[Title 5 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2007 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          5


          Part 1200 to End

                         Revised as of January 1, 2007


          Administrative Personnel
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2007
          With Ancillaries
                    Published by:
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................     vii

  Title 5:
          Chapter II--Merit Systems Protection Board                 5
          Chapter III--Office of Management and Budget             103
          Chapter V--The International Organizations Employees 
          Loyalty Board                                            179
          Chapter VI--Federal Retirement Thrift Investment 
          Board                                                    185
          Chapter VIII--Office of Special Counsel                  299
          Chapter IX--Appalachian Regional Commission              317
          Chapter XI--Armed Forces Retirement Home                 321
          Chapter XIV--Federal Labor Relations Authority, 
          General Counsel of the Federal Labor Relations 
          Authority and Federal Service Impasses Panel             329
          Chapter XV--Office of Administration, Executive 
          Office of the President                                  427
          Chapter XVI--Office of Government Ethics                 447
          Chapter XXI--Department of the Treasury                  665
          Chapter XXII--Federal Deposit Insurance Corporation      675
          Chapter XXIII--Department of Energy                      585
          Chapter XXIV--Federal Energy Regulatory Commission       689

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          Chapter XXV--Department of the Interior                  693
          Chapter XXVI--Department of Defense                      701
          Chapter XXVIII--Department of Justice                    707
          Chapter XXIX--Federal Communications Commission          713
          Chapter XXX--Farm Credit System Insurance 
          Corporation                                              717
          Chapter XXXI--Farm Credit Administration                 723
          Chapter XXXIII--Overseas Private Investment 
          Corporation                                              729
          Chapter XXXV--Office of Personnel Management             733
          Chapter XL--Interstate Commerce Commission               737
          Chapter XLI--Commodity Futures Trading Commission        741
          Chapter XLII--Department of Labor                        745
          Chapter XLIII--National Science Foundation               751
          Chapter XLV--Department of Health and Human Services     757
          Chapter XLVI--Postal Rate Commission                     779
          Chapter XLVII--Federal Trade Commission                  783
          Chapter XLVIII--Nuclear Regulatory Commission            787
          Chapter L--Department of Transportation                  793
          Chapter LII--Export-Import Bank of the United States     797
          Chapter LIII--Department of Education                    803
          Chapter LIV--Environmental Protection Agency             807
          Chapter LV--National Endowment for the Arts              813
          Chapter LVI--National Endowment for the Humanities       817
          Chapter LVII--General Services Administration            821

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          Chapter LVIII--Board of Governors of the Federal 
          Reserve System                                           827
          Chapter LIX--National Aeronautics and Space 
          Administration                                           833
          Chapter LX--United States Postal Service                 839
          Chapter LXI--National Labor Relations Board              843
          Chapter LXII--Equal Employment Opportunity 
          Commission                                               847
          Chapter LXIII--Inter-American Foundation                 851
          Chapter LXV--Department of Housing and Urban 
          Development                                              855
          Chapter LXVI--National Archives and Records 
          Administration                                           863
          Chapter LXVII--Institute of Museum and Library 
          Services                                                 867
          Chapter LXIX--Tennessee Valley Authority                 871
          Chapter LXXI--Consumer Product Safety Commission         875
          Chapter LXXIII--Department of Agriculture                879
          Chapter LXXIV--Federal Mine Safety and Health Review 
          Commission                                               885
          Chapter LXXVI--Federal Retirement Thrift Investment 
          Board                                                    889
          Chapter LXXVII--Office of Management and Budget          893
          Chapter XCVII--Department of Homeland Security Human 
          Resources Management System (Department of Homeland 
          Security--Office of Personnel Management)                897
          Chapter XCIX--Department of Defense Human Resources 
          Management and Labor Relations Systems (Department 
          of Defense--Office of Personnel Management)              951
  Finding Aids:
      Table of CFR Titles and Chapters........................    1013
      Alphabetical List of Agencies Appearing in the CFR......    1031
      List of CFR Sections Affected...........................    1041

[[Page vi]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 5 CFR 1200.1 refers 
                       to title 5, part 1200, 
                       section 1.

                     ----------------------------

[[Page vii]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, January 1, 2007), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
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inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page viii]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of textual material 
appearing in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
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    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
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    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
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Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-free). E-
mail, [email protected].

[[Page ix]]

    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal-
register. The NARA site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

January 1, 2007.

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                               THIS TITLE

    Title 5--Administrative Personnel is composed of three volumes. The 
parts in these volumes are arranged in the following order: parts 1-699, 
700-1199 and part 1200-end. The contents of these volumes represent all 
current regulations codified under this title of the CFR as of January 
1, 2007.

    For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Ann Worley.


[[Page 1]]



                    TITLE 5--ADMINISTRATIVE PERSONNEL




                  (This book contains part 1200 to End)

  --------------------------------------------------------------------

  Editorial Note: Title 5 of the United States Code was revised and 
enacted into positive law by Pub. L. 89-554, Sept. 6, 1966. New 
citations for obsolete references to sections of 5 U.S.C. appearing in 
this volume may be found in a redesignation table under Title 5, 
Government Organization and Employees, United States Code.
                                                                    Part

chapter ii--Merit Systems Protection Board..................        1200

chapter iii--Office of Management and Budget................        1300

chapter v--The International Organizations Employees Loyalty 
  Board.....................................................        1501

chapter vi--Federal Retirement Thrift Investment Board......        1600

chapter viii--Office of Special Counsel.....................        1800

chapter ix--Appalachian Regional Commission.................        1900

chapter xi--Armed Forces Retirement Home....................        2100

chapter xiv--Federal Labor Relations Authority, General 
  Counsel of the Federal Labor Relations Authority and 
  Federal Service Impasses Panel............................        2411

 Appendix A to 5 CFR Chapter XIV--Current Addresses and Geographic 
  Jurisdictions.

 Appendix B to 5 CFR Chapter XIV--Memorandum Describing the Authority 
  and Assigned Responsibilities of the General Counsel of the Federal 
  Labor Relations Authority.

chapter xv--Office of Administration, Executive Office of 
  the President.............................................        2500

chapter xvi--Office of Government Ethics....................        2600

chapter xxi--Department of the Treasury.....................        3101

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chapter xxii--Federal Deposit Insurance Corporation.........        3201

chapter xxiii--Department of Energy.........................        3301

chapter xxiv--Federal Energy Regulatory Commission..........        3401

chapter xxv--Department of the Interior.....................        3501

chapter xxvi--Department of Defense.........................        3601

chapter xxvii--Department of Justice........................        3801

chapter xxix--Federal Communications Commission.............        3901

chapter xxx--Farm Credit System Insurance Corporation.......        4001

chapter xxxi--Farm Credit Administration....................        4101

chapter xxxiii--Overseas Private Investment Corporation.....        4301

chapter xxxv--Office of Personnel Management................        4501

chapter xl--Interstate Commerce Commission..................        5001

chapter xli--Commodity Futures Trading Commission...........        5101

chapter xlii--Department of Labor...........................        5201

chapter xliii--National Science Foundation..................        5301

chapter xlv--Department of Health and Human Services........        5501

chapter xlvi--Postal Rate Commission........................        5601

chapter xlvii--Federal Trade Commission.....................        5701

chapter xlviii--Nuclear Regulatory Commission...............        5801

chapter l--Department of Transportation.....................        6001

chapter lii--Export-Import Bank of the United States........        6201

chapter liii--Department of Education.......................        6301

chapter liv--Environmental Protection Agency................        6401

chapter lv--National Endowment for the Arts.................        6501

chapter lvi--National Endowment for the Humanities..........        6601

chapter lvii--General Services Administration...............        6701

chapter lviii--Board of Governors of the Federal Reserve 
  System....................................................        6801

chapter lix--National Aeronautics and Space Administration..        6901

chapter lx--United States Postal Service....................        7001

chapter lxi--National Labor Relations Board.................        7101

chapter lxii--Equal Employment Opportunity Commission.......        7201

chapter lxiii--Inter-American Foundation....................        7301

chapter lxv--Department of Housing and Urban Development....        7501

[[Page 3]]


chapter lxvi--National Archives and Records Administration..        7601

chapter lxvii--Institute of Museum and Library Services.....        7701

chapter lxix--Tennessee Valley Authority....................        7901

chapter lxxi--Consumer Product Safety Commission............        8101

chapter lxxiii--Supplemental Standards of Ethical Conduct 
  for Employees of the Department of Agriculture............        8301

chapter lxxiv--Federal Mine Safety and Health Review 
  Commission................................................        8401

chapter lxxvi--Federal Retirement Thrift Investment Board...        8601

chapter lxxvii--Office of Management and Budget.............        8701

chapter xcvii--Department of Homeland Security Human 
  Resources Management System (Department of Homeland 
  Security--Office of Personnel Management).................        9701

chapter xcix--Department of Defense Human Resources 
  Management and Labor Relations Systems (Department of 
  Defense--Office of Personnel Management)..................        9901

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               CHAPTER II--MERIT SYSTEMS PROTECTION BOARD




  --------------------------------------------------------------------

                SUBCHAPTER A--ORGANIZATION AND PROCEDURES
Part                                                                Page
1200            Board organization..........................           7
1201            Practices and procedures....................           9
1202            Statutory Review Board......................          57
1203            Procedures for review of rules and 
                    regulations of the Office of Personnel 
                    Management..............................          57
1204            Availability of official information........          61
1205            Privacy Act regulations.....................          67
1206            Open meetings...............................          71
1207            Enforcement of nondiscrimination on the 
                    basis of disability in programs or 
                    activities conducted by the Merit 
                    Systems Protection Board................          74
1208            Practices and procedures for appeals under 
                    the Uniformed Services Employment and 
                    Reemployment Rights Act and the Veterans 
                    Employment Opportunities Act............          80
1209            Practices and procedures for appeals and 
                    stay requests of personnel actions 
                    allegedly based on whistleblowing.......          85
1210            Debt management.............................          89
1211-1215       [Reserved]

1216            Testimony by MSPB employees relating to 
                    official information and production of 
                    official records in legal proceedings...          96

[[Page 7]]



                SUBCHAPTER A_ORGANIZATION AND PROCEDURES



PART 1200_BOARD ORGANIZATION--Table of Contents




                            Subpart A_General

Sec.
1200.1 Statement of purpose.
1200.2 Board members and duties.
1200.3 How the Board members make decisions.

                     Subpart B_Offices of the Board

1200.10 Staff organization and functions.

    Source: 56 FR 41747, Aug. 23, 1991, unless otherwise noted.



                            Subpart A_General

    Authority: 5 U.S.C. 1201 et seq.



Sec. 1200.1  Statement of purpose.

    The Merit Systems Protection Board (the Board) is an independent 
Government agency that operates like a court. The Board was created to 
ensure that all Federal government agencies follow Federal merit systems 
practices. The Board does this by adjudicating Federal employee appeals 
of agency personnel actions, and by conducting special reviews and 
studies of Federal merit systems.

[56 FR 41747, Aug. 23, 1991, as amended at 59 FR 65233, Dec. 19, 1994]



Sec. 1200.2  Board members and duties.

    (a) The Board has three members whom the President appoints and the 
Senate confirms. Members of the Board serve seven-year terms.
    (b) The President appoints, with the Senate's consent, one member of 
the Board to serve as Chairman and chief executive officer of the Board. 
The President also appoints one member of the Board to serve as Vice 
Chairman. If the office of the Chairman is vacant or the Chairman cannot 
perform his or her duties, then the Vice Chairman performs the 
Chairman's duties. If both the Chairman and the Vice Chairman cannot 
perform their duties, then the remaining Board Member performs the 
Chairman's duties.

[56 FR 41747, Aug. 23, 1991, as amended at 59 FR 65233, Dec. 19, 1994]



Sec. 1200.3  How the Board members make decisions.

    (a) The three Board members make decisions in all cases by majority 
vote except in circumstances described in paragraphs (b) and (c) of this 
section or as otherwise provided by law.
    (b) When due to a vacancy, recusal or other reasons, the Board 
members are unable to decide any case by majority vote, the decision, 
recommendation or order under review shall be deemed the final decision 
or order of the Board. The Chairman of the Board may direct the issuance 
of an order consistent with this paragraph.
    (c) When due to a vacancy, recusal or other reasons, the Board 
members are unable to decide a matter in a case which does not involve a 
decision, recommendation or order, the Chairman may direct referral of 
the matter to an administrative judge or other official for final 
disposition.
    (d) Decisions and orders issued pursuant to paragraphs (b) and (c) 
of this section shall not be precedential.
    (e) This section applies only when at least two Board members are in 
office.

[59 FR 39937, Aug. 5, 1994]



                     Subpart B_Offices of the Board

    Authority: 5 U.S.C. 1204 (h) and (j).



Sec. 1200.10  Staff organization and functions.

    (a) The Board's headquarters staff is organized into the following 
offices and divisions:
    (1) Office of Regional Operations.
    (2) Office of the Administrative Law Judge.
    (3) Office of Appeals Counsel.
    (4) Office of the Clerk of the Board.
    (5) Office of the General Counsel.
    (6) Office of Policy and Evaluation.
    (7) Office of Equal Employment Opportunity.

[[Page 8]]

    (8) Office of Financial and Administrative Management.
    (9) Office of Information Resources Management.
    (b) The principal functions of the Board's headquarters offices are 
as follows:
    (1) Office of Regional Operations. The Director, Office of Regional 
Operations, manages the adjudicatory and administrative functions of the 
MSPB regional and field offices.
    (2) Office of the Administrative Law Judge. The Administrative Law 
Judge hears Hatch Act cases, disciplinary action complaints brought by 
the Special Counsel, actions against administrative law judges, appeals 
of actions taken against MSPB employees, and other cases that the Board 
assigns.
    (3) Office of Appeals Counsel. The Director, Office of Appeals 
Counsel, prepares proposed decisions that recommend appropriate action 
by the Board in petition for review cases, original jurisdiction cases, 
and other cases assigned by the Board.
    (4) Office of the Clerk of the Board. The Clerk of the Board enters 
petitions for review and other headquarters cases onto the Board's 
docket and monitors their processing. The Clerk of the Board also does 
the following:
    (i) Serves as the Board's public information center, including 
providing information on the status of cases, distributing copies of 
Board decisions and publications, and operating the Board's Library and 
on-line information services;
    (ii) Manages the Board's records, reports, legal research, and 
correspondence control programs; and
    (iii) Answers requests under the Freedom of Information and Privacy 
Acts at the Board's headquarters, and answers other requests for 
information except those for which the Office of the General Counsel or 
the Office of Policy and Evaluation is responsible.
    (5) Office of the General Counsel. The General Counsel provides 
legal advice to the Board and its headquarters and regional offices; 
represents the Board in court proceedings; prepares proposed decisions 
for the Board in cases that the Board assigns; coordinates legislative 
policy and performs legislative liaison; responds to requests for non-
case related information from the White House, Congress, and the media; 
and plans and directs audits and investigations.
    (6) Office of Policy and Evaluation. The Director, Policy and 
Evaluation, carries out the Board's statutory responsibility to conduct 
special reviews and studies of the civil service and other merit systems 
in the Executive Branch, as well as oversight reviews of the significant 
actions of the Office of Personnel Management. The office prepares the 
Board's reports of these reviews and studies, submits them to the 
President and the Congress, and makes them available to other interested 
individuals and organizations. The office is responsible for 
distributing the Board's reports and for responding to requests for 
information or briefings concerning them.
    (7) Office of Equal Employment Opportunity. The Director, Office of 
Equal Employment Opportunity, manages the Board's equal employment 
programs.
    (8) Office of Financial and Administrative Management. The Office of 
Financial and Administrative Management administers the budget, 
accounting, procurement, property management, physical security, and 
general services functions of the Board. It also develops and 
coordinates internal management programs and projects, including review 
of internal controls agencywide. It performs certain personnel 
functions, including policy, training, drug testing, and the Employee 
Assistance Program. It also administers the agency's cross-servicing 
arrangements with the U.S. Department of Treasury's Bureau of Public 
Debt for accounting services and with the U.S. Department of 
Agriculture's National Finance Center for payroll and personnel action 
processing services and with the U.S. Department of Agriculture's APHIS 
Business Services for most human resources management services.
    (9) Office of Information Resources Management. The Office of 
Information Resources Management develops, implements, and maintains the 
Board's automated information systems.
    (c) Regional and Field Offices. The Board has regional and field 
offices located throughout the country (See Appendix II to 5 CFR part 
1201 for a list of

[[Page 9]]

the regional and field offices). Judges in the regional and field 
offices hear and decide initial appeals and other assigned cases as 
provided for in the Board's regulations.

[62 FR 49589, Sept. 23, 1997, as amended at 64 FR 15916, Apr. 2, 1999; 
70 FR 30608, May 27, 2005]



PART 1201_PRACTICES AND PROCEDURES--Table of Contents




                 Subpart A_Jurisdiction and Definitions

Sec.
1201.1 General.
1201.2 Original jurisdiction.
1201.3 Appellate jurisdiction.
1201.4 General definitions.

                Subpart B_Procedures for Appellate Cases

                                 General

1201.11 Scope and policy.
1201.12 Revocation, amendment, or waiver of rules.
1201.13 Appeals by Board employees.
1201.14 Electronic filing procedures.

                   Appeal of Agency Action; Pleadings

1201.21 Notice of appeal rights.
1201.22 Filing an appeal and responses to appeals.
1201.23 Computation of time.
1201.24 Content of an appeal; right to hearing.
1201.25 Content of agency response.
1201.26 Number of pleadings, service, and response.
1201.27 Class appeals.
1201.28 Case suspension procedures.

                 Parties, Representatives, and Witnesses

1201.31 Representatives.
1201.32 Witnesses; right to representation.
1201.33 Federal witnesses.
1201.34 Intervenors and amicus curiae.
1201.35 Substituting parties.
1201.36 Consolidating and joining appeals.
1201.37 Witness fees.

                                 Judges

1201.41 Judges.
1201.42 Disqualifying a judge.
1201.43 Sanctions.

                                Hearings

1201.51 Scheduling the hearing.
1201.52 Public hearings.
1201.53 Record of proceedings.
1201.55 Motions.
1201.56 Burden and degree of proof; affirmative defenses.
1201.57 Order of hearing.
1201.58 Closing the record.

                                Evidence

1201.61 Exclusion of evidence and testimony.
1201.62 Producing prior statements.
1201.63 Stipulations.
1201.64 Official notice.

                                Discovery

1201.71 Purpose of discovery.
1201.72 Explanation and scope of discovery.
1201.73 Discovery procedures.
1201.74 Orders for discovery.
1201.75 Taking depositions.

                                Subpoenas

1201.81 Requests for subpoenas.
1201.82 Motions to quash subpoenas.
1201.83 Serving subpoenas.
1201.84 Proof of service.
1201.85 Enforcing subpoenas.

                          Interlocutory Appeals

1201.91 Explanation.
1201.92 Criteria for certifying interlocutory appeals.
1201.93 Procedures.

                         Ex Parte Communications

1201.101 Explanation and definitions.
1201.102 Prohibition on ex parte communications.
1201.103 Placing communications in the record; sanctions.

                             Final Decisions

1201.111 Initial decision by judge.
1201.112 Jurisdiction of judge.
1201.113 Finality of decision.

           Subpart C_Petitions for Review of Initial Decisions

1201.114 Filing petition and cross petition for review.
1201.115 Contents of petition for review.
1201.116 Appellant requests for enforcement of interim relief.
1201.117 Procedures for review or reopening.
1201.118 Board reopening of case and reconsideration of initial 
          decision.
1201.119 OPM petition for reconsideration.
1201.120 Judicial review.

          Subpart D_Procedures for Original Jurisdiction Cases

                                 General

1201.121 Scope of jurisdiction; application of subparts B, F, and H.

[[Page 10]]

                  Special Counsel Disciplinary Actions

1201.122 Filing complaint; serving documents on parties.
1201.123 Contents of complaint.
1201.124 Rights; answer to complaint.
1201.125 Administrative law judge.
1201.126 Final decisions.
1201.127 Judicial review.

                   Special Counsel Corrective Actions

1201.128 Filing complaint; serving documents on parties.
1201.129 Contents of complaint.
1201.130 Rights; answer to complaint.
1201.131 Judge.
1201.132 Final decisions.
1201.133 Judicial review.

                   Special Counsel Requests for Stays

1201.134 Deciding official; filing stay request; serving documents on 
          parties.
1201.135 Contents of stay request.
1201.136 Action on stay request.

                Actions Against Administrative Law Judges

1201.137 Covered actions; filing complaint; serving documents on 
          parties.
1201.138 Contents of complaint.
1201.139 Rights; answer to complaint.
1201.140 Judge; requirement for finding of good cause.
1201.141 Judicial review.
1201.142 Actions filed by administrative law judges.

                Removal From the Senior Executive Service

1201.143 Right to hearing; filing complaint; serving documents on 
          parties.
1201.144 Hearing procedures; referring the record.
1201.145 No appeal.

                     Requests for Protective Orders

1201.146 Requests for protective orders by the Special Counsel.
1201.147 Requests for protective orders by persons other than the 
          Special Counsel.
1201.148 Enforcement of protective orders.

 Subpart E_Procedures for Cases Involving Allegations of Discrimination

1201.151 Scope and policy.
1201.152 Compliance with subpart B procedures.
1201.153 Contents of appeal.
1201.154 Time for filing appeal; closing record in cases involving 
          grievance decisions.
1201.155 Remand of allegations of discrimination.
1201.156 Time for processing appeals involving allegations of 
          discrimination.
1201.157 Notice of right to judicial review.

                        Review of Board Decision

1201.161 Action by the Equal Employment Opportunity Commission; judicial 
          review.
1201.162 Board action on the Commission decision; judicial review.

                              Special Panel

1201.171 Referral of case to Special Panel.
1201.172 Organization of Special Panel; designation of members.
1201.173 Practices and procedures of Special Panel.
1201.174 Enforcing the Special Panel decision.
1201.175 Judicial review of cases decided under 5 U.S.C. 7702.

           Subpart F_Enforcement of Final Decisions and Orders

1201.181 Authority and explanation.
1201.182 Petition for enforcement.
1201.183 Procedures for processing petitions for enforcement.

                      Subpart G_Savings Provisions

1201.191 Savings provisions.

Subpart H_Attorney Fees (Plus Costs, Expert Witness Fees, and Litigation 
  Expenses, Where Applicable), Consequential Damages, and Compensatory 
                                 Damages

1201.201 Statement of purpose.
1201.202 Authority for awards.
1201.203 Proceedings for attorney fees.
1201.204 Proceedings for consequential damages and compensatory damages.
1201.205 Judicial review.

Appendix I to Part 1201 [Reserved]
Appendix II to Part 1201--Appropriate Regional or Field Office for 
          Filing Appeals
Appendix III to Part 1201--Approved Hearing Locations by Regional Office
Appendix IV to Part 1201--Sample Declaration Under 28 U.S.C. 1746

    Authority: 5 U.S.C. 1204, 1305, and 7701, and 38 U.S.C. 4331, unless 
otherwise noted.

    Source: 54 FR 53504, Dec. 29, 1989, unless otherwise noted.



                 Subpart A_Jurisdiction and Definitions



Sec. 1201.1  General.

    The Board has two types of jurisdiction, original and appellate.

[[Page 11]]



Sec. 1201.2  Original jurisdiction.

    The Board's original jurisdiction includes the following cases:
    (a) Actions brought by the Special Counsel under 5 U.S.C. 1214, 
1215, and 1216;
    (b) Requests, by persons removed from the Senior Executive Service 
for performance deficiencies, for informal hearings; and
    (c) Actions taken against administrative law judges under 5 U.S.C. 
7521.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 66814, Dec. 22, 1997]



Sec. 1201.3  Appellate jurisdiction.

    (a) Generally. The Board has jurisdiction over appeals from agency 
actions when the appeals are authorized by law, rule, or regulation. 
These include appeals from the following actions:
    (1) Reduction in grade or removal for unacceptable performance (5 
CFR part 432; 5 U.S.C. 4303(e));
    (2) Removal, reduction in grade or pay, suspension for more than 14 
days, or furlough for 30 days or less for cause that will promote the 
efficiency of the service. (5 CFR part 752, subparts C and D; 5 U.S.C. 
7511-7514);
    (3) Removal, or suspension for more than 14 days, of a career 
appointee in the Senior Executive Service (5 CFR part 752, subparts E 
and F; 5 U.S.C. 7541-7543);
    (4) Reduction-in-force action affecting a career appointee in the 
Senior Executive Service (5 U.S.C. 3595);
    (5) Reconsideration decision sustaining a negative determination of 
competence for a general schedule employee (5 CFR 531.410; 5 U.S.C. 
5335(c));
    (6) Determinations affecting the rights or interests of an 
individual or of the United States under the Civil Service Retirement 
System or the Federal Employees' Retirement System (5 CFR parts 831, 
839, 842, 844, and 846; 5 U.S.C. 8347(d)(1)-(2) and 8461 (e)(1); and 5 
U.S.C. 8331 note, Federal Erroneous Retirement Coverage Corrections Act)
    (7) Disqualification of an employee or applicant because of a 
suitability determination (5 CFR 731.501);
    (8) Termination of employment during probation or the first year of 
a veterans readjustment appointment when:
    (i) The employee alleges discrimination because of partisan 
political reasons or marital status; or
    (ii) The termination was based on conditions arising before 
appointment and the employee alleges that the action is procedurally 
improper (5 CFR 315.806, 38 U.S.C. 4214(b)(1)(E));
    (9) Termination of appointment during a managerial or supervisory 
probationary period when the employee alleges discrimination because of 
partisan political affiliation or marital status (5 CFR 315.908(b));
    (10) Separation, demotion, or furlough for more than 30 days, when 
the action was effected because of a reduction in force (5 CFR 351.901);
    (11) Furlough of a career appointee in the Senior Executive Service 
(5 CFR 359.805);
    (12) Failure to restore, improper restoration of, or failure to 
return following a leave of absence an employee or former employee of an 
agency in the executive branch (including the U.S. Postal Service and 
the Postal Rate Commission) following partial or full recovery from a 
compensable injury (5 CFR 353.304);
    (13) Employment of another applicant when the person who wishes to 
appeal to the Board is entitled to priority employment consideration 
after a reduction-in-force action, or after partial or full recovery 
from a compensable injury (5 CFR 302.501, 5 CFR 330.209);
    (14) Failure to reinstate a former employee after service under the 
Foreign Assistance Act of 1961 (5 CFR 352.508);
    (15) Failure to re-employ a former employee after movement between 
executive agencies during an emergency (5 CFR 352.209);
    (16) Failure to re-employ a former employee after detail or transfer 
to an international organization (5 CFR 352.313);
    (17) Failure to re-employ a former employee after service under the 
Indian Self-Determination Act (5 CFR 352.707);
    (18) Failure to re-employ a former employee after service under the 
Taiwan Relations Act (5 CFR 352.807);
    (19) Employment practices administered by the Office of Personnel 
Management to examine and evaluate the

[[Page 12]]

qualifications of applicants for appointment in the competitive service 
(5 CFR 300.104); and
    (20) Reduction-in-force action affecting a career or career 
candidate appointee in the Foreign Service (Pub. L. 103-236, Sec. 
181(a)(2), to be codified at 22 U.S.C. 4010a).
    (b)(1) Appeals under the Uniformed Services Employment and 
Reemployment Rights Act and the Veterans Employment Opportunities Act. 
Appeals filed under the Uniformed Services Employment and Reemployment 
Rights Act (Public Law 103-353), as amended, and the Veterans Employment 
Opportunities Act (Public Law 105-339) are governed by part 1208 of this 
title. The provisions of subparts A, B, C, and F of part 1201 apply to 
appeals governed by part 1208 unless other specific provisions are made 
in that part. The provisions of subpart H of this part regarding awards 
of attorney fees apply to appeals governed by part 1208 of this title.
    (2) Appeals involving an allegation that the action was based on 
appellant's ``whistleblowing.'' Appeals of actions appealable to the 
Board under any law, rule, or regulation, in which the appellant alleges 
that the action was taken because of the appellant's ``whistleblowing'' 
[a violation of the prohibited personnel practice described in 5 U.S.C. 
2302(b)(8)), are governed by part 1209 of this title. The provisions of 
subparts B, C, E, F, and G of part 1201 apply to appeals and stay 
requests governed by part 1209 unless other specific provisions are made 
in that part. The provisions of subpart H of this part regarding awards 
of attorney fees and consequential damages under 5 U.S.C. 1221(g) apply 
to appeals governed by part 1209 of this chapter.
    (c) Limitations on appellate jurisdiction, collective bargaining 
agreements, and election of procedures:
    (1) For an employee covered by a collective bargaining agreement 
under 5 U.S.C. 7121, the negotiated grievance procedures contained in 
the agreement are the exclusive procedures for resolving any action that 
could otherwise be appealed to the Board, with the following exceptions:
    (i) An appealable action involving discrimination under 5 U.S.C. 
2302(b)(1), reduction in grade or removal under 5 U.S.C. 4303, or 
adverse action under 5 U.S.C. 7512, may be raised under the Board's 
appellate procedures, or under the negotiated grievance procedures, but 
not under both;
    (ii) An appealable action involving a prohibited personnel practice 
other than discrimination under 5 U.S.C. 2302(b)(1) may be raised under 
not more than one of the following procedures:
    (A) The Board's appellate procedures;
    (B) The negotiated grievance procedures; or
    (C) The procedures for seeking corrective action from the Special 
Counsel under subchapters II and III of chapter 12 of title 5 of the 
United States Code.
    (iii) Except for actions involving discrimination under 5 U.S.C. 
2302(b)(1) or any other prohibited personnel practice, any appealable 
action that is excluded from the application of the negotiated grievance 
procedures may be raised only under the Board's appellate procedures.
    (2) Choice of procedure. When an employee has an option of pursuing 
an action under the Board's appeal procedures or under negotiated 
grievance procedures, the Board considers the choice between those 
procedures to have been made when the employee timely files an appeal 
with the Board or timely files a written grievance, whichever event 
occurs first. When an employee has the choice of pursuing an appealable 
action involving a prohibited personnel practice other than 
discrimination under 5 U.S.C. 2302(b)(1) in accordance with paragraph 
(c)(1)(ii) of this section, the Board considers the choice among those 
procedures to have been made when the employee timely files an appeal 
with the Board, timely files a written grievance under the negotiated 
grievance procedure, or seeks corrective action from the Special Counsel 
by making an allegation under 5 U.S.C. 1214(a)(1), whichever event 
occurs first.
    (3) Review of discrimination grievances. If an employee chooses the 
negotiated grievance procedure under paragraph (c)(2) of this section 
and alleges discrimination as described at 5 U.S.C. 2302(b)(1), then the 
employee, after having obtained a final decision under the negotiated 
grievance procedure, may

[[Page 13]]

ask the Board to review that final decision. The request must be filed 
with the Clerk of the Board in accordance with Sec. 1201.154.

[54 FR 53504, Dec. 29, 1989, as amended at 56 FR 41748, Aug. 23, 1991; 
59 FR 65235, Dec. 19, 1994; 61 FR 1, Jan. 2, 1996; 62 FR 17044, 17045, 
Apr. 9, 1997; 62 FR 66814, Dec. 22, 1997; 65 FR 5409, Feb. 4, 2000; 66 
FR 30635, June 7, 2001; 70 FR 30608, May 27, 2005]



Sec. 1201.4  General definitions.

    (a) Judge. Any person authorized by the Board to hold a hearing or 
to decide a case without a hearing, including an attorney-examiner, an 
administrative judge, an administrative law judge, the Board, or any 
member of the Board.
    (b) Pleading. Written submission setting out claims, allegations, 
arguments, or evidence. Pleadings include briefs, motions, petitions, 
attachments, and responses.
    (c) Motion. A request that a judge take a particular action.
    (d) Appropriate regional or field office. The regional or field 
office of the Board that has jurisdiction over the area where the 
appellant's duty station was located when the agency took the action. 
Appeals of Office of Personnel Management reconsideration decisions 
concerning retirement benefits, and appeals of adverse suitability 
determinations under 5 CFR part 731, must be filed with the regional or 
field office that has jurisdiction over the area where the appellant 
lives. Appendix II of these regulations lists the geographic areas over 
which each of the Board's regional and field offices has jurisdiction. 
Appeals, however, may be transferred from one regional or field office 
to another.
    (e) Party. A person, an agency, or an intervenor, who is 
participating in a Board proceeding. This term applies to the Office of 
Personnel Management and to the Office of Special Counsel when those 
organizations are participating in a Board proceeding.
    (f) Appeal. A request for review of an agency action.
    (g) Petition for review. A request for review of an initial decision 
of a judge.
    (h) Day. Calendar day.
    (i) Service. The process of furnishing a copy of any pleading to 
Board officials, other parties, or both, by mail, by facsimile, by 
commercial or personal delivery, or by electronic filing (e-filing) in 
accordance with Sec. 1201.14.
    (j) Date of service. The date on which documents are served on other 
parties.
    (k) Certificate of service. A document certifying that a party has 
served copies of pleadings on the other parties or, in the case of paper 
documents associated with electronic filings under paragraph (g) of 
Sec. 1201.14, on the Board.
    (l) Date of filing. A document that is filed with a Board office by 
personal delivery is considered filed on the date on which the Board 
office receives it. The date of filing by facsimile is the date of the 
facsimile. The date of filing by mail is determined by the postmark 
date; if no legible postmark date appears on the mailing, the submission 
is presumed to have been mailed five days (excluding days on which the 
Board is closed for business) before its receipt. The date of filing by 
commercial delivery is the date the document was delivered to the 
commercial delivery service. The date of filing by e-filing is the date 
of electronic submission.
    (m) Electronic filing (e-filing). Filing and receiving documents in 
electronic form in proceedings within the Board's appellate or original 
jurisdiction in accordance with Sec. 1201.14.
    (n) E-filer. A party or representative who has registered to engage 
in e-filing under paragraph (e) of Sec. 1201.14.

[54 FR 53504, Dec. 29, 1989, as amended at 58 FR 36345, July 7, 1993; 59 
FR 65235, Dec. 19, 1994; 68 FR 59860, Oct. 20, 2003; 69 FR 57628, Sept. 
27, 2004]



                Subpart B_Procedures for Appellate Cases

                                 General



Sec. 1201.11  Scope and policy.

    The regulations in this subpart apply to Board appellate proceedings 
except as otherwise provided in Sec. 1201.13. The regulations in this 
subpart apply also to appellate proceedings and stay requests covered by 
part 1209 unless other specific provisions are made in that part. These 
regulations also apply to original jurisdiction proceedings of the Board 
except as otherwise provided in subpart D. It is the Board's policy

[[Page 14]]

that these rules will be applied in a manner that expedites the 
processing of each case, with due regard to the rights of all parties.



Sec. 1201.12  Revocation, amendment, or waiver of rules.

    The Board may revoke, amend, or waive any of these regulations. A 
judge may, for good cause shown, waive a Board regulation unless a 
statute requires application of the regulation. The judge must give 
notice of the waiver to all parties, but is not required to give the 
parties an opportunity to respond.



Sec. 1201.13  Appeals by Board employees.

    Appeals by Board employees will be filed with the Clerk of the Board 
and will be assigned to an administrative law judge for adjudication 
under this subchapter. The Board's policy is to insulate the 
adjudication of its own employees' appeals from agency involvement as 
much as possible. Accordingly, the Board will not disturb initial 
decisions in those cases unless the party shows that there has been 
harmful procedural irregularity in the proceedings before the 
administrative law judge or a clear error of law. In addition, the 
Board, as a matter of policy, will not rule on any interlocutory appeals 
or motions to disqualify the administrative law judge assigned to those 
cases until the initial decision has been issued.



Sec. 1201.14  Electronic filing procedures.

    (a) General. This section prescribes the rules and procedures by 
which parties and representatives to proceedings within the Board's 
appellate and original jurisdiction may file and receive documents in 
electronic form.
    (b) Matters subject to electronic filing. Subject to the 
registration requirement of paragraph (e) of this section, parties and 
representatives may use electronic filing (e-filing) to do any of the 
following:
    (1) File any pleading, including a new appeal, in any matter within 
the Board's appellate jurisdiction (Sec. 1201.3);
    (2) File any pleading, other than the original complaint or request, 
in any matter within the Board's original jurisdiction (Sec. 1201.2);
    (3) File a petition for enforcement of a final Board decision (Sec. 
1201.182);
    (4) File a motion for attorney fees as a prevailing party (Sec. 
1201.203);
    (5) File a motion for compensatory or consequential damages (Sec. 
1201.204);
    (6) Designate a representative, revoke such a designation, or change 
such a designation (Sec. 1201.31); or
    (7) Notify the Board of a change in contact information such as 
address (geographic or electronic mail) or telephone number.
    (c) Matters excluded from electronic filing. Electronic filing may 
not be used to:
    (1) File the original complaint or request in a matter within the 
Board's original jurisdiction, which includes: a complaint filed by the 
Special Counsel seeking corrective or disciplinary action (Sec. Sec. 
1201.122, 1201.128); a request by the Special Counsel for the stay of 
certain personnel actions (Sec. 1201.134); a proposal to take action 
against an administrative law judge under 5 U.S.C. 7521 (Sec. 
1201.137); or a request for a hearing on a proposed removal of a career 
appointee from the Senior Executive Service for performance reasons 
(Sec. 1201.143);
    (2) File a request to hear a case as a class appeal or any 
opposition thereto (Sec. 1201.27);
    (3) Serve a subpoena (Sec. 1201.83); or
    (4) File a pleading with the Special Panel (Sec. 1201.137).
    (d) Internet is sole venue for electronic filing. Following the 
instructions at the Board's e-Appeal site (https://e-appeal.mspb.gov) is 
the only method allowed for filing electronic pleadings with the Board. 
The Board will not accept pleadings filed by electronic mail.
    (e) Registration as an e-filer. (1) Except when filing a new appeal 
within the Board's appellate jurisdiction (Sec. 1201.3), no party or 
representative may file an electronic pleading with the Board unless he 
or she has registered with the Board as an e-filer. Registration as an 
e-filer constitutes consent to accept electronic service of pleadings 
filed by other registered e-filers and documents issued by the Board.
    (2) The exclusive means for a party or representative to register as 
an e-filer during a Board proceeding is to follow

[[Page 15]]

the instructions at the Board's e-Appeal site (https://e-
appeal.mspb.gov).
    (3) When a party who is an individual is represented, the party and 
the representative can make separate determinations whether to register 
as an e-filer. For example, an appellant may file and receive pleadings 
and Board documents by non-electronic means, even though his or her 
representative has registered as an e-filer. Similarly, when a party has 
more than one representative, each representative has the choice of 
registering as an e-filer or filing and receiving pleadings and Board 
documents by non-electronic means.
    (4) A party or representative who has registered as an e-filer may 
file any pleading, or portion of a pleading as described in paragraph 
(g) of this section, by non-electronic means.
    (5) A party or representative may withdraw his or her registration 
as an e-filer. Such withdrawal means that, effective upon the Board's 
receipt of this withdrawal, pleadings and Board documents will no longer 
be served on that person in electronic form. A withdrawal of 
registration as an e-filer may be filed at the Board's e-Appeal site, in 
which case service is governed by paragraph (h) of this section, or by 
non-electronic means, in which case service is governed by section 
1201.26(b) of this part.
    (f) Form of electronic pleadings--(1) Options for e-filing. An 
appellant or representative using e-Appeal to file a new appeal within 
the Board's appellate jurisdiction (Sec. 1201.3) must complete the 
structured interview at the Board's e-Appeal site (https://e-
appeal.mspb.gov). For all other pleadings, the e-filer has the option of 
uploading an electronic file or entering the text of the pleading 
online. Regardless of the means of filing a particular pleading, the e-
filer will be allowed to submit supporting documentation as attachments, 
in both electronic and paper form, as described in paragraphs (f)(2) and 
(f)(3) of this section.
    (2) Electronic formats allowed. The Board will accept numerous 
electronic formats, including word-processing and spreadsheet formats, 
Portable Document Format (PDF), and image files (files created by 
scanning). A list of formats allowed can be found at the Board's e-
Appeal site. All electronic documents must be formatted so that they 
will print on standard 8\1/2\ inch by 11 inch paper.
    (3) Limitation on number of electronic attachments. E-filers may 
upload up to three electronic files as supporting documentation, in 
addition to the document that constitutes the primary pleading. There is 
no limit on the number of non-electronic documents that may be submitted 
as attachments under paragraph (g) of this section.
    (g) Hybrid pleadings that include both electronic and paper 
documents. An e-filer may file a hybrid pleading in which part of the 
pleading is submitted electronically, and part of the pleading consists 
of one or more paper documents filed by non-electronic means. If one or 
more parts of a hybrid pleading are untimely filed, the judge or the 
Clerk may reject the untimely part or parts while accepting timely filed 
parts of the same pleading.
    (h) Service of electronic pleadings. The Board will serve electronic 
pleadings on other parties and representatives who have registered as e-
filers. The Board's e-Appeal application will notify the e-filer of all 
documents that must be served by non-electronic means. The e-filer must 
certify that he or she will serve all such documents no later than the 
first business day after the electronic submission.
    (i) Documents requiring a signature. An electronic document filed by 
a party who has registered as an e-filer pursuant to this section shall 
be deemed to be signed for purposes of any regulation in part 1201, 
1203, 1208, or 1209 of this title that requires a signature.
    (j) Affidavits and declarations made under penalty of perjury. 
Registered e-filers may submit electronic pleadings in the form of 
declarations made under penalty of perjury under 28 U.S.C. 1746, as 
described in Appendix IV of this part. If the declarant is someone other 
than the e-filer, a physically signed affidavit or declaration should be 
uploaded as an image file, or submitted separately as a non-electronic 
document under paragraph (g) of this section.
    (k) Issuance of Board documents to e-filers. The Board's notices, 
orders, and

[[Page 16]]

decisions will be served on e-filers as PDF files attached to electronic 
mail messages, which will be sent to the electronic mail address 
supplied by the e-filer.
    (l) Date electronic documents are received. Pleadings and Board 
documents served electronically on registered e-filers are deemed 
received on the date of electronic submission or, if submitted on a 
weekend or federal holiday, on the first business day after the 
electronic submission.
    (m) Authority of a judge or the Clerk to regulate e-filing. (1) In 
the event that the Board or any party encounters repeated or unexplained 
difficulties filing, serving, or receiving electronic documents, the 
judge or the Clerk of the Board may order one or more parties to cease 
filing pleadings by e-filing, cease serving documents in electronic 
form, or take both these actions. In such instances, filing and service 
shall be undertaken in accordance with Sec. 1201.26. The authority to 
order the cessation of the use of electronic filing may be for a 
particular submission, for a particular time frame, or for the duration 
of the pendency of a case.
    (2) A judge or the Clerk of the Board may require that any document 
filed electronically be submitted in non-electronic form and bear the 
written signature of the submitter. A party receiving such an order from 
a judge or the Clerk of the Board shall, within 5 calendar days, serve 
on the judge or Clerk of the Board by regular mail, by facsimile, or by 
commercial or personal delivery a signed, non-electronic copy of the 
document.

[69 FR 57628, Sept. 27, 2004]

                   Appeal of Agency Action; Pleadings



Sec. 1201.21  Notice of appeal rights.

    When an agency issues a decision notice to an employee on a matter 
that is appealable to the Board, the agency must provide the employee 
with the following:
    (a) Notice of the time limits for appealing to the Board, the 
requirements of Sec. 1201.22(c), and the address of the appropriate 
Board office for filing the appeal;
    (b) A copy, or access to a copy, of the Board's regulations;
    (c) A copy of the appeal form in appendix I of this part; and
    (d) Notice of any right the employee has to file a grievance, 
including:
    (1) Whether the election of any applicable grievance procedure will 
result in waiver of the employee's right to file an appeal with the 
Board;
    (2) Whether both an appeal to the Board and a grievance may be filed 
on the same matter and, if so, the circumstances under which proceeding 
with one will preclude proceeding with the other, and specific notice 
that filing a grievance will not extend the time limit for filing an 
appeal with the Board; and
    (3) Whether there is any right to request Board review of a final 
decision on a grievance in accordance with Sec. 1201.154(d).

[54 FR 53504, Dec. 29, 1989, as amended at 65 FR 25624, May 3, 2000]



Sec. 1201.22  Filing an appeal and responses to appeals.

    (a) Place of filing. Appeals, and responses to those appeals, must 
be filed with the appropriate Board regional or field office. See Sec. 
1201.4(d) of this part.
    (b) Time of filing. (1) Except as provided in paragraph (b)(2) of 
this section, an appeal must be filed no later than 30 days after the 
effective date, if any, of the action being appealed, or 30 days after 
the date of receipt of the agency's decision, whichever is later. Where 
an appellant and an agency mutually agree in writing to attempt to 
resolve their dispute through an alternative dispute resolution process 
prior to the timely filing of an appeal, however, the time limit for 
filing the appeal is extended by an additional 30 days--for a total of 
60 days. A response to an appeal must be filed within 20 days of the 
date of the Board's acknowledgment order. The time for filing a 
submission under this section is computed in accordance with Sec. 
1201.23 of this part.
    (2) The time limit prescribed by paragraph (b)(1) for filing an 
appeal does not apply where a law or regulation establishes a different 
time limit or where there is no applicable time limit. No time limit 
applies to appeals under the Uniformed Services Employment and 
Reemployment Rights Act (Public

[[Page 17]]

Law 103-353), as amended; see part 1208 of this title. See part 1208 of 
this title for the statutory filing time limits applicable to appeals 
under the Veterans Employment Opportunities Act (Public Law 105-339). 
See part 1209 of this title for the statutory filing time limits 
applicable to whistleblower appeals and stay requests.
    (c) Timeliness of appeals. If a party does not submit an appeal 
within the time set by statute, regulation, or order of a judge, it will 
be dismissed as untimely filed unless a good reason for the delay is 
shown. The judge will provide the party an opportunity to show why the 
appeal should not be dismissed as untimely.
    (d) Method of filing an appeal. Filing of an appeal must be made 
with the appropriate Board office by commercial or personal delivery, by 
facsimile, by mail, or by electronic filing under Sec. 1201.14.
    (e) Filing a response. Filing of a response must be made with the 
appropriate Board office by commercial or personal delivery, by 
facsimile, by mail, or by electronic filing under Sec. 1201.14.

[54 FR 53504, Dec. 29, 1989, as amended at 58 FR 36345, July 7, 1993; 59 
FR 31109, June 17, 1994; 59 FR 65235, Dec. 19, 1994; 62 FR 59992, Nov. 
6, 1997; 62 FR 66814, Dec. 22, 1997; 64 FR 27899, May 24, 1999; 64 FR 
54508, Oct. 7, 1999; 65 FR 5409, Feb. 4, 2000; 68 FR 59862, Oct. 20, 
2003; 69 FR 57629, Sept. 27, 2004]



Sec. 1201.23  Computation of time.

    In computing the number of days allowed for filing a submission, the 
first day counted is the day after the event from which the time period 
begins to run. If the date that ordinarily would be the last day for 
filing falls on a Saturday, Sunday, or Federal holiday, the filing 
period will include the first workday after that date.

    Example: If an employee receives a decision notice that is effective 
on July 1, the 30-day period for filing an appeal starts to run on July 
2. The filing ordinarily would be timely only if it is made by July 31. 
If July 31 is a Saturday, however, the last day for filing would be 
Monday, August 2.

[54 FR 53504, Dec. 29, 1989, as amended at 59 FR 31109, June 17, 1994]



Sec. 1201.24  Content of an appeal; right to hearing.

    (a) Content. Only an appellant, his or her designated 
representative, or a party properly substituted under Sec. 1201.35 may 
file an appeal. Appeals may be in any format, including letter form. An 
appeal may be filed in electronic form provided that the requirements of 
Sec. 1201.14 have been satisfied. All appeals must contain the 
following:
    (1) The name, address, and telephone number of the appellant, and 
the name and address of the agency that took the action;
    (2) A description of the action the agency took and its effective 
date;
    (3) A request for hearing if the appellant wants one;
    (4) A statement of the reasons why the appellant believes the agency 
action is wrong;
    (5) A statement of the action the appellant would like the judge to 
order;
    (6) The name, address, and telephone number of the appellant's 
representative, if the appellant has a representative;
    (7) The notice of the decision to take the action being appealed, 
along with any relevant documents;
    (8) A statement telling whether the appellant or anyone acting on 
his or her behalf has filed a grievance or a formal discrimination 
complaint with any agency regarding this matter; and
    (9) The signature of the appellant or, if the appellant has a 
representative, of the representative. If the appeal is electronically 
filed, compliance with Sec. 1201.14 and the directions at the Board's 
e-Appeal site (https://e-appeal.mspb.gov) satisfy the signature 
requirement.
    (b) An appellant may raise a claim or defense not included in the 
appeal at any time before the end of the conference(s) held to define 
the issues in the case. An appellant may not raise a new claim or 
defense after that time, except for good cause shown. However, a claim 
or defense not included in the appeal may be excluded if a party shows 
that including it would result in undue prejudice.
    (c) Use of Board form or electronic filing. An appellant may comply 
with paragraph (a) of this section, and with Sec. 1201.31, by 
completing MSPB Form

[[Page 18]]

185, or by completing all requests for information marked as required at 
the e-Appeal site (https://e-appeal.mspb.gov). MSPB Form 185 can be 
accessed at the Board's Web site (http://www.mspb.gov).
    (d) Right to hearing. Under 5 U.S.C. 7701, an appellant has a right 
to a hearing.
    (e) Timely request. The appellant must submit any request for a 
hearing with the appeal, or within any other time period the judge sets 
for that purpose. If the appellant does not make a timely request for a 
hearing, the right to a hearing is waived.

[54 FR 53504, Dec. 29, 1989, as amended at 68 FR 59862, Oct. 20, 2003; 
69 FR 57629, Sept. 27, 2004]



Sec. 1201.25  Content of agency response.

    The agency response to an appeal must contain the following:
    (a) The name of the appellant and of the agency whose action the 
appellant is appealing;
    (b) A statement identifying the agency action taken against the 
appellant and stating the reasons for taking the action;
    (c) All documents contained in the agency record of the action;
    (d) Designation of and signature by the authorized agency 
representative; and
    (e) Any other documents or responses requested by the Board.



Sec. 1201.26  Number of pleadings, service, and response.

    (a) Number. The appellant must file two copies of both the appeal 
and all attachments with the appropriate Board office, unless the 
appellant files an appeal in electronic form under Sec. 1201.14.
    (b) Service--(1) Service by the Board. The appropriate office of the 
Board will mail a copy of the appeal to each party to the proceeding 
other than the appellant. It will attach to each copy a service list, 
consisting of a list of the names and addresses of the parties to the 
proceeding or their designated representatives.
    (2) Service by the parties. The parties must serve on each other one 
copy of each pleading, as defined by Sec. 1201.4(b), and all documents 
submitted with it, except for the appeal. They may do so by mail, by 
facsimile, by commercial or personal delivery, or by electronic filing 
in accordance with Sec. 1201.14. Documents and pleadings must be served 
upon each party and each representative. A certificate of service 
stating how and when service was made must accompany each pleading. The 
parties must notify the appropriate Board office and one another, in 
writing, of any changes in the names, or addresses on the service list.
    (c) Paper size. Pleadings and attachments must be filed on 8\1/2\ by 
11-inch paper, except for good cause shown. This requirement enables the 
Board to comply with standards established for U.S. courts. All 
electronic documents must be formatted so that they will print on 8\1/2\ 
by 11-inch paper.

[54 FR 53504, Dec. 29, 1989; 55 FR 548, Jan. 5, 1990, as amended at 58 
FR 36345, July 7, 1993; 68 FR 59862, Oct. 20, 2003; 69 FR 57629, Sept. 
27, 2004]



Sec. 1201.27  Class appeals.

    (a) Appeal. One or more employees may file an appeal as 
representatives of a class of employees. The judge will hear the case as 
a class appeal if he or she finds that a class appeal is the fairest and 
most efficient way to adjudicate the appeal and that the representative 
of the parties will adequately protect the interests of all parties. 
When a class appeal is filed, the time from the filing date until the 
judge issues his or her decision under paragraph (b) of this section is 
not counted in computing the time limit for individual members of the 
potential class to file individual appeals.
    (b) Procedure. The judge will consider the appellant's request and 
any opposition to that request, and will issue an order within 30 days 
after the appeal is filed stating whether the appeal is to be heard as a 
class appeal. If the judge denies the request, the appellants affected 
by the decision may file individual appeals within 30 days after the 
date of receipt of the decision denying the request to be heard as a 
class appeal. Each individual appellant is responsible for either filing 
an individual appeal within the original time limit, or keeping informed 
of the status of a class appeal and, if the class appeal is

[[Page 19]]

denied, filing an individual appeal within the additional 35-day period.
    (c) Standards. In determining whether it is appropriate to treat an 
appeal as a class action, the judge will be guided but not controlled by 
the applicable provisions of the Federal Rules of Civil Procedure.
    (d) Electronic filing. A request to hear a case as a class appeal 
and any opposition thereto may not be filed in electronic form. 
Subsequent pleadings may be filed and served in electronic form, 
provided that the requirements of Sec. 1201.14 are satisfied.

[54 FR 53504, Dec. 29, 1989, as amended at 59 FR 31109, June 17, 1994; 
62 FR 59992, Nov. 6, 1997; 68 FR 59862, Oct. 20, 2003; 69 FR 57630, 
Sept. 27, 2004]



Sec. 1201.28  Case suspension procedures.

    (a) Joint requests. The parties may submit a joint request for 
additional time to pursue discovery or settlement. Upon receipt of such 
request, an order suspending processing of the case for a period up to 
30 days may be issued at the discretion of the judge.
    (b) Unilateral requests. In lieu of participating in a joint 
request, either party may submit a unilateral request for additional 
time to pursue discovery as provided in this subpart. Unilateral 
requests for additional time of up to 30 days may be granted for good 
cause shown at the discretion of the judge.
    (c) Time for filing requests. The parties must file a joint request 
that the adjudication of the appeal be suspended within 45 days of the 
date of the acknowledgment order (or within 7 days of the appellant's 
receipt of the agency file, whichever date is later).
    (d) Untimely requests. The judge may consider requests for 
suspensions that are filed after the time limit set forth in paragraph 
(c) of this section. Such requests may be granted at the discretion of 
the judge.
    (e) Early termination of suspension period. The suspension period 
may be terminated prior to the end of the agreed upon period if the 
parties request the judge's assistance relative to discovery or 
settlement during the suspension period and the judge's involvement 
pursuant to that request is likely to be extensive.
    (f) Limitation on suspension period. No case may be suspended for 
more than a total of 30 days under the provisions of this section.

[68 FR 54651, Sept. 18, 2003]

                 Parties, Representatives, and Witnesses



Sec. 1201.31  Representatives.

    (a) Procedure. A party to an appeal may be represented in any matter 
related to the appeal. Parties may designate a representative, revoke 
such a designation, and change such a designation in a signed 
submission, submitted as a pleading.
    (b) A party may choose any representative as long as that person is 
willing and available to serve. The other party or parties may challenge 
the designation, however, on the ground that it involves a conflict of 
interest or a conflict of position. Any party who challenges the 
designation must do so by filing a motion with the judge within 15 days 
after the date of service of the notice of designation. The judge will 
rule on the motion before considering the merits of the appeal. These 
procedures apply equally to each designation of representative, 
regardless of whether the representative was the first one designated by 
a party or a subsequently designated representative. If a representative 
is disqualified, the judge will give the party whose representative was 
disqualified a reasonable time to obtain another one.
    (c) The judge, on his or her own motion, may disqualify a party's 
representative on the grounds described in paragraph (b) of this 
section.
    (d)(1) A judge may exclude a party, a representative, or other 
person from all or any portion of the proceeding before him or her for 
contumacious misconduct or conduct that is prejudicial to the 
administration of justice.
    (2) When a judge determines that a person should be excluded from 
participation in a proceeding, the judge shall inform the person of this 
determination through issuance of an order to show cause why he or she 
should not be excluded. The show cause order shall be delivered to the 
person by the most expeditious means of delivery available, including 
issuance of an oral order on

[[Page 20]]

the record where the determination to exclude the person is made during 
a hearing. The person must respond to the judge's show cause order 
within three days (excluding Saturdays, Sundays, and Federal holidays) 
of receipt of the order, unless the judge provides a different time 
limit, or forfeit the right to seek certification of a subsequent 
exclusion order as an interlocutory appeal to the Board under paragraph 
(d)(3) of this section.
    (3) When, after consideration of the person's response to the show 
cause order, or in the absence of a response to the show cause order, 
the judge determines that the person should be excluded from 
participation in the proceeding, the judge shall issue an order that 
documents the reasons for the exclusion. The person may obtain review of 
the judge's ruling by filing, within three days (excluding Saturdays, 
Sundays, and Federal holidays) of receipt of the ruling, a motion that 
the ruling be certified to the Board as an interlocutory appeal. The 
judge shall certify an interlocutory appeal to the Board within one day 
(excluding Saturdays, Sundays, and Federal holidays) of receipt of such 
a motion. Only the provisions of this paragraph apply to interlocutory 
appeals of rulings excluding a person from a proceeding; the provisions 
of Sec. Sec. 1201.91 through 1201.93 of this part shall not apply.
    (4) A proceeding will not be delayed because the judge excludes a 
person from the proceeding, except that:
    (i) Where the judge excludes a party's representative, the judge 
will give the party a reasonable time to obtain another representative; 
and
    (ii) Where the judge certifies an interlocutory appeal of an 
exclusion ruling to the Board, the judge or the Board may stay the 
proceeding sua sponte or on the motion of a party for a stay of the 
proceeding.
    (5) The Board, when considering a petition for review of a judge's 
initial decision under subpart C of this part, will not be bound by any 
decision of the judge to exclude a person from the proceeding below.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 62689, Nov. 25, 1997; 
62 FR 66815, Dec. 22, 1997; 63 FR 35500, June 30, 1998; 65 FR 5409, Feb. 
4, 2000; 68 FR 59862, Oct. 20, 2003; 69 FR 57630, Sept. 27, 2004]



Sec. 1201.32  Witnesses; right to representation.

    Witnesses have the right to be represented when testifying. The 
representative of a nonparty witness has no right to examine the witness 
at the hearing or otherwise participate in the development of testimony.



Sec. 1201.33  Federal witnesses.

    (a) Every Federal agency or corporation must make its employees or 
personnel available to furnish sworn statements or to appear as 
witnesses at the hearing when ordered by the judge to do so. When 
providing those statements or appearing at the hearing, Federal employee 
witnesses will be in official duty status (i.e., entitled to pay and 
benefits including travel and per diem, where appropriate).
    (b) A Federal employee who is denied the official time required by 
paragraph (a) of this section may file a written request that the judge 
order the employing agency to provide such official time. The judge will 
act on such a request promptly and, where warranted, will order the 
agency to comply with the requirements of paragraph (a) of this section.
    (c) An order obtained under paragraph (b) of this section may be 
enforced as provided under subpart F of this part.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 48935, Sept. 18, 1997]



Sec. 1201.34  Intervenors and amicus curiae.

    (a) Explanation of Intervention. Intervenors are organizations or 
persons who want to participate in a proceeding because they believe the 
proceeding, or its outcome, may affect their rights or duties. 
Intervenors as a ``matter of right'' are those parties who have a 
statutory right to participate. ``Permissive'' intervenors are those 
parties who may be permitted to participate if the proceeding will 
affect

[[Page 21]]

them directly and if intervention is otherwise appropriate under law. A 
request to intervene may be made by motion filed with the judge.
    (b) Intervenors as a matter of right. (1) The Director of the Office 
of Personnel Management may intervene as a matter of right under 5 
U.S.C. 7701(d)(1). The motion to intervene must be filed at the earliest 
practicable time.
    (2)(i) Except as provided in paragraph (b)(2)(ii) of this section, 
the Special Counsel may intervene as a matter of right under 5 U.S.C. 
1212(c). The motion to intervene must be filed at the earliest 
practicable time.
    (ii) The Special Counsel may not intervene in an action brought by 
an individual under 5 U.S.C. 1221, or in an appeal brought by an 
individual under 5 U.S.C. 7701, without the consent of that individual. 
The Special Counsel must present evidence that the individual has 
consented to the intervention at the time the motion to intervene is 
filed.
    (c) Permissive intervenors. (1) Any person, organization or agency 
may, by motion, ask the judge for permission to intervene. The motion 
must explain the reason why the person, organization or agency should be 
permitted to intervene.
    (2) A motion for permission to intervene will be granted where the 
requester will be affected directly by the outcome of the proceeding. 
Any person alleged to have committed a prohibited personnel practice 
under 5 U.S.C. 2302(b) may request permission to intervene. A judge's 
denial of a motion for permissive intervention may be appealed to the 
Board under Sec. 1201.91 of this part.
    (d) Role of intervenors. Intervenors have the same rights and duties 
as parties, with the following two exceptions:
    (1) Intervenors do not have an independent right to a hearing; and
    (2) Permissive intervenors may participate only on the issues 
affecting them. The judge is responsible for determining the issues on 
which permissive intervenors may participate.
    (e) Amicus curiae. An amicus curiae is a person or organization 
that, although not a party to an appeal, gives advice or suggestions by 
filing a brief with the judge regarding an appeal. Any person or 
organization, including those who do not qualify as intervenors, may, in 
the discretion of the judge, be granted permission to file an amicus 
curiae brief.



Sec. 1201.35  Substituting parties.

    (a) If an appellant dies or is otherwise unable to pursue the 
appeal, the processing of the appeal will only be completed upon 
substitution of a proper party. Substitution will not be permitted where 
the interests of the appellant have terminated because of the 
appellant's death or other disability.
    (b) The representative or proper party must file a motion for 
substitution within 90 days after the death or other disabling event, 
except for good cause shown.
    (c) In the absence of a timely substitution of a party, the 
processing of the appeal may continue if the interests of the proper 
party will not be prejudiced.



Sec. 1201.36  Consolidating and joining appeals.

    (a) Explanation. (1) Consolidation occurs when the appeals of two or 
more parties are united for consideration because they contain identical 
or similar issues. For example, individual appeals rising from a single 
reduction in force might be consolidated.
    (2) Joinder occurs when one person has filed two or more appeals and 
they are united for consideration. For example, a judge might join an 
appeal challenging a 30-day suspension with a pending appeal challenging 
a subsequent dismissal if the same appellant filed both appeals.
    (b) Action by judge. A judge may consolidate or join cases on his or 
her own motion or on the motion of a party if doing so would:
    (1) Expedite processing of the cases; and
    (2) Not adversely affect the interests of the parties.
    (c) Any objection to a motion for consolidation or joinder must be 
filed within 10 days of the date of service of the motion.



Sec. 1201.37  Witness fees.

    (a) Federal employees. Employees of a Federal agency or corporation 
testifying in any Board proceeding or making a statement for the record 
will be

[[Page 22]]

in official duty status and will not receive witness fees.
    (b) Other witnesses. Other witnesses (whether appearing voluntarily 
or under subpoena) shall be paid the same fee and mileage allowances 
which are paid subpoenaed witnesses in the courts of the United States.
    (c) Payment of witness fees and travel costs. The party requesting 
the presence of a witness must pay that witness' fees. Those fees must 
be paid or offered to the witness at the time the subpoena is served, 
or, if the witness appears voluntarily, at the time of appearance. A 
Federal agency or corporation is not required to pay or offer witness 
fees in advance.

[54 FR 53504, Dec. 29, 1989, as amended at 59 FR 31109, June 17, 1994; 
59 FR 65235, Dec. 19, 1994; 62 FR 17045, Apr. 9, 1997]

                                 Judges



Sec. 1201.41  Judges.

    (a) Exercise of authority. Judges may exercise authority as provided 
in paragraphs (b) and (c) of this section on their own motion or on the 
motion of a party, as appropriate.
    (b) Authority. Judges will conduct fair and impartial hearings and 
will take all necessary action to avoid delay in all proceedings. They 
will have all powers necessary to that end unless those powers are 
otherwise limited by law. Judges' powers include, but are not limited 
to, the authority to:
    (1) Administer oaths and affirmations;
    (2) Issue subpoenas under Sec. 1201.81 of this part;
    (3) Rule on offers of proof and receive relevant evidence;
    (4) Rule on discovery motions under Sec. 1201.73 of this part;
    (5) After notice to the parties, order a hearing on his or her own 
initiative if the judge determines that a hearing is necessary:
    (i) To resolve an important issue of credibility;
    (ii) To ensure that the record on significant issues is fully 
developed; or
    (iii) To otherwise ensure a fair and just adjudication of the case;
    (6) Convene a hearing as appropriate, regulate the course of the 
hearing, maintain decorum, and exclude any disruptive persons from the 
hearing;
    (7) Exclude any person from all or any part of the proceeding before 
him or her as provided under Sec. 1201.31(d) of this part;
    (8) Rule on all motions, witness and exhibit lists, and proposed 
findings;
    (9) Require the parties to file memoranda of law and to present oral 
argument with respect to any question of law;
    (10) Order the production of evidence and the appearance of 
witnesses whose testimony would be relevant, material, and 
nonrepetitious;
    (11) Impose sanctions as provided under Sec. 1201.43 of this part;
    (12) Hold prehearing conferences for the settlement and 
simplification of issues;
    (13) Require that all persons who can be identified from the record 
as being clearly and directly affected by a pending retirement-related 
case be notified of the appeal and of their right to request 
intervention so that their interests can be considered in the 
adjudication;
    (14) Issue any order that may be necessary to protect a witness or 
other individual from harassment and provide for enforcement of such 
order in accordance with subpart F;
    (15) Issue initial decisions; and
    (16) Determine, in decisions in which the appellant is the 
prevailing party, whether the granting of interim relief is appropriate.
    (c) Settlement--(1) Settlement discussion. The judge may initiate 
attempts to settle the appeal informally at any time. The parties may 
agree to waive the prohibitions against ex parte communications during 
settlement discussions, and they may agree to any limits on the waiver.
    (2) Agreement. If the parties agree to settle their dispute, the 
settlement agreement is the final and binding resolution of the appeal, 
and the judge will dismiss the appeal with prejudice.
    (i) If the parties offer the agreement for inclusion in the record, 
and if the judge approves the agreement, it will be made a part of the 
record, and the Board will retain jurisdiction to ensure compliance with 
the agreement.

[[Page 23]]

    (ii) If the agreement is not entered into the record, the Board will 
not retain jurisdiction to ensure compliance.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 62689, Nov. 25, 1997; 
63 FR 35500, June 30, 1998]



Sec. 1201.42  Disqualifying a judge.

    (a) If a judge considers himself or herself disqualified, he or she 
will withdraw from the case, state on the record the reasons for doing 
so, and immediately notify the Board of the withdrawal.
    (b) A party may file a motion asking the judge to withdraw on the 
basis of personal bias or other disqualification. This motion must be 
filed as soon as the party has reason to believe there is a basis for 
disqualification. The reasons for the request must be set out in an 
affidavit or sworn statement under 28 U.S.C. 1746. (See appendix IV.)
    (c) If the judge denies the motion, the party requesting withdrawal 
may request certification of the issue to the Board as an interlocutory 
appeal under Sec. 1201.91 of this part. Failure to request 
certification is considered a waiver of the request for withdrawal.



Sec. 1201.43  Sanctions.

    The judge may impose sanctions upon the parties as necessary to 
serve the ends of justice. This authority covers, but is not limited to, 
the circumstances set forth in paragraphs (a), (b), and (c) of this 
section.
    (a) Failure to comply with an order. When a party fails to comply 
with an order, the judge may:
    (1) Draw an inference in favor of the requesting party with regard 
to the information sought;
    (2) Prohibit the party failing to comply with the order from 
introducing evidence concerning the information sought, or from 
otherwise relying upon testimony related to that information;
    (3) Permit the requesting party to introduce secondary evidence 
concerning the information sought; and
    (4) Eliminate from consideration any appropriate part of the 
pleadings or other submissions of the party that fails to comply with 
the order.
    (b) Failure to prosecute or defend appeal. If a party fails to 
prosecute or defend an appeal, the judge may dismiss the appeal with 
prejudice or rule in favor of the appellant.
    (c) Failure to make timely filing. The judge may refuse to consider 
any motion or other pleading that is not filed in a timely fashion in 
compliance with this subpart.

                                Hearings



Sec. 1201.51  Scheduling the hearing.

    (a) The hearing will be scheduled not earlier than 15 days after the 
date of the hearing notice unless the parties agree to an earlier date. 
The agency, upon request of the judge, must provide appropriate hearing 
space.
    (b) The judge may change the time, date, or place of the hearing, or 
suspend, adjourn, or continue the hearing. The change will not require 
the 15-day notice provided in paragraph (a) of this section.
    (c) Either party may file a motion for postponement of the hearing. 
The motion must be made in writing and must either be accompanied by an 
affidavit or sworn statement under 28 U.S.C. 1746. (See appendix IV.) 
The affidavit or sworn statement must describe the reasons for the 
request. The judge will grant the request for postponement only upon a 
showing of good cause.
    (d) The Board has established certain approved hearing locations, 
which are published as a Notice in the Federal Register. See appendix 
III. Parties, for good cause, may file motions requesting a different 
hearing location. Rulings on those motions will be based on a showing 
that a different location will be more advantageous to all parties and 
to the Board.



Sec. 1201.52  Public hearings.

    Hearings are open to the public. The judge may order a hearing or 
any part of a hearing closed, however, when doing so would be in the 
best interests of the appellant, a witness, the public, or any other 
person affected by the proceeding. Any order closing the hearing will 
set out the reasons for the judge's decision. Any objections to the 
order will be made a part of the record.



Sec. 1201.53  Record of proceedings.

    (a) Preparation. A word-for-word record of the hearing is made under 
the

[[Page 24]]

judge's guidance. It is kept in the Board's copy of the appeal file and 
it is the official record of the hearing. Only hearing tape recordings 
or written transcripts prepared by the official hearing reporter will be 
accepted by the Board as the official record of the hearing. When the 
judge assigned to the case tape records a hearing (for example, a 
telephonic hearing in a retirement appeal), the judge is the ``official 
hearing reporter'' under this section.
    (b) Copies. When requested and when costs are paid, a copy of the 
official record of the hearing will be provided to a party. A party must 
send a request for a copy of a hearing tape recording or written 
transcript to the adjudicating regional or field office, or to the Clerk 
of the Board, as appropriate. A request for a copy of a hearing tape 
recording or written transcript sent by a non-party is controlled by the 
Board's rules at 5 CFR part 1204 (Freedom of Information Act). Requests 
for hearing tape recordings or written transcripts under the Freedom of 
Information Act must be sent to the appropriate Regional Director, the 
Chief Administrative Judge of the appropriate MSPB Field Office, or to 
the Clerk of the Board at MSPB headquarters in Washington, DC.
    (c) Exceptions to payment of costs. A party may not have to pay for 
a hearing tape recording or written transcript if he has a good reason 
to support a request for an exception. If a party believes he has a good 
reason and the request is made before the judge issues an initial 
decision, the party must send the request for an exception to the judge. 
If the request is made after the judge issues an initial decision, the 
request must be sent to the Clerk of the Board, who shall have authority 
to grant or deny such requests. The party must clearly state the reason 
for the request in an affidavit or sworn statement.
    (d) Corrections to written transcript. Corrections to the official 
written transcript may be made on motion by a party or on the judge's 
own motion. Motions for corrections must be filed within 10 days after 
the receipt of a written transcript. Corrections of the official written 
transcript will be made only when substantive errors are found and only 
with the judge's approval.
    (e) Official record. Exhibits, the official hearing record, if a 
hearing is held, all papers filed, and all orders and decisions of the 
judge and the Board, make up the official record of the case.

[65 FR 19293, Apr. 11, 2000, as amended at 70 FR 30608, May 27, 2005]



Sec. 1201.55  Motions.

    (a) Form. All motions, except those made during a prehearing 
conference or a hearing, must be in writing. All motions must include a 
statement of the reasons supporting them. Written motions must be filed 
with the judge or the Board, as appropriate, and must be served upon all 
other parties in accordance with Sec. 1201.26(b)(2) of this part. A 
party filing a motion for extension of time, a motion for postponement 
of a hearing, or any other procedural motion must first contact the 
other party to determine whether there is any objection to the motion, 
and must state in the motion whether the other party has an objection.
    (b) Objection. Unless the judge provides otherwise, any objection to 
a written motion must be filed within 10 days from the date of service 
of the motion. Judges, in their discretion, may grant or deny motions 
for extensions of time to file pleadings without providing any 
opportunity to respond to the motions.
    (c) Motions for extension of time. Motions for extension of time 
will be granted only on a showing of good cause.
    (d) Motions for protective orders. A motion for an order under 5 
U.S.C. 1204(e)(1)(B) to protect a witness or other individual from 
harassment must be filed as early in the proceeding as practicable. The 
party seeking a protective order must include a concise statement of 
reasons justifying the motion, together with any relevant documentary 
evidence. An agency, other than the Office of Special Counsel, may not 
request such an order with respect to an investigation by the Special 
Counsel during the Special Counsel's investigation. An order issued 
under this paragraph may be enforced in the

[[Page 25]]

same manner as provided under subpart F for Board final decisions and 
orders.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 17045, Apr. 9, 1997]



Sec. 1201.56  Burden and degree of proof; affirmative defenses.

    (a) Burden and degree of proof--(1) Agency: Under 5 U.S.C. 
7701(c)(1), and subject to the exceptions stated in paragraph (b) of 
this section, the agency action must be sustained if:
    (i) It is brought under 5 U.S.C. 4303 or 5 U.S.C. 5335 and is 
supported by substantial evidence; or
    (ii) It is brought under any other provision of law or regulation 
and is supported by a preponderance of the evidence.
    (2) Appellant. The appellant has the burden of proof, by a 
preponderance of the evidence, with respect to:
    (i) Issues of jurisdiction;
    (ii) The timeliness of the appeal; and
    (iii) Affirmative defenses.

In appeals from reconsideration decisions of the Office of Personnel 
Management involving retirement benefits, if the appellant filed the 
application, the appellant has the burden of proving, by a preponderance 
of the evidence, entitlement to the benefits. An appellant who has 
received an overpayment from the Civil Service Retirement and Disability 
Fund has the burden of proving, by substantial evidence, eligibility for 
waiver or adjustment.
    (b) Affirmative defenses of the appellant. Under 5 U.S.C. 
7701(c)(2), the Board is required to overturn the action of the agency, 
even where the agency has met the evidentiary standard stated in 
paragraph (a) of this section, if the appellant:
    (1) Shows harmful error in the application of the agency's 
procedures in arriving at its decision;
    (2) Shows that the decision was based on any prohibited personnel 
practice described in 5 U.S.C. 2302(b); or
    (3) Shows that the decision was not in accordance with law.
    (c) Definitions. The following definitions apply to this part:
    (1) Substantial evidence. The degree of relevant evidence that a 
reasonable person, considering the record as a whole, might accept as 
adequate to support a conclusion, even though other reasonable persons 
might disagree. This is a lower standard of proof than preponderance of 
the evidence.
    (2) Preponderance of the evidence. The degree of relevant evidence 
that a reasonable person, considering the record as a whole, would 
accept as sufficient to find that a contested fact is more likely to be 
true than untrue.
    (3) Harmful error. Error by the agency in the application of its 
procedures that is likely to have caused the agency to reach a 
conclusion different from the one it would have reached in the absence 
or cure of the error. The burden is upon the appellant to show that the 
error was harmful, i.e., that it caused substantial harm or prejudice to 
his or her rights.

[54 FR 53504, Dec. 29, 1989, as amended at 56 FR 41748, Aug. 23, 1991; 
70 FR 30608, May 27, 2005]



Sec. 1201.57  Order of hearing.

    (a) In cases in which the agency has taken an action against an 
employee, the agency will present its case first.
    (b) The appellant will proceed first at hearings convened on the 
issues of:
    (1) Jurisdiction;
    (2) Timeliness; or
    (3) Office of Personnel Management disallowance of retirement 
benefits, when the appellant applied for those benefits.
    (c) The judge may vary the normal order of presenting evidence.



Sec. 1201.58  Closing the record.

    (a) When there is a hearing, the record ordinarily will close at the 
conclusion of the hearing. When the judge allows the parties to submit 
argument, briefs, or documents previously identified for introduction 
into evidence, however, the record will remain open for as much time as 
the judge grants for that purpose.
    (b) If the appellant waives the right to a hearing, the record will 
close on the date the judge sets as the final date for the receipt or 
filing of submissions of the parties.
    (c) Once the record closes, no additional evidence or argument will 
be accepted unless the party submitting it shows that the evidence was 
not readily available before the record closed.

[[Page 26]]

The judge will include in the record, however, any supplemental 
citations received from the parties or approved corrections of the 
transcript, if one has been prepared.

                                Evidence



Sec. 1201.61  Exclusion of evidence and testimony.

    Any evidence and testimony that is offered in the hearing and 
excluded by the judge will be described, and that description will be 
made a part of the record.



Sec. 1201.62  Producing prior statements.

    After an individual has given evidence in a proceeding, any party 
may request a copy of any prior signed statement made by that individual 
that is relevant to the evidence given. If the party refuses to furnish 
the statement, the judge may exclude the evidence given.



Sec. 1201.63  Stipulations.

    The parties may stipulate to any matter of fact. The stipulation 
will satisfy a party's burden of proving the fact alleged.



Sec. 1201.64  Official notice.

    Official notice is the Board's or judge's recognition of certain 
facts without requiring evidence to be introduced establishing those 
facts. The judge, on his or her own motion or on the motion of a party, 
may take official notice of matters of common knowledge or matters that 
can be verified. The parties may be given an opportunity to object to 
the taking of official notice. The taking of official notice of any fact 
satisfies a party's burden of proving that fact.

                                Discovery



Sec. 1201.71  Purpose of discovery.

    Proceedings before the Board will be conducted as expeditiously as 
possible with due regard to the rights of the parties. Discovery is 
designed to enable a party to obtain relevant information needed to 
prepare the party's case. These regulations are intended to provide a 
simple method of discovery. They will be interpreted and applied so as 
to avoid delay and to facilitate adjudication of the case. Parties are 
expected to start and complete discovery with a minimum of Board 
intervention.



Sec. 1201.72  Explanation and scope of discovery.

    (a) Explanation. Discovery is the process, apart from the hearing, 
by which a party may obtain relevant information, including the 
identification of potential witnesses, from another person or a party, 
that the other person or party has not otherwise provided. Relevant 
information includes information that appears reasonably calculated to 
lead to the discovery of admissible evidence. This information is 
obtained to assist the parties in preparing and presenting their cases. 
The Federal Rules of Civil Procedure may be used as a general guide for 
discovery practices in proceedings before the Board. Those rules, 
however, are instructive rather than controlling.
    (b) Scope. Discovery covers any nonprivileged matter that is 
relevant to the issues involved in the appeal, including the existence, 
description, nature, custody, condition, and location of documents or 
other tangible things, and the identity and location of persons with 
knowledge of relevant facts. Discovery requests that are directed to 
nonparties and nonparty Federal agencies and employees are limited to 
information that appears directly material to the issues involved in the 
appeal.
    (c) Methods. Parties may use one or more of the methods provided 
under the Federal Rules of Civil Procedure. These methods include 
written interrogatories, depositions, requests for production of 
documents or things for inspection or copying, and requests for 
admission.
    (d) Limitations. The judge may limit the frequency or extent of use 
of the discovery methods permitted by these regulations. Such 
limitations may be imposed if the judge finds that the discovery sought 
is:
    (1) Cumulative or duplicative, or is obtainable from some other 
source that is more convenient, less burdensome, or less expensive;
    (2) The party seeking discovery has had sufficient opportunity by 
discovery

[[Page 27]]

in the action to obtain the information sought; or
    (3) The burden or expense of the proposed discovery outweighs its 
likely benefit.

[68 FR 54651, Sept. 18, 2003]



Sec. 1201.73  Discovery procedures.

    (a) Discovery from a party. A party seeking discovery from another 
party must start the process by serving a request for discovery on the 
representative of the other party or the party if there is no 
representative. The request for discovery must state the time limit for 
responding, as prescribed in Sec. 1201.73(d), and must specify the time 
and place of the taking of the deposition, if applicable. When a party 
directs a request for discovery to an officer or employee of a Federal 
agency that is a party, the agency must make the officer or employee 
available on official time to respond to the request, and must assist 
the officer or employee as necessary in providing relevant information 
that is available to the agency.
    (b) Discovery from a nonparty, including a nonparty Federal agency. 
Parties should try to obtain voluntary discovery from nonparties 
whenever possible. A party seeking discovery from a nonparty Federal 
agency or employee must start the process by serving a request for 
discovery on the nonparty Federal agency or employee. A party may begin 
discovery from other nonparties by serving a request for discovery on 
the nonparty directly. If the party seeking the information does not 
make that request, or if it does so but fails to obtain voluntary 
cooperation, it may obtain discovery from a nonparty by filing a written 
motion with the judge, showing the relevance, scope, and materiality of 
the particular information sought. If the party seeks to take a 
deposition, it should state in the motion the date, time, and place of 
the proposed deposition. An authorized official of the Board will issue 
a ruling on the motion, and will serve the ruling on the moving party. 
That official also will provide that party with a subpoena, if approved, 
that is directed to the individual or entity from which discovery is 
sought. The subpoena will specify the manner in which the party may seek 
compliance with it, and it will specify the time limit for seeking 
compliance. The party seeking the information is responsible for serving 
any Board-approved discovery request and subpoena on the individual or 
entity, or for arranging for their service.
    (c) Responses to discovery requests. (1) A party, or a Federal 
agency that is not a party, must answer a discovery request within the 
time provided under paragraph (d)(2) of this section, either by 
furnishing to the requesting party the information or testimony 
requested or agreeing to make deponents available to testify within a 
reasonable time, or by stating an objection to the particular request 
and the reasons for the objection. Non-parties may respond to discovery 
requests by electronic mail if authorized by the requesting party.
    (2) If a party fails or refuses to respond in full to a discovery 
request, or if a nonparty fails or refuses to respond in full to a 
Board-approved discovery order, the requesting party may file a motion 
to compel discovery. The requesting party must file the motion with the 
judge, and must serve a copy of the motion on the other party and on any 
nonparty entity or person from whom the discovery was sought. The motion 
must be accompanied by:
    (i) A copy of the original request and a statement showing that the 
information sought is relevant and material; and
    (ii) A copy of the response to the request (including the objections 
to discovery) or, where appropriate, a statement that no response has 
been received, along with an affidavit or sworn statement under 28 
U.S.C. 1746 supporting the statement. (See appendix IV to part 1201.)
    (3) The other party and any other entity or person from whom 
discovery was sought may respond to the motion to compel discovery 
within the time limits stated in paragraph (d)(4) of this section.
    (d) Time limits. (1) Parties who wish to make discovery requests or 
motions must serve their initial requests or motions within 25 days 
after the date on which the judge issues an order to the respondent 
agency to produce the agency file and response.

[[Page 28]]

    (2) A party or nonparty must file a response to a discovery request 
promptly, but not later than 20 days after the date of service of the 
request or order of the judge. Any discovery requests following the 
initial request must be served within 7 days of the date of service of 
the prior response, unless the parties are otherwise directed. 
Deposition witnesses must give their testimony at the time and place 
stated in the request for deposition or in the subpoena, unless the 
parties agree on another time or place.
    (3) Any motion to depose a nonparty (along with a request for a 
subpoena) must be submitted to the judge within the time limits stated 
in paragraph (d)(1) of this section or as the judge otherwise directs.
    (4) Any motion for an order to compel discovery must be filed with 
the judge within 10 days of the date of service of objections or, if no 
response is received, within 10 days after the time limit for response 
has expired. Any pleading in opposition to a motion to compel discovery 
must be filed with the judge within 10 days of the date of service of 
the motion.
    (5) Discovery must be completed within the time the judge 
designates.
    (e) Limits on the number of discovery requests. (1) Absent prior 
approval by the judge, interrogatories served by parties upon another 
party or a nonparty may not exceed 25 in number, including all discrete 
subparts.
    (2) Absent prior approval by the judge, parties may not take more 
than 10 depositions.
    (3) Requests to exceed the limitations set forth in paragraphs (a) 
and (b) of this section may be granted at the discretion of the judge. 
In considering such requests, the judge shall consider the factors 
identified in Sec. 1201.72(d) of this part.

[68 FR 54651, Sept. 18, 2003]



Sec. 1201.74  Orders for discovery.

    (a) Motion for an order compelling discovery. Motions for orders 
compelling discovery and motions for the appearance of nonparties must 
be filed with the judge in accordance with Sec. 1201.73(c)(2) and 
(d)(4).
    (b) Content of order. Any order issued will include, where 
appropriate:
    (1) A provision that the person to be deposed must be notified of 
the time and place of the deposition;
    (2) Any conditions or limits concerning the conduct or scope of the 
proceedings or the subject matter that may be necessary to prevent undue 
delay or to protect a party or other individual or entity from undue 
expense, embarrassment, or oppression;
    (3) Limits on the time for conducting depositions, answering written 
interrogatories, or producing documentary evidence; and
    (4) Other restrictions upon the discovery process that the judge 
sets.
    (c) Noncompliance. The judge may impose sanctions under Sec. 
1201.43 of this part for failure to comply with an order compelling 
discovery.



Sec. 1201.75  Taking depositions.

    Depositions may be taken by any method agreed upon by the parties. 
The person providing information is subject to penalties for intentional 
false statements.

                                Subpoenas



Sec. 1201.81  Requests for subpoenas.

    (a) Request. Parties who wish to obtain subpoenas that would require 
the attendance and testimony of witnesses, or subpoenas that would 
require the production of documents or other evidence under 5 U.S.C. 
1204(b)(2)(A), should file their motions for those subpoenas with the 
judge. The Board has authority under 5 U.S.C. 1204(b)(2)(A) to issue a 
subpoena requiring the attendance and testimony of any individual 
regardless of location and for the production of documentary or other 
evidence from any place in the United States, any territory or 
possession of the United States, the Commonwealth of Puerto Rico or the 
District of Columbia. Subpoenas are not ordinarily required to obtain 
the attendance of Federal employees as witnesses.
    (b) Form. Parties requesting subpoenas must file their requests, in 
writing, with the judge. Each request must identify specifically the 
books, papers, or testimony desired.

[[Page 29]]

    (c) Relevance. The request must be supported by a showing that the 
evidence sought is relevant and that the scope of the request is 
reasonable.
    (d) Rulings. Any judge who does not have the authority to issue 
subpoenas will refer the request to an official with authority to rule 
on the request, with a recommendation for decision. The official to whom 
the request is referred will rule on the request promptly. Judges who 
have the authority to rule on these requests themselves will do so 
directly.

[54 FR 53504, Dec. 29, 1989, as amended at 70 FR 30608, May 27, 2005]



Sec. 1201.82  Motions to quash subpoenas.

    Any person to whom a subpoena is directed, or any party, may file a 
motion to quash or limit the subpoena. The motion must be filed with the 
judge, and it must include the reasons why compliance with the subpoena 
should not be required or the reasons why the subpoena's scope should be 
limited.



Sec. 1201.83  Serving subpoenas.

    (a) Any person who is at least 18 years of age and who is not a 
party to the appeal may serve a subpoena. The means prescribed by 
applicable state law are sufficient. The party who requested the 
subpoena, and to whom the subpoena has been issued, is responsible for 
serving the subpoena.
    (b) A subpoena directed to an individual outside the territorial 
jurisdiction of any court of the United States may be served in the 
manner described by the Federal Rules of Civil Procedure for service of 
a subpoena in a foreign country.



Sec. 1201.84  Proof of service.

    The person who has served the subpoena must certify that he or she 
did so:
    (a) By delivering it to the witness in person,
    (b) By registered or certified mail, or
    (c) By delivering the subpoena to a responsible person (named in the 
document certifying the delivery) at the residence or place of business 
(as appropriate) of the person for whom the subpoena was intended.

The document in which the party makes this certification also must 
include a statement that the prescribed fees have been paid or offered.



Sec. 1201.85  Enforcing subpoenas.

    (a) If a person who has been served with a Board subpoena fails or 
refuses to comply with its terms, the party seeking compliance may file 
a written motion for enforcement with the judge or make an oral motion 
for enforcement while on the record at a hearing. That party must 
present the document certifying that the subpoena was served and, except 
where the witness was required to appear before the judge, must submit 
an affidavit or sworn statement under 28 U.S.C. 1746 (see appendix IV) 
describing the failure or refusal to obey the subpoena. The Board, in 
accordance with 5 U.S.C. 1204(c), may then ask the appropriate United 
States district court to enforce the subpoena. If the person who has 
failed or refused to comply with a Board subpoena is located in a 
foreign country, the U.S. District Court for the District of Columbia 
will have jurisdiction to enforce compliance, to the extent that a U.S. 
court can assert jurisdiction over an individual in the foreign country.
    (b) Upon application by the Special Counsel, the Board may seek 
court enforcement of a subpoena issued by the Special Counsel in the 
same manner in which it seeks enforcement of Board subpoenas, in 
accordance with 5 U.S.C. 1212(b)(3).

                          Interlocutory Appeals



Sec. 1201.91  Explanation.

    An interlocutory appeal is an appeal to the Board of a ruling made 
by a judge during a proceeding. The judge may permit the appeal if he or 
she determines that the issue presented in it is of such importance to 
the proceeding that it requires the Board's immediate attention. Either 
party may make a motion for certification of an interlocutory appeal. In 
addition, the judge, on his or her own motion, may certify an 
interlocutory appeal to the Board. If the appeal is certified, the Board 
will decide the issue and the judge will act

[[Page 30]]

in accordance with the Board's decision.



Sec. 1201.92  Criteria for certifying interlocutory appeals.

    The judge will certify a ruling for review only if the record shows 
that:
    (a) The ruling involves an important question of law or policy about 
which there is substantial ground for difference of opinion; and
    (b) An immediate ruling will materially advance the completion of 
the proceeding, or the denial of an immediate ruling will cause undue 
harm to a party or the public.



Sec. 1201.93  Procedures.

    (a) Motion for certification. A party seeking the certification of 
an interlocutory appeal must file a motion for certification within 10 
days of the date of the ruling to be appealed. The motion must be filed 
with the judge, and must state why certification is appropriate and what 
the Board should do and why. The opposing party may file objections 
within 10 days of the date of service of the motion, or within any other 
time period that the judge may designate.
    (b) Certification and review. The judge will grant or deny a motion 
for certification within five days after receiving all pleadings or, if 
no response is filed, within 10 days after receiving the motion. If the 
judge grants the motion for certification, he or she will refer the 
record to the Board. If the judge denies the motion, the party that 
sought certification may raise the matter at issue in a petition for 
review filed after the initial decision is issued, in accordance with 
Sec. Sec. 1201.113 and 1201.114 of this part.
    (c) Stay of hearing. The judge has the authority to proceed with or 
to stay the hearing while an interlocutory appeal is pending with the 
Board. Despite this authority, however, the Board may stay a hearing on 
its own motion while an interlocutory appeal is pending with it.

                         Ex Parte Communications



Sec. 1201.101  Explanation and definitions.

    (a) Explanation. An ex parte communication is an oral or written 
communication between a decision-making official of the Board and an 
interested party to a proceeding, when that communication is made 
without providing the other parties to the appeal with a chance to 
participate. Not all ex parte communications are prohibited. Those that 
involve the merits of the case, or those that violate rules requiring 
submissions to be in writing, are prohibited. Accordingly, interested 
parties may ask about such matters as the status of a case, when it will 
be heard, and methods of submitting evidence to the Board. Parties may 
not ask about matters such as what defense they should use or whether 
their evidence is adequate, and they may not make a submission orally if 
that submission is required to be made in writing.
    (b) Definitions for purposes of this section--(1) Interested party 
includes:
    (i) Any party or representative of a party involved in a proceeding 
before the Board; and
    (ii) Any other person who might be affected by the outcome of a 
proceeding before the Board.
    (2) Decision-making official means any judge, officer or other 
employee of the Board designated to hear and decide cases.



Sec. 1201.102  Prohibition on ex parte communications.

    Except as otherwise provided in Sec. 1201.41(c)(1) of this part, ex 
parte communications that concern the merits of any matter before the 
Board for adjudication, or that otherwise violate rules requiring 
written submissions, are prohibited from the time the persons involved 
know that the Board may consider the matter until the time the Board has 
issued a final decision on the matter.



Sec. 1201.103  Placing communications in the record; sanctions.

    (a) Any communication made in violation of Sec. 1201.102 of this 
part will be made a part of the record. If the communication was oral, a 
memorandum stating the substance of the discussion will be placed in the 
record.
    (b) If there has been a violation of Sec. 1201.102 of this part, 
the judge or the Clerk of the Board, as appropriate, will notify the 
parties in writing that the

[[Page 31]]

regulation has been violated, and will give the parties 10 days to file 
a response.
    (c) The following sanctions are available:
    (1) Parties. The offending party may be required to show why, in the 
interest of justice, the claim or motion should not be dismissed, 
denied, or otherwise adversely affected.
    (2) Other persons. The Board may invoke appropriate sanctions 
against other offending parties.

[54 FR 53504, Dec. 29, 1989, as amended at 70 FR 30609, May 27, 2005]

                             Final Decisions



Sec. 1201.111  Initial decision by judge.

    (a) The judge will prepare an initial decision after the record 
closes, and will serve that decision on the Clerk of the Board, on the 
Director of the Office of Personnel Management, and on all parties to 
the appeal, including named parties, permissive intervenors, and 
intervenors of right.
    (b) Each initial decision will contain:
    (1) Findings of fact and conclusions of law upon all the material 
issues of fact and law presented on the record;
    (2) The reasons or bases for those findings and conclusions;
    (3) An order making final disposition of the case, including 
appropriate relief;
    (4) A statement, if the appellant is the prevailing party, as to 
whether interim relief is provided effective upon the date of the 
decision, pending the outcome of any petition for review filed by 
another party under subpart C of this part;
    (5) The date upon which the decision will become final (a date that, 
for purposes of this section, is 35 days after issuance); and
    (6) A statement of any further process available, including, as 
appropriate, a petition for review under Sec. 1201.114 of this part, a 
petition for enforcement under Sec. 1201.182, a motion for attorney 
fees under Sec. 1201.203, a motion to initiate an addendum proceeding 
for consequential damages or compensatory damages under Sec. 1201.204, 
and a petition for judicial review.
    (c) Interim relief. (1) Under 5 U.S.C. 7701(b)(2), if the appellant 
is the prevailing party, the initial decision will provide appropriate 
interim relief to the appellant effective upon the date of the initial 
decision and remaining in effect until the date of the final order of 
the Board on any petition for review, unless the judge determines that 
the granting of interim relief is not appropriate. The agency may 
decline to return the appellant to his or her place of employment if it 
determines that the return or presence of the appellant will be unduly 
disruptive to the work environment. However, pay and benefits must be 
provided.
    (2) An initial decision that orders interim relief shall include a 
section which will provide the appellant specific notice that the relief 
ordered in the decision must be provided by the agency effective as of 
the date of the decision if a party files a petition for review. If the 
relief ordered in the initial decision requires the agency to effect an 
appointment, the notice required by this section will so state, will 
specify the title and grade of the appointment, and will specifically 
advise the appellant of his right to receive pay and benefits while any 
petition for review is pending, even if the agency determines that the 
appellant's return to or presence in the workplace would be unduly 
disruptive.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 17045, Apr. 9, 1997; 63 
FR 41179, Aug. 3, 1998; 64 FR 27900, May 24, 1999]



Sec. 1201.112  Jurisdiction of judge.

    (a) After issuing the initial decision, the judge will retain 
jurisdiction over a case only to the extent necessary to:
    (1) Correct the transcript; when one is obtained;
    (2) Rule on a request by the appellant for attorney fees, 
consequential damages, or compensatory damages under subpart H of this 
part;
    (3) Process any petition for enforcement filed under subpart F of 
this part;
    (4) Vacate an initial decision before that decision becomes final 
under Sec. 1201.113 in order to accept a settlement agreement into the 
record.

[[Page 32]]

    (b) Nothing is this section affects the time limits prescribed in 
Sec. 1201.113 regarding the finality of an initial decision or the time 
allowed for filing a petition for review.

[59 FR 22125, Apr. 29, 1994, as amended at 62 FR 17045, Apr. 9, 1997; 70 
FR 30609, May 27, 2005]



Sec. 1201.113  Finality of decision.

    The initial decision of the judge will become final 35 days after 
issuance. Initial decisions are not precedential.
    (a) Exceptions. The initial decision will not become final if any 
party files a petition for review within the time limit for filing 
specified in Sec. 1201.114 of this part, or if the Board reopens the 
case on its own motion.
    (b) Petition for review denied. If the Board denies all petitions 
for review, the initial decision will become final when the Board issues 
its last decision denying a petition for review.
    (c) Petition for review granted or case reopened. If the Board 
grants a petition for review or a cross petition for review, or reopens 
or dismisses a case, the decision of the Board is final if it disposes 
of the entire action.
    (d) Extensions. The Board may extend the time limit for filing a 
petition for good cause shown as specified in Sec. 1201.114 of this 
part.
    (e) Exhaustion. Administrative remedies are exhausted when a 
decision becomes final in accordance with this section.

[54 FR 53504, Dec. 29, 1989, as amended at 62 FR 59992, Nov. 6, 1997]



           Subpart C_Petitions for Review of Initial Decisions



Sec. 1201.114  Filing petition and cross petition for review.

    (a) Who may file. Any party to the proceeding, the Director of the 
Office of Personnel Management (OPM), or the Special Counsel may file a 
petition for review. The Director of OPM may request review only if he 
or she believes that the decision is erroneous and will have a 
substantial impact on any civil service law, rule, or regulation under 
OPM's jurisdiction. 5 U.S.C. 7701(e)(2). All submissions to the Board 
must contain the signature of the party or of the party's designated 
representative.
    (b) Cross petition for review. If a party, the Director of OPM, or 
the Special Counsel files a timely petition for review, any other party, 
the Director of OPM, or the Special Counsel may file a timely cross 
petition for review. The Board normally will consider only issues raised 
in a timely filed petition for review or in a timely filed cross 
petition for review.
    (c) Place for filing. A petition for review, cross petition for 
review, responses to those petitions, and all motions and pleadings 
associated with them must be filed with the Clerk of the Merit Systems 
Protection Board, Washington, DC 20419, by commercial or personal 
delivery, by facsimile, by mail, or by electronic filing in accordance 
with Sec. 1201.14.
    (d) Time for filing. Any petition for review must be filed within 35 
days after the date of issuance of the initial decision or, if the 
petitioner shows that the initial decision was received more than 5 days 
after the date of issuance, within 30 days after the date the petitioner 
received the initial decision. A cross petition for review must be filed 
within 25 days of the date of service of the petition for review. Any 
response to a petition for review or to a cross petition for review must 
be filed within 25 days after the date of service of the petition or 
cross petition.
    (e) Extension of time to file. The Board will grant a motion for 
extension of time to file a petition for review, a cross petition, or a 
response only if the party submitting the motion shows good cause. 
Motions for extensions must be filed with the Clerk of the Board before 
the date on which the petition or other pleading is due. The Board, in 
its discretion, may grant or deny those motions without providing the 
other parties the opportunity to comment on them. A motion for an 
extension must be accompanied by an affidavit or sworn statement under 
28 U.S.C. 1746. (See appendix IV to part 1201.) The affidavit or sworn 
statement must include a specific and detailed description of the 
circumstances alleged to constitute good cause, and it should

[[Page 33]]

be accompanied by any available documentation or other evidence 
supporting the matters asserted.
    (f) Late filings. Any petition for review, cross petition for 
review, or response that is filed late must be accompanied by a motion 
that shows good cause for the untimely filing, unless the Board has 
specifically granted an extension of time under paragraph (e) of this 
section, or unless a motion for extension is pending before the Board. 
The motion must be accompanied by an affidavit or sworn statement under 
28 U.S.C. 1746. (See appendix IV to part 1201.) The affidavit or sworn 
statement must include:
    (1) The reasons for failing to request an extension before the 
deadline for the submission; and
    (2) A specific and detailed description of the circumstances causing 
the late filing, accompanied by supporting documentation or other 
evidence.

Any response to the motion may be included in the response to the 
petition for review, the cross petition for review, or the response to 
the cross petition for review. The response will not extend the time 
provided by paragraph (d) of this section to file a cross petition for 
review or to respond to the petition or cross petition. In the absence 
of a motion, the Board may, in its discretion, determine on the basis of 
the existing record whether there was good cause for the untimely 
filing, or it may provide the party that submitted the document with an 
opportunity to show why it should not be dismissed or excluded as 
untimely.
    (g) Intervention--(1) By Director of OPM. The Director of OPM may 
intervene in a case before the Board under the standards stated in 5 
U.S.C. 7701(d). The notice of intervention is timely if it is filed with 
the Clerk of the Board within 45 days of the date the petition for 
review was filed. If the Director requests additional time for filing a 
brief on intervention, the Board may, in its discretion, grant the 
request. A party may file a response to the Director's brief within 15 
days of the date of service of that brief. The Director must serve the 
notice of intervention and the brief on all parties.
    (2) By Special Counsel. (i) Under 5 U.S.C. 1212(c), the Special 
Counsel may intervene as a matter of right, except as provided in 
paragraph (g)(2)(ii) of this section. The notice of intervention is 
timely if it is filed with the Clerk of the Board within 45 days of the 
date the petition for review was filed. If the Special Counsel requests 
additional time for filing a brief on intervention, the Board may, in 
its discretion, grant the request. A party may file a response to the 
Special Counsel's brief within 15 days of the date of service. The 
Special Counsel must serve the notice of intervention and the brief on 
all parties.
    (ii) The Special Counsel may not intervene in an action brought by 
an individual under 5 U.S.C. 1221, or in an appeal brought by an 
individual under 5 U.S.C. 7701, without the consent of that individual. 
The Special Counsel must present evidence that the individual has 
consented to the intervention at the time the motion to intervene is 
filed.
    (3) Permissive intervenors. Any person, organization or agency, by 
motion made in a petition for review, may ask for permission to 
intervene. The motion must state in detail the reasons why the person, 
organization or agency should be permitted to intervene. A motion for 
permission to intervene will be granted if the requester shows that he 
or she will be affected directly by the outcome of the proceeding. Any 
person alleged to have committed a prohibited personnel practice under 5 
U.S.C. 2302(b) may ask for permission to intervene.
    (h) Service. A party submitting a pleading must serve a copy of it 
on each party and on each representative, as required by paragraph 
(b)(2) of Sec. 1201.26.
    (i) Closing the record. The record closes on expiration of the 
period for filing the response to the petition for review, or to the 
cross petition for review, or to the brief on intervention, if any, or 
on any other date the Board sets for this purpose. Once the record 
closes, no additional evidence or argument will be accepted unless the 
party submitting it shows that the evidence

[[Page 34]]

was not readily available before the record closed.

[54 FR 53504, Dec. 29, 1989, as amended at 58 FR 36345, July 7, 1993; 62 
FR 59992, Nov. 6, 1997; 68 FR 59863, Oct. 20, 2003; 69 FR 57630, Sept. 
27, 2004]



Sec. 1201.115  Contents of petition for review.

    (a) The petition for review must state objections to the initial 
decision that are supported by references to applicable laws or 
regulations and by specific references to the record.
    (b)(1) If the appellant was the prevailing party in the initial 
decision, and the decision granted the appellant interim relief, any 
petition for review or cross petition for review filed by the agency 
must be accompanied by a certification that the agency has complied with 
the interim relief order either by providing the required interim relief 
or by satisfying the requirements of 5 U.S.C. 7701(b)(2)(A)(ii) and (B).
    (2) If the appellant challenges the agency's certification of 
compliance with the interim relief order, the Board will issue an order 
affording the agency the opportunity to submit evidence of its 
compliance. The appellant may respond to the agency's submission of 
evidence within 10 days after the date of service of the submission.
    (3) If an appellant or an intervenor files a petition or cross 
petition for review of an initial decision ordering interim relief and 
such petition includes a challenge to the agency's compliance with the 
interim relief order, upon order of the Board the agency must submit 
evidence that it has provided the interim relief required or that it has 
satisfied the requirements of 5 U.S.C. 7701(b)(2)(A)(ii) and (B).
    (4) Failure by an agency to provide the certification required by 
paragraph (b)(1) of this section with its petition or cross petition for 
review, or to provide evidence of compliance in response to a Board 
order in accordance with paragraph (b)(2) or (b)(3) of this section, may 
result in the dismissal of the agency's petition or cross petition for 
review.
    (c) Nothing in paragraph (b) of this section shall be construed to 
require any payment of back pay for the period preceding the date of the 
judge's initial decision or attorney fees before the decision of the 
Board becomes final.
    (d) The Board, after providing the other parties with an opportunity 
to respond, may grant a petition for review when it is established that:
    (1) New and material evidence is available that, despite due 
diligence, was not available when the record closed; or
    (2) The decision of the judge is based on an erroneous 
interpretation of statute or regulation.

[54 FR 53504, Dec. 29, 1989, as amended at 59 FR 30863, June 16, 1994; 
62 FR 43631, Aug. 15, 1997; 64 FR 27900, May 24, 1999]



Sec. 1201.116  Appellant requests for enforcement of interim relief.

    (a) Before a final decision is issued. If the agency files a 
petition for review or a cross petition for review and has not provided 
required interim relief, the appellant may request dismissal of the 
agency's petition. Any such request must be filed with the Clerk of the 
Board within 25 days of the date of service of the agency's petition. A 
copy of the response must be served on the agency at the same time it is 
filed with the Board. The agency may respond with evidence and argument 
to the appellant's request to dismiss within 15 days of the date of 
service of the request. If the appellant files a motion to dismiss 
beyond the time limit, the Board will dismiss the motion as untimely 
unless the appellant shows that it is based on information not readily 
available before the close of the time limit.
    (b) After a final decision is issued. If the appellant is not the 
prevailing party in the final Board order, and if the appellant believes 
that the agency has not provided full interim relief, the appellant may 
file an enforcement petition with the regional office under Sec. 
1201.182. The appellant must file this petition within 20 days of 
learning of the agency's failure to provide full interim relief. If the 
appellant prevails in the final Board order, then any interim relief 
enforcement motion filed will be treated as a motion for enforcement of 
the final decision. Petitions under this subsection will be processed 
under Sec. 1201.183.

[59 FR 30864, June 16, 1994]

[[Page 35]]



Sec. 1201.117  Procedures for review or reopening.

    (a) In any case that is reopened or reviewed, the Board may:
    (1) Issue a single decision that denies or grants a petition for 
review, reopens the appeal, and decides the case;
    (2) Hear oral arguments;
    (3) Require that briefs be filed;
    (4) Remand the appeal so that the judge may take further testimony 
or evidence or make further findings or conclusions; or
    (5) Take any other action necessary for final disposition of the 
case.
    (b) The Board may affirm, reverse, modify, or vacate the decision of 
the judge, in whole or in part. Where appropriate, the Board will issue 
a final decision and order a date for compliance with that decision.

[54 FR 53504, Dec. 29, 1989. Redesignated at 59 FR 30864, June 16, 1994]



Sec. 1201.118  Board reopening of case and reconsideration of initial decision.

    The Board may reopen an appeal and reconsider a decision of a judge 
on its own motion at any time, regardless of any other provisions of 
this part.

[54 FR 53504, Dec. 29, 1989. Redesignated at 59 FR 30864, June 16, 1994]



Sec. 1201.119  OPM petition for reconsideration.

    (a) Criteria. Under 5 U.S.C. 7703(d), the Director of the Office of 
Personnel Management may file a petition for reconsideration of a Board 
final order if he or she determines:
    (1) That the Board erred in interpreting a civil service law, rule, 
or regulation affecting personnel management, and
    (2) That the Board's decision will have a substantial impact on a 
civil service law, rule, regulation, or policy directive.
    (b) Time limit. The Director must file the petition for 
reconsideration within 35 days after the date of service of the Board's 
final order.
    (c) Briefs. After the petition is filed, the Board will make the 
official record relating to the petition for reconsideration available 
to the Director for review. The Director's brief in support of the 
petition for reconsideration must be filed within 20 days after the 
Board makes the record available for review. Any party's opposition to 
the petition for reconsideration must be filed within 25 days from the 
date of service of the Director's brief.
    (d) Stays. If the Director of OPM files a petition for 
reconsideration, he or she also may ask the Board to stay its final 
order. An application for a stay, with a supporting memorandum, must be 
filed at the same time as the petition for reconsideration.

[54 FR 53504, Dec. 29, 1989. Redesignated at 59 FR 30864, June 16, 1994]



Sec. 1201.120  Judicial review.

    Any employee or applicant for employment who is adversely affected 
by a final order or decision of the Board under the provisions of 5 
U.S.C. 7703 may obtain judicial review in the United States Court of 
Appeals for the Federal Circuit. As Sec. 1201.175 of this part 
provides, an appropriate United States district court has jurisdiction 
over a request for judicial review of cases involving the kinds of 
discrimination issues described in 5 U.S.C. 7702.

[54 FR 53504, Dec. 29, 1989. Redesignated at 59 FR 30864, June 16, 1994]



          Subpart D_Procedures for Original Jurisdiction Cases

    Source: 62 FR 48451, Sept. 16, 1997, unless otherwise noted.

                                 General



Sec. 1201.121  Scope of jurisdiction; application of subparts B, F, and H.

    (a) Scope. The Board has original jurisdiction over complaints filed 
by the Special Counsel seeking corrective or disciplinary action 
(including complaints alleging a violation of the Hatch Political 
Activities Act), requests by the Special Counsel for stays of certain 
personnel actions, proposed agency actions against administrative law 
judges, and removals of career appointees from the Senior Executive 
Service for performance reasons.
    (b) Application of subparts B, F, and H. (1) Except as otherwise 
expressly provided by this subpart, the regulations in subpart B of this 
part applicable to

[[Page 36]]

appellate case processing also apply to original jurisdiction cases 
processed under this subpart.
    (2) Subpart F of this part applies to enforcement proceedings in 
connection with Special Counsel complaints and stay requests, and agency 
actions against administrative law judges, decided under this subpart.
    (3) Subpart H of this part applies to requests for attorney fees or 
compensatory damages in connection with Special Counsel corrective and 
disciplinary action complaints, and agency actions against 
administrative law judges, decided under this subpart. Subpart H of this 
part also applies to requests for consequential damages in connection 
with Special Counsel corrective action complaints decided under this 
subpart.
    (c) The provisions of this subpart do not apply to appeals alleging 
non-compliance with the provisions of chapter 43 of title 38 of the 
United States Code relating to the employment or reemployment rights or 
benefits to which a person is entitled after service in the uniformed 
services, in which the Special Counsel appears as the designated 
representative of the appellant. Such appeals are governed by part 1208 
of this title.

[62 FR 48451, Sept. 16, 1997, as amended at 62 FR 66815, Dec. 22, 1997; 
65 FR 5409, Feb. 4, 2000]

                  Special Counsel Disciplinary Actions



Sec. 1201.122  Filing complaint; serving documents on parties.

    (a) Place of filing. A Special Counsel complaint seeking 
disciplinary action under 5 U.S.C. 1215(a)(1) (including a complaint 
alleging a violation of the Hatch Political Activities Act) must be 
filed with the Clerk of the Board.
    (b) Initial filing and service. The Special Counsel must file two 
copies of the complaint, together with numbered and tabbed exhibits or 
attachments, if any, and a certificate of service listing each party or 
the party's representative. The certificate of service must show the 
last known address, telephone number, and facsimile number of each party 
or representative. The Special Counsel must serve a copy of the 
complaint on each party or the party's representative, as shown on the 
certificate of service. The initial filing in a complaint may not be 
submitted in electronic form.
    (c) Subsequent filings and service. Each party must serve on every 
other party or the party's representative one copy of each of its 
pleadings, as defined by Sec. 1201.4(b). A certificate of service 
describing how and when service was made must accompany each pleading. 
Each party is responsible for notifying the Board and the other parties 
in writing of any change in name, address, telephone number, or 
facsimile number of the party or the party's representative.
    (d) Method of filing and service. Filing may be by mail, by 
facsimile, or by personal or commercial delivery to the Clerk of the 
Board. Service may be by mail, by facsimile, or by personal or 
commercial delivery to each party or the party's representative, as 
shown on the certificate of service.
    (e) Electronic filing. All pleadings, other than the complaint, may 
be filed and served in electronic form at the Board's e-Appeal site 
(https://e-appeal.mspb.gov), provided the requirements of Sec. 1201.14 
are satisfied.

[62 FR 48451, Sept. 16, 1997, as amended at 68 FR 59863, Oct. 20, 2003; 
69 FR 57630, Sept. 27, 2004]



Sec. 1201.123  Contents of complaint.

    (a) If the Special Counsel determines that the Board should take any 
of the actions listed below, he or she must file a written complaint in 
accordance with Sec. 1201.122 of this part, stating with particularity 
any alleged violations of law or regulation, along with the supporting 
facts.
    (1) Action to discipline an employee alleged to have committed a 
prohibited personnel practice, 5 U.S.C. 1215(a)(1)(A);
    (2) Action to discipline an employee alleged to have violated any 
law, rule, or regulation, or to have engaged in prohibited conduct, 
within the jurisdiction of the Special Counsel under 5 U.S.C. 1216 
(including an alleged violation by a Federal or District of Columbia 
government employee involving political activity prohibited under 5 
U.S.C. 7324), 5 U.S.C. 1215(a)(1)(B), 1216(a), and 1216(c);

[[Page 37]]

    (3) Action to discipline a State or local government employee for an 
alleged violation involving prohibited political activity, 5 U.S.C. 
1505; or
    (4) Action to discipline an employee for an alleged knowing and 
willful refusal or failure to comply with an order of the Board, 5 
U.S.C. 1215(a)(1)(C).
    (b) The administrative law judge to whom the complaint is assigned 
may order the Special Counsel and the responding party to file briefs, 
memoranda, or both in any disciplinary action complaint the Special 
Counsel brings before the Board.



Sec. 1201.124  Rights; answer to complaint.

    (a) Responsibilities of Clerk of the Board. The Clerk of the Board 
shall furnish a copy of the applicable Board regulations to each party 
that is not a Federal, State, or local government agency and shall 
inform such a party of the party's rights under paragraph (b) of this 
section and the requirements regarding the timeliness and content of an 
answer to the Special Counsel's complaint under paragraphs (c) and (d), 
respectively, of this section.
    (b) Rights. When the Special Counsel files a complaint proposing a 
disciplinary action against an employee under 5 U.S.C. 1215(a)(1), the 
employee has the right:
    (1) To file an answer, supported by affidavits and documentary 
evidence;
    (2) To be represented;
    (3) To a hearing on the record before an administrative law judge;
    (4) To a written decision, issued at the earliest practicable date, 
in which the administrative law judge states the reasons for his or her 
decision; and
    (5) To a copy of the administrative law judge's decision and 
subsequent final decision by the Board, if any.
    (c) Filing and default. A party named in a Special Counsel 
disciplinary action complaint may file an answer with the Clerk of the 
Board within 35 days of the date of service of the complaint. If a party 
fails to answer, the failure may constitute waiver of the right to 
contest the allegations in the complaint. Unanswered allegations may be 
considered admitted and may form the basis of the administrative law 
judge's decision.
    (d) Content. An answer must contain a specific denial, admission, or 
explanation of each fact alleged in the complaint. If the respondent has 
no knowledge of a fact, he or she must say so. The respondent may 
include statements of fact and appropriate documentation to support each 
denial or defense. Allegations that are unanswered or admitted in the 
answer may be considered true.



Sec. 1201.125  Administrative law judge.

    (a) An administrative law judge will hear a disciplinary action 
complaint brought by the Special Counsel.
    (b) Except as provided in paragraph (c)(1) of this section, the 
administrative law judge will issue an initial decision on the complaint 
pursuant to 5 U.S.C. 557. The applicable provisions of Sec. Sec. 
1201.111, 1201.112, and 1201.113 of this part govern the issuance of 
initial decisions, the jurisdiction of the judge, and the finality of 
initial decisions. The initial decision will be subject to the 
procedures for a petition for review by the Board under subpart C of 
this part.
    (c)(1) In a Special Counsel complaint seeking disciplinary action 
against a Federal or District of Columbia government employee for a 
violation of 5 U.S.C. 7323 or 7324, where the administrative law judge 
finds that the violation does not warrant removal, the administrative 
law judge will issue a recommended decision to the Board in accordance 
with 5 U.S.C. 557.
    (2) The parties may file with the Clerk of the Board any exceptions 
they may have to the recommended decision of the administrative law 
judge. Those exceptions must be filed within 35 days after the date of 
service of the recommended decision or, if the filing party shows that 
the recommended decision was received more than 5 days after the date of 
service, within 30 days after the date the filing party received the 
recommended decision.
    (3) The parties may file replies to exceptions within 25 days after 
the date of service of the exceptions, as that date is determined by the 
certificate of service.
    (4) No additional evidence will be accepted with a party's 
exceptions or with a reply to exceptions unless the

[[Page 38]]

party submitting it shows that the evidence was not readily available 
before the administrative law judge closed the record.
    (5) The Board will consider the recommended decision of the 
administrative law judge, together with any exceptions and replies to 
exceptions filed by the parties, and will issue a final written 
decision.

[62 FR 48451, Sept. 16, 1997, as amended at 63 FR 42686, Aug. 11, 1998; 
70 FR 30609, May 27, 2005]



Sec. 1201.126  Final decisions.

    (a) In any action to discipline an employee, except as provided in 
paragraphs (b) or (c) of this section, the administrative law judge, or 
the Board on petition for review, may order a removal, a reduction in 
grade, a debarment (not to exceed five years), a suspension, a 
reprimand, or an assessment of civil penalty not to exceed $1,100. 5 
U.S.C. 1215(a)(3).
    (b) In any action in which the administrative law judge, or the 
Board on petition for review, finds under 5 U.S.C. 1505 that a State or 
local government employee has violated the Hatch Political Activities 
Act and that the employee's removal is warranted, the administrative law 
judge, or the Board on petition for review, will issue a written 
decision notifying the employing agency and the employee that the 
employee must be removed and not reappointed within 18 months of the 
date of the decision. If the agency fails to remove the employee, or if 
it reappoints the employee within 18 months, the administrative law 
judge, or the Board on petition for review, may order the Federal entity 
administering loans or grants to the agency to withhold funds from the 
agency as provided under 5 U.S.C. 1506.
    (c) In any Hatch Act action in which the administrative law judge, 
or the Board on petition for review, finds that a Federal or District of 
Columbia government employee has violated 5 U.S.C. 7323 or 7324 and that 
the violation warrants removal, the administrative law judge, or the 
Board on petition for review, will issue a written decision ordering the 
employee's removal. If the administrative law judge finds a violation of 
5 U.S.C. 7323 or 7324 and determines that removal is not warranted, the 
judge will issue a recommended decision under Sec. 1201.125(c)(1) of 
this part. If the Board finds a violation of 5 U.S.C. 7323 or 7324 and 
determines by unanimous vote that the violation does not warrant 
removal, it will impose instead a penalty of not less than 30 days 
suspension without pay. If the Board finds by majority vote that the 
violation warrants removal, it will order the employee's removal.

[62 FR 48451, Sept. 16, 1997, as amended at 70 FR 30609, May 27, 2005]



Sec. 1201.127  Judicial review.

    (a) An employee subject to a final Board decision imposing 
disciplinary action under 5 U.S.C. 1215 may obtain judicial review of 
the decision in the United States Court of Appeals for the Federal 
Circuit, except as provided under paragraph (b) of this section. 5 
U.S.C. 1215(a)(4).
    (b) A party aggrieved by a determination or order of the Board under 
5 U.S.C. 1505 (governing alleged violations of the Hatch Political 
Activities Act by State or local government employees) may obtain 
judicial review in an appropriate United States district court. 5 U.S.C. 
1508.

                   Special Counsel Corrective Actions



Sec. 1201.128  Filing complaint; serving documents on parties.

    (a) Place of filing. A Special Counsel complaint seeking corrective 
action under 5 U.S.C. 1214 must be filed with the Clerk of the Board. 
After the complaint has been assigned to a judge, subsequent pleadings 
must be filed with the Board office where the judge is located.
    (b) Initial filing and service. The Special Counsel must file two 
copies of the complaint, together with numbered and tabbed exhibits or 
attachments, if any, and a certificate of service listing the respondent 
agency or the agency's representative, and each person on whose behalf 
the corrective action is brought. The certificate of service must show 
the last known address, telephone number, and facsimile number of the 
agency or its representative, and each person on whose behalf the

[[Page 39]]

corrective action is brought. The Special Counsel must serve a copy of 
the complaint on the agency or its representative, and each person on 
whose behalf the corrective action is brought, as shown on the 
certificate of service. The initial filing in a complaint may not be 
submitted in electronic form.
    (c) Subsequent filings and service. Each party must serve on every 
other party or the party's representative one copy of each of its 
pleadings, as defined by Sec. 1201.4(b). A certificate of service 
describing how and when service was made must accompany each pleading. 
Each party is responsible for notifying the Board and the other parties 
in writing of any change in name, address, telephone number, or 
facsimile number of the party or the party's representative.
    (d) Method of filing and service. A filing may be by mail, by 
facsimile, or by personal or commercial delivery to the office 
determined under paragraph (a) of this section. Service may be by mail, 
by facsimile, or by personal or commercial delivery to each party or the 
party's representative, as shown on the certificate of service.
    (e) Electronic filing. All pleadings, other than the complaint, may 
be filed and served in electronic form at the Board's e-Appeal site 
(https://e-appeal.mspb.gov), provided the requirements of Sec. 1201.14 
are satisfied.

[62 FR 48451, Sept. 16, 1997, as amended at 68 FR 59863, Oct. 20, 2003; 
69 FR 57630, Sept. 27, 2004]



Sec. 1201.129  Contents of complaint.

    (a) If the Special Counsel determines that the Board should take 
action to require an agency to correct a prohibited personnel practice 
(or a pattern of prohibited personnel practices) under 5 U.S.C. 
1214(b)(4), he or she must file a written complaint in accordance with 
Sec. 1201.128 of this part, stating with particularity any alleged 
violations of law or regulation, along with the supporting facts.
    (b) If the Special Counsel files a corrective action with the Board 
on behalf of an employee, former employee, or applicant for employment 
who has sought corrective action from the Board directly under 5 U.S.C. 
1214(a)(3), the Special Counsel must provide evidence that the employee, 
former employee, or applicant has consented to the Special Counsel's 
seeking corrective action. 5 U.S.C. 1214(a)(4).
    (c) The judge to whom the complaint is assigned may order the 
Special Counsel and the respondent agency to file briefs, memoranda, or 
both in any corrective action complaint the Special Counsel brings 
before the Board.



Sec. 1201.130  Rights; answer to complaint.

    (a) Rights. (1) A person on whose behalf the Special Counsel brings 
a corrective action has a right to request intervention in the 
proceeding in accordance with the regulations in Sec. 1201.34 of this 
part. The Clerk of the Board shall notify each such person of this 
right.
    (2) When the Special Counsel files a complaint seeking corrective 
action, the judge to whom the complaint is assigned shall provide an 
opportunity for oral or written comments by the Special Counsel, the 
agency involved, and the Office of Personnel Management. 5 U.S.C. 
1214(b)(3)(A).
    (3) The judge to whom the complaint is assigned shall provide a 
person alleged to have been the subject of any prohibited personnel 
practice alleged in the complaint the opportunity to make written 
comments, regardless of whether that person has requested and been 
granted intervenor status. 5 U.S.C. 1214(b)(3)(B).
    (b) Filing and default. An agency named as respondent in a Special 
Counsel corrective action complaint may file an answer with the judge to 
whom the complaint is assigned within 35 days of the date of service of 
the complaint. If the agency fails to answer, the failure may constitute 
waiver of the right to contest the allegations in the complaint. 
Unanswered allegations may be considered admitted and may form the basis 
of the judge's decision.
    (c) Content. An answer must contain a specific denial, admission, or 
explanation of each fact alleged in the complaint. If the respondent 
agency has no knowledge of a fact, it must say so. The respondent may 
include statements of fact and appropriate documentation to support each 
denial or defense. Allegations that are unanswered

[[Page 40]]

or admitted in the answer may be considered true.



Sec. 1201.131  Judge.

    (a) The Board will assign a corrective action complaint brought by 
the Special Counsel under this subpart to a judge, as defined at Sec. 
1201.4(a) of this part, for hearing.
    (b) The judge will issue an initial decision on the complaint 
pursuant to 5 U.S.C. 557. The applicable provisions of Sec. Sec. 
1201.111, 1201.112, and 1201.113 of this part govern the issuance of 
initial decisions, the jurisdiction of the judge, and the finality of 
initial decisions. The initial decision will be subject to the 
procedures for a petition for review by the Board under subpart C of 
this part.

[62 FR 48451, Sept. 16, 1997, as amended at 62 FR 66815, Dec. 22, 1997]



Sec. 1201.132  Final decisions.

    (a) In any Special Counsel complaint seeking corrective action based 
on an allegation that a prohibited personnel practice has been 
committed, the judge, or the Board on petition for review, may order 
appropriate corrective action. 5 U.S.C. 1214(b)(4)(A).
    (b) (1) Subject to the provisions of paragraph (b)(2) of this 
section, in any case involving an alleged prohibited personnel practice 
described in 5 U.S.C. 2302(b)(8), the judge, or the Board on petition 
for review, will order appropriate corrective action if the Special 
Counsel demonstrates that a disclosure described under 5 U.S.C. 
2302(b)(8) was a contributing factor in the personnel action that was 
taken or will be taken against the individual.
    (2) Corrective action under paragraph (b)(1) of this section may not 
be ordered if the agency demonstrates by clear and convincing evidence 
that it would have taken the same personnel action in the absence of 
such disclosure. 5 U.S.C. 1214(b)(4)(B).



Sec. 1201.133  Judicial review.

    An employee, former employee, or applicant for employment who is 
adversely affected by a final Board decision on a corrective action 
complaint brought by the Special Counsel may obtain judicial review of 
the decision in the United States Court of Appeals for the Federal 
Circuit. 5 U.S.C. 1214(c).

                   Special Counsel Requests for Stays



Sec. 1201.134  Deciding official; filing stay request; serving documents on parties.

    (a) Request to stay personnel action. Under 5 U.S.C. 1214(b)(1), the 
Special Counsel may seek to stay a personnel action if the Special 
Counsel determines that there are reasonable grounds to believe that the 
action was taken or will be taken as a result of a prohibited personnel 
practice.
    (b) Deciding official. Any member of the Board may delegate to an 
administrative law judge the authority to decide a Special Counsel 
request for an initial stay. The Board may delegate to a member of the 
Board the authority to rule on any matter related to a stay that has 
been granted to the Special Counsel, including a motion for extension or 
termination of the stay.
    (c) Place of filing. A Special Counsel stay request must be filed 
with the Clerk of the Board.
    (d) Initial filing and service. The Special Counsel must file two 
copies of the request, together with numbered and tabbed exhibits or 
attachments, if any, and a certificate of service listing the respondent 
agency or the agency's representative. The certificate of service must 
show the last known address, telephone number, and facsimile number of 
the agency or its representative. The Special Counsel must serve a copy 
of the request on the agency or its representative, as shown on the 
certificate of service. The initial filing in a request for a stay may 
not be submitted in electronic form.
    (e) Subsequent filings and service. Each party must serve on every 
other party or the party's representative one copy of each of its 
pleadings, as defined by Sec. 1201.4(b). A certificate of service 
describing how and when service was made must accompany each pleading. 
Each party is responsible for notifying the Board and the other parties 
in writing of any change in name, address, telephone number, or 
facsimile number of the party or the party's representative.
    (f) Method of filing and service. A filing may be by mail, by 
facsimile, or by personal or commercial delivery to the Clerk of the 
Board. Service may be by

[[Page 41]]

mail, by facsimile, or by personal or commercial delivery to each party 
or the party's representative, as shown on the certificate of service.
    (g) Electronic filing. All pleadings, other than the complaint, may 
be filed and served in electronic form at the Board's e-Appeal site 
(https://e-appeal.mspb.gov), provided the requirements of Sec. 1201.14 
are satisfied.

[62 FR 48451, Sept. 16, 1997, as amended at 63 FR 42686, Aug. 11, 1998; 
68 FR 59863, Oct. 20, 2003; 69 FR 57630, Sept. 27, 2004]



Sec. 1201.135  Contents of stay request.

    The Special Counsel, or that official's representative, must sign 
each stay request, and must include the following information in the 
request:
    (a) The names of the parties;
    (b) The agency and officials involved;
    (c) The nature of the action to be stayed;
    (d) A concise statement of facts justifying the charge that the 
personnel action was or will be the result of a prohibited personnel 
practice; and
    (e) The laws or regulations that were violated, or that will be 
violated if the stay is not issued.



Sec. 1201.136  Action on stay request.

    (a) Initial stay. A Special Counsel request for an initial stay of 
45 days will be granted within three working days after the filing of 
the request, unless, under the facts and circumstances, the requested 
stay would not be appropriate. Unless the stay is denied within the 3-
day period, it is considered granted by operation of law.
    (b) Extension of stay. Upon the Special Counsel's request, a stay 
granted under 5 U.S.C. 1214(b)(1)(A) may be extended for an appropriate 
period of time, but only after providing the agency with an opportunity 
to comment on the request. Any request for an extension of a stay under 
5 U.S.C. 1214(b)(1)(B) must be received by the Board and the agency no 
later than 15 days before the expiration date of the stay. A brief 
describing the facts and any relevant legal authority that should be 
considered must accompany the request for extension. Any response by the 
agency must be received by the Board no later than 8 days before the 
expiration date of the stay.
    (c) Evidence of compliance with a stay. Within five working days 
from the date of a stay order or an order extending a stay, the agency 
ordered to stay a personnel action must file evidence setting forth 
facts and circumstances demonstrating compliance with the order.
    (d) Termination of stay. A stay may be terminated at any time, 
except that a stay may not be terminated:
    (1) On the motion of an agency, or on the deciding official's own 
motion, without first providing notice and opportunity for oral or 
written comments to the Special Counsel and the individual on whose 
behalf the stay was ordered; or
    (2) On the motion of the Special Counsel without first providing 
notice and opportunity for oral or written comments to the individual on 
whose behalf the stay was ordered. 5 U.S.C. 1214(b)(1)(D).
    (e) Additional information. At any time, where appropriate, the 
Special Counsel, the agency, or both may be required to appear and 
present further information or explanation regarding a request for a 
stay, to file supplemental briefs or memoranda, or to supply factual 
information needed to make a decision regarding a stay.

[62 FR 48451, Sept. 16, 1997, as amended at 63 FR 42686, Aug. 11, 1998]

                Actions Against Administrative Law Judges



Sec. 1201.137  Covered actions; filing complaint; serving documents on parties.

    (a) Covered actions. The jurisdiction of the Board under 5 U.S.C. 
7521 and this subpart with respect to actions against administrative law 
judges is limited to proposals by an agency to take any of the following 
actions against an administrative law judge:
    (1) Removal;
    (2) Suspension;
    (3) Reduction in grade;
    (4) Reduction in pay; and
    (5) Furlough of 30 days or less.
    (b) Place of filing. To initiate an action against an administrative 
law judge under this subpart, an agency must file a complaint with the 
Clerk of the Board.

[[Page 42]]

    (c) Initial filing and service. The agency must file two copies of 
the complaint, together with numbered and tabbed exhibits or 
attachments, if any, and a certificate of service listing each party or 
the party's representative. The certificate of service must show the 
last known address, telephone number, and facsimile number of each party 
or representative. The agency must serve a copy of the complaint on each 
party or the party's representative, as shown on the certificate of 
service. The initial filing in a complaint may not be submitted in 
electronic form.
    (d) Subsequent filings and service. Each party must serve on every 
other party or the party's representative one copy of each of its 
pleadings, as defined by Sec. 1201.4(b). A certificate of service 
describing how and when service was made must accompany each pleading. 
Each party is responsible for notifying the Board and the other parties 
in writing of any change in name, address, telephone number, or 
facsimile number of the party or the party's representative.
    (e) Method of filing and service. A filing may be by mail, by 
facsimile, or by personal or commercial delivery to the Clerk of the 
Board. Service may be by mail, by facsimile, or by commercial or 
personal delivery to each party or the party's representative, as shown 
on the certificate of service.
    (f) Electronic filing. All pleadings, other than the complaint, may 
be filed and served in electronic form at the Board's e-Appeal site 
(https://e-appeal.mspb.gov), provided the requirements of Sec. 1201.14 
are satisfied.

[62 FR 48451, Sept. 16, 1997, as amended at 68 FR 59863, Oct, 20, 2003; 
69 FR 57630, Sept. 27, 2004]



Sec. 1201.138  Contents of complaint.

    A complaint filed under this section must describe with 
particularity the facts that support the proposed agency action.



Sec. 1201.139  Rights; answer to complaint.

    (a) Responsibilities of Clerk of the Board. The Clerk of the Board 
shall furnish a copy of the applicable Board regulations to each 
administrative law judge named as a respondent in the complaint and 
shall inform each respondent of his or her rights under paragraph (b) of 
this section and the requirements regarding the timeliness and content 
of an answer to the agency's complaint under paragraphs (c) and (d), 
respectively, of this section.
    (b) Rights. When an agency files a complaint proposing an action 
against an administrative law judge under 5 U.S.C. 7521 and this 
subpart, the administrative law judge has the right:
    (1) To file an answer, supported by affidavits and documentary 
evidence;
    (2) To be represented;
    (3) To a hearing on the record before an administrative law judge;
    (4) To a written decision, issued at the earliest practicable date, 
in which the administrative law judge states the reasons for his or her 
decision; and
    (5) To a copy of the administrative law judge's decision and 
subsequent final decision by the Board, if any.
    (c) Filing and default. A respondent named in an agency complaint 
may file an answer with the Clerk of the Board within 35 days of the 
date of service of the complaint. If a respondent fails to answer, the 
failure may constitute waiver of the right to contest the allegations in 
the complaint. Unanswered allegations may be considered admitted and may 
form the basis of the administrative law judge's decision.
    (d) Content. An answer must contain a specific denial, admission, or 
explanation of each fact alleged in the complaint. If the respondent has 
no knowledge of a fact, he or she must say so. The respondent may 
include statements of fact and appropriate documentation to support each 
denial or defense. Allegations that are unanswered or admitted in the 
answer may be considered true.



Sec. 1201.140  Judge; requirement for finding of good cause.

    (a) Judge. (1) An administrative law judge will hear an action 
brought by an employing agency under this subpart against a respondent 
administrative law judge.
    (2) The judge will issue an initial decision pursuant to 5 U.S.C. 
557. The applicable provisions of Sec. Sec. 1201.111, 1201.112, and 
1201.113 of this part govern

[[Page 43]]

the issuance of initial decisions, the jurisdiction of the judge, and 
the finality of initial decisions. The initial decision will be subject 
to the procedures for a petition for review by the Board under subpart C 
of this part.
    (b) Requirement for finding of good cause. A decision on a proposed 
agency action under this subpart against an administrative law judge 
will authorize the agency to take a disciplinary action, and will 
specify the penalty to be imposed, only after a finding of good cause as 
required by 5 U.S.C. 7521 has been made.



Sec. 1201.141  Judicial review.

    An administrative law judge subject to a final Board decision 
authorizing a proposed agency action under 5 U.S.C. 7521 may obtain 
judicial review of the decision in the United States Court of Appeals 
for the Federal Circuit. 5 U.S.C. 7703.



Sec. 1201.142  Actions filed by administrative law judges.

    An administrative law judge who alleges a constructive removal or 
other action by an agency in violation of 5 U.S.C. 7521 may file a 
complaint with the Board under this subpart. The filing and serving 
requirements of 5 CFR 1201.37 apply. Such complaints shall be 
adjudicated in the same manner as agency complaints under this subpart.

[71 FR 34232, June 14, 2006]

                Removal From the Senior Executive Service



Sec. 1201.143  Right to hearing; filing complaint; serving documents on parties.

    (a) Right to hearing. If an agency proposes to remove a career 
appointee from the Senior Executive Service under 5 U.S.C. 3592(a) (2) 
and 5 CFR 359.502, and to place that employee in another civil service 
position, the appointee may request an informal hearing before an 
official designated by the Board. Under 5 CFR 359.502, the agency 
proposing the removal must provide the appointee 30 days advance notice 
and must advise the appointee of the right to request a hearing. If the 
appointee files the request at least 15 days before the effective date 
of the proposed removal, the request will be granted.
    (b) Place of filing. A request for an informal hearing under 
paragraph (a) of this section must be filed with the Clerk of the Board. 
After the request has been assigned to a judge, subsequent pleadings 
must be filed with the Board office where the judge is located.
    (c) Initial filing and service. The appointee must file two copies 
of the request, together with numbered and tabbed exhibits or 
attachments, if any, and a certificate of service listing the agency 
proposing the appointee's removal or the agency's representative. The 
certificate of service must show the last known address, telephone 
number, and facsimile number of the agency or its representative. The 
appointee must serve a copy of the request on the agency or its 
representative, as shown on the certificate of service. The initial 
filing may not be submitted in electronic form.
    (d) Subsequent filings and service. Each party must serve on every 
other party or the party's representative one copy of each of its 
pleadings, as defined by Sec. 1201.4(b). A certificate of service 
describing how and when service was made must accompany each pleading. 
Each party is responsible for notifying the Board and the other parties 
in writing of any change in name, address, telephone number, or 
facsimile number of the party or the party's representative.
    (e) Method of filing and service. A filing may be by mail, by 
facsimile, or by personal or commercial delivery, to the office 
determined under paragraph (b) of this section. Service may be by mail, 
by facsimile, or by personal or commercial delivery to each party or the 
party's representative, as shown on the certificate of service.
    (f) Electronic filing. All pleadings, other than the complaint, may 
be filed and served in electronic form at the Board's e-Appeal site 
(https://e-appeal.mspb.gov), provided the requirements of Sec. 1201.14 
are satisfied.

[62 FR 48451, Sept. 16, 1997, as amended at 68 FR 59864, Oct, 20, 2003; 
69 FR 57630, Sept. 27, 2004]

[[Page 44]]



Sec. 1201.144  Hearing procedures; referring the record.

    (a) The official designated to hold an informal hearing requested by 
a career appointee whose removal from the Senior Executive Service has 
been proposed under 5 U.S.C. 3592(a)(2) and 5 CFR 359.502 will be a 
judge, as defined at Sec. 1201.4(a) of this part.
    (b) The appointee, the appointee's representative, or both may 
appear and present arguments in an informal hearing before the judge. A 
verbatim record of the proceeding will be made. The appointee has no 
other procedural rights before the judge or the Board.
    (c) The judge will refer a copy of the record to the Special 
Counsel, the Office of Personnel Management, and the employing agency 
for whatever action may be appropriate.



Sec. 1201.145  No appeal.

    There is no right under 5 U.S.C. 7703 to appeal the agency's action 
or any action by the judge or the Board in cases arising under Sec. 
1201.143(a) of this part. The removal action will not be delayed as a 
result of the hearing.

                     Requests for Protective Orders



Sec. 1201.146  Requests for protective orders by the Special Counsel.

    (a) Under 5 U.S.C. 1204(e)(1)(B), the Board may issue any order that 
may be necessary to protect a witness or other individual from 
harassment during an investigation by the Special Counsel or during the 
pendency of any proceeding before the Board, except that an agency, 
other than the Office of the Special Counsel, may not request a 
protective order with respect to an investigation by the Special Counsel 
during such investigation.
    (b) Any motion by the Special Counsel requesting a protective order 
must include a concise statement of reasons justifying the motion, 
together with any relevant documentary evidence. Where the request is 
made in connection with a pending Special Counsel proceeding, the motion 
must be filed as early in the proceeding as practicable.
    (c) Where there is a pending Special Counsel proceeding, a Special 
Counsel motion requesting a protective order must be filed with the 
judge conducting the proceeding, and the judge will rule on the motion. 
Where there is no pending Special Counsel proceeding, a Special Counsel 
motion requesting a protective order must be filed with the Clerk of the 
Board, and the Board will designate a judge, as defined at Sec. 
1201.4(a) of this part, to rule on the motion.



Sec. 1201.147  Requests for protective orders by persons other than the Special Counsel.

    Requests for protective orders by persons other than the Special 
Counsel in connection with pending original jurisdiction proceedings are 
governed by Sec. 1201.55(d) of this part.



Sec. 1201.148  Enforcement of protective orders.

    A protective order issued by a judge or the Board under this subpart 
may be enforced in the same manner as provided under subpart F of this 
part for Board final decisions and orders.



 Subpart E_Procedures for Cases Involving Allegations of Discrimination



Sec. 1201.151  Scope and policy.

    (a) Scope. (1) The rules in this subpart implement 5 U.S.C. 7702. 
They apply to any case in which an employee or applicant for employment 
alleges that a personnel action appealable to the Board was based, in 
whole or in part, on prohibited discrimination.
    (2) ``Prohibited discrimination,'' as that term is used in this 
subpart, means discrimination prohibited by:
    (i) Section 717 of the Civil Rights Act of 1964, as amended (42 
U.S.C. 2000e-16(a));
    (ii) Section 6(d) of the Fair Labor Standards Act of 1938, as 
amended (29 U.S.C. 206(d));
    (iii) Section 501 of the Rehabilitation Act of 1973, as amended (29 
U.S.C. 791);
    (iv) Sections 12 and 15 of the Age Discrimination in Employment Act 
of 1967, as amended (29 U.S.C. 631, 633a); or
    (v) Any rule, regulation, or policy directive prescribed under any 
provision of law described in paragraphs (a)(2) (i) through (iv) of this 
section.
    (b) Policy. The Board's policy is to adjudicate impartially, 
thoroughly, and

[[Page 45]]

fairly all issues raised under this subpart.



Sec. 1201.152  Compliance with subpart B procedures.

    Unless this subpart expressly provides otherwise, all actions 
involving allegations of prohibited discrimination must comply with the 
regulations that are included in subpart B of this part.



Sec. 1201.153  Contents of appeal.

    (a) Contents. An appeal raising issues of prohibited discrimination 
must comply with Sec. 1201.24 of this part, with the following 
exceptions:
    (1) The appeal must state that there was discrimination in 
connection with the matter appealed, and it must state specifically how 
the agency discriminated against the appellant; and
    (2) The appeal must state whether the appellant has filed a formal 
discrimination complaint or a grievance with any agency. If he or she 
has done so, the appeal must state the date on which the appellant filed 
the complaint or grievance, and it must describe any action that the 
agency took in response to the complaint or grievance.
    (b) Use of Board form or Internet filing option. An appellant may 
comply with paragraph (a) of this section by completing MSPB Form 185, 
or by completing all requests for information marked as required at the 
e-Appeal site (https://e-appeal.mspb.gov). MSPB Form 185 can be accessed 
at the Board's Web site (http://www.mspb.gov).

[54 FR 53504, Dec. 29, 1989, as amended at 68 FR 59864, Oct. 20, 2003; 
69 FR 57631, Sept. 27, 2004]



Sec. 1201.154  Time for filing appeal; closing record in cases involving grievance decisions.

    Appellants who file appeals raising issues of prohibited 
discrimination in connection with a matter otherwise appealable to the 
Board must comply with the following time limits:
    (a) Where the appellant has been subject to an action appealable to 
the Board, he or she may either file a timely complaint of 
discrimination with the agency or file an appeal with the Board no later 
than 30 days after the effective date, if any, of the action being 
appealed, or 30 days after the date of receipt of the agency's decision 
on the appealable action, whichever is later.
    (b) If the appellant has filed a timely formal complaint of 
discrimination with the agency:
    (1) An appeal must be filed within 30 days after the appellant 
receives the agency resolution or final decision on the discrimination 
issue; or
    (2) If the agency has not resolved the matter or issued a final 
decision on the formal complaint within 120 days, the appellant may 
appeal the matter directly to the Board at any time after the expiration 
of 120 calendar days.
    (c) If the appellant files an appeal prematurely under this subpart, 
the judge will dismiss the appeal without prejudice to its later 
refiling under Sec. 1201.22 of this part. If holding the appeal for a 
short time would allow it to become timely, the judge may hold the 
appeal rather than dismiss it.
    (d) This paragraph does not apply to employees of the Postal Service 
or to other employees excluded from the coverage of the federal labor-
management relations laws at chapter 71 of title 5, United States Code. 
If the appellant has filed a grievance with the agency under a 
negotiated grievance procedure, he may ask the Board to review the final 
decision on the grievance if he alleges before the Board that he is the 
victim of prohibited discrimination. Usually, the final decision on a 
grievance is the decision of an arbitrator. A full description of an 
individual's right to pursue a grievance and to request Board review of 
a final decision on the grievance is found at 5 U.S.C. 7121 and 7702. 
The appellant's request for Board review must be filed within 35 days 
after the date of issuance of the decision or, if the appellant shows 
that the decision was received more than 5 days after the date of 
issuance, within 30 days after the date the appellant received the 
decision. The appellant must file the request with the Clerk of the 
Board, Merit Systems Protection Board, Washington, DC 20419. The request 
for review must contain:
    (1) A statement of the grounds on which review is requested;

[[Page 46]]

    (2) References to evidence of record or rulings related to the 
issues before the Board;
    (3) Arguments in support of the stated grounds that refer 
specifically to relevant documents, and that include relevant citations 
of authority; and
    (4) Legible copies of the final grievance or arbitration decision, 
the agency decision to take the action, and other relevant documents. 
Those documents may include a transcript or tape recording of the 
hearing.
    (e) The record will close upon expiration of the period for filing 
the response to the petition for review, or to the brief on 
intervention, if any, or on any other date the Board sets for this 
purpose. Once the record closes, no additional evidence or argument will 
be accepted unless the party submitting it shows that the evidence was 
not readily available before the record closed.

[54 FR 53504, Dec. 29, 1989, as amended at 59 FR 31109, June 17, 1994; 
62 FR 59992, Nov. 6, 1997; 65 FR 25624, May 3, 2000]



Sec. 1201.155  Remand of allegations of discrimination.

    If the parties file a written agreement that the discrimination 
issue should be remanded to the agency for consideration, and if the 
judge determines that action would be in the interest of justice, the 
judge may take that action. The remand order will specify a time period 
within which the agency action must be completed. In no instance will 
that time period exceed 120 days. While the issue is pending with the 
agency, the judge will retain jurisdiction over the appeal.



Sec. 1201.156  Time for processing appeals involving allegations of discrimination.

    (a) Issue raised in appeal. When an appellant alleges prohibited 
discrimination in the appeal, the judge will decide both the issue of 
discrimination and the appealable action within 120 days after the 
appeal is filed.
    (b) Issue not raised in appeal. When an appellant has not alleged 
prohibited discrimination in the appeal, but has raised the issue later 
in the proceeding, the judge will decide both the issue of 
discrimination and the appealable action within 120 days after the issue 
is raised.
    (c) Discrimination issue remanded to agency. When the judge remands 
an issue of discrimination to the agency, adjudication will be completed 
within 120 days after the agency completes its action and returns the 
case to the Board.



Sec. 1201.157  Notice of right to judicial review.

    Any final decision of the Board under 5 U.S.C. 7702 will notify the 
appellant of his or her right, within 30 days after receiving the 
Board's final decision, to petition the Equal Employment Opportunity 
Commission to consider the Board's decision, or to file a civil action 
in an appropriate United States district court. If an appellant elects 
to waive the discrimination issue, an appeal may be filed with the 
United States Court of Appeals for the Federal Circuit as stated in 
Sec. 1201.120 of this part.

[54 FR 53504, Dec. 29, 1989, as amended at 63 FR 41179, Aug. 3, 1998]

                        Review of Board Decision



Sec. 1201.161  Action by the Equal Employment Opportunity Commission; 

judicial review.

    (a) Time limit for determination. In cases in which an appellant 
petitions the Equal Employment Opportunity Commission (Commission) for 
consideration of the Board's decision under 5 U.S.C. 7702(b)(2), the 
Commission will determine, within 30 days after the date of the 
petition, whether it will consider the decision.
    (b) Judicial review. The Board's decision will become judicially 
reviewable on:
    (1) The date on which the decision is issued, if the appellant does 
not file a petition with the Commission under 5 U.S.C. 7702(b)(1); or
    (2) The date of the Commission's decision that it will not consider 
the petition filed under 5 U.S.C. 7702(b)(2).
    (c) Commission processing and time limits. If the Commission decides 
to consider the decision of the Board, within 60 days after making its 
decision it will complete its consideration and either:

[[Page 47]]

    (1) Concur in the decision of the Board; or
    (2) Issue in writing and forward to the Board for its action under 
Sec. 1201.162 of this subpart another decision, which differs from the 
decision of the Board to the extent that the Commission finds that, as a 
matter of law:
    (i) The decision of the Board constitutes an incorrect 
interpretation of any provision of any law, rule, regulation, or policy 
directive related to prohibited discrimination; or
    (ii) The evidence in the record as a whole does not support the 
decision involving that provision.
    (d) Transmittal of record. The Board will transmit a copy of its 
record to the Commission upon request.
    (e) Development of additional evidence. When asked by the Commission 
to do so, the Board or a judge will develop additional evidence 
necessary to supplement the record. This action will be completed within 
a period that will permit the Commission to make its decision within the 
statutory 60-day time limit referred to in paragraph (c) of this 
section. The Board or the judge may schedule additional proceedings if 
necessary in order to comply with the Commission's request.
    (f) Commission concurrence in Board decision. If the Commission 
concurs in the decision of the Board under 5 U.S.C. 7702(b)(3)(A), the 
appellant may file suit in an appropriate United States district court.



Sec. 1201.162  Board action on the Commission decision; judicial review.

    (a) Board decision. Within 30 days after receipt of a decision of 
the Commission issued under 1201.161(c)(2), the Board shall consider the 
decision and:
    (1) Concur and adopt in whole the decision of the Commission; or
    (2) To the extent that the Board finds that, as a matter of law:
    (i) The Commission decision is based on an incorrect interpretation 
of any provision of any civil service law, rule, regulation, or policy 
directive, or
    (ii) The evidence in the record as a whole does not support the 
Commission decision involving that provision, it may reaffirm the 
decision of the Board. In doing so, it may make revisions in the 
decision that it determines are appropriate.
    (b) Judicial review. If the Board concurs in or adopts the decision 
of the Commission under paragraph (a)(1) of this section, the decision 
of the Board is a judicially reviewable action.

                              Special Panel



Sec. 1201.171  Referral of case to Special Panel.

    If the Board reaffirms its decision under Sec. 1201.162(a)(2) of 
this part with or without modification, it will certify the matter 
immediately to a Special Panel established under 5 U.S.C. 7702(d). Upon 
certification, the Board, within 5 days (excluding Saturdays, Sundays, 
and Federal holidays), will transmit the administrative record in the 
proceeding to the Chairman of the Special Panel and to the Commission. 
That record will include the following:
    (a) The factual record compiled under this section, which will 
include a transcript of any hearing;
    (b) The decisions issued by the Board and the Commission under 5 
U.S.C. 7702; and
    (c) A transcript of oral arguments made, or legal briefs filed, 
before the Board or the Commission.



Sec. 1201.172  Organization of Special Panel; designation of members.

    (a) A Special Panel is composed of:
    (1) A Chairman, appointed by the President with the advice and 
consent of the Senate, whose term is six (6) years;
    (2) One member of the Board, designated by the Chairman of the Board 
each time a Panel is convened;
    (3) One member of the Commission, designated by the Chairman of the 
Commission each time a Panel is convened.
    (b) Designation of Special Panel members--(1) Time of designation. 
Within 5 days of certification of a case to a Special Panel, the 
Chairman of Board and the Chairman of the Commission each will designate 
one member from his or her agency to serve on the Special Panel.
    (2) Manner of designation. Letters designating the Panel members 
will be served on the Chairman of the Panel and on the parties to the 
appeal.

[[Page 48]]



Sec. 1201.173  Practices and procedures of Special Panel.

    (a) Scope. The rules in this subpart apply to proceedings before a 
Special Panel.
    (b) Suspension of rules. Unless a rule is required by statute, the 
Chairman of a Special Panel may suspend the rule, in the interest of 
expediting a decision or for other good cause shown, and may conduct the 
proceedings in a manner he or she directs. The Chairman may take this 
action at the request of a party, or on his or her own motion.
    (c) Time limit for proceedings. In accordance with 5 U.S.C. 
7702(d)(2)(A), the Special Panel will issue a decision within 45 days 
after a matter has been certified to it.
    (d) Administrative assistance to the Special Panel. (1) The Board 
and the Commission will provide the Panel with the administrative 
resources that the Chairman of the Special Panel determines are 
reasonable and necessary.
    (2) Assistance will include, but is not limited to, processing 
vouchers for pay and travel expenses.
    (3) The Board and the Commission are responsible for all 
administrative costs the Special Panel incurs, and, to the extent 
practicable, they will divide equally the costs of providing 
administrative assistance. If the Board and the Commission disagree on 
the manner in which costs are to be divided, the Chairman of the Special 
Panel will resolve the disagreement.
    (e) Maintaining the official record. The Board will maintain the 
official record of the appeal. It will transmit two copies of each 
submission that is filed to each member of the Special Panel in an 
expeditious manner.
    (f) Filing and service of pleadings. (1) The parties must file the 
original and six copies of each submission with the Clerk, Merit Systems 
Protection Board, 1615 M Street, NW., Washington, DC 20419. The Office 
of the Clerk will serve one copy of each submission on the other 
parties.
    (2) A certificate of service specifying how and when service was 
made must accompany all submissions of the parties.
    (3) Service may be made by mail or by personal delivery during the 
Board's normal business hours (8:30 a.m. to 5:00 p.m.). Because of the 
short statutory time limit for processing these cases, parties must file 
their submissions by overnight Express Mail, provided by the U.S. Postal 
Service, if they file their submissions by mail.
    (4) A submission filed by Express Mail is considered to have been 
filed on the date of the Express Mail Order. A submission that is 
delivered personally is considered to have been filed on the date the 
Office of the Clerk of the Board receives it.
    (g) Briefs and responsive pleadings. If the parties wish to submit 
written argument, they may file briefs with the Special Panel within 15 
days after the date of the Board's certification order. Because of the 
short statutory time limit for processing these cases, the Special Panel 
ordinarily will not permit responsive pleadings.
    (h) Oral argument. The parties have the right to present oral 
argument. Parties wishing to exercise this right must indicate this 
desire when they file their briefs or, if no briefs are filed, within 15 
days after the date of the Board's certification order. Upon receiving a 
request for argument, the Chairman of the Special Panel will determine 
the time and place for argument and the amount of time to be allowed 
each side, and he or she will provide this information to the parties.
    (i) Postargument submission. Because of the short statutory time 
limit for processing these cases, the parties may not file postargument 
submissions unless the Chairman of the Special Panel permits those 
submissions.
    (j) Procedural matters. Any procedural matters not addressed in 
these regulations will be resolved by written order of the Chairman of 
the Special Panel.
    (k) Electronic filing. Pleadings in matters before the Special Panel 
may not be filed or served in electronic form.

[54 FR 53504, Dec. 29, 1989, as amended at 65 FR 48885, Aug. 10, 2000; 
68 FR 59864, Oct. 20, 2003; 69 FR 57631, Sept. 27, 2004]



Sec. 1201.174  Enforcing the Special Panel decision.

    The Board, upon receipt of the decision of the Special Panel, will 
order the agency concerned to take any action appropriate to carry out 
the decision of

[[Page 49]]

the Panel. The Board's regulations regarding enforcement of a final 
order of the Board apply to this matter. These regulations are set out 
in subpart F of this part.



Sec. 1201.175  Judicial review of cases decided under 5 U.S.C. 7702.

    (a) Place and type of review. The appropriate United States district 
court is authorized to conduct all judicial review of cases decided 
under 5 U.S.C. 7702. Those cases include appeals from actions taken 
under the following provisions: Section 717(c) of the Civil Rights Act 
of 1964, as amended (42 U.S.C. 2000e-16(c)); section 15(c) of the Age 
Discrimination in Employment Act of 1967, as amended (29 U.S.C. 
633a(c)); and section 15(b) of the Fair Labor Standards Act of 1938, as 
amended (29 U.S.C. 216(b)).
    (b) Time for filing request. Regardless of any other provision of 
law, requests for judicial review of all cases decided under 5 U.S.C. 
7702 must be filed within 30 days after the appellant received notice of 
the judicially reviewable action.



           Subpart F_Enforcement of Final Decisions and Orders



Sec. 1201.181  Authority and explanation.

    (a) Under 5 U.S.C. 1204(a)(2), the Board has the authority to order 
any Federal agency or employee to comply with decisions and orders 
issued under its jurisdiction, and the authority to enforce compliance 
with its orders and decisions. The parties are expected to cooperate 
fully with each other so that compliance with the Board's orders and 
decisions can be accomplished promptly and in accordance with the laws, 
rules, and regulations that apply to individual cases. The Board's 
decisions and orders will contain a notice of the Board's enforcement 
authority.
    (b) In order to avoid unnecessary petitions under this subpart, the 
agency must inform the appellant promptly of the actions it takes to 
comply, and it must tell the appellant when it believes it has completed 
its compliance. The appellant must provide all necessary information 
that the agency requests in order to comply, and, if not otherwise 
notified, he or she should, from time to time, ask the agency about its 
progress.



Sec. 1201.182  Petition for enforcement.

    (a) Appellate jurisdiction. Any party may petition the Board for 
enforcement of a final decision or order issued under the Board's 
appellate jurisdiction. The petition must be filed promptly with the 
regional or field office that issued the initial decision; a copy of it 
must be served on the other party or that party's representative; and it 
must describe specifically the reasons the petitioning party believes 
there is noncompliance. The petition also must include the date and 
results of any communications regarding compliance. Any petition for 
enforcement that is filed more than 30 days after the date of service of 
the agency's notice that it has complied must contain a statement and 
evidence showing good cause for the delay and a request for an extension 
of time for filing the petition.
    (b) Original jurisdiction. Any party seeking enforcement of a final 
Board decision or order issued under its original jurisdiction must file 
a petition for enforcement with the Clerk of the Board and must serve a 
copy of that petition on the other party or that party's representative. 
The petition must describe specifically the reasons why the petitioning 
party believes there is noncompliance.
    (c) Petition by an employee other than a party. (1) Under 5 U.S.C. 
1204(e)(2)(B), any employee who is aggrieved by the failure of any other 
employee to comply with an order of the Board may petition the Board for 
enforcement. Except for a petition filed under paragraph (c)(2) or 
(c)(3) of this section, the Board will entertain a petition for 
enforcement from an aggrieved employee who is not a party only if the 
employee seeks and is granted party status as a permissive intervenor 
under Sec. 1201.34(c) of this part. The employee must file a motion to 
intervene at the time of filing the petition for enforcement. The 
petition for enforcement must describe specifically why the petitioner 
believes there is noncompliance and in what way the petitioner is 
aggrieved by the

[[Page 50]]

noncompliance. The motion to intervene will be considered in accordance 
with Sec. 1201.34(c) of this part.
    (2) Under Sec. 1201.33(c) of this part, a nonparty witness who has 
obtained an order from a judge that his or her employing agency provide 
the witness with official time may petition the Board for enforcement of 
the order.
    (3) Under Sec. 1201.55(d) of this part, a nonparty witness or other 
individual who has obtained a protective order from a judge during the 
course of a Board proceeding for protection from harassment may petition 
the Board for enforcement of the order.
    (4) A petition for enforcement under paragraph (c)(1), (c)(2), or 
(c)(3) of this section must be filed promptly with the regional or field 
office that issued the order or, if the order was issued by the Board, 
with the Clerk of the Board. The petitioner must serve a copy of the 
petition on each party or the party's representative. If the petition is 
filed under paragraph (c)(1) of this section, the motion to intervene 
must be filed and served with the petition.

[54 FR 53504, Dec. 29, 1989, as amended at 59 FR 65235, Dec. 19, 1994; 
62 FR 48935, Sept. 18, 1997]



Sec. 1201.183  Procedures for processing petitions for enforcement.

    (a) Initial Processing. (1) When a party has filed a petition for 
enforcement of a final decision, the alleged noncomplying party must 
file one of the following within 15 days of the date of service of the 
petition:
    (i) Evidence of compliance, including a narrative explanation of the 
calculation of back pay and other benefits, and supporting documents;
    (ii) Evidence as described in paragraph (a)(1)(i) of this section of 
the compliance actions that the party has completed, and a statement of 
the actions that are in process and the actions that remain to be taken, 
along with a reasonable schedule for full compliance; or
    (iii) A statement showing good cause for the failure to comply 
completely with the decision of the Board.

The party that filed the petition may respond to that submission within 
10 days after the date of service of the submission. The parties must 
serve copies of their pleadings on each other as required under Sec. 
1201.26(b)(2) of this part.
    (2) If the agency is the alleged noncomplying party, it shall submit 
the name and address of the agency official charged with complying with 
the Board's order, even if the agency asserts it has fully complied. In 
the absence of this information, the Board will presume that the highest 
ranking appropriate agency official who is not appointed by the 
President by and with the consent of the Senate is charged with 
compliance.
    (3) The judge may convene a hearing if one is necessary to resolve 
matters at issue.
    (4) If the judge finds that there has been compliance or a good 
faith effort to take all actions required to be in compliance with the 
final decision, he or she will state those findings in a decision. That 
decision will be subject to the procedures for petitions for review by 
the Board under subpart C of this part, and subject to judicial review 
under Sec. 1201.120 of this part.
    (5) If the judge finds that:
    (i) The alleged noncomplying party has not taken, or has not made a 
good faith effort to take, any action required to be in compliance with 
the final decision, or
    (ii) The party has taken or made a good faith effort to take one or 
more, but not all, actions required to be in compliance with the final 
decision; he or she will issue a recommendation containing his or her 
findings, a statement of the actions required by the party to be in 
compliance with the final decision, and a recommendation that the Board 
enforce the final decision.
    (6) If a recommendation described under paragraph (a)(5) of this 
section is issued, the alleged noncomplying party must do one of the 
following:
    (i) If it decides to take the actions required by the 
recommendation, it must submit to the Clerk of the Board, within 15 days 
after the issuance of the recommendation, evidence that it has taken 
those actions.

[[Page 51]]

    (ii) If it decides not to take any of the actions required by the 
recommendation, it must file a brief supporting its nonconcurrence in 
the recommendation. The brief must be filed with the Clerk of the Board 
within 30 days after the recommendation is issued and, if it is filed by 
the agency, it must identify by name, title, and grade the agency 
official responsible for the failure to take the actions required by the 
recommendation for compliance.
    (iii) If the party decides to take one or more, but not all, actions 
required by the recommendation, it must submit both evidence of the 
actions it has taken and, with respect to the actions that it has not 
taken, a brief supporting its disagreement with the recommendation. The 
evidence and brief must be filed with the Clerk of the Board within 30 
days after issuance of the recommendation and, if it is filed by the 
agency, it must contain the identifying information required by 
paragraph (a)(6)(ii) of this section.
    (7) The petitioner may file a brief that responds to the submission 
described in paragraph (a)(6) of this section, and that asks the Board 
to review any finding in the recommendation, made under paragraph 
(a)(5)(ii) of this section, that the other party is in partial 
compliance with the final decision. The petitioner must file this brief 
with the Clerk of the Board within 20 days of the date of service of the 
submission described in paragraph (a)(6) of this section.
    (b) Consideration by the Board. (1) The Board will consider the 
recommendation, along with the submissions of the parties, promptly. 
When appropriate, the Board may require the alleged noncomplying party, 
or that party's representative, to appear before the Board to show why 
sanctions should not be imposed under 5 U.S.C. 1204(a)(2) and 
1204(e)(2)(A). The Board also may require the party or its 
representative to make this showing in writing, or to make it both 
personally and in writing.
    (2) The Board may hold a hearing on an order to show cause, or it 
may issue a decision without a hearing.
    (3) The Board's final decision on the issues of compliance is 
subject to judicial review under Sec. 1201.120 of this part.
    (c) Certification to the Comptroller General. When appropriate, the 
Board may certify to the Comptroller General of the United States, under 
5 U.S.C. 1204(e)(2)(A), that no payment is to be made to a certain 
Federal employee. This order may apply to any Federal employee, other 
than a Presidential appointee subject to confirmation by the Senate, who 
is found to be in noncompliance with the Board's order.
    (d) Effect of Special Counsel's action or failure to act. Failure by 
the Special Counsel to file a complaint under 5 U.S.C. 1215(a)(1)(C) and 
subpart D of this part will not preclude the Board from taking action 
under this subpart.

[54 FR 53504, Dec. 29, 1989, as amended at 63 FR 41179, Aug. 3, 1998]



                      Subpart G_Savings Provisions



Sec. 1201.191  Savings provisions.

    (a) Civil Service Reform Act of 1978 (Pub.L. 95-454)--(1) Scope. All 
executive orders, rules and regulations relating to the Federal service 
that were in effect prior to the effective date of the Civil Service 
Reform Act shall continue in effect and be applied by the Board in its 
adjudications until modified, terminated, superseded, or repealed by the 
President, Office of Personnel Management, the Merit Systems Protection 
Board, the Equal Employment Opportunity Commission, or the Federal Labor 
Relations Authority, as appropriate.
    (2) Administrative proceedings and appeals therefrom. No provision 
of the Civil Service Reform Act shall be applied by the Board in such a 
way as to affect any administrative proceeding pending at the effective 
date of such provision. ``Pending'' is considered to encompass existing 
agency proceedings, and appeals before the Board or its predecessor 
agencies, that were subject to judicial review or under judicial review 
on January 11, 1979, the date on which the Act became effective. An 
agency proceeding is considered to exist once the employee has received 
notice of the proposed action.
    (3) Explanation. Mr. X was advised of agency's intention to remove 
him for abandonment of position, effective December 29, 1978. Twenty 
days later Mr. X appealed the agency action to the

[[Page 52]]

Merit Systems Protection Board. The Merit Systems Protection Board 
docketed Mr. X's appeal as an ``old system case,'' i.e., one to which 
the savings clause applied. The appropriate regional office processed 
the case, applying the substantive laws, rules and regulations in 
existence prior to the enactment of the Act. The decision, dated 
February 28, 1979, informed Mr. X that he is entitled to judicial review 
if he files a timely notice of appeal in the appropriate United States 
district court or the United States Court of Claims under the statute of 
limitations applicable when the adverse action was taken.
    (b) Whistleblower Protection Act of 1989 (Pub. L. 101-12)--(1) 
Scope. All orders, rules, and regulations issued by the Board and the 
Special Counsel before the effective date of the Whistleblower 
Protection Act of 1989 shall continue in effect, according to their 
terms, until modified, terminated, superseded, or repealed by the Board 
or the Special Counsel, as appropriate.
    (2) Administrative proceedings and appeals therefrom. No provision 
of the Whistleblower Protection Act of 1989 shall be applied by the 
Board in such a way as to affect any administrative proceeding pending 
at the effective date of such provision. ``Pending'' is considered to 
encompass existing agency proceedings, including personnel actions that 
were proposed, threatened, or taken before July 9, 1989, the effective 
date of the Whistleblower Protection Act of 1989, and appeals before the 
Board or its predecessor agencies that were subject to judicial review 
on that date. An agency proceeding is considered to exist once the 
employee has received notice of the proposed action.



Subpart H_Attorney Fees (Plus Costs, Expert Witness Fees, and Litigation 
  Expenses, Where Applicable), Consequential Damages, and Compensatory 
                                 Damages

    Source: 63 FR 41179, Aug. 3, 1998, unless otherwise noted.



Sec. 1201.201  Statement of purpose.

    (a) This subpart governs Board proceedings for awards of attorney 
fees (plus costs, expert witness fees, and litigation expenses, where 
applicable), consequential damages, and compensatory damages.
    (b) There are seven statutory provisions covering attorney fee 
awards. Because most MSPB cases are appeals under 5 U.S.C. 7701, most 
requests for attorney fees will be governed by Sec. 1201.202(a)(1). 
There are, however, other attorney fee provisions that apply only to 
specific kinds of cases. For example, Sec. 1201.202(a)(4) applies only 
to certain whistleblower appeals. Sections 1201.202(a)(5) and (a)(6) 
apply only to corrective and disciplinary action cases brought by the 
Special Counsel. Section 1201.202(a)(7) applies only to appeals brought 
under the Uniformed Services Employment and Reemployment Rights Act.
    (c) An award of consequential damages is authorized in only two 
situations: Where the Board orders corrective action in a whistleblower 
appeal under 5 U.S.C. 1221, and where the Board orders corrective action 
in a Special Counsel complaint under 5 U.S.C. 1214. Consequential 
damages include such items as medical costs and travel expenses, and 
other costs as determined by the Board through case law.
    (d) The Civil Rights Act of 1991 (42 U.S.C. 1981a) authorizes an 
award of compensatory damages to a prevailing party who is found to have 
been intentionally discriminated against based on race, color, religion, 
sex, national origin, or disability. Compensatory damages include 
pecuniary losses, future pecuniary losses, and nonpecuniary losses, such 
as emotional pain, suffering, inconvenience, mental anguish, and loss of 
enjoyment of life.



Sec. 1201.202  Authority for awards.

    (a) Awards of attorney fees (plus costs, expert witness fees, and 
litigation expenses, where applicable). The Board is authorized by 
various statutes to order payment of attorney fees and, where 
applicable, costs, expert witness fees, and litigation expenses. These 
statutory authorities include, but are not

[[Page 53]]

limited to, the following authorities to order payment of:
    (1) Attorney fees, as authorized by 5 U.S.C. 7701(g)(1), where the 
appellant or respondent is the prevailing party in an appeal under 5 
U.S.C. 7701 or an agency action against an administrative law judge 
under 5 U.S.C. 7521, and an award is warranted in the interest of 
justice;
    (2) Attorney fees, as authorized by 5 U.S.C. 7701(g)(2), where the 
appellant or respondent is the prevailing party in an appeal under 5 
U.S.C. 7701, a request to review an arbitration decision under 5 U.S.C. 
7121(d), or an agency action against an administrative law judge under 5 
U.S.C. 7521, and the decision is based on a finding of discrimination 
prohibited under 5 U.S.C. 2302(b)(1);
    (3) Attorney fees and costs, as authorized by 5 U.S.C. 1221(g)(2), 
where the appellant is the prevailing party in an appeal under 5 U.S.C. 
7701 and the Board's decision is based on a finding of a prohibited 
personnel practice;
    (4) Attorney fees and costs, as authorized by 5 U.S.C. 
1221(g)(1)(B), where the Board orders corrective action in a 
whistleblower appeal to which 5 U.S.C. 1221 applies;
    (5) Attorney fees, as authorized by 5 U.S.C. 1214(g)(2) or 5 U.S.C. 
7701(g)(1), where the Board orders corrective action in a Special 
Counsel complaint under 5 U.S.C. 1214;
    (6) Attorney fees, as authorized by 5 U.S.C. 1204(m), where the 
respondent is the prevailing party in a Special Counsel complaint for 
disciplinary action under 5 U.S.C. 1215;
    (7) Attorney fees, expert witness fees, and litigation expenses, as 
authorized by the Uniformed Services Employment and Reemployment Rights 
Act, 38 U.S.C. 4324(c)(4); and
    (8) Attorney fees, expert witness fees, and other litigation 
expenses, as authorized by the Veterans Employment Opportunities Act; 5 
U.S.C. 3330c(b).
    (b) Awards of consequential damages. The Board may order payment of 
consequential damages, including medical costs incurred, travel 
expenses, and any other reasonable and foreseeable consequential 
damages:
    (1) As authorized by 5 U.S.C. 1221(g)(1)(A)(ii), where the Board 
orders corrective action in a whistleblower appeal to which 5 U.S.C. 
1221 applies; and
    (2) As authorized by 5 U.S.C. 1214(g)(2), where the Board orders 
corrective action in a Special Counsel complaint under 5 U.S.C. 1214.
    (c) Awards of compensatory damages. The Board may order payment of 
compensatory damages, as authorized by section 102 of the Civil Rights 
Act of 1991 (42 U.S.C. 1981a), based on a finding of unlawful 
intentional discrimination but not on an employment practice that is 
unlawful because of its disparate impact under the Civil Rights Act of 
1964, the Rehabilitation Act of 1973, or the Americans with Disabilities 
Act of 1990. Compensatory damages include pecuniary losses, future 
pecuniary losses, and nonpecuniary losses such as emotional pain, 
suffering, inconvenience, mental anguish, and loss of enjoyment of life.
    (d) Definitions. For purposes of this subpart:
    (1) A proceeding on the merits is a proceeding to decide an appeal 
of an agency action under 5 U.S.C. 1221 or 7701, an appeal under 38 
U.S.C. 4324, an appeal under 5 U.S.C. 3330a, a request to review an 
arbitration decision under 5 U.S.C. 7121(d), a Special Counsel complaint 
under 5 U.S.C. 1214 or 1215, or an agency action against an 
administrative law judge under 5 U.S.C. 7521.
    (2) An addendum proceeding is a proceeding conducted after issuance 
of a final decision in a proceeding on the merits, including a decision 
accepting the parties' settlement of the case. The final decision in the 
proceeding on the merits may be an initial decision of a judge that has 
become final under Sec. 1201.113 of this part or a final decision of 
the Board.

[63 FR 41179, Aug. 3, 1998, as amended at 65 FR 5409, Feb. 4, 2000]



Sec. 1201.203  Proceedings for attorney fees.

    (a) Form and content of request. A request for attorney fees must be 
made by motion, must state why the appellant or respondent believes he 
or she is entitled to an award under the applicable statutory standard, 
and must be supported by evidence substantiating the amount of the 
request. Evidence

[[Page 54]]

supporting a motion for attorney fees must include at a minimum:
    (1) Accurate and current time records;
    (2) A copy of the terms of the fee agreement (if any);
    (3) A statement of the attorney's customary billing rate for similar 
work, with evidence that that rate is consistent with the prevailing 
community rate for similar services in the community in which the 
attorney ordinarily practices; and
    (4) An established attorney-client relationship.
    (b) Addendum proceeding. A request for attorney fees will be decided 
in an addendum proceeding.
    (c) Place of filing. Where the initial decision in the proceeding on 
the merits was issued by a judge in a MSPB regional or field office, a 
motion for attorney fees must be filed with the regional or field office 
that issued the initial decision. Where the decision in the proceeding 
on the merits was an initial decision issued by a judge at the Board's 
headquarters or where the only decision was a final decision issued by 
the Board, a motion for attorney fees must be filed with the Clerk of 
the Board.
    (d) Time of filing. A motion for attorney fees must be filed as soon 
as possible after a final decision of the Board but no later than 60 
days after the date on which a decision becomes final.
    (e) Service. A copy of a motion for attorney fees must be served on 
the other parties or their representatives at the time of filing. A 
party may file a pleading responding to the motion within the time limit 
established by the judge.
    (f) Hearing; applicability of subpart B. The judge may hold a 
hearing on a motion for attorney fees and may apply appropriate 
provisions of subpart B of this part to the addendum proceeding.
    (g) Initial decision; review by the Board. The judge will issue an 
initial decision in the addendum proceeding, which shall be subject to 
the provisions for a petition for review by the Board under subpart C of 
this part.

[63 FR 41179, Aug. 3, 1998, as amended at 65 FR 24381, Apr. 26, 2000



Sec. 1201.204  Proceedings for consequential damages and compensatory damages.

    (a) Time for making request. (1) A request for consequential damages 
or compensatory damages must be made during the proceeding on the 
merits, no later than the end of the conference(s) held to define the 
issues in the case.
    (2) The judge or the Board, as applicable, may waive the time limit 
for making a request for consequential damages or compensatory damages 
for good cause shown. The time limit will not be waived if a party shows 
that such waiver would result in undue prejudice.
    (b) Form and content of request. A request for consequential damages 
or compensatory damages must be made in writing and must state the 
amount of damages sought and the reasons why the appellant or respondent 
believes he or she is entitled to an award under the applicable 
statutory standard.
    (c) Service. A copy of a request for consequential damages or 
compensatory damages must be served on the other parties or their 
representatives when the request is made.
    A party may file a pleading responding to the request within the 
time limit established by the judge or the Board, as applicable.
    (d) Addendum proceeding. (1) A request for consequential damages or 
compensatory damages will be decided in an addendum proceeding.
    (2) A judge may waive the requirement of paragraph (d)(1), either on 
his or her own motion or on the motion of a party, and consider a 
request for damages in a proceeding on the merits where the judge 
determines that such action is in the interest of the parties and will 
promote efficiency and economy in adjudication.
    (e) Initiation of addendum proceeding. (1) A motion for initiation 
of an addendum proceeding to decide a request for consequential damages 
or compensatory damages must be filed as soon as possible after a final 
decision of the Board but no later than 60 days after the date on which 
a decision becomes final. Where the initial decision in the proceeding 
on the merits was issued by a judge in a MSPB regional or field office, 
the motion must be filed with the

[[Page 55]]

regional or field office that issued the initial decision. Where the 
decision in the proceeding on the merits was an initial decision issued 
by a judge at the Board's headquarters or where the only decision was a 
final decision issued by the Board, the motion must be filed with the 
Clerk of the Board.
    (2) A copy of a motion for initiation of an addendum proceeding to 
decide a request for consequential damages or compensatory damages must 
be served on the other parties or their representatives at the time of 
filing. A party may file a pleading responding to the motion within the 
time limit established by the judge.
    (f) Hearing; applicability of subpart B. The judge may hold a 
hearing on a request for consequential damages or compensatory damages 
and may apply appropriate provisions of subpart B of this part to the 
addendum proceeding.
    (g) Initial decision; review by the Board. The judge will issue an 
initial decision in the addendum proceeding, which shall be subject to 
the provisions for a petition for review by the Board under subpart C of 
this part.
    (h) Request for damages first made in proceeding before the Board. 
Where a request for consequential damages or compensatory damages is 
first made on petition for review of a judge's initial decision on the 
merits and the Board waives the time limit for making the request in 
accordance with paragraph (a)(2) of this section, or where the request 
is made in a case where the only MSPB proceeding is before the 3-member 
Board, including, for compensatory damages only, a request to review an 
arbitration decision under 5 U.S.C. 7121(d), the Board may:
    (1) Consider both the merits and the request for damages and issue a 
final decision;
    (2) Remand the case to the judge for a new initial decision, either 
on the request for damages only or on both the merits and the request 
for damages; or
    (3) Where there has been no prior proceeding before a judge, forward 
the request for damages to a judge for hearing and a recommendation to 
the Board, after which the Board will issue a final decision on both the 
merits and the request for damages.
    (i) EEOC review of decision on compensatory damages. A final 
decision of the Board on a request for compensatory damages pursuant to 
the Civil Rights Act of 1991 shall be subject to review by the Equal 
Employment Opportunity Commission as provided under subpart E of this 
part.



Sec. 1201.205  Judicial review.

    A final Board decision under this subpart is subject to judicial 
review as provided under 5 U.S.C. 7703.

                   Appendix I to Part 1201 [Reserved]

   Appendix II to Part 1201--Appropriate Regional or Field Office for 
                             Filing Appeals

    All submissions shall be addressed to the Regional Director, if 
submitted to a regional office, or the Chief Administrative Judge, if 
submitted to a field office, Merit Systems Protection Board, at the 
addresses listed below, according to geographic region of the employing 
agency or as required by Sec. 1201.4(d) of this part. The facsimile 
numbers listed below are TDD-capable; however, calls will be answered by 
voice before being connected to the TDD. Address of Appropriate Regional 
or Field Office and Area Served:
    1. Atlanta Regional Office, 401 West Peachtree Street, NW., 10th 
floor, Atlanta, Georgia 30308-3519, Facsimile No.: (404) 730-2767, 
(Alabama; Florida; Georgia; Mississippi; South Carolina; and Tennessee).
    2. Central Regional Office, 230 South Dearborn Street, 31st floor, 
Chicago, Illinois 60604-1669, Facsimile No.: (312) 886-4231, (Illinois; 
Indiana; Iowa; Kansas City, Kansas; Kentucky; Michigan; Minnesota; 
Missouri; Ohio; and Wisconsin).
    3. Northeastern Regional Office, U.S. Customhouse, Room 501, Second 
and Chestnut Streets, Philadelphia, Pennsylvania 19106-2987, Facsimile 
No.: (215) 597-3456, (Connecticut; Delaware; Maine; Maryland--except the 
counties of Montgomery and Prince George's; Massachusetts; New 
Hampshire; New Jersey--except the counties of Bergen, Essex, Hudson, and 
Union; Pennsylvania; Rhode Island; Vermont; and West Virginia).
    3a. New York Field Office, 26 Federal Plaza, Room 3137-A, New York, 
New York 10278-0022, Facsimile No.: (212) 264-1417, (New Jersey--
counties of Bergen, Essex, Hudson, and Union; New York; Puerto Rico; and 
Virgin Islands).
    4. Washington Regional Office, 1800 Diagonal Road, Alexandria, 
Virginia 22314, Facsimile No.: (703) 756-7112, (Maryland--counties of 
Montgomery and Prince George's; North Carolina; Virginia; Washington, 
DC;

[[Page 56]]

and all overseas areas not otherwise covered).
    5. Western Regional Office, 250 Montgomery Street, Suite 400, 4th 
floor, San Francisco, California 94104-3401, Facsimile No.: (415) 705-
2945, (Alaska; California; Hawaii; Idaho; Nevada; Oregon; Washington; 
and Pacific overseas areas).
    5a. Denver Field Office, 165 South Union Blvd., Suite 318, Lakewood, 
Colorado 80228-2211, Facsimile No.: (303) 969-5109, (Arizona; Colorado; 
Kansas--except Kansas City; Montana; Nebraska; New Mexico; North Dakota; 
South Dakota; Utah; and Wyoming).
    6. Dallas Regional Office, 1100 Commerce Street, Room 620, Dallas, 
Texas 75242-9979, Facsimile No.: (214) 767-0102, (Arkansas; Louisiana; 
Oklahoma; and Texas).

[69 FR 11503, Mar. 11, 2004, as amended at 69 FR 61991, Oct. 22, 2004]

Appendix III to Part 1201--Approved Hearing Locations By Regional Office

                         Atlanta Regional Office

Birmingham, Alabama
Huntsville, Alabama
Mobile, Alabama
Montgomery, Alabama
Jacksonville, Florida
Miami, Florida
Orlando, Florida
Pensacola, Florida
Tallahassee, Florida
Tampa/St. Petersburg, Florida
Atlanta, Georgia
Augusta, Georgia
Macon, Georgia
Savannah, Georgia
Jackson, Mississippi
Charleston, South Carolina
Columbia, South Carolina
Chattanooga, Tennessee
Knoxville, Tennessee
Memphis, Tennessee
Nashville, Tennessee

                         Central Regional Office

Chicago, Illinois
Indianapolis, Indiana
Davenport, Iowa/Rock Island, Illinois
Des Moines, Iowa
Lexington, Kentucky
Louisville, Kentucky
Detroit, Michigan
Minneapolis/St. Paul, Minnesota
Kansas City, Missouri
Springfield, Missouri
St. Louis, Missouri
Cleveland, Ohio
Cincinnati, Ohio
Columbus, Ohio
Dayton, Ohio
Milwaukee, Wisconsin

                         Dallas Regional Office

Little Rock, Arkansas
Alexandria, Louisiana
New Orleans, Louisiana
Oklahoma City, Oklahoma
Tulsa, Oklahoma
Corpus Christi, Texas
Dallas, Texas
El Paso, Texas
Houston, Texas
San Antonio, Texas
Temple, Texas
Texarkana, Texas

                      Northeastern Regional Office

Hartford, Connecticut
New Haven, Connecticut
Dover, Delaware
Bangor, Maine
Portland, Maine
Baltimore, Maryland
Boston, Massachusetts
Manchester, New Hampshire
Portsmouth, New Hampshire
Trenton, New Jersey
Harrisburg, Pennsylvania
Philadelphia, Pennsylvania
Pittsburgh, Pennsylvania
Wilkes-Barre, Pennsylvania
Providence, Rhode Island
Burlington, Vermont
Charleston, West Virginia
Morgantown, West Virginia

                          New York Field Office

Newark, New Jersey
Albany, New York
Buffalo, New York
New York, New York
Syracuse, New York
San Juan, Puerto Rico

                       Washington Regional Office

Washington, DC
Asheville, North Carolina
Charlotte, North Carolina
Raleigh, North Carolina
Jacksonville, North Carolina
Alexandria, Virginia
Norfolk, Virginia
Richmond, Virginia
Roanoke, Virginia

                         Western Regional Office

Anchorage, Alaska
Fresno, California
Los Angeles, California
Monterey, California
Sacramento, California
San Bernardino, California
San Diego, California
San Francisco, California
Santa Ana, California
Santa Barbara, California
Honolulu, Hawaii

[[Page 57]]

Boise, Idaho
Pocatello, Idaho
Las Vegas, Nevada
Reno, Nevada
Medford, Oregon
Portland, Oregon
Seattle, Washington
Spokane, Washington
Richland, Kennewick, and Pasco, Washington

                           Denver Field Office

Phoenix, Arizona
Tucson, Arizona
Grand Junction, Colorado
Lakewood, Colorado
Pueblo, Colorado
Wichita, Kansas
Billings, Montana
Great Falls, Montana
Missoula, Montana
Omaha, Nebraska
Albuquerque, New Mexico
Bismarck, North Dakota
Fargo, North Dakota
Rapid City, South Dakota
Sioux Falls, South Dakota
Salt Lake City, Utah
Casper, Wyoming

[69 FR 11503, Mar. 11, 2004, as amended at 69 FR 61991, Oct. 22, 2004]

    Appendix IV to Part 1201--Sample Declaration Under 28 U.S.C.1746

                               Declaration

    I, ----------------------, do hereby declare:
    I declare under penalty of perjury under the laws of the United 
States of America that the foregoing is true and correct.
Executed on
________________________________________________________________________

Date

________________________________________________________________________
Signature



PART 1202_STATUTORY REVIEW BOARD--Table of Contents




    Authority: 5 U.S.C. 1204.



Sec. 1202.1  Designating Chairman of Statutory Review Board.

    At the written request of the Department of Transportation, the 
Chairman of the Board will designate a presiding official of the Board 
to serve as the Chairman of any Board of Review established by the 
Secretary of Transportation under 5 U.S.C. 3383(b) to review certain 
actions to remove air traffic controllers.

[54 FR 28658, July 6, 1989]



PART 1203_PROCEDURES FOR REVIEW OF RULES AND REGULATIONS OF THE OFFICE OF 

PERSONNEL MANAGEMENT--Table of Contents




                                 General

Sec.
1203.1 Scope; application of part 1201, subpart B.
1203.2 Definitions.

                          Procedures for Review

1203.11 Request for regulation review.
1203.12 Granting or denying the request for regulation review.
1203.13 Filing pleadings.
1203.14 Serving documents.
1203.15 Review of regulations on the Board's own motion.
1203.16 Proceedings.

                           Order of the Board

1203.21 Final order of the Board.
1203.22 Enforcement of order.

    Authority: 5 U.S.C. 1204(a), 1204(f), and 1204(h).

    Source: 54 FR 23632, June 2, 1989, unless otherwise noted.

                                 General



Sec. 1203.1  Scope; application of part 1201, subpart B.

    (a) General. This part applies to the Board's review, under 5 U.S.C. 
1204(a)(4) and 1204(f), of any rules or regulations (``regulations'') 
issued by the Office of Personnel Management (OPM). It applies to the 
Board's review of the way in which an agency implements regulations, as 
well as to its review of the validity of the regulations on their face.
    (b) Application of 5 CFR part 1201, subparts B and C. (1) Where 
appropriate, and unless the Board's regulations provide otherwise, the 
Board may apply the provisions of 5 CFR part 1201, subpart B to 
proceedings conducted under this part. It may do so on its own motion or 
on the motion of a party to these proceedings.
    (2) The following provisions of 5 CFR part 1201, subparts B and C do 
not apply to proceedings conducted under this part:

[[Page 58]]

    (i) Sections 1201.21 through 1201.27 which concern petitions for 
appeal of agency actions, and the pleadings that are filed in connection 
with those petitions; and
    (ii) Sections 1201.111 through 1201.119 which concern final 
decisions of presiding officials, and petitions for Board review of 
those decisions.

[54 FR 23632, June 2, 1989, as amended at 54 FR 28658, July 6, 1989]



Sec. 1203.2  Definitions.

    (a) Invalid regulation means a regulation that has been issued by 
OPM, and that, on its face, would require an employee to commit a 
prohibited personnel practice if any agency implemented the regulation.
    (b) Invalidly implemented regulation means a regulation, issued by 
OPM, whose implementation by an agency has required an employee to 
commit a prohibited personnel practice. A valid regulation may be 
invalidly implemented.
    (c) Merit system principles are the principles stated in 5 U.S.C. 
2301(b)(1) through 2301(b)(9).
    (d) Pleadings are written submissions containing claims, 
allegations, arguments, or evidence. They include briefs, motions, 
requests for regulation review, responses, replies, and attachments that 
are submitted in connection with proceedings under this part.
    (e) Prohibited personnel practices are the impermissible actions 
described in 5 U.S.C. 2302(b)(1) through 2302(b)(11).
    (f) Regulation review means the procedure under which the Board, 
under 5 U.S.C. 1204(f), reviews regulations issued by OPM on their face, 
or reviews those regulations as they have been implemented, or both, in 
order to determine whether the regualtions require any employee to 
commit a prohibited personnel practice.
    (g) Request for regulation review means a request that the Board 
review a regulation issued by OPM.

[54 FR 23632, June 2, 1989, as amended at 54 FR 28658, July 6, 1989]

                          Procedures for Review



Sec. 1203.11  Request for regulation review.

    (a) An interested person or the Special Counsel may submit a request 
for regulation review.
    (b) Contents of request. (1) Each request for regulation review must 
include the following information:
    (i) The name, address, and signature of the requester's 
representative or, if the requester has no representative, of the 
requester;
    (ii) A citation identifying the regulation being challenged;
    (iii) A statement (along with any relevant documents) describing in 
detail the reasons why the regulation would require an employee to 
commit a prohibited personnel practice; or the reasons why the 
implementation of the regulation requires an employee to commit a 
prohibited personnel practice;
    (iv) Specific identification of the prohibited personnel practice at 
issue; and
    (v) A description of the action the requester would like the Board 
to take.
    (2) If the prohibited personnel practice at issue is one prohibited 
by 5 U.S.C. 2302(b)(12), the request must include the following 
additional information:
    (i) Identification of the law or regulation that allegedly would be 
or has been violated, and how it would be or has been violated; and
    (ii) Identification of the merit system principles at issue and an 
explanation of the way in which the law or regulation at issue 
implements or directly concerns those principles.

[54 FR 23632, June 2, 1989, as amended at 65 FR 57939, Sept. 27, 2000]



Sec. 1203.12  Granting or denying the request for regulation review.

    (a) The Board, in its sole discretion, may grant or deny an 
interested person's request for regulation review. It will grant a 
request for regulation review that the Special Counsel submits. It will 
not, however, review a regulation before its effective date.
    (b) After considering the request for regulation review, the Board 
will issue an order granting or denying the request in whole or in part. 
Orders in

[[Page 59]]

which the Board grants the request, in whole or in part, will identify 
the agency or agencies involved, if any. They also will include the 
following:
    (1) A citation identifying the regulation being challenged;
    (2) A description of the issues to be addressed;
    (3) The docket number assigned to the proceedings; and
    (4) Instructions covering the review proceedings, including 
information regarding the time limits for filing submissions related to 
the request.

[54 FR 23632, June 2, 1989, as amended at 56 FR 41749, Aug. 23, 1991]



Sec. 1203.13  Filing pleadings.

    (a) Place to file and number of copies. One original and three 
copies of each pleading must be filed with the Office of the Clerk, U.S. 
Merit Systems Protection Board, 1615 M Street, NW., Washington, DC 
20419. In addition, parties to a proceeding under this part must serve 
their pleadings on each other in accordance with Sec. 1203.14 of this 
part. The Office of the Clerk will make all pleadings available for 
review by the public.
    (b) Time limits. (1) A request for regulation review may be filed 
any time after the effective date of the regulation.
    (2) A response to a request for regulation review, whether the 
response supports or opposes the request, must be filed within the time 
period provided in the Board order granting the request for review.
    (3) A reply to a response may be filed within 10 days after the 
response is filed. The reply may address only those matters raised in 
the response that were not addressed in the request for regulation 
review.
    (4) Motions may be filed at any time during the regulation review. 
The filing of a motion will not delay the acting of the Board unless the 
Board orders a postponement. The Board may rule immediately on a motion 
for an extension of time or a continuance if circumstances make 
consideration of others' views regarding the motion impracticable.
    (5) Submissions opposing motions must be filed within five days 
after the opposing party receives the motion.
    (c) Additional pleadings. The Board will consider pleadings in 
addition to those mentioned above only if the Board requests them, or if 
it grants a request that it consider them.
    (d) Method and date of filing. An initial filing in a request for 
review of a regulation may be filed with the Office of the Clerk by 
mail, by commercial or personal delivery, or by facsimile. Pleadings, 
other than an initial request for a regulation review under this part, 
may be filed with the Office of the Clerk by mail, by commercial or 
personal delivery, by facsimile, or by e-filing in accordance with Sec. 
1201.14 of this chapter. If the document was submitted by certified 
mail, it is considered to have been filed on the mailing date. If it was 
submitted by regular mail, it is presumed to have been filed five days 
before the Office of the Clerk receives it, in the absence of evidence 
contradicting that presumption. If it was delivered personally, it is 
considered to have been filed on the date the Office of the Clerk 
receives it. If it was submitted by facsimile, the date of the facsimile 
is considered to be the filing date. If it was submitted by commercial 
delivery, the date of filing is the date it was delivered to the 
commercial delivery service. If it was submitted by e-filing, it is 
considered to have been filed on the date of electronic submission.
    (e) Extensions of time. The Board will grant a request for extension 
of time only when good cause is shown.

[54 FR 23632, June 21, 1989, as amended at 59 FR 65242, Dec. 19, 1994; 
65 FR 48885, Aug. 10, 2000; 68 FR 59864, Oct. 20, 2003; 69 FR 57631, 
Sept. 27, 2004]



Sec. 1203.14  Serving documents.

    (a) Parties. In every case, the person requesting regulation review 
must serve a copy of the request on the Director of OPM. In addition, 
when the implementation of a regulation is being challenged, the 
requester must also serve a copy of the request on the head of the 
implementing agency. A copy of all other pleadings must be served, by 
the person submitting the pleading, on each other party to the 
proceeding.
    (b) Method of serving documents. Pleadings may be served on parties 
by

[[Page 60]]

mail, by personal delivery, by facsimile, or by commercial delivery. 
Service by mail is accomplished by mailing the pleading to each party or 
representative, at the party's or representative's last known address. 
Service by facsimile is accomplished by transmitting the pleading by 
facsimile to each party or representative. Service by personal delivery 
or by commercial delivery is accomplished by delivering the pleading to 
the business office or home of each party or representative and leaving 
it with the party or representative, or with a responsible person at 
that address. Regardless of the method of service, the party serving the 
document must submit to the Board, along with the pleading, a 
certificate of service as proof that the document was served on the 
other parties or their representatives. The certificate of service must 
list the names and addresses of the persons on whom the pleading was 
served, must state the date on which the pleading was served, must state 
the method (i.e., mail, personal delivery, facsimile, or commercial 
delivery) by which service was accomplished, and must be signed by the 
person responsible for accomplishing service.
    (c) Electronic filing. Other than the initial request for a 
regulation review, pleadings in a regulation review proceeding may be 
filed with the Board and served upon other parties by electronic filing, 
provided the requirements of Sec. 1201.14 of this chapter are 
satisfied.

[54 FR 23632, June 21, 1989, as amended at 59 FR 65242, Dec. 19, 1994; 
68 FR 59864, Oct. 20, 2003; 69 FR 57631, Sept. 27, 2004]



Sec. 1203.15  Review of regulations on the Board's own motion.

    The Board may, from time to time, review a regulation on its own 
motion under 5 U.S.C. 1204(f)(1)(A). When it does so, it will publish 
notice of the review in the Federal Register.

[54 FR 28658, July 6, 1989]



Sec. 1203.16  Proceedings.

    The Board has substantial discretion in conducting a regulation 
review under this part. It may conduct a review on the basis of the 
pleadings alone, or on the basis of the pleadings along with any or all 
of the following:
    (a) Additional written comments;
    (b) Oral argument;
    (c) Evidence presented at a hearing; and/or
    (d) Evidence gathered through any other appropriate procedures that 
are conducted in accordance with law.

                           Order of the Board



Sec. 1203.21  Final order of the Board.

    (a) Invalid regulation. If the Board determines that a regulation is 
invalid on its face, in whole or in part, it will require any agency 
affected by the order to stop complying with the regulation, in whole or 
in part. In addition, it may order other remedial action that it finds 
necessary.
    (b) Invalidly implemented regulation. If the Board determines that a 
regulation has been implemented invalidly, in whole or in part, it will 
require affected agencies to terminate the invalid implementation.
    (c) Corrective action. The Board may order corrective action 
necessary to ensure compliance with its order. The action it may order 
includes, but is not limited to, the following:
    (1) Cancellation of any personnel action related to the prohibited 
personnel practice;
    (2) Rescission of any action related to the cancelled personnel 
action;
    (3) Removal of any reference, record, or document within an 
employee's official personnel folder that is related to the prohibited 
personnel practice;
    (4) Award of back pay and benefits;
    (5) Award of attorney fees;
    (6) Other remedial measures to reverse the effects of a prohibited 
personnel practice; and
    (7) The agency's submission of a verified report of its compliance 
with the Board's order.



Sec. 1203.22  Enforcement of order.

    (a) Any party may ask the Board to enforce a final order it has 
issued under this part. The request may be made by filing a petition for 
enforcement with the Office of the Clerk of the Board and by serving a 
copy of the petition on each party to the regulation review. The request 
may be filed in electronic

[[Page 61]]

form, provided the requirements of Sec. 1201.14 are satisfied. The 
petition must include specific reasons why the petitioning party 
believes that there has been a failure to comply with the Board's order.
    (b) The Board will take all action necessary to determine whether 
there has been compliance with its final order. If it determines that 
there has been a failure to comply with the order, it will take actions 
necessary to obtain compliance.
    (c) Where appropriate, the Board may initiate the enforcement 
procedures described in 5 CFR 1201.183(c).

[54 FR 23632, June 2, 1989, as amended at 68 FR 59864, Oct. 20, 2003; 69 
FR 57631, Sept. 27, 2004]



PART 1204_AVAILABILITY OF OFFICIAL INFORMATION--Table of Contents




                       Subpart A_Purpose and Scope

Sec.
1204.1 Purpose.
1204.2 Scope.

    Subpart B_Procedures for Obtaining Records Under the Freedom of 
                             Information Act

1204.11 Requests for access to Board records.
1204.12 Fees.
1204.13 Denials.
1204.14 Requests for access to confidential commercial information.
1204.15 Records of other agencies.

                            Subpart C_Appeals

1204.21 Submission.
1204.22 Decision on appeal.

    Authority: 5 U.S.C. 552 and 1204, Pub. L. 99-570, Pub. L. 104-231, 
and E.O. 12600.

    Source: 64 FR 51039, Sept. 21, 1999, unless otherwise noted.



                       Subpart A_Purpose and Scope



Sec. 1204.1  Purpose.

    This part implements the Freedom of Information Act (FOIA), 5 U.S.C. 
552, as amended, by stating the procedures to follow when requesting 
information from the Board, and by stating the fees that will be charged 
for that information.



Sec. 1204.2  Scope.

    (a) For the purpose of this part, the term record and any other term 
used in reference to information includes any information that would be 
a Board record subject to the requirements of 5 U.S.C. 552 when 
maintained by the Board in any format including an electronic format. 
All written requests for information that are not processed under part 
1205 of this chapter will be processed under this part. The Board may 
continue, without complying with this part, to furnish the public with 
the information it has furnished in the regular course of performing its 
official duties, unless furnishing the information would violate the 
Privacy Act of 1974, 5 U.S.C. 552a, or another law.
    (b) When the subject of the record, or the subject's representative, 
requests a record from a Privacy Act system of records, as that term is 
defined by 5 U.S.C. 552a(a)(5), and the Board retrieves the record by 
the subject's name or other personal identifier, the Board will handle 
the request under the procedures and fees shown in part 1205 of this 
chapter. When a third party requests access to those records, without 
the written consent of the subject of the record, the Board will handle 
the request under this part.
    (c) When a party to an appeal requests a copy of a tape recording, 
video tape, or transcript (if one has been prepared) of a hearing that 
the Board or a judge held under part 1201 or part 1209 of this chapter, 
the Board will handle the request under Sec. 1201.53 of this chapter. 
When someone other than a party to the appeal makes this request, the 
Board will handle the request under this part.
    (d) In accordance with 5 U.S.C. 552(a)(2), the Board's final 
opinions and orders (including concurring and dissenting opinions), 
those statements of policy and interpretations adopted by the Board and 
that are not published in the Federal Register, administrative staff 
manuals and instructions to staff that affect a member of the public, 
and agency records processed and disclosed in response to a FOIA request 
that the Board determines have been or are likely to become the subject 
of additional requests for basically the same records and a general 
index of those

[[Page 62]]

records, are available for public review and copying in the Board's 
Headquarters' Library, 1615 M Street, NW., Washington, DC 20419-0001, 
and on the Board's World Wide Web site at http://www.mspb.gov.

[64 FR 51039, Sept. 21, 1999, as amended at 65 FR 48885, Aug. 10, 2000]



    Subpart B_Procedures for Obtaining Records Under the Freedom of 
                             Information Act



Sec. 1204.11  Request for access to Board records.

    (a) Sending a request. A person may request a Board record under 
this part by writing to the office that has the record. If the requester 
believes that the records are located in a regional or field office, the 
request must be sent to that office. A list of the addresses of the 
Board's regional and field offices are in appendix II of part 1201 of 
this chapter and on the Board's World Wide Web site at http://
www.mspb.gov. Other requests must be sent to the Clerk of the Board, 
1615 M Street, NW., Washington, DC 20419-0001. Requests sent under this 
part must be clearly marked ``Freedom of Information Act Request'' on 
both the envelope and the request.
    (b) Description. A request must describe the records wanted in 
enough detail for Board employees to locate the records with no more 
than a reasonable effort. Wherever possible, a request must include 
specific information about each record, such as the date, title or name, 
author, recipient, and subject matter of the record. In addition, if the 
request asks for records on cases decided by the Board, it must show the 
title of the case, the MSPB docket number, and the date of the decision.
    (c) Time limits and decisions. If a request is not properly labeled 
or is sent to the wrong office, the time for processing the request will 
begin when the proper office receives it. Requests to the Board's 
headquarters will be decided by the Clerk of the Board. Requests to one 
of the regional or field offices will be decided by the Regional 
Director or Chief Administrative Judge. The Board will decide a request 
within 20 workdays after the appropriate office receives it, except 
under the conditions that follow.
    (1) Extension of time. If ``unusual circumstances'' exist, the Board 
may extend the time for deciding the request by no more than 10 
additional workdays. An example of unusual circumstances could be the 
need to find and retrieve records from regional or field offices or from 
federal records centers or the need to search, collect and or examine a 
large number of records which are demanded in a single request, or the 
need to talk to another agency with a substantial interest in the 
determination of the request. When the Board extends the time to decide 
the request, it will inform the requester in writing and describe the 
``unusual circumstances'', and it will state a date on which a decision 
on the request will be made. If the ``unusual circumstances'' are such 
that the Board cannot comply with the request within the time limit, the 
Board will offer the requester an opportunity:
    (i) To limit the request so that it may be processed within the time 
limit, or
    (ii) To arrange with the Board a different time frame for processing 
the request or a changed request.
    (2) Expedited processing. Where a requester shows a ``compelling 
need'' and in other cases determined by the Board, a decision whether to 
provide expedited processing of a request and notification of that 
decision to the requester will be made within 10 workdays of the date of 
the request. An example of a compelling need could be that a failure to 
obtain the records expeditiously could reasonably be expected to be a 
threat to the life or physical safety of a person or that there is 
urgency to inform the public about actual or alleged Federal Government 
activity by a person primarily engaged in distributing information. 
Where the Board approves expeditious processing, the Board will process 
the request within 5 workdays from the date of the decision to grant the 
expeditious processing. If, in order to fully satisfy the request, the 
Board requires the standard or additional processing time, or if it 
decides that good cause for expedited processing has not been made, it 
will provide written notice of

[[Page 63]]

its decision to the requester and will inform the requester of the right 
to administrative and court review of the decision. A showing of a 
compelling need must be made by a statement certified to be true to the 
best of the requester's knowledge and belief.

[64 FR 51039, Sept. 21, 1999, as amended at 65 FR 48886, Aug. 10, 2000]



Sec. 1204.12  Fees.

    (a) General. The Board will charge the requester fees for services 
provided in processing requests for information. Those fees will be 
charged according to the schedule in paragraph (d) of this section, and 
will recover the full allowable direct costs that the Board incurs. Fees 
may be charged for time spent searching for information, even if the 
Board fails to locate responsive records, and even if it determines that 
the information is exempt from disclosure.
    (b) Definitions. (1) The term direct costs means the costs to an 
agency for searching for and copying (and in the case of commercial 
requesters, reviewing) documents to respond to a FOIA request. Direct 
costs include, for example, the salary of each employee performing work 
at the rate of $5 per quarter hour. Overhead expenses, such as costs of 
space and of heating or lighting the facility in which the records are 
stored, are not included in direct costs.
    (2) The term search, as defined by 5 U.S.C. 552(a)(3)(D), means 
either manual or automated review of Board records to locate those 
records asked for, and includes all time spent looking for material in 
response to a request, including page-by-page or line-by-line 
identification of material within documents. Searches will be done in 
the most efficient and least expensive way to limit costs for both the 
Board and the requester. Searches may be done manually or by computer 
using existing programming. The Board will make a reasonable effort to 
search for the records in electronic form or format, except when such 
effort would interfere to a large extent with the operation of the 
Board's automated information system.
    (3) The term duplication means the process of copying a document or 
electronically maintained information in response to a FOIA request. 
Copies can take the form of paper, microfilm, audio-visual materials, or 
machine-readable documentation (e.g., magnetic tape or disk), among 
others. The copy provided will be in a form or format requested if the 
record is readily reproducible by the Board in that form or format. The 
Board will make a reasonable effort to maintain its records in forms or 
formats that are reproducible.
    (4) The term review includes the process of examining documents to 
determine whether any portion of them may be exempt from disclosure 
under the FOIA, when the documents have been located in response to a 
request that is for a commercial use. The term also includes processing 
any documents for disclosure, e.g., doing all that is necessary to edit 
them and otherwise prepare them for release. Review does not include 
time spent resolving general legal or policy issues.
    (5) The term commercial use request means a request from or on 
behalf of one who seeks information for a use or purpose that furthers 
the commercial, trade, or profit interests of the requester or the 
person on whose behalf the request is made. In deciding whether a 
requester properly belongs in this category, the Board will decide the 
use the requester will make of the documents requested. Also, where the 
Board has reasonable cause to doubt the use a requester will make of the 
records requested, or where that use is not clear from the request, the 
Board will seek additional clarification before assigning the request to 
a specific category.
    (6) The term educational institution means a preschool, a public or 
private elementary or secondary school, an institution of graduate 
higher education, an institution of undergraduate higher education, an 
institution of professional education, or an institution of vocational 
education that operates a program or programs of scholarly research.
    (7) The term noncommercial scientific institution means an 
institution that is not operated on a ``commercial'' basis as that term 
is used above, and that is

[[Page 64]]

operated solely for the purpose of conducting scientific research whose 
results are not intended to promote any particular product or industry.
    (8) The term representative of the news media means any person 
actively gathering news for an entity that is organized and operated to 
publish or broadcast news to the public. The term news means information 
that concerns current events or that would be of current interest to the 
public.
    (c) Categories of requesters. There are four categories of FOIA 
requesters: Commercial use requesters; educational and noncommercial 
scientific institutions; representatives of the news media; and all 
other requesters. To be included in the category of educational and 
noncommercial scientific institutions, requesters must show that the 
request is authorized by a qualifying institution and that they are 
seeking the records not for a commercial use, but to further scholarly 
or scientific research. To be included in the news media category, a 
requester must meet the definition in paragraph (b)(8) of this section 
and the request must not be made for a commercial use. To avoid 
commercial use charges, requesters must show that they should be 
included in a category or categories other than that of commercial use 
requesters. The Board will decide the categories to place requesters for 
fee purposes. It will make these determinations based on information 
given by the requesters and information otherwise known to the Board.
    (d) The Board will not charge a requester if the fee for any request 
is less that $100 (the cost to the Board of processing and collecting 
the fee).
    (1) When the Board receives a request:
    (i) From a commercial use requester, it will charge fees that 
recover the full direct costs for searching for the information 
requested, reviewing it for release at the initial request stage, 
reviewing it after an appeal to determine whether other exemptions not 
considered before the appeal apply to it, and copying it.
    (ii) From an educational and noncommercial scientific institution 
or, to the extent copying exceeds 100 pages, from a representative of 
the news media, it will charge fees only for the cost of copying the 
requested information.
    (iii) From all other requesters, to the extent copying exceeds 100 
pages and search time exceeds 2 hours, it will charge fees for the full 
direct cost of searching for and copying requested records.
    (2) When the Board reasonably believes that a requester or group of 
requesters is attempting to divide a request into more than one request 
to avoid payment of fees, the Board will combine the requests and charge 
fees accordingly. The Board will not combine multiple requests on 
unrelated subjects from one requester.
    (3) When the Board decides that charges for a request are likely to 
exceed $250, the Board will require the requester to pay the entire fee 
in advance before continuing to process the request.
    (4) When a requester has an outstanding fee charge or has not paid a 
fee on time, the Board will require the requester to pay the full amount 
of the estimated fee in advance before the Board begins to process a new 
or pending request from that requester, and before it applies 
administrative time limits for making a decision on the new or pending 
request.
    (e) Fee schedule. (1) Fees for document searches for records will be 
charged at a rate of $5 per quarter hour spent by each Board employee 
performing the search.
    (2) Fees for computer searches for records will be $5 per quarter 
hour spent by each employee operating the computer equipment and/or 
developing a new inquiry or report.
    (3) Fees for review at the initial administrative level to determine 
whether records or portions of records are exempt from disclosure, and 
for review after an appeal to determine whether the records are exempt 
on other legal grounds, will be charged, for commercial use requests, at 
a rate of $5 per quarter hour spent by each reviewing employee.
    (4) Fees for photocopying records is 20 cents a page, the fee for 
copying audio tapes is the direct cost up to $15 per cassette tape; the 
fee for copying video tapes is the direct cost up to $20

[[Page 65]]

per tape; and the fee for computer printouts is 10 cents a page. The fee 
for duplication of electronically maintained information in the 
requester's preferred format will be $21 for copying computer tapes and 
$4 for copying records on computer diskettes, if it is feasible for the 
Board to reproduce records in the format requested. Fees for certified 
copies of the Board's records will include a $4 per page charge for each 
page displaying the Board's seal and certification. When the Board 
estimates that copying costs will exceed $100, it will notify the 
requester of the estimated amount unless the requester has indicated in 
advance a willingness to pay an equal or higher amount.
    (f) Fee waivers. (1) Upon request, the Clerk of the Board, Regional 
Director, or Chief Administrative Judge, as appropriate, will furnish 
information without charge or at reduced rates if it is established that 
disclosure ``is in the public interest because it is likely to 
contribute significantly to public understanding of the operations or 
activities of the government.'' This decision will be based on:
    (i) The subject of the request: Whether the subject of the requested 
records concerns the operations or activities of the government;
    (ii) The informative value of the information to be disclosed: 
Whether the disclosure is likely to contribute to an understanding of 
government operations or activities;
    (iii) Whether disclosure of the requested information is likely to 
contribute to public understanding of the subject of the disclosure; and
    (iv) The significance of the contribution the disclosure would make 
to public understanding of government operations or activities.
    (2) If information is to be furnished without charge or at reduced 
rates, the requester must also establish that disclosure of the 
information is not primarily in the commercial interest of the 
requester. This decision will be based on:
    (i) Whether the requester has a commercial interest that would be 
furthered by the requested disclosure; and, if so,
    (ii) Whether the identified commercial interest of the requester is 
sufficiently large, in comparison with the public interest in 
disclosure, that disclosure is primarily in the commercial interest of 
the requester.
    (3) The requester must establish eligibility for a waiver of fees or 
for reduced fees. The denial of a request for waiver of fees may be 
appealed under subpart C of this part.



Sec. 1204.13  Denials

    (a) The Board may deny: A request for reduced fees or waiver of 
fees; a request for a record, either in whole or in part; a request for 
expeditious processing based on the requester's compelling need; or a 
request that records be released in a specific electronic format. The 
denial will be in writing, will state the reasons, and will notify the 
requester of the right to appeal.
    (b) If the Board applies one or more of the exemptions provided 
under the FOIA to deny access to some or all of the information 
requested, it will respond in writing, identifying for the requester the 
specific exemption(s), providing an explanation as to why the 
exemption(s) to withhold the requested information must be applied, and 
providing an estimate of the amount of material that has been denied to 
the requester, unless providing such an estimate would harm an interest 
protected by the exemptions.
    (c) The amount of information deleted will be indicated on the 
released portion of the record at the place in the record where the 
deletion is made, if technically feasible and unless the indication 
would harm an interest protected by the exemption under which the 
deletion is made.



Sec. 1204.14  Requests for access to confidential commercial information.

    (a) General. Confidential commercial information provided to the 
Board by a business submitter will not be disclosed in response to a 
FOIA request except as required by this section.
    (b) Definitions. (1) The term confidential commercial information 
means records provided to the government by a submitter that are 
believed to contain material exempt from release under Exemption 4 of 
the Freedom of

[[Page 66]]

Information Act, 5 U.S.C. 552(b)(4), because disclosure could reasonably 
be expected to cause substantial competitive harm.
    (2) The term submitter means any person or organization that 
provides confidential commercial information to the government. The term 
submitter includes, but is not limited to, corporations, state 
governments, and foreign governments.
    (c) Notice to business submitters. The Board will provide a business 
submitter with prompt written notice of a request for its confidential 
commercial information whenever such written notice is required under 
paragraph (d) of this section. Exceptions to such written notice are at 
paragraph (h) of this section. This written notice will either describe 
the exact nature of the confidential information requested or provide 
copies of the records or parts of records containing the commercial 
information.
    (d) When initial notice is required. (1) With respect to 
confidential commercial information received by the Board before January 
1, 1988, the Board will give the business submitter notice of a request 
whenever:
    (i) The information is less than 10 years old; or
    (ii) The Board has reason to believe that releasing the information 
could reasonably be expected to cause substantial competitive harm.
    (2) With respect to confidential commercial information received by 
the Board on or after January 1, 1988, the Board will give notice to the 
business submitter whenever:
    (i) The business submitter has designated the information in good 
faith as commercially or financially sensitive information; or
    (ii) The Board has reason to believe that releasing the information 
could reasonably be expected to cause substantial competitive harm.
    (3) Notice of a request for commercially confidential information 
that was received by January 1, 1988, is required for a period of not 
more than 10 years after the date on which the information is submitted 
unless the business submitter requests, and provides justification for, 
a longer specific notice period. Whenever possible, the submitter's 
claim of confidentially must be supported by a statement or 
certification, by an officer or authorized representative of the 
company, that the information in question is confidential commercial 
information and has not been disclosed to the public.
    (e) Opportunity to object to disclosure. Through the notice 
described in paragraph (c) of this section, the Board will give a 
business submitter a reasonable period to provide a detailed statement 
of any objection to disclosure. The statement must specify all grounds 
for withholding any of the information under any exemption of the 
Freedom of Information Act. In addition, in the case of Exemption 4, the 
statement must state why the information is considered to be a trade 
secret, or to be commercial or financial information that is privileged 
or confidential. Information a business submitter provides under this 
paragraph may itself be subject to disclosure under the Freedom of 
Information Act.
    (f) Notice of intent to release information. The Board will consider 
carefully a business submitter's objections and specific grounds for 
claiming that the information should not be released before determining 
whether to release confidential commercial information. Whenever the 
Board decides to release confidential commercial information over the 
objection of a business submitter, it will forward to the business 
submitter a written notice that includes:
    (1) A statement of the reasons for which the business submitter's 
objections to the release were not sufficient;
    (2) A description of the confidential commercial information to be 
released; and
    (3) A specified release date. The Board will forward the notice of 
intent to release the information a reasonable number of days, as 
circumstances permit, before the specified date upon which release is 
expected. It will forward a copy of the release notice to the requester 
at the same time.
    (g) Notice of Freedom of Information Act lawsuit. Whenever a 
requester files a lawsuit seeking to require release of business 
information covered by paragraph (d) of this section, the Board will

[[Page 67]]

notify the business submitter promptly.
    (h) Exceptions to notice requirements. The notice requirements of 
this section do not apply when:
    (1) The Board decides that the information should not be released;
    (2) The information lawfully has been published or otherwise made 
available to the public;
    (3) Disclosure of the information is required by law (other than 5 
U.S.C. 552); or
    (4) The disclosure is required by an agency rule that:
    (i) Was adopted after notice and public comment;
    (ii) Specifies narrow classes of records submitted to the agency 
that are to be released under the FOIA; or
    (iii) Provides in exceptional circumstances for notice when the 
submitter provides written justification, at the time the information is 
submitted or a reasonable time thereafter, that release of the 
information could reasonably be expected to cause substantial 
competitive harm.
    (5) The information requested is not designated by the submitter as 
exempt from release according to agency regulations issued under this 
section, when the submitter has an opportunity to do so at the time of 
sending the information or a reasonable time thereafter, unless the 
agency has good reason to believe that disclosure of the information 
would result in competitive harm; or
    (6) The designation made by the submitter according to Board 
regulations appears obviously frivolous; except that, in such case, the 
Board must provide the submitter with written notice of any final 
administrative release decision within a reasonable period before the 
stated release date.



Sec. 1204.15  Records of other agencies.

    Requests for Board records that were created by another agency may, 
in appropriate circumstances, be referred to that agency for discussion 
or processing. In these instances, the Board will notify the requester.



                            Subpart C_Appeals



Sec. 1204.21  Submission.

    (a) A person may appeal the following actions, or failure to act by 
the Clerk of the Board, a Regional Director, or Chief Administrative 
Judge:
    (1) A denial of access to agency records;
    (2) A denial of a request for a waiver or reduced fees;
    (3) A decision that it is technically not possible to reproduce 
electronically maintained information in the requester's preferred 
format;
    (4) A denial of a request for expedited processing of information 
under this part; or
    (5) A failure to decide a request for expedited processing within 10 
workdays from the date of the request.
    (b) Appeals must be filed with the Chairman, Merit Systems 
Protection Board, 1615 M Street, NW., Washington, DC 20419-0001 within 
10 workdays from the date of the denial. Any appeal must include a copy 
of the initial request, a copy of the letter denying the request, and a 
statement of the reasons why the requester believes the denying employee 
erred.

[64 FR 51039, Sept. 21, 1999, as amended at 65 FR 48886, Aug. 10, 2000]



Sec. 1204.22  Decision on appeal.

    A decision on an appeal will be made within 20 workdays after the 
appeal is received. A decision not to provide expeditious processing of 
a request will be made within 15 workdays after the appeal is received. 
The decision will be in writing and will contain the reasons for the 
decision and information about the appellant's right to seek court 
review of the denial.



PART 1205_PRIVACY ACT REGULATIONS--Table of Contents




                      Subpart A_General Provisions

Sec.
1205.1 Purpose.
1205.2 Policy and scope.
1205.3 Definitions.
1205.4 Disclosure of Privacy Act records.

[[Page 68]]

               Subpart B_Procedures for Obtaining Records

1205.11 Access to Board records.
1205.12 Time limits and determinations.
1205.13 Identification.
1205.14 Granting access.
1205.15 Denying access.
1205.16 Fees.

                     Subpart C_Amendment of Records

1205.21 Request for amendment.
1205.22 Action on request.
1205.23 Time limits.

                            Subpart D_Appeals

1205.31 Submitting appeal.
1205.32 Decision on appeal.

    Authority: 5 U.S.C. 552a and 1204.

    Source: 64 FR 51043, Sept. 21, 1999, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 1205.1  Purpose.

    This subpart implements the Privacy Act of 1974, 5 U.S.C. 552a, 
(``the Act'') by stating the procedures by which individuals may 
determine the existence of, seek access to, and request amendment of 
Board records concerning themselves, and by stating the requirements 
that apply to Board employees' use and disclosure of those records.



Sec. 1205.2  Policy and scope.

    The Board's policy is to apply these regulations to all records that 
can be retrieved from a system of records under the Board's control by 
using an individual's name or by using a number, symbol, or other way to 
identify the individual. These regulations, however, do not govern the 
rights of the parties in adversary proceedings before the Board to 
obtain discovery from adverse parties; those rights are governed by part 
1201 and part 1209 of this chapter. These regulations also are not meant 
to allow the alteration, either before or after the Board has issued a 
decision on an appeal, of evidence presented during the Board's 
adjudication of the appeal.



Sec. 1205.3  Definitions.

    The definitions of 5 U.S.C. 552a apply to this part. In addition, as 
used in this part:
    (a) Inquiry means a request by an individual regarding whether the 
Board has a record that refers to that individual.
    (b) Request for access means a request by an individual to look at 
or copy a record.
    (c) Request for amendment means a request by an individual to change 
the substance of a particular record by addition, deletion, or other 
correction.
    (d) Requester means the individual requesting access to or amendment 
of a record. The individual may be either the person to whom the 
requested record refers, a legal guardian acting on behalf of the 
individual, or a representative designated by that individual.



Sec. 1205.4  Disclosure of Privacy Act records.

    (a) Except as provided in 5 U.S.C. 552a(b), the Board will not 
disclose any personal record information from systems of records it 
maintains to any individual other than the individual to whom the record 
refers, or to any other agency, without the express written consent of 
the individual to whom the record refers, or his or her representative 
or attorney.
    (b) The Board's staff will take necessary steps, in accordance with 
the law and these regulations, to protect the security and integrity of 
the records and the personal privacy interests of the subjects of the 
records.



               Subpart B_Procedures for Obtaining Records



Sec. 1205.11  Access to Board records.

    (a) Submission of request. Inquiries or requests for access to 
records must be submitted to the appropriate regional or field office of 
the Board, or to the Clerk of the Board, U.S. Merit Systems Protection 
Board, 1615 M Street, NW., Washington, DC 20419-0001. If the requester 
has reason to believe that the records are located in a regional or 
field office, the request must be submitted to that office. Requests 
submitted to the regional or field office must be addressed to the 
Regional Director or Chief Administrative Judge

[[Page 69]]

at the appropriate regional or field office listed in appendix II of 5 
CFR part 1201.
    (b) Form. Each submission must contain the following information:
    (1) The name, address, and telephone number of the individual to 
whom the record refers;
    (2) The name, address, and telephone number of the individual making 
the request if the requester is someone other than the person to whom 
the record refers, such as a legal guardian or an attorney, along with 
evidence of the relationship. Evidence of the relationship may consist 
of an authenticated copy of:
    (i) The birth certificate of the minor child, and
    (ii) The court document appointing the individual legal guardian, or
    (iii) An agreement for representation signed by the individual to 
whom the record refers;
    (3) Any additional information that may assist the Board in 
responding to the request, such as the name of the agency that may have 
taken an action against an individual, or the docket number of the 
individual's case;
    (4) The date of the inquiry or request;
    (5) The inquirer's or requester's signature; and
    (6) A conspicuous indication, both on the envelope and the letter, 
that the inquiry is a ``PRIVACY ACT REQUEST''.
    (c) Identification. Each submission must follow the identification 
requirements stated in Sec. 1205.13 of this part.
    (d) Payment. Records usually will not be released until fees have 
been received.

[64 FR 51043, Sept. 21, 1999, as amended at 65 FR 48886, Aug. 10, 2000]



Sec. 1205.12  Time limits and determinations.

    (a) Board determinations. The Board will acknowledge the request for 
access to records and make a determination on whether to grant it within 
20 workdays after it receives the request, except under the unusual 
circumstances described below:
    (1) When the Board needs to obtain the records from other Board 
offices or a Federal Records Center;
    (2) When it needs to obtain and examine a large number of records;
    (3) When it needs to consult with another agency that has a 
substantial interest in the records requested; or
    (4) When other extenuating circumstances prevent the Board from 
processing the request within the 20-day period.
    (b) Time extensions. When unusual circumstances exist, the Board may 
extend the time for making a determination on the request for no more 
than 10 additional workdays. If it does so, it will notify the requester 
of the extension.
    (c) Improper request. If a request or an appeal is not properly 
labeled, does not contain the necessary identifying information, or is 
submitted to the wrong office, the time period for processing the 
request will begin when the correct official receives the properly 
labeled request and the necessary information.
    (d) Determining officials. The Clerk of the Board, a Regional 
Director, or a Chief Administrative Judge will make determinations on 
requests.

[64 FR 51043, Sept. 21, 1999; 64 FR 71267, Dec. 21, 1999]



Sec. 1205.13  Identification.

    (a) In person. Each requester must present satisfactory proof of 
identity. The following items, which are listed in order of the Board's 
preference, are acceptable proof of the requester's identity when the 
request is made in person:
    (1) A document showing the requester's photograph;
    (2) A document showing the requester's signature; or
    (3) If the items described in paragraphs (a)(1) and (2) of the 
section are not available, a signed statement in which the requester 
asserts his or her identity and acknowledges understanding that 
misrepresentation of identity in order to obtain a record is a 
misdemeanor and subject to a fine of up to $5,000 under 5 U.S.C. 
552a(i)(3).
    (b) By mail. The identification of a requester making a request by 
mail must be certified by a notary public or equivalent official or 
contain other information to identify the requester. Information could 
be the date of birth of

[[Page 70]]

the requester and some item of information in the record that only the 
requester would be likely to know.
    (c) Parents of minors, legal guardians, and representatives. Parents 
of minors, legal guardians, and representatives must submit 
identification under paragraph (a) or (b) of this section. Additionally, 
they must present an authenticated copy of:
    (1) The minor's birth certificate, and
    (2) The court order of guardianship, or
    (3) The agreement of representation, where appropriate.



Sec. 1205.14  Granting access.

    (a) The Board may allow a requester to inspect records through 
either of the following methods:
    (1) It may permit the requester to inspect the records personally 
during normal business hours at a Board office or other suitable Federal 
facility closer to the requester; or
    (2) It may mail copies of the records to the requester.
    (b) A requester seeking personal access to records may be 
accompanied by another individual of the requester's choice. Under those 
circumstances, however, the requester must sign a statement authorizing 
the discussion and presentation of the record in the accompanying 
individual s presence.



Sec. 1205.15  Denying access.

    (a) Basis. In accordance with 5 U.S.C. 552a(k)(2), the Board may 
deny access to records that are of an investigatory nature and that are 
compiled for law enforcement purposes. Those requests will be denied 
only where access to them would otherwise be unavailable under Exemption 
(b)(7) of the Freedom of Information Act.
    (b) Form. All denials of access under this section will be made in 
writing and will notify the requester of the right to judicial review.



Sec. 1205.16  Fees.

    (a) No fees will be charged except for making copies of records.
    (b) Photocopies of records duplicated by the Board will be subject 
to a charge of 20 cents a page.
    (c) If the fee to be assessed for any request is less than $100 (the 
cost to the Board of processing and collecting the fee), no charge will 
be made to the requester.
    (d) Fees for copying audio tapes and computer records will be 
charged at a rate representing the actual costs to the Board, as shown 
in paragraphs (d)(1) through (d)(3) of this section.
    (1) Audio tapes will be provided at a charge not to exceed $15 for 
each cassette tape.
    (2) Computer printouts will be provided at a charge of 10 cents a 
page.
    (3) Records reproduced on computer tapes, computer diskettes, or 
other electronic media, will be provided at the actual cost to the 
Board.
    (e) The Board will provide one copy of the amended parts of any 
record it amends free of charge as evidence of the amendment.



                     Subpart C_Amendment of Records



Sec. 1205.21  Request for amendment.

    A request for amendment of a record must be submitted to the 
Regional Director or Chief Administrative Judge of the appropriate 
regional or field office, or to the Clerk of the Board, U.S. Merit 
Systems Protection Board, 1615 M Street, NW., Washington, DC 20419-0001, 
depending on which office has custody of the record. The request must be 
in writing, must be identified conspicuously on the outside of the 
envelope and the letter as a ``PRIVACY ACT REQUEST,'' and must include 
the following information:
    (a) An identification of the record to be amended;
    (b) A description of the amendment requested; and
    (c) A statement of the basis for the amendment, along with 
supporting documentation, if any.

[64 FR 51043, Sept. 21, 1999, as amended at 65 FR 48886, Aug. 10, 2000]



Sec. 1205.22  Action on request.

    (a) Amendment granted. If the Board grants the request for 
amendment, it will notify the requester and provide him or her with a 
copy of the amendment.
    (b) Amendment denied. If the Board denies the request for amendment 
in

[[Page 71]]

whole or in part, it will provide the requester with a written notice 
that includes the following information:
    (1) The basis for the denial; and
    (2) The procedures for appealing the denial.



Sec. 1205.23  Time limits.

    The Clerk of the Board, Regional Director, or Chief Administrative 
Judge will acknowledge a request for amendment within 10 workdays of 
receipt of the request in the appropriate office except under the 
unusual circumstances described in paragraphs (a)(1) through (a)(4) of 
Sec. 1205.12 of this part.



                            Subpart D_Appeals



Sec. 1205.31  Submitting appeal.

    (a) A partial or complete denial, by the Clerk of the Board, by the 
Regional Director, or by the Chief Administrative Judge, of a request 
for amendment may be appealed to the Chairman, Merit Systems Protection 
Board, 1615 M Street, NW., Washington, DC 20419-0001 within 10 workdays 
from the date of the denial.
    (b) Any appeal must be in writing, must be clearly and conspicuously 
identified as a Privacy Act appeal on both the envelope and letter, and 
must include:
    (1) A copy of the original request for amendment of the record;
    (2) A copy of the denial; and
    (3) A statement of the reasons why the original denial should be 
overruled.

[64 FR 51043, Sept. 21, 1999, as amended at 65 FR 48886, Aug. 10, 2000]



Sec. 1205.32  Decision on appeal.

    (a) The Chairman will decide the appeal within 30 workdays unless 
the Chairman determines that there is good cause for extension of that 
deadline. If an appeal is improperly labeled, does not contain the 
necessary information, or is submitted to an inappropriate official, the 
time period for processing that appeal will begin when the Chairman 
receives the appeal and the necessary information.
    (b) If the request for amendment of a record is granted on appeal, 
the Chairman will direct that the amendment be made. A copy of the 
amended record will be provided to the requester.
    (c) If the request for amendment of a record is denied, the Chairman 
will notify the requester of the denial and will inform the requester 
of:
    (1) The basis for the denial;
    (2) The right to judicial review of the decision under 5 U.S.C. 
552a(g)(1)(A); and
    (3) The right to file a concise statement with the Board stating the 
reasons why the requester disagrees with the denial. This statement will 
become a part of the requester's record.



PART 1206_OPEN MEETINGS--Table of Contents




                      Subpart A_Purpose and Policy

Sec.
1206.1 Purpose.
1206.2 Policy.
1206.3 Definitions.

                          Subpart B_Procedures

1206.4 Notice of meeting.
1206.5 Change in meeting plans after notice.
1206.6 Decision to close meeting.
1206.7 Record of meetings.
1206.8 Providing information to the public.
1206.9 Procedures for expedited closing of meetings.

                      Subpart C_Conduct of Meetings

1206.11 Meeting place.
1206.12 Role of observers.

    Authority: 5 U.S.C. 552b.

    Source: 54 FR 20367, May 11, 1989, unless otherwise noted.



                      Subpart A_Purpose and Policy



Sec. 1206.1  Purpose.

    The purpose of this part is to prescribe the procedures by which the 
Board will conduct open meetings in accordance with the Government in 
the Sunshine Act (5 U.S.C. 552b) (``the Act'').



Sec. 1206.2  Policy.

    The Board will provide the public with the fullest practicable 
information regarding its decision-making processes, while protecting 
individuals' rights and the Board's ability to carry out its 
responsibilities. Meetings at

[[Page 72]]

which the Board members jointly conduct or dispose of official business 
are presumptively open to the public. The Board will close those 
meetings in whole or in part only in accordance with the exemptions 
provided under 5 U.S.C. 552b(c), and only when doing so is in the public 
interest.



Sec. 1206.3  Definitions.

    The following definitions apply to this part:
    (a) Meeting means deliberations of at least two Board members that 
determine or result in the joint conduct of official Board business.
    (b) Member means one of the members of the Merit Systems Protection 
Board.



                          Subpart B_Procedures



Sec. 1206.4  Notice of meeting.

    (a) Notice of a Board meeting will be published in the Federal 
Register at least one week before the meeting. Each notice will include 
the following information:
    (1) The time of the meeting;
    (2) The place where the meeting will be held;
    (3) The subject and agenda of the meeting;
    (4) Whether the meeting is to be open to the public or closed; and
    (5) The name and telephone number of a Board official responsible 
for receiving inquiries regarding the meeting.
    (b) The Board, by majority vote, may provide less than one week's 
notice. When it does so, however, it will provide notice of the meeting 
at the earliest practicable time.



Sec. 1206.5  Change in meeting plans after notice.

    (a) After notice of a meeting has been published, the Board may 
change the time or place of the meeting only if it announces the change 
publicly at the earliest practicable time.
    (b) After notice of a meeting has been published, the Board may not 
change either the subject matter of the meeting or the decision that the 
meeting will be open to the public or closed unless both of the 
following conditions are met:
    (1) By majority, recorded vote, the Board members determine that 
Board business requires the change and that no earlier announcement of 
the change was possible; and
    (2) Notice of the change, and of the individual Board members' vote, 
is published in the Federal Register at the earliest practicable time.



Sec. 1206.6  Decision to close meeting.

    (a) Basis. The Board, by majority vote, may decide to close a 
meeting in accordance with the provisions of 5 U.S.C. 552b(c)(1) to 
552b(c)(10) when closing the meeting is in the public interest.
    (b) General Counsel certification. For every meeting that is closed 
to the public in whole or in part, the General Counsel will certify that 
closing the meeting is proper, and will state the basis for that 
opinion.
    (c) Vote. Within one day after voting to close a meeting, the Board 
will make publicly available a record reflecting the vote of each 
member. In addition, within one day after any vote to close a portion or 
portions of a meeting to the public, the Board will make publicly 
available a full written explanation of its decision to close the 
meeting, together with a list naming all persons expected to attend the 
meeting and identifying their affiliation, unless that disclosure would 
reveal the information that the meeting was closed to protect.



Sec. 1206.7  Record of meetings.

    (a) Closed Meeting. When the Board has decided to close a meeting in 
whole or in part, it will maintain the following record:
    (1) A transcript or recording of the proceeding;
    (2) A copy of the General Counsel's certification under Sec. 
1206.6(b) of this part;
    (3) A statement from the presiding official specifying the time and 
place of the meeting and naming the persons present; and
    (4) A record (which may be part of the transcript) of all votes and 
all documents considered at the meeting.
    (b) Open meeting. Transcripts or other records will be made of all 
open meetings of the Board. Those records will be

[[Page 73]]

made available upon request at a fee representing the Board's actual 
cost of making them available.

[54 FR 20367, May 11, 1989, as amended at 54 FR 28664, July 6, 1989]



Sec. 1206.8  Providing information to the public.

    Information available to the public under this part will be made 
available by the Office of the Clerk of the Board, U.S. Merit Systems 
Protection Board, 1615 M Street, NW., Washington, DC 20419. Individuals 
or organizations with a special interest in activities of the Board may 
ask the Office of the Clerk to have them placed on a mailing list for 
receipt of information available under this part.

[54 FR 20367, May 11, 1989, as amended at 65 FR 48886, Aug. 10, 2000]



Sec. 1206.9  Procedures for expedited closing of meetings.

    Instead of following the procedures described in Sec. Sec. 1206.4 
through 1206.8 of this part, and in Sec. Sec. 1206.11 and 1206.12, the 
Board may expedite the closing of its meetings under the following 
conditions by using the following procedures:
    (a) Finding. (1) Most regular Board business consists of reviewing 
initial decisions in cases adjudicated after an opportunity for a 
hearing has been provided. Based on a review of this circumstance, the 
legislative history of the Civil Service Reform Act of 1978 (Pub. L. 95-
454), the Government in the Sunshine Act (5 U.S.C. 552b), and the 
Board's regulations at 5 CFR part 1201, the Board finds that a majority 
of its meetings may properly be closed to the public under 5 U.S.C. 
552b(c)(10) and 552b(d)(4).
    (2) Absent a compelling public interest to the contrary, meetings or 
portions of meetings that can be expected to be closed under these 
procedures include meetings held to consider the following: Petitions 
for review or cases that have been or may be reopened under 5 CFR 
1201.114 through 1201.117; proposals to take action against 
administrative law judges under 5 CFR 1201.131 through 1201.136; and 
actions brought by the Special Counsel under 5 CFR 1201.129.
    (b) Announcement. The Board will announce publicly, at the earliest 
practicable time, the time, place, and subject matter of meetings or 
portions of meetings that are closed under this provision.
    (c) Procedure for closing meetings under this section. At the 
beginning of a meeting or portion of a meeting that is to be closed 
under this section, the Board may, by recorded vote of two of its 
members, decide to close the meeting or a portion of it to public 
observation. The Board may take this action, however, only after it 
receives a certification by the General Counsel under Sec. 1206.6(b) of 
this part.
    (d) Record Availability. When the Board has closed a meeting or 
portion of a meeting under this paragraph, it will make the following 
available as soon as practicable:
    (1) A written record reflecting the vote of each participating 
member of the Board with respect to closing the meeting; and
    (2) The General Counsel certification under Sec. 1206.6(b).



                      Subpart C_Conduct of Meetings



Sec. 1206.11  Meeting place.

    The Board will hold open meetings in meeting rooms designated in the 
public announcements of those meetings. Whenever the number of observers 
is greater than can be accommodated in the designated meeting room, 
however, it will make alternative facilities available to the extent 
possible.



Sec. 1206.12  Role of observers.

    The public may attend open meetings for the sole purpose of 
observation. Observers may not participate in the meetings unless they 
are expressly invited to do so. They also may not create distractions 
that interfere with the conduct and disposition of Board business, and 
they may be asked to leave if they do so. Observers of meetings that are 
partially closed must leave the meeting room when they are asked to do 
so.

[[Page 74]]



PART 1207_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF DISABILITY IN 

PROGRAMS OR ACTIVITIES CONDUCTED BY THE MERIT SYSTEMS PROTECTION BOARD--Table 

of Contents




Sec.
1207.101 Purpose.
1207.102 Application.
1207.103 Definitions.
1207.104-1207.109 [Reserved]
1207.110 Notice.
1207.111-1207.119 [Reserved]
1207.120 General prohibitions against discrimination.
1207.121-1207.129 [Reserved]
1207.130 Employment.
1207.131-1207.139 [Reserved]
1207.140 Program accessibility: Discrimination prohibited.
1207.141-1207.149 [Reserved]
1207.150 Program accessibility: Existing facilities.
1207.151 Program accessibility: New construction and alterations.
1207.152-1207.159 [Reserved]
1207.160 Communications.
1207.161-1207.169 [Reserved]
1207.170 Compliance procedures.
1207.171-1207.999 [Reserved]

    Authority: 29 U.S.C. 794.

    Source: 70 FR 24293, May 9, 2005, unless otherwise noted.



Sec. 1207.101  Purpose.

    The purpose of this part is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit discrimination on the basis of disability in 
programs or activities conducted by Executive agencies or the United 
States Postal Service.



Sec. 1207.102  Application.

    This part applies to all programs or activities conducted by the 
agency, except for programs or activities conducted outside the United 
States that do not involve individuals with disabilities in the United 
States.



Sec. 1207.103  Definitions.

    (a) Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    (b) Auxiliary aids means services or devices that enable persons 
with impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TDDs), interpreters, notetakers, written 
materials, and other similar services and devices.
    (c) Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    (d) Days means calendar days, unless otherwise stated.
    (e) Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    (f) Historic preservation programs means programs conducted by the 
agency that have preservation of historic properties as a primary 
purpose.
    (g) Historic properties means those properties that are listed or 
eligible for listing in the National Register of Historic Places or 
properties designated as historic under a statute of the appropriate 
State or local government body.
    (h) Individual with a disability means any person who has a physical 
or mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment. The following phrases used in this definition are 
further defined as follows:

[[Page 75]]

    (1) Physical or mental impairment includes--
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities.
    (iii) Also, physical and mental impairment includes, but is not 
limited to, such diseases and conditions as orthopedic, visual, speech, 
and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, 
multiple sclerosis, cancer, heart disease, diabetes, mental retardation, 
emotional illness, and drug addiction and alcoholism.
    (2) Major life activities include functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (i) of this 
definition but is treated by the agency as having such an impairment.
    (i) Qualified individual with a disability means--
    (1) With respect to any agency program or activity under which a 
person is required to perform services or to achieve a level of 
accomplishment, an individual with a disability who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
agency can demonstrate would result in a fundamental alteration in its 
nature;
    (2) With respect to any other program or activity, an individual 
with a disability who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (3) Qualified disabled person as that term is defined for purposes 
of employment in 29 CFR 1614.203, which is made applicable to this part 
by Sec. 1207.130.
    (j) Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the 
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617); 
the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); and the 
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810). 
As used in this part, section 504 applies only to programs or activities 
conducted by Executive agencies and not to federally assisted programs.



Sec. Sec. 1207.104-1207.109  [Reserved]



Sec. 1207.110  Notice.

    The agency shall make available to employees, applicants, 
participants, and other interested parties such information regarding 
the provisions of this part and its applicability to the programs or 
activities conducted by the agency, and make such information available 
to them in such manner as the head of the agency finds necessary to 
apprise such persons of the protections against discrimination assured 
them by section 504 and this part.



Sec. Sec. 1207.111-1207.119  [Reserved]



Sec. 1207.120  General prohibitions against discrimination.

    (a) No qualified individual with a disability shall, on the basis of 
such disability, be excluded from participation in, be denied the 
benefits of, or otherwise be subjected to discrimination under any 
program or activity conducted by the agency.

[[Page 76]]

    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of disability--
    (i) Deny a qualified individual with a disability the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with a disability an opportunity 
to participate in or benefit from the aid, benefit, or service that is 
not equal to that afforded others;
    (iii) Provide a qualified individual with a disability with an aid, 
benefit, or service that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with disabilities or to any class of individuals with 
disabilities than is provided to others unless such action is necessary 
to provide qualified individuals with disabilities with aid, benefits, 
or services that are as effective as those provided to others;
    (v) Deny a qualified individual with a disability the opportunity to 
participate as a member of planning or advisory boards;
    (vi) Otherwise limit a qualified individual with a disability in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) A qualified individual with a disability may not be excluded 
from participation in any of the agency's programs or activities, even 
though permissibly separate or different programs or activities exist.
    (3) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified individuals with disabilities to 
discrimination on the basis of disability; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with disabilities.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with disabilities from, deny them the 
benefits of, or otherwise subject them to discrimination under any 
program or activity conducted by the agency, or;
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
disabilities.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with disabilities to 
discrimination on the basis of disability.
    (6) The agency may not administer a licensing or certification 
program in a manner that subjects qualified individuals with 
disabilities to discrimination on the basis of disability, nor may the 
agency establish requirements for the programs or activities of 
licensees or certified entities that subject qualified individuals with 
disabilities to discrimination on the basis of disability. However, the 
programs or activities of entities that are licensed or certified by the 
agency are not, themselves, covered by this part.
    (c) The exclusion of nondisabled persons from the benefits of a 
program limited by Federal statute or Executive order to individuals 
with disabilities or the exclusion of a specific class of individuals 
with disabilities from a program limited by Federal statute or Executive 
order to a different class of individuals with disabilities is not 
prohibited by this part.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with disabilities.



Sec. Sec. 1207.121-1207.129  [Reserved]



Sec. 1207.130  Employment.

    No qualified individual with a disability shall, on the basis of 
such disability, be subject to discrimination in employment under any 
program or activity conducted by the agency. The definitions, 
requirements, and procedures of section 501 of the Rehabilitation Act of 
1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity 
Commission in 29 CFR part

[[Page 77]]

1614, shall apply to employment in federally conducted programs or 
activities.



Sec. Sec. 1207.131-1207.139  [Reserved]



Sec. 1207.140  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 1207.150, no qualified 
individual with disabilities shall, because the agency's facilities are 
inaccessible to or unusable by individuals with disabilities, be denied 
the benefits of, be excluded from participation in, or otherwise be 
subjected to discrimination under any program or activity conducted by 
the agency.



Sec. Sec. 1207.141-1207.149  [Reserved]



Sec. 1207.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with disabilities. This 
paragraph does not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with disabilities;
    (2) In the case of historic preservation programs, require the 
agency to take any action that would result in a substantial impairment 
of significant historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec. 1207.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that would not result in 
such an alteration or such burdens but would nevertheless ensure that 
individuals with disabilities receive the benefits and services of the 
program or activity.
    (b) Methods--(1) General. The agency may comply with the 
requirements of this section through such means as redesign of 
equipment, reassignment of services to accessible buildings, assignment 
of aides to beneficiaries, home visits, delivery of services at 
alternate accessible sites, alteration of existing facilities and 
construction of new facilities, use of accessible rolling stock, or any 
other methods that result in making its programs or activities readily 
accessible to and usable by individuals with disabilities. The agency is 
not required to make structural changes in existing facilities where 
other methods are effective in achieving compliance with this section. 
The agency, in making alterations to existing buildings, shall meet 
accessibility requirements to the extent compelled by the Architectural 
Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any 
regulations implementing it. In choosing among available methods for 
meeting the requirements of this section, the agency shall give priority 
to those methods that offer programs and activities to qualified 
individuals with disabilities in the most integrated setting 
appropriate.
    (2) Historic preservation programs. In meeting the requirements of 
Sec. 1207.150(a) in historic preservation programs, the agency shall 
give priority to methods that provide physical access to individuals 
with disabilities. In cases where a physical alteration to an historic 
property is not required because of Sec. 1207.150(a)(2) or (3), 
alternative methods of achieving program accessibility include--
    (i) Using audio-visual materials and devices to depict those 
portions of an historic property that cannot otherwise be made 
accessible;
    (ii) Assigning persons to guide individuals with disabilities into 
or through portions of historic properties

[[Page 78]]

that cannot otherwise be made accessible; or
    (iii) Adopting other innovative methods.



Sec. 1207.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to and usable by 
individuals with disabilities. The definitions, requirements, and 
standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as 
established in 41 CFR 101-19.600 to 101-19.607, apply to buildings 
covered by this section.



Sec. Sec. 1207.152-1207.159  [Reserved]



Sec. 1207.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with a disability an equal opportunity 
to participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall give primary consideration to the requests of the 
individual with a disability.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with parties by telephone, 
telecommunication devices for deaf persons or equally effective 
telecommunication systems shall be used to communicate with persons with 
impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec. 1207.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such an alteration or such burdens, the agency 
shall take any other action that would not result in such an alteration 
or such burdens but would nevertheless ensure that, to the maximum 
extent possible, individuals with disabilities receive the benefits and 
services of the program or activity.



Sec. Sec. 1207.161-1207.169  [Reserved]



Sec. 1207.170  Compliance procedures.

    (a) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1614 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (b) Allegations of discrimination in the adjudication of a Board 
case. (1) When a party to a case pending before any of the Board's 
judges believes he or she has been subjected to discrimination on the 
basis of disability in the adjudication of the case, the party may raise 
the allegation in a pleading filed with the judge and served on all 
other

[[Page 79]]

parties in accordance with 5 CFR 1201.26(b)(2).
    (2) An allegation of discrimination in the adjudication of a Board 
case must be raised within 10 days of the alleged act of discrimination 
or within 10 days from the date the complainant should reasonably have 
known of the alleged discrimination. If the complainant does not submit 
a complaint within that time period, it will be dismissed as untimely 
filed unless a good reason for the delay is shown.
    (3) The judge to whom the case is assigned shall decide the merits 
of any timely allegation that is raised at this stage of adjudication, 
and shall make findings and conclusions regarding the allegation either 
in an interim order or in the initial decision, recommended decision, or 
recommendation. Any request for reconsideration of the administrative 
judge's decision on the disability discrimination claim must be filed in 
accordance with the requirements of 5 CFR 1201.114 and 1201.115.
    (4) If the judge to whom the case was assigned has issued the 
initial decision, recommended decision, or recommendation by the time 
the party learns of the alleged discrimination, the party may raise the 
allegation in a petition for review, cross petition for review, or 
response to the petition or cross petition.
    (5) The Board shall decide the merits of any timely allegation that 
is raised at this stage of adjudication in a final decision.
    (c) All complaints of discrimination on the basis of disability in 
programs and activities conducted by the agency, except for those 
described in paragraphs (a) and (b) of this section, shall be filed 
under the procedures described in this paragraph.
    (1) Who may file. Any person who believes that he or she has been 
subjected to discrimination prohibited by this part, or authorized 
representative of such person, may file a complaint. Any person who 
believes that any specific class of persons has been subjected to 
discrimination prohibited by this part and who is a member of that class 
or the authorized representative of a member of that class may file a 
complaint. A charge on behalf of a person or member of a class of 
persons claiming to be aggrieved may be made by any person, agency or 
organization.
    (2) Where and when to file. Complaints shall be filed with the 
Director, Office of Equal Employment Opportunity (EEO Director), Merit 
Systems Protection Board, 1615 M Street, NW., Washington DC 20419, or e-
mailed to [email protected], within thirty-five (35) calendar 
days of the alleged act of discrimination. A complaint filed by personal 
delivery is considered filed on the date it is received by the EEO 
Director. The date of filing by facsimile or e-mail is the date the 
facsimile or e-mail is sent. The date of filing by mail is determined by 
the postmark date; if no legible postmark date appears on the mailing, 
the submission is presumed to have been mailed five days (excluding days 
on which the Board is closed for business) before its receipt. The date 
of filing by commercial overnight delivery is the date the document was 
delivered to the commercial overnight delivery service. The agency shall 
extend the time period for filing a complaint upon a showing of good 
cause. For example, the agency shall extend this time limit if a 
complainant shows that he or she was prevented by circumstances beyond 
his or her control from submitting the matter within the time limits.
    (3) Acceptance of complaint. (i) The agency shall accept a complete 
complaint that is filed in accordance with paragraph (c) of this section 
and over which it has jurisdiction. The EEO Director shall notify the 
complainant of receipt and acceptance of the complaint.
    (ii) If the EEO Director receives a complaint that is not complete, 
he or she shall notify the complainant that additional information is 
needed. If the complainant fails to complete the complaint and return it 
to the EEO Director within 15 days of his or her receipt of the request 
for additional information, the EEO Director shall dismiss the complaint 
with prejudice and shall so inform the complainant.
    (4) Within 60 days of the receipt of a complete complaint for which 
it has jurisdiction, the EEO Director shall notify the complainant of 
the results of the investigation in an initial decision containing--

[[Page 80]]

    (i) Findings of fact and conclusions of law;
    (ii) When applicable, a description of a remedy for each violation 
found; and
    (iii) A notice of the right to appeal.
    (5) Any appeal of the EEO Director's initial decision must be filed 
with the Chairman of the Board, Merit Systems Protection Board, 1615 M 
Street, NW., Washington, DC 20419 by the complainant within 35 days of 
the date the EEO Director issues the decision required by Sec. 
1207.170(c)(4). The agency may extend this time for good cause when a 
complainant shows that circumstances beyond his or her control prevented 
the filing of an appeal within the prescribed time limit. An appeal 
filed by personal delivery is considered filed on the date it is 
received by the Chairman. The date of filing by facsimile is the date of 
the facsimile. The date of filing by mail is determined by the postmark 
date; if no legible postmark date appears on the mailing, the submission 
is presumed to have been mailed five days (excluding days on which the 
Board is closed for business) before its receipt. The date of filing by 
commercial overnight delivery is the date the document was delivered to 
the commercial overnight delivery service. The appeal should be clearly 
marked ``Appeal of Section 504 Decision'' and must contain specific 
objections explaining why the person believes the initial decision was 
factually or legally wrong. A copy of the initial decision being 
appealed should be attached to the appeal letter.
    (6) A timely appeal shall be decided by the Chairman unless the 
Chairman determines, in his or her discretion, that the appeal raises 
policy issues and that the nature of those policy issues warrants a 
decision by the full Board. The full Board shall then decide such 
appeals.
    (7) The Chairman shall notify the complainant of the results of the 
appeal within sixty (60) days of the receipt of the request. If the 
Chairman determines that he or she needs additional information from the 
complainant, he or she shall have sixty (60) days from the date he or 
she receives the additional information to make his or her determination 
on the appeal.
    (8) The time limit stated in paragraph (c)(2) may be extended by the 
EEO Director to a period of up to 180 days, and may be extended further 
with the permission of the Assistant Attorney General. The time limit 
stated in paragraph (c)(5) may be extended by the Chairman to a period 
of up to 180 days, and may be extended further with the permission of 
the Assistant Attorney General.
    (9) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.
    (d) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to 
and usable by individuals with disabilities.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate entity.



Sec. Sec. 1207.171-1207.999  [Reserved]



PART 1208_PRACTICES AND PROCEDURES FOR APPEALS UNDER THE UNIFORMED SERVICES 

EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT AND THE VETERANS EMPLOYMENT 

OPPORTUNITIES ACT--Table of Contents




                 Subpart A_Jurisdiction and Definitions

Sec.
1208.1 Scope.
1208.2 Jurisdiction.
1208.3 Application of 5 CFR part 1201.
1208.4 Definitions.

                        Subpart B_USERRA Appeals

1208.11 Choice of procedure under USERRA; exhaustion requirement.
1208.12 Time of filing.
1208.13 Content of appeal; request for hearing.
1208.14 Representation by Special Counsel.
1208.15 Remedies.

[[Page 81]]

1208.16 Appeals under another law, rule, or regulation.

                         Subpart C_VEOA Appeals

1208.21 VEOA exhaustion requirement.
1208.22 Time of filing.
1208.23 Content of appeal; request for hearing.
1208.24 Election to terminate MSPB proceeding.
1208.25 Remedies.
1208.26 Appeals under another law, rule, or regulation.

    Authority: 5 U.S.C. 1204(h), 3330a, 3330b; 38 U.S.C. 4331.

    Source: 65 FR 5412, Feb. 4, 2000, unless otherwise noted.



                 Subpart A_Jurisdiction and Definitions



Sec. 1208.1  Scope.

    This part governs appeals filed with the Board under the provisions 
of 38 U.S.C. 4324, as enacted by the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (USERRA), Public Law 103-353, as 
amended, or under the provisions of 5 U.S.C. 3330a, as enacted by the 
Veterans Employment Opportunities Act of 1998 (VEOA), Public Law 105-
339. With respect to USERRA appeals, this part applies to any appeal 
filed with the Board on or after October 13, 1994, without regard as to 
whether the alleged violation occurred before, on, or after October 13, 
1994. With respect to VEOA appeals, this part applies to any appeal 
filed with the Board which alleges that a violation occurred on or after 
October 31, 1998.



Sec. 1208.2  Jurisdiction.

    (a) USERRA. Under 38 U.S.C. 4324, a person entitled to the rights 
and benefits provided by chapter 43 of title 38, United States Code, may 
file an appeal with the Board alleging that a Federal agency employer or 
the Office of Personnel Management has failed or refused, or is about to 
fail or refuse, to comply with a provision of that chapter (other than a 
provision relating to benefits under the Thrift Savings Plan for Federal 
employees). In general, the provisions of chapter 43 of title 38 that 
apply to Federal employees guarantee various reemployment rights 
following a period of service in a uniformed service, provided the 
employee satisfies the requirements for coverage under that chapter. In 
addition, chapter 43 of title 38 prohibits discrimination based on a 
person's service--or application or obligation for service--in a 
uniformed service (38 U.S.C. 4311). This prohibition applies with 
respect to initial employment, reemployment, retention in employment, 
promotion, or any benefit of employment.
    (b) VEOA. Under 5 U.S.C. 3330a, a preference eligible who alleges 
that a Federal agency has violated his rights under any statute or 
regulation relating to veterans' preference may file an appeal with the 
Board, provided that he has satisfied the statutory requirements for 
first filing a complaint with the Secretary of Labor and allowing the 
Secretary at least 60 days to attempt to resolve the complaint.



Sec. 1208.3  Application of 5 CFR part 1201.

    Except as expressly provided in this part, the Board will apply 
subparts A (Jurisdiction and Definitions), B (Procedures for Appellate 
Cases), C (Petitions for Review of Initial Decisions), and F 
(Enforcement of Final Decisions and Orders) of 5 CFR part 1201 to 
appeals governed by this part. The Board will apply the provisions of 
subpart H (Attorney Fees, and Litigation Expenses, Where Applicable), 
Consequential Damages, and Compensatory Damages) of 5 CFR part 1201 
regarding awards of attorney fees to appeals governed by this part.



Sec. 1208.4  Definitions.

    (a) Appeal. ``Appeal'' means a request for review of an agency 
action (the same meaning as in 5 CFR Sec. 1201.4(f)) and includes a 
``complaint'' or ``action'' as those terms are used in USERRA (38 U.S.C. 
4324) and a ``complaint'' or ``appeal'' as those terms are used in VEOA 
(5 U.S.C. 3330a).
    (b) Preference eligible. ``Preference eligible'' is defined in 5 
U.S.C. 2108.
    (c) USERRA appeal. ``USERRA appeal'' means an appeal filed under 38 
U.S.C. 4324, as enacted by the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (Public

[[Page 82]]

Law 103-353), as amended. The term includes an appeal that alleges a 
violation of a predecessor statutory provision of chapter 43 of title 
38, United States Code.
    (d) VEOA appeal. ``VEOA appeal'' means an appeal filed under 5 
U.S.C. 3330a, as enacted by the Veterans Employment Opportunities Act of 
1998 (Public Law 105-339).



                        Subpart B_USERRA Appeals



Sec. 1208.11  Choice of procedure under USERRA; exhaustion requirement.

    (a) Choice of procedure. An appellant may file a USERRA appeal 
directly with the Board under this subpart or may file a complaint with 
the Secretary of Labor under 38 U.S.C. 4322.
    (b) Exhaustion requirement. If an appellant files a complaint with 
the Secretary of Labor under 38 U.S.C. 4322, the appellant may not file 
a USERRA appeal with the Board until the Secretary notifies the 
appellant in accordance with 38 U.S.C. 4322(e) that the Secretary's 
efforts have not resolved the complaint. An appellant who seeks 
assistance from the Secretary of Labor under 38 U.S.C. 4321 but does not 
file a complaint with the Secretary under 38 U.S.C. 4322 is not subject 
to the exhaustion requirement of this paragraph.
    (c) Appeals after exhaustion of Department of Labor procedure. When 
an appellant receives notice from the Secretary of Labor in accordance 
with 38 U.S.C. 4322(e) that the Secretary's efforts have not resolved 
the complaint, the appellant may file a USERRA appeal directly with the 
Board or may ask the Secretary to refer the complaint to the Special 
Counsel. If the Special Counsel agrees to represent the appellant, the 
Special Counsel may file a USERRA appeal directly with the Board. If the 
Special Counsel does not agree to represent the appellant, the appellant 
may file a USERRA appeal directly with the Board.

[65 FR 5412, Feb. 4, 2000, as amended at 65 FR 49896, Aug. 16, 2000]



Sec. 1208.12  Time of filing.

    Under chapter 43 of title 38, United States Code, there is no time 
limit for filing a USERRA appeal with the Board. However, the Board 
encourages appellants to file a USERRA appeal as soon as possible after 
the date of the alleged violation or, if a complaint is filed with the 
Secretary of Labor, as soon as possible after receiving notice from the 
Secretary in accordance with 38 U.S.C. 4322(e) that the Secretary's 
efforts have not resolved the complaint, or, if the Secretary has 
referred the complaint to the Special Counsel and the Special Counsel 
does not agree to represent the appellant, as soon as possible after 
receiving the Special Counsel's notice.

[65 FR 5412, Feb. 4, 2000, as amended at 65 FR 49896, Aug. 16, 2000]



Sec. 1208.13  Content of appeal; request for hearing.

    (a) Content. A USERRA appeal may be in any format, including letter 
form, but must contain the following:
    (1) The nine (9) items or types of information required in 5 CFR 
1201.24(a)(1) through (a)(9);
    (2) Evidence or argument that the appellant has performed service in 
a uniformed service, including the dates of such service (or, where 
applicable, has applied for or has an obligation to perform such 
service), and that the appellant otherwise satisfies the requirements 
for coverage under chapter 43 of title 38, United States Code;
    (3) A statement describing in detail the basis for the appeal, that 
is, the protected right or benefit that was allegedly denied, including 
reference to the provision(s) of chapter 43 of title 38, United States 
Code, allegedly violated if possible.
    (4) If the appellant filed a complaint with the Secretary of Labor 
under 38 U.S.C. 4322(a), evidence of notice under 38 U.S.C. 4322(e) that 
the Secretary's efforts have not resolved the complaint (a copy of the 
Secretary's notice satisfies this requirement); and
    (5) If the appellant's complaint was referred to the Special Counsel 
and the appellant has received notice that the Special Counsel will not 
represent the appellant before the Board, evidence of the Special 
Counsel's notice (a copy of the Special Counsel's notice satisfies this 
requirement).
    (b) Request for hearing. An appellant must submit any request for a 
hearing with the USERRA appeal, or within

[[Page 83]]

any other time period the judge sets. A hearing may be provided to the 
appellant once the Board's jurisdiction over the appeal is established. 
The judge may also order a hearing if necessary to resolve issues of 
jurisdiction. The appellant has the burden of proof with respect to 
issues of jurisdiction (5 CFR 1201.56(a)(2)(i)).
    (c) Electronic filing. An appeal may be filed electronically by 
using the Board's e-Appeal site (https://e-appeal.mspb.gov) in 
accordance with Sec. 1201.14 of this chapter.

[65 FR 5412, Feb. 4, 2000, as amended at 65 FR 49896, Aug. 16, 2000; 68 
FR 59865, Oct. 20, 2003; 69 FR 57631, Sept. 27, 2004]



Sec. 1208.14  Representation by Special Counsel.

    The Special Counsel may represent an appellant in a USERRA appeal 
before the Board. A written statement (in any format) that the appellant 
submitted a written request to the Secretary of Labor that the 
appellant's complaint under 38 U.S.C. 4322(a) be referred to the Special 
Counsel for litigation before the Board, and that the Special Counsel 
has agreed to represent the appellant, will be accepted as the written 
designation of representative required by 5 CFR 1201.31(a). The 
designation of representative may be filed by electronic filing, 
provided the requirements of Sec. 1201.14 of this chapter are 
satisfied.

[69 FR 57631, Sept. 27, 2004]



Sec. 1208.15  Remedies.

    (a) Order for compliance. If the Board determines that a Federal 
agency employer or the Office of Personnel
    Management has not complied with a provision or provisions of 
chapter 43 of title 38, United States Code (other than a provision 
relating to benefits under the Thrift Savings Plan for Federal 
employees), the decision of the Board (either an initial decision of a 
judge under 5 CFR 1201.111 or a final Board decision under 5 CFR 
1201.117) will order the Federal agency employer or the Office of 
Personnel Management, as applicable, to comply with such provision(s) 
and to compensate the appellant for any loss of wages or benefits 
suffered by the appellant because of such lack of compliance. Under 38 
U.S.C. 4324(c)(3), any compensation received by the appellant pursuant 
to the Board's order shall be in addition to any other right or benefit 
provided for by chapter 43 of title 38, United States Code, and shall 
not diminish any such right or benefit.
    (b) Attorney fees and expenses. If the Board issues a decision 
ordering compliance under paragraph (a) of this section, the Board has 
discretion to order payment of reasonable attorney fees, expert witness 
fees, and other litigation expenses under 38 U.S.C. 4324(c)(4). The 
provisions of subpart H of part 1201 shall govern any proceeding for 
attorney fees and expenses.



Sec. 1208.16  Appeals under another law, rule, or regulation.

    Nothing in USERRA prevents an appellant who may appeal an agency 
action to the Board under any other law, rule, or regulation from 
raising a claim of a USERRA violation in that appeal. The Board will 
treat such a claim as an affirmative defense that the agency action was 
not in accordance with law (5 CFR 1201.56(b)(3)).



                         Subpart C_VEOA Appeals



Sec. 1208.21  VEOA exhaustion requirement.

    Before an appellant may file a VEOA appeal with the Board, the 
appellant must first file a complaint under 5 U.S.C. 3330a(a) with the 
Secretary of Labor within 60 days after the date of the alleged 
violation and allow the Secretary at least 60 days from the date the 
complaint is filed to attempt to resolve the complaint.



Sec. 1208.22  Time of filing.

    (a) Unless the Secretary of Labor has notified the appellant that 
the Secretary's efforts have not resolved the VEOA complaint, a VEOA 
appeal may not be filed with the Board before the 61st day after the 
date on which the appellant filed the complaint under 5 U.S.C. 3330a(a) 
with the Secretary.
    (b) If the Secretary of Labor notifies the appellant that the 
Secretary's efforts have not resolved the VEOA complaint and the 
appellant elects to appeal to the Board under 5 U.S.C.

[[Page 84]]

3330a(d), the appellant must file the VEOA appeal with the Board within 
15 days after the date of receipt of the Secretary's notice. A copy of 
the Secretary's notice must be submitted with the appeal.

[65 FR 5412, Feb. 4, 2000, as amended at 65 FR 49896, Aug. 16, 2000]



Sec. 1208.23  Content of appeal; request for hearing.

    (a) Content. A VEOA appeal may be in any format, including letter 
form, but must contain the following:
    (1) The nine (9) items or types of information required in 5 CFR 
1201.24(a)(1) through (a)(9);
    (2) Evidence or argument that the appellant is a preference 
eligible;
    (3) A statement identifying the statute or regulation relating to 
veterans' preference that was allegedly violated, an explanation of how 
the provision was violated, and the date of the violation;
    (4) Evidence that a complaint under 5 U.S.C. 3330a(a) was filed with 
the Secretary of Labor, including the date the complaint was filed; and
    (5)(i) Evidence that the Secretary has notified the appellant in 
accordance with 5 U.S.C. 3330a(c)(2) that the Secretary's efforts have 
not resolved the complaint (a copy of the Secretary's notice satisfies 
this requirement); or
    (ii) Evidence that the appellant has provided written notice to the 
Secretary of the appellant's intent to appeal to the Board, as required 
by 5 U.S.C. 3330a(d)(2) (a copy of the appellant's written notice to the 
Secretary satisfies this requirement).
    (b) Request for hearing. An appellant must submit any request for a 
hearing with the VEOA appeal, or within any other time period the judge 
sets. A hearing may be provided to the appellant once the Board's 
jurisdiction over the appeal is established and it has been determined 
that the appeal is timely. The judge may also order a hearing if 
necessary to resolve issues of jurisdiction or timeliness. The appellant 
has the burden of proof with respect to issues of jurisdiction and 
timeliness (5 CFR 1201.56(a)(2)(i) and (ii)).
    (c) Electronic filing. An appeal may be filed electronically by 
using the Board's e-Appeal site (https://e-appeal.mspb.gov) in 
accordance with Sec. 1201.14 of this chapter.

[65 FR 5412, Feb. 4, 2000, as amended at 65 FR 49896, Aug. 16, 2000; 68 
FR 59865, Oct. 20, 2003; 69 FR 57631, Sept. 27, 2004]



Sec. 1208.24  Election to terminate MSPB proceeding.

    (a) Election to terminate. At any time beginning on the 121st day 
after an appellant files a VEOA appeal with the Board, if a judicially 
reviewable Board decision on the appeal has not been issued, the 
appellant may elect to terminate the Board proceeding as provided under 
5 U.S.C. 3330b and file a civil action with an appropriate United States 
district court. Such election must be in writing, signed, filed with the 
Board office where the appeal is being processed, and served on the 
parties. The election is effective immediately on the date of receipt by 
the Board office where the appeal is being processed. The election may 
be filed by electronic filing, provided the requirements of Sec. 
1201.14 of this chapter are satisfied.
    (b) Termination order. Following receipt by the Board of an 
appellant's written election to terminate the Board proceeding, a 
termination order will be issued to document the termination of the 
proceeding. The termination order will state that the proceeding was 
terminated as of the date of receipt of the appellant's written 
election. Such an order is neither an initial decision under 5 CFR 
1201.111 nor a final Board decision and is not subject to a petition for 
review in accordance with subpart C of part 1201, a petition for 
enforcement in accordance with subpart F of part 1201, or a petition for 
judicial review.

[65 FR 5412, Feb. 4, 2000, as amended at 68 FR 59865, Oct. 20, 2003; 69 
FR 57631, Sept. 27, 2004]



Sec. 1208.25  Remedies.

    (a) Order for compliance. If the Board determines that a Federal 
agency has violated the appellant's VEOA rights, the decision of the 
Board (either an initial decision of a judge under 5 CFR 1201.111 or a 
final Board decision under 5 CFR 1201.117) will order the agency to 
comply with the statute or regulation violated and to compensate the 
appellant for any loss of wages or benefits

[[Page 85]]

suffered by the appellant because of the violation. If the Board 
determines that the violation was willful, it will order the agency to 
pay the appellant an amount equal to back pay as liquidated damages.
    (b) Attorney fees and expenses. If the Board issues a decision 
ordering compliance under paragraph (a) of this section, the Board will 
order payment of reasonable attorney fees, expert witness fees, and 
other litigation expenses. The provisions of subpart H of part 1201 
shall govern any proceeding for attorney fees and expenses.



Sec. 1208.26  Appeals under another law, rule, or regulation.

    (a) The VEOA provides that 5 U.S.C. 3330a shall not be construed to 
prohibit a preference eligible from appealing directly to the Board from 
any action that is appealable under any other law, rule, or regulation, 
in lieu of administrative redress under VEOA (5 U.S.C. 3330a(e)(1)). An 
appellant may not pursue redress for an alleged violation of veterans' 
preference under VEOA at the same time he pursues redress for such 
violation under any other law, rule, or regulation (5 U.S.C. 
3330a(e)(2)).
    (b) An appellant who elects to appeal to the Board under another 
law, rule, or regulation must comply with the provisions of subparts B 
and C of 5 CFR part 1201, including the time of filing requirement of 5 
CFR 1201.22(b)(1).



PART 1209_PRACTICES AND PROCEDURES FOR APPEALS AND STAY REQUESTS OF PERSONNEL 

ACTIONS ALLEGEDLY BASED ON WHISTLEBLOWING--Table of Contents




                 Subpart A_Jurisdiction and Definitions

Sec.
1209.1 Scope.
1209.2 Jurisdiction.
1209.3 Application of 5 CFR part 1201.
1209.4 Definitions.

                            Subpart B_Appeals

1209.5 Time of filing.
1209.6 Content of appeal; right to hearing.
1209.7 Burden and degree of proof.

                         Subpart C_Stay Requests

1209.8 Filing a request for a stay.
1209.9 Content of stay request and response.
1209.10 Hearing and order ruling on stay request.
1209.11 Duration of stay; interim compliance.

             Subpart D_Reports on Applications for Transfers

1209.12 Filing of agency reports.

               Subpart E_Referrals to the Special Counsel

1209.13 Referral of findings to the Special Counsel.

    Authority: 5 U.S.C. 1204, 1221, 2302(b)(8), and 7701.

    Source: 55 FR 28592, July 12, 1990, unless otherwise noted.



                 Subpart A_Jurisdiction and Definitions



Sec. 1209.1  Scope.

    This part governs any appeal or stay request filed with the Board by 
an employee, former employee, or applicant for employment where the 
appellant alleges that a personnel action defined in 5 U.S.C. 2302(a)(2) 
was threatened, proposed, taken, or not taken because of the appellant's 
whistleblowing activities. Included are individual right of action 
appeals authorized by 5 U.S.C. 1221(a), appeals of otherwise appealable 
actions allegedly based on the appellant's whistleblowing activities, 
and requests for stays of personnel actions allegedly based on 
whistleblowing.



Sec. 1209.2  Jurisdiction.

    (a) Under 5 U.S.C. 1214(a)(3), an employee, former employee, or 
applicant for employment may appeal to the Board from agency personnel 
actions alleged to have been threatened, proposed, taken, or not taken 
because of the appellant's whistleblowing activities.
    (b) The Board exercises jurisdiction over:
    (1) Individual right of action appeals. These are authorized by 5 
U.S.C. 1221(a) with respect to personnel actions listed in Sec. 
1209.4(a) of this part that are allegedly threatened, proposed, taken, 
or not taken because of the appellant's whistleblowing activities. If 
the action is not otherwise directly appealable to

[[Page 86]]

the Board, the appellant must seek corrective action from the Special 
Counsel before appealing to the Board.

    Example: Agency A gives Mr. X a performance evaluation under 5 
U.S.C. chapter 43 that rates him as ``minimally satisfactory.'' Mr. X 
believes that the agency has rated him ``minimally satisfactory'' 
because of his whistleblowing activities. Because a performance 
evaluation is not an otherwise appealable action, Mr. X must seek 
corrective action from the Special Counsel before appealing to the Board 
or before seeking a stay of the evaluation. If Mr. X appeals the 
evaluation to the Board after the Special Counsel proceeding is 
terminated or exhausted, his appeal is an individual right of action 
appeal.

    (2) Otherwise appealable action appeals. These are appeals to the 
Board under laws, rules, or regulations other than 5 U.S.C. 1221(a) that 
include an allegation that the action was based on the appellant's 
whistleblowing activities. The appellant may choose either to seek 
corrective action from the Special Counsel before appealing to the Board 
or to appeal directly to the Board. (Examples of such otherwise 
appealable actions are listed in 5 CFR 1201.3 (a)(1) through (a)(19).)

    Example: Agency B removes Ms. Y for alleged misconduct under 5 
U.S.C. 7513. Ms. Y believes that the agency removed her because of her 
whistleblowing activities. Because the removal action is appealable to 
the Board under some law, rule or regulation other than 5 U.S.C. 
1221(a), Ms. Y may choose to file an appeal with the Board without first 
seeking corrective action from the Special Counsel or to seek corrective 
action from the Special Counsel and then appeal to the Board.

    (3) Stays. Where the appellant alleges that a personnel action was 
or will be based on whistleblowing, the Board may, upon the appellant's 
request, order an agency to suspend that action.



Sec. 1209.3  Application of 5 CFR part 1201.

    Except as expressly provided in this part, the Board will apply 
subparts A, B, C, E, F, and G of 5 CFR part 1201 to appeals and stay 
requests governed by this part. The Board will apply the provisions of 
subpart H of part 1201 regarding awards of attorney fees and 
consequential damages under 5 U.S.C. 1221(g) to appeals governed by this 
part.

[55 FR 28592, July 12, 1990, as amended at 62 FR 17048, Apr. 9, 1997]



Sec. 1209.4  Definitions.

    (a) Personnel action means, as to individuals and agencies covered 
by 5 U.S.C. 2302:
    (1) An appointment;
    (2) A promotion;
    (3) An adverse action under chapter 75 of title 5, United States 
Code or other disciplinary or corrective action;
    (4) A detail, transfer, or reassignment;
    (5) A reinstatement;
    (6) A restoration;
    (7) A reemployment;
    (8) A performance evaluation under chapter 43 of title 5, United 
States Code;
    (9) A decision concerning pay, benefits, or awards, or concerning 
education or training if the education or training may reasonably be 
expected to lead to an appointment, promotion, performance evaluation, 
or other personnel action;
    (10) A decision to order psychiatric testing or examination; or
    (11) Any other significant change in duties, responsibilities, or 
working conditions.
    (b) Whistleblowing is the disclosure of information by an employee, 
former employee, or applicant that the individual reasonably believes 
evidences a violation of law, rule, or regulation, gross mismanagement, 
gross waste of funds, abuse of authority, or substantial and specific 
danger to public health or safety. It does not include a disclosure that 
is specifically prohibited by law or required by Executive order to be 
kept secret in the interest of national defense or foreign affairs, 
unless such information is disclosed to the Special Counsel, the 
Inspector General of an agency, or an employee designated by the head of 
the agency to receive it.
    (c) Contributing factor means any disclosure that affects an 
agency's decision to threaten, propose, take, or not take a personnel 
action with respect to the individual making the disclosure.
    (d) Clear and convincing evidence is that measure or degree of proof 
that

[[Page 87]]

produces in the mind of the trier of fact a firm belief as to the 
allegations sought to be established. It is a higher standard than 
``preponderance of the evidence'' as defined in 5 CFR 1201.56(c)(2).

[55 FR 28592, July 12, 1990, as amended at 62 FR 17048, Apr. 9, 1997]



                            Subpart B_Appeals



Sec. 1209.5  Time of filing.

    (a) Individual right of action appeals. The appellant must seek 
corrective action from the Special Counsel before appealing to the 
Board. Where the appellant has sought corrective action, the time limit 
for filing an appeal with the Board is governed by 5 U.S.C. 1214(a)(3). 
Under that section, an appeal must be filed:
    (1) No later than 65 days after the date of issuance of the Office 
of Special Counsel's written notification to the appellant that it was 
terminating its investigation of the appellant's allegations or, if the 
appellant shows that the Special Counsel's notification was received 
more than 5 days after the date of issuance, within 60 days after the 
date the appellant received the Special Counsel's notification; or,
    (2) If the Office of Special Counsel has not notified the appellant 
that it will seek corrective action on the appellant's behalf within 120 
days of the date of filing of the request for corrective action, at any 
time after the expiration of 120 days.
    (b) Otherwise appealable action appeals. The appellant may choose 
either to seek corrective action from the Special Counsel before 
appealing to the Board or to file the appeal directly with the Board. If 
the appellant seeks corrective action from the Special Counsel, the time 
limit for appealing is governed by paragraph (a) of this section. If the 
appellant appeals directly to the Board, the time limit for filing is 
governed by 5 CFR 1201.22(b).
    (c) Appeals after a stay request. Where an appellant has filed a 
request for a stay with the Board without first filing an appeal of the 
action, the appeal must be filed within 30 days after the date the 
appellant receives the order ruling on the stay request. Failure to 
timely file the appeal will result in the termination of any stay that 
has been granted unless a good reason for the delay is shown.

[55 FR 28592, July 12, 1990, as amended at 59 FR 31110, June 17, 1994; 
62 FR 59993, Nov. 6, 1997]



Sec. 1209.6  Content of appeal; right to hearing.

    (a) Content. Only an appellant, his or her designated 
representative, or a party properly substituted under 5 CFR 1201.35 may 
file an appeal. Appeals may be in any format, including letter form, but 
must contain the following:
    (1) The nine (9) items or types of information required in 5 CFR 
1201.24 (a)(1) through (a)(9);
    (2) Where the appellant first sought corrective action from the 
Special Counsel, evidence that the appeal is timely filed;
    (3) The name(s) and position(s) held by the employee(s) who took the 
action(s), and a chronology of facts concerning the action(s);
    (4) A description of each disclosure evidencing whistleblowing as 
defined in Sec. 1209.4(b) of this part; and
    (5) Evidence or argument that:
    (i) The appellant was or will be subject to a personnel action as 
defined in Sec. 1209.4(a) of this part, or that the agency has 
threatened to take or not to take such a personnel action, together with 
specific indications giving rise to the appellant's apprehensions; and
    (ii) The personnel action was or will be based wholly or in part on 
the whistleblowing disclosure, as described in Sec. 1209.4(b) of this 
part.
    (6) An appellant who first sought corrective action from the Special 
Counsel may satisfy the requirements of paragraphs (a)(3) through (a)(5) 
of this section by filing with the appeal a copy of Part 2: Reprisal For 
Whistleblowing of the complaint form submitted to the Office of Special 
Counsel (Form OSC-11, Complaint of Possible Prohibited Personnel 
Practice or Other Prohibited Activity, Rev. 8/00), together with a copy 
of any continuation sheet with answers to Part 2 questions filed with 
the Office of Special Counsel, and any supplement to Part 2 of the 
original complaint filed with the Office of Special Counsel or completed 
by the Office of Special Counsel and furnished to the appellant.

[[Page 88]]

    (b) Right to hearing. An appellant has a right to a hearing.
    (c) Timely request. The appellant must submit any request for a 
hearing with the appeal, or within any other time period the judge sets 
for that purpose. If the appellant does not make a timely request for a 
hearing, the right to a hearing is waived.
    (d) Electronic filing. An appeal may be filed electronically by 
using the Board's e-Appeal site (https://e-appeal.mspb.gov) in 
accordance with Sec. 1201.14 of this chapter.

[55 FR 28592, July 12, 1990, as amended at 65 FR 67608, Nov. 13, 2000; 
68 FR 59865, Oct. 20, 2003; 69 FR 57631, Sept. 27, 2004]



Sec. 1209.7  Burden and degree of proof.

    (a) Subject to the exception stated in paragraph (b) of this 
section, in any case involving a prohibited personnel practice described 
in 5 U.S.C. 2302(b)(8), the Board will order appropriate corrective 
action if the appellant shows by a preponderance of the evidence that a 
disclosure described under 5 U.S.C. 2302(b)(8) was a contributing factor 
in the personnel action that was threatened, proposed, taken, or not 
taken against the appellant.
    (b) However, even where the appellant meets the burden stated in 
paragraph (a) of this section, the Board will not order corrective 
action if the agency shows by clear and convincing evidence that it 
would have threatened, proposed, taken, or not taken the same personnel 
action in the absence of the disclosure.



                         Subpart C_Stay Requests



Sec. 1209.8  Filing a request for a stay.

    (a) Time of filing. An appellant may request a stay of a personnel 
action allegedly based on whistleblowing at any time after the appellant 
becomes eligible to file an appeal with the Board under Sec. 1209.5 of 
this part, but no later than the time limit set for the close of 
discovery in the appeal. The request may be filed prior to, simultaneous 
with, or after the filing of an appeal.
    (b) Place of filing. Requests must be filed with the appropriate 
Board regional or field office as set forth in 5 CFR 1201.4(d).
    (c) Service of stay request. A stay request must be simultaneously 
served upon the Board's regional or field office and upon the agency's 
local servicing personnel office or the agency's designated 
representative, if any. A certificate of service stating how and when 
service was made must accompany the stay request.
    (d) Method of filing. A stay request must be filed with the 
appropriate Board regional or field office by mail, by facsimile, by 
commercial or personal delivery, or by electronic filing in accordance 
with Sec. 1201.14 of this chapter.

[55 FR 28592, July 12, 1990, as amended at 58 FR 36345, July 7, 1993, 59 
FR 65243, Dec. 19, 1994; 68 FR 59865, Oct. 20, 2003; 69 FR 57631, Sept. 
27, 2004]



Sec. 1209.9  Content of stay request and response.

    (a) Only an appellant, his or her designated representative, or a 
party properly substituted under 5 CFR 1201.35 may file a stay request. 
The request may be in any format, and must contain the following:
    (1) The name, address, and telephone number of the appellant, and 
the name and address of the acting agency;
    (2) The name, address, and telephone number of the appellant's 
representative, if any;
    (3) The signature of the appellant or, if the appellant has a 
representative, of the representative;
    (4) A chronology of facts, including a description of the 
appellant's disclosure and the action that the agency has taken or 
intends to take;
    (5) Where the appellant first sought corrective action from the 
Special Counsel, evidence that the stay request is timely filed;
    (6) Evidence and/or argument showing that:
    (i) The action threatened, proposed, taken, or not taken is a 
personnel action, as defined in Sec. 1209.4(a) of this part;
    (ii) The action complained of was based on whistleblowing, as 
defined in Sec. 1209.4(b) of this part; and
    (iii) There is a substantial likelihood that the appellant will 
prevail on the merits of the appeal;

[[Page 89]]

    (7) Evidence and/or argument addressing how long the stay should 
remain in effect; and
    (8) Any documentary evidence that supports the stay request.
    (b) An appellant may provide evidence and/or argument addressing the 
question of whether a stay would impose extreme hardship on the agency.
    (c) Agency response. (1) The agency's response to the stay request 
must be received by the appropriate Board regional or field office 
within five days (excluding Saturdays, Sundays, and Federal holidays) of 
the date of service of the stay request on the agency.
    (2) The agency's response must contain the following:
    (i) Evidence and/or argument addressing whether there is a 
substantial likelihood that the appellant will prevail on the merits of 
the appeal;
    (ii) Evidence and/or argument addressing whether the grant of a stay 
would result in extreme hardship to the agency; and
    (iii) Any documentation relevant to the agency's position on these 
issues.

[55 FR 28592, July 12, 1990, as amended at 59 FR 65243, Dec. 19, 1994]



Sec. 1209.10  Hearing and order ruling on stay request.

    (a) Hearing. The judge may hold a hearing on the stay request.
    (b) Order ruling on stay request. (1) The judge must rule upon the 
stay request within 10 days (excluding Saturdays, Sundays, and Federal 
holidays) after the request is received by the appropriate Board 
regional or field office.
    (2) The judge's ruling on the stay request must set forth the 
factual and legal bases for the decision. The judge must decide whether 
there is a substantial likelihood that the appellant will prevail on the 
merits of the appeal, and whether the stay would result in extreme 
hardship to the agency.
    (3) If the judge grants a stay, the order must specify the effective 
date and duration of the stay.

[55 FR 28592, July 12, 1990, as amended at 59 FR 65243, Dec. 19, 1994]



Sec. 1209.11  Duration of stay; interim compliance.

    (a) Duration of stay. A stay becomes effective on the date specified 
in the judge's order. The stay will remain in effect for the time period 
set forth in the order or until the Board issues a final decision on the 
appeal of the underlying personnel action that was stayed, or until the 
Board vacates or modifies the stay, whichever occurs first.
    (b) Interim compliance. An agency must immediately comply with an 
order granting a stay request. Although the order granting a stay 
request is not a final order, petitions for enforcement of such orders 
are governed by 5 CFR part 1201, subpart F.



             Subpart D_Reports on Applications for Transfers



Sec. 1209.12  Filing of agency reports.

    When an employee who has applied for a transfer to another position 
in an Executive agency under 5 U.S.C. 3352 asks the agency head to 
review a rejection of his or her application for transfer, the agency 
head must complete the review and provide a written statement of 
findings to the employee and the Clerk of the Board within 30 days after 
receiving the request.



               Subpart E_Referrals to the Special Counsel



Sec. 1209.13  Referral of findings to the Special Counsel.

    When the Board determines in a proceeding under this part that there 
is reason to believe that a current Federal employee may have committed 
a prohibited personnel practice described at 5 U.S.C. 2302(b)(8), the 
Board will refer the matter to the Special Counsel to investigate and 
take appropriate action under 5 U.S.C. 1215.

[62 FR 17048, Apr. 9, 1997]



PART 1210_DEBT MANAGEMENT--Table of Contents




                         Subpart A_Salary Offset

Sec.
1210.1 Purpose and scope.
1210.2 Definitions.
1210.3 Applicability.
1210.4 Notice requirements.
1210.5 Hearing.
1210.6 Written decision.

[[Page 90]]

1210.7 Coordinating offset with another Federal agency.
1210.8 Procedures for salary offset.
1210.9 Refunds.
1210.10 Statute of limitations.
1210.11 Nonwaiver of rights.
1210.12 Interest, penalties, and administrative costs.

                       Subpart B_Claims Collection

1210.21 Purpose and scope.
1210.22 Definitions.
1210.23 Other remedies.
1210.24 Claims involving criminal activity or misconduct.
1210.25 Collection.
1210.26 Notices to debtor.
1210.27 Interest, penalties, and administrative costs.
1210.28 Administrative offset.
1210.29 Use of credit reporting agencies.
1210.30 Collection services.
1210.31 Referral to the Department of Justice or the General Accounting 
          Office.
1210.32 Compromise, suspension and termination.
1210.33 Omissions not a defense.

    Source: 54 FR 50603, Dec. 8, 1989, unless otherwise noted.



                         Subpart A_Salary Offset

    Authority: 5 U.S.C. 5514, Executive Order 11809 (redesignated 
Executive Order 12107), and 5 CFR 550 subpart K.



Sec. 1210.1  Purpose and scope.

    (a) This regulation provides procedures for the collection by 
administrative offset of a Federal employee's salary without his/her 
consent to satisfy certain debts owed to the Federal Government. These 
regulations apply to all Federal employees who owe debts to the MSPB and 
to current employees of the MSPB who owe debts to other Federal 
agencies. This regulation does not apply when the employee consents to 
recovery from his/her current pay account.
    (b) This regulation does not apply to debts or claims arising under:
    (1) The Internal Revenue Code of 1954, as amended, 26 U.S.C. 1 et 
seq.;
    (2) The Social Security Act, 42 U.S.C. 301 et seq.;
    (3) The tariff laws of the United States; or
    (4) Any case where a collection of a debt by salary offset is 
explicitly provided for or prohibited by another statute.
    (c) This regulation does not apply to any adjustment to pay arising 
out of an employee's selection of coverage or a change in coverage under 
a Federal benefits program requiring periodic deductions from pay if the 
amount to be recovered was accumulated over four pay periods or less.
    (d) This regulation does not preclude the compromise, suspension, or 
termination of collection action where appropriate under the standards 
implementing the Federal Claims Collection Act, 31 U.S.C. 3711 et seq. 4 
CFR parts 101 through 105; 5 CFR part 1210.
    (e) This regulation does not preclude an employee from requesting 
waiver of an overpayment under 5 U.S.C. 5584, 10 U.S.C. 2774 or 32 
U.S.C. 716 or in any way questioning the amount of validity of the debt 
by submitting a subsequent claim to the General Accounting Office. This 
regulation does not preclude an employee from requesting a waiver 
pursuant to other statutory provisions applicable to the particular debt 
being collected.
    (f) Matters not addressed in these regulations should be reviewed in 
accordance with the Federal Claims Collection Standards at 4 CFR 101.1 
et seq.



Sec. 1210.2  Definitions.

    (a) Agency. An executive agency as is defined at 5 U.S.C. 105 
including the U.S. Postal Service, the U.S. Postal Commission, a 
military department as defined at 5 U.S.C. 102, an agency or court in 
the judicial branch, an agency of the legislative branch including the 
U.S. Senate and House of Representatives and other independent 
establishments that are entities of the Federal government.
    (b) Chairman. The Chairman of the MSPB or the Chairman's designee.
    (c) Creditor agency. The agency to which the debt is owed.
    (d) Debt. An amount owed to the United States from sources which 
include loans insured or guaranteed by the United States and all other 
amounts due the United States from fees, leases, rents, royalties, 
services, sales or real or personal property, overpayments, penalties, 
damages, interests, fines, forfeitures (except those

[[Page 91]]

arising under the Uniform Code of Military Justice), and all other 
similar sources.
    (e) Disposable pay. The amount that remains from an employee's 
Federal pay after required deductions for social security, Federal, 
state or local income tax, health insurance premiums, retirement 
contributions, life insurance premiums, Federal employment taxes, and 
any other deductions that are required to be withheld by law.
    (f) Hearing official. An individual responsible for conducting any 
hearing with respect to the existence or amount of a debt claimed, and 
who renders a decision on the basis of such hearing. A hearing official 
may not be under the supervision or control of the Chairman of the MSPB.
    (g) Paying Agency. The agency that employs the individual who owes 
the debt and authorizes the payment of his/her current pay.
    (h) Salary offset. An administrative offset to collect a debt 
pursuant to 5 U.S.C. 5514 by deduction(s) at one or more officially 
established pay intervals from the current pay account of an employee 
without his/her consent.



Sec. 1210.3  Applicability.

    (a) These regulations are to be followed when:
    (1) The MSPB is owed a debt by an individual currently employed by 
another Federal agency;
    (2) The MSPB is owed a debt by an individual who is a current 
employee of the MSPB; or
    (3) The MSPB employs an individual who owes a debt to another 
Federal agency.



Sec. 1210.4  Notice requirements.

    (a) Deductions shall not be made unless the employee is provided 
with written notice signed by the Chairman of the debt at least 30 days 
before salary offset commences.
    (b) The written notice shall contain:
    (1) A statement that the debt is owed and an explanation of its 
nature, and amount;
    (2) The agency's intention to collect the debt by deducting from the 
employee's current disposable pay account;
    (3) The amount, frequency proposed beginning date, and duration of 
the intended deduction(s);
    (4) An explanation of interest, penalties, and administrative 
charges, including a statement that such charges will be assessed unless 
excused in accordance with the Federal Claims Collections Standards at 4 
CFR 101.1 et seq.;
    (5) The employee's right to inspect, request, or receive a copy of 
government records relating to the debt;
    (6) The opportunity to establish a written schedule for the 
voluntary repayment of the debt;
    (7) The right to a hearing conducted by an impartial hearing 
official;
    (8) The methods and time period for petitioning for hearings;
    (9) A statement that the timely filing of a petition for a hearing 
will stay the commencement of collection proceedings;
    (10) A statement that a final decision on the hearing will be issued 
not later than 60 days after the filing of the petition requesting the 
hearing unless the employee requests and the hearing official grants a 
delay in the proceedings;
    (11) A statement that knowingly false or frivolous statements, 
representations, or evidence may subject the employee to appropriate 
disciplinary procedures;
    (12) A statement of other rights and remedies available to the 
employee under statutes or regulations governing the program for which 
the collection is being made; and
    (13) Unless there are contractual or statutory provisions to the 
contrary, a statement that amounts paid on or deducted for the debt 
which are later waived or found not owed to the United States will be 
promptly refunded to the employee.



Sec. 1210.5  Hearing.

    (a) Request for hearing. (1) An employee must file a petition for a 
hearing in accordance with the instructions outlined in the agency's 
notice to offset.
    (2) A hearing may be requested by filing a written petition 
addressed to the Chairman of the MSPB stating why the employee disputes 
the existence or amount of the debt. The petition for a

[[Page 92]]

hearing must be received by the Chairman no later than fifteen (15) 
calendar days after the date of the notice to offset unless the employee 
can show good cause for failing to meet the deadline date.
    (b) Hearing procedures. (1) The hearing will be presided over by an 
impartial hearing official.
    (2) The hearing shall conform to procedures contained in the Federal 
Claims Collection Standards 4 CFR 102.3(c). The burden shall be on the 
employee to demonstrate that the existence or the amount of the debt is 
in error.



Sec. 1210.6  Written decision.

    (a) The hearing official shall issue a written opinion no later than 
60 days after the hearing.
    (b) The written opinion will include: A statement of the facts 
presented to demonstrate the nature and origin of the alleged debt; the 
hearing official's analysis, findings and conclusions; the amount and 
validity of the debt, and the repayment schedule.



Sec. 1210.7  Coordinating offset with another Federal agency.

    (a) The MSPB as the creditor agency. (1) When the Chairman 
determines that an employee of a Federal agency owes a delinquent debt 
to the MSPB, the Chairman shall as appropriate:
    (i) Arrange for a hearing upon the proper petitioning by the 
employee;
    (ii) Certify in writing that the employee owes the debt, the amount 
and basis of the debt, the date on which payment is due, the date the 
Government's right to collect the debt accrued, and that MSPB 
regulations for salary offset have been approved by the Office of 
Personnel Management;
    (iii) Advise the paying agency of the amount or percentage of 
disposable pay to be collected in each installment, if collection is to 
be made in installments;
    (iv) Advise the paying agency of the actions taken under 5 U.S.C. 
5514(b) and provide the dates on which action was taken unless the 
employee has consented to salary offset in writing or signed a statement 
acknowledging receipt of procedures required by law. The written consent 
or acknowledgment must be sent to the paying agency;
    (v) If the employee is in the process of separating, MSPB must 
submit its debt claim to the paying agency as provided in this part. The 
paying agency must certify any amounts already collected, notify the 
employee, and send a copy of the certification and notice of the 
employee's separation to the creditor agency. If the paying agency is 
aware that the employee is entitled to Civil Service Retirement and 
Disability Fund or similar payments, it must certify to the agency 
responsible for making such payments the amount of the debt and that the 
provisions of this part have been followed; and
    (vi) If the employee has already separated and all payments due from 
the paying agency have been paid, the Chairman may request unless 
otherwise prohibited, that money payable to the employee from the Civil 
Service Retirement and Disability Fund or other similar funds be 
collected by administrative offset.
    (b) MSPB as the paying agency. (1) Upon receipt of a properly 
certified debt claim from another agency, deductions will be scheduled 
to begin at the next established pay interval. The employee must receive 
written notice that the MSPB has received a certified debt claim from 
the creditor agency, the amount of the debt, the date salary offset will 
begin, and the amount of the deduction(s). The MSPB shall not review the 
merits of the creditor agency's determination of the validity or the 
amount of the certified claim.
    (2) If the employee transfers to another agency after the creditor 
agency has submitted its debt claim to the MSPB and before the debt is 
collected completely, the MSPB must certify the total amount collected. 
One copy of the certification must be furnished to the employee. A copy 
must be furnished the creditor agency with notice of the employee's 
transfer.



Sec. 1210.8  Procedures for salary offset.

    (a) Deductions to liquidate an employee's debt will be by the method 
and in the amount stated in the Chairman's notice of intention to offset 
as provided in Sec. 1210.4. Debts will be collected in one lump sum 
where possible. If the

[[Page 93]]

employee is financially unable to pay in one lump sum, collection must 
be made in installments.
    (b) Debts will be collected by deduction at officially established 
pay intervals from an employee's current pay account unless alternative 
arrangements for repayment are made.
    (c) Installment deductions will be made over a period not greater 
than the anticipated period of employment. The size of installment 
deductions must bear a reasonable relationship to the size of the debt 
and the employee's ability to pay. The deduction for the pay intervals 
for any period must not exceed 15 percent of disposable pay unless the 
employee has agreed in writing to a deduction of a greater amount.
    (d) Unliquidated debts may be offset against any financial payment 
due to a separated employee including but not limited to final salary 
payment or leave in accordance with 31 U.S.C. 3716.



Sec. 1210.9  Refunds.

    (a) The MSPB will refund promptly any amounts deducted to satisfy 
debts owed to the MSPB when the debt is waived, found not owed to the 
MSPB, or when directed by an administrative or judicial order.
    (b) The creditor agency will promptly return any amounts deducted by 
MSPB to satisfy debts owed to the creditor agency when the debt is 
waived, found not owed, or when directed by an administrative or 
judicial order.
    (c) Unless required by law, refunds under this subsection shall not 
bear interest.



Sec. 1210.10  Statute of limitations.

    If a debt has been outstanding for more than 10 years after the 
agency's right to collect the debt first accrued, the agency may not 
collect by salary offset unless facts material to the Government's right 
to collect were not known and could not reasonably have been known by 
the official or officials who were charged with the responsibility for 
discovery and collection of such debts.



Sec. 1210.11  Nonwaiver of rights.

    An employee's involuntary payment of all or any part of a debt 
collected under these regulations will not be construed as a waiver of 
any rights that employee may have under 5 U.S.C. 5514 or any other 
provision of contract law unless there are statutes or contract(s) to 
the contrary.



Sec. 1210.12  Interest, penalties, and administrative costs.

    Charges may be assessed for interest, penalties, and administrative 
costs in accordance with the Federal Claims Collection Standards, 4 CFR 
102.13. Dated: July 24, 1987.



                       Subpart B_Claims Collection

    Authority: The authority for this part is the Federal Claims 
Collection Act of 1966, as amended, 31 U.S.C. 3711 and 3716-3719; the 
Federal Claims Collection Standards at 4 CFR parts 101-105, as amended 
by 49 FR 8889, 5 U.S.C. 552a, and Office of Management and Budget 
Circular A-129.



Sec. 1210.21  Purpose and scope.

    This part prescribes standards and procedures for officers and 
employees of the MSPB who are responsible for the collection and 
disposition of debts owed to the United States. The activities covered 
include: Collecting claims in any amount; compromising claims, or 
suspending or terminating the collection of claims that do not exceed 
$20,000 exclusive of interest and charges; and referring debts that 
cannot be disposed of by the MSPB to the Department of Justice or to the 
General Accounting Office for further administrative action or 
litigation.



Sec. 1210.22  Definitions.

    (a) Claim or debt. An amount or property owed to the United States 
which includes, but is not limited to: Overpayments to program 
beneficiaries; overpayments to contractors and grantees, including 
overpayments arising from audit disallowances; excessive cash advances 
to grantees and contractors; and civil penalties and assessments. A debt 
is overdue or delinquent if it is not paid by the due date specified in 
the initial notice of the debt (see Sec. 1210.26) or if the debtor 
fails to satisfy his or her obligation under a repayment agreement.
    (b) Debtor. An individual, organization, group, association, 
partnership,

[[Page 94]]

or corporation indebted to the United States, or the person or entity 
with legal responsibility for assuming the debtor's obligation.
    (c) MSPB. The Merit Systems Protection Board.
    (d) Administrative offset. Satisfying a debt by withholding money 
payable by the United States to or held by the United States for a 
debtor.



Sec. 1210.23  Other remedies.

    The remedies and sanctions available to the MSPB under this part are 
not intended to be exclusive. The Chairman of the MSPB or his designee 
may impose other appropriate sanctions upon a debtor for prolonged or 
repeated failure to pay a debt. For example, the Chairman or his 
designee may place the debtor's name on a list of debarred, suspended, 
or ineligible contractors. In such cases the debtor will be advised of 
the MSPB's action.



Sec. 1210.24  Claims involving criminal activity or misconduct.

    (a) A debtor whose indebtedness involves criminal activity such as 
fraud, embezzlement, theft, or misuse of government funds or property is 
subject to punishment by fine or imprisonment as well as to a civil 
claim by the United States for compensation for the misappropriated 
funds. The MSPB will refer these cases to the appropriate law 
enforcement agency for prosecution.
    (b) Debts involving fraud, false claims, or misrepresentation shall 
not be compromised, terminated, suspended, or otherwise disposed of 
under this rule. Only the Department of Justice is authorized to 
compromise, terminate, suspend, or otherwise dispose of such debts.



Sec. 1210.25  Collection.

    (a) The MSPB will take aggressive action to collect debts and reduce 
delinquencies. Collection efforts shall include sending to the debtor's 
last known address a total of three progressively stronger written 
demands for payment at not more than 30 day intervals. When necessary to 
protect the Government's interest, written demand may be preceded by 
other appropriate action, including immediate referral for litigation. 
Other contact with the debtor or his or her representative or guarantor 
by telephone, in person and/or in writing may be appropriate to demand 
prompt payment, to discuss the debtor's position regarding the 
existence, amount and repayment of the debt, and to inform the debtor of 
his or her rights and effect of nonpayment or delayed payment. A debtor 
who disputes a debt must promptly provide available supporting evidence.
    (b) If a debtor is involved in insolvency proceedings, the debt will 
be referred to the appropriate United States Attorney to file a claim. 
The United States may have a priority over other creditors under 31 
U.S.C. 3713.



Sec. 1210.26  Notices to debtor.

    The first written demand for payment must inform the debtor of the 
following:
    (a) The amount and nature of the debt;
    (b) The date payment is due, which will generally be 30 days from 
the date the notice was mailed;
    (c) The assessment of interest under Sec. 1210.27 from the date the 
notice was mailed if payment is not received within the 30 days;
    (d) The right to dispute the debt;
    (e) The office, address and telephone number that the debtor should 
contact to discuss repayment and reconsideration of the debt; and
    (f) The sanctions available to the MSPB to collect a delinquent debt 
including, but not limited to, referral of the debt to a credit 
reporting agency, a private collection bureau, or the Department of 
Justice for litigation.



Sec. 1210.27  Interest, penalties, and administrative costs.

    (a) Interest will accrue on all debts from the date when the first 
notice of the debt and the interest requirement is mailed to the last 
known address or hand-delivered to the debtor if the debt is not paid 
within 30 days from the date the first notice was mailed. The MSPB will 
charge an annual rate of interest that is equal to the average 
investment rate for the Treasury tax and loan accounts on September 30 
of each year, rounded to the nearest whole per centum. This rate, which 
represents the current value of funds to the United

[[Page 95]]

States Treasury, may be revised quarterly by the Secretary of the 
Treasury and is published by the Secretary of the Treasury annually or 
quarterly in the Federal Register and the Treasury Financial Manual 
Bulletins.
    (b) The rate of interest initially assessed will remain fixed for 
the duration of the indebtedness, except that if a debtor defaults on a 
repayment agreement interest may be set at the Treasury rate in effect 
on the date a new agreement is executed.
    (c) The MSPB shall charge debtors for administrative costs incurred 
in handling overdue debts.
    (d) Interest will not be charged on administrative costs.
    (e) The MSPB shall assess a penalty charge, not to exceed 6 percent 
per year on debts which have been delinquent for more than 90 days. This 
change shall accrue from the date that the debt became delinquent.
    (f) The Chairman or his designee may waive in whole or in part the 
collection of interest and administrative and penalty charges if 
determined that collection would be against equity or not in the best 
interests of the United States. The MSPB shall waive the collection of 
interest on the debt or any part of the debt which is paid within 30 
days after the date on which interest began to accrue.



Sec. 1210.28  Administrative offset.

    (a) The MSPB may collect debts owed by administrative offset if:
    (1) The debt is certain in amount;
    (2) Efforts to obtain direct payment have been, or would most likely 
be unsuccessful, or the MSPB and the debtor agree to the offset;
    (3) Offset is cost effective or has significant deterrent value; and
    (4) Offset is best suited to further and protect the Government's 
interest.
    (b) The MSPB may offset a debt owed to another Federal agency from 
amounts due or payable by the MSPB to the debtor or request another 
Federal agency to offset a debt owed to the MSPB;
    (c) Prior to initiating administrative offset, the MSPB will send 
the debtor written notice of the following:
    (1) The nature and amount of the debt and the agency's intention to 
collect the debt by offset 30 days from the date the notice was mailed 
if neither payment nor a satisfactory response is received by that date;
    (2) The debtor's right to an opportunity to submit a good faith 
alternative repayment schedule to inspect and copy agency records 
pertaining to the debt, to request a review of the determination of 
indebtedness; and to enter into a written agreement to repay the debt; 
and
    (3) The applicable interest.
    (d) The MSPB may effect an administrative offset against a payment 
to be made to a debtor prior to the completion of the procedures 
required by paragraph (c) of this section if:
    (1) Failure of offset would substantially prejudice the Government's 
ability to collect the debt; and
    (2) The time before the payment is to be made does not reasonably 
permit completion of those procedures.



Sec. 1210.29  Use of credit reporting agencies.

    (a) The MSPB may report delinquent accounts to credit reporting 
agencies consistent with the notice requirements contained in the Sec. 
1210.26. Individual debtors must be given at least 60 days written 
notice that the debt is overdue and will be reported to a credit 
reporting agency.
    (b) Debts may be reported to consumer or commercial reporting 
agencies. Consumer reporting agencies are defined in 31 U.S.C. 
3701(a)(3) pursuant to 5 U.S.C. 552a(b)(12) and 31 U.S.C. 3711(f). The 
MSPB may disclose only an individual's name, address, Social Security 
number, and the nature, amount, status and history of the debt and the 
program under which the claim arose.



Sec. 1210.30  Collection services.

    (a) The MSPB may contract for collection services to recover 
outstanding debts. The MSPB may refer delinquent debts to private 
collection agencies listed on the schedule compiled by the General 
Services Administration. In such contracts, the MSPB will retain the 
authority to resolve disputes, compromise claims, terminate or suspend 
collection, and refer the matter to the

[[Page 96]]

Department of Justice or the General Accounting Office.
    (b) The contractor shall be subject to the disclosure provisions of 
the Privacy Act of 1974, as amended (5 U.S.C. 552a(m)), and to 
applicable Federal and state laws and regulations pertaining to debt 
collection practices, including the Fair Debt Collection Practices Act, 
15 U.S.C. 1692. The contractor shall be strictly accountable for all 
amounts collected.
    (c) The contractor shall be required to provide to the MSPB any data 
contained in its files relating to the debt account upon agency request 
or upon returning an account to the MSPB for referral to the Department 
of Justice for litigation.



Sec. 1210.31  Referral to the Department of Justice or the General Accounting Office.

    Debts over $600 but less than $100,000 which the MSPB determines can 
neither be collected nor otherwise disposed of will be referred for 
litigation to the United States Attorney in whose judicial district the 
debtor is located. Claims for amounts exceeding $100,000 shall be 
referred for litigation to the Commercial Litigation Branch, Civil 
Division of the Department of Justice.



Sec. 1210.32  Compromise, suspension and termination.

    (a) The Chairman of the MSPB or his designee may compromise, suspend 
or terminate the collection of debts where the outstanding principal is 
not greater than $20,000. MSPB procedures for writing off outstanding 
accounts are available to the public.
    (b) The Chairman of the MSPB may compromise, suspend or terminate 
collection of debts where the outstanding principal is greater than 
$20,000 only with the approval of, or by referral to the United States 
Attorney or the Department of Justice.
    (c) The Chairman of the MSPB will refer to the General Accounting 
Office (GAO) debts arising from GAO audit exceptions.



Sec. 1210.33  Omissions not a defense.

    Failure to comply with any provisions of this rule may not serve as 
a defense to any debtor.

                       PARTS 1211-1215 [RESERVED]



PART 1216_TESTIMONY BY MSPB EMPLOYEES RELATING TO OFFICIAL INFORMATION AND PRODUCTION OF OFFICIAL RECORDS IN LEGAL PROCEEDINGS--Table of Contents




                      Subpart A_General Provisions

Sec.
1216.101 Scope and purpose.
1216.102 Applicability.
1216.103 Definitions.

 Subpart B_Demands or Requests for Testimony and Production of Documents

1216.201 General prohibition.
1216.202 Factors the MSPB will consider.
1216.203 Filing requirements for litigants seeking documents or 
          testimony.
1216.204 Service of requests or demands.
1216.205 Processing requests or demands.
1216.206 Final determination.
1216.207 Restrictions that apply to testimony.
1216.208 Restrictions that apply to released records.
1216.209 Procedure when a decision is not made prior to the time a 
          response is required.
1216.210 Procedure in the event of an adverse ruling.

                       Subpart C_Schedule of Fees

1216.301 Fees.

                          Subpart D_Penalties.

1216.401 Penalties.

    Authority: 5 U.S.C. 1204(h); 31 U.S.C. 9701.

    Source: 71 FR 17967, Apr. 10, 2006, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 1216.101  Scope and purpose.

    (a) This part establishes policy, assigns responsibilities and 
prescribes procedures with respect to:
    (1) The production or disclosure of official information or records 
by MSPB employees, advisors, and consultants; and
    (2) The testimony of current and former MSPB employees, advisors, 
and consultants relating to official information, official duties, or 
the MSPB's record, in connection with federal or

[[Page 97]]

state litigation in which the MSPB is not a party.
    (b) The MSPB intends this part to:
    (1) Conserve the time of MSPB employees for conducting official 
business;
    (2) Minimize the involvement of MSPB employees in issues unrelated 
to MSPB's mission;
    (3) Maintain the impartiality of MSPB employees in disputes between 
private litigants; and
    (4) Protect sensitive, confidential information and the deliberative 
processes of the MSPB.
    (c) In providing for these requirements, the MSPB does not waive the 
sovereign immunity of the United States.
    (d) This part provides guidance for the internal operations of MSPB. 
It does not create any right or benefit, substantive or procedural, that 
a party may rely upon in any legal proceeding against the United States.



Sec. 1216.102  Applicability.

    This part applies to demands and requests to current and former 
employees, advisors, and consultants for factual or expert testimony 
relating to official information or official duties or for production of 
official records or information, in legal proceedings in which the MSPB 
is not a named party. This part does not apply to:
    (a) Demands upon or requests for an MSPB employee to testify as to 
facts or events that are unrelated to his or her official duties or that 
are unrelated to the functions of the MSPB;
    (b) Demands upon or requests for a former MSPB employee to testify 
as to matters in which the former employee was not directly or 
materially involved while at the MSPB;
    (c) Requests for the release of records under the Freedom of 
Information Act, 5 U.S.C. 552, or the Privacy Act, 5 U.S.C. 552a; or
    (d) Congressional demands and requests for testimony, records or 
information.



Sec. 1216.103  Definitions.

    The following definitions apply to this part.
    (a) Demand means an order, subpoena, or other command of a court or 
other competent authority for the production, disclosure, or release of 
records or for the appearance and testimony of an MSPB employee in a 
legal proceeding.
    (b) General Counsel means the General Counsel of the MSPB or a 
person to whom the General Counsel has delegated authority under this 
part.
    (c) Legal proceeding means any matter before a court of law, 
administrative board or tribunal, commission, administrative law judge, 
hearing officer or other body that conducts a legal or administrative 
proceeding. Legal proceeding includes all phases of litigation.
    (d) MSPB means the Merit Systems Protection Board.
    (e) MSPB employee or employee means:
    (1)(i) Any current or former employee of the MSPB;
    (ii) Any other individual hired through contractual agreement by or 
on behalf of the MSPB or who has performed or is performing services 
under such an agreement for the MSPB; and
    (iii) Any individual who served or is serving in any consulting or 
advisory capacity to the MSPB, whether formal or informal.
    (2) This definition does not include persons who are no longer 
employed by the MSPB and who agree to testify about general matters, 
matters available to the public, or matters with which they had no 
specific involvement or responsibility during their employment with the 
MSPB.
    (f) Records or official records and information all information in 
the custody and control of the MSPB, relating to information in the 
custody and control of the MSPB, or acquired by an MSPB employee in the 
performance of his or her official duties or because of his or her 
official status, while the individual was employee by or on behalf of 
the MSPB.
    (g) Request means any informal request, by whatever method, for the 
production of records and information or for testimony which has not 
been ordered by a court of other competent authority.
    (h) Testimony means any written or oral statements, including 
depositions, answers to interrogatories, affidavits,

[[Page 98]]

declarations, interviews, and statements made by an individual in 
connection with a legal proceeding.



 Subpart B_Demands or Requests for Testimony and Production of Documents



Sec. 1216.201  General prohibition.

    No employee may produce official records and information or provide 
any testimony relating to official information in response to a demand 
or request without the prior, written approval of the General Counsel.



Sec. 1216.202  Factors the MSPB will consider.

    The General Counsel, in his or her sole discretion, may grant an 
employee permission to testify on matters relating to official 
information, or produce official records and information, in response to 
a demand or request. Among the relevant factors that the General Counsel 
may consider in making this decision are whether:
    (a) The purposes of this part are met;
    (b) Allowing such testimony or production of records would be 
necessary to prevent a miscarriage of justice;
    (c) Allowing such testimony or production of records would assist or 
hinder the MSPB in performing its statutory duties;
    (d) Allowing such testimony or production of records would be in the 
best interest of the MSPB or the United States;
    (e) The records or testimony can be obtained from other sources;
    (f) The demand or request is unduly burdensome or otherwise 
inappropriate under the applicable rules of discovery or the rule of 
procedure governing the case or mater in which the demand or request 
arose;
    (g) Disclosure would violate a statute, Executive Order or 
regulation;
    (h) Disclosure would reveal confidential, sensitive, or privileged 
information, trade secrets or similar, confidential or financial 
information, otherwise protected information, or information which would 
otherwise be inappropriate for release;
    (i) Disclosure would impede or interfere with an ongoing law 
enforcement investigation or proceeding, or compromise constitutional 
rights or national security interests;
    (j) Disclosure would result in the MSPB appearing to favor one 
litigant over another;
    (k) Whether the request was served before the demand;
    (l) A substantial Government interest is implicated;
    (m) The demand or request is within the authority of the party 
making it; and
    (n) The demand or request is sufficiently specific to be answered.



Sec. 1216.203  Filing requirements for litigants seeking documents or testimony.

    A litigant must comply with the following requirements when filing a 
request for official records and information or testimony under this 
part. A request should be filed before a demand.
    (a) The request must be in writing and must be submitted to the 
Clerk of the Board who will immediately forward the request to the 
General Counsel.
    (b) The written request must contain the following information:
    (1) The caption of the legal proceeding, docket number, and name and 
address of the court or other authority involved;
    (2) A copy of the complaint or equivalent document setting forth the 
assertions in the case and any other pleading or document necessary to 
show relevance;
    (3) A list of categories of records sought, a detailed description 
of how the information sought is relevant to the issues in the legal 
proceeding, and a specific description of the substance of the testimony 
or records sought;
    (4) A statement as to how the need for the information outweighs any 
need to maintain the confidentiality of the information and outweighs 
the burden on the MSPB to produce the records or provide testimony;
    (5) A statement indicating that the information sought is not 
available from another source, from other persons or entities, or from 
the testimony of someone other than an MSPB employee, such as a retained 
expert;
    (6) If testimony is requested, the intended use of the testimony, 
and a

[[Page 99]]

showing that no document could be provided and used in lieu of 
testimony;
    (7) A description of all prior decisions, orders, or pending motions 
in the case that bear upon the relevance of the requested records or 
testimony;
    (8) The name, address, and telephone number of counsel to each party 
in the case; and
    (9) An estimate of the amount of time that the requester and other 
parties will require for each MSPB employee for time spent by the 
employee to prepare for testimony, in travel, and for attendance in the 
legal proceeding.
    (c) The MSPB reserves the right to require additional information to 
complete the request where appropriate.
    (d) The request should be submitted at least 30 days before the date 
that records or testimony is required. Requests submitted in less than 
30 days before records or testimony is required must be accompanied by a 
written explanation stating the reasons for the late request and the 
reasons for expedited processing.
    (e) Failure to cooperate in good faith to enable the General Counsel 
to make an informed decision may serve as the basis for a determination 
not to comply with the request.
    (f) The request should state that the requester will provide a copy 
of the MSPB employee's statement free of charge and that the requester 
will permit the MSPB to have a representative present during the 
employee's testimony.



Sec. 1216.204  Service of requests or demands.

    Requests or demands for official records or information or testimony 
under this subpart must be served on the Clerk of the Board, U.S. Merit 
Systems Protection Board, 1615 M Street, NW., Washington, DC 20419-0002 
by mail, fax, or e-mail and clearly marked ``Part 1216 Request for 
Testimony or Official Records in Legal Proceedings.'' The request or 
demand will be immediately forwarded to the General Counsel for 
processing.



Sec. 1216.205  Processing requests or demands.

    (a) After receiving service of a request or demand for testimony, 
the General Counsel will review the request and, in accordance with the 
provisions of this subpart, determine whether, or under what conditions, 
to authorize the employee to testify on matters relating to official 
information and/or produce official records and information.
    (b) Absent exigent circumstances, the MSPB will issue a 
determination within 30 days from the date the request is received.
    (c) The General Counsel may grant a waiver of any procedure 
described by this subpart where a waiver is considered necessary to 
promote a significant interest of the MSPB or the United States, or for 
other good cause.
    (d) Certification (authentication) of copies of records. The MSPB 
may certify that records are true copies in order to facilitate their 
use as evidence. If a requester seeks certification, the requester must 
request certified copies from the MSPB at least 30 days before the date 
they will be needed. The request should be sent to the Clerk of the 
Board.



Sec. 1216.206  Final determination.

    The General Counsel makes the final determination on demands to 
requests to employees for production of official records and information 
or testimony in litigation in which the MSPB is not a party. All final 
determinations are within the sole discretion of the General Counsel. 
The General Counsel will notify the requester and, when appropriate, the 
court of other competent authority of the final determination, the 
reasons for the grant or denial of the request, and any conditions that 
the General Counsel may impose on the release of records or information, 
or on the testimony of an MSPB employee. The General Counsel's decision 
exhausts administrative remedies for discovery of the information.



Sec. 1216.207  Restrictions that apply to testimony.

    (a) The General Counsel may impose conditions or restrictions on the 
testimony of MSPB employees including, for example:
    (1) Limiting the areas of testimony;
    (2) Requiring the requester and other parties to the legal 
proceeding to agree

[[Page 100]]

that the transcript of the testimony will be kept under seal;
    (3) Requiring that the transcript will be used or made available 
only in the particular legal proceeding for which testimony was 
requested. The General Counsel may also require a copy of the transcript 
of testimony at the requester's expense.
    (b) The MSPB may offer the employee's written declaration in lieu of 
testimony.
    (c) If authorized to testify pursuant to this part, an employee may 
testify as to facts within his or her personal knowledge, but, unless 
specifically authorized to do so by the General Counsel, the employee 
shall not;
    (1) Disclose confidential or privileged information; or
    (2) For a current MSPB employee, testify as an expert or opinion 
witness with regard to any matter arising out of the employee's official 
duties or the functions of the MSPB unless testimony is being given on 
behalf of the United States (see also 5 CFR 2635.805).
    (d) The scheduling of an employee's testimony, including the amount 
of time that the employee will be made available for testimony, will be 
subject to the MSPB's approval.



Sec. 1216.208  Restrictions that apply to released records.

    (a) The General Counsel may impose conditions or restrictions on the 
release of official records and information, including the requirement 
that parties to the proceeding obtain a protective order or execute a 
confidentiality agreement to limit access and any further disclosure. 
The terms of the protective order or of a confidentiality agreement must 
be acceptable to the General Counsel. In cases where protective orders 
or confidentiality agreements have already been executed, the MSPB may 
condition the release of official records and information on an 
amendment to the existing protective order or confidentiality agreement.
    (b) If the General Counsel so determines, original MSPB records may 
be presented for examination in response to a request, but they may not 
be presented as evidence or otherwise used in a manner by which they 
could lose their identity as official MSPB records, nor may they be 
marked or altered. In lieu of the original records, certified copies may 
be presented for evidentiary purposes.



Sec. 1216.209  Procedure when a decision is not made prior to the time a 

response is required.

    If a response to a demand or request is required before the General 
Counsel can make the determination referred to in Sec. 1216.206, the 
General Counsel, when necessary, will provide the court or other 
competent authority with a copy of this part, inform the court or other 
competent authority that the request is being reviewed, provide an 
estimate as to when a decision will be made, and seek a stay of the 
demand or request pending a final determination.



Sec. 1216.210  Procedure in the event of an adverse ruling.

    If the court or other competent authority fails to stay a demand or 
request, the employee upon whom the demand or request is made, unless 
otherwise advised by the General Counsel, will appear, if necessary, at 
the stated time and place, produce a copy of this part, state that the 
employee has been advised by counsel not to provide the requested 
testimony or produce documents, and respectfully decline to comply with 
the demand or request, citing United States ex rel. Touchy v. Ragen, 340 
U.S. 462 (1951).



                       Subpart C_Schedule of Fees



Sec. 1216.301  Fees.

    (a) Generally. The General Counsel may condition the production of 
records or appearance for testimony upon advance payment of a reasonable 
estimate of the costs to the MSPB.
    (b) Fees for records. Fees for producing records will include fees 
for searching, reviewing, and duplicating records, costs of attorney 
time spent in reviewing the request, and expenses generated by materials 
and equipment used to search for, produce, and copy the responsive 
information. Costs for employee time will be calculated on the basis of 
the hourly pay of the employee (including all pay, allowances, and 
benefits). Fees for duplication will be the

[[Page 101]]

same as those charged by the MSPB in its Freedom of Information Act 
regulations at 5 CFR part 1204.
    (c) Witness fees. Fees for attendance by a witness will include 
fees, expenses, and allowances prescribed by the court's rules. If no 
such fees are prescribed, witness fees will be determined based upon the 
rule of the Federal district closest to the location where the witness 
will appear and on 28 U.S.C. 1821, as applicable. Such fees will include 
cost of time spent by the witness to prepare for testimony, in travel 
and for attendance in the legal proceeding, plus travel costs.
    (d) Payment of fees. A requester must pay witness fees for current 
MSPB employees and any record certification fees by submitting to the 
Clerk of the Board a check or money order for the appropriate amount 
made payable to the Treasury of the United States. In the case of 
testimony of former MSPB employees, the request must pay applicable fees 
directly to the former MSPB employee in accordance with 28 U.S.C. 1821 
or other applicable statutes.
    (e) Waiver or reduction of fees. The General Counsel, in his or her 
sole discretion, may, upon a showing of reasonable cause, waive or 
reduce any fees in connection with the testimony, production, or 
certification of records.
    (f) De minimis fees. Fees will not be assessed if the total charge 
would be $10.00 or less.



                           Subpart D_Penalties



Sec. 1216.401  Penalties.

    (a) An employee who discloses official records or information or 
gives testimony relating to official information, except as expressly 
authorized by the MSPB, or as ordered by a Federal court after the MSPB 
has had the opportunity to be heard, may face the penalties provided in 
18 U.S.C. 641 and other applicable laws. Additionally, former MSPB 
employees are subject to the restrictions and penalties of 18 U.S.C. 207 
and 216.
    (b) A current MSPB employee who testifies or produces official 
records and information in violation of this part shall be subject to 
disciplinary action.

[[Page 103]]



              CHAPTER III--OFFICE OF MANAGEMENT AND BUDGET




  --------------------------------------------------------------------

                 SUBCHAPTER A--ADMINISTRATIVE PROCEDURES
Part                                                                Page
1300            Standards of conduct........................         105
1302            Privacy Act procedures......................         105
1303            Public information provisions of the 
                    Administrative Procedures Act...........         111
1304            Post employment conflict of interest........         118
1305            Release of official information, and 
                    testimony by OMB personnel as witnesses, 
                    in litigation...........................         121
                      SUBCHAPTER B--OMB DIRECTIVES
1310            OMB circulars...............................         123
1312            Classification, downgrading, 
                    declassification and safeguarding of 
                    national security information...........         124
1315            Prompt payment..............................         136
1320            Controlling paperwork burdens on the public.         150
 SUBCHAPTER C--JOINT REGULATION WITH THE OFFICE OF PERSONNEL MANAGEMENT
1330            Human resources management..................         172

[[Page 105]]



                 SUBCHAPTER A_ADMINISTRATIVE PROCEDURES



PART 1300_STANDARDS OF CONDUCT--Table of Contents




    Authority: 5 U.S.C. 7301.



Sec. 1300.1  Cross-reference to employees ethical conduct standards and 

financial disclosure regulations.

    Employees of the Office of Management and Budget are subject to the 
executive branch-wide standards of ethical conduct at 5 CFR part 2635, 
OMB's regulations at 5 CFR part 8701 which supplement the executive 
branch-wide standards, and the executive branch-wide financial 
disclosure regulations at 5 CFR part 2634.

[60 FR 12397, Mar. 7, 1995]



PART 1302_PRIVACY ACT PROCEDURES--Table of Contents




Sec.
1302.1 Rules for determining if an individual is the subject of a 
          record.
1302.2 Requests for access.
1302.3 Access to the accounting of disclosures from records.
1302.4 Requests to amend records.
1302.5 Request for review.
1302.6 Schedule of fees.

    Authority: Pub. L. 93-579, 88 Stat. 1896, 5 USC 552a(f).

    Source: 41 FR 38491, Sept. 10, 1976, unless otherwise noted.



Sec. 1302.1  Rules for determining if an individual is the subject of a record.

    (a) Individuals desiring to know if a specific system of records 
maintained by the Office of Management and Budget contains a record 
pertaining to them should address their inquiries to the Assistant to 
the Director for Administration, Office of Management and Budget, 
Washington, DC 20503. The written inquiry should contain a specific 
reference to the system of records maintained by OMB listed in the OMB 
Notices of Systems of Records or it should describe the type of record 
in sufficient detail to reasonably identify the system of records. 
Notice of OMB systems of records subject to the Privacy Act will be made 
in the Federal Register and copies of the notices will be available upon 
request to the Assistant to the Director for Administration when so 
published. A compilation of such notices will also be made and published 
by the Office of Federal Register, in accordance with section 5 U.S.C. 
552a(f).
    (b) At a minimum, the request should also contain sufficient 
information to identify the requester in order to allow OMB to determine 
if there is a record pertaining to that individual in a particular 
system of records. In instances when the information is insufficient to 
insure disclosure to the individual to whom the information pertains, in 
view of the sensitivity of the information, OMB reserves the right to 
ask the requester for additional identifying information.
    (c) Ordinarily the requester will be informed whether the named 
system of records contains a record pertaining to the requester within 
10 days of receipt of such a request (excluding Saturdays, Sundays, and 
legal Federal holidays). Such a response will also contain or reference 
the procedures which must be followed by the individual making the 
request in order to gain access to the record.
    (d) Whenever a response cannot be made within the 10 days, the 
Assistant to the Director for Administration will inform the requester 
of the reasons for the delay and the date by which a response may be 
anticipated.



Sec. 1302.2  Requests for access.

    (a) Requirement for written requests. Individuals desiring to gain 
access to a record pertaining to them in a system of records maintained 
by OMB must submit their request in writing in accordance with the 
procedures set forth in paragraph (b) of this section. Due to security 
measures in effect in both the Old and New Executive Office Buildings, 
requests made in person (walk-ins) cannot be accepted, except that 
individuals who are employed by the Office of Management and Budget may 
make their request on a regularly scheduled workday (Monday through

[[Page 106]]

Friday, excluding legal Federal holidays) between the hours of 9:00 a.m. 
and 5:30 p.m. Such requests for access by individuals employed by OMB 
need not be made in writing.
    (b) Procedures--(1) Content of the Request. (i) The request for 
access to a record in a system of records shall be addressed to the 
Assistant to the Director for Administration, at the address cited 
above, and shall name the system of records or contain a description (as 
concise as possible) of such system of records. The request should state 
that the request is pursuant to the Privacy Act of 1974. In the absence 
of specifying solely the Privacy Act of 1974 and, if the request may be 
processed under both the Freedom of Information Act and the Privacy Act 
and the request specifies both or neither act, the procedures under the 
Privacy Act of 1974 will be employed. The individual will be advised 
that the procedures of the Privacy Act will be utilized, of the 
existence and the general effect of the Freedom of Information Act, and 
the difference between procedures under the two acts (e.g. fees, time 
limits, access). The request should contain necessary information to 
verify the identity of the requester (see Sec. 1302.2(b)(2)(vi), of 
this part) . In addition, the requester should include any other 
information which may assist in the rapid identification of the record 
for which access is being requested (e.g., maiden name, dates of 
employment, etc.) as well as any other identifying information contained 
in and required by the OMB Notice of Systems of Records.
    (ii) If the request for access follows a prior request under Sec. 
1302.1, of this part, the same identifying information need not be 
included in the request for access if a reference is made to that prior 
correspondence, or a copy of the OMB response to that request is 
attached.
    (iii) If the individual specifically desires a copy of the record, 
the request should so specify.
    (2) OMB action on request. A request for access will ordinarily be 
answered within 10 days, except when the Assistant to the Director for 
Administration determines that access cannot be afforded in that time, 
in which case the requester will be informed of the reason for the delay 
and an estimated date by which the request will be answered. Normally, 
access will be granted within 30 days from the date the request was 
received by the Office of Management and Budget. At a minimum, the 
answer to the request for access shall include the following:
    (i) A statement that there is a record as requested or a statement 
that there is not a record in the system of records maintained by OMB;
    (ii) A statement as to whether access will be granted only by 
providing a copy of the record through the mail; or the address of the 
location and the date and time at which the record may be examined. In 
the event the requester is unable to meet the specified date and time, 
alternative arrangements may be made with the official specified in 
Sec. 1302.2(b)(1) of this part;
    (iii) A statement, when appropriate, that examination in person will 
be the sole means of granting access only when the Assistant to the 
Director for Administration has determined that it would not unduly 
impede the requester's right of access;
    (iv) The amount of fees charged, if any (see Sec. 1302.6 of this 
part). (Fees are applicable only to requests for copies.);
    (v) The name, title, and telephone number of the OMB official having 
operational control over the record; and
    (vi) The documentation required by OMB to verify the identity of the 
requester. At a minimum, OMB's verification standards include the 
following:
    (A) Current or former OMB employees. Current or former OMB employees 
requesting access to a record pertaining to them in a system of records 
maintained by OMB may, in addition to the other requirements of this 
section, and at the sole discretion of the official having operational 
control over the record, have his or her identity verified by visual 
observation. If the current or former OMB employee cannot be so 
identified by the official having operational control over the records, 
identification documentation will be required. Employee identification 
cards, annuitant identification, driver licenses, or the ``employee 
copy'' of any official personnel document in the

[[Page 107]]

record are examples of acceptable identification validation.
    (B) Other than current or former OMB employees. Individuals other 
than current or former OMB employees requesting access to a record 
pertaining to them in a system of records maintained by OMB must produce 
identification documentation of the type described herein, prior to 
being granted access. The extent of the identification documentation 
required will depend on the type of record to be accessed. In most 
cases, identification verification will be accomplished by the 
presentation of two forms of identification. Any additional requirements 
are specified in the system notices published pursuant to 5 U.S.C. 
552a(e)(4).
    (C) Access granted by mail. For records to be accessed by mail, the 
Assistant to the Director for Administration shall, to the extent 
possible, establish identity by a comparison of signatures in situations 
where the data in the record is not so sensitive that unauthorized 
access could cause harm or embarrassment to the individual to whom they 
pertain. No identification documentation will be required for the 
disclosure to the requester of information required to be made available 
to the public by 5 U.S.C. 552. When, in the opinion of the Assistant to 
the Director for Administration, the granting of access through the mail 
could reasonably be expected to result in harm or embarrassment if 
disclosed to a person other than the individual to whom the record 
pertains, a notarized statement of identity or some similar assurance of 
identity will be required.
    (D) Unavailability of identification documentation. If an individual 
is unable to produce adequate identification documentation the 
individual will be required to sign a statement asserting identity and 
acknowledging that knowingly or willfully seeking or obtaining access to 
records about another person under false pretenses may result in a fine 
of up to $5,000. In addition, depending upon the sensitivity of the 
records sought to be accessed, the official having operational control 
over the records may require such further reasonable assurances as may 
be considered appropriate; e.g., statements of other individuals who can 
attest to the identity of the requester. No verification of identity 
will be required of individuals seeking access to records which are 
otherwise available to any person under 5 U.S.C. 552, Freedom of 
Information Act.
    (E) Access by the parent of a minor, or legal guardian. A parent of 
a minor, upon presenting suitable personal identification, may access on 
behalf of the minor any record pertaining to the minor maintained by OMB 
in a system of records. A legal guardian may similarly act on behalf of 
an individual declared to be incompetent due to physical or mental 
incapacity or age by a court of competent jurisdiction, absent a court 
order or consent, a parent or legal guardian has no absolute right to 
have access to a record about a child. Minors are not precluded from 
exercising on their own behalf rights given to them by the Privacy Act.
    (F) Granting access when accompanied by another individual. When an 
individual requesting access to his or her record in a system of records 
maintained by OMB wishes to be accompanied by another individual during 
the course of the examination of the record, the individual making the 
request shall submit to the official having operational control of the 
record, a signed statement authorizing that person access to the record.
    (G) Denial of access for inadequate identification documentation. If 
the official having operation control over the records in a system of 
records maintained by OMB determines that an individual seeking access 
has not provided sufficient identification documentation to permit 
access, the official shall consult with the Assistant to the Director 
for Administration prior to finally denying the individual access.
    (H) Review of decision to deny access. Whenever the Assistant to the 
Director for Administration determines, in accordance with the 
procedures herein, that access cannot be granted, the response will also 
include a statement of the procedures to obtain a review of the decision 
to deny in accordance with Sec. 1302.5 of this part.
    (vii) Exceptions. Nothing in these regulations shall be construed to 
entitle an individual the right to access to any

[[Page 108]]

information compiled in reasonable anticipation of a civil action or 
proceedings. The mere fact that records in a system of records are 
frequently the subject of litigation does not bring those systems of 
records within the scope of this provision. This provision is not 
intended to preclude access by an individual to records which are 
available to that individual under other processes such as the Freedom 
of Information Act or the rules of civil procedure.



Sec. 1302.3  Access to the accounting of disclosures from records.

    Rules governing the granting of access to the accounting of 
disclosures are the same as those for granting access to the records 
(including verification of identity) outlined in Sec. 1302.2, of this 
part.



Sec. 1302.4  Requests to amend records.

    (a) Requirement for written requests. Individuals desiring to amend 
a record that pertain to them in a system of records maintained by OMB, 
must submit their request in writing in accordance with the procedures 
set forth herein unless this requirement is waived by the official 
having responsibility for the system of records. Records not subject to 
the Privacy Act of 1974 will not be amended in accordance with these 
provisions. However, individuals who believe that such records are 
inaccurate may bring this to the attention of OMB.
    (b) Procedures. (1) (i) The request to amend a record in a system of 
records shall be addressed to the Assistant to the Director for 
Administration. Included in the request shall be the name of the system 
and a brief description of the record proposed for amendment. In the 
event the request to amend the record is the result of the individual's 
having gained access to the record in accordance with the provisions 
concerning access to records as set forth above, copies of previous 
correspondence between the requester and OMB will serve in lieu of a 
separate description of the record.
    (ii) When the individual's identity has been previously verified 
pursuant to Sec. 1302.2(b)(2)(vi) herein, further verification of 
identity is not required as long as the communication does not suggest 
that a need for verification is present. If the individual's identity 
has not been previously verified, OMB may require identification 
validation as described in Sec. 1302.2(b)(2)(vi). Individuals desiring 
assistance in the preparation of a request to amend a record should 
contact the Assistant to the Director for Administration at the address 
cited above.
    (iii) The exact portion of the record the individual seeks to have 
amended should be clearly indicated. If possible, the proposed 
alternative language should also be set forth, or at a minimum, the 
facts which the individual believes are not accurate, relevant, timely, 
or complete should be set forth with such particularity as to permit OMB 
not only to understand the individual's basis for the request, but also 
to make an appropriate amendment to the record.
    (iv) The request must also set forth the reasons why the individual 
believes his record is not accurate, relevant, timely, or complete. In 
order to avoid the retention by OMB of personal information merely to 
permit verification of records, the burden of persuading OMB to amend a 
record will be upon the individual. The individual must furnish 
sufficient facts to persuade the official in charge of the system of the 
inaccuracy, irrelevancy, timeliness, or incompleteness of the record.
    (v) Incomplete or inaccurate requests will not be rejected 
categorically. The individual will be asked to clarify the request as 
needed.
    (2) OMB action on the request. To the extent possible, a decision 
upon a request to amend a record will be made within 10 days, excluding 
Saturdays, Sundays, and legal Federal holidays. The response reflecting 
the decision upon a request for amendment will include the following:
    (i) The decision of the Office of Management and Budget whether to 
grant in whole, or deny any part of the request to amend the record.
    (ii) The reasons for the determination for any portion of the 
request which is denied.
    (iii) The name and address of the official with whom an appeal of 
the denial may be lodged.

[[Page 109]]

    (iv) The name and address of the official designated to assist, as 
necessary, and upon request of, the individual making the request in the 
preparation of the appeal.
    (v) A description of the review of the appeal within OMB (see Sec. 
1302.5 of this part).
    (vi) A description of any other procedures which may be required of 
the individual in order to process the appeal.

If the nature of the request or the system of records precludes a 
decision within 10 days, the individual making the request will be 
informed within 10 days of the expected date for a decision. Such a 
decision will be issued as soon as it is reasonably possible, normally 
within 30 days from the receipt of the request (excluding Saturdays, 
Sundays, and legal Federal holidays) unless unusual circumstances 
preclude completing action within that time. If the expected completion 
date for the decision indicated cannot be met, the individual will be 
advised of that delay and of a revised date when the decision may be 
expected to be completed.



Sec. 1302.5  Request for review.

    (a) Individuals wishing to request a review of the decision by OMB 
with regard to an initial request to access or amend a record in 
accordance with the provisions of Sec. Sec. 1302.2 and 1302.4 of this 
part, should submit the request for review in writing and, to the extent 
possible, include the information specified in Sec. 1302.5(b), below. 
Individuals desiring assistance in the preparation of their request for 
review should contact the Assistant to the Director for Administration 
at the address provided herein.
    (b) The request for review should contain a brief description of the 
record involved or in lieu thereof, copies of the correspondence from 
OMB in which the request to access or to amend was denied and also the 
reasons why the requester believes that access should be granted or the 
disputed information amended. The request for review should make 
reference to the information furnished by the individual in support of 
his claim and the reasons as required by Sec. Sec. 1302.2 and 1302.4 of 
this part set forth by OMB in its decision denying access or amendment. 
Appeals filed without a complete statement by the requester setting 
forth the reasons for the review will, of course, be processed. However, 
in order to make the appellate process as meaningful as possible, the 
requester's disagreement should be set forth in an understandable 
manner. In order to avoid the unnecessary retention of personal 
information, OMB reserves the right to dispose of the material 
concerning the request to access or amend a record if no request for 
review in accordance with this section is received by OMB within 180 
days of the mailing by OMB of its decision upon an initial request. A 
request for review received after the 180 day period may, at the 
discretion of the Assistant to the Director for Administration, be 
treated as an initial request to access or amend a record.
    (c) The request for review should be addressed to the Assistant to 
the Director for Administration.
    (d) Upon receipt of a request for review, the Assistant to the 
Director for Administration will convene a review group composed of the 
Assistant to the Director for Administration, the General Counsel, or 
their designees, and the official having operational control over the 
record. This group will review the basis for the requested review and 
will develop a recommended course of action to the Deputy Director. If 
at any time additional information is required from the requester, the 
Assistant to the Director for Administration is authorized to acquire it 
or authorize its acquisition from the requester.
    (e) The Office of Management and Budget has established an internal 
Committee on Freedom of Information and Privacy (hereinafter referred to 
as the Committee). The Committee is composed of:
    (1) Deputy Director;
    (2) Assistant to the Director for Administration;
    (3) General Counsel;
    (4) Assistant Director for Budget Review;
    (5) Assistant Director for Legislative Reference;
    (6) Assistant to the Director for Public Affairs;
    (7) Deputy Associate Director for Information Systems;

[[Page 110]]

    (8) Deputy Associate Director for Statistical Policy;
    (9) Deputy Associate Director for National Security;
    (10) Budget and Management Officer;
    (11) Personnel Officer.
    (f) The Committee, when directed by the Assistant to the Director 
for Administration, will review the Office's administration of the 
Freedom of Information and Privacy Acts and make recommendations for the 
improvement thereto. In addition, the Committee, upon the request of the 
Deputy Director, may evaluate a request for review or appeal and 
recommend a decision to the Deputy Director, who has the final authority 
regarding appeals.
    (g) The Deputy Director will inform the requester in writing of the 
decision on the request for review within 20 days (excluding Saturdays, 
Sundays, and legal Federal holidays) from the date of receipt by OMB of 
the individual's request for review unless the Deputy Director extends 
the 20 day period for good cause. The extension and the reasons therefor 
will be sent by OMB to the requester within the initial 20 day period. 
Such extensions should not be routine and should not normally exceed an 
additional thirty days. If the decision does not grant in full the 
request for amendment, the notice of the decision will provide a 
description of the steps the individual may take to obtain judicial 
review of such a decision, a statement that the individual may file a 
concise statement with OMB setting forth the individual's reasons for 
his disagreement with the decision and the procedures for filing such a 
statement of disagreement. The Assistant to the Director for 
Administration has the authority to determine the ``conciseness'' of the 
statement, taking into account the scope of the disagreement and the 
complexity of the issues. Upon the filing of a proper concise statement 
by the individual, any subsequent disclosure of the information in 
dispute will be clearly noted so that the fact that the record is 
disputed is apparent, a copy of the concise statement furnished and a 
concise statement by OMB setting forth its reasons for not making the 
requested changes, if OMB chooses to file such a statement. A notation 
of a dispute is required to be made only if an individual informs the 
agency of his disagreement with OMB's determination in accordance with 
Sec. 1302.5 (a), (b) and (c). A copy of the individual's statement, and 
if it chooses, OMB's statement will be sent to any prior transferee of 
the disputed information who is listed on the accounting required by 5 
U.S.C. 552a(c). If the reviewing official determines that the record 
should be amended in accordance with the individual's request, OMB will 
promptly correct the record, advise the individual, and inform previous 
recipients if an accounting of the disclosure was made pursuant to 5 
U.S.C. 552(a)(c). The notification of correction pertains to information 
actually disclosed.



Sec. 1302.6  Schedule of fees.

    (a) Prohibitions against charging fees. Individuals will not be 
charged for:
    (1) The search and review of the record,
    (2) Any copies of the record produced as a necessary part of the 
process of making the record available for access, or
    (3) Any copies of the requested record when it has been determined 
that access can only be accomplished by providing a copy of the record 
through the mail.
    (b) Waiver. The Assistant to the Director for Administration may at 
no charge, provide copies of a record if it is determined the production 
of the copies is in the interest of the Government.
    (c) Fee schedule and method of payment. Fees will be charged as 
provided below except as provided in paragraphs (a) and (b) of this 
section.
    (1) Duplication of records. Records will be duplicated at a rate of 
$.10 per page for all copying of 4 pages or more. There is not charge 
for duplication 3 or fewer pages.
    (2) Where it is anticipated that the fees chargeable under this 
section will amount to more than $25.00, the requester shall be promptly 
notified of the amount of the anticipated fee or such portion thereof as 
can readily be estimated. In instances where the estimated fees will 
greatly exceed $25.00, an advance deposit may be required. The notice or 
request for an advance

[[Page 111]]

deposit shall extend an offer to the requester to consult with Office 
personnel in order to reformulate the request in a manner which will 
reduce the fees, yet still meet the needs of the requester.
    (3) Fees should be paid in full prior to issuance of requested 
copies. In the event the requester is in arrears for previous requests 
copies will not be provided for any subsequent request until the arrears 
have been paid in full.
    (4) Remittances shall be in the form either of a personal check or 
bank draft drawn on a bank in the United States, or a postal money 
order. Remittances shall be made payable to the order of the Treasury of 
the United States and mailed or delivered to the Assistant to the 
Director for Administration, Office of Management and Budget, 
Washington, DC 20503.
    (5) A receipt for fees paid will be given upon request.



PART 1303_PUBLIC INFORMATION PROVISIONS OF THE ADMINISTRATIVE PROCEDURES ACT--

Table of Contents




                              Organization

Sec.
1303.1 General.
1303.2 Authority and functions.
1303.3 Organization.

                               Procedures

1303.10 Access to information.

                       Availability of Information

1303.20 Inspection and copying.

                   Charges for Search and Reproduction

1303.30 Definitions.
1303.40 Fees to be charged--general.
1303.50 Fees to be charged--categories of requesters.
1303.60 Miscellaneous fee provisions.
1303.70 Waiver or reduction of charges.

    Authority: 5 U.S.C. 552.

    Source: 47 FR 33483, Aug. 3, 1982, unless otherwise noted.

                              Organization



Sec. 1303.1  General

    This information is furnished for the guidance of the public and in 
compliance with the requirements of section 552 of title 5, United 
States Code, as amended.



Sec. 1303.2  Authority and functions.

    The general functions of the Office of Management and Budget, as 
provided by statute and executive order, are to develop and execute the 
budget, oversee implementation of Administration policies and programs, 
advise and assist the President, and develop and implement management 
policies for the government.

[63 FR 20514, Apr. 27, 1998]



Sec. 1303.3  Organization.

    (a) The brief description of the central organization of the Office 
of Management and Budget follows:
    (1) The Director's Office includes the Director, the Deputy 
Director, the Deputy Director for Management, and the Executive 
Associate Director.
    (2) Staff Offices include General Counsel, Legislative Affairs, 
Communications, Administration, and Economic Policy.
    (3) Offices that provide OMB-wide support include the Legislative 
Reference and Budget Review Divisions.
    (4) Resource Management Offices. These offices develop and support 
the President's management and budget agenda in the areas of Natural 
Resources, Energy and Science, National Security and International 
Affairs, Health and Personnel, Human Resources, and General Government 
and Finance.
    (5) Statutory offices include the Office of Federal Financial 
Management, Office of Federal Procurement Policy, and the Office of 
Information and Regulatory Affairs.
    (b) The Office of Management and Budget is located in Washington, 
DC, and has no field offices. Staff are housed in either the Old 
Executive Office Building, 17th Street and Pennsylvania Ave, NW., or the 
New Executive Office Building, 725 17th Street NW., Washington, DC 
20503. Persons desiring to visit offices or employees of the Office of 
Management and Budget, in either building, must write or telephone ahead 
to make an appointment. Security in both buildings prevents visitors

[[Page 112]]

from entering the building without an appointment.

[63 FR 20514, Apr. 27, 1998]

                               Procedures



Sec. 1303.10  Access to information.

    (a) The Office of Management and Budget makes available information 
pertaining to matters issued, adopted, or promulgated by OMB, that are 
within the scope of 5 U.S.C. 552(a)(2). A public reading area is located 
in the Executive Office of the President Library, Room G-102, New 
Executive Office Building, 725 17th Street NW., Washington, DC 20503, 
phone (202) 395-5715. Some of these materials are also available from 
the Executive Office of the President's Publications Office, Room 2200 
New Executive Office Building, 725 17th Street NW., Washington, DC 
20503, phone (202) 395-7332. OMB issuances are also available via fax-
on-demand at (202) 395-9068, and are available electronically from the 
OMB homepage at http://www.whitehouse.gov/WH/EOP/omb. In addition, OMB 
maintains the Office of Information and Regulatory Affairs (OIRA) Docket 
Library, Room 10102, New Executive Office Building, 725 17th Street NW., 
Washington, DC 20503, phone (202) 395-6880. The Docket Library contains 
records related to information collections sponsored by the Federal 
government and reviewed by OIRA under the Paperwork Reduction Act of 
1995. The Docket Library also maintains records related to proposed 
Federal agency regulatory actions reviewed by OIRA under Executive Order 
12866 ``Regulatory Planning and Review''. Telephone logs and materials 
from meetings with the public attended by the OIRA Administrator are 
also available in the Docket Library.
    (b) The FOIA Officer is responsible for acting on all initial 
requests. Individuals wishing to file a request under the Freedom of 
Information Act (FOIA) should address their request in writing to the 
FOIA Officer, Office of Management and Budget, 725 17th Street NW., 
Washington, DC 20503, Phone (202) 395-5715. Requests for information 
shall be as specific as possible.
    (c) Upon receipt of any request for information or records, the FOIA 
Officer will determine within 20 days (excepting Saturdays, Sundays and 
legal public holidays) after the receipt of such request whether it is 
appropriate to grant the request and will immediately provide written 
notification to the person making the request. If the request is denied, 
the written notification to the person making the request shall include 
the names of the individuals who participated in the determination, the 
reasons for the denial, and a notice that an appeal may be lodged within 
the Office of Management and Budget. (Receipt of a request as used 
herein means the date the request is received in the office of the FOIA 
Officer.)
    (d) Expedited processing. (1) Requests and appeals will be taken out 
of order and given expedited treatment whenever it is determined that 
they involve:
    (i) Circumstances in which the lack of expedited treatment could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual;
    (ii) An urgency to inform the public about an actual or alleged 
federal government activity, if made by a person primarily engaged in 
disseminating information;
    (iii) The loss of substantial due process rights; or
    (iv) A matter of widespread and exceptional media interest in which 
there exist possible questions about the government's integrity which 
effect public confidence.
    (2) A request for expedited processing may be made at the time of 
the initial request for records or at any later time.
    (3) A requester who seeks expedited processing must submit a 
statement, certified to be true and correct to the best of that person's 
knowledge and belief, explaining in detail the basis for requesting 
expedited processing. For example, a requester within the category 
described in paragraph (d)(1)(ii) of this section, if not a full-time 
member of the news media, must establish that he or she is a person 
whose main professional activity or occupation is information 
dissemination, though it need not be his or her sole occupation. A 
requester within the category (d)(1)(ii) of this section also must 
establish a particular urgency to inform

[[Page 113]]

the public about the government activity involved in the request, beyond 
the public's right to know about government activity generally. The 
formality of certification may be waived as a matter of administrative 
discretion.
    (4) Within ten days of its receipt of a request for expedited 
processing, OMB will decide whether to grant it and will notify the 
requester of the decision. If a request for expedited treatment is 
granted, the request will be given priority and will be processed as 
soon as practicable. If a request for expedited processing is denied, 
any appeal of that decision will be acted on expeditiously.
    (e) Appeals shall be set forth in writing within 30 days of receipt 
of a denial and addressed to the FOIA Officer at the address specified 
in paragraph (b) of this section. The appeal shall include a statement 
explaining the basis for the appeal. Determinations of appeals will be 
set forth in writing and signed by the Deputy Director, or his designee, 
within 20 days (excepting Saturdays, Sundays, and legal public 
holidays). If, on appeal, the denial is in whole or in part upheld, the 
written determination will also contain a notification of the provisions 
for judicial review and the names of the persons who participated in the 
determination.
    (f) In unusual circumstances, the time limits prescribed in 
paragraphs (c) and (e) of this section may be extended for not more than 
10 days (excepting Saturdays, Sundays, or legal public holidays). 
Extensions may be granted by the FOIA Officer. The extension period may 
be split between the initial request and the appeal but in no instance 
may the total period exceed 10 working days. Extensions will be by 
written notice to the persons making the request and will set forth the 
reasons for the extension and the date the determination is expected.
    (g) With respect to a request for which a written notice under 
paragraph (f) of this section extends the time limits prescribed under 
paragraph (c) of this section, the agency shall notify the person making 
the request if the request cannot be processed within the time limit 
specified in paragraph (f) of this section and shall provide the person 
an opportunity to limit the scope of the request so that it may be 
processed within that time limit or an opportunity to arrange with the 
agency an alternative time frame for processing the request or a 
modified request. Refusal by the person to reasonably modify the request 
or arrange such an alternative time frame shall be considered as a 
factor in determining whether exceptional circumstances exist for 
purposes of 5 U.S.C. 552 (a)(6)(C). When OMB reasonably believes that a 
requester, or a group of requestors acting in concert, has submitted 
requests that constitute a single request, involving clearly related 
matters, OMB may aggregate those requests for purposes of this 
paragraph. One element to be considered in determining whether a belief 
would be reasonable is the time period over which the requests have 
occurred.
    (h) As used herein, but only to the extent reasonably necessary to 
the proper processing of the particular request, the term ``unusual 
circumstances'' means:
    (1) The need to search for and collect the requested records from 
establishments that are separated from the office processing the 
request;
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (3) The need for consultation, which shall be conducted with all 
practicable speed, with another agency having a substantial interest in 
the determination of the request or among two or more components of the 
agency which have a substantial subject matter interest therein.

