Federal Energy Regulatory Commission, DOE.
Final rule; correction.
The Federal Energy Regulatory Commission (“Commission”) published in the
Effective on April 7, 2000.
Julia A. Lake, Attorney, Federal Energy Regulatory Commission, 888 First Street, NW, Washington, DC 20426; phone: 202-208-2019; e-mail:
The Federal Energy Regulatory Commission (“Commission”) published in the
“2. In § 2.1, paragraph (a)(1)(viii) is removed.”
“3. In § 2.55, paragraph (a) is revised; (b)(1)(ii) is revised; (b)(4) heading is removed; (b)(4)(i) is removed and (b)(4)(ii) is redesignated as (b)(4); and paragraph (d) is removed and reserved, to read as follows:”
Federal Energy Regulatory Commission, DOE.
Final rule.
The Federal Energy Regulatory Commission (Commission) is amending its regulations to require prospectively the inclusion of a proposed designation for all rate schedule sheets filed with the Commission by public utilities. This rule will streamline rate schedule sheet designation procedures for the Commission and the electric industry. This rule will also conform public utility tariff filing procedures with those for interstate natural gas and oil pipelines. This revision to the regulations is necessary to accommodate the movement toward an integrated energy industry and to facilitate the development of common standards for the electronic filing of all electric, gas, and oil rate schedule sheets.
This final rule will become effective on June 1, 2000.
The Federal Energy Regulatory Commission (Commission) is amending its regulations to require prospectively the inclusion of a proposed designation
This rule will conform the procedures for identifying public utility tariff filings with those for interstate natural gas and oil pipelines.
This proceeding began with the issuance of a Notice of Proposed Rulemaking (NOPR) on October 28, 1999.
Comments were filed by four commenters. Three of the comments were generally favorable to the proposed changes. The other comment expressed concerns with the proposed changes. The comments will be discussed below on an issue-by-issue basis.
Section 205(c) of the Federal Power Act (FPA)
Pursuant to current Commission regulations under Parts 154 and 341, gas and oil pipelines are required to include proposed pagination on all tariff sheets filed with the Commission; the proposed pagination must be unique to the pertinent tariff sheets,
With regard to public utility rate schedules, Part 35 of the Commission's regulations provides that every rate schedule filing under the FPA “will be numbered by the Commission and the filing public utility advised of the Rate Schedule FERC number.”
In this rule, we are revising 18 CFR Part 35. These revisions include: (1) Amending § 35.5 to allow the Director of the Office of Markets, Tariffs, and Rates (Director) to reject rate filings that fail to comply with Part 35;
This rule will streamline tariff sheet
Under the designation procedures established by this rule, staff will only need to confirm the appropriateness of the proposed designation. Commission orders, including delegated orders, will not have to list tariff sheets individually, because the filings and the tariff sheets will be cross-referenced electronically. This will simplify the identification of any specific tariff sheet for any purpose from the time of filing. Also, the proposed designation procedure will allow tariff sheets to be more easily kept up to date, with superseded sheets archived for future reference.
Filing requirements for tariff sheets for the electric, gas, and oil industries have evolved independently over time. However, with the movement toward an integrated energy industry it now makes sense to have a common standard for all tariff sheets filed with the Commission. Further, as the Commission increases its use of electronic media for filing, storage, retrieval, and tracking of information and documents, greater uniformity in filing procedures, wherever practical, will greatly expedite and simplify this conversion to electronic media. Conforming the requirements for public utilities, interstate natural gas pipelines, and oil pipelines will position the Commission and the affected industries for a smooth transition to having the tariff sheets filed, tracked, and archived electronically. In addition, designing the electronic format for these filings will be simplified if all tariff sheets are filed uniformly.
The Commission believes that the transition from the existing designation procedure to that embodied by this rule will occur in an efficient manner if currently effective and paginated/designated tariff sheets remain as filed. However, if a change is proposed in an existing tariff or rate schedule, the entire
“Tariff, Rate Schedule, and Service Agreement Pagination Guidelines” (Designation Guidelines) have been developed and are attached hereto as an appendix. The guidelines offer definitions and examples designed to assist interested parties during the period of transition. The guidelines also provide the name and telephone number of a staff person who can answer questions and provide additional guidance.
Comments are discussed in the following sections.
Currently, staff is responsible for assigning designations for public utility tariff sheets. In the NOPR, we noted that a significant amount of staff time is required to establish the proper designation. Accordingly, we proposed to revise our regulations to require that the public utilities prospectively include proposed designation for all tariff sheets filed with the Commission.
Southern Company Services, Inc. (Southern), Wisconsin Public Service Corporation (WPSC), and New England Power Company and Montaup Electric Company (NEP Companies) all filed comments generally supporting the Commission's efforts to standardize the designation of electric tariff sheets. Consumers Energy Company (Consumers) commented on the proposed requirement that public utilities, prospectively, include in their filings a proposed designation for all tariff sheets filed with the Commission. Consumers states that it does not support utility designation for non-standard contracts and service agreements. Consumers suggests that it would be best for staff to continue to designate non-standard contracts and service agreements. Consumers argues that it is sometimes unclear as to whether the contracts will be deemed a new agreement for a new service or a supplement to an existing service. Also, Consumers states that, when the contracts are drafted, it is not sure which agreements will be executed and when and in which order they will be filed. Consumers also questions the usefulness of retaining the sheet identifying canceled tariff sheets. Consumers argues that, once terminated, canceled tariff sheets will never have a future use. Consumers further indicates that, for electric utilities, volume identifications are not used.
The Commission is not persuaded by Consumers' argument that staff should continue to assign tariff sheet designations in certain circumstances. It is the responsibility of the utilities to clearly identify in their filings the nature of the services they are proposing and how those services relate to other services, if at all. It is not uncommon for there to be ambiguity as to the nature of a contract or when a tariff sheet will become effective. These issues, though, are separate from the issue of who should designate a tariff sheet. And, as an ultimate check, the Commission will review proposed designations to confirm their accuracy, and retains the right to require corrections to proposed designations that it believes are inaccurate.
The Designation Guidelines provide, in general, for proposed tariff sheets to identify the effective sheets to be superseded, except when the successive filings reflect underlying (and still pending) filings, in which case the utility should list the underlying but still pending sheets as the superseding sheets. (See Appendix, Example No. 1.) On joint services, each utility offering a service must file its own tariff sheets. This means that jointly offered services most likely will have different tariff sheet designations.
Consumers has a legitimate point concerning volume identification. Therefore, the Commission will permit the use of the rate schedule number as the identifier in the header of each tariff sheet.
The Commission is not directing utilities to use reserved tariff sheets in the future. Rather, the utilities may, at their option or as the needs of other tariff sheets require, use the reserved sheets, provided unique designations are applied.
Finally, Designation Guideline paragraph 11 and Example No. 7 originally provided that the canceling tariff sheet should be designated with the last sheet number of the canceled sheets. Consumers notes that this instruction differs from the Gas Guidelines' instruction for the first of the canceled sheets, and recommends that the Commission adopt the Gas Guidelines for the sake of continuity between the gas pipeline and utility programs. The Commission agrees, and will do so.
Currently, public utility filing requirements differ from those for natural gas and oil pipelines. In the NOPR, we proposed conforming public utility filing procedures with those for natural gas and oil pipelines. We explained that this revision would be necessary to accommodate the movement toward an integrated energy industry and to facilitate the development of common standards for the electronic filing of all electric, gas, and oil rate schedule sheets.
Consumers states that this rule will not make electric, gas pipeline, and oil pipeline rate filings more consistent. Consumers states that the proposed designation system goes beyond the designation system used for gas pipelines.
Consumers misconstrues the limits of this rule change. This rule is limited to public utility tariff sheet designations. The continued convergence of the gas and electric industries and markets, and the Commission's ongoing involvement in this convergence, are likely to require additional, future modifications to the Commission's procedures and regulations. This rule is but one step. As such, public utilities will continue to be required to file all service agreements. This is no different from what was required of gas pipelines prior to the implementation of Order No. 516.
Consumers questions the need to apply tariff sheet designations to non-standard electric service agreements. Consumers argues that because gas pipeline companies are not required to paginate non-standard contracts, public
The Commission's intent in this rule is, in part, to improve the level of regulatory convergence. While Consumers may be correct in stating that most non-conforming contracts and service agreements will not change once filed, the Commission will not speculate as to which terms of service or rates may be revised. However, the Commission recognizes that service agreements constitute a large portion of the tariff filings made in the electric program. Therefore, to ease the administrative burden on filing utilities, this rule will not require the individual pages of service agreements to be paginated. However, the Commission will retain the requirement for utilities to designate service agreements. If a service agreement is revised or modified, the utility must file a complete revised service agreement with a new designation comporting with the Guidelines.
Currently, our regulations permit the Secretary to reject any material submitted for filing with the Commission that patently fails to substantially comply with the applicable requirements.
Consumers, NEP Companies, WPSC, and Southern express concern that the Director may exercise the delegated authority to reject filings because of minor errors in the application. Consumers proposes a modification to the regulation that would permit the Director to reject only “patently deficient” filings. WPSC and Southern request that the Commission clarify that the Director could reject a tariff sheet, but not the rate filing in total. The NEP Companies also suggest a six-to twelve-month transition period. All parties filing comments expressed concern that rejection due to a minor error would result in delayed effective dates for rate changes or new services, thus causing economic harm to utilities and customers.
Consumers also claims that the authority in § 35.5(b) goes beyond the Director of the Office of Electric Regulation's existing delegated authority in 18 CFR § 375.308(a)(3).
New § 35.5(b) references § 375.307(k)(3), and the Director may, pursuant to § 375.307(k)(3), reject any rate filing not containing a request for waiver if it “fails patently to comply with applicable statutory requirement or Commission rules, regulations and orders.” Accurate designation of tariff sheets is essential; it allows the Commission and the public to identify the tariff sheets (and rates) the utilities propose to supersede and when they will be superseded, as well as the proposed replacement tariff sheets (and rates) and when they will go into effect.
The Commission anticipates the need, in the beginning, to provide assistance to utilities so they may become accustomed to the procedures established under the Designation Guidelines. The Commission has identified staff that affected utilities may contact to assist in initiating this new tariff designation process. Staff will work with applicants to facilitate correct filings. However, it remains the responsibility of the applicants in the first instance to file complete and accurate applications with properly formatted and designated tariff sheets.
Moreover, determinations as to whether tariff sheets are properly formatted and designated are matters properly delegated to the Director. Utilities may, of course, request rehearing of Director actions with which they disagree.
Finally, the Commission will not establish a definitive transition period. Instead, as when the Commission introduced new pagination guidelines for the gas program, the Commission will rely on the Director to manage the transition.
Section 35.9(b)(3) requires tariff sheets to include the issuing officer and the issuance date.
Consumers requests clarification as to whom the officer should be and what the issuance date should be. Consumers claims that it is not possible to know what the issuance date will be when contracts are negotiated. Consumers also states that negotiating and executing a non-standard contract often takes a significant amount of time and that contracts often provide for an effective date at a date certain after Commission approval. As such, Consumers continues, it is often impossible to include a specific effective date when a non-standard contract is prepared.
The Commission clarifies that: (1) The issuing officer is the person responsible for filing the tariff sheet with the Commission; and (2) the issuance date is the date the tariff sheet is filed with
It is the utilities' responsibility to propose an effective date when they file tariff sheets with the Commission.
Consumers requests clarification of certain issues related to the mechanics of the transition to the new designation system. It asks whether designation should start over at “Original Sheet No.” when the superseded sheet already has a number. Consumers also requests clarification as to the effective date of tariff sheets that are filed with no changes except those necessary to comply with the designation rule. Consumers further notes that the requirement for additional data on each tariff sheet may result in tariff language rolling over to subsequent tariff sheets that differ from the pre-existing tariffs sheets.
The Commission has traditionally allowed gas pipelines that are not replacing an entire volume to simply pick a designation number higher than the most recently filed effective tariff sheet. Thus, for example, a utility may decide to redesignate all tariff sheets in its first rate change as “7th Revised Sheet No. __,” provided all existing tariff sheets are designated at some figure less than seven.
The effective date for the newly designated sheets will be the effective date for the changes contained on those sheets. Superseded sheets will be effective from the effective date allowed by the Commission up to the date they are superseded.
Rolling of text from one sheet to another is acceptable. Staff can provide additional suggestions based on the gas program's experience in order to facilitate ease in re-designation.
Consumers requests that the Commission delay the effective date of the designation rule for at least 90 days, or until it is clearer how electronic filing will be accomplished. Consumers states that considerable effort is required to assemble a rate filing and it will take significant time and effort to convert existing and lengthy tariffs over to the new designation system. Further, this conversion effort cannot start until the final rule is known.
The Commission will make the effective date of this rule June 1, 2000. Consumers seems to believe that this rule will require the refiling of its entire tariff. That will not be required. While it is the Commission's intent to eventually update utilities' tariffs, this rule will require only incremental adjustments. As changes are made to a portion of a tariff or rate schedule (including service agreements), the Commission will require the redesignation of only that individual tariff or rate schedule (including service agreements).
The Commission has not established a standardized electronic tariff format for the electric, gas, and oil programs. Therefore, delaying the effective date of this final rule to coincide with the outcome of a future proceeding addressing this subject would be the equivalent of terminating this proceeding. The NOPR identified several reasons for implementing the designation requirements: streamlining the designation process; convergence of the gas and electric industries; facilitating case tracking and research as to the status of tariff sheets; preparing utilities for the eventual transition to electronic tariff filing; and reducing the amount of staff time necessary to process utility rate filings. These reasons provide adequate justification to implement this new rule, effective May 1, 2000.
Self-designation of tariff sheets also permits quicker and more certain Commission action on certain types of filings. The Commission is permitting certain gas and oil tariff sheets to go into effect by operation of law. If, upon staff review, a filing is complete, complies with all applicable statutory, regulatory, and policy requirements, is not protested by any party, requires no additional Commission action, and raises no other issues, these tariff sheets can go into effect without suspension or refund obligation and without an order from the Commission. Designation of utility tariff sheets will permit the same process to apply to the electric program.
The following collection of information contained in this rule is being submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the Paperwork Reduction Act of 1995.
Total Additional Annual Hours for Collection (Reporting + Recordkeeping, if appropriate) = 8,320.
The total annual reporting burden for FERC-516 under the current regulations is 536,800 hours. Currently, the Commission devotes approximately 8,320 hours per year to assign tariff designations to an estimated 2,934 filings per year. The proposed change will require the utilities to perform the designation duties currently performed by Commission staff. There will, therefore, be an increase in reporting burden from 536,800 hours to 545,120 hours as utilities adopt the proposed designation system for changes proposed in existing tariffs or rate
The OMB regulations require OMB to approve certain information collection requirements imposed by agency rule.
Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426, [Attention: Michael Miller, Office of the Chief Information Officer, Phone: (202) 208-1415, fax: (202) 208-2425, email: mike.miller@ferc.fed.us].
For submitting comments concerning the collection of information and the associated burden estimate, please send your comments to the contact listed above and to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503. [Attention: Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 395-3087, fax: (202) 395-7285.
Issuance of this Final Rule does not represent a major federal action having a significant adverse effect on the human environment under the Commission's regulations implementing the National Environmental Policy Act.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires rulemakings to contain either a description and analysis of the effect that a rule will have on small entities or a certification that a rule will not have a significant economic effect on a substantial number of small entities. Most filing entities do not fall within the RFA's definition of a small entity.
In addition to publishing the full text of this document in the
From FERC's Home Page on the Internet, this information is available in both the Commission Issuance Posting System (CIPS) and the Records and Information Management System (RIMS).
User assistance is available for RIMS, CIPS, and the Website during normal business hours from our Help line at (202) 208-2222 (E-Mail to WebMaster@ferc.fed.us) or the Public Reference at (202) 208-1371 (E-Mail to
During normal business hours, documents can also be viewed and/or printed in FERC's Public Reference Room, where RIMS, CIPS, and the FERC Website are available. User assistance is also available.
This Final Rule will take effect on June 1, 2000. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget, that this rule is not a “major rule”
Electric power rates, Electric utilities, Electricity, Reporting and recordkeeping requirements.
By the Commission.
16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352.
(b) A rate filing that fails to comply with this Part may be rejected by the Director of the Office of Markets, Tariffs, and Rates pursuant to the authority delegated to the Director in § 375.307(k)(3) of this chapter.
(a) All tariffs and rate schedules (including service agreements) must be numbered sequentially from the beginning of that tariff or rate schedule (or service agreement). Revised service agreements must be replaced in their entirety.
(b) All tariffs and rate schedules (not including service agreements, except as noted in paragraphs (b)(4) and (5) of this section) must have the following information placed in the margins of each sheet:
(1)
(2)
(3)
(4)
(5)
Due to the complexity of tariff filing situations, the Commission Staff provides the following guidelines. If you have questions or need assistance, please call Kathleen E. Nieman at (202) 208-1070, or such other persons as may be identified from time to time.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
“Original Sheet No. 4” is filed in Docket No. ER99-44-000 to be effective January 1, 1999. Subsequently, a sheet filed in Docket No. ER99-123-000 is to be effective February 1, 1999. Paginate the latter sheet as “First Revised Sheet No. 4 superseding Original Sheet No. 4”. If a mistake is discovered and a corrected sheet needs to be filed in Docket No. ER99-123-001,
If the utility proposes two separate changes to be effective the same date, and the second filing reflects the first filing's proposed changes, then it is appropriate to show the first filing's pagination as superseded.
“Second Revised Sheet No. 4” is filed in Docket No. ER99-200-000 to be effective April 1, 1999. Subsequently, a sheet is filed in Docket No. ER99-504-000 to be effective on the same date. Paginate that sheet with the next revision number, “Third Revised Sheet No. 4” even though it is to be effective on the same date.
“Fourth Revised Sheet No. 4” is filed July 31, 1999, in Docket No. ER99-601-000 to be effective September 1, 1999. An order suspends this sheet until February 1, 2000. Subsequently, two filings are made to be effective prior to February 1, 2000. Paginate these sheets as “1st Rev Third Revised Sheet No. 4” and “2nd Rev Third Revised Sheet No. 4”. The utility will be required, if necessary, to file revised tariff sheets to update the suspended tariff sheets to include any changes to the tariff sheets that have been accepted by the Commission between the date of the suspension and the effective date of the suspended rates. When filing to update the revised tariff sheets, paginate the revised tariff sheet as “Sub Fourth Revised Sheet No. 4”. Note: using the alpha-numeric “1st, 2nd, etc.” for the additional revision number assists in keeping the pagination clear.
Abbreviate “Fourth Revised Twenty-Third Revised Sheet No. 4” as “4th Rev Twenty-Third Revised Sheet No. 4”.
To cancel Rate Schedule FERC No. 26, which consists of Original Sheet Nos. 1-39, file First Revised Sheet No. 1.
Company Name; Rate Schedule FERC No. 26.
First Revised Sheet No. 1.
Cancels FERC Electric Rate Schedule No. 26.
Notice of Cancellation
Your general terms and conditions end on page 75 and you want to reserve sheets 76 through 99 for future use:
Company Name; FERC Electric Tariff, Original Volume No. 2.
Sheet Nos. 76 through 99.
Sheet Nos. 76 through 99 are reserved for future use.
Substitute: Sub
Alternate: Alt
Revised: Rev
First, Second, etc.: 1st, 2nd, etc.
Sheet No.: (omit these words)
Day and Light Power Company, FERC Electric Tariff, Original Volume No. 1.
Original Sheet No. 4
Issued by: Harriet Officer, Rates Manager.
Effective: July 1, 2000.
Issued on: June 10, 2000.
Filed to comply with order of the Federal Energy Regulatory Commission, Docket No. ER99-5374-000, issued October 27, 1999, 90 FERC ¶ 61,010 (1999).
Federal Energy Regulatory Commission.
Final rule; correction.
The Federal Energy Regulation Commission (Commission) published in the
Effective on April 7, 2000.
Julia A. Lake, Attorney, Federal Energy Regulatory Commission, 888 First Street, NW, Washington, DC 20426; phone: 202-208-2019; e-mail:
The Federal Energy Regulatory Commission (Commission) published in the
Federal Energy Regulatory Commission, DOE.
Final rule; correction.
The Federal Energy Regulatory Commission (“Commission”) published in the
Effective on April 7, 2000.
Julia A. Lake, Attorney, Federal Energy Regulatory Commission, 888 First Street, NW, Washington, DC 20426; phone: 202-208-2019; e-mail:
The Federal Energy Regulatory Commission (“Commission”) published in the
“2. In § 385.101, remove paragraph (b)(4).”
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is reclassifying over-the-counter (OTC) test sample collection systems for drugs of abuse testing from class III (premarket approval) into class I (general controls) and exempting them from premarket notification (510(k)) and current good manufacturing practice (CGMP) requirements. FDA is also designating OTC test sample collection systems for drugs of abuse testing as restricted devices under the Federal Food, Drug, and Cosmetic Act (the act) and establishing restrictions intended to assure consumers that: The underlying laboratory test(s) are accurate and reliable; the laboratory performing the test(s) has adequate expertise and competency; and the product has adequate labeling and methods of communicating test results to consumers. Finally, FDA is adding a conforming amendment to the existing classification regulation for specimen transport and storage containers to clarify that it does not apply to specimen transport and storage containers that are part of an OTC test sample collection system for the purpose of testing for the presence of drugs of abuse or their metabolites in a laboratory.
This rule is effective April 9, 2001.
Comments on the burden estimates or on any other aspect of the information collection provisions should be sent to the Office of Device Evaluation (HFZ-440), Center for Devices and Radiological Health, Food and Drug Administration, 2094 Gaither Rd., Rockville, MD 20850.
Steven Gutman, Center for Devices and Radiological Health (HFZ-440), Food and Drug Administration, 2098 Gaither Rd., Rockville, MD 20850, 301-594-3084.
In the
The proposed rule does not affect OTC tests for drugs of abuse that are performed in the home setting—i.e., the testing is performed in the home setting and the test results are read and interpreted directly by the consumer, without involvement or input from a health professional. These are referred to as “point of care” tests. When manufacturers or distributors market “point of care” tests, they are selling the consumers the actual test rather than a collection system that uses a laboratory to perform a test. Under these circumstances, FDA cannot determine whether the test is accurate and reliable without premarket review of the product. Accordingly, no changes are being proposed in FDA's current policy of reviewing “point of care” tests prior to marketing.
Interested persons were given until July 6, 1998, to submit written comments on the proposed rule. FDA received nine comments.
In the
FDA received nine comments on the proposed rule from individuals, manufacturers, and professional societies. The majority of comments supported FDA's proposed rule. A summary of the written comments as well as comments made at the public hearing and FDA's response is set forth in this section II.
1. Six comments generally supported regulating OTC test sample collection systems for drugs of abuse as class I devices exempt from the premarket notification requirements. These comments asserted that deregulation of home drug test collection systems outlined in the proposed rule made drug testing more affordable and more accessible. These comments indicated support for the testing laboratory to provide a health care professional to communicate the proper interpretation of test results from the laboratory to the lay user.
2. One comment stated that the rule fails to distinguish between test systems marketed directly to consumers and those intended for use in the workplace because the rule fails to take into account the additional safeguards that are present when drug testing is performed in the workplace. This comment went on to suggest that even if FDA concludes that it has jurisdiction to regulate all test systems, it should nevertheless exercise enforcement discretion with respect to drugs of abuse tests for the workplace because the workplace setting offers sufficient protections to “ensure sample integrity and test accuracy.”
FDA disagrees with this comment. As explained in the proposed rule, FDA concluded that there should be consistency in its regulation of drugs of abuse test sample collection systems used in the home, workplace, insurance, and sports settings. Issues related to consumer use and quality are similar in all these settings, including concerns about sample integrity and test accuracy. FDA believes the need to provide assurance of test accuracy and reliability applies equally in all these areas.
However, FDA will continue to exercise its enforcement discretion with respect to the use of these products in the law enforcement setting because there are protections to ensure sample integrity and test accuracy that are not generally available in the home, workplace, insurance and sports settings. The additional protections include the use of rules of evidence in judicial proceedings and the representation of the accused (i.e., the person being tested) through the judicial process.
3. One comment expressed concern over the proposal to exempt manufacturers from the 510(k) process and suggested the need for data to be presented to demonstrate that each analyte is unaffected by storage and transport, i.e., stored and not altered or interfered with. This comment stated that there is a potential for materials in collection cups to interfere with an accurate test result.
Mail-in drug testing is practiced routinely in many settings. The materials and methods for shipping urine are in widespread use for drugs of abuse testing in Substance Abuse and Mental Health Service Administration (SAMHSA) or equivalent certified laboratories. Data submitted to the FDA have shown drugs of abuse test specimens to be stable when shipped in accordance with the requirements of SAMHSA or equivalent certified laboratories. Although FDA has exempted the OTC test sample collection systems for drugs of abuse testing from premarket review, all of these systems will be required to use screening tests that have been approved, cleared, or otherwise recognized by FDA as accurate and reliable for testing. The final rule further requires manufacturers and suppliers to comply with medical device reporting requirements (21 CFR part 803) and report adverse events that may have been due to the OTC collection containers. FDA believes these general controls, without premarket notification, provide reasonable assurance that these products will be used safely and effectively.
4. One comment stated that FDA's proposed rule would impose on clinical laboratories using in-house (home brew) assays additional and burdensome requirements that are unnecessary under the Clinical Laboratory Improvement Amendments of 1988 (CLIA 88).
FDA disagrees with this comment. In order for products to be used OTC, they must be cleared by FDA. The agency believes that the FDA requirements will be complementary to those of CLIA and will address issues related to device safety and effectiveness outside the usual CLIA review program. CLIA requirements focus on the proficiency of the laboratories performing tests and the new regulation recognizes the need for such laboratories to have adequate expertise.
5. One comment stated that the rule unfairly discriminates against companies using screening assays for which there are no FDA-cleared screening tests, thereby imposing premarket approval requirements for the test system.
FDA does not agree that the rule discriminates unfairly. This rule is designed to ensure that there is a level playing field and that all manufacturers marketing home test collection systems use testing methods that have been approved, cleared, or otherwise recognized by FDA as accurate and reliable.
6. One comment voiced opposition to the FDA proposal to require companies marketing drugs-of-abuse test systems that employ in-house screening tests to establish validity of these tests with FDA before marketing the test system. This comment stated that FDA lacks jurisdiction to regulate the provision of laboratory testing services by clinical laboratories.
The agency believes that in-house (home brew) laboratory tests are medical devices subject to regulation by FDA. FDA considers clinical laboratories that develop such tests to be acting as manufacturers. In a recent regulation to classify/reclassify analyte specific reagents FDA stated its desire to regulate in-house developed tests in a way that would not inhibit the development of such tests or diminish the contribution they make to public health (62 FR 62243 at 62249, November 21, 1997). However, in instances where these tests are part of systems intended for lay users, the agency believes that the additional oversight provided by agency premarket review of the test is necessary to ensure the safety and effectiveness of the device.
7. One comment asked if the drugs of abuse testing required under the proposed rule would be covered under CLIA requirements for high complexity testing.
The answer is yes. Because the confirmation testing of presumptive positives is designated as a high complexity test under CLIA, CLIA standards for high complexity testing would apply.
8. Three comments emphasized the importance of confirmation of presumptive results and suggested that this be a mandatory part of OTC test sample collection systems.
FDA agrees with these comments. The rule specifically requires that the laboratory performing the test shall have adequate capability to reliably perform the necessary screening and confirmatory testing.
9. One comment suggested that laboratories testing any drugs of abuse or their metabolites not covered by SAMHSA should meet standards of organizations with deemed accreditation status such as College of American Pathologists (CAP).
FDA agrees with this comment. The agency's rule clearly stated that the laboratory performing the test shall have, and shall be recognized as having, adequate capability to reliably perform the necessary screening and confirmatory tests. Such recognition would include CAP accreditation.
10. One comment expressed concern that a high complexity CLIA certified laboratory (e.g., toxicology laboratory) would not meet the SAMHSA standards that are required for laboratories performing Federal workplace drug-testing. The comment stated that OTC products relying on non-SAMHSA certified laboratories would lower the standards of competency for drugs of abuse testing.
FDA recognizes that there are differences in toxicology laboratory certification programs. However, the agency believes that the standards established by the rule, as proposed, are appropriate, because they ensure an acceptable level of testing performance. As discussed previously, the rule requires the laboratory to be recognized as being able to reliably perform screening and confirmatory testing, including the capability to check biological specimens for possible adulteration. FDA believes that such recognition of capability and good laboratory practice may be demonstrated in a number of ways including SAMHSA certification, CAP accreditation, and CLIA high complexity designation.
11. One comment suggested FDA consider allowing laboratories to report the lowest concentration of drug they are able to detect in order to encourage improvement in the sensitivity of the system.
FDA has not specified concentration levels for drugs being tested in these systems. The agency expects sponsors to label their products to reflect the chosen performance levels using appropriate cut-off points.
12. One comment suggested it would be helpful to clarify whether the screening and confirmation testing must be performed at the same physical site in the same laboratory.
The regulation requires the laboratory performing the test to have adequate capability to reliably perform the necessary screening and confirmatory testing. While the expectation is that this testing usually will be performed at
13. One comment noted that laboratory customers are often not aware of the limits of the SAMHSA coverage and suggested that the regulation should make clear the actual jurisdiction of the SAMHSA standards.
FDA agrees that this is useful information. The dissemination of this information, however, falls outside of the scope of this rule.
14. One comment suggested that the guidance document that FDA intends to develop should encourage manufacturers to list all drugs that will not be covered under the test.
The agency does not agree that an exhaustive listing of drugs not being tested is reasonable or user-friendly. FDA believes the labeling for the test should clearly indicate: (1) What drugs are being tested, (2) what limitations exist, and (3) examples of these limitations. For example, a label may include the information that strong oxidizing agents such as bleach can oxidize drug analytes and explain that, if a sample is suspected of being adulterated, a new sample must be obtained. The agency intends to include examples of appropriate labeling in its guidance.
15. One comment suggested that test labeling should explicitly offer guidance on how to contact a resource for test interpretation as well as identifying resources for counseling and treatment.
FDA agrees with this comment. The regulation does require labeling of these products to include adequate instructions on how to obtain test results from a person who can explain their meaning, including the probability of false positive and false negative results, as well as how to contact a trained health professional if additional information on interpretation of test results from the laboratory or followup counseling is desired. In the
16. One comment stated that training of users is essential in collection of these specimens.
FDA agrees that this is an important issue. Guidance on labeling of home use devices is available both from NCCLS (GP-14-A “Labeling for Home Use In-Vitro Products”) and from FDA (“Write It Right” and “Points to Consider Regarding Labeling and Premarket Submissions for Home Use In-Vitro Diagnostic Devices”). These guidances can help manufacturers to develop high quality instruction manuals for users of medical devices in the home that are easy to read, understand, and follow. The manufacturers also can enlist the aid of health care professionals and home medical equipment suppliers to stress the importance of the manual to the lay users.
17. One comment objected that OTC drugs of abuse test kits are not medical devices under section 201(h) of the act (21 U.S.C. 321(h)). The comment argued that FDA lacks jurisdiction to regulate test kits that detect drugs of abuse in hair because they are not considered devices for medical diagnosis and treatment. This comment stated that hair analysis provides no information concerning intoxication or addiction.
FDA disagrees with the comment. The definition of device as set forth in section 201(h) of the act includes the following:
The term “device” * * * means an instrument, apparatus, implement, machine, contrivance, implant,
The test for evidence of drug abuse is intended to provide information about a condition, namely, whether drugs of abuse are being used or have been used by the subject. In addition, such information can be used to diagnose other conditions or diseases, including addiction or intoxication, and may also be used to eliminate such conditions as part of a diagnosis of an underlying disease.
18. One comment endorsed the use of hair testing and indicated that it provided a valuable extension of the window for testing for hard drugs of abuse in children.
FDA agrees that hair testing may be a valuable test. To date the agency has not received a premarket submission for such a test. The agency does believe that these tests should be subject to appropriate premarket scientific review. The review standards applied to these tests will depend on the claims the manufacturer makes. FDA is committed to working with companies to develop appropriate study design and generate data sets to help characterize performance and establish labeling for these products that would be of benefit to lay users.
19. One comment said that, if FDA requires agency premarket review of tests for hair or other nonurine specimens, the agency cannot impose a higher regulatory burden on hair-based testing than on urine-based testing.
FDA is not imposing a higher regulatory burden on hair-based testing than on urine-based testing. This rule applies to the OTC test sample collection system, not the test itself, and applies equally, whether the sample collected is hair or urine. The regulatory burden imposed on a device is contingent upon the intended use, indications for use, and technological characteristics of the individual device.
20. One comment suggested FDA's proposal is irrational in requiring premarket notification for a specimen collection container for hair while exempting from premarket notification urine specimen collection containers and other specimen collection containers that are used in conjunction with screening tests previously approved, cleared, or otherwise recognized by FDA.
The comment appears to misunderstand the rule. FDA will treat all collection containers used in these products in an equivalent manner. Whenever such containers are part of a system that uses a cleared, approved, or recognized test performed in an appropriately regulated laboratory, the collection container will be exempt from any premarket review.
The agency has determined under 21 CFR 25.34(b) that this proposed classification action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
FDA has examined the impacts of the rule under Executive Order 12866, and the Regulatory Flexibility Act (5 U.S.C. 601-612) (as amended by subtitle D of the Small Business Regulatory Fairness Act of 1996 (Public Law 104-121), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this rule is consistent with the regulatory philosophy and principles identified in the Executive Order. The Office of Management and Budget (OMB) has determined that this final rule is a significant regulatory action subject to review under the Executive Order.
The reclassification of OTC test sample collection systems for drugs of abuse testing (class III into class I exempt) is reasonably expected to provide economic benefit to the health care system, individual consumers, and regulated industry. At this time, only a very limited number of OTC products for drugs of abuse testing (without professional assistance) are available to parents. By greatly increasing access, this reclassification may provide benefits to families. First, testing may serve as a deterrent to drug use and prevent the initial experimentation with drugs of abuse by children. Next, when drugs are being used, increased access to testing may allow for earlier detection of this condition and provide opportunities for earlier intervention and treatment. Early intervention and treatment has the potential to be more successful. Finally, products for drugs of abuse testing marketed to parents may be used to monitor children already undergoing treatment for drug use, deterring or at least detecting recidivism, which is currently estimated at 30 to 50 percent. In addition, the regulation, which regulates such testing systems consistently in home, workplace, athletic, and insurance settings, will help ensure all consumers that the product produces accurate and reliable results.
FDA cannot quantify the beneficial effect on the public health that will result from easier access to these tests. Nevertheless, the agency finds that the product has significant potential to reduce drug use. As the nation's economic costs of drug abuse are staggering, estimated at up to $110 billion in 1995, the potential benefit from even a modest reduction would be substantial.
Moreover, the cost to industry will fall. Under the current classification, OTC test sample collection systems for drugs of abuse testing are class III medical devices requiring a premarket approval application (PMA). FDA has found that the median development cost for a PMA ranges from $0.5 to $ 1 million. Reclassifying these devices as class I devices exempt from premarket notification, which do not undergo premarket review, means that neither new sponsors nor product purchasers will incur these costs. Consequently, FDA expects the rule to reduce regulatory costs at the same time that it decreases the economic burdens of drug abuse.
The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Reclassification of this device from class III to class I will relieve all manufacturers of the device of the cost of complying with the premarket approval requirements in section 515 of the act (21 U.S.C. 360e). Because this rule will not require premarket review of the vast majority of OTC test sample collection systems for drugs of abuse testing, the agency certifies that this rule will not have a significant economic impact on a substantial number of small entities. In addition, this proposed rule will not impose costs of $100 million or more in any one year on either the private sector or State, local, and tribal governments in the aggregate, and therefore a summary statement of analysis under section 202(a) of the Unfunded Mandates Reform Act of 1995 is not required.
This final rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The title, description, and respondent description of these information collection provisions is given in this section V with an estimate of the annual reporting and recordkeeping burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.
There were no comments on the paperwork provisions in the proposed rule.
Individuals and organizations may submit comments on these burden estimates or on any other aspect of these information collection provisions, including suggestions for reducing the burden, and should direct them to the Office of Device Evaluation (HFZ-440), Center for Devices and Radiological Health, Food and Drug Administration, 2094 Gaither Rd., Rockville, MD 20850.
The information collection provisions in this final rule have been approved under OMB control number 0910-0368. This approval expires April 30, 2001. An agency may not conduct or sponsor,
Labeling, Medical devices.
Biologics, Blood, Laboratories, Medical devices, Packaging and containers.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 809 and 864 are amended as follows:
1. The authority citation for 21 CFR part 809 continues to read as follows:
21 U.S.C. 331, 351, 352, 355, 360b, 360c, 360d, 360h, 360i, 360j, 371, 372, 374, 381.
2. Section 809.10 is amended by adding paragraph (f) to read as follows:
(f) The labeling for over-the-counter (OTC) test sample collection systems for drugs of abuse testing shall bear the following information in language appropriate for the intended users:
(1) Adequate instructions for specimen collection and handling, and for preparation and mailing of the specimen to the laboratory for testing.
(2) An identification system to ensure that specimens are not mixed up or otherwise misidentified at the laboratory, and that user anonymity is maintained.
(3) The intended use or uses of the product, including what drugs are to be identified in the specimen, a quantitative description of the performance characteristics for those drugs (e.g., sensitivity and specificity) in terms understandable to lay users, and the detection period.
(4) A statement that confirmatory testing will be conducted on all samples that initially test positive.
(5) A statement of warnings or precautions for users as established in the regulations contained in 16 CFR part 1500 and any other warnings appropriate to the hazard presented by the product.
(6) Adequate instructions on how to obtain test results from a person who can explain their meaning, including the probability of false positive and false negative results, as well as how to contact a trained health professional if additional information on interpretation of test results from the laboratory or followup counseling is desired.
(7) Name and place of business of the manufacturer, packer, or distributor.
3. Section 809.40 is added to subpart C to read as follows:
(a) Over-the-counter (OTC) test sample collection systems for drugs of abuse testing (§ 864.3260 of this chapter) are restricted devices under section 520(e) of the Act subject to the restrictions set forth in this section.
(b) Sample testing shall be performed in a laboratory using screening tests that have been approved, cleared, or otherwise recognized by the Food and Drug Administration as accurate and reliable for the testing of such specimens for identifying drugs of abuse or their metabolites.
(c) The laboratory performing the test(s) shall have, and shall be recognized as having, adequate capability to reliably perform the necessary screening and confirmatory tests, including adequate capability to perform integrity checks of the biological specimens for possible adulteration.
(d) All OTC test sample collection systems for drugs of abuse testing shall be labeled in accordance with § 809.10(f) and shall provide an adequate system to communicate the proper interpretation of test results from the laboratory to the lay purchaser.
4. The authority citation for 21 CFR part 864 continues to read as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 371.
5. Section 864.3250 is amended in paragraph (a) by adding a sentence to the end of the paragraph to read as follows:
(a) * * * This section does not apply to specimen transport and storage containers that are intended for use as part of an over-the-counter test sample collection system for drugs of abuse testing.
6. Section 864.3260 is added to subpart D to read as follows:
(a)
(b)
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is classifying the laser fluorescence caries detection device into class II (special controls). The special controls that will apply to this device are set forth below. The
This rule is effective May 8, 2000.
Robert S. Betz, Center for Devices and Radiological Health (HFZ-480), Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 301-827-5283.
In accordance with section 513(f)(1) of the act (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the amendments, generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of the FDA regulations.
Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1) of the act, request FDA to classify the device under the criteria set forth in section 513(a)(1) of the act. FDA shall classify the device by written order within 60 days of receiving such a request. This classification shall be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the
On December 23, 1999, after review of KaVo America Corp.'s appeal, FDA reopened their petition under section 513(f)(2) of the act requesting classification of its DIAGNOdent Laser Fluorescence Caries Detection Device intended for aiding in the diagnosis of dental caries. After review of the information submitted in the petition, its amendments, and the original 510(k) notification (K983658), FDA issued an order on February 22, 2000, classifying the DIAGNOdent Laser Fluorescence Caries Detection Device and substantially equivalent devices of this generic type into class II under the generic name “laser fluorescence caries detection device.” FDA has determined that the laser fluorescence caries detection device can be classified in class II with the establishment of the following special controls:
1. That sale, distribution, and use of this device are restricted to prescription use in accordance with 21 CFR 801.109;
2. That premarket notifications include clinical studies, or other relevant information, that demonstrates that the device aids in the detection of tooth decay by measuring increased laser induced fluorescence; and
3. That the labeling must include detailed use instructions with precautions that urge users to: (a) Read and understand all directions before using the device, (b) store probe tips under proper conditions, (c) properly sterilize the emitter-detector handpiece before each use, and (d) properly maintain and handle the instrument in the specified manner and condition.
FDA believes that these class II special controls, in addition to the general controls, provide reasonable assurance of the safety and effectiveness of the device.
The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612) (as amended by subtitle D of the Small Business Regulatory Fairness Act of 1996 (Public Law 104-121)), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is consistent with the regulatory philosophy and principles identified in the Executive Order. In addition, the final rule is not a significant regulatory action as defined by the Executive Order and so it is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Classification of these devices into class II will relieve manufacturers of the device of the cost of complying with the premarket approval requirements of section 515 of the act (21 U.S.C. 360e), and may permit small potential competitors to enter the marketplace by lowering their costs. FDA knows of only one manufacturer of this type of device. Therefore, the agency certifies that this final rule will not have a significant impact on a substantial number of small entities. In addition, this final rule will not impose costs of $100 million or more on either the private sector or State, local, and tribal governments in the aggregate, and, therefore, a summary statement of analysis under section 202(a) of the Unfunded Mandates Reform Act is not required.
This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
Medical devices.
21 U.S.C. 351, 360, 360c, 360e, 360j, 371.
(a)
(b)
(1) Sale, distribution, and use of this device are restricted to prescription use in accordance with § 801.109 of this chapter;
(2) Premarket notifications must include clinical studies, or other relevant information, that demonstrates that the device aids in the detection of tooth decay by measuring increased laser induced fluorescence; and
(3) The labeling must include detailed use instructions with precautions that urge users to:
(i) Read and understand all directions before using the device,
(ii) Store probe tips under proper conditions,
(iii) Properly sterilize the emitter-detector handpick before each use, and
(iv) Properly maintain and handle the instrument in the specified manner and condition.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is classifying the nonimplanted, peripheral electrical continence device into class II (special controls). The special controls that will apply to this device are set forth below. The agency is taking this action in response to a petition submitted under the Federal Food, Drug, and Cosmetic Act (the act) as amended by the Medical Device Amendments of 1976, the Safe Medical Devices Act of 1990, and the Food and Drug Administration Modernization Act of 1997. The agency is classifying this device into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device.
This rule is effective May 8, 2000.
Laura J. Byrd, Center for Devices and Radiological Health (HFZ-470), Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 301-594-2194.
In accordance with section 513(f)(1) of the act (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the Medical Device Amendments of 1976 (the amendments), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and 21 CFR part 807 of the FDA regulations.
Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1), request FDA to classify the device under the criteria set forth in section 513(a)(1). FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the
On January 24, 2000, UroSurge, Inc., submitted a petition under section 513(f)(2) of the act requesting classification of its Percutaneous SANS Device intended for use in patients suffering from urinary urgency, frequency, or urge incontinence. After review of the information submitted in the petition and the premarket notification (K992069), FDA issued an order on February 9, 2000, classifying the UroSurge Percutaneous SANS (Stoller Afferent Nerve Stimulator) Device and substantially equivalent devices of this generic type into class II under the generic name, “nonimplanted, peripheral nerve stimulator for pelvic floor dysfunction.” FDA has determined that the nonimplanted, peripheral nerve stimulator for pelvic floor dysfunction can be classified in class II with the establishment of the following special controls:
1. That sale, distribution, and use of this device are restricted to prescription use in accordance with § 801.109 (21 CFR 801.109).
2. That the labeling must bear all information required for the safe and effective use of the device as outlined in § 801.109(c), including a detailed summary of the clinical information upon which the instructions are based.
FDA believes that these class II special controls, in addition to the general controls, provide reasonable assurance of the safety and effectiveness of the device.
The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612) and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is consistent with the regulatory philosophy and principles identified in the Executive Order. In addition, the final rule is not a significant regulatory action as defined by the Executive Order and so it is not subject to review under the Executive Order. The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Classification of these devices into class II will relieve manufacturers of the device of the cost of complying
This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
Medical devices.
21 U.S.C. 351, 360, 360c, 360e, 360j, 360l, 371.
(a)
(b)
(1) That sale, distribution, and use of this device are restricted to prescription use in accordance with § 801.109 of this chapter.
(2) That the labeling must bear all information required for the safe and effective use of the device as outlined in § 801.109(c) of this chapter, including a detailed summary of the clinical information upon which the instructions are based.
Office of Surface Mining Reclamation and Enforcement (OSM), Interior.
Final rule.
OSM is approving part of an amendment to the Illinois regulatory program (Illinois program) under the Surface Mining Control and Reclamation Act of 1977 (SMCRA). Illinois proposed revisions to its program concerning subsidence control, water replacement, adjustment of performance bond amounts, administrative review, release of performance bonds, siltation structures, impoundments, hydrologic balance, disposal of noncoal mine wastes, revegetation, backfilling and grading, prime farmland, and State inspections. This final rule document addresses Illinois' revisions concerning release of performance bonds, siltation structures, impoundments, hydrologic balance, disposal of noncoal mine wastes, revegetation, backfilling and grading, and prime farmland. We addressed the remaining program topics in two previous final rule documents. Illinois intends to revise its program to be consistent with the corresponding Federal regulations, to provide additional safeguards, and to improve operational efficiency.
April 7, 2000.
Andrew R. Gilmore, Director, Indianapolis Field Office, Office of Surface Mining, Minton-Capehart Federal Building, 575 North Pennsylvania Street, Room 301, Indianapolis, Indiana 46204-1521. Telephone: (317) 226-6700. Internet: INFOMAIL@indgw.osmre.gov.
On June 1, 1982, the Secretary of the Interior conditionally approved the Illinois program. You can find background information on the Illinois program, including the Secretary's findings, the disposition of comments, and the conditions of approval in the June 1, 1982,
By letter dated August 2, 1999 (Administrative Record No. IL-5044), the Illinois Department of Natural Resources (Department) submitted an amendment to the Illinois program under the Federal regulations at 30 CFR 732.17(b). The Department proposed to amend Title 62 of the Illinois Administrative Code (IAC) in response to our letters dated May 20, 1996, June 17, 1997, October 30, 1997, and January 15, 1999 (Administrative Record Nos. IL-1900, IL-2000, IL-2002, and IL-5036, respectively), that we sent to Illinois under 30 CFR 732.17(c). The amendment also includes changes made at the Department's own initiative.
We announced receipt of the amendment in the August 17, 1999,
During our review of the amendment, we identified concerns relating to siltation structures, impoundments, performance bonds, and State inspections. We also identified some nonsubstantive editorial errors. We notified Illinois of these concerns and editorial errors by letter dated September 21, 1999 (Administrative Record No. IL-5048). We also separated the amendment into three parts in order to expedite the State program amendment process. Part I concerned revisions to Illinois' regulations relating to subsidence control and water replacement. Because we did not identify any concerns relating to Illinois' revisions for subsidence control and water replacement, we made our final decision on them in a final rule on
By letter dated January 27, 2000 (Administrative Record No. IL-5052), Illinois sent us revisions to its proposed program amendment. On February 1, 2000, by telephone, Illinois notified us of additional revisions (Administrative Record No. IL-5053). Based upon Illinois' revisions to its amendment, we reopened the public comment period in the February 14, 2000,
Following, under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17, are our findings concerning the revisions to the Illinois program pertaining to definitions, release of performance bonds, siltation structures, impoundments, hydrologic balance, disposal of noncoal mine wastes, revegetation, backfilling and grading, and prime farmland.
Throughout the amended regulation sections discussed in this final rule, Illinois corrected typographical errors, punctuation, citation references, and other editorial-type errors; made minor wording changes; and simplified its use of numbers. Illinois also made some of the same types of corrections and changes in the sections listed in the table below:
These minor changes did not alter the requirements of the previously approved provisions in the Illinois regulations. Therefore, we find that they will not make the Illinois regulations less effective than the Federal regulations.
Illinois removed the following definition of “Institute” because it is no longer applicable to the Illinois program:
“Institute” means the Department of Energy and Natural Resources or such other agency as designated by the Director in accordance with Section 7.03 of the State Act.
The Department of Energy and Natural Resources no longer exists. On March 1, 1995, the Governor of Illinois signed Executive Order Number 2 (1995) that merged the Department of Energy and Natural Resources into the Department of Natural Resources. On February 9, 1999 (64 FR 6191), we approved the changes to section 7.03 of the State Act and to Illinois' regulations at 62 IAC Part 1764 that removed references to the Department of Energy and Natural Resources. Therefore, we find that the removal of this definition will not make the Illinois regulations less effective than the Federal Regulations.
By letters dated June 17, 1997, and January 15, 1999, under 30 CFR 732.17(c), we notified Illinois that it needed to change the Illinois regulations relating to siltation structures, impoundments, banks, dams, and embankments to be no less effective than the changes that were made to the Federal regulations on October 20, 1994 (59 FR 53022). In the October 20, 1994, rulemaking, OSM included standards from the U. S. Department of Agriculture, Soil Conservation Service Technical Release No. 60 (210-VI-TR60, Oct. 1985) as part of the Federal requirements for siltation structures and impoundments. These changes were made as a result of decisions by the U.S. District Court of the
1. Illinois made minor wording changes, including changing the term “operator” to the term “permittee”; revised all outdated citation references; and revised cross-references and paragraph notations to reflect organizational changes resulting from this amendment. We find that these changes are nonsubstantive and will not make Illinois' regulations less effective than the Federal regulations.
2.
Because the changes made to the above State regulations have the same meaning as the changes made to the corresponding Federal regulations, we find that the Illinois regulations are no less effective than the Federal regulations.
1. Illinois revised 62 IAC 1800.40(a)(1) to allow permittees to authorize a person to act on their behalf in filing an application for bond release and to allow the Department to initiate an application for bond release. Illinois also added a provision that requires the Department to undertake the notification and certification requirements of the applicant for bond releases initiated by the Department.
While the counterpart Federal regulation at 30 CFR 800.40(a)(1) allows a permittee to file an application for bond release, the Federal regulations are silent as to whether a regulatory authority may initiate bond release proceedings. However, a similar provision was approved for the Kentucky program on December 31, 1990 (55 FR 53490). Under Illinois' proposal, bond release proceedings initiated by the Department must conform with the same procedural steps as a bond release initiated by the permittee. Thus, the public participation and notification requirements of section 519 of SMCRA and the Federal regulations at 30 CFR 800.40 would still apply when the regulatory authority initiated a bond release in Illinois. There are also circumstances, such as the release of jurisdiction from an abandoned but fully reclaimed site, where it may be necessary for a party other than the permittee to initiate bond release. For the above reasons, we find that allowing the regulatory authority to initiate bond release does not make the Illinois regulations at 62 IAC 1800.40 less effective than the Federal regulations at 30 CFR 800.40.
2. Illinois removed its reference to the “operator” in the first sentence of 62 IAC 1800.40(a)(2) and added a reference to the “applicant.” Illinois removed its reference to the “operator's” in the second sentence of 62 IAC 1800.40(a)(2) and added a reference to the “permittee's.” Illinois removed its reference to the “permittee” in 62 IAC 1800.40(a)(3) and added a reference to the “applicant.” These changes were appropriate and further clarified that the notification and certification requirements for bond release must be completed, regardless of whether the application was initiated by the permittee, a person authorized to act for the permittee, or the Department. We find that the changes made to 62 IAC 1800.40(a)(2) and (a)(3) will not make Illinois' regulations less effective than the counterpart Federal regulations at 30 CFR 800.40(a)(2) and (a)(3).
3. At 62 IAC 1800.40(b)(2), Illinois added a requirement that the Department notify, by certified mail, the municipality and county in which the surface coal mining operation is located of the Department's final administrative decision to release or not to release all or part of the performance bond. The counterpart Federal regulation requirement at 30 CFR 800.40(e) also requires the regulatory authority to notify the municipality by certified mail before the release of all or a portion of the bond. We find that Illinois' new requirement is consistent with and no less effective than the counterpart requirement in the Federal regulation at 30 CFR 800.40(e).
At 62 IAC 1816.89(b) and 1817.89(b), Illinois is requiring that noncoal mine waste disposal areas reclaimed to cropland capability have a minimum of four feet of suitable soil cover. There is no counterpart Federal requirement for a minimum of four feet of soil cover at 30 CFR 816.89(b) and 817.89(b). However, the Federal and State regulations for soil replacement on prime farmland at 30 CFR 823.14(b) and 62 IAC 1823.14(a), respectively, require a minimum depth of four feet of soil and substitute soil material in most cases. Also, at 62 IAC 1825.14(a)(3), the Illinois regulation for soil replacement on high capability lands requires a minimum depth of four feet of darkened surface soil and agricultural root medium with specified exceptions. Based on the above discussion, we find that Illinois' requirement for soil cover depth at 62 IAC 1816.89(b) and 1817.89(b) is consistent with the Federal regulation requirement and other Illinois regulation requirements for cropland capable land. Therefore, we are approving this requirement.
Illinois revised 62 IAC 1817.101(a) to require that coal operators backfill and grade surface areas disturbed incident to underground mining activities in accordance with the time schedule approved by the Department in the permit, but not later than 12 months after cessation of active use as determined by the Department.
There is no specific Federal regulation counterpart. However, the Federal regulation at 30 CFR 817.100 requires that reclamation efforts, including backfilling and grading, occur as contemporaneously as practicable with underground coal mining operations. It also allows the regulatory authority to establish schedules that define contemporaneous reclamation. We find that Illinois' regulation requirements at 62 IAC 1817.101(a) are consistent with and no less effective than the Federal regulation requirements for contemporaneous reclamation at 30 CFR 817.100.
1.
b. Previously at 62 IAC 1816.111(d) and 1817.111(d), Illinois required that prime farmlands granted an exemption in accordance with 62 IAC 1785.17(a)(5) must meet the requirements of 62 IAC 1823.15. (Illinois' regulation at 62 IAC 1823.15 contains the revegetation requirements for prime farmland soils.) Illinois removed this requirement. We approved Illinois' removal of its exemption at 62 IAC 1785.17(a)(5) on May 29, 1996 (61 FR 26801). Therefore, the requirement at 62 IAC 1816.111(d) and 1817.111(d) is moot, and its removal is appropriate. We find that Illinois' revised regulations at 62 IAC 1816.111(d) and 1817.111(d) are consistent with and no less effective than the counterpart Federal regulations at 30 CFR 816.111(d) and 817.111(d).
2.
The Federal regulations at 30 CFR 816.116(b)(1) and 817.116(b)(1) provide the revegetation success standards for grazing land and pasture land. The Federal regulations at 30 CFR 816.116(b)(2) and 817.116(b)(2) contain the revegetation success standards for cropland. The Federal regulations at 30 CFR 823.15 provide the revegetation success standards for prime farmland. None of these regulations contain a counterpart to Illinois' proposed provision. However, we have always maintained that the primary responsibility for regulating surface coal mining and reclamation operations should rest with the States. The Federal regulations for revegetation were specifically written to allow States to account for regional diversity in terrain, climate, soils, and other conditions where mining occurs. In the May 12, 1983, final rule for 30 CFR Part 823, we recognized the possibility of alternative reclamation approaches by the operator if soil productivity was not restored within five or six years after initial planting (48 FR 21446). On November 25, 1998, we approved a provision for the Arkansas program that required the permittee to submit a mitigation plan if he or she could not demonstrate revegetation success in the fifth year after completion of initial seeding on cropland areas (63 FR 65062). The permittee had to include a statement of the problem and a discussion of methods to correct the problem. We have historically recognized that compaction of soil horizons decreases vegetative growth and crop yields and that deep tillage alleviates compaction (30 CFR 823.14(d); 48 FR 21452, 21457, May 12, 1983). For the reasons discussed above, we find that the proposed revegetation requirements at 30 CFR 816.116(b)(2) and 817.116(b)(2) will not make the Illinois regulations less effective than the Federal regulations at 30 CFR 816.116, 817.116, and 823.15.
Illinois revised subsection (d) by adding the following new requirement:
In those areas where the B or C horizons were not removed but may have been compacted or otherwise damaged during the mining operation, the permittee shall engage in deep tillage or other appropriate means to restore premining capabilities.
We find that Illinois' proposed requirement is substantively identical to the counterpart Federal regulation requirement at 30 CFR 823.14(d), and we are approving it.
On August 10, 1999, and February 3, 2000, we asked for comments from various Federal agencies who may have an interest in the Illinois program amendment (Administrative Record Nos. IL-5045 and IL-5054, respectively). We requested comments under section 503(b) of SMCRA and 30 CFR 732.17(h)(11)(i) of the Federal regulations.
By letter dated September 2, 1999, the Natural Resources Conservation Services (NRCS) provided two comments (Administrative Record No. IL-5047). The NRCS commented that:
(1) For clarity, references to the “U.S. Department of Agriculture, Soil Conservation Service Technical Release No. 60 (210-VI-TR60, Oct. 1985), Technical Release No. 60 (TR-60)” should be recorded to read “U.S. Department of Agriculture, Soil Conservation Service Technical Release No. 60 (210-VI-TR60, Oct. 1985), herein after referred to as TR-60.”
(2) In more than one instance, NRCS IL Technical Standard IL-378, “Ponds,” June 1992 is cited. The NRCS may revise that standard at any time and does not archive Technical Guide Standards. The State will need to archive a copy of the IL-378, June 1992 for future reference.
The references cited in comment (1) are substantively identical to the Federal counterpart references. However, both comments were provided to Illinois for its consideration.
By letter dated February 14, 2000 (Administrative Record No. IL-5056), the NRCS commented on Illinois' duplication of the design requirements under sections 1780.25(a)(2) and 1780.25(a)(3). The NRCS recommend that Illinois eliminate subsection (a)(3) and state at subsection (a)(2) that all impoundments shall meet the design requirements under subsection (a)(2).
Illinois' regulations at sections 1780.25(a)(2) and 1780.25(a)(3) are not inconsistent with the counterpart Federal requirements. However this comment was provided to Illinois for its consideration.
Under 30 CFR 732.17(h)(11)(i) and (ii), OSM is required to request comments and get the written concurrence of the EPA with respect to those provisions of the program amendment that relate to air or water quality standards promulgated under the authority of the Clean Water Act (33 U.S.C. 1251
Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and ACHP on amendments that may have an effect on historic properties. On August 10, 1999, and February 3, 2000, we requested comments on Illinois' amendment (Administrative Record Nos. IL-5045 and IL-5054, respectively), but neither responded to our request.
We requested public comments on the proposed amendment, but did not receive any.
Based on the above findings, we are approving the amendments to the Illinois program as submitted by the Department on August 2, 1999, and as revised on January 27 and February 1, 2000.
We approve the regulations that Illinois proposed with the provision that they be published in identical form to the regulations submitted to and reviewed by OSM and the public. To implement this decision, we are amending the Federal regulations at 30 CFR Part 913, which codify decisions concerning the Illinois program. We are making this final rule effective immediately to expedite the State program amendment process and to encourage Illinois to bring its program into conformity with the Federal standards. SMCRA requires consistency of State and Federal standards.
This rule is exempted from review by the Office of Management and Budget under Executive Order 12866.
This rule does not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulation.
This rule does not have federalism implications. SMCRA delineates the roles of the Federal and State governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be “in accordance with” the requirements of SMCRA, and section 503(a)(7) requires that State programs contain rules and regulations “consistent with” regulations issued by the Secretary under SMCRA.
The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 and has determined that, to the extent allowed by law, this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments since each such program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR Parts 730, 731, and 732 have been met.
Section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that a decision on a proposed State regulatory program provision does not constitute a major Federal action within the meaning of section 102(2)(C) of the National Environmental Policy Act (NEPA) (42 U.S.C. 4332(2)(C)). A determination has been made that such decisions are categorically excluded from the NEPA process (516 DM 8.4.A).
This rule does not contain information collection requirements that require approval by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3507
The Department of the Interior has determined that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:
a. Does not have an annual effect on the economy of $100 million.
b. Will not cause a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions.
c. Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S. based enterprises to compete with foreign-based enterprises.
This determination is based upon the fact that the State submittal which is the subject of this rule is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation was not considered a major rule.
This rule will not impose a cost of $100 million or more in any given year on any governmental entity or the private sector.
Intergovernmental relations, Surface mining, Underground mining.
30 U.S.C. 1201
Coast Guard, DOT.
Notice of temporary deviation from regulations.
Notice is hereby given that the Commander, Seventh Coast Guard District has approved a temporary deviation from the regulations governing the operation of the CSX Railroad Drawbridge across Ortega River, mile 1.1, which parallels U.S. 17, at Jacksonville, Duval County, Florida. This deviation allows the drawbridge owner or operator to close the bridge from 7 a.m. to 7 p.m. each day on April 11 and 12, 2000, with alternative dates of April 18, 2000 and April 19, 2000. The draw shall open as soon as possible for public vessels of the United States, State and local vessels used in public safety, vessels in distress where a delay would endanger life or property, commercial vessels engaged in rescue or emergency salvage operations, and vessels seeking shelter from severe weather. This temporary deviation is issued to allow the bridge owner to safely conduct necessary repairs to the drawbridge.
This deviation is effective from 7 a.m on April 11, 2000, to 7 p.m. on April 19, 2000.
Mr. Brodie Rich, Project Manager, Seventh Coast Guard District, Bridge Section at (305) 536-5117.
The CSX railroad drawbridge across Ortega River at Jacksonville, has a vertical clearance of 2 feet above mean high water (MHW) and 3 feet above mean low water (MLW) measured at the fenders in the closed position. On March 6, 2000, TIC The Industrial Company, the contractor representing the drawbridge owner, requested a deviation from the current operating schedule in 33 CFR 117.5. This temporary deviation was requested to allow necessary repairs to the drawbridge in a critical time sensitive manner. The contractor has advised us that the drawbridge is likely to suffer failure of operation and increase the intensity and length of time in order to complete the necessary repairs.
The District Commander has granted a temporary deviation from the operating requirements listed in 33 CFR 117.5 for the purpose of conducting repairs to the drawbridge. During this deviation period, the CSX Railroad Drawbridge need not open for the passage of vessels from 7 a.m. to 7 p.m. each day on April 11 and 12, 2000, with an alternate date of April 18 and 19, 2000, if inclement weather prevents repairs on April 11 and 12. The deviation period begins on April 11, 2000 and ends on April 19, 2000.
Coast Guard, DOT.
Interim rule; request for comments.
The Coast Guard is revising its 1999 interim rule on the Tongass Narrows seven-knot speed limit and is requesting additional public comment before finalizing the rule. Numerous public comments received during 1999 criticized the speed limit exemption applicable to “non-commercial, open skiffs of less than 20 feet in length” as too restrictive. The Coast Guard is revising the exemption to include all small vessels of 23 feet or less, registered length. This change allows an increased number of small vessels that create little wake to transit crowded areas of Tongass Narrows more quickly, thereby relieving congestion.
The interim rule becomes effective May 8, 2000. Comments regarding this interim rule must be received by October 31, 2000.
A public hearing will be held on August 19, 2000 at 7 p.m. AST.
You may mail comments to Commander (m), Seventeenth Coast Guard District, Federal Building, 709 West 9th Street, seventh floor, room 753, Juneau, Alaska, between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The telephone number is 907-463-2187. The Seventeenth Coast Guard District, Marine Safety Division, maintains the public docket
For information concerning this document, call the Supervisor, U.S. Coast Guard Marine Safety Detachment, Ketchikan, Alaska, telephone 907-225-4496.
The Coast Guard encourages you to participate in this rulemaking by submitting written data, views, or arguments. Persons submitting comments should include their names and addresses, identify this rulemaking (CGD17-99-002) and the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and attachments in an unbound format, no larger than 8
The Coast Guard will consider all comments received during the comment period. It may change this interim rule in view of the comments.
The Coast Guard has scheduled a public hearing for 7 p.m. (AST), August 19, 2000, at the Ted Ferry Civic Center, 888 Venetia Avenue, Ketchikan, Alaska.
Persons may request an additional public hearing by writing to Commander (m), Seventeenth Coast Guard District at the address under
On March 25, 1999, the Coast Guard published a Notice of Proposed Rulemaking (NPRM) entitled “Anchorage Ground, Safety Zone, Speed Limit, Tongass Narrows and Ketchikan, AK” in the
On June 1, 1999 an interim rule was published entitled “Anchorage Ground, Safety Zone, Speed Limit, Tongass Narrows and Ketchikan, AK” in the
The interim rule published in 1999 revised the safety zone in Ketchikan Harbor as well as the 7-knot speed limit in Tongass Narrows. It redesignated the safety zone in Ketchikan Harbor as an anchorage ground and required transiting vessels, other than those engaged in anchoring evolutions, to proceed through the anchorage by the most direct route without delay or sudden course changes.
The Coast Guard received comments from 21 persons regarding the 1999 interim rule. The comments included oral comments made at the August 27th, 1999, public meeting and four letters. No comments were received concerning the anchorage area and this portion of the interim rule remains unchanged. Numerous comments criticized the speed limit exemption for being unnecessarily restrictive. Responses to these comments on the 1999 interim rule are discussed in the following paragraphs.
The most frequent comments addressed the exemption for “non-commercial open skiffs”. Of the 21 persons that commented on the 1999 interim rule (several persons commented on multiple aspects), 10 commented on this exemption, stating that the term “non-commercial, open skiff” created confusion as to when a vessel was considered “open” vice enclosed. The Coast Guard agrees and the term “non-commercial, open skiff” has been removed.
Nine comments were received concerning the vessel length exemption from the 7-knot speed limit based on vessel length of less than 20 feet. Seven of the comments favored increasing the size of vessels exempted to 26 feet and one favored increasing the size to 25 feet. Two comments favored keeping the size of vessel exempted from the 7-knot speed limit at 20 feet or less. Additionally, five comments favored an exemption for non-displacement hull vessels.
The Coast Guard agrees that the 20-foot vessel length exemption can be increased without adversely affecting the safety of the waterway and without causing a significant increase in vessel wakes. However, numerous comments that were received as a result of the notice of proposed rulemaking concerned the impact of any rule that split the charter fishing vessel fleet. Commenters were concerned that such a split would provide an unfair economic advantage to certain portions of the charter fishing vessel fleet.
According to data obtained by the Coast Guard from the State of Alaska Commercial Fisheries Entry Commission, there are 167 charter vessels that routinely operate in and around Tongass Narrows. This data, which is depicted in the following table, indicates:
The Coast Guard disagrees with the five comments favoring exemption for planing hull vessels from the seven-knot speed limit. An exemption based on hull type would be very difficult to enforce due to the variety of hull types and nomenclature and possible confusion within the maritime community. For this reason, an exemption based on hull type will not be used.
Three persons commented on the southern boundaries of the seven-knot speed limit. One comment stated that the eastern channel boundary should be extended to the south to the Saxman City breakwater. Two persons commented that the western channel boundary should be moved to the south, away from the cable crossing area.
The Coast Guard disagrees that the eastern channel boundary should be extended. The eastern channel boundary was moved north in the 1999 interim rule in an effort to minimize the size of the seven-knot zone without
One comment noted that the regulatory marker in the western channel should be located outside the cable crossing area. The published position of the western channel regulatory marker is outside of the charted cable crossing area. The buoy tender that services this buoy has been asked to check the actual location of this regulatory marker.
Two comments were received that favored extending the northern boundary of the seven-knot speed zone northward to Channel Island as a way to control wake damage to private and commercial property caused by large vessels transiting this area. The Coast Guard disagrees that the boundary should be extended any further than Tongass Narrows Buoy 9. The overwhelming majority of 129 comments received in 1998 favored a slight extension of the 7-knot speed limit zone but these comments did not support extending the zone as far north as Channel Island. In light of all comments received, the Coast Guard believes that the present northerly boundary of the 7-knot speed limit zone, located at Tongass Narrows Buoy 9, is appropriate and no change is made.
Two comments were received on making the speed limit seasonal to align with the summer tourist season. One facility operator stated that if the rule were made seasonal, it would increase the risk of a large wake parting a line on an oil barge during transfer operations, thereby potentially increasing the chances of an oil spill. During the entire rule making process, the majority of the comments favored the existence of the year round 7-knot rule. The consensus expressed was that if the 7-knot speed limit were seasonal, the risk on the waterway would not be reduced in the off months and the amount of wake damage to private and commercial property on Tongass Narrows would most likely increase. The Coast Guard agrees that the rule should apply year around and no change is made.
One comment favored the creation of a high-speed traffic corridor through the middle of the waterway. Other commenters felt that creating a high-speed corridor would unreasonably increase the risk to vessels operating on Tongass Narrows. This proposal is not adopted.
Based on all the comments, we are not finalizing the 1999 interim rule at this time. Instead, we are changing one provision of that rule (33 CFR 162.240(b)) and are providing an additional opportunity for comment. Section 110.231 of Title 33 CFR is not being changed and continues as an interim rule provision. By exempting “vessels of 23 feet registered length or less”, the traffic congestion in the affected areas of Tongass Narrows should be eased and the safety of the small vessel operators enhanced. With the exemption for these small vessels, they will be able to depart from, or transit through the congested areas more quickly. This in turn should ease congestion and reduce navigational conflicts that have arisen between slow moving small boats and cruise ships and other large waterway users and will allow them to spend less time on the water during periods of inclement weather. Large wakes should not become a problem as the exemption is still limited to smaller vessels and because Tongass Narrows regularly experiences substantial wave action that is equivalent to the wake from these smaller vessels. The impacts to the charter fleet are considered minimal because the revised interim rule exempts only 12 of 152 charter vessels that are over 20 feet in length. The revised interim rule retains the 7-knot speed limit for all other vessels except floatplanes and public law enforcement and emergency response vessels.
This interim rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, 1979).
The Coast Guard expects the economic impact of this interim rule to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary. This is because the regulation is designed to reduce the impacts of the existing speed limit upon waterway users. With regards to the size of vessel exempted from this 7-knot speed limit, the majority of the comments received recognized the need to control congestion, but objected to an exemption that was limited to “non-commercial open skiffs”. After reviewing the written comments submitted and listening to the oral comments, the Coast Guard concurs and has revised the exemption to read “vessels of 23 feet registered length or less”.
Under the Regulatory Flexibility Act [5 U.S.C. 601-612
The Coast Guard believes there may be some impact to small entities, but that it will be minimal or non-existence, based on the extensive comments received from the charter sport fishing industry and the relevant data (only 12 of 152 charter vessels fall under the more generous exemption). Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. If however, you think that your business or organization qualifies as a small entity and that this proposed rule will have a significant economic impact on your business or organization, please submit a comment (see
Under Section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effect on them and participate in the rulemaking process.
This interim rule calls for no new collection of information under the Paperwork Reduction Act of 1995 [44 U.S.C. 3501
The Coast Guard has analyzed this interim rule under the principles and criteria contained in E.O. 12612 and has determined that this interim rule does not have sufficient implications for federalism to warrant the preparation of a Federalism Assessment.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531
This rule will not effect a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.
The Coast Guard considered the environmental impact of this interim rule and concluded that under figure 2-1, paragraph (34)(g) of COMDTINST M18475.1C, this interim rule is categorically excluded from further environmental documentation because it establishes a regulated navigation area. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under
Navigation (water), Waterways.
33 U.S.C. 1231; 49 CFR 1.46.
(b) No vessel, except for public law enforcement and emergency response vessels, floatplanes during landings and take-offs, and vessels of 23 feet registered length or less, shall exceed a speed of 7 knots in the region of Tongass Narrows bounded to the north by Tongass Narrows Buoy 9 and to the south by Tongass Narrows East Channel Regulatory marker at position 55° 19′ 22.0″ N, 131° 36′ 40.5″ W and Tongass Narrows West Channel Regulatory marker at position 55° 19′ 28.5″ N, 131° 39′ 09.7″ W, respectively.
Environmental Protection Agency (EPA).
Direct final rule.
EPA is approving a revision to the Georgia State Implementation Plan (SIP) that contains the transportation conformity rule pursuant to sections 110(k) and 176 of the Clean Act as amended in 1990 (Act) . The transportation conformity rule assures that projected emissions from transportation plans and projects in air quality nonattainment or maintenance areas stay within the motor vehicle emissions ceiling contained in the SIP. The transportation conformity SIP revision enables the State to implement and enforce the Federal transportation conformity requirements at the State level per EPA regulation—Conformity to State or Federal Implementation Plans of Transportation Plans, Programs, and Projects Developed, Funded or Approved Under Title 23 U.S.C. of the Federal Transit Laws. This EPA approval action streamlines the conformity process and allows direct consultation among agencies at the local level. This final approval action is limited to Transportation Conformity. Rationale for approving this SIP revision is provided in the “Supplementary Information” Section of this action.
This direct final rule is effective on June 6, 2000, without further notice, unless EPA receives adverse comment by May 8, 2000. If adverse comment is received, EPA will publish a timely withdrawal of the direct final rule in the
All comments should be addressed to Kelly Sheckler at the EPA, Region 4 Air Planning Branch, 61 Forsyth Street, SW, Atlanta, Georgia 30303.
Copies of the state submittal are available at the following addresses for inspection during normal business hours:
Kelly Sheckler, at 404/562-9042, E-mail: Sheckler.Kelly@epa.gov.
Outlined below are the contents of this document:
The states, under section 110 of the Act, must develop air pollution regulations and control strategies to ensure that state air quality meets the National Ambient Air Quality Standards (NAAQS) established by EPA. The Act, under section 109, established these NAAQS which currently address six criteria pollutants. These pollutants are: carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.
Each state must send these regulations and control strategies to EPA for approval and incorporation into the Federally enforceable SIP, which protects air quality and contains emission control plans for NAAQS nonattainment areas. These SIPs can be extensive, containing state regulations or other enforceable documents and supporting information such as emission inventories, monitoring networks, and modeling demonstrations.
The states must formally adopt the regulations and control strategies consistent with state and Federal laws for incorporating the state regulations into the Federally enforceable SIP. This process generally includes a public notice, public comment period, public hearing, and a formal adoption by a state-authorized rulemaking body.
Once a state rule, regulation, or control strategy is adopted, the state will send these provisions to EPA for inclusion in the Federally enforceable SIP. EPA must then determine the appropriate Federal action, provide public notice, and request additional public comment on the action. The possible Federal actions include: approval, disapproval, conditional approval and limited approval/disapproval. If adverse comments are received, EPA must consider and address the comments before taking final action.
EPA incorporates state regulations and supporting information (sent under section 110 of the Act) into the Federally approved SIP through the approval action. EPA maintains records of all such SIP actions in the CFR at Title 40, part 52, entitled “Approval and Promulgation of Implementation Plans.” The EPA does not reproduce the text of the Federally approved state regulations in the CFR. They are “incorporated by reference,” which means that the specific state regulation is cited in the CFR and is considered a part of the CFR the same as if the text were fully printed in the CFR.
Conformity first appeared as a requirement in the Act's 1977 amendments (Public Law 95-95). Although the Act did not define conformity, it stated that no Federal department could engage in, support in any way or provide financial assistance for, license or permit, or approve any activity which did not conform to a SIP which has been approved or promulgated.
The 1990 Amendments to the Act expanded the scope and content of the conformity concept by defining conformity to a SIP. Section 176(c) of the Act defines conformity as conformity to the SIP's purpose of eliminating or reducing the severity and number of violations of the NAAQS and achieving expeditious attainment of such standards. Also, the Act states that no Federal activity will: (1) Cause or contribute to any new violation of any standard in any area, (2) increase the frequency or severity of any existing violation of any standard in any area, or (3) delay timely attainment of any standard or any required interim emission reductions or other milestones in any area. The requirements of section 176(c) of the Clean Air Act apply to all departments, agencies and instrumentalities of the Federal government. Transportation conformity refers only to the conformity of transportation plans, programs and projects that are funded or approved under title 23 U.S.C. of the Federal Transit Act.
A transportation conformity SIP is a plan which contains criteria and procedures for the Department of Transportation (DOT), Metropolitan Planning Organizations (MPOs), and other state or local agencies to assess the conformity of transportation plans, programs and projects to ensure that they do not cause or contribute to new violations of a NAAQS in the area substantially affected by the project, increase the frequency or severity of existing violations of a standard in such area or delay timely attainment. 40 CFR 51.390, subpart T requires states to submit a SIP that establishes criteria for conformity to EPA. 40 CFR part 93, subpart A, provides the criteria the SIP must meet to satisfy 40 CFR 51.390.
EPA was required to issue criteria and procedures for determining conformity of transportation plans, programs, and projects to a SIP by section 176(c) of the Act. The Act also required the procedure to include a requirement that each state submit a revision to its SIP including conformity criteria and procedures. EPA published the first transportation conformity rule in the November 24, 1993,
The Federal or state transportation conformity rule applies to all NAAQS nonattainment and maintenance areas in the state. The Metropolitan Planning Organizations (MPO), the State Department of Transportation (DOT) (in absence of a MPO), and U.S. Department of Transportation (USDOT) make conformity determinations. These agencies make conformity determinations on programs and plans such as transportation improvement programs (TIP), transportation plans, and projects. The MPOs calculate the projected emissions that will result from implementation of the transportation plans and programs and compare those
The State of Georgia chose to address the transportation conformity SIP requirement through the development of an MOA. On February 16, 1999, the State of Georgia, through the Department of Natural Resources (DNR), submitted the State's transportation conformity and consultation interagency MOA to EPA as a revision to the SIP. The Georgia Air Quality Act, Article 1: Air Quality (O.C.G.A. 12-9-1,
EPA is approving the Georgia transportation conformity MOA that the Director of the Georgia DNR submitted to the Region 4 office of the EPA on February 16, 1999, except for the following sections: section 110 (c)(1)(ii); section 110 (c)(2)(ii); section 110 (d)(2)(i); section 110 (d)(3)(i); section 110 (e)(2)(i); section 110 (e)(3)(i); section 119 (e)(1); section 119b(a)(2); section 133; section 103(4)(d); section 106 (c) and, section 130 (1). The rationale for exclusion of these sections is discussed in section II.E of this action. The Georgia DNR Transportation Conformity MOA is the same as the Federal rule, with the exception of the specific interagency consultation procedures and the definition of “regionally significant”.
EPA has evaluated this SIP revision and has determined that the State has met the requirements of Federal transportation conformity rule as described in 40 CFR part 51, subpart T and 40 CFR part 93, subpart A. The Georgia DNR has satisfied the public participation and comprehensive interagency consultation requirement during development and adoption of the MOA at the local level. Therefore, EPA is approving the MOA as a revision to the Georgia SIP.
EPA's rule requires the states to develop their own processes and procedures for interagency consultation among the Federal, state, and local agencies and resolution of conflicts meeting the criteria in 40 CFR 93.105. The SIP revision must include processes and procedures to be followed by the MPO, state DOT, and USDOT in consulting with the state and local air quality agencies and EPA before making conformity determinations. The transportation conformity SIP revision must also include processes and procedures for the state and local air quality agencies and EPA to coordinate the development of applicable SIPs with MPOs, state DOTs, and USDOT.
The State of Georgia developed its consultation rule based on the elements contained in 40 CFR 93.105, and included it in the MOA, Exhibit 1, section 106. As a first step, the State worked with the existing transportation planning organization's interagency committee that included representatives from the State air quality agency, State Department of Transportation, the Atlanta Regional Commission (the MPO), Federal Highway Administration—Georgia Division, Federal Transit Administration, Metropolitan Area Rapid Transit Authority, Cobb County Transit Authority, Douglas County Transit Authority, Gwinnett County Transit Authority and EPA. The interagency committee met regularly and drafted the consultation rules considering elements in 40 CFR 93.105 and 23 CFR part 450, and integrated the local procedures and processes into the consultation MOA. The consultation process developed in this MOA is unique to the State of Georgia. The MOA is enforceable against the parties by their consent in the MOA to allow the Attorney General for the State of Georgia to sue any or all of the agencies for specific performance or other relief on behalf of the citizens of Georgia in
The Sierra Club challenged this section of the second set of amendments to the transportation conformity rule arguing that allowing a 120 day grace period was unlawful under the Act. On November 4, 1997, the United States Court of Appeals for the District of Columbia Circuit held in
EPA promulgated the third set amendments to the transportation conformity rule on August 15, 1997. On March 2, 1999, the United States Court of Appeals for the District of Columbia Circuit issued its opinion in
(a) 40 CFR 93.102(c)(1) which allowed certain projects for which the National Environmental Policy Act (NEPA) process has been completed by the DOT to proceed toward implementation without further conformity determinations during a conformity “lapse”. A lapse is a situation in which the conformity determination for the transportation plan or TIP has expired, and there is no currently conforming transportation plan and TIP. As such, there are restrictions on proceeding with federally funded and regionally significant projects;
(b) 40 CFR 93.118(e) which allowed use of motor vehicle emissions budgets (budgets) in the submitted SIPs after 45 days if EPA had not declared them inadequate;
(c) 40 CFR 93.120(a)(2) which allowed use of the budgets in a disapproved SIP for 120 days after disapproval;
(d) 40 CFR 93.121(a)(1) which allowed the nonfederally funded, regionally significant projects to proceed if included in the first three years of the most recent conforming transportation plan and transportation improvement program, even if conformity status is currently lapsed; and
(e) 40 CFR 93.124(b) which allowed areas to use a submitted SIP that allocated portions of a safety margin to transportation activities for conformity purposes before EPA approval.
States were required to submit transportation conformity SIPs to satisfy the requirements for the third set of amendments to the transportation conformity rule by August 15, 1998. Many of these SIP submittals, developed prior to the March 2, 1999 Court ruling, included provisions from the transportation conformity rule verbatim. As such, the State of Georgia's SIP revision included sections which the Court ruled unlawful or remanded for consistency with the Act. Therefore, in accordance with the Court's ruling, EPA can not approve the following sections of the Georgia MOA which relate to the above reference sections of the Federal conformity rule: Section 110 (c)(1)(ii); section 110 (c)(2)(ii); section 110 (d)(2)(i); section 110 (d)(3)(i); section 110 (e)(2)(i); section 110 (e)(3)(i); section 119 (e)(1); section 119b(a)(2); section 133; section 103 (4)(d); section 106 (c) and section 130 (1).
The State of Georgia submitted additional information which has complied with the EPA requirements for a transportation conformity SIP and has adopted the Federal rules in an MOA which were in effect at the time that the transportation conformity SIP was due to the EPA. If the Court had issued its ruling before adoption and SIP submittal by the Georgia DNR, EPA believes the Georgia DNR would have removed these sections from its MOA The Georgia DNR has expended its resources and time to prepare this SIP and meet the statutory deadline, and EPA acknowledges the agency's good faith effort in submitting the transportation conformity SIP in a timely manner.
The Georgia DNR will be required to submit a SIP revision in the future when EPA revises its rule to comply with the Court decision. Because the Court decision has invalidated the aforementioned affected provisions, EPA believes that it is reasonable to exclude the corresponding sections of the State rules from this SIP approval action. As a result, EPA is not taking any SIP action on the following Sections of the Georgia MOA : 110 (c)(1)(ii); 110 (c)(2)(ii);110 (d)(2)(i);110 (d)(3)(i);110 (e)(2)(i); 110 (e)(3)(i); 119 (e)(1); 119b(a)(2); 133; 103 (4)(d); 106 (c) and, 130 (1) which relate to the Federal rule sections 93.102(c), 93.104(d), 93.109(c)-(f), 93.118(e), 93.120(a)(2), 93.121(a)(1), and 93.124(b). The conformity determinations affected by these sections should comply with the relevant requirements of the statutory provisions of the Act underlying the Court's decision on these issues. EPA will be issuing guidance on how to implement these provisions in the interim prior to EPA's amendment of the Federal transportation conformity rule. Once this Federal rule has been revised, conformity determinations in Georgia should comply with the requirements of the revised Federal rule until corresponding provisions of the Georgia conformity SIP have been approved by EPA.
The EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comment. However, in the “Proposed Rules” section of today's
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings' issued under the executive order. This rule does not impose an information collection burden under the provisions of the
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Carbon monoxide, Hydrocarbons, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides.
42 U.S.C. 7401
(e) EPA approved non-regulatory provisions.
Environmental Protection Agency (EPA).
Direct final rule.
EPA is aproving the Allegheny County, Pennsylvania hospital/medical/infectious waste incinerator (HMIWI) 111(d)/129 plan (the “plan”) submitted on June 24, 1999 by the Pennsylvania Department of Environmental Protection (PADEP) on behalf of the Allegheny County Health Department (ACHD). The plan establishes emission limitations and other requirements for existing HMIWIs, and provides for the implementation and enforcement of those limitations and requirements.
This final rule is effective June 6, 2000 unless within May 8, 2000 adverse or critical comments are received. If adverse comment is received, EPA will publish a timely withdrawal of the direct final rule in the
Comments may be mailed to Makeba A. Morris, Chief, Technical Assessment Branch, Mailcode 3AP22, Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the documents relevant to this action are available for public inspection during normal business hours at the following locations: Air Protection Division, Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103-2029; and the Allegheny County Health Department, Air Quality Program, 301 39th Street, Pittsburgh, Pennsylvania 15201-1891.
James B. Topsale at (215) 814-2190, or by e-mail at topsale.jim@epamail.gov.
This document is divided into Sections I through V and answers the questions posed below.
A. EPA is approving the Allegheny County 111(d)/129 plan (the “plan”) for the control of air pollutant emissions
A. Section 111(d) of the Clean Air Act (CAA) requires that “designated” pollutants, controlled under standards of performance for new stationary sources by Section 111(b) of the CAA, must also be controlled at existing sources in the same source category to a level stipulated in an emission guidelines (EG) document. Section 129 of the CAA specifically addresses solid waste combustion and emissions controls based on what is commonly referred to as maximum achievable control technology (MACT). Section 129 requires EPA to promulgate a MACT based emission guideline (EG) document, and then requires states to develop 111(d)/129 plans that implement and enforce the EG requirements. The HMIWI EG at 40 CFR part 60, subpart Ce, establish the MACT requirements under the authority of both Sections 111(d) and 129 of the CAA. These requirements must be incorporated into a State/local 111(d)/129 plan that is “at least as protective” as the EG, and is Federally enforceable upon approval by EPA.
The procedures for adoption and submittal of State 111(d)/129 plans are codified in 40 CFR part 60, subpart B. Additional information on the submittal of State plans is provided in the EPA document, “Hospital/Medical/Infectious Waste Incinerator Emission Guidelines: Summary of the Requirements for Section 111(d)/129 State Plan, EPA-456/R-97-007, November, 1997.”
A. The September 15, 1997 promulgated EG, Subpart Ce, are applicable to all existing HMIWIs (
A. HMIWI emissions can have adverse effects on both public health and the environment. Dioxin, lead, and mercury can bioaccumulate in the environment. Exposure to dioxins/furans has been linked to reproductive and developmental effects, changes in hormone level, and chloracne. Respiratory and other effects are associated with exposure to particulate matter, sulfur dioxide, cadmium, hydrogen chloride, and mercury. Health effects associated with exposure to cadmium, and lead included probable carcinogenic effects. Acid gases contribute to the acid rain that lowers the pH of surface waters and watersheds, harms forests, and damages buildings.
A. The plan must meet the requirements of both 40 CFR part 60, subparts B, and Ce. Subpart B specifies detailed procedures for the adoption and submittal of State plans for designated pollutants and facilities. The EG, Subpart Ce, and the related new source performance (NSPS), Subpart Ec, contain the requirements for the control of designated pollutants, as listed above, in accordance with Sections 111(d) and 129 of the CAA. In general, the applicable provisions of Subpart Ec relate to compliance and performance testing, monitoring, reporting, and recordkeeping. More specifically, the Allegheny County plan must meet the requirements of: (1) 40 CFR part 60, subpart Ce, Sections 60.30e through 60.39c, and the related Subpart Ec provisions; and (2) 40 CFR part 60, subpart B, Sections 60.23 through 26.
A. Consistent with the requirements of Subparts B, Ce and Ec, the Allegheny County plan contains the following elements:
1. A demonstration of the County's legal authority to implement the plan under County and Pennsylvania law;
2. Identification of the County's enforceable mechanism, ACHD Rules and Regulations, Article XXI, Sections 2101.20 and 2105.32;
3. Source and emission inventories, as required;
4. Emission limitation requirements that are no less stringent than those in Subpart Ce;
5. A source compliance schedule, including increments of progress, as required;
6. Source testing, monitoring, recordkeeping, and reporting requirements;
7. HMIWI operator training and qualification requirements;
8. Requirements for development of a Waste Management Plan;
9. Records of the public hearing on the County plan;
10. Provision for County submittal to EPA of annual reports on progress in plan enforcement; and
11. A Title V permit application due date.
The ACHD HMIWI regulations were approved by the Allegheny County Board of Health on March 11, 1998 and by the Board of County Commissioners on November 19, 1998. The regulations became effective on September 1, 1999, and incorporate by reference (IBR) applicable Subpart Ec requirements.
A. Yes. The ACHD has submitted a plan that conforms to all EPA Subpart B and Ce requirements. Each of the above listed plan elements is approvable. Details regarding the approvability of the plan elements are included in the technical support document (TSD) associated with this action. A copy of the TSD is available, upon request, from the EPA Regional Office listed in the
A. If construction commenced on your HMIWI on or before June 20, 1996, your HMIWI is classified as an existing or designated facility that may be subject the plan. The plan contains no lower applicability threshold based on incinerator capacity. However, there are designated facility exemptions. Those exemptions include incinerators that burn only pathological, low level radioactive, and/or chemotherapeutic waste; co-fired combustors; incinerators permitted under Section 3005 of the Solid Waste Disposal Act; municipal waste combustors (MWC) subject to EPA's municipal waste combustor rule; pyrolysis units; and cement kilns.
Details regarding applicability and exemptions provisions are stipulated in Article XXI, Section 2105.32.e.
A. In general, the Allegheny County HMIWI regulation establishes the following requirements:
• Emission limitations for particulate matter (PM), opacity, carbon monoxide (CO), dioxins/furans (CDD/CDF), hydrogen chloride (HCl), sulfur dioxide (SO
• Compliance and performance testing.
• Operating parameter monitoring.
• Operator training and qualification.
• Development of a waste management plan.
• Source testing, recordkeeping and reporting.
• A Title V permit.
A full and comprehensive statement of the above requirements is incorporated in the ACHD Rules and Regulations, Article XXI, Sections 2101.20 and 2105.32.
A. You must install an emissions controls system capable of meeting the maximum available control technology (MACT) emission limitations for the pollutants identified above. The pollutant emission limitations are stipulated in Article XXI, Sections 2105.32.f.1, Table 1, and f.2. Compliance is required on or before September 1, 2000 for all designated facilities. With adequate justification, you may petition the ACHD for a compliance schedule extension that does not extend beyond September 15, 2002. Petitions must be submitted no later than September 1, 2000, and must include documentation of your analysis undertaken to support the need for an extension, and your evaluation of the option to transport the waste offsite to a commercial medical waste treatment and disposal facility on a temporary or permanent basis. Also, your extension request must include increments of progress that are no less stringent than those specified in the plan and regulation, Section 2105.32.g.2.
A. Yes, there are operational requirements. In summary, the operational requirements relate to: (1) The HMIWI and air pollution control devices (APCD) operating within certain established parameter limits, determined during the initial performance test; (2) the use of a trained and qualified HMIWI operator; and (3) the completion of an annual update of operation and maintenance information, and its review by the HMIWI operators.
Failure to operate the HMIWI or APCD within the established operating parameter limits constitutes an emissions violation for the controlled air pollutants. However, as a HMIWI owner/operator, you are provided an opportunity to establish revised operating limits, and demonstrate that your facility is meeting the required emission limitations, providing a repeat performance test is conducted in a timely manner.
A fully trained and qualified operator must be available at your facility during the operation of the HMIWI, or the operator must be readily available to the facility within one hour. In order to be classified as a qualified operator, you must complete an appropriate HMIWI operator training course that meets the Subpart Ec criteria referenced in the regulation at Section 2105.32g.5. Compliance with this training requirement must be achieved within one year of the effective date of the County regulation (
Also, as a HMIWI owner/operator, you are required to develop and update annually site-specific information regarding your facilities' operations. Each of your HMIWI operators is required on an annual basis to review the updated operational information.
The ACHD regulation IBR the applicable operational requirements of the EG and the related NSPS. See Subpart Ec, §§ 60.56c, 60.53c, and 60.58c, respectively for details regarding these operational requirements.
A. Testing, monitoring, recordkeeping, and reporting requirements are summarized below: You are required to conduct an initial stack test to determine compliance with the emission limitations for PM, opacity, CO, CDD/CDF, HCl, Pb, Cd, and Hg. As noted above, operating parameter limits are monitored and established during the initial performance test. Monitored HMIWI operating parameters include, for example, waste charge rate, secondary chamber and bypass stack temperatures. APCD operating parameters include, for example, CDD/CDF and Hg sorbent (
Recordkeeping and reporting are required in order to document (1) The results of the initial and annual performance tests, (2) monitoring of site-specific operating parameters, (3) compliance with the operator training and qualification requirements, and (4) development of the waste management plan. Records must be maintained for at least five years.
The ACHD regulation IBR the applicable testing, monitoring, recordkeeping, and reporting requirements of the EG and related NSPS. See Subpart Ec, §§ 60.56c, 60.57c, and 60.58c, respectively for details regarding these requirements.
A. Yes, affected facilities are required to operate under a Title V permit no later than September 15, 2000. This is required under Article XXI, section 2105.32d.
The Allegheny County 111(d)/129 plan for controlling HMIWI emissions is approvable. This approval does not include provisions, such as siting and fugitive emission requirements, that relate solely to facilities subject to the NSPS, and are not referenced in the EG.
Based upon the rationale discussed above and in further detail in the TSD associated with this action, EPA is approving the Allegheny County 111(d)/129 plan for the control of HMIWI emissions from designated facilities. As provided by 40 CFR 60.28(c), any revisions to the Allegheny County plan or associated regulations will not be considered part of the applicable plan until submitted by the PADEP on behalf of ACHD in accordance with 40 CFR 60.28(a) or (b), as applicable, and until approved by EPA in accordance with 40 CFR Part 60, Subpart B.
As requested, no EPA action is taken on the State Implementation Plan (SIP) revision relating to Article XXI. EPA action on the SIP revision request will be taken under a separate action from this 111(d)/129 plan approval.
EPA is publishing this action without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comments. However, in the proposed rules section of this
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing 111(d)/129 plan submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a 111(d)/129 plan submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a 111(d)/129 plan submission, to use VCS in place of a 111(d)/129 plan submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Hospital/medical/infectious waste incinerators, Reporting and recordkeeping requirements.
42 U.S.C. 7401-7671q
Section 111(d)/129 plan for HMIWIs and the associated Allegheny County Health Department (ACHD) regulations, as submitted on June 24, 1999.
The plan applies to all Allegheny County, Pennsylvania existing HMIWI for which construction was commenced on or before June 20, 1996.
The effective date of the plan for municipal solid waste landfills is June 6, 2000.
Environmental Protection Agency.
Direct final rule.
The United States Environmental Protection Agency (EPA)
This direct final rule is effective on June 6, 2000, without further notice, unless EPA receives adverse comment by May 8, 2000. If EPA receives adverse comment, we will publish a timely withdrawal of the direct final rule in the
You should address comments on this action to Michele Notarianni, EPA Region 4, Air Planning Branch, 61 Forsyth Street, SW, Atlanta, Georgia 30303-3104. [E-mail address: notarianni.michele@epa.gov.]
Copies of all materials considered in this rulemaking may be examined during normal business hours at the following locations: EPA Region 4, Sam Nunn Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, Georgia 30303-3104; and at the Mississippi Department of Environmental Quality, Air Division, P.O. Box 10385, Jackson, Mississippi 39289-0385.
Michele Notarianni at 404/562-9031 or Scott Davis at 404/562-9127. [E-mail addresses:
We are approving the Mississippi State Plan, as submitted on May 5, 1999, for the control of air emissions from HMIWIs, except for those HMIWIs located in Indian Country. When EPA developed our New Source Performance Standard (NSPS) for HMIWIs, we also developed EG to control air emissions from older HMIWIs. (See 62 FR 48348-48391, September 15, 1997, 40 CFR part 60, subpart Ce [Emission Guidelines and Compliance Times for HMIWIs] and subpart Ec [Standards of Performance for HMIWIs for Which Construction is Commenced After June 20, 1996]). The Mississippi DEQ developed a State Plan, as required by sections 111(d) and 129 of the Clean Air Act (the Act), to adopt the EG into their body of regulations, and we are acting today to approve it.
We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in a separate document in this
A HMIWI State Plan is a plan to control air pollutant emissions from existing incinerators which burn hospital waste or medical/infectious waste. The plan also includes source and emission inventories of these incinerators in the State.
States are required under sections 111(d) and 129 of the Act to submit State Plans to control emissions from existing HMIWIs in the State. The State Plan requirement was triggered when EPA published the EG for HMIWIs under 40 CFR part 60, subpart Ce (see 62 FR 48348, September 15, 1997).
Under section 129, EPA is required to promulgate EG for several types of existing solid waste incinerators. These EG establish the Maximum Achievable Control Technology (MACT) standards that States must adopt to comply with the Act. The HMIWI EG also establishes requirements for monitoring, operator training, permits, and a waste management plan that must be included in State Plans.
The intent of the State Plan requirement is to reduce several types of air pollutants associated with waste incineration.
The State Plan establishes control requirements which reduce the following emissions from HMIWIs: particulate matter; sulfur dioxide; hydrogen chloride; nitrogen oxides; carbon monoxide; lead; cadmium; mercury; and dioxin/furans. These pollutants can cause adverse effects to the public health and the environment. Dioxin, lead, and mercury bioaccumulate through the food web. Serious developmental and adult effects in humans, primarily damage to the nervous system, have been associated with exposures to mercury. Exposure to dioxin and furans can cause skin disorders, cancer, and reproductive effects such as endometriosis. Dioxin and furans can also affect the immune system. Acid gases affect the respiratory tract, as well as contribute to the acid rain that damages lakes and harms forests and buildings. Exposure to particulate matter has been linked with adverse health effects, including aggravation of existing respiratory and cardiovascular disease and increased risk of premature death. Nitrogen oxide emissions contribute to the formation of ground level ozone, which is associated with a number of adverse health and environmental effects.
The criteria for approving a HMIWI State Plan include requirements from sections 111(d) and 129 of the Act and 40 CFR part 60, subpart B. Under the requirements of sections 111(d) and 129 of the Act, a State Plan must be at least as protective as the EG regarding applicability, emission limits, compliance schedules, performance testing, monitoring and inspections, operator training and certification, waste management plans, and recordkeeping and reporting. Under section 129(e), State Plans must ensure that affected HMIWI facilities submit Title V permit applications to the State by September 15, 2000. Under the requirements of 40 CFR part 60, subpart B, the criteria for an approvable section 111(d) plan include demonstration of legal authority, enforceable mechanisms, public participation documentation, source and emission
The Mississippi DEQ adopted the Federal EG into the Mississippi Code Annotated, “Air Emissions Regulations for the Prevention, Abatement, and Control of Air Contaminants,” APC-S-1, Section 12, and the Federal NSPS into APC-S-1, Section 6. The State rules were effective on April 22, 1999. The Mississippi State Plan contains:
1. A demonstration of the State's legal authority to implement the section 111(d) State Plan;
2. State rule, APC-S-1, Section 12, as the enforceable mechanism;
3. An inventory of approximately 30 known designated facilities, along with estimates of their potential air emissions;
4. Emission limits that are as protective as the EG;
5. A compliance date of September 15, 2000;
6. Testing, monitoring, reporting and recordkeeping requirements for the designated facilities;
7. Records from the public hearing on the State Plan; and,
8. Provisions for progress reports to EPA.
The EG for existing HMIWIs affect any HMIWI built on or before June 20, 1996. If your facility meets this criterion, you are subject to these regulations.
You must meet the requirements listed in the Mississippi Code Annotated, APC-S-1, Section 12, summarized as follows:
1. Determine the size of your incinerator by establishing its maximum design capacity.
2. Each size category of HMIWI has certain emission limits established which your incinerator must meet. See Table 1 of APC-S-1, Section 12, to determine the specific emission limits which apply to you. The emission limits apply at all times, except during startup, shutdown, or malfunctions, provided that no waste has been charged during these events.
3. There are provisions to address small rural incinerators (if your unit is applicable).
4. You must meet a 10% opacity limit on your discharge, averaged over a six-minute block.
5. You must have a qualified HMIWI operator available to supervise the operation of your incinerator. This operator must be trained and qualified through a State-approved program, or a training program that meets the requirements listed under 40 CFR part 60.53c(c).
6. Your operator must be certified, as discussed in 5 above, no later than September 15, 2000.
7. You must develop and submit to Mississippi DEQ a waste management plan. This plan must be developed under guidance provided by the American Hospital Association publication, An Ounce of Prevention: Waste Reduction Strategies for Health Care Facilities, 1993, and must be submitted to Mississippi DEQ no later than 60 days following the initial performance test for the affected unit.
8. You must conduct an initial performance test to determine your incinerator's compliance with these emission limits. This performance test must be completed as required under 40 CFR 60.8.
9. You must install and maintain devices to monitor the parameters listed under Table 4 of APC-S-1, Section 12.
10. You must document and maintain information concerning pollutant concentrations, opacity measurements, charge rates, and other operational data. This information must be maintained for a period of five years.
11. You must submit an annual report to Mississippi DEQ containing records of annual equipment inspections, any required maintenance, and unscheduled repairs. This annual report must be signed by the facilities manager.
EPA compared the Mississippi rules (Mississippi Code Annotated, APC-S-1, Section 12) against our HMIWI EG. EPA finds the Mississippi rules to be at least as protective as the EG. The Mississippi State Plan was reviewed for approval against the following criteria: 40 CFR 60.23 through 60.26,
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in
The Congressional Review Act, 5 U.S.C. section 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Administrative practice and procedure, Air pollution control, Hospital/medical/infectious waste incineration, Intergovernmental relations, Reporting and recordkeeping requirements.
42 U.S.C. 7401-7642.
(b) * * *
(3) Adopted State Plan for Control of Air Emissions from Existing Hospital/Medical/Infectious Waste Incinerators, submitted on May 5, 1999, by the Mississippi Department of Environmental Quality.
(c) * * *
(4) Existing hospital/medical/infectious waste incinerators.
The plan applies to existing hospital/medical/infectious waste incinerators for which construction, reconstruction, or modification was commenced before June 20, 1996, as described in 40 CFR part 60, subpart Ce.
Federal Communications Commission.
Correcting amendments.
On August 31, 1999, the Commission released a Third Report and Order in the matter of Communications Assistance for Law Enforcement Act. This document contains corrections to the final regulations that appeared in the
Effective April 7, 2000.
Rodney Small, Office of Engineering and Technology, (202) 418-2452 .
The final regulations that are the subject of this correction relate to Communications Assistance for Law Enforcement Act under Sections 24.903(a), 24.903(b), 64.2203(a) and 64.2203(b) of the rules.
As published, the final regulations contain errors, which require correction.
Communications common carriers.
47 U.S.C. 154, 301, 302, 303, 309 and 332.
(a) Except as provided under paragraph (b) of this section, as of June 30, 2000, a broadband PCS telecommunications carrier shall provide to a LEA the assistance capability requirements of CALEA, see 47 U.S.C. 1002. A carrier may satisfy these requirements by complying with publicly available technical requirements or standards adopted by an industry association or standard-setting organization, such as J-STD-025.
(b) As of September 30, 2001, a broadband PCS telecommunications carrier shall provide to a LEA communications and call-identifying information transported by packet-mode communications and the following capabilities:
3. The authority citation for part 64 continues to read as follows:
47 U.S.C. 151, 154, 201, 202, 205, 218-220, and 332 unless otherwise noted. Interpret or apply sections 201, 218, 225, 226, 227, 229, 332, 48 Stat. 1070, as amended, 47 U.S.C. 201-204, 208-, 225, 226, 227, 229, 332, 501 and 503 unless otherwise noted.
(a) Except as provided under paragraph (b) of this section, as of June 30, 2000, a wireline telecommunications carrier shall provide to a LEA the assistance capability requirements of CALEA, see 47 U.S.C. 1002. A carrier may satisfy these requirements by complying with publicly available technical requirements or standards
(b) As of September 30, 2001, a wireline telecommunications carrier shall provide to a LEA communications and call-identifying information transported by packet-mode communications and the following capabilities:
Federal Communications Commission.
Final rule: Petition for Reconsideration.
In this document, the Federal Communications Commission (Commission) denies four petitions for reconsideration or clarification of the Commission's Order forbearing from imposing service provider local number portability (LNP) requirements on commercial mobile radio service providers (CMRS providers) until November 24, 2002. The Commission finds that, in its forbearance decision, it adequately considered issues related to number conservation, competition in the wireless industry, and the Telecommunications Resellers Association's alternate LNP proposal. The Commission also finds that its forbearance analysis was consistent with the statutory standard. By this document, the Commission declines to extend or shorten the November 24, 2002 deadline for CMRS providers to support service provider LNP in the top 100 Metropolitan Statistical Areas (MSAs).
Effective April 7, 2000.
Joel Taubenblatt, Wireless Telecommunications Bureau, at (202) 418-1513.
This is a summary of the Commission's Order on Reconsideration in WT Docket No. 98-229 and CT Docket No. 95-116, adopted February 9, 2000, and released February 23, 2000. The complete text of this Order on Reconsideration is available for inspection and copying during normal business hours in the Commission's Reference Center, room CY-A257, 445 12th Street SW, Washington, DC. The complete text is also available through the Internet at
1. On May 27, 1999, four parties filed petitions for reconsideration or clarification of the Commission's Order forbearing from imposing service provider LNP requirements on CMRS providers until November 24, 2002.
2. Under the Commission's prior LNP decisions, CMRS providers were required to implement LNP in the top 100 MSAs and to support nationwide roaming by March 31, 2000. Implementation of LNP by CMRS providers would enable wireless customers to “port” their telephone numbers in the event that they switch from one wireless carrier to another, or from a wireless to a wireline carrier.
3. In the
4. In their petitions for reconsideration of the
5. This Order on Reconsideration finds that none of the petitions raises arguments that warrant reconsideration of the Commission's decision in the
6. With respect to number conservation issues, the Order rejects assertions that: (1) the Commission's decision to extend the CMRS LNP deadline until November 24, 2002 will hamper the implementation of number optimization solutions that require LNP technology, such as thousands-block number pooling; and (2) the Commission's consideration of number conservation issues as a basis for limiting forbearance was impermissible and inaccurate speculation. In addition, in response to a request for clarification,
7. With respect to competition issues, the Order states that the Commission carefully considered the effect of forbearance from the CMRS LNP requirements on wireless-to-wireless and wireless-to-wireline competition and found that extending the wireless LNP deadline until November 24, 2002, but not beyond that date, would promote competition in the short term and in the long term. Regarding TRA's proposed alternative approach for implementing LNP, the Commission finds that the Commission adequately considered TRA's proposal in the
8. Finally, with respect to section 10 issues, the Order affirms the Commission's findings that the forbearance granted in the
9. Accordingly, pursuant to § 1.106 of the Commission's rules, 47 CFR 1.106, the petitions for reconsideration of the
Telecommunications.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Modification of a closure.
NMFS is opening directed fishing for Atka mackerel in the Central Aleutian District of the Bering Sea and Aleutian Islands management area (BSAI) and is prohibiting trawling within Steller sea lion critical habitat in the Central Aleutian District of the BSAI. These actions are necessary to fully utilize the 2000 A season harvest specification of Atka mackerel total allowable catch (TAC) in the Central Aleutian District, and because the 2000 A season critical habitat percentage of Atka mackerel allocated to the Central Aleutian District has been reached.
Effective 1200 hrs, Alaska local time (A.l.t.), April 3, 2000, until 1200 hrs, A.l.t., April 15, 2000.
Andrew Smoker, 907-586-7228.
NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for the Groundfish Fishery of the Bering Sea and Aleutian Islands Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The A season apportionment of the 2000 TAC for Atka mackerel in the Central Aleutian District is 11,424, metric tons (mt), of which no more than 7,654 mt may be harvested from critical habitat (65 FR 8282, February 18, 2000). See § 679.20(c)(3)(iii) and 679.22(a)(8)(iii)(B).
The directed fishery for Atka mackerel in the Central Aleutian District was closed to reserve amounts anticipated to be needed for incidental catch in other fisheries (65 FR 11249, March 2, 2000). NMFS has determined that as of March 18, 2000, approximately 2,000 mt remains in the A season Central Aleutian District directed fishing allowance.
The Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the 2000 A season directed fishing allowance for Atka mackerel in the Central Aleutian District has not been reached. Therefore, NMFS is terminating the previous closure and is opening directed fishing for Atka mackerel in the Central Aleutian District of the BSAI.
In accordance with § 679.22(a)(8)(iii)(A), the Regional Administrator, has determined that the A season allowable harvest of Atka mackerel in Steller Sea lion critical habitat within the Central Aleutian District as specified under the 2000 harvest specifications has been reached. Consequently, NMFS is prohibiting trawling in critical habitat, as defined at 50 CFR part 226, Table 1 and Table 2 in the Central Aleutian District of the BSAI.
This action responds to the best available information recently obtained from the fishery. It must be implemented immediately to fully utilize the 2000 harvest specification of Atka mackerel TAC in the Central Aleutian District and to avoid jeopardy to the continued existence of Steller sea lions. Providing prior notice and opportunity for public comment for this action is impracticable and contrary to the public interest. NMFS finds for good cause that the implementation of this action cannot be delayed for 30 days. Accordingly, under 5 U.S.C. 553(d), a delay in the effective date is hereby waived.
This action is required by § 679.20 and § 679.22 and is exempt from review under E.O. 12866.
16 U.S.C. 1801
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
This document proposes the adoption of a new airworthiness directive (AD) that is applicable to all Airbus Model A330 and A340 series airplanes. This proposal would require repetitive ultrasonic inspections to detect corrosion of the retraction links of the main landing gear (MLG), and replacement of the retraction link with a new retraction link, if necessary. This proposal is prompted by issuance of mandatory continuing airworthiness information by a foreign civil airworthiness authority. The actions specified by the proposed AD are intended to detect and correct corrosion of the retraction link of the MLG, which could result in reduced structural integrity and possible collapse of the MLG.
Comments must be received by May 8, 2000.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2000-NM-53-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9 a.m. and 3 p.m., Monday through Friday, except Federal holidays.
The service information referenced in the proposed rule may be obtained from Airbus Industrie, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France. This information may be examined at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington.
Norman B. Martenson, Manager, International Branch, ANM-116, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (425) 227-2110; fax (425) 227-1149.
Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light of the comments received.
Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-53-AD.” The postcard will be date stamped and returned to the commenter.
Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2000-NM-53-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.
The Direction Ge
The manufacturer has issued Airbus Service Bulletins A330-32-3105, Revision 01, dated December 14, 1999 (for Model A330 series airplanes), and A340-32-4148, Revision 01, dated December 14, 1999 (for Model A340 series airplanes). These service bulletins describe procedures for repetitive ultrasonic inspections to detect corrosion of the left- and right-hand retraction links of the MLG, and replacement of the retraction link with a new retraction link, if necessary. The DGAC classified the Airbus service bulletins as mandatory and issued French airworthiness directives 2000-013-107(B) R1, dated February 9, 2000 (for Model A330 series airplanes), and 2000-015-132(B), dated January 12, 2000 (for Model A340 series airplanes), in order to assure the continued airworthiness of these airplanes in France.
The Airbus service bulletins reference Messier-Dowty Service Bulletins A33/34-32-151, Revision 3, including Appendix A, and A33/34-32-152, Revision 3, including Appendix A, each dated January 11, 2000, as additional sources of service information for accomplishing the repetitive ultrasonic inspections.
These airplane models are manufactured in France and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation
Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require repetitive ultrasonic inspections to detect corrosion of the retraction links of the MLG, and replacement of the retraction link with a new retraction link, if necessary. The actions would be required to be accomplished in accordance with the Airbus service bulletins described previously.
None of the airplanes affected by this action are on the U.S. Register. All airplanes included in the applicablity of this rule currently are operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action. However, the FAA considers that this rule is necessary to ensure that the unsafe condition is addressed in the event that any of these subject airplanes are imported and placed on the U.S. Register in the future.
Should an affected airplane be imported and placed on the U.S. Register in the future, it would require approximately 1 work hour to accomplish the required inspection, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of this AD would be $60 per airplane, per inspection cycle.
The regulations proposed herein would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.
For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption
Air transportation, Aircraft, Aviation safety, Safety.
Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive:
This AD applies to each airplane identified in the preceding applicability provision, regardless of whether it has been modified, altered, or repaired in the area subject to the requirements of this AD. For airplanes that have been modified, altered, or repaired so that the performance of the requirements of this AD is affected, the owner/operator must request approval for an alternative method of compliance in accordance with paragraph (b) of this AD. The request should include an assessment of the effect of the modification, alteration, or repair on the unsafe condition addressed by this AD; and, if the unsafe condition has not been eliminated, the request should include specific proposed actions to address it.
To detect and correct corrosion of the retraction links of the main landing gear (MLG), which could result in reduced structural integrity and possible collapse of the MLG, accomplish the following:
(a) Within 36 months time-in-service on any new retraction link, or within 2 months after the effective date of this AD, whichever occurs later, perform an ultrasonic inspection to detect corrosion of the retraction links left- and right-hand of the MLG, in accordance with Airbus Service Bulletin A330-32-3105, Revision 01, dated December 14, 1999 (for Model A330 series airplanes), or Airbus Service Bulletin A340-32-4148, Revision 01, dated December 14, 1999 (for Model A340 series airplanes), as applicable.
(1) If no corrosion is detected, or if corrosion is detected that is within the limits specified in the applicable service bulletin, repeat the inspection thereafter at intervals not to exceed 6 months.
(2) If any corrosion is detected that is outside the limits specified in the applicable service bulletin, replace the affected retraction link with a new retraction link at the time specified and in accordance with the procedures specified in the applicable service bulletin. Thereafter, repeat the inspection specified in paragraph (a) on any new retraction links, at the time specified in paragraph (a) of this AD.
The Airbus service bulletins reference Messier-Dowty Service Bulletins A33/34-32-151, Revision 3, including Appendix A, and A33/34-32-152, Revision 3, including Appendix A, each dated January 11, 2000, as additional sources of service information for accomplishing the repetitive inspections.
Although the inspection schedule of this AD applies to both left- and right-hand retraction links of the MLG, replacement of a retraction link, prior to scheduled replacement, would result in subsequent staggered inspections for the remainder of the retraction links.
(b) An alternative method of compliance or adjustment of the compliance time that provides an acceptable level of safety may be used if approved by the Manager, International Branch, ANM-116, FAA, Transport Airplane Directorate. Operators shall submit their requests through an appropriate FAA Principal Maintenance Inspector, who may add comments and then send it to the Manager, International Branch, ANM-116.
Information concerning the existence of approved alternative methods of compliance with this AD, if any, may be obtained from the International Branch, ANM-116.
(c) Special flight permits may be issued in accordance with sections 21.197 and 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199) to operate the airplane to a location where the requirements of this AD can be accomplished.
The subject of this AD is addressed in French airworthiness directives 2000-013-107(B) R1, dated February 9, 2000, and 2000-015-132(B), dated January 12, 2000.
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
This document proposes the adoption of a new airworthiness directive (AD) that is applicable to certain British Aerospace BAe Model ATP airplanes. This proposal would require repetitive inspections to detect discrepancies of the downlock support assembly and attachment of the nose landing gear (NLG), and of the bulkhead and adjacent structure in the NLG bay; and corrective action, if necessary. This proposal is prompted by issuance of mandatory continuing airworthiness information by a foreign civil airworthiness authority. The actions specified by the proposed AD are intended to detect and correct damage of the NLG downlock support, which could result in collapse of the NLG and consequent injury to passengers or flightcrew.
Comments must be received by May 8, 2000.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 99-NM-230-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9 a.m. and 3 p.m., Monday through Friday, except Federal holidays.
The service information referenced in the proposed rule may be obtained from British Aerospace Regional Aircraft, 13850 Mclearen Road, Herndon, Virginia 20171. This information may be examined at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington.
Norman B. Martenson, Manager, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (425) 227-2110; fax (425) 227-1149.
Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light of the comments received.
Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 99-NM-230-AD.” The postcard will be date stamped and returned to the commenter.
Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 99-NM-230-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.
The Civil Aviation Authority, which is the airworthiness authority for the United Kingdom, notified the FAA that an unsafe condition may exist on certain British Aerospace BAe Model ATP airplanes. The CAA advises that the downlock structure of the nose landing gear (NLG) has been found damaged. The exact cause of the damage has not yet been determined. This condition, if not corrected, could result in collapse of the NLG and consequent injury to passengers or flightcrew.
British Aerospace has issued Service Bulletin ATP-53-36, Revision 1, dated February 21, 2000, which describes procedures for repetitive general visual inspections to detect discrepancies of the downlock support assembly and attachment of the NLG, and of the bulkhead and adjacent structure in the NLG bay; and corrective action, if necessary. Discrepancies for which to inspect include damage of the NLG downlock support, downlock backup structure, and attachment locations; damage or loose nuts and bolts of the NLG downlock attachment; and damage of the bulkhead 378FS web, boundary angles, and attachment locations, and the airplane skin attached to bulkhead 378FS. Corrective actions include repair of any damage and torquing of any loose nut or bolt to the limits specified in the service bulletin. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. The CAA classified this service bulletin as mandatory, and issued British airworthiness directive 006-06-99, in order to ensure the continued airworthiness of these airplanes in the United Kingdom.
This airplane model is manufactured in the United Kingdom and is type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the CAA has kept the FAA informed of the situation described above. The FAA has examined the findings of the CAA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.
Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously.
The FAA estimates that 10 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 4 work hours per airplane to accomplish the proposed inspection, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $2,400, or $240 per airplane, per inspection cycle.
The cost impact figure discussed above is based on assumptions that no
The regulations proposed herein would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.
For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption
Air transportation, Aircraft, Aviation safety, Safety.
Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive:
This AD applies to each airplane identified in the preceding applicability provision, regardless of whether it has been modified, altered, or repaired in the area subject to the requirements of this AD. For airplanes that have been modified, altered, or repaired so that the performance of the requirements of this AD is affected, the owner/operator must request approval for an alternative method of compliance in accordance with paragraph (b) of this AD. The request should include an assessment of the effect of the modification, alteration, or repair on the unsafe condition addressed by this AD; and, if the unsafe condition has not been eliminated, the request should include specific proposed actions to address it.
To detect and correct damage of the nose landing gear (NLG) downlock support, which could result in collapse of the NLG, and consequent injury to passengers or flightcrew, accomplish the following:
(a) Within 6 months or 750 flight cycles after the effective date of this AD, whichever occurs first, perform a general visual inspection to detect discrepancies (e.g., damage, or loose nuts or bolts) of the NLG downlock support assembly, bulkhead, attachment locations, and adjacent structure in the NLG bay; in accordance with British Aerospace Service Bulletin ATP-53-36, Revision 1, dated February 21, 2000. Thereafter, repeat the inspection at intervals not to exceed 2 years or 3,000 flight cycles, whichever occurs first.
(1) If any damage is found during any inspection in accordance with paragraph (a) of this AD, prior to further flight, repair in accordance with the service bulletin.
(2) If any loose nut or bolt is found during any inspection in accordance with paragraph (a) of this AD, prior to further flight, torque the affected nut or bolt to the limits specified in the service bulletin, in accordance with the service bulletin.
For the purposes of this AD, a general visual inspection is defined as: “A visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or drop-light, and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.”
Inspections and corrective actions accomplished prior to the effective date of this AD in accordance with British Aerospace Service Bulletin ATP-53-36, dated June 9, 1999, are considered acceptable for compliance with the applicable actions specified in this amendment.
(b) An alternative method of compliance or adjustment of the compliance time that provides an acceptable level of safety may be used if approved by the Manager, International Branch, ANM-116, FAA, Transport Airplane Directorate. Operators shall submit their requests through an appropriate FAA Principal Maintenance Inspector, who may add comments and then send it to the Manager, International Branch, ANM-116.
Information concerning the existence of approved alternative methods of compliance with this AD, if any, may be obtained from the International Branch, ANM-116.
(c) Special flight permits may be issued in accordance with sections 21.197 and 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199) to operate the airplane to a location where the requirements of this AD can be accomplished.
The subject of this AD is addressed in British airworthiness directive 006-06-99.
Coast Guard, DOT.
Notice of proposed rulemaking.
The Coast Guard proposes to establish temporary regulations in the Delaware River, Wilmington, Delaware, for Tall Ships Delaware activities. This action is necessary to provide for the safety of life on navigable waters before, during, and after Tall Ships Delaware events. This action will restrict vessel traffic in the Delaware River between the mouth of the Christina River and New Castle, Delaware.
Comments and related material must reach the Coast Guard on or before May 8, 2000.
You may mail comments and related material to the Waterways and Waterfront Facilities Branch, Coast Guard Marine Safety Office/Group Philadelphia, One Washington Ave., Philadelphia, Pennsylvania 19147 or deliver them to the same address between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The Waterways and Waterfront Facilities Branch, Coast Guard Marine Safety Office/Group Philadelphia maintains the public docket for this
Lieutenant (junior grade) Kirsten Codel, Waterways and Waterfront Facilities Branch, Coast Guard Marine Safety Office/Group Philadelphia, at (215) 271-4991.
