observed to affect this species (Widmann
Bees have been observed to attack cockatoos. In 2005, on Patnanungan Island, bees were documented attacking Philippine cockatoos (Widmann
Other factors affecting the species include food shortages due to drought and the lack of suitable nesting cavities (Widmann and Widmann 2008, p. 25). The lack of suitable nesting sites in general is addressed under Factor A. In 2005, this species suffered from starvation on Rasa Island due to a food shortage during an El Niño drought year. However, several fledglings were rescued. Of these, 10 developed normally and were subsequently released (Widmann and Widmann 2008, p. 25). Additional factors affecting the species include the lack of suitable nesting cavities (in large, decayed trees) and possibly the lack of adequate food sources (Widmann
The Philippine cockatoo has a contracted geographic range and a small, rapidly declining population, primarily due to poaching. There are between 450 and 1,245 individuals left remaining in the wild, distributed on eight islands (BLI 2011, p. 1). In many cases, the Philippine cockatoo is now geographically isolated from other populations. Additionally, because it is an island species that generally mates for life and is long-lived, it is extremely vulnerable to localized extinctions. Species with small populations are significantly influenced by individual birth and death rates (Gilpin and Soulé 1986, p. 27), immigration and emigration rates, and changes in population sex ratios. Natural variation in survival and reproductive success of individuals and chance disequilibrium of sex ratios may act in concert to negatively affect reproduction (Gilpin and Soulé 1986, p. 27).
Prior to the 1980s, the Philippine cockatoo was common throughout the Philippines (Boussekey 2000, p. 138; Cameron 2007, p. 34). Its existing populations are extremely localized due to habitat loss and its preference for lowland primary and secondary forest, which is also preferred human habitat. PCCP suggests that a rapid population reduction may occur in the future based on low recruitment in recent years, especially for unprotected populations (Widmann 2011a, pers. comm.). In the Rizal (South Palawan) area, which was protected only recently, there are no indications of recovery. Only one breeding pair exists outside of this cockatoo reserve, and this area was poached within the past 2 years. Breeding here did not occur in the 2009-2010 season. Since all nests have been systematically poached in this area over many years, extinction of this population might occur suddenly due to lack of reproduction success. This is partly a consequence of mating characteristics of this species: It is long-lived and generally mates for life. At least two birds persist inside the protected area, but they have not bred in the past 4 years (Widmann 2011a, pers. comm.).
Small, isolated populations of wildlife species such as the Philippine cockatoo that have gone through a reduction in population numbers can be susceptible to demographic and genetic problems (Shaffer 1981, pp. 130-134). Factors that could affect their susceptibility include: Natural variation in survival and reproductive success of individuals; changes in gene frequencies due to genetic drift; diminished genetic
Threats to species typically operate synergistically. Initial effects of one threat factor can later exacerbate the effects of other threat factors (Gilpin and Soulé 1986, pp. 25-26). Any further fragmentation of populations may likely result in the further removal or dispersal of individuals. The lack of a sufficient number of individuals in a local area or a decline in their individual or collective fitness may also cause a decline in the population size, despite the presence of suitable habitat patches.
The combined effects of habitat loss and fragmentation (Factor A) and threats associated with small, declining, and isolated populations (Factor E) on a species' population are referred to as patch dynamics. Patch dynamics can have profound effects on fragmented populations and can potentially reduce a species' effective population by orders of magnitude (Gilpin and Soulé 1986, p. 31). For example, an increase in habitat fragmentation can separate populations to the point where individuals can no longer disperse and breed among habitat patches, causing a shift in the demographic characteristics of a population and a reduction in genetic fitness (Gilpin and Soulé 1986, p. 31). Furthermore, as a species' status continues to decline, often as a result of deterministic forces such as habitat loss or overutilization, it becomes increasingly vulnerable to a broad array of other forces. Despite the mitigation and conservation measures in place, if this trend continues, its ultimate extinction due to one or more stochastic events becomes more likely. Given the species' dispersed nature, the fact that it is a long-lived species that generally mates for life, and that the largest population is approximately 280 individuals, we find that this factor threatens the continued existence of this species. Based on the best scientific and commercial information available, we conclude that based on its small, rapidly declining population, the Philippine cockatoo is at risk of extinction, particularly when combined with the other threats.
Several other factors were identified as affecting the success of this species such as harassment by bees, nest flooding, and starvation. These factors are a normal occurrence in the ecology of this species, and we do not find that these factors significantly affect this species such that they rise to the level of a threat. However, we find that its small, rapidly declining population, when combined with the other threats of habitat loss and poaching, is a threat to the species throughout its range.
We considered the five factors in assessing whether the Philippine cockatoo is endangered or threatened throughout all of its range. We examined the best scientific and commercial information available regarding the past, present, and future threats faced by the Philippine cockatoo. We reviewed the petition, information available in our files, and other available published and unpublished information, and we consulted with recognized Philippine cockatoo experts and local and international NGOs.
The primary factors affecting the Philippine cockatoo include habitat loss and habitat degradation and poaching for the pet trade. Habitat loss associated with logging, an expanding human population and associated development, conversion of lowland forests to agriculture are the some of the greatest threats to the continued survival of this species (BLI 2001, p. 1685; Galang 2004, pp. 5-22; Posa
Based on the best available information, poaching is still occurring, despite education and public awareness campaigns and protections in place at the national level (Widmann
We found no evidence that diseases significantly affect the wild Philippine cockatoo population. Other avian species, particularly cockatoo species, are susceptible to avian diseases, but there was no evidence that disease occurs in the wild to an extent that it is a threat to this species. Predation was not found to affect Philippine cockatoo populations. Based on the best available information, we conclude that disease and predation (Factor C) are not threats to the species.
The Philippine cockatoo is classified as a protected species by the Philippine government. The current range of the Philippine cockatoo is much smaller than its historical range (BLI 2010b). However, as a result of conservation efforts by the various entities working to ensure long-term conservation of the Philippine cockatoo, its range may slowly increase, but current efforts are indicating mixed levels of success. Despite conservation efforts of various entities, we have determined that existing regulatory mechanisms continue to be inadequate because habitat loss and poaching are still occurring (Factor D). In summary, we conclude that inadequate regulatory mechanisms are a threat to the Philippine cockatoo.
This species has a small and rapidly declining population. This species no longer exists in many of the areas where it occurred historically. This species is in competition with humans for habitat;
Despite the conservation measures in place, this species faces severe threats, and the population trend for this species continues to decline. Based on our review of the best available scientific and commercial information pertaining to the five factors, we find that the Philippine cockatoo is in danger of extinction (endangered) throughout all of its range. We do not find that the effects of current threats acting on the species are likely to be sufficiently ameliorated in the foreseeable future. These threats are consistent throughout its range. Therefore, we find that listing the Philippine cockatoo as endangered is warranted throughout its range, and we propose to list the Philippine cockatoo as endangered under the ESA.
The white cockatoo is also known as the umbrella cockatoo. ITIS, CITES, and BirdLife International recognize the species as
Population estimates for the white cockatoo vary, in part due to the remoteness of the islands where this species exists. Population estimates prior to 2000 indicated that the Lalobata protected area on Halmahera Island contained between 28,500 and 42,900 white cockatoos (MacKinnon
While the exact life span is unknown, reports of the white cockatoo's lifespan vary between 20 and 50 years in captivity (Lambert 1993, p. 147; Jordan 2010, pers. comm.). Wild-caught birds have been reported not to breed until they are 6 years old. The highest productive period for the white cockatoo is between 6 and 20 years (Jordan 2010, pers. comm.). However, some pairs have been recorded to breed well into their thirties, and a few exceptions have been reported with pairs or individuals that have reproduced into their forties or fifties (Lambert 1993, p. 147). Clutch-size of white cockatoos in captivity is reported to be 2 to 3 eggs per season, and incubation takes 25 to 28 days; nestlings reside in the nest approximately 90 days before fledging (Cameron 2007, p. 140). Both parents share responsibility for raising chicks, and the species is thought to be monogamous for life.
The white cockatoo is endemic to a few islands in North Maluku, Indonesia, and it inhabits primary, logged, and secondary forests possibly up to 900 m (2,953 ft) (IUCN 2008h). It is not thought to inhabit forests on ultra basic rock (BLI 2001, p. 1674). This species is believed to occur in three protected areas: Gunung Sibela Strict Nature Reserve on Bacan Island (although this site is threatened by agricultural encroachment and gold prospecting), and Aketajawe Nature Reserve and the Lalobata Protected Forest (ALNP), both on Halmahera Island (BLI 2010). Historically, its range has been the islands of Halmahera, Bacan, Ternate, Tidore, Kasiruta and Mandiole in North Maluku (Snyder
The Maluku Islands are also known as the Moluccas or the Spice Islands, and they are between Sulawesi and New Guinea, below the Philippines. The white cockatoo, like most cockatoos, is a resident (nonmigratory) species, but cockatoos are strong fliers, and they will likely travel to nearby islands in search of habitat or food, if it is not readily available. The highest densities of this species occur in primary (old-growth) forest (BLI 2009; Burung International 2011), but the species seems to tolerate some habitat modification. White cockatoos inhabit mangroves, plantations (including coconut), and agricultural land (BLI 2010c). This species requires large trees for nesting and roosting, is often observed feeding in large flocks, and eats seeds, fruit, and insects. Their preferred nesting holes were observed to be situated at points where large branches had broken off the main trunk (Lambert 1993, p. 146).
Halmahera (also known as Jilolo or Gilolo Island) is the largest island in the North Maluku province, and is 17,780 km
Bacan, a smaller island to the southwest of Halmahera, is also
Accuracy of survey methodologies varies (Thomas 1996, pp. 49-58; Pollack 2006, p. 882; Thomas
In the case of white cockatoos, the population estimate may not be accurate based on the survey methodology used and the inferences made. A recent survey indicated that the population density estimation for this species in the Aketajawe block was between 1.6 and 8.9 individuals per km
Recent local anecdotal accounts of this species' population also vary. One recent observation was that the population of white cockatoos was thought to be “very sparse” (WCS 2010, pers. comm.) and rapidly declining (BLI 2010c, p. 1). Populations were conversely described as still being relatively widespread across Halmahera Island, and birds were occasionally observed in flocks (WCS 2010, pers. comm.). In November 2010, this species was observed daily, with flocks up to 23 birds observed during a recent 5-day trip to Halmahera (WCS 2010, pers. comm.). However, local people consider them to have declined from former population levels.
We have no recent estimate of the population on Bacan Island. Although the last estimate, in 1993, was between 7,220 to 29,300 individuals on Bacan Island, a 1985 survey only found 76 cockatoos. We are unsure of the population trend. Further, in 1993, there were reported to be over 100 people who regularly trapped parrots on Bacan, and this practice was a major source of income (Lambert 1993, p. 155). Poaching is a common practice in Indonesia, and it likely still occurs with regularity on Bacan Island.
The white cockatoo has been listed in Appendix II of CITES since 1981. It is listed on the 2010 IUCN Red list as vulnerable. It is also protected in the U.S. by the WBCA (refer to discussion under the Crimson Shining Parrot, factor D). The purpose of the WBCA is to promote the conservation of exotic birds and to ensure that international trade involving the United States does not harm exotic birds. Although there is a national ban against harvest for the white cockatoo, the quota is not effective at eliminating poaching in the wild. Cockatoos are still poached and smuggled into local markets illegally (ProFauna Indonesia 2008, pp. 1-9; ProFauna 2010). The white cockatoo is not listed as a protected species by the Indonesian Republic Forestry Ministry (WCS 2010, pers. comm.).
Information available suggests that a few local protections are in fairly preliminary stages but occurring. Existence of the Aketajawe-Lolobata National Park on Halmahera may serve to reduce hunting pressure and habitat loss if game wardens are monitoring the park. Also on Halmahera, some of the foreign-owned mining operations are considering their environmental impact (see Factor A discussion on mining). Very few private or nongovernmental organizations (NGOs) operate in the area, in part due to the lack of funding available. Burung Indonesia (
It is commonly accepted that deforestation and habitat loss is a significant problem in Indonesia (Galang 2004, p. 14; Laurance 2007, p. 1544; BLI 2010k, p. 1). Indonesia consists of 17,508 islands and 33 provinces. It is a rapidly developing country, with a population of 230 million (United Nations 2009, p. 11). It is the world's fourth most populous country (United Nations 2009, p. 11). Countries with the highest human population growth rates tend to have the highest rates of deforestation as well (Laurance 2007, p. 1545). As available land becomes more scarce, companies and humans move towards more remote areas in search of resources (BLI 2008, p. 100). Human settlements and plantations are typically located in
Part of the Indonesian government's long-term planning strategy is to develop more efficient agriculture to help alleviate poverty. For example, the government of Indonesia has sold land to a company called the Sustainable Pacific Corporation (SPC), which purchased 300,000 ha (750,000 ac) of land to be used for organic agriculture and livestock breeding, agricultural packing houses, warehouses, tourism, and a sea port (
Illegal logging is considered to be a leading cause of forest degradation in Indonesia (Rhee
Selective logging is the primary legal method used for the extraction of timber in Indonesia (BLI 2008k, p. 6). In selective logging, the most valuable trees from a forest are commercially extracted (Johns 1988, p. 31), and the forest is left to regenerate naturally or with some management until being subsequently logged again. Johns (1988, p. 31), studying a West Malaysian dipterocarp forest, found that mechanized selective logging in tropical rain forests, which usually removes a small percentage of timber trees, caused severe incidental damage. The extraction of 3 percent of trees destroyed 51 percent of the forest. He concluded that this type of logging reduced the availability of food sources for frugivores (fruit-eaters). Loggers occasionally find parrots, including
Although almost 80 percent of its original forest is still intact, the Halmahera Rain Forests ecoregion (including Bacan Island) still faces habitat deforestation threats. As the forests are lost on other Indonesian islands, there is an increasing potential for forestry operations to move to Halmahera and other islands with large, desirable trees. Despite Presidential Instruction No. 4/2005 to eradicate illegal logging in forest areas and distribution of illegally cut timber throughout Indonesia (FAOLEX 2009, p. 1), illegal logging continues (refer to Factor D discussion). Contributing factors include poor forest management practices, rapid decentralization of government, abuse of local political powers, complicity of the military and police in some areas of the country, inconsistent law enforcement, and dwindling power of the central government (USAID 2004, pp. 3, 9; Laurence 2007, p. 1544).
Although illegal logging still occurs, the Indonesian government is actively working to conserve its resources. The year 2011 was declared the International Year of Forests. Many countries, including Indonesia, are working towards reducing emissions from deforestation and forest degradation (termed REDD) (Ministry of Forestry of the Republic of Indonesia 2008, 185 pp.). Despite these efforts, illegal logging still occurs within this species' range.
Mining and its associated impacts is a fairly new factor affecting this species. Several companies have mining rights in the Maluku area, particularly on Halmahera (WCS 2010, pers. comm.). PT Antam, the largest mining company in Indonesia, currently operates three nickel mines on the northeast prong of Halmahera (PT Antam 2009). Another mining company, PT Nusa Halmahera Mineral (NHM), is a joint venture company between Newcrest Mining of Australia and PT Antam Tbk, an Indonesian-owned company. They have an exploration license for Bacan and nearby islands to look for gold and other minerals. A third mining company has a license to mine nickel near Ake Tajawi on Halmahera (WWF 2010a).
Two gold mines have been in operation on Halmahera (Newcrest Mining 2010, p. 1). The Gosowong mine was an open-pit, cyanide-leach mine that operated from 1999 to 2002, and is now closed. The Toguraci mine began
Yet another mining company, PT Weda Bay Nickel, proposed a nickel and cobalt mining project in 2009 on the island and has submitted an environmental monitoring plan (PT Weda Bay Nickel 2009, 204 pp.; Cardiff 2010, pp. 1-14). The footprint of the mining operation appears to be within the boundaries of Aketajawe-Lolobata National Park (Vetter 2009, p. 19; Cardiff 2010, p. 1), which could have significant detrimental effects on Halmahera's wildlife, including the white cockatoo. A review of the proposed mining project indicated that it would likely destroy between 4,000 and 11,000 hectares (9,884 and 27,182 acres) of tropical forest, and between 2,000 and 6,000 ha (4,942 and 14,826 ac) of protected forested area (Cardiff 2010, pp. 6, 9, 12). The review indicated that mining activities are extremely destructive to this habitat. Based on deforestation projections, the population of the white cockatoo is projected to decline more than 65 percent over three generations due to deforestation (Vetter 2009, pp. 25, 26, 51). It is unclear whether this mining operation will be approved, or if there will be mitigation measures required; however, it is clear that the extractable resources on Halmahera are desirable, and mining will very likely have a significant negative impact on this species and its habitat.
Indonesia is investing in the planting of
Conversion of land to monocultures destroys white cockatoo habitat. Monocultures are generally not suitable habitat for wildlife. White cockatoos require large trees, which provide large enough nesting cavity sites, and
Deforestation affects endemic bird species restricted to single islands more severely than it affects other species (Brooks
Cockatoos are highly impacted by selective logging of primary forests. Selective logging, which targets mature trees, has a negative impact on cavity-nesters such as the white cockatoo. Research found that the abundance of cockatoos is positively related to the density of its favored nesting trees (large trees that would be impacted by logging), especially since reduced-impact logging techniques are rarely applied. Once the primary forest is logged, experience on other nearby Indonesian islands shows that the secondary forest is generally converted to other uses or logged again rather than being allowed to return to primary forest. Although cockatoos may continue to inhabit secondary forests, the population will be at a substantially lower number. Additionally, species are often found in secondary forest or recently altered forest habitat; however, this habitat tends to be marginal, and the effects on the species' population may not be evident. The trend of high loss of primary forests and degradation of secondary forests is a concern, in part because little is known about the reproductive ecology of white cockatoos in the wild, including breeding success in mature forests versus secondary forests, and whether this species of cockatoo will survive in degraded forests in the long term.