[63 FR 20514, Apr. 27, 1998]

                       Availability of Information



Sec. 1303.20  Inspection and copying.

    When a request for information has been approved pursuant to Sec. 
1303.10, the person making the request may make an appointment to 
inspect or copy the materials requested during regular business hours by 
writing or telephoning the FOIA Officer at the address or telephone 
number listed in Sec. 1303.10(b). Such materials may be copied and 
reasonable facilities will be made available for that purpose. Copies

[[Page 114]]

of individual pages of such materials will be made available at the 
price per page specified in Sec. 1303.40(d); however, the right is 
reserved to limit to a reasonable quantity the copies of such materials 
which may be made available in this manner when copies also are offered 
for sale by the Superintendent of Documents.

[63 FR 20515, Apr. 27, 1998]

                   Charges for Search and Reproduction



Sec. 1303.30  Definitions.

    For the purpose of these regulations:
    (a) All the terms defined in the Freedom of Information Act apply.
    (b) A statute specifically providing for setting the level of fees 
for particular types of records (5 U.S.C. 552(a)(4)(A)(vi)) means any 
statute that specifically requires a government agency, such as the 
Government Printing Office (GPO) or the National Technical Information 
Service (NTIS), to set the level of fees for particular types of 
records, in order to:
    (1) Serve both the general public and private sector organizations 
by conveniently making available government information;
    (2) Ensure that groups and individuals pay the cost of publications 
and other services that are for their special use so that these costs 
are not borne by the general taxpaying public;
    (3) Operate an information dissemination activity on a self-
sustaining basis to the maximum extent possible; or
    (4) Return revenue to the Treasury for defraying, wholly or in part, 
appropriated funds used to pay the cost of disseminating government 
information.

Statutes, such as the User Fee Statute, which only provide a general 
discussion of fees without explicitly requiring that an agency set and 
collect fees for particular documents do not supersede the Freedom of 
Information Act under section (a)(4)(A)(vi) of that statute.
    (c) The term direct costs means those expenditures that OMB actually 
incurs in searching for and duplicating (and in the case of commercial 
requesters, reviewing) documents to respond to a FOIA request. Direct 
costs include, for example, the salary of the employee performing work 
(the basic rate of pay for the employee plus 16 percent of that rate to 
cover benefits) and the cost of operating duplicating machinery. Not 
included in direct costs are overhead expenses such as costs of space, 
and heating or lighting the facility in which the records are stored.
    (d) The term search means the process of looking for and retrieving 
records or information responsive to a request. It includes page-by-page 
or line-by-line identification of information within records and also 
includes reasonable efforts to locate and retrieve information from 
records maintained in electronic form or format. OMB employees should 
ensure that searching for material is done in the most efficient and 
least expensive manner so as to minimize costs for both the agency and 
the requester. For example, employees should not engage in line-by-line 
search when merely duplicating an entire document would prove the less 
expensive and quicker method of complying with a request. Search should 
be distinguished, moreover, from review of material in order to 
determine whether the material is exempt from disclosure (see paragraph 
(f) of this section).
    (e) The term duplication means the making of a copy of a document, 
or of the information contained in it, necessary to respond to a FOIA 
request. Such copies can take the form of paper, microform, audio-visual 
materials, or electronic records (e.g., magnetic tape or disk), among 
others. The requester's specified preference of form or format of 
disclosure will be honored if the record is readily reproducible in that 
format.
    (f) The term review refers to the process of examining documents 
located in response to a request that is for a commercial use (see 
paragraph (g) of this section) to determine whether any portion of any 
document located is permitted to be withheld. It also includes 
processing any documents for disclosure, e.g., doing all that is 
necessary to excise them and otherwise prepare them for release. Review 
does not include time spent resolving general legal or policy issues 
regarding the application of exemptions.

[[Page 115]]

    (g) The term `commercial use' request refers to a request from or on 
behalf of one who seeks information for a use or purpose that furthers 
the commercial, trade, or profit interests of the requester or the 
person on whose behalf the request is made. In determining whether a 
requester properly belongs in this category, OMB must determine the use 
to which a requester will put the documents requested. Moreover, where 
an OMB employee has reasonable cause to doubt the use to which a 
requester will put the records sought, or where that use is not clear 
from the request itself, the employee should seek additional 
clarification before assigning the request to a specific category.
    (h) The term educational institution refers to a preschool, a public 
or private elementary or secondary school, an institution of graduate 
higher education, an institution of undergraduate higher education, an 
institution of professional education, or an institution of vocational 
education, that operates a program or programs of scholarly research.
    (i) The term non-commercial scientific institution refers to an 
institution that is not operated on a commercial basis (as that term is 
referenced in paragraph (g) of this section), and that is operated 
solely for the purpose of conducting scientific research the results of 
which are not intended to promote any particular product or industry.
    (j) The term representative of the news media refers to any peson 
actively gathering news for an entity that is organized and operated to 
publish or broadcast news to the public. The term news means information 
that is about current events or that would be of current interest to the 
public. Examples of news media entities include television or radio 
stations broadcasting to the public at large, and publishers of 
periodicals (but only in those instances when they can qualify as 
disseminators of news) who make their products available for purchase or 
subscription by the general public. These examples are not intended to 
be all-inclusive. Moreover, as traditional methods of news delivery 
evolve (e.g., electronic dissemination of newspapers through 
telecommunications services), such alternative media would be included 
in this category. In the case of freelance journalists, they may be 
regarded as working for a news organization if they can demonstrate a 
solid basis for expecting publication through that organization, even 
though not actually employed by it. A publication contract would be the 
clearest proof, but OMB may also look to the past publication record of 
a requester in making this determination.

[52 FR 49153, Dec. 30, 1987, as amended at 63 FR 20515, Apr. 27, 1998]



Sec. 1303.40  Fees to be charged--general.

    OMB should charge fees that recoup the full allowable direct costs 
it incurs. Moreover, it shall use the most efficient and least costly 
methods to comply with requests for documents made under the FOIA. When 
documents that would be responsive to a request are maintained for 
distribution by agencies operating statutory-based fee schedule programs 
(see definition in Sections 1303.30(b)), such as the NTIS, OMB should 
inform requesters of the steps necessary to obtain records from those 
sources.
    (a) Manual searches for records. OMB will charge at the salary 
rate(s) (i.e., basic pay plus 16 percent) of the employee(s) making the 
search.
    (b) Computer searches for records. OMB will charge at the actual 
direct cost of providing the service. This will include the cost of 
operating the central processing unit (CPU) for that portion of 
operating time that is directly attributable to searching for records 
responsive to a FOIA request and operator/programmer salary 
apportionable to the search.
    (c) Review of records. Only requesters who are seeking documents for 
commercial use may be charged for time spent reviewing records to 
determine whether they are exempt from mandatory disclosure. Charges may 
be assessed only for the initial review; i.e., the review undertaken the 
first time OMB analyzes the applicability of a specific exemption to a 
particular record or portion of a record. Records or portions of records 
withheld in full under an exemption that is subsequently determined not 
to apply may

[[Page 116]]

be reviewed again to determine the applicability of other exemptions not 
previously considered. The costs for such a subsequent review is 
assessable.
    (d) Duplication of records. Records will be duplicated at a rate of 
$.15 per page. For copies prepared by computer, such as tapes or 
printouts, OMB shall charge the actual cost, including operator time, of 
production of the tape or printout. For other methods of reproduction or 
duplication, OMB will charge the actual direct costs of producing the 
document(s). If OMB estimates that duplication charges are likely to 
exceed $25, it shall notify the requester of the estimated amount of 
fees, unless the requester has indicated in advance his willingness to 
pay fees as high as those anticipated. Such a notice shall offer a 
requester the opportunity to confer with agency personnel with the 
object of reformulating the request to meet his or her needs at a lower 
cost.
    (e) Other charges. OMB will recover the full costs of providing 
services such as those enumerated below when it elects to provide them:
    (1) Certifying that records are true copies;
    (2) Sending records by special methods such as express mail.
    (f) Remittances shall be in the form either of a personal check or 
bank draft drawn on a bank in the United States, or a postal money 
order. Remittances shall be made payable to the order of the Treasury of 
the United States and mailed to the FOIA Officer, Office of Management 
and Budget, Washington, DC 20503.
    (g) A receipt for fees paid will be given upon request. Refund of 
fees paid for services actually rendered will not be made.
    (h) Restrictions on assessing fees. With the exception of requesters 
seeking documents for a commercial use, OMB will provide the first 100 
pages of duplication and the first two hours of search time without 
charge. Moreover, OMB will not charge fees to any requester, including 
commercial use requesters, if the cost of collecting a fee would be 
equal to or greater than the fee itself.
    (1) The elements to be considered in determining the ``cost of 
collecting a fee'' are the administrative costs of receiving and 
recording a requester's remittance, and processing the fee for deposit 
in the Treasury Department's special account.
    (2) For purposes of these restrictions on assessment of fees, the 
word ``pages'' refers to paper copies of ``8\1/2\ x 11'' or ``11 x 14.'' 
Thus, requesters are not entitled to 100 microfiche or 100 computer 
disks, for example. A microfiche containing the equivalent of 100 pages 
or 100 pages of computer printout, does meet the terms of the 
restriction.
    (3) Similarly, the term ``search time'' in this context has as its 
basis, manual search. To apply this term to searches made by computer, 
OMB will determine the hourly cost of operating the central processing 
unit and the operator's hourly salary plus 16 percent. When the cost of 
search (including the operator time and the cost of operating the 
computer to process a request) equals the equivalent dollar amount of 
two hours of the salary of the person performing the search, i.e., the 
operator, OMB will begin assessing charges for computer search.

[52 FR 49153, Dec. 30, 1987, as amended at 63 FR 20515, Apr. 27, 1998]



Sec. 1303.50  Fees to be charged--categories of requesters.

    There are four categories of FOIA requesters: commercial use 
requesters; educational and non-commercial scientific institutions; 
representatives of the news media; and all other requesters. The 
specific levels of fees for each of these categories are:
    (a) Commercial use requesters. When OMB receive a request for 
documents for commercial use, it will assess charges that recover the 
full direct costs of searching for, reviewing for release, and 
duplicating the record sought. Requesters must reasonably describe the 
records sought. Commercial use requesters are not entitled to two hours 
of free search time nor 100 free pages of reproduction of documents. OMB 
may recover the cost of searching for and reviewing records even if 
there is ultimately no disclosure of records (see Sec. 1303.60(b)).
    (b) Educational and non-commercial scientific institution 
requesters. OMB shall provide documents to requesters

[[Page 117]]

in this category for the cost of reproduction alone, excluding charges 
for the first 100 pages. To be eligible for inclusion in this category, 
requesters must show that the request is being made as authorized by and 
under the auspices of a qualifying institution and that the records are 
not sought for a commercial use, but are sought in furtherance of 
scholarly (if the request is from an educational institution) or 
scientific (if the request is from a non-commercial scientific 
institution) research. Requesters must reasonably describe the records 
sought.
    (c) Requesters who are representatives of the news media. OMB shall 
provide documents to requesters in this category for the cost of 
reproduction alone, excluding charges for the first 100 pages. To be 
eligible for inclusion in this category, a requester must meet the 
criteria in Sec. 1303.10(j), and his or her request must not be made 
for a commercial use. In reference to this class of requester, a request 
for records supporting the news dissemination function of the requester 
shall not be considered to be a request that is for a commercial use. 
Requesters must reasonably describe the records sought.
    (d) All other requesters. OMB shall charge requesters who do not fit 
into any of the categories above fees that recover the full reasonable 
direct cost of searching for and reproducing records that are responsive 
to the request, except that the first 100 pages of reproduction and the 
first two hours of search time shall be furnished without charge. 
Moreover, requests for records about the requesters filed in OMB's 
systems of records will continue to be treated under the fee provisions 
of the Privacy Act of 1974 which permit fees only for reproduction. 
Requesters must reasonably describe the records sought.

[52 FR 49154, Dec. 30, 1987]



Sec. 1303.60  Miscellaneous fee provisions.

    (a) Charging interest--notice and rate. OMB may begin assessing 
interest charges on an unpaid bill starting on the 31st day following 
the day on which the billing was sent. The fact that the fee has been 
received by OMB within the thirty day grace period, even if not 
processed, will suffice to stay the accrual of interest. Interest will 
be at the rate prescribed in section 3717 of title 31 of the United 
States Code and will accrue from the date of the billing.
    (b) Charges for unsuccessful search. OMB may assess charges for time 
spent searching, even if it fails to locate the records or if records 
located are determined to be exempt from disclosure. If OMB estimates 
that search charges are likely to exceed $25, it shall notify the 
requester of the estimated amount of fees, unless the requester has 
indicated in advance his willingness to pay fees as high as those 
anticipated. Such a notice shall offer the requester the opportunity to 
confer with agency personnel with the object of reformulating the 
request to meet his or her needs at a lower cost.
    (c) Aggregating requests. A requester may not file multiple requests 
at the same time, each seeking portions of a document or documents, 
solely in order to avoid payment of fees. When OMB reasonably believes 
that a requester, or a group of requestors acting in concert, has 
submitted requests that constitute a single request, involving clearly 
related matters, OMB may aggregate those requests and charge 
accordingly. One element to be considered in determining whether a 
belief would be reasonable is the time period over which the requests 
have occurred.
    (d) Advance payments. OMB may not require a requester to make an 
advance payment, i.e., payment before work is commenced or continued on 
a request, unless:
    (1) OMB estimates or determines that allowable charges that a 
requester may be required to pay are likely to exceed $250. Then, OMB 
will notify the requester of the likely cost and obtain satisfactory 
assurance of full payment where the requester has a history of prompt 
payment of FOIA fees, or require an advance payment of an amount up to 
the full estimated charges in the case of requesters with no history of 
payment; or
    (2) A requester has previously failed to pay a fee charged in a 
timely fashion (i.e., within 30 days of the date of the billing). Then, 
OMB may require the requester to pay the full amount owed plus any 
applicable interest as provided above or demonstrate that he or she has, 
in fact, paid the fee, and to make

[[Page 118]]

an advance payment of the full amount of the estimated fee before the 
agency begins to process a new request or a pending request from that 
requester.
    (3) When OMB acts under paragraph (d)(1) or (2) of this section, the 
administrative time limits prescribed in the FOIA, 5 U.S.C. 552(a)(6) 
(i.e., 20 working days from receipt of initial requests and 20 working 
days from receipt of appeals from initial denial, plus permissible 
extensions of these time limits), will begin only after OMB has received 
fee payments described in paragraphs (d)(1) and (2) of this section.
    (e) Effect of the Debt Collection Act of 1982 (Pub. L. 97-365). OMB 
should comply with provisions of the Debt Collection Act, including 
disclosure to consumer reporting agencies and use of collection 
agencies, where appropriate, to encourage repayment.

[52 FR 49154, Dec. 30, 1987, as amended at 63 FR 20515, Apr. 27, 1998]



Sec. 1303.70  Waiver or reduction of charges.

    Fees otherwise chargeable in connection with a request for 
disclosure of a record shall be waived or reduced where it is determined 
that disclosure is in the public interest because it is likely to 
contribute significantly to public understanding of the operations or 
activities of the Government and is not primarily in the commercial 
interest of the requester.

[52 FR 49155, Dec. 30, 1987]



PART 1304_POST EMPLOYMENT CONFLICT OF INTEREST--Table of Contents




Sec.
1304.4601 Purpose.
1304.4604 Definitions.
1304.4605 Post-employment restrictions.
1304.4606 Exemptions.
1304.4607 Advice to former Government employees.
1304.4608 Administrative Enforcement Procedures (18 U.S.C. 207(j); 5 CFR 
          737.27).

    Authority: Title V, Section 501(a), Pub. L. 95-521, as amended, 92 
Stat. 1864; and Sections 1 and 2, Pub. L. 96-28, 93 Stat. 76 [18 U.S.C. 
207]; 5 CFR 737.

    Source: 45 FR 84007, Dec. 22, 1980, unless otherwise noted.



Sec. 1304.4601  Purpose.

    (a) This section sets forth OMB's policy and procedures under the 
Ethics in Government Act of 1978, 18 U.S.C. 207, and the Office of 
Personnel Management's implementing regulations, 5 CFR part 737, for 
determining violations of restrictions on post-employment activities and 
for exercising OMB's administrative enforcement authority.
    (b) These regulations bar certain acts by former Government 
employees which may reasonably give the appearance of making unfair use 
of prior Government employment and affiliations. OMB acts on the premise 
that it has the primary responsibility for the enforcement of 
restrictions on post-employment activities and that criminal enforcement 
by the Department of Justice should be undertaken only in cases 
involving aggravated circumstances.
    (c) These regulations do not incorporate possible additional 
restrictions contained in a professional code of conduct to which an 
employee may also be subject.
    (d) Any person who holds a Government position after June 30, 1979, 
is subject to the restrictions under this section; except that the new 
provisions applicable to Senior employees designated by the Director of 
the Office of Government Ethics are effective February 28, 1980.



Sec. 1304.4604  Definitions.

    (a) Government Employee includes any officer or employee of the 
Executive Branch, those appointed or detailed under 5 U.S.C. 3374, and 
Special Government Employees. It does not include an individual 
performing services for the United States as an independent contractor 
under a personal service contract.
    (b) Former Government Employee means one who was, and no longer is, 
a Government employee.
    (c) Special Government Employee means an officer or employee of an 
agency who is retained, designated, appointed, or employed to perform 
temporary duties on a full-time or intermittent basis for not more than 
130 days during any period of 365 consecutive days. This applies whether 
the

[[Page 119]]

Special Government Employee is compensated or not.
    (d) Senior Employee means an employee or officer as designated in 
the statute or by the Director of the Office of Government Ethics. The 
Director of the Office of Government Ethics has designated civilians who 
have significant decision-making or supervisory responsibility and are 
paid at or equivalent to GS-17 or above as Senior Employees. Civilians 
paid at the Executive level are automatically designated by statute as 
Senior Employees. (A list of Senior Employee positions is found at 5 CFR 
737.33.)



Sec. 1304.4605  Post-employment restrictions.

    (a) General Restrictions Applicable to All Former Government 
Employees:
    (1) Permanent Bar. A former Government employee is restricted from 
acting as a representative before an agency as to a particular matter 
involving a specific party if the employee participated personally and 
substantially in that matter as a Government employee. The government 
employee is also restricted from making any oral or written 
communication to an agency with the intent to influence on behalf of 
another person as to a particular matter involving a specific party if 
the former Government employee participated personally and substantially 
in that matter as a Government employee.
    (2) Two-Year Bar. (i) A former Government employee is restricted for 
two years from acting as a representative before an agency as to a 
particular matter involving a specific party if the employee had 
official responsibility for that matter. The former Government employee 
is also restricted for two years from making any oral or written 
communication to any agency with the intent to influence on behalf of 
another person as to a particular matter involving a specific party if 
the employee had official responsibility for that matter.
    (ii) In order to be a matter for which the former Government 
employee had official responsibility, the matter must actually have been 
pending under the employee's responsibility within the period of one 
year prior to the termination of such responsibility.
    (iii) The statutory two-year restriction period is measured from the 
date when the employee's responsibility for a particular matter ends, 
not from the termination of Government service.
    (b) Restrictions Applicable Only to Former Senior Employees:
    (1) Two-Year Bar on Assisting in Representing. (i) A former Senior 
Employee is restricted for two years from assisting in representing 
another person by personal appearance before an agency as to a 
particular matter involving a specific party if the former Senior 
Employee participated personally and substantially in that matter as a 
Government employee.
    (ii) The statutory two-year period is measured from the date of 
termination of employment in the position that was held by the Senior 
Employee when he participated personally and substantially in the matter 
involved.
    (2) One-Year Bar on Attempts to Influence Former Agency. (i) A 
former Senior Employee is restricted for one year from any transactions 
with the former agency on a particular matter with the intent to 
influence the agency, regardless of the former Senior Employee's prior 
involvement in that matter.
    (ii) This restriction is aimed at the possible use of personal 
influence based on past Government affiliations in order to facilitate 
transaction of business. Therefore, it includes matters which first 
arise after a Senior Employee leaves Government service.
    (iii) The restriction applies whether the former Senior Employee is 
representing another or representing himself, either by appearance 
before an agency or through communication with that agency.
    (c) OFPP is a separate agency for purposes of the foregoing 
restrictions on post-employment activities.



Sec. 1304.4606  Exemptions.

    (a) General. (1) Communications made solely to furnish scientific or 
technological information are exempt from these prohibitions.
    (2) A former Government employee may be exempted from the 
restrictions on post-employment practices if the

[[Page 120]]

Deputy Director of OMB, in consultation with the Director of the Office 
of Government Ethics, executes a certification that is published in the 
Federal Register. The certification shall state that the former 
Government employee has outstanding qualifications in a scientific, 
technological or other technical discipline; is acting with respect to a 
particular matter which requires such qualifications; and the national 
interest would be served by his participation.
    (b) Specific. The one-year bar shall not apply to a former Senior 
Employee's representation on new matters if the former Senior Employee 
is:
    (1) An elected State or local government official, who is acting on 
behalf of such government; or
    (2) Regularly employed by or acting on behalf of an agency or 
instrumentality of a State or local government; an accredited, degree-
granting institution of higher education; or a non-profit hospital or 
medical research organization.



Sec. 1304.4607  Advice to former Government employees.

    The Office of General Counsel, OMB, has the responsibility for 
providing assistance promptly to former Government employees who seek 
advice on specific problems.



Sec. 1304.4608  Administrative Enforcement Procedures (18 U.S.C. 207(j); 5 CFR 737.27).

    (a) Whenever an allegation is made that a former Government employee 
has violated 18 U.S.C. 207(a), (b) or (c) or any of the regulations 
promulgated thereunder by the Office of Government Ethics or by OMB, the 
allegation and any supporting evidence shall be transmitted through the 
Office of General Counsel to the Deputy Director, OMB.
    (b) Allegations and evidence shall be safeguarded so as to protect 
the privacy of former employees prior to a determination of sufficient 
cause to initiate an administrative disciplinary proceeding.
    (c) If review by the Office of General Counsel, OMB, shows that the 
information concerning a possible violation does not appear to be 
frivolous, the Deputy Director, OMB, shall expeditiously provide all 
relevant evidence, any appropriate comments, and copies of applicable 
agency regulations to the director, Office of Government Ethics, and to 
the Criminal Division, Department of Justice. Unless the Department of 
Justice informs OMB that it does not intend to initiate criminal 
prosecution, OMB shall coordinate any investigation or administrative 
action with the Department of Justice in order to avoid prejudicing 
criminal proceedings.
    (d) After appropriate review and recommendation by the Office of 
General Counsel, if the Deputy Director, OMB, determines that there is 
reasonable cause to believe that there has been a violation, the Deputy 
Director may direct the Office of General Counsel to initiate an 
administrative disciplinary proceeding and may designate an individual 
to represent OMB in the proceeding.
    (e) Notice. The Office of General Counsel shall provide the former 
Government employee with adequate notice of its intention to institute a 
proceeding and with an opportunity for a hearing. The notice must 
include a statement of allegations, and the basis thereof, in sufficient 
detail to enable the former Government employee to prepare an adequate 
defense; notification of the right to a hearing; and an explanation of 
the method by which a hearing may be requested.
    (f) Hearing. A hearing may be obtained by submitting a written 
request to the Office of General Counsel.
    (g) Examiner. The presiding official at the proceedings shall be the 
hearing examiner, who is delegated authority by the Director, OMB, to 
make an initial decision. The hearing examiner shall be an attorney in 
the Office of General Counsel designated by the General Counsel. The 
hearing examiner shall be impartial and shall not have participated in 
any manner in the decision to initiate the proceedings.
    (h) Time, Date and Place. The hearing shall be conducted at a 
reasonable time, date, and place. The hearing examiner shall give due 
regard in setting the hearing date to the former Government employee's 
need for adequate time to properly prepare a defense and

[[Page 121]]

for an expeditious resolution of allegations that may be damaging to his 
reputation.
    (i) Hearing Rights. The hearing shall include, as a minimum, the 
right to represent oneself or to be represented by counsel; the right to 
introduce and examine witnesses and to submit physical evidence; the 
right to confront and cross-examine adverse witnesses; the right to 
present oral argument; and, on request, the right to have a transcript 
or recording of the proceedings.
    (j) Burden of Proof. OMB has the burden of proof and must establish 
substantial evidence of a violation.
    (k) Decision. The hearing examiner shall make a decision based 
exclusively on matters of record in the proceedings. All findings of 
fact and conclusions of law relevant to the matters at issue shall be 
set forth in the decision.
    (l) Appeal within OMB. Within 30 days of the date of the hearing 
examiner's decision, either party may appeal the decision to the 
Director. The Director shall make a decision on the appeal based solely 
on the record of the proceedings or on those portions of the record 
agreed to by the parties to limit the issues. If the Director modifies 
or reverses the hearing examiner's decision, he shall specify the 
findings of fact and conclusions of law that are different from those of 
the hearing examiner.
    (m) Administrative Sanctions. Administrative sanctions may be taken 
if the former Government employee fails to request a hearing after 
receipt of adequate notice or if a final administrative determination of 
a violation of 18 U.S.C. 207 (a), (b) or (c) or regulations promulgated 
thereunder has been made. The Director may prohibit the former 
Government employee from appearance or communication with OMB on behalf 
of another for a period not to exceed five years (5 CFR 737.27(a)(9)(i)) 
or take other appropriate disciplinary action (5 CFR 737.27(a)(9)(ii)).
    (n) Judicial Review. Any person found by an OMB administrative 
decision to have participated in a violation of 18 U.S.C. 207 (a), (b) 
or (c) or regulations promulgated thereunder may seek judicial review of 
the administrative decision.



PART 1305_RELEASE OF OFFICIAL INFORMATION, AND TESTIMONY BY OMB PERSONNEL AS 

WITNESSES, IN LITIGATION--Table of Contents




Sec.
1305.1 Purpose and scope.
1305.2 Production prohibited unless approved.
1305.3 Procedures in the event of a demand for disclosure.
1305.4 Procedure in the event of an adverse ruling.
1305.5 No private right of action.

    Authority: 31 U.S.C. 502.

    Source: 62 FR 29285, May 30, 1997, unless otherwise noted.



Sec. 1305.1  Purpose and scope.

    This part contains the regulations of the Office of Management and 
Budget (OMB) concerning procedures to be followed when, in litigation 
(including administrative proceedings), a subpoena, order or other 
demand (hereinafter in this part referred to as a ``demand'') of a court 
or other authority is issued for the production or disclosure of:
    (a) Any material contained in the files of OMB;
    (b) Any information relating to materials contained in the files of 
OMB; or
    (c) Any information or material acquired by any person while such 
person was an employee of OMB as a part of the performance of the 
person's official duties or because of the person's official status.



Sec. 1305.2  Production prohibited unless approved.

    No employee or former employee of OMB shall, in response to a demand 
of a court or other authority, produce any material contained in the 
files of OMB, disclose any information relating to materials contained 
in the files of OMB, or disclose any information or produce any material 
acquired as part of the performance of the person's official duties, or 
because of the person's official status, without the prior approval of 
the General Counsel.



Sec. 1305.3  Procedures in the event of a demand for disclosure.

    (a) Whenever a demand is made upon an employee or former employee of

[[Page 122]]

OMB for the production of material or the disclosure of information 
described in Sec. 1305.2, he shall immediately notify the General 
Counsel. If possible, the General Counsel shall be notified before the 
employee or former employee concerned replies to or appears before the 
court or other authority.
    (b) If information or material is sought by a demand in any case or 
matter in which OMB is not a party, an affidavit (or, if that is not 
feasible, a statement by the party seeking the information or material, 
or by his attorney) setting forth a summary of the information or 
material sought and its relevance to the proceeding, must be submitted 
before a decision is made as to whether materials will be produced or 
permission to testify or otherwise provide information will be granted. 
Any authorization for testimony by a present or former employee of OMB 
shall be limited to the scope of the demand as summarized in such 
statement.
    (c) If response to a demand is required before instructions from the 
General Counsel are received, an attorney designated for that purpose by 
OMB shall appear, and shall furnish the court or other authority with a 
copy of the regulations contained in this part and inform the court or 
other authority that the demand has been or is being, as the case may 
be, referred for prompt consideration by the General Counsel. The court 
or other authority shall be requested respectfully to stay the demand 
pending receipt of the requested instructions from the General Counsel.

(Approved by the Office of Management and Budget under control number 
0348-0056)



Sec. 1305.4  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 1305.3(c) 
pending receipt of instructions from the General Counsel, or if the 
court or other authority rules that the demand must be complied with 
irrespective of the instructions from the General Counsel not to produce 
the material or disclose the information sought, the employee or former 
employee upon whom the demand has been made shall respectfully decline 
to comply with the demand (United States ex rel. Touhy v. Ragen, 340 
U.S. 462 (1951)).

(Approved by the Office of Management and Budget under control number 
0348-0056)



Sec. 1305.5  No private right of action.

    This part is intended only to provide guidance for the internal 
operations of OMB, and is not intended to, and does not, and may not be 
relied upon to create a right or benefit, substantive or procedural, 
enforceable at law by a party against the United States.

[[Page 123]]



                       SUBCHAPTER B_OMB DIRECTIVES



PART 1310_OMB CIRCULARS--Table of Contents




Sec.
1310.1 Policy guidelines.
1310.3 Availability of circulars.
1310.5 List of current circulars.

    Authority: 31 U.S.C. 501-06.

    Source: 63 FR 70311, Dec. 21, 1998, unless otherwise noted.



Sec. 1310.1  Policy guidelines.

    In carrying out its responsibilities, the Office of Management and 
Budget issues policy guidelines to Federal agencies to promote 
efficiency and uniformity in Government activities. These guidelines are 
normally in the form of circulars.



Sec. 1310.3  Availability of circulars.

    Copies of individual circulars are available at OMB's Internet home 
page; you may access them at http://www.whitehouse.gov/WH/EOP/omb. 
Copies are also available from the EOP Publications Office, 725 17th 
Street NW., Room 2200, Washington, DC 20503; (202) 395-7332. Selected 
circulars are also available through fax-on-demand, by calling (202) 
395-9068.



Sec. 1310.5  List of current circulars.

    The following list includes all circulars in effect as of December 
1, 1998.

No. and Title
A-1--``System of Circulars and Bulletins to Executive Departments and 
Establishments''
A-11--``Preparation and Submission of Budget Estimates'' (Part 1)
    ``Preparation and Submission of Strategic Plans and Annual 
Performance Plans'' (Part 2)
    ``Planning, Budgeting, and Acquisition of Capital Assets'' (Part 3)
    ``Capital Programming Guide'' (Supplement to Part 3)
A-16--``Coordination of Surveying, Mapping, and Related Spatial Data 
Activities''
A-19--``Legislative Coordination and Clearance''
A-21--``Cost Principles for Educational Institutions''
A-25--``User Charges''
A-34--``Instructions on Budget Execution''
A-45--``Rental and Construction of Government Quarters''
A-50--``Audit Followup''
A-76--``Performance of Commercial Activities''
A-87--``Cost Principles for State, Local, and Indian Tribal 
Governments''
A-89--``Federal Domestic Assistance Program Information''
A-94--``Guidelines and Discount Rates for Benefit-Cost Analysis of 
Federal Programs''
A-97--``Rules and regulations permitting Federal agencies to provide 
specialized or technical services to State and local units of government 
under Title III of the Intergovernmental Cooperation Act of 1968''
A-102--``Grants and Cooperative Agreements With State and Local 
Governments''
A-109--``Major System Acquisitions''
A-110--``Uniform Administrative Requirements for Grants and Agreements 
with Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations''
A-119--``Federal Participation in the Development and Use of Voluntary 
Consensus Standards and in Conformity Assessment Activities''
A-122--``Cost Principles for Non-Profit Organizations''
A-123--``Management Accountability and Control''
A-125--``Prompt Payment''
A-126--``Improving the Management and Use of Government Aircraft''
A-127--``Financial Management Systems''
A-129--``Policies for Federal Credit Programs and Non-Tax Receivables ``
A-130--``Management of Federal Information Resources''
A-131--``Value Engineering''
A-133--``Audits of States, Local Governments, and Non-Profit 
Organizations''
A-134--``Financial Accounting Principles and Standards''

[[Page 124]]

A-135--``Management of Federal Advisory Committees''



PART 1312_CLASSIFICATION, DOWNGRADING, DECLASSIFICATION AND SAFEGUARDING OF 

NATIONAL SECURITY INFORMATION--Table of Contents




   Subpart A_Classification and Declassification of National Security 
                               Information

Sec.
1312.1 Purpose and authority.
1312.2 Responsibilities.
1312.3 Classification requirements.
1312.4 Classified designations.
1312.5 Authority to classify
1312.6 Duration of classification.
1312.7 Derivative classification.
1312.8 Standard identification and markings.
1312.9 Downgrading and declassification.
1312.10 Systematic review guidelines.
1312.11 Challenges to classifications.
1312.12 Security Program Review Committee.

     Subpart B_Control and Accountability of Classified Information

1312.21 Purpose and authority.
1312.22 Responsibilities.
1312.23 Access to classified information.
1312.24 Access by historical researchers and former Presidential 
          appointees.
1312.25 Storage.
1312.26 Control of secret and confidential material.
1312.27 Top secret control.
1312.28 Transmission of classified material.
1312.29 Destruction.
1312.30 Loss or possible compromise.
1312.31 Security violations.

               Subpart C_Mandatory Declassification Review

1312.32 Purpose and authority.
1312.33 Responsibility.
1312.34 Information in the custody of OMB.
1312.35 Information classified by another agency.
1312.36 Appeal procedure.
1312.37 Fees.

    Authority: Executive Order 12958, April 20, 1995, 3 CFR, 1995 Comp., 
p. 333.

    Source: 62 FR 25426, May 9, 1997, unless otherwise noted.



   Subpart A_Classification and Declassification of National Security 
                               Information



Sec. 1312.1  Purpose and authority.

    This subpart sets forth the procedures for the classification and 
declassification of national security information in the possession of 
the Office of Management and Budget. It is issued under the authority of 
Executive Order 12958, (60 FR 19825, 3 CFR, 1995 Comp., P.333), as 
implemented by Information Security Oversight Office Directive No. 1 (32 
CFR part 2001), and is applicable to all OMB employees.



Sec. 1312.2  Responsibilities.

    The effectiveness of the classification and declassification program 
in OMB depends entirely on the amount of attention paid to it by 
supervisors and their staffs in those offices and divisions that possess 
or produce classified material. Officials who originate classified 
information are responsible for proper assignment of a classification to 
that material and for the decision as to its declassification. Officials 
who produce documents containing classified information must determine 
the source of the classification for that information and must ensure 
that the proper identity of that source is shown on the document. 
Custodians of classified material are responsible for its safekeeping 
and for ensuring that such material is adequately marked as to current 
classification. Custodians are also responsible for the control of and 
accounting for all classified material within their area of jurisdiction 
as prescribed in OMB Manual Section 1030.
    (a) EOP Security Officer. In cooperation with the Associate Director 
(or Assistant Director) for Administration, the EOP Security Officer 
supervises the administration of this section and develops programs to 
assist in the compliance with the Order. Specifically, he:
    (1) Promotes the correct understanding of this section by all 
employees by providing annual security refresher briefings and ensures 
that new employees attend initial briefings about overall security 
procedures and policies.

[[Page 125]]

    (2) Issues and keeps current such classification guides and 
guidelines for review for declassification as are required by the Order.
    (3) Conducts periodic reviews of classified documents produced and 
provides assistance and guidance where necessary.
    (4) Maintains and publishes a current listing of all officials who 
have been designated in writing to have Top Secret, Secret, and 
Confidential original classification authority.
    (b) Heads of divisions or offices. The head of each division or 
major organizational unit is responsible for the administration of this 
section within his or her area. Appropriate internal guidance should be 
issued to cover special or unusual conditions within an office.



Sec. 1312.3  Classification requirements.

    United States citizens must be kept informed about the activities of 
their Government. However, in the interest of national security, certain 
official information must be subject to constraints on its dissemination 
or release. This information is classified in order to provide that 
protection.
    (a) Information shall be considered for classification if it 
concerns:
    (1) Military plans, weapons systems, or operations;
    (2) Foreign government information;
    (3) Intelligence activities (including special activities), 
intelligence sources or methods, or cryptology;
    (4) Foreign relations or foreign activities of the United States, 
including confidential sources;
    (5) Scientific, technological, or economic matters relating to the 
national security;
    (6) United States Government programs for safeguarding nuclear 
materials or facilities; or
    (7) Vulnerabilities or capabilities of systems, installations, 
projects or plans relating to the national security.
    (b) When information is determined to meet one or more of the 
criteria in paragraph (a) of this section, it shall be classified by an 
original classification authority when he/she determines that its 
unauthorized disclosure reasonably could be expected to cause at least 
identifiable damage to the national security.
    (c) Unauthorized disclosure of foreign government information, 
including the identity of a confidential foreign source of intelligence 
sources or methods, is presumed to cause damage to the national 
security.
    (d) Information classified in accordance with this section shall not 
be declassified automatically as a result of any unofficial or 
inadvertent or unauthorized disclosure in the United States or abroad of 
identical or similar information.



Sec. 1312.4  Classified designations.

    (a) Except as provided by the Atomic Energy Act of 1954, as amended, 
(42 U.S.C. 2011) or the National Security Act of 1947, as amended, (50 
U.S.C. 401) Executive Order 12958 provides the only basis for 
classifying information. Information which meets the test for 
classification may be classified in one of the following three 
designations:
    (1) Top Secret. This classification shall be applied only to 
information the unauthorized disclosure of which reasonably could be 
expected to cause exceptionally grave damage to the national security 
that the original classification authority is able to identify or 
describe.
    (2) Secret. This classification shall be applied only to information 
the unauthorized disclosure of which reasonably could be expected to 
cause serious damage to the national security that the original 
classification authority is able to identify or describe.
    (3) Confidential. This classification shall be applied only to 
information the unauthorized disclosure of which reasonably could be 
expected to cause damage to the national security that the original 
classification authority is able to identify or describe.
    (b) If there is significant doubt about the need to classify 
information, it shall not be classified. If there is significant doubt 
about the appropriate level of classification, it shall be classified at 
the lower level.



Sec. 1312.5  Authority to classify.

    (a) The authority to originally classify information or material 
under this part shall be limited to those officials

[[Page 126]]

concerned with matters of national security. The officials listed in 
this section are granted authority by the Director, OMB, to assign 
original classifications as indicated to information or material that is 
originated by OMB staff and relating to the national security of the 
United States:
    (1) Top Secret and below:
    (i) Deputy Director.
    (ii) Deputy Director for Management.
    (iii) Associate Director for National Security and International 
Affairs.
    (iv) Associate Director for Natural Resources, Energy and Science.
    (2) Secret and below:
    (i) Deputy Associate Director for National Security.
    (ii) Deputy Associate Director for International Affairs.
    (iii) Deputy Associate Director for Energy and Science.
    (b) Classification authority is not delegated to persons who only 
reproduce, extract, or summarize classified information, or who only 
apply classification markings derived from source material or from a 
classification guide.



Sec. 1312.6  Duration of classification.

    (a)(1) When determining the duration of classification for 
information originally classified under Executive Order 12958, an 
original classification authority shall follow the following sequence:
    (i) He/She shall attempt to determine a date or event that is less 
than 10 years from the date of original classification, and which 
coincides with the lapse of the information's national security 
sensitivity, and shall assign such date or event as the declassification 
instruction;
    (ii) If unable to determine a date or event of less than 10 years, 
he/she shall ordinarily assign a declassification date that is 10 years 
from the date of the original classification decision;
    (iii) He/She may extend the duration of classification or reclassify 
specific information for a period not to exceed 10 additional years if 
such action is consistent with the exemptions as outlined in Section 
1.6(d) of the Executive Order. This provision does not apply to 
information contained in records that are more than 25 years old and 
have been determined to have permanent historical value under Title 44 
United States Code.
    (iv) He/She may exempt from declassification within 10 years 
specific information, which is consistent with the exemptions as 
outlined in Section 1.6 (d) of the Executive Order.
    (2) Extending Duration of Classification. Extensions of 
classification are not automatic. If an original classification 
authority with jurisdiction over the information does not extend the 
date or event for declassification, the information is automatically 
declassified upon the occurrence of the date or event. If an original 
classification authority has assigned a date or event for 
declassification that is 10 years or less from the date of 
classification, an original classification authority with jurisdiction 
over the information may extend the classification duration of such 
information for additional periods not to exceed 10 years at a time. 
Records determined to be of historical value may not exceed the duration 
of 25 years.
    (b) When extending the duration of classification, the original 
classification authority must:
    (1) Be an original classification authority with jurisdiction over 
the information.
    (2) Ensure that the information continues to meet the standards for 
classification under the Executive Order.
    (3) Make reasonable attempts to notify all known holders of the 
information. Information classified under prior orders marked with a 
specific date or event for declassification is automatically 
declassified upon that date or event. Information classified under prior 
orders marked with Originating Agency's Determination Required (OADR) 
shall:
    (i) Be declassified by a declassification authority as defined in 
Section 3.1 of the Executive Order.
    (ii) Be re-marked by an authorized original classification authority 
with jurisdiction over the information to establish a duration of 
classification consistent with the Executive Order.
    (iii) Be subject to Section 3.4 of the Executive Order if the 
records are determined to be of historical value and are to remain 
classified for 25 years

[[Page 127]]

from the date of its original classification.



Sec. 1312.7  Derivative classification.

    A derivative classification means that the information is in 
substance the same information that is currently classified, usually by 
another agency or classification authority. The application of 
derivative classification markings is the responsibility of the person 
who incorporates, restates, paraphrases, or generates in new form 
information that is already classified, or one who applies such 
classification markings in accordance with instructions from an 
authorized classifier or classification guide. Extreme care must be 
taken to continue classification and declassification markings when such 
information is incorporated into OMB documents. The duplication or 
reproduction of existing classified information is not derivative 
classification. Persons who use derivative classification need not 
possess original classification authority.



Sec. 1312.8  Standard identification and markings.

    (a) Original Classification. At the time classified material is 
produced, the classifier shall apply the following markings on the face 
of each originally classified document, including electronic media:
    (1) Classification Authority. The name/personal identifier, and 
position title of the original classifier shall appear on the 
``Classified By'' line.
    (2) Agency and Office of Origin. If not otherwise evident, the 
agency and office of origin shall be identified and placed below the 
name on the ``Classified By'' line.
    (3) Reasons for Classification. Identify the reason(s) to classify. 
The classifier shall include, at a minimum, a brief reference to the 
pertinent classification category(ies), or the number 1.5 plus the 
letter(s) that corresponds to that classification category in Section 
1.5 of the Executive Order.
    (4) Declassification instructions. These instructions shall indicate 
the following:
    (i) The duration of the original classification decision shall be 
placed on the ``Declassify On'' line.
    (ii) The date or event for declassification that corresponds to the 
lapse of the information's national security sensitivity, which may not 
exceed 10 years from the date of the original decision.
    (iii) When a specific date or event within 10 years cannot be 
established, the classifier will apply the date that is 10 years from 
the date of the original decision.
    (iv) The exemption category from declassification. Upon 
determination that the information must remain classified beyond 10 
years, the classifier will apply the letter ``X'' plus a brief 
recitation of the exemption category(ies), or the letter ``X'' plus the 
number that corresponds to the exemption category(ies) in Section 1.6(d) 
of the Executive Order.
    (v) An original classification authority may extend the duration of 
classification for successive periods not to exceed 10 years at a time. 
The ``Declassify On'' line shall be revised to include the new 
declassification instructions and shall include the identity of the 
person authorizing the extension and the date of the action.
    (vi) Information exempted from automatic declassification at 25 
years should on the ``Declassify On'' line be revised to include the 
symbol ``25X'' plus a brief reference to the pertinent exemption 
categories/numbers of the Executive Order.
    (5) The overall classification of the document is the highest level 
of information in the document and will be conspicuously placed stamped 
at the top and bottom of the outside front and back cover, on the title 
page, and on the first page.
    (6) The highest classification of individual pages will be stamped 
at the top and bottom of each page, to include ``unclassified'' when it 
is applicable.
    (7) The classification of individual portions of the document, 
(ordinarily a paragraph, but including subjects, titles, graphics) shall 
be marked by using the abbreviations (TS), (S), (C), or (U), will be 
typed or marked at the beginning or end of each paragraph or section of 
the document. If all portions of the document are classified at the same 
level, this may be indicated by a statement to that effect.

[[Page 128]]

    (b) Derivative Classification. Information classified derivatively 
on the basis of source documents shall carry the following markings on 
those documents:
    (1) The derivative classifier shall concisely identify the source 
document(s) or the classification guide on the ``Derived From'' line, 
including the agency and where available the office of origin and the 
date of the source or guide. When a document is classified derivatively 
on the basis of more than one source document or classification guide, 
the ``Derived From'' line shall appear as ``Derived From: Multiple 
Sources''.
    (2) The derivative classifier shall maintain the identification of 
each source with the file or record copy of the derivatively classified 
document. Where practicable the copies of the document should also have 
this list attached.
    (3) A document derivatively classified on the basis of a source 
document that is itself marked ``Multiple Sources'' shall cite the 
source document on its ``Derived From'' line rather than the term 
``Multiple Sources''.
    (4) The reason for the original classification decision, as 
reflected in the source document, is not required to be transferred in a 
derivative classification action.
    (5) Declassification instructions shall carry forward the 
instructions on the ``Declassify On'' line from the source document to 
the derivation document or the duration instruction from the 
classification guide. Where there are multiple sources, the longest 
duration of any of its sources shall be used.
    (6) When a source document or classification guide contains the 
declassification instruction ``Originating Agency's Determination 
Required'' (OADR) the derivative document shall carry forward the fact 
that the source document(s) were so marked and the date of origin of the 
most recent source document (s).
    (7) The derivatively classified document shall be conspicuously 
marked with the highest level of classification of information.
    (8) Each portion of a derivatively classified document shall be 
marked in accordance with its source.
    (9) Each office shall, consistent with Section 3.8 of the Executive 
Order, establish and maintain a database of information that has been 
declassified.
    (c) Additional Requirements. (1) Markings other than ``Top Secret'', 
``Secret'', and ``Confidential'' shall not be used to identify 
classified national security information.
    (2) Transmittal documents will be stamped to indicate the highest 
classification of the information transmitted, and shall indicate 
conspicuously on its face the following or something similar 
``Unclassified When classified Enclosure Removed'' to indicate the 
classification of the transmittal document standing alone.
    (3) The classification data for material other than documents will 
be affixed by tagging, stamping, recording, or other means to insure 
that recipients are aware of the requirements for the protection of the 
material.
    (4) Documents containing foreign government information shall 
include the markings ``This Document Contains (country of origin) 
Information''. If the identity of the specific government must be 
concealed, the document shall be marked'' This Document Contains Foreign 
Government Information,'' and pertinent portions marked ``FGI'' together 
with the classification level, e.g., ``(FGI-C)''. In such cases, 
separate document identifying the government shall be maintained in 
order to facilitate future declassification actions.
    (5) Documents, regardless of medium, which are expected to be 
revised prior to the preparation of a finished product--working papers--
shall be dated when created, marked with highest classification, 
protected at that level, and destroyed when no longer needed. When any 
of the following conditions exist, the working papers shall be 
controlled and marked in the same manner as prescribed for a finished 
classified document:
    (i) Released by the originator outside the originating activity;
    (ii) Retained more than 180 days from the date of origin;
    (iii) Filed permanently.
    (6) Information contained in unmarked records, or Presidential or 
related materials, and which pertain to

[[Page 129]]

the national defense or foreign relations of the U.S. and has been 
maintained and protected as classified information under prior orders 
shall continue to be treated as classified information under the 
Executive Order and is subject to its provisions regarding 
declassification.



Sec. 1312.9  Downgrading and declassification.

    Classified information originated by OMB offices will be downgraded 
or declassified as soon as it no longer qualifies for continued 
protection under the provisions of the classification guides. Authority 
to downgrade or declassify OMB-originated information is granted to 
those authorized to classify (See Sec. 1312.5). Additionally, the 
Associate Director (or Assistant Director) for Administration is 
authorized to exercise downgrading and declassification actions up to 
and including the Top Secret level.
    (a) Transferred material. Information which was originated by an 
agency that no longer exists, or that was received by OMB in conjunction 
with a transfer of functions, is deemed to be OMB-originated material. 
Information which has been transferred to another agency for storage 
purposes remains the responsibility of OMB.
    (b) Periodic review of classified material. Each office possessing 
classified material will review that material on an annual basis or in 
conjunction with the transfer of files to non-current record storage and 
take action to downgrade or declassify all material no longer qualifying 
for continued protection at that level. All material transferred to non-
current record storage must be properly marked with correct downgrade 
and declassification instructions.



Sec. 1312.10  Systematic review guidelines.

    The EOP Security Officer will prepare and keep current such 
guidelines as are required by Executive Order 12958 for the downgrading 
and declassification of OMB material that is in the custody of the 
Archivist of the United States.



Sec. 1312.11  Challenges to classifications.

    OMB employees are encouraged to familiarize themselves with the 
provisions of Executive Order 12958 and with OMB Manual Sections 1010, 
1020, and 1030. Employees are also encouraged to question or to 
challenge those classifications they believe to be improper, 
unnecessary, or for an inappropriate time. Such questions or challenges 
may be addressed to the originator of the classification, unless the 
challenger desires to remain anonymous, in which case the question may 
be directed to the EOP Security Officer.



Sec. 1312.12  Security Program Review Committee.

    The Associate Director (or Assistant Director) for Administration 
will chair the OMB Security Program Review Committee, which will act on 
suggestions and complaints about the OMB security program.



     Subpart B_Control and Accountability of Classified Information



Sec. 1312.21  Purpose and authority.

    This subpart sets forth procedures for the receipt, storage, 
accountability, and transmission of classified information at the Office 
of Management and Budget. It is issued under the authority of Executive 
Order 12958, (60 FR 19825, 3 CFR, 1995 Comp., P.333), as implemented by 
Information Security Oversight Office Directive No 1 (32 CFR part 2001), 
and is applicable to all OMB employees.



Sec. 1312.22  Responsibilities.

    The effective direction by supervisors and the alert performance of 
duty by employees will do much to ensure the adequate security of 
classified information in the possession of OMB offices. Each employee 
has a responsibility to protect and account for all classified 
information that he/she knows of within his/her area of responsibility. 
Such information will be made available only to those persons who have 
an official need to know and who have been granted the appropriate 
security clearance. Particular care must be taken not to discuss 
classified information

[[Page 130]]

over unprotected communications circuits (to include intercom and 
closed-circuit TV), at non-official functions, or at any time that it 
might be revealed to unauthorized persons. Classified information may 
only be entered into computer systems meeting the appropriate security 
criteria.
    (a) EOP Security Officer. In cooperation with the Associate Director 
(or Assistant Director) for Administration, the EOP Security Officer 
supervises the administration of this section. Specifically, he/she:
    (1) Promotes the correct understanding of this section and insures 
that initial and annual briefings about security procedures are given to 
all new employees.
    (2) Provides for periodic inspections of office areas and reviews of 
produced documents to ensure full compliance with OMB regulations and 
procedures.
    (3) Takes prompt action to investigate alleged violations of 
security, and recommends appropriate administrative action with respect 
to violators.
    (4) Supervises the annual inventories of Top Secret material.
    (5) Ensures that containers used to store classified material meet 
the appropriate security standards and that combinations to security 
containers are changed as required.
    (b) Heads of Offices. The head of each division or office is 
responsible for the administration of this section in his/her area. 
These responsibilities include:
    (1) The appointment of accountability control clerks as prescribed 
in Sec. 1312.26.
    (2) The maintenance of the prescribed control and accountability 
records for classified information within the office.
    (3) Establishing internal procedures to ensure that classified 
material is properly safeguarded at all times.



Sec. 1312.23  Access to classified information.

    Classified information may be made available to a person only when 
the possessor of the information establishes that the person has a valid 
``need to know'' and the access is essential to the accomplishment of 
official government duties. The proposed recipient is eligible to 
receive classified information only after he/she has been granted a 
security clearance by the EOP Security Officer. Cover sheets will be 
used to protect classified documents from inadvertent disclosure while 
in use. An SF-703 will be used for Top Secret material; an SF-704 for 
Secret material, and an SF-705 for Confidential material. The cover 
sheet should be removed prior to placing the document in the files.



Sec. 1312.24  Access by historical researchers and former Presidential appointees.

    (a) The requirements of Section 4.2(a)(3) of Executive Order 12958 
may be waived for persons who are engaged in historical research 
projects, or who previously have occupied policy-making positions to 
which they were appointed by the President. Waivers may be granted only 
if the Associate Director (or Assistant Director) for Administration, in 
cooperation with the EOP Security Officer:
    (1) Determines in writing that access is consistent with the 
interest of national security;
    (2) Takes appropriate steps to protect classified information from 
unauthorized disclosure or compromise, and ensures that the information 
is safeguarded in a manner consistent with the order; and
    (3) Limits the access granted to former Presidential appointees to 
items that the person originated, reviewed, signed, or received while 
serving as a Presidential appointee.
    (b) In the instances described in paragraph (a) of this section, the 
Associate Director (or Assistant Director) for Administration, in 
cooperation with the EOP Security Officer, will make a determination as 
to the trustworthiness of the requestor and will obtain written 
agreement from the requestor to safeguard the information to which 
access is given. He/She will also obtain written consent to the review 
by OMB of notes and manuscripts for the purpose of determining that no 
classified information is contained therein. Upon the completion of 
these steps, the material to be researched will be reviewed

[[Page 131]]

by the division/office of primary interest to ensure that access is 
granted only to material over which OMB has classification jurisdiction.



Sec. 1312.25  Storage.

    All classified material in the possession of OMB will be stored in a 
GSA-approved container or in vault-type rooms approved for Top Secret 
storage. Under the direction of the EOP Security Officer, combinations 
to safes used in the storage of classified material will be changed when 
the equipment is placed in use, whenever a person knowing the 
combination no longer requires access to it, whenever the combination 
has been subjected to possible compromise, whenever the equipment is 
taken out of service, or at least once a year. Knowledge of combinations 
will be limited to the minimum number of persons necessary, and records 
of combinations will be assigned a classification no lower than the 
highest level of classified information stored in the equipment 
concerned. An SF-700, Security Container Information, will be used in 
recording safe combinations. Standard Form-702, Security Container check 
sheet, will be posted to each safe and will be used to record opening, 
closing, and checking the container whenever it is used.



Sec. 1312.26  Control of secret and confidential material.

    Classified material will be accounted for by the office having 
custody of the material. OMB Form 87, Classified Document Control, will 
be used to establish accountability controls on all Secret material 
received or produced within OMB offices. No accountability controls are 
prescribed for Confidential material, but offices desiring to control 
and account for such material should use the procedures applicable to 
Secret material. Information classified by another agency shall not be 
disclosed without that agency's authorization.
    (a) Accountability Control Clerks. Each division or office head will 
appoint one person as the Accountability Control Clerk (ACC). The ACC 
will be the focal point for the receipt, routing, accountability, 
dispatch, and declassification downgrading or destruction of all 
classified material in the possession of the office.
    (b) OMB Form 87. One copy of OMB Form 87 will be attached to the 
document, and one copy retained in the accountability control file for 
each active document within the area of responsibility of the ACC. 
Downgrading or destruction actions, or other actions removing the 
document from the responsibility of the ACC will be recorded on the OMB 
Form 87, and the form filed in an inactive file. Inactive control forms 
will be cut off annually, held for two additional years, then destroyed.
    (c) Working papers and drafts. Working papers and drafts of 
classified documents will be protected according to their security 
classification, but will not be subject to accountability control unless 
they are forwarded outside of OMB.
    (d) Typewriter ribbons. Typewriter ribbons, cassettes, and other 
devices used in the production of classified material will be removed 
from the machine after each use and protected as classified material not 
subject to controls. Destruction of such materials will be as prescribed 
in Sec. 1312.29.
    (e) Reproduction. Classified material will be reproduced only as 
required unless prohibited by the originator for the conduct of business 
and reproduced copies are subject to the same controls as are the 
original documents. Top Secret material will be reproduced only with the 
written permission of the originating agency.



Sec. 1312.27  Top secret control.

    The EOP Security Officer serves as the Top Secret Control Officer 
(TSCO) for OMB. He will be assisted by the Alternate TSCOs in each 
division/office Holding Top Secret material. The ATSCOs will be 
responsible for the accountability and custodianship of Top Secret 
material within their divisions/offices. The provisions of this section 
do not apply to special intelligence material, which will be processed 
as prescribed by the controlling agency.
    (a) Procedures. All Top Secret material produced or received in OMB 
will be taken to the appropriate ATSCO for receipting, establishment of 
custodianship, issuance to the appropriate action

[[Page 132]]

officer, and, as appropriate, obtaining a receipt. Top Secret material 
in the custody of the TSCO or ATSCO will normally be segregated from 
other classified material and will be stored in a safe under his or her 
control. Such material will be returned to the appropriate ATSCO by 
action officers as soon as action is completed. OMB Form 87 will be used 
to establish custody, record distribution, routing, receipting and 
destruction of Top Secret material. Top Secret Access Record and Cover 
Sheet (Standard Form 703) will be attached to each Top Secret document 
while it is in the possession of OMB.
    (b) Inventory. The Associate Director (or Assistant Director) for 
Administration will notify each appropriate OMB office to conduct an 
inventory of its Top Secret material by May 1 each year. The head of 
each office will notify the EOP Security Officer when the inventory has 
been satisfactorily completed. Each Top Secret item will be examined to 
determine whether it can be downgraded or declassified, and the 
inventory will be adjusted accordingly. Discrepancies in the inventory, 
indicating loss or possible compromise, will be thoroughly investigated 
by the EOP Security Officer or by the Federal Bureau of Investigation, 
as appropriate. Each ATSCO will retain his/her division's inventory in 
accordance with the security procedures set forth in this regulation.



Sec. 1312.28  Transmission of classified material.

    Prior to the transmission of classified material to offices outside 
OMB, such material will be enclosed in opaque inner and outer covers or 
envelopes. The inner cover will be sealed and marked with the 
classification, and the address of the sender and of the addressee. The 
receipt for the document, OMB Form 87, (not required for Confidential 
material) will be attached to or placed within the inner envelope to be 
signed by the recipient and returned to the sender. Receipts will 
identify the sender, the addressee, and the document, and will contain 
no classified information. The outer cover or envelope will be sealed 
and addressed with no identification of its contents.
    (a) Transmittal of Top Secret Material. The transmittal of Top 
Secret material shall be by personnel specifically designated by the EOP 
Security Officer, or by Department of State diplomatic pouch, by a 
messenger-courier system specifically created for that purpose. 
Alternatively, it shall be taken to the White House Situation Room for 
transmission over secure communications circuits.
    (b) Transmittal of Secret Material. The transmittal of Secret 
material shall be as follows:
    (1) Within and between the fifty States, the District of Columbia, 
and Puerto Rico: Use one of the authorized means for Top Secret 
material, or transmit by U.S. Postal Service express or registered mail.
    (2) Other Areas. Use the same means authorized for Top Secret, or 
transmit by U.S. registered mail through Military Postal Service 
facilities.
    (c) Transmittal of Confidential Material. As identified in 
paragraphs (a) and (b) of this section, or transmit by U.S. Postal 
Service Certified, first class, or express mail service within and 
between the fifty States, the District of Columbia, and Puerto Rico.
    (d) Transmittal between OMB offices and within the EOP complex. 
Classified material will normally be hand carried within and between 
offices in the Executive Office of the President complex by cleared OMB 
employees. Documents so carried must be protected by the appropriate 
cover sheet or outer envelope. Top Secret material will always be hand 
carried in this manner. Secret and Confidential material may be 
transmitted between offices in the EOP complex by preparing the material 
as indicated above (double envelope) and forwarding it by special 
messenger service provided by the messenger center. The messenger shall 
be advised that the material is classified. Receipts shall be obtained 
if Top Secret or Secret material is being transmitted outside of OMB. 
Classified material will never be transmitted in the Standard Messenger 
Envelope (SF Form 65), or by the Mail Stop system.

[[Page 133]]



Sec. 1312.29  Destruction.

    The destruction of classified material will be accomplished under 
the direction of the TSCO or the appropriate ATSCO, who will assure that 
proper accountability records are kept. Classified official record 
material will be processed to the Information Systems and Technology, 
Records Management Office, Office of Administration, NEOB Room 5208, in 
accordance with OMB Manual Section 540. Classified nonrecord material 
will be destroyed as soon as it becomes excess to the needs of the 
office. The following destruction methods are authorized:
    (a) Shredding. Using the equipment approved for that purpose within 
OMB offices. Shredders will not accommodate typewriter ribbons or 
cassettes. Shredding is the only authorized means of Destroying Top 
Secret material.
    (b) Burn Bag. Classified documents, cassettes, ribbons, and other 
materials at the Secret level or below, not suitable for shredding, may 
be destroyed by using burn bags, which can be obtained from the supply 
store. They will be disposed of as follows:
    (1) OEOB. Unless on an approved list for pick-up of burn bags, all 
other burn bags should be delivered to Room 096, OEOB between 8:00 a.m. 
and 4:30 p.m. Burn bags are not to be left in hallways.
    (2) NEOB. Hours for delivery of burn bag materials to the NEOB 
Loading Dock Shredder Room are Monday through Friday from 8:00 a.m. to 
9:30 a.m.; 10:00 a.m. to 11:00 a.m.; 11:45 a.m. to 1:30 p.m. and 2:00 
p.m. to 3:30 p.m. The phone number of the Shredder Room is 395-1593. In 
the event the Shredder Room is not manned, do not leave burn bags 
outside the Shredder Room as the security of that material may be 
compromised.
    (3) Responsibility for the security of the burn bag remains with the 
OMB office until it is handed over to the authorized representative at 
the shredder room. Accountability records will be adjusted after the 
burn bags have been delivered. Destruction actions will be recorded on 
OMB Form 87 by the division TSCO or by the appropriate ATSCO at the time 
the destruction is accomplished or at the time the burn bag is delivered 
to the U.D. Officer.
    (c) Technical Guidance. Technical guidance concerning appropriate 
methods, equipment, and standards for destruction of electronic 
classified media, processing equipment components and the like, may be 
obtained by submitting all pertinent information to NSA/CSS Directorate 
for Information Systems Security, Ft. Meade, Maryland 20755. 
Specifications concerning appropriate equipment and standards for 
destruction of other storage media may be obtained from the General 
Services Administration.



Sec. 1312.30  Loss or possible compromise.

    Any person who has knowledge of the loss or possible compromise of 
classified information shall immediately secure the material and then 
report the circumstances to the EOP Security Officer. The EOP Security 
Officer will immediately initiate an inquiry to determine the 
circumstances surrounding the loss or compromise for the purpose of 
taking corrective measures and/or instituting appropriate 
administrative, disciplinary, or legal action. The agency originating 
the information shall be notified of the loss or compromise so that the 
necessary damage assessment can be made.



Sec. 1312.31  Security violations.

    (a) A security violation notice is issued by the United States 
Secret Service when an office/division fails to properly secure 
classified information. Upon discovery of an alleged security violation, 
the USSS implements their standard procedures which include the 
following actions:
    (1) Preparation of a Record of Security Violation form;
    (2) When a document is left on a desk or other unsecured area, the 
officer will remove the classified document(s) and deliver to the 
Uniformed Division's Control Center; and
    (3) Where the alleged violation involves an open safe, the officer 
will remove one file bearing the highest classification level, annotate 
it with his or her name, badge number, date and time, and return the 
document to the

[[Page 134]]

safe, which will then be secured. A description of the document will be 
identified in the Record of Security Violations and a copy of the 
violation will be left in the safe.
    (b) Office of record. The EOP Security Office shall serve as the 
primary office of record for OMB security violations. Reports of 
violations will remain in the responsible individual's security file 
until one year after the individual departs the Executive Office of the 
President, at which time all violation reports will be destroyed.
    (c) Compliance. All Office of Management and Budget employees will 
comply with this section. Additionally, personnel on detail or temporary 
duty will comply with this section, however, their parent agencies will 
be provided with a copy of any security violation incurred during their 
period of service to OMB.
    (d) Responsibilities for processing security violations. (1) EOP 
Security Officer. The EOP Security Officer shall provide OMB with 
assistance regarding Agency security violations. Upon receipt of a 
Record of Security Violation alleging a security violation, the EOP 
Security Officer shall:
    (i) Prepare a memorandum to the immediate supervisor of the office/
division responsible for the violation requesting that an inquiry be 
made into the incident. Attached to the memorandum will be a copy of the 
Record of Security Violation form. The receiving office/division will 
prepare a written report within five working days of its receipt of the 
Security Officer's memorandum.
    (ii) Provide any assistance needed for the inquiry conducted by the 
office/division involved in the alleged violation.
    (iii) Upon receipt of the report of inquiry from the responsible 
office/division, the EOP Security Officer will:
    (A) Consult with the OMB Associate Director (or Assistant Director) 
for Administration and the General Counsel;
    (B) Determine if a damage assessment report is required. A damage 
assessment will be made by the agency originating the classified 
information, and will be prepared after it has been determined that the 
information was accessed without authorization; and
    (C) Forward the report with a recommendation to the OMB General 
Counsel.
    (2) Immediate supervisors. Upon receipt of the EOP Security 
Officer's security violation memorandum, the immediate supervisor will 
make an inquiry into the alleged incident, and send a written report of 
inquiry to the EOP Security Officer. The inquiry should determine, and 
the related report should identify, at a minimum:
    (i) Whether an actual security violation occurred;
    (ii) The identity of the person(s) responsible; and
    (iii) The probability of unauthorized access.
    (3) Deputy Associate Directors (or the equivalent) will:
    (i) Review and concur or comment on the written report; and
    (ii) In conjunction with the immediate supervisor, determine what 
action will be taken to prevent, within their area of responsibility, a 
recurrence of the circumstances giving rise to the violation.
    (e) Staff penalties for OMB security violations. When assessing 
penalties in accordance with this section, only those violations 
occurring within the calendar year (beginning January 1) will be 
considered. However, reports of all previous violations remain in the 
security files. These are the standard violation penalties that will be 
imposed. At the discretion of the Director or his designee, greater or 
lesser penalties may be imposed based upon the circumstances giving rise 
to the violation, the immediate supervisor's report of inquiry, and the 
investigation and findings of the EOP Security Officer and/or the OMB 
Associate Director (or Assistant Director) for Administration.
    (1) First violation:
    (i) Written notification of the violation will be filed in the 
responsible individual's security file; and
    (ii) The EOP Security Officer and/or the Associate Director (or 
Assistant Director) for Administration will consult with the respective 
immediate supervisor, and the responsible individual will be advised of 
the penalties that may be applied should a second violation occur.
    (2) Second violation:

[[Page 135]]

    (i) Written notification of the violation will be filed in the 
responsible individual's security file;
    (ii) The EOP Security Officer and/or the Associate Director (or 
Assistant Director) for Administration will consult with the respective 
Deputy Associate Director (or the equivalent) and immediate supervisor 
and the responsible individual who will be advised of the penalties that 
may be applied should a third violation occur; and
    (iii) A letter of Warning will be placed in the Disciplinary Action 
file maintained by the Office of Administration, Human Resources 
Management Division.
    (3) Third violation:
    (i) Written notification of the violation will be filed in the 
responsible individual's security file;
    (ii) The EOP Security Officer and/or the Associate Director (or 
Assistant Director) for Administration will consult with the OMB Deputy 
Director, General Counsel, the respective Deputy Associate Director (or 
equivalent), and the immediate supervisor and the responsible individual 
who will be advised of the penalties that may be applied should a fourth 
violation occur; and
    (iii) A Letter of Reprimand will be placed in the Disciplinary 
Action file maintained by the OA/HRMD.
    (4) Fourth violation:
    (i) Written notification of the violation will be filed in the 
responsible individual's security file;
    (ii) The EOP Security Officer and/or the Associate Director (or 
Assistant Director) for Administration will consult with the OMB 
Director, Deputy Director, General Counsel, the respective Deputy 
Associate Director (or the equivalent), and immediate supervisor;
    (iii) The responsible individual may receive a suspension without 
pay for a period not to exceed 14 days; and
    (iv) The responsible individual will be advised that future 
violations could result in the denial of access to classified material 
or other adverse actions as may be appropriate, including dismissal.



               Subpart C_Mandatory Declassification Review



Sec. 1312.32  Purpose and authority.

    Other government agencies, and individual members of the public, 
frequently request that classified information in OMB files be reviewed 
for possible declassification and release. This subpart prescribes the 
procedures for such review and subsequent release or denial. It is 
issued under the authority of Executive Order 12958 (60 FR 19825, 3 CFR, 
1995 Comp., p. 333), as implemented by Information Security Oversight 
Office Directive No. 1 (32 CFR part 2001).



Sec. 1312.33  Responsibility.

    All requests for the mandatory declassification review of classified 
information in OMB files should be addressed to the Associate Director 
(or Assistant Director) for Administration, who will acknowledge receipt 
of the request. When a request does not reasonably describe the 
information sought, the requester shall be notified that unless 
additional information is provided, or the scope of the request is 
narrowed, no further action will be taken. All requests will receive a 
response within 180 days of receipt of the request.



Sec. 1312.34  Information in the custody of OMB.

    Information contained in OMB files and under the exclusive 
declassification jurisdiction of the office will be reviewed by the 
office of primary interest to determine whether, under the 
declassification provisions of the Order, the requested information may 
be declassified. If so, the information will be made available to the 
requestor unless withholding is otherwise warranted under applicable 
law. If the information may not be released, in whole or in part, the 
requestor shall be given a brief statement as to the reasons for denial, 
a notice of the right to appeal the determination to the Deputy 
Director, OMB, and a notice that such an appeal must be filed within 60 
days in order to be considered.

[[Page 136]]



Sec. 1312.35  Information classified by another agency.

    When a request is received for information that was classified by 
another agency, the Associate Director (or Assistant Director) for 
Administration will forward the request, along with any other related 
materials, to the appropriate agency for review and determination as to 
release. Recommendations as to release or denial may be made if 
appropriate. The requester will be notified of the referral, unless the 
receiving agency objects on the grounds that its association with the 
information requires protection.



Sec. 1312.36  Appeal procedure.

    Appeals received as a result of a denial, see Sec. 1312.34, will be 
routed to the Deputy Director who will take action as necessary to 
determine whether any part of the information may be declassified. If 
so, he will notify the requester of his determination and make that 
information available that is declassified and otherwise releasable. If 
continued classification is required, the requestor shall be notified by 
the Deputy Director of the reasons thereafter. Determinations on appeals 
will normally be made within 60 working days following receipt. If 
additional time is needed, the requestor will be notified and this 
reason given for the extension. The agency's decision can be appealed to 
the Interagency Security Classification Appeals Panel.



Sec. 1312.37  Fees.

    There will normally be no fees charged for the mandatory review of 
classified material for declassification under this section.



PART 1315_PROMPT PAYMENT--Table of Contents




Sec.
1315.1 Application.
1315.2 Definitions.
1315.3 Responsibilities.
1315.4 Prompt payment standards and required notices to vendors.
1315.5 Accelerated payment methods.
1315.6 Payment without evidence that supplies have been received (fast 
          payment).
1315.7 Discounts.
1315.8 Rebates.
1315.9 Required documentation.
1315.10 Late payment interest penalties.
1315.11 Additional penalties.
1315.12 Payments to governmentwide commercial purchase card issuers.
1315.13 Commodity Credit Corporation payments.
1315.14 Payments under construction contracts.
1315.15 Grant recipients.
1315.16 Relationship to other laws.
1315.17 Formulas.
1315.18 Inquiries.
1315.19 Regulatory references to OMB Circular A-125.
1315.20 Application of Section 1010 of the National Defense 
          Authorization Act for Fiscal Year 2001.

    Authority: 31 U.S.C. chapter 39; Section 1010 of Public Law 106-398, 
114 Stat. 1654; Section 1007 of Public Law 107-107, 115 Stat. 1012.

    Source: 64 FR 52586, Sept. 29, 1999, unless otherwise noted.



Sec. 1315.1  Application.

    (a) Procurement contracts. This part applies to contracts for the 
procurement of goods or services awarded by:
    (1) All Executive branch agencies except:
    (i) The Tennessee Valley Authority, which is subject to the Prompt 
Payment Act (31 U.S.C. chapter 39), but is not covered by this part; and
    (ii) Agencies specifically exempted under 5 U.S.C. 551(1); and
    (2) The United States Postal Service. The Postmaster General is 
responsible for issuing implementing procurement regulations, 
solicitation provisions, and contract clauses for the United States 
Postal Service.
    (b) Vendor payments. All Executive branch vendor payments and 
payments to those defined as contractors or vendors (see Sec. 
1315.2(hh)) are subject to the Prompt Payment Act with the following 
exceptions:
    (1) Contract Financing Payments, as defined in Sec. 1315.2(h); and
    (2) Payments related to emergencies (as defined in the Disaster 
Relief Act of 1974, Public Law 93-288, as amended (42 U.S.C. 5121 et 
seq.)); military contingency operations (as defined in 10 U.S.C. 101 
(a)(13)); and the release or threatened release of hazardous substances 
(as defined in 4 U.S.C. 9606, Section 106).
    (c) Utility payments. All utility payments, including payments for 
telephone service, are subject to the Act except those under paragraph 
(b)(2) of

[[Page 137]]

this section. Where state, local or foreign authorities impose 
generally-applicable late payment rates for utility payments, those 
rates shall take precedence. In the absence of such rates, this part 
will apply.
    (d) Commodity Credit Corporation payments. Payments made pursuant to 
Section 4(h) of the Act of June 29, 1948 (15 U.S.C. 714b(h)) (``CCC 
Charter Act'') relating to the procurement of property and services, and 
payments to which producers on a farm are entitled under the terms of an 
agreement entered into under the Agricultural Act of 1949 (7 U.S.C. 1421 
et seq.) are subject to this part.



Sec. 1315.2  Definitions.

    (a) Accelerated payment means a payment made prior to the due date 
(see discussion in Sec. 1315.5).
    (b) Acceptance means an acknowledgment by an authorized Government 
official that goods received and services rendered conform with the 
contract requirements. Acceptance also applies to partial deliveries.
    (c) Agency includes, as defined in 5 U.S.C. 551(1), each authority 
of the United States Government, whether or not it is within or subject 
to review by another agency, excluding the Congress, the United States 
courts, governments of territories or possessions, the District of 
Columbia government, courts martial, military commissions, and military 
authority exercised in the field in time of war or in occupied 
territory. Agency also includes any entity that is operated exclusively 
as an instrumentality of such an agency for the purpose of administering 
one or more programs of that agency, and that is so identified for this 
purpose by the head of such agency. The term agency includes military 
post and base exchanges and commissaries.
    (d) Applicable interest rate means the interest rate established by 
the Secretary of the Treasury for interest payments under Section 12 of 
the Contract Disputes Act of 1978 (41 U.S.C. 611) which is in effect on 
the day after the due date, except where the interest penalty is 
prescribed by other governmental authority (e.g., utility tariffs). The 
rate established under the Contract Disputes Act is referred to as the 
``Renegotiation Board Interest Rate,'' the ``Contract Disputes Act 
Interest Rate,'' and the ``Prompt Payment Act Interest Rate,'' and is 
published semiannually by the Fiscal Service, Department of Treasury, in 
the Federal Register on or about January 1 and July 1.
    (e) Automated Clearing House (ACH) means a network that performs 
interbank clearing of electronic debit and credit entries for 
participating financial institutions.
    (f) Banking information means information necessary to facilitate an 
EFT payment, including the vendor's bank account number, and the vendor 
financial institution's routing number.
    (g) Contract means any enforceable agreement, including rental and 
lease agreements, purchase orders, delivery orders (including 
obligations under Federal Supply Schedule contracts), requirements-type 
(open-ended) service contracts, and blanket purchases agreements between 
an agency and a vendor for the acquisition of goods or services and 
agreements entered into under the Agricultural Act of 1949 (7 U.S.C. 
1421 et seq.). Contracts must meet the requirements of Sec. 1315.9(a).
    (h) Contract financing payments means an authorized disbursement of 
monies prior to acceptance of goods or services including advance 
payments, progress payments based on cost, progress payments (other than 
under construction contracts) based on a percentage or stage of 
completion, payments on performance-based contracts and interim payments 
on cost-type contracts (other than under cost-reimbursement contracts 
for the acquisition of services). Contract financing payments do not 
include invoice payments, payments for partial deliveries, or lease and 
rental payments. Contract financing payments also do not include 
progress payments under construction contracts based on a percentage or 
stage of completion and interim payments under cost-reimbursement 
service contracts. For purposes of this part, interim payments under a 
cost-reimbursement service contract are treated as invoice payments and 
subject to the requirements of this part, except as otherwise provided 
(see, e.g., Sec. Sec. 1315.4(d) and (e), and 1315.9(b)(1) and (c)).

[[Page 138]]

    (i) Contracting office means any entity issuing a contract or 
purchase order or issuing a contract modification or termination.
    (j) Contractor (see Vendor).
    (k) Day means a calendar day including weekend and holiday, unless 
otherwise indicated.
    (l) Delivery ticket means a vendor document supplied at the time of 
delivery which indicates the items delivered, can serve as a proper 
invoice based on contractual agreement.
    (m) Designated agency office means the office designated by the 
purchase order, agreement, or contract to first receive and review 
invoices. This office can be contractually designated as the receiving 
entity. This office may be different from the office issuing the 
payment.
    (n) Discount means an invoice payment reduction offered by the 
vendor for early payment.
    (o) Discount date means the date by which a specified invoice 
payment reduction, or a discount, can be taken.
    (p) Due date means the date on which Federal payment should be made. 
Determination of such dates is discussed in Sec. 1315.4(g).
    (q) Electronic commerce means the end to end electronic exchange of 
business information using electronic data interchange, electronic mail, 
electronic bulletin boards, electronic funds transfer (EFT) and similar 
technologies.
    (r) Electronic data interchange means the computer to computer 
exchange of routine business information in a standard format. The 
standard formats are developed and maintained by the Accredited 
Standards Committee of the American National Standards Institute, 11 
West 42d Street, New York, NY 10036.
    (s) Electronic Funds Transfer (EFT) means any transfer of funds, 
other than a transaction originated by cash, check, or similar paper 
instrument, that is initiated through an electronic terminal, telephone, 
computer, or magnetic tape, for the purpose of ordering, instructing, or 
authorizing a financial institution to debit or credit an account. The 
term includes, but is not limited to, Automated Clearing House and 
Fedwire transfers.
    (t) Emergency payment means a payment made under an emergency 
defined as a hurricane, tornado, storm, flood, high water, wind-driven 
water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, 
mud slide, snowstorm, drought, fire, explosion, or other catastrophe 
which requires Federal emergency assistance to supplement State and 
local efforts to save lives and property, and ensure public health and 
safety; and the release or threatened release of hazardous substances.
    (u) Evaluated receipts means contractually designated use of the 
acceptance document and the contract as the basis for payment without 
requiring a separate invoice.
    (v) Fast payment means a payment procedure under the Federal 
Acquisition Regulation at Part 13.4 which allows payment under limited 
conditions to a vendor prior to the Government's verification that 
supplies have been received and accepted.
    (w) Federal Acquisition Regulation (FAR) means the regulation (48 
CFR chapter 1) that governs most Federal acquisition and related payment 
issues. Agencies may also have supplements prescribing unique agency 
policies.
    (x) Governmentwide commercial purchase cards means internationally-
accepted purchase cards available to all Federal agencies under a 
General Services Administration contract for the purpose of making 
simplified acquisitions of up to the threshold set by the Federal 
Acquisition Regulation or for travel expenses or payment, for purchases 
of fuel, or other purposes as authorized by the contract.
    (y) Invoice means a bill, written document or electronic 
transmission, provided by a vendor requesting payment for property 
received or services rendered. A proper invoice must meet the 
requirements of Sec. 1315.9(b). The term invoice can include receiving 
reports and delivery tickets when contractually designated as invoices.
    (z) Payment date means the date on which a check for payment is 
dated or the date of an electronic fund transfer (EFT) payment 
(settlement date).
    (aa) Rebate means a monetary incentive offered to the Government by 
Governmentwide commercial purchase

[[Page 139]]

card issuers to pay purchase card invoices early.
    (bb) Receiving office means the entity which physically receives the 
goods or services, and may be separate from the accepting entity.
    (cc) Receiving report means written or electronic evidence of 
receipt of goods or services by a Government official. Receiving reports 
must meet the requirements of Sec. 1315.9(c).
    (dd) Recurring payments means payments for services of a recurring 
nature, such as rents, building maintenance, transportation services, 
parking, leases, and maintenance for equipment, pagers and cellular 
phones, etc., which are performed under agency-vendor agreements 
providing for payments of definite amounts at fixed periodic intervals.
    (ee) Settlement date means the date on which an EFT payment is 
credited to the vendor's financial institution.
    (ff) Taxpayer Identifying Number (TIN) means the nine digit Employer 
Identifying Number or Social Security Number as defined in Section 6109 
of the Internal Revenue Code of 1986 (26 U.S.C. 6109).
    (gg) Utilities and telephones means electricity, water, sewage 
services, telephone services, and natural gas. Utilities can be 
regulated, unregulated, or under contract.
    (hh) Vendor means any person, organization, or business concern 
engaged in a profession, trade, or business and any not-for-profit 
entity operating as a vendor (including State and local governments and 
foreign entities and foreign governments, but excluding Federal 
entities).

[64 FR 52586, Sept. 29, 1999, as amended at 65 FR 78404, Dec. 15, 2000]



Sec. 1315.3  Responsibilities.

    Each agency head is responsible for the following:
    (a) Issuing internal procedures. Ensuring that internal procedures 
will include provisions for monitoring the causes of late payments and 
any interest penalties incurred, taking necessary corrective action, and 
handling inquiries.
    (b) Internal control systems. Ensuring that effective internal 
control systems are established and maintained as required by OMB 
Circular A-123, ``Management Accountability and Control.'' \1\ 
Administrative activities required for payments to vendors under this 
part are subject to periodic quality control validation to be conducted 
no less frequently than once annually. Quality control processes will be 
used to confirm that controls are effective and that processes are 
efficient. Each agency head is responsible for establishing a quality 
control program in order to quantify payment performance and qualify 
corrective actions, aid cash management decision making, and estimate 
payment performance if actual data is unavailable.
---------------------------------------------------------------------------

    \1\ For availability of OMB circulars, see 5 CFR 1310.3.
---------------------------------------------------------------------------

    (c) Financial management systems. Ensuring that financial management 
systems comply with OMB Circular A-127, ``Financial Management 
Systems.'' \2\ Agency financial systems shall provide standardized 
information and electronic data exchange to the central management 
agency. Systems shall provide complete, timely, reliable, useful and 
consistent financial management information. Payment capabilities should 
provide accurate and useful management reports on payments.
---------------------------------------------------------------------------

    \2\ See footnote 1 in Sec. 1315.3(b).
---------------------------------------------------------------------------

    (d) Reviews. Ensuring that Inspectors General and internal auditors 
review payments performance and systems accuracy, consistent with the 
Chief Financial Officers (CFO) Act requirements.
    (e) Timely payments and interest penalties. Ensuring timely payments 
and payment of interest penalties where required.



Sec. 1315.4  Prompt payment standards and required notices to vendors.

    Agency business practices shall conform to the following standards:
    (a) Required documentation. Agencies will maintain paper or 
electronic documentation as required in Sec. 1315.9.
    (b) Receipt of invoice. For the purposes of determining a payment 
due date and the date on which interest will begin to accrue if a 
payment is late, an invoice shall be deemed to be received:
    (1) On the later of:

[[Page 140]]

    (i) For invoices that are mailed, the date a proper invoice is 
actually received by the designated agency office if the agency 
annotates the invoice with date of receipt at the time of receipt. For 
invoices electronically transmitted, the date a readable transmission is 
received by the designated agency office, or the next business day if 
received after normal working hours; or
    (ii) The seventh day after the date on which the property is 
actually delivered or performance of the services is actually completed; 
unless--
    (A) The agency has actually accepted the property or services before 
the seventh day in which case the acceptance date shall substitute for 
the seventh day after the delivery date; or
    (B) A longer acceptance period is specified in the contract, in 
which case the date of actual acceptance or the date on which such 
longer acceptance period ends shall substitute for the seventh day after 
the delivery date;
    (2) On the date placed on the invoice by the contractor, when the 
agency fails to annotate the invoice with date of receipt of the invoice 
at the time of receipt (such invoice must be a proper invoice); or
    (3) On the date of delivery, when the contract specifies that the 
delivery ticket may serve as an invoice.
    (c) Review of invoice. Agencies will use the following procedures in 
reviewing invoices:
    (1) Each invoice will be reviewed by the designated agency office as 
soon as practicable after receipt to determine whether the invoice is a 
proper invoice as defined in Sec. 1315.9(b);
    (2) When an invoice is determined to be improper, the agency shall 
return the invoice to the vendor as soon as practicable after receipt, 
but no later than 7 days after receipt (refer also to paragraph (g)(4) 
of this section regarding vendor notification and determining the 
payment due date.) The agency will identify all defects that prevent 
payment and specify all reasons why the invoice is not proper and why it 
is being returned. This notification to the vendor shall include a 
request for a corrected invoice, to be clearly marked as such;
    (3) Any media which produce tangible recordings of information in 
lieu of ``written'' or ``original'' paper document equivalents should be 
used by agencies to expedite the payment process, rather than delaying 
the process by requiring ``original'' paper documents. Agencies should 
ensure adequate safeguards and controls to ensure the integrity of the 
data and to prevent duplicate processing.
    (d) Receipt of goods and services. Agencies will ensure that receipt 
is properly recorded at the time of delivery of goods or completion of 
services. This requirement does not apply to interim payments on cost-
reimbursement service contracts except as otherwise required by agency 
regulations.
    (e) Acceptance. Agencies will ensure that acceptance is executed as 
promptly as possible. Commercial items and services should not be 
subject to extended acceptance periods. Acceptance reports will be 
forwarded to the designated agency office by the fifth working day after 
acceptance. Unless other arrangements are made, acceptance reports will 
be stamped or otherwise annotated with the receipt date in the 
designated agency office. This requirement does not apply to interim 
payments on cost-reimbursement service contracts except as otherwise 
required by agency regulations.
    (f) Starting the payment period. The period available to an agency 
to make timely payment of an invoice without incurring an interest 
penalty shall begin on the date of receipt of a proper invoice (see 
paragraph (b) of this section) except where no invoice is required 
(e.g., for some recurring payments as defined in Sec. 1315.2(dd)).
    (g) Determining the payment due date. (1) Except as provided in 
paragraphs (g)(2) through (5) of this section, the payment is due 
either:
    (i) On the date(s) specified in the contract;
    (ii) In accordance with discount terms when discounts are offered 
and taken (see Sec. 1315.7);
    (iii) In accordance with Accelerated Payment Methods (see Sec. 
1315.5); or
    (iv) 30 days after the start of the payment period as specified in 
paragraph (f) of this section, if not specified in the contract, if 
discounts are not

[[Page 141]]

taken, and if accelerated payment methods are not used.
    (2) Interim payments under cost-reimbursement contracts for 
services. The payment due date for interim payments under cost-
reimbursement service contracts shall be 30 days after the date of 
receipt of a proper invoice.
    (3) Certain commodity payments. (i) For meat, meat food products, as 
defined in Section 2(a)(3) of the Packers and Stockyard Act of 1921 (7 
U.S.C. 182(3)), including any edible fresh or frozen poultry meat, any 
perishable poultry meat food product, fresh eggs, any perishable egg 
product, fresh or frozen fish as defined in the Fish and Seafood 
Promotion Act of 1986 (16 U.S.C. 4003(3)), payment will be made no later 
than the seventh day after delivery.
    (ii) For perishable agricultural commodities, as defined in Section 
1(4) of the Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 
499 a(4)), payment will be made no later than the 10th day after 
delivery, unless another payment date is specified in the contract.
    (iii) For dairy products (as defined in Section 111(e) of the Dairy 
Production Stabilization Act of 1983, 7 U.S.C. 4502(e)), and including, 
at a minimum, liquid milk, cheese, certain processed cheese products, 
butter, yogurt, and ice cream, edible fats or oils, and food products 
prepared from edible fats or oils (including, at a minimum, mayonnaise, 
salad dressings and other similar products), payment will be made no 
later than 10 days after the date on which a proper invoice, for the 
amount due, has been received by the agency acquiring the above listed 
products. Nothing in the Act permits limitation to refrigerated 
products. When questions arise about the coverage of a specific product, 
prevailing industry practices should be followed in specifying a 
contractual payment due date.
    (4) Mixed invoices for commodities. When an invoice is received for 
items with different payment periods, agencies:
    (i) May pay the entire invoice on the due date for the commodity 
with the earliest due date, if it is considered in the best interests of 
the agency;
    (ii) May make split payments by the due date applicable to each 
category;
    (iii) Shall pay in accordance with the contractual payment 
provisions (which may not exceed the statutory mandated periods 
specified in paragraph (g)(2) of this section); and
    (iv) Shall not require vendors to submit multiple invoices for 
payment of individual orders by the agency.
    (5) Notification of improper invoice. When an agency fails to make 
notification of an improper invoice within seven days according to 
paragraph (c)(2) of this section (three days for meat and meat food, 
fish and seafood products; and five days for perishable agricultural 
commodities, dairy products, edible fats or oils and food products 
prepared from edible fats or oils), the number of days allowed for 
payment of the corrected proper invoice will be reduced by the number of 
days between the seventh day (or the third or fifth day, as otherwise 
specified in this paragraph (g)(4)) and the day notification was 
transmitted to the vendor. Calculation of interest penalties, if any, 
will be based on an adjusted due date reflecting the reduced number of 
days allowable for payment;
    (h) Payment date. Payment will be considered to be made on the 
settlement date for an electronic funds transfer (EFT) payment or the 
date of the check for a check payment. Payments falling due on a weekend 
or federal holiday may be made on the following business day without 
incurring late payment interest penalties.
    (i) Late payment. When payments are made after the due date, 
interest will be paid automatically in accordance with the procedures 
provided in this part.
    (j) Timely payment. An agency shall make payments no more than seven 
days prior to the payment due date, but as close to the due date as 
possible, unless the agency head or designee has determined, on a case-
by-case basis for specific payments, that earlier payment is necessary. 
This authority must be used cautiously, weighing the benefits of making 
a payment early against the good stewardship inherent in effective cash 
management practices. An agency may use the ``accelerated payment 
methods'' in Sec. 1315.5 when it determines that such earlier payment 
is necessary.

[[Page 142]]

    (k) Payments for partial deliveries. Agencies shall pay for partial 
delivery of supplies or partial performance of services after 
acceptance, unless specifically prohibited by the contract. Payment is 
contingent upon submission of a proper invoice if required by the 
contract.

[64 FR 52586, Sept. 29, 1999, as amended at 65 FR 78405, Dec. 15, 2000]



Sec. 1315.5  Accelerated payment methods.

    (a) A single invoice under $2,500. Payments may be made as soon as 
the contract, proper invoice , receipt and acceptance documents are 
matched except where statutory authority prescribes otherwise and except 
where otherwise contractually stipulated (e.g., governmentwide 
commercial purchase card.) Vendors shall be entitled to interest 
penalties if invoice payments are made after the payment due date.
    (b) Small business (as defined in FAR 19.001 (48 CFR 19.001)). 
Agencies may pay a small business as quickly as possible, when all 
proper documentation, including acceptance, is received in the payment 
office and before the payment due date. Such payments are not subject to 
payment restrictions stated elsewhere in this part. Vendors shall be 
entitled to interest penalties if invoice payments are made after the 
payment due date.
    (c) Emergency payments. Payments related to emergencies and 
disasters (as defined in the Robert T. Stafford Disaster Relief Act and 
Emergency Assistance, Pub. L. 93-288, as amended (42 U.S.C. 5 121 et 
seq.); payments related to the release or threatened release of 
hazardous substances (as defined in the Comprehensive Environmental 
Response Compensation and Liability Act of 1980, Pub. L. 96-510, 42 
U.S.C. 9606); and payments made under a military contingency (as defined 
in 10 U.S.C. 101(a)(13)) may be made as soon as the contract, proper 
invoice, receipt and acceptance documents or any other agreement are 
matched. Vendors shall be entitled to interest penalties if invoice 
payments are made after the payment due date.
    (d) Interim payments under cost-reimbursement contracts for 
services. For interim payments under cost-reimbursement service 
contracts, agency heads may make payments earlier than seven days prior 
to the payment due date in accordance with agency regulations or 
policies.

[64 FR 52586, Sept. 29, 1999, as amended at 65 FR 78405, Dec. 15, 2000]



Sec. 1315.6  Payment without evidence that supplies have been received (fast payment).

    (a) In limited situations, payment may be made without evidence that 
supplies have been received. Instead, a contractor certification that 
supplies have been shipped may be used as the basis for authorizing 
payment. Payment may be made within 15 days after the date of receipt of 
the invoice. This payment procedure may be employed only when all of the 
following conditions are present:
    (1) Individual orders do not exceed $25,000 (except where agency 
heads permits a higher amount on a case-by-case basis);
    (2) Deliveries of supplies are to occur where there is both a 
geographical separation and a lack of adequate communications facilities 
between Government receiving and disbursing activities that make it 
impracticable to make timely payments based on evidence of Federal 
acceptance;
    (3) Title to supplies will vest in the Government upon delivery to a 
post office or common carrier for mailing or shipment to destination or 
upon receipt by the Government if the shipment is by means other than 
the Postal Service or a common carrier; and
    (4) The contractor agrees to replace, repair, or correct supplies 
not received at destination, damaged in transit, or not conforming to 
purchase requirements.
    (b) Agencies shall promptly inspect and accept supplies acquired 
under these procedures and shall ensure that receiving reports and 
payment documents are matched and steps are taken to correct 
discrepancies.
    (c) Agencies shall ensure that specific internal controls are in 
place to assure that supplies paid for are received.
    (d) As authorized by the 1988 Amendment to the Prompt Payment Act 
(Section 11(b)(1)(C)), a contract clause at 48

[[Page 143]]

CFR 52.213-1 is provided in the Federal Acquisition Regulations (FAR) at 
48 CFR part 13, subpart 13.4 ``Fast Payment Procedure,'' for use when 
using this fast payment procedure.



Sec. 1315.7  Discounts.

    Agencies shall follow these procedures in taking discounts and 
determining the payment due dates when discounts are taken:
    (a) Economically justified discounts. If an agency is offered a 
discount by a vendor, whether stipulated in the contract or offered on 
an invoice, an agency may take the discount if economically justified 
(see discount formula in Treasury Financial Manual (TFM) 6-8040.40) \3\ 
but only after acceptance has occurred. Agencies are encouraged to 
include discount terms in a contract to give agencies adequate time to 
take the discount if it is determined to be economically justified.
---------------------------------------------------------------------------

    \3\ The Treasury Financial Manual is available by calling the Prompt 
Payment Hotline at 800-266-9667 or the Prompt Payment web site at http:/
/www.fms.treas.gov/prompt/index.html.
---------------------------------------------------------------------------

    (b) Discounts taken after the discount date. If an agency takes the 
discount after the deadline, the agency shall pay an interest penalty on 
any amount remaining unpaid as prescribed in Sec. 1315.10(a)(6).
    (c) Payment date. When a discount is taken, payment will be made as 
close as possible to, but no later than, the discount date.
    (d) Start date. The period for taking the discount is calculated 
from the date placed on the proper invoice by the vendor. If there is no 
invoice date on the invoice by the vendor, the discount period will 
begin on the date a proper invoice is actually received and date stamped 
or otherwise annotated by the designated agency office.



Sec. 1315.8  Rebates.

    Agencies shall determine governmentwide commercial purchase card 
payment dates based on an analysis of the total costs and total benefits 
to the Federal government as a whole, unless specified in a contract. 
When calculating costs and benefits, agencies are expected to include 
the cost to the government of paying early. This cost is the interest 
the government would have earned, at the Current Value of Funds rate, 
for each day that payment was not made. Agencies may factor in benefits 
gained from paying early due to, for example, streamlining the payment 
process or other efficiencies. A rebate formula is provided in Sec. 
1315.17 and at the Prompt Payment website at www.fms.treas.gov/prompt/
index.html.



Sec. 1315.9  Required documentation.

    Agencies are required to ensure the following payment documentation 
is established to support payment of invoices and interest penalties:
    (a) The following information from the contract is required as 
payment documentation:
    (1) Payment due date(s) as defined in Sec. 1315.4(g);
    (2) A notation in the contract that partial payments are prohibited, 
if applicable;
    (3) For construction contracts, specific payment due dates for 
approved progress payments or milestone payments for completed phases, 
increments, or segments of the project;
    (4) If applicable, a statement that the special payment provisions 
of the Packers and Stockyard Act of 1921 (7 U.S.C. 182(3)), or the 
Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 499a(4)), or 
Fish and Seafood Promotion Act of 1986 (16 U.S.C. 4003(3)) shall apply;
    (5) Where considered appropriate by the agency head, the specified 
acceptance period following delivery to inspect and/or test goods 
furnished or to evaluate services performed is stated;
    (6) Name (where practicable), title, telephone number, and complete 
mailing address of officials of the Government's designated agency 
office, and of the vendor receiving the payments;
    (7) Reference to requirements under the Prompt Payment Act, 
including the payment of interest penalties on late invoice payments 
(including progress payments under construction contracts);
    (8) Reference to requirements under the Debt Collection Improvement 
Act (Pub. L. 104-134, 110 Stat. 1321), including the requirement that 
payments must be made electronically except in

[[Page 144]]

situations where the EFT requirement is waived under 31 CFR 208.4. Where 
electronic payment is required, the contract will stipulate that banking 
information must be submitted no later than the first request for 
payment;
    (9) If using Fast Payment, the proper FAR clause stipulating Fast 
Payment is required.
    (b)(1) Except for interim payment requests under cost-reimbursement 
service contracts, which are covered by paragraph (b)(2) of this 
section, the following correct information constitutes a proper invoice 
and is required as payment documentation:
    (i) Name of vendor;
    (ii) Invoice date;
    (iii) Government contract number, or other authorization for 
delivery of goods or services;
    (iv) Vendor invoice number, account number, and/or any other 
identifying number agreed to by contract;
    (v) Description (including, for example, contract line/subline 
number), price, and quantity of goods and services rendered;
    (vi) Shipping and payment terms (unless mutually agreed that this 
information is only required in the contract);
    (vii) Taxpayer Identifying Number (TIN), unless agency procedures 
provide otherwise;
    (viii) Banking information, unless agency procedures provide 
otherwise, or except in situations where the EFT requirement is waived 
under 31 CFR 208.4;
    (ix) Contact name (where practicable), title and telephone number;
    (x) Other substantiating documentation or information required by 
the contract.
    (2) An interim payment request under a cost-reimbursement service 
contract constitutes a proper invoice for purposes of this part if it 
correctly includes all the information required by the contract or by 
agency procedures.
    (c) Except for interim payment requests under cost-reimbursement 
service contracts, the following information from receiving reports, 
delivery tickets, and evaluated receipts is required as payment 
documentation:
    (1) Name of vendor;
    (2) Contract or other authorization number;
    (3) Description of goods or services;
    (4) Quantities received, if applicable;
    (5) Date(s) goods were delivered or services were provided;
    (6) Date(s) goods or services were accepted;
    (7) Signature (or electronic alternative when supported by 
appropriate internal controls), printed name, telephone number, mailing 
address of the receiving official, and any additional information 
required by the agency.
    (d) When a delivery ticket is used as an invoice, it must contain 
information required by agency procedures. The requirements in paragraph 
(b) of this section do not apply except as provided by agency 
procedures.

[64 FR 52586, Sept. 29, 1999, as amended at 65 FR 78405, Dec. 15, 2000]



Sec. 1315.10  Late payment interest penalties.

    (a) Application and calculation. Agencies will use the following 
procedures in calculating interest due on late payments:
    (1) Interest will be calculated from the day after the payment due 
date through the payment date at the interest rate in effect on the day 
after the payment due date;
    (2) Adjustments will be made for errors in calculating interest;
    (3) For up to one year, interest penalties remaining unpaid at the 
end of any 30 day period will be added to the principal and subsequent 
interest penalties will accrue on that amount until paid;
    (4) When an interest penalty is owed and not paid, interest will 
accrue on the unpaid amount until paid, except as described in paragraph 
(a)(5) of this section;
    (5) Interest penalties under the Prompt Payment Act will not 
continue to accrue:
    (i) After the filing of a claim for such penalties under the 
Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.); or
    (ii) For more than one year;
    (6) When an agency takes a discount after the discount date, 
interest will be paid on the amount of the discount taken. Interest will 
be calculated for the period beginning the day after the

[[Page 145]]

specified discount date through the date of payment of the discount 
erroneously taken;
    (7) Interest penalties of less than one dollar need not be paid;
    (8) If the banking information supplied by the vendor is incorrect, 
interest under this regulation will not accrue until seven days after 
such correct information is received (provided that the vendor has been 
given notice of the incorrect banking information within seven days 
after the agency is notified that the information is incorrect);
    (9) Interest calculations are to be based on a 360 day year; and
    (10) The applicable interest rate may be obtained by calling the 
Department of Treasury's Financial Management Service (FMS) Prompt 
Payment help line at 1-800-266-9667.
    (b) Payment. Agencies will meet the following requirements in paying 
interest penalties:
    (1) Interest may be paid only after acceptance has occurred; when 
title passes to the government in a fast payment contract when title 
passing to the government constitutes acceptance for purposes of 
determining when interest may be paid; or when the payment is an interim 
payment under a cost-reimbursement service contract;
    (2) Late payment interest penalties shall be paid without regard to 
whether the vendor has requested payment of such penalty, and shall be 
accompanied by a notice stating the amount of the interest penalty, the 
number of days late and the rate used;
    (3) The invoice number or other agreed upon transaction reference 
number assigned by the vendor should be included in the notice to assist 
the vendor in reconciling the payment. Additionally, it is optional as 
to whether or not an agency includes the contract number in the notice 
to the vendor;
    (4) The temporary unavailability of funds does not relieve an agency 
from the obligation to pay these interest penalties or the additional 
penalties required under Sec. 1315.11; and
    (5) Agencies shall pay any late payment interest penalties 
(including any additional penalties required under Sec. 1315.11) under 
this part from the funds available for the administration of the program 
for which the penalty was incurred. The Prompt Payment Act does not 
authorize the appropriation of additional amounts to pay penalties.
    (c) Penalties not due. Interest penalties are not required:
    (1) When payment is delayed because of a dispute between a Federal 
agency and a vendor over the amount of the payment or other issues 
concerning compliance with the terms of a contract. Claims concerning 
disputes, and any interest that may be payable with respect to the 
period, while the dispute is being settled, will be resolved in 
accordance with the provisions in the Contract Disputes Act of 1978, (41 
U.S.C. 601 et seq.), except for interest payments required under 31 
U.S.C. 3902(h)(2);
    (2) When payments are made solely for financing purposes or in 
advance, except for interest payment required under 31 U.S.C. 
3902(h)(2);
    (3) For a period when amounts are withheld temporarily in accordance 
with the contract;
    (4) When an EFT payment is not credited to the vendor's account by 
the payment due date because of the failure of the Federal Reserve or 
the vendor's bank to do so; or
    (5) When the interest penalty is less than $1.00.

[64 FR 52586, Sept. 29, 1999, as amended at 65 FR 78405, Dec. 15, 2000]



Sec. 1315.11  Additional penalties.

    (a) Vendor entitlements. A vendor shall be entitled to an additional 
penalty payment when the vendor is owed a late payment interest penalty 
by an agency of $1.00 or more, if it:
    (1) Receives a payment dated after the payment due date which does 
not include the interest penalty also due to the vendor;
    (2) Is not paid the interest penalty by the agency within 10 days 
after the actual payment date; and
    (3) Makes a written request that the agency pay such an additional 
penalty. Such request must be postmarked, received by facsimile, or by 
electronic mail, by the 40th day after payment was made. If there is no 
postmark or if it is illegible, the request will be valid if it is 
received and annotated with the date of receipt by the agency by the

[[Page 146]]

40th day. The written request must include the following:
    (i) Specific assertion that late payment interest is due for a 
specific invoice, and request payment of all overdue late payment 
interest penalty and such additional penalty as may be required; and
    (ii) A copy of the invoice on which late payment interest was due 
but not paid and a statement that the principal has been received, and 
the date of receipt of the principle.
    (b) Maximum penalty. The additional penalty shall be equal to one 
hundred (100) percent of the original late payment interest penalty but 
must not exceed $5,000.
    (c) Minimum penalty. Regardless of the amount of the late payment 
interest penalty, the additional penalty paid shall not be less than 
$25. No additional penalty is owed, however, if the amount of the 
interest penalty is less than $1.00.
    (d) Penalty basis. The penalty is based on individual invoices. 
Where payments are consolidated for disbursing purposes, the penalty 
determinations shall be made separately for each invoice therein.
    (e) Utility payments. The additional penalty does not apply to the 
payment of utility bills where late payment penalties for these bills 
are determined through the tariff rate-setting process.



Sec. 1315.12  Payments to governmentwide commercial purchase card issuers.

    Standards for payments to government wide commercial purchase card 
issuers follow:
    (a) Payment date. All individual purchase card invoices under $2,500 
may be paid at any time, but not later than 30 days after the receipt of 
a proper invoice. Matching documents is not required before payment. The 
payment due date for invoices in the amount of $2,500 or more shall be 
determined in accordance with Sec. 1315.8. I TFM 4-4535.10 \4\ permits 
payment of the bill in full prior to verification that goods or services 
were received.
---------------------------------------------------------------------------

    \4\ See footnote 3 in Sec. 1315.7(a).
---------------------------------------------------------------------------

    (b) Disputed line items. Disputed line items do not render the 
entire invoice an improper invoice for compliance with this proposed 
regulation. Any undisputed items must be paid in accordance with 
paragraph (a) of this section.



Sec. 1315.13  Commodity Credit Corporation payments.

    As provided in Sec. 1315.1(d), the provisions of this part apply to 
payments relating to the procurement of property and services made by 
the Commodity Credit Corporation (CCC) pursuant to Section 4(h) of the 
Act of June 29, 1948 (15 U.S.C. 714b(h)) (``CCC Charter Act'') and 
payments to which producers on a farm are entitled under the terms of an 
agreement entered into pursuant to the Agricultural Act of 1949 (7 
U.S.C. 1421 et seq.) (``1949 Act''.) Such payments shall be subject to 
the following provisions:
    (a) Payment standards. Payments to producers on a farm under 
agreements entered into under the 1949 Act and payments to vendors 
providing property and services under the CCC Charter Act, shall be made 
as close as possible to the required payment date or loan closing date.
    (b) Interest penalties. An interest penalty shall be paid to vendors 
or producers if the payment has not been made by the required payment or 
loan closing date. The interest penalty shall be paid:
    (1) On the amount of payment or loan due;
    (2) For the period beginning on the first day beginning after the 
required payment or loan closing date and, except as determined 
appropriate by the CCC consistent with applicable law, ending on the 
date the amount is paid or loaned; and
    (3) Out of funds available under Section 8 of the CCC Charter Act 
(15 U.S.C. 714f).
    (c) Contract Disputes Act of 1978. Insofar as covered CCC payments 
are concerned, provisions relating to the Contract Disputes Act of 1978 
(41 U.S.C. 601 et seq.) in Sec. 1315.10(a)(5)(i) and Sec. 1315.6(a) do 
not apply.
    (d) Extended periods for payment. Notwithstanding other provisions 
of this part, the CCC may allow claims for such periods of time as are 
consistent with authorities applicable to its operations.

[[Page 147]]



Sec. 1315.14  Payments under construction contracts.

    (a) Payment standards. Agencies shall follow these standards when 
making progress payments under construction contracts:
    (1) An agency may approve a request for progress payment if the 
application meets the requirements specified in paragraph (b) of this 
section;
    (2) The certification by the prime vendor as defined in paragraph 
(b)(2) of this section is not to be construed as final acceptance of the 
subcontractor's performance;
    (3) The agency shall return any such payment request which is 
defective to the vendor within seven days after receipt, with a 
statement identifying the defect(s);
    (4) A vendor is obligated to pay interest to the Government on 
unearned amounts in its possession from:
    (i) The eighth day after receipt of funds from the agency until the 
date the vendor notifies the agency that the performance deficiency has 
been corrected, or the date the vendor reduces the amount of any 
subsequent payment request by an amount equal to the unearned amount in 
its possession, when the vendor discovers that all or a portion of a 
payment received from the agency constitutes a payment for the vendor's 
performance that fails to conform to the specifications, terms, and 
conditions of its contract with the agency, under 31 U.S.C. 3905(a); or
    (ii) The eighth day after the receipt of funds from the agency until 
the date the performance deficiency of a subcontractor is corrected, or 
the date the vendor reduces the amount of any subsequent payment request 
by an amount equal to the unearned amount in its possession, when the 
vendor discovers that all or a portion of a payment received from the 
agency would constitute a payment for the subcontractor's performance 
that fails to conform to the subcontract agreement and may be withheld, 
under 31 U.S.C. 3905(e);
    (5) Interest payment on unearned amounts to the government under 31 
U.S.C. 3905(a)(2) or 3905(e)(6), shall:
    (i) Be computed on the basis of the average bond equivalent rates of 
91-day Treasury bills auctioned at the most recent auction of such bills 
prior to the date the vendor received the unearned amount;
    (ii) Be deducted from the next available payment to the vendor; and
    (iii) Revert to the Treasury.
    (b) Required documentation. (1) Substantiation of the amount(s) 
requested shall include:
    (i) An itemization of the amounts requested related to the various 
elements of work specified in the contract;
    (ii) A listing of the amount included for work performed by each 
subcontractor under the contract;
    (iii) A listing of the total amount for each subcontract under the 
contract;
    (iv) A listing of the amounts previously paid to each subcontractor 
under the contract; and
    (v) Additional supporting data and detail in a form required by the 
contracting officer.
    (2) Certification by the prime vendor is required, to the best of 
the vendor's knowledge and belief, that:
    (i) The amounts requested are only for performance in accordance 
with the specifications, terms, and conditions of the contract;
    (ii) Payments to subcontractors and suppliers have been made from 
previous payments received under the contract, and timely payments will 
be made from the proceeds of the payment covered by the certification, 
in accordance with their subcontract agreements and the requirements of 
31 U.S.C. chapter 39; and
    (iii) The application does not include any amounts which the prime 
vendor intends to withhold or retain from a subcontractor or supplier, 
in accordance with the terms and conditions of their subcontract.
    (c) Interest penalties. (1) Agencies will pay interest on:
    (i) A progress payment request (including a monthly percentage-of-
completion progress payment or milestone payments for completed phases, 
increments, or segments of any project) that is approved as payable by 
the agency pursuant to paragraph (b) of this section, and remains unpaid 
for:
    (A) A period of more than 14 days after receipt of the payment 
request by the designated agency office; or
    (B) A longer period specified in the solicitation and/or contract if 
required,

[[Page 148]]

to afford the Government a practicable opportunity to adequately inspect 
the work and to determine the adequacy of the vendor's performance under 
the contract;
    (ii) Any amounts that the agency has retained pursuant to a prime 
contract clause providing for retaining a percentage of progress 
payments otherwise due to a vendor and that are approved for release to 
the vendor, if such retained amounts are not paid to the vendor by a 
date specified in the contract, or, in the absence of such a specified 
date, by the 30th day after final acceptance;
    (iii) Final payments, based on completion and acceptance of all work 
(including any retained amounts), and payments for partial performances 
that have been accepted by the agency, if such payments are made after 
the later of:
    (A) The 30th day after the date on which the designated agency 
office receives a proper invoice; or
    (B) The 30th day after agency acceptance of the completed work or 
services. Acceptance shall be deemed to have occurred on the effective 
date of contract settlement on a final invoice where the payment amount 
is subject to contract settlement actions.
    (2) For the purpose of computing interest penalties, acceptance 
shall be deemed to have occurred on the seventh day after work or 
services have been completed in accordance with the terms of the 
contract.



Sec. 1315.15  Grant recipients.

    Recipients of Federal assistance may pay interest penalties if so 
specified in their contracts with contractors. However, obligations to 
pay such interest penalties will not be obligations of the United 
States. Federal funds may not be used for this purpose, nor may interest 
penalties be used to meet matching requirements of federally assisted 
programs.



Sec. 1315.16  Relationship to other laws.

    (a) Contract Disputes Act of 1978 (41 U.S.C. 605). (1) A claim for 
an interest penalty (including the additional penalty for non-payment of 
interest if the vendor has complied with the requirements of Sec. 
1315.9) not paid under this part may be filed under Section 6 of the 
Contract Disputes Act.
    (2) An interest penalty under this part does not continue to accrue 
after a claim for a penalty is filed under the Contract Disputes Act or 
for more than one year. Once a claim is filed under the Contract 
Disputes Act interest penalties under this part will never accrue on the 
amounts of the claim, for any period after the date the claim was filed. 
This does not prevent an interest penalty from accruing under Section 13 
of the Contract Disputes Act after a penalty stops accruing under this 
part. Such penalty may accrue on an unpaid contract payment and on the 
unpaid penalty under this part.
    (3) This part does not require an interest penalty on a payment that 
is not made because of a dispute between the head of an agency and a 
vendor over the amount of payment or compliance with the contract. A 
claim related to such a dispute and interest payable for the period 
during which the dispute is being resolved is subject to the Contract 
Disputes Act.
    (b) Small Business Act (15 U.S.C. 644(k)). This Act has been amended 
to require that any agency with an Office of Small and Disadvantaged 
Business Utilization must assist small business concerns to obtain 
payments, late payment interest penalties, additional penalties, or 
information due to the concerns.



Sec. 1315.17  Formulas.

    (a) Rebate formula. (1) Agencies shall determine credit card payment 
dates based on an analysis of the total benefits to the Federal 
government as a whole. Specifically, agencies should compare daily basis 
points offered by the card issuer with the corresponding daily basis 
points of the government's Current Value of Funds (CVF) rate. If the 
basis points offered by the card issuer are greater than the daily basis 
points of the government'' funds, the government will maximize savings 
by paying on the earliest possible date. If the basis points offered by 
the card issuer are less than the daily basis points of the government'' 
funds, the government will minimize costs by paying on the Prompt 
Payment due

[[Page 149]]

date or the date specified in the contract.
    (2) Agencies may use a rebate spreadsheet which automatically 
calculates the net savings to the government and whether the agency 
should pay early or late. The only variables required for input to this 
spreadsheet are the CVF rate, the Maximum Discount Rate, that is, the 
rate from which daily basis points offered by the card issuer are 
derived, and the amount of debt. This spreadsheet is available for use 
on the prompt payment website at www.fms.treas.gov/prompt/index/.html.
    (3) If agencies chose not to use the spreadsheet, the following may 
be used to determine whether to pay early or late. To calculate whether 
to pay early or late, agencies must first determine the respective basis 
points. To obtain Daily Basis Points offered by card issuer, refer to 
the agency's contract with the card issuer. Use the following formula to 
calculate the average daily basis points of the CVF rate:

(CVF/360) * 100

    (4) For example: The daily basis points offered to agency X by card 
issuer Y are 1.5 basis points. That is, for every day the agency delays 
paying the card issuer the agency loses 1.5 basis points in savings. At 
a CVF of 5 percent, the daily basis points of the Current Value of Funds 
Rate are 1.4 basis points. That is, every day the agency delays paying, 
the government earns 1.4 basis points. The basis points were calculated 
using the formula:

(CVF/360) * 100
(5/360) * 100 = 1.4

    (5) Because 1.5 is greater than 1.4, the agency should pay as early 
as possible. If the basis points offered by the card issuer are less 
than the daily basis points of the government'' funds (if for instance 
the rebate equaled 1.3 basis points and the CVF was still 1.4 basis 
points or if the rebate equaled 1.5 but the CVF equaled 1.6), the 
government will minimize costs by paying as late as possible, but by the 
payment due date.
    (b) Daily simple interest formula. (1) To calculate daily simple 
interest the following formula may be used:

P(r/360*d)

Where:

P is the amount of principle or invoice amount;
r equals the Prompt Payment interest rate; and
d equals the numbers of days for which interest is being calculated.

    (2) For example, if a payment is due on April 1 and the payment is 
not made until April 11, a simple interest calculation will determine 
the amount of interest owed the vendor for the late payment. Using the 
formula above, at an invoice amount of $1,500 paid 10 days late and an 
interest rate of 6.5%, the amount of interest owed is calculated as 
follows:

$1,500 (.065/360*10) = $2.71

    (c) Monthly compounding interest formula. (1) To calculate interest 
as required in Sec. 1315.10(a)(3), the following formula may be used:

P(1+r/12)\n\*(1+(r/360*d))-P

Where:

P equals the principle or invoice amount;
r equals the interest rate;
n equals the number of months; and
d equals the number of days for which interest is being calculated.

    (2) The first part of the equation calculates compounded monthly 
interest. The second part of the equation calculates simple interest on 
any additional days beyond a monthly increment.
    (3) For example, if the amount owed is $1,500, the payment due date 
is April 1, the agency does not pay until June 15 and the applicable 
interest rate is 6 percent, interest is calculated as follows:

$ 1,500(1+.06/12) \2\ * (1+(0.06/360*15))-$1,500 = $18.83



Sec. 1315.18  Inquiries.

    (a) Regulation. Inquiries concerning this part may be directed in 
writing to the Department of the Treasury, Financial Management Service 
(FMS), Cash Management Policy and Planning Division, 401 14th Street, 
SW. Washington, DC 20227, (202) 874-6590, or by calling the Prompt 
Payment help line at 1-800-266-9667, by emailing questions to FMS at 
[email protected], or by completing a Prompt Payment 
inquiry

[[Page 150]]

form available at www.fms.treas.gov/prompt/inquiries.html.
    (b) Applicable interest rate. The rate is published by the Fiscal 
Service, Department of the Treasury, semiannually in the Federal 
Register on or about January 1 and July 1. The rate also may be obtained 
from the Department of Treasury's Financial Management Service (FMS) at 
1-800-266-9667. This information is also available at the FMS Prompt 
Payment Web Site at http://www.fms.treas.gov/prompt/index.html.
    (c) Agency payments. Questions concerning delinquent payments should 
be directed to the designated agency office, or the office responsible 
for issuing the payment if different from the designated agency office. 
Questions about disagreements over payment amount or timing should be 
directed to the contracting officer for resolution. Small business 
concerns may obtain additional assistance on payment issues by 
contacting the agency's Office of Small and Disadvantaged Business 
Utilization.



Sec. 1315.19  Regulatory references to OMB Circular A-125.

    This part supercedes OMB Circular A-125 (``Prompt Payment''). Until 
revised to reflect the codification in this part, regulatory references 
to Circular A-125 shall be construed as referring to this part.



Sec. 1315.20  Application of Section 1010 of the National Defense 

Authorization Act for Fiscal Year 2001.

    Section 1010 of the National Defense Authorization Act for Fiscal 
Year 2001 (Public Law 106-398, 114 Stat. 1654), as amended by section 
1007 of the National Defense Authorization Act for Fiscal Year 2002 
(Public Law 107-107, 115 Stat. 1012), requires an agency to pay an 
interest penalty whenever the agency makes an interim payment under a 
cost-reimbursement contract for services more than 30 days after the 
date the agency receives a proper invoice for payment from the 
contractor. This part implements Section 1010, as amended, and is 
applicable in the following manner:
    (a) This part shall apply to all interim payment requests that are 
due on or after December 15, 2000 under cost-reimbursement service 
contracts awarded before, on, or after December 15, 2000.
    (b) No interest penalty shall accrue under this part for any delay 
in payment that occurred prior to December 15, 2000.
    (c) Agencies are authorized to issue modifications to contracts, as 
necessary, to conform them to the provisions in this part implementing 
Section 1010, as amended.

[67 FR 79516, Dec. 30, 2002]



PART 1320_CONTROLLING PAPERWORK BURDENS ON THE PUBLIC--Table of Contents




Sec.
1320.1 Purpose.
1320.2 Effect.
1320.3 Definitions.
1320.4 Coverage.
1320.5 General requirements.
1320.6 Public protection.
1320.7 Agency head and Senior Official responsibilities.
1320.8 Agency collection of information responsibilities.
1320.9 Agency certifications for proposed collections of information.
1320.10 Clearance of collections of information, other than those 
          contained in proposed rules or in current rules.
1320.11 Clearance of collections of information in proposed rules.
1320.12 Clearance of collections of information in current rules.
1320.13 Emergency processing.
1320.14 Public access.
1320.15 Independent regulatory agency override authority.
1320.16 Delegation of approval authority.
1320.17 Information collection budget.
1320.18 Other authority.

Appendix A to Part 1320--Agencies With Delegated Review and Approval 
          Authority

    Authority: 31 U.S.C. Sec. 1111 and 44 U.S.C. Chs. 21, 25, 27, 29, 
31, 35.

    Source: 60 FR 44984, Aug. 29, 1995, unless otherwise noted.



Sec. 1320.1  Purpose.

    The purpose of this part is to implement the provisions of the 
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35)(the Act) 
concerning collections of information. It is issued under the authority 
of section 3516 of the Act, which provides that ``The Director

[[Page 151]]

shall promulgate rules, regulations, or procedures necessary to exercise 
the authority provided by this chapter.'' It is designed to reduce, 
minimize and control burdens and maximize the practical utility and 
public benefit of the information created, collected, disclosed, 
maintained, used, shared and disseminated by or for the Federal 
government.



Sec. 1320.2  Effect.

    (a) Except as provided in paragraph (b) of this section, this part 
takes effect on October 1, 1995.
    (b)(1) In the case of a collection of information for which there is 
in effect on September 30, 1995, a control number issued by the Office 
of Management and Budget under 44 U.S.C. Chapter 35, the provisions of 
this Part shall take effect beginning on the earlier of:
    (i) The date of the first extension of approval for or modification 
of that collection of information after September 30, 1995; or
    (ii) The date of the expiration of the OMB control number after 
September 30, 1995.
    (2) Prior to such extension of approval, modification, or 
expiration, the collection of information shall be subject to 5 CFR part 
1320, as in effect on September 30, 1995.



Sec. 1320.3  Definitions.

    For purposes of implementing the Act and this Part, the following 
terms are defined as follows:
    (a) Agency means any executive department, military department, 
Government corporation, Government controlled corporation, or other 
establishment in the executive branch of the government, or any 
independent regulatory agency, but does not include:
    (1) The General Accounting Office;
    (2) Federal Election Commission;
    (3) The governments of the District of Columbia and the territories 
and possessions of the United States, and their various subdivisions; or
    (4) Government-owned contractor-operated facilities, including 
laboratories engaged in national defense research and production 
activities.
    (b)(1) 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, including:
    (i) Reviewing instructions;
    (ii) Developing, acquiring, installing, and utilizing technology and 
systems for the purpose of collecting, validating, and verifying 
information;
    (iii) Developing, acquiring, installing, and utilizing technology 
and systems for the purpose of processing and maintaining information;
    (iv) Developing, acquiring, installing, and utilizing technology and 
systems for the purpose of disclosing and providing information;
    (v) Adjusting the existing ways to comply with any previously 
applicable instructions and requirements;
    (vi) Training personnel to be able to respond to a collection of 
information;
    (vii) Searching data sources;
    (viii) Completing and reviewing the collection of information; and
    (ix) Transmitting, or otherwise disclosing the information.
    (2) The time, effort, and financial resources necessary to comply 
with a collection of information that would be incurred by persons in 
the normal course of their activities (e.g., in compiling and 
maintaining business records) will be excluded from the ``burden'' if 
the agency demonstrates that the reporting, recordkeeping, or disclosure 
activities needed to comply are usual and customary.
    (3) A collection of information conducted or sponsored by a Federal 
agency that is also conducted or sponsored by a unit of State, local, or 
tribal government is presumed to impose a Federal burden except to the 
extent that the agency shows that such State, local, or tribal 
requirement would be imposed even in the absence of a Federal 
requirement.
    (c) Collection of information means, except as provided in Sec. 
1320.4, the obtaining, causing to be obtained, soliciting, or requiring 
the disclosure to an agency, third parties or the public of information 
by or for an agency by means of identical questions posed to, or 
identical reporting, recordkeeping, or disclosure requirements imposed 
on, ten or more persons, whether such collection of information is 
mandatory, voluntary, or required to obtain or retain a benefit. 
``Collection of information''

[[Page 152]]

includes any requirement or request for persons to obtain, maintain, 
retain, report, or publicly disclose information. As used in this Part, 
``collection of information'' refers to the act of collecting or 
disclosing information, to the information to be collected or disclosed, 
to a plan and/or an instrument calling for the collection or disclosure 
of information, or any of these, as appropriate.
    (1) A ``collection of information'' may be in any form or format, 
including the use of report forms; application forms; schedules; 
questionnaires; surveys; reporting or recordkeeping requirements; 
contracts; agreements; policy statements; plans; rules or regulations; 
planning requirements; circulars; directives; instructions; bulletins; 
requests for proposal or other procurement requirements; interview 
guides; oral communications; posting, notification, labeling, or similar 
disclosure requirements; telegraphic or telephonic requests; automated, 
electronic, mechanical, or other technological collection techniques; 
standard questionnaires used to monitor compliance with agency 
requirements; or any other techniques or technological methods used to 
monitor compliance with agency requirements. A ``collection of 
information'' may implicitly or explicitly include related collection of 
information requirements.
    (2) Requirements by an agency for a person to obtain or compile 
information for the purpose of disclosure to members of the public or 
the public at large, through posting, notification, labeling or similar 
disclosure requirements constitute the ``collection of information'' 
whenever the same requirement to obtain or compile information would be 
a ``collection of information'' if the information were directly 
provided to the agency. The public disclosure of information originally 
supplied by the Federal government to the recipient for the purpose of 
disclosure to the public is not included within this definition.
    (3) ``Collection of information'' includes questions posed to 
agencies, instrumentalities, or employees of the United States, if the 
results are to be used for general statistical purposes, that is, if the 
results are to be used for statistical compilations of general public 
interest, including compilations showing the status or implementation of 
Federal activities and programs.
    (4) As used in paragraph (c) of this section, ``ten or more 
persons'' refers to the persons to whom a collection of information is 
addressed by the agency within any 12-month period, and to any 
independent entities to which the initial addressee may reasonably be 
expected to transmit the collection of information during that period, 
including independent State, territorial, tribal or local entities and 
separately incorporated subsidiaries or affiliates. For the purposes of 
this definition of ``ten or more persons,'' ``persons'' does not include 
employees of the respondent acting within the scope of their employment, 
contractors engaged by a respondent for the purpose of complying with 
the collection of information, or current employees of the Federal 
government (including military reservists and members of the National 
Guard while on active duty) when acting within the scope of their 
employment, but it does include retired and other former Federal 
employees.
    (i) Any recordkeeping, reporting, or disclosure requirement 
contained in a rule of general applicability is deemed to involve ten or 
more persons.
    (ii) Any collection of information addressed to all or a substantial 
majority of an industry is presumed to involve ten or more persons.
    (d) Conduct or Sponsor. A Federal agency is considered to ``conduct 
or sponsor'' a collection of information if the agency collects the 
information, causes another agency to collect the information, contracts 
or enters into a cooperative agreement with a person to collect the 
information, or requires a person to provide information to another 
person, or in similar ways causes another agency, contractor, partner in 
a cooperative agreement, or person to obtain, solicit, or require the 
disclosure to third parties or the public of information by or for an 
agency. A collection of information undertaken by a recipient of a 
Federal grant is considered to be ``conducted or sponsored'' by an 
agency only if:

[[Page 153]]

    (1) The recipient of a grant is conducting the collection of 
information at the specific request of the agency; or
    (2) The terms and conditions of the grant require specific approval 
by the agency of the collection of information or collection procedures.
    (e) Director means the Director of OMB, or his or her designee.
    (f) Display means:
    (1) In the case of forms, questionnaires, instructions, and other 
written collections of information sent or made available to potential 
respondents (other than in an electronic format), to place the currently 
valid OMB control number on the front page of the collection of 
information;
    (2) In the case of forms, questionnaires, instructions, and other 
written collections of information sent or made available to potential 
respondents in an electronic format, to place the currently valid OMB 
control number in the instructions, near the title of the electronic 
collection instrument, or, for on-line applications, on the first screen 
viewed by the respondent;
    (3) In the case of collections of information published in 
regulations, guidelines, and other issuances in the Federal Register, to 
publish the currently valid OMB control number in the Federal Register 
(for example, in the case of a collection of information in a 
regulation, by publishing the OMB control number in the preamble or the 
regulatory text for the final rule, in a technical amendment to the 
final rule, or in a separate notice announcing OMB approval of the 
collection of information). In the case of a collection of information 
published in an issuance that is also included in the Code of Federal 
Regulations, publication of the currently valid control number in the 
Code of Federal Regulations constitutes an alternative means of 
``display.'' In the case of a collection of information published in an 
issuance that is also included in the Code of Federal Regulations, OMB 
recommends for ease of future reference that, even where an agency has 
already ``displayed'' the OMB control number by publishing it in the 
Federal Register as a separate notice or in the preamble for the final 
rule (rather than in the regulatory text for the final rule or in a 
technical amendment to the final rule), the agency also place the 
currently valid control number in a table or codified section to be 
included in the Code of Federal Regulations. For placement of OMB 
control numbers in the Code of Federal Regulations, see 1 CFR 21.35.
    (4) In other cases, and where OMB determines in advance in writing 
that special circumstances exist, to use other means to inform potential 
respondents of the OMB control number.
    (g) Independent regulatory agency means the Board of Governors of 
the Federal Reserve System, the Commodity Futures Trading Commission, 
the Consumer Product Safety Commission, the Federal Communications 
Commission, the Federal Deposit Insurance Corporation, the Federal 
Energy Regulatory Commission, the Federal Housing Finance Board, the 
Federal Maritime Commission, the Federal Trade Commission, the 
Interstate Commerce Commission, the Mine Enforcement Safety and Health 
Review Commission, the National Labor Relations Board, the Nuclear 
Regulatory Commission, the Occupational Safety and Health Review 
Commission, the Postal Rate Commission, the Securities and Exchange 
Commission, and any other similar agency designated by statute as a 
Federal independent regulatory agency or commission.
    (h) Information means any statement or estimate of fact or opinion, 
regardless of form or format, whether in numerical, graphic, or 
narrative form, and whether oral or maintained on paper, electronic or 
other media. ``Information'' does not generally include items in the 
following categories; however, OMB may determine that any specific item 
constitutes ``information'':
    (1) Affidavits, oaths, affirmations, certifications, receipts, 
changes of address, consents, or acknowledgments; provided that they 
entail no burden other than that necessary to identify the respondent, 
the date, the respondent's address, and the nature of the instrument (by 
contrast, a certification would likely involve the collection of 
``information'' if an agency conducted or sponsored it as a substitute 
for a

[[Page 154]]

collection of information to collect evidence of, or to monitor, 
compliance with regulatory standards, because such a certification would 
generally entail burden in addition to that necessary to identify the 
respondent, the date, the respondent's address, and the nature of the 
instrument);
    (2) Samples of products or of any other physical objects;
    (3) Facts or opinions obtained through direct observation by an 
employee or agent of the sponsoring agency or through nonstandardized 
oral communication in connection with such direct observations;
    (4) Facts or opinions submitted in response to general solicitations 
of comments from the public, published in the Federal Register or other 
publications, regardless of the form or format thereof, provided that no 
person is required to supply specific information pertaining to the 
commenter, other than that necessary for self-identification, as a 
condition of the agency's full consideration of the comment;
    (5) Facts or opinions obtained initially or in follow-on requests, 
from individuals (including individuals in control groups) under 
treatment or clinical examination in connection with research on or 
prophylaxis to prevent a clinical disorder, direct treatment of that 
disorder, or the interpretation of biological analyses of body fluids, 
tissues, or other specimens, or the identification or classification of 
such specimens;
    (6) A request for facts or opinions addressed to a single person;
    (7) Examinations designed to test the aptitude, abilities, or 
knowledge of the persons tested and the collection of information for 
identification or classification in connection with such examinations;
    (8) Facts or opinions obtained or solicited at or in connection with 
public hearings or meetings;
    (9) Facts or opinions obtained or solicited through nonstandardized 
follow-up questions designed to clarify responses to approved 
collections of information; and
    (10) Like items so designated by OMB.
    (i) OMB refers to the Office of Management and Budget.
    (j) Penalty includes the imposition by an agency or court of a fine 
or other punishment; a judgment for monetary damages or equitable 
relief; or the revocation, suspension, reduction, or denial of a 
license, privilege, right, grant, or benefit.
    (k) Person means an individual, partnership, association, 
corporation (including operations of government-owned contractor-
operated facilities), business trust, or legal representative, an 
organized group of individuals, a State, territorial, tribal, or local 
government or branch thereof, or a political subdivision of a State, 
territory, tribal, or local government or a branch of a political 
subdivision;
    (l) Practical utility means the actual, not merely the theoretical 
or potential, usefulness of information to or for an agency, taking into 
account its accuracy, validity, adequacy, and reliability, and the 
agency's ability to process the information it collects (or a person's 
ability to receive and process that which is disclosed, in the case of a 
third-party or public disclosure) in a useful and timely fashion. In 
determining whether information will have ``practical utility,'' OMB 
will take into account whether the agency demonstrates actual timely use 
for the information either to carry out its functions or make it 
available to third-parties or the public, either directly or by means of 
a third-party or public posting, notification, labeling, or similar 
disclosure requirement, for the use of persons who have an interest in 
entities or transactions over which the agency has jurisdiction. In the 
case of recordkeeping requirements or general purpose statistics (see 
Sec. 1320.3(c)(3)), ``practical utility'' means that actual uses can be 
demonstrated.
    (m) Recordkeeping requirement means a requirement imposed by or for 
an agency on persons to maintain specified records, including a 
requirement to:
    (1) Retain such records;
    (2) Notify third parties, the Federal government, or the public of 
the existence of such records;
    (3) Disclose such records to third parties, the Federal government, 
or the public; or

[[Page 155]]

    (4) Report to third parties, the Federal government, or the public 
regarding such records.



Sec. 1320.4  Coverage.

    (a) The requirements of this part apply to all agencies as defined 
in Sec. 1320.3(a) and to all collections of information conducted or 
sponsored by those agencies, as defined in Sec. 1320.3 (c) and (d), 
wherever conducted or sponsored, but, except as provided in paragraph 
(b) of this section, shall not apply to collections of information:
    (1) During the conduct of a Federal criminal investigation or 
prosecution, or during the disposition of a particular criminal matter;
    (2) During the conduct of a civil action to which the United States 
or any official or agency thereof is a party, or during the conduct of 
an administrative action, investigation, or audit involving an agency 
against specific individuals or entities;
    (3) By compulsory process pursuant to the Antitrust Civil Process 
Act and section 13 of the Federal Trade Commission Improvements Act of 
1980; or
    (4) During the conduct of intelligence activities as defined in 
section 3.4(e) of Executive Order No. 12333, issued December 4, 1981, or 
successor orders, or during the conduct of cryptologic activities that 
are communications security activities.
    (b) The requirements of this Part apply to the collection of 
information during the conduct of general investigations or audits 
(other than information collected in an antitrust investigation to the 
extent provided in paragraph (a)(3) of this section) undertaken with 
reference to a category of individuals or entities such as a class of 
licensees or an entire industry.
    (c) The exception in paragraph (a)(2) of this section applies during 
the entire course of the investigation, audit, or action, whether before 
or after formal charges or complaints are filed or formal administrative 
action is initiated, but only after a case file or equivalent is opened 
with respect to a particular party. In accordance with paragraph (b) of 
this section, collections of information prepared or undertaken with 
reference to a category of individuals or entities, such as a class of 
licensees or an industry, do not fall within this exception.



Sec. 1320.5  General requirements.

    (a) An agency shall not conduct or sponsor a collection of 
information unless, in advance of the adoption or revision of the 
collection of information--
    (1) The agency has--
    (i) Conducted the review required in Sec. 1320.8;
    (ii) Evaluated the public comments received under Sec. 1320.8(d) 
and Sec. 1320.11;
    (iii) Submitted to the Director, in accordance with such procedures 
and in such form as OMB may specify,
    (A) The certification required under Sec. 1320.9,
    (B) The proposed collection of information in accordance with Sec. 
1320.10, Sec. 1320.11, or Sec. 1320.12, as appropriate,
    (C) An explanation for the decision that it would not be 
appropriate, under Sec. 1320.8(b)(1), for a proposed collection of 
information to display an expiration date;
    (D) An explanation for a decision to provide for any payment or gift 
to respondents, other than remuneration of contractors or grantees;
    (E) A statement indicating whether (and if so, to what extent) the 
proposed collection of information involves the use of automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses, and an explanation for the decision;
    (F) A summary of the public comments received under Sec. 1320.8(d), 
including actions taken by the agency in response to the comments, and 
the date and page of the publication in the Federal Register of the 
notice therefor; and
    (G) Copies of pertinent statutory authority, regulations, and such 
related supporting materials as OMB may request; and
    (iv) Published, except as provided in Sec. 1320.13(d), a notice in 
the Federal Register--
    (A) Stating that the agency has made such submission; and
    (B) Setting forth--
    (1) A title for the collection of information;

[[Page 156]]

    (2) A summary of the collection of information;
    (3) A brief description of the need for the information and proposed 
use of the information;
    (4) A description of the likely respondents, including the estimated 
number of likely respondents, and proposed frequency of response to the 
collection of information;
    (5) An estimate of the total annual reporting and recordkeeping 
burden that will result from the collection of information;
    (6) Notice that comments may be submitted to OMB; and
    (7) The time period within which the agency is requesting OMB to 
approve or disapprove the collection of information if, at the time of 
submittal of a collection of information for OMB review under Sec. 
1320.10, Sec. 1320.11 or Sec. 1320.12, the agency plans to request or 
has requested OMB to conduct its review on an emergency basis under 
Sec. 1320.13; and
    (2) OMB has approved the proposed collection of information, OMB's 
approval has been inferred under Sec. 1320.10(c), Sec. 1320.11(i), or 
Sec. 1320.12(e), or OMB's disapproval has been voided by an independent 
regulatory agency under Sec. 1320.15; and
    (3) The agency has obtained from the Director a control number to be 
displayed upon the collection of information.
    (b) In addition to the requirements in paragraph (a) of this 
section, an agency shall not conduct or sponsor a collection of 
information unless:
    (1) The collection of information displays a currently valid OMB 
control number; and
    (2)(i) The agency informs the potential persons who are to respond 
to the collection of information that such persons are not required to 
respond to the collection of information unless it displays a currently 
valid OMB control number.
    (ii) An agency shall provide the information described in paragraph 
(b)(2)(i) of this section in a manner that is reasonably calculated to 
inform the public.
    (A) In the case of forms, questionnaires, instructions, and other 
written collections of information sent or made available to potential 
respondents (other than in an electronic format), the information 
described in paragraph (b)(2)(i) of this section is provided ``in a 
manner that is reasonably calculated to inform the public'' if the 
agency includes it either on the form, questionnaire or other collection 
of information, or in the instructions for such collection.
    (B) In the case of forms, questionnaires, instructions, and other 
written collections of information sent or made available to potential 
respondents in an electronic format, the information described in 
paragraph (b)(2)(i) of this section is provided ``in a manner that is 
reasonably calculated to inform the public'' if the agency places the 
currently valid OMB control number in the instructions, near the title 
of the electronic collection instrument, or, for on-line applications, 
on the first screen viewed by the respondent.
    (C) In the case of collections of information published in 
regulations, guidelines, and other issuances in the Federal Register, 
the information described in paragraph (b)(2)(i) of this section is 
provided ``in a manner that is reasonably calculated to inform the 
public'' if the agency publishes such information in the Federal 
Register (for example, in the case of a collection of information in a 
regulation, by publishing such information in the preamble or the 
regulatory text, or in a technical amendment to the regulation, or in a 
separate notice announcing OMB approval of the collection of 
information). In the case of a collection of information published in an 
issuance that is also included in the Code of Federal Regulations, 
publication of such information in the Code of Federal Regulations 
constitutes an alternative means of providing it ``in a manner that is 
reasonably calculated to inform the public.'' In the case of a 
collection of information published in an issuance that is also included 
in the Code of Federal Regulations, OMB recommends for ease of future 
reference that, even where an agency has already provided such 
information ``in a manner that is reasonably calculated to inform the 
public'' by publishing it in the Federal Register as a separate notice 
or in the preamble for the final rule (rather than in the regulatory 
text for

[[Page 157]]

the final rule or in a technical amendment to the final rule), the 
agency also publish such information along with a table or codified 
section of OMB control numbers to be included in the Code of Federal 
Regulations (see Sec. 1320.3(f)(3)).
    (D) In other cases, and where OMB determines in advance in writing 
that special circumstances exist, to use other means that are reasonably 
calculated to inform the public of the information described in 
paragraph (b)(2)(i) of this section.
    (c)(1) Agencies shall submit all collections of information, other 
than those contained in proposed rules published for public comment in 
the Federal Register or in current regulations that were published as 
final rules in the Federal Register, in accordance with the requirements 
in Sec. 1320.10. Agencies shall submit collections of information 
contained in interim final rules or direct final rules in accordance 
with the requirements of Sec. 1320.10.
    (2) Agencies shall submit collections of information contained in 
proposed rules published for public comment in the Federal Register in 
accordance with the requirements in Sec. 1320.11.
    (3) Agencies shall submit collections of information contained in 
current regulations that were published as final rules in the Federal 
Register in accordance with the requirements in Sec. 1320.12.
    (4) Special rules for emergency processing of collections of 
information are set forth in Sec. 1320.13.
    (5) For purposes of time limits for OMB review of collections of 
information, any submission properly submitted and received by OMB after 
12:00 noon will be deemed to have been received on the following 
business day.
    (d)(1) To obtain OMB approval of a collection of information, an 
agency shall demonstrate that it has taken every reasonable step to 
ensure that the proposed collection of information:
    (i) Is the least burdensome necessary for the proper performance of 
the agency's functions to comply with legal requirements and achieve 
program objectives;
    (ii) Is not duplicative of information otherwise accessible to the 
agency; and
    (iii) Has practical utility. The agency shall also seek to minimize 
the cost to itself of collecting, processing, and using the information, 
but shall not do so by means of shifting disproportionate costs or 
burdens onto the public.
    (2) Unless the agency is able to demonstrate, in its submission for 
OMB clearance, that such characteristic of the collection of information 
is necessary to satisfy statutory requirements or other substantial 
need, OMB will not approve a collection of information--
    (i) Requiring respondents to report information to the agency more 
often than quarterly;
    (ii) Requiring respondents to prepare a written response to a 
collection of information in fewer than 30 days after receipt of it;
    (iii) Requiring respondents to submit more than an original and two 
copies of any document;
    (iv) Requiring respondents to retain records, other than health, 
medical, government contract, grant-in-aid, or tax records, for more 
than three years;
    (v) In connection with a statistical survey, that is not designed to 
produce valid and reliable results that can be generalized to the 
universe of study;
    (vi) Requiring the use of a statistical data classification that has 
not been reviewed and approved by OMB;
    (vii) That includes a pledge of confidentiality that is not 
supported by authority established in statute or regulation, that is not 
supported by disclosure and data security policies that are consistent 
with the pledge, or which unnecessarily impedes sharing of data with 
other agencies for compatible confidential use; or
    (viii) Requiring respondents to submit proprietary, trade secret, or 
other confidential information unless the agency can demonstrate that it 
has instituted procedures to protect the information's confidentiality 
to the extent permitted by law.
    (e) OMB shall determine whether the collection of information, as 
submitted by the agency, is necessary for the proper performance of the 
agency's functions. In making this determination, OMB will take into 
account the criteria set forth in paragraph (d) of

[[Page 158]]

this section, and will consider whether the burden of the collection of 
information is justified by its practical utility. In addition:
    (1) OMB will consider necessary any collection of information 
specifically mandated by statute or court order, but will independently 
assess any collection of information to the extent that the agency 
exercises discretion in its implementation; and
    (2) OMB will consider necessary any collection of information 
specifically required by an agency rule approved or not acted upon by 
OMB under Sec. 1320.11 or Sec. 1320.12, but will independently assess 
any such collection of information to the extent that it deviates from 
the specifications of the rule.
    (f) Except as provided in Sec. 1320.15, to the extent that OMB 
determines that all or any portion of a collection of information is 
unnecessary, for any reason, the agency shall not engage in such 
collection or portion thereof. OMB will reconsider its disapproval of a 
collection of information upon the request of the agency head or Senior 
Official only if the sponsoring agency is able to provide significant 
new or additional information relevant to the original decision.
    (g) An agency may not make a substantive or material modification to 
a collection of information after such collection of information has 
been approved by OMB, unless the modification has been submitted to OMB 
for review and approval under this Part.
    (h) An agency should consult with OMB before using currently 
approved forms or other collections of information after the expiration 
date printed thereon (in those cases where the actual form being used 
contains an expiration date that would expire before the end of the use 
of the form).



Sec. 1320.6  Public protection.

    (a) Notwithstanding any other provision of law, no person shall be 
subject to any penalty for failing to comply with a collection of 
information that is subject to the requirements of this part if:
    (1) The collection of information does not display, in accordance 
with Sec. 1320.3(f) and Sec. 1320.5(b)(1), a currently valid OMB 
control number assigned by the Director in accordance with the Act; or
    (2) The agency fails to inform the potential person who is to 
respond to the collection of information, in accordance with Sec. 
1320.5(b)(2), that such person is not required to respond to the 
collection of information unless it displays a currently valid OMB 
control number.
    (b) The protection provided by paragraph (a) of this section may be 
raised in the form of a complete defense, bar, or otherwise to the 
imposition of such penalty at any time during the agency administrative 
process in which such penalty may be imposed or in any judicial action 
applicable thereto.
    (c) Whenever an agency has imposed a collection of information as a 
means for proving or satisfying a condition for the receipt of a benefit 
or the avoidance of a penalty, and the collection of information does 
not display a currently valid OMB control number or inform the potential 
persons who are to respond to the collection of information, as 
prescribed in Sec. 1320.5(b), the agency shall not treat a person's 
failure to comply, in and of itself, as grounds for withholding the 
benefit or imposing the penalty. The agency shall instead permit 
respondents to prove or satisfy the legal conditions in any other 
reasonable manner.
    (1) If OMB disapproves the whole of such a collection of information 
(and the disapproval is not overridden under Sec. 1320.15), the agency 
shall grant the benefit to (or not impose the penalty on) otherwise 
qualified persons without requesting further proof concerning the 
condition.
    (2) If OMB instructs an agency to make a substantive or material 
change to such a collection of information (and the instruction is not 
overridden under Sec. 1320.15), the agency shall permit respondents to 
prove or satisfy the condition by complying with the collection of 
information as so changed.
    (d) Whenever a member of the public is protected from imposition of 
a penalty under this section for failure to comply with a collection of 
information, such penalty may not be imposed by an agency directly, by 
an agency through judicial process, or by any

[[Page 159]]

other person through administrative or judicial process.
    (e) The protection provided by paragraph (a) of this section does 
not preclude the imposition of a penalty on a person for failing to 
comply with a collection of information that is imposed on the person by 
statute--e.g., 26 U.S.C. Sec. 6011(a) (statutory requirement for person 
to file a tax return), 42 U.S.C. Sec. 6938(c) (statutory requirement 
for person to provide notification before exporting hazardous waste).



Sec. 1320.7  Agency head and Senior Official responsibilities.

    (a) Except as provided in paragraph (b) of this section, each agency 
head shall designate a Senior Official to carry out the responsibilities 
of the agency under the Act and this part. The Senior Official shall 
report directly to the head of the agency and shall have the authority, 
subject to that of the agency head, to carry out the responsibilities of 
the agency under the Act and this part.
    (b) An agency head may retain full undelegated review authority for 
any component of the agency which by statute is required to be 
independent of any agency official below the agency head. For each 
component for which responsibility under the Act is not delegated to the 
Senior Official, the agency head shall be responsible for the 
performance of those functions.
    (c) The Senior Official shall head an office responsible for 
ensuring agency compliance with and prompt, efficient, and effective 
implementation of the information policies and information resources 
management responsibilities established under the Act, including the 
reduction of information collection burdens on the public.
    (d) With respect to the collection of information and the control of 
paperwork, the Senior Official shall establish a process within such 
office that is sufficiently independent of program responsibility to 
evaluate fairly whether proposed collections of information should be 
approved under this Part.
    (e) Agency submissions of collections of information for OMB review, 
and the accompanying certifications under Sec. 1320.9, may be made only 
by the agency head or the Senior Official, or their designee.



Sec. 1320.8  Agency collection of information responsibilities.

    The office established under Sec. 1320.7 shall review each 
collection of information before submission to OMB for review under this 
part.
    (a) This review shall include:
    (1) An evaluation of the need for the collection of information, 
which shall include, in the case of an existing collection of 
information, an evaluation of the continued need for such collection;
    (2) A functional description of the information to be collected;
    (3) A plan for the collection of information;
    (4) A specific, objectively supported estimate of burden, which 
shall include, in the case of an existing collection of information, an 
evaluation of the burden that has been imposed by such collection;
    (5) An evaluation of whether (and if so, to what extent) the burden 
on respondents can be reduced by use of automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology, e.g., permitting electronic submission of 
responses;
    (6) A test of the collection of information through a pilot program, 
if appropriate; and
    (7) A plan for the efficient and effective management and use of the 
information to be collected, including necessary resources.
    (b) Such office shall ensure that each collection of information:
    (1) Is inventoried, displays a currently valid OMB control number, 
and, if appropriate, an expiration date;
    (2) Is reviewed by OMB in accordance with the clearance requirements 
of 44 U.S.C. Sec. 3507; and
    (3) Informs and provides reasonable notice to the potential persons 
to whom the collection of information is addressed of--
    (i) The reasons the information is planned to be and/or has been 
collected;
    (ii) The way such information is planned to be and/or has been used 
to further the proper performance of the functions of the agency;

[[Page 160]]

    (iii) An estimate, to the extent practicable, of the average burden 
of the collection (together with a request that the public direct to the 
agency any comments concerning the accuracy of this burden estimate and 
any suggestions for reducing this burden);
    (iv) Whether responses to the collection of information are 
voluntary, required to obtain or retain a benefit (citing authority), or 
mandatory (citing authority);
    (v) The nature and extent of confidentiality to be provided, if any 
(citing authority); and
    (vi) The fact that 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.
    (c)(1) An agency shall provide the information described in 
paragraphs (b)(3)(i) through (v) of this section as follows:
    (i) In the case of forms, questionnaires, instructions, and other 
written collections of information sent or made available to potential 
respondents (except in an electronic format), such information can be 
included either on the form, questionnaire or other collection of 
information, as part of the instructions for such collection, or in a 
cover letter or memorandum that accompanies the collection of 
information.
    (ii) In the case of forms, questionnaires, instructions, and other 
written collections of information sent or made available to potential 
respondents in an electronic format, such information can be included 
either in the instructions, near the title of the electronic collection 
instrument, or, for on-line applications, on the first screen viewed by 
the respondent;
    (iii) In the case of collections of information published in 
regulations, guidelines, and other issuances in the Federal Register, 
such information can be published in the Federal Register (for example, 
in the case of a collection of information in a regulation, by 
publishing such information in the preamble or the regulatory text to 
the final rule, or in a technical amendment to the final rule, or in a 
separate notice announcing OMB approval of the collection of 
information).
    (iv) In other cases, and where OMB determines in advance in writing 
that special circumstances exist, agencies may use other means to inform 
potential respondents.
    (2) An agency shall provide the information described in paragraph 
(b)(3)(vi) of this section in a manner that is reasonably calculated to 
inform the public (see Sec. 1320.5(b)(2)(ii)).
    (d)(1) Before an agency submits a collection of information to OMB 
for approval, and except as provided in paragraphs (d)(3) and (d)(4) of 
this section, the agency shall provide 60-day notice in the Federal 
Register, and otherwise consult with members of the public and affected 
agencies concerning each proposed collection of information, to solicit 
comment 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.
    (2) If the agency does not publish a copy of the proposed collection 
of information, together with the related instructions, as part of the 
Federal Register notice, the agency should--
    (i) Provide more than 60-day notice to permit timely receipt, by 
interested members of the public, of a copy of the proposed collection 
of information and related instructions; or
    (ii) Explain how and from whom an interested member of the public 
can request and obtain a copy without charge, including, if applicable, 
how the public can gain access to the collection of information and 
related instructions electronically on demand.

[[Page 161]]

    (3) The agency need not separately seek such public comment for any 
proposed collection of information contained in a proposed rule to be 
reviewed under Sec. 1320.11, if the agency provides notice and comment 
through the notice of proposed rulemaking for the proposed rule and such 
notice specifically includes the solicitation of comments for the same 
purposes as are listed under paragraph (d)(1) of this section.
    (4) The agency need not seek or may shorten the time allowed for 
such public comment if OMB grants an exemption from such requirement for 
emergency processing under Sec. 1320.13.



Sec. 1320.9  Agency certifications for proposed collections of information.

    As part of the agency submission to OMB of a proposed collection of 
information, the agency (through the head of the agency, the Senior 
Official, or their designee) shall certify (and provide a record 
supporting such certification) that the proposed collection of 
information--
    (a) Is necessary for the proper performance of the functions of the 
agency, including that the information to be collected will have 
practical utility;
    (b) Is not unnecessarily duplicative of information otherwise 
reasonably accessible to the agency;
    (c) Reduces to the extent practicable and appropriate the burden on 
persons who shall provide information to or for the agency, including 
with respect to small entities, as defined in the Regulatory Flexibility 
Act (5 U.S.C. 601(6)), the use of such techniques as:
    (1) Establishing differing compliance or reporting requirements or 
timetables that take into account the resources available to those who 
are to respond;
    (2) The clarification, consolidation, or simplification of 
compliance and reporting requirements; or
    (3) An exemption from coverage of the collection of information, or 
any part thereof;
    (d) Is written using plain, coherent, and unambiguous terminology 
and is understandable to those who are to respond;
    (e) Is to be implemented in ways consistent and compatible, to the 
maximum extent practicable, with the existing reporting and 
recordkeeping practices of those who are to respond;
    (f) Indicates for each recordkeeping requirement the length of time 
persons are required to maintain the records specified;
    (g) Informs potential respondents of the information called for 
under Sec. 1320.8(b)(3);
    (h) Has been developed by an office that has planned and allocated 
resources for the efficient and effective management and use of the 
information to be collected, including the processing of the information 
in a manner which shall enhance, where appropriate, the utility of the 
information to agencies and the public;
    (i) Uses effective and efficient statistical survey methodology 
appropriate to the purpose for which the information is to be collected; 
and
    (j) To the maximum extent practicable, uses appropriate information 
technology to reduce burden and improve data quality, agency efficiency 
and responsiveness to the public.



Sec. 1320.10  Clearance of collections of information, other than those 

contained in proposed rules or in current rules.

    Agencies shall submit all collections of information, other than 
those contained either in proposed rules published for public comment in 
the Federal Register (which are submitted under Sec. 1320.11) or in 
current rules that were published as final rules in the Federal Register 
(which are submitted under Sec. 1320.12), in accordance with the 
following requirements:
    (a) On or before the date of submission to OMB, the agency shall, in 
accordance with the requirements in Sec. 1320.5(a)(1)(iv), forward a 
notice to the Federal Register stating that OMB approval is being 
sought. The notice shall direct requests for information, including 
copies of the proposed collection of information and supporting 
documentation, to the agency, and shall request that comments be 
submitted to OMB within 30 days of the notice's publication. The notice 
shall direct comments to the Office of Information and Regulatory 
Affairs of OMB, Attention: Desk Officer for [name of agency]. A

[[Page 162]]

copy of the notice submitted to the Federal Register, together with the 
date of expected publication, shall be included in the agency's 
submission to OMB.
    (b) Within 60 days after receipt of the proposed collection of 
information or publication of the notice under paragraph (a) of this 
section, whichever is later, OMB shall notify the agency involved of its 
decision to approve, to instruct the agency to make a substantive or 
material change to, or to disapprove, the collection of information, and 
shall make such decision publicly available. OMB shall provide at least 
30 days for public comment after receipt of the proposed collection of 
information before making its decision, except as provided under Sec. 
1320.13. Upon approval of a collection of information, OMB shall assign 
an OMB control number and, if appropriate, an expiration date. OMB shall 
not approve any collection of information for a period longer than three 
years.
    (c) If OMB fails to notify the agency of its approval, instruction 
to make substantive or material change, or disapproval within the 60-day 
period, the agency may request, and OMB shall assign without further 
delay, an OMB control number that shall be valid for not more than one 
year.
    (d) As provided in Sec. 1320.5(b) and Sec. 1320.6(a), an agency 
may not conduct or sponsor a collection of information unless the 
collection of information displays a currently valid OMB control number 
and the agency informs potential persons who are to respond to the 
collection of information that such persons are not required to respond 
to the collection of information unless it displays a currently valid 
OMB control number.
    (e)(1) In the case of a collection of information not contained in a 
published current rule which has been approved by OMB and has a 
currently valid OMB control number, the agency shall:
    (i) Conduct the review established under Sec. 1320.8, including the 
seeking of public comment under Sec. 1320.8(d); and
    (ii) After having made a reasonable effort to seek public comment, 
but no later than 60 days before the expiration date of the OMB control 
number for the currently approved collection of information, submit the 
collection of information for review and approval under this part, which 
shall include an explanation of how the agency has used the information 
that it has collected.
    (2) The agency may continue to conduct or sponsor the collection of 
information while the submission is pending at OMB.
    (f) Prior to the expiration of OMB's approval of a collection of 
information, OMB may decide on its own initiative, after consultation 
with the agency, to review the collection of information. Such decisions 
will be made only when relevant circumstances have changed or the burden 
estimates provided by the agency at the time of initial submission were 
materially in error. Upon notification by OMB of its decision to review 
the collection of information, the agency shall submit it to OMB for 
review under this part.
    (g) For good cause, after consultation with the agency, OMB may stay 
the effectiveness of its prior approval of any collection of information 
that is not specifically required by agency rule; in such case, the 
agency shall cease conducting or sponsoring such collection of 
information while the submission is pending, and shall publish a notice 
in the Federal Register to that effect.



Sec. 1320.11  Clearance of collections of information in proposed rules.

    Agencies shall submit collections of information contained in 
proposed rules published for public comment in the Federal Register in 
accordance with the following requirements:
    (a) The agency shall include, in accordance with the requirements in 
Sec. 1320.5(a)(1)(iv) and Sec. 1320.8(d)(1) and (3), in the preamble 
to the Notice of Proposed Rulemaking a statement that the collections of 
information contained in the proposed rule, and identified as such, have 
been submitted to OMB for review under section 3507(d) of the Act. The 
notice shall direct comments to the Office of Information and Regulatory 
Affairs of OMB, Attention: Desk Officer for [name of agency].
    (b) All such submissions shall be made to OMB not later than the day 
on which the Notice of Proposed Rulemaking is published in the Federal

[[Page 163]]

Register, in such form and in accordance with such procedures as OMB may 
direct. Such submissions shall include a copy of the proposed regulation 
and preamble.
    (c) Within 60 days of publication of the proposed rule, but subject 
to paragraph (e) of this section, OMB may file public comments on 
collection of information provisions. The OMB comments shall be in the 
form of an OMB Notice of Action, which shall be sent to the Senior 
Official or agency head, or their designee, and which shall be made a 
part of the agency's rulemaking record.
    (d) If an agency submission is not in compliance with paragraph (b) 
of this section, OMB may, subject to paragraph (e) of this section, 
disapprove the collection of information in the proposed rule within 60 
days of receipt of the submission. If an agency fails to submit a 
collection of information subject to this section, OMB may, subject to 
paragraph (e) of this section, disapprove it at any time.
    (e) OMB shall provide at least 30 days after receipt of the proposed 
collection of information before submitting its comments or making its 
decision, except as provided under Sec. 1320.13.
    (f) When the final rule is published in the Federal Register, the 
agency shall explain how any collection of information contained in the 
final rule responds to any comments received from OMB or the public. The 
agency shall include an identification and explanation of any 
modifications made in the rule, or explain why it rejected the comments. 
If requested by OMB, the agency shall include OMB's comments in the 
preamble to the final rule.
    (g) If OMB has not filed public comments under paragraph (c) of this 
section, or has approved without conditions the collection of 
information contained in a rule before the final rule is published in 
the Federal Register, OMB may assign an OMB control number prior to 
publication of the final rule.
    (h) On or before the date of publication of the final rule, the 
agency shall submit the final rule to OMB, unless it has been approved 
under paragraph (g) of this section (and not substantively or materially 
modified by the agency after approval). Not later than 60 days after 
publication, but subject to paragraph (e) of this section, OMB shall 
approve, instruct the agency to make a substantive or material change 
to, or disapprove, the collection of information contained in the final 
rule. Any such instruction to change or disapprove may be based on one 
or more of the following reasons, as determined by OMB:
    (1) The agency has failed to comply with paragraph (b) of this 
section;
    (2) The agency had substantially modified the collection of 
information contained in the final rule from that contained in the 
proposed rule without providing OMB with notice of the change and 
sufficient information to make a determination concerning the modified 
collection of information at least 60 days before publication of the 
final rule; or
    (3) In cases in which OMB had filed public comments under paragraph 
(c) of this section, the agency's response to such comments was 
unreasonable, and the collection of information is unnecessary for the 
proper performance of the agency's functions.
    (i) After making such decision to approve, to instruct the agency to 
make a substantive or material change to, or disapprove, the collection 
of information, OMB shall so notify the agency. If OMB approves the 
collection of information or if it has not acted upon the submission 
within the time limits of this section, the agency may request, and OMB 
shall assign an OMB control number. If OMB disapproves or instructs the 
agency to make substantive or material change to the collection of 
information, it shall make the reasons for its decision publicly 
available.
    (j) OMB shall not approve any collection of information under this 
section for a period longer than three years. Approval of such 
collection of information will be for the full three-year period, unless 
OMB determines that there are special circumstances requiring approval 
for a shorter period.
    (k) After receipt of notification of OMB's approval, instruction to 
make a substantive or material change to, disapproval of a collection of 
information, or failure to act, the agency shall publish a notice in the 
Federal Register to inform the public of OMB's decision.

[[Page 164]]

    (l) As provided in Sec. 1320.5(b) and Sec. 1320.6(a), an agency 
may not conduct or sponsor a collection of information unless the 
collection of information displays a currently valid OMB control number 
and the agency informs potential persons who are to respond to the 
collection of information that such persons are not required to respond 
to the collection of information unless it displays a currently valid 
OMB control number.



Sec. 1320.12  Clearance of collections of information in current rules.

    Agencies shall submit collections of information contained in 
current rules that were published as final rules in the Federal Register 
in accordance with the following procedures:
    (a) In the case of a collection of information contained in a 
published current rule which has been approved by OMB and has a 
currently valid OMB control number, the agency shall:
    (1) Conduct the review established under Sec. 1320.8, including the 
seeking of public comment under Sec. 1320.8(d); and
    (2) After having made a reasonable effort to seek public comment, 
but no later than 60 days before the expiration date of the OMB control 
number for the currently approved collection of information, submit the 
collection of information for review and approval under this part, which 
shall include an explanation of how the agency has used the information 
that it has collected.
    (b)(1) In the case of a collection of information contained in a 
published current rule that was not required to be submitted for OMB 
review under the Paperwork Reduction Act at the time the collection of 
information was made part of the rule, but which collection of 
information is now subject to the Act and this part, the agency shall:
    (i) Conduct the review established under Sec. 1320.8, including the 
seeking of public comment under Sec. 1320.(8)(d); and
    (ii) After having made a reasonable effort to seek public comment, 
submit the collection of information for review and approval under this 
part, which shall include an explanation of how the agency has used the 
information that it has collected.
    (2) The agency may continue to conduct or sponsor the collection of 
information while the submission is pending at OMB. In the case of a 
collection of information not previously approved, approval shall be 
granted for such period, which shall not exceed 60 days, unless extended 
by the Director for an additional 60 days, and an OMB control number 
assigned. Upon assignment of the OMB control number, and in accordance 
with Sec. 1320.3(f) and Sec. 1320.5(b), the agency shall display the 
number and inform the potential persons who are to respond to the 
collection of information that such persons are not required to respond 
to the collection of information unless it displays a currently valid 
OMB control number.
    (c) On or before the day of submission to OMB under paragraphs (a) 
or (b) of this section, the agency shall, in accordance with the 
requirements set forth in Sec. 1320.5(a)(1)(iv), forward a notice to 
the Federal Register stating that OMB review is being sought. The notice 
shall direct requests for copies of the collection of information and 
supporting documentation to the agency, and shall request that comments 
be submitted to OMB within 30 days of the notice's publication. The 
notice shall direct comments to the Office of Information and Regulatory 
Affairs of OMB, Attention: Desk Officer for [name of agency]. A copy of 
the notice submitted to the Federal Register, together with the date of 
expected publication, shall be included in the agency's submission to 
OMB.
    (d) Within 60 days after receipt of the collection of information or 
publication of the notice under paragraph (c) of this section, whichever 
is later, OMB shall notify the agency involved of its decision to 
approve, to instruct the agency to make a substantive or material change 
to, or to disapprove, the collection of information, and shall make such 
decision publicly available. OMB shall provide at least 30 days for 
public comment after receipt of the proposed collection of information 
before making its decision, except as provided under Sec. 1320.13.
    (e)(1) Upon approval of a collection of information, OMB shall 
assign an OMB control number and an expiration date. OMB shall not 
approve any collection of information for a period longer than three 
years. Approval of any collection

[[Page 165]]

of information submitted under this section will be for the full three-
year period, unless OMB determines that there are special circumstances 
requiring approval for a shorter period.
    (2) If OMB fails to notify the agency of its approval, instruction 
to make substantive or material change, or disapproval within the 60-day 
period, the agency may request, and OMB shall assign without further 
delay, an OMB control number that shall be valid for not more than one 
year.
    (3) As provided in Sec. 1320.5(b) and Sec. 1320.6(a), an agency 
may not conduct or sponsor a collection of information unless the 
collection of information displays a currently valid OMB control number 
and the agency informs potential persons who are to respond to the 
collection of information that such persons are not required to respond 
to the collection of information unless it displays a currently valid 
OMB control number.
    (f)(1) If OMB disapproves a collection of information contained in 
an existing rule, or instructs the agency to make a substantive or 
material change to a collection of information contained in an existing 
rule, OMB shall:
    (i) Publish an explanation thereof in the Federal Register; and
    (ii) Instruct the agency to undertake a rulemaking within a 
reasonable time limited to consideration of changes to the collection of 
information contained in the rule and thereafter to submit the 
collection of information for approval or disapproval under Sec. 
1320.10 or Sec. 1320.11, as appropriate; and
    (iii) Extend the existing approval of the collection of information 
(including an interim approval granted under paragraph (b) of this 
section) for the duration of the period required for consideration of 
proposed changes, including that required for OMB approval or 
disapproval of the collection of information under Sec. 1320.10 or 
Sec. 1320.11, as appropriate.
    (2) Thereafter, the agency shall, within a reasonable period of time 
not to exceed 120 days, undertake such procedures as are necessary in 
compliance with the Administrative Procedure Act and other applicable 
law to amend or rescind the collection of information, and shall notify 
the public through the Federal Register. Such notice shall identify the 
proposed changes in the collections of information and shall solicit 
public comment on retention, change, or rescission of such collections 
of information. If the agency employs notice and comment rulemaking 
procedures for amendment or rescission of the collection of information, 
publication of the above in the Federal Register and submission to OMB 
shall initiate OMB clearance procedures under section 3507(d) of the Act 
and Sec. 1320.11. All procedures shall be completed within a reasonable 
period of time to be determined by OMB in consultation with the agency.
    (g) OMB may disapprove, in whole or in part, any collection of 
information subject to the procedures of this section, if the agency:
    (1) Has refused within a reasonable time to comply with an OMB 
instruction to submit the collection of information for review;
    (2) Has refused within a reasonable time to initiate procedures to 
change the collection of information; or
    (3) Has refused within a reasonable time to publish a final rule 
continuing the collection of information, with such changes as may be 
appropriate, or otherwise complete the procedures for amendment or 
rescission of the collection of information.
    (h)(1) Upon disapproval by OMB of a collection of information 
subject to this section, except as provided in paragraph (f)(1)(iii) of 
this section, the OMB control number assigned to such collection of 
information shall immediately expire, and no agency shall conduct or 
sponsor such collection of information. Any such disapproval shall 
constitute disapproval of the collection of information contained in the 
Notice of Proposed Rulemaking or other submissions, and also of the 
preexisting information collection instruments directed at the same 
collection of information and therefore constituting essentially the 
same collection of information.
    (2) The failure to display a currently valid OMB control number for 
a collection of information contained in a current rule, or the failure 
to inform the potential persons who are to respond to the collection of 
information that such

[[Page 166]]

persons are not required to respond to the collection of information 
unless it displays a currently valid OMB control number, does not, as a 
legal matter, rescind or amend the rule; however, such absence will 
alert the public that either the agency has failed to comply with 
applicable legal requirements for the collection of information or the 
collection of information has been disapproved, and that therefore the 
portion of the rule containing the collection of information has no 
legal force and effect and the public protection provisions of 44 U.S.C. 
3512 apply.
    (i) Prior to the expiration of OMB's approval of a collection of 
information in a current rule, OMB may decide on its own initiative, 
after consultation with the agency, to review the collection of 
information. Such decisions will be made only when relevant 
circumstances have changed or the burden estimates provided by the 
agency at the time of initial submission were materially in error. Upon 
notification by OMB of its decision to review the collection of 
information, the agency shall submit it to OMB for review under this 
Part.



Sec. 1320.13  Emergency processing.

    An agency head or the Senior Official, or their designee, may 
request OMB to authorize emergency processing of submissions of 
collections of information.
    (a) Any such request shall be accompanied by a written determination 
that:
    (1) The collection of information:
    (i) Is needed prior to the expiration of time periods established 
under this Part; and
    (ii) Is essential to the mission of the agency; and
    (2) The agency cannot reasonably comply with the normal clearance 
procedures under this part because:
    (i) Public harm is reasonably likely to result if normal clearance 
procedures are followed;
    (ii) An unanticipated event has occurred; or
    (iii) The use of normal clearance procedures is reasonably likely to 
prevent or disrupt the collection of information or is reasonably likely 
to cause a statutory or court ordered deadline to be missed.
    (b) The agency shall state the time period within which OMB should 
approve or disapprove the collection of information.
    (c) The agency shall submit information indicating that it has taken 
all practicable steps to consult with interested agencies and members of 
the public in order to minimize the burden of the collection of 
information.
    (d) The agency shall set forth in the Federal Register notice 
prescribed by Sec. 1320.5(a)(1)(iv), unless waived or modified under 
this section, a statement that it is requesting emergency processing, 
and the time period stated under paragraph (b) of this section.
    (e) OMB shall approve or disapprove each such submission within the 
time period stated under paragraph (b) of this section, provided that 
such time period is consistent with the purposes of this Act.
    (f) If OMB approves the collection of information, it shall assign a 
control number valid for a maximum of 90 days after receipt of the 
agency submission.



Sec. 1320.14  Public access.

    (a) In order to enable the public to participate in and provide 
comments during the clearance process, OMB will ordinarily make its 
paperwork docket files available for public inspection during normal 
business hours. Notwithstanding other provisions of this Part, and to 
the extent permitted by law, requirements to publish public notices or 
to provide materials to the public may be modified or waived by the 
Director to the extent that such public participation in the approval 
process would defeat the purpose of the collection of information; 
jeopardize the confidentiality of proprietary, trade secret, or other 
confidential information; violate State or Federal law; or substantially 
interfere with an agency's ability to perform its statutory obligations.
    (b) Agencies shall provide copies of the material submitted to OMB 
for review promptly upon request by any person.
    (c) Any person may request OMB to review any collection of 
information

[[Page 167]]

conducted by or for an agency to determine, if, under this Act and this 
part, a person shall maintain, provide, or disclose the information to 
or for the agency. Unless the request is frivolous, OMB shall, in 
coordination with the agency responsible for the collection of 
information:
    (1) Respond to the request within 60 days after receiving the 
request, unless such period is extended by OMB to a specified date and 
the person making the request is given notice of such extension; and
    (2) Take appropriate remedial action, if necessary.



Sec. 1320.15  Independent regulatory agency override authority.

    (a) An independent regulatory agency which is administered by two or 
more members of a commission, board, or similar body, may by majority 
vote void:
    (1) Any disapproval, instruction to such agency to make material or 
substantive change to, or stay of the effectiveness of OMB approval of, 
any collection of information of such agency; or
    (2) An exercise of authority under Sec. 1320.10(g) concerning such 
agency.
    (b) The agency shall certify each vote to void such OMB action to 
OMB, and explain the reasons for such vote. OMB shall without further 
delay assign an OMB control number to such collection of information, 
valid for the length of time requested by the agency, up to three years, 
to any collection of information as to which this vote is exercised. No 
override shall become effective until the independent regulatory agency, 
as provided in Sec. 1320.5(b) and Sec. 1320.6(2), has displayed the 
OMB control number and informed the potential persons who are to respond 
to the collection of information that such persons are not required to 
respond to the collection of information unless it displays a currently 
valid OMB control number.



Sec. 1320.16  Delegation of approval authority.

    (a) OMB may, after complying with the notice and comment procedures 
of the Administrative Procedure Act, delegate OMB review of some or all 
of an agency's collections of information to the Senior Official, or to 
the agency head with respect to those components of the agency for which 
he or she has not delegated authority.
    (b) No delegation of review authority shall be made unless the 
agency demonstrates to OMB that the Senior Official or agency head to 
whom the authority would be delegate:
    (1) Is sufficiently independent of program responsibility to 
evaluate fairly whether proposed collections of information should be 
approved;
    (2) Has sufficient resources to carry out this responsibility 
effectively; and
    (3) Has established an agency review process that demonstrates the 
prompt, efficient, and effective performance of collection of 
information review responsibilities.
    (c) OMB may limit, condition, or rescind, in whole or in part, at 
any time, such delegations of authority, and reserves the right to 
review any individual collection of information, or part thereof, 
conducted or sponsored by an agency, at any time.
    (d) Subject to the provisions of this part, and in accordance with 
the terms and conditions of each delegation as specified in appendix A 
to this part, OMB delegates review and approval authority to the 
following agencies:
    (1) Board of Governors of the Federal Reserve System; and
    (2) Managing Director of the Federal Communications Commission.



Sec. 1320.17  Information collection budget.

    Each agency's Senior Official, or agency head in the case of any 
agency for which the agency head has not delegated responsibility under 
the Act for any component of the agency to the Senior Official, shall 
develop and submit to OMB, in such form, at such time, and in accordance 
with such procedures as OMB may prescribe, an annual comprehensive 
budget for all collections of information from the public to be 
conducted in the succeeding twelve months. For good cause, OMB may 
exempt any agency from this requirement.

[[Page 168]]



Sec. 1320.18  Other authority.

    (a) OMB shall determine whether any collection of information or 
other matter is within the scope of the Act, or this Part.
    (b) In appropriate cases, after consultation with the agency, OMB 
may initiate a rulemaking proceeding to determine whether an agency's 
collection of information is consistent with statutory standards. Such 
proceedings shall be in accordance with the informal rulemaking 
procedures of the Administrative Procedure Act.
    (c) Each agency is responsible for complying with the information 
policies, principles, standards, and guidelines prescribed by OMB under 
this Act.
    (d) To the extent permitted by law, OMB may waive any requirements 
contained in this part.
    (e) Nothing in this part shall be interpreted to limit the authority 
of OMB under this Act, or any other law. Nothing in this part or this 
Act shall be interpreted as increasing or decreasing the authority of 
OMB with respect to the substantive policies and programs of the 
agencies.

  Appendix A to Part 1320--Agencies With Delegated Review and Approval 
                                Authority

         1. The Board of Governors of the Federal Reserve System

    (a) Authority to review and approve collection of information 
requests, collection of information requirements, and collections of 
information in current rules is delegated to the Board of Governors of 
the Federal Reserve System.
    (1) This delegation does not include review and approval authority 
over any new collection of information or any modification to an 
existing collection of information that:
    (i) Is proposed to be collected as a result of a requirement or 
other mandate of the Federal Financial Institutions Examination Council, 
or other Federal executive branch entities with authority to require the 
Board to conduct or sponsor a collection of information.
    (ii) Is objected to by another Federal agency on the grounds that 
agency requires information currently collected by the Board, that the 
currently collected information is being deleted from the collection, 
and the deletion will have a serious adverse impact on the agency's 
program, provided that such objection is certified to OMB by the head of 
the Federal agency involved, with a copy to the Board, before the end of 
the comment period specified by the Board on the Federal Register 
notices specified in paragraph (1)(3)(i) of this section 1.
    (iii) Would cause the burden of the information collections 
conducted or sponsored by the Board to exceed by the end of the fiscal 
year the Information Collection Budget allowance set by the Board and 
OMB for the fiscal year-end.
    (2) The Board may ask that OMB review and approve collections of 
information covered by this delegation.
    (3) In exercising delegated authority, the Board will:
    (i) Provide the public, to the extent possible and appropriate, with 
reasonable opportunity to comment on collections of information under 
review prior to taking final action approving the collection. Reasonable 
opportunity for public comment will include publishing a notice in the 
Federal Register informing the public of the proposed collection of 
information, announcing the beginning of a 60-day public comment period, 
and the availability of copies of the ``clearance package,'' to provide 
the public with the opportunity to comment. Such Federal Register 
notices shall also advise the public that they may also send a copy of 
their comments to the Federal Reserve Board and to the OMB/OIRA Desk 
Officer.
    (A) Should the Board determine that a new collection of information 
or a change in an existing collection must be instituted quickly and 
that public participation in the approval process would defeat the 
purpose of the collection or substantially interfere with the Board's 
ability to perform its statutory obligation, the Board may temporarily 
approve of the collection of information for a period not to exceed 90 
days without providing opportunity for public comment.
    (B) At the earliest practical date after approving the temporary 
extension to the collection of information, the Board will publish a 
Federal Register notice informing the public of its approval of the 
collection of information and indicating why immediate action was 
necessary. In such cases, the Board will conduct a normal delegated 
review and publish a notice in the Federal Register soliciting public 
comment on the intention to extend the collection of information for a 
period not to exceed three years.
    (ii) Provide the OMB/OIRA Desk Officer for the Federal Reserve Board 
with a copy of the Board's Federal Register notice not later than the 
day the Board files the notice with the Office of the Federal Register.
    (iii) Assure that approved collections of information are reviewed 
not less frequently than once every three years, and that such reviews 
are normally conducted before the expiration date of the prior approval. 
Where

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the review has not been completed prior to the expiration date, the 
Board may extend the report, for up to three months, without public 
notice in order to complete the review and consequent revisions, if any. 
There may also be other circumstances in which the Board determines that 
a three-month extension without public notice is appropriate.
    (iv) Take every reasonable step to conduct the review established 
under 5 CFR 1320.8, including the seeking of public comment under 5 CFR 
1320.8(d). In determining whether to approve a collection of 
information, the Board will consider all comments received from the 
public and other agencies. The Board will not approve a collection of 
information that it determines does not satisfy the guidelines set forth 
in 5 CFR 1320.5(d)(2), unless it determines that departure from these 
guidelines is necessary to satisfy statutory requirements or other 
substantial need.
    (v)(A) Assure that each approved collection of information displays, 
as required by 5 CFR 1320.6, a currently valid OMB control number and 
the fact that a person is not required to respond to a collection of 
information unless it displays a currently valid OMB control number.
    (B) Assure that all collections of information, except those 
contained in regulations, display the expiration date of the approval, 
or, in case the expiration date has been omitted, explain the decision 
that it would not be appropriate, under 5 CFR 1320.5(a)(1)(iii)(C), for 
a proposed collection of information to display an expiration date.
    (C) Assure that each collection of information, as required by 5 CFR 
1320.8(b)(3), informs and provides fair notice to the potential 
respondents of why the information is being collected; the way in which 
such information is to be used; the estimated burden; whether responses 
are voluntary, required to obtain or retain a benefit, or mandatory; the 
confidentiality to be provided; and the fact that an agency may not 
conduct or sponsor, and the respondent is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.
    (vi) Assure that each approved collection of information, together 
with a completed form OMB 83-I, a supporting statement, a copy of each 
comment received from the public and other agencies in response to the 
Board's Federal Register notice or a summary of these comments, the 
certification required by 5 CFR 1320.9, and a certification that the 
Board has approved of the collection of information in accordance with 
the provisions of this delegation is transmitted to OMB for 
incorporation into OMB's public docket files. Such transmittal shall be 
made as soon as practical after the Board has taken final action 
approving the collection. However, no collection of information may be 
instituted until the Board has delivered this transmittal to OMB.
    (b) OMB will:
    (1) Provide the Board in advance with a block of control numbers 
which the Board will assign in sequential order to and display on, new 
collections of information.
    (2) Provide a written notice of action to the Board indicating that 
the Board approvals of collections of information that have been 
received by OMB and incorporated into OMB's public docket files and an 
inventory of currently approved collections of information.
    (3) Review any collection of information referred by the Board in 
accordance with the provisions of section 1(a)(2) of this Appendix.
    (c) OMB may review the Board's paperwork review process under the 
delegation. The Board will cooperate in carrying out such a review. The 
Board will respond to any recommendations resulting from such review 
and, if it finds the recommendations to be appropriate, will either 
accept the recommendations or propose an alternative approach to achieve 
the intended purpose.
    (d) This delegation may, as provided by 5 CFR 1320.16(c), be 
limited, conditioned, or rescinded, in whole or in part at any time. OMB 
will exercise this authority only in unusual circumstances and, in those 
rare instances, will do so, subject to the provisions of 5 CFR 
1320.10(f) and 1320.10(g), prior to the expiration of the time period 
set for public comment in the Board's Federal Register notices and 
generally only if:
    (1) Prior to the commencement of a Board review (e.g., during the 
review for the Information Collection Budget). OMB has notified the 
Board that it intends to review a specific new proposal for the 
collection of information or the continued use (with or without 
modification) of an existing collection;
    (2) There is substantial public objection to a proposed information 
collection: or
    (3) OMB determines that a substantially inadequate and inappropriate 
lead time has been provided between the final announcement date of the 
proposed requirement and the first date when the information is to be 
submitted or disclosed. When OMB exercises this authority it will 
consider that the period of its review began the date that OMB received 
the Federal Register notice provided for in section 1(a)(3)(i) of this 
Appendix.
    (e) Where OMB conducts a review of a Board information collection 
proposal under section 1(a)(1), 1(a)(2), or 1(d) of this Appendix, the 
provisions of 5 CFR 1320.13 continue to apply.

    2. The Managing Director of the Federal Communications Commission

    (a) Authority to review and approve currently valid (OMB-approved) 
collections of

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information, including collections of information contained in existing 
rules, that have a total annual burden of 5,000 hours or less and a 
burden of less than 500 hours per respondent is delegated to the 
Managing Director of the Federal Communications Commission.
    (1) This delegation does not include review and approval authority 
over any new collection of information, any collections whose approval 
has lapsed, any substantive or material modification to existing 
collections, any reauthorization of information collections employing 
statistical methods, or any information collections that exceed a total 
annual burden of 5,000 hours or an estimated burden of 500 hours per 
respondent.
    (2) The Managing Director may ask that OMB review and approve 
collections of information covered by the delegation.
    (3) In exercising delegated authority, the Managing Director will:
    (i) Provide the public, to the extent possible and appropriate, with 
reasonable opportunity to comment on collections of information under 
review prior to taking final action on reauthorizing an existing 
collection. Reasonable opportunity for public comment will include 
publishing a notice in the Federal Register and an FCC Public Notice 
informing the public that a collection of information is being extended 
and announcing the beginning of a 60-day comment period, notifying the 
public of the ``intent to extend an information collection,'' and 
providing the public with the opportunity to comment on the need for the 
information, its practicality, the accuracy of the agency's burden 
estimate, and on ways to minimize burden, including the use of 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses. Such notices shall advise the public 
that they may also send a copy of their comments to the OMB/Office of 
Information and Regulatory Affairs desk officer for the Commission.
    (A) Should the Managing Director determine that a collection of 
information that falls within the scope of this delegation must be 
reauthorized quickly and that public participation in the 
reauthorization process interferes with the Commission's ability to 
perform its statutory obligation, the Managing Director may temporarily 
reauthorize the extension of an information collection, for a period not 
to exceed 90 days, without providing opportunity for public comment.
    (B) At the earliest practical date after granting this temporary 
extension to an information collection, the Managing Director will 
conduct a normal delegated review and publish a Federal Register notice 
soliciting public comment on its intention to extend the collection of 
information for a period not to exceed three years.
    (ii) Assure that approved collections of information are reviewed 
not less frequently than once every three years and that such reviews 
are conducted before the expiration date of the prior approval. When the 
review is not completed prior to the expiration date, the Managing 
Director will submit the lapsed information collection to OMB for review 
and reauthorization.
    (iii) Assure that each reauthorized collection of information 
displays an OMB control number and, except for those contained in 
regulations or specifically designated by OMB, displays the expiration 
date of the approval.
    (iv) Inform and provide fair notice to the potential respondents, as 
required by 5 CFR 1320.8(b)(3), of why the information is being 
collected; the way in which such information is to be used; the 
estimated burden; whether responses are voluntary, required, required to 
obtain or retain a benefit, or mandatory; the confidentiality to be 
provided; and the fact that an agency may not conduct or sponsor, and 
the respondent is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.
    (v) Transmit to OMB for incorporation into OMB's public docket 
files, a report of delegated approval certifying that the Managing 
Director has reauthorized each collection of information in accordance 
with the provisions of this delegation. The Managing Director shall also 
make the certification required by 5 CFR 1320.9, e.g., that the approved 
collection of information reduces to the extent practicable and 
appropriate, the burden on respondents, including, for small business, 
local government, and other small entities, the use of the techniques 
outlined in the Regulatory Flexibility Act. Such transmittals shall be 
made no later than 15 days after the Managing Director has taken final 
action reauthorizing the extension of an information collection.
    (vi) Ensure that the personnel in the Commission's functional 
bureaus and offices responsible for managing information collections 
receive periodic training on procedures related to meeting the 
requirements of this part and the Act.
    (b) OMB will:
    (1) Provide notice to the Commission acknowledging receipt of the 
report of delegated approval and its incorporation into OMB's public 
docket files and inventory of currently approved collections of 
information.
    (2) Act upon any request by the Commission to review a collection of 
information referred by the Commission in accordance with the provisions 
of section 2(a)(2) of this appendix.
    (3) Periodically assess, at its discretion, the Commission's 
paperwork review process as administered under the delegation. The

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Managing Director will cooperate in carrying out such an assessment. The 
Managing Director will respond to any recommendations resulting from 
such a review and, if it finds the recommendations to be appropriate, 
will either accept the recommendation or propose an alternative approach 
to achieve the intended purpose.
    (c) This delegation may, as provided by 5 CFR 1320.16(c), be 
limited, conditioned, or rescinded, in whole or in part at any time. OMB 
will exercise this authority only in unusual circumstances.

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 SUBCHAPTER C_JOINT REGULATIONS WITH THE OFFICE OF PERSONNEL MANAGEMENT



PART 1330_HUMAN RESOURCES MANAGEMENT--Table of Contents




Subparts A-C [Reserved]

     Subpart D_Performance Appraisal Certification for Pay Purposes

Sec.
1330.401 Purpose.
1330.402 Definitions.
1330.403 System certification.
1330.404 Certification criteria.
1330.405 Procedures for certifying agency appraisal systems.

    Authority: 5 U.S.C. 5307(d).

    Source: 69 FR 45550, 45551, July 29, 2004, unless otherwise noted.

Subparts A-C [Reserved]



     Subpart D_Performance Appraisal Certification for Pay Purposes

    Note to Subpart D: Regulations identical to this subpart appear at 5 
CFR part 430, subpart D.



Sec. 1330.401  Purpose.

    (a) This subpart implements 5 U.S.C. 5307(d), as added by section 
1322 of the Chief Human Capital Officers Act of 2002 (Title XIII of 
Public Law 107-296, the Homeland Security Act of 2002; November 25, 
2002), which provides a higher aggregate limitation on pay for certain 
members of the Senior Executive Service (SES) under 5 U.S.C. 5382 and 
5383 and employees in senior-level (SL) and scientific or professional 
(ST) positions paid under 5 U.S.C. 5376. In addition, this subpart is 
necessary to administer rates of basic pay for members of the SES under 
5 U.S.C. 5382, as amended by section 1125 of the National Defense 
Authorization Act for Fiscal Year 2004. The regulations in this subpart 
strengthen the application of pay-for-performance principles to senior 
executives and senior professionals. Specifically, the statutory 
provisions authorize an agency to apply a higher maximum rate of basic 
pay for senior executives (consistent with 5 CFR part 534, subpart D, 
when effective) and apply a higher aggregate limitation on pay 
(consistent with 5 CFR part 530, subpart B) to its senior employees, but 
only after OPM, with OMB concurrence, has certified that the design and 
application of the agency's appraisal systems for these employees make 
meaningful distinctions based on relative performance. This subpart 
establishes the certification criteria and procedures that OPM will 
apply in considering agency requests for such certification.
    (b) Senior executives generally may receive an annual rate of basic 
pay up to the rate for level III of the Executive Schedule under 5 
U.S.C. 5382 and 5 CFR part 534, subpart D, when effective. Senior 
employees generally may receive total compensation in a calendar year up 
to the rate for level I of the Executive Schedule under 5 U.S.C. 5307(a) 
and 5 CFR 530.203(a). Only employees covered by an appraisal system that 
OPM, with OMB concurrence, certifies under this subpart are eligible for 
a maximum annual rate of basic pay for senior executives up to the rate 
for level II of the Executive Schedule (consistent with 5 U.S.C. 5382 
and 5 CFR part 534, subpart D, when effective) and a higher aggregate 
pay limitation equivalent to the total annual compensation payable to 
the Vice President (consistent with 5 U.S.C. 5307(d) and 5 CFR 
530.203(b)).



Sec. 1330.402  Definitions.

    In this subpart--
    Appraisal system means the policies, practices, and procedures an 
agency establishes under 5 U.S.C. chapter 43 and 5 CFR part 430, 
subparts B and C, or other applicable legal authority, for planning, 
monitoring, developing, evaluating, and rewarding employee performance. 
This includes appraisal systems and appraisal programs as defined at 
Sec. 430.203 and performance management systems as defined at Sec. 
430.303.
    GPRA means the Government Performance and Results Act of 1993.

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    OMB means the Office of Management and Budget.
    OPM means the Office of Personnel Management.
    Outstanding performance means performance that substantially exceeds 
the normally high performance expected of any senior employee, as 
evidenced by exceptional accomplishments or contributions to the 
agency's performance.
    Performance evaluation means the comparison of the actual 
performance of senior employees against their performance expectations 
and may take into account their contribution to agency performance, 
where appropriate.
    Performance expectations means critical and other performance 
elements and performance requirements that constitute the senior 
executive performance plans (as defined in Sec. 430.303) established 
for senior executives, the performance elements and standards that 
constitute the performance plans (as defined in Sec. 430.203) 
established for senior professionals, or other appropriate means 
authorized under performance appraisal systems not covered by 5 U.S.C. 
chapter 43 for communicating what a senior employee is expected to do 
and the manner in which he/she is expected to do it, and may include 
contribution to agency performance, where appropriate.
    Program performance measures means results-oriented measures of 
performance, whether at the agency, component, or function level, which 
include, for example, measures under the Government Performance and 
Results Act.
    PRB means Performance Review Board, as described at Sec. 430.310.
    Relative performance means the performance of a senior employee with 
respect to the performance of other senior employees, including their 
contribution to agency performance, where appropriate, as determined by 
the application of a certified appraisal system.
    Senior employee means a senior executive or a senior professional.
    Senior executive means a member of the Senior Executive Service 
(SES) paid under 5 U.S.C. 5383.
    Senior professional means an employee in a senior-level (SL) or 
scientific or professional position (ST) paid under 5 U.S.C. 5376.



Sec. 1330.403  System certification.

    (a) The performance appraisal system(s) covering senior employees 
must be certified by OPM, with OMB concurrence, as making meaningful 
distinctions based on relative performance before an agency may apply a 
maximum annual rate of basic pay for senior executives equal to the rate 
for level II of the Executive Schedule or apply an annual aggregate 
limitation on payments to senior employees equal to the salary of the 
Vice President under 5 U.S.C. 5307(d)). OPM, with OMB concurrence, will 
certify an agency's appraisal system(s) only when a review of that 
system's design, application, and administration reveals that the agency 
meets the certification criteria established in Sec. 1330.404 and has 
followed the procedures for certifying agency appraisal systems in Sec. 
1330.405.
    (b) Except as provided in paragraph (c) of this section, agencies 
subject to 5 U.S.C. chapter 43 and 5 CFR part 430 seeking certification 
of their appraisal systems must submit systems that have been approved 
by OPM under Sec. 430.312 or Sec. 430.210, as applicable. In some 
agencies, the performance appraisal system(s) covers employees in many 
organizations and/or components, and their ability to meet the 
certification criteria in Sec. 1330.404 may vary significantly. In such 
cases, an agency may establish and/or submit separate performance 
appraisal systems for each of these distinct organizations and/or 
components to ensure timely certification of those performance appraisal 
system(s) that meet the criteria. New appraisal systems established 
under 5 CFR part 430, subpart B or C, as applicable based on the 
employees covered, must be approved by OPM.
    (c) When an agency establishes a new appraisal system for the 
purpose of seeking certification under this subpart, the agency may 
submit that system for certification even if it has not yet been 
approved by OPM under Sec. 430.312 or Sec. 430.210, as applicable. OPM 
will certify, with OMB concurrence, only those systems that OPM 
determines meet the approval requirements

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of 5 CFR part 430, subpart B or C, as applicable.
    (d) An agency must establish an appraisal system(s), as defined in 
Sec. 1330.402, for its senior professionals that meets the requirements 
of 5 CFR part 430, subpart B, and is separate from the system(s) 
established to cover its SES members under 5 CFR part 430, subpart C. 
For the purpose of certification under this subpart, such senior 
professional appraisal system(s) must meet the certification criteria 
set forth in Sec. 1330.404. At its discretion, an agency may include 
system features in its senior professional appraisal system(s) that are 
the same as, or similar to, the features of its SES appraisal system(s), 
as appropriate, including procedures that correspond to the higher level 
review procedures under Sec. 430.308(b) and PRB reviews of summary 
ratings under Sec. 430.308(c).
    (e) For agencies subject to 5 U.S.C. chapter 43 and 5 CFR part 430, 
OPM approval of the agency performance appraisal system(s) is a 
prerequisite to certification. Agencies not subject to the appraisal 
provisions of 5 U.S.C. chapter 43 and 5 CFR part 430 and which are 
seeking certification of their appraisal system(s) under this subpart 
must submit appropriate documentation to demonstrate that each system 
complies with the appropriate legal authority that governs the 
establishment, application, and administration of that system.



Sec. 1330.404  Certification criteria.

    (a) To be certified, an agency's applicable appraisal system(s) for 
senior executives or senior professionals must make meaningful 
distinctions based on relative performance and meet the other 
requirements of 5 U.S.C. chapter 43, as applicable, in addition to the 
particular criterion cited here (i.e., consultation). Such system(s) 
must provide for the following:
    (1) Alignment, so that the performance expectations for individual 
senior employees derive from, and clearly link to, the agency's mission, 
GPRA strategic goals, program and policy objectives, and/or annual 
performance plans and budget priorities;
    (2) Consultation, so that the performance expectations for senior 
employees meet the requirements of 5 CFR part 430, subparts B and C, as 
applicable, and/or other applicable legal authority; are developed with 
the input and involvement of the individual senior employees who are 
covered thereby; and are communicated to them at the beginning of the 
applicable appraisal period, and/or at appropriate times thereafter;
    (3) Results, so that the performance expectations for individual 
senior employees apply to their respective areas of responsibility; 
reflect expected agency and/or organizational outcomes and outputs, 
performance targets or metrics, policy/program objectives, and/or 
milestones; identify specific programmatic crosscutting, external, and 
partnership-oriented goals or objectives, as applicable; and are stated 
in terms of observable, measurable, and/or demonstrable performance;
    (4) Balance, so that in addition to expected results, the 
performance expectations for individual senior employees include 
appropriate measures or indicators of employee and/or customer/
stakeholder feedback; quality, quantity, timeliness, and cost 
effectiveness, as applicable; and those technical, leadership and/or 
managerial competencies or behaviors that contribute to and are 
necessary to distinguish outstanding performance;
    (5) Appropriate assessments of the agency's performance--overall and 
with respect to each of its particular missions, components, programs, 
policy areas, and support functions--such as reports of the agency's 
GPRA goals, annual performance plans and targets, program performance 
measures, and other appropriate indicators, as well as evaluation 
guidelines based, in part, upon those assessments, that are communicated 
by the agency head, or an individual specifically designated by the 
agency head for such purpose, to senior employees, appropriate senior 
employee rating and reviewing officials, and PRB members. These 
assessments and guidelines are to be provided at the conclusion of the 
appraisal period but before individual senior employee performance 
ratings are recommended, so that they may serve as a basis for 
individual performance evaluations, as appropriate. The guidance

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provided may not take the form of quantitative limitations on the number 
of ratings at any given rating level, and must conform to 5 CFR part 
430, subpart B or C, as applicable;
    (6) Oversight by the agency head or the individual specifically 
designated under paragraph (a)(5) of this section, who certifies, for a 
particular senior employee appraisal system, that--
    (i) The senior employee appraisal process makes meaningful 
distinctions based on relative performance;
    (ii) The results of the senior employee appraisal process take into 
account, as appropriate, the agency's assessment of its performance 
against program performance measures, as well as other relevant 
considerations; and
    (iii) Pay adjustments, cash awards, and levels of pay based on the 
results of the appraisal process accurately reflect and recognize 
individual performance and/or contribution to the agency's performance;
    (7) Accountability, so that final agency head decisions and any PRB 
recommendations regarding senior employee ratings consistent with 5 CFR 
part 430, subparts B and C, individually and overall, appropriately 
reflect the employee's performance expectations, relevant program 
performance measures, and such other relevant factors as the PRB may 
find appropriate; in the case of supervisory senior employees, ratings 
must reflect the degree to which performance standards, requirements, or 
expectations for individual subordinate employees clearly link to 
organizational mission, GPRA strategic goals, or other program or policy 
objectives and take into account the degree of rigor in the appraisal of 
their subordinate employees;
    (8) Performance differentiation, so that the system(s) includes at 
least one summary level of performance above fully successful, including 
a summary level that reflects outstanding performance, as defined in 
Sec. 1330.402, and so that its annual administration results in 
meaningful distinctions based on relative performance that take into 
account the assessment of the agency's performance against relevant 
program performance measures, as described in paragraph (a)(6) of this 
section, employee performance expectations, and such other relevant 
factors as may be appropriate. Relative performance does not require 
ranking senior employees against each other; such ranking is prohibited 
for the purpose of determining performance ratings. For equivalent 
systems that do not use summary ratings, the appraisal system must 
provide for clear differentiation of performance at the outstanding 
level; and
    (9) Pay differentiation, so that those senior employees who have 
demonstrated the highest levels of individual performance and/or 
contribution to the agency's performance receive the highest annual 
summary ratings or ratings of record, as applicable, as well as the 
largest corresponding pay adjustments, cash awards, and levels of pay, 
particularly above the rate for level III of the Executive Schedule. 
Agencies must provide for transparency in the processes for making pay 
decisions, while assuring confidentiality.
    (b) Consistent with the requirements in section 3(a) of the 
Inspector General Act of 1978, an agency's Inspector General or an 
official he or she designates must perform the functions listed in 
paragraphs (a)(5) and (6) of this section for senior employees in the 
Office of the Inspector General.



Sec. 1330.405  Procedures for certifying agency appraisal systems.

    (a) General. To receive system certification, an agency must provide 
documentation demonstrating that its appraisal system(s), in design, 
application, and administration, meets the certification criteria in 
Sec. 1330.404 as well as the procedural requirements set forth in this 
section.
    (b) Certification requests. In order for an agency's appraisal 
system to be certified, the head of the agency or designee must submit a 
written request for full or provisional certification of its appraisal 
system(s) to OPM. Certification requests may cover an agencywide system 
or a system that applies to one or more agency organizations or 
components and must include--
    (1) A full description of the appraisal system(s) to be certified, 
including--
    (i) Organizational and employee coverage information;

[[Page 176]]

    (ii) Applicable administrative instructions and implementing 
guidance; and
    (iii) The system's use of rating levels that are capable of clearly 
differentiating among senior employees based on appraisals of their 
relative performance against performance expectations in any given 
appraisal period reflecting performance evaluation results that make 
meaningful distinctions based on relative performance, and which 
include--
    (A) For the agency's senior executives covered by 5 CFR part 430, 
subpart C, at least four, but not more than five, summary rating 
levels--an outstanding level, a fully successful level, an optional 
level between outstanding and fully successful, a minimally satisfactory 
level, and an unsatisfactory level;
    (B) For the agency's senior professionals covered by 5 CFR part 430, 
subpart B, at least three, but not more than five, summary levels--an 
outstanding level, a fully successful level, an optional level between 
outstanding and fully successful, an unacceptable level, and an optional 
level between fully successful and unacceptable; and
    (C) For agencies not subject to 5 CFR part 430, subparts B and C, a 
summary rating level that reflects outstanding performance or a 
methodology that clearly differentiates outstanding performance, as 
defined in Sec. 1330.402;
    (2) A clearly defined process for reviewing--
    (i) The initial summary ratings and ratings of record, as 
applicable, of senior employees to ensure that annual summary ratings or 
ratings of record are not distributed arbitrarily or on a rotational 
basis, and
    (ii) In the case of senior employees with supervisory 
responsibilities--
    (A) The performance standards, requirements, or expectations for the 
employees they supervise to ensure that they clearly link to 
organizational mission, GPRA strategic goals, or other program and 
policy objectives, as appropriate, and
    (B) The performance standards, requirements, or expectations and the 
performance ratings of the employees they supervise to ensure that they 
reflect distinctions in individual and organizational performance, as 
appropriate;
    (3) Documentation showing that the appraisal system(s) meets the 
applicable certification criteria, as follows:
    (i) For provisional certification, the requirements in Sec. 
1330.404(a)(1)-(4); and
    (ii) For full certification, all of the requirements in Sec. 
1330.404.
    (4) For full certification, data on senior executive annual summary 
ratings and senior professional ratings of record, as applicable (or 
other documentation for agencies that do not use summary ratings), for 
the two appraisal periods preceding the request, as well as 
corresponding pay adjustments, cash awards, and levels of pay provided 
to those senior employees; and
    (5) Any additional information that OPM and OMB may require to make 
a determination regarding certification.
    (c) Certification actions. At the request of an agency, the Director 
of OPM, at his or her discretion and in accordance with the requirements 
of this subpart and with OMB concurrence, may grant full or provisional 
certification of the agency's appraisal system(s). OPM, with OMB 
concurrence, may--
    (1) Grant full certification of an agency's senior employee 
appraisal system(s) for 2 calendar years when an agency has demonstrated 
that it has designed and fully implemented and applied an appraisal 
system(s) for its senior executives or senior professionals, as 
applicable, that meets the certification criteria in Sec. 1330.404 and 
the documentation requirements of this section.
    (2) Grant provisional certification of an agency's senior employee 
appraisal system(s) for 1 calendar year when an agency has designed, but 
not yet fully implemented or applied, an appraisal system(s) for its 
senior executives or senior professionals, as applicable, that meets the 
certification criteria in Sec. 1330.404. OPM may extend provisional 
certification into the following calendar year in order to permit an 
agency to take any actions needed to adjust pay based on annual summary 
ratings, ratings of record, or other performance appraisal results 
determined during the

[[Page 177]]

calendar year for which the system was certified; or
    (3) Suspend certification under paragraph (h) of this section if, at 
any time during the certification period, OPM, with OMB concurrence, 
determines that the agency appraisal system is not in compliance with 
certification criteria.
    (d) Pay limitations. Absent full or provisional certification of its 
appraisal system(s), an agency must--
    (1) Set a senior executive's rate of basic pay at a rate that does 
not exceed the rate for level III of the Executive Schedule, consistent 
with 5 CFR part 534, subpart D, when effective; and
    (2) Limit aggregate compensation paid to senior employees in a 
calendar year to the rate for level I of the Executive Schedule, 
consistent with 5 CFR 530.203(b).
    (e) Full certification. (1) OPM, with OMB concurrence, may grant 
full certification when a review of the agency's request and 
accompanying documentation demonstrates that the design, application, 
and administration of the agency's appraisal system(s) meet the criteria 
in Sec. 1330.404 and the documentation requirements of this section.
    (2) An agency with a fully-certified appraisal system(s) may set the 
rate of basic pay under 5 CFR part 534, subpart D, when effective, for a 
senior executive covered by a certified system at a rate that does not 
exceed the rate for level II of the Executive Schedule and pay senior 
employees covered by certified system(s) aggregate compensation in a 
certified calendar year in an amount up to the Vice President's salary 
under 3 U.S.C. 104.
    (3) Full certification of an agency's appraisal system will be 
renewed automatically for an additional 2 calendar years, if--
    (i) The agency meets the annual reporting requirements in paragraph 
(g) of this section; and
    (ii) Based on those annual reports, OPM determines, and OMB concurs, 
that the appraisal system(s) continues to meet the certification 
criteria and procedural requirements set forth in this subpart.
    (f) Provisional certification. (1) OPM, with OMB concurrence, may 
grant provisional certification when the design of an agency's appraisal 
system(s) for senior executives or senior professionals, as applicable, 
meets the requirements set forth in this subpart, but insufficient 
documentation exists to determine whether the actual application and 
administration of the appraisal system(s) meet the requirements for full 
certification. OPM, with OMB concurrence, may grant provisional 
certification to an agency more than once.
    (2) During the 1-year period of provisional certification, an agency 
may set the rate of basic pay for a senior executive covered by the 
provisionally certified system at a rate that does not exceed the rate 
for level II of the Executive Schedule (consistent with 5 CFR part 534, 
subpart D, when effective) and pay senior employees covered by 
provisionally certified systems aggregate compensation in the certified 
calendar year in an amount up to the Vice President's salary under 3 
U.S.C. 104 (consistent with 5 CFR part 530, subpart B).
    (3) An agency must resubmit an application requesting provisional 
certification for every calendar year for which it intends to maintain 
provisional certification. An agency with a provisionally certified 
appraisal system(s) may request that OPM, with OMB concurrence, grant 
full certification upon a showing that its performance appraisal systems 
for senior executives and senior professionals, as applicable, meet the 
certification criteria in Sec. 1330.404 and the documentation 
requirements in this section, particularly with respect to the 
implementation and administration of the system(s) over at least two 
consecutive performance appraisal periods.
    (g) Annual reporting requirement. Agencies with certified appraisal 
systems must provide OPM with a general summary of the annual summary 
ratings and ratings of record, as applicable, and rates of basic pay, 
pay adjustments, cash awards, and aggregate total compensation 
(including any lump-sum payments in excess of the applicable aggregate 
limitation on pay that were paid in the current calendar year as 
required by Sec. 530.204) for their senior employees covered by a 
certified

[[Page 178]]

appraisal system at the conclusion of each appraisal period that ends 
during a calendar year for which the certification is in effect, in 
accordance with OPM instructions.
    (h) Suspension of certification. (1) When OPM determines that an 
agency's certified appraisal system is no longer in compliance with 
certification criteria, OPM, with OMB concurrence, may suspend such 
certification, as provided in paragraph (c)(3) of this section.
    (2) An agency's system certification is automatically suspended when 
OPM withdraws performance appraisal system approval or mandates 
corrective action because of misapplication of the system as authorized 
under Sec. Sec. 430.210(c), 430.312(c), and 1330.403(e).
    (3) OPM will notify the head of the agency at least 30 calendar days 
in advance of the suspension and the reason(s) for the suspension, as 
well as any expected corrective action. Upon such notice, and until its 
system certification is reinstated, the agency must set a senior 
executive's rate of basic pay under 5 CFR part 534, subpart D, when 
effective, at a rate that does not exceed the rate for level III of the 
Executive Schedule. While certification is suspended, an agency must 
limit aggregate compensation received in a calendar year by a senior 
employee to the rate for level I of the Executive Schedule. Pay 
adjustments, cash awards, and levels of pay in effect prior to that 
notice will remain in effect unless OPM finds that any such decision and 
subsequent action was in violation of law, rule, or regulation.
    (4) OPM, with OMB concurrence, may reinstate an agency's suspended 
certification only after the agency has taken appropriate corrective 
action.
    (5) OPM may reinstate the certification of an appraisal system that 
has been automatically suspended under paragraph (h)(2) of this section 
upon the agency's compliance with the applicable OPM-mandated corrective 
action(s).

[[Page 179]]



   CHAPTER V--THE INTERNATIONAL ORGANIZATIONS EMPLOYEES LOYALTY BOARD




  --------------------------------------------------------------------
Part                                                                Page
1501            Operations of the International 
                    Organizations Employees Loyalty Board...         181

[[Page 181]]



PART 1501_OPERATIONS OF THE INTERNATIONAL ORGANIZATIONS EMPLOYEES LOYALTY 

BOARD--Table of Contents




Sec.
1501.1 Name.
1501.2 Officers.
1501.3 Duties of officers.
1501.4 Hearings.
1501.5 Panels of the Board.
1501.6 Quorum.
1501.7 Authority and responsibility of the Board.
1501.8 Grounds for determinations of the Board.
1501.9 Cases reviewable by the Board.
1501.10 Consideration of reports of investigation.
1501.11 Consideration of complete file before hearing.
1501.12 Obtaining further information.
1501.13 Conduct of hearings.
1501.14 Decision of the Board.
1501.15 Transmission of Determination to the Secretary of State.
1501.16 Notification of individual concerned.

    Authority: E.O. 10422, as amended; 3 CFR, 1949-1953 Comp., p. 921.

    Source: 18 FR 6371, Oct. 7, 1953, unless otherwise noted.



Sec. 1501.1  Name.

    This Board shall be known as the International Organizations 
Employees Loyalty Board, and any reference to the ``Board'' in this part 
shall mean such International Organizations Employees Loyalty Board.



Sec. 1501.2  Officers.

    The officers of the Board shall consist of a chairman, a vice-
chairman to be designated by the chairman, and an executive secretary to 
be appointed by the Board.



Sec. 1501.3  Duties of officers.

    (a) The Chairman. The chairman shall perform all the duties usually 
pertaining to the office of chairman, including presiding at Board 
meetings, supervising the administrative work of the Board, and 
conducting its correspondence. He shall be authorized to call special 
meetings of the Board, when in his judgment, such meetings are necessary 
and shall call such meetings at the written request of three members of 
the Board. The time and place of such meetings shall be fixed by the 
chairman. The chairman shall constitute such panels of the Board as may 
be necessary or desirable to render advisory determinations and to 
conduct hearings, and he is authorized to appoint such committees as 
from time to time may be required to handle the work of the Board. The 
chairman may request the vice-chairman to assume the duties of the 
chairman in the event of the absence of the chairman or his inability to 
act.
    (b) The Vice-Chairman. The duties of the vice-chairman, when acting 
in the place of the chairman, shall be the same as the duties of the 
chairman.
    (c) The Executive-Secretary. The executive-secretary shall perform 
all of the duties customarily performed by an executive-secretary. He 
shall have immediate charge of the administrative duties of the Board 
under the direction of the chairman and shall have general 
responsibility for advising and assisting the Board members and 
exercising executive direction over the staff.



Sec. 1501.4  Hearings.

    No adverse determination shall be made without the opportunity for a 
hearing.



Sec. 1501.5  Panels of the Board.

    All hearings shall be held by panels of the Board, the 
determinations of which shall be the determinations of the Board. Such 
panels of the Board shall consist of not less than three members 
designated by the chairman. The chairman shall designate the Board 
member who shall be the presiding member and it shall be the duty of 
such presiding member to make due report to the Board of all acts and 
proceedings of the said panel.



Sec. 1501.6  Quorum.

    A majority of all the members of the Board shall constitute a quorum 
of the Board. Minutes shall be kept of the transactions of the Board in 
its meetings.



Sec. 1501.7  Authority and responsibility of the Board.

    The Board shall have the authority and responsibility to make rules 
and regulations, not inconsistent with the

[[Page 182]]

provisions of Executive Order 10422, as amended, for the execution of 
its functions and for making available to the Secretary General of the 
United Nations and the executive heads of other public international 
organizations certain information concerning United States citizens 
employed or being considered for employment by the United Nations or 
other public international organizations of which the United States is a 
member.



Sec. 1501.8  Grounds for determinations of the Board.

    (a) Standard. The standard to be used by the Board in making any 
advisory determination relating to the loyalty of a United States 
citizen who is an employee of, or is being considered for employment in, 
a public international organization of which the United States is a 
member, shall be whether or not on all the evidence there is a 
reasonable doubt as to the loyalty of the person involved to the 
Government of the United States.
    (b) Activities and associations. Among the activities and 
associations of the employee or person being considered for employment 
which may be considered in connection with a determination of disloyalty 
may be one or more of the following:
    (1) Sabotage, espionage, or attempts or preparations therefor, or 
knowingly associating with spies or saboteurs.
    (2) Treason or sedition or advocacy thereof.
    (3) Advocacy of revolution or force or violence to alter the 
constitutional form of government of the United States.
    (4) Intentional, unauthorized disclosure to any person, under 
circumstances which may indicate disloyalty to the United States, of 
United States documents or United States information of a confidential 
or non-public character obtained by the person making the disclosure as 
a result of his previous employment by the Government of the United 
States or otherwise.
    (5) Performing or attempting to perform his duties, or otherwise 
acting, while an employee of the United States Government during a 
previous period, so as to serve the interests of another government in 
preference to the interests of the United States.
    (6) Membership in, or affiliation or sympathetic association with, 
any foreign or domestic organization, association, movement, or group or 
combination of persons, designated by the Attorney General as 
totalitarian, fascist, communist, or subversive, or as having adopted a 
policy of advocating or approving the commission of acts of force or 
violence to deny other persons their rights under the Constitution of 
the United States, or as seeking to alter the form of government of the 
United States by unconstitutional means.



Sec. 1501.9  Cases reviewable by the Board.

    All cases in which an investigation has been made under Executive 
Order 10422, as amended, shall be referred to and reviewed by the Board 
in accordance with the Executive Order and the rules and regulations of 
the Board.



Sec. 1501.10  Consideration of reports of investigation.

    (a) In all cases the Board shall consider the reports of 
investigation in the light of the standard as set forth in Sec. 1501.8 
and shall determine whether such reports warrant a finding favorable to 
the individual or appear to call for further processing of the case with 
a view to a possible unfavorable determination.
    (b) If the Board reaches a favorable conclusion in a case involving 
a question of loyalty, it shall make a determination that on all the 
evidence there is not a reasonable doubt as to the individual's loyalty.
    (c) If the Board determines that the reports do not warrant a 
finding favorable to the individual, or the Board determines that the 
evidence is of such a nature that a hearing may be required before a 
final decision is made, the Board shall send by registered mail, or in 
such other manner as the Board in a particular case may decide, a 
written interrogatory to the individual. Such interrogatory shall state 
the nature of the evidence against him, setting forth with particularity 
the facts and circumstances involved, in as much detail as security 
conditions permit, in order

[[Page 183]]

to enable him to submit his answer, defense or explanation and to submit 
affidavits. It will also inform the applicant or employee, of his 
opportunity to reply to the interrogatory in writing, under oath or 
affirmation, within ten (10) calendar days of the date of receipt by him 
of the interrogatory or such longer time as the Board in specific cases 
may prescribe, and of his opportunity for a hearing on the issues before 
the Board or a panel of the Board, including his right to appear 
personally at such hearing, to be represented by counsel of a 
representative of his own choosing, to present evidence in his own 
behalf, and to cross-examine witnesses offered in support of the 
derogatory information.



Sec. 1501.11  Consideration of complete file before hearing.

    (a) Following delivery to the applicant or employee of the 
interrogatory and after expiration of the time limit for filing an 
answer to the interrogatory, the Board shall proceed to consider the 
case on the complete file, including the answer, if any, to the 
interrogatory.
    (b) If, upon such consideration, the Board concludes that a finding 
favorable to the individual may be made, no hearing shall be required.
    (c) If, upon such consideration, the Board concludes that a 
determination favorable to the individual cannot be made on the basis of 
the information in the file, it shall set a time and place for a hearing 
and shall give notice thereof to the individual.



Sec. 1501.12  Obtaining further information.

    At any stage in its review and consideration of a case, if the Board 
deems it advisable or necessary to obtain information or clarification 
of any matter, the Board may request further investigation, or submit a 
written questionnaire to the individual whose case is before the Board, 
or request such individual to furnish information in an oral interview.



Sec. 1501.13  Conduct of hearings.

    (a) Not less than three members of a panel of the Board shall be 
present at all hearings. The Board shall conduct its hearings in such 
manner as to protect from disclosure information affecting the national 
security. The chairman of the panel shall preside and be responsible for 
the maintenance of decorum and order in the hearing.
    (b) Attendance at hearings shall be limited to the applicant or 
employee, his attorney or representative, the panel of the Board 
assigned to the case, Board members, Board staff employees participating 
in the case, the witness who is testifying, and such other persons as in 
the opinion of the panel are required for the proper presentation of the 
case. Representation for an applicant or employee shall be limited to 
one attorney or representative and one bona fide assistant, both 
representing the applicant or employee only.
    (c) Hearings shall begin with the reading of the interrogatory. The 
applicant or employee shall thereupon be informed of his right to 
participate in the hearing, to be represented by counsel, to present 
witnesses and other evidence in his behalf, and to cross-examine 
witnesses offered in support of the derogatory information.
    (d) Testimony shall be given under oath or affirmation.
    (e) Strict legal rules of evidence shall not be applied at the 
hearings, but reasonable bounds shall be maintained as to competency, 
relevancy, and materiality and due allowance shall be made for the 
effect of any nondisclosure to the individual of information or the 
absence of any opportunity to cross-examine persons who supplied 
information but who do not appear and testify. Both the Government and 
the applicant or employee may introduce such evidence as the panel may 
deem proper in the particular case.
    (f) A complete verbatim stenographic transcript shall be made of the 
hearing, and the transcript shall constitute a permanent part of the 
record.
    (g) Applicants and employees must pay their own travel and 
subsistence expenses incident to attendance at hearings, except that the 
Board may authorize the payment of travel and subsistence expenses to 
applicants or employees when the hearing is held at a place other than 
the place outside the continental limits of the United States where the 
employee works, or

[[Page 184]]

the applicant resides, and such payment is considered in the interest of 
good administration and funds are available for this purpose.

[18 FR 6371, Oct. 7, 1953, as amended at 21 FR 5249, July 14, 1956]



Sec. 1501.14  Decision of the Board.

    After the employee or person being considered for employment has 
been given a hearing, the Board shall promptly make its decision. The 
determination of the Board shall be in writing and shall be signed by 
the members of the panel. It shall state the action taken, together with 
the reasons therefor, and shall be made a permanent part of the file in 
every case.



Sec. 1501.15  Transmission of Determination to the Secretary of State.

    The Board shall transmit its determination in each case to the 
Secretary of State for transmission to the Secretary General of the 
United Nations, or the executive head of any other public international 
organization concerned. In each case in which the Board determines that, 
on all the evidence, there is a reasonable doubt as to the loyalty of 
the person involved to the Government of the United States, it shall 
also transmit a statement of the reasons for the Board's determination 
in as much detail as the Board deems that security considerations 
permit.



Sec. 1501.16  Notification of individual concerned.

    A copy of the determination of the Board, but not of the statement 
of reasons, shall be furnished in each case to the person who is the 
subject thereof.

[[Page 185]]



         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD




  --------------------------------------------------------------------
Part                                                                Page
1600            Employee contribution elections and 
                    contribution allocations................         187
1601            Participants' choices of TSP Funds..........         190
1603            Vesting.....................................         192
1604            Uniformed services accounts.................         194
1605            Correction of administrative errors.........         198
1606

[Reserved]

1620            Expanded and continuing eligibility.........         209
1630            Privacy Act regulations.....................         216
1631            Availability of records.....................         224
1632            Rules regarding public observation of 
                    meetings................................         234
1633            Standards of conduct........................         238
1636            Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Federal 
                    Retirement Thrift Investment Board......         239
1639            Claims collection...........................         245
1640            Periodic participant statements.............         259
1645            Calculation of share prices.................         260
1650            Methods of withdrawing funds from the Thrift 
                    Savings Plan............................         262
1651            Death benefits..............................         272
1653            Court orders and legal processes affecting 
                    Thrift Savings Plan accounts............         277
1655            Loan program................................         286
1690            Thrift Savings Plan.........................         293

[[Page 187]]



PART 1600_EMPLOYEE CONTRIBUTION ELECTIONS AND CONTRIBUTION ALLOCATIONS--Table 

of Contents




                            Subpart A_General

Sec.
1600.1 Definitions.

                           Subpart B_Elections

1600.11 Types of elections.
1600.12 Contribution elections.
1600.13 Timing of agency contributions.
1600.14 Effect of transfer to FERS.

                   Subpart C_Program of Contributions

1600.21 Contributions in whole numbers.
1600.22 Maximum contributions.

        Subpart D_Transfers From Other Qualified Retirement Plans

1600.31 Accounts eligible for transfer.
1600.32 Methods for transferring eligible rollover distribution to TSP.
1600.33 Treatment accorded transferred funds.

    Authority: 5 U.S.C. 8351, 8432(a), 8432(b)(1)(A), 8432(j), 
8474(b)(5) and (c)(1).

    Source: 66 FR 22089, May 2, 2001, unless otherwise noted.



                            Subpart A_General



Sec. 1600.1  Definitions.

    Definitions generally applicable to the Thrift Savings Plan are set 
forth at 5 CFR 1690.1.

[68 FR 35494, June 13, 2003]



                           Subpart B_Elections



Sec. 1600.11  Types of elections.

    (a) Contribution elections. A contribution election must be made 
pursuant to Sec. 1600.14 and includes the following types of elections:
    (1) To make employee contributions;
    (2) To change the amount of employee contributions; or
    (3) To terminate employee contributions.
    (b) Contribution allocation. A participant may make or change the 
manner in which future deposits to his or her account are allocated 
among the TSP Funds only in accordance with 5 CFR part 1601.

[66 FR 22089, May 2, 2001, as amended at 68 FR 35494, June 13, 2003; 70 
FR 32207, June 1, 2005]



Sec. 1600.12  Contribution elections.

    (a) An employee may make a contribution election at any time.
    (b) A participant must submit a contribution election to his or her 
employing agency. To make an election, employees may use either the 
paper election form provided by the TSP, or, if available from their 
employing agency, electronic media. If an electronic medium is used, all 
relevant elements contained on the paper form must be included in the 
electronic medium.
    (c) A contribution election must:
    (1) Be completed in accordance with the instructions on the form, if 
a paper form is used;
    (2) Be made in accordance with the employing agency's instructions, 
if the submission is made electronically; and
    (3) Not exceed the maximum contribution limitations described in 
Sec. 1600.22.
    (d) A contribution election will become effective no later than the 
first full pay period after it is received by the employing agency.

[70 FR 32207, June 1, 2005]



Sec. 1600.13  Timing of agency contributions.

    (a) Employees not previously eligible to receive agency 
contributions. An employee appointed or reappointed to a position 
covered by FERS who had not been previously eligible to receive agency 
contributions is eligible to receive agency contributions under the 
following rules:
    (1) If the effective date of the appointment is any day during the 
period June 1 through November 30, the agency contributions must begin 
the first full pay period of the following June; and
    (2) If the effective date of the appointment is any day during the 
period December 1 through May 31, the agency contributions must begin 
the first full pay period of the following December.
    (b) Employees previously eligible to receive agency contributions. 
An employee reappointed to a position covered by

[[Page 188]]

FERS who was previously eligible to receive agency contributions is 
immediately eligible to receive agency contributions.

[70 FR 32207, June 1, 2005]



Sec. 1600.14  Effect of transfer to FERS.

    (a) If an employee appointed to a position covered by CSRS elects to 
transfer to FERS, the employee may make a contribution election at any 
time.
    (b) Eligibility to make employee contributions, and therefore to 
have agency matching contributions made on the employee's behalf, is 
subject to the restrictions on making employee contributions after 
receipt of a financial hardship in-service withdrawal described at 5 CFR 
part 1650.
    (c) If the employee had elected to make TSP contributions while 
covered by CSRS, the election continues to be valid until the employee 
makes a new valid election.
    (d) Agency automatic (1%) contributions for all employees covered 
under this section and, if applicable, agency matching contributions 
attributable to employee contributions must begin the same pay period 
that the transfer to FERS becomes effective.

[70 FR 32207, June 1, 2005]



                   Subpart C_Program of Contributions



Sec. 1600.21  Contributions in whole numbers.

    Employees may elect to contribute a percentage of basic pay or a 
dollar amount, subject to the limits described in Sec. 1600.22. The 
election must be expressed in whole percentages or whole dollar amounts.



Sec. 1600.22  Maximum contributions.

    (a) Regular employee contributions. A participant's regular TSP 
contributions are subject the following limitations:
    (1) FERS percentage limit. The maximum employee contribution from 
basic pay for a FERS participant for 2005 is 15 percent. After 2005 the 
percentage of basic pay limit will not apply and the maximum 
contribution will be limited only by the provisions of the Internal 
Revenue Code (26 U.S.C.).
    (2) CSRS and uniformed services percentage limit. The maximum 
employee contribution from basic pay for a CSRS or uniformed services 
participant for 2005 is 10 percent. After 2005 the percentage of basic 
pay limit will not apply and the maximum contribution will be limited 
only by the provisions of the Internal Revenue Code.
    (b) Catch-up contributions. (1) A participant may make tax-deferred 
catch-up contributions from basic pay at any time during the calendar 
year if he or she:
    (i) Is at least age 50 by the end of the calendar year;
    (ii) Is making regular TSP contributions at a rate that will result 
in the participant making the maximum regular contributions permitted 
under paragraph (a) of this section; and
    (iii) Does not exceed the annual limit on catch-up contributions 
contained in the Internal Revenue Code.
    (2) Elections to make catch-up contributions will be separate from 
the participant's regular contribution election.
    (3) A participant who has both a civilian and a uniformed services 
account can make catch-up contributions to both accounts, but the total 
amount of the catch-up contributions to both accounts cannot exceed the 
Internal Revenue Code catch-up contribution limit for the year.
    (4) Catch-up contributions are not eligible for matching 
contributions.

[70 FR 32207, June 1, 2005]



        Subpart D_Transfers From Other Qualified Retirement Plans



Sec. 1600.31  Accounts eligible for transfer.

    (a) A participant who is entitled to receive (or receives) an 
eligible rollover distribution, within the meaning of I.R.C. section 
402(c)(4) (26 U.S.C. 402(c)(4)), from an eligible employer plan or a 
rollover contribution, within the meaning of I.R.C. section 408(d)(3) 
(26 U.S.C. 408(d)(3)), from a traditional IRA may cause to be 
transferred (or transfer) that distribution into his or her existing TSP 
account. This option

[[Page 189]]

is not available to participants who have already made a full withdrawal 
of their TSP account after separation from service or who are receiving 
monthly payments.
    (b) The only balances that the TSP will accept are balances that 
would otherwise be includible in gross income if the distribution were 
paid to the participant. The TSP will not accept any balances that have 
already been subjected to Federal income tax (after-tax monies) or 
balances from a uniformed services TSP account that will not be subject 
to Federal income tax (tax-exempt monies).

[67 FR 17604, Apr. 11, 2002]



Sec. 1600.32  Methods for transferring eligible rollover distribution to TSP.

    (a) Trustee-to-trustee transfer. Participants may request that the 
administrator or trustee of their eligible retirement plan transfer any 
or all of their account directly to the TSP by executing and submitting 
a Form TSP-60 or TSP-U-60, Request for a Transfer Into the TSP, to the 
administrator or trustee. The administrator or trustee must complete the 
appropriate section of the form and forward the completed form and the 
distribution to the TSP record keeper.
    (b) Rollover by participant. Participants who have already received 
a distribution from an eligible retirement plan may roll over all or 
part of the distribution into the TSP in accordance with the following 
requirements:
    (1) The participant must complete Form TSP-60 or TSP-U-60, Request 
for a Transfer Into the TSP.
    (2) The administrator or trustee of the eligible retirement plan 
must certify on the Form TSP-60 or TSP-U-60 the amount and date of the 
distribution.
    (3) The participant must submit the completed Form TSP-60 or TSP-U-
60, together with a certified check, cashier's check, cashier's draft, 
money order, treasurer's check from a credit union, or personal check, 
made out to the ``Thrift Savings Plan,'' for the entire amount of the 
rollover. A participant may roll over the full amount of the 
distribution by making up, from his or her own funds, the amount that 
was withheld from the distribution for the payment of Federal taxes.
    (4) The transaction must be completed within 60 days of the 
participant's receipt of the distribution from his or her eligible 
retirement plan. The transaction is not complete until the TSP record 
keeper receives the Form TSP-60 or TSP-U-60, executed by both the 
participant and administrator, trustee, or custodian, together with the 
guaranteed funds for the amount to be rolled over.
    (c) Participant's certification. When transferring a distribution to 
the TSP by either a trustee-to-trustee transfer or a rollover, the 
participant must certify that the distribution is eligible for transfer 
into the TSP, as follows:
    (1) Distribution from an eligible employer plan. The participant 
must certify that the distribution:
    (i) Is not one of a series of substantially equal periodic payments 
made over the life expectancy of the participant (or the joint lives of 
the participant and designated beneficiary, if applicable) or for a 
period of 10 years or more;
    (ii) Is not a minimum distribution required by I.R.C. section 
401(a)(9) (26 U.S.C. 401(a)(9));
    (iii) Is not a hardship distribution;
    (iv) Is not a plan loan that is deemed to be a taxable distribution 
because of default;
    (v) Is not a return of excess elective deferrals; and
    (vi) If not transferred or rolled over, would be includible in gross 
income for the tax year in which the distribution is paid.
    (2) Distribution from a traditional IRA. The participant must 
certify that the distribution:
    (i) Is not a minimum distribution required under I.R.C. section 
401(a)(9) (26 U.S.C. 401(a)(9)); and
    (ii) If not transferred or rolled over, would be includible in gross 
income for the tax year in which the distribution is paid.

[67 FR 17604, Apr. 11, 2002, as amended at 68 FR 35495, June 13, 2003]

[[Page 190]]



Sec. 1600.33  Treatment accorded transferred funds.

    (a) All funds transferred to the TSP pursuant to Sec. Sec. 1600.31 
and 1600.32 will be treated as employee contributions.
    (b) All funds transferred to the TSP pursuant to Sec. Sec. 1600.31 
and 1600.32 will be invested in accordance with the participant's 
contribution allocation on file at the time the transfer is completed.
    (c) Funds transferred to the TSP pursuant to Sec. Sec. 1600.31 and 
1600.32 are not subject to the limits on contributions described in 
Sec. 1600.22.



PART 1601_PARTICIPANTS' CHOICES OF TSP FUNDS--Table of Contents




                            Subpart A_General

Sec.
1601.1 Definitions.

                   Subpart B_Investing Future Deposits

1601.11 Applicability
1601.12 Investing future deposits in the TSP Funds.
1601.13 Elections.

    Subpart C_Redistributing Participants' Existing Account Balances 
                          (Interfund Transfers)

1601.21 Applicability.
1601.22 Methods of requesting an interfund transfer.

   Subpart D_Contribution Allocations and Interfund Transfer Requests

1601.31 Applicability.
1601.32 Timing and posting dates.
1601.33 Acknowledgment of risk.
1601.34 Error correction.

                        Subpart E_Lifecycle Funds

1601.40 Lifecycle Funds.

    Authority: 5 U.S.C. 8351, 8438, 8474(b)(5) and (c)(1).

    Source: 66 FR 22093, May 2, 2001, unless otherwise noted.



                            Subpart A_General



Sec. 1601.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this part:
    Acknowledgment of risk means an acknowledgment that any investment 
in a TSP Fund other than the G Fund is made at the participant's risk, 
that the participant is not protected by the United States Government or 
the Board against any loss on the investment, and that neither the 
United States Government nor the Board guarantees any return on the 
investment.

[68 FR 35495, June 13, 2003, as amended at 70 FR 32207, June 1, 2005]



                   Subpart B_Investing Future Deposits

    Source: 68 FR 35495, June 13, 2003, unless otherwise noted.



Sec. 1601.11  Applicability.

    This subpart applies only to the investment of future deposits to 
the TSP's TSP Funds, including contributions, loan payments, and 
transfers or rollovers from traditional IRAs and eligible employer 
plans; it does not apply to redistributing participants' existing 
account balances among the TSP Funds, which is covered in subpart C of 
this part.

[68 FR 35495, June 13, 2003, as amended at 70 FR 32207, June 1, 2005]



Sec. 1601.12  Investing future deposits in the TSP Funds.

    (a) Allocation. Future deposits in the TSP, including contributions, 
loan payments, and transfers or rollovers from traditional IRAs and 
eligible employer plans, will be allocated among the TSP Funds based on 
the most recent contribution allocation on file for the participant.
    (b) TSP Funds availability. All participants may elect to invest all 
or any portion of their deposits in any of the TSP Funds.

[70 FR 32207, June 1, 2005]



Sec. 1601.13  Elections.

    (a) Contribution allocation. Each participant may indicate his or 
her choice of TSP Funds for the allocation of future deposits by using 
the TSP Web site or the ThriftLine, or by completing and filing the 
appropriate paper

[[Page 191]]

TSP form with the TSP record keeper in accordance with the form's 
instructions. The following rules apply to contribution allocations:
    (1) Contribution allocations must be made in one percent increments. 
The sum of the percentages elected for all of the TSP Funds must equal 
100 percent;
    (2) The percentage elected by a participant for investment of future 
deposits in a TSP Fund will be applied to all sources of contributions 
and transfers (or rollovers) from traditional IRAs and eligible employer 
plans. A participant may not make different percentage elections for 
different sources of contributions;
    (3) A participant who elects for the first time to invest in a TSP 
Fund other than the G Fund must execute an acknowledgment of risk in 
accordance with Sec. 1601.33;
    (4) All deposits made on behalf of a participant who does not have a 
contribution allocation in effect will be invested in the G Fund; and
    (5) Once a contribution allocation becomes effective, it remains in 
effect until it is superseded by a subsequent contribution allocation. 
If a separated participant is rehired and had not withdrawn his or her 
entire TSP account, the participant's last contribution allocation 
before separation from service will be effective until a new allocation 
is made.
    (b) Effect of rejection of contribution allocation. If a participant 
does not correctly complete a contribution allocation, the attempted 
allocation will have no effect. The TSP will provide the participant 
with a written statement of the reason the transaction was rejected.
    (c) Contribution elections. A participant may designate the amount 
of employee contributions he or she wishes to make to the TSP or may 
stop contributions only in accordance with 5 CFR part 1600.

[68 FR 35495, June 13, 2003, as amended at 70 FR 32207, June 1, 2005]



    Subpart C_Redistributing Participants' Existing Account Balances 
                          (Interfund Transfers)

    Source: 68 FR 35495, June 13, 2003, unless otherwise noted.



Sec. 1601.21  Applicability.

    This subpart applies only to interfund transfers, which involve 
redistributing participants' existing account balances among the TSP 
Funds; it does not apply to the investment of future deposits, which is 
covered in subpart B of this part.

[68 FR 35495, June 13, 2003, as amended at 70 FR 32208, June 1, 2005]



Sec. 1601.22  Methods of requesting an interfund transfer.

    (a) Participants may make an interfund transfer using the TSP Web 
site or the ThriftLine, or by completing and filing the appropriate 
paper TSP form with the TSP record keeper in accordance with the form's 
instructions. The following rules apply to an interfund transfer 
request:
    (1) Interfund transfer requests must be made in whole percentages 
(one percent increments). The sum of the percentages elected for all of 
the TSP Funds must equal 100 percent.
    (2) The percentages elected by the participant will be applied to 
the balances in each source of contributions and to both tax-deferred 
and tax-exempt balances on the effective date of the interfund transfer.
    (3) Any participant who elects to invest in a TSP Fund other than 
the G Fund for the first time must execute an acknowledgement of risk in 
accordance with Sec. 1601.33.
    (b) An interfund transfer request has no effect on deposits made 
after the effective date of the interfund transfer request; subsequent 
deposits will continue to be allocated among the investment funds in 
accordance with the participant's contribution allocation made under 
subpart B of this part.
    (c) If an interfund transfer is found to be invalid pursuant to 
Sec. 1601.34, the purported transfer will not be made. The TSP will 
provide the participant with a

[[Page 192]]

written statement of the reason the transaction was rejected.

[70 FR 32208, June 1, 2005]



   Subpart D_Contribution Allocations and Interfund Transfer Requests



Sec. 1601.31  Applicability.

    This subpart applies both to contribution allocations made under 
subpart B of this part and interfund transfers made under subpart C of 
this part.



Sec. 1601.32  Timing and posting dates.

    (a) Posting dates. The date on which the TSP processes or posts a 
contribution allocation or interfund transfer request (transaction 
request) is subject to a number of factors, including some that are 
outside of the control of the TSP, such as power outages, the failure of 
telephone service, unusually heavy transaction volume, and acts of God. 
These factors also could affect the availability of the TSP Web site and 
the ThriftLine. Therefore, the TSP cannot guarantee that a transaction 
request will be processed on a particular day. However, the TSP will 
process transaction requests under ordinary circumstances according to 
the following rules:
    (1) A transaction request entered into the TSP record keeping system 
by a participant who uses the TSP Web site or the ThriftLine, or by a 
TSP Service Office participant service representative at the 
participant's request, at or before 12:00 noon eastern time of any 
business day, will ordinarily be posted that business day. A transaction 
request entered into the system after 12:00 noon eastern time of any 
business day will ordinarily be posted on the next business day.
    (2) A transaction request made on the TSP Web site or the ThriftLine 
on a non-business day will ordinarily be posted on the next business 
day.
    (3) A transaction request made on a paper TSP form will ordinarily 
be posted under the rules in paragraph (a)(1) of this section, based on 
when the TSP record keeper enters the form into the TSP system. The TSP 
record keeper ordinarily enters such forms into the system within 24 
hours of their receipt.
    (4) In most cases, the share price(s) applied to an interfund 
transfer request is the value of the shares on the date the relevant 
transaction is posted. In some circumstances, such as error correction, 
the share price(s) for an earlier date will be used.
    (b) Limit. There is no limit on the number of contribution 
allocations or interfund transfer requests that may be made by a 
participant.

[70 FR 32208, June 1, 2005]



Sec. 1601.33  Acknowledgment of risk.

    (a) A participant who wants to invest in a TSP Fund other than the G 
Fund must execute an acknowledgment of risk for that fund. If a required 
acknowledgment of risk has not been executed, no transactions involving 
the fund(s) for which the acknowledgment is required will be accepted.
    (b) The acknowledgment of risk may be executed in association with a 
contribution allocation or an interfund transfer using the TSP Web site, 
the ThriftLine, or a paper TSP form.

[70 FR 32208, June 1, 2005]



Sec. 1601.34  Error correction.

    Errors in processing contribution allocations and interfund transfer 
requests, or errors that otherwise cause money to be invested in the 
wrong investment fund, will be corrected in accordance with the error 
correction regulations found at 5 CFR part 1605.

[66 FR 22093, May 2, 2001. Redesignated at 70 FR 32208, June 1, 2005]



                        Subpart E_Lifecycle Funds



Sec. 1601.40  Lifecycle Funds.

    The Executive Director will establish TSP Lifecycle Funds, which are 
target date asset allocation portfolios. The TSP Lifecycle Funds will 
invest solely in the funds established by the TSP pursuant to 5 U.S.C. 
8438.

[70 FR 32208, June 1, 2005]



PART 1603_VESTING--Table of Contents




Sec.
1603.1 Definitions.
1603.2 Basic vesting rules.
1603.3 Service requirements.


[[Page 193]]


    Authority: 5 U.S.C. 8432(g), 8432b(h)(1), 8474(b)(5) and (c)(1).

    Source: 52 FR 29835, Aug. 12, 1987, unless otherwise noted.



Sec. 1603.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this part:
    Service means:
    (1) Any non-military service that is creditable under either 5 
U.S.C. chapter 83, subchapter III, or 5 U.S.C. 8411. However, that 
service is to be determined without regard to any time limitations, any 
deposit or redeposit requirements contained in those statutory 
provisions after performing the service involved, or any requirement 
that the individual give written notice of that individual's desire to 
become subject to the retirement system established by 5 U.S.C. chapters 
83 or 84; or
    (2) Any military service creditable under the provisions of 5 U.S.C. 
8432b(h)(1) and the regulations at 5 CFR part 1620, subpart H.
    Uniformed services means the Army, Navy, Air Force, Marine Corps, 
Coast Guard, Public Health Service, and National Oceanic and Atmospheric 
Administration, as well as members of the Ready Reserve including the 
National Guard.
    Vested means those amounts in an individual account which are 
nonforfeitable.
    Year of service means one full calendar year of service.

[68 FR 35497, June 13, 2003]



Sec. 1603.2  Basic vesting rules.

    (a) All amounts in a CSRS employee's or uniformed service member's 
individual account are immediately vested.
    (b) Except as provided in paragraph (c) of this section, all amounts 
in a FERS employee's individual account (including all first conversion 
contributions) are immediately vested.
    (c) Except as provided in paragraph (d) of this section, upon 
separation from Government service without meeting the applicable 
service requirements of Sec. 1603.3, a FERS employee's agency automatic 
(1%) contributions and attributable earnings will be forfeited.
    (d) If a FERS employee dies (or died) after January 7, 1988, without 
meeting the applicable service requirements set forth in Sec. 1603.3, 
the agency automatic (1%) contributions and attributable earnings in his 
or her individual account are deemed vested and shall not be forfeited. 
If a FERS employee died on or before January 7, 1988, without meeting 
those service requirements, his or her agency automatic (1%) 
contributions and attributable earnings are forfeited to the Thrift 
Savings Plan.

[52 FR 29835, Aug. 12, 1987, as amended at 62 FR 33969, June 23, 1997; 
68 FR 35497, June 13, 2003]



Sec. 1603.3  Service requirements.

    (a) Except as provided under paragraph (b) of this section, FERS 
employees will be vested in their agency automatic (1%) contributions 
and attributable earnings upon separating from Government only if, as of 
their separation date, they have completed three years of service.
    (b) FERS employees will be vested in their agency automatic (1%) 
contributions and attributable earnings upon separating from Government 
service if, as of their separation date, they have completed two years 
of service and they are serving in one of the following positions:
    (1) A position in the Senior Executive Service as a non-career 
appointee (as defined in 5 U.S.C. 3132(a)(7));
    (2) Positions listed in 5 U.S.C. 5312, 5313, 5314, 5315 or 5316;
    (3) A position placed in level IV or level V of the Executive 
Schedule, pursuant to 5 U.S.C. 5317;
    (4) A position in the Executive Branch which is excepted from the 
competitive service by the Office of Personnel Management because of the 
confidential and policy-determining character of the position; or
    (5) A Member of Congress or a Congressional employee.

[52 FR 29835, Aug. 12, 1987, as amended at 60 FR 24535, May 9, 1995; 62 
FR 33969, June 23, 1997]

[[Page 194]]



PART 1604_UNIFORMED SERVICES ACCOUNTS--Table of Contents




Sec.
1604.1 Applicability.
1604.2 Definitions.
1604.3 Contribution elections.
1604.4 Contributions.
1604.5 Separate service member and civilian accounts.
1604.6 Error correction.
1604.7 Withdrawals.
1604.8 Death benefits.
1604.9 Court orders and legal processes.
1604.10 Loans.

    Authority: 5 U.S.C. 8440e, 8474(b)(5) and (c)(1).

    Source: 66 FR 50713, Oct. 4, 2001, unless otherwise noted.



Sec. 1604.1  Applicability.

    This part describes the special features of TSP participation 
applicable to members of the uniformed services. Uniformed services 
members are also covered by the other regulations of 5 CFR chapter VI to 
the extent they do not conflict with the regulations of this part.



Sec. 1604.2  Definitions.

    As used in this part:
    Basic pay means basic pay payable under 37 U.S.C. 204 and 
compensation received under 37 U.S.C. 206.
    Bonus contributions means contributions made by participants from a 
bonus as defined in 37 U.S.C. chapter 5.
    Civilian account means the TSP account to which contributions have 
been made by or on behalf of a civilian employee.
    Civilian employee means a TSP participant covered by the Federal 
Employees' Retirement System, the Civil Service Retirement System, or 
equivalent retirement plans.
    Combat zone compensation means compensation received for active 
service during a month in which a member of the uniformed services 
serves in a combat zone.
    Combat zone contributions means employee contributions that are made 
from compensation subject to the Federal income tax exclusion at 26 
U.S.C. 112 for combat zone compensation.
    Employee contributions means contributions made by participants from 
basic pay, incentive pay, and special pay (including bonuses).
    Employing agency means the organization that employs an individual 
who is eligible to contribute to the TSP and that has authority to make 
compensation decisions for that employee.
    Federal civilian retirement system means the Civil Service 
Retirement System established by 5 U.S.C. chapter 83, subchapter III, 
the Federal Employees' Retirement System established by 5 U.S.C. chapter 
84, or any equivalent Federal civilian retirement system.
    Periodic contributions means employee contributions made from 
recurring incentive pay and special pay (including bonuses) as defined 
in 37 U.S.C. chapter 5.
    Ready Reserve means those members of the uniformed services 
described at 10 U.S.C. 10142.
    Regular contributions means employee contributions made from basic 
pay.
    Separation from service means discharge of a member from active duty 
or the Ready Reserve or transfer of a member to inactive status or to a 
retired list pursuant to any provision of title 10, U.S.C. The discharge 
or transfer may not be followed, before the end of the 31-day period 
beginning on the day following the effective date of the discharge, by 
resumption of active duty, an appointment to a civilian position covered 
by the Federal Employees' Retirement System, the Civil Service 
Retirement System, or an equivalent retirement system, or continued 
service in or affiliation with the Ready Reserve. Reserve component 
members serving on full-time active duty who terminate their active duty 
status and subsequently participate in the drilling reserve are said to 
continue in the Ready Reserve. Active component members who are released 
from active duty and subsequently participate in the drilling reserve 
are said to affiliate with the Ready Reserve.
    Service member means a member of the uniformed services on active 
duty or a member of the Ready Reserve in any pay status.
    Service member account means the account to which contributions have 
been made by or on behalf of a member of the uniformed services.

[[Page 195]]

    Special and incentive pay means pay payable as special or incentive 
pay under 37 U.S.C. chapter 5.
    Uniformed services means the Army, Navy, Air Force, Marine Corps, 
Coast Guard, Public Health Service, and the National Oceanic and 
Atmospheric Administration.

[66 FR 50713, Oct. 4, 2001, as amended at 70 FR 32209, June 1, 2005]



Sec. 1604.3  Contribution elections.

    A service member may make contribution elections as described in 5 
CFR part 1600. A service member may elect to contribute sums to the TSP 
from basic pay, incentive pay, and special pay (including bonuses). 
However, the service member must elect to contribute to the TSP from 
basic pay in order to contribute to the TSP from incentive pay and 
special pay (including bonuses). A service member may elect to 
contribute from special pay or incentive pay (including bonuses) in 
anticipation of receiving such pay (that is, he or she does not have to 
be receiving the special pay or incentive pay when the contribution 
election is made); those elections will take effect when the service 
member receives the special or incentive pay.

[70 FR 32209, June 1, 2005]



Sec. 1604.4  Contributions.

    (a) Employee contributions. Subject to the regulations at 5 CFR part 
1600 and the following limitations, a service member may make regular 
contributions to the TSP from basic pay. If the service member makes 
regular contributions, he or she also may contribute all or a portion of 
incentive pay and special pay (including bonuses) to the TSP. The 
maximum TSP regular employee contribution (including contributions from 
pay earned in a combat zone) which a service member may make for 2005 is 
10 percent of basic pay. After 2005 the percentage of basic pay limit 
will not apply and the maximum contribution will be limited only by the 
provisions of the Internal Revenue Code (26 U.S.C.).
    (b) Matching contributions. When matching contributions are 
authorized for a service member, that service member's regular 
contributions will be matched dollar-for-dollar on the first three 
percent of basic pay contributed to the TSP, and 50 cents on the dollar 
on the next two percent of basic pay contributed. Matching contributions 
only apply to regular contributions.
    (c) Deduction and transmittal of contributions. A service member's 
employing agency will deduct regular contributions from the service 
member's basic pay each pay period based on his or her contribution 
election and will transmit the contributions to the TSP. If a service 
member also elects to make periodic contributions to the TSP, the 
employing agency must deduct (and transmit to the TSP) these 
contributions from the service member's incentive pay or special pay 
(including bonuses), as applicable.

[66 FR 50713, Oct. 4, 2001, as amended at 68 FR 35497, June 13, 2003; 70 
FR 32209, June 1, 2005]



Sec. 1604.5  Separate service member and civilian accounts.

    (a) Separate accounts. Service member accounts are maintained 
separately from civilian accounts. Therefore, service members making 
both civilian and uniformed services TSP contributions will have two TSP 
accounts. For those participants, the accounts are treated separately 
except in the following circumstances:
    (1) If a participant contributes to a service member account and a 
civilian account, the contributions to both accounts together cannot 
exceed the Internal Revenue Code (26 U.S.C.) contribution limits.
    (2) A member of the uniformed services may obtain a loan from his or 
her account, as described at Sec. 1604.10, and the loan will be 
disbursed from the uniformed services account. If the TSP maintains a 
service member account and a civilian account for an individual, the TSP 
will calculate the Internal Revenue Code maximum loan amount using both 
account balances, as described in Sec. 1604.10(a)(3).
    (b) Transfers between TSP accounts. Service member and civilian TSP 
account balances may be combined through a transfer (thus producing one 
account), and the transferred funds will be treated as employee 
contributions and otherwise invested as described at 5 CFR part 1600. 
Transfers under this

[[Page 196]]

section are subject to the following rules:
    (1) An account balance can be transferred once the TSP is informed 
(by the participant's employing agency) that the participant has 
separated from either civilian or uniformed services employment.
    (2) Combat zone contributions may not be transferred from a 
uniformed services TSP account to a civilian TSP account.
    (3) Transferred funds will be allocated among the TSP Funds 
according to the contribution allocation in effect for the account into 
which the funds are transferred.
    (4) A service member must obtain the consent of his or her spouse 
before transferring a uniformed services TSP account balance into a 
civilian account that is subject to Civil Service Retirement System 
spousal rights. A request for an exception to the spousal consent 
requirement will be evaluated under the rules explained in 5 CFR part 
1650.
    (5) Before the transfer can be accomplished, any outstanding loans 
from the account to be transferred must be closed as described in 5 CFR 
part 1655.

[66 FR 50713, Oct. 4, 2001, as amended at 70 FR 32209, June 1, 2005]



Sec. 1604.6  Error correction.

    (a) General rule. A service member's employing agency must correct 
the service member's account if, as the result of employing agency 
error, a service member does not receive the TSP contributions to which 
he or she is entitled. Except as provided in paragraph (b) of this 
section, those corrections must be made in accordance with 5 CFR part 
1605.
    (b) Missed bonus contributions. This paragraph (b) applies when an 
employing agency fails to implement a contribution election that was 
properly submitted by a service member requesting that a TSP 
contribution be deducted from bonus pay. Within 30 days of receiving the 
employing agency's acknowledgment of the error, a service member may 
establish a schedule of makeup contributions with his or her employing 
agency to replace the missed contribution through future payroll 
deductions. These makeup contributions can be made in addition to any 
TSP contributions that the service member is otherwise entitled to make.
    (1) The schedule of makeup contributions may not exceed four times 
the number of months it would take for the service member to earn basic 
pay equal to the dollar amount of the missed contribution. For example, 
a service member who earns $29,000 yearly in basic pay and who missed a 
$2,500 bonus contribution to the TSP can establish a schedule of makeup 
contributions with a maximum duration of 8 months. This is because it 
takes the service member 2 months to earn $2,500 in basic pay (at 
$2,416.67 per month).
    (2) At its discretion, an employing agency may set a ceiling on the 
length of a schedule of employee makeup contributions. The ceiling may 
not, however, be less than twice the number of months it would take for 
the service member to earn basic pay equal to the dollar amount of the 
missed contribution.



Sec. 1604.7  Withdrawals.

    A service member may withdraw all or a portion of his or her account 
under the rules in 5 CFR part 1650, with the following exceptions:
    (a) Separate accounts. If the TSP maintains a service member account 
and a civilian account for an individual, a separate withdrawal request 
must be made for each account.
    (b) Spousal rights. The spouse of a service member participant has 
the same TSP spousal rights as the spouse of a civilian participant 
covered under the Federal Employees' Retirement System; those spousal 
rights in the context of a withdrawal (and the process by which a 
service member may obtain an exception to them) are explained at 5 CFR 
part 1650.
    (c) Combat zone contributions. If a service member account contains 
combat zone contributions, the withdrawal will be distributed pro rata 
from all sources. If a participant requests the TSP to transfer all, or 
a portion, of a withdrawal to a traditional IRA or eligible employer 
plan, the share of the withdrawal attributable to combat zone 
contributions (if any) can be transferred only if the IRA or plan 
accepts such funds.

[[Page 197]]

    (d) Separation. The definition of separation from service at Sec. 
1604.2 applies when determining a service member's eligibility for a 
withdrawal.

[66 FR 50713, Oct. 4, 2001, as amended at 70 FR 32209, June 1, 2005]



Sec. 1604.8  Death benefits.

    The account balance of a deceased service member will be paid as 
described at 5 CFR part 1651, with the following exceptions:
    (a) Separate accounts. To designate a beneficiary for a TSP death 
benefit, a service member must file a valid beneficiary designation 
form. If the TSP maintains a service member account and a civilian 
account for an individual, a separate beneficiary designation form must 
be filed for each account.
    (b) Combat zone contributions. If a service member account contains 
combat zone contributions, the death benefit payment will be made pro 
rata from all sources.
    (c) Trustee-to-trustee transfers. The surviving spouse of a TSP 
participant can request the TSP to transfer a death benefit payment to a 
traditional IRA or eligible employer plan. The share of the death 
benefit payment that is attributable to combat zone contributions (if 
any) can be transferred only if the IRA or plan accepts such funds.
    (d) Transfer to a TSP account. If the TSP maintains an account for a 
death benefit beneficiary who is the surviving spouse of the 
participant, the spouse can request the TSP to transfer the death 
benefit payment to his or her TSP account; the share attributable to 
combat zone contributions (if any) cannot be transferred into a civilian 
account.

[66 FR 50713, Oct. 4, 2001, as amended at 70 FR 32209, June 1, 2005]



Sec. 1604.9  Court orders and legal processes.

    A TSP account can be divided in an action for divorce, annulment, or 
legal separation, and is subject to legal process relating to child 
support, alimony, or child abuse. The TSP will make a payment from a 
service member's account under such orders or processes as described at 
5 CFR part 1653, with the following exceptions:
    (a) Separate accounts. To qualify for enforcement against the TSP, a 
court order or legal process must expressly relate to the TSP. 
Therefore, if the TSP maintains a service member account and a civilian 
account for an individual, a qualifying court order or legal process 
must expressly state from which account payment is to be made.
    (b) Combat zone contributions. If a service member account contains 
combat zone contributions, the payment will be made pro rata from all 
sources, unless the court order or legal process directs otherwise.
    (c) Trustee-to-trustee transfers. The current or former spouse of a 
TSP participant can request the TSP to transfer a court-ordered payment 
to a traditional IRA or eligible employer plan. If the payee requests 
the TSP to transfer all or a portion of the court-ordered payment to an 
IRA or plan, the share of the payment attributable to combat zone 
contributions (if any) can be transferred only if the IRA or plan 
accepts such funds.
    (d) Transfer to a TSP account. If the TSP maintains an account for a 
court order payee who is the current or former spouse of the 
participant, the payee can request the TSP to transfer the court-ordered 
payment to the payee's TSP account; the pro rata share attributable to 
combat zone contributions (if any) cannot be transferred.

[66 FR 50713, Oct. 4, 2001, as amended at 70 FR 32209, June 1, 2005]



Sec. 1604.10  Loans.

    A service member may be eligible for a TSP loan as described at 5 
CFR part 1655, with the following exceptions:
    (a) Separate accounts. If the TSP maintains a service member account 
and a civilian account for an individual:
    (1) A separate loan application must be made for each account;
    (2) A participant may have no more than two loans outstanding from 
each account at any time; one loan from each account may be a loan for 
the purchase of a primary residence;

[[Page 198]]

    (3) The Internal Revenue Code maximum loan amount test, which is 
described in 5 CFR part 1655, will be applied using the combined 
balances in both TSP accounts.
    (b) Spousal rights. Before a loan agreement is approved for a 
service member account, the participant's spouse must consent to the 
loan by signing the loan agreement. A request for an exception to the 
spousal consent requirement will be evaluated under the rules explained 
in 5 CFR part 1650.
    (c) Combat zone contributions. The portion of a loan that is 
attributable to combat zone contributions (if any) will be determined 
when the loan is declared a taxable distribution, and that portion will 
not be reported as taxable income to the participant as a result of the 
declaration.

[66 FR 50713, Oct. 4, 2001, as amended at 70 FR 32209, June 1, 2005]



PART 1605_CORRECTION OF ADMINISTRATIVE ERRORS--Table of Contents




                            Subpart A_General

Sec.
1605.1 Definitions.
1605.2 Calculating, posting, and charging breakage.

                    Subpart B_Employing Agency Errors

1605.11 Makeup of missed or insufficient contributions.
1605.12 Removal of erroneous contributions.
1605.13 Back pay awards and other retroactive pay adjustments.
1605.14 Misclassified retirement system coverage.
1605.15 Reporting and processing late contributions and late loan 
          payments.
1605.16 Claims for correction of employing agency errors; time 
          limitations.

               Subpart C_Board or TSP Record Keeper Errors

1605.21 Plan-paid breakage and other corrections.
1605.22 Claims for correction of Board or TSP record keeper errors; time 
          limitations.

                   Subpart D_Miscellaneous Provisions

1605.31 Contributions missed as a result of military service.

    Authority: 5 U.S.C. 8351, 8432a, and 8474(b)(5) and (c)(1).

    Source: 66 FR 44277, Aug. 22, 2001, unless otherwise noted.



                            Subpart A_General



Sec. 1605.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this part:
    ``As of'' date means the date on which a TSP contribution or other 
transaction entailing acquisition of investment fund shares should have 
taken place. Employing agencies use this date on payment records to 
report makeup or late contributions or late loan payments.
    Attributable pay date ordinarily means the pay date of an erroneous 
contribution for which a negative adjustment is being made or, in the 
case of the uniformed services, the pay date of a contribution that is 
being recharacterized from tax-deferred to tax-exempt, or vice versa. 
However, if the erroneous contribution was a makeup or late 
contribution, the attributable pay date is the ``as of'' date of the 
erroneous makeup or late contribution.
    Breakage means the loss incurred or the gain realized on makeup or 
late contributions. It is the difference between the value of the shares 
of the applicable investment fund(s) that would have been purchased had 
the contribution been made on the ``as of'' date and the value of the 
shares of the same investment fund(s) on the date the contribution is 
posted to the account.
    Error means any act or omission by the Board, the TSP Record Keeper, 
or the participant's employing agency that is not in accordance with 
applicable statutes, regulations, or administrative procedures that are 
made available to employing agencies and/or TSP participants. It does 
not mean an act or omission caused by events that are beyond the control 
of the Board, the TSP Record Keeper, or the participant's employing 
agency.
    FERCCA correction means the correction of a retirement coverage 
error pursuant to the Federal Erroneous Retirement Coverage Corrections 
Act, title II, Public Law 106-265, 114 Stat. 770.
    Late contributions means:

[[Page 199]]

    (1) Employee contributions that were timely deducted from a 
participant's basic pay but were not timely reported to the TSP record 
keeper for investment;
    (2) Employee contributions that were timely reported to the TSP but 
were not timely posted to the participant's account by the TSP because 
the payment record on which they were submitted contained errors;
    (3) Agency matching contributions attributable to employee 
contributions referred to in paragraphs (1) or (2) of this definition; 
and
    (4) Delayed agency automatic (1%) contributions.
    Makeup contributions are employee contributions that should have 
been deducted from a participant's basic pay or employer contributions 
that should have been charged to an employing agency on an earlier date, 
but were not deducted or charged and, consequently, are being deducted 
or charged currently.
    Negative adjustment means the removal of money from a participant's 
TSP account by an employing agency.
    Negative adjustment record means a data record submitted by an 
employing agency to remove from a participant's TSP account money that 
the agency had previously submitted in error.
    Pay date means the date established by an employing agency for 
paying its employees or service members.
    Payment record means a data record submitted by an employing agency 
to report contributions or loan payments to a participant's TSP account.

[68 FR 35497, June 13, 2003, as amended at 70 FR 32209, June 1, 2005]



Sec. 1605.2  Calculating, posting, and charging breakage.

    (a) The TSP will calculate breakage on late contributions, makeup 
agency contributions, and loan payments as described by Sec. 
1605.15(b). This breakage calculation is subject to the following rules:
    (1) The TSP will not calculate breakage if contributions or loan 
payments are posted within 30 days of the ``as of'' date, or if the 
total amount on a late payment record or the total agency contributions 
on a current payment record is less than $1.00; and
    (2) The TSP will not take the participant's interfund transfers into 
account when determining breakage.
    (b) Calculating breakage. The TSP will calculate breakage as 
follows:
    (1) For contributions or loan payments with ``as of'' dates on or 
after January 1, 2000, the TSP will:
    (i) Use the participant's contribution allocation on file for the 
``as of'' date to determine how the funds would have been invested. If 
there is no contribution allocation on file, or one cannot be derived 
based on the investment of contributions, the TSP will consider the 
funds to have been invested in the G Fund;
    (ii) Determine the number of shares of the applicable investment 
funds the participant would have received had the contributions or loan 
payments been made on time. If the ``as of'' date is before TSP account 
balances were converted to shares, this determination will be the number 
of shares the participant would have received on the conversion date, 
and will include the monthly earnings the participant would have 
received had the contributions or loan payments been made on the ``as 
of'' date; and
    (iii) Determine the dollar value on the posting date of the number 
of shares the participant would have received had the contributions or 
loan payments been made on time. The difference between the dollar value 
of the contribution or loan payment on the posting date and the dollar 
value of the contribution or loan payment on the ``as of'' date is the 
breakage.
    (2) For contributions and loan payments with an ``as of'' date 
before January 1, 2000, the TSP will:
    (i) Value the contributions and loan payments from the ``as of'' 
date through the date TSP accounts were converted to shares, by using 
the greater of either the G Fund monthly rate of return or the average 
monthly rate of return for all TSP Funds;
    (ii) Determine the number of shares the participant would have 
received at conversion; and
    (iii) Determine the dollar value of those shares on the posting date 
by using the greater of either the G Fund share price or the average 
share price

[[Page 200]]

for all of the TSP Funds. The difference between the dollar value of the 
contribution or loan payment on the posting date and the dollar value of 
the contribution or loan payment on the ``as of'' date is the breakage.
    (c) Posting contributions and loan payments. Makeup and late 
contributions, late loan payments, and breakage, will be posted to the 
participant's account according to his or her contribution allocation on 
file for the posting date. If there is no contribution allocation on 
file for the posting date, they will be posted to the G Fund.
    (d) Charging breakage. If the dollar amount posted to the 
participant's account is greater than the dollar amount of the makeup or 
late contribution or late loan payment, the TSP will charge the agency 
the additional amount. If the dollar amount posted to the participant's 
account is less than the dollar amount of the makeup or late 
contribution, or late loan payment, the difference between the amount of 
the contribution and the amount posted will be forfeited to the TSP.
    (e) Posting of multiple contributions. If the TSP posts multiple 
makeup or late contributions or late loan payments with different ``as 
of'' dates for a participant on the same business day, the amount of 
breakage charged to the employing agency or forfeited to the TSP will be 
determined separately for each transaction, without netting any gains or 
losses attributable to different ``as of'' dates. In addition, gains and 
losses from different sources of contributions or different TSP Funds 
will not be netted against each other. Instead, breakage will be 
determined separately for each as-of date, TSP Fund, and source of 
contributions.

[70 FR 32209, June 1, 2005]



                    Subpart B_Employing Agency Errors



Sec. 1605.11  Makeup of missed or insufficient contributions.

    (a) Applicability. This section applies whenever, as the result of 
an employing agency error, a participant does not receive all of the TSP 
contributions to which he or she is entitled. This includes situations 
in which an employing agency error prevents a participant from making an 
election to contribute to his or her TSP account, in which an employing 
agency fails to implement a contribution election properly submitted by 
a participant, in which an employing agency fails to make agency 
automatic (1%) contributions or agency matching contributions that it is 
required to make, or in which an employing agency otherwise erroneously 
contributes less to the TSP for a participant's account than it should 
have. The corrections required by this section must be made in 
accordance with this part and the procedures provided to employing 
agencies by the Board in bulletins or other guidance. It is the 
responsibility of the employing agency to determine whether it has made 
an error that entitles a participant to error correction under this 
section.
    (b) Employer makeup contributions. If an employing agency has failed 
to make agency automatic (1%) contributions that are required under 5 
U.S.C. 8432(c)(1)(A), agency matching contributions that are required 
under section 8432(c)(2), or matching contributions that are authorized 
under 37 U.S.C. 211(d), the following rules apply:
    (1) The employing agency must promptly submit all missed 
contributions to the TSP record keeper on behalf of the affected 
participant. For each pay date involved, the employing agency must 
submit a separate payment record showing the ``as of'' date for the 
contributions.
    (2) The TSP will calculate the breakage due to the participant and 
post both the contributions and the associated breakage to the 
participant's account in accordance with Sec. 1605.2.
    (c) Employee makeup contributions. Within 30 days of receiving 
information from his or her employing agency indicating that the 
employing agency acknowledges that an error has occurred which has 
caused a smaller amount of employee contributions to be made to the 
participant's account than should have been made, a participant may 
elect to establish a schedule to make up the deficient contributions 
through future payroll deductions. Employee makeup contributions can be 
made in

[[Page 201]]

addition to any TSP contributions that the participant is otherwise 
entitled to make. The following rules apply to employee makeup 
contributions:
    (1) The schedule of makeup contributions elected by the participant 
must establish the dollar amount of the contributions to be made each 
pay period over the duration of the schedule. The contribution amount 
per pay period may vary during the course of the schedule, but the total 
amount to be contributed must be established when the schedule is 
created. After the schedule is created, a participant may, with the 
agreement of his or her agency, elect to change his or her payment 
amount (e.g., to accelerate payment). The length of the schedule may not 
exceed four times the number of pay periods over which the error 
occurred.
    (2) At its discretion, an employing agency may set a ceiling on the 
length of a schedule of employee makeup contributions which is less than 
four times the number of pay periods over which the error occurred. The 
ceiling may not, however, be less than twice the number of pay periods 
over which the error occurred.
    (3) The employing agency must implement the participant's schedule 
of makeup contributions as soon as practicable.
    (4) For each pay date involved, the employing agency must submit a 
separate payment record showing the ``as of'' date for which the 
employee contribution should have been made. An employee is not eligible 
to make up contributions with an ``as of'' date occurring during a 
period of six months following a financial hardship in-service 
withdrawal, as provided in 5 CFR 1650.33. An employee may make up 
contributions during a period of ineligibility due to a hardship 
withdrawal as long as the ``as of'' date is for an earlier period.
    (5) Employee makeup contributions will be invested in accordance 
with the participant's current contribution allocation. The number of 
shares of each TSP Fund which will be purchased will be determined by 
dividing the amount of the makeup contributions by the share price of 
the applicable fund(s) on the posting date.
    (6) Employee makeup contributions will be included for purposes of 
applying the annual limit contained in Internal Revenue Code (I.R.C.) 
section 402(g) (26 U.S.C. 402(g)(1)). For purposes of applying that 
limit, employee makeup contributions will be applied against the limit 
for the year of the ``as of'' date.
    (i) Before establishing a schedule of employee makeup contributions, 
the employing agency must review any schedule proposed by the affected 
participant, as well as the participant's prior TSP contributions, if 
any, to determine whether the makeup contributions, when combined with 
prior contributions for the same year, would exceed the annual 
contribution limit(s) contained in I.R.C. section 402(g) for the year(s) 
with respect to which the contributions are being made.
    (ii) The employing agency must not permit contributions that, when 
combined with prior contributions, would exceed the applicable annual 
contribution limit contained in I.R.C. section 402(g).
    (7) A schedule of employee makeup contributions may be suspended if 
a participant has insufficient net pay to permit the makeup 
contributions. If this happens, the period of suspension should not be 
counted against the maximum number of pay periods to which the 
participant is entitled in order to complete the schedule of makeup 
contributions.
    (8) A participant may elect to terminate a schedule of employee 
makeup contributions at any time, but a termination is irrevocable. If a 
participant separates from Federal service, the participant may elect to 
accelerate the payment schedule by a lump sum contribution from his or 
her final paycheck.
    (9) At the same time that a participant makes up missed employee 
contributions, the employing agency must make any agency matching 
contributions that would have been made had the error not occurred. 
Agency matching contributions must be submitted pursuant to the rules 
set forth in paragraph (b) of this section. A participant may not 
receive matching contributions associated with any employee 
contributions that are not actually

[[Page 202]]

made up. If employee makeup contributions are suspended in accordance 
with paragraph (c)(7) of this section, the payment of agency matching 
contributions must also be suspended.
    (10) If a participant transfers to an employing agency different 
from the one by which the participant was employed at the time of the 
missed contributions, it remains the responsibility of the former 
employing agency to determine whether employing agency error was 
responsible for the missed contributions. If it is determined that such 
an error has occurred, the current agency must take any necessary steps 
to correct the error. The current agency may seek reimbursement from the 
former agency of any amount that would have been paid by the former 
agency had the error not occurred.
    (11) Employee makeup contributions may be made only by payroll 
deduction from basic pay or, for uniformed services participants, from 
basic pay, incentive pay, or special pay, including bonus pay. 
Contributions by check, money order, cash, or other form of payment 
directly from the participant to the TSP, or from the participant to the 
employing agency for deposit to the TSP, are not permitted.

[68 FR 35498, June 13, 2003, as amended at 70 FR 32210, June 1, 2005]



Sec. 1605.12  Removal of erroneous contributions.

    (a) Applicability. This section applies to the removal of funds 
erroneously contributed to the TSP. The TSP calls this action a negative 
adjustment, and agencies may only request negative adjustments of 
erroneous contributions made on or after January 1, 2000. Excess 
contributions addressed by this section include, for example, excess 
employee contributions that result from employing agency error and 
excess employer contributions. This section does not address excess 
contributions resulting from a FERCCA correction; those contributions 
are addressed in Sec. 1605.14.
    (b) Method of correction. Negative adjustment records must be 
submitted by employing agencies in accordance with this part and any 
other procedures provided by the Board.
    (1) To remove money from a participant's account, the employing 
agency must submit, for each attributable pay date involved, a negative 
adjustment record stating the attributable pay date and the amount, by 
source, of the erroneous contribution.
    (2) A negative adjustment record may be for any part of the 
contributions made for the attributable pay date. However, for each 
source of contributions, the negative adjustment may not exceed the 
amount of the contributions made for that date, minus any prior negative 
adjustments for the same date.
    (c) Processing negative adjustments. To determine current value, a 
negative adjustment will be allocated among the TSP Funds as it would 
have been allocated on the attributable pay period (as reported by the 
employing agency).
    (1) If the attributable pay date for the erroneous contribution is 
on or before the date TSP accounts were converted to shares (and on or 
after January 1, 2000), the TSP will, for each source of contributions 
and investment fund:
    (i) Determine the dollar value of the amount to be removed by using 
the monthly returns for the applicable TSP Fund;
    (ii) Determine the number of shares that the dollar value determined 
in paragraph (c)(1)(i) of this section would have purchased on the 
conversion date; and
    (iii) Multiply the price per share for the date the adjustment is 
posted by the number of shares calculated in paragraph (c)(1)(ii) of 
this section.
    (2) If the attributable pay date of the negative adjustment is after 
the date TSP accounts were converted to shares, the TSP will, for each 
source of contributions and TSP Fund:
    (i) Determine the number of shares that represent the amount of the 
contribution to be removed using the share price on the attributable pay 
date; and
    (ii) Multiply the price per share on the date the adjustment is 
posted by the number of shares calculated in paragraph (c)(2)(i) of this 
section.

[[Page 203]]

    (d) Employee contributions. The following rules apply to negative 
adjustments involving employee contributions:
    (1) If, on the posting date, the amount calculated under paragraph 
(c) of this section is equal to or greater than the amount of the 
proposed negative adjustment, the full amount of the adjustment will be 
removed from the participant's account and returned to the employing 
agency. Earnings on the erroneous contribution will remain in the 
participant's account;
    (2) If, on the posting date, the amount calculated under paragraph 
(c) of this section is less than the amount of the proposed negative 
adjustment, the amount of the adjustment, reduced by the investment 
loss, will be removed from the participant's account and returned to the 
employing agency. However, the employing agency must refund to the 
participant the full amount of the erroneous contribution;
    (3) If an employing agency requests the removal of erroneous 
employee contributions from a participant's account, it must also 
request the removal, under paragraph (e) of this section, of any 
attributable agency matching contributions; and
    (4) If all employee contributions are removed from a participant's 
account under the rules set forth in this section, the earnings 
attributable to those contributions will remain in the account until the 
participant removes them with an in-service or a post-employment 
withdrawal. If the participant is not eligible to maintain a TSP 
account, the employing agency must submit an employee data record to the 
TSP indicating that the participant has separated from Federal service 
(this will allow the TSP-ineligible participant to make a post-
employment withdrawal election).
    (e) Employer contributions. The following rules apply to negative 
adjustments involving erroneous employer contributions:
    (1) The amount calculated under paragraph (c) of this section will 
be removed from the participant's account.
    (2) Erroneous employer contributions will be returned to the 
employing agency only if the negative adjustment record is posted by the 
TSP record keeper within one year of the date the erroneous contribution 
was posted. If one year or more has elapsed when the negative adjustment 
record is posted, the amount computed under paragraph (c) of this 
section will be removed from the participant's account and used to 
offset TSP administrative expenses;
    (3) If the erroneous contribution has been in the participant's 
account for less than one year when the negative adjustment record is 
posted and the amount computed under paragraph (c) of this section is 
equal to or greater than the amount of the adjustment, the employing 
agency will receive the full amount of the erroneous contribution. Any 
earnings attributable to the erroneous contribution will be removed from 
the participant's account and used to offset TSP administrative 
expenses;
    (4) If the erroneous contribution has been in the participant's 
account for less than one year when the negative adjustment record is 
posted, and the amount computed under paragraph (c) of this section is 
less than the amount of the adjustment, the employing agency will 
receive the amount of the erroneous contribution reduced by the 
investment loss; and
    (5) An employing agency's obligation to submit negative adjustment 
records to remove erroneous contributions from a participant's account 
is not affected by the length of time the contributions have been in the 
account.
    (f)(1) If multiple negative adjustments for the same attributable 
pay date for a participant are posted on the same business day, the 
amount removed from the participant's account and used to offset TSP 
administrative expenses, or returned to the employing agency, will be 
determined separately for each adjustment. Earnings and losses for 
erroneous contributions made on different dates will not be netted 
against each other. In addition, for a negative adjustment for any 
attributable pay date, gains and losses from different sources of 
contributions or different TSP Funds will not be netted against each 
other. Instead, for each attributable pay date each source of 
contributions and each TSP Fund will be treated separately for purposes 
of

[[Page 204]]

these calculations. The amount computed by applying the rules in this 
section will be removed from the participant's account pro rata from all 
funds, by source, based on the allocation of the participant's account 
among the TSP Funds when the transaction is posted; and
    (2) If there is insufficient money in the same source of 
contributions to cover the amount to be removed or the amount of the 
requested adjustment, the negative adjustment record will be rejected.

[70 FR 32210, June 1, 2005]



Sec. 1605.13  Back pay awards and other retroactive pay adjustments.

    (a) Participant not employed. The following rules apply to 
participants who receive a back pay award or other retroactive pay 
adjustment for a period during which the participant was separated from 
Government employment:
    (1) If the participant is reinstated to Government employment, 
immediately upon reinstatement the employing agency must give the 
participant the opportunity to submit a contribution election to make 
current contributions. The contribution election will be effective as 
soon as administratively feasible, but no later than the first day of 
the first full pay period after it is received;
    (2) The employing agency must give the participant the following 
options for electing makeup contributions:
    (i) If the participant had a contribution election on file when he 
or she separated, upon the participant's reinstatement to Government 
employment, that election will be reinstated for purposes of the makeup 
contributions; or
    (ii) Instead of making contributions for the period of separation in 
accordance with the reinstated contribution election, the participant 
may submit a new contribution election if he or she would have been 
eligible to make such an election but for the erroneous separation.
    (3) All contributions made under this paragraph (a) and associated 
breakage will be invested according to the participant's contribution 
allocation on the posting date. Breakage will be calculated using the G 
Fund share prices in accordance with Sec. 1605.2 unless otherwise 
required by the employing agency or the court or other tribunal with 
jurisdiction over the back pay case.
    (b) Participant employed. The following rules apply to participants 
who receive a back pay award or other retroactive pay adjustment for a 
period during which the participant was not separated from Government 
employment:
    (1) The participant will be entitled to make up contributions for 
the period covered by the back pay award or retroactive pay adjustment 
only if for that period--
    (i) The participant had designated a percentage of basic pay to be 
contributed to the TSP; or
    (ii) The participant had designated a dollar amount of contributions 
each pay period which equaled the applicable ceiling (FERS or CSRS) on 
contributions per pay period, and which, therefore, was limited as a 
result of the reduction in pay that is made up by the back pay award or 
other retroactive pay adjustment;
    (2) The employing agency must compute the amount of additional 
employee contributions, agency matching contributions, and agency 
automatic (1%) contributions that would have been contributed to the 
participant's account had the reduction in pay leading to the back pay 
award or other retroactive pay adjustment not occurred; and
    (3) All contributions under this paragraph (b) and associated 
breakage will be posted to the participant's account based on the 
participant's contribution allocation on the posting date. Breakage will 
be calculated in accordance with Sec. 1605.2.
    (c) Contributions to be deducted before payment or other retroactive 
pay adjustment. Employee makeup contributions required under paragraphs 
(a) and (b) of this section:
    (1) Must be computed before the back pay award or other retroactive 
pay adjustment is paid, deducted from the back pay or other retroactive 
pay adjustment, and submitted to the TSP record keeper;
    (2) Must not cause the participant to exceed the annual contribution 
limit(s) contained in sections 402(g) and 415(c) of the I.R.C. (26 
U.S.C. 402(g) and 415(c))

[[Page 205]]

for the year(s) with respect to which the contributions are being made, 
taking into consideration the TSP contributions already made in (or with 
respect to) that year; and
    (3) Must be accompanied by attributable agency matching 
contributions. In any event, regardless of whether a participant elects 
to make up employee contributions, the employing agency must make all 
appropriate agency automatic (1%) contributions associated with the back 
pay award or other retroactive pay adjustment.
    (d) Prior withdrawal of TSP account. If a participant has withdrawn 
his or her TSP account other than by purchasing an annuity, and the 
separation from Federal service upon which the withdrawal was based is 
reversed, resulting in reinstatement of the participant without a break 
in service, the participant will have the option to restore the amount 
withdrawn to his or her TSP account. The right to restore the withdrawn 
funds will expire if the participant does not notify the Board within 90 
days of reinstatement. If the participant returns the funds that were 
withdrawn, the number of shares purchased will be determined by using 
the share price of the applicable investment fund on the posting date. 
Restored funds will not incur breakage.
    (e) Participants who are covered by paragraph (d) of this section 
and who elect to return funds that were withdrawn may also elect to 
reinstate a loan which was previously declared to be a taxable 
distribution.

[66 FR 44277, Aug. 22, 2001, as amended at 68 FR 35500, June 13, 2003; 
68 FR 74451, Dec. 23, 2003; 70 FR 32211, June 1, 2005]



Sec. 1605.14  Misclassified retirement system coverage.

    (a) If a CSRS participant is misclassified by an employing agency as 
a FERS participant, when the misclassification is corrected:
    (1) Employee contributions that exceed the applicable contribution 
percentage for the pay period(s) involved may remain in the 
participant's account. The participant may request the return of excess 
employee contributions made on or after January 1, 2000; those 
contributed before January 1, 2000, must remain in the participant's 
account. If the participant requests a refund of employee contributions, 
the employing agency must submit a negative adjustment records to remove 
these funds, under the procedure described in Sec. 1605.12.
    (2) The TSP will forfeit all agency contributions that were made to 
a CSRS participant's account. An employing agency may submit a negative 
adjustment record to request the return of an erroneous contribution 
that has been in the participant's account for less than one year.
    (b) If a FERS participant is misclassified by an employing agency as 
a CSRS participant, when the misclassification is corrected:
    (1) The participant may not elect to have the contributions made 
while classified as CSRS removed from his or her account;
    (2) The participant may, under the rules of Sec. 1605.11, elect to 
make up contributions that he or she would have been eligible to make as 
a FERS participant during the period of misclassification;
    (3) The employing agency must, under the rules of Sec. 1605.11, 
make agency automatic (1%) contributions and agency matching 
contributions on employee contributions that were made while the 
participant was misclassified;
    (4) If the retirement coverage correction is a FERCCA correction, 
the employing agency must submit makeup employee contributions on late 
payment records. The participant is entitled to breakage on 
contributions from all three sources. Breakage will be calculated 
pursuant to Sec. 1605.2. If the retirement coverage correction is not a 
FERCCA correction, the employing agency must submit makeup employee 
contributions on current payment records; in such cases, the employee is 
not entitled to breakage. Agency makeup contributions may be submitted 
on either current or late payment records; and
    (5) If employee contributions were made up before the Office of 
Personnel Management implemented its regulations on FERCCA correction, 
and the correction is considered to be a

[[Page 206]]

FERCCA correction, an amount to replicate TSP lost earnings will be 
calculated by the Office of Personnel Management pursuant to its 
regulations and provided to the employing agency for transmission to the 
TSP record keeper.
    (c) If a participant was misclassified as either FERS or CSRS and 
the retirement coverage is corrected to FICA only, the participant is no 
longer eligible to participate in the TSP.
    (1) Employee contributions in the account are subject to the rules 
in paragraph (a)(1) of this section.
    (2) Employer contributions in the account are subject to the rules 
in paragraphs (a)(2) and (a)(3) of this section.
    (3) The TSP will consider a participant to be separated from Federal 
service for all TSP purposes and the employing agency must submit an 
employee data record to reflect separation from Federal service. If the 
participant has an outstanding loan, it will be subject to the 
provisions of 5 CFR 1655.13. The participant may make a TSP post-
employment withdrawal election pursuant to 5 CFR part 1650, subpart B, 
and the withdrawal will be subject to the provisions of 5 CFR 
1650.60(b).
    (d) If a FERS or CSRS participant is misclassified by an employing 
agency as FICA only, when the misclassification is corrected the 
participant may, pursuant to Sec. 1605.11 of this part, elect to make 
up contributions that he or she would have been eligible to make as a 
FERS or CSRS participant during the period of misclassification. If the 
participant makes up employee contributions, the rules in paragraph 
(b)(5) of this section apply. If the participant is corrected to FERS, 
the rules in paragraphs (b)(3) and (b)(4) of this section also apply.

[66 FR 44277, Aug. 22, 2001, as amended at 68 FR 35500, June 13, 2003; 
68 FR 74451, Dec. 23, 2003; 70 FR 32212, June 1, 2005]



Sec. 1605.15  Reporting and processing late contributions and late loan 

payments.

    (a) The employing agency must promptly submit late contributions to 
the TSP record keeper on behalf of the affected participant on late 
payment records as soon as the error is discovered. For each pay date 
involved, the employing agency must submit a separate record showing the 
``as of'' date for the contributions. Breakage for both employee and 
agency contributions will be calculated, posted, and charged to the 
agency or forfeited to the TSP in accordance with Sec. 1605.2.
    (b) If an employing agency deducts loan payments from a 
participant's pay, but fails to submit those payments to the TSP for the 
pay date for which they were deducted (or submits them in a manner that 
prevents them from being timely credited to the participant's account), 
the employing agency will be responsible for paying breakage using the 
procedure described in Sec. 1605.2. The loan payment record must 
contain the ``as of'' date for which the loan payment was deducted.
    (c) All contributions or loan payments on payment records contained 
in a payroll submission that was received from an employing agency more 
than 30 days after the pay date associated with the payroll submission 
(as reported on the appropriate journal voucher), will be subject to 
breakage calculated, posted, and charged to the employing agency (or 
forfeited to the TSP) in accordance with Sec. 1605.2. The employing 
agency will be apprised of the breakage due for each record reported on 
the late submission.

[68 FR 35501, June 13, 2003]



Sec. 1605.16  Claims for correction of employing agency errors; time 

limitations.

    (a) Agency's discovery of error. Upon discovery of an error made 
within the past six months involving the correct or timely remittance of 
payments to the TSP (other than a retirement system misclassification 
error, as covered in paragraph (c) of this section), an employing agency 
must promptly correct the error on its own initiative. If the error was 
made more than six months before it was discovered, the agency may 
exercise sound discretion in deciding whether to correct it, but, in any 
event, the agency must act promptly in doing so.
    (b) Participant's discovery of error. If an agency fails to discover 
an error of which a participant has knowledge involving the correct or 
timely remittance of a payment to the TSP (other

[[Page 207]]

than a retirement system misclassification error as covered by paragraph 
(c) of this section), the participant may file a claim with his or her 
employing agency to have the error corrected without a time limit. The 
agency must promptly correct any such error for which the participant 
files a claim within six months of its occurrence; if the participant 
files a claim to correct any such error after that time, the agency may 
do so at its sound discretion.
    (c) Retirement system misclassification error. Errors arising from 
retirement system misclassification must be corrected no matter when 
they are discovered, whether by an agency or a participant.
    (d) Agency procedures. Each employing agency must establish 
procedures for participants to submit claims for correction under this 
subpart. Each employing agency's procedures must include the following:
    (1) The employing agency must provide the participant with a 
decision on any claim within 30 days of its receipt, unless the 
employing agency provides the participant with good cause for requiring 
a longer period to decide the claim. A decision to deny a claim in whole 
or in part must be in writing and must include the reasons for the 
denial, citations to any applicable statutes, regulations, or 
procedures, a description of any additional material that would enable 
the participant to perfect the claim, and a statement of the steps 
necessary to appeal the denial;
    (2) The employing agency must permit a participant at least 30 days 
to appeal the employing agency's denial of all or any part of a claim 
for correction under this subpart. The appeal must be in writing and 
addressed to the agency official designated in the initial decision or 
in procedures promulgated by the agency. The participant may include 
with his or her appeal any documentation or comments that the 
participant deems relevant to the claim;
    (3) The employing agency must issue a written decision on a timely 
appeal within 30 days of receipt of the appeal, unless the employing 
agency provides the participant with good cause for requiring a longer 
period to decide the appeal. The employing agency decision must include 
the reasons for the decision, as well as citations to any applicable 
statutes, regulations, or procedures; and
    (4) If the agency decision on the appeal is not issued in a timely 
manner, or if the appeal is denied in whole or in part, the participant 
will be deemed to have exhausted his or her administrative remedies and 
will be eligible to file suit against the employing agency under 5 
U.S.C. 8477. There is no administrative appeal to the Board of a final 
agency decision.

[66 FR 44277, Aug. 22, 2001, as amended at 70 FR 32212, June 1, 2005]



               Subpart C_Board or TSP Record Keeper Errors



Sec. 1605.21  Plan-paid breakage and other corrections.

    (a) Plan-paid breakage. (1) Subject to paragraph (a)(3) of this 
section, if, because of an error committed by the Board or the TSP 
record keeper, a participant's account is not credited or charged with 
the investment gains or losses the account have received had the error 
not occurred, the account will be credited accordingly.
    (2) Errors that warrant the crediting of breakage under paragraph 
(a)(1) of this section include, but are not limited to:
    (i) Delay in crediting contributions or other money to a 
participant's account;
    (ii) Improper issuance of a loan or withdrawal payment to a 
participant or beneficiary which requires the money to be restored to 
the participant's account; and
    (iii) Investment of all or part of a participant's account in the 
wrong investment fund(s).
    (3) A participant will not be entitled to breakage under paragraph 
(a)(1) of this section if the participant had the use of the money on 
which the investment gains would have accrued.
    (4) If the participant continued to have a TSP account, or would 
have continued to have a TSP account but for the Board or TSP record 
keeper's error, the TSP will compute gains or losses under paragraph 
(a)(1) of this section for the relevant period based

[[Page 208]]

upon the investment funds in which the affected money would have been 
invested had the error not occurred. If the participant did not have, 
and should not have had, a TSP account during this period, then the TSP 
will use the G Fund rate of return for the relevant period and return 
the money to the participant.
    (b) Other corrections. The Executive Director may, in his discretion 
and consistent with the requirements of applicable law, correct any 
other errors not specifically addressed in this section, including 
payment of breakage, if the Executive Director determines that the 
correction would serve the interests of justice and fairness and equity 
among all participants of the TSP.

[70 FR 32212, June 1, 2005]



Sec. 1605.22  Claims for correction of Board or TSP record keeper errors; 

time limitations.

    (a) Filing claims. Claims for correction of Board or TSP record 
keeper errors under this subpart may be submitted initially either to 
the TSP record keeper or the Board. The claim must be in writing and may 
be from the affected participant or beneficiary.
    (b) Board's or TSP record keeper's discovery of error. (1) Upon 
discovery of an error made within the past six months involving a 
receipt or a disbursement, the Board or TSP record keeper must promptly 
correct the error on its own initiative. If the error was made more than 
six months before its discovery, the Board or the TSP record keeper may 
exercise sound discretion in deciding whether to correct the error, but, 
in any event, must act promptly in doing so.
    (2) For errors concerning contribution allocations or interfund 
transfers, the Board or the TSP record keeper must promptly correct the 
error if it is discovered before 30 days after the issuance of the 
earlier of the most recent TSP participant (or loan) statement or 
transaction confirmation that reflected the error. If it is discovered 
after that time, the Board or TSP record keeper may use its sound 
discretion in deciding whether to correct it, but, in any event, must 
act promptly in doing so.
    (c) Participant's or beneficiary's discovery of error. (1) If the 
Board or TSP record keeper fails to discover an error of which a 
participant or beneficiary has knowledge involving a receipt or a 
disbursement, the participant or beneficiary may file a claim for 
correction of the error with the Board or the TSP record keeper without 
time limit. The Board or the TSP record keeper must promptly correct any 
such error for which the participant or beneficiary filed a claim within 
six months of its occurrence; the correction of any such error for which 
the participant or beneficiary filed a claim after that time is in the 
sound discretion of the Board or TSP record keeper.
    (2) For errors involving contribution allocations or interfund 
transfers of which a participant or beneficiary has knowledge, he or she 
may file a claim for correction with the Board or TSP record keeper no 
later than 30 days after the TSP provides the participant with a 
transaction confirmation reflecting the error, or makes available on its 
Web site a participant statement detailing the error. The Board or TSP 
record keeper must promptly correct such errors.
    (3) If a participant or beneficiary fails to file a claim for 
correction of contribution allocations or interfund transfers in a 
timely manner, the Board or TSP record keeper may nevertheless, in its 
sound discretion, correct any such error that is brought to its 
attention.
    (d) Processing claims. (1) If the initial claim is submitted to the 
TSP record keeper, the TSP record keeper may either respond directly to 
the claimant, or may forward the claim to the Board for response. If the 
TSP record keeper responds to a claim, and all or any part of the claim 
is denied, the claimant may request review by the Board within 90 days 
of the date of the record keeper's response.
    (2) If the Board denies all or any part of a claim (whether upon 
review of a TSP record keeper denial or upon an initial review by the 
Board), the claimant will be deemed to have exhausted his or her 
administrative remedy and may file suit under 5 U.S.C. 8477. If the 
claimant does not submit a request to the Board for review of a claim 
denial

[[Page 209]]

by the TSP record keeper within the 90 days permitted under paragraph 
(d)(1) of this section, the claimant will be deemed to have accepted the 
TSP record keeper's decision.

[66 FR 44277, Aug. 22, 2001, as amended at 70 FR 32212, June 1, 2005]



                   Subpart D_Miscellaneous Provisions



Sec. 1605.31  Contributions missed as a result of military service.

    (a) Applicability. This section applies to employees who meet the 
conditions specified at 5 CFR 1620.40 and who are eligible to make up 
employee contributions or to receive employing agency contributions 
missed as a result of military service.
    (b) Missed employee contributions. An employee who separates or 
enters nonpay status to perform military service may be eligible to make 
up TSP contributions when he or she is reemployed or restored to pay 
status in the civilian service. Eligibility for making up missed 
employee contributions will be determined in accordance with the rules 
specified at 5 CFR part 1620, subpart E. Missed employee contributions 
must be made up in accordance with the rules set out in Sec. 1605.11(c) 
and 5 CFR 1620.42.
    (c) Missed agency contributions. This paragraph (c) applies only to 
an employee who would have been eligible to receive agency contributions 
had he or she remained in civilian service or pay status. A FERS 
employee who separates or enters nonpay status to perform military 
service is eligible to receive agency makeup contributions when he or 
she is reemployed or restored to pay status in the civilian service, as 
follows:
    (1) The employee is entitled to receive the agency automatic (1%) 
contributions that he or she would have received had he or she remained 
in civilian service or pay status. Within 60 days of the employee's 
reemployment or restoration to pay status, the employing agency must 
calculate the agency automatic (1%) makeup contributions and report 
those contributions to the record keeper.
    (2) An employee who contributed to a uniformed services TSP account 
during the period of military service is also immediately entitled to 
receive agency matching makeup contributions to his or her civilian 
account for the employee contributions to the uniformed services account 
that were deducted from his or her basic pay, subject to any reduction 
in matching contributions required by paragraph (c)(4) of this section. 
However, an employee is not entitled to receive agency matching makeup 
contributions on contributions that were deducted from his or her 
incentive pay or special pay, including bonus pay, while performing 
military service.
    (3) An employee who makes up missed contributions is entitled to 
receive attributable agency matching makeup contributions (unless the 
employee has already received the maximum amount of matching 
contributions, as described in paragraphs (c)(2) and (c)(4) of this 
section).
    (4) If the employee received uniformed services matching 
contributions, the agency matching makeup contributions will be reduced 
by the amount of the uniformed services matching contributions.
    (d) Breakage. The employee is entitled to breakage on agency 
contributions made under paragraph (c) of this section. The employee 
will elect to have the calculation based on either the contribution 
allocation(s) on file for the participant during the period of military 
service or the G Fund; the participant must make this election at the 
same time his or her makeup schedule is established pursuant to Sec. 
1605.11(c).

[67 FR 49525, July 30, 2002, as amended at 70 FR 32212, June 1, 2005]

                          PART 1606 [RESERVED]



PART 1620_EXPANDED AND CONTINUING ELIGIBILITY--Table of Contents




                            Subpart A_General

Sec.
1620.1 Application.
1620.2 Definitions.
1620.3 Contributions.

[[Page 210]]

1620.4 Notices.

 Subpart B_Cooperative Extension Service, Union, and Intergovernmental 
                         Personnel Act Employees

1620.10 Definition.
1620.11 Scope.
1620.12 Employing authority contributions.
1620.13 Retroactive contributions.
1620.14 Payment to the record keeper.

                      Subpart C_Justices and Judges

1620.20 Scope.
1620.21 Contributions.
1620.22 Withdrawals.
1620.23 Spousal rights.

                Subpart D_Nonappropriated Fund Employees

1620.30 Scope.
1620.31 Definition.
1620.32 Employees who move to a NAF instrumentality on or after August 
          10, 1996.
1620.33 [Reserved]
1620.34 Employees who move from a NAF instrumentality to a Federal 
          Government agency.
1620.35 Loan payments.
1620.36 Transmission of information.

  Subpart E_Uniformed Services Employment and Reemployment Rights Act 
                    (USERRA)_Covered Military Service

1620.40 Scope.
1620.41 Definitions.
1620.42 Processing TSP contribution elections.
1620.43 Agency payments to record keeper; agency ultimately responsible.
1620.44 Restoring forfeited agency automatic (1%) contributions.
1620.45 Suspending TSP loans, restoring post-employment withdrawals, and 
          reversing taxable distributions.
1620.46 Agency responsibilities.

    Authority: 5 U.S.C. 8474(b)(5) and (c)(1).
    Subpart C also issued under 5 U.S.C. 8440a(b)(7), 8440b(b)(8), and 
8440c(b)(8).
    Subpart D also issued under sec. 1043(b) of Pub. L. 104-106, 110 
Stat. 186, and sec. 7202(m)(2) of Pub. L. 101-508, 104 Stat. 1388.
    Subpart E also issued under 5 U.S.C. 8432b(1) and 8440e.

    Source: 64 FR 31057, June 9, 1999, unless otherwise noted.



                            Subpart A_General



Sec. 1620.1  Application.

    The Federal Employees' Retirement System Act of 1986 (codified as 
amended largely at 5 U.S.C. 8351 and 8401 through 8479) originally 
limited TSP eligibility to specifically named groups of employees. On 
various occasions, Congress has since expanded TSP eligibility to other 
groups. Depending on the circumstances, that subsequent legislation 
requires retroactive contributions or provides other special features. 
Where necessary, this part describes those special features. The 
employees and employing agencies covered by this part are also governed 
by the other regulations in 5 CFR chapter VI to the extent that they do 
not conflict with the regulations of this part.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32213, June 1, 2005]



Sec. 1620.2  Definitions.

    The definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.

[70 FR 32213, June 1, 2005]



Sec. 1620.3  Contributions.

    The employing agency is responsible for transmitting to the Board's 
record keeper, in accordance with Board procedures, any employee and 
employer contributions that are required by this part.



Sec. 1620.4  Notices.

    An employing agency must notify affected employees of the 
application of this part as soon as practicable.



 Subpart B_Cooperative Extension Service, Union, and Intergovernmental 
                         Personnel Act Employees



Sec. 1620.10  Definition.

    As used in this subpart, employing authority means the entity that 
employs an individual described in Sec. 1620.11 and which has the 
authority to make personnel compensation decisions for such employee.



Sec. 1620.11  Scope.

    This subpart applies to any individual participating in CSRS or FERS 
who:

[[Page 211]]

    (a) Has been appointed or otherwise assigned to one of the 
cooperative extension services, as defined in 7 U.S.C. 3103(5);
    (b) Has entered on approved leave without pay to serve as a full-
time officer or employee of an organization composed primarily of 
employees as defined by 5 U.S.C. 8331(1) and 8401(11); or
    (c) Has been assigned, on an approved leave-without-pay basis, from 
a Federal agency to a state or local government under 5 U.S.C. chapter 
33, subchapter VI.



Sec. 1620.12  Employing authority contributions.

    The employing authority, at its sole discretion, may choose to make 
employer contributions under 5 U.S.C. 8432(c) for employees who are 
covered under FERS. Such contributions may be made for any period of 
eligible service after January 1, 1984, provided that the employing 
agency must treat all its employees who are eligible to receive employer 
contributions in the same manner. The employing authority can commence 
or terminate employer contributions at any time after providing all 
affected employees with notice of a decision to commence or terminate 
such contributions at least 45 days before the beginning of the 
applicable election period. The employing authority may not contribute 
to the TSP on behalf of CSRS employees.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32213, June 1, 2005]



Sec. 1620.13  Retroactive contributions.

    (a) An employing authority can make retroactive employer 
contributions on behalf of FERS employees described in this subpart, but 
cannot duplicate employer contributions already made to the TSP.
    (b) An employing authority making retroactive employing agency 
contributions on behalf of a FERS employee described in Sec. 1620.12 
must continue those contributions (but only to the extent they relate to 
service with the employing authority) if the employee returns to his or 
her agency of record or is transferred to another Federal agency without 
a break in service.
    (c) CSRS and FERS employees covered by this subpart can make 
retroactive employee contributions relating to periods of service 
described in Sec. 1620.12, unless they already have been given the 
opportunity to make contributions for these periods of service.



Sec. 1620.14  Payment to the record keeper.

    (a) The employing authority of a cooperative extension service 
employee (described at Sec. 1620.11(a)) is responsible for transmitting 
employer and employee contributions to the TSP record keeper.
    (b) The employing authority of a union employee or an 
Intergovernmental Personnel Act employee (described at Sec. 1620.11(b) 
and (c), respectively) is responsible for transmitting employer and 
employee contributions to the employee's Federal agency of record. 
Employee contributions will be deducted from the employee's actual pay. 
The employee's agency of record is responsible for transmitting the 
employer and employee's contributions to the TSP record keeper in 
accordance with Board procedures. The employee's election form (TSP-1) 
will be filed in the employee's official personnel folder or other 
similar file maintained by the employing authority.



                      Subpart C_Justices and Judges



Sec. 1620.20  Scope.

    (a) This subpart applies to:
    (1) A justice or judge of the United States as defined in 28 U.S.C. 
451;
    (2) A bankruptcy judge appointed under 28 U.S.C. 152 or a United 
States magistrate judge appointed under 28 U.S.C. 631 who has chosen to 
receive a judges' annuity described at 28 U.S.C. 377 or section 2(c) of 
the Retirement and Survivors' Annuities for Bankruptcy Judges and 
Magistrates Act of 1988, Public Law 100-659, 102 Stat. 3910-3921;
    (3) A judge of the United States Court of Federal Claims appointed 
under 28 U.S.C. 171 whose retirement is covered by 28 U.S.C. 178; and
    (4) A judge of the Court of Veterans Appeals appointed under 38 
U.S.C. 7253.
    (b) This subpart does not apply to a bankruptcy judge or a United 
States

[[Page 212]]

magistrate judge who has not chosen a judges' annuity, or to a judge of 
the United States Court of Federal Claims who is not covered by 28 
U.S.C. 178. Those individuals may participate in the TSP only if they 
are otherwise covered by CSRS or FERS.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32213, June 1, 2005]



Sec. 1620.21  Contributions.

    (a) An individual covered under this subpart can make contributions 
to the TSP from basic pay in the amount described at 5 CFR 
1600.22(a)(1). Unless stated otherwise in this subpart, he or she is 
covered by the same rules that apply to a CSRS participant in the TSP.
    (b) The following amounts are not basic pay and no TSP contributions 
can be made from them:
    (1) An annuity or salary received by a justice or judge of the 
United States (as defined in 28 U.S.C. 451) who is retired under 28 
U.S.C. 371(a) or (b), or 372(a);
    (2) Amounts received by a bankruptcy judge or a United States 
magistrate judge under a judges' annuity described at 28 U.S.C. 377;
    (3) An annuity or salary received by a judge of the United States 
Court of Federal Claims under 28 U.S.C. 178; and
    (4) Retired pay received by a judge of the United States Court of 
Veterans Appeals under 38 U.S.C. 7296.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32213, June 1, 2005]



Sec. 1620.22  Withdrawals.

    (a) Post-employment withdrawal. An individual covered under this 
subpart can make a post-employment withdrawal election described at 5 
U.S.C. 8433(b):
    (1) Upon separation from Government employment.
    (2) In addition to the circumstance described in paragraph (a)(1) of 
this section, a post-employment withdrawal election can be made by:
    (i) A justice or judge of the United States (as defined in 28 U.S.C. 
451) who retires under 28 U.S.C. 317(a) or (b) or 372(a);
    (ii) A bankruptcy judge or a United States magistrate judge 
receiving a judges' annuity under 28 U.S.C. 377;
    (iii) A judge of the United States Court of Federal Claims receiving 
an annuity or salary under 28 U.S.C. 178; and
    (iv) A judge of the United States Court of Veterans Appeals 
receiving retired pay under 38 U.S.C. 7296.
    (b) In-service withdrawals. An individual covered under this subpart 
can request an in-service withdrawal described at 5 U.S.C. 8433(h) if he 
or she:
    (1) Has not separated from Government employment; and
    (2) Is not receiving retired pay as described in paragraph (a)(2) of 
this section.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32213, June 1, 2005]



Sec. 1620.23  Spousal rights.

    (a) The current spouse of a justice or judge of the United States 
(as defined in 28 U.S.C. 451), or of a Court of Veterans Appeals judge, 
possesses the rights described at 5 U.S.C. 8351(b)(5).
    (b) A current or former spouse of a bankruptcy judge, a United 
States magistrate judge, or a judge of the United States Court of 
Federal Claims, possesses the rights described at 5 U.S.C. 8435 and 8467 
if the judge is covered under this subpart.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32213, June 1, 2005]



                Subpart D_Nonappropriated Fund Employees



Sec. 1620.30  Scope.

    This subpart applies to any employee of a Nonappropriated Fund (NAF) 
instrumentality of the Department of Defense (DOD) or the U.S. Coast 
Guard who elects to be covered by CSRS or FERS and to any employee in a 
CSRS- or FERS-covered position who elects to be covered by a retirement 
plan established for employees of a NAF instrumentality pursuant to the 
Portability of Benefits for Nonappropriated Fund Employees Act of 1990, 
Public Law 101-508, 104 Stat. 1388, 1388-335 to 1388-341, as amended 
(codified largely at 5 U.S.C. 8347(q) and 8461(n)).

[[Page 213]]



Sec. 1620.31  Definition.

    As used in this subpart, move means moving from a position covered 
by CSRS or FERS to a NAF instrumentality of the DOD or Coast Guard, or 
vice versa, without a break in service of more than one year.



Sec. 1620.32  Employees who move to a NAF instrumentality on or after August 

10, 1996.

    Any employee who moves from a CSRS- or FERS-covered position to a 
NAF instrumentality on or after August 10, 1996, and who elects to 
continue to be covered by CSRS or FERS, will be eligible to contribute 
to the TSP as determined in accordance with 5 CFR part 1600.



Sec. 1620.33  [Reserved]



Sec. 1620.34  Employees who move from a NAF instrumentality to a Federal 

Government agency.

    (a) An employee of a NAF instrumentality who moves from a NAF 
instrumentality to a Federal Government agency and who elects to be 
covered by a NAF retirement system is not eligible to participate in the 
TSP. Any TSP contributions relating to a period for which an employee 
elects retroactive NAF retirement coverage must be removed from the TSP 
as required by the regulations at 5 CFR part 1605.
    (b) An employee of a NAF instrumentality who moves from a NAF 
instrumentality to a Federal Government agency and who elects to be 
covered by CSRS or FERS will become eligible to participate in the TSP 
as determined in accordance with 5 CFR part 1600.



Sec. 1620.35  Loan payments.

    NAF instrumentalities must deduct and transmit TSP loan payments for 
employees who elect to be covered by CSRS or FERS to the record keeper 
in accordance with 5 CFR part 1655 and Board procedures. Loan payments 
may not be deducted and transmitted for employees who elect to be 
covered by the NAF retirement system. Such employees will be considered 
to have separated from Government service and must prepay their loans or 
the TSP will declare the loan to be a taxable distribution.



Sec. 1620.36  Transmission of information.

    Any employee who moves to a NAF instrumentality must be reported by 
the losing Federal Government agency to the TSP record keeper as having 
transferred to a NAF instrumentality of the DOD or Coast Guard rather 
than as having separated from Government service. If the employee 
subsequently elects not to be covered by CSRS or FERS, the NAF 
instrumentality must submit an Employee Data Record to report the 
employee as having separated from Federal Government service as of the 
date of the move.



  Subpart E_Uniformed Services Employment and Reemployment Rights Act 
                    (USERRA)_Covered Military Service



Sec. 1620.40  Scope.

    To be covered by this subpart, an employee must have:
    (a) Separated from Federal civilian service or entered leave-
without-pay status in order to perform military service; and
    (b) Become eligible to seek reemployment or restoration to duty by 
virtue of a release from military service, discharge from 
hospitalization, or other similar event that occurred on or after August 
2, 1990; and
    (c) Been reemployed in, or restored to, a position covered by CSRS 
or FERS pursuant to the provisions of 38 U.S.C. chapter 43.



Sec. 1620.41  Definitions.

    As used in this subpart:
    Current contributions means contributions that must be made for the 
current pay date which is reported on the journal voucher that 
accompanies the payroll submission.
    Nonpay status means an employer-approved temporary absence from 
duty.
    Reemployed or returned to pay status means reemployed in or returned 
to a pay status, pursuant to 38 U.S.C. chapter 43, to a position that is 
subject to 5 U.S.C. 8351 or chapter 84.
    Retroactive period means the period for which an employee can make 
up missed employee contributions and receive missed agency 
contributions. It

[[Page 214]]

begins the day after the employee separates or enters nonpay status to 
perform military service and ends when the employee is reemployed or 
returned to pay status.
    Separate from civilian service means to cease employment with the 
Federal Government, the U.S. Postal Service, or with any other employer 
from a position that is deemed to be civilian Government employment for 
purposes of participating in the TSP, for 31 or more full calendar days.

[67 FR 49525, July 30, 2002]



Sec. 1620.42  Processing TSP contribution elections.

    (a) Current contribution election. If the employee entered nonpay 
status with a valid contribution election on file, the agency must 
immediately reinstate that election for current contributions when the 
employee returns to pay status, unless the employee files a new 
contribution election. If the employee separated to perform military 
service, he or she must make a new contribution election to begin 
current contributions.
    (b) Makeup contribution election. Upon reemployment or return to pay 
status, an employee has 60 days to elect to make up missed 
contributions. An employee's right to make retroactive TSP contributions 
will expire if an election is not made within 60 days of the 
participant's reemployment or return to pay status.
    (c) Makeup contributions. Makeup contributions will be processed as 
follows:
    (1) If the employee had a valid contribution election on file when 
he or she separated or entered nonpay status to perform military 
service, that election form will be reinstated for purposes of 
determining the makeup contributions, unless the employee submits a new 
contribution election which he or she could otherwise have made but for 
the performance of military service.
    (2) An employee who terminated contributions within two months of 
entering military service will also be eligible to make a retroactive 
contribution election to be effective on the date the contributions were 
terminated.

[70 FR 32213, June 1, 2005]



Sec. 1620.43  Agency payments to record keeper; agency ultimately 

responsible.

    (a) Agency making payments to record keeper. The current employing 
agency is responsible for making payments to the record keeper for all 
contributions, regardless of whether some of that expense is ultimately 
chargeable to a prior employing agency.
    (b) Agency ultimately chargeable with expense. The agency that 
reemployed the participant is ordinarily the agency ultimately 
chargeable with the expense of agency contributions and the breakage 
attributable to them. However, if an employee changed agencies during 
the period between the date of reemployment and October 13, 1994, the 
employing agency as of October 13, 1994, is the agency ultimately 
chargeable with the expense.
    (c) Reimbursement by agency ultimately chargeable with expense. If 
the agency that made the payments to the record keeper for agency 
contributions is not the agency ultimately chargeable for that expense, 
the agency that made the payments to the record keeper may, but is not 
required to, obtain reimbursement from the agency ultimately chargeable 
with the expense.

[70 FR 32213, June 1, 2005]



Sec. 1620.44  Restoring forfeited agency automatic (1%) contributions.

    If an employee's agency automatic (1%) contributions were forfeited 
because the employee was not vested when he or she separated to perform 
military service, the employee must notify the employing agency that a 
forfeiture occurred. The employing agency will follow the procedure 
described in Sec. 1620.46(e) to have those funds restored.

[64 FR 31057, June 9, 1999, as amended at 67 FR 49526, July 30, 2002]

[[Page 215]]



Sec. 1620.45  Suspending TSP loans, restoring post-employment withdrawals, 

and reversing taxable distributions.

    (a) Suspending TSP loans during nonpay status. If the TSP is 
notified that an employee entered into a nonpay status to perform 
military service, any outstanding TSP loan from a civilian TSP account 
will be suspended, that is, it will not be declared a taxable 
distribution while the employee is performing military service.
    (1) Interest will accrue on the loan balance during the period of 
suspension. When the employee returns to civilian pay status, the 
employing agency will resume deducting loan payments from the 
participant's basic pay and the TSP will reamortize the loan (which will 
include interest accrued during the period of military service). The 
maximum loan repayment term will be extended by the employee's period of 
military service. Consequently, when the employee returns to pay status, 
the TSP record keeper must receive documentation to show the beginning 
and ending dates of military service.
    (2) The TSP may close the loan account and declare it to be a 
taxable distribution if the TSP does not receive documentation that the 
employee entered into nonpay status. However, the taxable distribution 
can be reversed in accordance with paragraph (c) of this section.
    (b) Restoring post-employment withdrawals. An employee who separates 
from civilian service to perform military service and who receives an 
automatic cashout of his or her account may return to the TSP an amount 
equal to the amount of the payment. The employee must notify the TSP 
record keeper of his or her intent to return the withdrawn funds within 
90 days of the date the employee returns to civilian service or pay 
status; if the employee is eligible to return a withdrawal, the TSP 
record keeper will then inform the employee of the actions that must be 
taken to return the funds.
    (c) Reversing taxable distributions. An employee may request that a 
taxable loan distribution be reversed if the taxable distribution 
resulted from the employee's separation or placement in nonpay status to 
perform military service. The TSP will reverse the taxable distribution 
under the process described as follows:
    (1) An employee who received a post-employment withdrawal when he or 
she separated to perform military service can have a taxable 
distribution reversed only if the withdrawn amount is returned as 
described in paragraph (b) of this section;
    (2) A taxable loan distribution can be reversed either by 
reinstating the loan or by repaying it in full. The TSP loan can be 
reinstated only if the employee agrees to repay the loan within the 
maximum loan repayment term plus the length of military service, and if, 
after reinstatement of the loan, the employee will have no more than two 
outstanding loans, only one of which is a residential loan; and
    (3) The employee must notify the TSP record keeper of his or her 
intent to reverse a taxable loan distribution within 90 days of the date 
the employee returns to civilian service or pay status; if the employee 
is eligible to reverse a taxable loan distribution, the TSP record 
keeper will then inform the employee of the actions that must be taken 
to reverse the distribution.
    (d) Breakage. Employees will not receive breakage on amounts 
returned to their accounts under this section.

[67 FR 49526, July 30, 2002, as amended at 70 FR 32213, June 1, 2005]



Sec. 1620.46  Agency responsibilities.

    (a) General. Each employing agency must establish procedures for 
implementing these regulations. These procedures must at a minimum 
require agency personnel to identify eligible employees and notify them 
of their options under these regulations and the time period within 
which these options must be exercised.
    (b) Agency records; procedure for reimbursement. The agency making 
payments to the record keeper for all contributions and attributable 
breakage will obtain from prior employing agencies whatever information 
is necessary to make accurate payments. If a prior employing agency is 
ultimately chargeable under Sec. 1620.43(b) for all or

[[Page 216]]

part of this expense, the agency making the payments to the record 
keeper will determine the procedure to follow in order to collect 
amounts owed to it by the agency ultimately chargeable with the expense.
    (c) Payment schedule; matching contributions report. Agencies will, 
with the employee's consent, prepare a payment schedule for making 
retroactive employee contributions which will be consistent with the 
procedures established at 5 CFR part 1605 for the correction of 
employing agency errors.
    (d) Agency automatic (1%) contributions. Employing agencies must 
calculate the agency automatic (1%) contributions for all reemployed (or 
restored) FERS employees and report those contributions to the record 
keeper within 60 days of reemployment.
    (e) Forfeiture restoration. When notified by an employee that a 
forfeiture of the agency automatic (1%) contributions occurred after the 
employee separated to perform military service, the employing agency 
must complete and file the appropriate paper TSP form with the TSP 
record keeper in accordance with the form's instructions to have those 
funds restored.
    (f) Thrift Savings Plan Service Computation Date. The agencies must 
include the period of military service in the Thrift Savings Plan 
Service Computation Date (TSP-SCD) of all reemployed FERS employees. If 
the period of military service has not been credited, the agencies must 
submit an employee data record to the TSP record keeper containing the 
correct TSP Service Computation Date.

[64 FR 31057, June 9, 1999, as amended at 70 FR 32214, June 1, 2005]



PART 1630_PRIVACY ACT REGULATIONS--Table of Contents




Sec.
1630.1 Purpose and scope.
1630.2 Definitions.
1630.3 Publication of systems of records maintained.
1630.4 Request for notification and access.
1630.5 Granting access to a designated individual.
1630.6 Action on request.
1630.7 Identification requirements.
1630.8 Access of others to records about an individual.
1630.9 Access to the history (accounting) of disclosures from records.
1630.10 Denials of access.
1630.11 Requirements for requests to amend records.
1630.12 Action on request to amend a record.
1630.13 Procedures for review of determination to deny access to or 
          amendment of records.
1630.14 Appeals process.
1630.15 Exemptions.
1630.16 Fees.
1630.17 Federal agency requests.
1630.18 Penalties.

    Authority: 5 U.S.C. 552a.

    Source: 55 FR 18852, May 7, 1990, unless otherwise noted.



Sec. 1630.1  Purpose and scope.

    These regulations implement the Privacy Act of 1974, 5 USC 552a. The 
regulations apply to all records maintained by the Federal Retirement 
Thrift Investment Board that are contained in a system of records and 
that contain information about an individual. The regulations establish 
procedures that (a) authorize an individual's access to records 
maintained about him or her; (b) limit the access of other persons to 
those records; and (c) permit an individual to request the amendment or 
correction of records about him or her.



Sec. 1630.2  Definitions.

    For the purposes of this part--
    (a) Agency means agency as defined in 5 USC 552(e);
    (b) Board means the Federal Retirement Thrift Investment Board;
    (c) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence;
    (d) Maintain means to collect, use, or distribute;
    (e) Record means any item, collection, or grouping of information 
about an individual that is maintained by the Board or the record 
keeper, including but not limited to education, financial transactions, 
medical history, and criminal or employment history and that contains 
the individual's name, identifying number, symbol, or other identifying 
particular assigned to the individual, such as a finger or voice print 
or a photograph;

[[Page 217]]

    (f) Record keeper means the entity that is engaged by the Board to 
perform record keeping services for the TSP;
    (g) Routine use means, with respect to the disclosure of a record, 
the use of that record for a purpose which is compatible with the 
purpose for which it was collected;
    (h) System manager means the official of the Board who is 
responsible for the maintenance, collection, use, distribution, or 
disposal of information contained in a system of records;
    (i) System of records means a group of any records under the control 
of the Board from which information is retrieved by the name of the 
individual or other identifying particular assigned to the individual;
    (j) Statistical record means a record in a system of records 
maintained for statistical research or reporting purposes only and not 
used in whole or in part in making any determination about an 
identifiable individual, except as provided by 13 U.S.C. 8;
    (k) Subject individual means the individual by whose name or other 
identifying particular a record is maintained or retrieved;
    (l) TSP means the Thrift Savings Plan which is administered by the 
Board pursuant to 5 U.S.C. 8351 and chapter 84 (subchapters III and 
VII);
    (m) TSP participant means any individual for whom a TSP account has 
been established. This includes former participants, i.e., participants 
whose accounts have been closed;
    (n) TSP records means those records maintained by the record keeper;
    (o) VRS (Voice Response System) means the fully automated telephone 
information system for TSP account records;
    (p) Work days as used in calculating the date when a response is 
due, includes those days when the Board is open for the conduct of 
Government business and does not include Saturdays, Sundays and Federal 
holidays.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67693, 67695, Dec. 3, 
1999]



Sec. 1630.3  Publication of systems of records maintained.

    (a) Prior to the establishment or revision of a system of records, 
the Board will publish in the Federal Register notice of any new or 
intended use of the information in a system or proposed system and 
provide interested persons with a period within which to comment on the 
new or revised system. Technical or typographical corrections are not 
considered to be revisions of a system.
    (b) When a system of records is established or revised, the Board 
will publish in the Federal Register a notice about the system. The 
notice shall include:
    (1) The system name,
    (2) The system location,
    (3) The categories of individuals covered by the system,
    (4) The categories of records in the system,
    (5) The Board's authority to maintain the system,
    (6) The routine uses of the system,
    (7) The Board's policies and practices for maintenance of the 
system,
    (8) The system manager,
    (9) The procedures for notification, access to and correction of 
records in the system, and
    (10) The sources of information for the system.



Sec. 1630.4  Request for notification and access.

    (a) TSP records. (1) Records on TSP participants and the spouses, 
former spouses, and beneficiaries of TSP participants are maintained in 
the Governmentwide system of records, FRTIB-1, Thrift Savings Plan 
Records. A participant or a spouse, former spouse, or beneficiary of a 
participant must make his or her inquiry in accordance with the chart 
set forth in this paragraph. The mailing address of the Thrift Savings 
Plan is provided at http://www.tsp.gov. Telephone inquiries are subject 
to the verification procedures set forth in Sec. 1630.7. A written 
inquiry must include the name and Social Security number of the 
participant or of the spouse, former spouse, or beneficiary of the 
participant, as appropriate.

To obtain information about or gain access to TSP records about you

[[Page 218]]



 
------------------------------------------------------------------------
                                                         If you are a
                                                        participant who
                                     If you are a     has separated from
          If you want:            participant who is  Federal employment
                                   a current Federal     or a spouse,
                                       employee:       former spouse, or
                                                         beneficiary:
------------------------------------------------------------------------
To make inquiry as to whether     Call or write to    Call or write to
 you are a subject of this         your employing      TSP record
 system of records..               agency in           keeper.
                                   accordance with
                                   agency procedures
                                   for personnel or
                                   payroll records.
To gain access to a record about  Call or write to    Call or write to
 you.                              your employing      TSP record
                                   agency to request   keeper.
                                   access to
                                   personnel and
                                   payroll records
                                   regarding the
                                   agency's and the
                                   participant's
                                   contributions,
                                   and adjustments
                                   to contributions.
                                   Call or write to
                                   the TSP record
                                   keeper to gain
                                   access to loan
                                   status and
                                   repayments,
                                   earnings,
                                   contributions
                                   allocation
                                   elections,
                                   interfund
                                   transfers, and
                                   withdrawal
                                   records.
To learn the history of           Write to TSP        Write to TSP
 disclosures of records about      record keeper..     record keeper.
 you to entities other than the
 participant's employing agency
 or the Board or auditors see
 Sec.  1630.4 (a)(4).
------------------------------------------------------------------------

    (2) Participants may also inquire whether this system contains 
records about them and access certain records through the account access 
section of the TSP Web site and the ThriftLine (the TSP's automated 
telephone system). The TSP Web site is located at www.tsp.gov. To use 
the TSP ThriftLine, the participant must have a touch-tone telephone and 
call the following number: (877) 968-3778. The following information is 
available on the TSP Web site and the ThriftLine: account balance; 
available loan amount; the status of a monthly withdrawal payment; the 
current status of a loan or withdrawal application; and an interfund 
transfer request. To access these features the participant will need to 
provide his or her SSN and PIN.
    (3) A Privacy Act request which is incorrectly submitted to the 
Board will not be considered received until received by the record 
keeper. The Board will submit such a Privacy Act request to the record 
keeper within three workdays. A Privacy Act request which is incorrectly 
submitted to the record keeper will not be considered received until 
received by the employing agency. The record keeper will submit such a 
Privacy Act request to the employing agency within three workdays.
    (4) No disclosure history will be made when the Board contracts for 
an audit of TSP financial statements (which includes the review and 
sampling of TSP account balances).
    (5) No disclosure history will be made when the Department of Labor 
or the General Accounting Office audits TSP financial statements (which 
includes the review and sampling of TSP account balances) in accordance 
with their responsibilities under chapter 84 of title 5 of the U.S. 
Code. Rather, a requester will be advised that these agencies have 
statutory obligations to audit TSP activities and that in the course of 
such audits they randomly sample individual TSP accounts to test for 
account accuracy.
    (b) Non-TSP Board records. An individual who wishes to know if a 
specific system of records maintained by the Board contains a record 
pertaining to him or her, or who wishes access to such records, shall 
address a written request to the Privacy Act Officer, Federal Retirement 
Thrift Investment Board, 1250 H Street, NW., Washington, DC 20005. The 
request letter should contain the complete name and identifying number 
of the pertinent system as published in the annual Federal Register 
notice describing the Board's Systems of Records; the full name and 
address of the subject individual; the subject's Social Security number 
if a Board employee; a brief description of the nature, time, place, and 
circumstances of the individual's prior association with the Board; and 
any other information the individual believes would help the Privacy Act 
Officer determine whether the information about the individual is 
included in the system of records. In instances where

[[Page 219]]

the information is insufficient to ensure disclosure to the subject 
individual to whom the record pertains, the Board reserves the right to 
ask the requester for additional identifying information. The words 
``PRIVACY ACT REQUEST'' should be printed on both the letter and the 
envelope.

[55 FR 18852, May 7, 1990, as amended at 59 FR 55331, Nov. 7, 1994; 64 
FR 67693, 67695, Dec. 3, 1999; 71 FR 50319, Aug. 25, 2006]



Sec. 1630.5  Granting access to a designated individual.

    (a) An individual who wishes to have a person of his or her choosing 
review a record or obtain a copy of a record from the Board or the TSP 
record keeper shall submit a signed statement authorizing the disclosure 
of his or her record before the record will be disclosed. The 
authorization shall be maintained with the record.
    (b) The Board or the TSP record keeper will honor any Privacy Act 
request (e.g., a request to have access or to amend a record) which is 
accompanied by a valid power of attorney from the subject of the record.

[55 FR 18852, May 7, 1990, as amended at 59 FR 26409, May 20, 1994; 64 
FR 67694, Dec. 3, 1999]



Sec. 1630.6  Action on request.

    (a) For TSP records, the record keeper designee, and for non-TSP 
records, the Privacy Act Officer will answer or acknowledge the inquiry 
within 10 work days of the date it is received. When the answer cannot 
be made within 10 work days, the record keeper or Privacy Act Officer 
will provide the requester with the date when a response may be expected 
and, whenever possible, the specific reasons for the delay.
    (b) At a minimum, the acknowledgement to a request for access shall 
include:
    (1) When and where the records will be available;
    (2) Name, title and telephone number of the official who will make 
the records available;
    (3) Whether access will be granted only by providing a copy of the 
record through the mail, or only by examination of the record in person 
if the Privacy Act Officer after consulting with the appropriate system 
manager has determined the requester's access would not be unduly 
impeded;
    (4) Fee, if any, charged for copies (See Sec. 1630.16); and
    (5) If necessary, documentation required to verify the identity of 
the requester (See Sec. 1630.7).

[55 FR 18852, May 7, 1990, as amended at 67694, 67695, Dec. 3, 1999]



Sec. 1630.7  Identification requirements.

    (a) In person. An individual should be prepared to identify himself 
or herself by signature, i.e., to note by signature the date of access, 
Social Security number, and to produce one photographic form of 
identification (driver's license, employee identification, annuitant 
card, passport, etc.). If an individual is unable to produce adequate 
identification, the individual must sign a statement asserting his or 
her identity and acknowledging that knowingly or willfully seeking or 
obtaining access to records about another person under false pretenses 
may result in a fine of up to $5,000 (see Sec. 1630.18). In addition, 
depending upon the sensitivity of the records, the Privacy Act Officer 
or record keeper designee after consulting with the appropriate system 
manager may require further reasonable assurances, such as statements of 
other individuals who can attest to the identity of the requester.
    (b) In writing. An individual shall provide his or her name, date of 
birth, and Social Security number and shall sign the request. If a 
request for access is granted by mail and, in the opinion of the Privacy 
Act Officer or record keeper designee after consulting with the 
appropriate system manager, the disclosure of the records through the 
mail may result in harm or embarrassment (if a person other than the 
subject individual were to receive the records), a notarized statement 
of identity or some other similar assurance of identity will be 
required.
    (c) By telephone. (1) Telephone identification procedures apply only 
to requests from participants and spouses, former spouses, or 
beneficiaries of participants for information in FRTIB-1, Thrift Savings 
Plan Records, which is retrieved by their respective Social Security 
numbers.

[[Page 220]]

    (2) A participant or a spouse, former spouse, or beneficiary of a 
participant must identify himself or herself by providing to the record 
keeper designee his or her name, Social Security number, and any other 
information requested. If the record keeper designee determines that any 
of the information provided by telephone is incorrect, the requester 
will be required to submit a request in writing.
    (3) A participant may also access the TSP Web site or call the TSP 
ThriftLine to obtain account information. These systems require the 
participant's Social Security number and PIN. Because a PIN is required 
to use these features, they are not available to former participants, 
whose PINs are canceled when their accounts are closed.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67694, Dec. 3, 1999]



Sec. 1630.8  Access of others to records about an individual.

    (a) The Privacy Act provides for access to records in systems of 
records in those situations enumerated in 5 U.S.C. 552a(b) and are set 
forth in paragraph (b) of this section.
    (b) No official or employee of the Board, or any contractor of the 
Board or other Federal agency operating a Board system of records under 
an interagency agreement, shall disclose any record to any person or to 
another agency without the express written consent of the subject 
individual, unless the disclosure is:
    (1) To officers or employees (including contract employees) of the 
Board or the record keeper who need the information to perform their 
official duties;
    (2) Pursuant to the requirements of the Freedom of Information Act, 
5 U.S.C. 552;
    (3) For a routine use that has been published in a notice in the 
Federal Register (routine uses for the Board's systems of records are 
published separately in the Federal Register and are available from the 
Board's Privacy Act Officer);
    (4) To the Bureau of the Census for uses under title 13 of the 
United States Code;
    (5) To a person or agency which has given the Board or the record 
keeper advance written notice of the purpose of the request and 
certification that the record will be used only for statistical 
purposes. (In addition to deleting personal identifying information from 
records released for statistical purposes, the Privacy Act Officer or 
record keeper designee shall ensure that the identity of the individual 
cannot reasonably be deduced by combining various statistical records);
    (6) To the National Archives of the United States if a record has 
sufficient historical or other value to warrant its continued 
preservation by the United States Government, or for evaluation by the 
Archivist of the United States or the designee of the Archivist to 
determine whether the record has such value;
    (7) In response to a written request that identifies the record and 
the purpose of the request made by another agency or instrumentality of 
any Government jurisdiction within or under the control of the United 
States for civil or criminal law enforcement activity, if that activity 
is authorized by law;
    (8) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual, if upon such disclosure 
a notification is transmitted to the last known address of the subject 
individual;
    (9) To either House of Congress, or to a Congressional committee or 
subcommittee if the subject matter is within its jurisdiction;
    (10) To the Comptroller General, or an authorized representative, in 
the course of the performance of the duties of the General Accounting 
Office;
    (11) Pursuant to the order of a court of competent jurisdiction; or
    (12) To a consumer reporting agency in accordance with section 
3711(f) of Title 31.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67694, Dec. 3, 1999]



Sec. 1630.9  Access to the history (accounting) of disclosures from records.

    Rules governing access to the accounting of disclosures are the same 
as those for granting access to the records as set forth in Sec. 
1630.4.

[[Page 221]]



Sec. 1630.10  Denials of access.

    (a) The Privacy Act Officer or the record keeper designee for 
records covered by system FRTIB-1, may deny an individual access to his 
or her record if:
    (1) In the opinion of the Privacy Act Officer or the record keeper 
designee, the individual seeking access has not provided proper 
identification to permit access; or
    (2) The Board has published rules in the Federal Register exempting 
the pertinent system of records from the access requirement.
    (b) If access is denied, the requester shall be informed of the 
reasons for denial and the procedures for obtaining a review of the 
denial.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67695, Dec. 3, 1999]



Sec. 1630.11  Requirements for requests to amend records.

    (a) TSP records. (1) A spouse, former spouse or beneficiary of a TSP 
participant who wants to correct or amend his or her record must write 
to the TSP record keeper. A participant in the TSP who wants to correct 
or amend a TSP record pertaining to him or her shall submit a written 
request in accordance with the following chart:

------------------------------------------------------------------------
                    To correct or amend a TSP record
-------------------------------------------------------------------------
                                                         If you are a
                                     If you are a       participant who
    If the type of record is:     participant who is  has separated from
                                   a current Federal  Federal employment
                                  employee write to:       write to:
------------------------------------------------------------------------
Personnel or personal records     Write to your       Write to TSP
 (e.g., age, address, Social       employing agency..  record keeper.
 Security number, date of
 birth)..
The agency's and the              Write to your       Write to your
 participant's contributions,      employing agency..  former employing
 and adjustments to                                    agency.
 contributions..
Earnings, investment allocation,  Write to TSP        Write to TSP
 interfund transfers, loans,       record keeper..     record keeper.
 loan repayments, and
 withdrawals.
------------------------------------------------------------------------

    (2) The address of the record keeper is listed in Sec. 1630.4(a).
    (3) Requests for amendments which are claims for money because of 
administrative error will be processed in accordance with the Board's 
Error Correction regulations found at 5 CFR part l605. Sections 
1630.12(b)-1630.14 of this part do not apply to such money claim 
amendments to TSP records as the Error Correction regulations are an 
equivalent substitute. Non-money claim TSP record appeals are covered by 
Sec. Sec. 1630.12-1630.14, or if covered by the above chart the 
employing, or former employing, agency's Privacy Act procedures.
    (4) Corrections to TSP account records which are made by the Board, 
its recordkeeper or the employing agency or the former employing agency 
on its own motion because of a detected administrative error will be 
effected without reference to Privacy Act procedures.
    (5) A participant in the TSP who is currently employed by a Federal 
agency should be aware that the employing agency provides to the Board 
personal and payroll records on the participant, such as his or her date 
of birth, Social Security number, retirement code, address, loan 
repayments, the amount of participant's contribution, amount of the 
Government's contribution, if the participant is covered by the Federal 
Employees' Retirement System Act (FERSA, 5 U.S.C. Chapter 84), and 
adjustments to contributions. Requests submitted to the Board, or its 
recordkeeper, to correct information provided by the employing Federal 
agency will be referred to the employing agency. The reason for this 
referral is that the Board receives information periodically for the TSP 
accounts; if the employing agency does not resolve the alleged error, 
the Board will continue to receive the uncorrected information 
periodically regardless of a one-time Board correction. The employing 
agency also has custody of the election form (which is maintained in the 
Official Personnel Folder). Requests for amendment or correction of 
records described in this paragraph should be made to the employing 
agency.
    (b) Non-TSP records. (1) Any other individual who wants to correct 
or amend a record pertaining to him or her shall submit a written 
request to the Board's Privacy Act Officer whose address is listed in 
Sec. 1630.4. The words ``Privacy Act--Request to Amend Record'' should 
be written on the letter and the envelope.

[[Page 222]]

    (2) The request for amendment or correction of the record should, if 
possible, state the exact name of the system of records as published in 
the Federal Register; a precise description of the record proposed for 
amendment; a brief statement describing the information the requester 
believes to be inaccurate or incomplete, and why; and the amendment or 
correction desired. If the request to amend the record is the result of 
the individual's having gained access to the record in accordance with 
Sec. Sec. 1630.4, 1630.5, 1630.6 or Sec. 1630.7, copies of previous 
correspondence between the requester and the Board should be attached, 
if possible.
    (3) If the individual's identity has not been previously verified, 
the Board may require documentation of identification as described in 
Sec. 1630.7.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67694, 67695, Dec. 3, 
1999]



Sec. 1630.12  Action on request to amend a record.

    (a) For TSP records, the record keeper will acknowledge a request 
for amendment of a record, which is to be decided by that office in 
accordance with the chart in Sec. 1630.11, within 10 work days. 
Requests received by the record keeper which are to be decided by the 
current or former employing agency will be sent to that agency by the 
record keeper within 3 work days of the date of receipt. A copy of the 
transmittal letter will be sent to the requester.
    (b) For non-TSP records, the Privacy Act Officer will acknowledge a 
request for amendment of a record within 10 work days of the date the 
Board receives it. If a decision cannot be made within this time, the 
requester will be informed by mail of the reasons for the delay and the 
date when a reply can be expected, normally within 30 work days from 
receipt of the request.
    (c) The final response will include the decision whether to grant or 
deny the request. If the request is denied, the response will include:
    (1) The reasons for the decision;
    (2) The name and address of the official to whom an appeal should be 
directed;
    (3) The name and address of the official designated to assist the 
individual in preparing the appeal;
    (4) A description of the appeal process with the Board; and
    (5) A description of any other procedures which may be required of 
the individual in order to process the appeal.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67695, Dec. 3, 1999]



Sec. 1630.13  Procedures for review of determination to deny access to or 

amendment of records.

    (a) Individuals who disagree with the refusal to grant them access 
to or to amend a record about them should submit a written request for 
review to the Executive Director, Federal Retirement Thrift Investment 
Board, 1250 H Street, NW., Washington, DC 20005. The words ``PRIVACY 
ACT--APPEAL'' should be written on the letter and the envelope. 
Individuals who need assistance preparing their appeal should contact 
the Board's Privacy Act Officer.
    (b) The appeal letter must be received by the Board within 30 
calendar days from the date the requester received the notice of denial. 
At a minimum, the appeal letter should identify:
    (1) The records involved;
    (2) The date of the initial request for access to or amendment of 
the record;
    (3) The date of the Board's denial of that request; and
    (4) The reasons supporting the request for reversal of the Board's 
decision.

Copies of previous correspondence from the Board denying the request to 
access or amend the record should also be attached, if possible.
    (c) The Board reserves the right to dispose of correspondence 
concerning the request to access or amend a record if no request for 
review of the Board's decision is received within 180 days of the 
decision date. Therefore, a request for review received after 180 days 
may, at the discretion of the Privacy Act Officer, be treated as an 
initial request to access or amend a record.

[55 FR 18852, May 7, 1990, as amended at 59 FR 55331, Nov. 7, 1994]

[[Page 223]]



Sec. 1630.14  Appeals process.

    (a) Within 20 work days of receiving the request for review, the 
Executive Director, after consultation with the General Counsel, will 
make a final determination on the appeal. If a final decision cannot be 
made in 20 work days, the Privacy Act Officer will inform the requester 
of the reasons for the delay and the date on which a final decision can 
be expected. Such extensions are unusual, and should not exceed an 
additional 30 work days.
    (b) If the original request was for access and the initial 
determination is reversed, the procedures in Sec. 1630.7 will be 
followed. If the initial determination is upheld, the requester will be 
so informed and advised of the right to judicial review pursuant to 5 
U.S.C. 552a(g).
    (c) If the initial denial of a request to amend a record is 
reversed, the Board or the record keeper will correct the record as 
requested and inform the individual of the correction. If the original 
decision is upheld, the requester will be informed and notified in 
writing of the right to judicial review pursuant to 5 U.S.C. 552a(g) and 
the right to file a concise statement of disagreement with the Executive 
Director. The statement of disagreement should include an explanation of 
why the requester believes the record is inaccurate, irrelevant, 
untimely, or incomplete. The Executive Director shall maintain the 
statement of disagreement with the disputed record, and shall include a 
copy of the statement of disagreement to any person or agency to whom 
the record has been disclosed, if the disclosure was made pursuant to 
Sec. 1630.9.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67695, Dec. 3, 1999]



Sec. 1630.15  Exemptions.

    (a) Pursuant to subsection (k) of the Privacy Act, 5 U.S.C. 552a, 
the Board may exempt certain portions of records within designated 
systems of records from the requirements of the Privacy Act, (including 
access to and review of such records pursuant to this part) if such 
portions are:
    (1) Subject to the provisions of section 552(b)(1) of the Freedom of 
Information Act, 5 U.S.C. 552;
    (2) Investigatory material compiled for law enforcement purposes, 
other than material within the scope of subsection (j)(2) of the Privacy 
Act, 5 U.S.C. 552a: Provided, however, that if any individual is denied 
any right, privilege, or benefit that he would otherwise be entitled by 
Federal law, or for which he would otherwise be eligible, as a result of 
the maintenance of such material, such material shall be provided to 
such individual, except to the extent that the disclosure of such 
material would reveal the identity of a source who furnished information 
to the Government under an express promise that the identity of the 
source would be held in confidence, or, prior to the effective date of 
the Privacy Act, 5 U.S.C. 552a, under an implied promise that the 
identity of the source would be held in confidence;
    (3) Maintained in connection with providing protective services to 
the President of the United States or other individuals pursuant to 
section 3056 of title 18 of the United States Code;
    (4) Required by statute to be maintained and used solely as 
statistical records;
    (5) Investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for Federal 
civilian employment, military service, Federal contracts, or access to 
classified information, but only to the extent that the disclosures of 
such material would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or, prior to the effective 
date of the Privacy Act, 5 U.S.C. 552a, under an implied promise that 
the identity of the source would be held in confidence;
    (6) Test or examination material used solely to determine individual 
qualifications for appointment or promotion in the Federal service, the 
disclosure of which would compromise the objectivity or fairness of the 
testing or examination process; or
    (7) Evaluation material used to determine potential for promotion in 
the armed services, but only to the extent that the disclosure of such 
material be held in confidence, or, prior to the effective date of the 
Privacy Act, 5

[[Page 224]]

U.S.C. 552a, under an implied promise that the identity of the source 
would be held in confidence.
    (b) Those designated systems of records which are exempt from the 
requirements of this part or any other requirements of the Privacy Act, 
5 U.S.C. 552a, will be indicated in the notice of designated systems of 
records published by the Board.
    (c) Nothing in this part will allow an individual access to any 
information compiled in reasonable anticipation of a civil action or 
proceeding.



Sec. 1630.16  Fees.

    (a) Individuals will not be charged for:
    (1) The search and review of the record; and
    (2) Copies of ten (10) or fewer pages of a requested record.
    (b) Records of more than 10 pages will be photocopied for 15 cents a 
page. If the record is larger than 8\1/2\ x 14 inches, the fee will be 
the cost of reproducing the record through Government or commercial 
sources.
    (c) Fees must be paid in full before requested records are 
disclosed. Payment shall be by personal check or money order payable to 
the Federal Retirement Thrift Investment Board, and mailed or delivered 
to the record keeper or to the Privacy Act Officer, depending upon the 
nature of the request, at the address listed in Sec. 1630.4.
    (d) The Head, TSP Service Office or the Privacy Act Officer may 
waive the fee if:
    (1) The cost of collecting the fee exceeds the amount to be 
collected; or
    (2) The production of the copies at no charge is in the best 
interest of the Board.
    (e) A receipt will be furnished on request.

[55 FR 18852, May 7, 1990, as amended at 64 FR 67695, Dec. 3, 1999]



Sec. 1630.17  Federal agency requests.

    Employing agencies needing automated data processing services from 
the Board in order to reconcile agency TSP records for TSP purposes may 
be charged rates based upon the factors of:
    (a) Fair market value;
    (b) Cost to the TSP; and
    (c) Interests of the participants and beneficiaries.



Sec. 1630.18  Penalties.

    (a) Title 18, U.S.C. 1001, Crimes and Criminal Procedures, makes it 
a criminal offense, subject to a maximum fine of $10,000 or imprisonment 
for not more than five years, or both, to knowingly and willfully make 
or cause to be made any false or fraudulent statements or representation 
in any matter within the jurisdiction of any agency of the United 
States. Section (i)(3) of the Privacy Act, 5 U.S.C. 552a(i)(3), makes it 
a misdemeanor, subject to a maximum fine of $5,000 to knowingly and 
willfully request or obtain any record concerning an individual under 
false pretenses. Sections (i) (1) and (2) of 5 U.S.C. 552a provide 
penalties for violations by agency employees of the Privacy Act or 
regulations established thereunder.
    (b) [Reserved]



PART 1631_AVAILABILITY OF RECORDS--Table of Contents




   Subpart A_Production or Disclosure of Records Under the Freedom of 
                      Information Act, 5 U.S.C. 552

Sec.
1631.1 Definitions.
1631.2 Purpose and scope.
1631.3 Organization and functions.
1631.4 Public reference facilities and current index.
1631.5 Records of other agencies.
1631.6 How to request records--form and content.
1631.7 Initial determination.
1631.8 Prompt response.
1631.9 Responses--form and content.
1631.10 Appeals to the General Counsel from initial denials.
1631.11 Fees to be charged--categories of requesters.
1631.12 Waiver or reduction of fees.
1631.13 Prepayment of fees over $250.
1631.14 Fee schedule.
1631.15 Information to be disclosed.
1631.16 Exemptions.
1631.17 Deletion of exempted information.
1631.18 Annual report.

 Subpart B_Production in Response to Subpoenas or Demands of Courts or 
                            Other Authorities

1631.30 Purpose and scope.

[[Page 225]]

1631.31 Production prohibited unless approved by the Executive Director.
1631.32 Procedure in the event of a demand for disclosure.
1631.33 Procedure in the event of an adverse ruling.

    Authority: 5 U.S.C. 552.

    Source: 55 FR 41052, Oct. 9, 1990, unless otherwise noted.



   Subpart A_Production or Disclosure of Records Under the Freedom of 
                      Information Act, 5 U.S.C. 552



Sec. 1631.1  Definitions.

    (a) Board means the Federal Retirement Thrift Investment Board.
    (b) Agency means agency as defined in 5 U.S.C. 552(e).
    (c) Executive Director means the Executive Director of the Federal 
Retirement Thrift Investment Board, as defined in 5 U.S.C. 8401(13) and 
as further described in 5 U.S.C. 8474.
    (d) FOIA means Freedom of Information Act, 5 U.S.C. 552, as amended.
    (e) FOIA Officer means the Board's Director of Administration or his 
or her designee.
    (f) General Counsel means the General Counsel of the Federal 
Retirement Thrift Investment Board.
    (g) Working days or workdays means those days when the Board is open 
for the conduct of Government business, and does not include Saturdays, 
Sundays, and Federal holidays.
    (h) Requester means a person making a FOIA request.
    (i) Submitter means any person or entity which provides confidential 
commercial information to the Board. The term includes, but is not 
limited to, corporations, state governments, and foreign governments.



Sec. 1631.2  Purpose and scope.

    This subpart contains the regulations of the Federal Retirement 
Thrift Investment Board, implementing 5 U.S.C. 552. The regulations of 
this subpart describe the procedures by which records may be obtained 
from all organizational units within the Board and from its 
recordkeeper. Official records of the Board, except those already 
published in bulk by the Board, available pursuant to the requirements 
of 5 U.S.C. 552 shall be furnished to members of the public only as 
prescribed by this subpart. To the extent that it is not prohibited by 
other laws the Board also will make available records which it is 
authorized to withhold under 5 U.S.C. 552 whenever it determines that 
such disclosure is in the interest of the Thrift Savings Plan.



Sec. 1631.3  Organization and functions.

    (a) The Federal Retirement Thrift Investment Board was established 
by the Federal Employees' Retirement System Act of 1986 (Pub. L. 99-335, 
5 U.S.C. 8401 et seq.). Its primary function is to manage and invest the 
Thrift Savings Fund for the exclusive benefit of its participants (e.g., 
participating Federal employees, Federal judges, and Members of 
Congress). The Board is responsible for investment of the assets of the 
Thrift Savings Fund and the management of the Thrift Savings Plan. The 
Board consists of:
    (1) The five part-time members who serve on the Board;
    (2) The Office of the Executive Director;
    (3) The Office of Investments;
    (4) The Office of the General Counsel;
    (5) The Office of Benefits and Program Analysis;
    (6) The Office of Accounting;
    (7) The Office of Administration;
    (8) The Office of External Affairs;
    (9) The Office of Automated Systems; and
    (10) The Office of Communications.
    (b) The Board has no field organization; however, it provides for 
its recordkeeping responsibility by contract or interagency agreement. 
The recordkeeper may be located outside of the Washington, DC area. 
Thrift Savings Plan records maintained for the Board by its recordkeeper 
are Board records subject to these regulations. Board offices are 
presently located at 1250 H Street, NW., Washington, DC 20005.

[55 FR 41052, Oct. 9, 1990, as amended at 59 FR 55331, Nov. 7, 1994]



Sec. 1631.4  Public reference facilities and current index.

    (a) The Board maintains a public reading area located in room 4308 
at 1250 H Street, NW., Washington, DC. Reading area hours are from 9:00 
A.M.

[[Page 226]]

to 5:00 P.M., Monday through Friday, exclusive of Federal holidays. 
Electronic reading room documents are available through http://
www.frtib.gov. In the reading area and through the Web site, the Board 
makes available for public inspection, copying, and downloading 
materials required by 5 U.S.C. 552(a)(2), including documents published 
by the Board in the Federal Register which are currently in effect.
    (b) The FOIA Officer shall maintain an index of Board regulations, 
directives, bulletins, and published materials.
    (c) The FOIA officer shall also maintain a file open to the public, 
which shall contain copies of all grants or denials of FOIA requests, 
appeals, and appeal decisions by the General Counsel. The materials 
shall be filed by chronological number of request within each calendar 
year, indexed according to the exceptions asserted, and, to the extent 
feasible, indexed according to the type of records requested.

[55 FR 41052, Oct. 9, 1990, as amended at 59 FR 55331, 55332, Nov. 7, 
1994; 63 FR 41708, Aug. 5, 1998]



Sec. 1631.5  Records of other agencies.

    Requests for records that originated in another agency and that are 
in the custody of the Board may, in appropriate circumstances, be 
referred to that agency for consultation or processing, and the person 
submitting the request shall be so notified.



Sec. 1631.6  How to request records--form and content.

    (a) A request made under the FOIA must be submitted in writing, 
addressed to: FOIA Officer, Federal Retirement Thrift Investment Board, 
1250 H Street, NW., Washington, DC 20005. The words ``FOIA Request'' 
should be clearly marked on both the letter and the envelope.
    (b) Each request must reasonably describe the record(s) sought, 
including, when known: Entity/individual originating the record, date, 
subject matter, type of document, location, and any other pertinent 
information which would assist in promptly locating the record(s). Each 
request should also describe the type of entity the requester is for fee 
purposes. See Sec. 1631.11.
    (c) When a request is not considered reasonably descriptive, or 
requires the production of voluminous records, or places an 
extraordinary burden on the Board, seriously interfering with its normal 
functioning to the detriment of the Thrift Savings Plan, the Board may 
require the person or agent making the FOIA request to confer with a 
Board representative in order to attempt to verify, and, if possible, 
narrow the scope of the request.
    (d) Upon initial receipt of the FOIA request, the FOIA Officer will 
determine which official or officials within the Board shall have the 
primary responsibility for collecting and reviewing the requested 
information and drafting a proposed response.
    (e) Any Board employee or official who receives a FOIA request shall 
promptly forward it to the FOIA Officer, at the above address. Any Board 
employee or official who receives an oral request made under the FOIA 
shall inform the person making the request of the provisions of this 
subpart requiring a written request according to the procedures set out 
herein.
    (f) When a person requesting expedited access to records has 
demonstrated a compelling need, or when the Board has determined that it 
is appropriate to expedite its response, the Board will process the 
request ahead of other requests.
    (g) To demonstrate compelling need in accordance with paragraph (f) 
of this section, the requester must submit a written statement that 
contains a certification that the information provided therein is true 
and accurate to the best of the requester's knowledge and belief. The 
statement must demonstrate that:
    (1) The failure to obtain the record on an expedited basis could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual; or
    (2) The requester is a person primarily engaged in the dissemination 
of information, and there is an urgent need to inform the public 
concerning an actual or alleged Federal Government activity that is the 
subject of the request.

[55 FR 41052, Oct. 9, 1990, as amended at 59 FR 55331, Nov. 7, 1994; 63 
FR 41708, Aug. 5, 1998]

[[Page 227]]



Sec. 1631.7  Initial determination.

    The FOIA Officer shall have the authority to approve or deny 
requests received pursuant to these regulations. The decision of the 
FOIA Officer shall be final, subject only to administrative review as 
provided in Sec. 1631.10.



Sec. 1631.8  Prompt response.

    (a)(1) When the FOIA Officer receives a request for expedited 
processing, he or she will determine within 10 work days whether to 
process the request on an expedited basis.
    (2) When the FOIA Officer receives a request for records which he or 
she, in good faith, believes is not reasonably descriptive, he or she 
will so advise the requester within 5 work days. The time limit for 
processing such a request will not begin until receipt of a request that 
reasonably describes the records being sought.
    (b) The FOIA Officer will either approve or deny a reasonably 
descriptive request for records within 20 work days after receipt of the 
request, unless additional time is required for one of the following 
reasons:
    (1) It is necessary to search for and collect the requested records 
from other establishments that are separate from the office processing 
the request (e.g., the record keeper);
    (2) It is necessary to search for, collect, and examine a voluminous 
amount of records which are demanded in a single request;
    (3) It is necessary to consult with another agency which has a 
substantial interest in the determination of the request or to consult 
with two or more offices of the Board which have a substantial subject 
matter interest in the records; or
    (4) It is necessary to devote resources to the processing of an 
expedited request under Sec. 1631.6(f).
    (c) When additional time is required for one of the reasons stated 
in paragraph (b) of this section, the FOIA Officer will extend this time 
period for an additional 10 work days by written notice to the 
requester. If the Board will be unable to process the request within 
this additional time period, the requester will be notified and given 
the opportunity to--
    (1) Limit the scope of the request; or
    (2) Arrange with the FOIA Officer an alternative time frame for 
processing the request.