We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking (CGD05-00-008), indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8
We do not plan to hold a public meeting. But you may submit a request for a meeting by writing to Commanding Officer, Coast Guard Marine Safety Office/Group Philadelphia, One Washington Ave., Philadelphia, Pennsylvania 19147, explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the
The Diamond State Port Corporation (Port of Wilmington) is sponsoring Tall Ships Delaware activities in the Delaware River, Wilmington, Delaware. The planned event includes a Parade of Sail from the confluence of the Christina River and the Delaware River, down river to New Castle, Delaware, and back to the mouth of the Christina River on June 23, 2000.
The Coast Guard anticipates a large spectator fleet for this event. Operators should expect significant vessel congestion along the parade route.
The purpose of these regulations is to promote maritime safety and protect participants and the boating public immediately prior to, during, and after the scheduled event. The regulations provide a safety buffer around the participating vessels during the parade of sail and modify existing anchorage regulations for the benefit of participants and spectators. The regulations will affect the movement of all vessels operating in the specified areas of the Delaware River.
It may be necessary for the Coast Guard to establish safety or security zones in addition to these regulations to safeguard dignitaries and certain vessels participating in the event. If the Coast Guard deems it necessary to establish such zones at a later date, the details of those zones will be announced separately via the
All vessel operators and passengers are reminded that vessels carrying passengers for hire or that have been chartered and are carrying passengers may have to comply with certain additional rules and regulations beyond the safety equipment requirements for all pleasure craft. When a vessel is not being used exclusively for pleasure, but rather is engaged in carrying passengers for hire or has been chartered and is carrying the requisite number of passengers, the vessel operator must possess an appropriate license and the vessel may be subject to inspection. The definition of the term “passenger for hire” is found in 46 U.S.C. 2101(21a). In general, it means any passenger who has contributed any consideration (monetary or otherwise) either directly or indirectly for carriage onboard the vessel. The definition of the term “passenger” is found in 46 U.S.C. 2101(21). It varies depending on the type of vessel, but generally means individuals carried aboard vessels except for certain specified individuals engaged in the operation of the vessel or the business of the owner/charterer. The law provides for substantial penalties for any violation of applicable license and inspection requirements. If you have any questions concerning the application of the above law to your particular case, you should contact the Coast Guard at the address listed in
Vessel operators are reminded they must have sufficient facilities on board their vessels to retain all garbage and untreated sewage. Discharge of either into any waters of the United States is strictly forbidden. Violators may be assessed civil penalties up to $25,000 or face criminal prosecution.
We recommend that vessel operators visiting the Wilmington area for this event obtain an up to date edition of National Ocean Service Chart 12311 to avoid anchoring within a charted cable or pipeline area.
With the arrival of Tall Ships Delaware and spectator vessels in the Wilmington area for this event, it will be necessary to curtail normal port operations to some extent. Interference will be kept to the minimum considered necessary to ensure the safety of life on the navigable waters immediately before, during, and after the scheduled events.
The Tall Ships Delaware vessels are scheduled to arrive and moor at various locations along the Christina River by June 23, 2000. The lead vessel is scheduled to begin the Parade of Sail at 12:00 p.m. on June 23, 2000, and will follow a parade route of approximately 4 nautical miles on the Delaware River from the mouth of the Christina River, outbound to New Castle, Delaware, sailing outside the western side of the channel. The parade vessels will then cross the federal navigation channel of the Delaware River and return to the eastern side of the channel adjacent to the mouth of the Christina River sailing outside the eastern side of the channel. The parade vessels will then cross the navigable channel and enter the Christina River. After the parade, the larger Tall Ships Delaware vessels will moor at the Port of Wilmington on the Christina River. The remainder of the vessels will proceed up the Christina River to various mooring locations.
The safety of parade participants and spectators will require that spectator craft be kept at a safe distance from the parade route during these vessel movements. The Coast Guard proposes using a moving safety zone around the Parade of Sail to keep all vessels not involved in the Parade of Sail a safe distance from the Tall Ships Delaware vessels. The Parade of Sail route is outside the federal navigation channel of the Delaware River, allowing the channel to remain open, except when the Parade of Sail is crossing the navigable channel. However, the Coast Guard expects that there will be increased vessel congestion in the
The Coast Guard also proposes to temporarily modify the existing anchorage regulations found in 33 CFR 110.157 to accommodate Tall Ships Delaware vessels. A leg of the parade route runs through General Anchorage 6 (Deepwater Point Anchorage). Therefore, General Anchorage 6 will be closed to all vessels except Tall Ships Delaware vessels from 12 p.m. to 4 p.m. on June 23, 2000. (A notice of proposed rulemaking affecting 33 CFR 110.157 has been published in the
This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979).
We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.
The primary impact of these regulations will be on vessels wishing to transit the affected waterways during the Parade of Sail on June 23, 2000. Although these regulations prevent traffic from transiting portions of the Delaware River during the event, that restriction is limited in duration, affects only a limited area, and will be well publicized to allow mariners to make alternative plans for transiting the affected area. Moreover, the parade route will be outside the federal navigational channel allowing the channel to remain open with the exception of when the Parade of Sail actually crosses the channel. This should minimize the effect on non-participant and spectator vessels intending to transit the federal navigation channel.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
This proposed rule would affect the following entities, some of which may be small entities: the owners or operators of vessels intending to operate or anchor in portions of the Delaware River in the vicinity of Wilmington, Delaware. The regulations will not have a significant impact on a substantial number of small entities for the following reasons: the restrictions are limited in duration, affect only limited areas, and will be well publicized to allow mariners to make alternative plans for transiting the affected areas. Moreover, the parade route will be outside the federal navigational channel allowing the channel to remain open with the exception of when the Parade of Sail actually crosses the channel.
If you think that your business, organization or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact Lieutenant (junior grade) Kirsten Codel, Waterways and Waterfront Facilities Branch, Coast Guard Marine Safety Office/Group Philadelphia, at (215) 271-4991.
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this proposed rule under E.O. 13132 and have determined that this rule does not have implications for federalism under that Order.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This proposed rule would not impose an unfunded mandate.
This proposed rule would not effect a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.
We considered the environmental impact of this proposed rule and concluded that, under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.1C; this proposed rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” will be available in the docket where indicated under
Anchorage Grounds.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR Parts 110 and 165 as follows:
1. The authority citation for Part 110 continues to read as follows:
33 U.S.C. 471, 1221 through 1236, 2030, 2035, 2071; 49 CFR 1.46 and 33 CFR 1.05-1(g).
2. From 12:00 p.m. until 4:00 p.m. on June 23, 2000 temporarily add § 110.157(e) to read as follows:
(e) Not withstanding the above, the following temporary regulations will be in effect from 12 p.m. through 4 p.m. on June 23, 2000 for Tall Ships Delaware: Anchorage 6 will be closed to all vessels except Tall Ships Delaware vessels. “Tall Ships Delaware vessels” includes all vessels participating in Tall Ships Delaware under the auspices of the Marine Event Permit submitted for the Port of Wilmington, Delaware, and approved by the Commander, Fifth Coast Guard District.
3. The authority citation for Part 165 continues to read as follows:
33 U.S.C. 1225 and 1231; 50 U.S.C. 191; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; 49 CFR 1.46. Section 165.100 is also issued under authority of Sec. 311, Pub. L. 105-383.
4. Add temporary § 165.T05-008 to read as follows:
(a)
(2)
(3)
(b)
(c)
(2) No person or vessel may enter or navigate within this safety zone unless authorized to do so by the Coast Guard Patrol Commander. Any person or vessel authorized to enter the safety zone must operate in strict conformance with any directions given by the Coast Guard Patrol Commander and leave the safety zone immediately if the Coast Guard Patrol Commander so orders.
(3) The Coast Guard vessels enforcing this section can be contacted on VHF Marine Band Radio, channels 13 and 16. The Captain of the Port can be contacted at telephone number (215) 271-4940.
(4) The Coast Guard Patrol Commander will notify the public of changes in the status of this safety zone by Marine Safety Radio Broadcast on VHF-FM marine band radio, channel 22 (157.1 MHZ).
(d)
Coast Guard, DOT.
Notice of proposed rulemaking.
The Coast Guard proposes to revise the regulation governing the operation of the Cotton Belt Railroad (Rob Roy) Bridge across the Arkansas River at mile 67.4, in the State of Arkansas. For more than 20 years the Rob Roy Bridge has been operated using radiotelephones as the primary communications device between mariners and the bridge operator even though current regulations require horns and flashing lights. The change in this rule will merely make the regulation require the use of radiotelephone for primary communications in the operation of the bridge.
Comments must be received on or before June 6, 2000.
Comments may be mailed to Commander (obr), Eighth Coast Guard District, 1222 Spruce Street, St. Louis, MO 63103, or may be delivered to room 2.107F at the same address between 8:00 a.m. and 4:00 p.m. Monday through Friday, except on Federal Holidays.
Roger K. Wiebusch, Bridge Administrator, Commander (obr), Eighth Coast Guard District, 314-539-3900, Ext. 378.
The Coast Guard encourages interested persons to participate in this rulemaking by submitting written data, views, or arguments. Persons submitting comments should include their names and addresses, identify this rulemaking (CGD08-00-004) and the specific section of this proposal to which the comment applies, and give the reason for each comment. Please submit all comments and attachments in an unbound format, no larger than 8
The Coast Guard plans no public hearing. Individuals may request a public hearing by writing to the Commander (obr), at the address under
The Arkansas River is a part of the McClellan-Kerr Arkansas River Navigation System. The System rises in the vicinity of Catoosa, Oklahoma, and embraces improved natural waterways and a canal to empty into the Mississippi River in southeast Arkansas. The Arkansas River drawbridge operation regulations contained in 33
Drawbridge operation regulations should be realistic in meeting the needs of both navigation and land traffic, and be tempered with common sense and good judgment. The current regulations do not reflect the actual method of operation for the Rob Roy Bridge. A survey of towboat pilots and railroad personnel revealed that the use of radiotelephones as the primary means of communications is preferred. The people involved never favored the use of ship's horns and flashing bridge lights. This proposal will provide regulations for operation of the Rob Roy Bridge that are consistent with the way the bridge is actually operated.
This proposal is not a significant regulatory action under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. It has not been reviewed by the Office of Management and Budget under that order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979). The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. For more than 20 years the Rob Roy Bridge has been operated using radiotelephones as the primary communications device between mariners and the bridge operator even though current regulations require horns and flashing lights. The change in this rule will merely make the published operation regulation conform to the actual method of operation.
Under the Regulatory Flexibility Act (5 U.S.C. 601
This proposal contains no collection-of-information requirements under the Paperwork Reduction Act (44 U.S.C. 3501
The Coast Guard has analyzed this proposal under the principles and criteria contained in Executive Order 12612 and has determined that this proposal does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This rule would not impose an unfunded mandate.
This rule would not effect a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.
The Coast Guard considered the environmental impact of this proposal and concluded that under paragraph 2.B.2.a. of Commandant Instructions M16475.1C, this proposal is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under
Bridges.
For the reasons set out in the preamble, the Coast Guard proposes to amend Part 117 of Title 33, Code of Federal Regulations, as follows:
1. The authority citation for part 117 continues to read as follows:
33 U.S.C. 499; 49 CFR 1.46; 33 CFR 1.05-1(g); section 117.255 also issued under the authority of Pub. L. 102-587, 106 Stat. 5039.
2. Section 117.123(a) is revised to read as follows:
(a) Across the Arkansas River, the draw of the Cotton Belt Railroad (Rob Roy) Bridge, Mile 67.4, is maintained in the closed position and is remotely operated. Any vessel requiring an opening of the draw shall establish contact by radiotelephone with the remote drawbridge operator on VHF-FM Channel 16 in Pine Bluff, Arkansas. The remote drawbridge operator will advise the vessel whether the bridge can be immediately opened and maintain constant contact with the vessel until the span has opened and the vessel passage has been completed. If the drawbridge cannot be opened
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve a revision to the Georgia State Implementation Plan (SIP) that contains transportation conformity rules. If EPA approves this transportation conformity SIP revision, the State will be able to implement and enforce the Federal transportation conformity requirements at the State level per EPA regulations—Conformity to State or Federal Implementation Plans of Transportation Plans, Programs, and Projects Developed, Funded or Approved Under Title 23 U.S.C. of the Federal Transit Laws. EPA's proposed action would streamline the conformity process and allow direct consultation among agencies at the local levels. EPA's proposed approval is limited to Transportation Conformity.
In the Final Rules section of this
Written comments must be received on or before May 8, 2000.
All comments should be addressed to Kelly Sheckler at the EPA, Region 4 Air Planning Branch, 61 Forsyth Street, SW, Atlanta, Georgia 30303.
Copies of the state submittal are available at the following addresses for inspection during normal business hours:
Kelly Sheckler at 404/562-9042, E-mail: Sheckler.Kelly@epa.gov.
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve the Allegheny County, Pennsylvania hospital/medical/ infectious waste incinerator (HMIWI) 111(d)/129 plan submitted on June 24, 1999 by the Pennsylvania Department of Environmental Protection (PADEP) on behalf of the Allegheny County Health Department (ACHD). The plan establishes emission limitations for existing HMIWIs, and provides for the implementation and enforcement of those limitations. In the final rules section of the
Comments must be received in writing by May 8, 2000.
Comments may be mailed to Makeba A. Morris, Chief, Technical Assessment Branch, Mailcode 3AP22, Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103-2029.
James B. Topsale at (215) 814-2190, or by e-mail at topsale.jim@epamail.gov.
See the information provided in the direct final rule, of the same title, which is located in the rules section of the
42 U.S.C. 7401-7671q.
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to apporve the Section 111(d) Plan for the State of Mississippi submitted by the Mississippi Department of Environmental Quality (DEQ) on May 5, 1999, for implementing and enforcing the Emissions Guidelines applicable to existing Hospital/Medical/Infectious Waste Incinerators. The Plan was submitted by the Mississippi DEQ to satisfy certain Federal Clean Air Act requirements. In the Final Rules Section of this
Comments must be received in writing by May 8, 2000.
Written comments should be addressed to Michele Notarianni at the EPA Regional Office listed below. Copies of the documents relevant to this rule are available for public inspection during normal business hours at the following locations. The interested persons wanting to examine these documents should make an appointment with the appropriate office at least 24 hours before the day of the visit.
Michele Notarianni at 404/562-9031 or Scott Davis at 404/562-9127.
See the information provided in the Direct Final action which is located in the Rules Section of this
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice of proposed rulemaking.
This document proposes to republish, without change, 2 lists of those passenger motor vehicle insurers that are required to file reports on their motor vehicle theft loss experiences and to amend a third list. An insurer included in any of these lists would be required to file a report for the 1997 calendar year before October 25, 2000. If the passenger motor vehicle insurers remain listed, they must submit reports by each subsequent October 25.
Comments must be submitted not later than June 6, 2000.
Comments on this proposed rule must refer to the docket number referenced in the heading of this notice and submit them to: Docket Section, NHTSA, Room 5109, 400 Seventh Street, SW, Washington, DC 20590. Docket hours are 9:30 a.m. to 4:00 p.m., Monday through Friday.
Dr. Henrietta L. Spinner, Office of Planning and Consumer Programs, NHTSA, 400 Seventh Street, SW, Washington, DC 20590. Dr. Spinner's telephone number is (202) 366-4802. Her fax number is (202) 493-2290.
Pursuant to 49 U.S.C. 33112, Insurer reports and information, NHTSA requires certain passenger motor vehicle insurers to file an annual report with the agency. Each insurer's report includes information about thefts and recoveries of motor vehicles, the rating rules used by the insurer to establish premiums for comprehensive coverage, the actions taken by the insurer to reduce such premiums, and the actions taken by the insurer to reduce or deter theft. Under the agency's regulation, 49 CFR Part 544, the following insurers are subject to the reporting requirements:
(1) Those issuers of motor vehicle insurance policies whose total premiums account for 1 percent or more of the total premiums of motor vehicle insurance issued within the United States;
(2) Those issuers of motor vehicle insurance policies whose premiums account for 10 percent or more of total premiums written within any one state; and (3) rental and leasing companies with a fleet of 20 or more vehicles not covered by theft insurance policies issued by insurers of motor vehicles, other than any governmental entity.
Pursuant to its statutory exemption authority, the agency exempted certain passenger motor vehicle insurers from the reporting requirements.
Section 33112(f)(2) provides that the agency shall exempt small insurers of passenger motor vehicles if NHTSA finds that such exemptions will not significantly affect the validity or usefulness of the information in the reports, either nationally or on a state-by-state basis. The term “small insurer” is defined, in Section 33112(f)(1)(A) and (B), as an insurer whose premiums for motor vehicle insurance issued directly or through an affiliate, including pooling arrangements established under state law or regulation for the issuance of motor vehicle insurance, account for less than 1 percent of the total premiums for all forms of motor vehicle insurance issued by insurers within the United States. However, that section also stipulates that if an insurance company satisfies this definition of a “small insurer,” but accounts for 10 percent or more of the total premiums for all motor vehicle insurance issued in a particular state, the insurer must report about its operations in that state.
In the final rule establishing the insurer reports requirement (52 FR 59; January 2, 1987), 49 CFR part 544, NHTSA exercised its exemption authority by listing in Appendix A each insurer that must report because it had at least 1 percent of the motor vehicle insurance premiums nationally. Listing the insurers subject to reporting, instead of each insurer exempted from reporting because it had less than 1 percent of the premiums nationally, is administratively simpler since the former group is much smaller than the latter. In Appendix B, NHTSA lists those insurers required to report for particular states because each insurer had a 10 percent or a greater market share of motor vehicle premiums in those states. In the January 1987 final rule, the agency stated that it would update Appendices A and B annually. NHTSA updates the appendices based on data voluntarily provided by insurance companies to A.M. Best,
In addition, upon making certain determinations, NHTSA grants exemptions to self-insurers, i.e., any person who has a fleet of 20 or more motor vehicles (other than any governmental entity) used for rental or lease whose vehicles are not covered by theft insurance policies issued by insurers of passenger motor vehicles, 49 U.S.C. 33112(b)(1) and (f). NHTSA may exempt a self-insurer from reporting, if the agency determines:
(1) The cost of preparing and furnishing such reports is excessive in relation to the size of the business of the insurer; and
(2) The insurer's report will not significantly contribute to carrying out the purposes of Chapter 331.
In a final rule published June 22, 1990 (55 FR 25606), the agency granted a class exemption to all companies that rent or lease fewer than 50,000 vehicles, because it believed that the largest companies' reports sufficiently represent the theft experience of rental and leasing companies. NHTSA concluded that smaller rental and leasing companies' reports do not significantly contribute to carrying out NHTSA's statutory obligations and that exempting such companies will relieve an unnecessary burden on them. As a result of the June 1990 final rule, the agency added Appendix C, consisting of an annually updated list of the self-insurers subject to Part 544. Following the same approach as in Appendix A, NHTSA included, in Appendix C, each of the self-insurers subject to reporting instead of the self-insurers which are exempted. NHTSA updates Appendix C based primarily on information from Automotive Fleet Magazine and Business Travel News.
Under Part 544, as long as an insurer is listed, it must file reports on or before October 25 of each year. Thus, any insurer listed in the appendices must file a report by October 25, and by each succeeding October 25, absent an amendment removing the insurer's name from the appendices.
Appendix A lists insurers that must report because each had 1 percent of the motor vehicle insurance premiums on a national basis. The list was last amended in a final rule published on October 25, 1999 (See 64 FR 57393). Based on the 1997 calendar year data from A.M. Best, we are proposing to reissue appendix A without change.
Each of the 18 insurers listed in Appendix A is required to file a report before October 25, 2000, setting forth the information required by part 544 for each State in which it did business in the 1997 calendar year. As long as these 18 insurers remain listed, they will be required to submit reports by each subsequent October 25 for the calendar year ending slightly less than 3 years before.
Appendix B lists insurers required to report for particular States for calendar year 1997, because each insurer had a 10 percent or a greater market share of motor vehicle premiums in those States. Based on the 1997 calendar year data for market shares from A.M. Best, we are proposing to reissue Appendix B without change.
The 11 insurers listed in appendix B are required to report on their calendar year 1997 activities in every State where they had a 10 percent or a greater market share. These reports must be filed by October 25, 2000, and set forth the information required by Part 544. As long as these 11 insurers remain listed, they would be required to submit reports on or before each subsequent October 25 for the calendar year ending slightly less than 3 years before.
Appendix C lists rental and leasing companies required to file reports. Based on information in Automotive Fleet Magazine and Business Travel News for 1997, NHTSA proposes to remove Penske Truck Leasing Company from Appendix C and to add Ford-Rent-A-Car System to Appendix C. Each of the 19 companies (including franchisees and licensees) listed in Appendix C would be required to file reports for calendar year 1997 no later than October 25, 2000, and set forth the information required by Part 544. As long as those 19 companies remain listed, they would be required to submit reports before each subsequent October 25 for the calendar year ending slightly less than 3 years before.
This notice has not been reviewed under Executive Order 12866. NHTSA has considered the impact of this proposed rule and determined that the action is not “significant” within the meaning of the Department of Transportation's regulatory policies and procedures. This proposed rule implements the agency's policy of ensuring that all insurance companies that are statutorily eligible for exemption from the insurer reporting requirements are in fact exempted from those requirements. Only those companies that are not statutorily eligible for an exemption are required to file reports.
NHTSA does not believe that this proposed rule, reflecting current data, affects the impacts described in the final regulatory evaluation prepared for the final rule establishing part 544 (52 FR 59; January 2, 1987). Accordingly, a separate regulatory evaluation has not been prepared for this rulemaking action. Using the Bureau of Labor Statistics Consumer Price Index for 1999, the cost estimates in the 1987 final regulatory evaluation were adjusted for inflation. The agency estimates that the cost of compliance is $83,300 for any insurer added to Appendix A, $33,320 for any insurer added to Appendix B, and $9,613 for any insurer added to Appendix C. If this proposed rule is made final, for Appendices A and B, the agency would make no changes; for Appendix C, the agency would remove one company and add one company. The agency therefore estimates that the net effect of this proposal, if made final, would be no cost to insurers as a group.
Interested persons may wish to examine the 1987 final regulatory evaluation. Copies of that evaluation were placed in Docket No. T86-01; Notice 2. Any interested person may obtain a copy of this evaluation by writing to NHTSA, Docket Section, Room 5109, 400 Seventh Street, SW, Washington, DC 20590, or by calling (202) 366-4949.
The information collection requirements in this proposed rule were submitted and approved by the Office of Management and Budget (OMB) pursuant to the requirements of the Paperwork Reduction Act (44 U.S.C. 3501
The agency also considered the effects of this rulemaking under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action has been analyzed according to the principles and criteria contained in Executive Order 12612, and it has been determined that the proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
In accordance with the National Environmental Policy Act, NHTSA has considered the environmental impacts of this proposed rule and determined that it would not have a significant impact on the quality of the human environment.
Interested persons are invited to submit comments on the proposal. It is requested but not required that two copies of the comments be submitted. All comments must not exceed 15 pages in length. (49 CFR 553.21). Necessary attachments may be appended to these submissions without regard to the 15-page limit. This limitation is intended to encourage commenters to detail their primary arguments in a concise fashion.
If a commenter wishes to submit certain information under a claim of confidentiality, two copies of the complete submission, including purportedly confidential business information, should be submitted to the Chief Counsel, NHTSA, at the street address given above, and one copy from which the purportedly confidential information has been deleted should be accompanied by cover letter setting forth the information specified in the agency's confidential business information regulation. (49 CFR part 512).
All comments received before the close of business on the comment closing date indicated will be considered, and will be available for examination in the docket at the above address both before and after the date. To the extent possible, comments filed after the closing date will also be considered. Comments received too late for consideration regarding the final rule will be considered as suggestions for further rulemaking action. Comments on the proposal are available for inspection in the docket. NHTSA will continue to file relevant information, as it becomes available in the docket after the closing date. It is recommended that interested persons continue to examine the docket for new material.
Those persons wanting receipt of their comments in the rule docket should enclose a self-addressed, stamped postcard in the envelope with their comments. Upon receiving the comments, the docket supervisor will return the postcard by mail.
Crime insurance, insurance, insurance companies, motor vehicles, reporting and recordkeeping requirements.
In consideration of the foregoing, 49 CFR Part 544 is proposed to be amended as follows:
1. The authority citation for part 544 is proposed to be revised to read as follows:
49 U.S.C. 33112; delegation of authority at 49 CFR 1.50.
2. Paragraph (a) of § 544.5 is proposed to be revised to read as follows:
(a) Each insurer to which this part applies shall submit a report annually before October 25, beginning on October 25, 1986. This report shall contain the information required by § 544.6 of this part for the calendar year three years previous to the year in which the report is filed (e.g., the report due by October 25, 2000 will contain the required information for the 1997 calendar year).
3. Appendix A to Part 544 is proposed to be republished to read as follows:
4. Appendix B to Part 544 is proposed to be revised to read as follows:
5. Appendix C to Part 544 is proposed to be revised to read as follows:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notification of EFP proposals to conduct experimental fishing; request for comments.
NMFS announces that the Administrator, Northeast Region, NMFS (Regional Administrator), has made a preliminary determination to issue EFPs to conduct experimental fishing to two vessels participating in separate fisheries that would permit these vessels to conduct operations otherwise restricted by regulations governing the fisheries of the Northeastern United States. The EFPs would exempt vessels from regulations regarding: Days-at-sea (DAS) while fishing for, retaining, and landing Atlantic sea scallops; fishing in the scallop closed areas; and limiting the vessel's scallop and bycatch harvest. Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on the proposed EFP to conduct experimental fishing. A decision to approve or disapprove the EFPs will be made following the comment period.
Comments on this notification must be received on or before 5:00 p.m., local time, on April 24, 2000.
Comments should be sent to Patricia A. Kurkul, Regional Administrator, NMFS, Northeast Regional Office, 1 Blackburn Drive, Gloucester, MA 01930. Mark on the outside of the envelope “Comments on Proposed Scallop EFP Proposals.”
Comments also may be sent via facsimile (fax) to (978) 281-9135. Comments will not be accepted if submitted via e-mail or Internet.
David Gouveia, Fishery Policy Analyst, 978-281-9280.
The Virginia Institute of Marine Science (VIMS) proposes a scallop resource depletion study in selected locations within the Hudson Canyon and Virginia Beach Closure Areas chosen in consultation with the Northeast Fisheries Science Center's scallop survey stations. In addition, this study proposes to collect information on bycatch, habitat effects, and bio-fouling of sea scallops. Depending on the funding available, this study may also attempt to use an autonomous underwater vehicle to verify tow tracks and habitat modifications.
On a tow-by-tow basis, scientific staff and designated crew members will enumerate bycatch and estimate quantities of non-bycatch debris (mollusk shells) and will report on their general physical condition. The overall objective of the study is to assess the increased availability of commercial sea scallop biomass resulting from the area closures that commenced 2 years ago. A similar study in Georges Bank Closed Area II was not performed until 4 years after the closure. It is thought that more knowledge could be gained from a post-dredge survey conducted closer to the cessation of mobile gear activity.
The survey would be conducted during the period June through July 2000 and would employ the use of two 15-ft (4.57-m) commercial sea scallop dredges at 400 pre-designated stations. Sampling densities of approximately one station per 7.5 nm
No other species besides Atlantic sea scallops will be retained or landed, except for unusual specimens of interest to scientists and only at the discretion of the chief scientist in charge of at-sea cruise operations. All fishing activities conducted by the participating vessel must only be research activities. All commercial operations would be prohibited. The participating vessel would be exempt from regulations on scallop harvest and bycatch (50 CFR 648.52 and 648.53) but would be allowed to retain and land no more than 9,100 lb (4,127.76 kg) (650 lb/day (294.84 kg/day)) of Atlantic sea scallops. It would also be exempt from the Atlantic Sea Scallop DAS program when fishing under the EFP (50 CFR 648.10). Based on this landing limit, participants would be required to commit a maximum of 14 days to the study.
The vessel's crew will be instructed that low value sea scallops may not be discarded in favor of retaining high value sea scallops (high grading). VIMS' chief scientist is charged with monitoring all stages of the proposed cruise operations in support of the study objectives, and will ensure maximum integrity of data collection and organization of deck operations. The second proposal, submitted by Coonamessett Farm, proposes to test new gear designs to reduce yellowtail flounder and skate bycatch rates. The experimental dredge will have two modifications. The first modification adds a 10-inch (25.40-cm) mesh panel between the depressor plate and the dredge bale that will follow the angle of the depressor plate. The second modification adds the equivalent of an old-style locomotive cow catcher under the bale frame that would direct skates and flatfish above the bale, along the mesh panel, and over the dredge frame. The applicant requests one 7-day trip to the Georges Bank and South Channel sea scallop stock areas. The participating vessel would be allowed to retain up to 850 lb (385.56 kg) of scallop meats per day, not to exceed 5,950 lb (2,698.9 kg) of scallop meats for the entire trip. An EFP issued to the vessel participating in the Coonamessett Farm proposal would exempt the vessel from the DAS restrictions (50 CFR 648.53) and limit the vessel's scallop and bycatch harvest (50 CFR 648.52 and 648.53). Although the dredge gear used by Coonamessett Farm is modified, the changes to the dredge are within the current dredge specifications found in the Atlantic Sea Scallop FMP. Therefore, no exemption of the dredge gear is necessary.
Coonamessett Farm and VIMS would each conduct experimental fishing
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notification of EFP proposal to conduct experimental fishing; request for comments.
NMFS announces that the Administrator, Northeast Region, NMFS (Regional Administrator), has made a preliminary determination to issue an EFP to that would allow a single vessel to conduct operations otherwise restricted by regulations governing the fisheries of the Northeastern United States. Mount Desert Oceanarium of Southwest Harbor, Maine, submitted a complete application for an EFP, which warrants further consideration. The experimental fishery would involve fishing for, retention of, and landing of small numbers of regulated multispecies and various unmanaged species for the purpose of public education. Regulations issued under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on the proposed EFP to conduct experimental fishing.
Comments on this notification must be received at the appropriate address or fax number (See
Written comments should be sent to Patricia Kurkul, Regional Administrator, NMFS, Northeast Regional Office, 1 Blackburn Drive, Gloucester, MA 01930. Mark on the outside of the envelope “Comments on Proposed EFP Proposal.” Comments also may be sent via facsimile (fax) to (978) 281-9135. Comments will not be accepted if submitted via e-mail or Internet.
Tom Warren, Fishery Management Specialist, 978-281-9347.
The Mount Desert Oceanarium, of Southwest Harbor, Maine, submitted an application for an EFP on February 15, 2000, to collect various species of animals for public education. A single chartered vessel will use a modified 50-ft (15.2-m) shrimp trawl to collect marine animals on 3 days during the time period from May 1, 2000, to May 20, 2000. The animals will be brought to shore, maintained in tanks for public display, and most will be returned to the sea in October 2000. Collection will be from the Small Mesh Northern Shrimp Fishery Exemption Area, off Maine. If the target species cannot be located in this area, collection will be farther east or southeast from the Gulf of Maine/Georges Bank Regulated Mesh Area. The target species will include dabs, blackback and yellowtail flounder, plaice, halibut, monkfish, eel pouts, sculpins, sea ravens, cod, wolfish, spiny dogfish, little skate, barndoor skate, and unidentified species of the Phyla Arthropoda and Echinodermata. The vessel will collect a maximum of six individuals per species, juvenile and adult, with the exception of halibut, which will be limited to a total of one individual, with a minimum total length of 36 inches (91.4 cm).
EFPs are required to exempt the vessel from the possession prohibition, mesh size, minimum fish size, and days-at-sea restrictions of the Northeast Multispecies Fishery Management Plan.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Washington, DC 20503
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.
Agency has requested emergency approval by April 3, 2000.
Animal and Plant Health Inspection Service, USDA.
Extension of approval of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request an extension of approval of an information collection in support of the regulations requiring permits for movement of restricted animals.
We invite you to comment on this docket. We will consider all comments that we receive by June 6, 2000.
Please send your comment and three copies to: Docket No. 00-020-1, Regulatory Analysis and Development, PPD, APHIS, Suite 3C03, 4700 River Road, Unit 118, Riverdale, MD 20737-1238.
Please state that your comment refers to Docket No. 00-020-1.
You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 690-2817 before coming.
APHIS documents published in the
For information regarding the regulations requiring permits for movement of restricted animals, contact Dr. Diane Sutton, Senior Staff Veterinarian, National Animal Health Programs Staff, VS, APHIS, 4700 River Road Unit 43, Riverdale, MD 20737; (301) 734-7709. For copies of more detailed information on the information collection, contact Ms. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.
When farm animals (such as cattle, swine, sheep, or horses) become sick or have been exposed to a disease of quarantine significance, it is important that they be removed promptly from the farm to prevent exposing and infecting other animals. In such situations, the owner of sick or exposed animals may have the animals transported from the farm to a slaughtering establishment. When this movement requires animals to be transported across State lines, the owner is required to complete a “Permit for Movement of Restricted Animals,” also known as VS Form 1-27.
It is imperative that these animals not be removed from the vehicle during transport or be otherwise diverted from their destination, since such an event could result in the spread of a disease of quarantine significance among healthy animals. VS Form 1-27, which is completed by specified personnel at the farm of origin and again at the point of destination, is our primary means of ensuring that these animals move directly from the farm to the slaughtering establishment.
We are asking the Office of Management and Budget (OMB) to approve our use of this information collection activity for an additional 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning this information collection. We need this outside input to help us:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the information collection, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the information collection on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies, e.g., permitting electronic submission of responses.
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Farm Service Agency, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Farm Service Agency's (FSA) intention to request an extension for a currently approved information collection in support of the program for Guaranteed Farm Loans.
Comments on this notice must be received by June 6, 2000 to be assured of consideration.
Phillip Elder, Senior Loan Officer, USDA, FSA, Farm Loan Programs, Loan Servicing Division, STOP 0523, 1400 Independence Ave. SW, Washington, D.C. 20250-0523, telephone (202) 690-4012 or Electronic mail: phillip_elder@wdc.usda.gov.
Comments should be sent to the Desk Office for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, D.C. 20503 and to Phillip Elder, Senior Loan Officer, USDA, FSA, Farm Loan Programs, Loan Servicing Division, 1400 Independence Avenue, SW, STOP 0523, Washington, D.C. 20250-0523.
Comments regarding paperwork burden will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Office of the Secretary, USDA.
Notice, renewal of charter, and request for nominations.
The Secretary of Agriculture intends to renew the charter of the Lake Tahoe Federal Advisory Committee, chartered under the Federal Advisory Committee Act, to provide advice to the Secretary of Agriculture on implementing the terms of the Federal Interagency Partnership on the Lake Tahoe Region. Nominations of persons to serve on the Committee are invited.
Nominations for membership on the Committee must be received in writing by May 1, 2000.
Send nominations and applications with telephone numbers for membership on the Committee to: FACA Nomination, Lake Tahoe Basin Management Unit, 870 Emerald Bay Road, South Lake Tahoe, California 96150.
Maribeth Gustafson, Forest Supervisor, Lake Tahoe Basin Management Unit, telephone (530) 573-2773.
Pursuant to the Federal Advisory Committee Act (5 U.S.C. App.), notice is hereby given that the Secretary of Agriculture intends to renew the charter of the Lake Tahoe Basin Federal Advisory Committee. The purpose of the Committee is to provide advice to the Secretary of Agriculture on implementing the terms of the Federal Interagency Partnership on the Lake Tahoe Basin and other matters raised by the Secretary.
The Secretary has determined that the work of the Committee is in the public interest and relevant to the duties of the Department of Agriculture.
The Committee will meet on a quarterly basis, conducting public meetings to discuss management strategies, gather information and review federal agency accomplishments, and prepare a progress report every six months for submission to regional federal executives. Representatives will be selected from the following sectors: (1) Gaming, (2) Environmental, (3) National environmental, (4) Ski resorts, (5) North Shore economic/recreation, (6) South Shore economic/recreation, (7) Resort associations, (8) Education, (9) Property rights advocates, (10) Member-at-large, (11) Member-at-large, (12) Science and Research, (13) Local Government, (14) Washoe Tribe, (15) State of California, (16) State of Nevada, (17) Tahoe Regional Planning Agency, (18) Labor, (19) Transportation and (20) Member-at-large. Nominations to the Committee should describe and document the proposed member's qualifications for membership on the Lake Tahoe Basin Advisory Committee. The Committee Chair will be recommended by the Committee and approved by the Secretary. Vacancies on the Committee will be filled in the manner in which the original appointment was made.
Appointments to the Committee will be made by the Secretary of Agriculture. Equal opportunity practices, in line with USDA policies, will be followed in all appointments to the Committee. To ensure that the recommendations of the Committee have taken into account the needs of the diverse groups served by the Department, membership should include to the extent practicable individuals with demonstrated ability to represent minorities, women, persons with disabilities, and senior citizens.
Forest Service, USDA.
Notice of intent to prepare an Environmental Impact Statement.
The USDA, Forest Service will prepare an environmental impact statement (EIS). The purpose of the EIS is to analyze and disclose the environmental impacts of a site specific proposal to commercially harvest and regenerate trees, construct, reconstruct, and decommission roads, implement vegetation density management activities, implement wildlife projects, and conduct prescribed burns. The activities are proposed in the Big Butte Springs watershed located on lands administered by the Rogue River National Forest, Butte Falls Ranger District, Jackson County, Oregon. The Proposed Action will tier to and be designed under the Rogue River National Forest Land and Resource Management Plan (1990), as amended by the Record of Decision for the Northwest Forest Plan (1994), which provides guidance for land management activities. This proposal is scheduled for implementation during fiscal years 2000-2003. The Cascade Zone invites written comments concerning the scope of the analysis in addition to those comments that will be solicited as a result of local public participation activities. The Forest Service will also give notice of the full environmental analysis and decision making process so that interested and affected people are made aware as to how they may participate and contribute to the final decision.
Issues and comments concerning the scope, implementation, and analysis of the Proposed Action must be received by May 15, 2000.
Submit written comments regarding the Proposed Action to Joel King, District Ranger, Prospect Ranger District, 47201 Highway 62, Prospect, Oregon, 97536.
Direct questions about the Proposed Action and EIS to Don Boucher, Interdisciplinary Team Leader, Prospect Ranger District, 47201 Highway 62, Prospect, Oregon, 97536, phone: 541-560-3400, FAX: 541-560-3444, e-mail: dboucher@fs.fed.us.
The Big Butte Timber Sales and Related Activities Project will take place within the upper portion of the Big Butte Springs Watershed. This sub-watershed is also referred to as the Medford Watershed because it supplies domestic water to the city of Medford, Oregon and surrounding communities. The Big Butte Springs watershed is located approximately 18 miles east of Medford, Oregon, and is just north of State Highway 140. Only Forest Service managed lands would be treated. The legal description of the area being considered is: T 35 S, R 3 E, sections 13, 22-36; T 35 S, R 4 E, sections 7-34; T 36 S, R 3 E, sections 1-17, 21-28, 35, & 36; T 36 S, R 4 E, sections 3-8, 16-21, & 27-33; Willamette Meridian.
The Forest Service Proposed Action implement activities which include, in part, one or more timber sales involving approximately 6,200 acres of harvest units. Silvicultural prescriptions include: density management of overstocked stands of trees (approximately 1,700 acres); treating mature stands with small group selections or even-aged management (approximately 2,000 acres); and, density management of small, younger stands for forest health and stand development (approximately 2,500 acres). Other projects include road decommissioning (approximately 13 miles), prescribed fire for wildlife habitat improvement and fuels reduction (approximately 500 acres), density management of stands of young trees less than six inches in diameter (approximately 1,500 acres), and other wildlife improvement projects. Minor amounts of new road construction or reconstruction may be necessary to access harvest units. These activities are proposed on Matrix lands in the
The Purpose and Need for the Proposed Action is to implement management direction from the Rogue River National Forest Land and Resource Management Plan as amended by the Northwest Forest Plan and to manage for ecosystem needs. Specifically for the Big Butte area, needs include; improvement of overall forest health by stimulating natural processes that encourage more stable and resilient forest vegetation conditions; management and improvement of stand densities and species composition in overstocked natural and created sapling and pole stands; management, maintenance or improvement of current soil and water quality conditions; management, maintenance or improvement of current big game winter range conditions and Forest Service road systems; and providing a sustainable yield of commercial timber and other commodities, in concert with land management allocation and direction.
The following preliminary issues are identified: direct, indirect, and cumulative impacts to soils; water quality, including domestic watershed values; vegetation condition (diversity of seral stages and control insects and disease); wildlife big game winter range and travel and migration corridors; and human and social values such as economic feasibility and preservation of currently unroaded areas. The Forest Service will consider these and other issues with the Proposed Action, and develop additional alternatives to the Proposed Action that respond to the significant issues. The no-action alternative will also be considered.
Public participation will be important during the analysis. Reviewers may refer to the Council on Environmental Quality Regulations for Implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1501.7. The Agency will be seeking written issues with the Proposed Action from Federal, State, and local agencies, any affected Indiana tribes, and other individuals who may be interested in or affected by the Proposed Action. This input will be used to develop additional alternatives.
The Draft EIS is expected to be filed with the Environmental Protection Agency (EPA) and be available for review for June 2000. The comment period for the Draft EIS will be 45 days from the date that the EPA publishes the Notice of Availability in the
Comments received in response to this notice, including names and addresses of those who comment, will be considered part of the public record on this Proposed Action and will be available for public inspection. Comments submitted anonymously will be accepted and considered, however, those who submit anonymous comments will not have standing to appeal the subsequent decision under 36 CFR Part 215. Additionally, pursuant to 7 CFR 1.27(d), any person may request the agency to withhold a submission from the public record by showing how the Freedom of Information Act (FOIA) permits such confidentiality. Person requesting such confidentiality should be aware that, under the FOIA, confidentially may be granted in only very limited circumstances, such as to protect trade secrets. The Forest Service will inform the requester of the agency's decision regarding the request for confidentiality, and where the request is denied, the agency will return the submission and notify the requester that the comments may be resubmitted with or without name and address within a specified number of days.
The Forest Service believes it is important to give reviewers notice at this early stage of several court rulings related to public participation in the environmental review process. First, a reviewer of a Draft EIS must structure their participation in the environmental review process of the proposal so that it is specific, meaningful, and alerts an agency to the review's position and contentions.
To assist the Forest Service in identifying and considering issues and concerns on the Proposed Action, comments on the Draft EIS should be as specific as possible. It is also helpful if comments refer to specific pages or chapters of the Draft EIS. Comments may also address the inadequacy of the Draft EIS or the merits of the alternatives formulated and discussed in the EIS. Reviewers may wish to refer to the Council on Environmental Quality Regulations for implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1503.3 in addressing these points.
After the 45 day comment period ends on the Draft EIS, comment will be considered and analyzed by the Agency in preparing the Final EIS. The Final EIS is scheduled for completion by September 2000. In the Final EIS, the Forest Service is required to respond to the comments and responses received during the comment period that pertain to the environmental consequences discussed in the Draft EIS and applicable laws, regulations, and policies considered in making the decision regarding the proposal.
The Forest Service is the Lead Agency. The Forest Service Responsible Official is Joel King, Prospect District Ranger. The Responsible Official will consider the Final EIS, applicable laws, regulations, policies, and analysis files in making a decision. The Responsible Official will document the Big Butte Timber Sales and Related Activities decision and rationale in a Record of Decision. The decision will be subject to under Forest Service appeal regulation (36 CFR Part 215).
Forest Service, USDA.
Notice of intent to prepare an environmental impact statement.
The USDA, Forest Service, will prepare an environmental impact statement (EIS) to update range management planning on seventeen (17) livestock (cattle and horse) grazing allotments and one administrative use pasture, which will result in the development of new Allotment Management Plans (AMPs). The allotments are Blackmore, Chalk, College Creek, Dunlap-Thorn, Dunn Creek, Grouseline, Himmelwright, Keeler, Middle Point, Saddle Creek,
Comments concerning the scope of the analysis should be received in writing by May 31, 2000.
Send written comments and suggestions concerning this proposal to Kendall Clark, District Ranger, Hells Canyon National Recreation Area, Wallowa-Whitman National Forest, 88401 Highway 82, Enterprise, Oregon 97828.
Direct questions about the proposed action and EIS to Howard Lyman, Project Co-Leader, Hells Canyon National Recreation Area, 88401 Highway 82, Enterprise, Oregon 97828, 541-426-5573 or to Lynne Smith, Project Co-Leader, Pine Ranger District, 38470 Pine Town Lane, Halfway, Oregon 97834, 541-742-6715.
The proposed action is to continue to permit livestock grazing on NFS lands. The proposed action will also incorporate pertinent management guidelines and direction found in the Wallowa-Whitman National Forest Land and Resource Management Plan, as amended, the Hells Canyon National Recreation Area Comprehensive Land Management Plan (CMP), Wild and Scenic River Plans for the Imnaha and Snake Rivers, and biological assessments and biological opinions for threatened Snake River Chinook salmon and steelhead. The proposed action is designed to continue the improving trends in vegetation and watershed conditions relative to livestock grazing within the planning area. The action is needed to develop new AMPs which incorporate results of recent scientific research, analysis and documentation at the sub-basin level. Components of the proposed action include: (1) Protection of Endangered Species Act listed spawning and rearing habitat; (2) provide for sustained forage production through deferment and rest; (3) review utilization standards in riparian areas and analyze potential changes is required stubble heights; and (4) adjust allotment boundaries where the allotment has previously extended into the Wild and Scenic Snake River to outside the Wild and Scenic corridor.
The Wallowa-Whitman Forest Plan, as amended, recognized the continuing need for forage production for the Forest and recognized the seventeen allotments and the administrative pasture of the Middle Imnaha River Range Planning Area as containing lands which are capable and suitable for grazing by domestic livestock. The action is needed to continue this historic use.
The allotments are located within twenty-seven subwatersheds: Freezeout Creek; Imnaha River/mile 24; Squaw Creek; Big Sheep Creek/mile 4; Imnaha River/mile 37; Pumpkin Creek; Summit Creek; Rich Creek; Lower Grouse Creek; Imnaha River/mile 43; Crazyman Creek; Snake River/Rocky Bar; Snake River/Hells Canyon; Lower Little Sheep Creek; Big Sheep Creek/mile 0; Marr Creek; Big Sheep Creek/mile 17; Snake River/Two Bars; Saddle Creek; Lower North Pine Creek; Upper North Pine Creek; Elk Creek; Lake Fork Creek; Imnaha River/mile 55; Imnaha River/mile 58; Snake River/Big Bar; and McGraw Creek. These subwatersheds are contained within the Lower Imnaha River, Upper Imnaha River, Imnaha River, Snake River, Snake River/Hat Point, Big Sheep Creek and Pine Creek watersheds.
The Forest planning process allocated specific management direction across the Wallowa-Whitman National Forest. Within the area encompassed by the seventeen allotments, the management areas (MAs) are MA1—Timber Production Emphasis, MA3—Big game winter range/timber; MA4—Wilderness; MA7—Wild and Scenic River; MA8—HCNRA Snake River corridor; MA9—HCNRA Dispersed Recreation/Native Vegetation, MA10—HCNRA Forage production; MA11—HCNRA Dispersed recreation/timber; MA12—Research Natural Areas, and MA15—Old Growth Preservation.
The seventeen allotments encompass approximately 86,268 acres of NFS Lands, with private land making up an additional 7,603 acres. Approximately 30,695 acres in the Himmelwright, Saddle Creek and Snake River allotments are part of the Hells Canyon Wilderness. Points of interest in the allotments include portions of the Wallowa Loop Road (Forest Road 39); as well as many historic, prehistoric and scenic sites located along the area's extensive trail system. These include Barton Heights, Saulsbery Saddle, Lord Flat, Summit Ridge; Freezeout Saddle; Needham Butte,. and many others.
The Middle Imnaha River Range Planning Area provides habitat for many wildlife species including management indicator species (MIS) and their habitats. These MIS species include California wolverine, North American lynx, Rocky Mountain elk, marten, pileated woodpecker, goshawk, bald eagle and American peregrine falcon. Fish species within the planning area include native populations of inland redband/rainbow trout, bull trout, steelhead and Chinook salmon.
Preliminary issues include: (1) The effects of livestock grazing on riparian conditions (including water quality, water temperature and stream bank stability); (2) The effects of no grazing or reduced grazing on the local economy; (3) The reduction in soil productivity and in amounts of native bunchgrasses due to the encroachment of cheatgrass and sand dropseed species; (4) The effects of livestock grazing on Wild and Scenic River Outstandingly Remarkable Values and Wilderness values, (5) the effects of livestock grazing on TES species and (6) the effects of livestock grazing on big game winter range.
A detailed public involvement plan has been developed, and an interdisciplinary team has been selected to do the environmental analysis, prepare and accomplish scoping, and accomplish public involvement activities.
The proposed action is intended to provide the analysis needed to prepare new AMPs that meet all the Forest Plan amended requirements of Interim Strategies for Managing Pacific Anadromous Fish-producing Watersheds in Eastern Oregon and Washington, Idaho, and portions of California (PACFISH), Inland Native Strategies for Managing Fish-producing Watersheds in Eastern Oregon and Washington, Idaho, Western Montana, and Portions of Nevada (INFISH), Wild and Scenic River Plans, and are consistent with the scientific findings of the Interior Columbia Basin Ecosystem Management Program (ICBEMP). Consultation with the U.S. Fish and Wildlife Service, as required by the
Public involvement will be especially important at several points during the analysis, beginning with the scoping process. The Forest Service will be consulting with Tribes and seeking information, comments, and assistance from Federal, State, local agencies, current range permittees, and other individuals or organizations who may be interested in or affected by the proposals. The scoping process includes:
1. Identifying and clarifying issues.
2. Identifying key issues to be analyzed in depth.
3. Exploring alternatives based on themes which will be derived from issues recognized during scoping activities.
4. Identifying potential environmental effects of the proposals and alternatives (
5. Determining potential cooperating agencies and task assignments.
6. Developing a list of interested people to keep apprised of opportunities to participate through meetings, personal contacts, or written comments.
7. Developing a means of informing the public through the media and/or written material (
Public comments are appreciated throughout the analysis process. The draft EIS is expected to be filed with the Environmental Protection Agency (EPA) and be available for public review by March, 2001. The comment period on the draft EIS will be 45 days from the date the EPA publishes the notice of availability in the
Comments received in response to this notice, including names and addresses of those who comment, will be considered part of the public record on this proposed action and will be available for public inspection. Comments submitted anonymously will be accepted and considered, however, those who submit anonymous comments will not have standing to appeal the subsequent decision under 36 CFR Parts 215. Additionally, pursuant to 7 CFR 1.27(d), any person may request the agency to withhold a submission from the public record by showing how the Freedom of Information Act (FOIA) permits such confidentiality. Persons requesting such confidentiality should be aware that, under the FOIA, confidentiality may be granted in only very limited circumstances, such as to protect trade secrets. The Forest Service will inform the requester of the agency's decision regarding the request for confidentiality, and where the request is denied, the agency will return the submission and notify the requester that the comments may be resubmitted with or without name and address within a specified number of days.
The Forest Service believes it is important to give reviewers notice of this early stage of public participation and of several court rulings related to public participation in the environmental review process. First, reviewers of a draft EIS must structure their participation in the environmental review of the proposal so that it is meaningful and alerts an agency to the reviewer's position and contentions.
To assist the Forest Service in identifying and considering issues and concerns on the proposed action, comments on the draft EIS should be as specific as possible. It is also helpful if comments refer to specific pages or chapters of the draft statement. Comments may also address the adequacy of the draft EIS or the merits of the alternatives formulated and discussed in the statement. (Reviewers may wish to refer to the Council on Environmental Quality Regulations for implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1503.3 in addressing these points.)
In the final EIS, the Forest Service is required to respond to substantive comments and responses received during the comment period that pertain to the environmental consequences discussed in the draft EIS and applicable laws, regulations, and policies considered in making a decision regarding the proposal. The Forest Service is the lead Agency. Karyn L. Wood, Forest Supervisor, is the Responsible Official. As the Responsible Official she will document the decision and rationale for the decision in the Record of Decision. That decision will be subject to Forest Service Appeal Regulations (36 CFR part 215).
National Agricultural Statistics Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (Pub. L. No. 104-13) and Office of Management and Budget regulations at 5 CFR part 1320 (60 FR 44978, August 29, 1995), this notice announces the intent of the National Agricultural Statistics Service (NASS) to request an extension of a currently approved information collection, the
Comments on this notice must be received by June 12, 2000 to be assured of consideration.
Contact Rich Allen, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, 1400 Independence Avenue SW, Room 4117 South Building, Washington, DC 20250-2000, (202) 720-4333.
These data will be collected under the authority of 7 U.S.C. 2204(a). Individually identifiable data collected under this authority are governed by Section 1770 of the Food Security Act of 1985, 7 U.S.C. 2276, which requires USDA to afford strict confidentiality to non-aggregated data provided by respondents.
Copies of this information collection and related instructions can be obtained without charge from Ginny McBride, the Agency OMB Clearance Officer, at (202) 720-5778.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to: Ginny McBride, Agency OMB Clearance Officer, U.S. Department of Agriculture, 1400 Independence Avenue SW, Room 4162 South Building, Washington, DC 20250-2000.
All responses to this notice will become a matter of public record and be summarized in the request for OMB approval.
National Agricultural Statistics Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13) and Office of Management and Budget regulations at 5 CFR part 1320 (60 FR 44978, August 29, 1995), this notice announces the intent of the National Agricultural Statistics Service (NASS) to request approval for an information collection, the Monthly Hog Survey.
Comments on this notice must be received by June 12, 2000, to be assured of consideration.
Contact Rich Allen, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, 1400 Independence Avenue SW, Room 4117 South Building, Washington, D.C. 20250-2000, (202) 720-4333.
The Monthly Hog Survey Program will supplement the Hog Survey Program currently conducted as part of the Quarterly Agricultural Surveys. The monthly surveys will use a shorter version of the quarterly questionnaire and will be conducted eight times a year, during the months between the Quarterly Hog Surveys. The sampling frame for the monthly program will be hog owners who reported breeding females on the December Quarterly Hog Survey.
NASS was directed to publish on a monthly basis the Hogs and Pigs Inventory Report with the passage by Congress and signature of the President of H.R. 1906, the FY2000 Department of Agriculture budget. The Monthly Hog Report will include estimates of (1) Inventory of breeding females, (2) breeding females mated, (3) litters farrowed, (4) pigs born alive, (5) average pigs/litter born, and (6) pigs weaned. Hog producers supported the provision that NASS publish the Hogs and Pigs Inventory Report on a monthly basis. Data users can utilize monthly data of breeding females and pig crop to get an indication of hog supplies coming to market over the next 6 months.
These data will be collected under the authority of 7 U.S.C. 2204(a). Individually identifiable data collected under this authority are governed by Section 1770 of the Food Security Act of 1985, 7 U.S.C. 2276, which requires USDA to afford strict confidentiality to non-aggregated data provided by respondents.
Copies of this information collection and related instructions can be obtained without charge from Ginny McBride, Agency OMB Clearance Officer, at (202) 720-5778.
National Agricultural Statistics Service, USDA.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, 5 U.S.C. App. 2, the National Agricultural Statistics Service (NASS) announces a meeting of the Advisory Committee on Agriculture Statistics.
Rich Allen, Executive Director, Advisory Committee on Agriculture Statistics, U.S. Department of Agriculture, National Agricultural Statistics Service, 1400 Independence Avenue SW, Room 4117 South Building, Washington, D.C. 20250-2000. Telephone: 202-720-4333, Fax: 202-720-9013, or e-mail: rallen@nass.usda.gov.
The Advisory Committee on Agriculture Statistics, which consists of 25 members appointed from 7 categories covering a broad range of agricultural disciplines and interests, has scheduled a meeting on April 25-26, 2000. The Committee meeting will be held 8 a.m.-4:30 p.m. on Tuesday, April 25, and 8:00 a.m.-11:30 a.m. on Wednesday, April 26. During this time the Advisory Committee will discuss: (1) 2002 Census of Agriculture content, (2) NASS data use policy, (3) mandatory business reporting, and (4) census of agriculture procedures for American Indian reservations.
April 26—8 a.m. to 11:30 a.m., Advisory Committee Meeting, with an opportunity for public questions and comments at 9:45 a.m., Crowne Plaza Hotel, 1001 14th & K Streets, NW, Washington, DC.
Architectural and Transportation Barriers Compliance Board.
Notice of meeting.
The Architectural and Transportation Barriers Compliance Board (Access Board) established a Public Rights-of-Way Access Advisory Committee (committee) to assist the Board in developing a proposed rule on accessibility guidelines for newly constructed and altered public rights-of-way covered by the Americans with Disabilities Act of 1990 and the Architectural Barriers Act of 1968. This document announces the next meeting of the committee, which will be open to the public.
The third meeting of the committee is scheduled for May 18 and 19, 2000, beginning at 9 a.m. and ending at 5:30 p.m. each day; and May 20, 2000 beginning at 9 a.m and ending at 3 p.m.
The meeting will be held in the 3rd floor training room at 1331 F Street, NW., Washington, DC.
Scott Windley, Office of Technical and Information Services, Architectural and Transportation Barriers Compliance Board, 1331 F Street, NW., suite 1000, Washington, DC 20004-1111. Telephone number (202) 272-5434 extension 125 (Voice); (202) 272-5449 (TTY). E-mail windley@access-board.gov. This document is available in alternate formats (cassette tape, Braille, large print, or ASCII disk) upon request. This document is also available on the Board's Internet Site (http://www.access-board.gov/notices/prowmtg.htm).
On October 20, 1999, the Architectural and Transportation Barriers Compliance Board (Access Board) published a notice appointing members to a Public Rights-of-Way Access Advisory Committee (committee) to provide recommendations for developing a proposed rule addressing accessibility guidelines for newly constructed and altered public rights-of-way covered by the Americans with Disabilities Act of 1990 and the Architectural Barriers Act of 1968. 64 FR 56482 (October 20, 1999).
Committee meetings will be open to the public and interested persons can attend the meetings and communicate their views. Members of the public will have an opportunity to address the committee on issues of interest to them and the committee during the public comment period at the end of each meeting day. Members of groups or individuals who are not members of the committee may also have the opportunity to participate with subcommittees of the committee. Additionally, all interested persons will have the opportunity to comment when the proposed accessibility guidelines for public rights-of-way are issued in the
Individuals who require sign language interpreters or real-time captioning systems should contact Scott Windley by May 3, 2000. Notices of future meetings will be published in the
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to the procurement list.
This action adds to the Procurement List services to be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
May 8, 2000.
Committee for Purchase From People Who Are Blind or Severely Disabled, Crystal Gateway 3, Suite 310, 1215 Jefferson Davis Highway, Arlington, Virginia 22202-4302.
Louis R. Bartalot (703) 603-7740.
On February 11, and 25, 2000, the Committee for Purchase From People Who Are Blind or Severely Disabled published notices (65 FR 6981 and 10047) of proposed additions to the Procurement List.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the services and impact of the additions on the current or most recent contractors, the Committee has determined that the services listed below are suitable for procurement by the Federal Government under 41 U.S.C. 46-48c and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organizations that will furnish the services to the Government.
2. The action will not have a severe economic impact on current contractors for the services.
3. The action will result in authorizing small entities to furnish the services to the Government.
4. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-48c) in connection with the services proposed for addition to the Procurement List.
Accordingly, the following services are hereby added to the Procurement List:
This action does not affect current contracts awarded prior to the effective date of this addition or options that may be exercised under those contracts.
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed addition to and deletions from procurement list.
The Committee has received proposals to add to the Procurement List a service to be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and to delete commodities previously furnished by such agencies.
May 8, 2000.
Committee for Purchase From People Who Are Blind or Severely Disabled, Crystal Gateway 3, Suite 310, 1215 Jefferson Davis Highway, Arlington, Virginia 22202-4302.
Louis R. Bartalot (703) 603-7740.
This notice is published pursuant to 41 U.S.C. 47(a) (2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the possible impact of the proposed actions.
If the Committee approves the proposed addition, all entities of the Federal Government (except as otherwise indicated) will be required to procure the service listed below from nonprofit agencies employing persons who are blind or have other severe disabilities.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organizations that will furnish the service to the Government.
2. The action will result in authorizing small entities to furnish the service to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-48c) in connection with the service proposed for addition to the Procurement List. Comments on this certification are invited. Commenters should identify the statement(s) underlying the certification on which they are providing additional information.
The following service has been proposed for addition to Procurement List for production by the nonprofit agency listed:
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action will result in authorizing small entities to furnish the commodities to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-48c) in connection with the commodities proposed for deletion from the Procurement List.
The following commodities have been proposed for deletion from the Procurement List:
An application has been submitted to the Foreign-Trade Zones (FTZ) Board (the Board) by the City of Tampa, Florida, grantee of Foreign-Trade Zone 79, requesting authority to expand its zone to include the Tampa International Airport fuel system which consists of the airport hydrant and storage facilities, a pipeline, and two offsite terminals, within the Tampa Customs port of entry. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR Part 400). It was formally filed on March 28, 2000.
FTZ 79 was approved on May 29, 1982 (Board Order 192, 47 FR 24760, 6/8/82) and expanded on December 29, 1993 (Board Order 676, 59 F.R. 1371, 1/10/94). The zone project currently consists of six sites in the Tampa area:
The applicant is now requesting authority to expand the general-purpose zone to include the jet fuel storage and distribution system (100 acres) at the Tampa International Airport. The airport fuel system includes the jet fuel storage farm (3 acres) and hydrant systems (23 acres) at the Tampa International Airport; the petroleum products storage terminal of GATX (31 acres), Hookers Point, Port of Tampa section of the City of Tampa; the petroleum products storage terminal of Motiva (16 acres), 6500 W. Commerce Street, Port Tampa section of the City of Tampa; and, the Tampa Pipeline (26 acres), a dedicated jet fuel carrier line. The GATX terminal is owned and operated by GATX Terminals Corporation; the Motiva terminal is owned and operated by Motiva Enterprises LLC; and, the Tampa dedicated pipeline is owned by the Tampa Pipeline Limited Partnership. Hillsborough County Aviation Authority owns the property that contains the jet fuel storage and distribution facilities at the Tampa International Airport. The City of Tampa owns the land at the GATX terminal and the land at the Tampa Pipeline location. The airport property is leased to the member airlines of the Tampa Fuel Committee. The Aircraft Services International Group (ASIG) will operate the jet fuel storage and distribution facilities at the airport. In addition to the storage of jet fuel, the Motiva and GATX terminals may also use zone status for the receipt and storage of other petroleum products.
No specific manufacturing requests are being made at this time. Such requests would be made to the Board on a case-by-case basis.
In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.
Public comment on the application is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is June 6, 2000. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to June 21, 2000).
A copy of the application and accompanying exhibits will be available for public inspection at each of the following locations:
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review and new shipper review, and determination not to revoke the antidumping duty order in part.
The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on carbon steel wire rope from Mexico in response to requests by respondent Aceros Camesa S.A. de C.V. (Camesa) and petitioner, the Committee of Domestic Steel Wire Rope and Specialty Cable Manufacturers (the Committee). Camesa also requested that the order be revoked as it pertains to sales of its products to the United States. This review covers exports of subject merchandise to the United States during the period March 1, 1998 through February 28, 1999.
We have preliminarily determined that Camesa's sales have been made below normal value (NV). If these preliminary results are adopted in our final results of this administrative review, we will instruct the U.S. Customs Service to assess antidumping duties based on the difference between the export price (EP) or constructed export price (CEP) and the NV.
The Department is also conducting a new shipper review of the antidumping duty order on carbon steel wire rope from Mexico in response to a request by respondent Cablesa S.A. de C.V. (Cablesa).
We have preliminarily determined that Cablesa's sales have not been made below NV. If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service to liquidate appropriate entries without regard to antidumping duties.
Interested parties are invited to comment on these preliminary results. Parties who submit comments are requested to submit with each comment a statement of the issue and a brief summary of the comment.
April 7, 2000.
Mark Hoadley, (202) 482-0666, or Maureen Flannery, (202) 482-3020, AD/CVD Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington DC 20230.
Unless otherwise stated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act. In addition, unless otherwise stated, all citations to the Department's regulations are references to the regulations as codified at 19 CFR part 351 (April 1999).
The Department published in the
In accordance with 19 CFR 351.213(b)(2), Camesa requested that we
In accordance with 19 CFR 351.214, Cablesa requested that we conduct a new shipper review of its sales. We published a notice of initiation of this new shipper review on May 7, 1999 (64 FR 24573).
In accordance with section 773(b)(2)(A)(ii), the Department initiated a sales-below-cost investigation of Camesa. The Department determined to initiate this inquiry because, during the immediately preceding review of this antidumping duty order, the second administrative review, the Department disregarded some of Camesa's below-cost sales. The final results of the second administrative review were published on July 27, 1999 (64 FR 40549). We received cost data from Camesa on August 2, 1999.
During this review, the Department conducted verifications of the information provided by Cablesa and information provided by Camesa concerning its further manufacturing of subject merchandise in the United States. We used standard verification procedures, including on-site inspection of the manufacturer's facilities and the examination of relevant sales and financial records. Our verification results for Cablesa are outlined in business-proprietary and public versions of the verification reports. Our verification results for Camesa are not available (refer to following paragraph).
On September 28, 1999, the Department received a letter from Camesa announcing its intention not to continue participating in this review, including the final days of verification scheduled for the following week. It stated that all material it had submitted during this review should be returned by the Department and the Committee and removed from the record. The Department destroyed all such material with the exception of Camesa's September 28 letter.
The product covered by this review is carbon steel wire rope. Steel wire rope encompasses ropes, cables, and cordage of iron or carbon steel, other than stranded wire, not fitted with fittings or made up into articles, and not made up of brass plated wire. Imports of these products are currently classifiable under the following Harmonized Tariff Schedule (HTS) subheadings: 7312.10.9030, 7312.10.9060 and 7312.10.9090.
Excluded from this review is stainless steel wire rope, which is classifiable under the HTS subheading 7312.10.6000, and all forms of stranded wire, with the following exception.
Based on the affirmative final determination of circumvention of the antidumping duty order, 60 FR 10831 (Feb. 28, 1995), the Department has determined that steel wire strand, when manufactured in Mexico by Camesa and imported into the United States for use in the production of steel wire rope, falls within the scope of the antidumping duty order on steel wire rope from Mexico. Such merchandise is currently classifiable under subheading 7312.10.3020 of the HTS.
Although HTS subheadings are provided for convenience and Customs purposes, the written description of the scope of this order remains dispositive.
These reviews cover the period March 1, 1998 through February 28, 1999.
Section 776(a)(2) of the Act provides that if any interested party: (A) Withholds information that has been requested by the Department; (B) fails to provide such information in a timely manner or in the form or manner requested; (C) significantly impedes an antidumping proceeding; or (D) provides such information but the information cannot be verified, the Department shall use the facts otherwise available (FA) in reaching the applicable determination under this title.
As noted above, Camesa notified the Department of its intent not to continue participating in the administrative review and requested the return or destruction of all of its submissions. Additionally, Camesa informed the Department that it would not be participating further in verification. Thus, the Department does not have any information with which to calculate a margin. We determine that Camesa's actions amount to withholding information requested by the Department, thus significantly impeding our review. As such, consistent with sections 776(a)(2)(A) and (C) of the Act, we are relying upon the facts otherwise available. Furthermore, we determine that Camesa did not cooperate to the best of its ability with our requests for information, and that, pursuant to section 776(b) of the Act, the use of adverse FA is appropriate.
Under section 776(b) of the Act, adverse FA may include reliance on information derived from: (1) The petition, (2) a final determination in the investigation, (3) any previous review under section 751 of the Act or determination under section 753 of the Act, or (4) any other information placed on the record. For Camesa, we have used the highest rate from the investigation, 111.68 percent, which is the “all others rate” established in the investigation and which was Camesa's rate until the first review.
Section 776(c) of the Act provides that the Department shall, to the extent practicable, corroborate secondary information using independent sources reasonably at its disposal. The Statement of Administrative Action, H.R. Doc. No. 103-316, 870 (1994) (SAA) provides that “corroborate” means simply that the Department will satisfy itself that the secondary information to be used has probative value.
Section 351.222(b)(2)(i) requires that in order for the Department to revoke an order in part we must, among other requirements, determine that the exporter or producer has sold the merchandise at not less than NV for a period of at least three consecutive years. Because we have determined that Camesa has sold subject merchandise at less than NV during the current review period, we have determined not to revoke the order in part.
In accordance with section 771(16) of the Act, we considered all products produced by Cablesa covered by the description in the “Scope of Review” section, above, and sold in the home market during the period of review (POR) to be foreign like products for the purposes of determining appropriate product comparisons with U.S. sales. In the Product Concordance section (Appendix V) of our questionnaire, we provided the following hierarchy of product characteristics to be used for reporting identical and most similar comparisons of merchandise: (1) Type of steel wire (finishing type); (2) diameter of wire rope; (3) type of core; (4) class of wire rope; (5) grade of steel; (6) number of wires per strand; (7) design of strands; and (8) lay of rope.
Cablesa requested that we allow it to limit its reporting of home market sales of steel wire rope to products having the
On January 11, 2000, the Department requested that Cablesa submit additional home market sales. On January 28, 2000, Cablesa submitted a response containing some additional sales information and requesting that the Department calculate NV using this additional information or information previously placed on the record. Upon reviewing Cablesa's submission, we determined that this additional information, combined with information already on the record, is sufficient for margin calculation purposes. Specifically, Cablesa's submission demonstrates that, although the Department does not have sales data for all of Cablesa's home market sales during the POR, any additional home market sales data would not be of similar merchandise, and thus would not provide valid matches. For a more detailed discussion, see
We based United States price on EP, as defined in section 772(a) of the Act, because the merchandise was sold directly by the manufacturer to an unaffiliated U.S. purchaser prior to the date of importation, and because CEP was not indicated by other facts of record.
The Department calculated EP for Cablesa based on packed, delivered prices to customers in the United States. We made deductions for domestic and foreign inland freight expenses, inland insurance, U.S. customs duties, and brokerage and handling, in accordance with section 772(c)(2)(A).
We have preliminarily determined that none of the home market sales reported by Cablesa provides a suitable basis for calculating NV. Each reported home market sale is either not contemporaneous with the U.S. sale, would require a difference in merchandise adjustment of greater than 20 percent to be matched with the U.S. sale, or could not be shown to have been made on an arm's-length basis with home market customers. Therefore, we based NV on constructed value (CV). CV consists of the cost of manufacturing the product sold in the United States, plus amounts for selling, general, and administrative expenses, interest expenses, U.S. packing expenses, U.S. credit expenses, and profit made on sales of foreign like merchandise in the home market. We deducted an amount for home market credit expense in order to compare CV to the U.S. sale.
For Camesa, based on adverse facts available, and for Cablesa, based on our comparison of CV and EP, we preliminarily determine that the following weighted-average dumping margins exist:
The Department will disclose its calculations within 5 business days of the date of publication of this notice. Any interested party may request a hearing within 30 days of publication. Pursuant to 19 CFR § 351.310(d), any hearing, if requested, will be held 37 days after the publication of this notice, or the first workday thereafter. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 35 days after the date of publication. The Department will publish a notice of final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, not later than 120 days after the date of publication of this notice.
Upon issuance of the final results of review, the Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. Upon completion of this review, the Department will issue appraisement instructions directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon publication of the final results of these reviews for all shipments of steel wire rope products from Mexico entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(c) of the Act: (1) The cash deposit rate for the reviewed companies will be the rates established in the final results of these reviews; (2) For merchandise exported by manufacturers or exporters not covered in these reviews but covered in the original investigation of sales at LTFV or a previous review, the cash deposit will continue to be the company-specific rate published for the most recent period; (3) If the exporter is not a firm covered in this or a previous review, or the original LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) for all other producers and/or exporters of this merchandise, the cash deposit rate shall be 111.68 percent, the “all others” rate established in the LTFV investigation (58 FR 7531, February 8, 1993).
These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review. This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR § 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This administrative review and notice are issued and published in accordance with sections 751(a)(1) and (a)(2)(B) of the Act (19 USC 1675(a)) and 19 CFR §§ 351.213-14.
Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of full sunset review: Corrosion-resistant carbon steel flat products from Canada.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the antidumping duty order on corrosion-resistant carbon steel flat products from Canada (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and an adequate substantive response filed on behalf of domestic interested parties and inadequate response (in this case, because exports of the respondent account for less than the threshold amount of exports (
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98.3—
On September 1, 1999, the Department initiated a sunset review of the antidumping duty order on cut-to-length carbon steel plate from Canada (64 FR 47767), pursuant to section 751(c) of the Act. The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Corporation, a unit of USX Corporation, Ispat Inlad, Inc., and LTV Steel Company (collectively, “domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 24, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.
All interested parties claim that they have been involved in this proceeding since its inception. Domestic interested parties state that they have participated in the investigation, all five administrative reviews, and all related appeals (
On October 15, 1999, we received rebuttal comments from domestic interested parties and Dofasco. On October 20, 1999, pursuant to 19 CFR 351.218 (e)(1)(ii)(A), the Department determined to conduct an expedited (120-day) sunset review of this order.
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
These products include flat-rolled carbon steel products, of rectangular shape, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel, or iron-based alloys, whether or not corrugated or painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (“HTS”) under item numbers: 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, and 7217.90.5090.
Included in the scope are flat-rolled products of nonrectangular cross-section where such cross-section is achieved subsequent to the rolling process (
Excluded from the scope are flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”), or both chromium and chromium oxides (“tin-free steel”), whether or not painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating. Also excluded from the scope are certain clad stainless flat-rolled products, which are three-layered corrosion-resistant carbon steel flat-rolled products less than 4.75 millimeters in composite thickness that consist of a carbon steel flat-rolled product clad on both sides with stainless steel in a 20-60-20 percent ratio.
All issues raised in the case and rebuttal briefs by parties to this sunset review are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Robert S. La Russa, Assistant Secretary for Import Administration, dated March 29, 2000, which is hereby adopted and incorporated by reference into this notice. The issues discussed in the attached Decision Memo include adequacy, the likelihood of continuation or recurrence of dumping, and the magnitude of the margin likely to prevail were the order revoked. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099, of the main Commerce building.
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.
We preliminarily determine that revocation of the antidumping duty order on corrosion-resistant carbon steel flat products from Canada would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins:
Any interested party may request a hearing within 30 days of publication of this notice in accordance with 19 CFR 351.310(c). Any hearing, if requested, will be held on May 17, 2000, in accordance with 19 CFR 351.310(d). Interested parties may submit case briefs no later than May 8, 2000, in accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than May 15, 2000. The Department will issue a notice of final results of this sunset review, which will include the results of its analysis of issues raised in any such comments, no later than July 27, 2000, in accordance with section 751(c)(5)(B) of the Act.
This five-year (“sunset”) review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.
Import Administration, International Trade Administration, U.S. Department of Commerce.
Notice of amended final results of the antidumping duty administrative review of certain corrosion-resistant carbon steel flat products and certain cut-to-length carbon steel plate from Canada and determination not to revoke in part.
We are amending our final results of the 1997-98 administrative reviews of the antidumping duty orders on Certain Corrosion Resistant Carbon Steel Products and Certain Cut-to-Length Carbon Steel Plate From Canada and Determination Not to Revoke in Part, published on February 24, 2000 (65 FR 9243), to reflect the correction of ministerial errors made in the model match and margin calculation in the final results for corrosion resistant carbon steel flat products. We are publishing this amendment to the final results in accordance with 19 CFR part 351 (1998).
March 30, 2000.
Elfi Blum (Stelco, Inc. (Stelco)) and Michael Strollo (Dofasco,Inc. and Sorevco, Inc., collectively Dofasco), Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington DC 20230; telephone (202) 482-0197 and (202) 482-5255, respectively.
Unless otherwise stated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the
On August 19, 1999, the Department of Commerce (the Department) published in the
On February 28, 2000 and on March 6, 2000, we received timely allegations from petitioners (Bethlehem Steel Corporation, U.S. Steel Group (a unit of USX Corporation), Inland Steel Industries, Inc., AK Steel Corporation, LTV Steel Co., Inc. and National) that the Department made ministerial errors in the final results of reviews regarding Stelco and Dofasco, respectively. On March 6, 2000 we also received a timely allegation from Dofasco that the Department made clerical errors in the final results. On March 8, 2000 we received rebuttal comments from Dofasco.
The products covered by these administrative reviews constitute two separate “classes or kinds” of merchandise: (1) Certain corrosion-resistant carbon steel flat products, and (2) certain cut-to-length carbon steel plate.
The first class or kind, certain corrosion-resistant steel, includes flat-rolled carbon steel products, of rectangular shape, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (HTS) under item numbers 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, and 7217.90.5090. Included in this review are corrosion-resistant flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (
The second class or kind, certain cut-to-length plate, includes hot-rolled carbon steel universal mill plates (
With respect to both classes or kinds, the HTS item numbers are provided for convenience and Customs purposes. The written description remains dispositive of the scope of these reviews.
On March 6, 2000, petitioners and Dofasco alleged that the Department made ministerial errors in calculating the final antidumping margin with respect to Dofasco, one of the respondents in the review of corrosion-resistant carbon steel flat products from Canada.
Petitioners argue that the Department did not exclude sales that failed the arm's length test from our model match program. Dofasco agrees with petitioners.
Petitioners allege that the Department erroneously calculated Dofasco's credit expenses. Dofasco agrees with petitioners in this regard. For a further
Dofasco alleges that the Department tested for actual freight (ACTFRTH) to identify Dofasco's prepaid and charge transactions where ACTFRTH was not reported. However, Dofasco argued that ACTFRTH is never missing, but rather is reported as zero for such transactions. Thus, as a result, Dofasco alleges that movement expense (MOVEH) was not calculated correctly for these transactions. Petitioners did not comment on this issue.
Dofasco argues that the Department improperly conducted the arm's length test by comparing the prices of the affiliated transactions to the prices of the unaffiliated transactions to the same customer instead of to the weighted-average net price for each product sold to all unaffiliated customers. Dofasco contends that this was only possible since all of Dofasco's customers have since become unaffiliated during the extended review period. Petitioners did not comment on this issue.
Dofasco argues that, although the Department is now using a file with the correct file name, and with the correct number of records, the original data submitted by Dofasco and Sorevco was processed prior to its use in these programs without any explanation by the Department. Dofasco concludes that, as a result, the model match program was not run properly. As evidence of Dofasco's claim, it points to the following: (1) The log of the model match program was sorted by SALEDTH instead of first by CONNUMH then by SALEDTH as Dofasco claims its data was sorted; (2) the number of home market models used to create the product concordance is 12,024 when Dofasco runs the data it submitted (
Dofasco argues that the Department correctly recombined Dofasco's and Sorevco's production costs by PRODUCTH; however, the Department omitted certain steps in its recalculation of the weighted-average production costs. Dofasco contends that the Department failed to eliminate duplicate records from Dofasco's and Sorevco's production costs, and that the Department should calculate a weighted average by production quantity. In addition, the Department erroneously conducted the cost test by PRODUCTH rather than CONNUMH. In each instance, Dofasco provided programming language to solve the identified problems. Petitioners did not comment on the issue.
Dofasco argues that the Department failed to convert the recalculated CREDITU to U.S. dollars when the transaction was reported in Canadian dollars. Dofasco proposed programming language to rectify this problem.
Dofasco alleges that the Department made a more fundamental error in the calculation of its U.S. credit expenses. Dofasco contends that the Department must correct the methodology it used to recalculate these expenses.
Petitioners, however, argue that the comment submitted by Dofasco is unrelated to any ministerial error comments contained in petitioners' March 6, 2000 submission, and as such, does not constitute a reply pursuant to section 351.224(c)(3) of the Department's regulations. Instead, petitioners contend that this is simply an untimely submission of a new ministerial error comment pursuant to section 351.224(c)(1) of the Department's regulations and should not be considered by the Department.
As a result of the corrections made to the arm's length, model match, and margin calculation programs, the margin for corrosion-resistant carbon steel flat products from Canada for Dofasco has changed from 0.16 percent to 0.20 percent.
On February 28, 2000, petitioners alleged that the Department made ministerial errors in calculating the final antidumping duty margin with respect to Stelco, one of the respondents in the review of corrosion-resistant carbon steel flat products from Canada. Petitioners alleged that the Department made certain errors in its computer programming language for the model match and margin calculation programs, when implementing its adjustment to G&A for Baycoat G&A expenses in the cost of production (COP) and constructed value (CV) calculations. Petitioners argue that the Department should have renamed the G&A variable when making the Baycoat adjustment, to avoid distortion of the value of Stelco's G&A.
We agree with petitioners that we incorrectly calculated the revised G&A expenses for Stelco by not renaming the G&A variable in our COP and CV calculations after adjusting for Baycoat's G&A expenses. We have made the pertinent corrections in the programming language of our model match and margin calculation programs, and renamed the respective variables to RGNA and RGNACV.
As a result of these corrections, the margin for corrosion-resistant carbon steel flat products from Canada for Stelco has changed from 0.68 percent to 4.24 percent.
Upon review of the submitted allegations, the Department has determined that the following margins exist for the period August 1, 1997, through July 31, 1998:
The Department will determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. For assessment purposes, we have calculated importer-specific
Furthermore, the following deposit requirements will be effective upon publication of these amended final results for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date as provided by section 751(a)(1) of the Act: (1) The cash deposit rate for each reviewed company will be the rates stated above (except that no deposit will be required for firms with zero or
These administrative reviews and this notice are in accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1) and 19 CFR 351.213 and 19 CFR 351.221(b)(5).
Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of full sunset review: Cut-to-length carbon steel plate from Canada.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the antidumping duty order on cut-to-length carbon steel plate from Canada (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and an adequate substantive response filed on behalf of domestic interested parties and inadequate response from respondent interested parties (in this case, because exports of the respondent account for less than the threshold amount of exports (
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98.3—
On September 1, 1999, the Department initiated a sunset review of the antidumping duty order on cut-to-length carbon steel plate from Canada (64 FR 47767), pursuant to section 751(c) of the Act. The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Corporation, a unit of USX Corporation (“domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 24, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.
Domestic interested parties and Stelco claim that they have been involved in this proceeding since its inception. Domestic interested parties state that they have participated in the investigation, all five administrative reviews, and all related appeals (
On November 10, 1999, we received comments from the Government of Canada and Stelco on the adequacy and appropriateness of an expedited sunset review concerning the subject order. Based on the comments we've received from Stelco, we have now determined that it is appropriate to conduct a full review in this case.
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
These products include hot-rolled carbon steel universal mill plates (
Included in this order are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (
Excluded from this order is grade X-70 plate. Also excluded is cut-to-length carbon steel plate meeting the following criteria: (1) 100 percent dry steel plates, virgin steel, no scrap content (free of Cobalt-60 and other radioactive nuclides); (2) 0.290 inches maximum thickness, plus 0.0, minus 0.030 inches;
All issues raised in the case and rebuttal briefs by parties to this sunset review are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Robert S. La Russa, Assistant Secretary for Import Administration, dated March 29, 2000, which is hereby adopted by this notice. The issues discussed in the attached Decision Memo include adequacy, the likelihood of continuation or recurrence of dumping, and the magnitude of the margin likely to prevail were the order revoked. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099, of the main Commerce building.
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.
We preliminarily determine that revocation of the antidumping duty order on cut-to-length carbon steel plate from Canada would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins:
Any interested party may request a hearing within 30 days of publication of this notice in accordance with 19 CFR 351.310(c). Any hearing, if requested, will be held on May 17, 2000, in accordance with 19 CFR 351.310(d). Interested parties may submit case briefs no later than May 8, 2000, in accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than May 15, 2000. The Department will issue a notice of final results of this sunset review, which will include the results of its analysis of issues raised in any such comments, no later than July 27, 2000, in accordance with section 751(c)(5)(B) of the Act.
This five-year (“sunset”) review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of final results of expedited sunset review: Cut-to-length carbon steel plate from Belgium.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the antidumping duty order on cut-to-length carbon steel plate from Belgium (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and an adequate substantive response filed on behalf of domestic interested parties and inadequate response from respondent interested parties, the Department determined to conduct an expedited review. As a result of this review, the Department finds that revocation of the antidumping duty order would likely lead to continuation or recurrence of dumping at the levels indicated in the Final Results of Review section of this notice.
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98.3—
On September 1, 1999, the Department initiated a sunset review of the antidumping duty order on cut-to-length carbon steel plate from Belgium (64 FR 47767), pursuant to section 751(c) of the Act. The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Corporation, a unit of USX Corporation (“domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 20, 1999, we received a request for an extension to file rebuttal comments from domestic interested
On October 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the
Domestic interested parties assert that at least one of them has been involved in this proceeding since the petition was filed, and has participated in each subsequent segment of the case (
On October 21, 1999, pursuant to 19 CFR 351.218(e)(1)(ii)(A), the Department determined to conduct an expedited (120-day) sunset review of this order.
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
The scope of this order includes hot-rolled carbon steel universal mill plates (
All issues raised in the case and rebuttal briefs by parties to this sunset review are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Robert S. La Russa, Assistant Secretary for Import Administration, dated March 29, 2000, which is hereby adopted by this notice. The issues discussed in the attached Decision Memo include the likelihood of continuation or recurrence of dumping and the magnitude of the margin likely to prevail were the order revoked. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099, of the main Commerce building.
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.
We determine that revocation of the antidumping duty order on cut-to-length carbon steel plate from Belgium would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins:
This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This five-year (“sunset”) review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of postponement of preliminary results of antidumping duty administrative reviews.
April 7, 2000.
Doreen Chen or Robert Bolling, Office IX, DAS Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230; telephone (202) 482-0408 and (202) 482-3434, respectively.
On October 29, 1999, the Department initiated these administrative reviews, setting May 2, 2000 as the date for issuing the preliminary results of the review.
The date for issuing the preliminary results is moved from May 2, 2000 to August 30, 2000.
Import Administration, International Trade Administration, Department of Commerce.
Notice.
On March 8, 2000, in
Consistent with the decision of the Court of Appeals for the Federal Circuit in
April 7, 2000.
David Goldberger at (202) 482-4136 or Irene Darzenta Tzafolias at (202) 482-0922, Office of Antidumping/Countervailing Duty Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.
On July 23, 1996, the Department of Commerce (the Department) published notice of its final determination of less-than-fair-value (LTFV) investigation of large newspaper printing presses and components thereof, whether assembled or unassembled (LNPP), from Germany.
Following publication of the Department's antidumping duty order, the respondent MAN Roland and the petitioner Goss Graphic System, Inc., filed a lawsuit with the Court of International Trade (CIT) challenging various aspects of the Department's final determination of the LTFV investigation. In its first decision in this case on June 23, 1998,
In a later decision on March 16, 1999,
In sum, as a result of the two remands in this case, the final dumping rate for MAN Roland and its affiliate MAN Plamag has increased from 30.72 percent (the original final LTFV margin for MAN Roland) to 39.53 percent
In its decision in
Import Administration, International Trade Administration, Department of Commerce.
Notice of Initiation of Antidumping New Shipper Review.
The Department of Commerce has received a request to conduct a new shipper review of the antidumping duty order on stainless steel bar from India. In accordance with section 751(a)(2)(B) of the Tariff Act and 19 CFR 351.214(d), we are initiating this review.
April 7, 2000.
Blanche Ziv or Rosa Jeong, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-4207 or (202) 482-3853, respectively.
Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, all references to the Department of Commerce's (“the Department's”) regulations are to 19 CFR Part 351 (April 1999).
On February 18, 2000, the Department received a request from Atlas Stainless Corporation (“Atlas”), pursuant to section 751(a)(2)(B) of the Act, and in accordance with 19 CFR 351.214(b), for a new shipper review of the antidumping duty order on stainless steel bar from India. This order has a February anniversary month. On March 27, 2000, pursuant to the Department's request, Atlas submitted supplemental information regarding the required
In accordance with 19 CFR 351.214(b)(2), Atlas provided certification that it did not export subject merchandise to the United States during the period of investigation; certification that, since the investigation was initiated, it has never been affiliated with any exporter or producer who exported the subject merchandise to the United States during the period of investigation, including those not individually examined during the investigation; documentation establishing: (i) The date on which its stainless steel bar was first entered, or withdrawn from warehouse, for consumption, or if the exporter or producer could not establish the date of first entry, the date on which it first shipped the subject merchandise for export to the United States; (ii) the volume of that and subsequent shipments; and (iii) the date of the first sale to an unaffiliated customer in the United States. Therefore, in accordance with section 751(a)(2)(B)(ii) of the Act and 19 CFR 351.214(d)(1), we are initiating a new shipper review of the antidumping duty order on stainless steel bar from India. We intend to issue the final results of this review not later than 180 days after the date of publication of this notice in the
We will instruct the Customs Service to allow, at the option of the importer, the posting of a bond or security in lieu of a cash deposit, until the completion of the review, for each entry of the merchandise exported by the above listed company, in accordance with 19 CFR 351.214(e). Interested parties must submit applications for disclosure under administrative protective orders in accordance with 19 CFR 351.305 and 351.306.
This initiation and this notice are in accordance with section 751(a) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
In response to a request by the petitioner, the Committee of Domestic Steel Wire Rope & Specialty Cable Manufacturers, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on steel wire rope from Korea. The review covers 14 manufacturers/exporters of the subject merchandise. The period of review is March 1, 1998, through February 28, 1999.
We have preliminarily found that, for certain producers/exporters, sales of subject merchandise have been made below normal value (NV). If these preliminary results are adopted in our final results of this administrative review, we will instruct the Customs Service to assess antidumping duties based on the difference between the export price (EP) and the NV. Also, if these preliminary results are adopted in our final results of this administrative review, we intend to revoke the antidumping duty order with respect to Kumho Wire Rope Manufacturing Company (Kumho), based on three years of sales at not less than NV.
April 7, 2000.
James Kemp, at (202) 482-1276, or Abdelali Elouaradia, at (202) 482-0498, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.
Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR part 351 (1999).
On March 9, 1999, the Department published a notice providing an opportunity to request an administrative review of this antidumping duty order for the period March 1, 1998, through February 28, 1999 (POR).
In early May 1999, in response to our inquiry, the Department was advised by the U.S. Embassy in Seoul that Boo Kook, Hanboo, Kwangshin Rope, and Seo Hae were out of business. We determined, based on data obtained from the Customs Service, that these companies had not exported subject merchandise during the POR. Accordingly, we did not issue antidumping questionnaires to these companies. We issued antidumping questionnaires to the remaining ten respondents.
On June 11, 1999, we received a letter from Dae Kyung stating that it had not exported subject merchandise to the United States during the POR. However, Customs Service data indicated that the company had shipments of subject merchandise during the POR.
On June 21, 1999, we received a letter from Dae Heung stating that it did not export subject merchandise to the United States during the POR.
On June 23, 1999, the Department received a response to the antidumping questionnaire from Kumho. This was the only response filed within the original deadline for the questionnaire. However, on September 8, 1999, Jinyang requested permission to submit a response to the questionnaire. While acknowledging that the deadline for submission of a response had elapsed, Jinyang cited extenuating factors, namely that it had moved its offices and did not receive the questionnaire until
We issued supplemental questionnaires to both respondents, and received timely responses.
On November 2, 1999, we extended the deadline for issuance of the preliminary results until March 30, 2000.
We verified the information submitted by Kumho and Jinyang during the weeks of January 31, and February 7, 2000, in Pusan, Korea.
The product covered by this review is steel wire rope. Steel wire rope encompasses ropes, cables, and cordage of iron or carbon steel, other than stranded wire, not fitted with fittings or made up into articles, and not made up of brass-plated wire. Imports of these products are currently classifiable under the following Harmonized Tariff Schedule (HTSUS) subheadings: 7312.10.9030, 7312.10.9060, and 7312.10.9090. Excluded from this review is stainless steel wire rope,
As noted above, the Department has determined that Boo Kook, Hanboo, Kwangshin Rope and Seo Hae closed their operations prior to the POR, and we have confirmed that none of these companies had shipments of subject merchandise to the United States during the POR. Therefore, in accordance with section 351.213(d)(3) of the Department's regulations, we are rescinding our review with respect to Boo Kook, Hanboo, Kwangshin Rope and Seo Hae. This decision is consistent with the Department's practice.
We are also rescinding our review with respect to Dae Heung. Pursuant to the antidumping duty order on steel wire rope issued after the completion of the investigation, merchandise produced by Dae Heung and sold through Young Heung Iron & Steel Co., Ltd. (YHC) is excluded from the order.
We preliminarily find, in accordance with section 776(a) of the Act, that the use of facts available is appropriate for Dong Il, Dong Young, Korea Sangsa, Myung Jin Company, Sungsan and Yeonsin, since they did not respond to our antidumping questionnaire. We confirmed that theses companies received, but failed to respond to, the Department's questionnaire. Since these companies have not cooperated in providing necessary information for our review, the use of facts available is appropriate.
We also find that the use of facts available is appropriate for Dae Kyung. Although the company responded to our response with a statement that it had no shipments during the POR, we requested additional information on September 28, 1999, because Customs Service data indicated that Dae Kyung did have shipments of subject merchandise. Dae Kyung responded on October 4, 1999, claiming that it only produced stainless steel aircraft cables (i.e. non-subject merchandise). To support this claim, Dae Kyung included sales documents with its letter and argued that the prices on the invoice for the entry in question indicate that the merchandise is stainless steel. However, the documentation does not conclusively establish that the sales were only for stainless products, and we can not infer from price alone that the products were stainless. Because we found that this documentation was inconclusive, on November 3, 1999, and February 18, 2000, we sent two more letters to Dae Kyung requesting additional clarification. We received no response to either of these letters. Dae Kyung has failed, despite repeated requests, to provide additional support for its claim that it only sold non-subject merchandise during the POR. Thus, since we were unable to confirm that Dae Kyung shipped only stainless steel aircraft cables to the United States, and, as such, did not have entries of subject merchandise during the POR, we preliminarily find that the use of facts available is appropriate for Dae Kyung.
Section 776(a)(2)(B) of the Act requires the Department to resort to facts available if necessary information is not available on the record or when an interested party or any other person “fails to provide [requested] information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782.” As provided in section 782(c)(1) of the Act, if an interested party “promptly after receiving a request from [the Department] for information, notifies [the Department] that such party is unable to submit the information requested in the requested form and manner,” the Department may modify the requirements to avoid imposing an unreasonable burden on that party. Because Dong Il, Dong Young, Korea Sangsa, Myung Jin Company, Sungsan and Yeonsin did not provide any notification or information to the Department, and Dae Kyung did not address adequately the issue of its U.S. shipments, nor did it respond to our requests for additional clarification, they have failed to comply with section 782(c)(1) and (e) of the Act. Accordingly, we find preliminarily, in accordance with section 776(a)(2)(B) of the Act, that the use of facts available is appropriate for Dong Il, Dong Young, Korea Sangsa, Myung Jin Company, Sungsan, Yeonsin and Dae Kyung.
Where the Department must resort to facts available because a respondent failed to cooperate to the best of its ability, section 776(b) of the Act authorizes the use of an inference adverse to the interests of that respondent in selecting from among the facts available. The failure of Dong Il, Dong Young, Korea Sangsa, Myung Jin Company, Sungsan and Yeonsin to respond to our antidumping questionnaire, and the failure of Dae Kyung to respond to subsequent requests for information, demonstrate that these companies have not acted to
Section 776(b) of the Act also authorizes the Department to use as adverse facts available information derived from the petition, the final determination in the antidumping investigation, a previous administrative review, or any other information placed on the record. We have preliminarily assigned these seven companies the rate of 136.72 percent, which is the highest rate determined for any respondent in any segment of the proceeding and the rate currently applicable to several of these companies, as adverse facts available. We applied this rate to uncooperative companies in the previous administrative review.
Section 776(c) of the Act provides that the Department shall, to the extent practicable, corroborate secondary information from independent sources reasonably at its disposal. The Statement of Administrative Action (SAA) provides that “corroborate” means simply that the Department will satisfy itself that the secondary information has probative value.
To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used.
The adverse facts available rate being applied in this review is a simple average of all rates from the petition, which was applied to several companies in the prior review. As this rate is currently applicable to several companies and was corroborated to the extent possible in the previous review, we continue to find that it is reliable. To corroborate the EPs in the petition, we examined the Customs Service import statistics from 1991 for the HTSUS subheadings 7312.10.9030, 7312.10.9060, and 7312.10.9090. We concluded that the Customs Service data were not comparable to the prices in the petition, because the Customs Service data encompass a wide range of steel wire rope products, while the sales in the petition consist of a small number of specific product types. With regard to the NVs used in the petition's margin calculation, we were provided with no useful information by interested parties, and are aware of no other independent sources of information, which would assist us in this aspect of the corroboration process. Notwithstanding the difficulties encountered in our attempts to corroborate the information from the petition, the Department has no evidence that suggests the petition does not continue to have probative value. Moreover, the fact that this margin is the rate currently applicable to several of these exporters/producers, and the fact that these exporters/producers neither requested a review or cooperated in demonstrating that their actual margins were lower, indicates that the margin is reliable. If these companies could have demonstrated that their actual margins were lower, we presume that they would have done so.
With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal as to whether there are circumstances that would render a margin not relevant. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin.
As provided in section 782(i) of the Act, we verified information provided by Kumho and Jinyang. We used standard verification procedures, including examination of relevant sales and financial records. Our verification results are outlined in verification reports, dated March 3, 2000, which have been placed on the case file in the Department's CRU.
For sales to the United States, the Department used EP as defined in section 772(a) of the Act for Kumho and Jinyang, because the subject merchandise was sold to unaffiliated U.S. purchasers prior to the date of importation and the use of constructed export price was not otherwise indicated by the facts of record.
We calculated EP based on packed, cost insurance and freight (c.i.f.) and cost and freight (c&f) prices to unaffiliated purchasers in the United States. Where appropriate, we made deductions from the starting price for domestic inland freight, brokerage and handling, ocean freight, marine insurance, terminal handling charges, wharfage expenses, bill of lading issuing fees and container taxes in accordance with section 772(c)(2)(A) of the Act. Based on our findings at verification, for Jinyang, we made adjustments to brokerage, wharfage and international freight expenses.
The merchandise involved in certain U.S. and home market sales reported by Kumho was produced by an unaffiliated Korean supplier. We included these sales by Kumho in our analysis because we determined that for Kumho's U.S. sales the supplier did not know at the time of the sale that the subject merchandise was to be exported to the United States. Pursuant to section 771(16) of the Act, we compared these U.S. sales to the appropriate home market sales of merchandise produced by the same supplier and sold by Kumho.
Kumho and Jinyang claimed a duty drawback adjustment based on a fixed rate amount per U.S. dollar exported. Consistent with our findings in previous reviews of steel wire rope from Korea, we did not allow the duty drawback adjustments claimed by Kumho and Jinyang because the companies did not demonstrate a connection between payment of import duties and receipt of duty drawback on exports of steel wire rope, and because they did not demonstrate that they had sufficient imports of raw materials to account for the duty drawback received on exports of the manufactured product.
We determined that, for both respondents, the aggregate volume of home market sales of the foreign like product was five percent or more of the aggregate volume of U.S. sales. In accordance with section 773(a)(1)(C) of the Act, we therefore based NV on home market sales.
Pursuant to section 777A(d)(2) of the Act, we compared the EPs of individual transactions to the monthly weighted-average price of sales of the foreign like product. We compared EP sales to sales in the home market of identical merchandise.
We based NV on the price at which the foreign like product was first sold for consumption in the exporting country, in the usual commercial quantities, in the ordinary course of trade, and at the same level of trade as the EP, in accordance with section 773(a)(1)(B)(i) of the Act. We increased home market price by the amount of U.S. packing costs in accordance with section 773(a)(6)(A) of the Act, and reduced it by the amount of home market packing costs in accordance with section 773(a)(6)(B) of the Act. We note that for Jinyang we recalculated the reported home and U.S. market packing expense, as a result of the company's failure to fully support the reported packing expenses at verification. During verification, Jinyang was able to provide documentary support for the total packing expenses incurred during the POR. However, the company provided no documentary support for its allocation of packing costs to home market and U.S. sales. Company officials instead relied solely on allocation ratios.
We calculated NV based on delivered and ex-factory prices to unaffiliated customers. Where appropriate, we made adjustments for movement expenses consistent with section 773(a)(6)(B) of the Act. In addition, pursuant to section 773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's regulations, we made circumstance-of-sale adjustments to NV. Specifically, we deducted home market credit expenses and, where appropriate, added U.S. credit expenses, U.S. postage fees, U.S. letter of credit fees, delayed payment charges and document handling charges. Based on our findings at verification, for Jinyang, we made adjustments to U.S. letter of credit fees, U.S. postage fees, delayed payment charges and home market credit expenses, and, for Kumho, we adjusted delayed payment and document handling charges.
For Jinyang, we also made adjustments, in accordance with 19 CFR 351.410(e), for indirect selling expenses incurred on comparison market or U.S. sales where commissions were granted on sales in one market but not in the other (the “commission offset”).
On March 31, 1999, Kumho submitted a letter to the Department requesting, pursuant to 19 CFR 351.222(b), revocation of the order with respect to its sales of the subject merchandise. In accordance with 19 CFR 351.222(b)(2)(iii), Kumho provided with its letter a certification stating that the company: (1) Sold subject merchandise at not less than NV during the POR (and the preceding five reviews), and that in the future it would not sell such merchandise at less than NV; (2) sold the subject merchandise to the United States in commercial quantities during the POR and the last five reviews; and (3) agrees to its immediate reinstatement in the order, if the Department concludes that Kumho, subsequent to revocation, sold merchandise at less than NV.
Based on the preliminary results in this review and the final results of the two preceding reviews, Kumho has preliminarily demonstrated three consecutive years of sales at not less than NV.
Given the results of the two preceding reviews, and the fact that Kumho continues to sell in commercial quantities, if the final results of this review demonstrate that Kumho sold the merchandise at prices not less than NV, and if we determine that the continued application of the antidumping duty order is no longer necessary to offset dumping, we intend to revoke the order with respect to merchandise produced and exported by Kumho.
For purposes of the preliminary results, we made currency conversions in accordance with section 773A of the Act based on the exchange rates published by the Federal Reserve in effect on the dates of the U.S. sales. Section 773A of the Act directs the Department to use a daily exchange rate in effect on the date of sale of subject merchandise in order to convert foreign currencies into U.S. dollars, unless the daily rate involves a “fluctuation.” In accordance with the Department's practice, we have determined as a general matter that a fluctuation exists when the daily exchange rate differs from a benchmark by 2.25 percent. The benchmark is defined as the rolling average of rates for the past 40 business days. When we determine that a fluctuation exists, we substitute the benchmark for the daily rate.
As a result of this review, we preliminarily determine that the following margin exists for the period March 1, 1998, through February 28, 1999:
The Department will disclose the calculations performed to parties to the proceeding within five days of the date of publication of this notice. Any interested party may request a hearing within 30 days of publication of this notice. Any hearing, if requested, will be held 44 days after the publication of this notice, or the first workday thereafter. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Parties who submit arguments in this proceeding are requested to submit with each argument: (1) A statement of the issues; and (2) a brief summary of the argument. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 37 days after the date of publication. The Department will issue a notice of the final results of this administrative review, which will include the results of its analysis of issues raised in any such written comments or at the hearing, within 120 days from the publication of these preliminary results.
The Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to the Customs Service. The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the determination. For Kumho and Jinyang, for duty assessment purposes, we calculated importer-specific assessment rates by aggregating the dumping margins calculated for all U.S. sales to each importer and dividing this amount by the total entered value of total sales. In order to estimate the entered value, we subtracted international movement expenses from the gross sales value. The rate calculated for each importer will be used for the assessment of antidumping duties on the relevant entries of subject merchandise during the POR. Pursuant to 19 CFR 351.106(c)(2), we will instruct the Customs Service to liquidate without regard to antidumping duties all entries for any importer for whom the assessment rate is
As a result of a Sunset Review of steel wire rope from Korea, the Department has revoked the antidumping duty order for this case, effective January 1, 2000.
Entries of subject merchandise made prior to January 1, 2000, will continue to be subject to suspension of liquidation and antidumping duty deposit requirements. The Department will complete any pending reviews of this order and will conduct administrative reviews of subject merchandise entered prior to the effective date of revocation in response to appropriately filed requests for review.
This notice serves as a preliminary reminder to importers of their responsibility to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of amendment of final results of antidumping duty administrative review.
On March 13, 2000, the Department of Commerce (the Department) published the final results of its administrative review of the antidumping duty order on sulfanilic acid from the People's Republic of China covering the period August 1, 1997 through July 31, 1998 (65 FR 13366). Based on the correction of a ministerial error made in the final results, we are publishing this amendment.
April 7, 2000.
Sean Carey or Robert James, Office of AD/CVD Enforcement, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-3964, or (202) 482-0649, respectively.
Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all references to the Department's regulations are to 19 CFR part 351 (1998).
On March 13, 2000, the Department published the final results of its administrative review of the antidumping duty order on sulfanilic acid from the People's Republic of China (65 FR 13366). This review covers two manufacturers/exporters of the subject merchandise, Zhenxing/Mancheng (Zhenxing) and Yude/Xinyu (Yude), for the period August 1, 1997 through July 31, 1998. After publication of our final results, we received timely allegations from respondents that we had made a ministerial error in calculating the final results. No other party commented on the final results. We agree that we made a ministerial error and have corrected our calculations in accordance with section 751 (h) of the Tariff Act.
We received one ministerial error allegation from respondents stating that the Department neglected to revise the surrogate value for electricity in its final calculations of normal value.
As defined by section 751(h) of the Tariff Act, the term “ministerial error” includes errors “in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other type of unintentional error which the [Department] considers ministerial.”
We agree with respondents that the correct surrogate value for electricity in our calculation of normal value should be the non-inflated value of 2.922 rupees per kilowatt-hour as per attachment six of the Department's Analysis Memorandum for the Final
We determine that the following percentage weighted-average margins exist for the period August 1, 1997 through July 31, 1998:
The Department shall determine, and Customs shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), we have calculated exporter/importer-specific assessment rates. With respect to both export price and constructed export price sales, we divided the total dumping margins for the reviewed sales by the total entered value of those reviewed sales for each importer. We will direct Customs to assess the resulting percentage margins against the entered Customs values for the subject merchandise on each of that importer's entries under the relevant order during the review period.
The following amended deposit requirements will be effective upon publication of this notice of amended final results of administrative review for all shipments of sulfanilic acid from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(c) of the Act: (1) the cash deposit rate for Yude/Xinyu and Zhenxing/Mancheng will be the rate shown above; (2) the cash deposit rate for all other PRC exporters (
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing this determination in accordance with sections 751(a)(1) and 777(i) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review: Certain welded carbon steel pipes and tubes from Thailand.
In response to requests by a Thai manufacturer, Saha Thai Steel Company, Ltd. (“Saha Thai”), and two importers, Ferro Union Inc. (“Ferro Union”), and ASOMA Corp. (“ASOMA”), the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on certain welded carbon steel pipes and tubes from Thailand. This review covers Saha Thai Steel Pipe Co., Ltd. (“Saha Thai”), a Thai manufacturer of the subject merchandise to the United States. The period of review (POR) is March 1, 1998, through February 28, 1999.
We have preliminarily determined that the respondent sold subject merchandise at less than normal value (“NV”) during the POR. If these preliminary results are adopted in our final results, we will instruct U.S. Customs to assess antidumping duties based on the differences between the export price and NV.
Interested parties are invited to comment on these preliminary results. Parties who submit argument in this proceeding should also submit with the argument: (1) A statement of the issue; and (2) a brief summary of the argument.
April 7, 2000.
Linda Ludwig or Javier Barrientos, AD/CVD Enforcement Group III, Room 7866, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-3833 and (202) 482-2243, respectively.
Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (“the Act”) by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to those codified at 19 CFR part 351 (1999).
On March 11, 1986, the Department published in the
Because the Department determined that it was not practicable to complete this review within statutory time limits, on December 3, 1999, we published in the
The products covered by this administrative review are certain welded carbon steel pipes and tubes from Thailand. The subject merchandise has an outside diameter of 0.375 inches or more, but not exceeding 16 inches. These products, which are commonly referred to in the industry as “standard pipe” or “structural tubing,” are hereinafter designated as “pipe and tube.” The merchandise is classifiable under the Harmonized Tariff Schedule (HTS) item numbers 7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 7306.30.5085, and 7306.30.5090. Although the HTS subheadings are provided for convenience and Customs purposes, our written description of the scope of the order is dispositive.
As in previous segments of this proceeding, Saha Thai reported invoice date as the date of sale. In order to determine whether invoice date was the appropriate date of sale,
To determine whether sales of steel pipes and tubes from Thailand to the United States were made at less than NV, we compared the export price (EP) to the NV for Saha Thai as specified in the “Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual U.S. transactions.
Saha Thai's reported U.S. sales include both its own sales and sales made by another company of subject merchandise processed by Saha Thai under a tolling agreement. We have included all of these sales in our analysis for these preliminary results. After reviewing the submissions we requested additional information regarding Saha Thai and its relationship with the other company to which it provided tolling services and the degree to which certain costs and expenses incurred by Saha Thai and this other company (
Based upon our review of the record evidence, we classified all Saha Thai sales to United States customers as EP sales because, as in previous segments of this proceeding, we found that Saha Thai is not affiliated with its U.S. distributors, which are the first purchasers in the United States.
Where appropriate, in accordance with section 772(c)(2) of the Act, we made deductions from the starting price for ocean freight to the U.S. port, foreign inland freight, foreign brokerage and handling, foreign inland insurance, bill of lading charge, U.S. duty and U.S. brokerage and handling charges. In addition, pursuant to section 772(c)(1)(B) of the Act, we have made an adjustment for duty drawback.
In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared the volume of Saha Thai's home market sales of the foreign like product to the volume of U.S. sales of subject merchandise, in accordance with section 773(a)(1) of the Act. Based on this comparison, we determined that the aggregate volume of Saha Thai's home market sales of the foreign like product is greater than five percent of the aggregate volume of Saha Thai's U.S. sales. Thus, we determined that Saha Thai had a viable home market during the POR. Consequently, we based NV on home market sales.
We applied the standard arm's length test to Saha Thai's sales to affiliated parties. Therefore, where Saha Thai's sales to affiliated parties were not made at arm's length prices, we excluded these sales from our home market normal value calculation.
Pursuant to section 773(b)(2)(A)(ii) of the Act, there were reasonable grounds to believe or suspect that Saha Thai had made home market sales at prices below its cost of production (“COP”) in this review because the Department had disregarded sales that failed the cost test in the 1996-1997 administrative review (i.e., the most recently completed review at the time we issued our antidumping questionnaire). As a result, the Department initiated an investigation to determine whether Saha Thai made home market sales during the POR at prices below its COP. We calculated the COP based on the sum of respondent's cost of materials and fabrication for the foreign like product, plus amounts for SG&A and packing costs, in accordance with section 773(b)(3) of the Act.
For these preliminary results we are using respondent's reported COP. We have requested additional information about Saha Thai's costs and those of another company for which Saha Thai provided tolling services. We invite parties to comment on this information and will consider this information for the final results.
We compared the COP figures to home market sales of the foreign like product as required under section 773(b) of the Act, in order to determine whether these sales had been made at prices below the COP. On a product-specific basis, we compared the COP to home market prices, less any applicable movement charges and discounts.
In determining whether to disregard home market sales made at prices below the COP, we examined: (1) Whether, within an extended period of time, such sales were made in substantial quantities, and (2) whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of the respondent's sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of the respondent's sales of a given product during the POR were at prices less than the COP, we determined such sales to have been made in substantial quantities within an extended period of time in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act. Therefore, we disregarded the below-cost sales.
Where appropriate, we adjusted Saha Thai's home market sales for discounts, direct selling expenses and inland freight. In addition, in accordance with section 773(a)(6), we deducted home market packing costs and added U.S. packing costs, U.S imputed credit, bank charges, and penalty fees.
In accordance with section 773(e) of the Act, we calculated CV based on the sum of Saha Thai's cost of materials, fabrication, SG&A, profit, and U.S. packing costs. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on the amounts incurred and realized by Saha Thai in connection with the production and sale of the foreign like product in the ordinary course of trade, for consumption in the foreign country. For selling expenses, we used the average of the selling expenses reported for home market sales that passed the cost test, weighted by the total quantity of those sales. For actual profit, we first calculated the difference between the home market sales value and home market COP, and divided the difference by the home market COP. We then multiplied this percentage by the COP for each U.S. model to derive an actual profit.
As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade as the EP or the CEP. The NV level of trade is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive selling, general and administrative expenses and profit. For EP, the U.S. level of trade is the level of the starting-price sale, which is usually from exporter to importer.
To determine whether NV sales are at a different level of trade than EP or CEP, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different level of trade, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison-market sales at the level of trade of the export transaction, we make a level of trade adjustment under section 773(a)(7)(A) of the Act.
For the U.S. market, Saha Thai reported only one level of trade for its EP sales. This single level of trade represents large volume sales to unaffiliated trading companies/distributors in the United States. In the home market, Saha Thai claimed that it made sales at one level of trade. These sales were made to unaffiliated trading companies and distributors (made at the same level of trade as U.S. sales). There are no significant differences in the selling functions Saha Thai performs for these customers in the home market or in the United States. Therefore, we conclude that EP and NV sales are made at the same LOT and no adjustment is warranted.
We made currency conversions into U.S. dollars in accordance with section 773A of the Act, based on exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank. Section 773A(a) of the Act directs the Department to use a daily exchange rate in order to convert foreign currencies into U.S. dollars unless the daily rate involves a fluctuation. It is the Department's practice to find that a fluctuation exists when the daily exchange rate differs from the benchmark rate by 2.25 percent. The benchmark is defined as the moving average of rates for the past 40 business days. When we determine a fluctuation to have existed, we substitute the benchmark rate for the daily rate, in accordance with established practice.
We preliminarily determine that the following weighted-average dumping margins exist:
The Department will disclose to parties to this proceeding within 5 days after publication of these preliminary results. Any interested party may request a hearing within 30 days of publication. Any hearing, if requested, will be held 37 days after the date of publication or the first business day thereafter. Case briefs and/or other written comments from interested parties may be submitted not later than 30 days after the date of publication. Rebuttal briefs and rebuttals to written comments, limited to issues raised in those comments, may be filed not later than 35 days after the date of publication of this notice. The Department will publish the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days from the date of publication of these preliminary results.
The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate
Furthermore, the following deposit rates will be effective upon the publication of the final results of this administrative review for all shipments of certain welded carbon steel pipes and tubes from Thailand entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(c) of the Act: (1) The cash deposit rate for the reviewed company will be that established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, or the original LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; (4) the cash deposit rate for all other manufacturers or exporters will continue to be 15.67 percent, the “All Others” rate made effective by the LTFV investigation. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
These preliminary results of review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of final results of expedited sunset review: Certain carbon steel products from Sweden.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on certain carbon steel products from Sweden (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of the domestic interested parties, as well as inadequate response from respondent interested parties, the Department determined to conduct an expedited (120-day) sunset review. Based on our analysis of the comments received, we find that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy at the levels listed below in the section entitled Final Results of the Review.
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department Policy Bulletin 98:3—
On September 1, 1999, the Department initiated a sunset review of the countervailing duty order on carbon steel products from Sweden (64 FR 47767), pursuant to section 751(c) of the Act. The Department received a notice of intent to participate on behalf of Bethlehem Steel Corporation, Inland Ispat Inc., LTV Steel Company, Inc., National Steel Corporation, and U.S. Steel Group, a unit of USX Corporation (“domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 24, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.
On October 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the
On September 29, 1999, and we received a response from the European Union Delegation of the European Commission (“EC”) expressing its intent to participate in this review as the authority responsible for defending the interest of the Member States of the European Union (
The Department did not receive a substantive response from any foreign producer/exporter of the subject merchandise as defined under section 771(9)(A) of the Act. Thus, pursuant to section 351.218(e)(1)(ii)(A) of the
The Department did not receive rebuttal comments from any interested parties.
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
The scope of this order covers carbon steel products from Sweden. These products include cold-rolled carbon steel, flat-rolled products, whether or not corrugated, or crimped; whether or not pickled, not cut, not pressed and not stamped to non-rectangular shape; not coated or plated with metal and not clad; over 12 inches in width and of any thickness; whether or not in coils. Such merchandise is classifiable under the Harmonized Tariff Schedule (“HTS”) item numbers: 7209.11.0000, 7209.12.0000, 7209.13.0000, 7209.21.0000, 7209.22.0000, 7209.23.0000, 7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000, 7209.41.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7211.30.5000, 7211.41.7000, and 7211.49.5000. The written description remains dispostive.
All issues raised in substantive responses by parties to this sunset review are addressed in the Issues and Decision Memorandum (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Robert S. LaRussa, Assistant Secretary for Import Administration, dated March 29, 2000, which is hereby adopted by this notice. The issues discussed in the attached Decision Memo include the likelihood of continuation or recurrence of subsidy, the net countervailable subsidy likely to prevail were the order revoked, and the nature of the subsidy. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in B-099, the Central Records Unit, of the main Commerce building.
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.
As a result of this review, the Department finds that revocation of the countervailing duty order would likely lead to continuation or recurrence of a countervailable subsidy at the rate listed below for all Swedish producers/exporters, except for Surahammars Bruk AB, which was excluded from the order:
In the
This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing this determination and notice in accordance with sections section 751(c), 752, and 777(i) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of final results of expedited sunset review: Cut-to-length carbon steel plate from Sweden.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on cut-to-length carbon steel plate from Sweden (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of the domestic interested parties, as well as inadequate responses from respondent interested parties, the Department determined to conduct an expedited (120-day) sunset review.
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department Policy Bulletin 98:3—
On September 1, 1999, the Department initiated a sunset review of the countervailing duty order on cut-to-length carbon steel plate from Sweden (64 FR 47767), pursuant to section 751(c) of the Act. The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Corporation, a unit of USX Corporation (“domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 24, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.
On October 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the
On September 29, 1999, we received a response from the European Union Delegation of the European Commission (“EC”) expressing its intent to participate in this review as the authority responsible for defending the interest of the Member States of the European Union (“EU”) (
The Department did not receive a substantive response from any foreign producer/exporter, of the subject merchandise as defined under 771(9)(A) of the Act. Thus, pursuant to section 351.218(e)(1)(ii)(A) of the
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
The scope of this order includes hot-rolled carbon steel universal mill plates (
Included in this order are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (
All issues raised in substantive responses by parties to this sunset review are addressed in the Issues and
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.
We determine that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of the subsidy at the following net countervailable subsidy.
In the
This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing this determination and notice in accordance with sections 751(c), 752, and 777(i) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of Final Results of Expedited Sunset Review: Cut-to-Length Carbon Steel Plate from Spain.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on cut-to-length carbon steel plate from Spain (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of the domestic interested parties, as well as inadequate response from respondent interested parties, the Department determined to conduct an expedited (120-day) sunset review. Based on our analysis of the comments received, we find that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy at the levels listed below in the section entitled Final Results of the Review.
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department Policy Bulletin 98:3—
On September 1, 1999, the Department initiated a sunset review of the countervailing duty order on cut-to-length carbon steel plate from Spain (64 FR 47767), pursuant to section 751(c) of the Tariff Act of 1930, as amended, (“the Act”). The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX Corporation (“domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 20, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.
On October 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the
The Department did not receive a substantive response from any foreign producer/exporter of the subject merchandise as defined under 771(9)(A) of the Act. Thus, pursuant to section 351.218(e)(1)(ii)(A) of the
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
The scope of the order covers cut-to-length carbon steel plate including hot-rolled carbon steel universal mill plates (
All issues raised in substantive responses by parties to this sunset review are addressed in the Issues and Decision Memorandum (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Robert S. LaRussa, Assistant Secretary for Import Administration, dated March 29, 2000, which is hereby adopted by this notice. The issues discussed in the attached Decision Memo include the likelihood of continuation or recurrence of subsidy and the net countervailable subsidy likely to prevail were the order revoked. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in B-099, the Central Records Unit, of the main Commerce building.
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memorandum are identical in content.
We determine that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of the subsidy at the following net countervailable subsidy.
In the
This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing this determination and notice in accordance with sections 751(c), 752, and 777(i) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
Notice of final results of expedited sunset review: Cut-to-length carbon steel plate from the United Kingdom.
On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on cut-to-length carbon steel plate from the United Kingdom (“UK”) (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of the domestic interested parties, as well as inadequate response from respondent interested parties, the Department determined to conduct an expedited (120-day) sunset review. Based on our analysis of the comments received, we find that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy at the levels listed below in the section entitled Final Results of Review.
April 7, 2000.
Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1930 or (202) 482-1560, respectively.
Unless otherwise indicated, all citations to the Act are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department Policy Bulletin 98:3—
On September 1, 1999, the Department initiated a sunset review of the countervailing duty order on cut-to-length carbon steel plate from the UK (64 FR 47767), pursuant to section 751(c) of the Tariff Act of 1930, as amended, (“the Act”). The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX Corporation (“domestic interested parties”), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the
On September 20, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.