In summary, habitat modification and deforestation activities, such as conversion of primary or secondary forests to exotic tree plantations for biofuel production, agriculture, and human habitat, combined with selective logging and resource extraction (mining), are likely to destroy much of the white cockatoo's habitat (the lowland rain forests of Halmahera) in the near future. While this species may be tolerant of secondary-growth forests or other disturbed sites, these areas do not represent optimal conditions for the species. Based on these factors, we find that the present and threatened destruction, modification, or curtailment of its habitat is a threat to the continued existence of the white cockatoo throughout all of its range.
The primary threat to white cockatoos is poaching from the wild to meet the
In 2002, an investigation found 500 white cockatoos were caught to supply the pet trade (ProFauna Indonesia 2010, pers. comm.). In addition, parrots are an important part of the Indonesian culture, which creates significant demand for parrots domestically (BLI 2008k, p. 10). In a survey on bird-keeping among households in five major Indonesian cities, Jepson and Ladle (2005, pp. 442-448) found that as many as 2.5 million birds are kept in the five cities. Of these, 60,230 wild-caught, native parrots were kept by 51,000 households, and 50,590 wild-caught, native parrots were acquired each year (changed hands, not an indication of birds taken from the wild each year). The study recommended a conservation intervention based on the level of bird-keeping among urban Indonesians. As of 2006, an average of 100 white cockatoos were found for sale in bird markets in Java annually (ProFauna Indonesia 2010, pers. comm.). The sale of live parrots can be a significant source of income. Parrots can sell for 75,000 to 500,000 Indonesian Ruphiahs (IDR or Rp) each, which equates to between $7.50 and $50 U.S. dollars. A young cockatoo can sell for $20 to $25 USD (ProFauna 2008, p. 3; Sasaoka 2009, pers. comm., pp. 1-2; ProFauna Indonesia 2010, pers. comm.). In 1993, cockatoos were described as generally rare in the Java and Bali markets; only two white cockatoos, or 1.2 percent of parrots for sale, were seen in these markets visited (Lambert 1993, p. 158). However, of 381 parrots of 19 species observed at markets in Indonesia, white cockatoo was represented by 11 pets (9.7 percent) and 44 individuals (11.5 percent) in the market sample.
Between 1993 and 2002, although Indonesia had reported the export of 712 wild-caught birds, import records from other CITES countries recorded 1,646 (Cahill
Even with government controls, the commercial hunting of cockatoos (
Exploitation for commercial purposes prior to 1992 is widely accepted as the primary cause of drastic, rangewide population decline of many parrot species. The commercial market for pet cockatoos is highly lucrative (Cantú-Guzmán
Poaching poses a serious threat to the species. The scope of the illegal trade in white cockatoos is unknown. ProFauna's investigation in 2008 found that this species is regularly poached from the wild and shipped to the Philippines. (After reaching the Philippines, it is unclear what occurs to the birds.) Based on ProFauna's investigation, it appears that many of the birds being poached from the wild may be, “laundered with wild cockatoos possibly being described as being of captive-origin.” In general, it is difficult, if not impossible, to determine the source of cockatoos (BLI 2003, p. 1).
ProFauna found that around 9,800 individual parrots, including white cockatoos, are poached every year (ProFauna 2008, p. 3). An investigation completed in 2008 found that the white cockatoo is poached from Maluku and smuggled into the Philippines (ProFauna 2008; ProFauna Indonesia 2010, pers. comm.). Parrot poaching took place most frequently in the central part of Halmahera, as well as Bacan, Obi, and Mandioli (2008, p. 7). The investigation indicated that approximately 10 percent of the 4,000 parrots smuggled annually were white cockatoos. In their investigation, they found bird poachers in Togawa, for example, were able to catch 15 individuals of white cockatoo in a week (ProFauna 2008, p. 3).
During the illegal trade process, many birds die prior to being exported (Lambert 1993, p. 157; Cameron 2007, p. 163; Cantú-Guzmán
Undocumented illegal trade (international and domestic) is difficult to quantify (Thomsen
Illegal trade of parrot species occurs quite frequently; in fact, an investigative report recently conducted of the illegal parrot trade in Mexico demonstrates this (Cantú-Guzmán
Locally, a high level of parrot poaching in north Halmahera is due in part to the lack of supervision by Natural Resources Conservation (KSDA) officers in the Forestry Department (ProFauna 2008, p. 3). There is no regular enforcement or patrol by the KSDA officers. An NGO working with this species indicated that they had recently received several white cockatoos from Indonesian authorities who had confiscated them from poachers (Metz 2010, pers. comm.). Most of the Indonesian parrots come from Halmahera Island and are shipped to the Philippines. According to a recent investigation, 40 percent of parrots were smuggled to the Philippines from the port in Pelita Village, Galela District in northern Halmahera (ProFauna 2008, p. 5). The birds are apparently smuggled to Balut Island or to General Santos in the Philippines. The journey to smuggle parrots from Halmahera, Indonesia, to General Santos, the Philippines, takes over 9 hours, not including the time it takes to transport birds from the forest, to villages, and then to the port. The transactions are done offshore or in the sea, where the Philippine dealers collect the parrots from Indonesian ships. Upon arrival at General Santos, the birds are sent to Cartimar market in Manila, the capital of the Philippines (ProFauna 2008, p. 4). Since there is little disincentive for locals, it is a low-risk and lucrative source of income. Despite the existence of legislation, this illegal trade of protected parrots continues. Law No. 5, 1990, governing the conservation of biological resources and their ecosystems, was enacted to protect natural resources and the ecosystems (Yeager 2008, pp. 3-4); however, poaching and illegal trade continue to occur (also see discussion under Factor D).
The presence of recent and upcoming mining projects in Halmahera is also likely to increase demand locally for birds (see to Factor A discussion above). Temporary workers are known to buy these birds as gifts. It is apparently a problem even among police and military personnel posted to the area (WCS 2010, pers. comm.). ProFauna has encouraged the Navy of Indonesian Armed Force (TNI) and the Indonesian Marine Police to improve the patrol of marine boundaries between Indonesia and the Philippines in order to decrease this illegal trade. NGOs are encouraging both Indonesian and the Philippines governments to implement and enforce their wildlife laws and encouraging Indonesia to list
Stopping illegal trade is further complicated by the vast size of Indonesia's coastline, and government officials have limited resources and knowledge to deal with the illegal pet trade (Metz 2007c, p. 2; Laurence 2007, p. 1544). To combat illegal wildlife trade, Southeast Asian countries, including Indonesia, formed the Association of South East Asian Nations-Wildlife Enforcement Network (ASEAN-WEN) in 2005 to protect the region's biodiversity (
In summary, overutilization of the white cockatoo for the pet trade is a significant threat to the species, and this species is undergoing a rapid population decline. Poaching and illegal trade is difficult to control, in part because Indonesia has a vast coastline, and because income derived from poaching can be a significant source of income. Birds are clearly being poached and shipped to the Philippines, and there is strong demand for this species within Indonesia. Additionally, having a parrot as a household pet is a common part of Indonesian culture. Government officials have limited resources to deal with the illegal pet trade. Indonesia is a founding member of ASEAN-WEN and has made an effort to train its police, forestry, and Customs officers in methods to tackle poaching and smuggling. However, the wildlife protection laws are not vigorously enforced at local levels for this species.
Despite ProFauna Indonesia and the Indonesian Institute of Sciences having requested that the Forestry Department of Indonesia list white cockatoo as a protected species, and the Sultan of Ternate Palace having forbidden the poaching of this species (ProFauna Indonesia 2010, pers. comm.), poaching and illegal cross-border trade still occur. The ProFauna investigation in 2008 found that enforcement in both Indonesia and the Philippines is lacking. In part because this species does not begin to reproduce until approximately 6 years of age, and because this species is thought to be monogamous and usually mates for life, this level of poaching for the pet trade is a considerable threat to the species in its ability to maintain its population. Based on the best available information, we find that overutilization is a threat to the continued existence of this species.
There is no evidence that either disease or predation is a threat to the white cockatoo in the wild. We are unaware of any reports of diseases negatively affecting white cockatoos in the wild. Since disease and predation associated with this species in the wild are not well documented, we extrapolate from what is known about cockatoos in general (see analysis under Factor C for the Philippine cockatoo). Although some serious diseases such as beak and feather disease and PDD occur in cockatoos in the wild, we found no information that these diseases occur in cockatoos in the wild in Indonesia. Cases of avian influenza (H5N1) do occur in Indonesia, but parrots, particularly cockatoos, are not considered to be natural reservoirs of this disease (IPP 2006). With respect to predation, the white cockatoo has natural predators, but we were unable to find information that these natural predators are having a negative impact on the productivity of this species. Therefore, we find that the white cockatoo is not threatened due to disease or predation.
Indonesia has laws and regulations in place to conserve biodiversity, manage forests, regulate trade, provide species protection, and develop and manage protected areas. However, these laws and regulations are frequently ignored (BLI 2008k, p. 7; Laurance 2007, p. 1544), and the country is unable to monitor its vast area, which consists of 17,508 islands. The Indonesian economic crisis that led to the downfall of the Suharto regime resulted in the government instituting a decentralization that gave local governments greater autonomy (Vetter 2009, p. 15). However, this decentralization resulted in confusion of roles and responsibilities, and implementation of decentralization has been slow and uncertain. Conflicting interpretation of policies and priorities and the lack of capacity or experience of local governments have occurred (Rhee
According to ProFauna, the high level of parrot poaching in north Halmahera is in part due to the lack of monitoring by Natural Resources Conservation (KSDA) officers in the Forestry Department (ProFauna 2008, p. 3). There is no regular enforcement or patrol by the KSDA officers (ProFauna 2008, p. 3). The North Maluku government and ProFauna Indonesia have proposed to the Forestry Ministry that the species be classified as a protected species (BLI 2010c; ProFauna 2010, pers. comm.).
In general, the export of wild-caught parrots is subject to harvest and export quotas in Indonesia. However, because the white cockatoo is not on the Indonesian Government's list of protected species (Law No. 5 1990, pp. 1-44; Rhee
Additionally, in 2010, the Sultan of Ternate Palace issued a fatwa (order) forbidding the poaching of cockatoos in the wild. However, as stated before, enforcement often is severely lacking (Shepherd
Existing regulatory mechanisms within Indonesia, as implemented, are inadequate to reduce or remove the current threats to the white cockatoo. Even with government controls, poaching of cockatoos is relatively common (WCS 2010, pers. comm.). As discussed under Factor B, we found that poaching is the primary threat to the white cockatoo. There is some evidence that the actions of Indonesian government agencies and the military are changing; however, if penalties are not enforced for illegal trade, trapping from the wild will continue (ProFauna Indonesia 2004, pp. 9-11). In conclusion, we find that the existing regulatory mechanisms are inadequate to reduce or remove the current threats to the white cockatoo. There is no information available to suggest that these regulatory mechanisms will improve in the foreseeable future.
Indonesia has been a member of CITES since December 28, 1978. It has designated Management, Scientific, and Enforcement authorities to implement the Treaty (CITES 2008b, p. 1) and has played an active role in CITES meetings. Because this species is not listed in Appendix I, which would mean that commercial trade would be prohibited except under certain circumstances, legal international trade is still occurring for this species.
Since 2000, there has generally been a downward trend in exports of the white cockatoo (UNEP-WCMC CITES Trade Database, accessed January 4, 2011). According to the CITES UNEP-WCMC Trade Database, there were 653 live exports of the white cockatoo in 2000, 269 in 2008, and 1,104 in 2009 (2009 may have been an anomaly). Between 2000 and 2009, 8,505 specimens of live white cockatoos were reported to have been exported. The bulk of these exports was exported from South Africa and was reported as captive-origin. Between 2000 and 2009, of the live shipments, there were 28 white cockatoos reported as wild origin. None of these live specimens reported as wild origin was exported directly from Indonesia. Of the live shipments, 8,435 specimens were described as captive origin, 19 were described as “unknown” origin, and 20 were described as pre-Convention, seized, or confiscated. Of the countries that reported the most exports of live white cockatoos, 273 specimens were exported from Indonesia, 4,444 specimens were exported from South Africa, and 384 specimens were exported from the Philippines. Note that countries that are not Parties to CITES do not submit annual report trade data to UNEP-WCMC (also refer to the CITES discussion for the crimson shining parrot). However, Parties, in their annual reports, do include data on their trade with non-parties, and these data are recorded in the UNEP-WCMC Trade Database. Also, while the Database does not include CITES annual report trade data from CITES Parties that did not submit annual reports, it does include CITES trade data from Parties that submitted their annual reports and engaged in CITES trade with those non-submitting Parties.
The purpose of CITES is to ensure that international trade in animal and plant species is not detrimental to the survival of wild populations by regulating the import, export, and re-export of CITES-listed animal and plant species. The best available data indicate that the current threat to this species of cockatoo stems from illegal trade in the domestic markets of Indonesia and international surrounding countries. As discussed under Factor B above, uncontrolled illegal poaching for the pet trade continues to adversely impact white cockatoos. Despite illegal trade,
In summary, we find that the existing regulatory mechanisms within Indonesia, as implemented, are inadequate to reduce or remove the current threats to white cockatoos. Local protections in place provide some protection to white cockatoos. While Indonesia has a good legal framework to manage wildlife and their habitats, implementation of its laws and regulatory mechanisms has been inadequate to reduce the threats to white cockatoos. The national parks on Halmahera may provide some protection to white cockatoos; however, management of protected areas is hampered by staff shortages and lack of expertise and money. As discussed under Factors A and B above, we found that habitat destruction and poaching are threats to white cockatoos. Deforestation and illegal activities are still rampant in Indonesia (Laurance 2007, pp. 1-7). The national and local regulations and management of this species' habitat are ineffective at reducing the threats of habitat destruction (see Factor A) and poaching for the pet trade (see Factor B). The white cockatoo is listed in Appendix II of CITES (see discussion under Conservation Status for the White Cockatoo above), and CITES appears to be an adequate regulatory mechanism to address legal international trade.
Even with government restrictions, poaching of cockatoos (
The Halmahera region is an emerging diving destination (WWF 2010a, p. 2). An Internet search found several Web sites offered diving trips that are in the Halmahera region, and there was even a video available online (
As required by the ESA, we considered the five factors in assessing whether the white cockatoo is endangered or threatened throughout all or a significant portion of its range. We analyzed the potential threats to the white cockatoo including: Habitat loss and degradation, poaching for the pet trade, disease and predation, the inadequacy of regulatory controls, and other natural or manmade factors, such as the conversion of habitat to monocultures for biofuel, and ecotourism activities such as diving. We found that habitat loss, particularly due to selective logging, and conversion of forests to agriculture, mining, or biofuels, is a threat to the white cockatoo; the population is declining rangewide (see Factor A discussion). Halmahera is becoming increasingly more desirable to developers and investors as natural resources become more scarce.
We found that poaching for the pet trade is the most significant threat to the species, despite local public awareness campaigns. It is estimated that there are between 8,629 and 48,393 individuals of this species remaining in the wild on Halmahera; the number of white cockatoos remaining on Bacan Island is unknown, though poaching of wild birds on this island is believed to be occurring. Pet birds are an important part of not only Indonesian culture, but also Asian culture, with large numbers of wild-caught parrots traded domestically and internationally (Baula
Unsustainable poaching is particularly detrimental to the white cockatoo because of its estimated small and rapidly declining population. Excessive removal of individuals from the wild for illegal trade is particularly harmful to species such as the white cockatoo, which are monogamous, long-lived species that do not begin breeding until they are 6 years of age. Additionally, because this species has a high monetary value (Basile personal communication 2010, pp. 6-7) and there is little risk in poaching, poaching is financially lucrative. The Act describes a “threatened species” as “any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The best available information indicates that poaching and trade are not at a level to consider the species to be in danger of extinction at this time. However, based on the analysis of the five factors discussed above, we determine that the white cockatoo is likely to become an endangered species within the foreseeable future. Therefore, we find overutilization for commercial, recreational, scientific, or educational purposes (Factor B), specifically poaching for the pet trade, is a threat to the white cockatoo throughout its range.
We found no evidence that disease or predation significantly affect the wild white cockatoo population throughout its range.
The white cockatoo is not currently classified as a protected species by the Indonesian government. Although Indonesia has a good legal framework to manage wildlife and their habitats, implementation of its laws and regulatory mechanisms has been inadequate to address the threats to the white cockatoo, in part due to the remoteness of the white cockatoo's habitat. Logging laws and policies are frequently ignored and rarely enforced, and illegal logging is rampant, even occurring in national parks and nature reserves. Current concession policies and logging practices hamper sustainable forestry. Threats to the species have not decreased; local NGOs indicate the population trend is declining.
Although diving activities are increasing near islands containing white cockatoo habitat, there is no evidence that ecotourism is a threat to this species now or in the foreseeable future. Therefore, we conclude that there are no other natural or manmade factors that are threats to the species throughout its range (Factor E).
Under the ESA, an “endangered species” is defined as “any species which is in danger of extinction throughout all or a significant portion of its range.” The ESA defines a “threatened species” as “any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” Based on our review of the best available scientific and commercial information pertaining to the above five factors, we find that the white cockatoo meets the definition of a “threatened species” under the ESA, and we are proposing to list the white cockatoo as a threatened species throughout its range. Although the species is not currently in danger of extinction and, thus, does not qualify as an “endangered species” under the ESA, we conclude that the species qualifies as a threatened species. The current distribution of white cockatoos within its range and its disbursed distribution on two islands provides resiliency to the population against the threats such that the species is not currently in danger of extinction, but may become so in the foreseeable future.