[63 FR 41708, Aug. 5, 1998]



Sec. 1631.9  Responses--form and content.

    (a) When a requested record has been identified and is available, 
the FOIA officer shall notify the person making the request as to where 
and when the record is available for inspection or that copies will be 
made available. The notification shall also advise the person making the 
request of any fees assessed under Sec. 1631.13 of this part.
    (b) A denial or partial denial of a request for a record shall be in 
writing signed by the FOIA Officer and shall include:
    (1) The name and title of the person making the determination;
    (2) A statement of fees assessed, if any; and
    (3) A reference to the specific exemption under the FOIA authorizing 
the withholding of the record, and a brief explanation of how the 
exemption applies to the record withheld; or
    (4) If appropriate, a statement that, after diligent effort, the 
requested records have not been found or have not been adequately 
examined during the time allowed by Sec. 1631.8, and that the denial 
will be reconsidered as soon as the search or examination is complete; 
and
    (5) A statement that the denial may be appealed to the General 
Counsel within 30 calendar days of receipt of the denial or partial 
denial.
    (c) If, after diligent effort, existing requested records have not 
been found, or are known to have been destroyed or otherwise disposed 
of, the FOIA Officer shall so notify the requester.



Sec. 1631.10  Appeals to the General Counsel from initial denials.

    (a) When the FOIA Officer has denied a request for expedited 
processing or a request for records, in whole or in part, the person 
making the request may, within 30 calendar days of receipt of the 
response of the FOIA Officer, appeal the denial to the General Counsel. 
The appeal must be in writing, addressed to the General Counsel, Federal 
Retirement Thrift Investment Board, 1250 H Street, NW., Washington, DC

[[Page 228]]

20005, and be clearly labeled as a ``Freedom of Information Act 
Appeal.''
    (b)(1) The General Counsel will act upon the appeal of a denial of a 
request for expedited processing within 5 work days of its receipt.
    (2) The General Counsel will act upon the appeal of a denial of a 
request for records within 20 work days of its receipt.
    (c) The General Counsel will decide the appeal in writing and mail 
the decision to the requester.
    (d) If the appeal concerns an expedited processing request and the 
decision is in favor of the person making the request, the General 
Counsel will order that the request be processed on an expedited basis. 
If the decision concerning a request for records is in favor of the 
requester, the General Counsel will order that the subject records be 
promptly made available to the person making the request.
    (e) If the appeal of a request for expedited processing of records 
is denied, in whole or in part, the General Counsel's decision will set 
forth the basis for the decision. If the appeal of a request for records 
is denied, in whole or in part, the General Counsel's decision will set 
forth the exemption relied on and a brief explanation of how the 
exemption applies to the records withheld and the reasons for asserting 
it, if different from the reasons described by the FOIA Officer under 
Sec. 1631.9. The denial of a request for records will state that the 
person making the request may, if dissatisfied with the decision on 
appeal, file a civil action in Federal court. (A Federal court does not 
have jurisdiction to review a denial of a request for expedited 
processing after the Board has provided a complete response to the 
request.)
    (f) No personal appearance, oral argument, or hearing will 
ordinarily be permitted in connection with an appeal of a request for 
expedited processing or an appeal for records.
    (g) On appeal of a request concerning records, the General Counsel 
may reduce any fees previously assessed.

[63 FR 41708, Aug. 5, 1998]



Sec. 1631.11  Fees to be charged--categories of requesters.

    (a) There are four categories of FOIA requesters; commercial use 
requesters; representatives of news media; educational and noncommercial 
scientific institutions; and all other requesters. The Freedom of 
Information Reform Act of 1986 prescribes specific levels of fees for 
each of these categories:
    (1) When records are being requested for commercial use, the fee 
policy of the Board is to levy full allowable direct cost of searching 
for, reviewing for release, and duplicating the records sought. 
Commercial users are not entitled to two hours of free search time, nor 
100 free pages of reproduction of documents, nor waiver or reduction of 
fees, based on an assertion that disclosure would be in the public 
interest. The full allowable direct cost of searching for, and 
reviewing, records will be charged even if there is ultimately no 
disclosure of records. Commercial use is defined as a use that furthers 
the commercial trade or profit interests of the requester or person on 
whose behalf the request is made. In determining whether a requester 
falls within the commercial use category, the Board will look to the use 
to which a requester will put the documents requested.
    (2) When records are being requested by representatives of the news 
media, the fee policy of the Board is to levy reproduction charges only, 
excluding charges for the first 100 pages. The phrase ``representatives 
of the news media'' refers to any person actively gathering news for an 
entity that is organized and operated to publish or broadcast news to 
the public. The term ``news'' means information that is about current 
events or that would be of current interest to the public. Examples of 
news media entities include television or radio stations broadcasting to 
the public at large, and publishers of periodicals (but only in those 
instances where they can qualify as disseminators of news) who make 
their products available for purchase or subscription by the general 
public. These examples are not intended to be all-inclusive. As 
traditional methods of news delivery evolve (e.g. electronic 
dissemination of

[[Page 229]]

newspapers through telecommunications services), such alternative media 
would be included in this category. In the case of freelance 
journalists, they may be regarded as working for a news organization if 
they can demonstrate a solid basis for expecting publication through 
that organization, even though not actually employed by it. A 
publication contract would be the clearest proof, but the Board may also 
look to the past publication record of a requester in making this 
determination.
    (3) When records are being requested by an educational or 
noncommercial scientific institution whose purpose is scholarly or 
scientific research, the fee policy of the Board is to levy reproduction 
charges only, excluding charges for the first 100 pages. The term 
``educational institution'' refers to a preschool, a public or private 
elementary or secondary school, an institution of undergraduate higher 
education, an institution of graduate higher education, an institution 
of professional education, and an institution of vocational education, 
which operates a program or programs of scholarly research. The term 
``noncommercial scientific institution'' refers to an institution that 
is not operated on a commercial basis as that term is defined under 
paragraph (a)(1) of this section and which is operated solely for the 
purpose of conducting scientific research, the results of which are not 
intended to promote any particular product or industry. To be eligible 
for inclusion in this category, a requester must show that the request 
is being made under the auspices of a qualifying institution and that 
the records are not sought for a commercial use, but are sought in 
furtherance of scholarly (if the request is from an educational 
institution) or scientific (if the request is from a noncommercial 
scientific institution) research.
    (4) For any other request which does not meet the criteria contained 
in paragraphs (a) (1) through (3) of this section, the fee policy of the 
Board is to levy full reasonable direct cost of searching for and 
duplicating the records sought, except that the first 100 pages of 
reproduction and the first two hours of search time will be furnished 
without charge. If computer search time is required, the first two hours 
of computer search time will be based on the hourly cost of operating 
the central processing unit and the operator's hourly salary plus 23.5 
percent. When the cost of the computer search, including the operator 
time and the cost of operating the computer to process the request, 
equals the equivalent dollar amount of two hours of the salary of the 
person performing the search, i.e., the operator, the Board shall begin 
assessing charges for computer search. Requests from individuals 
requesting records about themselves filed in the Board's systems of 
records shall continue to be treated under the provisions of the Privacy 
Act of 1974, which permit fees only for reproduction. The Board's fee 
schedule is set out in Sec. 1631.14 of this part.
    (b) Except for requests that are for a commercial use, the Board may 
not charge for the first two hours of search time or for the first 100 
pages of reproduction. However, a requestor may not file multiple 
requests at the same time, each seeking portions of a document or 
documents, solely in order to avoid payment of fees. When the Board 
believes that a requester or, on rare occasions, a group of requesters 
acting in concert, is attempting to break a request down into a series 
of requests for the purpose of evading the assessment of fees, the Board 
may aggregate any such requests and charge accordingly. For example, it 
would be reasonable to presume that multiple requests of this type made 
within a 30 calendar day period had been made to avoid fees. For 
requests made over a long period, however, the Board must have a 
reasonable basis for determining that aggregation is warranted in such 
cases. Before aggregating requests from more than one requester, the 
Board must have a reasonable basis on which to conclude that the 
requesters are acting in concert and are acting specifically to avoid 
payment of fees. In no case may the Board aggregate multiple requests on 
unrelated subjects from one requester.
    (c) In accordance with the prohibition of section (4)(A)(iv) of the 
Freedom of Information Act, as amended, the Board shall not charge fees 
to any

[[Page 230]]

requester, including commercial use requesters, if the cost of 
collecting a fee would be equal to or greater than the fee itself.
    (1) For commercial use requesters, if the direct cost of searching 
for, reviewing for release, and duplicating the records sought would not 
exceed $25, the Board shall not charge the requester any costs.
    (2) For requests from representatives of news media or educational 
and noncommercial scientific institutions, excluding the first 100 pages 
which are provided at no charge, if the duplication cost would not 
exceed $25, the Board shall not charge the requester any costs.
    (3) For all other requests not falling within the category of 
commercial use requests, representatives of news media, or educational 
and noncommercial scientific institutions, if the direct cost of 
searching for and duplicating the records sought, excluding the first 
two hours of search time and first 100 pages which are free of charge, 
would not exceed $25, the Board shall not charge the requester any 
costs.

[55 FR 41052, Oct. 9, 1990, as amended at 63 FR 41708, Aug. 5, 1998]



Sec. 1631.12  Waiver or reduction of fees.

    (a) The Board may waive all fees or levy a reduced fee when 
disclosure of the information requested is deemed to be in the public 
interest because it is likely to contribute significantly to public 
understanding of the operations or activities of the Board or Federal 
Government and is not primarily in the commercial interest of the 
requester. In making its decision on waiving or reducing fees, the Board 
will consider the following factors:
    (1) Whether the subject of the requested records concerns the 
operations or activities of the Board or the Government,
    (2) Whether the disclosure is likely to contribute to an 
understanding of Government operations or activities (including those of 
the Board),
    (3) Whether the disclosure is likely to contribute significantly to 
public understanding of TSP or Government operations or activities,
    (4) Whether the requester has a commercial interest that would be 
furthered by the requested disclosure, and
    (5) Whether the magnitude of the identified commercial interest of 
the requester is sufficiently large, in comparison with the public 
interest in disclosure, that disclosure is primarily in the commercial 
interest of the requester.
    (b) A fee waiver request must indicate the existence and magnitude 
of any commercial interest that the requester has in the records that 
are the subject of the request.



Sec. 1631.13  Prepayment of fees over $250.

    (a) When the Board estimates or determines that allowable charges 
that a requester may be required to pay are likely to exceed $250.00, 
the Board may require a requester to make an advance payment of the 
entire fee before continuing to process the request.
    (b) When a requester has previously failed to pay a fee charged in a 
timely fashion (i.e., within 30 calendar days of the date of the 
billing), the Board may require the requester to pay the full amount 
owed plus any applicable interest as provided in Sec. 1631.14(d), and 
to make an advance payment of the full amount of the estimated fee 
before the agency begins to process a new request or a pending request 
from that requester.
    (c) When the Board acts under paragraph (a) or (b) of this section, 
the administrative time limits prescribed in subsection (a)(6) of the 
FOIA (i.e., 20 working days from the receipt of initial requests and 20 
working days from receipt of appeals from initial denial, plus 
permissible extensions of these time limits) will begin only after the 
Board has received fee payments under paragraph (a) or (b) of this 
section.

[55 FR 41052, Oct. 9, 1990, as amended at 63 FR 41709, Aug. 5, 1998]



Sec. 1631.14  Fee schedule.

    (a) Manual searches for records. The Board will charge at the salary 
rate(s) plus 23.5 percent (to cover benefits) of the employee(s) 
conducting the search. The Board may assess charges for time spend 
searching, even if the Board fails

[[Page 231]]

to locate the records or if records located are determined to be exempt 
from disclosure.
    (b) Computer searches for records. The Board will charge the actual 
direct cost of providing the service. This will include the cost of 
operating the central processing unit (CPU) for that portion of 
operating time that is directly attributable to searching for records 
responsive to a FOIA request and operator/programmer salary, plus 23.5 
percent, apportionable to the search. The Board may assess charges for 
time spent searching, even if the Board fails to locate the records or 
if records located are determined to be exempt from disclosure.
    (c) Duplication costs. (1) For copies of documents reproduced on a 
standard office copying machine in sizes up to 8\1/2\ x 14 inches, the 
charge will be $.15 per page.
    (2) The fee for reproducing copies of records over 8\1/2\ x 14 
inches, or whose physical characteristics do not permit reproduction by 
routine electrostatic copying, shall be the direct cost of reproducing 
the records through Government or commercial sources. If the Board 
estimates that the allowable duplication charges are likely to exceed 
$25, it shall notify the requester of the estimated amount of fees, 
unless the requester had indicated in advance his/her willingness to pay 
fees as those anticipated. Such a notice shall offer a requester the 
opportunity to confer with agency personnel with the objective of 
reformulating the request to meet his/her needs at a lower cost.
    (3) For copies prepared by computer, such as tapes or printouts, the 
Board shall charge the actual cost, including operator time, of 
producing the tape or printout. If the Board estimates that the 
allowable duplication charges are likely to exceed $25, it shall notify 
the requester of the estimated amount of fees, unless the requester has 
indicated in advance his/her willingness to pay fees as high as those 
anticipated. Such a notice shall offer a requester the opportunity to 
confer with agency personnel with the objective of reformulating the 
request to meet his/her needs at a lower cost.
    (4) For other methods of reproduction or duplication, the Board 
shall charge the actual direct costs of producing the document(s). If 
the Board estimates that the allowable duplication charges are likely to 
exceed $25, it shall notify the requester of the estimated amount of 
fees, unless the requester has indicated in advance his/her willingness 
to pay fees as high as those anticipated. Such a notice shall offer a 
requester the opportunity to confer with agency personnel with the 
objective of reformulating the request to meet his/her needs at a lower 
cost.
    (d) Interest may be charged to those requesters who fail to pay fees 
charged. The Board may begin assessing interest charges on the amount 
billed starting on the 31st calendar day following the day on which the 
billing was sent. Interest will be at the rate prescribed in section 
3717 of title 31 of the United States Code, and it will accrue from the 
date of the billing.
    (e) The Board shall use the most efficient and least costly methods 
to comply with requests for documents made under the FOIA. The Board may 
choose to contract with private sector services to locate, reproduce, 
and disseminate records in response to FOIA requests when that is the 
most efficient and least costly method. When documents responsive to a 
request are maintained for distribution by agencies operating statutory-
based fee schedule programs, such as, but not limited to, the Government 
Printing Office or the National Technical Information Service, the Board 
will inform requesters of the steps necessary to obtain records from 
those sources.

[55 FR 41052, Oct. 9, 1990, as amended at 63 FR 41709, Aug. 5, 1998]



Sec. 1631.15  Information to be disclosed.

    (a) In general, all records of the Board are available to the 
public, as required by the Freedom of Information Act. However, the 
Board claims the right, where it is applicable, to withhold material 
under the provisions specified in the Freedom of Information Act as 
amended (5 U.S.C. 552(b)).
    (b) Records from non-U.S. Government source. (1) Board personnel 
will generally consider two exemptions in the FOIA in deciding whether 
to withhold from disclosure material from a non-U.S. Government source.

[[Page 232]]

    Exemption 4 permits withholding of ``trade secrets and commercial or 
financial information obtained from a person as privileged or 
confidential.'' Exemption 6 permits withholding certain information, the 
disclosure of which ``would constitute a clearly unwarranted invasion of 
personal privacy.''
    (2)(i) Exemption 4. Commencing January 1, 1988, the submitter of 
confidential commercial information must, at the time the information is 
submitted to the Board or within 30 calendar days of such submission, 
designate any information the disclosure of which the submitter claims 
could reasonably be expected to cause substantial competitive harm. The 
submitter as part of its submission, must explain the rationale for the 
designation of the information as commercial and confidential.
    (ii) Confidential commercial information means records provided to 
the Board by a submitter that arguably contains material exempt from 
release under Exemption 4 of the FOIA, 5 U.S.C. 552(b)(4), because 
disclosure could reasonably be expected to cause substantial competitive 
harm.
    (iii) After January 1, 1988, a submitter who does not designate 
portions of a submission as confidential commercial information waives 
that basis for nondisclosure unless the Board determines that it has 
substantial reason to believe that disclosure of the requested records 
would result in substantial harm to the competitive position of the 
submitter.
    (3) When the Board determines that it has substantial reason to 
believe that disclosure of the requested records would result in 
substantial competitive harm to the submitter, and has no designation 
from the submitter, it shall notify the submitter of the following:
    (i) That a FOIA request has been received seeking the record,
    (ii) That disclosure of the record may be required,
    (iii) That disclosure of the record could result in competitive harm 
to the submitter,
    (iv) That the submitter has a period of seven workdays from date of 
notice within which it or a designee may object to the disclosure its 
records, and
    (v) That a detailed explanation should be submitted setting forth 
all grounds as to why the disclosure would result in substantial 
competitive harm, such as, the general custom or usage in the business 
of the information in the record, the number and situation of the 
persons who have access to the record, the type and degree of risk of 
financial injury that release would cause, and the length of time the 
record needs to be kept confidential.
    (4) In exceptional circumstances, the Board may extend by seven 
workdays the time for a submitter's response for good cause.
    (5) The Board shall give careful consideration to all specified 
grounds for nondisclosure prior to making an administrative 
determination on the issue of competitive harm.
    (6) Should the Board determine to disclose the requested records, it 
shall provide written notice to the submitter, explaining briefly why 
the submitter's objections were not sustained and setting forth the date 
for disclosure, which date may be less than 10 calendar days after the 
date of the letter to the submitter.
    (7) A submitter who provided records to the Board prior to January 
1, 1988, and did not designate which records contain confidential 
commercial information, shall be notified as provided in Sec. 
1631.15(b)(3). After making such notification, the Board will follow the 
procedures set forth in Sec. 1631.15(b)(4)-(6).
    (8) The Board will, as a general rule, look favorably upon 
recommendations for withholding information about ideas, methods, and 
processes that are unique; about equipment, materials, or systems that 
are potentially patentable; or about a unique use of equipment which is 
specifically outlined.
    (9) The Board will not withhold information that is known through 
custom or usage in the relevant trade, business, or profession, or 
information that is generally known to any reasonably educated person. 
Self-evident statements or reviews of the general state of the art will 
not ordinarily be withheld.

[[Page 233]]

    (10) The Board will withhold all cost data submitted, except the 
total estimated costs from each year of a contract. It will release 
these total estimated costs and ordinarily release explanatory material 
and headings associated with the cost data, withholding only the figures 
themselves. If a contractor believes that some of the explanatory 
material should be withheld, that material must be identified and a 
justification be presented as to why it should not be released.
    (11) Exemption 6. This exemption is not a blanket exemption for all 
personal information submitted by a non-U.S. Government source. The 
Board will balance the need to keep a person's private affairs from 
unnecessary public scrutiny with the public's right to information on 
Board records. As a general practice, the Board will release information 
about any person named in a contract itself or about any person who 
signed a contract as well as information given in a proposal about any 
officer of a corporation submitting that proposal. Depending upon the 
circumstances, the Board may release most information in resumes 
concerning employees, including education and experience. Efforts will 
be made to identify information that should be deleted and offerors are 
urged to point out such material for guidance. Any information in the 
proposal, such as the names of staff persons, which might, if released, 
constitute an unwarranted invasion of personal privacy if released 
should be identified and a justification for non-release provided in 
order to receive proper consideration.



Sec. 1631.16  Exemptions.

    The Freedom of Information Act exempts from all of its publication 
and disclosure requirements nine categories of records which are 
described in 5 U.S.C. 552(b). These categories include such matters as 
national defense and foreign policy information, investigatory files, 
internal procedures and communications, materials exempted from 
disclosure by other statutes, information given in confidence and 
matters involving personal privacy.



Sec. 1631.17  Deletion of exempted information.

    Where requested records contain matters which are exempted under 5 
U.S.C. 552(b) but which matters are reasonably segregable from the 
remainder of the records, they shall be disclosed by the Board with 
deletions. To each such record, the Board shall attach a written 
justification for making deletions. A single such justification shall 
suffice for deletions made in a group of similar or related records.



Sec. 1631.18  Annual report.

    The Executive Director will submit annually, on or before February 
1, a Freedom of Information report covering the preceding fiscal year to 
the Attorney General of the United States. The report will include 
matters required by 5 U.S.C. 552(e).

[63 FR 41709, Aug. 5, 1998]



 Subpart B_Production in Response to Subpoenas or Demands of Courts or 
                            Other Authorities



Sec. 1631.30  Purpose and scope.

    This subpart contains the regulations of the Board concerning 
procedures to be followed when a subpoena, order, or other demand 
(hereinafter in this subpart referred to as a ``demand'') of a court or 
other authority is issued for the production or disclosure of:
    (a) Any material contained in the files of the Board;
    (b) Any information relating to materials contained in the files of 
the Board; or
    (c) Any information or material acquired by an employee of the Board 
as a part of the performance of his or her official duties or because of 
his or her official status.



Sec. 1631.31  Production prohibited unless approved by the Executive 

Director.

    No employee or former employee of the Board shall, in response to a 
demand of a court or other authority, produce any material contained in 
the files of the Board or disclose any information or produce any 
material acquired as part of the performance of his

[[Page 234]]

or her official status without the prior approval of the Executive 
Director or his or her designee.



Sec. 1631.32  Procedure in the event of a demand for disclosure.

    (a) Whenever a demand is made upon an employee or former employee of 
the Board for the production of material or the disclosure of 
information described in Sec. 1631.31, he or she shall immediately 
notify the Executive Director or his or her designee. If possible, the 
Executive Director or his or her designee shall be notified before the 
employee or former employee concerned replies to or appears before the 
court or other authority.
    (b) If response to the demand is required before instructions from 
the Executive Director or his or her designee are received, an attorney 
designated for that purpose by the Board shall appear with the employee 
or former employee upon whom the demand has been made and shall furnish 
the court or other authority with a copy of the regulations contained in 
this part and inform the court or other authority that the demand has 
been or is being, as the case may be, referred for prompt consideration 
by the Executive Director or his or her designee. The court or other 
authority shall be requested respectfully to stay the demand pending 
receipt of the requested instructions from the Executive Director.



Sec. 1631.33  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 1631.32(b) 
pending receipt of instructions from the Executive Director, or his or 
her designee, or if the court or other authority rules that the demand 
must be complied with irrespective of the instructions from the 
Executive Director not to produce the material or disclose the 
information sought, the employee or former employee upon whom the demand 
has been made shall respectfully decline to comply with the demand. 
[United States ex. rel. Touhy v. Ragen, 340 U.S. 462 (1951)].



PART 1632_RULES REGARDING PUBLIC OBSERVATION OF MEETINGS--Table of Contents




Sec.
1632.1 Purpose and scope.
1632.2 Definitions.
1632.3 Conduct of agency business.
1632.4 Meetings open to public observation.
1632.5 Exemptions.
1632.6 Public announcement of meetings.
1632.7 Meetings closed to public observation.
1632.8 Changes with respect to publicly announced meetings.
1632.9 Certification of General Counsel.
1632.10 Transcripts, recordings, and minutes.
1632.11 Procedures for inspection and obtaining copies of transcriptions 
          and minutes.

    Authority: 5 U.S.C. 552b and 5 U.S.C. 8474.

    Source: 53 FR 36777, Sept. 22, 1988, unless otherwise noted.



Sec. 1632.1  Purpose and scope.

    This part is issued by the Federal Retirement Thrift Investment 
Board (Board) under section 552b of title 5 of the United States Code, 
the Government in the Sunshine Act, to carry out the policy of the Act 
that the public is entitled to the fullest practicable information 
regarding the decision making processes of the Board while at the same 
time preserving the rights of individuals and the ability of the Board 
to carry out its responsibilities. These regulations fulfill the 
requirement of subsection (g) of the Act that each agency subject to the 
provisions of the Act shall promulgate regulations to implement the open 
meeting requirements of subsections (b) through (f) of the Act.



Sec. 1632.2  Definitions.

    For purposes of this part, the following definitions shall apply:
    (a) The term Act means the Government in the Sunshine Act, 5 U.S.C. 
552b.
    (b) The term Board means the Federal Retirement Thrift Investment 
Board and subdivisions thereof.
    (c) The term meeting means the deliberations of at least the number 
of individual agency members required to take action on behalf of the 
Board where such deliberations determine or

[[Page 235]]

result in the joint conduct or disposition of official Board business. 
However, this term does not include--
    (1) Deliberations required or permitted by subsection (d) or (e) of 
the Act (relating to decisions to close all or a portion of a meeting, 
or to decisions on the timing or content of an announcement of a 
meeting), or
    (2) The conduct or disposition of official agency business by 
circulating written material to individual members.
    (d) The term number of individual agency members required to take 
action on behalf of the agency means three members.
    (e) The term member means a member of the Board appointed under 
section 101 of the Federal Employees' Retirement System Act of 1986, 5 
U.S.C. 8472.
    (f) The term public observation means that the public shall have the 
right to listen and observe but not the right to participate in the 
meeting or to record any of the meeting by means of cameras or 
electronic or other recording devices unless approval in advance is 
obtained from the Secretary of the Board.



Sec. 1632.3  Conduct of agency business.

    Members shall not jointly conduct or dispose of official Board 
business other than in accordance with this part.



Sec. 1632.4  Meetings open to public observation.

    (a) Except as provided in Sec. 1632.5 of this part, every portion 
of every meeting of the agency shall be open to public observation.
    (b) The Freedom of Information Act, 5 U.S.C. 552, and the Board's 
implementing regulations, 5 CFR part 1611, shall govern the availability 
to the public of copies of documents considered in connection with the 
Board's discussion of agenda items for a meeting that is open to public 
observation.
    (c) The Board will maintain mailing lists of names and addresses of 
all persons who wish to receive copies of agency announcements of 
meetings open to public observation. Requests for announcements may be 
made by telephoning or by writing to the Office of External Affairs, 
Federal Retirement Thrift Investment Board, 1250 H Street NW., 
Washington, DC 20005.

[53 FR 36777, Sept. 22, 1988, as amended at 59 FR 55331, Nov. 7, 1994]



Sec. 1632.5  Exemptions.

    (a) Except in a case where the Board finds that the public interest 
requires otherwise, the Board may close a meeting or a portion or 
portions of a meeting under the procedures specified in Sec. 1632.7 or 
Sec. 1632.8 of this part, and withhold information under the provisions 
of Sec. Sec. 1632.6, 1632.7, 1632.8, or 1632.11 of this part, where the 
Board properly determines that such meeting or portion of its meeting or 
the disclosure of such information is likely to:
    (1) Disclose matters that are:
    (i) Specifically authorized under criteria established by an 
Executive Order to be kept secret in the interests of national defense 
or foreign policy, and
    (ii) In fact properly classified pursuant to such Executive Order;
    (2) Relate solely to internal personnel rules and practices;
    (3) Disclose matters specifically exempted from disclosure by 
statute (other than section 552 of title 5 of the United States Code), 
provided that such statute:
    (i) Requires that the matters be withheld from the public in such a 
manner as to leave no discretion on the issue, or
    (ii) Established particular criteria for withholding or refers to 
particular types of matters to be withheld;
    (4) Disclose trade secrets and commercial or financial information 
obtained from a person and privileged or confidential;
    (5) Involve accusing any person of a crime, or formally censuring 
any person;
    (6) Disclose information of a personal nature where disclosure would 
constitute a clearly unwarranted invasion of personal privacy;
    (7) Disclose investigatory records compiled for law enforcement 
purposes, or information which if written would be contained in such 
records, but only to the extent that the production of such records or 
information would:
    (i) Interfere with enforcement proceedings,

[[Page 236]]

    (ii) Deprive a person of a right to a fair trial or an impartial 
adjudication,
    (iii) Constitute an unwarranted invasion of personal privacy,
    (iv) Disclose the identity of a confidential source and, in the case 
of a record compiled by a criminal law enforcement authority in the 
course of a criminal investigation, or by a Federal agency conducting a 
lawful national security intelligence investigation, confidential 
information furnished only by the confidential source,
    (v) Disclose investigative techniques and procedures, or
    (vi) Endanger the life or physical safety of law enforcement 
personnel;
    (8) Disclose information contained in or related to examination, 
operating, or condition reports prepared by or on behalf of, or for the 
use of the Board or other Federal agency responsible for the regulation 
or supervision of financial institutions;
    (9) Disclose information the premature disclosure of which would:
    (i) Be likely to (A) lead to significant speculation in currencies, 
securities, or commodities, or (B) significantly endanger the stability 
of any financial institution; or
    (ii) Be likely to significantly frustrate implementation of a 
proposed action except that paragraph (a)(9)(ii) of this section shall 
not apply in any instance where the Board has already disclosed to the 
public the content or nature of its proposed action, or where the Board 
is required by law to make such disclosure on its own initiative prior 
to taking final action on such proposal; or
    (10) Specifically concern the issuance of a subpoena, participation 
in a civil action or proceeding, an action in a foreign court or 
international tribunal, or an arbitration, or the initiation, conduct, 
or disposition of a particular case of formal agency adjudication 
pursuant to the procedures in section 554 of title 5 of the United 
States Code or otherwise involving a determination on the record after 
opportunity for a hearing.
    (b) [Reserved]



Sec. 1632.6  Public announcement of meetings.

    (a) Except as otherwise provided by the Act, public announcement of 
meetings open to public observation and meetings to be partially or 
completely closed to public observation pursuant to Sec. 1632.7 of this 
part will be made at least one week in advance of the meeting. Except to 
the extent such information is determined to be exempt from disclosure 
under Sec. 1632.5 of this part, each such public announcement will 
state the time, place and subject matter of the meeting, whether it is 
to be open or closed to the public, and the name and phone number of the 
official designated to respond to requests for information about the 
meeting.
    (b) If a majority of the members of the Board determines by a 
recorded vote that Board business requires that a meeting covered by 
paragraph (a) of this section be called at a date earlier than that 
specified in paragraph (a) of this section, the Board shall make a 
public announcement of the information specified in paragraph (a) of 
this section at the earliest practicable time.
    (c) Changes in the subject matter of a publicly announced meeting, 
or in the determination to open or close a publicly announced meeting or 
any portion of a publicly announced meeting to public observation, or in 
the time or place of a publicly announced meeting made in accordance 
with the procedures specified in Sec. 1632.9 of this part, will be 
publicly announced at the earliest practicable time.
    (d) Public announcements required by this section will be posted at 
the Board's External Affairs Office and may be made available by other 
means or at other locations as may be desirable.
    (e) Immediately following each public announcement required by this 
section, notice of the time, place and subject matter of a meeting, 
whether the meeting is open or closed, any change in one of the 
preceding announcements and the name and telephone number of the 
official designated by the Board to respond to requests about the 
meeting, shall also be submitted for publication in the Federal 
Register.

[[Page 237]]



Sec. 1632.7  Meetings closed to public observation.

    (a) A meeting or a portion of a meeting will be closed to public 
observation, or information as to such meeting or portion of a meeting 
will be withheld, only by recorded vote of a majority of the Members of 
the Board when it is determined that the meeting or the portion of the 
meeting or the withholding of information qualifies for exemption under 
Sec. 1632.5. Votes by proxy are not allowed.
    (b) Except as provided in paragraph (c) of this section, a separate 
vote of the Members of the Board will be taken with respect to the 
closing or the withholding of information as to each meeting or portion 
thereof which is proposed to be closed to public observation or with 
respect to which information is proposed to be withheld pursuant to this 
section.
    (c) A single vote may be taken with respect to a series of meetings, 
a portion or portions of which are proposed to be closed to public 
observation or with respect to any information concerning such series of 
meetings proposed to be withheld, so long as each meeting or portion 
thereof in such series involves the same particular matters and is 
scheduled to be held no more than thirty days after the initial meeting 
in such series.
    (d) Whenever any person's interests may be directly affected by a 
portion of the meeting for any of the reasons referred to in exemption 
(a)(5), (a)(6) or (a)(7) of Sec. 1632.5 of this part, such person may 
request in writing to the Secretary of the Board that such portion of 
the meeting be closed to public observation. The Secretary, or in his or 
her absence, the Acting Secretary of the Board, shall transmit the 
request to the members and upon the request of any one of them a 
recorded vote shall be taken whether to close such meeting to public 
observation.
    (e) Within one day of any vote taken pursuant to paragraphs (a) 
through (d) of this section, the agency will make publicly available at 
the Board's External Affairs Office a written copy of such vote 
reflecting the vote of each member on the question. If a meeting or a 
portion of a meeting is to be closed to public observation, the Board, 
within one day of the vote taken pursuant to paragraphs (a) through (d) 
of this section, will make publicly available at the Board's External 
Affairs Office a full written explanation of its action closing the 
meeting or portion of the meeting together with a list of all persons 
expected to attend the meeting and their affiliation, except to the 
extent such information is determined by the Board to be exempt from 
disclosure under subsection (c) of the Act and Sec. 1632.5 of this 
part.
    (f) Any person may request in writing to the Secretary of the Board 
that an announced closed meeting, or portion of the meeting, be held 
open to public observation. The Secretary, or in his or her absence, the 
Acting Secretary of the Board, will transmit the request to the members 
of the Board and upon the request of any member a recorded vote will be 
taken whether to open such meeting to public observation.



Sec. 1632.8  Changes with respect to publicly announced meetings.

    The subject matter of a meeting or the determination to open or 
close a meeting or a portion of a meeting to public observation may be 
changed following public announcement under Sec. 1632.6 only if a 
majority of the Members of the Board determines by a recorded vote that 
that agency business so requires and that no earlier announcement of the 
change was possible. Public announcement of such change and the vote of 
each member upon such change will be made pursuant to Sec. 1632.6(c). 
Changes in time, including postponements and cancellations of a publicly 
announced meeting or portion of a meeting or changes in the place of a 
publicly announced meeting will be publicly announced pursuant to Sec. 
1632.6(c) by the Secretary of the Board or, in the Secretary's absence, 
the Acting Secretary of the Board.



Sec. 1632.9  Certification of General Counsel.

    Before every meeting or portion of a meeting closed to public 
observation under Sec. 1632.7 of this part, the General Counsel, or in 
the General Counsel's absence, the Acting General Counsel, shall 
publicly certify whether or not in

[[Page 238]]

his or her opinion the meeting may be closed to public observation and 
shall state each relevant exemptive provision. A copy of such 
certification, together with a statement from the presiding officer of 
the meeting setting forth the time and place of the meeting and the 
persons present, will be retained for the time prescribed in Sec. 
1632.10(d).



Sec. 1632.10  Transcripts, recordings, and minutes.

    (a) The Board will maintain a complete transcript or electronic 
recording or transcription thereof adequate to record fully the 
proceedings of each meeting or portion of a meeting closed to public 
observation pursuant to exemption (a)(1), (a)(2), (a)(3), (a)(5), 
(a)(6), (a)(7), or (a)(9)(ii) of Sec. 1632.5 of this part. 
Transcriptions of recordings will disclose the identity of each speaker.
    (b) The Board will maintain either such a transcript, recording or 
transcription thereof, or a set of minutes that will fully and clearly 
describe all matters discussed and provide a full and accurate summary 
of any actions taken and the reasons therefor, including a description 
of each of the views expressed on any item and the record of any roll 
call vote (reflecting the vote of each member on the question), for 
meetings or portions of meetings closed to public observation pursuant 
to exemptions (a)(8), (a)(9)(i)(A) or (a)(10) of Sec. 1632.5 of this 
part. The minutes will identify all documents considered in connection 
with any action taken.
    (c) Transcripts, recordings or transcriptions thereof, or minutes 
will promptly be made available to the public in the External Affairs 
Office except for such item or items of such discussion or testimony as 
may be determined to contain information that may be withheld under 
subsection (c) of the Act and Sec. 1632.5 of this part. These 
documents, disclosing the identity of each speaker, shall be furnished 
to any person at the actual cost of duplication or transcription.
    (d) A complete verbatim copy of the transcript, a complete copy of 
the minutes, or a complete electronic recording or verbatim copy of a 
transcription thereof of each meeting or portion of a meeting closed to 
public observation will be maintained for a period of at least two 
years, or one year after the conclusion of any Board proceeding with 
respect to which the meeting or portion thereof was held, whichever 
occurs later.



Sec. 1632.11  Procedures for inspection and obtaining copies of 

transcriptions and minutes.

    (a) Any person may inspect or copy a transcript, a recording or 
transcription, or minutes described in Sec. 1632.10(c) of this part.
    (b) Requests for copies of transcripts, recordings or transcriptions 
of recordings, or minutes described in Sec. 1632.10(c) of this part 
shall specify the meeting or the portion of meeting desired and shall be 
submitted in writing to the Secretary of the Board, Federal Retirement 
Thrift Investment Board, 1250 H Street NW., Washington, DC 20005. Copies 
of documents identified in minutes may be made available to the public 
upon request under the provisions of 5 CFR part 1630 (the Board's 
Freedom of Information Act regulations).

[53 FR 36777, Sept. 22, 1988, as amended at 59 FR 55331, Nov. 7, 1994]



PART 1633_STANDARDS OF CONDUCT--Table of Contents




    Authority: 5 U.S.C. 7301.



Sec. 1633.1  Cross-reference to employee ethical conduct standards and financial disclosure regulations.

    Employees of the Federal Retirement Thrift Investment Board (Board) 
are subject to the executive branch-wide Standards of Ethical conduct at 
5 CFR part 2635, the Board regulations at 5 CFR part 8601 which 
supplement the executive branch-wide standards, and the executive 
branch-wide financial disclosure regulations at 5 CFR part 2634.

[59 FR 50817, Oct. 6, 1994]

[[Page 239]]



PART 1636_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN 

PROGRAMS OR ACTIVITIES CONDUCTED BY THE FEDERAL RETIREMENT THRIFT INVESTMENT 

BOARD--Table of Contents




Sec.
1636.101 Purpose.
1636.102 Application.
1636.103 Definitions.
1636.104-1636.109 [Reserved]
1636.110 Self-evaluation.
1636.111 Notice.
1636.112-1636.129 [Reserved]
1636.130 General prohibitions against discrimination.
1636.131-1636.139 [Reserved]
1636.140 Employment.
1636.141-1636.148 [Reserved]
1636.149 Program accessibility: Discrimination prohibited.
1636.150 Program accessibility: Existing facilities.
1636.151 Program accessibility: New construction and alterations.
1636.152-1636.159 [Reserved]
1636.160 Communications.
1636.161-1636.169 [Reserved]
1636.170 Compliance procedures.
1636.171-1636.999 [Reserved]

    Authority: 29 U.S.C. 794.

    Source: 58 FR 57696, 57699, Oct. 26, 1993, unless otherwise noted.



Sec. 1636.101  Purpose.

    The purpose of this part is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit discrimination on the basis of handicap in programs 
or activities conducted by Executive agencies or the United States 
Postal Service.



Sec. 1636.102  Application.

    This part (Sec. Sec. 1636.101-1636.170) applies to all programs or 
activities conducted by the agency, except for programs or activities 
conducted outside the United States that do not involve individuals with 
handicaps in the United States.



Sec. 1636.103  Definitions.

    For purposes of this part, the term--
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TTD's), interpreters, notetakers, written 
materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Historic preservation programs means programs conducted by the 
agency that have preservation of historic properties as a primary 
purpose.
    Historic properties means those properties that are listed or 
eligible for listing in the National Register of Historic Places or 
properties designated as historic under a statute of the appropriate 
State or local government body.
    Individual with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment. As used in this definition, the phrase:
    (1) Physical or mental impairment includes--

[[Page 240]]

    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term ``physical or mental 
impairment'' includes, but is not limited to, such diseases and 
conditions as orthopedic, visual, speech, and hearing impairments, 
cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, 
cancer, heart disease, diabetes, mental retardation, emotional illness, 
HIV disease (whether symptomatic or asymptomatic), and drug addiction 
and alcoholism.
    (2) Major life activities include functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Qualified individual with handicaps means--
    (1) With respect to preschool, elementary, or secondary education 
services provided by the agency, an individual with handicaps who is a 
member of a class of persons otherwise entitled by statute, regulation, 
or agency policy to receive education services from the agency;
    (2) With respect to any other agency program or activity under which 
a person is required to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
agency can demonstrate would result in a fundamental alteration in its 
nature;
    (3) With respect to any other program or activity, an individual 
with handicaps who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (4) Qualified handicapped person as that term is defined for 
purposes of employment in 29 CFR 1614.203(a)(6), which is made 
applicable to this part by Sec. 1636.140.
    Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended. As used in 
this part, section 504 applies only to programs or activities conducted 
by Executive agencies and not to federally assisted programs.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.



Sec. Sec. 1636.104-1636.109  [Reserved]



Sec. 1636.110  Self-evaluation.

    (a) The agency shall, by November 28, 1994, evaluate its current 
policies and practices, and the effects thereof, that do not or may not 
meet the requirements of this part and, to the extent modification of 
any such policies and practices is required, the agency shall proceed to 
make the necessary modifications.
    (b) The agency shall provide an opportunity to interested persons, 
including individuals with handicaps or organizations representing 
individuals with handicaps, to participate in the self-evaluation 
process by submitting comments (both oral and written).
    (c) The agency shall, for at least three years following completion 
of the

[[Page 241]]

self-evaluation, maintain on file and make available for public 
inspection:
    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made.



Sec. 1636.111  Notice.

    The agency shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this part and its applicability 
to the programs or activities conducted by the agency, and make such 
information available to them in such manner as the head of the agency 
finds necessary to apprise such persons of the protections against 
discrimination assured them by section 504 and this part.



Sec. Sec. 1636.112-1636.129  [Reserved]



Sec. 1636.130  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid, 
benefit, or service that is not as effective in according equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with handicaps or to any class of individuals with handicaps 
than is provided to others unless such action is necessary to provide 
qualified individuals with handicaps with aid, benefits, or services 
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards;
    (vi) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) The agency may not deny a qualified individual with handicaps 
the opportunity to participate in programs or activities that are no 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination 
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with handicaps.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits 
of, or otherwise subject them to discrimination under any program or 
activity conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
handicaps.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with handicaps to 
discrimination on the basis of handicap.
    (6) The agency may not administer a licensing or certification 
program in a manner that subjects qualified individuals with handicaps 
to discrimination on the basis of handicap, nor may the agency establish 
requirements for the programs or activities of licensees or certified 
entities that subject qualified

[[Page 242]]

individuals with handicaps to discrimination on the basis of handicap. 
However, the programs or activities of entities that are licensed or 
certified by the agency are not, themselves, covered by this part.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to individuals 
with handicaps or the exclusion of a specific class of individuals with 
handicaps from a program limited by Federal statute or Executive order 
to a different class of individuals with handicaps is not prohibited by 
this part.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with handicaps.



Sec. Sec. 1636.131-1636.139  [Reserved]



Sec. 1636.140  Employment.

    No qualified individual with handicaps shall, on the basis of 
handicap, be subjected to discrimination in employment under any program 
or activity conducted by the agency. The definitions, requirements, and 
procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791), as established by the Equal Employment Opportunity Commission in 
29 CFR part 1614, shall apply to employment in federally conducted 
programs or activities.



Sec. Sec. 1636.141-1636.148  [Reserved]



Sec. 1636.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 1636.150, no qualified 
individual with handicaps shall, because the agency's facilities are 
inaccessible to or unusable by individuals with handicaps, be denied the 
benefits of, be excluded from participation in, or otherwise be 
subjected to discrimination under any program or activity conducted by 
the agency.



Sec. 1636.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with handicaps. This paragraph 
does not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with handicaps;
    (2) In the case of historic preservation programs, require the 
agency to take any action that would result in a substantial impairment 
of significant historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec. 1636.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that result in such an 
alteration or such burdens but would nevertheless ensure that 
individuals with handicaps receive the benefits and services of the 
program or activity.
    (b) Methods--(1) General. The agency may comply with the 
requirements of this section through such means as redesign of 
equipment, reassignment of services to accessible buildings, assignment 
of aides to beneficiaries, home visits, delivery of services at 
alternate accessible sites, alteration of existing facilities and 
construction of new facilities, use of accessible rolling stock, or any 
other methods that result in making its programs or activities readily 
accessible to and usable by individuals with handicaps. The agency is 
not required to make structural changes in existing facilities where 
other methods are effective in achieving compliance with this section. 
The agency, in making alterations to existing buildings,

[[Page 243]]

shall meet accessibility requirements to the extent compelled by the 
Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), 
and any regulations implementing it. In choosing among available methods 
for meeting the requirements of this section, the agency shall give 
priority to those methods that offer programs and activities to 
qualified individuals with handicaps in the most integrated setting 
appropriate.
    (2) Historic preservation programs. In meeting the requirements of 
Sec. 1636.150(a) in historic preservation programs, the agency shall 
give priority to methods that provide physical access to individuals 
with handicaps. In cases where a physical alteration to an historic 
property is not required because of Sec. 1636.150(a)(2) or (a)(3), 
alternative methods of achieving program accessibility include--
    (i) Using audio-visual materials and devices to depict those 
portions of an historic property that cannot otherwise be made 
accessible;
    (ii) Assigning persons to guide individuals with handicaps into or 
through portions of historic properties that cannot otherwise be made 
accessible; or
    (iii) Adopting other innovative methods.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section by January 24, 1994, except 
that where structural changes in facilities are undertaken, such changes 
shall be made by November 26, 1996, but in any event as expeditiously as 
possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be undertaken to achieve program accessibility, the 
agency shall develop, by May 26, 1994, a transition plan setting forth 
the steps necessary to complete such changes. The agency shall provide 
an opportunity to interested persons, including individuals with 
handicaps or organizations representing individuals with handicaps, to 
participate in the development of the transition plan by submitting 
comments (both oral and written). A copy of the transition plan shall be 
made available for public inspection. The plan shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the 
plan.



Sec. 1636.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to and usable by 
individuals with handicaps. The definitions, requirements, and standards 
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established 
in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this 
section.



Sec. Sec. 1636.152-1636.159  [Reserved]



Sec. 1636.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall give primary consideration to the requests of the 
individual with handicaps.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
by telephone, telecommunication devices

[[Page 244]]

for deaf persons (TDD's) or equally effective telecommunication systems 
shall be used to communicate with persons with impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec. 1636.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such an alteration or such burdens, the agency 
shall take any other action that would not result in such an alteration 
or such burdens but would nevertheless ensure that, to the maximum 
extent possible, individuals with handicaps receive the benefits and 
services of the program or activity.



Sec. Sec. 1636.161-1636.169  [Reserved]



Sec. 1636.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs and activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1614 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (c) The Assistant General Counsel (Administration) shall be 
responsible for coordinating implementation of this section. Complaints 
may be sent to the Executive Director.
    (d) The agency shall accept and investigate all complete complaints 
for which it has jurisdiction. All complete complaints must be filed 
within 180 days of the alleged act of discrimination. The agency may 
extend this time period for good cause.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate Government 
entity.
    (f) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to 
and usable by individuals with handicaps.
    (g) Within 180 days of the receipt of a complete complaint for which 
it has jurisdiction, the agency shall notify the complainant of the 
results of the investigation in a letter containing--
    (1) Findings of fact and conclusions of law;
    (2) A description of a remedy for each violation found; and
    (3) A notice of the right to appeal.
    (h) Appeals of the findings of fact and conclusions of law or 
remedies must be filed by the complainant within 90 days of receipt from 
the agency of the letter required by Sec. 1636.170(g). The agency may 
extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the head of 
the agency.
    (j) The head of the agency shall notify the complainant of the 
results of the appeal within 60 days of the receipt

[[Page 245]]

of the request. If the head of the agency determines that additional 
information is needed from the complainant, he or she shall have 60 days 
from the date of receipt of the additional information to make his or 
her determination on the appeal.
    (k) The time limits cited in paragraphs (g) and (j) of this section 
may be extended with the permission of the Assistant Attorney General.
    (l) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.

[58 FR 57696, 57699, Oct. 26, 1993, as amended at 58 FR 57697, Oct. 26, 
1993]



Sec. Sec. 1636.171-1636.999  [Reserved]



PART 1639_CLAIMS COLLECTION--Table of Contents




   Subpart A_Administrative Collection, Compromise, Termination, and 
                           Referral of Claims

Sec.
1639.1 Authority.
1639.2 Application of other regulations; scope.
1639.3 Application to other statutes.
1639.4 Definitions.
1639.5 Use of credit reporting agencies.
1639.6 Contracting for collection services.
1639.7 Initial notice to debtor.
1639.8 Interest, penalty, and administrative costs.
1639.9 Charges pending waiver or review.
1639.10 Referrals to the Department of Justice.
1639.11 Cross-servicing agreement with the Department of the Treasury.
1639.12 Deposit of funds collected.
1639.13 Antialienation of funds in Thrift Savings Plan participant 
          accounts.

                         Subpart B_Salary Offset

1639.20 Applicability and scope.
1639.21 Waiver requests.
1639.22 Notice requirements before offset.
1639.23 Hearing.
1639.24 Certification.
1639.25 Voluntary repayment agreements as alternative to salary offset.
1639.26 Special review.
1639.27 Procedures for salary offset.
1639.28 Coordinating salary offset with other agencies.
1639.29 Refunds.
1639.30 Non-waiver of rights by payments.

                       Subpart C_Tax Refund Offset

1639.40 Applicability and scope.
1639.41 Procedures for tax refund offset.
1639.42 Notice requirements before tax refund offset.

                     Subpart D_Administrative Offset

1639.50 Applicability and scope.
1639.51 Notice procedures.
1639.52 Board review.
1639.53 Written agreement for repayment.
1639.54 Requests for offset to Federal agencies.
1639.55 Requests for offset from Federal agencies.
1639.56 Expedited procedure.

    Authority: 5 U.S.C. 8474; 31 U.S.C. 3711, 3716, 3720A.

    Source: 62 FR 49417, Sept. 22, 1997, unless otherwise noted.



   Subpart A_Administrative Collection, Compromise, Termination, and 
                           Referral of Claims



Sec. 1639.1  Authority.

    The regulations of this part are issued under 5 U.S.C. 8474 and 31 
U.S.C. 3711, 3716, and 3720A, and in conformity with the Federal Claims 
Collection Standards, 4 CFR chapter II, prescribing standards for 
administrative collection, compromise, termination of agency collection 
action, and referral to the Department of Justice for litigation of 
civil claims by the Government for money or property, 4 CFR chapter II.



Sec. 1639.2  Application of other regulations; scope.

    All provisions of the Federal Claims Collection Standards, 4 CFR 
chapter II, apply to the regulations of this part. This part supplements 
4 CFR chapter II by the prescription of procedures and directives 
necessary and appropriate for operations of the Federal Retirement 
Thrift Investment Board. The Federal Claims Collection Standards and 
this part do not apply to any claim as to which there is an indication 
of fraud or misrepresentation, as described in 4 CFR 101.3, unless 
returned by the Department of Justice to the Board for handling.

[[Page 246]]



Sec. 1639.3  Application to other statutes.

    (a) The Executive Director may exercise his or her compromise 
authority for those debts not exceeding $100,000, excluding interest, in 
conformity with the Federal Claims Collection Act of 1966, the Federal 
Claims Collection Standards issued thereunder, and this part, except 
where standards are established by other statutes or authorized 
regulations issued pursuant to them.
    (b) The authority of the Executive Director of the Board to remit or 
mitigate a fine, penalty, or forfeiture will be exercised in accordance 
with the standards for remission or mitigation established in the 
governing statute. In the absence of such standards, the Federal Claims 
Collection Standards will be followed to the extent applicable.



Sec. 1639.4  Definitions.

    As used in this part:
    Administrative offset, as defined in 31 U.S.C. 3701(a)(1), means 
withholding funds payable by the United States (including funds payable 
to the United States on behalf of a State government) to, or held by the 
United States for, a person to satisfy a debt owed to the United States.
    Agency means executive departments and agencies, the United States 
Postal Service, the Postal Rate Commission, the United States Senate, 
the United States House of Representatives, and any court, court 
administrative office, or instrumentality in the judicial or legislative 
branches of the Government, and Government corporations.
    Board means the Federal Retirement Thrift Investment Board, which 
administers the Thrift Savings Plan and the Thrift Savings Fund.
    Certification means a written debt claim form received from a 
creditor agency which requests the paying agency to offset the salary of 
an employee.
    Creditor agency means an agency of the Federal Government to which 
the debt is owed.
    Debt means money owed by an individual to the United States 
including a debt owed to the Thrift Savings Fund or to a Federal agency, 
but does not include a Thrift Savings Plan loan.
    Delinquent debt means a debt that has not been paid within the time 
limit prescribed by the Board.
    Disposable pay means that part of current basic pay, special pay, 
incentive pay, retirement pay, retainer pay, or, in the case of an 
employee not entitled to basic pay, other authorized pay remaining after 
the deduction of any amount required by law to be withheld, excluding 
any garnishment under 5 CFR parts 581, 582. The Board will include the 
following deductions in determining disposable pay subject to salary 
offset:
    (1) Federal Social Security and Medicare taxes;
    (2) Federal, state, or local income taxes, but no more than would be 
the case if the employee claimed all dependents to which he or she is 
entitled and any additional amounts for which the employee presents 
evidence of a tax obligation supporting the additional withholding;
    (3) Health insurance premiums;
    (4) Normal retirement contributions as explained in 5 CFR 
581.105(e);
    (5) Normal life insurance premiums, excluding optional life 
insurance premiums; and
    (6) Levies pursuant to the Internal Revenue Code, as defined in 5 
U.S.C. 5514(d).
    Employee means a current employee of an agency, including a current 
member of the Armed Forces or Reserve of the Armed Forces of the United 
States.
    Executive Director means the Executive Director of the Federal 
Retirement Thrift Investment Board, or his or her designee.
    Federal Claims Collection Standards means the standards published at 
4 CFR chapter II.
    Hearing official means an individual responsible for conducting any 
hearing with respect to the existence or amount of a debt claimed, and 
rendering a decision on the basis of the hearing.
    Net Assets Available for Thrift Savings Plan Benefits means all 
funds owed to Thrift Savings Plan participants and beneficiaries.
    Notice of intent to offset or notice of intent means a written 
notice from a creditor agency to an employee which alleges that the 
employee owes a debt

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to the creditor agency and which apprises the employee of certain 
administrative rights.
    Notice of salary offset means a written notice from the paying 
agency to an employee informing the employee that it has received a 
certification from a creditor agency and intends to begin salary offset.
    Participant means any person with an account in the Thrift Savings 
Plan, or who would have an account but for an employing agency error.
    Paying agency means the agency of the Federal Government which 
employs the individual who owes a debt to the United States. In some 
cases, the Federal Retirement Thrift Investment Board may be both the 
creditor agency and the paying agency.
    Payroll office means the payroll office in the paying agency which 
is primarily responsible for the payroll records and the coordination of 
pay matters with the appropriate personnel office with respect to an 
employee.
    Person includes a natural person or persons, profit or non-profit 
corporation, partnership, association, trust, estate, consortium, State 
and local governments, or other entity that is capable of owing a debt 
to the United States Government; however, agencies of the United States, 
are excluded.
    Private collection contractor means a private debt collector under 
contract with an agency to collect a non-tax debt owed to the United 
States.
    Salary offset means an offset to collect a debt under 5 U.S.C. 5514 
by deduction(s) at one or more officially established pay intervals from 
the current pay account of an employee, without his or her consent.
    Tax refund offset means the reduction of a tax refund by the amount 
of a past-due legally enforceable debt owed to the Board or a Federal 
agency.
    Thrift Savings Fund means the Fund described in 5 U.S.C. 8437.
    Thrift Savings Plan means the Federal Retirement Thrift Savings Plan 
established by the Federal Employees' Retirement System Act of 1986, 
codified in pertinent part at 5 U.S.C. 8431 et seq..
    Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt allegedly owed by a person to the Board or a Federal 
agency as permitted or required by 5 U.S.C. 5584 or 8346(b), 10 U.S.C. 
2774, 32 U.S.C. 716, or any other law.



Sec. 1639.5  Use of credit reporting agencies.

    (a) The Board may report delinquent debts to appropriate credit 
reporting agencies by providing the following information:
    (1) A statement that the debt is valid and is overdue;
    (2) The name, address, taxpayer identification number, and any other 
information necessary to establish the identity of the debtor;
    (3) The amount, status, and history of the debt; and
    (4) The program or pertinent activity under which the debt arose.
    (b) Before disclosing debt information to a credit reporting agency, 
the Board will:
    (1) Take reasonable action to locate the debtor if a current address 
is not available; and
    (2) If a current address is available, notify the debtor by 
certified mail, return receipt requested:
    (i) That a designated Board official has reviewed the claim and has 
determined that the claim is valid and over-due;
    (ii) That within 60 days the Board intends to disclose to a credit 
reporting agency the information authorized for disclosure by this 
section; and
    (iii) That the debtor can request an explanation of the claim, can 
dispute the information in the Board's records concerning the claim, and 
can file for an administrative review, waiver, or reconsideration of the 
claim, where applicable.
    (c) At the time debt information is submitted to a credit reporting 
agency, the Board will provide a written statement to the reporting 
agency that all required actions have been taken. In addition, the Board 
will, thereafter, ensure that the credit reporting agency is promptly 
informed of any substantive change in the conditions or amount of the 
debt, and promptly verify or correct information relevant to the claim.
    (d) If a debtor disputes the validity of the debt, the credit 
reporting agency will refer the matter to the appropriate Board 
official. The credit reporting

[[Page 248]]

agency will exclude the debt from its reports until the Board certifies 
in writing that the debt is valid.



Sec. 1639.6  Contracting for collection services.

    The Board will use the services of a private collection contractor 
where it determines that such use is in the best interest of the Board. 
When the Board determines that there is a need to contract for 
collection services, it will--
    (a) Retain sole authority to:
    (1) Resolve any dispute by the debtor regarding the validity of the 
debt;
    (2) Compromise the debt;
    (3) Suspend or terminate collection action;
    (4) Refer the debt to the Department of Justice for litigation; and
    (5) Take any other action under this part which does not result in 
full collection of the debt;
    (b) Require the contractor to comply with the Privacy Act of 1974, 
as amended, to the extent specified in 5 U.S.C. 552a(m), with applicable 
Federal and State laws pertaining to debt collection practices (e.g., 
the Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.)), and 
with applicable regulations of the Board;
    (c) Require the contractor to account accurately and fully for all 
amounts collected; and
    (d) Require the contractor to provide to the Board, upon request, 
all data and reports contained in its files relating to its collection 
actions on a debt.



Sec. 1639.7  Initial notice to debtor.

    (a) When the Executive Director determines that a debt is owed the 
Board, he will send a written notice to the debtor. The notice will 
inform the debtor of the following:
    (1) The amount, nature, and basis of the debt;
    (2) That payment is due immediately after receipt of the notice;
    (3) That the debt is considered delinquent if it is not paid within 
30 days of the date the notice is mailed or hand-delivered;
    (4) That interest charges (except for State and local governments 
and Indian tribes), penalty charges, and admini strative costs may be 
assessed against a delinquent debt;
    (5) Any rights available to the debtor to dispute the validity of 
the debt or to have recovery of the debt waived (citing the available 
review or waiver authority, the conditions for review or waiver, and the 
effects of the review or waiver request on the collection of the debt); 
and
    (6) The address, telephone number, and name of the Board official 
available to discuss the debt.
    (b) The Board will respond promptly to communications from the 
debtor.
    (c) Subsequent demand letters also will notify the debtor of any 
interest, penalty, or administrative costs which have been assessed and 
will advise the debtor that the debt may be referred to a credit 
reporting agency (see Sec. 1639.5), a collection agency (see Sec. 
1639.6), the Department of Justice (see Sec. 1639.10), or the 
Department of the Treasury (see Sec. 1639.11), if it is not paid.



Sec. 1639.8  Interest, penalty, and administrative costs.

    (a) Interest. The Board will assess interest on all delinquent debts 
unless prohibited by statute, regulation, or contract.
    (1) Interest begins to accrue on all debts from the date the initial 
notice is mailed or hand-delivered to the debtor. The Board will not 
recover interest if the debt is paid within 30 days of the date of the 
initial notice. The Board will assess an annual rate of interest that is 
equal to the rate of the current value of funds to the United States 
Treasury (i.e., the Treasury tax and loan account rate) as prescribed 
and published by the Secretary of the Treasury in the Federal Register 
and the Treasury Fiscal Requirements Manual Bulletins, unless a 
different rate is necessary to protect the interests of the Board. The 
Board will notify the debtor of the basis for its finding when a 
different rate is necessary to protect the Board's interests.
    (2) The Executive Director may extend the 30-day period for payment 
where he determines that such action is in the best interest of the 
Board. A decision to extend or not to extend the payment period is final 
and is not subject to further review.

[[Page 249]]

    (b) Penalty. The Board will assess a penalty charge, not to exceed 
six percent a year, on any portion of a debt that is not paid within 90 
days of the initial notice.
    (c) Administrative costs. The Board will assess charges to cover 
administrative costs incurred as the result of the debtor's failure to 
pay a debt within 30 days of the date of the initial notice. 
Administrative costs include the additional costs incurred in processing 
and handling the debt because it became delinquent, such as costs 
incurred in obtaining a credit report, or in using a private collection 
contractor, or service fees charged by a Federal agency for collection 
activities undertaken on behalf of the Board.
    (d) Allocation of payments. A partial payment by a debtor will be 
applied first to outstanding administrative costs, second to penalty 
assessments, third to accrued interest, and then to the outstanding debt 
principal.
    (e) Waiver. (1) The Executive Director may (without regard to the 
amount of the debt) waive collection of all or part of accrued interest, 
penalty, or administrative costs, if he determines that collection of 
these charges would be against equity and good conscience or not in the 
best interest of the Board.
    (2) A decision to waive interest, penalty charges, or administrative 
costs may be made at any time before a debt is paid. However, where 
these charges have been collected before the waiver decision, they will 
not be refunded. The Executive Director's decision to waive or not waive 
collection of these charges is final and is not subject to further 
review.



Sec. 1639.9  Charges pending waiver or review.

    Interest, penalty charges, and administrative costs will continue to 
accrue on a debt during administrative appeal, either formal or 
informal, and during waiver consideration by the Board, unless 
specifically prohibited by a statute or a regulation.



Sec. 1639.10  Referrals to the Department of Justice.

    The Executive Director will refer to the Department of Justice for 
litigation all claims on which aggressive collection actions have been 
taken but which could not be collected, compromised, suspended, or 
terminated. Referrals will be made as early as possible, consistent with 
aggressive Board collection action, and within the period for bringing a 
timely suit against the debtor.



Sec. 1639.11  Cross-servicing agreement with the Department of the Treasury.

    The Board will enter into a cross-servicing agreement with the 
Department of the Treasury which will authorize Treasury to take all of 
the debt collection actions described in this part. These debt 
collection services will be provided to the Board in accordance with 31 
U.S.C. 3701 et seq.



Sec. 1639.12  Deposit of funds collected.

    All funds owed to the Board and collected under this part will be 
deposited in the Thrift Savings Fund. Funds owed to other agencies and 
collected under this part will be credited to the account designated by 
the creditor agency for the receipt of the funds.



Sec. 1639.13  Antialienation of funds in Thrift Savings Plan participant 

accounts.

    In accordance with 5 U.S.C. 8437, net assets available for Thrift 
Savings Plan benefits will not be used to satisfy a debt owed by a 
participant to an agency under the regulations of this part or under the 
debt collection regulations of any agency.



                         Subpart B_Salary Offset



Sec. 1639.20  Applicability and scope.

    (a) The regulations in this subpart provide Board procedures for the 
collection by salary offset of a Federal employee's pay to satisfy 
certain debts owed to the Board or to Federal agencies.
    (b) The regulations in this subpart apply to collections by the 
Executive Director, from:
    (1) Federal employees who owe debts to the Board; and
    (2) Employees of the Board who owe debts to Federal agencies.

[[Page 250]]

    (c) The regulations in this subpart do not apply to debts arising 
under the Internal Revenue Code of 1986, as amended (title 26, United 
States Code); the Social Security Act (42 U.S.C. 301 et seq.); the 
tariff laws of the United States; or to any case where collection of a 
debt by salary offset is explicitly provided for or prohibited by 
another statute (e.g., travel advances in 5 U.S.C. 5705 and employee 
training expenses in 5 U.S.C. 4108).
    (d) Nothing in the regulations in this subpart precludes the 
compromise, suspension, or termination of collection actions under the 
standards implementing the Federal Claims Collection Act (31 U.S.C. 3711 
et seq., 4 CFR Parts 101-105, 38 CFR 1.900-1.994).
    (e) A levy pursuant to the Internal Revenue Code takes precedence 
over a salary offset under this subpart, as provided in 5 U.S.C. 
5514(d).
    (f) This subpart does not apply to any adjustment to pay arising out 
of an employee's election of coverage or a change in coverage under a 
Federal benefits program requiring periodic deductions from pay, if the 
amount to be recovered was accumulated over four pay periods or less.



Sec. 1639.21  Waiver requests.

    The regulations in this subpart do not preclude an employee from 
requesting waiver of an overpayment under 5 U.S.C. 5584 or 8346(b), 10 
U.S.C. 2774, 32 U.S.C. 716, or under other statutory provisions 
pertaining to the particular debts being collected.



Sec. 1639.22  Notice requirements before offset.

    Deductions under the authority of 5 U.S.C. 5514 may be made if, a 
minimum of 30 calendar days before salary offset is initiated, the Board 
provides the employee with written notice that he or she owes a debt to 
the Board. This notice of intent to offset an employee's salary will be 
hand-delivered or sent by certified mail to the most current address 
that is available to the Board. The notice provided under this section 
will state:
    (a) That the Board has reviewed the records relating to the claim 
and has determined that a debt is owed, the amount of the debt, and the 
facts giving rise to the debt;
    (b) The Board's intention to collect the debt by deducting money 
from the employee's current disposable pay account until the debt, and 
all accumulated interest, penalties, and administrative costs, is paid 
in full;
    (c) The amount, frequency, approximate beginning date, and duration 
of the intended deductions;
    (d) An explanation of the Board's policy concerning interest, 
penalties, and administrative costs, including a statement that such 
assessments must be made unless excused in accordance with the Federal 
Claims Collection Standards, 4 CFR chapter II;
    (e) The employee's right to inspect and copy all records pertaining 
to the debt claimed or to receive copies of those records if personal 
inspection is impractical;
    (f) The right to a hearing conducted by an administrative law judge 
or other impartial hearing official (i.e., a hearing official not under 
the supervision or control of the Executive Director), with respect to 
the existence and amount of the debt claimed or the repayment schedule 
(i.e., the percentage of disposable pay to be deducted each pay period), 
so long as a request is filed by the employee as prescribed in Sec. 
1639.23;
    (g) If not previously provided, the opportunity (under terms 
agreeable to the Board) to establish a schedule for the voluntary 
repayment of the debt or to enter into a written agreement to establish 
a schedule for repayment of the debt in lieu of offset. The agreement 
must be in writing and signed by both the employee and the Executive 
Director;
    (h) The name, address, and telephone number of an officer or 
employee of the Board who may be contacted concerning procedures for 
requesting a hearing;
    (i) The method and time period for requesting a hearing;
    (j) That the timely filing of a request for a hearing on or before 
the 15th calendar day following receipt of the notice of intent will 
stay the commencement of collection proceedings;
    (k) The name and address of the officer or employee of the Board to 
whom

[[Page 251]]

the request for a hearing should be sent;
    (l) That the Board will initiate certification procedures to 
implement a salary offset, as appropriate, (which may not exceed 15 
percent of the employee's disposable pay) not less than 30 days from the 
date the employee receives the notice of debt, unless the employee files 
a timely request for a hearing;
    (m) That a final decision on the hearing (if one is requested) will 
be issued at the earliest practical date, but not later than 60 days 
after the filing of the petition requesting the hearing, unless the 
employee requests and the hearing official grants a delay in the 
proceedings;
    (n) That any knowingly false or frivolous statements, 
representations, or evidence may subject the employee to:
    (1) Disciplinary procedures appropriate under 5 U.S.C. chapter 75, 5 
CFR part 752, or any other applicable statute or regulations;
    (2) Penalties under the False Claims Act, 31 U.S.C. 3729-3733, or 
any other applicable statutory authority; and
    (3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 102, or 
any other applicable statutory authority;
    (o) Any other rights and remedies available to the employee under 
statutes or regulations governing the program for which the collection 
is being made;
    (p) That unless there are applicable contractual or statutory 
provisions to the contrary, amounts paid on or deducted for the debt 
which are later waived or found not owed will be promptly refunded to 
the employee; and
    (q) That proceedings with respect to the debt are governed by 5 
U.S.C. 5514.



Sec. 1639.23  Hearing.

    (a) Request for hearing. Except as provided in paragraph (b) of this 
section, an employee who desires a hearing concerning the existence or 
amount of the debt or the proposed offset schedule must send such a 
request to the Board office designated in the notice of intent. See 
Sec. 1639.22(k).
    (1) The request for hearing must be signed by the employee and fully 
identify and explain with reasonable specificity all the facts, 
evidence, and witnesses, if any, that support his or her position.
    (2) The request for hearing must be received by the designated 
office on or before the 15th calendar day following the employee's 
receipt of the notice. Timely filing will stay the commencement of 
collection procedures.
    (3) The employee must also specify whether an oral or written 
hearing is requested. If an oral hearing is desired, the request should 
explain why the matter cannot be resolved by review of the documentary 
evidence alone.
    (b) Failure to timely submit. (1) If the employee files a request 
for a hearing after the expiration of the 15th calendar day period 
provided for in paragraph (a) of this section, the Board will accept the 
request if the employee can show that the delay was the result of 
circumstances beyond his or her control or because of a failure to 
receive notice of the filing deadline (unless the employee had actual 
notice of the filing deadline).
    (2) An employee waives the right to a hearing, and will have his or 
her disposable pay offset in accordance with the Board's offset 
schedule, if the employee:
    (i) Fails to file a request for a hearing and the failure is not 
excused; or
    (ii) Fails to appear at an oral hearing of which he or she was 
notified and the hearing official does not determine that failure to 
appear was due to circumstances beyond the employee's control.
    (c) Representation at the hearing. The creditor agency may be 
represented by legal counsel. The employee may represent himself or 
herself or may be represented by an individual of his or her choice and 
at his or her own expense.
    (d) Review of Board records related to the debt. (1) In accordance 
with Sec. 1639.22(e), an employee who intends to inspect or copy Board 
records related to the debt must send a letter to the official 
designated in the notice of intent to offset stating his or her 
intention. The letter must be received within 15 calendar days after the 
employee's receipt of the notice.

[[Page 252]]

    (2) In response to a timely request submitted by the debtor, the 
designated official will notify the employee of the location and time 
when the employee may inspect and copy records related to the debt.
    (3) If personal inspection is impractical, arrangements will be made 
to send copies of those records to the employee.
    (e) Hearing official. The Board may request an administrative law 
judge to conduct the hearing or the Board may obtain a hearing official 
who is not under the supervision or control of the Executive Director.
    (f) Procedure--(1) General. After the employee requests a hearing, 
the hearing official will notify the employee of the form of the hearing 
to be provided. If the hearing will be oral, the notice will set forth 
the date, time, and location of the hearing. If the hearing will be 
written, the employee will be notified that he or she should submit 
arguments in writing to the hearing official by a specified date after 
which the record will be closed. This date will give the employee 
reasonable time to submit documentation.
    (2) Oral hearing. An employee who requests an oral hearing will be 
provided an oral hearing, if the hearing official determines that the 
matter cannot be resolved by review of documentary evidence alone (e.g., 
when an issue of credibility is involved). The hearing is not an 
adversarial adjudication and need not take the form of an evidentiary 
hearing. Witnesses who testify in oral hearings will do so under oath or 
affirmation. Oral hearings may take the form of, but are not limited to:
    (i) Informal conferences with the hearing official, in which the 
employee and agency representative will be given full opportunity to 
present evidence, witnesses, and argument;
    (ii) Informal meetings with an interview of the employee; or
    (iii) Formal written submissions, with an opportunity for oral 
presentation.
    (3) Record determination. If the hearing official determines that an 
oral hearing is not necessary, he or she will make the determination 
based upon a review of the available written record.
    (4) Record. The hearing official must maintain a summary record of 
any hearing provided by this subpart.
    (g) Date of decision. The hearing official will issue a written 
decision, based upon documentary evidence and information developed at 
the hearing, as soon as practical after the hearing, but not later than 
60 days after the date on which the petition was received by the 
creditor agency, unless the employee requests a delay in the 
proceedings. In that case, the 60 day decision period will be extended 
by the number of days by which the hearing was postponed.
    (h) Content of decision. The written decision will include:
    (1) A statement of the facts presented to support the origin, 
nature, and amount of the debt;
    (2) The hearing official's findings, analysis, and conclusions; and
    (3) The terms of any repayment schedules, if applicable.
    (i) Failure to appear. (1) In the absence of good cause shown (e.g., 
excused illness), an employee who fails to appear at a hearing will be 
deemed, for the purpose of this subpart, to admit the existence and 
amount of the debt as described in the notice of intent.
    (2) If the representative of the creditor agency fails to appear, 
the hearing official will proceed with the hearing as scheduled, and 
make his or her determination based upon the oral testimony presented by 
the representative(s) of the employee and the documentary documentation 
submitted by both parties.
    (3) At the request of both parties, the hearing official will 
schedule a new hearing date. Both parties will be given reasonable 
notice of the time and place of this new hearing.



Sec. 1639.24  Certification.

    (a) The Board will provide a certification to the paying agency in 
all cases in which:
    (1) The hearing official determines that a debt exists;
    (2) The employee admits the existence and amount of the debt by 
failing to request a hearing; or
    (3) The employee admits the existence of the debt by failing to 
appear at a hearing.

[[Page 253]]

    (b) The certification must be in writing and must include:
    (1) A statement that the employee owes the debt;
    (2) The amount and basis of the debt;
    (3) The date the Board's right to collect the debt first accrued;
    (4) A statement that the Board's regulations have been approved by 
the Office of Personnel Management under 5 CFR part 550, subpart K;
    (5) The amount and date of the collection, if only a one-time offset 
is required;
    (6) If the collection is to be made in installments, the number of 
installments to be collected, the amount of each installment, and the 
date of the first installment, if a date other than the next officially 
established pay period is required; and
    (7) Information regarding the completion of procedures required by 5 
U.S.C. 5514, including the dates of notices and hearings provided to the 
employee, or, if applicable, the employee's signed consent to salary 
offset or a signed statement acknowledging receipt of required 
procedures.



Sec. 1639.25  Voluntary repayment agreements as alternative to salary offset.

    (a) In response to a notice of intent to offset against an 
employee's salary to recover a debt owed to the Board, an employee may 
propose to the Board that he or she be allowed to repay the debt through 
direct payments as an alternative to salary offset. Any employee who 
wishes to repay a debt without salary offset must submit in writing a 
proposed agreement to repay the debt. The proposal must admit the 
existence of the debt and set forth a proposed repayment schedule. The 
employee's proposal must be received by the official designated in the 
notice of intent within 15 calendar days after the employee received the 
notice.
    (b) In response to a timely proposal by the debtor, the Executive 
Director will notify the employee whether the employee's proposed 
written agreement for repayment is acceptable. It is within the 
Executive Director's discretion to accept a repayment agreement instead 
of proceeding by salary offset.
    (c) If the Executive Director decides that the proposed repayment 
agreement is unacceptable, the employee will have 15 days from the date 
he or she received notice of the decision to file a petition for a 
hearing.
    (d) If the Executive Director decides that the proposed repayment 
agreement is acceptable, the alternative arrange ment must be in writing 
and signed by both the employee and the Executive Director.



Sec. 1639.26  Special review.

    (a) An employee subject to salary offset or a voluntary repayment 
agreement in connection with a debt owed to the Board may, at any time, 
request that the Board conduct a special review of the amount of the 
salary offset or voluntary payment, based on materially changed 
circumstances, such as catastrophic illness, divorce, death, or 
disability.
    (b) To assist the Board in determining whether an offset would 
prevent the employee from meeting essential subsistence expenses (costs 
incurred for food, housing, clothing, transportation, and medical care), 
the employee will submit a detailed statement and supporting documents 
for the employee, his or her spouse, and dependents, indicating:
    (1) Income from all sources;
    (2) Assets;
    (3) Liabilities;
    (4) Number of dependents;
    (5) Expenses for food, housing, clothing, and transportation;
    (6) Medical expenses; and
    (7) Exceptional expenses, if any.
    (c) If the employee requests a special review under this section, 
the employee must file an alternative proposed salary offset or payment 
schedule and a statement, with supporting documents, showing why the 
current salary offset or payments result in an extreme financial 
hardship to the employee.
    (d) The Executive Director will evaluate the statement and 
supporting documents, and determine whether the original offset or 
repayment schedule imposes an extreme financial hardship on the 
employee. The Executive Director will notify the employee in writing

[[Page 254]]

of his determination, including, if appropriate, a revised offset or 
payment schedule.
    (e) If the special review results in a revised offset or repayment 
schedule, the Board will provide a new certification to the paying 
agency.



Sec. 1639.27  Procedures for salary offset.

    (a) The Board will coordinate salary deductions under this subpart.
    (b) The Board's payroll office will determine the amount of an 
employee's disposable pay and will implement the salary offset.
    (c) Deductions will begin within three official pay periods 
following receipt by the Board's payroll office of certification for the 
creditor agency.
    (d) Types of collection--
    (1) Lump-sum offset. If the amount of the debt is equal to or less 
than 15 percent of disposable pay, the debt generally will be collected 
through one lump-sum offset.
    (2) Installment deductions. Installment deductions will be made over 
a period not greater than the anticipated period of employment. The size 
and frequency of installment deductions will bear a reasonable relation 
to the size of the debt and the employee's ability to pay. However, the 
amount deducted from any period will not exceed 15 percent of the 
disposable pay from which the deduction is made unless the employee has 
agreed in writing to the deduction of a greater amount.
    (3) Deductions from final check. A deduction exceeding the 15 
percent disposable pay limitation may be made from any final salary 
payment under 31 U.S.C. 3716 and the Federal Claims Collection 
Standards, 4 CFR chapter II, in order to liquidate the debt, whether the 
employee is being separated voluntarily or involuntarily.
    (4) Deductions from other sources. If an employee subject to salary 
offset is separated from the Board, and the balance of the debt cannot 
be liquidated by offset of the final salary check, the Board may offset 
any later payments of any kind against the balance of the debt, as 
allowed by 31 U.S.C. 3716 and the Federal Claims Collection Standards, 4 
CFR chapter II.
    (e) Multiple debts. In instances where two or more creditor agencies 
are seeking salary offsets, or where two or more debts are owed to a 
single creditor agency, the Board's payroll office may, at its 
discretion, determine whether one or more debts should be offset 
simultaneously within the 15 percent limitation.
    (f) Precedence of debts owed to the Board. For Board employees, 
debts owed to the Board generally take precedence over debts owed to 
other agencies. In the event that a debt to the Board is certified while 
an employee is subject to a salary offset to repay another agency, the 
Board may decide whether to have the first debt repaid in full before 
collecting the claim or whether changes should be made in the salary 
deduction being sent to the other agency. If debts owed the Board can be 
collected in one pay period, the Board payroll office may suspend the 
salary offset to the other agency for that pay period in order to 
liquidate the debt to the Board. When an employee owes two or more 
debts, the best interests of the Board will be the primary con 
sideration in the payroll office's determination of the order in which 
the debts should be collected.



Sec. 1639.28  Coordinating salary offset with other agencies.

    (a) Responsibility of the Board as the creditor agency. (1) The 
Board will coordinate debt collections with other agencies and will, as 
appropriate:
    (i) Arrange for a hearing or special review upon proper petitioning 
by the debtor; and
    (ii) Prescribe, upon consultation with the General Counsel, the 
additional practices and procedures that may be necessary to carry out 
the intent of this subpart.
    (2) The Board will ensure:
    (i) That each notice of intent to offset is consistent with the 
requirements of Sec. 1639.22;
    (ii) That each certification of debt that is sent to a paying agency 
is consistent with the requirements of Sec. 1639.24; and
    (iii) That hearings are properly scheduled.
    (3) Requesting recovery from current paying agency. Upon completion 
of the procedures established in these regulations and pursuant to 5 
U.S.C. 5514, the

[[Page 255]]

Board will provide the paying agency with a certification as provided in 
Sec. 1639.24.
    (4) If the employee is in the process of separating and has not 
received a final salary check or other final payment(s) from the paying 
agency, the Board must submit a debt claim to the paying agency for 
collection under 31 U.S.C. 3716. The paying agency must certify the 
total amount of its collection on the debt and notify the employee and 
the Board. If the paying agency's collection does not fully satisfy the 
debt, and the paying agency is aware that the debtor is entitled to 
payments from the Civil Service Retirement and Disability Fund or other 
similar payments that may be due the debtor employee from other Federal 
Government sources, the paying agency will provide written notice of the 
outstanding debt to the agency responsible for making the other payments 
to the debtor employee. The written notice will state that the employee 
owes a debt, the amount of the debt, and that the provisions of this 
section have been fully complied with. The Board must submit a properly 
certified claim to the agency responsible for making the payments before 
the collection can be made.
    (5) Separated employee. If the employee is already separated and all 
payments due from his or her former paying agency have been paid, the 
Board may request, unless otherwise prohibited, that money due and 
payable to the employee from the Civil Service Retirement and Disability 
Fund (5 CFR part 831, subpart R, or 5 CFR part 845, subpart D) or other 
similar funds, be administratively offset to collect the debt.
    (6) Employee transfer. When an employee transfers from one paying 
agency to another paying agency, the Board will not repeat the due 
process procedures described in 5 U.S.C. 5514 and this subpart to resume 
the collection. The Board will submit a properly certified claim to the 
new paying agency and will subsequently review the debt to make sure the 
collection is resumed by the new paying agency.
    (b) Responsibility of the Board as the paying agency--(1) Complete 
claim. When the Board receives a certified claim from a creditor agency, 
deductions should be scheduled to begin within three officially 
established pay intervals. Before deductions can begin, the employee 
will receive a written notice from the Board including:
    (i) A statement that the Board has received a certified debt claim 
from the creditor agency;
    (ii) The amount of the debt claim;
    (iii) The date salary offset deductions will begin, and
    (iv) The amount of such deductions.
    (2) Incomplete claim. When the Board receives an incomplete 
certification of debt from a creditor agency, the Board will return the 
debt claim with a notice that procedures under 5 U.S.C. 5514 and 5 CFR 
part 550, subpart K, must be followed and a properly certified debt 
claim received before action will be taken to collect from the 
employee's current pay account.
    (3) Review. The Board is not authorized to review the merits of the 
creditor agency's determination with respect to the amount or validity 
of the debt certified by the creditor agency.
    (4) Employees who transfer from one paying agency to another. If, 
after the creditor agency has submitted the debt claim to the Board, the 
employee transfers from the Board to a different paying agency before 
the debt is collected in full, the Board will certify the total amount 
collected on the debt and notify the employee and the creditor agency in 
writing. The notification to the creditor agency will include 
information on the employee's transfer.



Sec. 1639.29  Refunds.

    (a) If the Board is the creditor agency, it will promptly refund any 
amount deducted under the authority of 5 U.S.C. 5514, when:
    (1) The debt is waived or all or part of the funds deducted are 
otherwise found not to be owed; or
    (2) An administrative or judicial order directs the Board to make a 
refund.
    (b) Unless required or permitted by law or contract, refunds under 
this section will not bear interest.

[[Page 256]]



Sec. 1639.30  Non-waiver of rights by payments.

    An employee's involuntary payment of all or any portion of a debt 
being collected under this subpart must not be construed as a waiver of 
any rights which the employee may have under 5 U.S.C. 5514 or any other 
provisions of a written contract or law, unless there are statutory or 
con tractual provisions to the contrary.



                       Subpart C_Tax Refund Offset



Sec. 1639.40  Applicability and scope.

    (a) The regulations in this subpart implement 31 U.S.C. 3720A which 
authorizes the Department of the Treasury to reduce a tax refund by the 
amount of a past-due legally enforceable debt owed to a Federal agency.
    (b) For purposes of this section, a past-due legally enforceable 
debt referable to the Department of the Treasury is a debt that is owed 
to the Board; and:
    (1) Is at least $25.00 dollars;
    (2) Except in the case of a judgment debt, has been delinquent for 
at least three months and will not have been delinquent more than 10 
years at the time the offset is made;
    (3) Cannot be currently collected under the salary offset provisions 
of 5 U.S.C. 5514;
    (4) Is ineligible for administrative offset under 31 U.S.C. 3716(a) 
by reason of 31 U.S.C. 3716(c)(2) or cannot be collected by 
administrative offset under 31 U.S.C. 3716(a) by the Board against 
amounts payable to the debtor by the Board;
    (5) With respect to which the Board has given the debtor at least 60 
days to present evidence that all or part of the debt is not past due or 
legally enforceable, has considered evidence presented by the debtor, 
and has determined that an amount of the debt is past due and legally 
enforceable;
    (6) Which has been disclosed by the Board to a credit reporting 
agency as authorized by 31 U.S.C. 3711(e), unless the credit reporting 
agency would be prohibited from reporting information concerning the 
debt by reason of 15 U.S.C. 1681c;
    (7) With respect to which the Board has notified or has made a 
reasonable attempt to notify the debtor that:
    (i) The debt is past due, and
    (ii) Unless repaid within 60 days thereafter, the debt will be 
referred to the Department of the Treasury for offset against any 
overpayment of tax; and
    (8) All other requirements of 31 U.S.C. 3720A and the Department of 
Treasury regulations relating to the eligibility of a debt for tax 
return offset have been satisfied.



Sec. 1639.41  Procedures for tax refund offset.

    (a) The Board will be the point of contact with the Department of 
the Treasury for administrative matters regarding the offset program.
    (b) The Board will ensure that the procedures prescribed by the 
Department of the Treasury are followed in developing information about 
past-due debts and submitting the debts to the IRS.
    (c) The Board will submit a notification of a taxpayer's liability 
for past-due legally enforceable debt to the Department of the Treasury 
which will contain:
    (1) The name and taxpayer identifying number (as defined in section 
6109 of the Internal Revenue Code, 26 U.S.C. 6109) of the person who is 
responsible for the debt;
    (2) The dollar amount of the past-due and legally enforceable debt;
    (3) The date on which the original debt became past due;
    (4) A statement certifying that, with respect to each debt reported, 
all of the requirements of eligibility of the debt for referral for the 
refund offset have been satisfied. See Sec. 1639.40(b).
    (d) The Board shall promptly notify the Department of the Treasury 
to correct Board data submitted when it:
    (1) Determines that an error has been made with respect to a debt 
that has been referred;
    (2) Receives or credits a payment on the debt; or
    (3) Receives notice that the person owing the debt has filed for 
bankruptcy under Title 11 of the United States Code or has been 
adjudicated bankrupt and the debt has been discharged.

[[Page 257]]

    (e) When advising debtors of an intent to refer a debt to the 
Department of the Treasury for offset, the Board will also advise the 
debtors of all remedial actions available to defer or prevent the offset 
from taking place.



Sec. 1639.42  Notice requirements before tax refund offset.

    (a) The Board must notify, or make a reasonable attempt to notify, 
the person:
    (1) The amount of the debt and that the debt is past due; and
    (2) Unless repaid within 60 days, the debt will be referred to the 
Department of the Treasury for offset against any refund of overpayment 
of tax.
    (b) The Board will provide a mailing address for forwarding any 
written correspondence and a contact name and telephone number for any 
questions concerning the offset.
    (c) The Board will give the individual debtor at least 60 days from 
the date of the notice to present evidence that all or part of the debt 
is not past due or legally enforceable. The Board will consider the 
evidence presented by the individual and will make a determination 
whether any amount of the debt is past due and legally enforceable. For 
purposes of this section, evidence that collection of the debt is 
affected by a bankruptcy proceeding involving the individual will bar 
referral of the debt to the Department of the Treasury.
    (d) Notice given to a debtor under paragraphs (a), (b), and (c) of 
this section shall advise the debtor of how he or she may present 
evidence to the Board that all or part of the debt is not past due or 
legally enforceable. Such evidence may not be referred to, or considered 
by, individuals who are not officials, employees, or agents of the 
United States in making the determination required under paragraph (c) 
of this section. Unless such evidence is directly considered by an 
official or employee of the Board, and the determination required under 
paragraph (c) of this section has been made by an official or employee 
of the Board, any unresolved dispute with the debtor regarding whether 
all or part of the debt is past due or legally enforceable must be 
referred to the Board for ultimate administrative disposition, and the 
Board must directly notify the debtor of its determination.



                     Subpart D_Administrative Offset



Sec. 1639.50  Applicability and scope.

    (a) The regulations in this subpart apply to the collection of debts 
owed to the Board, or from a request for an offset received by the Board 
from a Federal agency. Administrative offset is authorized under section 
5 of the Federal Claims Collection Act of 1966, as amended by the Debt 
Collection Act of 1982 (31 U.S.C. 3716). The regulations in this subpart 
are consistent with the Federal Claims Collection Standards on 
administrative offset issued jointly by the Department of Justice and 
the General Accounting Office as set forth in 4 CFR 102.3.
    (b) The Executive Director, after attempting to collect a debt owed 
to the Board under section 3(a) of the Federal Claims Collection Act of 
1966, as amended (31 U.S.C. 3711(a)), may collect the debt by 
administrative offset, subject to the following:
    (1) The debt is certain in amount; and
    (2) It is in the best interest of the Board to collect the debt by 
administrative offset because of the decreased costs of collection and 
acceleration in the payment of the debt.
    (c) The Executive Director may initiate administrative offset with 
regard to debts owed by a person to a Federal agency, so long as the 
funds to be offset are not payable from net assets available for Thrift 
Savings Plan benefits. The head of the creditor agency, or his or her 
designee, must submit a written request for the offset with a 
certification that the debt exists and that the person has been afforded 
the necessary due process rights.
    (d) The Executive Director may request another agency that holds 
funds payable to a Fund debtor to pay the funds to the Board in 
settlement of the debt. The Board will provide certification that:
    (1) The debt exists; and
    (2) The person has been afforded the necessary due process rights.
    (e) If the six-year period for bringing action on a debt provided in 
28 U.S.C. 2415 has expired, then administrative offset may be used to 
collect the debt

[[Page 258]]

only if the costs of bringing such an action are likely to be less than 
the amount of the debt.
    (f) No collection by administrative offset will be made on any debt 
that has been outstanding for more than 10 years unless facts material 
to the Board or a Federal agency's right to collect the debt were not 
known, and reasonably could not have been known, by the official or 
officials responsible for discovering and collecting the debt.
    (g) The regulations in this subpart do not apply to:
    (1) A case in which administrative offset of the type of debt 
involved is explicitly provided for or prohibited by another statute; or
    (2) Debts owed to the Board by Federal agencies or by any State or 
local government.



Sec. 1639.51  Notice procedures.

    Before collecting any debt through administrative offset, the Board 
will send a notice of intent to offset to the debtor by certified mail, 
return receipt requested, at the most current address that is available 
to the Board. The notice will provide:
    (a) A description of the nature and amount of the debt and the 
intention of the Board to collect the debt through administrative 
offset;
    (b) An opportunity to inspect and copy the records of the Board with 
respect to the debt;
    (c) An opportunity for review within the Board of the determination 
of the Board with respect to the debt; and
    (d) An opportunity to enter into a written agreement for repaying 
the amount of the debt.



Sec. 1639.52  Board review.

    (a) A debtor may dispute the existence of the debt, the amount of 
debt, or the terms of repayment. A request to review a disputed debt 
must be submitted to the Board official who provided the notice of 
intent to offset within 30 calendar days of the debtor's receipt of the 
written notice described in Sec. 1639.51.
    (b) If the debtor requests an opportunity to inspect or copy the 
Board's records concerning the disputed claim, the Board will grant 10 
business days for the review. The time period will be measured from the 
time the request for inspection is granted or from the time the debtor 
receives a copy of the records.
    (c) Pending the resolution of a dispute by the debtor, transactions 
in any of the debtor's account(s) maintained in the Board may be 
temporarily suspended to the extent of the debt that is owed. Depending 
on the type of transaction, the suspension could preclude its payment, 
removal, or transfer, as well as prevent the payment of interest or 
discount due on the transaction. Should the dispute be resolved in the 
debtor's favor, the suspension will be immediately lifted.
    (d) During the review period, interest, penalties, and 
administrative costs authorized by law will continue to accrue.
    (e) If the debtor does not exercise the right to request a review 
within the time specified in this section or if, as a result of the 
review, it is determined that the debt is due and no written agreement 
is executed, then administrative offset will be ordered in accordance 
with the regulations in this subpart without further notice.



Sec. 1639.53  Written agreement for repayment.

    A debtor who admits liability but elects not to have the debt 
collected by administrative offset will be afforded an opportunity to 
negotiate a written agreement for repaying the debt. If the financial 
condition of the debtor does not support the ability to pay in one lump 
sum, the Board may consider reasonable installments. No installment 
arrangement will be considered unless the debtor submits a financial 
statement, executed under penalty of perjury, reflecting the debtor's 
assets, liabilities, income, and expenses. The financial statement must 
be submitted within 10 business days of the Board's request for the 
statement. At the Board's option, a confess-judgment note or bond of 
indemnity with surety may be required for installment agreements. 
Notwithstanding the provisions of this section, any reduction or 
compromise of a claim will be governed by 31 U.S.C. 3711.

[[Page 259]]



Sec. 1639.54  Requests for offset to Federal agencies.

    The Executive Director may request that funds due and payable to a 
debtor by another Federal agency be paid to the Board in payment of a 
debt owed to the Board by that debtor. In requesting administrative 
offset, the Board, as creditor, will certify in writing to the Federal 
agency holding funds of the debtor:
    (a) That the debtor owes the debt;
    (b) The amount and basis of the debt; and
    (c) That the Board has complied with the requirements of 31 U.S.C. 
3716, its own administrative offset regulations in this subpart, and the 
applicable provisions of 4 CFR part 102 with respect to providing the 
debtor with due process.



Sec. 1639.55  Requests for offset from Federal agencies.

    Any Federal agency may request that funds due and payable to its 
debtor by the Board be administratively offset in order to collect a 
debt owed to that agency by the debtor, so long as the funds are not 
payable from net assets available for Thrift Savings Plan benefits. The 
Board will initiate the requested offset only:
    (a) Upon receipt of written certification from the creditor agency 
stating:
    (1) That the debtor owes the debt;
    (2) The amount and basis of the debt;
    (3) That the agency has prescribed regulations for the exercise of 
administrative offset; and
    (4) That the agency has complied with its own administrative offset 
regulations and with the applicable provisions of 4 CFR part 102, 
including providing any required hearing or review; and
    (b) Upon a determination by the Board that collection by offset 
against funds payable by the Board would be in the best interest of the 
United States as determined by the facts and circumstances of the 
particular case, and that such an offset would not otherwise be contrary 
to law.



Sec. 1639.56  Expedited procedure.

    The Board may effect an administrative offset against a payment to 
be made to the debtor before completion of the procedures required by 
Sec. Sec. 1639.51 and 1639.52 if failure to take the offset would 
substantially jeopardize the Board's ability to collect the debt and the 
time before the payment is to be made does not reasonably permit the 
completion of those procedures. An expedited offset will be promptly 
followed by the completion of those procedures. Amounts recovered by 
offset, but later found not to be owed to the Board, will be promptly 
refunded.



PART 1640_PERIODIC PARTICIPANT STATEMENTS--Table of Contents




Sec.
1640.1 Definitions.
1640.2 Information regarding account.
1640.3 Statement of individual account.
1640.4 Account transactions.
1640.5 TSP Fund information.
1640.6 Methods of providing information.

    Authority: 5 U.S.C. 8439(c)(1) and (c)(2), 5 U.S.C. 8474(b)(5) and 
(c)(1).

    Source: 68 FR 35501, June 13, 2003, unless otherwise noted.



Sec. 1640.1  Definitions.

    Definitions generally applicable to the Thrift Savings Plan are set 
forth at 5 CFR 1690.1.



Sec. 1640.2  Information regarding account.

    The Board will provide to each participant four (4) times each 
calendar year the information described in Sec. Sec. 1640.3, 1640.4, 
and 1640.5. Plan participants can obtain account balance information on 
a more frequent basis from the TSP Web site and the ThriftLine.



Sec. 1640.3  Statement of individual account.

    In the quarterly statements, the Board will furnish each participant 
with the following information concerning the participant's individual 
account:
    (a) Name, Social Security number, and date of birth under which the 
account is established;
    (b) Retirement system coverage and employment status of the 
participant, as provided by the employing agency;

[[Page 260]]

    (c) Statement whether the participant has a beneficiary designation 
on file with the TSP record keeper;
    (d) Contribution allocation that is current at the end of the 
statement period;
    (e) Beginning and ending dates of the period covered by the 
statement;
    (f) The following information for and, as of the close of business 
on the ending date of, the period covered by the statement:
    (1) The total account balance and tax-exempt balance, if applicable;
    (2) The account balance and activity for each source of 
contributions;
    (3) The account balance and activity in each TSP Fund, including the 
dollar amount of the transaction, the share price, and the number of 
shares; and
    (4) Loan information and activity, if applicable;
    (g) Any other information concerning the account that the Board 
determines should be included in the statement.

[68 FR 35501, June 13, 2003, as amended at 70 FR 32214, June 1, 2005]



Sec. 1640.4  Account transactions.

    (a) Where relevant, the following transactions will be reported in 
each individual account statement:
    (1) Contributions;
    (2) Withdrawals;
    (3) Forfeitures;
    (4) Loan disbursements and repayments;
    (5) Transfers among TSP Funds;
    (6) Adjustments to prior transactions;
    (7) Transfers or rollovers from traditional individual retirement 
accounts (IRAs) and eligible employer plans; and
    (8) Any other transaction that the Executive Director determines 
will affect the status of the individual account.
    (b) Where relevant, the statement will contain the following 
information concerning each transaction identified in paragraph (a) of 
this section:
    (1) Type of transaction;
    (2) TSP Funds affected;
    (3) Date the transaction was posted and, where relevant, any earlier 
dates on which the transaction should have been posted or from which the 
calculation of the amount of the transaction was derived;
    (4) Source of the contributions affected by the transaction;
    (5) Amount of the transaction (in dollars and in shares);
    (6) The share price(s) at which the transaction was posted; and
    (7) Any other information the Executive Director deems relevant.

[68 FR 35501, June 13, 2003, as amended at 70 FR 32214, June 1, 2005]



Sec. 1640.5  TSP Fund information.

    The Board will provide to each participant four (4) times each 
calendar year a statement concerning each of the TSP Funds. This 
statement will contain the following information concerning each 
investment fund:
    (a) A summary description of the type of investments made by the 
fund, written in a manner that will allow the participant to make an 
informed decision; and
    (b) The performance history of the type of investments made by the 
fund, covering the five-year period preceding the date of the 
evaluation.

[68 FR 35501, June 13, 2003, as amended at 70 FR 32214, June 1, 2005]



Sec. 1640.6  Methods of providing information.

    The TSP will furnish the information described in this part to 
participants by making it available on the TSP Web site. A participant 
can request paper copies of that information from the TSP by calling the 
ThriftLine, submitting a request through the TSP Web site, or by writing 
to the TSP record keeper.

[68 FR 74451, Dec. 23, 2003]



PART 1645_CALCULATION OF SHARE PRICES--Table of Contents




Sec.
1645.1 Definitions.
1645.2 Posting of transactions.
1645.3 Calculation of total net earnings for each TSP Fund.
1645.4 Administrative expenses attributable to each TSP Fund.
1645.5 Calculation of share prices.
1645.6 Basis for calculation of share prices.

    Authority: 5 U.S.C. 8439(a)(3) and 8474.

    Source: 68 FR 35502, June 13, 2003, unless otherwise noted.

[[Page 261]]



Sec. 1645.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this part:
    Accrued means that income is accounted for when earned and expenses 
are accounted for when incurred.
    Administrative expenses means expenses described in 5 U.S.C. 
8437(c)(3).
    Basis means the number of shares of an investment fund upon which 
the calculation of a share price is based.
    Business day means any calendar day for which share prices are 
calculated.
    Forfeitures means amounts forfeited to the TSP pursuant to 5 U.S.C. 
8432(g)(2) and other non-statutory forfeited amounts, net of restored 
forfeited amounts.



Sec. 1645.2  Posting of transactions.

    Contributions, loan payments, loan disbursements, withdrawals, 
interfund transfers, and other transactions will be posted in dollars 
and in shares by source and by TSP Fund to the appropriate individual 
account by the TSP record keeper, using the share price for the date the 
transaction is posted.

[70 FR 32214, June 1, 2005]



Sec. 1645.3  Calculation of total net earnings for each TSP Fund.

    (a) Each business day, net earnings will be calculated separately 
for each TSP Fund.
    (b) Net earnings for each fund will equal:
    (1) The sum of the following items, if any, accrued since the last 
business day:
    (i) Interest on money of that fund which is invested in the 
Government Securities Investment Fund;
    (ii) Interest on other short-term investments of the fund;
    (iii) Other income (such as dividends, interest, or securities 
lending income) on investments of the fund; and
    (iv) Capital gains or losses on investments of the fund, net of 
transaction costs.
    (2) Minus the accrued administrative expenses of the fund, 
determined in accordance with Sec. 1645.4.
    (c) The net earnings for each TSP fund determined in accordance with 
paragraph (b) of this section will be added to the residual net earnings 
for that fund from the previous business day, as described in Sec. 
1645.5(b), to produce the total net earnings. The total net earnings 
will be used to calculate the share price for that business day.

[70 FR 32214, June 1, 2005]



Sec. 1645.4  Administrative expenses attributable to each TSP Fund.

    A portion of the administrative expenses accrued during each 
business day will be charged to each TSP Fund. A fund's respective 
portion of administrative expenses will be determined as follows:
    (a) Accrued administrative expenses (other than those described in 
paragraph (b) of this section) will be reduced by accrued forfeitures 
and accrued earnings on forfeitures, abandoned accounts, and unapplied 
deposits;
    (b) Investment management fees and other accrued administrative 
expenses attributable only to a particular fund will be charged solely 
to that fund.
    (c) The amount of accrued administrative expenses not covered by 
forfeitures under paragraph (a) of this section, and not described in 
paragraph (b) of this section, will be charged on a pro rata basis to 
all TSP Funds, based on the respective fund balances on the last 
business day of the prior month end.

[70 FR 32214, June 1, 2005]



Sec. 1645.5  Calculation of share prices.

    (a) Calculation of share price. The share price for each TSP Fund 
for each business day will apply to all sources of contributions for 
that fund. The total net earnings (as computed under Sec. 1645.3) for 
each fund will be divided by the total fund basis (as computed under 
Sec. 1645.6) for that fund. The resulting number, computed to ten 
decimal places, represents the incremental change in the value of that 
fund from the last business day to the current business day. The share 
price for that fund for the current business day is the sum of the 
incremental change in the share price for the current business day

[[Page 262]]

plus the share price for the prior business day, truncated to two 
decimal places.
    (b) Residual net earnings. When the total net earnings for each 
business day for each TSP Fund are divided by the total fund basis in 
that fund, there will be residual net earnings attributable to the 
truncation described in paragraph (a) of this section which will not be 
included in the incremental change in the share price of the fund for 
that business day. The residual net earnings that are not included in 
the incremental share price for the fund may be added to the earnings 
for that fund on the next business day.

[70 FR 32214, June 1, 2005]



Sec. 1645.6  Basis for calculation of share prices.

    The total fund basis for a TSP Fund will be the sum of the number of 
shares in all individual accounts from all sources of contributions in 
that fund as of the opening of business on each business day.

[70 FR 32215, June 1, 2005]



PART 1650_METHODS OF WITHDRAWING FUNDS FROM THE THRIFT SAVINGS PLAN--Table of Contents




                            Subpart A_General

Sec.
1650.1 Definitions.
1650.2 Eligibility for a TSP withdrawal.
1650.3 Frozen accounts.
1650.4 Certification of truthfulness.
1650.5 Returned funds
1650.6 Deceased participant.

                  Subpart B_Post-Employment Withdrawals

1650.11 Withdrawal elections.
1650.12 Single payment.
1650.13 Monthly payments.
1650.14 Annuities.
1650.15 Abandonment of inactive accounts.
1650.16 Required withdrawal date.
1650.17 Changes and cancellation of a withdrawal request.

          Subpart C_Procedures for Post-Employment Withdrawals

1650.21 Information provided by employing agency.
1650.22 Accounts of $200 or more.
1650.23 Accounts of less than $200.
1650.24 How to obtain a post-employment withdrawal.
1650.25 [Reserved]

                    Subpart D_In-Service Withdrawals

1650.31 Age-based withdrawals.
1650.32 Financial hardship withdrawals.
1650.33 Contributing to the TSP after an in-service withdrawal.
1650.34 Uniqueness of loans and withdrawals.

             Subpart E_Procedures for In-Service Withdrawals

1650.41 How to obtain an age-based withdrawal.
1650.42 How to obtain a financial hardship withdrawal.
1650.43 [Reserved]

Subpart F [Reserved]

                        Subpart G_Spousal Rights

1650.61 Spousal rights applicable to post-employment withdrawals.
1650.62 Spousal rights applicable to in-service withdrawals.
1650.63 Executive Director's exception to the spousal notification 
          requirement.
1650.64 Executive Director's exception to the spousal consent 
          requirement.

    Authority: 5 U.S.C. 8351, 8433, 8434, 8435, 8474(b)(5), and 
8474(c)(1).

    Source: 68 FR 35503, June 13, 2003, unless otherwise noted.



                            Subpart A_General



Sec. 1650.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this part:
    In-service withdrawal means an age-based or financial hardship 
withdrawal from the TSP that may be available to a participant who has 
not yet separated from Government service.
    Post-employment withdrawal means a withdrawal from the TSP that is 
available to a participant who is separated from Government service.

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



Sec. 1650.2  Eligibility for a TSP withdrawal.

    (a) A participant who is separated from Government service can elect 
to

[[Page 263]]

withdraw a portion of his or her account balance in a single payment, or 
the entire account balance by one or a combination of the withdrawal 
methods described in subpart B of this part.
    (b) A post-employment withdrawal will not be paid unless TSP records 
indicate that the participant is separated from Government service. The 
TSP will cancel a post-employment withdrawal election upon receiving 
information from an employing agency that a participant is no longer 
separated.
    (c) A participant cannot make a post-employment withdrawal until any 
outstanding TSP loan has either been repaid in full or declared to be a 
taxable distribution. An outstanding TSP loan will not affect a 
participant's eligibility for an in-service withdrawal.
    (d) A separated participant who is reemployed in a position in which 
he or she is eligible to participate in the TSP is subject to the 
following rules:
    (1) A participant who is reemployed in a TSP-eligible position on or 
before the 31st full calendar day after separation is not eligible to 
withdraw his or her TSP account in accordance with subpart B of this 
part.
    (2) A participant who is reemployed in a TSP-eligible position more 
than 31 full calendar days after separation and who made a post-
employment withdrawal while separated may not withdraw any remaining 
portion of his or her account balance in accordance with subpart B of 
this part until he or she again separates from Government service.
    (e) A participant who has not separated from Government service may 
be eligible to withdraw all or a portion of his or her account in 
accordance with subparts D and E of this part.
    (f) A participant can elect to have any portion of a single or 
monthly payment that is not transferred to an eligible employer plan or 
traditional IRA deposited directly, by electronic funds transfer, into a 
savings or checking account at a financial institution in the United 
States.
    (g) If a participant has a civilian TSP account and a uniformed 
services TSP account, the rules in this part apply to each account 
separately. For example, the participant is eligible to make one age-
based in-service withdrawal from each account.



Sec. 1650.3  Frozen accounts.

    (a) All withdrawals from the TSP are subject to the rules relating 
to spousal rights (found in subpart G of this part) and to domestic 
relations orders, alimony and child support legal process, and child 
abuse enforcement orders (found in 5 CFR part 1653).
    (b) A participant may not withdraw any portion of his or her account 
balance if the account is frozen due to a pending retirement benefits 
court order, an alimony or child support enforcement order, or a child 
abuse enforcement order, or because a freeze has been placed on the 
account by the TSP for another reason.



Sec. 1650.4  Certification of truthfulness.

    By signing a TSP withdrawal form, electronically or on paper, the 
participant certifies, under penalty of perjury, that all information 
provided to the TSP during the withdrawal process is true and complete, 
including statements concerning the participant's marital status and, 
where applicable, the spouse's address at the time the application is 
filed or the current spouse's consent to the withdrawal.

[70 FR 32215, June 1, 2005]



Sec. 1650.5  Returned funds.

    If a withdrawal is returned as undeliverable, the TSP record keeper 
will attempt to locate the participant. If the participant does not 
respond within 60 days, the TSP will forfeit the returned funds to the 
Plan. The participant can claim the forfeited funds, although they will 
not be credited with TSP investment fund returns.



Sec. 1650.6  Deceased participant.

    (a) The TSP will cancel a pending withdrawal request if it processes 
a written notice that a participant is deceased. The TSP will also 
cancel an annuity purchase made on or after the participant's date of 
death but before annuity payments have begun, and the annuity vendor 
will return the funds to the TSP.
    (b) If the TSP processes a withdrawal request before being notified 
that a

[[Page 264]]

participant is deceased, the funds cannot be returned to the TSP.

[70 FR 32215, June 1, 2005]



                  Subpart B_Post-Employment Withdrawals



Sec. 1650.11  Withdrawal elections.

    (a) Subject to the restrictions in this subpart, participants may 
elect to withdraw all or a portion of their TSP accounts in a single 
payment, a series of monthly payments, a life annuity, or any 
combination of these options.
    (b) If a participant's account balance is less than $5.00 when he or 
she separates from Government service, the balance will automatically be 
forfeited to the TSP. The participant can reclaim the money by writing 
to the TSP record keeper and requesting the amount that was forfeited; 
however, TSP investment earnings will not be credited to the account 
after the date of the forfeiture.
    (c) If a participant's vested account balance is less than $200 when 
he or she separates from Federal service, the TSP will automatically pay 
the balance to the participant at his or her TSP address of record. The 
participant will not be eligible for any other payment option or be 
allowed to remain in the TSP.

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



Sec. 1650.12  Single payment.

    (a) Partial withdrawal. A participant can elect to withdraw a 
portion of his or her account balance in a single payment and leave the 
rest in the TSP until a later date, subject to Sec. 1650.16 and the 
following requirements:
    (1) The participant is eligible for a partial withdrawal only if he 
or she did not make an age-based in-service withdrawal from that 
account.
    (2) The participant may not elect a partial withdrawal of less than 
$1,000.
    (3) Only one partial withdrawal from that account is permitted.
    (b) Full withdrawal. A participant can elect to withdraw his or her 
entire account balance in a single payment.



Sec. 1650.13  Monthly payments.

    (a) A participant electing a full post-employment withdrawal (i.e., 
a withdrawal of his or her entire account) can elect to withdraw all or 
a portion of the account balance in a series of substantially equal 
monthly payments, to be paid in one of the following manners:
    (1) A specific dollar amount. The amount elected must be at least 
$25 per month; if the amount elected is less than $25 per month, the 
request will be rejected. Payments will be made in the amount requested 
each month until the account balance is expended.
    (2) A monthly payment amount calculated based on life expectancy. 
Payments based on life expectancy are determined using the factors set 
forth in the Internal Revenue Service life expectancy tables codified at 
26 CFR 1.401(a)(9)-9, Q&A 1 and 2. The monthly payment amount is 
calculated by dividing the account balance by the factor from the IRS 
life expectancy tables based upon the participant's age as of his or her 
birthday in the year payments are to begin. This amount is then divided 
by 12 to yield the monthly payment amount. In subsequent years, the 
monthly payment amount is recalculated each January by dividing the 
prior December 31 account balance by the factor in the IRS life 
expectancy tables based upon the participant's age as of his or her 
birthday in the year payments will be made. There is no minimum amount 
for a monthly payment calculated based on this method.
    (b) A participant receiving monthly payments calculated based upon 
life expectancy can make one election, during a period to be determined 
by the Executive Director, to change to a fixed monthly payment. A 
participant can change the amount of his or her fixed payments annually. 
A participant who is receiving monthly payments based on a fixed dollar 
amount, however, cannot elect to change to an amount calculated based on 
life expectancy.
    (c) A participant receiving monthly payments, regardless of the 
calculation method, can elect at any time to receive the remainder of 
his or her account balance in a final single payment.

[[Page 265]]

    (d) The TSP will ensure that the annual total monthly payments 
satisfy any applicable minimum distribution requirement of the Internal 
Revenue Code by making a supplemental payment no later than the last 
date required by the Internal Revenue Service.
    (e) A participant receiving monthly payments may change the 
investment of his or her account balance among the TSP investment funds 
as provided in 5 CFR part 1601.
    (f) Participants who elect to withdraw their account balances in a 
series of monthly payments cannot transfer or roll over money from a 
traditional IRA or eligible employer plan into their TSP accounts. 
Participants who have both a civilian TSP account and a uniformed 
services TSP account cannot combine the two accounts if they are already 
receiving monthly payments from one of the accounts.



Sec. 1650.14  Annuities.

    (a) A participant electing a full post-employment withdrawal can use 
all or a portion of his or her account balance to purchase a life 
annuity. The portion of the participant's account balance elected and 
available for the annuity purchase must be at least $3,500. The TSP will 
purchase the annuity from the TSP's annuity vendor using the 
participant's entire account balance or the portion specified, unless an 
amount must be paid directly to the participant to satisfy any 
applicable minimum distribution requirement of the Internal Revenue 
Code. In the event that a minimum distribution is required before the 
date of the first annuity payment, the TSP will compute that amount and 
pay it directly to the participant.
    (b) An annuity will provide a payment for life to the participant 
and, if applicable, to the participant's survivor, in accordance with 
the type of annuity chosen. The TSP annuity vendor will make the first 
annuity payment approximately 30 days after the TSP purchases the 
annuity.
    (c) The amount of an annuity payment will depend on the type of 
annuity chosen, the participant's age when the annuity is purchased (and 
the age of the joint annuitant, if applicable), the amount used to 
purchase the annuity, and the interest rate available when the annuity 
is purchased.
    (d) Participants may choose among the following types of annuities:
    (1) A single life annuity with level payments. This annuity provides 
monthly payments to the participant as long as the participant lives. 
The amount of the monthly payment remains constant.
    (2) A joint life annuity for the participant and spouse with level 
payments. This annuity provides monthly payments to the participant, as 
long as both the participant and spouse are alive, and monthly payments 
to the survivor, as long as the survivor is alive. The amount of the 
monthly payment remains constant, although the amount received will 
depend on the type of survivor benefit elected.
    (3) A joint life annuity for the participant and another person with 
level payments. This annuity provides monthly payments to the 
participant as long as both the participant and the joint annuitant are 
alive, and monthly payments to the survivor as long as the survivor is 
alive. The amount of the monthly payment remains constant. The joint 
annuitant must be either a former spouse or a person who has an 
insurable interest in the participant.
    (i) A person has an ``insurable interest in the participant'' if the 
person is financially dependent on the participant and could reasonably 
expect to derive financial benefit from the participant's continued 
life.
    (ii) A relative (either blood or adopted, but not by marriage) who 
is closer than a first cousin is presumed to have an insurable interest 
in the participant.
    (iii) A participant can establish that a person not described in 
paragraph (d)(3)(ii) of this section has an insurable interest in him or 
her by submitting, with the annuity request, an affidavit from a person 
other than the participant or the joint annuitant that demonstrates that 
the designated joint annuitant has an insurable interest in the 
participant (as described in paragraph (d)(3)(i) of this section).
    (4) Either a single life or joint (with spouse) life annuity with 
increasing payments. This annuity provides monthly

[[Page 266]]

payments to the participant only, or to the participant and spouse, as 
applicable. The monthly payments are adjusted once each year on the 
anniversary of the first payment, based on the Federal Bureau of Labor 
Statistics Consumer Price Index for Urban Wage Earners and Clerical 
Workers (CPI-W). Each year, the percentage change in the monthly 
unadjusted CPI-W index for July, August, and September over the monthly 
unadjusted CPI-W index for July, August, and September of the prior year 
is calculated. The following calendar year, the amount of the monthly 
payment is adjusted by the lesser of 3 percent or the percentage 
increase in the CPI-W, if any. In no case will the amount of the monthly 
payment be decreased based on the CPI-W. If the participant chooses a 
joint life annuity, the annual increase also applies to benefits 
received by the survivor.
    (e) A participant who chooses a joint life annuity (with a spouse, a 
former spouse, or a person with an insurable interest) must choose 
either a 50 percent or a 100 percent survivor benefit. The survivor 
benefit applies when either the participant or the joint annuitant dies.
    (1) A 50 percent survivor benefit provides a monthly payment to the 
survivor which is 50 percent of the amount of the payment that is made 
when both the participant and the joint annuitant are alive.
    (2) A 100 percent survivor benefit provides a monthly payment to the 
survivor, which is equal to the amount of the payment that is made when 
both the participant and the joint annuitant are alive.
    (3) Either the 50 percent or the 100 percent survivor benefit may be 
combined with any joint life annuity option. However, the 100 percent 
survivor benefit can only be combined with a joint annuity with a person 
other than the spouse (or a former spouse, if required by a retirement 
benefits court order) if the joint annuitant is not more than 10 years 
younger than the participant.
    (f) The following features are mutually exclusive, but can be 
combined with certain types of annuities, as indicated:
    (1) Cash refund. This feature provides that, if the participant (and 
joint annuitant, where applicable) dies before an amount equal to the 
balance used to purchase the annuity has been paid out, the difference 
between the balance used to purchase the annuity and the sum of monthly 
payments already made will be paid to the beneficiary(ies) designated by 
the participant (or by the joint annuitant, where applicable). This 
feature can be combined with any type of annuity.
    (2) Ten-year certain. This feature provides that, if the participant 
dies before annuity payments have been made for 10 years (120 payments), 
monthly payments will be made to the beneficiary(ies) until 120 payments 
have been made. This feature can be combined with any single life 
annuity, but cannot be combined with a joint life annuity.
    (g) Once an annuity has been purchased, the type of annuity, the 
annuity features, and the identity of the joint annuitant cannot be 
changed, and the annuity cannot be terminated.



Sec. 1650.15  Abandonment of inactive accounts.

    A separated participant must select a full withdrawal option by the 
time he or she reaches age 70\1/2\. If the participant does not do so 
and the TSP is unable to locate the participant, the inactive account 
will be declared abandoned in accordance with Sec. 1650.16.



Sec. 1650.16  Required withdrawal date.

    (a) A participant must withdraw his or her account under Sec. 
1650.12, or begin receiving payments under Sec. Sec. 1650.13 or 
1650.14, by April 1 of the year following the year in which the 
participant reaches 70\1/2\ years of age or separates from Government 
service, whichever is later.
    (b) For account balances of $200 or more, a separated participant 
may elect to withdraw his or her account or to begin receiving payments 
before the date described in paragraph (a) of this section, but is not 
required to do so.
    (c) In the event that a participant does not withdraw his or her 
account or begin receiving payments in accordance with paragraph (a) of 
this section, the Board will transfer all of the funds

[[Page 267]]

in the participant's account not already invested in the Government 
Securities Investment (G) Fund to that fund. A notice of this action 
will be sent to the participant with a warning that his or her account 
will be declared abandoned and forfeited unless the participant comes 
into compliance with paragraph (a) by a date certain specified in the 
notice.
    (d) If the participant does not take the appropriate withdrawal 
action described in paragraph (c) of this section, the Board will 
purchase an annuity for the participant after the following steps have 
been taken:
    (1) The account has been declared abandoned and the funds in the 
account have been forfeited;
    (2) A notice of this action has been sent to the participant;
    (3) The participant reclaims the account balance that was abandoned, 
but decides against a withdrawal pursuant to Sec. Sec. 1650.12 or 
1650.13; and
    (4) The participant provides the information that the Board needs to 
purchase an annuity pursuant to Sec. 1650.14.



Sec. 1650.17  Changes and cancellation of a withdrawal request.

    (a) Before processing. A pending withdrawal request can be cancelled 
if the cancellation is processed before the TSP processes the withdrawal 
request. However, the TSP processes withdrawal requests each business 
day and those that are entered into the record keeping system by 12:00 
noon eastern time will ordinarily be processed that night; those entered 
after 12:00 noon eastern time will be processed the next business day. 
Consequently, a cancellation request must be received and entered into 
the system before the cut-off for the day the withdrawal request is 
submitted for processing in order to be effective to cancel the 
withdrawal.
    (b) After processing. A withdrawal election cannot be changed or 
cancelled after the withdrawal request has been processed. Consequently, 
funds disbursed cannot be returned to the TSP record keeper.
    (c) Change in monthly payments. If a participant is receiving a 
series of monthly payments, the participant can change at any time: His 
or her withdrawal election to request a final single payment, the 
address to which the payments are mailed, whether or not a payment will 
be transferred (if permitted) and the portion to be transferred, the 
method by which direct payments to the participant are being sent (EFT 
or check), the identity of the financial institution to which payments 
are transferred or sent by EFT, or the identity of the EFT account. Once 
a year, during a period determined by the Executive Director, the 
participant may also elect to change the payment amount or to change 
from a monthly payment based on life expectancy to a fixed payment 
amount.

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



          Subpart C_Procedures for Post-Employment Withdrawals



Sec. 1650.21  Information provided by employing agency.

    (a) Information to be provided to the TSP. When a TSP participant 
separates from Government service, his or her employing agency must 
report the separation and the date of separation to the TSP record 
keeper. Until the TSP record keeper receives this information from the 
employing agency, it will not pay a post-employment withdrawal.
    (b) Information to be provided to the participant. When a TSP 
participant separates from Government service, his or her employing 
agency must furnish the participant with information regarding the 
participant's withdrawal options (e.g., the withdrawal booklet and 
information about the TSP Web site). The employing agency is also 
responsible for counseling participants concerning TSP withdrawal 
options.



Sec. 1650.22  Accounts of $200 or more.

    A participant whose account balance is $200 or more must submit a 
properly completed withdrawal election to request a post-employment 
withdrawal of his or her account balance.



Sec. 1650.23  Accounts of less than $200.

    Upon receiving information from the employing agency that a 
participant has been separated for more than 31 days and that any 
outstanding loans

[[Page 268]]

have been closed, the TSP record keeper will send the participant a 
check for the entire amount of his or her account balance if the account 
balance is $5.00 or more but less than $200. The participant may not 
elect to leave this amount in the TSP, nor will the TSP transfer this 
amount to an eligible employer plan or traditional IRA, or pay it by 
EFT. However, the participant may elect to roll over this payment into 
an eligible employer plan or traditional IRA.



Sec. 1650.24  How to obtain a post-employment withdrawal.

    To request a post-employment withdrawal, a participant must submit 
to the TSP record keeper a properly completed paper TSP post-employment 
withdrawal request form or use the TSP Web site to initiate a request. 
(A participant's ability to complete a post-employment withdrawal on the 
Web will depend on his or her retirement system coverage, withdrawal 
election, account balance, marital status, and whether or not the 
withdrawal will be transferred to an eligible employer plan or 
traditional IRA.)

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



Sec. 1650.25  [Reserved]



                    Subpart D_In-Service Withdrawals



Sec. 1650.31  Age-based withdrawals.

    (a) A participant who has reached age 59\1/2\ and who has not 
separated from Government employment is eligible to withdraw all or a 
portion of his or her vested TSP account balance in a single payment. 
The amount of an age-based withdrawal request must be at least $1,000, 
unless the withdrawal request is for the entire vested account balance.
    (b) An age-based withdrawal is an eligible rollover distribution, so 
a participant may request that the TSP transfer all or a portion of the 
withdrawal to a tradition IRA or an eligible employer plan.
    (c) A participant is permitted only one age-based withdrawal for an 
account.
    (d) A participant who makes an age-based withdrawal is not eligible 
to make a partial withdrawal after separating from Government service.



Sec. 1650.32  Financial hardship withdrawals.

    (a) A participant who has not separated from Government employment 
and who can certify that he or she has a financial hardship is eligible 
to withdraw all or a portion of his or her own contributions to the TSP 
(and their attributable earnings) in a single payment to meet certain 
specified financial obligations. The amount of a financial hardship 
withdrawal request must be at least $1,000.
    (b) To be eligible for a financial hardship withdrawal, a 
participant must have a financial need that results from at least one of 
the following four conditions:
    (1) The participant's monthly cash flow is negative (i.e., the 
participant's income is less than his or her monthly expenses on a 
recurring basis);
    (2) The participant has incurred medical expenses as a result of a 
medical condition, illness, or injury to the participant, the 
participant's spouse, or the participant's dependents. Generally, 
eligible expenses are those that would be eligible for deduction as 
medical expenses for Federal income tax purposes. Eligible medical 
expenses include the cost of household improvements required as a result 
of a medical condition, illness or injury. Household improvements are 
structural improvements to the participant's living quarters or the 
installation of special equipment that is necessary to accommodate the 
circumstances of the incapacitated person.
    (3) The participant must have paid the cost of repair or replacement 
resulting from a personal casualty loss that would be eligible for 
deduction for Federal income tax purposes, but without regard to the IRS 
income limitations on deductibility, fair market value of the property, 
or number of events. Personal casualty loss includes damage, 
destruction, or loss of property resulting from a sudden, unexpected, or 
unusual event, such as an earthquake, hurricane, tornado, flood, storm, 
fire, or theft.

[[Page 269]]

    (4) The participant must have paid attorney fees and court costs 
associated with separation or divorce. Court-ordered payments to a 
spouse or former spouse and child support payments are not allowed, nor 
are costs of obtaining prepaid legal services or other coverage for 
legal services.
    (c) When determining financial hardship needs, a participant cannot 
use any expenses that are already paid or are reimbursable to the 
participant by insurance or otherwise.
    (d) The amount of a participant's financial hardship withdrawal 
cannot exceed the smallest of the following:
    (1) The amount requested; or
    (2) The amount in the participant's account that is equal to his or 
her own contributions and attributable earnings.
    (e) The participant must certify that he or he has a financial 
hardship as described on the hardship withdrawal form, and that the 
dollar amount of the withdrawal request does not exceed the actual 
amount of the financial hardship.
    (f) A participant is not eligible for an in-service hardship 
withdrawal based solely on monthly negative cash flow (as described in 
paragraph (b)(1) of this section) during the time he or she has pending 
a petition in bankruptcy under Chapter 13 of the Bankruptcy Code (11 
U.S.C. chapter 13).

[68 FR 35503, June 13, 2003, as amended at 68 FR 74451, Dec. 23, 2003]



Sec. 1650.33  Contributing to the TSP after an in-service withdrawal.

    (a) A participant's TSP contribution election will not be affected 
by an age-based in-service withdrawal; therefore, his or her TSP 
contributions will continue without interruption.
    (b) A participant who obtains a financial hardship in-service 
withdrawal may not contribute to the TSP for a period of six months 
after the withdrawal is processed. Therefore, the participant's 
employing agency will discontinue his or her contributions (and any 
applicable agency matching contributions) for six months after the 
agency is notified by the TSP; in the case of a FERS participant, agency 
automatic (1%) contributions will continue. A participant whose TSP 
contributions are discontinued by his or her agency after a financial 
hardship withdrawal can resume contributions any time after expiration 
of the six-month period by submitting a new TSP contribution election. 
Contributions will not resume automatically.



Sec. 1650.34  Uniqueness of loans and withdrawals.

    An outstanding TSP loan cannot be converted into an in-service 
withdrawal or vice versa. Funds distributed as an in-service withdrawal 
cannot be returned or repaid.



             Subpart E_Procedures for In-Service Withdrawals



Sec. 1650.41  How to obtain an age-based withdrawal.

    To request an age-based withdrawal, a participant must submit to the 
TSP record keeper a properly completed paper TSP age-based withdrawal 
request form or use the TSP Web site to initiate a request. A 
participant's ability to complete an age-based withdrawal on the Web 
will depend on his or her retirement system coverage, marital status, 
and whether or not part or all of the withdrawal will be transferred to 
an eligible employer plan or traditional IRA.

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



Sec. 1650.42  How to obtain a financial hardship withdrawal.

    (a) To request a financial hardship withdrawal, a participant must 
submit to the TSP record keeper a properly completed paper TSP hardship 
withdrawal request form or use the TSP Web site to initiate a request. A 
participant's ability to complete a financial hardship withdrawal on the 
Web will depend on his or her retirement system coverage and marital 
status.
    (b) There is no limit on the number of financial hardship 
withdrawals a participant can make; however, the TSP will not accept a 
financial hardship withdrawal request for a period of six months after a 
financial hardship disbursement is made.

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]

[[Page 270]]



Sec. 1650.43  [Reserved]

Subpart F [Reserved]



                        Subpart G_Spousal Rights



Sec. 1650.61  Spousal rights applicable to post-employment withdrawals.

    (a) The spousal rights described in this section apply to full post-
employment withdrawals when the married participant's vested TSP account 
balance exceeds $3,500, and to partial post-employment withdrawals 
without regard to the amount of the participant's account balance.
    (b) The spouse of a CSRS participant is entitled to notice when the 
participant applies for a post-employment withdrawal, unless the 
participant was granted an exception under this subpart to the spousal 
notification requirement within 90 days of the date the withdrawal 
request is processed by the TSP. The participant must provide the TSP 
record keeper with the spouse's correct address. The TSP record keeper 
will send the required notice by first class mail to the spouse at the 
most recent address provided by the participant.
    (c) The spouse of a FERS or uniformed services participant has a 
right to a joint and survivor annuity with a 50 percent survivor 
benefit, level payments, and no cash refund based on the participant's 
entire account balance when the participant elects a full post-
employment withdrawal. The participant may make a different withdrawal 
election only if his or her spouse waives the right to this annuity.
    (1) To show that the spouse has waived the right to this annuity, 
the participant must submit to the TSP record keeper a properly 
completed withdrawal request form, signed by his or her spouse in the 
presence of a notary, unless the TSP granted the participant an 
exception under this subpart to the spousal notification requirement 
within 90 days of the date the withdrawal form is processed by the TSP. 
If the TSP granted the participant an exception to the signature 
requirement, the participant should enclose a copy of the TSP's approval 
letter with the withdrawal form.
    (2) Because a partial post-employment withdrawal will diminish the 
amount in the account which is available for a joint and survivor 
annuity, a spouse's consent is required before a partial withdrawal will 
be approved, regardless of the amount to be withdrawn.
    (3) Both a spouse's waiver of a joint and survivor annuity and a 
spouse's consent to a partial withdrawal must be properly notarized.
    (4) The spouse's waiver or consent is irrevocable for that 
withdrawal once the TSP record keeper has received it.

[68 FR 35503, June 13, 2003, as amended at 69 FR 29851, May 26, 2004]



Sec. 1650.62  Spousal rights applicable to in-service withdrawals.

    (a) The spousal rights described in this section apply to all in-
service withdrawals and do not depend on the amount of the participant's 
vested account balance or the amount requested for withdrawal.
    (b) The spouse of a CSRS participant is entitled to notice when the 
participant applies for an in-service withdrawal, unless the participant 
was granted an exception under this subpart to the spousal notification 
requirement within 90 days of the date on which the withdrawal request 
is processed by the TSP. If the TSP granted the participant an exception 
to the notice requirement, the participant should enclose a copy of the 
TSP's approval letter with the withdrawal form. The participant must 
provide the TSP record keeper with the spouse's correct address. The TSP 
record keeper will send the required notice by first class mail to the 
spouse at the most recent address provided by the participant.
    (c) A participant who is covered by FERS or who is a member of the 
uniformed services must obtain the consent of his or her spouse before 
obtaining an in-service withdrawal, unless the participant was granted 
an exception under this subpart to the signature requirement within 90 
days of the date the withdrawal form is processed by the TSP. To show 
the spouse's consent, a participant must submit to the TSP record keeper 
a properly completed withdrawal request form, signed by his or her 
spouse in the presence of

[[Page 271]]

a notary. Once a form containing the spouse's consent has been submitted 
to the TSP record keeper, the spouse's consent is irrevocable for that 
withdrawal.

[68 FR 35503, June 13, 2003, as amended at 69 FR 29851, May 26, 2004]



Sec. 1650.63  Executive Director's exception to the spousal notification 

requirement.

    (a) Whenever this subpart requires the Executive Director to give 
notice of an action to the spouse of a CSRS participant, an exception to 
this requirement may be granted if the participant establishes to the 
satisfaction of the Executive Director that the spouse's whereabouts 
cannot be determined. A request for such an exception must be submitted 
to the TSP record keeper on the appropriate TSP paper form, accompanied 
by the following:
    (1) A court order stating that the spouse's whereabouts cannot be 
determined;
    (2) A police or governmental agency determination, signed by the 
appropriate department or division head, which states that the spouse's 
whereabouts cannot be determined; or
    (3) Statements by the participant and two other persons, which meet 
the following requirements:
    (i) The participant's statement must give the full name of the 
spouse, declare the participant's inability to locate the spouse, state 
the last time the spouse's location was known, explain why the spouse's 
location is not known currently, and describe the good faith efforts the 
participant has made to locate the spouse in the 90 days before the 
request for an exception was received by the TSP. Examples of attempting 
to locate the spouse include, but are not limited to, checking with 
relatives and mutual friends or using telephone directories and 
directory assistance for the city of the spouse's last known address. 
Negative statements, such as, ``I have not seen nor heard from him,'' or 
``I have not had contact with her,'' are not sufficient.
    (ii) The statements from two other persons must support the 
participant's statement that he or she does not know the spouse's 
whereabouts, and substantiate the participant's description of the 
efforts he or she made to locate the spouse, including the dates the 
participant made those efforts.
    (iii) All statements must be signed and dated and must include the 
following certification: ``I understand that a false statement or 
willful misrepresentation is punishable under Federal law (18 U.S.C. 
1001) by a fine or imprisonment or both.''.
    (b) A withdrawal election will be processed within 90 days of an 
approved exception so long as the spouse named on the form is the spouse 
for whom the exception has been approved. The spouse's SSN must be 
included on the withdrawal request.
    (c) The TSP, in its discretion, may require a participant to provide 
additional information before granting a waiver. The TSP may use any of 
the information provided to conduct its own search for the spouse.

[68 FR 35503, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



Sec. 1650.64  Executive Director's exception to the spousal consent 

requirement.

    (a) Whenever this subpart requires the consent of a spouse of a FERS 
or uniformed services participant to a loan or withdrawal or a waiver of 
the right to a survivor annuity, an exception to this requirement may be 
granted if the participant establishes to the satisfaction of the 
Executive Director that:
    (1) The spouse's whereabouts cannot be determined in accordance with 
the provisions of this subpart; or
    (2) Due to exceptional circumstances, requiring the spouse's 
signature would be inappropriate.
    (i) An exception to the requirement for a spouse's signature may be 
granted based on exceptional circumstances only when the participant 
presents a court order or government agency determination that contains 
a finding or a recitation of exceptional circumstances regarding the 
spouse which would warrant an exception to the signature requirement.
    (ii) Exceptional circumstances are narrowly construed, but are 
exemplified by a court order or government agency determination that:

[[Page 272]]

    (A) Indicates that the spouse and the participant have been 
maintaining separate residences with no financial relationship for three 
or more years;
    (B) Indicates that the spouse abandoned the participant, but for 
religious or similarly compelling reasons, the parties chose not to 
divorce; or
    (C) Expressly states that the participant may obtain a loan from his 
or her TSP account or withdraw his or her Thrift Savings Plan account 
balance notwithstanding the absence of the spouse's signature.
    (b) A post-employment withdrawal election or an in-service 
withdrawal request processed within 90 days of an approved exception 
will be accepted by the TSP so long as the spouse named on the form is 
the spouse for whom the exception has been approved. The spouse's SSN 
must be included on the withdrawal request form.

[68 FR 35503, June 13, 2003, as amended at 69 FR 29851, May 26, 2004]



PART 1651_DEATH BENEFITS--Table of Contents




Sec.
1651.1 Definitions.
1651.2 Entitlement to funds in a deceased participant's account.
1651.3 Designation of beneficiary.
1651.4 How to change or cancel a designation of beneficiary.
1651.5 Spouse of participant.
1651.6 Child or children.
1651.7 Parent or parents.
1651.8 Participant's estate.
1651.9 Participant's next of kin.
1651.10 Deceased and non-existent beneficiaries.
1651.11 Simultaneous death.
1651.12 Homicide.
1651.13 How to apply for a death benefit.
1651.14 How payment is made.
1651.15 Claims referred to the Board.
1651.16 Missing and unknown beneficiaries.
1651.17 Disclaimer of benefits.
1651.18 Payment to one bars payment to another.

    Authority: 5 U.S.C. 8424(d), 8432(j), 8433(e), 8435(c)(2), 
8474(b)(5) and 8474(c)(1).

    Source: 62 FR 32429, June 13, 1997, unless otherwise noted.



Sec. 1651.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this subpart:
    Death benefit means the portion of a deceased participant's account 
that is payable under FERSA's order of precedence.
    Domicile means the participant's place of residence for purposes of 
state income tax liability.
    Order of precedence means the priority of entitlement to a TSP death 
benefit specified in 5 U.S.C. 8424(d).
    TIN means a taxpayer identification number. A TIN may be a Social 
Security number (SSN), an employer identification number (EIN), or an 
individual taxpayer identification number (ITIN).

[68 FR 35509, June 13, 2003]



Sec. 1651.2  Entitlement to funds in a deceased participant's account.

    (a) Death benefits. Except as provided in paragraph (b) of this 
section, the account balance of a deceased participant will be paid as a 
death benefit to the individual or individuals surviving the 
participant, in the following order of precedence:
    (1) To the beneficiary or beneficiaries designated by the 
participant on the TSP designation of beneficiary form that has been 
properly completed and filed in accordance with Sec. 1651.3;
    (2) If there is no designated beneficiary, to the spouse of the 
participant in accordance with Sec. 1651.5;
    (3) If there are no beneficiaries or persons as described in 
paragraphs (a)(1) and (a)(2) of this section, to the child or children 
of the participant and descendants of deceased children by 
representation in accordance with Sec. 1651.6;
    (4) If there are no beneficiaries or persons as described in 
paragraphs (a)(1) through (a)(3) of this section, to the parents of the 
participant in equal shares or entirely to the surviving parent in 
accordance with Sec. 1651.7;
    (5) If there are no beneficiaries or persons as described in 
paragraphs (a)(1) through (a)(4) of this section, to the duly appointed 
executor or administrator of the estate of the participant in accordance 
with Sec. 1651.8; or
    (6) If there are no beneficiaries or persons as described in 
paragraphs (a)(1) through (a)(5) of this section, to the next of kin of 
the participant who is or are entitled under the laws of the state of 
the participant's domicile on

[[Page 273]]

the date of the participant's death in accordance with Sec. 1651.9.
    (b) TSP withdrawals. If the TSP processes a notice that a 
participant has died, it will cancel any pending request by the 
participant to withdraw his or her account. The TSP will also cancel an 
annuity purchase made on or after the participant's date of death but 
before annuity payments have begun, and the annuity vendor will return 
the funds to the TSP. The funds designated by the participant for the 
withdrawal will be paid as a death benefit in accordance with paragraph 
(a) of this section, unless the participant elected to withdrawal his or 
her account in the form of an annuity, in which case the funds 
designated for the purchase of the annuity will be paid as described 
below:
    (1) If the participant requested a single life annuity with no cash 
refund or 10-year certain feature, the TSP will pay the funds as a death 
benefit in accordance with paragraph (a) of this section.
    (2) If the participant requested a single life annuity with a cash 
refund or 10-year certain feature, the TSP will pay the funds as a death 
benefit to the beneficiary or beneficiaries designated by the 
participant on the annuity portion of the TSP withdrawal request form, 
or as a death benefit in accordance with paragraph (a) of this section 
if no beneficiary designated on the withdrawal request survives the 
participant.
    (3) If the participant requested a joint life annuity without 
additional features, the TSP will pay the funds as a death benefit to 
the joint life annuitant if he or she survives the participant, or as a 
death benefit in accordance with paragraph (a) of this section if the 
joint life annuitant does not survive the participant.
    (4) If the participant requested a joint life annuity with a cash 
refund or 10-year certain feature, the TSP will pay the funds as a death 
benefit to the joint life annuitant if he or she survives the 
participant, or as a death benefit to the beneficiary or beneficiaries 
designated by the participant on the annuity portion of the TSP 
withdrawal request form if the joint life annuitant does not survive the 
participant, or as a death benefit in accordance with paragraph (a) of 
this section if neither the joint life annuitant nor any designated 
beneficiary survives the participant.
    (5) If a participant dies after annuity payments have begun, the 
annuity vendor will make or stop the payments in accordance with the 
annuity method selected.
    (c) TSP loans. If the TSP processes a notice that a participant has 
died, any pending loan disbursement will be cancelled and the funds 
designated for the loan will be distributed as a death benefit in 
accordance with paragraph (a) of this section. If a TSP loan has been 
disbursed, but the check has not been negotiated (or an electronic funds 
transfer (EFT) has been returned), the loan proceeds will be used to pay 
off the loan. If the loan check has been negotiated (or the EFT has been 
processed), the funds cannot be returned to the TSP and the TSP will 
declare the loan balance as a taxable distribution in accordance with 5 
CFR 1655.15.
    (d) Investment of a TSP account upon notice of death. If a 
participant dies with any portion of his or her TSP account in a TSP 
Fund other than the G Fund, the TSP will transfer the entire account 
into the G Fund after it processes a notice that the participant has 
died, or a death code from the participant's employing agency reporting 
the participant's death. The account will accrue earnings at the G Fund 
rate in accordance with 5 CFR part 1645 until it is paid out under this 
part.

[68 FR 35509, June 13, 2003, as amended at 70 FR 32215, June 1, 2005]



Sec. 1651.3  Designation of beneficiary.

    (a) Filing requirements. To designate a beneficiary of a TSP 
account, a participant must complete and file a TSP designation of 
beneficiary form with the TSP record keeper. A participant may designate 
more beneficiaries than the TSP form accommodates by attaching 
additional pages to the TSP designation of beneficiary form in 
accordance with the instructions on the form. A valid TSP designation of 
beneficiary remains in effect until it is properly canceled or changed 
as described in Sec. 1651.4.

[[Page 274]]

    (b) Eligible beneficiaries. Any individual, firm, corporation, or 
legal entity, including the U.S. Government, may be designated as a 
beneficiary. Any number of beneficiaries can be named to share the death 
benefit. A beneficiary may be designated without the knowledge or 
consent of that beneficiary or the knowledge or consent of the 
participant's spouse.
    (c) Validity requirements. To be valid, a TSP designation of 
beneficiary form must be:
    (1) Received by the TSP record keeper on or before the date of the 
participant's death; and
    (2) Signed by the participant and two witnesses. The participant 
must either sign the form in the presence of the witnesses or 
acknowledge his signature on the form to the witnesses. If the 
participant attaches an additional page or pages to the designation of 
beneficiary form, each additional page must be signed and witnessed in 
the same manner (by the same witnesses) as the form itself, and must 
follow the format of the TSP designation of beneficiary form. A witness 
must be age 21 or older. A witness designated as a beneficiary will not 
be entitled to receive a death benefit payment; if a witness is the only 
named beneficiary, the designation of beneficiary is invalid. If more 
than one beneficiary is named, the share of the witness beneficiary will 
be allocated among the remaining beneficiaries pro rata.
    (d) Will. A participant cannot use a will to designate a TSP 
beneficiary.

[70 FR 32216, June 1, 2005]



Sec. 1651.4  How to change or cancel a designation of beneficiary.

    (a) Change. To change a designation of beneficiary, the participant 
must submit to the TSP record keeper a new TSP designation of 
beneficiary form meeting the requirements of Sec. 1651.3 to the TSP 
record keeper. If the TSP receives more than one valid TSP designation 
of beneficiary form, it will honor the form with the latest date signed 
by the participant. A participant may change a TSP beneficiary at any 
time, without the knowledge or consent of any person, including his or 
her spouse.
    (b) Cancellation. A participant may cancel all prior designations of 
beneficiaries by sending the TSP record keeper either a new valid 
designation of beneficiary form meeting the requirements of Sec. 
1651.3, or a letter. If the participant uses a letter to cancel a 
designation of beneficiary, it must be signed and witnessed in the same 
manner as a TSP designation of beneficiary form; it must explicitly 
state that all prior designations are canceled; and the TSP record 
keeper must receive it on or before the date of the participant's death.
    (c) Will. A participant cannot use a will to change or cancel a TSP 
designation of beneficiary.

[70 FR 32216, June 1, 2005]



Sec. 1651.5  Spouse of participant.

    (a) For purposes of payment under Sec. 1651.2(a)(2), the spouse of 
the participant is the person to whom the participant was married on the 
date of death. A person is considered to be married even if the parties 
are separated, unless a court decree of divorce or annulment has been 
entered. State law of the participant's domicile will be used to 
determine whether the participant was married at the time of death.
    (b) If a person claims to have a marriage at common law with a 
deceased participant, the TSP will pay benefits to the putative spouse 
under Sec. 1651.2(a)(2) in accordance with the marital status shown on 
the most recent Federal income tax return filed by the participant. 
Alternatively, the putative spouse may submit a court order or 
administrative adjudication determining that the common law marriage is 
valid.

[71 FR 9897, Feb. 28, 2006]



Sec. 1651.6  Child or children.

    If the account is to be paid to the child or children, or to 
descendants of deceased children by representation, as provided in Sec. 
1651.2(a)(3), the following rules apply:
    (a) Child. A child includes a natural or adopted child of the 
deceased participant.
    (b) Descendants of deceased children. ``By representation'' means 
that, if a child of the participant dies before the

[[Page 275]]

participant, all descendants of the deceased child at the same level 
will equally divide the deceased child's share of the participant's 
account.
    (c) Adoption by another. A natural child of a TSP participant who 
has been adopted by someone other than the participant during the 
participant's lifetime will not be considered the child of the 
participant, unless the adopting parent is the spouse of the TSP 
participant.



Sec. 1651.7  Parent or parents.

    If the account is to be paid to the participant's parent or parents 
under Sec. 1651.2(a)(4), the following rules apply:
    (a) Amount. If both parents are alive at the time of the 
participant's death, each parent will be separately paid fifty percent 
of the account. If only one parent is alive at the time of the 
participant's death, he or she will receive the entire account balance.
    (b) Step-parent. A step-parent is not considered a parent unless the 
step-parent adopted the participant.



Sec. 1651.8  Participant's estate.

    If the account is to be paid to the duly appointed executor or 
administrator of the participant's estate under Sec. 1651.2(a)(5), the 
following rules apply:
    (a) Appointment by court. The executor or administrator must provide 
documentation of court appointment.
    (b) Appointment by operation of law. If state law provides 
procedures for handling small estates, the Board will accept the person 
authorized to dispose of the assets of the deceased participant under 
those procedures as a duly appointed executor or administrator. 
Documentation which demonstrates that the person is properly authorized 
under state law must be submitted to the TSP record keeper.



Sec. 1651.9  Participant's next of kin.

    If the account is to be paid to the participant's next of kin under 
Sec. 1651.2(a)(6), the next of kin of the participant will be 
determined in accordance with the state law of the participant's 
domicile at the time of death.



Sec. 1651.10  Deceased and non-existent beneficiaries.

    (a) Designated beneficiary dies before participant. The share of any 
designated beneficiary who predeceases the participant will be paid pro 
rata to the participant's other designated beneficiary or beneficiaries. 
If no designated beneficiary survives the participant, the account will 
be paid according to the order of precedence set forth in Sec. 
1651.2(a).
    (b) Trust designated as beneficiary but not in existence. If a 
participant designated a trust or other entity as a beneficiary and the 
entity does not exist on the date of the participant's death, or is not 
created by will or other document that is effective upon the 
participant's death, the amount designated to the entity will be paid in 
accordance with the rules of paragraph (a) of this section, as if the 
trust were a beneficiary that predeceased the participant.
    (c) Non-designated beneficiary dies before participant. If a 
beneficiary other than a beneficiary designated on a TSP designation of 
beneficiary form dies before the participant, the beneficiary's share 
will be paid equally to other living beneficiaries bearing the same 
relationship to the participant as the deceased beneficiary. However, if 
the deceased beneficiary is a child of the participant, payment will be 
made to the deceased child's descendants, if any. If there are no other 
beneficiaries bearing the same relationship or, in the case of children, 
there are no descendants of deceased children, the deceased 
beneficiary's share will be paid to the person(s) next in line according 
to the order of precedence.
    (d) Beneficiary dies after participant but before payment. If a 
beneficiary dies after the participant, the beneficiary's share will be 
paid to the beneficiary's estate. A copy of a beneficiary's certified 
death certificate is required in order to establish that the beneficiary 
has died, and when.

[70 FR 32216, June 1, 2005]



Sec. 1651.11  Simultaneous death.

    If a beneficiary dies at the same time as the participant, the 
beneficiary will be treated as if he or she predeceased

[[Page 276]]

the participant and the account will be paid in accordance with Sec. 
1651.10. The same time is considered to be the same hour and minute as 
indicated on a death certificate. If the participant and beneficiary are 
killed in the same event, death is presumed to be simultaneous, unless 
evidence is presented to the contrary.



Sec. 1651.12  Homicide.

    If the participant's death is the result of a homicide, a 
beneficiary will not be paid as long as the beneficiary is under 
investigation by local, state or Federal law enforcement authorities as 
a suspect. If the beneficiary is convicted of, or pleads guilty to, a 
crime in connection with the participant's death which would preclude 
the beneficiary from inheriting under state law, the beneficiary will 
not be entitled to receive any portion of the participant's account. The 
Board will follow the state law of the participant's domicile as that 
law is set forth in a civil court judgment (that, under the law of the 
state, would protect the Board from double liability or payment) or, in 
the absence of such a judgment, will apply state law to the facts after 
all criminal appeals are exhausted. The Board will treat the beneficiary 
as if he or she predeceased the participant and the account will be paid 
in accordance with Sec. 1651.10.



Sec. 1651.13  How to apply for a death benefit.

    The TSP has created a paper form that a potential beneficiary must 
use to apply for a TSP death benefit. The TSP must receive this form 
before a death benefit can be paid. Any individual can file this form 
with the TSP record keeper. The individual submitting the form must 
attach to the form a certified copy of the participant' death 
certificate. The TSP record keeper's acceptance of this form does not 
entitle the applicant to benefits. Please visit http://www.tsp.gov to 
obtain a copy of this form and for the current mailing address for death 
benefit applications.

[70 FR 32217, June 1, 2005, as amended at 71 FR 50319, Aug. 25, 2006]



Sec. 1651.14  How payment is made.

    (a) Notice. The TSP record keeper will send notice of pending 
payment to each beneficiary.
    (b) Payment. Payment is made separately to each entitled 
beneficiary. The TSP will send the payment to the address that is 
provided on the participant's TSP designation of beneficiary form unless 
the TSP receives written notice of a more recent address. All 
beneficiaries must provide the TSP record keeper with a taxpayer 
identification number; i.e., Social Security number (SSN), employee 
identification number (EIN), or individual taxpayer identification 
number (ITIN), as appropriate.
    (c) Payment to the participant's spouse. The spouse of the 
participant may request that the TSP transfer all or a portion of the 
payment to a traditional IRA or eligible employer plan (including the 
spouse's TSP account, if he or she already has one). A transfer to a 
spouse's TSP account is permitted only if the spouse is not receiving 
monthly payments from the account. In order to request such a transfer, 
a spouse must use the transfer form provided by the TSP.
    (d) Payment to minor child or incompetent beneficiary. Payment will 
be made in the name of a minor child or incompetent beneficiary. A 
parent or other guardian may direct where the payment should be sent and 
may make any permitted tax withholding election. A guardian of a minor 
child or incompetent beneficiary must submit court documen tation 
showing his or her appointment as guardian.
    (e) Payment to executor or administrator. If payment is to the 
executor or administrator of an estate, the check will be made payable 
to the estate of the deceased participant, not to the executor or 
administrator. A TIN must be provided for all estates.
    (f) Payment to trust. If payment is to a trust, the payment will be 
made payable to the trust and mailed in care of the trustee. A TIN must 
be provided for the trust.
    (g) If a death benefit payment is returned as undeliverable, the TSP 
record keeper will attempt to contact the beneficiary. If the 
beneficiary does not respond within 60 days, the TSP

[[Page 277]]

will forfeit the death benefit payment to the Plan. The beneficiary can 
claim the forfeited funds, although they will not be credited with TSP 
investment returns.
    (h) A properly paid death benefit payment cannot be returned to the 
TSP.

[62 FR 32429, June 13, 1997, as amended at 67 FR 49527, July 30, 2002; 
68 FR 35510, June 13, 2003; 68 FR 74451, Dec. 23, 2003; 70 FR 32217, 
June 1, 2005]



Sec. 1651.15  Claims referred to the Board.

    (a) Contested claims. Any challenge to a proposed death benefit 
payment must be filed in writing with the TSP record keeper before 
payment. All contested claims will be referred to the Board. The Board 
may also consider issues on its own.
    (b) Payment deferred. No payment will be made until the Board has 
resolved the claim.



Sec. 1651.16  Missing and unknown beneficiaries.

    (a) Locate and identify beneficiaries. (1) The TSP record keeper 
will attempt to identify and locate all potential beneficiaries.
    (2) If a beneficiary is not identified and located, and at least one 
year has passed since the date of the participant's death, the 
beneficiary will be treated as having predeceased the participant and 
the beneficiary's share will be paid in accordance with Sec. 1651.10
    (b) Payment to known beneficiaries. If all potential beneficiaries 
are known but one or more beneficiaries (and not all) appear to be 
missing, payment of part of the participant's account may be made to the 
known beneficiaries. The lost or unidentified beneficiary's share may be 
paid in accordance with paragraph (a) of this section at a later date.
    (c) Abandoned account. If no beneficiaries of the account are 
located, the account will be considered abandoned and the funds will 
revert to the TSP. If there are multiple beneficiaries and one or more 
of them refuses to cooperate in the Board's search for the missing 
beneficiary, the missing beneficiary's share will be considered 
abandoned. In such circumstances, the account can be reclaimed if the 
missing beneficiary is found at a later date. However, earnings will not 
be credited from the date the fund is abandoned. The TSP may require the 
beneficiary to apply for the death benefit with a TSP form and submit 
proof of identity and relationship to the participant.

[62 FR 32429, June 13, 1997, as amended at 70 FR 32217, June 1, 2005]



Sec. 1651.17  Disclaimer of benefits.

    (a) Right to disclaim. The beneficiary of a TSP account may disclaim 
his or her right to receive all or part of a TSP death benefit. If the 
disclaimant is a minor, the parent or guardian of the minor must sign 
the disclaimer.
    (b) Valid disclaimer. The disclaimer must expressly state that the 
beneficiary is disclaiming his or her right to receive either all or a 
stated percentage of the death benefit payable from the TSP account of 
the named participant and must be:
    (1) Submitted in writing;
    (2) Signed by the person (or legal representative) disclaiming the 
benefit; and
    (3) Received before the TSP pays the death benefit.
    (c) Invalid disclaimer. A disclaimer is invalid if it is revocable 
or directs to whom the disclaimed benefit should be paid.
    (d) Disclaimer effect. The disclaimed share will be paid as though 
the beneficiary predeceased the participant, according to the rules set 
forth in Sec. 1651.10.

[68 FR 35510, June 13, 2003]



Sec. 1651.18  Payment to one bars payment to another.

    Payment made to a beneficiary(ies) in accordance with this part, 
based upon information received before payment, bars any claim by any 
other person.



PART 1653_COURT ORDERS AND LEGAL PROCESSES AFFECTING THRIFT SAVINGS PLAN 

ACCOUNTS--Table of Contents




               Subpart A_Retirement Benefits Court Orders

Sec.
1653.1 Definitions.

[[Page 278]]

1653.2 Qualifying retirement benefits court orders.
1653.3 Processing retirement benefits court orders.
1653.4 Calculating entitlements.
1653.5 Payment.

  Subpart B_Legal Process for the Enforcement of a Participant's Legal 
          Obligations To Pay Child Support or Alimony Currently

1653.11 Definitions.
1653.12 Qualifying legal processes.
1653.13 Processing legal processes.
1654.14 Calculating entitlements.
1653.15 Payment.

                   Subpart C_Child Abuse Court Orders

1653.21 Definitions.
1653.22 Purpose.
1653.23 Processing and payment.

    Authority: 5 U.S.C. 8435, 8436(b), 8437(e), 8439(a)(3), 8467, 
8474(b)(5) and 8474(c)(1).

    Source: 68 FR 35510, June 13, 2003, unless otherwise noted.



               Subpart A_Retirement Benefits Court Orders



Sec. 1653.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this subpart:
    Court means any court of any State, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, or the 
Virgin Islands, and any Indian court as defined by 25 U.S.C. 1301(3).
    Effective date of a court order means the date it was entered by the 
clerk of the court or, if the order does not show a date entered, the 
date it was filed by the clerk of the court or, if the order does not 
contain a date entered or a date filed, the date it was signed by the 
judge.
    Retirement benefits court order or order means a court decree of 
divorce, annulment or legal separation, or a court order or court-
approved property settlement agreement incident to such a decree. Orders 
may be issued at any stage of a divorce, annulment, or legal separation 
proceeding.



Sec. 1653.2  Qualifying retirement benefits court orders.

    (a) To be qualifying, and thus enforceable against the TSP, a 
retirement benefits court order must meet the following requirements:
    (1) The order must expressly relate to the Thrift Savings Plan 
account of a TSP participant. This means that:
    (i) The order must expressly refer to the ``Thrift Savings Plan'' or 
describe the TSP in such a way that it cannot be confused with other 
Federal Government retirement benefits or non-Federal retirement 
benefits;
    (ii) The order must be written in terms appropriate to a defined 
contribution plan rather than a defined benefit plan. For example, it 
should generally refer to the participant's TSP account or TSP account 
balance rather than a benefit formula or the participant's eventual 
benefits; and
    (iii) If the participant has a civilian TSP account and a uniformed 
services TSP account, the order must expressly identify the account to 
which it relates.
    (2) The order must either require the TSP to freeze the 
participant's account to preserve the status quo pending final 
resolution of the parties' rights to the participant's TSP account, or 
to make a payment from the participant's account to a permissible payee.
    (3) If the order requires a payment from the participant's account, 
the award must be for:
    (i) A specific dollar amount;
    (ii) A stated percentage or fraction of the account; or
    (iii) A survivor annuity as provided in 5 U.S.C. 8435(d).
    (iv) The following examples would qualify to require payment from 
the TSP, although ambiguous or conflicting language used elsewhere could 
cause the order to be rejected.

    Example (1). ORDERED: [payee's name, Social Security number (SSN), 
and address] is awarded $------ from the [civilian or uniformed 
services] Thrift Savings Plan account of [participant's name, SSN, and 
address].
    Example (2). ORDERED: [payee's name, SSN, and address] is awarded --
----% of the [civilian and/or uniformed services] Thrift Savings Plan 
account[s] of [participant's name, SSN, and address] as of [date].
    Example (3). ORDERED: [payee's name, SSN, and address] is awarded 
[fraction] of

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the [civilian and/or uniformed services] Thrift Savings Plan account[s] 
of [participant's name, SSN, and address] as of [date].
    Note: The following optional language can be used in conjunction 
with any of the above examples. FURTHER ORDERED: Earnings will be paid 
on the amount of the entitlement under this ORDER until payment is made.
    (4) A court order can require a payment only to a spouse, former 
spouse, child or dependent of a participant.
    (b) The following retirement benefits court orders are not 
qualifying and thus are not enforceable against the TSP:
    (1) An order relating to a TSP account that has been closed;
    (2) An order relating to a TSP account that contains only nonvested 
money, unless the money will become vested within 30 days of the date 
the TSP receives the order if the participant were to remain in Federal 
service;
    (3) An order requiring the return to the TSP of money that was 
properly paid pursuant to an earlier court order;
    (4) An order requiring the TSP to make a payment in the future, 
unless the present value of the payee's entitlement can be calculated, 
in which case the TSP will make the payment currently; and
    (5) An order that does not specify the account to which the order 
applies, if the participant has both a civilian TSP account and a 
uniformed services TSP account.

[68 FR 35510, June 13, 2003, as amended at 69 FR 29851, May 26, 2004; 71 
FR 54893, Sept. 20, 2006]



Sec. 1653.3  Processing retirement benefits court orders.

    (a) The payment of a retirement benefits court order from the TSP is 
governed solely by FERSA and by the terms of this subpart. The TSP will 
honor retirement benefits court orders properly issued by a court (as 
defined in Sec. 1653.1). However, those courts have no jurisdiction 
over the TSP and the TSP cannot be made a party to the underlying 
domestic relations proceedings.
    (b) The TSP will review a retirement benefits court order to 
determine whether it is enforceable against the TSP only after the TSP 
has received a complete copy of the document. Receipt by an employing 
agency or any other agency of the Government does not constitute receipt 
by the TSP. Retirement benefits court orders should be submitted to the 
TSP record keeper at the current address as provided at http://
www.tsp.gov. Receipt by the TSP record keeper is considered receipt by 
the TSP. To be complete, a court order must be written in English or be 
accompanied by a certified English translation and contain all pages and 
attachments; it must also provide (or be accompanied by a document that 
provides):
    (1) The participant's Social Security number (SSN);
    (2) The name and last known mailing address of each payee covered by 
the order; and
    (3) The payee's SSN and state of legal residence if he or she is the 
current or former spouse of the participant.
    (c) As soon as practicable after the TSP receives a document that 
purports to be a qualifying retirement benefits court order, whether or 
not complete, the participant's account will be frozen. After the 
account is frozen, no withdrawal or loan disbursements (other than a 
required minimum distribution pursuant to section 401(a)(9) of the 
Internal Revenue Code, 26 U.S.C. 401(a)(9)) will be allowed until the 
account is unfrozen. All other account activity will be permitted.
    (d) The following documents do not purport to be qualifying 
retirement benefits court orders, and accounts of participants to whom 
such orders relate will not be frozen:
    (1) A document that does not indicate on its face (or is not 
accompanied by a document that establishes) that it has been issued or 
approved by a court;
    (2) A court order relating to a TSP account that has been closed;
    (3) A court order dated before June 6, 1986;
    (4) A court order that does not award all or any part of the TSP 
account to someone other than the participant; and
    (5) A court order that does not mention retirement benefits.
    (e) After the participant's account is frozen, the TSP will review 
the document further to determine if it is complete; if the document is 
not complete,

[[Page 280]]

the TSP will request a complete document. If a complete copy is not 
received within 30 days of that request, the account will be unfrozen 
and no further action will be taken with respect to the document.
    (f) The TSP will review a complete copy of an order to determine 
whether it is a qualifying retirement benefits court order as described 
in Sec. 1653.2. The TSP will mail a decision letter to all parties 
containing the following information:
    (1) A determination regarding whether the court order is qualifying;
    (2) A statement of the applicable statutes and regulations;
    (3) An explanation of the effect the court order has on the 
participant's TSP account; and
    (4) If the qualifying order requires payment, the letter will 
provide:
    (i) An explanation of how the payment will be calculated and an 
estimated amount of payment;
    (ii) The anticipated date of payment;
    (iii) Tax information and income tax withholding forms to the person 
responsible for paying Federal income tax on the payment;
    (iv) Information and the form needed to transfer the payment to an 
eligible employer plan or traditional IRA (if the payee is the current 
or former spouse of the participant); and
    (v) Information and the form needed to receive the payment through 
an electronic funds transfer (EFT).
    (g) The TSP decision letter is a final determination of the parties' 
rights in the account. There is no administrative appeal from the TSP 
decision.
    (h) An account frozen under this section will be unfrozen as 
follows:
    (1) If the account was frozen upon receipt of an incomplete order, 
the account will be unfrozen if a complete order is not received within 
30 days of the date of the request described in paragraph (e) of this 
section;
    (2) If the account was frozen in response to an order issued to 
preserve the status quo pending final resolution of the parties' rights 
to the participant's TSP account, the account will be unfrozen if the 
TSP receives a court order that vacates or supersedes the previous order 
(unless the order vacating or superseding the order itself qualifies to 
place a freeze on the account). A court order that purports to require a 
payment from the TSP supersedes an order issued to preserve the status 
quo, even if it does not qualify to require a payment from the TSP;
    (3) If the account was frozen in response to an order purporting to 
require a payment from the TSP, the freeze will be lifted:
    (i) Once payment is made, if the court order is qualifying; or
    (ii) Forty-five (45) days after the date of the TSP decision letter 
if the court order is not qualifying. The 45-day period will be 
terminated, and the account will be unfrozen, if both parties submit to 
the TSP a written request for such a termination.
    (i) The TSP will hold in abeyance the processing of a court-ordered 
payment if the TSP is notified in writing that the underlying court 
order has been appealed, and that the effect of the filing of the appeal 
is to stay the enforceability of the order.
    (1) In the notification, the TSP must be provided with proper 
documentation of the appeal and citations to legal authority, which 
address the effect of the appeal on the enforceability of the underlying 
court order.
    (i) If the TSP receives proper documentation and citations to legal 
authority which demonstrate that the underlying court order is not 
enforceable, the TSP will inform the parties that the payment will not 
occur until resolution of the appeal, and the account will remain frozen 
for loans and withdrawals.
    (ii) In the absence of proper documentation and citations to legal 
authority, the TSP will presume that the provisions relating to the TSP 
in the court order remain valid and will proceed with the payment 
process.
    (2) The TSP must be notified in writing of the disposition of the 
appeal before the freeze will be removed from the participant's account 
or a payment will be made. The notification must include a complete copy 
of an order from the appellate court explaining the effect of the appeal 
on the participant's account.
    (j) Multiple qualifying court orders relating to the same TSP 
account and

[[Page 281]]

received by the TSP will be processed as follows:
    (1) If the orders make awards to the same payee or payees and do not 
indicate that the awards are cumulative, the TSP will only honor the 
order bearing the latest effective date.
    (2) If the orders relate to different former spouses of the 
participant and award survivor annuities, the TSP will honor them in the 
order of their effective dates.
    (3) If the orders relate to different payees and award fixed dollar 
amounts, percentages or fractions of an account, or portions of an 
account calculated by the application of formulae, the orders will be 
honored:
    (i) In the order of their receipt by the TSP, if received by the TSP 
on different days; or
    (ii) In the order of their effective dates, if received by the TSP 
on the same day.
    (4) In all other cases, the TSP will honor multiple qualifying court 
orders relating to the same TSP account in the order of their receipt by 
the TSP.

[68 FR 35510, June 13, 2003, as amended at 69 FR 29851, May 26, 2004; 71 
FR 50320, Aug. 25, 2006]



Sec. 1653.4  Calculating entitlements.

    (a) For purposes of computing the amount of a payee's entitlement 
under this section, a participant's TSP account balance will include any 
loan balance outstanding as of the date used for calculating the payee's 
entitlement, unless the court order provides otherwise.
    (b) If the court order awards a percentage or fraction of an account 
as of a specific date, the payee's entitlement will be calculated based 
on the account balance as of that date. If the date specified in the 
order is not a business day, the TSP will use the participant's account 
balance as of the last preceding business day.
    (c) If the court order awards a percentage or fraction of an account 
but does not contain a specific date as of which to apply that 
percentage or fraction, the TSP will use the effective date of the 
order.
    (d) If the court order awards a specific dollar amount, the payee's 
entitlement will be the lesser of:
    (1) The dollar amount stated in the court order; or
    (2) The vested account balance on the date of disbursement.
    (e) If a court order describes a payee's entitlement in terms of a 
fixed dollar amount and a percentage or fraction of the account, the TSP 
will pay the fixed dollar amount, even if the percentage or fraction, 
when applied to the account balance, would yield a different result.
    (f) The payee's entitlement will be credited with TSP investment 
earnings as described:
    (1) The entitlement calculated under this section will not be 
credited with TSP investment earnings unless the court order 
specifically provides otherwise.
    (2) If earnings are awarded and a rate is specified, the rate must 
be expressed as an annual percentage rate or as a per diem dollar amount 
added to the payee's entitlement.
    (3) If earnings are awarded and the rate is not specified, the TSP 
will credit the payee's entitlement with the rate of return for the G 
Fund.
    (4) Earnings at the G Fund rate will accrue on a monthly basis 
through May 31, 2003, beginning with the month following the entitlement 
date; thereafter, G Fund earnings will accrue on a daily basis, 
beginning with the business day following the date used for calculating 
the payee's entitlement (or beginning June 1, 2003, if interest or 
earnings commence before June 1, 2003) and ending 2 business days before 
payment is made.
    (g) The TSP will estimate the amount of a payee's entitlement when 
it prepares the court order decision letter and will recalculate the 
entitlement at the time of payment. The recalculation may differ from 
the initial estimation because:
    (1) The estimation of the payee's entitlement includes both vested 
and nonvested amounts in the participant's account. If, at the time of 
payment, the nonvested portion of the account has not become vested, the 
recalculated entitlement will apply only to the participant's vested 
account balance;
    (2) After the estimate of the payee's entitlement is prepared, the 
TSP may

[[Page 282]]

process account transactions that have an effective date on or before 
the date used to compute the payee's entitlement. Those transactions 
will be included when the payee's entitlement is recalculated at the 
time of payment; and
    (3) The amount available for payment from the account may be reduced 
due to changes in share price (i.e., investment losses).



Sec. 1653.5  Payment.

    (a) Payment pursuant to a qualifying retirement benefits court order 
ordinarily will be made 60 days after the date of the TSP decision 
letter. This is intended to permit the payee sufficient time to consider 
decisions about tax withholding, payment by EFT, and transfer options. 
An earlier distribution may be made as follows:
    (1) If the payee is the current or former spouse of the participant, 
the payee can request to receive the payment sooner than 60 days by 
making a tax withholding election, by requesting a payment by EFT, or by 
requesting a transfer of all or a portion of the payment to a 
traditional IRA or eligible employer plan. The TSP decision letter will 
provide the forms a payee must use to choose one of these payment 
options.
    (2) If the payee is someone other than the current or former spouse 
of the participant, the participant can request a disbursement sooner 
than 60 days by making a tax withholding election on forms provided to 
the participant with the TSP decision letter.
    (3) If the court order makes an award to multiple payees, a 
disbursement may be made earlier than 60 days only if requests for 
expedited payment are received from all of the payees.
    (4) In no event will payment be made earlier than 31 days after the 
date of the TSP decision letter.
    (b) In no case will payment exceed the participant's vested account 
balance, minus any outstanding loan balance.
    (c) The entire amount of a court order payee's entitlement must be 
disbursed at one time. A series of payments will not be made, even if 
the court order provides for such a method of payment. A payment 
pursuant to a court order extinguishes all rights to any further payment 
under that order, even if the entire amount of the entitlement cannot be 
paid. Any further award must be contained in a separate court order.
    (d) Payment will be made pro rata from all TSP Funds in which the 
account is invested, based on the balance in each fund on the date 
payment is made, and from both tax-deferred and tax-exempt balances, if 
any. The TSP will not honor provisions of a court order that require 
payment to be made from specific TSP Funds or contribution sources. A 
court order may, however, specify a particular payment from the tax-
exempt balance of a uniformed services TSP account.
    (e) Payment will be made only to the person or persons specified in 
the court order.
    (1) If payment is made to the current or former spouse of the 
participant, the distribution will be reported to the Internal Revenue 
Service (IRS) as income to the payee. If the court order specifies a 
third-party mailing address for the payment, the TSP will mail to the 
address specified any portion of the payment that is not transferred to 
a traditional IRA or eligible employer plan.
    (2) If the payment is made to anyone other than the current or 
former spouse of the participant, the payment is taxable to the 
participant and is subject to Federal income tax withholding by the 
participant. The participant can elect the amount to be withheld by 
filing with the TSP the forms provided to the participant with the 
decision letter. The tax withholding will be taken from the payee's 
entitlement and the gross amount of the payment (i.e., the net payment 
distributed to the payee plus the amount withheld from the payment for 
taxes) will be reported to the IRS as income to the participant.
    (f) Payment will not be made jointly to two or more persons. If the 
court order requires payments to more than one person, the order must 
separately indicate the amount to be paid to each.
    (g) If there are insufficient funds to pay each court order payee, 
payment will be made as follows:

[[Page 283]]

    (1) If the order specifies an order of precedence for the payments, 
the TSP will honor it.
    (2) If the order does not specify an order of precedence for the 
payments, the TSP will pay a current or former spouse first, a dependent 
second, and an attorney third.
    (h) If the payee dies before a payment is disbursed, payment will be 
made to the estate of the payee, unless otherwise specified by the court 
order. A distribution to the estate of a deceased court order payee will 
be reported as income to the decedent's estate. If the participant dies 
before payment is made, the order will be honored so long as it is 
submitted to the TSP before the TSP account has been closed.
    (i) If the parties to a divorce or annulment have remarried each 
other, or a legal separation is terminated, a new court order will be 
required to prevent payment pursuant to a previously submitted 
qualifying retirement benefits court order.
    (j) Payment to a person (including the estate of the payee) pursuant 
to a qualifying retirement benefits court order made in accordance with 
this subpart bars recovery by any other person claiming entitlement to 
the payment.
    (k) If a court ordered payment is returned as undeliverable, the TSP 
record keeper will attempt to locate the payee by writing to his or her 
TSP database address. If the payee does not respond within 60 days, the 
TSP will forfeit the funds to the Plan. The payee can claim the 
forfeited funds, although they will not be credited with TSP investment 
fund returns.
    (l) A properly paid court order payment cannot be returned to the 
TSP.

[68 FR 35510, June 13, 2003, as amended at 68 FR 74451, Dec. 23, 2003; 
70 FR 32217, June 1, 2005]



  Subpart B_Legal Process for the Enforcement of a Participant's Legal 
          Obligations To Pay Child Support or Alimony Currently



Sec. 1653.11  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1600.1.
    (b) As used in this subpart:
    Alimony means the payment of funds for the support and maintenance 
of a spouse or former spouse. Alimony includes separate maintenance, 
alimony pendente lite, maintenance, and spousal support. Alimony can 
also include attorney fees, interest, and court costs, but only if these 
items are expressly made recoverable by qualifying legal process, as 
described in Sec. 1653.12.
    Child support means payment of funds for the support and maintenance 
of a child or children of the participant. Child support includes 
payments to provide for health care, education, recreation, clothing, or 
to meet other specific needs of a child or children. Child support can 
also include attorney fees, interest, and court costs, but only if these 
items are expressly made recoverable by qualifying legal process, as 
described in Sec. 1653.12.
    Competent authority means a court or an administrative agency of 
competent jurisdiction in any State, territory or possession of the 
United States; a court or administrative agency of competent 
jurisdiction in any foreign country with which the United States has 
entered into an agreement that requires the United States to honor the 
process; or an authorized official pursuant to an order of such a court 
or an administrative agency of competent jurisdiction pursuant to state 
or local law.
    Legal process means a writ, order, summons, or other similar process 
in the nature of a garnishment, which is brought to enforce a 
participant's legal obligations to pay child support or alimony 
currently.



Sec. 1653.12  Qualifying legal processes.

    (a) The TSP will only honor the terms of a legal process that is 
qualifying under paragraph (b) of this section.

[[Page 284]]

    (b) A legal process must meet each of the following requirements to 
be considered qualifying:
    (1) A competent authority must have issued the legal process;
    (2) The legal process must expressly relate to the Thrift Savings 
Plan account of a TSP participant, as described in Sec. 1653.2(a)(1);
    (3) The legal process must require the TSP to:
    (i) Pay a stated dollar amount from a participant's TSP account; or
    (ii) Freeze the participant's account in anticipation of an order to 
pay from the account.
    (c) The following legal processes are not qualifying:
    (1) A legal process relating to a TSP account that has been closed;
    (2) A legal process relating to a TSP account that contains only 
nonvested money, unless the money will become vested within 30 days of 
the date the TSP receives the order if the participant were to remain in 
Federal service;
    (3) A legal process requiring the return to the TSP of money that 
was properly paid pursuant to an earlier legal process;
    (4) A legal process requiring the TSP to make a payment in the 
future; and
    (5) A legal process requiring a series of payments.



Sec. 1653.13  Processing legal processes.

    (a) The payment of legal processes from the TSP is governed solely 
by the Federal Employees' Retirement System Act, 5 U.S.C. chapter 84, 
and by the terms of this subpart. Although the TSP will honor legal 
processes properly issued by a competent authority, those entities have 
no jurisdiction over the TSP and the TSP cannot be made a party to the 
underlying proceedings.
    (b) The TSP will review a legal process to determine whether it is 
enforceable against the TSP only after the TSP has received a complete 
copy of the document. Receipt by an employing agency or any other agency 
of the Government does not constitute receipt by the TSP. Legal 
processes should be submitted to the TSP record keeper at the current 
address as provided at http://www.tsp.gov. Receipt by the TSP record 
keeper is considered receipt by the TSP. To be complete, a legal process 
must contain all pages and attachments; it must also provide (or be 
accompanied by a document that provides):
    (1) The participant's Social Security number (SSN);
    (2) The name and last known mailing address of each payee covered 
under the order; and
    (3) The SSN and state of legal residence of the payee if he or she 
if the current or former spouse of the participant.
    (c) As soon as practicable after the TSP receives a document that 
purports to be a qualifying legal process, whether or not complete, the 
participant's account will be frozen. After the account is frozen, no 
withdrawal or loan disbursements will be allowed until the account is 
unfrozen. All other account activity will be permitted, including 
contributions, loan repayments, adjustments, contribution allocations 
and interfund transfers.
    (d) The following documents will not be treated as purporting to be 
a qualifying legal processes, and accounts of participants to whom such 
orders relate will not be frozen:
    (1) A document that does not indicate on its face (or accompany a 
document that establishes) that it has been issued by a competent 
authority;
    (2) A legal process relating to a TSP account that has been closed; 
and
    (3) A legal process that does not relate either to the TSP or to the 
participant's retirement benefits.
    (e) After the participant's account is frozen, the TSP will review 
the document further to determine if it is complete; if the document is 
not complete, the TSP will request a complete document. If a complete 
copy is not received by the TSP within 30 days of that request, the 
account will be unfrozen and no further action will be taken with 
respect to the document.
    (f) As soon as practicable after receipt of a complete copy of a 
legal process, the TSP will review it to determine whether it is a 
qualifying legal process as described in Sec. 1653.12. The TSP will 
mail a decision letter to all parties containing the same information 
described at Sec. 1653.3(f).

[[Page 285]]

    (g) The TSP decision letter is final. There is no administrative 
appeal from the TSP decision.
    (h) An account frozen under this section will be unfrozen as 
follows:
    (1) If a complete document has not been received within 30 days of 
the date of a request described in paragraph (e) of this section;
    (2) If the account was frozen pursuant to a legal process requiring 
the TSP to freeze the participant's account in anticipation of an order 
to pay from the account, the account will be unfrozen if any one of the 
following events occurs:
    (i) As soon as practicable after the TSP receives a complete copy of 
an order vacating or superseding the preliminary order (unless the order 
vacating or superseding the preliminary order qualifies to place a 
freeze on the account);
    (ii) Upon payment pursuant to the order to pay from the account, if 
the TSP determines that the order is qualifying; or
    (iii) As soon as practicable after the TSP issues a decision letter 
informing the parties that the order to pay from the account is not a 
qualifying legal process;
    (3) If the account was frozen after the TSP received a document that 
purports to be a legal process requiring payment from the participant's 
account, the account will be unfrozen:
    (i) Upon payment pursuant to a qualifying legal process; or
    (ii) As soon as practicable after the TSP informs the parties that 
the document is not a qualifying legal process.
    (i) The TSP will hold in abeyance the processing of a payment 
required by legal process if the TSP is notified in writing that the 
legal process has been appealed, and that the effect of the filing of 
the appeal is to stay the enforceability of the legal process. The 
notification must be accompanied by the documentation and citations to 
legal authority described at Sec. 1653.3(i).
    (j) Multiple qualifying legal processes relating to the same TSP 
account and received by the TSP will be processed as follows:
    (1) If the legal processes make awards to the same payee or payees 
and do not indicate that the awards are cumulative, the TSP will only 
honor the legal process bearing the latest effective date.
    (2) If the legal processes relate to different payees, the legal 
process will be honored:
    (i) In the order of their receipt by the TSP, if received by the TSP 
on different days; or
    (ii) In the order of their effective dates, if received by the TSP 
on the same day.

[68 FR 35510, June 13, 2003, as amended at 71 FR 50320, Aug. 25, 2006]



Sec. 1653.14  Calculating entitlements.

    A qualifying legal process can only require the payment of a 
specified dollar amount from the TSP. Payment pursuant to a qualifying 
legal process will be calculated in accordance with Sec. 1653.4(a), 
(d), (f) and (g).



Sec. 1653.15  Payment.

    Payment pursuant to a qualifying legal process will be made in 
accordance with Sec. 1653.5.



                   Subpart C_Child Abuse Court Orders



Sec. 1653.21  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this subpart:
    Child means an individual less than 18 years of age.
    Judgment against a participant for physically, sexually, or 
emotionally abusing a child means any legal claim perfected through a 
final enforceable judgment which is based in whole or in part upon the 
physical, sexual, or emotional abuse of a child, whether or not that 
abuse is accompanied by other actionable wrongdoing, such as sexual 
exploitation or gross negligence.



Sec. 1653.22  Purpose.

    Under 5 U.S.C. 8437(e)(3) and 8467(a)(2), the TSP will honor a court 
order or other similar process in the nature of a garnishment that is 
brought to enforce a judgment against a participant for physically, 
sexually, or emotionally abusing a child.

[[Page 286]]



Sec. 1653.23  Processing and payment.

    To the maximum extent consistent with sections 8437(e)(3) and 
8467(a)(2), child abuse court orders will be processed by the TSP under 
the procedures described in subparts A and B of this part.



PART 1655_LOAN PROGRAM--Table of Contents




Sec.
1655.1 Definitions.
1655.2 Eligibility for loans.
1655.3 Information concerning the cost of a loan.
1655.4 Number of loans.
1655.5 Loan repayment period.
1655.6 Amount of loan.
1655.7 Interest rate.
1655.8 Quarterly statements.
1655.9 Effect of loans on individual account.
1655.10 Loan application process.
1655.11 Loan acceptance.
1655.12 Loan agreement.
1655.13 Loan approval and issuance.
1655.14 Loan payments.
1655.15 Taxable distributions.
1655.16 Reamortization.
1655.17 Prepayment.
1655.18 Spousal rights.
1655.19 Effect of court order on loan.
1655.20 Residential loans.
1655.21 Loan fee.

    Authority: 5 U.S.C. 8433(g), 8439(a)(3) and 8474.

    Source: 68 FR 35515, June 13, 2003, unless otherwise noted.



Sec. 1655.1  Definitions.

    (a) Definitions generally applicable to the Thrift Savings Plan are 
set forth at 5 CFR 1690.1.
    (b) As used in this part:
    Amortization means the reduction in a loan by periodic payments of 
principal and interest according to a schedule of payments.
    Date of application means the day on which the TSP record keeper 
receives the loan application, either electronically or on the TSP Web 
site or on a paper TSP form.
    General purpose loan means any TSP loan other than a loan for the 
purchase or construction of a primary residence.
    Guaranteed funds means a cashier's check, money order, certified 
check (i.e., a check certified by the financial institution on which it 
is drawn), cashier's draft, or treasurer's check from a credit union.
    Loan issue date means the date on which the TSP record keeper 
disburses funds from the participant's account for the loan amount.
    Loan repayment period means the time over which payments that are 
required to repay a loan in full are scheduled.
    Principal or principal amount means the amount borrowed by a 
participant from his or her individual account, or, after 
reamortization, the amount financed.
    Reamortization means the recalculation of periodic payments of 
principal and interest.
    Residential loan means a TSP loan for the purchase or construction 
of a primary residence.
    Taxable distribution means the amount of outstanding principal and 
interest on a loan which must be reported to the Internal Revenue 
Service as taxable income as a result of the failure of a participant to 
repay a loan in full, according to the terms of the loan agreement.

[68 FR 35515, June 13, 2003, as amended at 70 FR 32217, June 1, 2005]



Sec. 1655.2  Eligibility for loans.

    A participant can apply for a TSP general purpose or residential 
loan if:
    (a) More than 60 calendar days have elapsed since the participant 
has repaid in full a TSP loan of the same type.
    (b) The participant is in pay status;
    (c) The participant is eligible to contribute to the TSP (or would 
be eligible to contribute but for the suspension of the participant's 
contributions because he or she obtained a financial hardship in-service 
withdrawal);
    (d) The participant has at least $1,000 in employee contributions 
and attributable earnings in his or her account; and
    (e) The participant has not had a TSP loan declared a taxable 
distribution within the last 12 months for any reason other than a 
separation from Government service.

[69 FR 29852, May 26, 2004, as amended at 70 FR 32218, June 1, 2005]



Sec. 1655.3  Information concerning the cost of a loan.

    Information concerning the cost of a loan is provided in the booklet 
TSP

[[Page 287]]

Loan Program (available on the TSP Web site, from the participant's 
personnel office or service, or from the TSP record keeper). From this 
information, a participant can determine the effects of a loan on his or 
her final account balance and can compare the cost of a loan to that of 
other sources of financing.



Sec. 1655.4  Number of loans.

    A participant may have no more than two loans outstanding from his 
or her TSP account at any time. One of the two outstanding loans may be 
a residential loan and the other one may be a general purpose loan. A 
participant with both a civilian TSP account and a uniformed services 
TSP account may have two outstanding loans from each account.

[68 FR 35515, June 13, 2003, as amended at 69 FR 29852, May 26, 2004]



Sec. 1655.5  Loan repayment period.

    (a) Minimum. The minimum repayment period a participant may request 
for a loan is one year of scheduled payments.
    (b) Maximum. The maximum repayment period a participant may request 
for a general purpose loan is five years of scheduled payments. The 
maximum repayment period a participant may request for a residential 
loan is 15 years of scheduled payments.



Sec. 1655.6  Amount of loan.

    (a) Minimum amount. The initial principal amount of any loan may not 
be less than $1,000.
    (b) Maximum amount. The principal amount of a new loan must be less 
than or equal to the smallest of the following:
    (1) The portion of the participant's individual account balance that 
is attributable to employee contributions and attributable earnings (not 
including any outstanding loan principal);
    (2) 50 percent of the participant's vested account balance 
(including any outstanding loan balance) or $10,000, whichever is 
greater, minus any outstanding loan balance; or
    (3) $50,000 minus the participant's highest outstanding loan balance 
(if any) during the last 12 months.
    (c) If a participant has both a civilian TSP account and a uniformed 
services TSP account, the maximum loan amount available will be based on 
a calculation that takes into consideration the account balances and 
outstanding loan balances for both accounts.



Sec. 1655.7  Interest rate.

    (a) Except as provided in paragraph (b) of this section, loans will 
bear interest at the monthly G Fund interest rate established by the 
Department of the Treasury in effect on the date the TSP record keeper 
processes the paper application or on the date the request is entered on 
the TSP Web site.
    (b) The interest rate calculated under this section remains fixed 
until the loan is repaid, unless a civilian participant informs the TSP 
record keeper that he or she entered into active duty military service, 
and, as a result, requests that the interest rate on a loan issued 
before entry into active duty military service be reduced to an annual 
rate of 6 percent for the period of such service. The civilian 
participant must provide the record keeper with the beginning and ending 
dates of active duty military service.



Sec. 1655.8  Quarterly statements.

    Information relating to any outstanding loan will be included on the 
quarterly participant statements.



Sec. 1655.9  Effect of loans on individual account.

    (a) The amount borrowed will be removed from the participant's 
account when the loan is disbursed. Consequently, these funds will no 
longer generate earnings.
    (b) The loan principal will be disbursed from that portion of the 
account represented by employee contributions and attributable earnings, 
pro rata from each TSP Fund in which the account is invested and pro 
rata from tax-deferred and tax-exempt balances.
    (c) Loan payments, including both principal and interest, will be 
credited to the participant's individual account. Loan payments will be 
credited to the appropriate TSP Fund in accordance

[[Page 288]]

with the participant's most recent contribution allocation.

[68 FR 35515, June 13, 2003, as amended at 70 FR 32218, June 1, 2005]



Sec. 1655.10  Loan application process.

    (a) Any participant may apply for a loan by submitting a completed 
TSP loan application form to the TSP record keeper.
    (b) The following participants may also apply for and complete a 
loan request on the TSP Web site:
    (1) FERS participants or members of the uniformed services 
requesting a general purpose loan if they are:
    (i) Unmarried; or
    (ii) Married and have been granted an exception to the spousal 
requirements described in Sec. 1655.18.
    (2) CSRS participants requesting a general purpose loan if they are:
    (i) Unmarried;
    (ii) Married and provide a current address for their spouse; or
    (iii) Married and have been granted an exception to the spousal 
requirements described in Sec. 1655.18.
    (c) Persons not described in paragraph (b) of this section may use 
the TSP Web site to submit a loan application and obtain a loan 
agreement, but must complete the process by submitting the resulting 
loan agreement and any related documentation on paper.

[68 FR 35515, June 13, 2003, as amended at 70 FR 32218, June 1, 2005]



Sec. 1655.11  Loan acceptance.

    The TSP record keeper will reject a loan application if:
    (a) The participant is not qualified to apply for a loan under Sec. 
1655.2 or has failed to provide all required information on the loan 
application;
    (b) The participant has the maximum number of loans outstanding 
under Sec. 1655.4;
    (c) The participant has a pending loan agreement or in-service 
withdrawal request;
    (d) The amount of the requested loan is less than the minimum amount 
set forth in Sec. 1655.6(a);
    (e) A hold has been placed on the account pursuant to 5 CFR 
1653.3(c); or
    (f) The participant has received a taxable loan distribution from 
the TSP within the 12-consecutive-month period preceding the date of the 
application, unless the taxable distribution was the result of the 
participant's failure to repay the loan upon his or her separation from 
Government service.

[68 FR 35515, June 13, 2003, as amended at 69 FR 29852, May 26, 2004]



Sec. 1655.12  Loan agreement.

    (a) Upon determining that a loan application meets the requirements 
of this part, the TSP record keeper will provide the participant with 
the terms and conditions of the loan, as follows:
    (1) If the participant submits a paper loan application, the TSP 
record keeper will mail the loan agreement, and other information as 
appropriate, to the participant.
    (2) If the participant initiates a loan request on the TSP Web site, 
which cannot be completed on the Web site, the participant must print 
the partially completed loan agreement directly from the Web site, 
provide any missing information (including spouse's signature or 
documents supporting a residential loan request, if applicable), and 
submit it to the TSP record keeper.
    (b) By signing the loan agreement, either electronically or on the 
form, the participant agrees to be bound by all of its terms and 
conditions, agrees to repay the loan by payroll deduction, and 
certifies, under penalty of perjury, to the truth and completeness of 
all statements made in the loan application and loan agreement to the 
best of his or her knowledge.
    (c) For loans submitted on paper and those that cannot be completed 
on the TSP Web site, the TSP record keeper must receive the completed 
loan agreement (including any required supporting documentation) before 
the expiration date stated on the loan agreement or the agreement will 
not be processed.
    (d) The signed loan agreement must be accompanied by:
    (1) In the case of a residential loan, supporting materials that 
document the purchase or construction of the residence and the amount 
requested (as described in Sec. 1655.20); and
    (2) Any other information that the Executive Director may require.

[[Page 289]]

    (e) A participant may request that the loan be disbursed by direct 
deposit to a checking or savings account maintained by the participant 
in a financial institution by properly completing the required 
information on the loan agreement or on the TSP Web site, if the loan 
request can be completed on the Web site.

[68 FR 35515, June 13, 2003, as amended at 70 FR 32218, June 1, 2005]



Sec. 1655.13  Loan approval and issuance.

    (a) When the completed loan agreement is signed electronically or 
returned by the participant to the TSP record keeper, together with any 
documentation required to be submitted, the loan will be initially 
approved or denied by the TSP record keeper based upon the requirements 
of this part, including the following conditions:
    (1) The participant has signed the promise to repay the loan, has 
agreed to repay the loan through payroll deductions, and has certified 
that the information given is true and complete to the best of the 
participant's knowledge;
    (2) Processing of the loan would not be prohibited by Sec. 1655.19 
relating to court orders;
    (3) The spouse of a FERS or uniformed services participant has 
consented to the loan or, if the spouse's whereabouts are unknown or 
exceptional circumstances make it inappropriate to secure the spouse's 
consent, an exception to the spousal requirement described in Sec. 
1655.18 has been granted;
    (4) The spouse of a CSRS participant has been given notice or, if 
the spouse's whereabouts are unknown, an exception to the spousal 
requirement described in Sec. 1655.18 has been granted;
    (5) When a paper agreement is required, the completed loan 
agreement, including all required supporting documentation, was received 
by the TSP record keeper before the expiration date specified on the 
loan agreement; and
    (6) The participant has met any other conditions that the Executive 
Director may require.
    (b) If approved, the loan will be issued unless:
    (1) The participant's employing agency has reported the 
participant's separation from Government service;
    (2) The TSP receives written notice that the participant has died;
    (3) The participant's account balance on the loan issue date does 
not contain sufficient employee contributions and associated earnings to 
make a loan of at least $1,000;
    (4) A hold on the account is processed before the loan is disbursed; 
or
    (5) A taxable distribution on an outstanding loan is declared before 
the new loan is issued.
    (c) If the loan is otherwise acceptable but the amount available to 
borrow is less than the requested amount (but is at least $1,000), the 
loan will be issued in the maximum amount available at the time of the 
disbursement. In such a case, the periodic payment amount will remain 
the same and the loan term may be shortened.
    (d) The loan issue date is considered to be the date the loan was 
made.
    (e) If a loan disbursement is returned as undeliverable, the TSP 
record keeper will attempt to locate the participant. If the participant 
does not respond within 60 days, the TSP will repay the loan with the 
returned loan proceeds.



Sec. 1655.14  Loan payments.

    (a) Loan payments must be made through payroll deduction in 
accordance with the loan agreement. Once loan payments begin, the 
employing agency cannot terminate the payroll deductions at the 
employee's request, unless the TSP instructs it to do so. For example, 
employing agencies must stop loan payments if the participant becomes a 
debtor in a chapter 13 bankruptcy action, unless the bankruptcy court 
expressly permits the payments to continue.
    (b) The participant may make additional payments by mailing a 
personal check or guaranteed funds to the TSP record keeper. If the TSP 
receives a payment that repays the outstanding loan amount and overpays 
the loan by $10.00 or more, the overpayment will be refunded to the 
participant. Overpayments of less than $10 will be applied to the 
participant's account and will not

[[Page 290]]

be refunded. If a loan overpayment refund is returned as undeliverable, 
the TSP record keeper will attempt to locate the participant. If the 
participant does not respond within 60 days, the TSP will forfeit the 
overpayment refund to the Plan. The participant can claim the forfeited 
funds, although they will not be credited with TSP investment fund 
returns.
    (c) The initial payment on a loan is due on or before the 60th day 
following the loan issue date. Interest accrues on the loan from the 
date of issuance.
    (d) Subsequent payments are due at regular intervals as prescribed 
in the loan agreement, or most recent amortization, according to the 
participant's pay cycle.
    (e) If a payment is not made when due, the TSP will notify the 
participant of the missed payment and the participant must make up the 
payment in full. If the participant does not make up all missed payments 
by the end of the calendar quarter following the calendar quarter in 
which the first payment was missed, the TSP will declare the loan to be 
a taxable distribution in accordance with Sec. 1655.15. The 
participant's make-up payment must be in the form of a personal check or 
guaranteed funds.
    (f) Interest will accrue on all missed payments and will be included 
in the calculation of any taxable distribution subsequently declared in 
accordance with Sec. 1655.15. Interest will also accrue on payments 
missed while a participant is in nonpay status.



Sec. 1655.15  Taxable distributions.

    (a) The Board may declare any unpaid loan principal, plus unpaid 
interest, to be a taxable distribution from the Plan if:
    (1) A participant is in a confirmed nonpay status for a period of 
one year or more, has not advised the TSP that he or she is serving on 
active military duty, and payments are not resumed after the participant 
is notified the loan has been reamortized;
    (2) A participant separates from Government service and does not 
repay the outstanding loan principal and interest in full within the 
period specified by the notice to the participant from the TSP record 
keeper explaining the participant's repayment options;
    (3) The TSP record keeper advises the participant that there are 
missing payments and the participant fails to make (by personal check or 
guaranteed funds) a direct payment of the entire missing amount or 
repayment in full by the deadline established in accordance with Sec. 
1655.14(e);
    (4) Any material information provided in accordance with Sec. 
1655.10, Sec. 1655.12, or Sec. 1655.18 is found to be false;
    (5) With the exception of a loan described in 5 CFR 1620.45, the 
loan is not repaid in full (including interest due) within five years, 
in the case of a general purpose loan, or within 15 years, in the case 
of a residential loan, from the loan issue date;
    (6) The participant dies; or
    (7) The participant's loan payments were stopped when he or she 
became a debtor in a chapter 13 bankruptcy action, and the bankruptcy 
court did not expressly permit the payments to recommence.
    (b) If a taxable distribution occurs in accordance with paragraph 
(a) of this section, the Board will notify the participant of the amount 
and date of the distribution. The Board will report the distribution to 
the Internal Revenue Service as income for the year in which it occurs. 
That portion of a loan that represents a uniformed services 
participant's contributions from pay subject to the combat zone tax 
exclusion will not be included in this calculation.
    (c) If a participant dies and a taxable distribution occurs in 
accordance with paragraph (a) of this section, the Board will notify the 
participant's estate of the amount and date of the distribution. Neither 
the estate nor any other person, including a beneficiary, may repay the 
loan of a deceased participant, nor can the funds be returned to the 
TSP.
    (d) If, because of Board or TSP record keeper error, a TSP loan is 
declared a taxable distribution under circumstances that make such a 
declaration inconsistent with this part, or inconsistent with other 
procedures established by the Board or TSP record keeper in connection 
with the TSP loan program, the taxable distribution will be reversed. 
The participant will

[[Page 291]]

be provided an opportunity to reinstate loan payments or repay in full 
the outstanding balance on the loan.

[68 FR 35515, June 13, 2003, as amended at 68 FR 74451, Dec. 23, 2003]



Sec. 1655.16  Reamortization.

    (a) A participant may request reamortization of a loan at any time 
to change the amount of the payments, unless the loan is in a default 
status.
    (b) Upon reamortization, the outstanding principal balance remains 
the same. Any accrued interest is paid off first before payments are 
applied to principal and current interest.
    (c) The interest rate on a reamortized loan will be the same as the 
interest rate on the original loan.
    (d) A participant may request reamortization by using the TSP Web 
site or by contacting a TSPSO participant service representative.
    (e) When a participant's pay cycle changes for any reason, he or she 
should request a reamortization to adjust the scheduled payment to an 
equivalent amount in the new pay cycle. If the new pay cycle results in 
fewer payments per year and the participant does not reamortize the 
loan, the loan may be declared a taxable distribution pursuant to Sec. 
1655.15(a)(3).



Sec. 1655.17  Prepayment.

    (a) A participant may repay a loan in full, without a penalty, at 
any time before the declaration of a taxable distribution under Sec. 
1655.15, unless the participant has separated from Government service 
and has submitted a signed statement that he or she has forfeited the 
right to repay the loan in full. Repayment in full means receipt by the 
TSP record keeper of a payment, by personal check or guaranteed funds 
made payable to the Thrift Savings Plan, of all principal and interest 
due on the loan.
    (b) If a participant returns a loan check to the TSP record keeper, 
it will be treated as a repayment; however, additional interest may be 
owed, which, if not paid, could result in a taxable distribution. The 
loan, even though repaid, will also be taken into account in determining 
the maximum amount available for future loans, in accordance with Sec. 
1655.6(b).
    (c) The amount outstanding on a loan can be obtained from the TSP 
Web site, the ThriftLine, or a TSPSO participant service representative, 
or by a written request to the TSP record keeper.



Sec. 1655.18  Spousal rights.

    (a) Spouse of CSRS participant. (1) Before a loan is disbursed to a 
CSRS participant, the TSP record keeper will send a notice to the 
participant's current spouse that the participant has applied for a 
loan.
    (2) A CSRS participant may obtain an exception to the requirement 
described in paragraph (a)(1) of this section if the participant 
establishes, to the satisfaction of the Executive Director, that the 
spouse's whereabouts are unknown as described in paragraph (c) of this 
section.
    (b) Spouse of FERS or uniformed services participant. (1) Before a 
loan agreement is approved for a FERS or uniformed services participant, 
the spouse must consent to the loan by signing the loan agreement.
    (2) A FERS or uniformed services participant may obtain an exception 
to the requirement described in paragraph (b)(1) of this section if the 
participant establishes, to the satisfaction of the Executive Director, 
that:
    (i) The spouse's whereabouts are unknown; or
    (ii) Exceptional circumstances prevent the participant from 
obtaining the spouse's consent.
    (c) Exception to spousal requirements. The procedures for obtaining 
an exception to the spousal requirements described in paragraphs (a)(1) 
and (b)(1) of this section are the same as the procedures described in 5 
CFR part 1650, subpart G.
    (d) Certification of truthfulness. (1) By signing the loan 
application and the loan agreement, electronically or on paper, the 
participant certifies, under penalty of perjury, that all information 
provided to the TSP during the loan process is true and complete, 
including statements concerning the participant's marital status, the 
spouse's address at the time the application is filed, or the current 
spouse's consent to the loan.

[[Page 292]]

    (2) If the Board receives a written allegation from the spouse that 
the participant may have misrepresented his or her marital status or the 
spouse's address (in the case of a CSRS participant), or that the 
signature of the spouse of a FERS participant was forged, the Board will 
submit the information or document in question to the spouse and request 
that he or she state in writing that the information is false or that 
the spouse's signature was forged. In the event of an alleged forgery, 
the Board will also request the spouse to provide at least three samples 
of his or her signature.
    (3) If the spouse affirms the allegation, in accordance with the 
procedure set forth in paragraph (d)(2) of this section, and the loan 
has been disbursed, the Board will give the participant an opportunity 
to repay the unpaid loan principal and interest within 60 days. If the 
loan is repaid during this period, the Board will not investigate the 
spouse's allegation.
    (4) Paragraph (d)(3) of this section will not apply if the 
participant has received a final divorce decree before the Thrift 
Savings Plan receives the funds.
    (5) If the unpaid loan principal and interest are not repaid to the 
Plan in full within the time period provided in paragraph (d)(3) of this 
section, the Board will conduct an investigation into the allegation. If 
the participant has received a final divorce decree before the Thrift 
Savings Plan receives the funds, the Board will begin its investigation 
immediately.
    (6) If, during its investigation, the Board finds evidence to 
suggest that the participant misrepresented his or her marital status or 
spouse's address (in the case of a CSRS participant), or submitted the 
loan agreement with a forged signature, the Board will refer the case to 
the Department of Justice for criminal prosecution and, if the 
participant is still employed, to the Inspector General or other 
appropriate authority in the participant's employing agency for 
administrative action.
    (7) Upon receipt of an allegation described in paragraph (d)(2) of 
this section, the participant's account will be frozen and no loan will 
be permitted until after:
    (i) Thirty (30) days have elapsed since the participant's spouse was 
sent a copy of the information or document in question, and the Board 
has received no written affirmation of the alleged false information or 
forgery (together with signature samples, if required);
    (ii) The loan is repaid pursuant to paragraph (d)(3) of this 
section;
    (iii) The Executive Director concludes that the Board's 
investigation did not yield persuasive evidence that supports the 
spouse's allegation;
    (iv) The Executive Director has been assured in writing by the 
spouse that any future request for a loan or withdrawal comports with 
the applicable requirement of notice or consent; or
    (v) The participant is divorced.

[68 FR 35515, June 13, 2003, as amended at 68 FR 74451, Dec. 23, 2003]



Sec. 1655.19  Effect of court order on loan.

    Upon receipt of a document that purports to be a qualifying 
retirement benefits court order, qualifying legal process relating to a 
participant's legal obligation to provide child support or to make 
alimony payments, or a qualifying child abuse order, the participant's 
TSP account will be frozen. After the account is frozen, no loan will be 
allowed until the account is unfrozen. The Board's procedures for 
processing court orders and legal processes are explained in 5 CFR part 
1653.



Sec. 1655.20  Residential loans.

    (a) A residential loan will be made only for the purchase or 
construction of the primary residence of the participant, or for the 
participant and his or her spouse, and for related purchase costs. The 
participant must actually bear all or part of the cost of the purchase. 
If the participant purchases a primary residence with someone other than 
his or her spouse, only the portion of the purchase costs that is borne 
by the participant will be considered in making the loan. A residential 
loan will not be made for the purpose of paying off an existing mortgage 
or otherwise providing financing for a primary residence purchased more 
than 2 years before the date of the loan application.
    (b) The participant's primary residence is his or her principal 
residence.

[[Page 293]]

A primary residence may include a house, a townhouse, a condominium, a 
share in a cooperative housing corporation, a mobile home, a boat, or a 
recreational vehicle; a primary residence does not include a second home 
or vacation home. A participant cannot have more than one primary 
residence.
    (c) Purchase of a primary residence means acquisition of the 
residence through the exchange of cash or other property or through the 
total construction of a new residence. A residential loan will not be 
made for a lease-to-buy option, unless the option to buy is being 
exercised. Construction of an addition to or the renovation of a 
residence or the purchase of land only does not constitute the purchase 
of a primary residence.
    (d) Related purchase costs are any costs that are incurred directly 
as a result of the purchase or construction of a residence and which can 
be added to the basis of the residence for Federal tax purposes. Points 
or loan origination fees charged for a loan, whether or not they are 
treated as part of the basis, are not considered a purchase cost. Real 
estate taxes cannot be included.
    (e) The documentation required for a loan under this section is as 
follows:
    (1) For all purchases, except for construction, a copy of a home 
purchase contract or a settlement sheet; or
    (2) For construction, a home construction contract. If a single home 
construction contract is unavailable, other contracts, building permits, 
receipts, assessments, or other documentation that demonstrates the 
construction of an entire primary residence and expenses in the amount 
of the loan may be accepted at the discretion of the Executive Director.
    (f) The documentation provided under this section must:
    (1) Be from a third party;
    (2) Show the participant as the purchaser or builder;
    (3) Show the purchase price or construction price;
    (4) Show the full address of the residence; and
    (5) Bear a date that is no more than 24 months preceding the 
expiration date of the loan agreement.



Sec. 1655.21  Loan fee.

    The TSP will charge a participant a $50.00 loan fee when it 
disburses the loan and will deduct the fee from the proceeds of the 
loan.

[69 FR 29852, May 26, 2004]



PART 1690_THRIFT SAVINGS PLAN--Table of Contents




                            Subpart A_General

Sec.
1690.1 Definitions.

                         Subpart B_Miscellaneous

1690.11 Plan year.
1690.12 Power of attorney.
1690.13 Guardianship and conservatorship orders.
1690.14 Checks made payable to the Thrift Savings Plan

    Authority: 5 U.S.C. 8474.

    Source: 68 FR 35519, June 13, 2003, unless otherwise noted.



                            Subpart A_General



Sec. 1690.1  Definitions.

    As used in this chapter:
    Account or individual account means the account established for a 
participant in the Thrift Savings Plan under 5 U.S.C. 8439(a).
    Account balance means the sum of the dollar balances for each source 
of contributions in each TSP Fund for an individual account. The dollar 
balance in each fund on a given day is the product of the total number 
of shares in that fund multiplied by the share price for the fund on 
that day.
    Agency automatic (1%) contributions means any contributions made 
under 5 U.S.C. 8432(c)(1) and (c)(3).
    Agency matching contributions means any contributions made under 5 
U.S.C. 8432(c)(2).
    Basic pay means basic pay as defined in 5 U.S.C. 8331(3). For CSRS 
and FERS employees, it is the rate of pay used in computing any amount 
the individual is otherwise required to contribute to the Civil Service 
Retirement and Disability Fund as a condition of participating in the 
Civil Service Retirement System or the Federal Employees' Retirement 
System, as the case may be.

[[Page 294]]

For members of the uniformed services, it is basic pay payable under 37 
U.S.C. 204 and compensation received under 37 U.S.C. chapter 206.
    Board means the Federal Retirement Thrift Investment Board 
established under 5 U.S.C. 8472.
    C Fund means the Common Stock Index Investment Fund established 
under 5 U.S.C. 8438(b)(1)(C).
    Catch-up contributions mean TSP contributions from taxable basic pay 
that are made by participants age 50 and over, which exceed either the 
elective deferral limit of 26 U.S.C. 402(g), or the maximum contribution 
percentage limit of 5 U.S.C. 8351(b) (for CSRS participants), 5 U.S.C. 
8432(a) (for FERS participants), or 5 U.S.C. 8440f(a) (for all other 
participants).
    Contribution allocation means the participant's apportionment of his 
or her future contributions, loan payments, and transfers or rollovers 
from eligible employer plans or traditional IRAs among the TSP Funds.
    Contribution election means a request by an employee to start 
contributing to the TSP, to change the amount of contributions made to 
the TSP each pay period, or to terminate contributions to the TSP.
    Court of competent jurisdiction means the court of any state, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, the 
Northern Mariana Islands, or the Virgin Islands, and any Indian court as 
defined by 25 U.S.C. 1301(3).
    CSRS means the Civil Service Retirement System established by 5 
U.S.C. chapter 83, subchapter III, or any equivalent Federal retirement 
system.
    CSRS employee or CSRS participant means any employee or participant 
covered by CSRS.
    Date of appointment means the effective date of an employee's 
accession as established by the current employing agency.
    Day means calendar day, unless otherwise stated.
    Eligible employer plan means a plan qualified under I.R.C. section 
401(a) (26 U.S.C. 401(a)), including a section 401(k) plan, profit-
sharing plan, defined benefit plan, stock bonus plan, and money purchase 
plan; an annuity plan described in I.R.C. section 403(a) (26 U.S.C. 
403(a)); an annuity contract described in I.R.C. section 403(b) (26 
U.S.C. 403(b)); and an eligible deferred compensation plan described in 
I.R.C. section 457(b) (26 U.S.C. 457(b)) which is maintained by an 
eligible employer described in I.R.C. section 457(e)(1)(A) (26 U.S.C. 
457(e)(1)(A)).
    Employer contributions means agency automatic (1%) contributions 
under 5 U.S.C. 8432(c)(1) or 8432(c)(3), and agency matching 
contributions under 5 U.S.C. 8432(c)(2) or 5 U.S.C. 8440e(e).
    Employing agency means the organization that employs an individual 
eligible to contribute to the TSP and that has authority to make 
personnel compensation decisions for the individual. It includes the 
uniformed services.
    Executive Director means the Executive Director of the Federal 
Retirement Thrift Investment Board under 5 U.S.C. 8474.
    F Fund means the Fixed Income Investment Fund established under 5 
U.S.C. 8438(b)(1)(B).
    FERS means the Federal Employees' Retirement System established by 5 
U.S.C. chapter 84 or any equivalent Federal retirement system.
    FERS employee or FERS participant means any employee or TSP 
participant covered by FERS.
    FERSA means the Federal Employees' Retirement System Act of 1986 
(FERSA), Public Law 99-335, 100 Stat. 514. The provisions of FERSA that 
govern the TSP are codified primarily in subchapters III and VII of 
Chapter 84 of Title 5, United States Code.
    Former spouse means (as defined at 5 U.S.C. 8401(12)) the former 
spouse of a TSP participant if the participant performed at least 18 
months of civilian service creditable under 5 U.S.C. 8411 as an employee 
or member, and if the participant and former spouse were married to one 
another for at least nine months.
    G Fund means the Government Securities Investment Fund established 
under 5 U.S.C. 8438(b)(1)(A).
    G Fund interest rate means the interest rate computed under 5 U.S.C. 
8438(e)(2).
    I Fund means the International Stock Index Investment Fund 
established under 5 U.S.C. 8438(b)(1)(E).

[[Page 295]]

    In-service withdrawal request means a properly completed withdrawal 
election for either an age-based in-service withdrawal or a financial 
hardship in-service withdrawal, on any form required by the TSP, 
together with the supporting documentation required by the application.
    Plan participant or participant means any person with an account in 
the Thrift Savings Plan or who would have an account but for an 
employing agency error.
    Post-employment withdrawal request means a properly completed 
withdrawal election on any form required by the TSP in order for a 
participant to elect a post-employment withdrawal of his or her account 
balance.
    Posting means the process of crediting or debiting transactions to 
an individual account.
    Posting date means the date on which a transaction is credited or 
debited to a participant's account.
    Regular employee contributions mean TSP contributions from taxable 
basic pay that are subject to the Internal Revenue Code limits on 
elective deferrals and contributions to qualified plans (26 U.S.C. 
402(g) and 415(c), respectively), and the maximum contribution 
percentage limits of 5 U.S.C. 8351(b), 5 U.S.C. 8432(a), or 5 U.S.C. 
8440f(a).
    S Fund means the Small Capitalization Stock Index Investment Fund 
established under 5 U.S.C. 8438(b)(1)(D).
    Separation from Government service means generally the cessation of 
employment with the Federal Government. For civilian employees it means 
termination of employment with the U.S. Postal Service or with any other 
employer from a position that is deemed to be Government employment for 
purposes of participating in the TSP, for 31 or more full calendar days. 
For uniformed services participants it means the discharge from active 
duty or the Ready Reserve or the transfer to inactive status or to a 
retired list as more fully described in 5 CFR 1604.2.
    Share means a portion of a TSP Fund. Transactions are posted to 
accounts in shares at the share price of the date the transaction is 
posted. The number of shares for a transaction is calculated by dividing 
the dollar amount of the transaction by the share price of the 
appropriate date for the fund in question. The number of shares is 
computed to four decimal places.
    Share price means the value of a share in a TSP Fund. The share 
price is calculated separately for each fund for each business day. The 
share price includes the cumulative net earnings or losses for each fund 
through the date the share price is calculated.
    Source of contributions means regular employee contributions, agency 
automatic (1%) contributions, or agency matching contributions. All 
amounts in a participant's account are attributed to one of these three 
sources. (Catch-up contributions, transfers, rollovers, and loan 
payments are included in the regular employee contribution source.)
    Spouse means the person to whom a TSP participant is married on the 
date he or she signs a form on which the TSP requests spousal 
information, including a spouse from whom the participant is legally 
separated, and a person with whom a participant is living in a 
relationship that constitutes a common law marriage in the jurisdiction 
in which they live. [Where a participant is seeking to reclaim an 
account that has been forfeited pursuant to 5 CFR 1650.16, spouse also 
means the person to whom the participant was married on the withdrawal 
deadline.]
    Tax-deferred balance means employee or employer contributions that 
would otherwise be includible in gross income if paid directly to the 
participant and earnings on those contributions.
    Tax-exempt balance means employee contributions that are made by 
uniformed services participants from pay subject to the combat zone tax 
exclusion. It does not include earnings on such contributions.
    Thrift Savings Fund or Fund means the Fund described in 5 U.S.C. 
8437.
    Thrift Savings Plan, TSP, or Plan means the Thrift Savings Plan 
established under subchapters III and VII of the Federal Employees' 
Retirement System Act of 1986, 5 U.S.C. 8351 and 8401-8479.
    ThriftLine means the automated voice response system by which TSP 
participants may, among other things, access their accounts by 
telephone.

[[Page 296]]

The ThriftLine can be reached at (877) 968-3778.
    Traditional IRA means an individual retirement account described in 
I.R.C. section 408(a) (26 U.S.C. 408(a)) and an individual retirement 
annuity described in I.R.C. section 408(b) (26 U.S.C. 408(b)) (other 
than an endowment contract).
    TSP Fund means an investment fund established pursuant to 5 U.S.C. 
8438 and an investment allocation fund established pursuant to 5 CFR 
Part 1601, subpart E.
    TSP record keeper means the entities the Board engages to perform 
record keeping services for the Thrift Savings Plan.
    TSP Web site means the Internet location maintained by the Board, 
which contains information about the TSP and by which TSP participants 
may, among other things, access their accounts by computer. The TSP Web 
site address is www.tsp.gov.
    Uniformed services means the Army, Navy, Air Force, Marine Corps, 
Coast Guard, Public Health Service, and the National Oceanic and 
Atmospheric Administration.
    Vested account balance means that portion of an individual's account 
which is not subject to forfeiture under 5 U.S.C. 8432(g).

[68 FR 35519, June 13, 2003, as amended at 70 FR 32218, June 1, 2005; 71 
FR 50320, Aug. 25, 2006]



                         Subpart B_Miscellaneous



Sec. 1690.11  Plan year.

    The Thrift Savings Plan's plan year is established on a calendar-
year basis for all purposes, except where another applicable provision 
of law requires that a fiscal year or other basis be used. As used in 
this section, the term ``calendar-year basis'' means a twelve-month 
period beginning on January 1 and ending on December 31 of the same 
year.



Sec. 1690.12  Power of attorney.

    (a) A participant or beneficiary can appoint an agent to conduct 
business with the TSP on his or her behalf by using a power of attorney 
(POA). The agent is called an attorney-in-fact. The TSP must approve a 
POA before the agent can conduct business with the TSP; however, the TSP 
will accept a document that was signed by the agent before the TSP 
approved the POA. The TSP will approve a POA if it meets the following 
conditions:
    (1) The POA must give the agent either general or specific powers, 
as explained in paragraphs (b) and (c) of this section;
    (2) A notary public or other official authorized by law to 
administer oaths or affirmations must authenticate, attest, acknowledge, 
or certify the participant's or beneficiary's signature on the POA; and
    (3) The POA must be submitted to the TSP recordkeeper for approval.
    (b) General power of attorney. A general POA gives an agent 
unlimited authority to conduct business with the TSP, including the 
authority to sign any TSP-related document. By way of example, a POA 
grants such authority by authorizing the agent to act on behalf of the 
participant or beneficiary with respect to ``all matters,'' ``personal 
property,'' ``Federal Government retirement benefits,'' or ``business 
transactions.''
    (c) Specific power of attorney. A specific power of attorney gives 
an agent the authority to conduct specific TSP transactions. A specific 
POA must expressly describe the authority it grants. By way of example, 
a specific POA may authorize an agent to ``obtain information about my 
TSP account'' or ``borrow or withdraw funds from my TSP account.''

[69 FR 29852, May 26, 2004]



Sec. 1690.13  Guardianship and conservatorship orders.

    (a) A court order can authorize an agent to conduct business with 
the TSP on behalf of an incapacitated participant or beneficiary. The 
agent is called a guardian or conservator and the incapacitated person 
is called a ward. The TSP must approve a court order before an agent can 
conduct business with the TSP; however, the TSP will accept a document 
that was signed by the agent before the TSP approved the court order. 
The TSP will approve a court order appointing an agent if the following 
conditions are met:

[[Page 297]]

    (1) A court of competent jurisdiction (as defined at 5 CFR 1690.1) 
must have issued the court order;
    (2) The court order must give the agent either general or specific 
powers, as explained in paragraphs (b) and (c) of this section;
    (3) The agent must satisfy the TSP that he or she meets any 
precondition specified in the court order, such as a bonding 
requirement;
    (4) The court order must be submitted to the TSP record keeper for 
approval.
    (b) General grant of authority. A general grant of authority gives a 
guardian or conservator unlimited authority to conduct business with the 
TSP, including the authority to sign any TSP-related document. By way of 
example, an order gives a general grant authority by appointing a 
``guardian of the ward's estate,'' by permitting a guardian to ``conduct 
business transactions'' for the ward, or by authorizing a guardian to 
care for the ward's ``personal property'' or ``Federal Government 
retirement benefits.''
    (c) Specific grant of authority. A specific grant of authority gives 
a guardian or conservator authority to conduct specific TSP 
transactions. Such an order must expressly describe the authority it 
grants. By way of example, an order may authorize an agent to ``obtain 
information about the ward's TSP account'' or ``borrow or withdraw funds 
from the ward's TSP account.''

[69 FR 29852, May 26, 2004]



Sec. 1690.14  Checks made payable to the Thrift Savings Plan.

    (a) Accord and satisfaction. The TSP does not agree to accept less 
than the total amount due by negotiating an instrument such as a check, 
share draft or money order with a restrictive legend on it (such as 
``payment in full'' or ``submitted in full satisfaction of claims''), or 
by negotiating an instrument that is conditionally tendered to the TSP 
with an offer of compromise.
    (b) TSP Payment Address. The TSP has established an address for the 
receipt of specified TSP payments. The TSP will not answer 
correspondence mailed to that payment address.

[70 FR 32218, June 1, 2005]

[[Page 299]]



                 CHAPTER VIII--OFFICE OF SPECIAL COUNSEL




  --------------------------------------------------------------------
Part                                                                Page
1800            Filing of complaints and allegations........         301
1810            Investigative authority of the Special 
                    Counsel.................................         303
1820            Public information..........................         303
1830            Privacy.....................................         307
1840            Subpoenas...................................         308
1850            Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Office of 
                    Special Counsel.........................         309

[[Page 301]]



PART 1800_FILING OF COMPLAINTS AND ALLEGATIONS--Table of Contents




Sec.
1800.1 Filing complaints of prohibited personnel practices or other 
          prohibited activities.
1800.2 Filing disclosures of information.
1800.3 Advisory opinions.

    Authority: 5 U.S.C. 1212(e).



Sec. 1800.1  Filing complaints of prohibited personnel practices or other 

prohibited activities.

    (a) Prohibited personnel practices. The Office of Special Counsel 
(OSC) has investigative jurisdiction over the following prohibited 
personnel practices committed against current or former Federal 
employees and applicants for Federal employment:
    (1) Discrimination, including discrimination based on marital status 
or political affiliation (see Sec. 1810.1 of this chapter for 
information about OSC's deferral policy);
    (2) Soliciting or considering improper recommendations or statements 
about individuals requesting, or under consideration for, personnel 
actions;
    (3) Coercing political activity, or engaging in reprisal for refusal 
to engage in political activity;
    (4) Deceiving or obstructing anyone with respect to competition for 
employment;
    (5) Influencing anyone to withdraw from competition to improve or 
injure the employment prospects of another;
    (6) Granting an unauthorized preference or advantage to improve or 
injure the employment prospects of another;
    (7) Nepotism;
    (8) Reprisal for whistleblowing (whistleblowing is generally defined 
as the disclosure of information about a Federal agency by an employee 
or applicant who reasonably believes that the information shows a 
violation of any law, rule, or regulation; gross mismanagement; gross 
waste of funds; abuse of authority; or a substantial and specific danger 
to public health or safety);
    (9) Reprisal for:
    (i) Exercising certain appeal rights;
    (ii) Providing testimony or other assistance to persons exercising 
appeal rights;
    (iii) Cooperating with the Special Counsel or an Inspector General; 
or
    (iv) Refusing to obey an order that would require the violation of 
law;
    (10) Discrimination based on personal conduct not adverse to job 
performance;
    (11) Violation of a veterans' preference requirement; and
    (12) Taking or failing to take a personnel action in violation of 
any law, rule, or regulation implementing or directly concerning merit 
system principles at 5 U.S.C. 2301(b).
    (b) Other prohibited activities. OSC also has investigative 
jurisdiction over allegations of the following prohibited activities:
    (1) Violation of the Federal Hatch Act at title 5 of the U.S. Code, 
chapter 73, subchapter III;
    (2) Violation of the state and local Hatch Act at title 5 of the 
U.S. Code, chapter 15;
    (3) Arbitrary and capricious withholding of information prohibited 
under the Freedom of Information Act at 5 U.S.C. 552 (except for certain 
foreign and counterintelligence information);
    (4) Activities prohibited by any civil service law, rule, or 
regulation, including any activity relating to political intrusion in 
personnel decisionmaking;
    (5) Involvement by any employee in any prohibited discrimination 
found by any court or appropriate administrative authority to have 
occurred in the course of any personnel action (unless the Special 
Counsel determines that the allegation may be resolved more 
appropriately under an administrative appeals procedure); and
    (6) Violation of uniformed services employment and reemployment 
rights under 38 U.S.C. 4301, et seq.
    (c) Procedures for filing complaints alleging prohibited personnel 
practices or other prohibited activities (other than the Hatch Act). (1) 
Current or former Federal employees, and applicants for Federal 
employment, may file a complaint with OSC alleging one or more 
prohibited personnel practices, or other prohibited activities within 
OSC's investigative jurisdiction. Form OSC-11

[[Page 302]]

(``Complaint of Possible Prohibited Personnel Practice or Other 
Prohibited Activity'') must be used to file all such complaints (except 
those limited to an allegation or allegations of a Hatch Act violation - 
see paragraph (d) of this section for information on filing Hatch Act 
complaints).
    (2) Part 2 of Form OSC-11 must be completed in connection with 
allegations of reprisal for whistleblowing, including identification of:
    (i) Each disclosure involved;
    (ii) The date of each disclosure;
    (iii) The person to whom each disclosure was made; and
    (iv) The type and date of any personnel action that occurred because 
of each disclosure.
    (3) Except for complaints limited to alleged violation(s) of the 
Hatch Act, OSC will not process a complaint filed in any format other 
than a completed Form OSC-11. If a filer does not use Form OSC-11 to 
submit a complaint, OSC will provide the filer with information about 
the form. The complaint will be considered to be filed on the date on 
which OSC receives a completed Form OSC-11.
    (4) Form OSC-11 is available:
    (i) By writing to OSC, at: Office of Special Counsel, Complaints 
Examining Unit, 1730 M Street NW., Suite 218, Washington, DC 20036-4505;
    (ii) By calling OSC, at: (800) 872-9855 (toll-free), or (202) 653-
7188 (in the Washington, DC area); or
    (iii) Online, at: http://www.osc.gov (to print out and complete on 
paper, or to complete online).
    (5) A complainant can file a completed Form OSC-11 with OSC by any 
of the following methods:
    (i) By mail, to: Office of Special Counsel, Complaints Examining 
Unit, 1730 M Street NW., Suite 218, Washington, DC 20036-4505;
    (ii) By fax, to: (202) 653-5151; or
    (iii) Electronically, at: http://www.osc.gov.
    (d) Procedures for filing complaints alleging violation of the Hatch 
Act. (1) Complaints alleging a violation of the Hatch Act may be 
submitted in any written form, but should include:
    (i) The complainant's name, mailing address, telephone number, and a 
time when OSC can contact that person about his or her complaint (unless 
the matter is submitted anonymously);
    (ii) The department or agency, location, and organizational unit 
complained of; and
    (iii) A concise description of the actions complained about, names 
and positions of employees who took the actions, if known to the 
complainant, and dates of the actions, preferably in chronological 
order, together with any documentary evidence that the complainant can 
provide.
    (2) A written Hatch Act complaint can be filed with OSC by any of 
the methods listed in paragraph (c)(5)(i)-(iii) of this section.

[68 FR 66695, Nov. 28, 2003]



Sec. 1800.2  Filing disclosures of information.

    (a) General. OSC is authorized by law (at 5 U.S.C. 1213) to provide 
an independent and secure channel for use by current or former Federal 
employees and applicants for Federal employment in disclosing 
information that they reasonably believe shows wrongdoing by a Federal 
agency. OSC must determine whether there is a substantial likelihood 
that the information discloses a violation of any law, rule, or 
regulation; gross mismanagement; gross waste of funds; abuse of 
authority; or a substantial and specific danger to public health or 
safety. If it does, the law requires OSC to refer the information to the 
agency head involved for investigation and a written report on the 
findings to the Special Counsel. The law does not authorize OSC to 
investigate the subject of a disclosure.
    (b) Procedures for filing disclosures. Current or former Federal 
employees, and applicants for Federal employment, may file a disclosure 
of the type of information described in paragraph (a) of this section 
with OSC. Such disclosures must be filed in writing (including 
electronically - see paragraph (b)(3)(iii) of this section).
    (1) Filers are encouraged to use Form OSC-12 (``Disclosure of 
Information'') to file a disclosure of the type of information described 
in paragraph (a) of

[[Page 303]]

this section with OSC. This form provides more information about OSC 
jurisdiction, and procedures for processing whistleblower disclosures. 
Form OSC-12 is available:
    (i) By writing to OSC, at: Office of Special Counsel, Disclosure 
Unit, 1730 M Street NW., Suite 218, Washington, DC 20036-4505;
    (ii) By calling OSC, at: (800) 572-2249 (toll-free), or (202) 653-
9125 (in the Washington, DC area); or
    (iii) Online, at: http://www.osc.gov (to print out and complete on 
paper, or to complete online).
    (2) Filers may use another written format to submit a disclosure to 
OSC, but the submission should include:
    (i) The name, mailing address, and telephone number(s) of the 
person(s) making the disclosure(s), and a time when OSC can contact that 
person about his or her disclosure;
    (ii) The department or agency, location and organizational unit 
complained of; and
    (iii) A statement as to whether the filer consents to disclosure of 
his or her identity by OSC to the agency involved, in connection with 
any OSC referral to that agency.
    (3) A disclosure can be filed in writing with OSC by any of the 
following methods:
    (i) By mail, to: Office of Special Counsel, Disclosure Unit, 1730 M 
Street NW., Suite 218, Washington, DC 20036-4505;
    (ii) By fax, to: (202) 653-5151; or
    (iii) Electronically, at: http://www.osc.gov.

[68 FR 66696, Nov. 28, 2003]



Sec. 1800.3  Advisory opinions.

    The Special Counsel is authorized to issue advisory opinions only 
about political activity of state or local officers and employees (under 
title 5 of the United States Code, at chapter 15), and political 
activity of Federal officers and employees (under title 5 of the United 
States Code, at chapter 73, subchapter III). A person can seek an 
advisory opinion from OSC by any of the following methods:
    (a) By phone, at: (800) 854-2824 (toll-free), or (202) 653-7143 (in 
the Washington, DC area);
    (b) By mail, to: Office of Special Counsel, Hatch Act Unit, 1730 M 
Street NW., Suite 218, Washington, DC 20036-4505;
    (c) By fax, to: (202) 653-5151; or
    (d) By e-mail, to: [email protected].

[68 FR 66697, Nov. 28, 2003]



PART 1810_INVESTIGATIVE AUTHORITY OF THE SPECIAL COUNSEL--Table of Contents




    Authority: 5 U.S.C. 1212(e).



Sec. 1810.1  Investigative policy in discrimination complaints.

    The Special Counsel is authorized to investigate allegations of 
discrimination prohibited by law, as defined in 5 U.S.C. 2302(b)(1). 
Since procedures for investigating discrimination complaints have 
already been established in the agencies and the Equal Employment 
Opportunity Commission, the Special Counsel will normally avoid 
duplicating those procedures and will defer to those procedures rather 
than initiating an independent investigation.

[54 FR 47342, Nov. 14, 1989]



PART 1820_PUBLIC INFORMATION--Table of Contents




Sec.
1820.1 Public list.
1820.2 Procedures for obtaining records under the Freedom of Information 
          Act.
1820.3 Categories of requesters under the Freedom of Information Act.
1820.4 Free or partially free search time and partially free copying.
1820.5 Waiver or reduction of fees.
1820.6 Fees to be charged.
1820.7 Payments and collections.
1820.8 Appeals.
1820.9 Disclosures by authorized officials.

    Authority: 5 U.S.C. 552(a)(3), 552(a)(4), 1212(g), 1219.

    Source: 54 FR 47342, Nov. 14, 1989, unless otherwise noted.



Sec. 1820.1  Public list.

    (a) Pursuant to 5 U.S.C. 1219, the Special Counsel maintains and 
makes available to the public a list of:
    (1) Noncriminal matters referred to heads of agencies under 5 U.S.C. 
1213 (c)

[[Page 304]]

and (g)(1), and reports received as a result of such referrals;
    (2) Matters referred by the Special Counsel to heads of agencies 
under 5 U.S.C. 1215(c)(2); and
    (3) Matters referred to heads of agencies under 5 U.S.C. 1214(e), 
together with certifications from the heads of agencies under such 
subsection.
    (b) The list is available to the public between 8:30 a.m. and 5 p.m. 
weekdays (except legal holidays) in the Office of Special Counsel, 1730 
M Street NW., Suite 201, Washington, DC 20036-4505.

[55 FR 47342, Nov. 14, 1989, as amended at 55 FR 47839, Nov. 16, 1990; 
59 FR 64843, Dec. 16, 1994; 65 FR 81325, Dec. 26, 2000]



Sec. 1820.2  Procedures for obtaining records under the Freedom of 

Information Act.

    Requests for records shall be made in writing. Requests should be 
addressed to the Office of Special Counsel, 1730 M Street NW., Suite 
201, Washington, DC 20036-4505. Requests must be clearly and prominently 
marked ``Freedom of Information Act Request'' on both the envelope and 
the letter.

[54 FR 47342, Nov. 14, 1989, as amended at 59 FR 64843, Dec. 16, 1994; 
65 FR 81325, Dec. 26, 2000]



Sec. 1820.3  Categories of requesters under the Freedom of Information Act.

    There are four categories of requesters:
    (a) Commercial use requesters. These requesters seek information for 
themselves or on behalf of someone else for a use or purpose that 
furthers commercial, trade, or profit interests of the requester or the 
person on whose behalf the request is made. A requester will not be 
presumed to be a ``commercial use requester'' merely by submitting a 
request on corporate letterhead without further explanation of the use 
to which he plans to put the requested information. Similarly, a request 
submitted on the letterhead of a nonprofit organization without further 
explanation will not be presumed to be for a noncommercial purpose. The 
Office of Special Counsel will seek clarification from the requester 
where there is a reasonable doubt as to the intended use of the 
information.
    (b) Educational and noncommercial scientific institution requesters. 
(1) An ``educational institution'' requester is associated with a 
preschool, a public or private elementary or secondary school, an 
institution of undergraduate or graduate higher education, or an 
institution of vocational or professional education, that operates a 
program or programs of scholarly research, and seeks the information for 
a scholarly or scientific research goal of the institution, rather than 
for an individual goal.
    (2) A ``noncommercial scientific institution'' requester is 
associated with an institution that is not operated on a ``commercial'' 
basis (as that term is defined by paragraph (a) of this section), and 
which is operated solely for the purpose of conducting scientific 
research, the results of which are not intended to promote any 
particular product or industry.
    (c) News media requesters. These requesters actively gather news for 
entities that are organized and operated to publish or broadcast news to 
the public. Freelance journalists may be news media requesters if they 
can demonstrate a solid basis for expecting publication through a news 
organization (such as by producing a publication contract or citing 
their past publication records), even though not actually employed by 
it. ``News'' means information about current events or information that 
would be of current interest to the public. News media ``entities'' 
include, but are not limited to, television or radio stations 
broadcasting to the public at large, and publishers of periodicals (but 
only in those instances when they can qualify as disseminators of 
``news'') who make their products available for purchase or subscription 
by the general public.
    (d) All other requesters.



Sec. 1820.4  Free or partially free search time and partially free copying.

    (a) Free search time and partially free copying. Educational and 
noncommercial scientific institution requesters and news media 
requesters who are requesting records for noncommercial use are entitled 
to free copying for the first 100 pages and free search time.

[[Page 305]]

    (b) Partially free search time and partially free copying. 
Requesters who are not commercial use requesters, educational or 
noncommercial scientific institution requesters, or news media 
requesters are ``all other requesters'', and are entitled to two hours 
of free search time and free copying for the first 100 pages. Requests 
from record subjects for records about themselves filed in a system of 
records will continue to be treated under the fee provisions of the 
Privacy Act, which permits the assessment of fees only for copying.



Sec. 1820.5  Waiver or reduction of fees.

    (a) The Associate Special Counsel for Investigation, the Deputy 
Associate Special Counsel for Prosecution, the Associate Special Counsel 
for Prosecution, the Deputy Special Counsel, and the Special Counsel may 
authorize waiver or reduction of fees that could otherwise be assessed 
if disclosure of the information requested:
    (1) Is in the public interest because it is likely to contribute 
significantly to public understanding of the operations or activities of 
the Government, and
    (2) Is not primarily in the commercial interest of the requester.
    (b) Satisfaction of paragraph (a)(1) of this section will be 
determined by all of the following:
    (1) Whether the subject of the requested records concerns ``the 
operations or activities of the Government.'' The requested records 
concern identifiable operations of activities of the Government, and the 
connection between the records and the operations or activities is 
direct and clear, not remote or attenuated;
    (2) Whether disclosure is ``likely to contribute'' to an 
understanding of Government operations or activities. An analysis of the 
substantive content of the releasable portions of the requested records 
reveals meaningfully informative information on the operations or 
activities of the Government that is not already in the public domain in 
duplicative or substantially identical form;
    (3) Whether disclosure will contribute to ``public understanding.'' 
Considering the identity of the requester and his qualifications to make 
use of the information, disclosure will contribute to the understanding 
of the public at large, and not to the individual understanding of the 
requester or a narrow segment of interested persons; and
    (4) Whether the disclosure is likely to contribute ``significantly'' 
to public understanding of Government operations or activities. By an 
objective standard, the disclosure is likely to enhance the general 
public's understanding of the subject matter in question more than 
minimally.
    (c) Satisfaction of paragraph (a)(2) of this section will be 
determined by both of the following:
    (1) Whether the requester has a commercial interest to be furthered 
by the disclosure. The requester does not seek to further a commercial, 
trade, or profit interest, as those terms are commonly understood; and
    (2) Whether the magnitude of the identified commercial interest of 
the requester is sufficiently large, compared to the public interest in 
disclosure, that disclosure is ``primarily in the commercial interest of 
the requester.'' If the requester has a commercial interest, that 
interest is not greater than the public interest to be served by 
disclosure of the requested records.



Sec. 1820.6  Fees to be charged.

    (a) Requests for records are subject to the following fees:
    (1) Commercial use requesters. For search, review, and copying: 
Photocopies per page, $0.25. Manual record search, $2.50 per quarter 
hour if conducted by a clerical employee; $5.00 per quarter hour if 
conducted by a professional or managerial employee. Search fees may be 
assessed even if the records in question are not located or if the 
records located are determined to be exempt from disclosure.
    (2) Educational and noncommercial scientific institution requesters, 
news media requesters. For copying only: Photocopies per page, $0.25, 
excluding the first 100 pages.
    (3) All other requesters. For search and copying only: Photocopies 
per page (excluding the first 100 pages), $0.25. Manual record search 
(excluding the first two hours), $2.50 per quarter hour if conducted by 
a clerical employee; $5.00

[[Page 306]]

per quarter hour if conducted by a professional or managerial employee.
    (b) Method of search. (1) Any ``search'', which includes all time 
spent looking for material that is responsive to a request, will be done 
in the most efficient and least expensive manner in order to minimize 
costs for both the agency and the requester.
    (2) For researches made by computer, costs will be assessed when the 
hourly cost of operating the central processing unit and the operator's 
hourly salary plus 16 percent equals the equivalent dollar amount of two 
hours of salary of the person performing the search.
    (c) Review charges. Only commercial use requesters will be charged 
for time spent reviewing records to determine whether they are exempt 
from mandatory disclosure. These charges will be assessed only for 
initial review (i.e., the review undertaken when first analyzing the 
applicability of a specific exemption to a particular record or portion 
of record), and not for review at the administrative appeal level of an 
exemption already applied. However, charges will be assessed for a 
second review of records or portions of records withheld in full under 
an exemption which is subsequently determined not to apply in order to 
determine the applicability of other exemptions not previously 
considered. Review charges shall not include costs incurred in resolving 
issues of law or policy that may be raised in the course of processing a 
request.
    (d) Copying. A ``page'' of copying refers to a paper copy of 
standard size, normally 8\1/2\x11 or 
11xx14. However, copies may also take the form of microform, 
audio-visual materials, or machine readable documentation (e.g., 
magnetic tape or disk), among others.
    (e) Nonassessment of fees. No fees will be assessed to any 
requester, including commercial use requesters, if the cost of routine 
collection and processing of the fee would be equal to or greater than 
the fee itself. To make this determination, the OSC will consider the 
administrative costs of receiving and recording a requester's remittance 
and processing the fee for deposit.
    (f) Other charges. Complying with requests for special services, 
such as certification of records as true copies and sending records by 
special methods (e.g., express mail) is entirely at the discretion of 
the Office. Since neither the Freedom of Information Act nor its fee 
structure covers these kinds of services, the OSC will assess fees to 
recover the full costs of providing these services should the Office 
elect to provide them.
    (g) Aggregating requests. If the Office of Special Counsel 
reasonably believes that a requester or a group of requesters acting in 
concert is filing a series of requests for the purpose of evading the 
assessment of fees, the OSC may aggregate the requests and assess fees 
accordingly. One element to be considered in determining reasonable 
belief is the time period within which the requests are filed. Multiple 
requests of this type filed within a 30-day period may be presumed to 
have been made to avoid fees. In no case will the Office aggregate 
requests on unrelated subjects from one requester.
    (h) Advance notice of fees. If it is likely that fees will exceed 
$25, the requester will first be notified of the estimated amount, 
unless the requester has indicated in advance his willingness to pay 
fees as high as those anticipated. The notice will offer the requester 
the opportunity to confer with personnel of the Office of the Special 
Counsel with the object of reformulating the request to meet his or her 
needs at a lower cost.



Sec. 1820.7  Payments and collections.

    (a) Payments. Payment of fees shall be made by check or money order 
payable to the United States Treasury.
    (b) Advance payments. A requester is not required to make an advance 
payment unless:
    (1) The OSC estimates or determines that the requester may be 
required to pay fees in excess of $250, in which case the requester will 
be notified of the estimated cost. The requester must then furnish 
satisfactory assurance of full payment if the requester has a history of 
prompt payment of Freedom of Information Act fees. If the requester has 
no history of payment, then the requester may be required to furnish an 
advance payment up to the full estimated cost; or

[[Page 307]]

    (2) The requester has previously failed to pay a fee assessed in a 
timely fashion (i.e., within 30 days of the date of billing), in which 
case the requester may be required to--
    (i) Pay the full amount owed plus any applicable interest as 
provided in paragraph (d) of this section, or prove payment of the 
alleged amount in arrears, and
    (ii) Make an advance payment of the full amount of the estimated 
cost before a new or pending request will be processed.
    (c) Effect of nonpayment. When the OSC acts under either paragraph 
(b)(2)(i) or (b)(2)(ii) of this section, the administrative time limits 
prescribed in 5 U.S.C. 552(a)(6) of the Freedom of Information Act will 
begin only after the fee payments described above have been received.
    (d) Interest charges. Interest may be charged to any requester who 
fails to pay fees assessed within 30 days of the date of billing. 
Interest will be assessed on the 31st day following the day on which the 
bill for fees was sent, and will be calculated at the rate prescribed in 
31 U.S.C. 3717. Receipt of fees, even if not processed, will stay the 
accrual of interest.
    (e) Collections. If the OSC deems it appropriate in order to 
encourage repayment of fees assessed in accordance with these 
regulations, the OSC will use the procedures authorized by the Debt 
Collection Act of 1982 (Public Law No. 97-365), including disclosure to 
consumer reporting agencies and use of collection agencies.



Sec. 1820.8  Appeals.

    Any denial, in whole or in part, of a request for records of the 
Office of Special Counsel shall advise the requester of his right to 
appeal the denial to the Special Counsel or the Special Counsel's 
designee. The requester shall submit his appeal in writing within 30 
days of the denial. The appeal shall be addressed to the Special Counsel 
at 1730 M Street NW., Suite 201, Washington, DC 20036-4505. When a 
request is denied on appeal, the requester shall be advised of his right 
to seek judicial review.

[54 FR 47342, Nov. 14, 1989, as amended at 59 FR 64843, Dec. 16, 1994; 
65 FR 81325, Dec. 26, 2000]



Sec. 1820.9  Disclosures by authorized officials.

    No employee or former employee of the Office of Special Counsel 
shall, in response to a demand of a court or other authority, produce or 
disclose any information or records acquired as part of the performance 
of his official duties or because of his official status without the 
prior approval of the Special Counsel or the Special Counsel's duly 
authorized designee.



PART 1830_PRIVACY--Table of Contents




Sec.
1830.1 Access to records and identification.
1830.2 Medical records.
1830.3 Requests for amendment of records.
1830.4 Appeals.
1830.5 Exemptions.

    Authority: 5 U.S.C. 552a(f), 1212(g).

    Source: 54 FR 47344, Nov. 14, 1989, unless otherwise noted.



Sec. 1830.1  Access to records and identification.

    (a) Individuals may request access to records pertaining to them 
that are maintained as described in the Privacy Act, 5 U.S.C. 552a, by 
addressing an inquiry to the Office of Special Counsel either by mail or 
by appearing in person at the Office of Special Counsel at 1730 M 
Street, NW., Suite 201, Washington, DC 20036-4505, during business hours 
on a regular business day. Requests in writing should be clearly and 
prominently marked ``Privacy Act Request.'' Requests for copies of 
records shall be subject to duplication fees set forth in Sec. 1820.6 
of this chapter.
    (b) Individuals making a request in person shall be required to 
present satisfactory proof of identity, preferably a document bearing 
the individual's photograph. Requests by mail or submitted other than in 
person should contain sufficient information to enable the Office of 
Special Counsel to determine that the requester and the subject of the 
record are one and the

[[Page 308]]

same. To assist in this process, individuals should submit their names 
and addresses, dates and places of birth, social security number, and 
any other known identifying information such as an agency file number or 
identification number and a description of the circumstances under which 
the records were compiled.

[54 FR 47344, Nov. 14, 1989, as amended at 59 FR 64844, Dec. 16, 1994; 
65 FR 81325, Dec. 26, 2000]



Sec. 1830.2  Medical records.

    When a request for access involves medical records that are not 
otherwise exempt from disclosure, the requesting individual may be 
advised, if it is deemed necessary, that the records will be provided 
only to a physician designated in writing by the individual. Upon 
receipt of the designation, the physician will be permitted to review 
the records or to receive copies by mail upon proper verification of 
identity.



Sec. 1830.3  Requests for amendment of records.

    Individuals may request amendment of records pertaining to them that 
are subject to this part. Requests should be addressed, in writing, to 
the Special Counsel at 1730 M Street, NW., Suite 201, Washington, DC 
20036-4505, and be clearly and prominently marked ``Privacy Act 
Request.'' Requests for amendment should include identification of 
records together with a statement of the basis for the requested 
amendment and all available supporting documents and materials. Requests 
for amendment shall be acknowledged not later than 10 days (excluding 
Saturdays, Sundays, and legal holidays) after receipt and a 
determination on the request shall be made promptly.

[54 FR 47344, Nov. 14, 1989, as amended at 59 FR 64844, Dec. 16, 1994; 
65 FR 81325, Dec. 26, 2000]



Sec. 1830.4  Appeals.

    When a request for access or amendment has been denied, in whole or 
in part, the requester shall be advised of his right to appeal to the 
Special Counsel or the Special Counsel's designee. The requester shall 
submit his appeal in writing within 30 days of the denial. A final 
determination on the appeal shall be issued within 30 days (excluding 
Saturdays, Sundays, and legal holidays) after receipt. Where unusual 
circumstances prevent a determination within that time period, the time 
for a determination may be extended an additional 30 working days.



Sec. 1830.5  Exemptions.

    The Office of Special Counsel will claim exemptions from the 
provisions of the Privacy Act at subsections (c)(3) and (d) as permitted 
by subsection (k) for records subject to the Act that fall within the 
category of investigatory material described in paragraphs (2) and (5) 
and testing or examination material described in paragraph (6) of that 
subsection. The exemptions for investigatory material are necessary to 
prevent frustration of inquiries into allegations of prohibited 
personnel practices or political activity and to protect identities of 
confidential sources of information. The exemption for testing or 
examination material is necessary to prevent the disclosure of 
information which would potentially give an individual an unfair 
competitive advantage or diminish the utility of established examination 
procedures. The Office of Special Counsel also reserves the right to 
assert exemptions for records received from another agency that could be 
properly claimed by that agency in responding to a request and the 
Office of Special Counsel may refuse access to information compiled in 
reasonable anticipation of a civil action or proceeding.



PART 1840_SUBPOENAS--Table of Contents




    Authority: 5 U.S.C. 1212(e).



Sec. 1840.1  Service of subpoenas by mail.

    In addition to all other methods of authorized service, an Office of 
Special Counsel subpoena may be served by mailing a copy to the person 
at his or her residence or place of business by certified or registered 
mail.

[54 FR 47345, Nov. 14, 1989]

[[Page 309]]



PART 1850_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN 

PROGRAMS OR ACTIVITIES CONDUCTED BY THE OFFICE OF SPECIAL COUNSEL--Table of 

Contents




Sec.
1850.101 Purpose.
1850.102 Application.
1850.103 Definitions.
1850.104-1850.109 [Reserved]
1850.110 Self-evaluation.
1850.111 Notice.
1850.112-1850.129 [Reserved]
1850.130 General prohibitions against discrimination.
1850.131-1850.139 [Reserved]
1850.140 Employment.
1850.141-1850.148 [Reserved]
1850.149 Program accessibility: Discrimination prohibited.
1850.150 Program accessibility: Existing facilities.
1850.151 Program accessibility: New construction and alterations.
1850.152-1850.159 [Reserved]
1850.160 Communications.
1850.161-1850.169 [Reserved]
1850.170 Compliance procedures.
1850.171-1850.999 [Reserved]

    Authority: 29 U.S.C. 794.

    Source: 53 FR 25881, 25885, July 8, 1988, unless otherwise noted. 
Redesignated at 54 FR 47345, Nov. 14, 1989.



Sec. 1850.101  Purpose.

    The purpose of this regulation is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit discrimination on the basis of handicap in programs 
or activities conducted by Executive agencies or the United States 
Postal Service.



Sec. 1850.102  Application.

    This regulation (Sec. Sec. 1850.101-1850.170) applies to all 
programs or activities conducted by the agency, except for programs or 
activities conducted outside the United States that do not involve 
individuals with handicaps in the United States.



Sec. 1850.103  Definitions.

    For purposes of this regulation, the term--
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TDD's), interpreters, notetakers, written 
materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Historic preservation programs means programs conducted by the 
agency that have preservation of historic properties as a primary 
purpose.
    Historic properties means those properties that are listed or 
eligible for listing in the National Register of Historic Places or 
properties designated as historic under a statute of the appropriate 
State or local government body.
    Individual with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment.
    As used in this definition, the phrase:
    (1) Physical or mental impairment includes--

[[Page 310]]

    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term physical or mental impairment 
includes, but is not limited to, such diseases and conditions as 
orthopedic, visual, speech, and hearing impairments, cerebral palsy, 
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, 
diabetes, mental retardation, emotional illness, and drug addiction and 
alcoholism.
    (2) Major life activities includes functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Qualified individual with handicaps means--
    (1) With respect to preschool, elementary, or secondary education 
services provided by the agency, an individual with handicaps who is a 
member of a class of persons otherwise entitled by statute, regulation, 
or agency policy to receive education services from the agency;
    (2) With respect to any other agency program or activity under which 
a person is required to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
agency can demonstrate would result in a fundamental alteration in its 
nature;
    (3) With respect to any other program or activity, an individual 
with handicaps who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (4) Qualified handicapped person as that term is defined for 
purposes of employment in 29 CFR 1613.702(f), which is made applicable 
to this regulation by Sec. 1850.140.
    Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the 
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617); 
the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); and the 
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810). 
As used in this regulation, section 504 applies only to programs or 
activities conducted by Executive agencies and not to federally assisted 
programs.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.



Sec. Sec. 1850.104-1850.109  [Reserved]



Sec. 1850.110  Self-evaluation.

    (a) The agency shall, by September 6, 1989, evaluate its current 
policies and practices, and the effects thereof, that do not or may not 
meet the requirements of this regulation and, to the extent modification 
of any such policies and practices is required, the agency shall proceed 
to make the necessary modifications.

[[Page 311]]

    (b) The agency shall provide an opportunity to interested persons, 
including individuals with handicaps or organizations representing 
individuals with handicaps, to participate in the self-evaluation 
process by submitting comments (both oral and written).
    (c) The agency shall, for at least three years following completion 
of the self-evaluation, maintain on file and make available for public 
inspection:
    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made.



Sec. 1850.111  Notice.

    The agency shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this regulation and its 
applicability to the programs or activities conducted by the agency, and 
make such information available to them in such manner as the head of 
the agency finds necessary to apprise such persons of the protections 
against discrimination assured them by section 504 and this regulation.



Sec. Sec. 1850.112-1850.129  [Reserved]



Sec. 1850.130  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid, 
benefit, or service that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with handicaps or to any class of individuals with handicaps 
than is provided to others unless such action is necessary to provide 
qualified individuals with handicaps with aid, benefits, or services 
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards;
    (vi) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) The agency may not deny a qualified individual with handicaps 
the opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination 
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with handicaps.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits 
of, or otherwise subject them to discrimination under any program or 
activity conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
handicaps.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with handicaps to 
discrimination on the basis of handicap.

[[Page 312]]

    (6) The agency may not administer a licensing or certification 
program in a manner that subjects qualified individuals with handicaps 
to discrimination on the basis of handicap, nor may the agency establish 
requirements for the programs or activities of licensees or certified 
entities that subject qualified individuals with handicaps to 
discrimination on the basis of handicap. However, the programs or 
activities of entities that are licensed or certified by the agency are 
not, themselves, covered by this regulation.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to individuals 
with handicaps or the exclusion of a specific class of individuals with 
handicaps from a program limited by Federal statute or Executive order 
to a different class of individuals with handicaps is not prohibited by 
this regulation.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with handicaps.



Sec. Sec. 1850.131-1850.139  [Reserved]



Sec. 1850.140  Employment.

    No qualified individual with handicaps shall, on the basis of 
handicap, be subject to discrimination in employment under any program 
or activity conducted by the agency. The definitions, requirements, and 
procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791), as established by the Equal Employment Opportunity Commission in 
29 CFR part 1613, shall apply to employment in federally conducted 
programs or activities.



Sec. Sec. 1850.141-1850.148  [Reserved]



Sec. 1850.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 1850.150, no qualified 
individual with handicaps shall, because the agency's facilities are 
inaccessible to or unusable by individuals with handicaps, be denied the 
benefits of, be excluded from participation in, or otherwise be 
subjected to discrimination under any program or activity conducted by 
the agency.



Sec. 1850.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with handicaps. This paragraph 
does not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with handicaps;
    (2) In the case of historic preservation programs, require the 
agency to take any action that would result in a substantial impairment 
of significant historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec. 1850.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that would not result in 
such an alteration or such burdens but would nevertheless ensure that 
individuals with handicaps receive the benefits and services of the 
program or activity.
    (b) Methods--(1) General. The agency may comply with the 
requirements of this section through such means as redesign of 
equipment, reassignment of services to accessible buildings, assignment 
of aides to beneficiaries, home visits, delivery of services at 
alternate accessible sites, alteration of existing facilities and 
construction of new facilities, use of accessible rolling stock,

[[Page 313]]

or any other methods that result in making its programs or activities 
readily accessible to and usable by individuals with handicaps. The 
agency is not required to make structural changes in existing facilities 
where other methods are effective in achieving compliance with this 
section. The agency, in making alterations to existing buildings, shall 
meet accessibility requirements to the extent compelled by the 
Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), 
and any regulations implementing it. In choosing among available methods 
for meeting the requirements of this section, the agency shall give 
priority to those methods that offer programs and activities to 
qualified individuals with handicaps in the most integrated setting 
appropriate.
    (2) Historic preservation programs. In meeting the requirements of 
Sec. 1850.150(a) in historic preservation programs, the agency shall 
give priority to methods that provide physical access to individuals 
with handicaps. In cases where a physical alteration to an historic 
property is not required because of Sec. 1850.150(a) (2) or (3), 
alternative methods of achieving program accessibility include--
    (i) Using audio-visual materials and devices to depict those 
portions of an historic property that cannot otherwise be made 
accessible;
    (ii) Assigning persons to guide individuals with handicaps into or 
through portions of historic properties that cannot otherwise be made 
accessible; or
    (iii) Adopting other innovative methods.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section by November 7, 1988, except 
that where structural changes in facilities are undertaken, such changes 
shall be made by September 6, 1991, but in any event as expeditiously as 
possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be undertaken to achieve program accessibility, the 
agency shall develop, by March 6, 1989, a transition plan setting forth 
the steps necessary to complete such changes. The agency shall provide 
an opportunity to interested persons, including individuals with 
handicaps or organizations representing individuals with handicaps, to 
participate in the development of the transition plan by submitting 
comments (both oral and written). A copy of the transition plan shall be 
made available for public inspection. The plan shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the 
plan.



Sec. 1850.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to and usable by 
individuals with handicaps. The definitions, requirements, and standards 
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established 
in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this 
section.



Sec. Sec. 1850.152-1850.159  [Reserved]



Sec. 1850.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall

[[Page 314]]

give primary consideration to the requests of the individual with 
handicaps.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
by telephone, telecommunication devices for deaf persons (TDD's) or 
equally effective telecommunication systems shall be used to communicate 
with persons with impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec. 1850.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such an alteration or such burdens, the agency 
shall take any other action that would not result in such an alteration 
or such burdens but would nevertheless ensure that, to the maximum 
extent possible, individuals with handicaps receive the benefits and 
services of the program or activity.



Sec. Sec. 1850.161-1850.169  [Reserved]



Sec. 1850.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs and activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (c) The Managing Director for Operations shall be responsible for 
coordinating implementation of this section. Complaints may be sent to 
the Director for Management, Office of the Special Counsel, 1730 M 
Street, NW., Suite 201, Washington, DC 20036-4505.
    (d) The agency shall accept and investigate all complete complaints 
for which it has jurisdiction. All complete complaints must be filed 
within 180 days of the alleged act of discrimination. The agency may 
extend this time period for good cause.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate Government 
entity.
    (f) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to 
and usable by individuals with handicaps.
    (g) Within 180 days of the receipt of a complete complaint for which 
it has jurisdiction, the agency shall notify the complainant of the 
results of the investigation in a letter containing--
    (1) Findings of fact and conclusions of law;
    (2) A description of a remedy for each violation found; and
    (3) A notice of the right to appeal.

[[Page 315]]

    (h) Appeals of the findings of fact and conclusions of law or 
remedies must be filed by the complainant within 90 days of receipt from 
the agency of the letter required by Sec. 1850.170(g). The agency may 
extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the head of 
the agency.
    (j) The head of the agency shall notify the complainant of the 
results of the appeal within 60 days of the receipt of the request. If 
the head of the agency determines that additional information is needed 
from the complainant, he or she shall have 60 days from the date of 
receipt of the additional information to make his or her determination 
on the appeal.
    (k) The time limits cited in paragraphs (g) and (j) of this section 
may be extended with the permission of the Assistant Attorney General.
    (l) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.

[53 FR 25881 and 25885, July 8, 1988, as amended at 53 FR 25881, July 8, 
1988. Redesignated and amended at 54 FR 47345, Nov. 14, 1989; 59 FR 
64844, Dec. 16, 1994; 65 FR 81325, Dec. 26, 2000]



Sec. Sec. 1850.171-1850.999  [Reserved]

[[Page 317]]



               CHAPTER IX--APPALACHIAN REGIONAL COMMISSION




  --------------------------------------------------------------------
Part                                                                Page
1900            Employee responsibilities and conduct.......         319

[[Page 319]]



PART 1900_EMPLOYEE RESPONSIBILITIES AND CONDUCT--Table of Contents




    Authority: 5 U.S.C. 7301, 40 U.S.C. App. 106.



Sec. 1900.100  Cross-references to employee ethical conduct standards and financial disclosure regulations.

    Officers and employees of the Appalachian Regional Commission 
Federal Staff are subject to the Standards of Ethical Conduct for 
Employees of the Executive Branch at 5 CFR part 2635 and the executive 
branch-wide financial disclosure regulations at 5 CFR part 2634.

[60 FR 62702, Dec. 7, 1995; 61 FR 13051, Mar. 26, 1996]

[[Page 321]]



                CHAPTER XI--ARMED FORCES RETIREMENT HOME




  --------------------------------------------------------------------
Part                                                                Page
2100            Armed Forces Retirement Home Privacy Act 
                    procedures..............................         323

[[Page 323]]



PART 2100_ARMED FORCES RETIREMENT HOME PRIVACY ACT PROCEDURES--Table of 

Contents




Sec.
2100.1 Purpose.
2100.2 Definitions.
2100.3 Procedure for requesting information.
2100.4 Requirements for identification.
2100.5 Access by individuals.
2100.6 Schedule of fees.
2100.7 Request for correction or amendment.
2100.8 Review of request for amendment.
2100.9 Appeal of denial to grant access or to amend records.
2100.10 Conditions of disclosure and accounting of certain disclosures.
2100.11 Penalties.
2100.12 Accounting of disclosure.
2100.13 Specific exemptions.

    Authority: Public Law 93-579, 88 Stat. 1896, 5 U.S.C. 552a(f).

    Source: 59 FR 30669, June 15, 1994, unless otherwise noted.



Sec. 2100.1  Purpose.

    Pursuant to the requirements of the Privacy Act of 1974, 5 U.S.C. 
552a, as amended, the following rules of procedures are established with 
respect to access and amendment of records maintained on the individual 
subjects of these records by the Armed Forces Retirement Home, which 
includes the continuing care retirement communities of the U.S. 
Soldiers' and Airmen's Home and the U.S. Naval Home. These rules do not 
apply to civilian employees' records maintained by the individual 
facilities which are covered by the Office of Personnel Management 
systems of records.



Sec. 2100.2  Definitions.

    (a) All terms used in this part which are defined in 5 U.S.C. 552a, 
as amended, shall have the same meaning herein.
    (b) Agency, as used in this part, means the Armed Forces Retirement 
Home (AFRH).
    (c) Facility or facilities refers to the continuing care retirement 
communities of the U.S. Soldiers' and Airmen's Home (USSAH) and the U.S. 
Naval Home (USNH), which are incorporated within the Armed Forces 
Retirement Home (AFRH).
    (d) Access means providing a copy of a record to, or allowing review 
of the original record by, the individual or the individual's authorized 
representative, legal guardian or conservator.



Sec. 2100.3  Procedure for requesting information.

    Individuals shall submit written inquiries regarding all AFRH 
records to the appropriate facility at the following addresses: 
Associate Director, Resource Management, U.S. Soldiers' and Airmen's 
Home, 3700 N. Capitol Street, NW., Washington, DC 20317-0002; or, 
Administrative Services, U.S. Naval Home, 1800 Beach Drive, Gulfport, 
Mississippi 39507-1597. All personal (walk-in) requests will require 
some form of common identification.



Sec. 2100.4  Requirements for identification.

    Only upon proper identification will any individual be granted 
access to records which pertain to him/her. Identification is required 
both for accurate record identification and to avoid disclosing records 
to unauthorized individuals. Individuals must provide their full name 
and as much information as possible in order that a proper search for 
records can be accomplished. Requests made by mail shall be signed by 
the individual requesting his/her records. Inclusion of a telephone 
number for the requester is recommended to expedite certain matters. 
Requesters applying in person must provide an identification with 
photograph, such as a driver's license, military or annuitant 
identification card, or any official document as acceptable 
identification validation. Personal requests can only be accepted on 
regularly scheduled workdays (Monday through Friday, excluding Federal 
holidays) between the hours of 7:30 a.m. and 3:30 p.m.



Sec. 2100.5  Access by individuals.

    (a) No individual will be allowed access to any information compiled 
or maintained in reasonable anticipation of civil actions or 
proceedings, or otherwise exempt under Sec. 2100.12. Requests for 
pending investigations will be denied and the requester instructed to

[[Page 324]]

forward another request giving adequate time for the investigation to be 
completed. Requesters shall be provided the telephone number so they can 
call and check on the status in order to know when to resubmit the 
request.
    (b) Any individual may authorize the facility to provide a copy of 
his/her records to a third party. This authorization must be in writing 
and shall be provided to the facility with the initial request.
    (c) Access to records may be authorized to the legal guardian or 
conservator acting on behalf of an individual who has been declared to 
be incompetent due to physical or mental incapacity or age by a court of 
competent jurisdiction.
    (d) When an individual requesting access to his/her record wishes to 
be accompanied by another individual during the course of the 
examination of the record, the individual making the request shall 
submit to the official having operational control of the record, a 
signed statement authorizing that person access to the record.
    (e) If medical records are requested and a USSAH or USNH 
practitioner believes that access to the records by the subject could 
harm that person's mental or physical health, the requester will be 
asked to name a practitioner to receive the records. If this requirement 
poses a hardship on the individual, he/she will be offered the service 
of an USSAH or USNH practitioner other than the one who provided 
treatment. If the individual refuses to name a recipient, the record 
will not be released.



Sec. 2100.6  Schedule of fees.

    (a) Individuals will not be charged for:
    (1) The search and review of the record.
    (2) Copies of the record produced as a necessary part of the process 
of making the record available for access; or,
    (3) Copies of the requested record when it has been determined that 
access can only be accomplished by providing a copy of the record 
through the mail.
    (b) Waiver. The official having operational control at the 
appropriate facility may at no charge, provide copies of a record if it 
is determined the production of the copies is in the interest of the 
Government.
    (c) Fee Schedule and method of payment. With the exception of 
paragraphs (a) and (b) of this section, fees will be charged as 
indicated below:
    (1) Records will be duplicated at a rate of $.10 per page for all 
copying of 5 pages or more. There is no charge for duplication of 4 or 
fewer pages.
    (2) Where it is anticipated that the fees chargeable under this 
section will amount to more than $30.00, the requester shall be promptly 
notified of the amount of the anticipated fee or such portion thereof as 
can readily be estimated. In instances where the estimated fees will 
exceed $30.00, an advance deposit may be required. The notice or request 
for advance deposit shall extend an offer to the requester in order to 
reformulate the request in a manner which will reduce the fees, yet 
still meet the needs of the requester.
    (3) Fees should be paid in full prior to issuance of requested 
copies. In the event the requester is in arrears for previous requested 
copies, no subsequent request will be processed until the arrears have 
been paid in full.
    (4) Remittances shall be in the form either of a personal check, 
bank draft drawn on a bank in the United States, or a postal money 
order. Remittances shall be made payable to the facility to which the 
request is being made, and mailed or delivered to the appropriate 
facility (see Sec. 2100.3 of this part).
    (5) A receipt for fees paid will be given upon request.



Sec. 2100.7  Request for correction or amendment.

    (a) Requests to correct or amend a file shall be addressed to the 
system manager in which the file is located. The request must reasonably 
describe the record to be amended, the items to be changed as 
specifically as possible, the type of amendment (e.g., deletion, 
correction, amendment), and the reason for the amendment. The request 
should also include the reasons why the requester believes the record is 
not accurate, relevant, timely, or complete. The burden of proof will be 
upon the individual to furnish sufficient facts to persuade the change 
of the

[[Page 325]]

record of the inaccuracy, irrelevancy, timeliness, or incompleteness of 
the record. Normally all documents submitted, to include court orders, 
shall be certified. Amendments under this part are limited to correcting 
factual matters and not matters of official judgement or opinions.
    (b) Requirements of identification as outlined in Sec. 2100.4 apply 
to requests to correct or amend a file.
    (c) Incomplete requests shall not be honored, but the requester 
shall be contacted for the additional information needed to process the 
request.
    (d) The amendment process is not intended to permit the alteration 
of evidence presented in the course of judicial or quasi-judicial 
proceedings. Any amendments or changes to these records normally are 
made through the specific procedures established for the amendment of 
such records.
    (e) When records sought to be amended are actually covered by 
another issuance, the administrative procedures under that issuance must 
be exhausted before using the procedures under the Privacy Act.



Sec. 2100.8  Review of request for amendment.

    (a) A written acknowledgement of the receipt of a request for 
amendment of a record will be provided to the requester within 10 
working days, unless final action regarding approval or denial will 
constitute acknowledgment.
    (b) Where there is a determination to grant all or a portion of a 
request to amend a record, the record shall be promptly amended and the 
requesting individual notified. Individuals, agencies or components 
shown by disclosure accounting records to have received copies of the 
record, or to whom disclosure has been made, will be notified of the 
amendment by the system manager in which the file is located.
    (c) Where there is a determination to deny all or a portion of a 
request to amend a record, a designated official will promptly advise 
the requesting individual of the specifics of the refusal and the 
reasons; and inform the individual that he/she may request a review of 
the denial(s).



Sec. 2100.9  Appeal of denial to grant access or to amend records.

    (a) All appeals of denial to grant access or to amend records should 
be addressed to the appropriate facility at the following addresses: 
Associate Director, Resource Management, U.S. Soldiers' and Airmen's 
Home, 3700 N. Capitol Street, NW., Washington, DC 20317-0002; or, 
Administrative Services, U.S. Naval Home, 1800 Beach Drive, Gulfport, 
Mississippi 39507-1597. The appeal should be concise and should specify 
the reasons the requester believes that the initial action was not 
satisfactory. If an appeal is denied, the designated official will 
notify the requester of the reason for denial and of the right to 
judicial review pursuant to 5 U.S.C. 552a(g). If an initial denial of a 
request to amend records is upheld, the requestor will also be advised 
of his or her right to file a statement of dispute disagreeing with the 
denial and such statement will be provided to all future users of the 
file.
    (b) If the designated official decides to amend the record, the 
requester and all previous recipients of the disputed information will 
be notified of the amendment. If the appeal is denied, the designated 
official will notify the requester of the reason of the denial, of the 
requester's right to file a statement of dispute disagreeing with the 
denial, that such statement of dispute will be retained in the file, 
that the statement will be provided to all future users of the file, and 
that the requester may file suit in a Federal district court to contest 
the decision not to amend the record.
    (c) The designated official will respond to all appeals within 30 
working days or will notify the requester of an estimated date of 
completion if the 30 day limit cannot be met.



Sec. 2100.10  Conditions of disclosure and accounting of certain disclosures.

    No record containing personally identifiable information within an 
AFRH system of records shall be disclosed by any means to any person or 
agency outside the AFRH, except by written request or prior written 
consent of the individual subject of the record, or as provided for in 
the Privacy Act of 1974,

[[Page 326]]

as amended, unless when such disclosure is:
    (a) To those officers and employees of the agency which maintains 
the record and who have a need for the record in the performance of 
their duties;
    (b) Required under 5 U.S.C. 552;
    (c) For a routine use of the record compatible with the purpose for 
which it was collected;
    (d) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to 13 U.S.C.;
    (e) To a recipient who has provided the AFRH with advance adequate 
written assurance that the record will be used solely as a statistical 
research or reporting record, and the record is to be transferred in a 
form that is not individually identifiable;
    (f) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the U.S. Government or for evaluation by the Archivist 
of the United States, or his/her designee, to determine whether the 
record has such value;
    (g) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity if the activity is authorized 
by law, and if the head of the agency or instrumentality, has made a 
written request to the agency which maintains the record specifying the 
particular portion desired and the law enforcement activity for which 
the record is sought;
    (h) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual if upon such disclosure 
notification is transmitted to the last known address of such 
individual;
    (i) To either House of Congress, or, to the extent of matter within 
its jurisdiction, any committee or subcommittee thereof, any joint 
committee of Congress or subcommittee of any such joint committee;
    (j) To the Comptroller General, or any authorized representatives, 
in the course of the performance of the duties of the General Accounting 
Office;
    (k) Pursuant to the order of a court of competent jurisdiction; or
    (l) To a consumer reporting agency in accordance with 31 U.S.C. 
3711(f).



Sec. 2100.11  Penalties.

    (a) An individual may bring a civil action against the AFRH to 
correct or amend the record, or where there is a refusal to comply with 
an individual request or failure to maintain any record with accuracy, 
relevance, timeliness and completeness, so as to guarantee fairness, or 
failure to comply with any other provision of the Privacy Act. The court 
may order correction or amendment of records. The court may enjoin the 
AFRH from withholding the records and order the production of the 
record.
    (b) Where it is determined that the action was willful or 
intentional with respect to 5 U.S.C. 552a(g)(1)(C) or (D), the United 
States may be liable for the actual damages sustained.
    (c) Criminal penalties may be imposed against an officer or employee 
of the USSAH or USNH who discloses material, which he/she knows is 
prohibited from disclosure, or who willfully maintains a system of 
records without compliance with the notice requirements.
    (d) Criminal penalties may be imposed against any person who 
knowingly and willfully requests or obtains any record concerning 
another individual from an agency under false pretenses.
    (e) All of these offenses are misdemeanors with a fine not to exceed 
$5,000.



Sec. 2100.12  Accounting of disclosure.

    (a) The AFRH or agency will maintain a record of disclosures in 
cases where records about the individual are disclosed from a system of 
records except--
    (1) When the disclosure is made pursuant to the Freedom of 
Information Act, 5 U.S.C. 552, as amended; or
    (2) When the disclosure is made to those officers and employees of 
the AFRH who have a need for the record in the performance of their 
duties.
    (b) This accounting of the disclosures will be retained for a least 
5 years or for the life of the record, whichever is longer, and will 
contain the following information:

[[Page 327]]

    (1) A brief description of the record disclosed;
    (2) The date, nature, and purpose for the disclosure; and,
    (3) The name and address of the person, agency, or other entity to 
whom the disclosure is made.
    (c) Except for the accounting of disclosure made to agencies, 
individuals, or entities in law enforcement activities or disclosures 
made from the AFRH exempt systems of records, the accounting of 
disclosures will be made available to the data subject upon request in 
accordance with the access procedures of this part.



Sec. 2100.13  Specific exemptions.

    Subsection (k) of 5 U.S.C. 552a authorizes the AFRH to adopt rules 
designating eligible system of records as exempt from certain 
requirements of 5 U.S.C. 552a. To be eligible for a specific exemption 
under the authority of 5 U.S.C. 552a(k), the pertinent records within a 
designated system must contain one or more of the following:
    (a) Investigative records compiled for law enforcement purposes. If 
this information has been used to deny someone a right however, the AFRH 
must release it unless doing so would reveal the identify of a 
confidential source ((k)(2) exemption).
    (b) Records used only for statistical, research, or other evaluation 
purposes, and which are not used to make decisions on the rights, 
benefits, or privileges of individuals, except as permitted by 13 U.S.C. 
8 (Use of census data) ((k)(4) exemption).
    (c) Data compiled to determine suitability, eligibility, or 
qualifications for Federal service, Federal contracts, or access to 
classified information. This information may be withheld only if 
disclosure would reveal the identity of a confidential source ((k)(5) 
exemption).
    (d) Test or examination material used solely to determine individual 
qualifications for appointment or promotion in the Federal service, the 
disclosure of which would compromise the objectivity or fairness of the 
testing or examination process ((k)(6) exemption).

[[Page 329]]



 CHAPTER XIV--FEDERAL LABOR RELATIONS AUTHORITY, GENERAL COUNSEL OF THE 
  FEDERAL LABOR RELATIONS AUTHORITY AND FEDERAL SERVICE IMPASSES PANEL




  --------------------------------------------------------------------

        SUBCHAPTER A--TRANSITION RULES AND REGULATIONS [RESERVED]
                    SUBCHAPTER B--GENERAL PROVISIONS
Part                                                                Page
2411            Availability of official information........         331
2412            Privacy.....................................         340
2413            Open meetings...............................         345
2414            Ex parte communications.....................         348
2415            Employee responsibilities and conduct.......         350
2416            Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Federal 
                    Labor Relations Authority...............         350
 SUBCHAPTER C--FEDERAL LABOR RELATIONS AUTHORITY AND GENERAL COUNSEL OF 
                  THE FEDERAL LABOR RELATIONS AUTHORITY
2420            Purpose and scope...........................         357
2421            Meaning of terms as used in this subchapter.         357
2422            Representation proceedings..................         360
2423            Unfair labor practice proceedings...........         371
2424            Negotiability proceedings...................         385
2425            Review of arbitration awards................         394
2426            National consultation rights and 
                    consultation rights on Government-wide 
                    rules or regulations....................         394
2427            General statements of policy or guidance....         399
2428            Enforcement of Assistant Secretary standards 
                    of conduct decisions and orders.........         400
2429            Miscellaneous and general requirements......         400
2430            Awards of attorney fees and other expenses..         406
              SUBCHAPTER D--FEDERAL SERVICE IMPASSES PANEL
2470            General.....................................         412

[[Page 330]]

2471            Procedures of the panel.....................         412
2472            Impasses arising pursuant to agency 
                    determinations not to establish or to 
                    terminate flexible or compressed work 
                    schedules...............................         416
2473            Subpoenas...................................         420
Appendix A to 5 CFR Chapter XIV--Current Addresses and 
  Geographic Jurisdictions..................................         421
Appendix B to 5 CFR Chapter XIV--Memorandum Describing the 
  Authority and Assigned Responsibilities of the General 
  Counsel of the Federal Labor Relations Authority..........         422

[[Page 331]]



        SUBCHAPTER A_TRANSITION RULES AND REGULATIONS [RESERVED]



                     SUBCHAPTER B_GENERAL PROVISIONS



PART 2411_AVAILABILITY OF OFFICIAL INFORMATION--Table of Contents




Sec.
2411.1 Purpose and scope.
2411.2 Delegation of authority.
2411.3 Information policy.
2411.4 Procedure for obtaining information.
2411.5 Identification of information requested.
2411.6 Time limits for processing requests.
2411.7 Appeal from denial of request.
2411.8 Modification of time limits.
2411.9 Effect of failure to meet time limits.
2411.10 Fees.
2411.11 Compliance with subpenas.
2411.12 Annual report.

    Authority: 5 U.S.C. 552.

    Source: 45 FR 3488, Jan. 17, 1980, unless otherwise noted.



Sec. 2411.1  Purpose and scope.

    This part contains the regulations of the Federal Labor Relations 
Authority, the General Counsel of the Federal Labor Relations Authority 
and the Federal Service Impasses Panel providing for public access to 
information from the Authority, the General Counsel or the Panel. These 
regulations implement the Freedom of Information Act, as amended, 5 
U.S.C. 552, and the policy of the Authority, the General Counsel and the 
Panel to disseminate information on matters of interest to the public 
and to disclose to members of the public on request such information 
contained in records insofar as is compatible with the discharge of 
their responsibilities, consistent with applicable law.



Sec. 2411.2  Delegation of authority.

    (a) Federal Labor Relations Authority/General Counsel of the Federal 
Labor Relations Authority. Regional Directors of the Federal Labor 
Relations Authority, the Freedom of Information Officer of the Office of 
the General Counsel, Washington, DC, and the Solicitor of the Federal 
Labor Relations Authority are delegated the exclusive authority to act 
upon all requests for information, documents and records which are 
received from any person or organization under Sec. 2411.4(a).
    (b) Federal Service Impasses Panel. The Executive Director of the 
Federal Service Impasses Panel is delegated the exclusive authority to 
act upon all requests for information, documents and records which are 
received from any person or organization under Sec. 2411.4(b).



Sec. 2411.3  Information policy.

    (a) Federal Labor Relations Authority/General Counsel of the Federal 
Labor Relations Authority. (1) It is the policy of the Federal Labor 
Relations Authority and the General Counsel of the Federal Labor 
Relations Authority to make available for public inspection and copying: 
(i) Final decisions and orders of the Authority and administrative 
rulings of the General Counsel; (ii) statements of policy and 
interpretations which have been adopted by the Authority or by the 
General Counsel and are not published in the Federal Register; and (iii) 
administrative staff manuals and instructions to staff that affect a 
member of the public (except those establishing internal operating 
rules, guidelines, and procedures for the investigation, trial, and 
settlement of cases). Any person may examine and copy items (i) through 
(iii) at each regional office of the Authority and at the offices of the 
Authority and the General Counsel, respectively, in Washington, DC, 
under conditions prescribed by the Authority and the General Counsel, 
respectively, and at reasonable times during normal working hours so 
long as it does not interfere with the efficient operations of the 
Authority and the General Counsel. To the extent required to prevent a 
clearly unwarranted invasion of personal privacy, identifying details 
may be deleted and, in each case, the justification for the deletion 
shall be fully explained in writing.
    (2) It is the policy of the Authority and the General Counsel to 
make promptly available for public inspection and copying, upon request 
by any

[[Page 332]]

person, other records where the request reasonably describes such 
records and otherwise conforms with the rules provided herein.
    (b) Federal Service Impasses Panel. (1) It is the policy of the 
Federal Service Impasses Panel to make available for public inspection 
and copying: (i) Procedural determinations of the Panel; (ii) 
factfinding and arbitration reports; (iii) final decisions and orders of 
the Panel; (iv) statements of policy and interpretations which have been 
adopted by the Panel and are not published in the Federal Register; and 
(v) administrative staff manuals and instructions to staff that affect a 
member of the public. Any person may examine and copy items (i) through 
(v) at the Panel's offices in Washington, D.C., under conditions 
prescribed by the Panel, and at reasonable times during normal working 
hours so long as it does not interfere with the efficient operations of 
the Panel. To the extent required to prevent a clearly unwarranted 
invasion of personal privacy, identifying details may be deleted and, in 
each case, the justification for the deletion shall be fully explained 
in writing.
    (2) It is the policy of the Panel to make promptly available for 
public inspection and copying, upon request by any person, other records 
where the request reasonably describes such records and otherwise 
conforms with the rules provided herein.
    (c) The Authority, the General Counsel and the Panel shall maintain 
and make available for public inspection and copying the current indexes 
and supplements thereto which are required by 5 U.S.C. 552(a)(2) and, as 
appropriate, a record of the final votes of each member of the Authority 
and of the Panel in every agency proceeding. Any person may examine and 
copy such document or record of the Authority, the General Counsel or 
the Panel at the offices of either the Authority, the General Counsel, 
or the Panel, as appropriate, in Washington, D.C., under conditions 
prescribed by the Authority, the General Counsel or the Panel at 
reasonable times during normal working hours so long as it does not 
interfere with the efficient operations of either the Authority, the 
General Counsel, or the Panel.
    (d) The Authority, the General Counsel or the Panel may decline to 
disclose any matters exempted from the disclosure requirements in 5 
U.S.C. 552(b), particularly those that are:
    (1)(i) Specifically authorized under criteria established by an 
executive order to be kept secret in the interest of national defense or 
foreign policy and (ii) are in fact properly classified pursuant to such 
executive order;
    (2) Related solely to internal personnel rules and practices of the 
Authority, the General Counsel or the Panel;
    (3) Specifically exempted from disclosure by statute (other than 5 
U.S.C. 552(b)), provided that such statute:
    (i) Requires that the matters be withheld from the public in such a 
manner as to leave no discretion on the issue; or
    (ii) Establishes particular criteria for withholding or refers to 
particular types of matters to be withheld;
    (4) Trade secrets and commercial or financial information obtained 
from a person and privileged or confidential;
    (5) Interagency or intra-agency memoranda or letters which would not 
be available by law to a party other than an agency in litigation with 
the agency;
    (6) Personnel and medical files and similar files the disclosure of 
which would constitute a clearly unwarranted invasion of personal 
privacy; or
    (7) Investigatory records compiled for law enforcement purposes, but 
only to the extent that the production of such records would:
    (i) Interfere with an enforcement proceeding;
    (ii) Deprive a person of a right to a fair trial or an impartial 
adjudication;
    (iii) Constitute an unwarranted invasion of personal privacy;
    (iv) Disclose the identity of a confidential source and, in the case 
of a record compiled by a criminal law enforcement authority in the 
course of a criminal investigation, or by an agency conducting a lawful 
national security intelligence investigation, confidential information 
furnished only by the confidential source;

[[Page 333]]

    (v) Disclose investigative techniques and procedures; or
    (vi) Endanger the life or physical safety of law enforcement 
personnel.
    (e)(1) The formal documents constituting the record in a case or 
proceeding are matters of official record and, until destroyed pursuant 
to applicable statutory authority, are available to the public for 
inspection and copying at the appropriate regional office of the 
Authority, or the offices of the Authority, the General Counsel or the 
Panel in Washington, D.C., as appropriate, under conditions prescribed 
by the Authority, the General Counsel or the Panel at reasonable times 
during normal working hours so long as it does not interfere with the 
efficient operations of the Authority, the General Counsel or the Panel.
    (2) The Authority, the General Counsel or the Panel, as appropriate, 
shall certify copies of the formal documents upon request made a 
reasonable time in advance of need and payment of lawfully prescribed 
costs.
    (f)(1) Copies of forms prescribed by the Authority for the filing of 
charges and petitions may be obtained without charge from any regional 
office of the Authority.
    (2) Copies of forms prescribed by the Panel for the filing of 
requests may be obtained without charge from the Panel's offices in 
Washington, DC.



Sec. 2411.4  Procedure for obtaining information.

    (a) Federal Labor Relations Authority/General Counsel of the Federal 
Labor Relations Authority. Any person who desires to inspect or copy any 
records, documents or other information of the Authority or the General 
Counsel, covered by this part, other than those specified in paragraphs 
(a)(1) and (c) of Sec. 2411.3, shall submit a written request to that 
effect as follows:
    (1) If the request is for records, documents or other information in 
a regional office of the Authority, it should be made to the appropriate 
Regional Director;
    (2) If the request is for records, documents or other information in 
the Office of the General Counsel and located in Washington, DC, it 
should be made to the Freedom of Information Officer, Office of the 
General Counsel, Washington, DC; and
    (3) If the request is for records, documents or other information in 
the offices of the Authority in Washington, D.C., it should be made to 
the Solicitor of the Authority, Washington, D.C.
    (b) Federal Service Impasses Panel. Any person who desires to 
inspect or copy any records, documents or other information of the Panel 
covered by this part, other than those specified in paragraphs (b)(1) 
and (c) of Sec. 2411.3, shall submit a written request to that effect 
to the Executive Director, Federal Service Impasses Panel, Washington, 
DC.
    (c) All requests under this part should be clearly and prominently 
identified as a request for information under the Freedom of Information 
Act and, if submitted by mail or otherwise submitted in an envelope or 
other cover, should be clearly identified as such on the envelope or 
other cover. If a request does not comply with the provisions of this 
paragraph, it shall not be deemed received by the appropriate Regional 
Director, the Freedom of Information Officer of the Office of the 
General Counsel, the Solicitor of the Authority, or the Executive 
Director of the Panel, as appropriate, until the time it is actually 
received by such person.



Sec. 2411.5  Identification of information requested.

    (a) Each request under this part should reasonably describe the 
records being sought in a way that they can be identified and located. A 
request should include all pertinent details that will help identify the 
records sought.
    (b) If the description is insufficient, the officer processing the 
request will so notify the person making the request and indicate the 
additional information needed. Every reasonable effort shall be made to 
assist in the identification and location of the record sought.
    (c) Upon receipt of a request for records, the appropriate Regional 
Director, the Freedom of Information Officer of the Office of the 
General Counsel, the Solicitor of the Authority, or the Executive 
Director of the Panel, as

[[Page 334]]

appropriate, shall enter it in a public log. The log shall state the 
date and time received, the name and address of the person making the 
request, the nature of the records requested, the action taken on the 
request, the date of the determination letter sent pursuant to 
paragraphs (b) and (c) of Sec. 2411.6, the date(s) any records are 
subsequently furnished, the number of staff-hours and grade levels of 
persons who spent time responding to the request, and the payment 
requested and received.



Sec. 2411.6  Time limits for processing requests.

    (a) All time limits established pursuant to this section shall begin 
as of the time at which a request for records is logged in by the 
appropriate Regional Director, the Freedom of Information Officer of the 
Office of the General Counsel, the Solicitor of the Authority, or the 
Executive Director of the Panel, as appropriate, processing the request 
pursuant to paragraph (c) of Sec. 2411.5. An oral request for records 
shall not begin any time requirement. A written request for records sent 
to other than the appropriate officer will be forwarded to that officer 
by the receiving officer, but in that event the applicable time limit 
for response set forth in paragraph (b) of this section shall begin upon 
the request being logged in as required by paragraph (c) of Sec. 
2411.5.
    (b) Except as provided in Sec. 2411.8, the appropriate Regional 
Director, the Freedom of Information Officer of the Office of the 
General Counsel, the Solicitor of the Authority, or the Executive 
Director of the Panel, as appropriate, shall, within twenty (20) working 
days following receipt of the request, respond in writing to the 
requester, determining whether, or the extent to which, the request 
shall be complied with.
    (1) If all the records requested have been located and a final 
determination has been made with respect to disclosure of all of the 
records requested, the response shall so state.
    (2) If all of the records have not been located or a final 
determination has not been made with respect to disclosure of all the 
records requested, the response shall state the extent to which the 
records involved shall be disclosed pursuant to the rules established in 
this part.
    (3) If the request is expected to involve allowed charges in excess 
of $250.00, the response shall specify or estimate the fee involved and 
shall require prepayment of any charges in accordance with the 
provisions of paragraph (g) of Sec. 2411.10 before the request is 
processed further.
    (4) Whenever possible, the response relating to a request for 
records that involves a fee of less than $250.00 shall be accompanied by 
the requested records. Where this is not possible, the records shall be 
forwarded as soon as possible thereafter, consistent with other 
obligations of the Authority, the General Counsel or the Panel.
    (c) If any request for records is denied in whole or in part, the 
response required by paragraph (b) of this section shall notify the 
requester of the denial. Such denial shall specify the reason therefor, 
set forth the name and title or position of the person responsible for 
the denial, and notify the person making the request of the right to 
appeal the denial under the provisions of Sec. 2411.7.

[45 FR 3488, Jan. 17, 1980, as amended at 52 FR 26128, July 13, 1987; 62 
FR 60997, Nov. 14, 1997]



Sec. 2411.7  Appeal from denial of request.

    (a) Federal Labor Relations Authority/General Counsel of the Federal 
Labor Relations Authority. (1) Whenever any request for records is 
denied, a written appeal may be filed within thirty (30) days after the 
requester receives notification that the request has been denied or 
after the requester receives any records being made available, in the 
event of partial denial. If the denial was made by a Regional Director 
or by the Freedom of Information Officer of the Office of the General 
Counsel, the appeal shall be filed with the General Counsel in 
Washington, DC. If the denial was made by the Solicitor of the 
Authority, the appeal shall be filed with the Chairman of the Authority 
in Washington, DC.
    (2) The Chairman of the Authority or the General Counsel, as 
appropriate, shall, within twenty (20) working days from the time of 
receipt of the appeal, except as provided in Sec. 2411.8, make a

[[Page 335]]

determination on the appeal and respond in writing to the requester, 
determining whether, or the extent to which, the request shall be 
complied with.
    (i) If the determination is to comply with the request and the 
request is expected to involve an assessed fee in excess of $25.00, the 
determination shall specify or estimate the fee involved and shall 
require prepayment of any charges due in accordance with the provisions 
of paragraph (a) of Sec. 2411.10 before the records are made available.
    (ii) Whenever possible, the determination relating to a request for 
records that involves a fee of less than $25.00 shall be accompanied by 
the requested records. Where this is not possible, the records shall be 
forwarded as soon as possible thereafter, consistent with other 
obligations of the Authority or the General Counsel.
    (b) Federal Service Impasses Panel. (1) Whenever any request for 
records is denied by the Executive Director, a written appeal may be 
filed with the Chairman of the Panel within thirty (30) days after the 
requester receives notification that the request has been denied or 
after the requester receives any records being made available, in the 
event of partial denial.
    (2) The Chairman of the Panel, within twenty (20) working days from 
the time of receipt of the appeal, except as provided in Sec. 2411.8, 
shall make a determination on the appeal and respond in writing to the 
requester, determining whether, or the extent to which, the request 
shall be complied with.
    (i) If the determination is to comply with the request and the 
request is expected to involve an assessed fee in excess of $25.00, the 
determination shall specify or estimate the fee involved and shall 
require prepayment of any charges due in accordance with the provisions 
of paragraph (a) of Sec. 2411.10 before the records are made available.
    (ii) Whenever possible, the determination relating to a request for 
records that involves a fee of less than $25.00 shall be accompanied by 
the requested records. Where this is not possible, the records shall be 
forwarded as soon as possible thereafter, consistent with other 
obligations of the Panel.
    (c) If on appeal the denial of the request for records is upheld in 
whole or in part by the Chairman of the Authority, the General Counsel, 
or the Chairman of the Panel, as appropriate, the person making the 
request shall be notified of the reasons for the determination, the name 
and title or position of the person responsible for the denial, and the 
provisions for judicial review of that determination under 5 U.S.C. 
552(a)(4). Even though no appeal is filed from a denial in whole or in 
part of a request for records by the person making the request, the 
Chairman of the Authority, the General Counsel or the Chairman of the 
Panel, as appropriate, may, without regard to the time limit for filing 
of an appeal, sua sponte initiate consideration of a denial under this 
appeal procedure by written notification to the person making the 
request. In such event the time limit for making the determination shall 
commence with the issuance of such notification.



Sec. 2411.8  Modification of time limits.

    (a) In unusual circumstances as specified in this section, the time 
limits prescribed with respect to initial determinations or 
determinations on appeal may be extended by written notice from the 
officer handling the request (either initial or on appeal) to the person 
making such request setting forth the reasons for such extension and the 
date on which a determination is expected to be dispatched. No such 
notice shall specify a date that would result in a total extension of 
more than ten (10) working days. As used in this section, ``unusual 
circumstances'' means, but only to the extent reasonably necessary to 
the proper processing of the particular request:
    (1) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the request;
    (2) The need to search for, collect and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (3) The need for consultation, which shall be conducted with all 
practicable speed, with another agency having a

[[Page 336]]

substantial interest in the determination of the request or among two or 
more components of the agency having substantial subject matter interest 
therein.
    (b) Expedited processing of a request for records, or an appeal of a 
denial of a request for expedited processing, shall be provided when the 
requester demonstrates a compelling need for the information and in 
other cases as determined by the officer processing the request. A 
requester seeking expedited processing can demonstrate a compelling need 
by submitting a statement certified by the requester to be true and 
correct to the best of such person's knowledge and belief and that 
satisfies the statutory and regulatory definitions of compelling need. 
Requesters shall be notified within ten (10) calendar days after receipt 
of such a request whether expedited processing, or an appeal of a denial 
of a request for expedited processing, was granted. As used in this 
section, ``compelling need'' means:
    (1) That a failure to obtain requested records on an expedited basis 
could reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual; or
    (2) With respect to a request made by a person primarily engaged in 
disseminating information, urgency to inform the public concerning 
actual or alleged Federal Government activity.

[64 FR 18799, Apr. 16, 1999]



Sec. 2411.9  Effect of failure to meet time limits.

    Failure by the Authority, the General Counsel or the Panel either to 
deny or grant any request under this part within the time limits 
prescribed by the Freedom of Information Act, as amended, 5 U.S.C. 552, 
and these regulations shall be deemed to be an exhaustion of the 
administrative remedies available to the person making this request.



Sec. 2411.10  Fees.

    (a) Definitions. For the purpose of this section:
    (1) The term direct costs means those expenditures which the 
Authority, the General Counsel or the Panel actually incurs in searching 
for and duplicating (and in the case of commercial requesters, 
reviewing) documents to respond to a FOIA request. Direct costs include, 
for example, the salary of the employee performing work (the basic rate 
of pay for the employee plus 16 percent of the rate to cover benefits) 
and the cost of operating duplicating machinery. Not included in direct 
costs are overhead expenses such as costs of space, and heating or 
lighting the facility in which the records are stored.
    (2) The term search includes all time spent looking for material 
that is responsive to a request, including page-by-page or line-by-line 
identification of material within documents. Searches may be done 
manually or by computer using existing programming.
    (3) The term duplication refers to the process of making a copy of a 
document necessary to respond to a FOIA request. Such copies can take 
the form of paper copy, microfilm, audio-visual materials, or machine 
readable documentation (e.g., magnetic tape or disk), among others.
    (4) The term review refers to the process of examining documents 
located in response to a commercial use request (see paragraph (a)(5) of 
this section) to determine whether any portion of any document located 
is permitted to be withheld. It also includes processing any documents 
for disclosure, e.g., doing all that is necessary to excise them and 
otherwise prepare them for release. Review does not include time spent 
resolving general legal or policy issues regarding the application of 
exemptions.
    (5) The term ``commercial use'' request refers to a request from or 
on behalf of one who seeks information for a use or purpose that 
furthers the commercial, trade, or profit interests of the requester or 
the person on whose behalf the request is made. In determining whether a 
requester properly belongs in this category, the Authority, the General 
Counsel or the Panel will look first to the use to which a requester 
will put the document requested. Where the Authority, the General 
Counsel or the Panel has reasonable cause to doubt the use to which a 
requester will put the records sought, or where that use is not clear 
from the request itself, the Authority, the General

[[Page 337]]

Counsel or the Panel may seek additional clarification before assigning 
the request to a specific category.
    (6) The term educational institution refers to a preschool, a public 
or private elementary or secondary school, an institution of graduate 
higher education, an institution of undergraduate higher education, an 
institution of professional education, and an institution of vocational 
education, which operates a program or programs of scholarly research.
    (7) The term non-commercial scientific institution refers to an 
institution that is not operated on a ``commercial'' basis as that term 
is referenced in paragraph (a)(5) of this section, and which is operated 
solely for the purpose of conducting scientific research the results of 
which are not intended to promote any particular product or industry.
    (8) The term representative of the news media refers to any person 
actively gathering news for an entity that is organized and operated to 
publish or broadcast news to the public. The term news means information 
that is about current events or that would be of current interest to the 
public. Examples of news media entities include television or radio 
stations broadcasting to the public at large, and publishers of 
periodicals (but only in those instances when they can qualify as 
disseminators of ``news'') who make their products available for 
purchase or subscription by the general public. These examples are not 
intended to be all-inclusive. In the case of ``freelance'' journalists, 
they may be regarded as working for a news organization if they 
demonstrate a solid basis for expecting publication through that 
organization, even though not actually employed by it. A publication 
contract would be the clearest proof, but the Authority, the General 
Counsel or the Panel may also look to the past publication record of a 
requester, press accreditation, guild membership, business registration, 
Federal Communications Commission licensing, or similar credentials of a 
requester in making this determination.
    (b) Exceptions to fee charges. (1) With the exception of requesters 
seeking documents for a commercial use, the Authority, the General 
Counsel or the Panel will provide the first 100 pages of duplication and 
the first two hours of search time without charge. The word ``pages'' in 
this paragraph refers to paper copies of standard size, usually 8\1/
2\ by 11, or their equivalent in microfiche or 
computer disks. The term ``search time'' in this paragraph is based on a 
manual search for records. In applying this term to searches made by 
computer, when the cost of the search as set forth in paragraph (d)(2) 
of this section equals the equivalent dollar amount of two hours of the 
salary of the person performing the search, the Authority, the General 
Counsel or the Panel will begin assessing charges for computer search.
    (2) The Authority, the General Counsel, or the Panel will not charge 
fees to any requester, including commercial use requesters, if the cost 
of collecting the fee would be equal to or greater than the fee itself.
    (3)(i) The Authority, the General Counsel or the Panel will provide 
documents without charge or at reduced charges if disclosure of the 
information is in the public interest because it is likely to contribute 
significantly to public understanding of the operations or activities of 
the government and is not primarily in the commercial interest of the 
requester.
    (ii) In determining whether disclosure is in the public interest 
under paragraph (b)(3)(i) of this section, the Authority, the General 
Counsel, and the Panel will consider the following factors:
    (a) The subject of the request. Whether the subject of the requested 
records concerns ``the operations or activities of the government'';
    (b) The informative value of the information to be disclosed. 
Whether the disclosure is ``likely to contribute'' to an understanding 
of government operations or activities;
    (c) The contribution to an understanding of the subject by the 
general public likely to result from disclosure. Whether disclosure of 
the requested information will contribute to ``public understanding'';
    (d) The significance of the contribution to the public 
understanding. Whether the

[[Page 338]]

disclosure is likely to contribute ``significantly'' to public 
understanding of government operations or activities;
    (e) The existence and magnitude of a commercial interest. Whether 
the requester has a commercial interest that would be furthered by the 
requested disclosure; and, if so
    (f) The primary interest in disclosure. Whether the magnitude of the 
identified commercial interest of the requester is sufficiently large, 
in comparison with the public interest in disclosure, that disclosure is 
``primary in the commercial interest of the requester.''
    (iii) A request for a fee waiver based on the public interest under 
paragraph (b)(3)(i) of this section must address these factors as they 
apply to the request for records in order to be considered by the 
Authority, the General Counsel, or the Panel.
    (c) Level of fees to be charged. The level of fees to be charged by 
the Authority, the General Counsel or the Panel, in accordance with the 
schedule set forth in paragraph (d) of this section, depends on the 
category of the requester. The fee levels to be charged are as follows:
    (1) A request for documents appearing to be for commercial use will 
be charged to recover the full direct costs of searching for, reviewing 
for release, and duplicating the records sought.
    (2) A request for documents from an educational or non-commercial 
scientific institution will be charged for the cost of reproduction 
alone, excluding charges for the first 100 pages. To be eligible for 
inclusion in this category, requesters must show that the request is 
being made under the auspices of a qualifying institution and that the 
records are not sought for a commercial use, but are sought in 
furtherance of scholarly (if the request is from an educational 
institution) or scientific (if the request is from a non-commercial 
scientific institution) research.
    (3) The Authority, the General Counsel or the Panel shall provide 
documents to requesters who are representatives of the news media for 
the cost of reproduction alone, excluding charges for the first 100 
pages.
    (4) The Authority, the General Counsel or the Panel shall charge 
requesters who do not fit into any of the categories above fees which 
recover the full direct cost of searching for and reproducing records 
that are responsive to the request, except that the first 100 pages of 
reproduction and the first two hours of search time shall be furnished 
without charge. Requests from record subjects for records about 
themselves filed in Authority, General Counsel, or Panel systems of 
records will continue to be treated under the fee provisions of the 
Privacy Act of 1974, which permits fees only for reproduction.

All requesters must reasonably describe the records sought.
    (d) The following fees shall be charged in accordance with paragraph 
(c) of this section:
    (1) Manual searches for records. The salary rate (i.e., basic pay 
plus 16 percent) of the employee(s) making the search. Search time under 
this paragraph and paragraph (d)(2) of this section may be charged for 
even if the Authority, the General Counsel or the Panel fails to locate 
records or if records located are determined to be exempt from 
disclosure.
    (2) Computer searches for records. $4.15 per quarter hour, which the 
Authority, the General Counsel and the Panel determined to be the actual 
direct cost of providing the service, including computer search time 
directly attributable to searching for records responsive to a FOIA 
request, runs, and operator salary apportionable to the search.
    (3) Review of records. The salary rate (i.e., basic pay plus 16 
percent) of the employee(s) conducting the review. This charge applies 
only to requesters who are seeking documents for commercial use, and 
only to the review necessary at the initial administrative level to 
determine the applicability of any relevant FOIA exemptions, and not at 
the administrative appeal level of an exemption already applied.
    (4) Duplication of records. Twenty-five cents per page for paper 
copy reproduction of documents, which the Authority, the General Counsel 
and the Panel determined is the reasonable direct cost of making such 
copies, taking into account the average salary of the operator and the 
cost of the reproduction

[[Page 339]]

machinery. For copies of records prepared by computer, such as tapes or 
printouts, the Authority, the General Counsel or the Panel shall charge 
the actual cost, including operator time, of production of the tape or 
printout.
    (5) Forwarding material to destination. Postage, insurance and 
special fees will be charged on an actual cost basis.
    (e) Aggregating requests. When the Authority, the General Counsel or 
the Panel reasonably believes that a requester or group of requesters is 
attempting to break a request down into a series of requests for the 
purpose of evading the assessment of fees, the Authority, the General 
Counsel or the Panel will aggregate any such requests and charge 
accordingly.
    (f) Charging interest. Interest at the rate prescribed in 31 U.S.C. 
3717 may be charged those requesters who fail to pay fees charged, 
beginning on the 30th day following the billing date. Receipt of a fee 
by the Authority, the General Counsel or the Panel, whether processed or 
not, will stay the accrual of interest.
    (g) Advanced payments. The Authority, the General Counsel or the 
Panel will not require a requester to make an advance payment, i.e., 
payment before work is commenced or continued on a request, unless:
    (1) The Authority, the General Counsel or the Panel estimates or 
determines that allowable charges that a requester may be required to 
pay are likely to exceed $250. Then the Authority, the General Counsel 
or the Panel will notify the requester of the likely cost and obtain 
satisfactory assurance of full payment where the requester has a history 
of prompt payment of FOIA fees, or require an advance payment of an 
amount up to the full estimated charges in the case of requesters with 
no history of payment; or
    (2) A requester has previously failed to pay a fee charged in a 
timely fashion (i.e., within 30 days of the date of the billing), in 
which case the Authority, the General Counsel or the Panel requires the 
requester to pay the full amount owed plus any applicable interest as 
provided above or demonstrate that the requester has, in fact, paid the 
fee, and to make an advance payment of the full amount of the estimated 
fee before the agency begins to process a new request or a pending 
request from that requester. When the Authority, the General Counsel or 
the Panel acts under paragraph (g)(1) or (2) of this section, the 
administrative time limits prescribed in subsection (a)(6) of the FOIA 
(i.e., 20 working days from receipt of initial requests and 20 working 
days from receipt of appeals from initial denial, plus permissible 
extension of these time limits) will begin only after the Authority, the 
General Counsel or the Panel has received fee payments described above.
    (h) Requests for copies of transcripts of hearings should be made to 
the official hearing reporter. However, a person may request a copy of a 
transcript of a hearing from the Authority, the Panel or the General 
Counsel, as appropriate. In such instances, the Authority, the General 
Counsel or the Panel, as appropriate, may, by agreement with the person 
making the request, make arrangements with commercial firms for required 
services to be charged directly to the requester.
    (i) Payment of fees shall be made by check or money order payable to 
the U.S. Treasury.

[52 FR 26128, July 13, 1987, as amended at 62 FR 60997, Nov. 14, 1997]



Sec. 2411.11  Compliance with subpenas.

    No member of the Authority or the Panel, or the General Counsel, or 
other officer or employee of the Authority, the Panel, or the General 
Counsel shall produce or present any files, documents, reports, 
memoranda, or records of the Authority, the Panel or the General 
Counsel, or testify in behalf of any party to any cause pending in any 
arbitration or in any court or before the Authority or the Panel, or any 
other board, commission, or administrative agency of the United States, 
territory, or the District of Columbia with respect to any information, 
facts, or other matter to their knowledge in their official capacity or 
with respect to the contents of any files, documents, reports, 
memoranda, or records of the Authority, the Panel or the General 
Counsel, whether in answer to a subpena, subpena duces tecum, or 
otherwise, without the written consent of

[[Page 340]]

the Authority, the Panel or the General Counsel, as appropriate. 
Whenever any subpena, the purpose for which is to adduce testimony or 
require the production of records as described above, shall have been 
served on any member or other officer or employee of the Authority, the 
Panel or the General Counsel, such person will, unless otherwise 
expressly directed by the Authority, the Panel or the General Counsel, 
as appropriate, and as provided by law, move pursuant to the applicable 
procedure to have such subpena invalidated on the ground that the 
evidence sought is privileged against disclosure by this rule.



Sec. 2411.12  Annual report.

    On or before March 1 of each calendar year, the Executive Director 
of the Authority shall submit a report of the activities of the 
Authority, the General Counsel and the Panel with regard to public 
information requests during the preceding calendar year to the Speaker 
of the House of Representatives and the President of the Senate for 
referral to the appropriate committees of the Congress. The report shall 
include for such calendar year all information required by 5 U.S.C. 
552(d) and such other information as indicates the efforts of the 
Authority, the General Counsel and the Panel to administer fully the 
provisions of the Freedom of Information Act, as amended.



PART 2412_PRIVACY--Table of Contents




Sec.
2412.1 Purpose and scope.
2412.2 Definitions.
2412.3 Notice and publication.
2412.4 Existence of records requests.
2412.5 Individual access requests.
2412.6 Initial decision on access requests.
2412.7 Special procedures; medical records.
2412.8 Limitations on disclosures.
2412.9 Accounting of disclosures.
2412.10 Requests for correction or amendment of records.
2412.11 Initial decision on correction or amendment.
2412.12 Amendment or correction of previously disclosed records.
2412.13 Agency review of refusal to provide access to, or amendment or 
          correction of, records.
2412.14 Fees.
2412.15 Penalties.
2412.16 Exemptions.

    Authority: 5 U.S.C. 552a.

    Source: 45 FR 3491, Jan. 17, 1980, unless otherwise noted.



Sec. 2412.1  Purpose and scope.

    This part contains the regulations of the Federal Labor Relations 
Authority, the General Counsel of the Federal Labor Relations Authority 
and the Federal Service Impasses Panel implementing the Privacy Act of 
1974, as amended, 5 U.S.C. 552a. The regulations apply to all records 
maintained by the Authority, the General Counsel and the Panel that are 
contained in a system of records, as defined herein, and that contain 
information about an individual. The regulations in this part set forth 
procedures that: (a) Authorize an individual's access to records 
maintained about the individual; (b) limit the access of other persons 
to those records; and (c) permit an individual to request the amendment 
or correction of records about the individual.



Sec. 2412.2  Definitions.

    For the purposes of this part--
    (a) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence.
    (b) Maintain includes maintain, collect, use or disseminate.
    (c) Record means any item, collection or grouping of information 
about an individual that is maintained by the Authority, the General 
Counsel and the Panel including, but not limited to, the individual's 
education, financial transactions, medical history and criminal or 
employment history and that contains the individual's name, or the 
identifying number, symbol or other identifying particular assigned to 
the individual, such as a finger or voice print or a photograph.
    (d) System of records means a group of any records under the control 
of the Authority, the General Counsel and the Panel from which 
information is retrieved by the name of the individual or by some 
identifying particular assigned to the individual.
    (e) Routine use means, with respect to the disclosure of a record, 
the use of such record for a purpose which is compatible with the 
purpose for which it was collected.

[[Page 341]]



Sec. 2412.3  Notice and publication.

    The Authority, the General Counsel, and the Panel will publish in 
the Federal Register such notices describing systems of records as are 
required by law.

[51 FR 33837, Sept. 23, 1986]



Sec. 2412.4  Existence of records requests.

    (a) An individual who desires to know if a system of records 
maintained by the Authority, the General Counsel and the Panel contains 
a record pertaining to the individual must submit a written inquiry as 
follows:
    (1) If the system of records is located in a regional office of the 
Authority, it should be made to the appropriate Regional Director; and
    (2) If the system of records is located in the office of the 
Authority, the General Counsel or the Panel in Washington, DC, it should 
be made to the Director of Administration of the Authority, Washington, 
DC.
    (b) The request shall be in writing and should be clearly and 
prominently identified as a Privacy Act request. If the request is 
submitted by mail or otherwise submitted in an envelope or other cover, 
it should bear the legend ``Privacy Act Request'' on the envelope or 
other cover. If a request does not comply with the provisions of this 
paragraph, it shall not be deemed received until the time it is actually 
received by the appropriate Regional Director or the Director of 
Administration of the Authority, as appropriate.
    (c) The inquiry must include the name and address of the individual 
and reasonably describe the system of records in question by the 
individual. Descriptions of the systems of records maintained by the 
Authority, the General Counsel and the Panel have been published in the 
Federal Register.
    (d) The appropriate Regional Director or the Director of 
Administration of the Authority, as appropriate, will advise the 
individual in writing within ten (10) working days from receipt of the 
request whether the system of records named by the individual contains a 
record pertaining to the individual.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.5  Individual access requests.

    (a) Any individual who desires to inspect or receive copies of any 
record pertaining to the individual which is contained in a system of 
records maintained by the Authority, the General Counsel and the Panel 
must submit a written request reasonably identifying the records sought 
to be inspected or copied as follows:
    (1) If the system of records is located in a regional office of the 
Authority, it should be made to the appropriate Regional Director; and
    (2) If the system of records is located in the offices of the 
Authority, the General Counsel or the Panel in Washington, DC, it should 
be made to the Deputy Director of Administration of the Authority, 
Washington, DC.
    (b) The request shall be in writing and should be clearly and 
prominently identified as a Privacy Act request. If the request is 
submitted by mail or otherwise submitted in an envelope or other cover, 
it should bear the legend ``Privacy Act Request'' on the envelope or 
other cover. If a request does not comply with the provisions of this 
paragraph, it shall not be deemed received until the time it is actually 
received by the appropriate Regional Director or the Director of 
Administration of the Authority, as appropriate.
    (c) An individual seeking access to a record may, if desired, be 
accompanied by another person during review of the records. If the 
requester does desire to be accompanied by another person during the 
inspection, the requester must sign a statement, to be furnished to the 
Authority, the General Counsel or the Panel representative, as 
appropriate, at the time of the inspection, authorizing such other 
person to accompany the requester.
    (d) Satisfactory identification (i.e., employee identification 
number, current address, and verification of signature) must be provided 
to the Authority, the General Counsel or the Panel representative, as 
appropriate, prior to review of the record.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]

[[Page 342]]



Sec. 2412.6  Initial decision on access requests.

    (a) Within ten (10) working days of the receipt of a request 
pursuant to Sec. 2412.5, the appropriate Regional Director or the 
Director of Administration of the Authority, as appropriate, shall make 
an initial decision whether the requested records exist and whether they 
will be made available to the person requesting them. That initial 
decision shall immediately be communicated, in writing or other 
appropriate form, to the person who has made the request.
    (b) Where the initial decision is to provide access to the requested 
records, the above writing or other appropriate communication shall:
    (1) Briefly describe the records to be made available;
    (2) State whether any records maintained, in the system of records 
in question, about the individual making the request are not being made 
available;
    (3) State that the requested records will be available during 
ordinary office hours at the appropriate regional office or offices of 
the Authority, the General Counsel or the Panel, as appropriate; and
    (4) State whether any further verification of the identity of the 
requesting individual is necessary.
    (c) Where the initial decision is not to provide access to requested 
records, the appropriate Regional Director or the Director of 
Administration of the Authority, as appropriate, shall by writing or 
other appropriate communication explain the reason for that decision. 
The appropriate Regional Director or the Director of Administration of 
the Authority, as appropriate, shall only refuse to provide an 
individual access where:
    (1) There is inadequate verification of identity under Sec. 
2412.5(d);
    (2) In fact no such records are maintained; or
    (3) The requested records have been compiled in a reasonable 
anticipation of civil or criminal action or proceedings.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.7  Special procedures; medical records.

    (a) If medical records are requested for inspection which, in the 
opinion of the appropriate Regional Director or the Director of 
Administration of the Authority, as appropriate, may be harmful to the 
requester if personally inspected by such person, such records will be 
furnished only to a licensed physician designated to receive such 
records by the requester. Prior to such disclosure, the requester must 
furnish a signed written authorization to make such disclosure and the 
physician must furnish a written request for the physician's receipt of 
such records to the appropriate Regional Director or the Director of 
Administration of the Authority, as appropriate.
    (b) If such authorization is not executed within the presence of an 
Authority, General Counsel or Panel representative, the authorization 
must be accompanied by a notarized statement verifying the 
identification of the requester.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.8  Limitations on disclosures.

    (a) Requests for records about an individual made by person other 
than that individual shall also be directed as follows:
    (1) If the system of records is located in a regional office of the 
Authority, it should be made to the appropriate Regional Director; and
    (2) If the system of records is located in the offices of the 
Authority, the General Counsel or the Panel in Washington, DC, it should 
be made to the Director of Administration of the Authority, Washington, 
DC.
    (b) Such records shall only be made available to persons other than 
that individual in the following circumstances:
    (1) To any person with the prior written consent of the individual 
about whom the records are maintained;
    (2) To officers and employees of the Authority, the General Counsel 
and the Panel who need the records in the performance of their official 
duties;
    (3) For a routine use compatible with the purpose for which it was 
collected;

[[Page 343]]

    (4) To any person to whom disclosure is required by the Freedom of 
Information Act, as amended, 5 U.S.C. 552;
    (5) To the Bureau of the Census for uses pursuant to title 13 of the 
United States Code;
    (6) In a form not individually identifiable to a recipient who has 
provided the Authority, the General Counsel and the Panel with adequate 
assurance that the record will be used solely as a statistical research 
or reporting record;
    (7) To the National Archives of the United States or other 
appropriate entity as a record which has historical or other value 
warranting its preservation;
    (8) To another agency or to an instrumentality of any governmental 
jurisdiction within or under control of the United States for a civil or 
criminal law enforcement activity that is authorized by law if the head 
of the agency or instrumentality has made a written request for the 
record to the Authority, the General Counsel or the Panel;
    (9) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual, provided that 
notification of such a disclosure shall be immediately mailed to the 
last known address of the individual;
    (10) To either House of Congress or to any committee thereof with 
appropriate jurisdiction;
    (11) To the Comptroller General in the performance of the official 
duties of the General Accounting Office; or
    (12) Pursuant to the order of a court of competent jurisdiction.
    (c) The request shall be in writing and should be clearly and 
prominently identified as a Privacy Act request and, if submitted by 
mail or otherwise submitted in an envelope or other cover, should bear 
the legend ``Privacy Act Request'' on the envelope or other cover. If a 
request does not comply with the provisions of this paragraph, it shall 
not be deemed received until the time it is actually received by the 
appropriate Regional Director or the Director of Administration of the 
Authority, as appropriate.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.9  Accounting of disclosures.

    (a) All Regional Directors of the Authority and the Director of 
Administration of the Authority shall maintain a record (``accounting'') 
of every instance in which records about an individual are made 
available, pursuant to this part, to any person other than:
    (1) Officers or employees of the Authority, the General Counsel or 
the Panel in the performance of their duties; or
    (2) Any person pursuant to the Freedom of Information Act, as 
amended, 5 U.S.C. 552.
    (b) The accounting which shall be retained for at least five (5) 
years or the life of the record, whichever is longer, shall contain the 
following information:
    (1) A brief description of records disclosed;
    (2) The date, nature and, where known, the purpose of the 
disclosure; and
    (3) The name and address of the person or agency to whom the 
disclosure is made.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.10  Requests for correction or amendment of records.

    (a) After inspection of any records, if the individual disagrees 
with any information in the record, the individual may request that the 
records maintained about the individual be corrected or otherwise 
amended. Such request shall specify the particular portions of the 
record to be amended or corrected, the desired amendment or correction, 
and the reasons therefor.
    (b) Such request shall be in writing and directed as follows:
    (1) If the system of records is located in a regional office of the 
Authority, it should be made to the appropriate Regional Director; and
    (2) If the system of records is located in the offices of the 
Authority, the General Counsel or the Panel in Washington, DC, it should 
be made to the Deputy Director of Administration of the Authority, 
Washington, DC.

[[Page 344]]



Sec. 2412.11  Initial decision on correction or amendment.

    (a) Within ten (10) working days from the date of receipt of a 
request for correction or amendment, the appropriate Regional Director 
or the Director of Administration of the Authority, as appropriate, will 
acknowledge receipt of the request and, under normal circumstances, not 
later than thirty (30) days from receipt of the request, will give the 
requesting individual notice, by mail or other appropriate means, of the 
decision regarding the request.
    (b) Such notice of decision shall include:
    (1) A statement whether the request has been granted or denied, in 
whole or in part;
    (2) A quotation or description of any amendment or correction made 
to any records; and
    (3) Where a request is denied in whole or in part, an explanation of 
the reason for that denial and of the requesting individual's right to 
appeal the decision to the Chairman of the Authority pursuant to Sec. 
2412.13.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.12  Amendment or correction of previously disclosed records.

    Whenever a record is amended or corrected pursuant to Sec. 2412.11 
or a written statement filed pursuant to Sec. 2412.13, the appropriate 
Regional Director or the Director of Administration of the Authority, as 
appropriate, shall give notice of that correction, amendment or written 
statement to all persons to whom the records or copies thereof have been 
disclosed, as recorded in the accounting kept pursuant to Sec. 2412.9.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.13  Agency review of refusal to provide access to, or amendment or 

correction of, records.

    (a) Any individual whose request for access to, or amendment or 
correction of, records of the Authority, the General Counsel or the 
Panel has been denied in whole or in part by an initial decision may, 
within thirty (30) days of the receipt of notice of the initial 
decision, appeal that decision by filing a written request for review of 
that decision with the Chairman of the Authority in Washington, DC.
    (b) The appeal shall describe:
    (1) The request initially made by the individual for access to, or 
the amendment or correction of, records;
    (2) The initial decision thereupon of the appropriate Regional 
Director or the Director of Administration; and
    (3) The reasons why that initial decision should be modified by the 
Chairman of the Authority.
    (c) Not later than thirty (30) working days from receipt of a 
request for review (unless such period is extended by the Chairman of 
the Authority for good cause shown), the Chairman of the Authority shall 
make a decision, and give notice thereof to the appealing individual, 
whether to modify the initial decision of the Regional Director or the 
Deputy Director of Administration, in any way. If the Chairman of the 
Authority upholds the Regional Director's or Deputy Director of 
Administration's initial decision not to provide access to requested 
records or not to amend or correct the records as requested, the 
Chairman of the Authority shall notify the appealing individual of the 
individual's right:
    (1) To judicial review of the Chairman of the Authority's decision 
pursuant to 5 U.S.C. 552a(g)(1); and
    (2) To file with the Authority a written statement of disagreement 
setting forth the reasons why the record should have been amended or 
corrected as requested. That written statement of disagreement shall be 
made a part of the record and shall accompany that record in any use or 
disclosure of the record.

[45 FR 3491, Jan. 17, 1980, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2412.14  Fees.

    (a) As provided in this part, the Authority, the General Counsel or 
the Panel will provide a copy of the records to the individual to whom 
they pertain. There will be a charge of ten cents per copy of each page.
    (b) Any charges may be waived or reduced whenever it is in the 
public interest to do so.

[[Page 345]]



Sec. 2412.15  Penalties.

    Any person who knowingly and willfully requests or obtains any 
record concerning an individual from the Authority, the General Counsel 
or the Panel under false pretenses shall be subject to criminal 
prosecution under 5 U.S.C. 552a(i)(3) which provides that such person 
shall be guilty of a misdemeanor and fined not more than $5,000.



Sec. 2412.16  Exemptions.

    (a) OIG files compiled for the purpose of a criminal investigation 
and for related purposes. Pursuant to 5 U.S.C. 552a(j)(2), the FLRA 
hereby exempts the system of records entitled ``FLRA/OIG-1, Office of 
Inspector General Investigative Files,'' insofar as it consists of 
information compiled for the purposes of a criminal investigation or for 
other purposes within the scope of 5 U.S.C. 552a(j)(2), from the 
application of 5 U.S.C. 552a, except for subsections (b), (c) (1) and 
(2), (e)(4) (A) through (F), (e) (6), (7), (9), (10), (11) and (i).
    (b) OIG files compiled for other law enforcement purposes. Pursuant 
to 5 U.S.C. 552a(k)(2), the FLRA hereby exempts the system of records 
entitled, ``FLRA/OIG-1, Office of Inspector General Investigative 
Files,'' insofar as it consists of information compiled for law 
enforcement purposes other than material within the scope of 5 U.S.C. 
552a(j)(2), from the application of 5 U.S.C. 552a (c)(3), (d), (e)(1), 
(e)(4) (G), (H), and (I), and (f).

[56 FR 33189, July 19, 1991]



PART 2413_OPEN MEETINGS--Table of Contents




Sec.
2413.1 Purpose and scope.
2413.2 Public observation of meetings.
2413.3 Definition of meeting.
2413.4 Closing of meetings; reasons therefor.
2413.5 Action necessary to close meeting; record of votes.
2413.6 Notice of meetings; public announcement and publication.
2413.7 Transcripts, recordings or minutes of closed meeting; public 
          availability; retention.

    Authority: 5 U.S.C. 552b.

    Source: 45 FR 3494, Jan. 17, 1980, unless otherwise noted.



Sec. 2413.1  Purpose and scope.

    This part contains the regulations of the Federal Labor Relations 
Authority implementing the Government in the Sunshine Act, 5 U.S.C. 
552b.



Sec. 2413.2  Public observation of meetings.

    Every portion of every meeting of the Authority shall be open to 
public observation, except as provided in Sec. 2413.4, and Authority 
members shall not jointly conduct or dispose of agency business other 
than in accordance with the provisions of this part.



Sec. 2413.3  Definition of meeting.

    For purposes of this part, meeting shall mean the deliberations of 
at least two (2) members of the Authority where such deliberations 
determine or result in the joint conduct or disposition of official 
agency business, but does not include deliberations to determine whether 
a meeting should be closed to public observation in accordance with the 
provisions of this part.



Sec. 2413.4  Closing of meetings; reasons therefor.

    (a) Except where the Authority determines that the public interest 
requires otherwise, meetings, or portions thereof, shall not be open to 
public observation where the deliberations concern the issuance of a 
subpena, the Authority's participation in a civil action or proceeding 
or an arbitration, or the initiation, conduct or disposition by the 
Authority of particular cases of formal agency adjudication pursuant to 
the procedures in 5 U.S.C. 554 or otherwise involving a determination on 
the record after opportunity for a hearing, or any court proceedings 
collateral or ancillary thereto.
    (b) Meetings, or portions thereof, may also be closed by the 
Authority, except where it determines that the public interest requires 
otherwise, when the deliberations concern matters or information falling 
within the reasons for closing meetings specified in 5 U.S.C. 552b(c)(1) 
(secret matters concerning national defense or foreign policy); (c)(2) 
(internal personnel rules and practices); (c)(3) (matters specifically 
exempted from disclosure by statute); (c)(4) (privileged or confidential

[[Page 346]]

trade secrets and commercial or financial information); (c)(5) (matters 
of alleged criminal conduct or formal censure); (c)(6) (personal 
information where disclosure would cause a clearly unwarranted invasion 
of personal privacy); (c)(7) (certain materials or information from 
investigatory files compiled for law enforcement purposes); or (c)(9)(B) 
(disclosure would significantly frustrate implementation of a proposed 
agency action).



Sec. 2413.5  Action necessary to close meeting; record of votes.

    A meeting shall be closed to public observation under Sec. 2413.4, 
only when a majority of the members of the Authority who will 
participate in the meeting vote to take such action.
    (a) When the meeting deliberations concern matters specified in 
Sec. 2413.4(a), the Authority members shall vote at the beginning of 
the meeting, or portion thereof, on whether to close such meeting, or 
portion thereof, to public observation and on whether the public 
interest requires that a meeting which may properly be closed should 
nevertheless be open to public observation. A record of such vote, 
reflecting the vote of each member of the Authority, shall be kept and 
made available to the public at the earliest practicable time.
    (b) When the meeting deliberations concern matters specified in 
Sec. 2413.4(b), the Authority shall vote on whether to close such 
meeting, or portion thereof, to public observation, and on whether there 
is a public interest which requires that a meeting which may properly be 
closed should nevertheless be open to public observation. The vote shall 
be taken at a time sufficient to permit inclusion of information 
concerning the open or closed status of the meeting in the public 
announcement thereof. A single vote may be taken with respect to a 
series of meetings at which the deliberations will concern the same 
particular matters where such subsequent meetings are scheduled to be 
held within thirty (30) days after the initial meeting. A record of such 
vote, reflecting the vote of each member of the Authority, shall be kept 
and made available for the public within one (1) day after the vote is 
taken.
    (c) Whenever any person whose interests may be directly affected by 
deliberations during a meeting, or a portion thereof, requests that the 
Authority close that meeting, or portion thereof, to public observation 
for any of the reasons specified in 5 U.S.C. 552b(c)(5) (matters of 
alleged criminal conduct or formal censure), (c)(6) (personal 
information where disclosure would cause a clearly unwarranted invasion 
of personal privacy), or (c)(7) (certain materials or information from 
investigatory files compiled for law enforcement purposes), the 
Authority members participating in the meeting, upon request of any one 
of its members, shall vote on whether to close such meeting, or a 
portion thereof, for that reason. A record of such vote, reflecting the 
vote of each member of the Authority participating in the meeting, shall 
be kept and made available to the public within one (1) day after the 
vote is taken.
    (d) After public announcement of a meeting as provided in Sec. 
2413.6, a meeting, or portion thereof, announced as closed may be 
opened, or a meeting, or portion thereof, announced as open may be 
closed only if a majority of the members of the Authority who will 
participate in the meeting determine by a recorded vote that Authority 
business so requires and that an earlier announcement of the change was 
not possible. The change made and the vote of each member on the change 
shall be announced publicly at the earliest practicable time.
    (e) Before a meeting may be closed pursuant to Sec. 2413.4, the 
Solicitor of the Authority shall certify that in the Solicitor's opinion 
the meeting may properly be closed to public observation. The 
certification shall set forth each applicable exemptive provision for 
such closing. Such certification shall be retained by the agency and 
made publicly available as soon as practicable.



Sec. 2413.6  Notice of meetings; public announcement and publication.

    (a) A public announcement setting forth the time, place and subject 
matter of meetings, or portions thereof, closed to public observation 
pursuant to the provisions of Sec. 2413.4(a), shall be made at the 
earliest practicable time.

[[Page 347]]

    (b) Except for meetings closed to public observation pursuant to the 
provisions of Sec. 2413.4(a), the agency shall make public announcement 
of each meeting to be held at least seven (7) days before the scheduled 
date of the meeting. The announcement shall specify the time, place and 
subject matter of the meeting, whether it is to be open to public 
observation or closed, and the name, address, and phone number of an 
agency official designated to respond to requests for information about 
the meeting. The seven (7) day period for advance notice may be 
shortened only upon a determination by a majority of the members of the 
Authority who will participate in the meeting that agency business 
requires that such meeting be called at an earlier date, in which event 
the public announcements shall be made at the earliest practicable time. 
A record of the vote to schedule a meeting at an earlier date shall be 
kept and made available to the public.
    (c) Within one (1) day after a vote to close a meeting, or any 
portion thereof, pursuant to the provisions Sec. 2413.4(b), the agency 
shall make publicly available a full written explanation of its action 
closing the meeting, or portion thereof, together with a list of all 
persons expected to attend the meeting and their affiliation.
    (d) If after public announcement required by paragraph (b) of this 
section has been made, the time and place of the meeting are changed, a 
public announcement shall be made at the earliest practicable time. The 
subject matter of the meeting may be changed after the public 
announcement only if a majority of the members of the Authority who will 
participate in the meeting determine that agency business so requires 
and that no earlier announcement of the change was possible. When such a 
change in subject matter is approved, a public announcement of the 
change shall be made at the earliest practicable time. A record of the 
vote to change the subject matter of the meeting shall be kept and made 
available to the public.
    (e) All announcements or changes thereto issued pursuant to the 
provisions of paragraphs (b) and (d) of this section or pursuant to the 
provisions of Sec. 2413.5(d) shall be submitted for publication in the 
Federal Register immediately following their release to the public.
    (f) Announcements of meetings made pursuant to the provisions of 
this section shall be made publicly available by the Executive Director.



Sec. 2413.7  Transcripts, recordings or minutes of closed meeting; public 

availability; retention.

    (a) For every meeting, or portion thereof, closed under the 
provisions of Sec. 2413.4, the presiding officer shall prepare a 
statement setting forth the time and place of the meeting and the 
persons present, which statement shall be retained by the agency. For 
each such meeting, or portion thereof, there shall also be maintained a 
complete transcript or electronic recording of the proceedings, except 
that for meetings closed pursuant to Sec. 2413.4(a), the Authority may, 
in lieu of a transcript or electronic recording, maintain a set of 
minutes fully and accurately summarizing any action taken, the reasons 
therefor and views thereon, documents considered and the members' vote 
on each rollcall vote.
    (b) The agency shall make promptly available to the public copies of 
transcripts, recordings or minutes maintained as provided in accordance 
with paragraph (a) of this section, except to the extent the items 
therein contain information which the agency determines may be withheld 
pursuant to the provisions of 5 U.S.C. 552b(c). Copies of transcripts or 
minutes, or transcriptions of electronic recordings including the 
identification of speakers, shall to the extent determined to be 
publicly available, be furnished to any person, subject to the payment 
of duplication costs in accordance with the schedule of fees set forth 
in Sec. 2411.10 of this subchapter and the actual cost of 
transcription.
    (c) The agency shall maintain a complete verbatim copy of the 
transcript, a complete copy of the minutes, or a complete electronic 
recording of each meeting, or portion of a meeting, closed to the 
public, for a period of at least two (2) years after such meeting

[[Page 348]]

or until one (1) year after the conclusion of any agency proceeding with 
respect to which the meeting or portion was held whichever occurs later.



PART 2414_EX PARTE COMMUNICATIONS--Table of Contents




Sec.
2414.1 Purpose and scope.
2414.2 Unauthorized communications.
2414.3 Definitions.
2414.4 Duration of prohibition.
2414.5 Communications prohibited.
2414.6 Communications not prohibited.
2414.7 Solicitation of prohibited communications.
2414.8 Reporting of prohibited communications; penalties.
2414.9 Penalties and enforcement.

    Authority: 5 U.S.C. 7134.

    Source: 45 FR 3495, Jan. 17, 1980, unless otherwise noted.



Sec. 2414.1  Purpose and scope.

    This part contains the regulations of the Federal Labor Relations 
Authority relating to ex parte communications.



Sec. 2414.2  Unauthorized communications.

    (a) No interested person outside this agency shall, in any agency 
proceeding subject to 5 U.S.C. 557(a), make or knowingly cause to be 
made any prohibited ex parte communication to any Authority member, 
Administrative Law Judge, or other Authority employee who is or may 
reasonably be expected to be involved in the decisional process of the 
proceeding.
    (b) No Authority member, Administrative Law Judge, or other 
Authority employee who is or may reasonably be expected to be involved 
in the decisional process of the proceeding relevant to the merits of 
the proceeding shall: (1) Request any prohibited ex parte 
communications; or (2) make or knowingly cause to be made any prohibited 
ex parte communications about the proceeding to any interested person 
outside this agency relevant to the merits of the proceeding.



Sec. 2414.3  Definitions.

    When used in this part:
    (a) The term person outside this agency, to whom the prohibitions 
apply, shall include any individual outside the Authority, labor 
organization, agency, or other entity, or an agent thereof, and the 
General Counsel or his representative when prosecuting an unfair labor 
practice proceeding before the Authority pursuant to 5 U.S.C. 7118.
    (b) The term ex parte communication means an oral or written 
communication not on the public record with respect to which reasonable 
prior notice to all parties is not given, subject however, to the 
provisions of Sec. Sec. 2414.5 and 2414.6.



Sec. 2414.4  Duration of prohibition.

    Unless otherwise provided by specific order of the Authority entered 
in the proceeding, the prohibition of Sec. 2414.2 shall be applicable 
in any agency proceeding subject to 5 U.S.C. 557(a) beginning at the 
time of which the proceeding is noticed for hearing, unless the person 
responsible for the communication has knowledge that it will be noticed, 
in which case the prohibitions shall apply beginning at the time of such 
person's acquisition of such knowledge.



Sec. 2414.5  Communications prohibited.

    Except as provided in Sec. 2414.6, ex parte communications 
prohibited by Sec. 2414.2 shall include:
    (a) Such communications, when written, if copies thereof are not 
contemporaneously served by the communicator on all parties to the 
proceeding in accordance with the provisions of part 2429 of this 
chapter; and
    (b) Such communications, when oral, unless advance notice thereof is 
given by the communicator to all parties in the proceeding and adequate 
opportunity afforded to them to be present.



Sec. 2414.6  Communications not prohibited.

    Ex parte communications prohibited by Sec. 2414.2 shall not 
include:
    (a) Oral or written communications which relate solely to matters 
which the Hearing Officer, Regional Director, Administrative Law Judge, 
General Counsel or member of the Authority is authorized by law or 
Authority rules to entertain or dispose of on an ex parte basis;

[[Page 349]]

    (b) Oral or written requests for information solely with respect to 
the status of a proceeding;
    (c) Oral or written communications which all the parties to the 
proceeding agree, or which the responsible official formally rules, may 
be made on an ex parte basis;
    (d) Oral or written communications proposing settlement or an 
agreement for disposition of any or all issues in the proceeding;
    (e) Oral or written communications which concern matters of general 
significance to the field of labor-management relations or 
administrative practice and which are not specifically related to any 
agency proceeding subject to 5 U.S.C. 557(a); or
    (f) Oral or written communications from the General Counsel to the 
Authority when the General Counsel is acting on behalf of the Authority 
under 5 U.S.C. 7123(d).



Sec. 2414.7  Solicitation of prohibited communications.

    No person shall knowingly and willfully solicit the making of an 
unauthorized ex parte communication by any other person.



Sec. 2414.8  Reporting of prohibited communications; penalties.

    (a) Any Authority member, Administrative Law Judge, or other 
Authority employee who is or may reasonably be expected to be involved 
in the decisional process of the proceeding relevant to the merits of 
the proceeding to whom a prohibited oral ex parte communication is 
attempted to be made, shall refuse to listen to the communication, 
inform the communicator of this rule, and advise such person that if the 
person has anything to say it should be said in writing with copies to 
all parties. Any such Authority member, Administrative Law Judge, or 
other Authority employee who is or may reasonably be expected to be 
involved in the decisional process of the proceeding relevant to the 
merits of the proceeding who receives, or who makes or knowingly causes 
to be made, an unauthorized ex parte communication, shall place or cause 
to be placed on the public record of the proceeding: (1) The 
communication, if it was written; (2) a memorandum stating the substance 
of the communication, if it was oral; (3) all written responses to the 
prohibited communication; and (4) memoranda stating the substance of all 
oral responses to the prohibited communication. The Executive Director, 
if the proceeding is then pending before the Authority, the 
Administrative Law Judge, if the proceeding is then pending before any 
such judge, or the Regional Director, if the proceeding is then pending 
before a Hearing Officer or the Regional Director, shall serve copies of 
all such materials placed on the public record of the proceeding on all 
other parties to the proceeding and on the attorneys of record for the 
parties. Within ten (10) days after the mailing of such copies, any 
party may file with the Executive Director, Administrative Law Judge, or 
Regional Director serving the communication, as appropriate, and serve 
on all other parties, a statement setting forth facts or contentions to 
rebut those contained in the prohibited communication. All such 
responses shall be placed in the public record of the proceeding, and 
provision may be made for any further action, including reopening of the 
record, which may be required under the circumstances. No action taken 
pursuant to this provision shall constitute a waiver of the power of the 
Authority to impose an appropriate penalty under Sec. 2414.9.



Sec. 2414.9  Penalties and enforcement.

    (a) Where the nature and circumstances of a prohibited communication 
made by or caused to be made by a party to the proceeding are such that 
the interests of justice and statutory policy may require remedial 
action, the Authority, Administrative Law Judge, or Regional Director, 
as appropriate, may issue to the party making the communication a notice 
to show cause, returnable before the Authority, Administrative Law 
Judge, or Regional Director, within a stated period not less than seven 
(7) days from the date thereof, why the Authority, Administrative Law 
Judge, or Regional Director should not determine that the interests of 
justice and statutory policy require that the claim or interest

[[Page 350]]

in the proceeding of a party who knowingly makes a prohibited 
communication or knowingly causes a prohibited communication to be made, 
should be dismissed, denied, disregarded or otherwise adversely affected 
on account of such violation.
    (b) Upon notice and hearing, the Authority may censure, suspend, or 
revoke the privilege of practice before the agency of any person who 
knowingly and willfully makes or solicits the making of a prohibited ex 
parte communication. However, before the Authority institutes formal 
proceedings under this subsection, it shall first advise the person or 
persons concerned in writing that it proposes to take such action and 
that they may show cause, within a period to be stated in such written 
advice, but not less than seven (7) days from the date thereof, why it 
should not take such action.
    (c) The Authority may censure, or, to the extent permitted by law, 
suspend, dismiss, or institute proceedings for the dismissal of, any 
Authority agent who knowingly and willfully violates the prohibitions 
and requirements of this rule.



PART 2415_EMPLOYEE RESPONSIBILITIES AND CONDUCT--Table of Contents




    Authority: E.O. 11222, 30 FR 6469, 3 CFR, 1964-65 Comp., p. 306; 5 
CFR 735.101 et seq. and 737.1 et seq.; Pub L. 95-521; 44 FR 19974.



Sec. 2415.1  Employee responsibilities and conduct.

    The Federal Labor Relations Authority, the General Counsel of the 
Federal Labor Relations Authority and the Federal Service Impasses 
Panel, respectively, hereby adopt the rules and regulations contained in 
parts 735 and 737 of title 5 of the Code of Federal Regulations, 
prescribing standards of conduct and responsibilities, and governing 
statements reporting employment and financial interests for officers and 
employees, including special Government employees, for application, as 
appropriate, to the officers and employees, including special Government 
employees, of the Authority, the General Counsel and the Panel.

[45 FR 3496, Jan. 17, 1980]



PART 2416_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN 

PROGRAMS OR ACTIVITIES CONDUCTED BY THE FEDERAL LABOR RELATIONS AUTHORITY--

Table of Contents




Sec.
2416.101 Purpose.
2416.102 Application.
2416.103 Definitions.
2416.104-2416.109 [Reserved]
2416.110 Self-evaluation.
2416.111 Notice.
2416.112-2416.129 [Reserved]
2416.130 General prohibitions against discrimination.
2416.131-2416.139 [Reserved]
2416.140 Employment.
2416.141-2416.148 [Reserved]
2416.149 Program accessibility: Discrimination prohibited.
2416.150 Program accessibility: Existing facilities.
2416.151 Program accessibility: New construction and alterations.
2416.152-2416.159 [Reserved]
2416.160 Communications.
2416.161-2416.169 [Reserved]
2416.170 Compliance procedures.
2416.171-2416.999 [Reserved]

    Authority: 29 U.S.C. 794.

    Source: 53 FR 25881, 25885, July 8, 1988, unless otherwise noted.



Sec. 2416.101  Purpose.

    The purpose of this regulation is to effectuate section 119 of the 
Rehabilitation, Comprehensive Services, and Developmental Disabilities 
Amendments of 1978, which amended section 504 of the Rehabilitation Act 
of 1973 to prohibit discrimination on the basis of handicap in programs 
or activities conducted by Executive agencies or the United States 
Postal Service.



Sec. 2416.102  Application.

    This regulation (Sec. Sec. 2416.101-2416.170) applies to all 
programs or activities conducted by the agency, except for programs or 
activities conducted outside the United States that do not involve 
individuals with handicaps in the United States.

[[Page 351]]



Sec. 2416.103  Definitions.

    For purposes of this regulation, the term--
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Auxiliary aids means services or devices that enable persons with 
impaired sensory, manual, or speaking skills to have an equal 
opportunity to participate in, and enjoy the benefits of, programs or 
activities conducted by the agency. For example, auxiliary aids useful 
for persons with impaired vision include readers, Brailled materials, 
audio recordings, and other similar services and devices. Auxiliary aids 
useful for persons with impaired hearing include telephone handset 
amplifiers, telephones compatible with hearing aids, telecommunication 
devices for deaf persons (TDD's), interpreters, notetakers, written 
materials, and other similar services and devices.
    Complete complaint means a written statement that contains the 
complainant's name and address and describes the agency's alleged 
discriminatory action in sufficient detail to inform the agency of the 
nature and date of the alleged violation of section 504. It shall be 
signed by the complainant or by someone authorized to do so on his or 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Facility means all or any portion of buildings, structures, 
equipment, roads, walks, parking lots, rolling stock or other 
conveyances, or other real or personal property.
    Historic preservation programs means programs conducted by the 
agency that have preservation of historic properties as a primary 
purpose.
    Historic properties means those properties that are listed or 
eligible for listing in the National Register of Historic Places or 
properties designated as historic under a statute of the appropriate 
State or local government body.
    Individual with handicaps means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of such an impairment, or is regarded as having 
such an impairment.
    As used in this definition, the phrase:
    (1) Physical or mental impairment includes--
    (i) Any physiological disorder or condition, cosmetic disfigurement, 
or anatomical loss affecting one or more of the following body systems: 
Neurological; musculoskeletal; special sense organs; respiratory, 
including speech organs; cardiovascular; reproductive; digestive; 
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental 
retardation, organic brain syndrome, emotional or mental illness, and 
specific learning disabilities. The term physical or mental impairment 
includes, but is not limited to, such diseases and conditions as 
orthopedic, visual, speech, and hearing impairments, cerebral palsy, 
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, 
diabetes, mental retardation, emotional illness, and drug addiction and 
alcoholism.
    (2) Major life activities includes functions such as caring for 
one's self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or 
has been misclassified as having, a mental or physical impairment that 
substantially limits one or more major life activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially 
limit major life activities but is treated by the agency as constituting 
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits 
major life activities only as a result of the attitudes of others toward 
such impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this 
definition but is treated by the agency as having such an impairment.
    Qualified individual with handicaps means--
    (1) With respect to preschool, elementary, or secondary education 
services provided by the agency, an individual with handicaps who is a 
member of a class of persons otherwise entitled by

[[Page 352]]

statute, regulation, or agency policy to receive education services from 
the agency;
    (2) With respect to any other agency program or activity under which 
a person is required to perform services or to achieve a level of 
accomplishment, an individual with handicaps who meets the essential 
eligibility requirements and who can achieve the purpose of the program 
or activity without modifications in the program or activity that the 
agency can demonstrate would result in a fundamental alteration in its 
nature;
    (3) With respect to any other program or activity, an individual 
with handicaps who meets the essential eligibility requirements for 
participation in, or receipt of benefits from, that program or activity; 
and
    (4) Qualified handicapped person as that term is defined for 
purposes of employment in 29 CFR 1613.702(f), which is made applicable 
to this regulation by Sec. 2416.140.
    Section 504 means section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the 
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617); 
the Rehabilitation, Comprehensive Services, and Developmental 
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); and the 
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810). 
As used in this regulation, section 504 applies only to programs or 
activities conducted by Executive agencies and not to federally assisted 
programs.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.



Sec. Sec. 2416.104-2416.109  [Reserved]



Sec. 2416.110  Self-evaluation.

    (a) The agency shall, by September 6, 1989, evaluate its current 
policies and practices, and the effects thereof, that do not or may not 
meet the requirements of this regulation and, to the extent modification 
of any such policies and practices is required, the agency shall proceed 
to make the necessary modifications.
    (b) The agency shall provide an opportunity to interested persons, 
including individuals with handicaps or organizations representing 
individuals with handicaps, to participate in the self-evaluation 
process by submitting comments (both oral and written).
    (c) The agency shall, for at least three years following completion 
of the self-evaluation, maintain on file and make available for public 
inspection:
    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made.



Sec. 2416.111  Notice.

    The agency shall make available to employees, applicants, 
participants, beneficiaries, and other interested persons such 
information regarding the provisions of this regulation and its 
applicability to the programs or activities conducted by the agency, and 
make such information available to them in such manner as the head of 
the agency finds necessary to apprise such persons of the protections 
against discrimination assured them by section 504 and this regulation.



Sec. Sec. 2416.112-2416.129  [Reserved]



Sec. 2416.130  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of 
handicap, be excluded from participation in, be denied the benefits of, 
or otherwise be subjected to discrimination under any program or 
activity conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may 
not, directly or through contractual, licensing, or other arrangements, 
on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to 
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to 
participate in or benefit from the aid, benefit, or service that is not 
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid, 
benefit, or

[[Page 353]]

service that is not as effective in affording equal opportunity to 
obtain the same result, to gain the same benefit, or to reach the same 
level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to 
individuals with handicaps or to any class of individuals with handicaps 
than is provided to others unless such action is necessary to provide 
qualified individuals with handicaps with aid, benefits, or services 
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to 
participate as a member of planning or advisory boards;
    (vi) Otherwise limit a qualified individual with handicaps in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service.
    (2) The agency may not deny a qualified individual with handicaps 
the opportunity to participate in programs or activities that are not 
separate or different, despite the existence of permissibly separate or 
different programs or activities.
    (3) The agency may not, directly or through contractual or other 
arrangements, utilize criteria or methods of administration the purpose 
or effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination 
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives 
of a program or activity with respect to individuals with handicaps.
    (4) The agency may not, in determining the site or location of a 
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits 
of, or otherwise subject them to discrimination under any program or 
activity conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the 
objectives of a program or activity with respect to individuals with 
handicaps.
    (5) The agency, in the selection of procurement contractors, may not 
use criteria that subject qualified individuals with handicaps to 
discrimination on the basis of handicap.
    (6) The agency may not administer a licensing or certification 
program in a manner that subjects qualified individuals with handicaps 
to discrimination on the basis of handicap, nor may the agency establish 
requirements for the programs or activities of licensees or certified 
entities that subject qualified individuals with handicaps to 
discrimination on the basis of handicap. However, the programs or 
activities of entities that are licensed or certified by the agency are 
not, themselves, covered by this regulation.
    (c) The exclusion of nonhandicapped persons from the benefits of a 
program limited by Federal statute or Executive order to individuals 
with handicaps or the exclusion of a specific class of individuals with 
handicaps from a program limited by Federal statute or Executive order 
to a different class of individuals with handicaps is not prohibited by 
this regulation.
    (d) The agency shall administer programs and activities in the most 
integrated setting appropriate to the needs of qualified individuals 
with handicaps.



Sec. Sec. 2416.131-2416.139  [Reserved]



Sec. 2416.140  Employment.

    No qualified individual with handicaps shall, on the basis of 
handicap, be subject to discrimination in employment under any program 
or activity conducted by the agency. The definitions, requirements, and 
procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 
791), as established by the Equal Employment Opportunity Commission in 
29 CFR part 1613, shall apply to employment in federally conducted 
programs or activities.



Sec. Sec. 2416.141-2416.148  [Reserved]



Sec. 2416.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 2416.150, no qualified 
individual with handicaps shall, because the agency's facilities are 
inaccessible to or unusable by individuals with handicaps, be denied the 
benefits of, be excluded from

[[Page 354]]

participation in, or otherwise be subjected to discrimination under any 
program or activity conducted by the agency.



Sec. 2416.150  Program accessibility: Existing facilities.

    (a) General. The agency shall operate each program or activity so 
that the program or activity, when viewed in its entirety, is readily 
accessible to and usable by individuals with handicaps. This paragraph 
does not--
    (1) Necessarily require the agency to make each of its existing 
facilities accessible to and usable by individuals with handicaps;
    (2) In the case of historic preservation programs, require the 
agency to take any action that would result in a substantial impairment 
of significant historic features of an historic property; or
    (3) Require the agency to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a program or 
activity or in undue financial and administrative burdens. In those 
circumstances where agency personnel believe that the proposed action 
would fundamentally alter the program or activity or would result in 
undue financial and administrative burdens, the agency has the burden of 
proving that compliance with Sec. 2416.150(a) would result in such 
alteration or burdens. The decision that compliance would result in such 
alteration or burdens must be made by the agency head or his or her 
designee after considering all agency resources available for use in the 
funding and operation of the conducted program or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, the agency shall take any other action that would not result in 
such an alteration or such burdens but would nevertheless ensure that 
individuals with handicaps receive the benefits and services of the 
program or activity.
    (b) Methods--(1) General. The agency may comply with the 
requirements of this section through such means as redesign of 
equipment, reassignment of services to accessible buildings, assignment 
of aides to beneficiaries, home visits, delivery of services at 
alternate accessible sites, alteration of existing facilities and 
construction of new facilities, use of accessible rolling stock, or any 
other methods that result in making its programs or activities readily 
accessible to and usable by individuals with handicaps. The agency is 
not required to make structural changes in existing facilities where 
other methods are effective in achieving compliance with this section. 
The agency, in making alterations to existing buildings, shall meet 
accessibility requirements to the extent compelled by the Architectural 
Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any 
regulations implementing it. In choosing among available methods for 
meeting the requirements of this section, the agency shall give priority 
to those methods that offer programs and activities to qualified 
individuals with handicaps in the most integrated setting appropriate.
    (2) Historic preservation programs. In meeting the requirements of 
Sec. 2416.150(a) in historic preservation programs, the agency shall 
give priority to methods that provide physical access to individuals 
with handicaps. In cases where a physical alteration to an historic 
property is not required because of Sec. 2416.150(a) (2) or (3), 
alternative methods of achieving program accessibility include--
    (i) Using audio-visual materials and devices to depict those 
portions of an historic property that cannot otherwise be made 
accessible;
    (ii) Assigning persons to guide individuals with handicaps into or 
through portions of historic properties that cannot otherwise be made 
accessible; or
    (iii) Adopting other innovative methods.
    (c) Time period for compliance. The agency shall comply with the 
obligations established under this section by November 7, 1988, except 
that where structural changes in facilities are undertaken, such changes 
shall be made by September 6, 1991, but in any event as expeditiously as 
possible.
    (d) Transition plan. In the event that structural changes to 
facilities will be

[[Page 355]]

undertaken to achieve program accessibility, the agency shall develop, 
by March 6, 1989, a transition plan setting forth the steps necessary to 
complete such changes. The agency shall provide an opportunity to 
interested persons, including individuals with handicaps or 
organizations representing individuals with handicaps, to participate in 
the development of the transition plan by submitting comments (both oral 
and written). A copy of the transition plan shall be made available for 
public inspection. The plan shall, at a minimum--
    (1) Identify physical obstacles in the agency's facilities that 
limit the accessibility of its programs or activities to individuals 
with handicaps;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
compliance with this section and, if the time period of the transition 
plan is longer than one year, identify steps that will be taken during 
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the 
plan.



Sec. 2416.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered 
by, on behalf of, or for the use of the agency shall be designed, 
constructed, or altered so as to be readily accessible to and usable by 
individuals with handicaps. The definitions, requirements, and standards 
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established 
in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this 
section.



Sec. Sec. 2416.152-2416.159  [Reserved]



Sec. 2416.160  Communications.