On September 29, 1999, we received a response from the European Union Delegation of the European Commission (“EC”) expressing its intent to participate in this review as the authority responsible for defending the interest of the Member States of the European Union (“EU”) (
On October 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the
The Department did not receive a substantive response from any foreign producer/exporter, or the U.S. importer of the subject merchandise as defined under 771(9)(A) of the Act. Thus, pursuant to section 351.218(e)(1)(ii)(A) of the
In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (
The scope of this order includes hot-rolled carbon steel universal mill plates (
All issues raised in substantive responses by parties to this sunset review are addressed in the
In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.
We determine that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of a subsidy at the following net countervailable subsidy.
In the
This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing this determination and notice in accordance with sections 751(c), 752, and 777(i) of the Act.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Receipt of applications to modify scientific research permits (900, 1116, 1141, 1152, 1156, 1212).
Notice is hereby given that NMFS has received applications for permit modifications from: the Northwest Fisheries Science Center, NMFS at Seattle, WA (NWFSC)(900, 1212), Douglas County Public Utility District No. 1 at East Wenatchee, WA (DCPUD)(1116), Grant County Public Utility District No. 2 at Ephrata, WA (GCPUD)(1141), Oregon Department of Fish and Wildlife at LaGrande, OR (ODFW)(1152), and the U.S. Environmental Protection Agency at Corvallis, OR (USEPA)(1156).
Comments or requests for a public hearing on any of these modification requests must be received at the appropriate address or fax number no later than 5:00pm Pacific standard time on May 8, 2000.
Written comments on any of the modification requests should be sent to Protected Resources Division, F/NWO3, 525 NE Oregon Street, Suite 500, Portland, OR 97232-2737. Comments may also be sent via fax to 503-230-5435. Comments will not be accepted if submitted via e-mail or the internet. The applications and related
Documents may also be reviewed by appointment in the Office of Protected Resources, F/PR3, NMFS, 1315 East-West Highway, Silver Spring, MD 20910-3226 (301-713-1401).
For permits 900, 1152, and 1156: Leslie Schaeffer, Portland, OR (ph: 503-230-5433, fax: 503-230-5435, e-mail: Leslie.Schaeffer@noaa.gov).
For permits 1116, 1141, and 1212: Robert Koch, Portland, OR (ph: 503-230-5424, fax: 503-230-5435, e-mail: Robert.Koch@noaa.gov).
Issuance of permits and permit modifications, as required by the Endangered Species Act of 1973 (16 U.S.C. 1531-1543) (ESA), is based on a finding that such permits/modifications: (1) Are applied for in good faith; (2) would not operate to the disadvantage of the listed species which are the subject of the permits; and (3) are consistent with the purposes and policies set forth in section 2 of the ESA. Authority to take listed species is subject to conditions set forth in the permits. Permits and modifications are issued in accordance with and are subject to the ESA and NMFS regulations governing listed fish and wildlife permits (50 CFR parts 222-226).
Those individuals requesting a hearing on a modification request listed in this notice should set out the specific reasons why a hearing on that request would be appropriate (see
The following species, evolutionarily significant units (ESU's), and runs are covered in this notice:
Chinook salmon (
Coho salmon (
Sockeye salmon (
Steelhead (
To date, final protective regulations for threatened PS and UWR chinook salmon and SnR, MCR, and LCR steelhead under section 4(d) of the ESA have not been promulgated by NMFS. Protective regulations are currently proposed for PS and UWR chinook salmon (65 FR 169, January 3, 2000) and SnR, MCR, and LCR steelhead (64 FR 73479, December 30, 1999). This notice of receipt of applications requesting takes of these species is issued as a precaution in the event that NMFS issues final protective regulations. The initiation of a 30-day public comment period on the applications, including their proposed takes of PS and UWR chinook salmon and SnR, MCR, and LCR steelhead does not presuppose the contents of the eventual final protective regulations.
On March 22, 2000, NMFS published a notice in the
DCPUD requests a modification to permit 1116, which authorizes annual takes of juvenile naturally produced and artificially propagated UCR steelhead associated with five research studies. The purpose of Study 1 is to determine the survival and migration differences of juvenile fish as they pass downstream through Lake Pateros and Wells Dam on the Columbia River. The purpose of Study 2 is to understand the status of juvenile salmonid migration at Wells Dam by verifying hydroacoustic accuracy. For Study 2, ESA-listed juvenile fish are collected in fyke nets and sacrificed as a means to estimate the number of unguided fish at the dam. The purpose of Study 3 is to inventory the fish species in Wells Reservoir on the Columbia River. The purpose of Study 4 is to assess the survival of juvenile, artificially propagated, UCR steelhead as they pass Wells Dam. The purpose of Study 5 is to evaluate the relative benefits of passive integrated transponder (PIT) and radio tag technologies. The results from the research will be used to enhance the survival of emigrating smolts and improve the operation of the fish passage facilities at Wells Dam. For the modification, DCPUD requests a lethal take of juvenile naturally produced and artificially propagated UCR spring chinook salmon associated with the conduct of Study 2. The modification is requested to be valid for the duration of permit 1116, which expires on December 31, 2002.
GCPUD requests a modification to permit 1141, which authorizes annual takes of adult and juvenile, naturally produced and artificially propagated, UCR steelhead associated with four scientific research studies at or in the vicinity of Wanapum and Priest Rapids Dams located on the upper Columbia River in Washington. The purpose of Study 1 is to monitor outmigrating adult and juvenile steelhead condition, survival, and travel time relative to spill effectiveness at the dams. The purpose of Study 2 is to substantiate and document hydroacoustic accuracy at Wanapum Dam. The purpose of Study 3 is to evaluate the relative abundance of the fish fauna inhabiting the Priest Rapids project area. The purpose of Study 4 is to assess the survival of juvenile, artificially propagated, UCR steelhead as they migrate past Wanapum and Priest Rapids Dams. For Study 4, ESA-listed juvenile steelhead are collected with dip nets at the dam gatewells, anesthetized, tagged with radiotransmitters, allowed to recover, released downstream, and tracked
ODFW requests a modification to permit 1152, which authorizes annual takes of adult and juvenile naturally produced and artificially propagated SnR spring/summer chinook salmon associated with 5 scientific research studies conducted in the Grande Ronde and Imnaha River Basins in the state of OR: (1) Spring chinook salmon spawning ground surveys, (2) a spring chinook salmon early life history study, (3) habitat and fish inventory surveys, (4) passage and irrigation screening evaluations, and (5) residual hatchery steelhead monitoring. For the modification, ODFW requests an increase in the annual take of juvenile artificially propagated SnR spring/summer chinook salmon associated with Study 2. Production levels for juvenile artificially propagated SnR spring/summer chinook salmon have increased for 2000, 2001 and 2002. ODFW also proposes to apply temporary marks to juvenile artificially propagated SnR spring/summer chinook salmon to determine trap efficiencies. An associated increase in ESA-listed juvenile fish indirect mortalities is also requested. The modification is requested to be valid for the duration of permit 1152, which expires on December 31, 2002.
USEPA requests a modification to permit 1156, which authorizes annual takes of juvenile SONCC coho salmon, juvenile SnR fall chinook salmon, and juvenile naturally produced and artificially propagated SnR spring/summer chinook salmon associated with research designed to collect data used to enforce the Clean Water Act which will increase the recovery potential of ESA-listed species in various rivers in the Pacific Northwest. For the modification, USEPA requests an annual take of juvenile naturally produced and artificially propagated UCR spring chinook salmon, juvenile naturally produced and artificially propagated PS chinook salmon, juvenile UWR chinook salmon, juvenile SnR steelhead, juvenile naturally produced and artificially propagated UCR steelhead, juvenile MCR steelhead, and juvenile LCR steelhead. ESA-listed juvenile fish are proposed to be captured using electrofishing, examined, and released. USEPA also requests an increase in the annual take of juvenile SnR fall chinook salmon and juvenile naturally produced and artificially propagated SnR spring/summer chinook salmon. The modification is requested to be valid for the duration of permit 1156, which expires on December 31, 2002.
On March 21, 2000, NMFS published a notice in the
Commodity Futures Trading Commission.
Notice of proposed new Chicago Mercantile Exchange Rule 526 to establish block trading procedures and request for comment.
The Chicago Mercantile Exchange (“CME” or “Exchange”) has submitted proposed new Rule 526 to the Commodity Futures Trading Commission (“Commission”) that would establish block trading procedures at the Exchange. Under these procedures, qualified market participants would be allowed to negotiate and arrange futures transactions of a minimum size bilaterally away from the centralized, competitive market. Once the specific terms of the block transaction have been agreed to, the counterparties would report the relevant details of the transaction to a designated Exchange official for clearing and settlement. The CME is seeking to allow block trading in its Five-Year and Ten-Year Agency Note futures contracts on a one-year pilot program basis. This proposal is the second contract market proposal that the Commission has received that would allow block trading.
Acting pursuant to the authority delegated by Commission Regulation 140.96(b), the Division of Trading and Markets (“Division”) has determined to publish the CME's proposal for public comment. The Division believes that publication of the proposal is in the public interest and will assist the Commission in considering the views of interested persons.
Comments must be received on or before April 24, 2000.
Comments should be submitted to Jean A. Webb, Secretary,
David P. Van Wagner, Associate Director, Division of Trading and Markets, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581. Telephone (202) 418-5430.
On June 4, 1999, the Commission issued an Advisory on Alternative Execution, or Block Trading, Procedures for the Futures Industry.
After the issuance of the Advisory, in September of 1999, the New York Board of Trade, on behalf of the Cantor Financial Futures Exchange, Inc. (“CX”), submitted proposed new rules and rule amendments to the Commission that would establish block trading procedures at the CX
By letters dated February 25, 2000, through March 23, 2000, the CME submitted proposed new Rule 526 to the Commission pursuant to Section 5a(a)(12(A) of the Act and Commission Regulation 1.41(c). Proposed CME Rule 526 would establish block trading procedures at the Exchange whereby qualified market participants would be allowed to negotiate and arrange futures transactions of a minimum size bilaterally away from the centralized, competitive market. Once the specific terms of the block transaction have been agreed to, the counterparties would report the relevant details of the transaction to a designated Exchange official for clearing and settlement. Thus, under the proposed procedures, certain futures transactions could be executed noncompetitively rather than through the Exchange's open outcry trading platform or through its GLOBEX2 electronic trading system.
At the present time, the only contracts that would be eligible for the CME's proposed block trading procedures are its Five-year and Ten-Year and Ten-Year Agency Note futures contracts.
Proposed CME Rule 526 would restrict block trading to those market participants that qualify as an “eligible participant” as that term is defined by Commission regulation 36.1. In addition, each block order must include specific instructions that such order is to be executed pursuant to the proposed block trading procedures.
In connection with block trades entered into by a commodity trading advisor (“CTA”) on behalf of its customers, and provided that certain registration and financial conditions are satisfied,
Under proposed CME Rule 526, each buy or sell order underlying a block trade must satisfy the applicable minimum size requirement as determined by the CME's Board of Directors or by a Committee appointed by the Board. In the case of the CME's Five-year and Ten-Year Agency Note futures contracts, the minimum threshold will be 200 contracts.
The price at which a block trade is executed must be “fair and reasonable” in light of the following factors: (1) The size of such block trade; (2) the prices and sizes of other transactions in the same contract at the relevant time; (3) the prices and sizes of transactions in other relevant markets; including the underlying cash and futures markets, at the relevant time; and (4) the circumstances of the parties to the block trade.
Each block trade must be reported to a designated Exchange within five minutes of the time of execution.
The Commission request comment from interested persons concerning any aspects of the CME's proposed block trading procedures.
Copies of the CME's proposed new Rule 526 and related materials are available for inspection at the Office of the Secretariat, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Copies also may be obtained through the Office of the Secretariat at the above address or by telephoning (202) 418-5100.
Notice.
The Corporation for National and Community Service (hereinafter “Corporation”), as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95) (44 U.S.C. 3506(c)(2)(A)). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirement on respondents can be properly assessed.
Currently, the Corporation is soliciting comments concerning the proposed revision of two forms:
•
•
Copies of the forms can be obtained by contacting the office listed below in the
Written comments must be submitted to the office listed in the
Send comments to the Corporation for National and Community Service, National Service Trust, Attn: Ms. Natalie Burch, 8th Floor, 1201 New York Avenue, N.W., Washington, D.C., 20525.
Natalie Burch, (202) 606-5000, ext. 159.
The Corporation is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Corporation, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Corporation for National and Community Service supports programs that provide opportunities for individuals who want to become involved in national service. The service opportunities cover a wide range of activities over varying periods of time. Upon successfully completing an agreed-upon term of service in an AmeriCorps program, an AmeriCorps participant receives an “education award”. This education award can be used to make a payment towards a qualified student loan or pay for educational expenses at qualified post-secondary institutions and approved school-to-work opportunities programs. This award is an amount of money set aside in the AmeriCorps member's name in the National Service Trust Fund. Members have seven years in which to draw against any unused balance.
The National Service Trust is the office within the Corporation that administers the education award program. This involves:
• Tracking the service for all AmeriCorps members;
• Ensuring that the requirements of the Corporation's enabling legislation are met, vis-a-vis the education award;
• Processing school and loan payments that the members authorize; and
• Processing payments for the interest that accrues on certain qualified student loans during the member's service period.
The Corporation has been using several versions of the two forms contained in this Notice since the AmeriCorps program began in 1994. The Corporation proposes to ask the Office of Management and Budget (OMB) for permission to renew each form in basically the same format as the forms currently in use. The current forms are due to expire on June 30, 2000.
The Corporation's
The Enrollment Form is the beginning-of-service counterpart to the Corporation's
Submission of the
Several versions of both forms have been used since the AmeriCorps program began in 1994.
In 1999, the Corporation began using an electronic system to both enroll and exit AmeriCorps members. Many local projects can enter into a database information about their members' enrollment and completion of service. This data is transferred to the Trust
Currently, more than half of the nation's AmeriCorps programs use this system. The Corporation would like to have all programs use it, since it ultimately speeds up both collecting information and issuing education awards to members who have successfully completed their terms of service. However, many AmeriCorps programs, especially smaller ones, do not have the technological resources to afford the computer hardware and software.
The Corporation does not want to exclude any competent, otherwise qualified organizations from participating as a sponsor, so it is possible that there may always be a small number of organizations that will use forms. A separate discussion of each form follows.
Currently, AmeriCorps members use a form entitled
The program information is used to:
• Make liability projections for the Trust Fund;
• Verify national service participation when requested by a lender who holds an AmeriCorps member's student loan (members are eligible to have the repayment of certain student loans postponed if they are participating in national service),
• Plan and monitor programs (review recruiting efforts, identify programs with excessive early termination rates, establish and reconcile program's budgets)
The demographic information is used for recruiting purposes and to provide the Corporation, program managers, and the Congress with demographic data on AmeriCorps members.
In requesting permission for renewal of this form, the Corporation does not propose making any changes to the version currently in use.
The Corporation's End of Term/Exit form is the means by which AmeriCorps programs certify that a member has, or has not, successfully satisfied conditions which must be met in order to receive an education award. When an AmeriCorps member successfully completes a term of national service, a designated program official certifies that the service was completed and the individual is eligible for an education award. The End of Term/Exit form is the document upon which this certification is recorded. Additional information requested on the form includes the member's service completion date, the current address where the education award documentation should be mailed, and two questions regarding the member's desire for post service information.
The Corporation proposes to eliminate the ten evaluation questions that are on the form currently being used. The Corporation's Evaluation Division has decided that relevant evaluation data will be collected through surveys.
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.
Office of the Surgeon General, DoD.
Notice of partially-closed meeting.
In accordance with section 10(a)(2) of Public Law 92-463, The Federal Advisory Committee Act, this announces the forthcoming AFEB meeting. This Board will meet from 0730-1600 on Tuesday, 30 May, and 0730-1300 on Wednesday, 31 May 2000. The purpose of the meeting is to address pending and new Board issues, provide briefings for Board members on topics related to ongoing and new Board issues conduct subcommittee meetings, conduct an executive working session, and to have a classified AFEB update on the DoD Immunization Program for Biological Warfare Defense in accordance with DoD Directive 6205.3. The meeting location will be at USAMRIID, Fort Detrick, Frederick, Maryland. This meeting will be open to the public on 30 May, but limited by space accommodations. The meeting will be closed to the public on 31 May in accordance with Section 552b(c) of Title 5, U.S.C., specifically subparagraph (1) thereof and Title 5, U.S.C., appendix 1, subsection 10(d). Any interested person may attend, appear before or file statements with the committee at the time and in the manner permitted by the committee.
COL Benedict Diniega, AFEB Executive Secretary, Armed Forces Epidemiological Board, Skyline Six, 5109 Leesburg Pike, Room 682, Falls Church, Virginia 22041-3258, (703) 681-8012/4.
None.
Picatinny Arsenal, New Jersey, DoD.
Notice.
The Department of the Army announces that unless there is objection, in sixty days it will grant an Exclusive license to Bulova Technologies, L.L.C,, 101 North Queen Street, Lancaster, Pennsylvania 17604-4787, on U.S. Army Patent Application serial number 09/511,641 filed on February 22, 2000, Army docket number DAR-63-99, entitled “Improved Self Destruct Fuze For Munitions” by Louis J. Adimari, Joseph A. Donini, Keith R. Fulton, Marc E. Ball, Edward F. Cooper, John R. Hertzier, and John C. Yoo, together with all foreign counterpart patent applications, and all U.S. and worldwide patents resulting therefrom.
Mr. John Moran, Chief, Intellectual Property Law Division, AMSTA-AR-GCL, U.S. Army TACOM-ARDEC, Picatinny Arsenal, NJ 07806-5000, telephone (973) 724-6590.
Written objections must be filed within 60 days from publication date of this notice in the
U.S. Army Research Laboratory, Adelphi, Maryland, DoD.
Notice.
In accordance with 37 CFR 404.6, announcement is made of the availability of the following U.S. patent for non-exclusive, partially exclusive or exclusive licensing. The listed patent has been assigned to the United States of America as represented by the Secretary of the Army, Washington, DC.
This patent covers a wide variety of technical arts including: An improved liquid explosive composition of nitromethane, a nitromethane sensitizer and an energetic compound.
Under the authority of Section 11(a)(2) of the Federal Technology Transfer Act of 1986 (Public Law 99-502) and Section 207 of Title 35, United States Code, the Department of the Army as represented by the U.S. Army Research Laboratory wish to license the U.S. patent listed below in a non-exclusive, exclusive or partially exclusive manner to any party interested in manufacturing, using, and/or selling devices or processes covered by this patent.
Michael Rausa, Technology Transfer Office, AMSRL-CS-TT, U.S. Army Research Laboratory, Aberdeen Proving Ground, MD 21005-5055 tel: (410) 278-5028; fax: (410) 278-5820.
None.
U.S. Army, DoD.
Notice of intent.
The U.S. Army CERDEC's Night Vision & Electronic Sensors Directorate (NVESD) has filed for a patent on a Pseudo-Monolithic Laser with an Intracavity Optical Parametric Oscillator. This is to announce that we are now seeking licensing partners for this technology, which has direct applications to military rangefinders as well as other commercial purposes. The laser was designed for simplicity and has no moving parts and few optical components. It can be tuned/manufactured to laze at three discrete frequencies. The design makes innovative use of existing flash bulb circuitry found in disposable cameras as the power source for the devices. The design is exceptionally small and compact. There is a plan for initial procurement of rangefinders utilizing this laser which will be announced separately. Other uses of this device include: ophthalmology applications; due to the precision of the beam it may also lend itself to applications in computer chip processing; and applications in surveying instruments. Due to the numerous applications of this technology the NVESD invites companies to consider Cooperative Research and Development Agreements for developing applications of this technology to their product lines. A preliminary design review package and license application for the required patent is available from NVESD. If interested please request information and respond with the required documents within 30 days.
Karen Gordon, U.S. Army (CERDEC) Night Vision & Electronic Senors Directorate, ATTN: AMSEL-RD-NV-OPS, 10221 Burbeck Road, Fort Belvoir, Virginia 22060-5806, Telephone: (703) 704-2279.
None.
U.S. Army Corps of Engineers, Department of Defense.
Notice of intent.
The purpose of the EIS is to address alternatives and impacts pertaining to reallocation of water storage at John Redmond Lake, Kansas.
Questions or comments concerning the proposed action should be addressed to Mr. David L. Combs, Chief, Environmental Analysis and Compliance Branch, 1645 South 101st East Avenue, Tulsa, Oklahoma 74128-4629, telephone 918-669-7660, e-mail: David L. Combs@usace.army.mil.
John Redmond Lake was authorized by the Flood Control Act approved May 17, 1950, Public Law 81-516a; Project Document HD 442, 80th Congress, 2d Session. Public Law 85-327, dated February 15, 1958, changed the project name from Strawn Dam to John Redmond Dam and Reservoir. It is located on the Grand (Neosho) River at river mile 343.7, about 3 miles northwest of Burlington in Coffey County, Kansas. Project purposes include flood control, water supply, water quality, and recreation. Closure of the embankment was completed in September 1963 and the project was completed for full flood control operation in September 1964.
In 1975, the state of Kansas and the Federal government entered into a water supply agreement for an estimated 34,900 acre-feet of storage remaining after 50 years of sedimentation. After the agreement was signed, it was determined that sediment was entering the lake unevenly from what had been predicted. Over time, sedimentation in the lake has changed the amount of storage the lake has for flood control, water supply and other purposes. Storage available for water supply purposes in the lake has been depleted by sediment distribution such that the water supply agreement obligations are being infringed upon.
Most of the sediment deposited in the lake pool has been below elevation 1039.0 (top of conservation pool), National Geodetic Vertical Datum (NGVD). Based on the Corps sediment surveys for 1964-1993, it was predicted that adequate storage would be available below elevation 1068.0 feet NGVD (top of flood control pool) at the end of the economic life of the project (Year 2014) to meet all authorized project purposes. However, the top of the conservation pool should ultimately be established at a higher elevation to reapportion equitably the storage between the conservation and flood control pools.
When a lake is designed, each pool (flood control, conservation, sediment) is designed to capture a proportionate amount of sediment. In the case of John Redmond, the sediment load has been as predicted; however, the sediment is accumulating in the conservation pool while the flood control pool has experienced less than expected sedimentation losses.
The reallocation study and EIS will focus on ways to accommodate for the uneven distribution of sediment within the lake and evaluate a number of alternatives. Alternatives presently identified include the no action plan, which follows the current operational practices and another alternative to raise the lake's conservation pool to accommodate for sediment buildup. This alternative includes a 2-foot pool rise with the intentions of raising the conservation pool to elevation 1040.0 feet NGVD and using a phased pool raise of the remaining one-foot, in one-half foot pool increments.
The EIS will evaluate the effects of alternatives on the authorized project purposes and other identified concerns. Significant issues to be addressed in the EIS include: (1) potential impacts to the Flint Hills National Wildlife Refuge; (2) impacts on recreation and recreation facilities; (3) impacts on structure of the dam; (4) impacts on fish and wildlife resources within and also above and below the lake; (5) impacts on downstream flows on the Neosho River; and (6) other impacts identified by the public, agencies, or Corps studies.
Scoping meetings for the project are planned to be conducted in March and April 2000. News releases informing the public and local, state, and Federal agencies of the proposed action will be published in local newspapers. Comments received as a result of this notice and the news releases will be used to assist the Tulsa District in identifying potential impacts to the quality of the human or natural environment. Affected local, state, or Federal agencies, affected Indian tribes, and other interested private organizations and parties may participate in the Scoping process by forwarding written comments to the above noted address or attending Scoping meetings.
The draft EIS (DEIS) is expected to be available for public review and comment by September 2001. Any comments and suggestions should be forwarded to the above noted address no later than June 1, 2000, to be considered in the DEIS.
Department of Education.
Correction and Extension notice.
On March 17, 2000, a notice inviting applications for new awards for FY 2000 was published in the
This notice also extends the deadline for transmittal of application as follows:
April 24, 2000.
May 24, 2000.
Socorro Lara, U.S. Department of Education, 400 Maryland Ave., SW Room 5086, Switzer Building, Washington, DC 20202-6510. Telephone: (202) 205-9730. E-mail address: socorro_lara@ed.gov.
Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Services (FIRS) at 1-800-877-8330.
Individuals with disabilities may obtain this document in an alternate format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed in the preceding paragraph. Please, note, however, that the Department is not able to reproduce in an alternate format the standard forms included in the notice.
You may review this document, as well as all other Department of Education documents published in the
To use the PDF you must have the Adobe Acrobat Reader Program with Search, which is available free at either of the preceding sites. If you have questions about using the PDF, call the U.S. Government Printing Office toll free at 1-888-293-6498 or in the Washington, DC area at (202) 512-1530.
The official version of this document is the document published in the
Program Authority
Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Biological and Environmental Research Advisory Committee. Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of these meetings be announced in the
Thursday, April 27, 2000, 8:30 a.m. to 5 p.m.; and Friday, April 28, 2000, 8:30 a.m. to 12 p.m.
American Geophysical Union, 2000 Florida Avenue, N.W., Washington, D.C. 20009.
Dr. David Thomassen (301-903-9817; david.thomassen@science.doe.gov), or Ms. Shirley Derflinger (301-903-0044; shirley.derflinger@science.doe.gov), Designated Federal Officers, Biological and Environmental Research Advisory Committee, U.S. Department of Energy, Office of Science, Office of Biological and Environmental Research, SC-70, 19901 Germantown Road, Germantown, Maryland 20874-1290. The most current information concerning this meeting can be found on the website: http://www.sc.doe.gov/production/ober/berac.html.
Department of Energy.
Notice of Open Meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Los Alamos. The Federal Advisory Committee Act (Pub. L. No. 92-463, 86 Stat. 770) requires that public notice of these meetings be announced in the
Wednesday, April 26, 2000, 6 p.m.-9 p.m.
Hotel Loretto, 211 Old Santa Fe Trail, Santa Fe, NM.
Ann DuBois, Northern New Mexico Citizens' Advisory Board, 1640 Old Pecos Trail, Suite H, Santa Fe, NM 87505. Phone:505-989-1662; Fax: 505-989-1752; E-mail:
Other Board business will be conducted as necessary.
Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Pantex Plant, Amarillo, Texas. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of these meetings be announced in the
Tuesday, April 25, 2000; 1 p.m.-5 p.m.
The Wellington Room, I-40 & Georgia, Amarillo, Texas.
Jerry S. Johnson, Assistant Area Manager, Department of Energy, Amarillo Area Office, P.O. Box 30030, Amarillo, TX 79120 (806) 477-3125.
Availability of EPA comments prepared March 20, 2000 Through March 24, 2000 pursuant to the Environmental Review Process (ERP), under Section 309 of the Clean Air Act and Section 102(2)(c) of the National Environmental Policy Act as amended. Requests for copies of EPA comments can be directed to the Office of Federal Activities at (202) 564-7167. An explanation of the ratings assigned to draft environmental impact statements (EISs) was published in FR dated April 09, 1999 (63 FR 17856).
Environmental Protection Agency (EPA).
Notice.
This notice announces the initial filing of a pesticide petition proposing the establishment of regulations for residues of certain pesticide chemicals in or on various food commodities.
Comments, identified by docket control number PF-933, must be received on or before May 8, 2000.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I.C. of the “SUPPLEMENTARY INFORMATION.” To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-933 in the subject line on the first page of your response.
By mail: Treva C. Alston, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-8373; and e-mail address: alston.treva@epa.gov.
You may be affected by this action if you are an agricultural producer, food manufacturer or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the “FOR FURTHER INFORMATION CONTACT” section.
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You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-933 in the subject line on the first page of your response.
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Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified under “FOR FURTHER INFORMATION CONTACT.”
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Make sure to submit your comments by the deadline in this notice.
7. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
EPA has received a pesticide petition as follows proposing the establishment and/or amendment of regulations for residues of certain pesticide chemicals in or on various food commodities under section 408 of the Federal Food, Drug, and Comestic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that this petition contains data or information regarding the elements set forth in section 408(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
Environmental protection, Agricultural commodities, Feed additives, Food additives, Pesticides and pests, Reporting and recordkeeping requirements.
The petitioner summary of the pesticide petition is printed below as required by section 408(d)(3) of the FFDCA. The summary of the petition was prepared by the petitioner and represents the views of the petitioner. EPA is publishing the petition summary verbatim without editing it in any way. The petition summary announces the availability of a description of the analytical methods available to EPA for the detection and measurement of the pesticide chemical residues or an explanation of why no such method is needed.
EPA has received a pesticide petition (OE6100) from Ecolab Inc., 370 N. Wabasha Street, St. Paul, MN 55102 proposing, pursuant to section 408(d) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180 to establish an exemption from the requirement of a tolerance for 1,2-ethanediamine, polymer with oxirane and methyloxirane (EDPOM) in or on raw agricultural commodities, in processed commodities, and in or on meat and meat by products of cattle, sheep, hogs, goats, horses, and poultry, milk, and dairy products, eggs, seafood and shellfish, and fruits and vegetables when such residues result from the use of EDPOM as a component of a food contact surface sanitizing solution for use in food handling establishments. The request is for an unlimited clearance. EPA has determined that the petition contains data or information regarding the elements set forth in section 408(d)(2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition.
This is a high molecular weight alkoxylated amine polymer. No residue chemistry data or environmental fate data are presented in the petition as the Agency does not generally require some or all of the listed studies to rule on the exemption from the requirement of a tolerance for an inert ingredient.
The Agency has established a set of criteria, which identifies categories of polymers that present low risk. These criteria (described in 40 CFR 723.250) identify polymers that are relatively unreactive and stable compounds compared to other chemical substances as well as polymers that typically are not readily absorbed. These properties generally limit a polymer's ability to cause adverse effects. The Agency believes that polymers meeting the criteria noted above will present minimal or no risk. Ecolab Inc. believes that EDPOM conforms to the definition of a polymer given in 40 CFR 723.250 and meets the following criteria used to identify a low risk polymer.
1. EDPOM is not a cationic polymer, nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment.
2. EDPOM contains as an integral part of its composition the atomic elements carbon, nitrogen, hydrogen and oxygen.
3. EDPOM does not contain as an integral part of its composition, except as impurities, any element other than those listed in 40 CFR 723.250(d)(2)(ii).
4. EDPOM is not designed, nor is it reasonably anticipated to substantially degrade, decompose or depolymerize prior to, during, or after use.
5. EDPOM is not manufactured or imported from monomers and/or reactants that are not included on the Toxic Substances Control Act (TSCA) substance inventory or manufactured under an applicable TSCA section 5 exemption.
6. EDPOM is not a water absorbing polymer.
7. EDPOM has an minimum-average molecular weight of 25,000. Substances with molecular weights greater than 400 generally are not absorbed through the intact skin, and substances with molecular weights greater than 1,000 generally are not absorbed through the gastrointestinal (GI) tract. Chemicals not absorbed through the skin or GI tract generally are incapable of eliciting a toxic response.
8. EDPOM has a minimum-average molecular weight of 25,000. EDPOM meets the requirements for molecular weight distribution of oligomer contents of less than 25% with molecular weights below 1,000 and less than 10% with molecular weights below 500.
Ecolab Inc. believes that sufficient information has been submitted to assess the hazards of EDPOM. No toxicology data are being submitted as the Agency does not generally require these data to rule on exemptions from the requirement of a tolerance for an inert ingredient. Because EDPOM conforms with the definition of a polymer and meets the criteria of a polymer under 40 CFR 723.250, Ecolab Inc. believes there are no concerns for risks associated with toxicity.
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The amount of EDPOM exposure resulting from indirect exposure to sanitizing solutions will be miniscule. EDPOM is a high molecular weight alkoxylated amine polymer that is not absorbed by the body. EDPOM in the diet poses no cumulative toxicological risk. Ecolab Inc. believes that sufficient information has been submitted to assess the hazards of EDPOM. Because EDPOM conforms with the definition of a polymer and meets the criteria of a polymer under 40 CFR 723.250, Ecolab Inc. believes there are no concerns for risks associated with cumulative effects.
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No Codex Maximum Residue Levels have been established for EDPOM.
Environmental Protection Agency (EPA).
Notice.
This notice announces the initial filing of pesticide petitions proposing the establishment of regulations for residues of certain pesticide chemicals in or on various food commodities.
Comments, identified by docket control number PF-932, must be received on or before May 8, 2000.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I.C. of the “SUPPLEMENTARY INFORMATION.” To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-932 in the subject line on the first page of your response.
By mail: Treva C. Alston, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-8373; e-mail address: alston.treva@epa.gov.
You may be affected by this action if you are an agricultural producer, food manufacturer or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under “FOR FURTHER INFORMATION CONTACT.”
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2.
You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-932 in the subject line on the first page of your response.
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2
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Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified under “FOR FURTHER INFORMATION CONTACT.”
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Make sure to submit your comments by the deadline in this notice.
7. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
EPA has received pesticide petitions as follows proposing the establishment and/or amendment of regulations for residues of certain pesticide chemicals in or on various food commodities under section 408 of the Federal Food, Drug, and Comestic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that this petition contains data or information regarding the elements set forth in section 408(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the petition. Additional data may be needed before EPA rules on the petition.
Environmental protection, Agricultural commodities, Feed additives, Food additives, Pesticides and pests, Reporting and recordkeeping requirements.
The petitioner summary of the pesticide petition is printed below as required by section 408(d)(3) of the FFDCA. The summary of the petition was prepared by the petitioner and represents the view of the petitioners. EPA is publishing the petition summary verbatim without editing it in any way. The petition summary announces the availability of a description of the
EPA has received a pesticide petition (PP 9E6028) from Ecolab Inc., 370 N. Wabasha Street, St. Paul, MN 55102 proposing, pursuant to section 408(d) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180 to establish an exemption from the requirement of a tolerance for urea in or on raw agricultural commodities, in processed commodities, and in or on meat and meat by products of cattle, sheep, hogs, goats, horses, and poultry, milk, and dairy products, eggs, seafood and shellfish, and fruits and vegetables when such residues result from the use of urea as a component of a food contact surface sanitizing solution for use in food handling establishments. The request is for an unlimited clearance. EPA has determined that the petition contains data or information regarding the elements set forth in section 408(d)(2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition.
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Well over 99% of the exposure to urea is expected to be via natural sources in the diet and through endogenous generation. Potentially small amounts of urea exposure will be the result of non-food uses. The amount of urea exposure resulting from indirect exposure to sanitizing solutions will be miniscule. Since urea in the diet poses no toxicological risk, the cumulative toxicity resulting from this additional exposure is negligible.
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No codex maximum residue levels have been established for urea.
EPA has received a pesticide petition (9E6029) from Ecolab Inc., proposing, pursuant to section 408(d) of FFDCA, 21 U.S.C. 346a(d), to amend 40 CFR part 180 to establish an exemption from the
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Well over 99% of the exposure to nitric acid/nitrate is expected to be via natural sources in the diet and drinking water. Trace amounts of nitric acid/nitrate exposure may result from non-food uses. The amount of nitric acid/nitrate exposure resulting from indirect exposure to sanitizing solutions will be virtually zero. Since nitric acid/nitrate in the diet poses little toxicological risk, the cumulative toxicity resulting from this additional exposure to hard surface sanitizers is negligible.
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No Codex maximum levels have been established for nitric acid.
Environmental Protection Agency (EPA).
Notice.
This notice announces the initial filing of a pesticide petition proposing the establishment of regulations for residues of certain pesticide chemicals in or on various food commodities.
Comments, identified by docket control number PF-930, must be received on or before May 8, 2000.
Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit I.C. of the “SUPPLEMENTARY INFORMATION.” To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-930 in the subject line on the first page of your response.
By mail: Thomas C. Harris, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, Ariel Rios Bldg., 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-9423; e-mail address: harris.thomas@epa.gov.
You may be affected by this action if you are an agricultural producer, food manufacturer or pesticide manufacturer. Potentially affected categories and entities may include, but are not limited to:
This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in the table could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether or not this action might apply to certain entities. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under “FOR FURTHER INFORMATION CONTACT.”
1.
2.
You may submit comments through the mail, in person, or electronically. To ensure proper receipt by EPA, it is imperative that you identify docket control number PF-930 in the subject line on the first page of your response.
1
2
3.
Do not submit any information electronically that you consider to be CBI. You may claim information that you submit to EPA in response to this document as CBI by marking any part or all of that information as CBI. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public version of the official record. Information not marked confidential will be included in the public version of the official record without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified under “FOR FURTHER INFORMATION CONTACT.”
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Provide specific examples to illustrate your concerns.
6. Make sure to submit your comments by the deadline in this notice.
7. To ensure proper receipt by EPA, be sure to identify the docket control number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
EPA has received a pesticide petition as follows proposing the establishment and/or amendment of regulations for residues of certain pesticide chemical in or on various food commodities under section 408 of the Federal Food, Drug, and Comestic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that this petition contains data or information regarding the elements set forth in section 408(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition.
Environmental protection, Agricultural commodities, Feed additives, Food additives, Pesticides and pests, Reporting and recordkeeping requirements.
The petitioner summary of the pesticide petition is printed below as required by section 408(d)(3) of the FFDCA. The summary of the petition was prepared by the petitioner and represents the view of the petitioner. EPA is publishing the petition summary verbatim without editing it in any way. The petition summary announces the availability of a description of the analytical methods available to EPA for the detection and measurement of the pesticide chemical residues or an explanation of why no such method is needed.
EPA has received a pesticide petition (PP 9F5047) from Novartis Crop Protection, Inc., P.O. Box 18300, Greensboro, NC 27419 proposing, pursuant to section 408(d) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180 by establishing a tolerance for residues of abamectin (avermectin B
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EPA has established the RfD for abamectin at 0.0012 mg/kg/day from a 2-generation reproduction study in rats. The developmental NOAEL is 0.12 mg/kg/day, and the developmental LOAEL is 0.40 mg/kg/day based on decreased pup body weight and viability during lactation, and increased incidence of retinal rosettes in F2b weanlings. An uncertainty factor of 100 to account for interspecies extrapolation (10x) and intraspecies variability (10x) was recommended. EPA has also retained the 10x safety factor for infants and children resulting in an RfD of 0.00012 mg/kg/day for appropriate population dietary exposure analysis for abamectin in the most exposed population (non-nursing infants <1-year old) shows the percent RfD utilization to be only 20.0%. For the average U.S. population (48 contiguous states), dietary exposure for abamectin shows a minimal utilization of 9.4% of the RfD.
Novartis believes the estimates of abamectin exposure in water derived from the PRZM-EXAMS model are overstated for several reasons. The PRZM-EXAMS model was designed to estimate exposure from ecological risk assessments and thus use a scenario of a body of water approximating the size of a 1 hectare (2.5 acres) pond. This tends to overstate drinking water exposure levels for the following reasons.
a. Surface water source drinking water generally comes from bodies of water that is substantially larger than a 1 hectare (2.5 acres) pond.
b. The modeled scenario also assumes that essentially the whole basin receives an application of the pesticide. Yet in virtually all cases, basins large enough to support a drinking water facility will contain a substantial fraction of the area which does not receive pesticide.
c. There is often at least some flow in a river or turnover in a reservoir or lake of water persistence to the pesticide near the drinking water facility is usually over estimated.
d. Even assuming a reservoir is directly adjacent to an agricultural field, the agricultural field may not be used to grow a crop on which the pesticide in question is registered for use.
e. The PRZM-EXAMS modeled scenario does not take into account reductions in residue loading due to applications of less than the maximum application rate or no treatment of the crop at all (percent crop treated data).
Although there is a high degree of uncertainty to this analysis, this is the best available estimate of concentrations of abamectin in drinking water. Although the peak EEC of 0.88 ug/L slightly exceeds the acute DWLOC, 0.76 ug/L, considering the uncertain nature of the modeling estimate, Novartis does not expect aggregate acute exposure to avermectin will pose an unacceptable risk to human health.
Section 408(b)(2)(D)(v) requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency considers “available information” concerning the cumulative effects of a particular pesticide residue and “other substances that have a common mechanism of toxicity.” EPA stated in the FR notice published on April 7, 1999, that it does not have at this time available data to determine whether avermectin has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment.
It is the opinion of Novartis that the use of a full 10x safety factor to address risks to infants and children is not necessary. The established chronic endpoint for abamectin in the neonatal rat is overly conservative. Similar endpoints for ivermectin are not used by the Food and Drug Administration to
Codex has established an abamectin Maximum Residue Level of 0.02 ppm for peppers. The fruiting vegetable tolerance of 0.02 ppm for abamectin is harmonized with Codex.
Environmental Protection Agency.
Notice; request for public comment.
In accordance with Section 122(i) of the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (“CERCLA”), 42 U.S.C. 9622(i), and Section 7003(d) of the Resource Conservation and Recovery Act (“RCRA”), notification is hereby given of a proposed administrative agreement concerning the Solvent Recovery Corporation (“Respondent”) at 100 South 1st Street, Kansas City, Kansas (“Site”). Under the agreement, the Respondent agrees to perform response actions in connection with the release and threatened release of hazardous substances at the Site. Respondent will remove and properly dispose of several thousand containers of waste, contaminated soil, and a 20,000 gallon tank of material. The Respondent agrees to pay oversight costs incurred by the U.S. EPA pursuant to an Administrative Order on Consent (“Order”) dated March 16, 2000. The settlement includes a covenant not to sue the settling party pursuant to Section 106 and 107(a) of CERCLA, 42 U.S.C. 9606 and 9607(a) for past response costs incurred by EPA in connection with the Site, which total approximately $60,000. This covenant not to sue shall take effect when all actions required by the Order have been completed and EPA has notified the Respondent, in writing, that the actions required by the Order have been completed.
For thirty (30) days following the date of publication of this notice, the Agency will receive written comments relating to the settlement. The Agency will consider all comments received and may modify or withdraw its consent to the settlement if comments received disclose facts or considerations which indicate that the settlement is inappropriate, improper, or inadequate. The Agency's response to any comments received will be available for public inspection at the Kansas City, Kansas, Public Library, 625 Minnesota, Kansas City, Kansas 66101, and Office of Regional Hearing Clerk, EPA, 901 North 5th Street, Kansas City, KS 66101. Commenters may request an opportunity for a public meeting in the affected area in accordance with Section 7003(d) of RCRA, 42 U.S.C. 6973(d).
Comments must be submitted on or before May 8, 2000.
The proposed settlement is available for public inspection at Office of Regional Hearing Clerk, Environmental Protection Agency, 901 N. 5th Street, Kansas City, KS 66101. A copy of the proposed settlement may be obtained from Kathy Robinson, Regional Hearing Clerk, EPA, 901 N. 5th Street, Kansas City, KS 66101, telephone 913-551-7567. Comments should reference the Solvent Recovery Corporation, Kansas City, Kansas, Docket No. CERCLA 7-2000-0014 and Docket No. RCRA7-2000-0027 and should be addressed to Regional Hearing Clerk, EPA, 901 N. 5th Street, Kansas City, KS 66101.
Kristina Gonzales, Assistant Regional Counsel, EPA, 901 N. 5th Street, Kansas City, KS 66101, telephone: 913-551-7245.
The Federal Communications Commission, as part of its continuing effort to reduce paperwork burden invites the general public and other Federal agencies to take this opportunity to comment on the following information collection(s), as required by the Paperwork Reduction Act of 1995, Public Law 104-13. An agency may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act (PRA) that does not display a valid control number. Comments are requested concerning (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimate; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.
Written comments should be submitted on or before June 6, 2000. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all comments to Judy Boley, Federal Communications Commission, Room 1-C804, 445 12th Street, SW, DC 20554 or via the Internet to jboley@fcc.gov.
For additional information or copies of the information collection(s), contact Judy Boley at 202-418-0214 or via the Internet at jboley@fcc.gov.
The Federal Communications Commission, as part of its continuing effort to reduce paperwork burden invites the general public and other Federal agencies to take this opportunity to comment on the following information collection(s), as required by the Paperwork Reduction Act of 1995, Public Law 104-13. An agency may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act (PRA) that does not display a valid control number. Comments are requested concerning (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimate; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.
Written comments should be submitted on or before June 6, 2000. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all comments to Les Smith, Federal Communications Commission, Room 1 A-804, 445 Twelfth Street, S.W., Washington, DC 20554 or via the Internet to lesmith@fcc.gov.
For additional information or copies of the information collections contact Les Smith at (202) 418-0217 or via the Internet at lesmith@fcc.gov.
Federal Communications Commission.
Notice.
This document gives notice of a jointly filed petition for reconsideration of the Order on Reconsideration of the Fourth Report and Order in WT Docket No. 97-82 and sets an expedited schedule for filing oppositions.
Oppositions are due April 17, 2000.
Interested parties who choose to file by paper must file an original and four copies of their filing with the Office of the Secretary, Federal Communications Commission, TW B204, 445 12th Street, SW, Washington, DC 20554. In addition, parties should send two copies to Audrey Bashkin, Legal Branch, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 12th St. SW Washington, DC 20554, and one copy to ITS, at 1231 20th Street, NW, Washington, D.C. 20036.
Audrey Bashkin at (202) 418-0660. The fax number is (202) 418-0890.
This is a summary of a Public Notice released April 5, 2000. The complete text of the public notice is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW, Washington, D.C. 20554. It may also be purchased from the Commission's copy contractor, International Transcription Services, Inc. (ITS, Inc.) 1231 20th Street, NW, Washington, D.C. 20036, (202) 857-3800. It is also available on the Commission's web site at
1. Notice is hereby given that the parties listed have jointly petitioned the Commission for reconsideration of the Order on Reconsideration of the Fourth
2. In light of the auction schedule for the upcoming PCS C and F block auction (“Auction No. 35”), and the requests of certain commenters that the Commission resolve all issues related to Auction No. 35 in an expedited manner, the Wireless Telecommunications Bureau (“Bureau”) has determined that good cause exists in this instance to alter the periods specified in § 1.429 of the Commission's rules for oppositions to petitions for reconsideration. Preliminary review of the petition indicates that it raises issues regarding the eligibility of certain parties to participate in Auction No. 35. To provide timely guidance to prospective bidders, we must close the record on reconsideration issues on an expedited schedule. We note also that there are pending petitions for reconsideration on spectrum cap issues. Accordingly, oppositions to petitions for reconsideration of the
3. The petition listed reflects Commission records as of April 4, 2000. Any timely filed petitions subsequently posted on the Electronic Comment Filing System (ECFS), or received in paper form, will be subject to a filing schedule for oppositions similar to that adopted herein. In addition, the record of comments and other documents filed in response to the petitions of Nextel Communications, Inc. and SBC Communications Inc. regarding PCS C and F block rules will be incorporated into this docket.
4. Parties submitting oppositions should address the petitions for reconsideration in light of the requirements of 47 U.S.C. 309, 47 CFR 1.429 and any other public interest considerations. All oppositions should reference the docket number of this proceeding,
5. This proceeding has been designated as a “permit-but-disclose” proceeding in accordance with the Commission's
6. Parties may obtain the
7. Oppositions to petitions for reconsideration may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. Oppositions filed through the ECFS can be sent as an electronic file via the Internet to
8. This list reflects the Commission's records as of April 4, 2000 of parties that have petitioned the Commission for reconsideration of the
Petitions for Reconsideration and Clarification have been filed in the Commission's rulemaking proceeding listed in this Public Notice and published pursuant to 47 CFR Section 1.429(e). The full text of these documents are available for viewing and copying in Room CY-A257, 445 12th Street, SW, Washington, DC or may be purchased from the Commission's copy contractor, ITS, Inc. (202) 857-3800. Oppositions to this petition must be filed by April 24, 2000. See Section 1.4(b)(1) of the Commission's rules (47 CFR 1.4(b)(1)). Replies to an opposition must be filed within 10 days after the time for filing oppositions has expired.
Petitions for Reconsideration have been filed in the Commission's rulemaking proceedings listed in this Public Notice and published pursuant to 47 CFR Section 1.429(e). The full text of these documents are available for viewing and copying in Room CY-A257, 445 12th Street, S.W., Washington, DC or may be purchased from the Commission's copy contractor, ITS, Inc. (202) 857-3800. Oppositions to this petition must be filed by April 24, 2000. See Section 1.4(b)(1) of the Commission's rules (47 CFR 1.4(b)(1)). Replies to an opposition must be filed within 10 days after the time for filing oppositions has expired.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States. Additional information on all bank holding companies may be obtained from the National Information Center website at www.ffiec.gov/nic/.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than May 1, 2000.
A. Federal Reserve Bank of Boston (Richard Walker, Community Affairs Officer) 600 Atlantic Avenue, Boston, Massachusetts 02106-2204:
1. SI Bancorp, Willimantic, Connecticut; to become a bank holding company by acquiring 100 percent of the voting shares of Savings Institute, Willimantic, Connecticut.
B. Federal Reserve Bank of New York (Betsy Buttrill White, Senior Vice President) 33 Liberty Street, New York, New York 10045-0001:
1. Niagara Bancorp, MHC, Lockport, New York, and Niagara Bancorp, Inc, Lockport, New York; to acquire 100 percent of the voting shares, and thereby merge with CNY Financial Corporation, Cortland, New York, and thereby indirectly acquire Cortland Savings Bank, Cortland, New York.
C. Federal Reserve Bank of Minneapolis (JoAnne F. Lewellen, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:
1. Business Bancorporation, Inc., Minnetonka, Minnesota; to become a bank holding company by acquiring 100 percent of the voting shares of The Business Bank, Minnetonka, Minnesota.
D. Federal Reserve Bank of San Francisco (Maria Villanueva, Consumer Regulation Group) 101 Market Street, San Francisco, California 94105-1579:
1. Dai-Ichi Kangyo Bank, Limited, Tokyo, Japan; indirectly through Dai-Ichi Kangyo Fuji Trust & Banking Co., Ltd., Tokyo, Japan; to acquire 100 percent of the voting shares of DKF Trust Company (USA), New York, New York.
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR Part 225) to engage
Each notice is available for inspection at the Federal Reserve Bank indicated. The notice also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the question whether the proposal complies with the standards of section 4 of the BHC Act. Additional information on all bank holding companies may be obtained from the National Information Center website at www.ffiec.gov/nic/.
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than April 21, 2000.
A. Federal Reserve Bank of New York (Betsy Buttrill White, Senior Vice President) 33 Liberty Street, New York, New York 10045-0001:
1. TrustCo Bank Corp NY, Schenectady, New York; to acquire Landmark Financial Corp., Canajoharie, New York, and thereby indirectly acquire Landmark Community Bank, and thereby engage in operating a savings association, pursuant to § 225.28 (b)(4)(ii) of Regulation Y. Comments regarding this application must be received not later than May 1, 2000.
2. Banco Bilbao Vizcaya Argentaria, S.A., Bilbao, Spain; to acquire Argentaria International Securities Inc., New York, New York, and thereby engage in securities brokerage services; riskless principal transactions; and private placement services, pursuant to § 225.28(b)(7) of Regulation Y.
10 a.m., Wednesday, April 12, 2000.
Marriner S. Eccles Federal Reserve Board Building, 20th and C Streets, N.W., Washington, DC 20551
Closed.
1. Personnel actions (appointments, promotions, assignments, reassignments, and salary actions) involving individual Federal Reserve System employees.
2. Any matters carried forward from a previously announced meeting.
Lynn S. Fox, Assistant to the Board; 202-452-3204.
You may call 202-452-3206 beginning at approximately 5 p.m. two business days
Administration on Aging (AoA), DHHS.
The Administration on Aging (AoA), Department of Health and Human Services, is submitting the following proposal for the collection of information in compliance with the Paperwork Reduction Act (Public Law 96-511): Title VI Program Performance Reports.
There were no responses to the 60-day notice.
Requests for a copy of the above mentioned Program Performance Report call M. Yvonne Jackson, Director, Office for American Indian, Alaskan Native and Native Hawaiian Programs, Administration on Aging, 330 Independence Avenue, SW, Washington, DC 20201; telephone (202) 619-2713. Written comments and recommendations regarding the Program Performance Report should be sent within 30 days of the publication of this notice to the following address: Office of Information and Regulatory Affairs, Attention: Allison Eydt, OMD Desk Officer, Office of Management and Budget, Washington, DC 20503.
Centers for Disease Control and Prevention (CDC), National Institute for Occupational Safety and Health (NIOSH), Department of Health and Human Services (DHHS).
Notice.
This notice announces the criteria and standard test procedure that are being used by NIOSH for the evaluation of applications for approval of breath responsive powered air-purifying respirators (PAPRs).
Mr. Sam Terry, Team Leader, Respirator Certification Team, Respirator Branch, Division of Respiratory Disease Studies, NIOSH, 1095 Willowdale Road, Morgantown, West Virginia 26505, Telephone (304) 285-5907.
A breath responsive powered air-purifying respirator (PAPR) is designed to deliver filtered air to the user upon demand in order to match the respiratory requirements of the user. The requirements for the evaluation of PAPRs under Title 42, Code of Federal Regulations, part 84, do not address these design features. In accordance with 42 CFR 84.60 and 84.63, and the past practice of NIOSH, the Institute will evaluate a breath responsive PAPR submitted for approval under the requirements for PAPRs in 42 CFR part 84 that are applicable to its design. Design features of breath responsive PAPRs that cannot be addressed under the present PAPR standards will be evaluated under additional test procedures established to determine the quality, effectiveness and safety of the respirator. Since there is no applicable test for breath responsive PAPRs in the PAPR requirements, the Institute has determined that the airflow resistance for breath responsive PAPRs will be evaluated under the requirements of 42 CFR 84, subpart J, § 84.157, for pressure-demand supplied air respirators. For the convenience of the reader, § 84.157 is republished as follows:
(a) The static pressure in the facepiece shall not exceed 38 mm. (1.5 inches) of water-column height.
(b) The pressure in the facepiece shall not fall below atmospheric at inhalation airflows less than 115 liters (4 cubic feet) per minute.
(c) The exhalation resistance to a flow of air at a rate of 85 liters (3 cubic feet) per minute shall not exceed the static pressure in the facepiece by more than 51 mm. (2 inches) of water-column height.
NIOSH has developed Standard Test Procedure APRS-STP-0065-00 which can adequately test the quality, effectiveness and safety of this type of design feature. Copies of this procedure are available upon request.
Administration for Children, Youth and Families, ACF, DHHS.
Correction.
This document contains a correction to the Notice that was published in the
On page 10799, the County column mistakenly lists the following counties in Iowa: Des Moines County, Ida County, Lee County, Louisa County, Lyon County, Monroe County, Sioux
On page 10803 the State column mistakenly lists Nuckolls. Nuckolls is a county in Nebraska and should appear in the county column. The county is currently being served and is not open for competition to new Early Head Start programs.
On page 10804, in New York State, Westchester County, in the community column it should read “excluding White Plains, New York.” The County is being served, except for White Plains. Only White Plains is open to competition for new Early Head Start programs.
On page 10806, for Rhode Island, Bristol County, the community of Barrington should be added to the communities of Bristol and Warren. In Rhode Island, Providence County, the City of Cranston and the towns of E. Providence and Central Falls should be added to the towns of: Burrillville, Johnston, N. Providence, Smithfield, N. Smithfield, Glocester, Scituate and Foster. All these communities are currently being served and are not open for competition to new Early Head Start programs.
On page 10808, in Texas, in the County column, Tarran is mispelled and should be corrected to read Tarrant County. This county is currently being served and is not open to competition to new Early Head Start programs.
The ACYF Operations Center at 1-800-351-2293 or send an email to
This Notice amends Part K of the Statement of Organization, Functions and Delegations of Authority of the Department of Health and Human Services (DHHS), Administration for Children and Families (ACF) as follows: Chapter KC, Administration on Developmental Disabilities (ADD), 56 FR 42338, dated August 27, 1991. This Notice reflects a revised ADD mission statement to reflect current legislative references and a realignment of functions within the Office of ADD.
I. Delete KC.00 Mission in its entirety and replace with the following:
KC.00 Mission. The Administration on Developmental Disabilities (ADD) advised the Secretary, through the Assistant Secretary for Children and Families, on matters relating to individuals with developmental disabilities and their families. ADD serves as the focal point in the Department to support and encourage the provision of quality services to individuals with developmental disabilities and their families. ADD assists states, through the design and implementation of a comprehensive and continuing state plan, in increasing the independence, productivity and community inclusion of individuals with developmental disabilities. These state plans make optimal use of existing federal and state resources for the provision of services and supports to these individuals and their families to achieve these outcomes. ADD works with states to ensure that the rights of all individuals with developmental disabilities are protected.
ADD administers two formula grant programs, State Developmental Disabilities Councils and Protection and Advocacy Systems, and two discretionary grant programs, University Affiliated Programs and Projects of National Significance, including Family Support. These programs support the provision of services to individuals with developmental disabilities and their families. In concert with other components of ACF as well as other public, private, and voluntary sector partners, ADD develops and implements research, demonstration and evaluation strategies for discretionary funding of activities designed to improve and enrich the lives of individuals with developmental disabilities. In addition, ADD serves as a resource in the development of policies and programs to reduce or eliminate barriers experienced by individuals with developmental disabilities through the identification of promising practices and dissemination of information. ADD supports and encourages programs or services, which prevent developmental disabilities and manages initiatives involving the private and voluntary sectors that benefit individuals with developmental and other disabilities and their families.
II. Delete KC.10 Organization in its entirety and replace with the following:
KC.10 Organization. The Administration on Development Disabilities is headed by a Commissioner who reports directly to the Assistant Secretary for Children and Families. The Administration on Developmental Disabilities consists of:
III. Delete KC.20 Functions in its entirety and replace with the following:
KC.20 Functions. A. The Office of the Commissioner (OC) serves as the principal advisor to the Assistant Secretary for Children and Families, the Secretary, and other elements of the Department for individuals with developmental disabilities. OC provides executive direction and management strategy to ADD's components and establishes goals and objectives for ADD programs. The Deputy Commissioner assists the Commissioner in carrying out the responsibilities of the Office and acts as Commissioner in the absence of the Commissioner. The Staff within the office of the Commissioner plans, coordinates and controls ADD policy, planning, and management activities which include the development of legislative proposals, regulations and policy issuances for ADD. The Staff manages the formulation and execution of the program and operating budgets; provides administrative, personnel and information systems support services; serves as the ADD Executive Secretariat controlling the flow of correspondence; and coordinates with appropriate ACF components in implementing administrative requirements and procedures. The staff also coordinates interagency collaboration, program outreach, and convenor functions.
In coordination with the ACF Office of Public Affairs, OC develops a strategy for increasing public awareness of the needs of individuals with developmental disabilities and programs designed to address them.
B. Division of Program Operations (POD) is responsible for the coordination, management, and evaluation of the State Developmental Disabilities Councils Program and the Protection and Advocacy Grants Program, including the development of procedures and performance standards that ensure compliance with the Developmental Disabilities Assistance and Bill of Rights (DD) Act and improve the outcomes of Developmental Disabilities Councils and Protection and Advocacy Systems in increasing the independence, productivity and
The Division conducts routine and special analyses of state plans under the Basic State Grants Program, including an examination of priority area activities, to assure consistent application of ADD program goals and objectives. The Division conducts reviews of programs to ensure compliance with the DD Act and to improve program outcomes; and identifies and disseminates information regarding excellence in advancing the independence, productivity and community inclusion of people with developmental disabilities.
The Division initiates, executes, and supports the development of interagency, intergovernmental, and public-private sector agreements, committees, task forces, commissions, or joint funding efforts as appropriate.
The Division provides program and administrative guidance to regional offices on matters related to the implementation of the DD Act; and ensures timely and effective communication with the regional offices regarding program compliance, policy clarification, and the approval of required state plans and reports.
C. Division of Program Development (PDD) manages the discretionary grants and contracts mandated by the DD Act, and provides program development services. PDD originates cross-cutting research, demonstration and evaluation initiatives with other components of ADD, ACF, HHS, and other government agencies; and manages discretionary grants and contracts and assists in monitoring and evaluating discretionary grants at the national level.
The Division plans for and implements experimental program services based on advice from state and local organizations on program needs. The Division formulates and prepares annual demonstration and evaluation plans, coordinates and administers the University Affilatied Programs (UAP's) activities, and develops quality assurance criteria for the UAP Program.
The Division develops and initiates guidelines, policy issuances and actions with team participation by other components of ADD, ACF, HHS, and other government agencies to fulfill the mission and goals of the DD Act, as amended. The Division ensures the dissemination of project results and information produced by ADD grantees.
The Division coordinates national program trends with other ACF programs and HHS agencies; and studies, reviews and analyzes other federal programs providing services applicable to persons with developmental disabilities for the purpose of integrating and coordinating program efforts.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that the proposed collection of information listed below has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995 (PRA).
Submit written comments on the collection of information by May 8, 2000.
Submit written comments on the collection of information to the Office of Information and Regulatory Affairs, OMB, New Executive Office Bldg., 725 17th St. NW., rm. 10235, Washington, DC 20503, Attn: Wendy Taylor, Desk Officer for FDA.
Karen L. Nelson, Office of Information Resources Management (HFA-250), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-1482.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
On November 21, 1997, the President signed into law the FDA Modernization Act (the Modernization Act) (Public Law 105-115). Section 116 of the Modernization Act amended the Federal Food, Drug, and Cosmetic Act (the act) by adding section 506A (21 U.S.C. 356a), which describes requirements and procedures for making and reporting manufacturing changes to approved new drug applications (NDA's) and abbreviated new drug applications (ANDA's), to new and abbreviated animal drug applications, and to license applications for biological products.
The guidance provides recommendations to holders of approved NDA's and ANDA's who intend to make postapproval changes in accordance with section 506A of the act. The guidance covers recommended reporting categories for postapproval changes for drugs, other than specified biotechnology and specified synthetic biological products. Recommendations are provided for postapproval changes in: (1) Components and composition, (2) sites, (3) manufacturing process, (4) specification(s), (5) package, (6) labeling, and (7) miscellaneous changes.
Section 116 of the Modernization Act amended the act by adding section 506A, which includes the following provisions:
1. A drug made with a manufacturing change, whether a major manufacturing change or otherwise, may be distributed only after the applicant validates the effects of the change on the identity strength, quality, purity, and potency of the drug as these factors may relate to the safety or effectiveness of the drug (section 506A(a)(1) and (b) of the act). This section recognizes that additional testing, beyond testing to ensure that an approved specification is met, is required to ensure unchanged identity, strength, quality, purity, or potency as these factors may relate to the safety or effectiveness of the drug.
2. A drug made with a major manufacturing change may be distributed only after the applicant submits a supplement application to FDA and the supplemental application is approved by the agency. The application is required to contain information determined to be appropriate by FDA and include the information developed by the applicant when “validating the effects of the change” (section 506A(c)(1) of the act).
3. A major manufacturing change is a manufacturing change determined by FDA to have substantial potential to adversely affect the identity, strength, quality, purity, or potency of the drug as these factors may relate to the safety or effectiveness of the drug. Such changes include: (1) A change made in the qualitative or quantitative formulation of the drug involved or in the specifications in the approved application or license unless exempted by FDA by regulation or guidance; (2) a change determined by FDA by regulation or guidance to require
4. FDA may require submission of a supplemental application for drugs made with manufacturing changes that are not major (section 506A(d)(1)(B) of the act) and establish categories of manufacturing changes for which a supplemental application is required (section 506A(d)(1)(C) of the act). In such a case the applicant may begin distribution of the drug 30 days after FDA receives a supplemental application unless the agency notifies the applicant within the 30-day period that prior approval of the application is required (section 506A(d)(3)(B)(i) of the act). FDA may also designate a category of manufacturing changes that permit the applicant to begin distributing a drug made with such changes upon receipt by the agency of a supplemental application for the change (section 506A(d)(3)(B)(ii)of the act). If FDA disapproves a supplemental application, the agency may order the manufacturer to cease the distribution of drugs that have been made with the disapproved change (section 506A(d)(3)(B)(iii) of the act).
5. FDA may authorize applicants to distribute drugs without submitting a supplemental application (section 506A(d)(1)(A) of the act) and may establish categories of manufacturing changes that may be made without submitting a supplemental application (section 506A(d)(1)(C) of the act). The applicant is required to submit a report to FDA on such a change and the report is required to contain information the agency deems to be appropriate and information developed by the applicant when validating the effects of the change. FDA also may specify the date on which the report is to be submitted (section 506A(d)(2)(A) of the act). If during a single year an applicant makes more than one manufacturing change subject to an annual reporting requirement, FDA may authorize the applicant to submit a single report containing the required information for all the changes made during the year (annual report) (section 506A(d)(2)(B) of the act).
Section 506A of the act provides FDA with considerable flexibility to determine the information and filing mechanism required for the agency to assess the effect of manufacturing changes in the safety and effectiveness of the product. There is a corresponding need to retain such flexibility in the guidance on section 506A of the act to ensure that the least burdensome means for reporting changes are available. FDA believes that such flexibility will allow it to be responsive to increasing knowledge of and experience with certain types of changes and help ensure the efficacy and safety of the products involved. For example, a change that may currently be considered to have a substantial potential to have an adverse effect on the safety or effectiveness of the product may, at a later date, based on new information or advances in technology, be determined to have a lesser potential to have such an adverse effect. Conversely, a change originally considered to have a minimal or moderate potential to have an adverse effect on the safety or effectiveness of the product may later, as a result of new information, be found to have an increased, substantial potential to adversely affect the product. The guidance enables the agency to respond more readily to knowledge gained from manufacturing experience, further research and data collection, and advances in technology. The guidance describes the agency's current interpretation of specific changes falling into the four filling categories. Section 506A of the act explicitly provides FDA the authority to use guidance documents to determine the type of changes that do or do not have a substantial potential to adversely affect the safety or effectiveness of the drug product. The use of guidance documents allows FDA to more easily and quickly modify and update important information.
FDA estimates the burden of this collection of information as follows:
Section 506A(a)(1) and (b) of the act requires the holder of an approved application to validate the effects of a manufacturing change on the identity, strength, quality, purity, or potency of the drug as these factors may relate to the safety or effectiveness of the drug before distributing a drug made with the change. Under section 506A(d)(3)(A) of the act, information developed by the applicant to validate the effects of the change regarding identity, strength, quality, purity, and potency is required to be submitted to FDA as part of the supplement or annual report. Thus, no separate estimates are provided for these sections in table 1 of this document; estimates for validation requirements are included in the estimates for supplements and annual reports. The guidance does not provide recommendations on the specific information that should be developed by the applicant to validate the effect of the change on the identity, strength (e.g., assay, content uniformity), quality (e.g., physical, chemical, and biological properties), purity (e.g., impurities and degradation products), or potency (e.g., biological activity, bioavailability, bioequivalence) of a product as they may relate to the safety or effectiveness of the product.
Section 506A(c)(1) and (c)(2) of the act sets forth requirements for changes requiring supplement submission and
Based on data concerning the number of supplements received by the agency, FDA estimates that approximately 1,744 supplements will be submitted annually under section 506A(c)(1) and (c)(2) of the act. FDA estimates that approximately 594 applicants will submit such supplements, and that it will take approximately 120 hours to prepare and submit to FDA each supplement.
Section 506A(d)(1)(B), (d)(1)(C), and (d)(3)(B)(i) of the act sets forth requirements for changes requiring supplement submission at least 30 days prior to distribution of the product made using the change (moderate changes). Under this section, a supplement must be submitted for any change in the product, production process, quality controls, equipment, or facilities that has a moderate potential to have an adverse effect on the identity, strength, quality, purity or potency of the product as these factors may relate to the safety or effectiveness of the product. Distribution of the product made using the change may begin not less than 30 days after receipt of the supplement by FDA.
Based on the data concerning the number of supplements received by the agency, FDA estimates that approximately 2,754 supplements will be submitted annually under section 506A(d)(1)(B), (d)(1)(C), and (d)(3)(B)(i) of the act. FDA estimates that approximately 594 applicants will submit such supplements, and that it will take approximately 80 hours to prepare and submit to FDA each supplement.
Under section 506A(d)(3)(B)(ii) of the act, FDA may designate a category of changes for the purpose of providing that, in the case of a change in such category, the holder of an approved application may commence distribution of the drug upon receipt by the agency of a supplement for the change. Based on the data concerning the number of supplements received by the agency, FDA estimates that approximately 486 supplements will be submitted annually under section 506A(d)(3)(B)(ii) of the act. FDA estimates that approximately 486 applicants will submit such supplements, and that it will take approximately 80 hours to prepare and submit to FDA each supplement.
Section 506A(d)(1)(A), (d)(1)(C), and (d)(2)(A), and (d)(2)(B) of the act sets forth requirements for changes to be described in an annual report (minor changes). Under this section, changes in the product, production process, quality controls, equipment, or facilities that have a minimal potential to have an adverse effect on the identity, strength, quality, purity, or potency of the product as these factors may relate to the safety or effectiveness of the product must be documented by the applicant in the next annual report.
Based on the data concerning the number of supplements and annual reports received by the agency, FDA estimates that approximately 6,929 annual reports will include documentation of certain manufacturing changes as required under section 506A(d)(1)(A), (d)(1)(C), (d)(2)(A), and (d)(2)(B) of the act. FDA estimates that approximately 704 applicants will submit such information, and that it will take approximately 25 hours to prepare and submit to FDA the information for each annual report.
In the
The period for public comment on the proposed regulations closed on September 13, 1999 and FDA is currently reviewing the comments and preparing a final rule. The comment period for the draft guidance closed on August 27, 1999, and FDA has considered these comments when preparing the guidance that is the subject of this request.
FDA published in the
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.
Food and Drug Administration, HHS.
Notice.
This notice announces a forthcoming meeting of a public advisory committee of the Food and Drug Administration (FDA). The meeting will be open to the public.
On May 12, 2000, the committee will discuss issues related to the design and development of clinical protocols to support claims of reduced posterior capsular opacification (PCO) for intraocular lenses (IOL's). The topics for discussion will include study,
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Health Care Financing Administration (HCFA), HHS.
Notice.
We expect to implement a prospective payment system for hospital outpatient services for the Medicare program on July 1, 2000. This system will recognize new technology as discrete payment groups within the ambulatory payment classification (APC) system. This payment system will also provide for additional payments to hospitals at amounts higher than the amounts that would otherwise be paid for certain specified items, such as: orphan drugs; drugs, biologic agents, and brachytherapy devices used for the treatment of cancer; radiopharmaceutical drugs and biologic products; and certain new or innovative medical devices. We have identified items or services for inclusion in the new technology APC groups, as well as items potentially eligible for special additional payments. This notice addresses the process that interested parties must use to submit additional items for consideration.
Diane Milstead, (410) 786-3355.
We expect to implement a prospective payment system (PPS) for hospital outpatient services for Medicare on July 1, 2000. One aspect of this system will be to develop a process to recognize new technologies on an ongoing basis in a timely manner, and to establish special payments for a number of specified items, in accordance with section 201 of the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), enacted on November 29, 1999. New technologies refer to services and items that have emerged since 1996, and therefore are not reflected in the cost data that are being used to develop our PPS. Additionally, section 201(b) of the BBRA requires us to make additional payments to hospitals for a period of 2 to 3 years for specific items at amounts higher than the amounts that would otherwise be paid under the hospital outpatient PPS for items in the following categories: (a) current orphan drugs, as designated under section 526 of the Federal Food, Drug, and Cosmetic Act; (b) current drugs, biologic agents, and brachytherapy devices used for the treatment of cancer; (c) current radiopharmaceutical drugs and biologicals; and (d) new or innovative medical devices, new drugs, and biologic agents, in instances when we were not paying for the item as a hospital outpatient service as of December 31, 1996, and when the cost is “not insignificant” in relation to the hospital outpatient PPS payment amount. In this context, “current” refers to those items for which we are making hospital outpatient payment on the first date the new PPS is implemented.
We will include these items and services within payment groups called ambulatory payment classifications (APCs), which will be used in the payment system for hospital outpatient services. In addition to the APC-related payments, however, hospitals may receive additional payment for specified items. In order to appropriately assign items to the new technology APCs and make special payments for the relevant drugs, biologicals, and medical devices, we must be able to identify the specific items and services, and ensure that HCFA Common Procedure Coding System (HCPCS) codes are established for them. To facilitate this activity, we have placed on our Internet site at
(a) A list of those items and services that we have already identified as potentially eligible for special payments or treatment as a new technology service; and
(b) The procedures interested parties must follow to bring to our attention additional items that may be eligible.
If you cannot access this information on our Internet site, you may request a paper copy by contacting Joan Briscoe in the Division of Practitioner and Ambulatory Care at (410) 786-4495.
Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)).
Health Care Financing Administration (HCFA), HHS.
Cancellation of notice.
In the January 5, 2000 issue of the
April 7, 2000.
Armen Thoumaian, Ph.D., (410) 786-6672.
Sections 402(a)(1)(G) and (a)(2) of the Social Security Amendments of 1967 (Public Law 90-248), as amended (42 U.S.C. 1395b-1(a)(1)(G) and (a)(2)).
Periodically, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish a list of information collection requests under OMB review, in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these documents, call the SAMHSA Reports Clearance Officer on (301) 443-7978.
SAMHSA is requesting OMB approval for the Federal Drug Testing Custody and Control Form for Federal agency and federally regulated drug testing programs which must comply with the HHS Mandatory Guidelines for Federal Workplace Drug Testing Programs (59 FR 29908) dated June 9, 1994,and for the information provided by laboratories for the National Laboratory Certification Program (NLCP). The Federal Drug Testing Custody and Control Form is used by all Federal agencies and employers regulated by the Department of Transportation to document the collection and chain of custody of urine specimens at the collection site, for laboratories to report results, and for Medical Review Offices to make a determination.
The Federal Drug Testing Custody and Control Form is being revised. Major changes include eliminating the split specimen copy, simplifying the chain of custody requirements, revising the outcomes for the laboratory test results, revising the collection instructions, and ensuring that the form follows the sequence of events. Prior to an inspection, a laboratory is required to submit specific information regarding its laboratory procedures to allow inspectors to become familiar with a laboratory's procedures before arriving at the laboratory.
The annual total burden estimates for the Federal Drug Testing Custody and Control Form, the NLCP application, the NLCP inspection checklist, and NLCP recordkeeping requirements is 1,790,664 hours.
Written comments and recommendations concerning the proposed information collection should be sent within 30 days of this notice to: Allison Eydt, Human Resources and Housing Branch, Office of Management and Budget, New Executive Office Building, Room 10235, Washington, D.C. 20503.
Substance Abuse and Mental Health Services Administration, HHS.
Notice.
The Department of Health and Human Services notifies Federal agencies of the laboratories currently certified to meet standards of Subpart C of Mandatory Guidelines for Federal Workplace Drug Testing Programs (59 FR 29916, 29925). A similar notice listing all currently certified laboratories will be published during the first week of each month, and updated to include laboratories which subsequently apply for and complete the certification process. If any listed laboratory's certification is totally suspended or revoked, the laboratory will be omitted from updated lists until such time as it is restored to full certification under the Guidelines.
If any laboratory has withdrawn from the National Laboratory Certification Program during the past month, it will be listed at the end, and will be omitted from the monthly listing thereafter.
This Notice is available on the internet at the following website:
Mrs. Giselle Hersh or Dr. Walter Vogl, Division of Workplace Programs, 5600 Fishers Lane, Rockwall 2 Building, Room 815, Rockville, Maryland 20857; Tel.: (301) 443-6014, Fax: (301) 443-3031.
Please use the above address for all surface mail and correspondence. For all overnight mail service use the following address: Division of Workplace Programs, 5515 Security Lane, Room 815, Rockville, Maryland 20852.
Mandatory Guidelines for Federal Workplace Drug Testing were developed in accordance with Executive Order 12564 and section 503 of Pub. L. 100-71. Subpart C of the Guidelines, “Certification of Laboratories Engaged in Urine Drug Testing for Federal Agencies,” sets strict standards which laboratories must meet in order to conduct urine drug testing for Federal agencies. To become certified an applicant laboratory must undergo three rounds of performance testing plus an on-site inspection. To maintain that certification a laboratory must participate in a quarterly performance testing program plus periodic, on-site inspections.
Laboratories which claim to be in the applicant stage of certification are not to be considered as meeting the minimum requirements expressed in the HHS Guidelines. A laboratory must have its letter of certification from SAMHSA, HHS (formerly: HHS/NIDA) which attests that it has met minimum standards.
In accordance with Subpart C of the Guidelines, the following laboratories meet the minimum standards set forth in the Guidelines:
The following laboratory voluntarily withdrew from the NLCP program, effective March 31, 2000:
* The Standards Council of Canada (SCC) voted to end its Laboratory Accreditation Program for Substance Abuse (LAPSA) effective May 12, 1998. Laboratories certified through that program were accredited to conduct forensic urine drug testing as required by U.S. Department of Transportation (DOT) regulations. As of that date, the certification of those accredited Canadian laboratories will continue under DOT authority. The responsibility for conducting quarterly performance testing plus periodic on-site inspections of those LAPSA-accredited laboratories was transferred to the U.S. DHHS, with the DHHS' National Laboratory Certification Program (NLCP) contractor continuing to have an active role in the performance testing and laboratory inspection processes. Other Canadian laboratories wishing to be considered for the NLCP may apply directly to the NLCP contractor just as U.S. laboratories do.
Upon finding a Canadian laboratory to be qualified, the DHHS will recommend that DOT certify the laboratory (
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
The proposed information collection requirement described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Reports Liaison Officer, Sheila E. Jones, Department of Housing and Urban Development, 451 7th Street, SW, Room 7230, Washington, DC 20410.
Phyllis Williams, 202/708-2035 (this is not a toll-free number) for copies of the proposed forms and other available documents.
The Department is submitting the proposed information collection to OMB for review, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended).
This Notice is soliciting comments from members of the public and affecting agencies concerning the proposed collection of information to:
This Notice also lists the following information:
Number of Respondents: 250.
Frequency of Reports: Semi-annually.
Hours of Response: hours per response—45.
The Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, as amended.
Office of the Chief Information Officer, HUD.
Notice.
The proposed information collection requirement described below has been submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
May 8, 2000.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB approval number and should be sent to: Joseph F. Lackey, Jr., OMB Desk Officer, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503.
Wayne Eddins, Reports Management Officer, Q, Department of Housing and Urban Development, 451 Seventh Street, Southwest, Washington, DC 20410; e-mail Wayne_Eddins@HUD.gov; telephone (202) 708-2374. This is not a toll-free number. Copies of the proposed forms and other available documents submitted to OMB may be obtained from Mr. Eddins.
The Department has submitted the proposal for the collection of information, as described below, to OMB for review, as required by the Paperwork Reduction Act (44 U.S.C. Chapter 35). The Notice lists the following information: (1) The title of the information collection proposal; (2) the office of the agency to collect the information; (3) the OMB approval number, if applicable; (4) the description of the need for the information and its proposed use; (5) the agency form number, if applicable; (6) what members of the public will be affected by the proposal; (7) how frequently information submissions will be required; (8) an estimate of the total number of hours needed to prepare the information submission including number of respondents, frequency of response, and hours of response; (9) whether the proposal is new, an extension, reinstatement, or revision of an information collection requirement; and (10) the name and telephone number of an agency official familiar with the proposal and of the OMB Desk Officer for the Department.
This Notice also lists the following information:
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 35, as amended.
Office of the Chief Information Officer, HUD.
Notice.
The proposed information collection requirement described below has been submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Comments Due Date: May 8, 2000.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB approval number (2502-0005) and should be sent to: Joseph F. Lackey, Jr., OMB Desk Officer, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503.
Wayne Eddins, Reports Management Officer, Q, Department of Housing and Urban Development, 451 Seventh Street, Southwest, Washington, DC 20410; e-mail Wayne_Eddins@HUD.gov; telephone (202) 708-2374. This is not a toll-free number. Copies of the proposed forms and other available documents submitted to OMB may be obtained from Mr. Eddins.
The Department has submitted the proposal for the collection of information, as described below, to OMB for review, as required by the Paperwork Reduction Act (44 U.S.C. Chapter 35). The Notice lists the following information: (1) The title of the information collection proposal; (2) the office of the agency to collect the information; (3) the OMB approval number, if applicable; (4) the description of the need for the information and its proposed use; (5) the agency form number, if applicable; (6) what members of the public will be affected by the proposal; (7) how frequently information submissions will be required; (8) an estimate of the total number of hours needed to prepare the information submission including number of respondents, frequency of response, and hours of response; (9) whether the proposal is new, an extension, reinstatement, or revision of an information collection requirement; and (10) the name and telephone number of an agency official familiar with the proposal and of the OMB Desk Officer for the Department.
This Notice also lists the following information:
Reporting Burden:
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 35, as amended.
Officer of the Chief Information Officer, HUD.
Notice.
The proposed information collection requirement described below has been submitted to the Office of Management and Budget (OMB) for emergency review and approval, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name or OMB approval number and should be sent to: Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20410 (202) 395-7316.
Wayne Eddins, Reports Management Officer, Department of Housing and Urban Development, 451 7th Street, SW, Washington, DC 20410; e-mail Wayne_Eddins@HUD.gov; telephone (202) 708-2374. This is not a toll-free number. Copies of the proposed forms and other available documents submitted to OMB may be obtained from Mr. Eddins.
The Department has submitted the proposal for the collection of information, as described below, to OMB for review as
(1) The title for the collection of information;
(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;
This Notice also lists the following information:
The Paperwork Reduction Act of 1995, 44 U.S.C. 35, as amended.
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This Notice identifies unutilized, underutilized, excess, and surplus Federal property reviewed by HUD for suitability for possible use to assist the homeless.
April 7, 2000.
Clifford Taffet, Department of Housing and Urban Development, Room 7262, 451 Seventh Street SW, Washington, DC 20410; telephone (202) 708-1234; TTY number for the hearing- and speech-impaired (202) 708-2565 (these telephone numbers are not toll-free), or call the toll-free Title V information line at 1-800-927-7588.
In accordance with the December 12, 1988 court order in
Today's Notice is for the purpose of announcing that no additional properties have been determined suitable or unsuitable this week.
Lorie Lopez (Applicant) has applied to the U.S. Fish and Wildlife Service (Service) for an incidental take permit pursuant to Section 10(a) of the Endangered Species Act (Act). The Applicant has been assigned permit numbers TE-024873. The requested permit, which is for a period of 5 years, would authorize the incidental take of the endangered Houston Toad (
The Service has prepared the Environmental Assessment/Habitat Conservation Plan (EA/HCP) for the incidental take application. A determination of jeopardy to the species or a Finding of No Significant Impact (FONSI) will not be made before 30 days from the date of publication of this
Written comments on the application should be received on or before May 8, 2000.
Persons wishing to review the application may obtain a copy by writing to the Regional Director, U.S. Fish and Wildlife Service, P.O. Box 1306, Albuquerque, New Mexico 87103. Persons wishing to review the EA/HCP may obtain a copy by contacting Scott Rowin, U.S. Fish and Wildlife Service, 10711 Burnet Road, Suite 200, Austin, Texas 78758 (512/490-0057). Documents will be available for public inspection by written request or by appointment only during normal business hours (8:00 to 4:30) at U.S. Fish and Wildlife Service, Austin, Texas. Written data or comments concerning the application and EA/HCP should be submitted to the Field Supervisor, U.S. Fish and Wildlife Service, Austin, Texas at the above address. Please refer to permit number TE-024873 when submitting comments.
Scott Rowin at the above U.S. Fish and Wildlife Service Office.
Section 9 of the Act prohibits the “taking” of endangered species such as the Houston toad. However, the Service, under limited circumstances, may issue permits to take endangered wildlife species incidental to, and not the purpose of, otherwise lawful activities. Regulations governing permits for endangered species are at 50 CFR 17.22.
Lorie Lopez plans to construct one single family residence on 0.757 acres platted as Lot 41, in the Circle D Estates Subdivision, Bastrop County, Texas. This action will eliminate less than one acre of habitat and result in an unquantifiable amount of indirect impact. The applicant proposes to compensate for this incidental take of the Houston Toad by donating $1,500.00 to the National Fish and Wildlife Foundation for the specific purpose of land acquisition and management within Houston toad habitat, as identified by the Service.
Alternatives to this action were rejected because not developing the subject property with federally listed species present was not economically feasible and alteration of the project design would not alter the level of impacts.
John Schuelke (Applicant) has applied to the U.S. Fish and Wildlife Service (Service) for an incidental take permit pursuant to Section 10(a) of the Endangered Species Act (ESA). The Applicant has been assigned permit number TE-023822-0. The requested permit, which is for a period of 5 years, would authorize the incidental take of the endangered Houston toad (
The Service has prepared the Environmental Assessment/Habitat Conservation Plan (EA/HCP) for the incidental take application. A determination of jeopardy to the species or a Finding of No Significant Impact (FONSI) will not be made before 30 days from the date of publication of this notice. This notice is provided pursuant to Section 10(c) of the Act and National Environmental Policy Act regulations (40 CFR 1506.6).
Written comments on the application should be received on or before May 8, 2000.
Persons wishing to review the application may obtain a copy by writing to the Regional Director, U.S. Fish and Wildlife Service, P.O. Box 1306, Albuquerque, New Mexico 87103. Persons wishing to review the EA/HCP may obtain a copy by contacting Tannika Engelhard, U.S. Fish and Wildlife Service, 10711 Burnet Road, Suite 200, Austin, Texas 78758 (512/490-0057, extension 242). Documents will be available for public inspection by written request or by appointment only during normal business hours (8:00 to 4:30) at the U.S. Fish and Wildlife Service office, Austin, Texas. Written data or comments concerning the application and EA/HCP should be submitted to the Supervisor, U.S. Fish and Wildlife Service, Austin, Texas at the above address. Please refer to permit number TE-023822-0 when submitting comments.
Tannika Engelhard at the above U.S. Fish and Wildlife Service office, Austin, Texas.
Section 9 of the Act prohibits the “taking” of endangered species such as the Houston toad. However, the Service, under limited circumstances, may issue permits to take endangered wildlife species incidental to, and not the purpose of, otherwise lawful activities. Regulations governing permits for endangered species are at 50 CFR 17.22.
John Schuelke proposes to construct one single family residence on 0.5 acres of each of twenty-two (22) lots (Lots 5-8, 10-15, 22-24, 25A, 26A, 27A&B, 28A&B, 29A&B, 30A) in the Pine Oak Estates Subdivision, Bastrop County, Texas. This action will eliminate less than eleven acres of habitat (0.5 acres or less per homesite) and result in indirect impacts within the lot. The applicant proposes to compensate for this incidental take of the Houston toad by providing $33,000.00 ($1,500.00 per homesite) to the National Fish and Wildlife Foundation for the specific purpose of land acquisition and management within Houston toad habitat, as identified by the Service.
Alternatives to this action were rejected because not developing the subject properties with federally listed species present was not economically feasible and alteration of the project design would not alter the level of impacts.
Fish and Wildlife Service, Interior.
Notice; correction.
The Fish and Wildlife Service published a document in the
Clyde Morris, Refuge Manager, Don Edwards San Francisco Bay National Wildlife Refuge, Newark, California, telephone (510) 792-0222.
In the
A public scoping meeting will be held on April 27, 2000, from 7 p.m. to 9 p.m., see addresses for location. Written comments related to the scope and content of the Restoration and Management Plan and EIS/EIR should be received by the Service at the Newark address below by May 12, 2000.
Bureau of Land Management, Interior.
Notice of meeting.
The next meeting of the Northwest Colorado Resource Advisory Council will be held on Friday, May 19, 2000, at the Bureau of Land Management in Grand Junction, Colorado.
Friday, May 19, 2000.
Bureau of Land Management, 2815 H Road, Grand Junction, Colorado 81506.
Lynn Barclay, Bureau of Land Management (BLM), 455 Emerson Street, Craig, Colorado 81625; Telephone (970) 826-5096.
The Northwest Resource Advisory Council will meet on Friday, May 19, 2000, at the Bureau of Land Management, 2815 H Road, Grand Junction, Colorado. The meeting will start at 9 a.m. and includes discussion of mission of Wildlife and Land Exchange subcommittees, subcommittee assignments, working with United States Forest Service, and defining meeting procedures and processes.
The meeting is open to the public. Interested persons may make oral statements at the meetings or submit written statements at the meeting. Per-person time limits for oral statements may be set to allow all interested persons an opportunity to speak. Summary minutes of council meetings are maintained at the Bureau of Land Management Offices in Grand Junction and Craig, Colorado. They are available for public inspection and reproduction during regular business hours within thirty (30) days following the meeting.
Minerals Management Service, Interior.
Availability of the proposed notice of sale.
Gulf of Mexico Outer Continental Shelf (OCS) Notice of Availability of the Proposed Notice of Sale for proposed Oil and Gas Lease Sale 177 in the Western Gulf of Mexico. This Notice of Availability is published pursuant to 30 CFR 256.29(c), as a matter of information to the public.
With regard to oil and gas leasing on the OCS, the Secretary of the Interior, pursuant to section 19 of the OCS Lands Act, provides the affected States the opportunity to review the proposed Notice. The proposed Notice sets forth the proposed terms and conditions, of the sale, including minimum bids, royalty rates, and rentals.
The proposed Notice of Sale for Sale 177 and a “Proposed Sale Notice Package” containing information essential to potential bidders may be obtained from the Public Information Unit, Gulf of Mexico Region, Minerals Management Service, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394. Telephone: (504) 736-2519.
The final Notice of Sale will be published in the
Nominations for the following properties being considered for listing in the National Register were received by the National Park Service before April 1, 2000. Pursuant to section 60.13 of 36 CFR part 60, written comments concerning the significance of these properties under the National Register criteria for evaluation may be forwarded to the National Register, National Park Service, 1849 C St. NW, NC400, Washington, DC 20240. Written comments should be submitted by April 24, 2000.
226-228 Grant St., Dennison, 00000420
National Park Service, Interior.
Notice of availability.
The National Park Service (NPS) is updating its current system of internal instructions. When these documents contain new policy or procedural requirements that may affect parties outside the NPS, this information is being made available for public review and comment. Draft Director's Order #47 establishes comprehensive operational policies and requirements to guide NPS soundscape preservation and noise management.
Written comments will be accepted until May 8, 2000.
Draft Director's Order #47 is available on the Internet at
Bill Schmidt at 202/501-9269.
The NPS is revising its operational policies and procedures to facilitate, to the fullest extent practicable, the protection, maintenance, or restoration of the natural soundscapes associated with units of the national park system. Natural sounds are vital to the natural function of many parks, and may provide valuable indicators of the health of various ecosystems. The natural sound environment is recognized as one of the resources found in parks, and is highly valued by most park visitors. Increasingly, even those parks that appear as they did in historical context no longer sound the way they once did. Natural sounds are slowly and inexorably being masked or obscured by a wide variety of human activities. Soundscape preservation and noise management is one dimension of the complex problem the NPS faces in preserving park resources unimpaired while providing appropriate enjoyment for current and future generations.
National Park Service, Interior.
Public notice.
The National Park Service (NPS) has available for public review, the proposed guidance document for all non-NPS Federal-Aid roads and highways in units of the NPS. This information was developed to provide guidance to managers in all units of the National Park System who deal with requests from State and other Department of Transportation (DOT) agencies for NPS land to be used for non-NPS Federal-Aid roads and highways. At the end of the review period, this material will appear as a Director's Order for Non-NPS Federal-Aid Roads in Parks distributed to all NPS units. The Director's Order will provide policy guidance to park managers concerning all aspects of requests for land for these purposes, from the initial contact and decisions, through 4(f) determinations, statutory requirements and NPS policy, ultimately resulting in official notification of denial or consent for the request for a deed of easement for highway purposes. The guidance document is a concise treatment of the entire subject of non-NPS Federal-Aid roads in parks including but not limited to requests for new roads and widening of existing roads.
Copies of the proposed guidance document will be made available upon request by writing: National Park Service, Ranger Activity Division, 1849 C St. NW, Suite 7408, Washington, DC 20240, or by calling 202-208-4874. The draft document is also available on the NPS website the following URL: www.nps.gov/refdesk/DOrders/index.htm.
Public comments will be accepted on or before June 6, 2000.
Comments should be addressed to: Dick Young, Special Park Uses Program Manager, C/O Colonial NHP, P. O. Box 210, Yorktown, VA 23690.
Dick Young at 757-898-7846, or 757-898-3400, ext. 51.
United States International Trade Commission.
April 20, 2000 at 11:00 a.m.
Room 101, 500 E Street SW, Washington, DC 20436, Telephone: (202) 205-2000.
Open to the public.
1. Agenda for future meeting: none.
2. Minutes.
3. Ratification List.
4. Inv. Nos. 731-TA-406 and 408 (Review)(Electrolytic Manganese Dioxide from Greece and Japan)—briefing and vote. (The Commission will transmit its determination to the Secretary of Commerce on May 9, 2000.)
5. Outstanding action jackets: none.
In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
By order of the Commission.
Notice is hereby given that a Consent Decree in
The proposed consent decree resolves claims asserted by the United States, on behalf of the U.S. Environmental Protection Agency (“EPA”), against: Madison Industries, Inc.; Old Bridge Chemicals, Co.; Arnet Realty Company and its two partners, Arnold Asman and Nettie Bzura; and Ciba Specialty Chemicals Water Treatments, Inc. (formerly CPS Chemical Company, Inc., a subsidiary of Ciba Specialty Chemicals Corporation. (“Settling Defendants”) under Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. 9607. The claims sought to recover past response costs incurred at the CPS/Madison site (“Site”) in Middlesex County, New Jersey. The proposed Consent Decree requires the Settling Defendants to reimburse the United States $500,000 in past response costs.
The Department of Justice will accept written comments relating to the proposed consent decree for thirty (30) days from the date of publication of this notice. Please address comments to the Assistant Attorney General, Environment and Natural Resources Division, Department of Justice, P.O. Box 7611, Ben Franklin Station, Washington, D.C. 20044 and refer to
Copies of the proposed consent decree may be examined at the Office of the United States Attorney for the District of New Jersey, 970 Broad Street, Newark, NJ 07102, or at the U.S. Environmental Protection Agency, Region II, 290 Broadway, New York, NY 10007-1866. A copy of the proposed Settlement Agreement may also be obtained by mail from the Consent Decree Library, P.O. Box 7611, Washington, D.C. 20044. When requesting a copy of the consent decree by mail, please enclose a check in the amount of $7.00 (twenty-five cents per page reproduction costs) payable to the “Consent Decree Library.”
Consistent with Departmental policy, 28 CFR 50.7, notice is hereby given that a proposed Consent Decree in
Under the Consent Decree, Gulf States Steel agrees to pay a civil penalty to the United States in the amount of $100,000. In addition, Gulf States Steel agrees to operate its plant in compliance with its National Pollutant Discharge Elimination System (NPDES) Permit, and with the CWA. In addition, Gulf States Steel agrees to undertake certain Supplemental Environmental Projects (SEPs) in the amount of at least $206 million. These SEPs will result in significant pollution prevention or reduction in excess of Gulf States Steel's legal obligations. In addition, one SEP will result in Gulf States Steel purchasing ecologically-valuable land for perpetual preservation. Gulf States Steel also agrees to pay $6.54 million for cleanup of Lake Gadsden and Black Creek in Gadsden, Alabama. Gulf States Steel also agrees to purchase or donate appropriate real property for placement of sediments, if needed by EPA, Region 4.
The Department of Justice will receive, for a period of thirty (30) days from the date of this publication, comments relating to the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General for the Environment and Natural Resources Division, U.S. Department of Justice, P.O. Box 7611, Washington, D.C. 20044; and refer to
The proposed settlement agreement may be examined at the Office of the United States Attorney, 1800 Fifth Avenue, North, Birmingham, Alabama 35203, and at the office of the Environmental Protection Agency, Region 4, 61 Forsyth Street, S.W., Atlanta, GA 30303. In requesting a copy, please refer to the referenced case and enclose a check in the amount of $4.25 (25 cents per page reproduction costs).
In accordance with Departmental Policy, 28 C.F.R. 50.7, notice is hereby given that a Consent Decree that would resolve the liability of Artemissa Farms, Inc., the last of four defendants in
The proposed Consent Decree concerns alleged violations of the Clean Water Act, 33 U.S.C. 1311, as a result of the discharge of dredged and fill materials onto approximately 100 acres of wetlands, in Hamilton County, Illinois (the “Site”), which is alleged to constitute “waters of the United States.”
The Consent Decree permanently enjoins Artemissa Farms, Inc. from taking any actions, or causing others to take any actions, which result in the discharge of dredged or fill material into waters of the United States. The Consent Decree further requires Artemissa Farms, Inc. to pay $5,000 into an interest-bearing Registry Account of the United States District Court for the Southern District of Illinois, to be used to conduct a wetland restoration on the Site.
The Consent Decree also requires Artemissa Farms, Inc., subject to the right of prior approval by the United States Army Corps of Engineers, to convey the Site to an appropriate entity for conservation after the wetland restoration is completed. The purpose of the conveyance is to provide a conservation area in which no development, excavation, or other disturbance will occur. To achieve that end, the conveyance shall contain several restrictions that are set forth in the Consent Decree.
The Department of Justice will receive written comments relating to the Consent Decree for a period of thirty (30) days from the date of this notice. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, United States Department of Justice, Attention: Steven E. Rusak, Senior Attorney, Environmental Defense Section, P.O. Box 23986, Washington, D.C. 20026-3986, and should refer to
The proposed Consent Decree may be examined at the Clerk's Office, United States District Court, United States Courthouse, 301 West Main Street, Benton, Illinois 62812.
General wage determination decisions of the Secretary of Labor are issued in accordance with applicable law and are based on the information obtained by the Department of Labor from its study of local wage conditions and data made available from other sources. They specify the basic hourly wage rates and fringe benefits which are determined to be prevailing for the described classes of laborers and mechanics employed on construction projects of a similar character and in the localities specified therein.
The determinations in these decisions of prevailing rates and fringe benefits have been made in accordance with 29 CFR Part 1, by authority of the Secretary of Labor pursuant to the provisions of the Davis-Bacon Act of March 3, 1931, as amended (46 Stat. 1494, as amended, 40 U.S.C. 276a) and of other Federal statues referred to in 29 CFR part 1, appendix, as well as such additional statutes as may from time to time be enacted containing provisions for the payment of wages determined to be prevailing by the Secretary of Labor in accordance with the Davis-Bacon Act. The prevailing rates and fringe benefits determined in these decisions shall, in accordance with the provisions of the foregoing statutes, constitute the minimum wages payable on Federal and federally assisted construction projects to laborers and mechanics of the specified classes engaged on contract work of the character and in the localities described therein.
Good cause is hereby found for not utilizing notice and public comment procedure thereon prior to the issuance of these determinations as prescribed in 5 U.S.C. 553 and not providing for delay in the effective date as prescribed in that section, because the necessity to issue current construction industry wage determinations frequently and in large volume causes procedures to be impractical and contrary to the public interest.
General wage determination decisions, and modifications and supersedes decisions thereto, contain no expiration dates and are effective from their date of notice in the
Any person, organization, or governmental agency having an interest in the rates determined as prevailing is encouraged to submit wage rate and fringe benefit information for consideration by the Department. Further information and self-explanatory forms for the purpose of submitting this data may be obtained by writing to the U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division, Division of Wage Determinations, 200 Constitution Avenue, NW, Room S-3014, Washington, DC 20210.
This is to advise all interest parties that the Department of Labor is withdrawing, from the date of this notice, the following General Wage Determinations:
Contracts for which bids have been opened shall not be affected by this notice. Also, consistent with 29 CFR 1.6(c)(2)(i)(A), when the opening of bids is less than ten (10) days from the date of this notice, this action shall be effected unless the agency finds that there is insufficient time to notify bidders of the change and the finding is documented in the contract file.
The number of the decisions added to the Government Printing Office document entitled “General Wage Determinations Issued Under the Davis-Bacon and Related Acts” are listed by Volume and States:
The number of decisions listed in the Government Printing Office document entitled “General Wage Determinations Issued Under the Davis—Bacon and Related Acts” being modified are listed by Volume and State. Dates of publication in the
General wage determinations issued under the Davis-Bacon and related Acts, including those noted above, may be found in the Government Printing Office (GPO) document entitled “General Wage Determinations Issued Under the Davis-Bacon and Related Acts.” This publication is available at each of the 50 Regional Government Depository Libraries and many of the 1,400 Government Depository Libraries across the country.
The general wage determinations issued under the Davis-Bacon and Related Acts are available electronically by subscription to the FedWorld Bulletin Board System of the National Technical Information Service (NTIS) of the U.S. Department of Commerce at 1-800-363-2068
Hard-copy subscriptions may be purchased from: Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, (202) 512-1800.
When ordering hard-copy subscription(s), be sure to specify the State(s) of interest, since subscriptions may be ordered for any or all of the
Pension and Welfare Benefits Administration, Labor.
Notice of proposed exemptions.
This document contains notices of pendency before the Department of Labor (the Department) of proposed exemptions from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (the Act) and/or the Internal Revenue Code of 1986 (the Code).
All interested persons are invited to submit written comments or request for a hearing on the pending exemptions, unless otherwise stated in the Notice of Proposed Exemption, within 45 days from the date of publication of this
All written comments and request for a hearing (at least three copies) should be sent to the Pension and Welfare Benefits Administration, Office of Exemption Determinations, Room N-5649, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210. Attention: Application No. ___, stated in each Notice of Proposed Exemption. The applications for exemption and the comments received will be available for public inspection in the Public Documents Room of the Pension and Welfare Benefits Administration, U.S. Department of Labor, Room N-5638, 200 Constitution Avenue, NW, Washington, DC 20210.
Notice of the proposed exemptions will be provided to all interested persons in the manner agreed upon by the applicant and the Department within 15 days of the date of publication in the
The proposed exemptions were requested in applications filed pursuant to section 408(a) of the Act and/or section 4975(c)(2) of the Code, and in accordance with procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990). Effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the Secretary of the Treasury to issue exemptions of the type requested to the Secretary of Labor. Therefore, these notices of proposed exemption are issued solely by the Department.
The applications contain representations with regard to the proposed exemptions which are summarized below. Interested persons are referred to the applications on file with the Department for a complete statement of the facts and representations.
The Department is considering granting an exemption under the authority of section 408(a) of the Act and section 4975(c)(2) of the Code and in accordance with the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32826, 32847, August 10, 1990). If the exemption is granted, the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) through (E) of the Code, shall not apply to the proposed sale (the Sale) of four parcels of unimproved real property (the Property) and loan (the Loan) from the Plan to Mr. McPhail,
(1) With respect to the Sale:
(A) The terms and conditions of the Sale will be at least as favorable to the Plan as those obtainable in an arm's length transaction with an unrelated party;
(B) The Sale will occur at a price which includes the greater of $270,000 or the Property's fair market value as established by a qualified, independent appraiser;
(C) The Sale Price will also include a premium of $30,000 (the Assemblage Value) due to Mr. McPhail's ownership of unimproved real property located adjacent to the Property;
(D) The Plan will pay no fees or commissions with respect to the Sale; and
(E) Mr. McPhail will pay $60,000 or 20% of the Sale Price in cash with the balance paid for by the Loan; and
(2) With Respect to the Loan:
(A) The interest rate on the Loan (the Interest Rate) will be 7%, a rate set by the Macon Bank for a real estate loan having terms similar to the Loan;
(B) The Loan terms are at least favorable to the Plan as those obtainable in an arm's length transaction with an unrelated party;
(C) The Loan is secured by a first security interest on the certain real property, which has been appraised by a qualified independent appraiser to have a fair market value not less than 150% of the principal amount of the Loan; and
(D) The outstanding balance of the Loan will never exceed 20% of the assets of the Plan throughout the duration of the Loan;
(E) The fair market value of the collateral remains at least equal to 150% of the outstanding principal balance plus accrued but not unpaid interest, throughout the duration of the Loan; and
(3) Should any employee of the Plan Sponsor become eligible for Plan participation, the new participant will be enrolled in another qualified retirement plan or the Loan will be immediately repaid.
1. The H. Ray McPhail Company (the McPhail Co.) is a Georgia company engaged in the purchase and sale of real estate. The McPhail Co. is solely owned
2. The assets of the Plan include the Property. The Property comprises approximately 3.66 acres of unimproved real property located in Highlands, North Carolina. The Property is divided into four lots. Two of the lots are interior lots and the other two lots have frontage on Lake Sequoyah. The Property was acquired for $293,000 on November 23, 1994 from Elizabeth Nielson, an unrelated party.
3. Since its acquisition, the Property has not generated any income for the Plan. The Plan has, however, incurred certain expenses as a result of the Plan's ownership of the Property. In this regard, the applicant represents that the Plan has incurred a total of $3,169.33 in property taxes. In addition, the applicant represents that the Plan has incurred expenses in the amount of $1,685 for consulting fees resulting from the Plan's attempt to develop the Property.
4. The Property was appraised by Thomas Ringle (Mr. Ringle), an appraiser independent of the Plan and certified in the State of North Carolina. Mr. Ringle calculated the Property's fair market value (the Fair Market Value) using the sales comparison approach and compared the Property to similar unimproved properties located near the Property. Based on these comparisons, Mr. Ringle determined the Fair Market Value to be $270,000 as of June 9, 1998.
Mr. Ringle also calculated an additional value for the Property for purposes of the Sale (
Mr. Ringle determined that the sales price of the Property for purposes of the Sale (the Sale Price) should be a sum equal to the Fair Market Value and the Assemblage Value. As a result, Mr. Ringle determined the Sale Price to be $300,000.
5. The applicant is proposing the sale of the Property from the Plan to Mr. McPhail for $300,000 (
As a result, Mr. McPhail proposes the following terms for the Sale: $60,000 in cash paid by Mr. McPhail to the Plan as a down payment on the Property; and $2,157.19 paid by Mr. McPhail to the Plan each month for 179 months. As security on the Loan, Mr. McPhail will pledge the Property and additional unimproved real property having a fair market value of $435,000 as of September 3, 1999, as determined by John Meadows of John Cleveland Realty, an independent real estate broker. The security interest securing the Loan will be a first security interest and will be perfected in accordance with North Carolina law. In addition, the property securing the Loan, will be insured against casualty loss for an amount which is not less than the Loan balance throughout the duration of the Loan. The Plan will be listed as a loss payee on the insurance policy.
6. The applicant represents that the proposed Sale is in the best interest of the Plan due to the high expense the Plan anticipates will be necessary for a sale of the Property to unrelated third parties. The applicant further represents that the Property was originally purchased by the Plan with the intent that the Plan would resell the Property to unrelated parties. The applicant notes that, subsequent to the purchase of the Property by the Plan, the Plan determined that the Property could not be sold to third parties without the expenditure of Plan assets on certain costly improvements, including the construction, grading and paving of a road.
The applicant additionally represents that the proposed Loan is protective of the Plan since the Loan will be secured with real property having a fair market value in excess of the Property and the Interest Rate is set according to current market rates for similar transactions.
Finally, the applicant represents that the Sale is administratively feasible since the proposed Sale will allow the Plan to liquidate its investment in the Property at a price which will maximize value to the Plan and is a one-time transaction in which the Plan will pay no fees or transaction costs.
7. In summary, the applicant represents that the proposed transaction satisfies the criteria of section 4975(c)(2) of the Code because,
(1) With respect to the Sale:
(A) The terms and conditions of the Sale will be at least as favorable to the Plan as those obtainable in an arm's length transaction with an unrelated party;
(B) The Sale will occur at a price which includes the greater of $270,000 or the Property's fair market value as established by a qualified, independent appraiser;
(C) The Sale Price will also include a premium of $30,000 (the Assemblage Value) due to Mr. McPhail's ownership of unimproved real property located adjacent to the Property;
(D) The Plan will pay no fees or commissions with respect to the Sale; and
(E) Mr. McPhail will pay $60,000 or 20% of the Sale Price in cash with the balance paid for by the Loan; and
(2) With Respect to the Loan:
(A) The interest rate on the Loan (the Interest Rate) will be 7%, a rate set by the Macon Bank for a real estate loan having terms similar to the Loan;
(B) The Loan terms are at least favorable to the Plan as those obtainable in an arm's length transaction with an unrelated party;
(C) The Loan is secured by a first security interest on the certain real property, which has been appraised by a qualified independent appraiser to have a fair market value not less than 150% of the principal amount of the Loan; and
(D) The outstanding balance of the Loan will never exceed 20% of the assets of the Plan throughout the duration of the Loan;
(E) The fair market value of the collateral remains at least equal to 150% of the outstanding principal balance plus accrued but not unpaid interest, throughout the duration of the Loan; and
(3) Should any employee of the Plan Sponsor become eligible for Plan participation, the new participant will be enrolled in another qualified retirement plan or the Loan will be immediately repaid.
The Department is considering granting an exemption under the authority of section 408(a) of the Act and section 4975(c)(2) of the Code and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption is granted, the restrictions of sections 406(a) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) through (D) of the Code, shall not apply, effective July 22, 1997, to the making, by an employee benefit plan subject to the Act (the Plan), of capital contributions to any private equity fund (the Triumph Fund) that is organized, sponsored and/or managed by Triumph Capital Group, Inc. and/or any of its affiliates (collectively, Triumph) pursuant to a contractual obligation by a Plan having an interest in the Triumph Fund.
This proposed exemption is subject to the following conditions:
a. At the time the Plan undertakes the obligation to make such capital contributions (the Determination Date), the Triumph Fund is not a party in interest with respect to the Plan.
b. The decision to make a capital contribution to a Triumph Fund is made on behalf of the Plan by a Plan fiduciary which is independent of and unrelated to Triumph and the portfolio company whose interest is acquired by the Triumph Fund.
c. Triumph does not otherwise provide investment advice as a fiduciary to the Plan, within the meaning of the Department's regulations at 29 CFR 2510.3-21(c), with respect to such Plan's assets that are invested in the Triumph Fund.
d. At the Determination Date, the Plan has aggregate assets that are in excess of $50 million; provided, however, that in the case of:
(1) Two or more Plans which are not maintained by the same employer, controlled group of corporations or employee organization (the Unrelated Plans), whose assets are invested in a Triumph Fund through a group trust, an insurance company pooled separate account or any other form of entity the assets of which are “plan assets” under the Department's regulations at 29 CFR 2510.3-101 (the Plan Asset Regulation), the foregoing $50 million requirement shall be satisfied if such trust, separate account, or other entity has aggregate assets which are in excess of $50 million, provided further that the fiduciary responsible for making the investment decision on behalf of such group trust, insurance company pooled separate account, or other entity has—
i. Full investment responsibility
ii. Total assets under its management and control, exclusive of the assets invested in the Triumph Fund, which are in excess of $100 million, for Triumph Funds established after the date this notice of proposed exemption is published in the
(2) Two or more Plans which are maintained by the same employer, controlled group of corporations or employee organization (the Related Plans), whose assets are invested in a Triumph Fund through a master trust or any other entity the assets of which are “plan assets” under the Plan Asset Regulation, the $50 million requirement shall in any event be satisfied if such trust or other entity has aggregate assets which are in excess of $50 million, provided, further, that, in the case of a Triumph Fund established after the date the notice granting the exemption is published in the
e. The Triumph Fund is a party in interest with respect to the Plan solely by reason of a relationship to a portfolio company which is a service provider to a Plan, as described in Section 3(14)(H) or (I) of the Act, including a fiduciary with respect to such Plan.
f. The capital commitment of the Plan (together with the capital commitments of any other Plans maintained by the same employer, controlled group of corporations or employee organization) with respect to the Triumph Fund, does not exceed 15 percent of the total capital commitments made by all investors with respect to such Triumph Fund, determined at the later of (i) the Determination Date, or (ii) the date on which the Triumph Fund first becomes a party in interest with respect to such Plan.
g. At the Determination Date the percentage of the Plan's assets committed to be invested in the Triumph Fund does not exceed 5 percent of the Plan's total assets.
h. At the Determination Date, a Plan's aggregate capital commitment to all Triumph Funds does not exceed 25 percent of the Plan's total assets.
i. The Plan receives the following initial and ongoing disclosures with respect to the Triumph Fund;
(1) A copy of the private placement memorandum applicable to the Triumph Fund or another comparable document containing substantially the same information;
(2) A copy of the limited partnership or other agreement establishing the Triumph Fund;
(3) A copy of the subscription agreement applicable to the Triumph Fund, if any;
(4) Copies of this proposed exemption and the final exemption, if granted, once such documents are published in the
(5) Periodic, but no less frequently than annually, reports relating to the overall financial position and operational results of the Triumph Fund, including copies of the Triumph Fund's annual financial statements.
j. With respect to capital contributions made to a Triumph Fund by a Plan after the date this proposed exemption is granted, Triumph maintains or causes to be maintained, for a period of six (6) years from the date of the transaction, the records necessary to enable the persons described in paragraph (k) to determine whether the conditions of the exemption have been met, except that—
(1) A prohibited transaction will not be considered to have occurred, if due to circumstances beyond the control of Triumph, the records are lost or destroyed prior to the end of the six year period; and
(2) No party in interest, other than Triumph, shall be subject to the civil penalty that may be assessed under section 502(i) of the Act, or to the taxes imposed by section 4975(a) and (b) of the Code, if the records are not maintained, or are not available for examination as required by paragraph (k).
k. (1) Except as provided in paragraph (k)(2) and notwithstanding any provisions of subsection (a)(2) and (b) of section 504 of the Act, the records referred to in paragraph (j) are unconditionally available at their customary location for examination during normal business hours by—
(A) Any duly authorized employee or representative of the Department or the Internal Revenue Service;
(B) Any fiduciary of a Plan which has an interest in the Triumph Fund and has the authority to acquire or dispose of the interest of the Plan in the Triumph Fund, or any duly authorized employee or representative of such fiduciary; and
(C) Any participant or beneficiary of any Plan which has an interest in the Triumph Fund, or duly authorized representative of such participant or beneficiary.
(2) None of the persons described in paragraph (k)(1)(B) and (k)(1)(C) shall be authorized to examine trade secrets of Triumph or commercial or financial information which is privileged or confidential.
1. Triumph Capital Group, Inc., is a Delaware corporation which, together with its affiliates (collectively referred to herein as “Triumph”) has organized, sponsored and/or managed six (6) private equity (or high-yield debt) funds, involving total capital commitments of approximately one (1) billion dollars. The investors in the Triumph Funds are primarily sophisticated institutional investors, including employee benefit plans that are subject to the Act, private foundations, government plans, endowments and other tax exempt organizations, and a few wealthy individuals. The applicant represents that private equity funds, such as the Triumph Funds, allow Plans, particularly those having significant asset bases, to achieve greater diversification by asset class. As such, many of the investors in the existing Triumph Funds, and many potential investors in future Triumph Funds, will be Plan investors that are covered by the Act.
2. Each Triumph Fund in which any Plan invests is organized and operated so that the assets of such Triumph Fund will not be deemed to be “plan assets” under the Plan Asset Regulation. In most cases, this results from the fact that the Triumph Fund is operated in a manner which causes such Fund to qualify as a venture capital operating company.
29 CFR 2510.3-101(d) provides, in part, that an entity is a “venture capital operating company” if at least 50 percent of its assets are invested in venture capital investments, and the entity, in the ordinary course of its business, actually exercises management rights with respect to one or more operating companies in which it invests. 29 CFR 2510.3-101(d)(3) explains that a venture capital investment is an investment in an operating company (other than a venture capital operating company) as to which the investor has or obtains management rights. The term “management rights” is defined under 29 CFR 2510.3-101(d)(3)(ii) to mean contractual rights directly between the investor and an operating company to substantially participate in, or substantially influence the conduct of, the management of the operating company.
3. The Triumph Funds have typically been structured as limited partnerships with Triumph serving as general partner and, in some cases, having an interest as limited partner. (Triumph Funds organized in the future may be organized using different structures, such as limited liability companies.) The Triumph Funds are managed by Triumph which receives a pre-specified management fee as well as a pre-specified incentive allocation after investors have received distributions in excess of their capital contributions plus a pre-specified minimum rate of return. Because the Triumph Funds are generally expected to be organized as venture capital operating companies, the applicant represents that none of the Triumph Funds will hold “plan assets” and that the compensation paid to Triumph by the Triumph Funds will not be subject to the prohibitions under the Act.
One of Triumph's more recent funds, Triumph Partners III, L.P., has aggregate capital commitments of approximately $595,550,000 from 49 individual and institutional investors. Of the institutional investors, 6 investors are Plans that are covered under the provisions of the Act. These Plans have made a total capital commitment to Triumph Partners III, L.P. of $170,300,000.
4. Triumph Funds typically involve multiple closings with investors making their investment commitments (and therefore having a Determination Date) over a six to nine month period. Because of this staging, Triumph proposes, for purposes of the 15% limit contained in condition (f) above, to test each Plan investor's capital commitment with respect to the Triumph Fund in relation to the total capital commitments made by all the investors with respect to such Triumph Fund, at the
Each investor in a Triumph Fund, including each Plan investor, enters into a binding commitment to make capital contributions to the Triumph Fund in an amount specified by the investor. However, the investors' capital commitments typically are not funded at the outset. Rather, the capital is drawn down over time as the Triumph Fund identifies and makes its venture capital and other investments. Generally, capital is called down in installments ranging from 2.5 percent to 10 percent of the total commitment. In most cases, all of the capital commitments will have been drawn down within 3 to 5 years of the establishment of the Triumph Fund.
5. The Triumph Funds' investments include a wide variety of portfolio companies.
6. Triumph Funds may acquire interests in portfolio companies that are involved in providing money management services, brokerage services or other types of services which may be utilized by Plans and institutional investors. The portfolio company may be, or may become, a party in interest with respect to one or more Plans which hold an interest in the Triumph Fund when such portfolio company, or any subsidiary thereof, performs services for a Plan. The services may include fiduciary services (
If the Triumph Fund owns, directly or indirectly, a 10 percent or more interest in a service provider to a Plan, Triumph notes that the Fund will become a party in interest with respect to such Plan under section 3(14)(H) or (I) of the Act.
If a Triumph Fund were to become a party in interest with respect to a Plan, Triumph is concerned that a capital contribution made by the Plan subsequent to the Triumph Fund's becoming a party in interest would violate section 406(a)(1)(D) of the Act notwithstanding the fact that the capital contribution is being made pursuant to a pre-existing binding contractual commitment made by the Plan at a time when the Triumph Fund was not a party in interest. Therefore, to resolve these potential technical violations of the Act, Triumph has requested an administrative exemption from the Department.
7. The requested exemption is subject to a number of conditions that will apply both retroactively and prospectively. First, the Triumph Fund's party in interest status will, in all cases, arise after the Determination Date,
8. The conditions of the proposed exemption also require that each Plan receive the following initial and ongoing written disclosures from Triumph: (a) A copy of the private placement memorandum applicable to the Triumph Fund or another comparable document containing substantially the same information; (b) a copy of the limited partnership or other agreement establishing the Triumph Fund; (c) a copy of the subscription agreement applicable to the Triumph Fund, if any; (d) copies of the proposed exemption and the final exemption, if granted, once such documents are published in the
9. If the exemption is not granted, Triumph represents that it and the Triumph Funds would be required to make one of several adjustments designed to avoid the prohibited transaction concern that is the subject of this request. However, Triumph states that it does not believe these adjustments would be in the best interest of existing or prospective Plan investors. In this regard, Triumph represents that it might attempt to avoid the problem by not acquiring any portfolio companies which are, directly or indirectly, service providers to any of a Triumph Fund's Plan investors. However, Triumph does not consider this alternative satisfactory because it would limit the Triumph Fund's potential range of investments and diminish the expected investment return of such Fund. Moreover, Triumph points out that a portfolio company which is not a service provider at the time of the Triumph Fund's investment might become a service provider at some time in the future. Under these circumstances, Triumph represents that it would be impractical to restrict the activities of all portfolio companies in which the Triumph Fund invests to assure that no such portfolio company would ever become a service provider to any Triumph Fund's Plan investors. According to Triumph, such restriction
As another alternative, Triumph represents that it could limit the offering of interests in the Triumph Funds to those Plans which could take advantage of Prohibited Transaction Exemption (PTE) 84-14 (49 FR 9494 March 13, 1984), the Class Exemption for Plan Asset Transactions Determined by Independent Qualified Professional Asset Managers (QPAMs) or PTE 96-23 (61 FR 15975, April 10, 1996), the Class Exemption for Plan Asset Transactions Determined by In-House Asset Managers (INHAMs).
10. In summary, it is represented that the proposed transactions satisfy the statutory criteria of section 408(a) of the Act because: (a) The Triumph Fund's party in interest status with respect to the Plan will arise after the Plan has made its binding commitment to invest in the Triumph Fund, including its commitment to make future capital contributions to the Triumph Fund; (b) the decision by a Plan to make capital contributions to the Triumph Fund has been and will be made on behalf of the Plan by a Plan fiduciary which is independent of and unrelated to Triumph and the portfolio company that is acquired by the Triumph Fund; (c) Triumph will not otherwise provide investment advice to the Plan, within the meaning of 29 CFR 2510.3-21(c) of the Act, with respect to such Plan's assets that are invested in the Triumph Fund; (d) at the later of the Determination Date, or the date on which the Triumph Fund first becomes a party in interest with respect to such Plan investor, the capital commitment of the Plan (together with the capital commitment of any other related Plans maintained by the same employer, controlled group of corporations, or employee organization) will not exceed more than 15 percent of the total outstanding capital commitments made by all investors with respect to the Triumph Fund; (e) at the Determination Date, the percentage of the Plan's assets committed to be invested in the Triumph Fund has not and will not exceed 5 percent of the Plan's total assets, and the Plan's aggregate commitment to all Triumph Funds has not and will not exceed 25 percent of the Plan's total assets; (f) a Plan investing in a Triumph Fund has or will have, either alone or in combination with other plans, assets that are in excess of $50 million (as described under the conditions contained herein); and (g) Triumph has made or will make written disclosures to the Plan regarding the Triumph Fund, both at the time of the initial commitment to invest in such Fund as well as on an ongoing basis.