Having determined that the white cockatoo meets the definition of threatened throughout its range, we must next consider whether there are any significant portions of its range that meet the definition of endangered. See our discussion under the crimson shining parrot for how we make this determination. For the purpose of this analysis, we consider a portion of the white cockatoo's range to be significant if it is important to the conservation of its range because it contributes meaningfully to the representation, resiliency, or redundancy of its range (see Redford
There are four recognized subspecies of the yellow-crested cockatoo:
There is substantial discussion in scientific literature that debates the classification of island species and whether they deserve species status rather than subspecies status (Phillimore 2010, pp. 42-53; James 2010, pp. 1-5; Pratt 2010 pp. 79-89). This is sometimes significant with respect to conservation measures, particularly when considering the criteria used by organizations such as the IUCN. Assessments of subspecies are only accepted by IUCN provided there is a global assessment of the species as a whole. These four subspecies may all be in fact species, but for the purpose of this proposed rule and 12-month finding, these four subspecies essentially face the same threats, are all generally in the same region of Indonesia, and all have quite small populations. Absent peer-reviewed information to the contrary and based on the best available information, we recognize all four subspecies as being valid. For the purpose of this rule, it is prudent to propose listing
It is generally our practice to use the scientific name of the species in the beginning of the document for avian species, and, subsequently, refer to each species by their common name; however, in this section, we will generally refer to the species by their scientific names. There are many similar cockatoo species, some of which have similar sounding common names and may be confused. For example, the yellow-crested cockatoo is also referred to as the lesser sulphur-crested cockatoo, which is
Nest holes have been observed to be 6 to 18 m (20 to 60 ft) above ground (Setiawan 1996 in Prijono 2008, p. 3). Two tree species used by
Their diet includes
Feral populations of released or escaped captive-held yellow-crested
This species was formerly locally common throughout much of its range. There is evidence of substantial population declines on Sulawesi, where it may already be beyond recovery (Andrew and Holmes 1990; Cahyadin and Arif 1994; Gilardi 2011, pers. comm.), and the Lesser Sundas, where it is believed to be close to extinction on Sumbawa and Flores. It is still fairly common in the Komodo National Park (Butchart
Population estimates for each subspecies vary in part due to the remoteness of the islands where they exist. The BLI 2010 Web site reported that there are between 2,500 and 9,999 mature individuals collectively remaining in the wild; however, these data have not been updated based on recent information reported from a local organization in Indonesia. Population estimates for each subspecies are as follows:
Abbott's cockatoo, the largest of the yellow-crested cockatoos, is only known from a single island, Solombo kecil (or Masalembu kecil pulau), which is 500 ha (1,235 ac) and in the Masalembu Archipelago in the Sulawesi Strait. This island is in the Java Sea, north of the cities of Surabaya and Bali, and east of southern Sumatra. The subspecies is considered to be extirpated from Masalembu Island (also known as Salembo Besar) (Indonesian Parrot Project 2010).
The subspecies
Sumba Island is located in the Lesser Sundas in southeastern Indonesia. The island is 12,000 km
The two national parks, covering 1,350 km
Historically,
As of 2001, it was thought that West Timor and other small islands in the Lesser Sundas could only support a few individuals (PHKA/LIPI/BirdLife International-IP 1998; Setiawan
• Alor Island: 80 individuals observed; population estimate was 678 to 784 individuals (Setiawan
• Flores Island: 14 individuals observed (Ria; Watubuku forest, part of Lewotobi area, see Butchart
• Komodo Island: 137 individuals observed; population estimate was 150 (Imansyah
• Moyo Island: 10 individuals observed (Setiawan
• Pantar Island: 29 individuals observed; population estimate was 444 to 534 individuals (Setiawan
• Sumbawa Island: 14 individuals observed in 1996; subspecies observed at three sites and reported by islanders to occur at 14 more, although in very low numbers (Setiawan
• East Timor (Timor-Leste): Population estimate was 500 to 1,000 individuals in 2004 (Trainor
• West Timor: 8 individuals observed (Setiawan
The largest known population, which is on Komodo Island (311 km
The most recent information from local NGOs suggests that only about 100 to 150 individuals of this subspecies remain in the wild, and they are likely only on Sulawesi Island.
Now, the subspecies is believed to occur only in a small region of Sulawesi (Metz 2010, pers. comm.). Approximately 10 years ago, it was documented in Rawa Aopa Watumohai National Park (RAWNP) (Agista
In 1981,
It is against Indonesian law to capture
For
There are only about 100 to 150
We examine the effects on the species based on each of the 5 factors listed under the section 4(a)(1) of the ESA. Under the ESA and our implementing regulations, a species may warrant
Habitat destruction such as that described above for white cockatoos also threatens
This type of habitat loss affects all four subspecies. In the case of
For
The yellow-crested cockatoo resides in lowland forests predominately between 100 to 600 m (328 to 1,968 ft) throughout these islands, with the highest densities of birds occurring in little-disturbed forests. The locations where the subspecies is thought to exist currently, as well as the most recent population estimates, may be found below under the Factor B discussion. Both legal and illegal logging have been the primary threats to the habitat of this species, with the threats occurring throughout the islands in lowland forests, decreasing available habitat (Prijono 2008, p. 1; Widodo 2009, p. 81). For example, research found that for every 100 km
Cockatoos are highly impacted by selective logging of primary forests, especially since reduced-impact logging techniques are seldom applied. Selective logging, which targets mature trees, has a substantial negative impact on tree-cavity nesters such as
Once the primary forest is logged, land use on other Indonesian islands shows that the secondary forest is generally converted to other uses or logged again rather than being allowed to return to primary forest. Therefore, although cockatoos may continue to inhabit secondary or degraded forests on their respective islands, their populations will be at substantially lower numbers. The trend of high loss of primary forests and degradation of secondary forests is of concern because little is known about the reproductive ecology of
In summary, extensive logging, both legal and illegal, has damaged
Poaching for the pet trade is a factor that also affects
From the data collected by ProFauna about animal markets in Java and Bali, the domestic trade in parrots is still at a high level (ProFauna 2008, pp. 2-8). Many investigations indicate that these cockatoos could fairly easily be exported and at some point their origin would be unknown, yet indicated as captive-origin (BLI 2003, p. 2).
On Sumba Island, evidence of cockatoo trapping was seen in 1996 (Kinnaird 1999), and shipments of cockatoos were confiscated on Sumba in 1998 and again in 2002 (when 32 were seized). In 2002, an investigation found that one collector in Waikabubak exported 52 yellow-crested cockatoos to other islands (Persulessy
IPP, a local NGO which is actively working to protect
Due to high demand for cockatoos and based on trade reports in 1993, the CITES Standing Committee recommended that countries suspend imports from Indonesia, pending surveys to assess the status of the species after a significant trade review (CITES 2001, AC17 Inf. 3 p. 4; CITES Notification to the Parties No. 737). Singapore continued to re-export wild-caught birds originating from Indonesia after the export suspension of Indonesia in 1994 (CITES 2001, AC17 Inf. 3 p. 4). In total, 1,229 wild-caught birds were reported to be re-exported from Singapore between 1994 and 1999 (CITES 2001, AC17 Inf. 3 p. 4; WCMC 2001 in CITES 2004a, pp. 9-10). Although trade was recognized to be a problem, this species was not listed on Appendix I of CITES until 2005. Poaching for the pet trade, as with all cockatoo species referenced in this rule, is a significant threat to this species as well.
Although some subspecies are monitored and are on remote islands, poaching still occurs. Poaching can be extremely lucrative, and there is relatively low risk involved in poaching. None of these subspecies is fully protected from the illegal pet trade. Based on our review, we find that overutilization, specifically poaching for the pet trade, continues to be a threat to
There is no evidence that disease or predation is a threat to
After surveys conducted in the late 1990s by the Directorate-General of Forest Protection and Nature Conservation (PHPA) and BirdLife International-Indonesia, it was determined that
According to a CITES 2004 proposal to uplist
When the proposal to transfer the
Between 2000 and 2009, the UNEP-WCMC Trade Database indicated that 4,837 live specimens of
A 2003 IUCN review found that
With respect to the adequacy of internal government controls within Indonesia, we find that they are inadequate (refer to discussion and finding under Factor D for the white cockatoo, which faces the same threats with respect to this factor). Poaching and illegal trade of this species continue to occur. This species continues to experience population declines, and the protections in place are inadequate to protect this species. CITES regulates international trade of this species, and we have no evidence to suggest that CITES is inadequate in regulating legal trade of this species. Therefore, we find that the inadequacy of regulatory mechanisms is a threat to
The Komodo dragon (
All four subspecies of
Species with limited geographic ranges and small, declining populations are extremely vulnerable. Demographic stochasticity may affect this species as well, and is defined as chance changes in the population growth rate for a species (Gilpin and Soulé 1986, p. 27). Population growth rates are influenced by individual birth and death rates (Gilpin and Soulé 1986, p. 27), immigration and emigration rates, and changes in population sex ratios. Natural variation in survival and reproductive success of individuals and chance disequilibrium of sex ratios may act in concert to contribute to demographic stochasticity (Gilpin and Soulé 1986, p. 27).
Genetic stochasticity is caused by changes in gene frequencies due to genetic drift, diminished genetic diversity, effects due to inbreeding (
Small, isolated populations of wildlife species that have gone through a reduction in population numbers can be
Based on the best scientific and commercial information available, we conclude that
As required by the ESA, we considered the five factors in assessing whether
We analyzed the potential threats to
We found information that poaching for the pet trade is also a significant threat to the species. Illegal poaching of the cockatoo for the pet trade is still common, despite existing laws, education, and public awareness campaigns. Pet birds are an important part of Indonesian culture, with large numbers of wild-caught parrots traded domestically and internationally. Trappers remain active, and wild-caught birds are openly sold in Asian markets (Prijono 2008, p. 18). Efforts to curtail illegal trade are hampered by Indonesia's large coastline and enforcement officials with limited resources and knowledge. The continuing illegal trade of the cockatoo is a threat to the survival of the species. Therefore, we find overutilization for commercial, recreational, scientific, or educational purposes (Factor B) is a threat to
We found no evidence that diseases significantly affect
Although Indonesia has a good legal framework to manage wildlife and their habitats, implementation of its laws and regulatory mechanisms has been inadequate to address the threats to
Finally, we conclude that small, declining populations of
Despite the conservation measures in place, this species faces severe threats, and the population trend for this species continues to decline. Based on our review of the best available scientific and commercial information pertaining to the five factors, we find that
Conservation measures provided to species listed as endangered or threatened under the Act include recognition, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness, and encourages and results in conservation actions by Federal and State governments, private agencies and interest groups, and individuals.
The ESA and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered and threatened wildlife. These prohibitions, at 50 CFR 17.21 and 17.31, in part, make it illegal for any person subject to the jurisdiction of the United States to “take” (includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or to attempt any of these) within the United States or upon the high seas; import or export; deliver, receive, carry, transport, or ship in interstate commerce in the course of commercial activity; or sell or offer for sale in interstate or foreign commerce any endangered wildlife species. It also is illegal to possess, sell, deliver, carry, transport, or ship any such wildlife that has been taken in violation of the ESA. Certain exceptions apply to agents of the Service and State conservation agencies.
Permits may be issued to carry out otherwise prohibited activities involving endangered and threatened wildlife species under certain circumstances. Regulations governing permits for endangered species are codified at 50 CFR 17.22. With regard to endangered wildlife, a permit may be issued for the following purposes: for scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities. For threatened species, a permit may be issued for the same activities, as well as zoological exhibition, education, and special purposes consistent with the ESA.
Section 4(d) of the ESA states that the Secretary of the Interior (Secretary) may, by regulation, extend to threatened species prohibitions provided for endangered species under section 9 of the ESA. Our implementing regulations for threatened wildlife at 50 CFR 17.31
The proposed special rule for the white cockatoo, in most instances, adopts the existing conservation regulatory requirements of CITES and the WBCA as the appropriate regulatory provisions for the import and export of certain captive white cockatoos. It would also allow interstate commerce. However, import and export of birds taken from the wild after the date this species is listed under the ESA, take, and foreign commerce would need to meet the requirements of 50 CFR 17.31 and 17.32. “Take” under the ESA includes both harm and harass. When applied to captive wildlife, take does not include generally accepted animal husbandry practices, breeding procedures, or provisions of veterinary care for confining, tranquilizing, or anesthetizing, when such practices, procedures, or provisions are not likely to result in injury to the wildlife. When conducting an activity that could take or incidentally take wildlife, a permit under the ESA is required.
If adopted, the proposed special rule would allow import and export of certain white cockatoos and interstate commerce of this species without a permit under the ESA as explained below.
We assessed the conservation needs of the white cockatoo in light of the broad protections provided to the species under the WBCA and CITES. The purpose of the WBCA is to promote the conservation of exotic birds and to ensure that international trade involving the United States does not harm exotic birds. The white cockatoo is also protected by CITES, a treaty which contributes to the conservation of the species by monitoring international trade and ensuring that trade in Appendix II species is not detrimental to the survival of the species (see Conservation Status for the white cockatoo). The best available commercial data indicate that the current threat to the white cockatoo stems from illegal trade in the domestic and international markets of Indonesia and surrounding countries. Thus, the general prohibitions on import and export contained in 50 CFR 17.31, which only extend within the jurisdiction of the United States, would not regulate such activities. Accordingly we find that the import and export requirements of the proposed special rule provide the necessary and advisable conservation measures that are needed for this species.
A “Pre”-ESA (or “Pre-Act”) specimen of a species is one that was made or obtained prior to the species being listed under the ESA and has not been involved in a commercial transaction since that time. Specimens of species held in captivity or in a controlled environment on (a) December 28, 1973, or (b) the date of publication in the
Section 7(a) of the Act, as amended, and as implemented by regulations at 50 CFR part 402, requires Federal agencies to evaluate their actions within the United States or on the high seas with respect to any species that is proposed or listed as endangered or threatened and with respect to its critical habitat, if any is being designated. However, given that these species are not native to the United States, we are not
In accordance with our policy, “Notice of Interagency Cooperative Policy for Peer Review in Endangered Species Act Activities,” that was published on July 1, 1994 (59 FR 34270), we will seek the expert opinion of at least three appropriate independent specialists regarding this proposed rule. The purpose of such review is to ensure listing decisions are based on scientifically sound data, assumptions, and analysis. We will send copies of this proposed rule to the peer reviewers immediately following publication in the
We will consider all comments and information we receive during the comment period on this proposed rule during preparation of a final rulemaking. Accordingly, our final decision may differ from this proposal.
We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us comments by one of the methods listed in the
This proposed rule does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. This rule will not impose new recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.
We have determined that we do not need to prepare an environmental assessment, as defined under the authority of the National Environmental Policy Act of 1969, in connection with regulations adopted under section 4(a) of the Act. We published a notice outlining our reasons for this determination in the
A list of all references cited in this document is available at
The primary authors of this notice are staff members of the Branch of Foreign Species, Endangered Species Program, U.S. Fish and Wildlife Service.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
1. The authority citation for part 17 continues to read as follows:
16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500; unless otherwise noted.
2. Amend § 17.11(h) by adding new entries for “Cockatoo, Philippine,” “Cockatoo, white,” and “Cockatoo, yellow-crested” in alphabetical order under BIRDS to the List of Endangered and Threatened Wildlife, as follows:
(h) * * *
3. Amend § 17.41 by adding paragraph (d) to read as follows:
(d) White cockatoo (
(1) Except as noted in paragraphs (d)(2) and (d)(3) of this section, all prohibitions and provisions of §§ 17.31
(2)
(i) Captive-bred specimens: The source code on the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) document accompanying the specimen must be “F” (captive-bred), “C” (bred in captivity), or “D” (bred in captivity for commercial purposes) (see 50 CFR 23.24); or
(ii) Specimens held in captivity prior to the date this species was listed under the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
(3)
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Supplemental notice of proposed rulemaking.
In this supplemental notice of proposed rulemaking (SNOPR), the U.S. Department of Energy (DOE) proposes to revise its test procedure for residential clothes washers established under the Energy Policy and Conservation Act (EPCA). DOE proposes to incorporate provisions of the International Electrotechnical Commission (IEC) Standard 62301, “Household electrical appliances—Measurement of standby power” (Second Edition). DOE also proposes to update the provisions for measuring active mode energy and water consumption.
DOE will accept comments, data, and information regarding this SNOPR no later than September 8, 2011 See section V, “Public Participation,” for details.
Any comments submitted must identify the SNOPR for Test Procedures for residential clothes washers, and provide docket number EERE-2010-BT-TP-0021 and/or regulatory information number (RIN) number 1904-AC08. Comments may be submitted using any of the following methods:
1.
2.
3.
4.
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by e-mail to
For detailed instructions on submitting comments and additional information on the rulemaking process, see section V of this document (Public Participation).
For further information on how to submit a comment or review other public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by
Mr. Stephen L. Witkowski, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121.
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-0121.
Title III of the Energy Policy and Conservation Act (42 U.S.C. 6291,
Under EPCA, this program consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. The testing requirements consist of test procedures that manufacturers of covered products must use (1) As the basis for certifying to DOE that their products comply with the applicable energy conservation
Under 42 U.S.C. 6293, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered products. EPCA provides in relevant part that any test procedures prescribed or amended under this section must be reasonably designed to produce test results that measure energy efficiency, energy use or estimated annual operating cost of a covered product during a representative average use cycle or period of use. Test procedures must not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))
In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, in any rulemaking to amend a test procedure, DOE must determine to what extent, if any, the proposed test procedure would alter the measured energy efficiency of any covered product as determined under the existing test procedure. (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured efficiency of a covered product, DOE must amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))
The DOE test procedure for clothes washers currently being manufactured is found at 10 CFR part 430, subpart B, appendix J1. DOE adopted appendix J1 in a 1997 final rule (hereinafter referred to as the August 1997 Final Rule) to correct for changes in consumer habits that resulted in an overstatement of average annual energy consumption when using the methods specified in appendix J. 62 FR 45508 (Aug. 27, 1997). DOE added appendix J1, rather than amending appendix J, to accommodate continued use of appendix J until DOE amended the residential clothes washer conservation standards to reference the new appendix J1.