    (a) The agency shall take appropriate steps to ensure effective 
communication with applicants, participants, personnel of other Federal 
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where 
necessary to afford an individual with handicaps an equal opportunity to 
participate in, and enjoy the benefits of, a program or activity 
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the 
agency shall give primary consideration to the requests of the 
individual with handicaps.
    (ii) The agency need not provide individually prescribed devices, 
readers for personal use or study, or other devices of a personal 
nature.
    (2) Where the agency communicates with applicants and beneficiaries 
by telephone, telecommunication devices for deaf persons (TDD's) or 
equally effective telecommunication systems shall be used to communicate 
with persons with impaired hearing.
    (b) The agency shall ensure that interested persons, including 
persons with impaired vision or hearing, can obtain information as to 
the existence and location of accessible services, activities, and 
facilities.
    (c) The agency shall provide signage at a primary entrance to each 
of its inaccessible facilities, directing users to a location at which 
they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each primary 
entrance of an accessible facility.
    (d) This section does not require the agency to take any action that 
it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and administrative 
burdens. In those circumstances where agency personnel believe that the 
proposed action would fundamentally alter the program or activity or 
would result in undue financial and administrative burdens, the agency 
has the burden of proving that compliance with Sec. 2416.160 would 
result in such alteration or burdens. The decision that compliance would 
result in such alteration or burdens must be made by the agency head or 
his or her designee after considering all agency resources available for 
use in the funding and operation of the conducted program or activity 
and must be accompanied by a written statement of the reasons for 
reaching that conclusion. If an action required to comply with this 
section would result in such an alteration or such burdens, the agency 
shall take any other action

[[Page 356]]

that would not result in such an alteration or such burdens but would 
nevertheless ensure that, to the maximum extent possible, individuals 
with handicaps receive the benefits and services of the program or 
activity.



Sec. Sec. 2416.161-2416.169  [Reserved]



Sec. 2416.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this 
section applies to all allegations of discrimination on the basis of 
handicap in programs and activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of 
section 504 with respect to employment according to the procedures 
established by the Equal Employment Opportunity Commission in 29 CFR 
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791).
    (c) The Director, Equal Employment Opportunity, shall be responsible 
for coordinating implementation of this section. Complaints may be sent 
to Director, Equal Employment Opportunity, Federal Labor Relations 
Authority, 1400 K Street, NW., Washington, DC 20424-0001.
    (d) The agency shall accept and investigate all complete complaints 
for which it has jurisdiction. All complete complaints must be filed 
within 180 days of the alleged act of discrimination. The agency may 
extend this time period for good cause.
    (e) If the agency receives a complaint over which it does not have 
jurisdiction, it shall promptly notify the complainant and shall make 
reasonable efforts to refer the complaint to the appropriate Government 
entity.
    (f) The agency shall notify the Architectural and Transportation 
Barriers Compliance Board upon receipt of any complaint alleging that a 
building or facility that is subject to the Architectural Barriers Act 
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to 
and usable by individuals with handicaps.
    (g) Within 180 days of the receipt of a complete complaint for which 
it has jurisdiction, the agency shall notify the complainant of the 
results of the investigation in a letter containing--
    (1) Findings of fact and conclusions of law;
    (2) A description of a remedy for each violation found; and
    (3) A notice of the right to appeal.
    (h) Appeals of the findings of fact and conclusions of law or 
remedies must be filed by the complainant within 90 days of receipt from 
the agency of the letter required by Sec. 2416.170(g). The agency may 
extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the head of 
the agency.
    (j) The head of the agency shall notify the complainant of the 
results of the appeal within 60 days of the receipt of the request. If 
the head of the agency determines that additional information is needed 
from the complainant, he or she shall have 60 days from the date of 
receipt of the additional information to make his or her determination 
on the appeal.
    (k) The time limits cited in paragraphs (g) and (j) of this section 
may be extended with the permission of the Assistant Attorney General.
    (l) The agency may delegate its authority for conducting complaint 
investigations to other Federal agencies, except that the authority for 
making the final determination may not be delegated to another agency.

[53 FR 25881 and 25885, July 8, 1988, as amended at 53 FR 25881, July 8, 
1988; 68 FR 10953, Mar. 7, 2003]



Sec. Sec. 2416.171-2416.999  [Reserved]

[[Page 357]]



 SUBCHAPTER C_FEDERAL LABOR RELATIONS AUTHORITY AND GENERAL COUNSEL OF 
                  THE FEDERAL LABOR RELATIONS AUTHORITY



PART 2420_PURPOSE AND SCOPE--Table of Contents




    Authority: 3 U.S.C. 431; 5 U.S.C. 7134.



Sec. 2420.1  Purpose and scope.

    The regulations contained in this subchapter are designed to 
implement the provisions of chapter 71 of title 5 and, where applicable, 
section 431 of title 3 of the United States Code. They prescribe the 
procedures, basic principles or criteria under which the Federal Labor 
Relations Authority or the General Counsel of the Federal Labor 
Relations Authority, as applicable, will:
    (a) Determine the appropriateness of units for labor organization 
representation under 5 U.S.C. 7112;
    (b) Supervise or conduct elections to determine whether a labor 
organization has been selected as an exclusive representative by a 
majority of the employees in an appropriate unit and otherwise 
administer the provisions of 5 U.S.C. 7111 relating to the according of 
exclusive recognition to labor organizations;
    (c) Resolve issues relating to the granting of national consultation 
rights under 5 U.S.C. 7113;
    (d) Resolve issues relating to determining compelling need for 
agency rules and regulations under 5 U.S.C. 7117(b);
    (e) Resolve issues relating to the duty to bargain in good faith 
under 5 U.S.C. 7117(c);
    (f) Resolve issues relating to the granting of consultation rights 
with respect to conditions of employment under 5 U.S.C. 7117(d);
    (g) Conduct hearings and resolve complaints of unfair labor 
practices under 5 U.S.C. 7118;
    (h) Resolve exceptions to arbitrators' awards under 5 U.S.C. 7122; 
and
    (i) Take such other actions as are necessary and appropriate 
effectively to administer the provisions of chapter 71 of title 5 of the 
United States Code.

[45 FR 3497, Jan. 17, 1980, as amended at 63 FR 46158, Aug. 31, 1998]



PART 2421_MEANING OF TERMS AS USED IN THIS SUBCHAPTER--Table of Contents




Sec.
2421.1 Federal Service Labor-Management Relations Statute.
2421.2 Terms defined in 5 U.S.C. 7103(a); General Counsel; Assistant 
          Secretary.
2421.3 National consultation rights; consultation rights on Government-
          wide rules or regulations; exclusive recognition; unfair labor 
          practices.
2421.4 Activity.
2421.5 Primary national subdivision.
2421.6 Regional Director.
2421.7 Executive Director.
2421.8 Hearing Officer.
2421.9 Administrative Law Judge.
2421.10 Chief Administrative Law Judge.
2421.11 Party.
2421.12 Intervenor.
2421.13 Certification.
2421.14 Appropriate unit.
2421.15 Secret ballot.
2421.16 Showing of interest.
2421.17 Regular and substantially equivalent employment.
2421.18 Petitioner.
2421.19 Eligibility period.
2421.20 Election agreement.
2421.21 Affected by issues raised.
2421.22 Determinative challenged ballots.

    Authority: 3 U.S.C. 431; 5 U.S.C. 7134.

    Source: 45 FR 3497, Jan. 17, 1980, unless otherwise noted.



Sec. 2421.1  Federal Service Labor-Management Relations Statute.

    The term Federal Service Labor-Management Relations Statute means 
chapter 71 of title 5 of the United States Code.



Sec. 2421.2  Terms defined in 5 U.S.C. 7103(a); General Counsel; Assistant Secretary.

    (a) The terms person, employee, agency, labor organization, dues, 
Authority, Panel, collective bargaining agreement, grievance, 
supervisor, management official, collective bargaining, confidential

[[Page 358]]

employee, conditions of employment, professional employee, exclusive 
representative, firefighter, and United States, as used in this 
subchapter shall have the meanings set forth in 5 U.S.C. 7103(a). The 
terms covered employee, employee, employing office, and agency, when 
used in connection with the Presidential and Executive Office 
Accountability Act, 3 U.S.C. 401 et seq., shall have the meaning set out 
in 3 U.S.C. 401(b), and 431(b) and (d)(2). Employees who are employed in 
the eight offices listed in 3 U.S.C. 431(d)(2) shall be excluded from 
coverage if the Authority determines that such exclusion is required 
because of a conflict of interest, an appearance of a conflict of 
interest, or the President's or Vice President's constitutional 
responsibilities, in addition to the exemptions currently set forth in 5 
U.S.C. 7103(a).
    (b) The term General Counsel means the General Counsel of the 
Authority.
    (c) The term Assistant Secretary means the Assistant Secretary of 
Labor for Labor-Management Relations.

[45 FR 3497, Jan. 17, 1980, as amended at 63 FR 46158, Aug. 31, 1998]



Sec. 2421.3  National consultation rights; consultation rights on Government-

wide rules or regulations; exclusive recognition; unfair labor practices.

    (a) National consultation rights has the meaning as set forth in 5 
U.S.C. 7113;
    (b) Consultation rights on Government-wide rules or regulations has 
the meaning as set forth in 5 U.S.C. 7117(d);
    (c) Exclusive recognition has the meaning as set forth in 5 U.S.C. 
7111; and
    (d) Unfair labor practices has the meaning as set forth in 5 U.S.C. 
7116.



Sec. 2421.4  Activity.

    Activity means any facility, organizational entity, or geographical 
subdivision or combination thereof, of any agency.



Sec. 2421.5  Primary national subdivision.

    Primary national subdivision of an agency means a first-level 
organizational segment which has functions national in scope that are 
implemented in field activities.



Sec. 2421.6  Regional Director.

    Regional Director means the Director of a region of the Authority 
with geographical boundaries as fixed by the Authority.



Sec. 2421.7  Executive Director.

    Executive Director means the Executive Director of the Authority.



Sec. 2421.8  Hearing Officer.

    Hearing Officer means the individual designated to conduct a hearing 
involving a question concerning the appropriateness of a unit or such 
other matters as may be assigned.



Sec. 2421.9  Administrative Law Judge.

    Administrative Law Judge means the Chief Administrative Law Judge or 
any Administrative Law Judge designated by the Chief Administrative Law 
Judge to conduct a hearing in cases under 5 U.S.C. 7116, and such other 
matters as may be assigned.



Sec. 2421.10  Chief Administrative Law Judge.

    Chief Administrative Law Judge means the Chief Administrative Law 
Judge of the Authority.



Sec. 2421.11  Party.

    Party means:
    (a) Any labor organization, employing agency or activity or 
individual filing a charge, petition, or request;
    (b) Any labor organization or agency or activity
    (1) Named as
    (i) A charged party in a charge,
    (ii) A respondent in a complaint, or
    (iii) An employing agency or activity or an incumbent labor 
organization in a petition;
    (2) Whose intervention in a proceeding has been permitted or 
directed by the Authority; or
    (3) Who participated as a party
    (i) In a matter that was decided by an agency head under 5 U.S.C. 
7117, or
    (ii) In a matter where the award of an arbitrator was issued; and
    (c) The General Counsel, or the General Counsel's designated 
representative, in appropriate proceedings.

[60 FR 67291, Dec. 29, 1995]

[[Page 359]]



Sec. 2421.12  Intervenor.

    Intervenor means a party in a proceeding whose intervention has been 
permitted or directed by the Authority, its agents or representatives.



Sec. 2421.13  Certification.

    Certification means the determination by the Authority, its agents 
or representatives, of the results of an election, or the results of a 
petition to consolidate existing exclusively recognized units.



Sec. 2421.14  Appropriate unit.

    Appropriate unit means that grouping of employees found to be 
appropriate for purposes of exclusive recognition under 5 U.S.C. 7111, 
and for purposes of allotments to representatives under 5 U.S.C. 
7115(c), and consistent with the provisions of 5 U.S.C. 7112. In 
determining an appropriate unit in a proceeding under part 2422 of this 
Chapter, for the eight offices listed in 3 U.S.C. 431(d)(2), employees 
shall be excluded from the unit if it is determined that such exclusion 
is required because of a conflict of interest or appearance of a 
conflict of interest or because of the President's or Vice President's 
constitutional responsibilities, in addition to the standards set out in 
5 U.S.C. 7112.

[63 FR 46158, Aug. 31, 1998]



Sec. 2421.15  Secret ballot.

    Secret ballot means the expression by ballot, voting machine or 
otherwise, but in no event by proxy, of a choice with respect to any 
election or vote taken upon any matter, which is cast in such a manner 
that the person expressing such choice cannot be identified with the 
choice expressed, except in that instance in which any determinative 
challenged ballot is opened.



Sec. 2421.16  Showing of interest.

    Showing of interest means evidence of membership in a labor 
organization; employees' signed and dated authorization cards or 
petitions authorizing a labor organization to represent them for 
purposes of exclusive recognition; allotment of dues forms executed by 
an employee and the labor organization's authorized official; current 
dues records; an existing or recently expired agreement; current 
exclusive recognition or certification; employees' signed and dated 
petitions or cards indicating that they no longer desire to be 
represented for the purposes of exclusive recognition by the currently 
recognized or certified labor organization; employees' signed and dated 
petitions or cards indicating a desire that an election be held on a 
proposed consolidation of units; or other evidence approved by the 
Authority.



Sec. 2421.17  Regular and substantially equivalent employment.

    Regular and substantially equivalent employment means employment 
that entails substantially the same amount of work, rate of pay, hours, 
working conditions, location of work, kind of work, and seniority 
rights, if any, of an employee prior to the cessation of employment in 
an agency because of any unfair labor practice under 5 U.S.C. 7116.



Sec. 2421.18  Petitioner.

    Petitioner means the party filing a petition under part 2422 of this 
subchapter.

[60 FR 67291, Dec. 29, 1995]



Sec. 2421.19  Eligibility period.

    Eligibility period means the payroll period during which an employee 
must be in an employment status with an agency or activity in order to 
be eligible to vote in a representation election under part 2422 of this 
subchapter.

[60 FR 67291, Dec. 29, 1995]



Sec. 2421.20  Election agreement.

    Election agreement means an agreement under part 2422 of this 
subchapter signed by all the parties, and approved by the Regional 
Director, concerning the details and procedures of a representation 
election in an appropriate unit.

[60 FR 67291, Dec. 29, 1995]



Sec. 2421.21  Affected by issues raised.

    The phrase affected by issues raised, as used in part 2422, should 
be construed broadly to include parties and other

[[Page 360]]

labor organizations, or agencies or activities that have a connection to 
employees affected by, or questions presented in, a proceeding.

[60 FR 67291, Dec. 29, 1995]



Sec. 2421.22  Determinative challenged ballots.

    Determinative challenged ballots are challenges that are unresolved 
prior to the tally and sufficient in number after the tally to affect 
the results of the election.

[60 FR 67291, Dec. 29, 1995]



PART 2422_REPRESENTATION PROCEEDINGS--Table of Contents




Sec.
2422.1 Purposes of a petition.
2422.2 Standing to file a petition.
2422.3 Contents of a petition.
2422.4 Service requirements.
2422.5 Filing petitions.
2422.6 Notification of filing.
2422.7 Posting notice of filing of a petition.
2422.8 Intervention and cross-petitions.
2422.9 Adequacy of showing of interest.
2422.10 Validity of showing of interest.
2422.11 Challenge to the status of a labor organization.
2422.12 Timeliness of petitions seeking an election.
2422.13 Resolution of issues raised by a petition.
2422.14 Effect of withdrawal/dismissal.
2422.15 Duty to furnish information and cooperate.
2422.16 Election agreements or directed elections.
2422.17 Notice of hearing and prehearing conference.
2422.18 Hearing procedures.
2422.19 Motions.
2422.20 Rights of parties at a hearing.
2422.21 Duties and powers of the Hearing Officer.
2422.22 Objections to the conduct of the hearing.
2422.23 Election procedures.
2422.24 Challenged ballots.
2422.25 Tally of ballots.
2422.26 Objections to the election.
2422.27 Determinative challenged ballots and objections.
2422.28 Runoff elections.
2422.29 Inconclusive elections.
2422.30 Regional Director investigations, notices of hearings, actions, 
          and Decisions and Orders.
2422.31 Application for review of a Regional Director Decision and 
          Order.
2422.32 Certifications and revocations.
2422.33 Relief obtainable under part 2423.
2422.34 Rights and obligations during the pendency of representation 
          proceedings.

    Authority: 3 U.S.C. 431; 5 U.S.C. 7134.

    Source: 60 FR 67291, Dec. 29, 1995, unless otherwise noted.



Sec. 2422.1  Purposes of a petition.

    A petition may be filed for the following purposes:
    (a) Elections or Eligibility for dues allotment. To request:
    (1)(i) An election to determine if employees in an appropriate unit 
wish to be represented for the purpose of collective bargaining by an 
exclusive representative, and/or
    (ii) A determination of eligibility for dues allotment in an 
appropriate unit without an exclusive representative; or
    (2) an election to determine if employees in a unit no longer wish 
to be represented for the purpose of collective bargaining by an 
exclusive representative.
    (3) Petitions under this subsection must be accompanied by an 
appropriate showing of interest.
    (b) Clarification or Amendment. To clarify, and/or amend:
    (1) A recognition or certification then in effect; and/or
    (2) Any other matter relating to representation.
    (c) Consolidation. To consolidate two or more units, with or without 
an election, in an agency and for which a labor organization is the 
exclusive representative.



Sec. 2422.2  Standing to file a petition.

    A representation petition may be filed by: an individual; a labor 
organization; two or more labor organizations acting as a joint-
petitioner; an individual acting on behalf of any employee(s); an agency 
or activity; or a combination of the above: Provided, however, that
    (a) Only a labor organization has standing to file a petition 
pursuant to section 2422.1(a)(1);
    (b) Only an individual has standing to file a petition pursuant to 
section 2422.1(a)(2); and
    (c) Only an agency or a labor organization may file a petition 
pursuant to section 2422.1(b) or (c).

[[Page 361]]



Sec. 2422.3  Contents of a petition.

    (a) What to file. A petition must be filed on a form prescribed by 
the Authority and contain the following information:
    (1) The name and mailing address for each agency or activity 
affected by issues raised in the petition, including street number, 
city, state and zip code.
    (2) The name, mailing address and work telephone number of the 
contact person for each agency or activity affected by issues raised in 
the petition.
    (3) The name and mailing address for each labor organization 
affected by issues raised in the petition, including street number, 
city, state and zip code. If a labor organization is affiliated with a 
national organization, the local designation and the national 
affiliation should both be included. If a labor organization is an 
exclusive representative of any of the employees affected by issues 
raised in the petition, the date of the recognition or certification and 
the date any collective bargaining agreement covering the unit will 
expire or when the most recent agreement did expire should be included, 
if known.
    (4) The name, mailing address and work telephone number of the 
contact person for each labor organization affected by issues raised in 
the petition.
    (5) The name and mailing address for the petitioner, including 
street number, city, state and zip code. If a labor organization 
petitioner is affiliated with a national organization, the local 
designation and the national affiliation should both be included.
    (6) A description of the unit(s) affected by issues raised in the 
petition. The description should generally indicate the geographic 
locations and the classifications of the employees included (or sought 
to be included) in, and excluded (or sought to be excluded) from, the 
unit.
    (7) The approximate number of employees in the unit(s) affected by 
issues raised in the petition.
    (8) A clear and concise statement of the issues raised by the 
petition and the results the petitioner seeks.
    (9) A declaration by the person signing the petition, under the 
penalties of the Criminal Code (18 U.S.C. 1001), that the contents of 
the petition are true and correct to the best of the person's knowledge 
and belief.
    (10) The signature, title, mailing address and telephone number of 
the person filing the petition.
    (b) Compliance with 5 U.S.C. 7111(e). A labor organization/
petitioner complies with 5 U.S.C. 7111(e) by submitting to the agency or 
activity and to the Department of Labor a roster of its officers and 
representatives, a copy of its constitution and bylaws, and a statement 
of its objectives. By signing the petition form, the labor organization/
petitioner certifies that it has submitted these documents to the 
activity or agency and to the Department of Labor.
    (c) Showing of interest supporting a representation petition. When 
filing a petition requiring a showing of interest, the petitioner must:
    (1) So indicate on the petition form;
    (2) Submit with the petition a showing of interest of not less than 
thirty percent (30%) of the employees in the unit involved in the 
petition; and
    (3) Include an alphabetical list of the names constituting the 
showing of interest.
    (d) Petition seeking dues allotment. When there is no exclusive 
representative, a petition seeking certification for dues allotment 
shall be accompanied by a showing of membership in the petitioner of not 
less than ten percent (10%) of the employees in the unit claimed to be 
appropriate. An alphabetical list of names constituting the showing of 
membership must be submitted.



Sec. 2422.4  Service requirements.

    Every petition, motion, brief, request, challenge, written 
objection, or application for review shall be served on all parties 
affected by issues raised in the filing. The service shall include all 
documentation in support thereof, with the exception of a showing of 
interest, evidence supporting challenges to the validity of a showing of 
interest, and evidence supporting objections to an election. The filer 
must submit a written statement of service to the Regional Director.

[[Page 362]]



Sec. 2422.5  Filing petitions.

    (a) Where to file. Petitions must be filed with the Regional 
Director for the region in which the unit or employee(s) affected by 
issues raised in the petition are located. If the unit(s) or employees 
are located in two or more regions of the Authority, the petitions must 
be filed with the Regional Director for the region in which the 
headquarters of the agency or activity is located.
    (b) Number of copies. An original and two (2) copies of the petition 
and the accompanying material must be filed with the Regional Director.
    (c) Date of filing. A petition is filed when it is received by the 
appropriate Regional Director.



Sec. 2422.6  Notification of filing.

    (a) Notification to parties. After a petition is filed, the Regional 
Director will notify any labor organization, agency or activity that the 
parties have identified as being affected by issues raised by the 
petition, that a petition has been filed with the Regional Director. The 
Regional Director will also make reasonable efforts to identify and 
notify any other party affected by the issues raised by the petition.
    (b) Contents of the notification. The notification will inform the 
labor organization, agency or activity of:
    (1) The name of the petitioner;
    (2) The description of the unit(s) or employees affected by issues 
raised in the petition; and,
    (3) A statement that all affected parties should advise the Regional 
Director in writing of their interest in the issues raised in the 
petition.



Sec. 2422.7  Posting notice of filing of a petition.

    (a) Posting notice of petition. When appropriate, the Regional 
Director, after the filing of a representation petition, will direct the 
agency or activity to post copies of a notice to all employees in places 
where notices are normally posted for the employees affected by issues 
raised in the petition and/or distribute copies of a notice in a manner 
by which notices are normally distributed.
    (b) Contents of notice. The notice shall advise affected employees 
about the petition.
    (c) Duration of notice. The notice should be conspicuously posted 
for a period of ten (10) days and not be altered, defaced, or covered by 
other material.



Sec. 2422.8  Intervention and cross-petitions.

    (a) Cross-petitions. A cross-petition is a petition which involves 
any employees in a unit covered by a pending representation petition. 
Cross-petitions must be filed in accordance with this subpart.
    (b) Intervention requests and cross-petitions. A request to 
intervene and a cross-petition, accompanied by any necessary showing of 
interest, must be submitted in writing and filed with either the 
Regional Director or the Hearing Officer before the hearing opens, 
unless good cause is shown for granting an extension. If no hearing is 
held, a request to intervene and a cross-petition must be filed prior to 
action being taken pursuant to Sec. 2422.30.
    (c) Labor organization intervention requests. Except for incumbent 
intervenors, a labor organization seeking to intervene shall submit a 
statement that it has complied with 5 U.S.C. 7111(e) and one of the 
following:
    (1) A showing of interest of ten percent (10%) or more of the 
employees in the unit covered by a petition seeking an election, with an 
alphabetical list of the names of the employees constituting the showing 
of interest; or
    (2) A current or recently expired collective bargaining agreement 
covering any of the employees in the unit affected by issues raised in 
the petition; or
    (3) Evidence that it is or was, prior to a reorganization, the 
recognized or certified exclusive representative of any of the employees 
affected by issues raised in the petition.
    (d) Incumbent. An incumbent exclusive representative, without regard 
to the requirements of paragraph (c) of this section, will be considered 
a party in any representation proceeding raising issues that affect 
employees the incumbent represents, unless it serves the Regional 
Director with a written disclaimer of any representation interest in the 
claimed unit.

[[Page 363]]

    (e) Employing agency. An agency or activity will be considered a 
party if any of its employees are affected by issues raised in the 
petition.
    (f) Agency or activity intervention. An agency or activity seeking 
to intervene in any representation proceeding must submit evidence that 
one or more employees of the agency or activity may be affected by 
issues raised in the petition.



Sec. 2422.9  Adequacy of showing of interest.

    (a) Adequacy. Adequacy of a showing of interest refers to the 
percentage of employees in the unit involved as required by Sec. Sec. 
2422.3 (c) and (d) and 2422.8(c)(1).
    (b) Regional Director investigation and Decision and Order. The 
Regional Director will conduct such investigation as deemed appropriate. 
A Regional Director's determination that the showing of interest is 
adequate is final and binding and not subject to collateral attack at a 
representation hearing or on appeal to the Authority. If the Regional 
Director determines that a showing of interest is inadequate, the 
Regional Director will issue a Decision and Order dismissing the 
petition, or denying a request for intervention.



Sec. 2422.10  Validity of showing of interest.

    (a) Validity. Validity questions are raised by challenges to a 
showing of interest on grounds other than adequacy.
    (b) Validity challenge. The Regional Director or any party may 
challenge the validity of a showing of interest.
    (c) When and where validity challenges may be filed. Party 
challenges to the validity of a showing of interest must be in writing 
and filed with the Regional Director or the Hearing Officer before the 
hearing opens, unless good cause is shown for granting an extension. If 
no hearing is held, challenges to the validity of a showing of interest 
must be filed prior to action being taken pursuant to Sec. 2422.30.
    (d) Contents of validity challenges. Challenges to the validity of a 
showing of interest must be supported with evidence.
    (e) Regional Director investigation and Decision and Order. The 
Regional Director will conduct such investigation as deemed appropriate. 
The Regional Director's determination that a showing of interest is 
valid is final and binding and is not subject to collateral attack or 
appeal to the Authority. If the Regional Director finds that the showing 
of interest is not valid, the Regional Director will issue a Decision 
and Order dismissing the petition or denying the request to intervene.



Sec. 2422.11  Challenge to the status of a labor organization.

    (a) Basis of challenge to labor organization status. The only basis 
on which a challenge to the status of a labor organization may be made 
is compliance with 5 U.S.C. 7103(a)(4).
    (b) Format and time for filing a challenge. Any party filing a 
challenge to the status of a labor organization involved in the 
processing of a petition must do so in writing to the Regional Director 
or the Hearing Officer before the hearing opens, unless good cause is 
shown for granting an extension. If no hearing is held, challenges must 
be filed prior to action being taken pursuant to Sec. 2422.30.



Sec. 2422.12  Timeliness of petitions seeking an election.

    (a) Election bar. Where there is no certified exclusive 
representative, a petition seeking an election will not be considered 
timely if filed within twelve (12) months of a valid election involving 
the same unit or a subdivision of the same unit.
    (b) Certification bar. Where there is a certified exclusive 
representative of employees, a petition seeking an election will not be 
considered timely if filed within twelve (12) months after the 
certification of the exclusive representative of the employees in an 
appropriate unit. If a collective bargaining agreement covering the 
claimed unit is pending agency head review under 5 U.S.C. 7114(c) or is 
in effect, paragraphs (c), (d), or (e) of this section apply.
    (c) Bar during 5 U.S.C. 7114(c) agency head review. A petition 
seeking an election will not be considered timely if filed during the 
period of agency head review under 5 U.S.C. 7114(c). This bar

[[Page 364]]

expires upon either the passage of thirty (30) days absent agency head 
action, or upon the date of any timely agency head action.
    (d) Contract bar where the contract is for three (3) years or less. 
Where a collective bargaining agreement is in effect covering the 
claimed unit and has a term of three (3) years or less from the date it 
became effective, a petition seeking an election will be considered 
timely if filed not more than one hundred and five (105) and not less 
than sixty (60) days prior to the expiration of the agreement.
    (e) Contract bar where the contract is for more than three (3) 
years. Where a collective bargaining agreement is in effect covering the 
claimed unit and has a term of more than three (3) years from the date 
it became effective, a petition seeking an election will be considered 
timely if filed not more than one hundred and five (105) and not less 
than sixty (60) days prior to the expiration of the initial three (3) 
year period, and any time after the expiration of the initial three (3) 
year period.
    (f) Unusual circumstances. A petition seeking an election or a 
determination relating to representation matters may be filed at any 
time when unusual circumstances exist that substantially affect the unit 
or majority representation.
    (g) Premature extension. Where a collective bargaining agreement 
with a term of three (3) years or less has been extended prior to sixty 
(60) days before its expiration date, the extension will not serve as a 
basis for dismissal of a petition seeking an election filed in 
accordance with this section.
    (h) Contract requirements. Collective bargaining agreements, 
including agreements that go into effect under 5 U.S.C. 7114(c) and 
those that automatically renew without further action by the parties, do 
not constitute a bar to a petition seeking an election under this 
section unless a clear and unambiguous effective date, renewal date 
where applicable, duration, and termination date are ascertainable from 
the agreement and relevant accompanying documentation.



Sec. 2422.13  Resolution of issues raised by a petition.

    (a) Meetings prior to filing a representation petition. All parties 
affected by the representation issues that may be raised in a petition 
are encouraged to meet prior to the filing of the petition to discuss 
their interests and narrow and resolve the issues. If requested by all 
parties a representative of the appropriate Regional Office will 
participate in these meetings.
    (b) Meetings to narrow and resolve the issues after the petition is 
filed. After a petition is filed, the Regional Director may require all 
affected parties to meet to narrow and resolve the issues raised in the 
petition.



Sec. 2422.14  Effect of withdrawal/dismissal.

    (a) Withdrawal/dismissal less than sixty (60) days before contract 
expiration. When a petition seeking an election that has been timely 
filed is withdrawn by the petitioner or dismissed by the Regional 
Director less than sixty (60) days prior to the expiration of an 
existing agreement between the incumbent exclusive representative and 
the agency or activity or any time after the expiration of the 
agreement, another petition seeking an election will not be considered 
timely if filed within a ninety (90) day period from either:
    (1) The date the withdrawal is approved; or
    (2) The date the petition is dismissed by the Regional Director when 
no application for review is filed with the Authority; or
    (3) The date the Authority rules on an application for review. Other 
pending petitions that have been timely filed under this Part will 
continue to be processed.
    (b) Withdrawal by petitioner. A petitioner who submits a withdrawal 
request for a petition seeking an election that is received by the 
Regional Director after the notice of hearing issues or after approval 
of an election agreement, whichever occurs first, will be barred from 
filing another petition seeking an election for the same unit or any 
subdivision of the unit for six (6) months from the date of the approval 
of the withdrawal by the Regional Director.

[[Page 365]]

    (c) Withdrawal by incumbent. When an election is not held because 
the incumbent disclaims any representation interest in a unit, a 
petition by the incumbent seeking an election involving the same unit or 
a subdivision of the same unit will not be considered timely if filed 
within six (6) months of cancellation of the election.



Sec. 2422.15  Duty to furnish information and cooperate.

    (a) Relevant information. After a petition is filed, all parties 
must, upon request of the Regional Director, furnish the Regional 
Director and serve all parties affected by issues raised in the petition 
with information concerning parties, issues, and agreements raised in or 
affected by the petition.
    (b) Inclusions and exclusions. After a petition seeking an election 
is filed, the Regional Director may direct the agency or activity to 
furnish the Regional Director and all parties affected by issues raised 
in the petition with a current alphabetized list of employees and job 
classifications included in and/or excluded from the existing or claimed 
unit affected by issues raised in the petition.
    (c) Cooperation. All parties are required to cooperate in every 
aspect of the representation process. This obligation includes 
cooperating fully with the Regional Director, submitting all required 
and requested information, and participating in prehearing conferences 
and hearings. The failure to cooperate in the representation process may 
result in the Regional Director taking appropriate action, including 
dismissal of the petition or denial of intervention.



Sec. 2422.16  Election agreements or directed elections.

    (a) Election agreements. Parties are encouraged to enter into 
election agreements.
    (b) Regional Director directed election. If the parties are unable 
to agree on procedural matters, specifically, the eligibility period, 
method of election, dates, hours, or locations of the election, the 
Regional Director will decide election procedures and issue a Direction 
of Election, without prejudice to the rights of a party to file 
objections to the procedural conduct of the election.
    (c) Opportunity for a hearing. Before directing an election, the 
Regional Director shall provide affected parties an opportunity for a 
hearing on other than procedural matters, and thereafter may:
    (1) Issue a Decision and Order; or
    (2) If there are no questions regarding unit appropriateness, issue 
a Direction of Election without a Decision and Order.
    (d) Challenges or objections to a directed election. A Direction of 
Election issued under this section will be issued without prejudice to 
the right of a party to file a challenge to the eligibility of any 
person participating in the election and/or objections to the election.



Sec. 2422.17  Notice of hearing and prehearing conference.

    (a) Purpose of notice of a hearing. The Regional Director may issue 
a notice of hearing involving any issues raised in the petition.
    (b) Contents. The notice of hearing will advise affected parties 
about the hearing. The Regional Director will also notify affected 
parties of the issues raised in the petition and establish a date for 
the prehearing conference.
    (c) Prehearing conference. A prehearing conference will be conducted 
by the Hearing Officer, either by meeting or teleconference. All parties 
must participate in a prehearing conference and be prepared to fully 
discuss, narrow and resolve the issues set forth in the notification of 
the prehearing conference.
    (d) No interlocutory appeal of hearing determination. A Regional 
Director's determination of whether to issue a notice of hearing is not 
appealable to the Authority.



Sec. 2422.18  Hearing procedures.

    (a) Purpose of a hearing. Representation hearings are considered 
investigatory and not adversarial. The purpose of the hearing is to 
develop a full and complete record of relevant and material facts.
    (b) Conduct of hearing. Hearings will be open to the public unless 
otherwise

[[Page 366]]

ordered by the Hearing Officer. There is no burden of proof, with the 
exception of proceedings on objections to elections as provided for in 
Sec. 2422.27(b). Formal rules of evidence do not apply.
    (c) Hearing officer. Hearings will be conducted by a Hearing Officer 
appointed by the Regional Director. Another Hearing Officer may be 
substituted for the presiding Hearing Officer at any time.
    (d) Transcript. An official reporter will make the official 
transcript of the hearing. Copies of the official transcript may be 
examined in the appropriate Regional Office during normal working hours. 
Requests by parties to purchase copies of the official transcript should 
be made to the official hearing reporter.



Sec. 2422.19  Motions.

    (a) Purpose of a motion. Subsequent to the issuance of a Notice of 
Hearing in a representation proceeding, a party seeking a ruling, an 
order, or relief must do so by filing or raising a motion stating the 
order or relief sought and the grounds therefor. Challenges and other 
filings referenced in other sections of this subpart may, in the 
discretion of the Regional Director or Hearing Officer, be treated as a 
motion.
    (b) Prehearing motions. Prehearing motions must be filed in writing 
with the Regional Director. Any response must be filed with the Regional 
Director within five (5) days after service of the motion. The Regional 
Director may rule on the motion or refer the motion to the Hearing 
Officer.
    (c) Motions made at the hearing. During the hearing, motions will be 
made to the Hearing Officer and may be oral on the record, unless 
otherwise required in this subpart to be in writing. Responses may be 
oral on the record or in writing, but, absent permission of the Hearing 
Officer, must be provided before the hearing closes. When appropriate, 
the Hearing Officer will rule on motions made at the hearing or referred 
to the Hearing Officer by the Regional Director.
    (d) Posthearing motions. Motions made after the hearing closes must 
be filed in writing with the Regional Director. Any response to a 
posthearing motion must be filed with the Regional Director within five 
(5) days after service of the motion.



Sec. 2422.20  Rights of parties at a hearing.

    (a) Rights. A party at a hearing will have the right:
    (1) To appear in person or by a representative;
    (2) To examine and cross-examine witnesses; and
    (3) To introduce into the record relevant evidence.
    (b) Documentary evidence and stipulations. Parties must submit two 
(2) copies of documentary evidence to the Hearing Officer and copies to 
all other parties. Stipulations of fact between/among the parties may be 
introduced into evidence.
    (c) Oral argument. Parties will be entitled to a reasonable period 
prior to the close of the hearing for oral argument. Presentation of a 
closing oral argument does not preclude a party from filing a brief 
under paragraph (d) of this section.
    (d) Briefs. A party will be afforded an opportunity to file a brief 
with the Regional Director.
    (1) An original and two (2) copies of a brief must be filed with the 
Regional Director within thirty (30) days from the close of the hearing.
    (2) A written request for an extension of time to file a brief must 
be filed with and received by the Regional Director no later than five 
(5) days before the date the brief is due.
    (3) No reply brief may be filed without permission of the Regional 
Director.



Sec. 2422.21  Duties and powers of the Hearing Officer.

    (a) Duties of the Hearing Officer. The Hearing Officer will receive 
evidence and inquire fully into the relevant and material facts 
concerning the matters that are the subject of the hearing, and may make 
recommendations on the record to the Regional Director.
    (b) Powers of the Hearing Officer. During the period a case is 
assigned to a Hearing Officer by the Regional Director and prior to the 
close of the hearing, the Hearing Officer may take any action necessary 
to schedule, conduct, continue, control, and regulate the

[[Page 367]]

hearing, including ruling on motions when appropriate.



Sec. 2422.22  Objections to the conduct of the hearing.

    (a) Objections. Objections are oral or written complaints concerning 
the conduct of a hearing.
    (b) Exceptions to rulings. There are automatic exceptions to all 
adverse rulings.



Sec. 2422.23  Election procedures.

    (a) Regional Director conducts or supervises election. The Regional 
Director will decide to conduct or supervise the election. In supervised 
elections, agencies will perform all acts as specified in the Election 
Agreement or Direction of Election.
    (b) Notice of election. Prior to the election a notice of election, 
prepared by the Regional Director, will be posted by the activity in 
places where notices to employees are customarily posted and/or 
distributed in a manner by which notices are normally distributed. The 
notice of election will contain the details and procedures of the 
election, including the appropriate unit, the eligibility period, the 
date(s), hour(s) and location(s) of the election, a sample ballot, and 
the effect of the vote.
    (c) Sample ballot. The reproduction of any document purporting to be 
a copy of the official ballot that suggests either directly or 
indirectly to employees that the Authority endorses a particular choice 
in the election may constitute grounds for setting aside an election if 
objections are filed under Sec. 2422.26.
    (d) Secret ballot. All elections will be by secret ballot.
    (e) Intervenor withdrawal from ballot. When two or more labor 
organizations are included as choices in an election, an intervening 
labor organization may, prior to the approval of an election agreement 
or before the direction of an election, file a written request with the 
Regional Director to remove its name from the ballot. If the request is 
not received prior to the approval of an election agreement or before 
the direction of an election, unless the parties and the Regional 
Director agree otherwise, the intervening labor organization will remain 
on the ballot. The Regional Director's decision on the request is final 
and not subject to the filing of an application for review with the 
Authority.
    (f) Incumbent withdrawal from ballot in an election to decertify an 
incumbent representative. When there is no intervening labor 
organization, an election to decertify an incumbent exclusive 
representative will not be held if the incumbent provides the Regional 
Director with a written disclaimer of any representation interest in the 
unit. When there is an intervenor, an election will be held if the 
intervening labor organization proffers a thirty percent (30%) showing 
of interest within the time period established by the Regional Director.
    (g) Petitioner withdraws from ballot in an election. When there is 
no intervening labor organization, an election will not be held if the 
petitioner provides the Regional Director with a written request to 
withdraw the petition. When there is an intervenor, an election will be 
held if the intervening labor organization proffers a thirty percent 
(30%) showing of interest within the time period established by the 
Regional Director.
    (h) Observers. All parties are entitled to representation at the 
polling location(s) by observers of their own selection subject to the 
Regional Director's approval.
    (1) Parties desiring to name observers must file in writing with the 
Regional Director a request for specifically named observers at least 
fifteen (15) days prior to an election. The Regional Director may grant 
an extension of time for filing a request for specifically named 
observers for good cause where a party requests such an extension or on 
the Regional Director's own motion. The request must name and identify 
the observers requested.
    (2) An agency or activity may use as its observers any employees who 
are not eligible to vote in the election, except:
    (i) Supervisors or management officials;
    (ii) Employees who have any official connection with any of the 
labor organizations involved; or
    (iii) Non-employees of the Federal government.

[[Page 368]]

    (3) A labor organization may use as its observers any employees 
eligible to vote in the election, except:
    (i) Employees on leave without pay status who are working for the 
labor organization involved; or
    (ii) Employees who hold an elected office in the union.
    (4) Objections to a request for specific observers must be filed 
with the Regional Director stating the reasons in support within five 
(5) days after service of the request.
    (5) The Regional Director's ruling on requests for and objections to 
observers is final and binding and is not subject to the filing of an 
application for review with the Authority.



Sec. 2422.24  Challenged ballots.

    (a) Filing challenges. A party or the Regional Director may, for 
good cause, challenge the eligibility of any person to participate in 
the election prior to the employee voting.
    (b) Challenged ballot procedure. An individual whose eligibility to 
vote is in dispute will be given the opportunity to vote a challenged 
ballot. If the parties and the Region are unable to resolve the 
challenged ballot(s) prior to the tally of ballots, the unresolved 
challenged ballot(s) will be impounded and preserved until a 
determination can be made, if necessary, by the Regional Director.



Sec. 2422.25  Tally of ballots.

    (a) Tallying the ballots. When the election is concluded, the 
Regional Director will tally the ballots.
    (b) Service of the tally. When the tally is completed, the Regional 
Director will serve the tally of ballots on the parties in accordance 
with the election agreement or direction of election.
    (c) Valid ballots cast. Representation will be determined by the 
majority of the valid ballots cast.



Sec. 2422.26  Objections to the election.

    (a) Filing objections to the election. Objections to the procedural 
conduct of the election or to conduct that may have improperly affected 
the results of the election may be filed by any party. Objections must 
be filed and received by the Regional Director within five (5) days 
after the tally of ballots has been served. Any objections must be 
timely regardless of whether the challenged ballots are sufficient in 
number to affect the results of the election. The objections must be 
supported by clear and concise reasons. An original and two (2) copies 
of the objections must be received by the Regional Director.
    (b) Supporting evidence. The objecting party must file with the 
Regional Director evidence, including signed statements, documents and 
other materials supporting the objections within ten (10) days after the 
objections are filed.



Sec. 2422.27  Determinative challenged ballots and objections.

    (a) Investigation. The Regional Director will investigate objections 
and/or determinative challenged ballots that are sufficient in number to 
affect the results of the election.
    (b) Burden of proof. A party filing objections to the election bears 
the burden of proof by a preponderance of the evidence concerning those 
objections. However, no party bears the burden of proof on challenged 
ballots.
    (c) Regional Director Action. After investigation, the Regional 
Director will take appropriate action consistent with Sec. 2422.30.
    (d) Consolidated hearing on objections and/or determinative 
challenged ballots and an unfair labor practice hearing. When 
appropriate, and in accordance with Sec. 2422.33, objections and/or 
determinative challenged ballots may be consolidated with an unfair 
labor practice hearing. Such consolidated hearings will be conducted by 
an Administrative Law Judge. Exceptions and related submissions must be 
filed with the Authority and the Authority will issue a decision in 
accordance with part 2423 of this chapter, except for the following:
    (1) Sections 2423.18 and 2423.19(j) of this Subchapter concerning 
the burden of proof and settlement conferences are not applicable;
    (2) The Administrative Law Judge may not recommend remedial action 
to be taken or notices to be posted as provided by Sec. 2423.26(a) of 
this Subchapter; and,
    (3) References to ``charge'' and ``complaint'' in Sec. 2423.26(b) 
of this chapter will be omitted.

[[Page 369]]



Sec. 2422.28  Runoff elections.

    (a) When a runoff may be held. A runoff election is required in an 
election involving at least three (3) choices, one of which is ``no 
union'' or ``neither,'' when no choice receives a majority of the valid 
ballots cast. However, a runoff may not be held until the Regional 
Director has ruled on objections to the election and determinative 
challenged ballots.
    (b) Eligibility. Employees who were eligible to vote in the original 
election and who are also eligible on the date of the runoff election 
may vote in the runoff election.
    (c) Ballot. The ballot in the runoff election will provide for a 
selection between the two choices receiving the largest and second 
largest number of votes in the election.



Sec. 2422.29  Inconclusive elections.

    (a) Inconclusive elections. An inconclusive election is one where 
challenged ballots are not sufficient to affect the outcome of the 
election and one of the following occurs:
    (1) The ballot provides for at least three (3) choices, one of which 
is ``no union'' or ``neither'' and the votes are equally divided; or
    (2) The ballot provides for at least three (3) choices, the choice 
receiving the highest number of votes does not receive a majority, and 
at least two other choices receive the next highest and same number of 
votes; or
    (3) When a runoff ballot provides for a choice between two labor 
organizations and results in the votes being equally divided; or
    (4) When the Regional Director determines that there have been 
significant procedural irregularities.
    (b) Eligibility to vote in a rerun election. A current payroll 
period will be used to determine eligibility to vote in a rerun 
election.
    (c) Ballot. If the Regional Director determines that the election is 
inconclusive, the election will be rerun with all the choices that 
appeared on the original ballot.
    (d) Number of reruns. There will be only one rerun of an 
inconclusive election. If the rerun results in another inconclusive 
election, the tally of ballots will indicate a majority of valid ballots 
has not been cast for any choice and a certification of results will be 
issued. If necessary, a runoff may be held when an original election is 
rerun.



Sec. 2422.30  Regional Director investigations, notices of hearings, actions, 

and Decisions and Orders.

    (a) Regional Director investigation. The Regional Director will make 
such investigation of the petition and any other matter as the Regional 
Director deems necessary.
    (b) Regional Director notice of hearing. The Regional Director will 
issue a notice of hearing to inquire into any matter about which a 
material issue of fact exists, and any time there is reasonable cause to 
believe a question exists regarding unit appropriateness.
    (c) Regional Director action and Decision and Order. After 
investigation and/or hearing, when a hearing has been ordered, the 
Regional Director will resolve the matter in dispute and, when 
appropriate, direct an election or approve an election agreement, or 
issue a Decision and Order.
    (d) Appeal of Regional Director Decision and Order. A party may file 
with the Authority an application for review of a Regional Director 
Decision and Order.
    (e) Contents of the Record. When no hearing has been conducted all 
material submitted to and considered by the Regional Director during the 
investigation becomes a part of the record. When a hearing has been 
conducted, the transcript and all material entered into evidence, 
including any posthearing briefs, become a part of the record.



Sec. 2422.31  Application for review of a Regional Director Decision and 

Order.

    (a) Filing an application for review. A party must file an 
application for review with the Authority within sixty (60) days of the 
Regional Director's Decision and Order. The sixty (60) day time limit 
provided for in 5 U.S.C. 7105(f) may not be extended or waived.
    (b) Contents. An application for review must be sufficient to enable 
the Authority to rule on the application

[[Page 370]]

without recourse to the record; however, the Authority may, in its 
discretion, examine the record in evaluating the application. An 
application must specify the matters and rulings to which exception(s) 
is taken, include a summary of evidence relating to any issue raised in 
the application, and make specific reference to page citations in the 
transcript if a hearing was held. An application may not raise any issue 
or rely on any facts not timely presented to the Hearing Officer or 
Regional Director.
    (c) Review. The Authority may grant an application for review only 
when the application demonstrates that review is warranted on one or 
more of the following grounds:
    (1) The decision raises an issue for which there is an absence of 
precedent;
    (2) Established law or policy warrants reconsideration; or,
    (3) There is a genuine issue over whether the Regional Director has:
    (i) Failed to apply established law;
    (ii) Committed a prejudicial procedural error;
    (iii) Committed a clear and prejudicial error concerning a 
substantial factual matter.
    (d) Opposition. A party may file with the Authority an opposition to 
an application for review within ten (10) days after the party is served 
with the application. A copy must be served on the Regional Director and 
all other parties and a statement of service must be filed with the 
Authority.
    (e) Regional Director Decision and Order becomes the Authority's 
action. A Decision and Order of a Regional Director becomes the action 
of the Authority when:
    (1) No application for review is filed with the Authority within 
sixty (60) days after the date of the Regional Director's Decision and 
Order; or
    (2) A timely application for review is filed with the Authority and 
the Authority does not undertake to grant review of the Regional 
Director's Decision and Order within sixty (60) days of the filing of 
the application; or
    (3) The Authority denies an application for review of the Regional 
Director's Decision and Order.
    (f) Authority grant of review and stay. The Authority may rule on 
the issue(s) in an application for review in its order granting the 
application for review. Neither filing nor granting an application for 
review shall stay any action ordered by the Regional Director unless 
specifically ordered by the Authority.
    (g) Briefs if review is granted. If the Authority does not rule on 
the issue(s) in the application for review in its order granting review, 
the Authority may, in its discretion, afford the parties an opportunity 
to file briefs. The briefs will be limited to the issue(s) referenced in 
the Authority's order granting review.



Sec. 2422.32  Certifications and revocations.

    (a) Certifications. The Regional Director will issue an appropriate 
certification when:
    (1) After an election, runoff, or rerun,
    (i) No objections are filed or challenged ballots are not 
determinative, or
    (ii) Objections and determinative challenged ballots are decided and 
resolved; or
    (2) The Regional Director issues a Decision and Order requiring a 
certification and the Decision and Order becomes the action of the 
Authority under Sec. 2422.31(e) or the Authority otherwise directs the 
issuance of a certification.
    (b) Revocations. Without prejudice to any rights and obligations 
which may exist under the Statute, the Regional Director will revoke a 
recognition or certification, as appropriate, and provide a written 
statement of reasons when:
    (1) An incumbent exclusive representative files, during a 
representation proceeding, a disclaimer of any representational interest 
in the unit; or
    (2) Due to a substantial change in the character and scope of the 
unit, the unit is no longer appropriate and an election is not 
warranted.



Sec. 2422.33  Relief obtainable under part 2423.

    Remedial relief that was or could have been obtained as a result of 
a motion, objection, or challenge filed or raised under this subpart, 
may not be

[[Page 371]]

the basis for similar relief if filed or raised as an unfair labor 
practice under part 2423 of this chapter: Provided, however, that 
related matters may be consolidated for hearing as noted in Sec. 
2422.27(d) of this subpart.



Sec. 2422.34  Rights and obligations during the pendency of representation 

proceedings.

    (a) Existing recognitions, agreements, and obligations under the 
Statute. During the pendency of any representation proceeding, parties 
are obligated to maintain existing recognitions, adhere to the terms and 
conditions of existing collective bargaining agreements, and fulfill all 
other representational and bargaining responsibilities under the 
Statute.
    (b) Unit status of individual employees. Notwithstanding paragraph 
(a) of this section and except as otherwise prohibited by law, a party 
may take action based on its position regarding the bargaining unit 
status of individual employees, pursuant to 3 U.S.C. 431(d)(2), 5 U.S.C. 
7103(a)(2), and 7112(b) and (c): Provided, however, that its actions may 
be challenged, reviewed, and remedied where appropriate.

[60 FR 67291, Dec. 29, 1995, as amended at 63 FR 46158, Aug. 31, 1998]



PART 2423_UNFAIR LABOR PRACTICE PROCEEDINGS--Table of Contents




Sec.
2423.0 Applicability of this part.

    Subpart A_Filing, Investigating, Resolving, and Acting on Charges

2423.1 Resolution of unfair labor practice disputes prior to a Regional 
          Director determination whether to issue a complaint.
2423.2 Alternative Dispute Resolution (ADR) services.
2423.3 Who may file charges.
2423.4 Contents of the charge; supporting evidence and documents.
2423.5 [Reserved]
2423.6 Filing and service of copies.
2423.7 Alternative case processing procedure.
2423.8 Investigation of charges.
2423.9 Amendment of charges.
2423.10 Action by the Regional Director.
2423.11 Determination not to issue complaint; review of action by the 
          Regional Director.
2423.12 Settlement of unfair labor practice charges after a Regional 
          Director determination to issue a complaint but prior to 
          issuance of a complaint.
2423.13-2423.19 [Reserved]

             Subpart B_Post Complaint, Prehearing Procedures

2423.20 Issuance and contents of the complaint; answer to the complaint; 
          amendments; role of Office of the Administrative Law Judges.
2423.21 Motions procedure.
2423.22 Intervenors.
2423.23 Prehearing disclosure.
2423.24 Powers and duties of the Administrative Law Judge during 
          prehearing proceedings.
2423.25 Post complaint, prehearing settlements.
2423.26 Stipulations of fact submissions.
2423.27 Summary judgment motions.
2423.28 Subpoenas.
2423.29 [Reserved]

                      Subpart C_Hearing Procedures.

2423.30 General rules.
2423.31 Powers and duties of the Administrative Law Judge at the 
          hearing.
2423.32 Burden of proof before the Administrative Law Judge.
2423.33 Posthearing briefs.
2423.34 Decision and record.
2423.35-2423.39 [Reserved]

   Subpart D_Post-Transmission and Exceptions to Authority Procedures

2423.40 Exceptions; oppositions and cross-exceptions; oppositions to 
          cross-exceptions; waiver.
2423.41 Action by the Authority; compliance with Authority decisions and 
          orders.
2423.42 Backpay proceedings.
2423.43-2423.49 [Reserved]

    Authority: 3 U.S.C. 431; 5 U.S.C. 7134.

    Source: 62 FR 40916, July 31, 1997, unless otherwise noted.



Sec. 2423.0  Applicability of this part

    This part is applicable to any charge of alleged unfair labor 
practices pending or filed with the Authority on or after January 1, 
1999, and any complaint filed on or after October 1, 1997.

[63 FR 65642, Nov. 30, 1998]



    Subpart A_Filing, Investigating, Resolving, and Acting on Charges

    Source: 63 FR 65642, Nov. 30, 1998, unless otherwise noted.

[[Page 372]]



Sec. 2423.1  Resolution of unfair labor practice disputes prior to a Regional 

Director determination whether to issue a complaint.

    (a) Resolving unfair labor practice disputes prior to filing a 
charge. The purposes and policies of the Federal Service Labor-
Management Relations Statute can best be achieved by the collaborative 
efforts of all persons covered by that law. The General Counsel 
encourages all persons to meet and, in good faith, attempt to resolve 
unfair labor practice disputes prior to filing unfair labor practice 
charges. If requested, or agreed to, by both parties, a representative 
of the Regional Office, in appropriate circumstances, may participate in 
these meetings to assist the parties in identifying the issues and their 
interests and in resolving the dispute. Attempts to resolve unfair labor 
practice disputes prior to filing an unfair labor practice charge do not 
toll the time limitations for filing a charge set forth at 5 U.S.C. 
7118(a)(4).
    (b) Resolving unfair labor practice disputes after filing a charge. 
The General Counsel encourages the informal resolution of unfair labor 
practice allegations subsequent to the filing of a charge and prior to a 
determination on the merits of the charge by a Regional Director. A 
representative of the appropriate Regional Office, as part of the 
investigation, may assist the parties in informally resolving their 
dispute.



Sec. 2423.2  Alternative Dispute Resolution (ADR) services.

    (a) Purpose of ADR services. The Office of the General Counsel 
furthers its mission and implements the agency-wide Federal Labor 
Relations Authority Collaboration and Alternative Dispute Resolution 
Program by promoting stable and productive labor-management 
relationships governed by the Federal Service Labor-Management Relations 
Statute and by providing services which assist labor organizations and 
agencies, on a voluntary basis: To develop collaborative labor-
management relationships; to avoid unfair labor practice disputes; and 
to resolve any unfair labor practice disputes informally.
    (b) Types of ADR Services. Agencies and labor organizations may 
jointly request, or agree to, the provision of the following services by 
the Office of the General Counsel:
    (1) Facilitation. Assisting the parties in improving their labor-
management relationship as governed by the Federal Service Labor-
Management Relations Statute;
    (2) Intervention. Intervening when parties are experiencing or 
expect significant unfair labor practice disputes;
    (3) Training. Training labor organization officials and agency 
representatives on their rights and responsibilities under the Federal 
Service Labor-Management Relations Statute and how to avoid litigation 
over those rights and responsibilities, and on utilizing problem solving 
and ADR skills, techniques, and strategies to resolve informally unfair 
labor practice disputes; and
    (4) Education. Working with the parties to recognize the benefits 
of, and establish processes for, avoiding unfair labor practice 
disputes, and resolving any unfair labor practice disputes that arise by 
consensual, rather than adversarial, methods.
    (c) ADR services after initiation of an investigation. As part of 
processing an unfair labor practice charge, the Office of the General 
Counsel may suggest to the parties, as appropriate, that they may 
benefit from these ADR services.



Sec. 2423.3  Who may file charges.

    (a) Filing charges. Any person may charge an activity, agency or 
labor organization with having engaged in, or engaging in, any unfair 
labor practice prohibited under 5 U.S.C. 7116.
    (b) Charging Party. Charging Party means the individual, labor 
organization, activity or agency filing an unfair labor practice charge 
with a Regional Director.
    (c) Charged Party. Charged Party means the activity, agency or labor 
organization charged with allegedly having engaged in, or engaging in, 
an unfair labor practice.



Sec. 2423.4  Contents of the charge; supporting evidence and documents.

    (a) What to file. The Charging Party may file a charge alleging a 
violation

[[Page 373]]

of 5 U.S.C. 7116 by completing a form prescribed by the General Counsel, 
or on a substantially similar form, that contains the following 
information:
    (1) The name, address, telephone number, and facsimile number (where 
facsimile equipment is available) of the Charging Party;
    (2) The name, address, telephone number, and facsimile number (where 
facsimile equipment is available) of the Charged Party;
    (3) The name, address, telephone number, and facsimile number (where 
facsimile equipment is available) of the Charging Party's point of 
contact;
    (4) The name, address, telephone number, and facsimile number (where 
facsimile equipment is available) of the Charged Party's point of 
contact;
    (5) A clear and concise statement of the facts alleged to constitute 
an unfair labor practice, a statement of the section(s) and paragraph(s) 
of the Federal Service Labor-Management Relations Statute alleged to 
have been violated, and the date and place of occurrence of the 
particular acts; and
    (6) A statement whether the subject matter raised in the charge:
    (i) Has been raised previously in a grievance procedure;
    (ii) Has been referred to the Federal Service Impasses Panel, the 
Federal Mediation and Conciliation Service, the Equal Employment 
Opportunity Commission, the Merit Systems Protection Board, or the 
Office of the Special Counsel for consideration or action;
    (iii) Involves a negotiability issue raised by the Charging Party in 
a petition pending before the Authority pursuant to part 2424 of this 
subchapter; or
    (iv) Has been the subject of any other administrative or judicial 
proceeding.
    (7) A statement describing the result or status of any proceeding 
identified in paragraph (a)(6) of this section.
    (b) Declaration of truth and statement of service. A charge shall be 
in writing and signed, and shall contain a declaration by the individual 
signing the charge, under the penalties of the Criminal Code (18 U.S.C. 
1001), that its contents are true and correct to the best of that 
individual's knowledge and belief.
    (c) Statement of service. A charge shall also contain a statement 
that the Charging Party served the charge on the Charged Party, and 
shall list the name, title and location of the individual served, and 
the method of service.
    (d) Self-contained document. A charge shall be a self-contained 
document describing the alleged unfair labor practice without a need to 
refer to supporting evidence documents submitted under paragraph (e) of 
this section.
    (e) Submitting supporting evidence and documents and identifying 
potential witnesses. When filing a charge, the Charging Party shall 
submit to the Regional Director any supporting evidence and documents, 
including, but not limited to, correspondence and memoranda, records, 
reports, applicable collective bargaining agreement clauses, memoranda 
of understanding, minutes of meetings, applicable regulations, 
statements of position and other documentary evidence. The Charging 
Party also shall identify potential witnesses and shall provide a brief 
synopsis of their expected testimony.



Sec. 2423.5  [Reserved]



Sec. 2423.6  Filing and service of copies.

    (a) Where to file. A Charging Party shall file the charge with the 
Regional Director for the region in which the alleged unfair labor 
practice has occurred or is occurring. A charge alleging that an unfair 
labor practice has occurred or is occurring in two or more regions may 
be filed with the Regional Director in any of those regions.
    (b) Filing date. A charge is deemed filed when it is received by a 
Regional Director.
    (c) Method of filing. A Charging Party may file a charge with the 
Regional Director in person or by commercial delivery, first-class mail, 
or certified mail. Notwithstanding Sec. 2429.24(e) of this subchapter, 
a Charging Party also may file a charge by facsimile transmission if the 
charge does not exceed 2 pages. If filing by facsimile transmission, the 
Charging Party is not required to file an original copy of the charge 
with the Region. A Charging Party assumes responsibility for receipt of 
a charge. Supporting evidence

[[Page 374]]

and documents shall be submitted to the Regional Director in person, by 
commercial delivery, first-class mail, or certified mail, not by 
facsimile transmission. Charges shall not be filed by electronic mail.
    (d) Service of the charge. The Charging Party shall serve a copy of 
the charge (without supporting evidence and documents) on the Charged 
Party. Where facsimile equipment is available, the charge may be served 
by facsimile transmission in accordance with paragraph (c) of this 
section. The Region routinely serves a copy of the charge on the Charged 
Party, but the Charging Party remains responsible for serving the charge 
in accordance with this paragraph.



Sec. 2423.7  Alternative case processing procedure.

    (a) Alternative case processing procedure. The Region may utilize an 
alternative case processing procedure to assist the parties in resolving 
their unfair labor practice dispute, if the parties voluntarily agree, 
by facilitating a problem-solving approach, rather than initially 
investigating the particular facts and determining the merits of the 
charge.
    (b) No evidence is taken. The purpose of the alternative case 
processing procedure is to resolve the underlying unfair labor practice 
dispute without determining the merits of the charge. The role of the 
agent is to assist the parties in that endeavor by facilitating a 
solution rather than conducting an investigation. No testimonial or 
documentary evidence or positions on the merits of the charge shall be 
gathered during the alternative case processing procedure or entered 
into the case file.
    (c) Investigation is not waived. If the parties are unable to 
resolve the dispute, the Region conducts an investigation on the merits 
of the charge. The agent who is involved in the alternative case 
processing procedure shall not be involved in any subsequent 
investigation on the merits of the charge, unless the parties and the 
Regional Director agree otherwise.



Sec. 2423.8  Investigation of charges.

    (a) Investigation. The Regional Director, on behalf of the General 
Counsel, conducts such investigation of the charge as the Regional 
Director deems necessary. During the course of the investigation, all 
parties involved are afforded an opportunity to present their evidence 
and views to the Regional Director.
    (b) Cooperation. The purposes and policies of the Federal Service 
Labor-Management Relations Statute can best be achieved by the full 
cooperation of all parties involved and the timely submission of all 
potentially relevant information from all potential sources during the 
course of the investigation. All persons shall cooperate fully with the 
Regional Director in the investigation of charges. Cooperation includes 
any of the following actions, when deemed appropriate by the Regional 
Director:
    (1) Making union officials, employees, and agency supervisors and 
managers available to give sworn/affirmed testimony regarding matters 
under investigation;
    (2) Producing documentary evidence pertinent to the matters under 
investigation; and
    (3) Providing statements of position on the matters under 
investigation.
    (c) Investigatory subpoenas. If a person fails to cooperate with the 
Regional Director in the investigation of a charge, the General Counsel, 
upon recommendation of a Regional Director, may decide in appropriate 
circumstances to issue a subpoena under 5 U.S.C. 7132 for the attendance 
and testimony of witnesses and the production of documentary or other 
evidence. However, no subpoena shall be issued under this section which 
requires the disclosure of intramanagement guidance, advice, counsel or 
training within an agency or between an agency and the Office of 
Personnel Management.
    (1) A subpoena shall be served by any individual who is at least 18 
years old and who is not a party to the proceeding. The individual who 
served the subpoena must certify that he or she did so:
    (i) By delivering it to the witness in person;
    (ii) By registered or certified mail; or
    (iii) By delivering the subpoena to a responsible individual (named 
in the document certifying the delivery) at

[[Page 375]]

the residence or place of business (as appropriate) of the person for 
whom the subpoena was intended. The subpoena shall show on its face the 
name and address of the Regional Director and the General Counsel.
    (2) Any person served with a subpoena who does not intend to comply 
shall, within 5 days after the date of service of the subpoena upon such 
person, petition in writing to revoke the subpoena. A copy of any 
petition to revoke a subpoena shall be served on the General Counsel.
    (3) The General Counsel shall revoke the subpoena if the witness or 
evidence, the production of which is required, is not material and 
relevant to the matters under investigation or in question in the 
proceedings, or the subpoena does not describe with sufficient 
particularity the evidence the production of which is required, or if 
for any other reason sufficient in law the subpoena is invalid. The 
General Counsel shall state the procedural or other grounds for the 
ruling on the petition to revoke. The petition to revoke, and any ruling 
on the petition to revoke, shall become part of the official record if 
there is a hearing under subpart C of this part.
    (4) Upon the failure of any person to comply with a subpoena issued 
by the General Counsel, the General Counsel shall determine whether to 
institute proceedings in the appropriate district court for the 
enforcement of the subpoena. Enforcement shall not be sought if to do so 
would be inconsistent with law, including the Federal Service Labor-
Management Relations Statute.
    (d) Confidentiality. It is the General Counsel's policy to protect 
the identity of individuals who submit statements and information during 
the investigation, and to protect against the disclosure of documents 
obtained during the investigation, as a means of ensuring the General 
Counsel's continuing ability to obtain all relevant information. After 
issuance of a complaint and in preparation for a hearing, however, 
identification of witnesses, a synopsis of their expected testimony and 
documents proposed to be offered into evidence at the hearing may be 
disclosed as required by the prehearing disclosure requirements in Sec. 
2423.23.



Sec. 2423.9  Amendment of charges.

    Prior to the issuance of a complaint, the Charging Party may amend 
the charge in accordance with the requirements set forth in Sec. 
2423.6.



Sec. 2423.10  Action by the Regional Director.

    (a) Regional Director action. The Regional Director may take any of 
the following actions, as appropriate:
    (1) Approve a request to withdraw a charge;
    (2) Refuse to issue a complaint;
    (3) Approve a written settlement agreement in accordance with the 
provisions of Sec. 2423.12;
    (4) Issue a complaint; or
    (5) Withdraw a complaint.
    (b) Request for appropriate temporary relief. Parties may request 
the General Counsel to seek appropriate temporary relief (including a 
restraining order) under 5 U.S.C. 7123(d). The General Counsel may 
initiate and prosecute injunctive proceedings under 5 U.S.C. 7123(d) 
only upon approval of the Authority. A determination by the General 
Counsel not to seek approval of the Authority to seek such appropriate 
temporary relief is final and shall not be appealed to the Authority.
    (c) General Counsel requests to the Authority. When a complaint 
issues and the Authority approves the General Counsel's request to seek 
appropriate temporary relief (including a restraining order) under 5 
U.S.C. 7123(d), the General Counsel may make application for appropriate 
temporary relief (including a restraining order) in the district court 
of the United States within which the unfair labor practice is alleged 
to have occurred or in which the party sought to be enjoined resides or 
transacts business. Temporary relief may be sought if it is just and 
proper and the record establishes probable cause that an unfair labor 
practice is being committed. Temporary relief shall not be sought if it 
would interfere with the ability of the agency to carry out its 
essential functions.
    (d) Actions subsequent to obtaining appropriate temporary relief. 
The General Counsel shall inform the district court which granted 
temporary relief pursuant to 5 U.S.C. 7123(d) whenever an Administrative 
Law Judge recommends

[[Page 376]]

dismissal of the complaint, in whole or in part.



Sec. 2423.11  Determination not to issue complaint; review of action by the 

Regional Director.

    (a) Opportunity to withdraw a charge. If upon the completion of an 
investigation under Sec. 2423.8, the Regional Director, on behalf of 
the General Counsel, determines that issuance of a complaint is not 
warranted because the charge has not been timely filed, that the charge 
fails to state an unfair labor practice, or for other appropriate 
reasons, the Regional Director may request the Charging Party to 
withdraw the charge.
    (b) Dismissal letter. If the Charging Party does not withdraw the 
charge within a reasonable period of time, the Regional Director may, on 
behalf of the General Counsel, dismiss the charge and provide the 
parties with a written statement of the reasons for not issuing a 
complaint.
    (c) Appeal of a dismissal letter. The Charging Party may obtain 
review of the Regional Director's decision not to issue a complaint by 
filing an appeal with the General Counsel within 25 days after service 
of the Regional Director's decision. A Charging Party shall serve a copy 
of the appeal on the Regional Director. The Office of the General 
Counsel shall serve notice on the Charged Party that an appeal has been 
filed.
    (d) Extension of time. The Charging Party may file a request, in 
writing, for an extension of time to file an appeal, which shall be 
received by the General Counsel not later than 5 days before the date 
the appeal is due. A Charging Party shall serve a copy of the request 
for an extension of time on the Regional Director.
    (e) Grounds for granting an appeal. The General Counsel may grant an 
appeal when the appeal establishes at least one of the following 
grounds:
    (1) The Regional Director's decision did not consider material facts 
that would have resulted in issuance of complaint;
    (2) The Regional Director's decision is based on a finding of a 
material fact that is clearly erroneous;
    (3) The Regional Director's decision is based on an incorrect 
statement of the applicable rule of law;
    (4) There is no Authority precedent on the legal issue in the case; 
or
    (5) The manner in which the Region conducted the investigation has 
resulted in prejudicial error.
    (f) General Counsel action. The General Counsel may deny the appeal 
of the Regional Director's refusal to issue a complaint, or may grant 
the appeal and remand the case to the Regional Director to take further 
action. The General Counsel's decision on the appeal states the grounds 
listed in paragraph (e) of this section for denying or granting the 
appeal, and is served on all the parties. Absent a timely motion for 
reconsideration, the decision of the General Counsel is final.
    (g) Reconsideration. After the General Counsel issues a final 
decision, the Charging Party may move for reconsideration of the final 
decision if it can establish extraordinary circumstances in its moving 
papers. The motion shall be filed within 10 days after the date on which 
the General Counsel's final decision is postmarked. A motion for 
reconsideration shall state with particularity the extraordinary 
circumstances claimed and shall be supported by appropriate citations. 
The decision of the General Counsel on a motion for reconsideration is 
final.



Sec. 2423.12  Settlement of unfair labor practice charges after a Regional 

Director determination to issue a complaint but prior to issuance of a 

complaint.

    (a) Bilateral informal settlement agreement. Prior to issuing a 
complaint, the Regional Director may afford the Charging Party and the 
Charged Party a reasonable period of time to enter into an informal 
settlement agreement to be approved by the Regional Director. When a 
Charged Party complies with the terms of an informal settlement 
agreement approved by the Regional Director, no further action is taken 
in the case. If the Charged Party fails to perform its obligations under 
the approved informal settlement agreement, the Regional Director may 
institute further proceedings.
    (b) Unilateral informal settlement agreement. If the Charging Party 
elects not

[[Page 377]]

to become a party to an informal settlement agreement which the Regional 
Director concludes effectuates the policies of the Federal Service 
Labor-Management Relations Statute, the agreement may be between the 
Charged Party and the Regional Director. The Regional Director, on 
behalf of the General Counsel, shall issue a letter stating the grounds 
for approving the settlement agreement and declining to issue a 
complaint. The Charging Party may obtain review of the Regional 
Director's action by filing an appeal with the General Counsel in 
accordance with Sec. 2423.11(c) and (d). The General Counsel shall take 
action on the appeal as set forth in Sec. 2423.11(e)-(g).



Sec. Sec. 2423.13-2423.19  [Reserved]



             Subpart B_Post Complaint, Prehearing Procedures



Sec. 2423.20  Issuance and contents of the complaint; answer to the 

complaint; amendments; role of Office of Administrative Law Judges.

    (a) Complaint. Whenever formal proceedings are deemed necessary, the 
Regional Director shall file and serve, in accordance with Sec. 2429.12 
of this subchapter, a complaint with the Office of Administrative Law 
Judges. The decision to issue a complaint shall not be subject to 
review. Any complaint may be withdrawn by the Regional Director prior to 
the hearing. The complaint shall set forth:
    (1) Notice of the charge;
    (2) The basis for jurisdiction;
    (3) The facts alleged to constitute an unfair labor practice;
    (4) The particular sections of 5 U.S.C., chapter 71 and the rules 
and regulations involved;
    (5) Notice of the date, time, and place that a hearing will take 
place before an Administrative Law Judge; and
    (6) A brief statement explaining the nature of the hearing.
    (b) Answer. Within 20 days after the date of service of the 
complaint, but in any event, prior to the beginning of the hearing, the 
Respondent shall file and serve, in accordance with part 2429 of this 
subchapter, an answer with the Office of Administrative Law Judges. The 
answer shall admit, deny, or explain each allegation of the complaint. 
If the Respondent has no knowledge of an allegation or insufficient 
information as to its truthfulness, the answer shall so state. Absent a 
showing of good cause to the contrary, failure to file an answer or 
respond to any allegation shall constitute an admission. Motions to 
extend the filing deadline shall be filed in accordance with Sec. 
2423.21.
    (c) Amendments. The Regional Director may amend the complaint at any 
time before the answer is filed. The Respondent then has 20 days from 
the date of service of the amended complaint to file an answer with the 
Office of Administrative Law Judges. Prior to the beginning of the 
hearing, the answer may be amended by the Respondent within 20 days 
after the answer is filed. Thereafter, any requests to amend the 
complaint or answer must be made by motion to the Office of 
Administrative Law Judges.
    (d) Office of Administrative Law Judges. Pleadings, motions, 
conferences, hearings, and other matters throughout as specified in 
subparts B, C, and D of this part shall be administered by the Office of 
Administrative Law Judges, as appropriate. The Chief Administrative Law 
Judge, or any Administrative Law Judge designated by the Chief 
Administrative Law Judge, shall administer any matters properly 
submitted to the Office of Administrative Law Judges. Throughout 
subparts B, C, and D of this part, ``Administrative Law Judge'' or 
``Judge'' refers to the Chief Administrative Law Judge or his or her 
designee.



Sec. 2423.21  Motions procedure.

    (a) General requirements. All motions, except those made during a 
prehearing conference or hearing, shall be in writing. Motions for an 
extension of time, postponement of a hearing, or any other procedural 
ruling shall include a statement of the position of the other parties on 
the motion. All written motions and responses in subparts B, C, or D of 
this part shall satisfy the filing and service requirements of part 2429 
of this subchapter.
    (b) Motions made to the Administrative Law Judge. Prehearing motions 
and motions made at the hearing shall be filed with the Administrative 
Law

[[Page 378]]

Judge. Unless otherwise specified in subparts B or C of this part, or 
otherwise directed or approved by the Administrative Law Judge:
    (1) Prehearing motions shall be filed at least 10 days prior to the 
hearing, and responses shall be filed within 5 days after the date of 
service of the motion;
    (2) Responses to motions made during the hearing shall be filed 
prior to the close of hearing;
    (3) Posthearing motions shall be filed within 10 days after the date 
the hearing closes, and responses shall be filed within 5 days after the 
date of service of the motion; and
    (4) Motions to correct the transcript shall be filed with the 
Administrative Law Judge within 10 days after receipt of the transcript, 
and responses shall be filed within 5 days after the date of service of 
the motion.
    (c) Post-transmission motions. After the case has been transmitted 
to the Authority, motions shall be filed with the Authority. Responses 
shall be filed within 5 days after the date of service of the motion.
    (d) Interlocutory appeals. Motions for an interlocutory appeal of 
any ruling and responses shall be filed in accordance with this section 
and Sec. 2423.31(c).



Sec. 2423.22  Intervenors.

    Motions for permission to intervene and responses shall be filed in 
accordance with Sec. 2423.21. Such motions shall be granted upon a 
showing that the outcome of the proceeding is likely to directly affect 
the movant's rights or duties. Intervenors may participate only: on the 
issues determined by the Administrative Law Judge to affect them; and to 
the extent permitted by the Judge. Denial of such motions may be 
appealed pursuant to Sec. 2423.21(d).



Sec. 2423.23  Prehearing disclosure.

    Unless otherwise directed or approved by the Judge, the parties 
shall exchange, in accordance with the service requirements of Sec. 
2429.27(b) of this subchapter, the following items at least 14 days 
prior to the hearing:
    (a) Witnesses. Proposed witness lists, including a brief synopsis of 
the expected testimony of each witness;
    (b) Documents. Copies of documents, with an index, proposed to be 
offered into evidence; and
    (c) Theories. A brief statement of the theory of the case, including 
relief sought, and any and all defenses to the allegations in the 
complaint.



Sec. 2423.24  Powers and duties of the Administrative Law Judge during 

prehearing proceedings.

    (a) Prehearing procedures. The Administrative Law Judge shall 
regulate the course and scheduling of prehearing matters, including 
prehearing orders, conferences, disclosure, motions, and subpoena 
requests.
    (b) Changing date, time, or place of hearing. After issuance of the 
complaint or any prehearing order, the Administrative Law Judge may, in 
the Judge's discretion or upon motion by any party through the motions 
procedure in Sec. 2423.21, change the date, time, or place of the 
hearing.
    (c) Prehearing order. (1) The Administrative Law Judge may, in the 
Judge's discretion or upon motion by any party through the motions 
procedure in Sec. 2423.21, issue a prehearing order confirming or 
changing:
    (i) The date, time, or place of the hearing;
    (ii) The schedule for prehearing disclosure of witness lists and 
documents intended to be offered into evidence at the hearing;
    (iii) The date for submission of procedural and substantive motions;
    (iv) The date, time, and place of the prehearing conference; and
    (v) Any other matter pertaining to prehearing or hearing procedures.
    (2) The prehearing order shall be served in accordance with Sec. 
2429.12 of this subchapter.
    (d) Prehearing conferences. The Administrative Law Judge shall 
conduct one or more prehearing conferences, either by telephone or in 
person, at least 7 days prior to the hearing date, unless the 
Administrative Law Judge determines that a prehearing conference would 
serve no purpose and no party has moved for a prehearing conference in 
accordance with Sec. 2423.21. If a prehearing conference is held, all 
parties

[[Page 379]]

must participate in the prehearing conference and be prepared to 
discuss, narrow, and resolve the issues set forth in the complaint and 
answer, as well as any prehearing disclosure matters or disputes. When 
necessary, the Administrative Law Judge shall prepare and file for the 
record a written summary of actions taken at the conference. Summaries 
of the conference shall be served on all parties in accordance with 
Sec. 2429.12 of this subchapter. The following may also be considered 
at the prehearing conference:
    (1) Settlement of the case, either by the Judge conducting the 
prehearing conference or pursuant to Sec. 2423.25;
    (2) Admissions of fact, disclosure of contents and authenticity of 
documents, and stipulations of fact;
    (3) Objections to the introduction of evidence at the hearing, 
including oral or written testimony, documents, papers, exhibits, or 
other submissions proposed by a party;
    (4) Subpoena requests or petitions to revoke subpoenas;
    (5) Any matters subject to official notice;
    (6) Outstanding motions; or
    (7) Any other matter that may expedite the hearing or aid in the 
disposition of the case.
    (e) Sanctions. The Administrative Law Judge may, in the Judge's 
discretion or upon motion by any party through the motions procedure in 
Sec. 2423.21, impose sanctions upon the parties as necessary and 
appropriate to ensure that a party's failure to fully comply with 
subpart B or C of this part is not condoned. Such authority includes, 
but is not limited to, the power to:
    (1) Prohibit a party who fails to comply with any requirement of 
subpart B or C of this part from, as appropriate, introducing evidence, 
calling witnesses, raising objections to the introduction of evidence or 
testimony of witnesses at the hearing, presenting a specific theory of 
violation, seeking certain relief, or relying upon a particular defense.
    (2) Refuse to consider any submission that is not filed in 
compliance with subparts B or C of this part.



Sec. 2423.25  Post complaint, prehearing settlements.

    (a) Informal and formal settlements. Post complaint settlements may 
be either informal or formal.
    (1) Informal settlement agreements provide for withdrawal of the 
complaint by the Regional Director and are not subject to approval by or 
an order of the Authority. If the Respondent fails to perform its 
obligations under the informal settlement agreement, the Regional 
Director may reinstitute formal proceedings consistent with this 
subpart.
    (2) Formal settlement agreements are subject to approval by the 
Authority, and include the parties' agreement to waive their right to a 
hearing and acknowledgment that the Authority may issue an order 
requiring the Respondent to take action appropriate to the terms of the 
settlement. The formal settlement agreement shall also contain the 
Respondent's consent to the Authority's application for the entry of a 
decree by an appropriate federal court enforcing the Authority's order.
    (b) Informal settlement procedure. If the Charging Party and the 
Respondent enter into an informal settlement agreement that is accepted 
by the Regional Director, the Regional Director shall withdraw the 
complaint and approve the informal settlement agreement. If the Charging 
Party fails or refuses to become a party to an informal settlement 
agreement offered by the Respondent, and the Regional Director concludes 
that the offered settlement will effectuate the policies of the Federal 
Service Labor-Management Relations Statute, the Regional Director shall 
enter into the agreement with the Respondent and shall withdraw the 
complaint. The Charging Party then may obtain a review of the Regional 
Director's action by filing an appeal with the General Counsel as 
provided in subpart A of this part.
    (c) Formal settlement procedure. If the Charging Party and the 
Respondent enter into a formal settlement agreement that is accepted by 
the Regional Director, the Regional Director shall withdraw the 
complaint upon approval of the formal settlement agreement by the 
Authority. If the Charging Party

[[Page 380]]

fails or refuses to become a party to a formal settlement agreement 
offered by the Respondent, and the Regional Director concludes that the 
offered settlement will effectuate the policies of the Federal Service 
Labor-Management Relations Statute, the agreement shall be between the 
Respondent and the Regional Director. The formal settlement agreement 
together with the Charging Party's objections, if any, shall be 
submitted to the Authority for approval. The Authority may approve a 
formal settlement agreement upon a sufficient showing that it will 
effectuate the policies of the Federal Service Labor-Management 
Relations Statute.
    (d) Settlement judge program. The Administrative Law Judge, in the 
Judge's discretion or upon the request of any party, may assign a judge 
or other appropriate official, who shall be other than the hearing judge 
unless otherwise mutually agreed to by the parties, to conduct 
negotiations for settlement.
    (1) The settlement official shall convene and preside over 
settlement conferences by telephone or in person.
    (2) The settlement official may require that the representative for 
each party be present at settlement conferences and that the parties or 
agents with full settlement authority be present or available by 
telephone.
    (3) The settlement official shall not discuss any aspect of the case 
with the hearing judge.
    (4) No evidence regarding statements, conduct, offers of settlement, 
and concessions of the parties made in proceedings before the settlement 
official shall be admissible in any proceeding before the Administrative 
Law Judge or Authority, except by stipulation of the parties.



Sec. 2423.26  Stipulations of fact submissions.

    (a) General. When all parties agree that no material issue of fact 
exists, the parties may jointly submit a motion to the Administrative 
Law Judge or Authority requesting consideration of the matter based upon 
stipulations of fact. Briefs of the parties are required and must be 
submitted within 30 days of the joint motion. Upon receipt of the 
briefs, such motions shall be ruled upon expeditiously.
    (b) Stipulations to the Administrative Law Judge. Where the 
stipulation adequately addresses the appropriate material facts, the 
Administrative Law Judge may grant the motion and decide the case 
through stipulation.
    (c) Stipulations to the Authority. Where the stipulation provides an 
adequate basis for application of established precedent and a decision 
by the Administrative Law Judge would not assist in the resolution of 
the case, or in unusual circumstances, the Authority may grant the 
motion and decide the case through stipulation.
    (d) Decision based on stipulation. Where the motion is granted, the 
Authority will adjudicate the case and determine whether the parties 
have met their respective burdens based on the stipulation and the 
briefs.



Sec. 2423.27  Summary judgment motions.

    (a) Motions. Any party may move for a summary judgment in its favor 
on any of the issues pleaded. Unless otherwise approved by the 
Administrative Law Judge, such motion shall be made no later than 10 
days prior to the hearing. The motion shall demonstrate that there is no 
genuine issue of material fact and that the moving party is entitled to 
a judgment as a matter of law. Such motions shall be supported by 
documents, affidavits, applicable precedent, or other appropriate 
materials.
    (b) Responses. Responses must be filed within 5 days after the date 
of service of the motion. Responses may not rest upon mere allegations 
or denials but must show, by documents, affidavits, applicable 
precedent, or other appropriate materials, that there is a genuine issue 
to be determined at the hearing.
    (c) Decision. If all issues are decided by summary judgment, no 
hearing will be held and the Administrative Law Judge shall prepare a 
decision in accordance with Sec. 2423.34. If summary judgment is 
denied, or if partial summary judgment is granted, the Administrative 
Law Judge shall issue an opinion and order, subject to interlocutory 
appeal as provided in Sec. 2423.31(c) of this subchapter, and the 
hearing shall proceed as necessary.

[[Page 381]]



Sec. 2423.28  Subpoenas.

    (a) When necessary. Where the parties are in agreement that the 
appearance of witnesses or the production of documents is necessary, and 
such witnesses agree to appear, no subpoena need be sought.
    (b) Requests for subpoenas. A request for a subpoena by any person, 
as defined in 5 U.S.C. 7103(a)(1), shall be in writing and filed with 
the Office of Administrative Law Judges not less than 10 days prior to 
the hearing, or with the Administrative Law Judge during the hearing. 
Requests for subpoenas made less than 10 days prior to the hearing shall 
be granted on sufficient explanation of why the request was not timely 
filed.
    (c) Subpoena procedures. The Office of Administrative Law Judges, or 
any other employee of the Authority designated by the Authority, as 
appropriate, shall furnish the requester the subpoenas sought, provided 
the request is timely made. Requests for subpoenas may be made ex parte. 
Completion of the specific information in the subpoena and the service 
of the subpoena are the responsibility of the party on whose behalf the 
subpoena was issued.
    (d) Service of subpoena. A subpoena may be served by any person who 
is at least 18 years old and who is not a party to the proceeding. The 
person who served the subpoena must certify that he or she did so:
    (1) By delivering it to the witness in person,
    (2) By registered or certified mail, or
    (3) By delivering the subpoena to a responsible person (named in the 
document certifying the delivery) at the residence or place of business 
(as appropriate) of the person for whom the subpoena was intended. The 
subpoena shall show on its face the name and address of the party on 
whose behalf the subpoena was issued.
    (e)(1) Petition to revoke subpoena. Any person served with a 
subpoena who does not intend to comply shall, within 5 days after the 
date of service of the subpoena upon such person, petition in writing to 
revoke the subpoena. A copy of any petition to revoke a subpoena shall 
be served on the party on whose behalf the subpoena was issued. Such 
petition to revoke, if made prior to the hearing, and a written 
statement of service, shall be filed with the Office of Administrative 
Law Judges for ruling. A petition to revoke a subpoena filed during the 
hearing, and a written statement of service, shall be filed with the 
Administrative Law Judge.
    (2) The Administrative Law Judge, or any other employee of the 
Authority designated by the Authority, as appropriate, shall revoke the 
subpoena if the person or evidence, the production of which is required, 
is not material and relevant to the matters under investigation or in 
question in the proceedings, or the subpoena does not describe with 
sufficient particularity the evidence the production of which is 
required, or if for any other reason sufficient in law the subpoena is 
invalid. The Administrative Law Judge, or any other employee of the 
Authority designated by the Authority, as appropriate, shall state the 
procedural or other ground for the ruling on the petition to revoke. The 
petition to revoke, any answer thereto, and any ruling thereon shall not 
become part of the official record except upon the request of the party 
aggrieved by the ruling.
    (f) Failure to comply. Upon the failure of any person to comply with 
a subpoena issued and upon the request of the party on whose behalf the 
subpoena was issued, the Solicitor of the Authority shall institute 
proceedings on behalf of such party in the appropriate district court 
for the enforcement thereof, unless to do so would be inconsistent with 
law and the Federal Service Labor-Management Relations Statute.



Sec. 2423.29  [Reserved]



                      Subpart C_Hearing Procedures



Sec. 2423.30  General rules.

    (a) Open hearing. The hearing shall be open to the public unless 
otherwise ordered by the Administrative Law Judge.
    (b) Administrative Procedure Act. The hearing shall, to the extent 
practicable, be conducted in accordance with 5 U.S.C. 554-557, and other 
applicable provisions of the Administrative Procedure Act.

[[Page 382]]

    (c) Rights of parties. A party shall have the right to appear at any 
hearing in person, by counsel, or by other representative; to examine 
and cross-examine witnesses; to introduce into the record documentary or 
other relevant evidence; and to submit rebuttal evidence, except that 
the participation of any party shall be limited to the extent prescribed 
by the Administrative Law Judge.
    (d) Objections. Objections are oral or written complaints concerning 
the conduct of a hearing. Any objection not raised to the Administrative 
Law Judge shall be deemed waived.
    (e) Oral argument. Any party shall be entitled, upon request, to a 
reasonable period prior to the close of the hearing for oral argument, 
which shall be included in the official transcript of the hearing.
    (f) Official transcript. An official reporter shall make the only 
official transcript of such proceedings. Copies of the transcript may be 
examined in the appropriate Regional Office during normal working hours. 
Parties desiring a copy of the transcript shall make arrangements for a 
copy with the official hearing reporter.



Sec. 2423.31  Powers and duties of the Administrative Law Judge at the hearing.

    (a) Conduct of hearing. The Administrative Law Judge shall conduct 
the hearing in a fair, impartial, and judicial manner, taking action as 
needed to avoid unnecessary delay and maintain order during the 
proceedings. The Administrative Law Judge may take any action necessary 
to schedule, conduct, continue, control, and regulate the hearing, 
including ruling on motions and taking official notice of material facts 
when appropriate. No provision of these regulations shall be construed 
to limit the powers of the Administrative Law Judge provided by 5 U.S.C. 
556, 557, and other applicable provisions of the Administrative 
Procedure Act.
    (b) Evidence. The Administrative Law Judge shall receive evidence 
and inquire fully into the relevant and material facts concerning the 
matters that are the subject of the hearing. The Administrative Law 
Judge may exclude any evidence that is immaterial, irrelevant, unduly 
repetitious, or customarily privileged. Rules of evidence shall not be 
strictly followed.
    (c) Interlocutory appeals. Motions for an interlocutory appeal shall 
be filed in writing with the Administrative Law Judge within 5 days 
after the date of the contested ruling. The motion shall state why 
interlocutory review is appropriate, and why the Authority should modify 
or reverse the contested ruling.
    (1) The Judge shall grant the motion and certify the contested 
ruling to the Authority if:
    (i) The ruling involves an important question of law or policy about 
which there is substantial ground for difference of opinion; and
    (ii) Immediate review will materially advance completion of the 
proceeding, or the denial of immediate review will cause undue harm to a 
party or the public.
    (2) If the motion is granted, the Judge or Authority may stay the 
hearing during the pendency of the appeal. If the motion is denied, 
exceptions to the contested ruling may be filed in accordance with Sec. 
2423.40 of this subchapter after the Judge issues a decision and 
recommended order in the case.
    (d) Bench decisions. Upon joint motion of the parties, the 
Administrative Law Judge may issue an oral decision at the close of the 
hearing when, in the Judge's discretion, the nature of the case so 
warrants. By so moving, the parties waive their right to file 
posthearing briefs with the Administrative Law Judge, pursuant to Sec. 
2423.33. If the decision is announced orally, it shall satisfy the 
requirements of Sec. 2423.34(a)(1)-(5) and a copy thereof, excerpted 
from the transcript, together with any supplementary matter the judge 
may deem necessary to complete the decision, shall be transmitted to the 
Authority, in accordance with Sec. 2423.34(b), and furnished to the 
parties in accordance with Sec. 2429.12 of this subchapter.
    (e) Settlements after the opening of the hearing. As set forth in 
Sec. 2423.25(a), settlements may be either informal or formal.
    (1) Informal settlement procedure: Judge's approval of withdrawal. 
If the

[[Page 383]]

Charging Party and the Respondent enter into an informal settlement 
agreement that is accepted by the Regional Director, the Regional 
Director may request the Administrative Law Judge for permission to 
withdraw the complaint and, having been granted such permission, shall 
withdraw the complaint and approve the informal settlement between the 
Charging Party and Respondent. If the Charging Party fails or refuses to 
become a party to an informal settlement agreement offered by the 
Respondent, and the Regional Director concludes that the offered 
settlement will effectuate the policies of the Federal Service Labor-
Management Relations Statute, the Regional Director shall enter into the 
agreement with the Respondent and shall, if granted permission by the 
Administrative Law Judge, withdraw the complaint. The Charging Party 
then may obtain a review of the Regional Director's decision as provided 
in subpart A of this part.
    (2) Formal settlement procedure: Judge's approval of settlement. If 
the Charging Party and the Respondent enter into a formal settlement 
agreement that is accepted by the Regional Director, the Regional 
Director may request the Administrative Law Judge to approve such formal 
settlement agreement, and upon such approval, to transmit the agreement 
to the Authority for approval. If the Charging Party fails or refuses to 
become a party to a formal settlement agreement offered by the 
Respondent, and the Regional Director concludes that the offered 
settlement will effectuate the policies of the Federal Service Labor-
Management Relations Statute, the agreement shall be between the 
Respondent and the Regional Director. After the Charging Party is given 
an opportunity to state on the record or in writing the reasons for 
opposing the formal settlement, the Regional Director may request the 
Administrative Law Judge to approve such formal settlement agreement, 
and upon such approval, to transmit the agreement to the Authority for 
approval.



Sec. 2423.32  Burden of proof before the Administrative Law Judge.

    The General Counsel shall present the evidence in support of the 
complaint and have the burden of proving the allegations of the 
complaint by a preponderance of the evidence. The Respondent shall have 
the burden of proving any affirmative defenses that it raises to the 
allegations in the complaint.



Sec. 2423.33  Posthearing briefs.

    Except when bench decisions are issued pursuant to Sec. 2423.31(d), 
posthearing briefs may be filed with the Administrative Law Judge within 
a time period set by the Judge, not to exceed 30 days from the close of 
the hearing, unless otherwise directed by the judge, and shall satisfy 
the filing and service requirements of part 2429 of this subchapter. 
Reply briefs shall not be filed absent permission of the Judge. Motions 
to extend the filing deadline or for permission to file a reply brief 
shall be filed in accordance with Sec. 2423.21.



Sec. 2423.34  Decision and record.

    (a) Recommended decision. Except when bench decisions are issued 
pursuant to Sec. 2423.31(d), the Administrative Law Judge shall prepare 
a written decision expeditiously in every case. All written decisions 
shall be served in accordance with Sec. 2429.12 of this subchapter. The 
decision shall set forth:
    (1) A statement of the issues;
    (2) Relevant findings of fact;
    (3) Conclusions of law and reasons therefor;
    (4) Credibility determinations as necessary; and
    (5) A recommended disposition or order.
    (b) Transmittal to Authority. The Judge shall transmit the decision 
and record to the Authority. The record shall include the charge, 
complaint, service sheet, answer, motions, rulings, orders, prehearing 
conference summaries, stipulations, objections, depositions, 
interrogatories, exhibits, documentary evidence, basis for any sanctions 
ruling, official transcript of the hearing, briefs, and any other 
filings or submissions made by the parties.

[[Page 384]]



Sec. Sec. 2423.35-2423.39  [Reserved]



   Subpart D_Post-Transmission and Exceptions to Authority Procedures



Sec. 2423.40  Exceptions; oppositions and cross-exceptions; oppositions to 

cross-exceptions; waiver.

    (a) Exceptions. Any exceptions to the Administrative Law Judge's 
decision must be filed with the Authority within 25 days after the date 
of service of the Judge's decision. Exceptions shall satisfy the filing 
and service requirements of part 2429 of this subchapter. Exceptions 
shall consist of the following:
    (1) The specific findings, conclusions, determinations, rulings, or 
recommendations being challenged; the grounds relied upon; and the 
relief sought.
    (2) Supporting arguments, which shall set forth, in order: all 
relevant facts with specific citations to the record; the issues to be 
addressed; and a separate argument for each issue, which shall include a 
discussion of applicable law. Attachments to briefs shall be separately 
paginated and indexed as necessary.
    (3) Exceptions containing 25 or more pages shall include a table of 
contents and a table of legal authorities cited.
    (b) Oppositions and cross-exceptions. Unless otherwise directed or 
approved by the Authority, oppositions to exceptions, cross-exceptions, 
and oppositions to cross-exceptions may be filed with the Authority 
within 20 days after the date of service of the exceptions or cross-
exceptions, respectively. Oppositions shall state the specific 
exceptions being opposed. Oppositions and cross-exceptions shall be 
subject to the same requirements as exceptions set out in paragraph (a) 
of this section.
    (c) Reply briefs. Reply briefs shall not be filed absent prior 
permission of the Authority.
    (d) Waiver. Any exception not specifically argued shall be deemed to 
have been waived.



Sec. 2423.41  Action by the Authority; compliance with Authority decisions and orders.

    (a) Authority decision; no exceptions filed. In the absence of the 
filing of exceptions within the time limits established in Sec. 
2423.40, the findings, conclusions, and recommendations in the decision 
of the Administrative Law Judge shall, without precedential 
significance, become the findings, conclusions, decision and order of 
the Authority, and all objections and exceptions to the rulings and 
decision of the Administrative Law Judge shall be deemed waived for all 
purposes. Failure to comply with any filing requirement established in 
Sec. 2423.40 may result in the information furnished being disregarded.
    (b) Authority decision; exceptions filed. Whenever exceptions are 
filed in accordance with Sec. 2423.40, the Authority shall issue a 
decision affirming or reversing, in whole or in part, the decision of 
the Administrative Law Judge or disposing of the matter as is otherwise 
deemed appropriate.
    (c) Authority's order. Upon finding a violation, the Authority 
shall, in accordance with 5 U.S.C. 7118(a)(7), issue an order directing 
the violator, as appropriate, to cease and desist from any unfair labor 
practice, or to take any other action to effectuate the purposes of the 
Federal Service Labor-Management Relations Statute. With regard to 
employees covered by 3 U.S.C. 431, upon finding a violation, the 
Authority's order may not include an order of reinstatement, in 
accordance with 3 U.S.C. 431(a).
    (d) Dismissal. Upon finding no violation, the Authority shall 
dismiss the complaint.
    (e) Report of compliance. After the Authority issues an order, the 
Respondent shall, within the time specified in the order, provide to the 
appropriate Regional Director a report regarding what compliance actions 
have been taken. Upon determining that the Respondent has not complied 
with the Authority's order, the Regional Director shall refer the case 
to the Authority for enforcement or take other appropriate action.

[62 FR 40916, July 31, 1997, as amended at 63 FR 46158, Aug. 31, 1998]

[[Page 385]]



Sec. 2423.42  Backpay proceedings.

    After the entry of an Authority order directing payment of backpay, 
or the entry of a court decree enforcing such order, if it appears to 
the Regional Director that a controversy exists between the Authority 
and a Respondent regarding backpay that cannot be resolved without a 
formal proceeding, the Regional Director may issue and serve on all 
parties a notice of hearing before an Administrative Law Judge to 
determine the backpay amount. The notice of hearing shall set forth the 
specific backpay issues to be resolved. The Respondent shall, within 20 
days after the service of a notice of hearing, file an answer in 
accordance with Sec. 2423.20. After the issuance of a notice of 
hearing, the procedures provided in subparts B, C, and D of this part 
shall be followed as applicable.



Sec. Sec. 2423.43-2423.49  [Reserved]



PART 2424_NEGOTIABILITY PROCEEDINGS--Table of Contents




          Subpart A_Applicability of This Part and Definitions

Sec.
2424.1 Applicability of this part.
2424.2 Definitions.
2424.3-2424.9 [Reserved]

   Subpart B_Alternative Dispute Resolution; Requesting and Providing 
               Allegations Concerning the Duty To Bargain

2424.10 Collaboration and Alternative Dispute Resolution Program.
2424.11 Requesting and providing written allegations concerning the duty 
          to bargain.
2424.12-2424.19 [Reserved]

  Subpart C_Filing and Responding to a Petition for Review; Conferences

2424.20 Who may file a petition for review.
2424.21 Time limits for filing a petition for review.
2424.22 Exclusive representative's petition for review; purpose; 
          content; severance; service.
2424.23 Post-petition conferences; conduct and record.
2424.24 Agency's statement of position; purpose; time limits; content; 
          severance; service.
2424.25 Response of the exclusive representative; purpose; time limits; 
          content; severance; service.
2424.26 Agency's reply; purpose; time limits; content; service.
2424.27 Additional submissions to the Authority.
2424.28-2424.29 [Reserved]

               Subpart D_Processing a Petition for Review

2424.30 Procedure through which the petition for review will be 
          resolved.
2424.31 Resolution of disputed issues of material fact; hearings.
2424.32 Parties' responsibilities; failure to raise, support, and/or 
          respond to arguments; failure to participate in conferences 
          and/or respond to Authority orders.
2424.33-2424.39 [Reserved]

                      Subpart E_Decision and Order

2424.40 Authority decision and order.
2424.41 Compliance.
2424.42-2424.49 [Reserved]

Subpart F_Criteria for Determining Compelling Need for Agency Rules and 
                               Regulations

2424.50 Illustrative criteria.
2424.51-2424.59 [Reserved]

    Authority: 5 U.S.C. 7134.

    Source: 63 FR 66413, Dec. 2, 1998, unless otherwise noted.



          Subpart A_Applicability of This Part and Definitions



Sec. 2424.1  Applicability of this part.

    This part is applicable to all petitions for review filed after 
April 1, 1999.



Sec. 2424.2  Definitions.

    In this part, the following definitions apply:
    (a) Bargaining obligation dispute means a disagreement between an 
exclusive representative and an agency concerning whether, in the 
specific circumstances involved in a particular case, the parties are 
obligated to bargain over a proposal that otherwise may be negotiable. 
Examples of bargaining obligation disputes include disagreements between 
an exclusive representative and an agency concerning agency claims that:
    (1) A proposal concerns a matter that is covered by a collective 
bargaining agreement; and

[[Page 386]]

    (2) Bargaining is not required over a change in bargaining unit 
employees' conditions of employment because the effect of the change is 
de minimis.
    (b) Collaboration and Alternative Dispute Resolution Program refers 
to the Federal Labor Relations Authority's program that assists parties 
in reaching agreements to resolve disputes.
    (c) Negotiability dispute means a disagreement between an exclusive 
representative and an agency concerning the legality of a proposal or 
provision. A negotiability dispute exists when an exclusive 
representative disagrees with an agency contention that (without regard 
to any bargaining obligation dispute) a proposal is outside the duty to 
bargain, including disagreement with an agency contention that a 
proposal is bargainable only at its election. A negotiability dispute 
also exists when an exclusive representative disagrees with an agency 
head's disapproval of a provision as contrary to law. A negotiability 
dispute may exist where there is no bargaining obligation dispute. 
Examples of negotiability disputes include disagreements between an 
exclusive representative and an agency concerning whether a proposal or 
provision:
    (1) Affects a management right under 5 U.S.C. 7106(a);
    (2) Constitutes a procedure or appropriate arrangement, within the 
meaning of 5 U.S.C. 7106(b)(2) and (3), respectively; and
    (3) Is consistent with a Government-wide regulation.
    (d) Petition for review means an appeal filed with the Authority by 
an exclusive representative requesting resolution of a negotiability 
dispute. An appeal that concerns only a bargaining obligation dispute 
may not be resolved under this part.
    (e) Proposal means any matter offered for bargaining that has not 
been agreed to by the parties. If a petition for review concerns more 
than one proposal, then the term includes each proposal concerned.
    (f) Provision means any matter that has been disapproved by the 
agency head on review pursuant to 5 U.S.C. 7114(c). If a petition for 
review concerns more than one provision, then the term includes each 
provision concerned.
    (g) Service means the delivery of copies of documents filed with the 
Authority to the other party's principal bargaining representative and, 
in the case of an exclusive representative, also to the head of the 
agency. Compliance with part 2429 of this subchapter is required.
    (h) Severance means the division of a proposal or provision into 
separate parts having independent meaning, for the purpose of 
determining whether any of the separate parts is within the duty to 
bargain or is contrary to law. In effect, severance results in the 
creation of separate proposals or provisions. Severance applies when 
some parts of the proposal or provision are determined to be outside the 
duty to bargain or contrary to law.
    (i) Written allegation concerning the duty to bargain means an 
agency allegation that the duty to bargain in good faith does not extend 
to a proposal.



Sec. Sec. 2424.3-2424.9  [Reserved]



   Subpart B_Alternative Dispute Resolution; Requesting and Providing 
               Allegations Concerning the Duty To Bargain



Sec. 2424.10  Collaboration and Alternative Dispute Resolution Program.

    Where an exclusive representative and an agency are unable to 
resolve disputes that arise under this part, they may request assistance 
from the Collaboration and Alternative Dispute Resolution Program 
(CADR). Upon request, and as agreed upon by the parties, CADR 
representatives will attempt to assist the parties to resolve these 
disputes. Parties seeking information or assistance under this part may 
call or write the CADR Office at (202) 218-7969, 1400 K Street, NW., 
Washington, DC 20424-0001. A brief summary of CADR activities is 
available on the Internet at www.flra.gov.

[68 FR 10953, Mar. 7, 2003, as amended at 68 FR 23885, May 6, 2003]



Sec. 2424.11  Requesting and providing written allegations concerning the 

duty to bargain.

    (a) General. An exclusive representative may file a petition for 
review after

[[Page 387]]

receiving a written allegation concerning the duty to bargain from the 
agency. An exclusive representative also may file a petition for review 
if it requests that the agency provide it with a written allegation 
concerning the duty to bargain and the agency does not respond to the 
request within ten (10) days.
    (b) Agency allegation in response to request. The agency's 
allegation in response to the exclusive representative's request must be 
in writing and must be served in accord with Sec. 2424.2(g).
    (c) Unrequested agency allegation. If an agency provides an 
exclusive representative with an unrequested written allegation 
concerning the duty to bargain, then the exclusive representative may 
either file a petition for review under this part, or continue to 
bargain and subsequently request in writing a written allegation 
concerning the duty to bargain, if necessary.



Sec. Sec. 2424.12-2424.19  [Reserved]



  Subpart C_Filing and Responding to a Petition for Review; Conferences



Sec. 2424.20  Who may file a petition for review.

    A petition for review may be filed by an exclusive representative 
that is a party to the negotiations.



Sec. 2424.21  Time limits for filing a petition for review.

    (a) A petition for review must be filed within fifteen (15) days 
after the date of service of either:
    (1) An agency's written allegation that the exclusive 
representative's proposal is not within the duty to bargain, or
    (2) An agency head's disapproval of a provision.
    (b) If the agency has not served a written allegation on the 
exclusive representative within ten (10) days after the agency's 
principal bargaining representative has received a written request for 
such allegation, as provided in Sec. 2424.11(a), then the petition may 
be filed at any time.



Sec. 2424.22  Exclusive representative's petition for review; purpose; 

content; severance; service.

    (a) Purpose. The purpose of a petition for review is to initiate a 
negotiability proceeding and provide the agency with notice that the 
exclusive representative requests a decision from the Authority that a 
proposal or provision is within the duty to bargain or not contrary to 
law, respectively. As more fully explained in paragraph (b) of this 
section, the exclusive representative is required in the petition for 
review to, among other things, inform the Authority of the exact wording 
and meaning of the proposal or provision as well as how it is intended 
to operate, explain technical or unusual terms, and provide copies of 
materials that support the exclusive representative's position.
    (b) Content. A petition for review must be filed on a form provided 
by the Authority for that purpose, or in a substantially similar format. 
It must be dated and include the following:
    (1) The exact wording and explanation of the meaning of the proposal 
or provision, including an explanation of special terms or phrases, 
technical language, or other words that are not in common usage, as well 
as how the proposal or provision is intended to work;
    (2) Specific citation to any law, rule, regulation, section of a 
collective bargaining agreement, or other authority relied on by the 
exclusive representative in its argument or referenced in the proposal 
or provision, and a copy of any such material that is not easily 
available to the Authority;
    (3) A statement as to whether the proposal or provision is also 
involved in an unfair labor practice charge under part 2423 of this 
subchapter, a grievance pursuant to the parties' negotiated grievance 
procedure, or an impasse procedure under part 2470 of this subchapter, 
and whether any other petition for review has been filed concerning a 
proposal or provision arising from the same bargaining or the same 
agency head review;
    (4) Any request for a hearing before the Authority and the reasons 
supporting such request; and

[[Page 388]]

    (5) A table of contents and a table of legal authorities cited, if 
the petition exceeds 25 double-spaced pages in length.
    (c) Severance. The exclusive representative may, but is not required 
to, include in the petition for review a statement as to whether it 
requests severance of a proposal or provision. If severance is requested 
in the petition for review, then the exclusive representative must 
support its request with an explanation of how each severed portion of 
the proposal or provision may stand alone, and how such severed portion 
would operate. The explanation and argument in support of the severed 
portion(s) must meet the same requirements for information set forth in 
paragraph (b) of this section.
    (d) Service. The petition for review, including all attachments, 
must be served in accord with Sec. 2424.2(g).



Sec. 2424.23  Post-petition conferences; conduct and record.

    (a) Timing of post-petition conference. On receipt of a petition for 
review involving a proposal or a provision, a representative of the FLRA 
will, where appropriate, schedule a post-petition conference to be 
conducted by telephone or in person. All reasonable efforts will be made 
to schedule and conduct the conference within ten (10) days after 
receipt of the petition for review.
    (b) Conduct of conference. The post-petition conference will be 
conducted with representatives of the exclusive representative and the 
agency, who must be prepared and authorized to discuss, clarify and 
resolve matters including the following:
    (1) The meaning of the proposal or provision in dispute;
    (2) Any disputed factual issue(s);
    (3) Negotiability dispute objections and bargaining obligation 
claims regarding the proposal or provision;
    (4) Whether the proposal or provision is also involved in an unfair 
labor practice charge under part 2423 of this subchapter, in a grievance 
under the parties' negotiated grievance procedure, or an impasse 
procedure under part 2470 of this subchapter; and
    (5) Whether an extension of the time limits for filing the agency's 
statement of position and any subsequent filings is requested. The FLRA 
representative may, on determining that it will effectuate the purposes 
of the Federal Service Labor-Management Relations Statute, 5 U.S.C. 7101 
et seq., and this part, extend such time limits.
    (c) Record of the conference. At the post-petition conference, or 
after it has been completed, the representative of the FLRA will prepare 
and serve on the parties a written statement that includes whether the 
parties agree on the meaning of the disputed proposal or provision, the 
resolution of any disputed factual issues, and any other appropriate 
matters.



Sec. 2424.24  Agency's statement of position; purpose; time limits; content; 

severance; service.

    (a) Purpose. The purpose of an agency statement of position is to 
inform the Authority and the exclusive representative why a proposal or 
provision is not within the duty to bargain or contrary to law, 
respectively. As more fully explained in paragraph (c) of this section, 
the agency is required in the statement of position to, among other 
things, set forth its understanding of the proposal or provision, state 
any disagreement with the facts, arguments, or meaning of the proposal 
or provision set forth in the exclusive representative's petition for 
review, and supply all arguments and authorities in support of its 
position.
    (b) Time limit for filing. Unless the time limit for filing has been 
extended pursuant to Sec. 2424.23 or part 2429 of this subchapter, the 
agency must file its statement of position within thirty (30) days after 
the date the head of the agency receives a copy of the petition for 
review.
    (c) Content. The agency's statement of position must be on a form 
provided by the Authority for that purpose, or in a substantially 
similar format. It must be dated and must:
    (1) Withdraw either:
    (i) The allegation that the duty to bargain in good faith does not 
extend to the exclusive representative's proposal, or
    (ii) The disapproval of the provision under 5 U.S.C. 7114(c); or

[[Page 389]]

    (2) Set forth in full the agency's position on any matters relevant 
to the petition that it wishes the Authority to consider in reaching its 
decision, including a statement of the arguments and authorities 
supporting any bargaining obligation or negotiability claims, any 
disagreement with claims made by the exclusive representative in the 
petition for review, specific citation to any law, rule, regulation, 
section of a collective bargaining agreement, or other authority relied 
on by the agency, and a copy of any such material that is not easily 
available to the Authority. The statement of position must also include 
the following:
    (i) If different from the exclusive representative's position, an 
explanation of the meaning the agency attributes to the proposal or 
provision and the reasons for disagreeing with the exclusive 
representative's explanation of meaning;
    (ii) If different from the exclusive representative's position, an 
explanation of how the proposal or provision would work, and the reasons 
for disagreeing with the exclusive representative's explanation;
    (3) A statement as to whether the proposal or provision is also 
involved in an unfair labor practice charge under part 2423 of this 
subchapter, a grievance pursuant to the parties' negotiated grievance 
procedure, or an impasse procedure under part 2470 of this subchapter, 
and whether any other petition for review has been filed concerning a 
proposal or provision arising from the same bargaining or the same 
agency head review;
    (4) Any request for a hearing before the Authority and the reasons 
supporting such request; and
    (5) A table of contents and a table of legal authorities cited, if 
the statement of position exceeds 25 double-spaced pages in length.
    (d) Severance. If the exclusive representative has requested 
severance in the petition for review, and if the agency opposes the 
exclusive representative's request for severance, then the agency must 
explain with specificity why severance is not appropriate.
    (e) Service. A copy of the agency's statement of position, including 
all attachments, must be served in accord with Sec. 2424.2(g).



Sec. 2424.25  Response of the exclusive representative; purpose; time limits; 

content; severance; service.

    (a) Purpose. The purpose of the exclusive representative's response 
is to inform the Authority and the agency why, despite the agency's 
arguments in its statement of position, the proposal or provision is 
within the duty to bargain or not contrary to law, respectively, and 
whether the union disagrees with any facts or arguments in the agency's 
statement of position. As more fully explained in paragraph (c) of this 
section, the exclusive representative is required in its response to, 
among other things, state why the proposal or provision does not 
conflict with any law, or why it falls within an exception to management 
rights, including permissive subjects under 5 U.S.C. 7106(b)(1), and 
procedures and appropriate arrangements under section 7106(b) (2) and 
(3). Another purpose of the response is to permit the exclusive 
representative to request the Authority to sever portions of the 
proposal or provision and to explain why and how it can be done.
    (b) Time limit for filing. Unless the time limit for filing has been 
extended pursuant to Sec. 2424.23 or part 2429 of this subchapter, 
within fifteen (15) days after the date the exclusive representative 
receives a copy of an agency's statement of position, the exclusive 
representative must file a response.
    (c) Content. The response must be on a form provided by the 
Authority for that purpose, or in a substantially similar format. With 
the exception of a request for severance pursuant to paragraph (d) of 
this section, the exclusive representative's response is specifically 
limited to the matters raised in the agency's statement of position. The 
response must be dated and must include the following:
    (1) Any disagreement with the agency's bargaining obligation or 
negotiability claims. The exclusive representative must state the 
arguments and authorities supporting its opposition to any agency 
argument, and must include specific citation to any law, rule,

[[Page 390]]

regulation, section of a collective bargaining agreement, or other 
authority relied on by the exclusive representative, and provide a copy 
of any such material that is not easily available to the Authority. The 
exclusive representative is not required to repeat arguments made in the 
petition for review. If not included in the petition for review, the 
exclusive representative must state the arguments and authorities 
supporting any assertion that the proposal or provision does not affect 
a management right under 5 U.S.C. 7106(a), and any assertion that an 
exception to management rights applies, including:
    (i) Whether and why the proposal or provision concerns a matter 
negotiable at the election of the agency under 5 U.S.C. 7106(b)(1);
    (ii) Whether and why the proposal or provision constitutes a 
negotiable procedure as set forth in 5 U.S.C. 7106(b)(2);
    (iii) Whether and why the proposal or provision constitutes an 
appropriate arrangement as set forth in 5 U.S.C. 7106(b)(3); and
    (iv) Whether and why the proposal or provision enforces an 
``applicable law,'' within the meaning of 5 U.S.C. 7106(a)(2).
    (2) Any allegation that agency rules or regulations relied on in the 
agency's statement of position violate applicable law, rule, regulation 
or appropriate authority outside the agency; that the rules or 
regulations were not issued by the agency or by any primary national 
subdivision of the agency, or otherwise are not applicable to bar 
negotiations under 5 U.S.C. 7117(a)(3); or that no compelling need 
exists for the rules or regulations to bar negotiations.
    (3) A table of contents and a table of legal authorities cited if 
the response to an agency statement of position exceeds 25 double-spaced 
pages in length.
    (d) Severance. If not requested in the petition for review, or if 
the exclusive representative wishes to modify the request in the 
petition for review, the exclusive representative may request severance 
in its response. The exclusive representative must support its request 
with an explanation of how the severed portion(s) of the proposal or 
provision may stand alone, and how such severed portion(s) would 
operate. The exclusive representative also must respond to any agency 
arguments regarding severance made in the agency's statement of 
position. The explanation and argument in support of the severed 
portion(s) must meet the same requirements for specific information set 
forth in paragraph (c) of this section.
    (e) Service. A copy of the response of the exclusive representative, 
including all attachments, must be served in accord with Sec. 
2424.2(g).



Sec. 2424.26  Agency's reply; purpose; time limits; content; service.

    (a) Purpose. The purpose of the agency's reply is to inform the 
Authority and the exclusive representative whether and why it disagrees 
with any facts or arguments made for the first time in the exclusive 
representative's response. As more fully explained in paragraph (c) of 
this section, the Agency is required in the reply to, among other 
things, provide the reasons why the proposal or provision does not fit 
within any exceptions to management rights that were asserted by the 
exclusive representative in its response, and to explain why severance 
of the proposal or provision is not appropriate.
    (b) Time limit for filing. Unless the time limit for filing has been 
extended pursuant to Sec. 2424.23 or part 2429 of this subchapter, 
within fifteen (15) days after the date the agency receives a copy of 
the exclusive representative's response to the agency's statement of 
position, the agency may file a reply.
    (c) Content. The reply must be on a form provided by the Authority 
for that purpose, or in a substantially similar format. The agency's 
reply is specifically limited to the matters raised for the first time 
in the exclusive representative's response. The agency's reply must 
state the arguments and authorities supporting its reply, cite with 
specificity any law, rule, regulation, section of a collective 
bargaining agreement, or other authority relied on, and provide a copy 
of any material that is not easily available to the Authority. The 
agency is not required to repeat arguments made in its statement of 
position. The agency's reply must be dated and must include the 
following:

[[Page 391]]

    (1) Any disagreement with the exclusive representative's assertion 
that an exception to management rights applies, including:
    (i) Whether and why the proposal or provision concerns a matter 
included in section 7106(b)(1) of the Federal Service Labor-Management 
Relations Statute;
    (ii) Whether and why the proposal or provision does not constitute a 
negotiable procedure as set forth in section 7106(b)(2) of the Federal 
Service Labor-Management Relations Statute;
    (iii) Whether and why the proposal or provision does not constitute 
an appropriate arrangement as set forth in section 7106(b)(3) of the 
Federal Service Labor-Management Relations Statute;
    (iv) Whether and why the proposal or provision does not enforce an 
``applicable law,'' within the meaning of section 7106(a)(2) of the 
Federal Service Labor-Management Relations Statute;
    (2) Any arguments in reply to an exclusive representative's 
allegation in its response that agency rules or regulations relied on in 
the agency's statement of position violate applicable law, rule, 
regulation or appropriate authority outside the agency; that the rules 
or regulations were not issued by the agency or by any primary national 
subdivision of the agency, or otherwise are not applicable to bar 
negotiations under 5 U.S.C. 7117(a)(3); or that no compelling need 
exists for the rules or regulations to bar negotiations; and
    (3) A table of contents and a table of legal authorities cited, if 
the agency's reply to an exclusive representative's response exceeds 25 
double-spaced pages in length.
    (d) Severance. If the exclusive representative requests severance 
for the first time in its response, or if the request for severance in 
an exclusive representative's response differs from the request in its 
petition for review, and if the agency opposes the exclusive 
representative's request for severance, then the agency must explain 
with specificity why severance is not appropriate.
    (e) Service. A copy of the agency's reply, including all 
attachments, must be served in accord with Sec. 2424.2(g).



Sec. 2424.27  Additional submissions to the Authority.

    The Authority will not consider any submission filed by any party 
other than those authorized under this part, provided however that the 
Authority may, in its discretion, grant permission to file an additional 
submission based on a written request showing extraordinary 
circumstances by any party. The additional submission must be filed 
either with the written request or no later than five (5) days after 
receipt of the Authority's order granting the request. Any opposition to 
the additional submission must be filed within fifteen (15) days after 
the date of the receipt of the additional submission. All documents 
filed under this section must be served in accord with Sec. 2424.2(g).



Sec. Sec. 2424.28-2424.29  [Reserved]



               Subpart D_Processing a Petition for Review



Sec. 2424.30  Procedure through which the petition for review will be 

resolved.

    (a) Exclusive representative has filed related unfair labor practice 
charge or grievance alleging an unfair labor practice. Except for 
proposals or provisions that are the subject of an agency's compelling 
need claim under 5 U.S.C. 7117(a)(2), where an exclusive representative 
files an unfair labor practice charge pursuant to part 2423 of this 
subchapter or a grievance alleging an unfair labor practice under the 
parties' negotiated grievance procedure, and the charge or grievance 
concerns issues directly related to the petition for review filed 
pursuant to this part, the Authority will dismiss the petition for 
review. The dismissal will be without prejudice to the right of the 
exclusive representative to refile the petition for review after the 
unfair labor practice charge or grievance has been resolved 
administratively, including resolution pursuant to an arbitration award 
that has become final and binding. No later than thirty (30) days after 
the date on which the unfair labor practice charge or grievance is 
resolved administratively, the exclusive representative may refile the 
petition for review, and the Authority will determine whether

[[Page 392]]

resolution of the petition is still required.
    (b) Exclusive representative has not filed related unfair labor 
practice charge or grievance alleging an unfair labor practice. Where an 
exclusive representative files only a petition for review under this 
part, the petition will be processed as follows:
    (1) No bargaining obligation dispute exists. Where there is no 
bargaining obligation dispute, the Authority will resolve the petition 
for review under the procedures of this part.
    (2) A bargaining obligation dispute exists. Where a bargaining 
obligation dispute exists in addition to the negotiability dispute, the 
Authority will inform the exclusive representative of any opportunity to 
file an unfair labor practice charge pursuant to part 2423 of this 
subchapter or a grievance under the parties' negotiated grievance 
procedure and, where the exclusive representative pursues either of 
these courses, proceed in accord with paragraph (a) of this section. If 
the exclusive representative does not file an unfair labor practice 
charge or grievance, the Authority will proceed to resolve all disputes 
necessary for disposition of the petition unless, in its discretion, the 
Authority determines that resolving all disputes is not appropriate 
because, for example, resolution of the bargaining obligation dispute 
under this part would unduly delay resolution of the negotiability 
dispute, or the procedures in another, available administrative forum 
are better suited to resolve the bargaining obligation dispute.



Sec. 2424.31  Resolution of disputed issues of material fact; hearings.

    When necessary to resolve disputed issues of material fact in a 
negotiability or bargaining obligation dispute, or when it would 
otherwise aid in decision making, the Authority, or its designated 
representative, may, as appropriate:
    (a) Direct the parties to provide specific documentary evidence;
    (b) Direct the parties to provide answers to specific factual 
questions;
    (c) Refer the matter to a hearing pursuant to 5 U.S.C. 7117(b)(3) 
and/or (c)(5); or
    (d) Take any other appropriate action.



Sec. 2424.32  Parties' responsibilities; failure to raise, support, and/or 

respond to arguments; failure to participate in conferences and/or respond to 

Authority orders.

    (a) Responsibilities of the exclusive representative. The exclusive 
representative has the burden of raising and supporting arguments that 
the proposal or provision is within the duty to bargain, within the duty 
to bargain at the agency's election, or not contrary to law, 
respectively, and, where applicable, why severance is appropriate.
    (b) Responsibilities of the agency. The agency has the burden of 
raising and supporting arguments that the proposal or provision is 
outside the duty to bargain or contrary to law, respectively, and, where 
applicable, why severance is not appropriate.
    (c) Failure to raise, support, and respond to arguments. (1) Failure 
to raise and support an argument will, where appropriate, be deemed a 
waiver of such argument. Absent good cause:
    (i) Arguments that could have been but were not raised by an 
exclusive representative in the petition for review, or made in its 
response to the agency's statement of position, may not be made in this 
or any other proceeding; and
    (ii) Arguments that could have been but were not raised by an agency 
in the statement of position, or made in its reply to the exclusive 
representative's response, may not be raised in this or any other 
proceeding.
    (2) Failure to respond to an argument or assertion raised by the 
other party will, where appropriate, be deemed a concession to such 
argument or assertion.
    (d) Failure to participate in conferences; failure to respond to 
Authority orders. Where a party fails to participate in a post-petition 
conference pursuant to Sec. 2424.23, a direction or proceeding under 
Sec. 2424.31, or otherwise fails to provide timely or responsive 
information pursuant to an Authority order, including an Authority 
procedural order directing the correction of technical deficiencies in 
filing, the Authority may, in addition to those actions set forth in 
paragraph (c) of this

[[Page 393]]

section, take any other action that, in the Authority's discretion, is 
deemed appropriate, including dismissal of the petition for review, with 
or without prejudice to the exclusive representative's refiling of the 
petition for review, and granting the petition for review and directing 
bargaining and/or rescission of an agency head disapproval under 5 
U.S.C. 7114(c), with or without conditions.



Sec. Sec. 2424.33-2424.39  [Reserved]



                      Subpart E_Decision and Order



Sec. 2424.40  Authority decision and order.

    (a) Issuance. Subject to the requirements of this part, the 
Authority will expedite proceedings under this part to the extent 
practicable and will issue to the exclusive representative and to the 
agency a written decision, explaining the specific reasons for the 
decision, at the earliest practicable date. The decision will include an 
order, as provided in paragraphs (b) and (c) of this section, but, with 
the exception of an order to bargain, such order will not include 
remedies that could be obtained in an unfair labor practice proceeding 
under 5 U.S.C. 7118(a)(7).
    (b) Cases involving proposals. If the Authority finds that the duty 
to bargain extends to the proposal, or any severable part of the 
proposal, then the Authority will order the agency to bargain on request 
concerning the proposal. If the Authority finds that the duty to bargain 
does not extend to the proposal, then the Authority will dismiss the 
petition for review. If the Authority finds that the proposal is 
bargainable only at the election of the agency, then the Authority will 
so state. If the Authority resolves a negotiability dispute by finding 
that a proposal is within the duty to bargain, but there are unresolved 
bargaining obligation dispute claims, then the Authority will order the 
agency to bargain on request in the event its bargaining obligation 
claims are resolved in a manner that requires bargaining.
    (c) Cases involving provisions. If the Authority finds that a 
provision, or any severable part thereof, is not contrary to law, rule 
or regulation, or is bargainable at the election of the agency, the 
Authority will direct the agency to rescind its disapproval of such 
provision in whole or in part as appropriate. If the Authority finds 
that a provision is contrary to law, rule, or regulation, the Authority 
will dismiss the petition for review as to that provision.



Sec. 2424.41  Compliance.

    The exclusive representative may report to the appropriate Regional 
Director an agency's failure to comply with an order, issued in 
accordance with Sec. 2424.40, that the agency must upon request (or as 
otherwise agreed to by the parties) bargain concerning the proposal or 
that the agency must rescind its disapproval of a provision. The 
exclusive representative must report such failure within a reasonable 
period of time following expiration of the 60-day period under 5 U.S.C. 
7123(a), which begins on the date of issuance of the Authority order. 
If, on referral from the Regional Director, the Authority finds such a 
failure to comply with its order, the Authority will take whatever 
action it deems necessary to secure compliance with its order, including 
enforcement under 5 U.S.C. 7123(b).



Sec. Sec. 2424.42-2424.49  [Reserved]



Subpart F_Criteria for Determining Compelling Need for Agency Rules and 
                               Regulations



Sec. 2424.50  Illustrative criteria.

    A compelling need exists for an agency rule or regulation concerning 
any condition of employment when the agency demonstrates that the rule 
or regulation meets one or more of the following illustrative criteria:
    (a) The rule or regulation is essential, as distinguished from 
helpful or desirable, to the accomplishment of the mission or the 
execution of functions of the agency or primary national subdivision in 
a manner that is consistent with the requirements of an effective and 
efficient government.
    (b) The rule or regulation is necessary to ensure the maintenance of 
basic merit principles.

[[Page 394]]

    (c) The rule or regulation implements a mandate to the agency or 
primary national subdivision under law or other outside authority, which 
implementation is essentially nondiscretionary in nature.



Sec. Sec. 2424.51-2424.59  [Reserved]



PART 2425_REVIEW OF ARBITRATION AWARDS--Table of Contents




Sec.
2425.1 Who may file an exception; time limits for filing; opposition; 
          service.
2425.2 Content of exception.
2425.3 Grounds for review.
2425.4 Authority decision.

    Authority: 5 U.S.C. 7134.



Sec. 2425.1  Who may file an exception; time limits for filing; opposition; service.

    (a) Either party to arbitration under the provisions of chapter 71 
of title 5 of the United States Code may file an exception to an 
arbitrator's award rendered pursuant to the arbitration.
    (b) The time limit for filing an exception to an arbitration award 
is thirty (30) days beginning on the date the award is served on the 
filing party.
    (c) An opposition to the exception may be filed by a party within 
thirty (30) days after the date of service of the exception.
    (d) A copy of the exception and any opposition shall be served on 
the other party.

[45 FR 3513, Jan. 17, 1980, as amended at 46 FR 40675, Aug. 11, 1981; 49 
FR 22623, May 31, 1984]



Sec. 2425.2  Content of exception.

    An exception must be a dated, self-contained document which sets 
forth in full:
    (a) A statement of the grounds on which review is requested;
    (b) Evidence or rulings bearing on the issues before the Authority;
    (c) Arguments in support of the stated grounds, together with 
specific reference to the pertinent documents and citations of 
authorities; and
    (d) A legible copy of the award of the arbitrator and legible copies 
of other pertinent documents.
    (e) The name and address of the arbitrator.

[45 FR 3513, Jan. 17, 1986, as amended at 51 FR 45755, Dec. 22, 1986]



Sec. 2425.3  Grounds for review.

    (a) The Authority will review an arbitrator's award to which an 
exception has been filed to determine if the award is deficient--
    (1) Because it is contrary to any law, rule or regulation; or
    (2) On other grounds similar to those applied by Federal courts in 
private sector labor-management relations.
    (b) The Authority will not consider an exception with respect to an 
award relating to:
    (1) An action based on unacceptable performance covered under 5 
U.S.C. 4303;
    (2) A removal, suspension for more than fourteen (14) days, 
reduction in grade, reduction in pay, or furlough of thirty (30) days or 
less covered under 5 U.S.C. 7512; or
    (3) Matters similar to those covered under 5 U.S.C. 4303 and 5 
U.S.C. 7512 which arise under other personnel systems.

[45 FR 3513, Jan. 17, 1980]



Sec. 2425.4  Authority decision.

    The Authority shall issue its decision and order taking such action 
and making such recommendations concerning the award as it considers 
necessary, consistent with applicable laws, rules, or regulations.

[45 FR 3513, Jan. 17, 1980]



PART 2426_NATIONAL CONSULTATION RIGHTS AND CONSULTATION RIGHTS ON GOVERNMENT-WIDE RULES OR REGULATIONS--Table of Contents




                 Subpart A_National Consultation Rights

Sec.
2426.1 Requesting; granting; criteria.
2426.2 Requests; petition and procedures for determination of 
          eligibility for national consultation rights.
2426.3 Obligation to consult.

  Subpart B_Consultation Rights on Government-wide Rules or Regulations

2426.11 Requesting; granting; criteria.

[[Page 395]]

2426.12 Requests; petition and procedures for determination of 
          eligibility for consultation rights on Government-wide rules 
          or regulations.
2426.13 Obligation to consult.

    Authority: 5 U.S.C. 7134.

    Source: 45 FR 3513, Jan. 17, 1980, unless otherwise noted.



                 Subpart A_National Consultation Rights



Sec. 2426.1  Requesting; granting; criteria.

    (a) An agency shall accord national consultation rights to a labor 
organization that:
    (1) Requests national consultation rights at the agency level; and
    (2) Holds exclusive recognition for either:
    (i) Ten percent (10%) or more of the total number of civilian 
personnel employed by the agency and the non-appropriated fund Federal 
instrumentalities under its jurisdiction, excluding foreign nationals; 
or
    (ii) 3,500 or more employees of the agency.
    (b) An agency's primary national subdivision which has authority to 
formulate conditions of employment shall accord national consultation 
rights to a labor organization that:
    (1) Requests national consultation rights at the primary national 
subdivision level; and
    (2) Holds exclusive recognition for either:
    (i) Ten percent (10%) or more of the total number of civilian 
personnel employed by the primary national subdivision and the non-
appropriated fund Federal instrumentalities under its jurisdiction, 
excluding foreign nationals; or
    (ii) 3,500 or more employees of the primary national subdivision.
    (c) In determining whether a labor organization meets the 
requirements as prescribed in paragraphs (a)(2) and (b)(2) of this 
section, the following will not be counted:
    (1) At the agency level, employees represented by the labor 
organization under national exclusive recognition granted at the agency 
level.
    (2) At the primary national subdivision level, employees represented 
by the labor organization under national exclusive recognition granted 
at the agency level or at that primary national subdivision level.
    (d) An agency or a primary national subdivision of an agency shall 
not grant national consultation rights to any labor organization that 
does not meet the criteria prescribed in paragraphs (a), (b) and (c) of 
this section.



Sec. 2426.2  Requests; petition and procedures for determination of 

eligibility for national consultation rights.

    (a) Requests by labor organizations for national consultation rights 
shall be submitted in writing to the headquarters of the agency or the 
agency's primary national subdivision, as appropriate, which 
headquarters shall have fifteen (15) days from the date of service of 
such request to respond thereto in writing.
    (b) Issues relating to a labor organization's eligibility for, or 
continuation of, national consultation rights shall be referred to the 
Authority for determination as follows:
    (1) A petition for determination of the eligibility of a labor 
organization for national consultation rights under criteria set forth 
in Sec. 2426.1 may be filed by a labor organization.
    (2) A petition for determination of eligibility for national 
consultation rights shall be submitted on a form prescribed by the 
Authority and shall set forth the following information:
    (i) Name and affiliation, if any, of the petitioner and its address 
and telephone number;
    (ii) A statement that the petitioner has submitted to the agency or 
the primary national subdivision and to the Assistant Secretary a roster 
of its officers and representatives, a copy of its constitution and 
bylaws, and a statement of its objectives;
    (iii) A declaration by the person signing the petition, under the 
penalties of the Criminal Code (18 U.S.C. 1001), that its contents are 
true and correct to the best of such person's knowledge and belief;
    (iv) The signature of the petitioner's representative, including 
such person's title and telephone number;

[[Page 396]]

    (v) The name, address, and telephone number of the agency or primary 
national subdivision in which the petitioner seeks to obtain or retain 
national consultation rights, and the persons to contact and their 
titles, if known;
    (vi) A showing that petitioner holds adequate exclusive recognition 
as required by Sec. 2426.1; and
    (vii) A statement as appropriate: (A) That such showing has been 
made to and rejected by the agency or primary national subdivision, 
together with a statement of the reasons for rejection, if any, offered 
by that agency or primary national subdivision;
    (B) That the agency or primary national subdivision has served 
notice of its intent to terminate existing national consultation rights, 
together with a statement of the reasons for termination; or
    (C) That the agency or primary national subdivision has failed to 
respond in writing to a request for national consultation rights made 
under Sec. 2426.2(a) within fifteen (15) days after the date the 
request is served on the agency or primary national subdivision.
    (3) The following regulations govern petitions filed under this 
section:
    (i) A petition for determination of eligibility for national 
consultation rights shall be filed with the Regional Director for the 
region wherein the headquarters of the agency or the agency's primary 
national subdivision is located.
    (ii) An original and four (4) copies of a petition shall be filed, 
together with a statement of any other relevant facts and of all 
correspondence.
    (iii) Copies of the petition together with the attachments referred 
to in paragraph (b)(3)(ii) of this section shall be served by the 
petitioner on all known interested parties, and a written statement of 
such service shall be filed with the Regional Director.
    (iv) A petition shall be filed within thirty (30) days after the 
service of written notice by the agency or primary national subdivision 
of its refusal to accord national consultation rights pursuant to a 
request under Sec. 2426.2(a) or its intention to terminate existing 
national consultation rights. If an agency or a primary national 
subdivision fails to respond in writing to a request for national 
consultation rights made under Sec. 2426.2(a) within fifteen (15) days 
after the date the request is served on the agency or primary national 
subdivision, a petition shall be filed within thirty (30) days after the 
expiration of such fifteen (15) day period.
    (v) If an agency or primary national subdivision wishes to terminate 
national consultation rights, notice of its intention to do so shall 
include a statement of its reasons and shall be served not less than 
thirty (30) days prior to the intended termination date. A labor 
organization, after receiving such notice, may file a petition within 
the time period prescribed herein, and thereby cause to be stayed 
further action by the agency or primary national subdivision pending 
disposition of the petition. If no petition has been filed within the 
provided time period, an agency or primary national subdivision may 
terminate national consultation rights.
    (vi) Within fifteen (15) days after the receipt of a copy of the 
petition, the agency or primary national subdivision shall file a 
response thereto with the Regional Director raising any matter which is 
relevant to the petition.
    (vii) The Regional Director shall make such investigations as the 
Regional Director deems necessary and thereafter shall issue and serve 
on the parties a Decision and Order with respect to the eligibility for 
national consultation rights which shall be final: Provided, however, 
That an application for review of the Regional Director's Decision and 
Order may be filed with the Authority in accordance with the procedure 
set forth in Sec. 2422.17 of this subchapter. A determination by the 
Regional Director to issue a notice of hearing shall not be subject to 
the filing of an application for review. The Regional Director, if 
appropriate, may cause a notice of hearing to be issued to all 
interested parties where substantial factual issues exist warranting a 
hearing. Hearings shall be conducted by a Hearing Officer in accordance 
with Sec. Sec. 2422.9 through 2422.15 of this subchapter and after the 
close of the hearing a Decision and Order shall be issued

[[Page 397]]

by the Regional Director in accordnce with Sec. 2422.16 of this 
subchapter.

[45 FR 3513, Jan. 17, 1980, as amended at 48 FR 40193, Sept. 6, 1983]



Sec. 2426.3  Obligation to consult.

    (a) When a labor organization has been accorded national 
consultation rights, the agency or the primary national subdivision 
which has granted those rights shall, through appropriate officials, 
furnish designated representatives of the labor organization:
    (1) Reasonable notice of any proposed substantive change in 
conditions of employment; and
    (2) Reasonable time to present its views and recommendations 
regarding the change.
    (b) If a labor organization presents any views or recommendations 
regarding any proposed substantive change in conditions of employment to 
an agency or a primary national subdivision, that agency or primary 
national subdivision shall:
    (1) Consider the views or recommendations before taking final action 
on any matter with respect to which the views or recommendations are 
presented; and
    (2) Provide the labor organization a written statement of the 
reasons for taking the final action.
    (c) Nothing in this subpart shall be construed to limit the right of 
any agency or exclusive representative to engage in collective 
bargaining.



  Subpart B_Consultation Rights on Government-wide Rules or Regulations



Sec. 2426.11  Requesting; granting; criteria.

    (a) An agency shall accord consultation rights on Government-wide 
rules or regulations to a labor organization that:
    (1) Requests consultation rights on Government-wide rules or 
regulations from an agency; and
    (2) Holds exclusive recognition for 3,500 or more employees.
    (b) An agency shall not grant consultation rights on Government-wide 
rules or regulations to any labor organization that does not meet the 
criteria prescribed in paragraph (a) of this section.



Sec. 2426.12  Requests; petition and procedures for determination of 

eligibility for consultation rights on Government-wide rules or regulations.

    (a) Requests by labor organizations for consultation rights on 
Government-wide rules or regulations shall be submitted in writing to 
the headquarters of the agency, which headquarters shall have fifteen 
(15) days from the date of service of such request to respond thereto in 
writing.
    (b) Issues relating to a labor organization's eligibility for, or 
continuation of, consultation rights on Government-wide rules or 
regulations shall be referred to the Authority for determination as 
follows:
    (1) A petition for determination of the eligibility of a labor 
organization for consultation rights under criteria set forth in Sec. 
2426.11 may be filed by a labor organization.
    (2) A petition for determination of eligibility for consultation 
rights shall be submitted on a form prescribed by the Authority and 
shall set forth the following information:
    (i) Name and affiliation, if any, of the petitioner and its address 
and telephone number;
    (ii) A statement that the petitioner has submitted to the agency and 
to the Assistant Secretary a roster of its officers and representatives, 
a copy of its constitution and bylaws, and a statement of its 
objectives;
    (iii) A declaration by the person signing the petition, under the 
penalties of the Criminal Code (18 U.S.C. 1001), that its contents are 
true and correct to the best of such person's knowledge and belief;
    (iv) The signature of the petitioner's representative, including 
such person's title and telephone number;
    (v) The name, address, and telephone number of the agency in which 
the petitioner seeks to obtain or retain consultation rights on 
Government-wide rules or regulations, and the persons to contact and 
their titles, if known;
    (vi) A showing that petitioner meets the criteria as required by 
Sec. 2426.11; and
    (vii) A statement, as appropriate:

[[Page 398]]

    (A) That such showing has been made to and rejected by the agency, 
together with a statement of the reasons for rejection, if any, offered 
by that agency;
    (B) That the agency has served notice of its intent to terminate 
existing consultation rights on Government-wide rules or regulations, 
together with a statement of the reasons for termination; or
    (C) That the agency has failed to respond in writing to a request 
for consultation rights on Government-wide rules or regulations made 
under Sec. 2426.12(a) within fifteen (15) days after the date the 
request is served on the agency.
    (3) The following regulations govern petitions filed under this 
section:
    (i) A petition for determination of eligibility for consultation 
rights on Government-wide rules or regulations shall be filed with the 
Regional Director for the region wherein the headquarters of the agency 
is located.
    (ii) An original and four (4) copies of a petition shall be filed, 
together with a statement of any other relevant facts and of all 
correspondence.
    (iii) Copies of the petition together with the attachments referred 
to in paragraph (b)(3)(ii) of this section shall be served by the 
petitioner on the agency, and a written statement of such service shall 
be filed with the Regional Director.
    (iv) A petition shall be filed within thirty (30) days after the 
service of written notice by the agency of its refusal to accord 
consultation rights on Government-wide rules or regulations pursuant to 
a request under Sec. 2426.12(a) or its intention to terminate such 
existing consultation rights. If an agency fails to respond in writing 
to a request for consultation rights on Government-wide rules or 
regulations made under Sec. 2426.12(a) within fifteen (15) days after 
the date the request is served on the agency, a petition shall be filed 
within thirty (30) days after the expiration of such fifteen (15) day 
period.
    (v) If an agency wishes to terminate consultation rights on 
Government-wide rules or regulations, notice of its intention to do so 
shall be served not less than thirty (30) days prior to the intended 
termination date. A labor organization, after receiving such notice, may 
file a petition within the time period prescribed herein, and thereby 
cause to be stayed further action by the agency pending disposition of 
the petition. If no petition has been filed within the provided time 
period, an agency may terminate such consultation rights.
    (vi) Within fifteen (15) days after the receipt of a copy of the 
petition, the agency shall file a response thereto with the Regional 
Director raising any matter which is relevant to the petition.
    (vii) The Regional Director shall make such investigation as the 
Regional Director deems necessary and thereafter shall issue and serve 
on the parties a Decision and Order with respect to the eligibility for 
consultation rights which shall be final: Provided, however, That an 
application for review of the Regional Director's Decision and Order may 
be filed with the Authority in accordance with the procedure set forth 
in Sec. 2422.17 of this subchapter. A determination by the Regional 
Director to issue a notice of hearing shall not be subject to the filing 
of an application for review. The Regional Director, if appropriate, may 
cause a notice of hearing to be issued where substantial factual issues 
exist warranting a hearing. Hearings shall be conducted by a Hearing 
Officer in accordance with Sec. Sec. 2422.9 through 2422.15 of this 
chapter and after the close of the hearing a Decision and Order shall be 
issued by the Regional Director in accordance with Sec. 2422.16 of this 
subchapter.

[45 FR 3513, Jan. 17, 1980, as amended at 48 FR 40193, Sept. 6, 1983]



Sec. 2426.13  Obligation to consult.

    (a) When a labor organization has been accorded consultation rights 
on Government-wide rules or regulations, the agency which has granted 
those rights shall, through appropriate officials, furnish designated 
representatives of the labor organization:
    (1) Reasonable notice of any proposed Government-wide rule or 
regulation issued by the agency affecting any substantive change in any 
condition of employment; and
    (2) Reasonable time to present its views and recommendations 
regarding the change.

[[Page 399]]

    (b) If a labor organization presents any views or recommendations 
regarding any proposed substantive change in any condition of employment 
to an agency, that agency shall:
    (1) Consider the views or recommendations before taking final action 
on any matter with respect to which the views or recommendations are 
presented; and
    (2) Provide the labor organization a written statement of the 
reasons for taking the final action.



PART 2427_GENERAL STATEMENTS OF POLICY OR GUIDANCE--Table of Contents




Sec.
2427.1 Scope.
2427.2 Requests for general statements of policy or guidance.
2427.3 Content of request.
2427.4 Submissions from interested parties.
2427.5 Standards governing issuance of general statements of policy or 
          guidance.

    Authority: 5 U.S.C. 7134.

    Source: 45 FR 3516, Jan. 17, 1980, unless otherwise noted.



Sec. 2427.1  Scope.

    This part sets forth procedures under which requests may be 
submitted to the Authority seeking the issuance of general statements of 
policy or guidance under 5 U.S.C. 7105(a)(1).



Sec. 2427.2  Requests for general statements of policy or guidance.

    (a) The head of an agency (or designee), the national president of a 
labor organization (or designee), or the president of a labor 
organization not affiliated with a national organization (or designee) 
may separately or jointly ask the Authority for a general statement of 
policy or guidance. The head of any lawful association not qualified as 
a labor organization may also ask the Authority for such a statement 
provided the request is not in conflict with the provisions of chapter 
71 of title 5 of the United States Code or other law.
    (b) The Authority ordinarily will not consider a request related to 
any matter pending before the Authority, General Counsel, Panel or 
Assistant Secretary.



Sec. 2427.3  Content of request.

    (a) A request for a general statement of policy or guidance shall be 
in writing and must contain:
    (1) A concise statement of the question with respect to which a 
general statement of policy or guidance is requested together with 
background information necessary to an understanding of the question;
    (2) A statement of the standards under Sec. 2427.5 upon which the 
request is based;
    (3) A full and detailed statement of the position or positions of 
the requesting party or parties;
    (4) Identification of any cases or other proceedings known to bear 
on the question which are pending under chapter 71 of title 5 of the 
United States Code; and
    (5) Identification of other known interested parties.
    (b) A copy of each document also shall be served on all known 
interested parties, including the General Counsel, the Panel, the 
Federal Mediation and Conciliation Service, and the Assistant Secretary, 
where appropriate.



Sec. 2427.4  Submissions from interested parties.

    Prior to issuance of a general statement of policy or guidance the 
Authority, as it deems appropriate, will afford an opportunity to 
interested parties to express their views orally or in writing.



Sec. 2427.5  Standards governing issuance of general statements of policy or guidance.

    In deciding whether to issue a general statement of policy or 
guidance, the Authority shall consider:
    (a) Whether the question presented can more appropriately be 
resolved by other means;
    (b) Where other means are available, whether an Authority statement 
would prevent the proliferation of cases involving the same or similar 
question;
    (c) Whether the resolution of the question presented would have 
general applicability under the Federal Service Labor-Management 
Relations Statute;
    (d) Whether the question currently confronts parties in the context 
of a labor-management relationship;

[[Page 400]]

    (e) Whether the question is presented jointly by the parties 
involved; and
    (f) Whether the issuance by the Authority of a general statement of 
policy or guidance on the question would promote constructive and 
cooperative labor-management relationships in the Federal service and 
would otherwise promote the purposes of the Federal Service Labor-
Management Relations Statute.



PART 2428_ENFORCEMENT OF ASSISTANT SECRETARY STANDARDS OF CONDUCT DECISIONS 

AND ORDERS--Table of Contents




Sec.
2428.1 Scope.
2428.2 Petitions for enforcement.
2428.3 Authority decision.

    Authority: 5 U.S.C. 7134.

    Source: 45 FR 3516, Jan. 17, 1980, unless otherwise noted.



Sec. 2428.1  Scope.

    This part sets forth procedures under which the Authority, pursuant 
to 5 U.S.C. 7105(a)(2)(I), will enforce decisions and orders of the 
Assistant Secretary in standards of conduct matters arising under 5 
U.S.C. 7120.



Sec. 2428.2  Petitions for enforcement.

    (a) The Assistant Secretary may petition the Authority to enforce 
any Assistant Secretary decision and order in a standards of conduct 
case arising under 5 U.S.C. 7120. The Assistant Secretary shall transfer 
to the Authority the record in the case, including a copy of the 
transcript if any, exhibits, briefs, and other documents filed with the 
Assistant Secretary. A copy of the petition for enforcement shall be 
served on the labor organization against which such order applies.
    (b) An opposition to Authority enforcement of any such Assistant 
Secretary decision and order may be filed by the labor organization 
against which such order applies twenty (20) days from the date of 
service of the petition, unless the Authority, upon good cause shown by 
the Assistant Secretary, sets a shorter time for filing such opposition. 
A copy of the opposition to enforcement shall be served on the Assistant 
Secretary.



Sec. 2428.3  Authority decision.

    (a) A decision and order of the Assistant Secretary shall be 
enforced unless it is arbitrary and capricious or based upon manifest 
disregard of the law.
    (b) The Authority shall issue its decision on the case enforcing, 
enforcing as modified, refusing to enforce, or remanding the decision 
and order of the Assistant Secretary.



PART 2429_MISCELLANEOUS AND GENERAL REQUIREMENTS--Table of Contents




                         Subpart A_Miscellaneous

Sec.
2429.1 [Reserved]
2429.2 Transfer and consolidation of cases.
2429.3 Transfer of record.
2429.4 Referral of policy questions to the Authority.
2429.5 Matters not previously presented; official notice.
2429.6 Oral argument.
2429.7 Subpoenas.
2429.8 [Reserved]
2429.9 Amicus curiae.
2429.10 Advisory opinions.
2429.11 Interlocutory appeals.
2429.12 Service of process and papers by the Authority.
2429.13 Official time for witnesses.
2429.14 Witness fees.
2429.15 Authority requests for advisory opinions.
2429.16 General remedial authority.
2429.17 Reconsideration.
2429.18 Service of petitions for review of final authority orders.

                     Subpart B_General Requirements

2429.21 Computation of time for filing papers.
2429.22 Additional time after service by mail.
2429.23 Extension; waiver.
2429.24 Place and method of filing; acknowledgement.
2429.25 Number of copies and paper size.
2429.26 Other documents.
2429.27 Service; statement of service.
2429.28 Petitions for amendment of regulations.

    Authority: 5 U.S.C. 7134; Sec. 2429.18 also issued under 28 U.S.C. 
2112(a).

    Source: 45 FR 3516, Jan. 17, 1980, unless otherwise noted.

[[Page 401]]



                         Subpart A_Miscellaneous



Sec. 2429.1  [Reserved]



Sec. 2429.2  Transfer and consolidation of cases.

    In any matter arising pursuant to parts 2422 and 2423 of this 
subchapter, whenever it appears necessary in order to effectuate the 
purposes of the Federal Service Labor-Management Relations Statute or to 
avoid unnecessary costs or delay, Regional Directors may consolidate 
cases within their own region or may transfer such cases to any other 
region, for the purpose of investigation or consolidation with any 
proceedings which may have been instituted in, or transferred to, such 
region.



Sec. 2429.3  Transfer of record.

    In any case under part 2425 of this subchapter, upon request by the 
Authority, the parties jointly shall transfer the record in the case, 
including a copy of the transcript, if any, exhibits, briefs and other 
documents filed with the arbitrator, to the Authority.



Sec. 2429.4  Referral of policy questions to the Authority.

    Notwithstanding the procedures set forth in this subchapter, the 
General Counsel, the Assistant Secretary, or the Panel may refer for 
review and decision or general ruling by the Authority any case 
involving a major policy issue that arises in a proceeding before any of 
them. Any such referral shall be in writing and a copy of such referral 
shall be served on all parties to the proceeding. Before decision or 
general ruling, the Authority shall obtain the views of the parties and 
other interested persons, orally or in writing, as it deems necessary 
and appropriate.



Sec. 2429.5  Matters not previously presented; official notice.

    The Authority will not consider evidence offered by a party, or any 
issue, which was not presented in the proceedings before the Regional 
Director, Hearing Officer, Administrative Law Judge, or arbitrator. The 
Authority may, however, take official notice of such matters as would be 
proper.



Sec. 2429.6  Oral argument.

    The Authority or the General Counsel, in their discretion, may 
request or permit oral argument in any matter arising under this 
subchapter under such circumstances and conditions as they deem 
appropriate.



Sec. 2429.7  Subpoenas.

    (a) Any member of the Authority, the General Counsel, any 
Administrative Law Judge appointed by the Authority under 5 U.S.C. 3105, 
and any Regional Director, Hearing Officer, or other employee of the 
Authority designated by the Authority may issue subpoenas requiring the 
attendance and testimony of witnesses and the production of documentary 
or other evidence. However, no subpoena shall be issued under this 
section which requires the disclosure of intramanagement guidance, 
advice, counsel, or training within an agency or between an agency and 
the Office of Personnel Management.
    (b) Where the parties are in agreement that the appearance of 
witnesses or the production of documents is necessary, and such 
witnesses agree to appear, no such subpoena need be sought.
    (c) A request for a subpoena by any person, as defined in 5 U.S.C. 
7103(a)(1), shall be in writing and filed with the Regional Director, in 
proceedings arising under part 2422 of this subchapter, or with the 
Authority, in proceedings arising under parts 2424 and 2425 of this 
subchapter, not less than 10 days prior to the hearing, or with the 
appropriate presiding official(s) during the hearing. Requests for 
subpoenas made less than 10 days prior to the opening of the hearing 
shall be granted on sufficient explanation of why the request was not 
timely filed.
    (d) The Authority, General Counsel, Regional Director, Hearing 
Officer, or any other employee of the Authority designated by the 
Authority, as appropriate, shall furnish the requester the subpoenas 
sought, provided the request is timely made. Requests for subpoenas may 
be made ex parte. Completion of the specific information in the subpoena 
and the service of the subpoena are the responsibility of the party on 
whose behalf the subpoena was issued. A subpoena may be served by any 
person who is at least 18 years old and who

[[Page 402]]

is not a party to the proceeding. The person who served the subpoena 
must certify that he or she did so:
    (1) By delivering it to the witness in person,
    (2) By registered or certified mail, or
    (3) By delivering the subpoena to a responsible person (named in the 
document certifying the delivery) at the residence or place of business 
(as appropriate) of the person for whom the subpoena was intended. The 
subpoena shall show on its face the name and address of the party on 
whose behalf the subpoena was issued.
    (e)(1) Any person served with a subpoena who does not intend to 
comply, shall, within 5 days after the date of service of the subpoena 
upon such person, petition in writing to revoke the subpoena. A copy of 
any petition to revoke a subpoena shall be served on the party on whose 
behalf the subpoena was issued. Such petition to revoke, if made prior 
to the hearing, and a written statement of service, shall be filed with 
the Regional Director in proceedings arising under part 2422 of this 
subchapter, and with the Authority, in proceedings arising under parts 
2424 and 2425 of this subchapter for ruling. A petition to revoke a 
subpoena filed during the hearing, and a written statement of service, 
shall be filed with the appropriate presiding official(s).
    (2) The Authority, General Counsel, Regional Director, Hearing 
Officer, or any other employee of the Authority designated by the 
Authority, as appropriate, shall revoke the subpoena if the person or 
evidence, the production of which is required, is not material and 
relevant to the matters under investigation or in question in the 
proceedings, or the subpoena does not describe with sufficient 
particularity the evidence the production of which is required, or if 
for any other reason sufficient in law the subpoena is invalid. The 
Authority, General Counsel, Regional Director, Hearing Officer, or any 
other employee of the Authority designated by the Authority, as 
appropriate, shall state the procedural or other ground for the ruling 
on the petition to revoke. The petition to revoke, any answer thereto, 
and any ruling thereon shall not become part of the official record 
except upon the request of the party aggrieved by the ruling.
    (f) Upon the failure of any person to comply with a subpoena issued 
and upon the request of the party on whose behalf the subpoena was 
issued, the Solicitor of the Authority shall institute proceedings on 
behalf of such party in the appropriate district court for the 
enforcement thereof, unless to do so would be inconsistent with law and 
the Federal Service Labor-Management Relations Statute.

[45 FR 3516, Jan. 17, 1980, as amended at 62 FR 40922, July 31, 1997]



Sec. 2429.8  [Reserved]



Sec. 2429.9  Amicus curiae.

    Upon petition of an interested person, a copy of which petition 
shall be served on the parties, and as the Authority deems appropriate, 
the Authority may grant permission for the presentation of written and/
or oral argument at any stage of the proceedings by an amicus curiae and 
the parties shall be notified of such action by the Authority.



Sec. 2429.10  Advisory opinions.

    The Authority and the General Counsel will not issue advisory 
opinions.



Sec. 2429.11  Interlocutory appeals.

    Except as set forth in part 2423, the Authority and the General 
Counsel ordinarily will not consider interlocutory appeals.

[62 FR 40923, July 31, 1997]



Sec. 2429.12  Service of process and papers by the Authority.

    (a) Methods of service. Notices of hearings, decisions and orders of 
Regional Directors, decisions and recommended orders of Administrative 
Law Judges, decisions of the Authority, complaints, amended complaints, 
withdrawals of complaints, written rulings on motions, and all other 
papers required by this subchapter to be issued by the Authority, the 
General Counsel, Regional Directors, Hearing Officers, Administrative 
Law Judges, and Regional Directors when not acting as a party under part 
2423 of this subchapter, shall be served personally, by first-

[[Page 403]]

class mail, by facsimile transmission, or by certified mail. Where 
facsimile equipment is available, rulings on motions; information 
pertaining to prehearing disclosure, conferences, orders, or hearing 
dates, and locations; information pertaining to subpoenas; and other 
similar or time sensitive matters may be served by facsimile 
transmission.
    (b) Upon whom served. All papers required to be served under 
paragraph (a) of this section shall be served upon all counsel of record 
or other designated representative(s) of parties, and upon parties not 
so represented. Service upon such counsel or representative shall 
constitute service upon the party, but a copy also shall be transmitted 
to the party.
    (c) Proof of service. Proof of service shall be verified by 
certificate of the individual serving the papers describing the manner 
of such service. When service is by mail, the date of service shall be 
the day when the matter served is deposited in the United States mail. 
When service is by facsimile, the date of service shall be the date the 
facsimile transmission is transmitted and, when necessary, verified by a 
dated facsimile record of transmission.

[45 FR 3516, Jan. 17, 1980, as amended at 48 FR 40194, Sept. 6, 1983; 62 
FR 40923, July 31, 1997]



Sec. 2429.13  Official time for witnesses.

    If the participation of any employee in any phase of any proceeding 
before the Authority, including the investigation of unfair labor 
practice charges and representation petitions and the participation in 
hearings and representation elections, is deemed necessary by the 
Authority, the General Counsel, any Administrative Law Judge, Regional 
Director, Hearing Officer, or other agent of the Authority designated by 
the Authority, the employee shall be granted official time for such 
participation, including necessary travel time, as occurs during the 
employee's regular work hours and when the employee would otherwise be 
in a work or paid leave status.

[62 FR 40923, July 31, 1997]



Sec. 2429.14  Witness fees.

    (a) Witnesses, whether appearing voluntarily or pursuant to a 
subpoena, shall be paid the fee and mileage allowances which are paid 
subpoenaed witnesses in the courts of the United States. However, any 
witness who is employed by the Federal Government shall not be entitled 
to receive witness fees.
    (b) Witness fees, as appropriate, as well as transportation and per 
diem expenses for a witness shall be paid by the party that calls the 
witness to testify.

[62 FR 40923, July 31, 1997]



Sec. 2429.15  Authority requests for advisory opinions.

    (a) Whenever the Authority, pursuant to 5 U.S.C. 7105(i) requests an 
advisory opinion from the Director of the Office of Personnel Management 
concerning the proper interpretation of rules, regulations, or policy 
directives issued by that Office in connection with any matter before 
the Authority, a copy of such request, and any response thereto, shall 
be served upon the parties in the matter.
    (b) The parties shall have fifteen (15) days from the date of 
service of a copy of the response of the Office of Personnel Management 
to file with the Authority comments on that response which the parties 
wish the Authority to consider before reaching a decision in the matter. 
Such comments shall be in writing and copies shall be served upon the 
other parties in the matter and upon the Office of Personnel Management.



Sec. 2429.16  General remedial authority.

    The Authority shall take any actions which are necessary and 
appropriate to administer effectively the provisions of chapter 71 of 
title 5 of the United States Code.



Sec. 2429.17  Reconsideration.

    After a final decision or order of the Authority has been issued, a 
party to the proceeding before the Authority who can establish in its 
moving papers extraordinary circumstances for so doing, may move for 
reconsideration of

[[Page 404]]

such final decision or order. The motion shall be filed within ten (10) 
days after service of the Authority's decision or order. A motion for 
reconsideration shall state with particularity the extraordinary 
circumstances claimed and shall be supported by appropriate citations. 
The filing and pendency of a motion under this provision shall not 
operate to stay the effectiveness of the action of the Authority, unless 
so ordered by the Authority. A motion for reconsideration need not be 
filed in order to exhaust administrative remedies.

[46 FR 40675, Aug. 11, 1981]



Sec. 2429.18  Service of petitions for review of final authority orders.

    Any aggrieved person filing pursuant to 5 U.S.C. 7123(a) a petition 
for review of a final Authority order in an appropriate Federal circuit 
court of appeals within 10 days of issuance of the Authority's final 
order must ensure that a court-stamped copy of the petition for review 
is received by the Solicitor of the Authority within that 10-day period 
in order to qualify for participation in the random selection process 
established in Public Law No. 100-236 for determining the appropriate 
court of appeals to review an agency final order when petitions for 
review of that order are filed in more than one court of appeals.

[55 FR 2509, Jan. 25, 1990]



                     Subpart B_General Requirements



Sec. 2429.21  Computation of time for filing papers.

    (a) In computing any period of time prescribed by or allowed by this 
subchapter, except in agreement bar situations described in Sec. 
2422.12 (c), (d), (e), and (f) of this subchapter, and except as to the 
filing of exceptions to an arbitrator's award under Sec. 2425.1 of this 
subchapter, the day of the act, event, or default from or after which 
the designated period of time begins to run shall not be included. The 
last day of the period so computed is to be included unless it is a 
Saturday, Sunday, or a Federal legal holiday in which event the period 
shall run until the end of the next day which is neither a Saturday, 
Sunday, or a Federal legal holiday. Provided, however, in agreement bar 
situations described in Sec. 2422.12 (c), (d), (e), and (f), if the 
60th day prior to the expiration date of an agreement falls on Saturday, 
Sunday, or a Federal legal holiday, a petition, to be timely, must be 
filed by the close of business on the last official workday preceding 
the 60th day. When the period of time prescribed or allowed is 7 days or 
less, intermediate Saturdays, Sundays, and Federal legal holidays shall 
be excluded from the computations.
    (b) Except when filing an unfair labor practice charge pursuant to 
part 2423 of this subchapter, a representation petition pursuant to part 
2422 of this subchapter, and a request for an extension of time pursuant 
to Sec. 2429.23(a) of this part, when this subchapter requires the 
filing of any paper with the Authority, the General Counsel, a Regional 
Director, or an Administrative Law Judge, the date of filing shall be 
determined by the date of mailing indicated by the postmark date or the 
date a facsimile is transmitted. If no postmark date is evident on the 
mailing, it shall be presumed to have been mailed 5 days prior to 
receipt. If the date of facsimile transmission is unclear, the date of 
transmission shall be the date the facsimile transmission is received. 
If the filing is by personal or commercial delivery, it shall be 
considered filed on the date it is received by the Authority or the 
officer or agent designated to receive such materials.
    (c) All documents filed or required to be filed with the Authority 
shall be filed in accordance with Sec. 2429.24(a) of this subchapter.

[51 FR 45751, Dec. 22, 1986, as amended at 60 FR 67298, Dec. 29, 1995; 
62 FR 40923, July 31, 1997]



Sec. 2429.22  Additional time after service by mail.

    Except as to the filing of an application for review of a Regional 
Director's Decision and Order under Sec. 2422.31 of this subchapter, 
whenever a party has the right or is required to do some act pursuant to 
this subchapter within a prescribed period after service of a notice or 
other paper upon such party, and the notice or paper is served on such 
party by mail, 5 days shall be

[[Page 405]]

added to the prescribed period: Provided, however, that 5 days shall not 
be added in any instance where an extension of time has been granted.

[62 FR 40923, July 31, 1997]



Sec. 2429.23  Extension; waiver.

    (a) Except as provided in paragraph (d) of this section, and 
notwithstanding Sec. 2429.21(b) of this subchapter, the Authority or 
General Counsel, or their designated representatives, as appropriate, 
may extend any time limit provided in this subchapter for good cause 
shown, and shall notify the parties of any such extension. Requests for 
extensions of time shall be in writing and received by the appropriate 
official not later than five (5) days before the established time limit 
for filing, shall state the position of the other parties on the request 
for extension, and shall be served on the other parties.
    (b) Except as provided in paragraph (d) of this section, the 
Authority or General Counsel, or their designated representatives, as 
appropriate, may waive any expired time limit in this subchapter in 
extraordinary circumstances. Request for a waiver of time limits shall 
state the position of the other parties and shall be served on the other 
parties.
    (c) The time limits established in this subchapter may not be 
extended or waived in any manner other than that described in this 
subchapter.
    (d) Time limits established in 5 U.S.C. 7105(f), 7117(c)(2) and 
7122(b) may not be extended or waived under this section.

[45 FR 3516, Jan. 17, 1980, as amended at 48 FR 40194, Sept. 6, 1983; 51 
FR 45752, Dec. 22, 1986]



Sec. 2429.24  Place and method of filing; acknowledgement.

    (a) All documents filed or required to be filed with the Authority 
pursuant to this subchapter shall be filed with the Director, Case 
Control Office, Federal Labor Relations Authority, Docket Room, Suite 
200, 1400 K Street, NW., Washington, DC 20424-0001 (telephone: (202) 
218-7740) between 9 a.m. and 5 p.m., Monday through Friday (except 
Federal holidays). Documents hand-delivered for filing must be presented 
in the Docket Room not later than 5 p.m. to be accepted for filing on 
that day.
    (b) A document submitted to the General Counsel pursuant to this 
subchapter shall be filed with the General Counsel at the address set 
forth in the appendix.
    (c) A document submitted to a Regional Director pursuant to this 
subchapter shall be filed with the appropriate regional office, as set 
forth in the appendix.
    (d) A document submitted to an Administrative Law Judge pursuant to 
this subchapter shall be filed with the appropriate Administrative Law 
Judge, as set forth in the appendix.
    (e) All documents filed pursuant to this section shall be filed in 
person, by commercial delivery, by first-class mail, or by certified 
mail. Provided, however, that where facsimile equipment is available, 
motions; information pertaining to prehearing disclosure, conferences, 
orders, or hearing dates, times, and locations; information pertaining 
to subpoenas; and other similar matters may be filed by facsimile 
transmission, provided that the entire individual filing by the party 
does not exceed 10 pages in total length, with normal margins and font 
sizes.
    (f) All matters filed under paragraphs (a), (b), (c) and (d) of this 
section shall be printed, typed, or otherwise legibly duplicated: Carbon 
copies of typewritten matter will be accepted if they are clearly 
legible.
    (g) Documents in any proceedings under this subchapter, including 
correspondence, shall show the title of the proceeding and the case 
number, if any.
    (h) The original of each document required to be filed under this 
subchapter shall be signed by the party or by an attorney or 
representative of record for the party, or by an officer of the party, 
and shall contain the address and telephone number of the person signing 
it.
    (i) A return postal receipt may serve as acknowledgement of receipt 
by the Authority, General Counsel, Administrative Law Judge, Regional 
Director, or Hearing Officer, as appropriate. The receiving officer will 
otherwise acknowledge receipt of documents filed only when the filing 
party so requests

[[Page 406]]

and includes an extra copy of the document or its transmittal letter 
which the receiving office will date stamp upon receipt and return. If 
return is to be made by mail, the filing party shall include a self-
addressed, stamped envelope for the purpose.

[45 FR 3516, Jan. 17, 1980, as amended at 51 FR 45752, Dec. 22, 1986; 58 
FR 53105, Oct. 14, 1993; 62 FR 40924, July 31, 1997; 68 FR 10953, Mar. 
7, 2003; 68 FR 23885, May 6, 2003]



Sec. 2429.25  Number of copies and paper size.

    Unless otherwise provided by the Authority or the General Counsel, 
or their designated representatives, as appropriate, or under this 
subchapter, and with the exception of any prescribed forms, any document 
or paper filed with the Authority, General Counsel, Administrative Law 
Judge, Regional Director, or Hearing Officer, as appropriate, under this 
subchapter, together with any enclosure filed therewith, shall be 
submitted on 8\1/2\x11 inch size paper, using normal margins and font 
sizes, in an original and four (4) legible copies. Where facsimile 
filing is permitted pursuant to Sec. 2429.24(e), one (1) legible copy, 
capable of reproduction, shall be sufficient. A clean copy capable of 
being used as an original for purposes such as further reproduction may 
be substituted for the original.

[62 FR 40924, July 31, 1997]



Sec. 2429.26  Other documents.

    (a) The Authority or the General Counsel, or their designated 
representatives, as appropriate, may in their discretion grant leave to 
file other documents as they deem appropriate.
    (b) A copy of such other documents shall be served on the other 
parties.



Sec. 2429.27  Service; statement of service.

    (a) Except as provided in Sec. 2423.10(c) and (d), any party filing 
a document as provided in this subchapter is responsible for serving a 
copy upon all counsel of record or other designated representative(s) of 
parties, upon parties not so represented, and upon any interested person 
who has been granted permission by the Authority pursuant to Sec. 
2429.9 to present written and/or oral argument as amicus curiae. Service 
upon such counsel or representative shall constitute service upon the 
party, but a copy also shall be transmitted to the party.
    (b) Service of any document or paper under this subchapter, by any 
party, including documents and papers served by one party on any other 
party, shall be accomplished by certified mail, first-class mail, 
commercial delivery, or in person. Where facsimile equipment is 
available, service by facsimile of documents described in Sec. 
2429.24(e) is permissible.
    (c) A signed and dated statement of service shall be submitted at 
the time of filing. The statement of service shall include the names of 
the parties and persons served, their addresses, the date of service, 
the nature of the document served, and the manner in which service was 
made.
    (d) The date of service or date served shall be the day when the 
matter served is deposited in the U.S. mail, delivered in person, 
received from commercial delivery, or, in the case of facsimile 
transmissions, the date transmitted.

[45 FR 3516, Jan. 17, 1980, as amended at 62 FR 40924, July 31, 1997]



Sec. 2429.28  Petitions for amendment of regulations.

    Any interested person may petition the Authority or General Counsel 
in writing for amendments to any portion of these regulations. Such 
petition shall identify the portion of the regulations involved and 
provide the specific language of the proposed amendment together with a 
statement of grounds in support of such petition.



PART 2430_AWARDS OF ATTORNEY FEES AND OTHER EXPENSES--Table of Contents




Sec.
2430.1 Purpose.
2430.2 Proceedings affected; eligibility for award.
2430.3 Standards for awards.
2430.4 Allowable fees and expenses.
2430.5 Rulemaking on maximum rates for attorney fees.
2430.6 Contents of application; net worth exhibit; documentation of fees 
          and expenses.

[[Page 407]]

2430.7 When an application may be filed; referral to Administrative Law 
          Judge; stay of proceeding.
2430.8 Filing and service of documents.
2430.9 Answer to application; reply to answer; comments by other 
          parties; extensions of time to file documents.
2430.10 Settlement.
2430.11 Further proceedings.
2430.12 Administrative Law Judge's decision; contents; service; transfer 
          of case to the Authority; contents of record in case.
2430.13 Exceptions to Administrative Law Judge's decision; briefs; 
          action of Authority.
2430.14 Payment of award.

    Authority: 5 U.S.C. 504.

    Source: 46 FR 48623, Oct. 2, 1981, unless otherwise noted.



Sec. 2430.1  Purpose.

    The Equal Assess to Justice Act, 5 U.S.C. 504, provides for the 
award of attorney, agent, or witness fees and other expenses to eligible 
individuals and entities who are parties to Authority adversary 
adjudications. An eligible party may receive an award when it prevails 
over the General Counsel, unless the General Counsel's position in the 
proceeding was substantially justified, or special circumstances make an 
award unjust. The rules in this part describe the parties eligible for 
awards, and the Authority proceeding that is covered. They also set 
forth the procedures for applying for such awards, and the procedures by 
which the Authority will rule on such applications.

[51 FR 33837, Sept. 23, 1986]



Sec. 2430.2  Proceedings affected; eligibility for award.

    (a) The provisions of this part apply to unfair labor practice 
proceedings pending on complaint against a labor organization at any 
time since October 1, 1981.
    (b) A respondent in an unfair labor proceeding which has prevailed 
in the proceeding, or in a significant and discrete portion of the 
proceeding, and who otherwise meets the eligibility requirements of this 
section, is eligible to apply for an award of attorneys fees and other 
expenses allowable under the provisions of Sec. 2430.4 of these rules.
    (1) Applicants eligible to receive an award in proceedings conducted 
by the Authority are any partnership, corporation, association, or 
public or private organization with a net worth of not more than $5 
million ($7 million in cases involving adversary adjudications pending 
on or commenced on or after August 5, 1985) and not more than 500 
employees.
    (2) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
complaint was issued.
    (3) The employees of an applicant include all persons who regularly 
perform services for remuneration for the applicant, under the 
applicant's direction and control. Part-time employees shall be included 
on a proportional basis.
    (4) An applicant that participates in a proceeding primarily on 
behalf of one or more other persons or entities that would be ineligible 
is not itself eligible for an award.

[46 FR 48623, Oct. 2, 1981, as amended at 51 FR 33837, Sept. 23, 1986]



Sec. 2430.3  Standards for awards.

    (a) An eligible applicant may receive an award for fees and expenses 
incurred in connection with a proceeding, or in a significant and 
discrete portion of the proceeding, unless the position of the General 
Counsel over which the applicant has prevailed was substantially 
justified. The burden of proof that an award should not be made to an 
eligible applicant is on the General Counsel, who may avoid an award by 
showing that its position in initiating the proceeding was reasonable in 
law and fact.
    (b) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the proceeding or if special circumstances 
make the award sought unjust.



Sec. 2430.4  Allowable fees and expenses.

    (a)(1)(i) No award for the fee of an attorney or agent under this 
part may exceed $125.00 per hour, or for adversary adjudications 
commenced prior to March 29, 1996, $75.00 per hour, indexed to reflect 
cost of living increases as follows:

[[Page 408]]

[GRAPHIC] [TIFF OMITTED] TR28FE00.001

    (ii) The cost of living index to be used is the Consumer Price 
Index, All Urban Consumers, U.S. City Average, All Items (CPI-U). If 
legal services are provided during more than one year, each year shall 
be calculated separately. If an annual average CPI-U for a particular 
year is not yet available, the prior year's annual average CPI-U shall 
be used.
    (2) No award to compensate an expert witness may exceed the highest 
rate that the Authority pays expert witnesses. However, an award may 
also include the reasonable expenses of the attorney, agent, or witness 
as a separate item, if the attorney, agent, or witness ordinarily 
charges clients separately for such expenses.
    (b) In determining the reasonableness of the fee sought for an 
attorney, agent or expert witness, the following matters may be 
considered:
    (1) If the attorney, agent or witness is in practice, his or her 
customary fee for similar services, or, if an employee of the applicant, 
the fully allocated cost of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (c) The reasonable cost of any study, analysis, engineering report, 
test, project or similar matters prepared on behalf of an applicant may 
be awarded, to the extent that the charge for the service does not 
exceed the prevailing rate for similar services, and the study or other 
matter was necessary for preparation of the applicant's case.

[46 FR 48623, Oct. 2, 1981, as amended at 64 FR 30861, June 9, 1999; 65 
FR 10374, Feb. 28, 2000]



Sec. 2430.5  Rulemaking on maximum rates for attorney fees.

    If warranted by special factors, attorney fees may be awarded at a 
rate higher than that established in Sec. 2430.4. Any such increase in 
the rate for attorney fees shall be made only upon a petition submitted 
by the applicant, pursuant to Sec. 2430.6. Determinations regarding fee 
adjustments are subject to Authority review as specified in Sec. 
2430.13.

[65 FR 10374, Feb. 28, 2000



Sec. 2430.6  Contents of application; net worth exhibit; documentation of 

fees and expenses.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the proceeding for which an award is 
sought. The application shall state the particulars in which the 
applicant has prevailed and identify the positions of the General 
Counsel in the proceeding that the applicant alleges were not 
substantially justified. The application shall also state the number of 
employees of the applicant and describe briefly the type and purpose of 
its organization or business.
    (b) The application shall include a statement that the applicant's 
net worth does not exceed $5 million.
    (c) The application shall state the amount of fees and expenses for 
which an award is sought.
    (d) The application may also include any other matters that the 
applicant wishes the Authority to consider in determining whether and in 
what amount an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer or attorney of the applicant. It shall also contain 
or be accompanied by a written verification under oath or under penalty 
of perjury that the information provided in the application is true.
    (f) Each applicant must provide with its application a detailed 
exhibit showing the net worth of the applicant

[[Page 409]]

when the proceeding was initiated. The exhibit may be in any form 
convenient to the applicant that provides full disclosure of the 
applicant's assets and liabilities and is sufficient to determine 
whether the applicant qualifies under the standards in this part. The 
Administrative Law Judge may require an applicant to file additional 
information to determine its eligibility for an award.
    (g) The application shall be accompanied by full documentation of 
the fees and expenses for which an award is sought. A separate itemized 
statement shall be submitted for each professional firm or individual 
whose services are covered by the application, showing the hours spent 
in connection with the proceeding by each individual, the rate at which 
each fee has been computed, any expenses for which reimbursement is 
sought, the total amount claimed, and the total amount paid or payable 
by the applicant or by any other person or entity for the services 
provided. The Administrative Law Judge may require the applicant to 
provide vouchers, receipts, or other substantiation for any expenses 
claimed.



Sec. 2430.7  When an application may be filed; referral to Administrative Law 

Judge; stay of proceeding.

    (a) An application may be filed after entry of the final order 
establishing that the applicant has prevailed in the proceeding, or in a 
significant and discrete substantive portion of the proceeding, but in 
no case later than thirty (30) days after the entry of the Authority's 
final order in the proceeding. The application for an award shall be 
filed with the Authority in Washington, DC, in an original and four 
copies, and served on all parties to the unfair labor practice 
proceeding. Service of the application shall be in the same manner as 
prescribed in Sec. Sec. 2429.22 and 2429.27. Upon filing, the 
application shall be referred by the Authority to the Administrative Law 
Judge who heard the proceeding upon which the application is based, or, 
in the event the proceeding had not previously been heard by an 
Administrative Law Judge, it shall be referred to the Chief 
Administrative Law Judge for designation of an Administrative Law Judge, 
to consider the application. When the Administrative Law Judge to whom 
the application has been referred is or becomes unavailable, the 
provisions of Sec. 2423.20 shall be applicable.
    (b) Proceedings for the award of fees and other expenses, but not 
the time limit of this section for filing an application for an award, 
shall be stayed pending final disposition of the case, in the event any 
persons seeks Authority reconsideration or court review of the Authority 
decision that forms the basis for the application for fees and expenses.



Sec. 2430.8  Filing and service of documents.

    All pleadings or documents after the time the case is referred by 
the Authority to an Administative Law Judge, until the issuance of the 
Judge's decision, shall be filed in an original and four copies with the 
Administrative Law Judge and served on all parties to the proceeding. 
Service of such documents shall be in the same manner as prescribed in 
Sec. Sec. 2429.22 and 2429.27.



Sec. 2430.9  Answer to application; reply to answer; comments by other 

parties; extensions of time to file documents.

    (a) Within 30 days after service of an application, the General 
Counsel may file an answer to the application. The filing of a motion to 
dismiss the application shall stay the time for filing an answer to a 
date thirty (30) days after issuance of any order denying the motion.
    (b) If the General Counsel and the applicant believe that the issues 
in the fee application can be settled, they may jointly file a statement 
of their intent to negotiate toward a settlement. The filing of such a 
statement shall extend the time for filing an answer for an additional 
30 days.
    (c) The answer shall explain in detail any objections to the award 
requested, and identify the facts relied on in support of the General 
Counsel's position. If the answer is based on alleged facts not already 
in the record of the proceeding, supporting affidavits shall be provided 
or a request made for further proceedings under Sec. 2430.11.

[[Page 410]]

    (d) Within fifteen (15) days after service of an answer, the 
applicant may file a reply. If the reply is based on alleged facts not 
already in the record of the proceeding, supporting affidavits shall be 
provided or a request made for further proceedings under Sec. 2430.11.
    (e) Any party to a proceeding other than the applicant and the 
General Counsel may file comments on an application within 30 days after 
it is served, or on an answer within 15 days after it is served. A 
commenting party may not participate further in the proceeding on the 
application unless the Administrative Law Judge determines that such 
participation is required in order to permit full exploration of matters 
raised in the comments.
    (f) Motions for extensions of time to file documents permitted by 
this section or Sec. 2430.11 shall be filed with the Administrative Law 
Judge not less than five (5) days before the due date of the document.



Sec. 2430.10  Settlement.

    The applicant and the General Counsel may agree on a proposed 
settlement of the award before final action on the application. If an 
applicant and the General Counsel agree on a proposed settlement of an 
award before an application has been filed, the proposed settlement 
shall be filed with the application. All such settlements shall be 
subject to approval by the Authority.



Sec. 2430.11  Further proceedings.

    (a) The determination of an award may be made on the basis of the 
documents in the record, or the Administrative Law Judge, upon request 
of either the applicant or the General Counsel, or on his or her own 
initiative, may order further proceedings. Such further proceedings may 
include, but shall not be limited to, an informal conference, oral 
argument, additional written submissions, or an evidentiary hearing.
    (b) A request that the Administrative Law Judge order further 
proceedings under this section shall specifically identify the disputed 
issues and the evidence sought to be adduced, and shall explain why the 
additional proceedings are necessary to resolve the issues.
    (c) An order of the Administrative Law Judge scheduling oral 
argument, additional written submissions, or an evidentiary hearing, 
shall specify the issues to be considered in such argument, submission, 
or hearing.
    (d) Any evidentiary hearing held pursuant to this section shall be 
conducted not earlier than forty-five (45) days after the date on which 
the application is served. In all other respects, such hearing shall be 
conducted in accordance with Sec. Sec. 2423.14, 2423.16, 2423.17, 
2423.19 through 2423.21, 2423.23, and 2423.24, insofar as these sections 
are consistent with the provisions of this part.



Sec. 2430.12  Administrative Law Judge's decision; contents; service; 

transfer of case to the Authority; contents of record in case.

    (a) Upon conclusion of proceedings under Sec. Sec. 2430.6 to 
2430.11, the Administrative Law Judge shall prepare a decision. The 
decision shall include written findings and conclusions on the 
applicant's status as a prevailing party and eligibility, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. The decision shall also include, if at 
issue, findings on whether the agency's position was substantially 
justified, whether the applicant unduly protracted the proceedings, or 
whether special circumstances make an award unjust. The Administrative 
Law Judge shall cause the decision to be served promptly on all parties 
to the proceeding. Thereafter, the Administrative Law Judge shall 
transmit the case to the Authority, including the judge's decision and 
the record. Service of the Administrative Law Judge's decision and of 
the order transferring the case to the Board shall be complete upon 
mailing.
    (b) The record in a proceeding on an application for an award of 
fees and expenses shall consist of the application for an award of fees 
and expenses and any amendments or attachments thereto, the net worth 
exhibit, the answer and any amendments or attachments thereto, any reply 
to the answer, any comments by other parties, motions, rulings, orders, 
stipulations, written

[[Page 411]]

submissions, the stenographic transcript of oral argument, the 
stenographic transcript of the hearing, exhibits and depositions, 
together with the Administrative Law Judge's decision, and the 
exceptions and briefs as provided in Sec. 2430.13, and the record of 
the unfair labor practice proceeding upon which the application is 
based.



Sec. 2430.13  Exceptions to Administrative Law Judge's decision; briefs; 

action of Authority.

    Procedures before the Authority, including the filing of exceptions 
to the administrative law judge's decision rendered pursuant to Sec. 
2430.12, and action by the Authority, shall be in accordance with 
Sec. Sec. 2423.26(c), 2423.27, and 2423.28 of these rules. The 
Authority's review of the matter shall be in accordance with Sec. 
2423.29(a).



Sec. 2430.14  Payment of award.

    To obtain payment of an award made by the Authority the applicant 
shall submit to the Executive Director of the Authority a copy of the 
Authority's final decision granting the award, accompanied by a 
statement that the applicant will not seek court review of the decision. 
The amount awarded will then be paid unless judicial review of the 
award, or of the underlying decision, has been sought by the applicant 
or any other party to the proceeding.

[[Page 412]]



               SUBCHAPTER D_FEDERAL SERVICE IMPASSES PANEL



PART 2470_GENERAL--Table of Contents




                            Subpart A_Purpose

Sec.
2470.1 Purpose.

                          Subpart B_Definitions

2470.2 Definitions.

    Authority: 3 U.S.C. 431; 5 U.S.C. 7119, 7134.



                            Subpart A_Purpose



Sec. 2470.1  Purpose.

    The regulations contained in this subchapter are intended to 
implement the provisions of section 7119 of title 5 and, where 
applicable, section 431 of title 3 of the United States Code. They 
prescribe procedures and methods which the Federal Service Impasses 
Panel may utilize in the resolution of negotiation impasses when 
voluntary arrangements, including the services of the Federal Mediation 
and Conciliation Service or any other third-party meditation, fail to 
resolve the disputes. It is the policy of the Panel to encourage labor 
and management to resolve disputes on terms that are mutually agreeable 
at any stage of the Panel's procedures.

[63 FR 46159, Aug. 31, 1998]



                          Subpart B_Definitions



Sec. 2470.2  Definitions.

    (a) The terms agency, labor organization, and conditions of 
employment as used in this subchapter shall have the meaning set forth 
in 5 U.S.C. 7103(a). When used in connection with 3 U.S.C. 431, the term 
agency as used in the Panel's regulations in this subchapter means an 
employing office as defined in 3 U.S.C. 401(a)(4).
    (b) The term Executive Director means the Executive Director of the 
Panel.
    (c) The terms designated representative or designee of the Panel 
means a Panel member, a staff member, or other individual designated by 
the Panel to act on its behalf.
    (d) The term hearing means a factfinding hearing, arbitration 
hearing, or any other hearing procedure deemed necessary to accomplish 
the purposes of 5 U.S.C. 7119.
    (e) The term impasse means that point in the negotiation of 
conditions of employment at which the parties are unable to reach 
agreement, notwithstanding their efforts to do so by direct negotiations 
and by the use of mediation or other voluntary arrangements for 
settlement.
    (f) The term Panel means the Federal Service Impasses Panel 
described in 5 U.S.C. 7119(c) or a quorum thereof.
    (g) The term party means the agency or the labor organization 
participating in the negotiation of conditions of employment.
    (h) The term quorum means a majority of the members of the Panel.
    (i) The term voluntary arrangements means any method adopted by the 
parties for the purpose of assisting them in their resolution of a 
negotiation dispute which is not inconsistent with the provisions of 5 
U.S.C. 7119.

[45 FR 3520, Jan. 17, 1980, as amended at 48 FR 19693, May 2, 1983; 63 
FR 46159, Aug. 31, 1998]



PART 2471_PROCEDURES OF THE PANEL--Table of Contents




Sec.
2471.1 Request for Panel consideration; request for Panel approval of 
          binding arbitration.
2471.2 Request form.
2471.3 Content of request.
2471.4 Where to file.
2471.5 Filing and service.
2471.6 Investigation of request; Panel procedures; approval of binding 
          arbitration.
2471.7 Preliminary factfinding procedures.
2471.8 Conduct of factfinding and other hearings; prehearing 
          conferences.
2471.9 Report and recommendations.
2471.10 Duties of each party following receipt of recommendations.
2471.11 Final action by the Panel.
2471.12 Inconsistent labor agreement provisions.

    Authority: 5 U.S.C. 7119, 7134.

    Source: 45 FR 3520, Jan. 17, 1980, unless otherwise noted.

[[Page 413]]



Sec. 2471.1  Request for Panel consideration; request for Panel approval of 

binding arbitration.

    If voluntary arrangements, including the services of the Federal 
Mediation and Conciliation Service or any other third-party mediation, 
fail to resolve a negotiation impasse:
    (a) Either party, or the parties jointly, may request the Panel to 
consider the matter by filing a request as hereinafter provided; or the 
Panel may, pursuant to 5 U.S.C. 7119(c)(1), undertake consideration of 
the matter upon request of (i) the Federal Mediation and Conciliation 
Service, or (ii) the Executive Director; or
    (b) The parties may jointly request the Panel to approve any 
procedure, which they have agreed to adopt, for binding arbitration of 
the negotiation impasse by filing a request as hereinafter provided.



Sec. 2471.2  Request form.

    A form is available for use by the parties in filing a request for 
consideration of an impasse or approval of a binding arbitration 
procedure. Copies are available from the Office of the Executive 
Director, Federal Service Impasses Panel, Suite 200, 1400 K Street, NW., 
Washington, DC 20424-0001. Telephone (202) 218-7790. Use of the form is 
not required provided that the request includes all of the information 
set forth in Sec. 2471.3.

[68 FR 10954, Mar. 7, 2003, as amended at 68 FR 23885, May 6, 2003]



Sec. 2471.3  Content of request.

    (a) A request from a party or parties to the Panel for consideration 
of an impasse must be in writing and include the following information:
    (1) Identification of the parties and individuals authorized to act 
on their behalf, including their addresses, telephone numbers, and 
facsimile numbers;
    (2) Statement of issues at impasse and the summary positions of the 
initiating party or parties with respect to those issues; and
    (3) Number, length, and dates of negotiation and mediation sessions 
held, including the nature and extent of all other voluntary 
arrangements utilized.
    (b) A request for approval of a binding arbitration procedure must 
be in writing, jointly filed by the parties, and include the following 
information about the pending impasse:
    (1) Identification of the parties and individuals authorized to act 
on their behalf, including their addresses, telephone numbers, and 
facsimile numbers;
    (2) Brief description of the impasse including the issues to be 
submitted to the arbitrator;
    (3) Number, length, and dates of negotiation and mediation sessions 
held, including the nature and extent of all other voluntary 
arrangements utilized;
    (4) Statement as to whether any of the proposals to be submitted to 
the arbitrator contain questions concerning the duty to bargain and a 
statement of each party's position concerning such questions; and
    (5) Statement of the arbitration procedures to be used, including 
the type of arbitration, the method of selecting the arbitrator, and the 
arrangement for paying for the proceedings or, in the alternative, those 
provisions of the parties' labor agreement which contain this 
information.

[45 FR 3520, Jan. 17, 1980, as amended at 61 FR 41294, Aug. 8, 1996]



Sec. 2471.4  Where to file.

    Requests to the Panel provided for in this part, and inquiries or 
correspondence on the status of impasses or other related matters, 
should be addressed to the Executive Director, Federal Service Impasses 
Panel, Suite 200, 1400 K Street, NW., Washington, DC 20424-0001. 
Telephone (202) 218-7790. Fax (202) 482-6674.

[68 FR 10954, Mar. 7, 2003, as amended at 68 FR 23885, May 6, 2003]



Sec. 2471.5  Filing and service.

    (a) Filing and service of request. (1) Any party submitting a 
request for Panel consideration of an impasse or a request for approval 
of a binding arbitration procedure shall file an original and one copy 
with the Panel. A clean copy may be submitted for the original. Requests 
may be submitted in person or by registered mail, certified mail, 
regular mail, or private delivery service. Requests may also be accepted

[[Page 414]]

by the Panel if transmitted to the facsimile machine of its office. A 
party submitting a request by facsimile shall also file an original for 
the Panel's records, but failure to do so shall not affect the validity 
of the filing by facsimile, if otherwise proper.
    (2) The party submitting the request shall serve a copy of such 
request upon all counsel of record or other designated representative(s) 
of parties, upon parties not so represented, and upon any mediation 
service which may have been utilized. Service upon such counsel or 
representative shall constitute service upon the party, but a copy also 
shall be transmitted to the party. Service of a request may be made in 
person or by registered mail, certified mail, regular mail, or private 
delivery service. With the permission of the person receiving the 
request, service may be made by facsimile transmission or by any other 
agreed-upon method. When the Panel acts on a request from the Federal 
Mediation and Conciliation Service or acts on a request from the 
Executive Director under Sec. 2471.1(a), it will notify the parties to 
the dispute, their counsel of record, if any, and any mediation service 
which may have been utilized.
    (b) Filing and service of other documents. (1) Any party submitting 
a response to, or other document in connection with, a request for Panel 
consideration of an impasse or a request for approval of a binding 
arbitration procedure shall file an original and one copy with the 
Panel. A clean copy may be submitted for the original. Documents may be 
submitted to the Panel in person or by registered mail, certified mail, 
regular mail, or private delivery service. Documents may also be 
accepted by the Panel if transmitted to the facsimile machine of its 
office, but only with advance permission, which may be obtained by 
telephone. A party submitting a document by facsimile shall also file an 
original for the Panel's records, but failure to do so shall not affect 
the validity of the submission, if otherwise proper.
    (2) The party submitting the document shall serve a copy of such 
request upon all counsel of record or other designated representative(s) 
of parties, or upon parties not so represented. Service upon such 
counsel or representative shall constitute service upon the party, but a 
copy also shall be transmitted to the party. Service of a document may 
be made in person or by registered mail, certified mail, regular mail, 
or private delivery service. With the permission of the person receiving 
the document, service may be made by facsimile transmission or by any 
other agreed-upon method.
    (c) A signed and dated statement of service shall accompany each 
document submitted to the Panel. The statement of service shall include 
the names of the parties and persons served, their addresses, the date 
of service, the nature of the document served, and the manner in which 
service was made.
    (d) The date of service or date served shall be the day when the 
matter served, if properly addressed, is deposited in the U.S. mail or 
is delivered in person or is deposited with a private delivery service 
that will provide a record showing the date the document was tendered to 
the delivery service. Where service is made by facsimile transmission, 
the date of service shall be the date on which transmission is received.
    (e) Unless otherwise provided by the Panel or its designated 
representatives, any document or paper filed with the Panel under this 
section, together with any enclosure filed therewith, shall be 
typewritten on 8\1/2\x11 inch plain white paper, shall have margins no 
less than 1 inch on each side, shall be in typeface no smaller than 10 
characters per inch, and shall be numbered consecutively. Nonconforming 
papers may, at the Panel's discretion, be rejected.

[48 FR 19694, May 2, 1983, as amended at 61 FR 41294, Aug. 8, 1996]



Sec. 2471.6  Investigation of request; Panel procedures; approval of binding arbitration.

    (a) Upon receipt of a request for consideration of an impasse, the 
Panel or its designee will promptly conduct an investigation, consulting 
when necessary with the parties and with any mediation service utilized. 
After due consideration, the Panel shall either:
    (1) Decline to assert jurisdiction in the event that it finds that 
no impasse

[[Page 415]]

exists or that there is other good cause for not asserting jurisdiction, 
in whole or in part, and so advise the parties in writing, stating its 
reasons; or
    (2) Assert jurisdiction and
    (i) Recommend to the parties procedures for the resolution of the 
impasse; and/or
    (ii) Assist the parties in resolving the impasse through whatever 
methods and procedures the Panel considers appropriate. The procedures 
utilized by the Panel may include, but are not limited to: informal 
conferences with a Panel designee; factfinding (by a Panel designee or a 
private factfinder); written submissions; show cause orders; oral 
presentations to the Panel; and arbitration or mediation-arbitration (by 
a Panel designee or a private arbitrator). Following procedures used by 
the Panel, it may issue a report to the parties containing 
recommendations for settlement prior to taking final action to resolve 
the impasse.
    (b) Upon receipt of a request for approval of a binding arbitration 
procedure, the Panel or its designee will promptly conduct an 
investigation, consulting when necessary with the parties and with any 
mediation service utilized. After due consideration, the Panel shall 
promptly approve or disapprove the request, normally within five (5) 
workdays.

[45 FR 3520, Jan. 17, 1980, as amended at 61 FR 41294, Aug. 8, 1996]



Sec. 2471.7  Preliminary factfinding procedures.

    When the Panel determines that a factfinding hearing is necessary 
under Sec. 2471.6, and it appoints one or more of its designees to 
conduct such hearing, it will issue and serve upon each of the parties a 
notice of hearing and a notice of prehearing conference, if any. The 
notice will state:
    (a) The names of the parties to the dispute;
    (b) The date, time, place, type, and purpose of the hearing;
    (c) The date, time, place, and purpose of the prehearing conference, 
if any;
    (d) The name of the designated representatives appointed by the 
Panel;
    (e) The issues to be resolved; and
    (f) The method, if any, by which the hearing shall be recorded.

[45 FR 3520, Jan. 17, 1980, as amended at 48 FR 19694, May 2, 1983; 61 
FR 41295, Aug. 8, 1996]



Sec. 2471.8  Conduct of factfinding and other hearings; prehearing conferences.

    (a) A designated representative of the Panel, when so appointed to 
conduct a hearing, shall have the authority on behalf of the Panel to:
    (1) Administer oaths, take the testimony or deposition of any person 
under oath, receive other evidence, and issue subpenas;
    (2) Conduct the hearing in open, or in closed session at the 
discretion of the designated representative for good cause shown;
    (3) Rule on motions and requests for appearance of witnesses and the 
production of records;
    (4) Designate the date on which posthearing briefs, if any, shall be 
submitted.
    (5) Determine all procedural matters concerning the hearing, 
including the length of sessions, conduct of persons in attendance, 
recesses, continuances, and adjournments; and take any other appropriate 
procedural action which, in the judgment of the designated 
representative, will promote the purpose and objectives of the hearing.
    (b) A prehearing conference may be conducted by the designated 
representative of the Panel in order to:
    (1) Inform the parties of the purpose of the hearing and the 
procedures under which it will take place;
    (2) Explore the possibilities of obtaining stipulations of fact;
    (3) Clarify the positions of the parties with respect to the issues 
to be heard; and
    (4) Discuss any other relevant matters which will assist the parties 
in the resolution of the dispute.

[45 FR 3520, Jan. 17, 1980, as amended at 48 FR 19694, May 2, 1983]



Sec. 2471.9  Report and recommendations.

    (a) When a report is issued after a factfinding hearing is conducted 
pursuant to Sec. 2471.7 and 2471.8, it normally

[[Page 416]]

shall be in writing and, when authorized by the Panel, shall contain 
recommendations.
    (b) A report of the designated representative containing 
recommendations shall be submitted to the parties, with two (2) copies 
to the Executive Director, within a period normally not to exceed thirty 
(30) calendar days after receipt of the transcript or briefs, if any.
    (c) A report of the designated representative not containing 
recommendations shall be submitted to the Panel with a copy to each 
party within a period normally not to exceed thirty (30) calendar days 
after receipt of the transcript or briefs, if any. The Panel shall then 
take whatever action it may consider appropriate or necessary to resolve 
the impasse.

[45 FR 3520, Jan. 17, 1980, as amended at 61 FR 41295, Aug. 8, 1996]



Sec. 2471.10  Duties of each party following receipt of recommendations.

    (a) Within thirty (30) calendar days after receipt of a report 
containing recommendations of the Panel or its designated 
representative, each party shall, after conferring with the other, 
either:
    (1) Accept the recommendations and so notify the Executive Director; 
or
    (2) Reach a settlement of all unresolved issues and submit a written 
settlement statement to the Executive Director; or
    (3) Submit a written statement to the Executive Director setting 
forth the reasons for not accepting the recommendations and for not 
reaching a settlement of all unresolved issues.
    (b) A reasonable extension of time may be authorized by the 
Executive Director for good cause shown when requested in writing by 
either party prior to the expiration of the time limits.

[45 FR 3520, Jan. 17, 1980, as amended at 48 FR 19694, May 2, 1983]



Sec. 2471.11  Final action by the Panel.

    (a) If the parties do not arrive at a settlement as a result of or 
during actions taken under Sec. Sec. 2471.6(a)(2), 2471.7, 2471.8, 
2471.9, and 2471.10, the Panel may take whatever action is necessary and 
not inconsistent with 5 U.S.C. chapter 71 to resolve the impasse, 
including but not limited to, methods and procedures which the Panel 
considers appropriate, such as directing the parties to accept a 
factfinder's recommendations, ordering binding arbitration conducted 
according to whatever procedure the Panel deems suitable, and rendering 
a binding decision.
    (b) In preparation for taking such final action, the Panel may hold 
hearings, administer oaths, take the testimony or deposition of any 
person under oath, and issue subpenas as provided in 5 U.S.C. 7132, or 
it may appoint or designate one or more individuals pursuant to 5 U.S.C. 
7119(c)(4) to exercise such authority on its behalf.
    (c) When the exercise of authority under this section requires the 
holding of a hearing, the procedure contained in Sec. 2471.8 shall 
apply.
    (d) Notice of any final action of the Panel shall be promptly served 
upon the parties, and the action shall be binding on such parties during 
the term of the agreement, unless they agree otherwise.

[45 FR 3520, Jan. 17, 1980, as amended at 48 FR 19694, May 2, 1983]



Sec. 2471.12  Inconsistent labor agreement provisions.

    Any provisions of the parties' labor agreements relating to impasse 
resolution which are inconsistent with the provisions of either 5 U.S.C. 
7119 or the procedures of the Panel shall be deemed to be superseded, 
unless such provisions are permitted under 5 U.S.C. 7135.



PART 2472_IMPASSES ARISING PURSUANT TO AGENCY DETERMINATIONS NOT TO ESTABLISH 

OR TO TERMINATE FLEXIBLE OR COMPRESSED WORK SCHEDULES--Table of Contents




                    Subpart A_Purpose and Definitions

Sec.
2472.1 Purpose.
2472.2 Definitions.

                    Subpart B_Procedures of the Panel

2472.3 Request for Panel consideration.
2472.4 Content of request.
2472.5 Where to file.
2472.6 Filing and service.

[[Page 417]]

2472.7 Investigation of request; Panel assistance.
2472.8 Preliminary hearing procedures.
2472.9 Conduct of hearing and prehearing conference.
2472.10 Reports.
2472.11 Final action by the Panel.

    Authority: 5 U.S.C. 6131.

    Source: 48 FR 19695, May 2, 1983, unless otherwise noted.



                    Subpart A_Purpose and Definitions



Sec. 2472.1  Purpose.

    The regulations contained in this Part are intended to implement the 
provisions of section 6131 of title 5 of the United States Code. They 
prescribe procedures and methods which the Federal Service Impasses 
Panel may utilize in the resolution of negotiations impasses arising 
from agency determinations not to establish or to terminate flexible and 
compressed work schedules.



Sec. 2472.2  Definitions.

    (a) The term the Act means the Federal Employees Flexible and 
Compressed Work Schedules Act of 1982, Pub. L. 97-221, 5 U.S.C. 6120 et 
seq.
    (b) The term adverse agency impact shall have the meaning set forth 
in 5 U.S.C. 6131(b).
    (c) The term agency shall have the meaning set forth in 5 U.S.C. 
6121(1).
    (d) The term duly authorized delegatee means an official who has 
been delegated the authority to act for the head of the agency in the 
matter concerned.
    (e) The term agency determination means a determination: (1) Not to 
establish a flexible or compressed work schedule under 5 U.S.C. 
6131(c)(2); or (2) to terminate such a schedule under 5 U.S.C. 
6131(c)(3).
    (f) The terms collective bargaining agreement and exclusive 
representative shall have the meanings set forth in 5 U.S.C. 6121(8).
    (g) The term Executive Director means the Executive Director of the 
Panel.
    (h) The terms designated representative or designee of the Panel 
means a Panel member, staff member, or other individual designated by 
the Panel to act on its behalf.
    (i) The term flexible and compressed work schedules shall have the 
meaning set forth in 5 U.S.C. 6121 et seq.
    (j) The term hearing means a factfinding hearing or any other 
hearing procedures deemed necessary to accomplish the purpose of 5 
U.S.C. 6131.
    (k) The term impasse means that point in the negotiation of flexible 
and compressed work schedules at which the parties are unable to reach 
agreement on whether a schedule has had or would have an adverse agency 
impact.
    (l) The term Panel means the Federal Service Impasses Panel 
described in 5 U.S.C. 7119(c) or a quorum thereof.
    (m) The term party means the agency or the exclusive representative 
participating in negotiations concerning flexible and compressed work 
schedules.
    (n) The term quorum means a majority of the members of the Panel.
    (o) The term schedule(s) means flexible and compressed work 
schedules.

[48 FR 19695, May 2, 1983, as amended at 61 FR 41295, Aug. 8, 1996]



                    Subpart B_Procedures of the Panel



Sec. 2472.3  Request for Panel consideration.

    Either party, or the parties jointly, may request the Panel to 
resolve an impasse resulting from an agency determination not to 
establish or to terminate a flexible or compressed work schedule by 
filing a request as hereinafter provided. A form is available for use by 
the parties in filing a request with the Panel. Copies are available 
from the Office of the Executive Director, Federal Service Impasses 
Panel, Suite 200, 1400 K Street, NW., Washington, DC 20424-0001. 
Telephone (202) 218-7790. Fax (202) 482-6674. Use of the form is not 
required provided that the request includes all of the information set 
forth in Sec. 2472.4.

[68 FR 10954, Mar. 7, 2003, as amended at 68 FR 23885, May 6, 2003]

[[Page 418]]



Sec. 2472.4  Content of request.

    (a) A request from a party or parties to the Panel for consideration 
of an impasse arising from an agency determination not to establish or 
to terminate a flexible or compressed work schedule under section 6131 
(c)(2) or (c)(3) of the Act must be in writing and shall include the 
following information:
    (1) Identification of the parties and individuals authorized to act 
on their behalf, including their addresses, telephone numbers, and 
facsimile numbers;
    (2) Description of the bargaining unit involved in the dispute and 
the date recognition was accorded to the exclusive representative;
    (3) Number, length, and dates of negotiation sessions held;
    (4) A copy of any collective bargaining agreement between the 
parties and any other agreements concerning flexible and compressed work 
schedules;
    (5) A copy of the schedule or proposed schedule, if any, which is 
the subject of the agency's determination;
    (6) A copy of the agency's written determination and the finding on 
which the determination is based, including, in a case where the finding 
is made by a duly authorized delegatee, evidence of a specific 
delegation of authority to make such a finding; and
    (7) A summary of the position of the initiating party or parties 
with respect to the agency's determination.

[48 FR 19695, May 2, 1983, as amended at 61 FR 41295, Aug. 8, 1996]



Sec. 2472.5  Where to file.

    Requests to the Panel provided for in these rules, and inquiries or 
correspondence on the status of impasses or other related matters, 
should be directed to the Executive Director, Federal Service Impasses 
Panel, Suite 200, 1400 K Street, NW., Washington, DC 20424-0001. 
Telephone (202) 218-7790. Fax (202) 482-6674.

[68 FR 10954, Mar. 7, 2003, asamended at 68 FR 23885, May 6, 2003]



Sec. 2472.6  Filing and service.

    (a) Filing and service of request. (1) Any party submitting a 
request for Panel consideration of an impasse filed pursuant to Sec. 
2472.3 of these rules shall file an original and one copy with the 
Panel. A clean copy may be submitted for the original. Requests may be 
submitted in person or by registered mail, certified mail, regular mail, 
or private delivery service. Requests will also be accepted by the Panel 
if transmitted to the facsimile machine of its office. A party 
submitting a request by facsimile shall also file an original for the 
Panel's records, but failure to do so shall not affect the validity of 
the filing by facsimile, if otherwise proper.
    (2) The party submitting the request shall serve a copy of such 
request upon all counsel of record or other designated representative(s) 
of parties, and upon parties not so represented. Service upon such 
counsel or representative shall constitute service upon the party, but a 
copy also shall be transmitted to the party. Service of a request may be 
made in person or by registered mail, certified mail, regular mail, or 
private delivery service. With the permission of the person receiving 
the request, service may be made by facsimile transmission or by any 
other agreed-upon method.
    (b) Filing and service of other documents. (1) Any party submitting 
a response to, or other document in connection with, a request for Panel 
consideration of an impasse filed pursuant to Sec. 2472.3 shall file an 
original and one copy with the Panel. A clean copy may be submitted for 
the original. Documents may be submitted to the Panel in person or by 
registered mail, certified mail, regular mail, or private delivery 
service. Documents may also be accepted by the Panel if transmitted to 
the facsimile machine of its office, but only with advance permission, 
which may be obtained by telephone. A party submitting a document by 
facsimile shall also file an original for the Panel's records, but 
failure to do so shall not affect the validity of the submission, if 
otherwise proper.
    (2) The party submitting the document shall serve a copy of such 
request upon all counsel of record or other designated representative(s) 
of parties, or upon parties not so represented. Service upon such 
counsel or representative shall constitute service upon the party, but a 
copy also shall be transmitted to

[[Page 419]]

the party. Service of a document may be made in person or by registered 
mail, certified mail, regular mail, or private delivery service. With 
the permission of the person receiving the document, service may be made 
by facsimile transmission or by any other agreed-upon method.
    (c) A signed and dated statement of service shall accompany each 
document submitted to the Panel. The statement of service shall include 
the names of the parties and persons served, their addresses, the date 
of service, the nature of the document served, and the manner in which 
service was made.
    (d) The date of service or date served shall be the day when the 
matter served, if properly addressed, is deposited in the U.S. mail, is 
delivered in person, or is deposited with a private delivery service 
that will provide a record showing the date the document was tendered to 
the delivery service. Where service is made by facsimile transmission, 
the date of service shall be the date on which transmission is received.
    (e) Unless otherwise provided by the Panel or its designated 
representatives, any document or paper filed with the Panel under this 
part, together with any enclosure filed therewith, shall be typewritten 
on 8\1/2\x11 inch plain white paper, shall have margins no less than 1 
inch on each side, shall be in typeface no smaller than 10 characters 
per inch, and shall be numbered consecutively. Nonconforming papers may, 
at the Panel's discretion, be rejected.
    (f) An impasse arising pursuant to section 6131(c) (2) or (3) of the 
Act will not be considered to be filed, and no Panel action will be 
taken, until the party initiating the request has complied with Sec. 
2472.4, 2472.5, and 2472.6 of these regulations.

[48 FR 19695, May 2, 1983. Redesignated and amended at 61 FR 41295, Aug. 
8, 1996]



Sec. 2472.7  Investigation of request; Panel assistance.

    (a) Upon receipt of a request for consideration of an impasse filed 
in accordance with these rules, the Panel or its designee shall promptly 
conduct an investigation, consulting when necessary with the parties. 
After due consideration, the Panel shall determine the procedures by 
which the impasse shall be resolved and shall notify the parties of its 
determination.
    (b) The procedures utilized by the Panel shall afford the parties an 
opportunity to present their positions, including supporting evidence 
and arguments orally and/or in writing. They include, but are not 
limited to: informal conferences with a Panel designee; factfinding (by 
a Panel designee or a private factfinder); written submissions; show 
cause orders; and oral presentations to the Panel.

[48 FR 19695, May 2, 1983. Redesignated and amended at 61 FR 41295, 
41296, Aug. 8, 1996]



Sec. 2472.8  Preliminary hearing procedures.

    When the Panel determines that a hearing shall be held, and it 
appoints one or more of its designees to conduct such a hearing, it will 
issue and serve upon each of the parties a notice of hearing and a 
notice of prehearing conference, if any. The notice will state:
    (a) The names of the parties to the dispute;
    (b) The date, time, place, type, and purpose of the hearing;
    (c) The date, time, place, and purpose of the prehearing conference, 
if any;
    (d) The name of the designated representative(s) appointed by the 
Panel;
    (e) The issue(s) to be resolved; and
    (f) The method, if any, by which the hearing shall be transcribed.

[61 FR 41296, Aug. 8, 1996]



Sec. 2472.9  Conduct of hearing and prehearing conference.

    (a) A designated representative of the Panel, when so appointed to 
conduct a hearing, shall have the authority on behalf of the Panel to:
    (1) Administer oaths, take the testimony or deposition of any person 
under oath, receive other evidence, and issue subpoenas;
    (2) Conduct the hearing in open or in closed session at the 
discretion of the designated representative for good cause shown;
    (3) Rule on motions and requests for appearance of witnesses and the 
production of records;

[[Page 420]]

    (4) Designate the date on which posthearing briefs, if any, shall be 
submitted; and
    (5) Determine all procedural matters concerning the hearing, 
including the length of sessions, conduct of persons in attendance, 
recesses, continuances, and adjournments; and take any other action 
which, in the judgment of the designated representative, will promote 
the purpose and objectives of the hearing.
    (b) A prehearing conference may be conducted by the designated 
representative of the Panel to:
    (1) Inform the parties of the purpose of the hearing and the 
procedures under which it will take place;
    (2) Explore the possibilities of obtaining stipulations of fact;
    (3) Clarify the positions of the parties with respect to the issues 
to be heard; and
    (4) Discuss any other relevant matters which will assist the parties 
in the resolution of the dispute.

[48 FR 19695, May 2, 1983. Redesignated at 61 FR 41295, Aug. 8, 1996]



Sec. 2472.10  Reports.

    When a report is issued after a hearing conducted pursuant to Sec. 
2472.8 and 2472.9, it normally shall be in writing and shall be 
submitted to the Panel, with a copy to each party, within a period 
normally not to exceed 30 calendar days after the close of the hearing 
and receipt of briefs, if any.

[61 FR 41296, Aug. 8, 1996]



Sec. 2472.11  Final action by the Panel.

    (a) After due consideration of the parties' positions, evidence, and 
arguments, including any report submitted in accordance with Sec. 
2472.10, the Panel shall take final action in favor of the agency's 
determination if:
    (1) The finding on which a determination under 5 U.S.C. 6131(c)(2) 
not to establish a flexible or compressed work schedule is based is 
supported by evidence that the schedule is likely to cause an adverse 
agency impact; or
    (2) The finding on which a determination under 5 U.S.C. 6131(c)(3) 
to terminate a flexible or compressed work schedule is based is 
supported by evidence that the schedule has caused an adverse agency 
impact.
    (b) If the finding on which an agency determination under 5 U.S.C. 
6131(c)(2) or (c)(3) is based is not supported by evidence that the 
schedule is likely to cause or has caused an adverse agency impact, the 
Panel shall take whatever final action is appropriate.
    (c) In preparation for taking such final action, the Panel may hold 
hearings, administer oaths, take the testimony or deposition of any 
person under oath, and issue subpoenas, or it may appoint one or more 
individuals to exercise such authority on its behalf. Such action may be 
taken without regard to procedures previously authorized by the Panel.
    (d) Notice of any final action of the Panel shall be promptly served 
upon the parties.

[48 FR 19695, May 2, 1983. Redesignated and amended at 61 FR 41295, 
41296, Aug. 8, 1996]



PART 2473_SUBPOENAS--Table of Contents




    Authority: 5 U.S.C. 7119, 7134.



Sec. 2473.1  Subpenas.

    (a) Any member of the Panel, the Executive Director, or other person 
designated by the Panel, may issue subpenas requiring the attendance and 
testimony of witnesses and the production of documentary or other 
evidence. However, no subpena shall be issued under this section which 
requires the disclosure of intramanagement guidance, advice, counsel, or 
training within an agency or between an agency and the Office of 
Personnel Management.
    (b) Where the parties are in agreement that the appearance of 
witnesses or the production of documents is necessary, and such 
witnesses agree to appear, no such subpena need be sought.
    (c) A request for a subpena by any person, as defined in 5 U.S.C. 
7103(a)(1), shall be in writing and filed with the Executive Director, 
not less than fifteen (15) days prior to the opening of a hearing, or 
with the appropriate presiding official(s) during the hearing.
    (d) All requests shall name and identify the witnesses or documents 
sought, and state the reasons therefor. The Panel, Executive Director, 
or any

[[Page 421]]

other person designated by the Panel, as appropriate, shall grant the 
request upon the determination that the testimony or documents appear to 
be necessary to the matters under consideration and the request 
describes with sufficient particularity the documents sought. Service of 
an approved subpena is the responsibility of the party on whose behalf 
the subpena was issued. The subpena shall show on its face the name and 
address of the party on whose behalf the subpena was issued.
    (e) Any person served with a subpena who does not intend to comply 
shall within five (5) days after the date of service of the subpena upon 
such person, petition in writing to revoke the subpena. A copy of any 
petition to revoke a subpena shall be served on the party on whose 
behalf the subpena was issued. Such petition to revoke, if made prior to 
the hearing, and a written statement of service, shall be filed with the 
Executive Director. A petition to revoke a subpena filed during the 
hearing, and a written statement of service shall be filed with the 
appropriate presiding official(s). The Executive Director, or the 
appropriate presiding official(s) will, as a matter of course, cause a 
copy of the petition to revoke to be served on the party on whose behalf 
the subpena was issued, but shall not be deemed to assume responsibility 
for such service. The Panel, Executive Director, or any other person 
designated by the Panel, as appropriate, shall revoke the subpena if the 
evidence the production of which is required does not relate to any 
matter under consideration in the proceedings, or the subpena does not 
describe with sufficient particularity the evidence the production of 
which is required, or if for any other reason sufficient in law the 
subpena is invalid. The Panel, Executive Director, or any other person 
designated by the Panel, as appropriate, shall make a simple statement 
of procedural or other ground for the ruling on the petition to revoke. 
The petition to revoke, any answer thereto, and any ruling thereon shall 
not become part of the official record except upon the request of the 
party aggrieved by the ruling.
    (f) Upon the failure of any person to comply with a subpena issued, 
and upon the request of the party on whose behalf the subpena was 
issued, the Solicitor of the FLRA shall, on behalf of such party, 
institute proceedings in the appropriate district court for the 
enforcement thereof, unless to do so would be inconsistent with law and 
the policies of the Federal Service Labor-Management Relations Statute. 
The Solicitor of the FLRA shall not be deemed thereby to have assumed 
responsibility for the effective prosecution of the same before the 
court thereafter.
    (g) All papers submitted to the Executive Director under this 
section shall be filed in duplicate, along with a statement of service 
showing that a copy has been served on the other party to the dispute.
    (h)(1) Witnesses (whether appearing voluntarily or under a subpena) 
shall be paid the fee and mileage allowances which are paid subpenaed 
witnesses in the courts of the United States: Provided, that any witness 
who is employed by the Federal Government shall not be entitled to 
receive witness fees in addition to compensation received in conjunction 
with official time granted for such participation, including necessary 
travel time, as occurs during the employee's regular work hours and when 
the employee would otherwise be in a work or paid leave status.
    (2) Witness fees and mileage allowances shall be paid by the party 
at whose instance the witnesses appear except when the witness receives 
compensation in conjunction with official time as described in paragraph 
(h)(1) of this section.

[61 FR 41296, Aug. 8, 1996]

   Appendix A to 5 CFR Chapter XIV--Current Addresses and Geographic 
                              Jurisdictions

    (a) The Office address, telephone number, and fax number of the 
Authority are: Suite 200, 1400 K Street, NW., Washington, DC 20424-0001; 
telephone: (202) 218-7740; fax: (202) 482-6657.
    (b) The Office address, telephone number, and fax number of the 
General Counsel are: Suite 200, 1400 K Street, NW., Washington, DC 
20424; telephone: (202) 218-7910; fax:(202) 482-6608.
    (c) The Office address, telephone number, and fax number of the 
Chief Administrative

[[Page 422]]

Law Judge are: Suite 300, 1400 K Street, NW., Washington, DC 20424; 
telephone: (202) 218-7950; fax: (202) 482-6629.
    (d) The Office addresses, telephone and fax numbers of the Regional 
Offices of the Authority are as follows:
    (1) Boston, Massachusetts Regional Office--10 Causeway Street, Suite 
472, Boston, MA 02222-1043; telephone: (617) 565-5100; fax: (617) 565-
6262.
    (2) Washington, DC Regional Office--1400 K Street NW., Suite 200, 
Washington, DC 20424-0001; telephone: (202) 357-6029; fax: (202) 482-
6724.
    (3) Atlanta, Georgia Regional Office--285 Peachtree Center Avenue, 
suite 701, Atlanta, Georgia 30303-1270; telephone: FTS or commercial 
(404) 331-5300; fax: FTS or commercial (404) 331-5280.
    (4) Chicago, Illinois Regional Office--55 West Monroe, suite 1150, 
Chicago, Illinois 60603-9729; telephone: FTS or commercial (312) 353-
6306; fax: FTS or commercial (312) 886-5977.
    (5) Dallas, Texas Regional Office--525 Griffin Street, suite 926, 
LB-107, Dallas, Texas 75202-1906; telephone: FTS or commercial (214) 
767-4996; fax: FTS or commercial (214) 767-0156.
    (6) Denver, Colorado Regional Office--1244 Speer Boulevard, suite 
100, Denver, Colorado 80204-3581; telephone: FTS or commercial (303) 
844-5224; fax: FTS or commercial (303) 844-2774.
    (7) San Francisco, California Regional Office--901 Market Street, 
suite 220, San Francisco, California 94103-1791; telephone: FTS or 
commercial (415) 356-5000; fax: FTS or commercial (415) 356-5017.
    (e) The Office address, telephone number, and fax number of the 
Federal Service Impasses Panel are: Suite 200, 1400 K Street, NW., 
Washington, DC 20424; telephone: (202) 218-7790; fax: (202) 482-6674.
    (f) The geographic jurisdictions of the Regional Directors of the 
Federal Labor Relations Authority are as follows:

------------------------------------------------------------------------
          State or other locality                  Regional office
------------------------------------------------------------------------
Alabama...................................  Atlanta
Alaska....................................  San Francisco
Arizona...................................  Denver
Arkansas..................................  Dallas
California................................  San Francisco
Colorado..................................  Denver
Connecticut...............................  Boston
Delaware..................................  Washington, DC
District of Columbia......................  Washington, DC
Florida...................................  Atlanta
Georgia...................................  Atlanta
Hawaii and all land and water areas west    San Francisco
 of the continents of North and South
 America (except coastal islands) to long.
 90 degrees East.
Idaho.....................................  San Francisco
Illinois..................................  Chicago
Indiana...................................  Chicago
Iowa......................................  Chicago
Kansas....................................  Denver
Kentucky..................................  Chicago
Louisiana.................................  Dallas
Maine.....................................  Boston
Maryland..................................  Washington, DC
Massachusetts.............................  Boston
Michigan..................................  Chicago
Minnesota.................................  Chicago
Mississippi...............................  Atlanta
Missouri..................................  Denver
Montana...................................  Denver
Nebraska..................................  Denver
Nevada....................................  San Francisco
New Hampshire.............................  Boston
New Jersey................................  Boston
New Mexico................................  Dallas
New York..................................  Boston
North Carolina............................  Washington, DC
North Dakota..............................  Chicago
Ohio......................................  Chicago
Oklahoma..................................  Dallas
Oregon....................................  San Francisco
Pennsylvania..............................  Boston
Puerto Rico...............................  Boston
Rhode Island..............................  Boston
South Carolina............................  Atlanta
South Dakota..............................  Denver
Tennessee.................................  Chicago
Texas.....................................  Dallas
Utah......................................  Denver
Vermont...................................  Boston
Virginia..................................  Washington, DC
Washington................................  San Francisco
West Virginia.............................  Washington, DC
Wisconsin.................................  Chicago
Wyoming...................................  Denver
Virgin Islands............................  Atlanta
Panama/limited FLRA jurisdiction..........  Dallas
All land and water areas east of the        Washington, DC
 continents of North and South America to
 long. 90 degrees E., except the Virgin
 Islands, Panama (limited FLRA
 jurisdiction), Puerto Rico and coastal
 islands.
------------------------------------------------------------------------


(5 U.S.C. 7134)

[55, FR 52831, Dec. 24, 1990, as amended at 58 FR 13695, Mar. 15, 1993; 
59 FR 30504, June 14, 1994; 60 FR 49493, Sept. 26, 1995; 61 FR 1697, 
Jan. 23, 1996; 61 FR 51207, Oct. 1, 1996; 63 FR 70989, Dec. 23, 1998; 63 
FR 72350, Dec. 31, 1998; 68 FR 10954, Mar. 7, 2003; 68 FR 23885, 22886, 
May 6, 2003; 70 FR 41605, July 20, 2005]

Appendix B to 5 CFR Chapter XIV--Memorandum Describing the Authority and 
 Assigned Responsibilities of the General Counsel of the Federal Labor 
                           Relations Authority

    The statutory authority and responsibility of the General Counsel of 
the Federal Labor Relations Authority are stated in section 7104(f), 
subsections (1), (2) and (3), of the Federal Service Labor-Management 
Relations Statute as follows:
    (1) The General Counsel of the Authority shall be appointed by the 
President, by and with the advice and consent of the Senate, for a term 
of 5 years. The General Counsel

[[Page 423]]

may be removed at any time by the President. The General Counsel shall 
hold no other office or position in the Government of the United States 
except as provided by law.
    (2) The General Counsel may--
    (A) investigate alleged unfair labor practices under this chapter,
    (B) file and prosecute complaints under this chapter, and
    (C) exercise such other powers of the Authority as the Authority may 
prescribe.
    (3) The General Counsel shall have direct authority over, and 
responsibility for, all employees in the office of the General Counsel, 
including employees of the General Counsel in the regional offices of 
the Authority.

This memorandum is intended to describe the statutory authority and set 
forth the prescribed duties and authority of the General Counsel of the 
Federal Labor Relations Authority, effective January 28, 1980.
    I. Case handling--A. Unfair labor practice cases. The General 
Counsel has full and final authority and responsibility, on behalf of 
the Authority, to accept and investigate charges filed, to enter into 
and approve the informal settlement of charges, to approve withdrawal 
requests, to dismiss charges, to determine matters concerning the 
consolidation and severance of cases before the complaint issues, to 
issue complaints and notices of hearing, to appear before Administrative 
Law Judges in hearings on complaints and prosecute as provided in the 
Authority's and the General Counsel's rules and regulations, and to 
initiate and prosecute injunction proceedings as provided for in section 
7123(d) of the Statute. After issuance of the Administrative Law Judge's 
decision, the General Counsel may file exceptions and briefs and appear 
before the Authority in oral argument, subject to the Authority's and 
the General Counsel's rules and regulations.
    B. Compliance actions (injunction proceedings). The General Counsel 
is authorized and responsible, on behalf of the Authority, to seek and 
effect compliance with the Authority's orders and make such compliance 
reports to the Authority as it may from time to time require.

On behalf of the Authority, the General Counsel will, in full accordance 
with the directions of the Authority, initiate and prosecute injunction 
proceedings as provided in section 7123(d) of the Statute: Provided 
however, That the General Counsel will initiate and conduct injunction 
proceedings under section 7123(d) of the Statute only upon approval of 
the Authority.
    C. Representation cases. The statutory authority of the Federal 
Labor Relations Authority to delegate to Regional Directors its 
authority to process and determine representation matters is set forth 
in section 7105 (e)(1) and (f) of the Statute as follows:
    (e)(1) The Authority may delegate to any regional director its 
authority under this chapter--
    (A) to determine whether a group of employees is an appropriate 
unit;
    (B) to conduct investigations and to provide for hearings;
    (C) to determine whether a question of representation exists and to 
direct an election; and
    (D) to supervise or conduct secret ballot elections and certify the 
results thereof.
    (f) If the Authority delegates any authority to any regional 
director . . . to take any action pursuant to subsection (e) of this 
section, the Authority may, upon application by any interested person 
filed within 60 days after the date of the action, review such action, 
but the review shall not, unless specifically ordered by the Authority, 
operate as a stay of action. The Authority may affirm, modify, or 
reverse any action reviewed under this subsection. If the Authority does 
not undertake to grant review of the action under this subsection within 
60 days after the later of--
    (1) the date of the action, or
    (2) the date of the filing of any application under this subsection 
for review of the action;

the action shall become the action of the Authority at the end of such 
60 day period.
    In accordance with section 7105 (e)(1) and (f) of the Statute, 
Regional Directors, who are directed and supervised by the General 
Counsel as provided by section III of this memorandum, are hereby 
delegated the authority to determine whether a group of employees is an 
appropriate unit, to conduct investigations and to provide for hearings, 
to determine whether a question of representation exists and to direct 
an election, and to supervise or conduct secret ballot elections and 
certify the results thereof.
    Regional Directors are authorized and have responsibility to receive 
and process, in accordance with decisions of the Authority and the rules 
and regulations of the Authority and the General Counsel, all petitions 
filed pursuant to sections 7111, 7112(d), 7113, 7115 and 7117(d) of the 
Statute.
    The authority and responsibility of Regional Directors in cases 
filed involving such petitions shall extend to all phases of the 
investigation of such petitions through the conclusion of the hearing to 
be conducted by a Regional Office employee (if a hearing should be 
necessary to resolve disputed issues), including decisional action by 
the Regional Director after such investigation or hearing.
    Regional Directors also are authorized and have responsibility to 
direct an election after a hearing pursuant to sections 7111 and 7112(d) 
of the Statute and to approve consent election agreements in accordance 
with section 7111(g) of the Statute.

[[Page 424]]

    In the event a Regional Director directs an election or approves a 
consent election agreement, the Regional Director is authorized to 
supervise or conduct the election pursuant to section 7111 and 7112(d) 
of the Statute. In such instances, Regional Directors are authorized and 
have responsibility to determine the validity of determinative 
challenges and objections to the conduct of the election and other 
similar matters. This authority and responsibility extends to all phases 
of the investigation such determinative challenges and objections 
through the conclusion of a hearing to be conducted by a Regional Office 
employee (if a hearing should be necessary to resolve disputed issues), 
including decisional action by the Regional Director after such 
investigation or hearing.
    Decisions and Orders of Regional Directors made pursuant to this 
delegation of authority become the action of the Authority:
    (1) If no interested person files an application for review of the 
Regional Director's Decision and Order with the Authority within sixty 
(60) days after the Regional Director's Decision and Order; or
    (2) If the Authority does not undertake to grant review of the 
Regional Director's Decision and Order within sixty (60) days after the 
filing of a timely application for review;
    If no interested person files an application for review of the 
Regional Director's Decision and Order with the Authority within (60) 
days after the Regional Director's Decision and Order, or if the 
Authority does not undertake to grant review of the action of the 
regional Director's Decision and Order within sixty (60) days after the 
filing of a timely application for review, the Regional Director's 
Decision and Order will become final and binding, and the Regional 
Director will certify to the parties the results of any election held or 
issue any clarification of unit, amendment of recognition or 
certification, determination of eligibility for dues allotment, or 
certification on consolidation of units as required.
    The Authority will undertake to grant review of a Decision and Order 
of a Regional Director upon the timely filing of an application for 
review only where compelling reasons exist therefor as set forth in the 
rules and regulations.
    The Authority's granting of review upon the timely filing of an 
application for review of a Regional Director's Decision and Order will 
not operate as a stay of such action ordered by the Regional Director, 
unless specifically ordered by the Authority. If the Authority grants 
review, the Authority may affirm, modify or reverse action reviewed.
    II. Liaison with other governmental agencies. The General Counsel is 
authorized and has responsibility, on behalf of the Authority, to 
maintain appropriate and adequate liaison and arrangements with the 
Office of the Assistant Secretary of Labor for Labor-Management 
Relations with reference to the financial and other reports required to 
be filed with the Assistant Secretary pursuant to section 7120(c) of the 
Statute and the availability to the Authority and the General Counsel of 
the contents thereof. The General Counsel is authorized and has 
responsibility, on behalf of the Authority, to maintain appropriate and 
adequate liaison with the Federal Mediation and Conciliation Service 
with respect to functions which may be performed by the Federal 
Mediation and Conciliation Service.
    III. Personnel. Under 5 U.S.C. 7105(d), the Authority is authorized 
to appoint Regional Directors. In order better to ensure the effective 
exercise of the duties and responsibilities of the General Counsel 
described above, the General Counsel is delegated authority to recommend 
the appointment, transfer, demotion or discharge of any Regional 
Director. However, such actions may be taken only with the approval of 
the Authority. In the event of a vacant Regional Director position, the 
General Counsel may, without the approval of the Authority, detail 
personnel as acting Regional Director for a total period of up to 120 
days commencing on the day the position becomes vacant. If the position 
remains vacant for more than 120 days, a detail must be approved by the 
Authority. Other details of personnel to act as Regional Director during 
periods when there is an incumbent in the position shall be accomplished 
by the General Counsel without the approval of the Authority. The 
General Counsel shall have authority to direct and supervise the 
Regional Directors. Under 5 U.S.C. 7104(f)(3), the General Counsel shall 
have direct authority over, and responsibility for all employees in the 
Office of the General Counsel and all personnel of the General Counsel 
in the field offices of the Authority. This includes full and final 
authority subject to applicable laws and rules, regulations and 
procedures of the Office of Personnel Management and the Authority over 
the selection, retention, transfer, promotion, demotion, discipline, 
discharge and in all other respects of such personnel except the detail 
in the event of a vacancy for a period in excess of 120 days, 
appointment, transfer, demotion or discharge of any Regional Director. 
Further, the establishment, transfer, or elimination of any Regional 
Office or non-Regional Office duty location may be accomplished only 
with the approval of the Authority. The Authority will provide such 
administrative support functions, including personnel management, 
financial management and procurement functions, through the Office of 
Administration of the Authority as are required by the General Counsel 
to carry out the General Counsel's statutory and prescribed functions.
    IV. To the extent that the above-described duties, powers and 
authority rest by statute

[[Page 425]]

with the Authority, the foregoing statement constitutes a prescription 
and assignment of such duties, powers and authority, whether or not so 
specified.

[45 FR 3523, Jan. 17, 1980, as amended at 48 FR 28814, June 23, 1983; 61 
FR 16043, Apr. 11, 1996]

[[Page 427]]



 CHAPTER XV--OFFICE OF ADMINISTRATION, EXECUTIVE OFFICE OF THE PRESIDENT




  --------------------------------------------------------------------
Part                                                                Page
2500            Information security regulation.............         429
2502            Availability of records.....................         430
2504            Privacy Act regulations.....................         440

[[Page 429]]



PART 2500_INFORMATION SECURITY REGULATION--Table of Contents




Sec.
2500.1 Introduction.
2500.3 Original classification.
2500.5 Derivative classification.
2500.7 Declassification and downgrading.
2500.9 Safeguarding.
2500.11 Implementation and review.

    Authority: Executive Order 12356, 3 CFR, 1982 COMP., p. 166.

    Source: 44 FR 50039, Aug. 27, 1979; 45 FR 20453, Mar. 28, 1980; 45 
FR 22873, Apr. 4, 1980, unless otherwise noted.



Sec. 2500.1  Introduction.

    (a) References. (1) Executive Order 12065, ``National Security 
Information'', dated June 28, 1978.
    (2) Information Security Oversight Office Directive No. 1, 
``National Security Information'', dated October 2, 1978.
    (b) Purpose. The purpose of this regulation is to ensure, consistent 
with the authorities listed in section (a), that national security 
information held by the Office of Administration is protected to the 
extent necessary to safeguard the national security.
    (c) Applicability. This regulation governs the Office of 
Administration. Together with the authorities listed in section (a), it 
establishes the policies and procedures for safeguarding of information 
that is under the control of the Office of Administration.



Sec. 2500.3  Original classification.

    No one in the Office of Administration has been granted authority 
for original classification of information.



Sec. 2500.5  Derivative classification.

    The Office of Administration serves only as the temporary physical 
custodian of classified information which originated in other agencies 
of the Executive Office of the President. Therefore, no one in the 
Office of Administration incorporates, restates, paraphrases or 
generates in a new form information which is already classified.



Sec. 2500.7  Declassification and downgrading.

    (a) Declassification authority. No one in the Office of 
Administration has the authority to declassify or downgrade classified 
information.
    (b) Mandatory review for declassification. (1) Requests for 
mandatory review of national security information contained in the 
records of any Executive Office of the President (EOP) agency for which 
OA provides services must be in writing and addressed to the Security 
Officer, OA, 725 17th Street, NW., Washington, DC 20503. Those agencies 
for which OA provides services include the Council of Economic Advisors, 
the Council on Environmental Quality, the Office of Administration, and 
the Office of the United States Trade Representative.
    (2) The OA Security Officer will receive and monitor all requests 
for mandatory review for declassification of information as received by 
the EOP agencies named above.
    (3) Requests for mandatory review for declassification of classified 
information contained in the records of any other Executive Office of 
the President agency for which OA provides services should be addressed 
directly to the agency which is the owner of the record, in accordance 
with that agency's published Information Security Regulation.

[44 FR 50039, Aug. 27, 1979; 45 FR 20453, Mar. 28, 1980; 45 FR 22873, 
Apr. 4, 1980, as amended at 56 FR 8101, Feb. 27, 1991]



Sec. 2500.9  Safeguarding.

    The Office of Administration shall protect information in its 
custody against unauthorized disclosure commensurate with its level of 
classification.



Sec. 2500.11  Implementation and review.

    The Information Security Oversight Committee of the Office of 
Administration shall be chaired by the agency's General Counsel. The 
Committee shall be responsible for acting on all suggestions and 
complaints concerning the administration of the information security 
program. The chairperson shall also be responsible for conducting an 
active oversight program to ensure effective implementation of Executive 
Order 12356.

[44 FR 50039, Aug. 27, 1979; 45 FR 20453, Mar. 28, 1980; 45 FR 22873, 
Apr. 4, 1980, as amended at 56 FR 8101, Feb. 27, 1991]

[[Page 430]]



PART 2502_AVAILABILITY OF RECORDS--Table of Contents




   Subpart A_Production or Disclosure of Records Under the Freedom of 
                      Information Act, 5 U.S.C. 552

Sec.
2502.1 Definitions.
2502.2 Purpose and scope.
2502.3 Organization and functions.
2502.4 Public reference facilities and current index.
2502.5 Records of other Agencies.
2502.6 How to request records--form and content.
2502.7 Initial determination.
2502.8 Prompt response.
2502.9 Responses--form and content.
2502.10 Appeals to the Deputy Director from initial denials.

                   Charges for Search and Reproduction

2502.11 Definitions.
2502.12 Fees to be charged--general.
2502.13 Fees to be charged--categories of requestors.
2502.14 Miscellaneous fee provisions.
2502.15 Waiver or reduction of charges.
2502.16 Information to be disclosed.
2502.17 Exemptions.
2502.18 Deletion of exempted information.
2502.19 Annual report.

 Subpart B_Production in Response to Subpoenas or Demands of Courts or 
                            Other Authorities

2502.30 Purpose and scope.
2502.31 Production prohibited unless approved by Deputy Director.
2502.32 Procedure in the event of a demand for disclosure.
2502.33 Procedure in the event of an adverse ruling.

    Authority: 5 U.S.C. 552, as amended by Pub. L. 93-502 and Pub. L. 
99-570.

    Source: 45 FR 47112, July 14, 1980, unless otherwise noted.



   Subpart A_Production or Disclosure of Records Under the Freedom of 
                      Information Act, 5 U.S.C. 552



Sec. 2502.1  Definitions.

    (a) Office or OA means the Office of Administration, Executive 
Office of the President;
    (b) Agency means agency as defined in 5 U.S.C. 552(e);
    (c) Workday means those days when the Office is open for the conduct 
of government business, and does not include Saturdays, Sundays and 
legal public holidays;
    (d) FOIA means Freedom of Information Act, 5 U.S.C. 552, as amended.

[45 FR 47112, July 14, 1980, as amended at 49 FR 28233, July 11, 1984]



Sec. 2502.2  Purpose and scope.

    This subpart contains the regulations of the Office of 
Administration, Executive Office of the President, implementing 5 U.S.C. 
552. The regulations of this subpart describe the procedures by which 
records may be obtained from all organizational units within the Office 
of Administration. Official records of the Office made available 
pursuant to the requirements of 5 U.S.C. 552 shall be furnished to 
members of the public only as prescribed by this subpart. To the extent 
that it is not prohibited by other laws the Office also will make 
available records which it is authorized to withhold under 5 U.S.C. 552 
whenever it determines that such disclosure is in the public interest.

[45 FR 47112, July 14, 1980. Redesignated at 49 FR 28233, July 11, 1984]



Sec. 2502.3  Organization and functions.

    (a) The Office of Administration (OA) was created by Reorganization 
Plan No. 1 of 1977 and Executive Order 12028. Its primary function is to 
provide common administrative and support services for the various 
agencies and offices of the Executive Office of the President. It 
consists of:
    (1) Office of the Director
    (2) Office of the Deputy Director
    (3) Office of the Executive Secretary
    (4) Office of the General Counsel
    (5) Six Directors and their staffs, who are responsible for the 
following divisions:
    (i) Administrative Operations
    (ii) Facilities Management
    (iii) Financial Management
    (iv) Information Resources Management
    (v) Library and Information Services
    (vi) Personnel Management
    (b) The Office has no field organization. Offices are presently 
located in the Old Executive Office Building, 17th

[[Page 431]]

and Pennsylvania Avenue NW., 20500, and in the New Executive Office 
Building, 725 17th Street NW., Washington, DC 20503. Regular office 
hours are from 9:00 a.m. to 5:30 p.m., Monday through Friday. Both 
buildings are under security control. Persons desiring access are 
encourged to make advance arrangements by telephone with the office they 
plan to visit.

[49 FR 28233, July 11, 1984; 49 FR 29769, July 24, 1984, as amended at 
56 FR 5741 and 5742, Feb. 13, 1991]



Sec. 2502.4  Public reference facilities and current index.

    (a) The Office maintains a public reading area located in the 
Executive Office of the President Library, Room G-102, New Executive 
Office Building, 725 17th Street NW., Washington, DC, and makes 
available for public inspection and copying a copy of all material 
required by 5 U.S.C. 552(a)(2), including all documents published by OA 
in the Federal Register and currently in effect.
    (b) The FOIA Officer or his or her designee shall maintain files 
containing all materials required to be retained by or furnished to the 
FOIA Officer under this subpart. The material shall be filed by 
chronological number of request within each calendar year, indexed 
according to the exceptions asserted, and, to the extent feasible, 
indexed according to the type of records requested.
    (c) The FOIA Officer shall also maintain a file open to the public, 
which shall contain copies of all grants or denials of appeals by the 
Office.

[49 FR 28233, July 11, 1984, as amended at 56 FR 5742, Feb. 13, 1991]



Sec. 2502.5  Records of other Agencies.

    Requests for records that originated in another Agency and are in 
the custody of the Office of Administration, will be referred to that 
Agency for processing, and the person submitting the request shall be so 
notified. The decision made by that Agency with respect to such records 
will be honored by the Office of Administration.

[45 FR 47112, July 14, 1980. Redesignated at 49 FR 28233, July 11, 1984]



Sec. 2502.6  How to request records--form and content.

    (a) A request made under the FOIA must be submitted in writing, 
addressed to: FOIA Officer, Office of Administration, 725 17th Street 
NW., Washington, DC 20503. The words ``FOIA REQUEST'' should be clearly 
marked on both the letter and the envelope. Due to security measures at 
the Old and New Executive Office Buildings, requests made in person 
should be delivered to Room G-1, at the above address.
    (b) Any Office employee or official who receives a FOIA Request 
shall promptly forward it to the FOIA Officer, at the above address. Any 
Office employee or official who receives an oral request made under the 
FOIA shall inform the person making the request of the provisions of 
this subpart requiring a written request according to the procedures set 
out herein.
    (c) Each request must reasonably describe the record(s) sought, 
including when known: Agency/individual originating the record, date, 
subject matter, type of document, location, and any other pertinent 
information which would assist in promptly locating the record(s).
    (d) When a request is not considered reasonably descriptive, or 
requires the production of voluminous records, or places an 
extraordinary burden on the Office of Administration, seriously 
interfering with its normal functioning to the detriment of the business 
of the Government, the Office may require the person or agent making the 
FOIA request to confer with an Office representative in order to attempt 
to verify, and, if possible, narrow the scope of the request.
    (e) Upon receipt of the FOIA request, the FOIA Officer will make an 
initial determination of which officials and offices may be involved in 
the search and reviewing procedures. The FOIA Officer will circulate the 
request to all offices so identified and any others the FOIA Officer 
later determines should be notified.

[49 FR 28233, July 11, 1984, as amended at 56 FR 5742, Feb. 13, 1991]

[[Page 432]]



Sec. 2502.7  Initial determination.

    The General Counsel or his or her designee shall have the authority 
to approve or deny requests received pursuant to these regulations. The 
decision of the General Counsel shall be final, subject only to 
administrative review as provided in Sec. 2502.10.

[45 FR 47112, July 14, 1980. Redesignated and amended at 49 FR 28234, 
July 11, 1984; 56 FR 5742, Feb. 13, 1991]



Sec. 2502.8  Prompt response.

    (a) The General Counsel or his or her designee shall either approve 
or deny a request for records within 10 working days after receipt of 
the request unless additional time is required for one of the following 
reasons:
    (1) It is necessary to search for, collect, and appropriately 
examine a voluminous amount of separate and distinct records which are 
demanded in a single request; or
    (2) It is necessary to consult with another agency having a 
substantial interest in the determination of the request or among two or 
more components of the agency having substantial subject matter interest 
therein.
    (b) When additional time is required for one of the reasons stated 
in paragraph (a) of this section, the General Counsel or his or her 
designee shall acknowledge receipt of the request within the 10 workday 
period and include a brief explanation of the reason for the delay, 
indicating the date by which a determination will be forthcoming. An 
extended deadline adopted for one of the reasons set forth above may not 
exceed 10 additional workdays.

[45 FR 47112, July 14, 1980. Redesignated and amended at 49 FR 28234, 
July 11, 1984]



Sec. 2502.9  Responses--form and content.

    (a) When a requested record has been identified and is available, 
the General Counsel or his or her designee shall notify the person 
making the request as to where and when the record is available for 
inspection or the copies will be available. The notification shall also 
advise the person making the request of any fees assessed under Sec. 
2502.13 hereof.
    (b) A denial or partial denial of a request for a record shall be in 
writing signed by the General Counsel or his or her designee and shall 
include:
    (1) The name and title of the person making the determination;
    (2) A reference to the specific exemption under the Freedom of 
Information Act authorizing the withholding of the record, and a brief 
explanation of how the exemption applies to the record withheld; or
    (3) A statement that, after diligent effort, the requested records 
have not been found or have not been adequately examined during the time 
allowed by Sec. 2502.9, and that the denial will be reconsidered as 
soon as the search or examination is complete;
    (4) A statement that no agency records are responsive to the 
request.
    (5) A statement that the denial may be appealed to the Deputy 
Director within 30 days of receipt of the denial or partial denial.

If a requested record cannot be located from the information supplied, 
or is known to have been destroyed or otherwise disposed of, the person 
making the request shall be so notified and the legal authority for 
disposition shall be cited.

[45 FR 47112, July 14, 1980. Redesignated and amended at 49 FR 28234, 
July 11, 1984; 56 FR 5742, Feb. 13, 1991]



Sec. 2502.10  Appeals to the Deputy Director from initial denials.

    (a) When the General Counsel or his or her designee had denied a 
request for records in whole or in part, the person making the request 
may, within 30 days of its receipt, appeal the denial to the Deputy 
Director. The appeal must be in writing, addressed to the Deputy 
Director, Office of Administration, 725 17th Street NW., Washington, DC 
20503 and clearly labeled as a ``Freedom of Information Act Appeal''.
    (b) The Deputy Director will act upon the appeal within 20 workdays 
of its receipt. The Deputy Director may extend the 20 day period of time 
by any number of workdays which could have been claimed and consumed by 
the General Counsel or his or her designee under Sec. 2502.9 but which 
were not claimed and consumed in making the initial determination. The 
Office of Administration's action on an appeal shall be in

[[Page 433]]

writing, signed by the Deputy Director of the Office.
    (c) If the decision is in favor of the person making the request, 
the Deputy Director shall order records promptly made available to the 
person making the request.
    (d) A denial in whole or in part of a request on appeal shall set 
forth the exemption relied on and a brief explanation of how the 
exemption applied to the records withheld and the reasons for asserting 
it, if different from that described by the General Counsel or his or 
her designee under Sec. 2502.10. The denial shall state that the person 
making the request may, if dissatisfied with the decision on appeal, 
file a civil action in the district in which the person resides or has 
his principal place of business, in the district where the records are 
located, or in the District of Columbia.
    (e) No personal appearance, oral argument or hearing will ordinarily 
be permitted in connection with an appeal to the Office of 
Administration.
    (f) On appeal, the Office may reduce any fees previously assessed.

[45 FR 47112, July 14, 1980. Redesignated and amended at 49 FR 28234, 
July 11, 1984; 56 FR 5742, Feb. 13, 1991]

                   Charges for Search and Reproduction



Sec. 2502.11  Definitions.

    For the purpose of this part:
    (a) All the terms defined in the Freedom of Information Act apply.
    (b) A statute specifically providing for setting the level of fees 
for particular types of records (5 U.S.C. 552(a)(4)(vi)) means any 
statute that specifically requires a government agency, such as the 
Government Printing Office (GPO) or the National Technical Information 
Service (NTIS), to set the level of fees for particular types of 
agencies in order to:
    (1) Serve both the general public and private sector organizations 
by conveniently making available government information;
    (2) Ensure that groups and individuals pay the cost of publications 
and other services that are for their special use so that these costs 
are not borne by the general taxpaying public;
    (3) Operate an information dissemination activity on a self-
sustaining basis to the maximum extent possible; or
    (4) Return overdue revenue to the Treasury for defraying, wholly or 
in part, appropriated funds used to pay the cost of disseminating 
government information.

Statutes, such as the User Fee Statute, which only provide a general 
discussion of fees without explicitly requiring that an agency set and 
collect fees for particular documents do not supersede the Freedom of 
Information Act under section (a)(4)(A)(vi) of that statute.
    (c) The term direct costs means those expenditures that OA incurs in 
searching for and duplicating (and in the case of commercial requestors, 
reviewing) documents to respond to a FOIA request. Direct costs include, 
for example, the salary of the employee performing the work (the basic 
rate of pay for the employee plus 16 percent of that rate to cover 
benefits) and the cost of operating duplicating machinery. Not included 
in direct costs are overhead expenses such as costs of space, and 
heating or lighting the facility in which the records are stored.
    (d) The term search includes all time spent looking for material 
that is responsive to a request, including page-by-page or line-by-line 
identification of material within documents. OA employees should ensure 
that searching for material is done in the most efficient and least 
expensive manner so as to minimize costs for both the agency and the 
requestor. For example, employees should not engage in a line-by-line 
search when merely duplicating an entire document would prove the least 
expensive and quicker method of complying with a request. Search should 
be distinguished, moreover, from review of material in order to 
determine whether the material is exempt from disclosure (see paragraph 
(f) of this section). Searches may be done manually or by computer using 
existing programming.
    (e) The term duplication refers to the process of making a copy of a 
document necessary to respond to a FOIA request. Such copies can take 
the form of paper copy, microform, audio-visual materials, or machine 
readable (e.g. magnetic tape or disk), among others.

[[Page 434]]

The copy provided must be in a form that is reasonably usable by the 
requestors.
    (f) The term review refers to the process of examining documents 
located in response to a request that is for a commercial use (see 
paragraph (g) of this section) to determine whether any portion of any 
document located is permitted to be withheld. It also includes 
processing any documents for disclosure, (e.g., doing all that is 
necessary to excise them and otherwise prepare them for release). Review 
does not include time spent resolving general legal or policy issues 
regarding the application of exemptions.
    (g) The term `commercial use' request refers to a request from or on 
behalf of one who seeks information for a use or purpose that furthers 
the commercial, trade, or profit interests of the requestor or the 
person on whose behalf the request is made. In determining whether the 
requestor properly belongs in this category, OA must determine the use 
to which a requestor will put the documents requested. Moreover, where 
an OA employee has reasonable cause to doubt the use to which a 
requestor will put the records sought, or where that use is not clear 
from the request itself, the employee should seek additional 
clarification before assigning the request to a specific category.
    (h) The term educational institution refers to a preschool, a public 
or private elementary or secondary school, an institution of graduate 
higher education, an institution of undergraduate higher education, an 
institution of professional education, or an institution of vocational 
education, that operates a program or programs of scholarly research.
    (i) The term non-commercial scientific institution refers to an 
institution that is not operated on a commercial basis (as that term is 
referenced in paragraph (g) of this section) and that is operated solely 
for the purpose of conducting scientific research, the results of which 
are not intended to promote any particular product or industry.
    (j) The term representative of the news media refers to any person 
actively gathering news for an entity that is organized and operated to 
publish or broadcast news to the public. The term news means information 
that is about current events or that would be of current interest to the 
public. Examples of news media entities include television or radio 
stations broadcasting to the public at large, and publishers of 
periodicals (but only in those instances when they can qualify as 
disseminators of news) who make their products available for purchase 
and subscription by the general public. These examples are not intended 
to be all-inclusive. Moreover, as traditional methods of news delivery 
evolve (e.g., electronic dissemination of newspapers through 
telecommunications services), such alternative media would be included 
in this category. In the case of free lance journalists, they may be 
regarded as working for a news organization, if they can demonstrate a 
solid basis for expecting publication through that organization, even 
though not actually employed by it. A publication contract would be the 
clearest proof, but OA may also look to the past publication record of a 
requestor in making this determination.

[56 FR 5742, Feb. 13, 1991]



Sec. 2502.12  Fees to be charged--general.

    OA should charge fees that recoup the full allowable direct costs it 
incurs. Moreover, it shall use the most efficient and least costly 
methods to comply with requests for documents made under the FOIA. When 
documents that would be responsive to a request are maintained for 
distribution by agencies operating statutory-based fee schedule programs 
(see definition in Sec. 2502.11(b)), such as the NTIS, OA should inform 
requestors of the steps necessary to obtain records from those sources.
    (a) Manual searches for records. OA will charge at the salary 
rate(s) (i.e., basic pay plus 16 percent) of the employee(s) making the 
search.
    (b) Computer searches for records. OA will charge at the actual 
direct cost of providing this service. This will include the cost of 
operating the central processing unit for that portion of operating time 
that is directly attributable to searching for records responsive to a 
FOIA request and operator/programmer salary apportionable to the search.

[[Page 435]]

    (c) Review of records. Only requestors who are seeking documents for 
commercial use may be charged for time spent reviewing records to 
determine whether they are exempt from mandatory disclosure. Charges may 
be assessed only for the initial review; i.e., the review undertaken the 
first time OA analyzes the applicability of a specific exemption to a 
particular record or portion of a record. Records or portions of records 
withheld in full under an exemption that is subsequently determined not 
to apply may be reviewed again to determine the applicability of other 
exemptions not previously considered. The costs for such a subsequent 
review are assessable.
    (d) Duplication of records. Records will be duplicated at a rate of 
$.15 per page. For copies prepared by computer such as tapes or 
printouts, OA shall charge the actual cost, including operator time, of 
production of the tape or printout. For other methods of reproduction or 
duplication, OA will charge the actual direct costs of producing the 
document(s). If OA estimates that duplication charges are likely to 
exceed $25.00, it shall notify the requestor of the estimated amount of 
fees, unless the requestor has indicated in advance his willingness to 
pay fees as high as those anticipated. Such a notice shall offer a 
requestor the opportunity to confer with agency personnel with the 
object of reformulating the request to meet his or her needs at a lower 
cost.
    (e) Other charges. OA will recover the full costs of providing 
services such as those enumerated below when it elects to provide them:
    (1) Certifying that records are true copies;
    (2) Sending records by special methods such as express mail.
    (f) Remittances shall be in the form of a personal check or bank 
draft drawn on a bank in the United States, or a postal money order. 
Remittances shall be made payable to the order of the Treasury of the 
United States and mailed or delivered to the FOIA Officer, Office of 
Administration, 725 17th Street, NW., Washington, DC 20503.
    (g) A receipt for fees paid will be given upon request. Refund of 
fees paid for services actually rendered will not be made.
    (h) Restrictions on assessing fees. With the exception of requestors 
seeking documents for a commercial use, OA will provide the first 100 
pages of duplication and the first two hours of search time without 
charge. Moreover, OA will not charge fees to any requestor, including 
commercial use requestors, if the cost of collecting a fee would be 
equal to or greater than the fee itself.
    (1) The elements to be considered in determining whether the ``cost 
of collecting a fee'' are the administrative costs of receiving and 
recording a requestor's remittance, and processing the fee for deposit 
in the Treasury Department's special account.
    (2) For purposes of these restrictions on assessment of fees, the 
word ``pages'' refers to copies of ``8\1/2\ x 11'' or ``11 x 14.'' Thus, 
requestors are not entitled to 100 microfiche or 100 computer disks, for 
example. A microfiche containing the equivalent of 100 pages or 100 
pages of computer printout does meet the terms of the restriction.
    (3) Similarly, the term ``search time'' in this context has as its 
basis, manual search. To apply this term to searches made by computer, 
OA will determine the hourly cost of operating the central processing 
unit and the operator's hourly salary plus 16 percent. When the cost of 
a search (including the operator time and the cost of operating the 
computer to process the request) equals the equivalent dollar amount of 
two hours of the salary of the person performing the search, i.e., the 
operator, OA will begin assessing charges for a computer search.

[56 FR 5742, Feb. 13, 1991]



Sec. 2502.13  Fees to be charged--categories of requestors.

    There are four categories of FOIA requestors: commercial use 
requestors educational and non-commercial scientific institutions; 
representatives of the news media; and all other requestors. The 
specific levels of fees for each of these categories are:
    (a) Commercial use requestors. When OA receives a request for 
documents for commercial use, it will assess charges that recover the 
full direct costs of searching for, reviewing for release, and 
duplicating the record sought. Requestors must reasonably

[[Page 436]]

describe the records sought. Commercial use requestors are not entitled 
to two hours of free search time nor 100 free pages of reproduction of 
documents. OA may recover the cost of searching for and reviewing 
records even if there is ultimately no disclosure of records (see Sec. 
2502.14).
    (b) Educational and non-commercial scientific institution 
requestors. OA shall provide documents to requestors in this category 
for the cost of reproduction alone, excluding charges for the first 100 
pages. To be eligible for inclusion in this category, requestors must 
show that the request is being made as authorized by and under the 
auspices of a qualifying institution and that the records are not sought 
for a commercial use, but are sought in furtherance of scholarly if the 
request is from an education institution) or scientific (if the request 
is from a non-commercial scientific institution) research. Requestors 
must reasonably describe the records sought.
    (c) Requestors who are representatives of the news media. OA shall 
provide documents to requestors in this category for the cost of 
reproduction alone, excluding charges for the first 100 pages. To be 
eligible for inclusion in this category, a requestor must meet the 
criteria in Sec. 2502.11(j), and his or her request must not be made 
for commercial use. In reference to this class of requestors a request 
for records supporting the news dissemination function of the requestor 
shall not be considered to be a request that is for a commercial use. 
Requestors must reasonably describe the records sought.
    (d) All other requestors. OA shall charge requestors who do not fit 
into any of the categories above fees that recover the full, reasonable, 
direct cost of searching for and reproducing the records that are 
responsive to the request, except that the first 100 pages and the first 
two hours of search time shall be furnished without charge. Moreover, 
requests for records about the requestors filed in OA's system of 
records will continue to be treated under the fee provisions of the 
Privacy Act of 1974 which permit fees only for reproduction. Requestors 
must reasonably describe the records sought.

[56 FR 5742, Feb. 13, 1991]



Sec. 2502.14  Miscellaneous fee provisions.

    (a) Charging interest--notice and rate. OA may begin assessing 
interest on an unpaid bill starting on the 31st day of the month 
following the date on which billing was sent. The fact that the fee has 
been received by OA within the thirty day grace period, even if not 
processed, will suffice to stay the accrual of interest. Interest will 
be at the rate prescribed in section 3717 of title 31 of the United 
States Code and will accrue from the date of billing.
    (b) Charges for an unsuccessful search. OA may assess charges for 
time spent searching, even if it fails to locate the records or if 
records located are determined to be exempt from disclosure. If OA 
estimates that search charges are likely to exceed $25.00, it shall 
notify the requestor of the estimated amount of fees, unless the 
requestor has indicated in advance his willingness to pay fees as high 
as those anticipated. Such a notice shall offer the requestor the 
opportunity to confer with agency personnel with the object of 
reformulating the request to meet his or her needs at a lower cost.
    (c) Aggregation results. A requestor may not file multiple requests 
at the same time, each seeking portions of a document or documents 
solely in order to avoid payment of fees. When OA reasonably believes 
that a requestor, or on rare occasions, a group of requestors acting in 
concert is attempting to break a request down into a series of requests 
for the purpose of evading the assessment of fees, OA may aggregate any 
such request and charge accordingly. One element to be considered in 
determining whether a belief would be reasonable is the time period over 
which the requests have occurred.
    (d) Advance payments. OA may not require a requestor to make an 
advance payment, i.e., payment before work is commenced or continued on 
a request unless:
    (1) OA estimates or determines that allowable charges that a 
requestor may be required to pay are likely to exceed $250.00. Then, OA 
will notify the requestor of the likely cost and obtain satisfactory 
assurance of full payment where the requestor has a history of prompt 
payment of FOIA fees, or require an advance payment of an

[[Page 437]]

amount up to the full estimated charges in the case of requestors with 
no history of payment; or
    (2) A requestor has previously failed to pay a fee charged in a 
timely fashion (i.e., within thirty days of the date of the billing). OA 
may require the requestor to pay the full amount owed plus any 
applicable interest as provided above or demonstate that he or she has 
in fact paid the fee, and to make an advance payment of the full amount 
of the estimated fee before the agency begins to process a new request, 
or a pending request from that requestor.

When OA acts under paragraph (d) (1) or (2) of this section, the 
administrative time limits prescribed in the FOIA, 5 U.S.C. 552(a)(6) 
(i.e., ten working days from receipt of initial request and 20 working 
days from receipt of appeals from initial denial, plus permissible 
extensions of these time limits) will begin only after OA has received 
fee payments described above.
    (e) Effect of the Debt Collection Act of 1982 (Pub. L. 97-365). OA 
should comply with the provisions of the Debt Collection Act, including 
disclosure to consumer reporting agencies and use of collection 
agencies, where appropriate, to encourage repayment.

[56 FR 5744, Feb. 13, 1991]



Sec. 2502.15  Waiver or reduction of charges.

    Fees otherwise chargeable in connection with a request for 
disclosure of a record shall be waived or reduced where it is determined 
that disclosure is in the public interest because it is likely to 
contribute significantly to public understanding of the operations or 
activities of the Government and is not primarily in the commercial 
interest of the requestor.

[56 FR 5744, Feb. 13, 1991]



Sec. 2502.16  Information to be disclosed.

    (a) In general, all records of the Office of Administration are 
available to the public, as required by the Freedom of Information Act. 
However, the Office claims the right, where it is applicable, to 
withhold material under the provisions specified in the Freedom of 
Information Act as amended (5 U.S.C. 552(b)).
    (b) Records from Non-U.S. Government Source. (1) Upon receipt of a 
request for a record that was obtained from a non-U.S. Government 
source, or for a record containing information clearly identified as 
having been provided by a non-U.S. Government source, including a 
contract proposal or contract material, the Office will contact the 
source of the requested record or information requesting advice as to 
whether release of the record would adversely affect the source's 
competitive position or invade anyone's privacy. Subsequent to receipt 
of such advice, the Office will independently examine the requested 
document and will notify the requester of the final decision.
    (2) OA personnel will generally consider two exemptions in the FOIA 
in deciding whether to withhold from disclosure material from a non-U.S. 
Government source. Exemption 4 permits withholding of ``trade secrets 
and commercial or financial information obtained from a person and 
privileged or confidential.'' Exemption 6 permits withholding certain 
information, the disclosure of which ``would constitute a clearly 
unwarranted invasion of personal privacy.'' The source whose material 
has been requested will be asked to supply convincing justification for 
any material it wishes withheld under the Act, in accordance with the 
following general guidelines.
    (i) For consideration under exemption 4, the supplier of the record 
or information should identify material that would be likely to cause 
substantial harm to its present or future competitive position if it 
were released. If a contractor, the provider should assume that the 
material will be released to a competitor, even if that is not always 
the case. A contractor must provide detailed information on why release 
would be harmful, e.g., the general custom or usage in the business; the 
number and situation of the persons who have access to the information; 
the type and degree of risk of financial injury that release would 
cause; and the length of time the information will need to be kept 
confidential.
    (A) In this respect, the Office of Administration will--as a general 
rule--look favorably upon recommendations for withholding information 
about

[[Page 438]]

ideas, methods, and processes that are unique; about equipment, 
materials, or systems that are potentially patentable; or about a unique 
use of equipment which is specifically outlined.
    (B) OA will not withhold information that is known through custom or 
usage in the relevant trade, business, or profession, or information 
that is generally known to any reasonably educated person. Self-evident 
statements or reviews of the general state of the art will not 
ordinarily be withheld.
    (C) OA will withhold all cost data submitted except the total 
estimated cost for each year of the contract. Where appropriate, OA will 
release unit pricing data except where that information would disclose 
confidential information such as profit margins. It will release these 
total estimated costs and ordinarily release explanatory material and 
headings associated with the cost data, withholding only the figures 
themselves. If a contractor believes some of the explanatory material 
should be withheld, that material must be identified and a justification 
be presented as to why it should not be released.
    (ii) Exemption 6 is not a blanket exemption for all personal 
information. The Office will balance the need to keep a person's private 
affairs from unnecessary public scrutiny with protection of the public's 
right to information on Government records.
    (A) As a general practice, the Office will release information about 
any person named in a contract itself or about any person who signed a 
contract as well as information given in a proposal about any officer of 
a corporation submitting that proposal. Except for names and other 
identifying details, the Office usually releases all information in 
resumes concerning employees, including education and experience. 
Efforts will be made to identify information that should be deleted and 
offerors are urged to point out such material for guidance. Any 
information in the proposal which might constitute an unwarranted 
invasion of personal privacy if released should be identified and a 
justification for non-release provided in order to receive proper 
consideration.
    (B) The Office can protect the names of and identifying details 
about other staff members who are described in a contract proposal if it 
is clear that identification of these employees would assist competitors 
in raiding and hiring them away. In this regard, names and other 
identifying details could be protected under Exemption 4 (harmful to 
competitive position) and also under Exemption 6 (it would be an 
unwarranted invasion of personal privacy to release them). In such a 
case, the Office would withhold names, home addresses, salaries, 
telephone numbers, social security numbers, marital status and, if these 
served to identify them, perhaps some details about past employment or 
professional activities of these persons.

[45 FR 47112, July 14, 1980. Redesignated and amended at 49 FR 28234, 
July 11, 1984. Redesignated and amended at 56 FR 5744, Feb. 13, 1991]



Sec. 2502.17  Exemptions.

    (a) 5 U.S.C. 552 exempts from all of its publication and disclosure 
requirements nine categories of records which are described in 552(b). 
These categories include such matters as national defense and foreign 
policy information, investigatory files, internal procedures and 
communications, materials exempted from disclosure by other statutes, 
information given in confidence and matters involving personal privacy.
    (b) Executive Order 12028 (December 4, 1977) provides that the 
Office of Administration shall upon request, assist the White House 
office in performing its role of providing those administrative services 
which are primarily in direct support of the President. Due to this role 
of providing direct support of the President, members of the public 
should presume that communications between the Director of the Office of 
Administration and the President (and their staffs) are confidential or 
ordinarily will not be released; they will usually fall, at a minimum, 
within Exemption 5 of the Act.
    (c) The records of the Office of Administration which are part of 
systems of records subject to the Privacy Act of 1974 are exempt from 
disclosure to the

[[Page 439]]

public except as provided by 5 CFR part 2504.

[45 FR 47112, July 14, 1980. Redesignated at 49 FR 28235, July 11, 1984, 
and further redesignated at 56 FR 5744, Feb. 13, 1991]



Sec. 2502.18  Deletion of exempted information.

    Where requested records contain matters which are exempted under 5 
U.S.C. 552(b) but which matters are reasonably segregable from the 
remainder of the records, they shall be disclosed by the Office with 
deletions. To each such record, the Office shall attach a written 
justification for making deletions. A single such justification shall 
suffice for deletions made in a group of similar or related records.

[45 FR 47112, July 14, 1980. Redesignated at 49 FR 28235, July 11, 1984, 
and further redesignated 56 FR 5744, Feb. 13, 1991]



Sec. 2502.19  Annual report.

    The General Counsel or his or her designee shall annually on or 
before March 1, submit a Freedom of Information report covering the 
preceding calendar year to the Speaker of the House of Representatives 
and President of the Senate. The report shall include those matters 
required by 5 U.S.C. 552(d).

[45 FR 47112, July 14, 1980. Redesignated and amended at 49 FR 28235, 
July 11, 1984. Redesignated at 56 FR 5744, Feb. 13, 1991]



 Subpart B_Production in Response to Subpoenas or Demands of Courts or 
                            Other Authorities



Sec. 2502.30  Purpose and scope.

    This subpart contains the regulations of the Office concerning 
procedures to be followed when a subpoena, order or other demand 
(hereinafter in this subpart referred to as a ``demand'') of a court or 
other authority is issued for the production or disclosure of:
    (a) Any material contained in the files of the Office of 
Administration;
    (b) Any information relating to materials contained in the files of 
the Office; or
    (c) Any information or material acquired by any person while such 
person as an employee of the Office of Administration as a part of the 
performance of his official duties or because of his official status.



Sec. 2502.31  Production prohibited unless approved by the Deputy Director.

    No employee or former employee of the Office of Administration 
shall, in response to a demand of a court or other authority, produce 
any material contained in the files of the Office of Administration or 
disclose any information or produce any material acquired as part of the 
performance of his official status without the prior approval of the 
Deputy Director.

[45 FR 47112, July 14, 1980, as amended at 56 FR 5744, Feb. 13, 1991]



Sec. 2502.32  Procedure in the event of a demand for disclosure.

    (a) Whenever a demand is made upon an employee or former employee of 
the Office of Administration for the production of material or the 
disclosure of information described in Sec. 2502.31, he shall 
immediately notify the Deputy Director. If possible, the Deputy Director 
shall be notified before the employee or former employee concerned 
replies to or appears before the court or other authority.
    (b) If response to the demand is required before instructions from 
the Deputy Director are received, an attorney designated for that 
purpose by the Office of Administration shall appear with the employee 
or former employee upon whom the demand has been made, and shall furnish 
the court or other authority with a copy of the regulations contained in 
this part and inform the court or other authority that the demand has 
been or is being, as the case may be, referred for prompt consideration 
by the Deputy Director. The court or other authority shall be requested 
respectfully to stay the demand pending receipt of the requested 
instructions from the Deputy Director.

[45 FR 47112, July 14, 1980, as amended at 56 FR 5744, Feb. 13, 1991]



Sec. 2502.33  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 2502.32(b) 
pending receipt of instructions from the Deputy

[[Page 440]]

Director, or if the court or other authority rules that the demand must 
be complied with irrespective of the instructions from the Deputy 
Director not to produce the material or disclose the information sought, 
the employee or former employee upon whom the demand has been made shall 
respectfully decline to comply with the demand. (United States ex rel. 
Touhy v. Ragen, 340 U.S. 462 (1951)).

[45 FR 47112, July 14, 1980, as amended at 56 FR 5744, Feb. 13, 1991]



PART 2504_PRIVACY ACT REGULATIONS--Table of Contents




Sec.
2504.1 Purpose and scope.
2504.2 Definitions.
2504.3 Annual notice of systems of records maintained.
2504.4 Determining if an individual is the subject of a record.
2504.5 Granting access to a record.
2504.6 Special procedures for medical records.
2504.7 Granting access when accompanied by another individual.
2504.8 Action on request.
2504.9 Identification requirements.
2504.10 Access of others to records about an individual.
2504.11 Access to the accounting of disclosures from records.
2504.12 Denials of access.
2504.13 Requirements for requests to amend records.
2504.14 Action on request to amend a record.
2504.15 Procedures for appeal of determination to deny access to or 
          amendment of records.
2504.16 Appeals process.
2504.17 Fees.
2504.18 Penalties.

    Authority: 5 U.S.C. 552a.

    Source: 45 FR 41121, June 18, 1980, unless otherwise noted.



Sec. 2504.1  Purpose and scope.

    These regulations implement the Privacy Act of 1974, 5 U.S.C. 552a. 
The regulations apply to all records maintained by the Office of 
Administration that are contained in a system of records, and that 
contain information about an individual. The regulations also establish 
procedures that (a) authorize an individual's access to records 
maintained about him; (b) limit the access of other persons to those 
records, and (c) permit an individual to request the amendment or 
correction of records about him.



Sec. 2504.2  Definitions.

    For the purposes of this part--(a) Office means the Office of 
Administration, Executive Office of the President;
    (b) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence.
    (c) Maintain means collect, use or distribute;
    (d) Record means any item collection or grouping of information 
about an individual that is maintained by the Office, including but not 
limited to education, financial transactions, medical history, and 
criminal or employment history and that contain's the individual's name, 
identifying number, symbol, or other identifiers assigned to the 
individual, such as a finger or voice print or photograph;
    (e) System of records means a group of any records controlled by the 
Office and from which information is retrieved by the name of the 
individual;
    (f) System manager means the employee of the Office who is 
responsible for the maintenance, collection, use or distribution of 
information contained in a system of records;
    (g) Routine use means, with respect to the disclosure of a record, 
the use of that record for a purpose consistent with the purpose for 
which it was collected;
    (h) Subject individual means the individual by whose name or other 
personal identifier a record is maintained or retrieved;
    (i) Statistical record means record in a system of records 
maintained for statistical research or reporting purposes only and not 
used in whole or in part in making any determination about an 
identifiable individual, except as provided by section 8 of title 13 
U.S.C.;
    (j) Agency means agency as defined in 5 U.S.C. 552(e);
    (k) Work days as used in calculating the date when response is due 
does not include Saturdays, Sundays and legal public holidays.

[[Page 441]]



Sec. 2504.3  Annual notice of systems of records maintained.

    The Office will publish in the Federal Register upon establishment 
or revision a notice of the existence and character of the systems of 
records the Office maintains. The notices shall include (1) the system 
name, (2) the system location, (3) the categories of individuals covered 
by the system, (4) the categories of records in the system, (5) the 
Office's authority to maintain the system, (6) the routine uses of the 
system, (7) the Office's policies and practice for maintenance of the 
system, (8) the system manager, (9) the procedures for notification, 
access to and correction of records in the system, and (10) the sources 
of information for the system.

[45 FR 47112, July 14, 1980, as amended at 49 FR 28236, July 11, 1984]



Sec. 2504.4  Determining if an individual is the subject of a record.

    (a) Individuals desiring to know if a specific system of records 
maintained by the Office contains a record pertaining to them should 
address inquiries to the Privacy Act Officer, Office of Administration, 
Washington, DC 20503.
    (b) Inquiries must be in writing and the words ``PRIVACY ACT 
REQUEST'' should be printed on both the letter and the envelope. The 
request letter should contain the complete name and identifying number 
of the pertinent system as published in the annual Federal Register 
notice describing the Office's Systems of Records; the full name and 
address of the subject individual; a brief description of the nature, 
time, place and circumstances of the individual's prior association with 
the Office; and any other information the individual believes would help 
the Privacy Act Officer determine whether the information about the 
individual is included in the system of records. In instances when the 
information is insufficient to ensure disclosure to the subject 
individual to whom the record pertains, the Office reserves the right to 
ask the requestor for additional identifying information.
    (c) To the extent possible, the Privacy Act Officer will answer or 
acknowledge the inquiry within 10 work days of its receipt by the 
Office. When the response cannot be made within 10 work days, the 
Privacy Act Officer will provide the requestor with the date when a 
response may be expected and, whenever possible, the specific reasons 
for the delay.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.5  Granting access to a record.

    (a) An individual requesting access to a record about himself in a 
system of records maintained by the Office should submit the request in 
writing to the Privacy Act Officer. Due to security measures at the Old 
and New Executive Office Buildings, requests made in person can only be 
accepted from current Office employees, who should make access requests 
to the Privacy Act Officer on regularly scheduled work days between 9:00 
a.m. and 5:30 p.m.
    (b) The request for access should contain the same information set 
forth in Sec. 2504.4(b). However, if the request for access follows a 
request made under Sec. 2504.4(a) and (b) of this part, the same 
identifying information need not be included: Provided, That a copy of 
the prior request or a copy of the Office's response to that request is 
attached. The request should state if a copy of the record is desired.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.6  Special procedures for medical records.

    (a) When the Privacy Act Officer receives a request from an 
individual for access to those official medical records which belong to 
the Office of Personnel Management and are described in Chapter 339, 
Federal Personnel Manual (medical records about entrance qualification 
or fitness for duty, or medical records which are otherwise filed in the 
Official Personnel Folder), the pertinent records shall be referred to a 
Federal Medical Officer for review and determination in accordance with 
this section. If no Federal Medical Officer is available to make the 
determination required by this section, the Privacy Act Officer shall 
refer the request and the medical reports concerned to the

[[Page 442]]

Office of Personnel Management for determination.
    (b) If, in the opinion of a Federal Medical Officer, medical records 
requested by the subject individual indicate a condition about which a 
prudent physician would hesitate to inform a person suffering from such 
a condition of its exact nature and probable outcome, the Privacy Act 
Officer shall not release the medical information to the subject 
individual nor to any person other than a physician designated in 
writing by the subject individual, his guardian, or conservator.
    (c) If, in the opinion of a Federal Medical Officer, the medical 
information does not indicate the presence of any condition which would 
cause a prudent physician to hesitate to inform a person suffering from 
such a condition of its exact nature and probable outcome, the Privacy 
Act Officer shall release it to the subject individual or to any person, 
firm, or organization which the individual authorizes in writing to 
receive it.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.7  Granting access when accompanied by another individual.

    An individual who wishes to have a person of his choosing review, 
accompany him (or her) in reviewing, or obtain a copy of a record must, 
prior to the disclosure, sign a statement authorizing the disclosure of 
his record. The statement shall be maintained with the record.



Sec. 2504.8  Action on request.

    (a) The Privacy Act Officer shall acknowledge requests for access 
within 10 work days of its receipt by the Office. At a minimum, the 
acknowledgement shall include:
    (1) When and where the records will be available;
    (2) The name, title and telephone number of the official who will 
make the records available;
    (3) Whether access will be granted only through providing a copy of 
the record through the mail, or only by examination of the record in 
person if the Privacy Act Officer after consulting with the appropriate 
system manager, has determined the requestor's access would not be 
unduly impeded;
    (4) Fee, if any, charged for copies. (See Sec. 2504.17); and
    (5) Identification documentation required to verify the identify of 
the requestor (see Sec. 2504.9).

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.9  Identification requirements.

    (a) A requestor should be prepared to identify himself (or herself) 
by signature, i.e., to note by signature the date of access and/or to 
produce two other legal forms of identification (driver's license, 
employee identification, annuitant card, passport, etc.).
    (b) If an individual is unable to produce adequate identification, 
the individual shall sign a statement asserting identity and 
acknowledging that knowingly or willfully seeking or obtaining access to 
records about another person under false pretenses may result in a fine 
of up to $5,000 (see Sec. 2504.18). In addition, depending upon the 
sensitivity of the records, the Privacy Act Officer after consulting 
with the appropriate system manager, may require further reasonable 
assurances, such as statements of other individuals who can attest to 
the identity of the requestor.
    (c) If access is granted by mail, the identity of the requestor 
shall be verified by comparing signatures. If, in the opinion of the 
Privacy Act Officer, after consulting with the appropriate system 
manager, the granting of access through the mail may result in harm or 
embarrassment if disclosed to a person other than the subject 
individual, a notarized statement of identify or some other similar 
assurance of identity will be required.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.10  Access of others to records about an individual.

    (a) No official or employee of the Office shall disclose any record 
to any person or to another agency without the express written consent 
of the subject individual, unless the disclosure is:

[[Page 443]]

    (1) To officers or employees of the Office who need the information 
to perform their official duties;
    (2) Under the requirements of the Freedom of Information Act;
    (3) For a routine use that has been published in a notice in the 
Federal Register;
    (4) To the Bureau of the Census for uses under title 13 of the 
United States Code;
    (5) To a person or agency who has given the Office advance written 
notice of the purpose of the request and certification that the record 
will be used only for statistical purposes. (In addition to deleting 
personal identifying information from records released for statistical 
purposes, the Privacy Act Officer shall ensure that the identity of the 
individual cannot reasonably be deduced by combining various statistical 
records);
    (6) To the National Archives of the United States if a record has 
sufficient historical or other value to be preserved by the United 
States Government, or to the Privacy Act Officer (or a designee) to 
determine whether the record has that value;
    (7) In response to written request, that identifies the record and 
the purpose of the request, made by another agency or instrumentality of 
any Government jurisdiction within or under the control of the United 
States for civil or criminal law enforcement activity, if that activity 
is authorized by law;
    (8) To a person who, showing compelling circumstances, needs the 
information to prevent harm to the health or safety of an individual, 
but not necessarily the individual to whom the record pertains (upon 
such disclosure, a notification shall be sent to the last known address 
of the subject individual);
    (9) To either House of Congress, or to a Congressional committee or 
subcommittee if the subject matter is within its jurisdiction;
    (10) To the Comptroller General, or an authorized representative, to 
carry out the duties of the General Accounting Office;
    (11) Pursuant to a court order; or
    (12) To a consumer reporting agency in accordance with section 
3711(f) of title 31.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.11  Access to the accounting of disclosures from records.

    Rules governing access to the accounting of disclosures are the same 
as those granting access to the records.



Sec. 2504.12  Denials of access.

    (a) The Privacy Act Officer may deny an individual access to his (or 
her) record if: (1) In the opinion of the Privacy Act Officer, the 
individual seeking access has not provided sufficient identification 
documentation to permit access; or
    (2) The Office has published rules in the Federal Register exempting 
the pertinent system of records from the access requirement.
    (b) If access is denied, the requestor shall be informed of the 
reasons for denial and the procedures to obtain a review of the denial 
(see Sec. 2504.15).

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.13  Requirements for requests to amend records.

    (a) Individuals who desire to correct or amend a record pertaining 
to them should submit a written request to the Privacy Act Officer, 
Office of Administration, Washington, DC 20503. The words ``PRIVACY 
ACT--REQUEST TO AMEND RECORD'' should be written on the letter and the 
envelope.
    (b) The request for amendment or correction of the record must state 
the exact name of the system of records as published in the Federal 
Register; a precise description of the record proposed for amendment; a 
brief statement describing the information the requestor believes to be 
inaccurate or incomplete, and why; and, the amendment or correction 
desired. If the request to amend the record is the result of the 
individual's having accessed the record in accordance with Sec. Sec. 
2504.5, 2504.6, 2504.7, 2504.8 of this part, copies of previous 
correspondence between the requestor and the Office should be attached, 
if possible.

[[Page 444]]

    (c) Individuals needing assistance in preparing a request to amend a 
record may contact the Privacy Act Officer at the address cited in Sec. 
2504.13(a) of this part.
    (d) If the individual's identity has not been previously verified, 
the Office may require identification documentation as described in 
Sec. 2504.9.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.14  Action on request to amend a record.

    (a) A request for amendment of a record will be acknowledged within 
10 work days of its receipt by the Office. If a decision cannot be made 
within this time, the requestor will be informed by mail of the reasons 
for the delay and the date when a reply can be expected, normally within 
30 work days from receipt of the request.
    (b) The final response will include the Office's determination of 
whether to grant or deny the request. If the request is denied, the 
response will include:
    (1) The reasons for the decision;
    (2) The name and address of the official to whom an appeal should be 
directed;
    (3) The name and address of the official designated to assist the 
individual in preparing the appeal;
    (4) A description of the appeal process within the Office; and
    (5) A description of any other procedures which may be required of 
the individual in order to process the appeal.



Sec. 2504.15  Procedures for appeal of determination deny access to or 

amendment of records.

    (a) Individuals who disagree with the refusal of the Office to grant 
them access to or to amend a record about them should submit a written 
request for review to the Privacy Act Officer, Office of Administration, 
Washington, DC 20503. The words ``PRIVACY ACT--APPEAL'' should be 
written on the letter and the envelope. Individuals desiring assistance 
preparing their appeal should contact the Privacy Act Officer.
    (b) The appeal letter must be received by the Office within 30 
calendar days from the date the requestor received the notice of denial. 
At a minimum, the appeal letter should identify:
    (1) The records involved;
    (2) The date of the initial request for access to or amendment of 
the record;
    (3) The date of the Office denial of that request; and
    (4) The reasons supporting the request for reversal of the Office's 
decision.

Copies of previous correspondence from the Office denying the request to 
access or amend the record should also be attached, if possible.
    (c) The Office reserves the right to dispose of correspondence 
concerning the request to access or amend a record if no request for 
review of the Office's decision is received within 180 days of the 
decision date. Therefore, a request for review received after 180 days 
may, at the discretion of the Privacy Act Officer, be treated as an 
initial request to access or amend a record.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.16  Appeals process.

    (a) Within 20 work days of receiving the request for review, a 
review group composed of the Privacy Act Officer, the General Counsel 
and the Official having operational control over the record, will 
propose a determination on the appeal for the Director's final decision. 
If a final determination cannot be made in 20 days, the requestor will 
be informed of the reasons for the delay and the date on which a final 
decision can be expected. Such extensions are unusal, and should not 
exceed an additional 30 work days.
    (b) If the original request was for access and the initial 
determination is reversed, the procedures in Sec. 2504.8 will be 
followed. If the initial determination is upheld, the requestor will be 
so informed and advised of the right to judicial review pursuant to 5 
U.S.C. 552a(g).
    (c) If the initial denial of a request to amend a record is 
reversed, the Office will correct the record as requested and advise the 
individual of the correction. If the original decision is upheld, the 
requestor will be so advised and informed in writing of the right to 
judicial review pursuant to 5 U.S.C. 552a(g).

[[Page 445]]

In addition, the requestor will be advised of his (or her) right to file 
a concise statement of disagreement with the Director. The statement of 
disagreement should include an explanation of why the requestor believes 
the record is inaccurate, irrelevant, untimely or incomplete. The 
Director shall maintain the statement of disagreement with the disputed 
record, and shall include a copy of the statement of disagreement in any 
disclosure of the record. Additionally, the Privacy Act Officer shall 
provide a copy of the statement of disagreement to any person or agency 
to whom the record has been disclosed, if the disclosure was made 
pursuant to Sec. 2504.10 (5 U.S.C. 552(a)(c)).

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.17  Fees.

    (a) Individuals will not be charged for:
    (1) The search and review of the record;
    (2) Any copies produced to make the record available for access;
    (3) Copies of the requested record if access can only be 
accomplished by providing a copy through the mail; and
    (4) Copies of three (3) or less pages of a requested record.
    (b) Records will be photocopied for 10[cent] per page for four pages 
or more (except for paragraphs (a), (1), (2), (3), (4) of this section). 
If the record is larger than 8\1/2\ x 14 inches, the fee will be the 
cost of reproducing the record through Government or commerical sources.
    (c) Fees shall be paid in full prior to issuance of requested 
copies. Payment shall be by personal check or money order payable to the 
Treasurer of the United States, and mailed or delivered to the Deputy 
Director, Office of Administration, Washington, DC 20503.
    (d) The Deputy Director may waive the fee if: (1) The cost of 
collecting the fee exceeds the amount collected; or
    (2) The production of the copies at no charge is in the best 
interest of the government.
    (e) A receipt will be furnished on request.

[45 FR 41121, June 18, 1980, as amended at 49 FR 28235, July 11, 1984]



Sec. 2504.18  Penalties.

    (a) Title 18, U.S.C. 1001, Crimes and Criminal Procedures, makes it 
a criminal offense, subject to a maximum fine of $10,000 or imprisonment 
for not more than five years, or both, to knowingly and willfully make 
or cause to be made any false or fraudulent statements or representation 
in any matter within the jurisdiction of any agency of the United 
States. Section (i)(3) of the Privacy Act (5 U.S.C. 552a) makes it a 
misdemeanor, subject to a maximum fine of $5,000 to knowingly and 
willfully request or obtain any record concerning an individual under 
false pretenses. Sections (i) (1) and (2) or 5 U.S.C. 552a provide 
penalties for violations by agency employees of the Privacy Act or 
regulations established thereunder.

[[Page 447]]



                CHAPTER XVI--OFFICE OF GOVERNMENT ETHICS




  --------------------------------------------------------------------

                SUBCHAPTER A--ORGANIZATION AND PROCEDURES
Part                                                                Page
2600            Organization and functions of the Office of 
                    Government Ethics.......................         449
2601            Implementation of Office of Government 
                    Ethics statutory gift acceptance 
                    authority...............................         451
2602

Employee responsibilities and conduct, addendum [Reserved]

2604            Freedom of Information Act rules and 
                    schedule of fees for the production of 
                    public financial disclosure reports.....         454
2606            Privacy Act rules...........................         466
2608            Testimony by OGE employees relating to 
                    official information and production of 
                    official records in legal proceedings...         475
2610            Implementation of the Equal Access to 
                    Justice Act.............................         480
                     SUBCHAPTER B--GOVERNMENT ETHICS
2634            Executive branch financial disclosure, 
                    qualified trusts, and certificates of 
                    divestiture.............................         488
2635            Standards of ethical conduct for employees 
                    of the executive branch.................         546
2636            Limitations on outside earned income, 
                    employment and affiliations for certain 
                    noncareer employees.....................         593
2637            Regulations concerning post employment 
                    conflict of interest....................         600
2638            Office of Government Ethics and executive 
                    agency ethics program responsibilities..         623
2640            Interpretation, exemptions and waiver 
                    guidance concerning 18 U.S.C. 208 (Acts 
                    affecting a personal financial interest)         640
2641            Post-employment conflict of interest 
                    restrictions............................         657

[[Page 449]]



                SUBCHAPTER A_ORGANIZATION AND PROCEDURES




PART 2600_ORGANIZATION AND FUNCTIONS OF THE OFFICE OF GOVERNMENT ETHICS--Table 

of Contents




Sec.
2600.101 Mission and history.
2600.102 Contact information.
2600.103 Office of Government Ethics organization and functions.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); E.O. 
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    Source: 68 FR 41682, July 15, 2003, unless otherwise noted.



Sec. 2600.101  Mission and history.

    (a) The Office of Government Ethics (OGE) was established by the 
Ethics in Government Act of 1978, Public Law 95-521, 92 Stat. 1824 
(1978). OGE exercises leadership in the executive branch of the Federal 
Government to prevent conflicts of interest on the part of executive 
branch employees and resolve those conflicts of interest that do occur. 
In partnership with executive branch departments and agencies, OGE 
fosters high ethical standards for executive branch employees which, in 
turn, strengthens the public's confidence that the Government's business 
is conducted with impartiality and integrity.
    (b) Originally an entity within the Office of Personnel Management, 
OGE became a separate executive branch agency on October 1, 1989, 
pursuant to section 3 of the Office of Government Ethics Reauthorization 
Act of 1988, Public Law 100-598, 102 Stat. 3031 (1988). OGE is the 
supervising ethics office for all executive branch officers and 
employees pursuant to the Ethics Reform Act of 1989, Public Law 101-194, 
103 Stat. 1716 (1989), as amended by Public Law 101-280, 104 Stat. 149 
(1990). Additionally, OGE has various responsibilities under Executive 
Order 12674 of April 12, 1989, ``Principles of Ethical Conduct for 
Government Officers and Employees'' (3 CFR, 1989 Comp., pp. 215-218), as 
modified by Executive Order 12731 of October 17, 1990 (3 CFR, 1990 
Comp., pp. 306-311).



Sec. 2600.102  Contact information.

    (a) Address. The Office of Government Ethics is located at 1201 New 
York Avenue, NW., Suite 500, Washington, DC 20005-3917. OGE does not 
have any regional offices.
    (b) Web site. Information about OGE and its role in the executive 
branch ethics program as well as copies of publications that have been 
developed for training, educational and reference purposes are available 
electronically on OGE's Internet Web site (http://www.usoge.gov). The 
Web site has copies of various Executive orders, statutes, and 
regulations that together form the basis for the executive branch ethics 
program. The site also contains ethics advisory opinions and letters 
published by OGE, as well as other information pertinent to the Office.
    (c) Telephone numbers. OGE's main telephone number is 202-482-9300. 
Persons who are deaf or speech impaired may contact OGE at the following 
TDD (Telecommunications Device for the Deaf and Speech Impaired) number: 
202-482-9293. The main OGE FAX number is 202-482-9237.



Sec. 2600.103  Office of Government Ethics organization and functions.

    (a) The Office of Government Ethics is divided into the following 
offices:
    (1) The Office of the Director;
    (2) The Office of General Counsel and Legal Policy;
    (3) The Office of Government Relations and Special Projects;
    (4) The Office of Agency Programs; and
    (5) The Office of Administration and Information Management.
    (b) Office of the Director. The Director of the Office of Government 
Ethics is appointed by the President and confirmed by the Senate. The 
Director advises the White House and executive branch Presidential 
appointees on Government ethics matters; maintains a liaison and 
provides guidance on ethics to executive branch departments and 
agencies; and oversees and coordinates

[[Page 450]]

all OGE rules, regulations, formal advisory opinions and major policy 
decisions. The Director also serves as a member of the President's 
Council on Integrity and Efficiency; the Executive Council on Integrity 
and Efficiency; the Integrity Committee; and on such other boards, 
councils, and committees as may be required by statute, Executive order 
or regulation. The Director represents the agency in various public 
outreach initiatives.
    (c) Office of General Counsel and Legal Policy. (1) The Office of 
General Counsel and Legal Policy develops regulations and legislative 
proposals pertaining to conflict of interest statutes and standards of 
ethical conduct applicable to executive branch officers and employees, 
and executive branch public and confidential financial disclosure 
requirements. In addition, this Office provides advice and counseling to 
agency ethics officials through formal and informal advisory opinions, 
policy memoranda, and consultations. This Office also manages OGE's 
review and certification of financial disclosure reports filed by 
persons nominated by the President for positions requiring Senate 
confirmation; oversees the creation and operation of qualified and blind 
trusts and the issuance of certificates of divestiture; and responds to 
press inquiries.
    (2) The General Counsel is the principal deputy of the Director of 
OGE, except as the Director expressly provides by written delegation.
    (d) Office of Government Relations and Special Projects. The Office 
of Government Relations and Special Projects provides liaison to the 
Office of Management and Budget and to the Congress regarding 
legislative matters, coordinates OGE's support of U.S. Government 
efforts concerning international anticorruption and ethics initiatives, 
and is responsible for certain OGE special projects.
    (e) Office of Agency Programs. (1) The Office of Agency Programs 
provides services to, and monitors, Federal executive branch agency 
ethics programs through three divisions: the Education Division, the 
Program Services Division, and the Program Review Division.
    (i) The Education Division develops ethics-related, instructor-led 
and Web-based training programs for executive agency ethics officials. 
The division also develops training for ethics officials to deliver to 
their employees. The division conducts annual surveys to determine the 
training needs of ethics officials and tailors its program to address 
those needs.
    (ii) The Program Services Division is OGE's primary liaison to 
ethics officials in executive branch departments and agencies. Through 
its desk officers, the division assists ethics officials in developing, 
maintaining and improving all systems within their ethics programs. The 
division also discloses upon proper request copies of public financial 
disclosure reports that are filed with OGE, collects semiannual reports 
of payments accepted under 31 U.S.C. 1353, and works closely with ethics 
officials to ensure that annual and termination public financial 
disclosure reports and ethics agreements comply with ethics laws and 
regulations.
    (iii) The Program Review Division monitors compliance with executive 
branch ethics laws and regulations in executive branch departments and 
agencies, regional offices, and military bases through on-site ethics 
program reviews. Reviews are conducted to identify and report strengths 
and weaknesses of agency ethics programs according to an annual program 
plan.
    (2) In addition to the functions performed by its three divisions, 
the Office of Agency Programs holds an annual ethics conference and 
collects annual reports concerning certain aspects of agency ethics 
programs.
    (f) Office of Administration and Information Management. The Office 
of Administration and Information Management provides support to all OGE 
operating programs through two divisions: The Administration Division 
and the Information Resources Management Division.
    (1) The Administration Division is responsible for personnel, 
payroll, fiscal resource management, travel, procurement, and the 
publishing and printing of materials.
    (2) The Information Resources Management Division is responsible for 
telecommunications, graphics, records management, program management of

[[Page 451]]

information, and Web site technologies.

[68 FR 41682, July 15, 2003, as amended at 68 FR 62213, Nov. 3, 2003]



PART 2601_IMPLEMENTATION OF OFFICE OF GOVERNMENT ETHICS STATUTORY GIFT 

ACCEPTANCE AUTHORITY--Table of Contents




                      Subpart A_General Provisions

Sec.
2601.101 Authority.
2601.102 Purpose.
2601.103 Policy.
2601.104 Relationship to other authorities.
2601.105 Definitions.

      Subpart B_Guidelines for Solicitation and Acceptance of Gifts

2601.201 Delegation.
2601.202 Procedure.
2601.203 Conflict of interest analysis.
2601.204 Conditions for acceptance.

                    Subpart C_Accounting Requirements

2601.301 Accounting of gifts.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978).

    Source: 68 FR 60594, Oct. 22, 2003, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2601.101  Authority.

    Section 2 of the Office of Government Ethics Authorization Act of 
1996, amending the Ethics in Government Act of 1978, as codified at 5 
U.S.C. app. 403(b), authorizes the Office of Government Ethics (OGE) to 
accept and utilize gifts for the purpose of aiding or facilitating the 
work of OGE.



Sec. 2601.102  Purpose.

    The purpose of this part is to establish guidelines governing the 
implementation of OGE's gift authority by defining its scope and 
application, by prescribing the policies, standards and procedures that 
govern the solicitation, acceptance and use of gifts, and by setting 
forth accounting requirements related to the use of this authority.



Sec. 2601.103  Policy.

    (a) Scope. The Office of Government Ethics may use its statutory 
authority to solicit, accept and utilize gifts to the agency that aid or 
facilitate the agency's work. The authority to solicit, accept and 
utilize gifts includes the authority to receive, administer, spend, 
invest and dispose of gifts. Gifts to the agency from individuals or 
organizations can be a useful adjunct to appropriated funds and may 
enhance the agency's ability to fulfill its mission, as well as further 
mutually beneficial public/private partnerships, or other useful 
arrangements or relationships. Such uses of this authority are 
appropriate provided that solicitation or acceptance of a gift does not 
compromise the integrity of OGE, its programs or employees.
    (b) Use of gifts. Gifts to OGE may be used to carry out any activity 
that furthers the mission, programs, responsibilities, functions or 
activities of the agency. Gifts may be used to carry out program 
functions whether or not appropriated funds are available for that 
purpose, provided that such expenditures are not barred by law or 
regulation. Gifts may also be used for official travel by employees to 
events or activities required to carry out the agency's statutory or 
regulatory functions. Gifts to the agency may also be used for the 
travel expenses of spouses accompanying employees on official travel, if 
such travel could be paid for by appropriated funds.
    (c) Sources. Generally, gifts may be solicited or accepted from any 
source, including a prohibited source, provided that the standards of 
this part are met. Gifts generally should be made directly to the agency 
and not through intermediaries. However, where a gift is offered by an 
intermediary, both the intermediary and the ultimate source of the gift 
should be analyzed to determine whether acceptance would be appropriate.
    (d) Endorsement. Acceptance of a gift pursuant to this part shall 
not in any way be deemed to be an endorsement of the donor, or the 
donor's products, services, activities, or policies. Letters to a donor 
expressing appreciation of a gift are permitted.

[[Page 452]]

    (e) Type of gift. The agency may solicit or accept any gift that is 
within its statutory authority. However, as a matter of policy, OGE will 
not solicit or accept gifts of currency pursuant to this part. Donors 
who offer currency should be advised that the gift may be made by check 
or money order payable to the U.S. Office of Government Ethics.



Sec. 2601.104  Relationship to other authorities.

    (a) This part does not apply to gifts to the agency of:
    (1) Travel and travel-related expenses made pursuant to the 
authority set forth in 31 U.S.C. 1353; or
    (2) Volunteer services made pursuant to the authority set forth in 5 
U.S.C. 3111.
    (b) This part does not apply to gifts to an individual agency 
employee, including:
    (1) Gifts of contributions, awards or other expenses for training 
made pursuant to the authority set forth in the Government Employees 
Training Act, 5 U.S.C. 4111;
    (2) Gifts made by a foreign government or organization, or 
representative thereof, pursuant to the authority set forth in 5 U.S.C. 
7342;
    (3) Gifts made by a political organization that may be accepted by 
an agency employee who, in accordance with the terms of the Hatch Act 
Reform Amendments of 1993, at 5 U.S.C. 7323, may take an active part in 
political management or in political campaigns; or
    (4) Gifts made directly or indirectly that an employee may accept in 
a personal capacity pursuant to the authority set forth in 5 CFR part 
2635, subpart B or subpart C.



Sec. 2601.105  Definitions.

    For the purposes of this part:
    Administration Division means the Administration Division of the 
Office of Government Ethics.
    Agency means the Office of Government Ethics (OGE).
    Authorized agency official means the Director of the Office of 
Government Ethics or the Director's delegatee.
    Director means the Director of the Office of Government Ethics.
    Employee means an employee of the Office of Government Ethics.
    Gift means any gift, donation, bequest or devise of money, use of 
facilities, personal property, or services and may include travel 
reimbursements or payments for attendance at or participation in 
meetings or events.
    Money means currency, checks, money orders or other forms of 
negotiable instruments.
    Personal property means all property, tangible or intangible, not 
defined as real property, and includes stocks and bonds.
    Prohibited source means any source described in 5 CFR 2635.203(d).
    Services means all forms of voluntary and uncompensated personal 
services.
    Use of facilities means use of space, equipment and all other 
facilities.



      Subpart B_Guidelines for Solicitation and Acceptance of Gifts



Sec. 2601.201  Delegation.

    (a) The authority to solicit, accept, and utilize gifts in 
accordance with this part resides with the Director.
    (b) The Director may delegate this authority.
    (c) Authorities delegated in accordance with paragraph (b) of this 
section may be redelegated only through a written delegation authorizing 
an agency employee to solicit or accept specific types of gifts, or a 
gift for a specific purpose, function, or event.



Sec. 2601.202  Procedure.

    (a) The authorized agency official shall have the authority to 
solicit, accept, refuse, return, or negotiate the terms of acceptance of 
a gift.
    (b) An employee, other than an authorized agency official, shall 
immediately forward all offers of gifts covered by this part regardless 
of value to an authorized agency official for consideration and shall 
provide a description of the gift offered. An employee shall also inform 
an authorized agency official of all discussions of the possibility of a 
gift. An employee shall not provide a donor with any commitment, 
privilege, concession or other present

[[Page 453]]

or future benefit (other than an appropriate acknowledgment) in return 
for a gift.
    (c) Only an authorized agency official may solicit, accept or 
decline a gift after making the determination required under the 
conflict of interest standard in Sec. 2601.203. An authorized agency 
official may find that, while acceptance of an offered gift is 
permissible, it is in the interest of the agency to qualify acceptance 
by, for example, limiting the gift in some way. Approval of acceptance 
of a gift in-kind after receipt of the gift may be granted as deemed 
appropriate by the authorized agency official.
    (d) Gifts may be acknowledged in writing in the form of a letter of 
acceptance to the donor. The amount of a monetary gift shall be 
specified. In the case of nonmonetary gifts, the letter shall not make 
reference to the value of the gift. Valuation of nonmonetary gifts is 
the responsibility of the donor. Letters of acceptance shall not include 
any statement regarding the tax implications of a gift, which remain the 
responsibility of the donor. No statement of endorsement should appear 
in a letter of acceptance to the donor.
    (e) A gift may be declined by an authorized official orally or in 
writing. A donor may be advised of the reason why the gift has been 
declined. A gift may be declined solely as a matter of agency 
discretion, even though acceptance would not be precluded under the 
conflict of interest standard in Sec. 2601.203.
    (f) A gift of money or the proceeds of a gift shall be deposited in 
an appropriately documented agency fund. A check or money order should 
be made payable to the ``U.S. Office of Government Ethics.''



Sec. 2601.203  Conflict of interest analysis.

    (a) A gift shall not be solicited or accepted if the authorized 
agency official determines that such solicitation or acceptance of the 
gift would reflect unfavorably upon the ability of the agency, or any 
employee of the agency, to carry out OGE responsibilities or official 
duties in a fair and objective manner, or would compromise the integrity 
or the appearance of the integrity of its programs or any official 
involved in those programs.
    (b) In making the determination required under paragraph (a) of this 
section, an authorized agency official may be guided by all relevant 
considerations, including, but not limited to the following:
    (1) The identity of the donor;
    (2) The monetary or estimated market value or the cost to the donor;
    (3) The purpose of the gift as described in any written statement or 
oral proposal by the donor;
    (4) The identity of any other expected recipients of the gift on the 
same occasion, if any;
    (5) The timing of the gift;
    (6) The nature and sensitivity of any matter pending at the agency 
affecting the interests of the donor;
    (7) The significance of an individual employee's role in any matter 
affecting the donor, if benefits of the gift will accrue to the 
employee;
    (8) The nature of the gift offered;
    (9) The frequency of other gifts received from the same donor; and
    (10) The agency activity, purpose or need that the gift will aid or 
facilitate.
    (c) An authorized agency official may ask the donor to provide in 
writing any additional information needed to assist in making the 
determination under this section. Such information may include a 
description of the donor's business or organizational affiliation and 
any matters that are pending or are expected to be pending before the 
agency.



Sec. 2601.204  Conditions for acceptance.

    (a) No gift may be accepted that:
    (1) Attaches conditions inconsistent with applicable laws or 
regulations;
    (2) Is conditioned upon or will require the expenditure of 
appropriated funds that are not available to the agency;
    (3) Requires the agency to provide the donor with some privilege, 
concession or other present or future benefit in return for the gift;
    (4) Requires the agency to adhere to particular requirements as to 
deposit, investment, or management of funds donated;
    (5) Requires the agency to undertake or engage in activities that 
are not related to the agency's mission, programs or statutory 
authorities; or

[[Page 454]]

    (6) Would reflect unfavorably upon the ability of the agency, or any 
of its employees, to carry out its responsibilities or official duties 
in a fair and objective manner, or would compromise or appear to 
compromise the integrity or the appearance of the integrity of its 
programs or any official involved in those programs.
    (b) [Reserved]

    Note to Sec. 2601.204: Nothing in this part shall prohibit the 
agency from offering or providing the donor an appropriate 
acknowledgment of its gift in a publication, speech or other medium.



                    Subpart C_Accounting Requirements



Sec. 2601.301  Accounting of gifts.

    (a) The Administration Division shall ensure that gifts are properly 
accounted for by following appropriate internal controls and accounting 
procedures.
    (b) The Administration Division shall maintain an inventory of 
donated personal property valued at over $500. The inventory shall be 
updated each time an item is sold, excessed, destroyed or otherwise 
disposed of or discarded.
    (c) The Administration Division shall maintain a log of all gifts 
valued at over $500 accepted pursuant to this part. The log shall 
include, to the extent known:
    (1) The name and address of the donor;
    (2) A description of the gift; and
    (3) The date the gift is accepted.

  PART 2602_EMPLOYEE RESPONSIBILITIES AND CONDUCT, ADDENDUM [RESERVED]



PART 2604_FREEDOM OF INFORMATION ACT RULES AND SCHEDULE OF FEES FOR THE 

PRODUCTION OF PUBLIC FINANCIAL DISCLOSURE REPORTS--Table of Contents




                      Subpart A_General Provisions

Sec.
2604.101 Purpose.
2604.102 Applicability.
2604.103 Definitions.

    Subpart B_FOIA Public Reading Room Facility and Web Site; Index 
                 Identifying Information for the Public

2604.201 Public reading room facility and Web site.
2604.202 Index identifying information for the public.

        Subpart C_Production and Disclosure of Records Under FOIA

2604.301 Requests for records.
2604.302 Response to requests.
2604.303 Form and content of responses.
2604.304 Appeal of denials.
2604.305 Time limits.

                     Subpart D_Exemptions Under FOIA

2604.401 Policy.
2604.402 Business information.

                       Subpart E_Schedule of Fees

2604.501 Fees to be charged--general.
2604.502 Fees to be charged--categories of requesters.
2604.503 Limitations on charging fees.
2604.504 Miscellaneous fee provisions.

                    Subpart F_Annual OGE FOIA Report

2604.601 Electronic posting and submission of annual OGE FOIA report.
2604.602 Contents of annual OGE FOIA report.

  Subpart G_Fees for the Reproduction and Mailing of Public Financial 
                           Disclosure Reports

2604.701 Policy.
2604.702 Charges.

    Authority: 5 U.S.C. 552; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p. 235.

    Source: 60 FR 10007, Feb. 23, 1995, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 2604 appear at 66 FR 
3439, Jan. 16, 2001.



                      Subpart A_General Provisions



Sec. 2604.101  Purpose.

    This part contains the regulations of the Office of Government 
Ethics (OGE) implementing the Freedom of Information Act (FOIA) and 
Executive Order 12600. It describes how any person may obtain records 
from OGE under the FOIA. It also implements section

[[Page 455]]

105(b)(1) of the Ethics in Government Act of 1978, as amended, which 
authorizes an agency to charge reasonable fees to cover the cost of 
reproduction and mailing of public financial disclosure reports 
requested by any person.



Sec. 2604.102  Applicability.

    (a) General. The FOIA and this rule apply to all OGE records. 
However, if another law sets forth procedures for the disclosure of 
specific types of records, such as section 105 of the Ethics in 
Government Act of 1978, 5 U.S.C. appendix, OGE will process a request 
for those records in accordance with the procedures that apply to those 
specific records. See 5 CFR 2634.603 and subpart G of this part. If 
there is any record which is not required to be released under those 
provisions, OGE will consider the request under the FOIA and this rule, 
provided that the special Ethics Act access procedures cited must be 
complied with as to any record within the scope thereof.
    (b) The relationship between the FOIA and the Privacy Act of 1974. 
The Privacy Act of 1974, 5 U.S.C. 552a, applies to records that are 
about individuals, but only if the records are in a system of records as 
defined in the Privacy Act. Requests from individuals for records about 
themselves which are contained in an OGE system of records will be 
processed under the provisions of the Privacy Act as well as the FOIA. 
OGE will not deny access by a first party to a record under the FOIA or 
the Privacy Act unless the record is not available to that individual 
under both the Privacy Act and the FOIA.
    (c) Records available through routine distribution procedures. When 
the record requested includes material published and offered for sale 
(e.g., by the Superintendent of Documents, Government Printing Office) 
or which is available to the public through an established distribution 
system (such as that of the National Technical Information Service of 
the Department of Commerce), OGE will explain how the record may be 
obtained through those channels. If the requester, after having been 
advised of such alternative access, asks for regular FOIA processing 
instead, OGE will provide the record in accordance with its usual FOIA 
procedures under this part.



Sec. 2604.103  Definitions.

    As used in this part,
    Agency has the meaning given in 5 U.S.C. 551(1) and 5 U.S.C. 552(f).
    Business information means trade secrets or other commercial or 
financial information, provided to the Office by a submitter, which 
arguably is protected from disclosure under Exemption 4 of the Freedom 
of Information Act.
    Business submitter means any person who provides business 
information, directly or indirectly, to the Office and who has a 
proprietary interest in the information.
    Commercial use means, when referring to a request, that the request 
is from, or on behalf of one who seeks information for a use or purpose 
that furthers the commercial, trade, or profit interests of the 
requester or of a person on whose behalf the request is made. Whether a 
request is for a commercial use depends on the purpose of the request 
and the use to which the records will be put. When a request is from a 
representative of the news media, a purpose or use supporting the 
requester's news dissemination function is not a commercial use.
    Direct costs means those expenditures actually incurred in searching 
for and duplicating (and, in the case of commercial use requesters, 
reviewing) records to respond to a FOIA request. Direct costs include 
the salary of the employee performing the work and the cost of operating 
duplicating machinery. Not included in direct costs are overhead 
expenses such as costs of space and heating or lighting of the facility 
in which the records are stored.
    Duplication means the process of making a copy of a record. Such 
copies include paper copy, microform, audio-visual materials, and 
magnetic tapes, cards, and discs.
    Educational institution means a preschool, elementary or secondary 
school, institution of undergraduate or graduate higher education, or 
institute of professional or vocational education, which operates a 
program of scholarly research.

[[Page 456]]

    FOIA Officer means the OGE employee designated to handle various 
initial FOIA matters, including requests and related matters such as 
fees.
    Freedom of Information Act or FOIA means 5 U.S.C. 552.
    He, his and him include she, hers and her.
    Noncommercial scientific institution means an institution that is 
not operated solely for purposes of furthering its own or someone else's 
business, trade, or profit interests, and that is operated for purposes 
of conducting scientific research the results of which are not intended 
to promote any particular product or industry.
    Office or OGE means the United States Office of Government Ethics.
    Person has the meaning given in 5 U.S.C. 551(2).
    Records means any handwritten, typed, or printed documents (such as 
memoranda, books, brochures, studies, writings, drafts, letters, 
transcripts, and minutes) and documentary material in other forms (such 
as electronic documents, electronic mail, punchcards, magnetic tapes, 
cards or discs, paper tapes, audio or video recordings, maps, 
photographs, slides, microfilm and motion pictures) that are either 
created or obtained by the Office and are under Office control. It does 
not include objects or articles such as exhibits, models, equipment, and 
duplication machines or audiovisual processing materials.
    Representative of the news media means a person actively gathering 
information for an entity organized and operated to publish or broadcast 
news to the public. News media entities include television and radio 
broadcasters, publishers of periodicals who distribute their products to 
the general public or who make their products available for purchase or 
subscription by the general public, and entities that may disseminate 
news through other media, such as electronic dissemination of text. 
Freelance journalists will be considered as representatives of a news 
media entity if they can show a solid basis for expecting publication 
through such an entity. A publication contract is such a basis, and the 
requester's past publication record may show such a basis.
    Request means any request for records made pursuant to 5 U.S.C. 
552(a)(3).
    Requester means any person who makes a request for records to OGE.
    Review means the process of initially, or upon appeal (see Sec. 
2604.501(b)(3)), examining documents located in a response to a request 
to determine whether any portion of any document is permitted to be 
withheld. It also includes processing documents for disclosure, such as 
redacting portions which may be withheld. Review does not include time 
spent resolving general legal and policy issues regarding the 
application of exemptions.
    Search means the time spent looking for material manually or by 
automated means that is responsive to a request, including page-by-page 
or line-by-line identification of material within documents.
    Working days means calendar days, excepting Saturdays, Sundays, and 
legal public holidays.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28090, May 25, 1999; 66 
FR 3439, Jan. 16, 2001]



    Subpart B_FOIA Public Reading Room Facility and Web Site; Index 
                 Identifying Information for the Public



Sec. 2604.201  Public reading room facility and Web site.

    (a)(1) Location of public reading room facility. The Office of 
Government Ethics maintains a public reading room facility at its 
offices located at 1201 New York Avenue, NW., Suite 500, Washington, DC 
20005-3917. Persons desiring to utilize the reading room facility should 
contact the Office, in writing or by telephone at 202-208-8000 or FAX 
202-208-8037, to arrange a time to inspect the materials available 
there.
    (2) Web site. The records listed in paragraph (b) of this section, 
which are created on or after November 1, 1996, or which OGE is 
otherwise able to make electronically available (if feasible), along 
with the OGE FOIA and Public Records Guide and OGE's annual FOIA 
reports, are also available via OGE's Web site (Internet address: http:/
/www.usoge.gov).

[[Page 457]]

    (b) Records available. The Office of Government Ethics public 
reading room facility contains OGE records which are required by 5 
U.S.C. 552(a)(2) to be made available for public inspection and copying, 
including:
    (1) Any final opinions, as well as orders, made in the adjudication 
of cases;
    (2) Any statements of policy and interpretation which have been 
adopted by the agency and are not published in the Federal Register;
    (3) Any administrative staff manuals and instructions to staff that 
affect a member of the public, and which are not exempt from disclosure 
under section (b) of the FOIA;
    (4) Copies of records created by OGE that have been released to any 
person under subpart C of this part which, because of the nature of 
their subject matter, OGE determines have become or are likely to become 
the subject of subsequent requests for substantially the same records, 
together with a general index of such records; and
    (5) Current indexes providing identifying information for the public 
as to any matter which was issued, adopted or promulgated after July 4, 
1967, and is required by 5 U.S.C. 552(a)(2) to be made available or 
published.
    (c) Copying. The cost of copying information available in OGE's 
public reading room facility shall be imposed on a requester in 
accordance with the provisions of subpart E of this part.
    (d) OGE may delete from the copies of materials made available under 
this section any identifying details necessary to prevent a clearly 
unwarranted invasion of personal privacy. Any such deletions will be 
explained in writing and the extent of such deletions will be indicated 
on the portion of the records that are made available or published, 
unless the indication would harm an interest protected by the FOIA 
exemption pursuant to which the deletions are made. If technically 
feasible, the extent of any such deletions will be indicated at the 
place in the records where they are made.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28090, May 25, 1999]



Sec. 2604.202  Index identifying information for the public.

    (a) The Office of Government Ethics will maintain and make available 
for public inspection and copying a current index of the materials 
available at its public reading room facility which are required to be 
indexed under 5 U.S.C. 552(a)(2).
    (b) The Director of the Office of Government Ethics has determined 
that it is unnecessary and impracticable to publish quarterly or more 
frequently and distribute (by sale or otherwise) copies of each index 
and supplements thereto, as provided in 5 U.S.C. 552(a)(2). The Office 
will provide copies of such indexes upon request, at a cost not to 
exceed the direct cost of duplication and mailing, if sending records by 
other than ordinary mail.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28090, May 25, 1999]



        Subpart C_Production and Disclosure of Records Under FOIA



Sec. 2604.301  Requests for records.

    (a) Addressing requests. Requests for copies of records may be made 
in person or by telephone, 202-208-8000, or FAX, 202-208-8037, during 
normal business hours at the Office of Government Ethics, 1201 New York 
Avenue, NW., Suite 500, Washington, DC 20005-3917 or by mail addressed 
to the FOIA Officer of OGE. Although oral requests may be honored, a 
requester generally will be asked to submit his request under the FOIA 
in writing. In the case of a written request, the envelope containing 
the request and the letter itself should both clearly indicate that the 
subject is a Freedom of Information Act request.
    (b) Description of records. Each request must reasonably describe 
the desired records in sufficient detail to enable Office personnel to 
locate the records with a reasonable amount of effort. A request for a 
specific category of records will be regarded as fulfilling this 
requirement if it enables responsive records to be identified by a 
technique or process that is not unreasonably burdensome or disruptive 
of Office operations.

[[Page 458]]

    (1) Wherever possible, a request should include specific information 
about each record sought, such as the date, title or name, author, 
recipient, and subject matter of the record.
    (2) If the FOIA Officer determines that a request does not 
reasonably describe the records sought, he will either advise the 
requester what additional information is needed to locate the record, or 
otherwise state why the request is insufficient. The FOIA Officer will 
also extend to the requester an opportunity to confer with Office 
personnel with the objective of reformulating the request in a manner 
which will meet the requirements of this section.
    (c) Agreement to pay fees. The filing of a request under this 
subpart will be deemed to constitute an agreement by the requester to 
pay all applicable fees charged under subpart E of this part, up to 
$25.00, unless a waiver of fees is sought. The request may also specify 
a limit on the amount the requester is willing to spend, or may indicate 
a willingness to pay an amount greater than $25.00, if applicable. In 
cases where a requester has been notified that actual or estimated fees 
may amount to more than $25.00, the request will be deemed not to have 
been received until the requester has agreed to pay the anticipated 
total fee.
    (d) Requests for records relating to corrective actions. No record 
developed pursuant to the authority of 5 U.S.C. app. (Ethics in 
Government Act of 1978, section 402(f)(2)) concerning the investigation 
of an employee for a possible violation of any provision relating to a 
conflict of interest shall be made available pursuant to this part 
unless the request for such information identifies the employee to whom 
the records relate and the subject matter of any alleged violation to 
which the records relate. Nothing in this subsection shall affect the 
application of subpart D of this part to any record so identified.
    (e) Seeking expedited processing. (1) A requester may seek expedited 
processing of a FOIA request if a compelling need for the requested 
records can be shown.
    (2) ``Compelling need'' means:
    (i) Circumstances in which failure to obtain copies of the requested 
records on an expedited basis could reasonably be expected to pose an 
imminent threat to the life or physical safety of an individual; or
    (ii) An urgency to inform the public about an actual or alleged 
Federal Government activity, if the request is made by a person 
primarily engaged in disseminating information.
    (3) A requester seeking expedited processing should so indicate in 
the initial request, and should state all the facts supporting the need 
to obtain the requested records quickly. The requester must also certify 
in writing that these facts are true and correct to the best of the 
requester's knowledge and belief.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28090, May 25, 1999]



Sec. 2604.302  Response to requests.

    (a) Response to initial request. The FOIA Officer is authorized to 
grant or deny any request for a record and to determine appropriate 
fees.
    (b) Referral to, or consultation with, another agency. When a 
requester seeks access to records that originated in another Government 
agency, OGE will normally refer the request to the other agency for 
response; alternatively, OGE may consult with the other agency in the 
course of deciding itself whether to grant or deny a request for access 
to such records. If OGE refers the request to another agency, it will 
notify the requester of the referral. If release of certain records may 
adversely affect United States relations with foreign governments, the 
Office will usually consult with the Department of State. A request for 
any records classified by some other agency will be referred to that 
agency for response.
    (c) Honoring form or format requests. In making any record available 
to a requester, OGE will provide the record in the form or format 
requested, if the record already exists or is readily reproducible by 
OGE in that form or format. If a form or format request cannot be 
honored, OGE will so inform the requester and provide a copy of a 
nonexempt record in its existing form or format or another convenient 
form or format which is readily reproducible.

[[Page 459]]

OGE will not, however, generally develop a completely new record (as 
opposed to providing a copy of an existing record in a readily 
reproducible new form or format, as requested) of information in order 
to satisfy a request.
    (d) Record cannot be located. If a requested record cannot be 
located from the information supplied, the FOIA Officer will so notify 
the requester in writing.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28090, May 25, 1999]



Sec. 2604.303  Form and content of responses.

    (a) Form of notice granting a request. After the FOIA Officer has 
made a determination to grant a request in whole or in part, the 
requester will be notified in writing. The notice shall describe the 
manner in which the record will be disclosed, whether by providing a 
copy of the record with the response or at a later date, or by making a 
copy of the record available to the requester for inspection at a 
reasonable time and place. The procedure for such an inspection may not 
unreasonably disrupt the operations of the Office. The response letter 
will also inform the requester in the response of any fees to be charged 
in accordance with the provisions of subpart E of this part.
    (b) Form of notice denying a request. When the FOIA Officer denies a 
request in whole or in part, he will so notify the requester in writing. 
The response will be signed by the FOIA Officer and will include:
    (1) The name and title or position of the person making the denial;
    (2) A brief statement of the reason or reasons for the denial, 
including the FOIA exemption or exemptions which the FOIA Officer has 
relied upon in denying the request;
    (3) When only a portion of a document is being withheld, the amount 
of information deleted and the FOIA exemption(s) justifying the deletion 
will generally be indicated on the copy of the released portion of the 
document. If technically feasible, such indications will appear at the 
place in the copy of the document where any deletion is made. If a 
document is withheld in its entirety, an estimate of the volume of the 
withheld material will generally be given. However, neither an 
indication of the amount of information deleted nor an estimation of the 
volume of material withheld will be included in a response if doing so 
would harm an interest protected by any of the FOIA exemptions pursuant 
to which the deletion or withholding is made; and
    (4) A statement that the denial may be appealed under Sec. 2604.304 
of this subpart, and a description of the requirements of that section.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28091, May 25, 1999]



Sec. 2604.304  Appeal of denials.

    (a) Right of appeal. If a request has been denied in whole or in 
part, the requester may appeal the denial to the General Counsel of the 
Office of Government Ethics, 1201 New York Avenue, NW., Suite 500, 
Washington, DC 20005-3917.
    (b) Letter of appeal. The appeal must be in writing and must be sent 
within 30 days of receipt of the denial letter. An appeal should include 
a copy of the initial request, a copy of the letter denying the request 
in whole or in part, and a statement of the circumstances, reasons or 
arguments advanced in support of disclosure of the request for the 
record. Both the envelope and the letter of appeal must be clearly 
marked ``Freedom of Information Act Appeal.''
    (c) Action on appeal. The disposition of an appeal will be in 
writing and will constitute the final action of the Office on a request. 
A decision affirming in whole or in part the denial of a request will 
include a brief statement of the reason or reasons for affirmance, 
including each FOIA exemption relied on. If the denial of a request is 
reversed in whole or in part on appeal, the request will be processed 
promptly in accordance with the decision on appeal.
    (d) Judicial review. If the denial of the request for records is 
upheld in whole or in part, the Office will notify the person making the 
request of his right to seek judicial review under 5 U.S.C. 552(a)(4).

[60 FR 10007, Feb. 23, 1995, as amended at 66 FR 3439, Jan. 16, 2001]

[[Page 460]]



Sec. 2604.305  Time limits.

    (a)(1) Initial request. Following receipt of a request for records, 
the FOIA Officer will determine whether to comply with the request and 
will notify the requester in writing of his determination within 20 
working days.
    (2) Request for expedited processing. When a request for expedited 
processing under Sec. 2604.301(e) is received, the FOIA Officer will 
respond within ten calendar days from the date of receipt of the 
request, stating whether or not the request for expedited processing has 
been granted. If the request for expedited processing is denied, any 
appeal of that decision will be acted upon expeditiously.
    (b) Appeal. A written determination on an appeal submitted in 
accordance with Sec. 2604.304 will be issued within 20 working days 
after receipt of the appeal.
    (c) Extension of time limits. The time limits specified in either 
paragraph (a) or (b) of this section may be extended in unusual 
circumstances up to a total of 10 working days, after written notice to 
the requester setting forth the reasons for the extension and the date 
on which a determination is expected to be made.
    (d) For the purposes of paragraph (c) of this section, unusual 
circumstances means that there is a need to:
    (1) Search for and collect records from archives;
    (2) Search for, collect, and appropriately examine a voluminous 
amount of separate and distinct records which are demanded in a single 
request; or
    (3) Consult with another agency having a substantial interest in the 
determination of the request, or consult with various OGE components 
that have substantial subject matter interest in the records requested.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28091, May 25, 1999]



                     Subpart D_Exemptions Under FOIA



Sec. 2604.401  Policy.

    (a) Policy on application of exemptions. Section 552(b) of the 
Freedom of Information Act contains nine exemptions to the mandatory 
disclosure of records. A requested record will not be withheld from 
inspection or copying unless it comes within one of the classes of 
records exempted by 5 U.S.C. 552. In making its determination on 
withholding, OGE will consider whether another statute, Executive order 
or regulation prohibits release or, if not, whether there is a need in 
the public interest to withhold material which is otherwise exempt under 
FOIA.
    (b) Pledge of confidentiality. Information obtained from any 
individual or organization, furnished in reliance on a provision for 
confidentiality authorized by applicable statute, Executive order or 
regulation, will not be disclosed to the extent it can be withheld under 
one of the exemptions. However, this paragraph does not itself authorize 
the giving of any pledge of confidentiality by any officer or employee 
of the Office of Government Ethics.
    (c) Exception for law enforcement information. The Office may treat 
records compiled for law enforcement purposes as not subject to the 
requirements of the Freedom of Information Act when:
    (1) The investigation or proceeding involves a possible violation of 
criminal law;
    (2) There is reason to believe that the subject of the investigation 
or proceeding is unaware of its pendency; and
    (3) The disclosure of the existence of the records could reasonably 
be expected to interfere with the enforcement proceedings.
    (d) Partial application of exemptions. Any reasonably segregable 
portion of a record will be provided to any person requesting the record 
after deletion of the portions which are exempt under this subpart.



Sec. 2604.402  Business information.

    (a) In general. Business information provided to the Office of 
Government Ethics by a submitter will not be disclosed pursuant to a 
Freedom of Information Act request except in accordance with this 
section.
    (b) Designation of business information. Submitters of business 
information should use good-faith efforts to designate, by appropriate 
markings, either at the time of submission or at a reasonable time 
thereafter, those portions of their submissions which they deem

[[Page 461]]

to be protected under Exemption 4 of the FOIA (5 U.S.C. 552(b)(4)). Any 
such designation will expire 10 years after the records were submitted 
to the Government, unless the submitter requests, and provides 
reasonable justification for, a designation period of longer duration.
    (c) Predisclosure notification. The FOIA Officer will provide a 
submitter with prompt written notice of a FOIA request regarding its 
business information if:
    (1) The information has been designated by the submitter as 
information deemed protected from disclosure under Exemption 4 of the 
FOIA; or
    (2) The FOIA Officer has reason to believe that the information may 
be protected from disclosure under Exemption 4 of the FOIA. Such written 
notice shall either describe the exact nature of the business 
information requested or provide copies of the records containing the 
business information. The requester also shall be notified that notice 
and an opportunity to object are being provided to a submitter.
    (d) Opportunity to object to disclosure. A submitter has five 
working days from receipt of the predisclosure notification to provide a 
written statement of any objection to disclosure. Such statement shall 
specify all the grounds for withholding any of the information under any 
exemption of the FOIA and, in the case of Exemption 4, shall demonstrate 
why the information is deemed to be a trade secret or commercial or 
financial information that is privileged or confidential. Information 
provided by a submitter pursuant to this paragraph may itself be subject 
to disclosure under the FOIA.
    (e) Notice of intent to disclose. The FOIA Officer will consider all 
objections raised by a submitter and specific grounds for nondisclosure 
prior to determining whether to disclose business information. Whenever 
the FOIA Officer decides to disclose business information over the 
objection of a submitter, he will send the submitter a written notice at 
least 10 working days before the date of disclosure containing:
    (1) A statement of the reasons why the submitter's objections were 
not sustained;
    (2) A copy of the records which will be disclosed or a written 
description of the records; and
    (3) A specified disclosure date. The requester shall also be 
notified of the FOIA Officer's determination to disclose records over a 
submitter's objections.
    (f) Notice of FOIA lawsuit. Whenever a requester brings suit seeking 
to compel disclosure of business information, the FOIA Officer shall 
promptly notify the submitter.
    (g) Exceptions to predisclosure notification. The notice 
requirements in paragraph (c) of this section do not apply if:
    (1) The FOIA Officer determines that the information should not be 
disclosed;
    (2) The information has been published previously or has been 
officially made available to the public;
    (3) Disclosure of the information is required by law (other than 5 
U.S.C. 552); or
    (4) The designation made by the submitter in accordance with 
paragraph (b) of this section appears obviously frivolous; except that, 
in such a case, the FOIA Officer will provide the submitter with written 
notice of any final decision to disclose business information within a 
reasonable number of days prior to a specified disclosure date.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28091, May 25, 1999]



                       Subpart E_Schedule of Fees



Sec. 2604.501  Fees to be charged--general.

    (a) Policy. Fees shall be assessed according to the schedule 
contained in paragraph (b) of this section and the category of 
requesters described in Sec. 2604.502 for services rendered in 
responding to and processing requests for records under subpart C of 
this part. All fees shall be charged to the requester, except where the 
charging of fees is limited under Sec. 2604.503(a) and (b) or where a 
waiver or reduction of fees is granted under Sec. 2604.503(c). 
Requesters shall pay fees by check or money order made payable to the 
Treasury of the United States.

[[Page 462]]

    (b) Types of charges. The types of charges that may be assessed in 
connection with the production of records in response to a FOIA request 
are as follows:
    (1) Searches--(i) Manual searches for records. Whenever feasible, 
the Office will charge at the salary rate (i.e., basic pay plus 16%) of 
the employee making the search. However, where a homogeneous class of 
personnel is used exclusively in a search (e.g., all clerical time or 
all professional time) the Office will charge $11.00 per hour for 
clerical time and $22.00 per hour for professional time. Charges for 
search time will be billed by fifteen minute segments.
    (ii) Computer searches for records. Requesters will be charged the 
actual direct cost of conducting a search using existing programming. 
These direct costs shall include the cost of operating a central 
processing unit for that portion of operating time that is directly 
attributable to searching for records responsive to a request, as well 
as the cost of operator/programmer salary apportionable to the search. 
The Office will not alter or develop programming to conduct a search.
    (iii) Unproductive searches. The Office will charge search fees even 
if no records are found which are responsive to the request, or if the 
records found are exempt from disclosure.
    (2) Duplication. The standard copying charge for documents in paper 
copy is $.15 per page. When responsive information is provided in a 
format other than paper copy, such as in the form of computer tapes and 
discs, the requester may be charged the direct costs of the tape, disc, 
or whatever medium is used to produce the information, as well as any 
related reproduction costs.
    (3) Review. Costs associated with the review of documents, as 
defined in Sec. 2604.103, will be charged at the salary rate (i.e., 
basic pay plus 16%) of the employee conducting the review. Except as 
noted below, charges may be assessed only for review at the initial 
level, i.e., the review undertaken the first time the documents are 
analyzed to determine the applicability of specific exemptions to a 
particular record or portion of the records. A requester will not be 
charged for review at the administrative appeal level concerning the 
applicability of an exemption already applied at the initial level. 
However, when a record has been withheld pursuant to an exemption which 
is subsequently determined not to apply and the record is reviewed again 
at the appeal level to determine the potential applicability of other 
exemptions, the costs of such additional review may be assessed.
    (4) Other services and materials. Where the Office elects, as a 
matter of administrative discretion, to comply with a request for a 
special service or materials, such as certifying that records are true 
copies or sending records by special methods, the actual direct costs of 
providing the service or materials will be charged.

[60 FR 10007, Feb. 23, 1995, as amended at 64 FR 28091, May 25, 1999]



Sec. 2604.502  Fees to be charged--categories of requesters.

    (a) Fees for various requester categories. The paragraphs below 
state, for each category of requester, the type of fees generally 
charged by the Office. However, for each of these categories, the fees 
may be limited, waived or reduced in accordance with the provisions set 
forth in Sec. 2604.503. In determining whether a requester belongs in 
any of the following categories, the Office will determine the use to 
which the requester will put the documents requested. If the Office has 
reasonable cause to doubt the use to which the requester will put the 
records sought, or where the use is not clear from the request itself, 
the Office will seek clarification before assigning the request to a 
specific category.
    (b) Commercial use requester. The Office will charge the full costs 
of search, review, and duplication. Commercial use requesters are not 
entitled to two hours of free search time or 100 free pages of 
reproduction as described in Sec. 2604.503(a); however, the de minimis 
fees provision of Sec. 2604.503(b) does apply to such requesters.
    (c) Educational and noncommercial scientific institutions and news 
media. If the request is from an educational institution or a 
noncommercial scientific institution, operated for scholarly or 
scientific research, or a representative of

[[Page 463]]

the news media, and the request is not for a commercial use, the Office 
will charge only for duplication of documents, excluding charges for the 
first 100 pages.
    (d) All other requesters. If the request is not one described in 
paragraph (b) or (c) of this section, the Office will charge the full 
and direct costs of searching for and reproducing records that are 
responsive to the request, excluding the first 100 pages of duplication 
and the first two hours of search time.



Sec. 2604.503  Limitations on charging fees.

    (a) In general. Except for requesters seeking records for a 
commercial use as described in Sec. 2604.502(b), the Office will 
provide, without charge, the first 100 pages of duplication and the 
first two hours of search time, or their cost equivalent.
    (b) De minimis fees. The Office will not assess fees for individual 
requests if the total charge would be $10.00 or less.
    (c) Waiver or reduction of fees. Records responsive to a request 
under 5 U.S.C. 552 will be furnished without charge or at a reduced 
charge where the Office determines, based upon information provided by a 
requester in support of a fee waiver request, that disclosure of the 
requested information is in the public interest because it is likely to 
contribute significantly to public understanding of the operations or 
activities of the Government and is not primarily in the commercial 
interest of the requester. Requests for a waiver or reduction of fees 
will be considered on a case-by-case basis.
    (1) In determining whether disclosure is in the public interest 
because it is likely to contribute significantly to public understanding 
of the operations or activities of the Government, the Office will 
consider the following factors:
    (i) The subject of the request: Whether the subject of the requested 
records concerns the operations or activities of the Government. The 
subject matter of the requested records, in the context of the request, 
must specifically and directly concern identifiable operations or 
activities of the Federal Government. Furthermore, the records must be 
sought for their informative value with respect to those Government 
operations or activities;
    (ii) The informative value of the information to be disclosed: 
Whether the information is likely to contribute to an understanding of 
Government operations or activities. The disclosable portions of the 
requested records must be meaningfully informative on specific 
Government operations or activities in order to hold potential for 
contributing to increased public understanding of those operations and 
activities. The disclosure of information which is already in the public 
domain, in either a duplicative or substantially identical form, would 
not be likely to contribute to such understanding, as nothing new would 
be added to the public record;
    (iii) The contribution to an understanding of the subject by the 
public likely to result from disclosure: Whether disclosure of the 
requested information will contribute to public understanding. The 
disclosure must contribute to the understanding of the public at large, 
as opposed to the individual understanding of the requester or a narrow 
segment of interested persons. A requester's identity and 
qualifications--e.g., expertise in the subject area and ability and 
intention to convey information to the general public--will be 
considered; and
    (iv) The significance of the contribution to public understanding: 
Whether the disclosure is likely to contribute significantly to public 
understanding of Government operations or activities. The public's 
understanding of the subject matter in question, as compared to the 
level of public understanding existing prior to the disclosure, must be 
likely to be significantly enhanced by the disclosure.
    (2) In determining whether disclosure of the requested information 
is not primarily in the commercial interest of the requester, the Office 
will consider the following factors:
    (i) The existence and magnitude of a commercial interest: Whether 
the requester has a commercial interest that would be furthered by the 
requested disclosure. The Office will consider all commercial interests 
of the requester, or any person on whose behalf the requester may be 
acting, which would be furthered by the requested disclosure.

[[Page 464]]

In assessing the magnitude of identified commercial interests, 
consideration will be given to the effect that the information disclosed 
would have on those commercial interests; and
    (ii) The primary interest in disclosure: Whether the magnitude of 
the identified commercial interest of the requester is sufficiently 
large, in comparison with the public interest in disclosure, that 
disclosure is primarily in the commercial interest of the requester. A 
fee waiver or reduction is warranted only where the public interest can 
fairly be regarded as greater in magnitude than the requester's 
commercial interest in disclosure. The Office will ordinarily presume 
that, where a news media requester has satisfied the public interest 
standard, the public interest will be served primarily by disclosure to 
that requester. Disclosure to data brokers and others who compile and 
market Government information for direct economic return will not be 
presumed to primarily serve the public interest.
    (3) Where only a portion of the requested record satisfies the 
requirements for a waiver or reduction of fees under this paragraph, a 
waiver or reduction shall be granted only as to that portion.
    (4) A request for a waiver or reduction of fees must accompany the 
request for disclosure of records, and should include:
    (i) A clear statement of the requester's interest in the documents;
    (ii) The proposed use of the documents and whether the requester 
will derive income or other benefit from such use;
    (iii) A statement of how the public will benefit from release of the 
requested documents; and
    (iv) If specialized use of the documents is contemplated, a 
statement of the requester's qualifications that are relevant to the 
specialized use.
    (5) A requester may appeal the denial of a request for a waiver or 
reduction of fees in accordance with the provisions of Sec. 2604.304.



Sec. 2604.504  Miscellaneous fee provisions.

    (a) Notice of anticipated fees in excess of $25.00. Where the Office 
determines or estimates that the fees to be assessed under this section 
may amount to more than $25.00, the Office shall notify the requester as 
soon as practicable of the actual or estimated amount of fees, unless 
the requester has indicated in advance his willingness to pay fees as 
high as those anticipated. Where a requester has been notified that the 
actual or estimated fees may exceed $25.00, the request will be deemed 
not to have been received until the requester has agreed to pay the 
anticipated total fee. A notice to the requester pursuant to this 
paragraph will include the opportunity to confer with Office personnel 
in order to reformulate the request to meet the requester's needs at a 
lower cost.
    (b) Aggregating requests. A requester may not file multiple 
requests, each seeking portions of a document or documents in order to 
avoid the payment of fees. Where there is reason to believe that a 
requester or group of requesters acting in concert, is attempting to 
divide a request into a series of requests for the purpose of evading 
the assessment of fees, the Office may aggregate the requests and charge 
accordingly. The Office will presume that multiple requests of this type 
made within a 30-day period have been made in order to evade fees. 
Multiple requests regarding unrelated matters will not be aggregated.
    (c) Advance payments. An advance payment before work is commenced or 
continued will not be required unless:
    (1) The Office estimates or determines that the total fee to be 
assessed under this section is likely to exceed $250.00. When a 
determination is made that the allowable charges are likely to exceed 
$250.00, the requester will be notified of the likely cost and will be 
required to provide satisfactory assurance of full payment where the 
requester has a history of prompt payment of FOIA fees, or will be 
required to submit an advance payment of an amount up to the full 
estimated charges in the case of requesters with no history of payment; 
or
    (2) A requester has previously failed to pay a fee charged in a 
timely fashion (i.e., within 30 days of the date of the billing). In 
such cases the requester may be required to pay the full amount owed 
plus any applicable interest as

[[Page 465]]

provided by paragraph (e) of this section, and to make an advance 
payment of the full amount of the estimated fee before the Office begins 
to process a new request.
    (3) When the Office requests an advance payment of fees, the 
administrative time limits described in subsection (a)(6) of the FOIA 
will begin to run only after the Office has received the advance 
payment.
    (d) Billing and payment. Normally the Office will require a 
requester to pay all fees before furnishing the requested records. 
However, the Office may send a bill along with, or following the 
furnishing of records, in cases where the requester has a history of 
prompt payment.
    (e) Interest charges. Interest charges on an unpaid bill may be 
assessed starting on the 31st day following the day on which the billing 
was sent. Interest shall be at the rate prescribed in 31 U.S.C. 3717 and 
shall accrue from the date of billing. To collect unpaid bills, the 
Office will follow the provisions of the Debt Collection Act of 1982, as 
amended (96 Stat. 1749 et seq.) including the use of consumer reporting 
agencies, collection agencies, and offset.



                    Subpart F_Annual OGE FOIA Report

    Source: 64 FR 28091, May 25, 1999, unless otherwise noted.



Sec. 2604.601  Electronic posting and submission of annual OGE FOIA report.

    On or before February 1 of each year, OGE shall electronically post 
on its Web site and submit to the Office of Information and Privacy at 
the United States Department of Justice a report of its activities 
relating to the Freedom of Information Act (FOIA) during the preceding 
fiscal year.



Sec. 2604.602  Contents of annual OGE FOIA report.

    (a) The Office of Government Ethics will include in its annual FOIA 
report the following information for the preceding fiscal year:
    (1) The number of FOIA requests for records pending before OGE as of 
the end of the fiscal year;
    (2) The median number of calendar days that such requests had been 
pending before OGE as of that date;
    (3) The number of FOIA requests for records received by OGE;
    (4) The number of FOIA requests that OGE processed;
    (5) The median number of calendar days taken by OGE to process 
different types of requests;
    (6) The number of determinations made by OGE not to comply with FOIA 
requests in full or in part;
    (7) The reasons for each such determination;
    (8) A complete list of all statutes upon which OGE relies to 
authorize withholding of information under FOIA Exemption 3, 5 U.S.C. 
552(b)(3);
    (9) A description of whether a court has upheld the decision of the 
agency to withhold information under each such statute;
    (10) A concise description of the scope of any information withheld 
under each such statute;
    (11) The number of administrative appeals made by persons under 5 
U.S.C. 552(a)(6);
    (12) The result of such appeals;
    (13) The reason for the action upon each appeal that results in a 
denial of information;
    (14) The total amount of fees collected by OGE for processing 
requests;
    (15) The number of full-time staff and part-time/occasional staff 
(in estimated work years) of OGE devoted to processing requests for 
records under the FOIA; and
    (16) The estimated total amount expended by OGE for processing such 
requests.
    (b) In addition, OGE will include in the report such additional 
information about its FOIA activities as is appropriate and useful in 
accordance with Justice Department guidance and as otherwise determined 
by OGE.



  Subpart G_Fees for the Reproduction and Mailing of Public Financial 
                           Disclosure Reports



Sec. 2604.701  Policy.

    Fees for the reproduction and mailing of public financial disclosure 
reports (SF 278s) requested pursuant to

[[Page 466]]

section 105 of the Ethics in Government Act of 1978, as amended, and 
Sec. 2634.603 of this chapter shall be assessed according to the 
schedule contained in Sec. 2604.702. Requesters shall pay fees by check 
or money order made payable to the Treasury of the United States. Except 
as provided in Sec. 2604.702(d), nothing concerning fees in subpart E 
of this part supersedes the charges set forth in this subpart for 
records covered in this subpart.



Sec. 2604.702  Charges.

    (a) Duplication. Except as provided in paragraph (c) of this 
section, copies of public financial disclosure reports (SF 278s) 
requested pursuant to section 105 of the Ethics in Government Act of 
1978, as amended, and Sec. 2634.603 of this chapter will be provided 
upon payment of $.03 per page furnished.
    (b) Mailing. Except as provided in paragraph (c) of this section, 
the actual direct cost of mailing public financial disclosure reports 
will be charged for all forms requested. Where the Office elects to 
comply, as a matter of administrative discretion, with a request for 
special mailing services, the actual direct cost of such service will be 
charged.
    (c) De minimis fees. The Office will not assess fees for individual 
requests if the total charge would be $10.00 or less.
    (d) Miscellaneous fee provisions. The miscellaneous fee provisions 
set forth in Sec. 2604.504 apply to requests for public financial 
disclosure reports pursuant to Sec. 2634.603 of this chapter.



PART 2606_PRIVACY ACT RULES--Table of Contents




                      Subpart A_General Provisions

Sec.
2606.101 Purpose.
2606.102 Definitions.
2606.103 Systems of records.
2606.104 OGE and agency responsibilities.
2606.105 Rules for individuals seeking to ascertain if they are the 
          subject of a record.
2606.106 OGE employee Privacy Act rules of conduct and responsibilities.

        Subpart B_Access to Records and Accounting of Disclosures

2606.201 Requests for access.
2606.202 OGE or other agency action on requests.
2606.203 Granting access.
2606.204 Request for review of an initial denial of access.
2606.205 Response to a request for review of an initial denial of 
          access.
2606.206 Fees.
2606.207 Accounting of disclosures.

                     Subpart C_Amendment of Records

2606.301 Requests to amend records.
2606.302 OGE or other agency action on requests.
2606.303 Request for review of an initial refusal to amend a record.
2606.304 Response to a request for review of an initial refusal to 
          amend; disagreement statements.

    Authority: 5 U.S.C. 552a, 5 U.S.C. App. (Ethics in Government Act of 
1978).

    Source: 68 FR 27891, May 22, 2003, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2606.101  Purpose.

    This part sets forth the regulations of the Office of Government 
Ethics (OGE) implementing the Privacy Act of 1974, as amended (5 U.S.C. 
552a). It governs access, maintenance, disclosure, and amendment of 
records contained in OGE's executive branch Governmentwide and internal 
systems of records, and establishes rules of conduct for OGE employees 
who have responsibilities under the Act.



Sec. 2606.102  Definitions.

    For the purpose of this part, the terms listed below are defined as 
follows:
    Access means providing a copy of a record to, or allowing review of 
the original record by, the data subject or the requester's authorized 
representative, parent or legal guardian;
    Act means the Privacy Act of 1974, as amended, 5 U.S.C. 552a;
    Amendment means the correction, addition, deletion, or destruction 
of a record or specific portions of a record;
    Data subject means the individual to whom the information pertains 
and by whose name or other individual identifier the information is 
maintained or retrieved;
    He, his, and him include she, hers and her.

[[Page 467]]

    Office or OGE means the U.S. Office of Government Ethics;
    System manager means the Office or other agency official who has the 
authority to decide Privacy Act matters relative to a system of records;
    System of records means a group of any records containing personal 
information controlled and managed by OGE from which information is 
retrieved by the name of an individual or by some personal identifier 
assigned to that individual;
    Working day as used in calculating the date when a response is due 
means calendar days, excepting Saturdays, Sundays, and legal public 
holidays.



Sec. 2606.103  Systems of records.

    (a) Governmentwide systems of records. The Office of Government 
Ethics maintains two executive branch Governmentwide systems of records: 
the OGE/GOVT-1 system of records, comprised of Executive Branch 
Personnel Public Financial Disclosure Reports and Other Name-Retrieved 
Ethics Program Records; and the OGE/GOVT-2 system of records, comprised 
of Executive Branch Confidential Financial Disclosure Reports. These 
Governmentwide systems of records are maintained by OGE, and through 
Office delegations of authority, by Federal executive branch departments 
and agencies with regard to their own employees, applicants for 
employment, individuals nominated to a position requiring Senate 
confirmation, candidates for a position, and former employees.
    (b) OGE Internal systems of records. The Office of Government Ethics 
internal systems of records are under OGE's physical custody and control 
and are established and maintained by the Office on current and former 
OGE employees regarding matters relating to the internal management of 
the Office. These systems of records consist of the OGE/INTERNAL-1 
system, comprised of Pay, Leave and Travel Records; the OGE/INTERNAL-2 
system, comprised of Telephone Call Detail Records; the OGE/INTERNAL-3 
system, comprised of Grievance Records; the OGE/INTERNAL-4 system, 
comprised of Computer Systems Activity and Access Records; and the OGE/
INTERNAL-5 system, comprised of Employee Locator and Emergency 
Notification Records.



Sec. 2606.104  OGE and agency responsibilities.

    (a) The procedures in this part apply to:
    (1) All initial Privacy Act access and amendment requests regarding 
records contained in an OGE system of records.
    (2) Administrative appeals from an Office or agency denial of an 
initial request for access to, or to amend, records contained in an OGE 
system of records.
    (b) For records contained in an OGE Governmentwide system of 
records, each agency is responsible (unless specifically excepted by the 
Office) for responding to initial requests for access or amendment of 
records in its custody and administrative appeals of denials thereof.
    (c) For records and material of another agency that are in the 
custody of OGE, but not under its control or ownership, OGE may refer a 
request for the records to that other agency, consult with the other 
agency prior to responding, or notify the requester that the other 
agency is the proper agency to contact.



Sec. 2606.105  Rules for individuals seeking to ascertain if they are the 

subject of a record.

    An individual seeking to ascertain if any OGE system of records 
contains a record pertaining to him must follow the access procedures 
set forth at Sec. 2606.201(a) and (b).



Sec. 2606.106  OGE employee Privacy Act rules of conduct and 

responsibilities.