Those persons who may be interested in the pendency of the requested exemption include fiduciaries of Plans whose assets are currently invested in a Triumph Fund. Accordingly, the Department has determined that the only practical form of providing notice to such Plan fiduciaries is the distribution, by Triumph, of a copy of the proposed exemption by first class mail within 15 days of the date of publication of the pendency notice in the
Based on the facts and representations set forth in the application, the Department is considering granting an exemption under the authority of section 408(a) of the Act and in accordance with the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990).
If the exemption is granted, the restrictions of section 406(a) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) through (D) of the Code, shall not apply to (1) the receipt of certain stock (the Plan Stock) issued by Fidelity Insurance Group, Inc. (Group), a wholly owned subsidiary of FML, or (2) the receipt of plan credits (the Plan Credits), by or on behalf of a mutual member (the Mutual Member) of FML, which is an employee benefit plan (the Plan), other than the Employee Pension Plan of Fidelity Mutual Life Insurance Company (the FML Plan), in exchange for such Mutual Member's membership interest (the Membership Interest) in FML, in accordance with the terms of a plan of rehabilitation (the Third Amended Plan of Rehabilitation), approved by the Pennsylvania Commonwealth Court (the Court) and supervised by both the Court and a rehabilitator (the Rehabilitator) appointed by the Pennsylvania Insurance Commissioner (the Commissioner).
This proposed exemption is subject to the following conditions set forth below in Section II.
(a) The Third Amended Plan of Rehabilitation is approved by the Court, implemented in accordance with procedural and substantive safeguards that are imposed under Pennsylvania law and is subject to review and/or supervision by the Commissioner and the Rehabilitator. The Court determines whether the Third Amended Plan of Rehabilitation is fair and equitable to Mutual Members.
(b) Each Mutual Member has an opportunity to vote and comment on the Third Amended Plan of Rehabilitation at hearings held by the Court after full written disclosure is given to such Mutual Member by FML of the terms of the Plan.
(c) Participation by all Mutual Members in the Third Amended Plan of Rehabilitation, if approved by the Court, is mandatory, although Mutual Members may disclaim Plan Stock.
(d) Any determination by a Mutual Member which is a Plan to receive Plan Stock or Plan Credits is made by one or more independent fiduciaries of such
(e) Twenty percent of the Plan Stock is allocated to a Mutual Member based upon voting rights and eighty percent is allocated to a Mutual Member on the basis of the contribution of the Mutual Member's insurance or annuity contract (the Contract) to the surplus of FML. The contribution to FML's surplus is the actuarial calculation of both the historical and expected future profit contribution of the Contracts that have contributed to the surplus (
(f) The value of Plan Stock or Plan Credits that will be received by a Mutual Member will reflect the aggregate price paid by an independent investor (the Investor) to Group for common Stock (the Common Stock) and for plan credit shares (the Plan Credit Shares) in convertible preferred stock (the Preferred Stock) issued by Group.
(g) All Mutual Members that are Plans participate in the transactions on the same basis as all other Mutual Members that are not Plans.
(h) No Mutual Member pays any brokerage commissions or fees in connection with the receipt of Plan Stock or Plan Credits.
(i) All of FML's obligations to contractholders (the Contractholders) of the company which are Mutual Members remain in force upon endorsement and transfer to FLIC and are not affected by the Third Amended Plan of Rehabilitation.
For purposes of this proposed exemption:
(a) The term “FML” means the Fidelity Mutual Life Insurance Company (In Rehabilitation) and any affiliate of FML as defined in paragraph (c) of this Section III.
(b) The term “FLIC” means the Fidelity Life Insurance Company and any affiliate of FLIC as defined in paragraph (c) of this Section III.
(c) An “affiliate” of FML or FLIC includes—
(1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with FML or FLIC; (For purposes of this paragraph, the term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.) or
(2) Any officer, director or partner in such person.
(c) The term “Mutual Member” means a Contractholder whose name appears on FML's records as an owner of an FML Contract on the Record Date of the Third Amended Plan of Rehabilitation.
(d) The term “Investor” means the person (
(e) The term “Group Stock” refers to shares of Group Common Stock and to Group Preferred Stock, which will have a cumulative, annual dividend equal to 7 percent of its liquidation value. The Preferred Stock will be Series A stock having a par value of $0.01 per share and a liquidation preference and a redemption value of $25 per share.
(f) The term “Plan Stock” means the 3 million shares of Group Common Stock and the 2.8 million of Group Preferred Stock that will be allocated to Mutual Members.
(g) The term “Plan Credit” means either (1) additional paid up insurance for a traditional life policy or (2) credits to the account values for Contracts that are not traditional (such as a flexible premium policy). Under FML's Third Amended Plan of Plan of Rehabilitation, Plan Credits are to be allocated to certain Mutual Members in lieu of Plan Stock.
(h) The term “Plan Credit Shares” includes those shares of Plan Stock (
(i) The term “Policyholder Stock” means those shares of Group Common or Group Preferred Stock that will be issued and distributed to Mutual Members, consisting of Plan Stock plus any shares of Group Stock (in excess of Plan Stock) issued for purposes of correcting errors in the allocation of Plan Stock, less Plan Credit Shares and any disclaimed shares.
(j) The term “Investor Stock” means the 3.1 million shares of Group Common Stock (other than Plan Stock) and the Plan Credit Shares which, under the Third Amended Plan of Rehabilitation, are sold to the Investor pursuant to bid procedures and the Investment Agreement.
1. FML is a mutual life insurance company that was founded in 1878 and organized to conduct a life insurance business in Pennsylvania. FML maintains its principal place of business at 250 King of Prussia Road, Radnor, Pennsylvania. Prior to the rehabilitation proceedings that are described herein, FML was licensed to issue life insurance policies in 47 states and the District of Columbia.
Because FML has been organized as a mutual form of life insurance company, it has no stockholders. Instead, the owners of its Contracts (i.e., the Contractholders) have a dual legal relationship with FML. In this regard, the Contractholders are vested with rights in the company, such as such as the right to vote and the right to an allocable portion of the divisible surplus. In addition, the Contractholders have contractual rights under their Contracts with FML.
FML has approximately 3,997 Contracts that are related to qualified Plans. FML also sponsors the FML Plan, a defined benefit plan, which had 254 participants and total assets of $17,282,009 as of December 31, 1998.
2. FML owns all of the stock of Group, a Pennsylvania-domiciled stock corporation. Group, in turn, owns all of the stock of FLIC, also a Pennsylvania corporation. Group purchased the FLIC stock from an unrelated party on June 30, 1995. FLIC is a stock life insurance company duly licensed, chartered and domesticated in Pennsylvania and is qualified to conduct a life insurance business in substantially all jurisdictions where FML has business, except in New York and New Hampshire. FLIC has filed applications for licenses to conduct business in these states.
3. During late 1990, the Pennsylvania Insurance Department began monitoring FML's operations because of concern over FML's extensive real estate holdings, decline in surplus and unrealized capital losses. In response to an increase in Contract surrenders and loan requests for the period October 26 to November 5, 1992, the Pennsylvania Insurance Department and FML's Board of Directors petitioned the Court for an Order of Rehabilitation. As a result, FML was placed in rehabilitation by an order of the Court on November 6, 1992, pursuant to the Pennsylvania Insurance Department Act, as amended. Under the Order of Rehabilitation, a moratorium was imposed on cash distributions, Contract surrenders, withdrawals and policy loans, except in certain hardship situations. At the time of the rehabilitation, FML had assets with a book value of approximately $1.2 billion. Of this amount, a significant portion of FML's assets was comprised
4. On June 30, 1994, the Rehabilitator filed the original Plan of Rehabilitation for The Fidelity Mutual Life Insurance Company (the Original Plan of Rehabilitation) with the Court. The Original Plan of Rehabilitation called for the transfer of FML insurance policies to “Newco,” the name designated for the stock life insurance company that was to be purchased by FML and Group. Under the Original Plan of Rehabilitation, all Contractholders of FML would be allocated one share of Group Stock, all Mutual Members would be made whole for any “Impairment”
5. After the filing of the Original Plan of Rehabilitation with the Court in June 1994, the Rehabilitator proceeded to work with an investment banker to solicit and select an Investor.
6. In January 1995, a new Commissioner was appointed who became the new Rehabilitator for FML. In March 1995, the Court approved the appointment of a Policyholder Committee at the request of a group of former FML agents. Subsequently, the Policyholder Committee engaged counsel, an accounting firm and an investment banking firm. Also, in March 1995, a bidder who was not selected as the Investor objected to the First Amended Plan of Rehabilitation and ultimately sought permission to intervene and propose an alternative rehabilitation plan. In May 1995, the Policyholder Committee filed objections to the First Amended Plan of Rehabilitation and specifically objected to the selected investor, Presidential. Also in May 1995, Presidential petitioned the Court for permission to intervene in the rehabilitation proceedings. In early September 1995, the Deputy Rehabilitator for FML resigned and a Deputy Commissioner from the Pennsylvania Insurance Department was assigned to oversee the daily affairs of FML. Negotiations with the Policyholder Committee, Presidential, and the objecting bidder continued during the remainder of 1995 through 1996. In May 1996, Presidential filed a petition for payment of expenses and liquidated damages under the 1995 Stock Purchase Agreement and the Policyholder Committee and former FML agents objected to that petition.
7. On June 25, 1996, the Rehabilitator filed the Second Amended Plan for the Rehabilitation of The Fidelity Mutual Life Insurance Company (the Second Amended Plan of Rehabilitation) with the Court. The framework for the Second Amended Plan was substantially the same as the predecessor Plans but there were significant differences. For example, the concept of Plan Credits was introduced for the first time. In addition, Group could sell 35 percent of its issued and outstanding common stock to the Investor under bid procedures to be approved by the Court. However, Group could not issue any debt instruments. The other 65 percent of the Group Stock was to be allocated to Contractholders and creditors, except that the stock would no longer be held and distributed by a stock trust, but would be distributed directly to the Contractholders and creditors around the Closing Date. Based on an assumed Closing Date of June 30, 1997, Impairment had increased to an estimated total of $57.1 million. Also, the Liquidation Value as of September 30, 1995 was estimated to be 95 percent of the cash surrender value of any Contractholder who elected to opt out of the Plan. The moratorium period of two years in the previous Plans was reduced to one year and the moratorium charge would be equal to the Liquidation Discount (5 percent of September 30, 1995).
Notice of the filing of the Second Amended Plan of Rehabilitation was not sent to Contractholders and other interested persons because the Policyholder Committee filed significant objections to both the Notice Package and the Second Amended Plan of Rehabilitation, including an objection asserting that the Contractholders should receive cash rather than Group Stock for Impairment. In July 1996,
8. Negotiations with the Policyholder Committee continued and the Third Amended Plan for the Rehabilitation of The Fidelity Mutual Life Insurance Company (
By an order of the Court dated April 30, 1996, FML increased policyholder dividends and declared interest crediting rates of certain Contracts beginning in 1996. In addition, FML petitioned the Court to pay an increased one-time policyholder dividend and declared interest credit beginning in 1999 because of its financial capacity to do so and in recognition of the fact that the policyholder dividends and declared interest credits paid on its Contracts had generally been lower during the period of rehabilitation than those for comparable policies of other insurers.
Subject to the approval of the Court, the Rehabilitator is proposing that FML transfer, on the Closing Date,
Therefore, FML requests an administrative exemption from the Department with respect to the receipt of Plan Stock or the receipt of Plan Credits by Mutual Members that are Plans. FML is not requesting, nor is the Department providing, exemptive relief with respect to the receipt of Plan Stock by the FML Plan because it believes such stock will constitute “qualifying employer securities” within the meaning of section 407(d)(5) of the Act. Therefore, FML represents that the acquisition of Plan Stock by the FML Plan will satisfy the requirements of section 408(e) of the Act.
9. As with the other Plans of Rehabilitation, under the Third Amended Plan of Rehabilitation, an independent party (
Under the Third Amended Plan of Rehabilitation, the Investor may be a foreign or domestic entity such as a life/health insurer, a property/casualty insurer, an investment company or other investment fund, a joint venture, general partnership or a limited partnership. In addition, the Investor may be required to satisfy certain ratings or capitalization criteria. For example, if the Investor is a property/casualty insurer, it must have an A.M. Best rating of at least A−, a minimum Total Adjusted Capital of $500 million, and a ratio of Total Adjusted Capital to Authorized Control Level Risk Based Capital of 5:1 or better. If the Investor is not a publicly-rated entity but is an investment company or other investment fund, it must have a net worth of at least $500 million and minimum available equity of $150 million. Further, the Investor must be either a Qualified Institutional Buyer within the meaning of Rule 144A under the Securities Exchange Act of 1933 (the 1933 Act), an Institutional Accredited Investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the 1933 Act, or a sophisticated institutional investor not requiring the protections of the registration requirements of the 1933 Act.
10. The rehabilitation strategy, which is aimed at maximizing the interests of FML's Contractholders and creditors, is to transfer FML's insurance operations into a stock life insurance company. The Contractholders and creditors will be provided benefits in accordance with the priorities for distribution to be determined under the Pennsylvania law applicable to insurance company rehabilitations.
Thus, the treatment of FML's Contracts and the Contractholder's interests thereunder is a significant aspect of the Third Amended Plan of Rehabilitation. These Contracts include, but are not limited to, traditional ordinary life insurance Contracts and universal life insurance Contracts.
11. Section 2.01 of the Third Amended Plan of Rehabilitation specifies a classification of claims (the Claims) and interests and priorities governing the receipt of distributions. The rights provided the Contractholders under section 2.04 of the Third Amended Plan of Rehabilitation (for the Contracts to be modified by endorsement in FML and reinsured by FLIC) will have a Class 3 priority (along with certain other Claims under the Contracts), following certain secured and administrative claims which are classified as Class 1 and Class 2 Claims. Classes 4 through 9 Claims provide for claims for governments, general creditors, employees, debt holders, etc. Class 10, the last and residual category,
Allowed Claims 1 through 9 will be paid in full in cash. Each Contractholder having a Contract in force on the Closing Date will have his or her Contract assumed and reinsured by FLIC as of the Closing Date. In addition, at Closing, Class 10 Claims will be satisfied by an allocation of Plan Stock in exchange for the Mutual Member's relinquishment of his or her membership interest in FML.
In general, it is the Department's view that, if an insurance policy is purchased with assets of an employee benefit plan, including participant contributions, and if there exist any participants under the plan (as defined at 29 CFR 2510.3-3) at the time when FML incurs the obligation to distribute Plan Stock or Plan Credits, then such consideration would constitute an assets of such employee benefit plan. Under these circumstances, the appropriate plan fiduciaries must take all necessary steps to safeguard the assets of the plan in order to avoid engaging in a violation of the fiduciary responsibility provisions of the Act.
12. Under Section 4.05 of the Third Amended Plan of Rehabilitation, any Contract held in connection with a qualified retirement plan or an arrangement described in section 401(a), 403(a) or 408 of the Code, other than a Contract held by a trustee under a plan described in section 401(a) of the Code, (
13. As noted above, the Plan Stock allocated to Mutual Members for Class 10 Claims will consist of Group Common Stock and Preferred Stock. Twenty percent of the Plan Stock will be allocated based on voting rights
14. Each Mutual Member which is a Class 10 Claimant will be allocated Group Common Stock and Preferred Stock, in the ratio of 3 shares of Common Stock to 2.8 shares of Preferred Stock. At closing, the total value of the Plan Stock, immediately prior to the sale of Common Stock to the Investor, is projected at approximately $100 million. Of this amount, 70 percent of the value of the Plan Stock will be represented by the Preferred Stock, which will have an estimated value of $70 million. The 30 percent remaining Plan Stock will consist of Common Stock and it will have a value of approximately $30 million. If desired, a Mutual Member may disclaim any interest in the Plan Stock. Although the Mutual Member will receive no consideration for any disclaimed Stock, such Mutual Member will continue to retain all benefits.
The distribution of the Group Stock will occur at Closing when Group will issue and distribute Plan Stock on behalf of FML to Mutual Members. FML, simultaneously, will return all Group Stock to Group for cancellation. Disclaimed shares will not be issued or, if issued, will be canceled and returned to Group.
15. There will be 40 million shares, par value $.01 per share, of Common Stock authorized and 6.1 million shares of such stock outstanding at the Closing Date. The Common Stock will have voting rights of one vote per share.
Group will sell approximately 3.1 million shares of its Common Stock to the Investor in a private placement pursuant to bid procedures approved by the Court and utilize the majority of the sale proceeds to supplement the capital of FLIC. FML will designate a maximum of 3 million shares of the remaining Common Stock as the “Common Stock component” of Plan Stock. Included in this amount will be between 15,000 and 180,000 shares of Common Stock allocable to Mutual Members who will receive Plan Credits in lieu of Plan Stock.
In addition, Group will sell to the Investor the shares of Common Stock and Preferred Stock equal to the Plan Credits
At the Closing Date, Group will have authorized 10 million shares and will have outstanding 2.8 million shares of Preferred Stock, all of which will be allocated as Plan Stock. There will be no other class of Preferred Stock.
The Preferred Stock will have a liquidation preference and redemption value of $25 per share. The holders of Preferred Stock will be entitled to cumulative annual dividends, payable quarterly, at the rate of 7 percent per annum of the liquidation preference, resulting in an annual dividend of $1.75 per share. Shares of Preferred Stock will be non-voting except (a) when four quarterly dividends on such class of stock are in arrears, (b) for certain matters pertaining to that class of stock, or (c) as otherwise required by law. Upon liquidation of Group, a share of Preferred Stock will be entitled to a distribution preference of $25 per share plus the amount of any accrued but unpaid dividends. Group, at its option, may redeem shares of Preferred Stock at any time after 20 years from the later of the issue date and the Closing Date, at a redemption price of $25 per share plus the amount of any accrued but unpaid dividends.
A share of Preferred Stock is convertible into shares of Common Stock at any time at the option of the holder. The number of shares of Common Stock that will be received by a Mutual Member upon such a conversion will be determined by dividing $25 by the result of multiplying 1.20 times the price per share paid by the Investor for the Common Stock (which price will be determined by the competitive bidding process approved by the Court). The conversion rate for the Preferred Stock is also subject to various anti-dilution provisions.
16. Under Section 4.10 of the Third Amended Plan of Rehabilitation, Policyholder Stock
Investor Stock will be issued in a private placement pursuant to the exemption from the registration requirements of the 1933 Act provided by section 4(2) thereof and the rules and regulations thereunder. Neither Policyholder Stock nor Investor Stock will be registered under the 1933 Act.
Group Stock will be registered under section 12(g) of the Securities Exchange Act of 1934.
17. Since the participation by all Mutual Members in the Third Amended Plan of Rehabilitation will be mandatory (although Mutual Members may disclaim Plan Stock), any determination by a Mutual Member which is a Plan to receive Plan Stock or Plan Credits will be made by one or more Plan fiduciaries which are independent of FML and its affiliates. As a result, neither FML nor any of its affiliates will exercise investment discretion nor render “investment advice” within the meaning of 29 CFR 2510.3-21(c) with respect to an independent Plan fiduciary's decision to elect to receive Plan Stock or Plan Credits.
In addition, all Mutual Members that are Plans will participate in the transactions on the same basis as all other Mutual Members that are not Plans. Moreover, no Mutual Member will pay any brokerage commissions or fees in connection with the receipt of Plan Stock or Plan Credits. Finally, all of FML's Contractholder obligations will remain in force upon endorsement and transfer to FLIC and will essentially be unaffected by the Third Amended Plan of Rehabilitation.
18. Mutual Members will not be restricted from selling or otherwise transferring the Plan Stock received, including converting the Preferred Stock to Common Stock, although Group, its affiliates and the Investor are subject to restrictions on purchasing or redeeming such Stock.
19. The Plan will be approved by and be under the continued jurisdiction of the Court. The Court's review will include, among other matters, (a) a determination, after hearings available to Contractholders, creditors and other interested parties, the procedural and substantive fairness of the terms and conditions of the allocation and distribution of the Plan Stock in exchange for Membership Interests, including a review of the methodology for allocating Plan Stock based on the basis of contribution to surplus and voting rights and (b) approval of the modification, by endorsement, of the terms and conditions of the Contract.
FLIC and Group will be subject to the jurisdiction of the Court and the supervision of the Rehabilitator prior to and through the Closing Date. In addition, the Court will retain, after the Closing Date, exclusive jurisdiction over Group and FLIC to enforce the provisions of the Third Amended Plan of Rehabilitation to ensure that its intent and purposes are carried out and given effect.
FML will discontinue its business operations, liquidate and dissolve shortly after completing all transfers. FLIC will continue the business of FML in a substantially unchanged manner after the transfer from FML by receiving premiums, paying claims and generally administering the assumed Endorsed Contracts.
Further, for a period of 2 years following the Closing Date, the Investor will not be allowed to cause a change to the business plan for FLIC without the prior written approval of the Department if the change might reasonably result in the dissolution of FLIC or the operation of FLIC in a “run off” mode.
20. In summary, it is represented that the proposed transactions will satisfy the statutory criteria for an exemption under section 408(a) of the Act because:
(a) The Third Amended Plan of Rehabilitation will be implemented in accordance with procedural and substantive safeguards that are imposed under Pennsylvania law and by the Court and will be subject to review and supervision of the Court and/or the Rehabilitator.
(b) The Court will review the terms of the Third Amended Plan of Rehabilitation and will approve such Plan following a determination and public hearing or hearings that the Plan is fair and equitable to all Mutual Members.
(c) Each Mutual Member will have an opportunity to participate in any hearing or hearings before the Court regarding the approval of the Third Amended Plan of Rehabilitation.
(d) Although participation by all Mutual Members in FML's Third Amended Plan of Rehabilitation will be mandatory (although Mutual Members may disclaim Plan Stock), the determination of whether a Mutual Member receives Plan Stock or Plan Credits will be made by one or more independent fiduciaries of such Plan and not by FML, Group or FLIC. As a result, FML nor any of its affiliates will exercise investment discretion nor render “investment advice” within the meaning of 29 CFR 2510.3-21(c) with respect to the decision by the independent Plan fiduciary to elect Plan Stock or Plan Credits.
(e) After each Mutual Member is allocated its share of Plan Stock based on voting rights, the remaining consideration will be allocated based
(f) The value of Plan Stock or Plan Credits that will be received by a Mutual Member will reflect the prices paid by the Investor for Group Common Stock and for Plan Credit Shares.
(g) All Plans will participate in the exemption transaction on the same basis as other Mutual Members that are not Plans.
(h) No Plan will pay any brokerage commissions or fees in connection with receipt of Plan Stock or Plan Credits.
(i) FML's Contractholder obligations will remain in force upon endorsement and transfer to FLIC.
FML will provide notice of the proposed exemption to Mutual Members which are Plans within 5 days of the publication of the notice of proposed exemption in the
Ms. Jan D. Broady of the Department, telephone (202) 219-8881. (This is not a toll-free number.)
A. Effective January 4, 2000, the restrictions of sections 406(a) and 407(a) of the Act, and the taxes imposed by section 4975(a) and (b) of the Code by reason of section 4975(c)(1)(A) through (D) of the Code, shall not apply to the following transactions involving trusts and certificates evidencing interests therein:
(1) The direct or indirect sale, exchange or transfer of certificates in the initial issuance of certificates between the sponsor or underwriter and an employee benefit plan when the sponsor, servicer, trustee or insurer of a trust, the underwriter of the certificates representing an interest in the trust, or an obligor is a party in interest with respect to such plan;
(2) The direct or indirect acquisition or disposition of certificates by a plan in the secondary market for such certificates; and
(3) The continued holding of certificates acquired by a plan pursuant to subsection I.A.(1) or (2).
Notwithstanding the foregoing, section I.A. does not provide an exemption from the restrictions of sections 406(a)(1)(E), 406(a)(2) and 407 for the acquisition or holding of a certificate on behalf of an Excluded Plan by any person who has discretionary authority or renders investment advice with respect to the assets of that Excluded Plan.
B. Effective January 4, 2000, the restrictions of sections 406(b)(1) and 406(b)(2) of the Act, and the taxes imposed by section 4975(a) and (b) of the Code by reason of section 4975(c)(1)(E) of the Code, shall not apply to:
(1) The direct or indirect sale, exchange or transfer of certificates in the initial issuance of certificates between the sponsor or underwriter and a plan when the person who has discretionary authority or renders investment advice with respect to the investment of plan assets in the certificates is (a) an obligor with respect to 5 percent or less of the fair market value of obligations or receivables contained in the trust, or (b) an affiliate of a person described in (a); if:
(i) The plan is not an Excluded Plan;
(ii) Solely in the case of an acquisition of certificates in connection with the initial issuance of the certificates, at least 50 percent of each class of certificates in which plans have invested is acquired by persons independent of the members of the Restricted Group and at least 50 percent of the aggregate interest in the trust is acquired by persons independent of the Restricted Group;
(iii) a plan's investment in each class of certificates does not exceed 25 percent of all of the certificates of that class outstanding at the time of the acquisition; and
(iv) immediately after the acquisition of the certificates, no more than 25 percent of the assets of a plan with respect to which the person has discretionary authority or renders investment advice are invested in certificates representing an interest in a trust containing assets sold or serviced by the same entity.
(2) The direct or indirect acquisition or disposition of certificates by a plan in the secondary market for such certificates, provided that the conditions set forth in paragraphs B.(1)(i), (iii) and (iv) are met; and
(3) The continued holding of certificates acquired by a plan pursuant to subsection I.B.(1) or (2).
C. Effective January 4, 2000, the restrictions of sections 406(a), 406(b) and 407(a) of the Act, and the taxes imposed by section 4975(a) and (b) of the Code by reason of section 4975(c) of the Code, shall not apply to transactions in connection with the servicing, management and operation of a trust, provided:
(1) Such transactions are carried out in accordance with the terms of a binding pooling and servicing agreement; and
(2) The pooling and servicing agreement is provided to, or described in all material respects in, the prospectus or private placement memorandum provided to investing plans before they purchase certificates issued by the trust.
Notwithstanding the foregoing, section I.C. does not provide an exemption from the restrictions of section 406(b) of the Act, or from the taxes imposed by reason of section 4975(c) of the Code, for the receipt of a fee by a servicer of the trust from a person other than the trustee or sponsor, unless such fee constitutes a “qualified administrative fee” as defined in section III.S.
D. Effective January 4, 2000, the restrictions of sections 406(a) and 407(a) of the Act, and the taxes imposed by sections 4975(a) and (b) of the Code by
A. The relief provided under Part I is available only if the following conditions are met:
(1) The acquisition of certificates by a plan is on terms (including the certificate price) that are at least as favorable to the plan as they would be in an arm's-length transaction with an unrelated party;
(2) The rights and interests evidenced by the certificates are not subordinated to the rights and interests evidenced by other certificates of the same trust;
(3) The certificates acquired by the plan have received a rating from a Rating Agency (as defined in section III.W.) at the time of such acquisition that is in one of the three highest generic rating categories;
(4) The trustee is not an affiliate of any other member of the Restricted Group. However, the trustee shall not be considered to be an affiliate of a servicer solely because the trustee has succeeded to the rights and responsibilities of the servicer pursuant to the terms of a pooling and servicing agreement providing for such succession upon the occurrence of one or more events of default by the servicer;
(5) The sum of all payments made to and retained by the underwriters in connection with the distribution or placement of certificates represents not more than reasonable compensation for underwriting or placing the certificates; the sum of all payments made to and retained by the sponsor pursuant to the assignment of obligations (or interests therein) to the trust represents not more than the fair market value of such obligations (or interests); and the sum of all payments made to and retained by the servicer represents not more than reasonable compensation for the servicer's services under the pooling and servicing agreement and reimbursement of the servicer's reasonable expenses in connection therewith;
(6) The plan investing in such certificates is an “accredited investor” as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933; and
(7) In the event that the obligations used to fund a trust have not all been transferred to the trust on the closing date, additional obligations as specified in subsection III.B.(1) may be transferred to the trust during the pre-funding period (as defined in section III.BB.) in exchange for amounts credited to the pre-funding account (as defined in section III.Z.), provided that:
(a) The pre-funding limit (as defined in section III.AA.) is not exceeded;
(b) All such additional obligations meet the same terms and conditions for eligibility as those of the original obligations used to create the trust corpus (as described in the prospectus or private placement memorandum and/or pooling and servicing agreement for such certificates), which terms and conditions have been approved by a Rating Agency. Notwithstanding the foregoing, the terms and conditions for determining the eligibility of an obligation may be changed if such changes receive prior approval either by a majority of the outstanding certificateholders or by a Rating Agency;
(c) The transfer of such additional obligations to the trust during the pre-funding period does not result in the certificates receiving a lower credit rating from a rating agency upon termination of the pre-funding period than the rating that was obtained at the time of the initial issuance of the certificates by the trust;
(d) The weighted average annual percentage interest rate (the average interest rate) for all of the obligations in the trust at the end of the pre-funding period will not be more than 100 basis points lower than the average interest rate for the obligations which were transferred to the trust on the closing date;
(e) In order to ensure that the characteristics of the receivables actually acquired during the pre-funding period are substantially similar to those which were acquired as of the closing date, the characteristics of the additional obligations will be either monitored by a credit support provider or other insurance provider which is independent of the sponsor, or an independent accountant retained by the sponsor will provide the sponsor with a letter (with copies provided to the Rating Agency, the underwriter and the trustees) stating whether or not the characteristics of the additional obligations conform to the characteristics of such obligations described in the prospectus, private placement memorandum and/or pooling and servicing agreement. In preparing such letter, the independent accountant will use the same type of procedures as were applicable to the obligations which were transferred as of the closing date;
(f) The pre-funding period shall be described in the prospectus or private placement memorandum provided to investing plans; and
(g) The trustee of the trust (or any agent with which the trustee contracts to provide trust services) will be a substantial financial institution or trust company experienced in trust activities and familiar with its duties, responsibilities and liabilities as a fiduciary under the Act. The trustee, as the legal owner of the obligations in the trust, will enforce all the rights created in favor of certificateholders of such trust, including employee benefit plans subject to the Act.
B. Neither any underwriter, sponsor, trustee, servicer, insurer, nor any obligor, unless it or any of its affiliates has discretionary authority or renders investment advice with respect to the plan assets used by a plan to acquire certificates, shall be denied the relief provided under Part I, if the provision of subsection II.A.(6) above is not satisfied with respect to acquisition or holding by a plan of such certificates, provided that (1) such condition is disclosed in the prospectus or private placement memorandum; and (2) in the case of a private placement of certificates, the trustee obtains a representation from each initial purchaser which is a plan that it is in compliance with such condition, and obtains a covenant from each initial purchaser to the effect that, so long as such initial purchaser (or any transferee of such initial purchaser's certificates) is required to obtain from its transferee a representation regarding compliance with the Securities Act of 1933, any such transferees will be required to make a written representation regarding compliance with the condition set forth in subsection II.A.(6) above.
For purposes of this proposed exemption:
A. “Certificate” means:
(1) A certificate—
(a) That represents a beneficial ownership interest in the assets of a trust; and
(b) That entitles the holder to pass-through payments of principal, interest, and/or other payments made with respect to the assets of such trust; or
(2) A certificate denominated as a debt instrument—
(a) That represents an interest in a Real Estate Mortgage Investment Conduit (REMIC) or a Financial Asset Securitization Investment Trust (FASIT) within the meaning of section 860D(a) or section 860L, respectively, of the Code; and
(b) That is issued by, and is an obligation of, a trust; with respect to certificates defined in (1) and (2) above for which McDonald or any of its affiliates is either (i) the sole underwriter or the manager or co-manager of the underwriting syndicate, or (ii) a selling or placement agent.
For purposes of this proposed exemption, references to “certificates representing an interest in a trust” include certificates denominated as debt which are issued by a trust.
B. “Trust” means an investment pool, the corpus of which is held in trust and consists solely of:
(1) (a) Secured consumer receivables that bear interest or are purchased at a discount (including, but not limited to, home equity loans and obligations secured by shares issued by a cooperative housing association); and/or
(b) Secured credit instruments that bear interest or are purchased at a discount in transactions by or between business entities (including, but not limited to, qualified equipment notes secured by leases, as defined in section III.T); and/or
(c) Obligations that bear interest or are purchased at a discount and which are secured by single-family residential, multi-family residential and commercial real property (including obligations secured by leasehold interests on commercial real property); and/or
(d) Obligations that bear interest or are purchased at a discount and which are secured by motor vehicles or equipment, or qualified motor vehicle leases (as defined in section III.U); and/or
(e) “Guaranteed governmental mortgage pool certificates,” as defined in 29 CFR 2510.3-101(i)(2); and/or
(f) Fractional undivided interests in any of the obligations described in clauses (a)-(e) of this section B.(1);
(2) property which had secured any of the obligations described in subsection B.(1);
(3) (a) Undistributed cash or temporary investments made therewith maturing no later than the next date on which distributions are to be made to certificateholders; and/or
(b) Cash or investments made therewith which are credited to an account to provide payments to certificateholders pursuant to any yield supplement agreement or similar yield maintenance arrangement to supplement the interest rates otherwise payable on obligations described in subsection III.B.(1) held in the trust, provided that such arrangements do not involve swap agreements or other notional principal contracts; and/or
(c) Cash transferred to the trust on the closing date and permitted investments made therewith which:
(i) Are credited to a pre-funding account established to purchase additional obligations with respect to which the conditions set forth in clauses (a)-(g) of subsection II.A.(7) are met and/or;
(ii) Are credited to a capitalized interest account (as defined in section III.X.); and
(iii) Are held in the trust for a period ending no later than the first distribution date to certificateholders occurring after the end of the pre-funding period.
For purposes of this clause (c) of subsection III.B.(3), the term “permitted investments” means investments which are either: (i) Direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by the United States, or any agency or instrumentality thereof, provided that such obligations are backed by the full faith and credit of the United States or (ii) have been rated (or the obligor has been rated) in one of the three highest generic rating categories by a rating agency; are described in the pooling and servicing agreement; and are permitted by the rating agency; and
(4) Rights of the trustee under the pooling and servicing agreement, and rights under any insurance policies, third-party guarantees, contracts of suretyship, yield supplement agreements described in clause (b) of subsection III.B.(3) and other credit support arrangements with respect to any obligations described in subsection III.B.(1).
Notwithstanding the foregoing, the term “trust” does not include any investment pool unless: (i) the investment pool consists only of assets of the type described in clauses (a) through (f) of subsection III.B.(1) which have been included in other investment pools, (ii) certificates evidencing interests in such other investment pools have been rated in one of the three highest generic rating categories by a Rating Agency for at least one year prior to the plan's acquisition of certificates pursuant to this proposed exemption, and (iii) certificates evidencing interests in such other investment pools have been purchased by investors other than plans for at least one year prior to the plan's acquisition of certificates pursuant to this proposed exemption.
C. “Underwriter” means:
(1) McDonald;
(2) Any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with McDonald; or
(3) Any member of an underwriting syndicate or selling group of which McDonald or a person described in (2) is a manager or co-manager with respect to the certificates.
D. “Sponsor” means the entity that organizes a trust by depositing obligations therein in exchange for certificates.
E. “Master Servicer” means the entity that is a party to the pooling and servicing agreement relating to trust assets and is fully responsible for servicing, directly or through subservicers, the assets of the trust.
F. “Subservicer” means an entity which, under the supervision of and on behalf of the master servicer, services obligations contained in the trust, but is not a party to the pooling and servicing agreement.
G. “Servicer” means any entity which services obligations contained in the trust, including the master servicer and any subservicer.
H. “Trustee” means the trustee of the trust, and in the case of certificates which are denominated as debt instruments, also means the trustee of the indenture trust.
I. “Insurer” means the insurer or guarantor of, or provider of other credit support for, a trust. Notwithstanding the foregoing, a person is not an insurer solely because it holds securities representing an interest in a trust which are of a class subordinated to certificates representing an interest in the same trust.
J. “Obligor” means any person, other than the insurer, that is obligated to make payments with respect to any obligation or receivable included in the trust. Where a trust contains qualified motor vehicle leases or qualified equipment notes secured by leases, “obligor” shall also include any owner of property subject to any lease included in the trust, or subject to any lease securing an obligation included in the trust.
K. “Excluded Plan” means any plan with respect to which any member of the Restricted Group is a “plan sponsor” within the meaning of section 3(16)(B) of the Act.
L. “Restricted Group” with respect to a class of certificates means:
(1) Each underwriter;
(2) Each insurer;
(3) The sponsor;
(4) The trustee;
(5) Each servicer;
(6) Any obligor with respect to obligations or receivables included in the trust constituting more than 5 percent of the aggregate unamortized principal balance of the assets in the trust, determined on the date of the initial issuance of certificates by the trust; or
(7) Any affiliate of a person described in (1)-(6) above.
M. “Affiliate” of another person includes:
(1) Any person directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such other person;
(2) Any officer, director, partner, employee, relative (as defined in section 3(15) of the Act), a brother, a sister, or a spouse of a brother or sister of such other person; and
(3) Any corporation or partnership of which such other person is an officer, director or partner.
N. “Control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.
O. A person will be “independent” of another person only if:
(1) Such person is not an affiliate of that other person; and
(2) The other person, or an affiliate thereof, is not a fiduciary who has investment management authority or renders investment advice with respect to any assets of such person.
P. “Sale” includes the entrance into a forward delivery commitment (as defined in section Q below), provided:
(1) The terms of the forward delivery commitment (including any fee paid to the investing plan) are no less favorable to the plan than they would be in an arm's-length transaction with an unrelated party;
(2) The prospectus or private placement memorandum is provided to an investing plan prior to the time the plan enters into the forward delivery commitment; and
(3) At the time of the delivery, all conditions of this proposed exemption (if granted) applicable to sales are met.
Q. “Forward delivery commitment” means a contract for the purchase or sale of one or more certificates to be delivered at an agreed future settlement date. The term includes both mandatory contracts (which contemplate obligatory delivery and acceptance of the certificates) and optional contracts (which give one party the right but not the obligation to deliver certificates to, or demand delivery of certificates from, the other party).
R. “Reasonable compensation” has the same meaning as that term is defined in 29 CFR 2550.408c-2.
S. “Qualified Administrative Fee” means a fee which meets the following criteria:
(1) The fee is triggered by an act or failure to act by the obligor other than the normal timely payment of amounts owing in respect of the obligations;
(2) The servicer may not charge the fee absent the act or failure to act referred to in (1);
(3) The ability to charge the fee, the circumstances in which the fee may be charged, and an explanation of how the fee is calculated are set forth in the pooling and servicing agreement; and
(4) The amount paid to investors in the trust will not be reduced by the amount of any such fee waived by the servicer.
T. “Qualified Equipment Note Secured By A Lease” means an equipment note:
(1) Which is secured by equipment which is leased;
(2) Which is secured by the obligation of the lessee to pay rent under the equipment lease; and
(3) With respect to which the trust's security interest in the equipment is at least as protective of the rights of the trust as would be the case if the equipment note were secured only by the equipment and not the lease.
U. “Qualified Motor Vehicle Lease” means a lease of a motor vehicle where:
(1) The trust owns or holds a security interest in the lease;
(2) The trust owns or holds a security interest in the leased motor vehicle; and
(3) The trust's security interest in the leased motor vehicle is at least as protective of the trust's rights as would be the case if the trust consisted of motor vehicle installment loan contracts.
V. “Pooling and Servicing Agreement” means the agreement or agreements among a sponsor, a servicer and the trustee establishing a trust. In the case of certificates which are denominated as debt instruments, “Pooling and Servicing Agreement” also includes the indenture entered into by the trustee of the trust issuing such certificates and the indenture trustee.
W. “Rating Agency” means Standard & Poor's Structured Rating Group (S&P's), Moody's Investors Service, Inc. (Moody's), Duff & Phelps Credit Rating Co. (D & P) or Fitch IBCA, Inc. (Fitch) or their successors;
X. “Capitalized Interest Account” means a trust account: (i) which is established to compensate certificateholders for shortfalls, if any, between investment earnings on the pre-funding account and the pass-through rate payable under the certificates; and (ii) which meets the requirements of clause (c) of subsection III.B.(3).
Y. “Closing Date” means the date the trust is formed, the certificates are first issued and the trust's assets (other than those additional obligations which are to be funded from the pre-funding account pursuant to subsection II.A.(7)) are transferred to the trust.
Z. “Pre-Funding Account” means a trust account: (i) Which is established to purchase additional obligations, which obligations meet the conditions set forth in clauses (a)-(g) of subsection II.A.(7); and (ii) which meets the requirements of clause (c) of subsection III.B.(3).
AA. “Pre-Funding Limit” means a percentage or ratio of the amount allocated to the pre-funding account, as compared to the total principal amount of the certificates being offered which is less than or equal to 25 percent.
BB. “Pre-Funding Period” means the period commencing on the closing date and ending no later than the earliest to occur of: (i) The date the amount on deposit in the pre-funding account is less than the minimum dollar amount specified in the pooling and servicing agreement; (ii) the date on which an event of default occurs under the pooling and servicing agreement; or (iii) the date which is the later of three months or 90 days after the closing date.
CC. “McDonald” means McDonald Investments Inc. and its affiliates.
The Department notes that this proposed exemption is included within the meaning of the term “Underwriter Exemption” as it is defined in section V(h) of Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995), the Class Exemption for Certain Transactions Involving Insurance Company General Accounts at (see 60 FR 35932).
1. McDonald is an indirect, wholly-owned, separately capitalized investment banking and registered broker-dealer subsidiary of KeyCorp (the Corporation). As of September 30, 1999, McDonald's capitalization was approximately $310 million. The Corporation is a diversified financial services company incorporated under the laws of Ohio and a multi-bank holding company registered under the Bank Holding Company Act of 1956, as amended. As of September 30, 1999, the Corporation's consolidated assets were approximately $81 billion. The principal executive offices of the Corporation are located in Cleveland, Ohio. As of September 30, 1999, the Corporation directly owned a subsidiary
KeyBank, National Association (the Bank), a direct, wholly-owned subsidiary of the Corporation, is a national banking association engaged in banking and related activities and is the largest bank in the Corporation's banking group. As of September 30, 1997, the Bank had total assets of approximately $80 billion. The principal executive offices of the Bank are located in Cleveland, Ohio.
McDonald was incorporated in 1983 as an Ohio corporation. McDonald maintains its principal place of business in Cleveland, Ohio and has branch offices in 24 states.
McDonald is a member of the National Association of Securities Dealers and the Securities Investor Protection Corporation and underwrites and deals in corporate debt securities, commercial paper, municipal securities, high-yield securities and asset-backed securities, provides private placement and corporate finance advisory services, including merger and acquisition advisory services, publishes research on a wide range of securities and issuers, and engages in the syndication and arranging and trading of bank loans.
2. McDonald seeks exemptive relief to permit plans to invest in pass-through certificates representing undivided interests in the following categories of trusts: (1) Single and multi-family residential or commercial mortgage investment trusts;
3. Commercial mortgage investment trusts may include mortgages on ground leases of real property. Commercial mortgages are frequently secured by ground leases on the underlying property, rather than by fee simple interests. The separation of the fee simple interest and the ground lease interest is generally done for tax reasons. Properly structured, the pledge of the ground lease to secure a mortgage provides a lender with the same level of security as would be provided by a pledge of the related fee simple interest. The terms of the ground leases pledged to secure leasehold mortgages will in all cases be at least ten years longer than the term of such mortgages.
4. Each trust is established under a pooling and servicing agreement between a sponsor, a servicer and a trustee.
Typically, on or prior to the closing date, the sponsor acquires legal title to all assets selected for the trust, establishes the trust and designates an independent entity as trustee. On the closing date, the sponsor conveys to the trust legal title to the assets, and the trustee issues certificates representing fractional undivided interests in the trust assets. Typically, all receivables to be held in the trust are transferred as of the closing date, but in some transactions, as described more fully below, a limited percentage of the receivables to be held in the trust may be transferred during a limited period of time following the closing date, through the use of a pre-funding account.
McDonald, alone or together with other broker-dealers, acts as underwriter or placement agent with respect to the sale of the certificates. All of the public offerings of certificates presently contemplated have been or are to be underwritten by McDonald on a firm commitment basis. In addition, McDonald anticipates that it may privately place certificates on both a firm commitment and an agency basis. McDonald may also act as the lead underwriter for a syndicate of securities underwriters.
Certificateholders will be entitled to receive monthly, quarterly or semi-annual installments of principal and/or interest, or lease payments due on the receivables, adjusted, in the case of payments of interest, to a specified rate—the pass-through rate—which may be fixed or variable.
When installments or payments are made on a semi-annual basis, funds are not permitted to be commingled with the servicer's assets for longer than would be permitted for a monthly-pay security. A segregated account is established in the name of the trustee (on behalf of certificateholders) to hold funds received between distribution dates. The account is under the sole control of the trustee, who invests the account's assets in short-term securities which have received a rating comparable to the rating assigned to the certificates. In some cases, the servicer may be permitted to make a single deposit into the account once a month. When the servicer makes such monthly deposits, payments received from
5. Some of the certificates will be multi-class certificates. McDonald requests exemptive relief for two types of multi-class certificates: “strip” certificates and “fast-pay/slow-pay” certificates. Strip certificates are a type of security in which the stream of interest payments on receivables is split from the flow of principal payments and separate classes of certificates are established, each representing rights to disproportionate payments of principal and interest.
“Fast-pay/slow-pay” certificates involve the issuance of classes of certificates having different stated maturities or the same maturities with different payment schedules. Interest and/or principal payments received on the underlying receivables are distributed first to the class of certificates having the earliest stated maturity of principal, and/or earlier payment schedule, and only when that class of certificates has been paid in full (or has received a specified amount) will distributions be made with respect to the second class of certificates. Distributions on certificates having later stated maturities will proceed in like manner until all the certificateholders have been paid in full. The only difference between this multi-class pass-through arrangement and a single-class pass-through arrangement is the order in which distributions are made to certificateholders. In each case, certificateholders will have a beneficial ownership interest in the underlying assets. In neither case will the rights of a plan purchasing a certificate be subordinated to the rights of another certificateholder in the event of default on any of the underlying obligations. In particular, if the amount available for distribution to certificateholders is less than the amount required to be so distributed, all senior certificateholders then entitled to receive distributions will share in the amount distributed on a pro rata basis.
6. The trust will be maintained as an essentially passive entity. Therefore, both the sponsor's discretion and the servicer's discretion with respect to assets included in a trust are severely limited. Pooling and servicing agreements provide for the substitution of receivables by the sponsor only in the event of defects in documentation discovered within a short time after the issuance of trust certificates (within 120 days, except in the case of obligations having an original term of 30 years, in which case the period will not exceed two years). Any receivable so substituted is required to have characteristics substantially similar to the replaced receivable and will be at least as creditworthy as the replaced receivable.
In some cases, the affected receivable would be repurchased, with the purchase price applied as a payment on the affected receivable and passed-through to certificateholders.
In some cases the trust will be maintained as a Financial Asset Securitization Investment Trust (“FASIT”), a statutory entity created by the Small Business Job Protection Act of 1996, adding sections 860H, 860J, 860K and 860L to the Code. In general, a FASIT is designed to facilitate the securitization of debt obligations, such as credit card receivables, home equity loans, and auto loans, and thus, allows certain features such as revolving pools of assets, trusts containing unsecured receivables and certain hedging types of investments. A FASIT is not a taxable entity and debt instruments issued by such trusts, which might otherwise be recharacterized as equity, will be treated as debt in the hands of the holder for tax purposes. However, a trust which is the subject of the proposed exemption will be maintained as a FASIT only where the assets held by the FASIT will be comprised of secured debt; revolving pools of assets or hedging investments will not be allowed unless specifically authorized by the exemption, if granted, so that a trust maintained as a FASIT will be maintained as an essentially passive entity.
7. As described briefly above, some transactions may be structured using a pre-funding account or a capitalized interest account. If pre-funding is used, cash sufficient to purchase the receivables to be transferred after the closing date will be transferred to the trust by the sponsor or originator on the closing date. During the pre-funding period, such cash and temporary investments, if any, made therewith will be held in a pre-funding account and used to purchase the additional receivables, the characteristics of which will be substantially similar to the characteristics of the receivables transferred to the trust on the closing date. The pre-funding period for any trust will be defined as the period beginning on the closing date and ending on the earliest to occur of: (i) The date on which the amount on deposit in the pre-funding account is less than a specified dollar amount, (ii) the date on which an event of default occurs under the related pooling and servicing agreement, or (iii) the date which is the later of three months or ninety (90) days after the closing date. Certain specificity and monitoring requirements described below will be met and will be disclosed in the pooling and servicing agreement and/or the prospectus or private placement memorandum.
For transactions involving a trust using pre-funding, on the closing date, a portion of the offering proceeds will be allocated to the pre-funding account generally in an amount equal to the excess of (i) the principal amount of certificates being issued over (ii) the principal balance of the receivables being transferred to the trust on such closing date. In certain transactions, the aggregate principal balance of the receivables intended to be transferred to the trust may be larger than the total principal balance of the certificates being issued. In these cases, the cash deposited in the pre-funding account will equal the excess of the principal balance of the total receivables intended to be transferred to the trust over the principal balance of the receivables being transferred on the closing date.
On the closing date, the sponsor transfers the assets to the trust in exchange for the certificates. The certificates are then sold to McDonald
Generally, the receivables are transferred at par value, unless the interest rate payable on the receivables is not sufficient to service both the interest rates to be paid on the certificates and the transaction fees (
The pre-funding account of any trust will be limited so that the percentage or ratio of the amount allocated to the pre-funding account, as compared to the total principal amount of the certificates being offered (the pre-funding limit) will not exceed 25%. The pre-funding limit (which may be expressed as a ratio or as a stated percentage or a combination thereof) will be specified in the prospectus or the private placement memorandum.
Any amounts paid out of the pre-funding account are used solely to purchase receivables and to support the certificate pass-through rate (as explained below). Amounts used to support the pass-through rate are payable only from investment earnings and are not payable from principal. However, in the event that, after all of the requisite receivables have been transferred into the trust, any funds remain in the pre-funding account, such funds will be paid to the certificateholders as principal prepayments. Upon termination of the trust, if no receivables remain in the trust and all amounts payable to certificateholders have been distributed, any amounts remaining in the trust would be returned to the sponsor.
A dramatic change in interest rates on the receivables held in a trust using a pre-funding account would be handled as follows. If the receivables (other than those with adjustable or variable rates) had already been originated prior to the closing date, no action would be required as the fluctuations in the market interest rates would not affect the receivables transferred to the trust after the closing date. In contrast, if interest rates fall after the closing date, loans originated after the closing date will tend to be originated at lower rates, with the possible result that the receivables will not support the certificate pass-through rate. In a situation where interest rates drop dramatically and the sponsor is unable to provide sufficient receivables at the requisite interest rates, the pool of receivables would be closed. In this latter event, under the terms of the pooling and servicing agreement, the certificateholders would receive a repayment of principal from the unused cash held in the pre-funding account. In transactions where the certificate pass-through rates are variable or adjustable, the effects of market interest rate fluctuations are mitigated. In no event will fluctuations in interest rates payable on the receivable affect the pass-through rate for fixed rate certificates.
The cash deposited into the trust and allocated to the pre-funding account is invested in certain permitted investments (see below), which may be commingled with other accounts of the trust. The allocation of investment earnings to each trust account is made periodically as earned in proportion to each account's allocable share of the investment returns. As pre-funding account investment earnings are required to be used to support (to the extent authorized in the particular transaction) the pass-through amounts payable to the certificateholders with respect to a periodic distribution date, the trustee is necessarily required to make periodic, separate allocations of the trust's earning to each trust account, thus ensuring that all allocable commingled investment earnings are properly credited to the pre-funding account on a timely basis.
8. In certain transactions where a pre-funding account is used, the sponsor and/or originator may also transfer to the trust additional cash on the closing date, which is deposited in a capitalized interest account and used during the pre-funding period to compensate the certificateholders for any shortfall between the investment earnings on the pre-funding account and the pass-through interest rate payable under the certificates.
The capitalized interest account is needed in certain transactions since the certificates are supported by the receivables and the earnings on the pre-funding account, and it is unlikely that the investment earnings on the pre-funding account will equal the interest rates on the certificates (although such investment earnings will be available to pay interest on the certificates). The capitalized interest account funds are paid out periodically to the certificateholders as needed on distribution dates to support the pass-through rate. In addition, a portion of such funds may be returned to the sponsor from time to time as the receivables are transferred into the trust and the need for the capitalized interest account diminishes. Any amounts held in the capitalized interest account generally will be returned to the sponsor and/or originator either at the end of the pre-funding period or periodically as receivables are transferred and the proportionate amount of funds in the capitalized interest account can be reduced. Generally, the capitalized interest account terminates no later than the end of the pre-funding period. However, there may be some cases where the capitalized interest account remains open until the first date distributions are made to certificateholders following the end of the pre-funding period.
In other transactions, a capitalized interest account is not necessary because the interest paid on the receivables exceeds the interest payable on the certificates at the applicable pass-through rate and the fees of the trust. Such excess is sufficient to make up any shortfall resulting from the pre-funding account earning less than the certificate pass-through rate. In certain of these transactions, this occurs because the aggregate principal amount of receivables exceeds the aggregate principal amount of certificates.
9. Pending the acquisition of additional receivables during the pre-funding period, it is expected that amounts in the pre-funding account and the capitalized interest account will be invested in certain permitted investments or will be held uninvested. Pursuant to the pooling and servicing agreement, all permitted investments must mature prior to the date the actual funds are needed. The permitted types of investments in the pre-funding account and capitalized interest account are investments which are either: (i) Direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided that such obligations are backed by the full faith and credit of the United States, or (ii) have been rated (or the obligor has been rated) in one of the three highest generic rating categories by a rating agency, as set forth in the pooling and servicing agreement and as required by the Rating Agencies. The credit grade quality of the permitted investments is generally no lower than that of the certificates. The types of permitted investments will be described in the pooling and servicing agreement.
The ordering of interest payments to be made from the pre-funding and capitalized interest accounts is pre-established and set forth in the pooling and servicing agreement. The only principal payments which will be made from the pre-funding account are those made to acquire the receivables during the pre-funding period and those distributed to the certificateholders in the event that the entire amount in the pre-funding account is not used to acquire receivables. The only principal payments which will be made from the capitalized interest account are those made to certificateholders if necessary to support the certificate pass-through rate or those made to the sponsor either periodically as they are no longer needed or at the end of the pre-funding period when the capitalized interest account is no longer necessary.
10. In order to ensure that there is sufficient specificity as to the representations and warranties of the sponsor regarding the characteristics of the receivables to be transferred after the closing date:
(i) All such receivables will meet the same terms and conditions for eligibility as those of the original receivables used to create the trust corpus (as described in the prospectus or private placement memorandum and/or pooling and servicing agreement for such certificates), which terms and conditions have been approved by a Rating Agency. However, the terms and conditions for determining the eligibility of a receivable may be changed if such changes receive prior approval either by a majority vote of the outstanding certificateholders or by a Rating Agency;
(ii) The transfer to the trust of the receivables acquired during the pre-funding period will not result in the certificates receiving a lower credit rating from the Rating Agency upon termination of the pre-funding period than the rating that was obtained at the time of the initial issuance of the certificates by the trust;
(iii) The weighted average annual percentage interest rate (the average interest rate) for all of the obligations in the trust at the end of the pre-funding period will not be more than 100 basis points lower than the average interest rate for the obligations which were transferred to the trust on the closing date;
(iv) The trustee of the trust (or any agency with which the trustee contracts to provide trust services) will be a substantial financial institution or trust company experienced in trust activities and familiar with its duties, responsibilities, and liabilities as a fiduciary under the Act. The trustee, as the legal owner of the obligations in the trust, will enforce all the rights created in favor of certificateholders of such trust, including employee benefit plans subject to the Act.
In order to ensure that the characteristics of the receivables actually acquired during the pre-funding period are substantially similar to receivables that were acquired as of the closing date, the characteristics of the additional obligations subsequently acquired will be either (i) monitored by a credit support provider or other insurance provider which is independent of the sponsor, or (ii) an independent accountant retained by the sponsor will provide the sponsor with a letter (with copies provided to the Rating Agency, McDonald and the trustee) stating whether or not the characteristics of the additional obligations acquired after the closing date conform to the characteristics of such obligations described in the prospectus, private placement memorandum and/or pooling and servicing agreement. In preparing such letter, the independent accountant will use the same type of procedures as were applicable to the obligations which were transferred as of the closing date.
Each prospectus, private placement memorandum and/or pooling and servicing agreement will set forth the terms and conditions for eligibility of the receivables to be included in the trust as of the related closing date, as well as those to be acquired during the pre-funding period, which terms and conditions will have been agreed to by the Rating Agencies which are rating the applicable certificates as of the closing date. Also included among these conditions is the requirement that the trustee be given prior notice of the receivables to be transferred, along with such information concerning those receivables as may be requested. Each prospectus or private placement memorandum will describe the amount to be deposited in, and the mechanics of, the pre-funding account and will describe the pre-funding period for the trust.
11. The
Originators of receivables included in the trusts will be entities that originate receivables in the ordinary course of their businesses, including finance companies for whom such origination constitutes the bulk of their operations, financial institutions for whom such origination constitutes a substantial part of their operations, and any kind of manufacturer, merchant, or service enterprise for whom such origination is an incidental part of its operations. Each trust may contain assets of one or more originators. The originator of the receivables may also function as the trust sponsor or servicer.
12. The
13. The
The trustee will be an independent entity, and therefore will be unrelated to McDonald, the trust sponsor, the servicer or any other member of the Restricted Group (as defined in section III.L.). McDonald represents that the trustee will be a substantial financial institution or trust company experienced in trust activities. The trustee receives a fee for its services, which will be paid by the servicer or sponsor or out of the trust assets. The method of compensating the trustee will be specified in the pooling and servicing agreement and disclosed in the prospectus or private placement memorandum relating to the offering of the certificates.
14. The
Receivables of the type suitable for inclusion in a trust invariably are serviced with the assistance of a computer. After the sale, the servicer keeps the sold receivables on the computer system in order to continue monitoring the accounts. Although the records relating to sold receivables are kept in the same master file as receivables retained by the originator, the sold receivables are flagged as having been sold. To protect the investor's interest, the servicer ordinarily covenants that this “sold flag” will be included in all records relating to the sold receivables, including the master file, archives, tape extracts and printouts.
The sold flags are invisible to the obligor and do not affect the manner in which the servicer performs the billing, posting and collection procedures related to the sold receivables. However, the servicer uses the sold flag to identify the receivables for the purpose of reporting all activity on those receivables after their sale to investors.
Depending on the type of receivable and the details of the servicer's computer system, in some cases the servicer's internal reports can be adapted for investor reporting with little or no modification. In other cases, the servicer may have to perform special calculations to fulfill the investor reporting responsibilities. These calculations can be performed on the servicer's main computer, or on a small computer with data supplied by the main system. In all cases, the numbers produced for the investors are reconciled to the servicer's books and reviewed by public accountants.
The
In some cases, the originator and servicer of receivables to be included in a trust and the sponsor of the trust (although they may themselves be related) will be unrelated to McDonald. In other cases, however, affiliates of McDonald may originate or service receivables included in a trust or may sponsor a trust.
15. In some cases, the sponsor will obtain the receivables from various originators pursuant to existing contracts with such originators under which the sponsor continually buys receivables. In other cases, the sponsor will purchase the receivables at fair market value from the originator or a third party pursuant to a purchase and sale agreement related to the specific offering of certificates. In other cases, the sponsor will originate the receivables itself.
As compensation for the receivables transferred to the trust, the sponsor receives certificates representing the entire beneficial interest in the trust, or the cash proceeds of the sale of such certificates. If the sponsor receives certificates from the trust, the sponsor sells all or a portion of these certificates for cash to investors or securities underwriters.
16. The price of the certificates, both in the initial offering and in the secondary market, is affected by market forces, including investor demand, the pass-through interest rate on the certificates in relation to the rate payable on investments of similar types and quality, expectations as to the effect on yield resulting from prepayment of underlying receivables, and expectations as to the likelihood of timely payment.
The pass-through rate for certificates is equal to the interest rate on receivables included in the trust minus a specified servicing fee.
17. As compensation for performing its servicing duties, the servicer (who may also be the sponsor or an affiliate thereof, and receive fees for acting in that capacity) will retain the difference between payments received on the receivables in the trust and payments payable (at the pass-through rate) to certificateholders, except that in some cases a portion of the payments on receivables may be paid to a third party, such as a fee paid to a provider of credit support. The servicer may receive additional compensation by having the use of the amounts paid on the receivables between the time they are received by the servicer and the time they are due to the trust (which time is set forth in the pooling and servicing agreement). The servicer typically will be required to pay the administrative expenses of servicing the trust, including in some cases the trustee's fee, out of its servicing compensation.
The servicer is also compensated to the extent it may provide credit enhancement to the trust or otherwise arrange to obtain credit support from another party. This “credit support fee” may be aggregated with other servicing fees, and is either paid out of the interest income received on the
18. The servicer may be entitled to retain certain administrative fees paid by a third party, usually the obligor. These administrative fees fall into three categories: (a) prepayment fees; (b) late payment and payment extension fees; and (c) expenses, fees and charges associated with foreclosure or repossession, or other conversion of a secured position into cash proceeds, upon default of an obligation.
Compensation payable to the servicer will be set forth or referred to in the pooling and servicing agreement and described in reasonable detail in the prospectus or private placement memorandum relating to the certificates.
19. Payments on receivables may be made by obligors to the servicer at various times during the period preceding any date on which pass-through payments to the trust are due. In some cases, the pooling and servicing agreement may permit the servicer to place these payments in non-interest bearing accounts maintained with itself or to commingle such payments with its own funds prior to the distribution dates. In these cases, the servicer would be entitled to the benefit derived from the use of the funds between the date of payment on a receivable and the pass-through date. Commingled payments may not be protected from the creditors of the servicer in the event of the servicer's bankruptcy or receivership. In those instances when payments on receivables are held in non-interest bearing accounts or are commingled with the servicer's own funds, the servicer is required to deposit these payments by a date specified in the pooling and servicing agreement into an account from which the trustee makes payments to certificateholders.
20. The underwriter will receive a fee in connection with the securities underwriting or private placement of certificates. In a firm commitment underwriting, this fee would consist of the difference between what the underwriter receives for the certificates that it distributes and what it pays the sponsor for those certificates. In a private placement, the fee normally takes the form of an agency commission paid by the sponsor. In a best efforts underwriting in which the underwriter would sell certificates in a public offering on an agency basis, the underwriter would receive an agency commission rather than a fee based on the difference between the price at which the certificates are sold to the public and what it pays the sponsor. In some private placements, the underwriter may buy certificates as principal, in which case its compensation would be the difference between what it receives for the certificates that it sells and what it pays the sponsor for these certificates.
21. The applicant represents that as the principal amount of the receivables in a trust is reduced by payments, the cost of administering the trust generally increases, making the servicing of the trust prohibitively expensive at some point. Consequently, the pooling and servicing agreement generally provides that the servicer may purchase the receivables remaining in the trust when the aggregate unpaid balance payable on the receivables is reduced to a specified percentage (usually 5 to 10 percent) of the initial aggregate unpaid balance.
The purchase price of a receivable is specified in the pooling and servicing agreement and will be at least equal to: (1) The unpaid principal balance on the receivable plus accrued interest, less any unreimbursed advances of principal made by the servicer; or (2) the greater of (a) the amount in (1) or (b) the fair market value of such obligations in the case of a REMIC, or the fair market value of the receivables in the case of a trust that is not a REMIC.
22. The certificates will have received one of the three highest ratings available from a Rating Agency. Insurance or other credit support (such as surety bonds, letters of credit, guarantees, or overcollateralization) will be obtained by the trust sponsor to the extent necessary for the certificates to attain the desired rating. The amount of this credit support is set by the Rating Agencies at a level that is a multiple of the worst historical net credit loss experience for the type of obligations included in the issuing trust.
23. In some cases, the master servicer, or an affiliate of the master servicer, may provide credit support to the trust (i.e. act as an insurer). In these cases, the master servicer, in its capacity as servicer, will first advance funds to the full extent that it determines that such advances will be recoverable (a) out of late payments by the obligors, (b) from the credit support provider (which may be the master servicer or an affiliate thereof) or, (c) in the case of a trust that issues subordinated certificates, from amounts otherwise distributable to holders of subordinated certificates, and the master servicer will advance such funds in a timely manner. When the servicer is the provider of the credit support and provides its own funds to cover defaulted payments, it will do so either on the initiative of the trustee, or on its own initiative on behalf of the trustee, but in either event it will provide such funds to cover payments to the full extent of its obligations under the credit support mechanism. In some cases, however, the master servicer may not be obligated to advance funds but instead would be called upon to provide funds to cover defaulted payments to the full extent of its obligations as insurer. Moreover, a master servicer typically can recover advances either from the provider of credit support or from future payments on the affected assets.
If the master servicer fails to advance funds, fails to call upon the credit support mechanism to provide funds to cover delinquent payments, or otherwise fails in its duties, the trustee would be required and would be able to enforce the certificateholders' rights, as both a party to the pooling and servicing agreement and the owner of the trust estate, including rights under the credit support mechanism. Therefore, the trustee, who is independent of the servicer, will have the ultimate right to enforce the credit support arrangement.
When a master servicer advances funds, the amount so advanced is recoverable by the master servicer out of future payments on receivables held by the trust to the extent not covered by credit support. However, where the master servicer provides credit support to the trust, there are protections in place to guard against a delay in calling upon the credit support to take advantage of the fact that the credit support declines proportionally with the decrease in the principal amount of the obligations in the trust as payments on receivables are passed through to investors. These safeguards include:
(a) There is often a disincentive to postponing credit losses because the sooner repossession or foreclosure activities are commenced, the more value that can be realized on the security for the obligation;
(b) The master servicer has servicing guidelines which include a general policy as to the allowable delinquency period after which an obligation ordinarily will be deemed uncollectible. The pooling and servicing agreement will require the master servicer to follow its normal servicing guidelines and will set forth the master servicer's general policy as to the period of time after which delinquent obligations ordinarily will be considered uncollectible;
(c) As frequently as payments are due on the receivables included in the trust (monthly, quarterly or semi-annually, as set forth in the pooling and servicing agreement), the master servicer is required to report to the independent trustee the amount of all past-due payments and the amount of all servicer advances, along with other current information as to collections on the receivables and draws upon the credit support. Further, the master servicer is required to deliver to the trustee annually a certificate of an executive officer of the master servicer stating that a review of the servicing activities has been made under such officer's supervision, and either stating that the master servicer has fulfilled all of its obligations under the pooling and servicing agreement or, if the master servicer has defaulted under any of its obligations, specifying any such default. The master servicer's reports are reviewed at least annually by independent accountants to ensure that the master servicer is following its normal servicing standards and that the master servicer's reports conform to the master servicer's internal accounting records. The results of the independent accountants' review are delivered to the trustee; and
(d) The credit support has a “floor” dollar amount that protects investors against the possibility that a large number of credit losses might occur towards the end of the life of the trust, whether due to servicer advances or any other cause. Once the floor amount has been reached, the servicer lacks an incentive to postpone the recognition of credit losses because the credit support amount thereafter is subject to reduction only for actual draws. From the time that the floor amount is effective until the end of the life of the trust, there are no proportionate reductions in the credit support amount caused by reductions in the pool principal balance. Indeed, since the floor is a fixed dollar amount, the amount of credit support ordinarily increases as a percentage of the pool principal balance during the period that the floor is in effect.
24. In connection with the original issuance of certificates, the prospectus or private placement memorandum will be furnished to investing plans. The prospectus or private placement memorandum will contain information material to a fiduciary's decision to invest in the certificates, including:
(a) Information concerning the payment terms of the certificates, the rating of the certificates, any material risk factors with respect to the certificates, and the fact that principal amounts left in the pre-funding account at the end of the pre-funding period will be paid to certificateholders as a repayment of principal;
(b) A description of the trust as a legal entity and a description of how the trust was formed by the seller/servicer or other sponsor of the transaction;
(c) Identification of the independent trustee for the trust;
(d) A description of the receivables contained in the trust, including the types of receivables, the diversification of the receivables, their principal terms, and their material legal aspects, and a description of any pre-funding account used or capitalized interest account used in connection with a pre-funding account;
(e) A description of the sponsor and servicer;
(f) A description of the pooling and servicing agreement, including a description of the seller's principal representations and warranties as to the trust assets, including the terms and conditions for eligibility of any receivables transferred during the pre-funding period and the trustee's remedy for any breach thereof; a description of the procedures for collection of payments on receivables and for making distributions to investors, and a description of the accounts into which such payments are deposited and from which such distributions are made; a description of permitted investments for any pre-funding account or capitalized interest account; identification of the servicing compensation and any fees for credit enhancement that are deducted from payments on receivables before distributions are made to investors; a description of periodic statements provided to the trustee, and provided to or made available to investors by the trustee; and a description of the events that constitute events of default under the pooling and servicing contract and a description of the trustee's and the investors' remedies incident thereto;
(g) A description of the credit support;
(h) A general discussion of the principal federal income tax consequences of the purchase, ownership and disposition of the pass-through securities by a typical investor;
(i) A description of the underwriters' plan for distributing the pass-through securities to investors;
(j) Information about the scope and nature of the secondary market, if any, for the certificates; and
(k) A statement as to the duration of any pre-funding period and the pre-funding limit for the trust.
25. Reports indicating the amount of payments of principal and interest are provided to certificateholders at least as frequently as distributions are made to certificateholders. Certificateholders will also be provided with periodic information statements setting forth material information concerning the underlying assets, including, where applicable, information as to the amount and number of delinquent and defaulted loans or receivables.
26. In the case of a trust that offers and sells certificates in a registered public offering, the trustee, the servicer or the sponsor will file such periodic reports as may be required to be filed under the Securities Exchange Act of 1934. Although some trusts that offer certificates in a public offering will file quarterly reports on Form 10-Q and Annual Reports on Form 10-K, many trusts obtain, by application to the Securities and Exchange Commission (SEC), a complete exemption from the requirement to file quarterly reports on Form 10-Q and a modification of the disclosure requirements for annual reports on Form 10-K. If such an exemption is obtained, these trusts normally would continue to have the obligation to file current reports on Form 8-K to report material developments concerning the trust and the certificates and copies of the statements sent to certificateholders. While the SEC's interpretation of the periodic reporting requirements is subject to change, periodic reports concerning a trust will be filed to the extent required under the Securities Exchange Act of 1934.
27. At or about the time distributions are made to certificateholders, a report will be delivered to the trustee as to the status of the trust and its assets, including underlying obligations. Such report will typically contain information regarding the trust's assets (including those purchased by the trust from any pre-funding account), payments received or collected by the servicer, the amount of prepayments, delinquencies, servicer advances, defaults and foreclosures, the amount of any payments made pursuant to any credit support, and the amount of compensation payable to the servicer. Such report also will be delivered to or made available to the rating agency or agencies that have rated the trust's certificates.
In addition, promptly after each distribution date, certificateholders will receive a statement prepared by the servicer, paying agent or trustee summarizing information regarding the trust and its assets, including underlying receivables. Such statement
28. To date, no forward delivery commitments have been entered into by McDonald in connection with the offering of any certificates, but McDonald may contemplate entering into such commitments. The utility of forward delivery commitments has been recognized with respect to offering similar certificates backed by pools of residential mortgages, and McDonald may find it desirable in the future to enter into such commitments for the purchase of certificates.
29. It is McDonald's normal policy to attempt to make a market for securities for which it is lead or co-managing underwriter, and it is McDonald's intention to make a market for any certificates for which it is lead or co-managing underwriter, although it is under no obligation to do so. At times McDonald will facilitate sales by investors who purchase certificates if McDonald has acted as agent or principal in the original private placement of the certificates and if such investors request McDonald's assistance.
30. McDonald represents that it has not engaged in transactions related to mortgage-backed and asset-backed securities based on the assumption that retroactive relief would be granted prior to the date of their application. However, McDonald requests the exemptive relief granted to be retroactive to January 4, 1999, the date of their application, and would like to rely on such retroactive relief for transactions entered into prior to the date exemptive relief may be granted.
31. In summary, the applicant represents that the transactions for which exemptive relief is requested satisfy the statutory criteria of section 408(a) of the Act due to the following:
(a) The trusts contain “fixed pools” of assets. There is little discretion on the part of the trust sponsor to substitute receivables contained in the trust once the trust has been formed;
(b) In the case where a pre-funding account is used, the characteristics of the receivables to be transferred to the trust during the pre-funding period will be substantially similar to the characteristics of those transferred to the trust on the closing date, thereby giving the sponsor and/or originator little discretion over the selection process, and compliance with this requirement will be assured by the specificity of the characteristics and the monitoring mechanisms contemplated under the proposed exemption. In addition, certain cash accounts will be established to support the certificate pass-through rate and such cash accounts will be invested in short-term, conservative investments; the pre-funding period will be of a reasonably short duration; a pre-funding limit will be imposed; and any Internal Revenue Service requirements with respect to pre-funding intended to preserve the passive income character of the trust will be met. The fiduciary of the plans making the decision to invest in certificates is thus fully apprised of the nature of the receivables which will be held in the trust and has sufficient information to make a prudent investment decision.
(c) Certificates in which plans invest will have been rated in one of the three highest rating categories by a rating agency. Credit support will be obtained to the extent necessary to attain the desired rating;
(d) All transactions for which McDonald seeks exemptive relief will be governed by the pooling and servicing agreement, which is made available to plan fiduciaries for their review prior to the plan's investment in certificates;
(e) Exemptive relief from sections 406(b) and 407 for sales to plans is substantially limited; and
(f) McDonald anticipates that it will make a secondary market in certificates (although it is under no obligation to do so).
Once this proposed exemption is granted, a copy of the exemption published in the
Comments and requests for a hearing must be received by the Department not later than 45 days from the date of publication of this notice of proposed exemption in the
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption under section 408(a) of the Act and/or section 4975(c)(2) of the Code does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions of the Act and/or the Code, including any prohibited transaction provisions to which the exemption does not apply and the general fiduciary responsibility provisions of section 404 of the Act, which, among other things, require a fiduciary to discharge his duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(b) of the Act; nor does it affect the requirement of section 401(a) of the Code that the plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries;
(2) Before an exemption may be granted under section 408(a) of the Act and/or section 4975(c)(2) of the Code, the Department must find that the exemption is administratively feasible, in the interests of the plan and of its participants and beneficiaries, and protective of the rights of participants and beneficiaries of the plan;
(3) The proposed exemptions, if granted, will be supplemental to, and not in derogation of, any other provisions of the Act and/or the Code, including statutory or administrative exemptions and transitional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction; and
(4) The proposed exemptions, if granted, will be subject to the express condition that the material facts and representations contained in each application are true and complete, and that each application accurately describes all material terms of the transaction which is the subject of the exemption.
The Board of Directors of the Legal Services Corporation will meet on April 15, 2000. The meeting will begin at 10 a.m. and continue until conclusion of the Board's agenda.
Marriott Wardman Park Hotel, 2660 Woodley Road, NW, Washington, DC 20008.
Open, except that a portion of the meeting may be closed pursuant to a vote of the Board of Directors to hold an executive session. At the closed session, the Corporation's General Counsel will report to the Board on litigation to which the Corporation is or may become a party, and the Board may act on the matters reported. The closing is authorized by the relevant provisions of the Government in the Sunshine Act [5 U.S.C. 552b(c) (10)] and the corresponding provisions of the Legal Services Corporation's implementing regulation [45 CFR 1622.5(h)]. A copy of the General Counsel's Certification that the closing is authorized by law will be available upon request.
1. Approval of agenda.
2. Approval of minutes of the Board's meeting of January 28-29, 2000.
3. Approval of minutes of the executive session of the Board's meeting of January 28-29, 2000.
4. Approval of minutes of the Board's teleconference meeting of January 28-29, 2000.
5. Approval of minutes of the Annual Performance Reviews Committee's tele-conference meeting of November 19, 1999.
6. Approval of minutes of the Annual Performance Reviews Committee's tele-conference meeting of January 24, 2000.
7. Approval of minutes of the November 19, 1999 meeting of the Committee on Provision for the Delivery of Legal Services.
8. Approval of minutes of the Operations & Regulations Committee's meeting of November 19, 1999.
9. Chairman's Report.
10. Members' Report.
11. Inspector General's Report.
12. President's Report.
13. Report on the status of Strategic Planning by the Corporation.
14. Review of the Corporation's Consolidated Operating Budget, Expenses and Other Funds Available through February 29, 2000.
15. Consider and act on the Board's meeting schedule, including designation of locations, for calendar year 2001.
16. Consider and act on the extension of John McKay's contract of employment as President of the Corporation.
17. Briefing
18. Consider and act on the Office of Legal Affairs' report on potential and pending litigation involving the Corporation.
19. Consider and act on other business.
20. Public Comment.
Victor M. Fortuno, Vice President for Legal Affairs, General Counsel and Secretary of the Corporation, at (202) 336-8800.
Upon request, meeting notices will be made available in alternate formats to accommodate visual and hearing impairments. Individuals who have a disability and need an accommodation to attend the meeting may notify Shannon Nicko Adaway, at (202) 336-8800.
The Operations and Regulations Committee of the Legal Services Corporation's Board of Directors will meet on April 14, 2000. The meeting will begin at 2:30 p.m. and continue until the Committee concludes its agenda.
Marriott Wardman Park Hotel, 2660 Woodley Road, NW, Washington, DC 20008.
Open.
1. Approval of agenda.
2. Consider and act on proposed Operations and Regulations Committee procedures.
3. Consider and act on other business.
4. Public Comment.
Victor M. Fortuno, Vice President for Legal Affairs, General Counsel and Secretary of the Corporation, at (202) 336-8800.
Upon request, meeting notices will be made available in alternate formats to accommodate visual and hearing impairments. Individuals who have a disability and need an accommodation to attend the meeting may notify Shannon Nicko Adaway, at (202) 336-8800.
The Committee on Provision for the Delivery of Legal Services of the Legal Services Corporation Board of Directors will meet on April 14, 2000. The meeting will begin at 10:00 a.m. and continue until the Committee concludes its agenda.
Marriott Wardman Park Hotel, 2660 Woodley Road, N.W., Washington, DC 20008.
Open.
1. Approval of agenda.
2. Report by Robert Gross, of the Corporation's Office of Program Performance, on State Planning.
3. Update by Michael Genz and Glenn Rawdon, of the Corporation's Office of Program Performance, on the Technology Initiatives Grants Process.
4. Report by Michael Genz and Cynthia Schneider, of the Corporation's Office of Program Performance, on the Migrant Workers Legal Services Conference held on March 19-22, 2000, in Boerne, Texas.
5. Consider and act on other business.
6. Public comment.
Victor M. Fortuno, Vice President for Legal Affairs, General Counsel and Secretary of the Corporation, at (202) 336-8800.
Upon request, meeting notices will be made available in alternate formats to accommodate visual and hearing impairments. Individuals who have a disability and need an accommodation to attend the meeting may notify Shannon Nicko Adaway, at (202) 336-8800.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation announces the following meeting:
The U.S. Nuclear Regulatory Commission (the Commission) is considering the issuance of an order under 10 CFR 50.80 approving the indirect transfer of Facility Operating Licenses Nos. DPR-5 and DPR-26 for the Indian Point Nuclear Generating Units 1 and 2 (Indian Point Units 1 and 2), held by Consolidated Edison Company of New York, Inc. (Con Ed). The indirect transfer would be to a new Consolidated Edison, Inc., incorporated in Delaware (New CEI), resulting from the planned merger of Consolidated Edison, Inc. (CEI), the current parent of Con Ed, and Northeast Utilities (NU).
According to a January 13, 2000, application by Con Ed, North Atlantic Energy Service Corporation (NAESCO), and Northeast Nuclear Energy Company (NNECO), for approval of certain indirect license transfers, on October 13, 1999, NU entered into an Agreement and Plan of Merger with CEI. Upon consummation of the merger, NU will become a wholly owned subsidiary of New CEI. In addition, Con Ed, presently a subsidiary of CEI, will become a subsidiary of New CEI. Accordingly, consummation of the merger will effect an indirect transfer of the Indian Point Units 1 and 2 licenses to New CEI. Con Ed owns Indian Point Units 1 and 2 and is authorized to operate the units. Following the merger, Con Ed would continue to have responsibility for the management, operation, and maintenance of the Indian Point Units 1 and 2 and own the facility. No physical changes to Indian Point Units 1 and 2 or operational changes are being proposed. No direct transfer of the licenses will result from the proposed merger.
The application also seeks approval of certain proposed indirect license transfers in connection with the Millstone Nuclear Power Station, Units 1, 2, and 3, and the Seabrook Station, Unit 1, facilities, which will be the subject of separate notices.
Pursuant to 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission shall give its consent in writing. The Commission will approve an application for the indirect transfer of a license, if the Commission determines that the underlying transaction that will effectuate the indirect transfer will not affect the qualifications of the holder of the license, and that the transfer is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
The filing of requests for hearing and petitions for leave to intervene, and written comments regarding the license transfer application, are discussed below.
By April 27, 2000, any person whose interest may be affected by the Commission's action on the application may request a hearing, and, if not the applicants, may petition for leave to intervene in a hearing proceeding on the Commission's action. Requests for a hearing and petitions for leave to intervene should be filed in accordance with the Commission's rules of practice set forth in Subpart M, “Public Notification, Availability of Documents and Records, Hearing Requests and Procedures for Hearings on License Transfer Applications,” of 10 CFR Part 2. In particular, such requests and petitions must comply with the requirements set forth in 10 CFR 2.1306, and should address the considerations contained in 10 CFR 2.1308(a). Untimely requests and petitions may be denied, as provided in10 CFR 2.1308(b), unless good cause for failure to file on time is established. In addition, an untimely request or petition should address the factors that the Commission will also consider, in reviewing untimely requests or petitions, set forth in 10 CFR 2.1308(b)(1)-(2).
Requests for a hearing and petitions for leave to intervene should be served upon Brent L. Brandenburg, Esq., Consolidated Edison Co. of New York, Inc., 4 Irving Place—1830, New York, NY 10003 (telephone number (212) 460-4333 and e-mail address brandenburgb@coned.com), attorney for Consolidated Edison, Inc., William J. Quinlan, Esq., Northeast Utilities, 107 Selden Street, Berlin, CT 06037 (telephone number (860) 665-3761 and e-mail address quinlwj@nu.com), attorney for Northeast Utilities; the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555 (e-mail address for filings regarding license transfer cases only: OGCLT@NRC.gov); and the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, in accordance with 10 CFR 2.1313.
The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the
As an alternative to requests for hearing and petitions to intervene, by May 8, 2000, persons may submit written comments regarding the license transfer application, as provided for in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of this
For further details with respect to this action, see the application dated January 13, 2000, which is available for public inspection at the Commission's Public Document Room, the Gelman Building, 2120 L Street, NW., Washington, DC, and accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Website (http://www.NRC.gov).
For the Nuclear Regulatory Commission.
Consumers Energy Company (the licensee) is the holder of Facility Operating License No. DPR-20, which authorizes operation of the Palisades Plant. The facility consists of a pressurized-water reactor at the licensee's site located in Van Buren County, Michigan. The license provides that the licensee is subject to all rules, regulations, and orders of the U.S. Nuclear Regulatory Commission (the Commission) now or hereafter in effect.
The Code of Federal Regulations, 10 CFR part 50, appendix R, “Fire Protection Program For Nuclear Power Facilities Operating Prior To January 1, 1979,” Section III.O, “Oil Collection System for Reactor Coolant Pump,” requires that primary coolant pumps be equipped with oil collection systems (if the containment is not inerted during normal operation) capable of collecting lube oil from potential leakage sites in the primary coolant pump lube oil systems. Section III.O includes a specific requirement regarding the capacity of the lube oil collection container: “Leakage shall be collected and drained to a vented closed container that can hold the entire lube oil system inventory.” The underlying purpose of Section III.O requirements is to provide reasonable assurance that leakage from primary coolant pump lube oil systems will not lead to a fire that could damage safety-related equipment during normal or design-basis accident conditions.
Pursuant to 10 CFR 50.12(a), the Commission may grant exemptions from requirements of 10 CFR Part 50 that are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security, provided that special circumstances are present. Pursuant to 10 CFR 50.12(a)(2)(ii), special circumstances are present whenever “application of the regulation in the particular circumstances * * * is not necessary to achieve the underlying purpose of the rule.”
The Palisades Plant consists of a two-loop, pressurized water reactor with two primary coolant pumps returning flow from each of the two steam generators to the reactor core. Each of the four primary coolant pumps is powered by a vertical shaft motor with upper and lower bearing assemblies. Each bearing assembly has its own separate lubrication system consisting of an oil reservoir and associated piping. The upper reservoir for each pump motor could contain up to 87 gallons of lube oil, of which 76 gallons would be in the oil reservoir and 11 gallons in the associated piping systems (including lift and backstop pumps and their respective oil coolers). The nominal volume of the lower reservoir is 18 gallons, with no significant volume in the associated piping. Thus, the total inventory of lube oil that each primary coolant pump motor could contain is 105 gallons.
Each of the four primary coolant pump motors has a separate closed and vented oil collection tank to collect oil leakage. Each of the oil collection tanks for the motors of primary coolant pumps P-50A, P-50B, and P-50C has a usable capacity of 79 gallons, which is insufficient (by 26 gallons) to contain the entire lube oil inventory of the pump motor. There is reasonable assurance that the oil collection systems would withstand a safe shutdown earthquake.
Operating procedures and practices at the Palisades Plant are such that oil spillage due to overflowing an existing collection tank is unlikely. The operating levels in the upper and lower lubricating oil reservoirs must be maintained above a minimum level to keep the bearings properly lubricated during motor operation. The operating level for the upper reservoir is about 20 gallons and the operating level for the lower reservoir is about 5 gallons. Any significant leakage or change in leakage trends would be identified through regular monitoring by control room operators and by oil level alarms. The operators would shut down a primary coolant pump if oil leakage caused either reservoir to reach an operating level low enough to threaten motor bearing damage, or if the lubricating oil level dropped at a rate that would cause concern about safe pump operation. Stopping the pump (and its oil lift pump) would depressurize the leaking lubricating oil system. The cause of the oil leakage would be investigated and repaired, and the collection tank would be pumped out before returning the pump to operation. Stopping a primary coolant pump during reactor operation would result in an immediate reactor shutdown.
In the unlikely event that operators allowed leakage in a primary coolant pump motor's upper oil system to drain the entire system without taking action to stop the pump, approximately 8 gallons of oil could overflow the oil collection tank onto the floor in containment. Approximately 26 gallons could overflow onto the floor in the less likely event that both the upper and lower oil systems were to develop gross leakage simultaneously with no operator action.
Lubricating oil that might overflow an oil collection tank would flow down to lower floor elevations and eventually into the containment sump. The motor oil has a flash point of over 400 °F and the containment atmosphere is nominally 80 °F to 100 °F when the primary coolant pumps are in operation. The oil would not come into contact with any hot pipes, hot equipment
By its response to Question 6.2 of Generic Letter 86-10, “Implementation of Fire Protection Requirements,” the NRC staff has previously addressed the use of splash shields and the containment sump for the collection tank volume. The NRC staff concluded that, although an exemption would be required, it would be acceptable if the collected overflow of lube oil drained to the sump, and there were no sources of ignition in the area. The NRC staff finds that the exemption requested for the Palisades Plant meets the guidelines for an acceptable exemption as addressed by the NRC staff in Generic Letter 86-10.
Accordingly, the usable capacity of the existing lube oil collection tanks for the motors of primary coolant pumps P-50A, P-50B, and P-50C, in conjunction with the low risk associated with minor amounts of potential oil overflow to the containment sump, which would not lead to a fire, satisfies the underlying purpose of Section III.O of Appendix R to 10 CFR 50.
Pursuant to 10 CFR 50.12(a), the Commission has determined that special circumstances exist at the Palisades Plant in that application of the regulation regarding the capacity of lube oil collection containers is not necessary to achieve the underlying purpose of that requirement in Appendix R to 10 CFR part 50. The Commission has also determined that this exemption is authorized by law, will not present an undue risk to public health and safety, and is consistent with the common defense and security. Therefore, the Commission hereby grants the licensee an exemption from the requirements of Section III.O of Appendix R to 10 CFR Part 50 regarding the specified capacity of lube oil collection containers. This exemption applies to the lube oil collection containers for the motors of primary coolant pumps P-50A, P-50B, and P-50C, based on the facts set forth herein.
Pursuant to 10 CFR 51.32, the Commission has determined that the granting of this exemption will have no significant impact upon the quality of the human environment (65 FR 16971).
This exemption is effective upon issuance.
For the Nuclear Regulatory Commission.
The U.S. Nuclear Regulatory Commission (the Commission) is considering the issuance of an order under 10 CFR 50.80 approving the indirect transfer of Facility Operating License No. NPF-86 for the Seabrook Station, Unit 1 (Seabrook Station), to the extent held by North Atlantic Energy Corporation (NAEC), Connecticut Light and Power Company (CL&P), and North Atlantic Energy Service Corporation (NAESCO). The indirect transfer would be to a new Consolidated Edison, Inc., incorporated in Delaware (New CEI), resulting from the planned merger of Consolidated Edison, Inc. (CEI), the current parent of Consolidated Edison Company of New York, Inc. (Con Ed), and Northeast Utilities (NU), the parent company of NAEC, CL&P, and NAESCO.
According to a January 13, 2000, application by Con Ed, NAESCO, and Northeast Nuclear Energy Company (NNECO) for approval of certain indirect license transfers, on October 13, 1999, NU entered into an Agreement and Plan of Merger with CEI. Upon consummation of the merger, NU will become a wholly owned subsidiary of New CEI. CL&P, NAEC, and NAESCO are all subsidiaries of NU, and will remain as such following the merger, but will have a new indirect parent, New CEI. Accordingly, consummation of the merger will effect an indirect transfer of the Seabrook Station license to the extent held by the above NU subsidiaries, to New CEI. CL&P and NAEC hold ownership interests in Seabrook Station and NAESCO is exclusively authorized to operate the unit. NAESCO would remain as the managing agent for the 11 joint owners of the facility and would continue to have exclusive responsibility for the management, operation, and maintenance of the Seabrook Station. The application does not propose a change in the rights, obligations, or interests of the other nine joint owners of the Seabrook Station. In addition, no physical changes to the Seabrook Station or operational changes are being proposed. No direct transfer of the license will result from the proposed merger.
The application also seeks approval of certain proposed indirect license transfers in connection with the Millstone Nuclear Power Station, Units 1, 2, and 3 and the Indian Point Generating Station, Units 1 and 2 facilities, which will be the subject of separate published notices.
Pursuant to 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission shall give its consent in writing. The Commission will approve an application for the indirect transfer of a license, if the Commission determines that the underlying transaction that will effectuate the indirect transfer will not affect the qualifications of the holder of the license, and that the transfer is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
The filing of requests for hearing and petitions for leave to intervene, and written comments regarding the license transfer application, are discussed below.
By April 27, 2000, any person whose interest may be affected by the Commission's action on the application may request a hearing, and, if not the applicants, may petition for leave to intervene in a hearing proceeding on the Commission's action. Requests for a hearing and petitions for leave to intervene should be filed in accordance with the Commission's rules of practice set forth in Subpart M, “Public Notification, Availability of Documents and Records, Hearing Requests and Procedures for Hearings on License Transfer Applications,” of 10 CFR part 2. In particular, such requests and petitions must comply with the requirements set forth in 10 CFR 2.1306, and should address the considerations contained in 10 CFR 2.1308(a). Untimely requests and petitions may be denied, as provided in 10 CFR 2.1308(b), unless good cause for failure to file on time is established. In addition, an untimely request or petition should address the factors that the Commission will also consider, in reviewing untimely requests or petitions, set forth in 10 CFR 2.1308(b)(1)-(2).
Requests for a hearing and petitions for leave to intervene should be served
The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the
As an alternative to requests for hearing and petitions to intervene, by May 8, 2000, persons may submit written comments regarding the license transfer application, as provided for in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of the
For further details with respect to this action, see the application dated January 13, 2000, which is available for public inspection at the Commission's Public Document Room, the Gelman Building, 2120 L Street, NW., Washington, DC, and Accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Web site (http://www.NRC.gov).
For the Nuclear Regulatory Commission.
The U.S. Nuclear Regulatory Commission (the Commission) is considering the issuance of an order under 10 CFR 50.80 approving the indirect transfer of Facility Operating Licenses Nos. DPR-21, DPR-65 and NPF-49 for the Millstone Nuclear Power Station, Units 1, 2, and 3, (Unit 1, Unit 2, and Unit 3), respectively, to the extent held by Connecticut Light and Power Company (CL&P), Western Massachusetts Electric Company (WMECO), Northeast Nuclear Energy Company (NNECO), and Public Service Company of New Hampshire (PSNH). The indirect transfer would be to a new Consolidated Edison, Inc., incorporated in Delaware (New CEI), resulting from the planned merger of Consolidated Edison, Inc. (CEI), the current parent of Consolidated Edison Company of New York, Inc. (Con Ed), and Northeast Utilities (NU), the parent company of WMECO, CL&P, PSNH and NNECO.
According to a January 13, 2000, application by ConEd, NNECO, and North Atlantic Energy Service Corporation (NAESCO) for approval of certain indirect license transfers, on October 13, 1999, NU entered into an Agreement and Plan of Merger with CEI. Upon consummation of the merger, NU will become a wholly owned subsidiary of New CEI. CL&P, WMECO, NNECO, and PSNH are all subsidiaries of NU, and will remain as such following the merger, but will have a new indirect parent, New CEI. Accordingly, consummation of the merger will effect an indirect transfer of the Millstone Units 1, 2, and 3 licenses to the extent held by the above NU subsidiaries, to New CEI. CL&P and WMECO hold ownership interests in Units 1 and 2, and NNECO is exclusively authorized to operate both Units as well as Unit 3. CL&P, WMECO, and PSNH hold ownership interests in Unit 3 along with 11 other co-owners not affiliated with NU. NNECO would remain as the managing agent for the joint owners of the facilities and would continue to have exclusive responsibility for the management, operation, and maintenance of Units 1, 2, and 3. The application does not propose a change in the rights, obligations, or interests of the other 11 joint owners of Unit 3 which are not affiliates of NU. In addition, no physical changes to Units 1, 2, and 3 or operational changes are being proposed. No direct transfer of the licenses will result from the proposed merger.
The application also seeks approval of certain proposed indirect license transfers in connection with Seabrook Station and Indian Point, Units 1 and 2 facilities, which will be the subject of separate published notices.
Pursuant to 10 CFR 50.80, no license, or any right thereunder, shall be transferred, directly or indirectly, through transfer of control of the license, unless the Commission shall give its consent in writing. The Commission will approve an application for the indirect transfer of a license, if the Commission determines that the underlying transaction that will effectuate the indirect transfer will not affect the qualifications of the holder of the license, and that the transfer is otherwise consistent with applicable provisions of law, regulations, and orders issued by the Commission pursuant thereto.
The filing of requests for hearing and petitions for leave to intervene, and written comments regarding the license transfer application, are discussed below.
By April 27, 2000, any person whose interest may be affected by the Commission's action on the application may request a hearing, and, if not the applicants, may petition for leave to intervene in a hearing proceeding on the Commission's action. Requests for a hearing and petitions for leave to intervene should be filed in accordance with the Commission's rules of practice set forth in Subpart M, “Public Notification, Availability of Documents and Records, Hearing Requests and Procedures for Hearings on License Transfer Applications,” of 10 CFR Part 2. In particular, such requests and petitions must comply with the requirements set forth in 10 CFR 2.1306, and should address the considerations contained in 10 CFR 2.1308(a). Untimely requests and petitions may be denied, as provided in 10 CFR 2.1308(b), unless good cause for failure to file on time is established. In addition, an untimely request or petition should address the factors that the Commission will also consider, in reviewing untimely requests or petitions, set forth in 10 CFR 2.1308(b)(1)-(2).
Requests for a hearing and petitions for leave to intervene should be served upon Brent L. Brandenburg, Esq., Consolidated Edison Co. of New York, Inc., 4 Irving Place—1830, New York,
The Commission will issue a notice or order granting or denying a hearing request or intervention petition, designating the issues for any hearing that will be held and designating the Presiding Officer. A notice granting a hearing will be published in the
As an alternative to requests for hearing and petitions to intervene, by May 8, 2000, persons may submit written comments regarding the license transfer application, as provided for in 10 CFR 2.1305. The Commission will consider and, if appropriate, respond to these comments, but such comments will not otherwise constitute part of the decisional record. Comments should be submitted to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and should cite the publication date and page number of the
For further details with respect to this action, see the application dated January 13, 2000, which is available for public inspection at the Commission's Public Document Room, the Gelman Building, 2120 L Street, NW., Washington, DC, and accessible electronically through the ADAMS Public Electronic Reading Room link at the NRC Web site (http://www.NRC.gov).
For The Nuclear Regulatory Commission.
The U.S. Nuclear Regulatory Commission (NRC) is considering issuance of a license amendment to Materials License No. SUB-1435 issued to the U.S. Army (licensee) at the Jefferson Proving Ground (JPG) site in Madison, Indiana. The licensee requested, in a letter dated February 15, 2000, to: (1) Authorize transfer of licensing responsibilities for the Jefferson Proving Ground (JPG) site from the U.S. Army Test and Evaluation Command (TECOM) to the U.S. Army Soldier and Biological Chemical Command (SBCCOM), (2) designate Ms. Joyce E. Kuykendall as the Radiation Safety Officer (RSO) for the site, and (3) include the revised JPG Security Plan in the license.
From 1941 to 1994, the licensee conducted ordnance testing on the JPG site, and fired more than 24 million rounds of conventional explosive. From 1984 to 1994, the licensee conducted accuracy testing of depleted uranium (DU) tank penetrator rounds at the site. An NRC license was issued to authorize the U.S. Army to use, store, and perform testing of DU munitions at JPG. The DU penetrator rounds vary in size but can be generally described as rods comprised of a DU titanium alloy with a diameter of approximately 2.5 centimeters (cm) (1 inch) and a length as much as 61 cm (2 feet). The DU munitions testing contaminated approximately 5.1×10
An NRC administrative review, documented in a letter to the licensee dated March 15, 2000, found the license amendment application acceptable to begin a technical review. The application requested to: (1) Authorize transfer of licensing responsibilities for the JPG site from TECOM to SBCCOM, (2) designate Ms. Joyce E. Kuykendall as the RSO for the site, and (3) include the revised JPG Security Plan in the license. The NRC Decommissioning Branch is currently changing its policy regarding listing the RSO by name in the license. Instead, the license will include the qualifications that an RSO must meet for the respective site. NRC staff plans to revise the JPG license condition on the RSO accordingly.
If the NRC approves the February 15, 2000, request, the approval will be documented in an amendment to NRC License No. SUB-1435. However, before approving the proposed amendment, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended, and NRC's regulations. These findings will be documented in a Safety Evaluation Report and an Environmental Assessment or a Categorical Exclusion.
NRC hereby provides notice that this is a proceeding on an application for an amendment of a license falling within the scope of Subpart L, “Informal Hearing Procedures for Adjudication in Materials Licensing Proceedings,” of NRC's rules of practice for domestic licensing proceedings in 10 CFR Part 2. Pursuant to § 2.1205(a), any person whose interest may be affected by this proceeding may file a request for a hearing in accordance with § 2.1205(d). A request for a hearing must be filed within thirty (30) days of the date of publication of this
The request for a hearing must be filed with the Office of the Secretary either:
1. By delivery to Secretary, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, between 7:45 am and 4:15 pm Federal workdays; or
2. By mail, telegram, or facsimile addressed to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Attention: Rulemakings and Adjudications Staff.
In accordance with 10 CFR 2.1205(f), each request for a hearing must also be served, by delivering it personally or by mail, to:
1. The applicant, U.S. Army Soldier and Biological Chemical Command, 5183 Black Hawk Road, Aberdeen Proving Ground, MD 21010-5424, Attention: Mr. John M. Ferriter, and;
2. The NRC staff, by delivery to the Executive Director for Operations, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, between 7:45 am and 4:15 pm Federal workdays, or by mail, addressed to the Executive Director for Operations, U.S.
In addition to meeting other applicable requirements of 10 CFR Part 2 of NRC's regulations, a request for a hearing filed by a person other than an applicant must describe in detail:
1. The interest of the requester in the proceeding;
2. How that interest may be affected by the results of the proceeding, including the reasons why the requester should be permitted a hearing, with particular reference to the factors set out in § 2.1205(h):
3. The requester's areas of concern about the licensing activity that is the subject matter of the proceeding; and
4. The circumstance establishing that the request for a hearing is timely in accordance with § 2.1205(d).
The application for license amendment and supporting documentation are available for inspection at NRC's Public Electronic Reading Room on the NRC web site at http://www.nrc.gov/NRC/ADAMS/index.html. Questions with respect to this action should be referred to Ms. Sherry W. Lewis, Decommissioning Branch, Division of Waste Management, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Telephone: (301) 415-6619. Fax: (301) 415-5398.
For the Nuclear Regulatory Commission.
The ACRS Subcommittee on Thermal-Hydraulic Phenomena will hold a meeting on April 27, 2000, Room T-2B3, 11545 Rockville Pike, Rockville, Maryland.
The agenda for the subject meeting shall be as follows:
The Subcommittee will continue discussion of the NRC Code Guideline Documents (Proposed Regulatory Guide and Standard Review Plan Section). The purpose of this meeting is to gather information, analyze relevant issues and facts, and to formulate proposed positions and actions, as appropriate, for deliberation by the full Committee.
Oral statements may be presented by members of the public with the concurrence of the Subcommittee Chairman. Written statements will be accepted and made available to the Committee. Electronic recordings will be permitted only during those portions of the meeting that are open to the public, and questions may be asked only by members of the Subcommittee, its consultants, and staff. Persons desiring to make oral statements should notify the cognizant ACRS staff engineer named below five days prior to the meeting, if possible, so that appropriate arrangements can be made.
During the initial portion of the meeting, the Subcommittee, along with any of its consultants who may be present, may exchange preliminary views regarding matters to be considered during the balance of the meeting.
The Subcommittee will then hear presentations by and hold discussions with representatives of the NRC staff, and other interested persons regarding this review.
Further information regarding topics to be discussed, whether the meeting has been canceled or rescheduled, and the Chairman's ruling on requests for the opportunity to present oral statements and the time allotted therefor, can be obtained by contacting the cognizant ACRS staff engineer, Mr. Paul A. Boehnert (telephone 301/415-8065) between 7:30 a.m. and 4:15 p.m. (EST). Persons planning to attend this meeting are urged to contact the above named individual one or two working days prior to the meeting to be advised of any potential changes to the agenda, etc., that may have occurred.
The U.S. Nuclear Regulatory Commission (NRC) has issued Supplement 1 to the Final Safety Evaluation Report (FSER) related to certification of the AP600 Standard Plant Design. On the basis of the evaluation described in the FSER (NUREG-1512) and Supplement 1 thereto, the NRC staff concludes that the confirmatory issues in NUREG-1512 are resolved, the AP600 design documentation is acceptable, and Westinghouse's application for design certification meets the requirements of Subpart B to 10 CFR Part 52 that are applicable and technically relevant to the AP600 Standard Plant Design.
The NRC has also issued a revised final design approval (FDA) to Westinghouse for the AP600 design under 10 CFR part 52, appendix O. This FDA allows the AP600 design to be referenced in an application for a construction permit or an operating license under 10 CFR Part 50, or an application for a combined license under 10 CFR part 52. The FDA was revised to make it coterminous with the design certification rule that was issued on December 23, 1999 (Appendix C to 10 CFR part 52). This FDA supersedes the FDA dated September 3, 1998.
A copy of the AP600 FDA and Supplement 1 to the FSER have been placed in the NRC's Public Document Room, the Gelman Building, 2120 L Street, NW, Washington DC 20037, for review and copying by interested persons.
For the Nuclear Regulatory Commission.
Pension Benefit Guaranty Corporation.
Notice of request for extension and expansion of OMB approval.
The Pension Benefit Guaranty Corporation is requesting that the Office of Management and Budget extend and expand its approval of a collection of information under the Paperwork Reduction Act. The purpose of the information collection, which will be
Comments should be submitted on or before June 6, 2000.
All written comments should be addressed to: Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Pension Benefit Guaranty Corporation, 725 17th Street, NW., Room 10235, Washington, DC 20503-0009. The request for approval of the proposed collection of information will be available for public inspection at the PBGC Communications and Public Affairs Department, suite 240, 1200 K Street, NW., Washington, DC 20005-4026, between the hours of 9 a.m. and 5 p.m.
Thomas H. Gabriel, Attorney, Office of the General Counsel, Suite 340, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (For TTY/TDD users, call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.)
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The PBGC is requesting that OMB extend its approval, for a three-year period, of a generic collection of information consisting of customer satisfaction focus groups and surveys (OMB No. 1212-0053; expires July 31, 2002). The PBGC also is requesting that OMB expand its approval to encompass a broader range of surveys than those approved under 1212-0053, which provided for surveys only as an adjunct to focus groups. The expanded information collection will further the goals of Executive Order 12862, Setting Customer Service Standards, which states the Federal Government must seek to provide “the highest quality of service delivered to customers by private organizations providing a comparable or analogous service.”
The PBGC uses customer satisfaction focus groups and surveys to find out about the needs and expectations of its customers and assess how well it is meeting those needs and expectations. By keeping these avenues of communication open, the PBGC can continually improve service to its customers, including plan participants and beneficiaries, plan sponsors and their affiliates, plan administrators, pension practitioners, and others involved in the establishment, operation and termination of plans covered by the PBGC's insurance program. Because the areas of concern to the PBGC and its customers vary and may quickly change, it is important that the PBGC have the ability to evaluate customer concerns quickly by developing new vehicles for gathering information under this generic approval. The focus groups and surveys will provide important information on customer attitudes about the delivery and quality of agency services and will be used as part of an ongoing process to improve PBGC programs. The PBGC is including in this information collection two surveys previously approved by OMB (OMB Approval Nos. 1212-0056 and 1212-0058).
Participation in the focus groups and surveys will be voluntary. The PBGC estimates that the average annual burden will total 2,500 burden hours for 9,500 respondents (an average of about one-quarter hour per respondent). The PBGC will consult with OMB regarding each specific information collection during the approval period.
On December 10, 1999, the PBGC published in the
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the “Commission”) has submitted to the Office of Management and Budget (“OMB”) a request for extension and approval on the collection of information discussed below.
Section 23(c) of the Investment Company Act of 1940 [15 U.S.C. 80a-23(c)] (“Investment Company Act” or “Act”) prohibits a registered closed-end investment company (“closed-end fund” or “fund”) from purchasing any security it issues except on a securities exchange, pursuant to tender offers, or under such other circumstances as the Commission may permit by rules or orders designed to ensure that purchases are made in a manner that does not unfairly discriminate against any holders of the securities to be purchased. Rule 23c-1 [17 CFR 270.23c-1] under the Act permits a closed-end fund that meets certain requirements to repurchase its securities other than on an exchange or pursuant to a tender.
A registered closed-end fund that relies on rule 23c-1 may purchase its securities for cash if, among other conditions set forth in the rule, certain conditions are met:
• Payment of the purchase price is accompanied or preceded by a written confirmation of the purchase;
• The purchase is made at a price not above the market value, if any, or the asset value of the security, whichever is lower, at the time of the purchase; and
• If the security is stock, the issuer has, within the preceding six months, informed stockholders of its intention to purchase stock of the class by letter or report addressed to all the stockholders of the class.
In addition, the issuer must file with the Commission, on or before the tenth day of the month following the date in which the purchase occurs, two copies of Form N-23C-1. The form requires the issuer to report all purchases in has made during the month, together with a copy of any written solicitation to purchase securities under rule 23c-1 sent or given during the month by or on behalf of the issuer to ten or more persons.
The purpose of rule 23c-1 is to protect shareholders of closed-end funds from fraud in connection with the repurchase by funds of their own securities. The purpose of the rule's requirement that the fund file Form N-23C-1 with the Commission is to allow the Commission to monitor funds' repurchase of securities as well as any written solicitation used by the fund to effect those repurchases, and to make that information available to the public. Investors may seek this information when determining whether to invest in certain funds.
The requirements to file Form N-23C-1 applies to a closed-end fund only when the fund has repurchased its securities. If the information provided
Commission staff estimates that each year approximately 19 closed-end funds use the repurchase procedures under rule 23c-1, and that these funds file a total of 115 forms each year.
These estimates represent an increase of 92 hours from the prior estimate of 23 hours. The increase results primarily from the increase in the number of funds relying on the rule to purchase their securities. At the time of the last submission the Commission estimated that 4 funds filed a total of 23 Form N-23C-1s annually with the Commission (with each fund filing between 1 and 12 forms during the year). In 1999, 19 funds filed 115 forms with the Commission.
The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules and forms.
Compliance with the collection of information requirements of the rule and form is necessary to obtain the benefit of relying on the rule and form. 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 control number.
Please direct general comments regarding the above information to the following persons: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 3208, New Executive Office Building, Washington, DC 20503; and (ii) Michael E. Bartell, Associate Executive Director, Office of Information Technology, Securities and Exchange Commission, 450 5th Street, NW, Washington, DC 20549. Comments must be submitted to OMB within 30 days of this notice.
Securities and Exchange Commission (the “Commission” or “SEC”).
Notice of application for an order pursuant to Section 26(b) of the Investment Company Act of 1940 (the “1940 Act”) approving a substitution of underlying fund shares (the “Substitution”) and pursuant to Section 17(b) of the 1940 Act exempting certain in-kind transactions from Section 17(a) of the 1940 Act in connection with the Substitution.
Applicants request an order to permit certain registered unit investment trusts to substitute shares of the S&P 500 Index Portfolio (the “JPVF 500 Portfolio”) of the Jefferson Pilot Variable Fund, Inc. (“JPVF”) for shares of the Fidelity Index 500 Portfolio (the “Fidelity 500 Portfolio”) of the Fidelity Variable Insurance Products Fund II (“FVIPF II”) currently held by those unit investment trusts, and to permit certain in-kind redemptions of portfolio securities in connection with the Substitution.
Alexander Hamilton Life Insurance Company of America (“AH Life”), Alexander Hamilton Variable Annuity Separate Account (“AH Separate Account”), Jefferson Pilot Financial Insurance Company (“Jefferson Pilot Financial”), JPF Separate Account A (“JPF Account A”), JPF Separate Account C (“JPF Account C”), Jefferson Pilot LifeAmerica Insurance Company (“JP LifeAmerica”), JPF Separate Account B (“JPF Account B”), Jefferson-Pilot Life Insurance Company (“JP Life”), Jefferson-Pilot Separate Account A (“JP Life Account A”) and Jefferson Pilot Investment Advisory Corporation (“Jefferson Pilot Advisory”)(collectively, the “Applicants”).
The application was filed on December 15, 1999, and amended and restated on March 8, 2000.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Secretary of the Commission and serving Applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 27, 2000, and should be accompanied by proof of service on Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary of the Commission.
Secretary, Securities and Exchange Commission, 450 Fifth Street NW 20549-0609. Applicants: c/o Jefferson Pilot Financial Insurance Company, One Granite Place, Concord, New Hampshire 03301, Attn: Shari J. Lease, Esq.
Kevin P. McEnery, Senior Counsel, or Susan M. Olson, Branch Chief, Office of Insurance Products, Division of Investment Management, at (202) 942-0670.
The following is a summary of the application. The complete application is available for a fee from the SEC's Public Reference Branch, 450 Fifth Street, NW, Washington, DC 20549-0102 (tel. (202) 942-8090).
1. AH Life is a stock life insurance company organized under the insurance laws of the State of Michigan in 1963. AH Life commenced operations on October 31, 1964, and is engaged primarily in the sale of annuity contracts and life insurance policies. AH Life is authorized to write annuities and life insurance in Canada, the District of Columbia, and all states except New York. Jefferson Pilot is a stock life insurance company chartered in 1903 in Tennessee. Prior to May 1, 1998, Jefferson Pilot Financial was known as Chubb Life Insurance Company of America (“Chubb Life”). In 1991 Chubb Life redomesticated from
2. AH Separate Account is a segregated asset account of AH Life. It was established by AH Life pursuant to a resolution of its Board of Directors on January 24, 1994, in accordance with the laws of Michigan and is registered as a unit investment trust under the 1940 Act. AH Life issues certain variable annuity contracts through the AH Separate Account.
3. JPF Account A was established by Jefferson Pilot Financial pursuant to a resolution of its Board of Directors on August 20, 1984 in accordance with laws of New Hampshire and is registered as a unit investment trust under the 1940 Act. JPF Account A is used to fund certain variable life insurance policies issued by Jefferson Pilot Financial.
4. JPF Account C is a segregated asset account of Jefferson Pilot Financial. It was established by Jefferson Pilot Financial pursuant to a resolution of its Board of Directors on August 3, 1993, in accordance with the laws of New Hampshire and is registered as a unit investment trust under the 1940 Act. JPF Account C is used to fund certain variable life insurance policies issued by Jefferson Pilot Financial.
5. JPF Account B is a segregated asset account of JP LifeAmerica. It was established by JP LifeAmerica pursuant to a resolution of its Board of Directors on March 2, 1994, in accordance with the laws of New Jersey and is registered as a unit investment trust under the 1940 Act. JPF Account B is used to fund certain variable life insurance policies issued by JP LifeAmerica.
6. JP Life Account A is a segregated asset account of JP Life. Its predecessor was established pursuant to a resolution of the Board of Directors of JP Life on May 13, 1969. JP Life Account A was established under the laws of North Carolina and is registered as a unit investment trust under the 1940 Act. JP Life Account A is used to fund certain variable annuity contracts issued by JP Life.
7. The above described segregated asset accounts are referred to in the application and herein as the “Separate Account Applicants.” The variable annuity and variable life contracts issued by the Life Company Applicants (through the Separate Account Applicants) that would be affected by the Substitution are referred to in the application and herein as the “Contracts.”
8. Jefferson Pilot Advisory (formerly, Chubb Investment Advisory Corporation) is the investment adviser to the Jefferson Pilot Variable Fund, Inc. (“JPVF”), which is registered as an open-end management investment company under the 1940 Act and which was incorporated in Maryland on October 19, 1984, and each of its portfolios. One of these portfolios is the S&P 500 Index Portfolio (the “JPVF 500 Portfolio”). Jefferson Pilot Advisory is a corporation organized under the laws of Tennessee in 1984 and is registered as an investment adviser under the Investment Advisers Act of 1940. Jefferson Pilot Advisory is a wholly-owned subsidiary of Jefferson-Pilot Corporation. Jefferson Pilot Advisory has obtained an SEC order granting relief from Section 15(a) of the 1940 Act and certain other provisions (the “JPVF Order”) permitting it to manage JPVF's portfolios pursuant to a “manager-of-managers” arrangement.
9. The Fidelity Index 500 Portfolio (“Fidelity 500 Portfolio” or the “Replaced Fund”) is a series of the Fidelity Variable Insurance Products Fund II (“FVIPF II”), an open-end management investment company established as a Massachusetts business trust under a Declaration of Trust dated March 21, 1988. Shares of the Fidelity 500 Portfolio are currently available only through the purchase of variable annuity and variable life insurance contracts and through certain tax qualified retirement plans. Fidelity Management & Research Company (“FMR”) acts as the Fidelity 500 Portfolio's investment adviser and has retained Bankers Trust Company (“BTC”) to serve as sub-adviser to the Fidelity 500 Portfolio. The Fidelity 500 Portfolio is an investment option under each of the Contracts.
10. Applicants state that the Fidelity 500 Portfolio seeks investment results that correspond to the total return of common stocks publicly traded in the United States as represented by the Standard & Poor's 500 Composite Stock Price Index (‘S&P 500 Index”). Under normal circumstances, the Fidelity 500 Portfolio intends to invest at least 80% of its assets in common stocks included in the S&P 500 Index. The Fidelity 500 Portfolio seeks to achieve a 98% or better correlation between its total return, before fees and expenses, and the total return of the S&P 500 Index.
11. Applicants state that the JPVF 500 Portfolio was established pursuant to a resolution of the JPVF's Board of Directors at a Board meeting held on February 7, 2000. Applicants represent that JPVF filed a post-effective amendment to its registration statement on February 16, 2000 to register shares of the JPVF 500 Portfolio. The Substitution proposed by the application cannot go forward unless and until the post-effective amendment relating to JPVF 500 Portfolio's shares becomes effective. Upon such effectiveness, shares of JPVF 500 Portfolio will be offered only to corresponding sub-accounts of separate accounts established by the Life Company Applicants and in the future may be offered to other insurance companies, including insurance companies that are not affiliated with the Life Company Applicants. Jefferson Pilot Advisory will serve as investment manager of the JPVF 500 Portfolio and will retain Barclays Global Investors (‘Barclays”) to act as sub-adviser to the JPVF 500 Portfolio.
12. As disclosed in the post-effective amendment, the JPVF 500 Portfolio's investment objective is to seek to approximate as closely as practicable, before fees and expenses, the total rate of return of common stock publicly traded in the United States, as represented by the S&P 500 Index. The JPVF 500 Portfolio will pursue its objective by investing in all the securities that make up the S&P 500 Index and by investing in these securities in proportions that match their index weights, although the Portfolio reserves the right not to invest in every security in the S&P 500 Index if it is not practical to do so under the circumstances. The JPVF 500 Portfolio may also invest in stock index futures as a substitute for a comparable market position in the securities underlying the S&P 500 Index.
13. Applicants represent that the fees of the Fidelity 500 Portfolio were as follows. There is an annual management fee of .24%, and operating expenses for the fiscal year ending December 31, 1998 were .11%. Applicants state that since the Fidelity 500 Portfolio is subject to an expense cap of .28%, 07% of such expenses were reimbursed and shareholders were assessed annual fees of .28% for that fiscal year. The Fidelity 500 Portfolio's expense cap is a non-contractual voluntary cap which may be terminated at any time. Applicants represent that, as to the JPVF 500 Portfolio, like the Fidelity 500 Portfolio, there will be an annual management fee of .24%. Annual operating expenses are anticipated to be .10%. Like the Fidelity 500 Portfolio, the JPVF 500 Portfolio will also be subject to an expense cap of .28%. Therefore, Jefferson Pilot Advisory would reimburse the JPVF 500 Portfolio .06% of its expenses to maintain annual expenses at no greater than .28%. Like the Fidelity 500 Portfolio's expense cap, the JPVF 500 Portfolio's expense cap will be a non-contractual voluntary cap which can be terminated at any time. However, Applicant Jefferson Pilot Advisory has represented that it will waive investment management fees and reimburse expenses to the extent necessary to keep annual fees of the JPVF 500 Portfolio from exceeding .28% of the average daily net assets through April 30, 2001.
14. Applicants represent that, as of June 30, 1999, the Fidelity 500 Portfolio had assets of approximately $8.3 billion. Since the JPVF 500 Portfolio will be a newly organized fund, it presently does not have any assets and will not have any assets prior to the Substitution. Applicants further represent that they anticipate, based on current figures, that $150 million in assets attributable to the Contracts would be invested in the Replacement Fund upon the consummation of the Substitution. Jefferson Pilot Advisory and Barclays have determined that the assets that will initially comprise the JPVF 500 Portfolio (whether redemptions are effected for cash and/or portfolio securities) upon consummation of the Substitution are entirely sufficient for purposes of meeting the JPVF 500 Portfolio's objectives and that the JPVF 500 Portfolio will not be disadvantaged in any way by virtue of its smaller initial asset base as compared with the present asset base of the Fidelity 500 Portfolio.
15. Applicants represent that Barclays presently manages a publicly available S&P 500 fund called the Barclays Global Investors S&P 500 Fund (“Barclays S&P 500 Fund”), a series of Barclays Global Investors fund, Inc., that has assets of approximately $2.6 billion as of August 31, 1999. The Barclays S&P 500 Fund seeks to approximate as closely as practicable, before fees and expenses, the capitalization-weighted total return of the S&P 500 Index. The Barlcays S&P 500 Fund pursues its objectives by investing in all the securities that make up the S&P 500 Index and by investing in these securities in proportions that match their index weights. The Barclays S&P 500 Fund seeks to come within 95% of the total return of the S&P 500 Index, before fees and expenses, in falling as well as rising markets and does not seek to “beat” the market and does not seek temporary defensive positions when markets appear overvalued. It is anticipated that Barclays would “bunch” orders for the purchase and sale of securities for the JPVF 500 Portfolio with the publicly available Barclays S&P 500 Fund under appropriate circumstances, and subject to any regulatory requirements. Accordingly, the asset base of the publicly available Barclays S&P 500 Fund managed by Barclays will afford the JPVF 500 Portfolio certain economies of scale and other tangible benefits.
16. Applicants state that the prospectuses by which the Contracts were offered reserve to the respective Life Company Applicants the right to replace the shares of any underlying registered investment company held by the applicable Separate Account Applicant with shares of another registered investment company, provided any such substitution is approved by the SEC to the extent required by applicable law.