The test procedure at appendix J1 includes provisions for determining the modified energy factor (MEF) for clothes washers, which is a function of the total energy used for each cubic foot (ft
EPCA requires DOE to review its test procedures at least once every seven years to determine whether amendments are warranted. (42 U.S.C. 6293(b)(1)) This rulemaking satisfies EPCA's periodic review requirement.
The Energy Independence and Security Act of 2007 (EISA 2007), Public Law No. 110-140 also amended EPCA to require DOE to amend its test procedures to integrate measures of standby mode and off mode energy consumption into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product unless the current test procedure already fully accounts for and incorporates standby and off mode energy consumption or such integration is technically infeasible. If an integrated test procedure is technically infeasible, DOE must prescribe a separate standby mode and off mode energy use test procedure for the covered product, if technically feasible. (42 U.S.C. 6295(gg)(2)(A)) Any such amendment must consider the most current versions of IEC Standard 62301 and IEC Standard 62087, “Methods of measurement for the power consumption of audio, video, and related equipment.”
In evaluating amendments to its test procedure for clothes washers, DOE considered input from the public received in its separate rulemaking proceeding to consider amendments to the energy conservation standards applicable to residential clothes washers.
DOE received comments in response to the August 2009 framework document stating that it should consider changes to the active mode test procedure for clothes washers. As a result, in addition to proposing amendments to its test procedure to include measures for standby and off mode power consumption, DOE proposed to address issues regarding the active mode provisions of the test procedure. As discussed in more detail below, the proposals were set forth in a notice of proposed rulemaking issued on September 21, 2010 (75 FR 57556) (hereinafter referred to as the September 2010 NOPR) and are being refined in this SNOPR.
In the September 2010 NOPR, DOE proposed a number of revisions and additions to the test procedure at appendix J1, including: (1) Incorporating standby and off mode power consumption into a combined energy metric; (2) addressing technologies not covered by the appendix J1 test procedure, such as steam wash cycles and self-clean cycles; (3) revising the number of annual wash cycles; (4) updating use factors; (5) revising the procedures and specifications for test cloth; (6) redefining the appropriate water fill
The principal test procedure issues on which interested parties commented included: (1) The referenced version of IEC Standard 62301; (2) mode definitions; (3) inclusion of steam and self-clean cycles; (4) measurement of delay start and cycle finished mode; (5) calculation of annual energy use; (6) test cloth specifications; (7) usage patterns, in particular annual use cycles, wash temperatures, and load sizes, including a potential bias in favor of large-capacity clothes washers; and (8) test burden.
The following paragraphs summarize the changes and additions to the September 2010 NOPR that DOE proposes in today's SNOPR. In the regulatory text set forth at the end of this SNOPR, DOE sets forth the proposed regulatory text from the September 2010 NOPR, as amended by today's proposals. DOE's supporting analysis and discussion for the portions of the proposed regulatory text not affected by this SNOPR may be found in the September 2010 NOPR. 75 FR 57556 (Sept. 21, 2010).
In the September 2010 NOPR, DOE proposed amendments to its clothes washer test procedure including incorporating by reference specific provisions from IEC Standard 62301, First Edition 2005-06 (“IEC Standard 62301 (First Edition)” or “First Edition”) regarding test conditions and test procedures for measuring standby mode and off mode power consumption. 75 FR 57556, 57560 (Sept. 21, 2010). DOE also proposed to incorporate the definitions of “active mode,” “standby mode,” and “off mode” that were based on the definitions for those terms provided in the most current draft at that time of an updated version of IEC Standard 62301 (the Committee Draft for Vote, or “CDV” version).
In response to the September 2010 NOPR, commenters suggested that the draft updated version of IEC Standard 62301 would improve the mode definitions and testing methodology. The IEC published IEC Standard 62301, Edition 2.0 2011-01 (“IEC Standard 62301 (Second Edition)” or “Second Edition”) on January 27, 2011. DOE has reviewed this updated test procedure and believes that it improves some measurements of standby mode and off mode energy use. Accordingly, DOE proposes in today's SNOPR to incorporate certain provisions of the IEC Standard 62301 (Second Edition), along with clarifying language, into the new clothes washer test procedure. DOE also proposes to incorporate into the new test procedure definitions of “active mode,” “standby mode,” and “off mode” based on the definitions provided in IEC Standard 62301 Second Edition. In addition, DOE proposes to incorporate measures of energy consumption associated with delay start and cycle finished modes. Although these modes would be considered part of active mode, the proposed measurements and calculations for standby and off mode power consumption would include the energy use in such modes in a simplified approach to account for energy use associated with all low-power modes by means of a single power measurement.
Finally, DOE proposes in today's SNOPR to revise the calculations for per-cycle energy use and annual energy cost to incorporate non-active washing mode energy consumption. (42 U.S.C. 6293(b)(3); 42 U.S.C. 6291(4), (7).
The proposed test procedure would update certain values from the existing test procedure to reflect current usage patterns and capabilities. DOE received multiple comments on this issue in response to the August 2009 framework document, and reviewed current consumer data from surveys conducted in 2004 and 2005 to propose updates in the September 2010 NOPR. Based on this information and comments received in response to the September 2010 NOPR, DOE is proposing additional amendments to the load adjustment factor in today's SNOPR. DOE is also proposing in this SNOPR to update the test load sizes specified in appendix J1 to reflect the same test load sizes previously proposed for appendix J2, allowing for testing of large-capacity clothes washers to demonstrate compliance with existing energy conservation standards.
The revised clothes washer test procedure amendments DOE is proposing in today's SNOPR would update the procedure to clarify the existing methods for determining the energy test cycle, setting the wash time for certain clothes washers, using the most current AHAM Standard detergent, and clarifying the definition of “cold wash” for clothes washers that offer both “cold wash” and “tap cold wash” settings. DOE is also proposing the following amendments in today's SNOPR: Correcting the definition of cold rinse in appendix J1; deleting the redundant sections 2.6.1.1-2.6.1.2.4 in appendix J1; and correcting the calculations proposed in the September 2010 NOPR for per-cycle self-clean water consumption.
The amended test procedures in 10 CFR part 430 subpart B appendix J1 and appendix J2 would become effective 30 days after the date of publication in the
As noted in the September 2010 NOPR, DOE considered, pursuant to EPCA, the most current versions of IEC Standard 62301 and IEC Standard 62087 for measuring power consumption in standby mode and off mode. (42 U.S.C. 6295(gg)(2)(A)) DOE noted that IEC
DOE proposed in the September 2010 NOPR to incorporate by reference into this test procedure all applicable provisions from Sections 4 and 5 of IEC Standard 62301 (First Edition). Specifically, DOE proposed to incorporate, from section 4, (“General conditions for measurements”), paragraph 4.2, “Test room;” paragraph 4.4, “Supply voltage waveform;” paragraph 4.5, “Power measurement accuracy;” and from section 5, (“Measurements”), paragraph 5.1, “General,” Note 1; and paragraph 5.3, “Procedure.” 75 FR 57556, 57560 (Sept. 21, 2010). These clauses provide test conditions and test procedures for measuring average standby mode and average off mode power consumption. With respect to test conditions, section 4 of IEC Standard 62301 (First Edition) provides specifications for the test room conditions, supply voltage waveform, and power measurement meter tolerances to ensure repeatable and precise measurements of standby mode and off mode power consumption. With respect to test procedures, section 5 of IEC Standard 62301 (First Edition) provides methods for measuring power consumption when the power measurement is stable and when it is unstable.
DOE also proposed in the September 2010 NOPR to adopt certain provisions from the IEC Standard 62301 Committee Draft for Vote (CDV) version (an earlier draft version of the IEC 62301 revision), as well as the Final Draft International Standard (FDIS) version (the draft version developed just prior to the issuance of the Second Edition). Specifically, DOE proposed to adopt the 30-minute stabilization and 10-minute measurement periods as described in the CDV version and the mode definitions for active, standby and off mode as described in the FDIS version.
DOE noted in the September 2010 NOPR and at the October 2010 public meeting that the IEC was developing an updated version of IEC Standard 62301 (the Second Edition), and interested parties commented on the appropriate version to use for the measurement of standby mode and off mode energy use. Comments made at the public meeting were predicated upon IEC Standard 62301 Final Draft International Standard (FDIS) being the most current (draft) version of the updated standard. Alliance Laundry Systems (ALS); NEEA; Whirlpool Corporation (Whirlpool); the Association of Home Appliance Manufacturers (AHAM); BSH Home Appliances Corporation (BSH); and the Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SCG), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE) (collectively, the “California Utilities”) commented that DOE should reference the most current available draft of the Second Edition at the time, IEC Standard 62301 (FDIS). (ALS, No. 10 at p. 1; NEEA, No. 12 at p. 2; Whirlpool, No. 13 at pp. 1-2; AHAM, No. 14 at pp. 2-3; AHAM, Public Meeting Transcript, No. 20 at pp. 21-22; BSH, No. 17 at p. 3; California Utilities, No. 18 at p. 1) Whirlpool commented that the use of IEC Standard 62301 (FDIS) would support international harmonization and reduce manufacturer test burden. (Whirlpool, No. 13 at pp. 1-2) AHAM stated that combining mode definitions based on IEC Standard 62301 (FDIS) with the test methods from IEC Standard 62301 (First Edition) could be confusing to manufacturers, and ignores the intent of IEC Standard 62301 (FDIS). AHAM and Whirlpool further commented that DOE should not choose to reference only certain sections of IEC Standard 62301, and that the document is meant to be used in its entirety. (AHAM, No. 14 at p. 3; Whirlpool, No. 13 at p. 3) BSH agreed with DOE's proposal to use IEC Standard 62301 as the basis for the standby and lower power mode definitions, and noted that the most recent version of the standard (
AHAM also submitted a comment supporting the incorporation by reference of the Second Edition in response to a Request for Information (RFI) issued by DOE to implement Executive Order 13563, “Improving Regulation and Regulatory Review. (76 FR 6123, Feb. 3, 2011; AHAM, 4)
IEC Standard 62301 (Second Edition) was issued on January 27, 2011 and is now the most current version of IEC Standard 62301. DOE has reviewed the FDIS and Second Edition versions of IEC Standard 62301, and notes that the provisions of the Second Edition are identical in substance to those of the FDIS version. Therefore, DOE interprets comments on IEC Standard 62301 (FDIS) to be equally applicable to IEC Standard 62301 (Second Edition).
DOE notes that IEC Standard 62301 (Second Edition) is an internationally accepted test procedure for measuring standby power in residential appliances, and that this version provides clarification to certain sections as compared to the First Edition, as discussed in the following paragraphs.
Section 4, paragraph 4.4 of the Second Edition revises the power measurement accuracy provisions of the First Edition. A more comprehensive specification of required accuracy is provided in the Second Edition that depends upon the characteristics of the power being measured. Testers using the Second Edition are required to measure the crest factor and power factor of the input power, and calculate a maximum current ratio (MCR). The Second Edition then specifies calculations to determine permitted uncertainty in MCR. DOE notes, however, that the allowable uncertainty is the same or less stringent than the allowable uncertainty specified in the First Edition, depending on the value of MCR and the power level being measured (see Table III.1 for example), so that sufficient accuracy of measurements is achieved under a full range of possible measured power levels without placing undue demands on the instrumentation. These power measurement accuracy requirements were based upon detailed technical submissions to the IEC in the development of IEC Standard 62301 (FDIS), which showed that commonly used power measurement instruments were unable to meet the original requirements for certain types of loads. Therefore, the test burden associated with the additional measurements and calculations is offset by the more reasonable requirements for testing equipment, while maintaining acceptable measurement accuracy. For these reasons, DOE proposes in today's supplemental notice to incorporate by
Additionally, IEC Standard 62301 (Second Edition) adds certain clarifications to the installation and setup procedures in section 5, paragraph 5.2 of the First Edition. The First Edition required that the product be installed in accordance with the manufacturer's instructions, except if those instructions conflict with the standby testing, and that if no instructions are given, the factory or default settings shall be used. IEC Standard 62301 (Second Edition) added provisions regarding products equipped with battery recharging circuits, as well as instructions for testing each relevant configuration option identified in the product's instructions for use.
In the September 2010 NOPR, DOE proposed that the clothes washer be installed according to the manufacturer's instructions, but did not propose additional provisions to require the use of default settings for testing standby energy consumption because it did not have information regarding the likelihood that consumers will alter the default display settings. DOE requested comment on the suitability of using the manufacturer's default settings in testing standby energy consumption. 75 FR 57556, 57563 (Sept. 21, 2010). AHAM, ALS, NEEA, and Whirlpool commented that standby energy consumption should be measured at the manufacturer default settings. ALS and AHAM further stated that if no factory default setting is indicated, the clothes washer should be tested with the settings as shipped from the manufacturer. AHAM stated that this approach would yield repeatable, reproducible results among test laboratories. (ALS, No. 10 at p. 1; AHAM, No. 14 at pp. 5-6; NEEA, No. 12 at p. 6; Whirlpool, No. 13 at p. 3)
DOE agrees with commenters that testing a clothes washer for standby mode energy use (and, by extension, the combined low-power mode energy use) at the default setting, or as shipped, if a default setting is not indicated, would ensure consistency of results test-to-test and among test laboratories. Therefore, DOE is proposing in today's SNOPR to incorporate by reference, with qualification as discussed below, the installation instructions in section 5, paragraph 5.2 of IEC Standard 62301 (Second Edition). DOE is not aware of any clothes washers with a battery recharging circuit.
Section 5, paragraph 5.2 of IEC Standard 62301 (Second Edition) also states that, where instructions for use provide configuration options, each relevant option should be separately tested. DOE believes that this requirement to separately test each configuration option could substantially increase test burden and potentially conflicts with the requirement within the same section to set up the product in accordance with the instructions for use or, if no such instructions are available, to use the factory or default settings. Therefore, DOE tentatively concludes that the portions of the installation instructions in section 5, paragraph 5.2 of IEC Standard 62301 (Second Edition) pertaining to batteries and the determination, classification, and testing of relevant modes are not appropriate for the clothes washer test procedure. Accordingly, DOE is proposing qualifying language in the test procedure amendments in today's SNOPR to disregard those portions of the installation instructions.
The Second Edition also contains provisions for the power supply (section 4.3) and power-measuring instruments (section 4.4). Paragraph 4.3.2 requires that the value of the harmonic content of the voltage supply be recorded during the test and reported. As described previously, Paragraph 4.4.1 requires the instrument to measure the crest factor and maximum current ratio. Paragraph 4.4.3 requires the instrument to be capable of measuring the average power or integrated total energy consumption over any operated-selected time interval. DOE is aware of commercially available power measurement instruments that can perform each of these required measurements individually. However, DOE is aware that certain industry-standard instruments, such as the Yokogawa WT210/WT230 digital power meter and possibly others, are unable to measure harmonic content or crest factor while measuring average power or total integrated energy consumption. DOE is concerned that laboratories currently using power-measuring instruments without this capability would be required to purchase, at potentially significant expense, additional power-measuring instruments that are able to perform all these measurements simultaneously. Therefore, DOE proposes that it would be acceptable to measure the total harmonic content, crest factor, and maximum current ratio before and after the actual test measurement if the power measuring instrument is unable to perform these measurements during the actual test measurement. DOE requests comment on whether this represents an acceptable interpretation of the power measurement requirements of the Second Edition.
The other changes in the Second Edition that relate to the measurement of standby mode and off mode power consumption involve the measurement techniques and specification of the stability criteria required to measure that power. The Second Edition contains more detailed techniques to evaluate the stability of the power consumption and to measure the power consumption for loads with different stability characteristics. The user is given a choice of measurement procedures, including sampling methods, average reading methods, and a direct meter reading method. DOE evaluated these new methods in terms of test burden and improvement in results as compared to those methods proposed in the September 2010 NOPR, which were based on IEC Standard
In the September 2010 NOPR, DOE proposed to require measurement of standby mode and off mode power using section 5, paragraph 5.3 of IEC Standard 62301 (First Edition), clarified by requiring the product to stabilize for at least 30 minutes and using an energy use measurement period of not less than 10 minutes for cycle finished mode, inactive mode, and off mode. 75 FR 57556, 57562-63 (Sept. 21, 2010). For delay start mode, the September 2010 NOPR proposed to require the delay start time to be set to 5 hours, allowing at least a 5-minute stabilization period followed by a 60-minute measurement period.
For today's supplemental notice, DOE compared the provisions of each edition under different scenarios of power consumption stability to determine the potential impacts of referencing the methodology from IEC Standard 62301 (Second Edition) rather than from the First Edition. Based on this analysis, DOE is proposing in today's SNOPR that the power measurement be made using a sampling method described in IEC Standard 62301 (Second Edition). Because, for the reasons discussed in section III.B.2, DOE is not proposing to require separate measurement of power consumption in cycle finished mode and delay start mode, the analysis presented in the following sections is limited to measurements made in inactive mode and off mode.
According to section 5, paragraph 5.3.1 of IEC Standard 62301 (First Edition), power consumption is defined as stable if it varies by less than 5 percent over 5 minutes. In such a case, a direct reading may be made at the end of the measurement period. With the proposed clarifications in the September 2010 NOPR, the total test time for inactive mode or off mode would be a minimum of 40 minutes (comprised of a minimum 30-minute stabilization period, followed by a minimum 10-minute period during which the stability criterion could be evaluated and a direct power reading taken). Alternatively, the tester may select an average power or accumulated energy approach, again with a minimum 30-minute stabilization period and a minimum 10-minute measurement period. The average power approach would simply require a different reading to be taken from the instrument (true average power instead of a direct reading of instantaneous power), while the accumulated energy approach would require the calculation of power by dividing accumulated energy by the duration of the measurement period.