    Each OGE employee involved in the design, development, operation, or 
maintenance of any system of records, or in maintaining any record 
covered by the Privacy Act, shall comply with the pertinent provisions 
of the Act relating to the treatment of such information. Particular 
attention is directed to the following provisions of the Privacy Act:
    (a) 5 U.S.C. 552a(e)(7). The requirement to maintain in a system of 
records no record describing how any individual exercises rights 
guaranteed

[[Page 468]]

by the First Amendment of the Constitution of the United States unless 
expressly authorized by statute or by the individual about whom the 
record is maintained or unless pertinent to and within the scope of an 
authorized law enforcement activity.
    (b) 5 U.S.C. 552a(b). The requirement that no agency shall disclose 
any record which is contained in a system of records by any means of 
communication to any person or to another agency, except pursuant to a 
written request by, or with the prior written consent of, the individual 
to whom the record pertains, except under certain limited conditions 
specified in subsections (b)(1) through (b)(12) of the Privacy Act.
    (c) 5 U.S.C. 552a(e)(1). The requirement for an agency to maintain 
in its systems of records only such information about an individual as 
is relevant and necessary to accomplish a purpose of the agency required 
to be accomplished by statute or by Executive order.
    (d) 5 U.S.C. 552a(e)(2). The requirement to collect information to 
the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs.
    (e) 5 U.S.C. 552a(e)(3). The requirement to inform each individual 
asked to supply information to be maintained in a system of records the 
authority which authorizes the solicitation of the information and 
whether disclosure of such information is mandatory or voluntary; the 
principal purpose or purposes for which the information is intended to 
be used; the routine uses which may be made of the information; and the 
effects on the individual, if any, of not providing all or any part of 
the requested information.
    (f) 5 U.S.C. 552a(b) and (e)(10). The requirement to comply with 
established safeguards and procedures to ensure the security and 
confidentiality of records and to protect personal data from any 
anticipated threats or hazards to their security or integrity which 
could result in substantial harm, embarrassment, inconvenience, or 
unfairness to an individual on whom information is maintained in a 
system of records.
    (g) 5 U.S.C. 552a(c)(1), (c)(2) and (c)(3). The requirement to 
maintain an accounting of specified disclosures of personal information 
from systems of records in accordance with established Office 
procedures.
    (h) 5 U.S.C. 552a(e)(5) and (e)(6). The requirements to maintain all 
records in a system of records which are used by the agency in making 
any determination about an individual with such accuracy, relevance, 
timeliness, and completeness as is reasonably necessary to assure 
fairness to the individual in the determination; and to make reasonable 
efforts to assure that such records are accurate, complete, timely, and 
relevant for agency purposes, prior to disseminating any record about an 
individual to any person other than an agency (unless the dissemination 
is required by the Freedom of Information Act, 5 U.S.C. 552).
    (i) 5 U.S.C. 552a(d)(1), (d)(2) and (d)(3). The requirement to 
permit individuals to have access to records pertaining to themselves in 
accordance with established Office procedures and to have an opportunity 
to request that such records be amended.
    (j) 5 U.S.C. 552a(c)(4) and (d)(4). The requirement to inform any 
person or other agency about any correction or notation of dispute made 
by the agency in accordance with subsection (d) of the Act of any record 
that has been disclosed to the person or agency if an accounting of the 
disclosure was made; and, in any disclosure of information about which 
an individual has filed a statement of disagreement, to note clearly any 
portion of the record which is disputed and to provide copies of the 
statement (and if the agency deems it appropriate, copies of a concise 
statement of the reasons of the agency for not making the amendments 
requested) to persons or other agencies to whom the disputed record has 
been disclosed.
    (k) 5 U.S.C. 552a(n). The requirement for an agency not to sell or 
rent an individual's name or address, unless such action is specifically 
authorized by law.
    (l) 5 U.S.C. 552a(i). The criminal penalties to which an employee 
may be

[[Page 469]]

subject for failing to comply with certain provisions of the Privacy 
Act.



        Subpart B_Access to Records and Accounting of Disclosures



Sec. 2606.201  Requests for access.

    (a) Records in an OGE Governmentwide system of records. An 
individual requesting access to records pertaining to him in an OGE 
Governmentwide system of records should submit a written request, which 
includes the words ``Privacy Act Request'' on both the envelope and at 
the top of the request letter, to the appropriate system manager as 
follows:
    (1) Records filed directly with OGE by non-OGE employees: The Deputy 
Director, Office of Agency Programs, Office of Government Ethics, Suite 
500, 1201 New York Avenue, NW., Washington, DC 20005-3917;
    (2) Records filed with a Designated Agency Ethics Official (DAEO) or 
the head of a department or agency: The DAEO at the department or agency 
concerned; or
    (3) Records filed with the Federal Election Commission by candidates 
for President or Vice President: The General Counsel, Office of General 
Counsel, Federal Election Commission, 999 E Street, NW., Washington, DC 
20463.
    (b) Records in an OGE Internal System of Records. An individual 
requesting access to records pertaining to him in an OGE internal system 
of records should submit a written request, which includes the words 
``Privacy Act Request'' on both the envelope and at the top of the 
request letter, to the Deputy Director, Office of Administration and 
Information Management, Office of Government Ethics, Suite 500, 1201 New 
York Avenue, NW., Washington, DC 20005-3917.
    (c) Content of request. (1) A request should contain a specific 
reference to the OGE system of records from which access to the records 
is sought. Notices of OGE systems of records subject to the Privacy Act 
are published in the Federal Register, and copies of the notices are 
available on OGE's Web site at http://www.usoge.gov, or upon request 
from OGE's Office of General Counsel and Legal Policy. A biennial 
compilation of such notices also is made available online and published 
by the Office of Federal Register at the GPO Access Web site (http://
www.access.gpo.gov/su--docs/aces/PrivacyAct.shtml) in accordance with 5 
U.S.C. 552a(f) of the Act.
    (2) If the written inquiry does not refer to a specific system of 
records, it should include other information that will assist in the 
identification of the records for which access is being requested. Such 
information may include, for example, the individual's full name 
(including her maiden name, if pertinent), dates of employment, social 
security number (if any records in the system include this identifier), 
current or last place and date of Federal employment. If the request for 
access follows a prior request to determine if an individual is the 
subject of a record, the same identifying information need not be 
included in the request for access if a reference is made to that prior 
correspondence, or a copy of the response to that request is attached.
    (3) The request should state whether the requester wants a copy of 
the record, or wants to examine the record in person.



Sec. 2606.202  OGE or other agency action on requests.

    A response to a request for access should include the following:
    (a) A statement that there is a record or records as requested or a 
statement that there is not a record in the system of records;
    (b) The method of access (if a copy of all the records requested is 
not provided with the response);
    (c) The amount of any fees to be charged for copies of records under 
Sec. 2606.206 of this part or other agencies' Privacy Act regulations 
as referenced in that section;
    (d) The name, title, and telephone number of the official having 
operational control over the record; and
    (e) If the request is denied in whole or in part, or no record is 
found in the system, a statement of the reasons for the denial, or a 
statement that no record has been found, and notice of the procedures 
for appealing the denial or no record finding.

[[Page 470]]



Sec. 2606.203  Granting access.

    (a) The methods for allowing access to records, when such access has 
been granted by OGE or the other agency concerned are:
    (1) Examination in person in a designated office during the hours 
specified by OGE or the other agency;
    (2) Providing photocopies of the records; or
    (3) Transfer of records at the option of OGE or the other agency to 
another more convenient Federal facility.
    (b) When a requester has not indicated whether he wants a copy of 
the record, or wants to examine the record in person, the appropriate 
system manager may choose the means of granting access. However, the 
means chosen should not unduly impede the data subject's right of 
access. A data subject may elect to receive a copy of the records after 
having examined them.
    (c) Generally, OGE or the other agency concerned will not furnish 
certified copies of records. When copies are to be furnished, they may 
be provided as determined by OGE or the other agency concerned.
    (d) When the data subject seeks to obtain original documentation, 
the Office and the other agencies concerned reserve the right to limit 
the request to copies of the original records. Original records should 
be made available for review only in the presence of the appropriate 
system manager or his designee.

    Note to paragraph (d) of Sec. 2606.203:
    Section 2071(a) of title 18 of the United States Code makes it a 
crime to conceal, remove, mutilate, obliterate, or destroy any record 
filed in a public office, or to attempt to do so.

    (e) Identification requirements--(1) Access granted in person--(i) 
Current or former employees. Current or former employees requesting 
access to records pertaining to them in a system of records may, in 
addition to the other requirements of this section, and at the sole 
discretion of the official having operational control over the record, 
have their identity verified by visual observation. If the current or 
former employee cannot be so identified by the official having 
operational control over the records, adequate identification 
documentation will be required, e.g., an employee identification card, 
driver's license, passport, or other officially issued document with a 
picture of the person requesting access.
    (ii) Other than current or former employees. Individuals other than 
current or former employees requesting access to records pertaining to 
them in a system of records must produce adequate identification 
documentation prior to being granted access. The extent of the 
identification documentation required will depend on the type of records 
to be accessed. In most cases, identification verification will be 
accomplished by the presentation of two forms of identification with a 
picture of the person requesting access (such as a driver's license and 
passport). Any additional requirements are specified in the system 
notices published pursuant to subsection (e)(4) of the Act.
    (2) Access granted by mail. For records to be accessed by mail, the 
appropriate system manager shall, to the extent possible, establish 
identity by a comparison of signatures in situations where the data in 
the record is not so sensitive that unauthorized access could cause harm 
or embarrassment to the individual to whom they pertain. No 
identification documentation will be required for the disclosure to the 
data subject of information required to be made available to the public 
by 5 U.S.C. 552, the Freedom of Information Act. When, in the opinion of 
the system manager, the granting of access through the mail could 
reasonably be expected to result in harm or embarrassment if disclosed 
to a person other than the individual to whom the record pertains, a 
notarized statement of identity or some similar assurance of identity 
may be required.
    (3) Unavailability of identification documentation. If an individual 
is unable to produce adequate identification documentation, the 
individual will be required to sign a statement asserting identity and 
acknowledging that knowingly or willfully seeking or obtaining access to 
records about another person under false pretenses may result in a 
criminal fine of up to $5,000 under subsection (i)(3) of the Act. In 
addition, depending upon the sensitivity of the

[[Page 471]]

records sought to be accessed, the appropriate system manager or 
official having operational control over the records may require such 
further reasonable assurances as may be considered appropriate, e.g., 
statements of other individuals who can attest to the identity of the 
data subject. No verification of identity will be required of data 
subjects seeking access to records which are otherwise available to any 
person under 5 U.S.C. 552.
    (4) Inadequate identification. If the official having operational 
control over the records in a system of records determines that an 
individual seeking access has not provided sufficient identification 
documentation to permit access, the official shall consult with the 
appropriate system manager prior to denying the individual access. 
Whenever the system manager determines, in accordance with the 
procedures herein, that access will not be granted, the response will 
also include a statement of the procedures to obtain a review of the 
decision to deny access in accordance with Sec. 2606.205.
    (f) Access by the parent of a minor, or legal guardian. A parent of 
a minor, upon presenting suitable personal identification as otherwise 
provided under this section, may access on behalf of the minor any 
record pertaining to the minor in a system of records. A legal guardian, 
upon presentation of documentation establishing guardianship and 
suitable personal identification as otherwise provided under this 
section, may similarly act on behalf of a data subject declared to be 
incompetent due to physical or mental incapacity or age by a court of 
competent jurisdiction. Minors are not precluded from exercising on 
their own behalf rights given to them by the Privacy Act.
    (g) Accompanying individual. A data subject requesting access to his 
records in a system of records may be accompanied by another individual 
of the data subject's choice during the course of the examination of the 
record. The official having operational control of the record may 
require the data subject making the request to submit a signed statement 
authorizing the accompanying individual's access to the record.
    (h) Access to medical records. When a request for access involves 
medical or psychological records that the appropriate system manager 
believes requires special handling, the data subject should be advised 
that the material will be provided only to a physician designated by the 
data subject. Upon receipt of the designation and upon verification of 
the physician's identity as otherwise provided under this section, the 
records will be made available to the physician, who will disclose those 
records to the data subject.
    (i) Exclusion. Nothing in these regulations permits a data subject's 
access to any information compiled in reasonable anticipation of a civil 
action or proceeding (see subsection (d)(5) of the Act).
    (j) Maximum access. This regulation is not intended to preclude 
access by a data subject to records that are available to that 
individual under other processes, such as the Freedom of Information Act 
(5 U.S.C. 552) or the rules of civil or criminal procedure, provided 
that the appropriate procedures for requesting access thereunder are 
followed.



Sec. 2606.204  Request for review of an initial denial of access.

    (a)(1) A data subject may submit a written appeal of the decision by 
OGE or the other agency to deny an initial request for access to records 
or a no record response.
    (i) For records filed directly with OGE, the appeal must be 
submitted to the Director, Office of Government Ethics, Suite 500, 1201 
New York Avenue, NW., Washington, DC 20005-3917.
    (ii) For records in OGE's executive branch Governmentwide systems of 
records that are filed directly with an agency (including the Federal 
Election Commission) other than OGE, the appeal must be submitted to the 
Privacy Act access appeals official as specified in the agency's own 
Privacy Act regulations or the respective head of the agency concerned 
if it does not have any Privacy Act regulations.
    (2) The words ``Privacy Act Appeal'' should be included on the 
envelope and at the top of the letter of appeal.

[[Page 472]]

    (b) The appeal should contain a brief description of the records 
involved or copies of the correspondence from OGE or the agency in which 
the initial request for access was denied. The appeal should attempt to 
refute the reasons given by OGE or the other agency concerned in its 
decision to deny the initial request for access or the no record 
finding.



Sec. 2606.205  Response to a request for review of an initial denial of access.

    (a) If the OGE Director or agency reviewing official determines that 
access to the records should be granted, the response will state how 
access will be provided if the records are not included with the 
response.
    (b) Any decision that either partially or fully affirms the initial 
decision to deny access shall inform the requester of the right to seek 
judicial review of the decision in accordance with 5 U.S.C. 552a(g) of 
the Privacy Act.



Sec. 2606.206  Fees.

    (a) Fees for records filed with OGE--(1) Services for which fees 
will not be charged:
    (i) The search and review time expended by OGE to produce a record;
    (ii) The first copy of the records provided; or
    (iii) The Office of Government Ethics making the records available 
to be personally reviewed by the data subject.
    (2) Additional copies of records. When additional copies of records 
are requested, an individual may be charged $.15 per page.
    (i) Notice of anticipated fees in excess of $25.00. If the charge 
for these additional copies amounts to more than $25.00, the requester 
will be notified and payment of fees may be required before the 
additional copies are provided, unless the requester has indicated in 
advance his willingness to pay fees as high as those anticipated.
    (ii) Advance payments. An advance payment before additional copies 
of the records are made will be required if:
    (A) The Office estimates or determines that the total fee to be 
assessed under this section is likely to exceed $250.00. When a 
determination is made that the allowable charges are likely to exceed 
$250.00, the requester will be notified of the likely cost and will be 
required to provide satisfactory assurance of full payment where the 
requester has a history of prompt payment of Privacy Act fees, or will 
be required to submit an advance payment of an amount up to the full 
estimated charges in the case of requesters with no history of payment; 
or
    (B) The requester has previously failed to pay a Privacy Act fee 
charged in a timely fashion (i.e., within 30 days of the date of the 
billing). In such cases, the requester may be required to pay the full 
amount owed plus any applicable interest as provided by paragraph 
(a)(2)(iii) of this section, and to make an advance payment of the full 
amount of the estimated fee before the Office begins to process a new 
request.
    (iii) Interest charges. Interest charges on an unpaid bill may be 
assessed starting on the 31st day following the day on which the billing 
was sent. Interest shall be at the rate prescribed in 31 U.S.C. 3717 and 
shall accrue from the date of billing. To collect unpaid bills, the 
Office will follow the provisions of the Debt Collection Act of 1982, as 
amended (96 Stat. 1749 et seq.) and the Debt Collection Improvement Act 
of 1996 (110 Stat. 1321-358 et seq.), including the use of consumer 
reporting agencies, collection agencies, and offset.
    (iv) Remittance. Remittance should be made by either a personal 
check, bank draft or a money order that is payable to the Department of 
the Treasury of the United States.
    (b) Fees for records filed with agencies other than OGE. An agency 
shall apply its own Privacy Act fee schedule for records in OGE's 
executive branch Governmentwide systems that are filed directly with the 
agency. An agency that does not have a Privacy Act fee schedule may 
apply the fee schedule in this section.



Sec. 2606.207  Accounting of disclosures.

    (a) The Office of Government Ethics or the other agency concerned 
will maintain an accounting of disclosures in cases where records about 
the data subject are disclosed from OGE's system of records except--
    (1) When the disclosure is made pursuant to the Freedom of 
Information Act, as amended (5 U.S.C. 552); or

[[Page 473]]

    (2) When the disclosure is made to those officers and employees of 
OGE or the other agency which maintains the records who have a need for 
the records in the performance of their duties.
    (b) This accounting of disclosures will be retained for at least 
five years or for the life of the record, whichever is longer, and will 
contain the following information:
    (1) A brief description of the record disclosed;
    (2) The date, nature, and purpose for the disclosure; and
    (3) The name and address of the individual, agency, or other entity 
to whom the disclosure is made.
    (c) Under sections 102 and 105 of the Ethics in Government Act, 18 
U.S.C. 208(d) and 5 CFR parts 2634 and 2640 of OGE's executive branch 
regulations, a requester other than the data subject must submit a 
signed, written application on the OGE Form 201 or agency equivalent 
form to inspect or receive copies of certain records, such as SF 278 
Public Financial Disclosure Reports, Certificates of Divestiture, 18 
U.S.C. 208(b)(1) and (b)(3) waivers, and OGE certified qualified blind 
and diversified trust instruments and other publicly available qualified 
trust materials. The written application requests the name, occupation 
and address of the requester as well as lists the prohibitions on 
obtaining or using the records. These applications are used as the 
accounting of disclosures for these records.
    (d) Except for the accounting of a disclosure made under subsection 
(b)(7) of the Privacy Act for a civil or criminal law enforcement 
activity that is authorized by law, the accounting of disclosures will 
be made available to the data subject upon request in accordance with 
the access procedures of this part.



                     Subpart C_Amendment of Records



Sec. 2606.301  Requests to amend records.

    (a) Amendment request. A data subject seeking to amend a record or 
records that pertain to him in a system of records must submit his 
request in writing in accordance with the following procedures, unless 
this requirement is waived by the appropriate system manager. Records 
not subject to the Privacy Act will not be amended in accordance with 
these provisions.
    (b) Addresses--(1) Records in an OGE Governmentwide system of 
records. A request to amend a record in an OGE Governmentwide system of 
records should be sent to the appropriate system manager as follows:
    (i) Records filed directly with OGE by non-OGE employees: The Deputy 
Director, Office of Agency Programs, Office of Government Ethics, Suite 
500, 1201 New York Avenue, NW., Washington, DC 20005-3917;
    (ii) Records filed with a Designated Agency Ethics Official (DAEO) 
or the head of a department or agency: The DAEO at the department or 
agency concerned; or
    (iii) Records filed with the Federal Election Commission by 
candidates for President or Vice President: The General Counsel, Office 
of General Counsel, Federal Election Commission, 999 E Street, NW., 
Washington, DC 20463.
    (2) Records in an OGE internal system of records. A request to amend 
a record in an OGE internal system of records should include the words 
``Privacy Act Amendment Request'' on both the envelope and at the top of 
the request letter, and should be sent to the Deputy Director, Office of 
Administration and Information Management, Office of Government Ethics, 
Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917.
    (c) Contents of request. (1) A request to amend a record in an OGE 
Governmentwide system of records or an OGE internal system of records 
should include the words ``Privacy Act Amendment Request'' on both the 
envelope and at the top of the request letter.
    (2) The name of the system of records and a brief description of the 
record(s) proposed for amendment must be included in any request for 
amendment. In the event the request to amend the record(s) is the result 
of the data subject's having gained access to the record(s) in 
accordance with the provisions concerning access to records as set in 
subpart B of this part, copies of previous correspondence between the 
requester and OGE or the agency will

[[Page 474]]

serve in lieu of a separate description of the record.
    (3) The exact portion of the record(s) the data subject seeks to 
have amended should be indicated clearly. If possible, proposed 
alternative language should be set forth, or, at a minimum, the reasons 
why the data subject believes his record is not accurate, relevant, 
timely, or complete should be set forth with enough particularity to 
permit OGE or the other agency concerned not only to understand the data 
subject's basis for the request, but also to make an appropriate 
amendment to the record.
    (d) Burden of proof. The data subject has the burden of proof when 
seeking the amendment of a record. The data subject must furnish 
sufficient facts to persuade the appropriate system manager of the 
inaccuracy, irrelevance, untimeliness, or incompleteness of the record.
    (e) Identification requirement. When the data subject's identity has 
been previously verified pursuant to Sec. 2606.203, further 
verification of identity is not required as long as the communication 
does not suggest a need for verification. If the data subject's identity 
has not been previously verified, the appropriate system manager may 
require identification validation as described in Sec. 2606.203.



Sec. 2606.302  OGE or other agency action on requests.

    (a) Time limit for acknowledging a request for amendment. To the 
extent possible, OGE or the other agency concerned will acknowledge 
receipt of a request to amend a record or records within 10 working 
days.
    (b) Initial determination on an amendment request. The decision of 
OGE or the other agency in response to a request for amendment of a 
record in a system of records may grant in whole, or deny any part of 
the request to amend the record(s).
    (1) If OGE or the other agency concerned grants the request, the 
appropriate system manager will amend the record(s) and provide a copy 
of the amended record(s) to the data subject. Where an accounting of 
disclosure has been maintained, the system manager shall advise all 
previous recipients of the record that an amendment has been made and 
give the substance of the amendment. Where practicable, the system 
manager shall send a copy of the amended record to previous recipients.
    (2) If OGE or the other agency concerned denies the request in whole 
or in part, the reasons for the denial will be stated in the response 
letter. In addition, the response letter will state:
    (i) The name and address of the official with whom an appeal of the 
denial may be lodged; and
    (ii) A description of any other procedures which may be required of 
the data subject in order to process the appeal.



Sec. 2606.303  Request for review of an initial refusal to amend a record.

    (a)(1) A data subject may submit a written appeal of the initial 
decision by OGE or an agency denying a request to amend a record in an 
OGE system of records.
    (i) For records which are filed directly with OGE, the appeal must 
be submitted to the Director, Office of Government Ethics, Suite 500, 
1201 New York Avenue, NW., Washington, DC 20005-3917.
    (ii) For records which are filed directly with an agency (including 
the Federal Election Commission) other than OGE, the appeal must be 
submitted to the Privacy Act amendments appeals official as specified in 
the agency's own Privacy Act regulations, or to the respective head of 
the agency concerned if it does not have Privacy Act regulations.
    (2) The words ``Privacy Act Appeal'' should be included on the 
envelope and at the top of the letter of the appeal.
    (b) The request for review should contain a brief description of the 
record(s) involved or copies of the correspondence from OGE or the 
agency in which the request to amend was denied, and the reasons why the 
data subject believes that the disputed information should be amended.



Sec. 2606.304  Response to a request for review of an initial refusal to 

amend; disagreement statements.

    (a) The OGE Director or agency reviewing official should make a 
final determination in writing not later than

[[Page 475]]

30 days from the date the appeal was received. The 30-day period may be 
extended for good cause. Notice of the extension and the reasons 
therefor will be sent to the data subject within the 30-day period.
    (b) If the OGE Director or agency reviewing official determines that 
the record(s) should be amended in accordance with the data subject's 
request, the OGE Director or agency reviewing official will take the 
necessary steps to advise the data subject, and to direct the 
appropriate system manager:
    (1) To amend the record(s), and
    (2) To notify previous recipients of the record(s) for which there 
is an accounting of disclosure that the record(s) have been amended.
    (c) If the appeal decision does not grant in full the request for 
amendment, the decision letter will notify the data subject that he may:
    (1) Obtain judicial review of the decision in accordance with the 
terms of the Privacy Act at 5 U.S.C. 552a(g); and
    (2) File a statement setting forth his reasons for disagreeing with 
the decision.
    (d)(1) A data subject's disagreement statement must be concise. The 
appropriate system manager has the authority to determine the 
``conciseness'' of the statement, taking into account the scope of the 
disagreement and the complexity of the issues.
    (2) In any disclosure of information about which an individual has 
filed a statement of disagreement, the appropriate system manager will 
clearly note any disputed portion(s) of the record(s) and will provide a 
copy of the statement to persons or other agencies to whom the disputed 
record or records has been disclosed and for whom an accounting of 
disclosure has been maintained. A concise statement of the reasons for 
not making the amendments requested may also be provided.



PART 2608_TESTIMONY BY OGE EMPLOYEES RELATING TO OFFICIAL INFORMATION AND 

PRODUCTION OF OFFICIAL RECORDS IN LEGAL PROCEEDINGS--Table of Contents




                      Subpart A_General Provisions

Sec.
2608.101 Scope and purpose.
2608.102 Applicability.
2608.103 Definitions.

      Subpart B_Requests for Testimony and Production of Documents

2608.201 General prohibition.
2608.202 Factors OGE will consider.
2608.203 Filing requirements for demands or requests for documents or 
          testimony.
2608.204 Service of subpoenas or requests.
2608.205 Processing demands or requests.
2608.206 Final determination.
2608.207 Restrictions that apply to testimony.
2608.208 Restrictions that apply to released records.
2608.209 Procedure when a decision is not made prior to the time a 
          response is required.
2608.210 Procedure in the event of an adverse ruling.

                       Subpart C_Schedule of Fees

2608.301 Fees.

                           Subpart D_Penalties

2608.401 Penalties.

    Authority: 5 U.S.C. App. (Sec. 401, Ethics in Government Act of 
1978); 31 U.S.C. 9701; 44 U.S.C. 3101-3107, 3301-3303a, 3308-3314.

    Source: 67 FR 35710, May 21, 2002, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2608.101  Scope and purpose.

    (a) This part sets forth policies and procedures you must follow 
when you submit a demand or request to an employee of the Office of 
Government Ethics (OGE) to produce official records and information, or 
provide testimony relating to official information, in connection with a 
legal proceeding. You must comply with these requirements when you 
request the release or disclosure of official records and information.

[[Page 476]]

    (b) The Office of Government Ethics intends these provisions to:
    (1) Promote economy and efficiency in its programs and operations;
    (2) Minimize the possibility of involving OGE in controversial 
issues not related to our functions;
    (3) Maintain OGE's impartiality among private litigants where OGE is 
not a named party; and
    (4) Protect sensitive, confidential information and the deliberative 
processes of OGE.
    (c) In providing for these requirements, OGE does not waive the 
sovereign immunity of the United States.
    (d) This part provides guidance for the internal operations of OGE. 
It does not create any right or benefit, substantive or procedural, that 
a party may rely upon in any legal proceeding against the United States.



Sec. 2608.102  Applicability.

    This part applies to demands and requests to employees for factual 
or expert testimony relating to official information, or for production 
of official records or information, in legal proceedings in which OGE is 
not a named party. However, it does not apply to:
    (a) Demands upon or requests for an OGE employee to testify as to 
facts or events that are unrelated to his or her official duties or that 
are unrelated to the functions of OGE;
    (b) Demands upon or requests for a former OGE employee to testify as 
to matters in which the former employee was not directly or materially 
involved while at the OGE;
    (c) Requests for the release of records under the Freedom of 
Information Act, 5 U.S.C. 552, or the Privacy Act, 5 U.S.C. 552a; and
    (d) Congressional demands and requests for testimony or records.



Sec. 2608.103  Definitions.

    The following definitions apply to this part:
    Demand means a subpoena, or an order or other command of a court or 
other competent authority, for the production, disclosure, or release of 
records or for the appearance and testimony of an OGE employee that is 
issued in a legal proceeding.
    General Counsel means the General Counsel of OGE or a person to whom 
the General Counsel has delegated authority under this part.
    Legal proceeding means any matter before a court of law, 
administrative board or tribunal, commission, administrative law judge, 
hearing officer, or other body that conducts a legal or administrative 
proceeding. Legal proceeding includes all phases of litigation.
    OGE means the U.S. Office of Government Ethics.
    OGE employee or employee means:
    (1)(i) Any current or former officer or employee of OGE;
    (ii) Any other individual hired through contractual agreement by or 
on behalf of OGE or who has performed or is performing services under 
such an agreement for OGE; and
    (iii) Any individual who served or is serving in any consulting or 
advisory capacity to OGE, whether formal or informal.
    (2) Provided, that this definition does not include persons who are 
no longer employed by OGE and who are retained or hired as expert 
witnesses or who agree to testify about general matters, matters 
available to the public, or matters with which they had no specific 
involvement or responsibility during their employment with OGE.
    Records or official records and information mean:
    (1) All documents and materials which are OGE agency records under 
the Freedom of Information Act, 5 U.S.C. 552;
    (2) All other documents and materials contained in OGE files; and
    (3) All other information or materials acquired by an OGE employee 
in the performance of his or her official duties or because of his or 
her official status.
    Request means any informal request, by whatever method, for the 
production of records and information or for testimony which has not 
been ordered by a court or other competent authority.
    Testimony means any written or oral statements, including 
depositions, answers to interrogatories, affidavits,

[[Page 477]]

declarations, interviews, and statements made by an individual in 
connection with a legal proceeding.



      Subpart B_Requests for Testimony and Production of Documents



Sec. 2608.201  General prohibition.

    No employee may produce official records and information or provide 
any testimony relating to official information in response to a demand 
or request without the prior, written approval of the General Counsel.



Sec. 2608.202  Factors OGE will consider.

    The General Counsel, in his or her sole discretion, may grant an 
employee permission to testify on matters relating to official 
information, or produce official records and information, in response to 
a demand or request. Among the relevant factors that the General Counsel 
may consider in making this decision are whether:
    (a) The purposes of this part are met;
    (b) Allowing such testimony or production of records would be 
necessary to prevent a miscarriage of justice;
    (c) OGE has an interest in the decision that may be rendered in the 
legal proceeding;
    (d) Allowing such testimony or production of records would assist or 
hinder OGE in performing its statutory duties or use OGE resources where 
responding to the demand or request will interfere with the ability of 
OGE employees to do their work;
    (e) Allowing such testimony or production of records would be in the 
best interest of OGE or the United States;
    (f) The records or testimony can be obtained from other sources;
    (g) The demand or request is unduly burdensome or otherwise 
inappropriate under the applicable rules of discovery or the rules of 
procedure governing the case or matter in which the demand or request 
arose;
    (h) Disclosure would violate a statute, Executive order or 
regulation;
    (i) Disclosure would reveal confidential, sensitive, or privileged 
information, trade secrets or similar, confidential commercial or 
financial information, otherwise protected information, or information 
which would otherwise be inappropriate for release;
    (j) Disclosure would impede or interfere with an ongoing law 
enforcement investigation or proceedings, or compromise constitutional 
rights;
    (k) Disclosure would result in OGE appearing to favor one litigant 
over another;
    (l) Disclosure relates to documents that were produced by another 
agency;
    (m) A substantial Government interest is implicated;
    (n) The demand or request is within the authority of the party 
making it; and
    (o) The demand or request is sufficiently specific to be answered.



Sec. 2608.203  Filing requirements for demands or requests for documents or testimony.

    You must comply with the following requirements whenever you issue 
demands or requests to an OGE employee for official records and 
information or testimony:
    (a) Your request must be in writing and must be submitted to the 
General Counsel. If you serve a subpoena on OGE or an OGE employee 
before submitting a written request and receiving a final determination, 
OGE will oppose the subpoena on grounds that your request was not 
submitted in accordance with this subpart.
    (b) Your written request must contain the following information:
    (1) The caption of the legal proceeding, docket number, and name and 
address of the court or other authority involved;
    (2) A copy of the complaint or equivalent document setting forth the 
assertions in the case and any other pleading or document necessary to 
show relevance;
    (3) A list of categories of records sought, a detailed description 
of how the information sought is relevant to the issues in the legal 
proceeding, and a specific description of the substance of the testimony 
or records sought;
    (4) A statement as to how the need for the information outweighs the 
need to maintain any confidentiality of the information and outweighs 
the burden on OGE to produce the records or provide testimony;
    (5) A statement indicating that the information sought is not 
available

[[Page 478]]

from another source, from other persons or entities, or from the 
testimony of someone other than an OGE employee, such as a retained 
expert;
    (6) If testimony is requested, the intended use of the testimony, a 
general summary of the desired testimony, and a showing that no document 
could be provided and used in lieu of testimony;
    (7) A description of all prior decisions, orders, or pending motions 
in the case that bear upon the relevance of the requested records or 
testimony;
    (8) The name, address, and telephone number of counsel to each party 
in the case; and
    (9) An estimate of the amount of time that the requester and other 
parties will require with each OGE employee for time spent by the 
employee to prepare for testimony, in travel, and for attendance in the 
legal proceeding.
    (c) The Office of Government Ethics reserves the right to require 
additional information to complete your request where appropriate.
    (d) Your request should be submitted at least 45 days before the 
date that records or testimony is required. Requests submitted in less 
than 45 days before records or testimony is required must be accompanied 
by a written explanation stating the reasons for the late request and 
the reasons for expedited processing.
    (e) Failure to cooperate in good faith to enable the General Counsel 
to make an informed decision may serve as the basis for a determination 
not to comply with your request.



Sec. 2608.204  Service of subpoenas or requests.

    Subpoenas or requests for official records or information or 
testimony must be served on the General Counsel, Office of Government 
Ethics, Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917.



Sec. 2608.205  Processing demands or requests.

    (a) After service of a demand or request to testify, the General 
Counsel will review the demand or request and, in accordance with the 
provisions of this subpart, determine whether, or under what conditions, 
to authorize the employee to testify on matters relating to official 
information and/or produce official records and information.
    (b) The Office of Government Ethics will process requests in the 
order in which they are received. Absent exigent or unusual 
circumstances, OGE will respond within 45 days from the date that we 
receive it. The time for response will depend upon the scope of the 
request.
    (c) The General Counsel may grant a waiver of any procedure 
described by this subpart where a waiver is considered necessary to 
promote a significant interest of OGE or the United States or for other 
good cause.



Sec. 2608.206  Final determination.

    The General Counsel makes the final determination on demands and 
requests to employees for production of official records and information 
or testimony. All final determinations are within the sole discretion of 
the General Counsel. The General Counsel will notify the requester and 
the court or other authority of the final determination, the reasons for 
the grant or denial of the demand or request, and any conditions that 
the General Counsel may impose on the release of records or information, 
or on the testimony of an OGE employee.



Sec. 2608.207  Restrictions that apply to testimony.

    (a) The General Counsel may impose conditions or restrictions on the 
testimony of OGE employees including, for example, limiting the areas of 
testimony or requiring the requester and other parties to the legal 
proceeding to agree that the transcript of the testimony will be kept 
under seal or will only be used or made available in the particular 
legal proceeding for which testimony was requested. The General Counsel 
may also require a copy of the transcript of testimony at the 
requester's expense.
    (b) The Office of Government Ethics may offer the employee's written 
declaration in lieu of testimony.
    (c) If authorized to testify pursuant to this part, an employee may 
testify as to facts within his or her personal

[[Page 479]]

knowledge, but, unless specifically authorized to do so by the General 
Counsel, the employee shall not:
    (1) Disclose confidential or privileged information; or
    (2) For a current OGE employee, testify as an expert or opinion 
witness with regard to any matter arising out of the employee's official 
duties or the functions of OGE unless testimony is being given on behalf 
of the United States (see also Sec. 2635.805 of this chapter).



Sec. 2608.208  Restrictions that apply to released records.

    (a) The General Counsel may impose conditions or restrictions on the 
release of official records and information, including the requirement 
that parties to the proceeding obtain a protective order or execute a 
confidentiality agreement to limit access and any further disclosure. 
The terms of the protective order or of a confidentiality agreement must 
be acceptable to the General Counsel. In cases where protective orders 
or confidentiality agreements have already been executed, OGE may 
condition the release of official records and information on an 
amendment to the existing protective order or confidentiality agreement.
    (b) If the General Counsel so determines, original OGE records may 
be presented for examination in response to a demand or request, but 
they are not to be presented as evidence or otherwise used in a manner 
by which they could lose their identity as official OGE records, nor are 
they to be marked or altered. In lieu of the original records, certified 
copies will be presented for evidentiary purposes (see 28 U.S.C. 1733).



Sec. 2608.209  Procedure when a decision is not made prior to the time a 

response is required.

    If a response to a demand or request is required before the General 
Counsel can make the determination referred to in Sec. 2608.201, the 
General Counsel, when necessary, will provide the court or other 
competent authority with a copy of this part, inform the court or other 
competent authority that the demand or request is being reviewed, and 
seek a stay of the demand or request pending a final determination.



Sec. 2608.210  Procedure in the event of an adverse ruling.

    If the court or other competent authority fails to stay the demand 
or request, the employee upon whom the demand or request is made, unless 
otherwise advised by the General Counsel, will appear at the stated time 
and place, produce a copy of this part, state that the employee has been 
advised by counsel not to provide the requested testimony or produce 
documents, and respectfully decline to comply with the demand or 
request, citing United States ex rel. Touhy v. Ragen, 340 U.S. 462 
(1951). A written response may be offered to a request, or to a demand, 
if permitted by the court or other competent authority.



                       Subpart C_Schedule of Fees



Sec. 2608.301  Fees.

    (a) Generally. The General Counsel may condition the production of 
records or appearance for testimony upon advance payment of a reasonable 
estimate of the costs to OGE.
    (b) Fees for records. Fees for producing records will include fees 
for searching, reviewing, and duplicating records, costs of attorney 
time spent in reviewing the demand or request, and expenses generated by 
materials and equipment used to search for, produce, and copy the 
responsive information. Costs for employee time will be calculated on 
the basis of the hourly pay of the employee (including all pay, 
allowance, and benefits). Fees for duplication will be the same as those 
charged by OGE in its Freedom of Information Act and Ethics in 
Government Act fee regulations at 5 CFR part 2604, subparts E and G.
    (c) Witness fees. Fees for attendance by a witness will include 
fees, expenses, and allowances prescribed by the court's rules. If no 
such fees are prescribed, witness fees will be determined based upon the 
rule of the Federal district court closest to the location where the 
witness will appear. Such fees will include cost of time spent by the 
witness to prepare for testimony,

[[Page 480]]

in travel, and for attendance in the legal proceeding.
    (d) Payment of fees. You must pay witness fees for current OGE 
employees and any records certification fees by submitting to the 
General Counsel a check or money order for the appropriate amount made 
payable to the Treasury of the United States. In the case of testimony 
by former OGE employees, you must pay applicable fees directly to the 
former employee in accordance with 28 U.S.C. 1821 or other applicable 
statutes.
    (e) Certification (authentication) of copies of records. The Office 
of Government Ethics may certify that records are true copies in order 
to facilitate their use as evidence. If you seek certification, you must 
request certified copies from OGE at least 45 days before the date they 
will be needed. The request should be sent to the General Counsel. You 
will be charged a certification fee of $15.00 for each document 
certified.
    (f) Waiver or reduction of fees. The General Counsel, in his or her 
sole discretion, may, upon a showing of reasonable cause, waive or 
reduce any fees in connection with the testimony, production, or 
certification of records.
    (g) De minimis fees. Fees will not be assessed if the total charge 
would be $10.00 or less.



                           Subpart D_Penalties



Sec. 2608.401  Penalties.

    (a) An employee who discloses official records or information or 
gives testimony relating to official information, except as expressly 
authorized by OGE or as ordered by a Federal court after OGE has had the 
opportunity to be heard, may face the penalties provided in 18 U.S.C. 
641 and other applicable laws. Additionally, former OGE employees are 
subject to the restrictions and penalties of 18 U.S.C. 207 and 216.
    (b) A current OGE employee who testifies or produces official 
records and information in violation of this part shall be subject to 
disciplinary action.



PART 2610_IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT--Table of Contents




                      Subpart A_General Provisions

Sec.
2610.101 Definitions.
2610.102 Purpose.
2610.103 When the Act applies.
2610.104 Proceedings covered.
2610.105 Eligibility of applicants.
2610.106 Standards for awards.
2610.107 Allowable fees and expenses.
2610.108 Rulemaking on maximum rate for attorney and agent fees.
2610.109 Awards against other agencies.

             Subpart B_Information Required From Applicants

2610.201 Contents of application.
2610.202 Net worth exhibit.
2610.203 Documentation of fees and expenses.
2610.204 When an application may be filed.

            Subpart C_Procedures for Considering Applications

2610.301 Jurisdiction of adjudicative officer.
2610.302 Filing and service of documents.
2610.303 Answer to application.
2610.304 Reply.
2610.305 Comments by other parties.
2610.306 Settlement.
2610.307 Further proceedings.
2610.308 Decision.
2610.309 Agency review.
2610.310 Judicial review.
2610.311 Payment of award.

    Authority: 5 U.S.C. 504(c)(1); 5 U.S.C. App. (Ethics in Government 
Act of 1978).

    Source: 57 FR 33268, July 28, 1992, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2610.101  Definitions.

    (a) Act means the Equal Access to Justice Act, 5 U.S.C. 504, as 
amended.
    (b) Adjudicative officer means the official, without regard to 
whether the official is designated as a hearing examiner, administrative 
law judge, administrative judge, or otherwise, who presided at the 
adversary adjudication.
    (c) Adversary adjudication means:
    (1) An adjudication under 5 U.S.C. 554 in which the position of the 
United States is represented by counsel or otherwise, but not including 
an adjudication for the purpose of establishing or

[[Page 481]]

fixing a rate or for the purpose of granting or renewing a license; and
    (2) An appeal of a decision of a contracting officer made pursuant 
to section 6 of the Contracts Disputes Act of 1978 (41 U.S.C. 605) as 
provided in section 8 of that statute (41 U.S.C. 607).
    (d) Agency counsel means:
    (1) When the position of the Office is being represented, the 
attorney or attorneys designated by the Office's General Counsel to 
represent the Office in a proceeding covered by this part; and
    (2) When the position of another agency of the United States is 
being represented, the representative or representatives as designated 
by that agency.
    (e) Office means the United States Office of Government Ethics, or 
the organizational unit within the Office responsible for conducting an 
adversary adjudication subject to this part.
    (f) Proceeding means an adversary adjudication as defined above.
    (g) Director means the Director of the United States Office of 
Government Ethics.



Sec. 2610.102  Purpose.

    The Act provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are parties to certain 
administrative proceedings (``adversary adjudications'') before the 
Office of Government Ethics. An eligible party may receive an award when 
it prevails over the Office, unless the Office's position in the 
proceeding was substantially justified or special circumstances make an 
award unjust. An eligible party may also receive an award when the 
demand of the Office is substantially in excess of the decision in the 
adversary adjudication and is unreasonable when compared with such 
decision, under the facts and circumstances of the case, unless the 
party has committed a willful violation of law or otherwise acted in bad 
faith or special circumstances make an award unjust. The rules in this 
part describe the parties eligible for awards and the proceedings that 
are covered. They also explain how to apply for awards, and the 
procedures and standards that the Office will use to make them.

[57 FR 33268, July 28, 1992, as amended at 63 FR 13116, Mar. 18, 1998]



Sec. 2610.103  When the Act applies.

    The Act applies to any adversary adjudication pending or commenced 
before the Office of Government Ethics on or after October 1, 1989, 
which is the date the Office became a separate executive agency. Prior 
to October 1, 1989, the Office was part of the Office of Personnel 
Management. Any adversary adjudication pending or commenced before 
October 1, 1989, and not finally disposed of by that date, is governed 
by the rules and policies implementing the Equal Access to Justice Act 
as adopted by the Office of Personnel Management.



Sec. 2610.104  Proceedings covered.

    (a) This part applies to adversary administrative adjudications 
conducted by the Office of Government Ethics. When all other conditions 
in the Act and in these rules are met, the types of proceedings to which 
this part applies are adversary administrative adjudications conducted 
by the Office under:
    (1) The Debt Collection Act of 1982, 5 U.S.C. 5514;
    (2) The Contract Disputes Act of 1978, 41 U.S.C. 605, 607;
    (3) The Ethics in Government Act of 1978, section 402(f)(2), 5 
U.S.C. app., and subpart E of part 2638 of this chapter.
    (b) The Office's failure to identify a type of proceeding as an 
adversary adjudication shall not preclude the filing of an application 
by a party who believes the proceeding is covered by the Act; whether 
the proceeding is covered will then be an issue for resolution in the 
proceedings on the application.
    (c) If a proceeding includes both matters covered by the Act and 
matters specifically excluded from coverage, any award made will include 
only fees and expenses related to covered matters.



Sec. 2610.105  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to the adversary 
adjudication for which it seeks an award. The term ``party'' is

[[Page 482]]

defined in 5 U.S.C. 551(3). The applicant must show that it meets all 
conditions of eligibility set out in this subpart and in subpart B of 
this part.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $2,000,000;
    (2) The sole owner of an unincorporated business who has a net worth 
of not more than $7,000,000, including both personal and business 
interests, and not more than 500 employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act, 12 U.S.C. 1141j(a), with not more than 500 
employees;
    (5) Any other partnership, corporation, association, unit of local 
government, or organization with a net worth of not more than $7,000,000 
and not more than 500 employees; and
    (6) For purposes of Sec. 2610.106(b), a small entity as defined in 
5 U.S.C. 601.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
underlying proceeding was initiated. For appeals of decisions of 
contracting officers made pursuant to section 6 of the Contracts 
Disputes Act of 1978, the net worth and number of employees of an 
applicant shall be determined as of the date the applicant filed its 
appeal under 41 U.S.C. 606.
    (d) An applicant who owns an unincorporated business will be 
considered as an ``individual'' rather than a ``sole owner of an 
unincorporated business'' if the issues on which the applicant prevails 
are related primarily to personal interests rather than to business 
interests.
    (e) The employees of an applicant include all persons who regularly 
perform services for remuneration for the applicant, under the 
applicant's direction and control. Part-time employees shall be included 
on a proportional basis.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. An 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interests of 
the applicant, or any corporation or other entity of which the applicant 
directly or indirectly owns or controls a majority of the voting shares 
or other interest, will be considered an affiliate for purposes of this 
part, unless the adjudicative officer determines that such treatment 
would be unjust and contrary to the purposes of the Act in light of the 
actual relationship between the affiliated entities. In addition, the 
adjudicative officer may determine that financial relationships of the 
applicant other than those described in this paragraph constitute 
special circumstances that would make an award unjust.
    (g) An applicant that participates in a proceeding primarily on 
behalf of one or more other persons or entities that would be ineligible 
is not itself eligible for an award.

[57 FR 33268, July 28, 1992, as amended at 63 FR 13116, Mar. 18, 1998]



Sec. 2610.106  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and 
expenses incurred in connection with a proceeding or in a significant 
and discrete substantive portion of the proceeding, unless the position 
of the Office was substantially justified. The position of the Office 
includes, in addition to the position taken by the Office in the 
adversary adjudication, the action or failure to act by the Office upon 
which the adversary adjudication is based. The burden of proof that an 
award should not be made to an eligible prevailing applicant because the 
Office's position was substantially justified is on the Office. No 
presumption arises that the Office's position was not substantially 
justified simply because the Office did not prevail.
    (b) If, in a proceeding arising from an Office action to enforce an 
applicant's compliance with a statutory or regulatory requirement, the 
demand of the Office is substantially in excess of the decision in the 
proceeding and is unreasonable when compared with that decision under 
the facts and circumstances of the case, the applicant shall be

[[Page 483]]

awarded the fees and other expenses related to defending against the 
excessive demand, unless the applicant has committed a willful violation 
of law or otherwise acted in bad faith or special circumstances make an 
award unjust. The burden of proof that the demand of the Office is 
substantially in excess of the decision and is unreasonable when 
compared with such decision is on the applicant. As used in this 
paragraph, ``demand'' means the express demand of the Office which led 
to the adversary adjudication, but it does not include a recitation by 
the Office of the maximum statutory penalty in the administrative 
complaint, or elsewhere when accompanied by an express demand for a 
lesser amount. Fees and expenses awarded under this paragraph shall be 
paid only as a consequence of appropriations provided in advance.
    (c) Awards for fees and expenses incurred before the date on which a 
proceeding was initiated will be made only if the applicant can 
demonstrate that they were reasonably incurred in preparation for the 
proceeding.
    (d) An award under this part will be reduced or denied if the 
Office's position was substantially justified in law and fact, if the 
applicant has unduly or unreasonably protracted the proceeding, if the 
applicant has falsified the application (including documentation) or net 
worth exhibit, or if special circumstances make the award unjust.

[57 FR 33268, July 28, 1992, as amended at 60 FR 38666, July 28, 1995; 
63 FR 13116, Mar. 18, 1998]



Sec. 2610.107  Allowable fees and expenses.

    (a) Awards will be based on rates customarily charged by persons 
engaged in the business of acting as attorneys, agents and expert 
witnesses, even if the services were made available without charge or at 
reduced rate to the applicant.
    (b) Except as provided in Sec. 2610.108, no award for the fee of an 
attorney or agent under these rules may exceed $125.00 per hour. No 
award to compensate an expert witness may exceed the highest rate at 
which the Office pays expert witnesses. However, an award may also 
include the reasonable expenses of the attorney, agency, or witness as a 
separate item, if the attorney, agent or witness ordinarily charges 
clients separately for such expenses.
    (c) In determining the reasonableness of the fee sought for an 
attorney, agent or expert witness, the adjudicative officer shall 
consider the following:
    (1) If the attorney, agent or witness is in private practice, his or 
her customary fees for similar services, or, if an employee of the 
applicant, the fully allocated costs of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (d) The reasonable cost of any study, analysis, engineering report, 
test, project or similar matter prepared on behalf of a party may be 
awarded, to the extent that the charge for the services does not exceed 
the prevailing rate for similar services, and the study or other matter 
was necessary for preparation of applicant's case.

[57 FR 33268, July 28, 1992, as amended at 63 FR 13116, Mar. 18, 1998]



Sec. 2610.108  Rulemaking on maximum rate for attorney and agent fees.

    (a) If warranted by an increase in the cost of living or by special 
circumstances (such as limited availability of attorneys or agents 
qualified to handle certain types of proceedings), the Office may adopt 
regulations providing that attorney or agent fees may be awarded at a 
rate higher than $125.00 per hour in some or all of the types of 
proceedings covered by this part. The Office will conduct any rulemaking 
proceedings for this purpose under the informal rulemaking procedures of 
the Administrative Procedure Act, 5 U.S.C. 553.
    (b) Any person may file with the Office a petition for rulemaking to 
increase the maximum rate for attorney or agent fees as provided in 5 
U.S.C. 504(b)(1)(A)(ii). The petition should

[[Page 484]]

identify the rate the petitioner believes the Office should establish 
and the types of proceedings in which the rate should be used. It should 
also explain fully the reasons why the higher rate is warranted. The 
Office will respond to the petition within 60 days after it is filed, by 
initiating a rulemaking proceeding, denying the petition, or taking 
other appropriate action.

[57 FR 33268, July 28, 1992, as amended at 63 FR 13116, Mar. 18, 1998]



Sec. 2610.109  Awards against other agencies.

    If an applicant is entitled to an award because it prevails over 
another agency of the United States that participates in a proceeding 
before the Office of Government Ethics and takes a position that is not 
substantially justified, the award or an appropriate portion of the 
award shall be made against that agency.



             Subpart B_Information Required From Applicants



Sec. 2610.201  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the proceeding for which an award is 
sought. Unless the applicant is an individual, the application shall 
further state the number of employees of the applicant and describe 
briefly the type and purpose of its organization or business. The 
application shall also:
    (1) Show that the applicant has prevailed and identify the position 
of the Office in the proceeding that the applicant alleges was not 
substantially justified; or
    (2) Show that the demand by the Office in the proceeding was 
substantially in excess of, and was unreasonable when compared with, the 
decision in the proceeding.
    (b) The application shall also include, for purposes of Sec. 
2610.106 (a) or (b), a statement that the applicant's net worth does not 
exceed $2,000,000 (for individuals) or $7,000,000 (for all other 
applicants, including their affiliates) or alternatively, for purposes 
of Sec. 2610.106(b) only, a declaration that the applicant is a small 
entity as defined in 5 U.S.C. 601. However, an applicant may omit the 
statement concerning its net worth if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
    (c) The application shall state the amount of fees and expenses for 
which an award is sought.
    (d) The application may also include any other matters that the 
applicant wishes the Office to consider in determining whether and in 
what amount an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer or attorney of the applicant. It shall also contain 
or be accompanied by a written verification made by the applicant or 
authorized officer or attorney of the applicant under oath or under 
penalty of perjury that the information provided in the application is 
true and correct.
    (f) These collections of information are not subject to Office of 
Management and Budget review under the Paperwork Reduction Act (44 
U.S.C. chapter 35) because they are expected to involve nine or fewer 
persons each year.

[57 FR 33268, July 28, 1992, as amended at 59 FR 34755, July 7, 1994; 63 
FR 13116, Mar. 18, 1998]



Sec. 2610.202  Net worth exhibit.

    (a) Each applicant, except a qualified tax-exempt organization or 
cooperative association, must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in Sec. 2610.105(f)) when the underlying adversary adjudication 
was initiated. The exhibit may be in any form convenient to the 
applicant that provides full disclosure of the applicant's and its 
affiliates' assets and

[[Page 485]]

liabilities and is sufficient to determine whether the applicant 
qualifies under the standards in this part. The adjudicative officer may 
require an applicant to file additional information to determine its 
eligibility for an award.
    (b) Ordinarily, the net worth exhibit will be included in the public 
record of the proceeding. However, an applicant that objects to public 
disclosure of information in any portion of the exhibit and believes 
there are legal grounds for withholding it from disclosure may submit 
that portion of the exhibit directly to the adjudicative officer in a 
sealed envelope labeled ``Confidential Financial Information,'' 
accompanied by a motion to withhold the information from public 
disclosure. The motion shall describe the information sought to be 
withheld and explain, in detail, why it falls within one or more of the 
specific exemptions from mandatory disclosure under the Freedom of 
Information Act, 5 U.S.C. 552(b)(1)-(9), why public disclosure of the 
information would adversely affect the applicant, and why disclosure is 
not required in the public interest. The material in question shall be 
served on counsel representing the Office, but need not be served on any 
other party to the proceeding, if any. If the adjudicative officer finds 
that the information should not be withheld from disclosure, it shall be 
placed in the public record of the proceeding. Otherwise, any request by 
another party or the public to inspect or copy the exhibit shall be 
resolved in accordance with the Office of Government Ethics' established 
procedures under the Freedom of Information Act.



Sec. 2610.203  Documentation of fees and expenses.

    The application shall be accompanied by full and itemized 
documentation of the fees and expenses, including the cost of any study, 
analysis, engineering report, test, project or similar matter, for which 
an award is sought. A separate itemized statement shall be submitted for 
each professional firm or individual whose services are covered by the 
application, showing the hours spent in connection with the proceeding 
by each individual, a description of the specific services performed, 
the rates at which each fee has been computed, any expenses for which 
reimbursement is sought, the total amount claimed, and the total amount 
paid or payable by the applicant or by any other person or entity for 
the services provided. The adjudicative officer may require the 
applicant to provide vouchers, receipts, logs, or other documentation 
for any fees or expenses claimed, pursuant to Sec. 2610.306.



Sec. 2610.204  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the proceeding or in a significant and discrete substantive portion 
of the proceeding. An application may also be filed when the demand of 
the Office is substantially in excess of the decision in the proceeding 
and is unreasonable when compared with such decision. In no case may an 
application be filed later than 30 days after the Office of Government 
Ethics' final disposition of the proceeding.
    (b) For purposes of this rule, final disposition means the date on 
which a decision or order disposing of the merits of the proceeding or 
any other complete resolution of the proceeding, such as a settlement or 
voluntary dismissal, becomes final and unappealable, both within the 
Office and to the courts.
    (c) If review or reconsideration is sought or taken of a decision as 
to which an applicant believes it has prevailed or has been subjected to 
a demand from the Office substantially in excess of the decision in the 
adversary adjudication and unreasonable when compared to that decision, 
proceedings for the award of fees shall be stayed pending final 
disposition of the underlying controversy. When the United States 
appeals the underlying merits of an adversary adjudication to a court, 
no decision on an application for fees and other expenses in connection 
with that adversary adjudication shall be made until a final and 
unreviewable decision is rendered by the court on the appeal or until 
the underlying merits of the case have been finally determined pursuant 
to the appeal.

[57 FR 33268, July 28, 1992, as amended at 63 FR 13116, Mar. 18, 1998]

[[Page 486]]



            Subpart C_Procedures for Considering Applications



Sec. 2610.301  Jurisdiction of adjudicative officer.

    Any provision in the Office's rules and regulations other than this 
part which limits or terminates the jurisdiction of an adjudicative 
officer upon the effective date of his or her decision in the underlying 
proceeding shall not in any way affect his or her jurisdiction to render 
a decision under this part.



Sec. 2610.302  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
proceeding in the same manner as other pleadings in the proceeding, 
except as provided in Sec. 2610.202(b) for confidential financial 
information.



Sec. 2610.303  Answer to application.

    (a) Within 30 days after service of an application, counsel 
representing the Office may file an answer to the application. Agency 
counsel may request an extension of time for filing. If agency counsel 
fails to answer or otherwise fails to contest or settle the application 
within the 30-day period, the adjudicative officer, upon a satisfactory 
showing of entitlement by the applicant, may make an award for the 
applicant's fees and other expenses under the Act.
    (b) If agency counsel and the applicant believe that the issues in 
the fee application can be settled, they may jointly file a statement of 
their intent to negotiate a settlement. The filing of this statement 
shall extend the time for filing an answer for an additional 30 days, 
and further extensions may be granted for good cause by the adjudicative 
officer upon request by agency counsel and the applicant.
    (c) The answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of agency 
counsel's position. If the answer is based on any alleged facts not 
already in the record of the proceeding, agency counsel shall include 
with the answer either supporting affidavits or a request for further 
proceedings under Sec. 2610.307.



Sec. 2610.304  Reply.

    Within 15 days after service of an answer, the applicant may file a 
reply. If the reply is based on any alleged facts not already in the 
record of the proceeding, the applicant shall include with the reply 
either supporting affidavits or a request for further proceedings under 
Sec. 2610.307.



Sec. 2610.305  Comments by other parties.

    Any party to a proceeding other than the applicant and agency 
counsel may file comments on an application within 30 days after it is 
served, or on an answer within 15 days after it is served. A commenting 
party may not participate further in proceedings on the application 
unless the adjudicative officer determines that the public interest 
requires such participation in order to permit full exploration of 
matters raised in the comments.



Sec. 2610.306  Settlement.

    The applicant and agency counsel may agree on a proposed settlement 
of the award before final action on the application, either in 
connection with a settlement of the underlying proceeding, or after the 
underlying proceeding has been concluded, in accordance with the 
settlement procedure applicable to the underlying procedure. If an 
eligible prevailing party and agency counsel agree on a proposed 
settlement of an award before an application has been filed, the 
application shall be filed with the proposed settlement.



Sec. 2610.307  Further proceedings.

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the applicant 
or agency counsel, or on his or her own initiative, the adjudicative 
officer may order further proceedings, such as an informal conference, 
oral argument, additional written submissions or, as to issues other 
than substantial justification (such as the applicant's eligibility or 
substantiation of fees and expenses), pertinent discovery or an 
evidentiary hearing. Such further proceedings shall be held only when 
necessary for full

[[Page 487]]

and fair resolution of the issues arising from the application, and 
shall be conducted as promptly as possible. Whether or not the position 
of the Office was substantially justified shall be determined on the 
basis of the administrative record, as a whole, which is made in the 
adversary adjudication for which fees and other expenses are sought.
    (b) A request that the adjudicative officer order further 
proceedings under this section shall specifically identify the 
information sought or the disputed issues and shall explain why the 
additional proceedings are necessary to resolve the issues.



Sec. 2610.308  Decision.

    The adjudicative officer shall issue an initial decision on the 
application within 30 days after completion of proceedings on the 
application. The decision shall include written findings and conclusions 
on the applicant's eligibility and status as a prevailing party, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. The decision shall also include, if at 
issue, findings on whether the Office's position was substantially 
justified, whether the applicant unduly protracted the proceedings, or 
whether special circumstances make an award unjust. If the applicant has 
sought an award against more than one agency, the decision shall 
allocate responsibility for payment of any award made among the 
agencies, and shall explain the reasons for the allocation made.



Sec. 2610.309  Agency review.

    Within 30 days after issuance of an initial decision under this 
part, either the applicant or agency counsel may seek review of the 
initial decision on the fee application, or the Director (or his or her 
designee) may decide to review the initial decision on his or her own 
initiative, in accordance with the Office's review or appeal procedures 
applicable to the underlying proceeding. If neither the applicant nor 
agency counsel seeks review and the Director (or designee) does not take 
review on his or her own initiative, the initial decision on the 
application shall become a final decision of the Office of Government 
Ethics 30 days after it is issued. Whether to review a decision is a 
matter within the discretion of the Director (or his or her designee, if 
any). If review is taken, the Office will issue a final decision on the 
application or remand the application to the adjudicative officer for 
further proceedings.



Sec. 2610.310  Judicial review.

    Judicial review of final agency decisions on awards may be sought as 
provided in 5 U.S.C. 504(c)(2).



Sec. 2610.311  Payment of award.

    An applicant seeking payment of an award shall submit a copy of the 
Office's final decision granting the award, accompanied by a 
certification that the applicant will not seek review of the decision in 
the United States courts, to the Associate Director for Administration, 
Office of Government Ethics, Suite 500, 1201 New York Avenue NW., 
Washington, DC 20005-3917. The Office will pay the amount awarded to the 
applicant within 60 days, unless judicial review of the award or of the 
underlying decision of the adversary adjudication has been sought by the 
applicant, the Office, or any other party to the proceedings.

[[Page 488]]



                     SUBCHAPTER B_GOVERNMENT ETHICS


PART 2634_EXECUTIVE BRANCH FINANCIAL DISCLOSURE, QUALIFIED TRUSTS, AND 

CERTIFICATES OF DIVESTITURE--Table of Contents




                      Subpart A_General Provisions

Sec.
2634.101 Authority.
2634.102 Purpose and overview.
2634.103 Executive agency supplemental regulations.
2634.104 Policies.
2634.105 Definitions.

 Subpart B_Persons Required to File Public Financial Disclosure Reports

2634.201 General requirements, filing dates, and extensions.
2634.202 Public filer defined.
2634.203 Persons excluded by rule.
2634.204 Employment of sixty days or less.
2634.205 Special waiver of public reporting requirements.

                  Subpart C_Contents of Public Reports

2634.301 Interests in property.
2634.302 Income.
2634.303 Purchases, sales, and exchanges.
2634.304 Gifts and reimbursements.
2634.305 Liabilities.
2634.306 Agreements and arrangements.
2634.307 Outside positions.
2634.308 Reporting periods and contents of public financial disclosure 
          reports.
2634.309 Spouses and dependent children.
2634.310 Trusts, estates, and investment funds.
2634.311 Special rules.

                       Subpart D_Qualified Trusts

2634.401 General considerations.
2634.402 Special notice for advice-and-consent nominees.
2634.403 Qualified blind trusts.
2634.404 Qualified diversified trusts.
2634.405 Certification of trusts.
2634.406 Independent trustees.
2634.407 Restrictions on fiduciaries and interested parties.
2634.408 Special filing requirements for qualified trusts.
2634.409 OMB control number.

    Subpart E_Revocation of Trust Certificates and Trustee Approvals

2634.501 Purpose and scope.
2634.502 Definitions.
2634.503 Determinations.

                           Subpart F_Procedure

2634.601 Report forms.
2634.602 Filing of reports.
2634.603 Custody of and access to public reports.
2634.604 Custody of and denial of public access to confidential reports.
2634.605 Review of reports.
2634.606 Updated disclosure of advice-and-consent nominees.
2634.607 Advice and opinions.

                           Subpart G_Penalties

2634.701 Failure to file or falsifying reports.
2634.702 Breaches by trust fiduciaries and interested parties.
2634.703 Misuse of public reports.
2634.704 Late filing fee.

                       Subpart H_Ethics Agreements

2634.801 Scope.
2634.802 Requirements.
2634.803 Notification of ethics agreements.
2634.804 Evidence of compliance.
2634.805 Retention.

           Subpart I_Confidential Financial Disclosure Reports

2634.901 Policies of confidential financial disclosure reporting.
2634.902 [Reserved]
2634.903 General requirements, filing dates, and extensions.
2634.904 Confidential filer defined.
2634.905 Use of alternative procedures.
2634.906 Review of confidential filer status.
2634.907 Report contents.
2634.908 Reporting periods.
2634.909 Procedures, penalties, and ethics agreements.

                  Subpart J_Certificates of Divestiture

2634.1001 Overview.
2634.1002 Role of the Internal Revenue Service.
2634.1003 Definitions.
2634.1004 General rule.
2634.1005 How to obtain a Certificate of Divestiture.
2634.1006 Rollover into permitted property.
2634.1007 Cases in which Certificates of Divestiture will not be issued.
2634.1008 Public access to a Certificate of Divestiture.

Appendix A to Part 2634--Certificate of Independence (Form Approved: OMB 
          Control No. 3209-0007)

[[Page 489]]

Appendix B to Part 2634--Certificate of Compliance (Form Approved: OMB 
          Control No. 3209-0007)
Appendix C to Part 2634--Privacy Act and Paperwork Reduction Act Notices 
          for Appendixes A and B

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26 
U.S.C. 1043; Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 note 
(Federal Civil Penalties Inflation Adjustment Act of 1990), as amended 
by Sec. 31001, Pub. L. 104-134, 110 Stat. 1321 (Debt Collection 
Improvement Act of 1996); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.



                      Subpart A_General Provisions

    Source: 57 FR 11804, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.101  Authority.

    The regulation in this part is issued pursuant to the authority of 
the Ethics in Government Act of 1978, as amended; 26 U.S.C. 1043; the 
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by 
the Debt Collection Improvement Act of 1996; and Executive Order 12674 
of April 12, 1989, as modified by Executive Order 12731 of October 17, 
1990.

[64 FR 47096, Aug. 30, 1999]



Sec. 2634.102  Purpose and overview.

    (a) This regulation supplements and implements title I of the Act 
and section 201(d) of Executive Order 12674 (as modified by Executive 
Order 12731) with respect to executive branch employees, by setting 
forth more specifically the uniform procedures and requirements for 
financial disclosure and for the certification and use of qualified 
blind and diversified trusts. Additionally, this regulation implements 
section 502 of the Reform Act by establishing procedures for executive 
branch personnel to obtain Certificates of Divestiture, which permit 
deferred recognition of capital gain in certain instances.
    (b) The rules in this part govern both public and confidential 
(nonpublic) financial disclosure systems. Subpart I of this part 
contains the rules applicable to the confidential disclosure system.

[57 FR 11804, Apr. 7, 1992, as amended at 71 FR 28233, May 16, 2006]



Sec. 2634.103  Executive agency supplemental regulations.

    (a) This regulation is intended to provide uniformity for executive 
branch financial disclosure systems. However, an agency may, subject to 
the prior written approval of the Office of Government Ethics, issue 
supplemental regulations implementing this part, if necessary to address 
special or unique agency circumstances. Such regulations:
    (1) Shall be consistent with the Act, Executive Orders 12674 and 
12731, and this part; and
    (2) Shall impose no additional reporting requirements on either 
public or confidential filers, unless specifically authorized by the 
Office of Government Ethics as supplemental confidential reporting.
    Note: Supplemental regulations will not be used to satisfy the 
separate requirement of 5 U.S.C. App. (Ethics in Government Act of 1978, 
Section 402(d)(1)) that each agency have established written procedures 
on how to collect, review, evaluate, and, where appropriate, make 
publicly available, financial disclosure statements filed with it.
    (b) Requests for approval of supplemental regulations under 
paragraph (a) of this section shall be submitted in writing to the 
Office of Government Ethics, and shall set forth the agency's need for 
any proposed supplemental reporting requirements. See Sec. 2634.901 (b) 
and (c).
    (c) Agencies should review all of their existing financial 
disclosure regulations to determine which of those regulations must be 
modified or revoked in order to conform with the requirements of this 
part. Any amendatory agency regulations shall be processed in accordance 
with paragraphs (a) and (b) of this section.



Sec. 2634.104  Policies.

    (a) Title I of the Act requires that high-level Federal officials 
disclose publicly their personal financial interests, to ensure 
confidence in the integrity of the Federal Government by demonstrating 
that they are able to

[[Page 490]]

carry out their duties without compromising the public trust. Title I 
also authorizes the Office of Government Ethics to establish a 
confidential (nonpublic) financial disclosure system for less senior 
executive branch personnel in certain designated positions, to 
facilitate internal agency conflict-of-interest review.
    (b) Public and confidential financial disclosure serves to prevent 
conflicts of interest and to identify potential conflicts, by providing 
for a systematic review of the financial interests of both current and 
prospective officers and employees. These reports assist agencies in 
administering their ethics programs and providing counseling to 
employees.
    (c) Financial disclosure reports are not net worth statements. 
Financial disclosure systems seek only the information that the 
President, Congress, or OGE as the supervising ethics office for the 
executive branch has deemed relevant to the administration and 
application of the criminal conflict of interest laws, other statutes on 
ethical conduct or financial interests, and Executive orders or 
regulations on standards of ethical conduct.
    (d) Nothing in the Act or this part requiring reporting of 
information or the filing of any report shall be deemed to authorize 
receipt of income, honoraria, gifts, or reimbursements; holding of 
assets, liabilities, or positions; or involvement in transactions that 
are prohibited by law, Executive order or regulation.
    (e) The provisions of title I of the Act and this part requiring the 
reporting of information shall supersede any general requirement under 
any other provision of law or regulation on the reporting of information 
required for purposes of preventing conflicts of interest or apparent 
conflicts of interest. However, the provisions of title I and this part 
shall not supersede the requirements of 5 U.S.C. 7342 (the Foreign Gifts 
and Decorations Act).
    (f) This regulation is intended to be gender-neutral; therefore, use 
of the terms he, his, and him include she, hers, and her, and vice 
versa.



Sec. 2634.105  Definitions.

    For purposes of this part:
    (a) Act means the Ethics in Government Act of 1978 (Pub. L. 95-521, 
as amended), as modifed by the Ethics Reform Act of 1989 (Pub. L. 101-
194, as amended).
    (b) Agency means any executive agency as defined in 5 U.S.C. 105 
(any executive department, Government corporation, or independent 
establishment in the executive branch), any military department as 
defined in 5 U.S.C. 102, and the Postal Service and the Postal Rate 
Commission. It does not include the General Accounting Office.
    (c) Confidential filer. For the definition of ``confidential 
filer,'' see Sec. 2634.904.
    (d) Dependent child means, when used with respect to any reporting 
individual, any individual who is a son, daughter, stepson, or 
stepdaughter and who:
    (1) Is unmarried, under age 21, and living in the household of the 
reporting individual; or
    (2) Is a dependent of the reporting individual within the meaning of 
section 152 of the Internal Revenue Code of 1986, 26 U.S.C. 152.
    (e) Designated agency ethics official means the primary officer or 
employee who is designated by the head of an agency to administer the 
provisions of title I of the Act and this part within an agency, and in 
his absence the alternate who is designated by the head of the agency. 
The term also includes a delegate of such an official, unless otherwise 
indicated. See subpart B of part 2638 of this chapter on the appointment 
and additional responsibilities of a designated agency ethics official 
and alternate.
    (f) Executive branch means any agency as defined in paragraph (b) of 
this section and any other entity or administrative unit in the 
executive branch.
    (g) Filer is used interchangeably with ``reporting individual,'' and 
may refer to a ``confidential filer'' as defined in paragraph (c) of 
this section, a ``public filer'' as defined in paragraph (m) of this 
section, or a nominee or candidate as described in Sec. 2634.201.
    (h) Gift means a payment, advance, forbearance, rendering, or 
deposit of money, or anything of value, unless consideration of equal or 
greater value

[[Page 491]]

is received by the donor, but does not include:
    (1) Bequests and other forms of inheritance;
    (2) Suitable mementos of a function honoring the reporting 
individual;
    (3) Food, lodging, transportation, and entertainment provided by a 
foreign government within a foreign country or by the United States 
Government, the District of Columbia, or a State or local government or 
political subdivision thereof;
    (4) Food and beverages which are not consumed in connection with a 
gift of overnight lodging;
    (5) Communications to the offices of a reporting individual, 
including subscriptions to newspapers and periodicals;
    (6) Consumable products provided by home-State businesses to the 
offices of the President or Vice President, if those products are 
intended for consumption by persons other than the President or Vice 
President; or
    (7) Exclusions and exceptions as described at Sec. 2634.304(c) and 
(d).
    (i) Honorarium means a payment of money or anything of value for an 
appearance, speech, or article.
    (j) Income means all income from whatever source derived. It 
includes but is not limited to the following items: earned income such 
as compensation for services, fees, commissions, salaries, wages and 
similar items; gross income derived from business (and net income if the 
individual elects to include it); gains derived from dealings in 
property including capital gains; interest; rents; royalties; dividends; 
annuities; income from the investment portion of life insurance and 
endowment contracts; pensions; income from discharge of indebtedness; 
distributive share of partnership income; and income from an interest in 
an estate or trust. The term includes all income items, regardless of 
whether they are taxable for Federal income tax purposes, such as 
interest on municipal bonds. Generally, income means ``gross income'' as 
determined in conformity with the Internal Revenue Service principles at 
26 CFR 1.61-1 through 1.61-15 and 1.61-21.
    (k) Personal hospitality of any individual means hospitality 
extended for a nonbusiness purpose by an individual, not a corporation 
or organization, at the personal residence of or on property or 
facilities owned by that individual or his family.
    (l) Personal residence means any real property used exclusively as a 
private dwelling by the reporting individual or his spouse, which is not 
rented out during any portion of the reporting period. The term is not 
limited to one's domicile; there may be more than one personal 
residence, including a vacation home.
    (m) Public filer. For the definition of ``public filer,'' see Sec. 
2634.202.
    (n) Reimbursement means any payment or other thing of value received 
by the reporting individual (other than gifts, as defined in paragraph 
(h) of this section) to cover travel-related expenses of such 
individual, other than those which are:
    (1) Provided by the United States Government, the District of 
Columbia, or a State or local government or political subdivision 
thereof;
    (2) Required to be reported by the reporting individual under 5 
U.S.C. 7342 (the Foreign Gifts and Decorations Act); or
    (3) Required to be reported under section 304 of the Federal 
Election Campaign Act of 1971 (2 U.S.C. 434) (relating to reports of 
campaign contributions).
    Note: Payments which are not made to the individual are not 
reimbursements for purposes of this part. Thus, payments made to the 
filer's employing agency to cover official travel-related expenses do 
not fit this definition of reimbursement. For example, payments being 
accepted by the agency pursuant to statutory authority such as 31 U.S.C. 
1353, as implemented by 41 CFR part 304-1, are not considered 
reimbursements under this part 2634, because they are not payments 
received by the reporting individual. On the other hand, travel payments 
made to the employee by an outside entity for private travel are 
considered reimbursements for purposes of this part. Likewise, travel 
payments received from certain nonprofit entities under authority of 5 
U.S.C. 4111 are considered reimbursements, even though for official 
travel, since that statute specifies that such payments must be made to 
the individual directly (with prior approval from the individual's 
agency).
    (o) Relative means an individual who is related to the reporting 
individual, as father, mother, son, daughter, brother, sister, uncle, 
aunt, great

[[Page 492]]

uncle, great aunt, first cousin, nephew, niece, husband, wife, 
grandfather, grandmother, grandson, granddaughter, father-in-law, 
mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-
law, stepfather, stepmother, stepson, stepdaughter, stepbrother, 
stepsister, half brother, half sister, or who is the grandfather or 
grandmother of the spouse of the reporting individual, and shall be 
deemed to include the fiance or fiancee of the reporting individual.
    (p) Reporting individual is used interchangeably with ``filer,'' and 
may refer to a ``confidential filer'' as defined in Sec. 2634.904, a 
``public filer'' as defined in Sec. 2634.202, or a nominee or candidate 
as described in Sec. 2634.201.
    (q) Reviewing official means the designated agency ethics official 
or his delegate, the Secretary concerned, the head of the agency, or the 
Director of the Office of Government Ethics.
    (r) Secretary concerned has the meaning set forth in 10 U.S.C. 
101(8) (relating to the Secretaries of the Army, Navy, Air Force, and 
for certain Coast Guard matters, the Secretary of Transportation); and, 
in addition, means:
    (1) The Secretary of Commerce, in matters concerning the National 
Oceanic and Atmospheric Administration;
    (2) The Secretary of Health and Human Services, with respect to 
matters concerning the Public Health Service; and
    (3) The Secretary of State with respect to matters concerning the 
Foreign Service.
    (s) Special Government employee has the meaning given to that term 
by the first sentence of 18 U.S.C. 202(a): an officer or employee of an 
agency who is retained, designated, appointed, or employed to perform 
temporary duties, with or without compensation, for not to exceed 130 
days during any period of 365 consecutive days, either on a full-time or 
intermittent basis.
    (t) Value means a good faith estimate of the fair market value if 
the exact value is neither known nor easily obtainable by the reporting 
individual without undue hardship or expense. In the case of any 
interest in property, see the alternative valuation options in Sec. 
2634.301(e). For gifts and reimbursements, see Sec. 2634.304(e).

[57 FR 11804, Apr. 7, 1992; 57 FR 21854, May 22, 1992; 62 FR 48747, 
Sept. 17, 1997; 63 FR 69992, Dec. 18, 1998]



 Subpart B_Persons Required To File Public Financial Disclosure Reports

    Source: 57 FR 11806, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.201  General requirements, filing dates, and extensions.

    (a) Incumbents. A public filer as defined in Sec. 2634.202 of this 
subpart who, during any calendar year, performs the duties of his 
position or office, as described in that section, for a period in excess 
of 60 days shall file a public financial disclosure report containing 
the information prescribed in subpart C of this part, on or before May 
15 of the succeeding year.

    Example 1. An SES official commences performing the duties of his 
position on November 15. He will not be required to file an incumbent 
report for that calendar year.
    Example 2. An employee, who is classified at GS-15, is assigned to 
fill an SES position in an acting capacity, from October 15 through 
December 31. Having performed the duties of a covered position for more 
than 60 days during the calendar year, he will be required to file an 
incumbent report. In addition, he must file a new entrant report the 
first time he serves more than 60 days in a calendar year in the 
position, in accordance with Sec. 2634.201(b) and Sec. 2634.204(c)(1).

    (b) New entrants. (1) Within 30 days of assuming a public filer 
position or office described in Sec. 2634.202 of this subpart, an 
individual shall file a public financial disclosure report containing 
the information prescribed in subpart C of this part.
    (2) However, no report shall be required if the individual:
    (i) Has, within 30 days prior to assuming such position, left 
another position or office for which a public financial disclosure 
report under the Act was required to be filed; or
    (ii) Has already filed such a report as a nominee or candidate for 
the position.

    Example: Y, an employee of the Treasury Department who has 
previously filed reports

[[Page 493]]

in accordance with the rules of this section, terminates employment with 
that Department on January 12, 1991, and begins employment with the 
Commerce Department on February 10, 1991, in a Senior Executive Service 
position. Y is not a new entrant since he has assumed a position 
described in Sec. 2634.202 of this subpart within thirty days of 
leaving another position so described. Accordingly, he need not file a 
new report with the Commerce Department.

    Note: While Y did not have to file a new entrant report with the 
Commerce Department, that Department should request a copy of the last 
report which he filed with the Treasury Department, so that Commerce 
could determine whether or not there would be any conflicts or potential 
conflicts in connection with Y's new employment. Additionally, Y will 
have to file an incumbent report covering the 1990 calendar year, in 
accordance with paragraph (a) of this section, due not later than May 
15, 1991, with Commerce, which should provide a copy to Treasury so that 
both may review it.

    (c) Nominees. (1) At any time after a public announcement by the 
President or President-elect of his intention to nominate an individual 
to an executive branch position, appointment to which requires the 
advice and consent of the Senate, such individual may, and in any event 
within five days after the transmittal of the nomination to the Senate 
shall, file a public financial disclosure report containing the 
information prescribed in subpart C of this part.
    (2) This requirement shall not apply to any individual who is 
nominated to a position as:
    (i) An officer of the uniformed services; or
    (ii) A Foreign Service Officer.

    Note: Although the statute, 5 U.S.C. app. (Ethics in Government Act 
of 1978, section 101(b)(1)), exempts uniformed service officers only if 
they are nominated for appointment to a grade or rank for which the pay 
grade is 0-6 or below, the Senate confirmation committees have adopted a 
practice of exempting all uniformed service officers, unless otherwise 
specified by the committee assigned.

    (3) Section 2634.605(c) provides expedited procedures in the case of 
individuals described in paragraph (c)(1) of this section. Those 
individuals referred to in paragraph (c)(2) of this section as being 
exempt from filing nominee reports shall file new entrant reports, if 
required by paragraph (b) of this section.
    (d) Candidates. A candidate (as defined in section 301 of the 
Federal Election Campaign Act of 1971, 2 U.S.C. 431) for nomination or 
election to the office of President or Vice President (other than an 
incumbent) shall file a public financial disclosure report containing 
the information prescribed in subpart C of this part, in accordance with 
the following:
    (1) Within 30 days of becoming a candidate or on or before May 15 of 
the calendar year in which the individual becomes a candidate, whichever 
is later, but in no event later than 30 days before the election; and
    (2) On or before May 15 of each successive year an individual 
continues to be a candidate. However, in any calendar year in which an 
individual continues to be a candidate but all elections relating to 
such candidacy were held in prior calendar years, the individual need 
not file a report unless he becomes a candidate for a vacancy during 
that year.

    Example: P became a candidate for President in January 1991. P will 
be required to file a public financial disclosure report on or before 
May 15, 1991. If P had become a candidate on June 1, 1991, he would have 
been required to file a disclosure report within 30 days of that date.

    (e) Termination of employment. (1) On or before the thirtieth day 
after termination of employment from a public filer position or office 
described in Sec. 2634.202 of this subpart, an individual shall file a 
public financial disclosure report containing the information prescribed 
in subpart C of this part.
    (2) However, if within 30 days of such termination the individual 
assumes employment in another position or office for which a public 
report under the Act is required to be filed, no report shall be 
required by the provisions of this paragraph. See the related Example in 
paragraph (b) of this section.
    (f) Extensions. The reviewing official may, for good cause shown, 
grant to any public filer or class thereof an extension of time for 
filing which shall not exceed 45 days. The reviewing official may, for 
good cause shown, grant an additional extension of time which shall not 
exceed 45 days. The employee

[[Page 494]]

shall set forth in writing specific reasons why such additional 
extension of time is necessary. The reviewing official must approve or 
deny such requests in writing. Such records shall be maintained as part 
of the official report file. (For extensions on confidential financial 
disclosure reports, see Sec. 2634.903(d).)

[57 FR 11806, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 63 
FR 69992, Dec. 18, 1998; 67 FR 49857, Aug. 1, 2002]



Sec. 2634.202  Public filer defined.

    The term public filer includes:
    (a) The President;
    (b) The Vice President;
    (c) Each officer or employee in the executive branch, including a 
special Government employee as defined in 18 U.S.C. 202(a), whose 
position is classified above GS-15 of the General Schedule prescribed by 
5 U.S.C. 5332, or the rate of basic pay for which is fixed, other than 
under the General Schedule, at a rate equal to or greater than 120% of 
the minimum rate of basic pay for GS-15 of the General Schedule; each 
member of a uniformed service whose pay grade is at or in excess of O-7 
under 37 U.S.C. 201; and each officer or employee in any other position 
determined by the Director of the Office of Government Ethics to be of 
equal classification;
    (d) Each employee who is an administrative law judge appointed 
pursuant to 5 U.S.C. 3105;
    (e) Any employee not otherwise described in paragraph (c) of this 
section who is in a position in the executive branch which is excepted 
from the competitive service by reason of being of a confidential or 
policy-making character, unless excluded by virtue of a determination 
under Sec. 2634.203 of this subpart;
    (f) The Postmaster General, the Deputy Postmaster General, each 
Governor of the Board of Governors of the United States Postal Service 
and each officer or employee of the United States Postal Service or 
Postal Rate Commission whose basic rate of pay is equal to or greater 
than 120% of the minimum rate of basic pay for GS-15 of the General 
Schedule;
    (g) The Director of the Office of Government Ethics and each 
agency's primary designated agency ethics official;
    (h) Any civilian employee not otherwise described in paragraph (c) 
of this section who is employed in the Executive Office of the President 
(other than a special Government employee, as defined in 18 U.S.C. 
202(a)) and holds a commission of appointment from the President; and
    (i) Anyone whose employment in a position or office described in 
paragraphs (a) through (h) of this section has terminated, but who has 
not yet satisfied the filing requirements of Sec. 2634.201(e) of this 
subpart.
    Note: References in this section and in Sec. Sec. 2634.203 and 
2634.904 to position classifications have been adjusted to reflect 
elimination of General Schedule classifications GS-16, GS-17, and GS-18 
by the Federal Employees Pay Comparability Act of 1990, as incorporated 
in section 529 of Public Law 101-509.



Sec. 2634.203  Persons excluded by rule.

    (a) In general. Any individual or group of individuals described in 
Sec. 2634.202(e) of this subpart (relating to positions of a 
confidential or policy-making character) may be excluded by rule from 
the public reporting requirements of this subpart when the Director of 
the Office of Government Ethics determines, in his sole discretion, that 
such exclusion would not affect adversely the integrity of the 
Government or the public's confidence in the integrity of the 
Government.
    (b) Exclusion determination. The determination required by paragraph 
(a) of this section has been made for the following group of individuals 
who, therefore, may be excluded from the public reporting requirements 
of this subpart, pursuant to the procedures in paragraph (c) of this 
section: Individuals in any position classified at GS-15 of the General 
Schedule or below, or the rate of basic pay for which is less than 120% 
of the minimum rate of basic pay fixed for GS-15, who have no policy-
making role with respect to agency programs. Such individuals may 
include chauffeurs, private secretaries, stenographers, and others 
holding positions of a similar nature whose exclusion would be 
consistent with the basic criterion

[[Page 495]]

set forth in paragraph (a) of this section. See Sec. 2634.904(a)(4) for 
possible coverage by confidential disclosure rules.
    (c) Procedure. (1) The exclusion of any individual from reporting 
requirements pursuant to this section will be effective as of the time 
the employing agency files with the Office of Government Ethics a list 
and description of each position for which exclusion is sought, and the 
identity of any incumbent employees in those positions. Exclusions 
should be requested prior to due dates for the reports which such 
employees would otherwise have to file.
    (2) If the Office of Government Ethics finds that one or more 
positions has been improperly excluded, it will advise the agency and 
set a date for the filing of the report.

[57 FR 11806, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 58 
FR 38912, July 21, 1993; 71 FR 28233, May 16, 2006]



Sec. 2634.204  Employment of sixty days or less.

    (a) In general. Any public filer or nominee who, as determined by 
the official specified in this paragraph, is not reasonably expected to 
perform the duties of an office or position described in Sec. 
2634.201(c) or Sec. 2634.202 of this subpart for more than 60 days in 
any calendar year shall not be subject to the reporting requirements of 
Sec. 2634.201 (b), (c), or (e) of this subpart. This determination will 
be made by:
    (1) The designated agency ethics official or Secretary concerned, in 
a case to which the provisions of Sec. 2634.201 (b) or (e) of this 
subpart (relating to new entrant and termination reports) would 
otherwise apply; or
    (2) The Director of the Office of Government Ethics, in a case to 
which the provisions of Sec. 2634.201(c) of this subpart (relating to 
nominee reports) would otherwise apply.
    (b) Alternative reporting. Any new entrant who is exempted from 
filing a public financial report under paragraph (a) of this section and 
who is a special Government employee is subject to confidential 
reporting under Sec. 2634.903(b). See Sec. 2634.904(a)(2).
    (c) Exception. If the public filer or nominee actually performs the 
duties of an office or position referred to in paragraph (a) of this 
section for more than 60 days in a calendar year, the public report 
otherwise required by:
    (1) Section 2634.201 (b) or (c) of this subpart (relating to new 
entrant and nominee reports) shall be filed within 15 calendar days 
after the sixtieth day of duty; and
    (2) Section 2634.201(e) of this subpart (relating to termination 
reports) shall be filed as provided in that paragraph.

[57 FR 11806, Apr. 7, 1992, as amended at 71 FR 28233, May 16, 2006]



Sec. 2634.205  Special waiver of public reporting requirements.

    (a) General rule. In unusual circumstances, the Director of the 
Office of Government Ethics may grant a request for a waiver of the 
public reporting requirements under this subpart for an individual who 
is reasonably expected to perform, or has performed, the duties of an 
office or position for fewer than 130 days in a calendar year, but only 
if the Director determines that:
    (1) The individual is a special Government employee, as defined in 
18 U.S.C. 202(a), who performs temporary duties either on a full-time or 
intermittent basis;
    (2) The individual is able to provide services specially needed by 
the Government;
    (3) It is unlikely that the individual's outside employment or 
financial interests will create a conflict of interest; and
    (4) Public financial disclosure by the individual is not necessary 
under the circumstances.
    (b) Procedure. (1) Requests for waivers must be submitted to the 
Office of Government Ethics, via the requester's agency, within 10 days 
after an employee learns that he will hold a position which requires 
reporting and that he will serve in that position for more than 60 days 
in any calendar year, or upon serving in such a position for more than 
60 days, whichever is earlier.
    (2) The request shall consist of:
    (i) A cover letter which identifies the individual and his position, 
states the approximate number of days in a calendar year which he 
expects to serve in that position, and requests a waiver of

[[Page 496]]

public reporting requirements under this section;
    (ii) An enclosure which states the reasons for the individual's 
belief that the conditions of paragraphs (a) (1) through (4) of this 
section are met in the particular case; and
    (iii) The report otherwise required by this subpart B, as a factual 
basis for the determination required by this section. The report shall 
bear the legend at the top of page 1: ``CONFIDENTIAL: WAIVER REQUEST 
PENDING PURSUANT TO 5 CFR 2634.205.''
    (3) The agency in which the individual serves shall advise the 
Office of Government Ethics as to the justification for a waiver.
    (4) In the event a waiver is granted, the report shall not be 
subject to the public disclosure requirements of Sec. 2634.603; 
however, the waiver request cover letter shall be subject to those 
requirements. In the event that a waiver is not granted, the 
confidential legend shall be removed from the report, and the report 
shall be subject to public disclosure; however, the waiver request cover 
letter shall not then be subject to public disclosure.

(Approved by the Office of Management and Budget under control number 
3209-0004)

[57 FR 11806, Apr. 7, 1992, as amended at 59 FR 34756, July 7, 1994]



                  Subpart C_Contents of Public Reports

    Source: 57 FR 11808, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.301  Interests in property.

    (a) In general. Each financial disclosure report filed pursuant to 
this subpart shall include a brief description of any interest in 
property held by the filer at the end of the reporting period in a trade 
or business, or for investment or the production of income, having a 
fair market value in excess of $1,000. The report shall designate the 
category of value of the property in accordance with paragraph (d) of 
this section. Each item of real and personal property shall be disclosed 
separately. Note that for Individual Retirement Accounts (IRA's), 
brokerage accounts, trusts, mutual or pension funds and other entities 
with portfolio holdings, each underlying asset must be separately 
disclosed, unless the entity qualifies for special treatment under Sec. 
2634.310 of this subpart.
    (b) Types of property reportable. Subject to the exceptions in 
paragraph (c) of this section, examples of the types of property 
required to be reported include, but are not limited to:
    (1) Real estate;
    (2) Stocks, bonds, securities, and futures contracts;
    (3) Livestock owned for commercial purposes;
    (4) Commercial crops, either standing or held in storage;
    (5) Antiques or art held for resale or investment;
    (6) Beneficial interests in trusts and estates;
    (7) Deposits in banks or other financial institutions;
    (8) Pensions and annuities;
    (9) Mutual funds;
    (10) Accounts or other funds receivable; and
    (11) Capital accounts or other asset ownership in a business.
    (c) Exceptions. The following property interests are exempt from the 
reporting requirements under paragraphs (a) and (b) of this section:
    (1) Any personal liability owed to the filer, spouse, or dependent 
child by a spouse, or by a parent, brother, sister, or child of the 
filer, spouse, or dependent child;
    (2) Personal savings accounts (defined as any form of deposit in a 
bank, savings and loan association, credit union, or similar financial 
institution) in a single financial institution or holdings in a single 
money market mutual fund, aggregating $5,000 or less in that institution 
or fund;
    (3) A personal residence of the filer or spouse, as defined in Sec. 
2634.105(l); and
    (4) Financial interests in any retirement system of the United 
States (including the Thrift Savings Plan) or under the Social Security 
Act.
    (d) Valuation categories. The valuation categories specified for 
property items are as follows:
    (1) Not more than $15,000;
    (2) Greater than $15,000 but not more than $50,000;

[[Page 497]]

    (3) Greater than $50,000 but not more than $100,000;
    (4) Greater than $100,000 but not more than $250,000;
    (5) Greater than $250,000 but not more than $500,000;
    (6) Greater than $500,000 but not more than $1,000,000; and
    (7) Greater than $1,000,000;
    (8) Provided that, with respect to items held by the filer alone or 
held jointly by the filer with the filer's spouse and/or dependent 
children, the following additional categories over $1,000,000 shall 
apply:
    (i) Greater than $1,000,000 but not more than $5,000,000;
    (ii) Greater than $5,000,000 but not more than $25,000,000;
    (iii) Greater than $25,000,000 but not more than $50,000,000; and
    (iv) Greater than $50,000,000.
    (e) Valuation of interests in property. A good faith estimate of the 
fair market value of interests in property may be made in any case in 
which the exact value cannot be obtained without undue hardship or 
expense to the filer. Fair market value may also be determined by:
    (1) The purchase price (in which case, the filer should indicate 
date of purchase);
    (2) Recent appraisal;
    (3) The assessed value for tax purposes (adjusted to reflect the 
market value of the property used for the assessment if the assessed 
value is computed at less than 100 percent of that market value);
    (4) The year-end book value of nonpublicly traded stock, the year-
end exchange value of corporate stock, or the face value of corporate 
bonds or comparable securities;
    (5) The net worth of a business partnership;
    (6) The equity value of an individually owned business; or
    (7) Any other recognized indication of value (such as the last sale 
on a stock exchange).

    Example 1. An official has a $4,000 savings account in Bank A. His 
spouse has a $2,500 certificate of deposit issued by Bank B and his 
dependent daughter has a $200 savings account in Bank C. The official 
does not have to disclose the deposits, as the total value of the 
deposits in any one bank does not exceed $5,000. Note, however, that the 
source and the amount of interest income from any bank is required to be 
reported under Sec. 2634.302(b) of this subpart if it exceeds the 
reporting threshold for income. See Sec. 2634.309 of this subpart for 
disclosure coverage of spouses and dependent children.
    Example 2. Public filer R has a collection of post-impressionist 
paintings which have been carefully selected over the years. From time 
to time, as new paintings have been acquired to add to the collection, R 
has made sales of both less desirable works from his collection and 
paintings of various schools which he acquired through inheritance. 
Under these circumstances, R must report the value of all the paintings 
he retains as interests in property pursuant to this section, as well as 
income from the sales of paintings pursuant to Sec. 2634.302(b) of this 
subpart. Recurrent sales from a collection indicate that the collection 
is being held for investment or the production of income.
    Example 3. A reporting individual has investments which her broker 
holds as an IRA and invests in stocks, bonds, and mutual funds. Each 
such asset having a fair market value in excess of $1,000 at the close 
of the reporting period must be separately listed, and the value must be 
shown. See Sec. 2634.311(c) of this subpart for attachment of brokerage 
statements in lieu of listing, in the event of extensive holdings. Note 
that for a mutual fund held in this IRA investment account, its 
underlying assets must also be separately detailed, unless it qualifies 
as an excepted investment fund, pursuant to Sec. 2634.310 of this 
subpart.

[57 FR 11808, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 65 
FR 69656, Nov. 20, 2000; 71 FR 28233, May 16, 2006]



Sec. 2634.302  Income.

    (a) Noninvestment income. (1) Each financial disclosure report filed 
pursuant to this subpart shall disclose the source, type, and the actual 
amount or value, of earned or other noninvestment income in excess of 
$200 from any one source which is received by the filer or has accrued 
to his benefit during the reporting period, including:
    (i) Salaries, fees, commissions, wages and any other compensation 
for personal services (other than from United States Government 
employment);
    (ii) Retirement benefits (other than from United States Government 
employment, including the Thrift Savings Plan, or from Social Security);

[[Page 498]]

    (iii) Any honoraria, and the date services were provided, including 
payments made or to be made to charitable organizations on behalf of the 
filer in lieu of honoraria; and
    (iv) Any other noninvestment income, such as prizes, awards, or 
discharge of indebtedness.

    Note: In calculating the amount of an honorarium, subtract any 
actual and necessary travel expenses incurred by the recipient and one 
relative. For example, if such expenses are paid or reimbursed by the 
honorarium source, they shall not be counted as part of the honorarium 
payment; if the expenses are paid or reimbursed by the individual 
receiving the honorarium, the amount of honorarium shall be reduced by 
the amount of such expenses.
    Example 1. An official is a participant in a retirement plan of 
Coastal Airlines. Pursuant to such plan, the official and his spouse 
receive passage on some Coastal flights without charge, and they receive 
passage on other flights at a discounted fare. The difference between 
what Coastal charges members of the public generally and what the 
official and his spouse are charged for a particular flight is deemed 
income in-kind and must be disclosed by this reporting individual if it 
exceeds the $200 threshold.
    Example 2. An official serves on the board of directors at a bank, 
for which he receives a $500 fee each calendar quarter. He also receives 
an annual fee of $1,500 for service as trustee of a private trust. In 
both instances, such fees received or earned during the reporting period 
must be disclosed, and the actual amount must be shown.

    (2) In the case of payments to charitable organizations in lieu of 
honoraria, public filers shall also file a separate confidential listing 
of recipients, along with dates and amounts of payments, to the extent 
known. (See 5 U.S.C. app. 102(a)(1)(A) and app. 501(c).)
    (b) Investment income. Each financial disclosure report filed 
pursuant to this subpart shall disclose:
    (1) The source and type of investment income, characterized as 
dividends, rents, interest, capital gains, or income from qualified or 
excepted trusts or excepted investment funds (see Sec. 2634.310 of this 
subpart), which is received by the filer or accrued to his benefit 
during the reporting period, and which exceeds $200 in amount or value 
from any one source. Examples include, but are not limited to, income 
derived from real estate, collectible items, stocks, bonds, notes, 
copyrights, pensions, mutual funds, the investment portion of life 
insurance contracts, loans, and personal savings accounts (as defined in 
Sec. 2634.301(c)(2) of this subpart). Note that for entities with 
portfolio holdings, such as Individual Retirement Accounts (IRA's), 
brokerage accounts, trusts, and mutual or pension funds, each underlying 
source of income must be separately disclosed, unless the entity 
qualifies for special treatment under Sec. 2634.310 of this subpart. 
The amount or value of income from each reported source shall also be 
disclosed and categorized in accordance with the following table:
    (i) Not more than $1,000;
    (ii) Greater than $1,000 but not more than $2,500;
    (iii) Greater than $2,500 but not more than $5,000;
    (iv) Greater than $5,000 but not more than $15,000;
    (v) Greater than $15,000 but not more than $50,000;
    (vi) Greater than $50,000 but not more than $100,000;
    (vii) Greater than $100,000 but not more than $1,000,000; and
    (viii) Greater than $1,000,000;
    (ix) Provided that, with respect to investment income of the filer 
alone or joint investment income of the filer with the filer's spouse 
and/or dependent children, the following additional categories over 
$1,000,000 shall apply:
    (A) Greater than $1,000,000 but not more than $5,000,000; and
    (B) Greater than $5,000,000.
    (2) The source, type, and the actual amount or value of gross income 
from a business, distributive share of a partnership, joint business 
venture income, payments from an estate or an annuity or endowment 
contract, or any other items of income not otherwise covered by 
paragraphs (a) or (b)(1) of this section which are received by the filer 
or accrued to his benefit during the reporting period and which exceed 
$200 from any one source.

    Example 1. An official rents out a portion of his residence. He 
receives rental income of $600 from one individual for four months and 
$1,200 from another individual for the remaining eight months of the 
year covered by his incumbent financial disclosure report. He must 
identify the property, specify the type of income (rent), and indicate 
the category of the total amount of rent received. (He

[[Page 499]]

must also disclose the asset information required by Sec. 2634.301 of 
this subpart.)
    Example 2. A reporting individual has three savings accounts with 
Bank A. One is in his name and earned $85 in interest during the 
reporting period. One is in a joint account with his spouse and earned 
$120 in interest. One is in his name and his dependent daughter's name 
and earned $35 in interest. Since the aggregate interest income from 
this source exceeds $200, the official must disclose the name of the 
bank, the type of income, and the category of the total amount of 
interest earned from all three accounts. (He must also disclose the 
accounts as assets under Sec. 2634.301 of this subpart if, in the 
aggregate, they total more than $5,000 in that bank.)
    Example 3. An official has an ownership interest in a fast-food 
restaurant, from which she receives $10,000 in annual income. She must 
specify on her financial disclosure report the type of income, such as 
partnership distributive share or gross business income, and indicate 
the actual amount of such income. (Additionally, she must describe the 
business and categorize its asset value, pursuant to Sec. 2634.301 of 
this subpart).

[57 FR 11808, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 63 
FR 43068, Aug. 12, 1998; 65 FR 69656, Nov. 20, 2000; 71 FR 28233, May 
16, 2006]

    Effective Date Note: At 63 FR 43068, Aug. 12, 1998, in Sec. 
2634.302, paragraph (a)(2) was revised and immediately stayed 
indefinitely.



Sec. 2634.303  Purchases, sales, and exchanges.

    (a) In general. Except as indicated in Sec. 2634.308(b) of this 
subpart, each financial disclosure report filed pursuant to this subpart 
shall include a brief description, the date and value (using the 
categories of value in Sec. 2634.301(d) of this subpart) of any 
purchase, sale, or exchange by the filer during the reporting period, in 
which the amount involved in the transaction exceeds $1,000:
    (1) Of real property, other than a personal residence of the filer 
or spouse, as defined in Sec. 2634.105(l) of this part; and
    (2) Of stocks, bonds, commodity futures, mutual fund shares, and 
other forms of securities.
    (b) Exceptions. (1) Any transaction solely by and between the 
reporting individual, his spouse, and dependent children need not be 
reported under paragraph (a) of this section.
    (2) Transactions involving Treasury bills, notes, and bonds; money 
market mutual funds or accounts; and personal savings accounts (as 
defined in Sec. 2634.301(c)(2) of this subpart) need not be reported 
when occurring at rates, terms, and conditions available generally to 
members of the public. Likewise, transactions involving portfolio 
holdings of trusts and investment funds described in Sec. 2634.310 (b) 
and (c) of this subpart need not be reported.
    (3) Any transaction which occurred at a time when the reporting 
individual was not a Federal Government officer or employee need not be 
reported under paragraph (a) of this section.

    Example 1. An official sells her personal residence in Virginia for 
$100,000 and purchases a personal residence in the District of Columbia 
for $200,000. She need not report the sale of the Virginia residence or 
the purchase of the D.C. residence.
    Example 2. An official sells his beach home in Maryland for $50,000. 
Because he has rented it out for one month every summer, it does not 
qualify as a personal residence. He must disclose the sale under this 
section and any capital gain over $200 realized on the sale under Sec. 
2634.302 of this subpart.
    Example 3. An official sells a ranch to his dependent daughter. The 
official need not report the sale because it is a transaction between 
the reporting individual and a dependent child; however, any capital 
gain, except for that portion attributable to a personal residence, is 
required to be reported under Sec. 2634.302 of this subpart.
    Example 4. An official sells an apartment building and realizes a 
loss of $100,000. He must report the sale of the building if the sale 
price of the property exceeds $1,000; however, he need not report 
anything under Sec. 2634.302 of this subpart, as the sale did not 
result in a capital gain.

[57 FR 11808, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 71 
FR 28233, May 16, 2006]



Sec. 2634.304  Gifts and reimbursements.

    (a) Gifts. Except as indicated in Sec. 2634.308(b), each financial 
disclosure report filed pursuant to this subpart shall contain the 
identity of the source, a brief description, and the value of all gifts 
aggregating more than $305 in value which are received by the filer 
during the reporting period from any one source. For in-kind travel-
related gifts, include a travel itinerary, dates, and nature of expenses 
provided.

[[Page 500]]

    (b) Reimbursements. Except as indicated in Sec. 2634.308(b), each 
financial disclosure report filed pursuant to this subpart shall contain 
the identity of the source, a brief description (including a travel 
itinerary, dates, and the nature of expenses provided), and the value of 
any travel-related reimbursements aggregating more than $305 in value, 
which are received by the filer during the reporting period from any one 
source.
    (c) Exclusions. Reports need not contain any information about gifts 
and reimbursements to which the provisions of this section would 
otherwise apply which are received from relatives (see Sec. 
2634.105(o)) or during a period in which the filer was not an officer or 
employee of the Federal Government. Additionally, any food, lodging, or 
entertainment received as ``personal hospitality of any individual,'' as 
defined in Sec. 2634.105(k), need not be reported. See also exclusions 
specified in the definitions of gift and reimbursement, at Sec. 
2634.105(h) and (n).
    (d) Aggregation exception. Any gift or reimbursement with a fair 
market value of $122 or less need not be aggregated for purposes of the 
reporting rules of this section. However, the acceptance of gifts, 
whether or not reportable, is subject to the restrictions imposed by 
Executive Order 12674, as modified by Executive Order 12731, and the 
implementing regulations on standards of ethical conduct.

    Example 1. An official accepts a print, a pen and pencil set, and a 
letter opener from a community service organization he has worked with 
solely in his private capacity. He determines, in accordance with 
paragraph (e) of this section, that these gifts are valued as follows:

Gift 1--Print: $190
Gift 2--Pen and pencil set: $145
Gift 3--Letter opener: $20
    The official must disclose Gifts 1 and 2, since together they 
aggregate more than $305 in value from the same source. Gift 3 need not 
be aggregated, because its value does not exceed $122.
    Example 2. An official receives the following gifts from a single 
source:

1. Dinner for two at a local restaurant--$120.
2. Round-trip taxi fare to meet donor at the restaurant--$25.
3. Dinner at donor's city residence--(value uncertain).
4. Round-trip airline transportation and hotel accommodations to visit 
Epcot Center in Florida-$400.
5. Weekend at donor's country home, including duck hunting and tennis 
match--(value uncertain).
    The official need only disclose Gift 4. Gift 1 falls within the 
exclusion in Sec. 2634.105(h)(4) for food and beverages not consumed in 
connection with a gift of overnight lodging. Gifts 3 and 5 need not be 
disclosed because they fall within the exception for personal 
hospitality of an individual. Gift 2 need not be aggregated and 
reported, because its value does not exceed $122.
    Example 3. An official receives free tickets from an outside source 
for himself and his spouse to attend an awards banquet at a local club. 
The value of each ticket is $150. Even though this is a gift which 
exceeds the more than $305 threshold amount for disclosure, the official 
need not report it, because of the exclusion in Sec. 2634.105(h)(4) for 
food and beverages not consumed in connection with a gift of overnight 
lodging.
    Note: Prior to accepting this gift of tickets, the individual should 
consult ethics officials at his agency to determine whether standards of 
conduct rules will permit acceptance, depending on whether or not the 
donor is a prohibited source and the exact nature of the event.
    Example 4. An official is asked to speak at an out-of-town meeting 
on a matter which is unrelated to her official duties and her agency. 
The round-trip airfare exceeds $305. If the official pays for the ticket 
and is then reimbursed by the organization to which she spoke, she must 
disclose this reimbursement under paragraph (b) of this section. If the 
organization simply provided the ticket, that must be disclosed as a 
gift under paragraph (a) of this section.

    (e) Valuation of gifts and reimbursements. The value to be assigned 
to a gift or reimbursement is its fair market value. For most 
reimbursements, this will be the amount actually received. For gifts, 
the value should be determined in one of the following manners:
    (1) If the gift has been newly purchased or is readily available in 
the market, the value shall be its retail price. The filer need not 
contact the donor, but may contact a retail establishment selling 
similar items to determine the present cost in the market.
    (2) If the item is not readily available in the market, such as a 
piece of art, a handmade item, or an antique, the filer may make a good 
faith estimate of the value of the item.

[[Page 501]]

    (3) The term readily available in the market means that an item 
generally is available for retail purchase in the metropolitan area 
nearest to the official's residence.

    Example. Items such as a pen and pencil set, letter opener, leather 
case or engraved pen are generally available in the market and can be 
determined by contacting stores which sell like items and ascertaining 
the retail price of each.
    Note: The market value of a ticket entitling the holder to attend an 
event which includes food, refreshments, entertainment or other benefits 
is the face value of the ticket, which may exceed the actual cost of the 
food and other benefits. The value of food and beverages may be 
excludable under Sec. 2634.105(h)(4), if applicable, by making a good 
faith estimate, or by determining their actual cost from the caterer, 
restaurant, or similar source.

    (f) Waiver rule in the case of certain gifts--(1) In general. In 
unusual cases, the value of a gift as defined in Sec. 2634.105(h) need 
not be aggregated for reporting threshold purposes under this section, 
and therefore the gift need not be reported on an SF 278, if the 
Director of OGE receives a written request for and issues a waiver, 
after determining that:
    (i) Both the basis of the relationship between the grantor and the 
grantee and the motivation behind the gift are personal; and
    (ii) No countervailing public purpose requires public disclosure of 
the nature, source, and value of the gift.

    Example to paragraph (f)(1). i. The Secretary of Education and her 
spouse receive the following two wedding gifts:
    A. Gift 1--A crystal decanter valued at $285 from the Secretary's 
former college roommate and lifelong friend, who is a real estate broker 
in Wyoming.
    B. Gift 2--A gift of a print valued at $300 from a business partner 
of the spouse, who owns a catering company.
    ii. Under these circumstances, the Director of OGE may grant a 
request for a waiver of the requirement to aggregate and report on an SF 
278 each of these gifts.

    (2) Public disclosure of waiver request. If approved in whole or in 
part, the cover letter requesting the waiver shall be subject to the 
public disclosure requirements in Sec. 2634.603 of this part.
    (3) Procedure. (i) A public filer seeking a waiver under this 
paragraph (f) shall submit a request to the Office of Government Ethics, 
through his agency. The request shall be made by a cover letter which 
identifies the filer and his position and which states that a waiver is 
requested under this section.
    (ii) On an enclosure to the cover letter, the filer shall set forth:
    (A) The identity and occupation of the donor;
    (B) A statement that the relationship between the donor and the 
filer is personal in nature;
    (C) A statement that neither the donor nor any person or 
organization who employs the donor or whom the donor represents, 
conducts or seeks business with, engages in activities regulated by, or 
is directly affected by action taken by, the agency employing the filer. 
If the preceding statement cannot be made without qualification, the 
filer shall indicate those qualifications, along with a statement 
demonstrating that he plays no role in any official action which might 
directly affect the donor or any organization for which the donor works 
or serves as a representative; and
    (D) A brief description of the gift and the value of the gift.
    (iii) With respect to the information required in paragraph 
(f)(3)(ii) of this section, if a gift has more than one donor, the filer 
shall provide the necessary information for each donor.

[57 FR 11808, Apr. 7, 1992; 57 FR 62605, Dec. 31, 1992, as amended at 63 
FR 69992, Dec. 18, 1998; 64 FR 49640, Sept. 14, 1999; 65 FR 69656, Nov. 
20, 2000; 67 FR 61762, Oct. 2, 2002; 70 FR 12112, Mar. 11, 2005; 71 FR 
28233, May 16, 2006]



Sec. 2634.305  Liabilities.

    (a) In general. Each financial disclosure report filed pursuant to 
this subpart shall identify and include a brief description of the 
filer's liabilities over $10,000 owed to any creditor at any time during 
the reporting period, and the name of the creditors to whom such 
liabilities are owed. The report also shall designate the category of 
value of the liabilities in accordance with Sec. 2634.301(d) of this 
subpart, using the greatest amount owed to the creditor during the 
period.
    (b) Exceptions. The following are not required to be reported under 
paragraph (a) of this section:

[[Page 502]]

    (1) Personal liabilities owed to a spouse or to the parent, brother, 
sister, or child of the filer, spouse, or dependent child;
    (2) Any mortgage secured by a personal residence of the filer or his 
spouse;
    (3) Any loan secured by a personal motor vehicle, household 
furniture, or appliances, provided that the loan does not exceed the 
purchase price of the item which secures it; and
    (4) Any revolving charge account with an outstanding liability which 
does not exceed $10,000 at the close of the reporting period.

    Example: An incumbent official has the following debts outstanding 
at the end of the calendar year:
    1. Mortgage on personal residence--$80,000.
    2. Mortgage on rental property--$50,000.
    3. VISA Card--$1,000.
    4. Master Card--$11,000.
    5. Loan balance of $15,000, secured by family automobile purchased 
for $16,200.
    6. Loan balance of $10,500, secured by antique furniture purchased 
for $8,000.
    7. Loan from parents--$20,000.
    The loans indicated in items 2, 4, and 6 must be disclosed. Loan 1 
is exempt from disclosure under paragraph (b)(2) of this section because 
it is secured by the personal residence. Loan 3 need not be disclosed 
under paragraph (b)(4) of this section because it is considered to be a 
revolving charge account with an outstanding liability that does not 
exceed $10,000 at the end of the reporting period. Loan 5 need not be 
disclosed under paragraph (b)(3) of this section because it is secured 
by a personal motor vehicle which was purchased for more than the value 
of the loan. Loan 7 need not be disclosed because the creditors are 
persons specified in paragraph (b)(1) of this section.

[57 FR 11808, Apr. 7, 1992, as amended at 71 FR 28233, May 16, 2006]



Sec. 2634.306  Agreements and arrangements.

    Each financial disclosure report filed pursuant to this subpart 
shall identify the parties to and the date of, and shall briefly 
describe the terms of, any agreement or arrangement of the filer in 
existence at any time during the reporting period with respect to:
    (a) Future employment;
    (b) A leave of absence from employment during the period of the 
reporting individual's Government service;
    (c) Continuation of payments by a former employer other than the 
United States Government; and
    (d) Continuing participation in an employee welfare or benefit plan 
maintained by a former employer.

[57 FR 11808, Apr. 7, 1992, as amended at 71 FR 28234, May 16, 2006]



Sec. 2634.307  Outside positions.

    (a) In general. Each financial disclosure report filed pursuant to 
this subpart shall identify all positions held at any time by the filer 
during the reporting period, as an officer, director, trustee, general 
partner, proprietor, representative, executor, employee, or consultant 
of any corporation, company, firm, partnership, trust, or other business 
enterprise, any nonprofit organization, any labor organization, or any 
educational or other institution other than the United States.
    (b) Exceptions. The following need not be reported under paragraph 
(a) of this section:
    (1) Positions held in any religious, social, fraternal, or political 
entity; and
    (2) Positions solely of an honorary nature, such as those with an 
emeritus designation.

[57 FR 11808, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 71 
FR 28234, May 16, 2006]



Sec. 2634.308  Reporting periods and contents of public financial disclosure 

reports.

    (a) Incumbents. Each financial disclosure report filed pursuant to 
Sec. 2634.201(a) shall include on the standard form prescribed by the 
Office of Government Ethics consistent with subpart F of this part and 
in accordance with instructions issued by that Office, a full and 
complete statement of the information required to be reported according 
to the provisions of subpart C of this part, for the preceding calendar 
year (except for Sec. Sec. 2634.303 and 2634.304, relating to 
transactions and gifts/reimbursements, for which the reporting period 
does not include any portion of the previous calendar year during which 
the filer was not a Federal employee), and in the case of Sec. Sec. 
2634.306 and 2634.307, to include the additional period up to the date 
of filing.

[[Page 503]]

    (b) New entrants, nominees, and candidates. Each financial 
disclosure report filed pursuant to Sec. 2634.201(b), (c), or (d) shall 
include, on the standard form prescribed by the Office of Government 
Ethics consistent with subpart F of this part and in accordance with 
instructions issued by that Office, a full and complete statement of the 
information required to be reported according to the provisions of 
subpart C of this part, except for Sec. 2634.303 (relating to 
purchases, sales, and exchanges of certain property) and Sec. 2634.304 
(relating to gifts and reimbursements). The following special rules 
apply:
    (1) Interests in property. For purposes of Sec. 2634.301 of this 
subpart, the report shall include all interests in property specified by 
that section which are held on or after a date which is fewer than 
thirty-one days before the date on which the report is filed.
    (2) Income. For puposes of Sec. 2634.302 of this subpart, the 
report shall include all income items specified by that section which 
are received or accrued during the period beginning on January 1 of the 
preceding calendar year and ending on the date on which the report is 
filed, except as otherwise provided by Sec. 2634.606 relating to 
updated disclosure for nominees.
    (3) Liabilities. For purposes of Sec. 2634.305 of this subpart, the 
report shall include all liabilities specified by that section which are 
owed during the period beginning on January 1 of the preceding calendar 
year and ending fewer than thirty-one days before the date on which the 
report is filed.
    (4) Agreements and arrangements. For purposes of Sec. 2634.306 of 
this subpart, the report shall include only those agreements and 
arrangements which still exist at the time of filing.
    (5) Outside positions. For purposes of Sec. 2634.307 of this 
subpart, the report shall include all such positions held during the 
preceding two calendar years and the current calendar year up to the 
date of filing.
    (6) Certain sources of compensation. Except in the case of the 
President, the Vice President, or a candidate referred to in Sec. 
2634.201(d), the report shall also identify the filer's sources of 
compensation which exceed $5,000 during either of the preceding two 
calendar years or during the current calendar year up to the date of 
filing, and shall briefly describe the nature of the duties performed or 
services rendered by the reporting individual for each such source of 
compensation. Information need not be reported, however, which is 
considered confidential as a result of a privileged relationship, 
established by law, between the reporting individual and any person. The 
report also need not contain any information with respect to any person 
for whom services were provided by any firm or association of which the 
reporting individual was a member, partner, or employee, unless such 
individual was directly involved in the provision of such services.

    Example: A nominee who is a partner or employee of a law firm and 
who has worked on a matter involving a client from which the firm 
received over $5,000 in fees during a calendar year must report the name 
of the client only if the value of the services rendered by the nominee 
exceeded $5,000. The name of the client would not normally be considered 
confidential.

    (c) Termination reports. Each financial disclosure report filed 
under Sec. 2634.201(e) shall include, on the standard form prescribed 
by the Office of Government Ethics consistent with subpart F of this 
part and in accordance with instructions issued by that Office, a full 
and complete statement of the information required to be reported 
according to the provisions of subpart C of this part, for the period 
beginning on the last date covered by the most recent financial 
disclosure report filed by the reporting individual under this part, or 
on January 1 of the preceding calendar year, whichever is later, and 
ending on the date on which the filer's employment terminates.

[57 FR 11808, Apr. 7, 1992, as amended at 67 FR 57938, Sept. 13, 2002; 
71 FR 28234, May 16, 2006]



Sec. 2634.309  Spouses and dependent children.

    (a) Special disclosure rules. Each report required by the provisions 
of subpart B of this part shall also include the following information 
with respect to the spouse or dependent children of the reporting 
individual:

[[Page 504]]

    (1) Income. For purposes of Sec. 2634.302 of this subpart:
    (i) With respect to a spouse, the source but not the amount of items 
of earned income (other than honoraria) which exceed $1,000 from any one 
source; and if items of earned income are derived from a spouse's self-
employment in a business or profession, the nature of the business or 
profession but not the amount of the earned income;
    (ii) With respect to a spouse, the source and the actual amount or 
value of any honoraria received by or accrued to the spouse (or payments 
made or to be made to charity on the spouse's behalf in lieu of 
honoraria) which exceed $200 from any one source, and the date on which 
the services were provided; and
    (iii) With respect to a spouse or dependent child, the type and 
source, and the amount or value (category or actual amount, in 
accordance with Sec. 2634.302 of this subpart), of all other income 
exceeding $200 from any one source, such as investment income from 
interests in property (if the property itself is reportable according to 
Sec. 2634.301 of this subpart).

    Example 1. The spouse of a filer is employed as a teller at Bank X 
and earns $23,000 per year. The report must disclose that the spouse is 
employed by Bank X. The amount of the spouse's earnings need not be 
disclosed.
    Example 2. The spouse of a reporting individual is self-employed as 
a pediatrician. The report must disclose that he is a physician, but 
need not disclose the amount of income.

    (2) Gifts and reimbursements. For purposes of Sec. 2634.304 of this 
subpart, gifts and reimbursements received by a spouse or dependent 
child which are not received totally independent of their relationship 
to the filer.
    (3) Interests in property, transactions, and liabilities. For 
purposes of Sec. Sec. 2634.301, 2634.303, and 2634.305 of this subpart, 
all information concerning property interests, transactions, or 
liabilities referred to by those sections of a spouse or dependent 
child, unless the following three conditions are satisfied:
    (i) The filer certifies that the item represents the spouse's or 
dependent child's sole financial interest or responsibility, and that 
the filer has no specific knowledge regarding that item;
    (ii) The item is not in any way, past or present, derived from the 
income, assets or activities of the filer; and
    (iii) The filer neither derives, nor expects to derive, any 
financial or economic benefit from the item.
    Note: One who prepares a joint tax return with his spouse will 
normally derive a financial or economic benefit from assets held by the 
spouse, and will also be charged with knowledge of such items; therefore 
he could not avail himself of this exception. Likewise, a trust for the 
education of one's minor child normally will convey a financial benefit 
to the parent. If so, the assets of the trust would be reportable on a 
financial disclosure statement.
    (b) Exception. For reports filed as a new entrant, nominee, or 
candidate under Sec. 2634.201(b), (c), or (d), no information regarding 
gifts and reimbursements or transactions is required for a spouse or 
dependent child.
    (c) Divorce and separation. A reporting individual need not report 
any information about:
    (1) A spouse living separate and apart from the reporting individual 
with the intention of terminating the marriage or providing for 
permanent separation;
    (2) A former spouse or a spouse from whom the reporting individual 
is permanently separated; or
    (3) Any income or obligations of the reporting individual arising 
from dissolution of the reporting individual's marriage or permanent 
separation from a spouse.

[57 FR 11808, Apr. 7, 1992, as amended at 71 FR 28234, May 16, 2006]



Sec. 2634.310  Trusts, estates, and investment funds.

    (a) In general. (1) Except as otherwise provided in this section, 
each financial disclosure report shall include the information required 
by this subpart about the holdings of and income from the holdings of 
any trust, estate, investment fund or other financial arrangement from 
which income is received by, or with respect to which a beneficial 
interest in principal or income is held by, the filer, his spouse, or 
dependent child.

[[Page 505]]

    (2) No information, however, is required about a nonvested 
beneficial interest in the principal or income of an estate or trust. A 
vested interest is a present right or title to property, which carries 
with it an existing right of alienation, even though the right to 
possession or enjoyment may be postponed to some uncertain time in the 
future. This includes a future interest when one has a right, defeasible 
or indefeasible, to the immediate possession or enjoyment of the 
property, upon the ceasing of another's interest. Accordingly, it is not 
the uncertainty of the time of enjoyment in the future, but the 
uncertainty of the right of enjoyment (title and alienation), which 
differentiates a ``vested'' and a ``nonvested'' interest.

    Note to paragraph (a):
    Nothing in this section requires the reporting of the holdings or 
income of a revocable inter vivos trust (also known as a ``living 
trust'') with respect to which the filer, his spouse or dependent child 
has only a remainder interest, whether or not vested, provided that the 
grantor of the trust is neither the filer, the filer's spouse, nor the 
filer's dependent child. Furthermore, nothing in this section requires 
the reporting of the holdings or income of a revocable inter vivos trust 
from which the filer, his spouse or dependent child receives any 
discretionary distribution, provided that the grantor of the trust is 
neither the filer, the filer's spouse, nor the filer's dependent child.

    (b) Qualified trusts and excepted trusts. (1) A filer should not 
report information about the holdings of or income from holdings of, any 
qualified blind trust (as defined in Sec. 2634.403) or any qualified 
diversified trust (as defined in Sec. 2634.404). For a qualified blind 
trust, a public financial disclosure report shall disclose the category 
of the aggregate amount of the trust's income attributable to the 
beneficial interest of the filer, his spouse, or dependent child in the 
trust. For a qualified diversified trust, a public financial disclosure 
report shall disclose the category of the aggregate amount of income 
with respect to such a trust which is actually received by the filer, 
his spouse, or dependent child, or applied for the benefit of any of 
them.
    (2) In the case of an excepted trust, a filer should indicate the 
general nature of its holdings, to the extent known, but will not 
otherwise need to report information about the trust's holdings or 
income from holdings. The category of the aggregate amount of income 
from an excepted trust which is received by or accrued to the benefit of 
the filer, his spouse, or dependent child shall be reported on public 
financial disclosure reports. For purposes of this part, the term 
``excepted trust'' means a trust:
    (i) Which was not created directly by the filer, spouse, or 
dependent child; and
    (ii) The holdings or sources of income of which the filer, spouse, 
or dependent child have no specific knowledge through a report, 
disclosure, or constructive receipt, whether intended or inadvertent.
    (c) Excepted investment funds. (1) No information is required under 
paragraph (a) of this section about the underlying holdings of or income 
from underlying holdings of an excepted investment fund as defined in 
paragraph (c)(2) of this section, except that the fund itself shall be 
identified as an interest in property and/or a source of income. Filers 
must also disclose the category of value of the fund interest held; 
aggregate amount of income from the fund which is received by or accrued 
to the benefit of the filer, his spouse, or dependent child; and value 
of any transactions involving shares or units of the fund.
    (2) For purposes of financial disclosure reports filed under the 
provisions of this part, an ``excepted investment fund'' means a widely 
held investment fund (whether a mutual fund, regulated investment 
company, common trust fund maintained by a bank or similar financial 
institution, pension or deferred compensation plan, or any other 
investment fund), if:
    (i)(A) The fund is publicly traded or available; or
    (B) The assets of the fund are widely diversified; and
    (ii) The filer neither exercises control over nor has the ability to 
exercise control over the financial interests held by the fund.
    (3) A fund is widely diversified if it holds no more than 5% of the 
value of its portfolio in the securities of any one issuer (other than 
the United

[[Page 506]]

States Government) and no more than 20% in any particular economic or 
geographic sector.

[57 FR 11808, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 67 
FR 37967, May 31, 2002; 71 FR 28234, May 16, 2006]



Sec. 2634.311  Special rules.

    (a) Political campaign funds. Political campaign funds, including 
campaign receipts and expenditures, need not be included in any report 
filed under this part. However, if the individual has authority to 
exercise control over the fund's assets for personal use rather than 
campaign or political purposes, that portion of the fund over which such 
authority exists must be reported.
    (b) Certificates of Divestiture. Each report required by the 
provisions of this subpart shall identify those sales which have 
occurred pursuant to a Certificate of Divestiture during the period 
covered by such report. See subpart J of this part for the rules 
relating to the issuance of such Certificates.
    (c) Reporting standards. (1) In lieu of entering data on a schedule 
of the report form designated by the Office of Government Ethics, a 
filer may attach to the reporting form a copy of a brokerage report, 
bank statement, or other material, which, in a clear and concise 
fashion, readily discloses all information which the filer would 
otherwise have been required to enter on the schedule.
    (2) In lieu of reporting the category of amount or value of any item 
listed in any report filed pursuant to this subpart, a filer may report 
the actual dollar amount of such item.

[57 FR 11808, Apr. 7, 1992, as amended at 71 FR 28234, May 16, 2006]



                       Subpart D_Qualified Trusts

    Source: 57 FR 11814, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.401  General considerations.

    (a) Statutory standards governing qualified trusts--(1) Types of 
qualified trusts and their relationshp to conflict of interest laws. The 
Ethics in Government Act of 1978 created, and provided special public 
financial disclosure requirements for, two types of qualified trusts, It 
was envisioned that the use of those trusts by Government employees 
would reduce the real and apparent conflicts of interest which might 
arise between the financial interests held by those employees (or 
attributable to them) and their official responsibilities.
    (i) Interested party means a Government employee, his spouse, any 
minor or dependent child, and their representatives in any case in which 
the employee, spouse, or child has a beneficial interest in the 
principal or income of a trust proposed for certification or certified.
    (ii) Qualified blind trust. The most universally adaptable qualified 
trust is the qualified blind trust, defined in Sec. 2634.403 of this 
subpart. A trust is considered to be ``blind'' only with regard to those 
trust assets about which no interested party has knowledge. When an 
interested party originally places assets in trust, that party still 
possesses knowledge about those assets. Those original assets remain 
financial interests of the Government official for purposes of 18 U.S.C. 
208 or for any other Federal conflict of interest statutes or 
regulations, until the trustee notifies the official either that a 
particular original asset has been disposed of or that the asset's value 
is less than $1000. If the trustee sells or disposes of original trust 
assets and then uses the proceeds to acquire new trust holdings, or if 
the trustee reinvests trust income to acquire new trust holdings, a 
``blind'' trust exists for those new holdings because the interested 
parties possess no information about the newly acquired assets. The 
holdings of a ``blind'' trust are not classified as financial interests 
of the Government official for purposes of 18 U.S.C. 208 or for any 
other Federal conflict of interest statutes or regulations.
    (iii) Qualified diversified trust. The second type of qualified 
trust established by the Act is the qualified diversified trust, defined 
in Sec. 2634.404 of this subpart. Among other requirements, a trust is 
considered to be ``diversified'' if it can be demonstrated, to the 
satisfaction of the Director of the Office of Government Ethics, 
pursuant to Sec. 2634.404(b), that the trust assets comprise a widely 
diversified portfolio of

[[Page 507]]

readily marketable securities, and do not initially include the 
securities of any entities having substantial activities in the same 
area as the Government official's primary area of responsiblity. The 
trust holdings are never classified as financial interests of the 
Government official for purposes of 18 U.S.C. 208 or for any other 
Federal conflict of interest statutes or regulations.
    (2) Independence of trustees and other fiduciaries. Under the Act 
and Sec. 2634.406 of this subpart, those entities that are authorized 
by the Act or by the trust instrument to manage the assets of, and to 
control and administer, either a qualified blind or a qualified 
diversified trust must be independent, in fact and in appearance, from 
those parties who hold beneficial interests in the trust.
    (i) The independence of trustees is facilitated by limiting the 
entities which may serve in this capacity to certain financial 
institutions.
    (ii) In addition to the trustee, the Act extends the independence 
requirement to other entities which manage trust assets or administer 
the trust, including officers and employees of the trustee, any other 
entity designated in the trust instrument to perform fiduciary duties on 
behalf of the trust, and the officers and employees of any other entity 
that is involved in the management or control of the trust, such as 
investment counsel, investment advisers, accountants, or tax preparers 
and their assistants.
    (iii) Those entities governed by the Act will be considered 
``independent'' for purposes of this subpart if, among other 
requirements, the entities are not affiliated with, associated with, 
related to, or subject to the control or influence of, any of the 
parties that hold a beneficial interest in the trust.
    (3) Communications betweeen trust administrators and interested 
parties. For purposes of Federal ethics laws, the most important feature 
of those qualified trusts that are recognized under the Act is the 
separation which those trusts foster between parties with beneficial 
interests in the trust and entities which manage trust assets and 
administer the trust instrument. Once a qualified trust has been 
certified, the beneficiaries and their representatives are expressly 
prohibited from commenting directly to the trustee about matters 
relating to asset management and trust holdings, or to trust 
administration and activities. Likewise, the trustee must make 
investment decisions for the trust without consulting, or being 
controlled by, interested parties, and the trustee is prohibited from 
informing interested parties directly about trust activities, except to 
the limited extent required under the Act. The Act requires the trustee 
to provide trust beneficiaries with certain standard periodic reports. 
Beyond receipt of these standard reports, trust beneficiaries are 
prohibited from actively attempting to obtain, and from passively but 
knowningly obtaining, directly or indirectly, any additional information 
which the Act prohibits beneficiaries from obtaining, including 
information about trust holdings and activities. Finally, instruments 
creating qualified trusts must require interested parties and trustees 
to make all permissible communications relating to the trust and to its 
assets in writing, with the prior written approval of the Director of 
the Office of Government Ethics. Sections 2634.403-2634.405 and 2634.407 
of this subpart contain standards implementing these restrictions.
    (4) Trust and beneficiary taxes. For tax purposes, because a trust 
is a separate entity distinct from its beneficiaries, a trustee must 
file an annual fiduciary tax return for the trust (IRS Form 1041). In 
addition, the trust beneficiaries must report income received from the 
trust on their individual tax returns. The Act establishes special 
filing procedures to be used by the trustee and trust beneficiaries in 
order to maintain the substantive separation between trust beneficiaries 
and trust administration. For beneficiaries of qualified blind trusts, 
the trustee sends a Schedule K-1 form summarizing trust income in 
appropriate categories to enable the beneficiaries to file individual 
tax returns. For beneficiaries of qualified diversified trusts, the 
statute requires the trustee to file the individual

[[Page 508]]

tax returns on behalf of the trust beneficiaries. The beneficiaries must 
transmit to the trustee materials concerning taxable transactions and 
occurrences outside of the trust, pursuant to the requirements in each 
trust instrument which detail this procedure.
    (b) Policy considerations and objectives underlying the qualified 
trust program. (1) Prior to enactment of the Act's qualified trust 
provisions, there was no accepted definition of a properly formulated 
blind or diversified trust. However, there was general agreement that 
the use of blind or diversified trusts often reduced the potential for 
conflicts of interest. If Government employees do not know the exact 
identity, nature, and extent of their financial interests, then the 
employees cannot be influenced in the performance of their official 
duties by those interests. Their official actions, under these 
circumstances, should be free from collateral attack arising out of real 
or apparent conflicts of interest. Therefore, the most significant 
objective to be achieved through the use of a blind trust is the lack of 
knowledge, or actual ``blindness,'' by a Government official with 
respect to the holdings in his trust. The same goal may be achieved 
through the use of a diversified trust, if that trust holds securities 
from different issuers in different economic sectors, and if the trust's 
interest in any one issuer is limited. Under these conditions, it is 
unlikely that official actions taken by the Government employee who 
holds a beneficial interest in the trust would affect individual 
securities to such a degree that the overall value of the trust's 
portfolio would be materially enhanced. Thus, wide diversification is 
tantamount to actual ``blindness.''
    (2) Because, for the trusts certified under the provisions of this 
subpart D, the Government official is or will become blind to the 
identity and nature of his actual trust holdings, the reporting 
requirements of section 102(f)(1) of the Act and subparts C or I of this 
part, which generally require Government filers to disclose the contents 
of a trust's portfolio, do not apply. See Sec. 2634.310 of this part. 
Further, as discussed in paragraphs (a)(1) (ii) and (iii) of this 
section, 18 U.S.C. 208 and other Federal conflict of interest laws do 
not generally apply to the holdings of qualified trusts, except in the 
case of the original assets transferred to a qualified blind trust until 
notice that a particular original asset has been disposed of or that the 
asset's value is below $1,000.
    (c) Qualified trust provisions of the regulation. This subpart D 
prescribes standards which implement the statutory requirements and 
policy objectives underlying the Act's qualified blind and diversified 
trust provisions. The Office of Government Ethics will apply the 
standards of this subpart to specific cases.
    (1) Classification as a qualified trust. In order to be classified 
as a qualified trust for purposes of the Act, blind and diversified 
trusts must satisfy the following three requirements:
    (i) The trust document must conform to announced standards. As 
provided under Sec. 2634.403(b) for blind trusts and Sec. 2634.404(c) 
for diversified trusts, the trust document must conform to the model 
trust instruments which are drafted and distributed by the Office of 
Government Ethics for use by interested parties when drafting their 
trust arrangements. Prior to certifying a trust under Sec. 2634.405 of 
this subpart, as discussed in paragraph (c)(1)(iii) of this section, the 
Office of Government Ethics must approve every proposed trust document. 
In addition to other required provisions, the trust instrument must 
contain language which implements the communications restrictions 
discussed in paragraph (a)(3) of this section. By requiring interested 
parties, trustees, and other signatories to the trust instrument to 
include communications provisions, these regulations compel the 
signatories diligently to safeguard against inadvertent disclosures of 
precluded information to the interested parties.
    (ii) Truly independent fiduciaries. As discussed in paragraph (a)(2) 
of this section, the fiduciaries in charge of administering and managing 
the assets of a qualified trust must be actually and apparently 
independent of the parties who hold beneficial interests in the trust, 
and of their representatives. To ensure such independence, Sec. 
2634.406 of

[[Page 509]]

this subpart limits the range of permissible fiduciaries. Before a trust 
may be classified as a qualified blind or diversified trust, the 
Director of the Office of Government Ethics must conclude, in his 
judgment, that the trust fiduciaries named in the trust instrument 
satisfy the standards for independence contained in Sec. 2634.406 of 
this subpart.
    (iii) Certification by the Office of Government Ethics. Before a 
trust may be classified as a qualified blind or diversified trust, the 
Director of the Office of Government Ethics must certify, in accordance 
with the standards and procedures established in Sec. 2634.405 of this 
subpart, that the trust meets the requirements of section 102(f) of the 
Act and of this subpart, that certification is in the public interest, 
and that certification is consistent with the policies established by 
these provisions and by other applicable laws and regulations. This 
certification is essential so that the Office can ensure, in advance 
that the proposed trust arrangement satisfies the established standards.
    (2) Certification of pre-existing trusts. Normally, those trusts 
certified as qualified trusts by the Director of the Office of 
Government Ethics under Sec. 2634.405 of this subpart are newly created 
trust arrangements, formulated in accordance with established standards 
by representatives of the interested parties in consultation with the 
Office of Government Ethics. However, the Director may certify a pre-
existing trust as a qualified blind or qualified diversified trust under 
Sec. 2634.403 (blind) or Sec. 2634.404 (diversified) if he determines 
that such action is appropriate and is sufficient to ensure compliance 
with applicable laws and regulations. The pre-existing trust proposed 
for certification must meet both the generally applicable trust 
requirements, and several special requirements contained in Sec. 
2634.405(c) of this subpart, including that all of the parties to the 
original trust agree to administer the trust in accordance with the 
requirements of this subpart. The pre-existing trust may be certified 
only if all of the conditions of this subpart are fulfilled, and if the 
requisite confidentially can be assured with respect to the trust.
    (3) Reporting requirements. Once a trust is classified as a 
qualified blind or qualified diversified trust in the manner discussed 
under paragraph (c)(1) of this section, Sec. 2634.310(b) applies less 
inclusive financial disclosure requirements to the trust assets.
    (4) Sanctions and enforcement. Section 2634.702 provides civil 
sanctions which apply to any Government official or trust fiduciary who 
violates his obligations under the Act, its implementing regulations, or 
the trust instrument. In addition, the Office of Government Ethics has 
authority under the Act to impose appropriate administrative or other 
sanctions. Subpart E of this part delineates the procedure which must be 
followed with respect to the revocation of trust certificates and 
trustee approvals.
    (d) Drafting and implementation of the qualified trust instrument. 
(1) The overview of the qualified trust program contained in this 
section cannot anticipate every concern or question, or discuss every 
scenario which might arise in the course of formulating and implementing 
a qualified trust instrument. The Office of Government Ethics should be 
contacted by an interested party or by his professional representatives 
if the Act, the implementing regulations, and the trust instrument 
itself do not provide guidance in a particular instance.
    (2) No trust will be considered ``qualified'' for purposes of the 
Act until the Office of Government Ethics certifies the trust prior to 
execution. The Office of Government Ethics makes available to attorneys 
model trust agreements for use in drafting proposed trust agreements 
which are to be submitted to the Office for certification. Attorneys are 
cautioned to consider each model provision in light of the circumstances 
presented by the particular case, and to modify provisions to the extent 
that such modifications are necessary or appropriate. Attorneys should 
not rely uncritically upon the language of the model agreements. 
However, many of the model provisions implement the minimum requirements 
which must be contained in any trust instrument certified by the Office. 
Certificates of Independence for fiduciaries must be executed in the 
form indicated in appendix A of this part.

[[Page 510]]

    (3) The Office of Government Ethics does not draft trust instruments 
for use in individual cases. However, its staff is always willing to 
cooperate with attorneys and to make its experience available to them in 
developing appropriate trust instruments which satisfy applicable 
Federal laws, Executive orders and regulations. If the use of a 
qualified trust is contemplated in a particular case, it is strongly 
recommended that the interested parties or their representatives contact 
the Office of Government Ethics as early as possible.
    (4) Prior to trust certification, prospective trustees or their 
representatives should schedule with the staff of the Office of 
Government Ethics an appointment for an orientation to the specialized 
requirements and procedures which have been established by the Act and 
the regulations with respect to qualified trust administration.



Sec. 2634.402  Special notice for advice-and-consent nominees.

    (a) In general. In any case in which the establishment of a 
qualified diversified trust is contemplated with respect to a reporting 
individual whose nomination is being considered by a Senate committee, 
that individual shall inform the committee of the intention to establish 
a qualified diversified trust at the time of filing a financial 
disclosure report with the committee.
    (b) Applicability. The rule of this section is not applicable to 
members of the uniformed services or Foreign Service officers. The 
special notice requirement of this section shall not preclude an 
individual from seeking the certification of a qualified blind trust or 
qualified diversified trust after the Senate has given its advice and 
consent to a nomination.



Sec. 2634.403  Qualified blind trusts.

    (a) Definition. A qualified blind trust is a trust in which the 
filer, his spouse, or his minor or dependent child has a beneficial 
interest, which is certified pursuant to Sec. 2634.405 of this subpart 
by the Director of the Office of Government Ethics, and which includes 
in the trust instrument in the provisions required by paragraph (b) of 
this section, and has an independent trustee as defined in Sec. 
2634.406 of this subpart. See section 102(f)(3) of the Act.
    (b) Required provisions. The instrument which establishes a blind 
trust must adhere substantively to model drafts circulated by the Office 
of Government Ethics, and must provide that:
    (1) The primary purpose of the blind trust is to confer on the 
independent trustee and any other designated fiduciary the sole 
responsibility to administer the trust and to manage trust assets 
without the participation by, or the knowledge of, any interested party. 
This includes the duty to decide when and to what extent the original 
assets of the trust are to be sold or disposed of and in what 
investments the proceeds of sale are to be reinvested;
    (2) The trustee and any other designated fiduciary in the exercise 
of their authority and discretion to manage and control the assets of 
the trust shall not consult or notify any interested party;
    (3) None of the assets initially placed in the trust's portfolio 
shall include assets the holding of which by any interested party would 
be prohibited by the Act, by the implementing regulations, or by any 
other applicable Federal law, Executive order, or regulation;
    (4) Any portfolio asset transferred to the trust by an interested 
party is free of any restriction with respect to its transfer or sale, 
except as fully described in schedules attached to the trust instrument, 
and as approved by the Director of the Office of Government Ethics;
    (5) During the term of the trust, the interested parties shall not 
pledge, mortgage, or otherwise encumber their interests in the property 
held by the trust;
    (6) The trustee shall promptly notify the filer and the Director of 
the Office of Government Ethics when any particular asset transferred to 
the trust by an interested party has been completely disposed of or when 
the value of that asset is reduced to less than $1,000;
    (7) The trustee or his designee shall prepare the trust's income tax 
return. Under no circumstances shall the trustee or any other designated 
fiduciary disclose publicly, or to any interested party, the trust's tax 
return, any

[[Page 511]]

information relating to that return except for a summary of trust income 
in categories necessary for an interested party to complete his 
individual tax return, or any information which might specifically 
identify current trust assets, or those assets which have been sold or 
disposed of from trust holdings, other than information relating to the 
sale or disposition of original trust assets under paragraph (b)(6) of 
this section;
    (8) An interested party shall not receive any report on trust 
holdings and sources of trust income, except that the trustee shall, 
without identifying specifically any asset or holding:
    (i) Report quarterly the aggregate market value of the assets 
representing the interested party's interest in the trust;
    (ii) Report the net income or loss of the trust, and any other 
information necessary to enable the interested party to complete his 
individual income tax return; and
    (iii) Report annually, for purposes of section 102(a)(1)(B) of the 
Act, the aggregate amount of the trust's income attributable to the 
interested party's beneficial interest in the trust, categorized in 
accordance with Sec. 2634.302(b);
    (9) There shall be no direct or indirect communication with respect 
to the trust between an interested party and the independent trustee or 
any other designated fiduciary with respect to the trust unless:
    (i) Such communication is in writing, with the prior written 
approval of the Director of the Office of Government Ethics and is filed 
with the Director in accordance with Sec. 2634.408(c) of this subpart; 
and
    (ii) It relates only:
    (A) To the request for a distribution from the trust, which does not 
specify whether the distribution shall be made in cash or in kind;
    (B) To the general financial interest and needs of the interested 
party including, but not limited to, a preference for maximizing current 
income or long-term capital appreciation;
    (C) To notification of the trustee by the interested party that the 
interested party is prohibited by subsequently applicable statute, 
Executive order, or regulation from holding an asset, and to directions 
to the trustee that the trust shall not hold that asset; or
    (D) To instructions to the trustee to sell all of an asset which was 
initially placed in the trust by an interested party, and which, in the 
determination of the filer creates a real or apparent conflict due to 
duties subsequently assumed by the filer (but the filer is not required 
to give such directions);
    Note: By the terms of paragraph (3)(C)(vi) of section 102(f) of the 
Act, communications which solely consist of requests for distributions 
of cash or other unspecified assets of the trust are not required to be 
in writing. Further, there is no statutory mechanism for pre-screening 
of proposed communications. However, experience of the Office of 
Government Ethics over the years dictates the necessity of prohibiting 
any oral communications between the trustee and an interested party with 
respect to the trust and pre-screening all proposed written 
communications, to prevent inadvertent prohibited communications and 
preserve confidence in the Federal qualified trust program. Accordingly, 
under its authority pursuant to paragraph (3)(D) of section 102(f) of 
the Act, the Office of Government Ethics will not approve proposed trust 
instruments which do not contain language conforming to this policy, 
except in unusual cases where compelling necessity is demonstrated to 
the Director, in his sole discretion.
    (10) The interested parties shall not take any action to obtain, and 
shall take reasonable action to avoid receiving, information with 
respect to the holdings and the sources of income of the trust, 
including a copy of any trust tax return filed by the trustee, or any 
information relating to that return, except for the reports and 
information specified in paragraphs (b)(6) and (b)(8) of this section;
    (11) An independent trustee and any other designated fiduciary shall 
file, with the Director of the Office of Government Ethics by May 15th 
following any calendar year during which the trust was in existence, a 
properly executed Certificate of Compliance in the form prescribed in 
appendix B to this part. In addition, the independent trustee and such 
fiduciary shall maintain and make available for inspection by the Office 
of Government Ethics, as it may from time to time direct, the trust's 
books of account and other

[[Page 512]]

records and copies of the trust's tax returns for each taxable year of 
the trust;
    (12) Neither the trustee nor any other designated fiduciary shall 
knowingly and willfully, or negligently:
    (i) Disclose to any interested party any information regarding the 
trust that may not be disclosed pursuant to title I of the Act, the 
implementing regulations, or the trust instrument;
    (ii) Acquire any holding the ownership of which is prohibited by, or 
not in accordance with, the terms of the trust instrument;
    (iii) Solicit advice from any interested party with respect to the 
trust, if such solicitation is prohibited by title I of the Act, the 
implementing regulations, or the trust instrument; or
    (iv) Fail to file any document required by title I of the Act or by 
this part;
    (13) An interested party shall not knowingly and willfully, or 
negligently:
    (i) Solicit or receive any information regarding the trust that may 
not be disclosed pursuant to title I of the Act, the implementing 
regulations, or the trust instrument; or
    (ii) Fail to file any document required by title I of the Act or by 
this part;
    (14) No person, including investment counsel, investment advisers, 
accountants, and tax preparers, may be employed or consulted by an 
independent trustee or any other designated fiduciary to assist in any 
capacity to administer the trust or to manage and control the trust 
assets, unless the following four conditions are met:
    (i) When any interested party learns about such employment or 
consultation, the person must sign the trust instrument as a party, 
subject to the prior approval of the Director of the Office of 
Government Ethics;
    (ii) Under all the facts and circumstances, the person is determined 
pursuant to the requirements for eligible entities under Sec. 2634.406 
of this subpart to be independent of any interested party with respect 
to the trust arrangement;
    (iii) The person is instructed by the independent trustee or other 
designated fiduciary not to disclose publicly or to any interested party 
information which might specifically identify current trust assets which 
have been sold or disposed of from trust holdings, other than 
information relating to the sale or disposition of original trust assets 
under paragraph (b)(6) of this section; and
    (iv) The person is instructed by the trustee or other designated 
fiduciary to have no direct communication with respect to the trust with 
any interested party, and to make all indirect communications with 
respect to the trust only through the trustee, pursuant to paragraph 
(b)(9) of this section;
    (15) The trustee shall not acquire by purchase, grant, gift, 
exercise of option, or otherwise, without the prior written approval of 
the Director of the Office of Government Ethics, securities, cash, or 
other property from any interested party;
    (16) The existence of any banking or other client relationship 
between any interested party and an independent trustee or any other 
designated fiduciary shall be disclosed in schedules attached to the 
trust instrument, and no other such relationship shall be instituted 
unless that relationship is disclosed to the Director of the Office of 
Government Ethics; and
    (17) The independent trustee and any other designated fiduciary 
shall be compensated in accordance with schedules annexed to the trust 
instrument.

[57 FR 11814, Apr. 7, 1992; 57 FR 21854, May 22, 1992]



Sec. 2634.404  Qualified diversified trusts.

    (a) Definition. A qualified diversified trust is any trust in which 
the filer, his spouse, or his minor or dependent child has a beneficial 
interest, which is certified pursuant to Sec. 2634.405 of this subpart 
by the Director of the Office of Government Ethics, which has a 
portfolio as specified in paragraph (b) of this section, and which 
includes in the trust instrument the provisions required by paragraph 
(c) of this section and has an independent trustee as defined in Sec. 
2634.406 of this subpart. See section 102(f)(4)(B) of the Act.
    (b) Required portfolio--(1) Standards for initial assets. It must be 
established, to the satisfaction of the Director of the Office of 
Government Ethics, that

[[Page 513]]

the initial assets of the trust proposed for certification comprise a 
widely diversified portfolio of readily marketable securities. The 
reporting individual or other interested party shall provide the 
Director with a detailed list of the securities proposed for inclusion 
in the portfolio, specifying their fair market values and demonstrating 
that these securities meet the requirements of this paragraph. The 
initial trust portfolio may not contain securities of issuers having 
substantial activities in the reporting individual's primary area of 
responsibility. If requested by the Director, the designated agency 
ethics official for the reporting individual's employing agency shall 
certify whether the proposed portfolio meets this standard.
    (2) Diversification standards. For purposes of paragraph (b)(1) of 
this section, a portfolio will be widely diversified if:
    (i) The value of the securities concentrated in any particular or 
limited industrial, economic or geographic sector is no more than twenty 
percent of the total; and
    (ii) The value of the securities of any single issuer (other than 
the United States Government) is no more than five percent of the total.
    (3) Marketability standard. For purposes of paragraph (b)(1) of this 
section, a security will be readily marketable if:
    (i) Daily price quotations for the security appear regularly in 
newspapers of general circulation; and
    (ii) The trust holds the security in a quantity that does not unduly 
impair liquidity.
    (c) Required provisions. The instrument which establishes a 
diversified trust must adhere substantively to model drafts circulated 
by the Office of Government Ethics, and must provide that:
    (1) The primary purpose of the diversified trust is to confer on the 
independent trustee and any other designated fiduciary the sole 
responsibility to administer the trust and to manage trust assets 
without the participation by, or the knowledge of, any interested party. 
This includes the duty to decide when and to what extent the original 
assets of the trust are to be sold or disposed of and in what 
investments the proceeds of sale are to be reinvested;
    (2) The trustee and any other designated fiduciary in the exercise 
of their authority and discretion to manage and control the assets of 
the trust shall not consult or notify any interested party;
    (3) The trust's initial assets shall comprise a widely diversified 
portfolio of readily marketable securities, in accordance with the 
principles of paragraph (b) of this section, and the trustee shall not 
acquire additional securities in excess of the diversification 
standards;
    (4) Any portfolio asset transferred to the trust by an interested 
party is free of any restriction with respect to its transfer or sale, 
except as fully described in schedules attached to the trust instrument, 
and as approved by the Director of the Office of Government Ethics;
    (5) During the term of the trust, the interested parties shall not 
pledge, mortgage, or otherwise encumber their interests in the property 
held under the trust;
    (6) None of the assets initially placed in the trust's portfolio 
shall consist of securities of issuers having substantial activities in 
the reporting individual's primary area of Federal responsibility;
    (7) The trustee or designee shall prepare the trust's income tax 
return and, on behalf of any interested party, the personal income tax 
returns and similar tax documents which may contain information relating 
to the trust. Under no circumstances shall the trustee or any other 
designated fiduciary disclose publicly or to any interested party, any 
of the returns prepared by the trustee or his designee, any information 
relating to those returns, or any information which might specifically 
identify current trust assets, or those assets which have been sold or 
disposed of from trust holdings;
    (8) An interested party shall not receive any report on trust 
holding and sources of trust income, except that the trustee shall, 
without identifying specifically any asset or holding:
    (i) Report quarterly the aggregate market value of the assets 
representing

[[Page 514]]

the interested party's interest in the trust; and
    (ii) Report annually, for purposes of section 102(a)(1)(B) of the 
Act, the aggregate amount actually distributed from the trust to such 
interested party, or applied for the party's benefit;
    (9) There shall be no direct or indirect communication with respect 
to the trust between an interested party and the independent trustee or 
any other designated fiduciary unless:
    (i) Such communication is in writing, with the prior written 
approval of the Director of the Office of Government Ethics and is filed 
with the Director in accordance with Sec. 2634.408(c) of this subpart; 
and,
    (ii) It relates only:
    (A) To the request for a distribution from the trust, which does not 
specify whether the distribution shall be made in cash or in kind;
    (B) To the general financial interest and needs of the interested 
party including, but not limited to, a preference for maximizing current 
income or long-term capital appreciation; or
    (C) To information, documents, and funds concerning income tax 
obligations arising from sources other than the property held in trust, 
which are required by the trustee to enable him to file, on behalf of an 
interested party, the personal income tax returns and similar tax 
documents which may contain information relating to the trust;
    Note: By the terms of paragraph (3)(C)(vi) of section 102(f) of the 
Act, communications which soley consist of requests for distributions of 
cash or other unspecified assets of the trust are not required to be in 
writing. Further, there is no statutory mechanism for pre-screening of 
proposed communications. However, experience of the Office of Government 
Ethics over the years dictates the necessity of prohibiting any oral 
communications between the trustee and an interested party with respect 
to the trust and pre-screening all proposed written communications, to 
prevent inadvertent prohibited communications and preserve confidence in 
the Federal qualified trust program. Accordingly, under its authority 
pursuant to paragraph (3)(D) of section 102(f) of the Act, the Office of 
Government Ethics will not approve proposed trust instruments which do 
not contain language conforming to this policy, except in unusual cases 
where compelling necessity is demonstrated to the Director, in his sole 
discretion.
    (10) The interested parties shall not seek to obtain, and shall take 
reasonable action to avoid receiving, information with respect to trust 
holdings and sources of trust income, including a copy of any tax return 
filed by the trustee, or any information relating to that return, except 
for the reports and information specified in paragraph (c)(8) of this 
section;
    (11) An independent trustee and any other designated fiduciary shall 
file, with the Director of the Office of Government Ethics, by May 15 
following any calendar year during which the trust was in existence, a 
properly executed Certificate of Compliance in the form prescribed in 
appendix B to this part. In addition, the independent trustee and any 
other designated fiduciary shall maintain and make available for 
inspection by the Office of Government Ethics, as it may from time to 
time direct, the trust's books of account and other records and copies 
of the trust's tax returns for each taxable year of the trust;
    (12) Neither the trustee nor any other designated fiduciary shall 
knowingly and willfully, or negligently:
    (i) Disclose to any interested party any information regarding the 
trust that may not be disclosed pursuant to title I of the Act, the 
implementing regulations, or the trust instrument;
    (ii) Acquire any holding the ownership of which is prohibited by, or 
not in accordance with, the terms of the trust instrument;
    (iii) Solicit advice from any interested party with respect to the 
trust, if such solicitation is prohibited by title I of the Act, the 
implementing regulations, or the trust instrument; or
    (iv) Fail to file any document required by title I of the Act or by 
this part;
    (13) An interested party shall not knowingly and willfully, or 
negligently:
    (i) Solicit or receive any information regarding the trust that may 
not be disclosed pursuant to title I of the Act, the implementing 
regulations, or the trust instrument; or
    (ii) Fail to file any document required by title I of the Act or by 
this part;

[[Page 515]]

    (14) No person, including investment counsel, investment advisers, 
accountants, and tax preparers, may be employed or consulted by an 
independent trustee or any other designated fiduciary to assist in any 
capacity to administer the trust or to manage and control the trust 
assets, unless, the following four conditions are met:
    (i) When an interested party learns about such employment or 
consultation, the person must sign the trust instrument as a party, 
subject to the prior approval of the Director of the Office of 
Government Ethics;
    (ii) Under all the facts and circumstances, the person is determined 
pursuant to the requirements for eligible entities under Sec. 2634.406 
of this subpart to be independent of any interested party with respect 
to the trust arrangement;
    (iii) The person is instructed by the independent trustee or other 
designated fiduciary not to disclose publicly or to any interested party 
information which might specifically identify current trust assets or 
those assets which have been sold or disposed of from trust holdings; 
and
    (iv) The person is instructed by an independent trustee or other 
designated fiduciary to have no direct communication with respect to the 
trust with any interested party, and to make all indirect communications 
with respect to the trust only through the trustee, pursuant to 
paragraph (c)(9) of this section;
    (15) The trustee shall not acquire by purchase, grant, gift, 
exercise of option, or otherwise, without the prior written approval of 
the Director of the Office of Government Ethics, any securities, cash, 
or other property from any interested party;
    (16) The existence of any banking or other client relationship 
between any interested party and an independent trustee or other 
designated fiduciary shall be disclosed in schedules attached to the 
trust instrument, and no other such relationship shall be instituted 
unless that relationship is disclosed to the Director of the Office of 
Government Ethics; and
    (17) The independent trustee and any other designated fiduciary 
shall be compensated in accordance with schedules annexed to the trust 
instrument.
    (d) Personal income tax returns. In the case of a trust to which 
this section applies, the trustee shall be given power of attorney to 
prepare, and shall file, on behalf of any interested party, the personal 
income tax returns and similar tax documents which may contain 
information relating to the trust. Appropriate Internal Revenue Service 
power of attorney forms shall be used for this purpose.

[57 FR 11814, Apr. 7, 1992; 57 FR 21854, May 22, 1992]



Sec. 2634.405  Certification of trusts.

    (a) Standards. Before a trust may be classified as a qualified blind 
or a qualified diversified trust, under the provisions of Sec. 2634.403 
or Sec. 2634.404 of this subpart, respectively, the trust must be 
certified by the Director of the Office of Government Ethics.
    (1) A trust will be certified for purposes of this subpart only if:
    (i) It is established to the Director's satisfaction that the 
requirements of section 102(f) of the Act and this subpart have been 
met;
    (ii) Certification is in the public interest; and
    (iii) Certification is consistent with the policies established by 
the Act, this subpart and other applicable laws and regulations.
    (2) Certification will not be granted in any case in which, in the 
Director's sole judgment, such action would not be appropriate because 
of the ready availability of other remedies, the lack of any substantive 
ethical concern which would warrant the establishment of a qualified 
trust, or the nature or negligible value of the assets proposed for a 
trust's initial portfolio.
    (b) Certification procedures. The interested parties or their 
representatives should first consult the staff of the Office of 
Government Ethics concerning the appropriateness of, and requirements 
for, certification in the particular case. In order to assure timely 
trust certification, the interested parties shall be responsible for the 
expeditious submission to the Office of all required documents and 
responses to requests for information, including a statement that any 
interested party

[[Page 516]]

who will be a party to a certified trust instrument has read and 
understands the overview of executive branch qualified trusts in Sec. 
2634.401(a) of this subpart. Certification shall be indicated by a 
letter from the Director to the interested parties or their 
representatives.
    (c) Certification of pre-existing trusts. In addition to the 
normally applicable rules of this subpart D, other considerations apply 
to pre-existing trusts. Generally, in the case of a pre-existing trust 
whose terms do not permit amendments satisfying the rules of this 
subpart, all of the relevant parties (including the reporting 
individual, any other interested parties, the trustee of the pre-
existing trust, and all of its other parties and beneficiaries) will be 
required pursuant to section 102(f)(7) of the Act to enter into an 
umbrella agreement specifying that the pre-existing (underlying) trust 
will be administered in accordance with the provisions of this subpart. 
A parent or guardian may execute the umbrella agreement on behalf of a 
required participant who is a dependent child. The umbrella agreement 
will be certified as a qualified trust if all requirements of this 
subpart are fulfilled under conditions where required confidentiality 
with respect to the trust can be assured. A copy of the underlying trust 
instrument, and a list of its assets at the time the umbrella agreement 
is certified as a qualified trust (categorized as to value in accordance 
with Sec. 2634.301(d)), shall be filed with the executed umbrella trust 
instrument as specified by Sec. 2634.408(a)(1)(i) of this subpart.
    (d) Review of certification. The Office of Government Ethics shall 
maintain a program to assess, on a frequent basis, the appropriateness 
of any trust certification which has been granted.
    (e) Revocation of certification and modification of trust 
instrument. Certification of a trust may be revoked pursuant to the 
rules of subpart E of this part. The terms of a qualified trust may not 
be revoked or amended, except with the prior written approval of the 
Director, and upon a showing of necessity and appropriateness.



Sec. 2634.406  Independent trustees.

    (a) Standards. (1) The term independent trustee means any entity 
referred to in paragraph (a)(2) of this section which, under all the 
facts and circumstances, is determined by the Director of the Office of 
Government Ethics and in the Director's sole discretion, to be 
independent of any interested party with respect to a trust proposed for 
certification under this subpart. The term includes, unless the context 
indicates otherwise, in addition to the party to a trust instrument who 
is designated to serve as trustee, those parties who are designated to 
perform fiduciary duties. Approval of a proposed trustee or other 
designated fiduciary shall be granted only if it is established to the 
Director's satisfaction that the requirements of section 102 of the Act 
and this subpart have been met, and that approval in the case is in the 
public interest and consistent with the policies established by those 
provisions and other applicable laws and regulations.
    (2) Eligible entities. Eligibility to serve as a trustee or other 
fiduciary under this section is limited to a financial institution (not 
a person), not more than 10 percent of which is owned or controlled by a 
single individual, which is:
    (i) A bank, as defined in 12 U.S.C. 1841(c); or
    (ii) An investment adviser, as defined in 15 U.S.C. 80b-2(a)(11).
    Note: By the terms of paragraph (3)(A)(i) of section 102(f) of the 
Act, an individual who is an attorney, a certified public accountant, a 
broker, or an investment advisor is also eligible to serve as an 
independent trustee. However, experience of the Office of Government 
Ethics over the years dictates the necessity of limiting service as a 
trustee or other fiduciary to the financial institutions referred to in 
this paragraph, to maintain effective administration of trust 
arrangements and preserve confidence in the Federal qualified trust 
program. Accordingly, under its authority pursuant to paragraph (3)(D) 
of section 102(f) of the Act, the Office of Government Ethics will not 
approve proposed trustees or other fiduciaries who are not financial 
institutions, except in unusual cases where compelling necessity is 
demonstrated to the Director, in his sole discretion.
    (3) Requirements. No eligible entity shall be determined to be an 
independent trustee under this section unless:

[[Page 517]]

    (i) That entity is independent of and unassociated with any 
interested party so that it cannot be controlled or influenced in the 
administration of the trust by any interested party; and
    (ii) That entity is not and has not been affiliated with any 
interested party, and is not a partner of, or involved in any joint 
venture or other investment or business with, any interested party; and
    (iii) Any director, officer, or employee of such entity:
    (A) Is independent of and unassociated with any interested party so 
that such director, officer, or employee cannot be controlled or 
influenced in the administration of the trust by any interested party;
    (B) Is not and has not been employed by any interested party, not 
served as a director, officer, or employee of any organization 
affiliated with any interested party, and is not and has not been a 
partner of, or involved in any joint venture or other investment with, 
any interested party; and
    (C) Is not a relative of any interested party.
    (b) Approval procedures. (1) Appropriate documentation to establish, 
pursuant to the requirements of paragraph (a)(3) of this section, the 
independence of a proposed trustee or any other person to be designated 
in a trust instrument to perform fiduciary duties shall be submitted to 
the Office of Government Ethics in writing, including the Certificate of 
Independence in the form prescribed in appendix A of this part. The 
existence of any other banking or client relationship between an 
interested party and a proposed trustee or other designated fiduciary 
must be disclosed in such documentation, and may be subject to 
discontinuance as a condition of approval.
    (2) The Director shall indicate approval of a proposed trustee, and 
of any other person designated in the trust instrument to perform 
fiduciary duties, including those of an investment adviser, by reporting 
such approval in writing to the interested parties or to their 
representatives.
    (c) Review of approval. The Office of Government Ethics shall 
maintain a program to assess, on a frequent basis, the appropriateness 
of any approval which has been granted under this section.
    (d) Revocation of approval. Approval of a trustee or any other 
designated fiduciary may be revoked pursuant to the rules of subpart E 
of this part.



Sec. 2634.407  Restrictions on fiduciaries and interested parties.

    (a) Restrictions applicable to trustees and other fiduciaries. Any 
trustee or any other designated fiduciary of a qualified trust shall not 
knowingly or negligently:
    (1) Disclose any information to an interested party with respect to 
the trust that may not be disclosed under title I of the Act, the 
implementing regulations or the trust instrument;
    (2) Acquire any holding:
    (i) Directly from an interested party without the prior written 
approval of the Director; or
    (ii) The ownership of which is prohibited by, or not in accordance 
with, title I of the Act, the implementing regulations, the trust 
instrument, or with other applicable statutes and regulations;
    (3) Solicit advice from any interested party with respect to such 
trust, which solicitation is prohibited by title I of the Act, the 
implementing regulations, or the trust instrument; or
    (4) Fail to file any document required by the implementing 
regulations or the trust instrument.
    (b) Restrictions applicable to interested parties. An interested 
party to a qualified trust shall not knowingly or negligently:
    (1) Solicit or receive any information about the trust that may not 
be disclosed under title I of the Act, the implementing regulations or 
the trust instrument; or
    (2) Fail to file any document required by this subpart or the trust 
instrument.



Sec. 2634.408  Special filing requirements for qualified trusts.

    (a) The interested party. In the case of any qualified trust, the 
Government employee or other interested party shall:
    (1) Execution of the trust. Within thirty days after the trust is 
certified under Sec. 2634.405 of this subpart by the

[[Page 518]]

Director of the Office of Government Ethics, file with the Director a 
copy of:
    (i) The executed trust instrument of the trust (other than those 
provisions which relate to the testamentary disposition of the trust 
assets); and
    (ii) A list of the assets which were transferred to the trust, 
categorized as to value of each asset in accordance with Sec. 
2634.301(d).
    (2) Transfer of assets. Within thirty days of transferring an asset, 
other than cash, to a qualified trust, file a report with the Director 
of the Office of Government Ethics, which identifies and briefly 
describes each asset, categorized as to value in accordance with Sec. 
2634.301(d).
    (3) Dissolution of the trust. Within thirty days of the dissolution 
of a qualified trust:
    (i) File a report of the dissolution with the Director of the Office 
of Government Ethics; and
    (ii) File with the Director a list of assets of the trust at the 
time of the dissolution, categorized as to value in accordance with 
Sec. 2634.301(d).
    (b) Trustees and other designated fiduciaries. An independent 
trustee of a qualified trust, and any other person designated in the 
trust instrument to perform fiduciary duties, shall file, with the 
Director of the Office of Government Ethics by May 15th following any 
calendar year during which the trust was in existence, a properly 
executed Certificate of Compliance in the form prescribed by appendix B 
of this part. In addition, an independent trustee and other fiduciaries 
shall maintain and make available for inspection by the Office of 
Government Ethics, as it may from time to time direct, the trust's books 
of account and other records and copies of the trust's tax returns for 
each taxable year of the trust.
    (c) Written communications. All communications between an interested 
party and the trustee of a qualified trust must, under this subpart, 
have the prior written approval of the Director of the Office of 
Government Ethics. After such an approved written communication 
(including those communications described in Sec. 2634.403(b)(9) or 
Sec. 2634.404(c)(9) of this subpart) has been transmitted, the person 
initiating the communication shall file a copy of the communication 
within five days of its date, with the Director of the Office of 
Government Ethics.
    (d) Public access. Any document filed under the requirements of 
paragraph (a) of this section by a public filer, nominee, or candidate 
shall be subject to the public disclosure requirements of Sec. 
2634.603. Any document (and the information contained therein) inspected 
under the requirements of paragraph (b) of this section (other than a 
Certificate of Compliance), or filed under the requirements of paragraph 
(c) of this section, shall be exempt from the public disclosure 
requirements of Sec. 2634.603, and shall not be disclosed to any 
interested party.



Sec. 2634.409  OMB control number.

    The various model trust documents and Certificates of Independence 
and Compliance referenced in this subpart, together with the underlying 
regulatory provisions (and appendixes A, B and C to this part for the 
Certificates), are all approved by the Office of Management and Budget 
under control number 3209-0007.

[59 FR 34756, July 7, 1994]



    Subpart E_Revocation of Trust Certificates and Trustee Approvals

    Source: 57 FR 11821, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.501  Purpose and scope.

    (a) Purpose. This subpart establishes the procedures of the Office 
of Government Ethics for enforcement of the qualified blind trust, 
qualified diversified trust, and independent trustee provisions of title 
I of the Ethics in Government Act of 1978, as amended, and the 
regulation issued thereunder (subpart D of this part).
    (b) Scope. This subpart applies to all trust certifications and 
trustee approvals pursuant to Sec. Sec. 2634.405(a) and 2634.406(a), 
respectively.



Sec. 2634.502  Definitions.

    For purposes of this subpart (unless otherwise indicated):

[[Page 519]]

    (a) Senior Attorney means the Office of Government Ethics employee 
designated as the manager of the qualified trust program.
    (b) Trust restrictions means the applicable provisions of title I of 
the Ethics in Government Act of 1978, subpart D of this part, and the 
trust instrument.



Sec. 2634.503  Determinations.

    (a) Where the Senior Attorney concludes that violations or apparent 
violations of the trust restrictions exist and may warrant revocation of 
trust certification or trustee approval previously granted under Sec. 
2634.405 or Sec. 2634.406 of this subpart, the Senior Attorney may, 
pursuant to the procedure specified in paragraph (b) of this section, 
conduct a review of the matter, and may submit findings and a 
recommendation concerning final action to the Director of the Office of 
Government Ethics.
    (b) Review procedure. (1) In his review of the matter, the Senior 
Attorney shall perform such examination and analysis of violations or 
apparent violations as he deems reasonable.
    (2) The Senior Attorney shall provide an independent trustee and, if 
appropriate, the interested parties, with:
    (i) Notice that revocation of trust certification or trustee 
approval is under consideration pursuant to the procedures in this 
subpart;
    (ii) A summary of the violation or apparent violations which shall 
state the preliminary facts and circumstances of the transactions or 
occurrences involved with sufficient particularity to permit the 
recipients to determine the nature of the allegations; and
    (iii) Notice that the recipients may present evidence and submit 
statements on any matter in issue within ten business days of the 
recipient's actual receipt of the notice and summary.
    (c) Determination. (1) In making determinations with respect to the 
violations or apparent violations under this section, the Director of 
the Office of Government Ethics shall consider the findings and 
recommendations of final action submitted by the Senior Attorney under 
paragraph (a) of this section, as well as the written record of review 
compiled under paragraph (b) of this section.
    (2) If the Director finds a violation or violations of the trust 
restrictions he may, as he deems appropriate:
    (i) Issue an order revoking trust certification or trust approval;
    (ii) Resolve the matter through any other remedial action within the 
Director's authority;
    (iii) Order further examination and analysis of the violation or 
apparent violation; or
    (iv) Decline to take further action.
    (3) If an order of revocation is issued, the parties to the trust 
instrument shall be expeditiously notified in writing. The notice shall 
state the basis for the revocation, and shall inform the parties either 
that the trust is no longer a qualified blind or qualified diversified 
trust for any purpose under Federal law; or that the independent trustee 
may no longer serve the trust in any capacity, and must be replaced by a 
successor, who is subject to the prior written approval of the Director; 
or both where appropriate.



                           Subpart F_Procedure

    Source: 57 FR 11821, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.601  Report forms.

    (a) The Office of Government Ethics provides, through the Federal 
Supply Service of the General Services Administration (GSA), a standard 
form, the SF 278 (Public Financial Disclosure Report), for reporting the 
information described in subpart B of this part on executive branch 
public disclosure. The Office of Government Ethics also provides two 
uniform formats relating to confidential financial disclosure: OGE Form 
450 (Confidential Financial Disclosure Report) for reporting the 
information described in subpart I of this part on executive branch 
confidential disclosure; and OGE Optional Form 450-A (Confidential 
Certificate of No New Interests) for voluntary use by certain employees 
in lieu of filing an annual OGE Form 450, if authorized by their agency, 
in accordance with Sec. 2634.905(b) of subpart I of this part. Supplies 
of the two confidential forms are to be reproduced locally by each

[[Page 520]]

agency, from a camera-ready copy or an electronic format made available 
by the Office of Government Ethics.
    (b) Subject to the prior written approval of the Director of the 
Office of Government Ethics, an agency may require employees to file 
additional confidential financial disclosure forms which supplement 
either or both of the standard forms referred to in paragraph (a) of 
this section, if necessary because of special or unique agency 
circumstances. The Director may approve such agency forms when, in his 
opinion, the supplementation is shown to be necessary for a 
comprehensive and effective agency ethics program to identify and 
resolve conflicts of interest. See Sec. Sec. 2634.103 and 2634.901.
    (c) The information collection and recordkeeping requirements have 
been approved by the Office of Management and Budget under control 
number 3209-0001 for the SF 278, and control number 3209-0006 for OGE 
Form 450/SF 450. OGE Optional Form 450-A has been determined not to 
require an OMB paperwork control number, as its use is strictly optional 
for employees, it is used exclusively by current Government employees, 
and it does not require affirmative disclosure of substantive 
information.

[57 FR 11821, Apr. 7, 1992, as amended at 58 FR 38912, July 21, 1993; 59 
FR 34756, July 7, 1994; 62 FR 33976, June 24, 1997; 63 FR 43068, Aug. 
12, 1998; 71 FR 28234, May 16, 2006]



Sec. 2634.602  Filing of reports.

    (a) Except as otherwise provided in this section, the reporting 
individual shall file financial disclosure reports required under this 
part with the designated agency ethics official or his delegate at the 
agency where the individual is employed, or was employed immediately 
prior to termination of employment, or in which he will serve. Detailees 
shall file with their primary agency. Reports are due at the times 
indicated in Sec. 2634.201 of subpart B (public disclosure) or Sec. 
2634.903 of subpart I (confidential disclosure) of this part, unless an 
extension is granted pursuant to the provisions of subparts B or I of 
this part.
    (b) The President, the Vice President, any independent counsel, and 
persons appointed by independent counsel under 28 U.S.C. chapter 40, 
shall file the public financial disclosure reports required under this 
part with the Director of the Office of Government Ethics.
    (c)(1) Each agency receiving the public financial disclosure reports 
required to be filed under this part by the following individuals shall 
transmit copies to the Director of the Office of Government Ethics:
    (i) The Postmaster General;
    (ii) The Deputy Postmaster General;
    (iii) The Governors of the Board of Governors of the United States 
Postal Service;
    (iv) The designated agency ethics official;
    (v) Employees of the Executive Office of the President who are 
appointed under 3 U.S.C. 105(a)(2)(A) or (B) or 3 U.S.C. 107(a)(1)(A) or 
(b)(1)(A)(i), and employees of the Office of Vice President who are 
appointed under 3 U.S.C. 106(a)(1)(A) or (B); and
    (vi) Officers and employees in, and nominees to, offices or 
positions which require confirmation by the Senate, other than members 
of the uniformed services.
    (2) Prior to transmitting a copy of a report to the Director of the 
Office of Government Ethics, the designated agency ethics official or 
his delegate shall review that report in accordance with Sec. 2634.605 
of this subpart, except for his own report, which shall be reviewed by 
the agency head or by a delegate of the agency head.
    (3) For nominee reports, the Director of the Office of Government 
Ethics shall forward a copy to the Senate committee that is considering 
the nomination. (See Sec. 2634.605(c) of this subpart for special 
procedures regarding the review of such reports.)
    (d) The Director of the Office of Government Ethics shall file his 
financial disclosure report with his Office, which shall make it 
immediately available to the public in accordance with this part.
    (e) Candidates for President and Vice President identified in Sec. 
2634.201(d), other than an incumbent President or Vice President, shall 
file their financial disclosure reports with the Federal Election 
Commission, which shall review and send copies of such reports to

[[Page 521]]

the Director of the Office of Government Ethics.
    (f) Members of the uniformed services identified in Sec. 
2634.202(c) shall file their financial disclosure reports with the 
Secretary concerned, or his delegate.



Sec. 2634.603  Custody of and access to public reports.

    (a) Each agency shall make available to the public in accordance 
with the provisions of this section those public reports filed with the 
agency by reporting individuals described under subpart B of this part.
    (b) This section does not require public availability of those 
reports filed by:
    (1) Any individual in the Central Intelligence Agency, the Defense 
Intelligence Agency, or the National Security Agency, or any individual 
engaged in intelligence activities in any agency of the United States, 
if the President finds or has found that, due to the nature of the 
office or position occupied by that individual, public disclosure of the 
report would, by revealing the identity of the individual or other 
sensitive information, compromise the national interest of the United 
States. Individuals referred to in this paragraph who are exempt from 
the public availability requirement may also be authorized, 
notwithstanding Sec. 2634.701, to file any additional reports necessary 
to protect their identity from public disclosure, if the President finds 
or has found that such filings are necessary in the national interest; 
or
    (2) An independent counsel whose identity has not been disclosed by 
the Court under 28 U.S.C chapter 40, or any person appointed by that 
independent counsel under such chapter.
    (c) Each agency shall, within thirty days after any public report is 
received by the agency, permit inspection of the report by, or furnish a 
copy of the report to, any person who makes written application as 
provided by agency procedure. Agency reviewing officials and the support 
staffs who maintain the files, the staff of the Office of Government 
Ethics, and Special Agents of the Federal Bureau of Investigation who 
are conducting a criminal inquiry into possible conflict of interest 
violations need not submit an application. The agency may utilize Office 
of Government Ethics Form 201 for such applications. An application 
shall state:
    (1) The requesting person's name, occupation, and address;
    (2) The name and address of any other person or organization on 
whose behalf the inspection or copy is requested; and
    (3) That the requesting person is aware of the prohibitions on 
obtaining or using the report set forth in paragraph (f) of this 
section.
    (d) Applications for the inspection of or copies of public reports 
shall also be made available to the public throughout the period during 
which the report itself is made available, utilizing the procedures in 
paragraph (c) of this section.
    (e) The agency may require a reasonable fee, established by agency 
regulation, to recover the direct cost of reproduction or mailing of a 
public report, excluding the salary of any employee involved. A copy of 
the report may be furnished without charge or at a reduced charge if the 
agency determines that waiver or reduction of the fee is in the public 
interest. The criteria used by an agency to determine when a fee will be 
reduced or waived shall be established by regulation. Agency regulations 
contemplated by paragraph (e) of this section do not require approval 
pursuant to Sec. 2634.103.
    (f) It is unlawful for any person to obtain or use a public report:
    (1) For any unlawful purpose;
    (2) For any commercial purpose, other than by news and 
communications media for dissemination to the general public;
    (3) For determining or establishing the credit rating of any 
individual; or
    (4) For use, directly or indirectly, in the solicitation of money 
for any political, charitable, or other purpose.

    Example 1. The deputy general counsel of Agency X is responsible for 
reviewing the public financial disclosure reports filed by persons 
within that agency. The agency personnel director, who does not exercise 
functions within the ethics program, wishes to review the disclosure 
report of an individual within the agency. The personnel director must 
file an application to review the report. However, the supervisor of an 
official with whom the deputy general counsel consults

[[Page 522]]

concerning matters arising in the review process need not file such an 
application.
    Example 2. A state law enforcement agent is conducting an 
investigation which involves the private financial dealings of an 
individual who has filed a public financial disclosure report. The agent 
must complete a written application in order to inspect or obtain a 
copy.
    Example 3. A financial institution has received an application for a 
loan from an official which indicates her present financial status. The 
official has filed a public financial disclosure statement with her 
agency. The financial institution cannot be given access to the 
disclosure form for purposes of verifying the information contained on 
the application.

    (g)(1) Any public report filed with an agency or transmitted to the 
Director of the Office of Government Ethics under this section shall be 
retained by the agency, and by the Office of Government Ethics when it 
receives a copy. The report shall be made available to the public for a 
period of six years after receipt. After the six-year period, the report 
shall be destroyed unless needed in an ongoing investigation, except 
that in the case of an individual who filed the report pursuant to Sec. 
2634.201(c) as a nominee and was not subsequently confirmed by the 
Senate, or who filed the report pursuant to Sec. 2634.201(d) as a 
candidate and was not subsequently elected, the report, unless needed in 
an ongoing investigation, shall be destroyed one year after the 
individual either is no longer under consideration by the Senate or is 
no longer a candidate for nomination or election to the Office of 
President or Vice President. See also the OGE/GOVT-1 Governmentwide 
executive branch Privacy Act system of records (available for inspection 
at the Office of Government Ethics), as well as any applicable agency 
system of records.
    (2) For purposes of paragraph (g)(1) of this section, in the case of 
a reporting individual with respect to whom a trust has been certified 
under subpart D of this part, a copy of the qualified trust agreement, 
the list of assets initially placed in the trust, and all other publicly 
available documents relating to the trust shall be retained and made 
available to the public until the periods for retention of all other 
reports of the individual have lapsed under paragraph (g)(1) of this 
section.

(Approved by the Office of Management and Budget under control numbers 
3209-0001 and 3209-0002)

[57 FR 11821, Apr. 7, 1992; 57 FR 21854, May 22, 1992, as amended at 59 
FR 34756, July 7, 1994]



Sec. 2634.604  Custody of and denial of public access to confidential reports.

    (a) Any report filed with an agency under subpart I of this part 
shall be retained by the agency for a period of six years after receipt. 
After the six-year period, the report shall be destroyed unless needed 
in an ongoing investigation. See also the OGE/GOVT-2 Governmentwide 
executive branch Privacy Act system of records (available for inspection 
at the Office of Government Ethics), as well as any applicable agency 
system of records.
    (b) The reports filed pursuant to subpart I of this part are 
confidential. No member of the public shall have access to such reports, 
except pursuant to the order of a Federal court or as otherwise provided 
under the Privacy Act. See 5 U.S.C. 552a and the OGE/GOVT-2 Privacy Act 
system of records (and any applicable agency system); 5 U.S.C. app. 
(Ethics in Government Act of 1978, section 107(a)); sections 201(d) and 
502(b) of Executive Order 12674, as modified by Executive Order 12731; 
and Sec. 2634.901(d).

[57 FR 11821, Apr. 7, 1992; 57 FR 21854, May 22, 1992]



Sec. 2634.605  Review of reports.

    (a) In general. The designated agency ethics official shall normally 
serve as the reviewing official for reports submitted to his agency. 
That responsibility may be delegated, except in the case of 
certification of nominee reports required by paragraph (c) of this 
section. See also Sec. 2634.105(q). He shall note on any report or 
supplemental report the date on which it is received. Except as 
indicated in paragraph (c) of this section, all reports shall be 
reviewed within 60 days after the date of filing. Reports reviewed by 
the Director of the Office of Government Ethics shall be reviewed within 
60 days from the date

[[Page 523]]

on which they are received by that Office. Final certification in 
accordance with paragraph (b)(2) of this section may, of necessity, 
occur later, where additional information is being sought or remedial 
action is being taken under this section.
    (b) Responsibilities of reviewing officials--(1) Initial review. The 
reviewing official may request an intermediate review by the filer's 
supervisor. In the case of a filer who is detailed to another agency for 
more than 60 days during the reporting period, the reviewing official 
shall obtain an intermediate review by the agency where the filer served 
as a detailee. After obtaining any intermediate review or determining 
that such review is not required, the reviewing official shall examine 
the report to determine, to his satisfaction that:
    (i) Each required item is completed; and
    (ii) No interest or position disclosed on the form violates or 
appears to violate:
    (A) Any applicable provision of chapter 11 of title 18, United 
States Code;
    (B) The Act, as amended, and the implementing regulations;
    (C) Executive Order 12674, as modified by Executive Order 12731, and 
the implementing regulations; or
    (D) Any other agency-specific statute or regulation which governs 
the filer.
    (2) Signature by reviewing official. If the reviewing official 
determines that the report meets the requirements of paragraph (b)(1) of 
this section, he shall certify it by signature and date. The reviewing 
official need not audit the report to ascertain whether the disclosures 
are correct. Disclosures shall be taken at ``face value'' as correct, 
unless there is a patent omission or ambiguity or the official has 
independent knowledge of matters outside the report. However, a report 
which is signed by a reviewing official certifies that the filer's 
agency has reviewed the report, and that the reviewing official has 
concluded that each required item has been completed and that on the 
basis of information contained in such report the filer is in compliance 
with applicable laws and regulations noted in paragraph (b)(1)(ii) of 
this section.
    (3) Requests for, and review based on, additional information. If 
the reviewing official believes that additional information is required, 
he shall request that it be submitted by a specified date. This 
additional information shall be made a part of the report. If the 
reviewing official concludes, on the basis of the information disclosed 
in the report and any additional information submitted, that the report 
fulfills the requirements of paragraph (b)(1) of this section, the 
reviewing official shall sign and date the report.
    (4) Compliance with applicable laws and regulations. If the 
reviewing official concludes that information disclosed in the report 
may reveal a violation of applicable laws and regulations as specified 
in paragraph (b)(1)(ii) of this section, the official shall:
    (i) Notify the filer of that conclusion;
    (ii) Afford the filer a reasonable opportunity for an oral or 
written response; and
    (iii) Determine, after considering any response, whether or not the 
filer is then in compliance with applicable laws and regulations 
specified in paragraph (b)(1)(ii) of this section. If the reviewing 
official concludes that the report does fulfill the requirements, he 
shall sign and date the report. If he determines that it does not, he 
shall:
    (A) Notify the filer of the conclusion;
    (B) Afford the filer an opportunity for personal consultation if 
practicable;
    (C) Determine what remedial action under paragraph (b)(5) of this 
section should be taken to bring the report into compliance with the 
requirements of paragraph (b)(1)(ii) of this section; and
    (D) Notify the filer in writing of the remedial action which is 
needed, and the date by which such action should be taken.
    (5) Remedial action. (i) Except in unusual circumstances, which must 
be fully documented to the satisfaction of the reviewing official, 
remedial action shall be completed not later than three months from the 
date on which the filer received notice that the action is required.
    (ii) Remedial action may include, as appropriate:

[[Page 524]]

    (A) Divestiture of a conflicting interest (see subpart J of this 
part);
    (B) Resignation from a position with a non-Federal business or other 
entity;
    (C) Restitution;
    (D) Establishment of a qualified blind or diversified trust under 
the Act and subpart D of this part;
    (E) Procurement of a waiver under 18 U.S.C. 208(b)(1) or (b)(3);
    (F) Preparation of a written instrument of recusal 
(disqualification); or
    (G) Voluntary request by the filer for transfer, reassignment, 
limitation of duties, or resignation.
    (6) Compliance or referral. (i) If the filer complies with a written 
request for remedial action under paragraph (b)(4) of this section, the 
reviewing official shall indicate, in the comment section of the report, 
what remedial action has been taken. The official shall also sign and 
date the report.
    (ii) If the filer does not comply by the designated date with the 
written request for remedial action transmitted under paragraph (b)(4) 
of this section, the reviewing official shall, in the case of a public 
filer under subpart B of this part, notify the head of the agency and 
the Office of Government Ethics, for appropriate action. Where the filer 
is in a position in the executive branch (other than in the uniformed 
services or the Foreign Service), appointment to which requires the 
advice and consent of the Senate, the Director of the Office of 
Government Ethics shall refer the matter to the President. In the case 
of the Postmaster General or Deputy Postmaster General, the Director of 
the Office of Government Ethics shall recommend to the Governors of the 
Board of Governors of the United States Postal Service the action to be 
taken. For confidential filers, the reviewing official will follow 
agency procedures.
    (c) Expedited procedure in the case of individuals appointed by the 
President and subject to confirmation by the Senate. In the case of a 
report filed by an individual described in Sec. 2634.201(c) who is 
nominated by the President for appointment to a position that requires 
the advice and consent of the Senate:
    (1) The Executive Office of the President shall furnish the 
applicable financial disclosure report form to the nominee. It shall 
forward the completed report to the designated agency ethics official at 
the agency where the nominee is serving or will serve, or it may direct 
the nominee to file the completed report directly with the designated 
agency ethics official.
    (2) The designated agency ethics official shall complete an 
accelerated review of the report, in accordance with the standards and 
procedures in paragraph (b) of this section. If that official concludes 
that the report reveals no conflict of interest under applicable laws 
and regulations, the official shall:
    (i) Attach to the report a description (when available) of the 
position to be filled by the nominee;
    (ii) Personally certify the report by signature, and date the 
certification;
    (iii) Write an opinion letter to the Director of the Office of 
Government Ethics, personally certifying that there is no unresolved 
conflict of interest under applicable laws and regulations, and 
discussing:
    (A) Any actual or apparent conflicts of interest that were detected 
during the review process; and
    (B) The resolution of those real or apparent conflicts, including 
any specific commitment, ethics agreement entered under the provisions 
of subpart H of this part, or other undertaking by the nominee to 
resolve any such conflicts. A copy of any commitment, agreement, or 
other undertaking which is reduced to writing shall be sent to the 
Director, in accordance with subpart H of this part; and
    (iv) Deliver the letter and the report to the Director of the Office 
of Government Ethics, within three working days after the designated 
agency ethics official receives the report.
    Note: The designated agency ethics official's certification 
responsibilities in Sec. 2634.605(c) are nondelegable and must be 
accomplished by him personally, or by the agency's alternate designated 
agency ethics official, in his absence. See Sec. 2638.203 of this 
chapter.
    (3) The Director of the Office of Government Ethics shall review the 
report and the letter from the designated agency ethics official. If the 
Director is satisfied that no unresolved conflicts of interest exist, 
then the Director shall sign and date the report form. The Director 
shall then submit the report

[[Page 525]]

with a letter to the appropriate Senate committee, expressing the 
Director's opinion whether, on the basis of information contained in the 
report, the nominee has complied with all applicable conflict laws and 
regulations.
    (4) If, in the case of any nominee or class of nominees, the 
expedited procedure specified in this paragraph cannot be completed 
within the time set forth in paragraph (c)(2)(iv) of this section, the 
designated agency ethics official shall inform the Director. When 
necessary and appropriate, the Director may modify the rule of that 
paragraph for a nominee or a class of nominees with respect to a 
particular department or agency.



Sec. 2634.606  Updated disclosure of advice-and-consent nominees.

    (a) General rule. Each individual described in Sec. 2634.201(c) who 
is nominated by the President for appointment to a position that 
requires advice and consent of the Senate, shall, at or before the 
commencement of the first Senate committee hearing to consider the 
nomination, submit to the committee an amendment to the report 
previously filed under Sec. 2634.201(c) and transmit copies of the 
amendment to the designated agency ethics official referred to in Sec. 
2634.605(c)(1) of this subpart and to the Office of Government Ethics, 
which shall update, through the period ending no more than five days 
prior to the commencement of the hearing, the disclosure of information 
required with respect to receipt of:
    (1) Outside earned income; and
    (2) Honoraria, as defined in Sec. 2634.105(i).
    (b) Additional certification. In each case to which this section 
applies, the Director of the Office of Government Ethics shall, at the 
request of the committee considering the nomination, submit to the 
committee an opinion letter of the nature described in Sec. 
2634.605(c)(3) of this subpart concerning the updated disclosure. If the 
committee requests such a letter, the expedited procedure provided by 
Sec. 2634.605(c) of this subpart shall govern review of the updated 
disclosure, which shall be deemed a report filed for purposes of that 
paragraph.



Sec. 2634.607  Advice and opinions.

    To assist employees in avoiding situations in which they might 
violate applicable financial disclosure laws and regulations:
    (a) The Director of the Office of Government Ethics shall render 
formal advisory opinions and informal advisory letters on generally 
applicable matters, or on important matters of first impression. See 
also subpart C of part 2638 of this chapter. The Director shall insure 
that these advisory opinions and letters are compiled, published, and 
made available to agency ethics officials and the public. Good faith 
reliance on such opinions shall provide a defense to any penalty or 
sanction provided by this part for fact situations indistinguishable in 
all material aspects from those in the opinion.
    (b) Designated agency ethics officials will offer advice and 
guidance to employees as needed, to assist them in complying with the 
requirements of the Act and this part on financial disclosure.



                           Subpart G_Penalties

    Source: 57 FR 11824, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.701  Failure to file or falsifying reports.

    (a) Referral of cases. The head of each agency, each Secretary 
concerned, or the Director of the Office of Government Ethics, as 
appropriate, shall refer to the Attorney General the name of any 
individual when there is reasonable cause to believe that such 
individual has willfully failed to file a public report or information 
required on such report, or has willfully falsified any information 
(public or confidential) required to be reported under this part.
    (b) Civil action. The Attorney General may bring a civil action in 
any appropriate United States district court against any individual who 
knowingly and willfully falsifies or who knowingly and willfully fails 
to file or report any information required by filers of public reports 
under subpart B of this part. The court in which the action is brought 
may assess against the

[[Page 526]]

individual a civil monetary penalty in any amount, not to exceed 
$10,000, as provided by section 104(a) of the Act, for any such 
violation occurring before September 29, 1999, as adjusted effective 
September 29, 1999 to $11,000 for any such violation occurring on or 
after that date, in accordance with the inflation adjustment procedures 
prescribed in the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended.
    (c) Criminal action. An individual may also be prosecuted under 
criminal statutes for supplying false information on any financial 
disclosure report.
    (d) Administrative remedies. The President, the Vice President, the 
Director of the Office of Government Ethics, the Secretary concerned, 
the head of each agency, and the Office of Personnel Management may take 
appropriate personnel or other action in accordance with applicable law 
or regulation against any individual for failing to file public or 
confidential reports required by this part, for filing such reports 
late, or for falsifying or failing to report required information. This 
may include adverse action under 5 CFR part 752, if applicable.

[57 FR 11824, Apr. 7, 1992, as amended at 64 FR 47096, Aug. 30, 1999]



Sec. 2634.702  Breaches by trust fiduciaries and interested parties.

    (a) The Attorney General may bring a civil action in any appropriate 
United States district court against any individual who knowingly and 
willfully violates the provisions of Sec. 2634.407 of this part. The 
court in which the action is brought may assess against the individual a 
civil monetary penalty in any amount, not to exceed $10,000, as provided 
by section 102(f)(6)(C)(i) of the Act, for such violation occurring 
before September 29, 1999, as adjusted effective September 29, 1999 to 
$11,000 for any such violation occurring on or after that date, in 
accordance with the inflation adjustment procedures prescribed in the 
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
    (b) The Attorney General may bring a civil action in any appropriate 
United States district court against any individual who negligently 
violates the provisions of Sec. 2634.407. The court in which the action 
is brought may assess against the individual a civil monetary penalty in 
any amount, not to exceed $5,000, as provided by section 
102(f)(6)(C)(ii) of the Act, for any such violation occurring before 
September 29, 1999, as adjusted effective September 29, 1999 to $5,500 
for any such violation occurring on or after that date, in accordance 
with the inflation adjustment procedures prescribed in the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended.

[57 FR 11824, Apr. 7, 1992, as amended at 64 FR 47097, Aug. 30, 1999]



Sec. 2634.703  Misuse of public reports.

    The Attorney General may bring a civil action against any person who 
obtains or uses a report filed under this part for any purpose 
prohibited by section 105(c)(1) of the Act, as incorporated in Sec. 
2634.603(f). The court in which the action is brought may assess against 
the person a civil monetary penalty in any amount, not to exceed 
$10,000, as provided by section 105(c)(2) of the Act, for any such 
violation occurring before September 29, 1999, as adjusted effective 
September 29, 1999 to $11,000 for any such violation occurring on or 
after that date, in accordance with the inflation adjustment procedures 
prescribed in the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended. This remedy shall be in addition to any other remedy 
available under statutory or common law.

[57 FR 11824, Apr. 7, 1992, as amended at 64 FR 47097, Aug. 30, 1999]



Sec. 2634.704  Late filing fee.

    (a) In general. In accordance with section 104(d) of the Act, any 
reporting individual who is required to file a public financial 
disclosure report by the provisions of this part shall remit a late 
filing fee of $200 to the appropriate agency, payable to the U.S. 
Treasury, if such report is filed more than thirty days after the later 
of:
    (1) The date such report is required to be filed pursuant to the 
provisions of this part; or
    (2) The last day of any filing extension period granted pursuant to 
Sec. 2634.201(f).

[[Page 527]]

    (b) Exceptions. (1) The designated agency ethics official may waive 
the late filing fee if he determines that the delay in filing was caused 
by extraordinary circumstances, including the agency's failure to notify 
a new entrant, first-time annual filer, or termination filer of the 
requirement to file the public financial disclosure report, which made 
the delay reasonably necessary.
    (2) Employees requesting a waiver of the late filing fee from the 
designated agency ethics official must request the waiver in writing 
with supporting documentation. The designated agency ethics official's 
determination must be made in writing to the employee with a copy placed 
in the employee's public financial disclosure report file. The 
designated agency ethics official may consult with the Office of 
Government Ethics prior to approving any waiver of the late filing fee.
    (c) Procedure. (1) The designated agency ethics official shall 
maintain a record of the due dates for all public reports which the 
employees of that agency must file, along with the new filing dates 
under extensions which have been granted. Each report received by the 
agency shall be marked with the date of receipt. For any report which 
has not been received by the end of the period specified in paragraph 
(a) of this section, the agency shall advise the delinquent filer, in 
writing, that:
    (i) Because his financial disclosure report is more than thirty days 
overdue, a $200 late filing fee will become due at the time of filing, 
by reason of section 104(d) of the Act and Sec. 2634.704;
    (ii) The filer is directed to remit to the agency, with the 
completed report, the $200 fee, payable to the United States Treasury;
    (iii) If the filer fails to remit the $200 fee when filing his late 
report, it shall be subject to agency debt collection procedures; and
    (iv) If extraordinary circumstances exist that would justify a 
request for a fee waiver, pursuant to paragraph (b) of this section, 
such request and supporting documentation must be submitted immediately.
    (2) Upon receipt from the reporting individual of the $200 late 
filing fee, the collecting agency shall note the payment in its records, 
and shall then forward the money to the U.S. Treasury for deposit as 
miscellaneous receipts, in accordance with 31 U.S.C. 3302 and section 
8030.30 of Volume 1 of the Treasury Financial Manual. If payment is not 
forthcoming, agency debt collection procedures shall be utilized, which 
may include salary or administrative offset, initiation of a tax refund 
offset, or other authorized action.
    (d) Late filing fee not exclusive remedy. The late filing fee is in 
addition to other sanctions which may be imposed for late filing. See 
Sec. 2634.701 of this subpart.
    (e) Confidential filers. The late filing fee does not apply to 
confidential filers. Late filing of confidential reports will be handled 
administratively under Sec. 2634.701(d) of this subpart.
    (f) Date of filing. The date of filing for purposes of determining 
whether a public financial disclosure report is filed more than thirty 
days late under this section will be the date of receipt by the agency, 
which should be noted on the report in accordance with Sec. 
2634.605(a). The thirty-day grace period on imposing a late filing fee 
is adequate allowance for administrative delays in the receipt of 
reports by an agency.

[57 FR 11824, Apr. 7, 1992, as amended at 58 FR 38912, July 21, 1993; 67 
FR 49857, Aug. 1, 2002]



                       Subpart H_Ethics Agreements

    Source: 57 FR 11825, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.801  Scope.

    This subpart applies to ethics agreements made by any reporting 
individual under either subpart B or I of this part, to resolve 
potential or actual conflicts of interest.



Sec. 2634.802  Requirements.

    (a) Ethics agreement defined. The term ethics agreement shall 
include, for the purposes of this subpart, any oral or written promise 
by a reporting individual to undertake specific actions in order to 
alleviate an actual or apparent conflict of interest, such as:

[[Page 528]]

    (1) Preparation of a written instrument for recusing (disqualifying) 
the individual from one or more particular matters or categories of 
official action;
    (2) Divestiture of a financial interest;
    (3) Resignation from a position with a non-Federal business or other 
entity;
    (4) Procurement of a waiver pursuant to 18 U.S.C. 208(b)(1) or 
(b)(3); or
    (5) Establishment of a qualified blind or diversified trust under 
the Act and subpart D of this part.
    (b) Time limit. The ethics agreement shall specify that the 
individual must complete the action which he or she has agreed to 
undertake within a period not to exceed three months from the date of 
the agreement (or of Senate confirmation, if applicable). Exceptions to 
the three-month deadline can be made in cases of unusual hardship, as 
determined by the Office of Government Ethics, for those ethics 
agreements which are submitted to it (see Sec. 2634.803 (a), (b), or 
(c) of this subpart), or by the designated agency ethics official for 
all other ethics agreements.

    Example: An official of the ABC Aircraft Company is nominated to a 
Department of Defense position requiring the advice and consent of the 
Senate. As a condition of assuming the position, the individual has 
agreed to divest himself of his ABC Aircraft stock which he recently 
acquired while he was an officer with the company. However, the 
Securities and Exchange Commission prohibits officers of public 
corporations from deriving a profit from the sale of stock in the 
corporation in which they hold office within six months of acquiring the 
stock, and directs that any such profit must be returned to the issuing 
corporation or its stock holders. Since meeting the usual three-month 
time limit specified in this subpart for satisfying an ethics agreement 
might entail losing any profit that could be realized on the sale of 
this stock, the nominee requests that the limit be extended beyond the 
six-month period imposed by the Commission. Written approval would have 
to be obtained from the Office of Government Ethics to extend the 
customary three-month period.



Sec. 2634.803  Notification of ethics agreements.

    (a) Nominees to positions requiring the advice and consent of the 
Senate. (1) In the case of a nominee referred to in Sec. 2634.201(c), 
the designated agency ethics official shall include with the report 
submitted to the Office of Government Ethics any ethics agreement which 
the nominee has made.
    (2) A designated agency ethics official shall immediately notify the 
Office of Government Ethics of any ethics agreement of a nominee which 
is made or becomes known to the designated agency ethics official after 
the submission of the nominee's report to the Office of Government 
Ethics. This requirement includes an ethics agreement made between a 
nominee and the Senate confirmation committee. The nominee shall 
immediately report to the designated agency ethics official any ethics 
agreement made with the committee.
    (3) The Office of Government Ethics shall immediately apprise the 
designated agency ethics official and the Senate confirmation committee 
of any ethics agreements made directly between the nominee and the 
Office of Government Ethics.
    (b) Incumbents in positions requiring the advice and consent of the 
Senate. In the case of a position which required the advice and consent 
of the Senate, the designated agency ethics official shall keep the 
Office of Government Ethics apprised of any ethics agreements which the 
incumbent makes, or which become known to the designated agency ethics 
official during the incumbent's term in his position.
    (c) Designated agency ethics officials not holding advice-and-
consent positions, and employees of the Offices referred to in Sec. 
2634.602(c)(1)(v). A designated agency ethics official who has entered 
into an ethics agreement, and who is neither a nominee to, nor an 
incumbent in, a position which requires the advice and consent of the 
Senate, as well as each employee of the Executive Office of the 
President or the Office of the Vice President who is referred to in 
Sec. 2634.602(c)(1)(v), shall include with his initial financial 
disclosure report submitted to the Office of Government Ethics any 
ethics agreement undertaken by such official or employee. He shall also 
apprise the Office of Government Ethics promptly of any subsequent 
ethics agreement.
    (d) Other reporting individuals. Other reporting individuals 
desiring to enter into ethics agreement may do so with the designated 
agency ethics official

[[Page 529]]

for the employee's agency. Where an ethics agreement has been made with 
someone other than the designated agency ethics official, the officer or 
employee involved shall promptly apprise the designated agency ethics 
official of the agreement.

[57 FR 11825, Apr. 7, 1992; 57 FR 21855, May 22, 1992]



Sec. 2634.804  Evidence of compliance.

    (a) Requisite evidence of action taken. (1) For ethics agreements of 
nominees to positions requiring the advice and consent of the Senate, 
evidence of any action taken to comply with the terms of such ethics 
agreements shall be submitted by the designated agency ethics official, 
upon receipt of the evidence, to the Office of Government Ethics and to 
the Senate confirmation committee.
    (2) For ethics agreements of incumbents in positions which required 
the advice and consent of the Senate, evidence of any action taken to 
comply with the terms of such ethics agreements shall be submitted 
promptly by the designated agency ethics official to the Office of 
Government Ethics. A designated agency ethics official or an employee 
referred to in Sec. 2634.803(c) of this subpart who is neither a 
nominee to, nor an incumbent in, an advice-and-consent position, must 
also promptly send evidence of any action taken to comply with the terms 
of an ethics agreement to the Office of Government Ethics.
    (3) In the case of all other reporting individuals, evidence of any 
action taken to comply with the terms of an ethics agreement must be 
sent promptly to the designated agency ethics official.
    (b) The following materials and any other appropriate information 
constitute evidence of the action taken:
    (1) Recusal. A copy of any recusal instrument listing and describing 
the specific matters or subjects to which the recusal applies, a 
statement of the method by which the agency will enforce the recusal, 
and a list of the positions of those agency employees involved in the 
enforcement (i.e., the individual's immediate subordinates and 
supervisors).

    Example: A new employee of a Federal safety board owns stock in 
Nationwide Airlines. She has entered into an ethics agreement to recuse 
herself from participating in any accident investigations involving that 
company's aircraft until such time as she can complete a divestiture of 
the asset. She must give a copy of the recusal instrument to her 
immediate subordinates and supervisors, and to the designated agency 
ethics official. The employee has also agreed to recuse herself from any 
particular matter (as that term is used in 18 U.S.C. 208) that might 
arise with respect to any of her present or future holdings. There is no 
requirement to execute a recusal instrument for this type of general 
recusal, because it is simply a promise to abide by the terms of the 
statute.

    (2) Divestiture or resignation. Written notification that the 
divestiture or resignation has occurred.
    (3) Waivers. A copy of any waivers issued pursuant to 18 U.S.C. 
208(b)(1) or (b)(3) and signed by the appropriate supervisory official.
    (4) Blind or diversified trusts. Information required by subpart D 
of this part to be submitted to the Office of Government Ethics for its 
certification of any qualified trust instrument. If the Office of 
Government Ethics does not certify the trust, the designated agency 
ethics official and, as appropriate, the Senate confirmation committee 
should be informed immediately.

[57 FR 11825, Apr. 7, 1992; 57 FR 21855, May 22, 1992]



Sec. 2634.805  Retention.

    Records of ethics agreements and actions described in this subpart 
shall be maintained with the individual's financial disclosure report at 
the agency and additionally, in the case of filers described in 
paragraphs (a), (b), and (c) of Sec. 2634.803 of this subpart, at the 
Office of Government Ethics.

[57 FR 11825, Apr. 7, 1992; 57 FR 21855, May 22, 1992]



           Subpart I_Confidential Financial Disclosure Reports

    Source: 57 FR 11826, Apr. 7, 1992, unless otherwise noted.



Sec. 2634.901  Policies of confidential financial disclosure reporting.

    (a) The confidential financial reporting system set forth in this 
subpart is

[[Page 530]]

designed to complement the public reporting system established by title 
I of the Act. High-level officials in the executive branch are required 
to report certain financial interests publicly to ensure that every 
citizen can have confidence in the integrity of the Federal Government. 
It is equally important in order to guarantee the efficient and honest 
operation of the Government that other, less senior, executive branch 
employees, whose Government duties involve the exercise of significant 
discretion in certain sensitive areas, report their financial interests 
and outside business activities to their employing agencies, to 
facilitate the review of possible conflicts of interest. These reports 
assist an agency in administering its ethics program and counseling its 
employees. Such reports are filed on a confidential basis.
    (b) The confidential reporting system seeks from employees only that 
information which is relevant to the administration and application of 
criminal conflict of interest laws, administrative standards of conduct, 
and agency-specific statutory and program-related restrictions. The 
basic content of the reports required by Sec. 2634.907 of this subpart 
reflects that certain information is generally relevant to all agencies. 
However, depending upon an agency's authorized activities and any 
special or unique circumstances, additional information may be 
necessary. In these situations, and subject to the prior written 
approval of the Director of the Office of Government Ethics, agencies 
may formulate supplemental reporting requirements by following the 
procedures of Sec. Sec. 2634.103 and 2634.601(b).
    (c) This subpart also allows an agency to request, on a confidential 
basis, additional information from persons who are already subject to 
the public reporting requirements of this part. The public reporting 
requirements of the Act address Governmentwide concerns. The reporting 
requirements of this subpart allow agencies to confront special or 
unique agency concerns. If those concerns prompt an agency to seek more 
extensive reporting from employees who file public reports, it may 
proceed on a confidential, nonpublic basis, with prior written approval 
from the Director of the Office of Government Ethics, under the 
procedures of Sec. Sec. 2634.103 and 2634.601(b).
    (d) The reports filed pursuant to this subpart are specifically 
characterized as ``confidential,'' and are required to be withheld from 
the public, pursuant to section 107(a) of the Act. Section 107(a) leaves 
no discretion on this issue with the agencies. See also Sec. 2634.604. 
Further, Executive Order 12674 as modified by Executive Order 12731 
provides, in section 201(d), for a system of nonpublic (confidential) 
executive branch financial disclosure to complement the Act's system of 
public disclosure. The confidential reports provided for by this subpart 
contain sensitive commercial and financial information, as well as 
personal privacy-protected information. These reports and the 
information which they contain are, accordingly, exempt from being 
released to the public, under exemptions 3 (A) and (B), 4, and 6 of the 
Freedom of Information Act (FOIA), 5 U.S.C. 552(b)(3) (A) and (B), 
(b)(4), and (b)(6). Additional FOIA exemptions may apply to particular 
reports or portions of reports. Agency personnel shall not publicly 
release the reports or the information which these reports contain, 
except pursuant to an order issued by a Federal court, or as otherwise 
provided under applicable provisions of the Privacy Act (5 U.S.C. 552a), 
and in the OGE/GOVT-2 Governmentwide executive branch Privacy Act system 
of records, as well as any applicable agency records system. If an 
agency statute requires the public reporting of certain information and, 
for purposes of convenience, an agency chooses to collect that 
information on the confidential report form filed under this subpart, 
only the special statutory information may be released to the public, 
pursuant to the terms of the statute under which it was collected.
    (e) Executive branch agencies hire or use the paid and unpaid 
services of many individuals on an advisory or other less than full-time 
basis as special Government employees. These employees may include 
experts and consultants to the Government, as well as members of 
Government advisory committees. It is important for those agencies that 
utilize such services, and for

[[Page 531]]

the individuals who provide the services, to anticipate and avoid real 
or apparent conflicts of interest. The confidential financial disclosure 
system promotes that goal, with special Government employees among those 
required to file confidential reports.
    (f) For additional policies and definitions of terms applicable to 
both the public and confidential reporting systems, see Sec. Sec. 
2634.104 and 2634.105.



Sec. 2634.902  [Reserved]



Sec. 2634.903  General requirements, filing dates, and extensions.

    (a) Incumbents. A confidential filer who holds a position or office 
described in Sec. 2634.904(a) of this subpart and who performs the 
duties of that position or office for a period in excess of 60 days 
during the calendar year (including more than 60 days in an acting 
capacity) shall file a confidential report as an incumbent, containing 
the information prescribed in Sec. Sec. 2634.907 and 2634.908 of this 
subpart on or before February 15 of the following year. This requirement 
does not apply if the employee has left Government service prior to the 
due date for the report. No incumbent reports are required of special 
Government employees described in Sec. 2634.904(a)(2) of this subpart, 
but they must file new entrant reports under Sec. 2634.903(b) of this 
subpart upon each appointment or reappointment. For confidential filers 
under Sec. 2634.904(a)(3) of this subpart, consult agency supplemental 
regulations.
    (b) New entrants. (1) Not later than 30 days after assuming a new 
position or office described in Sec. 2634.904(a) of this subpart (which 
also encompasses the reappointment or redesignation of a special 
Government employee, including one who is serving on an advisory 
committee), a confidential filer shall file a confidential report 
containing the information prescribed in Sec. Sec. 2634.907 and 
2634.908 of this subpart. For confidential filers under Sec. 
2634.904(a)(3) of this subpart, consult agency supplemental regulations.
    (2) However, no report shall be required if the individual:
    (i) Has, within 30 days prior to assuming his position, left another 
position or office referred to in Sec. 2634.904(a) of this subpart or 
in Sec. 2634.202, and has previously satisfied the reporting 
requirements applicable to that former position, but a copy of the 
report filed by the individual while in that position should be made 
available to the appointing agency, and the individual must comply with 
any agency requirement for a supplementary report for the new position;
    (ii) Has already filed such a report in connection with 
consideration for appointment to the position. The agency may request 
that the individual update such a report if more than six months has 
expired since it was filed; or
    (iii) Is not reasonably expected to perform the duties of an office 
or position referred to in Sec. 2634.904(a) of this subpart for more 
than 60 days in the following twelve-month period, as determined by the 
designated agency ethics official or delegate. That may occur most 
commonly in the case of an employee who temporarily serves in an acting 
capacity in a position described by Sec. 2634.904(a)(1) of this 
subpart. If the individual actually performs the duties of such position 
for more than 60 days in the twelve-month period, then a confidential 
financial disclosure report must be filed within 15 calendar days after 
the sixtieth day of such service in the position. Paragraph (b)(2)(iii) 
of Sec. 2634.903 does not apply to new entrants filing as special 
Government employees under Sec. 2634.904(a)(2) of this subpart.
    (3) Notwithstanding the filing deadline prescribed in paragraph 
(b)(1) of this section, agencies may at their discretion, require that 
prospective entrants into positions described in Sec. 2634.904(a) of 
this subpart file their new entrant confidential financial disclosure 
reports prior to serving in such positions, to insure that there are no 
insurmountable ethics concerns. Additionally, a special Government 
employee who has been appointed to serve on an advisory committee shall 
file the required report before any advice is rendered by the employee 
to the agency, or in no event, later than the first committee meeting.
    (c) Advisory committee definition. For purposes of this subpart, the 
term advisory committee shall have the meaning given to that term under 
section 3 of

[[Page 532]]

the Federal Advisory Committee Act (5 U.S.C. app). Specifically, it 
means any committee, board, commission, council, conference, panel, task 
force, or other similar group which is established by statute or 
reorganization plan, or established or utilized by the President or one 
or more agencies, in the interest of obtaining advice or recommendations 
for the President or one or more agencies or officers of the Federal 
Government. Such term includes any subcommittee or other subgroup of any 
advisory committee, but does not include the Advisory Commission on 
Intergovernmental Relations, the Commission on Government Procurement, 
or any committee composed wholly of full-time officers or employees of 
the Federal Government.
    (d) Extensions--(1) Agency extensions. The agency reviewing official 
may, for good cause shown, grant to any employee or class of employees a 
filing extension or several extensions totaling not more than 90 days.
    (2) Certain service during period of national emergency. In the case 
of an active duty military officer or enlisted member of the Armed 
Forces, a Reserve or National Guard member on active duty under orders 
issued pursuant to title 10 or title 32 of the United States Code, a 
commissioned officer of the Uniformed Services (as defined in 10 U.S.C. 
101), or any other employee, who is deployed or sent to a combat zone or 
required to perform services away from his permanent duty station in 
support of the Armed Forces or other governmental entities following a 
declaration by the President of a national emergency, the agency 
reviewing official may grant such individual a filing extension to last 
no longer than 90 days after the last day of:
    (i) The individual's service in the combat zone or away from his 
permanent duty station; or
    (ii) The individual's hospitalization as a result of injury received 
or disease contracted while serving during the national emergency.
    (3) Agency procedures. Each agency may prescribe procedures to 
provide for the implementation of the extensions provided for by this 
paragraph.
    (e) Termination reports not required. An employee who is required to 
file a confidential financial disclosure report is not required to file 
a termination report upon leaving the filing position.

[57 FR 11826, Apr. 7, 1992, as amended at 58 FR 38912, July 21, 1993; 63 
FR 69992, Dec. 18, 1998; 66 FR 55872, Nov. 5, 2001; 71 FR 28234, May 16, 
2006]



Sec. 2634.904  Confidential filer defined.

    (a) The term confidential filer includes:
    (1) Each officer or employee in the executive branch whose position 
is classified at GS-15 or below of the General Schedule prescribed by 5 
U.S.C. 5332, or the rate of basic pay for which is fixed, other than 
under the General Schedule, at a rate which is less than 120% of the 
minimum rate of basic pay for GS-15 of the General Schedule; each 
officer or employee of the United States Postal Service or Postal Rate 
Commission whose basic rate of pay is less than 120% of the minimum rate 
of basic pay for GS-15 of the General Schedule; each member of a 
uniformed service whose pay grade is less than 0-7 under 37 U.S.C. 201; 
and each officer or employee in any other position determined by the 
designated agency ethics official to be of equal classification; if:
    (i) The agency concludes that the duties and responsibilities of the 
employee's position require that employee to participate personally and 
substantially (as defined in Sec. Sec. 2635.402(b)(4) and 
2640.103(a)(2) of this chapter) through decision or the exercise of 
significant judgment, and without substantial supervision and review, in 
taking a Government action regarding:
    (A) Contracting or procurement;
    (B) Administering or monitoring grants, subsidies, licenses, or 
other federally conferred financial or operational benefits;
    (C) Regulating or auditing any non-Federal entity; or
    (D) Other activities in which the final decision or action will have 
a direct and substantial economic effect on the interests of any non-
Federal entity; or
    (ii) The agency concludes that the duties and responsibilities of 
the employee's position require the employee to file such a report to 
avoid involvement in a real or apparent conflict of

[[Page 533]]

interest, and to carry out the purposes behind any statute, Executive 
order, rule, or regulation applicable to or administered by the 
employee. Positions which might be subject to a reporting requirement 
under this subparagraph include those with duties which involve 
investigating or prosecuting violations of criminal or civil law.

    Example 1 to paragraph (a)(1). A contracting officer develops the 
requests for proposals for data processing equipment of significant 
value which is to be purchased by his agency. He works with substantial 
independence of action and exercises significant judgment in developing 
the requests. By engaging in this activity, he is participating 
personally and substantially in the contracting process. The contracting 
officer should be required to file a confidential financial disclosure 
report.
    Example 2 to paragraph (a)(1). An agency environmental engineer 
inspects a manufacturing plant to ascertain whether the plant complies 
with permits to release a certain effluent into a nearby stream. Any 
violation of the permit standards may result in civil penalties for the 
plant, and in criminal penalties for the plant's management based upon 
any action which they took to create the violation. If the agency 
engineer determines that the plant does not meet the permit 
requirements, he can require the plant to terminate release of the 
effluent until the plant satisfies the permit standards. Because the 
engineer exercises substantial discretion in regulating the plant's 
activities, and because his final decisions will have a substantial 
economic effect on the plant's interests, the engineer should be 
required to file a confidential financial disclosure report.
    Example 3 to paragraph (a)(1). A GS-13 employee at an independent 
grant making agency conducts the initial agency review of grant 
applications from nonprofit organizations and advises the Deputy 
Assistant Chairman for Grants and Awards about the merits of each 
application. Although the process of reviewing the grant applications 
entails significant judgment, the employee's analysis and 
recommendations are reviewed by the Deputy Assistant Chairman, and the 
Assistant Chairman, before the Chairman decides what grants to award. 
Because his work is subject to ``substantial supervision and review,'' 
the employee is not required to file a confidential financial disclosure 
report unless the agency determines that filing is necessary under Sec. 
2634.904(a)(1)(ii).
    Example 4 to paragraph (a)(1). As a senior investigator for a 
criminal law enforcement agency, an employee often leads investigations, 
with substantial independence, of suspected felonies. The investigator 
usually decides what information will be contained in the agency's 
report of the suspected misconduct. Because he participates personally 
and substantially through the exercise of significant judgment in 
investigating violations of criminal law, and because his work is not 
substantially supervised, the investigator should be required to file a 
confidential financial disclosure report.
    Example 5 to paragraph (a)(1). An investigator is principally 
assigned as the field agent to investigate alleged violations of 
conflict of interest laws. The investigator works under the direct 
supervision of an agent-in-charge. The agent-in-charge reviews all of 
the investigator's work product and then uses those materials to prepare 
the agency's report which is submitted under his own name. Because of 
the degree of supervision involved in the investigator's duties, the 
investigator is not required to file a confidential disclosure report 
unless the agency determines that filing is necessary under Sec. 
2634.904(a)(1)(ii).

    (2) Unless required to file public financial disclosure reports by 
subpart B of this part, all executive branch special Government 
employees.

    Example 1 to paragraph (a)(2). A consultant to an agency 
periodically advises the agency regarding important foreign policy 
matters. The consultant must file a confidential report if he is 
retained as a special Government employee and not an independent 
contractor.
    Example 2 to paragraph (a)(2). A special Government employee serving 
as a member of an advisory committee (who is not a private group 
representative) attends four committee meetings every year to provide 
advice to an agency about pharmaceutical matters. No compensation is 
received by the committee member, other than travel expenses. The 
advisory committee member must file a confidential disclosure report 
because she is a special Government employee.

    (3) Each public filer referred to in Sec. 2634.202 on public 
disclosure who is required by agency regulations and forms issued in 
accordance with Sec. Sec. 2634.103 and 2634.601(b) to file a 
supplemental confidential financial disclosure report which contains 
information that is more extensive than the information required in the 
reporting individual's public financial disclosure report under this 
part.
    (4) Any employee who, notwithstanding his exclusion from the public 
financial reporting requirements of this part by virtue of a 
determination under Sec. 2634.203, is covered by the criteria of 
paragraph (a)(1) of this section.

[[Page 534]]

    (b) Any individual or class of individuals described in paragraph 
(a) of this section, including special Government employees unless 
otherwise noted, may be excluded from all or a portion of the 
confidential reporting requirements of this subpart, when the agency 
head or designee determines that the duties of a position make remote 
the possibility that the incumbent will be involved in a real or 
apparent conflict of interest.

    Example 1 to paragraph (b). A special Government employee who is a 
draftsman prepares the drawings to be used by an agency in soliciting 
bids for construction work on a bridge. Because he is not involved in 
the contracting process associated with the construction, the likelihood 
that this action will create a conflict of interest is remote. As a 
result, the special Government employee is not required to file a 
confidential financial disclosure report.
    Example 2 to paragraph (b). An agency has just hired a GS-5 
Procurement Assistant who is responsible for typing and processing 
procurement documents, answering status inquiries from the public, 
performing office support duties such as filing and copying, and 
maintaining an on-line contract database. The Assistant is not involved 
in contracting and has no other actual procurement responsibilities. 
Thus, the possibility that the Assistant will be involved in a real or 
apparent conflict of interest is remote, and the Assistant is not 
required to file.

[71 FR 28234, May 16, 2006]



Sec. 2634.905  Use of alternative procedures.

    (a) With the prior written approval of OGE, an agency may use an 
alternative procedure in lieu of filing the OGE Form 450 or OGE Optional 
Form 450-A. The alternative procedure may be an agency-specific form to 
be filed in place thereof. An agency must submit for approval a 
description of its proposed alternative procedure to OGE.

    Example to paragraph (a). A nonsupervisory auditor at an agency is 
regularly assigned to cases involving possible loan improprieties by 
financial institutions. Prior to undertaking each enforcement review, 
the auditor reviews the file to determine if she, her spouse, minor or 
dependent child, or any general partner, organization in which she 
serves as an officer, director, trustee, employee, or general partner, 
or organization with which she is negotiating or has an agreement or an 
arrangement for future employment, or a close friend or relative is a 
subject of the investigation, or will be in any way affected by the 
investigation. Once she determines that there is no such relationship, 
she signs and dates a certification which verifies that she has reviewed 
the file and has determined that no conflict of interest exists. She 
then files the certification with the head of her auditing division at 
the agency. On the other hand, if she cannot execute the certification, 
she informs the head of her auditing division. In response, the division 
will either reassign the case or review the conflicting interest to 
determine whether a waiver would be appropriate. This alternative 
procedure, if approved by the Office of Government Ethics in writing, 
may be used in lieu of requiring the auditor to file a confidential 
financial disclosure report.

    (b) An agency may use the OGE Optional Form 450-A (Confidential 
Certificate of No New Interests) in place of the OGE Form 450 if the 
agency head or designee determines it is adequate to prevent possible 
conflicts of interest. This form may be used by eligible filers, as 
described in this paragraph, who can certify, after reexamining their 
most recent previous OGE Form 450, that they (and their spouse and 
dependent children) have acquired no new interests required to be 
reported on OGE Form 450, and that they have not changed jobs (no new 
position description or other significant change in duties) at their 
agency since filing that previous report. OGE Optional Form 450-A will 
be used under the following conditions:
    (1) OGE Optional Form 450-A will only be made available for use by 
current employees who are not special Government employees.
    (2) OGE Optional Form 450-A will only be used by incumbent filers, 
as described in Sec. 2634.903(a) of this subpart, in lieu of filing an 
annual OGE Form 450, who have a previous OGE Form 450 on file with their 
agency for the position they currently hold. Its due date is as 
specified in Sec. 2634.903(a), unless extended under Sec. 2634.903(d).
    (3) As indicated on the OGE Optional Form 450-A, eligible filers may 
use OGE Optional Form 450-A, if applicable to their circumstances, or 
they may file a new OGE Form 450, at their option. Therefore, a blank 
OGE Form 450 and its accompanying written instructions should ordinarily 
be distributed to them, along with the blank OGE Optional Form 450-A. 
The instructions to

[[Page 535]]

OGE Form 450 will also provide guidance on what is meant by 
``reportable'' interests on OGE Optional Form 450-A. In lieu of 
distributing a blank OGE Form 450 and its instructions, agencies may 
choose to develop separate guidance on the meaning of ``reportable'' 
interests, or they may refer certificate users to guidance contained in 
any available source, such as the Office of Government Ethics' Web site 
on the Internet or agency-approved electronic software for OGE Form 450. 
Filers would then also have to be advised of where to obtain a blank OGE 
Form 450, if needed.
    (4) OGE Optional Form 450-A may be used by eligible filers for a 
maximum of three consecutive years before they are required to complete 
a new OGE Form 450 every fourth year, on a uniform basis for all 
incumbent (annual) filers, as provided in paragraph (b)(5) of this 
section. Agencies may, however, elect to permit use of the OGE Optional 
Form 450-A for only one year (or two years), and to require a new OGE 
Form 450 every second (or third) year, on a uniform basis for all 
incumbent filers, as provided in paragraph (b)(5) of this section.
    (5) In each year divisible by four, beginning in 2000 (or divisible 
by two or three, beginning in 1998, for agencies that choose one of the 
more frequent options described in the second sentence of paragraph 
(b)(4) of this section), all incumbent filers, as described in Sec. 
2634.903(a) of this subpart, must file a new OGE Form 450 rather than 
OGE Optional Form 450-A, regardless of how recently they may have filed 
an OGE Form 450 (either as a new entrant or as an annual filer who was 
not eligible to use, or chose not to use, the optional certificate).
    (6) When submitting OGE Optional Form 450-A, filers are not required 
to attach a copy of their previous OGE Form 450, unless their agency 
determines that it is necessary. Filers should be encouraged, however, 
to retain a copy of their previous OGE Form 450, so that it will be 
readily available for their examination prior to completing an OGE 
Optional Form 450-A.

[57 FR 11826, Apr. 7, 1992; 57 FR 21855, May 22, 1992, as amended at 62 
FR 33976, June 24, 1997; 71 FR 28235, May 16, 2006]



Sec. 2634.906  Review of confidential filer status.

    The head of each agency, or an officer designated by the head of the 
agency for that purpose, shall review any complaint by an individual 
that his position has been improperly determined by the agency to be one 
which requires the submission of a confidential financial disclosure 
report pursuant to this subpart. A decision by the agency head or 
designee regarding the complaint shall be final and conclusive for all 
purposes, notwithstanding any other provision of law or regulation. This 
procedure is the sole and exclusive means of seeking review of an 
agency's decision to designate positions and the employees therein for 
filing confidential financial disclosure reports.

    Note: The provision in this section for a final decision by the 
agency head or designee is intended to preclude administrative or 
negotiated grievances, arbitration procedures, and any other review or 
appeal, either within or outside the agency. This finality of the agency 
head's (or designee's) decision is necessary in order to maintain the 
prompt and orderly administration of the executive branch confidential 
financial disclosure system.

[57 FR 11826, Apr. 7, 1992, as amended at 63 FR 15274, Mar. 31, 1998]



Sec. 2634.907  Report contents.

    (a) Other than the reports described in Sec. 2634.904(a)(3) of this 
subpart, each confidential financial disclosure report shall comply with 
instructions issued by the Office of Government Ethics and include on 
the standardized form prescribed by OGE (see Sec. 2634.601 of subpart F 
of this part) the information described in paragraphs (b) through (g) of 
this section for the filer. Each report shall also include the 
information described in paragraph (h) of this section for the filer's 
spouse and dependent children.
    (b) Noninvestment income. Each financial disclosure report shall 
disclose the source of earned or other noninvestment income in excess of 
$200 received by the filer from any one source or which has accrued to 
the filer's benefit during the reporting period, including:

[[Page 536]]

    (1) Salaries, fees, commissions, wages and any other compensation 
for personal services (other than from United States Government 
employment);
    (2) Any honoraria, including payments made or to be made to 
charitable organizations on behalf of the filer in lieu of honoraria; 
and

    Note to paragraph (b)(2): In determining whether an honorarium 
exceeds the $200 threshold, subtract any actual and necessary travel 
expenses incurred by the filer and one relative, if the expenses are 
paid or reimbursed by the filer. If such expenses are paid or reimbursed 
by the honorarium source, they shall not be counted as part of the 
honorarium payment.

    (3) Any other noninvestment income, such as prizes, scholarships, 
awards, gambling income or discharge of indebtedness.

    Example to paragraphs (b)(1) and (b)(3). A filer teaches a course at 
a local community college, for which she receives a salary of $1,000 per 
year. She also received, during the previous reporting period, a $250 
award for outstanding local community service. She must disclose both.

    (c) Assets and investment income. Each financial disclosure report 
shall disclose separately:
    (1) Each item of real and personal property having a fair market 
value in excess of $1,000 held by the filer at the end of the reporting 
period in a trade or business, or for investment or the production of 
income, including but not limited to:
    (i) Real estate;
    (ii) Stocks, bonds, securities, and futures contracts;
    (iii) Livestock owned for commercial purposes;
    (iv) Commercial crops, either standing or held in storage;
    (v) Antiques or art held for resale or investment;
    (vi) Vested beneficial interests in trusts and estates;
    (vii) Pensions and annuities;
    (viii) Sector mutual funds (see definition at Sec. 2640.102(q) of 
this chapter);
    (ix) Accounts or other funds receivable; and
    (x) Capital accounts or other asset ownership in businesses.
    (2) The source of investment income (dividends, rents, interest, 
capital gains, or the income from qualified or excepted trusts or 
excepted investment funds (see paragraph (i) of this section)), which is 
received by the filer or accrued to his benefit during the reporting 
period, and which exceeds $200 in amount or value from any one source, 
including but not limited to income derived from:
    (i) Real estate;
    (ii) Collectible items;
    (iii) Stocks, bonds, and notes;
    (iv) Copyrights;
    (v) Vested beneficial interests in trusts and estates;
    (vi) Pensions;
    (vii) Sector mutual funds (see definition at Sec. 2640.102(q) of 
this chapter);
    (viii) The investment portion of life insurance contracts;
    (ix) Loans;
    (x) Gross income from a business;
    (xi) Distributive share of a partnership;
    (xii) Joint business venture income; and
    (xiii) Payments from an estate or an annuity or endowment contract.

    Note to paragraphs (c)(1) and (c)(2): For Individual Retirement 
Accounts (IRAs), brokerage accounts, trusts, mutual or pension funds, 
and other entities with portfolio holdings, each underlying asset must 
be separately disclosed, unless the entity qualifies for special 
treatment under paragraph (i) of this section.

    (3) Exemptions. The following assets and investment income are 
exempt from the reporting requirements of paragraphs (c)(1) and (c)(2) 
of this section:
    (i) A personal residence, as defined in Sec. 2634.105(l), of the 
filer or spouse;
    (ii) Accounts (including both demand and time deposits) in 
depository institutions, including banks, savings and loan associations, 
credit unions, and similar depository financial institutions;
    (iii) Money market mutual funds and accounts;
    (iv) U.S. Government obligations, including Treasury bonds, bills, 
notes, and savings bonds;
    (v) Government securities issued by U.S. Government agencies;
    (vi) Financial interests in any retirement system of the United 
States (including the Thrift Savings Plan) or under the Social Security 
Act; and
    (vii) Diversified mutual funds. (``Diversified'' means that the fund 
does not

[[Page 537]]

have a stated policy of concentrating its investments in any industry, 
business, single country other than the United States, or bonds of a 
single State within the United States and, in the case of an employee 
benefit plan, means that the plan's trustee has a written policy of 
varying plan investments. Whether a mutual fund meets this standard may 
be determined by checking the fund's prospectus or by calling a broker 
or the manager of the fund.)

    Example 1 to paragraph (c). A filer owns a beach house which he 
rents out for several weeks each summer, receiving annual rental income 
of approximately $5,000. He must report the rental property, as well as 
the city and state in which it is located.
    Example 2 to paragraph (c). A filer's investment portfolio consists 
of several stocks, U.S. Treasury bonds, several cash bank deposit 
accounts, an account in the Government's Thrift Savings Plan, and shares 
in sector mutual funds and diversified mutual funds. He must report the 
name of each sector mutual fund in which he owns shares, and the name of 
each company in which he owns stock, valued at over $1,000 at the end of 
the reporting period or from which he received income of more than $200 
during the reporting period. He need not report his diversified mutual 
funds, U.S. Treasury bonds, bank deposit accounts, or Thrift Savings 
Plan holdings.

    (d) Liabilities. Each financial disclosure report filed pursuant to 
this subpart shall identify liabilities in excess of $10,000 owed by the 
filer at any time during the reporting period, and the name and location 
of the creditors to whom such liabilities are owed, except:
    (1) Personal liabilities owed to a spouse or to the parent, brother, 
sister, or child of the filer, spouse, or dependent child;
    (2) Any mortgage secured by a personal residence of the filer or his 
spouse;
    (3) Any loan secured by a personal motor vehicle, household 
furniture, or appliances, provided that the loan does not exceed the 
purchase price of the item which secures it;
    (4) Any revolving charge account;
    (5) Any student loan; and
    (6) Any loan from a bank or other financial institution on terms 
generally available to the public.

    Example to paragraph (d). A filer owes $2,500 to his mother-in-law 
and $12,000 to his best friend. He also has a $15,000 balance on his 
credit card, a $200,000 mortgage on his personal residence, and a car 
loan. Under the financial disclosure reporting requirements, he need not 
report the debt to his mother-in-law, his credit card balance, his 
mortgage, or his car loan. He must, however, report the debt of over 
$10,000 to his best friend.

    (e) Positions with non-Federal organizations--(1) In general. Each 
financial disclosure report filed pursuant to this subpart shall 
identify all positions held at any time by the filer during the 
reporting period, other than with the United States, as an officer, 
director, trustee, general partner, proprietor, representative, 
executor, employee, or consultant of any corporation, company, firm, 
partnership, trust, or other business enterprise, any nonprofit 
organization, any labor organization, or any educational or other 
institution.
    (2) Exemptions. The following positions are exempt from the 
reporting requirements of paragraph (e)(1) of this section:
    (i) Positions held in religious, social, fraternal, or political 
entities; and
    (ii) Positions solely of an honorary nature, such as those with an 
emeritus designation.

    Example to paragraph (e). A filer holds outside positions as the 
trustee of his family trust, the secretary of a local political party 
committee, and the ``Chairman emeritus'' of his town's Lions Club. He 
also is a principal of a tutoring school on weekends. The individual 
must report his outside positions as trustee of the family trust and as 
principal of the school. He does not need to report his positions as 
secretary of the local political party committee or ``Chairman 
emeritus'' because each of these positions is exempt.

    (f) Agreements and arrangements. Each financial disclosure report 
filed pursuant to this subpart shall identify the parties to, and shall 
briefly describe the terms of, any agreement or arrangement of the filer 
in existence at any time during the reporting period with respect to:
    (1) Future employment (including the date on which the filer entered 
into the agreement for future employment);
    (2) A leave of absence from employment during the period of the 
filer's Government service;

[[Page 538]]

    (3) Continuation of payments by a former employer other than the 
United States Government; and
    (4) Continuing participation in an employee welfare or benefit plan 
maintained by a former employer.

    Example 1 to paragraph (f). A filer plans to retire from Government 
service in eight months. She has negotiated an arrangement for part-time 
employment with a private-sector company, to commence upon her 
retirement. On her financial disclosure report, she must identify the 
future employer, and briefly describe the terms of, this agreement and 
disclose the date on which she entered into the agreement.
    Example 2 to paragraph (f). A new employee who has entered a 
position which requires the filing of a confidential form is on a leave 
of absence from his private-sector employment. During his Government 
tenure, he will continue to receive deferred compensation from this 
employer, and will continue to participate in its pension plan. He must 
report and briefly describe his arrangements for a leave of absence, for 
the receipt of deferred compensation, and for participation in the 
pension plan.

    (g) Gifts and travel reimbursements--(1) Gifts. Each annual 
financial disclosure report filed pursuant to this subpart shall contain 
a brief description of all gifts aggregating more than $305 in value 
which are received by the filer during the reporting period from any one 
source, as well as the identity of the source. For in-kind travel-
related gifts, the report shall include a travel itinerary, the dates, 
and the nature of expenses provided.
    (2) Travel reimbursements. Each annual financial disclosure report 
filed pursuant to this subpart shall contain a brief description 
(including a travel itinerary, dates, and the nature of expenses 
provided) of any travel-related reimbursements aggregating more than 
$305 in value which are received by the filer during the reporting 
period from any one source, as well as the identity of the source.
    (3) Aggregation exception. Any gift or travel reimbursement with a 
fair market value of $122 or less need not be aggregated for purposes of 
the reporting rules of this section. However, the acceptance of gifts, 
whether or not reportable, is subject to the restrictions imposed by 
Executive Order 12674, as modified by Executive Order 12731, and the 
implementing regulations on standards of ethical conduct.
    (4) Valuation of gifts and travel reimbursements. The value to be 
assigned to a gift or travel reimbursement is its fair market value. For 
most reimbursements, this will be the amount actually received. For 
gifts, the value should be determined in one of the following manners:
    (i) If the gift has been newly purchased or is readily available in 
the market, the value shall be its retail price. The filer need not 
contact the donor, but may contact a retail establishment selling 
similar items to determine the present cost in the market.
    (ii) If the item is not readily available in the market, such as a 
piece of art, a handmade item, or an antique, the filer may make a good 
faith estimate of the value of the item.
    (iii) The term ``readily available in the market'' means that an 
item generally is available for retail purchase in the metropolitan area 
nearest to the filer's residence.
    (5) New entrants, as described in Sec. 2634.903(b) of this subpart, 
need not report any information on gifts and travel reimbursements.
    (6) Exemptions. Reports need not contain any information about gifts 
and travel reimbursements received from relatives (see Sec. 
2634.105(o)) or during a period in which the filer was not an officer or 
employee of the Federal Government. Additionally, any food, lodging, or 
entertainment received as ``personal hospitality of any individual'', as 
defined in Sec. 2634.105(k), need not be reported. See also exclusions 
specified in the definitions of ``gift'' and ``reimbursement'' at Sec. 
2634.105(h) and (n).

    Example to paragraph (g). A filer accepts a briefcase, a pen and 
pencil set, a paperweight, and a palm pilot from a community service 
organization he has worked with solely in his private capacity. He 
determines that the value of these gifts is:
    Gift 1--Briefcase: $200
    Gift 2--Pen and Pencil Set: $35
    Gift 3--Paperweight: $5
    Gift 4--Palm Pilot: $275
    The filer must disclose gifts 1 and 4 since, together, they 
aggregate more than $305 in value from the same source. He need not 
aggregate or report gifts 2 and 3 because each gift's value does not 
exceed $122.


[[Page 539]]


    (h) Disclosure rules for spouses and dependent children--(1) 
Noninvestment income. (i) Each financial disclosure report required by 
the provisions of this subpart shall disclose the source of earned 
income in excess of $1,000 from any one source, which is received by the 
filer's spouse or which has accrued to the spouse's benefit during the 
reporting period. If earned income is derived from a spouse's self-
employment in a business or profession, the report shall also disclose 
the nature of the business or profession. The filer is not required to 
report other noninvestment income received by the spouse such as prizes, 
scholarships, awards, gambling income, or a discharge of indebtedness.
    (ii) Each report shall disclose the source of any honoraria received 
by or accrued to the spouse (or payments made or to be made to charity 
on the spouse's behalf in lieu of honoraria) in excess of $200 from any 
one source during the reporting period.

    Example to paragraph (h)(1). A filer's husband has a seasonal part-
time job as a sales clerk at a department store, for which he receives a 
salary of $1,000 per year. He also received, during the previous 
reporting period, a $250 award for outstanding local community service, 
and an honorarium of $250 from the state university. The filer need not 
report either her husband's outside earned income or award because 
neither exceeded $1,000. She must, however, report the source of the 
honorarium because it exceeded $200.

    (2) Assets and investment income. Each confidential financial 
disclosure report shall disclose the assets and investment income 
described in paragraph (c) of this section and held by the spouse or 
dependent child of the filer, unless the following three conditions are 
satisfied:
    (i) The filer certifies that the item represents the spouse's or 
dependent child's sole financial interest, and that the filer has no 
specific knowledge regarding that item;
    (ii) The item is not in any way, past or present, derived from the 
income, assets or activities of the filer; and
    (iii) The filer neither derives, nor expects to derive, any 
financial or economic benefit from the item.

    Note to paragraph (h)(2):
    One who prepares a joint tax return with his spouse will normally 
derive a financial or economic benefit from assets held by the spouse, 
and will also be charged with knowledge of such items; therefore, he 
could not avail himself of this exception. Likewise, a trust for the 
education of one's minor child normally will convey a financial benefit 
to the parent. If so, the assets of the trust would be reportable on a 
financial disclosure report.

    (3) Liabilities. Each confidential financial disclosure report shall 
disclose all information concerning liabilities described in paragraph 
(d) of this section and owed by a spouse or dependent child, unless the 
following three conditions are satisfied:
    (i) The filer certifies that the item represents the spouse's or 
dependent child's sole financial responsibility, and that the filer has 
no specific knowledge regarding that item;
    (ii) The item is not in any way, past or present, derived from the 
activities of the filer; and
    (iii) The filer neither derives, nor expects to derive, any 
financial or economic benefit from the item.
    (4) Gifts and travel reimbursements. (i) Each annual confidential 
financial disclosure report shall disclose gifts and reimbursements 
described in paragraph (g) of this section and received by a spouse or 
dependent child which are not received totally independently of their 
relationship to the filer.
    (ii) A filer who is a new entrant as described in Sec. 2634.903(b) 
of this subpart is not required to report information regarding gifts 
and reimbursements received by a spouse or dependent child.
    (5) Divorce and separation. A filer need not report any information 
about:
    (i) A spouse living separate and apart from the filer with the 
intention of terminating the marriage or providing for permanent 
separation;
    (ii) A former spouse or a spouse from whom the filer is permanently 
separated; or
    (iii) Any income or obligations of the filer arising from 
dissolution of the filer's marriage or permanent separation from a 
spouse.

    Example to paragraph (h)(5). A filer and her husband are living 
apart in anticipation of divorcing. The filer need not report any 
information about her spouse's sole assets and liabilities, but she must 
continue to report their joint assets and liabilities.

    (i) Trusts, estates, and investment funds--(1) In general. (i) 
Except as otherwise provided in this section, each

[[Page 540]]

confidential financial disclosure report shall include the information 
required by this subpart about the holdings of any trust, estate, 
investment fund or other financial arrangement from which income is 
received by, or with respect to which a beneficial interest in principal 
or income is held by, the filer, his spouse, or dependent child.
    (ii) No information, however, is required about a nonvested 
beneficial interest in the principal or income of an estate or trust. A 
vested interest is a present right or title to property, which carries 
with it an existing right of alienation, even though the right to 
possession or enjoyment may be postponed to some uncertain time in the 
future. This includes a future interest when one has a right, defeasible 
or indefeasible, to the immediate possession or enjoyment of the 
property, upon the ceasing of another's interest. Accordingly, it is not 
the uncertainty of the time of enjoyment in the future, but the 
uncertainty of the right of enjoyment (title and alienation), which 
differentiates a ``vested'' and a ``nonvested'' interest.

    Note to paragraph (i)(1): Nothing in this section requires the 
reporting of the holdings of a revocable inter vivos trust (also known 
as a ``living trust'') with respect to which the filer, his spouse or 
dependent child has only a remainder interest, whether or not vested, 
provided that the grantor of the trust is neither the filer, the filer's 
spouse, nor the filer's dependent child. Furthermore, nothing in this 
section requires the reporting of the holdings of a revocable inter 
vivos trust from which the filer, his spouse or dependent child receives 
any discretionary distribution, provided that the grantor of the trust 
is neither the filer, the filer's spouse, nor the filer's dependent 
child.

    (2) Qualified trusts and excepted trusts. (i) A filer should not 
report information about the holdings of any qualified blind trust (as 
defined in Sec. 2634.403) or any qualified diversified trust (as 
defined in Sec. 2634.404).
    (ii) In the case of an excepted trust, a filer should indicate the 
general nature of its holdings, to the extent known, but does not 
otherwise need to report information about the trust's holdings. For 
purposes of this part, the term ``excepted trust'' means a trust:
    (A) Which was not created directly by the filer, spouse, or 
dependent child; and
    (B) The holdings or sources of income of which the filer, spouse, or 
dependent child have no specific knowledge through a report, disclosure, 
or constructive receipt, whether intended or inadvertent.
    (3) Excepted investment funds. (i) No information is required under 
paragraph (i)(1) of this section about the underlying holdings of an 
excepted investment fund as defined in paragraph (i)(3)(ii) of this 
section, except that the fund itself shall be identified as an interest 
in property and/or a source of income.
    (ii) For purposes of financial disclosure reports filed under the 
provisions of this subpart, an ``excepted investment fund'' means a 
widely held investment fund (whether a mutual fund, regulated investment 
company, common trust fund maintained by a bank or similar financial 
institution, pension or deferred compensation plan, or any other 
investment fund), if:
    (A)(1) The fund is publicly traded or available; or
    (2) The assets of the fund are widely diversified; and
    (B) The filer neither exercises control over nor has the ability to 
exercise control over the financial interests held by the fund.
    (iii) A fund is widely diversified if it holds no more than 5% of 
the value of its portfolio in the securities of any one issuer (other 
than the United States Government) and no more than 20% in any 
particular economic or geographic sector.
    (j) Special rules. (1) Political campaign funds, including campaign 
receipts and expenditures, need not be included in any report filed 
under this subpart. However, if the individual has authority to exercise 
control over the fund's assets for personal use rather than campaign or 
political purposes, that portion of the fund over which such authority 
exists must be reported.
    (2) In lieu of entering data on a part of the report form designated 
by the Office of Government Ethics, a filer may attach to the reporting 
form a copy of a brokerage report, bank statement, or other material, 
which, in a

[[Page 541]]

clear and concise fashion, readily discloses all information which the 
filer would otherwise have been required to enter on the concerned part 
of the report form.
    (k) For reports of confidential filers described in Sec. 
2634.904(a)(3) of this subpart, each supplemental confidential financial 
disclosure report shall include only the supplemental information:
    (1) Which is more extensive than that required in the reporting 
individual's public financial disclosure report under this part; and
    (2) Which has been approved by the Office of Government Ethics for 
collection by the agency concerned, as set forth in supplemental agency 
regulations and forms, issued under Sec. Sec. 2634.103 and 2634.601(b) 
(see Sec. 2634.901(b) and (c) of this subpart).

[71 FR 28236, May 16, 2006]



Sec. 2634.908  Reporting periods.

    (a) Incumbents. Each confidential financial disclosure report filed 
under Sec. 2634.903(a) of this subpart shall include on the standard 
form prescribed by the Office of Government Ethics and in accordance 
with instructions issued by the Office, a full and complete statement of 
the information required to be reported according to the provisions of 
this subpart for the preceding calendar year, or for any portion of that 
period not covered by a previous confidential or public financial 
disclosure report filed under this part.
    (b) New entrants. Each confidential financial disclosure report 
filed under Sec. 2634.903(b) of this subpart shall include, on the 
standard form prescribed by the Office of Government Ethics and in 
accordance with instructions issued by the Office, a full and complete 
statement of the information required to be reported according to the 
provisions of this subpart for the preceding twelve months from the date 
of filing.

[57 FR 11826, Apr. 7, 1992, as amended at 71 FR 28239, May 16, 2006]



Sec. 2634.909  Procedures, penalties, and ethics agreements.

    (a) The provisions of subpart F of this part govern the filing 
procedures and forms for, and the custody and review of, confidential 
disclosure reports filed under this subpart.
    (b) For penalties and remedial action which apply in the event that 
the reporting individual fails to file, falsifies information, or files 
late with respect to confidential financial disclosure reports, see 
subpart G of this part.
    (c) Subpart H of this part on ethics agreements applies to both the 
public and confidential reporting systems under this part.



                  Subpart J_Certificates of Divestiture

    Source: 69 FR 44894, July 28, 2004, unless otherwise noted.



Sec. 2634.1001  Overview.

    (a) Scope. 26 U.S.C. 1043 and the rules of this subpart allow an 
eligible person to defer paying capital gains tax on property sold to 
comply with conflict of interest requirements. To defer the gains, an 
eligible person must obtain a Certificate of Divestiture from the 
Director of the Office of Government Ethics before selling the property. 
This subpart describes the circumstances when an eligible person may 
obtain a Certificate of Divestiture and establishes the procedure that 
the Office of Government Ethics uses to issue Certificates of 
Divestiture.
    (b) Purpose. The purpose of section 1043 and this subpart is to 
minimize the burden that would result from paying capital gains tax on 
the sale of assets to comply with conflict of interest requirements. 
Minimizing this burden aids in attracting and retaining highly qualified 
personnel in the executive branch and ensures the confidence of the 
public in the integrity of Government officials and decision-making 
processes.



Sec. 2634.1002  Role of the Internal Revenue Service.

    The Internal Revenue Service (IRS) has jurisdiction over the tax 
aspects of a divestiture made pursuant to a Certificate of Divestiture. 
Eligible persons seeking to defer capital gains:
    (a) Must follow IRS requirements for reporting dispositions of 
property and electing under section 1043 not to recognize capital gains; 
and

[[Page 542]]

    (b) Should consult a personal tax advisor or the IRS for guidance on 
these matters.



Sec. 2634.1003  Definitions.

    For purposes of this subpart:
    Eligible person means:
    (1) Any officer or employee of the executive branch of the Federal 
Government, except a person who is a special Government employee as 
defined in 18 U.S.C. 202;
    (2) The spouse or any minor or dependent child of the individual 
referred to in paragraph (1) of this definition; and
    (3) Any trustee holding property in a trust in which an individual 
referred to in paragraph (1) or (2) of this definition has a beneficial 
interest in principal or income.
    Permitted property means:
    (1) An obligation of the United States; or
    (2) A diversified investment fund. A diversified investment fund is 
a diversified mutual fund or diversified unit investment trust, as 
defined in 5 CFR 2640.102(a), (k) and (u);
    (3) Provided, however, a permitted property cannot be any holding 
prohibited by statute, regulation, rule, or Executive order. As a 
result, requirements applicable to specific agencies and positions may 
limit an eligible person's choices of permitted property. An employee 
seeking a Certificate of Divestiture should consult the appropriate 
designated agency ethics official to determine whether a statute, 
regulation, rule, or Executive order may limit choices of permitted 
property.



Sec. 2634.1004  General rule.

    (a) The Director of the Office of Government Ethics may issue a 
Certificate of Divestiture for specific property in accordance with the 
procedures of Sec. 2634.1005 of this subpart if:
    (1) The Director determines that divestiture of the property by an 
eligible person is reasonably necessary to comply with 18 U.S.C. 208, or 
any other Federal conflict of interest statute, regulation, rule, or 
Executive order; or
    (2) A congressional committee requires divestiture as a condition of 
confirmation.
    (b) The Director of the Office of Government Ethics cannot issue a 
Certificate of Divestiture for property that already has been sold.

    Example 1 to Sec. 2634.1004: An employee is directed to divest 
shares of stock, a limited partnership interest, and foreign currencies. 
If the sale of these assets will result in capital gains under the 
Internal Revenue Code, the employee may request and receive a 
Certificate of Divestiture.
    Example 2 to Sec. 2634.1004: An employee of the Department of 
Commerce is directed to divest his shares of XYZ stock acquired through 
the exercise of options held in an employee benefit plan. His gain from 
the sale of the stock will be treated as ordinary income. Because only 
capital gains realized under Federal tax law are eligible for deferral 
under section 1043, a Certificate of Divestiture cannot be issued for 
the sale of the XYZ stock.
    Example 3 to Sec. 2634.1004: During her Senate confirmation 
hearing, a nominee to a Department of Defense (DOD) position is directed 
to divest stock in a DOD contractor as a condition of her confirmation. 
Eager to comply with the order to divest, the nominee sells her stock 
immediately after the hearing and prior to being confirmed by the 
Senate. Once she is a DOD employee, she requests a Certificate of 
Divestiture for the stock. Because the Office of Government Ethics 
cannot issue a Certificate of Divestiture for property that has already 
been divested, the employee's request for a Certificate of Divestiture 
will be denied.
    Example 4 to Sec. 2634.1004: After receiving a Certificate of 
Divestiture, the spouse of a Food and Drug Administration employee sold 
stock in a regulated company. Between the time of the request for the 
Certificate of Divestiture and the sale of the stock, the stock price 
dropped and the spouse sold the stock at a loss. Because the sale of the 
stock did not result in capital gains, the spouse has no need for the 
Certificate of Divestiture and cannot submit it to the Internal Revenue 
Service for deferral of gains. No further action need be taken by the 
employee or the employee's spouse in connection with the Certificate of 
Divestiture.



Sec. 2634.1005  How to obtain a Certificate of Divestiture.

    (a) Employee's request to the designated agency ethics official. An 
employee seeking a Certificate of Divestiture must submit a written 
request to the designated agency ethics official at his or her agency. 
The request must contain:
    (1) A full and specific description of the property that will be 
divested. For example, if the property is corporate

[[Page 543]]

stock, the request must include the number of shares for which the 
eligible person seeks a Certificate of Divestiture;
    (2) A brief description of how the eligible person acquired the 
property;
    (3) A statement that the eligible person holding the property has 
agreed to divest the property; and
    (4)(i) The date that the requirement to divest first applied; or
    (ii) The date the employee first agreed that the eligible person 
would divest the property in order to comply with conflict of interest 
requirements.
    (b) Designated agency ethics official's submission to the Office of 
Government Ethics. The designated agency ethics official must forward to 
the Director of the Office of Government Ethics the employee's written 
request described in paragraph (a) of this section. In addition, the 
designated agency ethics official must submit:
    (1) A copy of the employee's latest financial disclosure report. If 
the employee is not required to file a financial disclosure report, the 
designated agency ethics official must obtain from the employee, and 
submit to the Office of Government Ethics, a listing of the employee's 
interests that would be required to be disclosed on a confidential 
financial disclosure report excluding gifts and travel reimbursements. 
For purposes of this listing, the reporting period is the preceding 
twelve months from the date the requirement to divest first applied or 
the date the employee first agreed that the eligible person would divest 
the property;
    (2) An opinion that describes why divestiture of the property is 
reasonably necessary to comply with 18 U.S.C. 208, or any other Federal 
conflict of interest statute, regulation, rule, or Executive order; and
    (3) A brief description of the employee's position or a citation to 
a statute that sets forth the duties of the position.
    (c) Divestitures required by a congressional committee. In the case 
of a divestiture required by a congressional committee as a condition of 
confirmation, the designated agency ethics official must submit 
appropriate evidence that the committee requires the divestiture. A 
transcript of congressional testimony or a written statement from the 
designated agency ethics official concerning the committee's custom 
regarding divestiture are examples of evidence of the committee's 
requirements.
    (d) Divestitures for property held in a trust. In the case of 
divestiture of property held in a trust, the employee must submit a copy 
of the trust instrument, as well as a list of the trust's current 
holdings, unless the holdings are listed on the employee's most recent 
financial disclosure report. In certain cases involving divestiture of 
property held in a trust, the Director may not issue a Certificate of 
Divestiture unless the parties take actions which, in the opinion of the 
Director, are appropriate to exclude, to the extent practicable, parties 
other than eligible persons from benefitting from the deferral of 
capital gains. Such actions may include, as permitted by applicable 
State law, division of the trust into separate portfolios, special 
distributions, dissolution of the trust, or anything else deemed 
feasible by the Director, in his or her sole discretion.

    Example 1 to paragraph (d): An employee has a 90% beneficial 
interest in an irrevocable trust created by his grandfather. His four 
adult children have the remaining 10% beneficial interest in the trust. 
A number of the assets held in the trust must be sold to comply with 
conflicts of interest requirements. Due to State law, no action can be 
taken to separate the trust assets. Because the adult children have a 
small interest in the trust and the assets cannot be separated, the 
Director may consider issuing a Certificate of Divestiture to the 
trustee for the sale of all of the conflicting assets.

    (e) Time requirements. A request for a Certificate of Divestiture 
does not extend the time in which an employee otherwise must divest 
property required to be divested pursuant to an ethics agreement, or 
prohibited by statute, regulation, rule, or Executive order. Therefore, 
an employee must submit his or her request for a Certificate of 
Divestiture as soon as possible once the requirement to divest becomes 
applicable. The Office of Government Ethics will consider requests 
submitted beyond the applicable time period for divestiture. If the 
designated

[[Page 544]]

agency ethics official submits a request to the Office of Government 
Ethics beyond the applicable time period for divestiture, he must 
explain the reason for the delay. (See 5 CFR 2634.802 and 2635.403 for 
rules relating to the time requirements for divestiture.)
    (f) Response by the Office of Government Ethics. After reviewing the 
materials submitted by the employee and the designated agency ethics 
official, and making a determination that all requirements have been 
met, the Director will issue a Certificate of Divestiture. The 
certificate will be sent to the designated agency ethics official who 
will then forward it to the employee.



Sec. 2634.1006  Rollover into permitted property.

    (a) Reinvestment of proceeds. In order to qualify for deferral of 
capital gains, an eligible person must reinvest the proceeds from the 
sale of the property divested pursuant to a Certificate of Divestiture 
into permitted property during the 60-day period beginning on the date 
of the sale. The proceeds may be reinvested into one or more types of 
permitted property.

    Example 1 to paragraph (a): A recently hired employee of the 
Department of Transportation receives a Certificate of Divestiture for 
the sale of a large block of stock in an airline. He may split the 
proceeds of the sale and reinvest them in an S&P Index Fund, a 
diversified Growth Stock Fund, and U.S. Treasury bonds.
    Example 2 to paragraph (a): The Secretary of Treasury sells certain 
stock after receiving a Certificate of Divestiture and is considering 
reinvesting the proceeds from the sale into U.S. Treasury securities. 
However, because the Secretary of the Treasury is prohibited by 31 
U.S.C. 329 from being involved in buying obligations of the United 
States Government, the Secretary cannot reinvest the proceeds in such 
securities. However, she may invest the proceeds in a diversified mutual 
fund. See the definition of permitted property at Sec. 2634.1003.

    (b) Internal Revenue Service reporting requirements. An eligible 
person who elects to defer the recognition of capital gains from the 
sale of property pursuant to a Certificate of Divestiture must follow 
Internal Revenue Service rules for reporting the sale of the property 
and the reinvestment transaction.



Sec. 2634.1007  Cases in which Certificates of Divestiture will not be issued.

    The Director of the Office of Government Ethics, in his or her sole 
discretion, may deny a request for a Certificate of Divestiture in cases 
where an unfair or unintended benefit would result. Examples of such 
cases include:
    (a) Employee benefit plans. The Director will not issue a 
Certificate of Divestiture if the property is held in a pension, profit-
sharing, stock bonus, or other employee benefit plan and can otherwise 
be rolled over into an eligible tax-deferred retirement plan within the 
60-day reinvestment period.
    (b) Complete divestiture. The Director will not issue a Certificate 
of Divestiture unless the employee agrees to divest all of the property 
that presents a conflict of interest, as well as other similar or 
related property that presents a conflict of interest under a Federal 
conflict of interest statute, regulation, rule, or Executive order. 
However, any property that qualifies for a regulatory exemption at 5 CFR 
part 2640 need not be divested for a Certificate of Divestiture to be 
issued.

    Example 1 to paragraph (b): A Department of Agriculture employee 
owns shares of stock in Better Workspace, Inc. valued at $25,000. As 
part of his official duties, the employee is assigned to evaluate bids 
for a contract to renovate office space at his agency. The Department's 
designated agency ethics official discovers that Better Workspace is one 
of the companies that has submitted a bid and directs the employee to 
sell his stock in the company. Because Better Workspace is a publicly 
traded security, the employee could retain up to $15,000 of the stock 
under the regulatory exemption for interests in securities at 5 CFR 
2640.202(a). He would be able to request a Certificate of Divestiture 
for the $10,000 of Better Workspace stock that is not covered by the 
exemption. Alternatively, he could request a Certificate of Divestiture 
for the entire $25,000 worth of stock. If he chooses to sell his stock 
down to an amount permitted under the regulatory exemption, the Office 
of Government Ethics will not issue additional Certificates of 
Divestiture if the value of the stock goes above $15,000 again.

    (c) Property acquired under improper circumstances. The Director 
will not issue a Certificate of Divestiture:
    (1) If the eligible person acquired the property at a time when its 
acquisition

[[Page 545]]

was prohibited by statute, regulation, rule, or Executive order; or
    (2) If circumstances would otherwise create the appearance of a 
conflict with the conscientious performance of Government 
responsibilities.



Sec. 2634.1008  Public access to a Certificate of Divestiture.

    A Certificate of Divestiture issued pursuant to the provisions of 
this subpart is available to the public in accordance with the rules of 
Sec. 2634.603 of this part.

Appendix A to Part 2634--Certificate of Independence (Form Approved: OMB 
                         Control No. 3209-0007)

    The Certificate of Independence required by Sec. 2634.406(b) shall 
be executed as follows:

                       Certificate of Independence

    With respect to the trust of -------- (Settlor), which has been 
submitted to the Office of Government Ethics for certification pursuant 
to the Ethics in Government Act of 1978 (Pub. L. 95-521, as amended), 
the undersigned proposed [Trustee] [--------] of such trust is a 
financial institution which is eligible to serve in such fiduciary 
capacity in accordance with section 102(f)(3)(A) of such Act:
    FIRST: The undersigned is (check one)--
    ( ) a bank, as defined in 12 U.S.C. 1841(c), or
    ( ) an investment adviser, as defined in 15 U.S.C. 80b-2(a)(11),
    not more than 10 percent of which is owned or controlled by a single 
individual.
    SECOND: The undersigned--
    (1) Is independent of and unassociated with any interested party so 
that the undersigned cannot be controlled or influenced in the 
administration of the trust by any interested party; and
    (2) is not and has not been affiliated with any interested party, 
and is not a partner of, or involved in any joint venture or other 
investment or business with any interested party.
    THIRD: Any director, officer, or employee of the undersigned--
    (1) Is independent of and unassociated with any interested party so 
that such director, officer, or employee cannot be controlled or 
influenced in the administration of the trust by any interested party;
    (2) Is not and has not been employed by any interested party, nor a 
director, officer, or employee of any organization affiliated with any 
interested party, and is not and has not been a partner of, or involved 
in any joint venture or other investment or business with, any 
interested party; and
    (3) Is not a relative of any interested party.
    FOURTH: The undersigned certifies that the statements contained 
herein are true, complete and correct to the best of such undersigned's 
knowledge and belief.
    Date------
    (firm)------
    By:------
    (title)------
    Note: See Appendix C of this part for Privacy Act and Paperwork 
Reduction Act notices.

[57 FR 11829, Apr. 7, 1992, as amended at 63 FR 58620, Nov. 2, 1998]

 Appendix B to Part 2634--Certificate of Compliance (Form Approved: OMB 
                         Control No. 3209-0007)

    The Certificate of Compliance required by Sec. 2634.408(b) shall be 
executed as follows:

                        Certificate of Compliance

    With respect to the qualified blind trust (qualified diversified 
trust) of------ (Settlor), the undersigned, the approved [Trustee] [----
--] of such trust, pursuant to 5 CFR 2634.406, has served in such 
fiduciary capacity during the calendar year [or for the period 
beginning------ and ending------] and is eligible to continue in such 
capacity by virtue of the following:
    FIRST: The undersigned (and any director, officer, or employee) has 
not knowingly or negligently, and will not--
    (A) disclose any information to an interested party with respect to 
the trust that may not be disclosed pursuant to title I of the Act, the 
implementing regulations (including 5 CFR 2634.403(b)(12)(i) for a 
qualified blind trust, and 5 CFR 2634.404(c)(12)(i) for a qualified 
diversified trust), or the trust instrument;
    (B) acquire any holding the ownership of which is prohibited by, or 
not in accordance with, applicable statute, regulation, or the terms of 
the trust instrument;
    (C) solicit advice from any interested party with respect to such 
trust, which solicitation is prohibited by title I of the Act, the 
implementing regulations (including 5 CFR 2634.403(b)(12)(iii) for a 
qualified blind trust and 5 CFR 2634.404(c)(12)(iii), for a qualified 
diversified trust), or the trust instrument;
    (D) fail to file any document required by title I of the Act, the 
implementing regulations (including 5 CFR 2634.408(b) and (c)), or the 
trust instrument; or
    (E) violate or fail to comply with any provision or requirement of 
title I of the Act, the implementing regulations, or the trust 
instrument.
    SECOND: The undersigned (and any director, officer, or employee) 
will not knowingly or negligently engage in the above-mentioned 
activities.

[[Page 546]]

    THIRD: The undersigned certifies that the statements contained 
herein are true, complete and correct to the best of such undersigned's 
knowledge and belief.
    Date------
    (firm)------
    By:------
    (title)------

    Note: See appendix C of this part for Privacy Act and Paperwork 
Reduction Act notices.

[57 FR 11830, Apr. 7, 1992; 57 FR 21855, May 22, 1992]

Appendix C to Part 2634--Privacy Act and Paperwork Reduction Act Notices 
                         for Appendixes A and B

                          Privacy Act Statement

    Section 102(f) of the Ethics in Government Act of 1978 as amended 
(the ``Ethics Act'') (5 U.S.C. App.) and subpart D of 5 CFR part 2634 of 
the regulations of the Office of Government Ethics (OGE) require the 
reporting of this information for the administration of qualified trusts 
under the Ethics Act. The primary use of the information on this 
certificate is for review by Government officials of OGE and the agency 
of the Government employee for whom the trust is established to 
determine compliance with applicable Federal laws and regulations as 
regards qualified trusts. Additional disclosures of the information on 
this certificate may be made:
    (1) to any requesting person in accordance with the access 
provisions of section 105 of the Ethics Act;
    (2) to a Federal, State or local law enforcement agency if the 
disclosing agency becomes aware of a violation or potential violation of 
law or regulation;
    (3) to a court or party in a court or Federal administrative 
proceeding if the Government is a party or in order to comply with a 
judge-issued subpoena;
    (4) to a source when necessary to obtain information relevant to a 
conflict of interest issue;
    (5) to the National Archives and Records Administration or the 
General Services Administration in records management inspections;
    (6) to the Office of Management and Budget during legislative 
coordination on private relief legislation; and
    (7) in response to a discovery request or for the appearance of a 
witness in a pending judicial or administrative proceeding, if the 
information is relevant to the subject matter.

Knowing or willful falsification of information on this certificate or 
failure to file or report information required to be reported under 
title I of the Ethics Act and 5 CFR part 2634 of the OGE regulations may 
lead to disqualification as a trustee or other fiduciary as well as 
possible disqualification of the underlying trust itself. Knowing and 
willful falsification of information required under the Ethics Act and 
the regulations may also subject you to criminal prosecution.

     Public Burden Information and Paperwork Reduction Act Statement

    This collection of information is estimated to take an average of 
twenty minutes per response. You can send comments regarding the burden 
estimate or any other aspect of this collection of information, 
including suggestions for reducing this burden, to: Deputy Director for 
Administration and Information Management, U.S. Office of Government 
Ethics, Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917. 
Do not send your completed certificate to that official; rather, send it 
to the Director of the Office of Government Ethics at that address as 
provided in the part 2634 regulation.
    Pursuant to the Paperwork Reduction Act, as amended, an agency may 
not conduct or sponsor, and no person is required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number (that number, 3209-0007, is displayed here and in the 
headings of the OGE model qualified trust certificates of independence 
and compliance, appendixes A and B to this part 2634).

[57 FR 11830, Apr. 7, 1992, as amended at 63 FR 58620, Nov. 2, 1998; 67 
FR 22349, May 3, 2002]



PART 2635_STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EXECUTIVE BRANCH--

Table of Contents




                      Subpart A_General Provisions

Sec.
2635.101 Basic obligation of public service.
2635.102 Definitions.
2635.103 Applicability to members of the uniformed services.
2635.104 Applicability to employees on detail.
2635.105 Supplemental agency regulations.
2635.106 Disciplinary and corrective action.
2635.107 Ethics advice.

                  Subpart B_Gifts From Outside Sources

2635.201 Overview.
2635.202 General standards.
2635.203 Definitions.
2635.204 Exceptions.
2635.205 Proper disposition of prohibited gifts.

                    Subpart C_Gifts Between Employees

2635.301 Overview.

[[Page 547]]

2635.302 General standards.
2635.303 Definitions.
2635.304 Exceptions.

                Subpart D_Conflicting Financial Interests

2635.401 Overview.
2635.402 Disqualifying financial interests.
2635.403 Prohibited financial interests.

          Subpart E_Impartiality in Performing Official Duties

2635.501 Overview.
2635.502 Personal and business relationships.
2635.503 Extraordinary payments from former employers.

                   Subpart F_Seeking Other Employment

2635.601 Overview.
2635.602 Applicability and related considerations.
2635.603 Definitions.
2635.604 Disqualification while seeking employment.
2635.605 Waiver or authorization permitting participation while seeking 
          employment.
2635.606 Disqualification based on an arrangement concerning prospective 
          employment or otherwise after negotiations.

                      Subpart G_Misuse of Position

2635.701 Overview.
2635.702 Use of public office for private gain.
2635.703 Use of nonpublic information.
2635.704 Use of Government property.
2635.705 Use of official time.

                      Subpart H_Outside Activities

2635.801 Overview.
2635.802 Conflicting outside employment and activities.
2635.803 Prior approval for outside employment and activities.
2635.804 Outside earned income limitations applicable to certain 
          Presidential appointees and other noncareer employees.
2635.805 Service as an expert witness.
2635.806 Participation in professional associations. [Reserved]
2635.807 Teaching, speaking and writing.
2635.808 Fundraising activities.
2635.809 Just financial obligations.

                 Subpart I_Related Statutory Authorities

2635.901 General.
2635.902 Related statutes.

    Authority: 5 U.S.C. 7301, 7351, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    Source: 57 FR 35042, Aug. 7, 1992, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2635.101  Basic obligation of public service.

    (a) Public service is a public trust. Each employee has a 
responsibility to the United States Government and its citizens to place 
loyalty to the Constitution, laws and ethical principles above private 
gain. To ensure that every citizen can have complete confidence in the 
integrity of the Federal Government, each employee shall respect and 
adhere to the principles of ethical conduct set forth in this section, 
as well as the implementing standards contained in this part and in 
supplemental agency regulations.
    (b) General principles. The following general principles apply to 
every employee and may form the basis for the standards contained in 
this part. Where a situation is not covered by the standards set forth 
in this part, employees shall apply the principles set forth in this 
section in determining whether their conduct is proper.
    (1) Public service is a public trust, requiring employees to place 
loyalty to the Constitution, the laws and ethical principles above 
private gain.
    (2) Employees shall not hold financial interests that conflict with 
the conscientious performance of duty.
    (3) Employees shall not engage in financial transactions using 
nonpublic Government information or allow the improper use of such 
information to further any private interest.
    (4) An employee shall not, except as permitted by subpart B of this 
part, solicit or accept any gift or other item of monetary value from 
any person or entity seeking official action from, doing business with, 
or conducting activities regulated by the employee's agency, or whose 
interests may be substantially affected by the performance or 
nonperformance of the employee's duties.
    (5) Employees shall put forth honest effort in the performance of 
their duties.
    (6) Employees shall not knowingly make unauthorized commitments or 
promises of any kind purporting to bind the Government.

[[Page 548]]

    (7) Employees shall not use public office for private gain.
    (8) Employees shall act impartially and not give preferential 
treatment to any private organization or individual.
    (9) Employees shall protect and conserve Federal property and shall 
not use it for other than authorized activities.
    (10) Employees shall not engage in outside employment or activities, 
including seeking or negotiating for employment, that conflict with 
official Government duties and responsibilities.
    (11) Employees shall disclose waste, fraud, abuse, and corruption to 
appropriate authorities.
    (12) Employees shall satisfy in good faith their obligations as 
citizens, including all just financial obligations, especially those--
such as Federal, State, or local taxes--that are imposed by law.
    (13) Employees shall adhere to all laws and regulations that provide 
equal opportunity for all Americans regardless of race, color, religion, 
sex, national origin, age, or handicap.
    (14) Employees shall endeavor to avoid any actions creating the 
appearance that they are violating the law or the ethical standards set 
forth in this part. Whether particular circumstances create an 
appearance that the law or these standards have been violated shall be 
determined from the perspective of a reasonable person with knowledge of 
the relevant facts.
    (c) Related statutes. In addition to the standards of ethical 
conduct set forth in this part, there are conflict of interest statutes 
that prohibit certain conduct. Criminal conflict of interest statutes of 
general applicability to all employees, 18 U.S.C. 201, 203, 205, 208, 
and 209, are summarized in the appropriate subparts of this part and 
must be taken into consideration in determining whether conduct is 
proper. Citations to other generally applicable statutes relating to 
employee conduct are set forth in subpart I and employees are further 
cautioned that there may be additional statutory and regulatory 
restrictions applicable to them generally or as employees of their 
specific agencies. Because an employee is considered to be on notice of 
the requirements of any statute, an employee should not rely upon any 
description or synopsis of a statutory restriction, but should refer to 
the statute itself and obtain the advice of an agency ethics official as 
needed.



Sec. 2635.102  Definitions.

    The definitions listed below are used throughout this part. 
Additional definitions appear in the subparts or sections of subparts to 
which they apply. For purposes of this part:
    (a) Agency means an executive agency as defined in 5 U.S.C. 105 and 
the Postal Service and the Postal Rate Commission. It does not include 
the General Accounting Office or the Government of the District of 
Columbia.
    (b) Agency designee refers to any employee who, by agency 
regulation, instruction, or other issuance, has been delegated authority 
to make any determination, give any approval, or take any other action 
required or permitted by this part with respect to another employee. An 
agency may delegate these authorities to any number of agency designees 
necessary to ensure that determinations are made, approvals are given, 
and other actions are taken in a timely and responsible manner. Any 
provision that requires a determination, approval, or other action by 
the agency designee shall, where the conduct in issue is that of the 
agency head, be deemed to require that such determination, approval or 
action be made or taken by the agency head in consultation with the 
designated agency ethics official.
    (c) Agency ethics official refers to the designated agency ethics 
official or to the alternate designated agency ethics official, referred 
to in Sec. 2638.202(b) of this chapter, and to any deputy ethics 
official, described in Sec. 2638.204 of this chapter, who has been 
delegated authority to assist in carrying out the responsibilities of 
the designated agency ethics official.
    (d) Agency programs or operations refers to any program or function 
carried out or performed by an agency, whether pursuant to statute, 
Executive order, or regulation.
    (e) Corrective action includes any action necessary to remedy a past 
violation or prevent a continuing violation

[[Page 549]]

of this part, including but not limited to restitution, change of 
assignment, disqualification, divestiture, termination of an activity, 
waiver, the creation of a qualified diversified or blind trust, or 
counseling.
    (f) Designated agency ethics official refers to the official 
designated under Sec. 2638.201 of this chapter.
    (g) Disciplinary action includes those disciplinary actions referred 
to in Office of Personnel Management regulations and instructions 
implementing provisions of title 5 of the United States Code or provided 
for in comparable provisions applicable to employees not subject to 
title 5, including but not limited to reprimand, suspension, demotion, 
and removal. In the case of a military officer, comparable provisions 
may include those in the Uniform Code of Military Justice.
    (h) Employee means any officer or employee of an agency, including a 
special Government employee. It includes officers but not enlisted 
members of the uniformed services. It includes employees of a State or 
local government or other organization who are serving on detail to an 
agency, pursuant to 5 U.S.C. 3371, et seq. For purposes other than 
subparts B and C of this part, it does not include the President or Vice 
President. Status as an employee is unaffected by pay or leave status 
or, in the case of a special Government employee, by the fact that the 
individual does not perform official duties on a given day.
    (i) Head of an agency means, in the case of an agency headed by more 
than one person, the chair or comparable member of such agency.
    (j) He, his, and him include she, hers and her.
    (k) Person means an individual, corporation and subsidiaries it 
controls, company, association, firm, partnership, society, joint stock 
company, or any other organization or institution, including any 
officer, employee, or agent of such person or entity. For purposes of 
this part, a corporation will be deemed to control a subsidiary if it 
owns 50 percent or more of the subsidiary's voting securities. The term 
is all-inclusive and applies to commercial ventures and nonprofit 
organizations as well as to foreign, State, and local governments, 
including the Government of the District of Columbia. It does not 
include any agency or other entity of the Federal Government or any 
officer or employee thereof when acting in his official capacity on 
behalf of that agency or entity.
    (l) Special Government employee means those executive branch 
officers or employees specified in 18 U.S.C. 202(a). A special 
Government employee is retained, designated, appointed, or employed to 
perform temporary duties either on a full-time or intermittent basis, 
with or without compensation, for a period not to exceed 130 days during 
any consecutive 365-day period.
    (m) Supplemental agency regulation means a regulation issued 
pursuant to Sec. 2635.105.

[57 FR 35042, Aug. 7, 1992, as amended at 71 FR 45736, Aug. 10, 2006]



Sec. 2635.103  Applicability to members of the uniformed services.

    The provisions of this part, except this section, are not applicable 
to enlisted members of the uniformed services. Each agency with 
jurisdiction over enlisted members of the uniformed services shall issue 
regulations defining the ethical conduct obligations of enlisted members 
under its jurisdiction. Those regulations shall be consistent with 
Executive Order 12674, April 12, 1989, as modified, and may prescribe 
the full range of statutory and regulatory sanctions, including those 
available under the Uniform Code of Military Justice, for failure to 
comply with such regulations.



Sec. 2635.104  Applicability to employees on detail.

    (a) Details to other agencies. Except as provided in paragraph (d) 
of this section, an employee on detail, including a uniformed officer on 
assignment, from his employing agency to another agency for a period in 
excess of 30 calendar days shall be subject to any supplemental agency 
regulations of the agency to which he is detailed rather than to any 
supplemental agency regulations of his employing agency.
    (b) Details to the legislative or judicial branch. An employee on 
detail, including a uniformed officer on assignment,

[[Page 550]]

from his employing agency to the legislative or judicial branch for a 
period in excess of 30 calendar days shall be subject to the ethical 
standards of the branch or entity to which detailed. For the duration of 
any such detail or assignment, the employee shall not be subject to the 
provisions of this part, except this section, or, except as provided in 
paragraph (d) of this section, to any supplemental agency regulations of 
his employing agency, but shall remain subject to the conflict of 
interest prohibitions in title 18 of the United States Code.
    (c) Details to non-Federal entities. Except to the extent exempted 
in writing pursuant to this paragraph, an employee detailed to a non-
Federal entity remains subject to this part and to any supplemental 
agency regulation of his employing agency. When an employee is detailed 
pursuant to statutory authority to an international organization or to a 
State or local government for a period in excess of six months, the 
designated agency ethics official may grant a written exemption from 
subpart B of this part based on his determination that the entity has 
adopted written ethical standards covering solicitation and acceptance 
of gifts which will apply to the employee during the detail and which 
will be appropriate given the purpose of the detail.
    (d) Applicability of special agency statutes. Notwithstanding 
paragraphs (a) and (b) of this section, an employee who is subject to an 
agency statute which restricts his activities or financial holdings 
specifically because of his status as an employee of that agency shall 
continue to be subject to any provisions in the supplemental agency 
regulations of his employing agency that implement that statute.



Sec. 2635.105  Supplemental agency regulations.

    In addition to the regulations set forth in this part, an employee 
shall comply with any supplemental agency regulations issued by his 
employing agency under this section.
    (a) An agency that wishes to supplement this part shall prepare and 
submit to the Office of Government Ethics, for its concurrence and joint 
issuance, any agency regulations that supplement the regulations 
contained in this part. Supplemental agency regulations which the agency 
determines are necessary and appropriate, in view of its programs and 
operations, to fulfill the purposes of this part shall be:
    (1) In the form of a supplement to the regulations in this part; and
    (2) In addition to the substantive provisions of this part.
    (b) After concurrence and co-signature by the Office of Government 
Ethics, the agency shall submit its supplemental agency regulations to 
the Federal Register for publication and codification at the expense of 
the agency in title 5 of the Code of Federal Regulations. Supplemental 
agency regulations issued under this section are effective only after 
concurrence and co-signature by the Office of Government Ethics and 
publication in the Federal Register.
    (c) This section applies to any supplemental agency regulations or 
amendments thereof issued under this part. It does not apply to:
    (1) A handbook or other issuance intended merely as an explanation 
of the standards contained in this part or in supplemental agency 
regulations;
    (2) An instruction or other issuance the purpose of which is to:
    (i) Delegate to an agency designee authority to make any 
determination, give any approval or take any other action required or 
permitted by this part or by supplemental agency regulations; or
    (ii) Establish internal agency procedures for documenting or 
processing any determination, approval or other action required or 
permitted by this part or by supplemental agency regulations, or for 
retaining any such documentation; or
    (3) Regulations or instructions that an agency has authority, 
independent of this part, to issue, such as regulations implementing an 
agency's gift acceptance statute, protecting categories of nonpublic 
information or establishing standards for use of Government vehicles. 
Where the content of any such regulations or instructions was included 
in the agency's standards of conduct regulations issued pursuant to 
Executive Order 11222 and the Office of Government Ethics concurs that

[[Page 551]]

they need not be issued as part of an agency's supplemental agency 
regulations, those regulations or instructions may be promulgated 
separately from the agency's supplemental agency regulations.
    (d) Employees of a State or local government or other organization 
who are serving on detail to an agency, pursuant to 5 U.S.C. 3371, et 
seq., are subject to any requirements, in addition to those in this 
part, established by a supplemental agency regulation issued under this 
section to the extent that such regulation expressly provides.

[57 FR 35042, Aug. 7, 1992, as amended at 71 FR 45736, Aug. 10, 2006]



Sec. 2635.106  Disciplinary and corrective action.

    (a) Except as provided in Sec. 2635.107, a violation of this part 
or of supplemental agency regulations may be cause for appropriate 
corrective or disciplinary action to be taken under applicable 
Governmentwide regulations or agency procedures. Such action may be in 
addition to any action or penalty prescribed by law.
    (b) It is the responsibility of the employing agency to initiate 
appropriate disciplinary or corrective action in individual cases. 
However, corrective action may be ordered or disciplinary action 
recommended by the Director of the Office of Government Ethics under the 
procedures at part 2638 of this chapter.
    (c) A violation of this part or of supplemental agency regulations, 
as such, does not create any right or benefit, substantive or 
procedural, enforceable at law by any person against the United States, 
its agencies, its officers or employees, or any other person. Thus, for 
example, an individual who alleges that an employee has failed to adhere 
to laws and regulations that provide equal opportunity regardless of 
race, color, religion, sex, national origin, age, or handicap is 
required to follow applicable statutory and regulatory procedures, 
including those of the Equal Employment Opportunity Commission.



Sec. 2635.107  Ethics advice.

    (a) As required by Sec. Sec. 2638.201 and 2638.202(b) of this 
chapter, each agency has a designated agency ethics official who, on the 
agency's behalf, is responsible for coordinating and managing the 
agency's ethics program, as well as an alternate. The designated agency 
ethics official has authority under Sec. 2638.204 of this chapter to 
delegate certain responsibilities, including that of providing ethics 
counseling regarding the application of this part, to one or more deputy 
ethics officials.
    (b) Employees who have questions about the application of this part 
or any supplemental agency regulations to particular situations should 
seek advice from an agency ethics official. Disciplinary action for 
violating this part or any supplemental agency regulations will not be 
taken against an employee who has engaged in conduct in good faith 
reliance upon the advice of an agency ethics official, provided that the 
employee, in seeking such advice, has made full disclosure of all 
relevant circumstances. Where the employee's conduct violates a criminal 
statute, reliance on the advice of an agency ethics official cannot 
ensure that the employee will not be prosecuted under that statute. 
However, good faith reliance on the advice of an agency ethics official 
is a factor that may be taken into account by the Department of Justice 
in the selection of cases for prosecution. Disclosures made by an 
employee to an agency ethics official are not protected by an attorney-
client privilege. An agency ethics official is required by 28 U.S.C. 535 
to report any information he receives relating to a violation of the 
criminal code, title 18 of the United States Code.



                  Subpart B_Gifts From Outside Sources



Sec. 2635.201  Overview.

    This subpart contains standards that prohibit an employee from 
soliciting or accepting any gift from a prohibited source or given 
because of the employee's official position unless the item is excluded 
from the definition of a gift or falls within one of the exceptions set 
forth in this subpart.



Sec. 2635.202  General standards.

    (a) General prohibitions. Except as provided in this subpart, an 
employee

[[Page 552]]

shall not, directly or indirectly, solicit or accept a gift:
    (1) From a prohibited source; or
    (2) Given because of the employee's official position.
    (b) Relationship to illegal gratuities statute. Unless accepted in 
violation of paragraph (c)(1) of this section, a gift accepted under the 
standards set forth in this subpart shall not constitute an illegal 
gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B).
    (c) Limitations on use of exceptions. Notwithstanding any exception 
provided in this subpart, other than Sec. 2635.204(j), an employee 
shall not:
    (1) Accept a gift in return for being influenced in the performance 
of an official act;
    (2) Solicit or coerce the offering of a gift;
    (3) Accept gifts from the same or different sources on a basis so 
frequent that a reasonable person would be led to believe the employee 
is using his public office for private gain;

    Example 1: A purchasing agent for a Veterans Administration hospital 
routinely deals with representatives of pharmaceutical manufacturers who 
provide information about new company products. Because of his crowded 
calendar, the purchasing agent has offered to meet with manufacturer 
representatives during his lunch hours Tuesdays through Thursdays and 
the representatives routinely arrive at the employee's office bringing a 
sandwich and a soft drink for the employee. Even though the market value 
of each of the lunches is less than $6 and the aggregate value from any 
one manufacturer does not exceed the $50 aggregate limitation in Sec. 
2635.204(a) on de minimis gifts of $20 or less, the practice of 
accepting even these modest gifts on a recurring basis is improper.

    (4) Accept a gift in violation of any statute. Relevant statutes 
applicable to all employees include:
    (i) 18 U.S.C. 201(b), which prohibits a public official from 
seeking, accepting, or agreeing to receive or accept anything of value 
in return for being influenced in the performance of an official act or 
for being induced to take or omit to take any action in violation of his 
official duty. As used in 18 U.S.C. 201(b), the term ``public official'' 
is broadly construed and includes regular and special Government 
employees as well as all other Government officials; and
    (ii) 18 U.S.C. 209, which prohibits an employee, other than a 
special Government employee, from receiving any salary or any 
contribution to or supplementation of salary from any source other than 
the United States as compensation for services as a Government employee. 
The statute contains several specific exceptions to this general 
prohibition, including an exception for contributions made from the 
treasury of a State, county, or municipality; or
    (5) Accept vendor promotional training contrary to applicable 
regulations, policies or guidance relating to the procurement of 
supplies and services for the Government, except pursuant to Sec. 
2635.204(l).

[57 FR 35041, Aug. 7, 1992; 57 FR 48557, Oct. 27, 1992, as amended at 62 
FR 48747, Sept. 17, 1997]



Sec. 2635.203  Definitions.

    For purposes of this subpart, the following definitions shall apply:
    (a) Agency has the meaning set forth in Sec. 2635.102(a). However, 
for purposes of this subpart, an executive department, as defined in 5 
U.S.C. 101, may, by supplemental agency regulation, designate as a 
separate agency any component of that department which the department 
determines exercises distinct and separate functions.
    (b) Gift includes any gratuity, favor, discount, entertainment, 
hospitality, loan, forbearance, or other item having monetary value. It 
includes services as well as gifts of training, transportation, local 
travel, lodgings and meals, whether provided in-kind, by purchase of a 
ticket, payment in advance, or reimbursement after the expense has been 
incurred. It does not include:
    (1) Modest items of food and refreshments, such as soft drinks, 
coffee and donuts, offered other than as part of a meal;
    (2) Greeting cards and items with little intrinsic value, such as 
plaques, certificates, and trophies, which are intended solely for 
presentation;
    (3) Loans from banks and other financial institutions on terms 
generally available to the public;

[[Page 553]]

    (4) Opportunities and benefits, including favorable rates and 
commercial discounts, available to the public or to a class consisting 
of all Government employees or all uniformed military personnel, whether 
or not restricted on the basis of geographic considerations;
    (5) Rewards and prizes given to competitors in contests or events, 
including random drawings, open to the public unless the employee's 
entry into the contest or event is required as part of his official 
duties;
    (6) Pension and other benefits resulting from continued 
participation in an employee welfare and benefits plan maintained by a 
former employer;
    (7) Anything which is paid for by the Government or secured by the 
Government under Government contract;
    Note: Some airlines encourage those purchasing tickets to join 
programs that award free flights and other benefits to frequent fliers. 
Any such benefit earned on the basis of Government-financed travel 
belongs to the agency rather than to the employee and may be accepted 
only insofar as provided under 41 CFR 301-53.
    (8) Any gift accepted by the Government under specific statutory 
authority, including:
    (i) Travel, subsistence, and related expenses accepted by an agency 
under the authority of 31 U.S.C. 1353 in connection with an employee's 
attendance at a meeting or similar function relating to his official 
duties which takes place away from his duty station. The agency's 
acceptance must be in accordance with the implementing regulations at 41 
CFR part 304-1; and
    (ii) Other gifts provided in-kind which have been accepted by an 
agency under its agency gift acceptance statute; or
    (9) Anything for which market value is paid by the employee.
    (c) Market value means the retail cost the employee would incur to 
purchase the gift. An employee who cannot ascertain the market value of 
a gift may estimate its market value by reference to the retail cost of 
similar items of like quality. The market value of a gift of a ticket 
entitling the holder to food, refreshments, entertainment, or any other 
benefit shall be the face value of the ticket.

    Example 1: An employee who has been given an acrylic paperweight 
embedded with the corporate logo of a prohibited source may determine 
its market value based on her observation that a comparable acrylic 
paperweight, not embedded with a logo, generally sells for about $20.
    Example 2: A prohibited source has offered an employee a ticket to a 
charitable event consisting of a cocktail reception to be followed by an 
evening of chamber music. Even though the food, refreshments, and 
entertainment provided at the event may be worth only $20, the market 
value of the ticket is its $250 face value.

    (d) Prohibited source means any person who:
    (1) Is seeking official action by the employee's agency;
    (2) Does business or seeks to do business with the employee's 
agency;
    (3) Conducts activities regulated by the employee's agency;
    (4) Has interests that may be substantially affected by performance 
or nonperformance of the employee's official duties; or
    (5) Is an organization a majority of whose members are described in 
paragraphs (d) (1) through (4) of this section.
    (e) A gift is solicited or accepted because of the employee's 
official position if it is from a person other than an employee and 
would not have been solicited, offered, or given had the employee not 
held the status, authority or duties associated with his Federal 
position.

    Note: Gifts between employees are subject to the limitations set 
forth in subpart C of this part.
    Example 1: Where free season tickets are offered by an opera guild 
to all members of the Cabinet, the gift is offered because of their 
official positions.
    Example 2: Employees at a regional office of the Department of 
Justice (DOJ) work in Government-leased space at a private office 
building, along with various private business tenants. A major fire in 
the building during normal office hours causes a traumatic experience 
for all occupants of the building in making their escape, and it is the 
subject of widespread news coverage. A corporate hotel chain, which does 
not meet the definition of a prohibited source for DOJ, seizes the 
moment and announces that it will give a free night's lodging to all 
building occupants and their families, as a public goodwill gesture. 
Employees of DOJ may accept, as this gift is not being given because of 
their Government positions. The donor's motivation for offering this 
gift is unrelated to the DOJ employees' status, authority or duties 
associated

[[Page 554]]

with their Federal position, but instead is based on their mere presence 
in the building as occupants at the time of the fire.

    (f) A gift which is solicited or accepted indirectly includes a 
gift:
    (1) Given with the employee's knowledge and acquiescence to his 
parent, sibling, spouse, child, or dependent relative because of that 
person's relationship to the employee, or
    (2) Given to any other person, including any charitable 
organization, on the basis of designation, recommendation, or other 
specification by the employee, except as permitted for the disposition 
of perishable items by Sec. 2635.205(a)(2) or for payments made to 
charitable organizations in lieu of honoraria under Sec. 2636.204 of 
this chapter.

    Example 1: An employee who must decline a gift of a personal 
computer pursuant to this subpart may not suggest that the gift be given 
instead to one of five charitable organizations whose names are provided 
by the employee.

    (g) Vendor promotional training means training provided by any 
person for the purpose of promoting its products or services. It does 
not include training provided under a Government contract or by a 
contractor to facilitate use of products or services it furnishes under 
a Government contract.

[57 FR 35042, Aug. 7, 1992, as amended at 60 FR 51667, Oct. 3, 1995; 63 
FR 69993, Dec. 18, 1998; 64 FR 2422, Jan. 14, 1999]



Sec. 2635.204  Exceptions.

    The prohibitions set forth in Sec. 2635.202(a) do not apply to a 
gift accepted under the circumstances described in paragraphs (a) 
through (l) of this section, and an employee's acceptance of a gift in 
accordance with one of those paragraphs will be deemed not to violate 
the principles set forth in Sec. 2635.101(b), including appearances. 
Even though acceptance of a gift may be permitted by one of the 
exceptions contained in paragraphs (a) through (l) of this section, it 
is never inappropriate and frequently prudent for an employee to decline 
a gift offered by a prohibited source or because of his official 
position.
    (a) Gifts of $20 or less. An employee may accept unsolicited gifts 
having an aggregate market value of $20 or less per source per occasion, 
provided that the aggregate market value of individual gifts received 
from any one person under the authority of this paragraph shall not 
exceed $50 in a calendar year. This exception does not apply to gifts of 
cash or of investment interests such as stock, bonds, or certificates of 
deposit. Where the market value of a gift or the aggregate market value 
of gifts offered on any single occasion exceeds $20, the employee may 
not pay the excess value over $20 in order to accept that portion of the 
gift or those gifts worth $20. Where the aggregate value of tangible 
items offered on a single occasion exceeds $20, the employee may decline 
any distinct and separate item in order to accept those items 
aggregating $20 or less.

    Example 1: An employee of the Securities and Exchange Commission and 
his spouse have been invited by a representative of a regulated entity 
to a Broadway play, tickets to which have a face value of $30 each. The 
aggregate market value of the gifts offered on this single occasion is 
$60, $40 more than the $20 amount that may be accepted for a single 
event or presentation. The employee may not accept the gift of the 
evening of entertainment. He and his spouse may attend the play only if 
he pays the full $60 value of the two tickets.
    Example 2: An employee of the Defense Mapping Agency has been 
invited by an association of cartographers to speak about his agency's 
role in the evolution of missile technology. At the conclusion of his 
speech, the association presents the employee a framed map with a market 
value of $18 and a book about the history of cartography with a market 
value of $15. The employee may accept the map or the book, but not both, 
since the aggregate value of these two tangible items exceeds $20.
    Example 3: On four occasions during the calendar year, an employee 
of the Defense Logistics Agency was given gifts worth $10 each by four 
employees of a corporation that is a DLA contractor. For purposes of 
applying the yearly $50 limitation on gifts of $20 or less from any one 
person, the four gifts must be aggregated because a person is defined at 
Sec. 2635.102(k) to mean not only the corporate entity, but its 
officers and employees as well. However, for purposes of applying the 
$50 aggregate limitation, the employee would not have to include the 
value of a birthday present received from his cousin, who is employed by 
the same corporation, if he can accept the birthday present under the 
exception at Sec. 2635.204(b) for gifts based on a personal 
relationship.

[[Page 555]]

    Example 4: Under the authority of 31 U.S.C. 1353 for agencies to 
accept payments from non-Federal sources in connection with attendance 
at certain meetings or similar functions, the Environmental Protection 
Agency has accepted an association's gift of travel expenses and 
conference fees for an employee of its Office of Radiation Programs to 
attend an international conference on ``The Chernobyl Experience.'' 
While at the conference, the employee may accept a gift of $20 or less 
from the association or from another person attending the conference 
even though it was not approved in advance by the EPA. Although 31 
U.S.C. 1353 is the only authority under which an agency may accept gifts 
from certain non-Federal sources in connection with its employees' 
attendance at such functions, a gift of $20 or less accepted under Sec. 
2635.204(a) is a gift to the employee rather than to his employing 
agency.
    Example 5: During off-duty time, an employee of the Department of 
Defense (DOD) attends a trade show involving companies that are DOD 
contractors. He is offered a $15 computer program disk at X Company's 
booth, a $12 appointments calendar at Y Company's booth, and a deli 
lunch worth $8 from Z Company. The employee may accept all three of 
these items because they do not exceed $20 per source, even though they 
total more than $20 at this single occasion.

    (b) Gifts based on a personal relationship. An employee may accept a 
gift given under circumstances which make it clear that the gift is 
motivated by a family relationship or personal friendship rather than 
the position of the employee. Relevant factors in making such a 
determination include the history of the relationship and whether the 
family member or friend personally pays for the gift.

    Example 1: An employee of the Federal Deposit Insurance Corporation 
has been dating a secretary employed by a member bank. For Secretary's 
Week, the bank has given each secretary 2 tickets to an off-Broadway 
musical review and has urged each to invite a family member or friend to 
share the evening of entertainment. Under the circumstances, the FDIC 
employee may accept his girlfriend's invitation to the theater. Even 
though the tickets were initially purchased by the member bank, they 
were given without reservation to the secretary to use as she wished, 
and her invitation to the employee was motivated by their personal 
friendship.
    Example 2: Three partners in a law firm that handles corporate 
mergers have invited an employee of the Federal Trade Commission to join 
them in a golf tournament at a private club at the firm's expense. The 
entry fee is $500 per foursome. The employee cannot accept the gift of 
one-quarter of the entry fee even though he and the three partners have 
developed an amicable relationship as a result of the firm's dealings 
with the FTC. As evidenced in part by the fact that the fees are to be 
paid by the firm, it is not a personal friendship but a business 
relationship that is the motivation behind the partners' gift.

    (c) Discounts and similar benefits. In addition to those 
opportunities and benefits excluded from the definition of a gift by 
Sec. 2635.203(b)(4), an employee may accept:
    (1) Reduced membership or other fees for participation in 
organization activities offered to all Government employees or all 
uniformed military personnel by professional organizations if the only 
restrictions on membership relate to professional qualifications; and
    (2) Opportunities and benefits, including favorable rates and 
commercial discounts not precluded by paragraph (c)(3) of this section:
    (i) Offered to members of a group or class in which membership is 
unrelated to Government employment;
    (ii) Offered to members of an organization, such as an employees' 
association or agency credit union, in which membership is related to 
Government employment if the same offer is broadly available to large 
segments of the public through organizations of similar size; or
    (iii) Offered by a person who is not a prohibited source to any 
group or class that is not defined in a manner that specifically 
discriminates among Government employees on the basis of type of 
official responsibility or on a basis that favors those of higher rank 
or rate of pay; provided, however, that
    (3) An employee may not accept for personal use any benefit to which 
the Government is entitled as the result of an expenditure of Government 
funds.

    Example 1: An employee of the Consumer Product Safety Commission may 
accept a discount of $50 on a microwave oven offered by the manufacturer 
to all members of the CPSC employees' association. Even though the CPSC 
is currently conducting studies on the safety of microwave ovens, the 
$50 discount is a standard offer that the manufacturer has made broadly 
available through a

[[Page 556]]

number of similar organizations to large segments of the public.
    Example 2: An Assistant Secretary may not accept a local country 
club's offer of membership to all members of Department Secretariats 
which includes a waiver of its $5,000 membership initiation fee. Even 
though the country club is not a prohibited source, the offer 
discriminates in favor of higher ranking officials.
    Example 3: The administrative officer for a district office of the 
Immigration and Naturalization Service has signed an INS order to 
purchase 50 boxes of photocopy paper from a supplier whose literature 
advertises that it will give a free briefcase to anyone who purchases 50 
or more boxes. Because the paper was purchased with INS funds, the 
administrative officer cannot keep the briefcase which, if claimed and 
received, is Government property.

    (d) Awards and honorary degrees. (1) An employee may accept gifts, 
other than cash or an investment interest, with an aggregate market 
value of $200 or less if such gifts are a bona fide award or incident to 
a bona fide award that is given for meritorious public service or 
achievement by a person who does not have interests that may be 
substantially affected by the performance or nonperformance of the 
employee's official duties or by an association or other organization 
the majority of whose members do not have such interests. Gifts with an 
aggregate market value in excess of $200 and awards of cash or 
investment interests offered by such persons as awards or incidents of 
awards that are given for these purposes may be accepted upon a written 
determination by an agency ethics official that the award is made as 
part of an established program of recognition:
    (i) Under which awards have been made on a regular basis or which is 
funded, wholly or in part, to ensure its continuation on a regular 
basis; and
    (ii) Under which selection of award recipients is made pursuant to 
written standards.
    (2) An employee may accept an honorary degree from an institution of 
higher education as defined at 20 U.S.C. 1141(a) based on a written 
determination by an agency ethics official that the timing of the award 
of the degree would not cause a reasonable person to question the 
employee's impartiality in a matter affecting the institution.
    (3) An employee who may accept an award or honorary degree pursuant 
to paragraph (d)(1) or (2) of this section may also accept meals and 
entertainment given to him and to members of his family at the event at 
which the presentation takes place.

    Example 1: Based on a determination by an agency ethics official 
that the prize meets the criteria set forth in Sec. 2635.204(d)(1), an 
employee of the National Institutes of Health may accept the Nobel Prize 
for Medicine, including the cash award which accompanies the prize, even 
though the prize was conferred on the basis of laboratory work performed 
at NIH.
    Example 2: Prestigious University wishes to give an honorary degree 
to the Secretary of Labor. The Secretary may accept the honorary degree 
only if an agency ethics official determines in writing that the timing 
of the award of the degree would not cause a reasonable person to 
question the Secretary's impartiality in a matter affecting the 
university.
    Example 3: An ambassador selected by a nonprofit organization as 
recipient of its annual award for distinguished service in the interest 
of world peace may, together with his wife, and children, attend the 
awards ceremony dinner and accept a crystal bowl worth $200 presented 
during the ceremony. However, where the organization has also offered 
airline tickets for the ambassador and his family to travel to the city 
where the awards ceremony is to be held, the aggregate value of the 
tickets and the crystal bowl exceeds $200 and he may accept only upon a 
written determination by the agency ethics official that the award is 
made as part of an established program of recognition.

    (e) Gifts based on outside business or employment relationships. An 
employee may accept meals, lodgings, transportation and other benefits:
    (1) Resulting from the business or employment activities of an 
employee's spouse when it is clear that such benefits have not been 
offered or enhanced because of the employee's official position;

    Example 1: A Department of Agriculture employee whose husband is a 
computer programmer employed by an Agriculture Department contractor may 
attend the company's annual retreat for all of its employees and their 
families held at a resort facility. However, under Sec. 2635.502, the 
employee may be disqualified from performing official duties affecting 
her husband's employer.
    Example 2: Where the spouses of other clerical personnel have not 
been invited, an employee of the Defense Contract Audit Agency

[[Page 557]]

whose wife is a clerical worker at a defense contractor may not attend 
the contractor's annual retreat in Hawaii for corporate officers and 
members of the board of directors, even though his wife received a 
special invitation for herself and her spouse.

    (2) Resulting from his outside business or employment activities 
when it is clear that such benefits have not been offered or enhanced 
because of his official status; or

    Example 1: The members of an Army Corps of Engineers environmental 
advisory committee that meets 6 times per year are special Government 
employees. A member who has a consulting business may accept an 
invitation to a $50 dinner from her corporate client, an Army 
construction contractor, unless, for example, the invitation was 
extended in order to discuss the activities of the committee.

    (3) Customarily provided by a prospective employer in connection 
with bona fide employment discussions. If the prospective employer has 
interests that could be affected by performance or nonperformance of the 
employee's duties, acceptance is permitted only if the employee first 
has complied with the disqualification requirements of subpart F of this 
part applicable when seeking employment.

    Example 1: An employee of the Federal Communications Commission with 
responsibility for drafting regulations affecting all cable television 
companies wishes to apply for a job opening with a cable television 
holding company. Once she has properly disqualified herself from further 
work on the regulations as required by subpart F of this part, she may 
enter into employment discussions with the company and may accept the 
company's offer to pay for her airfare, hotel and meals in connection 
with an interview trip.

    (4) For purposes of paragraphs (e)(1) through (3) of this section, 
employment shall have the meaning set forth in Sec. 2635.603(a).
    (f) Gifts in connection with political activities permitted by the 
Hatch Act Reform Amendments. An employee who, in accordance with the 
Hatch Act Reform Amendments of 1993, at 5 U.S.C. 7323, may take an 
active part in political management or in political campaigns, may 
accept meals, lodgings, transportation and other benefits, including 
free attendance at events, when provided, in connection with such active 
participation, by a political organization described in 26 U.S.C. 
527(e). Any other employee, such as a security officer, whose official 
duties require him to accompany an employee to a political event may 
accept meals, free attendance and entertainment provided at the event by 
such an organization.

    Example 1: The Secretary of the Department of Health and Human 
Services may accept an airline ticket and hotel accommodations furnished 
by the campaign committee of a candidate for the United States Senate in 
order to give a speech in support of the candidate.

    (g) Widely attended gatherings and other events--(1) Speaking and 
similar engagements. When an employee is assigned to participate as a 
speaker or panel participant or otherwise to present information on 
behalf of the agency at a conference or other event, his acceptance of 
an offer of free attendance at the event on the day of his presentation 
is permissible when provided by the sponsor of the event. The employee's 
participation in the event on that day is viewed as a customary and 
necessary part of his performance of the assignment and does not involve 
a gift to him or to the agency.
    (2) Widely attended gatherings. When there has been a determination 
that his attendance is in the interest of the agency because it will 
further agency programs and operations, an employee may accept an 
unsolicited gift of free attendance at all or appropriate parts of a 
widely attended gathering of mutual interest to a number of parties from 
the sponsor of the event or, if more than 100 persons are expected to 
attend the event and the gift of free attendance has a market value of 
$305 or less, from a person other than the sponsor of the event. A 
gathering is widely attended if it is expected that a large number of 
persons will attend and that persons with a diversity of views or 
interests will be present, for example, if it is open to members from 
throughout the interested industry or profession or if those in 
attendance represent a range of persons interested in a given matter. 
For employees subject to a leave system, attendance at the event shall 
be on the employee's own time or, if authorized by the employee's 
agency, on excused absence

[[Page 558]]

pursuant to applicable guidelines for granting such absence, or 
otherwise without charge to the employee's leave account.
    (3) Determination of agency interest. The determination of agency 
interest required by paragraph (g)(2) of this section shall be made 
orally or in writing by the agency designee.
    (i) If the person who has extended the invitation has interests that 
may be substantially affected by the performance or nonperformance of an 
employee's official duties or is an association or organization the 
majority of whose members have such interests, the employee's 
participation may be determined to be in the interest of the agency only 
where there is a written finding by the agency designee that the 
agency's interest in the employee's participation in the event outweighs 
the concern that acceptance of the gift of free attendance may or may 
appear to improperly influence the employee in the performance of his 
official duties. Relevant factors that should be considered by the 
agency designee include the importance of the event to the agency, the 
nature and sensitivity of any pending matter affecting the interests of 
the person who has extended the invitation, the significance of the 
employee's role in any such matter, the purpose of the event, the 
identity of other expected participants and the market value of the gift 
of free attendance.
    (ii) A blanket determination of agency interest may be issued to 
cover all or any category of invitees other than those as to whom the 
finding is required by paragraph (g)(3)(i) of this section. Where a 
finding under paragraph (g)(3)(i) of this section is required, a written 
determination of agency interest, including the necessary finding, may 
be issued to cover two or more employees whose duties similarly affect 
the interests of the person who has extended the invitation or, where 
that person is an association or organization, of its members.
    (4) Free attendance. For purposes of paragraphs (g)(1) and (g)(2) of 
this section, free attendance may include waiver of all or part of a 
conference or other fee or the provision of food, refreshments, 
entertainment, instruction and materials furnished to all attendees as 
an integral part of the event. It does not include travel expenses, 
lodgings, entertainment collateral to the event, or meals taken other 
than in a group setting with all other attendees. Where the invitation 
has been extended to an accompanying spouse or other guest (see 
paragraph (g)(6) of this section), the market value of the gift of free 
attendance includes the market value of free attendance by the spouse or 
other guest as well as the market value of the employee's own 
attendance.

    Note: There are statutory authorities implemented other than by part 
2635 under which an agency or an employee may be able to accept free 
attendance or other items not included in the definition of free 
attendance, such as travel expenses.

    (5) Cost provided by sponsor of event. The cost of the employee's 
attendance will not be considered to be provided by the sponsor, and the 
invitation is not considered to be from the sponsor of the event, where 
a person other than the sponsor designates the employee to be invited 
and bears the cost of the employee's attendance through a contribution 
or other payment intended to facilitate that employee's attendance. 
Payment of dues or a similar assessment to a sponsoring organization 
does not constitute a payment intended to facilitate a particular 
employee's attendance.
    (6) Accompanying spouse or other guest. When others in attendance 
will generally be accompanied by a spouse or other guest, and where the 
invitation is from the same person who has invited the employee, the 
agency designee may authorize an employee to accept an unsolicited 
invitation of free attendance to an accompanying spouse or to another 
accompanying guest to participate in all or a portion of the event at 
which the employee's free attendance is permitted under paragraph (g)(1) 
or (g)(2) of this section. The authorization required by this paragraph 
may be provided orally or in writing.

    Example 1: An aerospace industry association that is a prohibited 
source sponsors an industrywide, two-day seminar for which it charges a 
fee of $400 and anticipates attendance of approximately 400. An Air 
Force contractor pays $2,000 to the association so that

[[Page 559]]

the association can extend free invitations to five Air Force officials 
designated by the contractor. The Air Force officials may not accept the 
gifts of free attendance. Because the contractor specified the invitees 
and bore the cost of their attendance, the gift of free attendance is 
considered to be provided by the company and not by the sponsoring 
association. Had the contractor paid $2,000 to the association in order 
that the association might invite any five Federal employees, an Air 
Force official to whom the sponsoring association extended one of the 
five invitations could attend if his participation were determined to be 
in the interest of the agency. The Air Force official could not in any 
case accept an invitation directly from the nonsponsor contractor 
because the market value of the gift exceeds $305.
    Example 2: An employee of the Department of Transportation is 
invited by a news organization to an annual press dinner sponsored by an 
association of press organizations. Tickets for the event cost $305 per 
person and attendance is limited to 400 representatives of press 
organizations and their guests. If the employee's attendance is 
determined to be in the interest of the agency, she may accept the 
invitation from the news organization because more than 100 persons will 
attend and the cost of the ticket does not exceed $305. However, if the 
invitation were extended to the employee and an accompanying guest, her 
guest could not be authorized to attend for free since the market value 
of the gift of free attendance would be $610 and the invitation is from 
a person other than the sponsor of the event.
    Example 3: An employee of the Department of Energy (DOE) and his 
wife have been invited by a major utility executive to a small dinner 
party. A few other officials of the utility and their spouses or other 
guests are also invited, as is a representative of a consumer group 
concerned with utility rates and her husband. The DOE official believes 
the dinner party will provide him an opportunity to socialize with and 
get to know those in attendance. The employee may not accept the free 
invitation under this exception, even if his attendance could be 
determined to be in the interest of the agency. The small dinner party 
is not a widely attended gathering. Nor could the employee be authorized 
to accept even if the event were instead a corporate banquet to which 
forty company officials and their spouses or other guests were invited. 
In this second case, notwithstanding the larger number of persons 
expected (as opposed to the small dinner party just noted) and despite 
the presence of the consumer group representative and her husband who 
are not officials of the utility, those in attendance would still not 
represent a diversity of views or interests. Thus, the company banquet 
would not qualify as a widely attended gathering under those 
circumstances either.
    Example 4: An employee of the Department of the Treasury authorized 
to participate in a panel discussion of economic issues as part of a 
one-day conference may accept the sponsor's waiver of the conference 
fee. Under the separate authority of Sec. 2635.204(a), he may accept a 
token of appreciation for his speech having a market value of $20 or 
less.
    Example 5: An Assistant U.S. Attorney is invited to attend a 
luncheon meeting of a local bar association to hear a distinguished 
judge lecture on cross-examining expert witnesses. Although members of 
the bar association are assessed a $15 fee for the meeting, the 
Assistant U.S. Attorney may accept the bar association's offer to attend 
for free, even without a determination of agency interest. The gift can 
be accepted under the $20 de minimis exception at Sec. 2635.204(a).
    Example 6: An employee of the Department of the Interior authorized 
to speak on the first day of a four-day conference on endangered species 
may accept the sponsor's waiver of the conference fee for the first day 
of the conference. If the conference is widely attended, he may be 
authorized, based on a determination that his attendance is in the 
agency's interest, to accept the sponsor's offer to waive the attendance 
fee for the remainder of the conference.

    (h) Social invitations from persons other than prohibited sources. 
An employee may accept food, refreshments and entertainment, not 
including travel or lodgings, at a social event attended by several 
persons where:
    (1) The invitation is from a person who is not a prohibited source; 
and
    (2) No fee is charged to any person in attendance.

    Example 1: Along with several other Government officials and a 
number of individuals from the private sector, the Administrator of the 
Environmental Protection Agency has been invited to the premier showing 
of a new adventure movie about industrial espionage. The producer is 
paying all costs of the showing. The Administrator may accept the 
invitation since the producer is not a prohibited source and no 
attendance fee is being charged to anyone who has been invited.
    Example 2: An employee of the White House Press Office has been 
invited to a cocktail party given by a noted Washington hostess who is 
not a prohibited source. The employee may attend even though he has only 
recently been introduced to the hostess and suspects that he may have 
been invited because of his official position.


[[Page 560]]


    (i) Meals, refreshments and entertainment in foreign areas. An 
employee assigned to duty in, or on official travel to, a foreign area 
as defined in 41 CFR 301-7.3(c) may accept food, refreshments or 
entertainment in the course of a breakfast, luncheon, dinner or other 
meeting or event provided:
    (1) The market value in the foreign area of the food, refreshments 
or entertainment provided at the meeting or event, as converted to U.S. 
dollars, does not exceed the per diem rate for the foreign area 
specified in the U.S. Department of State's Maximum Per Diem Allowances 
for Foreign Areas, Per Diem Supplement Section 925 to the Standardized 
Regulations (GC,FA) available from the Superintendent of Documents, U.S. 
Government Printing Office, Washington, DC 20402;
    (2) There is participation in the meeting or event by non-U.S. 
citizens or by representatives of foreign governments or other foreign 
entities;
    (3) Attendance at the meeting or event is part of the employee's 
official duties to obtain information, disseminate information, promote 
the export of U.S. goods and services, represent the United States or 
otherwise further programs or operations of the agency or the U.S. 
mission in the foreign area; and
    (4) The gift of meals, refreshments or entertainment is from a 
person other than a foreign government as defined in 5 U.S.C. 
7342(a)(2).

    Example 1: A number of local businessmen in a developing country are 
anxious for a U.S. company to locate a manufacturing facility in their 
province. An official of the Overseas Private Investment Corporation may 
accompany the visiting vice president of the U.S. company to a dinner 
meeting hosted by the businessmen at a province restaurant where the 
market value of the food and refreshments does not exceed the per diem 
rate for that country.

    (j) Gifts to the President or Vice President. Because of 
considerations relating to the conduct of their offices, including those 
of protocol and etiquette, the President or the Vice President may 
accept any gift on his own behalf or on behalf of any family member, 
provided that such acceptance does not violate Sec. 2635.202(c) (1) or 
(2), 18 U.S.C. 201(b) or 201(c)(3), or the Constitution of the United 
States.
    (k) Gifts authorized by supplemental agency regulation. An employee 
may accept any gift the acceptance of which is specifically authorized 
by a supplemental agency regulation.
    (l) Gifts accepted under specific statutory authority. The 
prohibitions on acceptance of gifts from outside sources contained in 
this subpart do not apply to any item, receipt of which is specifically 
authorized by statute. Gifts which may be received by an employee under 
the authority of specific statutes include, but are not limited to:
    (1) Free attendance, course or meeting materials, transportation, 
lodgings, food and refreshments or reimbursements therefor incident to 
training or meetings when accepted by the employee under the authority 
of 5 U.S.C. 4111 from an organization with tax-exempt status under 26 
U.S.C. 501(c)(3) or from a person to whom the prohibitions in 18 U.S.C. 
209 do not apply. The employee's acceptance must be approved by the 
agency in accordance with part 410 of this title; or

    Note: 26 U.S.C. 501(c)(3) is authority for tax-exempt treatment of a 
limited class of nonprofit organizations, including those organized and 
operated for charitable, religious or educational purposes. Many 
nonprofit organizations are not exempt from taxation under this section.

    (2) Gifts from a foreign government or international or 
multinational organization, or its representative, when accepted by the 
employee under the authority of the Foreign Gifts and Decorations Act, 5 
U.S.C. 7342. As a condition of acceptance, an employee must comply with 
requirements imposed by the agency's regulations or procedures 
implementing that Act.

[57 FR 35041, Aug. 7, 1992; 57 FR 48557, Oct. 27, 1992; 61 FR 42969, 
Aug. 20, 1996; 61 FR 48733, Sept. 16, 1996; 61 FR 50691, Sept. 27, 1996; 
62 FR 48747, Sept. 17, 1997; 63 FR 69993, 69994, Dec. 18, 1998; 65 FR 
69657, Nov. 20, 2000; 67 FR 61762, Oct. 2, 2002; 70 FR 12112, Mar. 11, 
2005]



Sec. 2635.205  Proper disposition of prohibited gifts.

    (a) An employee who has received a gift that cannot be accepted 
under this

[[Page 561]]

subpart shall, unless the gift is accepted by an agency acting under 
specific statutory authority:
    (1) Return any tangible item to the donor or pay the donor its 
market value. An employee who cannot ascertain the actual market value 
of an item may estimate its market value by reference to the retail cost 
of similar items of like quality. See Sec. 2635.203(c).

    Example 1: To avoid public embarrassment to the seminar sponsor, an 
employee of the National Park Service did not decline a barometer worth 
$200 given at the conclusion of his speech on Federal lands policy. The 
employee must either return the barometer or promptly reimburse the 
sponsor $200.

    (2) When it is not practical to return a tangible item because it is 
perishable, the item may, at the discretion of the employee's supervisor 
or an agency ethics official, be given to an appropriate charity, shared 
within the recipient's office, or destroyed.

    Example 1: With approval by the recipient's supervisor, a floral 
arrangement sent by a disability claimant to a helpful employee of the 
Social Security Administration may be placed in the office's reception 
area.

    (3) For any entertainment, favor, service, benefit or other 
intangible, reimburse the donor the market value. Subsequent 
reciprocation by the employee does not constitute reimbursement.

    Example 1: A Department of Defense employee wishes to attend a 
charitable event to which he has been offered a $300 ticket by a 
prohibited source. Although his attendance is not in the interest of the 
agency under Sec. 2635.204(g), he may attend if he reimburses the donor 
the $300 face value of the ticket.

    (4) Dispose of gifts from foreign governments or international 
organizations in accordance with 41 CFR part 101-49, and dispose of 
materials received in conjunction with official travel in accordance 
with 41 CFR 101-25.103.
    (b) An agency may authorize disposition or return of gifts at 
Government expense. Employees may use penalty mail to forward 
reimbursements required or permitted by this section.
    (c) An employee who, on his own initiative, promptly complies with 
the requirements of this section will not be deemed to have improperly 
accepted an unsolicited gift. An employee who promptly consults his 
agency ethics official to determine whether acceptance of an unsolicited 
gift is proper and who, upon the advice of the ethics official, returns 
the gift or otherwise disposes of the gift in accordance with this 
section, will be considered to have complied with the requirements of 
this section on his own initiative.



                    Subpart C_Gifts Between Employees



Sec. 2635.301  Overview.

    This subpart contains standards that prohibit an employee from 
giving, donating to, or soliciting contributions for, a gift to an 
official superior and from accepting a gift from an employee receiving 
less pay than himself, unless the item is excluded from the definition 
of a gift or falls within one of the exceptions set forth in this 
subpart.



Sec. 2635.302  General standards.

    (a) Gifts to superiors. Except as provided in this subpart, an 
employee may not:
    (1) Directly or indirectly, give a gift to or make a donation toward 
a gift for an official superior; or
    (2) Solicit a contribution from another employee for a gift to 
either his own or the other employee's official superior.
    (b) Gifts from employees receiving less pay. Except as provided in 
this subpart, an employee may not, directly or indirectly, accept a gift 
from an employee receiving less pay than himself unless:
    (1) The two employees are not in a subordinate-official superior 
relationship; and
    (2) There is a personal relationship between the two employees that 
would justify the gift.
    (c) Limitation on use of exceptions. Notwithstanding any exception 
provided in this subpart, an official superior shall not coerce the 
offering of a gift from a subordinate.



Sec. 2635.303  Definitions.

    For purposes of this subpart, the following definitions shall apply:
    (a) Gift has the meaning set forth in Sec. 2635.203(b). For 
purposes of that definition an employee will be deemed to

[[Page 562]]

have paid market value for any benefit received as a result of his 
participation in any carpool or other such mutual arrangement involving 
another employee or other employees if he bears his fair proportion of 
the expense or effort involved.
    (b) Indirectly, for purposes of Sec. 2635.302(b), has the meaning 
set forth in Sec. 2635.203(f). For purposes of Sec. 2635.302(a), it 
includes a gift:
    (1) Given with the employee's knowledge and acquiescence by his 
parent, sibling, spouse, child, or dependent relative; or
    (2) Given by a person other than the employee under circumstances 
where the employee has promised or agreed to reimburse that person or to 
give that person something of value in exchange for giving the gift.
    (c) Subject to paragraph (a) of this section, market value has the 
meaning set forth in Sec. 2635.203(c).
    (d) Official superior means any other employee, other than the 
President and the Vice President, including but not limited to an 
immediate supervisor, whose official responsibilities include directing 
or evaluating the performance of the employee's official duties or those 
of any other official superior of the employee. For purposes of this 
subpart, an employee is considered to be the subordinate of any of his 
official superiors.
    (e) Solicit means to request contributions by personal communication 
or by general announcement.
    (f) Voluntary contribution means a contribution given freely, 
without pressure or coercion. A contribution is not voluntary unless it 
is made in an amount determined by the contributing employee, except 
that where an amount for a gift is included in the cost for a luncheon, 
reception or similar event, an employee who freely chooses to pay a 
proportionate share of the total cost in order to attend will be deemed 
to have made a voluntary contribution. Except in the case of 
contributions for a gift included in the cost of a luncheon, reception 
or similar event, a statement that an employee may choose to contribute 
less or not at all shall accompany any recommendation of an amount to be 
contributed for a gift to an official superior.

    Example 1: A supervisory employee of the Agency for International 
Development has just been reassigned from Washington, DC to Kabul, 
Afghanistan. As a farewell party, 12 of her subordinates have decided to 
take her out to lunch at the Khyber Repast. It is understood that each 
will pay for his own meal and that the cost of the supervisor's lunch 
will be divided equally among the twelve. Even though the amount they 
will contribute is not determined until the supervisor orders lunch, the 
contribution made by those who choose to participate in the farewell 
lunch is voluntary.



Sec. 2635.304  Exceptions.

    The prohibitions set forth in Sec. 2635.302(a) and (b) do not apply 
to a gift given or accepted under the circumstances described in 
paragraph (a) or (b) of this section. A contribution or the solicitation 
of a contribution that would otherwise violate the prohibitions set 
forth in Sec. 2635.302(a) and (b) may only be made in accordance with 
paragraph (c) of this section.
    (a) General exceptions. On an occasional basis, including any 
occasion on which gifts are traditionally given or exchanged, the 
following may be given to an official superior or accepted from a 
subordinate or other employee receiving less pay:
    (1) Items, other than cash, with an aggregate market value of $10 or 
less per occasion;
    (2) Items such as food and refreshments to be shared in the office 
among several employees;
    (3) Personal hospitality provided at a residence which is of a type 
and value customarily provided by the employee to personal friends;
    (4) Items given in connection with the receipt of personal 
hospitality if of a type and value customarily given on such occasions; 
and
    (5) Leave transferred under subpart I of part 630 of this title to 
an employee who is not an immediate supervisor, unless obtained in 
violation of Sec. 630.912 of this title.

    Example 1: Upon returning to work following a vacation at the beach, 
a claims examiner with the Department of Veterans Affairs may give his 
supervisor, and his supervisor may accept, a bag of saltwater taffy 
purchased on the boardwalk for $8.
    Example 2: An employee of the Federal Deposit Insurance Corporation 
whose bank examination responsibilities require frequent

[[Page 563]]

travel may not bring her supervisor, and her supervisor may not accept, 
souvenir coffee mugs from each of the cities she visits in the course of 
performing her duties, even though each of the mugs costs less than $5. 
Gifts given on this basis are not occasional.
    Example 3: The Secretary of Labor has invited the agency's General 
Counsel to a dinner party at his home. The General Counsel may bring a 
$15 bottle of wine to the dinner party and the Secretary may accept this 
customary hostess gift from his subordinate, even though its cost is in 
excess of $10.
    Example 4: For Christmas, a secretary may give his supervisor, and 
the supervisor may accept, a poinsettia plant purchased for $10 or less. 
The secretary may also invite his supervisor to a Christmas party in his 
home and the supervisor may attend.

    (b) Special, infrequent occasions. A gift appropriate to the 
occasion may be given to an official superior or accepted from a 
subordinate or other employee receiving less pay:
    (1) In recognition of infrequently occurring occasions of personal 
significance such as marriage, illness, or the birth or adoption of a 
child; or
    (2) Upon occasions that terminate a subordinate-official superior 
relationship, such as retirement, resignation, or transfer.

    Example 1: The administrative assistant to the personnel director of 
the Tennessee Valley Authority may send a $30 floral arrangement to the 
personnel director who is in the hospital recovering from surgery. The 
personnel director may accept the gift.
    Example 2: A chemist employed by the Food and Drug Administration 
has been invited to the wedding of the lab director who is his official 
superior. He may give the lab director and his bride, and they may 
accept, a place setting in the couple's selected china pattern purchased 
for $70.
    Example 3: Upon the occasion of the supervisor's retirement from 
Federal service, an employee of the Fish and Wildlife Service may give 
her supervisor a book of wildlife photographs which she purchased for 
$19. The retiring supervisor may accept the book.

    (c) Voluntary contributions. An employee may solicit voluntary 
contributions of nominal amounts from fellow employees for an 
appropriate gift to an official superior and an employee may make a 
voluntary contribution of a nominal amount to an appropriate gift to an 
official superior:
    (1) On a special, infrequent occasion as described in paragraph (b) 
of this section; or
    (2) On an occasional basis, for items such as food and refreshments 
to be shared in the office among several employees.
    An employee may accept such gifts to which a subordinate or other 
employee receiving less pay than himself has contributed.

    Example 1: To mark the occasion of his retirement, members of the 
immediate staff of the Under Secretary of the Army would like to give 
him a party and provide him with a gift certificate. They may distribute 
an announcement of the party and include a nominal amount for a 
retirement gift in the fee for the party.
    Example 2: The General Counsel of the National Endowment for the 
Arts may not collect contributions for a Christmas gift for the 
Chairman. Christmas occurs annually and is not an occasion of personal 
significance.
    Example 3: Subordinates may not take up a collection for a gift to 
an official superior on the occasion of the superior's swearing in or 
promotion to a higher grade position within the supervisory chain of 
that organization. These are not events that mark the termination of the 
subordinate-official superior relationship, nor are they events of 
personal significance within the meaning of Sec. 2635.304(b). However, 
subordinates may take up a collection and employees may contribute $3 
each to buy refreshments to be consumed by everyone in the immediate 
office to mark either such occasion.
    Example 4: Subordinates may each contribute a nominal amount to a 
fund to give a gift to an official superior upon the occasion of that 
superior's transfer or promotion to a position outside the organization.
    Example 5: An Assistant Secretary at the Department of the Interior 
is getting married. His secretary has decided that a microwave oven 
would be a nice gift from his staff and has informed each of the 
Assistant Secretary's subordinates that they should contribute $5 for 
the gift. Her method of collection is improper. Although she may 
recommend a $5 contribution, the recommendation must be coupled with a 
statement that the employee whose contribution is solicited is free to 
contribute less or nothing at all.



                Subpart D_Conflicting Financial Interests



Sec. 2635.401  Overview.

    This subpart contains two provisions relating to financial 
interests. One is a disqualification requirement and the other is a 
prohibition on acquiring or

[[Page 564]]

continuing to hold specific financial interests. An employee may acquire 
or hold any financial interest not prohibited by Sec. 2635.403. 
Notwithstanding that his acquisition or holding of a particular interest 
is proper, an employee is prohibited in accordance with Sec. 2635.402 
of this subpart from participating in an official capacity in any 
particular matter in which, to his knowledge, he or any person whose 
interests are imputed to him has a financial interest, if the particular 
matter will have a direct and predictable effect on that interest. See 
also part 2640 of this chapter, for additional guidance amplifying Sec. 
2635.402.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48747, Sept. 17, 1997]



Sec. 2635.402  Disqualifying financial interests.

    (a) Statutory prohibition. An employee is prohibited by criminal 
statute, 18 U.S.C. 208(a), from participating personally and 
substantially in an official capacity in any particular matter in which, 
to his knowledge, he or any person whose interests are imputed to him 
under this statute has a financial interest, if the particular matter 
will have a direct and predictable effect on that interest.
    Note: Standards applicable when seeking non-Federal employment are 
contained in subpart F of this part and, if followed, will ensure that 
an employee does not violate 18 U.S.C. 208(a) or this section when he is 
negotiating for or has an arrangement concerning future employment. In 
all other cases where the employee's participation would violate 18 
U.S.C. 208(a), an employee shall disqualify himself from participation 
in the matter in accordance with paragraph (c) of this section or obtain 
a waiver or determine that an exemption applies, as described in 
paragraph (d) of this section.
    (b) Definitions. For purposes of this section, the following 
definitions shall apply:
    (1) Direct and predictable effect. (i) A particular matter will have 
a direct effect on a financial interest if there is a close causal link 
between any decision or action to be taken in the matter and any 
expected effect of the matter on the financial interest. An effect may 
be direct even though it does not occur immediately. A particular matter 
will not have a direct effect on a financial interest, however, if the 
chain of causation is attenuated or is contingent upon the occurrence of 
events that are speculative or that are independent of, and unrelated 
to, the matter. A particular matter that has an effect on a financial 
interest only as a consequence of its effects on the general economy 
does not have a direct effect within the meaning of this subpart.
    (ii) A particular matter will have a predictable effect if there is 
a real, as opposed to a speculative possibility that the matter will 
affect the financial interest. It is not necessary, however, that the 
magnitude of the gain or loss be known, and the dollar amount of the 
gain or loss is immaterial.

    Note: If a particular matter involves a specific party or parties, 
generally the matter will at most only have a direct and predictable 
effect, for purposes of this subpart, on a financial interest of the 
employee in or with a party, such as the employee's interest by virtue 
of owning stock. There may, however, be some situations in which, under 
the above standards, a particular matter will have a direct and 
predictable effect on an employee's financial interests in or with a 
nonparty. For example, if a party is a corporation, a particular matter 
may also have a direct and predictable effect on an employee's financial 
interests through ownership of stock in an affiliate, parent, or 
subsidiary of that party. Similarly, the disposition of a protest 
against the award of a contract to a particular company may also have a 
direct and predictable effect on an employee's financial interest in 
another company listed as a subcontractor in the proposal of one of the 
competing offerors.

    Example 1: An employee of the National Library of Medicine at the 
National Institutes of Health has just been asked to serve on the 
technical evaluation panel to review proposals for a new library 
computer search system. DEF Computer Corporation, a closely held company 
in which he and his wife own a majority of the stock, has submitted a 
proposal. Because award of the systems contract to DEF or to any other 
offeror will have a direct and predictable effect on both his and his 
wife's financial interests, the employee cannot participate on the 
technical evaluation team unless his disqualification has been waived.
    Example 2: Upon assignment to the technical evaluation panel, the 
employee in the preceding example finds that DEF Computer Corporation 
has not submitted a proposal. Rather, LMN Corp., with which DEF competes 
for private sector business, is one of

[[Page 565]]

the six offerors. The employee is not disqualified from serving on the 
technical evaluation panel. Any effect on the employee's financial 
interests as a result of the agency's decision to award or not award the 
systems contract to LMN would be at most indirect and speculative.

    (2) Imputed interests. For purposes of 18 U.S.C. 208(a) and this 
subpart, the financial interests of the following persons will serve to 
disqualify an employee to the same extent as if they were the employee's 
own interests:
    (i) The employee's spouse;
    (ii) The employee's minor child;
    (iii) The employee's general partner;
    (iv) An organization or entity which the employee serves as officer, 
director, trustee, general partner or employee; and
    (v) A person with whom the employee is negotiating for or has an 
arrangement concerning prospective employment. (Employees who are 
seeking other employment should refer to and comply with the standards 
in subpart F of this part).

    Example 1: An employee of the Department of Education serves without 
compensation on the board of directors of Kinder World, Inc., a 
nonprofit corporation that engages in good works. Even though her 
personal financial interests will not be affected, the employee must 
disqualify herself from participating in the review of a grant 
application submitted by Kinder World. Award or denial of the grant will 
affect the financial interests of Kinder World and its financial 
interests are imputed to her as a member of its board of directors.
    Example 2: The spouse of an employee of the Food and Drug 
Administration has obtained a position with a well established 
biomedical research company. The company has developed an artificial 
limb for which it is seeking FDA approval and the employee would 
ordinarily be asked to participate in the FDA's review and approval 
process. The spouse is a salaried employee of the company and has no 
direct ownership interest in the company. Nor does she have an indirect 
ownership interest, as would be the case, for example, if she were 
participating in a pension plan that held stock in the company. Her 
position with the company is such that the granting or withholding of 
FDA approval will not have a direct and predictable effect on her salary 
or on her continued employment with the company. Since the FDA approval 
process will not affect his spouse's financial interests, the employee 
is not disqualified under Sec. 2635.402 from participating in that 
process. Nevertheless, the financial interests of the spouse's employer 
may be disqualifying under the impartiality principle, as implemented at 
Sec. 2635.502.

    (3) Particular matter. The term particular matter encompasses only 
matters that involve deliberation, decision, or action that is focused 
upon the interests of specific persons, or a discrete and identifiable 
class of persons. Such a matter is covered by this subpart even if it 
does not involve formal parties and may include governmental action such 
as legislation or policy-making that is narrowly focused on the 
interests of such a discrete and identifiable class of persons. The term 
particular matter, however, does not extend to the consideration or 
adoption of broad policy options that are directed to the interests of a 
large and diverse group of persons. The particular matters covered by 
this subpart include a judicial or other proceeding, application, 
request for a ruling or other determination, contract, claim, 
controversy, charge, accusation or arrest.

    Example 1: The Internal Revenue Service's amendment of its 
regulations to change the manner in which depreciation is calculated is 
not a particular matter, nor is the Social Security Administration's 
consideration of changes to its appeal procedures for disability 
claimants.
    Example 2: Consideration by the Interstate Commerce Commission of 
regulations establishing safety standards for trucks on interstate 
highways involves a particular matter.

    (4) Personal and substantial. To participate personally means to 
participate directly. It includes the direct and active supervision of 
the participation of a subordinate in the matter. To participate 
substantially means that the employee's involvement is of significance 
to the matter. Participation may be substantial even though it is not 
determinative of the outcome of a particular matter. However, it 
requires more than official responsibility, knowledge, perfunctory 
involvement, or involvement on an administrative or peripheral issue. A 
finding of substantiality should be based not only on the effort devoted 
to a matter, but also on the importance of the effort. While a series of 
peripheral involvements may be insubstantial, the single act of 
approving or participating in a critical

[[Page 566]]

step may be substantial. Personal and substantial participation may 
occur when, for example, an employee participates through decision, 
approval, disapproval, recommendation, investigation or the rendering of 
advice in a particular matter.
    (c) Disqualification. Unless the employee is authorized to 
participate in the particular matter by virtue of a waiver or exemption 
described in paragraph (d) of this section or because the interest has 
been divested in accordance with paragraph (e) of this section, an 
employee shall disqualify himself from participating in a particular 
matter in which, to his knowledge, he or a person whose interests are 
imputed to him has a financial interest, if the particular matter will 
have a direct and predictable effect on that interest. Disqualification 
is accomplished by not participating in the particular matter.
    (1) Notification. An employee who becomes aware of the need to 
disqualify himself from participation in a particular matter to which he 
has been assigned should notify the person responsible for his 
assignment. An employee who is responsible for his own assignment should 
take whatever steps are necessary to ensure that he does not participate 
in the matter from which he is disqualified. Appropriate oral or written 
notification of the employee's disqualification may be made to coworkers 
by the employee or a supervisor to ensure that the employee is not 
involved in a matter from which he is disqualified.
    (2) Documentation. An employee need not file a written 
disqualification statement unless he is required by part 2634 of this 
chapter to file written evidence of compliance with an ethics agreement 
with the Office of Government Ethics or is asked by an agency ethics 
official or the person responsible for his assignment to file a written 
disqualification statement. However, an employee may elect to create a 
record of his actions by providing written notice to a supervisor or 
other appropriate official.

    Example 1: An Assistant Secretary of the Department of the Interior 
owns recreational property that borders on land which is being 
considered for annexation to a national park. Annexation would directly 
and predictably increase the value of her vacation property and, thus, 
she is disqualified from participating in any way in the Department's 
deliberations or decisions regarding the annexation. Because she is 
responsible for determining which matters she will work on, she may 
accomplish her disqualification merely by ensuring that she does not 
participate in the matter. Because of the level of her position, 
however, the Assistant Secretary might be wise to establish a record 
that she has acted properly by providing a written disqualification 
statement to an official superior and by providing written notification 
of the disqualification to subordinates to ensure that they do not raise 
or discuss with her any issues related to the annexation.

    (d) Waiver of or exemptions from disqualification. An employee who 
would otherwise be disqualified by 18 U.S.C. 208(a) may be permitted to 
participate in a particular matter where the otherwise disqualifying 
financial interest is the subject of a regulatory exemption or 
individual waiver described in this paragraph, or results from certain 
Indian birthrights as described in 18 U.S.C. 208(b)(4).
    (1) Regulatory exemptions. Under 18 U.S.C. 208(b)(2), regulatory 
exemptions of general applicability have been issued by the Office of 
Government Ethics, based on its determination that particular interests 
are too remote or too inconsequential to affect the integrity of the 
services of employees to whom those exemptions apply. See the 
regulations in subpart B of part 2640 of this chapter, which supersede 
any preexisting agency regulatory exemptions.
    (2) Individual waivers. An individual waiver enabling the employee 
to participate in one or more particular matters may be issued under 18 
U.S.C. 208(b)(1) if, in advance of the employee's participation:
    (i) The employee:
    (A) Advises the Government official responsible for the employee's 
appointment (or other Government official to whom authority to issue 
such a waiver for the employee has been delegated) about the nature and 
circumstances of the particular matter or matters; and
    (B) Makes full disclosure to such official of the nature and extent 
of the disqualifying financial interest; and

[[Page 567]]

    (ii) Such official determines, in writing, that the employee's 
financial interest in the particular matter or matters is not so 
substantial as to be deemed likely to affect the integrity of the 
services which the Government may expect from such employee. See also 
subpart C of part 2640 of this chapter, for additional guidance.
    (3) Federal advisory committee member waivers. An individual waiver 
may be issued under 18 U.S.C. 208(b)(3) to a special Government employee 
serving on, or under consideration for appointment to, an advisory 
committee within the meaning of the Federal Advisory Committee Act if 
the Government official responsible for the employee's appointment (or 
other Government official to whom authority to issue such a waiver for 
the employee has been delegated):
    (i) Reviews the financial disclosure report filed by the special 
Government employee pursuant to the Ethics in Government Act of 1978; 
and
    (ii) Certifies in writing that the need for the individual's 
services outweighs the potential for a conflict of interest created by 
the otherwise disqualifying financial interest. See also subpart C of 
part 2640 of this chapter, for additional guidance.
    (4) Consultation and notification regarding waivers. When 
practicable, an official is required to consult formally or informally 
with the Office of Government Ethics prior to granting a waiver referred 
to in paragraph (d)(2) or (3) of this section. A copy of each such 
waiver is to be forwarded to the Director of the Office of Government 
Ethics.
    (e) Divestiture of a disqualifying financial interest. Upon sale or 
other divestiture of the asset or other interest that causes his 
disqualification from participation in a particular matter, 18 U.S.C. 
208(a) and paragraph (c) of this section will no longer prohibit the 
employee's participation in the matter.
    (1) Voluntary divestiture. An employee who would otherwise be 
disqualified from participation in a particular matter may voluntarily 
sell or otherwise divest himself of the interest that causes the 
disqualification.
    (2) Directed divestiture. An employee may be required to sell or 
otherwise divest himself of the disqualifying financial interest if his 
continued holding of that interest is prohibited by statute or by agency 
supplemental regulation issued in accordance with Sec. 2635.403(a), or 
if the agency determines in accordance with Sec. 2635.403(b) that a 
substantial conflict exists between the financial interest and the 
employee's duties or accomplishment of the agency's mission.
    (3) Eligibility for special tax treatment. An employee who is 
directed to divest an interest may be eligible to defer the tax 
consequences of divestiture under subpart J of part 2634 of this 
chapter. An employee who divests before obtaining a certificate of 
divestiture will not be eligible for this special tax treatment.
    (f) Official duties that give rise to potential conflicts. Where an 
employee's official duties create a substantial likelihood that the 
employee may be assigned to a particular matter from which he is 
disqualified, the employee should advise his supervisor or other person 
responsible for his assignments of that potential so that conflicting 
assignments can be avoided, consistent with the agency's needs.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48747, Sept. 17, 1997]



Sec. 2635.403  Prohibited financial interests.

    An employee shall not acquire or hold any financial interest that he 
is prohibited from acquiring or holding by statute, by agency regulation 
issued in accordance with paragraph (a) of this section or by reason of 
an agency determination of substantial conflict under paragraph (b) of 
this section.

    Note: There is no statute of Governmentwide applicability 
prohibiting employees from holding or acquiring any financial interest. 
Statutory restrictions, if any, are contained in agency statutes which, 
in some cases, may be implemented by agency regulations issued 
independent of this part.

    (a) Agency regulation prohibiting certain financial interests. An 
agency may, by supplemental agency regulation issued after February 3, 
1993, prohibit or restrict the acquisition or holding of a financial 
interest or a class of financial interests by agency employees, or any 
category of agency employees, and the spouses and minor children of 
those

[[Page 568]]

employees, based on the agency's determination that the acquisition or 
holding of such financial interests would cause a reasonable person to 
question the impartiality and objectivity with which agency programs are 
administered. Where the agency restricts or prohibits the holding of 
certain financial interests by its employees' spouses or minor children, 
any such prohibition or restriction shall be based on a determination 
that there is a direct and appropriate nexus between the prohibition or 
restriction as applied to spouses and minor children and the efficiency 
of the service.
    (b) Agency determination of substantial conflict. An agency may 
prohibit or restrict an individual employee from acquiring or holding a 
financial interest or a class of financial interests based upon the 
agency designee's determination that the holding of such interest or 
interests will:
    (1) Require the employee's disqualification from matters so central 
or critical to the performance of his official duties that the 
employee's ability to perform the duties of his position would be 
materially impaired; or
    (2) Adversely affect the efficient accomplishment of the agency's 
mission because another employee cannot be readily assigned to perform 
work from which the employee would be disqualified by reason of the 
financial interest.

    Example 1: An Air Force employee who owns stock in a major aircraft 
engine manufacturer is being considered for promotion to a position that 
involves responsibility for development of a new fighter airplane. If 
the agency determined that engineering and other decisions about the Air 
Force's requirements for the fighter would directly and predictably 
affect his financial interests, the employee could not, by virtue of 18 
U.S.C. 208(a), perform these significant duties of the position while 
retaining his stock in the company. The agency can require the employee 
to sell his stock as a condition of being selected for the position 
rather than allowing him to disqualify himself in particular matters.

    (c) Definition of financial interest. For purposes of this section:
    (1) Except as provided in paragraph (c)(2) of this section, the term 
financial interest is limited to financial interests that are owned by 
the employee or by the employee's spouse or minor children. However, the 
term is not limited to only those financial interests that would be 
disqualifying under 18 U.S.C. 208(a) and Sec. 2635.402. The term 
includes any current or contingent ownership, equity, or security 
interest in real or personal property or a business and may include an 
indebtedness or compensated employment relationship. It thus includes, 
for example, interests in the nature of stocks, bonds, partnership 
interests, fee and leasehold interests, mineral and other property 
rights, deeds of trust, and liens, and extends to any right to purchase 
or acquire any such interest, such as a stock option or commodity 
future. It does not include a future interest created by someone other 
than the employee, his spouse, or dependent child or any right as a 
beneficiary of an estate that has not been settled.

    Example 1: A regulatory agency has concluded that ownership by its 
employees of stock in entities regulated by the agency would 
significantly diminish public confidence in the agency's performance of 
its regulatory functions and thereby interfere with the accomplishment 
of its mission. In its supplemental agency regulations, the agency may 
prohibit its employees from acquiring or continuing to hold stock in 
regulated entities.
    Example 2: An agency that insures bank deposits may, by supplemental 
agency regulation, prohibit its employees who are bank examiners from 
obtaining loans from banks they examine. Examination of a member bank 
could have no effect on an employee's fixed obligation to repay a loan 
from that bank and, thus, would not affect an employee's financial 
interests so as to require disqualification under Sec. 2635.402. 
Nevertheless, a loan from a member bank is a discrete financial interest 
within the meaning of Sec. 2635.403(c) that may, when appropriate, be 
prohibited by supplemental agency regulation.

    (2) The term financial interest includes service, with or without 
compensation, as an officer, director, trustee, general partner or 
employee of any person, including a nonprofit entity, whose financial 
interests are imputed to the employee under Sec. 2635.402(b)(2) (iii) 
or (iv).

    Example 1. The Foundation for the Preservation of Wild Horses 
maintains herds of horses that graze on public and private lands. 
Because its costs are affected by Federal policies regarding grazing 
permits, the

[[Page 569]]

Foundation routinely comments on all proposed rules governing use of 
Federal grasslands issued by the Bureau of Land Management. BLM may 
require an employee to resign his uncompensated position as Vice 
President of the Foundation as a condition of his promotion to a policy-
level position within the Bureau rather than allowing him to rely on 
disqualification in particular cases.

    (d) Reasonable period to divest or terminate. Whenever an agency 
directs divestiture of a financial interest under paragraph (a) or (b) 
of this section, the employee shall be given a reasonable period of 
time, considering the nature of his particular duties and the nature and 
marketability of the interest, within which to comply with the agency's 
direction. Except in cases of unusual hardship, as determined by the 
agency, a reasonable period shall not exceed 90 days from the date 
divestiture is first directed. However, as long as the employee 
continues to hold the financial interest, he remains subject to any 
restrictions imposed by this subpart.
    (e) Eligibility for special tax treatment. An employee required to 
sell or otherwise divest a financial interest may be eligible to defer 
the tax consequences of divestiture under subpart J of part 2634 of this 
chapter.

[57 FR 35042, Aug. 7, 1992, as amended at 59 FR 4780, Feb. 2, 1994; 60 
FR 6391, Feb. 2, 1995; 60 FR 66858, Dec. 27, 1995; 61 FR 40951, Aug. 7, 
1996; 62 FR 48748, Sept. 17, 1996]



          Subpart E_Impartiality in Performing Official Duties



Sec. 2635.501  Overview.

    (a) This subpart contains two provisions intended to ensure that an 
employee takes appropriate steps to avoid an appearance of loss of 
impartiality in the performance of his official duties. Under Sec. 
2635.502, unless he receives prior authorization, an employee should not 
participate in a particular matter involving specific parties which he 
knows is likely to affect the financial interests of a member of his 
household, or in which he knows a person with whom he has a covered 
relationship is or represents a party, if he determines that a 
reasonable person with knowledge of the relevant facts would question 
his impartiality in the matter. An employee who is concerned that other 
circumstances would raise a question regarding his impartiality should 
use the process described in Sec. 2635.502 to determine whether he 
should or should not participate in a particular matter.
    (b) Under Sec. 2635.503, an employee who has received an 
extraordinary severance or other payment from a former employer prior to 
entering Government service is subject, in the absence of a waiver, to a 
two-year period of disqualification from participation in particular 
matters in which that former employer is or represents a party.

    Note: Questions regarding impartiality necessarily arise when an 
employee's official duties impact upon the employee's own financial 
interests or those of certain other persons, such as the employee's 
spouse or minor child. An employee is prohibited by criminal statute, 18 
U.S.C. 208(a), from participating personally and substantially in an 
official capacity in any particular matter in which, to his knowledge, 
he, his spouse, general partner or minor child has a financial interest, 
if the particular matter will have a direct and predictable effect on 
that interest. The statutory prohibition also extends to an employee's 
participation in a particular matter in which, to his knowledge, an 
organization in which the employee is serving as officer, director, 
trustee, general partner or employee, or with whom he is negotiating or 
has an arrangement concerning prospective employment has a financial 
interest. Where the employee's participation in a particular matter 
would affect any one of these financial interests, the standards set 
forth in subparts D or F of this part apply and only a statutory waiver 
or exemption, as described in Sec. Sec. 2635.402(d) and 2635.605(a), 
will enable the employee to participate in that matter. The 
authorization procedures in Sec. 2635.502(d) may not be used to 
authorize an employee's participation in any such matter. Where the 
employee complies with all terms of the waiver, the granting of a 
statutory waiver will be deemed to constitute a determination that the 
interest of the Government in the employee's participation outweighs the 
concern that a reasonable person may question the integrity of agency 
programs and operations. Similarly, where the employee meets all 
prerequisites for the application of one of the exemptions set forth in 
subpart B of part 2640 of this chapter, that also constitutes a 
determination that the interest of the Government in the employee's 
participation outweighs the concern that a reasonable person

[[Page 570]]

may question the integrity of agency programs and operations.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997]



Sec. 2635.502  Personal and business relationships.

    (a) Consideration of appearances by the employee. Where an employee 
knows that a particular matter involving specific parties is likely to 
have a direct and predictable effect on the financial interest of a 
member of his household, or knows that a person with whom he has a 
covered relationship is or represents a party to such matter, and where 
the employee determines that the circumstances would cause a reasonable 
person with knowledge of the relevant facts to question his impartiality 
in the matter, the employee should not participate in the matter unless 
he has informed the agency designee of the appearance problem and 
received authorization from the agency designee in accordance with 
paragraph (d) of this section.
    (1) In considering whether a relationship would cause a reasonable 
person to question his impartiality, an employee may seek the assistance 
of his supervisor, an agency ethics official or the agency designee.
    (2) An employee who is concerned that circumstances other than those 
specifically described in this section would raise a question regarding 
his impartiality should use the process described in this section to 
determine whether he should or should not participate in a particular 
matter.
    (b) Definitions. For purposes of this section:
    (1) An employee has a covered relationship with:
    (i) A person, other than a prospective employer described in Sec. 
2635.603(c), with whom the employee has or seeks a business, contractual 
or other financial relationship that involves other than a routine 
consumer transaction;

    Note: An employee who is seeking employment within the meaning of 
Sec. 2635.603 shall comply with subpart F of this part rather than with 
this section.

    (ii) A person who is a member of the employee's household, or who is 
a relative with whom the employee has a close personal relationship;
    (iii) A person for whom the employee's spouse, parent or dependent 
child is, to the employee's knowledge, serving or seeking to serve as an 
officer, director, trustee, general partner, agent, attorney, 
consultant, contractor or employee;
    (iv) Any person for whom the employee has, within the last year, 
served as officer, director, trustee, general partner, agent, attorney, 
consultant, contractor or employee; or
    (v) An organization, other than a political party described in 26 
U.S.C. 527(e), in which the employee is an active participant. 
Participation is active if, for example, it involves service as an 
official of the organization or in a capacity similar to that of a 
committee or subcommittee chairperson or spokesperson, or participation 
in directing the activities of the organization. In other cases, 
significant time devoted to promoting specific programs of the 
organization, including coordination of fundraising efforts, is an 
indication of active participation. Payment of dues or the donation or 
solicitation of financial support does not, in itself, constitute active 
participation.

    Note: Nothing in this section shall be construed to suggest that an 
employee should not participate in a matter because of his political, 
religious or moral views.

    (2) Direct and predictable effect has the meaning set forth in Sec. 
2635.402(b)(1).
    (3) Particular matter involving specific parties has the meaning set 
forth in Sec. 2637.102(a)(7) of this chapter.