17. The Life Company Applicants propose to redeem all of the shares of the Fidelity 500 Portfolio they currently hold on behalf of the Separate Account Applicants at the close of business on the effective date of the Substitution. Applicants state that, in connection with such redemptions and the purchase of portfolio securities by the JPVF 500 Portfolio, the Fidelity 500 and JPVF 500 Portfolios would normally incur brokerage costs as the Fidelity 500 Portfolio would have to dispose of portfolio securities to satisfy redemption requests and the JPVF 500 Portfolio would have to purchase securities with the redemption proceeds. In order that such costs can be avoided, the redemption of shares of the Fidelity 500 Portfolio may be effected in whole or in part for portfolio securities (
18. Applicants state that in all cases, the Life Company Applicants on behalf of their respective Separate Account Applicants will simultaneously place redemption requests with the Fidelity 500 Portfolio and purchase orders with the JPVF 500 Portfolio so that purchases will be for the exact amount of the redemption proceeds. As a result, at all times, monies attributable to Contractowners who have allocated value to the Fidelity 500 Portfolio will remain fully invested.
19. Applicants represent that the full net asset value of the redeemed shares held by the Separate Account Applicants will be reflected in Contractowners' accumulation unit or annuity unit values following the Substitution. The Life Company Applicants represent that they will assume all transaction costs and expenses relating to the Substitution.
20. The Life Company Applicants have determined, for reasons based upon administrative, economic and marketing concerns, to use a proprietary mutual fund to serve as the S&P 500 fund that will serve as an underlying investment option for the Contracts, as well as other variable life and variable annuity contracts which they may offer in the future. Applicants state that the proposed Substitution will allow the Life Company Applicants to maintain a greater proprietary identity between their variable products and the S&P 500 investment option, which historically has been one of the most popular investment options among Contractowners. The proposed Substitution will afford the Life Company Applicants greater control with respect to administrative and compliance issues over this investment option and afford Jefferson Pilot Advisory the ability to make sub-adviser changes when necessary or appropriate as consistent with the above-noted manager-of-managers arrangement, subject to the conditions as set forth in the application.
21. Applicants also believe that Jefferson Pilot Advisory, as an affiliate of each Life Company Applicants, will have greater incentive to provide superior shareholder services to Contractowners. Correspondingly, the Life Company Applicants will have greater opportunity to contribute to and review the adequacy of the services being provided in connection with this investment option. Given the relative simplicity involved in managing an S&P 500 fund, Applicants believe that when comparing two S&P 500 funds which have the same fee structures and which are managed by experienced and suitable investment advisers, the difference between the respective funds lies mainly in the nature and quality of the non-advisory services provided by management of the respective funds. In this regard, Applicants believe Contractowners will be better served if the S&P 500 fund becomes a proprietary fund.
22. Applicants state that their desire to effect the Substitution also relates, in part, to BTC's role as sub-adviser to the Fidelity 500 Portfolio. Applicants represent that BTC has recently experienced turnover of portfolio management personnel which included the departure of the team which managed the Fidelity 500 Portfolio. Applicants believe that these events are the kind of events that can be better managed for the benefit of Contractowners by including the JPVF 500 Portfolio in the funds over which Jefferson Pilot Advisory has overall management authority. Applicants further represent BTC recently encountered certain compliance problems that will require a permanent order to exemption issued by the SEC under Section 9(c) of the 1940 Act to permit it to continue to serve as an investment adviser to registered mutual funds. Applicants state that the substance of these compliance problems presently must be disclosed in the Fidelity 500 Portfolio's prospectus and will continue to be disclosed therein in the future. The Life Company Applicants find this type of disclosure to be troubling in connection with underlying mutual funds that serve as investment vehicles for their products.
23. Applicants represent that each of the Life Company Applicants supplemented the prospectus for its applicable Separate Account Applicant at the time of filing of the original application to reflect the proposed Substitution and its essential terms and mailed such supplement to Contractowners at that time. The supplement informed Contractowners (among other things) that they have the right to transfer amounts allocated to the Fidelity 500 Portfolio to any other investment option available under the Contracts at any time prior to the Substitution, and for a period of 31 days after the Substitution, and that any such transfer would not count toward the number of free transfers permitted in a Contract year. Within five (5) days after the Substitution, the Life Company Applicants will send to their respective Contractowners a written notice (“Notice”) of the Substitution, identifying the shares of the Replaced Fund that have been eliminated and the shares of the Replacement Fund that have been substituted and other relevant information. The Applicants will include in such mailing the prospectus for the Replacement Fund and the applicable revised prospectus or supplement for the Contracts describing the Substitution.
24. Contractowners will be advised in the Notice that for a period of thirty-one (31) days from the mailing of the Notice, Contractowners may transfer any substituted assets to any other sub-account available under their Contracts without limitation or charge and without any such transfer counting as one of the free transfers permitted per
25. Prior to effecting the Substitution, Applicants state that they will have satisfied themselves, based on advice of counsel familiar with insurance laws, that the Contracts allow the Substitution as described in the application, and that the transactions can be consummated as described therein under applicable insurance laws and under the Contracts.
26. Applicants further state that, prior to effecting the Substitution, they will have complied with any regulatory requirements they believe are necessary to complete the transactions in each jurisdiction where the Contracts are qualified for sale.
1. Section 26(b) of the 1940 Act provides that “[i]t shall be unlawful for any depositor or trustee of a registered unit investment trust holding the security of a single issuer to substitute another security for such security unless the [SEC] shall have approved such substitution.” Section 26(b) of the 1940 Act was enacted as part of the Investment Company Act Amendments of 1970. Prior to the enactment of these amendments, a depositor of a unit investment trust could substitute new securities for those held by the trust by notifying the trust's security holders of the substitution within five (5) days after the substitution. In 1966, the SEC, concerned with the high sales charges then common to most unit investment trusts and the disadvantageous position in which such charges placed investors who did not want to remain invested in the substituted security, recommended that Section 26 be amended to require that a proposed substitution of the underlying investments of a trust receive prior SEC approval. Congress responded to the SEC's concerns by enacting Section 26(b) to require that the Commission approve all substitutions by the depositor of investments held by unit investment trusts. As the legislative history makes clear, Congress intended Section 26(b) to provide SEC scrutiny of proposed substitutions which could otherwise, in effect, force shareholders dissatisfied with the substituted security to redeem their shares, thereby possibly incurring either a loss of the sales load deducted from initial purchase payments, an additional sales load upon reinvestment of the proceeds of redemption, or both.
2. Applicants submit that the purposes, terms, and conditions of the Substitution are consistent with the principles and purposes of Section 26(b) and do not entail any of the abuses that Section 26(b) is designed to prevent. Applicants assert that, simply put, Contractowners will be assessed no charges whatsoever in connection with the Substitution and their annual fund level charges will not increase. In addition, to the extent a Contractowner does not wish to participate in the Substitution, he or she is free to transfer to any other option available under the relevant Contract prior to the Substitution and after the Substitution during the Free Transfer Period, without such transfer counting toward the number of free transfers permitted per year under a Contract. Applicants assert that Contractowners will be substituted into a fund whose investment objectives, policies and expenses are substantially identical in all material respects to those of the Replaced Fund. Finally, Applicants have concluded that it would be appropriate and in the best interests of Contractowners to have a proprietary S&P 500 mutual fund underlying their variable products.
3. Applicants submit that the Substitution presents none of the harms that Section 26(b) was intended to guard against and is consistent with the protection of investors and the purposes fairly intended by the 1940 Act for the following reasons:
(1) the Replacement Fund has objectives, policies, and restrictions substantially identical in all material respects to the objectives, policies, and restrictions of the Replaced Fund so as to continue to fulfill the Contractowners' objectives and risk expectations;
(2) after receipt of the Notice informing a Contractowner of the Substitution, a Contractowner may request that his or her assets be reallocated to another subaccount at any time during the Free Transfer Period. The Free Transfer Period provides sufficient time for Contractowners to consider their reinvestment options;
(3) the Substitution will be at net asset value of the respective shares, without the imposition of any transfer or similar charge;
(4) the Life Company Applicants have undertaken to assume all expenses and transaction costs (or ensure that an affiliate assumes such expenses and costs), in connection with the Substitution;
(5) the Substitution will in no way alter the contractual obligations of the Life Company Applicants or the rights and privileges of Contractowners under the Contracts;
(6) Applicants anticipate that the JPVF 500 Portfolio will seek to rely upon the JPVF Order. Applicants will take no action in reliance on the JPVF Order with respect to JPVF 500 Portfolio unless and until the operation of JPVF 500 Portfolio in the manner contemplated by the JPVF Order, is approved by the holders of a majority of the outstanding voting securities of JPVF 500 Portfolio within the meaning of the 1940 Act, by vote obtained following the Substitution in a manner consistent with all outstanding relief granted by the SEC;
(7) the Substitution will in no way alter the tax benefits to Contractowners;
(8) Contractowners will not incur any fees or charges as a result of the proposed Substitution, nor will the Contractowners' rights or the Life Company Applicants' obligations under the Contracts be altered in any way. The Life Company Applicants will bear all expenses incurred in connection with the proposed Substitution and related filings and notices, including legal, accounting, and other fees and expenses. The proposed Substitution will not cause Contract fees and charges currently being paid by existing Contractowners to be greater after the proposed Substitution than before the proposed Substitution; and
(9) Contractowners may withdraw amounts under the Contracts or terminate their interest in a Contract, under the conditions that currently exist, including payment of any applicable withdrawal or surrender charge.
4. Applicants maintain that the Replacement Fund and the Replaced Fund will have investment objectives and policies that are substantially the same in all material respects. Accordingly, Life Company Applicants have specifically made the determination that the Replacement fund is a suitable and appropriate investment vehicle for Contractowners who have allocated value to the Replaced Fund and that the Substitution will be consistent with Contractowners' investment expectations.
5. Applicants assert that the fees and expenses of the Replacement Fund will be equal to (or less than) those of the Replaced Fund and that the Replacement Fund will receive comparable (or better) overall services.
6. Applicants state that the prospectuses by which the Contracts were offered reserve to the respective Life Company Applicants the right to replace the shares of any underlying registered investment company held by the applicable Separate Account Applicant with shares of another registered investment company, provided any such substitution is approved by the SEC to the extent required by applicable law.
7. Applicants submit that, for all the reasons stated in the application, that their request for approval meets the standard set forth in Section 26(b) of the 1940 Act and is consistent with applicable precedent and should, therefore, be granted.
8. Section 17(a)(1) of the 1940 Act prohibits any affiliated person of a registered investment company, or an affiliated person of such an affiliated person, from selling any security or other property to such registered investment company. Section 17(a)(2) of the 1940 Act prohibits any of the persons described above from purchasing any security or other property from such registered investment company.
9. Applicants state that the proposed transactions first involve a transfer of portfolio securities by the Fidelity 500 Portfolio to the Separate Account Applicants; immediately thereafter, the Separate Account Applicants purchase shares of the JPVF 500 Portfolio with the portfolio securities received from the Fidelity 500 Portfolio. Since the Separate Account Applicants and the JPVF 500 Portfolio could be affiliated persons under Section 2(a)(3)(C) of the 1940 Act due to their common control, Applicants submit that this aspect of the Substitution could be prohibited by Section 17(a). Accordingly, Applicants believe that it is prudent to seek relief from Section 17(a).
10. Section 17(b) of the 1940 Act provides that the SEC may grant an order exempting transactions prohibited by Section 17(a) of the 1940 Act upon application if evidence establishes that:
(1) the terms of the proposed transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned;
(2) the proposed transaction is consistent with the investment policy of each registered investment company concerned, as recited in its registration statement and reports filed under the 1940 Act; and
(3) the proposed transaction is consistent with the general purposes of the 1940 Act.
11. Applicants represent that the terms of the proposed transactions: Are reasonable and fair, including the consideration to be paid and received; do not involved overreaching; are consistent with the policies of the affected registered investment companies; and are consistent with the general purposes of the 1940 Act.
12. Applicants maintain that the Substitution transactions, including the redemption of the Fidelity 500 Portfolio shares on an in-kind basis and the purchase of the JPVF 500 Portfolio shares, will be effected in conformity with Section 22(c) of the 1940 Act and Rule 22c-1 thereunder. Applicants also maintain that Contractowners will not incur any fees or charges as a result of the transfer of account values. Contractowners' rights and privileges under the Contracts and the Life Company Applicants' obligations thereunder will not be affected by the Substitution. Applicants assert that the Substitution will not increase Contract or separate account fees and charges after the Substitution. Expenses incurred in connection with the Substitution, including legal, accounting and other expenses, will not be borne by Contractowners. Contract values will remain unchanged and fully invested following the consummation of the Substitution. Accordingly, Applicants represent that Contractowner interests after the Substitution, in practical economic terms, will not differ in any measurable way from such interests immediately prior to the Substitution. Applicants asserts that in each case, the consideration to be received and paid is, therefore, reasonable and fair.
13. Applicants assert that the investment objectives and policies of the JPVF 500 Portfolio are substantially similar to the investment objectives and policies of the Fidelity 500 Portfolio. Applicants maintain that, in this regard, the Substitution is consistent with the findings required under Section 17(b) of the 1940 Act.
14. Applicants assert that the proposed Substitution is consistent with the general purposes of the 1940 Act and that the proposed transactions do not present any of the issues or abuses that the 1940 Act is designed to prevent.
15. Applicants submit that the proposed in-kind redemption transactions meet all of the requirements of Section 17(b) of the 1940 Act and that their request for an order pursuant to that section exempting the transactions from the provisions of Section 17(a) of the 1940 Act, to the extent necessary, should be granted.
Applicants assert that, for the reasons summarized above, the requested order approving the substitutions and related in-kind transactions should be granted.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by April 25, 2000, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified or any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After April 25, 2000, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.
GPU, Inc. (“GPU”), 300 Madison Avenue, Morristown, New Jersey 07960,
GPU seeks authorization to acquire a 36% interest in a nonutility subsidiary. GPU and several of its subsidiary companies
In connection with the demutualization, GPU expects UMI to sell its entire insurance portfolio to Cologne Re, which will assume all UMI obligations and liabilities for outstanding claims and future claims under policies written by UMI. GPU states that UMI will not conduct any active business. The workers compensation insurance previously provided by UMI will instead be provide by an affiliate of Cologne Re to the UMICO shareholders, at least through 2003. UMI and UMICO will not be liquidated and dissolved and will remain in existence until all claims or potential claims covered by outstanding UMI policies have either been resolved or adequately reinsured. Upon dissolution, the UMICO shareholders will be entitled to their pro rata shares of any remaining UMI surplus.
Prior to demutualization, the GPU subsidiaries (other than Prime and Onondaga) have assigned their present interests in UMI to GPU. In contemplation of the demutualization, GPU and other utility policy holders have entered into a subscription agreement providing for their purchase of shares of UMICO in proportion to their respective interests in UMI. Under the subscription agreement, GPU has agreed to acquire approximately 36.52% of UMICO in exchange for its present interest in UMI. Following the acquisition, UMICO will become a nonutility subsidary of GPU.
For the Commission by the Division of Investment Management, under delegated authority.
The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of March 2000. A copy of each application may be obtained for a fee at the SEC's Public Reference Branch, 450 Fifth St., N.W., Washington, DC 20549-0102 (tel. 202-942-8090). An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on April 25, 2000, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary, SEC, 450 Fifth Street, N.W., Washington, DC 20549-0609. For Further Information Contact: Daine L. Titus, at (202) 942-0564, SEC, Division of Investment Management, Office of Investment Company Regulation, 450 Fifth Street, N.W., Washington, DC 20549-0506.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application under section 17(b) of the Investment Company Act of 1940 (the “Act”) for an exemption from section 17(a) of the Act.
Applicants request an order to permit certain series of two registered open-end management investment companies to acquire all of the assets, subject to certain liabilities, of certain series of a third registered open-end management investment company. Because of certain affiliations, applicants may not rely on rule 17a-8 under the Act.
Touchstone Advisors, Inc. (“Touchstone Advisors”), Touchstone Series Trust (“Touchstone Trust”), Countrywide Investment Trust (“Investment Trust”), and Countrywide Strategic Trust (“Strategic Trust”).
The application was filed on January 24, 2000. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 25, 2000 and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons may request notification of a hearing by writing to the Commission's Secretary.
Secretary, Commission, 450 5th Street, NW, Washington, D.C. 20549-0609. Touchstone Advisors and Touchstone Trust, 311 Pike Street, Cincinnati, Ohio 45202; Investment Trust and Strategic Trust, 312 Walnut Street, Cincinnati, Ohio 45202.
Anu Dubey, Senior Counsel, at (202) 942-0687, or George Zornada, Branch Chief, at (202) 942-0564 (Division of Investment Management, Office of Investment Company Regulation).
The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Branch, 450 5th Street, NW, Washington, D.C. 20549-0102 (tel. 202-942-8090).
1. Touchstone Trust, a Massachusetts business trust, is registered under the Act as an open-end management investment company and offers eight series, including the Touchstone Bond Fund (“TS Bond”), the Touchstone Growth & Income Fund (“TS G & I”), the Touchstone Value Plus Fund (“TS Value Plus”), the Touchstone International Equity Fund (“TS International”) and the Touchstone Emerging Growth Fund (“TS Emerging”) (together, the “Acquired Funds”). Investment Trust, a Massachusetts business trust, is registered under the Act as an open-end management investment company and offers six series, including Countrywide Intermediate Bond Fund (“CW Bond”). Strategic Trust, a Massachusetts business trust, is registered under the Act as an open-end management investment company and will comprise nine series, including three newly-organized series. Countrywide Value Plus (“CW Value Plus”), Countrywide International Equity Fund (“CW International”) and Countrywide Emerging Growth Fund (“CW Emerging”). CW Value Plus, CW International and CW Emerging, together with CW Bond, are the “Acquiring Funds”. The Acquiring Funds and the Acquired Funds are referred to collectively as the “Funds”.
2. Touchstone Advisors, the investment adviser to the Acquired Funds, is a wholly-owned subsidiary of The Western-Southern Life Assurance Company (“Western-Southern”). Western-Southern is a wholly-owned subsidiary of The Western and Southern Life Insurance Company (“Western Southern Life”). Countrywide Investments, Inc. (“Countrywide”), the investment adviser to each Acquiring Fund, is an indirect wholly-owned subsidiary of Western Southern Life. Touchstone Advisors is the investment adviser to the Acquiring Funds. Both Touchstone Advisors and Countrywide are registered as investment advisers under the Investment Advisers Act of 1940.
3. Currently, Western Southern Life and/or Western-Southern own more than 5% (and in come cases more than 25%) of the outstanding voting securities of each of the Acquired Funds. The initial investment in each of CW Value Plus, CW International and CW Emerging will be contributed by one or more entities controlling, controlled by or under common control with Touchstone Advisors (“Touchstone Affiliates”) resulting in Touchstone Affiliates owning 100% of CW Value Plus, CW International and CW Emerging.
3. On January 7, 2000 and February 15, 2000, the board of trustees of each of the Touchstone Trust, Investment Trust and Strategic Trust (together, the “Boards”), including a majority of the trustees who are not “interested persons” as defined in section 2(a)(19) of the Act (“Disinterested Trustees”), approved a plan of reorganization between the Acquiring Funds and the Acquired Funds (the “Reorganization Plan”, and the transaction the
4. Applicants state that the investment objectives and policies of each Acquired Fund are substantially similar to those of its corresponding Acquiring Fund. Each Acquired Fund offers (i) class A shares, which are subject to a sales load and rule 12b-1 distribution fee, and (ii) class C shares, which are subject to a contingent deferred sales charge (“CDSC”) and rule 12b-1 distribution fee.
5. The Boards, including a majority of the Disinterested Trustees, determined that the Reorganization is in the best interests of each Fund, and that the interests of the existing shareholders of each Fund will not be diluted by the Reorganization. In assessing the Reorganization, the Boards considered various factors, including (a) the terms and conditions of the Reorganization Plan, (b) the investment advisory and other fees projected to be paid by an Acquiring Fund, and the projected expense ratio of an Acquiring Fund, as compared to those of the corresponding Acquired Fund,
6. The Reorganization is subject to a number of conditions precedent, including that (a) the shareholders of each Acquired Fund shall have approved the Reorganization Plan; (b) applicants shall have received exemptive relief from the Commission that is the subject of the application; (c) a registration statement on Form N-14, relating to the Acquiring Funds shall have become effective; and (d) applicants shall have received an opinion of counsel with respect to certain federal tax consequences of the Reorganization. The Reorganization Plan may be terminated and the Reorganization abandoned upon the mutual agreement of the Funds, upon a material breach of the Reorganization Plan by a Fund, or due to the failure to meet a condition precedent to consummation of the Reorganization Plan. Applicants agree not to make any material changes to the Reorganization Plan without prior approval of the Commission.
7. The definitive prospectus/proxy statement will be filed with the Commission and will be mailed to shareholders of the Acquired Funds on or about March 30, 2000. A special meeting of the shareholders will be held on or about April 19, 2000.
1. Section 17(a) of the Act generally prohibits an affiliated person of a registered investment company, or an affiliated person, acting as principal, from selling any security to, or purchasing any security from, the company. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include (a) any person directly or indirectly owning, controlling, or holding with power to vote 5% or more of the outstanding voting securities of the other person; (b) any person 5% or more of whose securities are directly or indirectly owned, controlled, or held with power to vote by the other person; (c) any person directly or indirectly controlling, controlled by, or under common control with the other person, and (d) if the other person is an investment company, any investment adviser of that company. Applicants state that the Funds may be deemed affiliated persons and thus the Reorganization may be prohibited by section 17(a).
2. Rule 17a-8 under the Act exempts from the prohibitions of section 17(a) mergers, consolidations, or purchases or sales of substantially all of the assets of registered investment companies that are affiliated persons, or affiliated persons of an affiliated person, solely by reason of having a common investment adviser, common directors, and/or common officers, provided that certain conditions set forth in the rule are satisfied.
3. Applicants state that they may not reply on rule 17a-8 because the Funds may be deemed to be affiliated for reasons other than those set forth in the rule. By virtue of the direct or indirect ownership by one or more Touchstone Affiliates of 5% or more (and in some cases 25% or more) of the outstanding voting securities of each of the Acquired Funds and of each of the Acquiring Funds (except CW Bond), each Acquired Fund may be deemed to be an affiliated person of an affiliated person of the Acquiring Fund. Thus, each Acquired Fund may be deemed to be an affiliated person of an affiliated person of the Acquiring Fund for reasons other than having a common investment adviser, common directors and/or common officers.
4. Section 17(b) of the Act provides that the Commission may exempt a transaction from the provisions of section 17(a) if the evidence establishes that the terms of the proposed transaction, including the consideration to be paid, a reasonable and fair and do not involve overreaching on the part of any person concerned, and that the
5. Applicants request an order under section 17(b) of the Act exempting them from section 17(a) of the Act to the extent necessary to permit applicants to consummate the Reorganization. Applicants submit that the Reorganization satisfied the standards of section 17(b) of the Act. Applicants states that the Boards, including a majority of the Disinterested Trustees, have found that participation in the Reorganization is in the best interests of each Fund, and that the interests of the existing shareholders will not be diluted as a result of the Reorganization. In addition, applicants state that the Reorganization will be on the basis of net asset value.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
On September 18, 1998, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
In a letter dated February 1, 1993, the staff of the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) indicated that it was compatible with Regulation T
Federal Reserve Board amendments to Regulation T that became effective on June 1, 1997, modified or deleted certain margin requirements regarding options transactions in favor of rules to be adopted by the options exchanges, subject to approval by the Commission.
Specifically, the proposal amends Amex Rule 462(d)(2)(H) to provide that no margin need be required in respect of a call index option or a put index option carried in a short position where the same account carries a long position in the PDRs or Index Fund Shares specified in Commentary .10 to the rule, and the PDRs or Index Fund Shares serving as cover have a market value at least equal to the aggregate current index value
In addition, the proposal states that in computing the margin on an existing position in PDRs or Index Fund Shares that covers a short index put or call, the market value of the PDRs or Index Funds Shares to be used shall not be greater than the exercise price, in the case of a call, or less than the market value of the PDRs or Index Fund Shares, in the case of a put, and the required margin shall be increased by any unrealized loss on the short put security position.
For the reasons discussed below, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange. In particular, the Commission finds that the proposal is consistent with the Section 6(b)(5)
As noted above, the proposal will amend Amex Rule 462 to provide that no margin need be required for short call or put positions in specified index options when the account carrying the short index option position also holds a long position in specified corresponding PDRs or Index Fund Shares that have a market value at least equal to the aggregate current index value of the stocks underlying the index option contracts to be covered. Specifically, the proposal will allow positions in SPDRs to serve as cover for positions in S&P 500 Index options; positions in MidCap SPDRs to serve as cover for positions in MidCap 400 Index options; positions in DIAMONDS to serve as cover for positions in DJX options; and positions in Nasdaq-100 Shares to served as cover for positions in Nasdaq-100 Index options.
Thus, the proposal will allow long positions in specified PDRs or Index Fund Shares to cover short positions in options on the indexes that the PDRs or Index Fund Shares are designed to replicate. The values of the PDR or Index Fund Share and the index that the PDR or Index Fund Share is designed to replicate should move in tandem. In addition, the PDR or Index Fund Share serving as cover for an index option position must have a market value at least equal to the aggregate current index value of the stocks underlying the index option contracts to be covered. Accordingly, the long PDR or Index Fund Share position service as cover for the short index option position should ensure that the index option writer would be able to deliver upon exercise the difference between the current index value and the exercise price of the option. Specifically, in an account that meets the requirements of the proposal, the amount earned from closing out the long PDR or Index Fund Share position would adequately cover the option writer's obligation upon exercise. Accordingly, the Commission believes that it is reasonable for the Amex to allow SPDRs, MidCap SPDRs, DIAMONDS, and Nasdaq-100 Shares to serve as cover for short positions in options on the indexes they are designed to replicate.
In addition, the Commission notes that the proposal incorporates into the Amex's rules the Federal Reserve Board staff's positions regarding SPDRs and MidCap SPDRs.
The Commission also believes that it is reasonable for the proposal to provide that in computing the margin on an existing position in PDRs or Index Fund Shares to be used shall not be greater than the exercise price, in the case of a call, or less than the market value of the PDRs or Index Fund Shares, in the case of a put, and that the required margin shall be increased by any unrealized loss on the short put security position. The Commission believes that these requirements will help to ensure that the writer of an index put or call option that is covered by a long position in PDRs or Index Fund Shares would be able to meet its obligation upon exercise of the option. In addition, the Commission notes that the proposed margin requirement for PDRs or Index Fund Shares serving as cover for short index option positions is consistent with current Amex Rule 462(d)(2)(H)iv),
The Commission notes that the current proposal applies solely to the PDRs or Index Fund Shares and the corresponding index options specified in the proposal. If the Amex intends to allow additional PDRs or Index Fund Shares to serve as cover for short positions in options on other indexes, the Amex must file a proposed rule change pursuant to Section 19(b)(1) of the Act and Rule 19b-4 thereunder to adopt the additional offsets.
The commission finds good cause for approving Amendment No. 3 to the proposed rule change prior to the thirtieth day after the date of publication of notice of filing thereof in the
Interested persons are invited to submit written data, views and arguments concerning Amendment No. 3 including whether Amendment No. 3 is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying at the Commission's Public Reference Room. Copies of the filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to File No. SR-Amex-98-33 and should be submitted by April 28, 2000.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange requests an extension through September 30, 2000, of a pilot program established in Exchange Rule 6.2A, which governs the operation of, and the eligibility to participate in, the Exchange's Rapid Opening System.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to extend for six months the Rapid Opening System (“ROS”) pilot program.
The CBOE represents that its experience with ROS over the past year has been positive. Member firms have
The Exchange also believes that the current procedure for manually incorporating non-bookable orders has been adequate to provide these orders with the executions that they deserve on the opening. In fact, the Exchange has observed that many firms currently choose to wait until after the opening has been completed to represent their orders because of the short time needed to complete a ROS opening and because the firms have a better sense of where they may trade the order after the opening and after opening quotes have been disseminated. The Exchange represents, however, that it will continue to explore possibilities for including non-bookable orders
In the Commission's approval order of the ROS system, the Commission requested the Exchange to study issues related to the SEC's concerns during the pilot period and to report back to the Commission at least sixty days prior to seeking permanent approval of ROS.
The proposed rule change is consistent with Section 6(b) of the Act
CBOE does not believe that the proposed rule change will impose any burden on competition.
CBOE has neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(16)
The Commission, consistent with the protection of investors and the public interest, has determined to make the proposed rule change operative immediately upon filing for the following reasons. The proposed rule change extends the expiration date of the ROS pilot program from March 31, 2000, to September 30, 2000. An extension would allow the Exchange to continue to offer ROS without interruption and provide the Exchange more time to complete its review and evaluation of the ROS pilot program.
Among the issues that the Commission expects the CBOE to explore in its report are: how and when market-makers set ROS risk and size thresholds; how often such thresholds are exceeded and result in the adjustment of AutoQuote; the effect of AutoQuote adjustments on the quality of customer executions; any effects on existing order execution priority; and the handling of an adjustments made for non-bookable orders.
Based on the above reasons, the Commission believes it is consistent with the protection of investors and the public interest that the proposed rule change become operative immediately upon the date of filing, March 22, 2000. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing,
Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to File No. SR-CBOE-00-09 and should be submitted by April 28, 2000.
For the Commission, by the Division of Market Regulations, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The proposed rule change would implement the short-term redemption service as an ancillary service of the custody reorganization and redemption service.
In its filing with the Commission, DTC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. DTC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
The purpose of the proposed rule change is to implement the short-term redemption service. The short-term redemption service will enhance the custody reorganization and redemption services, which are a part of DTC's custody service. DTC believes that the proposed rule change will provide its participants with additional flexibility in their use of the custody reorganization and redemption services.
The short-term redemption service will be available for the following instruments as they are handled within the custody reorganization and redemption services: certificated bankers acceptances, municipal variable-rate demand obligations issued in commercial paper mode, institutional certificates of deposit, and other instruments held in custody which must be presented to the paying agent on, but not before, the scheduled payable date with the agent making payment of principal or income proceeds later that same afternoon, which is too late for processing through DTC's settlement system. Some instruments may also have certificates with different payable dates identified by the same CUSIP number.
Under the short-term redemption service, the payable date and other relevant payment details are captured at the certificate level by DTC when the eligible instruments are deposited into custody. A short-term redemption payment projection report detailing instruments with payable dates within the next five business days is produced daily and forwarded to the participant. It is the participant's responsibility to verify the completeness and accuracy of this report and to immediately notify DTC of any discrepancies (
The fee per item for this enhanced service is $32.25, which fee is an aggregate of several custody service fees previously filed with DTC's 1999 fee schedule.
DTC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act
DTC perceives no adverse impact on competition by reason of the proposed rule change.
The proposed rule change has been developed through discussions with several participants. Written comments
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of DTC. All submissions should refer to File No. SR-DTC-99-26 and should be submitted by April 28, 2000.
For the Commission by the Division of Market Regulation, pursuant to delegated authority.
On September 23, 1999, the Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change (File No. SR-DTC-99-22) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”).
Currently, DTC's call lottery process allocates called book-entry only (“BEO”) securities among participants having positions in the called securities as of the close of business on the day DTC announces the call lottery (“DTC call announcement date”). DTC adopted these procedures in March 1998 with the approval of the Commission and the endorsement of the Corporate Actions Division of the Securities Industry Association (“Corporate Actions Division”).
At times, DTC receives notice of a call of BEO securities after the redemption date. Under DTC's current BEO call lottery procedures, the DTC call announcement date in such a situation will necessarily be after the date as of which the called securities are deemed to have been redeemed by the issuer. Use of the DTC call announcement date in these instances can have an adverse impact on participants and their customers who have acquired a security position during the period between the redemption date and the DTC call announcement date because they have acquired the called security without notice that the security has been redeemed. Therefore, for call notices received after the redemption date, DTC is amending its BEO securities call lottery procedures so that the allocation lotteries will be run using participants' positions as of the close of business on the day prior to the call publication date. Use of the call publication date to determine lottery allocations for calls of BEO securities where DTC receives notice of the call after the redemption date is consistent with DTC's procedures for lotteries in certificated issues. Allocation lotteries for other calls of BEO securities, where notice is received on or before the redemption date, will continue to be run using participant's positions as of the DTC call announcement date.
Section 17A(b)(3)(F)
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act and the rules and regulations thereunder.
For the Commission by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The proposed rule change consists of changes to EMCC's fee schedule.
In its filing with the Commission, EMCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. EMCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
EMCC has determined to charge its trade input fee so that inter-dealer broker members pay $1.50 per compared bond side and dealer members pay $2.00 per compared bond side.
The proposed rule change is consistent with the requirements of Section 17A(b)(3)(D) of the Act
EMCC does not believe that the proposed rule change will have any impact, or impose any burden, on competition.
One comment was received by EMCC.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of EMCC. All submissions should refer to File No. SR-EMCC-99-11 and should be submitted by April 28, 2000.
For the Commission by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
The MSRB is proposing a notice of interpretation, in question and answer format, concerning MSRB Rule G-38, on consultants. The purpose of the proposed rule change is to provide interpretative guidance concerning MSRB Rule G-38. The proposed rule change is as follows:
In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
On January 17, 1996, the Commission approved Board rule G-38, on consultants.
The MSRB represents that the proposed rule change is consistent with Section 15B(b)(2)(C) of the Act
The MSRB does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, since it would apply equally to all brokers, dealers and municipal securities dealers.
The MSRB has neither solicited nor received written comments on the proposed rule change.
The foregoing rule change, which constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule imposed by the Exchange, has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. § 552, will be available for inspection and copying at the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the MSRB. All submissions should refer to File No. SR-MSRB-00-05 and should be submitted by April 28, 2000.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
NASD Regulation proposes to amend NASD Conduct Rules 2710 (“Corporate Financing Rule”) and 2830 to exempt public offerings by closed-end investment management companies that make periodic tender offers for their securities in compliance with Rule 23c-3(b)
(a) No change.
(b) Filing Requirements.
(1)-(7) No change.
(8) Exempt Offerings.
Notwithstanding the provisions of subparagraph (1) above, the following offerings are exempt from this Rule, Rule 2720, and rule 2810. Documents and information relating to the following offerings need not be filed for review:
(A)-(B) No Change.
(C) securities of [investment companies registered under the Investment Company Act of 1940, as amended, except securities of a management company defined as a “closed-end company” in Section 5(a)(2) of that Act]
(D)-(J) No change.
(9)-(12) No change.
(c)-(d) No change.
(a)-(c) No change.
(d) Sales Charge.
No members shall offer or sell the shares of any open-end investment company,
(1)-(5) No change.
(e)-(i) No change.
(j) Repurchase from Dealer.
No member who is a principal underwriter of a security issued by an open-end [management] investment company
Nothing in this Rule shall prevent any member, whether or not a party to a sales agreement, from selling any such security for the account of a record owner to the underwriter or issuer at the bid price next quoted by or for the issuer and charging the investor a reasonable charge for handling the transaction, provided that such member discloses to such record owner that direct redemption of the security can be accomplished by the record owner without incurring such charges.
(k)-(n) No change.
In its filing with the Commission, NASD Regulation included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASD Regulation has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Corporate Financing Rule regulates the underwriting terms and other arrangements of public offerings of securities. Subparagraph (b)(8)(C) of the Corporate Financing Rule provides that securities of investment companies registered under the 1940 Act
Closed-end funds are subject to the core provisions of the 1940 Act
Certain closed-end funds, commonly known as “interval funds,” have developed a hybrid structure in which they engage in continuous offerings of their securities under Rule 415
In
Consequently, NASD Regulation proposes to amend the Corporate Financing Rule and NASD Conduct Rule 2830 to exempt interval funds from the filing requirements, filing fees, and
NASD Regulation believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
NASD Regulation does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
NASD
Within 35 days of the date of publication of this notice in the
a. By order approve such proposed rule change, or
b. Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the NASD. All submissions should refer to file number SR-NASD-99-74 and should be submitted by April 28, 2000.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
NASD Regulation is proposing to amend Rules 10335 and 10205(h) of the
[The current text of Rule 10335 is deleted in its entirety.]
(a)
(1)
(2)
(3)
(4)
(b)
(1)
(2)
(3)
(A)
(B)
(C)
(D)
(4)
(5)
(6)
(A)
(B)
(C)
(c)
(1)
(2)
(d)
(h) [In each industry dispute of clearing controversy which is required to be submitted to arbitration before the Association as set forth in Rule 10201, above, where interim injunctive relief is requested or where a court has issued a temporary injunction and a party requests expedited proceedings, a total non-refundable surcharge of $2,500 shall be paid by the party or parties requesting the expedited proceedings as provided by Rule 10335. For purposes of this Rule, where expedited proceedings are mandated by Rule 10335(g), the party that sought and was granted injunctive relief by a court shall be deemed a party requesting expedited proceedings. These surcharges shall be in addition to all other non-refundable filing fees, hearing deposits, or costs which may be required. The arbitrator may determine that a party shall reimburse another party for any non-refundable surcharge it has paid.]
In its filing with the Commission, NASD Regulation included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASD Regulation has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
Rule 10335, the NASD's pilot injunctive relief rule, allows interim injunctive relief to be obtained in controversies involving member firms and associated persons in arbitration. The rule has primarily been used in “raiding cases,” or cases involving the transfer of an employee to another firm. Rule 10335 took effect on January 3, 1996 for a one-year pilot period. The Commission has periodically extended the initial pilot period in order to permit NASD Regulation's Office of Dispute Resolution to assess the effectiveness of the rule. The pilot rule is currently due to expire on January 5, 2001.
In November 1997, the NASD published Notice to Members 97-59, which sought comment on how the injunctive relief and expedited proceedings work and how they could be improved, and identified more than twenty specific questions based on previous comments received from users of the rule. Based on comments received in response to Notice to Members 97-59, the NASD filed a rule to amend Rule 10335 and to make it a permanent part of the Code (SR-NASD-98-49) in July 1998. The NASD filed amendments and responses to comments received by the Commission regarding the rule filing in December 1998.
In response to additional formal and informal comments received after the amendments and responses to comments were filed, the Injunctive Relief Rule Subcommittee of NASD Regulation's Inc's National Arbitration and Mediation Committee (“NAMC”) undertook to reconsider every aspect of the proposed rule change. In addition to its NAMC members, the Subcommittee included representatives from member firms that has expressed an interest in the rule, including all of the retail firms that commented negatively on the prior rule filing.
After lengthy deliberation and careful compromise, the Subcommittee recommended withdrawing the previous rule filing and replacing it with the proposed amendments summarized below. The NAMC approved the proposed amendments at its September 1999 meeting. The proposed amendments were then approved by the Small Firm Advisory Board and the Board of Directors of NASD Regulations in December 1999.
Rule 10335 currently provides, among other things, that:
• Parties may seek temporary injunctive relief either in court or in arbitration.
• Parties who seek temporary injunctive relief in court must simultaneously submit the claim to arbitration for permanent relief.
• Parties may obtain interim injunctive relief in arbitration rather than in court in the form of either an Immediate Injunctive Order or a Regular Injunctive Order.
• Permanent injunctive relief may be obtained in arbitration as part of the final relief sought by a party in connection with a claim.
• Applications for interim injunctive relief are expedited.
• Where a court grants interim injunctive relief to one of the parties, arbitration proceedings on the dispute must be expedited.
The NASD continues to believe that it is important that parties be able to obtain immediate temporary injunctive
The most significant aspect of the proposed rule change is that it would eliminate the option of seeking temporary injunctive relief in arbitration. Under the current rule, parties may seek either an Immediate Injunctive Order or a Regular Injunctive Order in arbitration, which are roughly parallel to temporary restraining orders and preliminary injunctions available in court. The rule does not currently impose any time limits on the orders issued, and does not specify what standard should be applied in deciding applications for injunctive relief. Users of the pilot rule have complained that the terminology is confusing, that the lack of standards has created uncertainty, and that the lack of time limits permits parties who obtain relief to pressure the enjoined party to settle by delaying the hearing on the merits. In addition, experience with the rule has shown that, although temporary injunctive relief is available in arbitration on an expedited basis, it is still not possible to obtain such injunctive relief in arbitration as quickly as in court, due largely to the need to appoint and convene arbitrators specifically for each case.
Under the proposed amendments, parties would still be able to seek temporary injunctive relief in a court of competitive jurisdiction. The rule would continue to require parties seeking such relief to simultaneously file a Statement of Claim in arbitration requesting permanent relief regarding the same dispute. This requirement reflects the intent of the rule to provide parties with an ability to seek immediate relief, but to ensure that the underlying disputes remain subject to arbitration.
One question that has arisen in the application of the pilot rule is whether parties can seek temporary injunctive relief in court even if a Statement of Claim has already been filed in arbitration regarding the underlying dispute. Under the proposed amendments, parties to a pending arbitration would be able to seek a temporary injunctive order in court even if another party has already filed a claim arising from the same dispute in arbitration, provided that an arbitration hearing on a request for permanent injunctive relief had not yet commenced.
Under the proposed amendments, if a court issues a temporary injunctive order, the hearing on the request for permanent relief must commence within 15 days of the date the court issued its order. The hearing on the request for permanent injunctive relief would be heard by a panel of three arbitrators. In cases in which the underlying dispute would be heard by a panel of non-public arbitrators as defined in Rule 10308(a)(4), the three arbitrators would be non-public. In cases in which the underlying dispute would be heard by a public arbitrator or panel consisting of a majority of public arbitrators under Rule 10202, the panel hearing the request for permanent relief would consist of a majority of public arbitrators as defined in Rule 10308(a)(5).
In cases in which all of the members of the arbitration panel are non-public, the Director of Arbitration would generate and provide to the parties a list of seven arbitrators from a national roster of arbitrators, at least a majority of whom would be lawyers specializing in injunctive relief. Each party would be able to exercise one strike to the arbitrators on the list.
In cases in which the panel of arbitrators consists of a majority of public arbitrators, the Director of Arbitration would generate and provide to the parties a list of nine arbitrators from a national roster of arbitrators. At least a majority of the arbitrators in those cases would be (1) public arbitrators and (2) lawyers specializing in injunctive relief. In those cases, the parties would be able to exercise two strikes to the arbitrators on the list. Regardless of the number of strikes given to the parties, the rule would incorporate by reference other Code of Arbitration rules providing unlimited strikes for cause, so that parties would always be able to strike arbitrators who were unqualified due to conflicts of interest or for other reasons.
Under the proposed amendments, the parties would be required to inform the Director of their preference of chairperson of the arbitration panel by the close of business on the next business day after receiving notice of the panel members. If the parties did not agree on a chairperson within that time, the Director would select the chairperson. In cases in which the panel consists of a majority of public arbitrators, the chairperson would be one of the public arbitrators who is a lawyer specializing in injunctive relief. In cases in which the panel consists of non-public arbitrators, the chairperson would be a lawyer specializing in injunctive relief. Whenever possible, the Director would select as chairperson the lawyer specializing in injunctive relief whom the parties have ranked the highest. The rule would also provide that the Director of Arbitration may exercise discretionary authority and make any decision that is consistent with the purposes of the rule and the arbitrator selection rule (Rule 10308) to facilitate the appointment of arbitration panels and the selection of the chairperson.
The timing of the hearing, the composition of the panel and the selection of the chairperson are the result of a carefully crafted compromise that is intended to balance the need to ensure fairness for all parties with the need to commence the arbitration process as quickly as possible.
The proposed rule would provide that the decision to grant or deny a request for permanent injunctive relief would be governed by an enforceable choice of law agreement between the parties, or, if there were no such agreement, then by the law of the state where the events upon which the request is based occurred.
One of the most difficult aspects of integrating court-ordered injunctive relief with arbitration of the underlying claims in the same dispute is the treatment of a pending court order in effect at the commencement of the hearing on the request for permanent relief. This becomes a potentially important issue in the event that the pending court order conflicts with the decision of the panel, because conflicting orders from a court and the arbitration panel could place parties in the position of either having to be in contempt of a pending court order or violation of an arbitration order.
NASD Regulation does not believe that arbitration panels have the authority to dissolve, modify or supersede a court order. However, arbitrators do have the authority to
Expediting the hearing on the request for permanent relief and providing arbitrators who meet the special requirements of Rule 10335 may involve additional costs and expenses. For example, in order to appoint the required number of qualified arbitrators in the short time frame provided by the rule, it may be necessary to use arbitrators from cities other than the site of the hearing. Because expedition of the hearing on the request for permanent relief is in the interest of all parties, particularly the party against whom a court-ordered temporary restraining order has been entered, the proposed amendments provide that the parties would jointly bear the travel-related costs and expenses of the arbitrators appointed to hear the request for permanent injunctive relief. To ensure that these additional expenses are borne equally by the parties, the rule would prohibit the arbitrators from reallocating arbitrator travel costs and expenses among the parties.
Similarly, the rule provides that, notwithstanding any other provision in the Code, the chairperson of the panel hearing a request for permanent injunctive relief pursuant to this rule shall receive an honorarium of $375 for each single session, and $700 for each double session, of the hearing. Each other member of the panel shall receive an honorarium of $300 for each single session, and $600 for each double session, of the hearing. The NASD believes that these additional amounts are necessary to ensure that a sufficient number of qualified arbitrators are available to participate in such hearings in the short time frame provided by the rule. Again, because both parties benefit from the expedition of the hearing on the request for permanent relief, the NASD believes that it is equitable that the parties share the difference between these amounts and the amounts panel members and the chairperson would otherwise receive under the Code. As in the case of additional travel costs and expenses, the rule ensure this balance by prohibiting arbitrators from reallocating these amounts among the parties.
Finally, the rule also provides that the party seeking injunctive relief shall pay the expedited hearing fees pursuant to Rule 10205(h), or, where both sides seek such relief, both parties shall pay such fees. In either event, the rule specifically provides that the arbitrators shall have the authority to allocate such fees among the parties. The rule has no effect on the obligations of parties to pay, or on the authority of arbitrators to allocate, any other hearing fees required under the Code.
The hearing on the request for permanent relief is intended to address only the question of injunctive relief. It is not intended to address other forms of relief, such as damages, which do not need to be heard on an expedited basis. The rule provides that if, upon completion of the hearing on the request for permanent relief, a subsequent hearing on other forms of relief is necessary, the panel shall set the date for the subsequent hearing. This would provide parties the opportunity to develop a more complete record than might be possible within the constraints of the expedited injunctive relief hearing. Any subsequent hearing would be before the same panel that heard the request for permanent injunctive relief, and would include, but would not be limited to, the record developed at the earlier hearing. The rule would also provides that the parties would jointly bear the travel-related costs and expenses of the arbitrators resulting from any subsequent hearings on damages or other relief, and prohibits the arbitrators from reallocating those costs and expenses among the parties.
Rule 10205(h), Schedule of Fees in Industry and Clearing Controversies, currently provides that when temporary injunctive relief is sought in arbitrators or in court, a non-refundable surcharge of $2,500 shall be paid by the party or parties requesting the expedited proceedings as provided in Rule 10335. To harmonize Rule 10205(h) with the proposed amendments to Rule 10335, the proposed rule change would also amend Rule 10205(h) to eliminate reference to the availability of temporary injunctive relief in arbitration, and to clarify the application of the provision of temporary injunctive orders sought in court.
NASD Regulation believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, which requires, among other things, that the Association's rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The NASD believes that it is in the best interest of investors and the parties involved in intra-industry disputes to provide for fast and efficient resolution of requests for temporary injunctive relief, and to provide clear and simple rules governing the integration of court-ordered relief with the arbitrator of the underlying disputes.
NASD Regulation does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
No written comments were solicited or received with respect to the proposed rule change.
Within 35 days of the date of publication of this notice in the
(A) by order approve such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and
Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the NASD. All submissions should refer to File No. SR-NASD-00-02 and should be submitted April 28, 2000.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Section 802 of its
The Exchange would normally give consideration to delisting a security of either a domestic or non-U.S. issuer when:
If a company falls below any of the following criteria, it is subject to the procedures outlined in Paras. 802.02 and 802.03:
• Total global market capitalization is less than $50,000,000 and total stockholders' equity
• Average global market capitalization over a consecutive 30 trading-day period is less than $15,000,000; or
• For companies that qualify under the “global market capitalization” standard:
• Total global market capitalization is less than $500,000,000 and total revenues are less than $50,000,000 over the last 12 months (unless the resultant entity qualifies as an original listing under one of the other standards) (C)
OR
• Average global market capitalization over a consecutive 30 trading-day period is less than $100,000,000.
If any of the following factors apply to a listed company, the Exchange may in its sole discretion subject the company to the procedures outlined in Paras. 802.02 and 802.03:
An intent to file under any of the sections of the bankruptcy law has been announced or a filing has been made or liquidation has been authorized and the company is committed to proceed. If a company files or announces an intent to file for reorganization relief under the bankruptcy laws (or an equivalent foreign law), the Exchange may exercise its discretion to continue the listing and trading of the securities of the company. However, if a company that is below any continued listing standard enumerated in Para. 802.10B above (which may be determined on the basis of price indications) files or announces an intent to file for relief under any provisions of any bankruptcy laws, it is subject to immediate suspension and delisting. Similarly, if a company that files or announces an intent to file for relief under any provisions of any bankruptcy laws subsequently falls below any continued listing standard enumerated in Para. 802.10B above (which may be determined on the basis of price indications), it is subject to immediate suspension and delisting.
The aim of the New York Stock Exchange is to provide the foremost auction market for securities of well-established companies in which there is a broad public interest and ownership.
4.
5.
6.
• Total global market capitalization is less than $500,000,000 and total revenues are less than $50,000,000 over the past 12 months. A company that is determined to be below this continued listing criteria must re-establish both its market capitalization and its revenues to be considered in conformity with continued listing standards pursuant to [Paras. 802.02 and 802.03]
OR
• Average global market capitalization over a consecutive 30 trading-day period is less than $100,000,000.
Bankruptcy and/or Liquidation.—An intent to file under any of the sections of the bankruptcy law has been announced or a filing has been made or that liquidation has been authorized and the company is committed to proceed. If a company files or announces an intent to file for reorganization relief under the bankruptcy laws (or an equivalent foreign law), the Exchange may exercise its discretion to continue the listing and trading of the securities of the company. However, if a company that is below any continued listing standard enumerated in sections 4-6, above (which may be determined on the basis of price indications) files or announces an intent to file for relief under any provisions of any bankruptcy laws, it is subject to immediate suspension and delisting. Similarly, if a company that files or announces an intent to file for relief under any provisions of any bankruptcy laws subsequently falls below any continued listing standard enumerated in sections 4-6 above (which may be determined on the basis of price indications), it is subject to immediate suspension and delisting.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The purpose of this proposed rule change is to modify several of the Exchange's existing continued listing criteria. The Exchange recently revised its continued listing standards,
Two of the new standards focus on the issuer's market capitalization. During the implementation of these new standards, several issues have arisen as to whether securities other than traditional equity instruments are intended to be included in the definition of the term “market capitalization.”
The Exchange evaluated the comments and suggestions put forth by many issuers and discussed the issue with several outside consultants. As a result of this process, the Exchange proposes to specify that for purposes of its continued listing standards, the term “market capitalization” will encompass all common stock outstanding, whether publicly traded or not, so long as the Exchange is able to accurately attribute a value to it
In addition, the Exchange believes that it is appropriate to provide its staff with the discretion to evaluate the capital structure of the issuer and include common stock that would be issued upon conversion of an instrument that constitutes the issuer's capital. Traditional debt, related to financing activities, will be excluded. Similar to the procedure discussed above, but for convertible publicly-traded securities other than common stock, the applicable price will be the closing price of the common stock into which it is convertible from the previous trading day. For example, if a convertible preferred security trades at $15 and the common stock into which it is convertible trades at $10, the price utilized would be the closing price of the common stock on the previous day (not the higher price of the preferred security) and the market capitalization would be computed on an as-converted basis.
Finally, if the issuer has outstanding privately-held securities, the calculation would be made as described above for convertible securities based upon the previous day's closing price of the publicly-traded security. Thus, a privately held Class B common stock convertible into the publicly-traded Class A would be valued at the price of the Class A. Likewise, a privately-held preferred Series A convertible into the publicly-traded Class A would be valued at the price of the Class A on an as-converted basis.
The Exchange notes that it will also review any applicable conversion restrictions when conducting its market capitalization analysis and factor any such restrictions into the computations as appropriate.
Partnerships raise a unique set of issues that need to be incorporated into Exchange rules. Again, after consulting with various individuals, the Exchange proposes to create an additional provision in the market capitalization definition. The provision would enable the Exchange to evaluate the formation of the current capital structure of the partnership and, where appropriate, to include other publicly-traded securities in the calculation as a substantial equivalent to common stock.
Furthermore, the Exchange proposes to amend the stockholders' equity test to clarify that both general and limited partners' capital is the measure for the applicable calculation. The Exchange believes that this clarification is necessary because the concept of “shareholders' equity” is not applicable to partnerships. Instead, the notion of capital captures the appropriate analogous concept with respect to partnerships.
The Exchange's intent in codifying the concept of analyzing the creation of the current capital structure stems primarily from the recent expiration of an IRS grandfather provision that resulted in numerous recapitalizations of partnerships. The Exchange believes it is not equitable to penalize these partnerships for restructuring in order to prevent, among other things, double taxation. Thus, for instance, if a holder of $50 of partnership units prior to the conversion were to receive $25 in partnership units and $25 in debt, the “market value” of the holdings has not changed and should be calculated at $50 for purposes of determining the continued listing status of the company. Consistent with the principles articulated above, the Exchange would require that the non-equity instrument be publicly traded so as to assure the ability to value the instrument.
The recently approved language that addresses companies that have filed or that have announced an intent to file for bankruptcy, and that are also below the Exchange's financial continued listing criteria, requires the Exchange to subject such a company to “immediate suspension and delisting.” There are instances, however, where the Exchange has found that such a company should be afforded the opportunity to submit a financial plan for evaluation. For instance, a company that is profitable (or that has a positive cash flow), or is demonstrably in sound financial health despite the bankruptcy proceedings, should not be delisted if it can demonstrate that, within 18 months, it will be in compliance with the Exchange's financial criteria. In response to these circumstances, the Exchange proposes to amend this provision to create the authority to analyze the financial status of these companies on a case-by-case basis. However, if a company has previously filed an Exchange-approved plan to meet the Exchange's continued listing standards within 18 months, application of this provision to the company does not restart the 18-month clock. Thus, for instance, a company that declares bankruptcy midstream through an Exchange-approved plan would still only have the remainder of the plan period to come into compliance. It would not be afforded an additional 18 months, but would incorporate the projected effect of the bankruptcy into its Plan and resubmit it for consideration.
The Exchange believes the basis under the Act for the proposed rule change is the requirement under Section 6(b)(5)
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has neither solicited nor received any written comments with respect to the proposed rule change.
Within 35 days of the date of publication of this notice in the
A. By order approve the proposed rule change, or
B. Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. § 552, will be available for inspection and copying at the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to File No. SR-NYSE-99-50 and should be submitted by April 28, 2000.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Paragraph 902.02 of the Exchange's Listed Company Manual (the “Manual”). Paragraph 902.02 of the Manual contains the schedule of current listing fees for companies listing securities on the Exchange. The text of the proposed rule change is as follows. New text is
A special charge of $36.800 in addition to initial fees (described below) is payable in connection with the original listing of a company's stock.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth Sections A, B, and C below, of the most significant aspects of such statements.
The proposed rule change amends the listed company fee schedule, set forth in Paragraph 902.02 of the Manual, as it applies to original listing fees. The Exchange seeks to adopt a $150,000 minimum original listing fee for each domestic new issuer (excluding closed-end funds). This minimum would include the existing special charge of $36,800.
By establishing this minimum fee, the Exchange is proposing to set a base fee that issuers (other than funds) will pay to the Exchange regardless of the number of shares listed by a particular company at the time of the original listing.
The Exchange believes that the proposed rule change is consistent with the requirement under Section 6(b)(4) of the Act
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has neither solicited nor received written comments on the proposed rule change, as amended.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street NW, Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the NYSE. All submissions should refer to File No. SR-NYSE-00-10 and should be submitted by April 28, 2000.
The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange,
The NYSE has requested that the Commission find good cause for approving the proposed rule change, as amended, prior to the thirtieth day after the date of publication of notice in the
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend Rule 237, “The Universal Trading System Morning Session,”
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The VTS provides a morning matching session for the execution of large-sized orders at the volume weighted average price (“VWAP”). The receipt and matching of these orders is handled electronically through the VTS. Non-member users may enter into the system so long as they have the appropriate give-up arrangements with a Stock Clearing Corporation of Philadelphia (“SCCP”) member, who must also be a Phlx member who has assumed responsibility for that order.
Thus, the Exchange proposes to implement the Feature, which provides an automated means for SCCP/Phlx members to impose credit limits on their customers' use of the system. SCCP/Phlx members, through the Feature, may impose credit limits: (i) On an identified clearing customer, (ii) On an identified account, or (iii) On an identified clearing customer's use of an identified account. The Feature permits clearing firms to set credit limits to limit different order types such as buys, sells, short sales, internal crosses and two-sided commitments. The member will specify the appropriate credit limits or changes to credit limits to the authorized enrollment personnel on a form prescribed by the Exchange, prior to implementation of the Feature for that customer. Once engaged, the Feature precludes any daily commitments and incoming orders of clearing customers that would exceed established credit limits from entering into VTS. Consistent with current practice, in determining whether the credit limit has been reached, valuation of commitments and orders would be based on the previous day's closing prices. Similarly, the Feature also permits members to apply their customers' unsettled trades from previous day[s] match session[s] against such customers' credit limits.
The Exchange believes that this proposed system change should assist members in ensuring that agreed upon credit limits are enforced, and thereby reduce the burden on clearing firms to verify and enforce customer credit limits. In addition, the proposed feature should ensure that such customers are complying with agreed upon credit limits.
The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act in that it is designed to promote just and equitable principles of trade, prevent fraudulent and manipulative acts and practices and protect investors and the public interest by installing a Credit Limit Feature to ensure that VTS users and committers abide by the credit limit agreed upon with their clearing firms.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has neither solicited nor received written comments on the proposed rule change.
The foregoing rule change has become effective immediately under Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest or for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those they may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying at the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange.
All submissions should refer to File No. SR-PHLX-00-22 and should be submitted by April 28, 2000.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
In compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, SSA is providing notice of its information collections that require submission to the Office of Management and Budget (OMB). SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility and clarity; and on ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology.
I. The information collections listed below will be submitted to OMB within 60 days from the date of this notice. Therefore, comments and recommendations regarding the information collections would be most useful if received by the Agency within 60 days from the date of this publication. Comments should be directed to the SSA Reports Clearance Officer at the address listed at the end of this publication. You can obtain a copy of the collection instruments by calling the SSA Reports Clearance Officer on (410) 965-4145, or by writing to him at the address listed at the end of this publication.
1. Request for Reconsideration-0960-NEW. The information collected on Form SSA-561 is used by the Social Security Administration (SSA) to document and initiate the reconsideration process for determining entitlement to Social Security benefits under (title II), Supplemental Security Income payments (title XVI), Special Veterans Benefits (title VIII) and Medicare benefits (title XVIII). The respondents are individuals filing for such reconsideration.
2. Disability Hearing Officer's Decision—Title XVI Disabled Child Continuing Disability Review—0960-NEW. The information collected on form SSA-1209 will be used by State Disability Hearing Officers (DHO) to formalize disability decisions. The form will aid the DHO in addressing the crucial elements of the case in a sequential and logical fashion. The form is used as the official determination of the DHO's decision and the personalized portion of the notice to the claimant.
II. The information collections listed below have been submitted to OMB for clearance. Written comments and recommendations on the information collections would be most useful if received within 30 days from the date of this publication. Comments should be directed to the SSA Reports Clearance Officer and the OMB Desk Officer at the addresses listed at the end of this publication. You can obtain a copy of the OMB clearance packages by calling the SSA Reports Clearance Officer on (410) 965-4145, or by writing to him.
1. Claimant's Medications-0960-0289. SSA uses Form HA-4632 to request that applicants for disability benefits provide information to facilitate processing their title II, Old-Age, Survivors and Disability Insurance (OASDI) and Title XVI, Supplemental Security Income (SSI) claims. The form elicits from the claimants an updated list of medications used by the claimants. It enables the Administrative Law Judge hearing the case to fully inquire into medical treatment the claimant is receiving and the effect of medications on the claimant's medical impairments. The respondents are applicants for OASDI and SSI benefits.
2. Statement of Employer-0960-0030. The information collected on Form SSA-7011 is needed by SSA to substantiate allegations of wages paid to workers when those wages do not appear in SSA's records of earnings and the worker does not have proof that payment was made. This information is used to process claims for social security benefits and to resolve discrepancies in earnings records. The respondents are certain employers who can verify allegations of wages made by the wage earner.
3. Request for SSI Benefit Estimate-0960-0492. SSA uses Form SSA-3716 for an SSI beneficiary who wishes to request a 5-month estimate of what their benefits would be if they should return to work in the future. The respondents are SSI recipients.
Office of the United States Trade Representative (USTR).
Notice of Change in Schedule of Hearings and Deadline for Submitting Comments on Petitions for the GSP 1999 Country Practices Review.
Notice is hereby given of a change in the date, and a change in the date for submission of comments, for the GSP Public Hearings to be held for country practice petitions accepted for review in the GSP 1999 Country Practices Review. These hearings were scheduled for April 3 and April 4, 2000, and then rescheduled for April 13 and April 14, beginning at 10:00 a.m. A
The scheduled dates for the GSP Public Hearings are changed from April 3 and April 4, 2000, and again from April 13 and April 14, to May 12. There is only one day of hearings. The location
All other information in the notice at 65 FR 7410 (February 14, 2000) remains the same.
GSP Subcommittee, Office of the United States Trade Representative, 600 17th Street, NW, Room 518, Washington, DC 20508 (Tel. 202/395-6971).
Federal Transit Administration (FTA), Federal Highway Administration (FHWA), DOT.
Notice of request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the intention of the FTA and FHWA to request the Office of Management and Budget (OMB) to extend the following currently approved information collection: Metropolitan and Statewide Transportation Planning.
Comments must be submitted before June 6, 2000.
All written comments must refer to the docket number that appears at the top of this document and be submitted to the United States Department of Transportation, Central Dockets Office, PL-401, 400 Seventh Street, SW, Washington, DC 20590. All comments received will be available for examination at the above address from 10:00 a.m. to 5:00 p.m., e.t., Monday through Friday, except federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard/envelope.
Mr. Robert Stout, FTA, (202) 366-1628 or Mr. Sheldon Edner, FHWA, (202) 366-4066.
Interested parties are invited to send comments regarding any aspect of this information collection, including: (1) The necessity and utility of the information collection for the proper performance of the functions of the FTA and the FHWA; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the collected information; and (4) ways to minimize the collection burden without reducing the quality of the collected information. Comments submitted in response to this notice will be summarized and/or included in the request for OMB reinstatement of this information collection.
In addition to serving as a management tool for MPOs and State DOTs, the UPWP is used by both FTA and FHWA to oversee the expenditure of federal transportation planning funds and to monitor the transportation planning activities of those agencies. It is also needed to develop policy on using funds, monitor State and local compliance with national technical emphasis areas, respond to congressional inquiries, prepare congressional testimony, and ensure efficiency in the use and expenditure of federal funds by determining that planning proposals are both reasonable and cost-effective. 49 U.S.C. Section 5304 and 23 U.S.C. 134(h) require the development of TIPs for urbanized areas; STIPS are mandated by 23 U.S.C. 135(f). After approval by the Governor and MPO, metropolitan TIPs in air quality attainment areas are to be incorporated directly into the STIP. For nonattainment areas, FTA/FHWA must make a conformity finding on the TIPs before including them into the STIP. The complete STIP is then jointly reviewed and approved or disapproved by FTA and FHWA. These conformity findings and approval actions constitute the determination that States are complying with the requirements of 23 U.S.C.135 and 49 U.S.C. Section 5303 as a condition of eligibility for federal-aid funding. Without these documents, approvals and findings, capital and/or operating assistance, cannot be provided.
Federal Railroad Administration, DOT.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before May 8, 2000.
Mr. Robert Brogan, Office of Planning and Evaluation Division, RRS-21, Federal Railroad Administration, 1120 Vermont Ave., NW, Mail Stop 17, Washington, DC 20590 (telephone: (202) 493-6292), or Dian Deal, Office of Information Technology and Productivity Improvement, RAD-20, Federal Railroad Administration, 1120 Vermont Ave., NW, Mail Stop 35, Washington, DC 20590 (telephone: (202) 493-6133). (These telephone numbers are not toll-free.)
The Paperwork Reduction Act of 1995 (PRA), Pub. L. 104-13, § 2, 109 Stat. 163 (1995) (codified as revised at 44 U.S.C. 3501-3520), and its implementing regulations, 5 CFR part 1320, require Federal agencies to issue two notices seeking public comment on information collection activities before OMB may
Before OMB decides whether to approve these proposed collections of information, it must provide 30 days for public comment. 44 U.S.C. 3507(b); 5 CFR 1320.12(d). Federal law requires OMB to approve or disapprove paperwork packages between 30 and 60 days after the 30 day notice is published. 44 U.S.C. 3507(b)-(c); 5 CFR 1320.12(d); see also 60 FR 44978, 44983, Aug. 29, 1995. OMB believes that the 30 day notice informs the regulated community to file relevant comments and affords the agency adequate time to digest public comments before it renders a decision. 60 FR 44983, Aug. 29, 1995. Therefore respondents should submit their respective comments to OMB within 30 days of publication to best ensure having their full effect. 5 CFR 1320.12(c); see also 60 FR 44983, Aug. 29, 1995.
The summaries below describe the nature of the information collection requirements (ICRs) and the expected burden. The revised requirements are being submitted for clearance by OMB as required by the PRA.
A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this notice in the
44 U.S.C. 3501-3520.
Research and Special Programs Administration (RSPA), DOT.
Public notice and invitation to comment.
Interested parties are invited to submit comments on an application by the Institute of Makers of Explosives (IME) for an administrative determination whether Federal hazardous materials transportation law preempts New Jersey law and regulations prohibiting the transportation of blasting caps on the same motor vehicle with more than 5,000 pounds of other commercial explosives.
Comments received on or before May 22, 2000, and rebuttal comments received on or before July 6, 2000 will be considered before issuance of an administrative ruling on IME's application. Rebuttal comments may discuss only those issues raised by comments received during the initial comment period and may not discuss new issues.
The application and all comments received may be reviewed in the Dockets Office, U.S. Department of Transportation, Room PL-401, 400 Seventh Street, SW, Washington, DC 20590-0001. The application and all comments are also available on-line through the home page of DOT's Docket Management System, at “http://dms.dot.gov.”
Comments must refer to Docket No. RSPA-00-7126 and may be submitted to the docket either in writing or electronically. Send three copies of each written comment to the Dockets Office at the above address. If you wish to receive confirmation of receipt of your written comments, include a self-addressed, stamped postcard. To submit comments electronically, log onto the Docket Management System website at http://dms.dot.gov, and click on “Help & Information” to obtain instructions.
A copy of each comment must also be sent to:
A certification that a copy has been sent to these persons must also be included with the comment. (The following format is suggested: “I certify that copies of this comment have been sent to Ms. Hilton and Mr. Cohen at the addresses specified in the
A list and subject matter index of hazardous materials preemption cases,
Frazer C. Hilder, Office of the Chief Counsel, Research and Special Programs Administration, U.S. Department of Transportation, Washington, DC 20590-0001 (Tel. No. 202-366-4400).
IME has applied for a determination that Federal hazardous material transportation law, 49 U.S.C. 5125
According to IME's application, New Jersey's Explosives Act, as codified in N.J.S.A. 21:1A-128
Blasting caps or electric blasting caps, or both, may be transported in the same vehicle with other commercial explosives only when the net weight of the other commercial explosives does not exceed 5,000 pounds.
Blasting caps or electric blasting caps, or both, may be transported in the same vehicle with other commercial explosives only when the net weight of the other commercial explosives does not exceed 5,000 pounds.
IME asserts that these statutory and regulatory restrictions are preempted because they concern the “handling” of a hazardous material and are not substantively the same as the Hazardous Materials Regulations (HMR), 49 CFR Parts 171-180.
No detonator assembly or booster with detonator may be transported on the same motor vehicle with any Division 1.1, 1.2 or 1.3 (Class A or Class B explosive) material (except other detonator assemblies, boosters with detonators or detonators), explosives for blasting or detonating cord Division 1.4 (Class C explosive) material. No detonator may be transported on the same motor vehicle with any Division 1.1, 1.2 or 1.3 (Class A or Class B explosive) material (except other detonators, detonator assemblies or boosters with detonators), explosives for blasting or detonating cord Division 1.4 (Class C explosive) material unless—
(1) It is packed in a specification MC 201 (§ 178.318 of this subchapter) container, or
(2) The package conforms with requirements prescribed in § 173.63 of this subchapter, and its use is restricted to instances when—
(i) There is no Division 1.1, 1.2, or 1.3 (Class A or Class B explosive) material or blasting agent loaded on the motor vehicle; and
(ii) A separation of 61 cm (24 inches) is maintained between each package of detonators and each package of detonating cord; or
3. It is packed and loaded in accordance with a method approved by the Department [of Transportation]. One method approved by the Department is as follows:
(i) The detonators are in packagings as prescribed in § 173.63 of this subchapter which in turn are loaded into suitable containers or separate compartments. Both the detonators and the container or compartment must meet the requirements of the Institute of Makers of Explosives' Standard (IME Safety Library Publication No. 22).
IME also contends that these New Jersey statutory and regulatory restrictions are preempted because they are an obstacle to the accomplishing and carrying out the Federal hazardous material transportation law and the HMR. IME states that a person using both blasting caps and more than 5,000 pounds of other commercial explosives at a site within New Jersey must either: (1) Use separate vehicles to transport the blasting caps and the other commercial explosives, from the origin of the transportation to the job site; or (2) at some point before leaving the public highway at the job site, transfer either the blasting caps or the other commercial explosives to a separate vehicle.
IME submitted three affidavits with its application. Each of the affiants stated that his company uses two separate vehicles to transport detonators and other explosives to meet New Jersey's requirements. The President of Maurer & Scott, Inc., an explosives service and transportation company, testified that the use of separate vehicles to transport detonators and explosives
He also stated that the New Jersey Department of Labor has denied his company's requests for a waiver from the prohibition against transporting blasting caps on the same vehicle with more than 5,000 pounds of other commercial explosives.
IME argues that requiring separate vehicles for detonators and other commercial explosives exposes the public to greater overall risk, presumably both within and outside of New Jersey, because “the more trucks on the road, irrespective of the cargo, the higher likelihood of an accident.” IME states that transferring either the detonators or the other explosives to a second vehicle, before leaving the public highway at the job site, also involves “unnecessary truck traffic” and creates “the added risk from the unnecessary handling during loading or reloading.” IME notes that, in 49 CFR 177.835(j), the HMR specifically prohibit the transfer of any Division 1.1, 1.2 or 1.3 (Class A or B explosive) material
IME also states that it is unaware of any other State that imposes the same restrictions as New Jersey on the transportation of blasting caps with other commercial explosives. IME has not indicated whether New Jersey's restrictions cause shipments of blasting caps and other explosives to be routed around the State of New Jersey, rather than on highways through the State.
The text of IME's application and a list of the exhibits to the application are set forth in Appendix A to this notice. A paper copy of the exhibits to IME's application will be provided at no cost upon request to the individual named in
Section 5125 of Title 49 U.S.C. contains several preemption provisions that are relevant to IME's application. Subsection (a) provides that—in the absence of a waiver of preemption by DOT under § 5125(e) or specific authority in another Federal law—a requirement of a State, political subdivision of a State, or Indian tribe is preempted if
(1) complying with a requirement of the State, political subdivision or tribe and a requirement of this chapter or a regulation issued under this chapter is not possible; or
(2) the requirement of the State, political subdivision, or Indian tribe, as applied or enforced, is an obstacle to the accomplishing and carrying out this chapter or a regulation prescribed under this chapter.
Subsection (b)(1) of 49 U.S.C. 5125 provides that a non-Federal requirement concerning any of the following subjects, that is not “substantively the same as” a provision of Federal hazardous material transportation law or a regulation prescribed under that law, is preempted unless it is authorized by another Federal law or DOT grants a waiver of preemption:
(A) the designation, description, and classification of hazardous material.
(B) the packing, repacking, handling, labeling, marking, and placarding of hazardous material.
(C) the preparation, execution, and use of shipping documents related to hazardous material and requirements related to the number, contents, and placement of those documents.
(D) the written notification, recording, and reporting of the unintentional release in transportation of hazardous material.
(E) the design, manufacturing, fabricating, marking, maintenance, reconditioning, repairing, or testing of a packaging or a container represented, marked, certified, or sold as qualified for use in transporting hazardous material.
Subsection (c)(1) of 49 U.S.C. 5125 provides that, beginning two years after DOT prescribes regulations on standards to be applied by States and Indian tribes in establishing requirements on highway routing of hazardous materials,
These preemption provisions in 49 U.S.C. 5125 carry out Congress' view that a single body of uniform Federal regulations promotes safety in the transportation of hazardous materials. In considering the HMTA, the Senate Commerce Committee “endorse[d] the principle of preemption in order to preclude a multiplicity of State and local regulations and the potential for varying as well as conflicting regulations in the area of hazardous materials transportation.” S. Rep. No. 1102, 93rd Cong. 2nd Sess. 37 (1974). When it amended the HMTA in 1990, Congress specifically found that:
(3) many States and localities have enacted laws and regulations which vary from Federal laws and regulations pertaining to the transportation of hazardous materials, thereby creating the potential for unreasonable hazards in other jurisdictions and confounding shippers and carriers which attempt to comply with multiple and conflicting registration, permitting, routing, notification, and other regulatory requirements,
(4) because of the potential risks to life, property, and the environment posed by unintentional releases of hazardous materials, consistency in laws and regulations governing the transportation of hazardous materials is necessary and desirable,
(5) in order to achieve greater uniformity and to promote the public health, welfare, and safety at all levels, Federal standards for regulating the transportation of hazardous materials in intrastate, interstate, and foreign commerce are necessary and desirable.
Under 49 U.S.C. 5125(d)(1), any directly affected person may apply to the Secretary of Transportation for a determination whether a State, political subdivision or Indian tribe requirement is preempted. The Secretary of Transportation has delegated authority to make determinations of preemption that concern highway routing to the Federal Motor Carrier Safety Administration (FMCSA) and those concerning all other hazardous materials transportation issues to RSPA. 49 CFR 1.53(b) and 1.73(d)(2) (as added October 9, 1999, 64 FR 56720, 56721 [Oct. 19, 1999], and revised January 1, 2000, 65 FR 220, 221 [Jan. 4, 2000]).
Section 5125(d)(1) requires that notice of an application for a preemption determination must be published in the
Preemption determinations do not address issues of preemption arising under the Commerce Clause, the Fifth Amendment or other provisions of the Constitution or under statutes other than the Federal hazardous material transportation law unless it is necessary to do so in order to determine whether a requirement is authorized by another Federal law. A State, local or Indian tribe requirement is not authorized by another Federal law merely because it is not preempted by another Federal statute.
In making preemption determinations under 49 U.S.C. 5125(d), RSPA (and FMCSA) are guided by the principles and policies set forth in Executive Order No. 13132, entitled “Federalism” (64 FR 43255 (August 4, 1999). Section 4(a) of that Executive Order authorizes preemption of State laws only when a statute contains an express preemption provision, there is other clear evidence that Congress intended to preempt State law, or the exercise of State authority directly conflicts with the exercise of Federal authority. Section 5125 contains express preemption previsions, which RSPA (and FMCSA) have implemented through their regulations.
All comments should be limited to the issue whether 49 U.S.C. 5125 preempts N.J.S.A. 221:1A-137.F and N.J.A.C. 12:190-6.5(d). Comments should specifically address the preemption criteria detailed in Part II, above, and set forth in detail the manner
Application of the Institute of Makers of Explosives to initiate a proceeding to determine whether various requirements imposed by the State of New Jersey on the transportation of certain Class 1 materials to, from or through the State are preempted by the Hazardous Materials Transportation Act
The Institute of Makers of Explosives (IME) represents companies that transport by truck Class 1 materials throughout the United States, including points to, from and through the State of New Jersey (State). Despite full compliance with the hazardous materials regulations (HMR), members of the IME are precluded from transporting Class 1 materials in amounts in excess of 5,000 pounds if blasting caps are transported in the same vehicle—a practice allowed by the HMR. The IME asserts that the State requirements contravene the Hazardous Materials Transportation Act (HMTA).
The State's Explosives Act (Statute) provides that “[b]lasting caps or electric blasting caps, or both, may be transported in the same vehicle with other commercial explosives only when the net weight of the other commercial explosives does not exceed 5,000 pounds.”
Up until 1998, this provision of law did not interfere with the transportation of Class 1 materials because implementing regulations did not address this statutory requirement. In 1998, this oversight was corrected. Rules issued by the NJ Department of Labor (NJDL), which oversees the implementation of the Act, were amended to include the statutory restriction.
The IME subsequently contracted the NJDL to advise the NJDL of the possible inconsistency with the HMTA. The NJDL acknowledged our concern, but felt that there was no recourse given the provision in the Statute. In fact, the regulatory version appears to temper the Statute by qualifying that the quantity restriction on Class 1 materials only applies when explosives are being transported “off-highway.”
This application seeks preemption of the following State requirements:
The HMTA was enacted in 1975 to give the U.S. Department of Transportation (DOT) greater authority “to protect the Nation adequately against the risks to life and property which are inherent in the transportation of hazardous materials in commerce.”
In 1990, Congress codified the dual compliance and obstacle tests as the general preemption provision of the HMTA.
“Substantively the same” was defined to mean “conforms in every significant respect to the Federal requirement. Editorial and other similar de minimis, changes are permitted.”
The HMR has been promulgated in accordance with the HMTA's direction that the Secretary of Transportation “issue regulations for the safe transportation of hazardous material in intrastate, interstate, and foreign commerce.”
Our review of federal law and the HMR leads us to believe that the above referenced State requirements, absent further modification and/or clarification, are subject to preemption pursuant to 49 U.S.C. 5125(a)(2) and/or (b)(1)(B). We ask for a determination of preemption based on the authority of 49 U.S.C. 5125(d).
The HMR provides that detonators, including blasting caps, may be transported by motor vehicle in commerce with Division 1.1, 1.2, 1.3, 1.4 or 1.5
The IME knows of no other state that imposes limitations on explosives such as are
In order to comply with the State's quantity limitations, companies have few options. They can load detonators and explosives on separate vehicles or they can reconfigure detonator/explosive shipments to meet the State's restriction. These options present unacceptable safety risks.
In the first case, unnecessary truck traffic, and traffic carrying explosives, is added to the roadways. It has been shown that the more trucks on the road, irrespective of the cargo, the higher likelihood of an accident. The public along these routes of travel, which may include jurisdictions outside of New Jersey, is exposed to this relative increased risk.
In the second case, not only are two or more trucks needed to transport the same quantity of explosives that could efficiently be carried by one truck, but there is the added risk from the unnecessary handling during loading or re-loading to conform explosive/detonator shipments to New Jersey's restrictions. In the case of Division 1.1, 1.2, and 1.3 materials, the risk from this unnecessary handling is shifted to locations outside of the State because the HMR prohibit the transfer of these explosive materials “from one container to another, or from one motor vehicle to another vehicle, or from another vehicle to a motor vehicle, on any public highway, street, or road, except in case of emergency.”
We do not contest the authority of the State to regulate the movement of explosives that is outside of the scope of the HMTA. In short, transportation that is entirely on private property is not transportation in commerce within the meaning of the HMTA and is not covered by the HMR.
No transportation is risk-free. The packaging and handling provisions of the HMR related to explosives are intended to minimize the consequences of an incident if it should occur. The HMR have been incredibly effective in this regard as they apply to the transportation of Class 1 materials. The IME is aware of no fatalities occurring when detonators and explosives are transported and handled as required. Since 1990, there have been 200 incidents involving explosives of which 53 were serious.
While “handling” is not a term defined in the HMTA, RSPA has defined this term to mean “the operation of loading and unloading.”
We believe the State's requirements imposed on the transportation of certain Class 1 materials are preempted by federal law. The State is enforcing the above suspect requirements. Despite efforts to resolve this matter directly with the State, affected parties believe a determination of preemption is the most effective way to address this matter. Consequently, we request timely consideration of the concerns we have raised.
Pursuant to 49 CFR 107.205(a), we hereby certify that a copy of this application has been forwarded with an invitation to submit comments to: Fred Cohen, Legal Liaison, NJ Department of Labor, P.O. Box 110, Trenton, NJ 08625-0110.
Surface Transportation Board.
Notice tentatively approving finance transaction.
In an application filed under 49 U.S.C. 14303, Laidlaw Inc. (Laidlaw), a noncarrier, seeks approval of its continuance in control of The Gray Line of Victoria Ltd. (Gray Line) upon Gray Line's becoming a regulated motor carrier of passengers. Persons wishing to oppose the application must follow the rules under 49 CFR 1182.5 and 1182.8. The Board has tentatively approved the transaction, and, if no opposing comments are timely filed, this notice will be the final Board action.
Comments must be filed by May 22, 2000. Applicant may file a reply by June 6, 2000. If no comments are filed by May 22, 2000, this notice is effective on that date.
Send an original and 10 copies of any comments referring to STB Docket No. MC-F-20964 to: Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 K Street, NW, Washington, DC 20423-0001. In addition, send one copy of comments to applicant's representative: Fritz R. Kahn, Suite 750 West, 1100 New York Avenue, NW, Washington, DC 20005-3934.
Joseph H. Dettmar, (202) 565-1600. [TDD for the hearing impaired: 1-800-877-8339].
Laidlaw controls Gray Line through Laidlaw Transit Ltd. (Laidlaw Ltd.), which is authorized to transport passengers, in charter and special operations, pursuant to authority in No. MC-102189. Gray Line conducts charter and special passenger carrier operations within Canada. Laidlaw seeks authority to continue in control of Gray Line through Laidlaw Ltd. upon Gray Line's becoming a regulated carrier pursuant to an application it has filed with the Federal Highway Administration.
Laidlaw currently controls 23 motor carriers of passengers, including Greyhound Lines, Inc. (Greyhound) (MC-1515), which Laidlaw considers its domestic flagship carrier.
Laidlaw asserts that, because Gray Line is an experienced and well regarded carrier that has established contacts with hotels, tourist attractions, and other institutions, the addition of Gray Line to the Laidlaw family of regulated carriers will contribute significantly to the breadth of services that Greyhound and the other Laidlaw affiliates will be able to provide the public. Laidlaw maintains also that the proposed transaction will inure to the benefit of Gray Line's passengers. This benefit is expected to partly take the form of reasonable fares, in view of the access to the financial resources and expertise of the Laidlaw system that Gray Line will have following the transaction.
Under 49 U.S.C. 14303(b), we must approve and authorize a transaction we find consistent with the public interest, taking into consideration at least: (1) The effect of the transaction on the adequacy of transportation to the public; (2) The total fixed charges that result; and (3) The interest of affected carrier employees.
Applicant has submitted the information required by 49 CFR 1182.2, including information to demonstrate that the proposed transaction is consistent with the public interest under 49 U.S.C. 14303(b). Specifically, applicant has shown that the proposed transaction will have a positive effect on the adequacy of transportation to the public and will result in no increase in fixed charges and no changes in employment.
On the basis of the application, we find that the proposed transaction is consistent with the public interest and should be authorized. If any opposing comments are timely filed, this finding will be deemed vacated, and, unless a final decision can be made on the record as developed, a procedural schedule will be adopted to reconsider the application.
Board decisions and notices are available on our website at “WWW.STB.DOT.GOV.”
This decision will not significantly affect either the quality of the human environment or the conservation of energy resources.
1. The proposed continuance in control is approved and authorized, subject to the filing of opposing comments.
2. If timely opposing comments are filed, the findings made in this decision will be deemed as having been vacated.
3. This decision will be effective on May 22, 2000, unless timely opposing comments are filed.
4. A copy of this notice will be served on: (1) The U.S. Department of Transportation, Federal Motor Carrier Safety Administration—HMCE-20, 400 Virginia Avenue, SW, Suite 600, Washington, DC 20024; (2) The U.S. Department of Justice, Antitrust Division, 10th Street & Pennsylvania Avenue, NW, Washington, DC 20530; and (3) The U.S. Department of Transportation, Office of the General Counsel, 400 7th Street, SW, Washington, DC 20590.
By the Board, Chairman Morgan, Vice Chairman Burkes, and Commissioner Clyburn.
Colorado, Kansas & Pacific Railway Company (CKPR), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31. CKPR has entered into an agreement with the Colorado Department of Transportation (CDOT) whereby CKPR will lease and initiate common carrier operations over an abandoned line of railroad between milepost 747.5, near Towner, and milepost 869.4, near NA Junction, in Kiowa, Crowley, and Pueblo Counties, CO, a distance of approximately 121.9 route miles (rail line). In addition, the agreement grants CKPR the right to purchase the rail line under specified conditions on or before December 31, 2001.
The parties report that they intended to consummate the transaction on or about March 29, 2000. The earliest the transaction could have been consummated was March 29, 2000, 7 days after the exemption was filed.
This transaction is related to STB Finance Docket No. 33856,
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to STB Finance Docket No. 33857, must be filed with the Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 K Street, NW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on John D. Heffner, Esq., 1707 L Street, NW, Suite 570, Washington, DC 20036.
Board decisions and notices are available on our website at “WWW.STB.DOT.GOV.”
By the Board, David M. Konschnik, Director, Office of Proceedings.
Court Hammond and James Sanders
CCRC is a new short line railroad that will become a Class III rail carrier when it consummates the authority granted to it in
The transaction was expected to be consummated on March 29, 2000.
The Hammond Group states that: (i) The railroads will not connect with each other or any railroad in their corporate family; (ii) The continuance in control is not part of a series of anticipated transactions that would connect the railroads with each other or any railroad in their corporate family; and (iii) The transaction does not involve a Class I carrier. Therefore, the transaction is exempt from the prior approval requirements of 49 U.S.C. 11323.
Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Section 11326(c), however, does not provide for labor protection for transactions under sections 11324 and 11325 that involve only Class III rail carriers. Because this transaction involves Class III rail carriers only, the Board, under the statute, may not impose labor protective conditions for this transaction.
If the notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to STB Finance Docket No. 33856, must be filed with the Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC 20423-0001. In addition, a copy of each pleading must be served on John D. Heffner, Esq., Rea, Cross & Auchincloss, 1707 L Street, N.W., Suite 570, Washington, DC 20036.
By the Board, David M. Konschnik, Director, Office of Proceedings.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Pub. L. 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 1040-TeleFile and Form 8855-V, TeleFile Payment Voucher.
Written comments should be received on or before June 6, 2000, to be assured of consideration.
Direct all written comments to Garrick R. Shear, Internal Revenue Service, room 5244, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to Carol Savage, (202) 622-3945, Internal Revenue Service, room 5242, 1111 Constitution Avenue NW., Washington, DC 20224.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Pub. L. 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Voluntary Customer Surveys To Implement E.O. 12862 Coordinated by the Office of Program Evaluation and Risk Analysis on Behalf of All IRS Operations Functions.
Written comments should be received on or before June 6, 2000, to be assured of consideration.
Direct all written comments to Garrick R. Shear, Internal Revenue Service, room 5244, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the information collection should be directed to Carol Savage, (202) 622-3945, Internal Revenue Service, room 5242, 1111 Constitution Avenue NW., Washington, DC 20224.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Internal Revenue Service (IRS), Treasury.
Publication of inflation adjustment factor, nonconventional source fuel credit, and reference price for calendar year 1999 as required by section 29 of the Internal Revenue Code (26 U.S.C. section 29).
The inflation adjustment factor, nonconventional source fuel credit, and reference price are used in determining the tax credit allowable on the production of fuel from nonconventional sources under section 29.
The 1999 inflation adjustment factor, nonconventional source fuel credit, and reference price apply to qualified fuels sold during calendar year 1999.
The inflation factor is calculated using GNP Implicit Price Deflators as computed and published by the Department of Commerce. The inflation factor for 1999, which is smaller than the factor published for 1998, reflects a comprehensive revision in 1999 of the national income and product accounts by the Department of Commerce. The inflation factor for calendar year 1999 is 2.0013.
The nonconventional source fuel credit for calendar year 1999 is $6.00 per barrel-of-oil equivalent of qualified fuels.
The reference price for calendar year 1999 is $15.56. Because this reference price does not exceed $23.50
Internal Revenue Service (IRS), Treasury.
Notice.
An open meeting of the Brooklyn District Citizen Advocacy Panel will be held in Brooklyn, New York.
The meeting will be held Friday April 28, 2000.
Eileen Cain at 1-888-912-1227 or 718-488-3555.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an operational meeting of the Citizen Advocacy Panel will be held Friday, April 28, 2000, 6 p.m. to 9 p.m. at the Internal Revenue Service Brooklyn Building located at 625 Fulton Street, Brooklyn, NY 11201. For more information or to confirm attendance, notification of intent to attend the meeting must be made with Eileen Cain. Mrs. Cain can be reached at 1-888-912-1227 or 718-488-3555. The public is invited to make oral comments from 8:30 p.m. to 9 p.m. on Friday, April 28, 2000. Individual comments will be limited to 5 minutes. If you would like to have the CAP consider a written statement, please call 1-888-912-1227 or 718-488-3555, or write Eileen Cain, CAP Office, P.O. Box R, Brooklyn, NY 11201. The Agenda will include the following: various IRS issues.
Notice.
A Public meeting of the South Florida District Citizen Advocacy Panel will be held in Naples, Florida.
The meeting will be held Friday, April 28, 2000 and Saturday, April 29, 2000.
Nancy Ferree at 1-888-912-1227 or 954-423-7974.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a Public meeting of the Citizen Advocacy Panel will be held Friday, April 28, 2000, 6 p.m. to 9 p.m. and Saturday, April 29, 2000, 9 a.m. to Noon at the YMCA, 5450 YMCA Road, Naples, FL 34109. For more information contact Nancy Ferree at 1-888-912-1227 or 954-423-7974. The public is invited to make oral comments. Individual comments will be limited to 10 minutes. If you would like to have the CAP consider a written statement, please call 1-888-912-1227 or 954-423-7974, or write Nancy Ferree, CAP Office, 7771 W. Oakland Park Blvd #225, Sunrise, FL, 33351.
The Agenda will include the following: various IRS issues.
Last minute changes to the agenda are possible and could prevent effective advance notice.
Internal Revenue Service (IRS), Treasury.
Notice.
An open meeting of the Midwest Citizen Advocacy Panel will be held in Milwaukee, Wisconsin.
The meeting will be held Thursday, April 27, 2000, and Friday, April 28, 2000.
Sandra McQuin at 1-888-912-1227, or 414-297-1604.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a working meeting of the Citizen Advocacy Panel (CAP) will be held Thursday, April 27, 2000, from 9:00 a.m. to 5:00 p.m. and Friday, April 28, 2000, from 9:00 a.m. to Noon at Reuss Federal Building, Meeting Room 290B, 310 W. Wisconsin Avenue, Milwaukee, WI. The Citizen Advocacy Panel is soliciting public comment, ideas, and suggestions on improving customer service at the Internal Revenue Service. Written comments can be submitted to the panel by faxing to (414) 297-1623, or by mail to Citizen Advocacy Panel, Mail Stop 1006 MIL, 310 West Wisconsin Avenue, Milwaukee, WI 53203-2221.
The Agenda will include the following: Various IRS issue updates and reports by the CAP sub-groups, presentation of taxpayer issues by individual members, CAP office report, and discussion of issues.
Last minute changes to the agenda are possible and could prevent effective advance notice.
Internal Revenue Service (IRS), Treasury.
Notice.
An open meeting of the Pacific-Northwest Citizen Advocacy
The meeting will be held Saturday, April 8, 2000.
Lori M. Dupuis at 1-888-912-1227 or 206-220-6096.
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Citizen Advocacy Panel will be held Saturday, April 8, 2000, 9 a.m. to Noon at the Doubletree Hotel, 2525 North 20th Avenue, Pasco, WA 99301. The public is invited to make oral comments. Individual comments will be limited to 10 minutes. If you would like to have the CAP consider a written statement, please call 1-888-912-1227 or 206-220-6096, or write Lori M. Dupuis, CAP Office, 915 2nd Avenue, Room 442, Seattle, WA 98174. Due to limited conference space, notification of intent to attend the meeting must be made with Lori M. Dupuis. Ms. Dupuis can be reached at 1-888-912-1227 or 206-220-6096.
The Agenda will include the following: various IRS issue updates and reports by the CAP sub-groups.
Last minute changes to the agenda are possible and could prevent effective advance notice.
In rule document 00-7267 beginning on page 15862 in the issue of Friday, March 24, 2000, make the following corrections:
1. On page 15863, in §250.198(e), in the third line of the table, “Chapter,” should read “Chapter 4,”.
2. On the same page, in the same section, in the “Incorporated by reference at” column, in the sixth and seventh entries, “§250.1202(a)(3) and (1)(4)” should read “§250.1202(a)(3) and (l)(4)”.
In rule document 00-6818 beginning on page 14774 in the issue of Friday, March 17, 2000, make the following corrections:
1. On page 14774, in the first column, in the second line from the bottom, “Peach” should read, “Peace”.
2. On the same page, in the third column, in the third paÿ7Eÿ7Eragraph, in the sixth line,“T&A” should read, “T&EA”.
3. On page 14775, in the first column, 14 lines from the bottom, “Weihle ” should read “Wiehle ”.
4. On the same page, in the second column, in the fourth line, after “promotion” add “agriculture/horticulture diversification, food processing,”
5. On the same page, in the same column, in the second line from the bottom, “participation” should read “participate”.
6. On page 14776, in the first column, second full paragraph, in the first line, “25.1” should read, “265.1”.
7. On page 14779, in the second column, in §214.2(q)(15)(x), after the last line, add “*****”.
8. On the same page, in the same column, in amendatory instruction 8c., “Paragraph (q)(3)(iv);(D)” should read, “Paragraph (q)(3)(iv)(D);”.
9. On the same page, in the third column, in amendatory instruction 10., the last line should read “paragraphs (q)(5)(i), (q)(7)(ii), and (q)(8)(ii)”.
10. On the same page, in the same column, in amendatory instruction 11., in the fourth line, after “visitors”, remove “to read
11. On the same page, in the same column, in amendatory instruction 12., in the second and fourth lines, “visitors” should read “visitor”.
12. On the same page, in the same column, in amendatory instruction 14., in the second line “revised ” should read “revising”.
13. On page 14780, in §248.3(d), in the first column, in the seventh line, “free” should read “fee”.
14. On the same page, §248.3(e)(2) in the second column, in the third line, after “spouse”, “of” should read “or”.
In notice document 00-6997 appearing on page 15019 in the issue of March 20, 2000, make the following correction:
In the second column, seven lines from the bottom,“April 10, 2000” should read “April 11, 2000”.
Health Care Financing Administration (HCFA), HHS, and Office of Inspector General (OIG), HHS.
Final rule with comment period.
This final rule with comment period implements a prospective payment system for hospital outpatient services furnished to Medicare beneficiaries, as set forth in section 1833(t) of the Social Security Act. It also establishes requirements for provider departments and provider-based entities, and it implements section 9343(c) of the Omnibus Budget Reconciliation Act of 1986, which prohibits Medicare payment for nonphysician services furnished to a hospital outpatient by a provider or supplier other than a hospital, unless the services are furnished under an arrangement with the hospital. In addition, this rule establishes in regulations the extension of reductions in payment for costs of hospital outpatient services required by section 4522 of the Balanced Budget Act of 1997, as amended by section 201(k) of the Balanced Budget Refinement Act of 1999.
See section VIII for a more detailed discussion of the provisions subject to comment.
Mail written comments (one original and three copies) to the following address ONLY: Health Care Financing Administration, Department of Health and Human Services, Attention: HCFA-1005-FC, P.O. Box 8013, Baltimore, MD 21244-8013.
If you prefer, you may deliver, by courier, your written comments (one original and three copies) to one of the following addresses:
Because of staffing and resource limitations, we cannot accept comments by facsimile (FAX) transmission. In commenting, please refer to file code HCFA-1005-FC.
Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, in Room 443-G of the Department's offices at 200 Independence Avenue, SW., Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (Phone (202) 690-7890).
For comments that relate to information collection requirements, mail a copy of comments to:
To assist readers in referencing sections contained in this document, we are providing the following table of contents. Within each section, we summarize pertinent material from our proposed rule of September 8, 1998 (63 FR 47552) followed by public comments and our responses.
When the Medicare program was first implemented, it paid for hospital services (inpatient and outpatient) based on hospital-specific reasonable costs attributable to serving Medicare beneficiaries. Later, the law was amended to limit payment to the lesser of a hospital's reasonable costs or its customary charges. In 1983, section 601 of the Social Security Amendments of 1983 (Pub. L. 98-21) completely revised the cost-based payment system for most hospital inpatient services by enacting section 1886(d) of the Social Security Act (the Act). This section provided for a prospective payment system (PPS) for acute hospital inpatient stays, effective with hospital cost reporting periods beginning on or after October 1, 1983.
Although payment for most inpatient services became subject to the PPS, Medicare hospital outpatient services continued to be paid based on hospital-specific costs, which provided little incentive for hospitals to furnish outpatient services efficiently. At the same time, advances in medical technology and changes in practice patterns were bringing about a shift in the site of medical care from the inpatient to the outpatient setting. During the 1980s, the Congress took steps to control the escalating costs of providing outpatient care. The Congress amended the statute to implement across-the-board reductions of 5.8 percent and 10 percent to the amounts otherwise payable by Medicare for hospital operating costs and capital costs, respectively, and enacted a number of different payment methods for specific types of hospital outpatient services. These methods included fee schedules for clinical diagnostic laboratory tests, orthotics, prosthetics, and durable medical equipment (DME); composite rate payment for dialysis for persons with end-stage renal disease (ESRD); and payments based on blends of hospital costs and the rates paid in other ambulatory settings such as separately certified ambulatory surgical centers (ASCs) or physician offices for certain surgery, radiology, and other diagnostic procedures. However, Medicare payment for services performed in the hospital outpatient setting remains largely cost-based.
In the Omnibus Budget Reconciliation Act of 1986 (OBRA 1986) (Pub. L. 99-509), the Congress paved the way for development of a PPS for hospital outpatient services. Section 9343(g) of OBRA 1986 mandated that fiscal intermediaries require hospitals to report claims for services under the HCFA Common Procedure Coding System (HCPCS). Section 9343(c) of OBRA 1986 extended the prohibition against unbundling of hospital services under section 1862(a)(14) of the Act to include outpatient services as well as inpatient services. The HCPCS coding enabled us to determine which specific procedures and services were being billed, while the extension of the prohibition against unbundling ensured that all nonphysician services provided to hospital outpatients would be billed only by the hospital, not by an outside supplier, and, therefore, would be reported on hospital bills and captured in the hospital outpatient data that could be used to develop an outpatient PPS.
A proposed rule to implement section 9343(c) was published in the
Section 1866(g) of the Act, as added by section 9343(c) of OBRA 1986, and amended by section 4085(i)(17) of the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987) (Pub. L. 100-203), authorizes the Department of Health and Human Services' Office of Inspector General to impose a civil money penalty (CMP), not to exceed $2,000, against any individual or entity who knowingly and willfully presents a bill in violation of an arrangement (as defined in section 1861(w)(1) of the Act).
In section 9343(f) of the OBRA 1986 and section 4151(b)(2) of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508), the Congress required that we develop a proposal to replace the current hospital outpatient payment system with a PPS and submit a report to the Congress on the proposed system.
The Secretary submitted a report to the Congress on March 17, 1995, summarizing the research we conducted searching for a way to classify outpatient services for purposes of developing an outpatient PPS. The report cited ambulatory patient groups (APGs), developed by 3M-Health Information Systems (3M-HIS) under a cooperative grant with HCFA, as the most promising classification system for grouping outpatient services and recommended that APG-like groups be used in designing a hospital outpatient PPS.
The report also presented a number of options that could be used, once a PPS was in place, for addressing the issue of rapidly growing beneficiary coinsurance. As a separate issue, we recommended that the Congress amend the provisions of the law pertaining to the blended payment methods for ASC surgery, radiology, and other diagnostic services to correct an anomaly that resulted in a less than full recognition of the amount paid by the beneficiary in calculating program payment (referred to as the formula-driven overpayment).
Three sections of the Balanced Budget Act of 1997 (the BBA 1997) (Pub. L. 105-33), enacted on August 5, 1997, affect Medicare payment for hospital outpatient services. Section 4521 of the BBA 1997 eliminates the formula-driven overpayment for ambulatory surgical
On November 29, 1999, the Balanced Budget Refinement Act of 1999 (the BBRA 1999), Pub. L. 106-113, was enacted. This Act made major changes that affect the proposed hospital outpatient PPS. The legislative changes are summarized in section I.E, below. More specific details on individual provisions that we are implementing in this final rule with comment period are included under the various sections of this preamble.
Section 4523 of the BBA 1997 amended section 1833 of the Act by adding subsection (t), which provides for a PPS for hospital outpatient department services. (The following citations reflect the statute as enacted by the BBA 1997.) Section 1833(t)(1)(B) of the Act authorizes the Secretary to designate the hospital outpatient services that would be paid under the PPS. That section also requires that the hospital outpatient PPS include hospital inpatient services designated by the Secretary that are covered under Part B for beneficiaries who are entitled to Part A benefits but who have exhausted them or otherwise are not entitled to them. Section 1833(t)(1)(B)(iii) of the Act specifically excludes ambulance, physical and occupational therapy, and speech-language pathology services, for which payment is made under a fee schedule.
Section 1833(t)(2) of the Act sets forth certain requirements for the hospital outpatient PPS. The Secretary is required to develop a classification system for covered outpatient services that may consist of groups arranged so that the services within each group are comparable clinically and with respect to the use of resources.
Section 1833(t)(2)(C) of the Act specifies data requirements for establishing relative payment weights. The weights are to be based on the median hospital costs determined by 1996 claims data and data from the most recent available cost reports. Section 1833(t)(2)(D) of the Act requires that the portion of the Medicare payment and the beneficiary coinsurance that are attributable to labor and labor-related costs be adjusted for geographic wage differences in a budget neutral manner.
The Secretary is authorized under section 1833(t)(2)(E) of the Act to establish, in a budget neutral manner, other adjustments, such as outlier adjustments or adjustments for certain classes of hospitals, that are necessary to ensure equitable payments. Section 1833(t)(2)(F) of the Act requires the Secretary to develop a method for controlling unnecessary increases in the volume of covered outpatient services.
Section 1833(t)(3) of the Act specifies how beneficiary deductibles are to be treated in calculating the Medicare payment and beneficiary coinsurance amounts and requires that rules be established regarding determination of coinsurance amounts for covered services that were not furnished in 1996. The statute freezes beneficiary coinsurance at 20 percent of the national median charges for covered services (or group of covered services) furnished during 1996 and updated to 1999 using the Secretary's estimated charge growth from 1996 to 1999.
Section 1833(t)(3) of the Act also prescribes the formula for calculating the initial conversion factor used to determine Medicare payment amounts for 1999 and the method for updating the conversion factor in subsequent years.
Sections 1833(t)(4) and (t)(5) of the Act describe the method for determining the Medicare payment amount and the beneficiary coinsurance amount for services covered under the outpatient PPS. Section 1833(t)(5)(B) of the Act requires the Secretary to establish a procedure whereby hospitals may voluntarily elect to reduce beneficiary coinsurance for some or all covered services to an amount not less than 20 percent of the Medicare payment amount. Hospitals are further allowed to disseminate information on any such reductions of coinsurance amounts. Section 4451 of the BBA 1997 added section 1861(v)(1)(T) to the Act, which provides that any reduction in coinsurance must not be treated as a bad debt.
Section 1833(t)(6) authorizes periodic review and revision of the payment groups, relative payment weights, wage index, and conversion factor.
Section 1833(t)(7) of the Act describes how payment is to be made for ambulance services, which are specifically excluded from the outpatient PPS under section 1833(t)(1)(B) of the Act.
Section 1833(t)(8) of the Act provides that the Secretary may establish a separate conversion factor for services furnished by cancer hospitals that are excluded from hospital inpatient PPS.
Section 1833(t)(9) of the Act prohibits administrative or judicial review of the hospital outpatient PPS classification system, the groups, relative payment weights, wage adjustment factors, other adjustments, calculation of base amounts, periodic adjustments, and the establishment of a separate conversion factor for those cancer hospitals excluded from hospital inpatient PPS.
Section 4523(d) of the BBA 1997 made a conforming
amendment to section 1833(a)(2)(B) of the Act to provide for payment under the hospital outpatient PPS for some services described in section 1832(a)(2) that are currently paid on a cost basis and furnished by providers of services, such as comprehensive outpatient rehabilitation facilities (CORFs), home health agencies (HHAs), hospices, and community mental health centers (CMHCs). This amendment provides that partial hospitalization services furnished by CMHCs be paid under the PPS.
Before enactment of section 4521(b) of the BBA 1997, using the blended payment formulas for ASC procedures, radiology, and other diagnostic services, the ASC or physician fee schedule portion was calculated as if the beneficiary paid 20 percent of the ASC rate or physician fee schedule amount instead of the actual amount paid, which was 20 percent of the hospital's billed charges. Section 4521(b), which amended sections 1833(i)(3)(B)(i)(II) and 1833(n)(1)(B)(i) of the Act, corrects this anomaly by changing the blended calculations so that all amounts paid by the beneficiary are subtracted from the total payment in the calculation to determine the amount due from the program. Effective for services furnished on or after October 1, 1997, payment for surgery, radiology, and other diagnostic services calculated by blended payment methods is now calculated by
Section 1861(v)(1)(S)(ii) of the Act was amended by section 4522 of the BBA 1997 to require that the amounts otherwise payable for hospital outpatient operating costs and capital costs be reduced by 5.8 percent and 10 percent, respectively, through December 31, 1999.
We published a proposed rule in the
The proposed rule originally provided for a 60-day comment period. However, the comment period was extended four times, ultimately ending on July 30, 1999. (See 63 FR 63429, November 13, 1998; 64 FR 1784, January 12, 1999; 64 FR 12277, March 12, 1999; and 64 FR 36320; July 6, 1999.)
On June 30, 1999, we published a correction notice (64 FR 35258) to correct a number of technical and typographical errors contained in the September 8, 1998 proposed rule. The numerical values in the proposed rule reflected incorrect data and data programming. Among other corrections, the notice set forth revised numerical values for the current payment, total services (total units), relative weights, proposed payment rates, national unadjusted coinsurance, minimum unadjusted coinsurance, and service-mix index.
We received approximately 10,500 comments in response to our September 8, 1998 proposed rule. That count includes the numerous requests from hospital and other interested groups and organizations that we extend the public comment period to allow additional time for analysis of the impact of our proposals. As we explain above, we extended the comment period four times, to end finally on July 30, 1999.
In addition to receiving comments from a number of organizations representing the full spectrum of the hospital industry, we received comments from beneficiaries and their families, physicians, health care workers, individual hospitals, professional associations and societies, legal and nonlegal representatives and spokespersons for beneficiaries and hospitals, members of the Congress, and other interested citizens. The majority of comments addressed our proposals regarding payment for: Corneal tissue; payment for high-cost technologies, both existing and future; payment for blood and blood products; and payment for high cost drugs, including chemotherapy agents. We also received numerous comments addressing: Our approach to ratesetting using the ambulatory payment classification (APC) system; our method of calculating the payment conversion factor; and the potentially negative impact of the proposed hospital outpatient PPS on hospital revenues. In addition, we received many comments concerning the proposed regulations for provider-based entities.
We carefully reviewed and considered all comments received timely. The many modifications that we made to our proposed regulations in response to commenters' suggestions and recommendations are reflected in the provisions of this final rule. Comments and our responses are addressed by topic in the sections that follow.
As noted above, subsequent to publication of the proposed rule, the BBRA 1999 was enacted on November 29, 1999. The BBRA 1999 made major changes that affect the proposed hospital outpatient PPS. Because these changes are effective with the implementation of the PPS, we have had to make some revisions from the September 8, 1998 proposed rule. The provisions of the BBRA 1999 that we are implementing in this final rule with comment period follow.
Section 201(a) of the BBRA 1999 amends section 1833(t) by redesignating paragraphs (5) through (9) as paragraphs (7) through (11) and adding a new paragraph (5). New section 1833(t)(5) of the Act provides that the Secretary will make payment adjustments for covered services whose costs exceed a given threshold (that is, an outlier payment). This section describes how the additional payments are to be calculated and caps the projected outlier payments at no more than 2.5 percent of the total projected payments (sum of both Medicare and beneficiary payments to the hospital) made under hospital outpatient PPS for years before 2004 and 3.0 percent of the total projected payments for 2004 and subsequent years.
Section 201(b) of the BBRA 1999 adds new section 1833(t)(6) to the Act, establishing transitional pass-through payments for certain medical devices, drugs, and biologicals. This provision does the following: Specifies the types of items for which additional payments must be made; describes the amount of the additional payment; limits these payments to at least 2 years but not more than 3 years; and caps the projected payment adjustments annually at 2.5 percent of the total projected payments for hospital outpatient services each year before 2004 and no more than 2.0 percent in subsequent years. Under this provision, the Secretary has the authority to reduce pro rata the amount of the additional payments if, before the beginning of a year, she estimates that these payments would otherwise exceed the caps.
Section 201(c) of the BBRA 1999 amends section 1833(t)(2)(E) of the Act to require that the establishment of outlier and transitional pass-through payment adjustments is to be made in a budget neutral manner.
Section 201(d) of the BBRA 1999 amends redesignated section 1833(t)(11) of the Act by extending the prohibition of administrative or judicial review to include the factors for determining outlier payments (that is, the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable total payment percentage), and the determination of additional payments for certain medical devices,
Section 201(e) of the BBRA 1999 amends section 1833(t)(1)(B) of the Act to include as covered outpatient services implantable prosthetics and DME and diagnostic x-ray, laboratory, and other tests associated with those implantable items.
Section 201(f) of the BBRA 1999 amends section 1833(t)(2)(C) of the Act, which specifies data requirements for establishing relative payment weights, to allow the Secretary the discretion to base the weights on either the median or mean hospital costs determined by data from the most recent available cost reports.
Section 201(g) of the BBRA 1999 amends section 1833(t)(2) of the Act to limit the variation of costs of services within each payment classification group by providing that the highest median (or mean cost, if elected by the Secretary) for an item or service within the group cannot be more than 2 times greater than the lowest median (or mean) cost for an item or service within the group. The provision allows the Secretary to make exceptions in unusual cases, such as for low volume items and services.
Section 201(h) of the BBRA 1999 amends redesignated section 1833(t)(8) of the Act to require at least annual review of the groups, relative payment weights, and the wage and other adjustments made by the Secretary to take into account changes in medical practice, the addition of new services, new cost data, and other relevant information and factors. That section of the Act is further amended to require the Secretary to consult with an expert outside advisory panel composed of an appropriate selection of provider representatives who will review the clinical integrity of the groups and weights and advise the Secretary accordingly. The panel may use data other than those collected or developed by the Department of HHS for the review and advisory purposes.
Section 201(i) of the BBRA 1999 amends redesignated section 1833(t)(7) of the Act to provide that the beneficiary coinsurance amount will be calculated as if the outlier and transitional pass-throughs had not occurred; that is, there will be no coinsurance collected from beneficiaries for the additional payments made to hospitals by Medicare for these adjustments.
Section 201(k) of the BBRA 1999 amends section 1861(v)(1)(S)(ii) of the Act to extend until the first date that the hospital outpatient PPS is implemented, the 5.8 and 10 percent reductions for hospital operating and capital costs, respectively.
Section 201(l) of the BBRA 1999 provides that, “With respect to determining the amount of copayments described in paragraph (3)(A)(ii) of section 1833(t) of the Social Security Act, as added by section 4523(a) of the BBA, Congress finds that such amount should be determined without regard to such section, in a budget neutral manner with respect to aggregate payments to hospitals, and that the Secretary of Health and Human Services has the authority to determine such amount without regard to such section.” Pursuant to this provision, we are calculating the aggregate PPS payment to hospitals in a budget neutral manner.
Section 202 of the BBRA 1999 amends section 1833(t) of the Act by redesignating paragraphs (7) through (11) as paragraphs (8) through (12), and adding a new paragraph (7), which provides for a transitional adjustment to limit payment reductions under the hospital outpatient PPS. More specifically, for the years 2000 through 2003, a provider, including a CMHC, will receive an adjustment if its payment-to-cost ratio for outpatient services furnished during the year is less than a set percentage of its payment-to-cost ratio for those services in its cost reporting period ending in 1996 (the base year). Two categories of hospitals, rural hospitals with 100 or fewer beds and cancer hospitals, will be held harmless under this provision. Small rural hospitals, for services furnished before January 1, 2004, will be maintained at the same payment-to-cost ratio as their base year cost report if their PPS payment-to-cost ratio is less. The hold-harmless provision applies permanently to cancer centers. Section 202 also requires the Secretary to make interim payments to affected hospitals subject to retrospective adjustments and requires that the provisions of this section do not affect beneficiary coinsurance. Finally, this provision is not subject to budget neutrality.
Section 204 of the BBRA 1999 amends redesignated section 1833(t)(8) of the Act to provide that the coinsurance amount for a procedure performed in a year cannot exceed the hospital inpatient deductible for that year.
Section 401 of the BBRA 1999 adds section 1886(d)(8)(E) to the Act to permit reclassification of certain urban hospitals as rural hospitals. Section 401 adds section 1833(t)(13) to the Act to provide that a hospital being treated as a rural hospital under section 1886(d)(8)(E) also be treated as a rural hospital under the hospital outpatient PPS.
Sections 9343(c)(1) and (c)(2) of OBRA 1986 amended sections 1862(a)(14) and 1866(a)(1)(H) of the Act, respectively. As revised, section 1862(a)(14) of the Act prohibits payment for nonphysician services furnished to hospital patients (inpatients and outpatients), unless the services are furnished by the hospital, either directly or under an arrangement (as defined in section 1861(w)(1) of the Act). As revised, section 1866(a)(1)(H) of the Act requires each Medicare-participating hospital to agree to furnish directly all covered nonphysician services required by its patients (inpatients and outpatients) or to have the services furnished under an arrangement (as defined in section 1861(w)(1) of the Act). Section 9338(a)(3) of OBRA 1986 affected implementation of the bundling mandate by amending section 1861(s)(2)(K) of the Act to permit services of physician assistants to be covered and billed separately. Sections 4511(a)(2)(C) and (D) of the BBA 1997 further revised sections 1862(a)(14) and 1866(a)(1)(H) of the Act, respectively, to exclude services of nurse practitioners
In order to deter the unbundling of nonphysician hospital services, section 9343(c)(3) of OBRA 1986 added section 1866(g) to the Act to provide for the imposition of civil money penalties (CMPs), not to exceed $2,000, against any person who knowingly and willfully presents, or causes to be presented, a bill or request for payment for a hospital outpatient service under Part B of Medicare that violates the requirement for billing under arrangements specified in section 1866(a)(1)(H) of the Act. In addition, section 1866(g) includes authorization to impose a CMP, in the same manner as other CMPs are imposed under section 1128A of the Act when arrangements should have been made but were not. Section 4085(i)(17) of OBRA 1987 amended section 1866(g) of the Act by deleting all references to hospital outpatient services under Part B of Medicare. The result of this amendment is that the CMP is now applicable for services furnished to hospital patients, whether paid for under Medicare Part A or B.
In order to implement section 1866(g) of the Act, we proposed in our August 5, 1988 proposed rule that the OIG would impose a CMP against any person who knowingly and willfully presents, or causes to be presented, a bill or request for payment for a hospital outpatient service under Part B of Medicare that violates the billing arrangement under section 1866(a)(1)(H) of the Act or the requirement for an arrangement. The amount of the CMP is to be limited to $2,000 for each improper bill or request, even if the bill or request included more than one item or service.
In our September 8, 1998 proposed rule, we proposed to make final most of the provisions of the August 5, 1988 proposed rule but with a number of revisions that we describe in detail in the proposed rule (63 FR 47558 through 47559). We are adopting as final regulations what we proposed in the September 8, 1998 rule with the following additional changes:
• We are adding a new paragraph (b)(7) to § 410.42 (Limitations on coverage of certain services furnished to hospital outpatients) to provide an exception to the hospital bundling requirements for services hospitals furnish to SNF residents as defined in § 411.15(p). (Section 410.42 has been redesignated from § 410.39 in the proposed rule.)
• We are making a minor change to newly redesignated paragraph (m)(2) (this language was formerly included in paragraph (m)(1)) in § 411.15 (Particular services excluded from coverage) to make it clearer that the exclusion discussed in this section is referring to excluding certain services from coverage.
• Except for minor wording changes in introductory paragraph (b) of § 1003.102 (Basis for civil money penalties and assessments), that section remains as it appeared in the August 5, 1988 proposed rule. Paragraph (b)(15) is redesignated from proposed paragraph (b)(4) in the August 5, 1988 proposed rule and (b)(14) in the September 8, 1998 proposed rule. Paragraphs (b)(12) through (b)(14) of § 1003.102 are reserved.
• We are adding a new paragraph (k) to § 1003.103 (Amount of penalty) to indicate that the OIG may impose a penalty of not more than $2,000 for each bill or request for items and services furnished to hospital patients in violation of the bundling requirements.
• We are also amending § 1003.105 (Exclusion from participation in Medicare, Medicaid and other Federal health care programs) by revising paragraph (a)(1)(i) to reflect that the basis for imposition of a CMP is also a basis for exclusion from participation in Medicare, Medicaid and other Federal health care programs.
All diagnostic tests that are furnished by a hospital, directly or under arrangements, to a registered hospital outpatient during an encounter at a hospital are subject to the bundling requirements. The hospital is not responsible for billing for the diagnostic test if a hospital patient leaves the hospital and goes elsewhere to obtain the diagnostic test.
We note that the SNF consolidated billing requirements, under § 411.15(p)(3)(iii), do not apply to a limited number of exceptionally intensive hospital outpatient services that lie well beyond the scope of care that SNFs would ordinarily furnish, and thus beyond the ordinary scope of SNF care plans. The hospital outpatient services that are currently included in this policy are: Cardiac catheterization; computerized axial tomography (CAT) scans; MRIs; ambulatory surgery involving the use of an operating room; emergency room services; radiation therapy; angiography; and lymphatic and venous procedures. When a hospital or CAH provides these services to a beneficiary, the beneficiary's status as a SNF resident ends, but only with respect to these services. The beneficiary is now considered to be a hospital outpatient and the services are subject to hospital outpatient bundling requirements. In November 1998, we issued Program Memorandum transmittal number A-98-37, which provides additional clarification on this exclusion as well as a list of specific HCPCS codes that identify the services that are excluded from SNF consolidated billing but subject to hospital outpatient bundling.
In this section, we designate the services for which Medicare will make payment under the hospital outpatient PPS, the payment rates set for those services, and the method by which we determined the outpatient PPS payment and coinsurance amounts.
We explain the structure of the hospital outpatient PPS, respond to comments that we received about the proposed PPS, and describe modifications that we made to the proposed PPS in response to comments, such as provisions we are making to expedite appropriate payment for new technologies and provisions to pay for blood and blood products.
In this section, we also discuss how we will implement requirements enacted by the BBRA 1999, including transitional payment corridors and other payment adjustments such as outliers and transitional pass-throughs.
This PPS applies to covered hospital outpatient services furnished by all hospitals participating in the Medicare program, except as noted below. Partial hospitalization services in community mental health centers (CMHCs) are also paid under this PPS. Exclusions from outpatient PPS are different and more limited than exclusions from inpatient PPS. Thus, hospitals or distinct parts of hospitals that are excluded from the inpatient PPS are included in the outpatient PPS, to the extent that the hospital or distinct part furnishes outpatient services. For example, we will make payment under the outpatient PPS for outpatient psychiatric services. The outpatient services provided by hospitals of the Indian Health Service (IHS) will continue to be paid under separately established rates which are published annually in the
The following hospitals are excluded from the outpatient PPS:
• Certain hospitals in Maryland qualify under section 1814(b)(3) of the Act for payment under the State's payment system. The excluded services are limited to those paid under the State's payment system as described in section 1814(b)(3) of the Act. Any other outpatient services furnished by the hospital are paid under the outpatient PPS.
• Critical access hospitals that are paid under a reasonable cost based system, as required under section 1834(g) of the Act.
Section 1833(t)(1)(B)(i) of the Act gives us the authority to designate the services to be covered under the hospital outpatient PPS. In this section of the final rule, we designate the types
In developing a hospital outpatient PPS, we want to ensure that all services furnished in a hospital outpatient setting will be paid on a prospective basis. We have already been paying, in part, for some hospital outpatient services such as clinical diagnostic laboratory services, orthotics, and end-stage renal disease (ESRD) dialysis services based on fee schedules or other prospectively determined rates that also apply across other sites of ambulatory care. Rather than duplicate existing payment systems that are effectively achieving consistency of payments across different service delivery sites, we proposed to exclude from the outpatient PPS those services furnished in a hospital outpatient setting that were already subject to an existing fee schedule or other prospectively determined payment rate. The similar payments across various settings create a more level playing field in which Medicare makes virtually the same payment for the same service, without regard to where the service is furnished.