In comparison, section 5, paragraph 5.3.2 of IEC Standard 62301 (Second Edition) identifies a sampling method as the preferred means for all power consumption measurements and the fastest test method when the power is stable. For any non-cyclic power consumption, power readings are initially recorded over a period of at least 15 minutes after energizing the product. Data from the first third of the measurement period are discarded, and stability is evaluated by a linear regression through all power readings in the second two-thirds of the data. If the slope of the linear regression is less than 10 milliwatts per hour (mW/h) for input power less than or equal to 1.0 W, or less than 1 percent of the input power per hour for input power greater than 1.0 W, the power consumption is calculated as the average of the power readings during the second two-thirds of the measurement period. If the slope of the linear regression does not meet these stability criteria, the total period is continuously extended until the stability criteria are met for the second two-thirds of the data. In some cases, this is a more stringent requirement than the stability criteria of IEC Standard 62301 (First Edition). The lack of a definitive test period means that the test duration could extend past 15 minutes for certain products—up to 3 hours is allowed in the Second Edition—and could introduce added test burden as compared to the First Edition. In addition, performing the continuous linear regression analysis required by the Second Edition would require the use of data-acquisition software with the capability of performing real-time statistical analysis, whereas the First Edition requires only simple data logging capabilities. DOE requests comment on the potential test burden for a laboratory that would be required to upgrade its data acquisition system to enable real-time statistical analysis capabilities.
IEC Standard 62301 (Second Edition) additionally provides an alternative measurement method which may be used when the power consumption is stable. Section 5, paragraph 5.3.4 of IEC Standard 62301 (Second Edition) specifies a direct reading method in which a minimum 30-minute stabilization period must be observed, followed by a first power measurement. After an additional period of 10 minutes, a second power measurement is taken. If the average of the two measurements divided by the time interval between them meets certain threshold criteria, then the power consumption is considered to be the average of the two power measurements. Thus, the total test period would still be a minimum of 40 minutes. DOE agrees that this method likely improves the validity of the test results as compared to the First Edition, since it is a more stringent measure of the stability of the power consumption over a longer period of time than the First Edition requires. However, if the threshold criteria are not met at the end of the test, a different measurement method must be used. Further, the Second Edition specifies that the direct reading method shall not be used for verification purposes. Both of these qualifications potentially increase test burden as compared to the First Edition, possibly requiring the tester to conduct the more complex methodology of the methods available under the Second Edition.
Section 5, paragraph 5.3.2 from IEC Standard 62301 (First Edition), which DOE proposed in the September 2010 NOPR to incorporate by reference with clarification, specifies that either the average power method or accumulated energy approach could be used for measuring unstable, non-cyclic power consumption (described in the Second Edition as non-cyclic and “varying” power consumption). As described previously, the clarifications proposed in the September 2010 NOPR would limit total test duration to 40 minutes for inactive mode and off mode.
In contrast, paragraph 5.3 of the Second Edition requires the use of either a sampling method or average reading method for measuring unstable, non-cyclic power consumption in standby mode or off mode. As noted previously, DOE is proposing to require the use of the sampling method, based on the following analysis.
The sampling method in paragraph 5.3.2 is the same as described previously, but the measurement period must be at least 60 minutes, and the cumulative average of all data points recorded during the second two-thirds of the total period must fall within a band of ± 0.2 percent. The test procedure does not provide an upper time limit for testing, possibly resulting in significantly increased measurement
The average reading method in section 5, paragraph 5.3.3 in IEC Standard 62301 (Second Edition) describes both an average power method and accumulated energy method, either of which may be selected for unstable, non-cyclic power. For both types of the average reading method, a 30-minute stabilization period is specified, followed by two comparison measurement periods of not less than 10 minutes each. The average power values, which are either measured directly or calculated from accumulated energy during each period, are compared to determine whether they agree to within certain threshold criteria. If the threshold is not achieved, the comparison periods are each extended in approximately equal increments until the threshold is met. If agreement is not achieved after reaching 30 minutes for each comparison period, the sampling method must then be used. Therefore, the minimum test period is 50 minutes, but may extend up to 90 minutes, at which time an additional test may be required.
DOE believes that the stability criteria in either method improves the accuracy and representativeness of the measurement as compared to the First Edition, but would cause the required test time to increase, with a corresponding increase in manufacturer burden due to the additional time and complexity of the test conduct. Additionally, DOE believes that manufacturers could face the risk of significant additional test burden if the average reading method is initially chosen but the power measurements do not meet the threshold criteria with the allowable 90-minute maximum test time, requiring a subsequent test using the sampling method.
As noted previously, DOE proposed in the September 2010 NOPR to use the average power approach of section 5, paragraph 5.3.2(a) in IEC Standard 62301 (First Edition), with a minimum 30-minute stabilization period and 10-minute measurement period. The First Edition also requires that at least one or more complete cycles be measured.
In the Second Edition, cyclic power must be measured according to the sampling method in section 5, paragraph 5.3.2, but this method requires a measurement period of at least four complete cycles (for a total of at least 40 minutes) divided into two comparison periods, with stability criteria evaluated by calculating the difference in average power measured in each comparison period divided by the time difference of the mid-point of each comparison period. This “slope” must be less than 10 mW/h for input powers less than or equal to 1 W, and less than 1 percent of the input power per hour for input powers greater than 1 W. If the appropriate stability criterion is not met, additional cycles are added to each comparison period until the criterion is achieved. Once stability has been reached, the power consumption is calculated as the average of all readings from both comparison periods. DOE believes that this methodology produces an improved measurement over the methodology from the First Edition, but the test duration could be extended, again potentially introducing issues of test burden.
In evaluating IEC Standard 62301 (Second Edition) and comparing it to the First Edition, DOE recognizes the considerable body of comments on and input to the provisions and methodology that IEC developed as part of its latest revision process. DOE recognizes that, in some cases, test burden and complexity would be increased by requiring the use of the power supply, power measuring equipment, and test methods specified in the Second Edition. However, DOE believes that in most cases for residential clothes washers this added burden on manufacturers is outweighed by the improved accuracy and representativeness of the resulting power consumption measurement. Furthermore, manufacturers supported DOE's use of the Second Edition. Therefore, DOE concludes provisionally that the application of the provisions of the Second Edition to all power measurements in standby mode and off mode for clothes washers would be an improvement over the First Edition and would not be unduly burdensome to conduct. Therefore, DOE is proposing incorporation by reference of the relevant paragraphs of section 4 and section 5 of IEC Standard 62301 (Second Edition) in the clothes washer test procedure.
To this end, DOE is also proposing to amend the reference in 10 CFR 430.3 to add a reference to IEC Standard 62301 (Second Edition). DOE is not proposing to replace the reference to the First Edition in 10 CFR 430.3 because several test procedures for other covered products not addressed in today's SNOPR incorporate provisions from it. There are also certain section numbering differences between the First Edition and Second Edition of IEC Standard 62301 that impact the text of the measurement provisions proposed for the clothes washer test procedure in appendix J2. DOE further notes that the mode definitions that were proposed in the September 2010 NOPR would not be affected by the reference to IEC Standard 62301 (Second Edition) because the definitions were based on IEC Standard 62301 (FDIS), which is identical in substance to the Second Edition.
Further, DOE observes that although the Second Edition allows the choice of multiple test methods for both stable and unstable non-cyclic power consumption, the sampling method provides for a test duration that is approximately the same or shorter than the allowable alternative methods and does not require classification of the nature of the power consumption (
In the September 2010 NOPR, DOE proposed two possible approaches for measuring energy consumption in modes other than active washing mode;
For the first approach, DOE proposed allocating 295 hours per year to the active washing mode, 16 hours to self-clean mode (if applicable), 25 hours per year to delay start mode (if applicable), 15 hours per year to cycle finished mode (if applicable), and the remainder to off and/or inactive mode. 75 FR 57556, 57564-65 (Sept. 21, 2010). Using this approach, the energy use per cycle associated with inactive, off, delay start, and cycle finished modes would be calculated by (1) Calculating the product of wattage and allocated hours for all possible inactive, off, delay start and cycle finished modes; (2) summing
For the second “alternate approach,” DOE proposed measuring power consumption for only off and inactive modes for the purpose of calculating the total energy consumed in all low-power modes. Using this approach, separate measurements of delay start and cycle finished mode energy consumption would not be required; instead, all the hours not associated with active washing mode or self-clean mode (8,465 hours total) would be allocated to the inactive and off modes. DOE noted that delay start and cycle finished modes represent a relatively small number of hours at low power consumption levels. For clothes washers currently on the market, these levels are comparable to those for off/inactive modes.
In evaluating the best approach for measuring energy use in low-power modes, DOE considered comments from interested parties regarding the allocation of hours to modes other than active washing mode. A number of these comments related to the estimates DOE provided of the number of hours associated with each low-power mode.
NEEA objected to DOE's proposed allocation of the time spent in cycle finished mode, based on an estimate of 3 minutes per cycle. NEEA stated that DOE relied on anecdotal data from Australia to determine its estimates. NEEA also noted that DOE was aware of units capable of operating up to 10 hours in cycle finished mode, but had no field data to support an assumption about what fraction of the 10 hours were used, nor any data that would allow an estimate of the typical cycle finished mode duration. NEEA recommended that DOE acquire data to provide a statistically valid basis for assumptions about the duration of cycle finished mode. NEEA further commented that there is no reason to exclude the measurement of the energy use of fans and motors in the cycle finished mode, or to arbitrarily curtail the time period for their measurement. (NEEA, No. 12 at pp. 3, 7; NEEA, Public Meeting Transcript, No. 20 at pp. 75-76)
NEEA also commented that recent field measurements conducted for the California Public Utility Commission (CPUC) indicate that inactive mode energy use can be significant, equivalent to the energy consumption of an additional wash load per week (not including hot water energy consumption). (NEEA, No. 12 at p. 3) NEEA stated that DOE's estimates for the time spent in the inactive mode call into question the need for the specified accuracy in measuring the power use in the inactive mode. (NEEA, No. 12 at p. 7)
The California Utilities commented that DOE should increase the length of time allocated to cycle finished mode in the test procedure calculations. The California Utilities further noted that the Australian study on which DOE relied for other estimates in the proposed test procedure showed that 20 percent of the total use time not allocated to active washing or delay start mode would be associated with the cycle finished mode. Additionally, the California Utilities noted that DOE's estimates were based on internal testing, although it is not clear if the proposed cycle finished mode duration was based on all machines tested, or only those having a cycle finished mode, and requested either a clarification or correction to this calculation. The California Utilities stated that it also was not clear whether DOE's test sample included machines providing periodic air flow or tumbling in the cycle finished mode, or if it only tested machines with an extended display operation. The California Utilities recommended that DOE test machines with these additional features to determine their typical cycle finished mode duration, which for some machines may be hours after completion of the wash cycle. (California Utilities, No. 18 at pp. 2-3)
ALS did not agree that cycle finished mode energy consumption should be accounted for separately from the active washing mode. (ALS, No. 10 at p. 1) Whirlpool commented that DOE should not measure or include in the test procedure cycle finished energy consumed by air movement fans or by periodic tumbling, as these are very limited application features where the measurement burden would substantially outweigh the value of the energy measurement. (Whirlpool, No. 13 at p. 2) Whirlpool commented further that the significant test burden associated with measuring cycle finished mode results in virtually no consumer benefit, and these values should be dropped from the test procedure's calculations. (Whirlpool, No. 13 at p. 4)
AHAM also commented in response to the RFI issued by DOE to implement Executive Order 13563, “Improving Regulation and Regulatory Review, opposing any test procedure requirement to measure separately the energy use of delay start and cycle finished modes. AHAM stated that the additional burden that would be required to measure a de minimis amount of energy would not be justified. (76 FR 6123, Feb. 3, 2011; AHAM, 5-6)
DOE also received multiple comments from interested parties regarding the proposed “alternate approach,” which would allocate all the hours not associated with active washing mode to the inactive and off modes.
ALS, AHAM, and BSH support the alternative calculation proposed in the September 2010 NOPR. (ALS, No. 10 at p. 2; AHAM, No. 14 at p. 8; AHAM, Public Meeting Transcript, No. 20 at pp. 87-88; BSH, No. 17 at p. 3) ALS and AHAM generally oppose the proposed method of separately allocating annual hours to delay start mode, cycle finished mode, and self-clean mode because they believe that DOE does not have reliable consumer use data for these modes. In addition, as stated above, ALS and AHAM stated that these modes represent insignificant energy consumption to justify measuring them separately. (ALS, No. 10 at p. 2; AHAM, No. 14 at p. 7; AHAM, Public Meeting Transcript, No. 20 at pp. 55-56, 73, 93) Whirlpool also commented that the test procedure should not include delay start mode, cycle finished mode, or off mode because these modes represent insignificant energy consumption. (Whirlpool, No. 13 at p. 4).
NEEA opposed the proposed alternative calculation method, stating that it would be inappropriate to ignore the delay start and cycle finished modes with almost no data on the actual duration and energy use for these modes. (NEEA, No. 12 at p. 8) NEEA believes that the energy use in delay start mode and cycle finished mode is not insignificant, and should be included in the energy use calculations. According to NEEA, manufacturers would have no incentive to minimize energy used in these modes if they were not included in the calculations. (NEEA, No. 12 at p. 8) NEEA further commented that the proposed calculation method for measuring each mode is sound, but could be simplified if the calculation simply involved active mode, with delay start mode and cycle finished mode folded in, and inactive mode, as measured for each model tested. (NEEA, No. 12 at p. 7) NEEA did, however, comment that it might support the alternative approach if the active wash mode is defined for each machine to include any cycle finished mode, including machines with cycle finished modes with intermittent tumbling that can last as long as 10 hours. (NEEA, Public Meeting Transcript, No. 20 at p. 88)
The Appliance Standards Awareness Project (ASAP), American Council for an Energy-Efficient Economy (ACEEE), and NRDC (hereafter referred to as the “Joint Comment”) expressed support for
DOE acknowledges that certain clothes washers provide optional tumbling or air circulation features in cycle finished mode. As noted in the September 2010 NOPR, the number of residential clothes washers equipped with a periodic tumbling or air circulation feature during cycle finished mode represents less than 10 percent of the models produced by manufacturers comprising over 90 percent of the market. 75 FR 57556, 57561 (Sept. 21, 2010). In addition, review of product literature for the clothes washers equipped with such features shows that these functions are typically consumer-selected options.
To further support the proposal in today's SNOPR, DOE performed additional laboratory testing to quantify the energy consumption in cycle finished mode. DOE tested the residential clothes washer model that it identified as having the longest-duration and most energy-intensive cycle finished feature on the market. This clothes washer includes a user-selectable option that provides periodic tumbling and air circulation for up to 10 hours following the completion of the wash cycle. For the duration of this cycle finished mode, the cycle finished indicator on the control panel remains activated, the door remains locked, and an additional feature indicator light on the control panel flashes.
DOE measured the energy consumption of this cycle finished feature for the maximum possible 10 hour duration, using the warm wash/cold rinse energy test cycle and the average test load size as indicated by Table 5.1 in appendix J1, extended linearly as discussed in section III.B.7.a. These test parameters were chosen because they correspond to the highest usage factors according to the appendix J1 test procedure. DOE also measured the clothes washer's standby energy consumption. Figure III.1 shows the power consumption in W during the active washing mode followed by the first 45 minutes of cycle-finished mode. The shaded portion of the figure indicates cycle finished mode.
Table III.2 shows the cycle finished mode energy consumption for the test clothes washer along with the other factors that the proposed Integrated Modified Energy Factor (IMEF) metric incorporates: (1) Machine electrical energy use in active washing mode, (2) hot water energy use in active washing mode, (3) energy associated with moisture removal (
Figure III.2 shows the relative magnitude of each of the contributors to total per-cycle energy consumption for both scenarios.
The cycle finished feature of this clothes washer consumes 0.08 kWh over the maximum 10-hour duration. After accounting for the 10 fewer hours in inactive mode, the cycle finished feature with intermittent tumbling and air circulation would add a net 0.06 kWh to the total per-cycle energy consumption of this clothes washer, an increase of 3.0 percent. If consumers were to select this feature for all wash cycles, IMEF would decrease by 3.0 percent.
DOE recognizes that the 3.0 percent decrease in IMEF represents a worst-case scenario. A 3-percent increase in annual energy consumption would occur only if a consumer activated this feature on 100 percent of laundry cycles and if the cycle-finished activity persisted for the full 10 hours after every cycle. While DOE lacks consumer usage data of this cycle finished feature, DOE believes it is reasonable that consumers would activate this feature less than 100 percent of the time, and that, on average, the cycle finished activity would persist for less than the full 10 hours. For illustrative purposes, if a consumer selected the cycle finished option on 50 percent of all wash cycles, and, on average, the cycle finished activity persisted for 50 percent of the maximum allowable time (
Based on the results of the data presented here, DOE believes that including a specific measurement of energy use of a cycle finished feature that incorporates intermittent tumbling and air circulation would not significantly impact the total annual energy consumption. Furthermore, measuring the energy use over the entire duration of cycle finished mode would increase the test duration by up to 10 hours, depending on the maximum duration of cycle finished mode provided on the clothes washer under test. DOE believes this would represent a significant increase in test burden that would not be warranted by the minimal additional energy use captured by measuring cycle finished mode separately or as part of the active washing mode.