    Example 1: An employee of the General Services Administration has 
made an offer to purchase a restaurant owned by a local developer. The 
developer has submitted an offer in response to a GSA solicitation for 
lease of office space. Under the circumstances, she would be correct in 
concluding that a reasonable person would be likely to question her 
impartiality if she were to participate in evaluating that developer's 
or its competitor's lease proposal.
    Example 2: An employee of the Department of Labor is providing 
technical assistance in drafting occupational safety and health 
legislation that will affect all employers of five or more persons. His 
wife is employed as an administrative assistant by a large corporation 
that will incur additional costs if the proposed legislation is enacted. 
Because the

[[Page 571]]

legislation is not a particular matter involving specific parties, the 
employee may continue to work on the legislation and need not be 
concerned that his wife's employment with an affected corporation would 
raise a question concerning his impartiality.
    Example 3: An employee of the Defense Logistics Agency who has 
responsibilities for testing avionics being produced by an Air Force 
contractor has just learned that his sister-in-law has accepted 
employment as an engineer with the contractor's parent corporation. 
Where the parent corporation is a conglomerate, the employee could 
reasonably conclude that, under the circumstances, a reasonable person 
would not be likely to question his impartiality if he were to continue 
to perform his test and evaluation responsibilities.
    Example 4: An engineer has just resigned from her position as vice 
president of an electronics company in order to accept employment with 
the Federal Aviation Administration in a position involving procurement 
responsibilities. Although the employee did not receive an extraordinary 
payment in connection with her resignation and has severed all financial 
ties with the firm, under the circumstances she would be correct in 
concluding that her former service as an officer of the company would be 
likely to cause a reasonable person to question her impartiality if she 
were to participate in the administration of a DOT contract for which 
the firm is a first-tier subcontractor.
    Example 5: An employee of the Internal Revenue Service is a member 
of a private organization whose purpose is to restore a Victorian-era 
railroad station and she chairs its annual fundraising drive. Under the 
circumstances, the employee would be correct in concluding that her 
active membership in the organization would be likely to cause a 
reasonable person to question her impartiality if she were to 
participate in an IRS determination regarding the tax-exempt status of 
the organization.

    (c) Determination by agency designee. Where he has information 
concerning a potential appearance problem arising from the financial 
interest of a member of the employee's household in a particular matter 
involving specific parties, or from the role in such matter of a person 
with whom the employee has a covered relationship, the agency designee 
may make an independent determination as to whether a reasonable person 
with knowledge of the relevant facts would be likely to question the 
employee's impartiality in the matter. Ordinarily, the agency designee's 
determination will be initiated by information provided by the employee 
pursuant to paragraph (a) of this section. However, at any time, 
including after the employee has disqualified himself from participation 
in a matter pursuant to paragraph (e) of this section, the agency 
designee may make this determination on his own initiative or when 
requested by the employee's supervisor or any other person responsible 
for the employee's assignment.
    (1) If the agency designee determines that the employee's 
impartiality is likely to be questioned, he shall then determine, in 
accordance with paragraph (d) of this section, whether the employee 
should be authorized to participate in the matter. Where the agency 
designee determines that the employee's participation should not be 
authorized, the employee will be disqualified from participation in the 
matter in accordance with paragraph (e) of this section.
    (2) If the agency designee determines that the employee's 
impartiality is not likely to be questioned, he may advise the employee, 
including an employee who has reached a contrary conclusion under 
paragraph (a) of this section, that the employee's participation in the 
matter would be proper.
    (d) Authorization by agency designee. Where an employee's 
participation in a particular matter involving specific parties would 
not violate 18 U.S.C. 208(a), but would raise a question in the mind of 
a reasonable person about his impartiality, the agency designee may 
authorize the employee to participate in the matter based on a 
determination, made in light of all relevant circumstances, that the 
interest of the Government in the employee's participation outweighs the 
concern that a reasonable person may question the integrity of the 
agency's programs and operations. Factors which may be taken into 
consideration include:
    (1) The nature of the relationship involved;
    (2) The effect that resolution of the matter would have upon the 
financial interests of the person involved in the relationship;
    (3) The nature and importance of the employee's role in the matter, 
including the extent to which the employee is called upon to exercise 
discretion in the matter;

[[Page 572]]

    (4) The sensitivity of the matter;
    (5) The difficulty of reassigning the matter to another employee; 
and
    (6) Adjustments that may be made in the employee's duties that would 
reduce or eliminate the likelihood that a reasonable person would 
question the employee's impartiality.
    Authorization by the agency designee shall be documented in writing 
at the agency designee's discretion or when requested by the employee. 
An employee who has been authorized to participate in a particular 
matter involving specific parties may not thereafter disqualify himself 
from participation in the matter on the basis of an appearance problem 
involving the same circumstances that have been considered by the agency 
designee.

    Example 1: The Deputy Director of Personnel for the Department of 
the Treasury and an attorney with the Department's Office of General 
Counsel are general partners in a real estate partnership. The Deputy 
Director advises his supervisor, the Director of Personnel, of the 
relationship upon being assigned to a selection panel for a position for 
which his partner has applied. If selected, the partner would receive a 
substantial increase in salary. The agency designee cannot authorize the 
Deputy Director to participate on the panel under the authority of this 
section since the Deputy Director is prohibited by criminal statute, 18 
U.S.C. 208(a), from participating in a particular matter affecting the 
financial interest of a person who is his general partner. See Sec. 
2635.402.
    Example 2: A new employee of the Securities and Exchange Commission 
is assigned to an investigation of insider trading by the brokerage 
house where she had recently been employed. Because of the sensitivity 
of the investigation, the agency designee may be unable to conclude that 
the Government's interest in the employee's participation in the 
investigation outweighs the concern that a reasonable person may 
question the integrity of the investigation, even though the employee 
has severed all financial ties with the company. Based on consideration 
of all relevant circumstances, the agency designee might determine, 
however, that it is in the interest of the Government for the employee 
to pass on a routine filing by the particular brokerage house.
    Example 3: An Internal Revenue Service employee involved in a long 
and complex tax audit is advised by her son that he has just accepted an 
entry-level management position with a corporation whose taxes are the 
subject of the audit. Because the audit is essentially complete and 
because the employee is the only one with an intimate knowledge of the 
case, the agency designee might determine, after considering all 
relevant circumstances, that it is in the Government's interest for the 
employee to complete the audit, which is subject to additional levels of 
review.

    (e) Disqualification. Unless the employee is authorized to 
participate in the matter under paragraph (d) of this section, an 
employee shall not participate in a particular matter involving specific 
parties when he or the agency designee has concluded, in accordance with 
paragraph (a) or (c) of this section, that the financial interest of a 
member of the employee's household, or the role of a person with whom he 
has a covered relationship, is likely to raise a question in the mind of 
a reasonable person about his impartiality. Disqualification is 
accomplished by not participating in the matter.
    (1) Notification. An employee who becomes aware of the need to 
disqualify himself from participation in a particular matter involving 
specific parties to which he has been assigned should notify the person 
responsible for his assignment. An employee who is responsible for his 
own assignment should take whatever steps are necessary to ensure that 
he does not participate in the matter from which he is disqualified. 
Appropriate oral or written notification of the employee's 
disqualification may be made to coworkers by the employee or a 
supervisor to ensure that the employee is not involved in a particular 
matter involving specific parties from which he is disqualified.
    (2) Documentation. An employee need not file a written 
disqualification statement unless he is required by part 2634 of this 
chapter to file written evidence of compliance with an ethics agreement 
with the Office of Government Ethics or is specifically asked by an 
agency ethics official or the person responsible for his assignment to 
file a written disqualification statement. However, an employee may 
elect to create a record of his actions by providing written notice to a 
supervisor or other appropriate official.
    (f) Relevant considerations. An employee's reputation for honesty 
and integrity is not a relevant consideration

[[Page 573]]

for purposes of any determination required by this section.



Sec. 2635.503  Extraordinary payments from former employers.

    (a) Disqualification requirement. Except as provided in paragraph 
(c) of this section, an employee shall be disqualified for two years 
from participating in any particular matter in which a former employer 
is a party or represents a party if he received an extraordinary payment 
from that person prior to entering Government service. The two-year 
period of disqualification begins to run on the date that the 
extraordinary payment is received.

    Example 1: Following his confirmation hearings and one month before 
his scheduled swearing in, a nominee to the position of Assistant 
Secretary of a department received an extraordinary payment from his 
employer. For one year and 11 months after his swearing in, the 
Assistant Secretary may not participate in any particular matter to 
which his former employer is a party.
    Example 2: An employee received an extraordinary payment from her 
former employer, a coal mine operator, prior to entering on duty with 
the Department of the Interior. For two years thereafter, she may not 
participate in a determination regarding her former employer's 
obligation to reclaim a particular mining site, because her former 
employer is a party to the matter. However, she may help to draft 
reclamation legislation affecting all coal mining operations because 
this legislation does not involve any parties.

    (b) Definitions. For purposes of this section, the following 
definitions shall apply:
    (1) Extraordinary payment means any item, including cash or an 
investment interest, with a value in excess of $10,000, which is paid:
    (i) On the basis of a determination made after it became known to 
the former employer that the individual was being considered for or had 
accepted a Government position; and
    (ii) Other than pursuant to the former employer's established 
compensation, partnership, or benefits program. A compensation, 
partnership, or benefits program will be deemed an established program 
if it is contained in bylaws, a contract or other written form, or if 
there is a history of similar payments made to others not entering into 
Federal service.

    Example 1: The vice president of a small corporation is nominated to 
be an ambassador. In recognition of his service to the corporation, the 
board of directors votes to pay him $50,000 upon his confirmation in 
addition to the regular severance payment provided for by the corporate 
bylaws. The regular severance payment is not an extraordinary payment. 
The gratuitous payment of $50,000 is an extraordinary payment, since the 
corporation had not made similar payments to other departing officers.

    (2) Former employer includes any person which the employee served as 
an officer, director, trustee, general partner, agent, attorney, 
consultant, contractor or employee.
    (c) Waiver of disqualification. The disqualification requirement of 
this section may be waived based on a finding that the amount of the 
payment was not so substantial as to cause a reasonable person to 
question the employee's ability to act impartially in a matter in which 
the former employer is or represents a party. The waiver shall be in 
writing and may be given only by the head of the agency or, where the 
recipient of the payment is the head of the agency, by the President or 
his designee. Waiver authority may be delegated by agency heads to any 
person who has been delegated authority to issue individual waivers 
under 18 U.S.C. 208(b) for the employee who is the recipient of the 
extraordinary payment.



                   Subpart F_Seeking Other Employment



Sec. 2635.601  Overview.

    This subpart contains a disqualification requirement that applies to 
employees when seeking employment with persons whose financial interests 
would be directly and predictably affected by particular matters in 
which the employees participate personally and substantially. 
Specifically, it addresses the requirement of 18 U.S.C. 208(a) that an 
employee disqualify himself from participation in any particular matter 
that will have a direct and predictable effect on the financial 
interests of a person ``with whom he is negotiating or has any 
arrangement concerning prospective employment.'' See Sec. 2635.402 and 
Sec. 2640.103 of this chapter. Beyond

[[Page 574]]

this statutory requirement, it also addresses the issues of lack of 
impartiality that require disqualification from particular matters 
affecting the financial interests of a prospective employer when an 
employee's actions in seeking employment fall short of actual employment 
negotiations.

[57 FR 35042, Aug. 7, 1992, as amended at 64 FR 13064, Mar. 17, 1999]



Sec. 2635.602  Applicability and related considerations.

    To ensure that he does not violate 18 U.S.C. 208(a) or the 
principles of ethical conduct contained in Sec. 2635.101(b), an 
employee who is seeking employment or who has an arrangement concerning 
prospective employment shall comply with the applicable disqualification 
requirements of Sec. Sec. 2635.604 and 2635.606 if particular matters 
in which the employee will be participating personally and substantially 
would directly and predictably affect the financial interests of a 
prospective employer or of a person with whom he has an arrangement 
concerning prospective employment. Compliance with this subpart also 
will ensure that the employee does not violate subpart D or E of this 
part.

    Note: An employee who is seeking employment with a person whose 
financial interests are not affected directly and predictably by 
particular matters in which he participates personally and substantially 
has no obligation under this subpart. An employee may, however, be 
subject to other statutes which impose requirements on employment 
contacts or discussions, such as 41 U.S.C. 423(c), applicable to agency 
officials involved in certain procurement matters.

    (a) Related employment restrictions--(1) Outside employment while a 
Federal employee. An employee who is contemplating outside employment to 
be undertaken concurrently with his Federal employment must abide by any 
limitations applicable to his outside activities under subparts G and H 
of this part. He must also comply with any disqualification requirement 
that may be applicable under subpart D or E of this part as a result of 
his outside employment activities.
    (2) Post-employment restrictions. An employee who is contemplating 
employment to be undertaken following the termination of his Federal 
employment should consult an agency ethics official to obtain advice 
regarding any post-employment restrictions that may be applicable. 
Regulations implementing the Governmentwide post-employment statute, 18 
U.S.C. 207, are contained in parts 2637 and 2641 of this chapter. 
Employees are cautioned that they may be subject to additional statutory 
prohibitions on post-employment acceptance of compensation from 
contractors, such as 41 U.S.C. 423(d).
    (b) Interview trips and entertainment. Where a prospective employer 
who is a prohibited source as defined in Sec. 2635.203(d) offers to 
reimburse an employee's travel expenses, or provide other reasonable 
amenities incident to employment discussions, the employee may accept 
such amenities in accordance with Sec. 2635.204(e)(3).

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997; 
64 FR 13064, Mar. 17, 1999]



Sec. 2635.603  Definitions.

    For purposes of this subpart:
    (a) Employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee, whether to be undertaken at the same time as or subsequent to 
Federal employment. It includes but is not limited to personal services 
as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner or trustee.

    Example 1: An employee of the Bureau of Indian Affairs who has 
announced her intention to retire is approached by tribal 
representatives concerning a possible consulting contract with the 
tribe. The independent contractual relationship the tribe wishes to 
negotiate is employment for purposes of this subpart.
    Example 2: An employee of the Department of Health and Human 
Services is invited to a meeting with officials of a nonprofit 
corporation to discuss the possibility of his serving as a member of the 
corporation's board of directors. Service, with or without compensation, 
as a member of the board of directors constitutes employment for 
purposes of this subpart.

    (b) An employee is seeking employment once he has begun seeking 
employment within the meaning of paragraph (b)(1) of this section and 
until he

[[Page 575]]

is no longer seeking employment within the meaning of paragraph (b)(2) 
of this section.
    (1) An employee has begun seeking employment if he has directly or 
indirectly:
    (i) Engaged in negotiations for employment with any person. For 
these purposes, as for 18 U.S.C. 208(a), the term negotiations means 
discussion or communication with another person, or such person's agent 
or intermediary, mutually conducted with a view toward reaching an 
agreement regarding possible employment with that person. The term is 
not limited to discussions of specific terms and conditions of 
employment in a specific position;
    (ii) Made an unsolicited communication to any person, or such 
person's agent or intermediary, regarding possible employment with that 
person. However, the employee has not begun seeking employment if that 
communication was:
    (A) For the sole purpose of requesting a job application; or
    (B) For the purpose of submitting a resume or other employment 
proposal to a person affected by the performance or nonperformance of 
the employee's duties only as part of an industry or other discrete 
class. The employee will be considered to have begun seeking employment 
upon receipt of any response indicating an interest in employment 
discussions; or
    (iii) Made a response other than rejection to an unsolicited 
communication from any person, or such person's agent or intermediary, 
regarding possible employment with that person.
    (2) An employee is no longer seeking employment when:
    (i) The employee or the prospective employer rejects the possibility 
of employment and all discussions of possible employment have 
terminated; or
    (ii) Two months have transpired after the employee's dispatch of an 
unsolicited resume or employment proposal, provided the employee has 
received no indication of interest in employment discussions from the 
prospective employer.
    (3) For purposes of this definition, a response that defers 
discussions until the foreseeable future does not constitute rejection 
of an unsolicited employment overture, proposal, or resume nor rejection 
of a prospective employment possibility.

    Example 1: An employee of the Health Care Financing Administration 
is complimented on her work by an official of a State Health Department 
who asks her to call if she is ever interested in leaving Federal 
service. The employee explains to the State official that she is very 
happy with her job at HCFA and is not interested in another job. She 
thanks him for his compliment regarding her work and adds that she'll 
remember his interest if she ever decides to leave the Government. The 
employee has rejected the unsolicited employment overture and has not 
begun seeking employment.
    Example 2: The employee in the preceding example responds by stating 
that she cannot discuss future employment while she is working on a 
project affecting the State's health care funding but would like to 
discuss employment with the State when the project is completed. Because 
the employee has merely deferred employment discussions until the 
foreseeable future, she has begun seeking employment with the State 
Health Department.
    Example 3: An employee of the Defense Contract Audit Agency is 
auditing the overhead accounts of an Army contractor. While at the 
contractor's headquarters, the head of the contractor's accounting 
division tells the employee that his division is thinking about hiring 
another accountant and asks whether the employee might be interested in 
leaving DCAA. The DCAA employee says he is interested in knowing what 
kind of work would be involved. They discuss the duties of the position 
the accounting division would like to fill and the DCAA employee's 
qualifications for the position. They do not discuss salary. The head of 
the division explains that he has not yet received authorization to fill 
the particular position and will get back to the employee when he 
obtains the necessary approval for additional staffing. The employee and 
the contractor's official have engaged in negotiations regarding 
possible employment. The employee has begun seeking employment with the 
Army contractor.
    Example 4: An employee of the Occupational Safety and Health 
Administration helping to draft safety standards applicable to the 
textile industry has mailed his resume to 25 textile manufacturers. He 
has not begun seeking employment with any of the twenty-five. If he 
receives a response from one of the resume recipients indicating an 
interest in employment discussions, the employee will have begun seeking 
employment with the respondent at that time.
    Example 5: A special Government employee of the Federal Deposit 
Insurance Corporation is serving on an advisory committee formed for the 
purpose of reviewing rules applicable

[[Page 576]]

to all member banks. She mails an unsolicited letter to a member bank 
offering her services as a contract consultant. She has not begun 
seeking employment with the bank until she receives some response 
indicating an interest in discussing her employment proposal. A letter 
merely acknowledging receipt of the proposal is not an indication of 
interest in employment discussions.
    Example 6: A geologist employed by the U.S. Geological Survey has 
been working as a member of a team preparing the Government's case in an 
action brought by the Government against six oil companies. The 
geologist sends her resume to an oil company that is a named defendant 
in the action. The geologist has begun seeking employment with that oil 
company and will be seeking employment for two months from the date the 
resume was mailed. However, if she withdraws her application or is 
notified within the two-month period that her resume has been rejected, 
she will no longer be seeking employment with the oil company as of the 
date she makes such withdrawal or receives such notification.

    (c) Prospective employer means any person with whom the employee is 
seeking employment. Where contacts that constitute seeking employment 
are made by or with an agent or other intermediary, the term prospective 
employer includes:
    (1) A person who uses that agent or other intermediary for the 
purpose of seeking to establish an employment relationship with the 
employee if the agent identifies the prospective employer to the 
employee; and
    (2) A person contacted by the employee's agent or other intermediary 
for the purpose of seeking to establish an employment relationship if 
the agent identifies the prospective employer to the employee.

    Example 1: An employee of the Federal Aviation Administration has 
overall responsibility for airport safety inspections in a three-state 
area. She has retained an employment search firm to help her find 
another job. The search firm has just reported to the FAA employee that 
it has given her resume to and had promising discussions with two 
airport authorities within her jurisdiction. Even though the employee 
has not personally had employment discussions with either, each airport 
authority is her prospective employer. She began seeking employment with 
each upon learning its identity and that it has been given her resume.

    (d) Direct and predictable effect, particular matter, and personal 
and substantial have the respective meanings set forth in Sec. 
2635.402(b)(1), (3), and (4).

[57 FR 35042, Aug. 7, 1992, as amended at 64 FR 13064, Mar. 17, 1999]



Sec. 2635.604  Disqualification while seeking employment.

    (a) Obligation to disqualify. Unless the employee's participation is 
authorized in accordance with Sec. 2635.605, the employee shall not 
participate personally and substantially in a particular matter that, to 
his knowledge, has a direct and predictable effect on the financial 
interests of a prospective employer with whom he is seeking employment 
within the meaning of Sec. 2635.603(b). Disqualification is 
accomplished by not participating in the particular matter.
    (b) Notification. An employee who becomes aware of the need to 
disqualify himself from participation in a particular matter to which he 
has been assigned should notify the person responsible for his 
assignment. An employee who is responsible for his own assignment should 
take whatever steps are necessary to ensure that he does not participate 
in the matter from which he is disqualified. Appropriate oral or written 
notification of the employee's disqualification may be made to coworkers 
by the employee or a supervisor to ensure that the employee is not 
involved in a matter from which he is disqualified.
    (c) Documentation. An employee need not file a written 
disqualification statement unless he is required by part 2634 of this 
chapter to file written evidence of compliance with an ethics agreement 
with the Office of Government Ethics or is specifically asked by an 
agency ethics official or the person responsible for his assignment to 
file a written disqualification statement. However, an employee may 
elect to create a record of his actions by providing written notice to a 
supervisor or other appropriate official.

    Example 1: An employee of the Department of Veterans Affairs is 
participating in the audit of a contract for laboratory support 
services. Before sending his resume to a lab which is a subcontractor 
under the VA contract, the employee should disqualify himself from 
participation in the audit. Since he

[[Page 577]]

cannot withdraw from participation in the contract audit without the 
approval of his supervisor, he should disclose his intentions to his 
supervisor in order that appropriate adjustments in his work assignments 
can be made.
    Example 2: An employee of the Food and Drug Administration is 
contacted in writing by a pharmaceutical company concerning possible 
employment with the company. The employee is involved in testing a drug 
for which the company is seeking FDA approval. Before making a response 
that is not a rejection, the employee should disqualify himself from 
further participation in the testing. Where he has authority to ask his 
colleague to assume his testing responsibilities, he may accomplish his 
disqualification by transferring the work to that coworker. However, to 
ensure that his colleague and others with whom he had been working on 
the recommendations do not seek his advice regarding testing or 
otherwise involve him in the matter, it may be necessary for him to 
advise those individuals of his disqualification.
    Example 3: The General Counsel of a regulatory agency wishes to 
engage in discussions regarding possible employment as corporate counsel 
of a regulated entity. Matters directly affecting the financial 
interests of the regulated entity are pending within the Office of 
General Counsel, but the General Counsel will not be called upon to act 
in any such matter because signature authority for that particular class 
of matters has been delegated to an Assistant General Counsel. Because 
the General Counsel is responsible for assigning work within the Office 
of General Counsel, he can in fact accomplish his disqualification by 
simply avoiding any involvement in matters affecting the regulated 
entity. However, because it is likely to be assumed by others that the 
General Counsel is involved in all matters within the cognizance of the 
Office of General Counsel, he would be wise to file a written 
disqualification statement with the Commissioners of the regulatory 
agency and provide his subordinates with written notification of his 
disqualification, or he may be specifically asked by an agency ethics 
official or the Commissioners to file a written disqualification 
statement.
    Example 4: A scientist is employed by the National Science 
Foundation as a special Government employee to serve on a panel that 
reviews grant applications to fund research relating to deterioration of 
the ozone layer. She is discussing possible employment as a member of 
the faculty of a university that several years earlier received an NSF 
grant to study the effect of fluorocarbons, but has no grant application 
pending. As long as the university does not submit a new application for 
the panel's review, the employee would not have to take any action to 
effect disqualification.

    (d) Agency determination of substantial conflict. Where the agency 
determines that the employee's action in seeking employment with a 
particular person will require his disqualification from matters so 
central or critical to the performance of his official duties that the 
employee's ability to perform the duties of his position would be 
materially impaired, the agency may allow the employee to take annual 
leave or leave without pay while seeking employment, or may take other 
appropriate administrative action.

[57 FR 35042, Aug. 7, 1992, as amended at 64 FR 13064, Mar. 17, 1999]



Sec. 2635.605  Waiver or authorization permitting participation while seeking 

employment.

    (a) Waiver. Where, as defined in Sec. 2635.603(b)(1)(i), an 
employee is engaged in discussions that constitute employment 
negotiations for purposes of 18 U.S.C. 208(a), the employee may 
participate personally and substantially in a particular matter that has 
a direct and predictable effect on the financial interests of a 
prospective employer only after receiving a written waiver issued under 
the authority of 18 U.S.C. 208(b)(1) or (b)(3). These waivers are 
described in Sec. 2635.402(d). See also subpart C of part 2640 of this 
chapter. For certain employees, a regulatory exemption under the 
authority of 18 U.S.C. 208(b)(2) may also apply (see subpart B of part 
2640 of this chapter).

    Example 1: An employee of the Department of Agriculture has had two 
telephone conversations with an orange grower regarding possible 
employment. They have discussed the employee's qualifications for a 
particular position with the grower, but have not yet discussed salary 
or other specific terms of employment. The employee is negotiating for 
employment within the meaning of 18 U.S.C. 208(a) and Sec. 
2635.603(b)(1)(i). In the absence of a written waiver issued under 18 
U.S.C. 208(b)(1), she may not take official action on a complaint filed 
by a competitor alleging that the grower has shipped oranges in 
violation of applicable quotas.

    (b) Authorization by agency designee. Where an employee is seeking 
employment within the meaning of Sec. 2635.603(b)(1) (ii) or (iii), a 
reasonable

[[Page 578]]

person would be likely to question his impartiality if he were to 
participate personally and substantially in a particular matter that has 
a direct and predictable effect on the financial interests of any such 
prospective employer. The employee may participate in such matters only 
where the agency designee has authorized his participation in accordance 
with the standards set forth in Sec. 2635.502(d).

    Example 1: Within the past month, an employee of the Education 
Department mailed her resume to a university. She is thus seeking 
employment with the university within the meaning of Sec. 
2635.603(b)(1)(ii) even though she has received no reply. In the absence 
of specific authorization by the agency designee in accordance with 
Sec. 2635.502(d), she may not participate in an assignment to review a 
grant application submitted by the university.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997; 
64 FR 13064, Mar. 17, 1999]



Sec. 2635.606  Disqualification based on an arrangement concerning 

prospective employment or otherwise after negotiations.

    (a) Employment or arrangement concerning employment. An employee 
shall be disqualified from participating personally and substantially in 
a particular matter that has a direct and predictable effect on the 
financial interests of the person by whom he is employed or with whom he 
has an arrangement concerning future employment, unless authorized to 
participate in the matter by a written waiver issued under the authority 
of 18 U.S.C. 208 (b)(1) or (b)(3), or by a regulatory exemption under 
the authority of 18 U.S.C. 208 (b)(2). These waivers and exemptions are 
described in Sec. 2635.402(d). See also subparts B and C of part 2640 
of this chapter.

    Example 1: A military officer has accepted a job with a defense 
contractor to begin in six months, after his retirement from military 
service. During the period that he remains with the Government, the 
officer may not participate in the administration of a contract with 
that particular defense contractor unless he has received a written 
waiver under the authority of 18 U.S.C. 208(b)(1).
    Example 2: An accountant has just been offered a job with the 
Comptroller of the Currency which involves a two-year limited 
appointment. Her private employer, a large corporation, believes the job 
will enhance her skills and has agreed to give her a two-year unpaid 
leave of absence at the end of which she has agreed to return to work 
for the corporation. During the two-year period she is to be a COC 
employee, the accountant will have an arrangement concerning future 
employment with the corporation that will require her disqualification 
from participation in any particular matter that will have a direct and 
predictable effect on the corporation's financial interests.

    (b) Offer rejected or not made. The agency designee for the purpose 
of Sec. 2635.502(c) may, in an appropriate case, determine that an 
employee not covered by the preceding paragraph who has sought but is no 
longer seeking employment nevertheless shall be subject to a period of 
disqualification upon the conclusion of employment negotiations. Any 
such determination shall be based on a consideration of all the relevant 
factors, including those listed in Sec. 2635.502(d), and a 
determination that the concern that a reasonable person may question the 
integrity of the agency's decisionmaking process outweighs the 
Government's interest in the employee's participation in the particular 
matter.

    Example 1: An employee of the Securities and Exchange Commission was 
relieved of responsibility for an investigation of a broker-dealer while 
seeking employment with the law firm representing the broker-dealer in 
that matter. The firm did not offer her the partnership position she 
sought. Even though she is no longer seeking employment with the firm, 
she may continue to be disqualified from participating in the 
investigation based on a determination by the agency designee that the 
concern that a reasonable person might question whether, in view of the 
history of the employment negotiations, she could act impartially in the 
matter outweighs the Government's interest in her participation.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997; 
64 FR 13064, Mar. 17, 1999]



                      Subpart G_Misuse of Position



Sec. 2635.701  Overview.

    This subpart contains provisions relating to the proper use of 
official time and authority, and of information and

[[Page 579]]

resources to which an employee has access because of his Federal 
employment. This subpart sets forth standards relating to:
    (a) Use of public office for private gain;
    (b) Use of nonpublic information;
    (c) Use of Government property; and
    (d) Use of official time.



Sec. 2635.702  Use of public office for private gain.

    An employee shall not use his public office for his own private 
gain, for the endorsement of any product, service or enterprise, or for 
the private gain of friends, relatives, or persons with whom the 
employee is affiliated in a nongovernmental capacity, including 
nonprofit organizations of which the employee is an officer or member, 
and persons with whom the employee has or seeks employment or business 
relations. The specific prohibitions set forth in paragraphs (a) through 
(d) of this section apply this general standard, but are not intended to 
be exclusive or to limit the application of this section.
    (a) Inducement or coercion of benefits. An employee shall not use or 
permit the use of his Government position or title or any authority 
associated with his public office in a manner that is intended to coerce 
or induce another person, including a subordinate, to provide any 
benefit, financial or otherwise, to himself or to friends, relatives, or 
persons with whom the employee is affiliated in a nongovernmental 
capacity.

    Example 1: Offering to pursue a relative's consumer complaint over a 
household appliance, an employee of the Securities and Exchange 
Commission called the general counsel of the manufacturer and, in the 
course of discussing the problem, stated that he worked at the SEC and 
was responsible for reviewing the company's filings. The employee 
violated the prohibition against use of public office for private gain 
by invoking his official authority in an attempt to influence action to 
benefit his relative.
    Example 2: An employee of the Department of Commerce was asked by a 
friend to determine why his firm's export license had not yet been 
granted by another office within the Department of Commerce. At a 
department-level staff meeting, the employee raised as a matter for 
official inquiry the delay in approval of the particular license and 
asked that the particular license be expedited. The official used her 
public office in an attempt to benefit her friend and, in acting as her 
friend's agent for the purpose of pursuing the export license with the 
Department of Commerce, may also have violated 18 U.S.C. 205.

    (b) Appearance of governmental sanction. Except as otherwise 
provided in this part, an employee shall not use or permit the use of 
his Government position or title or any authority associated with his 
public office in a manner that could reasonably be construed to imply 
that his agency or the Government sanctions or endorses his personal 
activities or those of another. When teaching, speaking, or writing in a 
personal capacity, he may refer to his official title or position only 
as permitted by Sec. 2635.807(b). He may sign a letter of 
recommendation using his official title only in response to a request 
for an employment recommendation or character reference based upon 
personal knowledge of the ability or character of an individual with 
whom he has dealt in the course of Federal employment or whom he is 
recommending for Federal employment.

    Example 1: An employee of the Department of the Treasury who is 
asked to provide a letter of recommendation for a former subordinate on 
his staff may provide the recommendation using official stationery and 
may sign the letter using his official title. If, however, the request 
is for the recommendation of a personal friend with whom he has not 
dealt in the Government, the employee should not use official stationery 
or sign the letter of recommendation using his official title, unless 
the recommendation is for Federal employment. In writing the letter of 
recommendation for his personal friend, it may be appropriate for the 
employee to refer to his official position in the body of the letter.

    (c) Endorsements. An employee shall not use or permit the use of his 
Government position or title or any authority associated with his public 
office to endorse any product, service or enterprise except:
    (1) In furtherance of statutory authority to promote products, 
services or enterprises; or
    (2) As a result of documentation of compliance with agency 
requirements or standards or as the result of recognition for 
achievement given under an

[[Page 580]]

agency program of recognition for accomplishment in support of the 
agency's mission.

    Example 1: A Commissioner of the Consumer Product Safety Commission 
may not appear in a television commercial in which she endorses an 
electrical appliance produced by her former employer, stating that it 
has been found by the CPSC to be safe for residential use.
    Example 2: A Foreign Commercial Service officer from the Department 
of Commerce is asked by a United States telecommunications company to 
meet with representatives of the Government of Spain, which is in the 
process of procuring telecommunications services and equipment. The 
company is bidding against five European companies and the statutory 
mission of the Department of Commerce includes assisting the export 
activities of U.S. companies. As part of his official duties, the 
Foreign Commercial Service officer may meet with Spanish officials and 
explain the advantages of procurement from the United States company.
    Example 3: The Administrator of the Environmental Protection Agency 
may sign a letter to an oil company indicating that its refining 
operations are in compliance with Federal air quality standards even 
though he knows that the company has routinely displayed letters of this 
type in television commercials portraying it as a ``trustee of the 
environment for future generations.''
    Example 4: An Assistant Attorney General may not use his official 
title or refer to his Government position in a book jacket endorsement 
of a novel about organized crime written by an author whose work he 
admires. Nor may he do so in a book review published in a newspaper.

    (d) Performance of official duties affecting a private interest. To 
ensure that the performance of his official duties does not give rise to 
an appearance of use of public office for private gain or of giving 
preferential treatment, an employee whose duties would affect the 
financial interests of a friend, relative or person with whom he is 
affiliated in a nongovernmental capacity shall comply with any 
applicable requirements of Sec. 2635.502.
    (e) Use of terms of address and ranks. Nothing in this section 
prohibits an employee who is ordinarily addressed using a general term 
of address, such as ``The Honorable'', or a rank, such as a military or 
ambassadorial rank, from using that term of address or rank in 
connection with a personal activity.



Sec. 2635.703  Use of nonpublic information.

    (a) Prohibition. An employee shall not engage in a financial 
transaction using nonpublic information, nor allow the improper use of 
nonpublic information to further his own private interest or that of 
another, whether through advice or recommendation, or by knowing 
unauthorized disclosure.
    (b) Definition of nonpublic information. For purposes of this 
section, nonpublic information is information that the employee gains by 
reason of Federal employment and that he knows or reasonably should know 
has not been made available to the general public. It includes 
information that he knows or reasonably should know:
    (1) Is routinely exempt from disclosure under 5 U.S.C. 552 or 
otherwise protected from disclosure by statute, Executive order or 
regulation;
    (2) Is designated as confidential by an agency; or
    (3) Has not actually been disseminated to the general public and is 
not authorized to be made available to the public on request.

    Example 1: A Navy employee learns in the course of her duties that a 
small corporation will be awarded a Navy contract for electrical test 
equipment. She may not take any action to purchase stock in the 
corporation or its suppliers and she may not advise friends or relatives 
to do so until after public announcement of the award. Such actions 
could violate Federal securities statutes as well as this section.
    Example 2: A General Services Administration employee involved in 
evaluating proposals for a construction contract cannot disclose the 
terms of a competing proposal to a friend employed by a company bidding 
on the work. Prior to award of the contract, bid or proposal information 
is nonpublic information specifically protected by 41 U.S.C. 423.
    Example 3: An employee is a member of a source selection team 
assigned to review the proposals submitted by several companies in 
response to an Army solicitation for spare parts. As a member of the 
evaluation team, the employee has access to proprietary information 
regarding the production methods of Alpha Corporation, one of the 
competitors. He may not use that information to assist Beta Company in 
drafting a proposal to compete for a Navy spare parts contract. The 
Federal Acquisition Regulation in 48 CFR parts 3, 14 and 15 restricts 
the release of information related to procurements and other

[[Page 581]]

contractor information that must be protected under 18 U.S.C. 1905 and 
41 U.S.C. 423.
    Example 4: An employee of the Nuclear Regulatory Commission 
inadvertently includes a document that is exempt from disclosure with a 
group of documents released in response to a Freedom of Information Act 
request. Regardless of whether the document is used improperly, the 
employee's disclosure does not violate this section because it was not a 
knowing unauthorized disclosure made for the purpose of furthering a 
private interest.
    Example 5: An employee of the Army Corps of Engineers is actively 
involved in the activities of an organization whose goals relate to 
protection of the environment. The employee may not, other than as 
permitted by agency procedures, give the organization or a newspaper 
reporter nonpublic information about long-range plans to build a 
particular dam.



Sec. 2635.704  Use of Government property.

    (a) Standard. An employee has a duty to protect and conserve 
Government property and shall not use such property, or allow its use, 
for other than authorized purposes.
    (b) Definitions. For purposes of this section:
    (1) Government property includes any form of real or personal 
property in which the Government has an ownership, leasehold, or other 
property interest as well as any right or other intangible interest that 
is purchased with Government funds, including the services of contractor 
personnel. The term includes office supplies, telephone and other 
telecommunications equipment and services, the Government mails, 
automated data processing capabilities, printing and reproduction 
facilities, Government records, and Government vehicles.
    (2) Authorized purposes are those purposes for which Government 
property is made available to members of the public or those purposes 
authorized in accordance with law or regulation.

    Example 1: Under regulations of the General Services Administration 
at 41 CFR 101-35.201, an employee may make a personal long distance call 
charged to her personal calling card.
    Example 2: An employee of the Commodity Futures Trading Commission 
whose office computer gives him access to a commercial service providing 
information for investors may not use that service for personal 
investment research.
    Example 3: In accordance with Office of Personnel Management 
regulations at part 251 of this title, an attorney employed by the 
Department of Justice may be permitted to use her office word processor 
and agency photocopy equipment to prepare a paper to be presented at a 
conference sponsored by a professional association of which she is a 
member.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997]



Sec. 2635.705  Use of official time.

    (a) Use of an employee's own time. Unless authorized in accordance 
with law or regulations to use such time for other purposes, an employee 
shall use official time in an honest effort to perform official duties. 
An employee not under a leave system, including a Presidential appointee 
exempted under 5 U.S.C. 6301(2), has an obligation to expend an honest 
effort and a reasonable proportion of his time in the performance of 
official duties.

    Example 1: An employee of the Social Security Administration may use 
official time to engage in certain representational activities on behalf 
of the employee union of which she is a member. Under 5 U.S.C. 7131, 
this is a proper use of her official time even though it does not 
involve performance of her assigned duties as a disability claims 
examiner.
    Example 2: A pharmacist employed by the Department of Veterans 
Affairs has been granted excused absence to participate as a speaker in 
a conference on drug abuse sponsored by the professional association to 
which he belongs. Although excused absence granted by an agency in 
accordance with guidance in chapter 630 of the Federal Personnel Manual 
allows an employee to be absent from his official duties without charge 
to his annual leave account, such absence is not on official time.

    (b) Use of a subordinate's time. An employee shall not encourage, 
direct, coerce, or request a subordinate to use official time to perform 
activities other than those required in the performance of official 
duties or authorized in accordance with law or regulation.

    Example 1: An employee of the Department of Housing and Urban 
Development may not ask his secretary to type his personal 
correspondence during duty hours. Further, directing or coercing a 
subordinate to perform such activities during nonduty hours constitutes 
an improper use of public office for private gain in violation of Sec. 
2635.702(a).

[[Page 582]]

Where the arrangement is entirely voluntary and appropriate compensation 
is paid, the secretary may type the correspondence at home on her own 
time. Where the compensation is not adequate, however, the arrangement 
would involve a gift to the superior in violation of the standards in 
subpart C of this part.



                      Subpart H_Outside Activities



Sec. 2635.801  Overview.

    (a) This subpart contains provisions relating to outside employment, 
outside activities and personal financial obligations of employees that 
are in addition to the principles and standards set forth in other 
subparts of this part. Several of these provisions apply to 
uncompensated as well as to compensated outside activities.
    (b) An employee who wishes to engage in outside employment or other 
outside activities must comply with all relevant provisions of this 
subpart, including, when applicable:
    (1) The prohibition on outside employment or any other outside 
activity that conflicts with the employee's official duties;
    (2) Any agency-specific requirement for prior approval of outside 
employment or activities;
    (3) The limitations on receipt of outside earned income by certain 
Presidential appointees and other noncareer employees;
    (4) The limitations on paid and unpaid service as an expert witness;
    (5) The limitations on participation in professional organizations;
    (6) The limitations on paid and unpaid teaching, speaking, and 
writing; and
    (7) The limitations on fundraising activities.
    (c) Outside employment and other outside activities of an employee 
must also comply with applicable provisions set forth in other subparts 
of this part and in supplemental agency regulations. These include the 
principle that an employee shall endeavor to avoid actions creating an 
appearance of violating any of the ethical standards in this part and 
the prohibition against use of official position for an employee's 
private gain or for the private gain of any person with whom he has 
employment or business relations or is otherwise affiliated in a 
nongovernmental capacity.
    (d) In addition to the provisions of this and other subparts of this 
part, an employee who wishes to engage in outside employment or other 
outside activities must comply with applicable statutes and regulations. 
Relevant provisions of law, many of which are listed in subpart I of 
this part, may include:
    (1) 18 U.S.C. 201(b), which prohibits a public official from 
seeking, accepting or agreeing to receive or accept anything of value in 
return for being influenced in the performance of an official act or for 
being induced to take or omit to take any action in violation of his 
official duty;
    (2) 18 U.S.C. 201(c), which prohibits a public official, otherwise 
than as provided by law for the proper discharge of official duty, from 
seeking, accepting, or agreeing to receive or accept anything of value 
for or because of any official act;
    (3) 18 U.S.C. 203(a), which prohibits an employee from seeking, 
accepting, or agreeing to receive or accept compensation for any 
representational services, rendered personally or by another, in 
relation to any particular matter in which the United States is a party 
or has a direct and substantial interest, before any department, agency, 
or other specified entity. This statute contains several exceptions, as 
well as standards for special Government employees that limit the scope 
of the restriction;
    (4) 18 U.S.C. 205, which prohibits an employee, whether or not for 
compensation, from acting as agent or attorney for anyone in a claim 
against the United States or from acting as agent or attorney for 
anyone, before any department, agency, or other specified entity, in any 
particular matter in which the United States is a party or has a direct 
and substantial interest. It also prohibits receipt of any gratuity, or 
any share of or interest in a claim against the United States, in 
consideration for assisting in the prosecution of such claim. This 
statute contains several exceptions, as well as standards for special 
Government employees that limit the scope of the restrictions;

[[Page 583]]

    (5) 18 U.S.C. 209, which prohibits an employee, other than a special 
Government employee, from receiving any salary or any contribution to or 
supplementation of salary from any source other than the United States 
as compensation for services as a Government employee. The statute 
contains several exceptions that limit its applicability;
    (6) The Emoluments Clause of the United States Constitution, article 
I, section 9, clause 8, which prohibits anyone holding an office of 
profit or trust under the United States from accepting any gift, office, 
title or emolument, including salary or compensation, from any foreign 
government except as authorized by Congress. In addition, 18 U.S.C. 219 
generally prohibits any public official from being or acting as an agent 
of a foreign principal, including a foreign government, corporation or 
person, if the employee would be required to register as a foreign agent 
under 22 U.S.C. 611 et seq.;
    (7) The Hatch Act Reform Amendments, 5 U.S.C. 7321 through 7326, 
which govern the political activities of executive branch employees; and
    (8) The limitations on outside employment, 5 U.S.C. App. (Ethics in 
Government Act of 1978), which prohibit a covered noncareer employee's 
receipt of compensation for specified activities and provide that he 
shall not allow his name to be used by any firm or other entity which 
provides professional services involving a fiduciary relationship. 
Implementing regulations are contained in Sec. Sec. 2636.305 through 
2636.307 of this chapter.

[57 FR 35041, Aug. 7, 1992; 57 FR 48557, Oct. 27, 1992; 61 FR 50691, 
Sept. 27, 1996; 62 FR 48748, Sept. 17, 1997]



Sec. 2635.802  Conflicting outside employment and activities.

    An employee shall not engage in outside employment or any other 
outside activity that conflicts with his official duties. An activity 
conflicts with an employee's official duties:
    (a) If it is prohibited by statute or by an agency supplemental 
regulation; or
    (b) If, under the standards set forth in Sec. Sec. 2635.402 and 
2635.502, it would require the employee's disqualification from matters 
so central or critical to the performance of his official duties that 
the employee's ability to perform the duties of his position would be 
materially impaired.
    Employees are cautioned that even though an outside activity may not 
be prohibited under this section, it may violate other principles or 
standards set forth in this part or require the employee to disqualify 
himself from participation in certain particular matters under either 
subpart D or subpart E of this part.

    Example 1: An employee of the Environmental Protection Agency has 
just been promoted. His principal duty in his new position is to write 
regulations relating to the disposal of hazardous waste. The employee 
may not continue to serve as president of a nonprofit environmental 
organization that routinely submits comments on such regulations. His 
service as an officer would require his disqualification from duties 
critical to the performance of his official duties on a basis so 
frequent as to materially impair his ability to perform the duties of 
his position.
    Example 2: An employee of the Occupational Safety and Health 
Administration who was and is expected again to be instrumental in 
formulating new OSHA safety standards applicable to manufacturers that 
use chemical solvents has been offered a consulting contract to provide 
advice to an affected company in restructuring its manufacturing 
operations to comply with the OSHA standards. The employee should not 
enter into the consulting arrangement even though he is not currently 
working on OSHA standards affecting this industry and his consulting 
contract can be expected to be completed before he again works on such 
standards. Even though the consulting arrangement would not be a 
conflicting activity within the meaning of Sec. 2635.802, it would 
create an appearance that the employee had used his official position to 
obtain the compensated outside business opportunity and it would create 
the further appearance of using his public office for the private gain 
of the manufacturer.



Sec. 2635.803  Prior approval for outside employment and activities.

    When required by agency supplemental regulation issued after 
February 3, 1993, an employee shall obtain prior approval before 
engaging in outside employment or activities. Where it is determined to 
be necessary or desirable for the purpose of administering its ethics 
program, an agency shall, by supplemental regulation, require employees 
or any category of employees

[[Page 584]]

to obtain prior approval before engaging in specific types of outside 
activities, including outside employment.

[57 FR 35042, Aug. 7, 1992, as amended at 59 FR 4780, Feb. 2, 1994; 60 
FR 6391, Feb. 2, 1995; 60 FR 66858, Dec. 27, 1995; 61 FR 40951, Aug. 7, 
1996; 62 FR 48748, Sept. 17, 1997]



Sec. 2635.804  Outside earned income limitations applicable to certain 

Presidential appointees and other noncareer employees.

    (a) Presidential appointees to full-time noncareer positions. A 
Presidential appointee to a full-time noncareer position shall not 
receive any outside earned income for outside employment, or for any 
other outside activity, performed during that Presidential appointment. 
This limitation does not apply to any outside earned income received for 
outside employment, or for any other outside activity, carried out in 
satisfaction of the employee's obligation under a contract entered into 
prior to April 12, 1989.
    (b) Covered noncareer employees. Covered noncareer employees, as 
defined in Sec. 2636.303(a) of this chapter, may not, in any calendar 
year, receive outside earned income attributable to that calendar year 
which exceeds 15 percent of the annual rate of basic pay for level II of 
the Executive Schedule under 5 U.S.C. 5313, as in effect on January 1 of 
such calendar year. Employees should consult the regulations 
implementing this limitation, which are contained in Sec. Sec. 2636.301 
through 2636.304 of this chapter.

    Note: In addition to the 15 percent limitation on outside earned 
income, covered noncareer employees are prohibited from receiving any 
compensation for: practicing a profession which involves a fiduciary 
relationship; affiliating with or being employed by a firm or other 
entity which provides professional services involving a fiduciary 
relationship; serving as an officer or member of the board of any 
association, corporation or other entity; or teaching without prior 
approval. Implementing regulations are contained in Sec. Sec. 2636.305 
through 2636.307 of this chapter.

    (c) Definitions. For purposes of this section:
    (1) Outside earned income has the meaning set forth in Sec. 
2636.303(b) of this chapter, except that Sec. 2636.303(b)(8) shall not 
apply.
    (2) Presidential appointee to a full-time noncareer position means 
any employee who is appointed by the President to a full-time position 
described in 5 U.S.C. 5312 through 5317 or to a position that, by 
statute or as a matter of practice, is filled by Presidential 
appointment, other than:
    (i) A position filled under the authority of 3 U.S.C. 105 or 3 
U.S.C. 107(a) for which the rate of basic pay is less than that for GS-
9, step 1 of the General Schedule;
    (ii) A position, within a White House operating unit, that is 
designated as not normally subject to change as a result of a 
Presidential transition;
    (iii) A position within the uniformed services; or
    (iv) A position in which a member of the foreign service is serving 
that does not require advice and consent of the Senate.

    Example 1: A career Department of Justice employee who is detailed 
to a policy-making position in the White House Office that is ordinarily 
filled by a noncareer employee is not a Presidential appointee to a 
full-time noncareer position.
    Example 2: A Department of Energy employee appointed under Sec. 
213.3301 of this title to a Schedule C position is appointed by the 
agency and, thus, is not a Presidential appointee to a full-time 
noncareer position.



Sec. 2635.805  Service as an expert witness.

    (a) Restriction. An employee shall not serve, other than on behalf 
of the United States, as an expert witness, with or without 
compensation, in any proceeding before a court or agency of the United 
States in which the United States is a party or has a direct and 
substantial interest, unless the employee's participation is authorized 
by the agency under paragraph (c) of this section. Except as provided in 
paragraph (b) of this section, this restriction shall apply to a special 
Government employee only if he has participated as an employee or 
special Government employee in the particular proceeding or in the 
particular matter that is the subject of the proceeding.
    (b) Additional restriction applicable to certain special Government 
employees. (1) In addition to the restriction described in paragraph (a) 
of this section, a special Government employee described in

[[Page 585]]

paragraph (b)(2) of this section shall not serve, other than on behalf 
of the United States, as an expert witness, with or without 
compensation, in any proceeding before a court or agency of the United 
States in which his employing agency is a party or has a direct and 
substantial interest, unless the employee's participation is authorized 
by the agency under paragraph (c) of this section.
    (2) The restriction in paragraph (b)(1) of this section shall apply 
to a special Government employee who:
    (i) Is appointed by the President;
    (ii) Serves on a commission established by statute; or
    (iii) Has served or is expected to serve for more than 60 days in a 
period of 365 consecutive days.
    (c) Authorization to serve as an expert witness. Provided that the 
employee's testimony will not violate any of the principles or standards 
set forth in this part, authorization to provide expert witness service 
otherwise prohibited by paragraphs (a) and (b) of this section may be 
given by the designated agency ethics official of the agency in which 
the employee serves when:
    (1) After consultation with the agency representing the Government 
in the proceeding or, if the Government is not a party, with the 
Department of Justice and the agency with the most direct and 
substantial interest in the matter, the designated agency ethics 
official determines that the employee's service as an expert witness is 
in the interest of the Government; or
    (2) The designated agency ethics official determines that the 
subject matter of the testimony does not relate to the employee's 
official duties within the meaning of Sec. 2635.807(a)(2)(i).
    (d) Nothing in this section prohibits an employee from serving as a 
fact witness when subpoenaed by an appropriate authority.

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997]



Sec. 2635.806  Participation in professional associations. [Reserved]



Sec. 2635.807  Teaching, speaking and writing.

    (a) Compensation for teaching, speaking or writing. Except as 
permitted by paragraph (a)(3) of this section, an employee, including a 
special Government employee, shall not receive compensation from any 
source other than the Government for teaching, speaking or writing that 
relates to the employee's official duties.
    (1) Relationship to other limitations on receipt of compensation. 
The compensation prohibition contained in this section is in addition to 
any other limitation on receipt of compensation set forth in this 
chapter, including:
    (i) The requirement contained in Sec. 2636.307 of this chapter that 
covered noncareer employees obtain advance authorization before engaging 
in teaching for compensation; and
    (ii) The prohibitions and limitations in Sec. 2635.804 and in Sec. 
2636.304 of this chapter on receipt of outside earned income applicable 
to certain Presidential appointees and to other covered noncareer 
employees.
    (2) Definitions. For purposes of this paragraph:
    (i) Teaching, speaking or writing relates to the employee's official 
duties if:
    (A) The activity is undertaken as part of the employee's official 
duties;
    (B) The circumstances indicate that the invitation to engage in the 
activity was extended to the employee primarily because of his official 
position rather than his expertise on the particular subject matter;
    (C) The invitation to engage in the activity or the offer of 
compensation for the activity was extended to the employee, directly or 
indirectly, by a person who has interests that may be affected 
substantially by performance or nonperformance of the employee's 
official duties;
    (D) The information conveyed through the activity draws 
substantially on ideas or official data that are nonpublic information 
as defined in Sec. 2635.703(b); or
    (E) Except as provided in paragraph (a)(2)(i)(E)(4) of this section, 
the subject of the activity deals in significant part with:
    (1) Any matter to which the employee presently is assigned or to 
which the employee had been assigned during the previous one-year 
period;

[[Page 586]]

    (2) Any ongoing or announced policy, program or operation of the 
agency; or
    (3) In the case of a noncareer employee as defined in Sec. 
2636.303(a) of this chapter, the general subject matter area, industry, 
or economic sector primarily affected by the programs and operations of 
his agency.
    (4) The restrictions in paragraphs (a)(2)(i)(E) (2) and (3) of this 
section do not apply to a special Government employee. The restriction 
in paragraph (a)(2)(i)(E)(1) of this section applies only during the 
current appointment of a special Government employee; except that if the 
special Government employee has not served or is not expected to serve 
for more than 60 days during the first year or any subsequent one year 
period of that appointment, the restriction applies only to particular 
matters involving specific parties in which the special Government 
employee has participated or is participating personally and 
substantially.

    Note: Section 2635.807(a)(2)(i)(E) does not preclude an employee, 
other than a covered noncareer employee, from receiving compensation for 
teaching, speaking or writing on a subject within the employee's 
discipline or inherent area of expertise based on his educational 
background or experience even though the teaching, speaking or writing 
deals generally with a subject within the agency's areas of 
responsibility.
    Example 1: The Director of the Division of Enforcement at the 
Commodity Futures Trading Commission has a keen interest in stamp 
collecting and has spent years developing his own collection as well as 
studying the field generally. He is asked by an international society of 
philatelists to give a series of four lectures on how to assess the 
value of American stamps. Because the subject does not relate to his 
official duties, the Director may accept compensation for the lecture 
series. He could not, however, accept a similar invitation from a 
commodities broker.
    Example 2: A scientist at the National Institutes of Health, whose 
principal area of Government research is the molecular basis of the 
development of cancer, could not be compensated for writing a book which 
focuses specifically on the research she conducts in her position at 
NIH, and thus, relates to her official duties. However, the scientist 
could receive compensation for writing or editing a textbook on the 
treatment of all cancers, provided that the book does not focus on 
recent research at NIH, but rather conveys scientific knowledge gleaned 
from the scientific community as a whole. The book might include a 
chapter, among many other chapters, which discusses the molecular basis 
of cancer development. Additionally, the book could contain brief 
discussions of recent developments in cancer treatment, even though some 
of those developments are derived from NIH research, as long as it is 
available to the public.
    Example 3: On his own time, a National Highway Traffic Safety 
Administration employee prepared a consumer's guide to purchasing a safe 
automobile that focuses on automobile crash worthiness statistics 
gathered and made public by NHTSA. He may not receive royalties or any 
other form of compensation for the guide. The guide deals in significant 
part with the programs or operations of NHTSA and, therefore, relates to 
the employee's official duties. On the other hand, the employee could 
receive royalties from the sale of a consumer's guide to values in used 
automobiles even though it contains a brief, incidental discussion of 
automobile safety standards developed by NHTSA.
    Example 4: An employee of the Securities and Exchange Commission may 
not receive compensation for a book which focuses specifically on the 
regulation of the securities industry in the United States, since that 
subject concerns the regulatory programs or operations of the SEC. The 
employee may, however, write a book about the advantages of investing in 
various types of securities as long as the book contains only an 
incidental discussion of any program or operation of the SEC.
    Example 5: An employee of the Department of Commerce who works in 
the Department's employee relations office is an acknowledged expert in 
the field of Federal employee labor relations, and participates in 
Department negotiations with employee unions. The employee may receive 
compensation from a private training institute for a series of lectures 
which describe the decisions of the Federal Labor Relations Authority 
concerning unfair labor practices, provided that her lectures do not 
contain any significant discussion of labor relations cases handled at 
the Department of Commerce, or the Department's labor relations 
policies. Federal Labor Relations Authority decisions concerning Federal 
employee unfair labor practices are not a specific program or operation 
of the Department of Commerce and thus do not relate to the employee's 
official duties. However, an employee of the FLRA could not give the 
same presentations for compensation.
    Example 6: A program analyst employed at the Environmental 
Protection Agency may receive royalties and other compensation for a 
book about the history of the environmental movement in the United 
States even though it contains brief references to the creation and 
responsibilities of the EPA. A covered noncareer employee of the EPA,

[[Page 587]]

however, could not receive compensation for writing the same book 
because it deals with the general subject matter area affected by EPA 
programs and operations. Neither employee could receive compensation for 
writing a book that focuses on specific EPA regulations or otherwise on 
its programs and operations.
    Example 7: An attorney in private practice has been given a one year 
appointment as a special Government employee to serve on an advisory 
committee convened for the purpose of surveying and recommending 
modification of procurement regulations that deter small businesses from 
competing for Government contracts. Because his service under that 
appointment is not expected to exceed 60 days, the attorney may accept 
compensation for an article about the anticompetitive effects of certain 
regulatory certification requirements even though those regulations are 
being reviewed by the advisory committee. The regulations which are the 
focus of the advisory committee deliberations are not a particular 
matter involving specific parties. Because the information is nonpublic, 
he could not, however, accept compensation for an article which recounts 
advisory committee deliberations that took place in a meeting closed to 
the public in order to discuss proprietary information provided by a 
small business.
    Example 8: A biologist who is an expert in marine life is employed 
for more than 60 days in a year as a special Government employee by the 
National Science Foundation to assist in developing a program of grants 
by the Foundation for the study of coral reefs. The biologist may 
continue to receive compensation for speaking, teaching and writing 
about marine life generally and coral reefs specifically. However, 
during the term of her appointment as a special Government employee, she 
may not receive compensation for an article about the NSF program she is 
participating in developing. Only the latter would concern a matter to 
which the special Government employee is assigned.
    Example 9: An expert on international banking transactions has been 
given a one-year appointment as a special Government employee to assist 
in analyzing evidence in the Government's fraud prosecution of owners of 
a failed savings and loan association. It is anticipated that she will 
serve fewer than 60 days under that appointment. Nevertheless, during 
her appointment, the expert may not accept compensation for an article 
about the fraud prosecution, even though the article does not reveal 
nonpublic information. The prosecution is a particular matter that 
involves specific parties.

    (ii) Agency has the meaning set forth in Sec. 2635.102(a), except 
that any component of a department designated as a separate agency under 
Sec. 2635.203(a) shall be considered a separate agency.
    (iii) Compensation includes any form of consideration, remuneration 
or income, including royalties, given for or in connection with the 
employee's teaching, speaking or writing activities. Unless accepted 
under specific statutory authority, such as 31 U.S.C. 1353, 5 U.S.C. 
4111 or 7342, or an agency gift acceptance statute, it includes 
transportation, lodgings and meals, whether provided in kind, by 
purchase of a ticket, by payment in advance or by reimbursement after 
the expense has been incurred. It does not include:
    (A) Items offered by any source that could be accepted from a 
prohibited source under subpart B of this part;
    (B) Meals or other incidents of attendance such as waiver of 
attendance fees or course materials furnished as part of the event at 
which the teaching or speaking takes place;
    (C) Copies of books or of publications containing articles, reprints 
of articles, tapes of speeches, and similar items that provide a record 
of the teaching, speaking or writing activity; or
    (D) In the case of an employee other than a covered noncareer 
employee as defined in 5 CFR 2636.303(a), travel expenses, consisting of 
transportation, lodgings or meals, incurred in connection with the 
teaching, speaking or writing activity.

    Note to paragraph (a)(2)(iii):
    Independent of Sec. 2635.807(a), other authorities, such as 18 
U.S.C. 209, in some circumstances may limit or entirely preclude an 
employee's acceptance of travel expenses. In addition, employees who 
file financial disclosure reports should be aware that, subject to 
applicable thresholds and exclusions, travel and travel reimbursements 
accepted from sources other than the United States Government must be 
reported on their financial disclosure reports.
    Example 1 to paragraph (a)(2)(iii): A GS-15 employee of the Forest 
Service has developed and marketed, in her private capacity, a speed 
reading technique for which popular demand is growing. She is invited to 
speak about the technique by a representative of an organization that 
will be substantially affected by a regulation on land management which 
the employee is in the process of drafting for the Forest Service. The 
representative offers to pay the employee a $200 speaker's fee and to 
reimburse all her travel expenses. She may accept the travel 
reimbursements, but not the speaker's fee. The

[[Page 588]]

speaking activity is related to her official duties under Sec. 
2635.807(a)(2)(i)(C) and the fee is prohibited compensation for such 
speech; travel expenses incurred in connection with the speaking 
engagement, on the other hand, are not prohibited compensation for a GS-
15 employee.
    Example 2 to paragraph (a)(2)(iii): Solely because of her recent 
appointment to a Cabinet-level position, a Government official is 
invited by the Chief Executive Officer of a major international 
corporation to attend firm meetings to be held in Aspen for the purpose 
of addressing senior corporate managers on the importance of 
recreational activities to a balanced lifestyle. The firm offers to 
reimburse the official's travel expenses. The official may not accept 
the offer. The speaking activity is related to official duties under 
Sec. 2635.807(a)(2)(i)(B) and, because she is a covered noncareer 
employee as defined in Sec. 2636.303(a) of this chapter, the travel 
expenses are prohibited compensation as to her.
    Example 3 to paragraph (a)(2)(iii): A GS-14 attorney at the Federal 
Trade Commission (FTC) who played a lead role in a recently concluded 
merger case is invited to speak about the case, in his private capacity, 
at a conference in New York. The attorney has no public speaking 
responsibilities on behalf of the FTC apart from the judicial and 
administrative proceedings to which he is assigned. The sponsors of the 
conference offer to reimburse the attorney for expenses incurred in 
connection with his travel to New York. They also offer him, as 
compensation for his time and effort, a free trip to San Francisco. The 
attorney may accept the travel expenses to New York, but not the 
expenses to San Francisco. The lecture relates to his official duties 
under paragraphs (a)(2)(i)(E)(1) and (a)(2)(i)(E)(2) of Sec. 2635.807, 
but because he is not a covered noncareer employee as defined in Sec. 
2636.303(a) of this chapter, the expenses associated with his travel to 
New York are not a prohibited form of compensation as to him. The travel 
expenses to San Francisco, on the other hand, not incurred in connection 
with the speaking activity, are a prohibited form of compensation. If 
the attorney were a covered noncareer employee he would be barred from 
accepting the travel expenses to New York as well as the travel expenses 
to San Francisco.
    Example 4 to paragraph (a)(2)(iii): An advocacy group dedicated to 
improving treatments for severe pain asks the National Institutes of 
Health (NIH) to provide a conference speaker who can discuss recent 
advances in the agency's research on pain. The group also offers to pay 
the employee's travel expenses to attend the conference. After 
performing the required conflict of interest analysis, NIH authorizes 
acceptance of the travel expenses under 31 U.S.C. 1353 and the 
implementing General Services Administration regulation, as codified 
under 41 CFR chapter 304, and authorizes an employee to undertake the 
travel. At the conference the advocacy group, as agreed, pays the 
employee's hotel bill and provides several of his meals. Subsequently 
the group reimburses the agency for the cost of the employee's airfare 
and some additional meals. All of the payments by the advocacy group are 
permissible. Since the employee is speaking officially and the expense 
payments are accepted under 31 U.S.C. 1353, they are not prohibited 
compensation under Sec. 2635.807(a)(2)(iii). The same result would 
obtain with respect to expense payments made by non-Government sources 
properly authorized under an agency gift acceptance statute, the 
Government Employees Training Act, 5 U.S.C. 4111, or the foreign gifts 
law, 5 U.S.C. 7342.

    (iv) Receive means that there is actual or constructive receipt of 
the compensation by the employee so that the employee has the right to 
exercise dominion and control over the compensation and to direct its 
subsequent use. Compensation received by an employee includes 
compensation which is:
    (A) Paid to another person, including a charitable organization, on 
the basis of designation, recommendation or other specification by the 
employee; or
    (B) Paid with the employee's knowledge and acquiescence to his 
parent, sibling, spouse, child, or dependent relative.
    (v) Particular matter involving specific parties has the meaning set 
forth in Sec. 2637.102(a)(7) of this chapter.
    (vi) Personal and substantial participation has the meaning set 
forth in Sec. 2635.402(b)(4).
    (3) Exception for teaching certain courses. Notwithstanding that the 
activity would relate to his official duties under paragraphs (a)(2)(i) 
(B) or (E) of this section, an employee may accept compensation for 
teaching a course requiring multiple presentations by the employee if 
the course is offered as part of:
    (i) The regularly established curriculum of:
    (A) An institution of higher education as defined at 20 U.S.C. 
1141(a);
    (B) An elementary school as defined at 20 U.S.C. 2891(8); or
    (C) A secondary school as defined at 20 U.S.C. 2891(21); or
    (ii) A program of education or training sponsored and funded by the 
Federal Government or by a State or local

[[Page 589]]

government which is not offered by an entity described in paragraph 
(a)(3)(i) of this section.

    Example 1: An employee of the Cost Accounting Standards Board who 
teaches an advanced accounting course as part of the regular business 
school curriculum of an accredited university may receive compensation 
for teaching the course even though a substantial portion of the course 
deals with cost accounting principles applicable to contracts with the 
Government.
    Example 2: An attorney employed by the Equal Employment Opportunity 
Commission may accept compensation for teaching a course at a state 
college on the subject of Federal employment discrimination law. The 
attorney could not accept compensation for teaching the same seminar as 
part of a continuing education program sponsored by her bar association 
because the subject of the course is focused on the operations or 
programs of the EEOC and the sponsor of the course is not an accredited 
educational institution.
    Example 3: An employee of the National Endowment for the Humanities 
is invited by a private university to teach a course that is a survey of 
Government policies in support of artists, poets and writers. As part of 
his official duties, the employee administers a grant that the 
university has received from the NEH. The employee may not accept 
compensation for teaching the course because the university has 
interests that may be substantially affected by the performance or 
nonperformance of the employee's duties. Likewise, an employee may not 
receive compensation for any teaching that is undertaken as part of his 
official duties or that involves the use of nonpublic information.

    (b) Reference to official position. An employee who is engaged in 
teaching, speaking or writing as outside employment or as an outside 
activity shall not use or permit the use of his official title or 
position to identify him in connection with his teaching, speaking or 
writing activity or to promote any book, seminar, course, program or 
similar undertaking, except that:
    (1) An employee may include or permit the inclusion of his title or 
position as one of several biographical details when such information is 
given to identify him in connection with his teaching, speaking or 
writing, provided that his title or position is given no more prominence 
than other significant biographical details;
    (2) An employee may use, or permit the use of, his title or position 
in connection with an article published in a scientific or professional 
journal, provided that the title or position is accompanied by a 
reasonably prominent disclaimer satisfactory to the agency stating that 
the views expressed in the article do not necessarily represent the 
views of the agency or the United States; and
    (3) An employee who is ordinarily addressed using a general term of 
address, such as ``The Honorable,'' or a rank, such as a military or 
ambassadorial rank, may use or permit the use of that term of address or 
rank in connection with his teaching, speaking or writing.

    Note: Some agencies may have policies requiring advance agency 
review, clearance, or approval of certain speeches, books, articles or 
similar products to determine whether the product contains an 
appropriate disclaimer, discloses nonpublic information, or otherwise 
complies with this section.
    Example 1: A meteorologist employed with the National Oceanic and 
Atmospheric Administration is asked by a local university to teach a 
graduate course on hurricanes. The university may include the 
meteorologist's Government title and position together with other 
information about his education and previous employment in course 
materials setting forth biographical data on all teachers involved in 
the graduate program. However, his title or position may not be used to 
promote the course, for example, by featuring the meteorologist's 
Government title, Senior Meteorologist, NOAA, in bold type under his 
name. In contrast, his title may be used in this manner when the 
meteorologist is authorized by NOAA to speak in his official capacity.
    Example 2: A doctor just employed by the Centers for Disease Control 
has written a paper based on his earlier independent research into cell 
structures. Incident to the paper's publication in the Journal of the 
American Medical Association, the doctor may be given credit for the 
paper, as Dr. M. Wellbeing, Associate Director, Centers for Disease 
Control, provided that the article also contains a disclaimer, concurred 
in by the CDC, indicating that the paper is the result of the doctor's 
independent research and does not represent the findings of the CDC.
    Example 3: An employee of the Federal Deposit Insurance Corporation 
has been asked to give a speech in his private capacity, without 
compensation, to the annual meeting of a committee of the American 
Bankers Association on the need for banking reform. The employee may be 
described in his introduction at the meeting as an employee of the

[[Page 590]]

Federal Deposit Insurance Corporation provided that other pertinent 
biographical details are mentioned as well.

[57 FR 35042, Aug. 7, 1992; 57 FR 48557, Oct. 27, 1992, as amended at 62 
FR 48748, Sept. 17, 1997; 65 FR 53652, Sept. 5, 2000; 66 FR 59674, Nov. 
30, 2001]



Sec. 2635.808  Fundraising activities.

    An employee may engage in fundraising only in accordance with the 
restrictions in part 950 of this title on the conduct of charitable 
fundraising in the Federal workplace and in accordance with paragraphs 
(b) and (c) of this section.
    (a) Definitions. For purposes of this section: (1) Fundraising means 
the raising of funds for a nonprofit organization, other than a 
political organization as defined in 26 U.S.C. 527(e), through:
    (i) Solicitation of funds or sale of items; or
    (ii) Participation in the conduct of an event by an employee where 
any portion of the cost of attendance or participation may be taken as a 
charitable tax deduction by a person incurring that cost.
    (2) Participation in the conduct of an event means active and 
visible participation in the promotion, production, or presentation of 
the event and includes serving as honorary chairperson, sitting at a 
head table during the event, and standing in a reception line. The term 
does not include mere attendance at an event provided that, to the 
employee's knowledge, his attendance is not used by the nonprofit 
organization to promote the event. While the term generally includes any 
public speaking during the event, it does not include the delivery of an 
official speech as defined in paragraph (a)(3) of this section or any 
seating or other participation appropriate to the delivery of such a 
speech. Waiver of a fee for attendance at an event by a participant in 
the conduct of that event does not constitute a gift for purposes of 
subpart B of this part.

    Note: This section does not prohibit fundraising for a political 
party, candidate for partisan political office, or partisan political 
group. However, there are statutory restrictions that apply to political 
fundraising. For example, under the Hatch Act Reform Amendments of 1993, 
at 5 U.S.C. 7323(a), employees may not knowingly solicit, accept, or 
receive a political contribution from any person, except under limited 
circumstances. In addition, employees are prohibited by 18 U.S.C. 607 
from soliciting or receiving political contributions in Federal offices, 
and, except as permitted by the Hatch Act Reform Amendments, are 
prohibited by 18 U.S.C. 602 from knowingly soliciting political 
contributions from other employees.
    Example 1: The Secretary of Transportation has been asked to serve 
as master of ceremonies for an All-Star Gala. Tickets to the event cost 
$150 and are tax deductible as a charitable donation, with proceeds to 
be donated to a local hospital. By serving as master of ceremonies, the 
Secretary would be participating in fundraising.

    (3) Official speech means a speech given by an employee in his 
official capacity on a subject matter that relates to his official 
duties, provided that the employee's agency has determined that the 
event at which the speech is to be given provides an appropriate forum 
for the dissemination of the information to be presented and provided 
that the employee does not request donations or other support for the 
nonprofit organization. Subject matter relates to an employee's official 
duties if it focuses specifically on the employee's official duties, on 
the responsibilities, programs, or operations of the employee's agency 
as described in Sec. 2635.807(a)(2)(i)(E), or on matters of 
Administration policy on which the employee has been authorized to 
speak.

    Example 1: The Secretary of Labor is invited to speak at a banquet 
honoring a distinguished labor leader, the proceeds of which will 
benefit a nonprofit organization that assists homeless families. She 
devotes a major portion of her speech to the Administration's Points of 
Light initiative, an effort to encourage citizens to volunteer their 
time to help solve serious social problems. Because she is authorized to 
speak on Administration policy, her remarks at the banquet are an 
official speech. However, the Secretary would be engaged in fundraising 
if she were to conclude her official speech with a request for donations 
to the nonprofit organization.
    Example 2: A charitable organization is sponsoring a two-day tennis 
tournament at a country club in the Washington, DC area to raise funds 
for recreational programs for learning disabled children. The 
organization has invited the Secretary of Education to give a speech on 
federally funded special education programs at the awards dinner to be 
held at the conclusion of the tournament and

[[Page 591]]

a determination has been made that the dinner is an appropriate forum 
for the particular speech. The Secretary may speak at the dinner and, 
under Sec. 2635.204(g)(1), he may partake of the meal provided to him 
at the dinner.

    (4) Personally solicit means to request or otherwise encourage 
donations or other support either through person-to-person contact or 
through the use of one's name or identity in correspondence or by 
permitting its use by others. It does not include the solicitation of 
funds through the media or through either oral remarks, or the 
contemporaneous dispatch of like items of mass-produced correspondence, 
if such remarks or correspondence are addressed to a group consisting of 
many persons, unless it is known to the employee that the solicitation 
is targeted at subordinates or at persons who are prohibited sources 
within the meaning of Sec. 2635.203(d). It does not include behind-the-
scenes assistance in the solicitation of funds, such as drafting 
correspondence, stuffing envelopes, or accounting for contributions.

    Example 1: An employee of the Department of Energy who signs a 
letter soliciting funds for a local private school does not ``personally 
solicit'' funds when 500 copies of the letter, which makes no mention of 
his DOE position and title, are mailed to members of the local 
community, even though some individuals who are employed by Department 
of Energy contractors may receive the letter.

    (b) Fundraising in an official capacity. An employee may participate 
in fundraising in an official capacity if, in accordance with a statute, 
Executive order, regulation or otherwise as determined by the agency, he 
is authorized to engage in the fundraising activity as part of his 
official duties. When authorized to participate in an official capacity, 
an employee may use his official title, position and authority.

    Example 1: Because participation in his official capacity is 
authorized under part 950 of this title, the Secretary of the Army may 
sign a memorandum to all Army personnel encouraging them to donate to 
the Combined Federal Campaign.

    (c) Fundraising in a personal capacity. An employee may engage in 
fundraising in his personal capacity provided that he does not:
    (1) Personally solicit funds or other support from a subordinate or 
from any person:
    (i) Known to the employee, if the employee is other than a special 
Government employee, to be a prohibited source within the meaning of 
Sec. 2635.203(d); or
    (ii) Known to the employee, if the employee is a special Government 
employee, to be a prohibited source within the meaning of Sec. 
2635.203(d)(4) that is a person whose interests may be substantially 
affected by performance or nonperformance of his official duties;
    (2) Use or permit the use of his official title, position or any 
authority associated with his public office to further the fundraising 
effort, except that an employee who is ordinarily addressed using a 
general term of address, such ``The Honorable,'' or a rank, such as a 
military or ambassadorial rank, may use or permit the use of that term 
of address or rank for such purposes; or
    (3) Engage in any action that would otherwise violate this part.

    Example 1: A nonprofit organization is sponsoring a golf tournament 
to raise funds for underprivileged children. The Secretary of the Navy 
may not enter the tournament with the understanding that the 
organization intends to attract participants by offering other entrants 
the opportunity, in exchange for a donation in the form of an entry fee, 
to spend the day playing 18 holes of golf in a foursome with the 
Secretary of the Navy.
    Example 2: An employee of the Merit Systems Protection Board may not 
use the agency's photocopier to reproduce fundraising literature for her 
son's private school. Such use of the photocopier would violate the 
standards at Sec. 2635.704 regarding use of Government property.
    Example 3: An Assistant Attorney General may not sign a letter 
soliciting funds for a homeless shelter as ``John Doe, Assistant 
Attorney General.'' He also may not sign a letter with just his 
signature, ``John Doe,'' soliciting funds from a prohibited source, 
unless the letter is one of many identical, mass-produced letters 
addressed to a large group where the solicitation is not known to him to 
be targeted at persons who are either prohibited sources or 
subordinates.

[57 FR 35041, Aug. 7, 1992; 57 FR 48557, Oct. 27, 1992; 61 FR 50691, 
Sept. 27, 1996]

[[Page 592]]



Sec. 2635.809  Just financial obligations.

    Employees shall satisfy in good faith their obligations as citizens, 
including all just financial obligations, especially those such as 
Federal, State, or local taxes that are imposed by law. For purposes of 
this section, a just financial obligation includes any financial 
obligation acknowledged by the employee or reduced to judgment by a 
court. In good faith means an honest intention to fulfill any just 
financial obligation in a timely manner. In the event of a dispute 
between an employee and an alleged creditor, this section does not 
require an agency to determine the validity or amount of the disputed 
debt or to collect a debt on the alleged creditor's behalf.



                 Subpart I_Related Statutory Authorities



Sec. 2635.901  General.

    In addition to the standards of ethical conduct set forth in 
subparts A through H of this part, there are a number of statutes that 
establish standards to which an employee's conduct must conform. The 
list set forth in Sec. 2635.902 references some of the more significant 
of those statutes. It is not comprehensive and includes only references 
to statutes of general applicability. While it includes references to 
several of the basic conflict of interest statutes whose standards are 
explained in more detail throughout this part, it does not include 
references to statutes of more limited applicability, such as statutes 
that apply only to officers and employees of the Department of Defense.



Sec. 2635.902  Related statutes.

    (a) The prohibition against solicitation or receipt of bribes (18 
U.S.C. 201(b)).
    (b) The prohibition against solicitation or receipt of illegal 
gratuities (18 U.S.C. 201(c)).
    (c) The prohibition against seeking or receiving compensation for 
certain representational services before the Government (18 U.S.C. 203).
    (d) The prohibition against assisting in the prosecution of claims 
against the Government or acting as agent or attorney before the 
Government (18 U.S.C. 205).
    (e) The post-employment restrictions applicable to former employees 
(18 U.S.C. 207, with implementing regulations at parts 2637 and 2641 of 
this chapter).
    (f) The prohibition on certain former agency officials' acceptance 
of compensation from a contractor (41 U.S.C. 423(d)).
    (g) The prohibition against participating in matters affecting an 
employee's own financial interests or the financial interests of other 
specified persons or organizations (18 U.S.C. 208).
    (h) The actions required of certain agency officials when they 
contact, or are contacted by, offerors or bidders regarding non-Federal 
employment (41 U.S.C. 423(c)).
    (i) The prohibition against receiving salary or any contribution to 
or supplementation of salary as compensation for Government service from 
a source other than the United States (18 U.S.C. 209).
    (j) The prohibition against gifts to superiors (5 U.S.C. 7351).
    (k) The prohibition against solicitation or receipt of gifts from 
specified prohibited sources (5 U.S.C. 7353).
    (l) The prohibition against fraudulent access and related activity 
in connection with computers (18 U.S.C. 1030).
    (m) The provisions governing receipt and disposition of foreign 
gifts and decorations (5 U.S.C. 7342).
    (n) [Reserved]
    (o) The prohibitions against certain political activities (5 U.S.C. 
7321 through 7326 and 18 U.S.C. 602, 603, 606 and 607).
    (p) The prohibitions against disloyalty and striking (5 U.S.C. 7311 
and 18 U.S.C. 1918).
    (q) The general prohibition (18 U.S.C. 219) against acting as the 
agent of a foreign principal required to register under the Foreign 
Agents Registration Act (22 U.S.C. 611 through 621).
    (r) The prohibition against employment of a person convicted of 
participating in or promoting a riot or civil disorder (5 U.S.C. 7313).
    (s) The prohibition against employment of an individual who 
habitually uses intoxicating beverages to excess (5 U.S.C. 7352).

[[Page 593]]

    (t) The prohibition against misuse of a Government vehicle (31 
U.S.C. 1344).
    (u) The prohibition against misuse of the franking privilege (18 
U.S.C. 1719).
    (v) The prohibition against fraud or false statements in a 
Government matter (18 U.S.C. 1001).
    (w) The prohibition against concealing, mutilating or destroying a 
public record (18 U.S.C. 2071).
    (x) The prohibition against counterfeiting or forging transportation 
requests (18 U.S.C. 508).
    (y) The restrictions on disclosure of certain sensitive Government 
information under the Freedom of Information Act and the Privacy Act (5 
U.S.C. 552 and 552a).
    (z) The prohibitions against disclosure of classified information 
(18 U.S.C. 798 and 50 U.S.C. 783(a)).
    (aa) The prohibition against disclosure of proprietary information 
and certain other information of a confidential nature (18 U.S.C. 1905).
    (bb) The prohibitions on disclosing and obtaining certain 
procurement information (41 U.S.C. 423(a) and (b)).
    (cc) The prohibition against unauthorized use of documents relating 
to claims from or by the Government (18 U.S.C. 285).
    (dd) The prohibition against certain personnel practices (5 U.S.C. 
2302).
    (ee) The prohibition against interference with civil service 
examinations (18 U.S.C. 1917).
    (ff) The restrictions on use of public funds for lobbying (18 U.S.C. 
1913).
    (gg) The prohibition against participation in the appointment or 
promotion of relatives (5 U.S.C. 3110).
    (hh) The prohibition against solicitation or acceptance of anything 
of value to obtain public office for another (18 U.S.C. 211).
    (ii) The prohibition against conspiracy to commit an offense against 
or to defraud the United States (18 U.S.C. 371).
    (jj) The prohibition against embezzlement or conversion of 
Government money or property (18 U.S.C. 641).
    (kk) The prohibition against failing to account for public money (18 
U.S.C. 643).
    (ll) The prohibition against embezzlement of the money or property 
of another person that is in the possession of an employee by reason of 
his employment (18 U.S.C. 654).

[57 FR 35042, Aug. 7, 1992, as amended at 62 FR 48748, Sept. 17, 1997; 
64 FR 2422, Jan. 14, 1999; 65 FR 69657, Nov. 20, 2000]



PART 2636_LIMITATIONS ON OUTSIDE EARNED INCOME, EMPLOYMENT AND AFFILIATIONS 

FOR CERTAIN NONCAREER EMPLOYEES--Table of Contents




                      Subpart A_General Provisions

Sec.
2636.101 Purpose.
2636.102 Definitions.
2636.103 Advisory opinions.
2636.104 Civil, disciplinary and other action.

Subpart B [Reserved]

     Subpart C_Outside Earned Income Limitation and Employment and 
   Affiliation Restrictions Applicable to Certain Noncareer Employees

2636.301 General standards.
2636.302 Relationship to other laws and regulations.
2636.303 Definitions.
2636.304 The 15 percent limitation on outside earned income.
2636.305 Compensation and other restrictions relating to professions 
          involving a fiduciary relationship.
2636.306 Compensation restriction applicable to service as an officer or 
          member of a board.
2636.307 Requirement for advance authorization to engage in teaching for 
          compensation.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); Pub. L. 
101-410, 104 Stat. 890, 28 U.S.C. 2461 note (Federal Civil Penalties 
Inflation Adjustment Act of 1990), as amended by Sec. 31001, Pub. L. 
104-134, 110 Stat. 1321 (Debt Collection Improvement Act of 1996); E.O. 
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    Source: 56 FR 1723, Jan. 17, 1991, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2636.101  Purpose.

    This part is issued under authority of title VI of the Ethics Reform 
Act of 1989 (Pub. L. 101-194, as amended), to implement the 15 percent 
outside earned income limitation at 5 U.S.C.

[[Page 594]]

app. 501(a) and the limitations at 5 U.S.C. app. 502 on outside 
employment and affiliations, which are applicable to certain noncareer 
employees.

[63 FR 43068, Aug. 12, 1998]



Sec. 2636.102  Definitions.

    The definitions listed below are of general applicability to this 
part. Additional definitions of narrower applicability appear in the 
subparts or sections of subparts to which they apply. For purposes of 
this part:
    (a) Agency ethics official refers to the designated agency ethics 
official and to any deputy ethics official described in Sec. 2638.204 
of this subchapter to whom authority to issue advisory opinions under 
Sec. 2636.103 of this part has been delegated by the designated agency 
ethics official.
    (b) Designated agency ethics official refers to the official 
described in Sec. 2638.201 of this subchapter.
    (c) Employee means any officer or employee of the executive branch, 
other than a special Government employee as defined in 18 U.S.C. 202. It 
includes officers but not enlisted members of the uniformed services as 
defined in 5 U.S.C. 2101(3). It does not include the President or Vice 
President.
    (d) Executive branch includes each executive agency as defined in 5 
U.S.C. 105 and any other entity or administrative unit in the executive 
branch. However, it does not include any agency that is defined by 5 
U.S.C. app. 109(11) as within the legislative branch.
    (e) The terms he, his, and him include ``she,'' ``hers'' and 
``her.''

[56 FR 1723, Jan. 17, 1991, as amended at 63 FR 43068, Aug. 12, 1998]



Sec. 2636.103  Advisory opinions.

    (a) Request for an advisory opinion. (1) An employee may request an 
advisory opinion from an agency ethics official as to whether specific 
conduct which has not yet occurred would violate any provision contained 
in this part.
    (2) An advisory opinion may not be obtained for the purpose of 
establishing:
    (i) Whether a particular entity qualifies as a charitable 
organization to which a payment in lieu of honoraria may be excluded 
from the definition of outside earned income and compensation under 
Sec. 2636.303(b)(7) of this part; or
    (ii) Whether a noncareer employee who is subject to the restrictions 
in subpart C of this part may receive compensation for teaching. An 
advisory opinion issued under this section may not be substituted for 
the advance written approval required by Sec. 2636.307 of this part.
    (3) The employee's request for an advisory opinion shall be 
submitted in writing, shall be dated and signed, and shall include all 
information reasonably available to the employee that is relevant to the 
inquiry. Where, in the opinion of the agency ethics official, complete 
information has not been provided, that official may request the 
employee to furnish additional information necessary to issue an 
opinion.
    (b) Issuance of advisory opinion. As soon as practicable after 
receipt of all necessary information, the agency ethics official shall 
issue a written opinion as to whether the conduct in issue would violate 
any provision contained in this part. Where conduct which would not 
violate this part would violate another statute relating to conflicts of 
interest or applicable standards of conduct, the advisory opinion shall 
so state and shall caution the employee against engaging in the conduct.
    (1) For the purpose of issuing an advisory opinion, the agency 
ethics official may request additional information from agency sources, 
including the requesting employee's supervisor, and may rely upon the 
accuracy of information furnished by the requester or any agency source 
unless he has reason to believe that the information is fraudulent, 
misleading or otherwise incorrect.
    (2) A copy of the request and advisory opinion shall be retained for 
a period of 6 years.
    (c) Good faith reliance on an advisory opinion. An employee who 
engages in conduct in good faith reliance upon an advisory opinion 
issued to him under this section shall not be subject to civil or 
disciplinary action for having violated this part. Where an employee 
engages in conduct in good faith reliance upon an advisory opinion 
issued by an

[[Page 595]]

ethics official of his agency to another, neither the Office of 
Government Ethics nor the employing agency shall initiate civil or 
disciplinary action under this part for conduct that is 
indistinguishable in all material aspects from the conduct described in 
the advisory opinion. However, an advisory opinion issued under this 
section shall not insulate the employee from other civil or disciplinary 
action if his conduct violates any other laws, rule, regulation or 
lawful management policy or directive. Where an employee has actual 
knowledge or reason to believe that the opinion is based on fraudulent, 
misleading, or otherwise incorrect information, the employee's reliance 
on the opinion will not be deemed to be in good faith.
    (d) Revision of an ethics opinion. Nothing in this section prohibits 
an agency ethics official from revising an ethics opinion on a 
prospective basis where he determines that the ethics opinion previously 
issued is incorrect, either as a matter of law or because it is based on 
erroneous information.

[56 FR 1723, Jan. 17, 1991, as amended at 63 FR 43068, Aug. 12, 1998]



Sec. 2636.104  Civil, disciplinary and other action.

    (a) Civil action. Except when the employee engages in conduct in 
good faith reliance upon an advisory opinion issued under Sec. 2636.103 
of this subpart, an employee who engages in any conduct in violation of 
the prohibitions, limitations and restrictions contained in this part 
may be subject to civil action under 5 U.S.C. app. 504(a) and a civil 
monetary penalty of not more than $10,000 for any such violation 
occurring before September 29, 1999, as adjusted effective September 29, 
1999 to $11,000 for any such violation occurring on or after that date, 
in accordance with the inflation adjustment procedures prescribed in the 
Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, or 
the amount of the compensation the individual received for the 
prohibited conduct, whichever is greater.
    (b) Disciplinary and corrective action. An agency may initiate 
disciplinary or corrective action against an employee who violates any 
provision of this part, which may be in addition to any civil penalty 
prescribed by law. When an employee engages in conduct in good faith 
reliance upon an advisory opinion issued under Sec. 2636.103 of this 
subpart, an agency may not initiate disciplinary or corrective action 
for violation of this part. Disciplinary action includes reprimand, 
suspension, demotion and removal. Corrective action includes any action 
necessary to remedy a past violation or prevent a continuing violation 
of this part, including but not limited to restitution or termination of 
an activity. It is the responsibility of the employing agency to 
initiate disciplinary or corrective action in appropriate cases. 
However, the Director of the Office of Government Ethics may order 
corrective action or recommend disciplinary action under the procedures 
at part 2638 of this subchapter. The imposition of disciplinary action 
is at the discretion of the employing agency.

[56 FR 1723, Jan. 17, 1991, as amended at 63 FR 43068, Aug. 12, 1998; 64 
FR 47097, Aug. 30, 1999]

Subpart B [Reserved]



     Subpart C_Outside Earned Income Limitation and Employment and 
   Affiliation Restrictions Applicable to Certain Noncareer Employees



Sec. 2636.301  General standards.

    A covered noncareer employee shall not:
    (a) Receive outside earned income in excess of the 15 percent 
limitation described in Sec. 2636.304 of this subpart;
    (b) Receive compensation or allow the use of his name in violation 
of the restrictions relating to professions involving a fiduciary 
relationship described in Sec. 2636.305 of this subpart;
    (c) Receive compensation for serving as an officer or board member 
in violation of the restriction described in Sec. 2636.306 of this 
subpart; or
    (d) Receive compensation for teaching without having first obtained 
advance authorization as required by Sec. 2636.307 of this subpart.

[[Page 596]]



Sec. 2636.302  Relationship to other laws and regulations.

    The limitations and restrictions contained in this section are in 
addition to any limitations and restrictions imposed upon an employee by 
applicable standards of conduct or by reason of any statute or 
regulation relating to conflicts of interest. Even though conduct or the 
receipt of compensation is not prohibited by this subpart, an employee 
should accept compensation or engage in the activity for which 
compensation is offered only after determining that it is otherwise 
permissible. In particular, a covered noncareer employee should accept 
compensation only after determining that its receipt does not violate 
section 102 of Executive Order 12674, as amended, which prohibits a 
covered noncareer employee who is also a Presidential appointee to a 
full-time noncareer position from receiving any outside earned income 
for outside employment or for any other activity performed during that 
Presidential appointment.

[56 FR 1723, Jan. 17, 1991, as amended at 63 FR 43069, Aug. 12, 1998]



Sec. 2636.303  Definitions.

    For purposes of this section:
    (a) Covered noncareer employee means an employee, other than a 
Special Government employee as defined in 18 U.S.C. 202, who occupies a 
position classified above GS-15 of the General Schedule or, in the case 
of positions not under the General Schedule, for which the rate of basic 
pay is equal to or greater than 120 percent of the minimum rate of basic 
pay payable for GS-15 of the General Schedule, and who is:
    (1) Appointed by the President to a position described in the 
Executive Schedule, 5 U.S.C. 5312 through 5317, or to a position that, 
by statute or as a matter of practice, is filled by Presidential 
appointment, other than:
    (i) A position within the uniformed services; or
    (ii) A position within the foreign service below the level of 
Assistant Secretary or Chief of Mission;
    (2) A noncareer member of the Senior Executive Service or of another 
SES-type system, such as the Senior Foreign Service;
    (3) Appointed to a Schedule C position or to a position under an 
agency-specific statute that establishes appointment criteria 
essentially the same as those set forth in Sec. 213.3301 of this title 
for Schedule C positions; or
    (4) Appointed to a noncareer executive assignment position or to a 
position under an agency-specific statute that establishes appointment 
criteria essentially the same as those for noncareer executive 
assignment positions.

For purposes of applying this definition to an individual who holds a 
General Schedule or other position that provides several rates of pay or 
steps per grade, his rate of basic pay shall be the rate of pay for the 
lowest step of the grade at which he is employed.

    Example 1. A Schedule C appointee to a position with the United 
States Information Agency who holds a GS-15 position and who is 
compensated at the rate for GS-15, Step 9 is not a covered noncareer 
employee even though the pay he receives in a calendar year exceeds the 
annual pay for a position above GS-15. Notwithstanding that he is 
compensated at Step 9, the basic rate of pay for the GS-15 position he 
holds is the rate in effect for GS-15, Step 1 of the General Schedule, 
which is lower than the rate for a position above GS-15.
    Example 2. An employee of the Environmental Protection Agency who 
has been a career GS-15 employee for 10 years and who is offered a non-
career SES position with the Federal Aviation Administration will, if he 
accepts the offer, become a covered noncareer employee by reason of that 
appointment, regardless of his former status.
    Example 3. A Department of Justice employee who holds a Schedule A 
appointment is not a covered noncareer employee even though he does not 
have competitive status within the meaning of Sec. 212.301 of this 
title.

    (b) Outside earned income and compensation both mean wages, 
salaries, honoraria, commissions, professional fees and any other form 
of compensation for services other than salary, benefits and allowances 
paid by the United States Government. Neither term includes:
    (1) Items that may be accepted under applicable standards of conduct 
gift regulations if they were offered by a prohibited source;
    (2) Income attributable to service with the military reserves or 
national guard;

[[Page 597]]

    (3) Income from pensions and other continuing benefits attributable 
to previous employment or services;
    (4) Income from investment activities where the individual's 
services are not a material factor in the production of income;
    (5) Copyright royalties, fees, and their functional equivalent, from 
the use or sale of copyright, patent and similar forms of intellectual 
property rights, when received from established users or purchasers of 
those rights;
    (6) Actual and necessary expenses incurred by the employee in 
connection with an outside activity. Where such expenses are paid or 
reimbursed by another person, the amount of any such payment shall not 
be counted as compensation or outside earned income. Where such expenses 
are not paid or reimbursed, the amount of compensation or earned income 
shall be determined by subtracting the actual and necessary expenses 
incurred by the employee from any payment received for the activity;
    (7) Payments to charitable organizations in lieu of honoraria, as 
described in 5 U.S.C. app. 501(c) and app. 505; or
    (8) Compensation for:
    (i) Services rendered prior to January 1, 1991, or prior to becoming 
a covered noncareer employee;
    (ii) Services rendered in satisfaction of a covered noncareer 
employee's obligation under a contract entered into prior to January 1, 
1991; or
    (iii) Services which the covered noncareer employee first undertook 
to provide prior to January 1, 1991, where the standards of the 
applicable profession require the employee to complete the case or other 
undertaking.

    Example 1. A covered noncareer employee is a limited partner in a 
partnership that invests in commercial real estate. Because he does not 
take an active role in the management of the partnership, his share of 
the partnership income is neither ``outside earned income'' nor 
``compensation.''
    Example 2. A covered noncareer employee of the Civil Rights 
Commission serves without compensation as a member of the Board of 
Visitors for a university. The roundtrip airfare and hotel expenses paid 
by the university to permit him to attend quarterly meetings of the 
Board are neither ``outside earned income'' or ``compensation.''
    Example 3. Where a covered noncareer employee pays for transcripts 
of a hearing in which he is providing pro bono legal representation, 
reimbursements for those expenses by a legal aid organization are 
neither ``outside earned income'' nor ``compensation.''
    Example 4. During the term of his appointment, a Deputy Assistant 
Secretary of Labor enters into a contract to write a book of fictional 
short stories. Royalties based on actual sales of the book after 
publication are investment income attributable to the property interest 
he retains in the book and, as such, are neither ``outside earned 
income'' nor ``compensation.''

    (c) Receive means that the employee has the right to exercise 
dominion and control over the compensation or outside earned income and 
direct its subsequent use. Compensation or outside earned income is 
received by an employee if it is for his conduct and:
    (1) If it is paid to any other person on the basis of designation, 
recommendation or other specification by the employee; or
    (2) If, with the employee's knowledge and acquiescence, it is paid 
to his parent, sibling, spouse, child or dependent relative.


Compensation that is prohibited by Sec. 2636.305 through Sec. 2636.307 
of this subpart is received while an individual is an employee if it is 
for conduct by him that occurs while an employee, even though actual 
payment may be deferred until after Federal employment has terminated. 
Payments made to charitable organizations in lieu of honoraria under 5 
U.S.C. app. 501(c) are not compensation or outside earned income and 
thus are not received in violation of any of the limitations contained 
in his subpart. However, other compensation or outside earned income 
donated to a charitable organization is received by the employee.

[56 FR 1723, Jan. 17, 1991, as amended at 63 FR 43069, Aug. 12, 1998; 64 
FR 2422, Jan. 14, 1999]



Sec. 2636.304  The 15 percent limitation on outside earned income.

    (a) Limitation applicable to individuals who are covered noncareer 
employees on January 1 of any calendar year. A covered noncareer 
employee may not, in any calendar year, receive outside earned income 
attributable to that calendar year which exceeds 15 percent of the 
annual rate of basic pay for level II

[[Page 598]]

of the Executive Schedule under 5 U.S.C. 5313, as in effect on January 1 
of such calendar year. The effective date of a change in the rate for 
level II of the Executive Schedule shall be the date on which a new rate 
of basic pay for level II first becomes applicable to any level II 
position.

    Note: Notwithstanding the 15 percent limitation described in this 
section, a covered noncareer employee who is a Presidential appointee to 
a full-time noncareer position is prohibited by section 102 of Executive 
Order 12674, as amended, from receiving any outside earned income for 
outside employment or any other activity performed during that 
Presidential appointment.
    Example 1. Notwithstanding that the compensation he will receive 
would not exceed 15 percent of the rate for level II of the Executive 
Schedule, a covered noncareer employee of the Department of Energy may 
not receive any compensation for teaching a university course unless he 
first receives the authorization required by Sec. 2636.307 of this 
subpart.

    (b) Limitation applicable to individuals who become covered 
noncareer employees after January 1 of any calendar year. The outside 
earned income limitation that applies to an individual who becomes a 
covered noncareer employee during a calendar year shall be determined on 
a pro rata basis. His outside earned income while so employed in that 
calendar year shall not exceed 15 percent of the annual rate of basic 
pay for level II of the Executive Schedule in effect on January 1 of the 
calendar year divided by 365 and multiplied by the number of days during 
that calendar year that he holds the covered noncareer position.

    Example 1. A former college professor received an appointment to a 
noncareer Senior Executive Service position on November 1, 1991. The 
rate of basic pay in effect for Executive Level II on January 1, 1991 
was $125,100. For the 61 day period from November 1, 1991 through 
December 31, 1991, the amount of outside income he may earn is limited 
to $3,129. That amount is determined as follows:
    Step 1. The rate of basic pay for Executive Level II as in effect on 
January 1 of that year ($125,100) is divided by 365. That quotient is 
$342;
    Step 2. The dollar amount determined by Step 1 ($342) is then 
multiplied by the 61 days the employee held the covered noncareer 
position. That product is $20,862;
    Step 3. The dollar amount determined by Step 2 ($20,862) is 
multiplied by .15 or 15 percent. The product ($3,129) is the maximum 
outside earned income the employee may have in the particular year 
attributable to the period of his service in a covered noncareer 
position.

    (c) Computation principle. For purposes of any computation required 
by this section, any amount of $.50 or more shall be rounded up to the 
next full dollar and any amount less than $.50 shall be rounded down to 
the next full dollar.
    (d) Year to which outside earned income is attributable. Regardless 
of when it is paid, outside earned income is attributable to the 
calendar year in which the services for which it is paid were provided.



Sec. 2636.305  Compensation and other restrictions relating to professions 

involving a fiduciary relationship.

    (a) Applicable restrictions. A covered noncareer employee shall not:
    (1) Receive compensation for:
    (i) Practicing a profession which involves a fiduciary relationship; 
or
    (ii) Affiliating with or being employed to perform professional 
duties by a firm, partnership, association, corporation, or other entity 
which provides professional services involving a fiduciary relationship; 
or
    (2) Permit his name to be used by any firm, partnership, 
association, corporation, or other entity which provides professional 
services involving a fiduciary relationship.

    Example 1. A covered noncareer employee of the White House Office 
who is an attorney may not receive compensation for drafting a will for 
her friend. She may, however, participate in her bar association's pro 
bono program by providing free legal services for the elderly, provided 
her participation in the program is otherwise proper. For example, 18 
U.S.C. 205 would prohibit her from representing her pro bono client in a 
hearing before the Social Security Administration.
    Example 2. An accountant named C.B. Debit who is offered a covered 
noncareer appointment must terminate his partnership in the accounting 
firm of Delight, Waterhose and Debit upon appointment. Because his 
deceased father, J.R. Debit, was the founding partner for whom the firm 
is named, the name Debit need not be deleted from the firm's name. 
However, the name C.B. Debit may not appear on the firm's letterhead 
after the individual enters on duty as a covered noncareer employee.


[[Page 599]]


    (b) Definitions. For purposes of this section:
    (1) Profession means a calling requiring specalized knowledge and 
often long and intensive preparation including instruction in skills and 
methods as well as in the scientific, historical or scholarly principles 
underlying such skills and methods. It is characteristic of a profession 
that those in the profession, through force of organization or concerted 
opinion, establish and maintain high standards of achievement and 
conduct, and commit its practitioners to continued study of the field. 
Consulting and advising with respect to subject matter that is generally 
regarded as the province of practitioners of a profession shall be 
considered a profession.
    (2) Profession which involves a fiduciary relationship means a 
profession in which the nature of the services provided causes the 
recipient of those services to place a substantial degree of trust and 
confidence in the integrity, fidelity and specialized knowledge of the 
practitioner. Such professions are not limited to those whose 
practitioners are legally defined as fiduciaries and include 
practitioners in such areas as law, insurance, medicine, architecture, 
financial services and accounting. A covered noncareer employee who is 
uncertain whether a particular field of endeavor is a profession which 
involves a fiduciary relationship may request an advisory opinion under 
Sec. 2636.103.

    Example 1. In view of the standards of the profession which require 
a licensed real estate broker to act in the best interests of his 
clients, the selling of real estate by a licensed broker involves the 
practice of a profession involving a fiduciary relationship.
    Example 2. A covered noncareer employee may receive the customary 
fee for serving as the executor of his mother's estate, provided he does 
not violate the applicable limitation on the amount of outside earned 
income he may receive. Although the executor of an estate has fiduciary 
obligations, serving as an executor in these circumstances does not 
involve the practice of a profession and, therefore, is not prohibited. 
He could not, however, serve for compensation as attorney for the 
estate.

[56 FR 1723, Jan. 17, 1991, as amended at 58 FR 69176, Dec. 30, 1993]



Sec. 2636.306  Compensation restriction applicable to service as an officer 

or member of a board.

    (a) Applicable restriction. A covered noncareer employee shall not 
receive compensation for serving as an officer or member of the board of 
any association, corporation or other entity. Nothing in this section 
prohibits uncompensated service with any entity.
    (b) Definition. For purposes of this section, the phrase 
``association, corporation or other entity'' is not limited to for-
profit entities, but includes nonprofit entities, such as charitable 
organizations and professional associations, as well as any unit of 
state or local government.

    Example 1. A covered noncareer employee of the Environmental 
Protection Agency may not serve with compensation on the board of 
directors of his sister's closely-held computer software corporation.
    Example 2. A covered noncareer employee of the Department of the 
Navy may serve without compensation as an officer of a charitable 
organization that operates a hospice.
    Example 3. A covered noncareer employee of the Coast Guard appointed 
to serve as a member of the board of education of the county in which 
she is a resident may not receive compensation for that service.



Sec. 2636.307  Requirement for advance authorization to engage in teaching 

for compensation.

    (a) Authorization requirement. A covered noncareer employee may 
receive compensation for teaching only when specifically authorized in 
advance by the designated agency ethics official.
    (b) Definition. For purposes of this section ``teaching'' means any 
activity that involves oral presentation or personal interaction, the 
primary function of which is to instruct or otherwise impart knowledge 
or skill. It is not limited to teaching that occurs in a formal setting, 
such as a classroom, but extends to instruction on an individual basis 
or in an informal setting.
    (c) Request for authorization. An employee may request authorization 
to engage in compensated teaching activities by forwarding a written 
request to the designated agency ethics official. The request shall 
describe the employee's official duties, the subject matter of the 
teaching activity, the entity sponsoring the course, and the student,

[[Page 600]]

class or audience to be taught. In addition, it shall set forth the 
terms of the compensation arrangement and identify the source of the 
payment. The request shall be accompanied by any contract or employment 
agreement and any literature describing, publicizing or otherwise 
promoting the class, classes or course.
    (d) Standard for authorization. Compensated teaching may be approved 
by the designated agency ethics official only when:
    (1) The teaching will not interfere with the performance of the 
employee's official duties or give rise to an appearance that the 
teaching opportunity was extended to the employee principally because of 
his official position;
    (2) The employee's receipt of compensation does not violate any of 
the limitations and prohibitions on honoraria, compensation or outside 
earned income contained in this part; and
    (3) Neither the teaching activity nor the employee's receipt of 
compensation therefor will violate applicable standards of conduct or 
any statute or regulation related to conflicts of interests.
    (e) Determination and authorization. The determination by the 
designated agency ethics official to grant or deny authorization to 
engage in teaching for compensation shall be in writing and shall be 
final. The authority of the designated agency ethics official to 
authorize compensated teaching may not be delegated to any person other 
than the alternate designated agency ethics official described in Sec. 
2638.202(b).



PART 2637_REGULATIONS CONCERNING POST EMPLOYMENT CONFLICT OF INTEREST--Table 

of Contents




                      Subpart A_General Provisions

Sec.
2637.101 Purpose and policy.
2637.102 Definitions.

                    Subpart B_Substantive Provisions

2637.201 Restrictions on any former Government employee's acting as 
          representative as to a particular matter in which the employee 
          personally and substantially participated.
2637.202 Two-year restriction on any former Government employee's acting 
          as representative as to a particular matter for which the 
          employee had official responsibility.
2637.203 Two-year restriction on a former senior employee's assisting in 
          representing as to a matter in which the employee participated 
          personally and substantially.
2637.204 One-year restriction on a former senior employee's transactions 
          with former agency on a particular matter, regardless of prior 
          involvement.
2637.205 Limitation of restrictions of 18 U.S.C. 207(c) to less than 
          that whole of a department or agency.
2637.206 Exemption for scientific and technological information.
2637.207 Exemption for persons with special qualification in a technical 
          discipline.
2637.208 Testimony and statements under oath or subject to penalty of 
          perjury.
2637.209 Partners of present or former Government employees.
2637.210 Officials of a State; officials of corporations created by an 
          Act of Congress and public international organizations.
2637.211 Standards and procedures for designating senior employee 
          positions pursuant to 18 U.S.C. 207(d).
2637.212 Administrative enforcement proceedings.
2637.213 Effective date of restrictions.
2637.214 Separate statutory agencies: Designations.
2637.215 Separate components of agencies or bureaus: Designations.
2637.216 ``Senior Employee'' designations.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 18 
U.S.C. 207 (1988).

    Source: 45 FR 7406, Feb. 1, 1980; 45 FR 9253, Feb. 12, 1980, unless 
otherwise noted. Redesignated at 54 FR 50231, Dec. 5, 1989.
    Note: The post-employment conflict of interest restrictions of 18 
U.S.C. 207 were substantially revised effective January 1, 1991, by the 
Ethics Reform Act of 1989, Pub. L. 101-194, 103 Stat. 1716, with 
technical amendments enacted by Pub. L. 101-280, 104 Stat. 149 (1990). 
The Office of Government Ethics has published substantive guidance for 
the executive branch concerning the amended version of 18 U.S.C. 207 in 
part 2641 of this subchapter. This part 2637 will continue to provide 
guidance concerning the previous version of section 207, which will 
continue to apply to individuals terminating Government service prior to 
January 1, 1991.

    Editorial Note: The following index of paragraphs is provided for 
the convenience of the reader:

                      Subpart A--General Provisions

Sec.
2637.101 Purpose and policy.
    (a) Authority.

[[Page 601]]

    (b) Consultation with the Attorney General.
    (c) Policy and limitations.
2637.102 Definitions.
    (a) Statutory definitions.
    (b) Interpretative definitions.

                    Subpart B--Substantive Provisions

2637.201 Restrictions on any former government employee's acting as 
          representative as to a particular matter in which the employee 
          personally and substantially participated.
    (a) 18 U.S.C. 207(a).
    (b) Representation.
    (1) Attorneys and agents.
    (2) Others.
    (3) Appearances; communications made with intent to influence.
    (4) Government visits to other premises.
    (5) Elements of ``influence'' and potential controversy required.
    (6) Assistance.
    (7) Project responses not included.
    (c) ``Particular matter involving a specific party or parties''.
    (1) Specific matters vs. policy matters.
    (2) Technical matters.
    (3) Relationship of personal participation to specificity.
    (4) The same particular matter must be involved.
    (5) United States must be a party or have an interest.
    (d) ``Participate personally and substantially''.
    (1) Basic requirements.
    (2) Participation on ancillary matters.
    (3) Role of official responsibility in determining substantial 
participation.
    (e) Agency responsibility in complex cases.
2637.202 Two-year restriction on any former government employee's acting 
          as representative as to a particular matter for which the 
          employee had official responsibility.
    (a) 18 U.S.C. 207(b)(i).
    (b) Official responsibility.
    (1) Definition.
    (2) Determining official responsibility.
    (3) Ancillary matters and official responsibility.
    (4) Knowledge of matter pending required.
    (5) Self-disqualification.
    (c) ``Actually pending.''
    (d) Other essential requirements.
    (e) Measurement of two-year restriction period.
2637.203 Two-year restriction on a former senior employee's assisting in 
          representing as to a matter in which the employee participated 
          personally and substantially.
    (a) 18 U.S.C. 207(b)(ii).
    (b) Limitation to ``representational'' assistance by ``personal 
presence'' at an appearance.
    (c) Managerial and other off-scene assistance.
    (d) Representational assistance.
    (e) Measurement of restriction period.
    (f) Other essential requirements.
    (g) General examples.
2637.204 One-year restriction on a former senior employee's transactions 
          with former agency on a particular matter, regardless of prior 
          involvement.
    (a) 18 U.S.C. 207(c).
    (b) Transactions exempted from 18 U.S.C. 207(c).
    (c) No prior involvement required.
    (d) Specific parties unnecessary.
    (e) Element of controversy or influence required.
    (f) Agency activity or interest in matter.
    (g) Application or proposals for funding of research.
    (h) Personal matters.
    (i) Statements based on special knowledge.
    (j) Measurement of one-year restriction period.
2637.205 Limitation of restrictions of 18 U.S.C. 207(c) to less than the 
          whole of a department or agency.
    (a) Authority.
    (b) Distinctions between 18 U.S.C. 207(e) and 207(d)(1)(C).
    (c) Separate Statutory Components.
    (1) Procedure.
    (2) Standards.
    (3) Effect of designation.
    (d) Separate nonstatutory components.
    (1) Procedure.
    (2) Standards.
    (3) Effect of determination.
2637.206 Exemption for scientific and technological information.
    (a) Exemption.
    (b) Necessary information.
    (c) Intent to influence.
    (d) Expert testimony.
    (e) Agency responsibility for procedures.
2637.207 Exemption for persons with special qualifications in a 
          technical discipline.
    (a) Applicability.
    (b) When appropriate.
    (c) Certification authority.
    (d) Agency registry.
2637.208 Testimony and statements under oath or subject to penalty of 
          perjury.
    (a) Statutory basis.
    (b) Applicability.
    (c) Statements under penalty of perjury.
2637.209 Partners of present or former government employees.
    (a) Scope.
    (b) Imputation.
2637.210 Officials of a state; officials of corporations created by an 
          act of Congress and public international organizations.
2637.211 Senior employee designations.
    (a) Definitions.
    (b) Designation procedures.
    (1) Positions at GS-17 and 18 level, SES and pay grades 0-7 and 0-8.
    (2) Standards for designation and exemption.

[[Page 602]]

    (3) Senior Executive Service.
    (4) ``Rate of pay''.
    (c) Differential designation.
    (d) Fair notice of designation.
    (e) ``Acting'' or temporary positions.
    (f) Special Government Employee.
    (g) Publication.
    (h) Computation of time.
    (i) Position Shifting.
    (j) Revocation of designations.
2637.212 Administrative enforcement proceedings.
    (a) Basic Procedures.
    (1) Delegation.
    (2) Initiation of administative disciplinary hearing.
    (3) Adequate notice.
    (4) Presiding official.
    (5) Time, date and place.
    (6) Hearing rights.
    (7) Burden of proof.
    (8) Hearing decision.
    (9) Administrative sanctions.
    (10) Judicial review.
    (11) Consultation and review.
2637.213 Effective date of restrictions.
    (a) Persons affected.
    (b) Fair notice of substantive changes.
2637.214 Separate statutory agencies: Designations.
2637.215 Separate components of agencies or bureaus: Designations.
2637.216 ``Senior Employee'' designations.



                      Subpart A_General Provisions



Sec. 2637.101  Purpose and policy.

    (a) Authority. Section 401(a) of the Ethics in Government Act of 
1978 (the ``Act''), as amended by Public Law 100-598 (Nov. 3, 1988), 
established the Office of Government Ethics (``OGE'') as a separate 
agency in the executive branch, effective October 1, 1989. (OGE was 
formerly a part of the Office of Personnel Management (``OPM'')). 
Sections 402 (a) and (b) of the Act, as amended, provide that the 
Director of the Office of Goverment Ethics (``the Director'') shall 
provide, in consultation with OPM, overall direction of executive branch 
policies related to preventing conflicts of interest on the part of 
officers and employees of any executive agency as defined in section 105 
of title 5, United State Code, and shall propose, in consultation with 
the Attorney General and OPM, rules and regulations to be promulgated by 
the President or by OGE pertaining to conflicts of interest and ethics 
in the executive branch. The purpose of this part is to issue 
regulations prepared by the Director which give content to the 
restrictions on post employment activity established by title V of the 
Act (18 U.S.C. 207) for administrative enforcement with respect to 
former officers and employees of the executive branch; generally to 
guide agencies in exercising the administrative enforcement authority 
reflected in section 18 U.S.C. 207(j); to set forth the procedures to be 
employed in making certain determinations and designations pursuant to 
the Act; and to provide guidance to individuals who must conform to the 
law. Criminal enforcement of the provisions of 18 U.S.C. 207 remains the 
exclusive responsibility of the Attorney General.
    (b) Consultation with the Attorney General. In proposing these 
regulations, the Director consulted with the Attorney General as to the 
content of regulations governing substantive prohibitions as well as 
other matters. The Attorney General has advised that such regulations 
are consistent with his opinion as to the interpretation of the Act.
    (c) Policy and limitations. These regulations bar certain acts by 
former Government employees which may reasonably give the appearance of 
making unfair use of prior Government employment and affiliations.
    (1) When a former Government employee who has been involved with a 
particular matter decides to act as the representative for another 
person on that matter, such ``switching of sides'' undermines confidence 
in the fairness of proceedings and creates the impression that personal 
influence, gained by Government affiliation, is decisive.
    (2) Similarly, when a former high-level employee assists in 
representing another by personal presence at an appearance before the 
Government regarding a matter which is in dispute, such assistance 
suggests an attempt to use personal influence and the possible unfair 
use of information unavailable to others. Different considerations are 
involved, however, with respect to assistance given as part of customary 
supervisory participation in a project funded by a Government contract 
or grant, since a former employee's knowledge may benefit the project 
and

[[Page 603]]

thus the Government, and regular communications with associates may 
properly be regarded as inherent in managerial responsibility. Such 
assistance, when not rendered by personal presence during an appearance, 
is not covered by the statute.
    (3) When a former Senior Employee returns to argue a particular 
matter to the employee's former agency in the period immediately 
following the termination of official employment, it appears that 
Government-based relationships are being used for private ends.
    (4) Former officers and employees may fairly be required to avoid 
such activities in the circumstances specified by statute and in these 
regulations.
    (5) The provisions of 18 U.S.C. 207 do not, however, bar any former 
Government employee, regardless of rank, from employment with any 
private or public employer after Government service. Nor do they 
effectively bar employment even on a particular matter in which the 
former Government employee had major official involvement except in 
certain circumstances involving persons engaged in professional 
advocacy. Former Government employees may be fully active in high-level 
supervisory positions whether or not the work is funded by the United 
States and includes matters in which the employee was involved while 
employed by the Government. The statutory provisions are not intended to 
discourage the movement of skilled professionals in Government, to and 
from positions in industry, research institutions, law and accounting 
firms, universities and other major sources of expertise. Such a flow of 
skills can promote efficiency and communication between the Government 
and private activities, and it is essential to the success of many 
Government programs. Instead, only certain acts which are detrimental to 
public confidence in the Government are prohibited.
    (6) Departments and agencies have primary responsibility for the 
administrative enforcement of the post employment restrictions found in 
the Act. The Department of Justice may initiate criminal enforcement in 
cases involving aggravated circumstances; agency heads are required to 
report substantiated allegations of violations of 18 U.S.C. 207 to the 
Department of Justice and the Director, OGE. It is essential that title 
V of the Act be enforced so as to advance its objectives, which include 
improvement in government efficiency, equal treatment for equal claims, 
greater public confidence in the integrity of their government, 
elimination of the use of public office for private gain, and securing 
the integrity of the government's policy-making processes. Departments 
and agencies should avoid enforcement actions that do not advance these 
objectives but instead frustrate the Government's ability to employ the 
skilled persons who are needed to make the programs of the Federal 
Government succeed. Special attention should be given to the need to 
preserve the free flow of expertise, especially in scientific, 
technological and other technical areas, from private activities to the 
government.
    (7) The examples contained in these regulations are intended to give 
guidance, but are illustrative, not comprehensive. Each agency may 
provide additional illustration and guidance in its own regulations, 
consistent with that contained herein, in order to address specific 
problems arising in the context of a particular agency's operations.
    (8) Agencies have the responsibility to provide assistance promptly 
to former Government employees who seek advice on specific problems. The 
Office of Government Ethics will provide advice, promptly, upon request, 
to designated agency ethics officials in such situations, but will first 
coordinate with the Department of Justice on unresolved or difficult 
issues.
    (9) These regulations do not supplant restrictions that may be 
contained in laws other than 18 U.S.C. 207 and do not incorporate 
restrictions contained in the code of conduct of a profession of which 
an employee may be a member.

[45 FR 7406, Feb. 1, 1980; 45 FR 9253, Feb. 12, 1980, as amended at 49 
FR 33118, Aug. 21, 1984; 50 FR 1203, Jan. 10, 1985. Redesignated at 54 
FR 50230, Dec. 5, 1989; 55 FR 27179, July 2, 1990; 55 FR 27933, July 6, 
1990]

[[Page 604]]



Sec. 2637.102  Definitions.

    (a) Statutory definitions. The following are defined terms which 
largely repeat portions of the text of the statute. They are set out 
here to permit a simplified presentation of statutory requirements in 
the regulations which follow. Other definitions, which supplement the 
statutory language, are listed in paragraph (b) of this section and are 
set forth in detail in the substantive regulations.
    (1) United States or Government means any department, agency, court, 
court-martial, or any civil, military or naval commission of the United 
States, the District of Columbia, or any officer or employee thereof.
    (2) Agency includes an Executive Department, a Government 
corporation and an independent establishment of the executive branch, 
which includes an independent commission. (See 18 U.S.C. 6.)
    (3) Government Employee includes any officer or employee of the 
Executive Branch (as defined in 18 U.S.C. 202 and, e.g., 5 U.S.C. 2104 
and 2105); those appointed or detailed under 5 U.S.C. 3374, and a 
Special Government Employee, but shall not include an individual 
performing services for the United States as an independent contractor 
under a personal service contract.
    (4) Former Government Employee means one who was, and is no longer, 
a Government employee.
    (5) Special Government Employee means an officer or employee of an 
agency who is retained, designated, appointed, or employed to perform, 
with or without compensation, for not to exceed 130 days during any 
period of three hundred and sixty five consecutive days, temporary 
duties either on a full time or intermittent basis (18 U.S.C. 202).
    (6) Senior Employee means an officer or employee named in, or 
designated by the Director pursuant to, section 207(d) of title 18 
U.S.C. to whom 207(b)(ii) and (c) shall apply (See Sec. 2637.211 of 
this part.)
    (7) Particular Government matter involving a specific party means 
any judicial or other proceeding, application, request for a ruling or 
other determination, contract, claim, controversy, investigation, 
charge, accusation, arrest or other particular matter involving a 
specific party or parties in which the United States is a party or has a 
direct and substantial interest.
    (b) Interpretative definitions. Other terms defined and interpreted 
in the substantive regulations are:
    (1) Acting as Agent or Attorney: (See Sec. 2637.201(b).)
    (2) Actually Pending: (See Sec. 2637.202(c).)
    (3) Communicating with Intent to Influence: (See Sec. 2637.201(b).)
    (4) Direct and Substantial Interest: (See Sec. 2637.204(f).)
    (5) Participate Personally and Substantially: (See Sec. 
2637.201(d).)
    (6) Particular Matter Involving a Specific Party or Parties: (See 
Sec. 2637.201(c).)
    (7) Particular Matter (without parties): (See Sec. 2637.204(d).)
    (8) Official Responsibility: (See Sec. 2637.202(b).)
    (9) Rate of Pay: (See Sec. 2637.211(b)(4).)



                    Subpart B_Substantive Provisions



Sec. 2637.201  Restrictions on any former Government employee's acting as 

representative as to a particular matter in which the employee personally and 

substantially participated.

    (a) Basic prohibition of 18 U.S.C. 207(a). No former Government 
employee, after terminating Government employment, shall knowingly act 
as agent or attorney for, or otherwise represent any other person in any 
formal or informal appearance before, or with the intent to influence, 
make any oral or written communication on behalf of any other person (1) 
to the United States, (2) in connection with any particular Government 
matter involving a specific party, (3) in which matter such employee 
participated personally and substantially as a Government employee.
    (b) Representation: Acting as agent or attorney, or other 
representative in an appearance, or communicating with intent to 
influence--(1) Attorneys and agents. The target of this provision is the 
former employee who participates in a particular matter while employed 
by the Government and later ``switches sides'' by representing another 
person on the same matter.


[[Page 605]]


    [Note: The examples in these regulations do not incorporate the 
special statutory restrictions on Senior Employees, except where the 
terms ``Senior Employee'' or ``Senior'' are expressly used.]
    Example 1: A lawyer in the Department of Justice personally works on 
an antitrust case involving Q Company. After leaving the Department, he 
is asked by Q Company to represent it in that case. He may not do so.

    (2) Others. The statutory prohibition covers any other former 
employee, including managerial and technical personnel, who represents 
another person in an appearance or, by other communication, attempts to 
influence the Government concerning a particular matter in which he or 
she was involved. For example, a former technical employee may not act 
as a manufacturer's promotional or contract representative to the 
Government on a particular matter in which he or she participated. Nor 
could such employee appear as an expert witness against the Government 
in connection with such a matter. (See Sec. 2637.208 for specific rules 
relating to expert witnesses.)
    (3) Appearances; communications made with intent to influence. An 
appearance occurs when an individual is physically present before the 
United States in either a formal or informal setting or conveys material 
to the United States in connection with a formal proceeding or 
application. A communication is broader than an appearance and includes 
for example, correspondence, or telephone calls.

    Example 1: An appearance occurs when a former employee meets with an 
agency employee personally to discuss a matter; or when he submits a 
brief in an agency administrative proceeding in his own name.
    Example 2: A former employee makes a telephone call to a present 
employee to discuss a particular matter that is not the subject of a 
formal proceeding. She has made a communication.

    (4) Government visits to others premises. Neither a prohibited 
appearance nor communication occurs when a former Government employee 
communicates with a Government employee who, at the instance of the 
United States, visits or is assigned to premises leased to, or owned or 
occupied by, a person other than the United States which are or may be 
used for performance under an actual or proposed contract or grant, when 
such communication concerns work performed or to be performed and occurs 
in the ordinary course of evaluation, administration, or performance of 
the actual or proposed contract or grant.
    (5) Elements of ``influence'' and potential controversy required. 
Communications which do not include an ``intent to influence'' are not 
prohibited. Moreover, acting as agent or attorney in connection with a 
routine request not involving a potential controversy is not prohibited. 
For example, the following are not prohibited: a question by an attorney 
as to the status of a particular matter; a request for publicly 
available documents; or a communication by a former employee, not in 
connection with an adversary proceeding, imparting purely factual 
information. (See also Sec. 2637.204(d) of this part.)

    Example 1: A Government employee, who participated in writing the 
specifications of a contract awarded to Q Company for the design of 
certain education testing programs, joins Q Company and does work under 
the contract. She is asked to accompany a company vice-president to a 
meeting to state the results of a series of trial tests, and does so. No 
violation occurs when she provides the information to her former agency. 
During the meeting a dispute arises as to some terms of the contract, 
and she is called upon to support Q Company's position. She may not do 
so. If she had reason to believe that the contractual dispute would be a 
subject of the meeting, she should not have attended.

    (6) Assistance. A former employee is not prohibited from providing 
in-house assistance in connection with the representation of another 
person.

    Example 1: A Government employee administered a particular contract 
for agricultural research with Q Company. Upon termination of her 
Government employment, she is hired by Q Company. She works on the 
matter covered by the contract, but has no direct contact with the 
Government. At the request of a company vice-president, she prepares a 
paper describing the persons at her former agency who should be 
contacted and what should be said to them in an effort in increase the 
scope of funding of the contract and to resolve favorably a dispute over 
a contract clause. She may do so.

    (7) Project responses not included. In a context not involving a 
potential controversy involving the United States no finding of a 
``intent to influence''

[[Page 606]]

shall be based upon whatever influential effect inheres in an attempt to 
formulate a meritorious proposal or program.

    Example 1: The employee of Q Company in the previous example is 
asked to design an educational testing program, which she does and 
transmits it to the Government. This is not prohibited despite the fact 
that her well-designed program may be inherently influential on a 
question of additional funding under the contract. She may not argue for 
its acceptance.

    (c) ``Particular matter involving a specific party or parties''--(1) 
Specific matters vs. policy matters. The prohibitions of subsections (a) 
and (b) of 18 U.S.C. 207, are based on the former Government employee's 
prior participation in or responsibility for a ``judicial or other 
proceeding, application, request for a ruling or other determination, 
contract, claim, controversy, investigation, charge, accusation, arrest, 
or other particular matter involving a specific party or parties'' in 
which the United States is a party or has a direct and substantial 
interest. Such a matter typically involves a specific proceeding 
affecting the legal rights of the parties or an isolatable transaction 
or related set of transactions between identifiable parties. Rulemaking, 
legislation, the formulation of general policy, standards or objectives, 
or other action of general application is not such a matter. Therefore, 
a former Government employee may represent another person in connection 
with a particular matter involving a specific party even if rules or 
policies which he or she had a role in establishing are involved in the 
proceeding.

    Example 1: A Government employee formulated the policy objectives of 
an energy conservation program. He is not restricted from later 
representing a university which seeks a grant or contract for work 
emerging from such a program.
    Example 2: A Government employee reviews and approves a specific 
city's application for Federal assistance for a renewal project. After 
leaving Government service, she may not represent the city in relation 
to that project.
    Example 3: An employee is regularly involved in the formulation of 
policy, procedures and regulations governing departmental procurement 
and acquisition functions. Participation in such activities does not 
restrict the employee after leaving the Government as to particular 
cases involving the application of such policies, procedures, or 
regulations.
    Example 4: An employee of the Office of Management and Budget 
participates substantially on the merits of a decision to reduce the 
funding level of a program, which has the effect of reducing the amount 
of money which certain cities receive to conduct youth work programs. 
After leaving the Government she may represent any of the cities in 
securing funds for its youth program, since her participation was in 
connection with a program, not a particular matter involving specific 
parties.
    Example 5: An agency attorney participates in drafting a standard 
form contract and certain ``standard terms and clauses'' for use in 
future contracts. He is not thereafter barred from representing a person 
in a dispute involving the application of such a ``standard term or 
clause'' in a particular contract in which he did not participate as a 
Government employee.

    (2) Technical matters. In connection with technical work, 
participation in projects generally involving one or more scientific or 
engineering concepts, in feasibility studies, or in proposed programs 
prior to the formulation of a contract will not restrict former 
Government employees with respect to a contract or specific programs 
entered into at a later date.

    Example 1: A Government employee participates significantly in 
formulating the ``mission need'' of a project pursuant to OMB Circular 
No. A-109, and the award of a contract to Z Company, the purpose of 
which is to propose alternative technical approaches. He is not barred, 
after leaving Government service, from representing Q Company which 
later seeks a contract to manufacture one of the systems suggested by 
the Z Company.
    Example 2: A Government employee, who has worked for years on the 
design of a new satellite communications system, joins C Company. Later, 
the Government issues a ``request for proposals'' (``rfp'') to construct 
the new system, which is circulated generally to industry. The employee 
proposes to act as C Company's representative in connection with its 
anticipated proposals for the contract. He may do so. The satellite 
contract became a particular matter when the rfp was being formulated; 
it would ordinarily not become one involving a specific party or parties 
until initial proposals or indications of interest therein by 
contractors were first received. Moreover, if the employee's work for C 
Company were limited to the formulation and communication of a proposal 
in response to the rfp, it would not be prohibited to the extent it 
involved a communication

[[Page 607]]

for the purpose of furnishing scientific or technological information to 
the Government, exempt under 18 U.S.C. 207(f). See Sec. 2637.206 below. 
(See paragraph (3) below as to a case where the employee's own 
participation may cause a different result.)

    (3) Relationship of personal participation to specificity. In 
certain cases, whether a matter should be treated as a ``particular 
matter involving specific parties'' may depend on the employee's own 
participation in events which give particularity and specificity to the 
matter in question. For example, if a Government employee (i) personally 
participated in that stage of the formulation of a proposed contract 
where significant requirements were discussed and one or more persons 
was identified to perform services thereunder and (ii) actively urged 
that such a contract be awarded, but the contract was actually awarded 
only after the employee left, the contract may nevertheless be a 
particular matter involving a specific party as to such former 
Government employee.

    Example 1: A Government employee advises her agency that it needs 
certain work done and meets with private firm X to discuss and develop 
requirements and operating procedures. Thereafter, the employee meets 
with agency officials and persuades them of the need for a project along 
the lines discussed with X. She leaves the Government and the project is 
awarded by other employees to firm X. The employee is asked by X to 
represent it on the contract. She may not do so.

    (4) The same particular matter must be involved. The requirement of 
a ``particular matter involving a specific party'' applies both at the 
time that the Government employee acts in an official capacity and at 
the time in question after Government service. The same particular 
matter may continue in another form or in part. In determining whether 
two particular matters are the same, the agency should consider the 
extent to which the matters involve the same basic facts, related 
issues, the same or related parties, time elapsed, the same confidential 
information, and the continuing existence of an important Federal 
interest.

    Example 1: A Government employee was substantially involved in the 
award of a long-term contract to Z Company for the development of 
alternative energy sources. Six years after he terminates Government 
employment, the contract is still in effect, but much of the technology 
has changed as have many of the personnel. The Government proposes to 
award a ``follow on'' contract, involving the same objective, after 
competitive bidding. The employee may represent Q Company in its 
proposals for the follow-on contract, since Q Company's proposed 
contract is a different matter from the contract with Z Company. He may 
also represent Z Company in its efforts to continue as contractor, if 
the agency determines on the basis of facts referred to above, that the 
new contract is significantly different in its particulars from the old. 
The former employee should first consult his agency and request a 
written determination before undertaking any representation in the 
matter.
    Example 2: A Government employee reviewed and approved certain 
wiretap applications. The prosecution of a person overheard during the 
wiretap, although not originally targeted, must be regarded as part of 
the same particular matter as the initial wiretap application. The 
reason is that the validity of the wiretap may be put in issue and many 
of the facts giving rise to the wiretap application would be involved. 
Other examples: See Sec. 2637.201(b)(1), Example 1, and (c), Example 2.

    (5) United States must be a party or have an interest. The 
particular matter must be one in which the United States is a party, 
such as in a judicial or administrative proceeding or a contract, or in 
which it has a direct and substantial interest. The importance of the 
Federal interest in a matter can play a role in determining whether two 
matters are the same particular matter.

    Example 1: An attorney participated in preparing the Government's 
antitrust action against Z Company. After leaving the Government, she 
may not represent Z Company in a private antitrust action brought 
against it by X Company on the same facts involved in the Government 
action. Nor may she represent X Company in that matter. The interest of 
the United States in preventing both inconsistent results and the 
appearance of impropriety in the same factual matter involving the same 
party, Z Company, is direct and substantial. However, if the 
Government's antitrust investigation or case is closed, the United 
States no longer has a direct and substantial interest in the case.
    Example 2: A member of a Government team providing technical 
assistance to a foreign country leaves and seeks to represent a private 
contractor in making arrangements with the Government to perform the 
same service. The proposed new contract may or may not be considered a 
separate matter, depending upon whether the United States has

[[Page 608]]

a national interest in maintaining the original contract. The agency 
involved must be consulted by the former employee before the 
representation can be undertaken.

    (d) ``Participate personally and substantially''--(1) Basic 
requirements. The restrictions of section 207(a) apply only to those 
matters in which a former Government employee had ``personal and 
substantial participation,'' exercised ``through decision, approval, 
disapproval, recommendation, the rendering of advice, investigation or 
otherwise.'' To participate ``personally'' means directly, and includes 
the participation of a subordinate when actually directed by the former 
Government employee in the matter. ``Substantially,'' means that the 
employee's involvement must be of significance to the matter, or form a 
basis for a reasonable appearance of such significance. It requires more 
than official responsibility, knowledge, perfunctory involvement, or 
involvement on an administrative or peripheral issue. A finding of 
substantiality should be based not only on the effort devoted to a 
matter, but on the importance of the effort. While a series of 
peripheral involvements may be insubstantial, the single act of 
approving or participation in a critical step may be substantial. It is 
essential that the participation be related to a ``particular matter 
involving a specific party.'' (See paragraph (c) of this section.) (See 
also Sec. 2637.203(f) of this part.)

    Example 1: If an officer personally approves the departmental 
budget, he does not participate substantially in the approval of all 
items contained in the budget. His participation is substantial only in 
those cases where a budget item is actually put in issue. Even then, the 
former Government employee is not disqualified with respect to an item 
if it is a general program rather than a particular matter involving a 
specific party. The former Government employee may, however, have 
official responsibility for such matters. (See Sec. 2637.202(b).)
    Example 2: A Government lawyer is not in charge of, nor has official 
responsibility for a particular case, but is frequently consulted as to 
filings, discovery, and strategy. Such an individual has personally and 
substantially participated in the matter.

    (2) Participation on ancillary matters. An employee's participation 
on subjects not directly involving the substantive merits of a matter 
may not be ``substantial,'' even if it is time-consuming. An employee 
whose responsibility is the review of a matter solely for compliance 
with administrative control or budgetary considerations and who reviews 
a particular matter for such a purpose should not be regarded as having 
participated substantially in the matter, except when such 
considerations also are the subject of the employee's proposed 
representation. (See Sec. 2637.202(b)(3) of this part.) Such an 
employee could theoretically cause a halt in a program for noncompliance 
with standards under his or her jurisdiction, but lacks authority to 
initiate a program or to disapprove it on the basis of its substance.
    (3) Role of official responsibility in determining substantial 
participation. ``Official responsibility'' is defined in Sec. 
2637.202(b)(1). ``Personal and substantial participation'' is different 
from ``official responsibility.'' One's responsibility may, however, 
play a role in determining the ``substantiality'' of an employee's 
participation. For example, ordinarily an employee's forbearance on a 
matter is not substantial participation. If, however, an employee is 
charged with responsibility for review of a matter and action cannot be 
undertaken over his or her objection, the result may be different. If 
the employee reviews a matter and passes it on, his or her participation 
may be regarded as ``substantial'' even if he or she claims merely to 
have engaged in inaction.
    (e) Agency responsibility in complex cases. In certain complex 
factual cases, the agency with which the former Government employee was 
associated is likely to be in the best position to make a determination 
as to certain issues, for example, the identity or existence of a 
particular matter. Designated agency ethics officials should provide 
advice promptly to former Government employees who make inquiry on any 
matter arising under these regulations.

[[Page 609]]



Sec. 2637.202  Two-year restriction on any former Government employee's 

acting as representative as to a particular matter for which the employee had 

official responsibility.

    (a) Basic prohibition of 18 U.S.C. 207(b)(i). No former Government 
employee, within two years after terminating employment by the United 
States, shall knowingly act as agent or attorney for, or otherwise 
represent any other person in any formal or informal appearance before, 
or with the intent to influence, make any oral or written communication 
on behalf of any other person (1) to the United States, (2) in 
connection with any particular Government matter involving a specific 
party (3) if such matter was actually pending under the employee's 
responsibility as an officer or employee within period of one year prior 
to the termination of such responsibility.
    (b) ``Official responsibility''--(1) Definition. ``Official 
responsibility'' is defined in 18 U.S.C. 202 as, ``the direct 
administrative or operating authority, whether intermediate or final, 
and either exercisable alone or with others, and either personally or 
through subordinates, to approve, disapprove, or otherwise direct 
Government actions.''
    (2) Determining official responsibility. Ordinarily, the scope of an 
employee's ``official responsibility'' is determined by those areas 
assigned by statute, regulation, Executive Order, job description or 
delegation of authority. All particular matters under consideration in 
an agency are under the ``official responsibility'' of the agency head, 
and each is under that of any intermediate supervisor having 
responsibility for an employee who actually participates in the matter 
within the scope of his or her duties.
    (3) Ancillary matters and official responsibility. 
``Administrative'' authority as used in the foregoing definition means 
authority for planning, organizing and controlling matters rather than 
authority to review or make decisions on ancillary aspects of a matter 
such as the regularity of budgeting procedures, public or community 
relations aspects, or equal employment opportunity considerations. 
Responsibility for such an ancillary consideration does not constitute 
responsibility for the particular matter, except when such a 
consideration is also the subject of the employee's proposed 
representation.

    Example 1: An agency's comptroller would not have official 
responsibility for all programs in the agency, even though she must 
review the budget, and all such programs are contained in the budget.
    Example 2: Within two years after terminating employment, an 
agency's former comptroller is asked to represent Q Company in a dispute 
arising under a contract which was in effect during the comptroller's 
tenure. The dispute concerns an accounting formula, under the contract, 
a matter as to which a subordinate division of the comptroller's office 
was consulted. She may not represent Q Company on this matter.

    (4) Knowledge of matter pending required. In order for a former 
employee to be barred from representing another as to a particular 
matter, he or she need not have known, while employed by the Government, 
that the matter was pending under his or her official responsibility. 
However, the former employee is not subject to the restriction unless at 
the time of the proposed representation of another, he or she knows or 
learns that the matter had been under his or her responsibility. 
Ordinarily, a former employee who is asked to represent another on a 
matter will become aware of facts sufficient to suggest the relationship 
of the prior matter to his or her former agency. If so, he or she is 
under a duty to make further inquiry, including direct contact with an 
agency's designated ethics official where the matter is in doubt.
    (5) Self-disqualification. A former employee cannot avoid the 
restrictions of this section on the ground by self-disqualification with 
respect to a matter for which he or she otherwise had official 
responsibility. However, self-disqualification is effective to eliminate 
the restriction of section 207(a).
    (c) ``Actually pending.'' ``Actually pending'' means that the matter 
was in fact referred to or under consideration by persons within the 
employee's area of responsibility, not that it merely could have been.

    Example 1: A staff lawyer in a department's Office of General 
Counsel is consulted by procurement officers on the correct resolution 
of a contractual matter involving Q

[[Page 610]]

Company. The lawyer renders an opinion resolving the question. The same 
legal question arises later in several contracts with other companies, 
but none of the disputes with such companies is referred to the Office 
of the General Counsel. The General Counsel has official responsibility 
for the determination of the Q Company matter. The other matters were 
never ``actually pending'' under that responsibility, although as a 
theoretical matter, such responsibility extended to all legal matters 
within the department.

    (d) Other essential requirements. All other requirements of the 
statute must be met before the restriction on representation applies. 
The same considerations apply in determining the existence of a 
``particular matter involving a specific party,'' a representation in an 
``appearance,'' or ``intent to influence,'' and so forth as set forth 
under Sec. 2637.201 of this part.

    Example 1: During her tenure as head of an agency, an officer's 
subordinates undertook major changes in agency enforcement standards 
involving occupational safety. Eighteen months after terminating 
Government employment, she is asked to represent Z Company which 
believes it is being unfairly treated under the enforcement program. The 
Z Company matter first arose on a complaint filed after the agency head 
terminated her employment. She may represent Z Company because the 
matter pending under her official responsibility was not one involving 
``a specific party.'' (Moreover, the time-period covered by 18 U.S.C. 
207(c) has elapsed.)

    (e) Measurement of two-year restriction period. The statutory two-
year period is measured from the date when the employee's responsibility 
in a particular area ends, not from the termination of Government 
service, unless the two occur simultaneously. The prohibition applies to 
all particular matters subject to such responsibility in the one-year 
period before termination of such responsibility.

    Example 1: The Director, Import/Export Division of A Agency retires 
after 26 years of service and enters private industry as a consultant. 
He will be restricted for two years with respect to all matters which 
were actually pending under his official responsibility in the year 
before his retirement.
    Example 2: An employee transfers from a position in A Agency to a 
position in B Agency, and she leaves B Agency for private employment 9 
months later. In 15 months she will be free of restriction insofar as 
matters which were pending under her responsibility in A Agency in the 
year before her transfer. She will be restricted for two years in 
respect of B Agency matters which were pending in the year before her 
departure for private employment.



Sec. 2637.203  Two-year restriction on a former senior employee's assisting 

in representing as to a matter in which the employee participated personally 

and substantially.

    (a) Basic prohibition of 18 U.S.C. 207(b)(ii). No former Senior 
Employee (see Sec. 2637.102(a)(6)), within two years after terminating 
employment by the United States, shall knowingly represent or aid, 
counsel, advise, consult, or assist in representing any other person by 
personal presence at any formal or informal appearance, (1) before the 
United States, (2) in connection with any particular Government matter 
involving a specific party, (3) in which matter he or she participated 
personally and substantially.
    (b) Limitation to ``representational'' assistance by ``personal 
presence'' at an appearance. Section 207(b)(ii) is limited to assistance 
``in representing'' another person by ``personal presence'' at an 
``appearance'' before the United States. Different in scope from 
sections 207(a) and 207(b)(i), it does not apply to assistance in 
connection with an oral or written communication made with an intent to 
influence which does not involve an appearance. Nor does it bar 
assistance in preparation for either a formal or informal personal 
appearance or an appearance by written submission in a formal proceeding 
where the former employee is not personally present before the 
Government or a Government employee. The provision is designed to 
prevent the former Senior Employee from playing any auxiliary role 
during a negotiation proceeding or similar transaction with the 
Government so that he or she does not appear to be lending personal 
influence to the resolution of a matter and cannot do so in fact.

    Example 1: A former Senior Employee makes suggestions as to the 
content of a letter to be sent to the Government on a matter in which he 
had participated. No violation occurs.

    (c) Managerial and other off-scene assistance. The statute does not 
prohibit a former Senior Employee's advice and assistance to his or her 
organization's

[[Page 611]]

representatives which does not involve his or her personal presence at 
an appearance before the Government. The former Senior Employee's 
preparation of documents to be presented in any formal or informal 
proceeding does not constitute personal presence at an appearance, even 
where submission of such a document might technically constitute an 
appearance.

    Example 1: A former Senior Employee attends a hearing on a matter in 
which she had participated personally and substantially while in the 
Government. She speaks with the representative of a private party during 
the hearing. A violation occurs if the former Senior Employee lends 
assistance to the representative in that conversation.
    Example 2: A Senior Justice Department lawyer personally works on an 
antitrust case against Z Company. After leaving the Department, she is 
asked to discuss legal strategy with lawyers representing Z Company on 
that same antitrust case, to write portions of a brief and to direct the 
research of the staff working on the case. Any such aid would not be 
prohibited by the statute, but would likely be prohibited by 
professional disciplinary rules.

    (d) Representational assistance. The statute seeks to prevent a 
former Senior Employee from making unfair use of his or her prior 
governmental position by prohibiting all forms of assistance in the 
representation of another when personally present at an appearance, 
including giving advice as to how the representation in an appearance 
should be conducted, supplying information, participating in drafting 
materials, or dealing with forensic or argumentative matters (such as 
testimony, methods of persuasion, or strategy of presentation).
    (e) Measurement of restriction period. The statutory two-year period 
is measured from the date of termination of employment in the Senior 
Employee position held by the former employee when he or she 
participated personally and substantially in the matter involved. (cf. 
Sec. 2637.202(e))
    (f) Other Essential Requirements. All conditions of the statutory 
prohibition must be met. Specifically, the former employee, (1) must 
have been a ``Senior Employee,'' (2) who ``participated personally and 
substantially'' (See Sec. 2637.201(d) of this part) in (3) a 
``particular matter involving a specific party.'' (See subpart Sec. 
2637.201(c) of this part.)
    (g) General Examples:

    Example 1: A Senior Federal Trade Commission Employee, an economist 
by profession, participates in an investigation involving X Company, and 
a proceeding is commenced against X Company based on the investigation. 
After leaving the Commission, he offers to serve as a consultant to the 
lawyers for X Company on certain economic matters involved in the 
proceeding. He attends the proceeding and at the close of each day, 
meets in the lawyers' office to advise them. Such conduct violates the 
statute.
    Example 2: A Senior Employee of the Department of the Treasury 
participates in a number of projects with universities and financial 
research institutions funded by Government grants. After leaving the 
Government, she becomes dean of a graduate school of business which 
performs work under a number of such grants. She may, in the discharge 
of her duties, supervise research and advise as to how funds under such 
a contract should be allocated, whether or not these matters are, as is 
likely, communicated to her former Department by the graduate school's 
representatives. (See Sec. 2637.204.)
    Example 3: A Senior Defense Department official participated 
personally and substantially in a contract award to F Company for 
fighter planes. After leaving the Department, the former official goes 
to work for F Company. Subsequently, F Company desires to renegotiate 
prices and a pension provision on the fighter plane contract, matters in 
which dispute is anticipated. The former official could not attend a 
meeting with Government employees at which such matters will be 
discussed and give assistance to those representing F Company in the 
negotiations. He could generally render advice as long as he remained 
absent from the negotiations.
    Example 4: A Senior Justice Department lawyer participated in an 
antitrust case against Q Company, which is represented by Y law firm. 
Immediately after leaving, the Department, she goes to work with Y law 
firm, and assists at a trial representing Q Company in a different 
antitrust case, not involving the allegations in the Government case. 
Such assistance would not be barred because it does not occur in 
connection with the same particular matter.
    Example 5: A Senior Employee of the Department of Health and Human 
Services leaves to take a university position. The former official's new 
duties include various HHS contracts which the university holds. Some of 
the contracts were awarded by a division within HHS which was under her 
official responsibility. She is not barred from assistance in 
negotiations with respect to such contracts, because the restriction 
applies

[[Page 612]]

only to those matters in which she had participated personally and 
substantially, not to those matters for which she had official 
responsibility. Note, however, that any participation by her as a 
representative would be barred by 18 U.S.C. 207(b)(i) as described in 
Sec. 2637.202 of this part. (But see Sec. 2637.204.)
    Example 6: A Senior scientist with the Food and Drug Administration 
was personally and substantially involved in a licensing proceeding 
concerning a specific drug. After leaving the FDA, he is employed by the 
manufacturer of the drug. There he engages in research, indicating that 
the drug is safe and effective, which his employer later presents to FDA 
in connection with the proceeding. He assists during this presentation. 
Such assistance would normally be restricted but may be allowed to the 
extent that the former official is furnishing scientific information to 
the Government. (See 18 U.S.C. 207(f) and Sec. 2637.206 of this part.)
    Example 7: A former Senior Employee of the Federal Communications 
Commission leaves the agency to join a graduate school faculty. In one 
of his courses, which from time to time includes Government employees, 
he discusses, unfavorably to the Commission, a specific licensing case 
in which he was personally and substantially involved. The restriction 
does not apply because the conduct does not occur in connection with any 
representational activities.



Sec. 2637.204  One-year restriction on a former senior employee's 

transactions with former agency on a particular matter, regardless of prior 

involvement.

    (a) Basic prohibition of 18 U.S.C. 207(c). For a period of one year 
after terminating employment by the United States, no former Senior 
Employee (other than a special Government employee who serves for fewer 
than sixty days in a calendar year) shall knowingly act as an agent or 
attorney for, or otherwise represent, anyone in any formal or informal 
appearance before, or with the intent to influence, make any written or 
oral communication on behalf of anyone to (1) his or her former 
department or agency, or any of its officers or employees, (2) in 
connection with any particular Government matter, whether or not 
involving a specific party, which is pending before such department or 
agency, or in which it has a direct and substantial interest.
    (b) Transactions exempted from the basic prohibition of 18 U.S.C. 
207(c). The prohibition set forth above shall not apply to an 
appearance, a communication, or representation by a former Senior 
Employee, who is:
    (1) An elected official of a State or local government, acting on 
behalf of such government, or
    (2) Whose principal occupation or employment is with (i) an agency 
or instrumentality of a State or local government, (ii) an accredited, 
degree-granting institution of higher education, as defined in section 
1201(a) of the Higher Education Act of 1965, or (iii) a hospital or 
medical research organization, exempted and defined under section 
501(c)(3) of the Internal Revenue Code of 1954, and the appearance, 
communication, or representation is on behalf of such government, 
institution, hospital or organization.

    Example 1: A former Senior Employee of the Federal Highway 
Administration is appointed to the position of Secretary of 
Transportation for the State of Kansas. He would not be prohibited from 
transacting business with his former agency concerning new matters on 
behalf of the State. He would, however, be restricted as to 207(a) and 
207(b) matters.
    Example 2: A former Senior Employee of the Department of Housing and 
Urban Development establishes a consulting firm and is engaged by the 
City of Los Angeles to aid it in procuring a particular grant. He may 
not represent Los Angeles before his former Department because his 
``principal occupation or employment'' is not with such city.
    Example 3: A former Senior Employee of the Department of Education 
founds a vocational school for the training of legal paraprofessionals 
and associated staff. He desires to communicate with officials at his 
former Department for the purpose of establishing a program of 
assistance to such institutions. He may not do so, since the vocational 
school is not an ``accredited, degree granting institution of higher 
education.''

    (c) No prior involvement required. The prohibition contained in this 
section applies without regard to whether the former Senior Employee had 
participated in, or had responsibility for, the particular matter and 
includes matters which first arise after the employee leaves Government 
service. The section aims at the possible use of personal influence 
based upon past Governmental affiliations to facilitate the transaction 
of business.
    (d) Specific parties unnecessary. The particular matter in which the 
former Senior Employee proposes to act before

[[Page 613]]

his or her former agency need not be one ``involving specific parties,'' 
and thus is not limited to disputed proceedings or contracts in which a 
party has already been identified. However, the restriction does not 
encompass every kind of matter, but only a particular one similar to 
those cited in the statutory language, i.e., any judicial or other 
proceeding, application, request for a ruling or determination, 
contract, claim, controversy, investigation, charge, accusation, or 
arrest. Rulemaking is specifically included. Thus such matters as the 
proposed adoption of a regulation or interpretive ruling, or an agency's 
determination to undertake a particular project or to open such a 
project to competitive bidding are covered. Not included are broad 
technical areas and policy issues and conceptual work done before a 
program has become particularized into one or more specific projects. 
The particular matter must be pending before the agency or be one in 
which the agency has a ``direct and substantial interest.''

    Note: Each post employment activity in the examples in this section 
is assumed to take place within one year of termination of Government 
employment.
    Example 1: A Senior Employee of the Department of Health and Human 
Services leaves Government employment for private practice, and shortly 
thereafter telephones a former associate urging that the Department (a) 
adopt a new procedure to put a ceiling on hospital costs; (b) not adopt 
a particular rule proposed for drug testing; and (c) oppose a bill 
pending in Congress relating to such drug testing. He is prohibited from 
attempting to influence his former co-worker on any of these matters. 
The first, not yet pending, is of interest to the Department; the second 
is pending in the Department; and the third is pending elsewhere, and is 
of interest to the Department. Note that the former Senior Employee may, 
however, communicate the same views to Congress, other agencies, the 
public or the press.
    Example 2: A recently retired Senior Employee of the Department of 
Defense believes that the Department's general emphasis on manned 
aircraft is not in the national interest. After his departure, he may 
continue to argue the point to the Department.

    (e) Element of controversy or influence required. The prohibition on 
acting as a representative or attempting to influence applies to 
situations in which there is an appreciable element of actual or 
potential dispute or an application or submission to obtain Government 
rulings, benefits or approvals, and not to a situation merely involving, 
for example: the transmission or filing of a document that does not 
involve an application for Government benefit, approval or ruling; a 
request for information; purely social or informational communications; 
or those required by law or regulations (in situations other than 
adversary proceedings). Each agency should, after consulting with the 
Director or the Attorney General, as appropriate, give guidance on the 
kinds of applications, filings and other matters which are not 
prohibited by section 207(c).

    Example 1: A former Senior Employee of the Internal Revenue Service 
prepares and mails a client's tax return. This is not a prohibited act. 
Should any controversy arise in connection with the tax return, the 
former employee may not represent the client, but may be called upon to 
state how the return was prepared.
    Example 2: A former Senior Employee of the Securities and Exchange 
Commission prepared and transmitted for filing to the Commission a 
client's annual report on form 10-K. This is not a violation, because 
the 10-K is a disclosure report, not intended to obtain a Government 
benefit or ruling.
    Example 3: A former Senior Employee of the Securities and Exchange 
Commission becomes executive vice-president of a major industrial 
corporation, registered under the Securities Exchange Act of 1934. 
Pursuant to Commission regulations, the officers of the corporation are 
required to sign certain filings on behalf of the corporation, which are 
transmitted to the Commission. The employee may review, concur or 
request changes in, and sign any such filing required to be transmitted 
to the Commission.

    (f) Agency activity or interest in matter. The restriction applies 
to the former employee's contacts with his or her former agency in 
connection with a matter before or of ``direct and substantial 
interest'' to the agency.

    Example 1: A former Senior Employee of the Securities and Exchange 
Commission is asked to represent Z Company in a new matter before the 
Commission, one in which the former employee had no prior involvement. 
He may not do so.

[[Page 614]]

    Example 2: The matter in the foregoing example is referred to the 
Department of Justice for prosecution, and the former employee is asked 
for the first time to represent Z Company in the criminal proceeding. 
The matter is likely to be of direct and substantial interest to the 
Commission. If so, the former employee may not communicate with the 
Commission in the matter. However, the former Senior Employee may 
communicate with the Commission in order to determine whether it asserts 
a direct and substantial interest in the criminal proceeding. In the 
event of a negative answer to the question, the former Senior Employee 
may communicate with the Commission.
    Example 3: In connection with an entirely new matter a former Senior 
Employee of the Securities and Exchange Commission undertakes the 
representation of Z Company in private litigation brought by Q Company, 
(e.g., a private action arising under the Securities Exchange Act of 
1934). Before the suit was commenced, there was no actual expression of 
interest by the Commission in the matter. As the litigation develops, an 
important question of statutory interpretation is raised, and the 
Commission files a brief as amicus curiae (friend of the court). The 
former Senior Employee may respond to the brief and need not withdraw 
from representation of Z Company, but he may not otherwise communicate 
with the Commission in the matter. If the Commission were to commence a 
proceeding or investigation again, Z Company on the basis of the same 
facts involved in the private litigation, the former employee could 
continue his representation in the private litigation, but could not 
represent Z Company in the Commission's proceeding until after the 
expiration of one year from the termination of his employment with the 
Commission.
    [Note: Where an agency becomes a party to a proceeding subsequent to 
its commencement, the question whether a former Senior Employee may 
continue representation should ordinarily be decided by the court on a 
motion for disqualification in the particular circumstances.]
    Example 4: In connection with a new matter, a former Senior Employee 
of the Federal Food and Drug Administration, since retired to private 
law practice, is asked to consult and assist in the preparation of 
briefs to be filed with the Administration on a new particular matter. 
He may do so, but he should not sign briefs or other communications or 
take any other action that might constitute an appearance.

    (g) Application or proposals for funding of research. In connection 
with any application or proposal for Government funding of research, the 
restrictions of this section do not prevent a former Senior Employee 
from assuming responsibility for the direction or conduct of such 
research and from providing scientific or technological information to 
the Senior Employee's former agency regarding such research. The former 
Senior Employee may not, however, submit the application on behalf of 
the applicant or argue for its approval or funding by the agency.

    Example 1: A former Senior Employee of the National Institute of 
Health (NIH), employed by a non-exempt research institute, prepares an 
application to NIH for a research contract. The application is submitted 
to NIH by the institute and lists the Senior Employee as principal 
investigator. The Senior Employee does not violate 18 U.S.C. 207(c) by 
preparing the application or by being listed as principal investigator, 
since these are not representational activities. He may also sign an 
assurance to NIH, as part of the application, that he will be 
responsible for the scientific and technical direction and conduct of 
the project if an award is made. He may also communicate with NIH to 
provide scientific or technical information on the application, 
including presentation to NIH personnel at the research site, so long as 
he does not argue for approval or funding of the application.

    (h) Personal matters. Unlike the provisions of subsections 207(a) 
and (b) the restrictions of this section apply when the former Senior 
Employee seeks to represent himself or herself. However, they do not 
apply to appearances or communications concerning matters of a personal 
and individual nature, such as personal income taxes, pension benefits, 
or the application of any provision of these regulations to an 
undertaking proposed by a Senior Employee. (See 18 U.S.C. 207(i).) A 
former Senior Employee may also appear pro se (on his or her own behalf) 
in any litigation or administrative proceeding, involving the 
individual's former agency. The former employee may not contact his or 
her former agency in order to secure an item of business, except for (1) 
discussions in contemplation of being employed by the agency as a 
consultant or otherwise; or (2) a proposal to furnish scientific or 
technological information to the Government.

    Example 1: Any former Government Employee may contact his or her 
former agency to seek information or determinations as to matters in 
question under these regulations

[[Page 615]]

or under 18 U.S.C. 207, such as whether a particular matter is 
considered to have been under the employee's official responsibility, 
whether a matter is one in which the agency asserts a direct and 
substantial interest, or whether a current matter is considered to be 
the same as that in which the employee had been involved.

    (i) Statements based on special knowledge. The restrictions of the 
section do not prevent a former Senior Employee from making or providing 
a statement, which is based on the former Senior Employee's own special 
knowledge in the particular area that is the subject matter of the 
statement, provided that no compensation is thereby received, other than 
that regularly provided by law or regulation for witnesses. (See 18 
U.S.C. 207(i).)

    Example 1: A former Senior Employee may make any statement of his 
own views to his former agency on any subject matter in which he has no 
substantial pecuniary interests, acting on his own behalf.
    Example 2: A former Senior Employee is called by his successor at 
the agency for the purpose of eliciting some information on a matter in 
which he had been involved in an official capacity. His response is not 
prohibited.
    Example 3: A former Senior Employee may recommend an individual to 
her former agency for employment, based on her own personal knowledge of 
the individual's qualifications and character.

    (j) Measurement of one-year restriction period. The statutory one-
year period is measured from the date when the individual's 
responsibility as a Senior Employee in a particular agency ends, not 
from the termination of Government service, unless the two occur 
simultaneously. (See Sec. 2637.202(e).)



Sec. 2637.205  Limitation of restrictions of 18 U.S.C. 207(c) to less than 

that whole of a department or agency.

    (a) Authority. There are two methods by which the application of the 
one-year ``cooling-off'' prohibition of 18 U.S.C. 207(c) may be limited 
to less than the entirety of a department or agency. First, 18 U.S.C. 
207(e) provides that the Director may by rule designate as ``separate'' 
a statutory agency or bureau which exercises functions that are distinct 
and separate from the remaining functions of the parent department or 
agency of which it is part. (see Sec. 2637.214) Second, under the 
provisions of 18 U.S.C. 207(d)(1)(C), the Director may restrict the 
application of the prohibition as to a former employee (other than one 
who served in an Executive Level position or at a uniformed service 
grade level of 0-9 and above) insofar as it affects his or her 
communications with persons in an unrelated agency or bureau within his 
former parent department or agency which has separate and distinct 
subject matter jurisdiction from the agency or bureau in which he or she 
served. (see Sec. 2637.215)
    (b) Distinctions between the 18 U.S.C. 207(e) and 207(d)(1)(C) 
provisions. (1) The authority granted by 18 U.S.C. 207(e) is applicable 
solely to a separate statutory agency or bureau, that is, one created by 
statute or the functions of which are expressly referred to by statute 
in such a way that is appears that Congress intended that its functions 
were to be separable. A determination made under this 18 U.S.C. 207(e) 
does not, however, benefit former heads of the separate statutory agency 
or bureau. Such a determination does, however, work to the benefit of 
other employees at Executive Level or at uniformed service grade level 
of 0-9 or above.
    (2) The determination made pursuant to section 207(d)(1)(C) is 
intended to provide similar recognition of separability where the 
subordinate agency or bureau has been administratively created. A 
determination of such separability does inure to the benefit of the head 
of the separate component if he is a Senior Employee designated by the 
Director. However, the determination is not beneficial to persons, 
including the head of a separate component, in positions at Executive 
Level or serving at uniformed service grade level of 0-9 above.
    (c) Separate Statutory Components--(1) Procedure. Each agency shall 
notify the Director, in writing, of any separate statutory agency or 
bureau which it desires to submit for such designation under 18 U.S.C. 
207(e), providing:
    (i) A description of the functions of the agency or bureau, 
indicating the basis on which such functions are claimed to be distinct 
and separate from the parent organization;
    (ii) The separate statutory basis of the agency or bureau; and

[[Page 616]]

    (iii) Identification of those positions in the parent agency with 
official responsibility for supervision of such separate statutory 
agency or bureau.
    (2) Standards. A parent agency may propose as a ``separate'' 
statutory agency an agency or bureau (i) created specifically by 
statute, (ii) the functions of which are expressly referred to by 
statute in such a way as to indicate that a separate component was 
intended or (iii) which is the successor to either of the foregoing; but 
a decision as to the sufficiency of the statutory authority as well as 
the separability of functions shall be reserved to the Director, OGE.
    (3) Effect of designation. If a subordinate part of an agency is 
designated as ``separate'' by the Director, then Senior Employees of 
such separate agency and those of the parent agency are not subject to 
the restrictions of section 207(c) as to each others' agencies--except 
that the prohibition of section 207(c) remains applicable to the former 
head of a ``separate'' subordinate agency and to former Senior Employees 
of the parent agency whose official responsibility included supervision 
of the subordinate agency.

    Example 1: A former Senior Employee of the Product Agency in 
Executive Department leaves and joins a law firm which represents Q 
Corporation. Product Agency has been designated by the Director as 
separate from Executive Department. The former employee is not 
restricted from representing the Q Corporation on a new matter before 
the Executive Department.

    (d) Separate Nonstatutory Components--(1) Procedure. Each agency may 
notify the Director, in writing, of a component agency, bureau or office 
having separate and distinct subject matter jurisdiction which it 
desires to submit for designation under 18 U.S.C. 207(d)(1)(C), 
providing:
    (i) A description of the subject matter jurisdiction of such 
component, indicating the basis on which such jurisdiction is claimed to 
be separate and distinct from certain other agencies, bureaus and 
offices of the parent agency;
    (ii) A description of the nature of the connections and interactions 
between such component and certain other agencies, bureaus or offices of 
the parent agency indicating the basis on which the component is claimed 
to be unrelated;
    (iii) A statement of the basis on which it is claimed that no 
potential exists for use by former Senior Employees of such component of 
undue influence or unfair advantage with respect to the named other 
agencies, bureaus or offices of the parent agency, based on past 
Government service; and
    (iv) Identification of those organizational units of the parent 
agency having administrative or operational authority over such 
component agency, bureau or office.
    (2) Standards. (i) A parent agency may propose as ``separate'' from 
other parts of a department or agency any agency or bureau having 
subject matter jurisdiction separate and distinct from one or more other 
portions of the department or agency accompanied by a showing that there 
would be no potential for use of undue influence or unfair advantage 
based upon past Government service if a former employee of one such 
subordinate agency or bureau communicated with employees of such other 
portions of the department or agency.
    (ii) A determination under this section rests solely with the 
Director, OGE, and is available only for those subordinate components 
which would, but for the lack of a statutory basis, qualify for separate 
agency treatment under 18 U.S.C. 207(e).
    (iii) Where one component has supervisory authority over another, 
the two components may not be considered separate and distinct for 
purposes of this section.
    (iv) The requirement of ``separate and distinct subject matter 
jurisdiction'' may be met in at least two ways. First, the substantive 
areas of coverage may be distinct. For example, an office or bureau 
within the parent agency may handle only maritime matters. Second, the 
regional area of coverage may be different. For example, one regional 
office may, on appropriate facts, be considered separate and distinct 
from other regional offices and from the parent agency--except for the 
bureau or office in the parent agency which is responsible for its 
supervision.

[[Page 617]]

    (v) It is necessary to specify the ``unrelated agency or bureau 
within the same department or agency'' as to which it is recommended 
that post employment communication be permitted. For example, one bureau 
may involve a subject matter distinct from some, but not all, parts of 
the parent department. Attempts to fractionalize a department could, 
however, become deeply complicated and involve difficult judgments and 
fact-finding. OGE will not usually act on such cases, and submissions 
should be confined to relatively clear cases.
    (3) Effect of determination. If a component agency, bureau or office 
is determined to be separate by the Director, then Senior Employees of 
such component are not subject to the restrictions of 18 U.S.C. 207(c) 
and Sec. 2637.204 as to the remaining agencies, bureaus or offices of 
the parent agency (except certain such agencies, bureaus or offices as 
specified in Sec. 2637.215)--except that the prohibition of section 
207(c) and Sec. 2637.204 shall remain applicable (i) to those former 
Senior Employees of such component who served in positions designated by 
18 U.S.C. 207(d)(1)(A) and (B) and (ii) to former Senior Employees of 
such component with respect to the parent agency (as defined in Sec. 
2637.205(e)). Such limited application of 18 U.S.C. 207(c) may be 
available for the head of a separate component, unlike the limitation of 
18 U.S.C. 207(e), as determined by the Director.

    Example 1: In the Department of Justice, while the Antitrust 
Division may be ``separate'' from other Divisions, it is not separate 
from the immediate office of the Attorney General.



Sec. 2637.206  Exemption for scientific and technological information.

    (a) Exemption. The making of communications solely for the purpose 
of furnishing scientific or technological information pursuant to agency 
procedures is exempt from all prohibitions and restrictions set forth in 
Sec. Sec. 2637.201-2637.204 of these regulations (subsections (a), (b), 
and (c) of 18 U.S.C. 207). This exemption allows the free exchange of 
such information regardless of a former Government employee's prior 
participation in or responsibility for the matter. The former Senior 
Employee should not argue for the acceptance of a proposal. The 
exemption is not limited to communications constituting the furnishing 
of information, but includes those ``for the purpose of'' doing so. No 
violation occurs when, for example, a former Government employee working 
on a project makes contact to determine the kind and form of information 
required, or the adequacy of information already supplied, so long as 
agency procedures are satisfied.

    Example 1: A project manager, regardless of prior involvement in a 
particular matter, may contact the Government to determine deficiencies 
in system design or performance, furnish scientific or technological 
information relating to a solution or approach to a problem, seek 
related information from the Government; advise and supervise others who 
are involved as to such matters; and meet with Government technical 
experts for such purpose; provided in each case that there is compliance 
with such agency regulations as have been issued.

    (b) Necessary information. Scientific and technological information 
includes feasibility, risk, cost, and speed of implementation, when 
necessary to appreciate fairly the practical significance of the 
information. The Government may and should be fully informed of the 
significance of scientific and technological alternatives.
    (c) Intent to influence. The furnishing of meritorious or convincing 
scientific or technological proposals does not constitute an intent to 
influence. (See Sec. 2637.201(b)(7) of this part.)
    (d) Expert testimony. This exemption does not include testimony as 
an ``expert'' in adversary proceedings in a matter in which the United 
States is involved or has an interest. Such testimony is governed by 
regulations set forth in Sec. 2637.208. As to assistance as an expert 
or consultant, see Sec. 2637.203(g), Example 7.
    (e) Agency responsibility for procedures. The primary responsibility 
for developing procedures to guide activity under this exemption lies 
with each agency, so that such procedures comport with the particular 
characteristics of agency programs and needs. Such procedures will be 
reviewed periodically by the Director. In promulgating procedures, an 
agency may take into

[[Page 618]]

consideration: Limiting communications to certain formats which are 
least conducive to the use of personal influence; segregating, to the 
extent possible, meetings and presentations involving matters of 
technical substance from those involving other aspects of the 
relationship; requiring that the designated agency ethics official be 
informed of instances where the exemption is used; or employing more 
restrictive practices in circumstances involving either immediate 
competition for contracts or applications for grants than in those 
involving an ongoing project.



Sec. 2637.207  Exemption for persons with special qualification in a 

technical discipline.

    (a) Applicability. A former Government employee may be exempted from 
the restrictions on post employment practices if the head of the agency 
concerned with the particular matter, in consultation with the Director, 
executes a certification published in the Federal Register that such 
former Government employee has outstanding qualifications in a 
scientific, technological, or other technical discipline; is acting with 
respect to a particular matter which requires such qualifications; and 
that the national interest would be served by such former Government 
employee's participation.
    (b) When appropriate. This exemption should generally be utilized 
only where the former Government employee's involvement is needed on so 
continuous and comprehensive a basis that compliance with the procedures 
adopted for the communication of technical information (see Sec. 
2637.206), or other actions to isolate the former Government employee 
from other aspects of the matter, would be burdensome and impractical.
    (c) Certification authority. Certification should take place at no 
lower level than the head of the agency, the deputy thereof, or in the 
absence of both, the acting agency head. Consultation with the Director 
shall precede any certification. The exemption takes place upon the 
execution of the certification, provided that it is transmitted to the 
Federal Register for publication.
    (d) Agency registry. An agency may establish a registry for current 
employees, wherein the nature of their qualifications in one or more 
technical fields is certified after review by a supervisor, as a basis 
for establishing such qualifications in connection with, and to 
expedite, a later request for certification, should the necessity for 
such request arise.



Sec. 2637.208  Testimony and statements under oath or subject to penalty of perjury.

    (a) Statutory basis. Section 207(h) provides:

    ``Nothing in this section shall prevent a former officer or employee 
from giving testimony under oath, or from making statements required to 
be made under penalty of perjury.''

    (b) Applicability. A former Government employee may testify before 
any court, board, commission, or legislative body with respect to 
matters of fact within the personal knowledge of the former Government 
employee. This provision does not, however, allow a former Government 
employee, otherwise barred under 18 U.S.C. 207 (a), (b), or (c) to 
testify on behalf of another as an expert witness except: (1) To the 
extent that the former employee may testify from personal knowledge as 
to occurrences which are relevant to the issues in the proceeding, 
including those in which the former Government employee participated, 
utilizing his or her expertise, or (2) in any proceeding where it is 
determined that another expert in the field cannot practically be 
obtained; that it is impracticable for the facts or opinions on the same 
subject to be obtained by other means, and that the former Government 
employee's testimony is required in the interest of justice.
    (c) Statements under penalty of perjury. A former Government 
employee may make any statement required to be made under penalty of 
perjury, such as those required in registration statements for 
securities, tax returns, or security clearances. The exception does not, 
however, permit a former employee to submit pleadings, applications, or 
other documents in a representational capacity on behalf of another 
merely because the attorney or

[[Page 619]]

other representative must sign the documents under oath or penalty of 
perjury.



Sec. 2637.209  Partners of present or former Government employees.

    (a) Scope. Section 207(g) of 18 U.S.C. prohibits a partner of a 
current Government employee from acting as agent or attorney before the 
United States in a particular Government matter in which such Government 
employee participates, or did participate, personally and substantially. 
To the extent such section involves the activities of current Government 
employees and their partners, it is beyond the scope of these 
regulations.
    (b) Imputation. Neither the Act nor these regulations impute the 
restrictions on former employees to partners or associates of such 
employees. Imputation of the restrictions of sections 207 (b)(ii) and 
(c) to partners of former employees would be inappropriate for the 
additional reason that section 207(b)(ii) itself restricts secondary-
level activity, and section 207(c) is directed at the exercise of 
influence personal to the former Senior Employee.



Sec. 2637.210  Officials of a State; officials of corporations created by an 

Act of Congress and public international organizations.

    For purposes of sections 207 (a), (b) and (c) of title 18 U.S.C.:
    (a) An official whose powers are established by the constitution of 
any State of the United States does not act on behalf of ``any other 
person'' or ``anyone'' when acting in his or her official capacity, but 
rather constitutes the official authority of the State; and
    (b) A former employee does not engage in unlawful activity when he 
or she acts on behalf of (1) a corporation specifically created by an 
Act of Congress if any of its directors is currently appointed by the 
United States; or (2) any public international organization if he or she 
serves by nomination or request of the United States or on temporary 
assignment from any agency.



Sec. 2637.211  Standards and procedures for designating senior employee 

positions pursuant to 18 U.S.C. 207(d).

    (a) Definitions. As used in these regulations, Senior Employee 
refers to any person specified in or designated pursuant to 18 U.S.C. 
207(d)(1); that is, employed by the United States:
    (1) At a rate of pay specified or fixed according to subchapter II 
of chapter 53 of title 5, U.S.C., generally known as ``Executive 
Level;'' or
    (2) On active duty as a commissioned officer of a uniformed service 
in a pay grade of 0-9 or above as described in 37 U.S.C. 201; or
    (3) In a position in any pay system for which the basic rate of pay 
is equal to or greater than that for GS-17 as prescribed by 5 U.S.C. 
5332 or positions which are established within the Senior Executive 
Service (SES) pursuant to the Civil Service Reform Act of 1978, or 
positions of active duty commissioned officers of the uniformed services 
assigned to pay grade 0-7 and 0-8, as described in 37 U.S.C. 201, and 
who has significant decision-making or supervisory responsibilities, as 
designated by the Director, pursuant to paragraph (b) of this section.
    (b) Designation procedures. The following procedures will be 
followed in designation of Senior Employee positions pursuant to 18 
U.S.C. 207(d)(1)(C):
    (1) Positions at GS-17 and 18 level, Senior Executive Service, and 
pay grades 0-7 and 0-8 of the uniformed services. The following are 
designated effective February 28, 1980, unless exempted as provided in 
paragraph (b)(2) of this section: All positions classified at GS-17 or 
above in the General Schedule; those in any other pay system, the rate 
of pay for which is at least that of grade GS-17; those in the Senior 
Executive Service; and those active duty uniformed service officers 
serving in pay grades 0-7 and 0-8. Each agency head shall submit to the 
Director, by May 15, 1979 and on every May 15 thereafter, a report 
consisting of: (i) a description of all positions as set forth in this 
paragraph; (ii) the agency's recommendation as to those positions that 
should not be designated, based on standards established in these 
regulations or any other reason; and (iii) the basis and reasons for 
each such recommendation. After making such additional inquiries as 
appear desirable, the Director will determine which positions should be 
exempt. Notwithstanding the foregoing, the effective

[[Page 620]]

date for Executive Level positions, whether or not included in the 
Senior Executive Service, is July 1, 1979.
    (2) Standards for designation and exemption. Positions, or classes 
of positions, which do not have significant decision-making or 
supervisory responsibility will be exempted from designation. Initial 
exemptions will be retroactive. Classes of positions which may be 
considered for exemption are those in which decision-making 
responsibility does not regularly extend to major policy issues within 
the agency or in which supervisory responsibility extends to less than 
all of a directorate, bureau or department which has major policy or 
operational responsibility. The foregoing may include, without 
limitation, special assistants, technical and professional advisors to 
persons who make policy decisions, those involved primarily in research 
and technical work, and administrative law judges.
    (3) Senior Executive Service. The establishment of positions within 
the Senior Executive Service pursuant to the Civil Service Reform Act of 
1978 is the responsibility of the Office of Personnel Management. The 
choice of an individual to enter or not to enter the Senior Executive 
Service is not a relevant factor in the designation under these 
regulations of a position held by such person.
    (4) ``Rate of pay.'' As used in the definition of Senior Employee, 
the ``rate of pay'' is that specified by or pursuant to law without 
regard to the ceiling limitations of section 5308 or section 5373 of 
title 5 U.S.C.; except that an individual in an executive level or GS-17 
or 18 position is deemed to be employed at the rate of pay specified for 
that position. Increases in pay due to ``steps'' are not considered in 
determining pay grade or level.
    (c) Differential designation. Where appropriate, the Director may 
designate positions for purposes of 18 U.S.C. 207(c) without designating 
the positions for purposes of 18 U.S.C. 207(b)(ii).

    Example 1: It may be determined that a given position or class of 
positions will be restricted as to contact in the first post employment 
year, but not as to assisting in representation.

    (d) Fair notice of designation. No Senior Employee designation made 
pursuant to 18 U.S.C. 207(d)(1)(C) will be effective until the last day 
of the fifth full calendar month after the first publication of a notice 
by the Director of intention to designate; except as indicated in 
paragraph (i) of this section, and as to a person first occupying the 
position after such notice is published. The designation in paragraph 
(b)(1) of this section and the comparable designation in the interim 
regulations of April 3, 1979 (44 FR 19974) constitutes notice.
    (e) ``Acting'' or temporary positions. An individual may serve in a 
position designated pursuant to 18 U.S.C. 207(d) for up to 60 days in an 
``acting'' or temporary capacity without being subject to those 
restrictions which specially apply to such positions, unless such 
individual (1) was transferred or detailed from another designated 
position, or (2) without a significant break in continuity, is named 
permanently to such position.
    (f) Special Government Employee. A Special Government Employee who 
serves on 60 days or less in a given calendar year may serve in a 
designated position without being subject to the restrictions which 
specially apply to such position. A Special Government Employee is 
deemed to serve only on those days actually engaged in work for the 
Government under his or her Special Government Employee arrangement.
    (g) Publication. Positions designated by the Director pursuant to 18 
U.S.C. 207(d)(1)(C) and not exempted will be published in the Federal 
Register.
    (h) Computation of time. An individual who transfers from a 
designated position to one that is not designated shall compute the 
commencement of the time periods contained in 18 U.S.C. 207 (b)(ii) and 
(c) from the time of such transfer, except as indicated in paragraph (i) 
of this section. (See Sec. 2637.202(e).)
    (i) Position shifting. In any case where a person transfers from a 
designated position to one that is not, the agency head shall within one 
month transmit to the Director a report reciting the functions of each 
position, the reason for the transfer, and the identities of

[[Page 621]]

the prior holder of the position assumed and the successor, if any, to 
the position departed. If the Director designates the newly assumed 
position pursuant to section 207(d)(1)(C) of title 18 U.S.C., such 
designation shall be effective retroactively to the date of transfer 
notwithstanding paragraph (d) of this section.
    (j) Revocation of Designations. In the event the Director determines 
that a position previously designated should not have been, the 
designation will be revoked. Except for designations made under 
paragraph (i) of this section, the revocation may be made retroactive if 
the initial designation is determined to have been erroneous or if there 
is a change in standards for designation applicable to the position. 
Retroactive effect will not be given where the basis for revocation is a 
change in the functions or importance of a position.



Sec. 2637.212  Administrative enforcement proceedings.

    (a) Basic procedures. The following basic guidelines for 
administrative enforcement of restrictions on post employment activities 
are designed to expedite consultation with the Director as required 
pursuant to section 207(j) of title 18 U.S.C.
    (1) Delegation. The head of an agency may delegate his or her 
authority under this subpart.
    (2) Initiation of administrative disciplinary hearing. (i) On 
receipt of information regarding a possible violation of 18 U.S.C. 207, 
and after determining that such information appears substantiated, the 
agency head shall expeditiously provide such information, along with any 
comments or agency regulations, to the Director and to the Criminal 
Division, Department of Justice. The agency should coordinate any 
investigation on administrative action with the Department of Justice to 
avoid prejudicing criminal proceedings, unless the Department of Justice 
communicates to the Agency that it does not intend to initiate criminal 
prosecution.
    (ii) Whenever an agency has determined after appropriate review that 
there is reasonable cause to believe that a former Government employee 
has violated any of these regulations or 18 U.S.C. 207(a), (b), or (c), 
it may initiate an administrative disciplinary proceeding by providing 
the former Government employee with notice as defined in paragraph 
(a)(3) of this section. Agencies may establish procedures to protect the 
privacy of former employees as to allegations made prior to a 
determination of sufficient cause to initiate an administrative 
disciplinary hearing.
    (3) Adequate notice. (i) An agency must provide a former Government 
employee with adequate notice of an intention to institute a proceeding 
and an opportunity for a hearing.
    (ii) Notice to the former Government employee must include:
    (A) A statement of allegations (and the basis thereof) sufficiently 
detailed to enable the former Government employee to prepare an adequate 
defense;
    (B) Notification of the right to a hearing; and
    (C) An explanation of the method by which a hearing may be 
requested.
    (4) Presiding official. (i) The presiding official at proceedings 
under this subpart shall be the agency head or an individual to whom the 
agency head has delegated authority to make an initial decision 
(hereinafter referred to as ``examiner'').
    (ii) Appropriate qualifications shall be established for examiners.
    (iii) An examiner shall be impartial. No individual who has 
participated in any manner in the decision to initiate the proceedings 
may serve as an examiner in those proceedings.
    (5) Time, date and place. (i) The hearing shall be conducted at a 
reasonable time, date, and place.
    (ii) In setting a hearing date, the presiding official shall give 
due regard to the former Government employee's need for:
    (A) Adequate time to prepare a defense properly, and
    (B) An expeditious resolution of allegations that may be damaging to 
his or her reputation.
    (6) Hearing rights. A hearing shall include, at a minimum, the 
following rights:
    (i) To represent oneself or to be represented by counsel,
    (ii) To introduce and examine witnesses and to submit physical 
evidence,

[[Page 622]]

    (iii) To confront and cross-examine adverse witnesses,
    (iv) To present oral argument, and
    (v) To receive a transcript or recording of the proceedings, on 
request.
    (7) Burden of proof. In any hearing under this subpart, the agency 
has the burden of proof and must establish substantial evidence of a 
violation.
    (8) Hearing decision. (i) The presiding official shall make a 
determination exclusively on matters of record in the proceeding, and 
shall set forth in the decision all findings of fact and conclusions of 
law relevant to the matters at issue.
    (ii) Within a reasonable period of the date of an initial decision, 
as set by the agency, either party may appeal the decision to the agency 
head. The agency head shall base his or her decision on such appeal 
solely on the record of the proceedings or those portions thereof cited 
by the parties to limit the issues.
    (iii) If the agency head modifies or reverses the initial decision, 
he or she shall specify such findings of fact and conclusions of law as 
are different from those of the hearing examiner.
    (9) Administrative sanctions. The agency head may take appropriate 
action in the case of any individual who was found in violation of 18 
U.S.C. 207 (a), (b), or (c) of these regulations after a final 
administrative decision or who failed to request a hearing after 
receiving adequate notice, by:
    (i) Prohibiting the individual from making, on behalf of any other 
person except the United States, any formal or informal appearance 
before, or, with the intent to influence, any oral or written 
communication to, such department or agency on any matter of business 
for a period not to exceed five years, which may be accomplished by 
directing agency employees to refuse to participate in any such 
appearance or to accept any such communication; or
    (ii) Taking other appropriate disciplinary action.
    (10) Judicial review. Any person found to have participated in a 
violation of 18 U.S.C. 207 (a), (b), or (c) of these regulations may 
seek judicial review of the administrative determination.
    (11) Consultation and review. Each agency shall submit a copy of its 
procedures for administrative enforcement to the Director.



Sec. 2637.213  Effective date of restrictions.

    (a) Persons affected. Any person who holds a Government position 
after June 30, 1979, becomes subject to any additional restrictions 
relating to the holder of that position contained in the amendments to 
18 U.S.C. 207 as set forth in these regulations. Restrictions which 
depend on the designation of a position by the Director shall become 
applicable on the date such designation becomes effective.
    (b) Fair notice of substantive changes. No change in the substance 
of these regulations shall become effective with respect to a Government 
employee who is adversely affected by such change until and unless such 
employee remains in a position to which such change is applicable for a 
period of five months following the first publication of a regulation in 
final form, reflecting or prescribing such change, or unless such 
employee accepts such a position after the publication.



Sec. 2637.214  Separate statutory agencies: Designations.

    Note: Part 2637 provides guidance concerning the prior version of 18 
U.S.C. 207 (1988) as it continues to apply to individuals who terminated 
Government service (or a ``Senior'' Government position) before January 
1, 1991. However, since no former ``Senior Employee'' who terminated 
service before that date could any longer be subject to the one-year 
restriction of section 207(c) of 18 U.S.C. as it existed prior to its 
amendment by the Ethics Reform Act of 1989, the listing of separate 
statutory agencies that previously appeared in Sec. 2637.214 has been 
deleted.

[57 FR 62468, Dec. 31, 1992]



Sec. 2637.215  Separate components of agencies or bureaus: Designations.

    Note: Part 2637 provides guidance concerning the prior version of 18 
U.S.C. 207 (1988) as it continues to apply to individuals who terminated 
Government service (or a ``Senior'' Government position) before January 
1, 1991. However, since no former ``Senior Employee'' who terminated 
service before that date could any longer be subject to the one-year 
restriction of section 207(c) of 18

[[Page 623]]

U.S.C. as it existed prior to its amendment by the Ethics Reform Act of 
1989, the listing of separate components that previously appeared in 
Sec. 2637.215 has been deleted.

[57 FR 62468, Dec. 31, 1992]



Sec. 2637.216  ``Senior Employee'' designations.

    Note: Part 2637 provides guidance concerning the prior version of 18 
U.S.C. 207 (1988) as it continues to apply to individuals who terminated 
Government service (or a ``Senior'' Government position) before January 
1, 1991. However, since no former ``Senior Employee'' who terminated 
service before that date could any longer be subject to either the two-
year restriction of section 207(b)(ii) or the one-year restriction of 
section 207(c) of 18 U.S.C. as they existed prior to their amendment by 
the Ethics Reform Act of 1989, the listing of ``Senior Employee'' 
positions that previously appeared in Sec. 2637.216 has been deleted.

[57 FR 62468, Dec. 31, 1992]



PART 2638_OFFICE OF GOVERNMENT ETHICS AND EXECUTIVE AGENCY ETHICS PROGRAM 

RESPONSIBILITIES--Table of Contents




                      Subpart A_General Provisions

Sec.
2638.101 Authority and purpose.
2638.102 General policies.
2638.103 Agency regulations.
2638.104 Definitions.

               Subpart B_Designated Agency Ethics Official

2638.201 In general.
2638.202 Responsibility of agency head.
2638.203 Duties of designated agency ethics official.
2638.204 Deputy ethics official.

                Subpart C_Formal Advisory Opinion Service

2638.301 In general.
2638.302 Who may request a formal advisory opinion.
2638.303 Subject matter of formal advisory opinions.
2638.304 Form of requests for formal advisory opinions.
2638.305 Acceptance of requests for formal advisory opinions.
2638.306 Notice of requests.
2638.307 Written comment on requests.
2638.308 Issuance.
2638.309 Reliance on formal advisory opinions.
2638.310 Public availability and publication of formal advisory 
          opinions.
2638.311 Copies of published formal advisory opinions.
2638.312 Referral of requests.
2638.313 Agency opinions.

     Subpart D_Correction of Executive Branch Agency Ethics Programs

2638.401 In general.
2638.402 Corrective orders.
2638.403 Agency compliance.
2638.404 Report of noncompliance.

 Subpart E_Corrective and Remedial Action in Cases Involving Individual 
                       Executive Agency Employees

2638.501 In general.
2638.502 Recommendations and advice.
2638.503 Agency investigations.
2638.504 Director's finding.
2638.505 Director's decision and order.
2638.506 Director's recommendation.

                Subpart F_Executive Branch Agency Reports

2638.601 In general.
2638.602 Annual agency reports.
2638.603 Reports of referral for possible prosecution.

           Subpart G_Executive Agency Ethics Training Programs

2638.701 Overview.
2638.702 Definitions.
2638.703 Initial agency ethics orientation for all employees.
2638.704 Annual ethics training for public filers.
2638.705 Annual ethics training for other employees.
2638.706 Agency's written plan for annual ethics training.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); E.O. 
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    Source: 46 FR 2583, Jan. 9, 1981, unless otherwise noted. 
Redesignated at 54 FR 50231, Dec. 5, 1989.



                      Subpart A_General Provisions



Sec. 2638.101  Authority and purpose.

    (a) Authority. The regulations of this part are issued pursuant to 
the authority of titles I and IV of the Ethics in Government Act of 1978 
(Pub. L. 95-521, as amended) (``the Act'').
    (b) Purpose. These executive branch regulations supplement and 
implement

[[Page 624]]

titles I, IV and V of the Act, set forth more specifically certain 
procedures provided in those titles, and furnish examples, where 
appropriate.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, as 
amended at 65 FR 69657, Nov. 20, 2000]



Sec. 2638.102  General policies.

    (a) The Office of Government Ethics (``the Office'') provides 
overall direction and leadership concerning executive branch policies 
related to preventing conflicts of interest. The head of each agency has 
primary responsibility for the administration of the ``ethics in 
government'' program within his or her agency. The Office carries out 
its leadership role by:
    (1) Providing information on and promoting ethical standards in 
executive agencies;
    (2) Consulting with agencies regarding their agency ethics programs 
and assisting them in interpreting ethics rules and regulations;
    (3) Developing rules and regulations pertaining to conflicts of 
interests and standards of conduct;
    (4) Monitoring compliance with the public and confidential financial 
disclosure requirements;
    (5) Establishing a formal advisory opinion service; and
    (6) Evaluating the effectiveness of programs designed to prevent 
conflicts of interests.



Sec. 2638.103  Agency regulations.

    Each agency may, subject to the prior approval of the Office of 
Government Ethics, issue regulations not inconsistent with this part.



Sec. 2638.104  Definitions.

    For the purposes of this part:
    Act means the Ethics in Government Act of 1978 (Pub. L. 95-521, as 
amended).
    Agency means any executive department, military department, 
Government corporation, independent establishment or agency, including 
the United States Postal Service and Postal Rate Commission.
    Designated agency ethics official means an officer or employee who 
is designated by the head of the agency to coordinate and manage the 
agency's ethics program in accordance with the provisions of Sec. 
2638.203 of this part.
    Director means the Director of the Office of Government Ethics.
    Executive branch includes each executive agency as defined in 5 
U.S.C. 105 and any other entity or administrative unit in the executive 
branch. However, it does not include any agency, entity, office or 
commission that is defined by or referred to in 5 U.S.C. app. 109(8)-
(11) of the Act as within the judicial or legislative branch.
    Person includes an individual, partnership, corporation, 
association, government agency, or public or private organization.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, as 
amended at 65 FR 69657, Nov. 20, 2000]



               Subpart B_Designated Agency Ethics Official



Sec. 2638.201  In general.

    Each agency shall have a designated agency ethics official who is 
the officer or employee designated by the head of the agency to 
administer the provisions of title I of the Act within that agency, to 
coordinate and manage the agency's ethics program and to provide liaison 
to the Office of Government Ethics with regard to all aspects of such 
ethics program. The agency's ethics program shall be designed to 
implement titles I, IV and V of the Act and regulations promulgated 
thereunder, Executive Order 12674 as modified (relating to principles of 
ethical conduct for officers and employees within the executive branch) 
and regulations promulgated thereunder, and other statutes and 
regulations applicable to agency ethics matters.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, as 
amended at 65 FR 69657, Nov. 20, 2000]



Sec. 2638.202  Responsibilities of agency head.

    (a) In general. The head of each agency is responsible for and shall 
exercise personal leadership in establishing, maintaining, and carrying 
out the agency's ethics program. He or she

[[Page 625]]

shall make available to the ethics program sufficient resources 
(including investigative, audit, legal, and administrative staff as 
necessary) to enable the agency to administer its program in a positive 
and effective manner.
    (b) Selection of a designated agency ethics official. The head of 
each agency shall appoint an individual to serve as the designated 
agency ethics official and an individual to serve in an acting capacity 
in the absence of the primary designated agency ethics official 
(alternate agency ethics official). In selecting these two individuals 
the head of an agency should ensure that the experience of such 
appointees in administrative, legal, managerial, or analytical work 
demonstrates the ability to--
    (1) Review the financial disclosure reports submitted by officers or 
employees within the agency, assessing the application of conflict of 
interest laws and regulations to the information reported and counseling 
those officers or employees with regard to resolving actual or potential 
conflicts of interests, or appearances thereof;
    (2) Review the financial disclosure reports submitted by 
Presidential appointees for confirmation purposes and counsel those 
appointees with regard to resolving potential conflicts of interest, or 
appearances thereof, before the confirmation hearing;
    (3) Counsel agency personnel concerning ethics standards and 
programs;
    (4) Counsel departing and former agency officials on post-employment 
conflict of interest standards;
    (5) Assist managers and supervisors in understanding and 
implementing agency ethics programs;
    (6) Administer a system for periodic evaluation of the ethics 
program; and
    (7) Select deputy ethics officials if necessary and manage the 
ethics program through them.
    (c) Designation. The head of each agency shall formally delegate 
functional authority to coordinate and manage the ethics program as set 
forth in Sec. 2638.203 to the designated and alternate agency ethics 
officials. Within 30 days of any such delegation of authority the head 
of the agency shall submit to the Office of Government Ethics a formal 
written designation. The designation shall include:
    (1) The names of the individuals so designated;
    (2) The title of the position held by each designee; and
    (3) A copy of the delegation of authority.



Sec. 2638.203  Duties of the designated agency ethics official.

    (a) In general. The designated agency ethics official shall 
coordinate and manage the agency's ethics program. The program consists 
generally of:
    (1) Liaison with the Office of Government Ethics;
    (2) Review of financial disclosure reports;
    (3) Initiation and maintenance of ethics education and training 
programs; and
    (4) Monitoring administrative actions and sanctions.
    (b) Program elements. In carrying out this program on behalf of the 
head of the agency, the designated agency ethics official shall ensure 
that:
    (1) Close liaison with the Office of Government Ethics concerning 
the agency's ethics program is developed and maintained;
    (2) An effective system and procedure for the collection, filing, 
review, and, when applicable, public inspection of the financial 
disclosure reports as required by title II of the Act, Executive Order 
11222, and other applicable statutes and regulations is developed and 
properly administered;
    (3) The financial disclosure reports of Presidential nominees to 
agency positions submitted prior to Senate confirmation hearings 
pursuant to Sec. 2634.605(c) of part 2634 are certified personally by 
him or herself or alternate designated agency ethics official in his or 
her absence;
    (4) All financial disclosure reports submitted by employees and 
filed in bureaus and regional offices, as well as those submitted and 
filed at the agency's headquarters, are properly maintained and 
effectively and consistently reviewed for conformance with all 
applicable laws and statutes;
    (5) A list of those circumstances or situations which have resulted 
or may result in noncompliance with ethics laws and regulations is 
developed, maintained and published within the

[[Page 626]]

agency as required by Sec. 206(b)(7) of the Act and made available for 
public inspection;
    (6) An education program for agency employees concerning all ethics 
and standards of conduct matters is developed and conducted in 
accordance with subpart G, Executive Agency Ethics Training Programs, of 
this part.
    (7) A counseling program for agency employees concerning all ethics 
and standards of conduct matters including post employment matters, is 
developed and conducted;
    (8) Records are kept, when appropriate, on advice rendered;
    (9) Prompt and effective action including administrative action is 
undertaken to remedy:
    (i) Violations or potential violations, or appearances thereof, of 
the agency's standards of conduct including post employment regulations;
    (ii) The failure to file a financial disclosure report or portions 
thereof;
    (iii) Potential or actual conflicts of interests, or appearances 
thereof, which were disclosed on a financial disclosure report; and
    (iv) Potential or actual violations of other laws governing the 
conduct or financial holdings of officers or employees of that agency, 
and

that a follow-up is made to ensure that actions ordered, including 
divestiture and disqualification, have been taken;
    (10) The agency's standards of conduct regulations, financial 
disclosure systems, and post-employment enforcement systems are 
evaluated periodically to determine their adequacy and effectiveness in 
relation to current agency responsibilities;
    (11) Information developed by internal audit and review staff, the 
Office of the Inspector General, if any, or other audit groups is 
reviewed to determine whether such information discloses a need for 
revising agency standards of conduct or for taking prompt corrective 
action to remedy actual or potential conflict of interest situations;
    (12) The services of the agency's Office of the Inspector General, 
if any, are utilized when appropriate, including the referral of matters 
to and acceptance of matters from that Office;
    (13) A list of those persons to whom delegations of authority are 
made pursuant to Sec. 2638.204(a) is maintained and made available to 
the Office of Government Ethics, upon request; and
    (14) Information required by the Act or requested by the Office of 
Government Ethics in the performance of its responsibilities is provided 
in a complete and timely manner.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, 
and amended at 58 FR 69176, Dec. 30, 1993; 59 FR 12148, Mar. 16, 1994]



Sec. 2638.204  Deputy ethics official.

    (a) Functions. A designated agency ethics official may, if 
necessary, delegate to one or more deputy ethics officials any of the 
duties referred to in Sec. 2638.203, except for those functions set 
forth in Sec. 2634.605(c)(2) of part 2634 and referred to in Sec. 
2638.203(b)(3) (certification of nominee statements). A deputy ethics 
official shall work under the supervision of the designated agency 
ethics official in carrying out such delegated functions.
    (b) Dual status. A deputy ethics official may also be designated 
pursuant to Sec. 2638.202 to serve as the alternate agency ethics 
official. During the absence of the designated agency ethics official a 
deputy ethics official who has also been designated as the alternate 
ethics official shall perform the functions set forth in Sec. 
2634.605(c)(2) of part 2634 and referred to in Sec. 2638.203(b)(3).

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, 
and amended at 58 FR 69176, Dec. 30, 1993]



                Subpart C_Formal Advisory Opinion Service



Sec. 2638.301  In general.

    (a) The Director of the Office of Government Ethics has the 
authority and responsibility to render formal advisory opinions pursuant 
to Section 402(b)(8) of the Act. This service is available to any person 
who has a question about a matter over which the Office of Government 
Ethics has jurisdiction. Formal advisory opinions will be issued when a 
two-pronged test is met. First, the person making the request must meet 
the requirements of Sec. 2638.302 and, second, the subject matter of 
the request must meet the criteria set forth in Sec. 2638.303.

[[Page 627]]

    (b) Normally, formal advisory opinions will not be issued to 
individuals who wish to obtain general advice concerning their own 
specific present or proposed activities or financial transactions. Such 
questions should be directed to the designated ethics official of the 
agency in which the individual will serve, serves or served. If a 
designated agency ethics official receives a request which he or she 
believes should be answered by the Office of Government Ethics, a 
referral procedure is available.
    (c) The Office of Government Ethics will provide interested parties, 
to the extent practicable, with an opportunity to comment on any 
question which will be the subject of a formal advisory opinion issued 
by the Office. These opinions will be published in a form which will not 
identify specific individuals unless necessary to the understanding of 
the opinion. Copies will be sent to the designated ethics officials of 
each agency and be available at the Office of Government Ethics in that 
same form.



Sec. 2638.302  Who may request a formal advisory opinion.

    Any person (as defined in Sec. 2638.104) may request an opinion 
with respect to a situation in which that person is directly involved. A 
designated agency ethics official, representative, or attorney may 
request an opinion on behalf of the person. Notwithstanding this direct 
involvement requirement, a designated agency ethics official may always 
request an opinion concerning a situation about which he or she has 
knowledge.



Sec. 2638.303  Subject matter of formal advisory opinions.

    Formal advisory opinions will be rendered on matters of general 
applicability or on important matters of first impression concerning the 
application of the Act, Executive Order 11222 and regulations 
promulgated pursuant to such Act and Executive Order, and the laws 
embodied in 18 U.S.C. 202-209. The Director will respond to those 
requests which in his or her discretion fall within this category taking 
into consideration:
    (a) The unique nature of the question and its precedential value,
    (b) The potential number of officers or employees throughout the 
Government affected by the question,
    (c) The frequency with which the question arises, and
    (d) The likelihood or presence of inconsistent interpretations on 
the same question by different agencies.

Except in unusual circumstances, opinions will not be rendered with 
respect to hypothetical situations posed in requests. Opinions may be 
rendered, however, on proposed activities or transactions.



Sec. 2638.304  Form of requests for formal advisory opinions.

    (a) A request for a formal advisory opinion should be directed to 
the Director of the Office of Government Ethics, Suite 500, 1201 New 
York Avenue NW., Washington, DC 20005-3917.
    (b)(1) A request should be in writing and signed by the individual 
making the request or by a representative of that person. A request 
shall state all material facts necessary for the Director to render a 
complete and correct opinion.
    (2) In addition, it should also include the following information:
    (i) the name, mailing address, and daytime telephone contact of the 
individual making the request, and
    (ii) a copy of the position, description of the position involved, 
if available.
    (c) If the request is submitted by a representative, he or she must 
show his or her representative status, list a mailing address and 
daytime telephone contact.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, 
and amended at 55 FR 27180, July 2, 1990]



Sec. 2638.305  Acceptance of requests for formal advisory opinions.

    (a) Subject to the provisions of paragraph (d) of this section, the 
Director shall review each request for a formal advisory opinion and 
take one of the following actions:
    (1) If the Director determines that the person making the request 
meets the requirements of Sec. 2638.302 and that the subject matter of 
the request qualifies under the criteria established in

[[Page 628]]

Sec. 2638.303, he or she shall assign an identifying number to the 
request and notify the person that a formal advisory opinion will be 
rendered; or
    (2) If the Director determines that the person making the request is 
not a person who is eligible to receive a formal advisory opinion as 
provided in Sec. 2638.302, or that the subject of the request is not a 
matter upon which the Office issues formal advisory opinions as outlined 
by Sec. 2638.303, he or she shall so notify the person making the 
request.

When a formal advisory opinion will not be rendered, the Office of 
Government Ethics may provide other informational assistance to the 
person as appropriate. (See also Sec. 2638.312.)
    (b) If at any time after receipt of a request for a formal advisory 
opinion, the Director believes that additional relevant information is 
needed, he or she may seek such information directly from the person 
requesting the opinion or from other sources which may include the 
agency involved.
    (c) The person requesting the opinion may furnish the Office of 
Government Ethics with legal memoranda or other material relevant to the 
opinion requested.
    (d)(1) In the case of a request which involves an actual or apparent 
violation of any conflict of interest law embodied in 18 U.S.C. 202-209, 
the Director shall consult with the Criminal Division of the Department 
of Justice.
    (2) If after such consultation the Criminal Division determines that 
a criminal investigation will be undertaken, the Director shall take no 
further action with regard to that request pending a determination by 
the Criminal Division not to prosecute.
    (3) Upon receipt of a determination by the Criminal Division not to 
prosecute, the Director shall then follow the procedures for all other 
requests for formal advisory opinions set forth in this part.



Sec. 2638.306  Notice of requests.

    The Director shall provide notice to interested parties identified 
in a request which will be the subject of a formal advisory opinion that 
such an opinion will be rendered. Generally, the designated agency 
ethics official of the agency involved shall be notified of the request.



Sec. 2638.307  Written comment on requests.

    (a) To the extent practicable, the Director shall provide interested 
parties with an opportunity to submit written comment on a request for a 
formal advisory opinion. A time by which the comment should be received 
to be considered will be indicated with the notice that the request has 
been made.
    (b) Additional time in which to comment may be granted upon written 
request to or at the discretion of the Director. Such requests and all 
written comments shall be sent to the Office of Government Ethics, Suite 
500, 1201 New York Avenue NW., Washington, DC 20005-3917.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, 
and amended at 55 FR 27180, July 2, 1990]



Sec. 2638.308  Issuance.

    (a) A formal advisory opinion,
    (1) Which involves the application of any conflict of interest law 
embodied in 18 U.S.C. 202-209 to a transaction or activity which does 
not raise a question of an actual or apparent violation of this law but 
which raises an important matter of first impression, or
    (2) Which is issued following the procedure set forth in Sec. 
2638.305(d),


requires consultation by the Office of Government Ethics with the Office 
of Legal Counsel of the Department of Justice before it is issued.
    (b) An advisory opinion shall be considered issued when it is dated, 
numbered, and signed by the Director. Unless released by the person who 
made the request, the opinion will not become publicly available until 
information which identifies individuals involved and which is 
unnecessary to the complete understanding of the opinion has been 
deleted from the opinion and this version of the opinion is placed in a 
public reading file at the Office of Government Ethics. (See Sec. 
2638.310)

[[Page 629]]



Sec. 2638.309  Reliance on formal advisory opinions.

    (a) Any formal advisory opinion referred to in Sec. 2638.308(a) or 
any provisions or finding of a formal advisory opinion involving the 
application of the Act, Executive Order 11222 and the regulations 
promulgated pursuant to the Act or Executive Order, may be relied upon 
by:
    (1) Any person directly involved in the specific transaction or 
activity with respect to which such advisory opinion has been rendered, 
and
    (2) Any person directly involved in any specific transaction or 
activity which is indistinguishable in all its material aspects from the 
transaction or activity with respect to which such advisory opinion was 
rendered.
    (b) Any person who relies upon any provision or finding of any 
formal advisory opinion in accordance with paragraph (a) of this section 
and who acts in good faith in accordance with the provisions and 
findings of such opinion, shall not, as a result of such act, be subject 
to prosecution under 18 U.S.C. 202-209 or, in the case where the opinion 
is exculpatory, be subject to any administrative adverse action or civil 
action based upon legal authority cited in that opinion.



Sec. 2638.310  Public availability and publication of formal advisory opinions.

    (a) The Director shall make sufficient deletions in any formal 
advisory opinion so that unless necessary to the complete understanding 
of the opinion, the identity of any person involved is not disclosed. No 
deletion shall in any way affect the substance of the opinion.
    (b) A copy of this version of the opinion shall then be made 
available for public inspection within 10 working days after the 
issuance of the opinion at the Office of Government Ethics, Suite 500, 
1201 New York Avenue NW., Washington, DC 20005-3917.
    (c) The Director shall thereafter publish this version of the 
opinion.

[46 FR 2583, Jan. 9, 1981. Redesignated at 54 FR 50231, Dec. 5, 1989, 
and amended at 55 FR 27180, July 2, 1990]



Sec. 2638.311  Copies of published formal advisory opinions.

    Each designated agency ethics official shall receive a copy of each 
published opinion. Copies will also be available to the public from the 
Office of Government Ethics upon request at no more than cost.



Sec. 2638.312  Referral of requests.

    (a) If a designated agency ethics official receives a request for 
advice from a person and determines that the request may come within the 
criteria set forth in Sec. 2638.303, he or she shall contact the Office 
of Government Ethics concerning the request before referring the request 
to the Office. If after such consultation the Office of Government 
Ethics determines that the request should be the subject of a formal 
advisory opinion, the designated agency ethics official shall notify the 
person making the request of that determination and request the person's 
permission to refer the request to the Office of Government Ethics.
    (b) If the Director receives a request for an opinion which does not 
fulfill the criteria set forth in Sec. 2638.303, he or she may:
    (1) Furnish informational assistance to the person as provided in 
Sec. 2638.305(a), or
    (2) Refer the request to the appropriate designated agency ethics 
official.
    (c) In all instances covered by paragraphs (a) and (b) of this 
section, a referral will not be made in the case of questions regarding 
possible future employment plans of an individual making the request 
unless he or she is first notified and gives his or her consent or the 
request itself indicates that such a referral may be made.



Sec. 2638.313  Agency opinions.

    If the designated agency ethics official issues a written opinion 
concerning the application of 18 U.S.C. 202-209, he or she shall 
transmit a copy of that opinion to the Office of Government Ethics.

[[Page 630]]



     Subpart D_Correction of Executive Branch Agency Ethics Programs

    Source: 55 FR 1666, Jan. 18, 1990, unless otherwise noted.



Sec. 2638.401  In general.

    The Director of the Office of Government Ethics has authority under 
subsections 402(b)(9) and 402(f)(1) of the Ethics in Government Act to 
order action to correct deficiencies in agency ethics programs. These 
procedures are intended to be used to correct deficiencies in agency 
ethics programs that are not being addressed adequately by the agency. 
They are not intended to be used to deal with cases involving individual 
employees or former employees. See subpart E of this part. For purposes 
of this section, an agency ethics program shall include those matters 
that are the responsibility of agency heads and designated agency ethics 
officials under subpart B of this part and shall include the 
requirements under part 2634 of this chapter and part 735 of this title 
to establish public and nonpublic financial disclosure systems. In 
implementing these procedures, the Director may use any authority 
contained in the Ethics Act.



Sec. 2638.402  Corrective orders.

    (a) Notice. Where the Director has information indicating that an 
agency ethics program is not in full compliance with the requirements 
set forth in applicable statutes or regulations, the Director may issue 
a Notice of Deficiency to the designated agency ethics official and 
request an agency report under paragraph (b) of this section.
    (b) Agency report. Within such time as may be set forth in the 
Notice of Deficiency, the designated agency ethics official shall 
provide a written report to the Director that shall include relevant 
information about the agency's ethics program. The ethics official's 
report may include:
    (1) Information establishing that there is no deficiency;
    (2) An explanation of how any deficiency is being corrected; or
    (3) A plan for correcting any deficiency within a reasonable period 
of time.
    (c) Director's determination. The Director will make a determination 
based on the agency report.
    (1) If the Director determines that there is no deficiency, the 
designated agency ethics official will be so notified.
    (2) If the Director determines that appropriate steps are being 
taken or that the agency has presented an adequate plan for correcting 
the deficiency, the Director will so notify the designated agency ethics 
official and, in consultation with the designated agency ethics 
official, establish requirements for status reports, if necessary, and 
for notification when the deficiency has been corrected.
    (3) If the Director determines that a deficiency is not being 
corrected, the Director will issue an Order under paragraph (d) of this 
section.
    (d) Orders. An order issued by the Director will be addressed to the 
head of the agency with a copy to the designated agency ethics official 
and shall specify:
    (1) The deficiency in the agency ethics program that requires 
correction;
    (2) The basis upon which the Director has determined that a 
deficiency exists;
    (3) The corrective action required to remedy the deficiency; and
    (4) Any reporting requirements necessary to establish that 
corrective action has been accomplished.



Sec. 2638.403  Agency compliance.

    Within such time as may be set forth in the order, the agency head 
shall file a report with the Director detailing the corrective action 
taken. If corrective action cannot be accomplished within that time, the 
agency head shall submit a plan of corrective action for approval by the 
Director providing for appropriate status reports and notification of 
compliance. In either case, if the agency report or plan is deemed 
satisfactory, the Director will so inform the agency head. If the agency 
report or plan is insufficient, but only in minor respects, the Director 
may inform the agency head of the adjustments needed to bring the report 
or

[[Page 631]]

plan into compliance and a timeframe therefor; otherwise, the procedures 
under Sec. 2638.404 of this subpart will be invoked.



Sec. 2638.404  Report of noncompliance.

    If the agency fails to comply with an order issued under Sec. 
2638.402(d), the Director shall:
    (a) Notify the head of the agency of intent to furnish a report of 
noncompliance to the President and the Congress;
    (b) Provide the agency 14 calendar days within which to furnish 
written comments for submission with the report of noncompliance; and
    (c) Report the agency's noncompliance to the President and to the 
Congress.



 Subpart E_Corrective and Remedial Action in Cases Involving Individual 
                       Executive Agency Employees

    Source: 55 FR 1667, Jan. 18, 1990, unless otherwise noted.



Sec. 2638.501  In general.

    (a) Authority. The Director of the Office of Government Ethics has 
authority under subsections 402(b)(9) and 402(f)(2) of the Act to order 
corrective and remedial action with respect to individual employees to 
bring about compliance with applicable ethics provisions. Nothing in 
this subpart relieves an agency of its primary responsibility to ensure 
compliance.
    (b) Definitions. For the purpose of this subpart:
    (1) Ethics provision includes any rule, regulation or executive 
order relating to conflicts of interest or standards of conduct in the 
executive branch. The term excludes any statute that is contained in 
title 18 of the United States Code or which imposes a criminal penalty 
as well as any statute made applicable to a specific agency that 
mandates or proscribes conduct not otherwise the subject of 
Governmentwide standards. It excludes any matter covered by sections 101 
(k) and (m) of Executive Order 12674 that are within the cognizance of 
agency Inspectors General, the Office of Special Counsel or the Equal 
Employment Opportunity Commission.
    (2) Employee means any officer or employee, including a special 
Government employee, covered by any of the provisions contained in part 
735 of this title.
    (3) Head of an agency, in the case of an agency that is headed by a 
board, committee or other group of individuals, refers to the employee's 
appointing authority.
    (4) Corrective action means any action necessary to remedy a 
violation of an ethics provision including, but not limited to, recusal, 
divestiture, termination of an activity, restitution, or the creation of 
a qualified blind or diversified trust.
    (5) Disciplinary action includes the full range of disciplinary 
actions provided for by Office of Personnel Management regulations and 
instructions implementing authorities contained in title 5 of the United 
States Code or provided for in comparable authorities applicable to 
employees not subject to title 5.
    (6) The terms he, his and him include ``she,'' ``hers'' and ``her.''
    (c) Violations of criminal statutes. Nothing contained in this part 
gives the Director or any agency official authority to make a finding 
that any criminal statute relating to conflicts of interest is being or 
has been violated. If facts elicited under these procedures indicate 
that a criminal violation of any such provision is occurring or has 
occurred, the suspected violation will be referred for possible 
prosecution in accordance with 28 U.S.C. 535 and the reporting 
requirements set forth in Sec. 2638.603 of this chapter shall apply. 
Subsequent to referral, proceedings under this subpart may be initiated 
or continued at the discretion of the Director, after consultation with 
the appropriate investigatory or prosecutorial authorities.
    (d) National security. Proceedings under this subpart shall be 
conducted in accordance with applicable national security requirements.

[55 FR 1667, Jan. 18, 1990; as amended at 55 FR 21846, May 30, 1990]

[[Page 632]]



Sec. 2638.502  Recommendations and advice.

    The Director may make recommendations and provide advice to 
agencies, designated agency ethics officials and employees for the 
purpose of ensuring an employee's compliance with applicable ethics 
provisions. This authority may be used where there is doubt or a dispute 
regarding the applicability of an ethics provision or where the Director 
has information indicating that an ethics provision is being improperly 
interpreted. Recommendations may be made or advice provided on the 
Director's own initiative or at the Director's discretion in response to 
a written or oral request. As determined by the Director, the 
recommendation may be made or the advice given either orally or in 
writing. In addition, the Director shall afford an employee the 
opportunity for personal consultation, if practicable, regarding action 
required to be taken by the employee to achieve compliance with 
applicable ethics provisions.



Sec. 2638.503  Agency investigations.

    (a) Recommendation of investigation. If the Director has reason to 
believe that an employee is violating or has violated any ethics 
provision, the Director may recommend to the head of the agency that the 
agency conduct such investigation as is necessary to determine whether, 
in fact, a violation is occurring or has occurred and, where warranted, 
take appropriate disciplinary or corrective action. If the matter 
already has been investigated or if the facts are fully known to the 
agency and, in the opinion of the agency head, require no further 
investigation, the head of the agency shall notify the Director of that 
determination and shall promptly file the agency report required by 
paragraph (c) of this section.
    (1) If the employee involved is the head of an agency, the 
recommendation shall be made to the President and the procedures set 
forth in this section shall serve as guidance only.
    (2) Where there is reason to believe that an employee has given 
preferential treatment or failed to act impartially, this authority will 
not be used to initiate an investigation in the nature of a review or 
audit of the agency program in which the employee participated.
    (b) Initiation of investigation. The head of the agency shall notify 
the Director when the agency has initiated an investigation. Where it is 
anticipated that the investigation will not be completed within 60 
calendar days, the head of the agency will notify the Director of that 
fact and provide an explanation reasonably justifying additional time.
    (c) Agency report. The head of the agency shall file a report with 
the Director detailing findings of fact and disciplinary and/or 
corrective actions taken, if any.
    (d) Director's determination. The Director will make a determination 
based on the agency investigation and report.
    (1) If the Director determines that the agency has conducted an 
adequate investigation and has taken appropriate corrective and/or 
disciplinary action, the Director shall notify the agency that the 
matter is closed.
    (2) If the Director determines that the agency has conducted an 
adequate investigation and has recommended appropriate corrective and/or 
disciplinary action, the Director shall notify the agency that the 
matter will be closed upon notification that such action has been taken.
    (3) If the Director determines that the agency has not conducted an 
adequate investigation, the Director may recommend that the agency 
undertake further investigative effort.
    (4) If the Director determines that the agency has improperly 
interpreted an ethics provision or improperly applied an ethics 
provision to the facts of the case, the Director may, in accordance with 
Sec. 2638.502, provide advice and recommendations necessary to ensure 
compliance.
    (5) If the Director determines that the agency has taken or 
recommended inappropriate corrective or disciplinary action, the 
Director may notify the head of the agency of intent to institute 
proceedings under Sec. 2638.504 or Sec. 2638.505.
    (e) Notice of noncompliance. If the Director determines that the 
head of an agency has failed to conduct an adequate investigation within 
a reasonable period of time, the Director shall

[[Page 633]]

notify the President of that determination. A Notice of Noncompliance 
will not be based upon a determination that the agency has improperly 
interpreted or applied an ethics provision or that the agency has taken 
or recommended inappropriate corrective or disciplinary action.



Sec. 2638.504  Director's finding.

    (a) In general. If the Director has reason to believe that an 
employee is violating or has violated an ethics provision, the Director 
may initiate proceedings under this section for the purpose of making a 
finding as to whether there is or has been such a violation. In the 
context of such proceedings, the Office of Government Ethics has the 
burden of proof to establish that the employee is violating or has 
violated an ethics provision. The procedures contained in this section 
do not apply to findings or orders for action made to obtain compliance 
with the financial disclosure requirements in title II of the Ethics 
Act. For those findings and orders, the procedures contained in section 
206 of the Act shall apply.
    (b) Investigation. The Director may initiate such investigation as 
is necessary to determine whether proceedings under this section are 
warranted. Ordinarily, a determination to proceed will be based upon an 
agency report of investigation filed under Sec. 2638.503(c) and a 
determination by the Director under Sec. 2638.503(d)(5) that the agency 
has taken or recommended inappropriate corrective or disciplinary 
action.
    (c) Notice. The employee shall be served personally or by United 
States mail with written notice of commencement of proceedings under 
this section. A copy of the notice shall be provided to the head of the 
agency and to the designated agency ethics official. The notice shall be 
signed by the Director and shall include the following:
    (1) A brief statement setting forth the basis for a possible ethics 
violation;
    (2) A copy of this section; and
    (3) The date by which the employee's comments must be submitted.
    (d) Employee comments. The respondent employee has the right to 
comment on the alleged violation of an ethics provision by submission of 
evidence or arguments. As determined by the Director, the submission may 
be made orally or in writing. In the absence of an extension granted by 
the Director for good cause shown, comments shall be submitted within 
the time set forth in the notice
    (e) Finding. The Director will make a written finding as to whether 
a violation of any ethics provision has occured or is occurring. The 
finding will include a statement of the facts upon which the finding is 
based and a reference to the specific ethics provision in issue. A copy 
of the finding will be provided to the respondent employee, the head of 
the agency and the designated agency ethics official.



Sec. 2638.505  Director's decision and order.

    (a) In general. Where the Director has reason to believe that an 
employee is violating an ethics provision, the Director may, subject to 
the procedures set forth in this section, issue an order that the 
employee take specific corrective action to remedy the violation. 
Ordinarily, a determination to proceed under this paragraph (a) will be 
based on the Director's finding under Sec. 2638.504(e) that an ethics 
violation has occurred or is occurring and reason to believe that the 
violation is continuing. The procedures contained in this section do not 
apply to findings or orders for action made to obtain compliance with 
the financial disclosure requirements in title II of the Ethics Act. For 
those findings and orders, the procedures contained in section 206 of 
the Act shall apply.
    (b) Notice. The employee will be served, personally or by United 
States mail, with notice of proceedings to determine whether a violation 
of an ethics provision is occurring and whether corrective action is 
necessary to end the violation. A copy of the notice shall be provided 
to the head of the employee's agency and the designated agency ethics 
official thereof. The notice shall specify the employee's right to 
present evidence or arguments either in writing or, at the employee's 
written request, at a hearing conducted on the record. The notice shall 
be signed by the Director and shall include:

[[Page 634]]

    (1) A brief statement setting forth the basis for a possible ethics 
violation;
    (2) Where applicable, a copy of the Director's finding under Sec. 
2638.504(e);
    (3) A statement of the authority under which proceedings are to be 
conducted, together with a copy of this section; and
    (4) The date by which the employee must, by written notification to 
the Director, elect to present evidence and arguments either at a 
hearing or in writing.
    (c) Separation of functions. Once the Director has issued a notice 
of proceedings and if the respondent employee has elected to have a 
hearing conducted on the record, the General Counsel of the Office of 
Government Ethics shall designate attorneys of the Office of Government 
Ethics to participate on behalf of the Office in the proceedings, 
including the investigation and presentation of the evidence at the 
hearing. During this time period, the General Counsel of the Office of 
Government Ethics shall serve as Advisor to the Director and will not 
supervise Office of Government Ethics attorneys who are charged with the 
investigation and presentation of the evidence in the pending matter. A 
Deputy General Counsel shall supervise the Office attorneys responsible 
for the investigation and presentation of the evidence during this time 
period. No officer, employee, or agent engaged in the performance of 
investigative or advocacy functions for the Office of Government Ethics 
shall, in that or a factually related case, participate or advise in the 
decision, recommended decision or Office review except as witness or 
counsel in the proceedings. The Deputy General Counsel may request the 
views or report of the designated agency ethics official of the 
employee's agency when necessary to develop the record.
    (d) Written submissions. Where the respondent employee elects to 
submit evidence and arguments in writing, he will be given a period of 
30 calendar days from the date of the notice within which to make a 
submission.
    (e) Hearings. If the respondent employee demands a hearing conducted 
on the record, he will be given written notice of the time and place of 
the hearing. The hearing will be convened within a reasonable period of 
time and will be conducted on the record. An administrative law judge 
who has been appointed under 5 U.S.C. 3105 shall act as the presiding 
official at the hearing. Hearings will be as informal as may be 
reasonably appropriate under all the circumstances. Evidence and 
testimony, although not ordinarily admissible under rules of evidence, 
may be received subject to the discretion of the administrative law 
judge. Immaterial, irrelevant or unduly repetitious evidence may be 
excluded. The parties may stipulate as to any facts or testimony. The 
testimony of witnesses shall be under oath and witnesses shall be 
subject to cross-examination. The administrative law judge shall make 
such rulings with respect to the conduct of the hearings as 
circumstances may require to ensure the orderly and expeditious 
presentation of evidence in a manner fair to the parties and consistent 
with these regulations and requirements of due process of law. The 
following procedures will apply to the hearing:
    (1) Conference. The respondent employee or the designated attorney 
for the Office of Government Ethics may request, and the administrative 
law judge, on his own initiative or in response to a request, may set a 
prehearing conference for such purposes as the administrative law judge 
deems necessary.
    (2) Public hearings. Hearings shall generally be open to the public. 
However, the administrative law judge may order a hearing or any part 
thereof closed, on his own initiative or upon motion of a party or other 
affected person, where to do so would be in the best interests of 
national security, the respondent employee, a witness, the public or 
other affected persons. Unless specifically excluded by the 
administrative law judge, the designated agency ethics official of the 
employee's agency shall be permitted to attend a closed hearing. Any 
order closing the hearing or any part thereof shall set forth the 
reasons for the administrative law judge's decision. Any objections 
thereto shall be made a part of the record. If a party or affected 
person's request to close the hearing or

[[Page 635]]

any part thereof is denied by the administrative law judge, that request 
shall be immediately appealable to the Director and the hearing shall be 
held in abeyance pending resolution of the appeal. The notice of appeal 
shall be filed in writing, not to exceed 10 pages exclusive of 
attachments, with the Director within 3 working days of the 
administrative law judge's denial of the request. The Director shall 
provide an opportunity for an oral hearing on the appeal conducted on 
the record and shall decide the appeal within 3 working days following 
receipt of the notice of appeal.
    (3) Continuances and delays. The authority to adjourn the hearing 
shall rest with the administrative law judge. Continuances will be 
allowed only for the most compelling reasons.
    (4) Hearing record. Testimony and arguments shall be recorded 
verbatim and preserved for a reasonable period of time. When requested, 
transcripts of the testimony and arguments and copies of all documentary 
exhibits will be made available to the respondent employee upon the 
payment of the reasonable costs thereof.
    (5) Representation. A party is entitled to appear in person or by or 
with counsel.
    (6) Witnesses. The administrative law judge does not have the 
authority to subpoena witnesses. However, the respondent employee and 
the Office of Government Ethics may call witnesses whose testimony is 
relevant and necessary to the proceedings. Witnesses who are to testify 
or to produce documents in their official capacities will be assigned to 
do so by their agencies pursuant to 5 U.S.C. 6322 and will be paid 
travel expenses under 5 U.S.C. 5702. Witnesses who are not Federal 
employees may be issued invitational travel orders under 5 U.S.C. 5703 
based on a determination by the administrative law judge that their 
testimony is essential to the proceedings.
    (7) Proof. The Office of Government Ethics has the burden of proof 
to establish that the respondent employee is committing a violation of 
an ethics provision and that corrective action is necessary to end the 
violation.
    (8) Evidence. A party is entitled to present his case or defense by 
oral or documentary evidence, to submit rebuttal evidence, and to 
conduct cross-examination. The respondent employee and the designated 
attorney for the Office of Government Ethics may offer evidence, 
arguments, testimony of witnesses, affidavits or sworn statements.
    (f) Recommended decision. At the conclusion of the hearing, the 
administrative law judge may request that the parties submit proposed 
findings and conclusions within a reasonable period of time. After 
receipt of the proposed findings and conclusions, if any, the 
administrative law judge shall certify the entire record to the Director 
for decision. When so certifying the record, the administrative law 
judge shall make a recommended decision that includes his written 
findings of fact and conclusions of law with respect to material issues.
    (g) Decision and order. The Director's decision shall include 
written findings and conclusions with respect to all material issues and 
shall be supported by substantial evidence of record. The order shall 
state the corrective action, if any, to be taken by the respondent 
employee in order to remedy a violation of an ethics provision and shall 
establish a reasonable period of time within which the respondent 
employee must commence and complete the corrective action. A copy of the 
decision and order shall be furnished to the respondent employee and to 
the head of the agency and the designated agency ethics official, or 
where the respondent employee is the head of an agency, to the 
President.
    (1) Preliminary to issuing a decision and order, the Director may 
request that comments on the recommended decision be provided by the 
designated agency ethics official of the employee's agency.
    (2) Where the respondent employee has elected to have a hearing 
conducted on the record, the Director shall issue a decision and order 
as soon as practicable following receipt of the certified record and the 
administrative law judge's recommended decision.
    (3) Where the respondent employee has elected to make a written 
submission under paragraph (d) of this section or has chosen to make no 
submission and has not requested a hearing, the

[[Page 636]]

Director will issue a decision and order as soon as practicable 
following receipt of all materials of record.
    (4) In addition to the decision and order and any finding issued 
under Sec. 2638.504(e), the record will include, where applicable, all 
written submission under Sec. 2638.504(d) and Sec. 2638.505(d), a 
record of the hearing, all documentary evidence introduced at the 
hearing, any proposed findings and conclusions submitted by the parties 
and the administrative law judge's recommended decision.
    (h) Compliance with the order. The respondent employee shall comply 
with the Director's order by commencing and completing the corrective 
action within the time specified in the order and by furnishing the 
Director with satisfactory evidence of compliance.
    (i) Notice of noncompliance. Where the respondent employee fails to 
comply with the Director's order within the time specified in the order, 
the Director will provide the head of the respondent employee's agency 
with written notice of the respondent employee's failure to comply. 
Where the respondent employee is the head of the agency, the Director 
shall submit such notification to the President.

[55 FR 1667, Jan. 18, 1990, as amended at 55 FR 21846, May 30, 1990]



Sec. 2638.506  Director's recommendation.

    (a) Where the Director has made a finding under Sec. 2638.504(e) or 
has issued a decision and order under Sec. 2638.505(g) that an ethics 
provision is being or has been violated, the Director may recommend to 
the head of the respondent employee's agency that appropriate 
disciplinary action be taken. If the respondent employee is the head of 
an agency, the Director shall make any such recommendation to the 
President and the procedures contained in this section will serve as 
guidance only.
    (b) Agency response. Within the time specified by the Director in 
his recommendation, the head of the agency shall notify the Director in 
writing of the action taken. If the action cannot be accomplished within 
the time specified, the head of the agency shall notify the Director in 
writing of the time needed for the action to be taken, and, thereafter, 
will provide appropriate notice of the disciplinary action taken.
    (c) Notice of noncompliance. If the Director determines that the 
head of an agency has not taken appropriate disciplinary action within a 
reasonable period of time after the Director has recommended such 
action, the Director may notify the President of that determination in 
writing.



                Subpart F_Executive Branch Agency Reports

    Source: 55 FR 1670, Jan. 18, 1990, unless otherwise noted.



Sec. 2638.601  In general.

    Agencies are required by section 402(b)(10) of the Act to file such 
reports as the Director of the Office of Government Ethics deems 
necessary. Section 402(e) contains specific requirements for annual 
reports and for reporting cases referred for possible prosecution under 
28 U.S.C. 535. Reporting requirements imposed under this subpart are in 
addition to any requirements for reports or opinions contained in part 
735 of this title, parts 2633 through 2637 of this chapter, or otherwise 
under this chapter, and in other subparts of this part.



Sec. 2638.602  Annual agency reports.

    (a) On or before February 1 of each year, each agency shall file 
with the Office of Government Ethics a report containing information 
about the agency's ethics program. Detailed reporting requirements will 
be specified in instructions to be issued by the Director in advance of 
the first day of the period to be covered by the annual report. Annual 
agency reports will cover the prior calendar year and, as a minimum, 
will include the following:
    (1) The name, position, title and duties of each official who 
performs any or all of the duties of the designated agency ethics 
official or alternate;
    (2) Statistics regarding public and nonpublic (confidential) 
financial disclosure report filings;
    (3) A description and evaluation of the agency's program of ethics 
education, training and counseling, including the number of training 
courses given, the subject matters covered,

[[Page 637]]

training materials distributed and counseling services offered.
    (b) Failure to timely file the report required by paragraph (a) of 
this section may be cause to invoke the procedures at subpart D of this 
part for correction of agency programs.



Sec. 2638.603  Reports of referral for possible prosecution.

    (a) In general. Section 535 of title 28 of the United States Code 
imposes upon every agency a duty to report to the Attorney General any 
information, allegations or complaints relating to violations of title 
18 of the United States Code involving Government officers and 
employees, including possible violations of 18 U.S.C. 207 by former 
officers and employees. Guidelines issued by the Attorney General 
require reporting of such allegations or complaints to the local office 
of the appropriate investigative agency, the United States Attorney for 
the district in which the violation occurred or is occurring and the 
appropriate division of the Department of Justice.
    (b) Report of referral. When any matter involving an alleged 
violation of Federal conflict of interest law is referred pursuant to 28 
U.S.C. 535, the agency shall concurrently notify the Director of the 
Office of Government Ethics of the referral and provide a copy of the 
referral document, unless such notification or disclosure would 
otherwise be prohibited by law.
    (c) Disposition reports. (1) Where there has been notice that the 
matter reported under paragraph (b) of this section will not be 
prosecuted, the agency shall promptly notify the Director of that fact, 
the date of the decision and any disciplinary or corrective action 
initiated, taken or to be taken by the agency.
    (2) When the agency is notified or learns from the Department of 
Justice that an indictment has been handed up and signed or an 
information has been filed, the agency shall promptly report that fact 
to the Director. Thereafter, the agency shall promptly notify the 
Director of the final disposition of the prosecution and of any 
disciplinary or corrective action initiated, taken or to be taken by the 
agency.
    (3) When disciplinary or corrective action is initiated or is to be 
taken, the agency will notify the Director of the final disposition of 
the matter.

[55 FR 1670, Jan. 18, 1990, as amended at 55 FR 21847, May 30, 1990]



           Subpart G_Executive Agency Ethics Training Programs

    Source: 65 FR 7279, Feb. 14, 2000, unless otherwise noted.



Sec. 2638.701  Overview.

    Each agency must have an ethics training program to teach employees 
about ethics laws and rules and to tell them where to go for ethics 
advice. The training program must include, at least, an initial agency 
ethics orientation for all employees and annual ethics training for 
covered employees.



Sec. 2638.702  Definitions.

    For purposes of this subpart:
    Agency supplemental standards means those regulations published by 
an agency in concurrence with the Office of Government Ethics under 5 
CFR 2635.105.
    Employee includes officers of the uniformed services and special 
Government employees, as defined in 18 U.S.C. 202(a).
    Federal conflict of interest statutes means 18 U.S.C. 202-203, 205, 
and 207-209.
    Principles means the Principles of Ethical Conduct, Part I of 
Executive Order 12674, as modified by Executive Order 12731.
    Standards means the Standards of Ethical Conduct for Employees of 
the Executive Branch, 5 CFR part 2635.



Sec. 2638.703  Initial agency ethics orientation for all employees.

    Within 90 days from the time an employee begins work for an agency, 
the agency must do the following:
    (a) Ethics materials. The agency must give the employee:
    (1) The Standards and any agency supplemental standards to keep or 
review; or
    (2) Summaries of the Standards, any agency supplemental standards, 
and the Principles to keep.


[[Page 638]]


    Note to paragraph (a): If the agency does not give the employee the 
Standards and any agency supplemental standards to keep, the complete 
text of both must be readily available in the employee's immediate 
office area.

    (b) Contact persons. The agency must give the employee the names, 
titles, and office addresses and telephone numbers of the designated 
agency ethics official and other agency officials available to advise 
the employee on ethics issues.
    (c) One hour to review. The agency must give the employee at least 
one hour of official duty time to review the items described above. This 
one-hour requirement may be reduced by any amount of time the employee 
receives verbal ethics training in the same 90-day period.



Sec. 2638.704  Annual ethics training for public filers.

    (a) Covered employees. Each calendar year, agencies must give verbal 
ethics training to employees who are required by 5 CFR part 2634 to file 
public financial disclosure reports.
    (b) Content of training. Agencies are encouraged to vary the content 
of verbal training from year to year but the training must include, at 
least, a review of:
    (1) The Principles;
    (2) The Standards;
    (3) Any agency supplemental standards;
    (4) The Federal conflict of interest statutes; and
    (5) The names, titles, and office addresses and telephone numbers of 
the designated agency ethics official and other agency ethics officials 
available to advise the employee on ethics issues.
    (c) Length and presentation of training. Employees must be given at 
least one hour of official duty time for verbal training. The training 
must be:
    (1) Presented by a qualified instructor; or
    (2) Prepared by a qualified instructor and presented by 
telecommunications, computer, audiotape, or videotape.
    (d) Availability of qualified instructor. A qualified instructor 
must be available during and immediately after the training. Qualified 
instructors are:
    (1) The designated agency ethics official;
    (2) The alternate agency ethics official;
    (3) A deputy agency ethics official;
    (4) Employees of the Office of Government Ethics (OGE) designated by 
OGE; and
    (5) Persons whom the designated agency ethics official (or his or 
her designee) determines are qualified to respond to ethics questions 
raised during the training.

    Example 1 to paragraph (d): An agency provides annual ethics 
training for public filers in a regional office by establishing a video 
conference link between the regional office and a qualified instructor 
in the headquarters office. The video link provides for direct and 
immediate communication between the qualified instructor and the 
employees receiving the training. Even though the qualified instructor 
is not physically located in the room where the training occurs, the 
qualified instructor is available.
    Example 2 to paragraph (d): The agency described in the preceding 
example provides videotaped training instead of training through a video 
conference link. The employees viewing the videotape are provided with a 
telephone at the training site and the telephone number of a qualified 
instructor who is standing by during and immediately after the training 
to answer any questions. Under these circumstances, a qualified 
instructor is available.
    Example 3 to paragraph (d): In the preceding example, if no 
telephone had been provided at the training site or if a qualified 
instructor was not standing by to respond to any questions raised, there 
would not be a qualified instructor available. Merely providing the 
phone number of the qualified instructor would not satisfy the 
requirement that a qualified instructor be available.

    (e) Exceptions. Verbal training without a qualified instructor 
available or written training prepared by a qualified instructor will 
satisfy the verbal training requirement for a public filer (or group of 
public filers) if one hour of official duty time is provided for the 
training and:
    (1) The designated agency ethics official (or his or her designee) 
makes a written determination that it would be impractical to provide 
verbal training with a qualified instructor available; or
    (2) The employee is a special Government employee.

    Example to paragraph (e)(1): The only public filer in the American 
Embassy in Ulan

[[Page 639]]

Bator, Mongolia is the Ambassador. Because of the difference in time 
zones and the uncertainty of the Ambassador's schedule, the designated 
agency ethics official for the State Department is justified in making a 
written determination that it would be impractical to provide the 
Ambassador with verbal training. In this case, the Ambassador may 
receive written training prepared by a qualified instructor.



Sec. 2638.705  Annual ethics training for other employees.

    (a) Covered employees. Each calendar year, agencies must train the 
following employees:
    (1) Employees appointed by the President;
    (2) Employees of the Executive Office of the President;
    (3) Employees defined as confidential filers in 5 CFR 2634.904;
    (4) Employees designated by their agency under 5 CFR 2634.601(b) to 
file confidential financial disclosure reports;
    (5) Contracting officers, as defined in 41 U.S.C. 423(f)(5); and
    (6) Other employees designated by the head of the agency or his or 
her designee based on their official duties.

    Note to paragraph (a):
    Employees described above who are also public filers must receive 
ethics training as provided in Sec. 2638.704.

    (b) Content of training. The requirements for the contents of annual 
training are the same as the requirements in Sec. 2638.704(b).
    (c) Length and presentation of training. The training for covered 
employees must consist of:
    (1) A minimum of one hour of official duty time for verbal training 
at least once every three years. The verbal training must be presented 
by a qualified instructor or prepared by a qualified instructor and 
presented by telecommunications, computer, audiotape, or videotape; and
    (2) An amount of official duty time the agency determines is 
sufficient for written training in the years in which the employee does 
not receive verbal training. The written training must be prepared by a 
qualified instructor. The employee's initial ethics orientation may 
satisfy the written training requirement for the same calendar year.
    (d) Exceptions. Written ethics training prepared by a qualified 
instructor will satisfy the verbal training requirement for a covered 
employee (or group of covered employees) if sufficient official duty 
time is provided for the training and:
    (1) The designated agency ethics official (or his or her designee) 
makes a written determination that verbal training would be impractical;
    (2) The employee is a special Government employee expected to work 
60 or fewer days in a calendar year;
    (3) The employee is an officer in the uniformed services serving on 
active duty for 30 or fewer consecutive days; or
    (4) The employee is designated under paragraph (a)(6) of this 
section to receive training.



Sec. 2638.706  Agency's written plan for annual ethics training.

    (a) The designated agency ethics official (or his or her designee) 
is responsible for directing the agency's ethics training program. The 
designated agency ethics official (or his or her designee) must develop 
a written plan each year for the agency's annual training program.
    (b) The written plan must be completed by the beginning of each 
calendar year.
    (c) The written plan must contain:
    (1) A brief description of the agency's annual training.
    (2) Estimates of the number of employees who will receive verbal 
training according to the following table:

------------------------------------------------------------------------
         Employees who will receive verbal training             Number
------------------------------------------------------------------------
(i) Public filers..........................................
(ii) Employees other than public filers....................
------------------------------------------------------------------------

    (3) An estimate of the number of employees who will receive written 
training according to the following table:

------------------------------------------------------------------------
        Employees who will receive written training             Number
------------------------------------------------------------------------
Employees other than public filers who will receive
 training under Sec.  2638.705(c)(2)......................
------------------------------------------------------------------------

    (4) Estimates of the number of employees who will receive written 
training instead of verbal training according to the following table:

[[Page 640]]



------------------------------------------------------------------------
   Employees who will receive written training instead of
                      verbal training                           Number
------------------------------------------------------------------------
(i) Public filers who qualify for the exception in Sec.
 2638.704(e)(1)............................................
(ii) Public filers who qualify for the exception in Sec.
 2638.704(e)(2)............................................
(iii) Employees other than public filers who qualify for
 the exception in Sec.  2638.705(d)(1)....................
(iv) Employees other than public filers who qualify for the
 exception in Sec.  2638.705(d)(2)........................
(v) Employees other than public filers who qualify for the
 exception in Sec.  2638.705(d)(3)........................
(vi) Employees other than public filers who qualify for the
 exception in Sec.  2638.705(d)(4)........................
------------------------------------------------------------------------

    (d) The written plan may contain any other information that the 
designated agency ethics official believes will assist the Office of 
Government Ethics in reviewing the agency's training program.



PART 2640_INTERPRETATION, EXEMPTIONS AND WAIVER GUIDANCE CONCERNING 18 U.S.C. 

208 (ACTS AFFECTING A PERSONAL FINANCIAL INTEREST)--Table of Contents




                      Subpart A_General Provisions

Sec.
2640.101 Purpose.
2640.102 Definitions.
2640.103 Prohibition.

          Subpart B_Exemptions Pursuant to 18 U.S.C. 208(b)(2)

2640.201 Exemptions for interests in mutual funds, unit investment 
          trusts, and employee benefit plans.
2640.202 Exemptions for interests in securities.
2640.203 Miscellaneous exemptions.
2640.204 Prohibited financial interests.
2640.205 Employee responsibility.
2640.206 Existing agency exemptions.

                      Subpart C_Individual Waivers

2640.301 Waivers issued pursuant to 18 U.S.C. 208(b)(1).
2640.302 Waivers issued pursuant to 18 U.S.C. 208(b)(3).
2640.303 Consultation and notification regarding waivers.
2640.304 Public availability of agency waivers.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 18 
U.S.C. 208; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    Source: 61 FR 66841, Dec. 18, 1996, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2640.101  Purpose.

    18 U.S.C. 208(a) prohibits an officer or employee of the executive 
branch, of any independent agency of the United States, of the District 
of Columbia, or Federal Reserve bank director, officer, or employee, or 
any special Government employee from participating in an official 
capacity in particular matters in which he has a personal financial 
interest, or in which certain persons or organizations with which he is 
affiliated have a financial interest. The statute is intended to prevent 
an employee from allowing personal interests to affect his official 
actions, and to protect governmental processes from actual or apparent 
conflicts of interests. However, in certain cases, the nature and size 
of the financial interest and the nature of the matter in which the 
employee would act are unlikely to affect an employee's official 
actions. Accordingly, the statute permits waivers of the 
disqualification provision in certain cases, either on an individual 
basis or pursuant to general regulation. Section 208(b)(2) provides that 
the Director of the Office of Government Ethics may, by regulation, 
exempt from the general prohibition, financial interests which are too 
remote or too inconsequential to affect the integrity of the services of 
the employees to which the prohibition applies. The regulations in this 
part describe those financial interests. This part also provides 
guidance to agencies on the factors to consider when issuing individual 
waivers under 18 U.S.C. 208 (b)(1) or (b)(3), and provides an 
interpretation of 18 U.S.C. 208(a).



Sec. 2640.102  Definitions.

    For purposes of this part:
    (a) Diversified means that the fund, trust or plan does not have a 
stated policy of concentrating its investments in any industry, 
business, single country other than the United States, or bonds of a 
single State within the United States and, in the case of an employee 
benefit plan, means that the plan's trustee has a written policy of 
varying plan investments.
    Note to paragraph (a): A mutual fund is diversified for purposes of 
this part if it does

[[Page 641]]

not have a policy of concentrating its investments in an industry, 
business, country other than the United States, or single State within 
the United States. Whether a mutual fund meets this standard may be 
determined by checking the fund's prospectus or by calling a broker or 
the manager of the fund. An employee benefit plan is diversified if the 
plan manager has a written policy of varying assets. This policy might 
be found in materials describing the plan or may be obtained in a 
written statement from the plan manager. It is important to note that a 
mutual fund or employee benefit plan that is diversified for purposes of 
this part may not necessarily be an excepted investment fund (EIF) for 
purposes of reporting financial interests pursuant to 5 CFR 2634.310(c) 
and 2634.907(i)(3). In some cases, an employee may have to report the 
underlying assets of a fund or plan on his financial disclosure 
statement even though an exemption set forth in this part would permit 
the employee to participate in a matter affecting the underlying assets 
of the fund or plan. Conversely, there may be situations in which no 
exemption in this part is applicable to the assets of a fund or plan 
which is properly reported as an EIF on the employee's financial 
disclosure statement.
    (b) Employee means an officer or employee of the executive branch of 
the United States, or of any independent agency of the United States, a 
Federal Reserve bank director, officer, or employee, or an officer or 
employee of the District of Columbia. The term also includes a special 
Government employee as defined in 18 U.S.C. 202.
    (c) Employee benefit plan means a plan as defined in section 3(3) of 
the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1002(3), 
and that has more than one participant. An employee benefit plan is any 
plan, fund or program established or maintained by an employer or an 
employee organization, or both, to provide its participants medical, 
disability, death, unemployment, or vacation benefits, training 
programs, day care centers, scholarship funds, prepaid legal services, 
deferred income, or retirement income.
    (d) He, his, and him include she, hers, and her.
    (e) Holdings means portfolio of investments.
    (f) Independent trustee means a trustee who is independent of the 
sponsor and the participants in a plan, or is a registered investment 
advisor.
    (g) Institution of higher education means an educational institution 
as defined in 20 U.S.C. 1141(a).
    (h) Issuer means a person who issues or proposes to issue any 
security, or has any outstanding security which it has issued.
    (i) Long-term Federal Government security means a bond or note, 
except for a U.S. Savings bond, with a maturity of more than one year 
issued by the United States Treasury pursuant to 31 U.S.C. chapter 31.
    (j) Municipal security means direct obligation of, or obligation 
guaranteed as to principal or interest by, a State (or any of its 
political subdivisions, or any municipal corporate instrumentality of 
one or more States), or the District of Columbia, Puerto Rico, the 
Virgin Islands, or any other possession of the United States.
    (k) Mutual fund means an entity which is registered as a management 
company under the Investment Company Act of 1940, as amended (15 U.S.C. 
80a-1 et seq.). For purposes of this part, the term mutual fund includes 
open-end and closed-end mutual funds and registered money market funds.
    (l) Particular matter involving specific parties includes any 
judicial or other proceeding, application, request for a ruling or other 
determination, contract, claim, controversy, investigation, charge, 
accusation, arrest or other particular matter involving a specific party 
or parties. The term typically involves a specific proceeding affecting 
the legal rights of the parties, or an isolatable transaction or related 
set of transactions between identified parties.
    (m) Particular matter of general applicability means a particular 
matter that is focused on the interests of a discrete and identifiable 
class of persons, but does not involve specific parties.
    (n) Pension plan means any plan, fund or program maintained by an 
employer or an employee organization, or both, to provide retirement 
income to employees, or which results in deferral of income for periods 
extending to, or beyond, termination of employment.
    (o) Person means an individual, corporation, company, association, 
firm, partnership, society or any other organization or institution.

[[Page 642]]

    (p) Publicly traded security means a security as defined in 
paragraph (r) of this section and which is:
    (1) Registered with the Securities and Exchange Commission pursuant 
to section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l) and 
listed on a national or regional securities exchange or traded through 
NASDAQ;
    (2) Issued by an investment company registered pursuant to section 8 
of the Investment Company Act of 1940, as amended (15 U.S.C. 80a-8); or
    (3) A corporate bond registered as an offering with the Securities 
and Exchange Commission under section 12 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78l) and issued by an entity whose stock is a 
publicly traded security.
    Note to paragraph (p): National securities exchanges include the 
American Stock Exchange and the New York Stock Exchange. Regional 
exchanges include Boston, Cincinnati, Intermountain (Salt Lake City), 
Midwest (Chicago), Pacific (Los Angeles and San Francisco), Philadelphia 
(Philadelphia and Miami), and Spokane stock exchanges.
    (q) Sector mutual fund means a mutual fund that concentrates its 
investments in an industry, business, single country other than the 
United States, or bonds of a single State within the United States.
    (r) Security means common stock, preferred stock, corporate bond, 
municipal security, long-term Federal Government security, and limited 
partnership interest. The term also includes ``mutual fund'' for 
purposes of Sec. 2640.202(e) and (f) and Sec. 2640.203(a).
    (s) Short-term Federal Government security means a bill with a 
maturity of one year or less issued by the United States Treasury 
pursuant to 31 U.S.C. chapter 31.
    (t) Special Government employee means those executive branch 
officers or employees specified in 18 U.S.C. 202(a). A special 
Government employee is retained, designated, appointed or employed to 
perform temporary duties either on a full-time or intermittent basis, 
with or without compensation, for a period not to exceed 130 days during 
any consecutive 365-day period.
    (u) Unit investment trust means an investment company as defined in 
15 U.S.C. 80a-4(2) that is a regulated investment company under 26 
U.S.C. 851.
    (v) United States Savings bond means a savings bond issued by the 
United States Treasury pursuant to 31 U.S.C. 3105.

[61 FR 66841, Dec. 18, 1996, as amended at 67 FR 12445, Mar. 19, 2002; 
71 FR 28239, May 16, 2006]



Sec. 2640.103  Prohibition.

    (a) Statutory prohibition. Unless permitted by 18 U.S.C. 208(b) (1)-
(4), an employee is prohibited by 18 U.S.C. 208(a) from participating 
personally and substantially in an official capacity in any particular 
matter in which, to his knowledge, he or any other person specified in 
the statute has a financial interest, if the particular matter will have 
a direct and predictable effect on that interest. The restrictions of 18 
U.S.C. 208 are described more fully in 5 CFR 2635.401 and 2635.402.
    (1) Particular matter. The term ``particular matter'' includes only 
matters that involve deliberation, decision, or action that is focused 
upon the interests of specific persons, or a discrete and identifiable 
class of persons. The term may include matters which do not involve 
formal parties and may extend to legislation or policy making that is 
narrowly focused on the interests of a discrete and identifiable class 
of persons. It does not, however, cover consideration or adoption of 
broad policy options directed to the interests of a large and diverse 
group of persons. The particular matters covered by this part include a 
judicial or other proceeding, application or request for a ruling or 
other determination, contract, claim, controversy, charge, accusation or 
arrest.

    Example 1: The Overseas Private Investment Corporation decides to 
hire a contractor to conduct EEO training for its employees. The award 
of a contract for training services is a particular matter.
    Example 2: The spouse of a high level official of the Internal 
Revenue Service (IRS) requests a meeting on behalf of her client (a 
major U.S. corporation) with IRS officials to discuss a provision of IRS 
regulations governing depreciation of equipment. The spouse will be paid 
a fee by the corporation for arranging and attending the meeting. The 
consideration of the spouse's request and the decision to hold the 
meeting are particular matters in which the spouse has a financial 
interest.

[[Page 643]]

    Example 3: A regulation published by the Department of Agriculture 
applicable only to companies that operate meat packing plants is a 
particular matter.
    Example 4: A change by the Department of Labor to health and safety 
regulations applicable to all employers in the United States is not a 
particular matter. The change in the regulations is directed to the 
interests of a large and diverse group of persons.
    Example 5: The allocation of additional resources to the 
investigation and prosecution of white collar crime by the Department of 
Justice is not a particular matter. Similarly, deliberations on the 
general merits of an omnibus bill such as the Tax Reform Act of 1986 are 
not sufficiently focused on the interests of specific persons, or a 
discrete and identifiable group of persons to constitute participation 
in a particular matter.
    Example 6: The recommendations of the Council of Economic Advisors 
to the President about appropriate policies to maintain economic growth 
and stability are not particular matters. Discussions about economic 
growth policies are directed to the interests of a large and diverse 
group of persons.
    Example 7: The formulation and implementation of the response of the 
United States to the military invasion of a U.S. ally is not a 
particular matter. General deliberations, decisions and actions 
concerning a response are based on a consideration of the political, 
military, diplomatic and economic interests of every sector of society 
and are too diffuse to be focused on the interests of specific 
individuals or entities. However, at the time consideration is given to 
actions focused on specific individuals or entities, or a discrete and 
identifiable class of individuals or entities, the matters under 
consideration would be particular matters. These would include, for 
example, discussions whether to close a particular oil pumping station 
or pipeline in the area where hostilities are taking place, or a 
decision to seize a particular oil field or oil tanker.
    Example 8: A legislative proposal for broad health care reform is 
not a particular matter because it is not focused on the interests of 
specific persons, or a discrete and identifiable class of persons. It is 
intended to affect every person in the United States. However, 
consideration and implementation, through regulations, of a section of 
the health care bill limiting the amount that can be charged for 
prescription drugs is sufficiently focused on the interests of 
pharmaceutical companies that it would be a particular matter.

    (2) Personal and substantial participation. To participate 
``personally'' means to participate directly. It includes the direct and 
active supervision of the participation of a subordinate in the matter. 
To participate ``substantially'' means that the employee's involvement 
is of significance to the matter. Participation may be substantial even 
though it is not determinative of the outcome of a particular matter. 
However, it requires more than official responsibility, knowledge, 
perfunctory involvement, or involvement on an administrative or 
peripheral issue. A finding of substantiality should be based not only 
on the effort devoted to the matter, but also on the importance of the 
effort. While a series of peripheral involvements may be insubstantial, 
the single act of approving or participating in a critical step may be 
substantial. Personal and substantial participation may occur when, for 
example, an employee participates through decision, approval, 
disapproval, recommendation, investigation or the rendering of advice in 
a particular matter.

    Example 1 to paragraph (a)(2): An agency's Office of Enforcement is 
investigating the allegedly fraudulent marketing practices of a major 
corporation. One of the agency's personnel specialists is asked to 
provide information to the Office of Enforcement about the agency's 
personnel ceiling so that the Office can determine whether new employees 
can be hired to work on the investigation. The employee personnel 
specialist owns $20,000 worth of stock in the corporation that is the 
target of the investigation. She does not have a disqualifying financial 
interest in the matter (the investigation and possible subsequent 
enforcement proceedings) because her involvement is on a peripheral 
personnel issue and her participation cannot be considered 
``substantial'' as defined in the statute.

    (3) Direct and predictable effect. (i) A particular matter will have 
a ``direct'' effect on a financial interest if there is a close causal 
link between any decision or action to be taken in the matter and any 
expected effect of the matter on the financial interest. An effect may 
be direct even though it does not occur immediately. A particular matter 
will not have a direct effect on a financial interest, however, if the 
chain of causation is attenuated or is contingent upon the occurrence of 
events that are speculative or that are independent of, and unrelated 
to, the matter. A particular matter that has an effect on a financial 
interest only as a

[[Page 644]]

consequence of its effects on the general economy does not have a direct 
effect within the meaning of this part.
    (ii) A particular matter will have a ``predictable'' effect if there 
is a real, as opposed to a speculative, possibility that the matter will 
affect the financial interest. It is not necessary, however, that the 
magnitude of the gain or loss be known, and the dollar amount of the 
gain or loss is immaterial.

    Example 1: An attorney at the Department of Justice is working on a 
case in which several large companies are defendants. If the Department 
wins the case, the defendants may be required to reimburse the Federal 
Government for their failure to adequately perform work under several 
contracts with the Government. The attorney's spouse is a salaried 
employee of one of the companies, working in a division that has no 
involvement in any of the contracts. She does not participate in any 
bonus or benefit plans tied to the profitability of the company, nor 
does she own stock in the company. Because there is no evidence that the 
case will have a direct and predictable effect on whether the spouse 
will retain her job or maintain the level of her salary, or whether the 
company will undergo any reorganization that would affect her interests, 
the attorney would not have a disqualifying financial interest in the 
matter. However, the attorney must consider, under the requirements of 
Sec. 2635.502 of this chapter, whether his impartiality would be 
questioned if he continues to work on the case.
    Example 2: A special Government employee (SGE) whose principal 
employment is as a researcher at a major university is appointed to 
serve on an advisory committee that will evaluate the safety and 
effectiveness of a new medical device to regulate arrhythmic heartbeats. 
The device is being developed by Alpha Medical Inc., a company which 
also has contracted with the SGE's university to assist in developing 
another medical device related to kidney dialysis. There is no evidence 
that the advisory committee's determinations concerning the medical 
device under review will affect Alpha Medical's contract with the 
university to develop the kidney dialysis device. The SGE may 
participate in the committee's deliberations because those deliberations 
will not have a direct and predictable effect on the financial interests 
of the researcher or his employer.
    Example 3: The SGE in the preceding example is instead asked to 
serve on an advisory committee that has been convened to conduct a 
preliminary evaluation of the new kidney dialysis device developed by 
Alpha Medical under contract with the employee's university. Alpha's 
contract with the university requires the university to undertake 
additional testing of the device to address issues raised by the 
committee during its review. The committee's actions will have a direct 
and predictable effect on the university's financial interest.
    Example 4: An engineer at the Environmental Protection Agency (EPA) 
was formerly employed by Waste Management, Inc., a corporation subject 
to EPA's regulations concerning the disposal of hazardous waste 
materials. Waste Management is a large corporation, with less than 5% of 
its profits derived from handling hazardous waste materials. The 
engineer has a vested interest in a defined benefit pension plan 
sponsored by Waste Management which guarantees that he will receive 
payments of $500 per month beginning at age 62. As an employee of EPA, 
the engineer has been assigned to evaluate Waste Management's compliance 
with EPA hazardous waste regulations. There is no evidence that the 
engineer's monitoring activities will affect Waste Management's ability 
or willingness to pay his pension benefits when he is entitled to 
receive them at age 62. Therefore, the EPA's monitoring activities will 
not have a direct and predictable effect on the employee's financial 
interest in his Waste Management pension. However, the engineer should 
consider whether, under the standards set forth in 5 CFR 2635.502, a 
reasonable person would question his impartiality if he acts in a matter 
in which Waste Management is a party.

    (b) Disqualifying financial interests. For purposes of 18 U.S.C. 
208(a) and this part, the term financial interest means the potential 
for gain or loss to the employee, or other person specified in section 
208, as a result of governmental action on the particular matter. The 
disqualifying financial interest might arise from ownership of certain 
financial instruments or investments such as stock, bonds, mutual funds, 
or real estate. Additionally, a disqualifying financial interest might 
derive from a salary, indebtedness, job offer, or any similar interest 
that may be affected by the matter.

    Example 1: An employee of the Department of the Interior owns 
transportation bonds issued by the State of Minnesota. The proceeds of 
the bonds will be used to fund improvements to certain State highways. 
In her official position, the employee is evaluating an application from 
Minnesota for a grant to support a State wildlife refuge. The employee's 
ownership of the transportation bonds does not create a disqualifying 
financial interest in Minnesota's application for wildlife funds because 
approval or disapproval of the grant will not in any way affect the 
current value of the bonds or have a

[[Page 645]]

direct and predictable effect on the State's ability or willingness to 
honor its obligation to pay the bonds when they mature.
    Example 2: An employee of the Bureau of Land Management owns 
undeveloped land adjacent to Federal lands in New Mexico. A portion of 
the Federal land will be leased by the Bureau to a mining company for 
exploration and development, resulting in an increase in the value of 
the surrounding privately owned land, including that owned by the 
employee. The employee has a financial interest in the lease of the 
Federal land to the mining company and, therefore, cannot participate in 
Bureau matters involving the lease unless he obtains an individual 
waiver pursuant to 18 U.S.C. 208(b)(1).
    Example 3: A special Government employee serving on an advisory 
committee studying the safety and effectiveness of a new arthritis drug 
is a practicing physician with a specialty in treating arthritis. The 
drug being studied by the committee would be a low cost alternative to 
current treatments for arthritis. If the drug is ultimately approved, 
the physician will be able to prescribe the less expensive drug. The 
physician does not own stock in, or hold any position, or have any 
business relationship with the company developing the drug. Moreover, 
there is no indication that the availability of a less expensive 
treatment for arthritis will increase the volume and profitability of 
the doctor's private practice. Accordingly, the physician has no 
disqualifying financial interest in the actions of the advisory 
committee.

    (c) Interests of others. The financial interests of the following 
persons will serve to disqualify an employee to the same extent as the 
employee's own interests:
    (1) The employee's spouse;
    (2) The employee's minor child;
    (3) The employee's general partner;
    (4) An organization or entity which the employee serves as officer, 
director, trustee, general partner, or employee; and
    (5) A person with whom the employee is negotiating for, or has an 
arrangement concerning, prospective employment.

    Example 1: An employee of the Consumer Product Safety Commission 
(CPSC) has two minor children who have inherited shares of stock from 
their grandparents in a company that manufactures small appliances. 
Unless an exemption is applicable under Sec. 2640.202 or he obtains a 
waiver under 18 U.S.C. 208(b)(1), the employee is disqualified from 
participating in a CPSC proceeding to require the manufacturer to remove 
a defective appliance from the market.
    Example 2: A newly appointed employee of the Department of Housing 
and Urban Development (HUD) is a general partner with three former 
business associates in a partnership that owns a travel agency. The 
employee knows that his three general partners are also partners in 
another partnership that owns a HUD-subsidized housing project. Unless 
he receives a waiver pursuant to 18 U.S.C. 208(b)(1) permitting him to 
act, the employee must disqualify himself from particular matters 
involving the HUD-subsidized project which his general partners own.
    Example 3: The spouse of an employee of the Department of Health and 
Human Services (HHS) works for a consulting firm that provides support 
services to colleges and universities on research projects they are 
conducting under grants from HHS. The spouse is a salaried employee who 
has no direct ownership interest in the firm such as through 
stockholding, and the award of a grant to a particular university will 
have no direct and predictable effect on his continued employment or his 
salary. Because the award of a grant will not affect the spouse's 
financial interest, section 208 would not bar the HHS employee from 
participating in the award of a grant to a university to which the 
consulting firm will provide services. However, the employee should 
consider whether her participation in the award of the grant would be 
barred under the impartiality provision in the Standards of Ethical 
Conduct for Employees of the Executive Branch at 5 CFR 2635.502.

    (d) Disqualification. Unless the employee is authorized to 
participate in the particular matter by virtue of an exemption or waiver 
described in subpart B or subpart C of this part, or the interest has 
been divested in accordance with paragraph (e) of this section, an 
employee shall disqualify himself from participating in a particular 
matter in which, to his knowledge, he or any other person specified in 
the statute has a financial interest, if the particular matter will have 
a direct and predictable effect on that interest. Disqualification is 
accomplished by not participating in the particular matter.
    (1) Notification. An employee who becomes aware of the need to 
disqualify himself from participation in a particular matter to which he 
has been assigned should notify the person responsible for his 
assignment. An employee who is responsible for his own assignments 
should take whatever steps are necessary to ensure that he does not 
participate in the matter from which

[[Page 646]]

he is disqualified. Appropriate oral or written notification of the 
employee's disqualification may be made to coworkers by the employee or 
a supervisor to ensure that the employee is not involved in a matter 
from which he is disqualified.
    (2) Documentation. An employee need not file a written 
disqualification statement unless he is required by part 2634 of this 
chapter to file written evidence of compliance with an ethics agreement 
with the Office of Government Ethics, is asked by an agency ethics 
official or the person responsible for his assignment to file a written 
disqualification statement, or is required to do so by agency 
supplemental regulation issued pursuant to 5 CFR 2635.105. However, an 
employee may elect to create a record of his actions by providing 
written notice to a supervisor or other appropriate official.

    Example 1: The supervisor of an employee of the Department of 
Education asks the employee to attend a meeting on his behalf on 
developing national standards for science education in secondary 
schools. When the employee arrives for the meeting, she realizes one of 
the participants is the president of Education Consulting Associates 
(ECA), a firm which has been awarded a contract to prepare a bulletin 
describing the Department's policies on science education standards. The 
employee's spouse has a subcontract with ECA to provide the graphics and 
charts that will be used in the bulletin. Because the employee realizes 
that the meeting will involve matters relating to the production of the 
bulletin, the employee properly decides that she must disqualify herself 
from participating in the discussions. After withdrawing from the 
meeting, the employee should notify her supervisor about the reason for 
her disqualification. She may elect to put her disqualification 
statement in writing, or to simply notify her supervisor orally. She may 
also elect to notify appropriate coworkers about her need to disqualify 
herself from this matter.

    (e) Divestiture of a disqualifying financial interest. Upon sale or 
other divestiture of the asset or other interest that causes his 
disqualification from participation in a particular matter, an employee 
is no longer prohibited from acting in the particular matter.
    (1) Voluntary divestiture. An employee who would otherwise be 
disqualified from participation in a particular matter may voluntarily 
sell or otherwise divest himself of the interest that causes the 
disqualification.
    (2) Directed divestiture. An employee may be required to sell or 
otherwise divest himself of the disqualifying financial interest if his 
continued holding of that interest is prohibited by statute or by agency 
supplemental regulation issued in accordance with Sec. 2635.403(a) of 
this chapter, or if the agency determines in accordance with Sec. 
2635.403(b) of this chapter that a substantial conflict exists between 
the financial interest and the employee's duties or accomplishment of 
the agency's mission.
    (3) Eligibility for special tax treatment. An employee who is 
directed to divest an interest may be eligible to defer the tax 
consequences of divestiture under subpart J of part 2634 of this 
chapter. An employee who divests before obtaining a certificate of 
divestiture will not be eligible for this special tax treatment.
    (f) Official duties that give rise to potential conflicts. Where an 
employee's official duties create a substantial likelihood that the 
employee may be assigned to a particular matter from which he is 
disqualified, the employee should advise his supervisor or other person 
responsible for his assignments of that potential so that conflicting 
assignments can be avoided, consistent with the agency's needs.

[61 FR 66841, Dec. 18, 1996, as amended at 67 FR 12445, Mar. 19, 2002]



          Subpart B_Exemptions Pursuant to 18 U.S.C. 208(b)(2)



Sec. 2640.201  Exemptions for interests in mutual funds, unit investment 

trusts, and employee benefit plans.

    (a) Diversified mutual funds and unit investment trusts. An employee 
may participate in any particular matter affecting one or more holdings 
of a diversified mutual fund or a diversified unit investment trust 
where the disqualifying financial interest in the matter arises because 
of the ownership of an interest in the fund or trust.

    Example 1 to paragraph (a): An employee owns shares worth $100,000 
in several mutual funds whose portfolios contain stock in a small 
computer company. Each mutual fund prospectus describes the fund as a 
``management company,'' but does not characterize

[[Page 647]]

the fund as having a policy of concentrating its investments in any 
particular industry, business, single country (other than the U.S.) or 
bonds of a single State. The employee may participate in agency matters 
affecting the computer company.
    Example 2 to paragraph (a): A nonsupervisory employee of the 
Department of Energy owns shares valued at $75,000 in a mutual fund that 
expressly concentrates its holdings in the stock of utility companies. 
The employee may not rely on the exemption in paragraph (a) of this 
section to act in matters affecting a utility company whose stock is a 
part of the mutual fund's portfolio because the fund is not a 
diversified fund as defined in Sec. 2640.102(a). The employee may, 
however, seek an individual waiver under 18 U.S.C. 208(b)(1) permitting 
him to act.

    (b) Sector mutual funds. (1) An employee may participate in any 
particular matter affecting one or more holdings of a sector mutual fund 
where the affected holding is not invested in the sector in which the 
fund concentrates, and where the disqualifying financial interest in the 
matter arises because of ownership of an interest in the fund.
    (2)(i) An employee may participate in a particular matter affecting 
one or more holdings of a sector mutual fund where the disqualifying 
financial interest in the matter arises because of ownership of an 
interest in the fund and the aggregate market value of interests in any 
sector fund or funds does not exceed $50,000.
    (ii) For purposes of calculating the $50,000 de minimis amount in 
paragraph (b)(2)(i) of this section, an employee must aggregate the 
market value of all sector mutual funds in which he has a disqualifying 
financial interest and that concentrate in the same sector and have one 
or more holdings that may be affected by the particular matter.

    Example 1 to paragraph (b): An employee of the Federal Reserve owns 
shares in the mutual fund described in the preceding example. In 
addition to holdings in utility companies, the mutual fund contains 
stock in certain regional banks and bank holding companies whose 
financial interests would be affected by an investigation in which the 
Federal Reserve employee would participate. The employee is not 
disqualified from participating in the investigation because the banks 
that would be affected are not part of the sector in which the fund 
concentrates.
    Example 2 to paragraph (b): A health scientist administrator 
employed in the Public Health Service at the Department of Health and 
Human Services is assigned to serve on a Departmentwide task force that 
will recommend changes in how Medicare reimbursements will be made to 
health care providers. The employee owns $35,000 worth of shares in the 
XYZ Health Sciences Fund, a sector mutual fund invested primarily in 
health-related companies such as pharmaceuticals, developers of medical 
instruments and devices, managed care health organizations, and acute 
care hospitals. The health scientist administrator may participate in 
the recommendations.
    Example 3 to paragraph (b): The spouse of the employee in the 
previous Example owns $40,000 worth of shares in ABC Specialized 
Portfolios: Healthcare, a sector mutual fund that also concentrates its 
investments in health-related companies. The two funds focus on the same 
sector and both contain holdings that may be affected by the particular 
matter. Because the aggregated value of the two funds exceeds $50,000, 
the employee may not rely on the exemption.

    (c) Employee benefit plans. An employee may participate in:
    (1) Any particular matter affecting one or more holdings of an 
employee benefit plan, where the disqualifying financial interest in the 
matter arises from membership in:
    (i) The Thrift Savings Plan for Federal employees described in 5 
U.S.C. 8437;
    (ii) A pension plan established or maintained by a State government 
or any political subdivision of a State government for its employees; or
    (iii) A diversified employee benefit plan, provided:
    (A) The investments of the plan are administered by an independent 
trustee, and the employee, or other person specified in section 208(a) 
does not participate in the selection of the plan's investments or 
designate specific plan investments (except for directing that 
contributions be divided among several different categories of 
investments, such as stocks, bonds or mutual funds, which are available 
to plan participants); and
    (B) The plan is not a profit-sharing or stock bonus plan.

    Note to paragraph (c)(1): Employee benefit plans that are tax 
deferred under 26 U.S.C. 401(k) are not considered profit-sharing plans 
for purposes of this section. However, for the exemption to apply, 
401(k) plans

[[Page 648]]

must meet the requirements of paragraph (c)(1)(iii)(A) of this section.

    (2) Particular matters of general applicability, such as rulemaking, 
affecting the State or local government sponsor of a State or local 
government pension plan described in paragraph (c)(1)(ii) of this 
section where the disqualifying financial interest in the matter arises 
because of participation in the plan.

    Example 1: An attorney terminates his position with a law firm to 
take a position with the Department of Justice. As a result of his 
employment with the firm, the employee has interests in a 401(k) plan, 
the assets of which are invested primarily in stocks chosen by an 
independent financial management firm. He also participates in a defined 
contribution pension plan maintained by the firm, the assets of which 
are stocks, bonds, and financial instruments. The plan is managed by an 
independent trustee. Assuming that the manager of the pension plan has a 
written policy of diversifying plan investments, the employee may act in 
matters affecting the plan's holdings. The employee may also participate 
in matters affecting the holdings of his 401(k) plan if the individual 
financial management firm that selects the plan's investments has a 
written policy of diversifying the plan's assets. Employee benefit plans 
that are tax deferred under 26 U.S.C. 401(k) are not considered profit-
sharing or stock bonus plans for purposes of this part.
    Example 2: An employee of the Department of Agriculture who is a 
former New York State employee has a vested interest in a pension plan 
established by the State of New York for its employees. She may 
participate in an agency matter that would affect a company whose stock 
is in the pension plan's portfolio. She also may participate in a matter 
of general applicability affecting all States, including the State of 
New York, such as the drafting and promulgation of a rule requiring 
States to expend additional resources implementing the Food Stamp 
program. Unless she obtains an individual waiver under 18 U.S.C. 
208(b)(1), she may not participate in a matter involving the State of 
New York as a party, such as an application by the State for additional 
Federal funding for administrative support services, if that matter 
would affect the State's ability or willingness to honor its obligation 
to pay her pension benefits.
    (d) Matters affecting mutual funds and unit investment trusts. In 
addition to participation in the particular matters affecting the 
holdings of mutual funds and unit investment trusts as permitted under 
paragraphs (a) and (b) of this section, an employee may participate in 
any particular matter of general applicability affecting a mutual fund 
or unit investment trust where the disqualifying financial interest 
arises because of the ownership of an interest in the mutual fund or 
unit investment trust.

[61 FR 66841, Dec. 18, 1996; 62 FR 1361, Jan. 9, 1997, as amended at 67 
FR 12445, Mar. 19, 2002; 70 FR 69043, Nov. 14, 2005]



Sec. 2640.202  Exemptions for interests in securities.

    (a) De minimis exemption for matters involving parties. An employee 
may participate in any particular matter involving specific parties in 
which the disqualifying financial interest arises from the ownership by 
the employee, his spouse or minor children of securities issued by one 
or more entities affected by the matter, if:
    (1) The securities are publicly traded, or are long-term Federal 
Government, or are municipal securities; and
    (2) The aggregate market value of the holdings of the employee, his 
spouse, and his minor children in the securities of all entities does 
not exceed $15,000.

    Example 1 to paragraph (a): An employee owns 100 shares of publicly 
traded stock valued at $3,000 in XYZ Corporation. As part of his 
official duties, the employee is evaluating bids for performing computer 
maintenance services at his agency and discovers that XYZ Corporation is 
one of the companies that has submitted a bid. The employee is not 
required to recuse himself from continuing to evaluate the bids.
    Example 2 to paragraph (a): In the preceding example, the employee 
and his spouse each own $8,000 worth of stock in XYZ Corporation, 
resulting in ownership of $16,000 worth of stock by the employee and his 
spouse. The exemption in paragraph (a) of this section would not permit 
the employee to participate in the evaluation of bids because the 
aggregate market value of the holdings of the employee, spouse and minor 
children in XYZ Corporation exceeds $15,000. The employee could, 
however, seek an individual waiver under 18 U.S.C. 208(b)(1) in order to 
participate in the evaluation of bids.
    Example 3 to paragraph (a): An employee is assigned to monitor XYZ 
Corporation's performance of a contract to provide computer maintenance 
services at the employee's agency. At the time the employee is first 
assigned these duties, he owns publicly traded stock in XYZ Corporation 
valued at less than $15,000. During the time the contract is

[[Page 649]]

being performed, however, the value of the employee's stock increases to 
$17,500. When the employee knows that the value of his stock exceeds 
$15,000, he must disqualify himself from any further participation in 
matters affecting XYZ Corporation or seek an individual waiver under 18 
U.S.C. 208(b)(1). Alternatively, the employee may divest the portion of 
his XYZ stock that exceeds $15,000. This can be accomplished through a 
standing order with his broker to sell when the value of the stock 
exceeds $15,000.

    (b) De minimis exemption for matters affecting nonparties. An 
employee may participate in any particular matter involving specific 
parties in which the disqualifying financial interest arises from the 
ownership by the employee, his spouse, or minor children of securities 
issued by one or more entities that are not parties to the matter but 
that are affected by the matter, if:
    (1) The securities are publicly traded, or are long-term Federal 
Government or municipal securities; and
    (2) The aggregate market value of the holdings of the employee, his 
spouse and minor children in the securities of all affected entities 
(including securities exempted under paragraph (a) of this section) does 
not exceed $25,000.

    Example 1 to paragraph (b): A Food and Drug Administration advisory 
committee is asked to review a new drug application from Alpha Drug Co. 
for a new lung cancer drug. A member of the advisory committee owns 
$20,000 worth of stock in Mega Drug Co., which manufactures the only 
similar lung cancer drug on the market. If approved, the Alpha Drug 
Co.'s drug would directly compete with the drug sold by the Mega Drug 
Co., resulting in decreased sales of its lung cancer drug. The committee 
member may participate in the review of the new drug.

    (c) De minimis exemption for matters of general applicability. (1) 
An employee may participate in any particular matter of general 
applicability, such as rulemaking, in which the disqualifying financial 
interest arises from the ownership by the employee, his spouse or minor 
children of securities issued by one or more entities affected by the 
matter, if:
    (i) The securities are publicly traded, or are municipal securities, 
the market value of which does not exceed:
    (A) $25,000 in any one such entity; and
    (B) $50,000 in all affected entities; or
    (ii) The securities are long-term Federal Government securities, the 
market value of which does not exceed $50,000.
    (2) For purposes of this paragraph (b), the value of securities 
owned by the employee, his spouse, and minor children must be aggregated 
in applying the exemption.

    Example 1 to paragraph (c): The Bureau of Export Administration at 
the Department of Commerce is in the process of formulating a regulation 
concerning exportation of portable computers. The regulation will affect 
all domestic companies that sell portable computers. An employee of the 
Department who is assisting in drafting the regulation owns $17,000 
worth of stock in CompAmerica and $20,000 worth of stock in XYZ Computer 
Inc. Even though the employee owns $37,000 worth of stock in companies 
that will be affected by the regulation, she may participate in drafting 
the regulation because the value of the securities she owns does not 
exceed $25,000 in any one affected company and the total value of stock 
owned in all affected companies does not exceed $50,000.

    (d) Exemption for certain Federal Government securities. An employee 
may participate in any particular matter in which the disqualifying 
financial interest arises from the ownership of short-term Federal 
Government securities or from U.S. Savings bonds.
    (e) Exemption for interests of tax-exempt organizations. An employee 
may participate in any particular matter in which the disqualifying 
financial interest arises from the ownership of publicly traded or 
municipal securities, or long-term Federal Government securities by an 
organization which is tax-exempt pursuant to 26 U.S.C. 501(c) (3) or 
(4), and of which the employee is an unpaid officer, director, or 
trustee, or an employee, if:
    (1) The matter affects only the organization's investments, not the 
organization directly;
    (2) The employee plays no role in making investment decisions for 
the organization, except for participating in the decision to invest in 
several different categories of investments such as stocks, bonds, or 
mutual funds; and
    (3) The organization's only relationship to the issuer, other than 
that which arises from routine commercial transactions, is that of 
investor.


[[Page 650]]


    Example 1: An employee of the Federal Reserve is a director of the 
National Association to Save Trees (NAST), an environmental organization 
that is tax-exempt under section 501(c)(3) of the Internal Revenue Code. 
The employee knows that NAST has an endowment fund that is partially 
invested in the publicly traded stock of Computer Inc. The employee's 
position at the Federal Reserve involves the procurement of computer 
software, including software marketed by Computer Inc. The employee may 
participate in the procurement of software from Computer Inc. provided 
that he is not involved in selecting NAST's investments, and that NAST 
has no relationship to Computer Inc. other than as an investor in the 
company and routine purchaser of Computer Inc. software.

    (f) Exemption for certain interests of general partners. An employee 
may participate in any particular matter in which the disqualifying 
financial interest arises from:
    (1) The ownership of publicly traded securities, long-term Federal 
Government securities, or municipal securities by the employee's general 
partner, provided:
    (i) Ownership of the securities is not related to the partnership 
between the employee and his general partner, and
    (ii) The value of the securities does not exceed $200,000; or
    (2) Any interest of the employee's general partner if the employee's 
relationship to the general partner is as a limited partner in a 
partnership that has at least 100 limited partners.

    Example 1: An employee of the Department of Transportation is a 
general partner in a partnership that owns commercial property. The 
employee knows that one of his partners owns stock in an aviation 
company valued at $100,000 because the stock has been pledged as 
collateral for the purchase of the commercial property by the 
partnership. In the absence of an individual waiver under 18 U.S.C. 
208(b)(1), the employee may not act in a matter affecting the aviation 
company. Because the stock has been pledged as collateral, ownership of 
the securities is related to the partnership between the employee and 
his general partner.
    Example 2: An employee of the Pension Benefit Guaranty Corporation 
(PBGC) has a limited partnership interest in Ambank Partners, a large 
partnership with more than 500 limited partners. The partnership assets 
are invested in the securities of various financial institutions. 
Ambank's general partner is Capital Investment Services, an investment 
firm whose pension plan for its own employees is being examined by the 
PBGC for possible unfunded liabilities. Even though the employee's 
general partner (Capital Investment Services) has a financial interest 
in PBGC's review of the pension plan, the employee may participate in 
the review because his relationship with his general partner is that of 
a limited partner in a partnership that has at least 100 limited 
partners.

[61 FR 66841, Dec. 18, 1996; 62 FR 1361, Jan. 9, 1997, as amended at 67 
FR 12445, Mar. 19, 2002]



Sec. 2640.203  Miscellaneous exemptions.

    (a) Hiring decisions. An employee may participate in a hiring 
decision involving an applicant who is currently employed by a 
corporation that issues publicly traded securities, if the disqualifying 
financial interest arises from:
    (1) Ownership of publicly traded securities issued by the 
corporation; or
    (2) Participation in a pension plan sponsored by the corporation.
    (b) Employees on leave from institutions of higher education. An 
employee on a leave of absence from an institution of higher education 
may participate in any particular matter of general applicability 
affecting the financial interests of the institution from which he is on 
leave, provided that the matter will not have a special or distinct 
effect on that institution other than as part of a class.

    Example 1: An employee at the Department of Defense (DOD) is on a 
leave of absence from his position as a tenured Professor of Engineering 
at the University of California (UC) at Berkeley. While at DOD, he is 
assigned to assist in developing a regulation which will contain new 
standards for the oversight of grants given by DOD. Even though the 
University of California at Berkeley is a DOD grantee, and will be 
affected by these new monitoring standards, the employee may participate 
in developing the standards because UC Berkeley will be affected only as 
part of the class of all DOD grantees. However, if the new standards 
would affect the employee's own financial interest, such as by affecting 
his tenure or his salary, the employee could not participate in the 
matter unless he first obtains an individual waiver under section 
208(b)(1).
    Example 2: An employee on leave from a university could not 
participate in the development of an agency program of grants 
specifically designed to facilitate research in jet propulsion systems 
where the employee's

[[Page 651]]

university is one of just two or three universities likely to receive a 
grant under the new program. Even though the grant announcement is open 
to all universities, the employee's university is among the very few 
known to have facilities and equipment adequate to conduct the research. 
The matter would have a distinct effect on the institution other than as 
part of a class.

    (c) Multi-campus institutions of higher education. An employee may 
participate in any particular matter affecting one campus of a State 
multi-campus institution of higher education, if the employee's 
disqualifying financial interest is employment in a position with no 
multi-campus responsibilities at a separate campus of the same multi-
campus institution.

    Example 1: A special Government employee (SGE) member of an advisory 
committee convened by the National Science Foundation is a full-time 
professor in the School of Engineering at one campus of a State 
university. The SGE may participate in formulating the committee's 
recommendation to award a grant to a researcher at another campus of the 
same State university system.
    Example 2: A member of the Board of Regents at a State university is 
asked to serve on an advisory committee established by the Department of 
Health and Human Services to consider applications for grants for human 
genome research projects. An application from another university that is 
part of the same State system will be reviewed by the committee. Unless 
he receives an individual waiver under section 208(b)(1) or (b)(3), the 
advisory committee member may not participate in matters affecting the 
second university that is part of the State system because as a member 
of the Board of Regents, he has duties and responsibilities that affect 
the entire State educational system.

    (d) Exemptions for financial interests arising from Federal 
Government employment or from Social Security or veterans' benefits. An 
employee may participate in any particular matter where the 
disqualifying financial interest arises from Federal Government or 
Federal Reserve Bank salary or benefits, or from Social Security or 
veterans' benefits, except an employee may not:
    (1) Make determinations that individually or specially affect his 
own salary and benefits; or
    (2) Make determinations, requests, or recommendations that 
individually or specially relate to, or affect, the salary or benefits 
of any other person specified in section 208.

    Example 1: An employee of the Office of Management and Budget may 
vigorously and energetically perform the duties of his position even 
though his outstanding performance would result in a performance bonus 
or other similar merit award.
    Example 2: A policy analyst at the Defense Intelligence Agency may 
request promotion to another grade or salary level. However, the analyst 
may not recommend or approve the promotion of her general partner to the 
next grade.
    Example 3: An engineer employed by the National Science Foundation 
may request that his agency pay the registration fees and appropriate 
travel expenses required for him to attend a conference sponsored by the 
Engineering Institute of America. However, the employee may not approve 
payment of his own travel expenses and registration fees unless he has 
been delegated, in advance, authority to make such approvals in 
accordance with agency policy.
    Example 4: A GS-14 attorney at the Department of Justice may review 
and make comments about the legal sufficiency of a bill to raise the pay 
level of all Federal employees paid under the General Schedule even 
though her own pay level, and that of her spouse who works at the 
Department of Labor, would be raised if the bill were to become law.
    Example 5: An employee of the Department of Veterans Affairs (VA) 
may assist in drafting a regulation that will provide expanded hospital 
benefits for veterans, even though he himself is a veteran who would be 
eligible for treatment in a hospital operated by the VA.
    Example 6: An employee of the Office of Personnel Management may 
participate in discussions with various health insurance providers to 
formulate the package of benefits that will be available to Federal 
employees who participate in the Government's Federal Employees Health 
Benefits Program, even though the employee will obtain health insurance 
from one of these providers through the program.
    Example 7: An employee of the Federal Supply Service Division of the 
General Services Administration (GSA) may participate in GSA's 
evaluation of the feasibility of privatizing the entire Federal Supply 
Service, even though the employee's own position would be eliminated if 
the Service were privatized.
    Example 8: Absent an individual waiver under section 208(b)(1), the 
employee in the preceding example could not participate in the 
implementation of a GSA plan to create an employee-owned private 
corporation which would carry out Federal Supply Service functions under 
contract with GSA. Because implementing the plan would result not only 
in the elimination of the employee's Federal position, but also in the 
creation of

[[Page 652]]

a new position in the new corporation to which the employee would be 
transferred, the employee would have a disqualifying financial interest 
in the matter arising from other than Federal salary and benefits, or 
Social Security or veterans benefits.
    Example 9: A career member of the Senior Executive Service (SES) at 
the Internal Revenue Service (IRS) may serve on a performance review 
board that makes recommendations about the performance awards that will 
be awarded to other career SES employees at the IRS. The amount of the 
employee's own SES performance award would be affected by the board's 
recommendations because all SES awards are derived from the same limited 
pool of funds. However, the employee's activities on the board involve 
only recommendations, and not determinations that individually or 
specially affect his own award. Additionally, 5 U.S.C. 5384(c)(2) 
requires that a majority of the board's members be career SES employees.
    Example 10: In carrying out a reorganization of the Office of 
General Counsel (OGC) of the Federal Trade Commission, the Deputy 
General Counsel is asked to determine which of five Senior Executive 
Service (SES) positions in the OGC to abolish. Because her own position 
is one of the five SES positions being considered for elimination, the 
matter is one that would individually or specially affect her own salary 
and benefits and, therefore, the Deputy may not decide which position 
should be abolished.
    Note to paragraph (d):
    This exemption does not permit an employee to take any action in 
violation of any other statutory or regulatory requirement, such as the 
prohibition on the employment of relatives at 5 U.S.C. 3110.

    (e) Commercial discount and incentive programs. An employee may 
participate in any particular matter affecting the sponsor of a 
discount, incentive, or other similar benefit program if the 
disqualifying financial interest arises because of participation in the 
program, provided:
    (1) The program is open to the general public; and
    (2) Participation in the program involves no other financial 
interest in the sponsor, such as stockholding.

    Example 1: An attorney at the Pension Benefit Guaranty Corporation 
who is a member of a frequent flier program sponsored by Alpha Airlines 
may assist in an action against Alpha for failing to make required 
payments to its employee pension fund, even though the agency action 
will cause Alpha to disband its frequent flier program.

    (f) Mutual insurance companies. An employee may participate in any 
particular matter affecting a mutual insurance company if the 
disqualifying financial interest arises because of an interest as a 
policyholder, unless the matter would affect the company's ability to 
pay claims required under the terms of the policy or to pay the cash 
value of the policy.

    Example 1: An administrative law judge at the Department of Labor 
receives dividends from a mutual insurance company which he takes in the 
form of reduced premiums on his life insurance policy. The amount of the 
dividend is based upon the company's overall profitability. 
Nevertheless, he may preside in a Department hearing involving a major 
corporation insured by the same company even though the insurance 
company will have to pay the corporation's penalties and other costs if 
the Department prevails in the hearing.
    Example 2: An employee of the Department of Justice is assigned to 
prosecute a case involving the fraudulent practices of an issuer of junk 
bonds. While developing the facts pertinent to the case, the employee 
learns that the mutual life insurance company from which he holds a life 
insurance policy has invested heavily in these junk bonds. If the 
Government succeeds in its case, the bonds will be worthless and the 
corresponding decline in the insurance company's investments will impair 
the company's ability to pay claims under the policies it has issued. 
The employee may not continue assisting in the prosecution of the case 
unless he obtains an individual waiver pursuant to section 208(b)(1).

    (g) Exemption for employment interests of special Government 
employees serving on advisory committees. A special Government employee 
serving on an advisory committee within the meaning of the Federal 
Advisory Committee Act (5 U.S.C. app.) may participate in any particular 
matter of general applicability where the disqualifying financial 
interest arises from his non-Federal employment or non-Federal 
prospective employment, provided that the matter will not have a special 
or distinct effect on the employee or employer other than as part of a 
class. For purposes of this paragraph, ``disqualifying financial 
interest'' arising from non-Federal employment does not include the 
interests of a special Government employee arising from the ownership of 
stock in his employer or prospective employer.


[[Page 653]]


    Example 1: A chemist employed by a major pharmaceutical company has 
been appointed to serve on an advisory committee established to develop 
recommendations for new standards for AIDS vaccine trials involving 
human subjects. Even though the chemist's employer is in the process of 
developing an experimental AIDS vaccine and therefore will be affected 
by the new standards, the chemist may participate in formulating the 
advisory committee's recommendations. The chemist's employer will be 
affected by the new standards only as part of the class of all 
pharmaceutical companies and other research entities that are attempting 
to develop an AIDS vaccine.
    Example 2: The National Cancer Institute (NCI) has established an 
advisory committee to evaluate a university's performance of an NCI 
grant to study the efficacy of a newly developed breast cancer drug. An 
employee of the university may not participate in the evaluation of the 
university's performance because it is not a matter of general 
applicability.
    Example 3: An engineer whose principal employment is with a major 
Department of Defense (DOD) contractor is appointed to serve on an 
advisory committee established by DOD to develop concepts for the next 
generation of laser-guided missiles. The engineer's employer, as well as 
a number of other similar companies, has developed certain missile 
components for DOD in the past, and has the capability to work on 
aspects of the newer missile designs under consideration by the 
committee. The engineer owns $20,000 worth of stock in his employer. 
Because the exemption for the employment interests of special Government 
employees serving on advisory committees does not extend to financial 
interests arising from the ownership of stock, the engineer may not 
participate in committee matters affecting his employer unless he 
receives an individual waiver under section 208(b)(1) or (b)(3), or 
determines whether the exemption for interests in securities at Sec. 
2640.202(b) applies.

    (h) Directors of Federal Reserve Banks. A Director of a Federal 
Reserve Bank or a branch of a Federal Reserve Bank may participate in 
the following matters, even though they may be particular matters in 
which he, or any other person specified in section 208(a), has a 
disqualifying financial interest:
    (1) Establishment of rates to be charged for all advances and 
discounts by Federal Reserve Banks;
    (2) Consideration of monetary policy matters, regulations, statutes 
and proposed or pending legislation, and other matters of broad 
applicability intended to have uniform application to banks within the 
Reserve Bank district;
    (3) Approval or ratification of extensions of credit, advances or 
discounts to a depository institution that has not been determined to be 
in a hazardous financial condition by the President of the Reserve Bank; 
or
    (4) Approval or ratification of extensions of credit, advances or 
discounts to a depository institution that has been determined to be in 
a hazardous financial condition by the President of the Reserve Bank, 
provided that the disqualifying financial interest arises from the 
ownership of stock in, or service as an officer, director, trustee, 
general partner or employee, of an entity other than the depository 
institution, or its parent holding company or subsidiary of such holding 
company.
    (i) Medical products. A special Government employee serving on an 
advisory committee within the meaning of the Federal Advisory Committee 
Act (5 U.S.C. app.) may participate in Federal advisory committee 
matters concerning medical products if the disqualifying financial 
interest arises from:
    (1) Employment with a hospital or other similar medical facility 
whose only interest in the medical product or device is purchase of it 
for use by, or sale to, its patients; or
    (2) The use or prescription of medical products for patients.
    (j) Nonvoting members of standing technical advisory committees 
established by the Food and Drug Administration. A special Government 
employee serving as a nonvoting representative member of an advisory 
committee established by the Food and Drug Administration pursuant to 
the requirements of the Federal Advisory Committee Act (5 U.S.C. app.) 
and appointed under a statutory authority requiring the appointment of 
representative members, may participate in any particular matter 
affecting a disqualifying financial interest in the class which the 
employee represents. Nonvoting representative members of Food and Drug 
Administration advisory committees are described in 21 CFR 14.80(b)(2), 
14.84, 14.86, and 14.95(a).

    Example 1: The FDA's Medical Devices Advisory Committee is 
established pursuant to

[[Page 654]]

21 U.S.C. 360c(b), which requires that each panel of the Committee 
include one nonvoting industry representative and one nonvoting consumer 
representative. An industry representative on the Ophthalmic Devices 
Panel of this Committee has been appointed as a special Government 
employee, in accordance with the procedures described at 14 CFR 14.84. 
The special Government employee may participate in Panel discussions 
concerning the premarket approval application for a silicone posterior 
chamber intraocular lens manufactured by MedInc, even though she is 
employed by, and owns stock in, another company that manufactures a 
competing product. However, a consumer representative who serves as a 
special Government employee on the same Panel may not participate in 
Panel discussions if he owns $30,000 worth of stock in MedInc unless he 
first obtains an individual waiver under 18 U.S.C. 208 (b)(1) or (b)(3).

    (k) Employees of the Tennessee Valley Authority. An employee of the 
Tennessee Valley Authority (TVA) may participate in developing or 
approving rate schedules or similar matters affecting the general cost 
of electric power sold by TVA, if the disqualifying financial interest 
arises from use of such power by the employee or by any other person 
specified in section 208(a).
    (l) Exemption for financial interests of non-Federal government 
employers in the decennial census. An employee of the Bureau of the 
Census at the United States Department of Commerce, who is also an 
employee of a State, local, or tribal government, may participate in the 
decennial census notwithstanding the disqualifying financial interests 
of the employee's non-Federal government employer in the census provided 
that the employee:
    (1) Does not serve in a State, local, or tribal government position 
which is filled through public election;
    (2) Was hired for a temporary position under authority of 13 U.S.C. 
23; and
    (3) Is serving in a Local Census Office or an Accuracy and Coverage 
Evaluation function position as an enumerator, crew leader, or field 
operations supervisor.

[61 FR 66841, Dec. 18, 1996 as amended at 62 FR 23128, Apr. 29, 1997; 65 
FR 16513, Mar. 29, 2000]



Sec. 2640.204  Prohibited financial interests.

    None of the exemptions set forth in Sec. Sec. 2640.201, 2640.202, 
or 2640.203 apply to any financial interest held or acquired by an 
employee, his spouse, or minor child in violation of a statute or agency 
supplemental regulation issued in accordance with 5 CFR 2635.105, or 
that is otherwise prohibited under 5 CFR 2635.403(b).

    Example 1 to Sec. 2640.204: The Office of the Comptroller of the 
Currency (OCC), in a regulation that supplements part 2635 of this 
chapter, prohibits certain employees from owning stock in commercial 
banks. If an OCC employee purchases stock valued at $2,000 in 
contravention of the regulation, the exemption at Sec. 2640.202(a) for 
interests arising from the ownership of no more than $15,000 worth of 
publicly traded stock will not apply to the employee's participation in 
matters affecting the bank.

[61 FR 66841, Dec. 18, 1996, as amended at 67 FR 12446, Mar. 19, 2002]



Sec. 2640.205  Employee responsibility.

    Prior to taking official action in a matter which an employee knows 
would affect his financial interest or the interest of another person 
specified in 18 U.S.C. 208(a), an employee must determine whether one of 
the exemptions in Sec. Sec. 2640.201, 2640.202, or 2640.203 would 
permit his action notwithstanding the existence of the disqualifying 
interest. An employee who is unsure whether an exemption is applicable 
in a particular case, should consult an agency ethics official prior to 
taking action in a particular matter.



Sec. 2640.206  Existing agency exemptions.

    An employee who, prior to January 17, 1997, acted in an official 
capacity in a particular matter in which he had a financial interest, 
will be deemed to have acted in accordance with applicable regulations 
if he acted in reliance on an exemption issued by his employing 
Government agency pursuant to 18 U.S.C. 208(b)(2), as in effect prior to 
November 30, 1989.

[[Page 655]]



                      Subpart C_Individual Waivers



Sec. 2640.301  Waivers issued pursuant to 18 U.S.C. 208(b)(1).

    (a) Requirements for issuing an individual waiver under 18 U.S.C. 
208(b)(1). Pursuant to 18 U.S.C. 208(b)(1), an agency may determine in 
an individual case that a disqualifying financial interest in a 
particular matter or matters is not so substantial as to be deemed 
likely to affect the integrity of the employee's services to the 
Government. Upon making that determination, the agency may then waive 
the employee's disqualification notwithstanding the financial interest, 
and permit the employee to participate in the particular matter. Waivers 
issued pursuant to section 208(b)(1) should comply with the following 
requirements:
    (1) The disqualifying financial interest, and the nature and 
circumstances of the particular matter or matters, must be fully 
disclosed to the Government official responsible for appointing the 
employee to his position (or other Government official to whom authority 
to issue such a waiver for the employee has been delegated);
    (2) The waiver must be issued in writing by the Government official 
responsible for appointing the employee to his position (or other 
Government official to whom the authority to issue such a waiver for the 
employee has been delegated);
    (3) The waiver should describe the disqualifying financial interest, 
the particular matter or matters to which it applies, the employee's 
role in the matter or matters, and any limitations on the employee's 
ability to act in such matters;
    (4) The waiver shall be based on a determination that the 
disqualifying financial interest is not so substantial as to be deemed 
likely to affect the integrity of the employee's services to the 
Government. Statements concerning the employee's good character are not 
material to, nor a basis for making, such a decision;
    (5) The waiver must be issued prior to the employee taking any 
action in the matter or matters; and
    (6) The waiver may apply to both present and future financial 
interests, provided the interests are described with sufficient 
specificity.
    Note to paragraph (a):
    The disqualifying financial interest, the particular matter or 
matters to which the waiver applies, and the employee's role in such 
matters do not need to be described with any particular degree of 
specificity. For example, if a waiver were to apply to all matters which 
an employee would undertake as part of his official duties, the waiver 
document would not have to enumerate those duties. The information 
contained in the waiver, however, should provide a clear understanding 
of the nature and identity of the disqualifying financial interest, the 
matters to which the waiver will apply, and the employee's role in such 
matters.
    (b) Agency determination concerning substantiality of the 
disqualifying financial interest. In determining whether a disqualifying 
financial interest is sufficiently substantial to be deemed likely to 
affect the integrity of the employee's services to the Government, the 
responsible official may consider the following factors:
    (1) The type of interest that is creating the disqualification (e.g. 
stock, bonds, real estate, other securities, cash payment, job offer, or 
enhancement of a spouse's employment);
    (2) The identity of the person whose financial interest is involved, 
and if the interest is not the employee's, the relationship of that 
person to the employee;
    (3) The dollar value of the disqualifying financial interest, if it 
is known or can be estimated (e.g. the amount of cash payment which may 
be gained or lost, the salary of the job which will be gained or lost, 
the predictable change in either the market value of the stock or the 
actual or potential profit or loss or cost of the matter to the company 
issuing the stock, the change in the value of real estate or other 
securities);
    (4) The value of the financial instrument or holding from which the 
disqualifying financial interest arises (e.g. the face value of the 
stock, bond, other security or real estate) and its value in 
relationship to the individual's assets. If the disqualifying financial 
interest is that of a general partner or organization specified in 
section 208, this information must be provided only to the extent that 
it is known by the employee; and

[[Page 656]]

    (5) The nature and importance of the employee's role in the matter, 
including the extent to which the employee is called upon to exercise 
discretion in the matter.
    (6) Other factors which may be taken into consideration include:
    (i) The sensitivity of the matter;
    (ii) The need for the employee's services in the particular matter; 
and
    (iii) Adjustments that may be made in the employee's duties that 
would reduce or eliminate the likelihood that the integrity of the 
employee's services would be questioned by a reasonable person.



Sec. 2640.302  Waivers issued pursuant to 18 U.S.C. 208(b)(3).

    (a) Requirements for issuing an individual waiver under 18 U.S.C. 
208(b)(3). Pursuant to 18 U.S.C. 208(b)(3), an agency may determine in 
an individual case that the prohibition of 18 U.S.C. 208(a) should not 
apply to a special Government employee serving on, or an individual 
being considered for, appointment to an advisory committee established 
under the Federal Advisory Committee Act, notwithstanding the fact that 
the individual has one or more financial interests that would be 
affected by the activities of the advisory committee. The agency's 
determination must be based on a certification that the need for the 
employee's services outweighs the potential for a conflict of interest 
created by the financial interest involved. Waivers issued pursuant to 
18 U.S.C. 208(b)(3) should comply with the following requirements:
    (1) The advisory committee upon which the individual is serving, or 
will serve, is an advisory committee within the meaning of the Federal 
Advisory Committee Act, 5 U.S.C. app.;
    (2) The waiver must be issued in writing by the Government official 
responsible for the individual's appointment (or other Government 
official to which authority to issue such waivers has been delegated) 
after the official reviews the financial disclosure report filed by the 
individual pursuant to the Ethics in Government Act of 1978;
    (3) The waiver must include a certification that the need for the 
individual's services on the advisory committee outweighs the potential 
for a conflict of interest;
    (4) The facts upon which the certification is based should be fully 
described in the waiver, including the nature of the financial interest, 
and the particular matter or matters to which the waiver applies;
    (5) The waiver should describe any limitations on the individual's 
ability to act in the matter or matters;
    (6) The waiver must be issued prior to the individual taking any 
action in the matter or matters; and
    (7) The waiver may apply to both present and future financial 
interests of the individual, provided the interests are described with 
sufficient specificity.
    (b) Agency certification concerning need for individual's services. 
In determining whether the need for an individual's services on an 
advisory committee outweighs the potential for a conflict of interest 
created by the disqualifying financial interest, the responsible 
official may consider the following factors:
    (1) The type of interest that is creating the disqualification (e.g. 
stock, bonds, real estate, other securities, cash payment, job offer, or 
enhancement of a spouse's employment);
    (2) The identity of the person whose financial interest is involved, 
and if the interest is not the individual's, the relationship of that 
person to the individual;
    (3) The uniqueness of the individual's qualifications;
    (4) The difficulty of locating a similarly qualified individual 
without a disqualifying financial interest to serve on the committee;
    (5) The dollar value of the disqualifying financial interest, if it 
is known or can be estimated (e.g. the amount of cash payment which may 
be gained or lost, the salary of the job which will be gained or lost, 
the predictable change in either the market value of the stock or the 
actual or potential profit or loss or cost of the matter to the company 
issuing the stock, the change in the value of real estate or other 
securities);
    (6) The value of the financial instrument or holding from which the 
disqualifying financial interest arises (e.g. the face value of the 
stock, bond, other

[[Page 657]]

security or real estate) and its value in relationship to the 
individual's assets. If the disqualifying financial interest is that of 
a general partner or organization specified in section 208, this 
information must be provided only to the extent that it is known by the 
employee; and
    (7) The extent to which the disqualifying financial interest will be 
affected individually or particularly by the actions of the advisory 
committee.



Sec. 2640.303  Consultation and notification regarding waivers.

    When practicable, an official is required to consult formally or 
informally with the Office of Government Ethics prior to granting a 
waiver referred to in Sec. Sec. 2640.301 and 2640.302. A copy of each 
such waiver is to be forwarded to the Director of the Office of 
Government Ethics.



Sec. 2640.304  Public availability of agency waivers.

    (a) Availability. A copy of an agency waiver issued pursuant to 18 
U.S.C. 208 (b)(1) or (b)(3) shall be made available upon request to the 
public by the issuing agency. Public release of waivers shall be in 
accordance with the procedures set forth in section 105 of the Ethics in 
Government Act of 1978, as amended. Those procedures are described in 5 
CFR 2634.603.
    (b) Limitations on availability. In making a waiver issued pursuant 
to 18 U.S.C. 208 (b)(1) or (b)(3) publicly available, an agency:
    (1) May withhold from public disclosure any information contained in 
the waiver that would be exempt from disclosure pursuant to 5 U.S.C. 
552; and
    (2) Shall withhold from public disclosure information in a waiver 
issued pursuant to 18 U.S.C. 208(b)(3) concerning an individual's 
financial interest which is more extensive than that required to be 
disclosed by the individual in his financial disclosure report under the 
Ethics in Government Act of 1978, as amended, or which is otherwise 
subject to a prohibition on public disclosure under law.



PART 2641_POST-EMPLOYMENT CONFLICT OF INTEREST RESTRICTIONS--Table of Contents




                      Subpart A_General Provisions

Sec.
2641.101 Definitions.

                    Subpart B_Substantive Provisions

2641.201 One-year restriction on a former senior employee's 
          representations to employees of former agency concerning 
          matter, regardless of prior involvement.

Appendix A to Part 2641--Positions Exempted From 18 U.S.C. 207(c)
Appendix B to Part 2641--Agency Components for Purposes of 18 U.S.C. 
          207(c)

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 18 
U.S.C. 207; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    Source: 56 FR 3963, Feb. 1, 1991, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 2641.101  Definitions.

    The following terms are defined for purposes of this part:
    Agency includes any department, independent establishment, 
commission, administration, authority, board, or bureau of the United 
States, and includes a Government corporation. 18 U.S.C. 202(e)(1); 5 
U.S.C. 105.
    Department means one of the executive departments enumerated in 5 
U.S.C. 101.
    Designated agency ethics official means an officer or employee who 
is designated by the head of an agency to coordinate and manage an 
agency's ethics program in accordance with Sec. 2638.203 of this 
subchapter. 5 CFR 2638.202.
    Employee means any officer or employee of the executive branch as 
that term is defined in this section. Unless otherwise indicated, the 
term does not include the President or the Vice President. 18 U.S.C. 
202(c). It does not include an individual performing services for the 
United States as an independent contractor under a personal services 
contract or an enlisted member of the armed forces as defined in 5 
U.S.C. 2101(2). 18 U.S.C. 202(a). Unless

[[Page 658]]

otherwise indicated, the term encompasses senior employees, very senior 
employees, and special Government employees as defined in this section.
    Executive branch includes each executive agency as defined in 5 
U.S.C. 105, other than the General Accounting Office, and also includes 
any other entity or administrative unit in the executive branch. 18 
U.S.C. 202(e)(1).
    Former employee, former senior employee, or former very senior 
employee means one who was, and is no longer, an employee, senior 
employee, or very senior employee.
    Senior employee means an employee, other than a very senior 
employee, who is:
    (1) Employed in a position for which the rate of pay is specified in 
or fixed according to 5 U.S.C. 5311-5318 (the Executive Schedule);
    (2) Employed in a position for which the basic rate of pay, 
exclusive of any locality-based pay adjustment under 5 U.S.C. 5304 (or 
any comparable adjustment pursuant to interim authority of the 
President) is equal to or greater than the rate of basic pay payable for 
Level V of the Executive Schedule (including any such position in the 
Senior Executive Service or other SES-type systems, e.g., the Senior 
Foreign Service);
    (3) Appointed by the President to a position under 3 U.S.C. 
105(a)(2)(B);
    (4) Appointed by the Vice President to a position under 3 U.S.C. 
106(a)(1)(B);
    (5) Employed in a position which is held by an active duty 
commissioned officer of the uniformed services who is serving in a grade 
or rank for which the pay grade (as specified in 37 U.S.C. 201) is pay 
grade O-7 or above; or
    (6) Detailed to any such position.
    Special Government employee includes an officer or employee of an 
agency who is retained, designated, appointed, or employed to perform, 
with or without compensation, for not to exceed 130 days during any 
period of three hundred and sixty-five consecutive days, temporary 
duties either on a full-time or intermittent basis. See 18 U.S.C. 
202(a).
    Very senior employee means an employee who is:
    (1) Serving in the position of Vice President of the United States;
    (2) Employed in a position at a rate of pay payable for Level I of 
the Executive Schedule;
    (3) Employed in a position in the Executive Office of the President 
at a rate of pay payable for Level II of the Executive Schedule;
    (4) Appointed by the President to a position under 3 U.S.C. 
105(a)(2)(A);
    (5) Appointed by the Vice President to a position under 3 U.S.C. 
106(a)(1)(A); or
    (6) Detailed to any such position.

[56 FR 3963, Feb. 1, 1991, as amended at 59 FR 34756, July 7, 1994]



                    Subpart B_Substantive Provisions



Sec. 2641.201  One-year restriction on a former senior employee's 

representations to employees of former agency concerning matter, regardless of 

prior involvement.

    (a) Basic prohibition of 18 U.S.C. 207(c). For one year after 
service in a ``senior'' position terminates, no former ``senior'' 
employee may knowingly make, with the intent to influence, any 
communication to or appearance before an employee of a department or 
agency in which he served in any capacity during the one-year period 
prior to termination from ``senior'' service, if that communication or 
appearance is made on behalf of any other person (except the United 
States) in connection with any matter on which he seeks official action 
by any employee.
    (b) Applicability. 18 U.S.C. 207(c) applies to all former ``senior 
employees'' as defined in Sec. 2641.101 of this part. Certain 
individuals who served in ``very senior'' positions are subject to the 
one-year bar set forth in section 207(d) in lieu of that set forth in 
section 207(c). See definition of ``very senior employee'' in Sec. 
2641.101.
    (1) Special Government employees. 18 U.S.C. 207(c) does not apply to 
an individual as a result of service as a special Government employee 
unless the individual:
    (i) Served in a senior employee position while serving as a special 
Government employee; and
    (ii) Served 60 or more days as a special Government employee during 
the one-year period before terminating service as a senior employee.

[[Page 659]]

    (2) Exemption from 18 U.S.C. 207(c). 18 U.S.C. 207(c) does not apply 
to an individual as a result of service in a senior position if that 
position has been exempted from section 207(c) pursuant to the waiver 
procedures set forth in Sec. 2641.201(d) of this part.
    (c) Measurement of restriction. 18 U.S.C. 207(c) is a one-year 
restriction. The one-year period is measured from the date when the 
employee ceases to be a senior employee, not from the termination of 
Government service, unless the two occur simultaneously.
    (d) Waiver of 18 U.S.C. 207(c). Certain positions or categories of 
positions can be exempted from 18 U.S.C. 207(c) through the grant of a 
waiver by the Director of the Office of Government Ethics. 18 U.S.C. 
207(c)(2)(C).
    (1) Effect of exemption. When an eligible position is exempted from 
18 U.S.C. 207(c) by the Director of the Office of Government Ethics, the 
one-year restriction of section 207(c) will not be triggered upon any 
employee's termination from the position.
    (2) Eligible senior employee positions. Any senior employee position 
is eligible for exemption except the following:
    (i) Positions for which the rate of pay is specified in or fixed 
according to 5 U.S.C. 5311-5318 (the Executive Schedule);
    (ii) Positions whose occupants are appointed by the President 
pursuant to 3 U.S.C. 105(a)(2)(B); or
    (iii) Positions whose occupants are appointed by the Vice President 
pursuant to 3 U.S.C. 106(a)(1)(B).
    (3) Procedure. An exemption shall be granted in accordance with the 
following procedure:
    (i) Initial exemption. An agency's designated agency ethics official 
shall forward to the Director of the Office of Government Ethics a 
written request that a certain senior employee position or category of 
positions be exempted from 18 U.S.C. 207(c). Any such request shall 
address the criteria set forth in paragraph (d)(5) of this section. A 
designated agency ethics official may also request that a current 
exemption be revoked.
    (ii) Agency update. Designated agency ethics officials shall by 
November 30 of each year forward to the Office of Government Ethics a 
letter stating whether positions or categories of positions currently 
exempted should remain exempt from the application of 18 U.S.C. 207(c) 
in light of the criteria set forth in paragraph (d)(5) of this section.
    (iii) Action by Office of Government Ethics. The Director of the 
Office of Government Ethics shall promptly provide to the designated 
agency ethics official a written response to each initial request for 
exemption or revocation. The Director shall annually publish in appendix 
A to this part an updated compilation of all exempted positions or 
categories of positions. The Director shall publish notice in the 
Federal Register when he determines to revoke an exemption based on his 
finding that the position or positions no longer qualify for exemption.
    (4) Effective date of exemption. Exemptions issued under paragraph 
(d) of this section shall be effective as of the date of the Director's 
written response to the designated agency ethics official indicating 
that the request for exemption has been granted. An exemption shall 
inure to the benefit of the individual who holds the position when the 
exemption takes effect, as well as to his successors, but shall not 
benefit individuals who terminated senior service prior to the effective 
date of the exemption. Revocation of an exemption shall be effective 90 
days after the date that the Director publishes notice of the revocation 
in the Federal Register. Individuals who formerly served in an exempted 
position will not become subject to 18 U.S.C. 207(c) in the event the 
position's exempted status is revoked subsequent to the individual's 
termination from the position.
    (5) Criteria for exemption. Before exempting a position or positions 
from 18 U.S.C. 207(c), the Director of the Office of Government Ethics 
must find that with respect to the position or category of positions:
    (i) The granting of the exemption would not create the potential for 
use by former senior employees of undue influence or unfair advantage 
based on past Government service; and
    (ii) The imposition of the restrictions would create an undue 
hardship on the department or agency in obtaining qualified personnel to 
fill such position

[[Page 660]]

or positions as shown by relevant factors which may include, but are not 
limited to:
    (A) The payment of a special rate of pay to the incumbent of the 
position pursuant to specific statutory authority; or
    (B) The requirement that the incumbent of the position have 
outstanding qualifications in a scientific, technological, or other 
technical discipline.
    (e) Separate departmental or agency components. For purposes of 18 
U.S.C. 207(c) only, the Director of the Office of Government Ethics is 
authorized by 18 U.S.C. 207(h) to designate departmental and agency 
``components'' that are distinct and separate from the ``parent'' 
department or agency and from each other. Absent such designation, the 
representational bar of section 207(c) extends to the whole of the 
department or agency in which the former senior employee served.
    (1) Effect of designation. An eligible former senior employee who 
served in a ``parent'' department or agency is not barred by 18 U.S.C. 
207(c) from making communications to or appearances before any employee 
of any designated component of that parent, but is barred as to 
employees of that parent or of other components that have not been 
designated. An eligible former senior employee who served in any 
designated component of a parent department or agency is barred from 
communicating to or making an appearance before any employee of that 
component, but is not barred as to any employee of the parent or of any 
other component.
    (2) Eligible senior employees. All former senior employees are 
eligible to benefit from this procedure except those who were senior 
employees by virtue of having been:
    (i) Employed in a position for which the rate of pay is specified in 
or fixed according to 5 U.S.C. 5311-5318 (the Executive Schedule);
    (ii) Appointed by the President to a position under 3 U.S.C. 
105(a)(2)(B); or
    (iii) Appointed by the Vice President to a position under 3 U.S.C. 
106(a)(1)(B).
    (3) Procedure. Distinct and separate components shall be designated 
in accordance with the following procedure:
    (i) Initial Designation. Initial designations of departmental and 
agency components are set forth in appendix B to this part and are 
effective as of January 1, 1991.
    (ii) Agency update. A designated agency ethics official may at any 
time recommend the designation of an additional component or the 
revocation of a current designation by forwarding a written request to 
the Director addressing the criteria set forth in paragraph (e)(6) of 
this section. Designated agency ethics officials shall by November 30 of 
each year forward to the Office of Government Ethics a letter stating 
whether components currently designated should remain designated in 
light of the criteria set forth in paragraph (e)(6).
    (iii) Action of Office of Government Ethics. The Director of the 
Office of Government Ethics shall by rule make or revoke a component 
designation after considering the recommendation of the designated 
agency ethics official. The Director shall annually publish in appendix 
B to this part an updated compilation of all designated departmental or 
agency components.
    (4) Effective date of designation. Initial component designations 
shall be effective as of January 1, 1991. Any subsequent designation 
shall be effective as of the effective date of the rule that creates the 
designation, but shall not be effective as to employees who terminated 
senior service prior to that date. Revocation of a component designation 
shall be effective 90 days after the effective date of the rule that 
revokes the designation, but shall not be effective as to individuals 
who terminated senior service prior to the expiration of such 90-days 
period.
    (5) Unauthorized designations. No. agency or bureau within the 
Executive Office of the President may be designated as a separate 
departmental or agency component.
    (6) Criteria for designation. Before designating an agency component 
as distinct and separate for purposes of 18 U.S.C. 207(c), the Director 
of the Office of Government Ethics must find that:
    (i) There exists no potential for use by former senior employees of 
undue influence or unfair advantage based on past Government service; 
and
    (ii) The component is an agency or bureau, within a department or 
agency,

[[Page 661]]

that exercises functions which are distinct and separate from the 
functions of the parent department or agency and from the functions of 
other components of that parent as shown by relevant factors which may 
include, but are not limited to:
    (A) The component's creation by statute or a statutory reference 
indicating that it exercises functions which are distinct and separate; 
or
    (B) The component's exercise of separate and distinct subject matter 
or geographical jurisdiction.
    (7) Supervisory relationship. Provided that a component has a 
separate statutory basis or exercises distinct and separate subject 
matter or geographical jurisdiction, the parent will generally be deemed 
by the Director of the Office of Government Ethics to be distinct and 
separate from that component notwithstanding that the parent may 
exercise general supervisory authority over the component. However, the 
degree of a parent's supervision over a component will be a factor in 
determining whether subject matter or geographical jurisdiction is in 
fact distinct and separate. The Director will not ordinarily consider 
two components as distinct and separate from one another where one 
component exercises supervisory authority over another.

    Appendix A to Part 2641--Positions Exempted From 18 U.S.C. 207(c)

    Pursuant to the provisions of 18 U.S.C. 207(c)(2)(C), each of the 
following positions is exempt from the provisions of 18 U.S.C. 207(c). 
All exemptions are effective as of the date indicated.

Agency: Department of Justice.
Positions: United States Trustee (21) (effective June 2, 1994).

Agency: Securities and Exchange Commission.
Positions:
    Solicitor, Office of General Counsel (effective October 29, 1991);
    Chief Litigation Counsel, Division of Enforcement (effective October 
29, 1991).

[57 FR 3116, Jan. 28, 1992, as amended at 62 FR 31865, June 11, 1997]

  Appendix B to Part 2641--Agency Components for Purposes of 18 U.S.C. 
                                 207(c)

    Pursuant to the provisions of 18 U.S.C. 207(h), each of the 
following departments or agencies is determined, for purposes of 18 
U.S.C. 207(c), to have within it distinct and separate components as set 
forth below. Except as otherwise indicated, all designations are 
effective as of January 1, 1991.

                     Parent: Department of Commerce

Components:
    Bureau of the Census
    Bureau of Industry and Security (formerly Bureau of Export 
Administration) (effective January 28, 1992)
    Economic Development Administration
    International Trade Administration
    Minority Business Development Administration
    National Oceanic and Atmospheric Administration
    National Telecommunications and Information Administration
    Patent and Trademark Office
    Technology Administration (effective January 28, 1992)

                      Parent: Department of Defense

Components:
    Department of the Air Force
    Department of the Army
    Department of the Navy
    Defense Information Systems Agency
    Defense Intelligence Agency
    Defense Logistics Agency
    Defense Threat Reduction Agency (effective February 5, 1999)
    National Geospatial-Intelligence Agency (formerly National Imagery 
and Mapping Agency) (effective May 16, 1997)
    National Reconnaissance Office (effective January 30, 2003)
    National Security Agency

                      Parent: Department of Energy

Component:
    Federal Energy Regulatory Commission

             Parent: Department of Health and Human Services

Components:
    Administration on Aging (effective May 16, 1997)
    Administration for Children and Families (effective January 28, 
1992)
    Agency for Healthcare Research and Quality (formerly Agency for 
Health Care Policy and Research) (effective May 16, 1997)
    Agency for Toxic Substances and Disease Registry (effective May 16, 
1997)
    Centers for Disease Control and Prevention (effective May 16, 1997)

[[Page 662]]

    Centers for Medicare and Medicaid Services (formerly Health Care 
Financing Administration)
    Food and Drug Administration
    Health Resources and Services Administration (effective May 16, 
1997)
    Indian Health Service (effective May 16, 1997)
    National Institutes of Health (effective May 16, 1997)
    Substance Abuse and Mental Health Services Administration (effective 
May 16, 1997)

                 Parent: Department of Homeland Security

Components:
    Directorate of Emergency Preparedness and Response (effective 
November 23, 2004.)
    Directorate of Information Analysis and Infrastructure Protection 
(effective November 23, 2004.)
    Directorate of Science and Technology (effective November 23, 2004.)
    Federal Law Enforcement Training Center (effective November 23, 
2004.)
    Transportation Security Administration (effective November 23, 
2004.)
    United States Secret Service (effective November 23, 2004.)
    United States Coast Guard (effective November 23, 2004.)

                   Parent: Department of the Interior

Components: \1\
---------------------------------------------------------------------------

    \1\ All designated components under the jurisdiction of a particular 
Assistant Secretary shall be considered a single component for purposes 
of determining the scope of 18 U.S.C. 207(c) as applied to senior 
employees serving on the immediate staff of that Assistant Secretary.
---------------------------------------------------------------------------

    Bureau of Indian Affairs (effective January 28, 1992)
    Bureau of Land Management (effective January 28, 1992)
    Bureau of Reclamation (effective January 28, 1992)
    Minerals Management Service (effective January 28, 1992)
    National Park Service (effective January 28, 1992)
    Office of Surface Mining Reclamation and Enforcement (effective 
January 28, 1992)
    U.S. Fish and Wildlife Service (effective January 28, 1992)
    U.S. Geological Survey (effective January 28, 1992)

                      Parent: Department of Justice

Components:
    Antitrust Division
    Bureau of Alcohol, Tobacco, Firearms and Explosives (effective 
November 23, 2004.)
    Bureau of Prisons (including Federal Prison Industries, Inc.)
    Civil Division
    Civil Rights Division
    Community Relations Service
    Criminal Division
    Drug Enforcement Administration
    Environment and Natural Resources Division
    Executive Office for United States Attorneys \2\ (effective January 
28, 1992)
---------------------------------------------------------------------------

    \2\ The Executive Office for United States Attorneys shall not be 
considered separate from any Office of the United States Attorney for a 
judicial district, but only from other designated components of the 
Department of Justice.
---------------------------------------------------------------------------

    Executive Office for United States Trustees \3\ (effective January 
28, 1992)
---------------------------------------------------------------------------

    \3\ The Executive Office for United States Trustees shall not be 
considered separate from any Office of the United States Trustee for a 
region, but only from other designated components of the Department of 
Justice.
---------------------------------------------------------------------------

    Federal Bureau of Investigation
    Foreign Claims Settlement Commission
    Independent Counsel appointed by the Attorney General
    Office of Justice Programs
    Office of the Pardon Attorney (effective January 28, 1992)
    Offices of the United States Attorney (94) \4\
---------------------------------------------------------------------------

    \4\ Each Office of the United States Attorney for a judicial 
district shall be considered a separate component from each other such 
office.
---------------------------------------------------------------------------

Offices of the United States Trustee (21) \5\
---------------------------------------------------------------------------

    \5\ Each Office of the United States Trustee for a region shall be 
considered a separate component from each other such office.
---------------------------------------------------------------------------

    Tax Division
    United States Marshals Service (effective May 16, 1997)
    United States Parole Commission

                       Parent: Department of Labor

Components:
    Bureau of Labor Statistics
    Employee Benefits Security Administration (formerly Pension and 
Welfare Benefits Administration) (effective May 16, 1997)
    Employment and Training Administration
    Employment Standards Administration
    Mine Safety and Health Administration
    Occupational Safety and Health Administration
    Office of Disability Employment Policy (effective January 30, 2003)

                       Parent: Department of State

Component:
    Foreign Service Grievance Board

[[Page 663]]

                  Parent: Department of Transportation

Components:
    Federal Aviation Administration
    Federal Highway Administration
    Federal Motor Carrier Safety Administration (effective January 30, 
2003)
    Federal Railroad Administration
    Federal Transit Administration
    Maritime Administration
    National Highway Traffic Safety Administration
    Saint Lawrence Seaway Development Corporation
    Surface Transportation Board (effective May 16, 1997)

                   Parent: Department of the Treasury

Components:
    Alcohol and Tobacco Tax and Trade Bureau (effective November 23, 
2004.)
    Bureau of Engraving and Printing
    Bureau of the Mint
    Bureau of the Public Debt
    Comptroller of the Currency
    Financial Crimes Enforcement Network (FinCEN) (effective January 30, 
2003)
    Financial Management Service
    Internal Revenue Service
    Office of Thrift Supervision

[56 FR 3963, Feb. 1, 1991, as amended at 57 FR 3116, Jan. 28, 1992; 57 
FR 11673, Apr. 7, 1992; 58 FR 33755, June 21, 1993; 62 FR 26917, May 16, 
1997; 62 FR 31865, June 11, 1997; 64 FR 5710, Feb. 5, 1999; 68 FR 4683, 
4684, Jan. 30, 2003; 69 FR 68055, 68056, Nov. 23, 2004]

[[Page 665]]



                 CHAPTER XXI--DEPARTMENT OF THE TREASURY




  --------------------------------------------------------------------
Part                                                                Page
3101            Supplemental standards of ethical conduct 
                    for employees of the Department of the 
                    Treasury................................         667

[[Page 667]]



PART 3101_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF THE TREASURY--Table of Contents




Sec.
3101.101 General.
3101.102 Designation of separate agency components.
3101.103 Prohibition on purchase of certain assets.
3101.104 Outside employment.
3101.105 Additional rules for Bureau of Alcohol, Tobacco and Firearms 
          employees.
3101.106 Additional rules for Internal Revenue Service employees.
3101.107 Additional rules for Legal Division employees.
3101.108 Additional rules for Office of the Comptroller of the Currency 
          employees.
3101.109 Additional rules for Office of Thrift Supervision employees.
3101.110 Additional rules for United States Customs Service employees.
3101.111 Additional rules for United States Secret Service employees. 
          [Reserved]

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 18 U.S.C. 212, 213; 26 U.S.C. 7214(b); E.O. 
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.203(a), 2635.403(a), 2635.803, 2635.807(a)(2)(ii).

    Source: 60 FR 22251, May 5, 1995, unless otherwise noted.



Sec. 3101.101  General.

    (a) Purpose. In accordance with 5 CFR 2635.105, the regulations in 
this part apply to employees of the Department of the Treasury and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. Employees are required to 
comply with 5 CFR part 2635, this part, and bureau guidance and 
procedures established pursuant to this section. Department employees 
are also subject to any additional rules of conduct that the Department 
or their employing bureaus are authorized to issue. See 31 CFR part 0, 
Department of the Treasury Employee Rules of Conduct.
    (b) Bureau instructions. With the concurrence of the Designated 
Agency Ethics Official (DAEO), bureaus of the Department of the Treasury 
are authorized to issue instructions or manual issuances providing 
explanatory guidance and establishing procedures necessary to implement 
this part and part 2635 of this title. See 5 CFR 2635.105(c).
    (c) Definition of ``agency designee''. As used in this part and in 
part 2635 of this title, the term ``agency designee'' refers to any 
employee who has been delegated authority by an instruction or manual 
issuance issued by a bureau under paragraph (b) of this section to make 
a determination, give an approval, or take other action required or 
permitted by this part or part 2635 of this title with respect to 
another employee. See 5 CFR 2635.102(b).



Sec. 3101.102  Designation of separate agency components.

    Pursuant to 5 CFR 2635.203(a), each of the following components of 
the Department of the Treasury is designated as a separate agency for 
purposes of the regulations contained in subpart B of 5 CFR part 2635 
governing gifts from outside sources and 5 CFR 2635.807 governing 
teaching, speaking or writing:
    (a) Bureau of Alcohol, Tobacco and Firearms (ATF);
    (b) Bureau of Engraving and Printing;
    (c) Bureau of the Public Debt;
    (d) Federal Law Enforcement Training Center;
    (e) Financial Management Service;
    (f) Internal Revenue Service (IRS);
    (g) Office of the Comptroller of the Currency (OCC);
    (h) Office of the Inspector General;
    (i) Office of Thrift Supervision (OTS);
    (j) United States Customs Service (USCS);
    (k) United States Mint; and
    (l) United States Secret Service.
    For purposes of this section, employees in the Legal Division shall 
be considered to be part of the bureaus or offices in which they serve.
    Note: As a result of the designations contained in this section, 
employees of the remaining parts of the Department of the Treasury 
(e.g., employees in Departmental Offices, including the Financial Crimes 
Enforcement Network) will also be treated as employees of an agency that 
is separate from all of the above listed bureaus and offices for 
purposes of determining whether the donor of a gift is a prohibited 
source under 5 CFR 2635.203(d) and for identifying an employee's 
``agency'' under 5 CFR 2635.807 governing teaching, speaking and 
writing.

[[Page 668]]



Sec. 3101.103  Prohibition on purchase of certain assets.

    (a) General prohibition. Except as provided in paragraph (b) of this 
section, no employee of the Department of the Treasury shall purchase, 
directly or indirectly, property:
    (1) Owned by the Government and under the control of the employee's 
bureau (or a bureau over which the employee exercises supervision); or
    (2) Sold under the direction or incident to the functions of the 
employee's bureau.
    (b) Exceptions. The prohibition in paragraph (a) of this section 
does not apply to the purchase of Government securities or items sold 
generally to the public at fixed prices, such as numismatic items 
produced by the United States Mint or foreign gifts deposited with the 
Department pursuant to 5 U.S.C. 7342 that an employee may purchase 
pursuant to 41 CFR part 101-49.
    (c) Waiver. An employee may make a purchase otherwise prohibited by 
this section where a written waiver of the prohibition has been given to 
the employee by an agency designee with the advice and legal clearance 
of the DAEO, or the appropriate Office of Chief or Legal Counsel. Such a 
waiver may be granted only on a determination that the waiver is not 
otherwise prohibited by law and that, in the mind of a reasonable person 
with knowledge of the particular circumstances, the purchase of the 
asset will not raise a question as to whether the employee has used his 
or her official position or inside information to obtain an advantageous 
purchase or create an appearance of loss of impartiality in the 
performance of the employee's duties.
    Note: Employees of the OCC and OTS are subject to additional 
limitations on the purchase of assets that are set out in bureau-
specific rules contained in Sec. Sec. 3101.108 and 3101.109.



Sec. 3101.104  Outside employment.

    (a) General requirement for prior approval. All Department of the 
Treasury employees shall obtain prior written approval before engaging 
in any outside employment or business activities, with or without 
compensation, except to the extent that the employing bureau issues an 
instruction or manual issuance pursuant to paragraph (b) of this section 
exempting an activity or class of activities from this requirement. 
Approval shall be granted only on a determination that the employment or 
activity is not expected to involve conduct prohibited by statute, part 
2635 of this title, or any provision of this part.
    Note: Employees of the ATF, IRS, Legal Division, OCC, USCS and 
United States Secret Service are subject to additional limitations on 
outside employment and activities that are set out in bureau-specific 
rules contained in this part.
    (b) Bureau responsibilities. Each bureau, which for the purposes of 
this section includes the Departmental Offices and the Office of the 
Inspector General, shall issue instructions or manual issuances 
governing the submission of requests for approval of outside employment 
or business activities and designating appropriate officials to act on 
such requests. The instructions or manual issuances may exempt 
categories of employment or activities from the prior approval 
requirement based on a determination that employment or activities 
within those categories would generally be approved and are not likely 
to involve conduct prohibited by statute, part 2635 of this title or any 
provision of this part. Bureaus may include in their instructions or 
issuances examples of outside employment or activities that are 
permissible or impermissible consistent with this part and part 2635 of 
this title. Bureaus shall retain in employees' Official Personnel 
Folders (temporary side) all requests for approval whether granted or 
denied.



Sec. 3101.105  Additional rules for Bureau of Alcohol, Tobacco and Firearms employees.

    The following rules apply to the employees of the Bureau of Alcohol, 
Tobacco and Firearms and are in addition to Sec. Sec. 3101.101 through 
3101.104:
    (a) Prohibited financial interests. Except as provided in this 
section, no employee of the ATF, or spouse or minor child of an ATF 
employee, shall have, directly or indirectly, any financial interest, 
including compensated employment, in the alcohol, tobacco, firearms

[[Page 669]]

or explosives industries. The term financial interest is defined in 
Sec. 2635.403(c) of this title.
    (b) Waiver. An agency designee, with the advice and legal clearance 
of the DAEO or Office of the Chief Counsel, may grant a written waiver 
of the prohibition in paragraph (a) of this section on a determination 
that the financial interest is not prohibited by 26 U.S.C. 7214(b) and 
that, in the mind of a reasonable person with knowledge of the 
particular circumstances, the financial interest will not create an 
appearance of misuse of position or loss of impartiality, or call into 
question the impartiality and objectivity with which the ATF's programs 
are administered. A waiver under this paragraph may require appropriate 
conditions, such as execution of a written disqualification.



Sec. 3101.106  Additional rules for Internal Revenue Service employees.

    The following rules apply to the employees of the Internal Revenue 
Service and are in addition to Sec. Sec. 3101.101 through 3101.104:
    (a) Prohibited recommendations. Employees of the IRS shall not 
recommend, refer or suggest, specifically or by implication, any 
attorney, accountant, or firm of attorneys or accountants to any person 
in connection with any official business which involves or may involve 
the IRS.
    (b) Prohibited outside employment. Involvement by an employee of the 
IRS in the following types of outside employment or business activities 
is prohibited and shall constitute a conflict with the employee's 
official duties pursuant to 5 CFR 2635.802:
    (1) Performance of legal services involving Federal, State or local 
tax matters;
    (2) Appearing on behalf of any taxpayer as a representative before 
any Federal, State, or local government agency, in an action involving a 
tax matter except on written authorization of the Commissioner of 
Internal Revenue;
    (3) Engaging in accounting, or the use, analysis, and interpretation 
of financial records when such activity involves tax matters;
    (4) Engaging in bookkeeping, the recording of transactions, or the 
record-making phase of accounting, when such activity is directly 
related to a tax determination; and
    (5) Engaging in the preparation of tax returns for compensation, 
gift, or favor.
    (c) Seasonal employees. Seasonal employees of the IRS while in non-
duty status may engage in outside employment or activities other than 
those prohibited by paragraph (b) of this section without obtaining 
prior written permission.



Sec. 3101.107  Additional rules for Legal Division employees.

    The following rules apply to the employees of the Legal Division and 
are in addition to Sec. Sec. 3101.101 through 3101.104:
    (a) Application of rules of other bureaus. In addition to the rule 
contained in paragraph (b) of this section, employees in the Legal 
Division shall be covered by the rules contained in this part that are 
applicable to employees of the bureaus or offices in which the Legal 
Division employees serve, subject to any instructions which the General 
Counsel or appropriate Chief or Legal Counsel may issue in accordance 
with Sec. 3101.101(b).
    (b) Prohibited outside employment. Pursuant to 5 CFR 2635.802, it is 
prohibited and shall constitute a conflict with the employee's official 
duties for an attorney employed in the Legal Division to engage in the 
outside practice of law that might require the attorney to:
    (1) Take a position that is or appears to be in conflict with the 
interests of the Department of the Treasury which is the client to whom 
the attorney owes a professional responsibility; or
    (2) Interpret any statute, regulation or rule administered or issued 
by the Department.



Sec. 3101.108  Additional rules for Office of the Comptroller of the Currency employees.

    The following rules apply to the employees of the Office of the 
Comptroller of the Currency and are in addition to Sec. Sec. 3101.101-
3101.104:
    (a) Prohibited financial interests--(1) Prohibition. Except as 
provided in paragraphs (a)(3) and (g) of this section, no OCC employee, 
or spouse or minor child of an OCC employee, shall own,

[[Page 670]]

directly or indirectly, securities of any commercial bank (including 
both national and State-chartered banks) or commercial bank affiliate, 
including a bank holding company.
    (2) Definition of ``securities''. For purposes of paragraphs (a)(1) 
and (a)(3) of this section, the term ``securities'' includes all 
interests in debt or equity instruments. The term includes, without 
limitation, secured and unsecured bonds, debentures, notes, securitized 
assets and commercial paper, as well as all types of preferred and 
common stock. The term encompasses both current and contingent ownership 
interests, including any beneficial or legal interest derived from a 
trust. It extends to any right to acquire or dispose of any long or 
short position in such securities and includes, without limitation, 
interests convertible into such securities, as well as options, rights, 
warrants, puts, calls, and straddles with respect thereto.
    (3) Exceptions. Nothing in this section prohibits an OCC employee, 
or spouse or minor child of an OCC employee, from:
    (i) Investing in a publicly traded or publicly available mutual fund 
or other collective investment fund or in a widely held pension or 
similar fund provided that the fund does not invest more than 25 percent 
of its assets in securities of one or more commercial banks (including 
both national and State-chartered banks) and commercial bank affiliates 
(including bank holding companies) and the employee neither exercises 
control over nor has the ability to exercise control over the financial 
interests held in the fund;
    (ii) Investing in the publicly traded securities of a holding 
company of a nonbank bank or of a retailing firm that owns or sponsors a 
credit card bank as defined by the Competitive Equality Banking Act of 
1987, except that an employee who owns such an interest must be 
disqualified from participating in the regulation or supervision of the 
nonbank bank or the credit card bank;
    (iii) Using a commercial bank or commercial bank affiliate as 
custodian or trustee of accounts containing tax-deferred retirement 
funds; or
    (iv) Owning any security pursuant to a waiver granted under 
paragraph (g) of this section.
    (b) Prohibited borrowing--(1) Prohibition on employee borrowing. 
Except as provided in this section, no covered OCC employee shall seek 
or obtain credit from any national bank or from an officer, director, 
employee, or subsidiary of any national bank.
    (2) Prohibition on borrowing by a spouse or minor child. The 
prohibition in paragraph (b)(1) of this section shall apply to the 
spouse or minor child of a covered OCC employee unless the loan or 
extension of credit:
    (i) Is supported only by the income or independent means of the 
spouse or minor child;
    (ii) Is obtained on terms and conditions no more favorable than 
those offered to the general public; and
    (iii) The covered OCC employee does not participate in the 
negotiation for the loan or serve as co-maker, endorser, or guarantor of 
the loan.
    (3) Covered OCC employee. For purposes of the prohibitions on 
borrowing contained in paragraphs (b)(1) and (b)(2) of this section, 
``covered OCC employee'' means:
    (i) An OCC bank examiner; and
    (ii) Any other OCC employee specified in an OCC instruction or 
manual issuance whose duties and responsibilities, as determined by the 
Comptroller of the Currency or his or her designee, require application 
of the prohibition on borrowing contained in this section to ensure 
public confidence that the OCC's programs are conducted impartially and 
objectively.
    (4) Exceptions--(i) Non-examiners. A covered OCC employee, other 
than an examiner, or the spouse or minor child of such a covered OCC 
employee, may seek or obtain a credit card from a national bank if the 
credit card is sought or obtained on terms and conditions no more 
favorable than those offered to the general public.
    (ii) Examiners. (A) An examiner, or the spouse or minor child of an 
examiner to whom the prohibition in paragraph (b)(1) of this section 
applies, may seek or obtain a credit card from a national bank the 
examiner is not assigned to examine so long as the credit

[[Page 671]]

card is obtained on terms and conditions no more favorable than those 
offered to the general public and the examiner submits to the Chief 
Counsel or designee a written disqualification from the examination of 
that bank. Such a recusal would not prevent an examiner from 
participating in other bank supervision matters outside the scope of an 
examination, such as licensing or supervisory policy decisions.
    (B) For purposes of this section, examiners are assigned to examine 
a bank if they work:
    (1) In a district, and the bank is one they examine or that is 
assigned to their Assistant Deputy Comptroller or rating official; or
    (2) In Large Bank Supervision or Washington, D.C. Headquarters, and 
the bank is one to which they are regularly or otherwise assigned.
    (5) Pre-existing credit. This section does not prohibit a covered 
OCC employee, or spouse or minor child of a covered OCC employee, from 
retaining a loan from a national bank on its original terms if the loan 
was incurred prior to employment by the OCC or as a result of the sale 
or transfer of a loan to a national bank or the conversion or merger of 
the lender into a national bank. Any renewal or renegotiation of a pre-
existing loan or extension of credit will be treated as a new loan 
subject to the prohibitions in paragraphs (b)(1) and (b)(2) of this 
section.
    (c) Restrictions arising from third party relationships. If any of 
the entities listed in paragraphs (c)(1) through (c)(7) of this section 
have securities that an OCC employee would be prohibited from having by 
paragraph (a) of this section, or loans or extensions of credit that a 
covered OCC employee would be prohibited from obtaining under paragraph 
(b) of this section, the employee shall promptly report such interests 
to the Chief Counsel or designee. The Chief Counsel or designee may 
require the employee to terminate the third party relationship, 
undertake an appropriate disqualification, or take other appropriate 
action necessary, under the particular circumstances, to avoid a 
statutory violation or a violation of part 2635 of this title, or this 
part, including an appearance of misuse of position or loss of 
impartiality. This paragraph applies to any:
    (1) Partnership in which the employee, or spouse or minor child of 
the employee, is a general partner;
    (2) Partnership in which the employee, or spouse or minor child of 
the employee, individually or jointly holds more than a 10 percent 
limited partnership interest;
    (3) Closely held corporation in which the employee, or spouse or 
minor child of the employee, individually or jointly holds more than a 
10 percent equity interest;
    (4) Trust in which the employee, or spouse or minor child of the 
employee, has a legal or beneficial interest;
    (5) Investment club or similar informal investment arrangement 
between the employee, or spouse or minor child of the employee, and 
others;
    (6) Qualified profit sharing, retirement or similar plan in which 
the employee, or spouse or minor child of the employee, has an interest; 
or
    (7) Other entity if the employee, or spouse or minor child of the 
employee, individually or jointly holds more than a 25 percent equity 
interest.
    (d) Prohibited recommendations. Employees of the OCC shall not make 
recommendations or suggestions, directly or indirectly, concerning the 
acquisition or sale or other divestiture of securities of any commercial 
bank or commercial bank affiliate, including a bank holding company.
    (e) Prohibited purchase of assets. No employee of the OCC, or spouse 
or minor child of an OCC employee, shall purchase, directly or 
indirectly, an asset (e.g., real property, automobiles, furniture, or 
similar items) from a national bank or national bank affiliate, 
including a bank holding company, unless it is sold at a public auction 
or by other means which assure that the selling price is the asset's 
fair market value.
    (f) Outside employment--(1) Prohibition on outside employment. No 
covered OCC employee shall perform services for compensation for any 
bank, banking or loan association, or national bank affiliate, or for 
any officer, director or employee of, or for any person connected in any 
capacity with a bank,

[[Page 672]]

banking or loan association or national bank affiliate.
    (2) Covered OCC employee. For purposes of the prohibitions on 
outside employment contained in paragraph (f)(1) of this section, 
``covered OCC employee'' means:
    (i) An OCC bank examiner; and
    (ii) Any other OCC employee specified in an OCC instruction or 
manual issuance whose duties and responsibilities, as determined by the 
Comptroller of the Currency or his or her designee, require application 
of the prohibition on outside employment contained in this section to 
ensure public confidence that the OCC's programs are conducted 
impartially and objectively.
    (g) Waivers. An agency designee may grant a written waiver from any 
provision of this section based on a determination made with the advice 
and legal clearance of the DAEO or Office of the Chief Counsel that the 
waiver is not inconsistent with part 2635 of this title or otherwise 
prohibited by law and that, under the particular circumstances, 
application of the prohibition is not necessary to avoid the appearance 
of misuse of position or loss of impartiality or otherwise to ensure 
confidence in the impartiality and objectivity with which agency 
programs are administered. A waiver under this paragraph may impose 
appropriate conditions, such as requiring execution of a written 
disqualification.

[60 FR 22251, May 5, 1995, as amended at 67 FR 46841, July 17, 2002]



Sec. 3101.109  Additional rules for Office of Thrift Supervision employees.

    The following rules apply to the employees of the Office of Thrift 
Supervision and are in addition to Sec. Sec. 3101.101 through 3101.104:
    (a) Covered OTS employee. For purposes of this section, the term 
``covered OTS employee'' means:
    (1) An OTS examiner;
    (2) An employee in a position at OTS grade 17 or above; and
    (3) Any other OTS employee specified in an OTS instruction or manual 
issuance whose duties and responsibilities, as determined by the 
Director of the OTS or his or her designee, require application of the 
prohibitions contained in this section to ensure public confidence that 
the OTS's programs are conducted impartially and objectively.
    (b) Prohibited financial interests--(1) Prohibition. Except as 
provided in paragraphs (b)(3) and (g) of this section, no covered OTS 
employee, or spouse or minor child of a covered OTS employee, shall own, 
directly or indirectly, securities of any OTS-regulated savings 
association or savings association holding company.
    (2) Definition of ``securities''. For purposes of paragraphs (b)(1) 
and (b)(3) of this section, the term ``securities'' includes all 
interests in debt or equity instruments. The term includes, without 
limitation, secured and unsecured bonds, debentures, notes, securitized 
assets and commercial paper, as well as all types of preferred and 
common stock. The term encompasses both current and contingent ownership 
interests, including any beneficial or legal interest derived from a 
trust. It extends to any right to acquire or dispose of any long or 
short position in such securities and includes, without limitation, 
interests convertible into such securities, as well as options, rights, 
warrants, puts, calls, and straddles with respect thereto.
    (3) Exceptions. Nothing in this section prohibits a covered OTS 
employee, or spouse or minor child of a covered OTS employee, from:
    (i) Investing in a publicly traded or publicly available mutual fund 
or other collective investment fund or in a widely held pension or 
similar fund provided that the fund does not invest more than 25 percent 
of its assets in securities of one or more OTS-regulated savings 
associations or savings association holding companies and the employee 
neither exercises control over nor has the ability to exercise control 
over the financial interests held in the fund;
    (ii) Investing in certain non-financial holding companies whose 
principal business is unrelated to the financial services industry and 
which are identified as such on a list maintained by the Chief Counsel 
of the OTS;
    (iii) Using a savings association as custodian or trustee of 
accounts containing tax-deferred retirement funds; or

[[Page 673]]

    (iv) Owning any security pursuant to a waiver granted under 
paragraph (g) of this section.
    (c) Prohibited borrowing--(1) Prohibition on employee borrowing. 
Except as provided in this section, no covered OTS employee shall seek 
or obtain any loan or extension of credit from any OTS-regulated savings 
association or from an officer, director, employee, or subsidiary of any 
such association.
    (2) Prohibition on borrowing by a spouse or minor child. The 
prohibition in paragraph (c)(1) of this section shall apply to the 
spouse or minor child of a covered OTS employee unless the loan or 
extension of credit:
    (i) Is supported only by the income or independent means of the 
spouse or minor child;
    (ii) Is obtained on terms and conditions no more favorable than 
those offered to the general public; and
    (iii) The covered OTS employee does not participate in the 
negotiation for the loan or serve as co-maker, endorser, or guarantor of 
the loan.
    (3) Exceptions--(i) Covered employees other than examiners. Except 
for examiners, a covered OTS employee, or the spouse or minor child of a 
covered OTS employee, may obtain a credit card from an OTS-regulated 
savings association or its subsidiary if the credit card is issued and 
held on terms and conditions no more favorable than those offered the 
general public.
    (ii) Examiners. An examiner, or the spouse or minor child of an 
examiner, may obtain or hold a credit card issued by an OTS-regulated 
savings association or its subsidiary, if:
    (A) The savings association is not headquartered in the examiner's 
region;
    (B) The examiner is not assigned to examine the savings association;
    (C) The terms and conditions are no more favorable than those 
offered to the general public; and
    (D) The examiner submits a written disqualification from examining 
that savings association. The examiner nonetheless may participate in 
other supervisory or regulatory matters involving the savings 
association.
    (4) Pre-existing credit. This section does not prohibit a covered 
OTS employee, or spouse or minor child of a covered OTS employee, from 
retaining a loan from an OTS-regulated savings association on its 
original terms if the loan was incurred prior to April 30, 1991, or 
employment by the OTS, whichever date is later, or as a result of the 
sale or transfer of the loan to a savings association or the conversion 
or merger of the lender into an OTS-regulated savings association. Any 
renewal or renegotiation of a pre-existing loan or extension of credit 
is covered by paragraphs (c)(1) and (c)(2) of this section.
    (d) Restrictions arising from third party relationships. If any of 
the entities listed in paragraphs (d)(1) through (d)(7) of this section 
have securities that a covered OTS employee would be prohibited from 
having by paragraph (b) of this section, or loans or extensions of 
credit that a covered OTS employee would be prohibited from obtaining 
under paragraph (c) of this section, the employee shall promptly report 
such interests to the Chief Counsel or designee. The Chief Counsel or 
designee may require the employee to terminate the third party 
relationship, undertake an appropriate disqualification, or take other 
appropriate action necessary, under the particular circumstances, to 
avoid a statutory violation or a violation of part 2635 of this title or 
this part, including an appearance of misuse of position or loss of 
impartiality. This paragraph (d) applies to any:
    (1) Partnership in which the employee, or spouse or minor child of 
the employee, is a general partner;
    (2) Partnership in which the employee, or spouse or minor child of 
the employee, individually or jointly holds more than a 10 percent 
limited partnership interest;
    (3) Closely held corporation in which the employee, or spouse or 
minor child of the employee, individually or jointly holds more than a 
10 percent equity interest;
    (4) Trust in which the employee, or spouse or minor child of the 
employee, has a legal or beneficial interest;
    (5) Investment club or similar informal investment arrangement 
between the employee, or spouse or minor child of the employee, and 
others;

[[Page 674]]

    (6) Qualified profit sharing, retirement or similar plan in which 
the employee, or spouse or minor child of the employee, has an interest; 
or
    (7) Other entity if the employee, or spouse or minor child of the 
employee, individually or jointly holds more than a 25 percent equity 
interest.
    (e) Prohibited recommendations. Employees of the OTS shall not make 
recommendations or suggestions, directly or indirectly, concerning the 
acquisition or sale, or other divestiture of securities of any OTS-
regulated savings association or savings association holding company.
    (f) Prohibited purchase of assets. No covered OTS employee, or 
spouse or minor child of a covered OTS employee, shall purchase, 
directly or indirectly, an asset (e.g., real property, automobiles, 
furniture, or similar items) from a savings association or savings 
association affiliate, including a savings association holding company, 
unless it is sold at a public auction or by other means which assure 
that the selling price is the asset's fair market value.
    (g) Waivers. An agency designee may grant a written waiver from any 
provision of this section based on a determination made with the advice 
and legal clearance of the DAEO or Office of the Chief Counsel that the 
waiver is not inconsistent with part 2635 of this title or otherwise 
prohibited by law and that, under the particular circumstances, 
application of the prohibition is not necessary to avoid the appearance 
of misuse of position or loss of impartiality, or otherwise to ensure 
confidence in the impartiality and objectivity with which agency 
programs are administered. A waiver under this paragraph may impose 
appropriate conditions, such as requiring execution of a written 
disqualification.

[60 FR 22251, May 5, 1995, as amended at 66 FR 8506, Feb. 1, 2001]



Sec. 3101.110  Additional rules for United States Customs Service employees.

    The following rules apply to the employees of the United States 
Customs Service and are in addition to Sec. Sec. 3101.101 through 
3101.104:
    (a) Prohibition on outside employment. No employee of the USCS shall 
work for a customs broker, international carrier, bonded warehouse, 
foreign trade zone, cartman, law firm engaged in the practice of customs 
law or importation department of a business, nor be employed in any 
private capacity related to the importation or exportation of 
merchandise.
    (b) Restrictions arising from employment of relatives. If the spouse 
of a USCS employee, or other relative who is dependent on or resides 
with a USCS employee, is employed in a position that the employee would 
be prohibited from occupying by paragraph (a) of this section, the 
employee shall file a report of family member employment with his or her 
supervisor. Supervisors shall forward such reports to the appropriate 
Regional Counsel for transmittal to the Chief Counsel. The employee 
shall be disqualified from participation in any matter involving the 
relative or the relative's employer unless an agency designee, with the 
advice and legal clearance of the DAEO or Office of the Chief Counsel, 
authorizes the employee to participate in the matter using the standard 
in Sec. 2635.502(d) of this title.