We therefore proposed to exclude from the scope of services paid under the hospital outpatient PPS the following:
• Services already paid under fee schedules or other payment systems including, but not limited to: screening mammographies, services for patients with ESRD that are paid for under the ESRD composite rate; the professional services of physicians and non-physician practitioners paid under the Medicare physician fee schedule; laboratory services paid under the clinical diagnostic laboratory fee schedule; and DME, orthotics, prosthetics, and prosthetics devices, prosthetic implants, and supplies (DMEPOS) paid under the DMEPOS fee schedule when the hospital is acting as a supplier of these items. An item such as crutches or a walker that is given to the patient to take home, but that may also be used while the patient is at the hospital, would be billed to the DME regional carrier rather than paid for under the hospital outpatient PPS.
• Hospital outpatient services furnished to SNF inpatients as part of his or her resident assessment or comprehensive care plan (and thus included under the SNF PPS) that are furnished by the hospital “under arrangements” but billable only by the SNF, regardless of whether or not the patient is in a Part A SNF stay.
• Services and procedures that require inpatient care.
The statute excludes from the definition of “covered OPD services” ambulance services, physical and occupational therapy, and speech-language pathology services, specified in section 1833(t)(1)(B)(iii) of the Act (redesignated as section 1833(t)(1)(B)(iv) by section 201(e) of the BBRA 1999). These services are to be paid under fee schedules in all settings.
An industry association stated that we failed to consider surgical judgment and patient choice in determining the appropriate treatment setting for certain services that we proposed to exclude from coverage. Other commenters believe that the appropriate site for performing a medical service is best determined by physicians and their patients. One professional society stated that case law including medical malpractice case law is sufficient to ensure that medical services are delivered in the appropriate treatment setting and in conformance with prevailing medical standards.
Some procedures formerly performed only in the inpatient setting, however, have moved to the outpatient site of service. This movement has taken place due to new, less-invasive surgical techniques, such as laparoscopy, or new anesthesia agents that clear from the body more rapidly, allowing some patients to have general anesthesia in the morning and return home that afternoon. Thus we have had to decide which procedures may reasonably be performed in the outpatient setting, and which cannot. We have been guided in this decision by our medical advisors' clinical judgment regarding what is reasonable in various settings, comments we received in response to the proposed rule, and bill data which shows movement from one site to another. In section III.C.5, we discuss the criteria we considered in defining “inpatient only” procedures.
In the course of identifying items and services whose costs we proposed to designate for payment under the hospital outpatient PPS, we gave considerable thought to including implantable items and services because these items and services are such an integral part of the procedure by which they are inserted or implanted. However, a number of the more common implants such as aqueous shunts, hallux valgus implants, infusion pumps, and neurostimulators, are classified as implantable prosthetics or DME. The statutory language governing payment for DMEPOS provides that, notwithstanding any other provision of the Medicare statute, DMEPOS must be paid for using the DMEPOS fee schedule. Therefore, under the proposed rule, the scope of services paid under the hospital outpatient PPS did not include implantable prosthetics and DME paid under the DMEPOS fee schedule. However, we did propose to package payment for implanted items such as stents, vascular catheters, and venous ports within the APC payment rate for the procedure related to the insertion of these items because we
Section 201(e) of the BBRA 1999 amends section 1833(t)(1)(B) of the Act to provide that “covered OPD services” include implantable items described in paragraph (3), (6), or (8) of section 1861(s) of the Act. The conference report accompanying the BBRA 1999, H. R. Rep. No. 436 (Part I), 106th Cong., 1st Sess. (1999), expresses the belief of the conferees that the current DMEPOS fee schedule is not appropriate for certain implantable medical items such as pacemakers, defibrillators, cardiac sensors, venous grafts, drug pumps, stents, neurostimulators, and orthopedic implants as well as items that come into contact with internal human tissue during invasive medical procedures, but are not permanently implanted. In the conference report agreement, the conferees state their intention that payment for these items be made through the outpatient PPS, regardless of how these products might be classified on current HCFA fee schedules. The implantable items affected by this BBRA 1999 requirement include prosthetic implants (other than dental) that replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care and including replacement of these devices); implantable DME; and implantable items used in performing diagnostic x-rays, diagnostic laboratory tests, and other diagnostic tests.
We are modifying proposed § 419.22 to remove prosthetic implants from the list of services excluded from payment under the hospital outpatient PPS. We are adding subparagraphs (9), (10), and (11) to proposed § 419.2(b), to include the following in the list of items and services whose costs are included in hospital outpatient PPS payment rates: prosthetic implants (other than dental) that replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), and including replacement of these devices; implantable DME; and implantable items used in performing diagnostic x-rays, diagnostic laboratory tests, and other diagnostic tests.
We proposed to include three categories of services within the scope of the outpatient PPS, as follows:
Section 1833(t)(1)(B)(ii) of the Act provides for Medicare payment under the hospital outpatient PPS for certain services designated by the Secretary that are furnished to inpatients who have exhausted their Part A benefits or who are otherwise not in a covered Part A stay. Examples of services covered under this provision include diagnostic x-rays and certain other diagnostic services and radiation therapy covered under section 1832 of the Act.
Section 1833(a)(2)(B) of the Act provides that partial hospitalization services furnished in CMHCs be paid under the hospital outpatient PPS. Partial hospitalization is a distinct and organized intensive psychiatric outpatient day treatment program, designed to provide patients who have profound and disabling mental health conditions with an individualized, coordinated, comprehensive, and multidisciplinary treatment program.
We proposed to designate the following services to be paid under the hospital outpatient PPS:
• All hospital outpatient services, except those that are identified as excluded, above, in section III.B.1 of this final rule. The types of services subject to payment under the hospital outpatient PPS include the following: surgical procedures; radiology, including radiation therapy; clinic visits; emergency department visits; diagnostic services and other diagnostic tests; partial hospitalization for the mentally ill; surgical pathology; and cancer chemotherapy.
• Specific hospital outpatient services furnished to a beneficiary who is admitted to a Medicare-participating SNF but who is not considered to be a SNF resident, for purposes of SNF consolidated billing, with respect to those services that are beyond the scope of SNF comprehensive care plans. The specific hospital outpatient services that are excluded from SNF consolidated billing are cardiac catheterization, computerized axial tomography (CAT) scans, MRIs, ambulatory surgery involving the use of an operating room, emergency room services, radiation therapy, angiography, and lymphatic and venous procedures.
• Supplies such as surgical dressings used during surgery or other treatments in the hospital outpatient setting that are also paid under the DMEPOS fee schedule. Payment for these supplies, when they are furnished in a hospital outpatient setting, is packaged into the APC payment rate for the procedure or service with which the items are associated.
• Certain preventive services furnished to healthy persons, such as colorectal cancer screening.
Section 4523(d)(3) of the BBA 1997 amended section 1833(a)(2)(B) of the Act to provide that we discontinue reasonable cost based payment and instead make Part B payment under the hospital outpatient PPS for certain medical and other health services when
• Antigens (as defined in 1861(s)(2)(G) of the Act);
• Splints and casts (1861(s)(5) of the Act);
• Pneumococcal vaccine, influenza vaccine, hepatitis B vaccine (1861(s)(10) of the Act).
Upon implementation of the hospital outpatient PPS, we would make Part B payment for the above services under the outpatient PPS when they are furnished by an HHA or hospice program. We would also make payment for antigens and the vaccines under the PPS when they are furnished by CORFs. (Splints and casts furnished by CORFs are paid under the rehabilitation fee schedule.) However, this provision would not apply to services furnished by a CORF that fall within the definition of CORF services at section 1861(cc)(1) of the Act. It also would not apply to services furnished by a hospice within the scope of the hospice benefit. Nor would it apply to services furnished by HHAs to individuals under an HHA plan of treatment within the scope of the home health benefit.
We received no comments about the services we proposed to include within the scope of the hospital outpatient PPS. As noted in the preceding section III.B.1, we added certain implantable items to § 419.2(b) to implement section 201(e) of the BBRA 1999.
In the September 8, 1998 proposed rule in the
The following are the payment status indicators and description of the particular services each indicator identifies:
• We use “A” to indicate services that are paid under some other method such as the DMEPOS fee schedule or the physician fee schedule.
• We use “C” to indicate inpatient services that are not paid under the outpatient PPS.
• We use “E” to indicate services for which payment is not allowed under the hospital outpatient PPS. In some instances, the service is not covered by Medicare. In other instances, Medicare does not use the code in question, but does use another code to describe the service.
• We use “F” to indicate corneal tissue acquisition costs, which are paid separately.
• We use “G” to indicate a current drug or biological for which payment is made under the transitional pass-through.
• We use “H” to indicate a device for which payment is made under the transitional pass-through.
• We use “J” to indicate a new drug or biological for which payment is made under the transitional pass-through.
• We use “N” to indicate services that are incidental, with payment packaged into another service or APC group.
• We use “P” to indicate services that are paid only in partial hospitalization programs.
• We use “S” to indicate significant procedures for which payment is allowed under the hospital outpatient PPS but to which the multiple procedure reduction does not apply.
• We use “T” to indicate surgical services for which payment is allowed under the hospital outpatient PPS. Services with this payment indicator are the only services to which the multiple procedure payment reduction applies.
• We use “V” to indicate medical visits for which payment is allowed under the hospital outpatient PPS.
• We use “X” to indicate ancillary services for which payment is allowed under the hospital outpatient PPS.
The table below lists types of services, the hospital outpatient PPS payment status indicator assigned to each type of service, and the basis for Medicare payment for the service.
In our March 17, 1995 report to Congress, we recommended that groups similar to the ambulatory patient groups (APGs) developed by 3M Health Information Systems (3M) be used as the basis for the hospital outpatient PPS. We made this recommendation after examining a number of other payment systems that were already in place or under development, including DRGs that are the basis for Medicare payment for hospital inpatient services, the Medicare physician fee schedule that was implemented in 1992, and the payment groups that have been the basis for Medicare payments for ambulatory surgical center (ASC) facility services since 1982.
As provided by the BBA 1997, section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered outpatient services. Section 1833(t)(2)(B) provides that this classification system may be composed of groups, so that services within each group are comparable clinically and with respect to the use of resources. The statute refers to “each such service (or group of services),” confirming that the Secretary may choose or not choose to group services.
We explain in our proposed rule that we revised the APGs, based on more recent Medicare data than that used by 3M, to create the ambulatory payment classification (APC) system. We proposed to group services identified by HCPCS codes and descriptors within APC groups as the basis for setting payment rates under the hospital outpatient PPS. We indicated that we organized the APC groups so that the services within each group would be homogeneous both clinically and in terms of resource utilization. We invited comments on our proposal to set rates on the basis of groups of services rather than on individual codes.
One major hospital association expressed its preference for a service-specific fee schedule because of the wide variation in costs represented by groups of codes. Another hospital association advocated using individual services rather than groups of services as the basis for ratesetting, but recommended, if we were to use some form of grouping, that we apply tight limits on the variations of costs for services within a group.
In both its March 1998 and March 1999 reports to the Congress on Medicare payment policy, MedPAC recommends that payment rates under the hospital outpatient PPS be based upon costs of individual services rather than groups of similar services to help ensure consistent payments across ambulatory settings. In its March 1999 report, MedPAC asserts its belief that the burden imposed by our proposed APC system outweighs its benefits in ambulatory settings. MedPAC gives several reasons to support its position.
• The use of groups to calculate weights masks questionable cost data for low volume and new procedures.
• Different classes of hospitals face disproportionate impacts, suggesting APC groups may not be as homogeneous as we believe.
• Grouping services will likely create additional administrative burdens for hospitals, because hospitals may have to purchase or develop new software and will experience additional education and training costs.
We do not share MedPAC's concerns. We have a high level of confidence in the ratesetting method using APC groups that we implement in this final rule with comment period. As we explain below, in section III.C.6, we have extensively restructured the APC groups to respond to comments on the proposed rule, to incorporate specific provisions of the BBRA 1999, and to correct some errors that had come to our attention. We believe that by using median costs in the calculation of group weights, we limit the extent to which infrequently performed services with suspect costs can affect the payment rate of an APC group.
As discussed below in the impact analysis (section IX of this preamble), the provisions of this final rule with comment period, which include setting rates using APC groups, alleviate to a large extent the disproportionate impacts on different classes of hospitals estimated in our proposed rule. In addition, as we explain in section III.C.6, when we restructured the APC groups, we were particularly attentive to the degree of provider concentration associated with the individual services within a group in order to avoid biasing the payment system against any subset of hospitals.
Finally, none of the commenters cited increased administrative burden as an argument against using groups. Even though we are using APC groups to set rates under the hospital outpatient PPS, hospitals will bill for services using HCPCS codes (not APCs) using the same claims forms that they use currently. Although to receive payment under the new system, hospitals will have to more fully code the services they furnish, they will not have to know to which APC the service is assigned in order to determine the payment amount. We are publishing the payment rate applicable to each HCPCS code in Addendum B of this final rule. Any burdens on hospitals necessitating additional technical assistance, training, or systems changes are more a function of implementing an entirely new payment system than of our setting rates on the basis of groups of services.
In our proposed rule, we described packaged services as those items or services that we recognized as contributing to the cost of the procedures or services in an APC group, and for which we would not make separate payment. We proposed to include as packaged services use of the operating room and recovery room, anesthesia, medical/surgical supplies, pharmaceuticals, observation, blood, intraocular lenses, casts and splints, the costs of acquiring tissue such as corneal tissue for surgical insertion and various incidental services such as venipuncture. We packaged the services (and their costs) within the APC group of procedures with which they were delivered in the base year. For a list of proposed packaged services grouped by hospital revenue centers, refer to the June 30, 1999 correction notice (64 FR 35258).
As we gain experience with and collect additional cost data under the hospital outpatient PPS, we will review our policy to pay separately for certain items and services that would otherwise be packaged into the APC payment. Should we decide to modify this policy, we will do so through the rulemaking process as part of our annual hospital outpatient PPS update.
We received many comments urging us to pay separately for observation services, particularly when patients are seen in the emergency department. Observation service is placing a patient in an inpatient area, adjacent to the emergency department, or, according to some comments, in the intensive care unit (ICU) or coronary care unit (CCU), in order to monitor the patient while determining whether he or she needs to be admitted, have further outpatient treatment, or be discharged. After 1983, many hospitals began to rely heavily on the use of observation services when peer review organizations questioned admissions under the hospital inpatient prospective payment system. However, in some cases, patients were kept in “outpatient” observation for days or even weeks at a time. This resulted in excess payments both from the Medicare program and from beneficiaries who generally paid a higher coinsurance. In response to this practice, in November 1996, we issued instructions limiting covered observation services to no more than 48 hours except in the most extreme circumstances. However, the cost data upon which the APC system is based contain all costs for observation in 1996, including those that exceeded the 48-hour limit imposed at the end of that year. We have packaged those costs into the service with which they were furnished in the base year. Thus, APC payments for emergency room visits include the costs of observation within the payment.
Although, as noted above, we received many comments urging that observation services be covered as a separate APC, we continue to believe that these services have been used so inappropriately in the past that we will have to gather data under the PPS before considering constructing a separate APC. We have packaged observation wherever it was billed. Roughly $139 million was identified by revenue code 762 as representing observation services. An additional $253 million was identified in revenue codes 760, 761, and 769, which could be used for either observation or treatment room use. That $253 million is also packaged. (Both figures are in 1996 dollars.)
Further analyses will be necessary on the use of observation as an adjunct to emergency treatment, as in the case of chest pain. In order to ensure that we will have sufficient data for our future analyses, hospitals must continue to bill for observation using revenue center 762 and showing hours in the units field. Observation that is billed must represent some level of active monitoring by medical personnel. It must not be billed as a way to capture room and board for outpatients. During our first review of the APC groups, we will assess whether patients with certain conditions use observation services that should be separately recognized. Thus, correct diagnosis coding is required.
As part of their comments, the Eye Bank Association of America (EBAA) submitted a report of a study the EBAA commissioned on corneal tissue acquisition costs. The study was conducted by the Lewin Group which collected and analyzed data on corneal tissue acquisition costs incurred by 74 of EBAA's 100 members that are charitable nonprofit organizations. The report states that these 74 eye banks supplied approximately 82 percent of the corneal tissue distributed
Additionally, the report states that “fund raising and in-kind service values are not as well centered on their median values as the underlying cost data. Variability in fund raising and in-kind contributions not only exists between eye banks, but from year to year, within the same eye bank.” According to the study, charitable contributions in the form of cash and in-kind services represented 28 percent of the eye banks' total gross cost for tissues furnished in 1997. The Lewin Group finds that “If HCFA were to move to fee schedule or other fixed-payment rate, and pays the adjusted median Gross cost Per Transplant * * * payment of $1689, HCFA would overpay some banks and underpay others, depending on philanthropy and in-kind services which varies from community to community and from year to year. The variation is too extreme to determine a fair rate-based system, without destroying the philanthropy the community is built upon.”
We proposed to package the cost of drugs, pharmaceuticals, and biologicals with APC groups because we believe drugs are usually provided in connection with some other treatment or procedure. We collected aggregate cost data on all drugs that were billed with HCPCS codes and those billed with revenue center codes, whether or not a HCPCS was entered. By so doing, we captured historical patterns of drug use within the APC groups with which the drugs were billed during the base year. However, because we did not require HCPCS coding of drugs, we could not isolate costs associated with individual drugs, some of which are very expensive even though they are rarely used and may be used by only a few hospitals. As a result, we acknowledge that our proposed APC payment rates may not fully reflect costs of very expensive drugs or biologicals.
We also proposed to create separate drug groups for chemotherapeutic agents because those were separately identified in the APG system designed by 3M. However, because we did not have bills that were coded to identify drugs individually, we were concerned that the APC groups for chemotherapeutic groups may not have completely reflected the costs of these drugs.
After consideration of comments received about packaging of services and of the requirements set forth in the amendments made to section 1833(t) of the Act by section 201(b) and section 201(e) of the BBRA 1999, we have revised the package of services directly related and integral to performing a procedure or furnishing a service on an outpatient basis whose costs will determine the national payment rate for that procedure or service under the hospital outpatient PPS.
• We will package into the APC payment rate for a given procedure or service any costs incurred to furnish the following items and services: Use of an operating suite, procedure room or treatment room; use of the recovery room or area; use of an observation bed; anesthesia; medical and surgical supplies and equipment; surgical dressings; supplies and equipment for administering and monitoring anesthesia or sedation; intraocular lenses; capital-related costs; costs incurred to procure donor tissue other than corneal tissue; and, various incidental services such as venipuncture.
• In general, we will package the cost of drugs, pharmaceuticals and biologicals into the APC payment rate for the primary procedure or treatment with which they are used. Additional payment for some drugs, pharmaceuticals, and biologics may be allowed under the transitional pass-through provisions, which we explain below, in section III.D.
• We will
• We will
As we discussed in our proposed rule, determining payment for hospital clinic and emergency department (ED) visits requires a variety of considerations such as the following:
• The impact of packaging on setting payment rates.
• How to code visits in a manner that recognizes variations in service intensity and levels of resource consumption.
• How to keep the system administratively manageable.
• How to define critical care in terms of facility as opposed to physician input.
• Data problems associated with identifying costs from claims that list multiple services.
• How to move toward greater uniformity of payments across ambulatory settings so as to remove payment as an incentive for determining site of service.
The major issue we faced in determining payment for hospital clinic and ED visits is whether to include diagnosis as well as
In our proposed rule, we considered several approaches to setting prospective payment rates for hospital clinic and ED visits. Potential options included: (1) Using diagnosis codes only; (2) using CPT codes only; and (3) using a CPT-diagnosis code hybrid. We solicited comments on these approaches to setting payment rates for clinic and ED visits as well as comments on alternative approaches that we did not set forth in the proposed rule. In the proposed rule, we discussed in detail our assessment of the advantages and disadvantages of each approach.
In addition, we proposed to create a HCPCS code that would be used to bill when a patient presents to an ED, requests a screening, and is screened in accordance with section 1867(a) of the Act. Payment for this new code would be minimal because we included no treatment costs in the screening service. Payment for the screening APC would be made only when no additional services were furnished by the emergency department. If nonemergency treatment was furnished, the appropriate emergency department visit would be billed, and not the screening. Similarly, if the screening reveals that an emergency does exist and treatment is instituted immediately, the screening would not be billed because we would consider payment to be subsumed into the payment for further treatment.
We proposed paying for critical care as the highest level of “visit.” In our proposed rule, we stated that hospitals would use CPT code 99291 to bill for outpatient encounters in which critical care services are furnished.
We used the CPT definition of “critical care” which is the evaluation and management of the critically ill or injured patient. Under the outpatient PPS, we would allow the hospital to use CPT code 99291 in place of, but not in addition to, a code for a medical visit or for an emergency department service. Although the CPT system allows the physician to bill in 30-minute increments following the first 74-minute period of providing critical care, we proposed to pay separately for only the initial period (CPT code 99291), packaging the few instances in which the 30-minute increments (CPT code 99292) were billed. If other services, such as surgery, x-rays, or cardiopulmonary resuscitation, were furnished on the same day as the critical care services, we would allow the hospital to bill for them separately.
In developing medical visit APCs based on CPT procedure codes only (a change from the proposed rule), we are collapsing 31 CPT codes that define clinic and emergency visits into six groups, three each for the clinics and the emergency department. The final APC groups for clinic and emergency visits are as follows: APC 0600, Low Level Clinic Visits; APC 0601, Mid-Level Clinic Visits; APC 0602, High Level Clinic Visits; APC 0603, Interdisciplinary Team Conference; APC 0610, Low Level Emergency Visits; APC 0611, Mid-Level Emergency Visits; APC 0612, High Level Emergency Visits; and APC 0620, Critical Care.
When basing payment on CPT codes alone, the range of costs reflects hospitals' billing patterns in increasing level of intensity. However, those increasing increments are due largely to hospitals' use of “chargemaster” systems, which generate bills using predetermined charges for codes. Thus, billing patterns reflect standard bills, not the resources used in any particular case.
We had been concerned that certain hospitals' use of the lowest level code, CPT code 99201, to bill for all clinic visits would distort the data, causing inflation in both the volume and cost of low-level clinic visits, and a corresponding underreporting of mid- and high-level visits. (Costs for mid- and high-level visits would presumably have been correct, because individual hospitals would have reported appropriate charges with these codes; there simply would have been fewer reported visits at those levels.)
We have developed the weights for clinic visits by using claims data only from a subset of hospitals that billed a wider range of visits rather than relying solely on claims with CPT code 99201. We chose to use this subset of hospitals (for this purpose only) because we do not know what CPT code 99201 indicates when hospitals use it exclusively to bill all visits.
We emphasize the importance of hospitals assessing from the outset the intensity of their clinic visits and reporting codes properly based on internal assessment of the charges for those codes, rather than failing to distinguish between low-and mid-level visits “because the payment is the same.” The billing information that hospitals report during the first years of implementation of the hospital outpatient PPS will be vitally important to our revision of weights and other adjustments that affect payment in future years. We realize that while these HCPCS codes appropriately represent different levels of physician effort, they do not adequately describe nonphysician resources. However, in the same way that each HCPCS code represents a different degree of physician effort, the same concept can be applied to each code in terms of the differences in resource utilization. Therefore, each facility should develop a system for mapping the provided services or combination of services furnished to the different levels of effort represented by the codes. (The meaning of “new” and “established” pertain to whether or not the patient already has a hospital medical record number.)
We will hold each facility accountable for following its own system for assigning the different levels of HCPCS codes. As long as the services furnished are documented and medically necessary and the facility is following its own system, which reasonably relates the intensity of hospital resources to the different levels of HCPCS codes, we will assume that it is in compliance with these reporting requirements as they relate to the clinic/emergency department visit code reported on the bill. Therefore, we would not expect to see a high degree of correlation between the code reported by the physician and that reported by the facility.
Hospitals are required to use HCPCS code 99291 to report outpatient encounters in which critical care services are furnished. (See the American Medical Association's CPT 2000 coding manual for the definition of this code.) The hospital is required to use HCPCS code 99291 in place of, but not in addition to, a code for a medical visit or for an emergency department service.
We will work with the American Hospital Association and the American Medical Association to propose the establishment of appropriate facility-based patient visit codes in time for the next proposed rule.
• If the patient dies in the ED, make payment under the outpatient PPS for services furnished.
• If the ED or other physician orders the patient to the operating room for a surgical procedure, and the patient dies in surgery, payment will be made based on the status of the patient. If the patient had been admitted as an inpatient, pay under the hospital inpatient PPS (a DRG-based payment). If the patient was not admitted as an inpatient, pay under the outpatient PPS (an APC-based payment). If the patient was not admitted as an inpatient and the procedure is designated as an inpatient-only procedure (payment status indicator “C”), no Medicare payment will be made for the procedure, but payment will be made for ED services.
However, we note that the comment did prompt us to develop a code for billing those visits during which numerous physicians see a patient concurrently, for example, a surgeon, medical oncologist, and radiation oncologist for a cancer patient, to discuss treatment options and to ensure that the patient is fully informed. In this instance, each physician is addressing the patient's care from a unique perspective. If several physicians see a patient concurrently in the same clinic for the same reason, the hospital would bill for one clinic visit using an appropriate visit code even though each physician would bill individually for his or her professional services. We have established a code for hospitals to use in reporting a scheduled medical conference with the patient involving a combination of at least three health care professionals, at least one of whom is a physician. That code is G0175, Scheduled interdisciplinary team conference (minimum of three, exclusive of patient care nursing staff) with patient present.
As we explained in the proposed rule, partial hospitalization is an intensive outpatient program of psychiatric services provided to patients in lieu of inpatient psychiatric care. Partial hospitalization may be provided by a hospital to its outpatients or by a Medicare-certified community mental health center (CMHC). It is important to note that the services of physicians, clinical psychologists, clinical nurse specialists (CNSs), nurse practitioners (NPs), and physician assistants (PAs) furnished to partial hospitalization patients would continue to be billed separately to the carrier as professional services and are not considered to be partial hospitalization services. Thus, payment for partial hospitalization services represents the provider's overhead costs, support staff, and the services of clinical social workers (CSWs) and occupational therapists (OTs), whose professional services are considered to be partial hospitalization services for which payment is made to the provider. Including CSW and OT services reflects historical patterns of treatment billed during the base year.
Because a day of care is the unit that defines the structure and scheduling of partial hospitalization services, we proposed a per diem payment methodology for the partial hospitalization APC. We analyzed the service components billed by hospitals over the course of a billing period and determined the median hospital cost of furnishing a day of partial hospitalization. As noted in the June 30, 1999 correction notice, this analysis resulted in a proposed APC payment rate of $206.71 per day, of which $46.78 is the beneficiary's coinsurance.
We also solicited comments on a number of issues related to partial hospitalization. We asked for information on the mix of services that constitute a typical partial hospitalization day and average duration of a partial hospitalization episode, whether we should impose a minimum number of services for each covered partial hospitalization day, and whether we should establish a limit on routine outpatient mental health services furnished on a given day to equal the partial hospitalization per diem amount. Finally, we indicated that we are considering specifying a timeframe for physician recertification of need for partial hospitalization services as a method of ensuring that a patient's condition continues to require the intensity of a partial hospitalization program.
We did not receive a significant number of public comments on this issue. A summary of the comments we received and our responses follow.
To bill for partial hospitalization services under the hospital outpatient PPS, hospitals are to use these HCPCS and revenue codes and are to specify condition code 41 on the HCFA-1450 claim form. Before assigning a claim for payment to APC 0033 (the final APC for partial hospitalization services), the outpatient code editor (OCE) will check for errors; for example, the OCE will verify that the claim includes a mental health diagnosis, and at least three partial hospitalization HCPCS codes for each day of service, one of which must be a psychotherapy HCPCS code (other than brief). Claims that do not pass the OCE edits will undergo further prepayment review.
With regard to the comments regarding substance abuse day programs, the Medicare benefit category is partial hospitalization services. Because there is no separate benefit category for substance abuse programs, any such program would have to meet requirements established for partial hospitalization programs in order for claims to group to APC 0033, including the requirements that a physician certify that the patient would otherwise require inpatient psychiatric care in the absence of the partial hospitalization services and that the program provides active treatment.
With regard to the content and staffing of partial hospitalization programs, we believe that all the covered services listed in section 1861(ff) of the Act and the disciplines of the staff who provide the services, that is, the multidisciplinary team, are an important element in creating the therapeutic milieu that distinguishes partial hospitalization programs from other outpatient mental health treatment. We believe it would be inappropriate if providers no longer offered the full range of partial hospitalization services, especially services such as OT that continue to be bundled in the per diem amount. We plan to monitor the extent to which providers change their programming in response to implementation of the PPS. Because the data on which the per diem was based included the full range of services and the use of certain bundled professionals, we will monitor changes in services or increased use of unbundled practitioners to evaluate and update the per diem rate. In response to the comment recommending that we bundle more professional services into the per diem rate, we captured historical patterns of treatment and staffing during the base year. Thus, the partial hospitalization per diem amount is limited to the provider's overhead costs, support staff, and the services of clinical social workers and occupational therapists, whose professional services are defined as partial hospitalization services. We have amended § 410.43(b) to update the list of services that are not paid as partial hospitalization services.
We are adopting as final our proposal to—
• Establish a per diem payment of $202.19 for the partial hospitalization APC (APC 0033); and
• Limit the payment for outpatient mental health treatment furnished on a day of services to the partial hospitalization APC payment amount.
In addition, we are amending § 424.24(e) to establish requirements for physician recertification for partial hospitalization services.
In our proposed rule, we assigned payment status indicator “C” to 1,803 codes that represent procedures that our medical advisors and staff determined require inpatient care because of the invasive nature of the procedure, the need for postoperative care, or the underlying physical condition of the patient who would require the surgery. We did not assign these procedures to an APC group, and we proposed to make no payment for these services under the hospital outpatient PPS. Above, in section III.B.1.b of this preamble, we respond to the numerous general comments we received challenging both our classification of various procedures as inpatient procedures and our exclusion of these procedures from the scope of services paid under the hospital outpatient PPS.
After a careful review of comments by our medical advisors and staff, we have assigned to APC groups certain procedures that we had proposed as inpatient only. We made some changes because we were convinced by commenters' arguments that certain procedures are often performed safely in the outpatient setting; others because we believe that the simplest procedure described by the code may be performed safely in the outpatient setting; and yet others because they were related to codes we moved (for example, the radiologic part of an interventional cardiology procedure). The procedures we moved to the outpatient APCs include codes from within the following families: Explorations of penetrating wounds; repairs of some cranial and facial fractures; planned tracheostomies; diagnostic thoracoscopies; some insertion/removal/replacement of pacemakers, pulse generators, electrodes and cardioverter-defibrillators; embolectomies and thrombectomies; transluminal balloon angioplasty and peripheral atherectomy; transcatheter therapies; bone marrow transplantation; gastrostomies; percutaneous nephrostolithotomy; surgical laparoscopies, including cholecystectomies; ovarian biopsies; and surgeries on the orbit. Although we are moving these procedures into APC groups and they can receive outpatient payment, we emphasize that we expect only the simplest and least resource intensive procedures of each type to be performed in the outpatient setting. For example, several codes could be used to describe initial insertion of a pacemaker or replacement of the pacemaker or its electrodes. We believe most initial pacemaker insertions are performed on an inpatient basis, so codes billed in this range are most likely to be for replacement of a pacemaker, which requires fewer facility resources.
Because of the risk involved with invasive cardiovascular procedures, including angioplasty and atherectomy, we are placing an additional requirement on their performance that we do not think is necessary with other procedures. That is, Medicare will pay for these procedures only in those settings in which the patient can immediately be placed on cardiopulmonary bypass in the event of a complication such as perforation of a coronary artery, which would require an immediate thoracotomy.
When our medical advisors and staff disagreed with the recommendation of commenters to reclassify a particular procedure, they based their decision to retain a procedure as “inpatient only” on several considerations. In general terms, as stated above, we define inpatient procedures as those that require inpatient care because of the invasive nature of the procedure, the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged, or the underlying physical condition of the patient who would require the surgery. In other words, inpatient procedures are those that, in the judgment of our medical advisors and staff, would not be safe, appropriate, or considered to fall within the boundaries of acceptable medical practice if they were performed on other than a hospital inpatient basis.
Among the procedures cited by commenters that we believe should remain as “inpatient only” are: Breast reconstruction using myocutaneous flaps; radical resections of tumors of the mandible; open treatment of certain craniofacial fractures; osteotomies of the femur and tibia; sinus endoscopy with repair of cerebrospinal fluid leaks; carinal reconstruction; surgical thoracoscopies; pacemaker procedures by thoracotomy; certain thromboendarterectomies; excision of mediastinal cysts and tumors; excisions of stomach tumors; enterostomies; hepatotomies; ureterotomies and ureteral endoscopies through ureterotomies; transcranial approaches to the orbit; and laminectomies. Our medical advisors and staff, as well as consulting physicians, believe these procedures are too invasive (for example, thoracotomies), too extensive (for example, breast reconstruction with myocutaneous flaps), or too risky by virtue of proximity to major organs (for example, repairs of spinal fluid leaks and carinal reconstruction) to be performed on an outpatient basis. The procedures that we exclude from outpatient payment because we believe they should be performed on an inpatient basis are listed in Addendum E. This list represents national Medicare policy and is binding on fiscal intermediaries and peer review organizations as well as on hospitals and Medicare participating ASCs. Note, however, that services included in outpatient PPS and assigned to an APC may be performed on an inpatient basis when the patient's condition warrants inpatient admission.
In the future, as part of our annual update process, we will be working with professional societies and hospital associations, as well as with the expert outside advisory panel that we will be convening as required by new section 1833(t)(9)(A) of the Act, to reevaluate procedures on the “inpatient only” list and we will propose to move procedures to the outpatient setting whenever we determine it to be appropriate. For example, a decreasing length of inpatient stay for a procedure may signal that it is appropriate for consideration for payment under the outpatient PPS. If hospitals find that surgeons are discharging patients successfully on the day of surgery, they should bring this to our attention as well, because hospitals may become aware of this trend before our payment data disclose it. Thus, assignment of a “C” payment status indicator in this final rule should not be considered as a permanent or irrevocable designation.
Under the hospital outpatient PPS, we will not make payment for procedures that are designated as “inpatient only.” We have, however, revised the list of procedures that are designated as “inpatient only” based on comments. (See Addendum E.)
Section 1833(t)(2)(A) of the Act requires the Secretary to develop a classification system for covered outpatient services. Within that classification system, the Secretary is given the authority under section 1833(t)(2)(B) of the Act to establish groups of covered services so that the services within each group are comparable clinically and with respect to the use of resources. In the proposed rule, we explain how we constructed the APC groups that are the basis for ratesetting under the hospital outpatient PPS.
Our medical advisors and staff used the ambulatory patient groups (APGs) developed by 3M-Health Information Systems as a starting point for the APC groups, but we modified the APGs to take into account 1996 outpatient claims data, data collected in a 1994 survey of ambulatory surgical center (ASC) costs and charges, data collected in 1995 and 1996 to establish resource-based practice expense relative values under the Medicare physician fee schedule, and comments offered by a broad range of professional and trade societies and associations. For a more detailed discussion of this process, see section V.B of the proposed rule (63 FR 47561).
In the proposed rule, we invited comments on the composition of the APC groups, and we requested that commenters support their recommendations for changes with resource cost data and clinical arguments. We received a large number of comments on our proposed grouping of individual procedures and services. The most common comment was that the APC groups generally lacked consistency in terms of clinical characteristics and resource utilization. Below, in section III.C.6.d of this preamble, we address recommendations from commenters that specific HCPCS codes be assigned to a group other than the one we proposed. In addition to reviewing the APC groups that were the subject of comments, our medical advisors and staff reviewed every APC group to take into account the effect across all related groups of commenters' recommended changes.
In determining whether or not to accept a recommended change, we focused on five criteria that are fundamental to the definition of a group within the APC system. The decision to accept or decline a modification to an APC group was measured by whether the change enhanced, detracted from, or had no effect on the integrity of an APC group within the context of these five criteria. The five criteria are as follows:
• Resource Homogeneity
The amount and type of facility resources, for example, operating room time, medical surgical supplies, and equipment, that are used to furnish or perform the individual procedures or services within each APC should be homogeneous. That is, the resources used are relatively constant across all procedures or services even though resource use may vary somewhat among individual patients. If the procedures within an APC require widely varying resources, it would be difficult to develop equitable payment rates. Aggregated payments to a facility that performed a disproportionate share of either the expensive or inexpensive procedures within an APC would be distorted. Further, the facility might be encouraged to furnish only the less costly procedures within the APC, resulting in a potential access problem for the more costly services.
It is important to note that procedures within an individual HCPCS code can vary widely in resource use. The coefficient of variation of cost for the procedures within one HCPCS code can be as high as the overall coefficient of variation across all the HCPCS codes that comprise an APC group. Thus, a significant amount of the variability in resource use within some APC groups can be attributed to the variability of resources within individual HCPCS codes. Nevertheless, if resource use is reasonably homogeneous among the HCPCS codes within an APC group, the average pattern of resource use among a group of cases in an APC can be accurately predicted. In section III.C.6.c, below, we discuss the BBRA 1999 provision that sets limits on the variation in resource cost within an APC.
• Clinical Homogeneity
The definition of each APC group should be “clinically meaningful,” that is, the procedures or services included within the APC group relate generally to a common organ system or etiology, have the same degree of extensiveness, and utilize the same method of treatment, for example, surgical, endoscopic, etc. The definition of clinical meaningfulness is, of course, dependent on the goal of the classification system. For APCs, the definition of clinical meaningfulness relates to the medical rationale for differences in resource use. If, on the other hand, classifying patient prognosis were the goal, the definition of patient characteristics that were clinically meaningful might be different.
• Provider Concentration
We considered the degree of provider concentration associated with the individual services that comprise the APC. If a particular service is offered only in a limited number of hospitals, then the impact of payment for the service is concentrated in a subset of hospitals. Therefore, it is particularly important to have an accurate payment level for services with a high degree of provider concentration. Conversely, the accuracy of payment levels for services that are routinely offered by most hospitals does not bias the payment system against any subset of hospitals. Thus, differences in the resource requirements for individual services within an APC are of less significance if all the services within the APC are routinely offered by most hospitals because the impact of the difference should average out at the hospital level.
• Frequency of Service
Unless we found a high degree of provider concentration, we avoided creating separate APC groups for
Some procedures, such as craniotomies, are clearly inpatient procedures, and are rarely performed in an outpatient setting. However, there are some procedures that, while they are normally performed on an inpatient basis, can also be safely performed on an outpatient basis. The performance of those procedures on an outpatient basis is infrequent and is limited to the simplest cases. Therefore, when we included these procedures in APC groups, we assumed a level of resource use that would apply only to the simplest cases rather than that typical of more complex cases that would be performed on an inpatient basis.
• Minimal Opportunities for Upcoding and Code Fragmentation
The APC system is intended to discourage using a code in a higher paying group to define a case. That is, putting two related codes, such as the codes for excising a lesion of 1.1 cm and one of 1.0 cm, in different APC groups may create an incentive to exaggerate the size of the lesions in order to justify the incrementally higher payment. APC groups based on subtle distinctions would be susceptible to this kind of upcoding. Therefore, we kept the APC groups as broad and inclusive as possible without sacrificing resource or clinical homogeneity.
In general, HCPCS codes that are nonspecific (such as 20999, “unlisted procedure, musculoskeletal system, general”) were assigned to the lowest paying APC that was consistent with the clinical characteristics of the service. In the case of 20999, the codes to which it is related are in the range 20000-20979. The APCs to which they group range from 0004, with a payment rate of $89.22, to 0050, with a payment rate of $1,024.53. We placed 20999 in the lowest paying, related group, 0004.
Section 201(g) of the BBRA 1999 amends section 1833(t)(2) of the Act to limit the variation in resource use among the procedures or services within an APC group. Specifically, section 1833(t)(2) of the Act now provides that the items and services within a group cannot be considered comparable with respect to the use of resources if the highest cost item or service within a group is more than 2 times greater than the lowest cost item or service within the same group. The Secretary is to use either the mean or median cost of the item or service. We are using the median cost because we have continued to set the relative payment weights for each APC based on median hospital costs in this final rule. (See the discussion in section III.E of this preamble.)
Section 1833(t)(2) of the Act as amended also allows the Secretary to make exceptions to this limit on the variation of costs within each group in unusual cases such as low volume items and services, although we may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act. See the discussion of the classification of orphan drugs in section II.D of this preamble and the discussion of APC groups that we excepted from the “2 times” limit in section III.C.6.e.
We applied the limit on variation on median costs required by section 201(g) to the revised APC groups. (See section C.6.d, below.) As a result of our analysis of the array of median costs within the revised APC groups, we had to split some otherwise clinically homogeneous APC groups into smaller groups. We are concerned that this further subdivision of groups may create vulnerabilities for upcoding, which conflicts with one of the five criteria described above that we used to evaluate the construction of the APC groups. We will be examining the extent to which the APC reorganization due to the “2 times” rule results in upcoding.
In this section, we summarize and explain our response to comments on individual or serial APCs. We use the APC number that appeared in the proposed rule to identify a group that was changed. In most instances, we moved a HCPCS code from its proposed APC group to a different APC group either in response to comments or to comply with section 1833(t)(2)(C) of the Act. In some cases, we moved codes when a change in response to a comment or the cost variation limit resulted in a grouping that seriously compromised one of the criteria we used to evaluate changes recommended by commenters. Because we made so many changes in the APC groups, we renumbered all the groups and, in many cases, renamed groups. In our response to comments in connection with an APC, the final designation for a HCPCS code corresponds to the renumbered APC group found in the addenda.
Although we received no comments on proposed APC group 131, based on internal review of this APC, we moved CPT code 11976, Removal, implantable contraceptive capsules, to final APC 019 because this procedure represents an excision rather than an incision. We divided proposed APC 131 into final
In the final excision/biopsy APC groups, we endeavored to make distinctions based on the location and size of the excision. For example, excisions of malignant lesions from the face, ears, eyelids, nose, lips greater than 4 cm were placed in an APC requiring more resource use than excisions of malignant lesions from the trunk, arms or legs greater than 4 cm because “functionality” is of greater importance when the site is the face, ears, eyelids, nose, or lips. We moved excisions involving the eye to ophthalmic procedure APCs. We did not make grouping distinctions between benign and malignant lesions of the same size and location because resource use for both types is similar.
We moved benign and malignant excisions larger than 2 cm to final APC group 0020 because these excisions require more resources than, for example, excisions smaller than 1 cm.
We moved CPT code 20220, superficial biopsy of bone (
As noted above, we classified two debridement procedures (CPT codes 11043 and 11044) to final APC groups 0016 and 0017, respectively.
We also moved seven codes from proposed APC 162 to the ophthalmic APC groups.
Although we did not receive comments about this APC group, our medical advisors and staff determined that treatment of closed fractures
Although we did not receive specific recommendations for these APCs, our medical advisors and staff determined that the procedures in these groups are more similar to ENT procedures from a clinical and resource use perspective. Therefore, we moved all of the procedures in these proposed APC groups to the final APCs 0251 through 0256, the ENT APCs.
We considered including the procedures in proposed APC group 286 with the other arthroscopic procedures in final APC 0041 because they are so infrequently performed in an outpatient setting for Medicare beneficiaries. However, the resources required to perform the procedures in proposed
We received numerous comments about the composition of the four proposed ENT APC groups. After careful review of the comments, our medical advisors and staff recognized the need for a major reorganization of the groups we proposed for ENT procedures. The outcome of our review was the creation of five final APC groups for ENT procedures: APC groups 0251, 0252, 0253, 0254, and 0256. We moved a large number of bone procedures involving the facial and ENT areas from musculoskeletal groups to ENT groups. We transferred some codes out of the ENT groups altogether, and we shifted codes among the five final ENT groups to comply with the BBRA 1999 “two times” requirement. We respond to recommendations regarding specific codes below.
We also moved the tracheostomy emergency procedures to final APC 0254.
We moved several other procedures such as CPT code 41870, Periodontal mucosal grafting, to final APC 0253, a group with higher cost procedures.
We moved several abscess drainage procedures such as CPT code 41800, Drainage of abscess, cyst, hematoma from dentoalveolar structures, to final APC group 0251 because of their relatively low cost.
We moved a large number of procedures such as CPT code 42335, Sialolithotomy; submandibular (submaxillary), complicated, intraoral from original APC 313 to final APC 0253 to reflect a similarity of resource use. In terms of resource use, CPT code 30115, Excision, nasal polyp(s), extensive, is more similar to CPT code 42300, Drainage of abscess, parotid, simple, than it is to CPT 42410, Excision of parotid tumor or parotid gland; lateral lobe without nerve dissection.
We shifted CPT code 21040, Excision of benign cyst or tumor of mandible, from the musculoskeletal group to final APC 0253 with other ENT procedures.
We did, however, move CPT codes 30999 and 42999 for unlisted procedures to final APC 0251 and 0252, respectively, to be consistent with our policy of placing unlisted codes in the lowest paid related group.
Based on our cost data, our medical advisors and staff determined that the codes in these proposed APC groups should be assigned status indicator “N,” which designates incidental services whose costs are packaged into the APC payment rate. Injection procedures themselves are low cost but, more importantly, they are an integral portion of another procedure. The needle and catheter placement are typically an integral portion of interventional radiology procedures. An exception was made for CPT code 36420, cutdown on a child under age one, which was placed in final APC 0032, to recognize its infrequent use but high median cost.
A major association representing community cancer centers stated that our data for stem cell harvesting claims (CPT 38231) include a range of costs so
Some commenters stated that the proposed payment rate was not sufficient for transfusion services if the rate was supposed to pay for both the blood product and the transfusion procedure, because even though outpatient transfusion services are relatively simple and low-cost, they are associated with a costly blood product that is far more variable.
Commenters expressed concern that the proposed payment rate for APC 369 was insufficient to pay for extracorporeal photopheresis (CPT 36522), whose actual cost is approximately $1,000, and would have an especially negative impact for patients with cutaneous T-cell lymphoma.
A major organization recommended that we separate payment for a service from payment for the blood product associated with that service. The same commenter also recommends separate payment for infusible blood-derived drugs, and that payment for transfusable blood products be based on costs. This organization recommends that APC 369 be split into several APCs because payment for services such as transfusion services, therapeutic apheresis, stem cell collection, Staph column pheresis, and others are distinct, and deserve separate APC payments. The same commenter also recommended that we accelerate the HCPCS coding process for blood-related products.
We reassigned the different types of sigmoidoscopy procedures into two groups, final APC 0146 and final APC 0147. The procedures within each group are similar both clinically and in terms of resource use. We moved HCPCS code G0104, CA screening; flexible sigmoidoscopy, to its own group, final APC 0159, because it is preventive rather than diagnostic or therapeutic in nature.
To conform with the BBRA 1999 “two times” requirement, our medical advisors and staff reclassified procedures in the proposed APC groups resulting in final APC groups 0148 and 0149. We believe the final APC groups are more consistent both clinically and in terms of resource use.
Although the AMA revised the coding of laparoscopic procedures in CPT 2000, in order to set rates for the laparoscopy APC groups, we used the codes that were in our database of 1996 claims. That is, we moved CPT codes 56362 and 56363 to the Level I laparoscopic group, final APC group 0130, because the resources used in connection with these procedures are less compared to the Level II procedures generally. For example, CPT code 56362, Laparoscopy with guided transhepatic cholangiography, primarily involves the laparoscopy without any associated removal of tissue. Conversely, we shifted CPT codes 56303 and 56304 from Level I to Level II (final APC 0131). CPT code 56303, Laparoscopy, surgical, with fulguration or excision of lesions of the ovary, pelvic viscera, or peritoneal surface, requires more resources than, for example, CPT code 56300, Diagnostic laparoscopy, the most common laparoscopic procedure within Level I, final APC group 0130.
The new Level III laparoscopy group, final APC group 0132, consists largely of laparoscopic procedures that we had proposed to classify as inpatient. In addition, we moved CPT code 56312, Laparoscopy, surgical; with bilateral total pelvic lymphadenectomy, and CPT code 56313, Laparoscopy, surgical; with bilateral total pelvic lymphadenectomy and peri-aortic lymph node sampling (biopsy), single or multiple, to final APC group 0132 because of the extensive resources and time involved in performing these procedures. Refer to Current Procedural Terminology 2000, published by the American Medical Association, for a summary of coding
Another commenter stated that vagus nerve stimulation, approved by the FDA in 1997, which can sometimes be performed as an outpatient procedure, would be inappropriately paid under our PPS. The commenter stated that the reported cost for the device is $6,900 for the implantable neurostimulator pulse generator and $2,030 for the implantable vagus nerve stimulator leads. A manufacturer of this new system, which is used in treating intractable epilepsy, also expressed concern that the proposed PPS will underpay hospitals for new technologies such as its system and deny beneficiaries access to them.
Ophthalmic Procedures: We received numerous comments concerning the APC groups proposed for eye procedures. Based on their analysis of these comments and recommended changes, a review of our data, and consideration of the limit on variation within a group required by section 201(g) of the BBRA 1999, our medical advisors and staff have significantly restructured the ophthalmic APC groups. Eye procedures and services are assigned to final APC groups 0230 through 0248.
We assigned to final APC groups 0230 and 0231 the procedures in proposed APC groups 930, 931, and 932 in addition to codes from proposed APC groups 681, 682, and 683 that are either tests or minor ophthalmologic procedures requiring relatively low resource use.
Based on our data, the median cost for final APC group 0245 (cataract extraction without lens insert) was slightly higher than that for final APC group 0246 (cataract extraction with lens insertion). We attribute the discrepancy to poor coding, and we have increased the payment rate for APC group 0246 to equal the payment rate for APC group 0245. Proper coding in the future should result in better differentiated costs between these two groups.
To be consistent with the limit on cost variation required by section 201(g) of the BBRA 1999, we divided the procedures in proposed APC 736 into final APC groups 0276 and 0277.
To be consistent with the limit on cost variation required by section 201(g) of the BBRA 1999, we split the procedures in proposed APC 738 into final APC groups 0296 and 0297.
Although there is a range of sites for the procedures in proposed APC group 749, as we explain above in our response to the comments submitted in connection with proposed APC 747, we are keeping this group intact in final APC group 0268 because the base procedure, ultrasonography, is the same for all procedures. Also, the procedures in final APC group 0268 are comparable with respect to the use of resources in accordance with the “two times” limit on cost variation.
We renamed the remaining group of codes as final APC 0311, Radiation Physics Services. The codes specific to radiation physics that we classified in this APC are CPT code 77336, Continuing medical physics consultation, including assessment of treatment parameters, quality assurance of dose delivery, and review of patient treatment documentation in support of the radiation oncologist, reported per week of therapy; CPT code 77370, Special medical radiation physics
We created final APC group 0303, which consists of the following three codes: CPT code 77332, Unlisted procedure, therapeutic radiology clinical treatment planning; CPT code 77333, Treatment devices, design and construction; intermediate (multiple blocks, stents, bite blocks, special bolus); and, CPT code 77334, Treatment devices, design and construction; complex (irregular blocks, special shields, compensators, wedges, molds or casts). We created final APC 0303 because the resources needed for device construction are unique. We decided to put these three codes together in one group rather than assigning each to its own individual group because we could make no clear cost distinctions among the three codes and because we expect that facilities do not specialize in one type of device over another, but rather construct all of the types of devices encompassed within the three codes.
We created final APC group 0310, to which we assigned CPT code 77295, Therapeutic radiology simulation-aided field setting, three-dimensional. We assigned CPT code 77295 to its own individual APC group because it requires significantly greater resource consumption than the procedures in either final APC group 0304 or final APC group 0305.
We assigned the codes remaining in proposed APC groups 751 and 752 to final APC groups 0304 and 0305. Both APC groups 0304 and 0305 are comparable with respect to the use of resources in accordance with the “two times” requirement set by the BBRA 1999.
Based on commenters' suggestions, a review of our data, and the BBRA 1999 “two times” requirement, we have classified the procedures in proposed APC 759 in final APC 0312, Radioelement Applications, and final APC 0313, Brachytherapy. APC 0313 consists of CPT code 77781, Remote afterloading high intensity brachytherapy; 1-4 source positions or catheters; CPT code 77782, Remote afterloading high intensity brachytherapy; 5-8 source positions or catheters; CPT code 77783, Remote afterloading high intensity brachytherapy; 9-12 source positions or catheters; CPT code 77784, Remote afterloading high intensity brachytherapy; over 12 source positions or catheters; and, CPT code 77799, Unlisted procedure, clinical brachytherapy. Because these
We moved CPT code 77750, Infusion or instillation of radioelement solution, to final APC 301, Level II Radiation Therapy, and CPT code 77789, Surface application of radioelement, were moved to final APC 300, Level I Radiation Therapy. The remaining procedures from proposed APC 759 constitute final APC 312, Radioelement Applications. The procedures in final APC group 312 and in final APC group 313 are comparable with respect to the use of resources in accordance with the “two times” limit on cost variation.
Next, we reconfigured the nuclear medicine APC groups based on the resources required for the procedures themselves, exclusive of costly radiopharmaceuticals. We took into account the fact that SPECT equipment, which costs significantly more than the non-SPECT equipment that was initially used most frequently for planar medicine, is now commonly used to conduct planar studies. As a final step, we further reorganized the groups to satisfy the requirement set by the BBRA 1999 “two times” requirement, resulting in final APC groups 0286, 0290, 0291, 0292, 0294, and 0295.
However, in those instances where there is a code for the comprehensive service and separate codes for services that are inherent components of the comprehensive service, the Correct Coding Initiative (CCI) edits, which we are incorporating into the hospital outpatient PPS claims processing system, will address this concern. The CCI edits have been in place in the Part B claims processing system since January 1996. These edits detect when codes representing component services are reported with the code for the more comprehensive service. For example, there is an edit that prohibits the payment of CPT code 93875, a doppler study of the extracranial arteries when reported with CPT code 93880, the duplex scan of the extracranial arteries.
We created a third APC group for the nerve and muscle test codes, and we split the codes in proposed APCs 981 and 982 among final APC groups 0215, 0216, and 0217 to ensure comparability of resources within each of the three nerve and muscle test APC groups in accordance with the “two times” requirement set by section 201(g) of the BBRA 1999.
Note that we moved CPT-based chemotherapy infusion codes into the “E” (noncovered) category because HCPCS “Q” codes for these services will be used to identify chemotherapy infusions. Hospitals had been instructed in the past not to bill using the CPT codes.
We created these three new APC groups to accommodate atherectomy and angioplasty procedures that we originally proposed to classify as inpatient only. We discuss in section III.C.5 our response to commenters' concerns about our proposing to designate certain procedures as “inpatient only” and our final decision to change the status of these atherectomy and angioplasty procedures.
We proposed to assign the procedures in these new APC groups a payment status indicator “N” as incidental services for which payment is packaged into the APC rate for another service or procedure. However, we determined
As we note above, section 201(g) of BBRA 1999 amends section 1833(t)(2) of the Act to define what constitutes comparable use of resources among the procedures or services within an ambulatory payment classification group under the hospital outpatient PPS. The standard set by section 1833(t)(2) of the Act is that the items and services within a group cannot be considered comparable with respect to the use of resources if the highest median (elected by the Secretary, as opposed to the mean) cost item or service within a group is more than 2 times greater than the lowest median cost item or service within the same group (the “two-times” requirement).
Section 1833(t)(2) of the Act allows the Secretary to make exceptions to the “two-times” requirement in unusual cases, such as low volume items and services, although the Secretary may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act. As we explain in the preceding section of this preamble, after we had modified the composition of the APC groups based on the recommendations of commenters, we made numerous additional changes to the APC groups to conform with the BBRA 1999 “two times” requirement. In the resulting groups, we found certain anomalies that were irreconcilable with the principles underlying formation of the APC groups. After carefully evaluating the various combinations resulting from further subdividing groups or reassigning codes to other groups to resolve the anomalies, and after reviewing our data, we decided to maintain the composition of certain APC groups, as exceptions to the “two times” requirement. We based exceptions on factors such as low procedure volume, suspect or incomplete cost data, concerns about inaccurate or incorrect coding, or compelling clinical arguments. We believe that as hospitals gain experience under the hospital outpatient PPS, and as they refine their coding of services, a number of the apparent anomalies within the groups that we are treating as exceptions to the “two times” will be resolved.
Below we list the APC groups that are exceptions to the “two times” requirement, and our reasons for the exception. We use the final APC number to identify the group.
We are retaining CPT code 56501 in final APC group 0016, even though its median cost exceeds the “two times limit.” We believe the higher costs that are reflected in the data are the result of incorrect coding. The descriptor for CPT code 56501 defines the procedure as the simple destruction of skin and superficial subcutaneous tissues. In the judgment of our medical advisors, costs associated with simple destruction of skin and superficial subcutaneous tissues are typically within the range of costs associated with the other procedures in final APC group 0016, and the median cost that our data attribute to CPT code 56501 is higher than the code description warrants.
Although the range of costs for procedures in final APC group 0030 exceeds the “two times limit,” we believe that only the simplest breast procedures will be done in the outpatient setting. Most of the procedures with median costs over $1000 used observation services in order to provide an overnight stay. We expect these cases to revert to the more appropriate inpatient setting.
The codes in final APC group 0058 are the simpler casting, splinting, and strapping procedures. Costs associated with the more resource-intensive procedures in final APC group 0059 are fairly uniform, but the median costs of procedures in final APC group 0058 vary widely. We are excepting final APC group 0058 from the “two times limit” until we can review the data for the first year of the outpatient PPS.
Taken collectively, the codes in final APC group 0060 are low in volume and erratically priced. For example, although the number of areas treated increases within the range of CPT codes 98925 through 98929, suggesting progressively increasing resource utilization, our data show median costs associated with the codes in the range 98925-98929 as $38, $11, $16, $17, and $19, respectively. Although costs associated with treating 9 to 10 body regions might not be 5 to 10 times greater than treating one or two regions, we would still expect costs for the more extensive procedures to be higher than those for the less extensive procedures, and certainly not lower as suggested by our data. Nor do we expect a hospital to specialize in treating more or fewer body areas. Therefore, the median payment set for final APC 0060 should average out, providing adequate payment for any number of body areas treated.
These codes all represent respiratory treatment and support within the outpatient setting. Their costs should be roughly the same, even though our data suggest otherwise. We are excepting final APC group 0079 from the “two times limit” at this time, pending the collection of more conclusive cost data.
The data for CPT code 93524 reflect costs that are lower than we would expect. We can find no apparent explanation for the wide variation in costs among the cardiac catheterization codes, although we suspect that the accuracy of the chargemaster system, when assigning charges in other than the surgical suite, may be problematic. We expect costs to even out once hospitals decide which cases may be handled on an outpatient basis without requiring an overnight stay.
We are excepting final APC group 0081 from the “two times limit” because of the low volume of cases for the codes in the group. For some of the codes in this group, the data reflect lower than expected median costs, which we attribute to low volume and to miscoding, which would account for the erratic sequences of costs found in our data.
We believe the median costs for CPT codes 36530 and 36810 are aberrant. These codes are very similar clinically to the other codes in APC 0093, and we would expect their costs to be similar. We believe low volume may account for the variability in cost.
We believe the median costs for CPT codes 92953 and 31500 are aberrant, perhaps due to misuse of the codes. Therefore, we are excepting this APC group from the “two times limit,” until we collect and analyze more accurate data once the hospital outpatient PPS is implemented.
The two CPT codes that comprise this group are essentially the same procedure, one performed for diagnostic reasons and the other therapeutic. We suspect the disparity in median costs is attributable to the much higher volume of diagnostic spinal taps. Therefore, we are excepting this APC group from the “two times limit,” until we collect and analyze more accurate data once the hospital outpatient PPS is implemented.
We are excepting final APC group 233 from the “two times limit” because many of the codes in this APC are low volume and the coding seems erratic. For example, CPT designates a number of codes that are in final APC group 0233 as “relatively small” surgical procedures, which suggests that miscoding may have resulted in inflated cost data.
A combination of low volume and unlisted codes obscures the fact that this APC represents the least intense ENT procedures. Because there are so many ENT codes, consistent agreement on what the codes represent may be difficult to achieve. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate data under outpatient PPS.
In the judgment of our medical advisors, the median costs for CPT codes 74740 and 76102 are aberrant. These procedures would be underpaid if they were paid separately and on the basis of what our data show to be their median cost. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate cost data under outpatient PPS.
In the judgment of our medical advisors, the median costs for CPT codes 70010 and 70015 are aberrant. These codes would be underpaid if they were moved to their own APC and paid on the basis of their median cost. All codes in this APC should cluster around the same cost. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate cost data under outpatient PPS.
We believe the median costs for the codes at the low end of this APC may be inaccurate, because, clinically, these codes are homogeneous. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate cost data under outpatient PPS.
We are retaining CPT code 77470 in final APC group 302, because the median cost seems low for the code description, possibly because this code may have been billed improperly in the past. We are also uncertain of the appropriate median cost of CPT code 61793, because we have been told that CPT code 61793 was used for both single-session gamma knife procedures and for each of multiple sessions of treatment with linear accelerators. Therefore, we have created two codes to be used in place of CPT code 61793, in order to collect more reliable data: G0173 (Stereotactic radiosurgery, complete course of therapy in one session), and G0174 (Stereotactic radiosurgery, requiring more than one session).
We will initially pay both codes at the same rate; however, we expect differences in cost would become apparent during the first year or 18 months of the outpatient PPS.
We are retaining CPT code 77370 in final APC group 0311, because we believe a special medical radiation physics consultation (outside the weekly management of a patient) is probably more costly than our data indicate.
We think the variation in costs among the procedures within final APC group 0341 may be the result of erratic coding. Because these services are so similar clinically, we would expect their individual costs to cluster around the median. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate cost data under outpatient PPS.
We attribute the variation in median costs among the procedures within final APC group 0371 to erratic coding. Because these services are so similar clinically, we would expect their individual costs to cluster around the median. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate cost data under outpatient PPS.
With one exception, the codes in final APC group 0373 are billed per hour, so facility costs should all cluster around the median. Therefore, we are excepting this APC group from the “two times limit,” until we collect more accurate cost data under outpatient PPS.
To be consistent with Medicare policy and regulations governing payment for ambulatory surgical services furnished in a physician's office and in an ASC, we proposed under the hospital outpatient PPS to discount payment amounts when more than one procedure is performed during a single operative session or when a surgical procedure is terminated prior to completion. Specifically, we proposed that when more than one surgical procedure with payment status indicator “T” is performed during a single operative session, we would pay the full Medicare payment and the beneficiary would pay the coinsurance for the procedure having the highest payment rate. Fifty percent of the usual Medicare PPS payment amount and beneficiary coinsurance amount would be paid for all other procedures performed during the same operative session to reflect the savings associated with having to prepare the patient only once and the incremental costs associated with anesthesia, operating and recovery room use, and other services required for the second and subsequent procedures.
We also proposed to require hospitals to use modifiers on bills to indicate procedures that are terminated before completion. Modifier -73 (Discontinued Outpatient Procedure Prior to Anesthesia Administration) would identify a procedure that is terminated after the patient has been prepared for surgery, including sedation when provided, and taken to the room where the procedure is to be performed, but before anesthesia is induced (for example, local, regional block(s), or general anesthesia). Modifier-52 (Reduced Services) would be used to indicate a procedure that did not require anesthesia, but was terminated after the patient has been prepared for the procedure, including sedation when provided and taken to the room where the procedure is to be performed. We proposed to pay 50 percent of the usual Medicare PPS payment amount and
Under the hospital outpatient PPS, we will discount payment amounts for surgical procedures when more than one procedure is performed during a single operative session or when a surgical procedure is terminated prior to completion. Parallel discounts will apply to beneficiary coinsurance amounts.
We proposed to price a new item or service that was assigned a new HCPCS code by classifying the new code to whichever existing APC group most closely resembled the item or service in terms of its clinical characteristics and estimated resource use. We proposed to use the group weight, payment rate, and coinsurance amount established for the existing APC to price the new code for at least 2 years to give us an opportunity to collect cost data for the new item or service.
After we published our proposed rule, the Congress expressed concern in the conference report accompanying the BBRA 1999, that our proposed PPS does not adequately address “issues pertaining to the treatment of * * * new technology.” (See H. R. Rep. No. 436 (Part I), 106th Cong., 1st Sess. 868 (1999).) Therefore, the Congress enacted “transitional pass-throughs” in section 201(b) of the BBRA 1999 that provide an additional payment for “new medical devices, drugs, and biologicals” that do not otherwise meet the definition of current orphan drugs, or current cancer therapy drugs and biologicals and brachytherapy, or current radiopharmaceutical drugs and biological products. (See section III.D of this preamble for a discussion of how we are implementing the transitional pass-throughs.)
Commenters further stated that the proposed payment rates for current yet relatively new devices were too low and would favor continued use of older, less effective regimens on the basis of financial pressures rather than on the improved clinical outcomes of newer technology. Some commenters, concerned that we will not update codes or payment rates quickly enough to allow hospitals to pay for new technologies, recommended that we assign HCPCS codes as soon as products become available and alter APC group weights to account for a new technology. These commenters believe that the time lapse between coding updates is a barrier to innovation because it can take several years for a code to be issued for a new surgical technique, and until a new code is issued, facilities must bill for new surgical techniques as “unlisted procedures” resulting in the lowest payment rate for the category of surgery.
One commenter urged that we implement a payment carve-out for certain drug and biological therapies and pay for these items on a reasonable cost basis in order to provide timely patient access to many new pharmaceutical and biotechnology products. The same commenter recommended that if we reject a complete carve-out, then, at a minimum, we should pay for new products introduced after 1996 on a reasonable cost basis for 1 year to adequately compensate companies for developing new and more effective products. Another commenter recommended that we increase the number of APC groups to better reflect services with similar cost structures.
One professional association recommended abandoning the APC group system altogether and pricing services individually because assigning new technology and most costly procedures to APC groups with established lower cost procedures creates a strong disincentive for hospitals to provide new or improved items or services and, in the case of newer, higher cost drugs, encourages hospitals to develop formularies and practice patterns based on financial considerations rather than on the medical value of drugs.
Technologies that commenters cited as being inadequately addressed by the proposed outpatient PPS include new technologies based on molecular genetics; gamma knife procedures used in radiation surgery; and prostatic microwave thermotherapy (transurethral microwave thermotherapy (TUMT)) which a commenter said has a direct cost of $1,918 and, factoring in indirect costs, a total cost of $2,623.
We recognize the concerns raised by commenters about our proposed treatment of new codes under the hospital outpatient PPS. We therefore have developed a process that we believe will allow us to recognize new technologies on an ongoing basis as expeditiously as our systems permit. We expect that this process, which we explain below, combined with the transitional pass-throughs established by section 201(b) of the BBRA 1999 (which we describe in section III.D of this preamble), will provide additional payment for a significant share of new technologies.
In this final rule, we have created special APC groups to accommodate payment for new technology services. In contrast to the other APC groups, the new technology APC groups do not take into account clinical aspects of the services they are to contain, but only their costs. We will assign new items and services that we determine cannot appropriately be placed in existing APC groups for established procedures and services to the new technology APC groups.
The new technology APC groups, which are now largely unpopulated, are already defined in our claims processing system for the outpatient PPS, and we have established payment rates for the APC groups based on the midpoint of ranges of possible costs, for example, the payment amount for a new technology APC group reflecting a range of costs from $300 to $500 would be set at $400. The cost range for the groups reflects current cost distributions, and we reserve the right to modify the ranges as we gain experience under the outpatient PPS. The final APC groups for new technology are groups 0970 through 0984 and cover a range of costs from less than $50 to $6,000. Upon implementation of the outpatient PPS, we will make payment for the following new technology services under the new technology APCs:
The new technology APC groups give us a mechanism for initiating payment at an appropriate level within a relatively short timeframe, and certainly less than the 2 or 3 years that we contemplated in our proposed rule. As in the case of items qualifying for the transitional pass-through payment, placement in a new technology APC will be temporary. After we gain information about actual hospital costs incurred to furnish a new technology service, we will move it to a clinically-related APC group with comparable resource costs. If we cannot move the new technology service to an existing
We ask that interested parties take the following steps to bring to our attention services that they believe merit consideration for pricing using the new technology APC groups. Mail requests for consideration of possible new technology services that have established HCPCS codes to the following address ONLY: PPS New Tech/Pass-Throughs, Division of Practitioner and Ambulatory Care, Mailstop C4-03-06, Health Care Financing Administration, 7500 Security Boulevard, Baltimore, MD 21244-1850.
To be considered, requests MUST include the following information:
• Trade/brand name of item.
• A detailed description of the clinical application of the item, including HCPCS code(s) to identify the procedure(s) with which the item is used.
• Current cost of the item to hospitals (
• If the item is a service, itemize the costs required to perform the procedure,
• If the item requires FDA approval/clearance, submit information that confirms receipt of FDA approval/clearance and the date obtained.
• If the item already has an assigned HCPCS code, include the code and its descriptor in your submission plus a dated copy of the HCPCS code “recommendation application” previously submitted for this item.
• If the item does not have an assigned HCPCS code, follow the procedure discussed, below, for obtaining HCPCS codes and submit a copy of the application with our payment request.
• Name, address, and telephone number of the party making the request.
• Other information as HCFA may require to evaluate specific requests.
We believe some items not yet known to us do not yet have assigned HCPCS codes. We expect to use national HCPCS codes in the hospital outpatient PPS to the greatest extent possible. These codes are established by a well-ordered process that operates on an annual cycle, starting with submission of information by interested parties due by April 1 and leading to announcement of new codes in October of each year. This process is described, and relevant application forms are available, on the following HCFA website: http://www.hcfa.gov/medicare/hcpcs.htm.
Considering the exigencies of implementing a new system, we intend to establish temporary codes in 2000 to permit implementation of additional payments for other eligible items effective beginning October 1, 2000. The process for submitting information will be the same as for national codes.
For new technology services that DO NOT have established HCPCS codes, submit the regular application for a national HCPCS code in accordance with the instructions found on the internet at
Because of staffing and resource limitations, we cannot accept requests by facsimile (FAX) transmission. Because of claims processing systems constraints, a new technology payment rate can only be initiated at the start of a calendar quarter. Since we will update our outpatient PPS quarterly to include new technology additional services, October 1, 2000 is the earliest date that we will implement payment for additional new technology services other than for those items beginning on July 1, 2000. In general, we expect to be able to complete action on requests to assign an item or service to a new technology APC group in about 6 months from the date we receive the request.
In order to be considered for assignment to a new technology APC group, an item or service must meet the following criteria:
• The item or service is one that could not have been billed to the Medicare program in 1996 or, if it was available in 1996, the costs of the item or service could not have been adequately represented in 1996 data.
• The item or service does not qualify for an additional payment under the transitional pass-through provided for by section 1833(t)(6) of the Act, as amended by section 201(b) of the BBRA 1999, and 42 CFR 419.43(e) as a current orphan drug, as a current cancer therapy drug or biological or brachytherapy, as a current radiopharmaceutical drug or biological product, or as a new medical device, drug, or biological.
• The item or service has a HCPCS code. (See section III.D for additional information about obtaining HCPCS codes.)
• The item or service falls within the scope of Medicare benefits under section 1832(a) of the Act.
• The item or service has been determined to be reasonable and necessary in accordance with section 1862(a)(1)(A) of the Act.
We are initiating a method to pay for new technology services that are not addressed by the transitional pass-through provisions of the BBRA 1999.
Section 201(b) of the BBRA 1999 amended section 1833(t) of the Act by adding a new section 1833(t)(6). This provision requires the Secretary to make additional payments to hospitals for a period of 2 to 3 years for specific items. The items designated by the law are the following: current orphan drugs, as designated under section 526 of the Federal Food, Drug, and Cosmetic Act; current drugs, biologic agents, and brachytherapy devices used for treatment of cancer; current radiopharmaceutical drugs and biological products; and new medical devices, drugs, and biologic agents, in instances where the item was not being paid for as a hospital outpatient service as of December 31, 1996, and where the cost of the item is “not insignificant” in relation to the hospital outpatient PPS payment amount. In this context, “current” refers to those items for which hospital outpatient payment is being made on the first date the new PPS is implemented.
Section 1833(t)(6)(C)(i) of the Act sets the additional payment amounts for the drugs and biologicals as the amount by which the amount determined under section 1842(o) of the Act (95 percent of the average wholesale price (AWP)) exceeds the portion of the otherwise applicable hospital outpatient department fee schedule amount that
Section 201(c) of the BBRA amended section 1833(t)(2)(E) of the Act to require that these pass-through payments be made in a budget neutral manner. In accordance with section 1833(t)(7) of the Act, as amended by section 201(i) of the BBRA 1999, these additional payments do not affect the computation of the beneficiary coinsurance amount.
Implementation of this pass-through provision requires us to—
• Identify eligible pass-through items;
• Designate a Billing Code for each;
• Determine the term “not insignificant” in the context of determining whether an additional payment is appropriate;
• Determine an appropriate cost-to-charge ratio to use to adjust the hospital's charges for a new medical device to cost;
• Determine the portion of the applicable APC that would be associated with the drug, biological or device; and
• Determine the additional payment amount.
As with other provisions of this final rule that reflect implementation of the BBRA 1999, we are soliciting comments on our implementation of the transitional pass-through payments, as set forth below.
Section 1833(t)(6)(A) of the Act establishes definitions and examples of the drugs and biologicals that are candidates for pass-through payments. As indicated above, these drugs and biologicals are characterized as both current and new. Current refers to those drugs and biologicals for which payment is made on the first date the hospital outpatient PPS is implemented, that is, on July 1, 2000. They include the following:
1. Orphan drugs. These are drugs or biologicals that have been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act.
2. Cancer therapy drugs, biologicals, and brachytherapy. These items are those drugs or biologicals that are used in cancer therapy, including (but not limited to) chemotherapeutic agents, antiemetics, hematopoietic growth factors, colony stimulating factors, biological response modifiers, bisphosphonates, and a device of brachytherapy.
3. Radiopharmaceutical drugs and biological products. These are radiopharmaceutical drug or biological products used in nuclear medicine for diagnostic, monitoring, or therapeutic purposes.
A new drug or biological is defined as a product that was not paid as a hospital outpatient service prior to January 1, 1997 and for which the cost is not insignificant in relation to the payment for the APC to which it is assigned. These items are not reflected in the 1996 claims data we are required to use in developing the outpatient PPS. Before payment can be made for these new drugs and biologicals, a determination must be made that these items are reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member as required by section 1862(a)(1)(A) of the Act. Drugs that can be self-administered are not covered under Part B of Medicare (with specific exemptions for certain oral chemotherapeutic agents and antiemetics, blood-clotting factors, immunosuppressives, and erythropoietin for dialysis patients).
Under section 201(b) of the BBRA 1999, for purposes of making pass-through payments, a new or innovative medical device is one for which payment as a hospital outpatient service was not being made as of December 31, 1996 and for which the cost of the device “is not insignificant” in relation to the hospital outpatient department fee schedule amount payable for the service involved. For the purpose of identifying “new medical devices” that may be eligible for pass-through payments, we are excluding equipment, instruments, apparatuses, implements or items that are generally used for diagnostic or therapeutic purposes, that are not implanted or incorporated into a body part, and that are used on more than one patient (that is, are reusable). This material is generally considered to be hospital overhead costs and the depreciation expenses associated with them are reflected in the APC payments. The unit of payment for the outpatient PPS is a service or procedure. Equipment or instrumentation is a method or means of delivering that service. We are not establishing separate APC payments for equipment, instruments, apparatuses, implements, or items because payment for these types of devices is packaged in the APC payment for the service or item with which they are used. However, as we discuss above in section III.C.8, we have created new technology APCs to accommodate new technology services that may be performed using equipment or instrumentation that is capitalized and depreciated and used on more than one patient. An example of a new technology service is CPT code 53850, Transurethral destruction of prostate tissue; by microwave thermotherapy. We have assigned this procedure to new technology APC 0980. (See section III.C.8 of this preamble for further discussion of payment for new technology under the hospital outpatient PPS.)
Section 201(e) of the BBRA 1999 amends section 1833(t)(1)(B) of the Act to include as “covered OPD services” implantable items described in paragraphs (3), (6), or (8) of section 1861(s) of the Act. Paragraph (3) refers to diagnostic tests including diagnostic x-rays, mammographies, laboratory tests, and other diagnostic tests. Paragraph (6) refers to implantable durable medical equipment (DME), and paragraph (8) refers to prosthetic devices that replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care). Implantables are not mentioned specifically in these paragraphs, but we consider a prosthetic device that replaces all or part of an internal body organ that is mentioned in section 1861(s)(8) to be an implantable. The BBRA 1999 Conference Report lists pacemakers, defibrillators, cardiac sensors, venous grafts, drug pumps, stents, neurostimulators, and orthopedic implants, as well as items that come in contact with human tissue during invasive procedures as examples of implantable items.
Implantable items covered under section 201(e) of the BBRA 1999 may be considered eligible for the transitional pass-through payments allowed under
Although we are recognizing the implantable items identified in section 201(e) of the BBRA 1999 for possible pass-through payments, we are not applying the pass-through provision to any DME, orthotics, and prosthetic devices that are not covered under section 201(e) of the BBRA 1999. Rather, we will pay for these items under the DMEPOS fee schedule when the hospital is acting as a supplier.
In summary, we will make pass-through payment for new or innovative medical devices that meet the following criteria:
a. They were not recognized for payment as a hospital outpatient service prior to 1997.
b. They have been approved/cleared for use by the FDA.
c. They are determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part, as required by section 1862(a)(1)(A) of the Act. We recognize that some investigational devices are refinements of existing technologies or replications of existing technologies and may be considered reasonable and necessary. We will consider devices for coverage under the outpatient PPS if they have received an FDA investigational device exemption (IDE) and are classified by the FDA as Category B devices. (See §§ 405.203 to 405.215.) However, in accordance with § 405.209, payment for a nonexperimental investigational device “is based on, and may not exceed, the amount that would have been paid for a currently used device serving the same medical purpose that has been approved or cleared for marketing by the FDA.”
d. They are an integral and subordinate part of the procedure performed, are used for one patient only, are surgically implanted or inserted, and remain with that patient after the patient is released from the hospital outpatient department.
e. The associated cost is not insignificant in relation to the APC payment for the service in which the innovative medical equipment is packaged. (See section III.D.4 below for the definition of “not insignificant.”)
f. They are not equipment, instruments, apparatuses, implements, or such items for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (HCFA Pub. 15-1). (As indicated above, these costs are considered overhead expenses that have been factored into the APC payment.)
g. They are not materials and supplies such as sutures, clips, or customized surgical kits furnished incident to a service or procedure.
h. They are not materials such as biologicals or synthetics that may be used to replace human skin.
Section 1833(t)(6)(A)(iv)(II) of the Act, as added by section 201(b) of the BBRA 1999 provides that the transitional pass-throughs apply to new drugs, biologicals, and devices whose cost is not insignificant in relation to the hospital outpatient PPS payment amount. Section 1833(t)(6)(C) defines the additional payment as the difference between an amount specified by the law and the portion of the applicable fee schedule amount determined to be associated with the item. The objective of this section is to prevent the hospital outpatient PPS from creating disincentives for the diffusion of valuable new technology by initially paying a rate significantly below the costs of these items. We believe that the “not insignificant” criterion was included in recognition that: (1) The costs of some new technologies would not be large enough relative to the fee schedule amount to provide disincentives for their use in the short run; and (2) that an excessive number of pass-through items could place a substantial burden on the claims processing systems of both HCFA and individual hospitals in a way that could hamper the rapid processing of pass-through payments for those items that would be significantly more costly than the applicable fee schedule amount. Therefore, in order to be consistent with the objectives of this section, we are establishing the following criteria for determining whether the costs of drugs, biologicals, and devices are “not insignificant” relative to the hospital outpatient department fee schedule amount:
(1) Its expected reasonable cost exceeds 25 percent of the applicable fee schedule amount for the associated service.
(2) The expected reasonable cost of the new drug, biological, or device must exceed the portion of the fee schedule amount determined to be associated with the drug, biological, or device by 25 percent.
(3) The difference between the expected, reasonable cost of the item and the portion of the hospital outpatient department fee schedule amount determined to be associated with the item exceed 10 percent of the applicable hospital outpatient department fee schedule amount.
The following illustrates the application of these three criteria.
1. (a) Multiply the fee schedule amount for APC 0001 by 25 percent
(b) Compare the reasonable cost for ZZ to the product derived in Step 1
Finding: The first criterion is met.
2. (a) Multiply the portion of the fee schedule amount for APC 0001 that is associated with a device by 25 percent
(b) Subtract the portion of the fee schedule amount for APC 0001 attributable to a device from the reasonable cost for ZZ
(c) Compare the remainder in Step 4 to the product in Step 2(a)
Finding: The second criterion is met.
3. (a) Multiply the fee schedule amount for APC 0001 by 10 percent
(b) Compare the remainder in Step 3 to the product derived in Step 3(a)
Finding: The third criterion is not met. Therefore, new device ZZ is not eligible for transitional pass-through payment.
Section 1833(t)(6)(C)(i) of the Act requires that for drugs, biologicals, and radiopharmaceuticals, the additional payment be determined as the difference between the amount determined under section 1842(o) of the Act (95 percent of AWP) and the portion of the hospital outpatient department fee schedule amount determined by the Secretary to be associated with those items. For devices, the additional payment is the difference between the hospital's charges adjusted to costs and the portion of the applicable hospital outpatient department fee schedule amount associated with the device. Under section 1833(t)(7) of the Act, as added by section 201(i) of the BBRA 1999, the coinsurance amounts for beneficiaries are not affected by pass-through payments.
We will determine, on an item-by-item basis, the amount of the applicable fee schedule amount associated with the relevant drug, biological, or device. To the extent possible, hospital outpatient department claims data will be used to make these estimates. When necessary, external data pertaining to the costs of the drugs, biologicals and devices already included in the fee schedule amounts will be used to make these determinations.
Before January 1, 2002, charges for devices eligible for pass-throughs will be adjusted to cost on each claim by applying the individual hospital's average cost-to-charge ratio across all outpatient departments. The 1996 data do not allow for determination of which revenue center-specific ratios might be used for this purpose. We will examine claims for the latter half of 2000 and for 2001 in order to determine if a revenue center-specific set of cost-to-charge ratios should be used for 2002 and beyond.
A one-time exception to the general methodology described above pertains to current drugs and biologicals that will be eligible for transitional pass-throughs when the PPS is implemented. For this final rule, we revised many APC groups by removing, to the extent possible, many of these drugs and radiopharmaceuticals. Therefore, the payment rates for the APC groups with which these drugs are associated exclude the costs of these drugs and the total amount paid to hospitals for the drugs will be 95 percent of the applicable AWP. In order to be able to determine a coinsurance amount for these drugs, we needed to estimate what portion of this payment would have been included as part of the APC payment amount associated with these drugs and what portion would be the pass-through amount. Using an external survey of hospitals' drug acquisition costs, we determined the APC payment amount for many of these drugs as their average acquisition cost adjusted to year 2000 dollars. Where valid cost data were not available for individual drugs, we applied the following average ratios of acquisition cost to AWP calculated from the survey to determine the fee schedule amount: .68 for drugs with one manufacturer, .61 for multi-source drugs, and .43 multi-source drugs with generic competitors. In either case, the coinsurance amounts were determined as 20 percent of these fee schedule amounts. It is important to note that these estimates do not affect the total payment to hospitals for these drugs (95 percent of AWP).
Because claims data are not available for most items that will be eligible for transitional pass-through payments for 2000 and 2001, it is extremely difficult to project expenditures under this provision. For this reason, and because many eligible items will be added after the system's implementation, we cannot estimate if, and to what extent, these payments would exceed 2.5 percent of total payments in 2000 and 2001. Therefore, there will be no uniform reduction factor applied to these payments during this period.
We have identified a large number of items subject to the transitional pass-through payment through our own data-gathering activities or through comments on the proposed rule. Many of them already have HCPCS codes, and we are taking steps to establish temporary codes for the remaining items. We will make additional payments for these items when the hospital outpatient PPS system is implemented on July 1. A list of the items already known to us is set forth in Addendum K.
Other items potentially eligible for additional pass-through payments may not be known to us at this time. Because of systems limitations, if we do not know about an item, we will not be able to make additional payments for those items beginning on July 1, 2000. However, we will update our outpatient PPS on a quarterly basis beginning October 1, 2000 to add other items that are eligible for pass-through payments. Therefore, implementation of additional payment for any such item must wait until a later release of systems instructions, that is, in October 2000, January 2001 (annual update), or later.
A manufacturer or other interested party who wishes to bring items that may be eligible for additional transitional pass-through payments to our attention should mail requests for consideration of items to the following address ONLY: PPS New Tech/Pass-Throughs, Division of Practitioner and Ambulatory Care, Mailstop C4-03-06, Health Care Financing Administration,
To be considered, requests MUST include the following information:
• Trade/brand name of item.
• A detailed description of the clinical application of the item, including HCPCS code(s) to identify the procedure(s) with which the item is used. If the item replaces or improves upon an existing item, identify the predecessor item by trade/brand name and HCPCS code.
• Current cost of the item to hospitals (
• Date of sale of first unit.
• For drugs, submit the most recent average wholesale price (AWP) of the drug and the date associated with the AWP quote.
• If the item requires FDA approval/clearance, submit information that confirms receipt of FDA approval/clearance and the date obtained.
• If the item already has an assigned HCPCS code, include the code and its descriptor in your submission plus a dated copy of the HCPCS code “recommendation application” previously submitted for this item.
• If the item does not have an assigned HCPCS code, follow the procedure discussed, below, for obtaining HCPCS codes and submit a copy of the application with your payment request.
• Name, address, and telephone number of the party making the request.
• Other information as HCFA may require to evaluate specific requests.
We believe some items not yet known to us do not yet have assigned HCPCS codes. We expect to use national HCPCS codes in the hospital outpatient PPS to the greatest extent possible. These codes are established by a well-ordered process that operates on an annual cycle, starting with submission of information by interested parties due by April 1 and leading to announcement of new codes in October of each year. This process is described, and relevant application forms are available, on the following HCFA website: http://www.hcfa.gov/medicare/hcpcs. htm.
Considering the exigencies of implementing a new system, we intend to establish temporary codes in 2000 to permit implementation of additional payments for other eligible items effective beginning October 1, 2000. The process for submitting information will be the same as for national codes.
For items that might be candidates for additional transitional pass-through payments but that DO NOT have established HCPCS codes, submit the regular application for a national HCPCS code in accordance with the instructions found on the internet at http://www.hcfa.gov/medicare/hcpcs.htm. Send applications for national HCPCS codes to: C. Kaye Riley, HCPCS Coordinator, Health Care Financing Administration, Mailstop C5-08-27, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Because of staffing and resource limitations, we cannot accept requests by facsimile (FAX) transmission.
As indicated in the instructions posted at our website address cited above, the deadline for submission of applications for a national HCPCS code for the CY 2001 cycle is April 1, 2000. The HCPCS process will proceed to assign national codes as warranted, and we expect these codes will be used in the hospital outpatient PPS starting January 1, 2001. Because the coding application will contain information vital to determining a specific item or product's eligibility for pass-through payments, we are requesting that a copy of the application be sent concurrently to ATTN: PPS New Tech/Pass-Throughs at the address shown above.
This year, we plan to implement additional payment for appropriate items on October 1, 2000. Requests submitted to us with appropriate information will be evaluated for payment effective October 1. We will use the same submissions made for national HCPCS codes as the basis for making temporary code assignments. However, a very large volume of requests or systems constraints could affect our ability to achieve this goal.
Any applications for HCPCS codes that are received after April 1 will be retained for the next cycle of the national HCPCS code assignment process starting the following April 1. We will also consider these items for assignment of temporary codes that might take effect in January or later in the next year.
How quickly additional payment for a new item can be implemented will depend on processing and systems constraints; it will in general require at least 6 months and may require as many as 9 or more months. Thus, a submission that we receive in May (which is too late for October implementation) might be assigned a temporary code to be used for implementing additional payments starting the following January.
As previously stated, pass-through payment for each item is temporary. After we obtain information about actual hospital costs incurred to furnish a pass-through item, we will package it into the service with which it is clinically associated.
Section 1833(t)(2)(C) of the Act requires the Secretary to establish relative payment weights for covered hospital outpatient services. That section requires that the weights be developed using data on claims from 1996 and data from the most recent available hospital cost reports. Before enactment of the BBRA 1999, we were required to base the relative payment weights on median hospital costs. Section 201(f) of the BBRA 1999 amended section 1833(t)(2)(ii) of the Act to authorize the Secretary to base the relative payment weights on either the median or mean hospital costs. In constructing the database for the outpatient PPS proposed rule group weights and conversion factor, we used a universe of approximately 98 million calendar year 1996 final action claims for hospital outpatient department services received through June 1997 to match to the most recent hospital cost reports available. We have decided to continue to base the relative payments weights in this final rule on median (as opposed to mean) costs because, among other things, reconstructing our database to evaluate the impact of using mean costs after the BBRA 1999 was
To derive weights based on median hospital costs for services in the hospital outpatient APC groups, we converted billed charges to costs and aggregated them to the procedure or visit level. To accomplish this, we first identified the cost-to-charge ratio that was specific to each hospital's cost centers (“cost center specific cost-to-charge ratios” or CCRs). We then developed a crosswalk to match the hospital's CCRs to revenue centers used on the hospital's 1996 outpatient bills. The CCRs included operating and capital costs but excluded costs associated with direct graduate medical education and allied health education.
To determine the hospital CCRs, the most recent available cost report from each hospital was identified. For the proposed rule, we used cost reports from cost reporting periods beginning on or after October 1, 1994 and before October 1, 1995 (referred to as PPS-12) or earlier. For this final rule, more recent cost reports were available for hospitals. We used cost reports from cost reporting periods beginning on or after October 1, 1996 and before October 1, 1997 (PPS-14) for approximately 94 percent of the hospitals in our database.
If the most recent available cost report for a hospital was one that had been submitted but not settled, we calculated a factor to adjust for the differences that generally exist between settled and “as submitted” cost reports. The adjustment factor was determined by dividing the outpatient department cost-to-charge ratio from the hospital's most recent settled cost report by the outpatient department cost-to-charge ratio from the hospital's “as submitted” cost report for the same period. The resulting ratio was used to adjust each of the CCRs in the hospital's most recent “as submitted” cost report. We repeated this process for every hospital for which the most recent available cost report was a cost report that had not been settled.
The Office of Inspector General (OIG) for DHHS is concerned that the cost reports we are using may reflect some unallowable costs. Therefore, the OIG, in conjunction with HCFA, is proposing to examine the extent to which the cost reports used reflect costs that were inappropriately allowed. If this examination reveals excessive inappropriate costs, we will address this issue in a future proposed rule, or perhaps seek legislation to adjust future payment rates downward.
We next eliminated from the hospital CCR database 258 hospitals that we have identified as having reported charges on their cost reports that were not actual charges (for example, they make uniform charges for all services). These excluded hospitals were Kaiser, New York Health and Hospital Corporation, and all-inclusive rate hospitals. After removing these hospitals, we calculated the geometric mean of the total operating CCRs of hospitals remaining in our CCR database. We identified 58 hospitals whose total operating CCR exceeded the geometric mean by more than 3 standard deviations. These hospitals were also removed from our CCR database.
After assembling and editing our new CCR database, we matched revenue centers from approximately 80 million claims to CCRs of approximately 5,700 hospitals. We excluded from the crosswalk approximately 15 million claims in which the bill type denoted services that would not be covered under the PPS (for example, bill type 72X for dialysis services for patients with ESRD). We also excluded almost 3 million claims from the hospitals that we had removed or trimmed from the hospital CCR database. The table below shows the five cost reporting periods used and the percentage of the cost reports within each PPS period for which we were able to match 1996 claims.
Next, we took the estimated 80 million claims that we had matched with a cost report and separated them into two distinct groups: Single-procedure claims and multiple-procedure claims. Single-procedure claims were those that included only one HCPCS code (other than laboratory and incidentals such as packaged drugs and venipuncture) that could be grouped to an APC. Multiple-procedure claims included more than one HCPCS code that could be mapped to an APC. There were approximately 45.4 million single-procedure claims and 34.6 million multiple-procedure claims.
To calculate median costs for services within an APC, we used only the single-procedure bills. (Of the roughly 45.4 million single-procedure claims, about 24 million were excluded from the conversion process largely because the only HCPCS codes reported on the claims were for laboratory procedures or other outpatient services not paid under the outpatient PPS.) This approach was taken because the information on claims does not enable us to specifically allocate charges or costs for packaged items and services such as anesthesia, recovery room, drugs, or supplies to a particular procedure when more than one significant procedure or medical visit was billed on a claim. Use of the single-procedure bills minimizes the risk of improperly assigning costs to the wrong procedure or visit. Although we used only single-procedure/visit bills to determine APC relative payment weights, we used multiple-procedure bills in the conversion factor and service mix calculations, regressions, and impact analyses.
For each single-procedure claim, we calculated a cost for every billed line item charge by multiplying each revenue center charge by the appropriate hospital-specific CCR. If the appropriate cost center did not exist for a given hospital, we crosswalked the revenue center to a secondary cost center when possible, or to the hospital's overall cost-to-charge ratio for outpatient department services. We excluded from this calculation all charges associated with HCPCS codes previously defined as not paid under this PPS (for example, laboratory, ambulance, and therapy services).
To calculate the per-procedure or per-visit costs, we used the charges shown in the revenue centers that contained items integral to performing the procedure or visit. These included those items that we previously discussed as being subject to our proposed packaging provision. For instance, in calculating the surgical procedure cost, we included charges for the operating room, treatment rooms, recovery, observation, medical and surgical supplies, pharmacy, anesthesia, casts and splints, and donor tissue, bone, and organ. For medical visit cost estimates, we included charges for items such as medical and surgical supplies, drugs, and observation. A complete listing of the revenue centers that we used is shown below in Table 1, Packaged Services by Revenue Center.
We then applied to these cost estimates an adjustment to calibrate the costs to calendar year 1996 for those services in hospitals whose CCRs were calculated using FY 1997 or later cost reports. On average, hospital charges were rising faster than costs in FY 1997. We therefore made this adjustment for the calculation of the weights, as well as for the hospital costs used in the conversion factor and impact model, to ensure that we did not underestimate costs and payments. We based this hospital specific CCR adjustment on the observed change in each hospital's overall CCR (total operating + total capital) from the proposed rule cost report database to the new final rule database. If applicable, we then calculated a monthly rate of change and applied it based on the number of months past 1996 encompassed in a hospital's cost reporting period; if a hospital's period coincided completely within calendar year 1996, no adjustment was made.
After calibrating the costs to calendar year 1996, we standardized costs for geographic wage variation by dividing the labor-related portion of the operating and capital costs for each billed item by the FY 2000 hospital inpatient prospective payment system wage index published in the
The standardized labor-related cost and the nonlabor-related cost component were summed for each billed item to derive the total standardized cost for each procedure or medical visit. Extremely unusual costs that appeared to be errors in the data were trimmed from standardized procedure and visit costs. This trimming methodology is analogous to that used in calculating the DRG weights for the inpatient PPS: eliminate any bills with costs outside of 3 standard deviations from the geometric mean. We used the geometric mean and the associated standard deviation because the distribution of costs more closely resembles a lognormal distribution than a normal distribution: There are no negative costs, and the average cost is greater than the median cost. Use of the geometric mean minimizes the impact of the most unusual bills in the determination of the mean. The geometric mean is calculated by taking the mean of the natural logarithm cost. Because the distribution of the natural logarithms of a set of numbers is more compact than the distribution of the numbers themselves, bills with extreme costs do not appear as extreme as they would if non-logged costs were examined. This ensures that only the most aberrant data will be removed from the calculation.
After trimming the procedure and visit level costs, we mapped each procedure or visit cost to its assigned APC and calculated the median cost for each APC weighted by procedure volume. Using the median APC costs, we calculated the relative payment weights for each APC. We scaled all the relative payment weights to APC 601, a mid-level clinic visit, because it is one of the most frequently performed services. This approach is consistent with that used in developing relative value units for the Medicare physician fee schedule. By assigning APC 601 a relative payment weight of 1.0, hospitals can easily compare the relative relationship of one APC to another. Next, we divided the median cost for each APC by the median cost for a mid-level clinic visit, APC 601, to derive the relative payment weight for each APC.
We do not believe that using single-procedure bills biases the relative cost of any particular procedure. Although patients with more complex healthcare needs might have several procedures performed, hospital charges for an individual procedure would not be greater. Our most significant concern was that distribution of single bill procedures within an APC would not reflect the correct distribution of those procedure on all bills. However, careful statistical analyses demonstrated that the distribution of procedures within an APC group did not differ when single bill procedure frequencies were compared with all bills. It is also important to note that when items or services were to be packaged with a major procedure, we added their costs to that procedure prior to making the single bill determination. Therefore, the costs of contrast media, for example, are included in the relative weights. In some cases, we agreed with the commenters that this approach needed to be modified. For example, for chemotherapy, we are not grouping drugs, but rather paying for each one separately. Moreover, as a result of the transitional pass-through provisions of the BBRA 1999, radiopharmaceuticals will be paid separately from the nuclear medicine APCs.
Section 1833(t)(3)(C)(i) of the Act requires that we establish a conversion factor for 1999 to determine the Medicare payment amounts for each covered group of services. For the proposed rule as corrected, we derived the conversion factor from a base amount of payments described in section 1833(t)(3)(A) of the Act, as enacted in the BBA 1997. Such base amount was calculated for the services included in the outpatient PPS as an estimate of the sum of (1) total payments that would be payable from the Trust Fund under the current (non-PPS) payment system in 1999, plus (2) the beneficiary coinsurance that would have been paid under the new (PPS) system in 1999. For the final rule, however, we derived the conversion factor from a base amount that includes beneficiary coinsurance that would have been made under the current (non-PPS) system rather than the proposed (PPS) system. Section 201(l) of the BBRA 1999 states: “With respect to determining the amount of copayments described in paragraph (3)(A)(ii) of section 1833(t) of the Social Security Act, as added by section 4523(a) of the BBA, Congress finds that such amount should be determined without regard to such section, in a budget neutral manner with respect to aggregate payments to hospitals, and that the Secretary of Health and Human Services has the authority to determine such amount without regard to such section.”
Section 1833(t)(2)(C) of the Act requires us to project utilization for hospital outpatient services. We were unable to make precise projections of increases in the volume and intensity of services because we were not able to quantify some of the factors that affect utilization. For instance, we would anticipate that Medicare beneficiaries who choose to migrate to managed care plans may be healthier than those who choose to stay in fee-for-service plans. Thus, we could assume a decrease in the volume of services coupled with an increase in the intensity of services
In order to convert the relative weights determined for each APC (see section III.E.1) into payment rates, we calculated a conversion factor that would result in total estimated payments to hospitals under the PPS in 1999 equal to the total estimated payments that would have been payable from the Trust Fund in 1999 if PPS had not been enacted plus estimated beneficiary coinsurance for the same services during the same period. The prospective payment rate for each APC is calculated by multiplying the APC's relative weight by the conversion factor. For the calculation of the conversion factor, we have excluded all data from the 58 Maryland providers that qualify under section 1814(b)(3) of the Act for payment under the State's payment system. We computed the conversion factor by first adding together the aggregate Medicare hospital outpatient payments made under the cost-based payment system (referred to in this section as pre-PPS payments) for calendar year 1996, plus the estimated beneficiary coinsurance amounts made under pre-PPS law for the same services. We then divided that amount by a wage-adjusted sum of the relative weights for all APCs under the hospital outpatient PPS. The methodology we used to determine current law Medicare hospital outpatient payments and beneficiary coinsurance is discussed below in section III.E.2.a. A discussion of the sum of the relative weights follows in section III.E.2.b.
To calculate Medicare hospital outpatient payment amounts before implementation of the PPS, we first identified calendar year 1996 single and multiple procedure bills for all the services that we will recognize under the outpatient PPS. As we identified services that will be paid under the outpatient PPS, we eliminated invalid or noncovered HCPCS codes.
Hospital payments include both operating and capital costs for the HCPCS coded services for which payment is to be made under the outpatient PPS. We summed these two types of costs by HCPCS code at the provider level. Consolidating the data in this manner allowed us to simulate provider payment on an aggregate basis. Then (as required by section 1861(v)(1)(S)(ii) of the Act as amended by section 201(k) of the BBRA 1999), we applied the capital cost reductions of 10 percent and operating cost reductions of 5.8 percent.
We determined for each HCPCS code the applicable payment methodology under the current system. Payment before implementation of PPS for procedures in the baseline was calculated using one of the following equations, as appropriate:
• For radiology procedures paid for under the radiology fee schedule, we determined payment in the aggregate for each provider as the lower of the cost, charge, or blended amount. We use the following equation to determine the radiology blended amount: (0.42 × lower of cost or charge minus beneficiary coinsurance) + (0.58 × ((0.62 × global physician fee schedule amount) − beneficiary coinsurance)).
• For surgical procedures for which Medicare pays an ASC facility fee, we determined payment in the aggregate for each provider as the lower of the cost, charge, or blended amount. We used the following equation to determine the ASC blended amount: (0.42 × lower of cost or charge minus beneficiary coinsurance) + (0.58 × (ASC payment rate − beneficiary coinsurance)).
• For diagnostic procedures paid for under the diagnostic fee schedule, we determined payment in the aggregate for each provider as the lower of the cost, charge, or blended amount. We used the following equation to determine the blended amount for diagnostic procedures: (0.50 × lower of cost or charge minus beneficiary coinsurance) + (0.50 × ((0.42 × global physician fee schedule amount) − beneficiary coinsurance)).
For all other covered services not subject to one of the blended payment method categories, we determined payment as the lower of costs or charges less beneficiary coinsurance. Because the formula-driven overpayment (FDO) was corrected beginning October 1, 1997, the blended equations eliminate FDO.
We then determined the Medicare payment amount for each provider by summing the aggregate amounts computed for each of the four types of payment methodologies discussed above. In addition, we determined the amount of the beneficiary coinsurance for each provider using the beneficiary coinsurance amounts that would have been paid before implementation of PPS. The total amount (Medicare and beneficiary payments) reflects the amount hospitals would be paid under the PPS and is the numerator in the equation for calculating the unadjusted conversion factor.
Next we summed the discounted relative weights for services that are within the scope of the outpatient PPS. (See discussion of discounting for surgical procedures in section III.C.7.) Specifically, we multiplied (using single and multiple procedure claims in a hospital) the discounted volume of procedures or visits in each APC group by the relative weights for each APC group; we wage-adjusted 60 percent of this total by each hospital's wage index, and we then summed the wage-adjusted and nonadjusted weights across all hospitals. (The wage indices used are included in Addenda H, I, and J.) The resulting sum equals the denominator in the calculation of the conversion factor.
For calendar year 2000, we updated the conversion factor as specified in section 1833(t)(3)(C)(iii) of the Act. The update is the market basket percentage increase applied to hospital discharges occurring during the fiscal year ending in calendar year 2000 minus 1 percentage point. For 2000, the updated conversion factor is $48.487.
In section III.E, above, we explained how we determined APC group weights, calculated an outpatient PPS conversion factor, and determined national prospective payment rates, standardized for area wage variations, for the APC groups. We will now explain how we calculated beneficiary coinsurance amounts for each APC group.
The outpatient PPS established by section 1833(t) of the Act includes a mechanism designed to eventually achieve a beneficiary coinsurance level equal to 20 percent of the prospectively determined payment rate established for the service. As discussed in the proposed rule, for each APC we calculate an amount referred to in section 1833(t)(3)(B) of the Act as the “unadjusted copayment amount.” The unadjusted coinsurance amount is calculated by taking 20 percent of the national median charges billed in 1996 for the services that are in the APC, trended forward to 1999; however, the coinsurance amount cannot be less than 20 percent of the APC payment rate. The unadjusted coinsurance amount for an APC remains frozen, while the payment rate for the APC is increased by adjustments based on the Medicare market basket. As the APC rate increases and the coinsurance amount remains frozen, the unadjusted coinsurance amount will eventually become 20 percent of the payment rate for all APC groups. Once the unadjusted coinsurance amount is 20 percent of the payment amount, both the APC payment rate and the unadjusted coinsurance amount will be updated by the annual market basket adjustment.
In the proposed rule, we proposed to not adopt new APCs for new procedures or services for at least 2 years, but instead assign them to existing groups while accumulating data on their costs. In the final rule we do provide for APCs for new procedures that do not fit well into another APC. When an APC is added that consists of HCPCS codes for which we do not have 1996 charge data upon which to calculate the unadjusted coinsurance amount, coinsurance will be calculated as 20 percent of the APC payment amount.
There is an exception to the coinsurance provisions for screening colonoscopies and screening sigmoidoscopies. Section 4104 of the BBA 1997 provided coverage for colorectal screening. This section, in part, added new sections 1834(d)(2) and (3) to the Act, which provide that for covered screening sigmoidoscopies and colonoscopies performed in hospital outpatient departments and ambulatory surgical centers (ASCs), payment is to be based on the
Section 4104 of the BBA 1997 also allows, at the Secretary's discretion, coverage of screening barium enemas as a colorectal cancer screening tool. We are including screening barium enemas as a covered service under the hospital outpatient PPS. The payment rate for screening barium enemas is the same as for diagnostic barium enemas. Coinsurance for a screening barium enema is based on 20 percent of the APC payment rate.
Sections 201(a) and (b) of the BBRA 1999 amend section 1833(t) of the Act to provide for additional payments to hospitals for outlier cases and for certain medical devices, drugs, and biologicals. These additional payments to hospitals will not affect coinsurance amounts. Redesignated section 1833(t)(8)(D) of the Act, as amended by section 201(i) of the BBRA 1999, provides that the coinsurance amount is to be computed as if outlier adjustments, adjustments for certain medical devices, drugs, and biologicals, as well as any other adjustments we may establish under section 1833(t)(2)(E) of the Act, had not occurred. Section 202 of the BBRA 1999 adds a new section 1833(t)(7) to the Act to provide transitional corridor payments to certain hospitals through calendar year 2003 and indefinitely for certain cancer centers.
Section 1833(t)(7)(H) of the Act provides that the transitional corridor payment provisions will have no effect on determining copayment amounts.
Section 204(a) of the BBRA 1999 amended redesignated section 1833(t)(8)(C) of the Act to provide that the coinsurance amount for a hospital outpatient procedure cannot exceed the amount of the inpatient hospital deductible for that year. The inpatient hospital deductible for calendar year 2000 is $776.00. We will apply the limitation to the wage adjusted coinsurance amount (not the unadjusted coinsurance amount) after any Part B deductible amounts are taken into account. Therefore, although the published unadjusted coinsurance amount for any APC may be higher or lower than $776.00 in 2000, the actual coinsurance amount for an APC, determined after any deductible amounts and adjustments for variations in geographic areas are taken into account, will be limited to the Medicare inpatient hospital deductible. Any reductions in copayments that occur in applying the limitation will be paid to hospitals as additional program payments. (See section III.F.3.a, below, for discussion of calculating the Medicare payment amount.)
The first step in changing HCFA's computer systems to allow for implementation of the outpatient PPS is to expand the claim record of several HCFA and contractor systems to accept and retain specific information related to how a service is being paid or why it is denied. The claim record expansion is an indispensable prerequisite to implementation of outpatient PPS. Once expansion of the claim form is completed, we can then make the remaining programming changes necessary to implement the outpatient PPS. As we noted in the proposed rule, 63 FR 47605, these are massive changes that will require extensive testing. We anticipate that these software coding changes cannot be completed before the end of the second quarter of 2000. Therefore, the earliest possible date on which they can be installed and made operational is July 1, 2000.
We do not believe that it is technically feasible to complete installation of both the claims-form line item expansion and the coding changes needed to implement PPS any sooner than July 1, 2000. Each of these two stages of preparing HCFA's computer system for PPS constitutes major systems changes in and of itself. To attempt to make both changes simultaneously would be to run the risk that the system would not function properly at all, potentially requiring implementation to be delayed beyond July 1, 2000. We believe that the two-stage approach discussed above is the only feasible way to make the systems changes necessary to implement PPS and to be certain that they will work. The soonest date on which PPS can be implemented after the millennium is therefore July 1, 2000.
Despite one commenter's request that we implement the outpatient PPS at the start of a calendar year, we do not believe it would be appropriate to delay implementation beyond July 1, 2000. We see no reason to delay implementation beyond the time necessary for HCFA to have completed its Y2K efforts and make all the systems changes necessary for PPS. As with all of the other aspects of PPS, we believe that the beneficiary coinsurance reform contained in the outpatient PPS should be put into effect as soon as possible, so that beneficiaries can be subject to the lower coinsurance amounts under the new payment methodology at the
While none of the commenters specifically requested that we do so, we have considered the possibility of applying the outpatient PPS payment methodology retroactively to services furnished on or after January 1, 1999. We have decided not to make these retroactive payments for the reasons described below.
The first reason is the practical problem that the information needed to implement PPS retroactively does not exist in a usable form. Under current payment methodologies for many outpatient services, hospitals submit bills for furnished services based on their charges for the services. For these services, HCFA does not require hospitals to submit bills containing the HCPCS code for the furnished service and other data (such as the dates of service of multiple services submitted on the same bill) necessary to process bills under the new prospective payment methodology. Without the HCPCS code for a given service, we would be unable to determine retroactively into which APC group the service should be placed for payment under PPS. In turn, that would mean that we could not determine the appropriate payment amount for the service. Thus, given the information currently available to us, we could not now simply reprocess bills for outpatient services that had been furnished between January 1, 1999 and July 1, 2000 and recompute payment and coinsurance amounts for these services. As a result, the data needed to implement PPS retroactively do not exist in a form that would allow for such implementation.
Nor would it have been feasible to attempt to capture the information necessary for retroactive application during 1999. As noted above, we concluded that it would not have been prudent to make the computer programming changes necessary to implement PPS until our Y2K efforts were complete. Those same changes would have been necessary to allow us to capture the more detailed claims data needed to perform a retroactive application of PPS back to January 1, 1999 once the system was implemented prospectively. Because we delayed those changes out of concern that they would interfere with our Y2K efforts, no automated process existed for the period January 1, 1999 through July 1, 2000 by which we could have captured the more detailed claims data necessary to effect an eventual retroactive implementation of PPS. Publication of a final rule before January 1, 1999 would not have altered this situation. Even if we had published such a rule, it could not have become effective until we could make the computer changes necessary to implement PPS—the functional equivalent of what we have done through publication of the proposed rule and this final rule—and until we could make those changes, we could not compile by computer the data needed to later reprocess claims under PPS.
In theory, we might have been able to implement PPS retroactively despite the lack of an automated method of compiling the data necessary to do so. But it simply would not have been practicable to maintain and later process by hand such data for the period between January 1, 1999 and July 1, 2000, given the millions of claims for outpatient services submitted during that period. (Based on the latest data available, we process approximately 160 million claims for outpatient services over an 18-month period.) Neither HCFA nor its contractors have the staff needed to accomplish such a task.
We might also have conceivably required hospitals to maintain the data required for a later retroactive implementation of PPS, but this approach has practical difficulties. First, during the interim period between January 1, 1999 and implementation of PPS, hospitals themselves were exerting significant efforts to ensure the Y2K compliance of their own automated Medicare billing systems, and it is doubtful that those systems could have accommodated the necessary programming changes any more than Medicare's systems could have. Even if hospitals could have maintained the information (or if HCFA could have maintained it by hand or could obtain it from any source now), the burden associated with attempting to implement the new prospective payment methodology both retroactively and prospectively at the same time would have been prohibitive. As noted in the proposed rule and in this final rule, effecting the transition between the old payment methodologies and the new prospective payment methodology constitutes a massive programmatic undertaking. Any effort to reprocess the huge number of bills for outpatient services that would be involved in any attempt to retroactively implement PPS would compete for the same resources needed to implement PPS prospectively, and would compromise our ability to ensure the smoothest prospective implementation.
This is especially so if paper records of claims from the interim period would have to be manually input into Medicare's automated payment systems in order to make retroactive payments for services furnished on or after January 1, 1999. Undertaking an effort, once PPS is implemented, to review hospital records of every outpatient service furnished between January 1, 1999 and July 1, 2000; translate those records into the data needed to process a Medicare claim for the service under PPS; and issue a retroactive payment reflecting the PPS rate for the service would cause a huge backlog of current bills to be processed (and of other carrier tasks), and thus would not be practicable. Therefore, there was no feasible way to have captured the information necessary to make PPS apply retroactively.
In addition to the practical problems described above, the statute does not require retroactive application of PPS. The statutory requirement to implement the PPS for services furnished on or after January 1, 1999 is ambiguous. While section 1833(t)(1)(A)'s reference to outpatient services “furnished during a year beginning with 1999” might be read as imposing such a requirement, it is also true that section 1833(t)(1)(B)(i) does not expressly set a time limit for HCFA to designate which services are “covered” outpatient services for purposes of payment under PPS. Nor does it set a deadline for HCFA to issue regulations implementing the outpatient PPS. As a result, the statute can also be read to require implementation of PPS for services furnished in a year beginning in 1999
We recognize that, under section 1833(a)(2)(B), Congress arguably made the old payment methodologies for outpatient services inapplicable to services furnished on or after January 1, 1999. Again, though, Congress imposed no corresponding limit on the time within which HCFA must designate the services that would be “covered” services for purposes of PPS. While it is therefore possible to read the statute in such a way that an outpatient service
We believe that a clear expression of Congressional intent not to require retroactive application of PPS can be found in the legislative history of amendments to section 1833(t) of the Act, enacted as sections 201, 202, and 204 of the BBRA 1999. In each instance, the legislation provides that the “amendments made by this section shall be effective as if included in the enactment of the BBA,” that is, the original enactment of PPS in section 1833(t) (sections 201(m), 202(b), and 204(c) of the BBRA 1999). This language was taken from the House version of the bill (H.R. Rep. No. 436 (Part I), 106th Cong., 1st Sess. 14, 16 (1999)). The House Report stated that the outpatient payment reforms contained in the BBRA 1999 (and hence in the BBA 1997) were intended to take effect “upon implementation of the hospital prospective payment system” by HCFA,
Both the House Report and the Conference Report expressly acknowledge, without disapproval, HCFA's decision to delay implementation of the outpatient PPS until after January 1, 2000. H.R. Rep. No. 436 (Part I) at 51 (stating that Secretary “delayed implementation of the new system until after the start of CY 2000 in order to ensure that ‘year 2000' data processing problems are fully resolved before the new system is implemented” and that “HCFA currently estimates that the outpatient department prospective payment system will be implemented in July 2000”); 145 Cong. Rec. at H12529 (daily ed. Nov. 17, 1999) (H. Conf. Rep. No. 479) (acknowledging “[t]here has already been a one-year delay in implementation of the BBA 97 provision” and stating that conferees “fully expect” that the outpatient prospective payment system “will commence, as scheduled, on July 1, 2000”). These statements indicate Congressional intent that payments and coinsurance for covered hospital outpatient services would be governed prospectively by PPS only after HCFA promulgated and made effective final implementing regulations.
Finally, there is a serious question as to whether retroactive implementation of PPS might constitute prohibited retroactive rulemaking. In
We do not find this express authorization in section 1833(t) or any other statutory provision concerning the outpatient PPS. Section 1833(t)(1) requires that payment for outpatient services that are furnished during any calendar year beginning after January 1, 1999 and that are designated by HCFA as “covered” outpatient services shall be made under a prospective payment system. While Congress may have presumed, when it enacted section 1833(t) as part of the BBA, that HCFA would be able to designate covered outpatient services and implement the outpatient PPS by January 1, 1999, Congress did not foresee at that time that Y2K concerns would prevent the agency from doing so. As a result, the statute is silent as to what was to occur if HCFA was unable to designate covered outpatient services and implement PPS by January 1, 1999. We do not believe that this silence constitutes the express authorization of retroactive rulemaking required by the Supreme Court's
In the following sections, we describe how we determined the beneficiary coinsurance amount and the Medicare program payment amount for services paid for under the hospital outpatient PPS.
To calculate Medicare program payment amounts and beneficiary coinsurance amounts, we first determined for each APC group two base amounts, in accordance with statutory provisions:
• An unadjusted copayment amount, described in section 1833(t)(3)(B) of the Act; and
• The predeductible payment percentage, which we call the program payment percentage, described in section 1833(t)(3)(E) of the Act.
In the proposed rule, we described the specific steps used to calculate the unadjusted coinsurance amounts for each APC group as follows:
(i) We determined the national median of the charges billed in 1996 for the services that constitute an APC group after standardizing charges for geographic variations attributable to labor costs. (To determine the labor adjustment, we divided the portion of each charge that we estimated was attributable to labor costs (60 percent) by the hospital's inpatient wage index value and added the result to the nonlabor portion of the charge (40 percent)).
(ii) We updated charge values to projected 1999 levels by multiplying the 1996 median charge for the APC group by 13.0 percent (increased to 14.7 percent in this final rule), which the HCFA Office of the Actuary estimates to be the rate of growth of charges between 1996 and 1999.
(iii) To obtain the unadjusted coinsurance amount for the APC group, we multiplied the estimated 1999 national median charge for the APC group by 20 percent. The unadjusted coinsurance amount is frozen at the 1999 level until such time as the program payment percentage (as determined below) equals or exceeds 80 percent (section 1833(t)(3)(B)(ii) of the Act).
In the proposed rule and in this final rule, we use the term “program payment percentage” to replace the term “pre-deductible payment percentage,” which is referred to in section 1833(t)(3)(E) of the Act. The program payment percentage is calculated annually for each APC group, until the value of the program payment percentage equals 80 percent. To determine the program payment percentage for each APC group, we—
(i) Subtract the APC group's unadjusted coinsurance amount from the payment rate set for the APC group; and
(ii) Divide the difference (APC payment rate minus unadjusted coinsurance amount) by the APC payment rate, and multiply by 100.
The program payment percentage will be recalculated each year because APC payment rates will change when APC rates are increased by annual market basket updates and whenever we revise an APC.
Several other commenters noted that classifying drugs with widely varying costs in the same APC will have a significant negative effect on beneficiary coinsurance, and in some cases beneficiaries could be required to pay a greater percentage of coinsurance for less effective therapies. For example, one commenter alleged that the coinsurance for the drug 5-FU, which the commenter believes has a current coinsurance of approximately $1, would increase to $40 under the proposed system.
The national APC payment rate that we calculate for each APC group is the basis for determining the total payment (subject to wage-index adjustment) the hospital will receive from the beneficiary and the Medicare program. (A hospital that elects to reduce coinsurance, as described below in section III.F.4, may receive a total payment that is less than the APC payment rate.) The Medicare payment amount takes into account the wage index adjustment and the beneficiary deductible and coinsurance amounts. In addition, the amount calculated for an APC group applies to all the services that are classified within that APC group. The Medicare payment amount for a specific service classified within an APC group under the outpatient PPS is calculated as follows:
(i) Apply the appropriate wage index adjustment to the national payment rate that is set annually for each APC group.
(ii) Subtract from the adjusted APC payment rate the amount of any applicable deductible as provided under § 410.160.
(iii) Multiply the adjusted APC payment rate, from which the applicable deductible has been subtracted, by the program payment percentage determined for the APC group or 80 percent, whichever is lower. This amount is the
(iv) If the wage-index adjusted coinsurance amount for the APC is reduced because it exceeds the inpatient deductible amount for the calendar year, add the amount of this reduction to the amount determined in (iii) above. The resulting amount is the
A coinsurance amount is calculated annually for each APC group. The coinsurance amount calculated for an APC group applies to all the services that are classified within the APC group. The beneficiary coinsurance amount for an APC is calculated as follows:
Subtract the APC group's Medicare payment amount from the adjusted APC group payment rate less deductible; for example, coinsurance amount = (adjusted APC group payment rate less deductible)—APC group
(A) Adjusted APC payment rate: $300.
(B) Subtract the applicable deductible:
(C) Multiply the remainder by the program payment percentage to determine the preliminary Medicare payment amount:
(D) Subtract the Medicare payment amount from the adjusted APC payment rate less deductible to determine the coinsurance amount, which cannot exceed the inpatient hospital deductible for the calendar year:
(E) Calculate the final Medicare payment amount by adding the preliminary Medicare payment amount determined in step (C) to the amount that the coinsurance was reduced as a result of the inpatient hospital deductible limitation.
In this case, the beneficiary pays a deductible of $100 and a $60 coinsurance, and the program pays $140, for a total payment to the hospital of $300. Applying the program payment percentage ensures that the program and the beneficiary pay the same proportion of payment that they would have paid if no deductible were taken.
If the annual Part B deductible has already been satisfied, the calculation is:
(A) Adjusted APC payment rate: $300.
(B) Subtract the applicable deductible:
(C) Multiply the remainder by the program payment percentage to determine the preliminary Medicare payment amount:
(D) Subtract the Medicare payment amount from the adjusted APC payment rate less deductible to determine the coinsurance amount. The coinsurance amount cannot exceed the amount of the inpatient hospital deductible for the calendar year:
(E) Calculate the final Medicare payment amount by adding the preliminary Medicare payment amount determined in step (C) to the amount that the coinsurance was reduced as a result of the inpatient hospital deductible limitation.
In this case, the beneficiary makes a $90 coinsurance payment, and the program pays $210, for a total payment to the hospital of $300.
The following example illustrates a case in which the inpatient hospital deductible limit on coinsurance amounts applies. Assume that the wage-adjusted payment rate for an APC is $2,000; the wage-adjusted coinsurance amount for the APC is $900; the program payment percentage is 55 percent; the inpatient hospital deductible amount for the calendar year is $776 and the beneficiary has not yet satisfied any portion of his or her $100 Part B deductible.