Therefore, in consideration of the data and estimates previously presented in the September 2010 NOPR, the
The energy test cycle is the cycle currently used in determining the modified energy factor (MEF) and water factor (WF) for a clothes washer, and proposed to be used for determining integrated modified energy factor (IMEF) and integrated water consumption factor (IWF). The energy test cycle is defined in section 1.7 of the current clothes washer test procedure based on (A) The cycle recommended by the manufacturer for washing cotton or linen clothes, which includes all wash/rinse temperature selections and water levels offered in that cycle; and (B) other cycles that may include other temperature or water level options if they contribute to an accurate representation of energy consumption. In the September 2010 NOPR, DOE proposed to amend part (B) of the energy test cycle definition to provide clarity in determining whether to test temperature options available only on cycle settings other than that defined in part (A) of the definition. Specifically, DOE proposed modifying part (B) as follows:
“* * * (B) if the cycle described in (A) does not include all wash/rinse temperature settings available on the clothes washer and required for testing as described in this test procedure, the energy test cycle shall also include the portions of a cycle setting offering these wash/rinse temperature settings with agitation/tumble operation, spin speed(s), wash times, and rinse times that are largely comparable to those for the cycle recommended by the manufacturer for washing cotton or linen clothes. Any cycle under (A) or (B) shall include the default agitation/tumble operation, soil level, spin speed(s), wash times, and rinse times applicable to that cycle, including water heating time for water heating clothes washers.” 75 FR 57556, 57575-76 (Sept. 21, 2010).
In testing conducted since the September 2010 NOPR, DOE has observed that some clothes washers retain in memory the most recent options selected for a cycle setting the next time that cycle is run. To ensure repeatability of test results, particularly for cycles under part (B) of the energy test cycle definition, DOE proposes in today's SNOPR to further clarify that the manufacturer default conditions for each cycle setting shall be used, except for the temperature selection, if necessary. For example, if the extra hot temperature selection was only available on the “whites” cycle, the manufacturer would use the whites cycle to test that temperature setting. Because the default temperature setting for the whites cycle may be warm or hot, however, the manufacturer would have to manually adjust the temperature to get to extra hot. For certification testing in such cases, the manufacturer would use the default settings on the whites cycle for all options except the temperature setting, which would be manually adjusted to achieve the desired temperature.
In addition, DOE proposes to delete “and required for testing as described in this test procedure” from part (B) as redundant and unnecessary.
AHAM commented that DOE's proposal in the September 2010 NOPR to amend Part B of the energy test cycle definition was vague, undefined, and included a significant amount of variability. AHAM noted that variability in a test procedure has substantial consequences for manufacturers, and that the test procedure must be clear and be uniformly understood to avoid serious consequences in variations in testing across laboratories or technicians. (AHAM, No. 14 at p. 15) DOE believes that the proposed modification to part (B) provides additional specificity on the wash cycle settings (
The clothes washer test procedure relies on use factors to weight different consumer behaviors in the overall energy and water consumption calculations. The factors are based on consumer use data and represent the fraction of all cycles that are run with certain settings or characteristics. The Load Adjustment Factor (LAF) represents the ratio of maximum load size to average load size. This ratio is used in the calculation of the energy required to remove moisture from the test load (
AHAM and ALS support DOE's proposal to retain the existing LAF in the test procedure. (AHAM, No. 14 at p. 13; ALS, No. 10 at p. 4) BSH, The California Utilities, Energy Solutions (ES), NEEA, Natural Resources Defense Council (NRDC), and the Joint Comment stated that it is an inconsistency in the test procedure to have a single LAF that does not correlate with the load usage factors. (BSH, Public Meeting Transcript, No. 20 at pp. 149-150; California Utilities, No. 18 at p. 4; ES, Public Meeting Transcript, No. 20 at p. 150; Joint Comment, No. 16 at pp. 5-6; NEEA, Public Meeting Transcript, No. 20 at p. 149) ASAP commented that an average load size value that depends on capacity does not represent consumer usage. (ASAP, Public Meeting Transcript, No. 20 at pp. 151-152) ES stated that the ratio of average load size to maximum load size is 70-75 percent for small clothes washers but is closer to 50-55 percent for larger clothes washers. (ES, Public Meeting Transcript, No. 20 at p. 150) The California Utilities recommended that RMC be measured by testing with minimum, average, and maximum test load sizes, with the average test load size calculated as 65 percent of the maximum load size. The California Utilities further commented that the results from each test load size should be weighted using the same load usage factors as those used for the energy test cycle. (California Utilities, No. 18 at p. 4) NRDC stated that a single LAF could be calculated from the three weighting values assigned to the load usage factors. (NRDC, Public Meeting Transcript, No. 20 at pp. 142-145, 148-149) NEEA and the Joint Comment doubted that the relationship between
DOE notes that both the LAF and load usage factors are intended to adjust test results measured at discrete load sizes to values that are representative of real-world consumer use. The LAF, however, is also intended to capture the dependence of RMC on load size because the RMC test is conducted using only the maximum load size.
As observed by the California Utilities, data collected as part of the Bern Clothes Washer Study suggest that an RMC test conducted at maximum load size would produce a different RMC than a test conducted at the average load size. Because the LAF must account for two effects—the percentage of times that users select different load sizes and the variation of measured RMC with load size—it would be expected to differ somewhat from any of the load usage factors, which capture only the consumer load size selection effect. For the August 1997 Final Rule, however, DOE obtained information that, when averaged with data provided by interested parties, showed that the relationship between load size and RMC was almost non-existent. For this reason, DOE concluded in the August 1997 Final Rule that it was acceptable to test RMC using only the maximum load size. DOE does not believe that conducting multiple RMC measurements at different load sizes would improve the calculation of drying energy use. Additionally, DOE believes that the Bern Study is inconclusive with respect to the LAF because (1) The relationship between RMC and load size was not demonstrated for individual machines, and (2) the test load composition was not controlled.
In light of the available data suggesting that load size does not affect the RMC measurement, the remaining trend that the LAF is intended to capture is the pattern of consumer selection of load size, which is already incorporated in the test procedure via the load usage factors. This suggests that the LAF is duplicative of, yet inconsistent with, the load usage factors. Therefore, DOE proposes in today's SNOPR that, for consistency with the rest of the test procedure, the representative load size calculation in the equation for drying energy should incorporate the load usage factors rather than a separate LAF. In the current drying energy calculation, the representative load size is calculated by multiplying the fixed value of LAF by the maximum load size. DOE proposes that this representative load size be replaced by a weighted-average load size calculated by multiplying the minimum, average, and maximum load usage factors by the minimum, average, and maximum load sizes, respectively, and summing the products.
The current test procedure specifies the wash time setting to be used in the energy test cycle. If only one wash time is prescribed in the energy test cycle, that wash setting is to be used; otherwise, the wash time setting is required to be the higher of either the minimum wash time or 70 percent of the maximum wash time available in the energy test cycle. DOE has recently become aware that, for certain clothes washers equipped with an electromechanical dial to control wash time, the dial may yield different results for the same setting depending on the direction in which the dial is turned to reach the desired setting. DOE believes that consistency in setting the wash time in such cases may be achieved by resetting the dial to the minimum wash time and then turning it in the direction of increasing wash time to reach the desired setting. If the desired setting is passed, the dial should not be turned in the direction of decreasing wash time to reach the setting. Instead, the dial should be returned to the minimum wash time and then turned in the direction of increasing wash time until the desired setting is reached. DOE, therefore, proposes to add these clarifications to the wash time setting provisions in both appendix J1 and appendix J2. DOE believes that this clarification would not affect the energy and water use measurements, but would help ensure consistency when determining compliance with energy conservation standards. To provide further consistency, DOE also proposes the further clarification that the conditions stated in the case of more than one wash time setting—that the wash time setting shall be the higher of either the minimum, or 70 percent of the maximum wash time available in the energy test cycle—shall apply regardless of the labeling of suggested dial locations.
In the September 2010 NOPR, DOE considered whether to amend the estimated annual operating cost calculation in 10 CFR 430.23 to include the cost of energy consumed in the non-active washing modes, but did not propose such amendments for the following reasons:
• DOE believed that the cost of energy consumed in self-clean, standby, off, delay start, and cycle finished modes is small relative to the total annual energy cost for clothes washers, and therefore, would make little difference in the estimated annual operating cost calculation.
• The Federal Trade Commission's (FTC's) EnergyGuide Label for clothes washers uses the estimated annual operating cost as its primary indicator of product energy efficiency, compared to a range of annual operating costs of similar products. Appendix F1 to 16 CFR part 305. An estimated annual operating cost incorporating self-clean, standby, off, delay start, and cycle finished mode energy use would no longer be directly comparable to the minimum and maximum energy costs prescribed for the EnergyGuide label.
ALS and AHAM supported DOE's proposal to maintain the existing energy cost calculation. (ALS, No. 10 at p. 3; AHAM, No. 14 at p. 9) AHAM and Whirlpool commented, however, that DOE's proposal to exclude non-active
NEEA disagreed with DOE's assertion that the cost of energy consumed in non-active washing modes would make little difference in the estimated annual operating cost calculation. NEEA noted that no publicly available data exists on which to base such an assertion, but that end-use data from the field suggests that standby energy could constitute as much as 5 to 10 percent of total clothes washer energy use, not including drying energy use. (NEEA, No. 12 at p. 8)
EPCA requires that 180 days after the amended test procedure is prescribed, all representations related to the energy use, efficiency, or cost of energy consumed for residential clothes washers must reflect the results of testing according to the amended test procedure, which will include provisions for measuring standby and off mode energy use. (42 U.S.C. 6293(c)(2)) Additionally, EPCA requires that any revisions to the labels for residential clothes washers include disclosure of the estimated annual operation cost (determined in accordance with DOE's test procedures prescribed under section 6293 of EPCA), unless the Secretary determines that disclosure of annual operating cost is not technologically feasible, or if the FTC determines that such disclosure is not likely to assist consumers in making purchasing decisions or is not economically feasible. (42 U.S.C. 6294(c)(1))
For these reasons, DOE agrees that the annual energy cost calculations in 10 CFR 430.23 for residential clothes washers should be amended to include the cost of energy consumed in non-active washing modes. Therefore, DOE proposes to amend the clothes washer test procedure to revise the estimated annual operating cost calculation to integrate energy use in standby, off and self-clean modes. The estimated annual operating cost would be obtained by multiplying the 295 average number of annual use cycles by: (1) When electrically heated water is used: (total per-cycle machine electrical energy consumption + per-cycle hot water energy consumption + per-cycle self-clean energy consumption + per-cycle “combined low-power” mode energy consumption) × (the representative average unit cost in dollars per kWh, as provided by the Secretary); or (2) when gas-heated or oil-heated water is used: [(per-cycle machine electrical energy consumption + per-cycle self-clean machine electrical energy consumption + per-cycle combined low-power mode energy consumption) × (the representative average unit cost in dollars per kWh, as provided by the Secretary)] + [(per-cycle water energy consumption for gas-heated or oil-heated water + per-cycle self-clean water energy consumption for gas-heated or oil-heated water) × (representative average unit cost in dollars per Btu for oil or gas, as appropriate, as provided by the Secretary)]. The estimated annual operating cost would be rounded off to the nearest dollar per year. To provide for the appropriate per-cycle electrical and water heating measures used in the annual energy cost calculation, DOE proposes new calculations of per-cycle self-clean electrical, hot water, and overall energy consumption in today's SNOPR.
The clothes washer test procedure at appendix J1 specifies test load size for the active washing mode energy tests based on the clothes washer's container volume. The table specifying the test load sizes, Table 5.1, currently covers clothes washer container volumes up to only 3.8 ft
DOE also received petitions for waiver from the current clothes washer test procedure from a number of manufacturers for clothes washers that they produce with clothes container volumes greater than 3.8 ft
DOE proposes to extend Table 5.1 in appendices J1 and J2 based on the extended version of Table 5.1 proposed in the September 2010 NOPR for appendix J2, with some minor adjustments. In the September 2010 NOPR, DOE presented inconsistent decimal places in the minimum, average, and maximum load sizes in Table 5.1. This subsequently affected the calculation of some of the average load size values in the table. In today's SNOPR, DOE proposes to amend the extension to Table 5.1 in appendices J1 and J2 by specifying each load size value to the hundredths decimal place.
After the publication of the September 2010 NOPR, DOE became aware of an error in the definition of cold rinse in the test procedure at appendix J1. Specifically, cold rinse is defined in section 1.22 of appendix J1 as “the coldest rinse temperature available on the machine (and should be the same rinse temperature selection tested in 3.7 of this appendix).” However, section 3.7 of appendix J1 contains provisions for testing warm rinse, which instruct that such tests be conducted with the hottest rinse temperature available. Thus, section 3.7 is inapplicable to the definition of cold rinse in section 1.22. DOE proposes in today's SNOPR to remove reference to section 3.7 in the definition of cold rinse in both section 1.22 of appendix J1 and proposed section 1.7 of appendix J2.
In the September 2010 NOPR, DOE proposed deleting the redundant sections 2.6.1.1-2.6.1.2.4 from appendix J2. These sections pertain to test cloth specifications and preconditioning and were made obsolete in the 2001 Final Rule, which added sections 2.6.3 through 2.6.7.2 into appendix J1. 66 FR 3314. In today's SNOPR, DOE proposes to remove these redundant sections from appendix J1 as well. Consistent with the proposal in the September 2010 NOPR, DOE proposes to use in section 2.6.4.3 the thread count specification from deleted section 2.6.1.1(A), of 65 × 57 per inch (warp × fill), based on supplier data. Additionally, DOE proposes to maintain a shrinkage limit, relocated from section 2.6.1.1(B) to new section 2.6.4.7, but to increase the current 4 percent limit to 5 percent. DOE also proposes to require the cloth shrinkage to be measured as per the American Association of Textile Chemists and Colorists (AATCC) Test Method 135-2010, “Dimensional Changes of Fabrics after Home Laundering.” These revisions are also supported by supplier data, according to AHAM. (AHAM, No. 15 at p. 15).
In the September 2010 NOPR, DOE proposed amending the clothes washer test procedure to specify the use of AHAM standard test detergent Formula
ALS supported DOE's proposal to specify the use of AHAM standard detergent Formula 3 in test cloth preconditioning as well as the proposal to follow the instructions included with the detergent, because it is makes the dosing common with the Dryer Test Load preconditioning procedure. (ALS, No. 10 at p. 5) NEEA stated that it foresees no problem with, and some benefit from, adopting the AHAM detergent specification. (NEEA, No. 12 at p. 14) Whirlpool stated that the proposed detergent formulation and dosage changes are consistent with AHAM Standard HLD-1-2009, which Whirlpool supports. (Whirlpool, No. 13 at p. 14) AHAM supported DOE's proposal to amend the test procedure to specify the use of AHAM standard test detergent Formula 3 in test cloth preconditioning at a dosing of 27.0g +4.0g/lb (AHAM, No. 14 at p. 15; Public Meeting Transcript, No. 20 at pp. 194-195).
In today's SNOPR, DOE proposes to amend the appendix J1 and J2 test procedures to require the use of the current AHAM standard test detergent formula for test cloth preconditioning, at a dosing of 27.0g +4.0g/lb. The current AHAM standard test detergent is Formula 3.
DOE has observed multiple clothes washer models that offer a “tap cold” wash temperature setting in addition to a “cold” wash temperature setting. DOE proposes to clarify how to classify these temperature selections in appendix J1 and appendix J2.
Section 3.6 of appendix J1 defines the cold wash selection as “the coldest wash temperature selection available.” Additionally, section 1.18 of Appendix J1 defines “warm wash” as “all wash temperature selections below the hottest hot, less than 135 °F, and above the coldest cold temperature selection.” In some cases with these models, DOE has observed that the “cold” setting mixes in hot water to raise the temperature above the cold water supply temperature, as defined in section 2.3 of Appendix J1. In such cases, DOE proposes that the manufacturer specified “cold” setting should be considered a warm wash, as defined in section 1.18; and that the “tap cold” setting should be considered the cold wash, as defined in section 3.6. In cases where the “cold” setting does not add any hot water for any of the test loads required for the energy test cycle, the “cold” setting should be considered the cold wash; and the “tap cold” setting would not be required for testing. DOE requests comment on the appropriateness of this clarification.
In the September 2010 NOPR, DOE proposed incorporating per-cycle self-clean hot water energy consumption (section 4.1.8) into the calculation for IMEF, as well as total per-cycle self-clean water consumption (section 4.2.14) into the calculation for IWF in appendix J2. The proposed calculations in section 4.1.8 and section 4.2.14 did not contain the numeric multipliers required to apportion the total annual self-clean water consumption over the 295 representative average number of clothes washer cycles in a year. In today's SNOPR, DOE proposes to adjust the calculations in section 4.1.8 and 4.2.14 by including a multiplier of 12/295, where 12 represents the average number of clothes washer self-clean cycles in a year, and 295 represents the average number of clothes washer cycles in a year.
EPCA requires that any test procedures prescribed or amended under this section be reasonably designed to produce test results that measure energy efficiency, energy use or estimated annual operating cost of a covered product during a representative average use cycle or period of use. Test procedures must also not be unduly burdensome to conduct.” (42 U.S.C. 6293(b)(3)).