Sec. 3101.111  Additional rules for United States Secret Service employees. 

[Reserved]

[[Page 675]]



           CHAPTER XXII--FEDERAL DEPOSIT INSURANCE CORPORATION




  --------------------------------------------------------------------
Part                                                                Page
3201            Supplemental standards of ethical conduct 
                    for employees of the Federal Deposit 
                    Insurance Corporation...................         677

[[Page 677]]



PART 3201_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

FEDERAL DEPOSIT INSURANCE CORPORATION--Table of Contents




Sec.
3201.101 General.
3201.102 Extensions of credit from FDIC-insured depository institutions.
3201.103 Prohibitions on ownership of securities of FDIC-insured 
          depository institutions.
3201.104 Restrictions concerning the purchase of property held by the 
          Corporation or the RTC as conservator, receiver, or liquidator 
          of the assets of an insured depository institution, or by a 
          bridge bank organized by the Corporation.
3201.105 Prohibition on dealings with former employers, associates, and 
          clients.
3201.106 Employment of family members outside the Corporation.
3201.107 Outside employment and other activities.
3201.108 Related statutory and regulatory authorities.
3201.109 Provisions of 5 CFR part 2635 not applicable to Corporation 
          employees.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 12 U.S.C. 1819(a), 1822; 26 U.S.C. 1043; E.O. 12674, 54 FR 15159, 
3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 
CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.403, 2635.502, and 
2635.803.

    Source: 60 FR 20174, Apr. 25, 1995, unless otherwise noted.



Sec. 3201.101  General.

    (a) Purpose. The regulations in this part apply to employees of the 
Federal Deposit Insurance Corporation (Corporation) and supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635. Where specified, these regulations also 
apply to the Comptroller of the Currency and the Director of the Office 
of Thrift Supervision in connection with their activities as members of 
the Corporation's Board of Directors.
    (b) Corporation ethics officials. The Executive Secretary of the 
Corporation shall act as the Corporation's Ethics Counselor and as its 
Designated Agency Ethics Official under 5 CFR part 2638. The Ethics 
Program Manager shall act as the Corporation's Alternate Ethics 
Counselor and as the Alternate Agency Ethics Official.
    (1) The Ethics Counselor or Alternate Ethics Counselor may delegate 
authority to one or more employees to serve as Deputy Ethics Counselors.
    (2) The delegation to a Deputy Ethics Counselor shall be in writing 
and cannot be redelegated.
    (c) Agency designees. The Ethics Counselor and Alternate Ethics 
Counselor shall serve as the agency designees for purposes of making the 
determinations, granting the approvals, and taking other actions 
required by an agency designee under part 2635 and this part. The Ethics 
Counselor or Alternate Ethics Counselor may delegate authority to Deputy 
Ethics Counselors or to other employees to serve as agency designees for 
specified purposes. The delegation to any agency designee shall be in 
writing and cannot be redelegated.
    (d) Definitions. For purposes of this part:
    (1) Affiliate, as defined in 12 U.S.C. 1841(k), means any company 
that controls, is controlled by, or is under common control with another 
company.
    (2) Appropriate director means the head of a Washington office or 
division or the highest ranking official assigned to a regional office 
in each division or the Ethics Counselor.
    (3)(i) Assisted entity means:
    (A) Any FDIC-insured depository institution which has received 
financial assistance from the FDIC to prevent its failure;
    (B) Any FDIC-insured depository institution resulting from a merger 
or consolidation with any institution described in paragraph (d)(3)(i) 
of this section; and
    (C) Any holding company of an FDIC-insured depository institution 
described in paragraphs (d)(3)(i) or (d)(3)(ii) of this section.
    (ii) An assisted entity retains its status as an assisted entity for 
such time as there is an ongoing financial relationship with the FDIC 
including, but not limited to, a loan repayment obligation, the 
servicing of assets on behalf of the FDIC, or the retention by the FDIC 
of stock or stock warrants in the assisted entity.
    (4)(i) Assuming entity means:

[[Page 678]]

    (A) Any FDIC-insured depository institution or FDIC-insured 
depository institution holding company which has entered into a 
transaction with the FDIC to purchase some or all of the assets and 
assume some or all of the liabilities of a failed FDIC-insured 
depository institution;
    (B) Any FDIC-insured depository institution resulting from the 
transaction described in paragraph (d)(4)(i) of this section and its 
wholly owned subsidiaries; and
    (C) Any branches and the wholly owned subsidiaries of the 
institutions described in paragraph (d)(4)(i) of this section.
    (ii) An assuming entity retains its status as an assuming entity for 
a period of one year after the failure of the FDIC-insured depository 
institution.
    (5) Covered employee means an employee of the Corporation required 
to file a public or confidential financial disclosure report under 5 CFR 
part 2634 or 5 CFR part 3202.
    (6) Employee means an officer or employee, other than a special 
Government employee, of the Corporation including a member of the Board 
of Directors appointed under the authority of 12 U.S.C. 1812(a)(1)(C), 
and a liquidation graded employee. For purposes of 5 CFR part 2635 and 
Sec. Sec. 3201.103 and 3201.104, employee includes any individual who, 
pursuant to a contract or any other arrangement, performs functions or 
activities of the Corporation, under the direct supervision of an 
officer or employee of the Corporation.
    (7) Security includes an interest in debt or equity instruments. The 
term includes, without limitation, a secured or unsecured bond, 
debenture, note, securitized assets, commercial paper, and all types of 
preferred and common stock. The term includes an interest or right in a 
security, whether current or contingent, a beneficial or legal interest 
derived from a trust, the right to acquire or dispose of any long or 
short position, an interest convertible into a security, and an option, 
right, warrant, put, or call with respect to a security. The term 
security does not include a deposit account.
    (8) State nonmember bank means any State bank as defined in 12 
U.S.C. 1813(e) which is not a member of the Federal Reserve System.
    (9) Subsidiary, as defined in 12 U.S.C. 1813(w), means any company 
which is owned or controlled directly or indirectly by another company.

[60 FR 20174, Apr. 25, 1995, as amended at 67 FR 71070, Nov. 29, 2002]



Sec. 3201.102  Extensions of credit from FDIC-insured depository institutions.

    (a) Credit subject to this section. The prohibition, 
disqualification, and retention provisions of this section apply to a 
current or contingent financial obligation of the employee. For purposes 
of this section, a current or contingent financial obligation of an 
employee's spouse or minor child is considered to be an obligation of 
the employee.
    (b) Prohibition on acceptance of credit from FDIC-insured State 
nonmember banks applicable to certain high-level officials. (1) An 
employee described in paragraph (b)(2) of this section shall not, 
directly or indirectly, accept or become obligated on an extension of 
credit from an FDIC-insured State nonmember bank or its subsidiary, 
except credit extended through the use of a credit card under the same 
terms and conditions as are offered to the general public.
    (2) The prohibition in paragraph (b)(1) of this section applies to:
    (i) An employee who is a member of the Board of Directors, an 
assistant or deputy to the Board of Directors or to an appointed Board 
member, and a covered employee who is an assistant to such person; and
    (ii) The director of a Washington office or of a division, other 
than the Division of Supervision and Consumer Protection, and a covered 
employee who holds a position immediately subordinate to such director.
    (c) Prohibition on acceptance of credit from FDIC-insured State 
nonmember banks for employees assigned to the Division of Supervision 
and Consumer Protection. (1) An employee described in paragraph (c)(2) 
of this section shall not, directly or indirectly, accept or become 
obligated on an extension of credit

[[Page 679]]

from an FDIC-insured State nonmember bank or from an officer, director, 
employee, or subsidiary of such bank, except:
    (i) For an employee assigned to the Washington office, credit 
extended through the use of a credit card on the same terms and 
conditions as are offered to the general public;
    (ii) For an employee assigned to a regional or area office, credit 
extended by an FDIC-insured State nonmember bank headquartered outside 
the employee's region or area of official assignment through the use of 
a credit card on the same terms and conditions as are offered to the 
general public;
    (iii) For an employee assigned to a field office, credit extended by 
an FDIC-insured State nonmember bank headquartered outside the 
employee's field office of official assignment through the use of a 
credit card on the same terms and conditions as are offered to the 
general public; and
    (iv) For a field office supervisor and supervisory examiner, credit 
extended by an FDIC-insured State nonmember bank headquartered outside 
the field office supervisor's and supervisory examiner's respective 
official territories of assignment through the use of a credit card on 
the same terms and conditions as are offered to the general public.
    (2) The prohibition in paragraph (c)(1) of this section applies to 
the Director of the Division of Supervision and Consumer Protection, a 
covered employee immediately subordinate to the Director of the Division 
of Supervision and Consumer Protection, and the following employees 
assigned to the Division of Supervision and Consumer Protection: an 
Assistant Director, Regional Director, Deputy Regional Director, 
Assistant Regional Director, examiner, assistant examiner, review 
examiner, compliance examiner, assistant compliance examiner, and a 
covered employee.
    (3) Upon accepting credit extended by a credit card in accordance 
with paragraph (c)(1)(i), (c)(1)(ii), or (c)(1)(iii) of this section, 
the employee shall be disqualified in accordance with paragraph (f)(1) 
of this section, and, within 30 days of accepting such credit, shall 
file with the appropriate director a Statement of Credit Card Obligation 
in Insured State Nonmember Bank and Acknowledgement of Conditions for 
Retention--Notice of Disqualification.
    (d) Two-year prohibition on acceptance of credit from FDIC-insured 
depository institutions. (1) An employee described in paragraph (d)(2) 
of this section shall not, directly or indirectly, accept or become 
obligated on an extension of credit from an FDIC-insured depository 
institution or its subsidiary for a period of two years from the date of 
the employee's last personal and substantial participation in an audit, 
resolution, liquidation, supervisory proceeding, or internal agency 
deliberation affecting that particular institution, its predecessor or 
successor, or any subsidiary of such institution. This prohibition does 
not apply to credit obtained through the use of a credit card under the 
same terms and conditions as are offered to the general public.
    (2) The prohibition in paragraph (d)(1) of this section applies to 
an employee in the Division of Finance, Division of Resolutions and 
Receiverships, Division of Insurance and Research, Legal Division, or 
who is a member of a standing committee of the Board of Directors whose 
official duties include:
    (i) Audit of insured depository institutions for deposit insurance 
assessment purposes;
    (ii) Resolution or liquidation of failed or failing insured 
depository institutions;
    (iii) Participation in the supervision of insured depository 
institutions or enforcement proceedings under the Federal Deposit 
Insurance Act; or
    (iv) Internal agency deliberations affecting a particular insured 
depository institution, its predecessor or successor, or a subsidiary of 
such institution.
    (e) Prohibition on acceptance of credit from an assisted or assuming 
entity for employees of the Division of Resolutions and Receiverships. 
(1) An employee described in paragraph (e)(2) of this section shall not, 
directly or indirectly, accept or become obligated on any extension of 
credit from an assisted or assuming entity located in the employee's 
region of official assignment. This prohibition does not apply to credit 
obtained through the use of a credit card

[[Page 680]]

under the same terms and conditions as are offered to the general 
public.
    (2) The prohibition in paragraph (e)(1) of this section applies to a 
regional director, deputy regional director, and any other covered 
employee in the Division of Resolutions and Receiverships assigned to a 
service center or other field office.
    (f) Employee disqualification. (1) An employee described in 
paragraph (c)(2) of this section shall not participate in an 
examination, audit, visitation, review, or investigation, or other 
particular matter involving an FDIC-insured depository institution or 
other person with whom the employee has an outstanding extension of 
credit.
    (2) A covered employee, other than an employee who is described in 
paragraph (c)(2) of this section, shall not participate in any 
particular matter involving an FDIC-insured depository institution or 
other person with whom the employee has an outstanding extension of 
credit.
    (3) Disqualification is not required under paragraph (f)(2) of this 
section:
    (i) If the credit was extended through the use of a credit card on 
the same terms and conditions as are offered to the general public; or
    (ii) When the agency designee, with the concurrence of the 
appropriate director, has authorized the employee to participate in the 
matter using the standard set forth in 5 CFR 2635.502(d).
    (4) The Comptroller of the Currency and the Director of the Office 
of Thrift Supervision shall be disqualified from matters pending before 
the Board of Directors to the same extent as a covered employee subject 
to paragraph (f)(2) of this section.
    (g) Retention and renegotiation of pre-existing extensions of 
credit. (1) Nothing in this section prohibits the retention of a pre-
existing extension of credit that an employee would be prohibited from 
accepting by Sec. 3201.102(b) or (c) if the extension of credit was 
permitted to be retained under 12 CFR part 336 prior to the adoption of 
this regulation or if the employee's acceptance of the extension of 
credit was proper at the time the obligation was incurred, as in the 
case of an extension of credit incurred prior to commencement of 
employment or reassignment to another division or location. Subsequent 
action affecting the status of the creditor, such as merger, 
acquisition, or transaction under 12 U.S.C. 1823, does not change the 
character of an extension of credit that was proper when incurred. An 
employee who retains a pre-existing extension that he or she would be 
prohibited from accepting by Sec. 3201.102(b) or (c) shall report the 
pre-existing extension of credit to the appropriate director or agency 
designee within 30 days from the following event, as appropriate:
    (i) Adoption of this part;
    (ii) Commencement of employment;
    (iii) Assignment to another division or location; or
    (iv) Action affecting the status of the creditor.
    (2) Any renegotiation of a pre-existing extension of credit shall be 
treated as a new extension of credit that is subject to the prohibitions 
contained in Sec. 3201.102(b) through (d). An employee may request that 
an exception be made to the prohibitions to permit renegotiation of a 
pre-existing extension of credit. Any such request shall be made in 
writing to the appropriate director and agency designee, or in the case 
of an employee described in paragraph (b)(2)(i) and (ii) of this 
section, to the Ethics Counselor, stating:
    (i) The purpose of the renegotiation;
    (ii) The terms and conditions of the original extension of credit;
    (iii) The terms and conditions now available to the general public;
    (iv) The terms and conditions now offered to the employee;
    (v) The action the employee has taken to move the loan to an 
institution from which an employee would not be prohibited from 
accepting an extension of credit; and
    (vi) The financial hardship, if any, denial of the request will 
cause.
    (3) After submission of the request, the appropriate director and 
agency designee, or the Ethics Counselor, may grant the employee's 
request based upon a written determination that the request is not 
inconsistent with 5 CFR part 2635 or otherwise prohibited by law and 
that, under the particular circumstances, application of the prohibition 
is not necessary to avoid the appearance of the misuse of position or

[[Page 681]]

loss of impartiality, or otherwise to ensure confidence in the 
impartiality and objectivity with which agency programs are 
administered.

[60 FR 20174, Apr. 25, 1995, as amended at 62 FR 3772, Jan. 27, 1997; 67 
FR 71070, Nov. 29, 2002]



Sec. 3201.103  Prohibitions on ownership of securities of FDIC-insured 

depository institutions.

    (a) Prohibition on ownership. Except as permitted by this section, 
an employee or the spouse or minor child of an employee, shall not 
acquire, own, or control, directly or indirectly, a security of an FDIC-
insured depository institution, or an affiliate of an FDIC-insured 
depository institution.
    (b) Exception to prohibition for certain interests. Nothing in this 
section prohibits an employee, or the spouse or minor child of an 
employee, from:
    (1) Acquiring, owning or controlling the securities of certain 
publicly traded bank holding companies or their nonbank subsidiaries 
where the bank holding company is not primarily engaged in banking and 
either the bank holding company or the bank it holds is exempt under the 
provisions of the Bank Holding Company Act of 1956 and which are 
identified as such by the Board of Governors of the Federal Reserve 
System (a list of exempt institutions can be obtained from the 
Corporation's Ethics Section);
    (2) Acquiring, owning, or controlling the securities of certain 
nonfinancial savings association holding companies whose principal 
business is unrelated to the financial services industry and which are 
identified as such by the Office of Thrift Supervision pursuant to 5 CFR 
3101.109(b)(3)(ii) (a list of such institutions can be obtained from the 
Corporation's Ethics Section);
    (3) Retaining a security of an FDIC-insured depository institution 
or an affiliate of an FDIC-insured depository institution if the 
security was permitted to be retained by the employee under 12 CFR part 
336 prior to the adoption of this regulation, was obtained prior to 
commencement of employment with the Corporation, or was acquired by a 
spouse prior to marriage to the employee;
    (4) Acquiring, owning, or controlling a security of an FDIC-insured 
depository institution or the affiliate of an FDIC-insured depository 
institution where the security was acquired by inheritance, gift, stock 
split, involuntary stock dividend, merger, acquisition, or other change 
in corporate ownership, exercise of preemptive right, or otherwise 
without specific intent to acquire the security, or, by an employee's 
spouse or minor child as part of a compensation package in connection 
with his or her employment. This provision permits the retention of any 
such interest only where:
    (i) The employee makes full, written disclosure on FDIC form 2410/07 
to the Ethics Counselor within 30 days of commencing employment or 
acquiring the interest; and
    (ii) The employee is disqualified in accordance with 5 CFR part 
2635, subpart D, from participating in any particular matter that 
affects his or her financial interests, or that of his or her spouse or 
minor child;
    (5) Acquiring, owning, or controlling an interest in a publicly 
traded or publicly available investment fund provided that, upon initial 
or subsequent investment by the employee (excluding ordinary dividend 
reinvestment), the fund does not have invested, or indicate in its 
prospectus the intent to invest, more than 30 percent of its assets in 
the securities of one or more FDIC-insured depository institutions or 
FDIC-insured depository institution holding companies and the employee 
neither exercises control nor has the ability to exercise control over 
the financial interests held in the fund; or
    (6) Using an FDIC-insured depository institution or an affiliate of 
an FDIC-insured depository institution as custodian or trustee of 
accounts containing tax-deferred retirement funds.
    (c) Divestiture. Based upon a determination of substantial conflict 
under 5 CFR 2635.403(b), the Ethics Counselor may require an employee, 
or the spouse or minor child of an employee, to divest a security he or 
she is otherwise authorized to retain under paragraph (b) of this 
section.

[60 FR 20174, Apr. 25, 1995, as amended at 61 FR 35915, July 9, 1996]

[[Page 682]]



Sec. 3201.104  Restrictions concerning the purchase of property held by the 

Corporation or the RTC as conservator, receiver, or liquidator of the assets 

of an insured depository institution, or by a bridge bank organized 

by the Corporation.

    (a) Prohibition on purchase of property. An employee, and an 
employee's spouse or minor child shall not, directly or indirectly, 
purchase or acquire any property held or managed by the Corporation or 
the Resolution Trust Corporation (RTC) as conservator, receiver, or 
liquidator of the assets of an insured depository institution, or by a 
bridge bank organized by the Corporation, regardless of the method of 
disposition of the property.
    (b) Disqualification. An employee who is involved in the disposition 
of assets held by the Corporation or the RTC as conservator, receiver, 
or liquidator of the assets of an insured depository institution, or by 
a bridge bank organized by the Corporation shall not participate in the 
disposition of assets held in such capacities when the employee knows 
that any party with whom the employee has a covered relationship, as 
defined in 5 CFR 2635.502(b)(1), is or will be attempting to acquire 
such assets. The employee shall provide written notification of the 
disqualification to his or her immediate supervisor and the agency 
designee.



Sec. 3201.105  Prohibition on dealings with former employers, associates, and 

clients.

    (a) An employee is prohibited for one year from the date of entry on 
duty with the Corporation from participating in a particular matter when 
an employer, or the successor to the employer, for whom the employee 
worked at any time during the one year preceding the employee's entrance 
on duty is a party or represents a party to the matter.
    (b) For purposes of this section, the term employer means a person 
with whom the employee served as officer, director, trustee, general 
partner, agent, attorney, accountant, consultant, contractor, or 
employee.
    (c) The one-year prohibition imposed by paragraph (a) of this 
section, and the one-year period preceding the employee's entrance on 
duty specified in paragraph (a) of this section, may each be extended in 
an individual case based on a written determination by the agency 
designee that, under the particular circumstances, the employee's 
participation in the particular matter would cause a reasonable person 
with knowledge of the facts to question his or her impartiality.



Sec. 3201.106  Employment of family members outside the Corporation.

    (a) Disqualification of employees. An employee shall not participate 
in an examination, audit, investigation, application, contract, or other 
particular matter if the employer of the employee's spouse, child, 
parent, brother, sister, or a member of the employee's household is a 
party or represents a party to the matter, unless an agency designee 
authorizes the employee to participate using the standard in 5 CFR 
2635.502(d).
    (b) Reporting certain relationships. A covered employee shall make a 
written report to an agency designee within 30 days of the employment of 
the employee's spouse, child, parent, brother, sister, or a member of 
the employee's household by:
    (1) An FDIC-insured depository institution or its affiliate;
    (2) A firm or business with which, to the employee's knowledge, the 
Corporation has a contractual or other business or financial 
relationship; or
    (3) A firm or business which, to the employee's knowledge, is 
seeking a business or contractual relationship with the Corporation.



Sec. 3201.107  Outside employment and other activities.

    (a) Prohibition on employment with FDIC-insured depository 
institutions. An employee shall not provide service for compensation, in 
any capacity, to an FDIC-insured depository institution or an employee 
or person employed by or connected with such institution.
    (b) Use of professional licenses. A covered employee who holds a 
license related to real estate, appraisals, securities, or insurance and 
whose official duties with the Corporation require personal and 
substantial involvement in matters related to, respectively, real

[[Page 683]]

estate, appraisal, securities, or insurance is prohibited from using 
such license, other than in the performance of his or her official 
duties, for the production of income. The appropriate director, in 
consultation with an agency designee, may grant exceptions to this 
prohibition based on a finding that the specific transactions which 
require use of the license will not create an appearance of loss of 
impartiality or use of public office for private gain.
    (c) Responsibility to consult with agency designee. An employee who 
engages in, or intends to engage in, any outside employment or other 
activity that may require disqualification from the employee's official 
duties shall consult with an agency designee prior to engaging in or 
continuing to engage in the activity.



Sec. 3201.108  Related statutory and regulatory authorities.

    (a) 18 U.S.C. 213, which prohibits an examiner from accepting a loan 
or gratuity from an FDIC-insured depository institution examined by him 
or her or from any person connected with such institution.
    (b) 18 U.S.C. 1906, which prohibits disclosure of information from a 
bank examination report except as authorized by law.
    (c) 17 CFR 240.10b-5 which prohibits the use of manipulative or 
deceptive devices in connection with the purchase or sale of any 
security.
    (d) 18 U.S.C. 1909, which prohibits examiners from providing any 
service for compensation for any bank or person connected therewith.



Sec. 3201.109  Provisions of 5 CFR part 2635 not applicable to Corporation 

employees.

    The following provisions of 5 CFR part 2635 are not applicable to 
employees of the Corporation:
    (a) Because of the restrictions imposed by 18 U.S.C. 213 on 
examiners accepting loans or gratuities, an examiner in the Division of 
Supervision and Consumer Protection may not use any of the gift 
exceptions at 5 CFR 2635.204 to accept a gift from an FDIC-insured 
depository institution examined by him or her or from any person 
connected with such institution.
    (b) Provisions of 41 U.S.C. 423 (Procurement integrity) and the 
implementing regulations at 48 CFR 3.104 (of the Federal Acquisition 
Regulation) applicable to procurement officials referred to in:
    (1) 5 CFR 2635.202(c)(4)(iii);
    (2) The note following 5 CFR 2635.203(b)(7);
    (3) Example 5 following 5 CFR 2635.204(a);
    (4) Examples 2 and 3 following 5 CFR 2635.703(b)(3);
    (5) 5 CFR 2635.902(f), (h), (l), and (bb);
    (c) Provisions of 31 U.S.C. 1353 (Acceptance of travel and related 
expenses from non-Federal sources) and the implementing regulations at 
41 CFR part 304-1 (Acceptance of payment from a non-Federal source for 
travel expenses) referred to in 5 CFR 2635.203(b)(8)(i).
    (d) Provisions of 41 CFR Chapter 101 (Federal Property Management 
Regulations) referred to in 5 CFR 2635.205(a)(4).
    (e) Provisions of 41 CFR Chapter 201 (Federal Information Resources 
Management Regulation) referred to in Example 1 following 5 CFR 
2635.704(b)(2).

[60 FR 20174, Apr. 25, 1995, as amended at 67 FR 71070, Nov. 29, 2002]

[[Page 685]]



                   CHAPTER XXIII--DEPARTMENT OF ENERGY




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Part                                                                Page
3301            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Energy..................................         687

[[Page 687]]



PART 3301_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF ENERGY--Table of Contents




Sec.
3301.101 General.
3301.102 Procedure for accomplishing disqualification.
3301.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in Government 
Act); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by 
E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.402(c), 2635.502(e), 2635.604, 2635.802, 2635.803.

    Source: 61 FR 35087, July 5, 1996, unless otherwise noted.



Sec. 3301.101  General.

    (a) Purpose. The regulations in this part apply to employees of the 
Department of Energy (DOE), excluding employees of the Federal Energy 
Regulatory Commission, and supplement the Standards of Ethical Conduct 
for Employees of the Executive Branch contained in 5 CFR part 2635. DOE 
employees are also subject to the regulations on financial disclosure 
contained in 5 CFR part 2634, and to additional regulations on 
responsibilities and conduct at 5 CFR part 735, and DOE specific 
provisions contained in 10 CFR part 1010.
    (b) Definitions. Unless a term is otherwise defined in this part, 
the definitions set forth in 5 CFR part 2635 apply to terms used in this 
part. In addition, for purposes of this part:
    Agency designee, as used also in 5 CFR part 2635, means the 
employee's immediate supervisor and, for purposes of the approval 
required by Sec. 3301.103(a), includes the Counselor.
    Counselor means the DOE's designated agency ethics official or his 
delegates.



Sec. 3301.102  Procedure for accomplishing disqualification.

    (a) Disqualifying financial interests. A DOE employee who is 
required, in accordance with 5 CFR 2635.402(c), to disqualify himself 
from participation in a particular matter to which he has been assigned 
shall, notwithstanding the guidance in 5 CFR 2635.402(c)(1) and (2), 
provide written notice of disqualification to his supervisor and 
counselor upon determining that he will not participate in the matter.
    (b) Disqualification to ensure impartiality. A DOE employee who is 
required, in accordance with 5 CFR 2635.502(e), to disqualify himself 
from participation in a particular matter involving specific parties to 
which he has been assigned shall, notwithstanding the guidance in 5 CFR 
2635.502(e)(1) and (2), provide written notice of disqualification to 
his supervisor and counselor upon determining that he will not 
participate in the matter.
    (c) Disqualification from matter effecting prospective employers. A 
DOE employee who is required, in accordance with 5 CFR 2635.604(a), to 
disqualify himself from participation in a particular matter to which he 
has been assigned shall, notwithstanding the guidance in 5 CFR 
2635.604(b) and (c), provide written notice of disqualification to his 
supervisor and counselor upon determining that he will not participate 
in the matter.
    (d) Withdrawal of notification. A DOE employee may withdraw written 
notice under paragraphs (a), (b), or (c) of this section upon deciding 
that disqualification from participation in the matter is no longer 
required. A withdrawal of notification shall be in writing and provided 
to the employee's supervisor and counselor.



Sec. 3301.103  Prior approval for outside employment.

    (a) Prior approval requirement. Before engaging in any outside 
employment, whether or not for compensation, an employee, other than a 
special Government employee, must obtain written approval of his 
immediate supervisor and the Counselor. Requests for approval shall 
include the name of the person, group or organization for whom the work 
is to be performed; the type of work to be performed; and the proposed 
hours of work and approximate dates of employment.
    (b) Standard for approval. Approval shall be granted unless there is 
a determination that the outside employment is expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635.

[[Page 688]]

    (c) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes but is not limited to personal services as an 
officer, director, trustee, general partner, agent, attorney, 
consultant, contractor, employee, advisor, or teacher. It does not 
include participating in the activities of a nonprofit, charitable, 
religious, public service or civic organization, unless such activities 
involve the provision of professional services or are for compensation.

[[Page 689]]



           CHAPTER XXIV--FEDERAL ENERGY REGULATORY COMMISSION




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3401            Supplemental standards of ethical conduct 
                    for employees of the Federal Energy 
                    Regulatory Commission...................         691

[[Page 691]]



PART 3401_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

FEDERAL ENERGY REGULATORY COMMISSION--Table of Contents




Sec.
3401.101 General.
3401.102 Prohibited financial interests.
3401.103 Procedures for accomplishing disqualification.
3401.104 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 42 U.S.C. 7171, 7172; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 
306; 5 CFR 2635.105, 2635.402(c), 2635.403, 2635.502(e), 2635.604, 
2635.803.

    Source: 61 FR 43414, Aug. 23, 1996, unless otherwise noted.



Sec. 3401.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Federal Energy Regulatory Commission 
(Commission) and supplement the Standards of Ethical Conduct for 
Employees of the Executive Branch contained in 5 CFR part 2635. In 
addition to the standards in 5 CFR part 2635 and this part, employees 
are subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634, additional regulations on responsibilities 
and conduct at 5 CFR part 735, and Commission specific provisions 
contained in 18 CFR part 3c.



Sec. 3401.102  Prohibited financial interests.

    (a) General prohibition. Except as provided in paragraphs (b) and 
(c) of this section, an employee, or the spouse or minor child of an 
employee, shall not acquire or hold any securities of:
    (1) A natural gas company;
    (2) An interstate oil pipeline;
    (3) A hydroelectric licensee or exemptee;
    (4) A public utility;
    (5) Any electric utility engaged in the wholesale sale or 
transmission of electricity or having obtained an interconnection or 
wheeling order under Part II of the Federal Power Act; or
    (6) The parent company of an entity identified in paragraphs (a)(1) 
through (a)(5) of this section.
    (b) Waiver. The DAEO may grant a written waiver from this section 
based on a determination that the waiver is not inconsistent with part 
2635 of this title or otherwise prohibited by law and that, under the 
particular circumstances, application of the provision is not necessary 
to avoid the appearance of misuse of position or loss of impartiality, 
or otherwise to ensure confidence in the impartiality and objectivity 
with which Commission programs are administered. A waiver under this 
paragraph may impose appropriate conditions, such as requiring execution 
of a written disqualification.
    (c) Definitions. For purposes of this section:
    (1) The term securities includes all interests in debt or equity 
instruments. The term includes, without limitation, secured and 
unsecured bonds, debentures, notes, securitized assets, and commercial 
paper, as well as all types of preferred and common stock. The term 
encompasses both current and contingent ownership interests, including 
any beneficial or legal interest derived from a trust. It extends to any 
right to acquire any long or short position in such securities and 
includes, without limitation, interests convertible into such 
securities, as well as options, rights, warrants, puts, calls and 
straddles with respect thereto. It does not include an interest in a 
publicly traded or publicly available mutual fund or other collective 
investment fund, or in a widely held pension or similar fund, provided 
that the fund's prospectus does not indicate the objective or practice 
of concentrating its investments in entities identified in paragraphs 
(a)(1) through (a)(6) of this section, and the employee neither 
exercises control nor has the ability to exercise control over the 
financial interests held in the fund.
    (2) The term parent means a company that possesses, directly or 
indirectly, the power to direct or cause the direction of the management 
and policies of an entity identified in paragraphs (a)(1) through (a)(5) 
of this section.

[[Page 692]]



Sec. 3401.103  Procedures for accomplishing disqualification.

    (a) An employee, other than a member of the Commission, who is 
required, in accordance with 5 CFR 2635.402(c), 2635.502(e), or 
2635.604(a), to disqualify himself from participation in a particular 
matter before the Commission shall provide written notice of 
disqualification to his supervisor and to the DAEO when he becomes aware 
of the need to disqualify himself from participation in the matter. This 
procedure is required notwithstanding the guidance in 5 CFR 
2635.402(c)(2), 2635.502(e)(2), and 2635.604(c).
    (b) An employee may withdraw written notice under paragraph (a) of 
this section upon determining that disqualification from participation 
in the matter is no longer required. A withdrawal of disqualification 
shall be in writing and shall be provided to the employee's supervisor 
and to the DAEO.



Sec. 3401.104  Prior approval for outside employment.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, must obtain written approval from the DAEO through 
normal supervisory channels before engaging in outside employment with 
any person who is a ``prohibited source'' as that term is defined at 5 
CFR 2635.203(d).
    (b) Approval of requests. Approval under this section shall be 
denied only upon a determination by the DAEO that the outside activity 
is expected to involve conduct prohibited by statute or Federal 
regulations, including 5 CFR part 2635.
    (c) Definitions. For purposes of this section, ``employment'' means 
any form of non-Federal employment or business relationship or activity 
involving the provision of personal services by the employee for 
compensation other than reimbursement of actual and necessary expenses. 
It includes, but is not limited to, personal services as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, or trustee.

[[Page 693]]



                 CHAPTER XXV--DEPARTMENT OF THE INTERIOR




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3501            Supplemental standards of ethical conduct 
                    for employees of the Department of the 
                    Interior................................         695

[[Page 695]]



PART 3501_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF THE INTERIOR--Table of Contents




Sec.
3501.101 General.
3501.102 Designation of separate agency components.
3501.103 Prohibited interests in Federal lands.
3501.104 Prohibited interests in mining.
3501.105 Outside employment and activities.

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); 30 U.S.C. 1211; 43 U.S.C. 11, 31(a); E.O. 12674, 3 CFR, 
1989 Comp., p. 215, as modified by E.O. 12731, 3 CFR, 1990 Comp., p. 
306; 5 CFR 2635.105, 2635.203(a), 2635.403(a), 2635.803.

    Source: 62 FR 53718, Oct. 16, 1997, unless otherwise noted.



Sec. 3501.101  General.

    (a) In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of the Interior and supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635. In addition to the regulations in 5 CFR 
part 2635 and this part, employees of the Department are subject to the 
employee responsibilities and conduct regulations at 5 CFR part 735; the 
executive branch financial disclosure regulations at 5 CFR part 2634; 
and the Department's employee responsibilities and conduct regulations 
at 43 CFR part 20.
    (b) Definitions. As used in this part:
    (1) Department means the U.S. Department of the Interior and any of 
its components.
    (2) Bureau means each major program operating component of the 
Department, the Office of the Secretary, the Office of the Solicitor, 
and the Office of the Inspector General.
    (3) Ethics Counselor means the head of each bureau, except that the 
Deputy Assistant Secretary for Policy is the Ethics Counselor for 
employees within the Office of the Secretary.
    (4) Deputy Ethics Counselor means the bureau personnel officer or 
other qualified headquarters employee who has been delegated 
responsibility for the operational duties of the Ethics Counselor for 
the bureau.
    (c) Bureau instructions. With the concurrence of the Designated 
Agency Ethics Official, each Ethics Counselor is authorized, consistent 
with 5 CFR 2635.105(c), to issue explanatory guidance and establish 
procedures necessary to implement this part and part 2635 of this title 
for his or her bureau.

[62 FR 53718, Oct. 16, 1997, as amended at 63 FR 34259, June 24, 1998]



Sec. 3501.102  Designation of separate agency components.

    (a) Each of the following ten components of the Department is 
designated as an agency separate from each of the other nine listed 
components and, for employees of that component, as an agency distinct 
from the remainder of the Department, for purposes of the regulations in 
subpart B of 5 CFR 2635 governing gifts from outside sources, 5 CFR 
2635.807 governing teaching, speaking and writing, and Sec. 3501.105 
requiring prior approval of outside employment. However, the following 
ten components are not deemed to be separate agencies for purposes of 
applying any provision of 5 CFR part 2635 or this part to employees of 
the remainder of the Department:
    (1) Bureau of Indian Affairs, including the Office of Indian 
Education Programs;
    (2) Bureau of Land Management;
    (3) Bureau of Reclamation;
    (4) Minerals Management Service;
    (5) National Indian Gaming Commission;
    (6) National Park Service;
    (7) Office of Surface Mining Reclamation and Enforcement;
    (8) Office of the Special Trustee for American Indians;
    (9) U.S. Fish and Wildlife Service; and
    (10) U.S. Geological Survey.
    (b) Employees in components not listed in paragraph (a) of this 
section (including employees within the immediate office of each 
Assistant Secretary) are employees of the remainder of the Department, 
which for those employees shall include the components designated in 
this section as well as those parts of the Department not designated in 
this section.

    Example 1: A company that conducts activities regulated by the 
Bureau of Land

[[Page 696]]

Management would not be a prohibited source of gifts for an employee of 
the National Park Service (NPS), unless that company seeks official 
action by the NPS; does business or seeks to do business with the NPS; 
conducts activities that are regulated by the NPS; or has interests that 
may be substantially affected by the performance or nonperformance of 
that employee's official duties.
    Example 2: A paralegal who works part-time in the Office of the 
Solicitor wants to take an additional part-time job with a private 
company that does business with the U.S. Geological Survey. The company 
is a prohibited source for the paralegal, since the company does 
business with a component of the Department from which his component has 
not been listed as separate in Sec. 3501.102(a). The paralegal must 
obtain prior approval for the outside employment, because Sec. 3501.105 
requires employees to obtain such approval before engaging in outside 
employment with a prohibited source.



Sec. 3501.103  Prohibited interests in Federal lands.

    (a) Cross-references to statutory prohibitions--(1) Prohibited 
purchases of public land by Bureau of Land Management employees. As set 
forth in 43 CFR 20.401, the officers, clerks, and employees in the 
Bureau of Land Management are prohibited by 43 U.S.C. 11 from directly 
or indirectly purchasing or becoming interested in the purchase of any 
of the public lands.
    (2) Prohibited interests in the lands or mineral wealth of the 
region under survey for U.S. Geological Survey employees. As set forth 
in 43 CFR 20.401, the Director and members of the U.S. Geological Survey 
are prohibited by 43 U.S.C. 31(a) from having any personal or private 
interests in the lands or mineral wealth of the region under survey.
    (b) Prohibited financial interests in Federal lands for Minerals 
Management Service employees and for the Secretary and employees of the 
Office of the Secretary and other Departmental offices reporting 
directly to a Secretarial officer who are in positions classified at GS-
15 and above. (1) Except as provided in paragraph (b)(2) of this 
section, the following employees may not acquire or hold any direct or 
indirect financial interest in Federal lands or resources administered 
or controlled by the Department:
    (i) All employees of the Minerals Management Service; and
    (ii) The Secretary and employees of the Office of the Secretary and 
other Departmental offices reporting directly to a Secretarial officer 
who are in positions classified at GS-15 and above. As used in this 
section, ``Office of the Secretary and other Departmental Offices 
reporting directly to a Secretarial officer'' means the Immediate Office 
of the Secretary; Office of the Solicitor; Office of the Inspector 
General; Office of Communications; Office of Congressional and 
Legislative Affairs; all Assistant Secretaries, their immediate Office 
staff and heads of bureaus which are subordinate to an Assistant 
Secretary. This includes the following offices under the Office of the 
Assistant Secretary--Policy, Management and Budget: Office of Budget, 
Office of Hearings and Appeals, Office of Acquisition & Property 
Management, Office of Environmental Policy and Compliance, Office of 
Policy Analysis, Office of Financial Management, and Office of 
Information Resources Management.
    (2) Exceptions. The prohibition in paragraph (b)(1) of this section 
does not apply to:
    (i) An individual employed on an intermittent or seasonal basis for 
a period not exceeding 180 working days in each calendar year; or
    (ii) A special Government employee engaged in field work relating to 
land, range, forest, and mineral conservation and management activities.
    (c) Prohibition as to Department-granted rights in Federal lands. 
(1) Except as provided in paragraph (c)(2) of this section, employees 
and their spouses and their minor children are prohibited from acquiring 
or retaining any claim, permit, lease, small tract entries, or other 
rights that are granted by the Department in Federal lands.
    (2) Exceptions. (i) Nothing in paragraph (c)(1) of this section 
prohibits the recreational or other personal and noncommercial use of 
Federal lands by an employee, or the employee's spouse or minor child, 
on the same terms as use of Federal lands is available to the general 
public.
    (ii) Unless otherwise prohibited by law, employees in the Office of 
the Assistant Secretary--Indian Affairs, or in the Bureau of Indian 
Affairs, and the

[[Page 697]]

spouses and minor children of such employees, are not prohibited by 
paragraph (c)(1) of this section from acquiring or retaining rights in 
Federal lands controlled by the Department for the benefit of Indians or 
Alaska Natives.
    (d) Divestiture. The Designated Agency Ethics Official may require 
an employee to divest an interest the employee is otherwise authorized 
to retain under an exception listed in this section, based on a 
determination of substantial conflict under Sec. 2635.403(b) of this 
title.
    (e) Waivers. The Designated Agency Ethics Official may grant a 
written waiver from the prohibitions contained in paragraphs (b) and (c) 
of this section, based on a determination that the waiver is not 
inconsistent with 5 CFR part 2635 or otherwise prohibited by law and 
that, under the particular circumstances, application of the prohibition 
is not necessary to avoid the appearance of misuse of position or loss 
of impartially, or otherwise to ensure confidence in the impartiality 
and objectivity with which Department programs are administered. A 
waiver under this paragraph may be accompanied by appropriate 
conditions, such as acquiring execution of a written statement of 
disqualification. Notwithstanding the grant of any waiver, an employee 
remains subject to the disqualification requirements of 5 CFR 2635.402 
and 2635.502.
    (f) Pre-existing interests. An employee may retain a financial 
interest otherwise prohibited by paragraph (b) or (c) of this section 
which was approved in writing under criteria and procedures in effect 
before November 2, 1996, unless the approval is withdrawn by the 
Designated Agency Ethics Official, subject to the standards for waivers 
in paragraph (e) of this section.



Sec. 3501.104  Prohibited interests in mining.

    (a) Cross-reference to statutory prohibition. As set forth in 30 CFR 
part 706 and 43 CFR 20.402, employees of the Office of Surface Mining 
Reclamation and Enforcement and other employees who perform functions or 
duties under the Surface Mining Control and Reclamation Act of 1977, 30 
U.S.C. 1201 et seq., are prohibited by 30 U.S.C. 1211(f) from having a 
direct or indirect financial interest in underground or surface coal 
mining operations.
    (b) Prohibited interests in private mining activities in the United 
States for U.S. Geological Survey employees, their spouses, and minor 
children. (1) Except as provided in this section, no employee of the 
U.S. Geological Survey (USGS), or spouse or minor child of a USGS 
employee, shall have a direct or indirect financial interest in private 
mining activities in the United States.
    (2) Definitions. For purposes of applying the prohibition in 
paragraph (b)(1) of this section:
    (i) Financial interest has the meaning set forth in 5 CFR 
2635.403(c), and includes an employee's legal or beneficial interest in 
a trust.
    (ii) Private mining activities means exploration, development, and 
production of oil, gas, and other minerals on land in the United States 
that is not owned by the Federal government or by a State or local 
government.
    (3) Exceptions. The prohibition set forth in paragraph (b)(1) of 
this section does not apply to:
    (i)(A) Financial interests worth $5000 or less, for employees (or 
their spouses and minor children) of the Office of the Director and the 
Geologic Division, or
    (B) A single financial interest worth $5000 or less or an aggregate 
of financial interests worth $15,000 or less, for employees (or their 
spouses and minor children) of all other USGS organizational elements;
    (ii) Mineral royalties and overriding royalty interests of $600 per 
year or less;
    (iii) A publicly traded or publicly available investment fund (e.g., 
a mutual fund) which, in its prospectus, does not indicate the objective 
or practice of concentrating its investments in entities engaged in 
private mining activities in the United States, if the employee neither 
exercises control nor has the ability to exercise control over the 
financial interests held in the fund;
    (iv) A legal or beneficial interest in a qualified profit sharing, 
retirement, or similar plan, provided that the plan does not invest more 
than 25 percent of its funds in debt or equity instruments of entities 
engaged in private mining activities in the United States, and the

[[Page 698]]

employee neither exercise control nor has the ability to exercise 
control over the financial interests held in the plan; or
    (v) The ownership of a financial interest by an employee's spouse or 
minor child where the spouse or minor child obtained the interest 
through:
    (A) A gift from someone other than the employee or a member of the 
employee's household;
    (B) Inheritance;
    (C) Acquisition prior to the employee's becoming a USGS employee;
    (D) Acquisition prior to marriage to a USGS employee; or
    (E) A compensation package in connection with the employment of the 
spouse or minor child.
    (4) Divestiture. The Director of the U.S. Geological Survey may 
require an employee to divest an interest the employee is otherwise 
authorized to retain under an exception listed in paragraph (b)(3) of 
this section, based on a determination of substantial conflict under 
Sec. 2635.403(b) of this title.
    (5) Waivers. The Director of the U.S. Geological Survey may grant a 
written waiver from the prohibition contained in paragraph (b)(1) of 
this section, based on a determination that the waiver is not 
inconsistent with 5 CFR part 2635 or otherwise prohibited by law, and 
that, under the particular circumstances, application of the prohibition 
is not necessary to avoid the appearance of misuse of position or loss 
of impartiality, or otherwise to ensure confidence in the impartiality 
and objectivity with which Department programs are administered. A 
waiver under this paragraph may be accompanied by appropriate 
conditions, such as requiring execution of a written statement of 
disqualification. Notwithstanding the granting of any waiver, an 
employee remains subject to the disqualification requirements of 5 CFR 
2635.402 and 2635.502.
    (6) Pre-existing interests. A spouse or minor child of an employee 
may retain a financial interest otherwise prohibited by paragraph (b)(1) 
of this section which was permitted under criteria and procedures in 
effect before November 2, 1996, unless the Director of the U.S. 
Geological Survey determines in writing that such retention is 
inconsistent with the standards for waivers in paragraph (b)(5) of this 
section.

[62 FR 53718, Oct. 16, 1997; 63 FR 18501, Apr. 15, 1998]



Sec. 3501.105  Outside employment and activities.

    (a) Prohibited outside employment and activities. (1) Under 43 
U.S.C. 31(a), employees of the U.S. Geological Survey shall execute no 
surveys or examinations for private parties or corporations.
    (2) Employees in the Bureau of Land Management may not engage in 
outside employment as real estate agents and realty specialists. Such 
employees are not required to cancel a real estate license, but may 
maintain the license on an inactive basis.
    (3) Employees in the Office of the Assistant Secretary--Indian 
Affairs, or in the Bureau of Indian Affairs (BIA), may not hold a 
position on a tribal election board or on a tribal school board which 
oversees BIA schools.

    Note to paragraph (a)(3):
    Except for membership on a tribal election board and a tribal school 
board which oversees BIA schools, an eligible person employed in the 
Office of the Assistant Secretary--Indian Affairs or in the BIA may 
become a candidate for office in his local tribe or may be appointed as 
a representative of his local tribe if prior approval is obtained from 
the Deputy Assistant Secretary--Indian Affairs pursuant to paragraph (b) 
of this section.

    (b) Prior approval of outside employment--(1) Prior approval 
requirement. (i) An employee of the Department, other than an employee 
of the U.S. Geological Survey or a special Government employee, shall 
obtain written approval from his ethics counselor or other agency 
designee before engaging in outside employment with a prohibited source.
    (ii)(A) An employee of the U.S. Geological Survey (USGS), other than 
a special Government employee, shall obtain written approval from the 
USGS deputy ethics counselor before engaging in any outside employment.
    (B) The USGS may issue instructions exempting categories of 
employment from the prior approval requirement in paragraph 
(b)(1)(ii)(A) of this section, based on a determination that the 
employment within those categories

[[Page 699]]

would generally be approved and are not likely to involve conduct 
prohibited by statute or Federal regulation, including 5 CFR part 2635 
and this part.
    (2) Form of request for approval. (i) A request for prior approval 
of outside employment shall include, at a minimum, the following:
    (A) The employee's name, occupational title, office address, and 
office telephone number;
    (B) A brief description of the employee's official duties;
    (C) The nature of the outside employment, including a full 
description of the specific duties or services to be performed;
    (D) The name and address of the prospective outside employer; and
    (E) A statement that the employee currently has no official duties 
involving a matter that affects the outside employer and will disqualify 
himself from future participation in matters that could directly affect 
the outside employer.
    (ii) Upon a significant change in the nature of the outside 
employment or in the employee's official position, the employee shall 
submit a revised request for approval.
    (3) Standard for approval. Approval shall be granted unless a 
determination is made that the outside employment is expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635 and this part.
    (4) Definitions. As used in this section:
    (i) Employment means any form of non-Federal business relationship 
involving the provision of personal services by the employee, with or 
without compensation. It includes but is not limited to personal 
services as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner, trustee, teacher, or speaker. It includes 
writing done under an arrangement with another person for production or 
publication of the written product. It does not, however, include 
participation in the activities of a nonprofit charitable, religious, 
professional, social, fraternal, educational, recreational, public 
service, or civic organization, unless the participation involves the 
provision of professional services or advice for compensation other than 
reimbursement for actual expenses.
    (ii) Prohibited source has the meaning in 5 CFR 2635.203(d), as 
supplemented by Sec. 3501.102, and includes any person who:
    (A) Is seeking official action by the Department or, in the case of 
an employee of one of the separate agency components designated in Sec. 
3501.102(a), by that component;
    (B) Does business or seeks to do business with the Department, or in 
the case of an employee of one of the separate agency components 
designated in Sec. 3501.102(a), with that component;
    (C) Conducts activities regulated by the Department or, in the case 
of an employee of one of the separate agency components designated in 
Sec. 3501.102(a), by that component;
    (D) Has interests that may be substantially affected by the 
performance or nonperformance of the employee's official duties; or
    (E) Is an organization a majority of whose members are described in 
paragraphs (b)(4)(ii) (A) through (D) of this section.

[62 FR 53718, Oct. 16, 1997, as amended at 63 FR 34259, June 24, 1998]

[[Page 701]]



                   CHAPTER XXVI--DEPARTMENT OF DEFENSE




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Part                                                                Page
3601            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Defense.................................         703

[[Page 703]]



PART 3601_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF DEFENSE--Table of Contents




Sec.
3601.101 Purpose.
3601.102 Designation of separate agency components.
3601.103 Additional exceptions for gifts from outside sources.
3601.104 Additional limitations on gifts between DoD employees.
3601.105 Standards for accomplishing disqualification.
3601.106 Limitation on solicited sales.
3601.107 Prior approval for outside employment and business activities.
3601.108 Disclaimer for speeches and writing devoted to agency matters.

    Authority: 5 U.S.C. 301, 7301, 7351, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.203(a), 2635.204(k), 2635.803.

    Source: 58 FR 47622, Sept. 10, 1993, unless otherwise noted.



Sec. 3601.101  Purpose.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Defense (DoD) and supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635. DoD employees are required to comply with 
part 2635, this part, and implementing guidance and procedures.



Sec. 3601.102  Designation of separate agency components.

    (a) Pursuant to 5 CFR 2635.203(a), each of the following components 
of DoD is designated as a separate agency for purposes of the 
regulations in subpart B of 5 CFR part 2635 governing gifts from outside 
sources and 5 CFR 2635.807 governing teaching, speaking and writing:
    (1) Armed Services Board of Contract Appeals;
    (2) Department of the Army;
    (3) Department of the Navy;
    (4) Department of the Air Force;
    (5) Defense Commissary Agency;
    (6) Defense Contract Audit Agency;
    (7) Defense Finance and Accounting Service;
    (8) Defense Information Systems Agency;
    (9) Defense Intelligence Agency;
    (10) Defense Logistics Agency;
    (11) Defense Security Service;
    (12) Defense Threat Reduction Agency;
    (13) National Imagery and Mapping Agency;
    (14) National Security Agency;
    (15) Office of the Inspector General; and
    (16) Uniformed Services University of the Health Sciences.
    (b) Employees of DoD components not designated as separate agencies, 
including employees of the Office of the Secretary of Defense, will be 
treated as employees of DoD which shall be treated as a single agency 
that is separate from the above listed agencies for purposes of 
determining whether the donor of a gift is a prohibited source under 5 
CFR 2635.203(d) and for identifying the DoD employee's agency under 5 
CFR 2635.807 governing teaching, speaking and writing.

[58 FR 47622, Sept. 10, 1993, as amended at 68 FR 64980, Nov. 18, 2003]



Sec. 3601.103  Additional exceptions for gifts from outside sources.

    In addition to the gifts which come within the exceptions set forth 
in 5 CFR 2635.204, and subject to all provisions of 5 CFR 2635.201 
through 2635.205, a DoD employee may accept gifts from outside sources 
otherwise prohibited by 5 CFR 2635.202(a) as follows:
    (a) Events sponsored by States, local governments or civic 
organizations. A DoD employee may accept a sponsor's unsolicited gift of 
free attendance for himself and an accompanying spouse at an event 
sponsored by a State or local government or by a civic organization 
exempt from taxation under 26 U.S.C. 501(c)(4) when:
    (1) The agency designee has determined that the community relations 
interests of the agency will be served by the DoD employee's attendance;
    (2) The cost of the DoD employee's and the spouse's attendance is 
provided by the sponsor in accordance with 5 CFR 2635.204(g)(5); and
    (3) The gift of free attendance meets the definition in 5 CFR 
2635.204(g)(4).

[[Page 704]]

    (b) Scholarships and grants. A DoD employee, or the dependent of a 
DoD employee, may accept an educational scholarship or grant from an 
entity that does not have interests that may be substantially affected 
by the performance or non-performance of the involved DoD employee's 
official duties, or from an association or similar entity that does not 
have a majority of members with such interests, if the designated agency 
ethics official or designee determines that:
    (1) The scholarship or grant is made as part of an established 
program of grants or awards that is funded, wholly or in part, to ensure 
its continuation on a regular basis and under which recipients are 
selected pursuant to written standards; or
    (2) The scholarship or grant is established for the benefit of DoD 
employees, or the dependents of DoD employees, and recipients are 
selected pursuant to written standards approved by the Secretary of 
Defense or, where the scholarship or grant is available only to military 
members or their dependents, by the Secretary of the military department 
concerned.



Sec. 3601.104  Additional limitations on gifts between DoD employees.

    The following limitations shall apply to gifts from groups of DoD 
employees that include a subordinate and to voluntary contributions to 
gifts for superiors permitted under 5 CFR 2635.304(c)(1):
    (a) Gifts from a group that includes a subordinate. Regardless of 
the number of DoD employees contributing to a gift on a special, 
infrequent occasion as permitted by 5 CFR 2635.304(c)(1), a DoD employee 
may not accept a gift or gifts from a donating group if the market value 
exceeds an aggregate of $300 and if the DoD employee knows or has reason 
to know that any member of the donating group is his subordinate.
    (1) The cost of items excluded from the definition of a gift by 5 
CFR 2635.203(b) and the cost of food, refreshments and entertainment 
provided to the DoD employee and his personal guests to mark the 
occasion for which the gift is given shall not be included in 
determining whether the value of a gift or gifts exceeds the $300 
aggregate limit.
    (2) The value of a gift or gifts from two or more donating groups 
shall be aggregated and shall be considered to be from a single donating 
group if the DoD employee offered the gift knows or has reason to know 
that an individual who is his subordinate is a member of more than one 
of the donating groups.
    (b) Voluntary contribution. For purposes of 5 CFR 2635.304(c)(1), 
the nominal amount of a voluntary contribution that a DoD employee may 
solicit from another DoD employee for a group gift to the contributing 
DoD employee's superior for any special, infrequent occasion shall not 
exceed $10. A voluntary contribution of a nominal amount for food, 
refreshments and entertainment for the superior, the personal guests of 
the superior and other attendees at an event to mark the occasion for 
which a group gift is given may be solicited as a separate, voluntary 
contribution not subject to the $10 limit.



Sec. 3601.105  Standards for accomplishing disqualification.

    (a) Disqualifying financial interests. A DoD employee who is 
required, in accordance with 5 CFR 2635.402(c), to disqualify himself 
from participation in a particular matter to which he has been assigned 
shall, notwithstanding the guidance in 5 CFR 2635.4029(c) (1) and (2), 
provide written notice of disqualification to his supervisor upon 
determining that he will not participate in the matter.
    (b) Disqualification to ensure impartiality. A DoD employee who is 
required, in accordance with 5 CFR 2635.502(e), to disqualify himself 
from participation in a particular matter involving specific parties to 
which he has been assigned shall, notwithstanding the guidance in 5 CFR 
2635.502(e) (1) and (2), provide written notice of disqualification to 
his supervisor upon determining that he will not participate in the 
matter.
    (c) Disqualification from matter effecting prospective employees. A 
DoD employee who is required, in accordance with 5 CFR 2635.604(a), to 
disqualify

[[Page 705]]

himself from participation in a particular matter to which he has been 
assigned shall, notwithstanding the guidance in 5 CFR 2635.604 (b) and 
(c), provide written notice of disqualification to his supervisor upon 
determining that he will not participate in the matter.
    (d) Withdrawal of notification. A DoD employee may withdraw written 
notice under paragraphs (a), (b) or (c) of this section upon deciding 
that disqualification from participation in the matter is no longer 
required.



Sec. 3601.106  Limitation on solicited sales.

    A DoD employee shall not knowingly solicit or make solicited sales 
to DoD personnel who are junior in rank, grade or position, or to the 
family members of such personnel, on or off duty. In the absence of 
coercion or intimidation, this does not prohibit the sale or lease of a 
DoD employee's noncommercial personal or real property or commercial 
sales solicited and made in a retail establishment during off-duty 
employment. The posting of an advertisement in accordance with Federal 
building management policies does not constitute solicitation for 
purposes of this section.



Sec. 3601.107  Prior approval for outside employment and business activities.

    (a) A DoD employee, other than a special Government employee, who is 
required to file a financial disclosure report (SF 450 or SF 278) shall 
obtain written approval from the agency designee before engaging in a 
business activity or compensated outside employment with a prohibited 
source, unless general approval has been given in accordance with 
paragraph (b) of this section. Approval shall be granted unless a 
determination is made that the business activity or compensated outside 
employment is expected to involve conduct prohibited by statute or 
regulation. For purposes of this section, the following definitions 
apply:
    (1) Business activity. Any business, contractual or other financial 
relationship not involving the provision of personal services by the DoD 
employee. It does not include a routine commercial transaction or the 
purchase of an asset or interest, such as common stock, that is 
available to the general public;
    (2) Employment. Any form of non-Federal employment or business 
relationship involving the provision of personal services by the DoD 
employee. It includes, but is not limited to, personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner or trustee; and
    (3) Prohibited source. See 5 CFR 2635.203(d) (modified by the 
separate DoD component agency designations in Sec. 3601.102 of this 
part).
    (b) The DoD component designated agency ethics official or designee 
may, by a written notice, exempt categories of business activities or 
employment from the requirement of paragraph (a) of this section, for 
prior approval based on a determination that business activities or 
employment within those categories would generally be approved and are 
not likely to involve conduct prohibited by statute or regulation.



Sec. 3601.108  Disclaimer for speeches and writings devoted to agency matters.

    A DoD employee who uses or permits the use of his military rank or 
who includes or permits the inclusion of his title or position as one of 
several biographical details given to identify himself in connection 
with teaching, speaking or writing, in accordance with 5 CFR 
2635.807(b), shall make a disclaimer if the subject of the teaching, 
speaking or writing deals in significant part with any ongoing or 
announced policy, program or operation of the DoD employee's agency, as 
defined in Sec. 3601.102, and the DoD employee has not been authorized 
by appropriate agency authority to present that material as the agency's 
position. The disclaimer shall be made as follows:
    (a) The required disclaimer shall expressly state that the views 
presented are those of the speaker or author and do not necessarily 
represent the views of DoD or its components.
    (b) Where a disclaimer is required for an article, book or other 
writing, the disclaimer will be printed in a reasonably prominent 
position in the writing itself.

[[Page 706]]

    (c) Where a disclaimer is required for a speech or other oral 
presentation, the disclaimer may be given orally provided it is given at 
the beginning of the oral presentation.

[[Page 707]]



                  CHAPTER XXVIII--DEPARTMENT OF JUSTICE




  --------------------------------------------------------------------
Part                                                                Page
3801            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Justice.................................         709

[[Page 709]]



PART 3801_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF JUSTICE--Table of Contents




Sec.
3801.101 General.
3801.102 Detailed or assigned special agents of certain Departmental 
          components.
3801.103 Designation of separate Departmental components.
3801.104 Purchase or use of certain forfeited and other property.
3801.105 Personal use of Government property.
3801.106 Outside employment.

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; E.O. 
12988, 61 FR 4739; 5 CFR 2635.105, 2635.203(a), 2635.403(a), 2635.701-
2635.705, 2635.803, 2635.807(a)(2)(ii); and DOJ Order 1735.1.

    Source: 62 FR 23942, May 2, 1997, unless otherwise noted.



Sec. 3801.101  General.

    In accordance with Sec. 2635.105 of this title, the regulations in 
this part apply to employees of the Department of Justice and supplement 
the Standards of Ethical Conduct for Employees of the Executive Branch 
in part 2635 of this title. In addition to the regulations contained in 
part 2635 of this title and in this part, employees are subject to the 
conduct regulations contained in part 735 of this title and 28 CFR part 
45.



Sec. 3801.102  Detailed or assigned special agents of certain Departmental components.

    Notwithstanding a detail or assignment to another entity, any 
special agent of the Federal Bureau of Investigation or Drug Enforcement 
Administration who is subject to the regulations or standards of ethical 
conduct of that entity pursuant to Sec. 2635.104 of this title shall 
also remain subject to the regulations in this part.



Sec. 3801.103  Designation of separate Departmental components.

    (a) Pursuant to Sec. 2635.203(a) of this title, each of the 
following components is designated as a separate agency for purposes of 
the regulations contained in subpart B of part 2635 of this title 
governing gifts from outside sources, and, accordingly, Sec. 2635.807 
of this title governing teaching, speaking, and writing:

Antitrust Division
Bureau of Prisons (including Federal Prison Industries, Inc.)
Civil Division
Civil Rights Division
Community Relations Service
Criminal Division
Drug Enforcement Administration
Environment and Natural Resources Division
Executive Office for Immigration Review
Executive Office for United States Attorneys
(The Executive Office for United States Attorneys shall not be 
considered separate from any Office of the United States Attorney for a 
judicial district, but only from other designated components of the 
Department of Justice.)
Executive Office for United States Trustees
(The Executive Office for United States Trustees shall not be considered 
separate from any Office of the United States Trustee for a region, but 
only from other designated components of the Department of Justice.)
Federal Bureau of Investigation
Foreign Claims Settlement Commission
Immigration and Naturalization Service
Independent Counsel appointed by the Attorney General
INTERPOL
National Drug Intelligence Center
Justice Management Division
Office of Information and Privacy
Office of Intelligence Policy and Review
Office of Community Oriented Policing Services
Office of Justice Programs
Office of the Pardon Attorney
Office of Policy Development
Offices of the United States Attorney (94) (Each Office of the United 
States Attorney for a judicial district shall be considered a separate 
component from each other such office.)
Offices of the United States Trustee (21) (Each Office of the United 
States Trustee for a region shall be considered a separate component 
from each other such office.)
Tax Division
United States Marshals Service
United States Parole Commission

    (b) Employees serving in positions within the Department but outside 
of the components designated in paragraph (a) of this section must 
continue to treat the entire Department of Justice as their employing 
agency for purposes of the gift rules of subpart B of

[[Page 710]]

part 2635 of this title and the application of the teaching, speaking 
and writing provisions found in Sec. 2635.807 of this title.



Sec. 3801.104  Purchase or use of certain forfeited and other property.

    (a) In the absence of prior approval by the agency designee, no 
employee shall purchase, directly or indirectly, from the Department of 
Justice or its agents property forfeited to the United States and no 
employee shall use property forfeited to the United States which has 
been purchased, directly or indirectly, from the Department of Justice 
or its agents by his spouse or minor child. Approval may be granted only 
on the basis of a written determination by the agency designee that in 
the mind of a reasonable person with knowledge of the circumstances, 
purchase or use by the employee of the asset will not raise a question 
as to whether the employee has used his official position or nonpublic 
information to obtain or assist in an advantageous purchase or create an 
appearance of loss of impartiality in the performance of the employee's 
duties. A copy of the written determination shall be filed with the 
Deputy Attorney General.
    (b) No employee of the United States Marshals Service, Federal 
Bureau of Investigation, or Drug Enforcement Administration shall 
purchase, directly or indirectly, from his component, the General 
Services Administration, or the agent of either, property formerly used 
by that component and no such employee shall use property formerly used 
by his component which has been purchased, directly or indirectly, by 
his spouse or minor child from his component, the General Services 
Administration, or to the agent of either.



Sec. 3801.105  Personal use of Government property.

    Employees are prohibited by part 2635 of this title from using 
Government property for other than authorized purposes. The Department 
rule authorizing limited personal use of Department of Justice office 
and library equipment and facilities by its employees is at 28 CFR 45.4.



Sec. 3801.106  Outside employment.

    (a) Definition. For purposes of this section, outside employment 
means any form of employment, business relationship or activity, 
involving the provision of personal services whether or not for 
compensation, other than in the discharge of official duties. It 
includes, but is not limited to, services as a lawyer, officer, 
director, trustee, employee, agent, consultant, contractor, or general 
partner. Speaking, writing and serving as a fact witness are excluded 
from this definition, so long as they are not combined with the 
provision of other services that do fall within this definition, such as 
the practice of law. Employees who wish to engage in compensated 
speaking and writing should review Sec. 2635.807 of this title.
    (b) Prohibitied outside employment. (1) No employee may engage in 
outside employment that involves:
    (i) The practice of law, unless it is uncompensated and in the 
nature of community service, or unless it is on behalf of himself, his 
parents, spouse, or children;
    (ii) Any criminal or habeas corpus matter, be it Federal, State, or 
local; or
    (iii) Litigation, investigations, grants or other matters in which 
the Department of Justice is or represents a party, witness, litigant, 
investigator or grant-maker.
    (2) Where application of the restrictions of paragraph (b)(1) of 
this section will cause undue personal or family hardship; unduly 
prohibit an employee from completing a professional obligation entered 
into prior to Government service; or unduly restrict the Department from 
securing necessary and uniquely specialized services, the restrictions 
may be waived in writing based upon a determination that the activities 
covered by the waiver are not expected to involve conduct prohibited by 
statute or Federal regulation. Employees should refer to DOJ Order 
1735.1 on obtaining waivers. The Order is available from the agency 
designee which, for purposes of this rule, shall be the Deputy 
Designated Agency Ethics Official for the component.
    (c) Prior approval for outside employment. (1) An employee must 
obtain

[[Page 711]]

written approval before engaging in outside employment, not otherwise 
prohibited by paragraph (b) of this section that involves:
    (i) The practice of law; or
    (ii) A subject matter, policy,or program that is in his component's 
area of responsibility.
    (2) Employees should refer to DOJ Order 1735.1 for procedures on 
obtaining prior approval. A waiver granted pursuant to paragraph (b)(2) 
of this section will be sufficient to satisfy this prior approval 
requirement.
    (3) Approval shall be granted only upon a determination that the 
outside employment is not expected to involve conduct that is prohibited 
by statute or Federal regulation.

[62 FR 23942, May 2, 1997; 62 FR 31865, June 11, 1997]

[[Page 713]]



             CHAPTER XXIX--FEDERAL COMMUNICATIONS COMMISSION




  --------------------------------------------------------------------
Part                                                                Page
3901            Supplemental standards of ethical conduct 
                    for employees of the Federal 
                    Communications Commission...............         715
3902            Supplemental financial disclosure 
                    requirements for employees of the 
                    Federal Communications Commission.......         715

[[Page 715]]



PART 3901_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

FEDERAL COMMUNICATIONS COMMISSION--Table of Contents




Sec.
3901.101 General.
3901.102 Prior approval for practice of a profession.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 47 U.S.C. 303(r); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.803.

    Source: 61 FR 56111, Oct. 31, 1996, unless otherwise noted.



Sec. 3901.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Federal Communications Commission (FCC) and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, employees are subject to the 
Executive Branch Financial Disclosure Regulations contained in 5 CFR 
part 2634, the FCC's regulations at 5 CFR part 3902 supplementing 5 CFR 
part 2634, and to FCC regulations regarding their responsibilities and 
conduct in 47 CFR part 19.



Sec. 3901.102  Prior approval for practice of a profession.

    (a) Prior approval requirement. A professional employee of the FCC 
shall obtain approval before engaging in the outside practice of the 
same profession as that of the employee's official position, whether or 
not for compensation. As used in this section, ``profession'' has the 
meaning set forth in Sec. 2636.305(b)(1) of this title, and 
``professional employee'' means an employee whose official FCC position 
is in a profession as defined in Sec. 2636.305(b)(1) of this title.
    (b) Procedures for requesting approval. (1) A request for approval 
shall be in writing and shall be submitted, through the following 
Commission officials, to the Designated Agency Ethics Official or his 
designee:
    (i) For Heads of Bureaus and Offices, through the Chairman;
    (ii) For employees in the immediate Office of a Commissioner, 
through the Commissioner; or
    (iii) For all other employees, through the Head of the Bureau or 
Office to which the employee is assigned.
    (2) A request for approval shall include, at a minimum:
    (i) A full description of the services to be performed in practicing 
the profession;
    (ii) The name and address of the person or organization for which 
services are to be provided; and
    (iii) The estimated total time that will be devoted to practicing 
the profession.
    (3) Upon a significant change in the nature or scope of the 
employee's FCC position or the services to be provided in practicing the 
profession, the employee shall submit a revised request for approval.
    (c) Standard for approval. Approval shall be granted only upon a 
determination that the proposed outside practice of the employee's 
profession is not expected to involve conduct prohibited by statute or 
Federal regulation, including 5 CFR 2635.



PART 3902_SUPPLEMENTAL FINANCIAL DISCLOSURE REQUIREMENTS FOR EMPLOYEES OF THE 

FEDERAL COMMUNICATIONS COMMISSION--Table of Contents




Sec.
3902.101 General.
3902.102 Employees required to submit FCC Form A54A, ``Confidential 
          Supplemental Statement of Employment and Financial 
          Interests.''
3902.103 Submission and review of employees' statements.
3902.104 Confidentiality of employees' statements.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 47 U.S.C. 154(b), (j), (i) and 303(r); E.O. 12674, 54 FR 15159, 3 
CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 
1990 Comp., p. 306; 5 CFR 2634.103, 2634.601(b), 2634.901(b).

    Source: 61 FR 56111, Oct. 31, 1996, unless otherwise noted.

[[Page 716]]



Sec. 3902.101  General.

    The regulations in this part apply to employees of the Federal 
Communications Commission (FCC) and supplement the Executive Branch 
Financial Disclosure Regulations contained in 5 CFR part 2634.



Sec. 3902.102  Employees required to submit FCC Form A54A, ``Confidential 

Supplemental Statement of Employment and Financial Interests.''

    All employees, including special Government employees, who are 
required to file a Standard Form (SF) 278, ``Public Financial Disclosure 
Report,'' or a SF/OGE Form 450, ``Confidential Financial Disclosure 
Report,'' are also required to file FCC Form A54A, ``Confidential 
Supplemental Statement of Employment and Financial Interests.'' The 
purpose of FCC Form A54A is to require disclosure of income and interest 
in property and assets valued below the minimum reporting limits for the 
SF 278 and SF/OGE Form 450 in order to meet the separate requirements of 
section 4(b) of the Communications Act of 1934, at 47 U.S.C. 154(b).



Sec. 3902.103  Submission and review of employees' statements.

    (a) An employee required to submit a statement of employment and 
financial interests will be notified individually of his or her 
obligation to file.
    (b) An employee required to submit an FCC Form A54A, ``Confidential 
Supplemental Statement of Employment and Financial Interests'' pursuant 
to Sec. 3902.102 shall submit such statement to the Designated Agency 
Ethics Official, on the prescribed form, not later than 30 days after 
his or her entrance on duty, and annually thereafter at the time the 
employee submits his or her SF 278 or SF/OGE Form 450.
    (c) Financial statements submitted under this subpart shall be 
reviewed by the Designated Agency Ethics Official.
    (d) When a statement submitted under this subpart or information 
from other sources indicates a potential violation of applicable laws 
and regulations, such as a conflict between the interests of an employee 
or special Government employee and the performance of his or her 
services for the Government, the employee concerned shall be provided an 
opportunity to explain and resolve the potential violation.
    (e) When, after explanation by the employee involved, the potential 
violation of law or regulation is not resolved, the information 
concerning the potential violation shall be reported to the Chairman by 
the Designated Agency Ethics Official for appropriate action.



Sec. 3902.104  Confidentiality of employees' statements.

    Each supplemental statement of employment and financial interests 
shall be held in confidence and shall be retained in the Office of the 
Designated Agency Ethics Official. Each employee charged with reviewing 
a statement is responsible for maintaining the statements in confidence 
and shall not allow access to or allow information to be disclosed from 
a statement except to carry out the purpose of this part or as otherwise 
required by law. Information from these statements shall not be 
disclosed except as the Chairman may determine in accordance with law or 
regulation.

[[Page 717]]



          CHAPTER XXX--FARM CREDIT SYSTEM INSURANCE CORPORATION




  --------------------------------------------------------------------
Part                                                                Page
4001            Supplemental standards of ethical conduct 
                    for employees of the Farm Credit System 
                    Insurance Corporation...................         719

[[Page 719]]



PART 4001_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE FARM 

CREDIT SYSTEM INSURANCE CORPORATION--Table of Contents




Sec.
4001.101 General.
4001.102 Definitions.
4001.103 Prohibited financial interests.
4001.104 Prohibited borrowing.
4001.105 Purchase of System institution assets.
4001.106 Restrictions arising from the employment of relatives.
4001.107 Involvement in System institution board member elections.
4001.108 Outside employment and business activity.
4001.109 Waivers.

    Authority: 5 U.S.C. 7301, 7353; 5 U.S.C. App. (Ethics in Government 
Act of 1978); 12 U.S.C. 2277a-7, 2277a-8; E.O. 12674, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 3 CFR, 1990 Comp., p. 306; 5 CFR 
2635.105, 2635.403(a), 2635.502, 2635.702, 2635.802(a), 2635.803.

    Source: 60 FR 30776, June 12, 1995, unless otherwise noted.



Sec. 4001.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to Farm Credit System Insurance Corporation (Corporation) 
employees and supplement the Standards of Ethical Conduct for Employees 
of the executive branch contained in 5 CFR part 2635. Employees are 
required to comply with 5 CFR part 2635, this part, and Corporation 
guidance and procedures established pursuant to 5 CFR 2635.105.



Sec. 4001.102  Definitions.

    For purposes of this part:
    (a) Covered employee means:
    (1) All examiners who perform work for the Corporation; and
    (2) Any other employee specified by Corporation directive whose 
duties and responsibilities require application of these supplemental 
regulations to ensure public confidence that the Corporation's programs 
are conducted impartially and objectively. The Corporation Designated 
Agency Ethics Official (DAEO) or his or her designee, in consultation 
with the Chief Operating Officer, will determine which employees are 
covered for the purpose of this part.
    (b) Related entity means:
    (1) Affiliates defined in section 8.5(e) of the Farm Credit Act of 
1971, as amended (Act), 12 U.S.C. 2001 et seq., 12 U.S.C. 2279aa-5;
    (2) Affiliates defined in section 8.11(e) of the Act, 12 U.S.C. 
2279aa-11;
    (3) Service organizations authorized by section 4.25 of the Act, 12 
U.S.C. 2211; and
    (4) Any other entity owned or controlled by one or more Farm Credit 
System (System) institution that is not chartered by the Farm Credit 
Administration (FCA).
    (c) System institution refers to:
    (1) All institutions chartered and regulated by the FCA as described 
in section 1.2 of the Act, 12 U.S.C. 2002;
    (2) The Federal Farm Credit Banks Funding Corporation, established 
pursuant to section 4.9 of the Act, 12 U.S.C. 2160; and
    (3) The Federal Agricultural Mortgage Corporation, established 
pursuant to section 8.1 of the Act, 12 U.S.C. 2279aa-1.



Sec. 4001.103  Prohibited financial interests.

    (a) Prohibition. Except as provided in paragraph (c) of this section 
and Sec. 4001.109, no covered employee, or spouse or minor child of a 
covered employee, shall own, directly or indirectly, securities issued 
by a System institution or related entity.
    (b) Definition of securities. For purposes of this section, the term 
``securities'' includes all interests in debt or equity instruments. The 
term includes, without limitation, secured and unsecured bonds, 
debentures, notes, securitized assets and commercial paper, as well as 
all types of preferred and common stock. The term encompasses both 
current and contingent ownership interests, including any beneficial or 
legal interest derived from a trust. It extends to any right to acquire 
or dispose of any long and short position in such securities and 
includes, without limitation, interests convertible into such 
securities, as well as options, rights, warrants, puts, calls, and 
straddles relating to such securities.
    (c) Exceptions. Nothing in this section prohibits a covered 
employee, or spouse

[[Page 720]]

or minor child of a covered employee, from:
    (1) Investing in a publicly traded or publicly available investment 
fund which, in its prospectus, does not indicate the objective or 
practice of concentrating its investments in the securities of System 
institutions or related entities, if the employee neither exercises 
control over nor has the ability to exercise control over the financial 
interests held in the fund;
    (2) Having a legal or beneficial interest in a qualified profit 
sharing, retirement, or similar plan, provided that the plan does not 
invest more than 25 percent of its funds in securities of System 
institutions or related entities, and the employee neither exercises 
control over nor has the ability to exercise control over the financial 
interests held in the plan;
    (3) Owning securities of System institutions held as a result of 
pre-existing credit, as specified in Sec. 4001.104(b); or
    (4) Owning any security pursuant to a waiver granted under Sec. 
4001.109.



Sec. 4001.104  Prohibited borrowing.

    (a) Prohibition on employee borrowing. Except as provided in 
paragraph (b) of this section, no covered employee, or spouse or minor 
child of a covered employee, shall seek or obtain any loan or extension 
of credit from a System institution or from an officer, director, 
employee, or related entity of a System institution.
    (b) Exception. This section does not prohibit a covered employee, or 
spouse or minor child of a covered employee, from retaining a loan from 
a System institution on its original terms if the loan was obtained 
prior to appointment to a covered employee position. For loans retained 
pursuant to this paragraph, a covered employee shall submit to his or 
her immediate supervisor, the ethics liaison in his or her office, and 
the DAEO, a written disqualification from examining, auditing, visiting, 
reviewing, investigating, or otherwise participating in the regulation 
or supervision of the System institution that is providing the retained 
credit. Written disqualification shall be made within 30 days of 
appointment to a covered employee position on a form prescribed by the 
DAEO. Any renewal or renegotiation of a pre-existing loan or extension 
of credit will be treated as a new loan subject to the prohibition in 
paragraph (a) of this section.



Sec. 4001.105  Purchase of System institution assets.

    (a) Prohibition on purchasing assets owned by a System institution. 
No employee, or spouse or minor child of an employee, shall purchase, 
directly or indirectly, an asset (such as real property, vehicles, 
furniture, or similar items) from a System institution or related 
entity, regardless of how the asset is sold.
    (b) Assets held or managed by the Corporation or a receiver or 
conservator--(1) Prohibition on purchase. No employee, or spouse or 
minor child of an employee, shall purchase, directly or indirectly, an 
asset (such as real property, vehicles, furniture, or similar items) 
that is held or managed by a receiver or conservator for a System 
institution or that is held by the Corporation as a result of its 
provision of open bank assistance to troubled System banks, regardless 
of how the asset is sold.
    (2) Disqualification. An employee who is involved in the disposition 
of receivership or conservatorship assets, or assets acquired by the 
Corporation as a result of its provision of open bank assistance to 
troubled System banks, shall disqualify himself or herself from 
participation in the disposition of such assets when the employee 
becomes aware that anyone with whom the employee has a covered 
relationship, as defined in Sec. 2635.502(b)(1) of the Executive 
Branch-wide Standards, is or will be attempting to acquire such assets. 
The employee shall provide written notification of the disqualification 
to his or her immediate supervisor, the ethics liaison in his or her 
office, and the DAEO.



Sec. 4001.106  Restrictions arising from the employment of relatives.

    When the spouse of a covered employee, or other relative who is 
dependent on or resides with a covered employee, is employed in a 
position that the employee would be prohibited from occupying by Sec. 
4001.108(a), the employee shall file a report of family member 
employment with his or her immediate

[[Page 721]]

supervisor, the ethics liaison in his or her office, and the DAEO on a 
form prescribed by the DAEO. Notice shall be made as soon as possible 
after learning about employment already in existence or in advance of 
known prospective employment. The employee shall be disqualified from 
participation in any matter involving the employee's spouse or relative, 
or the employing entity, unless the DAEO authorizes the employee to 
participate in the matter using the standard in Sec. 2635.502(d) of the 
Executive Branch-wide Standards.



Sec. 4001.107  Involvement in System institution board member elections.

    No covered employee who is able to participate in a System 
institution board election because of System securities owned by virtue 
of retaining a pre-existing loan or extension of credit from a System 
institution in accordance with Sec. 4001.104(b) shall take any part, 
directly or indirectly, in the nomination or election of a board member 
of a System institution, other than by exercising the right to vote. In 
addition, a covered employee shall not make any oral or written 
statement that may be reasonably construed as intending to influence any 
vote in such nominations or elections.



Sec. 4001.108  Outside employment and business activity.

    (a) Prohibition. No covered employee shall perform services, either 
on a paid or unpaid basis, for any System institution or related entity, 
or any officer, director, employee, or person connected with a System 
institution or related entity. Nothing in this section would prohibit 
covered employees from providing any service that is a part of their 
official duties.
    (b) General requirement for prior approval. All employees shall 
obtain prior written approval before engaging in any outside employment 
or business activity, with or without compensation, unless the outside 
activity is exempt from the definition of ``employment'' as set forth in 
paragraph (c) of this section. An employee proposing to engage in 
outside employment and business activities is required, prior to 
commencement, to send a written notice of the proposed employment or 
activity to the DAEO on a form prescribed by the DAEO. Approval shall be 
granted only upon a determination that the employment or activity is not 
expected to involve conduct prohibited by statute, part 2635 of this 
title, or paragraph (a) of this section.
    (c) Definition. For purposes of this section, ``employment'' means 
any form of non-Federal employment, business relationship or activity 
involving the provision of personal services by the employee, whether or 
not for compensation. It includes, but is not limited to, personal 
services as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner, trustee, teacher, or speaker. It includes 
writing when done under an arrangement with another person for 
production or publication of the written product. It does not, however, 
include participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service, or civic organization for which no compensation is 
received other than reimbursement for necessary expenses.



Sec. 4001.109  Waivers.

    The DAEO may grant a written waiver from any provision of this part 
based on a determination that the waiver is not inconsistent with part 
2635 of this title or otherwise prohibited by law and that, under the 
particular circumstances, application of the provision is not necessary 
to avoid the appearance of misuse of position or loss of impartiality, 
or otherwise to ensure confidence in the impartiality and objectivity 
with which Corporation programs are administered. A waiver under this 
paragraph may impose appropriate conditions, such as requiring execution 
of a written disqualification.

[[Page 723]]



                CHAPTER XXXI--FARM CREDIT ADMINISTRATION




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Part                                                                Page
4101            Supplemental standards of ethical conduct 
                    for employees of the Farm Credit 
                    Administration..........................         725

[[Page 725]]



PART 4101_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE FARM 

CREDIT ADMINISTRATION--Table of Contents




Sec.
4101.101 General.
4101.102 Definitions.
4101.103 Prohibited financial interests.
4101.104 Prohibited borrowing.
4101.105 Purchase of System institution assets.
4101.106 Restrictions arising from the employment of relatives.
4101.107 Involvement in System institution board member elections.
4101.108 Outside employment and business activity.
4101.109 Waivers.

    Authority: 5 U.S.C. 7301, 7353; 5 U.S.C. App. (Ethics in Government 
Act of 1978); 12 U.S.C. 2245(c)(2)(C), 2252; E.O. 12674, 3 CFR, 1989 
Comp., p. 215, as modified by E.O. 12731, 3 CFR, 1990 Comp., p. 306; 5 
CFR 2635.105, 2635.403(a), 2635.502, 2635.702, 2635.802(a), 2635.803.

    Source: 60 FR 30781, June 12, 1995, unless otherwise noted.



Sec. 4101.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to Farm Credit Administration (FCA) employees and supplement the 
Standards of Ethical Conduct for Employees of the executive branch 
contained in 5 CFR part 2635. Employees are required to comply with 5 
CFR part 2635, this part, and Agency guidance and procedures established 
pursuant to 5 CFR 2635.105.



Sec. 4101.102  Definitions.

    For purposes of this part:
    (a) Covered employee means:
    (1) Examiners; and
    (2) Any other employee specified by FCA directive whose duties and 
responsibilities require application of these supplemental regulations 
to ensure public confidence that the FCA's programs are conducted 
impartially and objectively. The FCA Designated Agency Ethics Official 
(DAEO) or his or her designee, in consultation with the Office 
Directors, will determine which employees are covered for the purpose of 
this part.
    (b) Related entity means:
    (1) Affiliates defined in section 8.5(e) of the Farm Credit Act of 
1971, as amended (Act), 12 U.S.C. 2001 et seq., 12 U.S.C. 2279aa-5;
    (2) Affiliates defined in section 8.11(e) of the Act, 12 U.S.C. 
2279aa-11;
    (3) Service organizations authorized by section 4.25 of the Act, 12 
U.S.C. 2211; and
    (4) Any other entity owned or controlled by one or more Farm Credit 
System (System) institution that is not chartered by the FCA.
    (c) System institution refers to:
    (1) All institutions chartered and regulated by the FCA as described 
in section 1.2 of the Act, 12 U.S.C. 2002;
    (2) The Federal Farm Credit Banks Funding Corporation, established 
pursuant to section 4.9 of the Act, 12 U.S.C. 2160; and
    (3) The Federal Agricultural Mortgage Corporation, established 
pursuant to section 8.1 of the Act, 12 U.S.C. 2279aa-1.



Sec. 4101.103  Prohibited financial interests.

    (a) Prohibition. Except as provided in paragraph (c) of this section 
and Sec. 4101.109, no covered employee, or spouse or minor child of a 
covered employee, shall own, directly or indirectly, securities issued 
by a System institution or related entity.
    (b) Definition of securities. For purposes of this section, the term 
``securities'' includes all interests in debt or equity instruments. The 
term includes, without limitation, secured and unsecured bonds, 
debentures, notes, securitized assets and commercial paper, as well as 
all types of preferred and common stock. The term encompasses both 
current and contingent ownership interests, including any beneficial or 
legal interest derived from a trust. It extends to any right to acquire 
or dispose of any long and short position in such securities and 
includes, without limitation, interests convertible into such 
securities, as well as options, rights, warrants, puts, calls, and 
straddles relating to such securities.
    (c) Exceptions. Nothing in this section prohibits a covered 
employee, or spouse or minor child of a covered employee, from:

[[Page 726]]

    (1) Investing in a publicly traded or publicly available investment 
fund which, in its prospectus, does not indicate the objective or 
practice of concentrating its investments in the securities of System 
institutions or related entities, and the employee neither exercises 
control over nor has the ability to exercise control over the financial 
interests held in the fund;
    (2) Having a legal or beneficial interest in a qualified profit 
sharing, retirement, or similar plan, provided that the plan does not 
invest more than 25 percent of its funds in securities of System 
institutions or related entities, and the employee neither exercises 
control over nor has the ability to exercise control over the financial 
interests held in the plan;
    (3) Owning securities of System institutions held as a result of 
pre-existing credit, as specified in Sec. 4101.104(b); or
    (4) Owning any security pursuant to a waiver granted under Sec. 
4101.109.



Sec. 4101.104  Prohibited borrowing.

    (a) Prohibition on employee borrowing. Except as provided in 
paragraph (b) of this section, no covered employee, or spouse or minor 
child of a covered employee, shall seek or obtain any loan or extension 
of credit from a System institution or from an officer, director, 
employee, or related entity of a System institution.
    (b) Exception. This section does not prohibit a covered employee, or 
spouse or minor child of a covered employee, from retaining a loan from 
a System institution on its original terms if the loan was obtained 
prior to appointment to a covered employee position. For loans retained 
pursuant to this paragraph, a covered employee shall submit to his or 
her immediate supervisor, the ethics liaison in his or her office, and 
the DAEO, a written disqualification from examining, auditing, visiting, 
reviewing, investigating, or otherwise participating in the supervision 
of the System institution that is providing the retained credit. Written 
disqualification shall be made within 30 days of appointment to a 
covered employee position on a form prescribed by the DAEO. Any renewal 
or renegotiation of a pre-existing loan or extension of credit will be 
treated as a new loan subject to the prohibition in paragraph (a) of 
this section.



Sec. 4101.105  Purchase of System institution assets.

    (a) Prohibition on purchasing assets owned by a System institution. 
No covered employee, or spouse or minor child of a covered employee, 
shall purchase, directly or indirectly, an asset (such as real property, 
vehicles, furniture, or similar items) from a System institution or 
related entity, unless it is sold at a public auction or by other means 
which assure that the selling price is the asset's fair market value. A 
covered employee shall obtain concurrence from the DAEO about whether a 
proposed purchase of a System institution asset is proper.
    (b) Assets held or managed by the Farm Credit System Insurance 
Corporation or a receiver or conservator--(1) Prohibition on purchase. 
No covered employee, or spouse or minor child of a covered employee, 
shall purchase, directly or indirectly, an asset (such as real property, 
vehicles, furniture, or similar items) that is held or managed by a 
receiver or conservator for a System institution or that is held by the 
Farm Credit System Insurance Corporation (Corporation) as a result of 
its provision of open bank assistance to troubled System banks 
regardless of how the asset is sold.
    (2) Disqualification. A covered employee who is involved in the 
disposition of receivership or conservatorship assets, or assets 
acquired by the Corporation as a result of its provision of open bank 
assistance to troubled System banks, shall disqualify himself or herself 
from participation in the disposition of such assets when the employee 
becomes aware that anyone with whom the employee has a covered 
relationship, as defined in Sec. 2635.502(b)(1) of the Executive 
Branch-wide Standards, is or will be attempting to acquire such assets. 
The employee shall provide written notification of the disqualification 
to his or her immediate supervisor, the ethics liaison in his or her 
office, and the DAEO.

[[Page 727]]



Sec. 4101.106  Restrictions arising from the employment of relatives.

    When the spouse of a covered employee, or other relative who is 
dependent on or resides with a covered employee, is employed in a 
position that the employee would be prohibited from occupying by Sec. 
4101.108(a), the employee shall file a report of family member 
employment with his or her immediate supervisor, the ethics liaison in 
his or her office, and the DAEO on a form prescribed by the DAEO. Notice 
shall be made as soon as possible after learning about employment 
already in existence or in advance of known prospective employment. The 
employee shall be disqualified from participation in any matter 
involving the employee's spouse or relative, or the employing entity, 
unless the DAEO authorizes the employee to participate in the matter 
using the standard in Sec. 2635.502(d) of the Executive Branch-wide 
Standards.



Sec. 4101.107  Involvement in System institution board member elections.

    No covered employee who is able to participate in a System 
institution board election because of System securities owned by virtue 
of retaining a pre-existing loan or extension of credit from a System 
institution in accordance with Sec. 4101.104(b) shall take any part, 
directly or indirectly, in the nomination or election of a board member 
of a System institution, other than by exercising the right to vote. In 
addition, a covered employee shall not make any oral or written 
statement that may be reasonably construed as intending to influence any 
vote in such nominations or elections.



Sec. 4101.108  Outside employment and business activity.

    (a) Prohibition. No covered employee shall perform services, either 
on a paid or unpaid basis, for any System institution or related entity, 
or any officer, director, employee, or person connected with a System 
institution or related entity. Nothing in this section would prohibit 
covered employees from providing any service that is a part of their 
official duties.
    (b) General requirement for prior approval. All employees shall 
obtain prior written approval before engaging in any outside employment 
or business activity, with or without compensation, unless the outside 
activity is exempt from the definition of ``employment'' as set forth in 
paragraph (c) of this section. An employee proposing to engage in 
outside employment and business activities is required, prior to 
commencement, to send a written notice of the proposed employment or 
activity to the DAEO on a form prescribed by the DAEO. Approval shall be 
granted only upon a determination that the employment or activity is not 
expected to involve conduct prohibited by statute, part 2635 of this 
title, or paragraph (a) of this section.
    (c) Definition. For purposes of this section, ``employment'' means 
any form of non-Federal employment, business relationship or activity 
involving the provision of personal services by the employee, whether or 
not for compensation. It includes, but is not limited to, personal 
services as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner, trustee, teacher, or speaker. It includes 
writing when done under an arrangement with another person for 
production or publication of the written product. It does not, however, 
include participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service, or civic organization for which no compensation is 
received other than reimbursement for necessary expenses.



Sec. 4101.109  Waivers.

    The DAEO may grant a written waiver from any provision of this part 
based on a determination that the waiver is not inconsistent with part 
2635 of this title or otherwise prohibited by law and that, under the 
particular circumstances, application of the provision is not necessary 
to avoid the appearance of misuse of position or loss of impartiality, 
or otherwise to ensure confidence in the impartiality and objectivity 
with which Agency programs are administered. A waiver under this 
paragraph may impose appropriate conditions, such as requiring execution 
of a written disqualification.

[[Page 729]]



         CHAPTER XXXIII--OVERSEAS PRIVATE INVESTMENT CORPORATION




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Part                                                                Page
4301            Supplemental standards of ethical conduct 
                    for employees of the Overseas Private 
                    Investment Corporation..................         731

[[Page 731]]



PART 4301_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

OVERSEAS PRIVATE INVESTMENT CORPORATION--Table of Contents




    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.



Sec. 4301.101  Prior approval for outside employment.

    Any employee of the Overseas Private Investment Corporation who is 
interested in engaging in outside employment must first obtain approval 
from the Designated Agency Ethics Official before engaging in such 
employment activity. For this purpose, employment has the meaning set 
forth in Sec. 2635.603(a) of this title.

[58 FR 33320, June 17, 1993]

[[Page 733]]



              CHAPTER XXXV--OFFICE OF PERSONNEL MANAGEMENT




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Part                                                                Page
4501            Supplemental standards of ethical conduct 
                    for employees of the Office of Personnel 
                    Management..............................         735

[[Page 735]]



PART 4501_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

OFFICE OF PERSONNEL MANAGEMENT--Table of Contents




Sec.
4501.101 General.
4501.102 Examination information.
4501.103 Prior approval for certain outside activities.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978), E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.702, 2635.703, 2635.802, 2635.803, 2635.805.

    Source: 61 FR 36996, July 16, 1996, unless otherwise noted.



Sec. 4501.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Office of Personnel Management (OPM) and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition to the 
regulations in 5 CFR part 2635 and this part, OPM employees are subject 
to the responsibilities and conduct regulations contained in 5 CFR parts 
735 and 1001, the executive branch-wide financial disclosure regulations 
contained in 5 CFR part 2634, and the executive branch regulations 
regarding outside employment at 5 CFR part 2636.



Sec. 4501.102  Examination information.

    (a) An employee of OPM who takes part in the construction of written 
tests or any other assessment device, has access to such material, or is 
involved in the examination rating process, shall notify his supervisor, 
in writing, when he intends to file for a competitive examination, an 
internal competitive examination, or an Armed Services entrance 
examination. The employee also must give such notice if he knows that 
his spouse, minor child, or business general partner intends to take any 
of these examinations.
    (b) The employee's supervisor or other appropriate authority will 
arrange the employee's duty assignments to prevent his contact with 
materials related to the examination or examinations that will be taken. 
If the test material involved in the forthcoming examination has already 
been exposed to the employee, arrangements will be made for the employee 
or other person concerned to be given an alternate test.
    (c) The employee's supervisor is responsible for seeing that 
notifications given by employees under this section are transmitted 
promptly to the Test Security Officer in OPM's Employment Service.



Sec. 4501.103  Prior approval for certain outside activities.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, shall obtain written approval before engaging--with 
or without compensation--in the following outside activities:
    (1) Providing professional services involving the application of the 
same specialized skills or the same educational background as 
performance of the employee's official duties;
    (2) Teaching, speaking, or writing that relates to the employee's 
official duties;
    (3) Serving as an officer, director, trustee, general partner, 
employee, agent, attorney, consultant, contractor, or active participant 
for a prohibited source, except that prior approval is not required by 
this paragraph (a)(3) to provide such service without compensation 
(other than reimbursement of expenses) for a prohibited source that is a 
nonprofit charitable, religious, professional, social, fraternal, 
educational, recreational, public service, or civic organization, unless 
prior approval for the activity is required by paragraph (a)(1), (a)(2), 
or (a)(4) of this section, or unless the organization receives or seeks 
to receive fundraising support through the Combined Federal Campaign 
(CFC) under 5 CFR part 950 and the employee's official duties involve 
the administration of the CFC program; or
    (4)(i) Except as provided in paragraph (a)(4)(ii) of this section, 
providing services, other than clerical services or service as a fact 
witness, on behalf of any other person in connection with a particular 
matter:
    (A) In which the United States is a party;

[[Page 736]]

    (B) In which the United States has a direct and substantial 
interest; or
    (C) If the provision of services involves the preparation of 
materials for submission to, or representation before, a Federal court 
or executive branch agency.
    (ii) Prior approval is not required by paragraph (a)(4)(i) of this 
section for OPM employees acting on behalf of the labor organization 
that is the exclusive representative of the OPM employees in the unit it 
represents to provide services as an agent or attorney for, or otherwise 
to represent, such an OPM employee who is the subject of disciplinary, 
loyalty, or other personnel administration proceedings in connection 
with those proceedings.
    (b) Submission of requests for approval. (1) Requests for approval 
shall be submitted in writing to the agency designee, through normal 
supervisory channels. Such requests shall include, at a minimum, the 
following:
    (i) The employee's name and position title;
    (ii) The name and address of the person or organization for whom the 
outside activity is to be performed;
    (iii) A description of the proposed outside activity, including the 
duties and services to be performed while engaged in the activity; and
    (iv) The proposed hours that the employee will engage in the outside 
activity, and the approximate dates of the activity.
    (2) Together with his request for approval, the employee shall 
provide a certification that:
    (i) The outside activity will not depend in any way on nonpublic 
information;
    (ii) No official duty time or Government property, resources, or 
facilities not available to the general public will be used in 
connection with the outside activity; and
    (iii) The employee has read subpart H (``Outside Activities'') of 5 
CFR part 2635.
    (3) Upon a significant change in the nature or scope of the outside 
activity or in the employee's official position, the employee shall 
submit a revised request for approval.
    (c) Approval of requests. Approval shall be granted only upon a 
determination by the agency designee, in consultation with an agency 
ethics official when such consultation is deemed necessary by the agency 
designee, that the outside activity is not expected to involve conduct 
prohibited by statute or Federal regulation, including 5 CFR part 2635.
    (d) Definitions. For purposes of this section:
    (1) Active participant has the meaning set forth in 5 CFR 
2635.502(b)(1)(v).
    (2) Nonpublic information has the meaning set forth in 5 CFR 
2635.703(b).
    (3) Professional services means the provision of personal services 
by an employee, including the rendering of advice or consultation, which 
involves application of the skills of a profession as defined in 5 CFR 
2636.305(b)(1).
    (4) Prohibited source has the meaning set forth in 5 CFR 
2635.203(d).
    (5) Relates to the employee's official duties has the meaning set 
forth in 5 CFR 2635.807(a)(2)(i)(B) through (a)(2)(i)(E).

[61 FR 36996, July 16, 1996; 62 FR 32859, June 17, 1997]

[[Page 737]]



               CHAPTER XL--INTERSTATE COMMERCE COMMISSION




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Part                                                                Page
5001            Supplemental standards of ethical conduct 
                    for employees of the Interstate Commerce 
                    Commission..............................         739

[[Page 739]]



PART 5001_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

INTERSTATE COMMERCE COMMISSION--Table of Contents




Sec.
5001.101 General.
5001.102 Prohibited financial interests in for-hire transportation 
          companies.
5001.103 Impartiality determinations for members of the Interstate 
          Commerce Commission.
5001.104 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 49 U.S.C. 10301, 10306, 10321; E.O. 12674, 54 FR 15159, 3 CFR, 
1989 Comp. at 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 
Comp., at 306; 5 CFR 2635.105, 2635.403, 2635.803.

    Source: 58 FR 41990, Aug. 6, 1993, unless otherwise noted.



Sec. 5001.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to members and other employees of the Interstate Commerce 
Commission and supplement the Standards of Ethical Conduct for Employees 
of the Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, members and other employee 
are subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2635 and to additional regulations regarding 
their conduct contained in 49 CFR part 1019.



Sec. 5001.102  Prohibited financial interests in for-hire transportation companies.

    (a) General prohibition. Except as provided in paragraph (c) of this 
section, no member or other employee of the Interstate Commerce 
Commission shall, directly or indirectly:
    (1) Be employed by or hold any other official relationship with any 
for-hire transportation company whether or not subject to the Interstate 
Commerce Act; or
    (2) Own securities of or be in any manner pecuniarily interested in 
any for-hire transportation company whether or not subject to the 
Interstate Commerce Act.
    (b) Indirect relationships and interests. (1) For the purposes of 
paragraph (a) of this section, an indirect relationship with or interest 
in a for-hire transportation company includes, but is not limited to, an 
interest in:
    (i) Any company that owns or controls and has more than two percent 
of its assets directly invested in or dervices more than two percent of 
its income directly from a for-hire transportation company whether or 
not subject to the Interstate Commerce Act; or
    (ii) Any company, mutual fund or other enterprise which has an 
interest of more than ten percent of its assets directly invested in or 
derives more than ten percent of its income directly from for-hire 
transportation companies whether or not subject to the Interstate 
Commerce Act.
    (2) For the purposes of determining the applicability of this 
paragraph, an employee may rely on the most recent financial statement 
issued to its security holders by the company, fund or other enterprise.
    (c) Exceptions. (1) Where a previously proper holding of a member or 
other employee becomes prohibited because of the enterprise's 
acquisition of an interest in a for-hire transportation company, the 
employee shall have nine months within which to dispose of the interest.
    (2) In cases of financial hardship where the relationship or 
interest is not prohibited by 49 U.S.C. 10301(d) or 10306(e), the 
Designated Agency Ethics Official may grant a written waiver of the 
prohibition in paragraph (a) of this section based on a determination 
that application of the prohibition is not necessary to ensure public 
confidence in the impartiality and objectivity with which the 
Commission's programs are administered or to avoid a violation of part 
2635 of this title.



Sec. 5001.103  Impartiality determinations for members of the Interstate 

Commerce Commission.

    A member is an ``agency designee'' for the purposes of making an 
impartiality disqualification determination under 5 CFR 2635.502(d) with 
respect to the member's own participation in a

[[Page 740]]

Commission proceeding. This determination must be made in consultation 
with the Designated Agency Ethics Official.



Sec. 5001.104  Prior approval for outside employment.

    (a) Before engaging in any outside employment, whether or not for 
compensation, an employee of the Interstate Commerce Commission, other 
than a Commissioner, must obtain the written approval of his or her 
supervisor and the Designated Agency Ethics Official (DAEO). Requests 
for approval shall be forwarded through normal supervisory channels to 
the DAEO and shall include, at a minimum, the following:
    (1) A statement of the name of the person, group, or other 
organization for whom the work is to be performed; the type of work to 
be performed; and the proposed hours of work and approximate dates of 
employment;
    (2) The employee's certification that the outside employment will 
not depend in any way on information obtained as a result of the 
employee's official Government position;
    (3) The employee's certification that no official duty time or 
Government property, resources, or facilities not available to the 
general public will be used in connection with the outside employment;
    (4) The employee's certification that he or she has read, is 
familiar with, and will abide by the restrictions contained in all 
applicable Federal laws and regulations, including those found in 18 
U.S.C. chapter 11 and those found or referenced in subpart H (``Outside 
Activities'') of 5 CFR part 2635 (Standards of Ethical Conduct for 
Employees of the Executive Branch); and
    (5) The written approval of the employee's immediate supervisor.
    (b) Approval shall be granted only upon a determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation.
    (c) For purposes of this section, ``employment'' means any form of 
non-Federal employment, business relationship or activity involving the 
provision of personal services by the employee, whether or not for 
compensation. It includes but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee, teacher or speaker. It includes writing when 
done under an arrangement with another person for production or 
publication of the written product. Prior approval is not required, 
however, to participate in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service, or civic organization, unless such activities involve 
the provision of professional services or advice or are for compensation 
other than reimbursement for expenses.

[[Page 741]]



            CHAPTER XLI--COMMODITY FUTURES TRADING COMMISSION




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Part                                                                Page
5101            Supplemental standards of ethical conduct 
                    for employees of the Commodity Futures 
                    Trading Commission......................         743

[[Page 743]]



PART 5101_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

COMMODITY FUTURES TRADING COMMISSION--Table of Contents




Sec.
5101.101 General.
5101.102 Prohibited financial interests and transactions.
5101.103 Outside employment and activities.

    Authority: 5 U.S.C. 7301, 7353; 5 U.S.C. App. (Ethics in Government 
Act of 1978); 7 U.S.C. 4a(f) and (j); E.O. 12674, 54 FR 15159, 3 CFR, 
1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 
Comp., p. 306; 5 CFR 2635.105, 2635.403(a), 2635.802(a), 2635.803.

    Source: 58 FR 52638, Oct. 12, 1993, unless otherwise noted.



Sec. 5101.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to members and other employees of the Commodity Futures Trading 
Commission and supplement the Standards of Ethical Conduct for Employees 
of the Executive Branch contained in 5 CFR part 2635. Members and other 
employees are required to comply with 5 CFR part 2635 and this part. 
Commission members and other employees are also subject to the 
Regulation Concerning Conduct of Members and Employees and Former 
Members and Employees of the Commission at 17 CFR part 140.



Sec. 5101.102  Prohibited financial interests and transactions.

    In accordance with 5 CFR 2635.403(a), no Commission member or other 
employee shall engage in business or financial transactions, or hold 
business or financial interests, prohibited by the Commodity Exchange 
Act, as set forth in 17 CFR 140.735-2.



Sec. 5101.103  Outside employment and activities.

    (a) Subject to the restrictions and requirements contained in 5 CFR 
part 2635 and this part, Commission members and other employees are 
encouraged to engage in teaching, speaking, and writing activities and, 
when qualified, to participate without compensation in programs to 
provide legal assistance and representation to indigents.
    (b) Prohibitions. A Commission member or other employee shall not 
engage in non-Federal employment or any other outside activity that:
    (1) Involves the rendering of advice concerning any legal, 
accounting or economic matter, or any agricultural, mining, foreign 
currency market or other commodity-related matter, in which the 
Commission may be significantly interested, except that this prohibition 
shall not apply to a special Government employee unless the special 
Government employee:
    (i) Has participated personally and substantially as an employee or 
special Government employee in the same matter; or
    (ii) Has served with the Commission 60 days or more during the 
immediately preceding period of 365 consecutive days.
    (2) Involves an appearance in court or on a brief in a 
representative capacity in relation to any matter which relates to any 
policy, program or operation of the Commission; or
    (3) Is prohibited by section 2(a)(7) of the Commodity Exchange Act, 
as incorporated in 17 CFR 140.735-2 and 140.735-3. That statute provides 
that no Commission member or employee shall accept employment or 
compensation from any person, exchange or clearinghouse subject to 
regulation by the Commission, or participate, directly or indirectly, in 
any contract market operations or transactions of a character subject to 
regulation by the Commission.
    (c) Prior approval for outside employment. (1) Before engaging in 
any outside employment, with or without compensation, an employee of the 
Commission, other than a special Government employee, must obtain 
written approval from his or her division or office head and the 
Executive Director, who may seek the concurrence of the General Counsel.
    (2) In addition to the approval under paragraph (c)(1) of this 
section, an employee, including a special Government employee, must 
obtain written approval from the Commission to appear in court or on a 
brief in a representative capacity.
    (3) Approval shall be granted only upon a determination that the 
outside

[[Page 744]]

employment is not expected to involve conduct prohibited by statute or 
Federal regulation, including 5 CFR part 2635 and this part.
    (4) The approval required by paragraph (c)(1) or (c)(2) of this 
section shall be requested in writing in advance of engaging in outside 
employment. The request shall be submitted to the employee's division or 
office head, through the employee's immediate supervisor, and shall set 
forth all pertinent facts regarding the anticipated employment, 
including the name of the employer, the nature of the work to be 
performed, its estimated duration and the amount of compensation to be 
received. If approved by the division or office head, the request shall 
be forwarded by the division or office head to the Executive Director. 
In granting or denying approval, the Executive Director may seek the 
concurrence of the General Counsel. If approved by the Executive 
Director, a request for permission to appear in court or on a brief in a 
representational capacity shall be forwarded to the Commission for final 
decision.
    (5) For purposes of this section, ``employment'' means any form of 
non-Federal employment or business relationship involving the provision 
of personal services by the employee. It includes, but is not limited to 
personal services as an officer, director, employee, agent, attorney, 
consultant, contractor, general partner, trustee, teacher or speaker. It 
includes writing when done under an arrangement with another person for 
production or publication of the written product. It does not, however, 
include participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service, or civic organization, unless such activities involve 
the provision of professional services or advice or are for compensation 
other than reimbursement of expenses.

[[Page 745]]



                    CHAPTER XLII--DEPARTMENT OF LABOR




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Part                                                                Page
5201            Supplemental standards of ethical conduct 
                    for employees of the Department of Labor         747

[[Page 747]]



PART 5201_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF LABOR--Table of Contents




Sec.
5201.101 General.
5201.102 Designation of separate agency components.
5201.103 Fundraising activities.
5201.104 Additional rules for Office of the Inspector General employees.
5201.105 Additional rules for Mine Safety and Health Administration 
          employees.

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 
2635.105, 2635.203(a), 2635.403(a), 2635.803.

    Source: 61 FR 57284, Nov. 6, 1996, unless otherwise noted.



Sec. 5201.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Labor (Department) and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635.



Sec. 5201.102  Designation of separate agency components.

    (a) Separate agency components of the Department of Labor. Pursuant 
to 5 CFR 2635.203(a), each of the ten components of the Department 
listed below is designated as an agency separate from each of the other 
nine listed components and, for employees of that component, as an 
agency distinct from the remainder of the Department. However, the 
components listed below are not deemed to be separate agencies for 
purposes of applying any provision of 5 CFR part 2635 or this part to 
employees of the remainder of the Department:
    (1) Benefits Review Board;
    (2) Employees Compensation Appeals Board;
    (3) Mine Safety and Health Administration (MSHA);
    (4) Veterans' Employment and Training Service;
    (5) Occupational Safety and Health Administration (OSHA);
    (6) Employee Benefits Security Administration (EBSA);
    (7) Bureau of International Labor Affairs;
    (8) Bureau of Labor Statistics;
    (9) Employment and Training Administration (ETA); and
    (10) Employment Standards Administration (ESA).
    (b) Separate agency subcomponents of ESA. Pursuant to 5 CFR 
2635.203(a), each of the four subcomponents of the Employment Standards 
Administration (ESA) listed in this paragraph is designated as an agency 
separate from each of the other three listed components and, for 
employees of that subcomponent, as an agency distinct from the remainder 
of ESA. However, the components listed in this paragraph are not deemed 
to be separate agencies for purposes of applying any provision of 5 CFR 
part 2635 or this part to employees of the remainder of ESA:
    (1) Wage and Hour Division;
    (2) Office of Federal Contract Compliance Programs;
    (3) Office of Workers Compensation Programs; and
    (4) Office of Labor-Management Standards.
    (c) Definitions--(1) Remainder of the Department means employees in 
the Office of the Secretary and any other employee of the Department not 
in one of the 10 components designated as separate agencies in paragraph 
(a) of this section.
    (2) Remainder of ESA means employees in the Office of the Assistant 
Secretary for Employment Standards and any other ESA employee not in one 
of the four subcomponents designated as separate agencies in paragraph 
(b) of this section.
    (d) Applicability of separate agency designations. The designations 
in paragraphs (a) and (b) of this section identify an employee's 
``agency'' for purposes of:
    (1) Determining when a person is a prohibited source within the 
meaning of 5 CFR 2635.203(d) for purposes of applying the regulations at 
subpart B of 5 CFR part 2635 governing gifts from outside sources;
    (2) Determining whether teaching, speaking or writing relates to the 
employee's official duties within the meaning of 5 CFR 
2635.807(a)(2)(i); and

[[Page 748]]

    (3) Determining when a person is a prohibited source for purposes of 
applying the regulations at 5 CFR 2635.808(c) governing fundraising in a 
personal capacity.

    Example 1: An employee of the Mine Safety and Health Administration 
attends a Saturday football game together with an employee of the Office 
of the Solicitor. By coincidence, they are seated next to a contract 
consultant to the Employment and Training Administration. They talk 
about the game and describe their jobs and personal interests to their 
new seat-mate. The consultant states that he and his wife will not be 
able to attend next week's game and would like to give their very 
expensive tickets to people who will really enjoy them. The MSHA 
employee may accept the ticket. MSHA is designated as a separate agency 
under Sec. 5201.102, and the ETA contractor is not a prohibited source 
of gifts for MSHA employees. The contractor is not regulated by and has 
no business dealings with MSHA. The Solicitor's Office employee may not 
accept the gift. The ETA contractor is a prohibited source for 
Solicitor's Office employees because the Solicitor's Office is a part of 
the ``Remainder of the Department of Labor.'' Any source which is 
prohibited for any component of the Department of Labor is a prohibited 
source for employees in the ``Remainder.''

[61 FR 57284, Nov. 6, 1996, as amended at 68 FR 16398, Apr. 3, 2003]



Sec. 5201.103  Fundraising activities.

    Notwithstanding 5 CFR 2635.808(c)(1)(i), an employee of any separate 
agency component listed in this section may, in a personal capacity, 
personally solicit funds from a person who is a prohibited source if 
person is a prohibited source for employees of the component only under 
5 CFR 2635.203(d)(3) because the person conducts activities regulated by 
the component:
    (a) The Wage and Hour Division;
    (b) The Office of Federal Contract Compliance Programs;
    (c) The Remainder of the Employment Standards Administration, as 
defined in Sec. 5201.102(c);
    (d) Occupational Safety and Health Administration;
    (e) Employee Benefits Security Administration;
    (f) Veterans' Employment and Training Service; and
    (g) The Remainder of the Department of Labor, as defined in Sec. 
5201.102(c).

    Example 1: A training official in the Mine Safety and Health 
Administration is president of the local branch of her college alumni 
association. The association is seeking used computers from local 
businesses to upgrade the college's language lab. The employee may not 
seek a contribution from the vice president of a mining company which is 
regulated by MSHA. Even though the mining company is not currently under 
investigation, it is a prohibited source for the employment because it 
is subject to MSHA regulation and MSHA is not one of the agency 
components designated as separate for the purpose of fundraising in a 
personal capacity.
    Example 2: A typist in the Employee Benefits Security Administration 
raises money for a local homeless shelter during his off-duty hours. He 
may seek a contribution from a firm that is regulated by EBSA under the 
Employee Retirement Income Security Act but may not seek contributions 
from one that he knows is currently under investigation for a violation 
of the Act. While firms regulated by an agency would ordinarily be 
prohibited sources for purposes of an employee's fundraising in a 
personal capacity, Sec. 5201.103 provides that employees of EBSA and 
the other separate agency components listed in that section may seek 
charitable contributions from an entity that is a prohibited source only 
because its activities are subject to regulation by that separate agency 
component. On the other hand, the employee may not engage in fundraising 
from a person who he knows is a prohibited source for any other reason, 
such as an ongoing enforcement action.
    Example 3: An employee of the Employment and Training Administration 
may seek charitable contributions from a firm currently under 
investigation by the Occupational Safety and Health Administration 
(OSHA). ETA does not regulate this firm and has had no dealings or 
business with it of any kind. Since ETA has been designated as a 
separate agency under Sec. 5201.102, ETA employees need only consider 
their own official duties and activities and those of ETA in determining 
whether a person is a prohibited source for purposes of their 
fundraising in a personal capacity. The fact that a person may be a 
prohibited source of direct and indirect gifts for OSHA employees is not 
relevant in this instance.

[61 FR 57284, Nov. 6, 1996, as amended at 68 FR 16398, Apr. 3, 2003]



Sec. 5201.104  Additional rules for Office of the Inspector General employees.

    The rules in this section apply to employees of the Office of the 
Inspector General (OIG) and are in addition to Sec. Sec. 5201.101, 
5201.102, and 5201.103.

[[Page 749]]

    (a) Prior approval for outside employment. (1) Before engaging in 
any outside employment, an OIG employee must obtain the written approval 
of the Inspector General or the Inspector General's designee.
    (2) Submission of requests for approval. (i) Requests for approval 
shall be submitted in writing to the Inspector General or the Inspector 
General's designee. Such requests shall include, at a minimum, the 
following:
    (A) The employee's name and position title;
    (B) The name and address of the person, group, or organization for 
whom the employee proposes to engage in outside employment; and
    (C) A description of the proposed outside employment, including the 
duties and services to be performed while engaged in the outside 
employment, and the approximate dates of the outside employment.
    (ii) Together with the employee's request for approval, the employee 
shall provide a certification that:
    (A) The outside employment will not depend in any way on nonpublic 
information, as defined at 5 CFR 2635.703(b);
    (B) No official duty time or Government property, resources, or 
facilities not available to the general public will be used in 
connection with the outside employment; and
    (C) The employee has read and is familiar with the Standards of 
Ethical Conduct for Employees of the Executive Branch (5 CFR part 2635), 
including subpart H. (``Outside Activities''), and the Department's 
supplemental standards of ethical conduct set forth in this part.
    (iii) Upon a significant change in the nature or scope of the 
outside employment or in the employee's official position, the employee 
shall submit a revised request for approval.
    (3) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment is not expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635 and this part.
    (4) Definitions. For purposes of this section, ``employment'' means 
any form of non-Federal employment or any business relationship 
involving the provision of personal services by the employee. It 
includes but is not limited to personal services as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, or trustee.



Sec. 5201.105  Additional rules for Mine Safety and Health Administration employees.

    The rules in this section apply to employees of the Mine Safety and 
Health Administration (MSHA) and are in addition to Sec. Sec. 5201.101, 
5201.102, and 5201.103.
    (a) Prohibited financial interests. Employees in the MSHA and their 
spouses and minor children are prohibited from having any financial 
interests (including compensated employment) in any company or other 
person engaged in mining activities subject to the Federal Mine Safety 
and Health Act of 1977 (Mine Safety and Health Act), 30 U.S.C. 801 et 
seq. A company or other person shall be deemed to be engaged in such 
mining activities if it owns 50 percent or more of the voting securities 
of another company or other person engaged in such mining activities. A 
company or other person shall not be deemed to be engaged in such mining 
activities solely because it is controlled by a company or other person 
which does engage in such activities.
    (b) Exceptions. (1) Nothing in this section prohibits an employee or 
the spouse or minor child of an employee from acquiring, owning or 
controlling an interest in a publicly traded or publicly available 
investment fund provided that, upon initial or subsequent investment by 
the employee (excluding ordinary dividend reinvestment), the fund does 
not have invested, or does not indicate in its prospectus the intent to 
invest, more than 30 percent of its assets in the securities of a 
company or other person engaged in mining activities subject to the Mine 
Safety and Health Act, and the employee, spouse, or minor child neither 
exercises control nor has the ability to exercise control over the 
financial interests held in the fund.
    (2) Nothing in this section prohibits an employee or the spouse or 
minor

[[Page 750]]

child of an employee from having a financial interest in a pension 
administered by, or which invests in, a company or other person engaged 
in mining activities subject to the Mine Safety and Health Act.

    Example: A mine inspector who was a former employee of mining 
company X could continue to participate in mine company X's pension plan 
without violating this section. However, he would have to disclose the 
interest on his financial disclosure report. Additionally, the inspector 
should not inspect or otherwise take official action on a matter 
affecting mine company X without checking with his ethics advisor to 
ensure that performance of his official duties would not violate the 
conflict of interest statute (18 U.S.C. 208) or any other ethics 
provisions.

    (c) Waiver. (1) The Assistant Secretary of labor for Mine Safety and 
Health or the Assistant Secretary's designee may grant an employee a 
written waiver from the prohibitions contained in paragraph (a) of this 
section, based on a determination that the waiver is not inconsistent 
with 5 CFR part 2635 or otherwise prohibited by law and that, under the 
particular circumstances, application of the prohibition is not 
necessary to avoid the appearance of misuse of position or loss of 
impartiality, or to ensure confidence in the impartiality and 
objectivity with which Mine Safety and Health Administration programs 
are administered.
    (2) The Assistant Secretary or the designee shall grant a waiver 
from the prohibitions in paragraph (a) of this section regarding spouses 
and minor children unless the Assistant Secretary or the designee 
determines that the covered relationship or interest is likely to be 
inconsistent with 5 CFR part 2635 or is otherwise prohibited by law.
    (3) A waiver under this section may be accompanied by appropriate 
conditions, such as requiring execution of a written statement of 
disqualification. A waiver may be withdrawn if it is later determined 
that such waiver does not meet the requirements for the granting of 
waivers under this paragraph. Notwithstanding the grant of any waiver, a 
covered employee remains subject to the disqualification requirements of 
5 CFR 2635.402 and 2635.502.
    (4) Factors which may be considered in connection with the granting 
or denial of waivers include the nature and extent of the financial 
interest, and the official position and duties of the employee.
    (d) Pre-existing interests. Notwithstanding paragraph (a) of this 
section, an employee of the Mine Safety and Health Administration, and a 
spouse or minor child of such an employee, may retain financial 
interests otherwise prohibited by paragraph (a) of this section which 
were approved in writing under procedures in effect before the effective 
date of this section, unless the approval is withdrawn, subject to the 
standards applicable to the withdrawal of waivers under paragraph (c) of 
this section.

[[Page 751]]



               CHAPTER XLIII--NATIONAL SCIENCE FOUNDATION




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Part                                                                Page
5301            Supplemental standards of ethical conduct 
                    for employees of the National Science 
                    Foundation..............................         753

[[Page 753]]



PART 5301_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NATIONAL SCIENCE FOUNDATION--Table of Contents




Sec.
5301.101 General.
5301.102 Participation in proposals and awards.
5301.103 Outside employment and activities.
5301.104 Participation in NSF-supported conferences.
5301.105 Restrictions applicable to Members of the National Science 
          Board.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 42 U.S.C. 1870(a); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR 1990 Comp., p. 306; 5 
CFR 2635.105, 2635.502, 2635.802(a), 2635.803.

    Source: 61 FR 59818, Nov. 25, 1996, unless otherwise noted.



Sec. 5301.101  General.

    (a) Purpose. In accordance with 5 CFR 2635.105, the regulations in 
this part apply to employees of the National Science Foundation (NSF), 
including Members of the National Science Board. They supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635.
    (b) Definitions. For purposes of this part, unless a provision 
plainly indicates otherwise:
    (1) Award means any grant, contract, cooperative agreement, loan, or 
other arrangement made by the Government.
    (2) Employee has the meaning set forth in 5 CFR 2635.102(h), except 
that, for purposes of this part, it shall not include a special 
Government employee.
    (3) Institution means any university, college, business firm, 
research institute, professional society, or other organization. It 
includes all parts of a university or college, including all 
institutions in a multi-institution State or city system. It includes 
any university consortium or joint corporation, but not the individual 
universities that belong to such a consortium. Those universities shall 
be considered separate institutions for purposes of this part.
    (4) Proposal means an application for an award and includes a bid.



Sec. 5301.102  Participation in proposals and awards.

    (a) Participation in proposals and awards. (1) For the purpose of 
determining whether an employee or a special Government employee, other 
than a Member of the National Science Board, should participate as part 
of his official duties in a proposal or award, the affiliations and 
relationships listed in paragraph (a)(3) of this section shall be 
considered additional ``covered relationships'' for purposes of applying 
5 CFR 2635.502. Except as provided in paragraph (a)(2) of this section, 
they shall be treated as disqualifying to the same extent as the covered 
relationships listed in 5 CFR 2635.502(b)(1).
    (2) Where an affiliation or relationship is listed in paragraph 
(a)(3) of this section as ``automatically disqualifying,'' an employee 
shall not participate in a proposal or award in which the institution or 
other person with whom the employee has a covered relationship is or 
represents a party unless participation is authorized in accordance with 
5 CFR 2635.502(d) by the agency designee, with the concurrence of an 
ethics counselor in the Office of the General Counsel.
    (3) An employee has a covered relationship, within the meaning of 5 
CFR 2635.502(b)(1), with:
    (i) An institution with which the employee is affiliated through:
    (A) Membership on a visiting committee or similar body at the 
institution. The relationship is automatically disqualifying where the 
particular department, school, or faculty that the visiting committee or 
similar body advises originated the proposal or where a proposal from 
the department, school, or faculty formed the basis for the award;
    (B) Current enrollment of the employee or a member of the employee's 
household as a student;
    (C) Receipt and retention of an honorarium or other form of 
compensation, award, or off-duty travel payment from the institution 
within the last twelve months. The relationship is automatically 
disqualifying, unless the payment or award was received before beginning 
Government service; and
    (ii) A person who is an investigator or project director on or who 
otherwise

[[Page 754]]

is identified in a proposal as a party to the proposal or award and with 
whom the employee has:
    (A) A family relationship as sibling, parent, spouse, or child. Any 
such relationship is automatically disqualifying;
    (B) Associated, in the past or currently, as thesis advisor or 
thesis student;
    (C) Collaborated on a project, book, article, report, or paper 
within the last 48 months; or
    (D) Co-edited a journal, compendium, or conference proceedings 
within the last 24 months.
    (b) Reporting involvement of prospective, current, or recent 
employees. (1) When an employee who is participating in a proposal or 
award becomes aware that a prospective, current, or recent NSF employee 
or current National Science Board member is or is likely to become a 
member of the research group or project staff under that proposal or 
award, the employee shall bring that circumstance to the attention of an 
agency designee. For purposes of this paragraph:
    (i) A ``recent NSF employee'' is any former NSF employee who left 
the NSF within the year before submission of the proposal at issue or on 
which the award was based.
    (ii) A ``prospective NSF employee'' is any person being recruited by 
an NSF official for a specific opening and from whom the official has 
received an indication of mutual interest. Such a person is a 
``prospective NSF employee'' even though those recruiting have not 
extended an offer and even though the person might not accept an offer 
if it were extended.
    (2) The agency designee shall review the circumstances to determine 
what action, if any, should be taken to assure that the proposal or 
award is administered impartially and otherwise in compliance with 
applicable laws and regulations, including this part, 5 CFR part 2635, 
18 U.S.C. 207 and 208, and 45 CFR part 680.



Sec. 5301.103  Outside employment and activities.

    (a) Prohibited outside employment and activities. (1) An NSF 
employee may not receive, directly or indirectly, any salary, consulting 
fee, honorarium, or other form of compensation for services, or 
reimbursement of expenses, from an NSF award.
    (2) An NSF employee may not serve as principal investigator or 
project director under an NSF award.
    (3) An NSF employee may not receive, directly or indirectly, any 
honorarium or any other form of compensation, or reimbursement of 
expenses from anyone, other than the United States, for participating in 
an event supported by NSF funds.
    (b) Prior approval of outside employment and activities. (1) An 
employee shall obtain written approval from an agency designee before:
    (i) Engaging in compensated outside employment with any person or 
institution (including any for-profit, non-profit, or governmental 
organization) which does business or may reasonably be expected to do 
business with the NSF. For these purposes, ``employment'' means any form 
of non-Federal employment or business relationship involving the 
provision of personal services by the employee. It includes, but is not 
limited to, personal services as an officer, director, employee, agent, 
attorney, consultant, contractor, general partner, trustee, teacher, or 
speaker. It includes writing when done under an arrangement for 
publication of the written product; or
    (ii) Serving, with or without compensation, on a visiting committee 
with any institution that does business or may reasonably be expected to 
do business with NSF.
    (2) In addition to any prior approval required in paragraph (b)(1) 
of this section, an employee shall obtain prior written approval:
    (i) From an ethics counselor in the Office of the General Counsel 
before participating, with or without compensation, as a policymaking 
officer of any research or educational institution or any scientific 
society or professional association; and
    (ii) From his Assistant Director or Office head before serving in a 
personal capacity as an organizer, director, proceedings editor, or 
session chairperson for a conference, workshop, or similar

[[Page 755]]

event supported by NSF funds, or before presenting a paper at such an 
event.
    (3) The approvals required by paragraphs (b)(1) and (b)(2) of this 
section shall be granted only upon a determination by the appropriate 
NSF official that the outside employment or activity is not expected to 
involve conduct prohibited by statute or Federal regulations, including 
5 CFR part 2635 and this part.



Sec. 5301.104  Participation in NSF-supported conferences.

    An NSF employee may participate in conferences, workshops, and 
similar events supported by NSF funds provided that:
    (a) Where the employee's participation is undertaken in a personal 
capacity, his participation does not violate the restrictions on outside 
employment and activities of Sec. 5301.103(a), and the approval 
requirements of Sec. 5301.103(b) have been met.
    (b) Where the employee's participation is undertaken as part of his 
official duties as an NSF employee:
    (1) The employee shall obtain prior written approval from his 
Assistant Director or Office head before serving as an organizer, 
director, proceedings editor, or session chairperson for a conference, 
workshop, or similar event sponsored by NSF funds, or before presenting 
a paper at such an event. However, prior approval is not required where 
the primary purpose of the event is to plan, assess, or publicize NSF 
programs or needs, or where the subject of the paper or session to be 
presented focuses on NSF programs or needs.
    (2) The approval required by paragraph (b)(1) of this section shall 
be granted only upon a determination that the importance of the 
employee's participation outweighs any appearance of use of official 
position to enhance his personal credentials.



Sec. 5301.105  Restrictions applicable to Members of the National Science Board.

    (a) Participation in proposals and awards. (1) For the purpose of 
determining whether a Member of the National Science Board (Board) 
should participate as part of his official duties in a proposal or award 
coming before the Board or any of its committees, the affiliations and 
relationships listed in paragraph (a)(3) of this section shall be 
considered ``covered relationships'' for purposes of applying 5 CFR 
2635.502. Except as provided in paragraph (a)(2) of this section, they 
shall be treated as disqualifying to the same extent as the covered 
relationships listed in 5 CFR 2635.502(b)(1).
    (2) Where an affiliation or relationship is listed in paragraph 
(a)(3) of this section as ``automatically disqualifying,'' a Member of 
the National Science Board shall not participate in a proposal or award 
in which the institution or other person with whom the Member has a 
covered relationship is or represents a party, unless participation is 
authorized in accordance with 5 CFR 2635.502(d) by the Chairman of the 
National Science Board or by the Designated Agency Ethics Official.
    (3) A Member of the National Science Board has a covered 
relationship, within the meaning of 5 CFR 2635.502(b)(1), with:
    (i) An institution or other person with which the Member is 
affiliated through:
    (A) Membership on a visiting committee or similar body at the 
institution. The relationship is automatically disqualifying where the 
particular department, school, or faculty that the visiting committee or 
similar body advises originated the proposal or where a proposal from 
the department, school, or faculty formed the basis for the award; or
    (B) Current enrollment of the Member or a member of his household as 
a student; and
    (ii) A person who is an investigator or project director or who is 
otherwise identified in a proposal as a party to the proposal or award 
and with whom the Member has a family relationship as sibling, parent, 
spouse, or child. Any such relationship is automatically disqualifying.
    (b) Outside employment and activities. (1) A Member of the National 
Science Board shall not represent himself, herself, or any other person 
in negotiations or other dealings with an NSF official on any proposal, 
award, or other

[[Page 756]]

particular matter, as defined in 5 CFR 2635.402(b)(3).
    (2) A Member of the National Science Board may not receive 
compensation from any award made while serving on the Board. However, 
unless prohibited by law, an award may be charged, and a Member may be 
reimbursed, for actual expenses incurred by the Member in doing work 
supported by the award. If a Member was an investigator or consultant 
under an award before appointment to the Board, the award may be charged 
and the Member may continue to receive compensation to the extent 
established before the Member's nomination.

[[Page 757]]



          CHAPTER XLV--DEPARTMENT OF HEALTH AND HUMAN SERVICES




  --------------------------------------------------------------------
Part                                                                Page
5501            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Health and Human Services...............         759
5502            Supplemental financial disclosure 
                    requirements for employees of the 
                    Department of Health and Human Services.         774

[[Page 759]]



PART 5501_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF HEALTH AND HUMAN SERVICES--Table of Contents




Sec.
5501.101 General.
5501.102 Designation of HHS components as separate agencies.
5501.103 Gifts from federally recognized Indian tribes or Alaska Native 
          villages or regional or village corporations.
5501.104 Prohibited financial interests applicable to employees of the 
          Food and Drug Administration.
5501.105 Exemption for otherwise disqualifying financial interests 
          derived from Indian or Alaska Native birthrights.
5501.106 Outside employment and other outside activities.
5501.107 Teaching, speaking and writing by special Government employees 
          in the Public Health Service.
5501.108 Exception to the prohibition against assisting in the 
          prosecution of claims against, or acting as an agent or 
          attorney before, the Government, applicable only to employees 
          assigned to federally recognized Indian tribes or Alaska 
          Native villages or regional or village corporations pursuant 
          to the Intergovernmental Personnel Act.
5501.109 Prohibited outside activities applicable to employees of the 
          National Institutes of Health.
5501.110 Prohibited financial interests applicable to senior employees 
          of the National Institutes of Health.
5501.111 Awards tendered to employees of the National Institutes of 
          Health.
5501.112 One-year disqualification of employees of the National 
          Institutes of Health from certain matters involving an award 
          donor.

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 25 U.S.C. 450i(f); 42 U.S.C. 216; E.O. 12674, 
54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 
42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.203, 2635.403, 
2635.802, 2635.803.

    Source: 61 FR 39763, July 30, 1996, unless otherwise noted.



Sec. 5501.101  General.

    (a) Purpose. The regulations in this part apply to employees of the 
Department of Health and Human Services (HHS) and supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635. In addition to 5 CFR part 2635 and this 
part, employees are required to comply with implementing guidance and 
procedures issued by HHS components in accordance with 5 CFR 
2635.105(c). Employees are also subject to the executive branch-wide 
financial disclosure regulations at 5 CFR part 2634, the Employee 
Responsibilities and Conduct regulations at 5 CFR part 735, and the HHS 
regulations regarding conduct at 45 CFR part 73.
    (b) Applicability. The regulations in this part apply to individuals 
who are ``employees'' within the meaning of 5 CFR 2635.102(h). The 
regulations thus apply to special Government employees, except to the 
extent they are specifically excluded from certain provisions, and to 
uniformed service officers in the Public Health Service Commissioned 
Corps on active duty.
    (c) Definitions. Unless a term is otherwise defined in this part, 
the definitions set forth in 5 CFR parts 2635 and 2640 apply to terms in 
this part. In addition, for purposes of this part:
    (1) Federally recognized Indian tribe or Alaska Native village or 
regional or village corporation means any Indian tribe, band, nation, or 
other organized group or community, including any Alaska Native village 
or regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act, 43 U.S.C. 1601 et seq., 
which is recognized as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    (2) Significantly regulated organization means an organization for 
which the sales of products regulated by the Food and Drug 
Administration (FDA) constitute ten percent or more of annual gross 
sales in the organization's previous fiscal year; where an organization 
does not have a record of sales of FDA-regulated products, it will be 
deemed to be significantly regulated if its operations are predominately 
in fields regulated by FDA, or if its research, development, or other 
business activities are reasonably expected to result in the development 
of products that are regulated by FDA.

[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005; 70 
FR 51568, Aug. 31, 2005]

[[Page 760]]



Sec. 5501.102  Designation of HHS components as separate agencies.

    (a) Separate agency components of HHS. Pursuant to 5 CFR 
2635.203(a), each of the twelve components of HHS listed below is 
designated as an agency separate from each of the other eleven listed 
components and, for employees of that component, as an agency distinct 
from the remainder of HHS. However, the components listed below are not 
deemed to be separate agencies for purposes of applying any provision of 
5 CFR part 2635 or this part to employees of the remainder of HHS:
    (1) Administration on Aging;
    (2) Administration for Children and Families:
    (3) Agency for Healthcare Research and Quality;
    (4) Agency for Toxic Substances and Disease Registry;
    (5) Centers for Disease Control and Prevention;
    (6) Centers for Medicare and Medicaid Services;
    (7) Food and Drug Administration;
    (8) Health Resources and Services Administration;
    (9) Indian Health Service;
    (10) National Institutes of Health;
    (11) Program Support Center; and
    (12) Substance Abuse and Mental Health Services Administration.
    (b) Definitions--(1) Employee of a component includes, in addition 
to employees actually within a component, an employee of the Office of 
the General Counsel whose regularly assigned duties and responsibilities 
principally involve the provision of legal services to the relevant 
component with respect to substantive programmatic issues.
    (2) Remainder of HHS means employees in the Office of the Secretary 
and Staff Divisions, employees of the Office of the General Counsel with 
Department-wide responsibility, and any HHS employee not in one of the 
12 components designated as separate agencies in paragraph (a) of this 
section.
    (c) Applicability of separate agency designations. The designations 
in paragraph (a) of this section identify an employee's ``agency'' for 
purposes of:
    (1) Determining when a person is a prohibited source within the 
meaning of 5 CFR 2635.203(d) for purposes of applying:
    (i) The regulations at subpart B of 5 CFR part 2635 governing gifts 
from outside sources; and
    (ii) The regulations at Sec. 5501.106 requiring prior approval of 
outside employment and other outside activities; and
    (iii) The regulations at Sec. 5501.111 governing the receipt of 
awards by employees of the National Institutes of Health; and
    (2) Determining whether teaching, speaking or writing relates to the 
employee's official duties within the meaning of 5 CFR 
2635.807(a)(2)(i).

[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005; 70 
FR 51568, Aug. 31, 2005]



Sec. 5501.103  Gifts from federally recognized Indian tribes or Alaska Native 

villages or regional or village corporations.

    (a) Tribal or Alaska Native gifts. In addition to the gifts which 
come within the exceptions set forth in 5 CFR 2635.204, and subject to 
all provisions of 5 CFR 2635.201 through 2635.205, an employee may 
accept unsolicited gifts of native artwork, crafts, or other items 
representative of traditional native culture from federally recognized 
Indian tribes or Alaska Native villages or regional or village 
corporations, provided that the aggregate market value of individual 
gifts received from any one tribe or village under the authority of this 
paragraph shall not exceed $200 in a calendar year.
    (b) Limitations on use of exception. If the donor is a tribe or 
village that has interests that may be substantially affected by the 
performance or nonperformance of an employee's official duties, the 
employee may accept the gifts authorized by paragraph (a) of this 
section only where there is a written finding by the agency designee 
that acceptance of the gift is in the agency's interest and will not 
violate any of the limitations on the use of exceptions contained in 5 
CFR 2635.202(c).

[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005]

[[Page 761]]



Sec. 5501.104  Prohibited financial interests applicable to employees of the 

Food and Drug Administration.

    (a) General prohibition. Except as permitted by paragraph (b) of 
this section, no employee or spouse or minor child of an employee, other 
than a special Government employee or the spouse or minor child of a 
special Government employee, of the Food and Drug Administration shall 
have a financial interest in a significantly regulated organization.
    (b) Exceptions. Notwithstanding the prohibition in paragraph (a) of 
this section:
    (1) An employee or spouse or minor child of an employee may have a 
financial interest, such as a pension or other employee benefit, arising 
from employment with a significantly regulated organization.

    Note to paragraph (b)(1):
    FDA employees who file public or confidential financial disclosure 
reports pursuant to 5 CFR part 2634, as opposed to spouses and minor 
children of such employees, are generally prohibited under Sec. 
5501.106(c)(3) from engaging in current employment with a significantly 
regulated organization.
    (2) An employee who is not required to file a public or confidential 
financial disclosure report pursuant to 5 CFR part 2634, or the spouse 
or minor child of such employee, may hold a financial interest in a 
significantly regulated organization if:
    (i) The total cost or value, measured at the time of acquisition, of 
the combined interests of the employee and the employee's spouse and 
minor children in the regulated organization is equal to or less than 
the de minimis exemption limit for matters involving parties established 
by 5 CFR 2640.202(a) or $15,000, whichever is greater (the phrase ``time 
of acquisition'' shall mean the date on which the employee actually 
acquired the financial interest--or on which the financial interest 
became imputed to the employee under 18 U.S.C. 208--whether by purchase, 
gift, bequest, marriage, or otherwise, except that with respect to a 
financial interest that was acquired prior to the employee's entrance on 
duty as an employee of the Food and Drug Administration, the ``time of 
acquisition'' shall be deemed to be the date on which the employee 
entered on duty);
    (ii) The holding, if it represents an equity interest, constitutes 
less than 1 percent of the total outstanding equity of the organization; 
and
    (iii) The total holdings in significantly regulated organizations 
account for less than 50 percent of the total value of the combined 
investment portfolios of the employee and the employee's spouse and 
minor children.
    (3) An employee or spouse or minor child of an employee may have an 
interest in a significantly regulated organization that constitutes any 
interest in a publicly traded or publicly available investment fund 
(e.g., a mutual fund), or a widely held pension or similar fund, which, 
in the literature it distributes to prospective and current investors or 
participants, does not indicate the objective or practice of 
concentrating its investments in significantly regulated organizations, 
if the employee neither exercises control nor has the ability to 
exercise control over the financial interests held in the fund.
    (4) In cases involving exceptional circumstances, the Commissioner 
or the Commissioner's designee may grant a written exception to permit 
an employee, or the spouse or minor child of an employee, to hold a 
financial interest in a significantly regulated organization based upon 
a determination that the application of the prohibition in paragraph (a) 
of this section is not necessary to ensure public confidence in the 
impartiality or objectivity with which HHS programs are administered or 
to avoid a violation of part 2635 of this title.

    Note to paragraph (b):
    With respect to any excepted financial interest, employees are 
reminded of their obligations under 5 CFR part 2635, and specifically 
their obligation under subpart D of part 5501 to disqualify themselves 
from participating in any particular matter in which they, their spouses 
or minor children have a financial interest arising from publicly traded 
securities that exceeds the de minimis thresholds specified in the 
regulatory exemption at 5 CFR 2640.202 or from non-publicly traded 
securities that are not covered by the regulatory exemption. 
Furthermore, the agency may prohibit or restrict an individual employee 
from acquiring or holding any financial interest or a class of financial 
interests based on the agency's determination that the interest creates 
a substantial conflict

[[Page 762]]

with the employee's duties, within the meaning of 5 CFR 2635.403.

    (c) Reporting and divestiture. For purposes of determining the 
divestiture period specified in 5 CFR 2635.403(d), as applied to 
financial interests prohibited under paragraph (a) of this section, the 
``date divestiture is first directed'' means the date on which the new 
entrant public or confidential financial disclosure report required by 
part 2634 of this title or any report required by Sec. 5502.106(c) of 
this chapter is due.

[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005]



Sec. 5501.105  Exemption for otherwise disqualifying financial interests 

derived from Indian or Alaska Native birthrights.

    (a) Under 18 U.S.C. 208(b)(4), an employee who otherwise would be 
disqualified may participate in a particular matter where the otherwise 
disqualifying financial interest that would be affected results solely 
from the interest of the employee, or the employee's spouse or minor 
child, in birthrights:
    (1) In an Indian tribe, band, nation, or other organized group or 
community, including any Alaska Native village corporation as defined in 
or established pursuant to the Alaska Native Claims Settlement Act, 
which is recognized as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians;
    (2) In an Indian allotment the title to which is held in trust by 
the United States or which is inalienable by the allottee without the 
consent of the United States; or
    (3) In an Indian claims fund held in trust or administered by the 
United States.
    (b) The exemption described in paragraph (a) of this section applies 
only if the particular matter does not involve the Indian allotment or 
claims fund or the Indian tribe, band, nation, organized group or 
community, or Alaska Native village corporation as a specific party or 
parties.



Sec. 5501.106  Outside employment and other outside activities.

    (a) Applicability. This section does not apply to special Government 
employees.
    (b) Definitions. For purposes of this section:
    (1) Compensation has the meaning set forth in 5 CFR 
2635.807(a)(2)(iii).
    (2) Consultative services means the provision of personal services 
by an employee, including the rendering of advice or consultation, which 
requires advanced knowledge in a field of science or learning 
customarily acquired by a course of specialize instruction and study in 
an institution of higher education, hospital, or other similar facility.
    (3) Professional services means the provision of personal services 
by an employee, including the rendering of advice or consultation, which 
involves the skills of a profession as defined in 5 CFR 2636.305(b)(1).
    (c) Prohibited outside employment and activities--(1) Prohibited 
assistance in the preparation of grant applications or contract 
proposals. An employee shall not provide consultative or professional 
services, for compensation, to or on behalf of any other person to 
prepare, or assist in the preparation of, any grant application, 
contract proposal, program report, or other document intended for 
submission to HHS.
    (2) Prohibited employment in HHS-funded activities. An employee 
shall not, for compensation, engage in employment, as defined in 5 CFR 
2635.603(a), with respect to a particular activity funded by an HHS 
grant, contract, cooperative agreement, cooperative research and 
development agreement, or other funding mechanism authorized by statute.
    (3) Prohibited outside activities applicable to employees of the 
Food and Drug Administration. An employee of the Food and Drug 
Administration who is required to file a public or confidential 
financial disclosure report pursuant to 5 CFR part 2634 shall not:
    (i) Engage in any self-employed business activity for which the sale 
or promotion of FDA-regulated products is expected to constitute ten 
percent or more of annual gross sales or revenues; or

[[Page 763]]

    (ii) Engage in employment, as defined in 5 CFR 2635.603(a), whether 
or not for compensation, with a significantly regulated organization, as 
defined in Sec. 5501.101(c)(2), unless the employment meets either of 
the following exceptions:
    (A) The employment consists of the practice of medicine, dentistry, 
veterinary medicine, pharmacy, nursing, or similar practices, provided 
that the employment does not involve substantial unrelated non-
professional duties, such as personnel management, contracting and 
purchasing responsibilities (other than normal ``out-of-stock'' 
requisitioning), and does not involve employment by a medical product 
manufacturer in the conduct of biomedical research; or
    (B) The employment primarily involves manual or unskilled labor or 
utilizes talents, skills, or interests in areas unrelated to the 
substantive programmatic activities of the FDA, such as clerical work, 
retail sales, service industry jobs, building trades, maintenance, or 
similar services.
    (4) Prohibited outside practice of law applicable to attorneys in 
the Office of the General Counsel. (i) An employee who serves as an 
attorney in or under the supervision of the Office of the General 
Counsel or the Office of Counsel to the Inspector General shall not 
engage in any outside practice of law that might require the attorney 
to:
    (A) Assert a legal position that is or appears to be in conflict 
with the interests of the Department of Health and Human Services, the 
client to which the attorney owes a professional responsibility; or
    (B) Interpret any statute, regulation or rule administered or issued 
by the Department.
    (ii) Exceptions. Nothing in this section prevents an employee from:
    (A) Acting, with or without compensation, as an agent or attorney 
for, or otherwise representing, the employee's parents, spouse, child, 
or any person for whom, or for any estate for which, the employee is 
serving as guardian, executor, administrator, trustee, or other personal 
fiduciary to the extent permitted by 18 U.S.C. 203 and 205, or from 
providing advice or counsel to such persons or estate; or
    (B) Acting, without compensation, as an agent or attorney for, or 
otherwise representing, any person who is the subject of disciplinary, 
loyalty, or other personnel administration proceedings in connection 
with those proceedings to the extent permitted by 18 U.S.C. 205, or from 
providing uncompensated advice or counsel to such person; or
    (C) Giving testimony under oath or from making statements required 
to be made under penalty for perjury or contempt.
    (iii) Specific approval procedures. (A) The exceptions to 18 U.S.C. 
203 and 205 described in paragraph (c)(4)(ii)(A) of this section do not 
apply unless the employee obtained the approval of the Government 
official responsible for the appointment of the employee to a Federal 
position.
    (B) The exception to 18 U.S.C. 205 described in paragraph 
(c)(4)(ii)(B) of this section does not apply unless the employee has 
obtained the approval of a supervisory official who has authority to 
determine whether the employee's proposed representation of another 
person in a personnel administration matter is consistent with the 
faithful performance of the employee's duties.
    (d) Prior approval for outside employment and other outside 
activities--(1) General approval requirement. Except as provided in 
paragraph (d)(3) of this section, an employee shall obtain written 
approval prior to engaging, with or without compensation, in outside 
employment, including self-employed business activities, or other 
outside activities in which the employee seeks to:
    (i) Provide consultative or professional services, including service 
as an expert witness;
    (ii) Engage in teaching, speaking, writing, or editing that:
    (A) Relates to the employee's official duties within the meaning of 
5 CFR 2635.807(a)(2)(i)(B) through (E); or
    (B) Would be undertaken as a result of an invitation to engage in 
the activity that was extended to the employee by a person or 
organization that is a prohibited source within the meaning of 5 CFR 
2635.203(d), as modified by the separate HHS component agency 
designations in Sec. 5501.102; or

[[Page 764]]

    (iii) Provide services to a non-Federal entity as an officer, 
director, or board member, or as a member of a group, such as a planning 
commission, advisory council, editorial board, or scientific or 
technical advisory board or panel, which requires the provision of 
advice, counsel, or consultation.
    (2) Additional approval requirement for employees of the Food and 
Drug Administration and the National Institutes of Health. In addition 
to the general approval requirements set forth in paragraph (d)(1) of 
this section, an employee of the Food and Drug Administration or the 
National Institutes of Health shall obtain written approval prior to 
engaging, with or without compensation, in any outside employment, as 
defined in 5 CFR 2635.603(a), with, or any self-employed business 
activity involving the sale or promotion of products or services of, any 
person or organization that is a prohibited source of the employee's 
component agency.
    (3) Exceptions to prior approval requirements. (i) Notwithstanding 
the requirements of paragraphs (d)(1) and (d)(2) of this section, prior 
approval is not required for participation in the activities of a 
political, religious, social, fraternal, or recreational organization 
unless:
    (A) The activity or the position held in the organization requires 
the provision of professional services within the meaning of paragraph 
(b)(3) of this section; or
    (B) The activity is performed for compensation other than the 
reimbursement of expenses.
    (ii) Notwithstanding the requirements of paragraphs (d)(1) and 
(d)(2) of this section, prior approval is not required for participation 
in an employment or other outside activity that has been exempted under 
paragraph (d)(7) of this section.
    (4) Submission of requests for approval. (i) An employee seeking to 
engage in any of the activities for which advance approval is required 
shall make a written request for approval a reasonable time before 
beginning the activity. This request shall be directed to the employee's 
supervisor. The supervisor shall submit the request and a statement 
addressing the extent to which the employee's duties are related to the 
proposed outside activity to an agency designee, who shall make a final 
determination with respect to the request.
    (ii) All requests for prior approval shall include the following 
information:
    (A) The employee's name, contact information, organizational 
location, occupational title, grade, step, salary, appointment type, and 
financial disclosure filing status;
    (B) The nature of the proposed outside employment or other outside 
activity, including a full description of the specific duties or 
services to be performed;
    (C) A description of the employee's official duties that relate to 
the proposed activity;
    (D) A description of how the employee's official duties will affect 
the interests of the person for whom or organization with which the 
proposed activity will be performed;
    (E) The name and address of the person for whom or organization with 
which the work or activity will be done, including the location where 
the services will be performed;
    (F) A statement as to whether travel is involved and, if so, whether 
the transportation, lodging, meals, or per diem will be at the 
employee's expense or provided by the person for whom or organization 
with which the work or activity will be done, and a description of the 
arrangements and an estimate of the costs of items to be furnished or 
reimbursed by the outside entity;
    (G) The estimated total time that will be devoted to the activity. 
If the proposed outside activity is to be performed on a continuing 
basis, a statement of the estimated number of hours per year; for other 
employment, a statement of the anticipated beginning and ending date;
    (H) A statement as to whether the work can be performed entirely 
outside of the employee's regular duty hours and, if not, the estimated 
number of hours and type of leave that will be required;
    (I) The method or basis of any compensation to be received (e.g., 
fee, honorarium, retainer, salary, advance, royalty, stock, stock 
options, non-travel

[[Page 765]]

related expenses, or other form of remuneration tendered in cash or in-
kind in connection with the proposed activity) from the person for whom 
or organization with which the work or activity will be done;
    (J) The amount of any compensation to be received from the person 
for whom or organization with which the work or activity will be done;
    (K) The amount and date of any compensation received, or due for 
services performed, within the current and previous six calendar years 
immediately preceding the submission of the request for approval from 
the person for whom or organization with which the work or activity will 
be done (including any amount received or due from an agent, affiliate, 
parent, subsidiary, or predecessor of the proposed payor);
    (L) A statement as to whether the compensation is derived from an 
HHS grant, contract, cooperative agreement, or other source of HHS 
funding or attributed to services related to an activity funded by HHS, 
regardless of the specific source of the compensation;
    (M) For activities involving the provision of consultative or 
professional services, a statement indicating whether the client, 
employer, or other person on whose behalf the services are performed is 
receiving, or intends to seek, an HHS grant, contract, cooperative 
agreement, or other funding relationship;
    (N) For activities involving teaching, speaking, or writing, a 
syllabus, outline, summary, synopsis, draft or similar description of 
the content and subject matter involved in the course, speech, or 
written product (including, if available, a copy of the text of any 
speech) and the proposed text of any disclaimer required by 5 CFR 
2635.807(b)(2) or by the instructions or manual issuances authorized 
under paragraph (d)(6) of this section; and
    (O) Such other relevant information that the designated agency 
ethics official or, with the concurrence of the designated agency ethics 
official, each of the separate agency components of HHS listed in Sec. 
5501.102(a) determines is necessary or appropriate in order to evaluate 
whether a proposed activity is likely to involve conduct prohibited by 
statute or Federal regulations, including 5 CFR part 2635 and this part.
    (5) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment or other outside activity is 
not expected to involve conduct prohibited by statute or Federal 
regulation, including 5 CFR part 2635 and this part.

    Note: The granting of approval for an outside activity does not 
relieve the employee of the obligation to abide by all applicable laws 
governing employee conduct nor does approval constitute a sanction of 
any violation. Approval involves an assessment that the general activity 
as described on the submission does not appear likely to violate any 
criminal statutes or other ethics rules. Employees are reminded that 
during the course of an otherwise approvable activity, situations may 
arise, or actions may be contemplated, that, nevertheless, pose ethical 
concerns.
    Example 1: A clerical employee with a degree in library science 
volunteers to work on the acquisitions committee at a local public 
library. Serving on a panel that renders advice to a non-Federal entity 
is subject to prior approval. Because recommending books for the library 
collection normally would not pose a conflict with the typing duties 
assigned the employee, the request would be approved.
    Example 2: While serving on the library acquisitions committee, the 
clerical employee in the preceding example is asked to help the library 
business office locate a missing book order. Shipment of the order is 
delayed because the publisher has declared bankruptcy and its assets, 
including inventory in the warehouse, have been frozen to satisfy the 
claims of the Internal Revenue Service and other creditors. The employee 
may not contact the Federal bankruptcy trustee to seek, on behalf of the 
public library, the release of the books. Even though the employee's 
service on the acquisitions committee had been approved, a criminal 
statute, 18 U.S.C. 205, would preclude any representation by a Federal 
employee of an outside entity before a Federal court or agency with 
respect to a matter in which the United States is a party or has a 
direct and substantial interest.

    (6) Duration of approval. Approval shall be effective for a period 
not to exceed one year from the date of approval. Upon a significant 
change in the nature of the outside activity or in the employee's 
official position or duties, the employee shall submit a revised request 
for approval using the procedure in paragraph (d)(4) of this

[[Page 766]]

section. If the outside activity is anticipated to exceed one year from 
the date of the most recent approval, the employee shall renew the 
request for approval no later than thirty days prior to the expiration 
of the period authorized.
    (7) Responsibilities of the designated agency ethics official and 
component agencies. (i) The designated agency ethics official or, with 
the concurrence of the designated agency ethics official, each of the 
separate agency components of HHS listed in Sec. 5501.102 may issue an 
instruction or manual issuance exempting categories of employment or 
other outside activities from a requirement of prior written approval 
based on a determination that the employment or activities within those 
categories would generally be approved and are not likely to involve 
conduct prohibited by statute or Federal regulations, including 5 CFR 
part 2635 and this part.
    (ii) HHS components may specify internal procedures governing the 
submission of prior approval requests and designate appropriate 
officials to act on such requests. The instructions or manual issuances 
may include examples of outside employment and other outside activities 
that are permissible or impermissible consistent with 5 CFR part 2635 
and this part. With respect to teaching, speaking, writing, or editing 
activities, the instructions or manual issuances may specify 
preclearance procedures and/or require disclaimers indicating that the 
views expressed do not necessarily represent the views of the agency or 
the United States.
    (iii) The officials within the respective HHS components who are 
responsible for the administrative aspects of these regulations and the 
maintenance of records shall make provisions for the filing and 
retention of requests for approval of outside employment and other 
outside activities and copies of the notification of approval or 
disapproval.
    (e) Waivers. The designated agency ethics official may grant a 
written waiver, for an individual or class of similarly situated 
individuals, from any prohibited outside activity provision in this 
section or in Sec. 5501.109 based on a determination that the waiver is 
not inconsistent with part 2635 of this title or otherwise prohibited by 
law and that, under the particular circumstances, application of the 
prohibition is not necessary to avoid the appearance of misuse of 
position or loss of impartiality or otherwise to ensure confidence in 
the impartiality and objectivity with which agency programs are 
administered. An individual or class waiver under this paragraph may 
impose appropriate conditions, such as requiring execution of a written 
disqualification.

[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005; 70 
FR 51568, Aug. 31, 2005]



Sec. 5501.107  Teaching, speaking and writing by special Government employees 

in the Public Health Service.

    (a) Applicability. This section applies to special Government 
employees in the Public Health Service who otherwise are prohibited from 
accepting compensation for teaching, speaking or writing that is related 
to their official duties, within the meaning of 5 CFR 
2635.807(a)(2)(i)(C), because the invitation or the offer of 
compensation for the activity was extended at a time when the special 
Government employee was assigned to perform official duties that may 
substantially affect the interests of the inviter or offeror.
    (b) Permissible compensation. A special Government employee may 
accept compensation for teaching, speaking or writing in circumstances 
described in paragraph (a) of this section only where the special 
Government employee recuses from the official assignment that may 
substantially affect the interests of the person who extended the 
invitation to engage in the activity or the offer of compensation.



Sec. 5501.108  Exception to the prohibition against assisting in the 

prosecution of claims against, or acting as an agent or attorney before, the 

Government, applicable only to employees assigned to federally recognized 

Indian tribes or Alaska Native villages or regional or village 

corporations pursuant to the Intergovernmental Personnel Act.

    (a) 18 U.S.C. 205. Section 205 of title 18 of the United States Code 
prohibits an

[[Page 767]]

employee, whether or not for compensation, from acting as an agent or 
attorney for anyone in a claim against the United States, or from acting 
in such capacity on behalf of another before any department, agency, or 
other specified entity, in any particular matter in which the United 
States is a party or has a direct and substantial interest.
    (b) Exception applicable only to employees assigned to federally 
recognized Indian tribes or Alaska Native villages or regional or 
village corporations pursuant to the Intergovernmental Personnel Act. 
Notwithstanding the provisions of 18 U.S.C. 205, the Indian Self-
Determination Act (25 U.S.C. 450i(f)) authorizes Federal employees 
detailed or assigned to Indian tribes or Alaska Native villages or 
regional or village corporations, pursuant to the Intergovernmental 
Personnel Act (5 U.S.C. 3372), to act as agents or attorneys for, or 
appear on behalf of, such tribes or Alaska Native villages or 
corporations in connection with any matter pending before any 
department, agency, court, or commission, in which the United States is 
a party or has a direct and substantial interest. Such employees must 
advise, in writing, the head of the agency, with which they are dealing 
on behalf of an Indian tribe or Alaska Native village or corporation, of 
any personal and substantial involvement they may have had as an officer 
or employee of the United States in connection with the matter 
concerned.



Sec. 5501.109  Prohibited outside activities applicable to employees of the 

National Institutes of Health.

    (a) Applicability. This section does not apply to special Government 
employees.
    (b) Definitions. For purposes of this section:
    (1) Compensation has the meaning set forth in 5 CFR 
2635.807(a)(2)(iii).
    (2) Continuing professional education means a course, a program, a 
series of courses or programs, or other educational activity provided to 
members of a profession, as defined in 5 CFR 2636.305(b)(1), or academic 
discipline and designed principally to maintain or advance the skills 
and competence of practitioners in a field of specialized knowledge and 
to expand an appreciation and understanding of the professional 
responsibilities, fiduciary obligations, or ethical aspirations 
incumbent upon members of the group. For those members of a profession 
or academic discipline that does not subject its members to licensure or 
continuing education requirements, the term continuing professional 
education includes those educational activities that exemplify a purpose 
and content similar to those offered to or required of members of a 
licensed profession.
    (3) Data and safety monitoring board (DSMB) means a board, 
committee, or panel constituted in connection with an ongoing clinical 
study and comprised of individuals, other than the study sponsors, 
organizers, and investigators, who possess expertise in relevant 
specialties and disciplines, such as trial design, biostatistics, and 
bioethics, and who review accumulating safety and outcome data in order 
to ensure the continuing safety of the participating human subjects and 
of those yet to be recruited, and to assess the continuing validity and 
scientific merit of the investigation.
    (4) Educational activity provider means a supported research 
institution or a health care provider or insurer that presents Grand 
Rounds or offers accredited continuing professional education (or, in 
the case of a profession or academic discipline whose members are not 
subject to licensure and which does not have program accreditation 
requirements, an education program determined by the designated agency 
ethics official or his designee or, in consultation with the designated 
agency ethics official or his designee, the NIH Director or the NIH 
Director's designee to be substantially equivalent to an accredited 
continuing professional education program), but does not include a 
substantially affected organization.
    (5) Employment has the meaning specified in 5 CFR 2635.603(a).
    (6) Grand rounds means a regularly scheduled, interactive 
presentation or series of educational seminars that focus on clinical 
cases, recent biomedical or behavioral research results, or a review of 
scientific research methods and findings in a specific field, with 
supporting basic and clinical science

[[Page 768]]

information, that are conducted in an accredited medical school or an 
affiliated teaching hospital setting that provides practicing 
physicians, faculty, fellows, resident physician trainees, medical 
students, graduate students, and post-doctoral fellows, as well as 
allied and associated health professionals, and other staff, an 
opportunity to evaluate outcomes of patient treatment decisions, a forum 
to discuss clinical decision making, and a means to impart updates in 
diagnosis, treatment, therapy, and research as indicated by the context 
of the cases presented.
    (7) Grant or scientific review committee means a board, committee, 
or panel of qualified experts assembled by an external grant-making 
entity or other funding institution for the purpose of making a funding 
decision, the members of which review, evaluate, rate, rank, or 
otherwise assess a proposed or ongoing project or program for which 
grant support is sought on the basis of various factors, such as 
scientific merit, feasibility, significance, approach, and originality 
(and scientific progress in any previous period of funding), and gauge 
the ability of the applicant(s), principal and associate investigators, 
and scientific team members to complete successfully the project or 
program, and then recommend to the grantor whether to fund or continue 
to fund a particular proposal or ongoing program.
    (8) Health care provider or insurer means a hospital, clinic, 
skilled nursing facility, rehabilitation facility, durable medical 
equipment supplier, home health agency, hospice program, health 
maintenance organization, managed care organization, or other provider 
of health care items and services as defined in sections 1877(h)(6) or 
1903(w)(7) of the Social Security Act (42 U.S.C. 1395nn(h)(6) or 
1396b(w)(7)) and any entity organized and licensed as a risk-bearing 
entity eligible to offer health insurance or health benefits coverage.
    (9) Scientific peer review is the evaluation of scientific research 
findings for competence, significance, and originality by qualified 
experts who research and submit work for publication in the same field 
and which provides systematized accountability for adherence to ethical 
guidelines commonly accepted within the relevant research community for 
disseminating scientific information.
    (10) Substantially affected organization means:
    (i) A biotechnology or pharmaceutical company; a medical device 
manufacturer; or a corporation, partnership, or other enterprise or 
entity significantly involved, directly or through subsidiaries, in the 
research, development, or manufacture of biotechnological, 
biostatistical, pharmaceutical, or medical devices, equipment, 
preparations, treatments, or products;
    (ii) Any organization a majority of whose members are described in 
paragraph (b)(10)(i) of this section; and
    (iii) Any other organization determined by the designated agency 
ethics official or, in consultation with the designated agency ethics 
official, by the NIH Director or the NIH Director's designee that is 
substantially affected by the programs, policies, or operations of the 
NIH.
    (11) Supported research institution means any educational 
institution or non-profit independent research institute that:
    (i) Is, or within the last year has been, an applicant for or 
recipient of an NIH grant, cooperative agreement, or research and 
development contract;
    (ii) Is, or within the last year has been, a proposer of or party to 
a cooperative research and development agreement (CRADA) with the NIH; 
or
    (iii) Any organization a majority of whose members are described in 
paragraphs (b)(11)(i) or (ii) of this section.
    (12) Unrestricted educational grant means funds received by or 
available to an educational activity provider from another source that 
are granted without stipulated conditions for their use other than the 
limitation that the funds shall be used to advance an educational 
program of the grant recipient. For purposes of this section, an 
educational grant shall not be considered unrestricted if the funding 
source for a continuing professional education program directly or 
indirectly:

[[Page 769]]

    (i) Selects or recommends the moderators, speakers, or presenters at 
the sponsored event;
    (ii) Independently provides additional funding to the moderators, 
speakers, or presenters in connection with the educational activity;
    (iii) Determines or recommends the audience composition;
    (iv) Specifies or recommends the topics to be addressed, or
    (v) Controls or recommends the planning, content, or implementation 
of the program in a manner inconsistent with guidelines established by a 
relevant professional association or accrediting organization that are 
designed to ensure that such activities are accurate, balanced, 
educational, free from commercial bias, nonpromotional, and independent 
of the influence of the funding source.
    (13) Unrestricted financial contribution means funds received by or 
available to a publisher, academic press, editorial board, or other 
entity affiliated with or operated by a supported research institution 
or a health care provider or insurer from another source that are 
provided without stipulated conditions for their use other than the 
limitation that the funds shall be used to advance peer-reviewed writing 
or editing by the funds recipient. For purposes of this section, a 
financial contribution shall not be considered unrestricted if the 
funding source for peer-reviewed writing or editing directly or 
indirectly:
    (i) Selects or recommends the author, reviewer, referee, or editor;
    (ii) Independently provides additional funding to the author, 
reviewer, referee, or editor in connection with the writing or editing 
activity;
    (iii) Determines or recommends the targeted audience of the writing 
or editing activity;
    (iv) Specifies or recommends the topics to be addressed, or
    (v) Controls or recommends the planning, content, or distribution of 
the written or edited product in a manner inconsistent with ethical 
guidelines commonly accepted within the relevant research community for 
disseminating scientific information which are designed to ensure that 
such writing or editing is accurate, unbiased, nonpromotional, 
transparent with respect to disclosure of potential conflicts, and 
independent of the influence of the funding source.
    (c) Prohibitions--(1) Prohibited outside activities with 
substantially affected organizations, supported research institutions, 
and health care providers or insurers. Except as permitted by paragraph 
(c)(3) of this section, an employee of the NIH shall not:
    (i) Engage in employment with a substantially affected organization, 
a supported research institution, or a health care provider or insurer;
    (ii) Teach, speak, write, or edit for compensation for any 
substantially affected organization, supported research institution, or 
health care provider or insurer; or
    (iii) Engage in any employment or self-employed business activity 
that involves the sale or promotion of products or services of a 
substantially affected organization or a health care provider or 
insurer, except for the purpose of commercializing invention rights 
obtained by the employee pursuant to Executive Order 10096, 15 U.S.C. 
3710d, or implementing regulations.
    (2) General exception. Nothing in paragraph (c)(1) of this section 
prevents an employee from engaging in employment with, or teaching, 
speaking, writing, or editing for, a political, religious, social, 
fraternal, or recreational organization.
    (3) Specific exceptions. Notwithstanding the prohibitions in 
paragraph (c)(1) of this section:
    (i) Teaching. An employee may engage in and accept compensation for:
    (A) Teaching a course requiring multiple presentations as permitted 
under 5 CFR 2635.807(a)(3); or
    (B) Delivering a class lecture that is unrelated to the employee's 
official duties within the meaning of 5 CFR 2635.807 if the activity is 
performed as part of a regularly scheduled course offered under the 
established curriculum of an institution of higher education as defined 
at 20 U.S.C. 1001.
    (ii) Clinical, medical, or health-related professional practice. An 
employee may engage in and accept compensation for the outside practice 
of medicine, dentistry, pharmacy, nursing, or similar health-related 
professional practice that involves the personal provision of

[[Page 770]]

care, treatment, or other health-related professional services to or in 
connection with individual patients, provided that:
    (A) The provision of health-related professional services to such 
individuals is not part of any ongoing research project conducted or 
funded by the NIH;
    (B) The employee does not establish a private practice relationship 
with a current or recently discharged NIH patient or subject of an NIH-
conducted or NIH-funded clinical trial or protocol;
    (C) The employee does not personally refer private practice patients 
to the NIH; and
    (D) The professional practice does not involve substantial unrelated 
non-professional duties, such as personnel management, contracting and 
purchasing responsibilities (other than ``out-of-stock'' 
requisitioning), and does not involve employment by a medical product 
manufacturer in the conduct of biomedical research.
    (iii) Clerical, retail, service industry, building trades, 
maintenance, or similar services. An employee may engage in and accept 
compensation for any outside employment or self-employed business 
activity that primarily involves manual or unskilled labor or utilizes 
talents, skills, or interests in areas unrelated to the health and 
scientific research activities of the NIH, such as clerical work, retail 
sales, service industry jobs, building trades, maintenance, or similar 
services.
    (iv) Continuing professional education. An employee may engage in 
and accept compensation for a teaching, speaking, writing, or editing 
activity that is unrelated to the employee's official duties within the 
meaning of 5 CFR 2635.807 if the activity is performed as part of a 
continuing professional education program conducted by an educational 
activity provider. If a substantially affected organization provides 
financial support for a continuing professional education program 
conducted by an educational activity provider, this exception is 
inapplicable unless the substantially affected organization is involved 
only as the funding source for an unrestricted educational grant.
    (v) Authorship of writings subjected to scientific peer review or a 
substantially equivalent editorial review process. An employee may 
engage in and accept compensation for a writing or editing activity that 
is unrelated to the employee's official duties within the meaning of 5 
CFR 2635.807 if the resulting article, chapter, essay, report, text, or 
other writing is submitted to a publisher, academic press, editorial 
board, or other entity affiliated with or operated by a supported 
research institution or a health care provider or insurer for 
publication in a scientific journal, textbook, or similar publication 
that subjects manuscripts to scientific peer review or a substantially 
equivalent editorial review process. If a substantially affected 
organization funds the publishing activities of a supported research 
institution or a health care provider or insurer, this exception is 
inapplicable unless the substantially affected organization is involved 
only as an unrestricted financial contributor and exercises no editorial 
control.
    (vi) Data and safety monitoring boards. An employee may serve as a 
member of a data and safety monitoring board for a clinical study 
conducted by a supported research institution or health care provider or 
insurer, provided that:
    (A) The members of the DSMB are not selected or paid for their 
service by a substantially affected organization;
    (B) The clinical study is not funded under a grant, cooperative 
agreement, or research and development contract from, or conducted 
pursuant to a cooperative research and development agreement (CRADA) 
with, or aided under another funding mechanism by, the NIH; and
    (C) If the service is performed for compensation, the service does 
not entail prohibited assistance in the preparation of documents 
intended for submission to HHS within the meaning of Sec. 
5501.106(c)(1), and the clinical study is not an HHS-funded activity 
described in Sec. 5501.106(c)(2).
    (vii) Grand rounds. An employee may engage in and accept 
compensation for a teaching, speaking, writing, or editing activity that 
is unrelated to the employee's official duties within the meaning of 5 
CFR 2635.807 if the activity is performed as part of a Grand

[[Page 771]]

Rounds program conducted by an accredited educational institution 
offering instruction in the life sciences, such as a medical school or 
school of public health, or by an affiliated teaching hospital, provided 
that:
    (A) The employee's presentation includes an interactive component, 
such as visiting patients or discussing individual clinical cases, or 
interacting for educational purposes with undergraduates, graduates, or 
post-graduate students and fellows, in addition to any lecture;
    (B) The audience is composed primarily of faculty and students or 
trainees registered in a biomedical or health-related program of 
studies; and
    (C) A substantially affected organization or a speakers' bureau 
affiliated with a substantially affected organization does not sponsor 
or underwrite the costs of the Grand Rounds program or the employee's 
presentation, except pursuant to an unrestricted educational grant.
    (viii) Grant or scientific review committee. An employee may serve 
on a grant or scientific review committee for a supported research 
institution or a health care provider or insurer, provided that:
    (A) The members of the grant or scientific review committee are not 
selected or paid for their service by a substantially affected 
organization;
    (B) The grant award or program in relation to which the 
recommendation of the grant or scientific review committee is sought is 
not funded under a grant, cooperative agreement, or research and 
development contract from, conducted pursuant to a cooperative research 
and development agreement (CRADA) with, or aided under another funding 
mechanism by, the NIH; and
    (C) If the service is performed for compensation, the service does 
not entail prohibited assistance in the preparation of documents 
intended for submission to HHS within the meaning of Sec. 
5501.106(c)(1), and the grant award or program in relation to which the 
recommendation of the grant or scientific review committee is sought is 
not an HHS-funded activity described in Sec. 5501.106(c)(2).

[70 FR 5560, Feb. 3, 2005, as amended at 70 FR 51569, Aug. 31, 2005]



Sec. 5501.110  Prohibited financial interests applicable to senior employees 

of the National Institutes of Health.

    (a) Applicability. This section does not apply to special Government 
employees or the spouse or minor children of a special Government 
employee.
    (b) Definitions. For purposes of this section:
    (1) Senior employee means the Director and the Deputy Director of 
the National Institutes of Health; members of the senior staff within 
the Office of the Director who report directly to the NIH Director; the 
Directors, the Deputy Directors, Scientific Directors, and Clinical 
Directors of each Institute and Center within NIH; Extramural Program 
Officials who report directly to an Institute or Center Director; and 
any employee of equivalent levels of decision-making responsibility who 
is designated as a senior employee by the designated agency ethics 
official or the NIH Director, in consultation with the designated agency 
ethics official.
    (2) Substantially affected organization has the meaning set forth in 
Sec. 5501.109(b)(10).
    (c) Prohibition applicable to senior employees. Except as permitted 
by paragraph (d) of this section, a senior employee or the spouse or 
minor child of such senior employee shall not have a financial interest 
in a substantially affected organization.
    (d) Exceptions for certain financial interests. Notwithstanding the 
prohibition in paragraph (c) of this section:
    (1) Pension or other employee benefit. A senior employee or spouse 
or minor child of a senior employee may have a financial interest, such 
as a pension or other employee benefit, arising from employment with a 
substantially affected organization.

    Note to Paragraph (d)(1): NIH employees, as opposed to spouses and 
minor children of employees, are generally prohibited under Sec. 
5501.109 from engaging in current employment with a substantially 
affected organization.

    (2) De minimis holdings. A senior employee or spouse or minor child 
of a senior employee may have a financial interest in a substantially 
affected organization if:

[[Page 772]]

    (i) The aggregate market value of the combined interests of the 
senior employee and the senior employee's spouse and minor children in 
any one substantially affected organization is equal to or less than the 
de minimis exemption limit for matters involving parties established by 
5 CFR 2640.202(a) or $15,000, whichever is greater;
    (ii) The holding, if it represents an equity interest, constitutes 
less than 1 percent of the total outstanding equity of the organization; 
and
    (iii) The total holdings in substantially affected organizations and 
sector mutual funds that, in the literature they distribute to 
prospective and current investors or participants, state the objective 
or practice of concentrating their investments in the securities of 
substantially affected organizations account for less than 50 percent of 
the total value of the combined investment portfolios of the senior 
employee and the senior employee's spouse and minor children.
    (3) Diversified mutual funds. A senior employee or spouse or minor 
child of a senior employee may have an interest in a substantially 
affected organization that constitutes any interest in a publicly traded 
or publicly available investment fund (e.g., a mutual fund), or a widely 
held pension or similar fund, which, in the literature it distributes to 
prospective and current investors or participants, does not indicate the 
objective or practice of concentrating its investments in substantially 
affected organizations, if the employee neither exercises control nor 
has the ability to exercise control over the financial interests held in 
the fund.
    (4) Exceptional circumstances. In cases involving exceptional 
circumstances, the NIH Director or the NIH Director's designee, with the 
approval of the designated agency ethics official or his designee, may 
grant a written exception to permit a senior employee, or the spouse or 
minor child of a senior employee, or a class of such individuals, to 
hold a financial interest in a substantially affected organization based 
upon a determination that the application of the prohibition in 
paragraph (c) of this section is not necessary to ensure public 
confidence in the impartiality or objectivity with which HHS programs 
are administered or to avoid a violation of part 2635 of this title.
    (5) Technology transfer. A senior employee may have a financial 
interest in connection with the development and commercialization of 
invention rights obtained by the employee pursuant to Executive Order 
10096, 15 U.S.C. 3710d, or implementing regulations.
    (6) Sector mutual funds. (i) A senior employee or spouse or minor 
child of a senior employee may have an interest in a substantially 
affected organization that constitutes any interest in a sector mutual 
fund that, in the literature it distributes to prospective and current 
investors or participants, does not indicate the objective or practice 
of concentrating its investments in the biomedical science, 
pharmaceutical, medical device, biotechnology, or health industry 
sectors.
    (ii) A senior employee or spouse or minor child of a senior employee 
may have an interest in a substantially affected organization that 
constitutes any interest in a sector mutual fund that, in the literature 
it distributes to prospective and current investors or participants, 
states the objective or practice of concentrating its investments in the 
securities of substantially affected organizations provided that:
    (A) The aggregate market value of the combined ownership interests 
of the senior employee and the senior employee's spouse and minor 
children in such sector funds is equal to or less than the de minimis 
exemption limit for sector mutual funds established by 5 CFR 
2640.201(b)(2)(i) or $50,000, whichever is greater; and
    (B) The total holdings in substantially affected organizations and 
in sector mutual funds that, in the literature they distribute to 
prospective and current investors or participants, state the objective 
or practice of concentrating their investments in the securities of 
substantially affected organizations account for less than 50 percent of 
the total value of the combined investment portfolios of the senior 
employee and the senior employee's spouse and minor children.

    Note to Paragraph (d): With respect to any excepted financial 
interest, employees are reminded of their obligations under 5

[[Page 773]]

CFR part 2635, and specifically their obligation under subpart D to 
disqualify themselves from participating in any particular matter in 
which they, their spouses or minor children have a financial interest 
arising from publicly traded securities that exceeds the de minimis 
thresholds specified in the regulatory exemption at 5 CFR 2640.202 or 
from non-publicly traded securities that are not covered by the 
regulatory exemption. Furthermore, the agency may prohibit or restrict 
an individual employee from acquiring or holding any financial interest 
or a class of financial interests based on the agency's determination 
that the interest creates a substantial conflict with the employee's 
duties, within the meaning of 5 CFR 2635.403.

    (e) Reporting and divestiture. For purposes of determining the 
divestiture period specified in 5 CFR 2635.403(d), as applied to 
financial interests prohibited under paragraph (c) of this section, the 
``date divestiture is first directed'' means the date on which the new 
entrant public or confidential financial disclosure report required by 
part 2634 of this title or any report required by Sec. 5502.107(c) of 
this chapter is due.

[70 FR 5562, Feb. 3, 2005, as amended at 70 FR 51571, Aug. 31, 2005]



Sec. 5501.111  Awards tendered to employees of the National Institutes of 

Health.

    (a) Applicability. This section does not apply to special Government 
employees.
    (b) Definitions. For purposes of this section, official 
responsibility has the meaning set forth in 18 U.S.C. 202(b).
    (c) Additional limitations on awards to employees of the National 
Institutes of Health. The following limitations shall apply to the 
acceptance by an employee of an award pursuant to 5 CFR 2635.204(d):
    (1) Limitations applicable to employees with official responsibility 
for matters affecting an award donor. An employee shall not accept a 
gift with an aggregate market value of more than $200, or that is cash 
or an investment interest, that is an award or incident to an award from 
a person, organization, or other donor that:
    (i) Is seeking official action from the employee, any subordinate of 
the employee, or any agency component or subcomponent under the 
employee's official responsibility;
    (ii) Does business or seeks to do business with any agency component 
or subcomponent under the employee's official responsibility;
    (iii) Conducts activities substantially affected by the programs, 
policies, or operations of any agency component or subcomponent under 
the employee's official responsibility; or
    (iv) Is an organization a majority of whose members are described in 
paragraphs (c)(1)(i) through (iii) of this section.
    (2) Prior approval of awards--(i) No employee shall accept an award 
under 5 CFR 2635.204(d) or this section unless the receipt thereof has 
been approved in writing in advance in accordance with procedures 
specified by the designated agency ethics official, or with the 
concurrence of the designated agency ethics official, the NIH Director 
or the NIH Director's designee.
    (ii) Approval shall be granted only upon a determination that 
acceptance of the award is not prohibited by statute or Federal 
regulation, including 5 CFR part 2635 and this part.

    Note to paragraph (c):
    In some circumstances cash and other things of value provided in 
connection with the provision of personal services, including speaking 
or writing, may be compensation, not a gift. Other ethics rules 
governing outside activities may restrict receipt of such compensation. 
See, for example, 5 CFR 2635.807.

    (d) Exception. Notwithstanding the prohibition in paragraph (c)(1) 
of this section, the NIH Director (or the Secretary, with respect to 
awards tendered to the NIH Director), with the approval of the 
designated agency ethics official, may grant a written exception to 
permit an employee to accept an award otherwise prohibited by this 
section under the following conditions:
    (1) There is a determination by the NIH Director (or the Secretary, 
with respect to awards tendered to the NIH Director) that acceptance of 
the gift will further an agency interest because it confers an 
exceptionally high honor in the fields of medicine or scientific 
research. The following criteria will be considered in making such a 
determination:
    (i) The identity of the awarding organization;
    (ii) The longevity of the awards program;

[[Page 774]]

    (iii) The source of award funds;
    (iv) The size of the monetary component of the award recognition;
    (v) The identity and credentials of past award recipients;
    (vi) The degree of publicity attendant to receipt of the award; and
    (vii) The impact of the substantive contribution being recognized;
    (2) Absent the prohibition in paragraph (c)(1) of this section, the 
gift would be permitted under part 2635 of this title; and
    (3) The designated agency ethics official shall have determined that 
the application of the prohibition in paragraph (c)(1) of this section 
is not necessary to ensure public confidence in the impartiality or 
objectivity with which NIH programs are administered or to avoid a 
violation of part 2635 of this title.
    (e) Disposition of improperly accepted awards--(1) Failure to obtain 
prior approval. If an employee accepts an award for which approval is 
required under paragraph (c)(2) of this section without obtaining such 
approval, the employee may be required, in addition to any penalty 
provided by law and applicable regulations, to forfeit the award by 
returning it to the donor.
    (2) Receipt of prohibited award. If an employee accepts an award 
prohibited by paragraph (c)(1) of this section, the employee shall be 
required, in addition to any penalty provided by law and applicable 
regulations, to:
    (i) Reject the award and instruct the donor to strike the honoree's 
name from any list of award recipients;
    (ii) Remove the recognition from the employee's r[eacute]sum[eacute] 
or curriculum vitae;
    (iii) Return any tangible indicia of the recognition to the donor; 
and
    (iv) Forfeit the award by returning it to the donor.

[70 FR 5563, Feb. 3, 2005, as amended at 70 FR 51572, Aug. 31, 2005]



Sec. 5501.112  One-year disqualification of employees of the National 

Institutes of Health from certain matters involving an award donor.

    An employee, other than a special Government employee, of the 
National Institutes of Health who has, within the last year, accepted an 
award permitted under 5 CFR 2635.204(d) or Sec. 5501.111 shall not 
participate in any particular matter involving specific parties in which 
the donor is or represents a party unless authorized to do so under 5 
CFR 2635.502(d).

[70 FR 5564, Feb. 3, 2005]



PART 5502_SUPPLEMENTAL FINANCIAL DISCLOSURE REQUIREMENTS FOR EMPLOYEES OF THE 

DEPARTMENT OF HEALTH AND HUMAN SERVICES--Table of Contents




Sec.
5502.101 General.
5502.102 Annual supplemental report of outside employment or activities.
5502.103 Content of annual supplemental reports.
5502.104 Confidentiality of reports.
5502.105 Agency procedures.
5502.106 Supplemental disclosure of prohibited financial interests 
          applicable to employees of the Food and Drug Administration.
5502.107 Supplemental disclosure of financial interests in substantially 
          affected organizations applicable to employees of the National 
          Institutes of Health.

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 
2634.103.

    Source: 70 FR 5564, Feb. 3, 2005, unless otherwise noted.



Sec. 5502.101  General.

    The regulations in this part apply to employees of the Department of 
Health and Human Services and supplement the Executive Branch Financial 
Disclosure Regulations in 5 CFR part 2634. Any regulation in this part 
made applicable only to the employees of an HHS component designated as 
a separate agency under Sec. 5501.102(a) of this chapter shall apply to 
the employees of that component as defined in Sec. 5501.102(b)(1) of 
this chapter.



Sec. 5502.102  Annual supplemental report of outside employment or activities.

    Any employee, other than a special Government employee, for whom an 
outside employment or activity has been approved, or who has 
participated in any outside employment or activity for which prior 
approval is required,

[[Page 775]]

under part 5501 of this chapter shall file on or before February 28 of 
each year a report concerning all such activities that were approved or 
undertaken in the previous calendar year. The annual report shall be 
filed with the employee's supervisor who shall review the form, in 
consultation with an agency ethics official, and determine whether the 
employee has complied with applicable laws and regulations and whether 
approval of any ongoing outside activity should be cancelled because the 
activity does not meet the standard in Sec. 5501.106(d)(5) of this 
chapter.

[70 FR 5564, Feb. 3, 2005, as amended at 70 FR 51573, Aug. 31, 2005



Sec. 5502.103  Content of annual supplemental reports.

    The annual supplemental report of outside employment or activities 
required by Sec. 5502.102 shall include the following information:
    (a) The employee's name, contact information, organizational 
location, occupational title, grade, step, salary, appointment type, and 
financial disclosure filing status;
    (b) A list of all outside activities for which prior approval is 
required under part 5501 of this chapter that were approved pursuant to 
5 CFR 5501.106(d) or undertaken within the reporting period. The report 
must identify the person or organization for whom or with which the 
employee was to perform the activity and the approval date;
    (c) A statement as to whether the anticipated work described in a 
previously approved outside activity was actually performed for the 
person or organization named in the request for approval;
    (d) For each outside activity actually performed, the beginning date 
of the relationship with the outside entity, the date(s) personal 
services were provided, the total number of hours spent and leave used 
on the activity within the reporting period, and the ending date;
    (e) For each outside activity that remains ongoing at the time of 
filing the report, a statement as to how long the activity is 
anticipated to continue, the date on which prior approval expires, and 
whether a request for renewal of approval is anticipated;
    (f) For each outside activity actually performed, the type and 
amount of any income and/or reimbursements actually received during the 
reporting period and the date paid;
    (g) For each outside activity actually performed, the type and 
amount of any income and/or reimbursements earned during or attributable 
to the reporting period that were not in fact received during the 
reporting period and remain due;
    (h) A statement as to whether any change has occurred or is 
anticipated with respect to information supplied in the original outside 
activity approval request;
    (i) A description of any change in the nature, scope, or subject 
matter of any approved activity; and
    (j) A description of any change in jobs or in the duties and 
responsibilities of the employee's position that occurred after the 
outside activity was approved.



Sec. 5502.104  Confidentiality of reports.

    Each report filed under this part is confidential and shall not be 
disclosed to the public, except as provided under Sec. 2634.604(b) of 
this title.



Sec. 5502.105  Agency procedures.

    (a) The designated agency ethics official or, with the concurrence 
of the designated agency ethics official, each of the separate agency 
components of HHS listed in Sec. 5501.102(a) of this chapter may 
prescribe forms for the collection of information under this part and 
establish procedures for the submission and review of each report filed. 
These procedures may provide for filing extensions, for good cause 
shown, totaling not more than 90 days.
    (b) For good cause, the designated agency ethics official may extend 
the reporting deadlines for reports required under this part during the 
initial implementation phase for any reporting requirement, without 
regard to the 90 day maximum specified in paragraph (a) of this section.

[70 FR 37009, June 28, 2005, as amended at 70 FR 51573, Aug. 31, 2005]

[[Page 776]]



Sec. 5502.106  Supplemental disclosure of prohibited financial interests 

applicable to employees of the Food and Drug Administration.

    (a) Applicability. This section does not apply to special Government 
employees.
    (b) Definitions. For purposes of this section:
    (1) Confidential filer means an employee who meets the criteria in 5 
CFR 2634.904 and who has not been excluded from the requirement of 
filing a confidential financial disclosure report under the procedures 
in 5 CFR 2634.905.
    (2) Prohibited financial interest means a financial interest 
prohibited by Sec. 5501.104(a), including those financial interests 
that are excepted under Sec. 5501.104(b) of this chapter.
    (3) Public filer means an employee who meets the criteria in 5 CFR 
2634.202 and who has not been excluded from the requirement of filing a 
public financial disclosure report under the procedures in 5 CFR 
2634.203.
    (4) Remainder of HHS has the meaning set forth in Sec. 
5501.102(b)(2) of this chapter.
    (5) Separate agency component has the meaning set forth in Sec. 
5501.102(a) of this chapter.
    (c) Report of prohibited financial interests--(1) New entrant 
employees. A new entrant employee shall report in writing within 30 days 
after entering on duty with the FDA any prohibited financial interest 
and the value thereof held upon commencement of employment with the 
agency.
    (2) Reassigned employees. An employee of a separate agency component 
other than the FDA or of the remainder of HHS who is reassigned to a 
position at the FDA shall report in writing within 30 days of entering 
on duty with the FDA any prohibited financial interest and the value 
thereof held on the effective date of the reassignment to the agency.
    (3) Incumbent employees. An incumbent employee of the FDA who 
acquires any prohibited financial interest shall report such interest 
and the value thereof in writing within 30 days after acquiring the 
financial interest.

[70 FR 5564, Feb. 3, 2005, as amended at 70 FR 51573, Aug. 31, 2005; 70 
FR 61713, Oct. 26, 2005]



Sec. 5502.107  Supplemental disclosure of financial interests in 

substantially affected organizations applicable to employees of the National 

Institutes of Health.

    (a) Applicability. This section does not apply to special Government 
employees.
    (b) Definitions. For purposes of this section:
    (1) Clinical investigator means an employee identified as a 
principal investigator, accountable investigator, lead associate 
investigator, medical advisory investigator, associate investigator, or 
other subinvestigator in an NIH clinical study involving human subjects 
under a clinical research protocol approved by an institutional review 
board.
    (2) Clinical research has the meaning set forth in 42 U.S.C. 
284d(b).
    (3) Institutional review board (IRB) means any board, committee, or 
other group formally designated by an institution to review a clinical 
research protocol and approve the initiation of biomedical research 
involving human subjects and to assess periodically the progress of the 
investigation to protect the rights and welfare of the trial 
participants.
    (4) Confidential filer means an employee who meets the criteria in 5 
CFR 2634.904 and who has not been excluded from the requirement of 
filing a confidential financial disclosure report under the procedures 
in 5 CFR 2634.905.
    (5) Public filer means an employee who meets the criteria in 5 CFR 
2634.202 and who has not been excluded from the requirement of filing a 
public financial disclosure report under the procedures in 5 CFR 
2634.203.
    (6) Remainder of HHS has the meaning set forth in Sec. 
5501.102(b)(2) of this chapter.
    (7) Separate agency component has the meaning set forth in Sec. 
5501.102(a) of this chapter.
    (8) Substantially affected organization has the meaning set forth in 
Sec. 5501.109(b)(10) of this chapter.
    (c) Report of financial interests in substantially affected 
organizations--(1) New entrant employees. A new entrant employee who is 
a public filer or a confidential filer or who is designated to

[[Page 777]]

serve as a clinical investigator shall report in writing within 30 days 
after entering on duty with the NIH any financial interest in a 
substantially affected organization and the value thereof held upon 
commencement of employment with the agency.
    (2) Reassigned employees. An employee of a separate agency 
component, other than the NIH, or of the remainder of HHS who is either 
a public filer, a confidential filer, or a clinical investigator who is 
reassigned to a position at the NIH shall report in writing within 30 
days of entering on duty with the NIH any financial interest in a 
substantially affected organization and the value thereof held on the 
effective date of the reassignment to the agency.
    (3) Incumbent employees. An incumbent employee of the NIH who is 
either a public filer, a confidential filer, or a clinical investigator 
who acquires any financial interest in a substantially affected 
organization shall report such interest and the value thereof in writing 
within 30 days after acquiring the financial interest. Any incumbent 
employee, irrespective of financial disclosure filing status, who is 
designated a clinical investigator shall report in writing within 30 
days of the approval of the clinical research protocol by the relevant 
institutional review board any financial interest in a substantially 
affected organization and the value thereof held on the date of the IRB 
approval.
    (4) Initial report by on duty employees. An employee on duty at the 
NIH on August 31, 2005, who is either a public filer, a confidential 
filer, or a clinical investigator shall report in writing on or before 
October 31, 2005, any financial interest in a substantially affected 
organization and the value thereof held on the date the report is filed.

[70 FR 51573, Aug. 31, 2005, as amended at 70 FR 61713, Oct. 26, 2005]

[[Page 779]]



                  CHAPTER XLVI--POSTAL RATE COMMISSION




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Part                                                                Page
5601            Supplemental standards of ethical conduct 
                    for employees of the Postal Rate 
                    Commission..............................         781

[[Page 781]]



PART 5601_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

POSTAL RATE COMMISSION--Table of Contents




Sec.
5601.101 General.
5601.102 Prohibited financial interests.
5601.103 Notice of disqualification when seeking employment.
5601.104 Outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 39 U.S.C. 3603; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.403(a), 2635.802(a), 2635.803.

    Source: 58 FR 42840, Aug. 12, 1993, unless otherwise noted.



Sec. 5601.101  General.

    (a) Purpose. In accordance with 5 CFR 2635.105, the regulations in 
this part apply to employees, including Commissioners, of the Postal 
Rate Commission and supplement the Standards of Ethical Conduct for 
Employees of the Executive Branch contained in 5 CFR part 2635.
    (b) Definition of affected persons. For purposes of this part, a 
person whose interests are significantly affected by rates of postage, 
fees for postal services, the classification of mail or the operations 
of the United States Postal Service (Postal Service):
    (1) Includes a company or other person:
    (i) Who is or, in the past 4 years, has been a party to a proceeding 
before the Postal Rate Commission;
    (ii) Whose primary business involves entering publications as 
second-class mail;
    (iii) Who is in the business of selling merchandise, and a 
substantial portion of whose orders are solicited, received, or 
delivered through the mails;
    (iv) Who is primarily engaged in the business of advertising through 
the mails;
    (v) Who is primarily engaged in the business of delivering 
merchandise or written communications, i.e., a person whose primary 
business is in competition with the Postal Service; or
    (vi) Who provides services or products to the Postal Service that 
can be expected to produce income that exceeds $100,000 and equals or 
exceeds 5 percent of its gross income for the current fiscal year; and
    (2) Does not include a company or other person whose use of the 
mails is merely an incidental or a minor factor in the general conduct 
of its business.



Sec. 5601.102  Prohibited financial interests.

    Any employee shall not, directly or indirectly, have any financial 
interest in a person whose interests are significantly affected by rates 
of postage, fees for postal services, the classification of mail, or the 
operations of the Postal Service.



Sec. 5601.103  Notice of disqualification when seeking employment.

    An employee who has been assigned to a particular matter which 
affects the financial interests of a prospective employer and who is 
required, in accordance with 5 CFR 2635.604(a), to disqualify himself 
from participation in that matter shall, notwithstanding the guidance in 
5 CFR 2635.604 (b) and (c), provide notice of disqualification to his 
supervisor upon determining that he will not participate in the matter.



Sec. 5601.104  Outside employment.

    (a) Prohibited outside employment. An employee shall not engage in 
outside employment, either on a paid or unpaid basis, with or for a 
company or other person whose interests are significantly affected by 
rates of postage, fees for postal services, the classification of mail, 
or the operations of the Postal Service.
    (b) Prior approval for outside employment. An employee who wishes to 
engage in outside employment, either on a paid or unpaid basis, shall 
obtain the prior written approval of the designated agency ethics 
official. A request for such approval shall be submitted in writing with 
sufficient description of the employment to enable the designated agency 
ethics official to give approval based on a determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation, including paragraph (a) of this section 
and 5 CFR part 2635.

[[Page 782]]

    (c) Definition of employment. For purposes of this section 
employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner or trustee. Employment does not include participation in 
the activities of a nonprofit charitable, religious, professional, 
social, fraternal, educational, recreational, public service or civic 
organizations unless such activities involve the practice of a 
profession within the meaning of 5 CFR 2636.305(b)(1), including the 
giving of professional advice, or are for compensation other than 
reimbursement of expenses.

[[Page 783]]



                 CHAPTER XLVII--FEDERAL TRADE COMMISSION




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Part                                                                Page
5701            Supplemental standards of ethical conduct 
                    for employees of the Federal Trade 
                    Commission..............................         785

[[Page 785]]



PART 5701_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

FEDERAL TRADE COMMISSION--Table of Contents




Sec.
5701.101 Prior approval for outside employment.
5701.102 Fundraising activities.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 15 U.S.C. 46(g); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.803, 2635.808(c).



Sec. 5701.101  Prior approval for outside employment.

    (a) Before engaging in any outside employment, whether or not for 
compensation, an employee of the Federal Trade Commission, other than a 
Commissioner, must obtain the written approval of his or her supervisor 
and the Designated Agency Ethics Official (DAEO) or his or her designee. 
Requests for approval shall be forwarded through normal supervisory 
channels to the DAEO and shall include, at a minimum, the following:
    (1) A statement of the name of the person, group, or organization 
for whom the work is to be performed; the type of work to be performed; 
and the proposed hours of work and approximate dates of employment;
    (2) The employee's certification that the outside employment will 
not depend in any way on information obtained as a result of the 
employee's official Government position;
    (3) The employee's certification that no official duty time or 
Government property, resource, or facilities not available to the 
general public will be used in connection with the outside employment;
    (4) The employee's certification that he has read, is familiar with, 
and will abide by the restrictions contained in all applicable Federal 
laws and regulations, including those found in 18 U.S.C. chapter 11 and 
those found or referenced in subpart H (``Outside Activities'') of 5 CFR 
part 2635 (Standards of Ethical Conduct for Employees of the Executive 
Branch); and
    (5) The written approval of the employee's immediate supervisor.
    (b) Approval shall be granted only upon a determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation. In the case of an employee who wishes to 
practice a profession involving a fiduciary relationship, as defined in 
5 CFR 2636.305(b), approval will be granted only on a case-by-case 
basis.
    (c) For purposes of this section, ``employment'' means any form of 
non-Federal employment or business relationship involving the provision 
of personal services by the employee, whether or not for compensation. 
It includes but it is not limited to personal services as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, or trustee. Prior approval is not required, however, to 
participate in the activities of a nonprofit charitable, religious, 
professional, social, fraternal, educational, recreational, public 
service, or civic organization, unless such activities involve the 
provision of professional services or advice or are for compensation 
other than reimbursement of expenses.

[58 FR 30695, May 27, 1993]



Sec. 5701.102  Fundraising activities.

    When engaging in personal fundraising, as described at 5 CFR 
2635.808(c), an employee of the Federal Trade Commission may, 
notwithstanding the prohibition of Sec. 2635.808(c)(1)(i), personally 
solicit funds from a person who is a prohibited source only under 5 CFR 
2635.203(d)(3) (i.e., because the person ``conducts activities regulated 
by'' the Commission). The other provisions of Sec. 2635.808(c) continue 
to apply to any such personal fundraising.

    Example 1: A Federal Trade Commission employee is president of the 
local branch of her college alumni association. The association is 
seeking contributions from local businesses. The employee may, during 
her off-duty hours, seek a contribution from a company that is regulated 
by the Commission, but not from one that she knows is currently under 
Commission investigation or is seeking official action by the 
Commission, does business or seeks to do business with the Commission, 
or has interests that may be substantially affected by the employee's 
job. While the Standards of Conduct provide that companies under the 
agency's enforcement

[[Page 786]]

authority generally are prohibited sources of an employee's fundraising 
in a personal capacity, Sec. 5701.102 provides that employees of the 
FTC may seek charitable contributions from an entity that is a 
prohibited source only because its activities are subject to agency 
regulation.

[63 FR 43070, Aug. 12, 1998]

[[Page 787]]



              CHAPTER XLVIII--NUCLEAR REGULATORY COMMISSION




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Part                                                                Page
5801            Supplemental standards of ethical conduct 
                    for employees of the Nuclear Regulatory 
                    Commission..............................         789

[[Page 789]]



PART 5801_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NUCLEAR REGULATORY COMMISSION--Table of Contents




Sec.
5801.101 General.
5801.102 Prohibited securities.
5801.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 42 U.S.C. 2201, 5841; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 
306, 5 CFR 2635.105, 2635.403, 2635.803.

    Source: 59 FR 17459, Apr. 13, 1994, unless otherwise noted.



Sec. 5801.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to members and other employees of the Nuclear Regulatory 
Commission and supplement the Standards of Ethical Conduct for Employees 
of the Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, members and other employees 
are subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634 and to additional regulations regarding 
their conduct contained in 10 CFR part 0.



Sec. 5801.102  Prohibited securities.

    (a) General prohibition. No covered employee, and no spouse or minor 
child of a covered employee, shall own securities issued by an entity on 
the list described in paragraph (b) of this section.
    (b) Prohibited securities list. Once a year, or on a more frequent 
basis, the Commission will publish and distribute to employees a list of 
entities whose securities a covered employee or the spouse or minor 
child of a covered employee may not own. The list shall consist of 
entities which are:
    (1) Applicants for or holders of early site permits, construction 
permits, operating licenses, or combined construction permits and 
operating licenses for facilities which generate electric energy by 
means of a nuclear reactor;
    (2) State or local governments, if the primary purpose of the 
security is to finance the construction or operation of a nuclear 
reactor or a low-level waste facility;
    (3) Entities manufacturing or selling nuclear power or test 
reactors;
    (4) Architectural-engineering companies providing services relating 
to a nuclear power reactor;
    (5) Applicants for, or holders of, a certified standard design;
    (6) Entities licensed or regulated by the Commission to mill, 
convert, enrich, fabricate, store, or dispose of source, byproduct, or 
special nuclear material, or applicants for such licenses that are 
designated by the Commission because they are or will be substantially 
engaged in such nuclear fuel cycle or disposal activities;
    (7) The parent corporation of any subsidiary described in paragraphs 
(b)(1)-(b)(6) of this section; and
    (8) An energy or utility sector investment fund which has more than 
25% of its assets invested in securities issued by entities described in 
paragraphs (b)(1)-(b)(7) of this section.
    (c) Definitions. For purposes of this section:
    (1) A covered employee means:
    (i) A member of the Commission;
    (ii) The Inspector General of the NRC;
    (iii) A member of the Senior Executive Service (SES);
    (iv) An employee who holds a non-SES position above GG-15; and
    (v) Any other employee, including a special Government employee, 
whose duties and responsibilities, as determined by the Commission or 
its designees, require application of the securities ownership 
prohibition contained in this section to ensure public confidence that 
NRC programs are conducted impartially and objectively. The positions of 
these employees are specified in NRC Management Handbook 7.7, which is 
available in the NRC Public Document Room; and
    (2) The term ``securities'' includes all interests in debts or 
equity instruments. The term includes, without limitation, secured and 
unsecured bonds, debentures, notes, securitized assets and commercial 
paper, as well as all types of preferred and common stock. The term 
encompasses both current

[[Page 790]]

and contingent ownership interests, including any beneficial or legal 
interest derived from a trust. It extends to any right to acquire or 
dispose of any long or short position in such securities and includes, 
without limitation, interests convertible into such securities, as well 
as options, rights, warrants, puts, calls, and straddles with respect 
thereto.
    (d) Divestiture and reporting of prohibited securities--(1) Newly 
covered employees. Upon promotion or other appointment to a position 
subject to the securities prohibition of this section, a covered 
employee shall sign a certification:
    (i) Identifying securities of an entity on the prohibited securities 
list which the employee, or the spouse or minor child of the employee, 
owns, or
    (ii) Stating that the employee, or the spouse or minor child of the 
employee, does not own any prohibited securities.

Except as provided in paragraph (d)(4) of this section, the newly 
covered employee, or the spouse or minor child of the employee, shall 
divest prohibited securities within 90 days after appointment to the 
covered position.
    (2) Newly prohibited securities. Within 30 days after publication of 
the prohibited securities list to which an entity's name has been added, 
a covered employee who owns, or whose spouse or minor child owns, 
prohibited securities shall make a written report of that ownership to 
the Office of the General Counsel. Except as provided in paragraph 
(d)(4) of this section, the covered employee, or the spouse or minor 
child of the covered employee, shall divest prohibited securities within 
90 days after publication of the prohibited securities list.
    (3) Securities acquired without specific intent. Within 30 days 
after a covered employee, or the spouse or minor child of a covered 
employee, acquires securities of an entity on the prohibited securities 
list as a result of marriage, inheritance, gift or otherwise without 
specific intent to acquire the securities, the covered employee shall 
make a written report of the acquisition to the Office of the General 
Counsel. Except as provided in paragraph (d)(4) of this section, a 
covered employee, or the spouse or minor child of a covered employee, 
shall divest prohibited securities within 90 days after the date of 
acquisition.
    (4) Extension of period to divest. Upon a showing of undue hardship, 
the Chairman of the Nuclear Regulatory Commission may extend the 90 day 
period for divestiture specified in paragraphs (d)(1) through (d)(3) of 
this section.
    (5) Disqualification pending divestiture. Pending divestiture of 
prohibited securities, a covered employee must disqualify himself or 
herself, in accordance with 5 CFR 2635.402, from participation in 
particular matters which, as a result of continued ownership of the 
prohibited securities, would affect the financial interests of the 
employee, or those of the spouse or minor child of the employee. 
Disqualification is not required where a waiver described in 5 CFR 
2635.402(d) applies. Procedures for obtaining individual waivers are 
contained in NRC Handbook 7.7, which is available in the NRC Public 
Document Room.
    (6) Tax treatment of gain on divested securities. Where divestiture 
is required by this section, the covered employee (except a special 
Government employee) may be eligible to defer the tax consequences of 
divestiture under subpart J of 5 CFR part 2634, pursuant to procedures 
in NRC Handbook 7.7, which is available in the NRC Public Document Room.
    (e) Waivers. (1) The Chairman may grant a waiver to permit a covered 
employee, or the spouse or minor child of a covered employee, to retain 
ownership of a security of an entity on the prohibited securities list 
upon a determination that the holding of the security is not 
inconsistent with 5 CFR part 2635 or otherwise prohibited by law, and 
that:
    (i) Under the circumstances, application of the prohibition is not 
necessary to ensure confidence in the impartiality and objectivity with 
which NRC programs are administered;
    (ii) Legal constraints prevent divestiture; or
    (iii) For a special Government employee, divestiture would result in 
substantial financial hardship.
    (2) Where a waiver has been granted under paragraph (e)(1) of this 
section, the covered employee must disqualify

[[Page 791]]

himself or herself, in accordance with 5 CFR 2635.402, from 
participation in particular matters which, as a result of continued 
ownership of the prohibited security, would affect the financial 
interests of the employee, or those of the spouse or minor child of the 
employee unless the employee has received a waiver described in 5 CFR 
2635.402(d), pursuant to procedures in NRC Handbook 7.9, which is 
available in the NRC Public Document Room.



Sec. 5801.103  Prior approval for outside employment.

    (a) An employee, other than a special Government employee, shall 
obtain written authorization before engaging in compensated outside 
employment with:
    (1) A Commission licensee;
    (2) An applicant for a Commission license;
    (3) An organization directly engaged in activities in the commercial 
nuclear field;
    (4) A Commission contractor;
    (5) A Commission supplier;
    (6) An applicant for or holder of a license issued by a State 
pursuant to an agreement between the Commission and the State;
    (7) A trade association which represents clients concerning nuclear 
matters; or
    (8) A law firm or other organization which is participating in an 
NRC proceeding or which regularly represents itself or clients before 
the NRC.
    (b) Requests for approval shall be submitted in writing to the 
agency designee specified in NRC Management Directive 7.8, which is 
available in the NRC Public Document Room, in accordance with procedures 
set forth in the accompanying NRC Handbook.
    (c) Approval of outside employment shall be granted in writing only 
upon a determination by the agency designee that the proposed outside 
employment would not violate a Federal statute or regulation, including 
5 CFR 2635.
    (d) For purposes of this section, ``outside employment'' means any 
form of non-Federal employment, business relationship or activity, 
involving the provision of personal services by the employee. It 
includes, but is not limited to, personal services as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, trustee, teacher or speaker.

[[Page 793]]



                 CHAPTER L--DEPARTMENT OF TRANSPORTATION




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Part                                                                Page
6001            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Transportation..........................         795

[[Page 795]]



PART 6001_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF TRANSPORTATION--Table of Contents




Sec.
6001.101 General.
6001.102 Agency designees.
6001.103 Designation of separate agency components.
6001.104 Prohibited financial interests.

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 49 U.S.C. 322; E.O. 12674, 54 FR 15159, 3 CFR, 
1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 
Comp., p. 306; 5 CFR 2635.105, 2635.203(a), 2635.403(a), 2635.807.

    Source: 61 FR 39903, July 31, 1996, unless otherwise noted.



Sec. 6001.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Transportation and supplement 
the Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635. In addition to the standards in 5 CFR part 
2635, employees are subject to the executive branch financial disclosure 
regulations contained in 5 CFR part 2634.



Sec. 6001.102  Agency designees.

    For purposes of 5 CFR part 2635, the following Department of 
Transportation officials are agency designees within the meaning of 5 
CFR 2635.102(b):
    (a) The Designated Agency Ethics Official;
    (b) The Alternate Agency Ethics Official;
    (c) The Deputy Ethics Officials; and
    (d) As designated by Deputy Ethics Officials, legal counsel in 
regional and other offices.



Sec. 6001.103  Designation of separate agency components.

    (a) Pursuant to 5 CFR 2635.203(a), each of the following components 
of the Department of Transportation is designated as a separate agency 
for purpose of the regulations in subpart B of 5 CFR part 2635 governing 
gifts from outside sources and Sec. 2635.807 of this title governing 
teaching, speaking, or writing:
    (1) Federal Aviation Administration;
    (2) Federal Highway Administration;
    (3) Federal Railroad Administration;
    (4) Federal Transit Administration;
    (5) Maritime Administration;
    (6) National Highway Traffic Safety Administration;
    (7) Saint Lawrence Seaway Development Corporation; and
    (8) United States Coast Guard.
    (b) Employees of Department of Transportation components not 
designated as separate agencies, including employees of the Office of 
the Secretary of Transportation, the Research and Special Programs 
Administration, and the Bureau of Transportation Statistics, will be 
treated as employees of DOT which shall be treated as a single agency 
that is separate from the above listed agencies for purposes of 
determining whether the donor of a gift is a prohibited source under 5 
CFR 2635.203(d) and for identifying the DOT employee's agency under 5 
CFR 2635.807 governing teaching, speaking, and writing.



Sec. 6001.104  Prohibited financial interests.

    (a) Federal Railroad Administration (FRA). (1) Except as provided in 
paragraph (c) of this section, no FRA employee shall hold stock or have 
any other financial interest, including outside employment, in a 
railroad company subject to FRA regulation.
    (2) No FRA employee appointed after December 1991 shall hold 
reemployment rights with a railroad company subject to FRA regulation 
after his or her first year of employment.
    (3) No spouse or minor child of an FRA employee shall hold stock or 
any other securities interest in a railroad company subject to FRA 
regulation.
    (b) Federal Aviation Administration (FAA). Except as provided in 
paragraphs (c) and (d) of this section, no FAA employee, or spouse or 
minor child of the employee, may hold stock or have any other securities 
interest in an airline or aircraft manufacturing company, or in a 
supplier of components or parts to an airline or aircraft manufacturing 
company.
    (c) Exception. The prohibitions in paragraphs (a)(1) and (b) of this 
section do not apply to a financial interest in

[[Page 796]]

a publicly traded or publicly available investment fund, provided that, 
at the time of the employee's appointment or upon initial investment in 
the fund, whichever occurs later, the fund does not have invested, or 
indicate in its prospectus the intent to invest more than 30 percent of 
its assets in a particular transportation or geographic sector and the 
employee neither exercises control nor has the ability to exercise 
control over the financial interests held in the fund.
    (d) Waiver. An agency designee may grant a written waiver from the 
prohibition contained in paragraph (b) of this section, based on a 
determination that the waiver is not inconsistent with 5 CFR part 2635 
or otherwise prohibited by law, and that, under the particular 
circumstances, application of the prohibition is not necessary to avoid 
the appearance of misuse of position or loss of impartiality, or 
otherwise to ensure confidence in the impartiality and objectivity with 
which FAA programs are administered. A waiver under this paragraph may 
be accompanied by appropriate conditions, such as requiring execution of 
a written statement of disqualification. Notwithstanding the granting of 
any waiver, an employee remains subject to the disqualification 
requirements of 5 CFR 2635.402 and 2635.502.
    (e) Period to divest. An individual subject to this section who 
acquires a financial interest subject to this section, as a result of 
gift, inheritance, or marriage, shall divest the interest within a 
period set by the agency designee. Until divestiture, the 
disqualification requirements of 5 CFR 2635.402 and 2635.502 remain in 
effect.

[61 FR 39903, July 31, 1996, as amended at 66 FR 60140, Dec. 3, 2001]

[[Page 797]]



          CHAPTER LII--EXPORT-IMPORT BANK OF THE UNITED STATES




  --------------------------------------------------------------------
Part                                                                Page
6201            Supplemental standards of ethical conduct 
                    for employees of the Export-Import Bank 
                    of the United States....................         799

[[Page 799]]



PART 6201_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

EXPORT-IMPORT BANK OF THE UNITED STATES--Table of Contents




Sec.
6201.101 General.
6201.102 Prohibited financial interests.
6201.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.403(a), 2635.803.

    Source: 60 FR 17626, Apr. 7, 1995, unless otherwise noted.



Sec. 6201.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Export-Import Bank of the United States (Bank) 
and supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, employees of the Bank are 
subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634.



Sec. 6201.102  Prohibited financial interests.

    (a) Prohibition. Except as provided in paragraph (f) of this 
section, no covered employee or covered family member shall own 
securities issued by an exporter or lending institution appearing on the 
List of Designated Entities under paragraph (b) of this section.
    (b) List of Designated Entities--(1) Compilation of list of 
designated entities. Once each fiscal year, the designated agency ethics 
official (DAEO) shall compile a List of Designated Entities based upon 
the following criteria:
    (i) All exporters that, during the preceding two fiscal years, 
exported an aggregate dollar volume of goods and services supported by 
the Bank in excess of four hundred million dollars ($400,000,000);
    (ii) All exporters that, during the preceding two fiscal years, had 
seven (7) or more aggregate export transactions supported by the Bank;
    (iii) All lending institutions that, during the preceding two fiscal 
years, financed an aggregate dollar volume of export transactions 
supported by the Bank in excess of one hundred fifty million dollars 
($150,000,000); and
    (iv) All lending institutions that, during the preceding two fiscal 
years, financed twenty (20) or more aggregate export transactions 
supported by the Bank.
    (2) Distribution of list of designated entities. The DAEO shall 
distribute the List of Designated Entities to all covered employees 
promptly after it is compiled, and shall ensure that each new covered 
employee receives a copy of the current List of Designated Entities 
promptly after becoming a covered employee.
    (c) Definitions. For purposes of this section:
    (1) Covered employee means an employee of the Bank, other than a 
special Government employee, who is required to file a public or a 
confidential financial disclosure report (Form SF 278 or SF 450) under 5 
CFR part 2634.
    (2) Covered family member means the spouse or minor child of a 
covered employee.
    (3) Securities means all financial interests evidenced by debt or 
equity instruments. The term includes, without limitation, bonds, 
debentures, notes, securitized assets and commercial paper, as well as 
all types of preferred and common stock. The term encompasses both 
present and contingent ownership interests, including any beneficial or 
legal interest derived from a trust. It extends to any right to acquire 
or dispose of any long or short position in such securities and 
includes, without limitation, interests convertible into such 
securities, as well as options, rights, warrants, puts, calls, and 
straddles with respect thereto. It does not include:
    (i) An investment in a publicly traded or publicly available mutual 
fund or other collective investment fund or in a widely held pension or 
similar fund, provided that the fund does not invest more than ten 
percent (10%) of the value of its portfolio in securities of

[[Page 800]]

any one entity on the List of Designated Entities and the covered 
employee or covered family member neither exercises control over nor has 
the ability to exercise control over the financial interests held in the 
fund; or
    (ii) Certificates of deposit, checking accounts, savings accounts 
and other deposit accounts.
    (4) Support by the Bank means:
    (i) Direct loans made by the Bank;
    (ii) Guarantees by the Bank of loans from lending institutions; or
    (iii) Insurance policies issued by the Bank under any of its 
insurance programs.
    (d) Restrictions arising from third party relationships. If a 
covered employee has knowledge that any of the entities described in 
paragraphs (d)(1) through (d)(6) of this section own any security that a 
covered employee or covered family member would be prohibited from 
owning by paragraph (a) of this section, the covered employee shall 
promptly report such interests to the DAEO. The DAEO may require the 
covered employee to terminate the third party relationship, undertake an 
appropriate disqualification, or take other appropriate action 
necessary, under the particular circumstances, to avoid a statutory 
violation or a violation of part 2635 of this title or of this part, 
including an appearance of misuse of position or loss of impartiality. 
This paragraph applies to any:
    (1) Partnership in which the covered employee or covered family 
member is a general partner;
    (2) Partnership in which the covered employee and/or covered family 
member(s) in the aggregate holds more than a ten percent limited 
partnership interest;
    (3) Closely held corporation in which the covered employee and/or 
covered family member(s) in the aggregate holds more than a ten percent 
(10%) equity interest;
    (4) Trust in which the covered employee or covered family member has 
a legal or beneficial interest;
    (5) Investment club or similar informal investment arrangement 
between the covered employee or covered family member and others; or
    (6) Other entity if the covered employee and/or covered family 
member(s) in the aggregate holds more than a ten percent (10%) equity 
interest.
    (e) Period to Divest. Unless a waiver is granted pursuant to 
paragraph (f) of this section, a covered employee or covered family 
member who owns securities of a designated entity as of the date that 
the initial List of Designated Entities is circulated to covered 
employees, the date that a revised List of Designated Entities is 
circulated to covered employees, or the first day that an individual 
becomes a covered employee, shall divest the securities within six (6) 
months of such date. The DAEO may, in certain cases of unusual hardship, 
grant a written extension of up to an additional six (6) months within 
which a covered employee or covered family member must divest securities 
of a designated entity. Notwithstanding the grant of an extension, a 
covered employee remains subject to the disqualification requirements of 
5 CFR 2635.402 and 2635.502. A covered employee or covered family member 
who must divest securities pursuant to this section should refer to 
section 1043 of the Internal Revenue Code and to the regulations of 
subpart J of 5 CFR part 2634 under which the covered employee or covered 
family member may be eligible to defer the recognition of taxable gain 
on the sale or other divestiture.
    (f) Waivers. The DAEO may grant a written waiver from the securities 
prohibition contained in this section based on a determination that the 
waiver is not inconsistent with 5 CFR part 2635 or otherwise prohibited 
by law and that, under the particular circumstances, application of the 
prohibition is not necessary to avoid the appearance of misuse of 
position or loss of impartiality, or otherwise to ensure confidence in 
the impartiality and objectivity with which Bank programs are 
administered. A waiver under this paragraph may be accompanied by 
appropriate conditions, such as requiring execution of a written 
statement of disqualification. Notwithstanding the grant of any waiver, 
a covered employee remains subject to the disqualification requirements 
of 5 CFR 2635.402 and 2635.502.

[[Page 801]]

    (g) Agency determinations of substantial conflict. Nothing in this 
section prevents the Bank from prohibiting or restricting an individual 
Bank employee from acquiring or holding a financial interest or a class 
of financial interests based upon the Bank's determination of 
substantial conflict pursuant to 5 CFR 2635.403(b).



Sec. 6201.103  Prior approval for outside employment.

    (a) Prior approval requirement. Before engaging in any outside 
employment, whether or not for compensation, an employee, other than a 
special Government employee, must obtain the written approval of the 
employee's immediate supervisor and the DAEO. Requests for approval 
shall be forwarded through normal supervisory channels to the DAEO and 
shall include the name of the person, group, or organization for whom 
the work is to be performed; the type of work to be performed; and the 
proposed hours of work and approximate dates of employment.
    (b) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment is not expected to involve 
conduct prohibited by statute or Federal regulation (including 5 CFR 
part 2635). In the case of an employee who wishes to practice a 
profession involving a fiduciary relationship, as defined in 5 CFR 
2636.305(b), approval will be granted only for each individual matter in 
the course of practicing such profession.
    (c) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee or teacher. It also includes writing when done 
under an arrangement with another person for production or publication 
of the written product. It does not, however, include participation in 
the activities of a nonprofit charitable, religious, professional, 
social, fraternal, educational, recreational, public service or civic 
organization, unless such activities involve the provision of 
professional services or advice or are for compensation other than 
reimbursement of expenses.

[[Page 803]]



                  CHAPTER LIII--DEPARTMENT OF EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
6301            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Education...............................         805

[[Page 805]]



PART 6301_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF EDUCATION--Table of Contents




Sec.
6301.101 General.
6301.102 Prior approval for certain outside activities.

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); E.O. 12674, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 
12731, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.803.



Sec. 6301.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Education and supplement the 
Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635.

[60 FR 5817, Jan. 30, 1995]



Sec. 6301.102  Prior approval for certain outside activities.

    (a) An employee, other than a special Government employee, must 
obtain written approval prior to engaging--with or without 
compensation--in the following outside activities:
    (1) Except as provided in paragraph (b)(1) of this section, 
providing services, other than clerical services or service as a fact 
witness, on behalf of any other person in connection with a particular 
matter:
    (i) In which the United States is a party;
    (ii) In which the United States has a direct and substantial 
interest; or
    (iii) If the provision of services involves the preparation of 
materials for submission to, or representation before, a Federal court 
or executive branch agency.
    (2) Except as provided in paragraph (b)(2) of this section:
    (i) Serving as an officer, director, trustee, general partner, 
agent, attorney, consultant, contractor, employee, advisory committee 
member, or active participant for a prohibited source; or
    (ii) Engaging in teaching, speaking, consulting, or writing that 
relates to the employee's official duties.
    (b) Unless the services are to be provided for compensation, 
including reimbursement for transportation, lodging and meals:
    (1) Prior approval is not required by paragraph (a)(1) of this 
section to provide services as an agent or attorney for, or otherwise to 
represent, another Department of Education employee who is the subject 
of disciplinary, loyalty, or other personnel administration proceedings 
in connection with those proceedings; and
    (2) Prior approval is not required by paragraph (a)(2) of this 
section:
    (i) To participate in the activities of a:
    (A) Social, fraternal, civic, or political entity;
    (B) Religious entity that is not a prohibited source; or
    (C) Parent-Teacher Association or similar parent organization at the 
employee's child's school or day care center, other than as a member of 
a board of directors or other governing body of the school or center, or 
the educational agency of which it is a part; or
    (ii) To provide direct instructional, social, or medical services to 
students or other individuals.
    (c) An employee who is required by paragraph (a) of this section to 
obtain prior written approval shall submit a written request for 
approval in accordance with Department procedures.
    (d) The cognizant reviewing official shall grant approval unless he 
or she determines that the outside activity is expected to involve 
conduct prohibited by statute or Federal regulations, including 5 CFR 
part 2635.
    (e) For the purposes of this section:
    (1) ``Active participant'' has the meaning set forth in 5 CFR 
2635.502(b)(1)(v).
    (2) ``Prohibited source'' has the meaning set forth in 5 CFR 
2635.203(d).
    (3) ``Relates to the employee's official duties'' means that the 
activity meets one or more of the tests described in 5 CFR 
2635.807(a)(2)(i) (B) through (E). It includes, in relevant part:
    (i) Activities an employee has been invited to participate in 
because of his or her official position rather than his or her expertise 
in the subject matter;
    (ii) A situation in which an employee has been asked to participate 
in an activity by a person or organization that

[[Page 806]]

has interests that may be substantially affected by the performance or 
nonperformance of the employee's official duties;
    (iii) Activities that convey information derived from nonpublic 
information gained during the course of Government employment; and
    (iv) Activities that deal in significant part with any matter to 
which the employee is or has been officially assigned in the last year, 
any ongoing or announced Department policy, program or operation, or--in 
the case of certain noncareer employees--any matter that is generally 
related to education or vocational rehabilitation.

    Example 1: A Department employee witnessed an automobile accident 
involving two privately owned cars on her way to work. Some time later 
she is served with a subpoena at home to appear in Federal court as a 
fact witness on behalf of the plaintiff, who was injured in the car 
accident, in a civil case alleging negligence. The Department employee 
is not required to obtain prior approval to comply with the subpoena 
because this civil case is not a matter in which the United States is a 
party or has a direct and substantial interest.
    Example 2: A Department employee would like to prepare Federal tax 
returns for clients on his own time. He is required to obtain prior 
approval to participate in this outside activity because it involves the 
provision of personal services in the preparation of materials for 
submission to the Internal Revenue Service, an executive branch agency.
    Example 3: Arlene, a Department employee, has been asked by a 
Department colleague to represent him, without compensation, in an equal 
employment opportunity complaint he filed alleging that his supervisor 
failed to promote him because he is over 40 years old. Arlene is not 
required to obtain prior approval under this regulation before providing 
such representation because it involves services for another Department 
of Education employee in connection with a personnel administration 
proceeding. However, under 18 U.S.C. section 205, she may only provide 
such representation if it is not inconsistent with faithful performance 
of her duties.
    Example 4: A local school board offers a Department employee a paid 
position as a referee of high school football games. The employee must 
seek prior approval to accept this outside employment because the local 
school board is a prohibited source. If, on the other hand, the employee 
volunteered to coach soccer, without pay, in a sports program sponsored 
by the local school board, no prior approval is required because she 
would be engaging in direct instructional services to students.
    Example 5: A Department program specialist in the Office of 
Elementary and Secondary Education actively pursues an interest in 
painting. The community art league, where he has taken evening art 
classes, asks him if he would be interested in teaching an evening 
course on painting with acrylics. The employee is not required to obtain 
approval prior to accepting this employment. The community art league is 
not a prohibited source, and the subject matter of the course is not 
related to his duties.
    Example 6: A Department employee helps organize local tennis 
tournaments. A national tennis magazine calls and asks her to write a 
monthly column about recreational tennis in her area. The magazine 
offers to pay the employee $500 for each column. The subject matter is 
not related to her duties, and the employee is not required to seek 
prior approval to write this column. However, the employee is still 
subject to all of the Standards of Conduct and other laws that may 
apply, including the limitation on outside earned income for certain 
noncareer employees, as well as the prohibition on using Government 
resources to pursue outside activities and employment.
    Example 7: An employee's elderly parent is retired and receiving 
Social Security benefits. The employee would like to represent his 
parent in an administrative hearing before the Social Security 
Administration concerning a dispute over benefits. The employee must 
obtain prior approval to undertake the activity of representing his 
parent because he is providing services to his parent in a particular 
matter in which the United States is a party. Moreover, the services 
will involve representation before a Federal agency.

[60 FR 5817, Jan. 30, 1995]

[[Page 807]]



              CHAPTER LIV--ENVIRONMENTAL PROTECTION AGENCY




  --------------------------------------------------------------------
Part                                                                Page
6401            Supplemental standards of ethical conduct 
                    for employees of the Environmental 
                    Protection Agency.......................         809

[[Page 809]]



PART 6401_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

ENVIRONMENTAL PROTECTION AGENCY--Table of Contents




Sec.
6401.101 General.
6401.102 Prohibited financial interests.
6401.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 42 U.S.C. 203(c)(1); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 
306; 5 CFR 2635.105, 2635.403(a), 2635.802(a), 2635.803.

    Source: 61 FR 40502, Aug. 2, 1996, unless otherwise noted.



Sec. 6401.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Environmental Protection Agency and supplement 
the Standards of Ethical Conduct for Employees of the Executive Branch 
contained in 5 CFR part 2635.



Sec. 6401.102  Prohibited financial interests.

    (a) The following employees are prohibited from holding the types of 
financial interests described in this section:
    (1) Employees in the Office of Mobile Sources are prohibited from 
having outside employment with or holding stock or any other financial 
interest in manufacturers of automobiles and mobile source pollution 
control equipment.
    (2) Employees in the Office of Pesticide Programs are prohibited 
from having outside employment with or holding stock or any other 
financial interest in companies that manufacture or provide wholesale 
distribution of pesticide products registered by the EPA. These 
restrictions apply to companies with subsidiaries in these areas but do 
not include retail distributors to the general public.
    (3) Employees in the Office of Information Resources Management 
involved with data management contracting or computer contracting are 
prohibited from having outside employment with or holding stock or any 
other financial interest in data management, computer, or information 
processing firms.
    (4) Employees who perform functions or duties under the Surface 
Mining Control and Reclamation Act (such as reviewing Environmental 
Impact Statements of the Office of Surface Mining in the Department of 
Interior) are prohibited by 30 U.S.C. 1211(f) from holding direct or 
indirect interests in underground or surface coal mining operations.
    (i) Implementing regulations of the Office of Surface Mining at 30 
CFR 706.3 define the terms ``direct financial interest'' and ``indirect 
financial interest'' as follows:
    (A) Direct financial interest means ownership or part ownership by 
an employee of land, stocks, bonds, debentures, warrants, a partnership, 
shares, or other holding and also means any other arrangement where the 
employee may benefit from his or her holding in or salary from coal 
mining operations. Direct financial interests include employment, 
pensions, creditor, real property and other financial relationships.
    (B) Indirect financial interest means the same financial 
relationships as for direct ownership but where the employee reaps the 
benefits of such interests, including interests held by the employee's 
spouse, minor child or other relatives, including in-laws, residing in 
the employee's home. The employee will not be deemed to have an indirect 
financial interest if there is no relationship between the employee's 
functions or duties and the coal mining operation in which the spouse, 
minor child or other resident relative holds a financial interest.
    (ii) Violation of the restrictions in this section is punishable by 
a fine of up to $2,500 or imprisonment for not more that one year, or 
both.
    (iii) Employees who perform functions or duties under the Surface 
Mining Control and Reclamation Act are not prohibited thereunder from 
holding interests in excepted investment funds as defined at 5 CFR 
2634.310(c)(2) provided that such funds are widely diversified, that is, 
hold no more than 5% of the value of their portfolios in the securities 
of any one issuer (other than the United States Government) and no

[[Page 810]]

more than 20% in any particular economic or geographic sector.
    (5) Members of the Interagency Testing Committee established under 
section 4(e) of the Toxic Substances Control Act (15 U.S.C. 2603(e)) are 
prohibited thereunder from holding any stocks or bonds, or having any 
substantial pecuniary interest, in any person engaged in the 
manufacture, processing, or distribution in commerce of any substance or 
mixture subject to any requirement of the Act or any rule or order 
issued under the Act and, for a period of twelve months after their 
committee service has ceased, are prohibited thereunder from accepting 
employment or compensation from any person subject to any requirement of 
the Act or to any rule or order issued under the Act.
    (i) The statutory prohibitions in this section are enforceable by an 
action for a court order to restrain violations.
    (ii) Members of the Interagency Testing Committee are not prohibited 
thereunder from holding interests in excepted investment funds as 
defined at 5 CFR 2634.310(c)(2) provided that such fund are widely 
diversified, that is, hold no more than 5% of the value of their 
portfolios in the securities of any one issuer (other than the United 
States Government) and no more than 20% in any particular economic 
sector.
    (b) The Designated Agency Ethics Official or the cognizant Deputy 
Ethics Official may grant a written waiver from the prohibitions in 
paragraph (a)(1) through (a)(3) of this section based on a determination 
that the waiver is not inconsistent with part 2635 of this title or 
otherwise prohibited by law and that, under the particular 
circumstances, application of the prohibition is not necessary to avoid 
the appearance of misuse of position or loss of impartiality, or 
otherwise to ensure confidence in the impartiality and objectivity with 
which agency programs are administered. A waiver under this paragraph 
may impose appropriate conditions, such as requiring execution of a 
written disqualification.



Sec. 6401.103  Prior approval for outside employment.

    (a) Requirement for approval. An employee shall obtain approval from 
his or her Deputy Ethics Official before engaging in outside employment, 
with or without compensation, that involves:
    (1) Consulting services;
    (2) The practice of a profession as defined in 5 CFR 2636.305(b)(1);
    (3) Holding State or local public office;
    (4) Subject matter that deals in significant part with the policies, 
programs or operations of EPA or any matter to which the employee 
presently is assigned or to which the employee has been assigned during 
the previous one-year period; or
    (5) The provision of services to or for:
    (i) An EPA contractor or subcontractor;
    (ii) The holder of an EPA assistance agreement or subagreement; or
    (iii) A firm regulated by the EPA office or Region in which the 
employee serves.
    (b) Form and content of request. The employee's request for approval 
of outside employment shall be submitted in writing to his or her Deputy 
Ethics Official. The request shall be sent through the employee's 
immediate supervisor (for the supervisor's information) and shall 
include:
    (1) Employee's name, title and grade;
    (2) Nature of the outside activity, including a full description of 
the services to be performed and the amount of compensation expected;
    (3) The name and business of the person or organization for which 
the work will be done (in cases of self-employment, indicate the type of 
services to be rendered and estimate the number of clients or customers 
anticipated during the next 6 months);
    (4) The estimated time to be devoted to the activity;
    (5) Whether the service will be performed entirely outside of normal 
duty hours (if not, estimate the number of hours of absence from work 
required);
    (6) The employee's statement that no official duty time or 
Government property, resources, or facilities not available to the 
general public will be used in connection with the outside employment;

[[Page 811]]

    (7) The basis for compensation (e.g., fee, per diem, per annum, 
etc.);
    (8) The employee's statement that he or she has read, is familiar 
with, and will abide by the restrictions described in 5 CFR part 2635 
and Sec. 6401.102; and
    (9) An identification of any EPA assistance agreements or contracts 
held by a person to or for whom services would be provided.
    (c) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment is not expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635 and Sec. 6401.102. The decision must be in writing.
    (d) Keeping the record up-to-date. If there is a change in the 
nature or scope of the duties or services performed or the nature of the 
employee's business, the employee must submit a revised request for 
approval. Where an employee transfers to an organization for which a 
different Deputy Ethics Official has responsibility, the employee must 
obtain approval from the new Deputy Ethics Official. In addition, each 
approved request is valid only for five years unless the employee's 
Deputy Ethics Official specifies a longer time period.
    (e) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment, business 
relationship, or activity involving the provision of personal services 
by the employee, whether or not for compensation. It includes but is not 
limited to personal services as an officer, director, employee, agent, 
attorney, consultant, contractor, general partner, trustee, teacher, or 
speaker. It includes writing when done under an arrangement with another 
person for production or publication of the written product. It does 
not, however, include participation in the activities of nonprofit 
charitable, religious, professional, social, fraternal, educational, 
recreational, public service, or civic organizations, unless such 
activities are for compensation other than reimbursement for expenses.

[[Page 813]]



               CHAPTER LV--NATIONAL ENDOWMENT FOR THE ARTS




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PART 6501_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NATIONAL ENDOWMENT FOR THE ARTS--Table of Contents




Sec.
6501.101 General.
6501.102 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301, 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.

    Source: 68 FR 52682, Sept. 5, 2003, unless otherwise noted.



Sec. 6501.101  General.

    In accordance with 5 CFR 2635.105, the regulations of this part 
apply to employees of the National Endowment for the Arts (NEA) and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition to the 
regulations in 5 CFR part 2635 and this part, employees of the NEA are 
subject to the executive branch employee responsibilities and conduct 
regulations at 5 CFR part 735, the executive branch financial disclosure 
regulations at 5 CFR part 2634, and the executive branch financial 
interests regulations at 5 CFR part 2640.



Sec. 6501.102  Prior approval for outside employment.

    (a) Before engaging in any outside employment with a prohibited 
source within the meaning of 5 CFR 2635.203(d), whether or not for 
compensation, an employee other than a special Government employee must 
obtain written approval from his or her immediate supervisor and the 
Designated Agency Ethics Official. The request for approval shall 
include the following:
    (1) The name of the person, group or other organization for whom the 
work is to be performed, the type of work to be performed, and the 
proposed hours of work and approximate dates of employment; and
    (2) A description of the employee's NEA responsibilities and the 
employee's certification that the outside employment will not depend on 
nonpublic information obtained as a result of the employee's official 
Government position and that no official duty time or Government 
property, resources, or facilities not available to the general public 
will be used in connection with the outside employment.
    (b) Approval shall be granted only upon determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation, including 5 CFR part 2635.
    (c) Outside employment means any form of compensated or 
uncompensated non-Federal employment or business relationship involving 
the provision of personal services by the employee. It includes, but is 
not limited to personal services such as an officer, director, employee, 
agent, attorney, consultant, contractor, general partner, trustee, 
teacher or speaker. It includes writing when done under an arrangement 
with another person for production or publication of the written 
product.

[[Page 817]]



           CHAPTER LVI--NATIONAL ENDOWMENT FOR THE HUMANITIES




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                    for the Humanities......................         819

[[Page 819]]



PART 6601_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NATIONAL ENDOWMENT FOR THE HUMANITIES--Table of Contents




Sec.
6601.101 General.
6601.102 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301, 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.

    Source: 68 FR 52684, Sept. 5, 2003, unless otherwise noted.



Sec. 6601.101  General.

    In accordance with 5 CFR part 2635.105, the regulations of this part 
apply to employees of the National Endowment for the Humanities (NEH) 
and supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition to the 
regulations in 5 CFR part 2635 and this part, employees of the NEH are 
subject to the executive branch employee responsibilities and conduct 
regulations at 5 CFR part 735, the executive branch financial disclosure 
regulations at 5 CFR part 2634, and the executive branch financial 
interests regulations at 5 CFR part 2640.



Sec. 6601.102  Prior approval for outside employment.

    (a) Before engaging in any outside employment with a prohibited 
source within the meaning of 5 CFR 2635.203(d), whether or not for 
compensation, an employee other than a special Government employee must 
obtain written approval from his or her immediate supervisor and the 
Designated Agency Ethics Official. The request for approval shall 
include the following:
    (1) A brief description of the employee's official duties, a brief 
description of the proposed outside employment (including the name of 
the person, group or other organization for whom the work is to be 
performed), and a brief description of the employee's discipline or 
inherent area of expertise based on experience or educational 
background; and
    (2) Responses to the following questions:
    (i) Whether the proposed outside employment will draw on non-public 
information or pertain to a matter to which the employee is presently 
assigned or has been assigned within the last year;
    (ii) Whether the proposed outside employment pertains to an ongoing 
or announced agency policy or program;
    (iii) Whether the proposed outside employment will involve teaching 
a course which is part of the established curriculum of an accredited 
institution of higher education, secondary school, elementary school, or 
an education or training program sponsored by a Federal, State or local 
government entity;
    (iv) Whether the sponsor of the proposed outside employment has any 
interests before the NEH that may be substantially affected by the 
performance or nonperformance of the employee's duties;
    (v) Whether the employee intends to refer to his or her official NEH 
position during the proposed outside employment, and, if so, the text of 
any disclaimers that he or she will use; and
    (vi) Whether the employee will receive any payment or compensation 
for the proposed activity, and, if so, how much.
    (b) Approval shall be granted only upon determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation, including 5 CFR part 2635.
    (c) Outside employment means any form of compensated or 
uncompensated non-Federal employment or business relationship involving 
the provision of personal services by the employee. It includes, but is 
not limited to, personal services such as acting as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, trustee, teacher or speaker. It includes writing done under 
arrangement with another person for production or publication of any 
written product.

[[Page 821]]



              CHAPTER LVII--GENERAL SERVICES ADMINISTRATION




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6701            Supplemental standards of ethical conduct 
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                    Administration..........................         823

[[Page 823]]



PART 6701_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

GENERAL SERVICES ADMINISTRATION--Table of Contents




Sec.
6701.101 General.
6701.102 Prohibition on solicited sales to subordinates.
6701.103 Prohibited purchases of property sold by GSA.
6701.104 Prohibited purchases of real estate by certain GSA employees 
          involved in the acquisition or disposal of real estate.
6701.105 Taking or disposing of Government property.
6701.106 Prior approval for outside employment.
6701.107 Reporting waste, fraud, abuse and corruption.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.702, 2635.703, 2635.802, 2635.803.

    Source: 61 FR 56401, Nov. 1, 1996, unless otherwise noted.



Sec. 6701.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the General Services Administration (GSA) and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch (Standards) contained in 5 CFR part 2635. In addition 
to the executive branch-wide Standards in 5 CFR part 2635 and this part, 
GSA employees are subject to the executive branch financial disclosure 
regulations contained in 5 CFR part 2634.



Sec. 6701.102  Prohibition on solicited sales to subordinates.

    A GSA employee shall not engage in solicitation of sales, on or off 
duty, to any GSA employee under his supervision, at any level. This 
prohibition applies, but is not limited to, solicitation for the sale of 
insurance, stock, mutual funds, real estate, computer equipment and any 
other commodities, goods or services except:
    (a) The one-time sale of the employee's personal property or 
privately owned dwelling; or
    (b) Sales made in the course of outside employment of GSA employees 
in retail stores and under other circumstances not involving 
solicitation.



Sec. 6701.103  Prohibited purchases of property sold by GSA.

    (a) General prohibition. Except as provided in paragraphs (b) and 
(c) of this section, no GSA employee, or spouse or minor child of a GSA 
employee, shall purchase, directly or indirectly Government property, 
real or personal, being sold by GSA.
    (b) Exception. The prohibition in paragraph (a) of this section does 
not apply to the purchase of foreign gifts deposited with the agency 
pursuant to 5 U.S.C. 7342, that an employee may purchase pursuant to 41 
CFR part 101-49.
    (c) Waiver. An employee may make a purchase otherwise prohibited by 
paragraph (a) of this section where a written waiver of the prohibition 
has been given to the employee by the Administrator of GSA or his 
designee. Such a waiver may be granted only upon a determination that 
the waiver is not otherwise prohibited by law and that, in the mind of a 
reasonable person with knowledge of the particular circumstances, the 
purchase of the property will not raise a question as to whether the 
employee has used his official position or nonpublic information to 
obtain an advantageous purchase or create an appearance of loss of 
impartiality in the performance of the employee's duties.



Sec. 6701.104  Prohibited purchases of real estate by certain GSA employees 

involved in the acquisition or disposal of real estate.

    (a) General prohibition. Except as provided in paragraphs (b) and 
(c) of this section, employees who personally and substantially 
participate in or have official responsibility for the acquisition or 
disposal of real estate or interests therein, shall not directly or 
indirectly purchase or participate as an agent or otherwise in the 
purchase of any real estate or interest therein.
    (b) Exception. The prohibition in paragraph (a) of this section does 
not apply to an employee's purchase of real estate for use as his 
personal or other

[[Page 824]]

residential property, such as a vacation home.
    (c) Waiver. An employee may make a purchase otherwise prohibited by 
this section where a written waiver of the prohibition has been given to 
the employee by the employee's immediate supervisor, with the advice of 
a Deputy Standards of Conduct Counsellor or the Designated Agency Ethics 
Official. Such a waiver may be granted only if a determination is made 
that the waiver is not otherwise prohibited by law or regulation, and 
that in the mind of a reasonable person with knowledge of the particular 
circumstances, the purchase of such real estate or interest therein will 
not raise a question as to whether the employee will use his official 
position or nonpublic information to obtain an advantageous purchase or 
create an appearance of loss of impartiality in the performance of the 
employee's duties.



Sec. 6701.105  Taking or disposing of Government property.

    An employee shall not, directly or indirectly, take or dispose of, 
or allow the taking or disposal of, Government property, unless 
authorized to do so. For purposes of this section, property remains 
Government property until disposed of in accordance with applicable 
rules and regulations.



Sec. 6701.106  Prior approval for outside employment.

    (a) Approval requirement. A GSA employee, other than a special 
Government employee, shall obtain written approval from his immediate 
supervisor prior to engaging in outside employment with a prohibited 
source, with or without compensation.
    (b) Form of request for approval. A request for approval of outside 
employment shall include, at a minimum, the following:
    (1) The employee's name, location and occupational title;
    (2) A brief description of the employee's official duties;
    (3) The nature of the outside employment, including a full 
description of the specific duties or services to be performed;
    (4) The name and address of the prospective outside employer for 
which work will be done; and
    (5) A statement that the employee currently has no official duties 
involving a matter that affects the outside employer and will disqualify 
himself from future participation in matters that could directly affect 
the outside employer.
    (c) Standard for approval. Approval shall be granted unless a 
determination is made that the outside employment is expected to involve 
conduct prohibited by statute or regulation, including 5 CFR part 2635 
and this part.
    (d) Definitions. For purposes of this section:
    (1) Employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee, teacher, or speaker. It includes writing done 
under an arrangement with another person for production or publication 
of the written product. It does not, however, include participation in 
the activities of a nonprofit charitable, religious, professional, 
social, fraternal, educational, recreational, public service, or civic 
organization, unless the participation involves the provision of 
professional services or advice for compensation other than 
reimbursement for actual expenses.
    (2) Prohibited source has the meaning in 5 CFR 2635.203(d), and 
includes any person who:
    (i) Is seeking official action by GSA;
    (ii) Does business or seeks to do business with GSA;
    (iii) Conducts activities regulated by GSA;
    (iv) Has interests that may be substantially affected by performance 
or nonperformance of the employee's official duties; or
    (v) Is an organization a majority of whose members are described in 
paragraphs (d)(2)(i) through (iv) of this section.

    Note to Sec. 6701.106: An employee may obtain advice from an agency 
ethics official as to whether a potential employer is a prohibited 
source.

[[Page 825]]



Sec. 6701.107  Reporting waste, fraud, abuse and corruption.

    GSA employees shall disclose immediately any waste, fraud, abuse, 
and corruption to appropriate authorities, such as the Office of 
Inspector General.

[[Page 827]]



     CHAPTER LVIII--BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM




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                    for employees of the Board of Governors 
                    of the Federal Reserve System...........         829

[[Page 829]]



PART 6801_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE BOARD 

OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM--Table of Contents




Sec.
6801.101 Purpose.
6801.102 Definitions.
6801.103 Prohibited financial interests.
6801.104 Speculative dealings. [Reserved]
6801.105 Prohibition on preferential terms from regulated institutions.
6801.106 Prohibition on supervisory employees' seeking credit from 
          institutions involved in work assignments.
6801.107 Disqualification of supervisory employees from matters 
          involving lenders.
6801.108 Restrictions resulting from employment of family members.
6801.109 Prior approval for compensated outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 12 U.S.C. 244, 248; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p.215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p.306; 
5 CFR 2635.105, 2635.403(a), 2635.502, 2635.803.

    Source: 61 FR 53828, Oct. 16, 1996, unless otherwise noted.



Sec. 6801.101  Purpose.

    In accordance with 5 CFR 2635.105, the regulations in this part 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch found at 5 CFR part 2635. They apply to members and 
other employees of the Board of Governors of the Federal Reserve System 
(``Board'').



Sec. 6801.102  Definitions.

    For purposes of this part:
    (a) Affiliate means any company that controls, is controlled by, or 
is under common corporate control with another company.
    (b) (1) Debt or equity interest includes secured and unsecured 
bonds, debentures, notes, securitized assets, commercial paper, and 
preferred and common stock. The term encompasses both current and 
contingent ownership interests therein; any such beneficial or legal 
interest derived from a trust; any right to acquire or dispose of any 
long or short position in debt or equity interests; any interests 
convertible into debt or equity interests; and any options, rights, 
warrants, puts, calls, straddles, and derivatives with respect thereto.
    (2) Debt or equity interest does not include deposits; credit union 
shares; any future interest created by someone other than the employee, 
his or her spouse, or dependent; or any right as a beneficiary of an 
estate that has not been settled.
    (c) Dependent child means an employee's son, daughter, stepson, or 
stepdaughter if:
    (1) Unmarried, under the age of 21, and living in the employee's 
household; or
    (2) Claimed as a ``dependent'' on the employee's income tax return.
    (d) Depository institution means a bank, trust company, thrift 
institution, or any institution that accepts deposits, including a bank 
chartered under the laws of a foreign country.
    (e) Employee means an officer or employee of the Board, including a 
Board member. It does not include a special Government employee.
    (f) Primary government securities dealer means a firm with which the 
Federal Reserve conducts its open market operations.
    (g) Supervisory employee means an employee who is a member of the 
professional staff at the Board with responsibilities in the area of 
banking supervision and regulation.



Sec. 6801.103  Prohibited financial interests.

    (a) Prohibited interests. Except as permitted by this section, an 
employee, or an employee's spouse or minor child, shall not own or 
control, directly or indirectly, any debt or equity interest in:
    (1) A depository institution or any of its affiliates; or
    (2) A primary government securities dealer or any of its affiliates, 
if such employee has regular, ongoing access to Class I Federal Open 
Market Committee information.
    (b) Exceptions. The prohibition in paragraph (a) of this section 
does not apply to the ownership or control of a debt or equity interest 
in the following:
    (1) Nonbanking holding companies. A publicly traded holding company 
that:
    (i) Owns a bank and either the holding company or the bank is exempt

[[Page 830]]

under the Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq., (for 
example, a credit card bank, a nonbank bank or a grandfathered bank 
holding company), and the holding company's predominant activity is not 
the ownership or operation of banks and thrifts;
    (ii) Owns a thrift and its predominant activity is not the ownership 
or operation of banks and thrifts; or
    (iii) Owns a primary government securities dealer and its 
predominant activity is not the ownership or operation of banks, thrifts 
or securities firms.
    (2) Mutual funds. A publicly traded or publicly available mutual 
fund or other collective investment fund if:
    (i) The fund does not have a stated policy of concentration in the 
financial services industry; and
    (ii) Neither the employee nor the employee's spouse exercises or has 
the ability to exercise control over the financial interests held by the 
fund or their selection.
    (3) Pension plans. A widely held, diversified pension or other 
retirement fund that is administered by an independent trustee.
    (c) Waivers. The Board's Designated Agency Ethics Official, in 
consultation with Division management, may grant a written waiver 
permitting the employee to own or control a debt or equity interest 
prohibited by paragraph (a) of this section if:
    (1) Extenuating circumstances exist, such as that ownership or 
control was acquired:
    (i) Prior to Federal Reserve employment;
    (ii) Through inheritance, gift, merger, acquisition, or other change 
in corporate structure, or otherwise without specific intent on the part 
of the employee, spouse, or minor child to acquire the debt or equity 
interest; or
    (iii) By an employee's spouse as part of a compensation package in 
connection with the spouse's employment or prior to marriage to the 
employee;
    (2) The employee makes a prompt and complete written disclosure of 
the interest;
    (3) The employee's disqualification from participating in any 
particular matter having a direct and predictable effect on the 
institution or any of its affiliates does not unduly interfere with the 
full performance of the employee's duties; and
    (4) Granting the waiver would be consistent with Division policy.
    (d) Disqualification. If an employee or an employee's spouse or 
minor child holds an interest in an entity under paragraph (b)(1) or (c) 
of this section, the employee must consult the Designated Agency Ethics 
Official in order to determine whether the employee must be disqualified 
from participating in any particular matter involving that entity or 
affiliate under the conflicts of interest rules of the Office of 
Government Ethics.

[61 FR 53828, Oct. 16, 1996, as amended at 64 FR 68616, Dec. 8, 1999]



Sec. 6801.104  Speculative dealings. [Reserved]



Sec. 6801.105  Prohibition on preferential terms from regulated institutions.

    An employee may not accept a loan from, or enter into any other 
financial relationship with, an institution regulated by the Board, if 
the loan or financial relationship is governed by terms more favorable 
than would be available in like circumstances to members of the public.



Sec. 6801.106  Prohibition on supervisory employees' seeking credit from 

institutions involved in work assignments.

    (a) Prohibition on supervisory employee's seeking credit. (1) A 
supervisory employee may not, on his or her own behalf, or on behalf of 
his or her spouse or child or anyone else (including any business or 
nonprofit organization), seek or accept credit from, or renew or 
renegotiate credit with, a depository institution or any of its 
affiliates if the institution or affiliate is a party to an application, 
enforcement action, investigation, or other particular matter involving 
specific parties pending before the Board and:
    (i) The supervisory employee is assigned to the matter; or
    (ii) The supervisory employee is aware of the pendency of the matter 
and knows that he or she will participate in the matter by action, 
advice or recommendation.

[[Page 831]]

    (2) The prohibition in paragraph (a)(1) of this section also applies 
for three months after the supervisory employee's participation in the 
matter has ended.
    (b) Credit sought by spouse and other related persons. A supervisory 
employee must disqualify himself or herself from participating (by 
action, advice or recommendation) in any application, enforcement 
action, investigation or other particular matter involving specific 
parties to which a depository institution or any of its affiliates is a 
party as soon as the supervisory employee learns that any of the 
following related persons are seeking or have sought or accepted credit 
from, or have renewed or renegotiated credit with, the depository 
institution or any of its affiliates while the matter is pending before 
the Board:
    (1) The employee's spouse or dependent child;
    (2) A company or business if the employee or the employee's spouse 
or dependent child owns or controls more than 10 percent of its equity; 
or
    (3) A partnership if the employee, or the employee's spouse or 
dependent child is a general partner.
    (c) Exception. The prohibition in paragraph (a) of this section and 
the disqualification requirement in paragraph (b) of this section do not 
apply with respect to credit obtained through the use of a credit card 
or overdraft protection on terms and conditions available to the public.
    (d) Waivers. The Board's Designated Agency Ethics Official, after 
consulting with the relevant division director, may grant a written 
waiver from the prohibition in paragraph (a) of this section, or the 
disqualification requirement in paragraph (b) of this section, based on 
a determination that participation in matters otherwise prohibited by 
this section would not create an appearance of loss of impartiality or 
use of public office for private gain, and would not otherwise be 
inconsistent with the Office of Government Ethics' Standards of Ethical 
Conduct for Employees of the Executive Branch (5 CFR part 2635) or 
prohibited by law.



Sec. 6801.107  Disqualification of supervisory employees from matters 

involving lenders.

    (a) Disqualification required. A supervisory employee may not 
participate by action, advice or recommendation in any application, 
enforcement action, investigation, or other particular matter involving 
specific parties to which a depository institution or its affiliate is a 
party if any of the following are indebted to the depository institution 
or any of its affiliates:
    (1) The employee;
    (2) The spouse or dependent child of the employee;
    (3) A company or business if the employee or the employee's spouse 
or dependent child owns or controls more than 10 percent of its equity; 
or
    (4) A partnership if the employee or the employee's spouse or 
dependent child is a general partner.
    (b) Exceptions--(1) Consumer credit on nonpreferential terms. 
Disqualification of a supervisory employee is not required by paragraph 
(a) of this section for the following types of indebtedness if payment 
on the indebtedness is current and the indebtedness is on terms and 
conditions offered to the public:
    (i) Credit extended through the use of a credit card;
    (ii) Credit extended through use of an overdraft protection line;
    (iii) Amortizing consumer credit (e.g., home mortgage loans, 
automobile loans); and
    (iv) Credit extended under home equity lines of credit.
    (2) Indebtedness of a spouse or dependent child. Disqualification is 
not required with respect to any indebtedness of the employee's spouse 
or dependent child, or a company, business or partnership in which the 
spouse or dependent child has an interest described in paragraphs (a)(3) 
and (a)(4) of this section, if:
    (i) The indebtedness represents the sole financial interest or 
responsibility of the spouse, child, company, business or partnership 
and is not derived from the employee's income, assets or activities; and
    (ii) The employee has no knowledge of the identity of the lender.

[[Page 832]]

    (c) Waivers. The Board's Designated Agency Ethics Official, after 
consulting with the relevant Division director, may grant a written 
waiver from the disqualification requirement in paragraph (a) of this 
section using the authorization process set forth in the Office of 
Government Ethics' Standards of Ethical Conduct at 5 CFR 2635.502(d).



Sec. 6801.108  Restrictions resulting from employment of family members.

    A supervisory employee may not participate in any particular matter 
to which a depository institution or its affiliate is a party if the 
depository institution or affiliate employs his or her spouse, child, 
parent or sibling unless the supervising officer, with the concurrence 
of the Board's Designated Agency Ethics Official, has authorized the 
employee to participate in the matter using the authorization process 
set forth in the Office of Government Ethics' Standards of Ethical 
Conduct at 5 CFR 2635.502(d).



Sec. 6801.109  Prior approval for compensated outside employment.

    (a) Approval requirement. An employee shall obtain prior written 
approval from his or her Division director (or the Division director's 
designee) and the concurrence of the Board's Designated Agency Ethics 
Official before engaging in compensated outside employment.
    (b) Standard for approval. Approval will be granted unless a 
determination is made that the prospective outside employment is 
expected to involve conduct prohibited by statute or Federal regulation, 
including 5 CFR part 2635 and this part.
    (c) Definition of employment. For purposes of this section, the term 
compensated outside employment means any form of compensated non-Federal 
employment or business relationship involving the provision of personal 
services by the employee. It includes, but is not limited to, personal 
services as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner, trustee, teacher or speaker.

[[Page 833]]



       CHAPTER LIX--NATIONAL AERONAUTICS AND SPACE ADMINISTRATION




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Part                                                                Page
6901            Supplemental standards of ethical conduct 
                    for employees of the National 
                    Aeronautics and Space Administration....         835

[[Page 835]]



PART 6901_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION--Table of Contents




Sec.
6901.101 General.
6901.102 [Reserved]
6901.103 Outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 42 U.S.C. 2473(c)(1); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 
306; 5 CFR 2635.105, 2635.403(a), 2635.802(a), 2635.803.

    Source: 59 FR 49336, Sept. 28, 1994, unless otherwise noted.



Sec. 6901.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the National Aeronautics and Space Administration 
(NASA) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, employees are subject to the 
executive branch financial disclosure regulations contained in 5 CFR 
part 2634, and to additional regulations regarding their conduct 
contained in 5 CFR part 735 and 14 CFR part 1207.



Sec. 6901.102  [Reserved]



Sec. 6901.103  Outside employment.

    (a) General. A NASA employee shall not engage in outside employment 
prohibited by paragraph (c) of this section and shall obtain approval 
before engaging in the outside employment activities specified in 
paragraph (d) of this section.
    (b) Definitions. For purposes of this section:
    (1) Key official means an officer or employee, other than a special 
Government employee, who is required, in accordance with 5 CFR part 
2634, to file a public financial disclosure report or who holds a 
position as astronaut, astronaut candidate, procurement officer, or 
chief counsel.
    (2) Outside employment means any form of compensated or 
uncompensated non-Federal employment or business relationship involving 
the provision of personal services by the employee. It includes, but is 
not limited to, personal services as an officer, director, employee, 
agent, attorney, consultant, contractor, general partner, trustee, 
teacher, or speaker. It includes writing when done under an arrangement 
with another person for production or publication of the written 
product. It does not, however, include participation in the activities 
of a nonprofit charitable, religious, professional, social, fraternal, 
educational, recreational, public service, or civic organization, unless 
the organization is a prohibited source or unless such activities 
involve the provision of professional services or advice, or are for 
compensation other than reimbursement of expenses.
    (3) Profession has the meaning set forth in 5 CFR 2636.305(b)(1).
    (4) Prohibited source has the meaning set forth in 5 CFR 
2635.203(d).
    (c) Prohibited outside employment. A NASA employee, other than a 
special Government employee, shall not engage in outside employment with 
the following:
    (1) A NASA contractor, subcontractor, or grantee in connection with 
work performed by that entity for NASA; or
    (2) A party to a Space Act agreement, Commercial Launch Act 
agreement, or other agreement to which NASA is a party pursuant to 
specific statutory authority, if the employment is in connection with 
work performed under that agreement.
    (d) Prior approval for outside employment. A NASA employee, other 
than a special Government employee, shall request and obtain 
administrative approval before engaging in the following outside 
employment activities:
    (1) Teaching, speaking, writing, or editing, unless the subject 
matter pertains to the private interests of the employee, such as a 
hobby, cultural activity, or nonwork related professional pursuit;
    (2) The practice of a profession or the rendering of professional 
consulting services;
    (3) The management or conduct of a business in which the employee or 
the employee's spouse has an ownership interest;

[[Page 836]]

    (4) Holding a State or local public office, whether by election or 
appointment;
    (5) Employment with a NASA contractor, subcontractor, or grantee;
    (6) Employment with a party to a Space Act agreement, Commercial 
Launch Act agreement, or other agreement to which NASA is a party 
pursuant to specific statutory authority;
    (7) Serving as an officer, trustee, or member of a board, 
directorate, or other such body of a for profit organization or of a 
nonprofit organization that is a prohibited source; or
    (8) Employment which involves the practice of a NASA-owned 
invention.
    (e) Prior approval requested by employee. Even when not required by 
paragraph (d) of this section, a NASA employee who is in doubt as to the 
propriety of outside employment or another outside activity may request 
prior approval using the procedures set forth in this section.
    (f) Form of request for approval. (1) A request for administrative 
approval of outside employment shall be in writing and shall include the 
following:
    (i) The employee's name and occupational title;
    (ii) The nature of the employment, including a full description of 
the specific duties or services to be performed;
    (iii) The name and address of the person or organization for which 
work will be done;
    (iv) The estimated total time that will be devoted to the activity. 
If the employment is on a continuing basis, indicate the estimated 
number of hours per year; for other employment, indicate the anticipated 
beginning and ending date;
    (v) A statement as to whether the work can be performed entirely 
outside of the employee's regular duty hours and, if not, the estimated 
number of hours of absence from work that will be required;
    (vi) The amount of compensation, if any, to be received; and
    (vii) A statement that the employee currently has no official duties 
involving a matter that affects the outside employer and will disqualify 
from future participation in matters that could directly affect the 
outside employer.
    (2) Locally prepared forms providing for collection of the 
information required by paragraph (f)(1) of this section may be used for 
submission of the request and subsequent approval or disapproval.
    (g) Approval of requests--(1) Key Officials. The Headquarters 
Associate Administrator for Human Resources and Education has authority 
to approve requests for approval of outside employment submitted by NASA 
Key Officials. Prior to approval or disapproval, Key Official requests 
shall be submitted to the appropriate Official-in-charge of the 
Headquarters Office or to the Director of the appropriate Field or 
Component Installation, who shall add a recommendation and forward the 
request through the General Counsel to the Associate Administrator.
    (2) Employees other than Key Officials. The appropriate Official-in-
Charge of a Headquarters Office, or the Director of a Field or Component 
Installation, or a person designated to act for the Director, has 
authority to approve requests for approval of outside employment 
submitted by employees other than NASA Key Officials. Prior to approval 
or disapproval:
    (i) Requests by NASA Headquarters personnel shall be submitted to 
and reviewed by the employee's supervisor and by the Office of the 
Associate General Counsel (General); and
    (ii) Requests by Field or Component Installation personnel shall be 
submitted to and reviewed by the employee's supervisor and by a Deputy 
Ethics Official or designee.
    (3) Standard for approval. Approval will be granted unless a 
determination is made that the prospective outside employment is 
expected to involve conduct prohibited by statute or Federal regulation, 
including 5 CFR part 2635 and this part.
    (4) Scope of approval. Approval will be for a period not to exceed 3 
years. Upon a significant change in the nature or scope of the outside 
employment or in the employee's NASA position, the employee shall submit 
a revised request for approval.
    (5) Notification of approval or disapproval. Employees will be 
notified in writing of the action taken on their requests.

[[Page 837]]

    (6) Records of requests. All requests for approval will be 
maintained in the local Human Resources/Personnel Office for the 
duration of the requester's NASA employment.

[[Page 839]]



                CHAPTER LX--UNITED STATES POSTAL SERVICE




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7001            Supplemental standards of ethical conduct 
                    for employees of the United States 
                    Postal Service..........................         841

[[Page 841]]



PART 7001_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

UNITED STATES POSTAL SERVICE--Table of Contents




Sec.
7001.101 General.
7001.102 Restrictions on outside employment and business activities.
7001.103 Statutory prohibition against interests in contracts to carry 
          mail and acting as agent for contractors.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 39 U.S.C. 401; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.802, and 2635.803.

    Source: 60 FR 47240, Sept. 11, 1995, unless otherwise noted.



Sec. 7001.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635, as applied to employees 
of the United States Postal Service (Postal Service). Postal Service 
employees are subject, in addition to the standards in 5 CFR part 2635 
and this part, to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634, and to any rules of conduct issued 
separately by the Postal Service, including but not limited to 
regulations contained in 39 CFR part 447, the Postal Service's Employee 
and Labor Relations Manual, and the Postal Service's Procurement Manual.



Sec. 7001.102  Restrictions on outside employment and business activities.

    (a) Prohibited outside employment and business activities. No Postal 
Service employee shall:
    (1) Engage in outside employment or business activities with or for 
a person, including oneself, engaged in:
    (i) The manufacture of any uniform or other product required by the 
Postal Service for use by its employees or customers;
    (ii) The transportation of mail under Postal Service contract to or 
from the postal facility at which the employee works, or to or from a 
postal facility within the delivery area of a post office in which the 
employee works;
    (iii) Providing consultation, advice, or any subcontracting service, 
with respect to the operations, programs, or procedures of the Postal 
Service, to any person who has a contract with the Postal Service or who 
the employee has reason to believe will compete for such a contract; or
    (iv) The operation of a commercial mail receiving agency registered 
with the Postal Service, or the delivery outside the mails of any type 
of mailable matter, except daily newspapers; or
    (2) Engage in any sales activity, including the solicitation of 
business or the receipt of orders, for oneself or any other person, 
while on duty or in uniform, or at any postal facility.
    (b) Prior approval for outside employment and business activities--
(1) Requirement for approval. A Postal Service employee shall obtain 
approval, in accordance with paragraph (b)(2) of this section, prior to:
    (i) Engaging in outside employment or business activities with or 
for any person with whom the employee has official dealings on behalf of 
the Postal Service; or
    (ii) Engaging in outside employment or business activities, with or 
for a person, including oneself, whose interests are:
    (A) Substantially dependent upon, or potentially affected to a 
significant degree by, postal rates, fees, or classifications; or
    (B) Substantially dependent upon providing goods or services to, or 
for use in connection with, the Postal Service.
    (2) Submission and contents of request for approval. An employee who 
wishes to engage in outside employment or business activities for which 
prior approval is required by paragraph (b)(1) of this section shall 
submit a written request for approval to the Postal Service Ethical 
Conduct Officer or appropriate delegate. The request shall be 
accompanied by a statement from the employee's supervisor briefly 
summarizing the employee's duties and stating any workplace concerns 
raised by the employee's request for approval. The request for approval 
shall include:

[[Page 842]]

    (i) A brief description of the employee's official duties;
    (ii) The name of the outside employer, or a statement that the 
employee will be engaging in employment or business activities on his or 
her own behalf;
    (iii) The type of employment or business activities in which the 
outside employer, if any, is engaged;
    (iv) The type of services to be performed by the employee in 
connection with the outside employment or business activities;
    (v) A description of the employee's official dealings, if any, with 
the outside employer on behalf of the Postal Service; and
    (vi) Any additional information requested by the Ethical Conduct 
Officer or delegate that is needed to determine whether approval should 
be granted.
    (3) Standard for approval. The approval required by paragraph (b)(1) 
of this section shall be granted only upon a determination that the 
outside employment or business activity will not involve conduct 
prohibited by statute or federal regulation, including 5 CFR part 2635, 
which includes, among other provisions, the principle stated at 5 CFR 
2635.101(b)(14) that employees shall endeavor to avoid any actions 
creating the appearance that they are violating the law or the ethical 
standards set forth in part 2635.
    (c) Definitions. For purposes of this section:
    (1) Outside employment or business activity means any form of 
employment or business, whether or not for compensation. It includes, 
but is not limited to, the provision of personal services as officer, 
employee, agent, attorney, consultant, contractor, trustee, teacher, or 
speaker. It also includes, but is not limited to, engagement as 
principal, proprietor, general partner, holder of a franchise, operator, 
manager, or director. It does not include equitable ownership through 
the holding of publicly traded shares of a corporation.
    (2) A person having interests substantially dependent upon, or 
potentially affected to a significant degree by, postal rates, fees, or 
classifications includes a person:
    (i) Primarily engaged in the business of publishing or distributing 
a publication mailed at second-class rates of postage;
    (ii) Primarily engaged in the business of sending advertising, 
promotional, or other material on behalf of other persons through the 
mails;
    (iii) Engaged in a business that depends substantially upon the 
mails for the solicitation or receipt of orders for, or the delivery of, 
goods or services; or
    (iv) Who is, or within the past 4 years has been, a party to a 
proceeding before the Postal Rate Commission.
    (3) A person having interests substantially dependent upon providing 
goods or services to or for use in connection with the Postal Service 
includes a person:
    (i) Providing goods or services under contract with the Postal 
Service that can be expected to provide revenue exceeding $100,000 over 
the term of the contract and that provides five percent or more of the 
person's gross income for the person's current fiscal year; or
    (ii) Substantially engaged in the business of preparing items for 
others for mailing through the Postal Service.



Sec. 7001.103  Statutory prohibition against interests in contracts to carry 

mail and acting as agent for contractors.

    Section 440 of title 18, United States Code, makes it unlawful for 
any Postal Service employee to become interested in any contract for 
carrying the mail, or to act as agent, with or without compensation, for 
any contractor or person offering to become a contractor in any business 
before the Postal Service.

[[Page 843]]



               CHAPTER LXI--NATIONAL LABOR RELATIONS BOARD




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7101            Supplemental standards of ethical conduct 
                    for employees of the National Labor 
                    Relations Board.........................         845

[[Page 845]]



PART 7101_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NATIONAL LABOR RELATIONS BOARD--Table of Contents




Sec.
7101.101 General.
7101.102 Prior approval for outside employment.
7101.103 Standard for accomplishing disqualification, disqualifying 
          financial interests.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 29 U.S.C. 141, 156; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 
p. 215, as modified by E.O. 12731, 55 FR 42457, 3 CFR, 1990 Comp., p. 
306; 5 CFR 2635.105, 2635.402(c), 2635.803, and 2638.202(b).

    Source: 62 FR 6447, Feb. 12, 1997, unless otherwise noted.



Sec. 7101.101  General.

    (a) Purpose. In accordance with 5 CFR 2635.105, the regulations in 
this part apply to Board members and other employees of the National 
Labor Relations Board (NLRB) and supplement the Standards of Ethical 
Conduct for Employees of the Executive Branch at 5 CFR 2635. Board 
Members and other employees are subject, in addition, to the executive 
branch financial disclosure regulations contained in 5 CFR part 2634.
    (b) Ethics program responsibilities--(1) Designated Agency Ethics 
Official. The Director, Division of Administration, is designated under 
5 CFR 2638.202(b) as the NLRB's Designated Agency Ethics Official with 
responsibilities that include:
    (i) Acting as liaison with the Office of Government Ethics with 
regard to all aspects of the NLRB's ethics program;
    (ii) Coordinating the NLRB's counseling and advisory service under 5 
CFR 2635.107;
    (iii) Collecting, reviewing, evaluating and, where applicable, 
making publicly available the public financial disclosure reports filed 
by NLRB officers and employees;
    (iv) Upon request, advising NLRB officials responsible for reviewing 
the Confidential Financial Disclosure Reports filed by designated NLRB 
employees; and
    (v) Coordinating and maintaining the NLRB's ethics education 
program.
    (2) Alternate Designated Agency Ethics Official. The Deputy Director 
of Administration is designated under 5 CFR 2638.202(b) as the NLRB's 
Alternate Designated Agency Ethics Official.
    (c) Agency designees. Except as provided in Sec. 7101.102, the 
Designated Agency Ethics Official shall serve as the NLRB's designee for 
purposes of making the determinations, granting the approvals, and 
taking other actions under 5 CFR part 2635 and this part.



Sec. 7101.102  Prior approval for outside employment.

    (a) General Requirement. Before engaging in compensated or 
uncompensated outside employment, an employee must obtain written 
approval:
    (1) From the Board of General Counsel to engage in the private 
practice of law; or
    (2) From the employee's Chief Counsel, Regional Director, Branch 
Chief, or the equivalent for outside employment not involving the 
practice of law.
    (b) Procedure for requesting approval (1) The approval required by 
paragraph (a) of this section shall be requested in writing in advance 
of engaging in outside employment, including the outside practice of 
law.
    (2) The request for approval to engage in the outside practice of 
law or in other outside employment shall be submitted to the appropriate 
official as set forth in paragraph (a) of this section, and shall set 
forth, at a minimum:
    (i) The name of the employer;
    (ii) The nature of the legal activity or other work to be performed;
    (iii) The estimated duration; and
    (iv) The amount of compensation to be received.
    (3) Upon a significant change in the nature of scope of the outside 
employment or in the employee's official position, the employee shall 
submit a revised request for approval.
    (c) Standard for approval. (1) Approval shall be granted unless the 
agency designee determines that the outside employment is expected to 
involve conduct prohibited by statute or Federal regulation, including 5 
CFR part 2635.

[[Page 846]]

    (2) The agency designee may consult with the Designated Agency 
Ethics Official to ensure that the request for outside employment meets 
the standard in paragraph (c)(1) of this section.
    (d) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes, but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee, teacher, or speaker. It includes writing when 
done under an arrangement with another person for production or 
publication of the written product. It does not, however, include 
participation in the activities of a nonprofit charitable, religious, 
professional, social, fraternal, educational, recreational, public 
service or civic organization, unless such activities involve the 
provision of professional services or advice or are for compensation 
other than reimbursement of expenses.



Sec. 7101.103  Standard for accomplishing disqualification; disqualifying 

financial interest.

    An NLRB employee who is required, in accordance with 5 CFR 
2635.402(c), to disqualify himself from participation in a particular 
matter to which he has been assigned shall, notwithstanding the guidance 
in 5 CFR 2635.402(c) (1) and (2), provide written notice of 
disqualification to his or her supervisor upon determining that he or 
she will not participate in the matter.

[[Page 847]]



          CHAPTER LXII--EQUAL EMPLOYMENT OPPORTUNITY COMMISSION




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7201            Supplemental standards of ethical conduct 
                    for employees of the Equal Employment 
                    Opportunity Commission..................         849

[[Page 849]]



PART 7201_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE EQUAL 

EMPLOYMENT OPPORTUNITY COMMISSION--Table of Contents




Sec.
7201.101 General.
7201.102 Prohibited outside employment.
7201.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.403(a), 2635.802 and 2635.803.

    Source: 61 FR 7066, Feb. 26, 1996, unless otherwise noted.



Sec. 7201.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to all employees of the Equal Employment Opportunity Commission 
(EEOC), including members of the Commission and the General Counsel, and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635.



Sec. 7201.102  Prohibited outside employment.

    (a) No employee of the Equal Employment Opportunity Commission may 
engage in outside employment with a person who is currently and 
substantially affected by the employee's performance of his or her 
official duties because the person is a party or representative of a 
party to a particular matter involving specific parties.
    (b) No employee of the Equal Employment Opportunity Commission, 
other than a special Government employee, may receive compensation for 
representational services, or the rendering of advice or analysis, 
regarding any equal employment law or its application.
    (c) No employee of the Equal Employment Opportunity Commission, 
other than a special Government employee, may engage in outside 
employment involving a particular matter pending at EEOC or an equal 
employment opportunity matter in which EEOC or the Federal government is 
a party. An employee may, however, with prior approval, provide 
uncompensated behind-the-scenes assistance to immediate family members 
in matters pending at EEOC or equal employment opportunity matters in 
which EEOC or the Federal government is a party. An employee may also, 
with prior approval, represent without compensation another EEOC 
employee in an administrative equal employment opportunity complaint 
against EEOC.

[61 FR 7066, Feb. 26, 1996, as amended at 68 FR 52486, Sept. 4, 2003]



Sec. 7201.103  Prior approval for outside employment.

    (a) Before engaging in any outside employment, with or without 
compensation, an employee of the Equal Employment Opportunity Commission 
must obtain written approval from his or her Deputy Ethics Counselor or 
designee.
    (b) In addition to approval under paragraph (a) of this section, an 
employee must obtain prior written approval from the Designated Agency 
Ethics Official or designee to engage in:
    (1) Compensated outside employment;
    (2) The uncompensated practice of law; or
    (3) Uncompensated outside employment that involves representation or 
the rendering of advice or analysis regarding any equal employment law, 
or serving as an officer or director of an organization whose activities 
are devoted substantially to equal employment opportunity matters.
    (c) Approval will not be granted if the outside employment is 
expected to involve conduct inconsistent with or prohibited by a statute 
or Federal regulation, including 5 CFR part 2635 and this part.
    (d) For purposes of this section, ``employment'' means any form of 
non-Federal employment or business relationship involving the provision 
of personal services by the employee. It includes, but is not limited to 
personal services as an officer, director, employee, agent, attorney, 
consultant, contractor, general partner, trustee, teacher or speaker. It 
includes writing when done under an arrangement with

[[Page 850]]

another person for production or publication of the written product. It 
does not, however, include participation in the activities of a 
nonprofit charitable, religious, professional, social, fraternal, 
educational, recreational, public service or civic organization unless:
    (1) The employee's participation involves the provision of 
professional services or advice;
    (2) The employee will receive compensation other than reimbursement 
of expenses; or
    (3) The organization's activities are devoted substantially to 
matters relating to equal employment law and the employee will serve as 
officer or director of the organization.

[[Page 851]]



                CHAPTER LXIII--INTER-AMERICAN FOUNDATION




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7301            Supplemental standards of ethical conduct 
                    for employees of the Inter-American 
                    Foundation..............................         853

[[Page 853]]



PART 7301_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

INTER-AMERICAN FOUNDATION--Table of Contents




Sec.
7301.101 General.
7301.102 Prior approval for outside teaching, speaking and writing.

    Authority: 5 U.S.C. 7301; E.O. 12674, 54 FR 15159, 3 CFR, 1989 
Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp. 
p. 306; 5 CFR 2635.105, 2635.803; 5 CFR 2638.202(b).



Sec. 7301.101  General.

    (a) Purpose. In accordance with 5 CFR 2635.105, the regulations in 
this part apply to employees of the Inter-American Foundation, with the 
exception of members of the Foundation's Board of Directors and Advisory 
Council, and supplement the Standards of Ethical Conduct for Employees 
of the Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635, directors and other employees are subject 
to the executive branch financial disclosure regulations contained in 5 
CFR part 2634.
    (b) Designated agency ethics official. For purposes of this part and 
otherwise as required by 5 CFR 2638.202, the General Counsel of the 
Inter-American Foundation shall serve as the designated agency ethics 
official. The Deputy General Counsel shall serve as the alternate agency 
ethics official.

[59 FR 3772, Jan. 27, 1994]



Sec. 7301.102  Prior approval for outside teaching, speaking and writing.

    (a) Before engaging in outside teaching, speaking or writing, for 
compensation, an employee, with the exception of members of the 
Foundation's Board of Directors and Advisory Council, shall obtain prior 
written approval from the designated agency ethics official or the 
alternate agency ethics official.
    (b) Approval shall be granted only upon a determination that the 
outside teaching, speaking or writing is not expected to involve conduct 
prohibited by statute or Federal regulation, including 5 CFR part 2635.

[59 FR 3772, Jan. 27, 1994]

[[Page 855]]



        CHAPTER LXV--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




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Part                                                                Page
7501            Supplemental standards of ethical conduct 
                    for employees of the Department of 
                    Housing and Urban Development...........         857

[[Page 857]]



PART 7501_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT--Table of Contents




Sec.
7501.101 Purpose.
7501.102 Definitions.
7501.103 Waivers.
7501.104 Prohibited financial interests.
7501.105 Outside employment.
7501.106 Additional rules for certain Department employees involved in 
          the regulation or oversight of Government sponsored 
          enterprises.

    Authority: 5 U.S.C. 301, 7301, 7351, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.203(a), 2635.403(a), 2635.803, 2635.807.

    Source: 61 FR 36248, July 9, 1996, unless otherwise noted.



Sec. 7501.101  Purpose.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Housing and Urban Development 
(HUD or Department) and supplement the Standards of Ethical Conduct for 
Employees of the Executive Branch contained in 5 CFR part 2635. 
Employees are required to comply with 5 CFR part 2635, this part, and 
any additional rules of conduct that the Department is authorized to 
issue.



Sec. 7501.102  Definitions.

    For purposes of this part, and otherwise as indicated, the following 
definitions shall apply:
    Affiliate means any entity that controls, is controlled by, or is 
under common control with another entity.
    Agency designee, as used also in 5 CFR part 2635, means the 
Associate General Counsel for Human Resources Law, the Assistant General 
Counsel, Ethics Law Division, and the HUD Field Office Assistant General 
Counsels; the Inspector General, for employees assigned to the Office of 
the Inspector General; and the General Counsel, Office of Federal 
Housing Enterprise Oversight, for employees assigned to the Office of 
Federal Housing Enterprise Oversight.
    Agency ethics official, as used also in 5 CFR part 2635, means the 
agency designees as specified above.
    Assistance means any contract, grant, loan, subsidy, guarantee, 
cooperative agreement or other financial assistance under a program 
administered by the HUD Secretary, and includes ``assistance'' awarded 
by the Department that is competitively redistributed to a second tier 
of applicants or awardees. The term does not include single family 
mortgage insurance provided under a program administered by the 
Secretary.
    Designated Agency Ethics Official (DAEO) means the General Counsel 
of HUD or the Deputy General Counsel (Operations) in the absence of the 
General Counsel.
    Employment means any compensated or uncompensated form of non-
Federal employment or business relationship, including self employment, 
involving the provision of personal services by the employee. It 
includes, but is not limited to, personal services as an officer, 
director, employee, agent, attorney, consultant, contractor, general 
partner, trustee, teacher or speaker. It includes writing when done 
under an arrangement with another person for production or publication 
of the written product.
    Security means all interests in debt or equity instruments. The term 
includes, without limitation, secured and unsecured bonds, debentures, 
notes, securitized assets and commercial paper including loans 
securitized by mortgages or deeds of trust and securities backed by such 
instruments, as well as all types of preferred and common stock. The 
term encompasses current and contingent ownership interests including 
any beneficial or legal interest derived from a trust. Such interest 
includes any right to acquire or dispose of any long or short position 
in such securities and also includes, without limit, interests 
convertible into such securities, as well as options, rights, warrants, 
puts, calls and straddles with respect thereto. The term shall not, 
however, be construed to include deposit accounts.

[[Page 858]]



Sec. 7501.103  Waivers.

    The Designated Agency Ethics Official may waive any provision of 
this part upon finding that the waiver will not result in conduct 
inconsistent with 5 CFR part 2635 or otherwise prohibited by law and 
that application of the provision is not necessary to ensure public 
confidence in the impartiality and objectivity with which the 
Department's programs are administered. Each waiver shall be in writing 
and supported by a statement of the facts and findings upon which it is 
based and may impose appropriate conditions, such as requiring the 
employee's execution of a written disqualification statement.



Sec. 7501.104  Prohibited financial interests.

    (a) General requirement. This section applies to all HUD employees 
except special Government employees who are not ``covered employees'' as 
defined in Sec. 7501.106(b)(1) of this part. Except as provided in 
paragraph (b) of this section, an employee, or an employee's spouse or 
minor child, shall not directly or indirectly receive, acquire or own:
    (1) Securities issued by the Federal National Mortgage Association 
(FNMA) or securities collateralized by FNMA securities;
    (2) Securities issued by the Federal Home Loan Mortgage Corporation 
(FHLMC) or securities collateralized by FHLMC securities;
    (3) Federal Housing Administration debentures or certificates of 
claim;
    (4) Stock or another financial interest in a multifamily project or 
single family dwelling, cooperative unit, or condominium unit, which is 
owned or subsidized by the Department, or which is subject to a note or 
mortgage or other security interest insured by the Department, except to 
the extent that the stock or other interest represents the employee's 
principal residence. Employees who wish to purchase a Department-held 
property as a principal residence must adhere to the procedures 
established by the Assistant Secretary for Housing for the 
administration of the property disposition program set forth in HUD 
Handbook 4310.5;
    (5) Any Department subsidy provided pursuant to Section 8 of the 
United States Housing Act of 1937, as amended, (42 U.S.C. 1437f) to or 
on behalf of a tenant of property owned by the employee. However, an 
employee may receive such a subsidy when:
    (i) The employee acquires without specific intent, as through gift 
or inheritance, a property which at the time of acquisition has a tenant 
receiving such a subsidy, but only as long as that tenant continues to 
reside in the property;
    (ii) An incumbent tenant who has not previously received such a 
subsidy becomes the beneficiary thereof, but only if there is no 
increase in that tenant's rent upon the commencement of subsidy payments 
other than normal annual adjustments; or
    (iii) The tenant is the parent, child, grandchild, or sibling of the 
employee, but only if there is no increase in that tenant's rent upon 
the commencement of subsidy payments other than normal annual 
adjustments; or
    (6) Any direct creditor interest in a mortgage insured by the 
Department.
    (b) Exception to prohibition for certain interests. Nothing in this 
section prohibits an employee, or the spouse or minor child of an 
employee, from acquiring, owning, or controlling:
    (1) An interest in a publicly traded or publicly available 
investment fund which, in its prospectus, does not indicate the 
objective or practice of concentrating its investments in resi dential 
mortgages or securities backed by residential mortgages, except those of 
the Government National Mortgage Association (GNMA), and the employee 
neither exercises control nor has the ability to exercise control over 
the financial interests held in the fund;
    (2) A limited partnership interest in a partnership which has at 
least 5,000 partnership interests, and no more than 25% of the gross 
value of the partnership interest constitutes projects subject to HUD 
held or insured mortgages or projects currently receiving the benefit of 
HUD subsidies; or
    (3) Mortgage insurance provided pursuant to section 203 of the 
National Housing Act (12 U.S.C. 1709) on the employee's principal 
residence and any one other single family residence.
    (c) Reporting and divestiture. An employee must report, in writing, 
to the

[[Page 859]]

appropriate agency ethics official, any interest prohibited under 
paragraph (a) of this section acquired prior to the commencement of 
employment with the Department or without specific intent, as through 
gift, inheritance, or marriage, within 30 days from the start of 
employment or acquisition of such interest. Such interest must be 
divested within 90 days from the date reported unless waived by the 
Designated Agency Ethics Official in accordance with Sec. 7501.103.



Sec. 7501.105  Outside employment.

    (a) Prohibited outside employment. Subject to the exceptions set 
forth in paragraph (b) of this section, HUD employees, except special 
Government employees, shall not engage in:
    (1) Employment involving active participation in a business dealing 
with or related to real estate or manufactured housing including but not 
limited to real estate brokerage, management and sales, architecture, 
engineering, mortgage lending, property insurance, appraisal services, 
construction, construction financing, land planning, or real estate 
development;
    (2) Employment with a person, other than a State or local 
government, who engages in lobbying activities concerning Department 
programs or who is required to report expenditures for lobbying 
activities or register as a lobbyist under 42 U.S.C. 3537b or similar 
statutes which require the registration of persons who attempt to 
influence the decisions of officers or employees of the Department;
    (3) Employment as an officer or director of a person who is a 
Department-approved mortgagee, a lending institution or an organization 
which services securities for the Department; or
    (4) Employment with the Federal National Mortgage Association, the 
Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank 
System or any affiliate thereof.
    (b) Exceptions to employment prohibitions. The prohibitions set 
forth in paragraph (a) of this section do not apply to serving as an 
officer or a member of the Board of Directors of:
    (1) A Federal Credit Union;
    (2) A cooperative or condominium association for a housing project 
which is not subject to regulation by the Department or, if so 
regulated, in which the employee personally resides; or
    (3) An entity designated in writing by the Designated Agency Ethics 
Official.
    (c) Prior approval requirement. (1) Employees, except special 
Government employees, shall obtain the prior written approval of an 
Agency Ethics Official before accepting compensated or uncompensated 
employment:
    (i) As an officer, director, trustee, or general partner of, or in 
any other position of authority with, either a for-profit or non profit 
organization which directly or indirectly receives assistance from the 
Department.
    (ii) With a State or local government; or
    (iii) In the same professional field as that of the employee's 
official position.
    (2) Approval shall be granted unless the conduct is inconsisent with 
5 CFR part 2635 or this part.
    (d) Voluntary services. Subject to the restrictions and requirements 
contained in the conflict of interest laws, 5 CFR part 2635, and this 
part, employees are encouraged to volunteer their personal time to 
nonprofit organizations.
    Note to Sec. 7501.105: An employee assigned to serve in an official 
capacity as the Department's liaison representative to an outside 
organization is not engaged in an outside activity to which this section 
applies. Notwithstanding, an employee may be assigned to serve as the 
Department's liaison representative only as authorized by law, and as 
approved by the Department under applicable procedures.



Sec. 7501.106  Additional rules for certain Department employees involved in 

the regulation or oversight of Government sponsored enterprises.

    (a) The following rules apply to certain Department employees whose 
duties involve the regulation or oversight of Government Sponsored 
Enterprises, specifically the Federal National Mortgage Association 
(FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC). This 
section is in addition to Sec. Sec. 7501.101 to 7501.105.
    (b) Definitions. For purposes of this section, the following 
definitions are applicable:

[[Page 860]]

    (1) Except as provided in paragraph (b)(2) of this section, 
``covered employee'' means all employees in the Office of Federal 
Housing Enterprise Oversight and employees required to file a public or 
confidential financial disclosure report under 5 CFR part 2634 in:
    (i) The Office of the HUD Secretary, with the exception of the 
Office of Lead-Based Paint Abatement and Poisoning Prevention;
    (ii) The Office of the Assistant Secretary for Housing--Federal 
Housing Commissioner;
    (iii) The Office of Financial Institutions Regulation in the Office 
of the Assistant Secretary for Policy Development and Research;
    (iv) The Offices of Investigation, Program Standards and Evaluation, 
and Regulatory Initiatives and Federal Coordination within the Office of 
the Assistant Secretary for Fair Housing and Equal Opportunity;
    (v) The Office of General Counsel's Offices of Insured Housing, 
Government Sponsored Enterprises/Real Estate Settlement and Procedures 
Act Division in Finance and Regulatory Enforcement, Legislation and 
Regulations, and the Fair Housing Enforcement Division;
    (vi) The Office of Inspector General;
    (vii) The official superiors of the employees listed in paragraphs 
(b)(1)(iii), (b)(1)(iv) and (b)(1)(v) of this section;
    (viii) Any other employee who is designated in writing by the 
Secretary, the Designated Agency Ethics Official, or the appropriate 
individual of Assistant Secretary rank, or his or her designee, to 
ensure compliance with the principles set forth in 5 CFR 2635.403 and 
who receives notice of such designation.
    (2) The DAEO, upon recommendation of the appropriate individual of 
Assistant Secretary rank, may exclude in writing an employee otherwise 
designated as a ``covered employee'' under Sec. 7501.106(b)(1)(i)-(vii) 
of this part if the employee's official duties do not substantially 
involve the regulation or oversight of Government sponsored enterprises 
and ownership of interests prohibited by Sec. 7501.106(c) would not 
cause a reasonable person to question the impartiality and objectivity 
with which the Department's programs are administered.
    (3) Mortgage institution means mortgage bankers, mortgage brokers, 
banks, savings and loans, and other institutions or entities that 
originate, insure, or service mortgages that are owned or guaranteed by 
the Federal National Mortgage Association (FNMA) or the Federal Home 
Loan Mortgage Corporation (FHLMC).
    (c) Prohibited financial interests. (1) Except as provided in 
paragraph (c)(2) of this section, a covered employee, or a spouse or 
minor child of a covered employee, shall not receive, acquire, or own 
securities of:
    (i) A mortgage institution if more than 20 percent of the 
institution's assets consist of mortgages;
    (ii) A mortgage institution in which 20 percent or less of the 
institution's assets consist of mortgages and more than 40 percent of 
the mortgages originated by the institution are issued, collateralized, 
sold or guaranteed by FNMA and/or FHLMC; or
    (iii) A mortgage institution which services or insures mortgages if 
more than 20 percent of the gross income of such institution is derived 
from either or both of these activities.
    (2) The prohibitions in paragraph (c)(1) of this section do not 
apply to ownership of securities held in a publicly traded or publicly 
available investment fund, or profit-sharing, retirement, or similar 
plan which in its prospectus or governing documents does not indicate 
the objective or practice of concentrating its investments in the 
financial services sector, and the employee neither exercises control 
nor has the ability to exercise control over the financial interests 
held in the fund.
    (3) The mortgage institution's most recent annual financial 
statement shall be used in determining the applicability of the 
prohibitions in paragraph (c)(1) of this section.
    (d) Restrictions arising from third party relationships. If any of 
the entities listed below has securities that a covered employee would 
be prohibited from owning by paragraph (c) of this section, the employee 
shall report such interest to the appropriate Agency Ethics Official. 
The Agency Ethics Official may require the employee to terminate the

[[Page 861]]

third party relationship, undertake an appropriate disqualification, or 
take other appropriate action determined to be necessary consistent with 
5 CFR part 2635 and this part. This paragraph applies to a:
    (1) Partnership in which the covered employee, or a spouse or minor 
child of the employee is a general partner;
    (2) Partnership in which the covered employee, or spouse or minor 
child of the employee, individually or jointly holds more than a 10 
percent limited partnership interest;
    (3) Closely held corporation in which the covered employee, or 
spouse or minor child of the employee, individually or jointly holds 
more than a 10 percent equity interest;
    (4) Trust in which the covered employee, or spouse or minor child of 
the employee, has a legal or beneficial interest;
    (5) Investment club or similar informal investment arrangement 
between the covered employee, or spouse or minor child of the employee, 
and others; or
    (6) Other entity in which the covered employee, or spouse or minor 
child of the employee, individually or jointly holds more than a 10 
percent equity interest.
    (e) Prohibited outside employment. Covered employees shall not 
engage in employment with or on behalf of the Federal National Mortgage 
Association, the Federal Home Loan Mortgage Corporation, a mortgage 
institution, or any of their affiliates.
    (f) Prohibited recommendations. Covered employees shall not make any 
recommendation or suggestion, directly or indirectly, concerning the 
acquisition, sale, or divestiture of securities of FHLMC or FNMA.
    (g) Prohibited purchase of assets. Covered employees, their spouses 
or minor children shall not purchase, directly or indirectly, any real 
or personal property from FHLMC or FNMA, unless it is sold at public 
auction or by other means which would assure that the selling price is 
the asset's fair market value.
    (h) Pre-existing interests. Covered employees must report, in 
writing, to the appropriate Agency Ethics Official, any interest 
prohibited under paragraph (c) of this section acquired prior to either 
the commencement of employment as a covered employee or the effective 
date of this part, or acquired without specific intent, as through gift, 
inheritance, or marriage, within 30 days from the start of covered 
employment or acquisition of such interest. Such interest must be 
divested within 90 days from the date it is reported unless waived by 
the Designated Agency Ethics Official in accordance with Sec. 7501.103.

[[Page 863]]



       CHAPTER LXVI--NATIONAL ARCHIVES AND RECORDS ADMINISTRATION




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                    and Records Administration..............         865

[[Page 865]]



PART 7601_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

NATIONAL ARCHIVES AND RECORDS ADMINISTRATION--Table of Contents




Sec.
7601.101 General.
7601.102 Prior approval of outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by, E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.

    Source: 61 FR 40505, Aug. 5, 1996, unless otherwise noted.



Sec. 7601.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the National Archives and Records Administration 
(NARA) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, employees of NARA are 
subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634.



Sec. 7601.102  Prior approval of outside employment.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, must obtain written approval before engaging in any 
outside employment, whether or not for compensation. Requests for 
approval shall be submitted in accordance with procedures set forth in 
the NARA Administrative Procedures Manual, ADMIN. 201, copies of which 
can be obtained from the NARA designated agency ethics official.
    (b) Standard of approval. Approval shall be granted only upon a 
determination that the outside employment is not expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635.
    (c) Scope of approval. Approval will be for a period not to exceed 
three years, after which renewed approval must be sought in accordance 
with this section. Upon a significant change in the nature or scope of 
the outside employment or in the employee's NARA position, the employee 
shall submit a revised request for approval.
    (d) Definition of employment. For purposes of this section, 
employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes, but is not limited to, personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee, teacher, or speaker. It includes writing when 
done under an arrangement with another person for production or 
publication of the written product. It does not, however, include 
participation in the activities of a nonprofit charitable, religious, 
professional, social, fraternal, educational, recreational, public 
service, or civic organization, unless the participation involves the 
provision of professional services or advice for compensation other than 
reimbursement for actual expenses.

[[Page 867]]



         CHAPTER LXVII--INSTITUTE OF MUSEUM AND LIBRARY SERVICES




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                    and Library Services....................         869

[[Page 869]]



PART 7701_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

INSTITUTE OF MUSEUM AND LIBRARY SERVICES--Table of Contents




Sec.
7701.101 Purpose.
7701.102 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301, 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.

    Source: 68 FR 17878, Apr. 14, 2003, unless otherwise noted.



Sec. 7701.101  Purpose.

    In accordance with 5 CFR 2635.105, the regulations of this part 
apply to employees of the Institute of Museum and Library Services 
(IMLS) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635. In addition to the 
regulations in 5 CFR part 2635 and this part, employees of IMLS are 
subject to the executive branch employee responsibilities and conduct 
regulations at 5 CFR part 735, the executive branch financial disclosure 
regulations at 5 CFR part 2634, and the executive branch financial 
interests regulations at 5 CFR part 2640.



Sec. 7701.102  Prior approval for outside employment.

    (a) Before engaging in any outside employment with a prohibited 
source within the meaning of 5 CFR 2635.203(d), whether or not for 
compensation, an employee other than a special Government employee must 
obtain written approval from his or her immediate supervisor and the 
Designated Agency Ethics Official. The request for approval shall 
include the following:
    (1) The name of the person, group, or organization for which the 
work is to be performed, the type of work to be performed, and the 
proposed hours of work and approximate dates of employment;
    (2) A brief description of the employee's official IMLS duties and a 
brief description of the employee's discipline or inherent area of 
expertise based on experience of educational background;
    (3) The employee's certification that the outside employment will 
not depend on information obtained as a result of the employee's 
official Government position and that no official duty time or 
Government property, resources, or facilities not available to the 
general public will be used in connection with the outside employment; 
and
    (4) Responses to the following:
    (i) Whether the proposed outside employment will pertain to a matter 
to which the employee is presently assigned or has been assigned within 
the last year;
    (ii) Whether the proposed outside employment pertains to an ongoing 
or announced agency policy or program;
    (iii) Whether the sponsor of the proposed outside employment has any 
interests before IMLS that may be substantially affected by the 
performance or nonperformance of the employee's duties;
    (iv) Whether the employee intends to refer to his or her official 
IMLS position during the proposed outside employment and if so, the text 
of any disclaimers that he or she will use;
    (v) Whether the employee will receive any payment or compensation 
for the proposed outside employment; and
    (vi) Whether the proposed outside employment will involve teaching a 
course which is part of the established curriculum of an accredited 
institution of higher education, secondary school, elementary school, or 
an education or training program sponsored by a Federal, State or local 
government entity.
    (b) Approval shall be granted only upon determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation, including 5 CFR part 2635 and this part.
    (c) Outside employment means any form of compensated or 
uncompensated non-Federal employment or business relationship involving 
the provision of personal services by the employee. It includes, but is 
not limited to, personal services such as acting as an officer, 
director, employee, trustee, agent, attorney, consultant, contractor, 
general partner, teacher or speaker. It includes

[[Page 870]]

writing when done under an arrangement with another person for 
production or publication of the written product.

[[Page 871]]



                CHAPTER LXIX--TENNESSEE VALLEY AUTHORITY




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7901            Supplemental standards of ethical conduct 
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                    Authority...............................         873

[[Page 873]]



PART 7901_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

TENNESSEE VALLEY AUTHORITY--Table of Contents




Sec.
7901.101 General.
7901.102 Prior approval for outside employment.

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 16 
U.S.C. 831-831dd; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 
2635.105, 2635.803.

    Source: 61 FR 20118, May 6, 1996, unless otherwise noted.



Sec. 7901.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Tennessee Valley Authority (TVA) and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition, some TVA 
employees are subject to the executive branch financial disclosure 
regulations at 5 CFR part 2634.



Sec. 7901.102  Prior approval for outside employment.

    (a) Before engaging in outside employment, with or without 
compensation, an employee, other than a special Government employee, 
must obtain written approval from the supervising TVA vice president or 
designee. The written request shall be submitted through the employee's 
supervisor or human resource office and shall, at a minimum, identify 
the employer or other person for whom the services are to be provided, 
as well as the duties, hours of work, and compensation involved in the 
proposed outside employment.
    (b) Approval under paragraph (a) of this section shall be granted 
only upon a determination that the outside employment is not expected to 
involve conduct prohibited by statute or Federal regulation, including 5 
CFR part 2635.
    (c) Vice presidents or other officers of TVA may, after consultation 
with the Designated Agency Ethics Official, exempt specified classes of 
employees from this section based upon a determination that the official 
duties of employees in the class are such that their outside employment 
activities are not likely to raise issues of compliance with 5 CFR part 
2635.
    (d) For purposes of this section, employment means any form of non-
Federal employment or business relationship involving the provision of 
services by the employee. It includes, but is not limited to, personal 
services as an officer, director, employee, agent, attorney, consultant, 
contractor, general partner, trustee, teacher, or speaker. It includes 
writing when done under an arrangement with another person for 
production or publication of the written product. It does not, however, 
include participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service, or civic organization, unless such activities involve 
the provision of professional services or advice or are for compensation 
other than reimbursement for actual expenses.

[[Page 875]]



            CHAPTER LXXI--CONSUMER PRODUCT SAFETY COMMISSION




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8101            Supplemental standards of ethical conduct 
                    for employees of the Consumer Product 
                    Safety Commission.......................         877

[[Page 877]]



PART 8101_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

CONSUMER PRODUCT SAFETY COMMISSION--Table of Contents




Sec.
8101.101 General.
8101.102 Prohibitions applicable to Commissioners.
8101.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); 15 U.S.C. 2053(c); E.O. 12674, 54 FR 15139, 3 CFR, 1989 Comp., p. 
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 
5 CFR 2635.105, 2635.803.

    Source: 61 FR 65458, Dec. 13, 1996, unless otherwise noted.



Sec. 8101.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Consumer Product Safety Commission (CPSC). 
These regulations supplement the Standards of Ethical Conduct for 
Employees of the Executive Branch contained in 5 CFR part 2635.



Sec. 8101.102  Prohibitions applicable to Commissioners.

    The Commissioners of the Consumer Product Safety Commission are 
subject to section 4(c) of the Consumer Product Safety Act, 15 U.S.C. 
2053(c). That statutory provision provides that a Commissioner may not 
engage in any other business, vocation, or employment.



Sec. 8101.103  Prior approval for outside employment.

    (a) Prior approval requirement. Before engaging in any outside 
employment, with or without compensation, an employee, other than a 
special Government employee. shall obtain prior written approval from 
his or her supervisor and the Designated Agency Ethics Official (DAEO) 
or Alternate DAEO. The Request for Approval of Outside Activity (CPSC 
Form 241), available from the DAEO or unit administrative officer, may 
be used to request approval. Requests for approval shall be forwarded 
through normal supervisory channels.
    (b) Standard of approval. Approval shall be granted only upon a 
determination that the outside employment is not expected to involve 
conduct prohibited by Federal statute or regulation, including 5 CFR 
part 2635.
    (c) Notification of action. Employees will be notified in writing of 
the action taken on their requests. All requests will be maintained in 
the files of the Designated Agency Ethics Official for the duration of 
the requester's CPSC employment.
    (d) Duration and scope of approval. Approval will be for a period 
not to exceed two years, after which renewal approval must be sought. An 
employment must submit a new request for approval after two years or 
earlier upon either a significant change in the nature or scope of the 
outside employment or a change in the employee's CPSC position.
    (e) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment, business 
relationship or activity involving the provision of personal services by 
the employee, whether or not for compensation. Employment includes, but 
is not limited to, personal services as an officer, director, employee, 
agent, attorney, consultant, contractor, general partner, trustee, 
teacher or speaker. Employment also includes writing when done under an 
arrangement with another person for production or publication of the 
written product. Employment does not, however, include participation in 
the activities of a nonprofit charitable, religious, professional, 
social, fraternal, educational, recreational, public service, consumer 
or civic organization, unless such activities are for compensation other 
than reimbursement for expenses or involve the provision of professional 
services or advice to, or serving as an officer, trustee, or member of a 
board or other such body of, an organization that is a prohibited source 
as defined in 5 CFR 2635.203(d).

[[Page 879]]



                CHAPTER LXXIII--DEPARTMENT OF AGRICULTURE




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8301            Supplemental standards for ethical conduct 
                    for employees of the Department of 
                    Agriculture.............................         881

[[Page 881]]



PART 8301_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

DEPARTMENT OF AGRICULTURE--Table of Contents




Sec.
8301.101 General.
8301.102 Prior approval for outside employment.
8301.103 Additional rules for employees of the Farm Service Agency.
8301.104 Additional rules for employees of the Food Safety and 
          Inspection Service.
8301.105 Additional rules for employees of the Office of the General 
          Counsel.
8301.106 Additional rules for employees of the Office of Inspector 
          General.

    Authority: 5 U.S.C. 301, 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 
2635.105, 2635.403(a), 2635.803.

    Source: 65 FR 58638, Oct. 2, 2000, unless otherwise noted.



Sec. 8301.101  General.

    (a) In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Agriculture (Department or USDA) 
and supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635.
    (b) In addition to 5 CFR part 2635 and this part, employees also are 
required to comply with the executive branch financial disclosure 
regulations at 5 CFR part 2634, the regulations on responsibilities and 
conduct contained in 5 CFR part 735, and Department guidance and 
procedures established pursuant to paragraph (c) of this section.
    (c) With the concurrence of the Designated Agency Ethics Official 
(DAEO), agencies and components of the Department may, in accordance 
with 5 CFR 2635.105(c), issue explanatory guidance for their employees 
and establish procedures necessary to implement this part and part 2635 
of this title. The Deputy Ethics Official for each agency or component 
shall retain copies of all such guidance issued by that agency or 
component.



Sec. 8301.102  Prior approval for outside employment.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, who is required to file either a public or 
confidential financial disclosure report (SF 278 or OGE Form 450), or an 
alternative form of reporting approved by the Office of Government 
Ethics, shall, before engaging in outside employment, obtain written 
approval in accordance with the procedures set forth in paragraph (c) of 
this section.
    (b) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment or business 
relationship or activity involving the provision of personal services by 
the employee for direct, indirect, or deferred compensation other than 
reimbursement of actual and necessary expenses. It also includes, 
irrespective of compensation, the following outside activities.
    (1) Providing personal services as a consultant or professional, 
including service as an expert witness or as an attorney; and
    (2) Providing personal services to a for-profit entity as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, or trustee, which involves decision making or 
policymaking for the non-Federal entity, or the provision of advice or 
counsel.
    (c) Submission of requests for approval. An employee seeking to 
engage in employment for which advance approval is required shall submit 
a written request for approval to the employee's supervisor a reasonable 
time before the employee proposes to begin the employment. Upon a 
significant change in the nature of the outside employment or in the 
employee's official position, the employee shall submit a revised 
request for approval. The supervisor will forward written requests for 
approval to the agency designee, through normal supervisory channels. 
All requests for prior approval shall include the following information:
    (1) The employee's name, organizational location, occupational 
title, grade, and salary;

[[Page 882]]

    (2) The nature of the proposed outside employment, including a full 
description of the specific duties or services to be performed;
    (3) A description of the employee's official duties that relate in 
any way to the proposed employment;
    (4) The name and address of the person or organization for whom or 
with which the employee is to be employed, including the location where 
the services will be performed;
    (5) The method or basis of any compensation (e.g., fee, per diem, 
honorarium, royalties, stock options, travel and expenses, or other);
    (6) A statement as to whether the compensation is derived from a 
USDA grant, contract, cooperative agreement, or other source of USDA 
funding;
    (7) For employment involving the provision of consultative or 
professional services, a statement indicating whether the client, 
employer, or other person on whose behalf the services are performed is 
receiving, or intends to seek, a USDA grant, contract, cooperative 
agreement, or other funding relationship; and
    (8) For employment involving teaching, speaking, writing or editing, 
the proposed text of any disclaimer required by 5 CFR 2635.807(b).
    (d) Standard for approval. Approval shall be granted by the agency 
designee unless it is determined that the outside employment is expected 
to involve conduct prohibited by statute or Federal regulation, 
including 5 CFR part 2635.
    (e) Responsibilities of the component agencies. (1) The agency 
designee for each separate agency or component of USDA may issue an 
instruction or manual issuance exempting categories of employment from a 
requirement of prior written approval based on a determination that 
employment within those categories would generally be approved and is 
not likely to involve conduct prohibited by Federal statutes or 
regulations, including 5 CFR part 2635 and this part.
    (2) Department components may specify internal procedures governing 
the submission of prior approval requests, including but not limited to: 
timely submission requirements; determination deadlines; appeals or 
reviews; and requirements for updating requests. Internal procedures 
also should designate appropriate officials to act on such requests. The 
instructions or manual issuances may include examples of outside 
employment that are permissible or impermissible consistent with 5 CFR 
part 2635 and this part. With respect to employment involving teaching, 
speaking or writing, the instructions or manual issuances may specify 
pre-clearance procedures and/or require disclaimers indicating that the 
views expressed do not necessarily represent the views of the agency, 
USDA or the United States.
    (3) The officials within the respective USDA agencies or components 
responsible for the administrative aspects of these regulations and the 
maintenance of records shall make provisions for the filing and 
retention of requests for approval of outside employment and copies of 
the notification of approval or disapproval.



Sec. 8301.103  Additional rules for employees of the Farm Service Agency.

    (a) Application. This section applies only to Farm Service Agency 
(FSA) personnel who are Federal employees within the meaning of 5 U.S.C. 
2105. This section does not apply to FSA community committee members, 
county committee members, and county office personnel, who are either 
elected to their positions or are employees of community or county 
committees established under 16 U.S.C. 590h. For rules applicable to FSA 
community committee members, county committee members, and county office 
personnel, see 7 CFR part 7.
    (b) Definition of FSA program participant. For purposes of this 
section, the phrase ``FSA program participant,'' includes any person who 
is, or is an applicant to become, an FSA borrower, FSA grantee, or 
recipient of any other form of FSA financial assistance available under 
any farm credit, payment or other program administered by FSA.
    (c) Prohibited real estate purchases. (1) No FSA employee, or spouse 
or minor child of an FSA employee, may directly or indirectly purchase 
real estate held in the FSA inventory, for sale under forfeiture to FSA, 
or from an FSA program participant.

[[Page 883]]

    (2) Waiver. A request for an exception to the prohibition found in 
paragraph (c)(1) of this section may be submitted jointly by the FSA 
program participant and FSA employee (whether on his or her own behalf, 
or on behalf the employee's spouse or minor child), to the FSA State 
Executive Director. The FSA State Executive Director may grant a written 
waiver from this prohibition based on a determination made with the 
advice and clearance of the DAEO and the FSA headquarters ethics advisor 
that the waiver is not inconsistent with part 2635 of this title nor 7 
U.S.C. 1986 nor otherwise prohibited by law and that, under the 
particular circumstances, application of the prohibition is not 
necessary to avoid the appearance of misuse of position or loss of 
impartiality or otherwise to ensure confidence in the impartiality and 
objectivity with which agency programs are administered. A waiver under 
this paragraph may impose appropriate conditions, such as requiring 
execution of a written disqualification.
    (d) Prohibited transactions with FSA program participants. (1) 
Except as provided in paragraph (d)(2) of this section, no FSA employee 
or spouse or minor child of an FSA employee may directly or indirectly: 
sell real property to; lease real property to or from; sell to, lease to 
or from, or purchase personal property from; or employ for compensation 
a person whom the FSA employee knows or reasonably should know is an FSA 
program participant directly affected by decisions of the particular FSA 
office in which the FSA employee serves.
    (2) Exceptions. Paragraph (d)(1) of this section does not apply to:
    (i) A sale, lease, or purchase of personal property, if it involves:
    (A) Goods available to the general public at posted prices that are 
customary and usual within the community; or
    (B) Property obtained pursuant to public auction; or
    (ii) Transactions listed in (d)(1) of this section determined in 
advance by the appropriate FSA State Executive Director, after 
consulting with the FSA Headquarters ethics advisor, to be consistent 
with part 2635 of this title and otherwise not prohibited by law.
    (e) Additional prior approval requirements for outside employment. 
Any FSA employee not otherwise required to obtain approval for outside 
employment under Sec. 8301.102 shall obtain written approval in 
accordance with the procedures and standards set forth in paragraphs (c) 
and (d) of Sec. 8301.102 before engaging in outside employment, as that 
term is defined by paragraph (b) of Sec. 8301.102, with or for a 
person:
    (1) Whom the FSA employee knows, or reasonably should know, is an 
FSA program participant; and
    (2) Who is directly affected by decisions made by the particular FSA 
office in which the FSA employee serves.

[65 FR 58638, Oct. 2, 2000, as amended at 67 FR 58319, Sept. 16, 2002]



Sec. 8301.104  Additional rules for employees of the Food Safety and 

Inspection Service.

    Any employee of the Food Safety and Inspection Service not otherwise 
required to obtain approval for outside employment under Sec. 8301.102, 
shall, before engaging in any form of outside employment, obtain written 
approval in accordance with the procedures and standards set forth in 
paragraphs (c) and (d) of Sec. 8301.102



Sec. 8301.105  Additional rules for employees of the Office of the General Counsel.

    Any attorney serving within the Office of the General Counsel, not 
otherwise required to obtain approval for outside employment under Sec. 
8301.102, shall obtain written approval, in accordance with the 
procedures and standards set forth in paragraphs (c) and (d) of Sec. 
8301.102, before engaging in the outside practice of law, whether 
compensated or not.



Sec. 8301.106  Additional rules for employees of the Office of Inspector General.

    Any employee of the Office of Inspector General, not otherwise 
required to obtain approval for outside employment under Sec. 8301.102, 
shall obtain written approval, in accordance with the procedures and 
standards set forth in paragraphs (c) and (d) of Sec. 8301.102, before 
engaging in any form of outside

[[Page 884]]

employment that involves the following:
    (a) Law enforcement, investigation, security, firearms training, 
defensive tactics training, and protective services;
    (b) Auditing, accounting, bookkeeping, tax preparation, and other 
services involving the analysis, use, or interpretation of financial 
records;
    (c) The practice of law, whether compensated or not; or
    (d) Employment involving personnel, procurement, budget, computer, 
or equal employment opportunity services.

[[Page 885]]



     CHAPTER LXXIV--FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION




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8401            Supplemental standards of ethical conduct 
                    for employees of the Federal Mine Safety 
                    and Health Review Commission............         887

[[Page 887]]



PART 8401_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION--Table of Contents




Sec.
8401.101 General.
8401.102 Prohibited financial interests.
8401.103 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp. p. 306; 5 CFR 2635.105, 
2635.403(a), 2635.802(a), 2635.803.

    Source: 61 FR 39871, July 31, 1996, unless otherwise noted.



Sec. 8401.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to the employees of the Federal Mine Safety and Health Review 
Commission (Commission) and supplement the Standards of Ethical Conduct 
for Employees of the Executive Branch at 5 CFR part 2635. Commission 
employees also are subject to the executive branch financial disclosure 
regulations at 5 CFR part 2634.



Sec. 8401.102  Prohibited financial interests.

    (a) Prohibition. Except as provided in this section, no employee 
(other than a special Government employee), or spouse or minor child of 
such an employee, shall have a financial interest, including compensated 
employment or indebtedness, in any company or other person engaged in 
mining activities subject to the Federal Mine Safety and Health Act of 
1977 (Federal Mine Safety and Health Act), 30 U.S.C. 801 et seq.
    (b) Exceptions. (1) This section does not prohibit an employee, or 
the spouse or minor child of an employee, from investing in a publicly 
traded or publicly available investment fund which, in its prospectus, 
does not indicate the objective or practice of concentrating its 
investments in the securities of any company or other person engaged in 
mining activities subject to the Federal Mine Safety and Health Act, 
provided that the employee neither:
    (i) Exercises control over the financial interests held in the fund; 
nor
    (ii) Has the ability to exercise control over the financial 
interests held in the fund.
    (2)(i) Unless divestiture is required by paragraph (c) of this 
section, this section does not prohibit an employee, or the spouse or 
minor child of an employee, from owning or controlling securities of any 
company or other person engaged in mining activities subject to the 
Federal Mine Safety and Health Act, whenever:
    (A) Ownership or control was acquired prior to the employee's 
commencement of employment, through a change in marital status, or 
through circumstances beyond the employee's control and without the 
appearance of attempting to circumvent the prohibitions in this section, 
such as acquisition by inheritance, gift, or merger, acquisition or 
other change in corporate ownership, provided that: (1) The employee 
makes full, written disclosure to the designated agency ethics official 
within 30 days after the security is acquired or the employment is 
commenced; and
    (2) The employee is disqualified from participating in any decision, 
examination, audit, or other particular matter having a direct and 
predictable effect on such company or other person, in which the 
employee holds a direct or indirect interest.
    (B) The securities result from a stock split, stock dividend or the 
exercise of preemptive rights arising out of securities permitted by 
paragraph (b)(2)(i)(A) of this section. This paragraph does not permit 
the holding of stocks purchased through voluntary reinvestment of cash 
dividends.
    (ii) For purposes of this section, the term ``securities'' includes 
all interests in debt or equity instruments. The term includes, without 
limitation, secured and unsecured bonds, debentures, notes, securitized 
assets and commercial paper, as well as all types of preferred and 
common stock. The term encompasses both current and contingent ownership 
interests, including any beneficial or legal interest derived from a 
trust. It extends to any right to acquire or dispose of any long or 
short

[[Page 888]]

position in such securities and includes, without limitation, interests 
convertible into such securities, as well as options, rights, warrants, 
puts, calls, and straddles with respect thereto.
    (c) Divestiture. The designated agency ethics official may require 
an employee to divest a security the employee is otherwise authorized to 
retain under paragraph (b)(2) of this section, based on a determination 
of substantial conflict under Sec. 2635.403(b) of this title.
    (d) Waivers. The designated agency ethics official may grant a 
written waiver from the prohibition contained in this section based on a 
determination that the waiver is not inconsistent with 5 CFR part 2635 
or otherwise prohibited by law and that, under the particular 
circumstances, application of the prohibition is not necessary to avoid 
the appearance of misuse of position or loss of impartiality, or 
otherwise to ensure confidence in the impartiality and objectivity with 
which Commission programs are administered. A waiver under this 
paragraph may be accompanied by appropriate conditions, such as 
requiring execution of a written statement of disqualification. 
Notwithstanding the grant of any waiver, an employee remains subject to 
the disqualification requirements of 5 CFR 2635.402 and 2635.502.



Sec. 8401.103  Prior approval for outside employment.

    (a) Prior approval requirement. (1) Before engaging in any outside 
employment, whether or not for compensation, a Commission employee who 
is classified at GS-13 or above, as well a Commission attorney at any 
grade level, must obtain the written approval of the employee's 
immediate supervisor and the designated agency ethics official. This 
requirement does not apply to a special Government employee of the 
Commission.
    (2) Requests for approval shall be forwarded through the employee's 
immediate supervisor to the designated agency ethics official and shall 
include at a minimum the name of the person, group, or organization for 
whom the work is to be performed; the type of work to be performed; and 
the proposed hours of work and approximate dates of employment.
    (b) Standard for approval. Approval shall be granted only upon a 
determination that outside employment is not expected to involve conduct 
prohibited by statute or Federal regulation, including 5 CFR 2635 and 
this part.
    (c) Definitions. For purposes of this section:
    (1) Employment means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee or teacher. It also includes writing when done 
under an arrangement with another person for production or publication 
of the written product. It does not, however, include participation in 
the activities of a nonprofit charitable, religious, professional, 
social, fraternal, educational, recreational, public service or civic 
organization, unless such activities involve the provision of 
professional services or advice or are for compensation other than 
reimbursement expenses.
    (2) Professional services means the provision of personal services 
by an employee, including the rendering of advice or consultation, which 
involves application of the skills of a profession as defined in 5 CFR 
2636.305(b)(1).

[[Page 889]]



        CHAPTER LXXVI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD




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Part                                                                Page
8601            Supplemental standards of ethical conduct 
                    for employees of the Federal Retirement 
                    Thrift Investment Board.................         891

[[Page 891]]



PART 8601_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

FEDERAL RETIREMENT THRIFT INVESTMENT BOARD--Table of Contents




Sec.
8601.101 General.
8601.102 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified 
by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.



Sec. 8601.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Federal Retirement Thrift Investment Board 
(Board) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635. In addition, Board 
employees are subject to the executive branch financial disclosure 
regulations at 5 CFR part 2634.

[59 FR 50817, Oct. 6, 1994]



Sec. 8601.102  Prior approval for outside employment.

    (a) Before engaging in outside employment, with or without 
compensation, an employee, other than a special Government employee, 
must obtain written approval from his or her office director. The 
written request shall be submitted through the employee's immediate 
supervisor, unless the supervisor is the employee's office director, and 
shall identify the employer or other person for whom the services are to 
be provided, as well as the duties, hours of work, and compensation 
involved in the proposed outside employment.
    (b) Approval under paragraph (a) of this section shall be granted 
only upon a determination that the outside employment is not expected to 
involve conduct prohibited by statute or Federal regulation, including 5 
CFR part 2635.
    (c) In addition to the approval required by paragraph (a) of this 
section, an employee whose outside employment involves teaching, 
speaking, or writing that relates to his or her official duties within 
the meaning of 5 CFR 2635.807(a)(2) shall obtain approval from the 
Executive Director of the Board to engage in the activity as an outside 
activity, rather than as part of the employee's official duties.
    (d) For purposes of this section, employment means any form of non-
Federal employment or business relationship involving the provision of 
personal services by the employee. It includes, but is not limited to, 
personal services as an officer, director, employee, agent, attorney, 
consultant, contractor, general partner, trustee, teacher or speaker. It 
includes writing when done under an arrangement with another person for 
production or publication of the written product. It does not, however, 
include participation in the activities of a nonprofit charitable, 
religious, professional, social, fraternal, educational, recreational, 
public service or civil organization, unless the participation involves 
the provision of professional services or advice for compensation other 
than reimbursement for actual expenses.

[59 FR 50817, Oct. 6, 1994]

[[Page 893]]



             CHAPTER LXXVII--OFFICE OF MANAGEMENT AND BUDGET




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Part                                                                Page
8701            Supplemental standards of ethical conduct 
                    for employees of the Office of 
                    Management and Budget...................         895

[[Page 895]]



PART 8701_SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 

OFFICE OF MANAGEMENT AND BUDGET--Table of Contents




Sec.
8701.101 General.
8701.102 Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 
1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp. p. 215, as modified by 
E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 
2635.803.



Sec. 8701.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to the employees of the Office of Management and Budget and 
supplement the Standards of Ethical Conduct for Employees of the 
Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, OMB employees are subject to 
the executive branch financial disclosure regulations contained in 5 CFR 
part 2634.

[60 FR 12397, Mar. 7, 1995]



Sec. 8701.102  Prior approval for outside employment.

    (a) Before engaging in outside employment with or without 
compensation, an employee of the Office of Management and Budget, other 
than a special Government employee, must obtain the written approval of 
his or her division or office head, the General Counsel, and the 
Designated Agency Ethics Official (DAEO). Requests for approval shall be 
forwarded through normal supervisory channels to the division or office 
head, who shall forward the request to the General Counsel, to be 
forwarded with their successive approvals to the DAEO. The request for 
approval shall include, at a minimum, the following:
    (1) A statement of the name of the person, group, or other 
organization for whom the work is to be performed; the type of work to 
be performed; and the proposed hours of work and approximate dates of 
employment; and
    (2) A statement that the outside employment will not depend on 
information obtained as a result of the employee's official Government 
position and that no official duty time or Government property, 
resources, or facilities not available to the general public will be 
used in connection with the outside employment.
    (b) Approval shall be granted only upon a determination that the 
outside employment is not expected to involve conduct prohibited by 
statute or Federal regulation, including 5 CFR part 2635.
    (c) For purposes of this section, ``employment'' means any form of 
non-Federal employment or business relationship involving the provision 
of personal services by the employee. It includes, but is not limited 
to, personal services as an officer, director, employee, agent, 
attorney, consultant, contractor, general partner, trustee, teacher or 
speaker. It includes writing when done under an arrangement with another 
person for production or publication of the written product. It does 
not, however, include participation in the activities of a nonprofit 
charitable, religious, professional, social, fraternal, educational, 
recreational, public service, or civic organization, unless such 
activities involve the provision of professional services or advice or 
are for compensation other than reimbursement of expenses.

[60 FR 12397, Mar. 7, 1995]

[[Page 897]]



     CHAPTER XCVII--DEPARTMENT OF HOMELAND SECURITY HUMAN RESOURCES 
MANAGEMENT SYSTEM (DEPARTMENT OF HOMELAND SECURITY--OFFICE OF PERSONNEL 
                               MANAGEMENT)




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Part                                                                Page
9701            Department of Homeland Security human 
                    resources management system.............         899

[[Page 899]]



PART 9701_DEPARTMENT OF HOMELAND SECURITY HUMAN RESOURCES MANAGEMENT SYSTEM--

Table of Contents




                      Subpart A_General Provisions

Sec.
9701.101 Purpose.
9701.102 Eligibility and coverage.
9701.103 Definitions.
9701.104 Scope of authority.
9701.105 Continuing collaboration.
9701.106 Relationship to other provisions.
9701.107 Program evaluation.

                        Subpart B_Classification

                                 General

9701.201 Purpose.
9701.202 Coverage.
9701.203 Waivers.
9701.204 Definitions.
9701.205 Bar on collective bargaining.

                        Classification Structure

9701.211 Occupational clusters.
9701.212 Bands.

                         Classification Process

9701.221 Classification requirements.
9701.222 Reconsideration of classification decisions.

                         Transitional Provisions

9701.231 Conversion of positions and employees to the DHS classification 
          system.
9701.232 Special transition rules for Federal Air Marshal Service.

                  Subpart C_Pay and Pay Administration

                                 General

9701.301 Purpose.
9701.302 Coverage.
9701.303 Waivers.
9701.304 Definitions.
9701.305 Bar on collective bargaining.

                         Overview of Pay System

9701.311 Major features.
9701.312 Maximum rates.
9701.313 Homeland Security Compensation Committee.
9701.314 DHS responsibilities.

                    Setting and Adjusting Rate Ranges

9701.321 Structure of bands.
9701.322 Setting and adjusting rate ranges.
9701.323 Eligibility for pay increase associated with a rate range 
          adjustment.
9701.324 Treatment of employees whose rate of basic pay does not fall 
          below the minimum rate of their band.
9701.325 Treatment of employees whose rate of basic pay falls below the 
          minimum rate of their band.

                  Locality and Special Rate Supplements

9701.331 General.
9701.332 Locality rate supplements.
9701.333 Special rate supplements.
9701.334 Setting and adjusting locality and special rate supplements.
9701.335 Eligibility for pay increase associated with a supplement 
          adjustment.
9701.336 Treatment of employees whose pay does not fall below the 
          minimum adjusted rate of their band.
9701.337 Treatment of employees whose pay falls below the minimum 
          adjusted rate of their band.

                          Performance-Based Pay

9701.341 General.
9701.342 Performance pay increases.
9701.343 Within-band reductions.
9701.344 Special within-band increases.
9701.345 Developmental pay adjustments.
9701.346 Pay progression for new supervisors.

                           Pay Administration

9701.351 Setting an employee's starting pay.
9701.352 Use of highest previous rate.
9701.353 Setting pay upon promotion.
9701.354 Setting pay upon demotion.
9701.355 Setting pay upon movement to a different occupational cluster.
9701.356 Pay retention.
9701.357 Miscellaneous.

                            Special Payments

9701.361 Special skills payments.
9701.362 Special assignment payments.
9701.363 Special staffing payments.

                         Transitional Provisions

9701.371 General.
9701.372 Creating initial pay ranges.
9701.373 Conversion of employees to the DHS pay system.
9701.374 Special transition rules for Federal Air Marshal Service.

                    Subpart D_Performance Management

9701.401 Purpose.
9701.402 Coverage.
9701.403 Waivers.
9701.404 Definitions.
9701.405 Performance management system requirements.
9701.406 Setting and communicating performance expectations.
9701.407 Monitoring performance and providing feedback.
9701.408 Developing performance and addressing poor performance.
9701.409 Rating and rewarding performance.

[[Page 900]]

9701.410 DHS responsibilities.

                  Subpart E_Labor-Management Relations

9701.501 Purpose.
9701.502 Rule of construction.
9701.503 Waivers.
9701.504 Definitions.
9701.505 Coverage.
9701.506 Impact on existing agreements.
9701.507 Employee rights.
9701.508 Homeland Security Labor Relations Board.
9701.509 Powers and duties of the HSLRB.
9701.510 Powers and duties of the Federal Labor Relations Authority.
9701.511 Management rights.
9701.512 Conferring on procedures for the exercise of management rights.
9701.513 Exclusive recognition of labor organizations.
9701.514 Determination of appropriate units for labor organization 
          representation.
9701.515 Representation rights and duties.
9701.516 Allotments to representatives.
9701.517 Unfair labor practices.
9701.518 Duty to bargain, confer, and consult.
9701.519 Negotiation impasses.
9701.520 Standards of conduct for labor organizations.
9701.521 Grievance procedures.
9701.522 Exceptions to arbitration awards.
9701.523 Official time.
9701.524 Compilation and publication of data.
9701.525 Regulations of the HSLRB.
9701.526 Continuation of existing laws, recognitions, agreements, and 
          procedures.
9701.527 Savings provision.

                        Subpart F_Adverse Actions

                                 General

9701.601 Purpose.
9701.602 Waivers.
9701.603 Definitions.
9701.604 Coverage.
9701.605 Initial service period.

  Requirements for Furlough of 30 Days or Less, Suspension, Demotion, 
                      Reduction in Pay, or Removal

9701.606 Standard for action.
9701.607 Mandatory removal offenses.
9701.608 Procedures.
9701.609 Proposal notice.
9701.610 Opportunity to reply.
9701.611 Decision notice.
9701.612 Departmental record.

                            National Security

9701.613 Suspension and removal.

                            Savings Provision

9701.614 Savings provision.

                            Subpart G_Appeals

9701.701 Purpose.
9701.702 Waivers.
9701.703 Definitions.
9701.704 Coverage.
9701.705 Alternative dispute resolution.
9701.706 MSPB appellate procedures.
9701.707 Appeals of mandatory removal actions.
9701.708 Mandatory Removal Panel.
9701.709 Actions involving discrimination.
9701.710 Savings provision.

    Authority: 5 U.S.C. 9701.

    Source: 70 FR 5318, Feb. 1, 2005, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 9701.101  Purpose.

    (a) This part contains regulations governing the establishment of a 
new human resources management system within the Department of Homeland 
Security (DHS), as authorized by 5 U.S.C. 9701. As permitted by section 
9701, these regulations waive and replace various statutory provisions 
that would otherwise be applicable to affected DHS employees. These 
regulations are issued jointly by the Secretary of Homeland Security and 
the Director of the Office of Personnel Management (OPM).
    (b) The system established under this part is designed to be 
mission-centered, performance-focused, flexible, contemporary, and 
excellent; to generate respect and trust through employee involvement; 
to be based on the principles of merit and fairness embodied in the 
statutory merit system principles; and to comply with all other 
applicable provisions of law.



Sec. 9701.102  Eligibility and coverage.

    (a) All civilian employees of the Department are eligible for 
coverage under one or more subparts of this part except those covered by 
a provision of law outside the waivable chapters of title 5, U.S. Code, 
identified in Sec. 9701.104. For example, Transportation Security 
Administration employees, employees appointed under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, Secret Service 
Uniformed Division members, Coast Guard Academy faculty members, and 
Coast Guard military members are not

[[Page 901]]

eligible for coverage under any classification or pay system established 
under subpart B or C of this part. Refer to subparts B through G of this 
part for specific information regarding the coverage of each subpart.
    (b)(1) Subpart A of this part becomes applicable to all eligible 
employees on March 3, 2005.
    (2) The Secretary or designee may, at his or her sole and exclusive 
discretion and after coordination with OPM, establish the effective date 
for applying subparts E, F, and G of this part to all eligible 
employees. Unless otherwise determined by the Secretary and the 
Director, subparts E, F, and G of this part will become applicable to 
all eligible employees no later than August 1, 2005.
    (3) With respect to subparts B, C, and D of this part, the Secretary 
or designee may, at his or her sole and exclusive discretion and after 
coordination with OPM, apply one or more of these subparts to a specific 
category or categories of eligible civilian employees at any time. With 
respect to any given category of civilian employees, the Secretary or 
designee may apply some of these subparts, but not others, and such 
coverage determinations may be made effective on different dates (e.g., 
in order to phase in coverage under a new classification, pay, and 
performance management system).
    (4) DHS will notify affected employees and labor organizations in 
advance of the application of one or more subparts of this part to them.
    (c) Until the Secretary or designee makes a determination under 
paragraph (b) of this section to apply the provisions of one or more 
subparts of this part to a particular category or categories of eligible 
DHS employees, those DHS employees will continue to be covered by the 
applicable Federal laws and regulations that would apply to them in the 
absence of this part. All personnel actions affecting DHS employees must 
be based on the Federal laws and regulations applicable to them on the 
effective date of the action.
    (d) Any new DHS classification, pay, or performance management 
system covering Senior Executive Service (SES) members must be 
consistent with the policies and procedures established by the 
Governmentwide SES pay-for-performance system authorized by 5 U.S.C. 
chapter 53, subchapter VIII, and applicable implementing regulations 
issued by OPM. If the Secretary determines that SES members employed by 
DHS should be covered by classification, pay, or performance management 
provisions that differ substantially from the Governmentwide SES pay-
for-performance system, the Secretary and the Director must issue joint 
regulations consistent with all of the requirements of 5 U.S.C. 9701.
    (e) At his or her sole and exclusive discretion, the Secretary or 
designee may, after coordination with OPM, rescind the application under 
paragraph (b) of this section of one or more subparts of this part to a 
particular category of employees and prescribe implementing directives 
for converting that category of employees to coverage under applicable 
title 5 provisions. DHS will notify affected employees and labor 
organizations in advance of a decision to rescind the application of one 
or more subparts of this part to them.
    (f) The Secretary or other authorized DHS official may exercise an 
independent legal authority to establish a parallel system that follows 
some or all of the requirements in this part for a category of employees 
who are not eligible for coverage under this part.



Sec. 9701.103  Definitions.

    In this part:
    Authorized agency official means the Secretary or an official who is 
authorized to act for the Secretary in the matter concerned.
    Coordination means the process by which DHS, after appropriate 
staff-level consultation, officially provides OPM with notice of a 
proposed action and intended effective date. If OPM concurs, or does not 
respond to that notice within 30 calendar days, DHS may proceed with the 
proposed action. However, if OPM indicates the matter has Governmentwide 
implications or consequences, DHS will not proceed until the matter is 
resolved. The coordination process is intended to give due deference to 
the flexibilities afforded DHS by the Homeland Security Act and the 
regulations in this part,

[[Page 902]]

without compromising OPM's institutional responsibility, as codified in 
5 U.S.C. chapter 11 and Executive Order 13197 of January 18, 2001, to 
provide Governmentwide oversight in human resources management programs 
and practices.
    Department or DHS means the Department of Homeland Security.
    Director means the Director of the Office of Personnel Management.
    Employee means an employee within the meaning of that term in 5 
U.S.C. 2105.
    General Schedule or GS means the General Schedule classification and 
pay system established under chapter 51 and subchapter III of chapter 53 
of title 5, U.S. Code.
    Implementing directives means directives issued at the Departmental 
level by the Secretary or designee to carry out any policy or procedure 
established in accordance with this part. These directives may apply 
Departmentwide or to any part of the Department as determined by the 
Secretary at his or her sole and exclusive discretion.
    OPM means the Office of Personnel Management.
    Secretary means the Secretary of Homeland Security or, as 
authorized, the Deputy Secretary of Homeland Security.
    Secretary or designee means the Secretary or a DHS official 
authorized to act for the Secretary in the matter concerned who serves 
as--
    (1) The Undersecretary for Management; or
    (2) The Chief Human Capital Officer for DHS.



Sec. 9701.104  Scope of authority.

    Subject to the requirements and limitations in 5 U.S.C. 9701, the 
provisions in the following chapters of title 5, U.S. Code, and any 
related regulations, may be waived or modified in exercising the 
authority in 5 U.S.C. 9701:
    (a) Chapter 43, dealing with performance appraisal systems;
    (b) Chapter 51, dealing with General Schedule job classification;
    (c) Chapter 53, dealing with pay for General Schedule employees, pay 
and job grading for Federal Wage System employees, and pay for certain 
other employees;
    (d) Chapter 71, dealing with labor relations;
    (e) Chapter 75, dealing with adverse actions and certain other 
actions; and
    (f) Chapter 77, dealing with the appeal of adverse actions and 
certain other actions.



Sec. 9701.105  Continuing collaboration.

    (a) In accordance with 5 U.S.C. 9701(e)(1)(D), this section provides 
employee representatives with an opportunity to participate in the 
development of implementing directives. This process is not subject to 
the requirements established by subpart E of this part, including but 
not limited to Sec. Sec. 9701.512 (regarding conferring on procedures 
for the exercise of management rights), 9701.517(a)(5) (regarding 
enforcement of the duty to consult or negotiate), 9701.518 (regarding 
the duty to bargain, confer, and consult), or 9701.519 (regarding 
impasse procedures).
    (b)(1) For the purpose of this section, the term ``employee 
representatives'' includes representatives of labor organizations with 
exclusive recognition rights for units of DHS employees, as well as 
representatives of employees who are not within a unit for which a labor 
organization has exclusive recognition.
    (2) Consistent with 5 U.S.C. 9701(e)(2)(A), (B), and (D), DHS will 
determine the number of employee representatives to be engaged in the 
continuing collaboration process.
    (3) Each national labor organization with multiple collective 
bargaining units accorded exclusive recognition will determine how its 
units will be represented within the limitations imposed by DHS.
    (c)(1) Within timeframes specified by DHS, employee representatives 
will be provided with an opportunity to submit written comments and/or 
to discuss their views with DHS officials on proposed final draft 
implementing directives.
    (2) As the Department determines necessary, employee representatives 
will be provided with an opportunity to discuss their views with DHS 
officials and/or to submit written comments at initial identification of 
implementation issues and conceptual design and/

[[Page 903]]

or at review of draft recommendations or alternatives.
    (d) Employee representatives will be provided with access to 
information, including research, to make their participation in the 
continuing collaboration process productive.
    (e) Any written comments submitted by employee representatives 
regarding proposed final draft implementing directives will become part 
of the record and will be forwarded to the Secretary or designee for 
consideration in making a final decision.
    (f) Nothing in the continuing collaboration process affects the 
right of the Secretary to determine the content of implementing 
directives and to make them effective at any time.
    (g) In accordance with 5 U.S.C. 9701(e)(2), any procedures necessary 
to carry out this section will be established by the Secretary and the 
Director jointly as internal rules of Departmental procedure which will 
not be subject to review.



Sec. 9701.106  Relationship to other provisions.

    (a)(1) The provisions of title 5, U.S. Code, are waived or modified 
to the extent authorized by 5 U.S.C. 9701 to conform to the provisions 
of this part.
    (2) This part must be interpreted in a way that recognizes the 
critical mission of the Department. Each provision of this part must be 
construed to promote the swift, flexible, effective day-to-day 
accomplishment of this mission, as defined by the Secretary or designee. 
The interpretation of the regulations in this part by DHS and OPM must 
be accorded great deference.
    (b) For the purpose of applying other provisions of law or 
Governmentwide regulations that reference provisions under chapters 43, 
51, 53, 71, 75, and 77 of title 5, U.S. Code, the referenced provisions 
are not waived but are modified consistent with the corresponding 
regulations in this part, except as otherwise provided in this part 
(including paragraph (c) of this section) or in DHS implementing 
directives. Applications of this rule include, but are not limited to, 
the following:
    (1) If another provision of law or Governmentwide regulations 
requires coverage under one of the chapters modified or waived under 
this part (i.e., chapters 43, 51, 53, 71, 75, and 77 of title 5, U.S. 
Code), DHS employees are deemed to be covered by the applicable chapter 
notwithstanding coverage under a system established under this part. 
Selected examples of provisions that continue to apply to any DHS 
employees (notwithstanding coverage under subparts B through G of this 
part) include, but are not limited to, the following:
    (i) Foreign language awards for law enforcement officers under 5 
U.S.C. 4521-4523;
    (ii) Pay for firefighters under 5 U.S.C. 5545b;
    (iii) Differentials for duty involving physical hardship or hazard 
under 5 U.S.C. 5545(d);
    (iv) Recruitment, relocation, and retention payments under 5 U.S.C. 
5753-5754;
    (v) Physicians' comparability allowances under 5 U.S.C. 5948; and
    (vi) The higher cap on relocation bonuses for law enforcement 
officers established by section 407 of the Federal Employees Pay 
Comparability Act of 1990 (section 529 of Pub. L. 101-509).
    (2) In applying the back pay law in 5 U.S.C. 5596 to DHS employees 
covered by subpart G of this part (dealing with appeals), the reference 
in section 5596(b)(1)(A)(ii) to 5 U.S.C. 7701(g) (dealing with attorney 
fees) is considered to be a reference to a modified section 7701(g) that 
is consistent with Sec. 9701.706(h).
    (3) In applying the back pay law in 5 U.S.C. 5596 to DHS employees 
covered by subpart E of this part (dealing with labor relations), the 
reference in section 5596(b)(5) to section 7116 (dealing with unfair 
labor practices) is considered to be a reference to a modified section 
7116 that is consistent with Sec. 9701.517.
    (c) When a specified category of employees is covered by a 
classification and pay system established under subparts B and C of this 
part, the following provisions do not apply:
    (1) Time-in-grade restrictions that apply to competitive service GS 
positions under 5 CFR part 300, subpart F;
    (2) Supervisory differentials under 5 U.S.C. 5755; and

[[Page 904]]

    (3) Law enforcement officer special rates and geographic adjustments 
under sections 403 and 404 of the Federal Employees Pay Comparability 
Act of 1990 (section 529 of Pub. L. 101-509).
    (d) Nothing in this part waives, modifies or otherwise affects the 
employment discrimination laws that the Equal Employment Opportunity 
Commission (EEOC) enforces under 42 U.S.C. 2000e et seq., 29 U.S.C. 621 
et seq., 29 U.S.C. 791 et seq., and 29 U.S.C. 206(d). Employees and 
applicants for employment in DHS will continue to be covered by EEOC's 
Federal sector regulations found at 29 CFR part 1614.



Sec. 9701.107  Program evaluation.

    (a) DHS will establish procedures for evaluating the regulations in 
this part and their implementation. DHS will provide designated employee 
representatives with an opportunity to be briefed and a specified 
timeframe to provide comments on the design and results of program 
evaluations.
    (b) Involvement of employee representatives under this section will 
occur at the following stages:
    (1) Identification of the scope, objectives, and methodology to be 
used in program evaluation; and
    (2) Review of draft findings and recommendations.
    (c) Involvement in the evaluation process does not waive the rights 
of any party under applicable law or regulations.



                        Subpart B_Classification

                                 General



Sec. 9701.201  Purpose.

    (a) This subpart contains regulations establishing a classification 
structure and rules for covered DHS employees and positions to replace 
the classification structure and rules in 5 U.S.C. chapter 51 and the 
job grading system in 5 U.S.C. chapter 53, subchapter IV, in accordance 
with the merit principle of equal pay for work of equal value.
    (b) Any classification system prescribed under this subpart must be 
established in conjunction with the pay system described in subpart C of 
this part.



Sec. 9701.202  Coverage.

    (a) This subpart applies to eligible DHS employees and positions 
listed in paragraph (b) of this section, subject to a determination by 
the Secretary or designee under Sec. 9701.102(b).
    (b) The following employees and positions are eligible for coverage 
under this subpart:
    (1) Employees and positions that would otherwise be covered by the 
General Schedule classification system established under 5 U.S.C. 
chapter 51;
    (2) Employees and positions that would otherwise be covered by a 
prevailing rate system established under 5 U.S.C. chapter 53, subchapter 
IV;
    (3) Employees in senior-level (SL) and scientific or professional 
(ST) positions who would otherwise be covered by 5 U.S.C. 5376; and
    (4) Members of the Senior Executive Service (SES) who would 
otherwise be covered by 5 U.S.C. chapter 53, subchapter VIII, subject to 
Sec. 9701.102(d).



Sec. 9701.203  Waivers.

    (a) When a specified category of employees is covered by a 
classification system established under this subpart, the provisions of 
5 U.S.C. chapter 51 and 5 U.S.C. 5346, and related regulations, are 
waived with respect to that category of employees, except as provided in 
paragraph (b) of this section, Sec. 9701.106, and Sec. 9701.222(d) 
(with respect to OPM's authority under 5 U.S.C. 5112(b) and 5346(c) to 
act on requests for review of classification decisions).
    (b) Section 5108 of title 5, U.S. Code, dealing with the 
classification of positions above GS-15, is not waived.



Sec. 9701.204  Definitions.

    In this subpart:
    Band means a work level or pay range within an occupational cluster.
    Basic pay means an employee's rate of pay before any deductions and 
exclusive of additional pay of any kind, except as expressly provided by 
law or regulation. For the specific purposes prescribed in Sec. Sec. 
9701.332(c) and 9701.333, respectively, basic pay includes locality and 
special rate supplements.
    Classification, also referred to as job evaluation, means the 
process of analyzing and assigning a job or position to an occupational 
series, cluster, and

[[Page 905]]

band for pay and other related purposes.
    Competencies means the measurable or observable knowledge, skills, 
abilities, behaviors, and other characteristics required by a position.
    Occupational cluster means a grouping of one or more associated or 
related occupations or positions. An occupational cluster may include 
one or more occupational series.
    Occupational series means the number OPM or DHS assigns to a group 
or family of similar positions for identification purposes (for example: 
0110, Economist Series; 1410, Librarian Series).
    Position or Job means the duties, responsibilities, and related 
competency requirements that are assigned to an employee whom the 
Secretary or designee approves for coverage under Sec. 9701.202(a).



Sec. 9701.205  Bar on collective bargaining.

    As provided in the definition of conditions of employment in Sec. 
9701.504, any classification system established under this subpart is 
not subject to collective bargaining. This bar on collective bargaining 
applies to all aspects of the classification system, including but not 
limited to coverage determinations, the design of the classification 
structure, and classification methods, criteria, and administrative 
procedures and arrangements.

                        Classification Structure



Sec. 9701.211  Occupational clusters.

    For the purpose of classifying positions, DHS may, after 
coordination with OPM, establish occupational clusters based on factors 
such as mission or function; nature of work; qualifications or 
competencies; career or pay progression patterns; relevant labor-market 
features; and other characteristics of those occupations or positions. 
DHS must document in implementing directives the criteria and rationale 
for grouping occupations or positions into occupational clusters.



Sec. 9701.212  Bands.

    (a) For purposes of identifying relative levels of work and 
corresponding pay ranges, DHS may, after coordination with OPM, 
establish one or more bands within each occupational cluster.
    (b) Each occupational cluster may include, but is not limited to, 
the following bands:
    (1) Entry/Developmental--work that involves gaining the competencies 
needed to perform successfully in a Full Performance band through 
appropriate formal training and/or on-the-job experience.
    (2) Full Performance--work that involves the successful completion 
of any required entry-level training and/or developmental activities 
necessary to independently perform the full range of non-supervisory 
duties of a position in an occupational cluster.
    (3) Senior Expert--work that involves an extraordinary level of 
specialized knowledge or expertise upon which DHS relies for the 
accomplishment of critical mission goals and objectives; reserved for a 
limited number of non-supervisory employees.
    (4) Supervisory--work that may involve hiring or selecting 
employees, assigning work, managing performance, recognizing and 
rewarding employees, and other associated duties.
    (c) DHS must document in implementing directives the definitions for 
each band which specify the type and range of difficulty and 
responsibility, qualifications, competencies, or other characteristics 
of the work encompassed by the band.
    (d) DHS must, after coordination with OPM, establish qualification 
standards and requirements for each occupational cluster, occupational 
series, and/or band. DHS may use the qualification standards established 
by OPM or, after coordination with OPM, may establish different 
qualification standards. This paragraph does not waive or modify any DHS 
authority to establish qualification standards or requirements under 5 
U.S.C. chapters 31 and 33 and OPM implementing regulations.

[[Page 906]]

                         Classification Process



Sec. 9701.221  Classification requirements.

    (a) DHS must develop a methodology for describing and documenting 
the duties, qualifications, and other requirements of categories of 
jobs, and DHS must make such descriptions and documentation available to 
affected employees.
    (b) An authorized agency official must--
    (1) Assign occupational series to jobs consistent with occupational 
series definitions established by OPM under 5 U.S.C. 5105 and 5346 or by 
DHS, after coordination with OPM; and
    (2) Apply the criteria and definitions required by Sec. 9701.211 
and Sec. 9701.212 to assign jobs to an appropriate occupational cluster 
and band.
    (c) DHS must establish procedures for classifying jobs and may make 
such inquiries or investigations of the duties, responsibilities, and 
qualification requirements of jobs as it considers necessary for the 
purpose of this section.
    (d) Classification decisions become effective on the date designated 
by the authorized agency official who makes the decision.
    (e) DHS must establish a plan to periodically review the accuracy of 
classification decisions.



Sec. 9701.222  Reconsideration of classification decisions.

    (a) An individual employee may request that DHS or OPM reconsider 
the pay system, occupational cluster, occupational series, or band 
assigned to his or her current official position of record at any time.
    (b) DHS will, after coordination with OPM, establish implementing 
directives for reviewing requests for reconsideration, including 
nonreviewable issues, rights of representation, and the effective date 
of any corrective actions. OPM will, after consulting with DHS, 
establish separate policies and procedures for reviewing reconsideration 
requests.
    (c) An employee may request OPM to review a DHS determination made 
under paragraph (a) of this section. If an employee does not request an 
OPM reconsideration decision, DHS's classification determination is 
final and not subject to further review or appeal.
    (d) OPM's final determination on a request made under this section 
is not subject to further review or appeal.

                         Transitional Provisions



Sec. 9701.231  Conversion of positions and employees to the DHS 

classification system.

    (a) This section describes the transitional provisions that apply 
when DHS positions and employees are converted to a classification 
system established under this subpart. Affected positions and employees 
may convert from the GS system, a prevailing rate system, the SL/ST 
system, or the SES system, as provided in Sec. 9701.202. For the 
purpose of this section, the terms ``convert,'' ``converted,'' 
``converting,'' and ``conversion'' refer to positions and employees that 
become covered by the classification system as a result of a coverage 
determination made under Sec. 9701.102(b) and exclude employees who are 
reassigned or transferred from a noncovered position to a position 
already covered by the DHS system.
    (b) DHS will issue implementing directives prescribing policies and 
procedures for converting the GS or prevailing rate grade of a position 
to a band and for converting SL/ST and SES positions to a band upon 
initial implementation of the DHS classification system. Such procedures 
must include provisions for converting an employee who is retaining a 
grade under 5 U.S.C. chapter 53, subchapter VI, immediately prior to 
conversion. As provided in Sec. 9701.373, DHS must convert employees to 
the system without a reduction in their rate of pay (including basic pay 
and any applicable locality payment under 5 U.S.C. 5304, special rate 
under 5 U.S.C. 5305, locality rate supplement under Sec. 9701.332, or 
special rate supplement under Sec. 9701.333).



Sec. 9701.232  Special transition rules for Federal Air Marshal Service.

    Notwithstanding any other provision in this subpart, if DHS 
transfers Federal Air Marshal Service positions from the Transportation 
Security Administration (TSA) to another organization within DHS, DHS 
may cover those positions under a classification

[[Page 907]]

system that is parallel to the classification system that was applicable 
to the Federal Air Marshal Service within TSA. DHS may, after 
coordination with OPM, modify that system. DHS will issue implementing 
directives on converting Federal Air Marshal Service employees to any 
new classification system that may subsequently be established under 
this subpart, consistent with the conversion rules in Sec. 9701.231.



                  Subpart C_Pay and Pay Administration

                                 General



Sec. 9701.301  Purpose.

