[Federal Register Volume 66, Number 232 (Monday, December 3, 2001)]
[Rules and Regulations]
[Pages 60139-60140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29890]



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Rules and Regulations
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Federal Register / Vol. 66, No. 232 / Monday, December 3, 2001 / 
Rules and Regulations

[[Page 60139]]



DEPARTMENT OF TRANSPORTATION

5 CFR Part 6001

RINs 2105-AD08, 3209-AA15


Supplemental Standards of Ethical Conduct for Employees of the 
Department of Transportation

AGENCY: Department of Transportation.

ACTION: Final rule; amendment.

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SUMMARY: The Department of Transportation, with the concurrence of the 
Office of Government Ethics (OGE), amends the Supplemental Standards of 
Ethical Conduct for Employees of the Department of Transportation 
(Transportation Ethics Regulations). The amendment adds authority to 
waive the general prohibition against Federal Aviation Administration 
(FAA) employees holding stock or other securities interests in 
airlines, aircraft manufacturing companies or suppliers of components 
or parts to those entities. The exercise of this waiver authority will 
be conditioned in each case upon a determination that the waiver is not 
inconsistent with the standards of ethical conduct for employees of the 
Executive Branch and that application of the general FAA prohibition is 
not necessary to avoid the appearance of misuse of position or loss of 
impartiality.

EFFECTIVE DATE: December 3, 2001.

FOR FURTHER INFORMATION CONTACT: William R. Register, Senior Ethics 
Counsel, Office of the General Counsel, Department of Transportation, 
Room 10102, Washington, DC 20590, (202) 366-9154; or John Walsh, 
Associate Chief Counsel for Ethics, (202) 366-4099, FAA General Law 
Division, 400 7th Street, SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

I. Background

    The Transportation Ethics Regulations were issued in 1996 to 
minimize potential conflicts of interest and supplement OGE's Standards 
of Ethical Conduct for Employees of the Executive Branch (5 CFR part 
2635) (Standards). See 61 FR 39901-39904 (July 31, 1996), as codified 
at 5 CFR part 6001. The FAA-pertinent part of the Transportation Ethics 
Regulations, at 5 CFR 6001.104(b), generally prohibits FAA employees 
from holding any stock or other securities interest in an airline or 
aircraft manufacturing company, or in a supplier of components or parts 
to an airline or aircraft manufacturing company. The requirement 
prevents employees from taking actions that may violate conflict of 
interest laws or that may appear to do so. Exceptions to the general 
prohibition permit FAA employees to invest in certain mutual funds that 
hold the prohibited interests. See 5 CFR 6001.104(c).
    The FAA's experience has shown, however, that the absolute 
prohibition in the current regulation is not needed to preserve the 
integrity of FAA operations. Also, employees for whom a waiver may be 
granted will nevertheless be subject to the conflict of interest laws 
and ethics regulations that apply to all Federal employees. These laws 
and regulations prohibit employees from taking action in any matter 
affecting a company in which they have any stock or other financial 
interest unless a regulatory exemption or a written waiver is obtained. 
Therefore, an amendment is being adopted to include in the regulation 
waiver language such as has been used for years by other agencies. See, 
for example, the regulations of the Department of the Interior at 5 CFR 
3501.104(b)(5).
    Under new Sec. 6001.104(d), an agency designee, as defined in 5 CFR 
6001.102, may grant a waiver from the regulatory restriction in 
Sec. 6001.104(b) based on a determination that the waiver is not 
inconsistent with 5 CFR part 2635 or otherwise prohibited by law and 
that, under the particular circumstances, application of the 
restriction is not necessary to avoid the appearance of misuse of 
position or loss of impartiality and objectivity with which agency 
programs are administered. An FAA employee may be required under the 
waiver to disqualify himself from a particular matter or take other 
appropriate action. Initially, this new waiver authority will permit 
the FAA to consider a broader pool of applicants currently under 
consideration for temporary security positions at the nation's 
airports.
    In addition, the Department is revising the authority citation of 
the Transportation Ethics Regulations to add reference to 5 U.S.C. 7353 
concerning restrictions on gifts to Federal employees.

II. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(a)(2), (b), and (d), the Department has 
found that good cause exists for waiving the regular notice of proposed 
rulemaking, and opportunity for public comment. The Department also 
finds that good cause exists for making this final rule effective 
immediately upon publication in the Federal Register. We make these 
findings because it is in the public interest that this rule, which 
concerns matters of agency management, personnel, organization, 
practice and procedure, and which relieves certain restrictions placed 
on FAA employees, become effective on the date of publication.

Regulatory Flexibility Act Analysis

    Pursuant to section 605(b) of the Regulatory Flexibility Act, the 
Department certifies that this rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
Accordingly, no regulatory flexibility analysis is required.

Executive Order 12866 Determination

    The Department has determined that this final rule does not 
constitute a ``significant regulatory action'' for the purposes of 
Executive Order 12866, nor is the rule significant as defined in DOT's 
Regulatory Policies and Procedures.

Unfunded Mandates Reform Act of 1995 Determinations

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act)\1\ requires that an agency prepare a budgetary impact 
statement before promulgating a rule

[[Page 60140]]

that includes a Federal mandate that may result in expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (as adjusted for inflation) in 
any one year. If a budgetary impact statement is required, section 205 
of the Unfunded Mandates Act also requires an agency to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule. As discussed in the preamble, this rule limits the 
restrictions on FAA employees holding financial interests in aviation 
industry entities. The Department therefore has determined that the 
rule will not result in expenditures by State, local or tribal 
governments or by the private sector of $100 million or more. 
Accordingly, the Unfunded Mandates Act does not apply to this 
rulemaking.
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    \1\ Pub. L. 104-4, 109 Stat. 48 (codified at 2 U.S.C. Chs. 17A-
25)
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List of Subjects in 5 CFR Part 6001

    Conflict of interests, Ethics, FAA employees, Government employees.

    Dated: November 21, 2001.
Norman Y. Mineta,
Secretary of Transportation.

    Approved: November 27, 2001.
Amy L. Comstock,
Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Department, with the 
concurrence of OGE, amends 5 CFR part 6001 as follows:

PART 6001--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF TRANSPORTATION

    1. The authority citation for part 6001 is revised to read as 
follows:

    Authority: 5 U.S.C. 301, 7301, 7353; 5 U.S.C. App. (Ethics in 
Government Act of 1978); 49 U.S.C. 322; E.O. 12674, 54 FR 15159, 3 
CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 
CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.203(a), 2635.403(a), 
2635.807.


    2. Section 6001.104 is amended by:
    a. Revising paragraph (b);
    b. Redesignating paragraph (d) as paragraph (e); and
    c. Adding new paragraph (d).
    The revision and addition read as follows:


Sec. 6001.104  Prohibited financial interests.

* * * * *
    (b) Federal Aviation Administration (FAA). Except as provided in 
paragraphs (c) and (d) of this section, no FAA employee, or spouse or 
minor child of the employee, may hold stock or have any other 
securities interest in an airline or aircraft manufacturing company, or 
in a supplier of components or parts to an airline or aircraft 
manufacturing company.
* * * * *
    (d) Waiver. An agency designee may grant a written waiver from the 
prohibition contained in paragraph (b) of this section, based on a 
determination that the waiver is not inconsistent with 5 CFR part 2635 
or otherwise prohibited by law, and that, under the particular 
circumstances, application of the prohibition is not necessary to avoid 
the appearance of misuse of position or loss of impartiality, or 
otherwise to ensure confidence in the impartiality and objectivity with 
which FAA programs are administered. A waiver under this paragraph may 
be accompanied by appropriate conditions, such as requiring execution 
of a written statement of disqualification. Notwithstanding the 
granting of any waiver, an employee remains subject to the 
disqualification requirements of 5 CFR 2635.402 and 2635.502.
* * * * *
[FR Doc. 01-29890 Filed 11-30-01; 8:45 am]
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