In the September 2010 NOPR, DOE noted that the proposed amendments to the residential clothes washer test procedure would incorporate a test standard that is accepted internationally for measuring power consumption in standby mode and off mode (IEC Standard 62301). DOE analyzed the available versions of IEC Standard 62301 at that time—IEC Standard 62301 (First Edition), IEC Standard 62301 (CDV), and IEC Standard 62301 (FDIS)—and determined that the proposed amendments to the residential clothes washer test procedure would produce standby mode and off mode average power consumption measurements that are representative of an average use cycle. DOE also determined that the test methods and equipment that the amendments would require for measuring standby mode and off mode power in these products would not be substantially different from the test methods and equipment required in the current DOE test. Thus, DOE tentatively concluded that the proposed test procedure amendments would not require manufacturers to make significant investments in test facilities and new equipment. In sum, DOE tentatively concluded in the September 2010 NOPR that the amended test procedures would produce test results that measure the standby mode and off mode power consumption during representative use, and that the test procedures would not be unduly burdensome to conduct. 75 FR 57556, 57578 (Sept. 21, 2010).
DOE also noted in the September 2010 NOPR that the proposed active mode amendments may require some manufacturers to incur equipment purchases on the order of hundreds of dollars, and would require testing additional cycles that could increase the total test time for certain clothes washers by approximately 25 percent. DOE tentatively concluded, however, that including these additional cycles in the test procedure would provide for a more representative measurement of machine energy efficiency and water use, and that the time commitment required to test these additional cycles would not represent a significant burden on manufacturers since the current test procedure already requires multiple energy test cycles.
Today's supplemental proposed amendments to the DOE test procedures are based on an updated version of IEC Standard 62301, IEC Standard 62301 (Second Edition). As discussed in section III.B.1 of this notice, DOE believes that the provisions of IEC Standard 62301 (Second Edition) that it proposes to incorporate by reference in today's SNOPR provide a means to measure power consumption with greater accuracy and repeatability than the provisions from IEC Standard 62301 (First Edition) that were originally proposed in the December 2010 NOPR. For this reason, DOE concludes that today's supplemental proposed amendments would also provide measurements representative of average consumer use of the residential clothes washer under test. DOE further believes these new provisions in the applicable sections of IEC Standard 62301 (Second Edition) improve test results without undue testing burden. DOE also believes that the potential for increased test burden for certain power consumption measurements is offset by more reasonable requirements for testing equipment, while maintaining acceptable measurement accuracy.
The active mode provisions newly proposed in today's SNOPR consist of clarifications to test conduct and revised calculations, and would not require any additional investment, equipment purchases, or test time beyond those described in the September 2010 NOPR. Therefore, DOE's retains its tentative conclusion that the proposed active mode amendments would not impose a significant burden on manufacturers.
Section 325(gg)(2)(A) of EPCA requires that standby mode and off mode energy consumption be integrated into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product unless the current test procedures already fully account for the standby mode and off mode energy consumption or if an integrated test procedure is technically infeasible. (42 U.S.C. 6295(gg)(2)(A))
Today's SNOPR incorporates the clothes washer standby and off mode energy consumption into a “combined low-power mode” energy consumption, expressed in kWh, and converted into an IMEF, as discussed in section III.B.2 of this notice.
EPCA provides that test procedure amendments adopted to comply with the new EPCA requirements for standby and off mode energy consumption will not determine compliance with previously established standards. (42 U.S.C. 6295(gg)(2)(C)) Because DOE is incorporating these changes in a new appendix J2 to 10 CFR part 430 subpart B that manufacturers would not be required to use until the compliance date of amended energy conservation standards for residential clothes washers, the test procedure amendments pertaining to standby mode and off mode energy consumption that DOE proposes to adopt in this rulemaking would not apply to, and would have no effect on, existing standards.
The test procedure for commercial clothes washers is required to be the same test procedure established for residential clothes washers. (42 U.S.C. 6314(a)(8)) Thus, the test procedure set forth in appendix J1 of subpart B of 10 CFR part 430 is also currently used to test commercial clothes washers. (10 CFR part 431.154)
DOE noted in the September 2010 NOPR that the impacts to testing commercial clothes washers would be limited to the proposed amendments associated with active washing mode because commercial clothes washer standards are based on MEF and WF. Among others, these include proposed changes to the test load size specification, temperature use factors, dryer usage factor (DUF), capacity measurement, and water supply pressure specification, all of which could affect the measured energy and water efficiencies of a commercial clothes washer. DOE believed that the most significant impacts could be associated with the proposed amendments for capacity measurement and usage factors, but did not have information to evaluate any impacts for commercial clothes washers. 75 FR 57556, 57578 (Sept. 21, 2010).
In response, DOE received several comments on potential impacts of an amended clothes washer test procedure on commercial clothes washers. In today's SNOPR, DOE addresses those comments that pertain to the revised proposal.
ALS commented that the most significant impact of the proposed amended test procedure on commercial clothes washers is the standby power measurement, because unlike most residential clothes washers, commercial clothes washers are vended and have lighted displays to invite customers to use them and provide instructions for use. According to ALS, the inclusion of standby power would significantly impact the ability for existing commercial clothes washers to meet more stringent minimum energy conservation standards without requiring a ready-to-use vended clothes washer to power down the display. ALS stated that a powered-down display would cause a potential customer to think the washer is not operational or ready to use, and thus discourage its use. (ALS, No. 10 at pp. 5-6).
ALS also commented that the next most significant impact of the proposed amended test procedure would be the clothes container capacity measurement method, which would reduce the existing capacity rating. This would significantly reduce an already smaller tub used in commercial markets to even less volume measured, making it more difficult to achieve the minimum required energy efficiency standard. (ALS, No. 10 at p. 6)
Whirlpool commented that the nature of use for commercial clothes washers would preclude the existence of delay start mode, cycle finished mode, and steam cycles. Whirlpool stated that the clothes washer test procedure should ignore those features if they are not on the unit under test. Whirlpool also expressed concern regarding the capacity measurement and modified temperature use factors. Whirlpool stated that the proposed IMEF and IWF calculations are suitable for commercial clothes washers. (Whirlpool, No. 13 at p. 14).
In response to these comments, and as stated above, the impacts to testing commercial clothes washers would be limited to the proposed amendments associated with active washing mode because commercial clothes washer standards are based on MEF and WF. Because commercial clothes washer standards do not include standby and off mode, the addition of procedures to measure the energy use in standby and off modes would be inapplicable to and would not affect the standards for commercial clothes washers pursuant to 42 U.S.C. 6293(e). For the active mode provisions of the proposed test procedure that could affect the measured energy and water efficiencies of a commercial clothes washer, DOE notes that 42 U.S.C. 6293(e)(3) provides the following: models of covered products in use before the date on which an amended energy conservation standard (developed using the amended test procedure pursuant to 42 U.S.C. 6293(e)(2)) becomes effective that comply with the energy conservation standard applicable to such covered products on the day before such date are deemed to comply with the amended standard. The same is true of revisions of such models that come into use after such date and have the same energy efficiency, energy use or water use characteristics.
DOE concurs that commercial clothes washers would not be affected by any provisions for measuring delay start mode, cycle finished mode, or steam cycles. Under the proposal in today's SNOPR, the energy use for delay start and cycle finished modes would be included in the test results pursuant to the “alternate method” for measuring standby mode and off mode energy use, described in section III.B.2, and any such energy use is not included in the MEF and WF metrics used for commercial clothes washers.
Sections 6299-6305 and 6316 of EPCA authorize DOE to enforce compliance with the energy and water
The certification requirements for residential clothes washers consist of a sampling plan for selection of units for testing and requirements for certification reports. Because the proposed amendments to the test procedure would not revise the current energy conservation standards, DOE is not proposing any amendments to the certification reporting requirements for these products. However, because DOE proposes in today's SNOPR to introduce two new metrics (IMEF and IWF), DOE proposes amended provisions in the sampling plan in 10 CFR part 429.20(a)(2) that would include IMEF along with the existing measure of MEF, and IWF along with the existing measure of WF.
In the September 2010 NOPR, DOE determined that the proposed test procedure amendments would not affect the FTC EnergyGuide labeling program because DOE did not propose to amend the estimated annual operating cost calculation in 10 CFR 430.23.
NEEA commented that the energy use and annual energy cost information on the Energy Guide label is supposed to represent a reasonably accurate estimate of the annual energy use and energy cost associated with the use of the labeled product. NEEA stated that it would be nearly impossible to justify any rules associated with the accuracy of such representations if whole categories of annual energy use and cost are ignored. NEEA stated that Congress intended to account for the energy use of every appliance in its inactive mode and to make the results known to consumers. (NEEA, No.12 at p. 8)
NEEA also noted that the ratings of many models may change as a result of the revised test procedure. NEEA commented that the EnergyGuide labels for individual models tested under appendix J1 and appendix J2 will exist in the marketplace together for a short time, raising the likelihood of consumer confusion when this happens. According to NEEA, there has been considerable consumer confusion in the past when new models arrive with energy use and annual cost numbers that are lower (or higher) than the lowest (or highest) numbers in the range on the EnergyGuide label. (NEEA, No. 12 at pp.15-16).
The Joint Comment stated that the EnergyGuide label is designed to communicate to consumers the estimated average annual operating cost of a given product. Since the annual operating cost for a washer that a consumer will incur includes the cost of energy consumed in all modes including self-clean, standby, off, delay start, and cycle finished modes, the operating costs of all modes should be included in the annual operating cost calculation. (Joint Comment, No. 16 at p. 2).
In addition, the Joint Comment stated that the cost of energy consumed in the additional non-active modes for many products will likely be significant compared to the total energy cost, which DOE estimates could consume as much as 48 kWh/year. The Joint Commenters noted that the EnergyGuide label includes only the cost of the machine energy and the water heating energy, and does not include the cost of the energy required to remove the remaining moisture from the clothes, which makes the cost of energy consumed in non-active-washing modes more significant. According to the Joint Comment, the most efficient washers listed by the FTC with a capacity greater than 3 cubic feet only use about 110-130 kWh/year, and, therefore, the energy consumed in modes other than the active washing mode could represent up to about 40 percent of total annual energy use, which is significant. (Joint Comment, No. 16 at pp. 2-3).
Whirlpool objected to measuring additional energy use in non-active modes but not reporting them on the EnergyGuide tag, stating that this would be inconsistent. (Whirlpool, Public Meeting Transcript, No. 20 at pp. 95-96).
ASAP commented that when the new standards go into effect, the minimum and maximum operating costs on the EnergyGuide label would have to be revised anyway to take into account the new standards, and that the additional annual operating costs could be incorporated at that point. ASAP stated that it supports incorporating all energy use, including energy use in non-active modes. (ASAP, Public Meeting Transcript, No. 20 at p. 96).
As discussed in section III.B.6, DOE proposes in today's SNOPR to amend the estimated annual operating cost by incorporating the cost of energy consumed in the non-active washing modes. DOE also proposed in the September 2010 NOPR to update the number of annual use cycles. This will affect the estimated annual operating cost disclosed on the EnergyGuide label. Pursuant to 42 U.S.C. 6294, the FTC may revise the EnergyGuide label for residential clothes washers when the amended test procedure becomes effective.
The Office of Management and Budget has determined that test procedure rulemakings do not constitute “significant regulatory actions” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993). Accordingly, this action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).
The Regulatory Flexibility Act (5 U.S.C. 601
DOE reviewed today's supplemental proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. DOE tentatively concluded that the September 2010 NOPR would not have a significant impact on a substantial number of small entities, and today's SNOPR contains no revisions to that proposal that would result a significant impact on a substantial number of small entities. The factual basis for this certification is as follows:
The Small Business Administration (SBA) considers a business entity to be
The proposed rule would amend DOE's test procedure by incorporating testing provisions to address active mode, standby mode, and off mode energy and water consumption that will be used to demonstrate compliance with energy conservation standards. The proposed test procedure amendments for measuring standby and off mode power consumption using the “alternative method” involve measuring power input when the clothes washer is in inactive mode or off mode, or both if both modes are available on the clothes washer under test, as a proxy for measuring power consumption in all low power modes. These tests can be conducted in the same facilities used for the current energy testing of these products, so it is anticipated that manufacturers would not incur any additional facilities costs as a result of the proposed test procedure amendments. The power meter required for these tests might require greater accuracy than the power meter used for current energy testing, but the investment required for a possible instrumentation upgrade is expected to be approximately a few thousand dollars. The duration of each non-active washing mode test period is expected to be roughly 30-45 minutes, depending on stability of the power consumption, using the alternative approach described previously. This is comparable to approximately one-half to two-thirds the time required to conduct a single energy test cycle. Each clothes washer tested requires, on average, approximately 15 test cycles for energy testing, which equates to about 3 days of testing. Using the alternative approach proposed in today's SNOPR, DOE estimates roughly a 3-percent increase in total test period duration. This represents a significant reduction compared to the 11 percent increase DOE estimated in the September 2010 NOPR, which was based on the proposal to measure inactive, off, delay start, and cycle finished modes separately. DOE notes that the provisions from IEC Standard 62301 (Second Edition) proposed to incorporate by reference in today's SNOPR would require longer test durations in the event that the threshold stability criteria of the power measurement are not met. DOE believes that the likelihood of such a longer test being required is very small, based on the observations during testing for the September 2010 NOPR.
DOE also estimates that it costs a manufacturer approximately $2300 on average, including the cost of consumables, to conduct energy testing for a particular clothes washer. DOE further estimates that the cost of additional testing for non-active washing modes using the proposed alternative approach would average $75 per machine, a 3-percent increase over current test costs. This represents a significant reduction compared to the 9 percent increase ($200) DOE estimated in the September 2010 NOPR, which was based on the proposal to measure inactive, off, delay start, and cycle finished modes separately. For the same reason as discussed above, DOE does not believe it is likely that these test costs will be higher due to extended test times required by IEC Standard 62301 (Second Edition) in the event that the threshold stability criteria of the power measurement are not met.
DOE believes these additional requirements for equipment and time and additional cost to conduct the proposed non-active washing mode test would not be expected to impose a significant economic burden on entities subject to the applicable testing requirements. Although the small business has significantly lower sales than other manufacturers over which to amortize these additional costs, it produces only a single platform which would be subject to the proposed non-active washing mode tests.
DOE does not believe that the proposed test procedure amendments for the active washing mode discussed in today's SNOPR would increase test burden because they comprise revisions to calculations rather than additional, longer, or more complex methodology. For standby mode and off mode, as described in section III.B.1, certain provisions in section 5 of IEC Standard 62301 Second Edition could require additional testing time compared to the First Edition. However, DOE expects the large majority of clothes washers to require less than one hour of testing time to perform the standby power test under the proposed alternative approach. Therefore, DOE does not believe these proposed amendments would have a significant impact on a substantial number of small entities.
For these reasons, DOE tentatively concludes and certifies that the September 2010 NOPR, as modified by today's SNOPR, would not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. DOE has previously transmitted the certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b). DOE seeks comment on the updated certification set forth above.
Manufacturers of residential clothes washers must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for clothes washers, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including residential clothes washers. 76 FR 12422 (March 7, 2011). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB control number 1910-1400. Public reporting burden for the certification is estimated to average 20 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.
In this proposed rule, DOE proposes test procedure amendments that it expects will be used to develop and implement future energy conservation standards for residential clothes washers. DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today's proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132.
Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the proposed rule meets the relevant standards of Executive Order 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this regulation would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's proposed rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
Today's regulatory action to amend the test procedure for measuring the energy efficiency of residential clothes washers is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.
Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C. 788; FEAA) Section 32 essentially provides in relevant part that, where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the FTC concerning the impact of the commercial or industry standards on competition.
The proposed modifications to the test procedure addressed by this action incorporate testing methods contained in the commercial standard, IEC Standard 62301, Edition 2.0 2011-01, “Household electrical appliances—Measurement of standby power.” DOE has evaluated this standard and is unable to conclude whether it fully complies with the requirements of section 32(b) of the FEAA (
DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the
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Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English and are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.
Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).
Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:
(1) Incorporation by reference of certain provisions of IEC 62301 (Second Edition), and the accompanying impacts on measurement improvement and test burden (see section III.B.1);
(2) The acceptability of measuring the total harmonic content, crest factor, and maximum current ratio before and after the actual test measurement if the power measuring instrument is unable to perform these measurements during the actual test measurement;
(3) The potential test burden that would be required for a laboratory to upgrade its data acquisition system to enable real-time statistical analysis capabilities;
(4) The alternate method for measuring energy use in low-power modes by means of measuring power consumption only in the inactive mode and off mode (see section III.B.2);
(5) The proposed clarification of the energy test cycle definition (see section III.B.3);
(6) The proposed use of a weighted-average load size based on the load usage factors and the minimum, average, and maximum load sizes rather than the product of the LAF and maximum load size in the drying energy calculation (see section III.B.4); and
(7) The proposed clarification of how to classify the wash temperature settings for clothes washers with both a “cold” wash setting and a “tap cold” wash setting.
(8) DOE's tentative conclusion and certification that the September 2010 NOPR, as modified by today's SNOPR, would not have a significant economic impact on a substantial number of small entities.
The Secretary of Energy has approved publication of this proposed rule.
Energy conservation, Household appliances, Reporting and recordkeeping requirements.
Administrative practice and procedure, Energy conservation, Household appliances, Incorporation by reference, Small businesses.
For the reasons stated in the preamble, DOE proposes to amend parts 429 and 430 of title 10 of the Code of Federal Regulations, as set forth below:
1. The authority citation for part 429 continues to read as follows:
42 U.S.C. 6291-6317.
2. Section 429.20 is amended by revising paragraphs (a)(2)(i) introductory text and (a)(2)(ii) introductory text to read as follows:
(a) * * *
(2) * * *
(i) Any represented value of the water factor, integrated water factor, the estimated annual operating cost, the energy or water consumption, or other measure of energy or water consumption of a basic model for which consumers would favor lower values shall be greater than or equal to the higher of:
(ii) Any represented value of the modified energy factor, integrated modified energy factor, or other measure of energy or water consumption of a basic model for which consumers would favor higher values shall be less than or equal to the lower of:
3. The authority citation for Part 430 continues to read as follows:
42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
4. Section 430.3 is amended by:
a. Redesignating paragraphs (c) through (o) as paragraphs(d) through (p);
b. Adding new paragraph (c);
c. Revising newly designated paragraph (m)(2).