(A) Adjusted APC payment rate: $2,000.
(B) Subtract the applicable deductible:
(C) Multiply the remainder by the program payment percentage to determine the preliminary Medicare payment amount:
(D) Subtract the preliminary Medicare payment amount from the adjusted APC payment rate less deductible to determine the coinsurance amount. The coinsurance amount cannot exceed the inpatient hospital deductible amount of $776:
(E) Calculate the final Medicare payment amount by adding the
In this case, the beneficiary pays a deductible of $100 and coinsurance that is limited to $776. The program pays $1,124 (which includes the amount of the reduction in beneficiary coinsurance due to the inpatient hospital deductible limitation) for a total payment to the hospital of $2,000.
For most APCs, the transition to the standard Medicare coinsurance rate (20 percent of the APC payment rate) will be gradual. For those APC groups for which coinsurance is currently a relatively high proportion of the total payment, the process will be correspondingly lengthy. The law offers hospitals, but not CMHCs, the option of electing to reduce coinsurance amounts and permits hospitals to disseminate information on their reduced rates. In this section, we discuss the procedure by which hospitals can elect to offer a reduced coinsurance amount, and the effect of the election on calculation of the program payment and beneficiary coinsurance.
Section 1833(t)(5)(B) of the Act, as added by section 4523 of the BBA 1997, requires the Secretary to establish a procedure under which a hospital, before the beginning of a year, may elect to reduce the coinsurance amount otherwise established for some or all hospital outpatient services to an amount that is not less than 20 percent of the hospital outpatient prospective payment amount. The statute further provides that the election of a reduced coinsurance amount will apply without change for the entire year, and that the hospital may disseminate information on its reduced copayments. Section 1833(t)(5)(C) of the Act, as added by the BBA 1997, provides that deductibles cannot be waived. Finally, section 1861(v)(1)(T) of the Act (as added by section 4451 of the BBA 1997) provides that no reduction in coinsurance elected by the hospital under section 1833(t)(5)(B) of the Act may be treated as a bad debt. We note that section 1833(t)(5) of the Act has been redesignated as section 1833(t)(8) of the Act by sections 201(a) and 202(a) of the BBRA 1999.
Elections to reduce coinsurance will not be taken into account in calculating transitional corridor payments to hospitals (discussed in section III.H.2 of this preamble). That is, a hospital's transitional corridor payment will be determined as if the hospital received unreduced coinsurance amounts from beneficiaries.
In the proposed rule, we stated that we would require that hospitals make the election to reduce coinsurance on a calendar year basis. The proposed rule required that the hospital must notify its fiscal intermediary of its election to reduce coinsurance no later than 90 days prior to the date the PPS is implemented or 90 days prior to the start of any subsequent calendar year and that the hospital's notification must be in writing. It must specifically identify the APC groups to which the hospital's election will apply and the coinsurance amount (within the limits identified below) that the hospital has elected for each group. The election of reduced coinsurance must remain in effect and unchanged during the year for which the election is made. Because the law states that hospitals may disseminate information on any reduced coinsurance amounts, we provided in the proposed rule that hospitals would be allowed to publicly advertise this information.
The proposed regulations provided that a hospital may elect to reduce the coinsurance amount for any or all APC groups. A hospital may
As proposed, a hospital may not elect a coinsurance amount for an APC group that is less than 20 percent of the adjusted APC payment rate for that hospital. In determining whether to make such an election, hospitals should note that the national coinsurance amount under this system, based on 20 percent of national median charges for each APC, may yield coinsurance amounts that are significantly higher or lower than the coinsurance that the hospital previously has collected. This is because the median of the national charges for an APC group, from which the coinsurance amount is ultimately derived, may be higher or lower than the hospital's historic charges. Therefore, in determining whether to elect lower coinsurance and the level at which to make the election, we advise that hospitals carefully study the wage-adjusted coinsurance amounts for each APC group in relation to the coinsurance amount that the hospital has previously collected.
As discussed in section III.F.1, under sections 1834(d)(2)(C)(ii) and 1834(d)(3)(C)(ii) of the Act the coinsurance for screening sigmoidoscopies furnished by hospitals and screening colonoscopies furnished by hospital outpatient departments and ASCs is 25 percent of the applicable payment rate. The payment rate for these colorectal cancer screening tests is the lower of the hospital outpatient rate or the ASC payment rate. The payment rate for screening barium enemas is the same as that for diagnostic barium enemas. However, the coinsurance amount for screening barium enemas is 20 percent of the APC payment rate. Hospitals may
Calculation of coinsurance amounts on the basis of a hospital's election of reduced coinsurance is similar to the formula described in section III.F.3. For example, assume that the adjusted APC payment rate is $300; the program payment percentage for the APC group is 60 percent; the hospital has elected a $60
(A) Adjusted APC payment rate: $300.
(B) Subtract the applicable deductible:
(C) Multiply the remainder by the program payment percentage to determine the Medicare payment amount:
(D) Beneficiary's coinsurance is the difference between the APC payment rate reduced by any deductible amount and the Medicare payment amount, but not to exceed the lesser of the reduced coinsurance amount or the inpatient hospital deductible amount:
(E) Calculate the final Medicare payment amount by adding the preliminary Medicare payment amount determined in step (C) to the amount that the coinsurance was reduced as a result of the inpatient hospital deductible limitation.
In this case, Medicare makes its regular payment of $120, and the beneficiary pays a $100 deductible and a reduced coinsurance amount of $60. The hospital receives a total payment of $280 instead of the $300 that it would have received if it had not made its election to reduce coinsurance.
Since the Congress has expressly permitted hospitals to reduce outpatient coinsurance to no less than 20 percent of the PPS payment amount, a Medicare SELECT plan is free to contract selectively with these hospitals. We note that a hospital's election to reduce coinsurance under redesignated section 1833(t)(8)(B) of the Act requires that the reduction be across-the-board for some or all APC groups. Thus, an agreement between a Medicare SELECT plan and a hospital to reduce coinsurance would result in coinsurance reductions for all beneficiaries who receive those APC group services at the hospital, whether or not they are enrolled in the Medicare SELECT plan.
Several other commenters stated that for the election to reduce coinsurance to be effective, hospitals must have the right to advertise and, therefore, the commenters supported our proposal to permit hospitals to advertise coinsurance reductions.
Hospitals would have less incentive to reduce coinsurance if they could not advertise. In addition, beneficiaries need to be fully informed so that they can make informed decisions. We believe that advertising as a way of disseminating information has merit.
We were persuaded by some commenters' concerns that beneficiaries may not understand that reduced coinsurance applies to specific hospital outpatient services furnished by specific hospitals that choose to elect reductions and that similar reductions cannot be made by other providers of ambulatory services. We, therefore, are amending the regulations to require that all
Under section 1833(t)(2)(D) of the Act, the Secretary is required to determine a wage adjustment factor to adjust, in a budget-neutral manner, the portion of the payment rate and the coinsurance amount that is attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions. As stated in the proposed rule, we considered several options and we proposed using the hospital inpatient PPS wage index as the source of an adjustment factor for geographic wage differences for the hospital outpatient department PPS. We believe that using the hospital inpatient PPS wage index is both reasonable and logical, given the inseparable, subordinate status of the outpatient department within the hospital overall. Use of a hospital outpatient-specific wage index was not required by the Congress and we did not have either the time or resources necessary to construct one. We explained in our proposed rule that there are several possible versions of the hospital inpatient wage index that can be developed by extracting the basic wage and salary data from hospital cost reports, depending on the methodology that is applied to the data. For the hospital outpatient PPS, we proposed to adopt the same version that is used to determine payments to hospitals under the hospital inpatient PPS to adjust for relative differences in labor and labor-related costs across geographic areas. This version reflects the effect of hospital redesignation under 1886(d)(8)(B) of the Act and hospital reclassification under 1886(d)(10) of the Act.
By statute, we implement the annual updates of the hospital inpatient PPS on a fiscal year basis. However, we proposed to update the hospital outpatient department PPS on a calendar year basis. Therefore, the hospital inpatient PPS wage index values that are updated annually on October 1 would be implemented for the hospital outpatient department PPS on the January 1 immediately following. We proposed this schedule so that wage index changes will be implemented on a calendar year basis concurrently with other revisions and updates, such as the conversion factor update or changes in the APC groups resulting from new or deleted CPT codes. Subsequent to our proposal, section 201(h) of the BBRA 1999 amended section 1833(t)(8)(A) of the Act (as redesignated by section 201(a) of the BBRA 1999) to require the Secretary to review and revise the outpatient PPS wage index adjustment factor at least annually rather than on a periodic basis. (This section of the Act was further redesignated as section 1833(t)(9)(A) by section 202(a) of the BBRA 1999.)
We proposed to recognize 60 percent of the hospital's outpatient department costs as labor-related costs that would be standardized for geographic wage differences. We initially estimated this percentage by comparing the percentage of costs attributed to labor by other systems (that is, hospital inpatient PPS and ASC) and by considering health care market factors such as the shift in more complex services from the inpatient to the outpatient setting, which could influence labor intensity and costs. We stated that 60 percent represented a reasonable estimate of outpatient costs attributable to labor, as it fell between the hospital inpatient PPS operating cost labor factor of 71.1 percent and the ASC labor factor of 34.45 percent, and is close to the labor-related costs under the hospital inpatient operating cost PPS attributed directly to wages, salaries, and employee benefits (61.4 percent) under the rebased 1992 hospital market basket that was used to develop the fiscal year 1997 update factor for inpatient PPS rates (published August 30, 1996 at 61 FR 46187).
We confirmed our estimate through regression analysis. Using this approach, we analyzed the percentage change in hospital costs attributable to a 1 percent increase in the wage index as expressed by the hospital wage index coefficient. The coefficient from a fully specified payment regression of the hospital cost per unit, standardized for the service mix on the wage index, disproportionate share patient percentage, modified teaching, rural, and urban variables, is approximately 0.60, suggesting a labor share of 60 percent. Even though we decided not to propose additional adjustments, we believed that the coefficient from this specification provided the best estimate of the labor share for the proposed PPS. This judgment was based on a policy to use a labor share that reflects the relationship between the wage index and costs, rather than the effects of correlated factors.
After calculating 60 percent of each hospital's total operating and capital costs, we divided that amount by the hospital's FY 1998 hospital inpatient PPS wage index value to standardize costs to remove the differences that are attributable to geographic wage differences. Therefore, as we explained in the proposed rule, the total cost of performing a procedure or visit would include standardized operating and capital costs, as well as related costs (for example, operating room time, medical/surgical supplies, anesthesia, recovery room, observation) and minor ancillary procedures such as venipuncture that we packaged.
Currently, we do not have data available that would allow us to calculate the wage index for the costs of employing staff in particular occupational categories. Collecting these data would require significant recordkeeping and reporting efforts for hospitals, and the impacts of adjusting the wage index using the data are uncertain. Although some analyses have indicated that the wage indices of rural areas could rise as a result of such an adjustment, these findings are limited by the lack of a national database through which to fully assess the impacts.
In the proposed rule, we noted our intent to use fiscal year 1999 hospital inpatient PPS wage index values to compute the initial outpatient PPS rates. However, we have decided to use fiscal year 2000 inpatient PPS wage index values in determining the payment rates set forth in this final rule. The rationale for using the fiscal year 2000 wage index includes availability of the more recent wage index, that it is more current than the 1999 wage index would have been, and that it is being used to calculate FY 2000 payments under the hospital inpatient PPS.
We proposed to use the annually updated hospital inpatient PPS wage index values to adjust both program payment and coinsurance amounts under the outpatient PPS for area wage variations. Under our proposal, when intermediaries calculate actual payment amounts, they would multiply the prospectively determined APC payment rate and coinsurance amount by that labor-related percentage to determine the labor-related portion of the base payment rate and coinsurance amount that is to be adjusted using the applicable wage index factor. We proposed that the labor-related portion would then be multiplied by the hospital's inpatient PPS wage index factor, and the resulting wage-adjusted labor-related portion would be added to the nonlabor-related portion, resulting in wage-adjusted payment and coinsurance rates. The wage-adjusted coinsurance amount would then be subtracted from the wage-adjusted APC payment rate, and the remainder would be the Medicare payment amount for the service or procedure. Note that even if a hospital elects to reduce the coinsurance or if the coinsurance is capped at the inpatient deductible, the full coinsurance is assumed for purposes of determining the Medicare payment percentage. (See section III.F.3 for a discussion on how Medicare program payments are calculated when the Part B deductible applies.)
The following is an example of how an intermediary would calculate the Medicare payment for a surgical procedure with a hypothetical APC payment rate of $300 that is performed in the outpatient department of a hospital located in Heartland, USA. The coinsurance amount for the procedure is $120. The hospital inpatient PPS wage index value for hospitals located in Heartland, USA is 1.0234. The labor-related portion of the payment rate is $180 ($300 × 60 percent), and the nonlabor-related portion of the payment rate is $120 ($300 × 40 percent). The labor-related portion of the unadjusted coinsurance amount is $72 ($120 × 60 percent), and the nonlabor-related portion of the unadjusted coinsurance amount is $48 ($120 × 40 percent). It is assumed that the beneficiary deductible has been met.
= ($72 × 1.0234) + $48
= $74 + $48
= $122
$304−$122 = $182
We issued the federal fiscal year (FY) 2000 hospital inpatient PPS wage index values in the
Section 1833(t)(2)(E) of the Act, as enacted by the BBA 1997, authorized, but did not require, an outlier adjustment. In the proposed rule, we discussed our reasons for not implementing an outlier adjustment policy. We explained that we had reached that decision after carefully evaluating several factors. For the following reasons, we believed an outlier policy was not necessary: (a) in the proposed PPS, unlike the hospital inpatient PPS, we would use limited packaging of services and allow payment for multiple services delivered to a given patient on a given day; (b) payment for critical care services would reflect the intensity and higher costs associated with providing this type of medical care; and (c) we would make higher payment for serious medical cases even if critical care were not provided and additional payments would be made for any other laboratory work, x-rays, or surgical interventions resulting from medical visits to the emergency room.
Section 201(a) of the BBRA 1999 amended section 1833(t) of the Act by adding an outlier adjustment provision, section 1833(t)(5). Under this new provision, the statute now requires that we make an additional payment (that is, an outlier adjustment) for outpatient services for which a hospital's charges, adjusted to cost, exceed a fixed multiple of the outpatient PPS payment as adjusted by pass-through payments. The Secretary determines this fixed multiple and the percent of costs above the threshold that is to be paid under this outlier provision. The statute sets a limit on projected aggregate outlier payments. Under the statute, projected outlier payments may not exceed an “applicable percentage” of projected total payments. The applicable percentage means a percentage specified by the Secretary (projected percentage of outlier payments relative to total payments), subject to the following limits: for years before 2004, the projected percentage that we specify cannot exceed 2.5 percent; for 2004 and later, the projected percentage cannot
Section 1833(t)(5)(D) of the Act grants the Secretary authority until 2002 to identify outliers on a bill basis rather than on a specific service basis and to use an overall hospital cost-to-charge ratio (CCR) to calculate costs on the bill rather than using department-specific CCRs for each hospital.
To set the threshold or fixed multiple and the payment percent of costs above that multiple for which an outlier payment would be made, we first had to determine what specified percentage of total program payment, up to 2.5 percent, we should select. We decided to set the outlier target at 2.0 percent. In order to set the fixed multiple outlier threshold and payment percentage, we simulated PPS payments, as described below in section G of the preamble. As explained further below, we calibrated the threshold and the payment percentage applying an iterative process so that the simulated outlier payments were 2.5 percent of simulated total payments.
After setting the outlier target percentage and reducing the unadjusted conversion factor to reflect the 2 percent outlier reduction and the 2.5 percent pass-through adjustment (see discussion in section III.D), we identified those claims in our 1996 database with at least one payable service under the PPS system. For these bills, we first calculated the total PPS payment for the bill using the reduced conversion factor. Next, we calculated for each claim the total charges attributed to services being paid under the PPS system. These charges were then adjusted to cost, using a hospital-specific CCR. We used the sum of the hospital's total operating CCR and total capital CCR as the hospital specific CCR. These CCRs were calculated from the most current cost report data available and were adjusted to calendar year 1996.
We also identified all bills for the 1,800-plus hospitals that we had previously identified as having coded only the lowest level clinic visit code (CPT code 99201) for all visits. For these hospitals, we isolated those claims with at least one service with the CPT code 99201 and one or more additional PPS covered service. Due to the undercoding on these bills and the inherent problem in determining a possible outlier condition, we excluded these bills from the calculation process but set aside a proportional amount of outlier payments based on the proportional cost of these bills to the total cost of all bills used in the outlier calculation.
After determining the PPS payment and the cost for all 42 million claims for which there was at least one billable service under the PPS system, we experimented with several combinations of thresholds or fixed multiples and payment percent of costs over these multiples. We found that the combination of using a multiple of 2.5 for the threshold and the use of a payment percent of 75 percent of cost over this threshold achieved our target of a 2.5 percent outlier payment. Approximately 1.6 million claims in our 1996 claims database had calculated bill costs that exceeded the PPS payments on the claim by more than 2.5 times and thus qualified for an outlier payment in our model.
One commenter believes that an outlier policy is necessary for a payment system based on averaging to provide additional payments for potentially variable and expensive items such as pharmaceuticals and supplies. Several commenters suggested that outlier payments would be necessary if we did implement their option to carve out all pharmaceuticals and certain supplies from the hospital outpatient PPS and pay them separately based on reasonable costs or average wholesale price (AWP). Most commenters who urged establishing outlier payments advocated them for high cost drugs, supplies, and new technologies. Some commenters advised that a drug such as Activase administered to a cardiac patient in the emergency room prior to inpatient admission or transfer to another hospital for inpatient admission would be costly. One commenter estimated that the cost for two doses of the drug would exceed $4,000. One commenter urged an outlier policy that would adequately pay for iodine I 131 tositomomab. Another commenter recommended that we make an outlier payment for Hemophilia Factor Concentrate that could be packaged in APC 906 (Infusion Therapy, except Chemotherapy) or APC 907 (Intramuscular Injections) and Tissue Plasminogen Activator (TPA) and IV therapy drugs as outliers.
A professional association expressed the need for an outlier policy for tests whose costs exceed a reasonable range of costs for similar procedures. They identified CPT codes 95951 and 95956 as examples of those tests. Another association recommended adoption of
As we developed the proposed rule, we conducted extensive regression analysis of the relationship between outpatient hospital costs and several factors that affect costs, such as teaching intensity and disproportionate share percentage, as part of the analysis to determine whether payment adjustments should be proposed for the outpatient PPS. Ultimately, we did not propose any adjustments other than the wage index used to adjust for local variation in labor costs. One of the main reasons we did not propose any special adjustments was that the estimated effects of measured factors on costs were small and, in most cases, not statistically significant. In addition, we believe that the negative impacts estimated in the proposed rule for certain classes of hospitals were partially attributable to undercoding and coding variations in the data because coding did not affect the payment of many services under the current payment system, especially medical visits.
Since publication of our proposed policy, section 202(a)(3) of the BBRA 1999 added new paragraph (7) to section 1833(t) of the Act to require the Secretary to make payment adjustments during a transition period to limit the decline in payments under PPS for hospitals. These additional payments are to be implemented without regard to budget neutrality and are in effect through 2003.
Under paragraphs (A), (B), and (C) of section 1833(t)(7) of the Act, the amount of the payment adjustment for an individual hospital depends on the difference between the hospital's “PPS amount” and the hospital's “pre-BBA amount.” Section 1833(t)(7)(E) of the Act defines the “PPS amount” as the amount payable under PPS for the hospital's covered outpatient department services, excluding the effects of the transitional corridor and including coinsurance and deductibles. For purposes of calculating the PPS amount, we include the full copayment amounts; if a hospital chooses to reduce the copayment for some or all of the services that it furnishes, we will count the full copayment amounts rather than the reduced copayment amounts. Section 1833(t)(7)(F) of the Act defines the “pre-BBA amount” for a period as the amount equal to the product of (1) the hospital's reasonable cost for covered outpatient department services, and (2) the base outpatient department payment-to-cost ratio for the hospital. The statute defines “base payment-to-cost ratio” as the ratio of (1) the hospital's reimbursement for covered outpatient department services during the cost reporting period ending in 1996, to (2) the reasonable cost of the services for the period. The base payment-to-cost ratio will be calculated as if the amendments to sections 1833(i)(3)(B)(i)(II) and 1833(n)(1)(B)(i) of the Act made by section 4521 of the BBA 1997, to require that the full amount beneficiaries paid as coinsurance under section 1862(a)(2)(A) of the Act are taken into account in determining Medicare Part B Trust Fund payment to the hospital, were in effect in 1996.
For calendar years 2000 and 2001, payment to hospitals whose PPS payment is less than 100 percent, but is at least 90 percent, of the pre-BBA payment, is increased by 80 percent of the difference. Hospitals whose PPS payment is less than 90 percent, but is at least 80 percent, of the pre-BBA payment, will receive additional payment equal to the amount by which 71 percent of the estimated pre-BBA payment exceeds 70 percent of the PPS payment. Hospitals whose PPS payment is less than 80 percent, but is at least 70 percent, of the pre-BBA payment will receive additional payment equal to the amount by which 63 percent of the pre-BBA payment exceeds 60 percent of the PPS payment. Payments to hospitals whose PPS payment is less than 70 percent of the pre-BBA payment will be increased by 21 percent of the pre-BBA payment. For calendar years 2001 through 2003, the number of corridors and the associated percentage increases decline over time. As required by statute, interim payments will be made subject to retrospective adjustments. Section 1833(t)(7) of the Act provides special transition payments for cancer centers and small rural hospitals, which are discussed below in section III.H.3.
We will begin comprehensive analyses of cost and payment differentials between different classes of hospitals as soon as there is a sufficient amount of claims data submitted under the PPS. We will use data from the initial years of the PPS to conduct regression and simulation analyses. In addition, we will carefully track and analyze the additional payment made to hospitals under section 1833(t)(7) of the Act. These analyses will be used to consider and possibly propose adjustments in the system, particularly beginning in 2004 when the BBRA 1999 transition provisions expire.
In the BBA 1997, the Congress did not exclude from the hospital outpatient PPS the 10 cancer centers that are currently excluded from the inpatient PPS, but section 1833(t)(8) of the Act (as enacted in the BBA 1997) provides special consideration for these hospitals under the outpatient PPS. More specifically, that section provides that the outpatient PPS would not apply to the 10 cancer centers before January 1, 2000, and that the Secretary may establish a separate conversion factor for cancer centers to take into account the unique costs they incur due to their patient population and the intensity of their services.
In the proposed rule, we stated that, because we had no choice but to delay implementation of the PPS for all hospitals until sometime after January 1, 2000 due to Y2K concerns, we would begin paying cancer centers under hospital outpatient PPS at the same time. Also, we did not propose a separate conversion factor for cancer centers. Although our proposed impact analysis indicated that, under the PPS, the cancer centers could lose 32 percent of their current outpatient Medicare payments, we proposed to do additional work to try to explain the impact before we provided for a separate conversion factor or other payment adjustment.
Section 1833(t)(7)(D)(ii) of the Act, as added by the BBRA 1999, provides that the 10 cancer centers excluded from the inpatient PPS are permanently held harmless with respect to their pre-BBA 1997 amount.
During the comment period for the proposed rule, the cancer centers submitted for our consideration an alternative payment methodology. Under their methodology, we would calculate a separate conversion factor for each of the 10 centers based on their individual base year Medicare payments and service mix. Subsequently, the conversion factors would be updated using the Congressionally determined update factor applicable to all hospitals. Hospitals would be paid interim payment amounts during the year, but payment would ultimately be based on the lesser of—
• The PPS payments they would receive using their individual conversion factor; or
• The payments they would receive based on their cost reports by applying the current (that is, pre-PPS) outpatient services payment methodology.
Capital costs would be excluded from this comparison and be paid on a reasonable cost pass-through basis. The proposal also envisioned some payment penalties and incentives similar to the penalties and incentives provided under the reasonable payment cost limit methodology applicable to hospitals excluded from the inpatient PPS.
We noted in the proposed rule that rural hospitals generally receive a relatively high percentage of their Medicare income from outpatient services (greater than the national average), which compounds the impact of the reduction in Medicare payments to rural hospitals that we projected would result upon implementation of the hospital outpatient PPS. We attributed these reduced revenues to undercoding, lack of economies of scale, and reliance on the median instead of the geometric mean in the calculation of APC weights. Because our impact analysis revealed that low-volume rural hospitals that are sole community hospitals or Medicare-dependent hospitals could experience a considerable reduction in revenues under the outpatient PPS, we solicited comments in the proposed rule on two possible approaches to phasing in the outpatient PPS for these types of hospitals.
Section 1833(t)(7)(D)(i) of the Act provides that hospitals located in a rural area with 100 or fewer beds are held harmless with respect to their pre-BBA 1997 amount for outpatient services furnished before January 1, 2004. For purposes of implementing this provision, bed size will be determined in the same way it is for inpatient PPS for the indirect medical education adjustment as defined in § 412.105(b), Determination of number of beds. A hospital's location in a rural area will also be determined as it is in the inpatient PPS; see § 412.63(b), Geographic classifications.
Prior to enactment of the BBRA 1999, section 1833(t)(6)(A) of the Act required the Secretary to periodically review and revise the APC groups, the relative payment weights, and the wage and other adjustments to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors.
In the proposed rule, we described our plan to update the various components of the outpatient PPS. We proposed to keep the composition of all the APC groups essentially intact from one year to the next, with the exception of the few changes that may be necessary as a consequence of annual revisions to HCPCS and ICD-9-CM (International Classification of Diseases, Ninth Edition, Clinical Modification) codes. We stated that we did not plan to routinely reclassify services and procedures from one APC to another. We proposed to make these changes based on evidence that a reassignment would improve the group(s) either clinically or with respect to resource consumption. However, we specifically solicited comments on how frequently to recalibrate the APC weights and on the method and data that should be used. We defined recalibration as the updating of all the APC group weights based on more recent information.
We proposed to update the wage index values used to calculate program payment and coinsurance amounts on a calendar year basis, adopting, effective for services furnished each January 1, the wage index value established for a hospital under the inpatient PPS the previous October 1. The first update to the wage index values will be effective for calendar year 2001 beginning January 1, 2001.
Section 201(h)(1)(A) of the BBRA 1999 amended section 1833(t)(8)(A) of the Act (as redesignated by section 201(a) of the BBRA 1999) to require the Secretary to review the components of the outpatient PPS not less often than annually and revise the groups, the relative payment weights, and the wage and other adjustments to take into account changes in medical practice, changes in technology, and the addition of new services, new cost data, and other relevant information and factors. (Section 202(a) of the BBRA 1999 further redesignated section 1833(t)(8) as section 1833(t)(9).)
Section 201(h)(1)(B) of the BBRA 1999 further amended this section of the Act to require that the Secretary consult
We stated in the proposed rule that section 1833(t)(3)(C)(ii) of the Act requires us to update annually the conversion factor used to determine APC payment rates. Section 1833(t)(3)(C)(iii) of the Act provides that the update be equal to the hospital inpatient market basket percentage increase applicable to hospital discharges under section 1886(b)(3)(B)(iii) of the Act, reduced by one percentage point for the years 2000, 2001, and 2002. The Secretary also has the option (under section 1833(t)(3)(C)(iii) of the Act) of developing a market basket that is specific to hospital outpatient services. We advised in our proposed rule that we are considering this option, and specifically invited comments on possible sources of data that are suitable for constructing a market basket specific to hospital outpatient services. We did not receive any comments regarding potential data sources for constructing a hospital outpatient-specific market basket. Therefore, we will update the conversion factor annually by the hospital inpatient market basket increase (as specified in section 1886(b)(3)(B) of the Act), reduced by one percentage point for the years 2000, 2001, and 2002.
As stated above, section 1833(t)(9)(A) of the Act (as redesignated by section 201(a) of the BBRA 1999 and further redesignated by section 202(a) of the BBRA 1999) requires the Secretary, beginning in 2001, to consult with an expert outside advisory panel of appropriately selected provider representatives when annually reviewing and updating the APC groups and the relative group weights. The statute specifies that the expert panel will act in an advisory capacity on matters pertaining to the clinical integrity of the groups and weights and that it may use data other than those developed or collected by us in executing this function. We will initiate this review process in 2001 for the hospital outpatient PPS payments that will take effect for services furnished on or after January 1, 2002. We will adopt a process for identifying and appropriately selecting provider representatives to serve as members of an expert advisory panel. We anticipate informing the hospital community of the formation of an expert advisory panel through timely notice in the
Section 1833(t)(2)(F) of the Act requires the Secretary to develop a method for controlling unnecessary increases in the volume of covered outpatient department services. Section 1833(t)(6)(C) of the Act, as added by the BBA 1997, authorizes the Secretary to adjust the update of the conversion factor if we determine that the volume of services paid for under the outpatient PPS increases beyond amounts we establish under section 1833(t)(2)(F) of the Act.
In the proposed rule, we proposed a volume control measure for services furnished in CY 2000 only. We discussed several long-term alternatives to control volume for services furnished in subsequent years, and we solicited comments on those options. We stated that we would propose an appropriate volume control mechanism for services furnished in CY 2001 and beyond after we completed further analysis. Given the complexities of developing an appropriate volume control mechanism for hospital outpatient services, we believed additional study was necessary.
For CY 2000, we proposed to use a modified version of the physician sustainable growth rate system (SGR), which is required under section 1848(d)(3) of the Act, for purposes of the hospital outpatient PPS. As we stated in the proposed rule, this appeared to be the most feasible initial approach. Using this approach, we proposed to update the target amount specified under section 1833(t)(3)(A) for CY 1999 as an expenditure target for services furnished in CY 2000. We stated that we would update the CY 1999 target for inflation (based on the projected change in the hospital market basket minus one percentage point), estimate changes in the volume and intensity of hospital outpatient services, and estimate Part B fee-for-service changes in enrollment. If volume exceeded the target for CY 2000, we proposed to adjust the update to the conversion factor for CY 2002. We further stated that we would compare the CY 2000 target to an estimate of CY 2000 actual payments to hospitals as determined by our Office of the Actuary using the best available data. We proposed that if unnecessary volume increases, as reflected by expenditure levels, caused payment to exceed the target, we would determine the percentage by which the target is exceeded, and adjust the CY 2002 update to the conversion factor by the same percentage.
We indicated that we would respond in the final rule to comments on our proposed volume control measure for services furnished in CY 2000, but not to comments about volume control options for services furnished after CY 2000, which will be addressed in a later proposed rule.
All current correct coding initiative (CCI) edits with the exception of laboratory and anesthesiology edits have been incorporated in the outpatient code editor (OCE) that fiscal intermediaries use to process claims for hospital outpatient services for payment. We will address OCE changes in a program memorandum to fiscal intermediaries. The effective date of these edits is July 1, 2000.
We have decided not to pursue changes to the UB-92 claim form to allow line item diagnosis because, as we discuss in section III.C.3, we will not be using diagnosis to determine payments for clinic and emergency visits when the PPS is first implemented. Diagnosis codes, however, are still required to be reported on hospital outpatient bills.
We have received inquiries regarding the anticipated medical review process for hospital outpatient PPS claims. The methodology of review for outpatient claims does not change under the PPS. The goal of medical review is to identify inappropriate billing and to ensure that payment is not made for noncovered services. Contractors may review any claim at any time, including requesting medical records, to ensure that payment is appropriate. In accordance with this final rule, Medicare will make payment under the PPS for hospital outpatient services including partial hospitalization services; certain Part B services furnished to inpatients who have no Part A coverage; partial hospitalization services furnished by CMHCs; vaccines, splints, casts and antigens provided by HHAs and CORFs that provide medical and other health services; and splints, casts and antigens provided to hospice patients for the treatment of a nonterminal illness. In addition, we expect focused reviews will include the adjustments we have made to the hospital outpatient PPS as a result of the enactment of the BBRA 1999, especially the transitional pass-through payments for innovative drugs, biologicals, and medical devices that are discussed in section III.D. Fiscal intermediaries will continue focused and random review of services such as ambulance, clinical diagnostic laboratory, orthotics, prosthetics, take home surgical dressings, chronic dialysis, screening mammographies, and outpatient rehabilitation (physical therapy including speech language pathology and occupational therapy) even though these services are excluded from the scope of services paid under the hospital outpatient PPS.
Section 1833(t)(9) of the Act, as added by the BBA 1997, prohibits administrative or judicial review of the development of the PPS classification system, the groups, relative payment weights, wage adjustment factors, other adjustments, volume control methods, calculation of base amounts, periodic control methods, periodic adjustments, and the establishment of a separate conversion factor for cancer hospitals. Section 201(a) of the BBRA 1999 redesignates this section as section 1833(t)(11) of the Act, and section 201(d) of the BBRA 1999 amends the section by adding the following to the list of adjustments subject to the limitation on judicial review: the factors used to determine outlier payments, that is, the fixed multiple, or a fixed dollar cutoff amount; the marginal cost of care, or applicable total payment percentage; and the factors used to determine additional payments for certain medical devices, drugs, and biologicals such as the determination of insignificant cost, the duration of the additional payments, the portion of the outpatient PPS
The Medicare law (section 1861(u) of the Act) lists the types of facilities that are regarded as providers of services, but does not use or define the term “provider-based.” However, from the beginning of the Medicare program, some providers, which we refer to in this section as “main providers,” have owned and operated other facilities, such as SNFs or HHAs, that were administered financially and clinically by the main provider. The subordinate facilities may have been located on the main provider campus or may have been located away from the main provider. In order to accommodate the financial integration of the two facilities without creating an administrative burden, we have permitted the subordinate facility to be considered provider-based. The determination of provider-based status allowed the main provider to achieve certain economies of scale. To the extent that overhead costs of the main provider, such as administrative, general, housekeeping, etc., were shared by the subsidiary facility, these costs were allowed to flow to the subordinate facility through the cost allocation process in the cost report. This was considered appropriate because these facilities were also operationally integrated, and the provider-based facility was sharing the overhead costs and revenue producing services controlled by the main provider.
Before implementation of the hospital inpatient PPS in 1983, there was little incentive for providers to affiliate with one another merely to increase Medicare revenues or to misrepresent themselves as being provider-based, because at that time each provider was paid primarily on a retrospective, cost-based system. At that time, it was in the best interest of both the Medicare program and the providers to allow the subordinate facilities to claim provider-based status, because the main providers achieved certain economies, primarily on overhead costs, due to the low incremental nature of the additional costs incurred.
In the proposed rule, we pointed out the increase of provider-based facilities and the financial and organizational incentives for that increase since 1983. A variety of factors such as the emergence of integrated delivery systems and the pressure to enhance revenues have combined to create incentives for providers to affiliate with one another and to acquire control of nonprovider treatment settings, such as physician offices.
We noted in the proposed rule that it is essential that we make decisions regarding provider-based status appropriately, and that we have clear rules for identifying provider-based entities. By failing to distinguish properly between provider-based and free-standing facilities or organizations, we risk increasing program payments and beneficiary coinsurance with no commensurate benefit to the Medicare program or its beneficiaries and we jeopardize the delivery of safe and appropriate health care services to our beneficiaries.
Although there is no direct statutory requirement to maintain explicit criteria for determination of provider-based status, there are statutory references acknowledging the existence of this payment outcome. For example, section 1881(b) of the Act provides for separate payment rates for hospital-based ESRD facilities. There is currently no general definition of “provider-based facility” in the CFR. However, in the proposed rule, we cited issuances that do contain provisions for recognition of specific types of entities as provider-based, including Program Memorandum A-96-7, published on August 27, 1996, which pulled together instructions for specific entity types from previously published documents and consolidated them into a general instruction for the designation of provider-based status for all facilities or organizations. That Program Memorandum was subsequently reissued, without substantive change, as Program Memoranda A-98-15 and A-99-24 and, in October 1999, was manualized by the Provider Reimbursement Manual, Part I, Transmittal 411 (adding new section 2446), and the State Operations Manual, Transmittal 11 (replacing previous section 2003 and adding new section 2004). Our policy will continue to follow the principles we articulated in Program Memorandum A-96-7 and the Provider Reimbursement Manual and State Operations Manual sections cited above until October 10, 2000. After that date, we shall apply the policies set forth in these final regulations.
We announced our intention to implement §§ 413.24(d)(6)(i) and (ii), 413.65, 489.24(b), and 498.3, as revised based on our consideration of public comments, with respect to services furnished on or after 30 days following publication of a final rule. We describe these sections below and explain that we have now provided a 6-month delay in the effective date of the regulations on provider-based status.
We proposed to add a new § 413.65 on the determination of provider-based status. In paragraph (a), we proposed to define the following terms: department of a provider, free-standing facility, main provider, provider-based entity, and provider-based status. In paragraph (b), we proposed that a facility or organization would not be entitled to be treated as provider-based simply because it or the provider believe it to be provider-based. The facility or organization, or the provider, would have to contact HCFA and obtain an affirmative provider-based determination before billing of the facility's or organization's costs through the main provider, or inclusion of those costs on the main provider's cost report, is initiated. Further, we proposed to presume a facility not located on the campus of a hospital and used as a site of physician services of the kind ordinarily furnished in physician offices to be a free-standing facility unless we determined it to have provider-based status.
We proposed to require, in paragraph (c), that a main provider that acquires a facility or organization for which it wishes to claim provider-based status must report its acquisition of the facility or organization to us if the facility or organization is off the campus of the main provider, or is located on the campus of the main provider and, if acquired, would increase the main provider's costs by 5 percent or more. The main provider must also furnish all information needed for a determination as to whether the facility or organization meets the criteria in this section for provider-based status. A main provider that has had one or more facilities or organizations determined to have provider-based status also must report to us any material change in the relationship between it and any department or provider-based entity, such as a change in ownership of the entity or entry into a new or different management contract, that could affect the provider-based status of the department or entity.
In paragraph (d), we proposed the requirements for a determination of provider-based status. In paragraph (d)(1), we proposed to set forth licensure requirements for facilities or organizations seeking provider-based status.
In paragraph (d)(2), we proposed to require that a facility or organization be
In paragraph (d)(3), with respect to administration and direct supervision of the main provider, we proposed to require that a facility or organization seeking provider-based status have a reporting relationship to the main provider that is characterized by the same frequency, intensity, and level of accountability that exists in the relationship between the main provider and one of its departments.
In paragraph (d)(4), we proposed that a facility or organization seeking provider-based status and the main provider share integrated clinical services, as evidenced by privileging of the professional staff of the department or entity at the main provider, and the main provider's maintenance of the same monitoring and oversight of the department or entity as of other departments. Also, the medical director of the department or entity would be required to maintain a day-to-day reporting relationship with the chief medical officer (or equivalent) of the main provider, and be under the same supervision as any other director of the main provider.
In paragraph (d)(5), we proposed to require that the department or entity and the main provider be fully financially integrated within the main provider's financial system, as evidenced by the sharing of income and expenses. The department's or entity's costs should be reported in a cost center of the provider, and the department's or entity's financial status should be incorporated into, and readily identifiable in, the main provider's trial balance.
In paragraph (d)(6), we proposed to require that the main provider and the facility seeking status as a department of the provider be held out to the public as a single entity, so that when patients enter the department they are aware that they are entering the provider and will be billed accordingly. (This requirement would not apply to a provider-based entity that is itself a provider, such as a SNF.)
In paragraph (d)(7), we proposed to require that the department of a provider or provider-based entity and the main provider be located on the same campus, except where requirements relating to service to the same patient population are met.
Paragraph (e) would specifically prohibit the approval of provider-based status for any proposed department or entity that is owned by two or more providers engaged in a joint venture.
In proposed paragraph (f), we proposed to state that facilities or organizations operated under management contracts would be considered provider-based only if specific requirements are met related to: Staff employment, administrative functions, day-to-day control of operations, and holding of the management contract by the provider itself rather than by a parent organization.
In proposed paragraph (g), we proposed to specify nine obligations of hospital outpatient departments and hospital-based entities. We explained that these obligations ensure that facilities seeking recognition as hospital outpatient departments or hospital-based entities are in fact what they represent themselves to be, and are not simply the private offices of individual physicians or of physicians in group practices.
We also proposed to preclude any facility or organization that furnishes all services under arrangements from qualifying as provider-based. We believe the provision of services under arrangement was intended to be allowed only to a limited extent, in situations where cost-effectiveness or clinical considerations, or both, necessitate the provision of services by someone other than the provider's own staff. The “under arrangement” provision in section 1861(w)(1) of the Act and § 409.3 is not intended to allow a facility merely to act as a billing agent for another.
Proposed paragraph (h) states that, if we learn of a provider that has inappropriately treated a facility or organization as provider-based, before obtaining our determination of provider-based status, we would reconsider all payments to that main provider for those periods subject to reopening, and we would investigate to determine whether the designation was appropriate.
In proposed paragraph (i), we would apply the principles in paragraph (h) to situations involving inappropriate billing for services furnished in a physician's office or other facility or organization as if they had been furnished in a hospital outpatient or other department of a provider or in a provider-based entity.
We also proposed to add a new paragraph (j) that would allow us to review past determinations. If we find that a designation was in error, and the facility or organization in question does not meet the requirements of this section, we will notify the main provider that the provider-based status will cease as of the first day of the next cost report period following notification of the redetermination.
In addition, we proposed to add to § 413.24(d) new paragraphs (6)(i) and (6)(ii) to clarify that main providers, in completing their Medicare cost reports, may not allocate overhead costs to the provider-based or other cost centers that incur similar costs directly through management contracts or other arrangements. These changes are needed to prevent misallocation of management costs, which would result in excessive payment to those types of providers paid on a reasonable cost basis.
To provide an administrative appeals process for entities that have been denied provider-based status, we proposed to revise the regulations on provider appeals at § 498.3. As revised, these rules would specify that a provider seeking a determination that a facility or an organization is a department of the provider or a provider-based entity under proposed § 413.65 would be included in the definition of “prospective provider” for purposes of part 498, and would be afforded the same appeal rights as a prospective provider, such as a hospital or SNF, that we have found not to qualify for participation as a provider.
In response to our proposals, we received approximately 120 letters of comment, most of which raised a number of issues. Included among the commenters were hospitals and hospital and other provider associations, physicians, attorneys, and other individuals. Here we respond to comments submitted on the proposed rule.
Many comments were not directed to a specific provision or criterion, but concerned the implementation of the regulations or the application of provider-based criteria to specific types of facilities. These are summarized below.
Comment: A commenter requested clarification as to when the parts of the final rule setting forth criteria for provider-based status would be effective, and a number of commenters requested an extended grace period or a delay in effective date of the final rules, with some commenters requesting delays as long as 12 to 18 months. Various reasons were cited, including the pressures on providers to prepare their systems and staff for the outpatient PPS, the need to bring operations into compliance with the provider-based criteria, and the anticipated workloads of HCFA regional offices that may
(1) The outpatient facility is owned and operated by the tribe that owns the majority of the tribal shares utilized in funding the main hospital;
(2) The tribe has previously compacted programs that were historically administered by the hospital and are now administered through a committee or board comprised of medical staff of both facilities;
(3) The outpatient facility is in the same State as the hospital;
(4) There is coordination and integration of services, to the extent practicable, between the outpatient facility seeking provider-based status and the main provider.
Despite the difference between HRSA and HCFA requirements, we are aware that some FQHCs may have been treated by hospitals as departments for purposes of Medicare and Medicaid billing, and we are concerned that an abrupt change in status for them could force some or all to close, leading to shortages of care in some areas. Therefore, we plan to establish special provisions for FQHCs and FQHC “look-alikes” (facilities that are structured like FQHCs and meet all requirements for grant funding, but have not actually received these grants). Specifically, we have revised the regulations to state that if a facility has since April 7, 1995 furnished only services that were billed as if they had been furnished by a department of a provider and either (1) received a grant before 1995 under section 330 of the Public Health Service Act or, before 1995, received funding from such a grant under a contract with the recipient of such a grant and meets the requirements to receive a grant under section 330 of the Public Health Service Act; or (2) based on the recommendation of the PHS, was determined by HCFA before 1995 to meet the requirements for receiving such a grant, the facility will continue to be treated, for purposes of this section, as a department of the provider without regard to whether it complies with the criteria for provider-based status in § 413.65. We note that both types of facilities would be obligated, for as long as they are treated as a department of a provider, to comply with the applicable requirements for departments of providers as stated in § 413.65(g).
For example, an institutional provider such as a hospital or SNF may elect to use part of its institutional complex to house physician offices or other facilities that provide services complementing those of the provider. Those facilities'costs will have to be included in the trial balance of the institutional complex, in order to allow costs to be allocated accurately to all parts of the complex, and permit the costs of the provider to be determined. However, inclusion of such facilities' costs on the institutional complex trial balance does not make the facilities provider-based. On the contrary such facilities would have to meet the criteria in § 413.65 to qualify for provider-based status.
discretion regional offices should have in applying the provider-based criteria. One commenter asked that we make the rules as clear and concise as possible. The commenter argued that rules allowing for great latitude in interpretation could be dangerous for the provider community. On the other hand, another commenter stated that we should allow Medicare regional offices greater latitude for determining when sufficient integration exists for a facility to qualify as provider-based, and should avoid adopting regulations that “micro-manage” a hospital's operations. Another commenter suggested that rather than requiring that
With respect to the comment regarding situations in which all but a few criteria for provider-based status are met, we note that nothing prohibits the main provider from re-applying for approval of provider-based status for a facility or organization after having made the changes necessary to come into compliance. Regional offices would in such cases only need to verify compliance with whatever criteria had not been previously met, unless the amount of time that elapses between requests, or other factors, make a full re-evaluation necessary. Because facilities have this flexibility under the rules as proposed, we did not make any changes based on this comment.
We also do not agree that the criterion is inconsistent with section 1861(w)(1) of the Act, which permits providers to make arrangements for the provision of specific health services, nor do we believe adopting this criterion will undercut the ability of providers to have selective services provided under arrangements. In this regard, we point out that existing Medicare policy, stated in section 207 of the Medicare Hospital Manual (HCFA Publication 10), emphasizes the need for the hospital to exercise professional responsibility for the arranged-for services, not merely to serve as a billing mechanism for the other party. This is consistent with our view that section 1861(w)(1) was intended to allow specific health care services to be furnished under arrangements, but was never meant to be a vehicle by which a provider could nominally operate a facility or organization, but, in fact, contract out its operation to another entity. Finally, we note that while there are various sections of the hospital conditions of participation and the Provider Reimbursement Manual that recognize the possibility that specialized health care services or management services may be provided under contract, this does not indicate that providers may
Because of the direct relationship between the proposed changes in this section and those in § 489.24(b), comments on both proposals are discussed later, under § 489.24(b), “Special responsibilities of Medicare hospitals in emergency cases.”
We further state that we will not stop all payment in such cases, but instead, will adjust future payments to approximate as closely as possible the amounts that would be paid in the absence of a provider-based determination, if all other requirements for billing were met. We also explain that we will review previous payments and, if necessary, take action in accordance with the rules on inappropriate treatment of a facility or organization described above. The regulation states that we will determine whether the facility or organization qualifies for provider-based status under the criteria in this section. If we determine that the facility or organization qualifies for provider-based status, future payment for services at or by the facility or organization will be adjusted to reflect that determination. Even if the facility or organization does not qualify for provider-based status, however, we will continue paying, at an appropriately adjusted level, for a limited time period in order to avoid disruption of services to program beneficiaries at that site and to allow an orderly transition to freestanding status.
The notice of denial of provider-based status sent to the provider will ask the provider to notify us in writing, within 30 days of the date the notice is issued, as to whether the facility or organization (or, where applicable, the practitioners who staff the facility or organization) will be seeking to enroll and meet other requirements to bill for services in a free-standing facility. If the provider indicates that the facility, organization, or practitioners will not be seeking to enroll, or if we do not receive a response within 30 days of the date the notice was issued, all payment will end as of the 30th day after the date of notice. If the provider indicates that the facility or organization, or its practitioners, will be seeking to enroll and meet other requirements for billing for services in a free-standing facility, payment for services of the facility or organization will continue, at the adjusted amounts described in paragraph (j)(2) of this section for as long as is required for all billing requirements to be met (but not longer than 6 months) if—
• The facility or organization, or its practitioners, submit a complete enrollment application and provide all other required information within 90 days after the date of notice, and
• The facility or organization, or its practitioners, furnish all other information we need to process the enrollment application and verify that other billing requirements are met.
If the necessary applications or information are not provided, we will terminate all payment to the provider, facility, or organization as of the date we issue notice that necessary applications or information have not been submitted. We have clarified the final rule to state that these reductions will occur where inappropriate billing is or has been taking place.
Another commenter raised several arguments against the proposed change. The commenter stated that there is a legal and ethical conflict in requiring hospital personnel to leave an area of patient care and furnish assistance to another patient in a remote area of the hospital. The commenter also believes that ED personnel are not well-trained or practiced in immobilization or scene safety, and patients and staff may be put at risk if staff are asked to go into the field and render aid to a victim who needs the expert care and experience for which field emergency medical services (EMS) personnel are trained. Finally, the commenter expressed concern about possible increases in the liability insurance cost to hospitals as a result of the proposed change.
After review of the comments on this issue, we have decided to revise the regulations to state more clearly the extent of a hospital's EMTALA obligations with respect to patients who come to a hospital department located off the hospital's main campus. Provider-based entities, such as SNFs or HHAs, located off the hospital campus would not, of course, be subject to EMTALA since a patient coming to such an entity would not have come to the hospital. We will require that each off-campus hospital department, during its regular hours of operation, have in effect procedures for: (1) assessing the possibility that an emergency medical condition exists, and providing such screening (as defined in § 489.24(a) and (b)) and necessary stabilization (as defined in § 489.24(c)) at the off-campus site); (2) transporting the patient to the hospital's emergency room or department for screening and necessary stabilization meeting the requirements of § 489.24; or (3) providing an appropriate transfer to another facility in accordance with the requirements in § 489.24(c). To meet these requirements, the hospital will need to develop procedures that permit staff of the off-campus department to contact emergency physicians or other qualified emergency practitioners at the main hospital campus, to obtain advice and direction regarding the handling of any potential emergencies, and to obtain prompt medical transport, by hospital-owned or other ambulance or other appropriate vehicle, either to the main hospital campus or, where an appropriate transfer is being provided, to another medical facility.
Specifically, we are adding new paragraph (i) to § 489.24 to describe a hospital's obligations. The paragraph states that, if an individual comes to a facility or organization that is located off the main hospital campus as defined in § 413.65(b), but has been determined under § 413.65 of this chapter to be a department of the hospital, and a
The capability of the hospital includes that of the hospital as a whole, not just the capability of the off-campus facility or organization. Except for cases described in paragraph (i)(3)(iii) (those in which the main hospital campus does not have the specialized capability or facilities needed to treat the individual, or the individual's condition is deteriorating so rapidly that transport to the main campus would significantly jeopardize the life or health of the individual), the obligation of a hospital under this section must be discharged within the hospital as a whole. However, the hospital is not required to locate additional personnel or staff to off-site locations to be on standby for possible emergencies.
In § 489.24(i)(2), Protocols for off-campus departments, we further state that the hospital must establish protocols for the handling of potential emergency cases at off-campus departments. These protocols must include provision for direct contact between personnel at the off-campus department and emergency personnel at the main hospital campus, and may provide for dispatch of practitioners, when appropriate, from the main hospital campus to the off-campus department to provide screening or stabilization services. The intent of these requirements is to ensure timely exchange of information between the two sites, and to allow the hospital the flexibility to bring emergency personnel to the patient, rather than the opposite, where doing so is the best medical approach to meeting the patient's needs.
Under the final rule, if the off-campus department is an urgent care center, primary care center, or other facility that is routinely staffed by physicians, RNs, or LPNs, these personnel must be trained, and given appropriate protocols, for the handling of emergency cases. At least one individual on duty at the off-campus department during its regular hours of operation must be designated as a qualified medical person as described in paragraph (d). The qualified medical person must initiate screening of individuals who come to the off-campus department with a potential emergency medical condition, and may be able to complete the screening and provide any necessary stabilizing treatment at the off-campus department, or to arrange an appropriate transfer.
The final rule further states that if the off-campus department is a physical therapy, radiology, or other facility not routinely staffed with physicians, RNs, or LPNs, the department's personnel must be given protocols that direct them to contact emergency personnel at the main hospital campus for direction. Under this direction, and in accordance with protocols established in advance by the hospital, the personnel at the off-campus department must describe patient appearance and reported symptoms and, if appropriate, arrange transportation of the individual to the main hospital campus (if the main hospital campus has the capability required by the individual, and movement to the main campus would not significantly jeopardize the individual's life or health), or assist in an appropriate transfer. Movement of the individual to the main campus of the hospital is not considered a transfer under this section, since the individual is simply being moved from one department of a hospital to another department or facility of the same hospital.
Finally, specific rules apply if the individual's condition warrants movement to a facility other than the main hospital campus, either because the main hospital campus does not have the specialized capability or facilities required by the individual, or because the individual's condition is deteriorating so quickly that taking the time required to move the individual to the main hospital campus could place the life or health of the individual in significant jeopardy. Under these circumstances, personnel at the off-campus department must, in accordance with protocols established in advance by the hospital, assist in arranging an appropriate transfer of the individual to a medical facility other than the main hospital. The hospital must have protocols to ensure that the movement is an appropriate transfer in accordance with paragraph (d)(2) of this section. The protocol must include procedures and agreements established in advance with other hospitals or medical facilities in the area of the off-campus department to facilitate these anticipated transfers. We note that the interpretive guidelines for enforcement of EMTALA requirements will be revised to conform to these new rules.
We proposed to revise § 410.27, Outpatient Hospital Services and Supplies Incident to a Physician Service: Conditions, to require that services furnished at a location other than an RHC or an FQHC that we designate as having provider-based status under § 413.65 must be under the direct supervision of a physician as defined in § 410.32(b)(3)(ii).
Our intention in the proposed rule was to define “direct supervision” of hospital outpatient services incident to physician services when they are furnished at a department of a hospital to mean that a physician must be present on the premises of the entity accorded status as a department of the hospital and, therefore, immediately available to furnish assistance and direction for as long as patients are being treated at the site. By “direct supervision” we do not mean that the physician must physically be in the room where a procedure or service is furnished. Nor does the supervising physician necessarily have to be of the same specialty as the procedure or service that is being performed. We emphasize that our proposed amendment of § 410.27 to require direct supervision of hospital services furnished incident to a physician service to outpatients applies to services furnished at an entity that is located off the campus of a hospital that we designate as having provider-based status as a department of a hospital in accordance with the provisions of § 413.65. Our proposed amendment of § 410.27 to require direct supervision of hospital services furnished incident to a physician service to outpatients does not apply to services furnished in a department of a hospital that is located on the campus of that hospital. For hospital services furnished incident to a physician service to outpatients in a department of a hospital that is located on the campus of the hospital, we assume the direct supervision requirement to be met as we explain in section 3112.4(A) of the Intermediary Manual. The requirement at § 410.27 does not affect the definition of physician supervision in section 3112.4(A) of the Intermediary Manual. In response to these comments, we have revised our definition of “direct supervision by a physician” in the final regulation.
In our proposed rule, we proposed to require that the same supervision levels established for diagnostic x-ray and other diagnostic tests in accordance with § 410.32(b)(3) be required when these tests are furnished at an entity that has been accorded provider-based status by us.
The following are additional recommendations contained in the report on Medicare payment policy that the Medicare Payment Advisory Commission submitted to the Congress in March 1999. (MedPAC,
As an interim measure, MedPAC recommends, with reservations, that HCFA evaluate facility-level adjustments in order to preserve access to care for particularly vulnerable segments of the Medicare population.
We agree that we should evaluate the need for facility-level adjustments. We believe the best course is to evaluate the need for these adjustments during the next several years as we gain actual experience with the operation of the hospital outpatient PPS and are able to observe the effects on particular provider groups. In consideration of the transitional protections provided by the BBRA 1999, we have not adopted facility-level adjustments, other than an adjustment for local labor costs, at this time.
MedPAC points out that HCFA, in setting Medicare payment rates for hospital inpatient services, adjusts payments based on the costs or provider characteristics of hospitals (for example, sole community hospitals). Rather than continuing this practice in the outpatient setting, MedPAC recommends that HCFA move toward making adjustments based on patient characteristics and the relative costliness of resources required in furnishing care to differing patients. Any differences in the payment of the same ambulatory care service should be based on patient characteristics, rather than on the setting. MedPAC recommends that HCFA evaluate any relationships between immutable patient characteristics and the cost of furnishing care.
The provisions of this final rule reflect the provisions of the September 8, 1998 proposed rule, except as noted elsewhere in this preamble. Following is a synopsis of the major changes we have made, either in response to comments or in order to implement provisions of the BBRA 1999 that apply to the hospital outpatient prospective payment system.
For our proposal to adjust the CY 2002 update of the conversion factor by the percentage that actual CY 2000 payments exceed the estimated CY 2000 expenditure target, we are delaying implementation of the volume control mechanism for 2 years.
For our proposal to package costs that are directly related and integral to performing a procedure or furnishing a service on an outpatient basis, we are making the following changes:
• We are creating separate APC groups to pay for blood, blood products, and anti-hemophilic factors, for splints and casts, and for certain very costly drugs that are not included in the transitional pass-through payment provision.
• We are paying separately, at cost, for the acquisition of corneal tissue.
• As required by section 201(e) of the BBRA 1999, we are
For our proposal to base payment for medical visits to clinics and emergency departments on diagnosis codes as well as HCPCS codes, we are not using diagnosis codes at this time.
For our proposal to classify a new technology procedure or service within the APC group that it most closely resembles in terms of clinical characteristics and resource utilization, pending collection of additional pricing data, we are creating separate APC groups to which we can temporarily classify new technology services while we gather additional data and gain pricing experience. We are also creating a process under which interested parties may submit requests for consideration of services that may be eligible for payment as new technology.
For our proposal to pay for drugs, pharmaceuticals, and biologicals (except for cancer therapy drugs and certain infrequently used but very expensive drugs) as part of the APC payment for the service or procedure with which they are used, we are establishing transitional pass-through payments, as directed by section 201(b) of the BBRA 1999. Under this provision, an additional payment will be made for current orphan drugs, current cancer therapy drugs, biologicals, and brachytherapy, and current radiopharmaceutical drugs and biological products.
For our proposal to classify a new or innovative medical device, drug or biological (for which we were not making payment as of December 31, 1996) within the APC group that it most closely resembles in terms of clinical characteristics and resource utilization, pending collection of additional pricing data, we are establishing transitional pass-through payments. Under this provision, as directed by section 201(b) of the BBRA 1999, an additional payment will be made for new or innovative devices, drugs, and biologicals whose cost is not insignificant in relation to the APC payment for the group of services with which they are used.
For our proposal not to establish an outlier adjustment, as directed by section 201(a) of the BBRA 1999, we will make an outlier payment when calculated bill costs exceed 2.5 times the PPS payment for a service.
For our proposal to determine comparability of resources and clinical characteristics among the codes within an APC group based on our claims data and the analyses and judgment of our medical advisors, supported by comments from medical specialty societies and trade associations, as provided in section 201(g) of the BBRA 1999, we are limiting the variation so that the highest median cost of an item or service in an APC group is no more than two times the lowest median cost of an item or service within that group. We will also consult with an expert outside advisory panel regarding the clinical integrity of the APC groups and weights as part of our update of the PPS.
For our proposal to periodically review and update payment weights, APC groups, and other elements of the hospital outpatient PPS, as required by section 201(h) of the BBRA 1999, we will annually review the groups, relative payment weights, and the wage and other adjustments that are a part of the PPS.
For our proposal to implement the hospital outpatient PPS fully and in its entirety for all hospitals beginning as early as possible in CY 2000, with no phase-in period, as required by section 202(a) of the BBRA 1999, we are establishing transitional corridors for services furnished before January 1, 2004 to limit losses facilities might otherwise face.
For our proposal not to make any adjustments for any specific classes of hospitals, we are holding small rural hospitals harmless through CY 2003 in accordance with the requirements set by section 202(a)(3) of the BBRA 1999,
For our proposal on beneficiary coinsurance payment amounts, we are limiting the coinsurance amount for a procedure to be no more than the hospital inpatient deductible, as specified in section 204(a)(3) of the BBRA 1999.
The following is a synopsis of the principal changes that we are making in the provider-based requirements:
For our proposal to require main providers and provider-based entities to share a common license, we will require common licensure only where State law permits it. Where State law prohibits it or is silent, we will not apply the licensure requirement. We will also exempt IHS facilities and facilities located on Tribal lands from this requirement.
For our proposal requiring a main provider and a provider-based entity to serve a common service area indicated largely by overlapping patient populations, we have redefined “common service area” to mean a 75 percent threshold of patients who reside in a zip code area that is common to the main provider and the provider-based entity.
For our proposal to require provider-based entities to be in the same State as the main provider, we will allow providers in one State to have provider-based facilities in an adjacent State, if doing so is consistent both with the law of the affected States and with other criteria, including those related to a common service area.
For our proposal to require that a provider-based outpatient department bill all payers as an outpatient department, we have rescinded this requirement.
For our proposal to require FQHCs that have been billing Medicare as hospital outpatient departments to comply with the provider-based requirements, we are grandfathering both FQHCs and FQHC “look-alikes” (facilities that are organized as FQHCs but do not receive grants) so that these facilities will be considered departments of providers without having to meet § 413.65 requirements.
For our proposal to apply the provider-based requirements to Indian Health Service (including tribally operated) entities, we are creating a permanent exception for those entities that were billing as departments of IHS or Tribal hospitals on or before October 10, 2000.
For our proposal to consider provider-based entities to be part of the hospital for Emergency Medical Treatment and Active Labor Act (EMTALA) (“anti-dumping” purposes), we are maintaining the principle that off-site hospital facilities are subject to EMTALA. We have clarified the obligations of hospitals with respect to these locations to ensure they are consistent with staffing patterns and resources.
For our proposal to apply provider-based criteria to inpatient facilities such as multi-campus hospitals created by mergers and satellites of PPS-excluded hospitals that are created by hospitals leasing space in other hospitals, we have clarified the applicability of provider-based criteria to remote locations of hospitals and hospital satellite facilities.
Under the Paperwork Reduction Act (PRA) of 1995, we are required to provide 30-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We are soliciting public comment on each of these issues for the provisions summarized below that contain information collection requirements:
The burden associated with this requirement is the time for the main provider to report its acquisition to HCFA, furnish all information needed for a determination, report to HCFA any material change in the relationship between it and any provider-based facility or organization, such as a change in ownership of the facility or organization or entry into a new or different management contract that could affect the provider-based status of the facility or organization. It is estimated that 105 main providers will take 10 hours for a total of 1,050 hours.
The burden associated with this requirement is the time for the provider to disseminate information to each beneficiary of the beneficiary's potential financial liability (that is, a coinsurance liability for a facility visit as well as for the physician service). It is estimated that 750 providers will make on average 667 disclosures on an annual basis, at 3 minutes per disclosure, for a total annual burden of 25,013 hours.
Further, if the provider indicates that the facility or organization, or its practitioners, will be seeking to meet enrollment and other requirements for billing for services in a free-standing facility, the facility or organization must submit a complete enrollment application and provide all other required information within 90 days after the date of notice; and the facility or organization, or its practitioners, furnish all other information needed by HCFA to process the enrollment application and verify that other billing requirements are met. The requirements and burden associated with the provider enrollment process are currently approved under OMB control number 0938-0685, with a current expiration date of September 30, 2001.
The burden associated with these requirements is the time it takes a hospital to compile, review, and analyze data for both revenues and coinsurance; prepare and present the data to the hospital board; make a business decision as to whether the hospital would elect to reduce coinsurance; and then notify its fiscal intermediary of its election. A hospital would notify its fiscal intermediary of its election to reduce coinsurance only if there were other providers, in close proximity, that would attract a majority of the hospital's business if they did not reduce their coinsurance. Since hospitals do not want to lose money by absorbing coinsurance, we anticipate that this requirement will affect 750 hospitals and take them 10 hours each for a total of 7,500 hours.
The burden associated with this requirement is the time for the hospital to disseminate information concerning its coinsurance election. It is estimated that 750 hospitals will each take 10 hours annually to disseminate this information via newsletters and information sessions at senior citizen centers for a total of 7,500 hours.
We have submitted a copy of this final rule to OMB for its review of the information collection requirements. These requirements are not effective until they have been approved by OMB. A notice will be published in the
If you comment on any of these information collection and record keeping requirements, please mail copies directly to the following:
Because of the large number of items of correspondence we normally receive on
Section 804(2) of title 5, United States Code (as added by section 251 of Pub. L. 104-121), specifies that a “major rule” is any rule that the Office of Management and Budget finds is likely to result in—
• An annual effect on the economy of $100 million or more;
• A major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or
• Significant adverse effects on competition, employment, investment productivity, innovation, or on the ability of United States based enterprises to compete with foreign-based enterprises in domestic and export markets.
We estimate, based on a simulation model, that the effect on hospitals participating in the Medicare program associated with this final rule would be to increase Medicare payments by $600 million in calendar year 2000. This figure includes beneficiary copayments. We estimate that the additional expenditures to hospitals from the Part B Trust Fund associated with this final rule will be $490 million in fiscal year 2000. Therefore, this rule is a major rule as defined in Title 5, United States Code, section 804(2).
We have examined the impacts of this final rule as required by Executive Order 12866, the Unfunded Mandates Reform Act of 1995, and the Regulatory Flexibility Act (RFA) (Public Law 96-354). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more annually). Because the projected spending resulting from this final rule is expected to exceed $100 million, it is considered a major rule for purposes of the RFA.
The Unfunded Mandates Reform Act of 1995 also requires (in section 202) that agencies prepare an assessment of anticipated costs and benefits for any rule that may result in an expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million. This final rule does not mandate any requirements for State, local, or tribal governments.
We generally prepare a regulatory flexibility analysis that is consistent with the RFA (5 U.S.C. 601 through 612), unless we certify that a final rule will not have a significant economic impact on a substantial number of small entities. For purposes of the RFA, we consider all hospitals to be small entities.
Also, section 1102(b) of the Social Security Act requires us to prepare a regulatory impact analysis for any final rule that may have a significant impact on the operations of a substantial number of small rural hospitals. Such an analysis must conform to the provisions of section 604 of the RFA. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital with fewer than 100 beds that is located outside of a Metropolitan Statistical Area (MSA) or New England County Metropolitan Area (NECMA). Section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New England counties as belonging to the adjacent NECMA. Thus, for purposes of the proposed prospective payment system, we classify these hospitals as urban hospitals.
Our Office of the Actuary projects that the additional benefit expenditures from the Part B Trust Fund resulting from implementation of the hospital outpatient PPS for hospital outpatient services furnished on or after July 1, 2000, and the hospital outpatient provisions enacted by the BBRA 1999, are as follows:
The primary objective of the hospital outpatient prospective payment system is to simplify the payment system and encourage hospital efficiency in providing outpatient services, while at the same time ensuring that payments are sufficient to compensate hospitals adequately for their legitimate costs. Another important goal of the new system is to reduce beneficiaries' share of outpatient payment to hospitals by freezing coinsurance amounts at an absolute level until they equal 20 percent of the total payment amounts.
We believe that implementation of the final PPS will ultimately further each of these goals while maintaining the financial viability of the hospital industry and ensuring access to high quality health care for Medicare beneficiaries. We expect that the provisions of this final rule with comment period will ensure that the outcomes of the PPS are reasonable and equitable while avoiding or minimizing unintended adverse consequences.
The following quantitative analysis presents the projected effects of our policy changes resulting from comments, as well as statutory changes enacted by the BBRA 1999, on various hospital groups. We use the best data available. In addition, we do not make adjustments for future changes in such variables as volume and intensity. For this final rule with comment period, we are soliciting comments and information about the anticipated effects of the changes on hospitals resulting from implementation of the hospital outpatient provisions of the BBRA 1999, and our methodology for estimating them.
The outpatient prospective payment system encompasses nearly all hospitals that participate in the Medicare program. However, Maryland hospitals that are paid under a cost containment waiver in accordance with section 1814(b)(3) of the Act are excluded from the PPS. Critical access hospitals (CAHs) are also excluded and are paid at cost under section 1834(g) of the Act.
We have analyzed the impact on hospital payment under the outpatient PPS. Our analysis compares the payment impact of PPS compared to current law. The definition and calculation of current law used in the impact analysis is the same used in estimating the conversion factor. That is, current law reflects pre-PPS payment methodologies in effect on January 1, 2000, and prior to July 1, 2000, which include the elimination of the formula-driven overpayment and application of the capital and operating cost reductions. A detailed explanation of the current law calculation can be found in section III.E.2.a.
The data used in developing the quantitative analyses presented below are taken from the CY 1996 cost and charge data and the most current provider-specific file that is used for payment purposes. Our analysis has several qualifications. First, we draw upon various sources for the data used to categorize hospitals in Table 2, below. In some cases, there is a degree of variation in the data from the different sources. We have attempted to construct these variables with the best available source overall. For individual hospitals, however, some miscategorizations are possible.
Using CY 1996 cost and charge data, we simulated payments using the pre-PPS and PPS payment methodologies. Although we used only single-procedure/visit bills to determine APC relative payment weights, we used both single and multiple-procedure bills in the conversion factor and service mix calculations, regressions, and impact analyses. Both pre-PPS and PPS payment estimates include operating and capital costs, adjusted to the calendar year 1996 cost reporting period. We excluded Kaiser, New York Health and Hospital Corporation, and all-inclusive providers because reported charges on their cost reports are not actual charges. Cost-to-charge ratios for these hospitals are not comparable to all other hospitals. The excluded Maryland hospitals were not included in the calculation of the conversion factor and the simulations; however, we did include the 10 cancer hospitals that will be paid under the PPS.
We also trimmed outlier hospitals from the impact analysis because inclusion of hospitals with extremely high and low unit costs would not allow us to assess the impacts among the various classes of hospitals accurately. First, we identified all of the outlier hospitals by using an edit of 3 standard deviations from the mean of the logged unit costs. Trimming the data in this manner ensures that only the hospitals with aberrantly high and low costs are eliminated from the impact analysis. In doing this, we removed 97 hospitals of which 41 hospitals had extremely low unit costs and 56 hospitals had extremely high unit costs. We conducted a thorough analysis of these hospitals to ensure that we did not remove any particular type of hospital (for example, teaching hospitals) that would further harm the integrity of the data. We speculate that many of these hospitals are not coding accurately, and we will continue to perform further analysis in this area following implementation of the PPS.
After we removed the 58 excluded Maryland hospitals, the all-inclusive rate hospitals, the statistical outlier hospitals, and hospitals for which we could not identify payment variables, we used the remaining 5,362 hospitals as the basis for our analysis. Table 2, Annual Impact of Outpatient Prospective Payment System in CY2000-CY2001, below, demonstrates the results of our analysis. The table categorizes hospitals by various geographic and special payment consideration groups to illustrate the varying impacts on different types of hospitals. The first column represents the number of hospitals in each category. The second column shows the hospitals' Medicare outpatient payments under the current (non-PPS) payment system as a percentage of the hospitals' total Medicare payment. The third and fourth columns show the impact of the PPS
The first row of Table 2 shows the overall impact on the 5,362 hospitals included in the analysis. We included as much data as possible to the extent that we were able to capture all the provider information necessary to determine payment. Our estimates include the same set of services for both pre-PPS and PPS payments so that we could determine the impact of the PPS as accurately as possible. Because payment under the hospital outpatient PPS can only be determined if bills are accurately coded, the data upon which the impacts were developed do not reflect all CY 1996 hospital outpatient services, but only those that were coded using valid HCPCS codes.
The second row of Table 2 shows the overall impact of the PPS on the 4,828 hospitals that remain when we exclude psychiatric, long-term care, children's, and rehabilitation hospitals.
The next four rows of the table contain hospitals categorized according to their geographic location (all urban, which is subdivided into large urban and other urban, and rural). We include 2,665 hospitals located in urban areas (MSAs or NECMAs) in our analysis. Among these, 1,505 hospitals are located in large urban areas (populations over 1 million), and 1,160 hospitals are located in other urban areas (populations of 1 million or less). In addition, we include 2,160 hospitals located in rural areas in our analysis. The next two groupings are by bed-size categories, shown separately for urban and rural hospitals. The next category groups urban and rural hospitals by volume of outpatient services. We then show the distribution of urban and rural hospitals by regional census divisions.
The next three categories group hospitals according to whether or not they have residency programs (teaching hospitals that receive an indirect medical education (IME) adjustment), receive disproportionate share hospital (DSH) payments, or some combination of these two adjustments. In our analysis we show the impact of the PPS on the 3,738 nonteaching hospitals, the 821 teaching hospitals with fewer than 100 residents, and the 269 teaching hospitals with 100 or more residents.
In the DSH categories, hospitals are grouped according to their DSH payment status. The next category groups hospitals considered urban after geographic reclassification, in terms of whether they receive the IME adjustment, the DSH adjustment, both, or neither. The next five rows examine the impacts of the changes on rural hospitals by special payment groups (rural referral centers (RRCs), sole community hospitals/essential access community hospitals (SCHs/EACHs), Medicare dependent hospitals (MDHs), and hospitals that are both SCHs and
The next grouping is based on type of ownership. These data are taken primarily from the FY 1996 Medicare cost report files, if available; otherwise, earlier cost report data are used.
The final two groups are specialty hospitals. The first set includes eye and ear hospitals, trauma hospitals (hospitals having a level one trauma center), and cancer hospitals, which are TEFRA hospitals. The last group lists all other TEFRA hospitals, specifically, rehabilitation, psychiatric, long-term care, and children's hospitals.
Column 3 compares our estimate of PPS payments without application of the BBRA 1999 transitional corridors, but incorporating policy changes and all other BBRA 1999 provisions contained in this final rule, to our estimate of payments under the current system. The percent differences shown in columns 3 and 4 between current and PPS payment (without the BBRA 1999 transitional corridors) reflect the impact of the BBRA 1999 outlier and pass-through payment adjustments and nonbudget-neutral hold-harmless provisions for cancer hospitals, as well as distributional differences attributable to variation in cost and charge structures among hospitals.
The percent changes in columns 5 and 6 are the result of comparing our estimate of PPS payments with application of the BBRA 1999 transitional corridors, as well as the statutory and policy changes contained in this final rule, to our estimate of payments under the pre-PPS system. Percent differences between the pre-PPS and the PPS payment (with the BBRA 1999 transition) reflect the combined impact of the transitional corridor adjustments, outlier and pass-through payment adjustments and the hold-harmless provision for cancer hospitals, in addition to distributional differences attributable to variation in cost and charge structures among hospitals.
Basing the conversion factor on pre-PPS program and pre-PPS beneficiary payments and on budget-neutral outlier and pass-through adjustments results in no net change in payments to hospitals overall relative to pre-PPS payments. (As noted above, in section III.E.2 of this preamble, pursuant to section 201(l) of the BBRA 1999, we set the conversion factor by estimating pre-PPS rather than PPS copayments.) However, the BBRA hold-harmless provision for cancer hospitals results in a 0.2 percent increase in payments to hospitals overall because this provision is not budget neutral. Including the BBRA 1999 transitional corridor adjustments further increases payment to hospitals overall. We estimate that in calendar year 2000, payment will increase by an annual rate of 4.6 percent under the PPS compared to the pre-PPS payments.
Without the BBRA 1999 transitional corridor payments, the impact on short-term acute care hospitals is negative for a substantial number of hospital classifications. That is, for certain groups of hospitals, payments under the PPS without the transitional corridor payments would be several percentage points below pre-PPS payments. For nearly all of these hospital groups, the BBRA 1999 transitional corridor payments mitigate this negative impact. In addition, hospital groups that experience net gains without the BBRA 1999 transitional corridor payments experience even greater gains with them. The reason is that even though the average impact for hospitals in these groups is positive, some individual hospitals experience net losses in payments and, thus, benefit from the transitional corridor payments. The hospital groups that gain without the transitional corridor payments receive even greater increases in payments with the transitional corridor payments. The following discussion highlights some of the changes in payments among hospital classifications.
Comparing the pre-PPS and PPS payment estimates, payment to low-volume hospitals would decrease substantially without the BBRA 1999 transitional corridor payments (12.2 percent annually for rural and 7.7 percent annually for urban hospitals with fewer than 5,000 units of service). These hospitals experience a net gain with the BBRA 1999 transitional corridor payments (2.5 percent annually and 0.2 percent annually for low-volume rural and urban hospitals, respectively), although these payment increases are relatively small compared to the 4.6 percent annual increase for hospitals overall. We believe several factors contribute to this outcome, including undercoding, lack of economies of scale, and the reliance on the median instead of the geometric mean in the calculation of APC weights. The majority of these hospitals (about 75 percent) are rural. For these small hospitals, some of the higher standardized unit costs could be attributed to economies of scale. These low-volume rural hospitals also receive a greater percentage of their Medicare income (18.5 percent) from outpatient services than the national average (9.9 percent).
Major teaching hospitals, whose payments would decrease annually by 3.7 percentage points without the BBRA 1999 transitional corridor payments, gain 2.6 percent annually with the BBRA 1999 transitional corridor payments relative to pre-PPS payments. Major teaching hospitals receive less of their total Medicare income (9.1 percent) from outpatient services than the national average. This results in a 0.2 percent annual gain in their total Medicare payments. Minor teaching and nonteaching hospitals would experience marginal gains in outpatient payment without the BBRA 1999 transitional corridor payments. Payment to both hospital groups increases by 5.0 percent annually relative to the pre-PPS payment system.
Without the BBRA 1999 transitional corridor payments, hospitals with a high percentage of low-income patients (disproportionate share patient percentage greater than or equal to 0.35) would have a 2.5 percent annual decrease in payment relative to pre-PPS payments. But payments to these hospitals increase annually by 3.5 percent relative to pre-PPS payments with the BBRA 1999 transitional corridor payments. These hospitals have lower than average volume, and, like major teaching hospitals, receive a smaller than average percentage of their Medicare income from outpatient services. Thus, their total Medicare payments increase marginally, by 0.3 percent, with the BBRA 1999 transitional corridor payments.
Without the BBRA 1999 adjustments, payment to rural hospitals would decrease 1.8 percent annually and payment to large urban hospitals would decrease 0.3 percent annually, while payment to other urban hospitals would increase 1.8 percent annually relative to pre-PPS payments. These hospitals all experience net gains in PPS payment with the BBRA 1999 transitional corridor payments, at an annual rate of 4.4 percent, 4.3 percent, and 5.1 percent, respectively. Even though rural hospitals receive a greater percentage of their Medicare income (14.7 percent) from outpatient services compared to the national average, their total Medicare payments increase by only a fraction, 0.6 percent.
Negative impacts for urban hospitals in the Mid-Atlantic and the West North Central regions are also reversed under
The impact on TEFRA hospitals is shown separately at the end of the table. The TEFRA hospitals were not included in determining the impact on any of the other categories discussed above (for example, geographic location, bed size, volume, etc.). These hospitals demonstrated a very low service mix, but an average unit cost that approximates the national average. We believe that undercoding or billing an all-inclusive rate could account for their low-volume, low-service mix, and average cost per unit. We expect that once these hospitals begin to code services accurately under the PPS, payments will more closely approximate pre-PPS payments.
If the effect of the BBRA 1999 transition payments were removed, differences between pre-PPS payments and PPS payments among hospitals would still exist. These distributional differences are the result of many factors. First, cost variations among hospitals result in differences between pre-PPS payments and PPS payments, and charge structure variations result in differences between pre-PPS payments and PPS beneficiary copayment amounts. Hospitals whose costs are low relative to payment would gain under the PPS even without the BBRA 1999 transitional corridor payments. Because the transitional corridor payments are not budget neutral, these hospitals continue to gain relative to pre-PPS payments.
Redistributions may also occur as a result of current payment methods. Total Medicare outpatient payments are less than reported total costs because (in addition to the 5.8 and 10 percent reductions for operating and capital costs) the blended payment methods applicable to many surgical and diagnostic services often result in payments that are less than reported costs. Other services such as medical visits, chemotherapy services, and non-ASC approved surgeries are paid based on hospital costs. The new system redistributes the current total Medicare payments, based in part on cost-based payments and in part on blended payment amounts, across all services. Hospitals, in the aggregate, will receive proportionately less for services that are currently paid based on costs, and more for services that had been paid under blended payment methods.
We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this final rule will not have any negative impact on the rights, roles, and responsibilities of State, local or Tribal governments.
We ordinarily publish a notice of proposed rulemaking in the
The BBRA 1999 was enacted on November 29, 1999. This final rule incorporates the following hospital outpatient PPS provisions in the BBRA 1999: outlier adjustment for high cost cases; transitional pass-through payment adjustments for additional costs (over the payments for APCs otherwise made) for new medical devices, drugs, and biologicals; definition of APCs so that the variation of costs of items within an APC is subject to certain limits; establishment of “transitional corridors” for the first 3
As discussed earlier in this rule, July 1, 2000 is the earliest date on which we can feasibly implement the PPS. The provisions of the BBRA 1999, enacted on November 29, 1999, made numerous refinements to the PPS. With respect to the BBRA 1999 provisions, it would have been impracticable to complete notice and comment procedures by July 1, 2000. Given the limited timeframe, given the nature and scope of the BBRA 1999 refinements, and given the time required to complete notice and comment rulemaking (to develop proposed policies, draft the proposed rule, provide a 60-day public comment period, consider public comments, develop final policies, draft a final rule), it would not have been possible to issue this document as a proposed rule and issue a final rule by July 1.
In addition, it would not be feasible to implement the hospital outpatient PPS
Accordingly, we find good cause to waive the procedures for
Health facilities, Medicare.
Health facilities, Health professions, Kidney diseases, Laboratories, Medicare, Rural areas, X-rays.
Kidney diseases, Medicare, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements.
Health facilities, Kidney diseases, Medicare, Puerto Rico, Reporting and recordkeeping requirements.
Health facilities, Hospitals, Medicare.
Emergency medical services, Health facilities, Health professions, Medicare.
Health facilities, Medicare, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
Administrative practice and procedure, Archives and records, Grant program—social programs, Maternal and Child Health, Medicaid, Medicare, Penalties.
For the reasons set forth in the preamble, 42 CFR chapter IV is amended as follows:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(b)
(1) Posthospital SNF care, as described in § 409.20, furnished by a hospital or a critical access hospital that has a swing-bed approval.
(2) Nursing facility services, described in § 440.155 of this chapter, that may be furnished as a Medicaid service under title XIX of the Act in a swing-bed hospital that has an approval to furnish nursing facility services.
(3) Physician services that meet the requirements of § 415.102(a) of this chapter for payment on a fee schedule basis.
(4) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act.
(5) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(6) Certified nurse mid-wife services, as defined in section 1861(gg) of the Act.
(7) Qualified psychologist services, as defined in section 1861(ii) of the Act.
(8) Services of an anesthetist, as defined in § 410.69 of this chapter.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
As used in this part—
(1) Provides outpatient services, including specialized outpatient services for children, the elderly, individuals who are chronically mentally ill, and residents of its mental health service area who have been discharged from inpatient treatment at a mental health facility;
(2) Provides 24-hour-a-day emergency care services;
(3) Provides day treatment or other partial hospitalization services, or psychosocial rehabilitation services;
(4) Provides screening for patients being considered for admission to State mental health facilities to determine the appropriateness of this admission; and
(5) Meets applicable licensing or certification requirements for CMHCs in the State in which it is located.
(a) Medicare Part B pays for hospital services and supplies furnished incident to a physician service to outpatients, including drugs and biologicals that cannot be self-administered, if—
(1) They are furnished—
(iii) In the hospital or at a location (other than an RHC or an FQHC) that HCFA designates as a department of a provider under § 413.65 of this chapter; and
(e) Services furnished by an entity other than the hospital are subject to the limitations specified in § 410.42(a).
(f) Services furnished at a location (other than an RHC or an FQHC) that HCFA designates as a department of a provider under § 413.65 of this chapter must be under the direct supervision of a physician. “Direct supervision” means the physician must be present and on the premises of the location and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed.
(c) Diagnostic services furnished by an entity other than the hospital or CAH are subject to the limitations specified in § 410.42(a).
(e) Medicare Part B makes payment under section 1833(t) of the Act for diagnostic services furnished at a facility (other than an RHC or an FQHC) that HCFA designates as having provider-based status only when the diagnostic services are furnished under the appropriate level of physician supervision specified by HCFA in accordance with the definitions in § 410.32(b)(3)(i), (b)(3)(ii), and (b)(3)(iii). Under general supervision at a facility accorded provider-based status, the training of the nonphysician personnel who actually perform the diagnostic procedure and the maintenance of the necessary equipment and supplies are the continuing responsibility of the facility.
(a)
(b)
(1) Physician services that meet the requirements of § 415.102(a) of this chapter for payment on a fee schedule basis.
(2) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act.
(3) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(4) Certified nurse mid-wife services, as defined in section 1861(gg) of the Act.
(5) Qualified psychologist services, as defined in section 1861(ii) of the Act.
(6) Services of an anesthetist, as defined in § 410.69.
(7) Services furnished to SNF residents as defined in § 411.15(p) of this chapter.
(b) The following services are separately covered and not paid as partial hospitalization services:
(1) Physician services that meet the requirements of § 415.102(a) of this chapter for payment on a fee schedule basis.
(2) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act.
(3) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(4) Qualified psychologist services, as defined in section 1861(ii) of the Act.
(5) Services furnished to SNF residents as defined in § 411.15(p) of this chapter.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
The following services are excluded from coverage:
(m)
(2)
(3)
(iii) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a) The applicable payments made under the prospective payment systems, as described in subparts H and M of this part, are payment in full for all inpatient hospital services, as defined in § 409.10 of this chapter. Inpatient hospital services do not include the following types of services:
(1) Physician services that meet the requirements of § 415.102(a) of this chapter for payment on a fee schedule basis.
(2) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act.
(3) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(4) Certified nurse mid-wife services, as defined in section 1861(gg) of the Act.
(5) Qualified psychologist services, as defined in section 1861(ii) of the Act.
(6) Services of an anesthetist, as defined in § 410.69 of this chapter.
(b) HCFA does not pay any provider or supplier other than the hospital for services furnished to a beneficiary who is an inpatient, except for the services described in paragraphs (a)(1) through (a)(6) of this section.
Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and (n), 1871, 1881, 1883, and 1886 of the Social Security Act (42 U.S.C. 1302, 1395f(b), 1395g, 1395l, 1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww).
(d)
(6)
(ii) Costs of free-standing entities may not be shown in the provider's trial balance for purposes of stepping down overhead costs to these entities. The provider must develop detailed work papers showing the exact cost of the services (including overhead) provided to or by the free-standing entity and show those carved out costs as
(a)
(2)
(b)
(2) A main provider or a facility or organization must contact HCFA and the facility or organization must be determined by HCFA to be provider-based before the main provider bills for services of the facility or organization as if the facility or organization were provider-based, or before it includes costs of those services on its cost report.
(3) A facility that is not located on the campus of a hospital and is used as a site of physician services of the kind ordinarily furnished in physician offices will be presumed to be a free-standing facility, unless it is determined by HCFA to have provider-based status.
(c)
(2) A main provider that has had one or more facilities or organizations considered provider-based also must report to HCFA any material change in the relationship between it and any provider-based facility or organization, such as a change in ownership of the facility or organization or entry into a new or different management contract that could affect the provider-based status of the facility or organization.
(d)
(1)
(2)
(i) The business enterprise that constitutes the facility or organization is 100 percent owned by the provider.
(ii) The main provider and the facility or organization seeking status as a department of the provider, remote location of a hospital, or satellite facility have the same governing body.
(iii) The facility or organization is operated under the same organizational documents as the main provider. For
(iv) The main provider has final responsibility for administrative decisions, final approval for contracts with outside parties, final approval for personnel actions, final responsibility for personnel policies (such as fringe benefits/code of conduct), and final approval for medical staff appointments in the facility or organization.
(3)
(i) The facility or organization is under the direct supervision of the main provider.
(ii) The facility or organization is operated under the same monitoring and oversight by the provider as any other department of the provider, and is operated just as any other department of the provider with regard to supervision and accountability. The facility or organization director or individual responsible for daily operations at the entity—
(A) Maintains a reporting relationship with a manager at the main provider that has the same frequency, intensity, and level of accountability that exists in the relationship between the main provider and its departments; and
(B) Is accountable to the governing body of the main provider, in the same manner as any department head of the provider.
(iii) The following administrative functions of the facility or organization are integrated with those of the provider where the facility or organization is based: billing services, records, human resources, payroll, employee benefit package, salary structure, and purchasing services. Either the same employees or group of employees handle these administrative functions for the facility or organization and the main provider, or the administrative functions for both the facility or organization and the entity are—
(A) Contracted out under the same contract agreement; or
(B) Handled under different contract agreements, with the contract of the facility or organization being managed by the main provider.
(4)
(i) Professional staff of the facility or organization have clinical privileges at the main provider.
(ii) The main provider maintains the same monitoring and oversight of the facility or organization as it does for any other department of the provider.
(iii) The medical director of the facility or organization seeking provider-based status maintains a reporting relationship with the Chief Medical Officer or other similar official of the main provider that has the same frequency, intensity, and level of accountability that exists in the relationship between the medical director of a department of the main provider and the Chief Medical Officer or other similar official of the main provider, and is under the same type of supervision and accountability as any other director, medical or otherwise, of the main provider.
(iv) Medical staff committees or other professional committees at the main provider are responsible for medical activities in the facility or organization including quality assurance, utilization review, and the coordination and integration of services, to the extent practicable, between the facility or organization seeking provider-based status and the main provider.
(v) Medical records for patients treated in the facility or organization are integrated into a unified retrieval system (or cross reference) of the main provider.
(vi) Inpatient and outpatient services of the facility or organization and the main provider are integrated, and patients treated at the facility or organization who require further care have full access to all services of the main provider and are referred where appropriate to the corresponding inpatient or outpatient department or service of the main provider.
(5)
(6)
(7)
(i) The facility or organization demonstrates a high level of integration with the main provider by showing that it meets all of the other provider-based criteria, and demonstrates that it serves the same patient population as the main provider, by submitting records showing that, during the 12-month period immediately preceding the first day of the month in which the application for provider-based status is filed with HCFA, and for each subsequent 12-month period—
(A) At least 75 percent of the patients served by the facility or organization reside in the same zip code areas as at least 75 percent of the patients served by the main provider;
(B) At least 75 percent of the patients served by the facility or organization who required the type of care furnished by the main provider received that care from that provider (for example, at least 75 percent of the patients of an RHC seeking provider-based status received inpatient hospital services from the hospital that is the main provider); or
(C) If the facility or organization is unable to meet the criteria in paragraph (d)(7)(i)(A) or (d)(7)(i)(B) of this section because it was not in operation during all of the 12-month period described in the previous sentence, the facility or organization is located in a zip code area included among those that, during all of the 12-month period described in the previous sentence, accounted for at least 75 percent of the patients served by the main provider.
(ii) A facility or organization is not considered to be in the “immediate vicinity” of the main provider unless the facility or organization and the main provider are located in the same State or, where consistent with the laws of both States, adjacent States.
(iii) A rural health clinic that is otherwise qualified as a provider-based entity of a hospital that is located in a rural area, as defined in § 412.62(f)(1)(iii) of this chapter, and has fewer than 50 beds, as determined under § 412.105(b) of this chapter, is not subject to the criterion in this paragraph (d)(7).
(e)
(f)
(1) The staff of the facility or organization, other than management staff, are employed by the provider or by another organization, other than the management company, which also employs the staff of the main provider.
(2) The administrative functions of the facility or organization are integrated with those of the main provider, as determined under criteria in paragraph (d)(3)(iii) of this section.
(3) The main provider has significant control over the operations of the facility or organization as determined under criteria in paragraph (b)(3)(ii) of this section.
(4) The management contract is held by the main provider itself, not by a parent organization that has control over both the main provider and the facility or organization.
(g)
(2) Physician services furnished in hospital outpatient departments or hospital-based entities (other than RHCs) must be billed with the correct site-of-service indicator, so that applicable site-of-service reductions to physician and practitioner payment amounts can be applied.
(3) Hospital outpatient departments must comply with all the terms of the hospital's provider agreement.
(4) Physicians who work in hospital outpatient departments or hospital-based entities are obligated to comply with the non-discrimination provisions in § 489.10(b) of this chapter.
(5) Hospital outpatient departments (other than RHCs) must treat all Medicare patients, for billing purposes, as hospital outpatients. The department must not treat some Medicare patients as hospital outpatients and others as physician office patients.
(6) In the case of a patient admitted to the hospital as an inpatient after receiving treatment in the hospital outpatient department or hospital-based entity, payments for services in the hospital outpatient department or hospital-based entity are subject to the payment window provisions applicable to PPS hospitals and to hospitals and units excluded from PPS set forth at § 412.2(c)(5) of this chapter and at § 413.40(c)(2), respectively.
(7) When a Medicare beneficiary is treated in a hospital outpatient department or hospital-based entity (other than an RHC) that is not located on the main provider's campus, the hospital has a duty to provide written notice to the beneficiary, prior to the delivery of services, of the amount of the beneficiary's potential financial liability (that is, of the fact that the beneficiary will incur a coinsurance liability for an outpatient visit to the hospital as well as for the physician service, and of the amount of that liability). The notice must be one that the beneficiary can read and understand. If the beneficiary is unconscious, under great duress, or for any other reason unable to read a written notice and understand and act on his or her own rights, the notice must be provided, prior to the delivery of services, to the beneficiary's authorized representative.
(8) Hospital outpatient departments must meet applicable hospital health and safety rules for Medicare-participating hospitals in part 482 of this chapter.
(h)
(i)
(i) Review current payments and, if necessary, take action in accordance with the rules on inappropriate billing in paragraph (j) of this section;
(ii) Investigate and determine whether the requirements in paragraph (d) of this section (or, for periods prior to October 10, 2000, the requirements in applicable program instructions) were met; and
(iii) Review all previous payments to that provider for all cost reporting periods subject to re-opening in accordance with § 405.1885 and § 405.1889 of this chapter.
(2)
(3)
(i) The requirements regarding licensure and public awareness in paragraphs (d)(1) and (d)(6) of this section are met;
(ii) All facility services were billed as if they had been furnished by a department of a provider, remote location of a hospital, satellite facility, or a provider-based entity of the main provider; and
(iii) All professional services of physicians and other practitioners were billed with the correct site-of-service indicator, as described in paragraph (g)(2) of this section.
(j)
(1)
(2)
(3)
(4)
(5)
(k)
(l)
(1) Owned and operated by the Indian Health Service;
(2) Owned by the Tribe but leased from the Tribe by the IHS under the Indian Self-Determination Act (Pub. L. 93-638) in accordance with applicable regulations and policies of the Indian Health Service in consultation with Tribes: or
(3) Owned by the Indian Health Service but leased and operated by the Tribe under the Indian Self-Determination Act (Pub. L. 93-638) in accordance with applicable regulations and policies of the Indian Health Service in consultation with Tribes.
(m)
(1) Received a grant before 1995 under section 330 of the Public Health Service Act, or is receiving funding from such a grant under a contract with the recipient of such a grant and meets the requirements to receive a grant under section 330 of the Public Health Service Act; or
(2) Based on the recommendation of the Public Health Service, was determined by HCFA before 1995 to meet the requirements for receiving such a grant.
(n)
(d)
(5) For portions of cost reporting periods beginning on or after October 1, 1997, for purposes of calculating the blended payment amount under paragraph (d)(4) of this section, the ASC payment amount is the sum of the standard overhead amounts reduced by deductibles and coinsurance as defined in section 1866(a)(2)(ii) of the Act.
(b)
(5) For hospital outpatient radiology services furnished on or after October 1, 1997, the blended payment amount is equal to the sum of—
(i) 42 percent of the hospital-specific amount; and
(ii) 58 percent of the fee schedule amount calculated as 62 percent of the sum of the fee schedule amounts payable for the same services when furnished by participating physicians in their offices in the same locality, less deductible and coinsurance as defined in section 1866(a)(2)(A)(ii) of the Act.
(c)
(4) For other diagnostic services furnished on or after October 1, 1997, the blended payment amount is equal to the sum of—
(i) 50 percent of the hospital-specific amount; and
(ii) 50 percent of the fee schedule amount calculated as 42 percent of the sum of the fee schedule amounts payable for the same services when furnished by participating physicians in their offices in the same locality less deductible and coinsurance as defined in section 1866(a)(2)(A)(ii) of the Act.
(a) Except for sole community hospitals, as defined in § 412.92 of this chapter, and critical access hospitals, the reasonable costs of outpatient hospital services (other than capital-related costs of these services) are reduced by 5.8 percent for services furnished during portions of cost reporting periods occurring on or after October 1, 1990 and until the first date that the prospective payment system under part 419 of this chapter is implemented.
(j)
(ii) 10 percent for portions of cost reporting periods occurring on or after October 1, 1991 and until the first date that the prospective payment system under part 419 of this chapter is implemented.
Secs. 1102, 1833(t), and 1871 of the Social Security Act (42 U.S.C. 1302, 1395l(t), and 1395hh).
(a)
(b)
(a)
(b)
(1) Use of an operating suite, procedure room, or treatment room;
(2) Use of recovery room;
(3) Use of an observation bed;
(4) Anesthesia, certain drugs, biologicals, and other pharmaceuticals; medical and surgical supplies and equipment; surgical dressings; and devices used for external reduction of fractures and dislocations;
(5) Supplies and equipment for administering and monitoring anesthesia or sedation;
(6) Intraocular lenses (IOLs);
(7) Incidental services such as venipuncture;
(8) Capital-related costs;
(9) Implantable items used in connection with diagnostic X-ray tests, diagnostic laboratory tests, and other diagnostic tests;
(10) Durable medical equipment that is implantable;
(11) Implantable prosthetic devices (other than dental) which replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), including replacement of these devices; and
(12) Costs incurred to procure donor tissue other than corneal tissue.
(c)
(1) Medical education costs for approved nursing and allied health education programs.
(2) Corneal tissue acquisition costs incurred by hospitals that are paid for on a reasonable cost basis.
(3) Costs for services listed in § 419.22.
(a)
(b)
(2) Critical access hospitals (CAHs) are excluded from the hospital outpatient prospective payment system.
Except for services described in § 419.22, effective for services furnished on or after July 1, 2000, payment is made under the hospital outpatient prospective payment system for the following:
(a) Medicare Part B services furnished to hospital outpatients designated by the Secretary under this part.
(b) Services designated by the Secretary that are covered under Medicare Part B when furnished to hospital inpatients who are either not entitled to benefits under Part A or who have exhausted their Part A benefits but are entitled to benefits under Part B of the program.
(c) Partial hospitalization services furnished by community mental health centers (CMHCs).
(d) The following medical and other health services furnished by a comprehensive outpatient rehabilitation facility (CORF) when they are provided outside the patient's plan (of care); or by a home health agency (HHA) to patients who are not under an HHA plan or treatment; or by a hospice program furnishing services to patients outside the hospice benefit:
(1) Antigens.
(2) Splints and casts.
(3) Pneumococcal vaccine, influenza vaccine, and hepatitis B vaccine.
The following services are not paid for under the hospital outpatient prospective payment system:
(a) Physician services that meet the requirements of § 415.102(a) of this chapter for payment on a fee schedule basis.
(b) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(c) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act.
(d) Certified nurse-midwife services, as defined in section 1861(gg) of the Act.
(e) Services of qualified psychologists, as defined in section 1861(ii) of the Act.
(f) Services of an anesthetist as defined in § 410.69 of this chapter.
(g) Clinical social worker services as defined in section 1861(hh)(2) of the Act.
(h) Outpatient therapy services described in section 1833(a)(8) of the Act.
(i) Ambulance services, as described in section 1861(v)(1)(U) of the Act, or, if applicable, the fee schedule established under section 1834(l).
(j) Except as provided in § 419.22(b)(11), prosthetic devices, prosthetics, prosthetic supplies, and orthotic devices.
(k) Except as provided in § 419.2(b)(10), durable medical equipment supplied by the hospital for the patient to take home.
(l) Clinical diagnostic laboratory services.
(m) Services for patients with ESRD that are paid under the ESRD composite rate and drugs and supplies furnished during dialysis but not included in the composite rate.
(n) Services and procedures that the Secretary designates as requiring inpatient care.
(o) Hospital outpatient services furnished to SNF residents (as defined in § 411.15(p) of this chapter) as part of the patient's resident assessment or comprehensive care plan (and thus included under the SNF PPS) that are furnished by the hospital “under arrangements” but billable only by the SNF, regardless of whether or not the patient is in a Part A SNF stay.
(p) Services that are not covered by Medicare by statute.
(q) Services that are not reasonable or necessary for the diagnosis or treatment of an illness or disease.
(a) HCFA estimates the aggregate amount that would be payable for
(1) The total amounts that would be payable from the Trust Fund for covered hospital outpatient services without regard to the outpatient prospective payment system described in this part; and
(2) The total amounts of coinsurance that would be payable by beneficiaries to hospitals for covered hospital outpatient services without regard to the outpatient prospective payment system described in this part.
(b) The estimated aggregate amount under paragraph (a) of this section is determined as though the deductible required under section 1833(b) of the Act did not apply.
(a)
(2) HCFA may make exceptions to the requirements set forth in paragraph (a)(1) in unusual cases, such as low volume items and services, but may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act.
(3) The payment rate determined for an APC group in accordance with § 419.32, and the copayment amount and program payment amount determined for an APC group in accordance with subpart D of this part, apply to every HCPCS code classified within an APC group.
(b)
(2) HCFA assigns to each APC group an appropriate weighting factor to reflect the relative median costs for the services within the APC group compared to the median costs for the services in all APC groups.
(c)
(2) HCFA standardizes the median costs determined in paragraph (b)(1) of this section by adjusting for variations in hospital labor costs across geographic areas.
(a)
(b)
(i) For calendar years 2000, 2001, and 2002, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act reduced by one percentage point.
(ii) For calendar years 2003 and subsequent years, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act.
(2) Beginning in calendar year 2000, HCFA may substitute for the hospital inpatient market basket percentage in paragraph (b) of this section a market basket percentage increase that is determined and applied to hospital outpatient services in the same manner that the hospital inpatient market basket percentage increase is determined and applied to inpatient hospital services.
(c)
(d)
(a) In addition to the payment rate described in § 419.32, for each APC group there is a predetermined beneficiary coinsurance amount as described in § 419.41(a). The Medicare program payment amount for each APC group is calculated by applying the program payment percentage as described in § 419.41(b).
(b) For purposes of this section—
(1)
(2)
(3)
(c)
(a) To calculate the unadjusted coinsurance amount for each APC group, HCFA—
(1) Standardizes 1996 hospital charges for the services within each APC group to offset variations in hospital labor costs across geographic areas;
(2) Identifies the median of the wage-neutralized 1996 charges for each APC group; and
(3) Determines the value equal to 20 percent of the wage-neutralized 1996 median charge for each APC group and multiplies that value by an actuarial projection of increases in charges for hospital outpatient department services during the period 1996 to 1999. The result is the unadjusted beneficiary coinsurance amount for the APC group.
(b) HCFA calculates annually the program payment percentage for every APC group on the basis of each group's unadjusted coinsurance amount and its payment rate after the payment rate is adjusted in accordance with § 419.32.
(c) To determine payment amounts due for a service paid under the hospital
(1) Makes the wage index adjustment in accordance with § 419.43.
(2) Subtracts the amount of the applicable Part B deductible provided under § 410.160 of this chapter.
(3) Multiplies the remainder by the program payment percentage for the group to determine the preliminary Medicare program payment amount.
(4) Subtracts the program payment amount from the amount determined in paragraph (c)(2) of this section to determine the coinsurance amount.
(i) The coinsurance amount for an APC cannot exceed the amount of the inpatient hospital deductible established under section 1813(b) of the Act for that year.
(ii) The coinsurance amount is computed as if the adjustments under § 419.43(d) and (e) (and any adjustment made under § 419.43(f) in relation to these adjustments) had not been paid.
(5) Adds the amount by which the coinsurance amount would have exceeded the inpatient hospital deductible for that year to the preliminary Medicare program payment amount determined in paragraph (c)(3) of this section to determine the final Medicare program payment amount.
(a) A hospital may elect to reduce coinsurance for any or all APC groups on a calendar year basis. A hospital may
(b) A hospital must notify its fiscal intermediary of its election to reduce coinsurance no later than—
(1) June 1, 2000, for coinsurance elections for the period July 1, 2000 through December 31, 2000; or
(2) December 1 preceding the beginning of each subsequent calendar year.
(c) The hospital's election must be properly documented. It must specifically identify the APCs to which it applies and the coinsurance amount (within the limits identified below) that the hospital has selected for each group.
(d) The election of reduced coinsurance remains in effect unchanged during the year for which the election was made.
(e) In electing reduced coinsurance, a hospital may elect a level that is less than that year's wage-adjusted coinsurance amount for the group but not less than 20 percent of the APC payment rate as determined in § 419.32.
(f) The hospital may advertise and otherwise disseminate information concerning the reduced level of coinsurance that it has elected. All advertisements and information furnished to Medicare beneficiaries must specify that the coinsurance reductions advertised apply only to the specified services of that hospital and that coinsurance reductions are available only for hospitals that choose to reduce coinsurance for hospital outpatient services and are not allowed in any other ambulatory settings or physician offices.
(a)
(b)
(c)
(d)
(i) A fixed multiple of the sum of—
(A) The applicable Medicare hospital outpatient payment amount determined under § 419.32(c), as adjusted under § 419.43 (other than for adjustments under this paragraph (d) or paragraph (e) of this section); and
(B) Any transitional pass-through payment under paragraph (e) of this section.
(ii) At the option of HCFA, a fixed dollar amount.
(2)
(3)
(ii)
(A) For a year (or portion of a year) before 2004, 2.5 percent; and
(B) For 2004 and thereafter, 3.0 percent.
(4)
(i) Apply paragraph (d)(1) of this section to a bill for these services related to an outpatient encounter (rather than for a specific service or group of services) using hospital outpatient payment amounts and transitional pass-through payments covered under the bill; and
(ii) Use an appropriate cost-to-charge ratio for the hospital or CMHC (as determined by HCFA), rather than for specific departments within the hospital.
(e)
(i)
(ii)
(iii)
(iv)
(A) Payment for the device, drug, or biological as an outpatient hospital service under this part was not being made as of December 31, 1996; and
(B) The cost of the device, drug, or biological is not insignificant (as defined in paragraph (e)(1)(iv)(C) of this section) in relation to the hospital outpatient fee schedule amount (as calculated under § 419.32(c)) payable for the service (or group of services) involved.
(C) The cost of the device, drug, or biological is considered not insignificant if it meets all of the following thresholds:
(
(
(
(2)
(i) On the first date this section is implemented in the case of a drug, biological, or device described in paragraphs (e)(2)(i), (e)(2)(ii), or (e)(2)(iii) of this section and in the case of a device, drug, or biological described in paragraph (e)(1)(iv) of this section and for which payment under this part is made as an outpatient hospital service before the first date; or
(ii) In the case of a device, drug, or biological described in paragraph (e)(1)(iv) of this section not described in paragraph (e)(2)(i) of this section, on the first date on which payment is made under this part for the device, drug, or biological as an outpatient hospital service.
(3)
(i) In the case of a drug or biological, the amount by which the amount determined under section 1842(o) of the Act for the drug or biological exceeds the portion of the otherwise applicable Medicare hospital outpatient fee schedule amount that HCFA determines is associated with the drug or biological; or
(ii) In the case of a medical device, the amount by which the hospital's charges for the device, adjusted to cost, exceeds the portion of the otherwise applicable Medicare hospital outpatient fee schedule amount that HCFA determines is associated with the device.
(4)
(ii)
(A) For a year (or portion of a year) before 2004, 2.5 percent; and
(B) For 2004 and thereafter, a percentage specified by HCFA up to (but not to exceed) 2.0 percent.
(iii)
(f)
(a)
(1) The full amounts for the procedure with the highest APC payment rate; and
(2) One-half of the full program and the beneficiary payment amounts for all other covered procedures.
(b)
(1) The full amounts if the procedure is discontinued after the induction of anesthesia or after the procedure is started; or
(2) One-half of the full program and the beneficiary coinsurance amounts if the procedure is discontinued after the patient is prepared for surgery and taken to the room where the procedure is to be performed but before anesthesia is induced.
(a)
(b)
(c)
There can be no administrative or judicial review under sections 1869 and 1878 of the Act or otherwise of the following:
(a) The development of the APC system, including—
(1) Establishment of the groups and relative payment weights;
(2) Wage adjustment factors;
(3) Other adjustments; and
(4) Methods for controlling unnecessary increases in volume.
(b) The calculation of base amounts described in section 1833(t)(3) of the Act.
(c) Periodic adjustments described in section 1833(t)(9) of the Act.
(d) The establishment of a separate conversion factor for hospitals described in section 1886(d)(1)(B)(v) of the Act.
(e) The determination of the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable percentage under § 419.43(d) or the determination of insignificance of cost, the duration of the additional payments (consistent with § 419.43(e)), the portion of the Medicare hospital outpatient fee schedule amount associated with particular devices, drugs, or biologicals, and the application of any pro rata reduction under § 419.43(e).
(a)
(1) At least 90 percent, but less than 100 percent, of the pre-BBA amount (as defined in paragraph (f) of this section), the amount of payment under this part is increased by 80 percent of the amount of this difference;
(2) At least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this part is increased by the amount by which the product of 0.71 and the pre-BBA amount exceeds the product of 0.70 and the prospective payment system amount;
(3) At least 70 percent, but less than 80 percent, of the pre-BBA amount, the amount of payment under this part is increased by the amount by which the product of 0.63 and the pre-BBA amount, exceeds the product of 0.60 and the PPS amount; or
(4) Less than 70 percent of the pre-BBA amount, the amount of payment under this part shall be increased by 21 percent of the pre-BBA amount.
(b)
(1) At least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this part is increased by 70 percent of the amount of this difference;
(2) At least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this part is increased by the amount by which the product of 0.61 and the pre-BBA amount exceeds the product of 0.60 and the prospective payment system amount; or
(3) Less than 80 percent of the pre-BBA amount, the amount of payment under this part is increased by 13 percent of the pre-BBA amount.
(c)
(1) At least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this part is increased by 60 percent of the amount of this difference; or
(2) Less than 90 percent of the pre-BBA amount, the amount of payment under this part is increased by 6 percent of the pre-BBA amount.
(d)
(i) Is located in a rural area as defined in § 412.63(b) of this chapter or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act; and
(ii) Has 100 or fewer beds as defined in § 412.105(b) of this chapter.
(2)
(e)
(f)
(2)
(i) The provider's payment under this part for covered outpatient services furnished during the cost reporting period ending in 1996, including any payment for these services through cost-sharing described in paragraph (e) of this section; and
(ii) The reasonable cost of these services for this period, without applying the cost reductions under section 1861(v)(1)(S) of the Act.
(g)
(h)
(i)
(1) Are not considered an adjustment under § 419.43(f); and
(2) Are not implemented in a budget neutral manner.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(e)
(3)
(i)
(ii)
(iii)
(A) The patient's response to the therapeutic interventions provided by the partial hospitalization program.
(B) The patient's psychiatric symptoms that continue to place the patient at risk of hospitalization.
(C) Treatment goals for coordination of services to facilitate discharge from the partial hospitalization program.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
The provider agrees to the following:
(d) In the case of a hospital or a CAH that furnishes services to Medicare beneficiaries, either to furnish directly or to make arrangements (as defined in § 409.3 of this chapter) for all Medicare-covered services to inpatients and outpatients of a hospital or a CAH except the following:
(3) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(b) * * *
(i)
(1)
(2)
(i) If the off-campus department is an urgent care center, primary care center, or other facility that is routinely staffed by physicians, RNs, or LPNs, these department personnel must be trained, and given appropriate protocols, for the handling of emergency cases. At least one individual on duty at the off-campus department during its regular hours of operation must be designated
(ii) If the off-campus department is a physical therapy, radiology, or other facility not routinely staffed with physicians, RNs, or LPNs, the department's personnel must be given protocols that direct them to contact emergency personnel at the main hospital campus for direction. Under this direction, and in accordance with protocols established in advance by the hospital, the personnel at the off-campus department must describe patient appearance and report symptoms and, if appropriate, either arrange transportation of the individual to the main hospital campus in accordance with paragraph (i)(3)(i) of this section or assist in an appropriate transfer as described in paragraphs (i)(3)(ii) and (d)(2) of this section.
(3)
(ii) If transfer of an individual with a potential emergency condition to a medical facility other than the main hospital campus is warranted, either because the main hospital campus does not have the specialized capability or facilities required by the individual, or because the individual's condition is deteriorating so rapidly that taking the time needed to move the individual to the main hospital campus would significantly jeopardize the life or health of the individual, personnel at the off-campus department must, in accordance with protocols established in advance by the hospital, assist in arranging an appropriate transfer of the individual to a medical facility other than the main hospital. The protocols must include procedures and agreements established in advance with other hospitals or medical facilities in the area of the off-campus department to facilitate these appropriate transfers. Such a transfer would require—
(A) That there be either a request by or on behalf of the individual as described in paragraph (d)(1)(ii)(A) of this section or a certification by a physician or a qualified medical person as described in paragraph (d)(1)(ii)(B) or (d)(1)(ii)(C) of this section; and
(B) That the transfer comply with the requirements described in paragraph (d)(2) of this section.
(iii) If the individual is being appropriately transferred to another medical facility from the off-campus department, the requirement for the provision of medical treatment in paragraph (d)(2)(i) of this section would be met by provision of medical treatment within the capability of the transferring off-campus department.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
As used in this part—
(b)
(2) Whether a prospective department of a provider, remote location of a hospital, satellite facility, or provider-based entity qualifies for provider-based status under § 413.65 of this chapter, or whether such a facility or entity currently treated as a department of a provider, remote location of a hospital, satellite facility, or a provider-based entity no longer qualifies for that status under § 413.65 of this chapter.
42 U.S.C. 1302, 1320-7, 1320a-7a, 1320a-7e, 1320b-10, 1395u(j), 1395u(k), 1395cc(g), 1395dd(d)(1), 1395mm, 1395nn(g), 1395ss(d), 1396(m), 11131(c), and 11137(b)(2).
(a)
(b)
(1) Provides for the imposition of civil money penalties and, as applicable, assessments against persons who—
(xi) Are physicians or entities that enter into an arrangement or scheme that they know or should know has as a principal purpose the assuring of referrals by the physician to a particular entity that, if made directly, would violate the provisions of § 411.353 of this title;
(xii) Violate the Federal health care programs' anti-kickback statute as set forth in section 1128B of the Act; or
(xiii) Knowingly and willfully present, or cause to be presented, a bill or request for payment for nonphysician services furnished to hospital patients (unless the services are furnished by the hospital, either directly or under an arrangement) in violation of sections 1862(a)(14) and 1866(a)(1)(H) of the Act.
(b) The OIG may impose a penalty, and where authorized, an assessment against any person (including an insurance company in the case of paragraphs (b)(5) and (b)(6) of this section) whom it determines in accordance with this part—
(15) Has knowingly and willfully presented, or caused to be presented, a bill or request for payment for items and services furnished to a hospital patient for which payment may be made under the Medicare or another Federal health care program, if that bill or request is inconsistent with an arrangement under section 1866(a)(1)(H) of the Act, or violates the requirements for such an arrangement.
(a) Except as provided in paragraphs (b) and (d) through (k) of this section, the OIG may impose a penalty of not more than $10,000 for each item or service that is subject to a determination under § 1003.102.
(k) For violations of section 1862(a)(14) of the Act and § 1003.102(b)(15), the OIG may impose a penalty of not more than $2,000 for each bill or request for payment for items and services furnished to a hospital patient.
(a)(1) Except as set forth in paragraph (b) of this section, in lieu of or in addition to any penalty or assessment, the OIG may exclude from participation in Medicare, Medicaid and other Federal health care programs the following persons for a period of time determined under § 1003.107—
(i) Any person who is subject to a penalty or assessment under § 1003.102(a), (b)(1) through (b)(4), or (b)(15).
The following addenda will not appear in the Code of Federal Regulations.
Addenda A, B, and C have a number of errors in the following columns: APC, status indicator, payment rate, and national unadjusted coinsurance and minimum unadjusted coinsurance. We identified these errors too late in preparing this rule for publication to correct them. Some of the errors are related to the status codes assigned to the HCPCS codes and APCs.
Some errors affect addenda B, C, and E. Several of these errors involve procedures incorrectly identified as inpatient procedures, and one inpatient procedure incorrectly identified as an outpatient procedure. Certain PET scan codes and other codes are shown in incorrect APCs. Screening sigmoidoscopy and colonoscopy APCs have the wrong HCPCS codes and incorrect payment rates and coinsurance amounts. Certain dental codes were inadvertently identified as errors, so their correct APC assignments, payment rate and coinsurance amounts were not shown in the addenda. Two breath tests are subject to the clinical diagnostic lab fee schedule. We have listed below the corrections that have payment implications.
Addendum F does not include status indicators G and H which identify items that are eligible for pass-through payments. (See section III.B.3 of the preamble for a complete description of all status indications used in conjunction with this final rule.)
We also note that the word “proposed” should not appear on any Addenda contained in this final rule such as on Addendum A or C.
The fiscal intermediaries will receive the necessary changes to process outpatient PPS claims correctly. We will post the corrected Addendum B on our Website and publish a correction document in the
Our Website address is
Cooperative State Research, Education, and Extension Service.
Notice of Request for Proposals and Request for Input.
The Cooperative State Research, Education and Extension Service (CSREES) announces the availability of grant funds and requests proposals for the Integrated Research, Education, and Extension Competitive Grants Program—Pest Management for fiscal year (FY) 2000 to support integrated, multifunctional agricultural research, extension, and education activities that address pest management priorities in United States agriculture, particularly those priorities addressing anticipated regulatory losses of key pest management tools resulting from the implementation of the Food Quality Protection Act (FQPA) of 1996. The Integrated Research, Education, and Extension Competitive Grants Program—Pest Management will have four program components: Crops at Risk from FQPA Implementation (CAR); FQPA Risk Avoidance and Mitigation for Major Food Crop Systems (RAMP); Methyl Bromide Transitions (MBT); and Pest Management Centers. The amount available for support of this program in FY 2000 is approximately $11,000,000.
This notice sets out the objectives for these projects, the eligibility criteria for projects and applicants, the application procedures, and the set of instructions needed to apply for a Pest Management grant under this authority.
By this notice, CSREES additionally solicits stakeholder input from any interested party regarding the FY 2000 Integrated Research, Education, and Extension Competitive Grants Program—Pest Management for use in the development of any future requests for proposals for this program.
Proposals must be transmitted by June 6, 2000, as indicated by the postmark or date on courier bill of lading. Proposals transmitted after this date will not be considered for funding. Comments regarding this request for proposals are requested within six months from the issuance of this notice. Comments received after that date will be considered to the extent practicable.
The address for hand-delivered proposals or proposals submitted using an express mail or overnight courier service is: Integrated Research, Education, and Extension Competitive Grants Program—Pest Management; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Room 303, Aerospace Center; 901 D Street, S.W.; Washington, D.C. 20024.
Proposals sent via the U.S. Postal Service must be sent to the following address: Integrated Research, Education, and Extension Competitive Grants Program—Pest Management; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2245; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2245.
Written user comments should be submitted by first-class mail to: Policy and Program Liaison Staff; Office of Extramural Programs; USDA-CSREES; STOP 2299; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2299; or via e-mail to: RFP-OEP@reeusda.gov. In your comments, please include the name of the program and the fiscal year of the RFP to which you are responding.
Applicants and other interested parties are encouraged to contact the following individuals: CAR: Dr. Rick Meyer; National Program Leader; Plant and Animal Systems Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2210; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2210; Telephone: (202) 401-4891; Fax: (202) 401-4888; e-mail address: hmeyer@reeusda.gov.; RAMP: Dr. Steve Yaninek; National Program Leader; Plant and Animal Systems Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2210; 1400 Independence Avenue, S.W.; Washington, D.C.; Telephone: (202) 401-6702; Fax: 202-401-4888; e-mail address: syaninek@reeusda.gov.; MBT: Dr. Robin Huettel; National Program Leader; Plant and Animal Systems Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2210; 1400 Independence Avenue, S.W.; Washington, D.C.; Telephone: (202) 401-5804; Fax: (202) 401-4888; e-mail address: rhuettel@reeusda.gov; Pest Management Centers: Dr. Dennis Kopp; National Program Leader; Plant and Animal Systems Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2210; 1400 Independence Avenue, S.W.; Washington, D.C.; Telephone: (202) 401-6437; Fax: (202) 401-4888; e-mail address: dkopp@reeusda.gov.
CSREES is soliciting comments regarding this solicitation of applications from any interested party. These comments will be considered in the development of any future RFP for the program. Such comments will be forwarded to the Secretary or his designee for use in meeting the requirements of section 103(c)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7613(c)(2)). This section requires the Secretary to solicit and consider input on a current RFP from persons who conduct or use agricultural research, education and extension for use in formulating future RFPs for competitive programs. Comments should be submitted as provided for in the
This program is listed in the Catalog of Federal Domestic Assistance under 10.303, Integrated Research, Education, and Extension Competitive Grants Program.