    (a) This subpart contains regulations establishing pay structures 
and pay administration rules for covered DHS employees to replace the 
pay structures and pay administration rules established under 5 U.S.C. 
chapter 53, as authorized by 5 U.S.C. 9701. These regulations are 
designed to provide DHS with the flexibility to allocate available funds 
strategically in support of DHS mission priorities and objectives. 
Various features that link pay to employees' performance ratings are 
designed to promote a high-performance culture within DHS.
    (b) Any pay system prescribed under this subpart must be established 
in conjunction with the classification system described in subpart B of 
this part.
    (c) The pay system established under this subpart, working in 
conjunction with the performance management system established under 
subpart D of this part, is designed to incorporate the following 
features:
    (1) Adherence to merit principles set forth in 5 U.S.C. 2301;
    (2) A fair, credible, and transparent employee performance appraisal 
system;
    (3) A link between elements of the pay system established in this 
subpart, the employee performance appraisal system, and the Department's 
strategic plan;
    (4) Employee involvement in the design and implementation of the 
system (as specified in Sec. 9701.105);
    (5) Adequate training and retraining for supervisors, managers, and 
employees in the implementation and operation of the pay system 
established in this subpart;
    (6) Periodic performance feedback and dialogue among supervisors, 
managers, and employees throughout the appraisal period, and setting 
timetables for review;
    (7) Effective safeguards so that the management of the system is 
fair and equitable and based on employee performance; and
    (8) A means for ensuring that adequate resources are allocated for 
the design, implementation, and administration of the performance 
management system that supports the pay system established under this 
subpart.



Sec. 9701.302  Coverage.

    (a) This subpart applies to eligible DHS employees in the categories 
listed in paragraph (b) of this section, subject to a determination by 
the Secretary or designee under Sec. 9701.102(b).
    (b) The following employees are eligible for coverage under this 
subpart:
    (1) Employees who would otherwise be covered by the General Schedule 
pay system established under 5 U.S.C. chapter 53, subchapter III;
    (2) Employees who would otherwise be covered by a prevailing rate 
system established under 5 U.S.C. chapter 53, subchapter IV;
    (3) Employees in senior-level (SL) and scientific or professional 
(ST) positions who would otherwise be covered by 5 U.S.C. 5376; and
    (4) Members of the Senior Executive Service (SES) who would 
otherwise be covered by 5 U.S.C. chapter 53, subchapter VIII, subject to 
Sec. 9701.102(d).



Sec. 9701.303  Waivers.

    (a) When a specified category of employees is covered by the pay 
system established under this subpart, the provisions of 5 U.S.C. 
chapter 53, and related regulations, are waived with respect to that 
category of employees, except as provided in Sec. 9701.106 and 
paragraphs (b) through (f) of this section.
    (b) The following provisions of 5 U.S.C. chapter 53 are not waived:
    (1) Section 5307, dealing with the aggregate limitation on pay;

[[Page 908]]

    (2) Sections 5311 through 5318, dealing with Executive Schedule 
positions;
    (3) Section 5371, insofar as it authorizes OPM to apply the 
provisions of 38 U.S.C. chapter 74 to DHS employees in health care 
positions covered by section 5371 in lieu of any DHS pay system 
established under this subpart or the following provisions of title 5, 
U.S. Code: Chapters 51, 53, and 61, and subchapter V of chapter 55. The 
reference to ``chapter 51'' in section 5371 is deemed to include a 
classification system established under subpart B of this part; and
    (4) Section 5377, dealing with the critical pay authority.
    (c) Section 5373 is modified. The limit on rates of basic pay, 
including any applicable locality payment or supplement, for DHS 
employees who are not covered by this subpart and whose pay is set by 
administrative action (e.g., Coast Guard Academy faculty) is increased 
to the rate for level III of the Executive Schedule.
    (d) Section 5379 is modified. DHS may, after coordination with OPM, 
establish and administer a student loan repayment program for DHS 
employees, except that DHS may not make loan payments for any noncareer 
appointees to the SES (as defined in 5 U.S.C. 3132(a)(7)) or for any 
employee occupying a position that is excepted from the competitive 
service because of its confidential, policy-determining, policy-making, 
or policy-advocating character. Notwithstanding Sec. 9701.302(a), any 
DHS employee otherwise covered by section 5379 is eligible for coverage 
under the provisions established under this paragraph, subject to a 
determination by the Secretary or designee under Sec. 9701.102(b).
    (e) In approving the coverage of employees who would otherwise be 
covered by a prevailing rate system established under 5 U.S.C. chapter 
53, subchapter IV, DHS may limit the waiver so that affected employees 
remain entitled to environmental or other differentials established 
under 5 U.S.C. 5343(c)(4) and night shift differentials established 
under 5 U.S.C. 5343(f) if such employees are grouped in separate 
occupational clusters (established under subpart B of this part) that 
are limited to employees who would otherwise be covered by a prevailing 
rate system.
    (f) Employees in SL/ST positions and SES members who are covered by 
a basic pay system established under this subpart are considered to be 
paid under 5 U.S.C. 5376 and 5382, respectively, for the purpose of 
applying 5 U.S.C. 5307(d).



Sec. 9701.304  Definitions.

    In this part:
    48 contiguous States means the States of the United States, 
excluding Alaska and Hawaii, but including the District of Columbia.
    Band means a work level or pay range within an occupational cluster.
    Band rate range means the range of rates of basic pay (excluding any 
locality or special rate supplements) applicable to employees in a 
particular band, as described in Sec. 9701.321. Each band rate range is 
defined by a minimum and maximum rate.
    Basic pay means an employee's rate of pay before any deductions and 
exclusive of additional pay of any kind, except as expressly provided by 
law or regulation. For the specific purposes prescribed in Sec. Sec. 
9701.332(c) and 9701.333, respectively, basic pay includes locality and 
special rate supplements.
    Competencies means the measurable or observable knowledge, skills, 
abilities, behaviors, and other characteristics required by a position.
    Day means a calendar day.
    Demotion means a reduction to a lower band within the same 
occupational cluster or a reduction to a lower band in a different 
occupational cluster under implementing directives issued by DHS 
pursuant to Sec. 9701.355.
    Locality rate supplement means a geographic-based addition to basic 
pay, as described in Sec. 9701.332.
    Modal rating means the rating of record that occurs most frequently 
in a particular pay pool.
    Occupational cluster means a grouping of one or more associated or 
related occupations or positions. An occupational cluster may include 
one or more occupational series.
    Promotion means an increase to a higher band within the same 
occupational cluster or an increase to a higher band in a different 
occupational

[[Page 909]]

cluster under implementing directives issued by DHS pursuant to Sec. 
9701.355.
    Rating of record means a performance appraisal prepared--
    (1) At the end of an appraisal period covering an employee's 
performance of assigned duties against performance expectations (as 
defined in Sec. 9701.404) over the applicable period; or
    (2) To support a pay determination, including one granted in 
accordance with subpart C of this part, a within-grade increase granted 
under 5 CFR 531.404, or a pay determination granted under other 
applicable rules.
    SES means the Senior Executive Service established under 5 U.S.C. 
chapter 31, subchapter II.
    SL/ST refers to an employee serving in a senior-level position paid 
under 5 U.S.C. 5376. The term ``SL'' identifies a senior-level employee 
covered by 5 U.S.C. 3324 and 5108. The term ``ST'' identifies an 
employee who is appointed under the special authority in 5 U.S.C. 3325 
to a scientific or professional position established under 5 U.S.C. 
3104.
    Special rate supplement means an addition to basic pay for a 
particular category of employees to address staffing problems, as 
described in Sec. 9701.333. A special rate supplement is paid in place 
of any lesser locality rate supplement that would otherwise apply.
    Unacceptable performance means the failure to meet one or more 
performance expectations, as described in Sec. 9701.406.



Sec. 9701.305  Bar on collective bargaining.

    As provided in the definition of conditions of employment in Sec. 
9701.504, any pay program established under authority of this subpart is 
not subject to collective bargaining. This bar on collective bargaining 
applies to all aspects of the pay program, including but not limited to 
coverage decisions, the design of pay structures, the setting and 
adjustment of pay levels, pay administration rules and policies, and 
administrative procedures and arrangements.

                         Overview of Pay System



Sec. 9701.311  Major features.

    Through the issuance of implementing directives, DHS will establish 
a pay system that governs the setting and adjusting of covered 
employees' rates of pay. The DHS pay system will include the following 
features:
    (a) A structure of rate ranges linked to various bands for each 
occupational cluster, in alignment with the classification structure 
described in subpart B of this part;
    (b) Policies regarding the setting and adjusting of basic pay rate 
ranges based on mission requirements, labor market conditions, and other 
factors, as described in Sec. Sec. 9701.321 and 9701.322;
    (c) Policies regarding the setting and adjusting of supplements to 
basic pay based on local labor market conditions and other factors, as 
described in Sec. Sec. 9701.331 through 9701.334;
    (d) Policies regarding employees' eligibility for pay increases 
based on adjustments in rate ranges and supplements, as described in 
Sec. Sec. 9701.323 through 9701.325 and 9701.335 through 9701.337;
    (e) Policies regarding performance-based pay adjustments, as 
described in Sec. Sec. 9701.341 through 9701.346;
    (f) Policies on basic pay administration, including movement between 
occupational clusters, as described in Sec. Sec. 9701.351 through 
9701.356;
    (g) Policies regarding special payments that are not basic pay, as 
described in Sec. Sec. 9701.361 through 9701.363; and
    (h) Linkages to employees' performance ratings of records, as 
described in subpart D of this part.



Sec. 9701.312  Maximum rates.

    (a) DHS may not pay any employee an annual rate of basic pay in 
excess of the rate for level III of the Executive Schedule, except as 
provided in paragraph (b) of this section.
    (b) DHS may establish the maximum annual rate of basic pay for 
members of the SES at the rate for level II of the Executive Schedule if 
DHS obtains the certification specified in 5 U.S.C. 5307(d).

[[Page 910]]



Sec. 9701.313  Homeland Security Compensation Committee.

    (a) DHS will establish a Homeland Security Compensation Committee to 
provide options and/or recommendations for consideration by the 
Secretary or designee on strategic compensation matters such as 
Departmental compensation policies and principles, the annual allocation 
of funds between market and performance pay adjustments, and the annual 
adjustment of rate ranges and locality and special rate supplements. The 
Compensation Committee will consider factors such as turnover, 
recruitment, and local labor market conditions in providing options and 
recommendations for consideration by the Secretary. The Secretary's or 
designee's determination with regard to those options and/or 
recommendations is final and not subject to further review.
    (b) The Compensation Committee will be chaired by the DHS 
Undersecretary for Management. The Compensation Committee has 14 
members, including 4 officials of labor organizations granted national 
consultation rights (NCR) in accordance with Sec. 9701.518(d)(2). An 
OPM official will serve as an ex officio member of the Compensation 
Committee. DHS will provide technical staff to support the Compensation 
Committee.
    (c) DHS will establish procedures governing the membership and 
operation of the Compensation Committee.
    (d) An individual will be selected by the Chair to facilitate 
Compensation Committee meetings. The facilitator will be selected from a 
list of nominees developed jointly by representatives of the Department 
and NCR labor organizations, the latter acting as a single party, 
according to procedures and time limits established by implementing 
directives. Nominees must be known for their integrity, impartiality, 
and expertise in facilitation and compensation. If the Department and 
the labor organizations are unable to reach agreement on a joint list of 
nominees, they will enlist the services of the Federal Mediation and 
Conciliation Service (FMCS) to assist them. If the parties are unable to 
reach agreement with FMCS assistance, each party will prepare a list of 
up to three nominees and provide those separate lists to FMCS; FMCS may 
add up to three additional nominees. From that combined list of 
nominees, the Department and the labor organizations, the latter acting 
as a single party, will alternately strike names from the list until 
five names remain; those five nominees will be submitted to the Chair 
for consideration. The Chair may request that the parties develop an 
additional list of nominees. If the representatives of the Department's 
NCR labor organizations, acting as a single party, do not participate in 
developing the list of nominees in accordance with this section, the 
Chair will select the facilitator.
    (e) After considering the views of all Compensation Committee 
members, the Chair prepares and provides options and/or recommendations 
to the Secretary or designee. Members may present their views on the 
final recommendations in writing as part of the final recommendation 
package. The Secretary or designee will make the final decision and 
notify the Compensation Committee. This process is not subject to the 
requirements established by Sec. Sec. 9701.512 (regarding conferring on 
procedures for the exercise of management rights), 9701.517(a)(5) 
(regarding enforcement of the duty to consult or negotiate), 9701.518 
(regarding the duty to bargain, confer, and consult), or 9701.519 
(regarding impasse procedures).
    (f) The Secretary retains the right to make determinations regarding 
the annual allocation of funds between market and performance pay 
adjustments, the annual adjustment of rate ranges and locality and 
special rate supplements, or any other matter recommended by the 
Compensation Committee, and to make such determinations effective at any 
time.



Sec. 9701.314  DHS responsibilities.

    DHS responsibilities in implementing this subpart include the 
following:
    (a) Providing OPM with information regarding the implementation of 
the programs authorized under this subpart at OPM's request;
    (b) Participating in any interagency pay coordination council or 
group established by OPM to ensure that DHS

[[Page 911]]

pay policies and plans are coordinated with other agencies; and
    (c) Fulfilling all other responsibilities prescribed in this 
subpart.

                    Setting and Adjusting Rate Ranges



Sec. 9701.321  Structure of bands.

    (a) DHS may, after coordination with OPM, establish ranges of basic 
pay for bands, with minimum and maximum rates set and adjusted as 
provided in Sec. 9701.322. Rates must be expressed as annual rates.
    (b) For each band within an occupational cluster, DHS will establish 
a common rate range that applies in all locations.



Sec. 9701.322  Setting and adjusting rate ranges.

    (a) Within its sole and exclusive discretion, DHS may, after 
coordination with OPM, set and adjust the rate ranges established under 
Sec. 9701.321 on an annual basis. In determining the rate ranges, DHS 
and OPM may consider mission requirements, labor market conditions, 
availability of funds, pay adjustments received by employees of other 
Federal agencies, and any other relevant factors.
    (b) DHS may, after coordination with OPM, determine the effective 
date of newly set or adjusted band rate ranges. Unless DHS determines 
that a different effective date is needed for operational reasons, these 
adjustments will become effective on or about the date of the annual 
General Schedule pay adjustment authorized by 5 U.S.C. 5303.
    (c) DHS may establish different rate ranges and provide different 
rate range adjustments for different bands.
    (d) DHS may adjust the minimum and maximum rates of a band by 
different percentages.



Sec. 9701.323  Eligibility for pay increase associated with a rate range 

adjustment.

    (a) When a band rate range is adjusted under Sec. 9701.322, 
employees covered by that band are eligible for an individual pay 
increase. An employee who meets or exceeds performance expectations 
(i.e., has a rating of record above the unacceptable performance level 
for the most recently completed appraisal period) must receive an 
increase in basic pay equal to the percentage value of any increase in 
the minimum rate of the employee's band resulting from a rate range 
adjustment under Sec. 9701.322. The pay increase takes effect at the 
same time as the corresponding rate range adjustment, except as provided 
in Sec. Sec. 9701.324 and 9701.325. For an employee receiving a 
retained rate, the amount of the increase under this paragraph is 
determined under Sec. 9701.356.
    (b) If an employee does not have a rating of record for the most 
recently completed appraisal period, he or she must be treated in the 
same manner as an employee who meets or exceeds performance expectations 
and is entitled to receive an increase based on the rate range 
adjustment, as provided in paragraph (a) of this section.
    (c) An employee whose rating of record is unacceptable is prohibited 
from receiving a pay increase as a result of a rate range adjustment, 
except as provided by Sec. Sec. 9701.324 and 9701.325. Because the 
employee's pay remains unchanged, failure to receive a pay increase is 
not considered an adverse action under subpart F of this part.



Sec. 9701.324  Treatment of employees whose rate of basic pay does not fall 

below the minimum rate of their band.

    An employee who does not receive a pay increase under Sec. 9701.323 
because of an unacceptable rating of record and whose rate of basic pay 
does not fall below the minimum rate of his or her band as a result of 
that rating will receive such an increase if he or she demonstrates 
performance that meets or exceeds performance expectations, as reflected 
by a new rating of record issued under Sec. 9701.409(b). Such an 
increase will be made effective on the first day of the first pay period 
beginning on or after the date the new rating of record is issued.



Sec. 9701.325  Treatment of employees whose rate of basic pay falls below the 

minimum rate of their band.

    (a) In the case of an employee who does not receive a pay increase 
under Sec. 9701.323 because of an unacceptable rating of record and 
whose rate of basic pay falls below the minimum rate of

[[Page 912]]

his or her band as a result of that rating, DHS must--
    (1) If the employee demonstrates performance that meets or exceeds 
performance expectations within 90 days after the date of the rate range 
adjustment, issue a new rating of record under Sec. 9701.409(b) and 
adjust the employee's pay prospectively by making the increase effective 
on the first day of the first pay period beginning on or after the date 
the new rating of record is issued; or
    (2) Initiate action within 90 days after the date of the rate range 
adjustment to demote or remove the employee in accordance with the 
adverse action procedures established in subpart F of this part.
    (b) If DHS fails to initiate a removal or demotion action under 
paragraph (a)(2) of this section within 90 days after the date of a rate 
range adjustment, the employee becomes entitled to the minimum rate of 
his or her band rate range on the first day of the first pay period 
beginning on or after the 90th day following the date of the rate range 
adjustment.

                  Locality and Special Rate Supplements



Sec. 9701.331  General.

    The basic pay ranges established under Sec. Sec. 9701.321 through 
9701.323 may be supplemented in appropriate circumstances by locality or 
special rate supplements, as described in Sec. Sec. 9701.332 through 
9701.335. These supplements are expressed as a percentage of basic pay 
and are set and adjusted as described in Sec. 9701.334. As authorized 
by Sec. 9701.356, DHS implementing directives will determine the extent 
to which Sec. Sec. 9701.331 through 9701.337 apply to employees 
receiving a retained rate.



Sec. 9701.332  Locality rate supplements.

    (a) For each band rate range, DHS may, after coordination with OPM, 
establish locality rate supplements that apply in specified locality pay 
areas. Locality rate supplements apply to employees whose official duty 
station is located in the given area. DHS may provide different locality 
rate supplements for different occupational clusters or for different 
bands within the same occupational cluster in the same locality pay 
area.
    (b) For the purpose of establishing and modifying locality pay 
areas, 5 U.S.C. 5304 is not waived. A DHS decision to use the locality 
pay area boundaries established under 5 U.S.C. 5304 does not require 
separate DHS regulations. DHS may, after coordination with OPM and in 
accordance with the public notice and comment provisions of 5 U.S.C. 
553, publish Departmental regulations (6 CFR Chapter I) in the Federal 
Register that establish and adjust different locality pay areas within 
the 48 contiguous States or establish and adjust new locality pay areas 
outside the 48 contiguous States. These regulations are subject to the 
continuing collaboration process described in Sec. 9701.105. As 
provided by 5 U.S.C. 5304(f)(2)(B), judicial review of any DHS 
regulation regarding the establishment or adjustment of locality pay 
areas is limited to whether or not the regulation was promulgated in 
accordance with 5 U.S.C. 553.
    (c) Locality rate supplements are considered basic pay for only the 
following purposes:
    (1) Retirement under 5 U.S.C. chapter 83 or 84;
    (2) Life insurance under 5 U.S.C. chapter 87;
    (3) Premium pay under 5 U.S.C. chapter 55, subchapter V, or similar 
payments under other legal authority;
    (4) Severance pay under 5 U.S.C. 5595;
    (5) Application of the maximum rate limitation set forth in Sec. 
9701.312;
    (6) Determining the rate of basic pay upon conversion to the DHS pay 
system established under this subpart, consistent with Sec. 
9701.373(b);
    (7) Other payments and adjustments authorized under this subpart as 
specified by DHS implementing directives;
    (8) Other payments and adjustments under other statutory or 
regulatory authority that are basic pay for the purpose of locality-
based comparability payments under 5 U.S.C. 5304; and
    (9) Any provisions for which DHS locality rate supplements must be 
treated as basic pay by law.

[[Page 913]]



Sec. 9701.333  Special rate supplements.

    DHS will, after coordination with OPM, establish special rate 
supplements that provide higher pay levels for subcategories of 
employees within an occupational cluster if DHS determines that such 
supplements are warranted by current or anticipated recruitment and/or 
retention needs. In exercising this authority, DHS will issue necessary 
implementing directives. Any special rate supplement must be treated as 
basic pay for the same purposes as locality rate supplements, as 
described in Sec. 9701.332(c), and for the purpose of computing cost-
of-living allowances and post differentials in nonforeign areas under 5 
U.S.C. 5941.



Sec. 9701.334  Setting and adjusting locality and special rate supplements.

    (a) Within its sole and exclusive discretion, DHS may, after 
coordination with OPM, set and adjust locality and special rate 
supplements. In determining the amounts of the supplements, DHS and OPM 
may consider mission requirements, labor market conditions, availability 
of funds, pay adjustments received by employees of other Federal 
agencies, and any other relevant factors.
    (b) DHS may, after coordination with OPM, determine the effective 
date of newly set or adjusted locality and special rate supplements. 
Established supplements will be reviewed for possible adjustment on an 
annual basis in conjunction with rate range adjustments under Sec. 
9701.322.



Sec. 9701.335  Eligibility for pay increase associated with a supplement 

adjustment.

    (a) When a locality or special rate supplement is adjusted under 
Sec. 9701.334, an employee to whom the supplement applies is entitled 
to the pay increase resulting from that adjustment if the employee meets 
or exceeds performance expectations (i.e., has a rating of record above 
the unacceptable performance level for the most recently completed 
appraisal period). This includes an increase resulting from the initial 
establishment and setting of a special rate supplement. The pay increase 
takes effect at the same time as the applicable supplement is set or 
adjusted, except as provided in Sec. Sec. 9701.336 and 9701.337.
    (b) If an employee does not have a rating of record for the most 
recently completed appraisal period, he or she must be treated in the 
same manner as an employee who meets or exceeds performance expectations 
and is entitled to any pay increase associated with a supplement 
adjustment, as provided in paragraph (a) of this section.
    (c) An employee who has an unacceptable rating of record is 
prohibited from receiving a pay increase as a result of an increase in 
an applicable locality or special rate supplement, except as provided by 
Sec. Sec. 9701.336 and 9701.337. Because the employee's pay remains 
unchanged, failure to receive a pay increase is not considered an 
adverse action under subpart F of this part.



Sec. 9701.336  Treatment of employees whose pay does not fall below the 

minimum adjusted rate of their band.

    An employee who does not receive a pay increase under Sec. 9701.335 
because of an unacceptable rating of record and whose rate of basic pay 
(including a locality or special rate supplement) does not fall below 
the minimum adjusted rate of his or her band as a result of that rating 
will receive such an increase if he or she demonstrates performance that 
meets or exceeds performance expectations, as reflected by a new rating 
of record issued under Sec. 9701.409(b). Such an increase will be made 
effective on the first day of the first pay period beginning on or after 
the date the new rating of record is issued.



Sec. 9701.337  Treatment of employees whose rate of pay falls below the 

minimum adjusted rate of their band.

    (a) In the case of an employee who does not receive a pay increase 
under Sec. 9701.335 because of an unacceptable rating of record and 
whose rate of basic pay (including a locality or special rate 
supplement) falls below the minimum adjusted rate of his or her band as 
a result of that rating, DHS must--
    (1) If the employee demonstrates performance that meets or exceeds 
performance expectations within 90 days

[[Page 914]]

after the date of the locality or special rate supplement adjustment, 
issue a new rating of record under Sec. 9701.409(b) and adjust the 
employee's pay prospectively by making the increase effective on the 
first day of the first pay period beginning on or after the date the new 
rating of record is issued; or
    (2) Initiate action within 90 days after the date of the locality or 
special rate supplement adjustment to demote or remove the employee in 
accordance with the adverse action procedures established in subpart F 
of this part.
    (b) If DHS fails to initiate a removal or demotion action under 
paragraph (a)(2) of this section within 90 days after the date of a 
locality or special rate supplement adjustment, the employee becomes 
entitled to the minimum adjusted rate of his or her band rate range on 
the first day of the first pay period beginning on or after the 90th day 
following the date of the locality or special rate supplement 
adjustment.

                          Performance-Based Pay



Sec. 9701.341  General.

    Sections 9701.342 through 9701.346 describe various types of 
performance-based pay adjustments that are part of the pay system 
established under this subpart. Generally, these within-band pay 
increases are directly linked to an employee's rating of record (as 
assigned under the performance management system described in subpart D 
of this part). These provisions are designed to provide DHS with the 
flexibility to allocate available funds based on performance as a means 
of fostering a high-performance culture that supports mission 
accomplishment. While performance measures primarily focus on an 
employee's contributions (as an individual or as part of a team) in 
accomplishing work assignments and achieving mission results, 
performance also may be reflected in the acquisition and demonstration 
of required competencies.



Sec. 9701.342  Performance pay increases.

    (a) Overview. (1) The DHS pay system provides employees in a Full 
Performance or higher band with increases in basic pay based on 
individual performance ratings of record as assigned under a performance 
management system established under subpart D of this part. The DHS pay 
system uses pay pool controls to allocate pay increases based on 
performance points that are directly linked to the employee's rating of 
record, as described in this section. Performance pay increases are a 
function of the amount of money in the performance pay pool, the 
relative point value placed on ratings, and the distribution of ratings 
within that performance pay pool.
    (2) The rating of record used as the basis for a performance pay 
increase is the one assigned for the most recently completed appraisal 
period (subject to the requirements of subpart D of this part), except 
that if the supervisor or other rating official determines that an 
employee's current performance is inconsistent with that rating, the 
supervisor or other rating official may prepare a more current rating of 
record, consistent with Sec. 9701.409(b). If an employee does not have 
a rating of record, DHS will use the modal rating received by other 
employees covered by the same pay pool during the most recent rating 
cycle for the purpose of determining the employee's performance pay 
increase.
    (b) Performance pay pools. (1) DHS will establish pay pools for 
performance pay increases.
    (2) Each pay pool covers a defined group of DHS employees, as 
determined by DHS.
    (3) An authorized agency official(s) may determine the distribution 
of funds among pay pools and may adjust those amounts based on overall 
levels of organizational performance or contribution to the Department's 
mission.
    (4) In allocating the monies to be budgeted for performance pay 
increases, the Secretary or designee must take into account the average 
value of within-grade and quality step increases under the General 
Schedule, as well as amounts that otherwise would have been spent on 
promotions among positions placed in the same band.
    (c) Performance point values. (1) DHS will establish point values 
that correspond to the performance rating levels established under 
subpart D of this part, so that a point value is attached

[[Page 915]]

to each rating level. For example, in a four-level rating program, the 
point value pattern could be 4-2-1-0, where 4 points are assigned to the 
highest (outstanding) rating and 0 points to an unacceptable rating. 
Performance point values will determine performance pay increases.
    (2) DHS will establish a point value pattern for each pay pool. 
Different pay pools may have different point value patterns.
    (3) DHS must assign zero performance points to an unacceptable 
rating of record.
    (d) Performance payout. (1) DHS will determine the value of a 
performance point, expressed as a percentage of an employee's rate of 
basic pay (exclusive of locality or special rate supplements under 
Sec. Sec. 9701.332 and 9701.333) or as a fixed dollar amount.
    (2) To determine an individual employee's performance payout, DHS 
will multiply the point value determined under paragraph (d)(1) of this 
section by the number of performance points assigned to the rating.
    (3) To the extent that the adjustment does not cause the employee's 
rate of basic pay to exceed the maximum rate of the employee's band rate 
range, DHS will pay the performance payout as an adjustment in the 
employee's annual rate of basic pay. Any excess amount may be granted as 
a lump-sum payment, which may not be considered basic pay for any 
purpose.
    (4) DHS may, after coordination with OPM, determine the effective 
date of adjustments in basic pay made under paragraph (d)(3) of this 
section.
    (5) For an employee receiving a retained rate under Sec. 9701.356, 
DHS will issue implementing directives to provide for granting a lump-
sum performance payout that may not exceed the amount that may be 
received by an employee in the same pay pool with the same rating of 
record whose rate of pay is at the maximum rate of the same band.
    (e) Proration of performance payouts. DHS will issue implementing 
directives regarding the proration of performance payouts for employees 
who, during the period between performance pay adjustments, are--
    (1) Hired or promoted;
    (2) In a leave-without-pay status (except as provided in paragraphs 
(f) and (g) of this section); or
    (3) In other circumstances where proration is considered 
appropriate.
    (f) Adjustments for employees returning after performing honorable 
service in the uniformed services. DHS will issue implementing 
directives regarding how it sets the rate of basic pay prospectively for 
an employee who leaves a DHS position to perform service in the 
uniformed services (as defined in 38 U.S.C. 4303 and 5 CFR 353.102) and 
returns through the exercise of a reemployment right provided by law, 
Executive order, or regulation under which accrual of service for 
seniority-related benefits is protected (e.g., 38 U.S.C. 4316). DHS will 
credit the employee with intervening rate range adjustments under Sec. 
9701.323(a), as well as developmental pay adjustments under Sec. 
9701.345 (as determined by DHS in accordance with its implementing 
directives), and performance pay adjustments under this section based on 
the employee's last DHS rating of record. For employees who have no such 
rating of record, DHS will use the modal rating received by other 
employees covered by the same pay pool during the most recent rating 
cycle. An employee returning from qualifying service in the uniformed 
services will receive the full amount of the performance pay increase 
associated with his or her rating of record.
    (g) Adjustments for employees returning to duty after being in 
workers' compensation status. DHS will issue implementing directives 
regarding how it sets the rate of basic pay prospectively for an 
employee who returns to duty after a period of receiving injury 
compensation under 5 U.S.C. chapter 81, subchapter I (in a leave-
without-pay status or as a separated employee). DHS will credit the 
employee with intervening rate range adjustments under Sec. 
9701.323(a), as well as developmental pay adjustments under Sec. 
9701.345 (as determined by DHS in accordance with its implementing 
directives), and performance pay adjustments under this section based on 
the employee's last DHS rating of record. For employees who have no such 
rating of record, DHS will use the modal rating received

[[Page 916]]

by other employees covered by the same pay pool during the most recent 
rating cycle. An employee returning to duty after receiving injury 
compensation will receive the full amount of the performance pay 
increase associated with his or her rating of record.



Sec. 9701.343  Within-band reductions.

    Subject to the adverse action procedures set forth in subpart F of 
this part, DHS may reduce an employee's rate of basic pay within a band 
for unacceptable performance or conduct. A reduction under this section 
may not be more than 10 percent or cause an employee's rate of basic pay 
to fall below the minimum rate of the employee's band rate range. Such a 
reduction may be made effective at any time.



Sec. 9701.344  Special within-band increases.

    DHS may issue implementing directives regarding special within-band 
basic pay increases for employees within a Full Performance or higher 
band established under Sec. 9701.212 who possess exceptional skills in 
critical areas or who make exceptional contributions to mission 
accomplishment or in other circumstances determined by DHS. Increases 
under this section are in addition to any performance pay increases made 
under Sec. 9701.342 and may be made effective at any time. Special 
within-band increases may not be based on length of service.



Sec. 9701.345  Developmental pay adjustments.

    DHS will issue implementing directives regarding pay adjustments 
within the Entry/Developmental band. These directives may require 
employees to meet certain standardized assessment or certification 
points as part of a formal training/developmental program. In 
administering Entry/Developmental band pay progression plans, DHS may 
link pay progression to the demonstration of required knowledge, skills, 
and abilities (KSAs)/competencies. DHS may set standard timeframes for 
progression through an Entry/Developmental band while allowing an 
employee to progress at a slower or faster rate based on his or her 
performance, demonstration of required competencies, and/or other 
factors.



Sec. 9701.346  Pay progression for new supervisors.

    DHS will issue implementing directives requiring an employee newly 
appointed to or selected for a supervisory position to meet certain 
assessment or certification points as part of a formal training/
developmental program. In administering performance pay increases for 
these employees under Sec. 9701.342, DHS may take into account the 
employee's success in completing a formal training/developmental 
program, as well as his or her performance.

                           Pay Administration



Sec. 9701.351  Setting an employee's starting pay.

    DHS will, after coordination with OPM, issue implementing directives 
regarding the starting rate of pay for an employee, including--
    (a) An individual who is newly appointed or reappointed to the 
Federal service;
    (b) An employee transferring to DHS from another Federal agency; and
    (c) A DHS employee who moves from a noncovered position to a 
position already covered by this subpart.



Sec. 9701.352  Use of highest previous rate.

    DHS will issue implementing directives regarding the discretionary 
use of an individual's highest previous rate of basic pay received as a 
Federal employee or as an employee of a Coast Guard nonappropriated fund 
instrumentality (NAFI) in setting pay upon reemployment, transfer, 
reassignment, promotion, demotion, placement in a different occupational 
cluster, or change in type of appointment. For this purpose, basic pay 
may include a locality-based payment or supplement under circumstances 
approved by DHS. If an employee in a Coast Guard NAFI position is 
converted to an appropriated fund position under the pay system 
established under this subpart, DHS must use the existing NAFI rate to 
set pay upon conversion.

[[Page 917]]



Sec. 9701.353  Setting pay upon promotion.

    (a) Except as otherwise provided in this section, upon an employee's 
promotion, DHS must provide an increase in the employee's rate of basic 
pay equal to at least 8 percent. The rate of basic pay after promotion 
may not be less than the minimum rate of the higher band.
    (b) DHS will issue implementing directives providing for an increase 
other than the amount specified in paragraph (a) of this section in the 
case of--
    (1) An employee promoted from an Entry/Developmental band to a Full 
Performance band (consistent with the pay progression plan established 
for the Entry/Developmental band);
    (2) An employee who was demoted and is then repromoted back to the 
higher band; or
    (3) Employees in other circumstances specified by DHS implementing 
directives.
    (c) An employee receiving a retained rate (i.e., a rate above the 
maximum of the band) before promotion is entitled to a rate of basic pay 
after promotion that is at least 8 percent higher than the maximum rate 
of the employee's current band (except in circumstances specified by DHS 
implementing directives). The rate of basic pay after promotion may not 
be less than the minimum rate of the employee's new band rate range or 
the employee's existing retained rate of basic pay. If the maximum rate 
of the employee's new band rate range is less than the employee's 
existing rate of basic pay, the employee will continue to be entitled to 
the existing rate as a retained rate.
    (d) DHS may determine the circumstances under which and the extent 
to which any locality or special rate supplements are treated as basic 
pay in applying the promotion increase rules in this section.



Sec. 9701.354  Setting pay upon demotion.

    DHS will issue implementing directives regarding how to set an 
employee's pay when he or she is demoted. The directives must 
distinguish between demotions under adverse action procedures (as 
defined in subpart F of this part) and other demotions (e.g., due to 
expiration of a temporary promotion or canceling of a promotion during a 
new supervisor's probationary period). A reduction in basic pay upon 
demotion under adverse action procedures may not exceed 10 percent 
unless a larger reduction is needed to place the employee at the maximum 
rate of the lower band.



Sec. 9701.355  Setting pay upon movement to a different occupational cluster.

    DHS will issue implementing directives regarding how to set an 
employee's pay when he or she moves voluntarily or involuntarily to a 
position in a different occupational cluster, including rules for 
determining whether such a movement is to a higher or lower band for the 
purpose of setting pay upon promotion or demotion under Sec. Sec. 
9701.353 and 9701.354, respectively.



Sec. 9701.356  Pay retention.

    (a) Subject to the requirements of this section, DHS will, after 
coordination with OPM, issue implementing directives regarding the 
application of pay retention. Pay retention prevents a reduction in 
basic pay that would otherwise occur by preserving the former rate of 
basic pay within the employee's new band or by establishing a retained 
rate that exceeds the maximum rate of the new band.
    (b) Pay retention must be based on the employee's rate of basic pay 
in effect immediately before the action that would otherwise reduce the 
employee's rate. A retained rate must be compared to the range of rates 
of basic pay applicable to the employee's position.
    (c) In applying Sec. 9701.323 (regarding pay increases provided at 
the time of a rate range adjustment under Sec. 9701.322), any increase 
in the rate of basic pay for an employee receiving a retained rate is 
equal to one-half of the percentage value of any increase in the minimum 
rate of the employee's band.



Sec. 9701.357  Miscellaneous.

    (a) Except in the case of an employee who does not receive a pay 
increase under Sec. Sec. 9701.323 or 9701.335 because of an 
unacceptable rating of record, an employee's rate of basic pay may not 
be less than the minimum rate of the employee's band (or the adjusted 
minimum rate of that band).

[[Page 918]]

    (b) Except as provided in Sec. 9701.356, an employee's rate of 
basic pay may not exceed the maximum rate of the employee's band rate 
range.
    (c) DHS must follow the rules for establishing pay periods and 
computing rates of pay in 5 U.S.C. 5504 and 5505, as applicable. For 
employees covered by 5 U.S.C. 5504, annual rates of pay must be 
converted to hourly rates of pay in computing payments received by 
covered employees.
    (d) DHS will issue implementing directives regarding the movement of 
employees to or from a band with a rate range that is increased by a 
special rate supplement.
    (e) For the purpose of applying the reduction-in-force provisions of 
5 CFR part 351, DHS must establish representative rates for all band 
rate ranges.
    (f) If a DHS employee moves from the pay system established under 
this subpart to a GS position within DHS having a higher level of duties 
and responsibilities, DHS may issue implementing directives that provide 
for a special increase prior to the employee's movement in recognition 
of the fact that the employee will not be eligible for a promotion 
increase under the GS system.

                            Special Payments



Sec. 9701.361  Special skills payments.

    DHS will issue implementing directives regarding additional payments 
for specializations for which the incumbent is trained and ready to 
perform at all times. DHS may determine the amount of the payments and 
the conditions for eligibility, including any performance or service 
agreement requirements. Payments may be made at the same time as basic 
pay or in periodic lump-sum payments. Special skills payments are not 
basic pay for any purpose and may be terminated or reduced at any time 
without triggering pay retention or adverse action procedures.



Sec. 9701.362  Special assignment payments.

    DHS will issue implementing directives regarding additional payments 
for employees serving on special assignments in positions placing 
significantly greater demands on the employee than other assignments 
within the employee's band. DHS may determine the amount of the payments 
and the conditions for eligibility, including any performance or service 
agreement requirements. Payments may be made at the same time as basic 
pay or in periodic lump-sum payments. Special assignment payments are 
not basic pay for any purpose and may be terminated or reduced at any 
time without triggering pay retention provisions or adverse action 
procedures.



Sec. 9701.363  Special staffing payments.

    DHS will issue implementing directives regarding additional payments 
for employees serving in positions for which DHS is experiencing or 
anticipates significant recruitment and/or retention problems. DHS may 
determine the amount of the payments and the conditions for eligibility, 
including any performance or service agreement requirements. Payments 
may be made at the same time as basic pay or in periodic lump-sum 
payments. Special staffing payments are not basic pay for any purpose 
and may be terminated or reduced at any time without triggering pay 
retention or adverse action procedures.

                         Transitional Provisions



Sec. 9701.371  General.

    (a) Sections 9701.371 through 9701.374 describe the transitional 
provisions that apply when DHS employees are converted to a pay system 
established under this subpart. An affected employee may convert from 
the GS system, a prevailing rate system, the SL/ST system, or the SES 
system, as provided in Sec. 9701.302. For the purpose of this section 
and Sec. Sec. 9701.372 through 9701.374, the terms ``convert,'' 
``converted,'' ``converting,'' and ``conversion'' refer to employees who 
become covered by the pay system without a change in position (as a 
result of a coverage determination made under Sec. 9701.102(b)) and 
exclude employees who are reassigned or transferred from a noncovered 
position to a position already covered by the DHS system.
    (b) DHS will issue implementing directives prescribing the policies 
and

[[Page 919]]

procedures necessary to implement these transitional provisions.



Sec. 9701.372  Creating initial pay ranges.

    (a) DHS must, after coordination with OPM, set the initial band rate 
ranges for the DHS pay system established under this subpart. The 
initial ranges will link to the ranges that apply to converted employees 
in their previously applicable pay system (taking into account any 
applicable special rates and locality payments or supplements).
    (b) For employees who are law enforcement officers as defined in 5 
U.S.C. 5541(3) and who were covered by the GS system immediately before 
conversion, the initial ranges must provide rates of basic pay that 
equal or exceed the rates of basic pay these officers received under the 
GS system (taking into account any applicable special rates and locality 
payments or supplements).



Sec. 9701.373  Conversion of employees to the DHS pay system.

    (a) When a pay system is established under this subpart and applied 
to a category of employees, DHS must convert employees to the system 
without a reduction in their rate of pay (including basic pay and any 
applicable locality payment under 5 U.S.C. 5304, special rate under 5 
U.S.C. 5305, locality rate supplement under Sec. 9701.332, or special 
rate supplement under Sec. 9701.333).
    (b) When an employee receiving a special rate under 5 U.S.C. 5305 
before conversion is converted to an equal rate of pay under the DHS pay 
system that consists of a basic rate and a locality or special rate 
supplement, the conversion will not be considered as resulting in a 
reduction in basic pay for the purpose of applying subpart F of this 
part.
    (c) If another personnel action (e.g., promotion, geographic 
movement) takes effect on the same day as the effective date of an 
employee's conversion to the new pay system, DHS must process the other 
action under the rules pertaining to the employee's former system before 
processing the conversion action.
    (d) An employee on a temporary promotion at the time of conversion 
must be returned to his or her official position of record prior to 
processing the conversion. If the employee is temporarily promoted 
immediately after the conversion, pay must be set under the rules for 
promotion increases under the DHS system.
    (e) The Secretary has discretion to make one-time pay adjustments 
for GS and prevailing rate employees when they are converted to the DHS 
pay system. DHS will issue implementing directives governing any such 
pay adjustment, including rules governing employee eligibility, pay 
computations, and the timing of any such pay adjustment.
    (f) The Secretary has discretion to convert entry/developmental 
employees in noncompetitive career ladder paths to the pay progression 
plan established for the Entry/Developmental band to which the employee 
is assigned under the DHS pay system. DHS will issue implementing 
directives governing any such conversion, including rules governing 
employee eligibility, pay computations, and the timing of any such 
conversion. As provided in paragraph (a) of this section, DHS must 
convert employees without a reduction in their rate of pay.



Sec. 9701.374  Special transition rules for Federal Air Marshal Service.

    Notwithstanding any other provision in this subpart, if DHS 
transfers Federal Air Marshal Service positions from the Transportation 
Security Administration (TSA) to another organization within DHS, DHS 
may cover those positions under a pay system that is parallel to the pay 
system that was applicable to the Federal Air Marshal Service within 
TSA. DHS may, after coordination with OPM, modify that system. DHS will 
issue implementing directives on converting Federal Air Marshal Service 
employees to any new pay system that may subsequently be established 
under this subpart, consistent with the conversion rules in Sec. 
9701.373.

[[Page 920]]



                    Subpart D_Performance Management



Sec. 9701.401  Purpose.

    (a) This subpart provides for the establishment in the Department of 
Homeland Security of at least one performance management system as 
authorized by 5 U.S.C. chapter 97.
    (b) The performance management system established under this 
subpart, working in conjunction with the pay system established under 
subpart C of this part, is designed to promote and sustain a high-
performance culture by incorporating the following features:
    (1) Adherence to merit principles set forth in 5 U.S.C. 2301;
    (2) A fair, credible, and transparent employee performance appraisal 
system;
    (3) A link between elements of the pay system established in subpart 
C of this part, the employee performance appraisal system, and the 
Department's strategic plan;
    (4) Employee involvement in the design and implementation of the 
system (as provided in Sec. 9701.105);
    (5) Adequate training and retraining for supervisors, managers, and 
employees in the implementation and operation of the performance 
management system;
    (6) Periodic performance feedback and dialogue among supervisors, 
managers, and employees throughout the appraisal period, with specific 
timetables for review;
    (7) Effective safeguards so that the management of the system is 
fair and equitable and based on employee performance; and
    (8) A means for ensuring that adequate resources are allocated for 
the design, implementation, and administration of the performance 
management system that supports the pay system established under subpart 
C of this part.



Sec. 9701.402  Coverage.

    (a) This subpart applies to eligible DHS employees in the categories 
listed in paragraph (b) of this section, subject to a determination by 
the Secretary or designee under Sec. 9701.102(b), except as provided in 
paragraph (c) of this section.
    (b) The following employees are eligible for coverage under this 
subpart:
    (1) Employees who would otherwise be covered by 5 U.S.C. chapter 43; 
and
    (2) Employees who were excluded from chapter 43 by OPM under 5 CFR 
430.202(d) prior to the date of coverage of this subpart, as determined 
under Sec. 9701.102(b).
    (c) This subpart does not apply to employees who are not expected to 
be employed longer than a minimum period (as defined in Sec. 9701.404) 
during a single 12-month period.



Sec. 9701.403  Waivers.

    When a specified category of employees is covered by the performance 
management system(s) established under this subpart, 5 U.S.C. chapter 43 
is waived with respect to that category of employees.



Sec. 9701.404  Definitions.

    In this subpart--
    Appraisal means the review and evaluation of an employee's 
performance.
    Appraisal period means the period of time established under a 
performance management system for reviewing employee performance.
    Competencies means the measurable or observable knowledge, skills, 
abilities, behaviors, and other characteristics required by a position.
    Contribution means a work product, service, output, or result 
provided or produced by an employee that supports the Departmental or 
organizational mission, goals, or objectives.
    Minimum period means the period of time established by DHS during 
which an employee must perform before receiving a rating of record.
    Performance means accomplishment of work assignments or 
responsibilities.
    Performance expectations means that which an employee is required to 
do, as described in Sec. 9701.406, and may include observable or 
verifiable descriptions of quality, quantity, timeliness, and cost 
effectiveness.
    Performance management means applying the integrated processes of 
setting and communicating performance expectations, monitoring 
performance

[[Page 921]]

and providing feedback, developing performance and addressing poor 
performance, and rating and rewarding performance in support of the 
organization's goals and objectives.
    Performance management system means the policies and requirements 
established under this subpart, as supplemented by DHS implementing 
directives, for setting and communicating employee performance 
expectations, monitoring performance and providing feedback, developing 
performance and addressing poor performance, and rating and rewarding 
performance.
    Rating of record means a performance appraisal prepared--
    (1) At the end of an appraisal period covering an employee's 
performance of assigned duties against performance expectations over the 
applicable period; or
    (2) To support a pay determination, including one granted in 
accordance with subpart C of this part, a within-grade increase granted 
under 5 CFR 531.404, or a pay determination granted under other 
applicable rules.
    Unacceptable performance means the failure to meet one or more 
performance expectations.



Sec. 9701.405  Performance management system requirements.

    (a) DHS will issue implementing directives that establish one or 
more performance management systems for DHS employees, subject to the 
requirements set forth in this subpart.
    (b) Each DHS performance management system must--
    (1) Specify the employees covered by the system(s);
    (2) Provide for the periodic appraisal of the performance of each 
employee, generally once a year, based on performance expectations.
    (3) Specify the minimum period during which an employee must perform 
before receiving a rating of record;
    (4) Hold supervisors and managers accountable for effectively 
managing the performance of employees under their supervision as set 
forth in paragraph (c) of this section;
    (5) Include procedures for setting and communicating performance 
expectations, monitoring performance and providing feedback, and 
developing, rating, and rewarding performance; and
    (6) Specify the criteria and procedures to address the performance 
of employees who are detailed or transferred and for employees in other 
special circumstances.
    (c) In fulfilling the requirements of paragraph (b) of this section, 
supervisors and managers are responsible for--
    (1) Clearly communicating performance expectations and holding 
employees responsible for accomplishing them;
    (2) Making meaningful distinctions among employees based on 
performance;
    (3) Fostering and rewarding excellent performance; and
    (4) Addressing poor performance.



Sec. 9701.406  Setting and communicating performance expectations.

    (a) Performance expectations must align with and support the DHS 
mission and its strategic goals, organizational program and policy 
objectives, annual performance plans, and other measures of performance. 
Such expectations include those general performance expectations that 
apply to all employees, such as standard operating procedures, 
handbooks, or other operating instructions and requirements associated 
with the employee's job, unit, or function.
    (b) Supervisors and managers must communicate performance 
expectations, including those that may affect an employee's retention in 
the job. Performance expectations need not be in writing, but must be 
communicated to the employee prior to holding the employee accountable 
for them. However, notwithstanding this requirement, employees are 
always accountable for demonstrating appropriate standards of conduct, 
behavior, and professionalism, such as civility and respect for others.
    (c) Performance expectations may take the form of--
    (1) Goals or objectives that set general or specific performance 
targets at the individual, team, and/or organizational level;
    (2) Organizational, occupational, or other work requirements, such 
as

[[Page 922]]

standard operating procedures, operating instructions, administrative 
manuals, internal rules and directives, and/or other instructions that 
are generally applicable and available to the employee;
    (3) A particular work assignment, including expectations regarding 
the quality, quantity, accuracy, timeliness, and/or other expected 
characteristics of the completed assignment;
    (4) Competencies an employee is expected to demonstrate on the job, 
and/or the contributions an employee is expected to make; or
    (5) Any other means, as long as it is reasonable to assume that the 
employee will understand the performance that is expected.
    (d) Supervisors must involve employees, insofar as practicable, in 
the development of their performance expectations. However, final 
decisions regarding performance expectations are within the sole and 
exclusive discretion of management.



Sec. 9701.407  Monitoring performance and providing feedback.

    In applying the requirements of the performance management system 
and its implementing directives and policies, supervisors must--
    (a) Monitor the performance of their employees and the organization; 
and
    (b) Provide timely periodic feedback to employees on their actual 
performance with respect to their performance expectations, including 
one or more interim performance reviews during each appraisal period.



Sec. 9701.408  Developing performance and addressing poor performance.

    (a) Subject to budgetary and other organizational constraints, a 
supervisor must--
    (1) Provide employees with the proper tools and technology to do the 
job; and
    (2) Develop employees to enhance their ability to perform.
    (b) If during the appraisal period a supervisor determines that an 
employee's performance is unacceptable, the supervisor must--
    (1) Consider the range of options available to address the 
performance deficiency, which include but are not limited to remedial 
training, an improvement period, a reassignment, an oral warning, a 
letter of counseling, a written reprimand, and/or an adverse action (as 
defined in subpart F of this part); and
    (2) Take appropriate action to address the deficiency, taking into 
account the circumstances, including the nature and gravity of the 
unacceptable performance and its consequences.
    (c) As specified in subpart G of this part, employees may appeal 
adverse actions based on unacceptable performance.



Sec. 9701.409  Rating and rewarding performance.

    (a)(1) Except as provided in paragraphs (a)(2) and (3) of this 
section, each DHS performance management system must establish a single 
summary rating level of unacceptable performance, a summary rating level 
of fully successful performance (or equivalent), and at least one 
summary rating level above fully successful performance.
    (2) For employees in an Entry/Developmental band, the DHS 
performance management system(s) may establish two summary rating 
levels, i.e., an unacceptable rating level and a rating level of fully 
successful (or equivalent).
    (3) At his or her sole and exclusive discretion, the Secretary or 
designee may under extraordinary circumstances establish a performance 
management system with two summary rating levels, i.e., an unacceptable 
level and a higher rating level, for employees not in an Entry/
Developmental band.
    (b) A supervisor or other rating official must prepare and issue a 
rating of record after the completion of the appraisal period. An 
additional rating of record may be issued to reflect a substantial 
change in the employee's performance when appropriate. A rating of 
record will be used as a basis for determining--
    (1) An increase in basic pay under Sec. 9701.324;
    (2) A locality or special rate supplement increase under Sec. 
9701.336;
    (3) A performance pay increase determination under Sec. 
9701.342(a);

[[Page 923]]

    (4) A within-grade increase determination under 5 CFR 531.404, prior 
to conversion to the pay system established under subpart C of this 
part;
    (5) A pay determination under any other applicable pay rules;
    (6) Awards under any legal authority, including 5 U.S.C. chapter 45, 
5 CFR part 451, and a Departmental or organizational awards program;
    (7) Eligibility for promotion; or
    (8) Such other action that DHS considers appropriate, as specified 
in the implementing directives.
    (c) A rating of record must assess an employee's performance with 
respect to his or her performance expectations and/or relative 
contributions and is considered final when issued to the employee with 
all appropriate reviews and signatures.
    (d) DHS may not impose a forced distribution or quota on any rating 
level or levels.
    (e) A rating of record issued under this subpart is an official 
rating of record for the purpose of any provision of title 5, Code of 
Federal Regulations, for which an official rating of record is required.
    (f) DHS may not lower the rating of record of an employee on an 
approved absence from work, including the absence of a disabled veteran 
to seek medical treatment, as provided in Executive Order 5396.
    (g) A rating of record may be grieved by a non-bargaining unit 
employee (or a bargaining unit employee when no negotiated procedure 
exists) through an administrative grievance procedure established by 
DHS. A bargaining unit employee may grieve a rating of record through a 
negotiated grievance procedure, as provided in subpart E of this part. 
An arbitrator hearing a grievance is subject to the standards of review 
set forth in Sec. 9701.521(g)(2). Except as otherwise provided by law, 
an arbitrator may not conduct an independent evaluation of the 
employee's performance or otherwise substitute his or her judgment for 
that of the supervisor.
    (h) A supervisor or other rating official may prepare an additional 
performance appraisal for the purposes specified in the applicable 
performance management system (e.g., transfers and details) at any time 
after the completion of the minimum period. Such an appraisal is not a 
rating of record.
    (i) DHS implementing directives will establish policies and 
procedures for crediting performance in a reduction in force, including 
policies for assigning additional retention credit based on performance. 
Such policies must comply with 5 U.S.C. chapter 35 and 5 CFR 351.504.



Sec. 9701.410  DHS responsibilities.

    In carrying out its performance management system(s), DHS must--
    (a) Transfer ratings between subordinate organizations and to other 
Federal departments or agencies;
    (b) Evaluate its performance management system(s) for effectiveness 
and compliance with this subpart, DHS implementing directives and 
policies, and the provisions of 5 U.S.C. chapter 23 that set forth the 
merit system principles and prohibited personnel practices;
    (c) Provide OPM with a copy of the implementing directives, 
policies, and procedures that implement this subpart; and
    (d) Comply with 29 CFR 1614.102(a)(5), which requires agencies to 
review, evaluate, and control managerial and supervisory performance to 
ensure enforcement of the policy of equal opportunity.



                  Subpart E_Labor-Management Relations



Sec. 9701.501  Purpose.

    This subpart contains the regulations implementing the provisions of 
5 U.S.C. 9701(b) relating to the Department's labor-management relations 
system. The Department was created in recognition of the paramount 
interest in safeguarding the American people, without compromising 
statutorily protected employee rights. For this reason Congress stressed 
that personnel systems established by the Department and OPM must be 
flexible and contemporary, enabling the Department to rapidly respond to 
threats to our Nation. The labor-management relations regulations in 
this subpart are designed to meet these compelling concerns and must be 
interpreted with the Department's mission foremost in

[[Page 924]]

mind. The regulations also recognize the rights of DHS employees to 
organize and bargain collectively, subject to any exclusion from 
coverage or limitation on negotiability established by law, including 
these regulations, applicable Executive orders, and any other legal 
authority.



Sec. 9701.502  Rule of construction.

    In interpreting this subpart, the rule of construction in Sec. 
9701.106(a)(2) must be applied.



Sec. 9701.503  Waivers.

    When a specified category of employees is covered by the labor-
management relations system established under this subpart, the 
provisions of 5 U.S.C. 7101 through 7135 are waived with respect to that 
category of employees, except as otherwise specified in this part 
(including Sec. 9701.106).



Sec. 9701.504  Definitions.

    In this subpart:
    Authority means the Federal Labor Relations Authority described in 5 
U.S.C. 7104(a).
    Collective bargaining means the performance of the mutual obligation 
of a management representative of the Department and an exclusive 
representative of employees in an appropriate unit in the Department to 
meet at reasonable times and to consult and bargain in a good faith 
effort to reach agreement with respect to the conditions of employment 
affecting such employees and to execute, if requested by either party, a 
written document incorporating any collective bargaining agreement 
reached, but the obligation referred to in this paragraph does not 
compel either party to agree to a proposal or to make a concession.
    Collective bargaining agreement means an agreement entered into as a 
result of collective bargaining pursuant to the provisions of this 
subpart.
    Component means any organizational subdivision of the Department.
    Conditions of employment means personnel policies, practices, and 
matters affecting working conditions-whether established by rule, 
regulation, or otherwise--except that such term does not include 
policies, practices, and matters relating to--
    (1) Political activities prohibited under 5 U.S.C. chapter 73, 
subchapter III;
    (2) The classification of any position, including any classification 
determinations under subpart B of this part;
    (3) The pay of any position, including any determinations regarding 
pay or adjustments thereto under subpart C of this part; or
    (4) Any matters specifically provided for by Federal statute.
    Confidential employee means an employee who acts in a confidential 
capacity with respect to an individual who formulates or effectuates 
management policies in the field of labor-management relations.
    Day means a calendar day.
    Dues means dues, fees, and assessments.
    Exclusive representative means any labor organization which is 
recognized as the exclusive representative of employees in an 
appropriate unit consistent with the Department's organizational 
structure, pursuant to 5 U.S.C. 7111 or as otherwise provided by Sec. 
9701.514.
    Grievance means any complaint--
    (1) By any employee concerning any matter relating to the conditions 
of employment of the employee;
    (2) By any labor organization concerning any matter relating to the 
conditions of employment of any employee; or
    (3) By any employee, labor organization, or the Department 
concerning--
    (i) The effect or interpretation, or a claim of breach, of a 
collective bargaining agreement; or
    (ii) Any claimed violation, misinterpretation, or misapplication of 
any law, rule, or regulation issued for the purpose of affecting 
conditions of employment.
    HSLRB means the Homeland Security Labor Relations Board.
    Labor organization means an organization composed in whole or in 
part of Federal employees, in which employees participate and pay dues, 
and which has as a purpose the dealing with the Department concerning 
grievances and conditions of employment, but does not include--
    (1) An organization which, by its constitution, bylaws, tacit 
agreement

[[Page 925]]

among its members, or otherwise, denies membership because of race, 
color, creed, national origin, sex, age, preferential or nonpreferential 
civil service status, political affiliation, marital status, or 
handicapping condition;
    (2) An organization which advocates the overthrow of the 
constitutional form of government of the United States;
    (3) An organization sponsored by the Department; or
    (4) An organization which participates in the conduct of a strike 
against the Government or any agency thereof or imposes a duty or 
obligation to conduct, assist, or participate in such a strike.
    Management official means an individual employed by the Department 
in a position the duties and responsibilities of which require or 
authorize the individual to formulate, determine, or influence the 
policies of the Department or who has the authority to recommend such 
action, if the exercise of the authority is not merely routine or 
clerical in nature, but requires the consistent exercise of independent 
judgment.
    Professional employee has the meaning given that term in 5 U.S.C. 
7103(a)(15).
    Supervisor means an individual employed by the Department having 
authority in the interest of the Department to hire, direct, assign, 
promote, reward, transfer, furlough, layoff, recall, suspend, 
discipline, or remove employees, to adjust their grievances, or to 
effectively recommend such action, if the exercise of the authority is 
not merely routine or clerical in nature but requires the consistent 
exercise of independent judgment.



Sec. 9701.505  Coverage.

    (a) Employees covered. This subpart applies to eligible DHS 
employees, subject to a determination by the Secretary or designee under 
Sec. 9701.102(b), except as provided in paragraph (b) of this section. 
DHS employees who would otherwise be covered by 5 U.S.C. chapter 71 are 
eligible for coverage under this subpart. In addition, this subpart 
applies to an employee whose employment has ceased because of an unfair 
labor practice under Sec. 9701.517 of this subpart and who has not 
obtained any other regular and substantially equivalent employment.
    (b) Employees excluded. This subpart does not apply to--
    (1) An alien or noncitizen of the United States who occupies a 
position outside the United States;
    (2) A member of the uniformed services as defined in 5 U.S.C. 
2101(3);
    (3) A supervisor or a management official;
    (4) Any person who participates in a strike in violation of 5 U.S.C. 
7311;
    (5) Employees of the United States Secret Service, including the 
United States Secret Service Uniformed Division;
    (6) Employees of the Transportation Security Administration; or
    (7) Any employee excluded pursuant to Sec. 9701.514 or any other 
legal authority.



Sec. 9701.506  Impact on existing agreements.

    (a) Any provision of a collective bargaining agreement that is 
inconsistent with this part and/or its implementing directives is 
unenforceable on the effective date of coverage under the applicable 
subpart or directive. In accordance with procedures and time limits 
established by the HSLRB under Sec. 9701.509, an exclusive 
representative may appeal to the HSLRB the Department's determination 
that a provision is unenforceable. Provisions that are identified by the 
Department as unenforceable remain unenforceable unless held otherwise 
by the HSLRB on appeal. The Secretary or designee, in his or her sole 
and exclusive discretion, may continue all or part of a particular 
provision(s) with respect to a specific category or categories of 
employees and may cancel such continued provisions at any time; such 
determinations are not precedential.
    (b) Upon request by an exclusive representative, the parties will 
have 60 days after the effective date of coverage under the applicable 
subpart and/or implementing directive to bring into conformance those 
remaining negotiable terms directly affected by the terms rendered 
unenforceable by the applicable subpart and/or implementing directive. 
If the parties fail to reach agreement by that date, they

[[Page 926]]

may utilize the negotiation impasse provisions of Sec. 9701.519 to 
resolve the matter. Agreements reached under this section are subject to 
approval under Sec. 9701.515(d). Nothing in this paragraph will delay 
the effective date of an implementing directive.



Sec. 9701.507  Employee rights.

    Each employee has the right to form, join, or assist any labor 
organization, or to refrain from any such activity, freely and without 
fear of penalty or reprisal, and each employee must be protected in the 
exercise of such right. Except as otherwise provided under this subpart, 
such right includes the right--
    (a) To act for a labor organization in the capacity of a 
representative and the right, in that capacity, to present the views of 
the labor organization to heads of agencies and other officials of the 
executive branch of the Government, the Congress, or other appropriate 
authorities; and
    (b) To engage in collective bargaining with respect to conditions of 
employment through representatives chosen by employees under this 
subpart.



Sec. 9701.508  Homeland Security Labor Relations Board.

    (a) Composition. (1) The Homeland Security Labor Relations Board is 
composed of at least three members who will be appointed by the 
Secretary for terms of 3 years, except that the appointments of the 
initial HSLRB members will be for terms of 2, 3, and 4 years, 
respectively. The Secretary may extend the term of any member beyond 3 
years when necessary to provide for an orderly transition and/or appoint 
the member for an additional term. The Secretary, in his or her sole and 
exclusive discretion, may appoint additional members to the HSLRB; in so 
doing, he or she will make such appointments to ensure that the HSLRB 
consists of an odd number of members.
    (2) Members of the HSLRB must be independent, distinguished citizens 
of the United States who are well known for their integrity and 
impartiality. Members must have expertise in labor relations, law 
enforcement, or national/homeland or other related security matters. At 
least one member of the Board must have experience in labor relations. 
Members must be able to acquire and maintain an appropriate security 
clearance. Members may be removed by the Secretary on the same grounds 
as an FLRA member.
    (3) An individual chosen to fill a vacancy on the HSLRB will be 
appointed for the unexpired term of the member who is replaced.
    (b) Appointment of the Chair. The Secretary, at his or her sole and 
exclusive discretion, will appoint one member to serve as Chair of the 
HSLRB.
    (c) Appointment procedures for non-Chair HSLRB members. (1) The 
appointments of the two non-Chair HSLRB members will be made by the 
Secretary after he or she considers any lists of nominees submitted by 
labor organizations that represent employees in the Department of 
Homeland Security.
    (2) The submission of lists of recommended nominees by labor 
organizations must be in accordance with timelines and requirements set 
forth by the Secretary, who may provide for additional consultation in 
order to obtain further information about a recommended nominee. The 
ability of the Secretary to appoint HSLRB members may not be delayed or 
otherwise affected by the failure of any labor organization to provide a 
list of nominees that meets the timeframe and requirements established 
by the Secretary.
    (d) Appointment of additional non-Chair HSLRB members. If the 
Secretary determines that additional members are needed, he or she may, 
subject to the criteria set forth in paragraph (a)(2) of this section, 
appoint the additional members according to the procedures established 
by paragraph (c) of this section.
    (e) Filling a HSLRB vacancy. A HSLRB vacancy will be filled 
according to the procedure in effect at the time of the appointment.
    (f) Procedures of the HSLRB. (1) The HSLRB will establish procedures 
for the fair, impartial, and expeditious assignment and disposition of 
cases. To the extent practicable, the HSLRB will use a single, 
integrated process to address all matters associated with a negotiations 
dispute, including unfair labor practices, negotiability disputes,

[[Page 927]]

and bargaining impasses. The HSLRB may, pursuant to its regulations, use 
a combination of mediation, factfinding, and any other appropriate 
dispute resolution method to resolve all such disputes at the earliest 
practicable time and with a minimum of process. Such proceedings will be 
conducted by the HSLRB, a HSLRB member, or employee of the HSLRB. 
Individual HSLRB members may decide a particular dispute. However, at 
the motion of a party upon its initial request for HSLRB assistance or 
upon the HSLRB's own motion at any time, the full HSLRB (or, where the 
Secretary appoints more than three members, a three-person panel of the 
HSLRB) may decide a particular dispute involving a matter of first 
impression or a major policy.
    (2) In cases where the full HSLRB acts, a vote of the majority of 
the HSLRB (or a three-person panel of the HSLRB) will be dispositive. A 
vacancy on the HSLRB does not impair the right of the remaining members 
to exercise all of the powers of the HSLRB. The vote of the Chair will 
be dispositive in the event of a tie.
    (g) Finality of HSLRB decisions. Decisions of the HSLRB are final 
and binding. However, in cases involving unfair labor practices and/or 
negotiability disputes decided by a single member, a party may seek 
review of that decision with the full HSLRB, according to rules 
prescribed by the HSLRB. In such cases the initial decision is stayed 
pending the final decision by the full HSLRB.
    (h) Review of a HSLRB decision. (1) In order to obtain judicial 
review of a HSLRB decision, a party must request a review of the record 
of a HSLRB decision by the Authority by filing such a request in writing 
within 15 days after the issuance of the decision. Within 15 days after 
the Authority's receipt of the request for a review of the record, any 
response must be filed. A party may each submit, and the Authority may 
grant for good cause shown, a request for a single extension of time not 
to exceed a maximum of 15 additional days. The Authority will establish, 
in conjunction with the HSLRB, standards for the sufficiency of the 
record and other procedures, including notice to the parties. The 
Authority must defer to findings of fact and interpretations of this 
part made by the HSLRB and sustain the HSLRB's decision unless the 
requesting party shows that the HSLRB's decision was--
    (i) Arbitrary, capricious, an abuse of discretion, or otherwise not 
in accordance with law;
    (ii) Based on error in applying the HSLRB's procedures that resulted 
in substantial prejudice to a party affecting the outcome; or
    (iii) Unsupported by substantial evidence.
    (2) The Authority must complete its review of the record and issue a 
final decision within 30 days after receiving the party's timely 
response to such request for review. This 30-day time limit is 
mandatory, except that the Authority may extend its time for review by a 
maximum of 15 additional days if it determines that--
    (i) The case is unusually complex; or
    (ii) An extension is necessary to prevent any prejudice to the 
parties that would otherwise result.
    (3) No extension beyond that provided by paragraph (h)(2) of this 
section is permitted.
    (4) If the Authority does not issue a final decision within the 
mandatory time limit established by paragraph (h) of this section, the 
Authority will be considered to have denied the request for review of 
the HSLRB's decision, which will constitute a final decision of the 
Authority and is subject to judicial review in accordance with 5 U.S.C. 
7123.



Sec. 9701.509  Powers and duties of the HSLRB.

    (a) The HSLRB may, to the extent provided in this subpart and in 
accordance with regulations prescribed by the HSLRB--
    (1) Resolve issues relating to the scope of bargaining and the duty 
to bargain in good faith under Sec. 9701.518 and conduct hearings and 
resolve complaints of unfair labor practices concerning--
    (i) The duty to bargain in good faith; and
    (ii) Strikes, work stoppages, slowdowns, and picketing, or condoning

[[Page 928]]

such activity by failing to take action to prevent or stop such 
activity;
    (2) Resolve disputes concerning requests for information under Sec. 
9701.515(b)(5) and (c);
    (3) Resolve exceptions to arbitration awards involving the exercise 
of management rights, as defined in Sec. 9701.511, and the duty to 
bargain, as defined in Sec. 9701.518. The HSLRB must conduct any review 
of an arbitral award in accordance with the same standards set forth in 
5 U.S.C. 7122(a), which is not waived for the purpose of this subpart 
but which is modified to apply to this section and to read ``HSLRB'' 
wherever the term ``Authority'' appears;
    (4) Resolve negotiation impasses in accordance with Sec. 9701.519;
    (5) Conduct de novo review of legal conclusions involving all 
matters within the HSLRB's jurisdiction;
    (6) Have discretion to evaluate the evidence presented in the record 
and reach its own independent conclusions with respect to the matters at 
issue; and
    (7) Assume jurisdiction over any matter concerning Department 
employees that has been submitted to FLRA pursuant to Sec. 9701.510, if 
the HSLRB determines that the matter affects homeland security.
    (b) The HSLRB may issue binding Department-wide opinions, which may 
be appealed as if they were decisions of the HSLRB in accordance with 
Sec. 9701.508(h).
    (c) In issuing opinions under paragraph (b) of this section, the 
HSLRB may elect to consult with the Authority.
    (d)(1) In any matter filed with the HSLRB, if the responding party 
believes that the HSLRB lacks jurisdiction, that party must timely raise 
the issue with the HSLRB and simultaneously file a copy of its response 
with the Authority in accordance with regulations established by the 
HSLRB. The HSLRB's determination with regard to its jurisdiction in a 
particular matter is final and not subject to review by the Authority.
    (2) If a matter involves one or more issues that are appropriately 
before the HSLRB and one or more issues that are appropriately before 
the Authority, the matter must be filed with the HSLRB in accordance 
with its procedures. The HSLRB will have primary jurisdiction over the 
matter. The HSLRB will decide those issues within its jurisdiction and 
will promptly transfer the matter to the Authority for resolution of any 
remaining issues.



Sec. 9701.510  Powers and duties of the Federal Labor Relations Authority.

    (a) The Federal Labor Relations Authority may, to the extent 
provided in this subpart and in accordance with regulations prescribed 
by the Authority, make the following determinations with respect to the 
Department:
    (1) Determine the appropriateness of units pursuant to the 
provisions of Sec. 9701.514;
    (2) Supervise or conduct elections to determine whether a labor 
organization has been selected as an exclusive representative by a 
majority of the employees in an appropriate unit and otherwise 
administer the provisions of 5 U.S.C. 7111 relating to the according of 
exclusive recognition to labor organizations, which are not waived for 
the purpose of this subpart but which are modified to apply to this 
section;
    (3) Conduct hearings and resolve complaints of unfair labor 
practices under Sec. 9701.517(a)(1) through (4) and (b)(1) through (4), 
and in accordance with the provisions of 5 U.S.C. 7118, which is not 
waived for this purpose but which is modified to apply to this section;
    (4) Resolve exceptions to arbitrators' awards otherwise in its 
jurisdiction and not involving the exercise of management rights under 
Sec. 9701.511, the duty to bargain, as defined in Sec. 9701.518, and 
matters under Sec. 9701.521(f); and
    (5) Review HSLRB decisions and issue final decisions pursuant to 
Sec. 9701.508(h).
    (b) In any matter filed with the Authority, if the responding party 
believes that the Authority lacks jurisdiction, that party must timely 
raise the issue with the Authority and simultaneously file a copy of its 
response with the HSLRB in accordance with regulations established by 
the Authority. The Authority must promptly transfer the case to the 
HSLRB, which will determine whether the matter is within the HSLRB's 
jurisdiction. If the

[[Page 929]]

HSLRB determines that the matter is not within its jurisdiction, the 
HSLRB will return the matter to the Authority for appropriate action. 
The HSLRB's determination with regard to its jurisdiction in a 
particular matter is final and not subject to review by the Authority.
    (c) Judicial review of any Authority decision is as prescribed in 5 
U.S.C. 7123, which is not waived.



Sec. 9701.511  Management rights.

    (a) Subject to paragraphs (b), (c), and (d) of this section, nothing 
in this subpart may affect the authority of any management official or 
supervisor of the Department--
    (1) To determine the mission, budget, organization, number of 
employees, and internal security practices of the Department;
    (2) To hire, assign, and direct employees in the Department; to 
assign work, make determinations with respect to contracting out, and to 
determine the personnel by which Departmental operations may be 
conducted; to determine the numbers, types, grades, or occupational 
clusters and bands of employees or positions assigned to any 
organizational subdivision, work project or tour of duty, and the 
technology, methods, and means of performing work; to assign and deploy 
employees to meet any operational demand; and to take whatever other 
actions may be necessary to carry out the Department's mission; and
    (3) To lay off and retain employees, or to suspend, remove, reduce 
in grade, band, or pay, or take other disciplinary action against such 
employees or, with respect to filling positions, to make selections for 
appointments from properly ranked and certified candidates for promotion 
or from any other appropriate source.
    (b) Management is prohibited from bargaining over the exercise of 
any authority under paragraph (a) of this section or the procedures that 
it will observe in exercising the authorities set forth in paragraphs 
(a)(1) and (2) of this section.
    (c) Notwithstanding paragraph (b) of this section, management will 
confer with an exclusive representative over the procedures it will 
observe in exercising the authorities set forth in paragraphs (a)(1) and 
(2) of this section, in accordance with the process set forth in Sec. 
9701.512.
    (d) If an obligation exists under Sec. 9701.518 to bargain, confer, 
or consult regarding the exercise of any authority under paragraph (a) 
of this section, management must provide notice to the exclusive 
representative concurrently with the exercise of that authority and an 
opportunity to present its views and recommendations regarding the 
exercise of such authority under paragraph (a) of this section. However, 
nothing in this section prevents management from exercising its 
discretion to provide notice as far in advance of the exercise of that 
authority as appropriate. Further, nothing in paragraph (d) of this 
section establishes an independent right to bargain, confer, or consult.
    (e) To the extent otherwise required by Sec. 9701.518 and at the 
request of an exclusive representative, the parties will bargain at the 
level of recognition (unless otherwise delegated below that level, at 
their sole and exclusive discretion) over--
    (1) Appropriate arrangements for employees adversely affected by the 
exercise of any authority under paragraph (a)(3) of this section and 
procedures which management officials and supervisors will observe in 
exercising any authority under paragraph (a)(3) of this section; and
    (2)(i) Appropriate arrangements for employees adversely affected by 
the exercise of any authority under paragraph (a)(1) or (2) of this 
section, provided that the effects of such exercise have a significant 
and substantial impact on the bargaining unit, or on those employees in 
that part of the bargaining unit affected by the action or event, and 
are expected to exceed or have exceeded 60 days. Appropriate 
arrangements within the duty to bargain include proposals on matters 
such as--
    (A) Personal hardships and safety measures; and
    (B) Reimbursement of out-of-pocket expenses incurred by employees as 
the direct result of the exercise of authorities under this section, to 
the extent such reimbursement is in accordance

[[Page 930]]

with applicable law and governing regulations.
    (ii) Appropriate arrangements within the duty to bargain do not 
include proposals on matters such as--
    (A) The routine assignment to specific duties, shifts, or work on a 
regular or overtime basis; and
    (B) Compensation for expenses not actually incurred, or pay or 
credit for work not actually performed.
    (f) Nothing in this section will delay or prevent the Department 
from exercising its authority. Any agreements reached with respect to 
paragraph (e)(2) of this section will not be precedential or binding on 
subsequent acts, or retroactively applied, except at the Department's 
sole, exclusive, and unreviewable discretion.



Sec. 9701.512  Conferring on procedures for the exercise of management rights.

    (a) As provided by Sec. 9701.511(c), management, at the level of 
recognition, will confer with an appropriate exclusive representative to 
consider its views and recommendations with regard to procedures that 
management will observe in exercising its rights under Sec. 
9701.511(a)(1) and (2). This process is not subject to the requirements 
established by Sec. Sec. 9701.517(a)(5) (regarding enforcement of the 
duty to consult or negotiate), 9701.518 (regarding the duty to bargain 
and consult), and 9701.519 (regarding impasse procedures). Nothing in 
this section requires that the parties reach agreement on any covered 
matter. The parties may, upon mutual agreement, provide for the Federal 
Mediation and Conciliation Service or another third party to assist in 
this process. Neither the HSLRB nor the Authority may intervene in this 
process.
    (b) The parties will meet at reasonable times and places but for no 
longer than 30 days, including any voluntary third party assistance, 
unless the parties mutually agree to extend this period.
    (c) Nothing in the process established under this section will delay 
the exercise of a management right under Sec. 9701.511(a)(1) and (2).
    (d) Management retains the sole, exclusive, and unreviewable 
discretion to determine the procedures that it will observe in 
exercising the authorities set forth in Sec. 9701.511(a)(1) and (2) and 
to deviate from such procedures, as necessary.



Sec. 9701.513  Exclusive recognition of labor organizations.

    The Department must accord exclusive recognition to a labor 
organization if the organization has been selected as the 
representative, in a secret ballot election, by a majority of the 
employees in an appropriate unit as determined by the Authority, who 
cast valid ballots in the election.



Sec. 9701.514  Determination of appropriate units for labor organization representation.

    (a) The Authority will determine the appropriateness of any unit. 
The Authority must determine in each case whether, in order to ensure 
employees the fullest freedom in exercising the rights guaranteed under 
this subpart, the appropriate unit should be established on a 
Department, plant, installation, functional, or other basis and will 
determine any unit to be an appropriate unit only if the determination 
will ensure a clear and identifiable community of interest among the 
employees in the unit and will promote effective dealings with, and 
efficiency of the operations of the Department, consistent with the 
Department's mission and organizational structure.
    (b) A unit may not be determined to be appropriate under this 
section solely on the basis of the extent to which employees in the 
proposed unit have organized, nor may a unit be determined to be 
appropriate if it includes--
    (1) Except as provided under 5 U.S.C. 7135(a)(2), which is not 
waived for the purpose of this subpart, any management official or 
supervisor;
    (2) A confidential employee;
    (3) An employee engaged in personnel work in other than a purely 
clerical capacity;
    (4) An employee engaged in administering the provisions of this 
subpart;
    (5) Both professional employees and other employees, unless a 
majority of the professional employees vote for inclusion in the unit;

[[Page 931]]

    (6) Any employee engaged in intelligence, counterintelligence, 
investigative, or security work which directly affects national 
security; or
    (7) Any employee primarily engaged in investigation or audit 
functions relating to the work of individuals employed by the Department 
whose duties directly affect the internal security of the Department, 
but only if the functions are undertaken to ensure that the duties are 
discharged honestly and with integrity.
    (c) Pursuant to 6 U.S.C. 412(b)(2), a unit to which continued 
recognition was provided upon transfer to DHS may not include an 
employee whose primary duty has materially changed to consist of 
intelligence, counterintelligence, or investigative work directly 
related to terrorism investigation.
    (d) Any employee who is engaged in administering any provision of 
law or this subpart relating to labor-management relations may not be 
represented by a labor organization--
    (1) Which represents other individuals to whom such provision 
applies; or
    (2) Which is affiliated directly or indirectly with an organization 
which represents other individuals to whom such provision applies.
    (e) Two or more units in the Department for which a labor 
organization is the exclusive representative may, upon petition by the 
Department or labor organization, be consolidated with or without an 
election into a single larger unit if the Authority considers the larger 
unit to be appropriate. The Authority will certify the labor 
organization as the exclusive representative of the new larger unit.



Sec. 9701.515  Representation rights and duties.

    (a)(1) A labor organization which has been accorded exclusive 
recognition is the exclusive representative of the employees in the unit 
it represents and is entitled to act for, and negotiate collective 
bargaining agreements covering, all employees in the unit. An exclusive 
representative is responsible for representing the interests of all 
employees in the unit it represents without discrimination and without 
regard to labor organization membership.
    (2) An exclusive representative of an appropriate unit must be given 
the opportunity to be represented at--
    (i) Any formal discussion between Department representative(s) and 
bargaining unit employees, the purpose of which is to discuss and/or 
announce new or substantially changed personnel policies, practices, or 
working conditions. This right does not apply to meetings between 
Department representative(s) and bargaining unit employees for the 
purpose of discussing operational matters where any discussion of 
personnel policies, practices or working conditions--
    (A) Constitutes a reiteration or application of existing personnel 
policies, practices, or working conditions;
    (B) Is incidental or otherwise peripheral to the announced purpose 
of the meeting; or
    (C) Does not result in an announcement of a change to, or a promise 
to change, an existing personnel policy(s), practice(s), or working 
condition(s);
    (ii) Any discussion between one or more Department representatives 
and one or more bargaining unit employees concerning any grievance;
    (iii) Any examination of a bargaining unit employee by a 
representative of the Department in connection with an investigation if 
the employee reasonably believes that the examination may result in 
disciplinary action against the employee and the employee requests such 
representation; or
    (iv) Any discussion between a representative of the Department and a 
bargaining unit employee in connection with a formal complaint of 
discrimination only if the employee, at his or her sole discretion, 
requests such representation.
    (3) Notwithstanding any other provision of this paragraph, if the 
Supreme Court determines that the definition of ``grievance'' in 5 
U.S.C. 7103(a)(9) includes a formal complaint of discrimination filed by 
a bargaining unit employee, the definition of grievance in Sec. 
9701.504, and its application to this section, will be interpreted and 
applied consistent with that decision.
    (4) The Department must annually inform its employees of their 
rights under paragraph (a)(2)(iii) of this section.

[[Page 932]]

    (5) Except in the case of grievance procedures negotiated under this 
subpart, the rights of an exclusive representative under this section 
may not be construed to preclude an employee from--
    (i) Being represented by an attorney or other representative of the 
employee's own choosing, other than the exclusive representative, in any 
other grievance or appeal action; or
    (ii) Exercising other grievance or appellate rights established by 
law, rule, or regulation.
    (b) The duty of the Department or appropriate component(s) of the 
Department and an exclusive representative to negotiate in good faith 
under paragraph (a) of this section includes the obligation--
    (1) To approach the negotiations with a sincere resolve to reach a 
collective bargaining agreement;
    (2) To be represented at the negotiations by duly authorized 
representatives prepared to discuss and negotiate on conditions of 
employment;
    (3) To meet at reasonable times and convenient places as frequently 
as may be necessary, and to avoid unnecessary delays;
    (4) If agreement is reached, to execute on the request of any party 
to the negotiation, a written document embodying the agreed terms, and 
to take such steps as are necessary to implement such agreement; and
    (5) In the case of the Department or appropriate component(s) of the 
Department, to furnish information to an exclusive representative, or 
its authorized representative, when--
    (i) Such information exists, is normally maintained, and is 
reasonably available;
    (ii) The exclusive representative has requested such information and 
demonstrated a particularized need for the information in order to 
perform its representational functions in grievance proceedings or in 
negotiations; and
    (iii) Disclosure is not prohibited by law.
    (c) Disclosure of information in paragraph (b)(5) of this section 
does not include the following:
    (1) Disclosure prohibited by law or regulations, including, but not 
limited to, the regulations in this part, Governmentwide rules and 
regulations, Departmental implementing directives and other policies and 
regulations, and Executive orders;
    (2) Disclosure of information if adequate alternative means exist 
for obtaining the requested information, or if proper discussion, 
understanding, or negotiation of a particular subject within the scope 
of collective bargaining is possible without recourse to the 
information;
    (3) Internal Departmental guidance, counsel, advice, or training for 
managers and supervisors relating to collective bargaining;
    (4) Any disclosure that would compromise the Department's mission, 
security, or employee safety; and
    (5) Home addresses, telephone numbers, email addresses, or any other 
information not related to an employee's work.
    (d)(1) An agreement between the Department or appropriate 
component(s) of the Department and the exclusive representative is 
subject to approval by the Secretary or designee.
    (2) The Secretary or designee must approve the agreement within 30 
days after the date the agreement is executed if the agreement is in 
accordance with the provisions of these regulations and any other 
applicable law, rule, or regulation.
    (3) If the Secretary or designee does not approve or disapprove the 
agreement within the 30-day period specified in paragraph (d)(2) of this 
section, the agreement must take effect and is binding on the Department 
or component(s), as appropriate, and the exclusive representative, but 
only if consistent with law, the regulations in this part, 
Governmentwide rules and regulations, Departmental implementing 
directives and other policies and regulations, and Executive orders.
    (4) A local agreement subject to a national or other controlling 
agreement at a higher level may be approved under the procedures of the 
controlling agreement or, if none, under Departmental regulations. 
Bargaining will be at the level of recognition except where delegated.

[[Page 933]]

    (5) Provisions in existing collective bargaining agreements are 
unenforceable if an authorized agency official determines that they are 
contrary to law, the regulations in this part, Governmentwide rules and 
regulations, Departmental implementing directives (as provided by Sec. 
9701.506) and other policies and regulations, or Executive orders.



Sec. 9701.516  Allotments to representatives.

    (a) If the Department has received from an employee in an 
appropriate unit a written assignment which authorizes the Department to 
deduct from the pay of the employee amounts for the payment of regular 
and periodic dues of the exclusive representative of the unit, the 
Department must honor the assignment and make an appropriate allotment 
pursuant to the assignment. Any such allotment must be made at no cost 
to the exclusive representative or the employee. Except as provided 
under paragraph (b) of this section, any such assignment may not be 
revoked for a period of 1 year.
    (b) An allotment under paragraph (a) of this section for the 
deduction of dues with respect to any employee terminates when--
    (1) The agreement between the Department or Department component and 
the exclusive representative involved ceases to be applicable to the 
employee; or
    (2) The employee is suspended or expelled from membership in the 
exclusive representative.
    (c)(1) Subject to paragraph (c)(2) of this section, if a petition 
has been filed with the Authority by a labor organization alleging that 
10 percent of the employees in an appropriate unit in the Department 
have membership in the labor organization, the Authority must 
investigate the petition to determine its validity. Upon certification 
by the Authority of the validity of the petition, the Department has a 
duty to negotiate with the labor organization solely concerning the 
deduction of dues of the labor organization from the pay of the members 
of the labor organization who are employees in the unit and who make a 
voluntary allotment for such purpose.
    (2)(i) The provisions of paragraph (c)(1) of this section do not 
apply in the case of any appropriate unit for which there is an 
exclusive representative.
    (ii) Any agreement under paragraph (c)(1) of this section between a 
labor organization and the Department or Department component with 
respect to an appropriate unit becomes null and void upon the 
certification of an exclusive representative of the unit.



Sec. 9701.517  Unfair labor practices.

    (a) For the purpose of this subpart, it is an unfair labor practice 
for the Department--
    (1) To interfere with, restrain, or coerce any employee in the 
exercise by the employee of any right under this subpart;
    (2) To encourage or discourage membership in any labor organization 
by discrimination in connection with hiring, tenure, promotion, or other 
conditions of employment;
    (3) To sponsor, control, or otherwise assist any labor organization, 
other than to furnish, upon request, customary and routine services and 
facilities on an impartial basis to other labor organizations having 
equivalent status;
    (4) To discipline or otherwise discriminate against an employee 
because the employee has filed a complaint or petition, or has given any 
information or testimony under this subpart;
    (5) To refuse, as determined by the HSLRB, to consult or negotiate 
in good faith with a labor organization, as required by this subpart;
    (6) To fail or refuse, as determined by the HSLRB, to cooperate in 
impasse procedures and impasse decisions, as required by this subpart; 
or
    (7) To fail or refuse otherwise to comply with any provision of this 
subpart.
    (b) For the purpose of this subpart, it is an unfair labor practice 
for a labor organization--
    (1) To interfere with, restrain, or coerce any employee in the 
exercise by the employee of any right under this subpart;
    (2) To cause or attempt to cause the Department to discriminate 
against any employee in the exercise by the employee of any right under 
this subpart;

[[Page 934]]

    (3) To coerce, discipline, fine, or attempt to coerce a member of 
the labor organization as punishment, reprisal, or for the purpose of 
hindering or impeding the member's work performance or productivity as 
an employee or the discharge of the member's duties as an employee;
    (4) To discriminate against an employee with regard to the terms and 
conditions of membership in the labor organization on the basis of race, 
color, creed, national origin, sex, age, preferential or nonpreferential 
civil service status, political affiliation, marital status, or 
handicapping condition;
    (5) To refuse, as determined by the HSLRB, to consult or negotiate 
in good faith with the Department as required by this subpart;
    (6) To fail or refuse, as determined by the HSLRB, to cooperate in 
impasse procedures and impasse decisions as required by this subpart;
    (7)(i) To call, or participate in, a strike, work stoppage, or 
slowdown, or picketing of the Department in a labor-management dispute 
if such picketing interferes with an agency's operations; or
    (ii) To condone any activity described in paragraph (b)(7)(i) of 
this section by failing to take action to prevent or stop such activity; 
or
    (8) To otherwise fail or refuse to comply with any provision of this 
subpart.
    (c) Notwithstanding paragraph (b)(7) of this section, informational 
picketing which does not interfere with the Department's operations will 
not be considered an unfair labor practice.
    (d) For the purpose of this subpart, it is an unfair labor practice 
for an exclusive representative to deny membership to any employee in 
the appropriate unit represented by the labor organization, except for 
failure to meet reasonable occupational standards uniformly required for 
admission or to tender dues uniformly required as a condition of 
acquiring and retaining membership. This does not preclude any labor 
organization from enforcing discipline in accordance with procedures 
under its constitution or bylaws to the extent consistent with the 
provisions of this subpart.
    (e) The HSLRB will not consider any unfair labor practice allegation 
filed more than 6 months after the alleged unfair labor practice 
occurred, unless the HSLRB determines, pursuant to its regulations, that 
there is good cause for the late filing.
    (f) Issues which can properly be raised under an appeals procedure 
may not be raised as unfair labor practices prohibited under this 
section. Except where an employee has an option of using the negotiated 
grievance procedure or an appeals procedure in connection with an 
adverse action under subpart F of this part, issues which can be raised 
under a grievance procedure may, in the discretion of the aggrieved 
party, be raised under the grievance procedure or as an unfair labor 
practice under this section, but not under both procedures.
    (g) The expression of any personal view, argument, opinion, or the 
making of any statement which publicizes the fact of a representational 
election and encourages employees to exercise their right to vote in 
such an election, corrects the record with respect to any false or 
misleading statement made by any person, or informs employees of the 
Government's policy relating to labor-management relations and 
representation, may not, if the expression contains no threat of 
reprisal or force or promise of benefit or was not made under coercive 
conditions--
    (1) Constitute an unfair labor practice under any provision of this 
subpart; or
    (2) Constitute grounds for the setting aside of any election 
conducted under any provision of this subpart.



Sec. 9701.518  Duty to bargain, confer, and consult.

    (a) The Department or appropriate component(s) of the Department and 
any exclusive representative in any appropriate unit in the Department, 
through appropriate representatives, must meet and negotiate in good 
faith as provided by this subpart for the purpose of arriving at a 
collective bargaining agreement. In addition, the Department or 
appropriate component(s) of the Department and the exclusive 
representative may determine appropriate techniques, consistent with the 
operational rules of the HSLRB, to assist in any negotiation.

[[Page 935]]

    (b) If bargaining over an initial collective bargaining agreement or 
any successor agreement is not completed within 90 days after such 
bargaining begins, the parties may mutually agree to continue bargaining 
or mutually agree to refer the matter to an independent mediator/
arbitrator for resolution. Alternatively, either party may refer the 
matter to the HSLRB for resolution in accordance with procedures 
established by the HSLRB. Either party may refer the matter to the 
Federal Mediation Conciliation Service (FMCS) for assistance at any 
time.
    (c) If the parties bargain during the term of an existing collective 
bargaining agreement over a proposed change that is otherwise 
negotiable, and no agreement is reached within 30 days after such 
bargaining begins, the parties may mutually agree to continue bargaining 
or mutually agree to refer the matter to an independent mediator/
arbitrator for resolution. Alternatively, either party may refer the 
matter to the HSLRB for resolution in accordance with procedures 
established by the HSLRB. Either party may refer the matter to the 
Federal Mediation Conciliation Service (FMCS) for assistance at any 
time.
    (d)(1) Management may not bargain over any matters that are 
inconsistent with law or the regulations in this part, Governmentwide 
rules and regulations, Departmental implementing directives and other 
policies and regulations, or Executive orders.
    (2) In promulgating Departmental policies and regulations that deal 
with otherwise negotiable subjects, the Department will utilize the 
process set forth in Sec. 9701.512, except that the Department will 
confer with those labor organizations that request and have been 
accorded national consultation rights (NCR) established pursuant to 5 
U.S.C. 7113, which is not waived for these purposes, and consult with 
those organizations on other appropriate matters.
    (3) Management has no obligation to bargain over a change to a 
condition of employment unless the change is otherwise negotiable 
pursuant to these regulations and is foreseeable, substantial, and 
significant in terms of both impact and duration on the bargaining unit, 
or on those employees in that part of the bargaining unit affected by 
the change.
    (4) Management has no obligation to confer or consult as required by 
this section unless the change is foreseeable, substantial, and 
significant in terms of both impact and duration on the bargaining unit, 
or on those employees in that part of the bargaining unit affected by 
the change.
    (5) Nothing in paragraphs (b) or (c) of this section prevents or 
delays management from exercising the rights enumerated in Sec. 
9701.511.
    (e) If a management official involved in collective bargaining with 
an exclusive representative alleges that the duty to bargain in good 
faith does not extend to any matter, the exclusive representative may 
appeal the allegation to the HSLRB in accordance with procedures 
established by the HSLRB.



Sec. 9701.519  Negotiation impasses.

    (a) If the Department and exclusive representative are unable to 
reach an agreement under Sec. Sec. 9701.515 or 9701.518, either party 
may submit the disputed issues to the HSLRB for resolution.
    (b) If the parties do not arrive at a settlement after assistance by 
the HSLRB, the HSLRB may take whatever action is necessary and not 
inconsistent with this subpart to resolve the impasse.
    (c) Pursuant to Sec. Sec. 9701.508 and 9701.525, the HSLRB's 
regulations will provide for a single, integrated process to address all 
matters associated with a negotiations dispute, including unfair labor 
practices, negotiability disputes, and bargaining impasses.
    (d) Notice of any final action of the HSLRB under this section must 
be promptly served upon the parties. The action will be binding on such 
parties during the term of the agreement, unless the parties agree 
otherwise.



Sec. 9701.520  Standards of conduct for labor organizations.

    Standards of conduct for labor organizations are those prescribed 
under 5 U.S.C. 7120, which is not waived.

[[Page 936]]



Sec. 9701.521  Grievance procedures.

    (a)(1) Except as provided in paragraph (a)(2) of this section, any 
collective bargaining agreement must provide procedures for the 
settlement of grievances, including questions of arbitrability. Except 
as provided in paragraphs (d), (f), and (g) of this section, the 
procedures must be the exclusive administrative procedures for 
grievances which fall within its coverage.
    (2) Any collective bargaining agreement may exclude any matter from 
the application of the grievance procedures which are provided for in 
the agreement.
    (b)(1) Any negotiated grievance procedure referred to in paragraph 
(a) of this section must be fair and simple, provide for expeditious 
processing, and include procedures that--
    (i) Assure an exclusive representative the right, in its own behalf 
or on behalf of any employee in the unit represented by the exclusive 
representative, to present and process grievances;
    (ii) Assure such an employee the right to present a grievance on the 
employee's own behalf, and assure the exclusive representative the right 
to be present during the grievance proceeding; and
    (iii) Provide that any grievance not satisfactorily settled under 
the negotiated grievance procedure is subject to binding arbitration, 
which may be invoked by either the exclusive representative or the 
Department.
    (2) The provisions of a negotiated grievance procedure providing for 
binding arbitration in accordance with paragraph (b)(1)(iii) of this 
section must, if or to the extent that an alleged prohibited personnel 
practice is involved, allow the arbitrator to order a stay of any 
personnel action in a manner similar to the manner described in 5 U.S.C. 
1221(c) with respect to the Merit Systems Protection Board and order the 
Department to take any disciplinary action identified under 5 U.S.C. 
1215(a)(3) that is otherwise within the authority of the Department to 
take.
    (3) Any employee who is the subject of any disciplinary action 
ordered under paragraph (b)(2) of this section may appeal such action to 
the same extent and in the same manner as if the Department had taken 
the disciplinary action absent arbitration.
    (c) The preceding paragraphs of this section do not apply with 
respect to any matter concerning--
    (1) Any claimed violation of 5 U.S.C. chapter 73, subchapter III 
(relating to prohibited political activities);
    (2) Retirement, life insurance, or health insurance;
    (3) A suspension or removal under Sec. 9701.613;
    (4) A mandatory removal under Sec. 9701.607;
    (5) Any examination, certification, or appointment; and
    (6) Any subject not within the definition of grievance in Sec. 
9701.504 (e.g., the classification or pay of any position), except for 
any other adverse action under subpart F of this part which is not 
otherwise excluded by paragraph (c) of this section.
    (d) To the extent not already excluded by existing collective 
bargaining agreements, the exclusions contained in paragraph (c) of this 
section apply upon the effective date of this subpart, as determined 
under Sec. 9701.102(b).
    (e)(1) An aggrieved employee affected by a prohibited personnel 
practice under 5 U.S.C. 2302(b)(1) which also falls under the coverage 
of the negotiated grievance procedure may raise the matter under the 
applicable statutory procedures, or the negotiated procedure, but not 
both.
    (2) An employee is deemed to have exercised his or her option under 
paragraph (e)(1) of this section to raise the matter under the 
applicable statutory procedures, or the negotiated procedure, at such 
time as the employee timely initiates an action under the applicable 
statutory or regulatory procedure or timely files a grievance in writing 
in accordance with the provisions of the parties' negotiated grievance 
procedure, whichever event occurs first.
    (f)(1) For matters covered by subpart G of this part (except for 
mandatory removal offenses under Sec. 9701.707), an aggrieved employee 
may raise the matter under the appeals procedure of

[[Page 937]]

Sec. 9701.706 or under the negotiated grievance procedure, but not 
both. An employee will be deemed to have exercised his or her option 
under this section when the employee timely files an appeal under the 
applicable appellate procedures or a grievance in accordance with the 
provisions of the parties' negotiated grievance procedure, whichever 
occurs first.
    (2) An arbitrator hearing a matter appealable under subpart G of 
this part is bound by the applicable provisions of this part.
    (3) Section 7121(f) of title 5, United States Code, is not waived, 
but is modified to provide that--
    (i) Matters covered by subpart G are deemed to be matters covered by 
5 U.S.C. 4303 and 7512 for the purpose of obtaining judicial review; and
    (ii) Judicial review under 5 U.S.C. 7703 will apply to the award of 
an arbitrator in the same manner and under the same conditions as if the 
matter had been decided by MSPB under Sec. 9701.706, including the 
preponderance of the evidence standard.
    (4) In order to ensure consistency, the Department and 
representatives of those labor organizations granted national 
consultation rights may establish a mutually acceptable panel of 
arbitrators who have been trained and qualified to hear adverse action 
grievances under this part.
    (g)(1) An employee may grieve a performance rating of record that 
has not been appealed in connection with an action under subpart G of 
this part. Once an employee raises a performance rating issue in an 
appeal under subpart G of this part, any pending grievance or 
arbitration will be dismissed with prejudice.
    (2) An arbitrator may cancel a performance rating upon a finding 
that management applied the employee's established performance 
expectations in violation of applicable law, Department rule or 
regulation, or provision of collective bargaining agreement in a manner 
prejudicial to the grievant. An arbitrator who has properly canceled an 
employee's appraisal may order management to change the grievant's 
rating only when the arbitrator is able to determine the rating that 
management would have given but for the violation. When an arbitrator is 
unable to determine what the employee's rating would have been but for 
the violation, the arbitrator must remand the case to management for re-
evaluation. Except as otherwise provided by law, an arbitrator may not 
conduct an independent evaluation of the employee's performance or 
otherwise substitute his or her judgment for that of the supervisor.
    (h)(1) This paragraph applies with respect to a prohibited personnel 
practice other than a prohibited personnel practice to which paragraph 
(e) of this section applies.
    (2) An aggrieved employee affected by a prohibited personnel 
practice described in paragraph (h)(1) of this section may elect not 
more than one of the procedures described in paragraph (h)(3) of this 
section with respect thereto. A determination as to whether a particular 
procedure for seeking a remedy has been elected must be made as set 
forth under paragraph (h)(4) of this section.
    (3) The procedures for seeking remedies described in this paragraph 
are as follows:
    (i) An appeal under subpart G of this part;
    (ii) A negotiated grievance under this section; and
    (iii) Corrective action under 5 U.S.C. chapter 12, subchapters II 
and III.
    (4) For the purpose of this paragraph, an employee is considered to 
have elected one of the following, whichever election occurs first:
    (i) The procedure described in paragraph (h)(3)(i) of this section 
if such employee has timely filed a notice of appeal under the 
applicable appellate procedures;
    (ii) The procedure described in paragraph (h)(3)(ii) of this section 
if such employee has timely filed a grievance in writing, in accordance 
with the provisions of the parties' negotiated procedure; or
    (iii) The procedure described in paragraph (h)(3)(iii) of this 
section if such employee has sought corrective action from the Office of 
Special Counsel by making an allegation under 5 U.S.C. 1214(a)(1).

[[Page 938]]



Sec. 9701.522  Exceptions to arbitration awards.

    (a)(1) In the case of awards involving the exercise of management 
rights or the duty to bargain under Sec. Sec. 9701.511 and 9701.518, 
either party to arbitration under this subpart may file with the HSLRB 
an exception to any arbitrator's award. The HSLRB may take such action 
and make such recommendations concerning the award as is consistent with 
this subpart.
    (2) In the case of awards not involving the exercise of management 
rights or the duty to bargain under Sec. Sec. 9701.511 and 9701.518, 
either party may file exceptions to an arbitration award with the 
Authority pursuant to 5 U.S.C. 7122 (which is not waived for the purpose 
of this subpart but which is modified to apply to arbitration awards 
under this section) and the Authority's regulations.
    (3) Notwithstanding paragraph (a)(2) of this section, exceptions to 
awards relating to a matter described in Sec. 9701.521(f) may not be 
filed with the Authority.
    (b) If no exception to an arbitrator's award is filed under 
paragraph (a) of this section during the 30-day period beginning on the 
date of such award, the award is final and binding. Either party must 
take the actions required by an arbitrator's final award. The award may 
include the payment of back pay (as provided under 5 U.S.C. 5596 and 5 
CFR part 550, subpart H).
    (c) Nothing in this section prevents the HSLRB from determining its 
own jurisdiction without regard to whether any party has raised a 
jurisdictional issue.



Sec. 9701.523  Official time.

    (a) Any employee representing an exclusive representative in the 
negotiation of a collective bargaining agreement under this subpart must 
be authorized official time for such purposes, including attendance at 
impasse proceedings, during the time the employee otherwise would be in 
a duty status. The number of employees for whom official time is 
authorized under this section may not exceed the number of individuals 
designated as representing the Department for such purposes.
    (b) Any activities performed by any employee relating to the 
internal business of the labor organization, including but not limited 
to the solicitation of membership, elections of labor organization 
officials, and collection of dues, must be performed during the time the 
employee is in a nonduty status.
    (c) Except as provided in paragraph (a) of this section, the 
Authority or the HSLRB, as appropriate, will determine whether an 
employee participating for, or on behalf of, a labor organization in any 
phase of proceedings before the Authority or the HSLRB will be 
authorized official time for such purpose during the time the employee 
would otherwise be in a duty status.
    (d) Except as provided in the preceding paragraphs of this section, 
any employee representing an exclusive representative or, in connection 
with any other matter covered by this subpart, any employee in an 
appropriate unit represented by an exclusive representative, must be 
granted official time in any amount the Department and the exclusive 
representative involved agree to be reasonable, necessary, and in the 
public interest.



Sec. 9701.524  Compilation and publication of data.

    (a) The HSLRB must maintain a file of its proceedings and copies of 
all available agreements and arbitration decisions and publish the texts 
of its impasse resolution decisions and the actions taken under Sec. 
9701.519.
    (b) All files maintained under paragraph (a) of this section must be 
open to inspection and reproduction in accordance with 5 U.S.C. 552 and 
552a. The HSLRB will establish rules in consultation with the Department 
for maintaining and making available for inspection sensitive 
information.



Sec. 9701.525  Regulations of the HSLRB.

    The Department may issue initial interim rules for the operation of 
the HSLRB and will consult with labor organizations granted national 
consultation rights on the rules. The HSLRB will prescribe and publish 
rules for its operation in the Federal Register.

[[Page 939]]



Sec. 9701.526  Continuation of existing laws, recognitions, agreements, and

procedures.

    (a) Except as otherwise provided by Sec. 9701.506, nothing 
contained in this subpart precludes the renewal or continuation of an 
exclusive recognition, certification of an exclusive representative, or 
an agreement that is otherwise consistent with law and the regulations 
in this part between the Department or a component thereof and an 
exclusive representative of its employees, which is entered into before 
the effective date of this subpart, as determined under Sec. 
9701.102(b).
    (b) Policies, regulations, and procedures established under, and 
decisions issued under Executive Orders 11491, 11616, 11636, 11787, and 
11838 or any other Executive order, as in effect on the effective date 
of this subpart (as determined under Sec. 9701.102(b)), will remain in 
full force and effect until revised or revoked by the President, or 
unless superseded by specific provisions of this subpart or by 
implementing directives or decisions issued pursuant to this subpart.



Sec. 9701.527  Savings provision.

    This subpart does not apply to grievances or other administrative 
proceedings already pending on the date of coverage of this subpart, as 
determined under Sec. 9701.102(b). Any remedy that applies after the 
date of coverage under any provision of this part and that is in 
conflict with applicable provisions of this part is not enforceable.



                        Subpart F_Adverse Actions

                                 General



Sec. 9701.601  Purpose.

    This subpart contains regulations prescribing the requirements when 
employees are furloughed for 30 days or less, suspended, demoted, 
reduced in pay, or removed. DHS may issue implementing directives to 
carry out the provisions of this subpart.



Sec. 9701.602  Waivers.

    When a specified category of employees is covered by the adverse 
action provisions established under this subpart, 5 U.S.C. 7501 through 
7514 and 7531 through 7533 are waived with respect to that category of 
employees. The provisions in 5 U.S.C. 7521 and 7541 through 7543 are not 
waived.



Sec. 9701.603  Definitions.

    In this subpart:
    Adverse action means a furlough for 30 days or less, a suspension, a 
demotion, a reduction in pay, or a removal.
    Band means a work level or pay range within an occupational cluster.
    Competencies means the measurable or observable knowledge, skills, 
abilities, behaviors, and other characteristics required by a position.
    Current continuous service means a period of service immediately 
preceding an adverse action in the same or similar positions without any 
break in Federal civilian employment.
    Day means a calendar day.
    Demotion means a reduction in grade, a reduction to a lower band 
within the same occupational cluster, or a reduction to a lower band in 
a different occupational cluster under rules prescribed by DHS pursuant 
to Sec. 9701.355.
    Furlough means the placement of an employee in a temporary status 
without duties and pay because of lack of work or funds or other non-
disciplinary reasons.
    Grade means a level of work under a position classification or job 
grading system.
    Indefinite suspension means the placement of an employee in a 
temporary status without duties and pay pending investigation, inquiry, 
or further Department action. An indefinite suspension continues for an 
indeterminate period of time and usually ends with either the employee 
returning to duty or the completion of any subsequent administrative 
action.
    Initial service period (ISP) means the 1 to 2 years employees must 
serve after selection (on or after the date this subpart becomes 
applicable, as determined under Sec. 9701.102(b)) for a designated DHS 
position in the competitive service for the purpose of providing an 
employee the opportunity to demonstrate competencies in a specific 
occupation.
    Mandatory removal offense (MRO) means an offense that the Secretary 
determines, in his or her sole, exclusive, and unreviewable discretion, 
has a

[[Page 940]]

direct and substantial adverse impact on the Department's homeland 
security mission.
    Mandatory Removal Panel (MRP) means the three-person panel composed 
of officials appointed by the Secretary for fixed terms to decide 
appeals of removals based on a mandatory removal offense.
    Pay means the rate of basic pay fixed by law or administrative 
action for the position held by an employee before any deductions and 
exclusive of additional pay of any kind. For the purpose of this 
subpart, pay does not include locality-based comparability payments 
under 5 U.S.C. 5304, locality or special rate supplements under subpart 
C of this part, or other similar payments.
    Probationary period has the meaning given that term in 5 CFR 
315.801.
    Removal means the involuntary separation of an employee from the 
Department.
    Similar positions means positions in which the duties performed are 
similar in nature and character and require substantially the same or 
similar qualifications, so that the incumbent could be moved from one 
position to another without significant training or undue interruption 
to the work.
    Suspension means the temporary placement of an employee, for 
disciplinary reasons, in a nonduty/nonpay status.
    Trial period has the meaning given that term in 5 CFR 316.304.



Sec. 9701.604  Coverage.

    (a) Actions covered. This subpart covers furloughs of 30 days or 
less, suspensions, demotions, reductions in pay (including reductions in 
pay within a band), and removals.
    (b) Actions excluded. This subpart does not cover--
    (1) Any adverse action taken against an employee during a 
probationary, trial, or initial service period, except for an adverse 
action taken against a preference eligible employee in the competitive 
service who has completed the first year of an initial service period;
    (2) The demotion of a supervisor or manager under 5 U.S.C. 3321;
    (3) An action that terminates a temporary or term promotion and 
returns the employee to the position from which temporarily promoted, or 
to a different position of equivalent band and pay, if the employee was 
informed that the promotion was to be of limited duration;
    (4) A reduction-in-force action under 5 U.S.C. 3502;
    (5) An action under 5 U.S.C. 1215;
    (6) An action against an administrative law judge under 5 U.S.C. 
7521;
    (7) A voluntary action by an employee;
    (8) An action taken or directed by OPM based on suitability under 5 
CFR part 731;
    (9) Termination of appointment on the expiration date specified as a 
basic condition of employment at the time the appointment was made;
    (10) Cancellation of a promotion to a position not classified prior 
to the promotion;
    (11) Placement of an employee serving on an intermittent or seasonal 
basis in a temporary non-duty, non-pay status in accordance with 
conditions established at the time of appointment;
    (12) Reduction of an employee's rate of basic pay from a rate that 
is contrary to law or regulation;
    (13) An action taken under a provision of statute, other than one 
codified in title 5, U.S. Code, which excludes the action from 5 U.S.C. 
chapter 75 or this subpart;
    (14) A classification determination, including a classification 
determination under subpart B of this part; and
    (15) An action that entitles an employee to grade retention under 5 
CFR part 536 and an action to terminate this entitlement.
    (c) Employees covered. Subject to a determination by the Secretary 
or designee under Sec. 9701.102(b), this subpart applies to DHS 
employees, except as excluded by paragraph (d) of this section.
    (d) Employees excluded. This subpart does not apply to--
    (1) An employee in the competitive service who is serving a 
probationary, trial, or initial service period, except for a preference 
eligible employee in the competitive service who has completed the first 
year of an initial service period;

[[Page 941]]

    (2) A preference eligible employee in the excepted service who has 
not completed 1 year of current continuous service in the same or 
similar positions in an Executive agency or in the United States Postal 
Service or Postal Rate Commission;
    (3) An employee in the excepted service (other than a preference 
eligible) who has not completed 2 years of current continuous service in 
the same or similar positions in an Executive agency under other than a 
temporary appointment of 2 years or less;
    (4) A non-preference eligible employee who is serving a time-limited 
appointment (including a term appointment) of 2 years or less;
    (5) Members of the Senior Executive Service;
    (6) Administrative law judges;
    (7) Employees who are terminated in accordance with terms specified 
as conditions of employment at the time the appointment was made;
    (8) Employees whose appointments are made by and with the advice and 
consent of the Senate;
    (9) Employees whose positions have been determined to be of a 
confidential, policy-determining, policy-making, or policy-advocating 
character by--
    (i) The President, for a position that the President has excepted 
from the competitive service;
    (ii) OPM, for a position that OPM has excepted from the competitive 
service; or
    (iii) The President or the Secretary for a position excepted from 
the competitive service by statute;
    (10) An employee whose appointment is made by the President;
    (11) An employee who is receiving an annuity from the Civil Service 
Retirement and Disability Fund or the Foreign Service Retirement and 
Disability Fund based on the service of such employee;
    (12) An employee who is an alien or non-citizen occupying a position 
outside the United States, as described in 5 U.S.C. 5102(c)(11);
    (13) Members of the Homeland Security Labor Relations Board or the 
Mandatory Removal Panel;
    (14) Employees against whom an adverse personnel action is taken or 
imposed under any statute or regulation other than this subpart (e.g., 
Transportation Security Administration employees); and
    (15) Employees appointed and serving under a Schedule B excepted 
service appointment subject to conversion to career status pursuant to 
Executive Order 11203.



Sec. 9701.605  Initial service period.

    (a) DHS may establish an initial service period of 1 to 2 years for 
certain designated occupations in order for employees in such 
occupations to demonstrate appropriate competencies. DHS will establish 
standard policies for determining the applicability and the length of 
the ISP for specific occupations.
    (b) Employees must complete an ISP after selection for a designated 
DHS position in the competitive service before obtaining coverage under 
this subpart. All relevant prior Federal civilian service (including 
non-appropriated fund service), as determined by appropriate standards 
established by DHS, counts toward completion of this requirement.
    (c) An employee who is removed during a probationary, trial, or 
initial service period must be removed in accordance with 5 CFR 315.804 
or 315.805, except for a preference eligible employee in the competitive 
service who has completed the first year of an ISP.

  Requirements for Furlough of 30 Days or Less, Suspension, Demotion, 
                      Reduction in Pay, or Removal



Sec. 9701.606  Standard for action.

    The Department may take an adverse action under this subpart only 
for such cause as will promote the efficiency of the service. The 
standards for mandatory removal offenses and actions taken under the 
national security provisions are set forth in Sec. Sec. 9701.607 and 
9701.613, respectively.



Sec. 9701.607  Mandatory removal offenses.

    (a) The Secretary has the sole, exclusive, and unreviewable 
discretion to identify offenses that have a direct and

[[Page 942]]

substantial adverse impact on the Department's homeland security 
mission. Such offenses will be identified in advance as part of the 
Department's implementing directives, publicized via notice in the 
Federal Register, and made known to all employees on an annual basis.
    (b) When a mandatory removal action is proposed under this section, 
employees will have the right to advance notice, an opportunity to 
respond, a written decision, and a review by the Mandatory Removal Panel 
as set forth in subpart G of this part.
    (c) Prior to the issuance of a notice to the employee in question, 
the Secretary or designee will review and approve a proposed notice of 
removal on the grounds that the employee has committed a mandatory 
removal offense.
    (d) The Secretary has the sole, exclusive, and unreviewable 
discretion to mitigate the removal penalty.
    (e) Nothing in this section limits the discretion of the Department 
or any component thereof to remove employees for offenses other than 
those identified by the Secretary as mandatory removal offenses.
    (f) Nothing in this subpart limits the discretion of the Department 
or any component thereof to remove an employee based on the revocation 
of that employee's security clearance.



Sec. 9701.608  Procedures.

    An employee against whom an adverse action is proposed is entitled 
to the following:
    (a) A proposal notice under Sec. 9701.609;
    (b) An opportunity to reply under Sec. 9701.610; and
    (c) A decision notice under Sec. 9701.611.



Sec. 9701.609  Proposal notice.

    (a) Notice period. The Department must provide at least 15 days 
advance written notice of a proposed adverse action. However, if there 
is reasonable cause to believe the employee has committed a crime for 
which a sentence of imprisonment may be imposed, the Department must 
provide at least 5 days advance written notice.
    (b) Contents of notice. (1) The proposal notice must inform the 
employee of the factual basis for the proposed action in sufficient 
detail to permit the employee to reply to the notice, and inform the 
employee of his or her right to review the Department's evidence 
supporting the proposed action. The Department may not use evidence that 
cannot be disclosed to the employee, his or her representative, or 
designated physician pursuant to 5 CFR 297.204.
    (2) When some but not all employees in a given competitive level are 
being furloughed, the proposal notice must state the basis for selecting 
a particular employee for furlough, as well as the reasons for the 
furlough. The notice is not necessary for furlough without pay due to 
unforeseeable circumstances, such as sudden breakdowns in equipment, 
acts of God, or sudden emergencies requiring immediate curtailment of 
activities.
    (c) Duty status during notice period. An employee will remain in a 
duty status in his or her regular position during the notice period. 
However, when the Department determines that the employee's continued 
presence in the workplace during the notice period may pose a threat to 
the employee or others, result in loss of or damage to Government 
property, or otherwise jeopardize legitimate Government interests, the 
Department may elect one or a combination of the following alternatives:
    (1) Assign the employee to duties where the Department determines 
the employee is no longer a threat to safety, the Department's mission, 
or Government property;
    (2) Allow the employee to take leave, or place him or her in an 
appropriate leave status (annual leave, sick leave, or leave without 
pay) or absence without leave if the employee has absented himself or 
herself from the worksite without approved leave; or
    (3) Place the employee in a paid, non-duty status for such time as 
is necessary to effect the action.



Sec. 9701.610  Opportunity to reply.

    (a) The Department must give employees at least 10 days, which must 
run concurrently with the notice period, to reply orally and/or in 
writing to a notice of proposed adverse action. However, if there is 
reasonable cause to believe the employee has committed a

[[Page 943]]

crime for which a sentence of imprisonment may be imposed, the 
Department must give the employee at least 5 days, which must run 
concurrently with the notice period, to reply orally and/or in writing.
    (b) The opportunity to reply orally does not include the right to a 
formal hearing with examination of witnesses.
    (c) During the opportunity to reply, the Department must give the 
employee a reasonable amount of official time to review the Department's 
supporting evidence, and to furnish affidavits and other documentary 
evidence, if the employee is otherwise in an active duty status.
    (d) The Department must designate an official to receive the 
employee's written and/or oral response. The official must have 
authority to make or recommend a final decision on the proposed adverse 
action.
    (e) The employee may be represented by an attorney or other 
representative of the employee's choice and at the employee's expense, 
subject to paragraph (f) of this section. The employee must provide the 
Department with a written designation of his or her representative.
    (f) The Department may disallow as an employee's representative--
    (1) An individual whose activities as representative would cause a 
conflict between the interest or position of the representative and that 
of the Department,
    (2) An employee of the Department whose release from his or her 
official position would give rise to unreasonable costs or whose work 
assignments preclude his or her release; or
    (3) An individual whose activities as representative could 
compromise security.
    (g)(1) An employee who wishes the Department to consider any medical 
condition that may be relevant to the proposed adverse action must 
provide medical documentation, as that term is defined at 5 CFR 339.104, 
during the opportunity to reply, whenever possible.
    (2) When considering an employee's medical documentation, the 
Department may require or offer a medical examination pursuant to 5 CFR 
part 339, subpart C.
    (3) When considering an employee's medical condition, the Department 
is not required to withdraw or delay a proposed adverse action. However, 
the Department must--
    (i) Allow the employee to provide medical documentation during the 
opportunity to reply;
    (ii) Comply with 29 CFR 1614.203 and relevant Equal Employment 
Opportunity Commission rules; and
    (iii) Comply with 5 CFR 831.1205 when issuing a decision to remove.



Sec. 9701.611  Decision notice.

    (a) In arriving at its decision on a proposed adverse action, the 
Department may not consider any reasons for the action other than those 
specified in the proposal notice.
    (b) The Department must consider any response from the employee and 
the employee's representative, if the response is provided to the 
official designated under Sec. 9701.610(d) during the opportunity to 
reply, and any medical documentation furnished under Sec. 9701.610(g).
    (c) The decision notice must specify in writing the reasons for the 
decision and advise the employee of any appeal or grievance rights under 
subparts E or G of this part.
    (d) The Department must deliver the notice to the employee on or 
before the effective date of the action.



Sec. 9701.612  Departmental record.

    (a) Document retention. The Department must keep a record of all 
relevant documentation concerning the action for a period of time 
pursuant to the General Records Schedule and the Guide to Personnel 
Recordkeeping. The record must include the following:
    (1) A copy of the proposal notice;
    (2) The employee's written response, if any, to the proposal;
    (3) A summary of the employee's oral response, if any;
    (4) A copy of the decision notice; and
    (5) Any supporting material that is directly relevant and on which 
the action was substantially based.
    (b) Access to the record. The Department must make the record 
available for review by the employee and furnish

[[Page 944]]

a copy of the record upon the employee's request or the request of the 
Merit Systems Protection Board or the MRP.

                            National Security



Sec. 9701.613  Suspension and removal.

    (a) Notwithstanding other provisions of law or regulation, the 
Secretary may suspend an employee without pay when she or he considers 
suspension in the interests of national security. To the extent that the 
Secretary determines that the interests of national security permit, the 
suspended employee must be notified of the reasons for the suspension. 
Within 30 days after the notification, the suspended employee is 
entitled to submit to the official designated by the Secretary 
statements or affidavits to show why he or she should be restored to 
duty.
    (b) Subject to paragraph (c) of this section, the Secretary may 
remove an employee suspended under this section when, after 
investigation and review as the Secretary considers necessary, the 
Secretary determines that removal is necessary or advisable in the 
interests of national security. The determination of the Secretary is 
final.
    (c) An employee suspended under this section who has a permanent or 
indefinite appointment, has completed his or her initial service period, 
probationary period, or trial period, and is a citizen of the United 
States is entitled, after suspension and before removal, to--
    (1) A written statement of the charges against the employee within 
30 days after suspension, which may be amended within 30 days 
thereafter, and which must be stated as specifically as security 
considerations permit;
    (2) An opportunity within 30 days thereafter, plus an additional 30 
days if the charges are amended, to answer the charges and submit 
affidavits;
    (3) A hearing, at the request of the employee, by a Department 
authority duly constituted for this purpose;
    (4) A review of his or her case by the Secretary or designee, before 
a decision adverse to the employee is made final; and
    (5) A written decision from the Secretary.

                            Savings Provision



Sec. 9701.614  Savings provision.

    This subpart does not apply to adverse actions proposed prior to the 
date of an affected employee's coverage under this subpart.



                            Subpart G_Appeals



Sec. 9701.701  Purpose.

    This subpart contains the regulations implementing the provisions of 
5 U.S.C. 9701(a) through (c) and (f) concerning the Department's appeals 
system for certain adverse actions covered under subpart F of this part. 
These provisions require that the new appeals regulations provide 
Department employees fair treatment, are consistent with the protections 
of due process and, to the maximum extent practicable, provide for the 
expeditious handling of appeals.



Sec. 9701.702  Waivers.

    When a specified category of employees is covered by an appeals 
system established under this subpart, the provisions of 5 U.S.C. 7701 
are waived with respect to that category of employees to the extent they 
are inconsistent with the provisions of this subpart. The provisions of 
5 U.S.C. 7702 are modified as provided in Sec. 9701.709 to use ``MSPB 
or MRP'' wherever the terms ``Merit Systems Protection Board'' or 
``Board'' occur. The appellate procedures specified herein supersede 
those of MSPB to the extent MSPB regulations are inconsistent with this 
subpart. MSPB must follow the provisions in this subpart until 
conforming regulations are issued by MSPB.



Sec. 9701.703  Definitions.

    In this subpart:
    Adjudicating official means an administrative law judge, 
administrative judge, or other employee designated by MSPB to decide an 
appeal.
    Day means calendar day.
    Harmful error means error by the Department in the application of 
its procedures that is likely to have caused it to reach a conclusion 
different from the one it would have reached in the absence or cure of 
the error. The burden is on the appellant to show that the error was 
harmful, i.e., that it

[[Page 945]]

caused substantial harm or prejudice to his or her rights.
    Mandatory removal offense (MRO) means an offense that the Secretary 
determines in his or her sole, exclusive, and unreviewable discretion 
has a direct and substantial adverse impact on the Department's homeland 
security mission.
    Mandatory Removal Panel (MRP) means the three-person panel composed 
of officials appointed by the Secretary for fixed terms to decide 
appeals of removals based on a mandatory removal offense.
    MSPB means the Merit Systems Protection Board.
    Petition for review means a request for review of an initial 
decision of an adjudicating official.
    Preponderance of the evidence means the degree of relevant evidence 
that a reasonable person, considering the record as a whole, would 
accept as sufficient to find that a contested fact is more likely to be 
true than untrue.



Sec. 9701.704  Coverage.

    (a) Subject to a determination by the Secretary or designee under 
Sec. 9701.102(b), this subpart applies to employees who appeal 
furloughs of 30 days or less, demotions, reductions in pay, suspensions 
of 15 days or more, or removals, provided such employees are covered by 
Sec. 9701.604.
    (b) Appeals of suspensions shorter than 15 days and other lesser 
disciplinary measures are not covered under this subpart but may be 
grieved through a negotiated grievance procedure or an administrative 
grievance procedure, whichever is applicable.
    (c) The appeal rights in 5 CFR 315.806 apply to the removal of an 
employee while serving a probationary, trial, or initial service period, 
except for a preference eligible employee in the competitive service who 
has completed the first year of an initial service period.
    (d) Actions taken under Sec. 9701.613 are not appealable to MSPB.



Sec. 9701.705  Alternative dispute resolution.

    The Department and OPM recognize the value of using alternative 
dispute resolution methods such as mediation, an ombudsman, or interest-
based negotiation to address employee-employer disputes arising in the 
workplace, including those which may involve disciplinary actions. Such 
methods can result in more efficient and more effective outcomes than 
traditional, adversarial methods of dispute resolution. The Department 
will use alternative dispute resolution methods where appropriate. Such 
methods will be subject to collective bargaining to the extent permitted 
by subpart E of this part.



Sec. 9701.706  MSPB appellate procedures.

    (a) A covered Department employee may appeal an adverse action 
identified under Sec. 9701.704(a) to MSPB. Such an employee has a right 
to be represented by an attorney or other representative, and to a 
hearing if material facts are in dispute. However, separate procedures 
apply when the action is taken because of a mandatory removal offense or 
is in the interest of national security. (See Sec. Sec. 9701.707 and 
9701.613, respectively.)
    (b) MSPB may decide any case appealed to it or may refer the case to 
an administrative law judge appointed under 5 U.S.C. 3105 or other 
employee of MSPB designated by MSPB to decide such cases. MSPB or an 
adjudicating official must make a decision at the close of the review 
and provide a copy of the decision to each party to the appeal and to 
OPM.
    (c)(1) If an employee is the prevailing party in an appeal under 
this section, the employee must be granted the relief provided in the 
decision upon issuance of the decision, subject to paragraph (c)(3) of 
this section, and such relief remains in effect pending the outcome of 
any petition for review unless--
    (i) An adjudicating official determines that the granting of such 
relief is not appropriate; or
    (ii) The relief granted in the decision provides that the employee 
will return or be present at the place of employment pending the outcome 
of any petition for review, and the Department, subject to paragraph 
(c)(2) of this section, determines in its sole, exclusive, and 
unreviewable discretion, that the return or presence of the employee is 
unduly disruptive to the work environment.

[[Page 946]]

    (2) If the Department makes a determination under paragraph 
(c)(1)(ii) of this section that prevents the return or presence of an 
employee at the place of employment, such employee must receive pay, 
compensation, and all other benefits as terms and conditions of 
employment pending the outcome of any petition for review.
    (3) Nothing in the provisions of this section may be construed to 
require that any award of back pay or attorney fees be paid before the 
decision is final.
    (d) The decision of the Department must be sustained under paragraph 
(b) of this section if it is supported by a preponderance of the 
evidence, unless the employee shows by a preponderance of the evidence--
    (1) Harmful error in the application of Department procedures in 
arriving at the decision;
    (2) That the decision was based on any prohibited personnel practice 
described in 5 U.S.C. 2302(b); or
    (3) That the decision was not in accordance with law.
    (e) The Director of OPM may, as a matter of right at any time in the 
proceeding, intervene or otherwise participate in any proceeding under 
this section in any case in which the Director believes that an 
erroneous decision will have a substantial impact on a civil service 
law, rule, regulation, or policy directive.
    (f) Except as provided in Sec. 9701.709, any decision under 
paragraph (b) of this section is final unless a party to the appeal or 
the Director of OPM petitions MSPB for review within 30 days after 
receipt of the decision or MSPB reopens and reconsiders a case on its 
own motion. The Director may petition MSPB for review only if he or she 
believes the decision is erroneous and will have a substantial impact on 
a civil service law, rule, regulation, or policy directive. MSPB, for 
good cause shown, may extend the filing period.
    (g) If MSPB or an adjudicating official is of the opinion that 
consolidation or joinder could result in more expeditious processing of 
appeals and would not adversely affect any party, MSPB or an 
adjudicating official may--
    (1) Consolidate appeals filed by two or more appellants; or
    (2) Join two or more appeals filed by the same appellant and hear 
and decide them concurrently.
    (h)(1) Except as provided in paragraph (h)(2) of this section or as 
otherwise provided by law, MSPB or an adjudicating official may require 
payment by the Department of reasonable attorney fees incurred by an 
employee if the employee is the prevailing party and MSPB or an 
adjudicating official determines that payment by the Department is 
warranted in the interest of justice, including any case in which a 
prohibited personnel practice was engaged in by the Department or any 
case in which the Department's action was clearly without merit.
    (2) If the employee is the prevailing party and the decision is 
based on a finding of discrimination prohibited under 5 U.S.C. 
2302(b)(1), the payment of reasonable attorney fees must be in 
accordance with the standards prescribed in section 706(k) of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e-5(k)).
    (i)(1) MSPB or an adjudicating official may not require settlement 
discussions in connection with any appealed action under this section. 
If either party decides that settlement is not desirable, the matter 
will proceed to adjudication.
    (2) Where the parties agree to engage in settlement discussions 
before MSPB or an adjudicating official, these discussions will be 
conducted by an official specifically designated by MSPB for that sole 
purpose. Nothing prohibits the parties from engaging in settlement 
discussions on their own.
    (j) If an employee has been removed under subpart F of this part, 
neither the employee's status under any retirement system established by 
Federal statute nor any election made by the employee under any such 
system will affect the employee's appeal rights.
    (k) The following provisions modify MSPB's appellate procedures 
applicable to appeals under this subpart:
    (1) All appeals, including class appeals, will be filed no later 
than 20 days after the effective date of the action being appealed, or 
no later than 20 days after the date of service of the Department's 
decision, whichever is later.

[[Page 947]]

    (2) Either party may file a motion for representative 
disqualification at any time during the proceedings.
    (3) The parties may seek discovery regarding any matter that is 
relevant to any of their claims or defenses. However, by motion, either 
party may seek to limit such discovery because the burden or expense of 
providing the material outweighs its benefit, or because the material 
sought is privileged, not relevant, unreasonably cumulative or 
duplicative, or can be secured from some other source that is more 
convenient, less burdensome, or less expensive.
    (i) Prior to filing a motion to limit discovery, the parties must 
confer and attempt to resolve any pending objection(s).
    (ii) Neither party may submit more than one set of interrogatories, 
one set of requests for production of documents, and one set of requests 
for admissions. The number of interrogatories or requests for production 
or admissions may not exceed 25 per pleading, including subparts; in 
addition, neither party may conduct/compel more than 2 depositions.
    (iii) Either party may file a motion requesting additional 
discovery. Such motion may be granted only if the party has shown 
necessity and good cause to warrant such additional discovery.
    (4) Requests for case suspensions must be submitted jointly.
    (5) When there are no material facts in dispute, the adjudicating 
official must render summary judgment on the law without a hearing. 
However, when material facts are in dispute and a hearing is held, a 
transcript must be kept.
    (6) Given the Department's need to maintain an exceptionally high 
degree of order and discipline in the workplace, an arbitrator, 
adjudicating official, or MSPB may not modify the penalty imposed by the 
Department unless such penalty is so disproportionate to the basis for 
the action as to be wholly without justification. In cases of multiple 
charges, the third party's determination in this regard is based on the 
justification for the penalty as it relates to the sustained charge(s). 
When a penalty is mitigated, the maximum justifiable penalty must be 
applied.
    (7) An initial decision must be made no later than 90 days after the 
date on which the appeal is filed. If that initial decision is appealed 
to MSPB, MSPB must render its decision no later than 90 days after the 
close of the record before MSPB on petition for review.
    (8) If the Director seeks reconsideration of a final MSPB order, 
MSPB must render its decision no later than 60 days after receipt of the 
opposition to OPM's petition in support of such reconsideration. MSPB 
must state the reasons for its decision so that the Director can 
determine whether to seek judicial review and to facilitate expeditious 
judicial review.
    (9) MSPB, in conjunction with the Department and OPM, will develop 
and issue voluntary expedited appeals procedures for Department cases.
    (l) Failure of MSPB to meet the deadlines imposed by paragraphs 
(k)(7) and (k)(8) of this section in a case will not prejudice any party 
to the case and will not form the basis for any legal action by any 
party.
    (m) Except as otherwise provided by 5 U.S.C. 7702 with respect to 
cases involving allegations of discrimination, judicial review of any 
final MSPB order or decision is as prescribed under 5 U.S.C. 7703.



Sec. 9701.707  Appeals of mandatory removal actions.

    (a) General. Appeals of mandatory removal actions are governed by 
procedures set forth in this section. An employee may appeal such 
actions to the Mandatory Removal Panel (MRP) established under Sec. 
9701.708.
    (b) Procedures. (1) The MRP will establish procedures for the fair, 
impartial, and expeditious assignment and disposition of cases, 
consistent with the requirements set forth in Sec. 9701.706(k), as 
applicable, and for such other matters as may be necessary to ensure the 
operation of the MRP.
    (2) The MRP will conduct a hearing, for which a transcript will be 
kept, to resolve any factual disputes and other relevant matters. All 
members will hear a particular appeal and will decide it based on a 
majority vote of the members. If only two members are

[[Page 948]]

serving, the vote of the Chair will be dispositive in the event of a 
tie.
    (3) The appellant has the right to be represented by an attorney or 
other representative.
    (4) The only action available to the MRP is to sustain or overturn a 
mandatory removal. The MRP does not have authority to mitigate the 
penalty. Only the Secretary may mitigate the penalty in these cases 
after the MRP has rendered its decision.
    (5) The decision of the Department must be sustained if it is 
supported by a preponderance of the evidence, unless the employee shows 
by a preponderance of the evidence--
    (i) Harmful error in the application of Department procedures in 
arriving at the decision;
    (ii) That the decision was based on any prohibited personnel 
practice described in 5 U.S.C. 2302(b); or
    (iii) That the decision was not in accordance with law.
    (6)(i) Except as provided in paragraph (b)(6)(ii) of this section or 
as otherwise provided by law, the MRP may require payment by the 
Department of reasonable attorney fees incurred by an employee if the 
employee is the prevailing party and the Panel reviewing the initial 
appeal determines that payment by the Department is warranted in the 
interest of justice, including any case in which a prohibited personnel 
practice was engaged in by the Department or any case in which the 
Department's action was clearly without merit.
    (ii) If the employee is the prevailing party and the decision is 
based on a finding of discrimination prohibited under 5 U.S.C. 
2302(b)(1), the payment of reasonable attorney fees must be in 
accordance with the standards prescribed in Sec. 706(k) of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e-5(k)).
    (7) The MRP must issue a written decision (including dissenting 
opinions, where appropriate) in each case and serve each party and OPM 
with a copy. These decisions are final and binding.
    (8) Failure of the MRP to meet applicable deadlines imposed under 
Sec. 9701.706(k) in a case will not prejudice any party to the case and 
will not form the basis for any legal action by any party.
    (c) MSPB review. (1) In order to obtain judicial review of an MRP 
decision, an employee, the Department, or OPM must request a review of 
the record of an MRP decision by MSPB by filing such a request in 
writing within 15 days after the issuance of the decision. Within 15 
days after MSPB's receipt of the request for a review of the record, any 
response or OPM intervention must be filed. A party, or OPM, may each 
submit, and MSPB may grant for good cause shown, a request for a single 
extension of time not to exceed a maximum of 15 additional days. MSPB 
will establish, in conjunction with the MRP, standards for the 
sufficiency of the record and other procedures, including notice to the 
parties and OPM. MSPB must accept the findings of fact and 
interpretations of this part made by the MRP and sustain the MRP's 
decision unless the employee shows that the MRP's decision was--
    (i) Arbitrary, capricious, an abuse of discretion, or otherwise not 
in accordance with law;
    (ii) Caused by harmful error in the application of the MRP's 
procedures in arriving at such decision; or
    (iii) Unsupported by substantial evidence.
    (2) MSPB must complete its review of the record and issue a final 
decision within 30 days after receiving the party's timely response to 
such request for review or OPM's intervention brief, whichever is filed 
later. This 30-day time limit is mandatory, except that MSPB may extend 
its time for review by a maximum of 15 additional days if it determines 
that--
    (i) The case is unusually complex; or
    (ii) An extension is necessary to prevent any prejudice to the 
parties that would otherwise result.
    (3) No extension beyond that provided by paragraph (c)(2) of this 
section is permitted.
    (4) If MSPB does not issue a final decision within the mandatory 
time limit established by paragraph (c) of this section, MSPB will be 
considered to have denied the request for review of the MRP's decision, 
which will constitute a final decision of MSPB and is subject to 
judicial review in accordance with 5 U.S.C. 7703.

[[Page 949]]

    (d) Subsequent action. (1) If either the MRP or MSPB sustains an 
employee's appeal based on a finding that the employee did not commit an 
MRO, the Department is not precluded from subsequently proposing an 
adverse action (other than an MRO) based on the same record evidence. 
Such a proposal must be issued--
    (i) In accordance with applicable law and regulation, including the 
procedures set forth in Sec. 9701.609; and
    (ii) Normally within 15 days after the date of MSPB's decision, 
unless the Department establishes good cause for exceeding this time 
limit.
    (2) Nothing in this section precludes the Department from taking a 
subsequent action against an employee based, in part, on additional 
evidence that was not part of the record in the initial proceeding 
before the MRP.
    (e) Judicial review. Except as otherwise provided by 5 U.S.C. 7702 
with respect to cases involving allegations of discrimination, judicial 
review of any final MSPB order or decision on an MRO is as prescribed 
under 5 U.S.C. 7703.
    (f) OPM intervention. (1) The Director may, as a matter of right at 
any time in the proceeding before the MRP or MSPB, intervene or 
otherwise participate in any proceeding under this section in any case 
in which the Director believes that an erroneous decision will have a 
substantial impact on a civil service law, rule, regulation, or policy 
directive.
    (2) Except as provided in Sec. 9701.709, any decision under 
paragraph (c) of this section is final unless the Director petitions 
MSPB for review within 30 days after receipt of the decision. The 
Director may petition MSPB for review only if he or she believes the 
decision is erroneous and will have a substantial impact on a civil 
service law, rule, regulation, or policy directive. MSPB, for good cause 
shown, may extend the filing period.
    (g) Appeal rights of retirees. If an employee has been removed under 
subpart F of this part, neither the employee's status under any 
retirement system established by Federal statute nor any election made 
by the employee under any such system will affect the employee's appeal 
rights.



Sec. 9701.708  Mandatory Removal Panel.

    (a) Composition. (1) The Mandatory Review Panel is a standing panel 
composed of three members who will be appointed by the Secretary for 
terms of 3 years, except that the appointments of the initial MRP 
members will be for terms of 2, 3, and 4 years, respectively. The 
Secretary may extend the term of any member beyond 3 years when 
necessary to provide for an orderly transition and/or appoint the member 
for an additional term.
    (2) Members of the MRP must be independent, distinguished citizens 
of the United States who are well known for their integrity and 
impartiality. Members must have expertise in either labor or employee 
relations or law enforcement/homeland security matters. At least one 
member of the Board must have experience in labor relations. Members may 
be removed by the Secretary on the same grounds as an MSPB member.
    (3) An individual chosen to fill a vacancy on the MRP will be 
appointed for the unexpired term of the member who is replaced.
    (b) Appointment of the Chair. The Secretary, at his or her sole and 
exclusive discretion, will appoint one member to serve as Chair of the 
MRP.
    (c) Appointment procedures for non-Chair MRP members. (1) The 
appointments of the two non-Chair MRP members will be made by the 
Secretary after he or she considers any lists of nominees submitted by 
labor organizations that represent employees in the Department of 
Homeland Security.
    (2) The submission of lists of recommended nominees by labor 
organizations must be in accordance with timelines and requirements set 
forth by the Secretary, who may provide for additional consultation in 
order to obtain further information about a recommended nominee. The 
ability of the Secretary to appoint MRP members may not be delayed or 
otherwise affected by the failure of any labor organization to provide a 
list of nominees that meets the timeframe and requirements established 
by the Secretary.

[[Page 950]]



Sec. 9701.709  Actions involving discrimination.

    Section 7702 of title 5, U.S. Code, is modified to read ``MSPB or 
MRP'' wherever the terms ``Merit Systems Protection Board'' or ``Board'' 
are used.



Sec. 9701.710  Savings provision.

    This subpart does not apply to adverse actions proposed prior to the 
date of an affected employee's coverage under this subpart.

[[Page 951]]



CHAPTER XCIX--DEPARTMENT OF DEFENSE HUMAN RESOURCES MANAGEMENT AND LABOR 
     RELATIONS SYSTEMS (DEPARTMENT OF DEFENSE--OFFICE OF PERSONNEL 
                               MANAGEMENT)




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Part                                                                Page
9901            Department of Defense human resources 
                    management and labor relations systems..         953

[[Page 953]]



PART 9901_DEPARTMENT OF DEFENSE HUMAN RESOURCES MANAGEMENT AND LABOR RELATIONS 

SYSTEMS--Table of Contents




                      Subpart A_General Provisions

Sec.
9901.101 Purpose.
9901.102 Eligibility and coverage.
9901.103 Definitions.
9901.104 Scope of authority.
9901.105 Coordination with OPM.
9901.106 Continuing collaboration.
9901.107 Relationship to other provisions.
9901.108 Program evaluation.

                        Subpart B_Classification

                                 General

9901.201 Purpose.
9901.202 Coverage.
9901.203 Waivers.
9901.204 Definitions.
9901.205 Bar on collective bargaining.

                        Classification Structure

9901.211 Career groups.
9901.212 Pay schedules and pay bands.

                         Classification Process

9901.221 Classification requirements.
9901.222 Reconsideration of classification decisions.

                         Transitional Provisions

9901.231 Conversion of positions and employees to the NSPS 
          classification system.

                  Subpart C_Pay and Pay Administration

                                 General

9901.301 Purpose.
9901.302 Coverage.
9901.303 Waivers.
9901.304 Definitions.
9901.305 Bar on collective bargaining.

                         Overview of Pay System

9901.311 Major features.
9901.312 Maximum rates.
9901.313 National security compensation comparability.

                    Setting and Adjusting Rate Ranges

9901.321 Structure.
9901.322 Setting and adjusting rate ranges.
9901.323 Eligibility for pay increase associated with a rate range 
          adjustment.

                        Local Market Supplements

9901.331 General.
9901.332 Local market supplements.
9901.333 Setting and adjusting local market supplements.
9901.334 Eligibility for pay increase associated with a supplement 
          adjustment.

                          Performance-Based Pay

9901.341 General.
9901.342 Performance payouts.
9901.343 Pay reduction based on unacceptable performance and/or conduct.
9901.344 Other performance payments.
9901.345 Treatment of developmental positions.

                           Pay Administration

9901.351 Setting an employee's starting pay.
9901.352 Setting pay upon reassignment.
9901.353 Setting pay upon promotion.
9901.354 Setting pay upon reduction in band.
9901.355 Pay retention.
9901.356 Miscellaneous.

                               Premium Pay

9901.361 General.

                          Conversion Provisions

9901.371 General.
9901.372 Creating initial pay ranges.
9901.373 Conversion of employees to the NSPS pay system.

                    Subpart D_Performance Management

9901.401 Purpose.
9901.402 Coverage.
9901.403 Waivers.
9901.404 Definitions.
9901.405 Performance management system requirements.
9901.406 Setting and communicating performance expectations.
9901.407 Monitoring performance and providing feedback.
9901.408 Developing performance and addressing poor performance.
9901.409 Rating and rewarding performance.

                    Subpart E_Staffing and Employment

                                 General

9901.501 Purpose.
9901.502 Scope of authority.
9901.503 Coverage.
9901.504 Definitions.

               External Recruitment and Internal Placement

9901.511 Appointing authorities.
9901.512 Probationary periods.
9901.513 Qualification standards.
9901.514 Non-citizen hiring.
9901.515 Competitive examining procedures.
9901.516 Internal placement.

[[Page 954]]

                       Subpart F_Workforce Shaping

9901.601 Purpose and applicability.
9901.602 Scope of authority.
9901.603 Definitions.
9901.604 Coverage.
9901.605 Competitive area.
9901.606 Competitive group.
9901.607 Retention standing.
9901.608 Displacement, release, and position offers.
9901.609 Reduction in force notices.
9901.610 Voluntary separation.
9901.611 Reduction in force appeals.

                        Subpart G_Adverse Actions

                                 General

9901.701 Purpose.
9901.702 Waivers.
9901.703 Definitions.
9901.704 Coverage.

   Requirements for Removal, Suspension, Furlough of 30 Days or Less, 
    Reduction in Pay, or Reduction in Band (or Comparable Reduction)

9901.711 Standard for action.
9901.712 Mandatory removal offenses.
9901.713 Procedures.
9901.714 Proposal notice.
9901.715 Opportunity to reply.
9901.716 Decision notice.
9901.717 Departmental record.

                            Savings Provision

9901.721 Savings provision.

                            Subpart H_Appeals

9901.801 Purpose.
9901.802 Applicable legal standards and precedents.
9901.803 Waivers.
9901.804 Definitions.
9901.805 Coverage.
9901.806 Alternative dispute resolution.
9901.807 Appellate procedures.
9901.808 Appeals of mandatory removal actions.
9901.809 Actions involving discrimination.
9901.810 Savings provision.

                  Subpart I_Labor-Management Relations

9901.901 Purpose.
9901.902 Scope of authority.
9901.903 Definitions.
9901.904 Coverage.
9901.905 Impact on existing agreements.
9901.906 Employee rights.
9901.907 National Security Labor Relations Board.
9901.908 Powers and duties of the Board.
9901.909 Powers and duties of the Federal Labor Relations Authority.
9901.910 Management rights.
9901.911 Exclusive recognition of labor organizations.
9901.912 Determination of appropriate units for labor organization 
          representation.
9901.913 National consultation.
9901.914 Representation rights and duties.
9901.915 Allotments to representatives.
9901.916 Unfair labor practices.
9901.917 Duty to bargain and consult.
9901.918 Multi-unit bargaining.
9901.919 Collective bargaining above the level of recognition.
9901.920 Negotiation impasses.
9901.921 Standards of conduct for labor organizations.
9901.922 Grievance procedures.
9901.923 Exceptions to arbitration awards.
9901.924 Official time.
9901.925 Compilation and publication of data.
9901.926 Regulations of the Board.
9901.927 Continuation of existing laws, recognitions, agreements, and 
          procedures.
9901.928 Savings provisions.

    Authority: 5 U.S.C. 9902

    Source: 70 FR 66188, Nov. 1, 2005, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 9901.101  Purpose.

    (a) This part contains regulations governing the establishment of a 
new human resources management system and a new labor relations system 
within the Department of Defense (DoD), as authorized by 5 U.S.C. 9902. 
Consistent with 5 U.S.C. 9902, these regulations waive or modify various 
statutory provisions that would otherwise be applicable to affected DoD 
employees. These regulations are prescribed jointly by the Secretary of 
Defense and the Director of the Office of Personnel Management (OPM).
    (b)(1) This part is designed to meet a number of essential 
requirements for the implementation of a new human resources management 
system and a new labor relations system for DoD. The guiding principles 
for establishing these requirements are to put mission first; respect 
the individual; protect rights guaranteed by law, including the 
statutory merit system principles in 5 U.S.C. 2301; value talent, 
performance, leadership, and commitment to public service; be flexible, 
understandable, credible, responsive, and executable;

[[Page 955]]

ensure accountability at all levels; balance human resources system 
interoperability with unique mission requirements; and be competitive 
and cost effective.
    (2) The key operational characteristics and requirements of NSPS and 
the labor relations system, which these regulations are designed to 
facilitate, are as follows: High Performing Workforce and Management--
employees and supervisors are compensated and retained based on their 
performance and contribution to mission; Agile and Responsive Workforce 
and Management--workforce can be easily sized, shaped, and deployed to 
meet changing mission requirements; Credible and Trusted--system assures 
openness, clarity, accountability, and adherence to the public 
employment principles of merit and fitness; Fiscally Sound--aggregate 
increases in civilian payroll, at the appropriations level, will conform 
to OMB fiscal guidance; Supporting Infrastructure--information 
technology support, and training and change management plans are 
available and funded; and Schedule--NSPS and the labor relations system 
will be operational and demonstrate success prior to November 2009.



Sec. 9901.102  Eligibility and coverage.

    (a) Pursuant to the provisions of 5 U.S.C. 9902, all civilian 
employees of DoD are eligible for coverage under one or more of subparts 
B through I of this part, except to the extent specifically prohibited 
by law.
    (b) At his or her sole and exclusive discretion, the Secretary may, 
subject to Sec. 9901.105(b)--
    (1) Establish or change the effective date for applying subpart I of 
this part to all eligible employees in accordance with 5 U.S.C. 9902(m); 
and
    (2) With respect to subparts B through H of this part, apply these 
subparts to a specific category or categories of eligible civilian 
employees in organizations and functional units of the Department at any 
time in accordance with the provisions of 5 U.S.C. 9902. However, no 
category of employees may be covered by subparts B, C, E, F, G, or H of 
this part unless that category is also covered by subpart D of this 
part.
    (c) Until the Secretary makes a determination under paragraph (b) of 
this section to apply the provisions of one or more subparts of this 
part to a particular category or categories of eligible employees in 
organizations and functional units, those employees, will continue to be 
covered by the applicable Federal laws and regulations that would apply 
to them in the absence of this part. All personnel actions affecting DoD 
employees will be based on the Federal laws and regulations applicable 
to them on the effective date of the action.
    (d) Any new NSPS classification, pay, or performance management 
system covering Senior Executive Service (SES) members will be 
consistent with the policies and procedures established by the 
Governmentwide SES pay-for-performance framework authorized by 5 U.S.C. 
chapter 53, subchapter VIII, and applicable OPM regulations. If the 
Secretary determines that SES members employed by DoD should be covered 
by classification, pay, or performance management provisions that differ 
substantially from the Governmentwide SES pay-for-performance framework, 
the Secretary and the Director will issue joint regulations consistent 
with all of the requirements of 5 U.S.C. 9902.
    (e) At his or her sole and exclusive discretion, the Secretary may 
rescind the application under paragraph (b) of this section of one or 
more subparts of this part to a particular category of employees and 
prescribe implementing issuances for converting that category of 
employees to coverage under applicable title 5 or other applicable 
provisions. The Secretary will notify affected employees and labor 
organizations in advance of a decision to rescind the application of one 
or more subparts of this part to them.
    (f)(1) Notwithstanding any other provision of this part, but subject 
to the following conditions, the Secretary may, at his or her sole and 
exclusive discretion, apply one or more subparts of this part as of an 
effective date specified to a category of employees in organizational 
and functional units not currently eligible for coverage because of 
coverage under a system established by a provision of law outside the

[[Page 956]]

waivable or modifiable chapters of title 5, U.S. Code, if the provision 
of law outside those waivable or modifiable title 5 chapters provides 
discretionary authority to cover employees under a given waivable or 
modifiable title 5 chapter or to cover them under a separate system 
established by the Secretary.
    (2) In applying paragraph (f)(1) of this section with respect to 
coverage under subparts B and C of this part, the affected employees 
will be converted directly to the NSPS pay system from their current pay 
system. The Secretary may establish conversion rules for these employees 
similar to the conversion rules established under Sec. 9901.373.



Sec. 9901.103  Definitions.

    In this part:
    Band means pay band.
    Basic pay means an employee's rate of pay before any deductions and 
exclusive of additional pay of any kind, except as expressly provided by 
applicable law or regulation. For the specific purposes prescribed in 
Sec. 9901.332(c) only, basic pay includes any local market supplement.
    Career group means a grouping of one or more associated or related 
occupations. A career group may include one or more pay schedules.
    Competencies means the measurable or observable knowledge, skills, 
abilities, behaviors, and other characteristics that an individual needs 
to perform a particular job or job function successfully.
    Contribution means a work product, service, output, or result 
provided or produced by an employee or group of employees that supports 
the Departmental or organizational mission, goals, or objectives.
    Day means a calendar day.
    Department or DoD means the Department of Defense.
    Director means the Director of the Office of Personnel Management.
    Employee means an employee within the meaning of that term in 5 
U.S.C. 2105.
    Furlough means the placement of an employee in a temporary status 
without duties and pay because of lack of work or funds or other non-
disciplinary reasons.
    General Schedule or GS means the General Schedule classification and 
pay system established under chapter 51 and subchapter III of chapter 53 
of title 5, U.S. Code.
    Implementing issuance(s) means a document or documents issued by the 
Secretary, Deputy Secretary, Principal Staff Assistants (as authorized 
by the Secretary), or Secretaries of the Military Departments to carry 
out a policy or procedure implementing this part. These issuances may 
apply Department-wide or to any part of DoD as determined by the 
Secretary at his or her sole and exclusive discretion. These issuances 
do not include internal operating guidance, handbooks, or manuals that 
do not change conditions of employment, as defined in Sec. 9901.903.
    Initial probationary period means the period of time, as designated 
by the Secretary, immediately following an employee's appointment, 
during which an authorized management official determines whether the 
employee fulfills the requirements of the position to which assigned.
    In-service probationary period, such as a supervisory probationary 
period, means the period of time, as designated by the Secretary, during 
which an authorized management official determines whether the employee 
fulfills the requirements of the position to which assigned.
    Labor organization means an organization composed in whole or in 
part of employees, in which employees participate and pay dues, and 
which has as a purpose the dealing with the Department concerning 
grievances and conditions of employment, but does not include--
    (1) An organization which, by its constitution, bylaws, tacit 
agreement among its members, or otherwise, denies membership because of 
race, color, creed, national origin, sex, age, preferential or 
nonpreferential civil service status, political affiliation, marital 
status, or handicapping condition;
    (2) An organization which advocates the overthrow of the 
constitutional form of government of the United States;

[[Page 957]]

    (3) An organization sponsored by the Department; or
    (4) An organization which participates in the conduct of a strike 
against the Government or any agency thereof or imposes a duty or 
obligation to conduct, assist, or participate in such a strike.
    Mandatory removal offense (MRO) means an offense that the Secretary 
determines in his or her sole, exclusive, and unreviewable discretion 
has a direct and substantial adverse impact on the Department's national 
security mission.
    Military Department means the Department of the Army, the Department 
of the Navy, or the Department of the Air Force.
    MSPB means the Merit Systems Protection Board.
    National Security Personnel System (NSPS) means the human resources 
management system established under 5 U.S.C. 9902(a). It does not 
include the labor relations system established under 5 U.S.C. 9902(m).
    Occupational series means a group or family of positions performing 
similar types of work. Occupational series are assigned a number for 
workforce information purposes (for example: 0110, Economist Series; 
1410, Librarian Series).
    OPM means the Office of Personnel Management.
    Pay band or band means a work level and associated pay range within 
a pay schedule.
    Pay schedule means a set of related pay bands for a specified 
category of employees within a career group.
    Performance means accomplishment of work assignments or 
responsibilities and contribution to achieving organizational goals, 
including an employee's behavior and professional demeanor (actions, 
attitude, and manner of performance), as demonstrated by his or her 
approach to completing work assignments.
    Principal Staff Assistants means senior officials of the Office of 
the Secretary who report directly to the Secretary or Deputy Secretary 
of Defense.
    Promotion means the movement of an employee from one pay band to a 
higher pay band under implementing issuances. This includes movement of 
an employee currently covered by a non-NSPS Federal personnel system to 
a position determined to be at a higher level of work in NSPS.
    Rating of record means a performance appraisal prepared--
    (1) At the end of an appraisal period covering an employee's 
performance of assigned duties against performance expectations over the 
applicable period; or
    (2) As needed to reflect a substantial and sustained change in the 
employee's performance since the last rating of record as provided in 
implementing issuances.
    Reassignment means the movement of an employee within DoD from his 
or her position of record to a different position or set of duties in 
the same or a comparable pay band under implementing issuances on a 
permanent or temporary/time-limited basis. This includes the movement of 
an employee between positions at a comparable level of work in NSPS and 
a non-NSPS Federal personnel system.
    Reduction in band means the voluntary or involuntary movement of an 
employee from one pay band to a lower pay band under implementing 
issuances. This includes movement of an employee currently covered by a 
non-NSPS Federal personnel system to a position determined to be at a 
lower level of work in NSPS.
    Secretary means the Secretary of Defense, consistent with 10 U.S.C. 
113.
    SES means the Senior Executive Service established under 5 U.S.C. 
chapter 31, subchapter II.
    SL/ST refers to an employee serving in a senior-level position paid 
under 5 U.S.C. 5376. The term ``SL'' identifies a senior-level employee 
covered by 5 U.S.C. 3324 and 5108. The term ``ST'' identifies an 
employee who is appointed under the special authority in 5 U.S.C. 3325 
to a scientific or professional position established under 5 U.S.C. 
3104.
    Unacceptable performance means performance of an employee which 
fails to meet one or more performance expectations, as amplified through 
work assignments or other instructions, for which the employee is held 
individually accountable.

[[Page 958]]



Sec. 9901.104  Scope of authority.

    The authority for this part is 5 U.S.C. 9902. The provisions in the 
following chapters of title 5, U.S. Code, and any related regulations, 
may be waived or modified in exercising the authority in 5 U.S.C. 9902:
    (a) Chapters 31, 33, and 35, dealing with staffing, employment, and 
workforce shaping (as authorized by 5 U.S.C. 9902(k));
    (b) Chapter 43, dealing with performance appraisal systems;
    (c) Chapter 51, dealing with General Schedule job classification;
    (d) Chapter 53, dealing with pay for General Schedule employees, pay 
and job grading for Federal Wage System employees, and pay for certain 
other employees;
    (e) Chapter 55, subchapter V, dealing with premium pay, except 
section 5545b;
    (f) Chapter 71, dealing with labor relations (as authorized by 5 
U.S.C. 9902(m));
    (g) Chapter 75, dealing with adverse actions and certain other 
actions; and
    (h) Chapter 77, dealing with the appeal of adverse actions and 
certain other actions.



Sec. 9901.105  Coordination with OPM.

    (a) As specified in paragraphs (b) through (e) of this section, the 
Secretary will advise and/or coordinate with OPM in advance, as 
applicable, regarding the proposed promulgation of certain implementing 
issuances and certain other actions related to the ongoing operation of 
the NSPS where such actions could have a significant impact on other 
Federal agencies and the Federal civil service as a whole. Such pre-
decisional coordination is intended as an internal DoD/OPM matter to 
recognize the Secretary's special authority to direct the operations of 
the Department of Defense pursuant to title 10, U.S. Code, as well as 
the Director's institutional responsibility to oversee the Federal civil 
service system pursuant to 5 U.S.C. chapter 11.
    (b) DoD will advise OPM in advance regarding the extension of 
specific subparts of this part to specific categories of DoD employees 
under Sec. 9901.102(b).
    (c) Subpart B of this part authorizes the Secretary to establish and 
administer a position classification system and classify positions 
covered by the NSPS; in so doing, DoD will coordinate with OPM prior 
to--
    (1) Establishing or substantially revising career groups, 
occupational pay schedules, and pay bands under Sec. Sec. 9901.211 and 
9901.212(a);
    (2) Establishing alternative or additional occupational series for a 
particular career group or occupation under Sec. 9901.221(b)(1) that 
differ from Governmentwide series and/or standards;
    (3) Establishing alternative or additional classification standards 
for a particular career group or occupation under Sec. 9901.221(b)(1) 
that differ from Governmentwide classification standards; and
    (4) Establishing the process by which DoD employees may request 
reconsideration of classification decisions by the Secretary under Sec. 
9901.222, to ensure compatibility between DoD and OPM procedures.
    (d) Subpart C of this part authorizes the Secretary to establish and 
administer a compensation system for employees of the Department covered 
by the NSPS; in so doing, DoD will coordinate with OPM prior to--
    (1) Establishing maximum rates of basic pay and aggregate pay under 
Sec. 9901.312 that exceed those established under 5 U.S.C. chapter 53;
    (2) Establishing and adjusting pay ranges for occupational pay 
schedules and pay bands under Sec. Sec. 9901.321(a), 9901.322(a) and 
(b), and 9901.372;
    (3) Establishing and adjusting local market supplements under 
Sec. Sec. 9901.332(a) and 9901.333;
    (4) Establishing alternative or additional local market areas under 
Sec. 9901.332(b) that differ from those established for General 
Schedule employees under 5 CFR 531.603;
    (5) Establishing policies regarding starting rates of pay for newly 
appointed or transferred employees under Sec. Sec. 9901.351 through 
9901.354 and pay retention under Sec. 9901.355;
    (6) Establishing policies regarding premium pay under Sec. 9901.361 
that differ from those that exist in Governmentwide regulations; and
    (7) Establishing policies regarding the student loan repayment 
program

[[Page 959]]

under Sec. 9901.303(c) that differ from Governmentwide policies with 
respect to repayment amounts, service commitments, and reimbursement.
    (e) Subpart E of this part authorizes the Secretary to establish and 
administer authorities for the examination and appointment of employees 
to certain organizational elements of the Department covered by the 
NSPS; in so doing, DoD will coordinate with OPM prior to--
    (1) Establishing alternative or additional examining procedures 
under Sec. 9901.515 that differ from those applicable to the 
examination of applicants for appointment to the competitive and 
excepted service under 5 U.S.C. chapters 31 and 33, except as otherwise 
provided by subpart E of this part;
    (2) Establishing policies and procedures for time-limited 
appointments under Sec. 9901.511(d) regarding appointment duration, 
advertising requirements, examining procedures, the appropriate uses of 
time-limited employees, and the procedures under which a time-limited 
employee in a competitive service position maybe be converted without 
further competition to the career service; and
    (3) Establishing alternative or additional qualification standards 
for a particular occupational series, career group, occupational pay 
schedule, and/or pay band under Sec. 9901.212(d) or 9901.513 that 
significantly differ from Governmentwide standards.
    (f) Subpart F of this part authorizes the Secretary to establish and 
administer a workforce shaping system for employees of the Department 
covered by the NSPS; in so doing, DoD will coordinate with OPM prior to 
modifying coverage, retention procedures, or appeal rights under subpart 
F of this part.
    (g) Section 9902(l) of title 5, U.S. Code, requires the Secretary to 
make a determination that the Department has in place a performance 
management system that meets the criteria in 5 U.S.C. 9902(b) before the 
Secretary may apply the human resources management system established 
under 5 U.S.C. 9902(a) to an organization or functional unit that 
exceeds 300,000 civilian employees. In making this determination, the 
Secretary will coordinate with the Director.
    (h) When a matter requiring OPM coordination is submitted to the 
Secretary for decision, the Director will be provided an opportunity, as 
part of the Department's normal coordination process, to review and 
comment on the recommendations and officially concur or nonconcur with 
all or part of them. The Secretary will take the Director's comments and 
concurrence/ nonconcurrence into account, advise the Director of his or 
her determination, and provide the Director with reasonable advance 
notice of the effective date of the matter. Thereafter, the Secretary 
and the Director may take such action(s) as they deem appropriate, 
consistent with their respective statutory authorities and 
responsibilities.
    (i) The Secretary and the Director fully expect their staffs to work 
closely together on the matters specified in this section, before such 
matters are submitted for official OPM coordination and DoD decision, so 
as to maximize the opportunity for consensus and agreement before an 
issue is so submitted.



Sec. 9901.106  Continuing collaboration.

    (a) Continuing collaboration with employee representatives. (1) 
Consistent with 5 U.S.C. 9902, this section provides employee 
representatives with an opportunity to participate in the development of 
implementing issuances that carry out the provisions of this part. This 
process is the exclusive procedure for the participation of employee 
representatives in the planning, development, or implementation of the 
implementing issuances that carry out the provisions of this part. 
Therefore, this process is not subject to the requirements of 5 U.S.C. 
chapter 71, including but not limited to the exercise of management 
rights, enforcement of the duty to consult or negotiate, the duty to 
bargain and consult, or impasse procedures, or the requirements 
established by subpart I of this part, including but not limited to 
Sec. Sec. 9901.910 (regarding the exercise of management rights), 
9901.916(a)(5) (regarding enforcement of the duty to consult or 
negotiate), 9901.917 (regarding the duty to

[[Page 960]]

bargain and consult), and 9901.920 (regarding impasse procedures).
    (2)(i) For the purpose of this section, the term ``employee 
representatives'' includes representatives of labor organizations with 
exclusive recognition rights for units of DoD employees, as determined 
pursuant to subpart I of this part.
    (ii) The Secretary, at his or her sole and exclusive discretion, may 
determine the number of employee representatives to be engaged in the 
continuing collaboration process. However, each national labor 
organization with one or more bargaining units accorded exclusive 
recognition in the Department affected by an implementing issuance will 
be provided the opportunity to participate in the continuing 
collaboration process.
    (iii) Each national labor organization with multiple collective 
bargaining units accorded exclusive recognition will determine how its 
units will be represented within the limitations imposed by the 
Secretary under paragraph (a)(2)(ii) of this section.
    (3)(i) Within timeframes specified by the Secretary, employee 
representatives will be provided with an opportunity to submit written 
comments to, and to discuss their views and recommendations with, DoD 
officials on any proposed final draft implementing issuances. If views 
and recommendations are presented by employee representatives, the 
Secretary must consider these views and recommendations before taking 
final action. The Secretary will provide employee representatives a 
written statement of the reasons for taking the final action regarding 
the implementing issuance.
    (ii) To the extent that the Secretary determines necessary, employee 
representatives will be provided with an opportunity to discuss their 
views with DoD officials and/or to submit written comments, at initial 
identification of implementation issues and conceptual design and/or at 
review of draft recommendations or alternatives.
    (4) Employee representatives will be provided with access to 
information for their participation in the continuing collaboration 
process to be productive.
    (5) Nothing in the continuing collaboration process will affect the 
right of the Secretary, Deputy Secretary, Principal Staff Assistants, or 
Secretaries of the Military Departments to determine the content of 
implementing issuances and to make them effective at any time.
    (b) Continuing collaboration with other interested organizations. 
The Secretary may also establish procedures for continuing collaboration 
with appropriate organizations that represent the interests of a 
substantial number of nonbargaining unit employees.



Sec. 9901.107  Relationship to other provisions.

    (a)(1) The provisions of title 5, U.S. Code, are waived, modified, 
or replaced to the extent authorized by 5 U.S.C. 9902 to conform to the 
provisions of this part.
    (2) This part must be interpreted in a way that recognizes the 
critical national security mission of the Department, and each provision 
of this part must be construed to promote the swift, flexible, effective 
day-to-day accomplishment of this mission, as defined by the Secretary. 
The interpretation of the regulations in this part by DoD and OPM must 
be accorded great deference.
    (b) For the purpose of applying other provisions of law or 
Governmentwide regulations that reference provisions under chapters 31, 
33, 35, 43, 51, 53, 55 (subchapter V only), 71, 75, and 77 of title 5, 
U.S. Code, the referenced provisions are not waived but are modified 
consistent with the corresponding regulations in this part, except as 
otherwise provided in this part (including paragraph (c) of this 
section) or in implementing issuances. Applications of this rule 
include, but are not limited to, the following:
    (1) If another provision of law or Governmentwide regulations 
requires coverage under one of the chapters modified or waived under 
this part (i.e., chapters 31, 33, 35, 43, 51, 53, 55 (subchapter V 
only), 71, 75, and 77 of title 5, U.S. Code), DoD employees are deemed 
to be covered by the applicable chapter notwithstanding coverage under a 
system established under this part. Selected examples of provisions that 
continue to apply to any DoD employees

[[Page 961]]

(notwithstanding coverage under subparts B through I of this part) 
include, but are not limited to, the following:
    (i) Foreign language awards for law enforcement officers under 5 
U.S.C. 4521 through 4523;
    (ii) Pay for firefighters under 5 U.S.C. 5545b;
    (iii) Recruitment, relocation, and retention payments under 5 U.S.C. 
5753 through 5754; and
    (iv) Physicians' comparability allowances under 5 U.S.C. 5948.
    (2) In applying the back pay law in 5 U.S.C. 5596 to DoD employees 
covered by subpart H of this part (dealing with appeals), the reference 
in section 5596(b)(1)(A)(ii) to 5 U.S.C. 7701(g) (dealing with attorney 
fees) is considered to be a reference to a modified section 7701(g) that 
is consistent with Sec. 9901.807(f)(6).
    (3) In applying the back pay law in 5 U.S.C. 5596 to DoD employees 
covered by subpart I of this part (dealing with labor relations), the 
references in section 5596 to provisions in chapter 71 are considered to 
be references to those particular provisions as modified by subpart I of 
this part.
    (c) Law enforcement officer special base rates under section 403 of 
the Federal Employees Pay Comparability Act of 1990 (section 529 of Pub. 
L. 101-509) do not apply to employees who are covered by an NSPS 
classification and pay system established under subparts B and C of this 
part.
    (d) Nothing in this part waives, modifies or otherwise affects the 
employment discrimination laws that the Equal Employment Opportunity 
Commission (EEOC) enforces under 42 U.S.C. 2000e et seq., 29 U.S.C. 621 
et seq., 29 U.S.C. 791 et seq., and 29 U.S.C. 206(d).



Sec. 9901.108  Program evaluation.

    (a) The Secretary will evaluate the regulations in this part and 
their implementation. The Secretary will provide designated employee 
representatives with an opportunity to be briefed and a specified 
timeframe to provide comments on the design and results of program 
evaluations.
    (b) Involvement of employee representatives in the evaluation 
process does not waive the rights of any party under applicable law or 
regulations.



                        Subpart B_Classification

                                 General



Sec. 9901.201  Purpose.

    (a) This subpart contains regulations establishing a classification 
structure and rules for covered DoD employees and positions to replace 
the classification structure and rules in 5 U.S.C. chapter 51 and the 
job grading system in 5 U.S.C. chapter 53, subchapter IV, in accordance 
with the merit principle that equal pay should be provided for work of 
equal value, with appropriate consideration of both national and local 
rates paid by employers in the private sector, and appropriate 
incentives and recognition should be provided for excellence in 
performance.
    (b) Any classification system prescribed under this subpart will be 
established in conjunction with the pay system described in subpart C of 
this part.



Sec. 9901.202  Coverage.

    (a) This subpart applies to eligible DoD employees and positions 
listed in paragraph (b) of this section, subject to a determination by 
the Secretary under Sec. 9901.102(b)(2).
    (b) The following employees of, or positions in, DoD organizational 
and functional units are eligible for coverage under this subpart:
    (1) Employees and positions that would otherwise be covered by the 
General Schedule classification system established under 5 U.S.C. 
chapter 51;
    (2) Employees and positions that would otherwise be covered by a 
prevailing rate system established under 5 U.S.C. chapter 53, subchapter 
IV;
    (3) Employees in senior-level (SL) and scientific or professional 
(ST) positions who would otherwise be covered by 5 U.S.C. 5376;
    (4) Members of the Senior Executive Service (SES) who would 
otherwise be covered by 5 U.S.C. chapter 53, subchapter VIII, subject to 
Sec. 9901.102(d); and
    (5) Such others designated by the Secretary as DoD may be authorized 
to include under 5 U.S.C. 9902.

[[Page 962]]



Sec. 9901.203  Waivers.

    (a) When a specified category of employees is covered by a 
classification system established under this subpart, the provisions of 
5 U.S.C. chapter 51 and 5 U.S.C. 5346 are waived with respect to that 
category of employees, except as provided in paragraph (b) of this 
section, Sec. Sec. 9901.107, and 9901.222(d) (with respect to OPM's 
authority under 5 U.S.C. 5112(b) and 5346(c) to act on requests for 
review of classification decisions).
    (b) Section 5108 of title 5, U.S. Code, dealing with the 
classification of positions above GS-15, is not waived for the purpose 
of defining and allocating senior executive service positions under 5 
U.S.C. 3132 and 3133 or applying provisions of law outside the waivable 
and modifiable chapters of title 5, U.S. Code--e.g., 5 U.S.C. 4507 and 
4507a (regarding Presidential rank awards) and 5 U.S.C. 6303(f) 
(regarding annual leave accrual for members of the SES and employees in 
SL/ST positions).



Sec. 9901.204  Definitions.

    In this subpart:
    Band means pay band.
    Basic pay has the meaning given that term in Sec. 9901.103.
    Career group has the meaning given that term in Sec. 9901.103.
    Classification, also referred to as job evaluation, means the 
process of analyzing and assigning a job or position to an occupational 
series, career group, pay schedule, and pay band for pay and other 
related purposes.
    Competencies has the meaning given that term in Sec. 9901.103.
    Occupational series has the meaning given that term in Sec. 
9901.103.
    Pay band or band has the meaning given that term in Sec. 9901.103.
    Pay schedule has the meaning given that term in Sec. 9901.103.
    Position or job means the duties, responsibilities, and related 
competency requirements that are assigned to an employee whom the 
Secretary approves for coverage under Sec. 9901.202(a).



Sec. 9901.205  Bar on collective bargaining.

    Pursuant to 5 U.S.C. 9902(f)(4) and (m)(7), any classification 
system established under this subpart is not subject to collective 
bargaining. This bar on collective bargaining applies to all aspects of 
the classification system, including, but not limited to coverage 
determinations, the design of the classification structure, and 
classification methods, criteria, and administrative procedures and 
arrangements.

                        Classification Structure



Sec. 9901.211  Career groups.

    For the purpose of classifying positions, the Secretary may 
establish career groups based on factors such as mission or function; 
nature of work; qualifications or competencies; career or pay 
progression patterns; relevant labor-market features; and other 
characteristics of those occupations or positions. The Secretary will 
document in implementing issuances the criteria and rationale for 
grouping occupations or positions into career groups.



Sec. 9901.212  Pay schedules and pay bands.

    (a) For purposes of identifying relative levels of work and 
corresponding pay ranges, the Secretary may establish one or more pay 
schedules within each career group.
    (b) Each pay schedule may include one or more pay bands.
    (c) The Secretary will document in implementing issuances the 
definitions for each pay band which specify the type and range of 
difficulty and responsibility; qualifications or competencies; or other 
characteristics of the work encompassed by the pay band.
    (d) The Secretary will designate qualification standards and 
requirements for each career group, occupational series, pay schedule, 
and/or pay band, as provided in Sec. 9901.513.

                         Classification Process



Sec. 9901.221  Classification requirements.

    (a) The Secretary will develop a methodology for describing and 
documenting the duties, qualifications, and other requirements of 
categories of jobs, and will make such descriptions and documentation 
available to affected employees.
    (b) The Secretary will--

[[Page 963]]

    (1) Assign occupational series to jobs consistent with occupational 
series definitions established by OPM under 5 U.S.C. 5105 and 5346, or 
by DoD; and
    (2) Apply the criteria and definitions required by Sec. Sec. 
9901.211 and 9901.212 to assign jobs to an appropriate career group, pay 
schedule, and pay band.
    (c) The Secretary will establish procedures for classifying jobs and 
may make such inquiries of the duties, responsibilities, and 
qualification requirements of jobs as it considers necessary for the 
purpose of this section.
    (d) Classification decisions become effective on the date an 
authorized official approves the classification. A classification 
decision is implemented by a personnel action. The personnel action 
implementing a classification decision must occur within four pay 
periods after the date of the decision. Except as provided for in Sec. 
9901.222(b), such decisions will be applied prospectively and do not 
convey any retroactive entitlements.



Sec. 9901.222  Reconsideration of classification decisions.

    (a) An individual employee may request that DoD or OPM reconsider 
the classification (i.e., pay system, career group, occupational series, 
official title, pay schedule, or pay band) of his or her official 
position of record at any time.
    (b) The Secretary will establish implementing issuances for 
reviewing requests for reconsideration. Such issuances will include a 
provision stating that a retroactive effective date may be required only 
if the employee is wrongfully reduced in band.
    (c) An employee may request OPM to review a DoD determination made 
under paragraph (a) of this section. If an employee does not request an 
OPM reconsideration decision, DoD's classification determination is 
final and not subject to further review or appeal.
    (d) OPM's final determination on a request made under this section 
is not subject to further review or appeal.
    (e) Any determination made under this section will be based on 
criteria issued by the Secretary or, where the Secretary has adopted an 
OPM classification standard, criteria issued by OPM.

                         Transitional Provisions



Sec. 9901.231  Conversion of positions and employees to the NSPS 

classification system.

    (a) This section describes the transitional provisions that apply 
when DoD positions and employees initially are converted to a 
classification system established under this subpart. Affected positions 
and employees may convert from the GS system, a prevailing rate system, 
the SL/ST system, the SES system, or such other DoD systems as may be 
designated by the Secretary, as provided in Sec. 9901.202. For the 
purpose of this section, the terms ``convert,'' ``converted,'' 
``converting,'' and ``conversion'' refer to positions and employees that 
become covered by the NSPS classification system as a result of a 
coverage determination made under Sec. 9901.102(b)(2) and exclude 
employees who move from a noncovered position to a position already 
covered by NSPS.
    (b) The Secretary will issue implementing issuances prescribing 
policies and procedures for converting DoD employees to a pay band upon 
initial implementation of the NSPS classification system. Such 
procedures will include provisions for converting an employee who is 
retaining a grade under 5 U.S.C. chapter 53, subchapter VI, immediately 
prior to conversion. The Secretary will convert an employee's rate of 
pay as provided in Sec. 9901.373.



                  Subpart C_Pay and Pay Administration

                                 General



Sec. 9901.301  Purpose.

    (a) This subpart contains regulations establishing pay structures 
and pay administration rules for covered DoD employees to replace the 
pay structures and pay administration rules established under 5 U.S.C. 
chapter 53 and 5 U.S.C. chapter 55, subchapter V, as authorized by 5 
U.S.C. 9902. Various features that link pay to employees' performance 
ratings are designed to promote a high-performance culture within DoD.

[[Page 964]]

    (b) Any pay system prescribed under this subpart will be established 
in conjunction with the classification system described in subpart B of 
this part.
    (c) Any pay system prescribed under this subpart will be established 
in conjunction with the performance management system described in 
subpart D of this part.



Sec. 9901.302  Coverage.

    (a) This subpart applies to eligible DoD employees and positions in 
the categories listed in paragraph (b) of this section, subject to a 
determination by the Secretary under Sec. 9901.102(b)(2).
    (b) The following employees of, or positions in, DoD organizational 
and functional units are eligible for coverage under this subpart:
    (1) Employees and positions who would otherwise be covered by the 
General Schedule pay system established under 5 U.S.C. chapter 53, 
subchapter III;
    (2) Employees and positions who would otherwise be covered by a 
prevailing rate system established under 5 U.S.C. chapter 53, subchapter 
IV;
    (3) Employees in senior-level (SL) and scientific or professional 
(ST) positions who would otherwise be covered by 5 U.S.C. 5376;
    (4) Members of the Senior Executive Service (SES) who would 
otherwise be covered by 5 U.S.C. chapter 53, subchapter VIII, subject to 
Sec. 9901.102(d); and
    (5) Such others designated by the Secretary as DoD may be authorized 
to include under 5 U.S.C. 9902.
    (c) This section does not apply in determining coverage under Sec. 
9901.361 (dealing with premium pay).



Sec. 9901.303  Waivers.

    (a) When a specified category of employees is covered under this 
subpart--
    (1) The provisions of 5 U.S.C. chapter 53 are waived with respect to 
that category of employees, except as provided in Sec. 9901.107 and 
paragraphs (b) and (c) of this section; and
    (2) The provisions of 5 U.S.C. chapter 55, subchapter V (except 
section 5545b), are waived with respect to that category of employees to 
the extent that those employees are covered by alternative premium pay 
provisions established by the Secretary under Sec. 9901.361 in lieu of 
the provisions in 5 U.S.C. chapter 55, subchapter V.
    (b) The following provisions of 5 U.S.C. chapter 53 are not waived:
    (1) Sections 5311 through 5318, dealing with Executive Schedule 
positions;
    (2) Section 5371, insofar as it authorizes OPM to apply the 
provisions of 38 U.S.C. chapter 74 to DoD employees in health care 
positions covered by section 5371 in lieu of any NSPS pay system 
established under this subpart or the following provisions of title 5, 
U.S. Code: Chapters 51, 53, and 61, and subchapter V of chapter 55. The 
reference to ``chapter 51'' in section 5371 is deemed to include a 
classification system established under subpart B of this part; and
    (3) Section 5377, dealing with the critical pay authority.
    (c) Section 5379 is modified. The Secretary may establish and 
administer a student loan repayment program for DoD employees, except 
that the Secretary may not make loan payments for any noncareer 
appointee in the SES (as defined in 5 U.S.C. 3132(a)(7)) or for any 
employee occupying a position that is excepted from the competitive 
service because of its confidential, policy-determining, policy-making, 
or policy-advocating character. Notwithstanding Sec. 9901.302(a), any 
DoD employee otherwise covered by section 5379 is eligible for coverage 
under the provisions established under this paragraph, subject to a 
determination by the Secretary under Sec. 9901.102(b)(2).



Sec. 9901.304  Definitions.

    In this part:
    Band means pay band.
    Band rate range means the range of rates of basic pay (excluding any 
local market supplements) applicable to employees in a particular pay 
band, as described in Sec. 9901.321. Each band rate range is defined by 
a minimum and maximum rate.
    Basic pay has the meaning given that term in Sec. 9901.103.
    Bonus means an element of the performance payout that consists of a 
one-time lump-sum payment made to employees. It is not part of basic 
pay.
    Career group has the meaning given that term in Sec. 9901.103.

[[Page 965]]

    Competencies has the meaning given that term in Sec. 9901.103.
    Contribution has the meaning given that term in Sec. 9901.103.
    Contribution assessment means the determination made by the pay pool 
manager as to the impact, extent, and scope of contribution that the 
employee's performance made to the accomplishment of the organization's 
mission and goals.
    CONUS or Continental United States means the States of the United 
States, excluding Alaska and Hawaii, but including the District of 
Columbia.
    Extraordinary pay increase or EPI means a discretionary basic pay 
increase or bonus to reward an employee at the highest performance level 
who has been assigned the maximum number of shares available under the 
rating and contribution scheme when the payout formula does not 
adequately compensate them for the employee's extraordinary performance 
and contribution, as described in Sec. 9901.344(b).
    Local market supplement means a geographic- and occupation-based 
supplement to basic pay, as described in Sec. 9901.332.
    Modal rating means, for the purpose of pay administration, the most 
frequent rating of record assigned to employees in the same pay band 
within a particular pay pool for a particular rating cycle.
    Pay band or band has the meaning given that term in Sec. 9901.103.
    Pay pool means the organizational elements/ units or other 
categories of employees that are combined for the purpose of determining 
performance payouts. Each employee is in only one pay pool at a time. 
Pay pool also means the amount designated for performance payouts to 
employees covered by a pay pool.
    Pay schedule has the meaning given that term in Sec. 9901.103.
    Performance has the meaning given that term in Sec. 9901.103.
    Performance payout means the total monetary value of a performance 
pay increase and bonus provided under Sec. 9901.342.
    Performance share means a unit of performance payout awarded to an 
employee based on performance. Performance shares may be awarded in 
multiples commensurate with the employee's performance and contribution 
rating level.
    Performance share value means a calculated value for each 
performance share based on pay pool funds available and the distribution 
of performance shares across employees within a pay pool, expressed as a 
percentage or fixed dollar amount.
    Promotion has the meaning given that term in Sec. 9901.103.
    Rating of record has the meaning given that term in Sec. 9901.103.
    Reassignment has the meaning given that term in Sec. 9901.103.
    Reduction in band has the meaning given that term in Sec. 9901.103.
    Standard local market supplement means the local market supplement 
that applies to employees in a given pay schedule or band who are 
stationed within a specified local market area (the boundaries of which 
are defined under Sec. 9901.332(b)), unless a targeted local market 
supplement applies.
    Targeted local market supplement means a local market supplement 
established to address recruitment or retention difficulties or other 
appropriate reasons and which applies to a defined category of employees 
(based on occupation or other appropriate factors) in lieu of the 
standard local market supplement that would otherwise apply.
    Unacceptable performance has the meaning given that term in Sec. 
9901.103.



Sec. 9901.305  Bar on collective bargaining.

    Pursuant to 5 U.S.C. 9902(f)(4) and (m)(7), any pay program 
established under authority of this subpart is not subject to collective 
bargaining. This bar on collective bargaining applies to all aspects of 
the pay program, including but not limited to coverage decisions, the 
design of pay structures, the setting and adjustment of pay levels, pay 
administration rules and policies, and administrative procedures and 
arrangements.

                         Overview of Pay System



Sec. 9901.311  Major features.

    Through the issuance of implementing issuances, the Secretary will

[[Page 966]]

establish a pay system that governs the setting and adjusting of covered 
employees' rates of pay and the setting of covered employees' rates of 
premium pay. The NSPS pay system will include the following features:
    (a) A structure of rate ranges linked to various pay bands for each 
career group, in alignment with the classification structure described 
in subpart B of this part;
    (b) Policies regarding the setting and adjusting of band rate ranges 
based on mission requirements, labor market conditions, and other 
factors, as described in Sec. Sec. 9901.321 and 9901.322;
    (c) Policies regarding the setting and adjusting of local market 
supplements to basic pay based on local labor market conditions and 
other factors, as described in Sec. Sec. 9901.331 through 9901.333;
    (d) Policies regarding employees' eligibility for pay increases 
based on adjustments in rate ranges and supplements, as described in 
Sec. Sec. 9901.323 and 9901.334;
    (e) Policies regarding performance-based pay, as described in 
Sec. Sec. 9901.341 through 9901.345;
    (f) Policies on basic pay administration, including movement between 
career groups, positions, pay schedules, and pay bands, as described in 
Sec. Sec. 9901.351 through 9901.356;
    (g) Linkages to employees' ratings of record, as described in 
subpart D of this part; and
    (h) Policies regarding the setting of and limitations on premium 
payments, as described in Sec. 9901.361.



Sec. 9901.312  Maximum rates.

    The Secretary will establish limitations on maximum rates of basic 
pay and aggregate pay for covered employees.



Sec. 9901.313  National security compensation comparability.

    (a) To the maximum extent practicable, for fiscal years 2004 through 
2008, the overall amount allocated for compensation of the DoD civilian 
employees who are included in the NSPS may not be less than the amount 
that would have been allocated for compensation of such employees for 
such fiscal years if they had not been converted to the NSPS, based on 
at a minimum--
    (1) The number and mix of employees in such organizational or 
functional units prior to conversion of such employees to the NSPS; and
    (2) Adjustments for normal step increases and rates of promotion 
that would have been expected, had such employees remained in their 
previous pay schedule.
    (b) To the maximum extent practicable, implementing issuances will 
provide a formula for calculating the overall amount to be allocated for 
fiscal years beyond fiscal year 2008 for compensation of the civilian 
employees included in the NSPS. The formula will ensure that in the 
aggregate employees are not disadvantaged in terms of the overall amount 
of compensation available as a result of conversion to the NSPS, while 
providing flexibility to accommodate changes in the function of the 
organization and other changed circumstances that might impact 
compensation levels.
    (c) For the purpose of this section, ``compensation'' for civilian 
employees means basic pay, taking into account any applicable locality 
payment under 5 U.S.C. 5304, special rate supplement under 5 U.S.C. 
5305, local market supplement under Sec. 9901.332, or similar payment 
under other legal authority.

                    Setting and Adjusting Rate Ranges



Sec. 9901.321  Structure.

    (a) The Secretary will establish ranges of basic pay for pay bands, 
with minimum and maximum rates set and adjusted as provided in Sec. 
9901.322.
    (b) For each pay band within a career group, the Secretary will 
establish a common rate range that applies in all locations.



Sec. 9901.322  Setting and adjusting rate ranges.

    (a) Within his or her sole and exclusive discretion, the Secretary 
may, subject to Sec. 9901.105(d)(2), set and adjust the rate ranges 
established under Sec. 9901.321. In determining the rate ranges, the 
Secretary may consider mission requirements, labor market conditions, 
availability of funds, pay adjustments received by employees of

[[Page 967]]

other Federal agencies, and any other relevant factors.
    (b) The Secretary may determine the effective date of newly set or 
adjusted band rate ranges. Established rate ranges will be reviewed for 
possible adjustment at least annually.
    (c) The Secretary may establish different rate ranges and provide 
different rate range adjustments for different pay bands.
    (d) The Secretary may adjust the minimum and maximum rates of a pay 
band by different percentages.



Sec. 9901.323  Eligibility for pay increase associated with a rate range adjustment.

    (a) Employees with a current rating of record above ``unacceptable'' 
and employees who do not have a current rating of record for the most 
recently completed appraisal period will receive a percentage increase 
in basic pay equal to the percentage by which the minimum of their rate 
range is increased. This section does not apply to employees receiving a 
retained rate under Sec. 9901.355.
    (b) Employees with a current rating of record of ``unacceptable'' 
will not receive a pay increase under this section.

                        Local Market Supplements



Sec. 9901.331  General.

    The basic pay ranges established under Sec. Sec. 9901.321 through 
9901.323 may be supplemented in appropriate circumstances by local 
market supplements, as described in Sec. Sec. 9901.332, 9901.333, and 
9901.334. These supplements are expressed as a percentage of basic pay 
and are set and adjusted as described in Sec. 9901.333.



Sec. 9901.332  Local market supplements.

    (a) The Secretary may establish local market supplements that apply 
in specified local market areas whose boundaries are set at the 
Secretary's sole and exclusive discretion, subject to paragraph (b) of 
this section and Sec. 9901.105(d)(4). Local market supplements apply to 
employees whose official duty station is located in the given local 
market area. The Secretary may establish standard or targeted local 
market supplements.
    (b)(1) The establishment or modification of geographic area 
boundaries for standard local market supplements by the Secretary will 
be effected by regulations which, notwithstanding 5 U.S.C. 553(a)(2), 
will be promulgated in accordance with the notice and comment 
requirements of 5 U.S.C. 553. As provided by the non-waived provisions 
of 5 U.S.C. 5304(f)(2) (modified here to apply to DoD regulations issued 
under the authority of this paragraph), judicial review of any such 
regulation is limited to whether or not it was promulgated in accordance 
with such requirements.
    (2) Notwithstanding paragraph (b)(1) of this section, the 
Secretary's establishment of a standard local market area boundary or 
boundaries identical to those used for locality pay areas established 
under 5 U.S.C. 5304 does not require separate DoD regulations.
    (c) Local market supplements are considered basic pay for only the 
following purposes:
    (1) Retirement deductions, contributions, and benefits under 5 
U.S.C. chapter 83 or 84;
    (2) Life insurance premiums and benefits under 5 U.S.C. chapter 87;
    (3) Premium pay under 5 U.S.C. chapter 55, subchapter V, or similar 
payments under other legal authority, including this subpart;
    (4) Severance pay under 5 U.S.C. 5595;
    (5) Cost-of-living allowances and post differentials under 5 U.S.C. 
5941;
    (6) Overseas allowances and differentials under 5 U.S.C. chapter 59, 
subchapter III, to the extent authorized by the Department of State;
    (7) Recruitment, relocation, and retention incentives, supervisory 
differentials, and extended assignment incentives under 5 U.S.C. chapter 
57, subchapter IV, and 5 CFR part 575;
    (8) Lump-sum payments for accumulated and accrued annual leave under 
5 CFR 550, subpart L;
    (9) Determining the rate of basic pay upon conversion to the NSPS 
pay system as provided in Sec. 9901.373(b);
    (10) Other payments and adjustments authorized under this subpart as 
specified by implementing issuances;

[[Page 968]]

    (11) Other payments and adjustments under other statutory or 
regulatory authority for which locality-based comparability payments 
under 5 U.S.C. 5304 are considered part of basic pay; and
    (12) Any provisions for which DoD local market supplements are 
treated as basic pay by law.



Sec. 9901.333  Setting and adjusting local market supplements.

    (a) Within his or her sole and exclusive discretion, the Secretary 
may, subject to Sec. 9901.105(d)(3), set and adjust local market 
supplements. In determining the amounts of the supplements, the 
Secretary will consider mission requirements, labor market conditions, 
availability of funds, pay adjustments received by employees of other 
Federal agencies, allowances and differentials under 5 U.S.C. chapter 
59, and any other relevant factors.
    (b) The Secretary may determine the effective date of newly set or 
adjusted local market supplements. Established supplements will be 
reviewed for possible adjustment at least annually in conjunction with 
rate range adjustments under Sec. 9901.322.



Sec. 9901.334  Eligibility for pay increase associated with a supplement adjustment.

    (a) When a local market supplement is adjusted under Sec. 9901.333, 
employees to whom the supplement applies with a current rating of record 
above ``unacceptable,'' and employees who do not have a current rating 
of record for the most recently completed appraisal period, will receive 
any pay increase resulting from that adjustment.
    (b) Employees with a current rating of record of ``unacceptable'' 
will not receive a pay increase under this section.

                          Performance-Based Pay



Sec. 9901.341  General.

    Sections 9901.342 through 9901.345 describe the performance-based 
pay that is part of the pay system established under this subpart. These 
provisions are designed to provide the Secretary with the flexibility to 
allocate available funds to employees based on individual performance or 
contribution or team or organizational performance as a means of 
fostering a high-performance culture that supports mission 
accomplishment.



Sec. 9901.342  Performance payouts.

    (a) Overview. (1) The NSPS pay system will be a pay-for-performance 
system and, when implemented, will result in a distribution of available 
performance pay funds based upon individual performance, individual 
contribution, team or organizational performance, or a combination of 
those elements. The NSPS pay system will use a pay pool concept to 
manage, control, and distribute performance-based pay increases and 
bonuses. The performance payout is a function of the amount of money in 
the performance pay pool and the number of shares assigned to individual 
employees.
    (2) The rating of record used as the basis for a performance pay 
increase is the one assigned for the most recently completed appraisal 
period, except that if an appropriate rating official determines that an 
employee's current performance is inconsistent with that rating, that 
rating official may prepare a more current rating of record, consistent 
with Sec. 9901.409(b). Unless otherwise provided in implementing 
issuances, if an employee is not eligible to have a rating of record for 
the current rating cycle for reasons other than those identified in 
paragraphs (f) and (g) of this section, such employee will not be 
eligible for a performance payout under this part.
    (3) Pay pools will be managed by a pay pool manager and/or pay pool 
panel. The Secretary will define in implementing issuances the 
responsibilities of pay pool managers and pay pool panels to include the 
review of proposed rating and share assignments to ensure that employees 
are treated fairly and consistently and in accordance with the merit 
system principles.
    (b) Performance pay pools. (1) The Secretary will issue implementing 
issuances for the establishment and management of pay pools for 
performance payouts.
    (2) The Secretary may determine a percentage of pay to be included 
in pay pools and paid out in accordance with accompanying implementing 
issuances as--

[[Page 969]]

    (i) A performance-based pay increase;
    (ii) A performance-based bonus; or
    (iii) A combination of a performance-based pay increase and a 
performance-based bonus.
    (c) Performance shares. (1) The Secretary will issue implementing 
issuances regarding the assignment of a number or range of shares for 
each rating of record level, subject to paragraphs (c)(2) and (c)(3) of 
this section. Performance shares will be used to determine performance 
pay increases and/or bonuses.
    (2) Employees with unacceptable ratings of record will be assigned 
zero shares.
    (3) Where the Secretary establishes a range of shares for a rating 
of record level, he or she will provide guidance in implementing 
issuances on the use of share ranges. DoD organizations will notify 
employees at least 90 days prior to the end of the appraisal period of 
the factors that may be considered in making specific share assignments. 
Pay pool managers and/or pay pool panels will review proposed share 
assignments to ensure that factors are applied consistently across the 
pay pool and in accordance with the merit system principles.
    (d) Performance payout. (1) The Secretary will establish a 
methodology that authorized officials will use to determine the value of 
a performance share. A performance share may be expressed as a 
percentage of an employee's rate of basic pay (exclusive of local market 
supplements under Sec. 9901.332) or as a fixed dollar amount, or both.
    (2) To determine an individual employee's performance payout, the 
share value determined under paragraph (d)(1) of this section will be 
multiplied by the number of performance shares assigned to the employee.
    (3) The Secretary may provide for the establishment of control 
points within a band that limit increases in the rate of basic pay. The 
Secretary may require that certain criteria be met for increases above a 
control point.
    (4) A performance payout may be an increase in basic pay, a bonus, 
or a combination of the two. However, an increase in basic pay may not 
cause the employee's rate of basic pay to exceed the maximum rate or 
applicable control point of the employee's band rate range. Implementing 
issuances will provide guidance for determining the payout amount and 
the appropriate distribution between basic pay and bonus.
    (5) The Secretary will determine the effective date(s) of increases 
in basic pay made under this section.
    (6) Notwithstanding any other provision of this section, the 
Secretary will issue implementing issuances to address the circumstances 
under which an employee receiving a retained rate under Sec. 9901.355 
may receive a lump-sum performance payout. Any performance payout in the 
form of a bonus for a retained rate employee may not exceed the amount 
that would be received by an employee in the same pay pool with the same 
rating of record whose rate of pay is at the maximum rate of the same 
band.
    (e) Proration of performance payouts. The Secretary will issue 
implementing issuances regarding the proration of performance payouts 
for employees who, during the period between performance payouts, are--
    (1) Hired, transferred, reassigned, or promoted;
    (2) In a leave-without-pay status (except as provided in paragraphs 
(f) and (g) of this section); or
    (3) In other circumstances where prorating is considered 
appropriate.
    (f) Adjustments for employees returning after performing honorable 
service in the uniformed services. The Secretary will issue implementing 
issuances regarding how to set the rate of basic pay prospectively for 
an employee who leaves a DoD position to perform service in the 
uniformed services (in accordance with 38 U.S.C. 4303 and 5 CFR 353.102) 
and returns through the exercise of a reemployment right provided by 
law, Executive order, or regulation under which accrual of service for 
seniority-related benefits is protected (e.g., 38 U.S.C. 4316). The 
Secretary will credit the employee with increases under Sec. 9901.323 
and increases to basic pay under this section based on the employee's 
DoD rating of record for the appraisal period upon which these 
adjustments are based. If an employee does not have a rating of record 
for the appraisal period serving as a basis for

[[Page 970]]

these adjustments, the Secretary will base such adjustments on the 
average basic pay increases granted to other employees in the same pay 
pool and pay band who received the same rating as the employee's last 
DoD rating of record or the modal rating, whichever is most advantageous 
to the employee. In unusual cases where insufficient statistical 
information exists to determine the modal rating or when previous 
ratings do not convert to the NSPS rating scale, the Secretary may 
establish alternative procedures for determining a basic pay increase 
under this section.
    (g) Adjustments for employees returning to duty after being in 
workers' compensation status. The Secretary will issue implementing 
issuances regarding how to set the rate of basic pay prospectively for 
an employee who returns to duty after a period of receiving injury 
compensation under 5 U.S.C. chapter 81, subchapter I (in a leave-
without-pay status or as a separated employee). For the intervening 
period, the Secretary will credit the employee with increases under 
Sec. 9901.323 and increases to basic pay under this section based on 
the employee's DoD rating of record for the appraisal period upon which 
these adjustments are based. If an employee does not have a rating of 
record for the appraisal period serving as a basis for these 
adjustments, such adjustments will be based on the average basic pay 
increases granted to other employees in the same pay pool and pay band 
who received the same rating as the employee's last DoD rating of record 
or the modal rating, whichever is most advantageous to the employee. In 
unusual cases where insufficient statistical information exists to 
determine the modal rating or when previous ratings do not convert to 
the NSPS rating scale, the Secretary may establish alternative 
procedures for determining a basic pay increase under this section.



Sec. 9901.343  Pay reduction based on unacceptable performance and/or conduct.

    An employee's rate of basic pay may be reduced based on a 
determination of unacceptable performance, conduct, or both. Such 
reduction may not exceed 10 percent unless the employee has been changed 
to a lower pay band and a greater reduction is needed to set the 
employee's pay at the maximum rate of the pay band. (See also Sec. Sec. 
9901.352 and 9901.354.) An employee's rate of basic pay may not be 
reduced more than once in a 12-month period based on unacceptable 
performance, conduct, or both.



Sec. 9901.344  Other performance payments.

    (a) In accordance with implementing issuances authorized officials 
may make other payments to--
    (1) Recognize organizational or team achievement;
    (2) Reward extraordinary individual performance through an 
extraordinary pay increase (EPI), as described in paragraph (b) of this 
section; and
    (3) Provide for other special circumstances.
    (b) An EPI is paid in addition to performance payouts under Sec. 
9901.342 and will usually be made effective at the time of those 
payouts. The future performance and contribution level exhibited by the 
employee will be expected to continue at an extraordinarily high level.



Sec. 9901.345  Treatment of developmental positions.

    The Secretary may issue implementing issuances regarding pay 
increases for developmental positions. These issuances may require 
employees to meet certain standardized assessment or certification 
points as part of a formal training/developmental program. The Secretary 
may provide adjustments under this section in lieu of or in addition to 
adjustments under Sec. 9901.342.

                           Pay Administration



Sec. 9901.351  Setting an employee's starting pay.

    Subject to implementing issuances, the Secretary may set the 
starting rate of pay for individuals who are newly appointed or 
reappointed to the Federal service anywhere within the assigned pay 
band.

[[Page 971]]



Sec. 9901.352  Setting pay upon reassignment.

    (a) Subject to paragraphs (b) and (c) of this section and subject to 
implementing issuances, the Secretary may set pay anywhere within the 
assigned pay band when an employee is reassigned, either voluntarily or 
involuntarily, to a position in the same or comparable pay band.
    (b) Subject to the adverse action procedures set forth in subpart G 
of this part and implementing issuances (or other appropriate adverse 
action procedures for employees not covered by subpart G of this part, 
such as procedures for National Guard Technicians under 32 U.S.C. 
709(f)), the Secretary may reduce an employee's rate of basic pay within 
a pay band for unacceptable performance and/or conduct. A reduction in 
pay under this paragraph may not be more than 10 percent or cause an 
employee's rate of basic pay to fall below the minimum rate of the 
employee's pay band. Such a reduction may be made effective at any time.
    (c) The Secretary will prescribe policies in implementing issuances 
regarding setting pay for an employee whose pay is reduced 
involuntarily, but not through adverse action procedures. In the case of 
completion of a temporary reassignment or failure to successfully 
complete an in-service probationary period, the employee's rate of basic 
pay will be set at the same rate the employee received prior to the 
temporary reassignment or placement in the position requiring the 
probationary period, with appropriate adjustment of the employee's rate 
of basic pay based on rate range increases or performance payouts that 
occurred during the time the employee was assigned to the new position. 
Any resulting reduction in basic pay is not considered an adverse action 
under subpart G of this part (or similar authority).



Sec. 9901.353  Setting pay upon promotion.

    Except as otherwise provided in implementing issuances, upon an 
employee's promotion, the employee will receive an increase in his or 
her rate of basic pay equal to at least 6 percent, unless this minimum 
increase results in a rate of basic pay higher than the maximum rate of 
the applicable pay band. An employee's rate of basic pay upon promotion 
may not be less than the minimum of the rate range.



Sec. 9901.354  Setting pay upon reduction in band.

    (a) Subject to paragraphs (b) and (c) of this section, pay may be 
set anywhere within the assigned pay band when an employee is reduced in 
band, either voluntarily or involuntarily. As applicable, pay retention 
provisions established under Sec. 9901.355 will apply.
    (b) Subject to the adverse action procedures set forth in subpart G 
of this part (or other appropriate adverse action procedures for 
employees not covered by subpart G of this part, such as procedures for 
National Guard Technicians under 32 U.S.C. 709(f)), the Secretary may 
assign an employee involuntarily to a position in a lower pay band for 
unacceptable performance and/or conduct, and may simultaneously reduce 
the employee's rate of basic pay. A reduction in basic pay under this 
paragraph may not cause an employee's rate of basic pay to fall below 
the minimum rate of the employee's new pay band, or be more than 10 
percent unless a larger reduction is needed to place the employee at the 
maximum rate of the lower band.
    (c) The Secretary will prescribe policies in implementing issuances 
regarding setting pay for an employee who is reduced in band 
involuntarily, but not through adverse action procedures. In the case of 
termination of a temporary promotion or failure to successfully complete 
an in-service probationary period, the employee's rate of basic pay will 
be set at the same rate the employee received prior to the temporary 
promotion or placement in the position requiring the probationary 
period, with appropriate adjustment of the employee's rate of basic pay 
based on rate range increases or performance payouts that occurred 
during the time the employee was assigned to the new position. Any 
resulting reduction in basic pay is not considered an adverse action 
under subpart G of this part (or similar authority).



Sec. 9901.355  Pay retention.

    (a) Subject to the requirements of this section, the Secretary will 
issue

[[Page 972]]

implementing issuances regarding pay retention. Pay retention prevents a 
reduction in basic pay that would otherwise occur by preserving the 
former rate of basic pay within the employee's new pay band or by 
establishing a retained rate that exceeds the maximum rate of the new 
pay band. Local market supplements are not considered part of basic pay 
in applying pay retention.
    (b) Pay retention will be based on the employee's rate of basic pay 
in effect immediately before the action that would otherwise reduce the 
employee's rate. A retained rate will be compared to the range of rates 
of basic pay applicable to the employee's position.
    (c) Subject to any employee eligibility requirements the Secretary 
may prescribe, pay retention will apply when an employee is reduced in 
band through reduction in force (RIF), reclassification, or other 
appropriate circumstances, as specified in implementing issuances. Pay 
retention will be granted for a period of 2 years (that is, 104 weeks).
    (d) Employees entitled to a retained rate will receive any 
performance payouts in the form of bonuses, rather than salary 
adjustments, as provided in Sec. 9901.342(d)(6).
    (e) Employees entitled to a retained rate will not receive minimum 
rate range adjustments under Sec. 9901.323(a), but are entitled to 
receive any applicable local market supplement adjustments under Sec. 
9901.334(a).



Sec. 9901.356  Miscellaneous.

    (a) Except in the case of an employee who does not receive a pay 
increase under Sec. 9901.323 because of an unacceptable rating of 
record, an employee's rate of basic pay may not be less than the minimum 
rate of the employee's pay band.
    (b) Except as provided in Sec. 9901.355, an employee's rate of 
basic pay may not exceed the maximum rate of the employee's band rate 
range.
    (c) The Secretary will follow the rules for establishing pay periods 
and computing rates of pay in 5 U.S.C. 5504 and 5505, as applicable. For 
employees covered by 5 U.S.C. 5504, annual rates of pay will be 
converted to hourly rates of pay in computing payments received by 
covered employees.
    (d) The Secretary may promulgate implementing issuances that provide 
for a special increase prior to an employee's movement in recognition of 
the fact that the employee will not be eligible for a promotion increase 
under the GS system, if a DoD employee moves from the pay system 
established under this subpart to a GS position having a higher level of 
duties and responsibilities.

                               Premium Pay



Sec. 9901.361  General.

    (a) This section applies to eligible DoD employees and positions 
which would otherwise be covered by 5 U.S.C. chapter 55, subchapter V, 
subject to a determination by the Secretary under Sec. 9901.102(b)(2). 
As provided in Sec. 9901.303(a)(2), for employees covered by such a 
determination, the provisions of 5 U.S.C. chapter 55, subchapter V 
(except section 5545b), are waived or modified to the extent that the 
Secretary establishes alternative premium pay provisions for such 
employees in lieu of the provisions in 5 U.S.C. chapter 55, subchapter 
V.
    (b) The Secretary may establish alternative or additional forms of 
premium pay, or make modifications in premium payments under 5 U.S.C. 
chapter 55, subchapter V (except section 5545b), for specified 
categories of employees through implementing issuances. The types of 
premium payments the Secretary may establish or modify include, but are 
not limited to--
    (1) Overtime pay (excluding overtime pay under the Fair Labor 
Standards Act);
    (2) Compensatory time off;
    (3) Sunday, holiday, and night pay;
    (4) Annual premium pay for standby duty and administratively 
uncontrollable overtime work;
    (5) Availability pay for criminal investigators; and
    (6) Hazardous duty differentials.
    (c) The Secretary will determine the conditions of eligibility for 
the amounts of and the limitations on payments made under the authority 
of this section.

[[Page 973]]

                          Conversion Provisions



Sec. 9901.371  General.

    (a) This section and Sec. Sec. 9901.372 and 9901.373 describe the 
provisions that apply when DoD employees are converted to the NSPS pay 
system established under this subpart. An affected employee may convert 
from the GS system, a prevailing rate system, the SL/ST system, or the 
SES system (or such other systems designated by the Secretary as DoD may 
be authorized to include under 5 U.S.C. 9902), as provided in Sec. 
9901.302. For the purpose of this section and Sec. Sec. 9901.372 and 
9901.373, the terms ``convert,'' ``converted,'' ``converting,'' and 
``conversion'' refer to employees who become covered by the pay system 
without a change in position (as a result of a coverage determination 
made under Sec. 9901.102(b)(2)) and exclude employees who move from a 
noncovered position to a position already covered by the NSPS pay 
system.
    (b) The Secretary will issue implementing issuances prescribing the 
policies and procedures necessary to implement these transitional 
provisions.



Sec. 9901.372  Creating initial pay ranges.

    DoD will set the initial band rate ranges for the NSPS pay system 
established under this subpart. The initial ranges may link to the 
ranges that apply to converted employees in their previously applicable 
pay system (taking into account any applicable locality payment under 5 
U.S.C. 5304, special rate supplement under 5 U.S.C. 5305, local market 
supplement under Sec. 9901.332, or similar payment under other legal 
authority).



Sec. 9901.373  Conversion of employees to the NSPS pay system.

    (a) When the NSPS pay system is established under this subpart and 
applied to a category of employees, employees will be converted to the 
system without a reduction in their rate of pay (including basic pay and 
any applicable locality payment under 5 U.S.C. 5304, special rate 
supplement under 5 U.S.C. 5305, local market supplement under Sec. 
9901.332, or similar payment under other legal authority).
    (b) When an employee receiving a special rate under 5 U.S.C. 5305 
before conversion is converted to an equal rate of pay under the NSPS 
pay system that consists of a basic rate and a local market supplement, 
the conversion is not a reduction in pay for the purpose of applying 
subpart G of this part (or similar authority).
    (c) If another personnel action (e.g., promotion, geographic 
movement) takes effect on the same day as the effective date of an 
employee's conversion to the new pay system, the other action will be 
processed under the rules pertaining to the employee's former system 
before processing the conversion action.
    (d) An employee on a temporary promotion at the time of conversion 
will be returned to his or her official position of record prior to 
processing the conversion. If the employee is temporarily promoted 
immediately after the conversion, pay will be set under the rules for 
promotion increases under the NSPS pay system.
    (e) The Secretary has discretion to make one-time pay adjustments 
for employees when they are converted to the NSPS pay system. The 
Secretary will issue implementing issuances governing any such pay 
adjustment, including rules governing employee eligibility, pay 
computations, and the timing of any such pay adjustment.



                    Subpart D_Performance Management



Sec. 9901.401  Purpose.

    (a) This subpart provides for the establishment in DoD of a 
performance management system as authorized by 5 U.S.C. 9902.
    (b) The performance management system established under this subpart 
is designed to promote and sustain a high-performance culture by 
incorporating the following elements:
    (1) Adherence to merit principles set forth in 5 U.S.C. 2301;
    (2) A fair, credible, and transparent employee performance appraisal 
system;
    (3) A link between the performance management system and DoD's 
strategic plan;

[[Page 974]]

    (4) A means for ensuring employee involvement in the design and 
implementation of the system;
    (5) Adequate training and retraining for supervisors, managers, and 
employees in the implementation and operation of the performance 
management system;
    (6) A process for ensuring ongoing performance feedback and dialogue 
among supervisors, managers, and employees throughout the appraisal 
period, and setting timetables for review;
    (7) Effective safeguards to ensure that the management of the system 
is fair and equitable and based on employee performance;
    (8) A means for ensuring that adequate agency resources are 
allocated for the design, implementation, and administration of the 
performance management system; and
    (9) A pay-for-performance evaluation system to better link 
individual pay to performance, and provide an equitable method for 
appraising and compensating employees.



Sec. 9901.402  Coverage.

    (a) This subpart applies to eligible DoD employees and positions in 
the categories listed in paragraph (b) of this section, subject to a 
determination by the Secretary under Sec. 9901.102(b)(2), except as 
provided in paragraph (c) of this section.
    (b) The following employees and positions in DoD organizational and 
functional units are eligible for coverage under this subpart:
    (1) Employees and positions who would otherwise be covered by 5 
U.S.C. chapter 43;
    (2) Employees and positions who were excluded from chapter 43 by OPM 
under 5 CFR 430.202(d) prior to the date of coverage of this subpart; 
and
    (3) Such others designated by the Secretary as DoD may be authorized 
to include under 5 U.S.C. 9902.
    (c) This subpart does not apply to employees who have been, or are 
expected to be, employed in an NSPS position for less than a minimum 
period (as defined in Sec. 9901.404) during a single 12-month period.



Sec. 9901.403  Waivers.

    When a specified category or group of employees is covered by the 
performance management system(s) established under this subpart, the 
provisions of 5 U.S.C. chapter 43 are waived with respect to that 
category of employees.



Sec. 9901.404  Definitions.

    In this subpart--
    Appraisal means the review and evaluation of an employee's 
performance.
    Appraisal period means the period of time established under a 
performance management system for reviewing employee performance.
    Competencies has the meaning given that term in Sec. 9901.103.
    Contribution has the meaning given that term in Sec. 9901.103.
    Minimum period means the period of time established by the Secretary 
during which an employee will perform under applicable performance 
expectations before receiving a rating of record.
    Pay-for-performance evaluation system means the performance 
management system established under this subpart to link individual pay 
to performance and provide an equitable method for appraising and 
compensating employees.
    Performance has the meaning given that term in Sec. 9901.103.
    Performance expectations means the duties, responsibilities, and 
competencies required by, or objectives associated with, an employee's 
position and the contributions and demonstrated competencies management 
expects of an employee, as described in Sec. 9901.406(d).
    Performance management means applying the integrated processes of 
setting and communicating performance expectations, monitoring 
performance and providing feedback, developing performance and 
addressing poor performance, and rating and rewarding performance in 
support of the organization's goals and objectives.
    Performance management system means the policies and requirements 
established under this subpart, as supplemented by implementing 
issuances, for setting and communicating employee performance 
expectations, monitoring

[[Page 975]]

performance and providing feedback, developing performance and 
addressing poor performance, and rating and rewarding performance. It 
incorporates the elements set forth in Sec. 9901.401(b).
    Rating of record has the meaning given that term in Sec. 9901.103.
    Unacceptable performance has the meaning given that term in Sec. 
9901.103.



Sec. 9901.405  Performance management system requirements.

    (a) The Secretary will issue implementing issuances that establish a 
performance management system for DoD employees, subject to the 
requirements set forth in this subpart.
    (b) The NSPS performance management system will--
    (1) Specify the employees covered by the system(s);
    (2) Provide for the appraisal of the performance of each employee at 
least annually;
    (3) Specify the minimum period during which an employee will perform 
before being eligible to receive a rating of record;
    (4) Hold supervisors and managers accountable for effectively 
managing the performance of employees under their supervision as set 
forth in paragraph (c) of this section;
    (5) Specify procedures for setting and communicating performance 
expectations, monitoring performance and providing feedback, and 
developing, rating, and rewarding performance; and
    (6) Specify the criteria and procedures to address the performance 
of employees who are detailed or transferred and for employees in other 
special circumstances.
    (c) In fulfilling the requirements of paragraph (b) of this section, 
supervisors and managers are responsible for--
    (1) Clearly communicating performance expectations and holding 
employees responsible for accomplishing them;
    (2) Making meaningful distinctions among employees based on 
performance and contribution;
    (3) Fostering and rewarding excellent performance;
    (4) Addressing poor performance; and
    (5) Assuring that employees are assigned a rating of record when 
required by implementing issuances.



Sec. 9901.406  Setting and communicating performance expectations.

    (a) Performance expectations will support and align with the DoD 
mission and its strategic goals, organizational program and policy 
objectives, annual performance plans, and other measures of performance.
    (b) Performance expectations will be communicated in writing, 
including those that may affect an employee's retention in the job. 
Performance expectations will be communicated to the employee prior to 
holding the employee accountable for them. However, notwithstanding this 
requirement, employees are always accountable for demonstrating 
professionalism and standards of appropriate conduct and behavior, such 
as civility and respect for others.
    (c) Performance expectations for supervisors and managers will 
include assessment and measurements of how well supervisors and managers 
plan, monitor, develop, correct, and assess subordinate employees' 
performance.
    (d) Performance expectations may include--
    (1) Goals or objectives that set general or specific performance 
targets at the individual, team, and/or organizational level;
    (2) Organizational, occupational, or other work requirements, such 
as standard operating procedures, operating instructions, manuals, 
internal rules and directives, and/or other instructions that are 
generally applicable and available to the employee; and
    (3) Competencies an employee is expected to demonstrate on the job, 
and/or the contributions an employee is expected to make.
    (e) Performance expectations may be amplified through particular 
work assignments or other instructions (which may specify the quality, 
quantity, accuracy, timeliness, or other expected characteristics of the 
completed assignment, or some combination of such characteristics). Such 
assignments and instructions need not be in writing.

[[Page 976]]

    (f) Supervisors will involve employees, insofar as practicable, in 
the development of their performance expectations. However, final 
decisions regarding performance expectations are within the sole and 
exclusive discretion of management.



Sec. 9901.407  Monitoring performance and providing feedback.

    In applying the requirements of the performance management system 
and its implementing issuances and policies, supervisors will--
    (a) Monitor the performance of their employees and their 
contribution to the organization; and
    (b) Provide ongoing (i.e., regular and timely) feedback to employees 
on their actual performance with respect to their performance 
expectations, including one or more interim performance reviews during 
each appraisal period.



Sec. 9901.408  Developing performance and addressing poor performance.

    (a) Implementing issuances will prescribe procedures that 
supervisors will use to develop employee performance and to address poor 
performance.
    (b) If at any time during the appraisal period a supervisor 
determines that an employee's performance is unacceptable, the 
supervisor will--
    (1) Consider the range of options available to address the 
performance deficiency, which include, but are not limited to, remedial 
training, an improvement period, a reassignment, an oral warning, a 
letter of counseling, a written reprimand, or adverse action as defined 
in subpart G of this part, including a reduction in rate of basic pay or 
pay band; and
    (2) Take appropriate action to address the deficiency, taking into 
account the circumstances, including the nature and gravity of the 
unacceptable performance and its consequences.
    (c) As specified in subpart H of this part (or other appropriate 
appeal procedures, if not covered by subpart H of this part, such as 
procedures for National Guard Technicians under 32 U.S.C. 709(f)), 
employees may appeal adverse actions (e.g., suspensions of more than 14 
days, reductions in pay and pay band, and removal) based on unacceptable 
performance and/or conduct.



Sec. 9901.409  Rating and rewarding performance.

    (a) The NSPS performance management system will establish a multi-
level rating system as described in the implementing issuances.
    (b) An appropriate rating official will prepare and issue a rating 
of record after the completion of the appraisal period. In accordance 
with implementing issuances, an additional rating of record may be 
issued to reflect a substantial and sustained change in the employee's 
performance since the last rating of record. A rating of record will be 
used as a basis for--
    (1) A pay determination under any applicable pay rules;
    (2) Determining reduction in force retention standing; and
    (3) Such other action that the Secretary considers appropriate, as 
specified in implementing issuances.
    (c) A rating of record will assess an employee's performance with 
respect to his or her performance expectations, as amplified through 
work assignments or other instructions, and/or relative contributions 
and is considered final when issued to the employee with all appropriate 
reviews and signatures.
    (d) An appropriate rating official will communicate the rating of 
record and number of shares to the employee prior to payout.
    (e) A rating of record issued under this subpart is an official 
rating of record for the purpose of any provision of title 5, Code of 
Federal Regulations, for which an official rating of record is required. 
Ratings of record will be transferred between subordinate organizations 
and to other Federal departments or agencies in accordance with 
implementing issuances.
    (f) The Secretary may not lower the rating of record of an employee 
based on an approved absence from work, including the absence of a 
disabled veteran to seek medical treatment as provided in Executive 
Order 5396.
    (g) A rating of record may be challenged by a nonbargaining unit 
employee only through a reconsideration process as provided in 
implementing issuances. This process will be the sole

[[Page 977]]

and exclusive method for all nonbargaining unit employees to challenge a 
rating of record. A payout determination will not be subject to the 
reconsideration process.
    (h) A bargaining unit employee may choose a negotiated grievance 
procedure or the administrative reconsideration process established 
under paragraph (g) of this section, but not both, to challenge his or 
her rating of record. An employee who chooses the administrative 
reconsideration process may not revert to a negotiated grievance 
procedure. A payout determination will not be subject to the negotiated 
grievance procedure. Any individual or panel reviewing a rating of 
record under a negotiated grievance procedure may not conduct an 
independent evaluation of the employee's performance, determine the 
appropriate share payout, or otherwise substitute his or her judgment 
for that of the rating official.
    (i) A supervisor or other rating official may prepare an additional 
performance appraisal for the purposes specified in the applicable 
performance management system (e.g., transfers and details) at any time 
after the completion of the minimum period. Such an appraisal is not a 
rating of record.
    (j) Implementing issuances will establish policies and procedures 
for crediting performance in a reduction in force in accordance with 
subpart F of this part (or other appropriate workforce shaping 
procedures for those not covered by subpart F of this part, such as 
National Guard Technicians under 32 U.S.C. 709).



                    Subpart E_Staffing and Employment

                                 General



Sec. 9901.501  Purpose.

    (a) This subpart sets forth policies and procedures for the 
establishment of qualification requirements; recruitment for, and 
appointment to, positions; and assignment, reassignment, detail, 
transfer, or promotion of employees, consistent with 5 U.S.C. 9902(a) 
and (k).
    (b) The Secretary will comply with merit principles set forth in 5 
U.S.C. 2301 and with 5 U.S.C. 2302 (dealing with prohibited personnel 
practices).
    (c) The Secretary will adhere to veterans' preference principles set 
forth in 5 U.S.C. 2302(b)(11), consistent with 5 U.S.C. 9902(a) and (k).



Sec. 9901.502  Scope of authority.

    When a specified category of employees, applicants, and positions is 
covered by the system established under this subpart, the provisions of 
5 U.S.C. 3301, 3302, 3304, 3317(a), 3318 and 3319 (except with respect 
to veterans' preference), 3321, 3324, 3325, 3327, 3330, 3341, and 
5112(a) are modified and replaced with respect to that category, except 
as otherwise specified in this subpart. In accordance with Sec. 
9901.105, the Secretary will prescribe implementing issuances to carry 
out the provisions of this subpart.



Sec. 9901.503  Coverage.

    (a) This subpart applies to eligible DoD employees and positions in 
the categories listed in paragraph (b) of this section, subject to a 
determination by the Secretary under Sec. 9901.102(b).
    (b) The following employees and positions in DoD organizational and 
functional units are eligible for coverage under this subpart:
    (1) Employees and positions who would otherwise be covered by 5 
U.S.C. chapters 31 and 33 (excluding members of the Senior Executive 
Service); and
    (2) Such others designated by the Secretary as DoD may be authorized 
to include under 5 U.S.C. 9902.



Sec. 9901.504  Definitions.

    In this subpart--
    Career employee means an individual appointed without time limit to 
a competitive or excepted service position in the Federal career 
service.
    Initial probationary period has the meaning given that term in Sec. 
9901.103.
    In-service probationary period has the meaning given that term in 
Sec. 9901.103.
    Promotion has the meaning given that term in Sec. 9901.103.
    Reassignment has the meaning given that term in Sec. 9901.103.
    Reduction in band has the meaning given that term in Sec. 9901.103.
    Temporary employee means an individual not on a career appointment

[[Page 978]]

who is employed for a limited period of time not to exceed 1 year. The 
appointment may be extended, up to a maximum established by implementing 
issuances, to perform the work of a position that does not require an 
additional permanent employee.
    Term employee means an individual not on a career appointment who is 
employed for a period of more than 1 year up to a maximum established by 
implementing issuances, when the need for an employee's service is not 
permanent.
    Time-limited employee means an individual appointed to a position 
for a period of limited duration (e.g., term or temporary) in either the 
competitive or excepted service.

               External Recruitment and Internal Placement



Sec. 9901.511  Appointing authorities.

    (a) Competitive and excepted appointing authorities. The Secretary 
may continue to use excepted and competitive appointing authorities and 
entitlements under chapters 31 and 33 of title 5, U.S. Code, 
Governmentwide regulations, or Executive orders, as well as other 
statutes, and those individuals will be given career or time-limited 
appointments, as appropriate.
    (b) Additional appointing authorities. (1) The Secretary and the 
Director may enter into written agreements providing for new excepted 
and competitive appointing authorities for positions covered by the 
National Security Personnel System, including noncompetitive 
appointments, and excepted appointments that may lead to a subsequent 
noncompetitive appointment to the competitive service.
    (2)(i) DoD and OPM will jointly publish a notice in the Federal 
Register when establishing a new competitive appointing authority or a 
new excepted appointing authority that may lead to a subsequent 
noncompetitive appointment to a competitive position in the career 
service. DoD and OPM will issue a notice with a public comment period 
before establishing such authority, except as provided in paragraph 
(b)(2)(ii) of this section.
    (ii) If the Secretary determines that a critical mission requirement 
exists, DoD and OPM may establish a new appointing authority as 
described in paragraph (b)(2)(i) of this section effective upon 
publication of a Federal Register notice without a preceding comment 
period. However, the notice will invite public comments, and DoD and OPM 
will issue another notice if the authority is revised based on those 
comments.
    (3) The Secretary will prescribe appropriate implementing issuances 
to administer a new appointing authority established under paragraph (b) 
of this section.
    (4) At least annually, a consolidated list of all appointing 
authorities established under this section and currently in effect will 
be published in the Federal Register.
    (c) Severe shortage/critical need hiring authority. (1) The 
Secretary may determine that there is a severe shortage of candidates or 
a critical hiring need, as defined in 5 U.S.C. 3304(a)(3) and 5 CFR part 
337, subpart B, for particular occupations, pay bands, career groups, 
and/or geographic locations, and establish a specific authority to make 
appointments without regard to Sec. 9901.515. Public notice will be 
provided in accordance with 5 U.S.C. 3304(a)(3)(A).
    (2) For each specific authority, the Secretary will document the 
basis for the severe shortage or critical hiring need, consistent with 5 
CFR 337.204(b) or 337.205(b), as applicable.
    (3) The Secretary will terminate or modify a specific authority to 
make appointments under this section when it determines that the severe 
shortage or critical need upon which the authority was based no longer 
exists.
    (4) The Secretary will prescribe appropriate implementing issuances 
to administer this authority and will notify OPM of determinations made 
under this section.
    (d) Time-limited appointing authorities. (1) The Secretary may 
prescribe the procedures for appointing employees, the duration of such 
appointments, and the appropriate uses of time-limited employees. These 
procedures will preclude the use of employees on term appointments in 
positions that should be filled on a permanent basis. Term appointments 
may be used to accomplish permanent work in circumstances

[[Page 979]]

where the position cannot be filled permanently, e.g., the incumbent 
will be out of the position for a significant period of time, but is 
expected to return.
    (2) The Secretary will prescribe implementing issuances establishing 
the procedures under which a time-limited employee serving in a 
competitive service position may be converted without further 
competition to the career service if--
    (i) The vacancy announcement met the requirements of Sec. 
9901.515(a) and included the possibility of noncompetitive conversion to 
a competitive position in the career service at a later date;
    (ii) The individual was appointed using the competitive examining 
procedures set forth in Sec. 9901.515(b) and (c); and
    (iii) The employee completed at least 2 years of continuous service 
at the fully successful level of performance or better.



Sec. 9901.512  Probationary periods.

    (a) The Secretary may establish initial probationary periods of at 
least 1 year, but not to exceed 3 years, as deemed appropriate for 
employees appointed to positions in the competitive and excepted service 
covered by NSPS. The Secretary will prescribe the conditions for such 
periods, such as creditable service, in implementing issuances. Initial 
probationary periods established for more than 1 year will be applied to 
categories of positions or types of work that require a longer time 
period to evaluate the employee's ability to perform the work. A 
preference eligible who has completed 1 year of an initial probationary 
period is covered by subparts G and H of this part.
    (b) The Secretary may establish in-service probationary periods. The 
Secretary will prescribe the conditions for such periods, such as 
creditable service and groups of positions or occupations to be covered, 
in implementing issuances. An employee who does not satisfactorily 
complete an in-service probationary period will be returned to a grade 
or band no lower than that held before the in-service probationary 
period and will have his or her rate of basic pay set in accordance with 
Sec. 9901.352(c) or 9901.354(c), as applicable. Nothing in this section 
prohibits an action against an individual serving an in-service 
probationary period for cause unrelated to performance.



Sec. 9901.513  Qualification standards.

    The Secretary may continue to use qualification standards 
established or approved by OPM. The Secretary also may establish 
qualification standards for positions covered by NSPS.



Sec. 9901.514  Non-citizen hiring.

    The Secretary may establish procedures for appointing non-citizens 
to positions within NSPS under the following conditions:
    (a) In the absence of a qualified U.S. citizen, the Secretary may 
appoint a qualified non-citizen in the excepted service; and
    (b) Immigration and security requirements will apply to these 
appointments.



Sec. 9901.515  Competitive examining procedures.

    (a) In recruiting applicants from outside of the civil service for 
competitive appointments to competitive service positions in NSPS, the 
Secretary will provide public notice for all vacancies in the career 
service in accordance with 5 CFR part 330 and--
    (1) Will accept applications for the vacant position from all U.S. 
citizens;
    (2) Will, at a minimum, consider applicants from the local commuting 
area;
    (3) May concurrently consider applicants from other targeted 
recruitment areas, as specified in the vacancy announcement, in addition 
to those applicants from the minimum area of consideration; and
    (4) May consider applicants from outside that minimum area(s) of 
consideration as necessary to provide sufficient qualified candidates.
    (b) The Secretary may establish procedures for the examination of 
applicants for entry into competitive and excepted service positions in 
the National Security Personnel System. Such procedures will adhere to 
the merit system principles in 5 U.S.C. 2301 and veterans' preference 
requirements as set forth in 5 U.S.C. 1302(b) and (c)

[[Page 980]]

and 3309 through 3320, as applicable, and will be available in writing 
for applicant review. These procedures will also include provisions for 
employees entitled to priority consideration referred to in 5 U.S.C. 
8151.
    (c) In establishing examining procedures for appointing employees in 
the competitive service under paragraph (b) of this section, the 
Secretary may use traditional numerical rating and ranking or 
alternative ranking and selection procedures (category rating) in 
accordance with 5 U.S.C. 3319(b) and (c).
    (d) The Secretary will apply the requirements of paragraphs (a) 
through (c) of this section to the recruitment of applicants for time-
limited positions in the competitive service in order to qualify an 
appointee for noncompetitive conversion to a competitive position in the 
career service, in accordance with Sec. 9901.511.



Sec. 9901.516  Internal placement.

    The Secretary may prescribe implementing issuances regarding the 
assignment, reassignment, reinstatement, detail, transfer, and promotion 
of individuals or employees into or within NSPS. Such implementing 
issuances will be made available to applicants and employees. Internal 
placement actions may be made on a permanent or temporary basis using 
competitive and noncompetitive procedures. Those exceptions to 
competitive procedures set forth in 5 CFR part 335 apply to NSPS.



                       Subpart F_Workforce Shaping



Sec. 9901.601  Purpose and applicability.

    This subpart contains the regulations implementing the provisions of 
5 U.S.C. 9902(k) concerning the Department's system for realigning, 
reorganizing, and reshaping its workforce. This subpart applies to 
categories of positions and employees affected by such actions resulting 
from the planned elimination, addition, or redistribution of functions, 
duties, or skills within or among organizational units, including 
realigning, reshaping, delayering, and similar organizational-based 
restructuring actions. This subpart does not apply to actions involving 
the conduct and/or performance of individual employees, which are 
covered by subpart G of this part.



Sec. 9901.602  Scope of authority.

    When a specified category of employees is covered by the system 
established under this subpart, the provisions of 5 U.S.C. 3501 through 
3503 (except with respect to veterans' preference) are modified and 
replaced with respect to that category, except as otherwise specified in 
this subpart. In accordance with Sec. 9901.105, the Secretary will 
prescribe implementing issuances to carry out the provisions of this 
subpart.



Sec. 9901.603  Definitions.

    In this subpart:
    Competing employee means a career employee (including an employee 
serving an initial probationary period), an employee serving on a term 
appointment, and other employees as identified in implementing 
issuances.
    Competitive area means the boundaries within which employees compete 
for retention under this subpart, based on factors described in Sec. 
9901.605(a).
    Competitive group means employees within a competitive area who are 
on a common retention list for the purpose of exercising displacement 
rights.
    Displacement right means the right of an employee who is displaced 
from his or her present position because of position abolishment, or 
because of displacement resulting from the abolishment of a higher-
standing employee on the retention list, to displace a lower-standing 
employee on the list on the basis of the retention factors.
    Modal rating means, for the purpose of reduction in force, the 
rating of record that occurs most frequently in a particular competitive 
group.
    Notice means a written communication to an individual employee 
stating that the employee will be displaced from his or her position as 
a result of a reduction in force action under this subpart.
    Rating of record has the meaning given that term in Sec. 9901.103.
    Retention factors means tenure, veterans' preference, performance, 
length of service, and such other factors as the Secretary considers 
necessary and

[[Page 981]]

appropriate to rank employees within a particular retention list.
    Retention list means a list of all competing employees occupying 
positions in the competitive area, who are grouped in the same 
competitive group on the basis of retention factors. While all positions 
in the competitive group are listed, only competing employees have 
retention standing.
    Tenure group means a group of employees with a given appointment 
type. In a reduction in force, employees are first placed in a tenure 
group and then ranked within that group according to other retention 
factors.
    Undue interruption means a degree of interruption that would prevent 
the completion of required work by an employee within 90 days after the 
employee has been placed in a different position.



Sec. 9901.604  Coverage.

    (a) Employees covered. The following employees and positions in DoD 
organizational and functional units are eligible for coverage under this 
subpart:
    (1) Employees and positions who would otherwise be covered by 5 
U.S.C. chapter 35 (excluding members of the Senior Executive Service and 
employees who are excluded from coverage by other statutory authority); 
and
    (2) Such others designated by the Secretary as DoD may be authorized 
to include under 5 U.S.C. 9902.
    (b) Actions covered--(1) Reduction in force. This subpart will apply 
when a displacement action occurs within a retention list or when 
releasing a competing employee from a retention list by separation, 
reduction in band, or assignment involving displacement, and the release 
results from an action described in Sec. 9901.601.
    (2) Transfer of function. The Secretary will issue implementing 
issuances consistent with 5 U.S.C. 3503 prescribing procedures to be 
used when a function transfers from one competitive area to a different 
competitive area.
    (3) Furlough. The provisions in 5 CFR 351.604 will apply when 
furloughing a competing employee for more than 30 consecutive calendar 
days, or more than 22 workdays in 1 calendar year if done on a 
discontinuous basis, except as otherwise provided in this subpart.
    (c) Actions excluded. This subpart does not apply to--
    (1) The termination of a temporary promotion or temporary 
reassignment and the subsequent return of an employee to the position 
held before the temporary promotion or temporary reassignment (or to a 
position with comparable pay band, pay, status, and tenure);
    (2) A reduction in band based on the reclassification of an 
employee's position due to the application of new classification 
standards or the correction of a classification error or classification 
actions covered under Sec. 9901.222;
    (3) Placement of an employee serving on a seasonal basis in a 
nonpay, nonduty status in accordance with conditions established at time 
of appointment;
    (4) A change in an employee's work schedule from other-than-full-
time to full-time;
    (5) A change in an employee's mixed tour work schedule in accordance 
with conditions established at time of appointment;
    (6) A change in the scheduled tour of duty of an other-than-full-
time schedule;
    (7) A reduction in band based on the reclassification of an 
employee's position due to erosion of duties, except that this exclusion 
does not apply to such reclassification actions that will take effect 
after an agency has formally announced a reduction in force in the 
employee's competitive area and when the reduction in force will take 
effect within 180 days; or
    (8) Any other personnel action not covered by paragraph (b) of this 
section.



Sec. 9901.605  Competitive area.

    (a) Basis for competitive area. The Secretary may establish a 
competitive area on the basis of one or more of the following 
considerations:
    (1) Geographical location(s);
    (2) Line(s) of business;
    (3) Product line(s);
    (4) Organizational unit(s); and
    (5) Funding line(s).
    (b) Employees included in competitive area. A competitive area will 
include

[[Page 982]]

all competing employees holding official positions of record in the 
defined competitive area.
    (c) Review of competitive area determinations. The Secretary will 
make all competitive area definitions available for review.
    (d) Change of competitive area. Competitive areas will be 
established for a minimum of 90 days before the effective date of a 
reduction in force. In implementing issuances, the Secretary will 
establish approval procedure requirements for any competitive area 
identified less than 90 days before the effective date of a reduction in 
force.
    (e) Limitations. The Secretary will establish a competitive area 
only on the basis of legitimate organizational reasons, and competitive 
areas will not be used for the purpose of targeting an individual 
employee for reduction in forces on the basis of nonmerit factors.
    (f) Bar on collective bargaining. Pursuant to 5 U.S.C. 9902(f)(4) 
and (m)(7), the establishment of a competitive area under the authority 
of this subpart is not subject to collective bargaining.



Sec. 9901.606  Competitive group.

    (a) The Secretary will establish separate competitive groups for 
employees--
    (1) In the excepted and competitive service;
    (2) Under different excepted service appointment authorities; and
    (3) With different work schedules (e.g., full-time, part-time, 
seasonal, intermittent).
    (b) The Secretary may further define competitive groups on the basis 
of one or more of the following considerations:
    (1) Career group;
    (2) Pay schedule;
    (3) Occupational series or specialty;
    (4) Pay band; or
    (5) Trainee status.
    (c) An employee is placed into a competitive group based on the 
employee's official position of record. An employee's official position 
description may be supplemented with other applicable records that 
document the employee's actual duties and responsibilities.
    (d) The competitive group includes the official positions of 
employees on a detail or other nonpermanent assignment to a different 
position from the competitive group.
    (e) Pursuant to 5 U.S.C. 9902(f)(4) and (m)(7), the establishment of 
a competitive group under the authority of this subpart is not subject 
to collective bargaining.



Sec. 9901.607  Retention standing.

    (a) Retention list. Within each competitive group, the Secretary 
will establish a retention list of competing employees in descending 
order based on the following:
    (1) Tenure, with career employees listed first, followed by 
employees serving an initial probationary period, and then followed by 
employees on term appointments and other employees as identified in 
implementing issuances;
    (2) Veterans' preference, in accordance with the preference 
requirements in 5 CFR 351.501(c) and (d), including the preference 
restrictions found in 5 U.S.C. 3501(a);
    (3) The ratings of record, as determined in accordance with 
implementing issuances;
    (4) Creditable civilian and/or uniformed service in accordance with 
5 U.S.C. 3502(a)(A) and (B) and 5 CFR 351.503, but without regard to 
provisions covering additional service credit for performance in 5 CFR 
351.503(c)(3) and (e); and
    (5) The Secretary may establish tie-breaking procedures when two or 
more employees have the same retention standing.
    (b) Active uniformed service member not on list. The retention list 
does not include the name of an employee who, on the effective date of 
the reduction in force, is on active duty in the uniformed services with 
a restoration right under 5 CFR part 353.
    (c) Access to retention list. An employee who received a specific 
reduction in force notice and the employee's representative have access 
to the applicable retention list in accordance with 5 CFR 351.505. Where 
5 CFR 351.505 uses the terms ``competitive level'' or ``retention 
register,'' the term retention list (as defined in this subpart) is 
substituted.

[[Page 983]]



Sec. 9901.608  Displacement, release, and position offers.

    (a) Displacement to other positions on the retention list. (1) An 
employee who is displaced because of position abolishment, or because of 
displacement resulting from the abolishment of the position of a higher-
standing employee on the retention list, may displace a lower-standing 
employee on the list if--
    (i) The higher-standing employee is qualified for the position 
consistent, as applicable, with 5 CFR 351.702, or the Department's own 
qualifications applied consistent with other requirements in 5 CFR 
351.702;
    (ii) No undue interruption would result from the displacement; and
    (iii) The position of the lower-standing employee is in the same pay 
band, or in a lower pay band, as the position of the higher-standing 
employee.
    (2) A displacing employee retains his or her status and tenure.
    (b) Release from the retention list. (1) Employees are selected for 
release from the list on the basis of the ascending order of retention 
standing set forth in Sec. 9901.607(a).
    (2) A competing employee may not be released from a retention list 
that contains a position held by a temporary employee when the competing 
employee is qualified to perform in that position under Sec. 
9901.608(a)(1)(i).
    (3) The release of an employee from the retention list may be 
temporarily postponed when appropriate under 5 CFR 351.506, 351.606, 
351.607, and 351.608. Where part 351 uses the term ``competitive level'' 
in these four sections, the term retention list (as defined in this 
subpart) is substituted.
    (c) Placement in vacant positions. At the Secretary's option, an 
employee affected by Sec. 9901.608(a)(1) may be offered a vacant 
position within the competitive area in lieu of reduction in force, 
based on relative retention standing as specified in Sec. 9901.607(a).
    (d) Actions for employees with no offer. If a released employee does 
not receive an offer of another position under paragraph (c) of this 
section to a position on a different retention list, the Secretary may--
    (1) Separate the employee by reduction in force; or
    (2) Furlough the employee under Sec. 9901.604(b)(3).



Sec. 9901.609  Reduction in force notices.

    The Secretary will provide a specific written notice to each 
employee reached for an action in reduction in force competition at 
least 60 days before the reduction in force becomes effective. When a 
reduction in force is caused by circumstances not reasonably 
foreseeable, the Secretary, at the request of a Component head or 
designee, may approve a notice period of less than 60 days. The 
shortened notice period must cover at least 30 full days before the 
effective date of release. The content of the notice will be prescribed 
in implementing issuances.



Sec. 9901.610  Voluntary separation.

    (a) The Secretary may--
    (1) Separate from the service any employee who volunteers to be 
separated even though the employee is not otherwise subject to 
separation due to a reduction in force; and
    (2) For each employee voluntarily separated under paragraph (a)(1) 
of this section, retain an employee in a similar position who would 
otherwise be separated due to a reduction in force.
    (b) The separation of an employee under paragraph (a) of this 
section will be treated as an involuntary separation due to a reduction 
in force.



Sec. 9901.611  Reduction in force appeals.

    (a) An employee who believes the provisions of this subpart were not 
properly applied may appeal the reduction in force action to the Merit 
Systems Protection Board as provided for in 5 CFR 351.901 if the 
employee was--
    (1) Separated by reduction in force;
    (2) Reduced in band by reduction in force; or
    (3) Furloughed by reduction in force under Sec. 9901.604(b)(3).
    (b) Paragraph (a) of this section does not apply to actions taken 
under internal DoD placement programs, including the DoD Priority 
Placement Program.

[[Page 984]]



                        Subpart G_Adverse Actions

                                 General



Sec. 9901.701  Purpose.

    This subpart contains regulations prescribing the requirements for 
employees who are removed, suspended, furloughed for 30 days or less, 
reduced in pay, or reduced in pay band (or comparable reduction). The 
Secretary may prescribe implementing issuances to carry out the 
provisions of this subpart.



Sec. 9901.702  Waivers.

    With respect to any category of employees covered by this subpart, 
subchapters I and II of 5 U.S.C. chapter 75, in addition to those 
provisions of 5 U.S.C. chapter 43 specified in subpart D of this part, 
are waived and replaced by this subpart.



Sec. 9901.703  Definitions.

    In this subpart:
    Adverse action means a removal, suspension, furlough for 30 days or 
less, reduction in pay, or reduction in pay band (or comparable 
reduction).
    Band has the meaning given that term in Sec. 9901.103.
    Day has the meaning given that term in Sec. 9901.103.
    Furlough has the meaning given that term in Sec. 9901.103.
    Indefinite suspension means the placement of an employee in a 
temporary status without duties and pay pending investigation, inquiry, 
or other administrative action. An indefinite suspension continues for 
an indeterminate period of time and ends with the occurrence of pending 
conditions set forth in the notice of actions which may include the 
completion of any subsequent administrative action.
    Initial probationary period has the meaning given that term in Sec. 
9901.103.
    In-service probationary period has the meaning given that term in 
Sec. 9901.103.
    Mandatory removal offense (MRO) has the meaning given that term in 
Sec. 9901.103.
    Reduction in pay means a decrease in an employee's rate of basic pay 
fixed by law or administrative action for the position held by the 
employee before any deductions and exclusive of additional pay of any 
kind. Basic pay does not include local market supplements under subpart 
C of this part or similar payments. Nonreceipt of a pay increase is not 
a reduction in pay.
    Removal means the involuntary separation of an employee from the 
Federal service.
    Suspension means the temporary placement of an employee, for 
disciplinary reasons, in a nonduty/ nonpay status.



Sec. 9901.704  Coverage.

    (a) Actions covered. This subpart covers removals, suspensions, 
furloughs of 30 days or less, reductions in pay, or reductions in band 
(or comparable reductions).
    (b) Actions excluded. This subpart does not cover--
    (1) An action taken against an employee during an initial 
probationary period established under Sec. 9901.512(a), except when the 
employee is a preference eligible who has completed 1 year of that 
probationary period;
    (2) A reduction in pay or pay band of an employee who does not 
satisfactorily complete an in-service probationary period under Sec. 
9901.512(b) if the employee is returned to a grade or band and rate of 
basic pay no lower than that held before the in-service probationary 
period.
    (3) An action that terminates a temporary or term promotion and 
returns the employee to the position from which temporarily promoted, or 
to a different position in a comparable pay band, if the employee was 
informed that the promotion was to be of limited duration;
    (4) A reduction in force action under subpart F of this part;
    (5) An action imposed by the Merit Systems Protection Board under 5 
U.S.C. 1215;
    (6) A voluntary action by an employee;
    (7) An action taken or directed by OPM based on suitability under 5 
CFR part 731;
    (8)(i) Termination of appointment on the expiration date specified 
as a basic condition of employment at the time the appointment was made;
    (ii) Termination of appointment before the expiration date specified 
as a

[[Page 985]]

basic condition of employment at the time the appointment was made, 
except when the termination is taken against--
    (A) A preference eligible employee who has completed 1 year under a 
time-limited appointment; or
    (B) An employee who has completed a probationary period under a term 
appointment;
    (9) Cancellation of a promotion to a position not classified prior 
to the promotion;
    (10) Placement of an employee serving on an intermittent or seasonal 
basis in a temporary non-duty, non-pay status in accordance with 
conditions established at the time of appointment;
    (11) Reduction of an employee's rate of basic pay from a rate that 
is contrary to law or regulation;
    (12) An action taken under a provision of statute, other than one 
codified in title 5, U.S. Code, which excludes the action from 5 U.S.C. 
chapter 75 or this subpart;
    (13) A classification determination, including a classification 
determination under subpart B of this part;
    (14) Suspension or removal under 5 U.S.C. 7532; and
    (15) An action to terminate grade retention upon conversion to the 
NSPS pay system established under subpart C of this part.
    (c) Employees covered. Subject to a determination by the Secretary 
under Sec. 9901.102(b)(2), this subpart applies to DoD employees, 
except as excluded by paragraph (d) of this section.
    (d) Employees excluded. This subpart does not apply to--
    (1) An employee who is serving a probationary period, except when 
the employee is a preference eligible who has completed 1 year of that 
probationary period;
    (2) A member of the Senior Executive Service;
    (3) An employee who is terminated in accordance with terms specified 
as conditions of employment at the time the appointment was made;
    (4) An employee whose appointment is made by and with the advice and 
consent of the Senate;
    (5) An employee whose position has been determined to be of a 
confidential, policy-determining, policy-making, or policy-advocating 
character by--
    (i) The President, for a position that the President has excepted 
from the competitive service;
    (ii) OPM, for a position that OPM has excepted from the competitive 
service; or
    (iii) The President or the Secretary for a position excepted from 
the competitive service by statute;
    (6) An employee whose appointment is made by the President;
    (7) A reemployed annuitant who is receiving an annuity from the 
Civil Service Retirement and Disability Fund or the Foreign Service 
Retirement and Disability Fund;
    (8) An employee who is an alien or non-citizen occupying a position 
outside the United States, as described in 5 U.S.C. 5102(c)(11);
    (9) A member of the National Security Labor Relations Board;
    (10) A non-appropriated fund employee;
    (11) A National Guard technician who is employed under 32 U.S.C. 
709; and
    (12) An employee against whom an adverse personnel action is taken 
or imposed under any statute or regulation other than this subpart.

   Requirements for Removal, Suspension, Furlough of 30 Days or Less, 
    Reduction in Pay, or Reduction in Band (or Comparable Reduction)



Sec. 9901.711  Standard for action.

    The Secretary may take an adverse action under this subpart only for 
such cause as will promote the efficiency of the service.



Sec. 9901.712  Mandatory removal offenses.

    (a) The Secretary has the sole, exclusive, and unreviewable 
discretion to identify offenses that have a direct and substantial 
adverse impact on the Department's national security mission. Such 
offenses will be identified in advance in implementing issuances, 
publicized upon establishment via notice in the Federal Register, and 
made known to all employees on a periodic basis, as appropriate, through 
means determined by the Secretary.

[[Page 986]]

    (b) The procedures in Sec. Sec. 9901.713 through 9901.716 apply to 
actions taken under this section. However, a proposed notice required by 
Sec. 9901.714 may be issued to the employee in question only after the 
Secretary's review and approval.
    (c) The Secretary has the sole, exclusive, and unreviewable 
discretion to mitigate the removal penalty on his or her own initiative 
or at the request of the employee in question.
    (d) Nothing in this section limits the discretion of the Secretary 
to remove employees for offenses other than those identified by the 
Secretary as an MRO.



Sec. 9901.713  Procedures.

    An employee against whom an adverse action is proposed is entitled 
to the following:
    (a) A proposal notice under Sec. 9901.714;
    (b) An opportunity to reply under Sec. 9901.715; and
    (c) A decision notice under Sec. 9901.716.



Sec. 9901.714  Proposal notice.

    (a) Notice period. An employee will receive a minimum of 15 days 
advance written notice of a proposed adverse action. However, if there 
is reasonable cause to believe the employee has committed a crime for 
which a sentence of imprisonment may be imposed, the notice period may 
be shortened to a minimum of 5 days. No notice of proposed action is 
necessary for furlough without pay due to unforeseen circumstances, such 
as sudden breakdown in equipment, acts of God, or sudden emergencies 
requiring immediate curtailment of activities.
    (b) Contents of notice. (1) The proposal notice will inform the 
employee of the factual basis for the proposed action in sufficient 
detail to permit the employee to reply to the notice, and inform the 
employee of his or her right to review the evidence supporting the 
proposed action. Evidence may not be used that cannot be disclosed to 
the employee, his or her representative, or designated physician 
pursuant to 5 CFR 297.204.
    (2) When some but not all employees in a given category and/or 
organizational unit are being furloughed, the proposal notice will state 
the basis for selecting a particular employee for furlough, as well as 
the reasons for the furlough.
    (c) Duty status during notice period. An employee will remain in a 
duty status in his or her regular position during the notice period. 
However, if it is determined that the employee's continued presence in 
the workplace during the notice period may pose a threat to the employee 
or others, result in loss of or damage to Government property, adversely 
impact the Department's mission, or otherwise jeopardize legitimate 
Government interests, one or a combination of the following alternatives 
may be taken:
    (1) Assign the employee to duties where it is determined that the 
employee is no longer a threat to the employee or others, the 
Department's mission, or Government property or interests;
    (2) Allow the employee to take leave, or place him or her in an 
appropriate leave status (annual leave, sick leave, or leave without 
pay) or absence without leave if the employee has absented himself or 
herself from the worksite without approved leave; or
    (3) Place the employee in a paid, non-duty status for such time as 
is necessary to effect the action.



Sec. 9901.715  Opportunity to reply.

    (a) An employee will be provided a minimum of 10 days, which will 
run concurrently with the notice period, to reply orally and/or in 
writing to a notice of proposed adverse action. However, if there is 
reasonable cause to believe the employee has committed a crime for which 
a sentence of imprisonment may be imposed, the reply period may be 
reduced to a minimum 5 days, which will run concurrently with the notice 
period. No opportunity to reply is necessary for furlough without pay 
due to unforeseen circumstances, such as sudden breakdown in equipment, 
acts of God, or sudden emergencies requiring immediate curtailment of 
activities.
    (b) The opportunity to reply orally does not include the right to a 
formal hearing with examination of witnesses.
    (c) During the opportunity to reply period, the employee will be 
provided a reasonable amount of official time to

[[Page 987]]

review the evidence, and to furnish affidavits and other documentary 
evidence, if the employee is otherwise in an active duty status.
    (d) An official will be designated to receive the employee's written 
and/or oral response. The official will have authority to make or 
recommend a final decision on the proposed adverse action.
    (e) The employee may be represented by an attorney or non-Federal 
employee representative, at the employee's expense, or other 
representative of the employee's choice, subject to paragraph (f) of 
this section. The employee will provide a written designation of his or 
her representative.
    (f) An employee's representative may be disallowed if the 
representative is--
    (1) An individual whose activities as representative would cause a 
conflict between the interest or position of the representative and that 
of the Department,
    (2) An employee of the Department whose release from his or her 
official position would give rise to unreasonable costs or whose work 
assignments preclude his or her release; or
    (3) An individual whose activities as representative could 
compromise security.
    (g)(1) An employee who wishes consideration of any medical condition 
that may be relevant to the proposed adverse action will provide medical 
documentation, as that term is defined at 5 CFR 339.104, during the 
opportunity to reply, whenever possible.
    (2) A medical examination may be required or offered pursuant to 5 
CFR part 339, subpart C, when an employee's medical documentation is 
under consideration.
    (3) Withdrawal or delay of a proposed adverse action is not required 
when an employee's medical condition is under consideration . However--
    (i) The employee will be allowed to provide medical documentation 
during the opportunity to reply;
    (ii) Compliance with 29 CFR 1614.203 and relevant Equal Employment 
Opportunity Commission rules will occur; and
    (iii) Compliance with 5 CFR 831.1205 or 844.202, as applicable, will 
occur in the issuance of a decision to remove.



Sec. 9901.716  Decision notice.

    (a) Any reasons for the action other than those specified in the 
proposal notice may not be considered in a decision on a proposed 
adverse action.
    (b) Any response from the employee and the employee's 
representative, if the response is provided to the official designated 
under Sec. 9901.715(d) during the opportunity to reply period, and any 
medical documentation furnished under Sec. 9901.715(g) will be 
considered.
    (c) The decision notice will specify in writing the reasons for the 
decision and advise the employee of any appeal or grievance rights under 
subparts H or I of this part.
    (d) To the extent practicable, the notice to the employee will be 
delivered on or before the effective date of the action. If delivery 
cannot be made to the employee in person, the notice may be delivered to 
the employee's last known address of record on or before the effective 
date of the action.



Sec. 9901.717  Departmental record.

    (a) Document retention. The Department will keep a record of all 
relevant documentation concerning the action for a period of time 
pursuant to the General Records Schedule and the Guide to Personnel 
Recordkeeping. The record will include the following:
    (1) A copy of the proposal notice;
    (2) The employee's written response, if any, to the proposal;
    (3) A summary of the employee's oral response, if any;
    (4) A copy of the decision notice; and
    (5) Any supporting material that is directly relevant and on which 
the action was substantially based.
    (b) Access to the record. The Department will make the record 
available for review by the employee and furnish a copy of the record 
upon the employee's request or the request of the Merit Systems 
Protection Board (MSPB), but not less than 15 days after such a request.

                            Savings Provision



Sec. 9901.721  Savings provision.

    This subpart does not apply to adverse actions proposed prior to the 
date of an affected employee's coverage under this subpart.

[[Page 988]]



                            Subpart H_Appeals



Sec. 9901.801  Purpose.

    This subpart implements the provisions of 5 U.S.C. 9902(h), which 
establishes the process for Department employees to appeal certain 
adverse actions covered under subpart G of this part.



Sec. 9901.802  Applicable legal standards and precedents.

    In accordance with 5 U.S.C. 9902(h)(3), in applying existing legal 
standards and precedents, MSPB and arbitrators, in applicable cases, are 
bound by the legal standard set forth in Sec. 9901.107(a)(2).



Sec. 9901.803  Waivers.

    When a specified category of employees is covered by an appeals 
process established under this subpart, the provisions of 5 U.S.C. 7701 
are waived with respect to that category of employees to the extent they 
are inconsistent with the provisions of this subpart. The provisions of 
5 U.S.C. 7702 are modified as provided in Sec. 9901.809. The appellate 
procedures specified herein supersede those of MSPB to the extent MSPB 
regulations are inconsistent with this subpart. MSPB will follow the 
provisions in this subpart until it issues conforming regulations, which 
may not conflict with this part.



Sec. 9901.804  Definitions.

    In this subpart:
    Administrative judge or AJ means the official, including an 
administrative law judge, authorized by MSPB to hold a hearing in a 
matter covered by this subpart and subpart G of this part, or to decide 
such a matter without a hearing.
    Class appeal means an appeal brought by a representative(s) of a 
group of similarly situated employees consistent with the provisions of 
Rule 23 of the Federal Rules of Civil Procedure.
    Harmful error means error by the Department in the application of 
its procedures that is likely to have caused it to reach a conclusion 
different from the one it would have reached in the absence or cure of 
the error. The burden is on the appellant to show that the error was 
harmful, i.e., that it caused substantial harm or prejudice to his or 
her rights.
    Mandatory removal offense (MRO) has the meaning given that term in 
Sec. 9901.103.
    MSPB means the Merit Systems Protection Board.
    Petition for Review (PFR) means a request for full MSPB review of a 
final Department decision.
    Preponderance of the evidence means the degree of relevant evidence 
that a reasonable person, considering the record as a whole, would 
accept as sufficient to find that a contested fact is more likely to be 
true than untrue.
    Request for Review (RFR) means a preliminary request for review of 
an initial decision of an MSPB administrative judge before that decision 
has become a final Department decision.



Sec. 9901.805  Coverage.

    (a) Subject to a determination by the Secretary under Sec. 
9901.102(b)(2), this subpart applies to employees in DoD organizational 
and functional units that are included under NSPS who appeal removals; 
suspensions for more than 14 days, including indefinite suspensions; 
furloughs of 30 days or less; reductions in pay; or reductions in pay 
band (or comparable reductions), which constitute appealable adverse 
actions for the purpose of this subpart, provided such employees are 
covered by Sec. 9901.704.
    (b) This subpart does not apply to a reduction in force action taken 
under subpart F of this part, nor does it apply to actions taken under 
internal DoD placement programs, including the DoD Priority Placement 
Program.
    (c) Appeals of suspensions of 14 days or less and other lesser 
disciplinary measures are not covered under this subpart but may be 
grieved through a negotiated grievance procedure or an administrative 
grievance procedure, whichever is applicable.
    (d) The appeal rights in 5 CFR 315.806 apply to the termination of 
an employee in the competitive service while serving a probationary 
period.
    (e) Actions taken under 5 U.S.C. 7532 are not appealable to MSPB.
    (f) Except as expressly provided in subpart C of this part, actions 
taken

[[Page 989]]

under that subpart are not appealable to MSPB.



Sec. 9901.806  Alternative dispute resolution.

    The Secretary recognizes the value of using alternative dispute 
resolution methods such as mediation, an ombudsman, or interest-based 
problem-solving to address employee-employer disputes arising in the 
workplace, including those which may involve disciplinary or adverse 
actions. Such methods can result in more efficient and more effective 
outcomes than traditional, adversarial methods of dispute resolution. 
The use of alternative dispute resolution is encouraged. Such methods 
will be subject to collective bargaining to the extent permitted by 
subpart I of this part.



Sec. 9901.807  Appellate procedures.

    (a) General. (1) A covered Department employee may appeal to MSPB an 
adverse action listed in Sec. 9901.805(a). Such an employee has a right 
to be represented by an attorney or other representative of his or her 
own choosing. The procedures in this subpart do not apply when the 
action is taken under the special national security provisions 
established by 5 U.S.C. 7532.
    (2)(i) This section modifies MSPB's appellate procedures with 
respect to appeals under this subpart, as applicable.
    (ii) MSPB will refer appeals to an AJ for adjudication. The AJ must 
make a decision at the close of the review and provide a copy of the 
decision to each party to the appeal and to OPM.
    (3) The Director of OPM may, as a matter of right at any time in the 
proceeding, intervene or otherwise participate in any proceeding under 
this section in any case in which the Director believes that an 
erroneous decision will have a substantial impact on a civil service 
law, rule, regulation, or policy directive.
    (4) If the AJ is of the opinion that an appeal could be processed 
more expeditiously without adversely affecting any party, the AJ may--
    (i) Consolidate appeals filed by two or more appellants; or
    (ii) Join two or more appeals filed by the same appellant and hear 
and decide them concurrently.
    (5) If an employee has been removed under subpart G of this part, 
neither the employee's status under any retirement system established by 
Federal statute nor any election made by the employee under any such 
system will affect the employee's appeal rights.
    (6) All appeals, including class appeals, will be filed no later 
than 20 days after the effective date of the action being appealed, or 
no later than 20 days after the date of service of a decision under 
subpart G of this part, whichever is later.
    (7) Either party may file a motion to disqualify a party's 
representative at any time during the proceedings.
    (b) Case suspension. Requests for case suspensions must be submitted 
jointly by the parties.
    (c) Settlement. (1) An MSPB AJ may not require any party to engage 
in settlement discussions in connection with any action appealed under 
this section. Where the parties voluntarily agree to enter into 
settlement discussions under paragraph (c)(2) of this section, if either 
party decides that such discussions are not appropriate, the matter will 
proceed to adjudication.
    (2) Where the parties agree to engage in formal settlement 
discussions, these discussions will be conducted by an official other 
than the AJ assigned to adjudicate the case. Nothing prohibits the 
parties from engaging in settlement discussions on their own.
    (d) Discovery. The parties may seek discovery regarding any matter 
that is relevant to any of their claims or defenses. However, by motion, 
either party may seek to limit such discovery because the burden or 
expense of providing the material outweighs its benefit, or because the 
material sought is privileged, not relevant, unreasonably cumulative or 
duplicative, or can be secured from some other source that is more 
convenient, less burdensome, or less expensive.
    (1) Prior to filing a motion to limit discovery, the parties must 
confer and attempt to resolve any pending objection(s).
    (2) Neither party may submit more than one set of interrogatories, 
one set

[[Page 990]]

of requests for production, and one set of requests for admissions. The 
number of interrogatories or requests for production or admissions may 
not exceed 25 per pleading, including subparts; in addition, neither 
party may conduct/compel more than 2 depositions.
    (3) The AJ may grant a party's motion for additional discovery only 
upon a showing of necessity and good cause.
    (e) Hearing--(1) Burden of proof. An adverse action taken against an 
employee will be sustained by the MSPB AJ if it is supported by a 
preponderance of the evidence, unless the employee shows by a 
preponderance of the evidence--
    (i) That there was harmful error in the application of Department 
procedures in arriving at the decision;
    (ii) That the decision was based on any prohibited personnel 
practice described in 5 U.S.C. 2302(b); or
    (iii) That the decision was not in accordance with law.
    (2) Decisions without a hearing. If the AJ determines upon his or 
her own initiative or upon request by either party that some or all 
material facts are not in genuine dispute, he or she may, after giving 
notice to the parties and providing them an opportunity to respond in 
writing, including filing evidence and/or arguments, within 15 calendar 
days, issue an order limiting the scope of the hearing or issue a 
decision without holding a hearing.
    (f) Initial decision--(1) Time limit. An initial decision must be 
made by an AJ no later than 90 days after the date on which the appeal 
is filed.
    (2) Mitigation. (i) An AJ will give great deference to the 
determination regarding the penalty imposed.
    (ii) An AJ may not modify the penalty imposed unless such penalty is 
totally unwarranted in light of all pertinent circumstances. In 
evaluating the appropriateness of the penalty, the AJ will give primary 
consideration to the impact of the sustained misconduct or poor 
performance on the Department's national security mission in accordance 
with Sec. 9901.107(a)(2).
    (iii) In cases of multiple charges, the third party's determination 
in this regard is based on the justification for the penalty as it 
relates to the sustained charge(s).
    (iv) When a penalty is mitigated, the maximum justifiable penalty 
must be applied. The maximum justifiable penalty is the severest penalty 
that is not so disproportionate to the basis for the action as to be 
totally unwarranted in light of all pertinent circumstances.
    (v) If the adverse action is based on an MRO, the penalty may only 
be mitigated as prescribed in Sec. 9901.808.
    (3) Reviewing charges. Neither the MSPB AJ, nor the full MSPB, may 
reverse an action based on the way in which the charge is labeled or the 
conduct characterized, provided the employee has sufficient notice to 
respond to the charge.
    (4) Performance expectations. Neither the MSPB AJ, nor the full 
MSPB, may reverse an action based on the way a performance expectation 
is expressed, provided that the expectation would be clear to a 
reasonable person.
    (5) Interim relief. Pursuant to 5 U.S.C. 9902(h)(4), employees will 
not be granted interim relief, nor will an action taken against an 
employee be stayed, unless specifically ordered by the full MSPB 
following final decision by the Department.
    (i) If the interim relief ordered by the full MSPB provides that the 
employee will return or be present at the place of employment pending 
the outcome of any petition for review, and the Secretary determines, in 
his or her sole, exclusive, and unreviewable discretion, that the 
employee's return to the workplace is impracticable or the presence of 
the employee is unduly disruptive to the work environment, the employee 
may be placed in an alternative position, or may be placed on excused 
absence pending final disposition of the employee's appeal.
    (ii) Nothing in paragraph (f)(5) of this section may be construed to 
require that any award of back pay or attorney fees be paid before an 
MSPB decision becomes final.
    (6) Attorney fees. (i) Except as provided in paragraph (f)(6)(ii) of 
this section or as otherwise provided by law, the AJ may require payment 
by the Department of reasonable attorney fees incurred by an employee if 
the employee is the prevailing party and the AJ determines that payment 
by the

[[Page 991]]

Department is warranted in the interest of justice, including any case 
in which a prohibited personnel practice was engaged in by the agency or 
any case in which the agency's action was clearly without merit.
    (ii) If the employee is the prevailing party and the decision is 
based on a finding of discrimination prohibited under 5 U.S.C. 
2302(b)(1), the payment of reasonable attorney fees must be in 
accordance with the standards prescribed in Sec. 706(k) of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e-5(k)).
    (g) Department's final decision--(1) Request for Review. The initial 
AJ decision will become the Department's final decision 30 days after 
its issuance, unless either party files an RFR with MSPB and the 
Department concurrently (with service on the other party) within that 
30-day period in accordance with 5 U.S.C. 9902(h), MSPB's regulations, 
and this subpart. If a party does not submit an RFR within the above 
time limit, the RFR will be dismissed as untimely filed unless a good 
reason for the delay is shown.
    (2) Department review process. (i) Thirty days after the timely 
filing of an RFR, the initial AJ decision will become the Department's 
final, nonprecedential decision, unless notice is served on the parties 
and MSPB within that 30-day period that the Department will act on the 
RFR. When no such notice is served, MSPB will docket and process a 
party's RFR as a petition for full MSPB review in accordance with 5 
U.S.C. 9902(h), MSPB's regulations, and this subpart. Timeframes will be 
established in implementing issuances for those instances where action 
is taken on an RFR.
    (ii) If a decision is made to act on the RFR, the other party to the 
case will be provided 15 days to respond to the RFR. An extension to the 
filing period may be granted for good cause. After receipt of a timely 
response to the RFR--
    (A) If a determination is made that there has been a material error 
of fact, or that there is new and material evidence available that, 
despite due diligence, was not available when the record closed, the 
matter will be remanded to the assigned AJ for further adjudication or a 
final DoD decision will be issued modifying or reversing that initial 
decision or decision after remand. Any remand will be served on all 
parties with an opportunity for those parties to comment to the AJ. An 
AJ decision after remand must be made no later than 30 days after the 
date of receipt of the remand. However, if the Department's remand order 
includes instructions to hold a hearing, the AJ decision will be made 
not later than 45 days after receipt of the remand order. Decisions on 
remand will be treated as initial decisions for purpose of further 
review.
    (B) Where it is determined that the initial AJ decision has a direct 
and substantial adverse impact on the Department's national security 
mission, or is based on an erroneous interpretation of law, 
Governmentwide rule or regulation, or this part, a final DoD decision 
will be issued modifying or reversing that initial decision; or
    (C) Where it is determined that the initial AJ decision should serve 
as precedent, a final DoD decision will be issued affirming that initial 
decision for such purposes.
    (3) Precedential effect. Any decision issued by the Department after 
reviewing an initial AJ decision is precedential unless--
    (i) The Secretary determines that the DoD decision is not 
precedential; or
    (ii) The final DoD decision is reversed or modified by the full 
MSPB.
    (4) Publication of decisions. Precedential DoD decisions will be 
published. Further details regarding the publication of DoD precedential 
decisions will be provided in implementing issuances.
    (h) Appeal of Department's final decision--(1) OPM Petition for 
Review. Any decision under paragraph (a)(2) of this section is final 
unless a party to the appeal or the Director of OPM petitions the full 
MSPB for review within 30 days. The Director, after consultation with 
the Secretary, may petition the full MSPB for review if the Director 
believes the decision is erroneous and will have a substantial impact on 
a civil service law, rule, regulation, or policy directive. MSPB, for 
good cause shown, may extend the filing period.
    (2) Petition for Review. (i) Upon receipt of a final DoD decision 
issued

[[Page 992]]

under paragraph (g)(2)(ii) of this section, an employee or OPM may file 
a PFR with the full MSPB within 30 days in accordance with 5 U.S.C. 
9902(h), MSPB's regulations, and this subpart.
    (ii) The Board may dismiss any petition that, in the view of the 
Board, does not raise substantial questions of fact or law.
    (iii) The full MSPB may order corrective action only if the Board 
determines that the decision was--
    (A) Arbitrary, capricious, and abuse of discretion, or otherwise not 
in accordance with law;
    (B) Obtained without procedures required by law, rule, or regulation 
having been followed; or
    (C) Unsupported by substantial evidence.
    (iv) Upon receipt of a petition for full MSPB review or an RFR that 
becomes a PFR as a result of the expiration of the Department's review 
period in accordance with paragraph (g)(2)(i) of this section, the other 
party to the case and/or OPM, as applicable, will have 30 days to file a 
response to the petition. The full MSPB will act on a PFR within 90 days 
after receipt of a timely response, or the expiration of the response 
period, as applicable, in accordance with 5 U.S.C. 9902(h), MSPB's 
regulations, and this subpart.
    (3) Request for reconsideration of final MSPB decision. The Director 
of OPM, after consultation with the Secretary, may seek reconsideration 
by MSPB of a final MSPB decision in accordance with 5 U.S.C. 7703(d), 
which is modified for this purpose. The Director of OPM must seek 
reconsideration within 35 days after the date of service of the Board's 
final order. If the Director seeks such reconsideration, the full MSPB 
must render its decision no later than 60 days after receipt of a 
response to OPM's petition in support of such reconsideration. The full 
MSPB must state the reasons for its decision.
    (4) Failure of MSPB to meet deadlines. Failure of MSPB to meet the 
deadlines imposed by paragraphs (f)(1), (h)(2)(iv), and (h)(3) of this 
section in a case will not prejudice any party to the case and will not 
form the basis for any legal action by any party. If the AJ or full MSPB 
fails to meet the above time limits, the full MSPB will inform the 
Secretary in writing of the cause of the delay and will recommend future 
actions to remedy the problem.
    (i) Judicial review. The Secretary or an employee adversely affected 
by a final order or decision of MSPB may seek judicial review under 5 
U.S.C. 9902(h)(6).



Sec. 9901.808  Appeals of mandatory removal actions.

    (a) Procedures for appeals of adverse actions to MSPB based on MROs 
will be the same as for other offenses except as otherwise provided by 
this section.
    (b) If one or more MROs are sustained, the MSPB AJ may not mitigate 
the penalty.
    (c) Only the Secretary may mitigate the penalty within the 
Department.
    (d) If the MSPB AJ or the full MSPB sustains an employee's appeal 
based on a finding that the employee did not commit an MRO, a subsequent 
proposed adverse action (other than an MRO) based in whole or in part on 
the same or similar evidence is not precluded.



Sec. 9901.809  Actions involving discrimination.

    (a) In considering any appeal of an action filed under 5 U.S.C. 
7702, the Board will apply the provisions of 5 U.S.C. 9902 and this 
part.
    (b) In any appeal of an action filed under 5 U.S.C. 7702 that 
results in a final Department decision, if no petition for review of the 
Department's decision is filed with the full Board, and if requested by 
the appellant, the Department will refer only the discrimination issue 
to the full Board for adjudication.
    (c) All references in 5 U.S.C. 7702 to 5 U.S.C. 7701 are modified to 
read 5 CFR part 9901, subpart H.



Sec. 9901.810  Savings provision.

    This subpart does not apply to adverse actions proposed prior to the 
date of an affected employee's coverage under this subpart.

[[Page 993]]



                  Subpart I_Labor-Management Relations



Sec. 9901.901  Purpose.

    This subpart contains the regulations which implement the provisions 
of 5 U.S.C. 9902(m) relating to the Department's labor-management 
relations system. This labor management relations system addresses the 
unique role that the Department's civilian workforce plays in supporting 
the Department's national security mission and promotes a collaborative 
issue-based approach to labor management relations. These regulations 
recognize the rights of DoD employees to organize and bargain 
collectively, as provided for in 5 U.S.C. 9902 and this part and subject 
to any exclusion from coverage or limitation on the scope of bargaining 
pursuant to law, including this part, issuances, and implementing 
issuances, applicable Presidential issuances (e.g., Executive orders), 
and any other applicable legal authority.



Sec. 9901.902  Scope of authority.

    When a specified category of employees is covered by the labor-
management relations system established under this subpart, the 
provisions of 5 U.S.C. 7101 through 7135 are modified and replaced by 
the provisions in this subpart with respect to that category, except as 
otherwise specified in this subpart. Implementing issuances may be 
prescribed to carry out the provisions of this subpart.



Sec. 9901.903  Definitions.

    In this subpart:
    Authority means the Federal Labor Relations Authority described in 5 
U.S.C. 7104(a).
    Board means the National Security Labor Relations Board established 
by this subpart.
    Collective bargaining means the performance of the mutual obligation 
of a management representative of the Department and an exclusive 
representative of employees in an appropriate unit in the Department to 
meet at reasonable times and to bargain in a good faith effort to reach 
agreement, pursuant to 5 U.S.C. 9902 and this subpart, with respect to 
the conditions of employment affecting such employees and to execute, if 
requested by either party, a written document incorporating any 
collective bargaining agreement reached, but the obligation referred to 
in this paragraph does not compel either party to agree to a proposal or 
to make a concession.
    Collective bargaining agreement means an agreement entered into as a 
result of collective bargaining pursuant to the provisions of 5 U.S.C. 
9902 and this subpart.
    Component means an organizational unit so prescribed and designated 
by the Secretary in his or her sole and exclusive discretion, such as, 
for example, the Office of the Secretary of Defense, a Military 
Department, a Defense Agency, or a DoD Field Activity.
    Conditions of employment means personnel policies, practices, and 
matters affecting working conditions--whether established by rule, 
regulation, or otherwise--except that such term does not include 
policies, practices, and matters relating to--
    (1) Political activities prohibited under 5 U.S.C. chapter 73, 
subchapter III;
    (2) The classification of any position, including any classification 
determinations under subpart B of this part;
    (3) The pay of any employee or for any position, including any 
determinations regarding pay or adjustments thereto under subpart C of 
this part; or
    (4) Any matters specifically provided for by Federal statute.
    Confidential employee means an employee who acts in a confidential 
capacity with respect to an individual who formulates or effectuates 
management policies in the field of labor-management relations.
    Consult means to consider the interests, opinions, and 
recommendations of a recognized labor organization in rendering 
decisions. This can be accomplished in face-to-face meetings or through 
other means, e.g., teleconferencing, e-mail, and written communications.
    Dues means dues, fees, and assessments.
    Exclusive representative means any labor organization which is 
recognized

[[Page 994]]

as the exclusive representative of employees in an appropriate unit 
consistent with the Department's organizational structure, pursuant to 5 
U.S.C. 7111 or as otherwise provided by Sec. 9901.911.
    FMCS means Federal Mediation and Conciliation Service.
    Grade means a level of work under a position classification or job 
grading system.
    Grievance means any complaint--
    (1) By any employee concerning any matter relating to the conditions 
of employment of the employee;
    (2) By any labor organization concerning any matter relating to the 
conditions of employment of any employee; or
    (3) By any employee, labor organization, or the Department 
concerning--
    (i) The effect or interpretation, or a claim of breach, of a 
collective bargaining agreement; or
    (ii) Any claimed violation, misinterpretation, or misapplication of 
any law, rule, regulation, or issuance issued for the purpose of 
affecting conditions of employment.
    Implementing issuance or issuances has the meaning given that term 
in Sec. 9901.103.
    Issuance or issuances means a document issued by the Secretary, 
Deputy Secretary, Principal Staff Assistants (as authorized by the 
Secretary), or Secretaries of the Military Departments to carry out a 
policy or procedure of the Department other than those issuances 
implementing this part.
    Labor organization has the meaning given that term in Sec. 
9901.103.
    Management official means an individual employed by the Department 
in a position the duties and responsibilities of which require or 
authorize the individual to formulate, determine, or influence the 
policies of the Department.
    Person has the meaning given that term in 5 U.S.C. 7103(a)(1).
    Professional employee has the meaning given that term in 5 U.S.C. 
7103(a)(15).
    Supervisor means an individual employed by the Department having 
authority in the interest of the Department to hire, direct, assign, 
promote, reward, transfer, furlough, layoff, recall, suspend, 
discipline, or remove employees; to adjust their grievances; or to 
effectively recommend such action, if the exercise of the authority is 
not merely routine or clerical in nature but requires the consistent 
exercise of independent judgment, except that, with respect to any unit 
which includes firefighters or nurses, the term ``supervisor'' includes 
only those individuals who devote a preponderance of their employment 
time to exercising such authority. It also means an individual employed 
by the Department who exercises supervisory authority over military 
members of the armed services, such as directing or assigning work or 
evaluating or recommending evaluations.



Sec. 9901.904  Coverage.

    (a) Employees covered. This subpart applies to eligible DoD 
employees, subject to a determination by the Secretary under Sec. 
9901.102(b)(1), except as provided in paragraph (b) of this section. DoD 
employees who would otherwise be eligible for bargaining unit membership 
under 5 U.S.C. chapter 71, as modified by Sec. 9901.912, are eligible 
for bargaining unit membership under this subpart. In addition, this 
subpart applies to an employee whose employment in the Department has 
ceased because of any unfair labor practice under Sec. 9901.916 of this 
subpart and who has not obtained any other regular and substantially 
equivalent employment.
    (b) Employees excluded. This subpart does not apply to--
    (1) An alien or noncitizen of the United States who occupies a 
position outside the United States;
    (2) A military member of the armed services;
    (3) A supervisor or a management official;
    (4) Any person who participates in a strike in violation of 5 U.S.C. 
7311; or
    (5) Any employee excluded pursuant to Sec. 9901.912 or any other 
legal authority.



Sec. 9901.905  Impact on existing agreements.

    (a) Any provision of a collective bargaining agreement that is 
inconsistent with this part and/or implementing

[[Page 995]]

issuances is unenforceable on the effective date of the applicable 
subpart(s) or such issuances. The exclusive representative may appeal a 
determination that a provision is unenforceable to the National Security 
Labor Relations Board in accordance with the procedures and time limits 
pursuant to Sec. 9901.908 and the Board's regulations. However, the 
Secretary, in his or her sole and exclusive discretion, may continue all 
or part of a particular provision(s) with respect to a specific category 
or categories of employees and may cancel such continuation at any time; 
such determinations are not precedential.
    (b) Upon request by an exclusive representative, the parties will 
have 60 days after the effective date of coverage under the applicable 
subpart and/or implementing issuance to bring into conformance those 
remaining negotiable collective bargaining agreement provisions directly 
affected by the collective bargaining agreement provisions rendered 
unenforceable by the applicable subpart and/or implementing issuance. 
During that period, the parties may utilize the negotiation impasse 
provisions of Sec. 9901.920 to assist in resolving any impasses.
    (c) Any provision of a collective bargaining agreement that is 
inconsistent with an issuance remains in effect until the expiration, 
renewal, or extension of the term of the agreement, whichever occurs 
first.



Sec. 9901.906  Employee rights.

    Each employee has the right to form, join, or assist any labor 
organization, or to refrain from any such activity, freely and without 
fear of penalty or reprisal, and each employee will be protected in the 
exercise of such right. Except as otherwise provided under this subpart, 
such right includes the right--
    (a) To act for a labor organization in the capacity of a 
representative and the right, in that capacity, to present the views of 
the labor organization to heads of agencies and other officials of the 
executive branch of the Government, the Congress, or other appropriate 
authorities; and
    (b) To engage in collective bargaining with respect to conditions of 
employment through representatives chosen by employees under this 
subpart.



Sec. 9901.907  National Security Labor Relations Board.

    (a) The Secretary has sole, exclusive, and unreviewable authority to 
determine the effective date for the establishment of the National 
Security Labor Relations Board.
    (b)(1) The National Security Labor Relations Board is composed of at 
least three members who are appointed by the Secretary for terms of 3 
years, except that the appointments of the initial Board members will be 
for terms of 1, 2, and 3 years, respectively. The Secretary may extend 
the term of any member beyond 3 years when necessary to provide for an 
orderly transition and/or appoint the member for up to two additional 1-
year terms. The Secretary, in his or her sole and exclusive discretion, 
may appoint additional members to the Board; in so doing, he or she will 
make such appointments to ensure that the Board consists of an odd 
number of members.
    (2) Members of the Board will be independent, distinguished citizens 
of the United States who are well known for their integrity, 
impartiality, and expertise in labor relations, and/or the DoD mission 
and/or other related national security matters, and will be able to 
acquire and maintain an appropriate security clearance. Members may be 
removed by the Secretary only for inefficiency, neglect of duty, or 
malfeasance in office.
    (3) An individual chosen to fill a vacancy on the Board will be 
appointed for the unexpired term of the member who is replaced and, at 
the Secretary's option, an additional term or terms.
    (c) Appointment of the Chair. The Secretary, at his or her sole and 
exclusive discretion, will appoint one member to serve as Chair of the 
NSLRB.
    (d) Appointment procedures for non-Chair NSLRB members. (1) The 
appointments of the two non-Chair NSLRB members will be made by the 
Secretary, at his or her sole and exclusive discretion, after he or she 
considers any lists of nominees submitted by labor organizations that 
represent employees in the Department.

[[Page 996]]

    (2) The submission of lists of recommended nominees by labor 
organizations must be in accordance with timelines and requirements set 
forth by the Secretary, who may provide for consultation in order to 
obtain further information about a recommended nominee. The ability of 
the Secretary to appoint NSLRB members may not be delayed or otherwise 
affected by the failure of any labor organization to provide a list of 
nominees that meets the timeframe and requires established by the 
Secretary.
    (e) Appointment of additional non-Chair NSLRB members. If the 
Secretary determines that additional members are needed, he or she may, 
subject to the criteria set forth in paragraph (b)(2) of this section, 
appoint the additional members according to the procedures established 
by paragraph (d) of this section.
    (f) A Board vacancy will be filled according to the procedure used 
to appoint the member whose position was vacated.
    (g)(1) The Board will establish procedures for the fair, impartial, 
and expeditious assignment and disposition of cases, including standards 
for asserting or declining jurisdiction.
    (2) To the extent practicable, the Board will use a single, 
integrated process to address all matters associated with a negotiations 
dispute, including unfair labor practices, negotiability disputes, and 
bargaining impasses. The Board may, pursuant to its regulations, use a 
combination of mediation, factfinding, and any other appropriate dispute 
resolution methods to resolve all such disputes at the earliest 
practicable time and with a minimum administrative burden.
    (3) A vote of the majority of the Board (or a three-person panel of 
the Board) will be final. A vacancy on the Board does not impair the 
right of the remaining members to exercise all of the powers of the 
Board. The vote of the Chair will be dispositive in the event of a tie.
    (h) Decisions of the Board are final and binding.



Sec. 9901.908  Powers and duties of the Board.

    (a) Section 9902(m)(6) of title 5, U.S. Code, requires that the 
labor relations system established under this subpart provide for an 
independent third party review of labor relations issues set out in 
Sec. 9901.908(b), including defining the third party to provide the 
review. Notwithstanding Sec. 9901.907 and pending establishment of the 
Board, the Secretary, in consultation with the Director, may designate a 
third party to exercise the authority of the Board in accordance with 
this subpart.
    (b) The Board may to the extent provided in this subpart and in 
accordance with regulations prescribed by the Board--
    (1) Conduct investigations and hearings, and resolve allegations of 
unfair labor practices, including allegations concerning strikes, work 
stoppages, slowdowns, and picketing, or condoning such activity by 
failing to take action to prevent or stop such activity;
    (2) Resolve issues relating to the scope of bargaining and the duty 
to bargain in good faith under Sec. 9901.917;
    (3) Resolve exceptions to arbitration awards. In doing so, the Board 
will conduct any review of an arbitral award in accordance with 5 U.S.C. 
7122(a) as modified in Sec. 9901.923;
    (4) Resolve negotiation impasses in accordance with Sec. 9901.920;
    (5) Conduct de novo review involving all matters within the Board's 
jurisdiction; and
    (6) Have discretion to evaluate the evidence presented in the record 
and reach its own independent conclusions with respect to the matters at 
issue, but in no case may the Board issue status quo ante remedies, 
where such remedies are not intended to cure egregious violations of 
this subpart or where such an award would impose an economic hardship or 
interfere with the efficiency or effectiveness of the Department's 
mission or impact national security.
    (c) In any case in which the Board or its authorized agent, in the 
Board's or the agent's unreviewable discretion, declines to adjudicate 
any unfair labor practice allegation(s) because the allegation(s) was 
not timely filed, fails to

[[Page 997]]

state an unfair labor practice, or for other appropriate reasons, the 
Board or the agent, as applicable, will provide the person making the 
allegation(s) a written statement of the reasons for such determination.
    (d) Upon the request of a DoD Component or a labor organization 
concerned, the Board may issue guidance for matters within its 
jurisdiction.
    (e) The Board's decisions will be written and published.



Sec. 9901.909  Powers and duties of the Federal Labor Relations Authority.

    (a) To the extent provided in this subpart (pursuant to the 
authority in 5 U.S.C. 9902), the Federal Labor Relations Authority, in 
accordance with conforming regulations prescribed by the Authority, 
may--
    (1) Determine the appropriateness of bargaining units pursuant to 
the provisions of Sec. 9901.912;
    (2) Supervise or conduct elections to determine whether a labor 
organization has been selected as an exclusive representative by a 
majority of the employees in an appropriate unit and otherwise 
administer 5 U.S.C. 7111 (relating to the according of exclusive 
recognition to labor organizations), which is not waived for the purpose 
of this subpart;
    (3) Resolve disputes regarding the granting of national consultation 
rights; and
    (4) Upon request of a party, review only those Board decisions on--
    (i) Unfair labor practices, except those issued under Sec. 
9901.908(c);
    (ii) Arbitral awards under Sec. 9901.908; and
    (iii) Negotiability disputes.
    (b) In any matter filed with the Authority, if the responding party 
believes that the Authority lacks jurisdiction, that party will timely 
raise the issue with the Authority and simultaneously file a copy of its 
response with the Board in accordance with regulations established by 
the Authority. The Authority will promptly transfer the case to the 
Board, which will determine whether the matter is within the Board's 
jurisdiction. If the Board determines that the matter is not within its 
jurisdiction, the Board will return the matter to the Authority for a 
decision on the merits of the case. The Board's determination with 
regard to its jurisdiction in a particular matter is final and not 
subject to review by the Authority. The Authority will promptly decide 
those cases that the Board has determined are within the jurisdiction of 
the Authority.
    (c)(1) To obtain review by the Authority of a Board decision, a 
party will request a review of the record of a Board decision by the 
Authority by filing such a request in writing within 15 days after the 
issuance of the decision. A copy of the request will be served on all 
parties. Within 15 days after service of the request, any response will 
be filed. The Authority will establish, in conjunction with the Board, 
standards for the sufficiency of the record and other procedures, 
including notice to the parties. The Authority will accept the findings 
of fact and interpretations of this part made by the Board and sustain 
the Board's decision unless the requesting party shows that the Board's 
decision was--
    (i) Arbitrary, capricious, an abuse of discretion, or otherwise not 
in accordance with law;
    (ii) Caused by harmful error in the application of the Board's 
procedures in arriving at such decision; or
    (iii) Unsupported by substantial evidence.
    (2) The Authority will complete its review of the record and issue a 
final decision within 30 days after receiving the party's response to 
such request for review. If the Authority does not issue a final 
decision within this mandatory time limit, the Authority will be 
considered to have denied the request for review of the Board's 
decision, which will constitute a final decision of the Authority and is 
subject to judicial review in accordance with 5 U.S.C. 7123.
    (d) Judicial review of any Authority decision is as prescribed in 5 
U.S.C. 7123(a). The references in 5 U.S.C. 7123(a) to other provisions 
in 5 U.S.C. chapter 71 are considered to be references to those 
particular provisions as modified by this subpart.



Sec. 9901.910  Management rights.

    (a) Subject to paragraphs (b) through (e) of this section, nothing 
in this subpart may affect the authority of any

[[Page 998]]

management official or supervisor of the Department--
    (1) To determine the mission, budget, organization, number of 
employees, and internal security practices of the Department;
    (2) To hire, assign, and direct employees in the Department; to 
assign work, make determinations with respect to contracting out, and to 
determine the personnel by which Departmental operations may be 
conducted; to determine the numbers, types, pay schedules, pay bands 
and/or grades of employees or positions assigned to any organizational 
subdivision, work project or tour of duty, and the technology, methods, 
and means of performing work; to assign employees to meet any 
operational demand; and to take whatever other actions may be necessary 
to carry out the Department's mission; and
    (3) To lay off and retain employees, or to suspend; remove; reduce 
in pay, pay band, or grade; or take other disciplinary action against 
such employees or, with respect to filling positions, to make selections 
for appointments from properly ranked and certified candidates for 
promotion or from any other appropriate source.
    (b) Management is prohibited from bargaining over the exercise of 
any authority under paragraph (a) of this section or the procedures that 
it will observe in exercising the authorities set forth in paragraphs 
(a)(1) and (a)(2) of this section.
    (c) Notwithstanding paragraph (b) of this section, the Secretary in 
his or her sole, exclusive, and unreviewable discretion, may authorize 
bargaining over the procedures that will be observed in exercising the 
authorities set forth in paragraphs (a)(1) and (a)(2) of this section. 
This authorization will be based on a determination by the Secretary, in 
his or her sole, exclusive, and unreviewable discretion, that bargaining 
is necessary to advance the Department's mission or promote 
organizational effectiveness. Any specific authorization remains in 
effect until an agreement is reached or management withdraws from 
negotiations, whichever occurs first.
    (d) Unless the Secretary elects to bargain under paragraph (c) of 
this section, management will consult at the request of an exclusive 
representative as required under Sec. 9901.917 over the procedures that 
will be observed in exercising the authorities set forth in paragraphs 
(a)(1) and (a)(2) of this section. Consultation does not require that 
the parties reach agreement on any covered matter. The parties may, upon 
mutual agreement, provide for FMCS or another third party to assist in 
this process. Neither the Board nor the Authority may intervene in this 
process.
    (e) If an obligation exists under Sec. 9901.917 to bargain or 
consult regarding any authority under paragraph (a) of this section, 
management will provide notice to the exclusive representative 
concurrently with the exercise of that authority. However, at its sole, 
exclusive, and unreviewable discretion, management may provide notice to 
an exclusive representative of its intention to exercise an authority 
under paragraph (a) of this section as far in advance as practicable. 
Further, nothing in paragraph (e) of this section establishes an 
independent right to bargain or consult.
    (f) When an obligation exists under Sec. 9901.917, management will 
provide notice to the exclusive representative and an opportunity to 
present its views and recommendations regarding the exercise of an 
authority under paragraph (a) of this section, and the parties will 
bargain at the level of recognition (unless otherwise delegated below 
that level, at their mutual agreement, or as provided for in Sec. Sec. 
9901.917 and 9901.918) over otherwise negotiable--
    (1)(i) Appropriate arrangements for employees adversely affected by 
the exercise of any authority under paragraph (a)(3) of this section and 
procedures which management officials and supervisors will observe in 
exercising any authority under paragraph (a)(3) of this section; and
    (ii) Appropriate arrangements for employees adversely affected by 
the exercise of any authority under paragraphs (a)(1) and (a)(2) of this 
section. Appropriate arrangements within the duty to bargain include 
proposals on matters such as personal hardships and safety measures.

[[Page 999]]

    (2) Appropriate arrangements within the duty to bargain do not 
include proposals on matters such as the routine assignment to specific 
duties, shifts, or work on a regular or overtime basis except when the 
Secretary in his or her sole, exclusive, and unreviewable discretion 
authorizes such bargaining. This authorization will be based on a 
determination by the Secretary, in his or her sole, exclusive, and 
unreviewable discretion, that bargaining is necessary to advance the 
Department's mission or promote organizational effectiveness. Any 
specific authorization remains in effect until an agreement is reached 
or management withdraws from negotiations, whichever occurs first.
    (g) Where a proposal falls within the coverage of both paragraph 
(a)(1) and (a)(3) of this section or paragraph (a)(2) and (a)(3) of this 
section, the matter will be determined to be covered by paragraph (a)(1) 
or (a)(2) of this section for the purpose of collective bargaining.
    (h) Any mid-term agreements, reached with respect to paragraphs (c), 
(f)(1)(ii), or (f)(2) of this section will not be precedential or 
binding on subsequent acts, or retroactively applied, except at the 
Secretary's sole, exclusive, and unreviewable discretion.
    (i) Nothing will delay or prevent the Secretary from exercising his 
or her authority under this subpart.



Sec. 9901.911  Exclusive recognition of labor organizations.

    Exclusive recognition will be accorded to a labor organization if 
the organization has been selected as the representative, in a secret 
ballot election, by a majority of the employees, in an appropriate unit 
as determined by the Authority, who cast valid ballots in the election.



Sec. 9901.912  Determination of appropriate units for labor organization representation.

    (a) The Authority will determine the appropriateness of any unit. 
The Authority will determine in each case whether, in order to ensure 
employees the fullest freedom in exercising the rights guaranteed under 
this subpart, the appropriate unit should be established on a 
Department, plant, installation, functional, or other basis and will 
determine any unit to be an appropriate unit only if the determination 
will ensure a clear and identifiable community of interest among the 
employees in the unit and will promote effective dealings with, and 
efficiency of the operations of the Department, consistent with the 
Department's mission and organizational structure and Sec. 9901.107(a).
    (b) A unit may not be determined to be appropriate under this 
section solely on the basis of the extent to which employees in the 
proposed unit have organized, nor may a unit be determined to be 
appropriate if it includes--
    (1) Except as provided under 5 U.S.C. 7135(a)(2), which is not 
waived for the purpose of this subpart, any management official or 
supervisor;
    (2) A confidential employee;
    (3) An employee engaged in personnel work in other than a purely 
clerical capacity;
    (4) An employee engaged in administering the provisions of this 
subpart;
    (5) Both professional employees and other employees, unless a 
majority of the professional employees vote for inclusion in the unit;
    (6) Any employee engaged in intelligence, counterintelligence, 
investigative, or security work which directly affects national 
security; or
    (7) Any employee primarily engaged in investigation or audit 
functions relating to the work of individuals employed by the Department 
whose duties directly affect the internal security of the Department, 
but only if the functions are undertaken to ensure that the duties are 
discharged honestly and with integrity.
    (c) Any employee who is engaged in administering any provision of 
law or this subpart relating to labor-management relations may not be 
represented by a labor organization--
    (1) Which represents other individuals to whom such provision or 
subpart applies; or
    (2) Which is affiliated directly or indirectly with an organization 
which represents other individuals to whom such provision or subpart 
applies.
    (d) Two or more units in the Department for which a labor 
organization is

[[Page 1000]]

the exclusive representative may, upon petition by the Secretary or 
labor organization, be consolidated with or without an election into a 
single larger unit if the Authority considers the larger unit to be 
appropriate. The Authority will certify the labor organization as the 
exclusive representative of the new larger unit.



Sec. 9901.913  National consultation.

    (a) If, in connection with the Department or Component, no labor 
organization has been accorded exclusive recognition on a Department or 
Component basis, a labor organization that is the exclusive 
representative of a substantial number of the employees of the 
Department or Component, as determined in accordance with criteria 
prescribed by the Authority, will be granted national consultation 
rights by the Department or Component. National consultation rights will 
terminate when the labor organization no longer meets the criteria 
prescribed by the Authority. Any issue relating to any labor 
organization's eligibility for, or continuation of, national 
consultation rights will be subject to determination by the Authority.
    (b)(1) Any labor organization having national consultation rights in 
connection with any Department or Component under subsection (a) of this 
section will--
    (i) Be informed of any substantive change in conditions of 
employment proposed by the Department or Component; and
    (ii) Be permitted reasonable time to present its views and 
recommendations regarding the changes.
    (2) If any views or recommendations are presented under paragraph 
(b)(1) of this subsection to the Department or Component by any labor 
organization--
    (i) The Department or Component will consider the views or 
recommendations before taking final action on any matter with respect to 
which the views or recommendations are presented; and
    (ii) The Department or Component will provide the labor organization 
a written statement of the reasons for taking the final action.
    (c) Section 9901.913(b) does not apply where the proposed change is 
bargained at the national level or where continuing collaboration 
procedures under Sec. 9901.106 apply.
    (d) Nothing in this section precludes the Department or the 
Component from seeking views and recommendations from labor 
organizations having exclusive representation within the Department or 
Component which do not have national consultation rights.
    (e) Nothing in this section will be construed to limit the right of 
the agency or exclusive representative to engage in collective 
bargaining.



Sec. 9901.914  Representation rights and duties.

    (a)(1) A labor organization which has been accorded exclusive 
recognition is the exclusive representative of the employees in the unit 
it represents and is entitled to act for, and negotiate collective 
bargaining agreements covering, all employees in the unit. An exclusive 
representative is responsible for representing the interests of all 
employees in the unit it represents without discrimination and without 
regard to labor organization membership.
    (2) An exclusive representative of an appropriate unit will be given 
the opportunity to be represented at--
    (i) Any formal discussion between a Department management 
official(s) and bargaining unit employees, the purpose of which is to 
discuss and/or announce new or substantially changed personnel policies, 
practices, or working conditions. This right does not apply to meetings 
between a management official(s) and bargaining unit employees for the 
purpose of discussing operational matters where any discussion of 
personnel policies, practices or working conditions--
    (A) Constitutes a reiteration or application of existing personnel 
policies, practices, or working conditions;
    (B) Is incidental or otherwise peripheral to the announced purpose 
of the meeting; or
    (C) Does not result in an announcement of a change to, or a promise 
to change, an existing personnel policy(s), practice(s), or working 
condition(s);
    (ii) Any discussion between one or more Department representatives 
and one or more bargaining unit employees concerning any grievance filed 
under the negotiated grievance procedure;

[[Page 1001]]

    (iii) Any examination of a bargaining unit employee by a 
representative of the Department in connection with an investigation if 
the employee reasonably believes that the examination may result in 
disciplinary action against the employee and the employee requests such 
representation; or
    (iv) Any discussion between one or more Department representatives 
and one or more bargaining unit employees in connection with a formal 
complaint of discrimination only if the employee(s), in his or her sole 
and exclusive discretion, requests such representation.
    (3) Bargaining unit employees will be informed annually of their 
rights under paragraph (a)(2)(iii) of this section.
    (4) Employee representatives employed by the Department are subject 
to the same expectations regarding conduct as any other employee, 
whether they are serving in their representative capacity or not.
    (5) Except in the case of grievance procedures negotiated under this 
subpart, the rights of an exclusive representative under this section 
may not be construed to preclude an employee from--
    (i) Being represented by an attorney or other representative of the 
employee's own choosing, other than the exclusive representative, in any 
grievance or appeal action; or
    (ii) Exercising grievance or appellate rights established by law, 
rule, or regulation.
    (b) The duty of the Secretary or appropriate Component(s) of the 
Department and an exclusive representative to negotiate in good faith 
under paragraph (a) of this section includes the obligation--
    (1) To approach the negotiations with a sincere resolve to reach a 
collective bargaining agreement;
    (2) To be represented at the negotiations by duly authorized 
representatives prepared to discuss and negotiate on any condition of 
employment;
    (3) To meet at reasonable times and convenient places as frequently 
as may be necessary, and to avoid unnecessary delays;
    (4) If agreement is reached, to execute on the request of any party 
to the negotiation, a written document embodying the agreed terms, and 
to take such steps as are necessary to implement such agreement; and
    (5) In the case of the Department or appropriate Component(s) of the 
Department, to furnish information to an exclusive representative, or 
its authorized representative, when--
    (i) Such information exists, is normally maintained in the regular 
course of business, and is reasonably available;
    (ii) The exclusive representative has requested such information and 
demonstrated a particularized need for the information in order to 
perform its representational functions in grievance or unfair labor 
practice proceedings, or in negotiations; and
    (iii) Disclosure is not prohibited by law.
    (c) Disclosure of information in paragraph (b)(5) of this section 
does not include the following:
    (1) Disclosure prohibited by law or regulations, including, but not 
limited to, the regulations in this part, Governmentwide rules and 
regulations, Departmental implementing issuances and other policies and 
regulations, and Executive orders;
    (2) Disclosure of information if adequate alternative means exist 
for obtaining the requested information, or if proper discussion, 
understanding, or negotiation of a particular subject within the scope 
of collective bargaining is possible without recourse to the 
information;
    (3) Internal Departmental guidance, counsel, advice, or training for 
managers and supervisors relating to collective bargaining;
    (4) Any disclosures where an authorized official has determined that 
disclosure would compromise the Department's mission, security, or 
employee safety; and
    (5) Personal addresses, personal telephone numbers, personal e-mail 
addresses, or any other information not related to an employee's work.
    (d)(1) An agreement between the Department or appropriate 
Component(s) of the Department and the exclusive representative is 
subject to approval by the Secretary.
    (2) The Secretary will approve the agreement within 30 days after 
the

[[Page 1002]]

date the agreement is executed if the agreement is in accordance with 
the provisions of these regulations and any other applicable law, rule, 
regulation, issuance, or implementing issuance.
    (3) If the Secretary does not approve or disapprove the agreement 
within the 30-day period specified in paragraph (d)(2) of this section, 
the agreement will take effect and is binding on the Department or 
Component(s), as appropriate, and the exclusive representative, but only 
to the extent it is consistent with Federal law, Presidential issuance 
(e.g., Executive order), Governmentwide regulations, issuances and 
implementing issuances, or the regulations in this part.
    (4) A local agreement subject to a national or other controlling 
agreement at a higher level may be approved under the procedures of the 
controlling agreement or, if none, under Departmental regulations. 
Bargaining will be at the level of recognition except where delegated.
    (5) Provisions in existing collective bargaining agreements are 
unenforceable if they are contrary to Federal law, Presidential issuance 
(e.g., Executive order), the regulations in this part, or implementing 
issuances. Provisions in existing collective bargaining agreements that 
are inconsistent with Governmentwide regulations or issuances (other 
than implementing issuances), are unenforceable upon expiration, 
extension, renewal, or renegotiation of the collective bargaining 
agreement, whichever occurs first.



Sec. 9901.915  Allotments to representatives.

    (a) If the Department has received from an employee in an 
appropriate unit a properly executed written or electronic assignment 
which authorizes the Department to deduct from the pay of the employee 
amounts for the payment of regular and periodic dues and other financial 
assessments of the exclusive representative of the unit, the Department 
will honor the assignment and make an appropriate allotment pursuant to 
the assignment. Any such allotment will be made at no cost to the 
exclusive representative or the employee. Except as provided under 
paragraph (b) of this section, any such assignment may not be revoked 
for a period of 1 year.
    (b) An allotment under paragraph (a) of this section for the 
deduction of dues with respect to any employee terminates when--
    (1) The agreement between the Department or Department Component and 
the exclusive representative involved ceases to be applicable to the 
employee; or
    (2) The employee is suspended or expelled from membership by the 
exclusive representative.
    (c)(1) Subject to paragraph (c)(2) of this section, if a petition 
has been filed with the Authority by a labor organization alleging that 
10 percent of the employees in an appropriate unit in the Department 
have membership in the labor organization, the Authority will 
investigate the petition to determine its validity. Upon certification 
by the Authority of the validity of the petition, the Department has a 
duty to negotiate with the labor organization solely concerning the 
deduction of dues of the labor organization from the pay of the members 
of the labor organization who are employees in the unit and who make a 
voluntary allotment for such purpose.
    (2)(i) The provisions of paragraph (c)(1) of this section do not 
apply in the case of any appropriate unit for which there is an 
exclusive representative.
    (ii) Any agreement under paragraph (c)(1) of this section between a 
labor organization and the Department or Department Component with 
respect to an appropriate unit becomes null and void upon the 
certification of an exclusive representative of the unit.



Sec. 9901.916  Unfair labor practices.

    (a) For the purpose of this subpart, it is an unfair labor practice 
for the Department--
    (1) To interfere with, restrain, or coerce any employee in the 
exercise by the employee of any right under this subpart;
    (2) To encourage or discourage membership in any labor organization 
by discrimination in connection with hiring, tenure, promotion, or other 
conditions of employment;
    (3) To sponsor, control, or otherwise assist any labor organization, 
other

[[Page 1003]]

than to furnish, upon request, customary and routine services and 
facilities on an impartial basis to other labor organizations having 
equivalent status;
    (4) To discipline or otherwise discriminate against an employee 
because the employee has filed a complaint or petition, or has given any 
information or testimony under this subpart;
    (5) To refuse, as determined by the Board, to negotiate in good 
faith or to consult with a labor organization, as required by this 
subpart;
    (6) To fail or refuse, as determined by the Board, to cooperate in 
impasse procedures and impasse decisions, as required by this subpart;
    (7) To enforce any issuance (other than an implementing issuance), 
or Governmentwide regulation, which is in conflict with an applicable 
collective bargaining agreement if the agreement was in effect before 
the issuance or regulation was prescribed.
    (8) To fail or refuse otherwise to comply with any provision of this 
subpart.
    (b) For the purpose of this subpart, it is an unfair labor practice 
for a labor organization--
    (1) To interfere with, restrain, or coerce any employee in the 
exercise by the employee of any right under this subpart;
    (2) To cause or attempt to cause the Department to discriminate 
against any employee in the exercise by the employee of any right under 
this subpart;
    (3) To coerce, discipline, fine, or attempt to coerce a member of 
the labor organization as punishment, reprisal, or for the purpose of 
hindering or impeding the member's work performance or productivity as 
an employee or the discharge of the member's duties as an employee;
    (4) To discriminate against an employee with regard to the terms and 
conditions of membership in the labor organization on the basis of race, 
color, creed, national origin, sex, age, preferential or nonpreferential 
civil service status, political affiliation, marital status, or 
handicapping condition;
    (5) To refuse, as determined by the Board, to negotiate in good 
faith or to consult with the Department as required by this subpart;
    (6) To fail or refuse, as determined by the Board, to cooperate in 
impasse procedures and impasse decisions as required by this subpart;
    (7)(i) To call, or participate in, a strike, work stoppage, or 
slowdown, or picketing of the Department in a labor-management dispute 
if such picketing interferes with an agency's operations; or
    (ii) To condone any activity described in paragraph (b)(7)(i) of 
this section by failing to take action to prevent or stop such activity; 
or
    (8) To otherwise fail or refuse to comply with any provision of this 
subpart.
    (c) Notwithstanding paragraph (b)(7) of this section, informational 
picketing which does not interfere with the Department's operations will 
not be considered an unfair labor practice.
    (d) For the purpose of this subpart, it is an unfair labor practice 
for an exclusive representative to deny membership to any employee in 
the appropriate unit represented by the labor organization, except for 
failure to meet reasonable occupational standards uniformly required for 
admission or to tender dues uniformly required as a condition of 
acquiring and retaining membership. This does not preclude any labor 
organization from enforcing discipline in accordance with procedures 
under its constitution or bylaws to the extent consistent with the 
provisions of this subpart.
    (e) The Board will not consider any allegation of an unfair labor 
practice filed more than 6 months after it occurred, unless the Board 
determines, pursuant to its regulations, that there is good cause for 
the late filing.
    (f) Unfair labor practice issues which can properly be raised under 
an appeals procedure may not be raised as unfair labor practices 
prohibited under this section. Except where an employee has an option of 
using the negotiated grievance procedure or an appeals procedure in 
connection with an adverse action, issues which can be raised under a 
grievance procedure may, in the discretion of the aggrieved party, be 
raised under the grievance procedure or as an unfair labor practice 
under this section, but not under both procedures.

[[Page 1004]]

    (g) The expression of any personal view, argument, opinion, or the 
making of any statement which publicizes the fact of a representational 
election and encourages employees to exercise their right to vote in 
such an election, corrects the record with respect to any false or 
misleading statement made by any person, or informs employees of the 
Government's policy relating to labor-management relations and 
representation, will not, if the expression contains no threat of 
reprisal or force or promise of benefit or was not made under coercive 
conditions--
    (1) Constitute an unfair labor practice under any provision of this 
subpart; or
    (2) Constitute grounds for the setting aside of any election 
conducted under any provision of this subpart.



Sec. 9901.917  Duty to bargain and consult.

    (a) The Department or appropriate Component(s) of the Department and 
any exclusive representative in any appropriate unit in the Department, 
through appropriate representatives, will meet and negotiate in good 
faith as provided by this subpart for the purpose of arriving at a 
collective bargaining agreement. In addition, the Department or 
appropriate Component(s) of the Department and the exclusive 
representative may determine appropriate techniques, consistent with the 
operational rules of the Board, to assist in any negotiation.
    (b) If bargaining over an initial collective bargaining agreement or 
any successor agreement is not completed within 90 days after such 
bargaining begins, the parties may mutually agree to continue 
bargaining, or either party may refer the matter to the Board for 
resolution in accordance with procedures established by the Board. At 
any time prior to going to the Board, either party may refer the matter 
to FMCS for assistance.
    (c) If the parties bargain during the term of an existing collective 
bargaining agreement, or in the absence of a collective bargaining 
agreement, over a proposed change affecting bargaining unit employees' 
conditions of employment, and no agreement is reached within 30 days 
after such bargaining begins, the parties may mutually agree to continue 
bargaining, or either party may refer the matter to the Board for 
resolution in accordance with procedures established by the Board. 
Either party may refer the matter to FMCS for assistance at any time.
    (d)(1) Management may not bargain over any matters that are 
inconsistent with law or the regulations in this part, Governmentwide 
rules and regulations, issuances and implementing issuances, or 
Executive orders.
    (2) Except as otherwise provided in Sec. 9901.910(d), management 
has no obligation to bargain or consult over a change to a condition of 
employment unless the change is otherwise negotiable pursuant to these 
regulations and is foreseeable, substantial, and significant in terms of 
both impact and duration on the bargaining unit, or on those employees 
in that part of the bargaining unit affected by the change.
    (3) Nothing in paragraphs (b) or (c) of this section prevents 
management from exercising the rights enumerated in Sec. 9901.910.
    (e) If a management official involved in collective bargaining with 
an exclusive representative alleges that the duty to bargain in good 
faith does not extend to any matter, the exclusive representative may 
appeal the allegation to the Board in accordance with procedures 
established by the Board.



Sec. 9901.918  Multi-unit bargaining.

    (a) Negotiations can occur at geographical or organizational levels 
within DoD or a Component with the local exclusive representatives 
impacted by the proposed change.
    (b) Any such negotiations will--
    (1) Be binding on all parties afforded the opportunity to bargain 
with representatives of DoD or the Component;
    (2) Supersede all conflicting provisions of applicable collective 
bargaining agreements of the labor organization(s) affected by the 
negotiations; and
    (3) Be subject to impasse resolution by the Board under procedures 
prescribed by the Board. In resolving impasses, the Board will ensure 
that agreement provisions are consistent with regard to all similarly 
situated employees. The determination as to

[[Page 1005]]

which organizations are covered under multi-unit bargaining is not 
subject to review by the Board.
    (c) When agreement is reached under this section, individual 
bargaining units cannot opt out of or veto the agreement.
    (d) Any party may request the services of FMCS to assist with these 
negotiations.
    (e) Labor organizations may request multi-unit bargaining, as 
appropriate. The Secretary has sole and exclusive authority to grant the 
labor organizations' request.
    (f) The Department will prescribe implementing issuances on the 
procedures and constraints associated with multi-unit bargaining.



Sec. 9901.919  Collective bargaining above the level of recognition.

    (a) Negotiations can occur at the DoD or Component level with labor 
organization(s) at an organizational level above the level of exclusive 
recognition. The decision to negotiate at a level above the level of 
recognition as well as the unions involved, is within the sole and 
exclusive discretion of the Secretary to determine and will not be 
subject to review.
    (b) Any such agreement reached in these negotiations will--
    (1) Be binding on all subordinate bargaining units of the labor 
organization(s) afforded the opportunity to bargain above the level of 
recognition, and on DoD and its Components, without regard to levels of 
recognition;
    (2) Supersede all conflicting provisions of other collective 
bargaining agreements of the labor organization(s), including collective 
bargaining agreements negotiated with an exclusive representative at the 
level of recognition, except as otherwise determined by the Secretary;
    (3) Not be subject to further negotiations with the labor 
organizations for any purpose, including bargaining at the level of 
recognition, except as the Secretary may decide, in his or her sole and 
exclusive discretion; and
    (4) Be subject to review by the Board only to the extent provided by 
this subpart.
    (c) When agreement is reached under this section, individual labor 
organizations or bargaining units cannot opt out of or veto the 
agreement.
    (d) Negotiations will be subject to impasse resolution by the Board 
under procedures prescribed by the Board. In resolving impasses, the 
Board will ensure that agreement provisions are consistent with regard 
to all similarly situated employees. The determination as to which 
organizations are covered under national level bargaining is not subject 
to review by the Board;
    (e) The National Guard Bureau and the Army and Air Force National 
Guard are excluded from coverage under this section. Where National 
Guard employees are impacted, negotiations at the level of recognition 
are authorized.
    (f) The Secretary may require and a labor organization or 
organizations may request bargaining above the level of recognition, as 
appropriate. The Secretary has sole and exclusive authority to grant 
such requests; and
    (g) The Department will prescribe implementing issuances on the 
procedures and constraints associated with collective bargaining above 
the level of recognition.



Sec. 9901.920  Negotiation impasses.

    (a) If the Department and exclusive representative are unable to 
reach an agreement under Sec. Sec. 9901.905, 9901.914, 9901.917, 
9901.918, or 9901.919, either party may submit the disputed issues to 
the Board for resolution.
    (b) The Board may take whatever action is necessary and not 
inconsistent with this subpart to resolve the impasse, to include use of 
settlement efforts.
    (c) Pursuant to Sec. Sec. 9901.907 and 9901.926, the Board's 
regulations will provide for a single, integrated process to address all 
matters associated with a negotiations dispute, including unfair labor 
practices, negotiability disputes, and negotiation impasses.
    (d) Notice of any final action of the Board under this section will 
be promptly served upon the parties. The action will be binding on such 
parties during the term of the agreement, unless the parties agree 
otherwise.

[[Page 1006]]



Sec. 9901.921  Standards of conduct for labor organizations.

    Standards of conduct for labor organizations are those prescribed 
under 5 U.S.C. 7120, which is not modified.



Sec. 9901.922  Grievance procedures.

    (a)(1) Except as provided in paragraph (a)(2) of this section, any 
collective bargaining agreement will provide procedures for the 
settlement of grievances, including questions of arbitrability. Except 
as provided in paragraphs (e), (f) and (h) of this section, the 
procedures will be the exclusive procedures for grievances which fall 
within its coverage.
    (2) Any collective bargaining agreement may exclude any matter from 
the application of the grievance procedures which are provided for in 
the agreement.
    (b)(1) Any negotiated grievance procedure referred to in paragraph 
(a) of this section will be fair and simple, provide for expeditious 
processing, and include procedures that--
    (i) Assure an exclusive representative the right, in its own behalf 
or on behalf of any employee in the unit represented by the exclusive 
representative, to present and process grievances;
    (ii) Assure such an employee the right to present a grievance on the 
employee's own behalf, and assure the exclusive representative the right 
to be present during the grievance proceeding; and
    (iii) Provide that any grievance not satisfactorily settled under 
the negotiated grievance procedure is subject to binding arbitration, 
which may be invoked by either the exclusive representative or the 
Department.
    (2) The provisions of a negotiated grievance procedure providing for 
binding arbitration in accordance with paragraph (b)(1)(iii) of this 
section will, to the extent that an alleged prohibited personnel 
practice is involved, allow the arbitrator to order a stay of any 
personnel action in a manner similar to the manner described in 5 U.S.C. 
1221(c) with respect to the Merit Systems Protection Board and order the 
Department to take any disciplinary action identified under 5 U.S.C. 
1215(a)(3) that is otherwise within the authority of the Department to 
take.
    (3) Any employee who is the subject of any disciplinary action 
ordered under paragraph (b)(2) of this section may appeal such action to 
the same extent and in the same manner as if the Department had taken 
the disciplinary action absent arbitration.
    (c) The preceding paragraphs of this section do not apply with 
respect to any matter concerning--
    (1) Any claimed violation of 5 U.S.C. chapter 73, subchapter III 
(relating to prohibited political activities);
    (2) Retirement, life insurance, or health insurance;
    (3) Any examination, certification, or appointment;
    (4) A removal taken under mandatory removal authority as defined in 
Sec. 9901.712;
    (5) Any subject not within the definition of grievance in Sec. 
9901.903 (e.g., the classification or pay of any position), except for 
an adverse action under applicable authority, including subpart G of 
this part, which is not otherwise excluded by paragraph (c) of this 
section; or
    (6) A suspension or removal taken under 5 U.S.C. 7532.
    (d) To the extent not already excluded by existing collective 
bargaining agreements, the exclusions contained in paragraph (c) of this 
section apply upon the effective date of this subpart, as determined 
under Sec. 9901.102(b)(1).
    (e)(1) An aggrieved employee affected by a prohibited personnel 
practice under 5 U.S.C. 2302(b)(1) which also falls under the coverage 
of the negotiated grievance procedure may raise the matter under the 
applicable statutory procedures, or the negotiated procedure, but not 
both.
    (2) An employee is deemed to have exercised his or her option under 
paragraph (e)(1) of this section to raise the matter under the 
applicable statutory procedures, or the negotiated procedure, at such 
time as the employee timely initiates an action under the applicable 
statutory or regulatory procedure or timely files a grievance in writing 
in accordance with the provisions of the parties' negotiated grievance 
procedure, whichever event occurs first.

[[Page 1007]]

    (3) Selection of the negotiated grievance procedure in no manner 
prejudices the right of an aggrieved party to request the Merit Systems 
Protection Board to review the final decision pursuant to 5 U.S.C. 7702 
in the case of any personnel action that could have been appealed to the 
Board, or, where applicable, to request the Equal Employment Opportunity 
Commission to review a final decision in any other matter involving a 
complaint of discrimination of the type prohibited by any law 
administered by the Equal Employment Opportunity Commission.
    (f)(1) For appealable matters, except for mandatory removal offenses 
under Sec. 9901.712, an aggrieved employee may raise the matter under 
an applicable appellate procedure or under the negotiated grievance 
procedure, but not both. An employee will be deemed to have exercised 
his or her option under this section when the employee timely files an 
appeal under the applicable appellate procedures or a grievance in 
accordance with the provisions of the parties' negotiated grievance 
procedure, whichever occurs first.
    (2) An arbitrator hearing a matter appealable under 5 U.S.C. 7701 or 
subpart H of this part is bound by the applicable provisions of this 
part.
    (g)(1) This paragraph applies with respect to a prohibited personnel 
practice other than a prohibited personnel practice to which paragraph 
(e) of this section applies.
    (2) An aggrieved employee affected by a prohibited personnel 
practice described in paragraph (g)(1) of this section may elect not 
more than one of the procedures described in paragraph (g)(3) of this 
section with respect thereto. A determination as to whether a particular 
procedure for seeking a remedy has been elected will be made as set 
forth under paragraph (g)(4) of this section.
    (3) The procedures for seeking remedies described in this paragraph 
are as follows:
    (i) An appeal under 5 U.S.C. 7701 or under subpart H of this part;
    (ii) A negotiated grievance under this section; and
    (iii) Corrective action under 5 U.S.C. chapter 12, subchapters II 
and III.
    (4) For the purpose of this paragraph, an employee is considered to 
have elected one of the following, whichever election occurs first:
    (i) The procedure described in paragraph (g)(3)(i) of this section 
if such employee has timely filed a notice of appeal under the 
applicable appellate procedures;
    (ii) The procedure described in paragraph (g)(3)(ii) of this section 
if such employee has timely filed a grievance in writing in accordance 
with the provisions of the parties' negotiated procedure; or
    (iii) The procedure described in paragraph (g)(3)(iii) of this 
section if such employee has sought corrective action from the Office of 
Special Counsel by making an allegation under 5 U.S.C. 1214(a)(1).
    (h)(1) An employee may challenge a rating of record issued under 
subpart D of this part, through either the negotiated grievance 
procedure or an administrative reconsideration process under Sec. 
9901.409(h), but not both, so long as the rating of record has not been 
raised in connection with an appeal under the provisions of 5 U.S.C. 
7701 or subpart H of this part. Once an employee raises an issue on his 
or her rating of record issue in an appeal under 5 U.S.C. 7701 or 
subpart H of this part, any pending grievance, arbitration, or request 
for administrative reconsideration under Sec. 9901.409(h), will be 
dismissed with prejudice.
    (2) Final decision authority in the negotiated grievance procedure 
may rest with--
    (i) An independent arbitrator; or
    (ii) A panel consisting of an independent arbitrator, a union 
representative, and a management representative.
    (3) An arbitrator or panel may not conduct an independent evaluation 
of the employee's performance, determine the appropriate share payout, 
or otherwise substitute his or her judgment for that of the supervisor 
or pay pool panel.
    (i) An arbitrator or panel hearing a matter under this subpart is 
bound by all applicable laws, rules, regulations, including applicable 
provisions of this part, issuances, and implementing issuances.

[[Page 1008]]



Sec. 9901.923  Exceptions to arbitration awards.

    (a) Either party to arbitration under this subpart may file with the 
Board an exception to any arbitrator's award, except an award issued in 
connection with an appealable matter under Sec. 9901.922(f) or matters 
similar to those covered under 5 U.S.C. 4303 and 7512 arising under 
other personnel systems, which will be adjudicated under procedures 
described in Sec. 9901.807(g) and (h). Such procedures are adopted in 
this subpart for these purposes.
    (b) In addition to the bases contained in 5 U.S.C. 7122, exceptions 
may also be filed by the parties based on the arbitrator's failure to 
properly consider the Department's national security mission or to 
comply with applicable issuances and implementing issuances. The Board 
may take such action concerning the award as is consistent with this 
subpart.
    (c) If no exception to an arbitrator's award is filed under 
paragraph (a) of this section during the 30-day period beginning on the 
date of such award, the award is final and binding. Either party will 
take the actions required by an arbitrator's final award. The award may 
include the payment of back pay (as provided under 5 U.S.C. 5596 and 5 
CFR part 550, subpart H).
    (d) Nothing in this section prevents the Board from determining its 
own jurisdiction without regard to whether any party has raised a 
jurisdictional issue.



Sec. 9901.924  Official time.

    (a) Any employee representing an exclusive representative in the 
negotiation of a collective bargaining agreement under this subpart will 
be authorized official time for such purposes, including attendance at 
impasse proceedings, during the time the employee otherwise would be in 
a duty status. The number of employees for whom official time is 
authorized under this section may not exceed the number of individuals 
designated as representing the Department for such purposes.
    (b) Any activities performed by any employee relating to the 
internal business of the labor organization, including but not limited 
to the solicitation of membership, elections of labor organization 
officials, and collection of dues, will be performed during the time the 
employee is in a nonduty status.
    (c) Except as provided in paragraph (a) of this section, the 
Authority or the Board, as appropriate, will determine whether an 
employee participating for, or on behalf of, a labor organization in any 
phase of proceedings before the Authority or the Board will be 
authorized official time for such purpose during the time the employee 
would otherwise be in a duty status.
    (d) Except as provided in the preceding paragraphs of this section, 
any employee representing an exclusive representative or, in connection 
with any other matter covered by this subpart, any employee in an 
appropriate unit represented by an exclusive representative, will be 
granted official time in any amount the agency and the exclusive 
representative involved agree to be reasonable, necessary, and in the 
public interest.
    (e) Official time for representational activities will not extend to 
the representation of employees outside the representative's bargaining 
unit, except for multi-unit bargaining and/or bargaining above the level 
of recognition, in accordance with Sec. Sec. 9901.918 and 9901.919 and 
mutual agreement of the agency and the exclusive representatives 
involved.



Sec. 9901.925  Compilation and publication of data.

    (a) The Board will maintain a file of its proceedings.
    (b) All files maintained under paragraph (a) of this section will be 
open to inspection and reproduction in accordance with 5 U.S.C. 552 and 
552a. The Board will establish rules in consultation with the Department 
for maintaining and making available for inspection sensitive 
information.



Sec. 9901.926  Regulations of the Board.

    The Department may issue initial interim rules for the operation of 
the Board and will consult with labor organizations granted national 
consultation rights on the rules. The Board will prescribe and publish 
rules for its operation in the Federal Register.

[[Page 1009]]



Sec. 9901.927  Continuation of existing laws, recognitions, agreements, and 

procedures.

    (a) Except as otherwise provided by Sec. Sec. 9901.905 or 9901.912, 
nothing contained in this subpart precludes the renewal or continuation 
of an exclusive recognition, certification of an exclusive 
representative, or an agreement that is otherwise consistent with law, 
the regulations in this part and DoD or Component issuances between the 
Department or a Component thereof and an exclusive representative of its 
employees, which is entered into before the effective date of this 
subpart, as determined under Sec. 9901.102(b)(1).
    (b) Policies, regulations, and procedures established under and 
decisions issued under Executive Orders 11491, 11616, 11636, 11787, and 
11838 or any other Executive order, in effect on the effective date of 
this subpart (as determined under Sec. 9901.102(b)(1)), will remain in 
full force and effect until revised or revoked by the President, or 
unless superseded by specific provisions of this subpart or by 
implementing issuances or decisions issued pursuant to this subpart.



Sec. 9901.928  Savings provisions.

    This subpart does not apply to grievances or other administrative 
proceedings already pending on the date of coverage of this subpart, as 
determined under Sec. 9901.102(b)(1). Any remedy that applies after the 
date of coverage under any provision of this part and that is in 
conflict with applicable provisions of this part is not enforceable.


[[Page 1011]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 1013]]



                    Table of CFR Titles and Chapters




                     (Revised as of January 1, 2007)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100-199)
        II  Office of Management and Budget Circulars and Guidance 
                (200-299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
        IX  Department of Energy (Part 901)
    XXXVII  Peace Corps (Part 3700)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)

[[Page 1014]]

       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
        LV  National Endowment for the Arts (Part 6501)
       LVI  National Endowment for the Humanities (Part 6601)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
     LXVII  Institute of Museum and Library Services (Part 7701)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)

[[Page 1015]]

     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Part 
                9701)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Part 9901)

                      Title 6--Homeland Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)

[[Page 1016]]

       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)

[[Page 1017]]

        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)

[[Page 1018]]

        IV  Emergency Steel Guarantee Loan Board, Department of 
                Commerce (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board, 
                Department of Commerce (Parts 500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

[[Page 1019]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  Bureau of Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Bureau of Immigration and Customs Enforcement, 
                Department of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

[[Page 1020]]

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)

[[Page 1021]]

        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

[[Page 1022]]

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)

[[Page 1023]]

     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)

[[Page 1024]]

        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)

[[Page 1025]]

         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)

[[Page 1026]]

        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10010)

[[Page 1027]]

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)

[[Page 1028]]

       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees' 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)

[[Page 1029]]

        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  [Reserved]
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

[[Page 1030]]

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 1031]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of January 1, 2007)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 1032]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII

[[Page 1033]]

  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, II
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II

[[Page 1034]]

  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102

[[Page 1035]]

  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Defense Acquisition Regulations System          48, 2
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V; 42, I
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V; 42, I
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
   Archives and Records Administration
[[Page 1036]]

Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50

[[Page 1037]]

  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52

[[Page 1038]]

Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII

[[Page 1039]]

Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 1041]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000,'' published in 
11 separate volumes.

                                  2001

5 CFR
                                                                   66 FR
                                                                    Page
Chapter II
1201.3 (a)(6) and (7) amended......................................30635
1201 Appendix I revised............................................30635
    Appendix II amended............................................57841
Chapter VI
1600 Revised.......................................................22089
1601 Revised.......................................................22093
1604 Added.........................................................50713
1605 Revised.......................................................44277
1605.4 (a)(3) amended..............................................14448
1605.6 Revised.....................................................14448
1605.8 Revised.....................................................14448
1606 Authority citation revised....................................44283
1606.2 Revised.....................................................44283
1606.5 Revised.....................................................44283
1606.7 Revised.....................................................44284
1606.8 Revised.....................................................44284
1606.9 (a)(3) revised..............................................44284
1606.11 (c), (d) and (e) revised; (f) added........................44284
1606.13 (a), (b) and (c) revised; (d) and (e) amended; (g) removed
                                                                   44285
1606.15 (a) revised................................................44285
1650.31 Revised....................................................43462
1650.42 Revised....................................................43462
Chapter XVI
2604.103 Amended....................................................3439
2604.301 (a) and (b)(2) amended.....................................3439
2604.302 (a) and (d) amended........................................3439
2604.303 (a), (b) introductory text and (2) amended.................3439
2604.304 (a) amended................................................3439
2604.305 (a)(1) and (2) amended.....................................3439
2604.402 (c) introductory text, (2), (e) introductory text, (3), 
        (f), (g)(1) and (4) amended.................................3439
2634.903 (d) revised...............................................55872
2635.807 (a)(2)(iii)(D) Note and Examples 1, 2 and 4 revised.......59674
Chapter XXI
3101 Authority citation revised.....................................8506
3101.109 (c)(1) and (3) revised.....................................8506
Chapter L
6001 Authority citation revised....................................60140
6001.104 (b) revised; (d) redesignated as (e); new (d) added.......60140
Chapter LIX
6901 Authority citation revised....................................59136
6901.102 Removed...................................................59136

                                  2002

5 CFR
                                                                   67 FR
                                                                    Page
Chapter II
1201.28 Added.......................................................3811
    (d) revised....................................................58962
Chapter III
1315 Authority citation revised....................................79516
1315.20 Revised....................................................79516
Chapter VI
1600 Authority citation revised....................................17604
1600.1 Amended.....................................................17604

[[Page 1042]]

1600.31 Revised....................................................17604
1600.32 Revised....................................................17604
1605 Authority citation revised....................................49525
1605.31 Revised....................................................49525
1620 Authority citation revised....................................49525
1620.41 Revised....................................................49525
1620.42 Revised....................................................49526
1620.44 Amended....................................................49526
1620.45 Revised....................................................49526
1650.60 (b) amended................................................17605
1650.61 (b) and (c)(1)(ii) amended.................................17605
1650.62 (b) and (c) amended........................................17605
1650.63 (a)(3) and (b) revised.....................................17605
1650.64 (c) amended................................................17605
1651 Authority citation revised....................................49526
1651.1 Amended.....................................................49527
1651.2 (a)(2) revised..............................................49527
1651.5 Heading revised; amended....................................49527
1651.14 (c) revised................................................49527
1655 Authority citation revised....................................49527
1655.7 (c) revised.................................................49527
Chapter VII
Chapter VII Removed................................................30769
Chapter VIII
1800.1 (a)(12) amended.............................................78321
Chapter XVI
2608 Added.........................................................35710
2634.201 (f) revised...............................................49857
2634.304 (a), (b), (d) and (d) Examples 1 through 4 amended........61762
2634.308 (a) revised...............................................57938
2634.310 (a)(2) note added.........................................37967
2634.704 (b) revised...............................................49857
2634 Appendix C amended............................................22349
2635.204 (g)(2) and (6) Examples 1 and 2 amended...................61762
2640.102 (r) revised...............................................12445
2640.103 (a)(2) Example 1 revised..................................12445
2640.201 (a) Example 1 and (b) Example 1 amended; (a) Example 2 
        and (b) revised; (b) Examples 2 and 3 added................12445
2640.202 (a)(2) and (a) Examples 2 and 3 revised; (b) through (e) 
        redesignated as (c) through (f); (a) Example 1 and new 
        (c)(2) Example 1 amended; new (b) and (b) Example 1 added; 
        new (c)(2) Example 2 removed...............................12445
2640.204 Example 1 revised.........................................12446
Chapter XXI
3101.108 (b)(1) and (4) revised....................................46841
Chapter XXII
3201.101 (b) amended...............................................71070
3201.102 (b)(2)(ii), (c) heading, (1)(ii), (iii), (2), (d)(2), (e) 
        heading and (2) amended; (c)(1)(iv) added..................71070
3201.109 (a) amended...............................................71070
Chapter LXXIII
8301.103 (c) removed; (d), (e) and (f) redesignated as (c), (d) 
        and (e); new (c)(2), (d)(1), (2) introductory text and 
        (ii) amended...............................................58319
    Technical correction...........................................67089

                                  2003

5 CFR
                                                                   68 FR
                                                                    Page
Chapter II
1201.4 (i), (k) and (l) revised; (m), (n) and (o) added; interim 
                                                                   59860
1201.5 Added; interim..............................................59860
1201.22 (d) revised; (e) and (f) added; interim....................59862
1201.24 (a) introductory text, (9) and (c) revised; interim........59862
1201.26 (a), (b)(2) and (c) revised; interim.......................59862
1201.27 (d) added; interim.........................................59862
1201.28 Revised....................................................54651
1201.31 (a) revised; interim.......................................59862
1201.72 Revised....................................................54651
1201.73 Revised....................................................54651
1201.114 (c), (e), (f) introductory text and (h) revised; interim 
                                                                   56863
1201.122 (b) and (d) revised; (e) added; interim...................59863
1201.128 (b) and (d) revised; (e) added; interim...................59863
1201.134 (d) and (f) revised; (g) added; interim...................59863
1201.137 (c) and (e) revised; (f) added; interim...................59863

[[Page 1043]]

1201.143 (c) and (e) revised; (f) added; interim...................59864
1201.153 (b) revised; interim......................................59864
1201.173 (k) added; interim........................................59864
1201 Appendix I removed; interim...................................59864
1203.13 (d) revised; interim.......................................59864
1203.14 (b) revised; (c) added; interim............................59864
1203.22 (a) revised; interim.......................................59864
1208.13 (c) added; interim.........................................59865
1208.14 Revised; interim...........................................59865
1208.23 (c) added; interim.........................................59865
1208.24 (a) revised; interim.......................................59865
1209.6 (d) added; interim..........................................59865
1209.8 (a) and (d) revised; (e) and (f) added; interim.............59865
Chapter VI
1600 Authority citation revised....................................35494
1600.1 Revised; interim............................................35494
1600.11 (a) introductory text revised; interim.....................35494
1600.12 (a) and (b) revised; interim...............................35494
1600.13 (a) revised; interim.......................................35494
1600.14 (a), (b) introductory text and (1) revised; interim........35494
1600.22 Revised; interim...........................................35494
1600.32 (b)(3) revised; interim....................................35495
1601.1 Revised; interim............................................35495
1601.11--1601.13 (Subpart B) Revised; interim......................35495
1601.21--1601.22 (Subpart C) Revised; interim......................35495
1601.32 Revised; interim...........................................35496
1601.34 Revised; interim...........................................35497
1603.1 Revised; interim............................................35497
1603.2 (a) revised; interim........................................35497
1604 Authority citation revised....................................35497
1604.4 (a)(1) revised; interim.....................................35497
1605 Authority citation revised....................................35497
1605.1 Revised; interim............................................35497
1605.2 Added; interim..............................................35498
    (b)(1) amended.................................................74451
1605.11 Revised; interim...........................................35498
1605.12 (a), (b)(1), (c), (f)(1) and (2) revised; interim..........35499
    (a) and (c)(1) amended.........................................74451
1605.13 (a)(4) removed; (a)(3), (b)(3) and (d) revised; interim....35500
    (b)(3)(i) and (ii) amended.....................................74451
1605.14 Heading, (a) and (b) revised; interim......................35500
    (a)(1) amended.................................................74451
1605.15 Added; interim.............................................35501
1606.1 Revised; interim............................................35501
1606.2 Revised; interim............................................35501
1606.4 (c) revised; interim........................................35501
1606.5 (a)(4) revised; interim.....................................35501
1606.7 Removed; interim............................................35501
1606.8 Removed; interim............................................35501
1606.9 Removed; interim............................................35501
1606.13 Revised; interim...........................................35501
1606.14--1606.15 (Subpart F) Removed; interim......................35501
1640 Revised; interim..............................................35501
1640.6 Revised.....................................................74451
1645 Revised; interim..............................................35501
1650 Revised; interim..............................................35503
1650.32 (f) revised................................................74451
1651 Authority citation revised....................................35509
1651.1 Revised; interim............................................35509
1651.2 Revised; interim............................................35509
1651.14 (f) revised; (g) added; interim............................35510
    (h) added......................................................74451
1651.17 Revised; interim...........................................35510
1653 Revised; interim..............................................35510
1653.5 (l) added...................................................74451
1655 Revised; interim..............................................35515
1655.15 (a)(7) amended.............................................74451
1655.18 (c) amended................................................74451
1690 Revised; interim..............................................35519
Chapter VIII
1800.1 Revised.....................................................66695
1800.2 Revised.....................................................66696
1800.3 Revised.....................................................66697
Chapter XIV
2416.170 (c) revised...............................................10953
2424.10 Revised....................................................10953
    Amended........................................................23885
2429.24 (a) revised................................................10953
    (a) amended....................................................23885
2471.2 Revised.....................................................10954
    Amended........................................................23885
2471.4 Revised.....................................................10954
    Amended........................................................23885
2472.3 Revised.....................................................10954
    Amended........................................................23885
2472.5 Revised.....................................................10954
    Amended........................................................23885
Chapter XIV Appendix A amended.......................10954, 23885, 23886
Chapter XVI
2600 Revised.......................................................41682

[[Page 1044]]

2600.103 (c)(2) revised............................................62213
2601 Added.........................................................60594
2606 Added.........................................................27891
2641 Appendix B amended.......................................4683, 4384
Chapter XXVI
3601.102 (a)(1) through (15) redesignated as (a)(2) through (16); 
        new (a)(1) added; new (a)(10) through (13) revised; 
        interim....................................................64980
Chapter XLII
5201.102 (a)(6) revised............................................16398
5201.103 (e) revised; Example 2 amended............................16398
Chapter LV
Chapter LV Established; interim....................................52682
Chapter LVI
Chapter LVI Established; interim...................................52684
Chapter LXII
7201.102 (c) revised...............................................52486
Chapter LXVII
Chapter LXVII Established; interim.................................17878

                                  2004

5 CFR
                                                                   69 FR
                                                                    Page
Chapter II
1201.4 (i) and (k) through (n) revised; (o) removed; interim.......57628
1201.5 Redesignated as 1201.14 and revised; interim................57628
1201.14 Redesignated from 1201.5 and revised; interim..............57628
1201.22 (d) and (e) revised; (f) removed; interim..................57629
1201.24 (a) introductory text, (9) and (c) revised; interim........57629
1201.26 (a), (b)(2) and (c) revised; interim.......................57629
1201.27 (d) revised; interim.......................................57630
1201.31 (a) revised; interim.......................................57630
1201.114 (c) and (h) revised; interim..............................57630
1201.122 (b) and (e) revised; interim..............................57630
1201.128 (b) and (e) revised; interim..............................57630
1201.134 (d) and (g) revised; interim..............................57630
1201.137 (c) and (f) revised; interim..............................57630
1201.143 (c) and (f) revised; interim..............................57630
1201.153 (b) revised; interim......................................57631
1201.173 (k) revised; interim......................................57631
1201 Appendixes II and III revised.................................11503
    Appendixes II and III amended..................................61991
1203.13 (d) revised; interim.......................................57631
1203.14 (c) revised; interim.......................................57631
1203.22 (a) revised; interim.......................................57631
1208.13 (c) revised; interim.......................................57631
1208.14 Revised; interim...........................................57631
1208.23 (c) revised; interim.......................................57631
1208.24 (a) revised; interim.......................................57631
1209.6 (d) revised; interim........................................57631
1209.8 (d) revised; (e) and (f) removed; interim...................57631
Chapter III
1330 (Subchapter C) Added; interim..........................45550, 45551
1330.401-1330.405 (Subpart D) Note added; interim..................45551
1330.403 Amended; interim..........................................45551
1330.404 Amended; interim..........................................45551
1330.405 Amended; interim..........................................45551
Chapter VI
1650.61 (b) and (c)(1) amended.....................................29851
1650.62 (b) and (c) amended........................................29851
1650.64 (a)(1) amended.............................................29851
1653 Authority citation revised....................................29851
1653.2 (a)(4) revised..............................................29851
1653.3 (b) introductory text amended...............................29851
1655 Authority citation revised....................................29852
1655.2 Revised.....................................................29852
1655.4 Amended.....................................................29852
1655.11 (b) revised................................................29852
1655.21 Added......................................................29852
1690.12 Revised....................................................29852
1690.13 Revised....................................................29852
Chapter XVI
2634.1001--2634.1008 (Subpart J) Revised...........................44894
2641 Appendix B amended; eff. in part 2-22-05......................68055

                                  2005

5 CFR
                                                                   70 FR
                                                                    Page
Chapter II
1200.10 (a)(8), (9), (b)(8) and (9) revised........................30608

[[Page 1045]]

1201.3 (a)(2), (19) and (20) revised; (a)(21) removed..............30608
1201.53 (c) revised................................................30608
1201.56 (a)(1)(i) revised..........................................30608
1201.81 (a) revised................................................30608
1201.103 (c)(2) revised; (c)(3) removed............................30609
1201.112 (a) revised...............................................30609
1201.125 (c)(1) revised............................................30609
1201.126 (c) revised...............................................30609
1207 Revised; interim..............................................24293
    Regulation at 70 FR 24293 confirmed............................50149
Chapter VI
1600 Heading revised...............................................32207
1600.11 (b) amended................................................32207
1600.12 Revised....................................................32207
1600.13 Removed; new 1600.13 added.................................32207
1600.14 Removed; new 1600.14 added.................................32207
1600.15 Removed....................................................32207
1600.16 Removed....................................................32207
1600.17 Removed....................................................32207
1600.18 Removed....................................................32207
1600.22 Revised....................................................32207
1600.23 Removed....................................................32207
1601 Heading and authority citation revised........................32207
1601.1 Amended.....................................................32207
1601.11 Amended....................................................32207
1601.12 Revised....................................................32207
1601.13 (a) and (b) revised........................................32207
1601.21 Amended....................................................32208
1601.22 Revised....................................................32208
1601.32 Revised....................................................32208
1601.33 Revised....................................................32208
1601.34 Removed; new 1601.34 redesignated from 1601.36.............32208
1601.35 Removed....................................................32208
1601.36 Redesignated as 1601.34....................................32208
1601.40 (Subpart E) Added..........................................32208
1604.2 Amended.....................................................32209
1604.3 Revised.....................................................32209
1604.4 (a) and (b) revised.........................................32209
1604.5 (a)(1) and (b)(3) revised...................................32209
1604.7 (c) revised.................................................32209
1604.8 (c) revised.................................................32209
1604.9 (c) revised.................................................32209
1604.10 (a)(3) amended; (a)(4) removed.............................32209
1605.1 (b) amended.................................................32209
1605.2 Revised.....................................................32209
1605.11 (c)(5), (6) and (8) revised................................32210
1605.12 Revised....................................................32210
1605.13 (a)(2)(ii), (3), (b)(3) and (d) revised....................32211
1605.14 (a)(1) amended; (b)(4) and (c)(3) revised..................32212
1605.16 (a) and (b) revised........................................32212
1605.21 Revised....................................................32212
1605.22 (c)(2) revised.............................................32212
1605.31 (b), (c)(1) and (d) revised................................32212
1606 Removed.......................................................32213
1620 Authority citation revised....................................32213
1620.1 Amended.....................................................32213
1620.2 Revised.....................................................32213
1620.12 Amended....................................................32213
1620.20--1620.23 (Subpart C) Heading revised.......................32213
1620.20 (a)(2) and (b) amended.....................................32213
1620.21 (a) revised; (b)(2) amended................................32213
1620.22 (a)(2)(ii) amended.........................................32213
1620.23 (b) revised................................................32213
1620.33 Removed....................................................32213
1620.42 Revised....................................................32213
1620.43 Revised....................................................32213
1620.45 (a)(1), (2), (c)(2) and (d) revised........................32213
1620.46 (b), (d) and (e) revised...................................32214
1640.3 (f)(3) revised..............................................32214
1640.4 (a)(5) and (b)(2) revised...................................32214
1640.5 Heading revised; introductory text amended..................32214
1645.2 Revised.....................................................32214
1645.3 Revised.....................................................32214
1645.4 Revised.....................................................32214
1645.5 Revised.....................................................32214
1645.6 Revised.....................................................32215
1650.1 (b) amended.................................................32215
1650.4 Revised.....................................................32215
1650.6 Added.......................................................32215
1650.11 (c) added..................................................32215
1650.17 (a) revised; (c) amended...................................32215
1650.24 Amended....................................................32215
1650.25 Removed....................................................32215
1650.33 (c) added; eff. 10-1-05 through 12-31-05...................59621
1650.41 Amended....................................................32215
1650.42 (a) amended................................................32215
    (c) added; eff. 10-1-05 through 12-31-05.......................59621
1650.43 Removed....................................................32215
1650.63 (a) introductory text revised..............................32215
1651.2 (b) and (d) revised.........................................32215
1651.3 Revised.....................................................32216
1651.4 Revised.....................................................32216

[[Page 1046]]

1651.10 Revised....................................................32216
1651.13 Revised....................................................32217
1651.14 (b), (c) and (g) revised...................................32217
1651.16 (c) amended................................................32217
1653.5 (a), (d) and (e) revised....................................32217
1655.1 (b) amended.................................................32217
1655.2 (c) revised.................................................32218
1655.9 (b) and (c) revised.........................................32218
1655.10 (a) revised................................................32218
1655.12 (a)(1) revised.............................................32218
1690.1 Amended.....................................................32218
1690.14 Added......................................................32218
Chapter XIV
2400--2499 (Chapter XIV) Appendix A amended.................11535, 41605
    Technical correction...........................................12583
Chapter XVI
2634.304 (a), (b) and (d) amended..................................12112
2635.204 (g)(2) and (6) amended....................................12112
2640.201 (d) added; interim........................................69043
Chapter XLV
5501.101 (c)(2) revised; interim....................................5558
    (c) introductory text amended..................................51568
5501.102 (a) introductory text and (b)(2) amended; (a)(3) revised; 
        (a)(7) and (11) removed; (a)(6), (12) and (13) 
        redesignated as (7), (11) and (12); new (a)(6) and 
        (c)(1)(iii) added; interim..................................5558
    (b)(1) revised.................................................51568
5501.103 (a) revised; interim.......................................5558
5501.104 Heading, (a), (b)(1) and (2)(i) revised; (b)(4) note 
        redesignated as (b) note and revised; (c) added; interim 
                                                                    5558
5501.106 (c)(3) heading and introductory text, (4)(i) introductory 
        text, (d)(1) introductory text, (2) heading, (i), (iii), 
        (3) and (4) revised; (d)(4) note amended; (d)(5) 
        redesignated as (d)(6); new (d)(5) and (e) added; interim 
                                                                    5558
    (d)(3) through (6) redesignated as (d)(4) through (7); new 
(d)(4)(ii)(F) through (N) redesignated as (d)(4)(ii)(G) through 
(O); (c)(3)(ii)(B), (d)(1), (2), new (4)(ii)(D), (E), (I), (J), 
(K) and (e) revised; new (d)(3) and (d)(4)(ii)(F) added; new 
(d)(6) amended.....................................................51568
5501.109 Added; interim.............................................5560
    (b)(6), (c)(4) and (5) removed; (b)(3), (4), (5), and (7) 
through (11) redesignated as (b)(4), (5) and (8) through (13); new 
(b)(3), (6), (7), (c)(3)(vi), (vii) and (viii) added; new (b)(4), 
(8), (10), (11), (13) introductory text, (c)(1), (3)(i), (iii) and 
(v) revised........................................................51569
5501.110 Added; interim.............................................5562
    (b)(1), (2), (4), (c), (d), (e), (e) Note, (e)(1) Note and (f) 
removed; (b)(3) and (g) redesignated as (b)(2) and (e); heading, 
new (b)(2) and (e) revised; new (b)(1), (c), (d), (d) Note and 
(d)(1) Note added..................................................51571
5501.111 Added; interim.............................................5563
    (b), (b) Note, (c) and (d) redesignated as (c), (c) Note, (d) 
and (e); new (b) added; new (c)(1) removed; (c)(2) and (3) 
redesignated as (c)(1) and (2); new (c)(1) introductory text 
amended; new (c)(1)(iv), (d) introductory text, (d)(2), (3), 
(e)(1) and (2) introductory text revised...........................51572
5501.112 Added; interim.............................................5564
5502 Added..........................................................5564
5502.102 Amended...................................................51573
5502.105 Revised; interim..........................................37009
    (a) revised....................................................51573
5502.106 (c) revised; interim......................................37010
    Heading, (b)(2) and (c) revised................................51573
    (c)(1) amended.................................................61713
5502.107 Added.....................................................51573
    (c)(1) amended.................................................61713
Chapter XCVII
Chapter XCVII Established...........................................5318
9701 Added..........................................................5318
Chapter XCIX
Chapter XCIX Established...........................................66188
9901 Added.........................................................66188

                                  2006

5 CFR
                                                                   71 FR
                                                                    Page
Chapter II
1201 Authority citation revised....................................34232
1201.142 Revised...................................................34232
1216 Added.........................................................17967
Chapter VI
1630.4 (a)(1) and (2) amended......................................50319
1650.33 (c) added; eff. 1-1-06 through 3-31-06......................1389

[[Page 1047]]

1650.42 (c) added; eff. 1-1-06 through 3-31-06......................1389
1651.5 Revised......................................................9897
1651.13 Amended....................................................50319
1653.2 (a)(3)(ii), (iii) and (iv) revised..........................54893
1653.3 (b) introductory text amended...............................50320
1653.13 (b) introductory text amended..............................50320
1690.1 Amended.....................................................50320
Chapter XVI
2634.102 (b) revised...............................................28233
2634.203 (b) amended...............................................28233
2634.204 (b) amended...............................................28233
2634.301--2634.311 (Subpart C) Heading revised.....................28233
2634.301 (a), (d) introductory text and Examples 1 and 3 amended 
                                                                   28233
2634.302 (a)(1) introductory text, (iv) Example 2, (b) 
        introductory text, (1), (2) and Examples 1, 2 and 3 
        amended....................................................28233
2634.303 (a) introductory text amended.............................28233
2634.304 (a), (b) and (f)(1) introductory text amended.............28233
2634.305 (a) amended...............................................28233
2634.306 Introductory text amended.................................28234
2634.307 (a) amended...............................................28234
2634.308 (a), (b) introductory text and (c) amended................28234
2634.309 (a) introductory text, (1)(ii), (iii), Examples 1 and 2, 
        (3) introductory text and (b) amended......................28234
2634.310 (a)(1) and (c)(1) amended.................................28234
2634.311 (b) and (c)(2) amended....................................28234
2634.601 (a) amended...............................................28234
2634.903 (a), (b)(1), (2)(i), (iii) and (3) amended; (e) added.....28234
2634.904 Revised...................................................28234
2634.905 Heading revised; introductory text, (a), (b), (c) and 
        Examples 1, 2 and 3 removed; new (a) and Example added; 
        (d) redesignated as (b); new (b) introductory text, (4) 
        and (5) amended............................................28235
2634.907 Revised...................................................28236
2634.908 (a) amended...............................................28239
2635.102 (h) amended...............................................45736
2635.105 (d) added.................................................45736
2640.102 (a) note amended..........................................28239
Chapter XXIII
3301 (Ch. XXIII) Regulation at 61 FR 35087 confirmed...............48449


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