The additions read as follows:
(c)
(1) AATCC Test Method 79-2010, Absorbency of Bleached Textiles,, IBR approved for Appendix J1 and Appendix J2.
(2) AATCC Test Method 118-2007, Oil Repellency: Hydrocarbon Resistance Test,, IBR approved for Appendix J1 and Appendix J2.
(3) AATCC Test Method 135-2010, Dimensional Changes of Fabrics after Home Laundering, IBR approved for Appendix J1 and Appendix J2.
(m) * * *
(2) IEC Standard 62301 (“IEC 62301”),
5. Section 430.23 is amended by revising paragraph (j) to read as follows:
(j)
(i) Before use of appendix J2 becomes mandatory,
(A) When electrically heated water is used,
(B) When gas-heated or oil-heated water is used,
(ii) After use of appendix J2 becomes mandatory (see the note at the beginning of appendix J2),
(A) When electrically heated water is used,
(B) When gas-heated or oil-heated water is used,
(2)(i) The modified energy factor for automatic and semi-automatic clothes washers is determined in accordance with section 4.4 of appendix J1 before appendix J2 becomes mandatory and section 4.6 of appendix J2 when appendix J2 becomes mandatory. The result shall be rounded off to the nearest 0.01 cubic foot per kilowatt-hour per cycle.
(ii) The integrated modified energy factor for automatic and semi-automatic clothes washers is determined in accordance with section 4.7 of appendix J2 when appendix J2 becomes mandatory. The result shall be rounded off to the nearest 0.01 cubic foot per kilowatt-hour per cycle.
(3) Other useful measures of energy consumption for automatic or semi-automatic clothes washers shall be those measures of energy consumption which the Secretary determines are likely to assist consumers in making purchasing decisions and which are derived from the application of appendix J1 before the date that appendix J2 becomes mandatory or appendix J2 upon the date that appendix J2 becomes mandatory. In addition, the annual water consumption of a clothes washer can be determined by the product of:
(i) Before appendix J2 becomes mandatory, the representative average-use of 392 cycles per year and the total weighted per-cycle water consumption for cold wash in gallons per cycle determined according to section 4.2.2 of appendix J1. The water consumption factor can be determined in accordance with section 4.2.3 of appendix J1. The remaining moisture content can be determined in accordance with section 3.8 of appendix J1.
(ii) After appendix J2 becomes mandatory, the representative average-use of 295 cycles per year and the total weighted per-cycle water consumption for all wash cycles in gallons per cycle determined according to section 4.2.13 of appendix J2. The water consumption factor can be determined in accordance with section 4.2.15 of appendix J2. The integrated water consumption factor can be determined in accordance with section 4.2.16 of appendix J2. The remaining moisture content can be determined in accordance with section 3.8 of appendix J2.
6. Appendix J to subpart B of part 430 is removed.
7. Appendix J1 to subpart B of part 430 is amended by:
a. Revising the introductory text;
b. Revising section 1.22;
c. Removing sections 2.6.1.1 through 2.6.1.2.4;
d. Revising section 2.6.3.1;
e. Revising section 2.10;
f. Revising section 3.6;
g. Revising section 4.1.4, and
h. Revising section 5.
The revisions read as follows:
Appendix J1 is effective until the compliance date of any amended standards for residential clothes washers. After this date, all residential clothes washers shall be tested using the provisions of Appendix J2 of this appendix.
1.22
2.6.3.1 Perform 5 complete normal wash-rinse-spin cycles, the first two with AHAM Standard detergent Formula 3 and the last three without detergent. Place the test cloth in a clothes washer set at the maximum water level. Wash the load for ten minutes in soft water (17 ppm hardness or less) using 27.0 grams + 4.0 grams per lb of cloth load of AHAM Standard detergent Formula 3. The wash temperature is to be controlled to 135 °F ± 5 °F (57.2 °C ± 2.8 °C) and the rinse temperature is to be controlled to 60 °F ± 5 °F (15.6 °C ± 2.8 °C). Repeat the cycle with detergent and then repeat the cycle three additional times without detergent, bone drying the load between cycles (total of five wash and rinse cycles).
2.10
3.6
4.1.4
8. Add a new Appendix J2 to subpart B of part 430 to read as follows:
Appendix J1 is effective until the compliance date of any amended standards for residential clothes washers. After this date, all residential clothes washers shall be tested using the provisions of Appendix J2.
1.1
1.2
1.3
Appendix J2 does not provide a means for determining the energy consumption of a clothes washer with an adaptive control system. A waiver must be obtained pursuant to 10 CFR 430.27 to establish an acceptable test procedure for each such clothes washer.
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
(a) The machine electrical energy consumption;
(b) The hot water energy consumption;
(c) The energy required for removal of the remaining moisture in the wash load;
(d) The combined low-power mode energy consumption; and
(e) The self-clean energy consumption, as applicable.
1.17
1.18
1.19
1.20
1.21
1.22
1.23
1.24
(a) Dedicated to cleaning, deodorizing, or sanitizing the clothes washer by eliminating sources of odor, bacteria, mold, and mildew;
(b) Recommended to be run intermittently by the manufacturer; and
(c) Separate from clothes washing cycles.
1.25
1.26
1.27
(a) To facilitate the activation of other modes (including activation or deactivation of active mode) by remote switch (including remote control), internal sensor, or timer;
(b) Continuous functions, including information or status displays (including clocks) or sensor-based functions. A timer is a continuous clock function (which may or may not be associated with a display) that provides regular scheduled tasks (
1.28
1.29
The following examples are provided to show how the above symbols can be used to define variables:
1.30
1.31
1.32
1.33
1.34
1.35
1.36
2.1
2.2
2.2.1
2.2.2
2.3
2.3.1
2.3.2
2.4
2.5
2.5.1
2.5.1.1
2.5.1.2
2.5.2
2.5.3
2.5.4
2.5.5
2.5.6
2.6
2.6.1
2.6.2
2.6.3
2.6.3.1 Perform 5 complete normal wash-rinse-spin cycles, the first two with current AHAM Standard detergent Formula 3 and the last three without detergent. Place the test cloth in a clothes washer set at the maximum water level. Wash the load for ten minutes in soft water (17 ppm hardness or less) using 27.0 grams + 4.0 grams per lb of cloth load of AHAM Standard detergent Formula 3. The wash temperature is to be controlled to 135 °F ± 5 °F (57.2 °C ± 2.8 °C) and the rinse temperature is to be controlled to 60 °F ± 5 °F (15.6 °C ± 2.8 °C). Repeat the cycle with detergent and then repeat the cycle three additional times without detergent, bone drying the load between
2.6.4
2.6.4.1
2.6.4.2 The fabric weight specification shall be 5.60 ± 0.25 ounces per square yard (190.0 ± 8.4 g/m
2.6.4.3 The thread count shall be 65 x 57 per inch (warp × fill), ±2 percent.
2.6.4.4 The warp yarn and filling yarn shall each have fiber content of 50 percent ± 4 percent cotton, with the balance being polyester, and be open end spun, 15/1 ± 5 percent cotton count blended yarn.
2.6.4.5 Water repellent finishes, such as fluoropolymer stain resistant finishes shall not be applied to the test cloth. The absence of such finishes shall be verified by:
2.6.4.5.1 American Association of Textile Chemists and Colorists (AATCC) Test Method 118-2007,
2.6.4.5.2 American Association of Textile Chemists and Colorists (AATCC) Test Method 79-2010,
2.6.4.6 The moisture absorption and retention shall be evaluated for each new lot of test cloth by the Standard Extractor Remaining Moisture Content (RMC) Test specified in section 2.6.5 of this Appendix.
2.6.4.6.1 Repeat the Standard Extractor RMC Test in section 2.6.5 of this Appendix three times.
2.6.4.6.2 An RMC correction curve shall be calculated as specified in section 2.6.6 of this Appendix.
2.6.4.7 The maximum shrinkage after preconditioning shall not be more than 5 percent on the length and width. Measure per AATCC Test Method 135-2010,
2.6.5
2.6.5.1 The standard extractor RMC tests shall be run in a North Star Engineered Products Inc. (formerly Bock) Model 215 extractor (having a basket diameter of 19.5 inches, length of 12 inches, and volume of 2.1 ft
2.6.5.2
2.6.5.3
2.6.5.3.1 Record the “bone-dry” weight of the test load (WI).
2.6.5.3.2 Prepare the test load for soak by grouping four test cloths into loose bundles. Bundles are created by hanging four cloths vertically from one corner and loosely wrapping the test cloth onto itself to form the bundle. Bundles are then placed into the water for soak. Eight to nine bundles will be formed depending on the test load. The ninth bundle may not equal four cloths but can incorporate energy stuffer cloths to help offset the size difference.
2.6.5.3.3 Soak the test load for 20 minutes in 10 gallons of soft (<17 ppm) water. The entire test load shall be submerged. The water temperature shall be 100 °F ± 5°F (38 °C ± 3 °C)
2.6.5.3.4 Remove the test load and allow each of the test cloth bundles to drain over the water bath for a maximum of 5 seconds.
2.6.5.3.5 Manually place the test cloth bundles in the basket of the extractor, distributing them evenly by eye. The draining and loading process should take less than 1 minute. Spin the load at a fixed speed corresponding to the intended centripetal acceleration level (measured in units of the acceleration of gravity, g) ± 1g for the intended time period ± 5 seconds.
2.6.5.3.6 Record the weight of the test load immediately after the completion of the extractor spin cycle (WC).
2.6.5.3.7 Calculate the RMC as (WC-WI)/WI.
2.6.5.3.8 It is not necessary to drain the soak tub if the water bath is corrected for water level and temperature before the next extraction.
2.6.5.3.9 It is not necessary to dry the test load in between extraction runs. However, the bone dry weight shall be checked after every 12 extraction runs to make sure the bone dry weight is within tolerance (8.4 ± 0.1 lb).
2.6.5.3.10 The RMC of the test load shall be measured at five g levels: 100 g, 200 g, 350 g, 500 g, and 650 g, using two different spin times at each g level: 4 minutes and 15 minutes.
2.6.5.4 Repeat section 2.6.5.3 of this Appendix using soft (<17 ppm) water at 60 °F ± 5 °F.
2.6.6
2.6.6.1 Average the values of 3 test runs and fill in Table 2.6.5 of this Appendix. Perform a linear least-squares fit to relate the standard RMC (RMC
2.6.6.2 Perform an analysis of variance test using two factors, spin speed and lot, to check the interaction of speed and lot. Use the values from Table 2.6.5 and Table 2.6.6.1 of this Appendix in the calculation. The “P” value in the variance analysis shall be greater than or equal to 0.1. If the “P” value is less than 0.1, the test cloth is unacceptable. “P” is a theoretically based probability of interaction based on an analysis of variance.
2.6.7
2.6.7.1 Using the coefficients A and B calculated in section 2.6.6.1 of this Appendix:
2.6.7.2 Substitute RMC
2.7
2.8
2.8.1 The test load sizes to be used to measure RMC are specified in section 3.8.1 of this Appendix.
2.8.2 Test loads for energy and water consumption measurements shall be bone dry prior to the first cycle of the test, and dried to a maximum of 104 percent of bone dry weight for subsequent testing.
2.8.3 Load the energy test cloths by grasping them in the center, shaking them to hang loosely and then put them into the clothes container prior to activating the clothes washer.
2.9
2.9.1
2.9.2
2.10
2.11
2.11.1
2.11.2
2.12
3.1
3.1.1 Place the clothes washer in such a position that the uppermost edge of the clothes container opening is leveled horizontally, so that the container will hold the maximum amount of water.
3.1.2 Line the inside of the clothes container with 2 mil (0.051 mm) plastic sheet. All clothes washer components which occupy space within the clothes container and which are recommended for use with the energy test cycle shall be in place and shall be lined with 2 mil (0.051 mm) plastic sheet to prevent water from entering any void space.
3.1.3 Record the total weight of the machine before adding water.
3.1.4 Fill the clothes container manually with either 60 °F ± 5 °F (15.6 °C ± 2.8 °C) or 100 °F ± 10 °F (37.8 °C ± 5.5 °C) water, with the door open. For a top-loading, vertical-axis clothes washer, fill the clothes container to the uppermost edge of the rotating portion, including any balance ring. For a front-loading, horizontal-axis clothes washer, fill the clothes container to the uppermost edge that is in contact with the door seal. For all clothes washers, any volume which cannot be occupied by the clothing load during operation must be excluded from the measurement. Measure and record the weight of water, W, in pounds.
3.1.5 The clothes container capacity is calculated as follows:
3.2
3.2.1
3.2.1.1 For automatic clothes washers set the wash/rinse temperature selection control to obtain the wash water temperature selection control to obtain the wash water temperature desired (extra hot, hot, warm, or cold) and cold rinse, and open both the hot and cold water faucets.
3.2.1.2 For semi-automatic washers:
(1) For hot water temperature, open the hot water faucet completely and close the cold water faucet;
(2) For warm inlet water temperature, open both hot and cold water faucets completely;
(3) For cold water temperature, close the hot water faucet and open the cold water faucet completely.
3.2.1.3
(1) For non-water heating clothes washers, calculate Tw as follows:
(2) For water-heating clothes washers, measure and record the temperature of each warm wash selection after fill.
3.2.2 Total water consumption during the energy test cycle shall be measured, including hot and cold water consumption during wash, deep rinse, and spray rinse.
3.2.3
3.2.3.1
3.2.3.2
3.2.3.2.1 Not user adjustable. The maximum, minimum, and average water levels as defined in the following sections shall be interpreted to mean that amount of water fill which is selected by the control system when the respective test loads are used, as defined in Table 2.8 of this Appendix. The load usage factors which shall be used when calculating energy consumption values are defined in Table 4.1.3 of this Appendix.
3.2.3.2.2 User adjustable. Four tests shall be conducted on clothes washers with user adjustable adaptive water fill controls which affect the relative wash water levels. The first test shall be conducted with the maximum test load and with the adaptive water fill control system set in the setting that will give the most energy intensive result. The second test shall be conducted with the minimum test load and with the adaptive water fill control system set in the setting that will give the least energy intensive result. The third test shall be conducted with the average test load and with the adaptive water fill control system set in the setting that will give the most energy intensive result for the given test load. The fourth test shall be conducted with the average test load and with the adaptive water fill control system set in the setting that will give the least energy intensive result for the given test load. The energy and water consumption for the average test load and water level shall be the average of the third and fourth tests.
3.2.3.3
3.3
3.3.1
3.3.2
3.3.3
3.4
3.4.1
3.4.2
3.4.3
3.5
3.5.1
3.5.2
3.5.2.1
3.5.2.2
3.5.2.3
3.6
3.6.1
3.6.2
3.6.3
3.7
3.7.1
3.7.2
3.7.2.1
3.7.2.2
3.7.2.3
3.8
3.8.1 The wash temperature will be the same as the rinse temperature for all testing. Use the maximum test load as defined in Table 5.1 and section 3.1 of this Appendix for testing.
3.8.2
3.8.2.1 Record the actual “bone dry” weight of the test load (WI
3.8.2.2 Set water level selector to maximum fill.
3.8.2.3 Run the energy test cycle.
3.8.2.4 Record the weight of the test load immediately after completion of the energy test cycle (WC
3.8.2.5 Calculate the remaining moisture content of the maximum test load, RMC
3.8.3
3.8.3.1 Complete sections 3.8.2.1 through 3.8.2.4 of this Appendix for cold rinse. Calculate the remaining moisture content of the maximum test load for cold rinse, RMC
3.8.3.2 Complete sections 3.8.2.1 through 3.8.2.4 of this Appendix for warm rinse. Calculate the remaining moisture content of the maximum test load for warm rinse, RMC
3.8.3.3 Calculate the remaining moisture content of the maximum test load, RMC
TUF
3.8.4 Clothes washers that have options such as multiple selections of spin speeds or spin times that result in different RMC values and that are available in the energy test cycle, shall be tested at the maximum and minimum extremes of the available options, excluding any “no spin” (zero spin speed) settings, in accordance with requirements in section 3.8.2 or 3.8.3 of this Appendix. The calculated RMC
3.9
3.9.1
3.9.2
3.9.3
3.10
3.11
3.11.1 If a clothes washer has an inactive mode as defined in section 1.15 of this Appendix, measure and record the average inactive mode power of the clothes washer, P
3.11.2 If a clothes washer has an off mode as defined in section 1.23 of this Appendix, measure and record its average off mode power, P
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
4.1.7
4.1.8
4.1.9
4.1.10
4.2
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
4.2.6
4.2.7
4.2.8
4.2.9
4.2.10
4.2.11
4.2.12
4.2.13
4.2.14
4.2.15
4.2.16
4.3
4.4
4.5
4.6
4.7
6.1
6.2
(2) The field test results would be used to determine the best method to correlate the rating of the test clothes washer to the rating of the base clothes washer. If the base clothes washer is rated at A kWh per year, but field tests at B kWh per year, and the test clothes washer field tests at D kWh per year, the test unit would be rated as follows:
6.3
Calculate:
The percentage weighting factors:
(2) Energy consumption (HE
(a) Any alien who planned, ordered, assisted, aided and abetted, committed or otherwise participated in, including through command responsibility, widespread or systematic violence against any civilian population based in whole or in part on race; color; descent; sex; disability; membership in an indigenous group; language; religion; political opinion; national origin; ethnicity; membership in a particular social group; birth; or sexual orientation or gender identity, or who attempted or conspired to do so.
(b) Any alien who planned, ordered, assisted, aided and abetted, committed or otherwise participated in, including through command responsibility, war crimes, crimes against humanity or other serious violations of human rights, or who attempted or conspired to do so.