Section 406 of the Agricultural Research, Extension, and Education Reform Act of 1998 (AREERA) (7 U.S.C. 7626) authorized the Secretary of Agriculture to establish a research, education, and extension competitive grants program to provide funding for integrated, multifunctional agricultural research, extension, and education activities. Subject to the availability of appropriations to carry out this program, the Secretary may award grants to colleges and universities (as defined by 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (NARETPA) (7 U.S.C. 3103)) on a competitive basis for integrated research, education, and extension projects. Grants are to be awarded to address priorities in United States agriculture that involve integrated research, education, and extension activities as determined by the Secretary in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board.
On November 19, 1999, the Secretary published in the
The entire program is funded in FY 2000 at $37,637,702 (after deduction for administrative expenses) for the following integrated activities: Water Quality ($12,374,115), Food Safety ($14,277,277), and the Pest Management Component that includes: Pesticide Impact Assessment ($4,322,310), Crops at Risk from Food Quality and Protection Act (FQPA) Implementation ($952,000), FQPA Risk Mitigation Program for Major Food Crop Systems ($3,808,000), and Methyl Bromide Transitions ($1,904,000). There will be three RFP's for this program. The Water Quality and Food Safety Programs will each have a separate RFP, while the latter four programs will be announced as one RFP. This notice announces and describes the Pest Management component of the Program.
CSREES will administer the Integrated Research, Education, and Extension Competitive Grants Program by determining priorities in United States agriculture through Agency stakeholder input processes and in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board. Each RFP for the different program areas (i.e., Water Quality, Food Safety, etc.) will be developed each fiscal year based on these established priorities and the resulting determined approaches to solving these critical agricultural issues. Although this overall grant program seeks to solve critical agricultural issues through an integration of research, education, and extension activities, a component of a RFP, depending on the priority being addressed and/or the stage at which the priority is being addressed, may request proposals that are research, education, or extension only, or a combination thereof. However, the overall overarching approach to solving the critical agricultural issue, priority, or problem will be through an integration of research, education, and extension activities within each individual program area.
The components of the Integrated Competitive Grants Program—Pest Management are Crops at Risk from FQPA Implementation program (CAR); FQPA Risk Avoidance and Mitigation for Major Food Crop Systems (RAMP); Methyl Bromide Transitions Program (MBTP); and Pesticide Impact Assessment Program (hereafter referred to as “Pest Management Centers”). These four components will address anticipated regulatory losses of key pest management tools resulting from the implementation of the Food Quality Protection Act of 1996 (FQPA) (see http://www.epa.gov/oppfead1/fqpa/ index.html), other regulatory actions, or other agreements (e.g., Clean Air Act, as amended 1990).
The four components of the Integrated Research, Education, and Extension Competitive Grants Program—Pest Management will support a wide range of complementary research, education, and extension activities. Together, these four components support activities to assess the use and efficacy of available pest management tools, develop and demonstrate the efficacy of reduced-risk pesticides and other pest management alternatives, and identify possible transition and mitigation strategies that serve as viable pest management options for crops and agro-ecosystems at risk due to anticipated regulatory actions.
By integrating these four separate program components into a single competitive grants program, CSREES has responded to stakeholder suggestions that the Agency develop a coordinated program to address pest management challenges that face the Nation in the short- and long-terms. Projects supported by the four components of the Integrated Activities Pest Management Competitive Grants Program provide a coordinated response to FQPA needs and issues. CSREES also expects that Integrated Research, Education, and Extension Competitive Grants Program—Pest Management projects will be integral components of other CSREES pest management programs such as the Pest Management Alternatives Program (PMAP), the Regional Integrated Pest Management Grants Program (RIPM), the Pesticide Applicator Training program (PAT), the Minor Crops Program (IR-4), and to pest management activities funded under the regional Sustainable Agriculture Research and Education program (SARE) and the National Research Initiative (NRI).
There is no commitment by USDA to fund any particular proposal or to make a specific number of awards. Approximately $11 million will be available to fund proposals in FY 2000 distributed among the program components as follows: CAR—$952,000, RAMP—$3,808,000, MBT—$1,904,000 and Pest Management Centers—$4,322,310.
For the purpose of awarding grants under this program, the following definitions are applicable:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
Proposals may be submitted by colleges and universities as defined in section 1404 of the National Agricultural research, Extension, and Teaching Policy Act of 1977 (NARETPA). The terms “college” and “university” mean an educational institution in any State which (1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, (2) is legally authorized within such State to provide a program of education beyond secondary education, (3) provides an educational program for which a bachelor's degree or any other higher degree is awarded, (4) is a public or other nonprofit institution, and (5) is accredited by a nationally recognized accrediting agency or association. Although an applicant may be eligible based on its status as one of these entities, there are factors which may exclude an applicant from receiving Federal financial and nonfinancial assistance and benefits under this program (e.g., debarment or suspension of an individual involved or a determination that an applicant is not responsible based on submitted organizational management information). Eligible applicants may subcontract to organizations not eligible under these requirements.
Please note that a research foundation maintained by a college or university is not eligible to receive an award under this program.
If a grant provides a particular benefit to a specific agricultural commodity, the grant recipient is required to provide funds or in-kind support to match the amount of the grant funds provided. See section 10. c. on “Matching Funds” under Part III, B, “Content of Proposals” for more details.
CSREES may waive the matching funds requirement specified in the above paragraph for a grant if CSREES determines that (a) the results of the project, while of particular benefit to a specific agricultural commodity, are likely to be applicable to agricultural commodities generally; or (b) the project involves a minor commodity, the project deals with scientifically important research, and the grant recipient is unable to satisfy the matching funds requirement.
CSREES has determined that grant funds awarded under this authority may not be used for the renovation or refurbishment of research, education, or extension space; the purchase or installation of fixed equipment in such space; or the planning, repair, rehabilitation, acquisition, or construction of buildings or facilities.
In FY 2000 all projects will be awarded using a “New Grant” instrument. In future years, projects under the Integrated Research, Education, and Extension Competitive Grants Program authority can be awarded using one of the grant instruments described below:
The two mechanisms by which new, renewal, and supplemental grants shall be awarded are as follows:
Approximately, $952,000 is available for CAR projects in FY 2000. Proposals should be between two to four years in duration with a budget of not more than $200,000 per year.
Approximately $3,808,000 is available for RAMP projects in FY 2000. Proposals can be up to five years in duration with a maximum budget of $500,000 per year.
Approximately $1,904,000 is available for MBT proposals. It is anticipated that 12-15 grants of up to two years in duration will be awarded in this program component.
Approximately $4,322,000 is available for Pest Management Center proposals. Pest Management Centers will be supported for a 3-year period at levels reflective of the activities proposed.
Grants awarded under the Program Area Description of MBT (as described in this RFP) will be issued as “New Grant” instruments and will be awarded as “Standard Grants.” Grants awarded under the Program Area Descriptions of CAR, RAMP, and Pest Management Center (as described in this RFP) will be issued as “New Grant” instruments and may be awarded as “Continuation Grants.”
The Integrated Research, Education, and Extension Competitive Grants Program—Pest Management supports efforts to modify existing pest management approaches or develop new methods that address needs created by the implementation of regulatory actions. Projects supported under this authority must show evidence of research, education, and extension integration at the program or institutional level.
Alternative pest control chemistries and practices resulting from FQPA tolerance reassessment and reregistration should be considered when preparing proposals for this program. These priorities are determined through a critical evaluation of pest management needs for a commodity and the effect of regulatory changes on current pest management practices. These priorities were published in a November 18, 1999,
Activities funded by the Integrated Research, Education, and Extension Competitive Grants Program—Pest Management will address work needed to facilitate grower knowledge and adoption of pesticides that are newly registered or are candidates for registration. Recently-registered chemical pesticides are identified in annual reports on the web site of the EPA Office of Pesticide Programs at http://www.epa.gov/pesticides. Pesticides that are candidates for registration in FY 2000 are named in the interim work plan of the EPA Registration Division. The interim work plan is available on the web at http://www.epa.gov/opprd001/workplan. Twenty-five new chemicals are included in the work plan in addition to many new uses for 64 already-registered chemicals. The work plan provides the trade name, crops, and company for each chemical and identifies those chemicals that qualified for the EPA reduced-risk status. Biopesticides that are recently registered and those under consideration for registration are identified on the web site at www.epa.gov/pesticides/biopesticides/. Updates to EPA pesticide priority review and reregistration lists are available at http://www.epa.gov/pesticides. EPA also issues an electronic newsletter that will announce updates. Sign-up information for the electronic newsletter is available at http://www.epa.gov/pesticides.
The phase out of methyl bromide is required under Title IV of the Clean Air Act (as amended in 1990) because of its ozone-depleting potential. In October 1998, the Clean Air Act was amended to change the phase out date to 2005, in harmonization with the date agreed to in the Montreal Protocol. More information on the phase out of methyl bromide is available on the EPA website at http://www.epa. gov/ozone/mbr/harmoniz.html.
Proposals are solicited for the following program areas:
The Crops at Risk from FQPA Implementation (CAR) program is an intermediate-term (two to four years) research, education, and extension competitive grants program with at-risk crops or cropping systems as the focal point. Several crops and cropping systems face potentially severe economic impacts as a result of the possible restrictions or elimination of certain pesticides resulting from implementation of the Food Quality Protection Act (FQPA) of 1996 and other regulatory actions. In the short-term, small-acreage fruit and vegetable crops are most vulnerable. However, many more crops, including large-acreage grain, forage and fiber crops, will be impacted during the pesticide review process. Development of new multiple-tactic pest management strategies designed to assist producers during the transition is the goal of this program component.
b. Develop new pest management tactics based on alternative technologies, including products of genetic engineering, biological organisms, biological pesticides, new chemical pesticides, and cultural practices; and
c. Demonstrate and describe how new tactics can be economically and practically integrated into pest management programs for individual crops.
Updates to EPA pesticide priority review and registration lists are available at http://www.epa.gov/pesticides. EPA also issues an electronic newsletter that will announce updates. Sign-up information for the electronic newsletter is available at http://www.epa.gov/pesticides.
Proposals that address priorities established by stakeholders representing an entire crop production region, consider crosscutting challenges, and show evidence of multi-state or within-state cooperation regarding research, education, and extension will be given preference.
The FQPA Risk Avoidance and Mitigation for Major Food Crop Systems Program (RAMP) is a long-term (up to five years) research, education, and extension competitive grants program to develop reduced risk pest management strategies for agro-ecosystems. Global markets for food and grain products demand high quality at competitive prices. Growers are faced with meeting market demands and ever-increasing production costs coupled with decreasing or unstable commodity prices. Added to these constraints are concerns posed by implementation of regulatory actions over the next decade. Many of the pest management tools growers have depended on in the past may be restricted or eliminated. Growers face uncertainty regarding which pest management tactics will continue to be available and how to make use of new technologies, such as bioengineered crop innovations and precision agriculture in their production systems. There is a critical need to devise pest management systems that consider all aspects of crop production .
Projects supported by RAMP will have a food, fiber and grain production system focus and can include consideration of food safety, occupational safety, water quality and other environmental concerns. The program will address the major acreage cropping systems including, but not limited to, corn, soybean, wheat, cotton and rice, as well as, the fruits and vegetables most important in the human diet, especially the diets of infants and children. Emphasis will be placed on development and implementation of new and innovative pest management systems designed to maintain crop productivity and profitability while addressing environmental quality and human health concerns. The goal of this long-term effort is to eliminate or minimize pesticide residues of concern on foods, in drinking water , and in the environment. This program also supports projects to reduce occupational risk for producers and their employees. These will be long-term projects and will evolve from in-depth discussions of pest management needs and priorities involving stakeholders. Projects are intended to enhanced stability and sustainability of agricultural production systems and will be multi-state or regional in scale, typically involve multiple cropping systems that define an agroecosystem. A major goal of this effort will be the development of pest management systems that are based on an advanced understanding of cropping system biology and ecology.
Proposals that strive to maintain crop economic viability based on a diverse bio-based pest management system are encouraged. Proposals should address priorities established by stakeholders representing an entire cropping system and consider crosscutting challenges, and must show evidence for multi-state and multi-disciplinary cooperation regarding research, education, and extension. Proposals should catalog and review the pest management tactics currently being used in the targeted cropping system, then define opportunities for new pest management approaches as part of the proposal. All proposals should include an outreach component to promote the exchange of pest management information among researchers, extension agents, producers, and commodity groups as it relates to the project. Outreach efforts can make use of publications, website development, field days, workshops or other relevant planning and outreach activities. Successful proposals will provide milestones and independently verifiable indicators that can be used to measure progress and impact across a range of ecological, agronomic and economic criteria. Budgetary provisions should be made to support formal stakeholder reviews after the second field season and at the end of the project.
The Methyl Bromide Transitions Program (MBT) supports the discovery and implementation of practical pest management alternatives for commodities affected by the phase-out of methyl bromide. Projects supported by MBT will focus on short- to intermediate-term solutions for all commodities at risk using presently available or newly developed pest management technologies and practices. Since alternatives to methyl bromide that have thus far been developed require different pest management strategies than those used for methyl bromide alone, projects supported by MBT will emphasize the development and implementation of integrated management approaches. This includes increased research, education and extension activities on all commodities at risk, including field trials and other demonstration projects that enhance the adoption of pest management alternatives for all commodities. It also will support the technology transfer of results to growers through education and outreach programs.
b. Conduct integrated research, education, and extension activities for pest management alternatives for nurseries, including the floral industry and forest nurseries (e.g., general nursery production, production for pest and pathogen-free rootstocks);
c. Develop extension activities to implement pest management alternatives, including field trials and other demonstration projects that enhance the adoption of alternative management practices; and
d. Increase transfer of results to growers through education and outreach programs that promote the implementation of pest management alternatives.
Proposals that address priorities established by stakeholders, consider crosscutting challenges, and show evidence of multi-state or within-state cooperation involving research, education, and extension will be given preference.
USDA has placed a high priority on the establishment of Pest Management Centers as a means of strengthening its connection with production agriculture, research and extension programs, and agricultural stakeholders throughout the United States. USDA and EPA have recognized the need for a pest management information network that can quickly respond to information needs of the public and private sectors. When fully implemented, Pest Management Centers will help USDA and its partner institutions identify, prioritize and coordinate a national pest management research, extension, and education program implemented on a regional basis.
Pest Management Centers will be the focal point for team building efforts, communication networks, and stakeholder participation within a given region. Pest Management Centers will promote open communication, exchange of information and resources, collaboration, and integration of activities among individuals, institutions, states, and regions into coordinated efforts around common themes that span institutional or geographical boundaries. Pest Management Centers also will bring together and help focus the institutional and individual expertise needed to successfully address a range of pest management issues confronting farmers and other pest managers (e.g., regulatory restrictions, development of pest resistance, invasive species, and biotechnology). When fully implemented, Pest Management Centers will maximize the availability of dispersed expertise, reduce duplication of effort, enhance interdisciplinary and multiorganizational efforts, and provide regional expert information, technology, and education upon which production agriculture, government agencies, and agricultural stakeholders can draw.
The process to develop the Pest Management Centers will begin in FY 2000 with the formation of four geographically-based regional Pest Management Centers with one in each of the north central, northeastern, southern, and western regions of the United States. The four regional Pest Management Centers funded in FY 2000 by this RFP will be instrumental in creating a regional process that will evolve into Agroecological Pest Management Centers in FY 2003, based upon agroecologically defined crop production regions.
Pest Impact Assessment Program funds will be used to implement and support the regional Pest Management Centers. The regional Pest Management Centers will fulfill a real and immediate need in establishing a national 2-way pest management communication network which includes USDA and other government agencies, scientists at colleges and universities, and stakeholders focusing on pest management issues. These activities, among other things, will ensure broad based stakeholder participation in initiating a 3-year process to facilitate the planning and development of future Agroecological Pest Management Centers.
Successful applicants for FY 2000 regional Pest Management Centers should present a plan that will demonstrate their capacity to form and fund collaborative information networks that cross traditional institutional, disciplinary, and geographic boundaries to address the region's pest management priorities. The four successful proposals funded in FY 2000 will be expected to conduct the following activities:
a. Establish a team of pest managers, producers and commodity groups, and other stakeholders that represent the diversity of capabilities, institutions, and pest management issues found in the region.
b. Establish a regionally-based pest management information and communication network linking USDA and other Federal agencies with agricultural researchers and stakeholders throughout the region. Among the responsibilities of the network will be to (1) collect, synthesize, and disseminate information on pest management practices; (2) coordinate crop profile development and develop pest management strategy plans for important commodities in the region; and (3) coordinate science reviews of documents related to crop production, pest management, regulatory, health, and environmental risk issues.
c. Facilitate an interactive process designed to identify appropriate boundaries for agroecological pest management areas in the United States. Once determined, agroecological areas will serve to demarcate the Agroecological Pest Management Centers needed to address regional and National priorities. These Agroecological Pest Management Centers will be geographically defined by an appropriate set of criteria, such as agroecological or crop production regions, that reflect principal agricultural production zones in the country and address the broad spectrum of pest management needs within each region. The function of the regional Pest Management Centers will be redistributed in FY 2003 to the newly defined Agroecological Pest Management Centers that will be established in an open and fair competitive process during FY 2003.
a. Bringing together pest management professionals and stakeholders to establish the pest management information network and to identify and prioritize agroecological pest management needs. Agroecological Pest Management Centers will serve as regional hubs responsible for ensuring efficient access to pest management expertise and data available through colleges and universities.
b. Defining functional agroecologoically based pest management regions within the four geographic regions of the country to facilitate the evolution of regional Pest Management Centers into Agroecological Pest Management Centers.
c. Participating as a regional representative on a national steering committee established by CSREES to harmonize regional pest management needs into a proposed comprehensive national network compatible and complimentary agroecologically based Pest Management Centers.
Proposed budgets could include funding for a regional Pest Management Center director and support staff, and to support the information network. Regional Pest Management Centers will be supported for a 3-year period. Annual funding beyond the first year will be dependent upon demonstration of the regional Pest Management Center's accomplishments and the continued availability of Federal funds.
The grantee must prepare an annual report that details all significant activities towards achieving the goals and objectives of the project. The narrative should be succinct and be no longer than five pages, using 12-point, single-spaced type. The report also should include a listing of any students who worked on the project (report graduate degrees awarded and undergraduates trained, as applicable). A budget summary should be attached to this report, which will provide an overview of all monies spent during the reporting period.
Program application materials are available at the Integrated Research, Education, and Extension Competitive Grants Program website (http://www.reeusda.gov/integrated/). If you do not have access to our web page or have trouble downloading material, you may contact the Proposal Services Unit, Office of Extramural Programs, USDA/CSREES at (202) 401-5048. When calling the Proposal Services Unit, please indicate that you are requesting forms for the Integrated Research, Education, and Extension Competitive Grants Program—Pest Management. These materials may also be requested via Internet by sending a message with your name, mailing address (not e-mail) and phone number to psb@reeusda.gov. State that you want a copy of the Program Description and application materials (orange book) for the Fiscal Year 2000 Integrated Research, Education, and Extension Competitive Grants Program—Pest Management.
The proposal should follow these guidelines, enabling reviewers to more easily evaluate the merits of each proposal in a systematic, consistent fashion:
(a) The proposal should be prepared on only one side of the page using standard size (8
(b) Each page of the proposal, including the Project Summary, budget pages, required forms, and any appendices, should be numbered sequentially.
(c) The proposal should be stapled in the upper left-hand corner. Do not bind. An original and 14 copies (15 total) must be submitted in one package, along with 10 copies of the “Project Summary” as a separate attachment.
(d) If applicable, proposals should include original illustrations (photographs, color prints, etc.) in all copies of the proposal to prevent loss of meaning through poor quality reproduction.
Each copy of each grant proposal must contain an “Application for Funding”, Form CSREES-661. One copy of the application, preferably the original, must contain the pen-and-ink signature(s) of the proposing principal investigator(s)/project director(s) (PI/PD) and the authorized organizational representative who possesses the necessary authority to commit the organization's time and other relevant resources to the project. Any proposed PI/PD or co-PI/PD whose signature does not appear on Form CSREES-661 will not be listed on any resulting grant award. Complete both signature blocks located at the bottom of the “Application for Funding” form.
Form CSREES-661 serves as a source document for the CSREES grant database; it is therefore important that it be completed accurately. The following items are highlighted as having a high potential for errors or misinterpretations:
(a) Title of Project (Block 6). The title of the project must be brief (80-character maximum), yet represent the major thrust of the effort being proposed. Project titles are read by a variety of nonscientific people; therefore, highly technical words or phraseology should be avoided where possible. In addition, introductory phrases such as “investigation of” or “research on” “education for” or “outreach that” should not be used.
(b) Program to Which You Are Applying (Block 7). “Integrated Research, Education, and Extension Competitive Grants Program—Pest Management.”
(c) Program Area and Number (Block 8). The name of the program component, e.g., CAR, 112.1 or RAMP, 112.2 should be inserted in this block.
(d) Type of Award Request (Block 13). Check the block for “new.”
(e) Principal Investigator(s)/Project Director(s) (PI/PD) (Block 15). The designation of excessive numbers of co-PI/PD's creates problems during final review and award processing. Listing multiple co-PI/PD's, beyond those required for genuine collaboration, is therefore discouraged. Note that providing a Social Security Number is voluntary, but is an integral part of the CSREES information system and will assist in the processing of the proposal.
(f) Type of Performing Organization (Block 18). A check should be placed in the box beside the type of organization which actually will carry out the effort. For example, if the proposal is being submitted by an 1862 Land-Grant Institution but the work will be performed in a department, laboratory, or other organizational unit of an agricultural experiment station, box “03” should be checked. If portions of the effort are to be performed in several departments, check the box that applies to the individual listed as PI/PD #1 in Block 15.a.
(g) Other Possible Sponsors (Block 22). List the names or acronyms of all other public or private sponsors including other agencies within USDA and other programs funded by CSREES
(h) One copy of the “Application for Funding” form must contain the signatures (in ink) of the PI/PD's and authorized organizational representative for the applicant organization.
For consistency and ease in locating information, each proposal must contain a detailed Table of Contents just after the cover page. The Table of Contents should contain page numbers for each component of the proposal. Page numbers should begin with the first page of the Project Description.
The proposal must contain a Project Summary of 250 words or less on a separate page which should be placed immediately after the Table of Contents and should not be numbered. The names and affiliated organizations of all PI/PD's and co-PI/PD's should be listed on this form as well as the title of the project, in addition to the title of the project. The summary should be a self-contained, specific description of the activity to be undertaken and should focus on: overall project goal(s) and supporting objectives; plans to accomplish project goal(s); and relevance of the project to the Integrated Competitive Grants Program—Pest Management. The importance of a concise, informative Project Summary cannot be overemphasized.
For CAR, RAMP, and MBT proposals, the project description may not exceed 15 single- or double-spaced pages. Project descriptions for Pest Management Centers may not exceed 20 single- or double-spaced pages. The Project Description should include the following components.
a.
1. Estimates of the magnitude of the issues and their relevance to stakeholders and to ongoing State-Federal food and agricultural research, education and extension programs.
2. Role of stakeholders in problem identification, planning, implementation and evaluation as appropriate.
3. Reasons for having the work performed by the proposing institution.
4. For CAR, RAMP, and MBTP proposals only: A detailed plan for the research, education, and technology transfer that will be used to implement the pest management alternative solution in the field, and should identify milestones and independently verifiable indicators.
b.
c.
1. A description of the proposed investigations and/or experiments in the sequence in which it is planned to carry them out;
2. Techniques to be employed, including their feasibility;
3. Kinds of results expected;
4. Means by which data will be analyzed or interpreted;
5. Pitfalls that might be encountered; and
6. Limitations to proposed procedures.
For Pest Management Center Proposals: The proposal should provide details regarding the procedures and processes that will be used to manage the Pest Management Center. Proposals should include, but not necessarily be limited to, the following aspects of Center management:
1. Identify the Center Director and other key personnel who will comprise the Center's staff;
2. Describe how the Pest Management Center will be managed, including how and by who work priorities will be established (e.g., steering and stakeholder advisory committees), how partner institutions and stakeholders will participate in Center management, how information collected by the Center will be aggregated and disseminated, and how Center activities will be coordinated with the activities of the other three regional Centers;
3. Describe the open and competitive process that will be used to identify the institutions and individuals that will form the information network in the region (Centers should build upon existing regional coordination efforts to the extent possible or should indicate why existing efforts are not relevant. The proposal should also describe how coordination with the National Agricultural Statistics Service (NASS), the Economic Research Service (ERS), EPA, the Agricultural Research Service (ARS), and other government agencies will be ensured;
4. Provide an action plan, including milestones, for the establishment of the Pest Management Center, the regional information network, the participatory process to identify agro-ecosystems centers; and
5. Describe the process that will be used to hold an “independent” evaluation of the Center on an annual basis (Members of the review team should reflect the Center's “community of interest”, including member institutions, Center clients, and stakeholder groups. The results of the annual review will be used by CSREES to determine whether continued funding of the Center is justified.).
d.
e.
Appendices to the Project Description are allowed if they are directly germane to the proposed project and are limited to a total of two of the following: reprints (papers that have been published in peer reviewed journals) and preprints (manuscripts in press for a peer reviewed journal; these must be
All senior personnel who are expected to be involved in the effort must be clearly identified. For each person, the following should be included:
a. The roles and responsibilities of each PI/PD and/or collaborator should be clearly described;
b. An estimate of the time commitment involved for each PI/PD and/or collaborator; and
c. Vitae of each PI/PD, senior associate, and other professional personnel. This section should include vitae of all key persons who are expected to work on the project, whether or not CSREES funds are sought for their support. The vitae should be limited to two (2) pages each in length, excluding publications listings. A chronological list of all publications in refereed journals during the past four (4) years, including those in press, must be provided for each project member for which a curriculum vitae is provided. Also list only those non-refereed technical publications that have relevance to the proposed project. All authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
A Conflict-of-Interest List must be provided for all individuals involved in the project (identified as key personnel). Each list should be on a separate page and include alphabetically the full names of the individuals in the following categories: (a) All collaborators on projects within the past four years, including current and planned collaborations; (b) all co-authors on publications within the past four years, including pending publications and submissions; (c) all persons in your field with whom you have had a consulting or financial arrangement within the past four years, who stand to gain by seeing the project funded; and (d) all thesis or postdoctoral advisees/advisors within the past four years (some may wish to call these life-time conflicts). This form is necessary to assist program staff in excluding from proposal review those individuals who have conflicts-of-interest with the personnel in the grant proposal. The Program Director must be informed of any additional conflicts-of-interest that arise after the proposal is submitted.
If it will be necessary to enter into formal consulting or collaborative arrangements with others, such arrangements should be fully explained and justified. In addition, evidence should be provided that the collaborators involved have agreed to render these services. If the need for consultant services is anticipated, the proposal narrative should provide a justification for the use of such services, a statement of work to be performed, and a resume or curriculum vita for each consultant. For purposes of proposal development, informal day-to-day contacts between key project personnel and outside experts are not considered to be collaborative arrangements and thus do not need to be detailed.
All anticipated subcontractual arrangements also should be explained and justified in this section. A proposed statement of work and a budget for each arrangement involving the transfer of substantive programmatic work or the providing of financial assistance to a third party must be provided. Agreements between departments or other units of your own institution and minor arrangements with entities outside of your institution (e.g., requests for outside laboratory analyses) are excluded from this requirement.
If you expect to enter into subcontractual arrangements, please note that the provisions contained in 7 CFR Part 3019, USDA Uniform Administrative Requirements for Grant and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, and the general provisions contained in 7 CFR Part 3015.205, USDA Uniform Federal Assistance Regulations, flow down to subrecipients. In addition, required clauses from Sections 40-48 (“Procurement Standards”) and Appendix A (“Contract Provisions”) to 7 CFR Part 3019 should be included in final contractual documents, and it is necessary for the subawardee to make a certification relating to debarment/suspension.
The following guidelines should be used in developing your proposal budget(s):
For those grants requiring matching funds as specified under Part I (e), proposals should include written verification of commitments of matching support (including both cash and in-kind contributions) from third parties. Written verification means:
(a) For any third party cash contributions, a separate pledge agreement for each donation, signed by the authorized organizational representatives of the donor organization and the applicant organization, which must include: (1) The name, address, and telephone number of the donor; (2) the name of the applicant organization; (3) the title of the project for which the donation is made; (4) the dollar amount of the cash donation; and (5) a statement that the donor will pay the cash contribution during the grant period; and
(b) For any third party in-kind contributions, a separate pledge agreement for each contribution, signed by the authorized organizational representatives of the donor organization and the applicant organization, which must include: (1) The name, address, and telephone number of the donor; (2) the name of the applicant organization; (3) the title of the project for which the donation is made; (4) a good faith estimate of the current fair market value of the third party in-kind contribution; and (5) a statement that the donor will make the contribution during the grant period.
The sources and amount of all matching support from outside the applicant institution should be summarized on a separate page and placed in the proposal immediately following the Budget Narrative. All pledge agreements must be placed in the proposal immediately following the summary of matching support.
The value of applicant contributions to the project shall be established in accordance with applicable cost principles. Applicants should refer to OMB Circular A-21, Cost Principles for Educational Institutions, for further guidance and other requirements relating to matching and allowable costs.
All proposals must contain Form CSREES-663 listing other current public or private support (including in-house support) to which key personnel identified in the proposal have committed portions of their time, whether or not salary support for person(s) involved is included in the budget. Analogous information must be provided for any pending proposals that are being considered by, or that will be submitted in the near future to, other possible sponsors, including other USDA Programs or agencies. Concurrent submission of identical or similar proposals to the possible sponsors will not prejudice proposal review or evaluation by the CSREES for this purpose. However, a proposal that duplicates or overlaps substantially with a proposal already reviewed and funded (or to be funded) by another organization or agency will not be funded under this program. Note that the project being proposed should be included in the pending section of the form.
A number of situations encountered in the conduct of projects require special assurances, supporting documentation, etc., before funding can be approved for the project. In addition to any other situation that may exist with regard to a particular project, it is expected that some applications submitted in response to these guidelines will involve the following:
Note that by signing Form CSREES-661 the applicant is providing the certifications required by 7 CFR Part 3017, as amended, regarding Debarment and Suspension and Drug Free Workplace, and 7 CFR Part 3018, regarding Lobbying. The certification forms are included in the application package for informational purposes only. These forms should not be submitted with the proposal since by signing form CSREES-661 your organization is providing the required certifications. If the project will involve a subcontractor or consultant, the subcontractor/consultant should submit a form AD-1048 to the grantee organization for retention in their records. This form should not be submitted to USDA.
As outlined in 7 CFR Part 3407 (the Cooperative State Research, Education, and Extension Service regulations implementing NEPA), the environmental data for any proposed project is to be provided to CSREES so that CSREES may determine whether any further action is needed. In some cases, however, the preparation of environmental data may not be required. Certain categories of actions are excluded from the requirements of NEPA.
In order for CSREES to determine whether any further action is needed with respect to NEPA, pertinent information regarding the possible environmental impacts of a particular project is necessary; therefore, Form CSREES-1234, “NEPA Exclusions Form,” must be included in the proposal indicating whether the applicant is of the opinion that the project falls within a categorical exclusion and the reasons therefore. If it is the applicant's opinion that the proposed project falls within the categorical exclusions, the specific exclusion must be identified. Form CSREES-1234 and supporting documentation should be included as the last page of this proposal.
Even though a project may fall within the categorical exclusions, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for an activity, if substantial controversy on environmental grounds exists or if other extraordinary conditions or circumstances are present which may cause such activity to have a significant environmental effect.
Proposals must be transmitted by June 6, 2000, as indicated by postmark or date of courier bill of lading. Proposals transmitted after this date will not be considered for funding.
An original and 14 copies must be submitted. In addition submit 10 copies of the proposal's Project Summary. All copies of the proposals and the Project Summaries must be submitted in one package.
Applicants are strongly encouraged to submit completed proposals via overnight mail or delivery service to ensure timely receipt by the USDA. The address for hand-delivered proposals or proposals submitted using an express mail or overnight courier service is: Integrated Research, Education, and Extension Competitive Grants Program -Pest Managment; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Room 303, Aerospace Center; 901 D Street, S.W.; Washington, D.C. 20024.
Proposals sent via the U.S. Postal Service must be sent to the following address: Integrated Research, Education, and Extension Competitive Grants Program—Pest Management; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2245; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2245.
The receipt of all proposals will be acknowledged by e-mail. Therefore, applicants strongly are encouraged to provide e-mail addresses, where designated, on the Form CSREES-661. If the applicant's email address is not indicated, CSREES will acknowledge receipt of proposal by letter.
Once the proposal has been assigned an identification number, please cite that number on all future correspondence. If the applicant does not receive an acknowledgment within 60 days of the submission deadline, please contact the Program Director.
Each proposal will be evaluated using a 3-part process. First, each proposal will be screened to ensure that it meets the administrative requirements as set forth in this request for proposals-tier review process. Second, a panel will consider the relevance of the proposal to program objectives. Third, a technical peer panel will consider the technical merits of the proposal. The relevancy panel will be comprised of representatives from USDA and other federal agencies, farm and commodity
Overall, peer review panel members will be selected based upon their training and experience in relevant scientific, education or extension fields taking into account the following factors: (a) The level of formal scientific, technical education, and extension experience of the individual, as well as the extent to which an individual is engaged in relevant research, education and/or extension activities; (b) the need to include as peer reviewers experts from various areas of specialization within relevant scientific, education, and extension fields; (c) the need to include as reviewers other experts (producers, range or forest managers/operators, consumers, etc.) who can assess relevance of the proposals to targeted audiences and to program needs; (d) the need to include as peer reviewers experts from a variety of organizational types (e.g., colleges, universities, industry, state and Federal agencies, private profit and non-profit organizations), and geographic locations; (e) the need to maintain a balanced composition of peer review groups with regard to minority and female representation and an equitable age distribution; and (f) the need to include members that can judge the effective usefulness to producers and the general public of each proposal.
Priority will be given for integrated, multifunctional research, education, and extension projects.
The criteria used to evaluate proposals submitted to the Integrated Research, Education, and Extension Competitive Grants Program—Pest Management will vary depending on which of the four program components you are requesting funding from. The two sets of evaluation criteria are listed below.
Proposals for CAR, RAMP, and MBT funding will be evaluated based on the criteria described below. The relevancy panel will assign up to 30 points based on Criterion a, and the technical panel will assign up to 70 points based on Criteria b-f. The criteria are listed below.
Proposals for Pest Management Center funding will be evaluated based on the criteria described below. The relevancy panel will assign up to 30 points based on Criterion a, and the technical panel will assign up to 70 points based on Criteria b-e. The criteria are listed below.
During the peer evaluation process, extreme care will be taken to prevent any actual or perceived conflicts-of-interest that may impact review or evaluation. For the purpose of determining conflicts-of-interest, the academic and administrative autonomy of an institution shall be determined by reference to the January 1998 issue of the Codebook for Compatible Statistical Reporting of Federal Support to Universities, Colleges, and Nonprofit Institutions, prepared by Quantum Research Corporation for the National Science Foundation.
Names of submitting institutions and individuals, as well as proposal content and peer evaluations, will be kept confidential, except to those involved in the review process, to the extent permitted by law. In addition, the identities of peer reviewers will remain confidential throughout the entire review process. Therefore, the names of the reviewers will not be released to applicants. At the end of the fiscal year, names of panelists will be made available in such a way that the panelists cannot be identified with the review of any particular proposal.
Copies of summary reviews, not including the identity of reviewers, will be sent to the applicant PI/PD after the review process has been completed.
Within the limit of funds available for such purpose, the awarding official of
Specific management information relating to an applicant shall be submitted on a one-time basis as part of the responsibility determination prior to the award of a grant identified under this RFP, if such information has not been provided previously under this or another CSREES program. CSREES will provide copies of forms recommended for use in fulfilling these requirements as part of the preaward process.
The grant award document shall include at a minimum the following:
(a) Legal name and address of performing organization or institution to whom the Administrator has awarded a grant under the terms of this request for proposals;
(b) Title of project;
(c) Name(s) and address(es) of PI/PD's chosen to direct and control approved activities;
(d) Identifying grant number assigned by the Department;
(e) Project period, specifying the amount of time the Department intends to support the project without requiring recompetition for funds;
(f) Total amount of Departmental financial assistance approved by the Administrator during the project period;
(g) Legal authority(ies) under which the grant is awarded;
(h) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award; and
(i) Other information or provisions deemed necessary by CSREES to carry out its respective granting activities or to accomplish the purpose of a particular grant.
The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
Unless the terms and conditions of the grant state otherwise, the grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
(a) The permissible changes by the grantee, PI/PD(s), or other key project personnel in the approved project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee and/or the PI/PD(s) are uncertain as to whether a change complies with this provision, the question must be referred to the CSREES Authorized Departmental Officer (ADO) for a final determination.
(b) Changes in approved goals or objectives shall be requested by the grantee and approved in writing by the ADO prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
(c) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the awarding official of CSREES prior to effecting such changes.
(d) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the ADO prior to effecting such transfers, unless prescribed otherwise in the terms and conditions of the grant.
(e) Changes in Project Period: The project period may be extended by CSREES without additional financial support, for such additional period(s) as the ADO determines may be necessary to complete or fulfill the purposes of an approved project, but in no case shall the total project period exceed five years. Any extension of time shall be conditioned upon prior request by the grantee and approval in writing by the ADO, unless prescribed otherwise in the terms and conditions of a grant.
(f) Changes in Approved Budget: Changes in an approved budget must be requested by the grantee and approved in writing by the ADO prior to instituting such changes if the revision will involve transfers or expenditures of amounts requiring prior approval as set forth in the applicable Federal cost principles, Departmental regulations, or in the grant award.
Several Federal statutes and regulations apply to grant proposals considered for review and to project grants awarded under this program. These include, but are not limited to:
7 CFR Part 1.1—USDA implementation of the Freedom of Information Act.
7 CFR Part 3—USDA implementation of OMB Circular No. A-129 regarding debt collection.
7 CFR Part 15, subpart A—USDA implementation of Title VI of the Civil Rights Act of 1964, as amended.
7 CFR Part 3015—USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. A-21 and A-122) and incorporating provisions of 31 U.S.C. 6301-6308 (the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. No. 95-224), as well as general policy requirements applicable to recipients of Departmental financial assistance.
7 CFR Part 3017—USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
7 CFR Part 3018—USDA implementation of Restrictions on Lobbying. Imposes prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
7 CFR Part 3019—USDA implementation of OMB Circular A-110, Uniform Administrative Requirements for Grants and Other Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations.
7 CFR Part 3052—USDA implementation of OMB Circular No. A-133, Audits of States, Local Governments, and Non-profit Organizations.
7 CFR Part 3407—CSREES procedures to implement the National Environmental Policy Act of 1969, as amended.
29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR Part 15B (USDA implementation of statute)—prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
35 U.S.C. 200
When a proposal results in a grant, it becomes a part of the record of CSREES transactions, available to the public upon specific request. Information that the Secretary determines to be of a confidential, privileged, or proprietary nature will be held in confidence to the extent permitted by law. Therefore, any information that the applicant wishes to have considered as confidential, privileged, or proprietary should be clearly marked within the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.
For the reasons set forth in the final Rule-related Notice to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is excluded from the scope of the Executive Order 12372 which requires intergovernmental consultation with State and local officials. Under the provisions of the Paperwork Reduction Act of 1995, as amended (44 U.S.C. chapter 35), the collection of information requirements contained in this Notice have been approved under OMB Document No. 0524-0022.
Cooperative State Research, Education, and Extension Service, USDA.
Notice of request for proposals and request for input.
The Cooperative State Research, Education and Extension Service (CSREES) announces the availability of grant funds and requests proposals for the Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative for fiscal year (FY) 2000 to support integrated, multifunctional agricultural research, extension, and education activities that address food safety priorities in United States agriculture. The amount available for support of this program in FY 2000 is approximately $14,277,000.
This notice sets out the objectives for these projects, the eligibility criteria for projects and applicants, the application procedures, and the set of instructions needed to apply for a Food Safety grant under this authority.
By this notice, CSREES additionally solicits stakeholder input from any interested party regarding the FY 2000 Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative for use in the development of any future requests for proposals for this program.
Proposals must be transmitted by June 6, 2000, as indicated by the postmark or date on courier bill of lading. Proposals transmitted after this date will not be considered for funding. Comments regarding this request for proposals are requested within six months from the issuance of this notice. Comments received after that date will be considered to the extent practicable.
The address for hand-delivered proposals or proposals submitted using an express mail or overnight courier service is: Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Room 303, Aerospace Center; 901 D Street, S.W.; Washington, D.C. 20024.
Proposals sent via the U.S. Postal Service must be sent to the following address: Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2245; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2245.
Written user comments should be submitted by first-class mail to: Policy and Program Liaison Staff; Office of Extramural Programs; USDA-CSREES; STOP 2299; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2299; or via e-mail to: RFP-OEP@reeusda.gov. In your comments, please include the name of the program and the fiscal year of the RFP to which you are responding.
Applicants and other interested parties are encouraged to contact Dr. Jan Singleton; National Program Leader, Food Science and Food Safety; Plant and Animal Systems Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2220; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2220; telephone: (202) 401-1954; fax: (202) 401-5179; email: jsingleton@reeusda.gov.
CSREES is soliciting comments regarding this solicitation of applications from any interested party. These comments will be considered in the development of any future RFP for the program. Such comments will be forwarded to the Secretary or his designee for use in meeting the requirements of section 103(c)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7613(c)(2)). This section requires the Secretary to solicit and consider input on a current RFP from persons who conduct or use agricultural research, education and extension for use in formulating future RFPs for competitive programs. Comments should be submitted as provided for in the
This program is listed in the Catalog of Federal Domestic Assistance under 10.303, Integrated Research, Education, and Extension Competitive Grants Program.
Section 406 of the Agricultural Research, Extension, and Education Reform Act of 1998 (AREERA) (7 U.S.C. 7626) authorized the Secretary of Agriculture to establish a research, education, and extension competitive grants program to provide funding for integrated, multifunctional agricultural research, extension, and education activities. Subject to the availability of appropriations to carry out this program, the Secretary may award grants to colleges and universities (as defined by 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (NARETPA) (7 U.S.C. 3103)) on a competitive basis for integrated research, education, and extension projects. Grants are to be awarded to address priorities in United States agriculture that involve integrated research, education, and extension activities as determined by the Secretary in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board.
On November 19, 1999, the Secretary published in the
The entire program is funded in FY 2000 at $37,637,702 (after deduction for administrative expenses) for the following integrated activities: Water Quality ($12,374,115), Food Safety ($14,277,277), Pesticide Impact Assessment ($4,322,310), Crops at Risk from Food Quality and Protection Act (FQPA) Implementation ($952,000), FQPA Risk Mitigation Program for Major Food Crop Systems ($3,808,000), and Methyl Bromide Transition Program ($1,904,000). There will be three RFP's for this program. The Water Quality and Food Safety Programs will each have a separate RFP, while the latter four programs will be announced as one RFP. This notice announces and describes the Food Safety component of the Program.
CSREES will administer the Integrated Research, Education, and Extension Competitive Grants Program by determining priorities in United States agriculture through Agency stakeholder input processes and in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board. Each RFP for the different program areas (
The purpose of the National Food Safety Initiative is to support projects that address selected priority issues in food safety and demonstrate an integrated approach to solving problems in food safety research, education, and extension as described in this RFP. Various models for integration of research, education, and extension will be considered for funding. Proposals describing multistate, multi-institutional, multidisciplinary, and/or multifunctional activities (and combinations thereof) are acceptable. However, special emphasis will be given to proposals describing multifunctional activities that integrate research, education, and extension (i.e. those that contain research, education, and extension components).
The component areas described below address priority issues in food safety that were identified by stakeholders during a series of public meetings held to solicit program input from various users of food safety information at the local, state, regional, and national levels. Interdepartmental food safety priorities and those supported by the Presidential Food Safety Initiative were also considered in the development of this RFP.
There is no commitment by USDA to fund any particular proposal or to make a specific number of awards. Approximately $14,277,000 will be available to fund proposals in FY 2000. Proposals are being solicited in 12 component areas: (1) Qualitative and Quantitative Risk Assessments; (2) Control Measures for Food-Borne Microbial Pathogens; (3) Sources and Incidence of Microbial Pathogens; (4) Antibiotic Resistant Microbial Pathogens; (5) Improving the Safety of Fresh Fruits and Vegetables; (6) Food Handler Education and Training for Consumer and Youth; (7) Food Handler Education for High-risk and Hard-to-reach Audiences; (8) Food Handler Education for Commercial and Non-Commercial Audiences; (9) Hazard Analysis and Critical Control Points Model Development, Testing and Implementation; and (10) Integrating Food Safety into Related Agricultural Problems. In addition, proposals are being solicited for (11) National Coordination of Integrated Food Safety Programs and Resources and a (12) National Center for Home Food Processing and Preservation.
For the purpose of awarding grants under this program, the following definitions are applicable:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
Proposals may be submitted by colleges and universities as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (NARETPA). The terms “college” and “university” mean an educational institution in any State which (1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, (2) is legally authorized within such State to provide a program of education beyond secondary education, (3) provides an educational program for which a bachelor's degree or any other higher degree is awarded, (4) is a public or other nonprofit institution, and (5) is accredited by a nationally recognized accrediting agency or association. Although an applicant may be eligible based on its status as one of these entities, there are factors which may exclude an applicant from receiving Federal financial and nonfinancial assistance and benefits under this program (
Please note that a research foundation maintained by a college or university is not eligible to receive an award under this program.
If a grant provides a particular benefit to a specific agricultural commodity, the grant recipient is required to provide funds or in-kind support to match the amount of the grant funds provided. See section 10. c. on “Matching Funds” under Part III, B, “Content of Proposals” for more details.
CSREES may waive the matching funds requirement specified in the above paragraph for a grant if CSREES determines that (a) the results of the project, while of particular benefit to a specific agricultural commodity, are likely to be applicable to agricultural commodities generally; or (b) the project involves a minor commodity, the project deals with scientifically important research, and the grant recipient is unable to satisfy the matching funds requirement.
CSREES has determined that grant funds awarded under this authority may not be used for the renovation or refurbishment of research, education, or extension space; the purchase or installation of fixed equipment in such space; or the planning, repair, rehabilitation, acquisition, or construction of buildings or facilities.
In FY 2000 all projects will be awarded using a “New Grant” instrument. In future years, projects under the Integrated Research, Education, and Extension Competitive Grants Program authority can be awarded using one of the grant instruments described below:
The two mechanisms by which new, renewal, and supplemental grants shall be awarded are as follows:
For Program Areas 1 through 10, the maximum total award is $600,000, and for a project period up to three years. For Program Areas 11 and 12, the maximum total award is $600,000 per year and for a project period up to four years.
Proposals that focus on one functional area (
Applications received in any of the aforementioned program areas should include budgets commensurate with the activities proposed. Grants awarded under Program Description Areas 1 through 10 of this RFP will be issued as “New Grant” instruments and will be awarded as “Standard Grants.” Grants awarded under Program Description Areas 11 and 12 of this RFP will be issued as “New Grant” instruments and may be awarded as “Continuation Grants.”
Integrated research, education, and/or extension proposals that address the following selected priority issues are requested:
For Program Areas 1 through 10:
This category will support the development and testing of comprehensive, qualitative and/or quantitative science-based risk assessments for microbial food-borne pathogens (
This category will support the establishment of the scientific bases for, and the development of, models for identifying and validating critical control points, critical limits, and process capability related to control measures for significant food-borne microbial pathogens and/or their toxins in production, processing and distribution of foods.
This category will support identification of the sources and incidence of microbial pathogens of animal and human origin that impact on food safety and the development and implementation of strategies for their prevention and control.
This category will support: (a) The identification of factors that lead to the development of antibiotic resistant microbial pathogens related to food safety; (b) the identification and application of measures to prevent antibiotic resistence; and (c) the development and application of alternative approaches to the use of antibiotics.
This category will support the development of projects that focus on improving the safety of fresh and minimally processed imported and domestic fruits and vegetables, which includes: (a) The development of safe and efficacious techniques to enhance or ensure microbiological safety; (b) approaches that relate to post-production, harvesting, handling, transportation, and distribution control measures to the prevention of microbial pathogen infection or cross-contamination; or (c) development of procedures for sampling to accurately detect the presence of microbial pathogens and/or their toxins.
This category will support the development of education and training programs that promote and enhance general food safety and food handler education for youths, adults, and older Americans preparing food in the home. Special emphasis will be given to education efforts that support activities of the
This category will support the development of consumer education and training programs for high-risk or under-served groups (
This category will support the development, implementation, and evaluation of
This category will support the development of projects that focus on the development of HACCP models for education and training in four targeted areas: (a) Minimizing microbial food safety hazards for fresh fruits and vegetables through the development of training and education programs for domestic and international growers and producers; (b) HACCP plan development and implementation in small and very small meat and poultry plants and other small food processing plants; (c) HACCP plan development and implementation in retail establishments, including distribution and transportation sectors of the food industry; (d) HACCP
This category will support the development of projects that incorporate food safety concepts and food safety education into other topical areas in agriculture including, but not limited to, those focusing on: (a) Water quality; (b) animal waste management; (c) integrated pest management; (d) small farms; and (e) sustainable agriculture. For example, projects in this category might focus on developing educational programs that teach growers and producers how to reduce the risk of food-borne illness by minimizing microbial and pesticide contamination through integrated pest management, the control of pesticide application, water quality, and animal waste management. Priority consideration will be given to proposals that describe multi-disciplinary efforts that include those with expertise in food safety and nutrition.
In addition CSREES is soliciting proposals in the following areas:
For Program Areas 11 and 12:
This category will support the development of integrated food safety resources that facilitate national and international networking and coordination among the various users of food safety information, from production to consumption (i.e. farmers, producers, growers, packers, shippers, retailers, food service workers, processors, inspectors, veterinarians, sanitarians, educators, researchers, consumers, etc.). Special emphasis will be given to the development of databases and interactive software that support decision-making and problem-solving among food safety researchers, educators, consumers, and others. Proposals to support national or regional conferences, multi-user distance education programs, satellite videoteleconferences, and other communication transfer technologies will be supported.
This category will support the development of a
The grantee must prepare an annual report that details all significant activities towards achieving the goals and objectives of the project. The narrative should be succinct and be no longer than five pages, using 12-point, single-spaced type. The report also should include a listing of any students who worked on the project (report graduate degrees awarded and undergraduates trained, as applicable). A budget summary should be attached to this report, which will provide an overview of all monies spent during the reporting period.
Program application materials are available at the Integrated Research, Education, and Extension Competitive Grants Program website (http://www.reeusda.gov/integrated/). If you do not have access to our web page or have trouble downloading material, you may contact the Proposal Services Unit, Office of Extramural Programs, USDA/CSREES at (202) 401-5048. When calling the Proposal Services Unit, please indicate that you are requesting forms for the Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative. These materials may also be requested via Internet by sending a message with your name, mailing address (not e-mail) and phone number to psb@reeusda.gov. State that you want a copy of the Program Description and application materials (orange book) for the Fiscal Year 2000 Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative.
The proposal should follow these guidelines, enabling reviewers to more easily evaluate the merits of each proposal in a systematic, consistent fashion:
(a) The proposal should be prepared on only one side of the page using standard size (8
(b) Each page of the proposal, including the Project Summary, budget pages, required forms, and any appendices, should be numbered sequentially.
(c) The proposal should be stapled in the upper left-hand corner. Do not bind. An original and 14 copies (15 total) must be submitted in one package, along with 10 copies of the “Project Summary” as a separate attachment.
(d) If applicable, proposals should include original illustrations (photographs, color prints, etc.) in all copies of the proposal to prevent loss of
Each copy of each grant proposal must contain an “Application for Funding”, Form CSREES-661. One copy of the application, preferably the original, must contain the pen-and-ink signature(s) of the proposing principal investigator(s)/project director(s)(PI/PD) and the authorized organizational representative who possesses the necessary authority to commit the organization's time and other relevant resources to the project. Any proposed PI/PD or co-PI/PD whose signature does not appear on Form CSREES-661 will not be listed on any resulting grant award. Complete both signature blocks located at the bottom of the “Application for Funding” form.
Form CSREES-661 serves as a source document for the CSREES grant database; it is therefore important that it be completed accurately. The following items are highlighted as having a high potential for errors or misinterpretations:
(a) Title of Project (Block 6). The title of the project must be brief (80-character maximum), yet represent the major thrust of the effort being proposed. Project titles are read by a variety of nonscientific people; therefore, highly technical words or phraseology should be avoided where possible. In addition, introductory phrases such as “investigation of” or “research on” “education for” or “outreach that” should not be used.
(b) Program to Which You Are Applying (Block 7). “Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative.”
(c) Program Area and Number (Block 8). The name of the program component,
(d) Type of Award Request (Block 13). Check the block for “new.”
(e) Principal Investigator(s)/Project Director(s) (PI/PD) (Block 15). The designation of excessive numbers of co-PI/PD's creates problems during final review and award processing. Listing multiple co-PI/PD's, beyond those required for genuine collaboration, is therefore discouraged. Note that providing a Social Security Number is voluntary, but is an integral part of the CSREES information system and will assist in the processing of the proposal.
(f) Type of Performing Organization (Block 18). A check should be placed in the box beside the type of organization which actually will carry out the effort. For example, if the proposal is being submitted by an 1862 Land-Grant Institution but the work will be performed in a department, laboratory, or other organizational unit of an agricultural experiment station, box “03” should be checked. If portions of the effort are to be performed in several departments, check the box that applies to the individual listed as PI/PD #1 in Block 15.a.
(g) Other Possible Sponsors (Block 22). List the names or acronyms of all other public or private sponsors including other agencies within USDA and other programs funded by CSREES to whom your application has been or might be sent. In the event you decide to send your application to another organization or agency at a later date, you must inform the identified CSREES Program Director as soon as practicable. Submitting your proposal to other potential sponsors will not prejudice its review by CSREES; however, duplicate support for the same project will not be provided. Complete the “Application for Funding,” Form CSREES-661, in its entirety.
(h) One copy of the “Application for Funding” form must contain the signatures (in ink) of the PI/PD's and authorized organizational representative for the applicant organization.
For consistency and ease in locating information, each proposal must contain a detailed Table of Contents just after the cover page. The Table of Contents should contain page numbers for each component of the proposal. Page numbers should begin with the first page of the Project Description.
The proposal must contain a Project Summary of 250 words or less on a separate page which should be placed immediately after the Table of Contents and should not be numbered. The names and institutions of all PI/PD's and co-PI/PD's should be listed on this form, in addition to the title of the project. The summary should be a self-contained, specific description of the activity to be undertaken and should focus on: overall project goal(s) and supporting objectives; plans to accomplish project goal(s); and relevance of the project to the goals of the National Food Safety Initiative. The importance of a concise, informative Project Summary cannot be overemphasized.
The Project Description may not exceed a total of 18 pages including figures and tables.
(a)
(i) a statement must be given at the beginning of the justification that clearly identifies the area(s) in Part II B that is (are) addressed in the proposal;
(ii) estimates of the magnitude of the food safety problem and its relevance to ongoing National food and agricultural research programs; and
(iii) reasons for having the work performed by the proposing institution.
(b)
(c)
(i) a description of the proposed activities and the sequence in which they will be carried out;
(ii) procedures, techniques, methodologies, or approaches to be employed, including their feasibility;
(iii) kinds of results or expected outcomes;
(iv) evaluation methods or means by which data/information will be analyzed or interpreted;
(v) problems that might be encountered; and
(vi) limitations to proposed procedures, techniques, methodologies, or approaches.
(d)
(e)
(f)
(g)
(h)
An applicant for the National Center for Home Food Processing and Preservation should include a management plan to ensure efficient administration of the grant and how activities will be integrated across collaborators.
Appendices to the Project Description are allowed if they are directly germane to the proposed project and are limited to a total of two of the following: Reprints (papers that have been published in peer reviewed journals) and preprints (manuscripts in press for a peer reviewed journal; these must be accompanied by a letter of acceptance from the publishing journal).
All senior personnel who are expected to be involved in the effort must be clearly identified. For each person, the following should be included:
a. The roles and responsibilities of each PI/PD and/or collaborator should be clearly described;
b. An estimate of the time commitment involved for each PI/PD and/or collaborator; and
c. Vitae of each PI/PD, senior associate, and other professional personnel. This section should include vitae of all key persons who are expected to work on the project, whether or not CSREES funds are sought for their support. The vitae should be limited to two (2) pages each in length, excluding publications listings. A chronological list of all publications in refereed journals during the past four (4) years, including those in press, must be provided for each project member for which a curriculum vitae is provided. Also list only those non-refereed technical publications that have relevance to the proposed project. All authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
A Conflict-of-Interest List must be provided for all individuals involved in the project (identified as key personnel). Each list should be on a separate page and include alphabetically the full names of the individuals in the following categories: (a) All collaborators on projects within the past four years, including current and planned collaborations; (b) all co-authors on publications within the past four years, including pending publications and submissions; (c) all persons in your field with whom you have had a consulting or financial arrangement within the past four years, who stand to gain by seeing the project funded; and (d) all thesis or postdoctoral advisees/advisors within the past four years (some may wish to call these life-time conflicts). This form is necessary to assist program staff in excluding from proposal review those individuals who have conflicts-of-interest with the personnel in the grant proposal. The Program Director must be informed of any additional conflicts-of-interest that arise after the proposal is submitted.
If it will be necessary to enter into formal consulting or collaborative arrangements with others, such arrangements should be fully explained and justified. In addition, evidence should be provided that the collaborators involved have agreed to render these services. If the need for consultant services is anticipated, the proposal narrative should provide a justification for the use of such services, a statement of work to be performed, and a resume or curriculum vita for each consultant. For purposes of proposal development, informal day-to-day contacts between key project personnel and outside experts are not considered to be collaborative arrangements and thus do not need to be detailed.
All anticipated subcontractual arrangements also should be explained and justified in this section. A proposed statement of work and a budget for each arrangement involving the transfer of substantive programmatic work or the providing of financial assistance to a third party must be provided. Agreements between departments or other units of your own institution and minor arrangements with entities outside of your institution (
If you expect to enter into subcontractual arrangements, please note that the provisions contained in 7 CFR Part 3019, USDA Uniform Administrative Requirements for Grant and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, and the general provisions contained in 7 CFR Part 3015.205, USDA Uniform Federal Assistance Regulations, flow down to subrecipients. In addition, required clauses from Sections 40-48 (“Procurement Standards”) and Appendix A (“Contract Provisions”) to 7 CFR Part 3019 should be included in final contractual documents, and it is necessary for the subawardee to make a certification relating to debarment/suspension.
a. Budget Form. Prepare the budget, Form CSREES-55, in accordance with instructions provided. A budget form is required for each year of requested support. In addition, a cumulative budget is required detailing the requested total support for the overall project period. The budget form may be reproduced as needed by applicants. Funds may be requested under any of the categories listed on the form, provided that the item or service for which support is requested is allowable under the authorizing legislation, the applicable Federal cost principles, and these program guidelines, and can be justified as necessary for the successful conduct of the proposed project. Applicants must also include a Budget Narrative to justify their budgets (see section b below.)
The following guidelines should be used in developing your proposal budget(s):
b.
For those grants requiring matching funds as specified under Part I (e), proposals should include written verification of commitments of matching support (including both cash and in-kind contributions) from third parties. Written verification means:
(a) For any third party cash contributions, a separate pledge agreement for each donation, signed by the authorized organizational representatives of the donor organization and the applicant organization, which must include: (1) The name, address, and telephone number of the donor; (2) the name of the applicant organization; (3) the title of the project for which the donation is made; (4) the dollar amount of the cash donation; and (5) a statement that the donor will pay the cash contribution during the grant period; and
(b) For any third party in-kind contributions, a separate pledge agreement for each contribution, signed by the authorized organizational representatives of the donor organization and the applicant organization, which must include: (1) The name, address, and telephone number of the donor; (2) the name of the applicant organization; (3) the title of the project for which the donation is made; (4) a good faith estimate of the current fair market value of the third party in-kind contribution; and (5) a statement that the donor will make the contribution during the grant period.
The sources and amount of all matching support from outside the applicant institution should be summarized on a separate page and placed in the proposal immediately following the Budget Narrative. All pledge agreements must be placed in the proposal immediately following the summary of matching support.
The value of applicant contributions to the project shall be established in accordance with applicable cost principles. Applicants should refer to OMB Circular A-21, Cost Principles for Educational Institutions, for further guidance and other requirements relating to matching and allowable costs.
All proposals must contain Form CSREES-663 listing other current public or private support (including in-house support) to which key personnel identified in the proposal have committed portions of their time, whether or not salary support for person(s) involved is included in the budget. Analogous information must be provided for any pending proposals that are being considered by, or that will be submitted in the near future to, other
A number of situations encountered in the conduct of projects require special assurances, supporting documentation, etc., before funding can be approved for the project. In addition to any other situation that may exist with regard to a particular project, it is expected that some applications submitted in response to these guidelines will involve the following:
Note that by signing Form CSREES-661 the applicant is providing the certifications required by 7 CFR Part 3017, as amended, regarding Debarment and Suspension and Drug Free Workplace, and 7 CFR Part 3018, regarding Lobbying. The certification forms are included in the application package for informational purposes only. These forms should not be submitted with the proposal since by signing form CSREES-661 your organization is providing the required certifications. If the project will involve a subcontractor or consultant, the subcontractor/consultant should submit a form AD-1048 to the grantee organization for retention in their records. This form should not be submitted to USDA.
As outlined in 7 CFR Part 3407 (the Cooperative State Research, Education, and Extension Service regulations implementing NEPA), the environmental data for any proposed project is to be provided to CSREES so that CSREES may determine whether any further action is needed. In some cases, however, the preparation of environmental data may not be required. Certain categories of actions are excluded from the requirements of NEPA.
In order for CSREES to determine whether any further action is needed with respect to NEPA, pertinent information regarding the possible environmental impacts of a particular project is necessary; therefore, Form CSREES-1234, “NEPA Exclusions Form,” must be included in the proposal indicating whether the applicant is of the opinion that the project falls within a categorical exclusion and the reasons therefore. If it is the applicant's opinion that the proposed project falls within the categorical exclusions, the specific exclusion must be identified. Form CSREES-1234 and supporting documentation should be included as the last page of this proposal.
Even though a project may fall within the categorical exclusions, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for an activity, if substantial controversy on environmental grounds exists or if other extraordinary conditions or circumstances are present which may cause such activity to have a significant environmental effect.
Proposals must be transmitted by June 6, 2000, as indicated by postmark or date of courier bill of lading. Proposals transmitted after this date will not be considered for funding.
An original and 14 copies must be submitted. In addition submit 10 copies of the proposal's Project Summary. All copies of the proposals and the Project Summaries must be submitted in one package.
Applicants are strongly encouraged to submit completed proposals via overnight mail or delivery service to ensure timely receipt by the USDA. The address for hand-delivered proposals or proposals submitted using an express mail or overnight courier service is: Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Room 303, Aerospace Center; 901 D Street, S.W.; Washington, D.C. 20024.
Proposals sent via the U.S. Postal Service must be sent to the following address: Integrated Research, Education, and Extension Competitive Grants Program—National Food Safety Initiative; c/o Proposal Services Unit; Cooperative State Research, Education,
The receipt of all proposals will be acknowledged by e-mail. Therefore, applicants are encouraged to provide e-mail addresses, where designated, on the Form CSREES-661. If the applicant's e-mail address is not indicated, CSREES will acknowledge receipt of the proposal by letter.
Once the proposal has been assigned an identification number, please cite that number on all future correspondence. If the applicant does not receive an acknowledgment within 60 days of the submission deadline, please contact the Program Director.
Each proposal will be evaluated in a 2-part process. First, each proposal will be screened to ensure that it meets the administrative requirements as set forth in this request for proposals. Second, proposals that meet these requirements will be technically evaluated by a peer review panel.
Peer review panel members will be selected based upon their training and experience in relevant scientific, education or extension fields taking into account the following factors: (a) The level of formal scientific, technical education, and extension experience of the individual, as well as the extent to which an individual is engaged in relevant research, education and/or extension activities; (b) the need to include as peer reviewers experts from various areas of specialization within relevant scientific, education, and extension fields; (c) the need to include as reviewers other experts (producers, range or forest managers/operators, consumers, etc.) who can assess relevance of the proposals to targeted audiences and to program needs; (d) the need to include as peer reviewers experts from a variety of organizational types (
The evaluation factors below will be used in reviewing applications submitted in response to this request for proposals:
(a) The project goal, approach, or hypothesis is conceptually adequate and related to selected priority issues identified in the request for proposals;
(b) Objectives are clearly described and related to selected priority issues identified in the request for proposals;
(c) There is a demonstrated need for the project;
(d) The target audience(s) is identified (where appropriate);
(e) The proposed technique, procedure, or methodology is clearly described;
(f) The technique, procedure, or methodology is suitable and feasible for the proposed project;
(g) The evaluation procedures, or means by which data will be analyzed and interpreted, are clearly described and are suitable for the proposed project;
(h) The expected results or outcomes are clearly stated; and (i) The probability of success of the project is indicated.
(a) The roles of all project personnel are clearly defined;
(b) There is evidence that project personnel have sufficient expertise needed to complete the project;
(c) There is evidence of partnerships with other disciplines and institutions;
(d) There is sufficient time allocated for systematic attainment of objectives;
(e) There is evidence of institutional experience and competence in the identified area of work;
(f) There is adequate support personnel, facilities, and instrumentation;
(g) All necessary budget information is provided and all figures are tallied correctly;
(h) The budget narrative provides adequate justification for all budget categories; and
(i) The proposed budget is appropriate for the scope of the project.
(a) The relevance to current issues in food safety is described; and
(b) The project makes a unique and original contribution to food safety.
Proposals submitted for the National Center for Home Food Processing and Preservation also will be judged on the quality of the management plan that is proposed.
Priority will be given for integrated, multifunctional research, education, and extension projects.
During the peer evaluation process, extreme care will be taken to prevent any actual or perceived conflicts-of-interest that may impact review or evaluation. For the purpose of determining conflicts-of-interest, the academic and administrative autonomy of an institution shall be determined by reference to the January 1998 issue of the Codebook for Compatible Statistical Reporting of Federal Support to Universities, Colleges, and Nonprofit Institutions, prepared by Quantum Research Corporation for the National Science Foundation.
Names of submitting institutions and individuals, as well as proposal content and peer evaluations, will be kept confidential, except to those involved in the review process, to the extent permitted by law. In addition, the identities of peer reviewers will remain confidential throughout the entire review process. Therefore, the names of the reviewers will not be released to applicants. At the end of the fiscal year, names of panelists will be made available in such a way that the panelists cannot be identified with the review of any particular proposal.
Copies of summary reviews, not including the identity of reviewers, will be sent to the applicant PI/PD after the review process has been completed.
Within the limit of funds available for such purpose, the awarding official of CSREES shall make grants to those responsible, eligible applicants whose proposals are judged most meritorious under the procedures set forth in this RFP. The date specified by the awarding official of CSREES as the effective date of the grant shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. It should be noted that the project need not be initiated on the grant effective date, but as soon thereafter as practical so that project goals may be attained within the funded project period. All funds granted by CSREES under this RFP shall be
Specific management information relating to an applicant shall be submitted on a one-time basis as part of the responsibility determination prior to the award of a grant identified under this RFP, if such information has not been provided previously under this or another CSREES program. CSREES will provide copies of forms recommended for use in fulfilling these requirements as part of the preaward process.
The grant award document shall include at a minimum the following:
(a) Legal name and address of performing organization or institution to whom the Administrator has awarded a grant under the terms of this request for proposals;
(b) Title of project;
(c) Name(s) and address(es) of PI/PD's chosen to direct and control approved activities;
(d) Identifying grant number assigned by the Department;
(e) Project period, specifying the amount of time the Department intends to support the project without requiring recompetition for funds;
(f) Total amount of Departmental financial assistance approved by the Administrator during the project period;
(g) Legal authority(ies) under which the grant is awarded;
(h) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award; and
(i) Other information or provisions deemed necessary by CSREES to carry out its respective granting activities or to accomplish the purpose of a particular grant.
The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
Unless the terms and conditions of the grant state otherwise, the grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
(a) The permissible changes by the grantee, PI/PD(s), or other key project personnel in the approved project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee and/or the PI/PD(s) are uncertain as to whether a change complies with this provision, the question must be referred to the CSREES Authorized Departmental Officer (ADO) for a final determination.
(b) Changes in approved goals or objectives shall be requested by the grantee and approved in writing by the ADO prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
(c) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the awarding official of CSREES prior to effecting such changes.
(d) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the ADO prior to effecting such transfers, unless prescribed otherwise in the terms and conditions of the grant.
(e) Changes in Project Period: The project period may be extended by CSREES without additional financial support, for such additional period(s) as the ADO determines may be necessary to complete or fulfill the purposes of an approved project, but in no case shall the total project period exceed five years. Any extension of time shall be conditioned upon prior request by the grantee and approval in writing by the ADO, unless prescribed otherwise in the terms and conditions of a grant.
(f) Changes in Approved Budget: Changes in an approved budget must be requested by the grantee and approved in writing by the ADO prior to instituting such changes if the revision will involve transfers or expenditures of amounts requiring prior approval as set forth in the applicable Federal cost principles, Departmental regulations, or in the grant award.
Several Federal statutes and regulations apply to grant proposals considered for review and to project grants awarded under this program. These include, but are not limited to:
7 CFR Part 1.1—USDA implementation of the Freedom of Information Act.
7 CFR Part 3—USDA implementation of OMB Circular No. A-129 regarding debt collection.
7 CFR Part 15, subpart A—USDA implementation of Title VI of the Civil Rights Act of 1964, as amended.
7 CFR Part 3015—USDA Uniform Federal Assistance Regulations, implementing OMB directives (
7 CFR Part 3017—USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
7 CFR Part 3018—USDA implementation of Restrictions on Lobbying. Imposes prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
7 CFR Part 3019—USDA implementation of OMB Circular A-110, Uniform Administrative Requirements for Grants and Other Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations.
7 CFR Part 3052—USDA implementation of OMB Circular No. A-133, Audits of States, Local Governments, and Non-profit Organizations.
7 CFR Part 3407—CSREES procedures to implement the National Environmental Policy Act of 1969, as amended.
29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR Part 15B (USDA implementation of statute)—prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
35 U.S.C. 200
When a proposal results in a grant, it becomes a part of the record of CSREES transactions, available to the public upon specific request. Information that the Secretary determines to be of a confidential, privileged, or proprietary nature will be held in confidence to the extent permitted by law. Therefore, any information that the applicant wishes to have considered as confidential, privileged, or proprietary should be clearly marked within the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.
For the reasons set forth in the final Rule-related Notice to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is excluded from the scope of the Executive Order 12372 which requires intergovernmental consultation with State and local officials. Under the provisions of the Paperwork Reduction Act of 1995, as amended (44 U.S.C. chapter 35), the collection of information requirements contained in this Notice have been approved under OMB Document No. 0524-0022.
Cooperative State Research, Education, and Extension Service.
Notice of request for proposals and request for input.
The Cooperative State Research, Education and Extension Service (CSREES) announces the availability of grant funds and requests proposals for the Integrated Research, Education, and Extension Competitive Grants Program—Water Quality for fiscal year (FY) 2000 to support integrated, multifunctional agricultural research, extension, and education activities that address water quality priorities in United States agriculture. The amount available for support of this program in FY 2000 is approximately $12,400,000.
This notice sets out the objectives for these projects, the eligibility criteria for projects and applicants, the application procedures, and the set of instructions needed to apply for a Water Quality grant under this authority.
By this notice, CSREES additionally solicits stakeholder input from any interested party regarding the FY 2000 Integrated Research, Education, and Extension Competitive Grants Program—Water Quality for use in the development of any future requests for proposals for this program.
Proposals must be transmitted by June 6, 2000, as indicated by the postmark or date on courier bill of lading. Proposals transmitted after this date will not be considered for funding. Comments regarding this request for proposals are requested within six months from the issuance of this notice. Comments received after that date will be considered to the extent practicable.
The address for hand-delivered proposals or proposals submitted using an express mail or overnight courier service is: Integrated Research, Education, and Extension Competitive Grants Program—Water Quality; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Room 303, Aerospace Center; 901 D Street, SW; Washington, DC 20024.
Proposals sent via the U.S. Postal Service must be sent to the following address: Integrated Research, Education, and Extension Competitive Grants Program—Water Quality; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2245; 1400 Independence Avenue, SW; Washington, DC 20250-2245.
Written user comments should be submitted by first-class mail to: Policy and Program Liaison Staff; Office of Extramural Programs; USDA-CSREES; STOP 2299; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2299; or via e-mail to: RFP-OEP@reeusda.gov. In your comments, please include the name of the program and the fiscal year of the RFP to which you are responding.
Applicants and other interested parties are encouraged to contact Dr. Timothy C. Strickland; Water Quality Chair; Natural Resources and Environment Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2210; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2210; telephone: (202) 205-5952; fax: (202) 401-1706; email: tstrickland@reeusda.gov or Dr. Raymond Knighton; National Program Leader; Natural Resources and Environment Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2210; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2210; telephone: (202) 401-6417; fax: (202) 401-1706; email: rknighton@reeusda.gov.
CSREES is soliciting comments regarding this solicitation of applications from any interested party. These comments will be considered in the development of any future RFP for the program. Such comments will be forwarded to the Secretary or his designee for use in meeting the requirements of section 103(c)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7613(c)(2)). This section requires the Secretary to solicit and consider input on a current RFP from persons who conduct or use agricultural research, education and extension for use in formulating future RFPs for competitive programs. Comments should be submitted as provided for in the
This program is listed in the Catalog of Federal Domestic Assistance under 10.303, Integrated Research, Education, and Extension Competitive Grants Program.
Section 406 of the Agricultural Research, Extension, and Education Reform Act of 1998 (AREERA) (7 U.S.C. 7626) authorized the Secretary of Agriculture to establish a research, education, and extension competitive grants program to provide funding for integrated, multifunctional agricultural research, extension, and education activities. Subject to the availability of appropriations to carry out this program, the Secretary may award grants to colleges and universities (as defined by 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (NARETPA) (7 U.S.C. 3103)) on a competitive basis for integrated research, education, and extension projects. Grants are to be awarded to address priorities in United States agriculture that involve integrated research, education, and extension activities as determined by the Secretary in consultation with the National
On November 19, 1999, the Secretary published in the
The entire program is funded in FY 2000 at $37,637,702 (after deduction for administrative expenses) for the following integrated activities: Water Quality ($12,374,115), Food Safety ($14,277,277), Pesticide Impact Assessment ($4,322,310), Crops at Risk from Food Quality and Protection Act (FQPA) Implementation ($952,000), FQPA Risk Mitigation Program for Major Food Crop Systems ($3,808,000), and Methyl Bromide Transition Program ($1,904,000). There will be three RFP's for this program. The Water Quality and Food Safety Programs will each have a separate RFP, while the latter four programs will be announced as one RFP. This notice announces and describes the Water Quality component of the Program.
CSREES will administer the Integrated Research, Education, and Extension Competitive Grants Program by determining priorities in United States agriculture through Agency stakeholder input processes and in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board. Each RFP for the different program areas (
The CSREES Water Quality Program is being enhanced by the establishment of a new water quality program authorized under section 406 of AREERA for an Integrated Research, Education, and Extension Competitive Grants Program. This program will bring university scientists, instructors, and extension educators into more effective and efficient partnerships with Federal interagency priority programs in addressing water quality issues in U.S. agriculture. This program will also provide the flexibility necessary for CSREES to bring the resources of researchers, instructors, and extension educators to national initiatives and programmatic partnerships that target evolving water quality needs.
The Water Quality Program is targeted directly to the identification and resolution of agriculturally-related degradation of water quality. Proposals are sought that will provide watershed-based information that can be used to: Assess sources of water quality impairment in targeted watersheds; develop and/or recommend options for continued improvement of water quality in targeted watersheds; and evaluate the relative costs and benefits associated with cleanup from all responsible sectors (
There is no commitment by USDA to fund any particular proposal or to make a specific number of awards. Approximately $12.4 million will be available to fund proposals in FY 2000. Proposals are being solicited in each of four component areas: National Facilitation proposals, Regional Water Quality Coordination proposals,
For the purpose of awarding grants under this program, the following definitions are applicable:
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(5)
(6)
(7)
(8)
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Proposals may be submitted by colleges and universities as defined in section 1404 of the National Agricultural research, Extension, and Teaching Policy Act of 1977 (NARETPA). The terms “college” and “university” mean an educational institution in any State which (1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, (2) is legally authorized within such State to provide a program of education beyond secondary education, (3) provides an educational program for which a bachelor's degree or any other higher degree is awarded, (4) is a public or other nonprofit institution, and (5) is accredited by a nationally recognized accrediting agency or association. Although an applicant may be eligible based on its status as one of these entities, there are factors which may exclude an applicant from receiving Federal financial and nonfinancial assistance and benefits under this program (e.g., debarment or suspension of an individual involved or a determination that an applicant is not responsible based on submitted organizational management information). Eligible applicants may subcontract to organizations not eligible under these requirements.
Please note that a research foundation maintained by a college or university is not eligible to receive an award under this program.
If a grant provides a particular benefit to a specific agricultural commodity, the grant recipient is required to provide funds or in-kind support to match the amount of the grant funds provided. See section 10. c. on “Matching Funds” under Part III, B, “Content of Proposals” for more details.
CSREES may waive the matching funds requirement specified in the above paragraph for a grant if CSREES determines that (a) the results of the project, while of particular benefit to a specific agricultural commodity, are likely to be applicable to agricultural commodities generally; or (b) the project involves a minor commodity, the project deals with scientifically important research, and the grant recipient is unable to satisfy the matching funds requirement.
CSREES has determined that grant funds awarded under this authority may not be used for the renovation or refurbishment of research, education, or extension space; the purchase or
In FY 2000 all projects will be awarded using a “New Grant” instrument. In future years, projects under the Integrated Research, Education, and Extension Competitive Grants Program authority can be awarded using one of the grant instruments described below:
The two mechanisms by which new, renewal, and supplemental grants shall be awarded are as follows:
Approximately $1,000,000 is available for National Facilitation proposals. The maximum total award is $400,000, with an annual funding limitation of $100,000. The project period may be one to four years in duration. It is anticipated that two to five grants will be awarded in this program component.
Approximately $5,000,000 is available for Regional Water Quality Coordination proposals. Projects will be supported at expected levels of up to $650,000 per year/per region for up to four years. Projects involving more than one region may be considered for larger funding. CSREES expects that some regions will request less funding due to a smaller number of states within the region. It is anticipated that ten grants will be awarded in this program component.
Approximately $1,400,000 is available for Extension Education proposals. The maximum total award is $300,000, with an annual funding limitation of $100,000. The project period may be one to three years in duration. It is anticipated that 12-15 grants will be awarded in this program component.
Approximately $3,600,000 is available for Integrated Research, Education and Extension proposals. The maximum total award is $600,000, with an annual funding limitation of $200,000. The project period may be one to three years in duration. It is anticipated that 5-15 grants will be awarded in this program component.
Applications received in any of the aforementioned program areas should include budgets commensurate with the activities proposed. Grants awarded under the Program Description Areas of National Facilitation, Extension Education, and Integrated Research, Education, and Extension (as described in this RFP) will be issued as “New Grant” instruments and will be awarded as “Standard Grants.” Grants awarded under the Program Area Description of Regional Water Quality Coordination (as described in this RFP) will be issued as “New Grant” instruments and may be awarded as “Continuation Grants.”
Proposals are invited for projects that develop and initiate nationally coordinated programs that will contribute to an increase in public understanding and involvement in community decision-making and that facilitate the development of public policy on water resources issues. Because protection of local watersheds and aquifers often requires community-based actions, decisions about land use, land management practices, waste water management alternatives for areas without sewers, storm water controls, and the protection and restoration of riparian zones are critical to individual and public planning. All proposals are required to include specific, measurable accomplishments for each project year and a projected time-line. While it is not required that projects be fully independent within the 4-year project period, it is expected that the timeline will culminate in the establishment of an independently supported national coordination effort.
This component of the CSREES Water Quality Program seeks to provide a common base of knowledge in support of individuals and communities grappling to formulate public policy and management strategies that will allow growth and increased profitability while protecting the water resource. Projects will be supported that facilitate the appropriate application of tools and techniques (
CSREES invites proposals to ensure the integration of water quality efforts within the jurisdiction of each of the ten regions established by the U.S. Environmental Protection Agency (EPA). The EPA Regions are:
This component of the CSREES Water Quality Program is designed to make research, education, and extension resources of the university system more accessible to Federal, State, and local water quality improvement efforts, thus enhancing opportunities for agricultural producers and agriculturally impacted communities to adopt voluntary approaches for the improvement of water quality. Grantees are expected to facilitate the conceptualization and implementation of multi-partner efforts that minimize duplication of effort and that leverage multiple funding sources into a common collaborative effort. As such, it is expected that coordination grantees will initiate partnership activities with key water quality efforts in their region. Proposers should clearly identify the water quality issues and education, extension, and research efforts that are common to the region. A plan should be presented that lays out the approaches to be employed for regional resource sharing, communication, priority setting, and outreach. The proposal should also discuss Federal and State water quality activities in the region and present a strategy for establishing partnerships with appropriate programs.
Each proposal must include provision for a regional coordination mechanism (whether an individual, a committee, or an office) and for a Water Quality Research, Education, and Extension Coordinator in each State or Territory in the Region. Regional coordinators will be expected to work with CSREES National Program Leaders to provide liaison among Federal activities (e.g., U.S. Environmental Protection Agency (EPA) Regional Offices, U.S. Geological Survey National Water Quality Assessment Program (USGS NAWQA) Coordination Offices, USDA Agricultural Research Service(ARS) Regional Offices, USDA Forest Service (FS) Regional Offices, National Aeronautics and Space Administration (NASA), National Oceanic and Atmospheric Administration (NOAA), Bureau of Land Management (BLM), etc.), State environmental organizations, and the State Water Quality Research, Education, and Extension Coordinators within the Region. Successful projects will thus provide more efficient development, evaluation, and dissemination of information on watershed improvement, management, and monitoring, and in the development of comparable watershed sampling protocols, data, metadata, and reporting. Provision should be included in the budget request for the regional coordinator to participate in monthly conference calls as well as a national coordination meeting to be held annually in the Washington, D.C. area.
Each regional project must include a plan for the development and maintenance of a georeferenced, watershed-based reporting system. This reporting system will serve as the primary vehicle for reporting progress and accomplishments of the CSREES Water Quality Program. Regional projects are expected: (1) To serve as the repository for the reporting of all projects funded on an ad hoc basis by other components of the CSREES Water Quality Program; (2) to collaborate in the linkage of their databases and reporting systems to other funded regions; (3) to periodically conduct water quality needs assessments for the region and report on partnerships and progress in water quality improvement; (4) to facilitate the incorporation of relevant projects that may become funded in the region through CSREES programs (including other sections of the Water Quality Program, the National Research Initiative, the Animal Waste Center, the Initiative for Future Agriculture and Food Systems) or through other federal and state programs (e.g., EPA 319, EPA National Center for Environmental Research and Quality Assurance (NCERQA), National Science Foundation (NSF), NOAA, etc.); and (5) to be compatible with related information sources (e.g., USGS NAWQA Program, EPA Know Your Watershed, CSREES Integrated Pest Management Program, and the CSREES Pesticide Impact Assessment Program, etc.).
Proposals are invited for Extension Education projects to address water quality issues of State or local importance. One mission of the CSREES Water Quality Program is to provide leadership in extension education that will enable individuals, industry, and government to effect changes enhancing and protecting the Nation's water
Proposals are invited that integrate water quality research, education, and extension to solve water quality problems at the whole watershed. Proposals should: (a) Identify the cause of water quality degradation;
(b) conduct research filling the gaps that are critical to the development of water improvement practices and programs; (c) implement watershed-scale improvement programs; (d) evaluate and monitor the efficacy of the improvement programs implemented; (e) assess the costs and benefits of water quality management practices that are developed; and (f) conduct evaluations closing the loop and improving our understanding of the drivers of water quality degradation. Each proposal is expected to present a fully integrated research, education, and extension approach to accomplish the objectives listed in a-f above. CSREES also encourages the inclusion of a curriculum development component that takes advantage of the integrated watershed activities to enhance environmental education at all levels. The proposing investigators are expected to justify watershed selection (
It is expected that outputs from successful projects will include: the development of watershed management partnerships, increased involvement of community and business sectors in watershed restoration and management, enhanced understanding of regionally-appropriate watershed management practices, increased coordination and partnership between universities and other Federal research and management agencies, and the establishment and maintenance of monitoring and assessment activities related to the agricultural-water quality interface.
All projects selected for award will be required to deliver metadata and annual reports, a final summary report, a bibliography of publications and training materials resulting from support, and an impacts analysis. All reports will be geo-referenced to the watersheds where activities were performed. The final summary report must include total funding (Federal, matching and other) and a listing of students who worked on the project (report graduate degrees awarded and undergraduates trained).
The grantee must prepare an annual report that details all significant activities towards achieving the goals and objectives of the project. The narrative should be succinct and be no longer than 10 pages, using 12-point, single-spaced type. A budget summary should be attached to this report, which will provide an overview of all monies spent during the reporting period.
Program application materials are available at the Integrated Research, Education, and Extension Competitive Grants Program website (http://www.reeusda.gov/integrated/). If you do not have access to our web page or have trouble downloading material, you may contact the Proposal Services Unit, Office of Extramural Programs, USDA/CSREES at (202) 401-5048. When calling the Proposal Services Unit, please indicate that you are requesting forms for the Integrated Research, Education, and Extension Competitive Grants Program—Water Quality. These materials may also be requested via Internet by sending a message with your name, mailing address (not e-mail) and phone number to psb@reeusda.gov. State that you want a copy of the Program Description and application materials (orange book) for the Fiscal Year 2000 Integrated Research, Education, and Extension Competitive Grants Program—Water Quality.
The proposal should follow these guidelines, enabling reviewers to more easily evaluate the merits of each proposal in a systematic, consistent fashion:
(a) The proposal should be prepared on only one side of the page using standard size (8
(b) Each page of the proposal, including the Project Summary, budget pages, required forms, and any appendices, should be numbered sequentially.
(c) The proposal should be stapled in the upper left-hand corner. Do not bind. An original and 14 copies (15 total) must be submitted in one package, along with 10 copies of the “Project Summary” as a separate attachment.
(d) If applicable, proposals should include original illustrations (photographs, color prints, etc.) in all copies of the proposal to prevent loss of meaning through poor quality reproduction.
Each copy of each grant proposal must contain an “Application for Funding”, Form CSREES-661. One copy of the application, preferably the original, must contain the pen-and-ink
Form CSREES-661 serves as a source document for the CSREES grant database; it is therefore important that it be completed accurately. The following items are highlighted as having a high potential for errors or misinterpretations:
(a) Title of Project (Block 6). The title of the project must be brief (80-character maximum), yet represent the major thrust of the effort being proposed. Project titles are read by a variety of nonscientific people; therefore, highly technical words or phraseology should be avoided where possible. In addition, introductory phrases such as “investigation of” or “research on” “education for” or “outreach that” should not be used.
(b) Program to Which You Are Applying (Block 7). “Integrated Research, Education, and Extension Competitive Grants Program—Water Quality.”
(c) Program Area and Number (Block 8). The name of the program component,
(d) Type of Award Request (Block 13). Check the block for “new.”
(e) Principal Investigator(s)/Project Director(s) (PI/PD) (Block 15). The designation of excessive numbers of co-PI/PD's creates problems during final review and award processing. Listing multiple co-PI/PDs, beyond those required for genuine collaboration, is therefore discouraged. Note that providing a Social Security Number is voluntary, but is an integral part of the CSREES information system and will assist in the processing of the proposal.
(f) Type of Performing Organization (Block 18). A check should be placed in the box beside the type of organization which actually will carry out the effort. For example, if the proposal is being submitted by an 1862 Land-Grant Institution but the work will be performed in a department, laboratory, or other organizational unit of an agricultural experiment station, box “03” should be checked. If portions of the effort are to be performed in several departments, check the box that applies to the individual listed as PI/PD #1 in Block 15.a.
(g) Other Possible Sponsors (Block 22). List the names or acronyms of all other public or private sponsors including other agencies within USDA and other programs funded by CSREES to whom your application has been or might be sent. In the event you decide to send your application to another organization or agency at a later date, you must inform the identified CSREES program manager as soon as practicable. Submitting your proposal to other potential sponsors will not prejudice its review by CSREES; however, duplicate support for the same project will not be provided. Complete the “Application for Funding,” Form CSREES-661, in its entirety.
(h) One copy of the “Application for Funding” form must contain the signatures (in ink) of the PI/PD's and authorized organizational representative for the applicant organization.
For consistency and ease in locating information, each proposal must contain a detailed Table of Contents just after the cover page. The Table of Contents should contain page numbers for each component of the proposal. Page numbers should begin with the first page of the Project Description.
The proposal must contain a Project Summary of 250 words or less on a separate page which should be placed immediately after the Table of Contents and should not be numbered. The names and institutions of all PI/PD's and co-PI/PD's should be listed on this form, in addition to the title of the project. The summary should be a self-contained, specific description of the activity to be undertaken and should focus on: overall project goal(s) and supporting objectives; plans to accomplish project goal(s); and relevance of the project to regional, State, or local water quality efforts and/or list of CSREES Water Quality Program Priorities listed above. The importance of a concise, informative Project Summary cannot be overemphasized. Summaries for Regional Water Quality Coordination Proposals should also indicate all organizations participating in the effort, the organization that will house the database effort, and the mechanism that will be used to coordinate between organizations.
For Regional Water Quality Coordination and for Integrated Research, Education, and Extension proposals, the project description may not exceed 15 single- or double-spaced pages of written text and may not exceed a total of 20 pages after inclusion of figures and tables.
For National Facilitation and for Extension Education proposals, the project description may not exceed 8 single- or double-spaced pages of written text and may not exceed a total of ten pages after inclusion of figures and tables.
The project description should include the following:
a.
b.
(1) Describe the activities to be performed, the means by which data and information will be analyzed and interpreted, the methods that will be used for information transfer, the methods that will be used to evaluate adoption and project impact, and the limitations and pitfalls to the approaches selected.
(2) A plan should be presented for coordination and communication between project collaborators.
(3) A project timeline.
(4) A description of outcomes and expected deliverables.
(5) Literature Review. All references cited should be complete, including titles and all co-authors, and should conform to an acceptable journal format.
In addition to the above, the National Facilitation and Regional Coordination proposals should describe the roles and responsibilities of central coordinators and should present a management plan for the administration of the project including facilitation of communication, planning, and annual report preparation.
Appendices to the Project Description are allowed if they are directly germane to the proposed project and are limited to a total of two of the following: reprints (papers that have been
All senior personnel who are expected to be involved in the effort must be clearly identified. For each person, the following should be included:
a. The roles and responsibilities of each PI/PD and/or collaborator should be clearly described;
b. An estimate of the time commitment involved for each PI/PD and/or collaborator; and
c. Vitae of each PI/PD, senior associate, and other professional personnel. This section should include vitae of all key persons who are expected to work on the project, whether or not CSREES funds are sought for their support. The vitae should be limited to two (2) pages each in length, excluding publications listings. A chronological list of all publications in refereed journals during the past four (4) years, including those in press, must be provided for each project member for which a curriculum vitae is provided. Also list those non-refereed technical publications that have relevance to the proposed project. All authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
A Conflict-of-Interest List must be provided for all individuals involved in the project (identified as key personnel). Each list should be on a separate page and include alphabetically the full names of the individuals in the following categories: (a) All collaborators on projects within the past four years, including current and planned collaborations; (b) all co-authors on publications within the past four years, including pending publications and submissions; (c) all persons in your field with whom you have had a consulting or financial arrangement within the past four years, who stand to gain by seeing the project funded; and (d) all thesis or postdoctoral advisees/advisors within the past four years (some may wish to call these life-time conflicts). This form is necessary to assist program staff in excluding from proposal review those individuals who have conflicts-of-interest with the personnel in the grant proposal. The Program Director must be informed of any additional conflicts-of-interest that arise after the proposal is submitted.
If it will be necessary to enter into formal consulting or collaborative arrangements with others, such arrangements should be fully explained and justified. In addition, evidence should be provided that the collaborators involved have agreed to render these services. If the need for consultant services is anticipated, the proposal narrative should provide a justification for the use of such services, a statement of work to be performed, and a resume or curriculum vita for each consultant. For purposes of proposal development, informal day-to-day contacts between key project personnel and outside experts are not considered to be collaborative arrangements and thus do not need to be detailed.
All anticipated subcontractual arrangements also should be explained and justified in this section. A proposed statement of work and a budget for each arrangement involving the transfer of substantive programmatic work or the providing of financial assistance to a third party must be provided. Agreements between departments or other units of your own institution and minor arrangements with entities outside of your institution (
If you expect to enter into subcontractual arrangements, please note that the provisions contained in 7 CFR Part 3019, USDA Uniform Administrative Requirements for Grant and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, and the general provisions contained in 7 CFR Part 3015.205, USDA Uniform Federal Assistance Regulations, flow down to subrecipients. In addition, required clauses from Sections 40-48 (“Procurement Standards”) and Appendix A (“Contract Provisions”) to 7 CFR Part 3019 should be included in final contractual documents, and it is necessary for the subawardee to make a certification relating to debarment/suspension.
a. Budget Form. Prepare the budget, Form CSREES-55, in accordance with instructions provided. A budget form is required for each year of requested support. In addition, a cumulative budget is required detailing the requested total support for the overall project period. The budget form may be reproduced as needed by applicants. Funds may be requested under any of the categories listed on the form, provided that the item or service for which support is requested is allowable under the authorizing legislation, the applicable Federal cost principles, and these program guidelines, and can be justified as necessary for the successful conduct of the proposed project. Applicants must also include a Budget Narrative to justify their budgets (see section b below.)
The following guidelines should be used in developing your proposal budget(s):
b. Budget Narrative. All budget categories, excluding Indirect Costs, for which support is requested must be individually listed (with costs) and justified on a separate sheet of paper and placed immediately behind the Budget Form. Explanations of matching funds or lack thereof on commodity-specific projects also are to be included in this section.
c. Matching Funds. If an applicant concludes that matching funds are not required as specified under Part I (e), a justification should be included in the Budget Narrative. CSREES will consider this justification when ascertaining final matching requirements or in determining if required matching can be waived. CSREES retains the right to make final determinations regarding matching requirements.
For those grants requiring matching funds as specified under Part I (e), proposals should include written verification of commitments of matching support (including both cash and in-kind contributions) from third parties. Written verification means:
(a) For any third party cash contributions, a separate pledge agreement for each donation, signed by the authorized organizational representatives of the donor organization and the applicant organization, which must include: (1) The name, address, and telephone number of the donor; (2) the name of the applicant organization; (3) the title of the project for which the donation is made; (4) the dollar amount of the cash donation; and (5) a statement that the donor will pay the cash contribution during the grant period; and
(b) For any third party in-kind contributions, a separate pledge agreement for each contribution, signed by the authorized organizational representatives of the donor organization and the applicant organization, which must include: (1) The name, address, and telephone number of the donor; (2) the name of the applicant organization; (3) the title of the project for which the donation is made; (4) a good faith estimate of the current fair market value of the third party in-kind contribution; and (5) a statement that the donor will make the contribution during the grant period.
The sources and amount of all matching support from outside the applicant institution should be summarized on a separate page and placed in the proposal immediately following the Budget Narrative. All pledge agreements must be placed in the proposal immediately following the summary of matching support.
The value of applicant contributions to the project shall be established in accordance with applicable cost principles. Applicants should refer to OMB Circulars A-21, Cost Principles for Educational Institutions, for further guidance and other requirements relating to matching and allowable costs.
All proposals must contain Form CSREES-663 listing other current public or private support (including in-house support) to which key personnel identified in the proposal have committed portions of their time, whether or not salary support for person(s) involved is included in the budget. Analogous information must be provided for any pending proposals that are being considered by, or that will be submitted in the near future to, other possible sponsors, including other USDA Programs or agencies. Concurrent submission of identical or similar proposals to the possible sponsors will not prejudice proposal review or evaluation by the CSREES for this purpose. However, a proposal that duplicates or overlaps substantially with a proposal already reviewed and funded (or to be funded) by another organization or agency will not be funded under this program. Note that the project being proposed should be included in the pending section of the form.
A number of situations encountered in the conduct of projects require special assurances, supporting documentation, etc., before funding can be approved for the project. In addition to any other situation that may exist with regard to a particular project, it is expected that some applications submitted in response to these guidelines will involve the following:
Note that by signing Form CSREES-661 the applicant is providing the certifications required by 7 CFR Part 3017, as amended, regarding Debarment and Suspension and Drug Free Workplace, and 7 CFR Part 3018, regarding Lobbying. The certification forms are included in the application package for informational purposes only. These forms should not be submitted with the proposal since by signing form CSREES-661 your organization is providing the required certifications. If the project will involve a subcontractor or consultant, the subcontractor/consultant should submit a form AD-1048 to the grantee organization for retention in their records. This form should not be submitted to USDA.
As outlined in 7 CFR Part 3407 (the Cooperative State Research, Education, and Extension Service regulations implementing NEPA), the environmental data for any proposed project is to be provided to CSREES so that CSREES may determine whether any further action is needed. In some cases, however, the preparation of environmental data may not be required. Certain categories of actions are excluded from the requirements of NEPA.
In order for CSREES to determine whether any further action is needed with respect to NEPA, pertinent information regarding the possible environmental impacts of a particular project is necessary; therefore, Form CSREES-1234, “NEPA Exclusions Form,” must be included in the proposal indicating whether the applicant is of the opinion that the project falls within a categorical exclusion and the reasons therefore. If it is the applicant's opinion that the proposed project falls within the categorical exclusions, the specific exclusion must be identified. Form CSREES-1234 and supporting documentation should be included as the last page of this proposal.
Even though a project may fall within the categorical exclusions, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for an activity, if substantial controversy on environmental grounds exists or if other extraordinary conditions or circumstances are present which may cause such activity to have a significant environmental effect.
Proposals must be transmitted by June 6, 2000, as indicated by postmark or date of courier bill of lading. Proposals transmitted after this date will not be considered for funding.
An original and 14 copies must be submitted. In addition submit 10 copies of the proposal's Project Summary. All copies of the proposals and the Project Summaries must be submitted in one package.
Applicants are strongly encouraged to submit completed proposals via overnight mail or delivery service to ensure timely receipt by the USDA. The address for hand-delivered proposals or proposals submitted using an express mail or overnight courier service is: Integrated Research, Education, and Extension Competitive Grants Program—Water Quality; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; Room 303, Aerospace Center; 901 D Street, S.W.; Washington, D.C. 20024.
Proposals sent via the U.S. Postal Service must be sent to the following address: Integrated Research, Education, and Extension Competitive Grants Program—Water Quality; c/o Proposal Services Unit; Cooperative State Research, Education, and Extension Service; U.S. Department of Agriculture; STOP 2245; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2245.
The receipt of all proposals will be acknowledged by e-mail. Therefore, applicants are encouraged to provide e-mail addresses, where designated, on the Form CSREES-661. If the applicant's email address is not indicated, CSREES will acknowledge receipt of the proposal by letter.
Once the proposal has been assigned an identification number, please cite that number on all future correspondence. If the applicant does not receive an acknowledgment within 60 days of the submission deadline, please contact the Program Director.
Each proposal will be evaluated in a 3-part process. First, each proposal will be screened to ensure that it meets the administrative requirements as set forth in this request for proposals. Second, proposals that meet these requirements will be technically evaluated by a peer review panel. Each program component will have a separate review panel. Third, proposals ranked highly by the technical peer review panel will be evaluated by a panel of experts that will select awardees based on an evaluation of: national coverage, topical coverage, level of participation from stakeholder community, likelihood for the implementation of voluntary approaches to water quality improvement, and convergence with USDA and federal partnership priorities.
Peer review panel members will be selected based upon their training and experience in relevant scientific, education or extension fields taking into account the following factors: (a) The level of formal scientific, technical education, and extension experience of the individual, as well as the extent to which an individual is engaged in relevant research, education and/or extension activities; (b) the need to include as peer reviewers experts from various areas of specialization within relevant scientific, education, and extension fields; (c) the need to include as reviewers other experts (producers, range or forest managers/operators, consumers, etc.) who can assess relevance of the proposals to targeted audiences and to program needs; (d) the need to include as peer reviewers experts from a variety of organizational types (e.g., colleges, universities, industry, state and Federal agencies, private profit and non-profit organizations), and geographic locations; (e) the need to maintain a balanced composition of peer review groups with regard to minority and female representation and an equitable age distribution; and (f) the need to include members that can judge the effective usefulness to producers and the general public of each proposal.
The evaluation factors below will be used in reviewing applications submitted in response to this request for proposals:
(1) The proposal specifies realistic water quality-related outcomes and presents an approach with high technical and/or educational merit.
(2) The proposal identifies, documents, and addresses water quality problems of Federal, State, regional, or local importance.
(3) The proposal specifically addresses one or more of the program priorities identified in Part II.
(4) The proposal establishes the integrated nature of the Water Quality program and includes inter-disciplinary approaches.
(5) The proposal encompasses the development of partnerships among the various stakeholders to generate support and resources.
(6) The proposal includes a budget adequate to carry out project activities and which is cost-effective and justified.
(7) The proposal provides a clear plan for accomplishments reporting.
(8) The proposal clearly demonstrates that the investigators and institutions involved in the project exhibit that: (a) Project personnel have appropriate training and a demonstrated awareness of previous and alternative approaches to the problem identified in the proposal, and performance record and/or potential for future accomplishments; (b) appropriate time has been allocated for systematic attainment of objectives; (c) the participating institutions have experience and competence in subject areas appropriate to the successful completion of the project; and (d) adequate support personnel, facilities, and instrumentation are available or obtainable. For the National Facilitation proposals and Regional Water Quality Coordination proposals will also be judged on the quality of the management plan that is proposed. Priority will be given for integrated, multifunctional research, education, and extension projects.
During the peer evaluation process, extreme care will be taken to prevent any actual or perceived conflicts-of-interest that may impact review or evaluation. For the purpose of determining conflicts-of-interest, the academic and administrative autonomy of an institution shall be determined by reference to the January 1998 issue of the Codebook for Compatible Statistical Reporting of Federal Support to Universities, Colleges, and Nonprofit Institutions, prepared by Quantum Research Corporation for the National Science Foundation.
Names of submitting institutions and individuals, as well as proposal content and peer evaluations, will be kept confidential, except to those involved in the review process, to the extent permitted by law. In addition, the identities of peer reviewers will remain confidential throughout the entire review process. Therefore, the names of the reviewers will not be released to applicants. At the end of the fiscal year, names of panelists will be made available in such a way that the panelists cannot be identified with the review of any particular proposal.
Copies of summary reviews, not including the identity of the reviewers, will be sent to all applicant PI/PD's automatically, after the review process has been completed.
(1) General.
Within the limit of funds available for such purpose, the awarding official of CSREES shall make grants to those responsible, eligible applicants whose proposals are judged most meritorious under the procedures set forth in this RFP. The date specified by the awarding official of CSREES as the effective date of the grant shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. It should be noted that the project need not be initiated on the grant effective date, but as soon thereafter as practical so that project goals may be attained within the funded project period. All funds granted by CSREES under this RFP shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations, the terms and conditions of the award, the applicable Federal cost principles, and the Department's assistance regulations (parts 3015 and 3019 of 7 CFR).
(2) Organizational Management Information.
Specific management information relating to an applicant shall be submitted on a one-time basis as part of the responsibility determination prior to the award of a grant identified under this RFP, if such information has not been provided previously under this or another CSREES program. CSREES will provide copies of forms recommended for use in fulfilling these requirements as part of the preaward process.
(3) Grant Award Document and Notice of Grant Award.
The grant award document shall include at a minimum the following:
(a) Legal name and address of performing organization or institution to whom the Administrator has awarded a grant under the terms of this request for proposals;
(b) Title of project;
(c) Name(s) and address(es) of PI/PD's chosen to direct and control approved activities;
(d) Identifying grant number assigned by the Department;
(e) Project period, specifying the amount of time the Department intends to support the project without requiring recompetition for funds;
(f) Total amount of Departmental financial assistance approved by the Administrator during the project period;
(g) Legal authority(ies) under which the grant is awarded;
(h) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award; and
(i) Other information or provisions deemed necessary by CSREES to carry out its respective granting activities or
The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
(1) Delegation of Fiscal Responsibility
Unless the terms and conditions of the grant state otherwise, the grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
(2) Changes in Project Plans
(a) The permissible changes by the grantee, PI/PD(s), or other key project personnel in the approved project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee and/or the PI/PD(s) are uncertain as to whether a change complies with this provision, the question must be referred to the CSREES Authorized Departmental Officer (ADO) for a final determination.
(b) Changes in approved goals or objectives shall be requested by the grantee and approved in writing by the ADO prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
(c) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the awarding official of CSREES prior to effecting such changes.
(d) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the ADO prior to effecting such transfers, unless prescribed otherwise in the terms and conditions of the grant.
(e) Changes in Project Period: The project period may be extended by CSREES without additional financial support, for such additional period(s) as the ADO determines may be necessary to complete or fulfill the purposes of an approved project, but in no case shall the total project period exceed five years. Any extension of time shall be conditioned upon prior request by the grantee and approval in writing by the ADO, unless prescribed otherwise in the terms and conditions of a grant.
(f) Changes in Approved Budget: Changes in an approved budget must be requested by the grantee and approved in writing by the ADO prior to instituting such changes if the revision will involve transfers or expenditures of amounts requiring prior approval as set forth in the applicable Federal cost principles, Departmental regulations, or in the grant award.
Several Federal statutes and regulations apply to grant proposals considered for review and to project grants awarded under this program. These include but are not limited to:
7 CFR Part 1.1—USDA implementation of the Freedom of Information Act.
7 CFR Part 3—USDA implementation of OMB Circular No. A-129 regarding debt collection.
7 CFR Part 15, subpart A—USDA implementation of Title VI of the Civil Rights Act of 1964, as amended.
7 CFR Part 3015—USDA Uniform Federal Assistance Regulations, implementing OMB directives (
7 CFR Part 3017—USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
7 CFR Part 3018—USDA implementation of Restrictions on Lobbying. Imposes prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
7 CFR Part 3019—USDA implementation of OMB Circular A-110, Uniform Administrative Requirements for Grants and Other Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations.
7 CFR Part 3052—USDA implementation of OMB Circular No. A-133, Audits of States, Local Governments, and Non-profit Organizations.
7 CFR Part 3407—CSREES procedures to implement the National Environmental Policy Act of 1969, as amended.
29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR Part 15B (USDA implementation of statute)—prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
35 U.S.C. 200
When a proposal results in a grant, it becomes a part of the record of CSREES transactions, available to the public upon specific request. Information that the Secretary determines to be of a confidential, privileged, or proprietary nature will be held in confidence to the extent permitted by law. Therefore, any information that the applicant wishes to have considered as confidential, privileged, or proprietary should be clearly marked within the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.
For the reasons set forth in the final Rule-related Notice to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is excluded from the scope of the Executive Order 12372 which requires intergovernmental consultation with State and local officials. Under the provisions of the Paperwork Reduction Act of 1995, as amended (44 U.S.C. chapter 35), the collection of information requirements contained in this Notice have been approved under OMB Document No. 0524-0022.
Financial Management Service, Fiscal Service, Treasury.
Interim Rule with request for comment.
We're issuing an interim rule amending our regulation governing the use of the Automated Clearing House (ACH) system by Federal agencies. Our regulation generally adopts the ACH rules developed by NACHA—The Electronic Payments Association (NACHA) (ACH Rules) as the rules governing ACH transactions by Federal agencies. We're revising our regulation to reflect changes that NACHA has made to the ACH Rules since the publication of NACHA's 1999 rule book.
This interim rule is effective May 8, 2000. Comments must be received by June 6, 2000. The incorporation by reference of the publication listed in the rule is approved by the Director of the Federal Register as of May 8, 2000.
You can download this interim rule at the following World Wide Web address: http://www.fms.treas.gov/ach/.
You may also inspect and copy this interim rule at: Treasury Department Library, Freedom of Information Act (FOIA) Collection, Room 5030, Main Treasury Building, 1500 Pennsylvania Avenue, NW, Washington, DC 20220. Before visiting, you must call (202) 622-0990 for an appointment.
You may send comments electronically to the following address: 210comments@fms.treas.gov. You may also mail comments to Cynthia L. Johnson, Director, Cash Management Policy and Planning Division, Financial Management Service, 401 14th Street, SW, Room 420, Washington, DC 20227.
On April 9, 1999, we published a final rule in the
NACHA periodically updates the ACH Rules. Each year NACHA publishes a new rule book that reflects the changes to the ACH Rules that have been approved since the publication of the previous rule book. NACHA recently published its 2000 rule book.
Part 210 provides that any amendment to the ACH Rules, as published in the 1999 Rule Book, that takes effect after September 17, 1999, will not apply to Government ACH entries unless we publish notice of acceptance of the amendment in the
The ACH Rules published in NACHA's 2000 rule book reflect changes to the ACH Rules published in NACHA's 1999 rule book related to seven topics:
NACHA has revised the self-audit provisions of the ACH Rules to require self-audits annually rather than every three years; to require third-party service providers to conduct self-audits; to require proof be retained that a self-audit was completed; and to require that originating depository financial institutions (ODFIs) and receiving depository financial institutions (RDFIs) specifically warrant that they have completed self-audits. The effective date of these changes was December 17, 1999.
NACHA has adopted an interim rule to provide a legal framework for the conversion of checks to ACH debit entries at the point-of-purchase. The interim rule expands the definition of Prearranged Payment and Deposit (PPD) format in the ACH Rules to allow this format to be used to initiate a one-time ACH debit entry to a Receiver's account for purchases made in person at the point-of-purchase. The implementation period for the interim rule began on September 17, 1999 and will continue through September 14, 2000.
NACHA also has adopted a final rule, which will take effect when the interim rule ends, that amends the ACH Rules by establishing a legal framework to allow for the conversion of checks to ACH debit entries at the point-of-purchase. The amendment creates a new Standard Entry Class (SEC) code, POP (Point-of-Purchase Entry), that will allow for an Originator to initiate a one-time ACH debit entry to a Receiver's account for purchases made in person at the point-of-purchase. This rule change will become effective as of September 15, 2000.
NACHA has adopted an interim rule expanding the definition of the PPD format in the ACH Rules to allow Originators to utilize the PPD format to truncate checks received through the U.S. mail for payment for goods or services and convert them to ACH debit entries. The rule provides a legal framework to allow pilot tests of lockbox check truncation. The rule requires the Originator to provide the consumer with notice of the check truncation policy prior to receiving the first check payment that will be truncated. The consumer must authorize the entry in writing, signed or similarly authenticated, unless the notice to the consumer indicates that the item will be truncated if the consumer doesn't provide the Originator with written notice not to truncate. The implementation period for the interim rule began on December 17, 1999, and will continue through December 15, 2000.
NACHA has revised the definition of ACH Operator to more clearly define the role and functions assumed by ACH Operators when clearing and settling
NACHA has amended the ACH Rules to establish two new SEC codes, CBR (Corporate Cross-Border Transactions) and PBR (Consumer Cross-Border Transactions), to be used for the origination and receipt of cross-border ACH entries. The amendment will become effective as of September 15, 2000.
NACHA has established a new SEC code to provide commercial depositors and their financial institutions with a legal framework and technical specifications to transmit ACH debit entries to collect checks that have been returned for insufficient or uncollected funds. The new code will become effective as of September 15, 2000.
NACHA has established two new sets of transaction codes to support the transmission of ACH credit and debit entries to financial institutions' general ledger accounts and the transmission of credit entries to loan accounts. This change to the ACH Rules will become effective as of September 15, 2000.
We are accepting all of the changes to the ACH Rules that are reflected in the 2000 Rule Book with two exceptions discussed in Section C below. Under the interim rule, there are still 11 provisions of the ACH Rules that Part 210 preempts, except that we are broadening our preemption of the ACH rules enforcement provisions to include the self-audit requirements (see 210.2(d)(3)). No change to the 11 preempted provisions is necessary to reflect our preemption of the changes related to types of accounts, because we were aware of NACHA's intention to permit the crediting of ACH credits to general ledger and loan accounts and had already preempted that provision of the ACH Rules for Federal payments other than vendor payments. See 64 FR 17474.
All of the ACH rule changes that we are accepting are effective as of the effective date of publication of this interim rule or NACHA's effective date for the rule change, whichever is later.
We're accepting both the interim and the final ACH rule changes that allow an Originator to initiate a one-time ACH debit entry to a Receiver's account for purchases made in person at the point-of-purchase.
We are currently engaged in pilot programs with several agencies to test the conversion of checks to ACH debit entries at the point-of-purchase. We believe that these transactions could expand the utility of the ACH system and might provide useful and cost-effective applications for Government agency collections. We also recognize, however, that the conversion of checks to ACH debits raises various issues, including the kind of disclosure and authorization that is appropriate for such transactions and the kinds of checks that can or should be converted.
While we believe that the establishment of a legal framework for such transactions is desirable, it's difficult to determine the appropriate responsibilities and liabilities of the parties before the application of this technology has been tested. Moreover, attempting to establish a definitive legal framework for point-of-purchase check conversion by agencies at this time could hamper innovation and impede operational flexibility. Because of the diversity and unique concerns of Government check collections, it's unclear whether the model of POP check conversion will be workable or appropriate on a Government-wide basis. Accordingly, although we're accepting the NACHA's interim and final rule changes in order to provide a basic legal foundation for these transactions, we anticipate that we would seek public comment on the rules governing POP check conversion before engaging in POP check conversion on anything other than a pilot basis. In addition, in view of the experimental nature of pilot programs, it is possible that our pilots may not conform to all of the requirements otherwise imposed under the ACH Rules. It is our intention, however, to ensure that any on-going Government POP check conversion programs that we might establish in the future will conform to the ACH Rules that we incorporate in Part 210.
We're accepting the Interim Rule that provides a legal framework for Originators to truncate checks received through the mail in payment for goods or services and convert them to ACH debit entries. The rule requires the Originator to provide the consumer with notice of the check truncation policy prior to receiving the first check payment that will be truncated. The Receiver must authorize the truncation, either by “opting-in” (meaning that the Receiver must authorize the entry in writing, signed or similarly authenticated), or “opting-out” (meaning that the notice to the Receiver indicates that the Receiver may provide the Originator with written notice not to truncate the check).
Although we're not engaged in lockbox check truncation at this time, we are aware that lockbox check truncation could offer significant cost savings for Government collections. However, we're concerned that consumers understand and consent to such transactions. It is therefore our intention to seek public comment on the rules governing lockbox check truncation before engaging in lockbox check truncation other than on a pilot basis. As discussed above in the context of POP check conversion, pilot programs, by virtue of their very nature in exploring new or novel applications of technology, may not conform to all of the requirements otherwise imposed under the ACH Rules.
We are accepting the revisions to the ACH Operator definition.
We are accepting the rules establishing two new SEC codes to be used for the origination and receipt of cross-border ACH entries. We don't anticipate that agencies will be utilizing these codes for the origination or receipt of cross-border entries in the immediate future. However, it is possible that at some future time, agencies may wish to utilize these codes.
We're accepting the rule changes that establish a new SEC code to provide commercial depositors and their financial institutions with a legal framework and technical specifications to transmit ACH debit entries to collect checks that have been returned for insufficient or uncollected funds. We believe that the ability to use ACH debit entries in this manner may facilitate the Government's ability to collect on checks that have been returned unpaid.
We aren't accepting the ACH Rule changes related to the self-audit requirements. The purpose of the changes to the self-audit requirements is to promote better compliance with the ACH Rules. We believe that compliance with the ACH Rules is important and we are working with agencies to achieve Government-wide compliance with all ACH Rule requirements, including applicable time frames. Federal agencies are subject to oversight and audit requirements unique to the Federal Government. For example, the Office of the Inspector General and the General Accounting Office periodically review and audit various aspects of Federal agencies' operations. Accordingly, we believe that the imposition of a separate ACH compliance self-examination is both unnecessary and unlikely to significantly enhance the Government's compliance with Part 210.
We're not accepting, for Federal payments other than vendor payments, the changes to the ACH Rules that permit the crediting of ACH credits to a financial institution general ledger account or to a loan account. Section 210.5 provides that ACH credit entries representing Federal payments other than vendor payments must be deposited to an account at a financial institution in the name of the recipient, with three exceptions. As discussed in the rulemaking release that accompanied our adoption of this requirement, the term “account” for purposes of § 210.5 is intended to mean a deposit account and not a loan account or general ledger account. See 64 FR 17472, 17474 (1999). We believe that important consumer protections are associated with the crediting of Federal payments to a deposit account, including those available under Regulation E (12 CFR Part 205) and Regulation DD (12 CFR Part 230), as well as the availability of Federal deposit or share insurance. Therefore, we're not accepting this change to the ACH Rules with respect to payments other than vendor payments.
We are amending the definition of ACH Rules to reflect NACHA's name change from the National Automated Clearing House Association to NACHA—The Electronic Payments Association.
We are amending the definition of “applicable ACH Rules” at section 210.2(d) to reference the rules published in NACHA's 2000 rule book rather than the rules published in NACHA's 1999 rule book. In addition, we are amending section 210.2(d)(3) to exclude the self-audit requirements of the ACH Rules.
We are amending subsection 210.3(b), “Incorporation by reference—applicable ACH Rules,” by replacing the references to the ACH Rules as published in the 1999 rule book with references to the ACH Rules as published in the 2000 rule book.
We are revising section 210.5, “Account requirements for Federal payments,” by specifically providing in subsection 210.5(a) that an ACH entry representing a Federal payment other than a vendor payment must be deposited into a deposit account at a financial institution. This revision of the regulatory language does not represent a substantive change from the existing rule since, as discussed above, the rulemaking release that accompanied our adoption of this requirement indicated that § 210.5 was intended to require that Federal payments other than vendor payments must be deposited to a deposit account and not a loan account or general ledger account. See 64 FR 17472, 17474 (1999).
We also are amending the first sentence of § 210.5 to read, “Notwithstanding ACH Rules 2.1.2, 4.1.3, and Appendix Two, section 2.2 (listing general ledger and loan accounts as permissible transaction codes) * * *” in order to clarify that the requirements of § 210.5 preempt the ACH Rules that would otherwise allow ACH credits generally to be sent to general ledger or loan accounts.
We invite comment on all aspects of the interim rule.
On June 1, 1998, the President issued a memorandum directing each agency in the Executive branch to write its rules in plain language. This directive is effective for all new proposed and final rulemaking documents issued on or after January 1, 1999. We invite comment on how to make this interim rule clearer. For example, you may wish to discuss: (1) Whether we have organized the material to suit your needs; (2) whether the requirements of this interim rule are clear; or (3) whether there is something else we could do to make this rule easier to understand.
We find that good cause exists for issuing this interim rule without prior notice and comment. Under the Administrative Procedure Act, an agency is permitted to issue a rule without prior notice and comment when the agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). We believe that it is important to address the publication of new ACH rules as quickly as possible in order to mitigate the uncertainty and inconvenience to financial institutions that would result from a time lag in responding to NACHA's rule changes. When we proposed to address changes to the ACH Rules by reviewing and responding to rule changes on an annual basis, we received many comments expressing concern over the potential consequences of such a time lag. For these reasons, we conclude that we have good cause for issuing this interim rule without prior notice and comment. Nevertheless, we are inviting comment and will consider the comments received. For these reasons we also find that good cause exists to make this interim rule effective without a delayed effective date.
This interim rule does not meet the criteria for a “significant regulatory action” as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply.
Because notice and public comment are not required, the Regulatory Flexibility Act (5 U.S.C. 601) does not apply.
We ask for no new collections of information in this final rule. Therefore, the Paperwork Reduction Act (44 U.S.C. 3501) does not apply.
Automated Clearing House, Electronic funds transfers, Financial institutions, Fraud, Incorporation by reference.
5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 3302, 3321, 3332, 3335, and 3720.
(a)
(d)
(1) ACH Rule 1.1 (limiting the applicability of the ACH Rules to members of an ACH association);
(2) ACH Rule 1.2.2 (governing claims for compensation);
(3) ACH Rule 1.2.4; 2.2.1.10; Appendix Eight and Appendix Eleven (governing the enforcement of the ACH Rules, including self-audit requirements);
(4) ACH Rules 2.2.1.8; 2.6; and 4.7 (governing the reclamation of benefit payments);
(5) ACH Rule 8.3 and Appendix Two (requiring that a credit entry be originated no more than two banking days before the settlement date of the entry—see definition of “Effective Entry Date” in Appendix Two).
(b)
(2) Any amendment to the applicable ACH Rules that takes effect after September 15, 2000, shall not apply to Government entries unless the Service expressly accepts such amendment by publishing notice of acceptance of the amendment to this part in the
(a) Notwithstanding ACH Rules 2.1.2, 4.1.3, and Appendix Two, section 2.2 (listing general ledger and loan accounts as permissible transaction codes), an ACH credit entry representing a Federal payment other than a vendor payment shall be deposited into a deposit account at a financial institution. For all payments other than vendor payments, the account at the financial institution shall be in the name of the recipient, except as provided in paragraph (b) of this section.